UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
February 9, 2018
Commission File Number 001-10888
TOTAL S.A.
(Translation of registrant’s name into English)
2, place Jean Millier
La Défense 6
92400 Courbevoie
France
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .)
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM F-3 (NOS. 333-203476, 333-203476-01, 333-203476-02 AND 333-203476-03) OF TOTAL S.A., TOTAL CAPITAL CANADA LTD., TOTAL CAPITAL INTERNATIONAL AND TOTAL CAPITAL AND THE REGISTRATION STATEMENTS ON FORM S-8 (333-183144 AND 333-222833) OF TOTAL S.A., AND TO BE PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
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TOTAL S.A. is providing on this Form 6-K its results for the four quarter of 2017 and the year ended December 31, 2017, and a description of certain recent developments relating to its business, as well as a capitalization table as of December 31, 2017, and a ratio of earnings to fixed charges for each of the five years ended December 31, 2017, 2016, 2015, 2014 and 2013, together with the computation of the ratio of earnings to fixed charges.
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TABLE OF CONTENTS
SIGNATURES | |
EXHIBIT INDEX | |
EX-99.1: Results for the Fourth Quarter of 2017 and the Year Ended December 31, 2017 | |
EX-99.2: Recent Developments | |
EX-99.3: Ratio of Earnings to Fixed Charges and Capitalization and Indebtedness | |
EX-99.4: Computation of Ratio of Earnings to Fixed Charges |
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Exhibit 99.1: | Results for the Fourth Quarter of 2017 and the Year Ended December 31, 2017 |
Exhibit 99.2: | Recent Developments |
Exhibit 99.3: | Ratio of Earnings to Fixed Charges and Capitalization and Indebtedness |
Exhibit 99.4: | Computation of Ratio of Earnings to Fixed Charges |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TOTAL S.A. | ||||
Date: February 9, 2018 | By: |
/s/
Antoine
LARENAUDIE
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Name: | Antoine LARENAUDIE | |||
Title: | Treasurer |
Exhibit 99.1
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The financial information on pages 1-15 in this exhibit concerning TOTAL S.A. and its subsidiaries and affiliates (collectively, “TOTAL” or the “Group”) with respect to the fourth quarter of 2017 and year ended December 31, 2017, has been derived from TOTAL’s unaudited consolidated balance sheets as of December 31, 2017 and unaudited statements of income, comprehensive income, cash flow and changes in equity and business segment information for the fourth quarter of 2017 and year ended December 31, 2017 presented on pages 16 to 30 of this exhibit. The following discussion should be read in conjunction with the aforementioned financial statements and with the information, including TOTAL’s audited consolidated financial statements and related notes, provided in TOTAL’s Annual Report on Form 20-F for the year ended December 31, 2016, filed with the Securities and Exchange Commission (“SEC”) on March 17, 2017.
A. | KEY FIGURES |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
in millions of dollars
except earnings per share and number of shares |
2017 | 2016 |
2017 vs
2016 |
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47,351 | 43,044 | 42,275 | +12% | Non-Group sales | 171,493 | 149,743 | +15% | |||||||||||||||||
Adjusted net operating income from business segments (a) | ||||||||||||||||||||||||
1,805 | 1,439 | 1,007 | +79% | • Exploration & Production | 5,985 | 3,217 | +86% | |||||||||||||||||
232 | 97 | 132 | +76% | • Gas, Renewables & Power | 485 | 439 | +10% | |||||||||||||||||
886 | 1,020 | 1,131 | -22% | • Refining & Chemicals | 3,790 | 4,195 | -10% | |||||||||||||||||
436 | 506 | 406 | +7% | • Marketing & Services | 1,676 | 1,559 | +8% | |||||||||||||||||
657 | 500 | 409 | +61% | Equity in net income (loss) of affiliates | 2,015 | 2,214 | -9% | |||||||||||||||||
0.37 | 1.06 | 0.20 | +85% | Fully-diluted earnings per share ($) | 3.34 | 2.51 | +33% | |||||||||||||||||
2,536 | 2,505 | 2,433 | +4% | Fully-diluted weighted-average shares (millions) | 2,495 | 2,390 | +4% | |||||||||||||||||
1,021 | 2,724 | 548 | +86% | Net income (Group share) | 8,631 | 6,196 | +39% | |||||||||||||||||
5,103 | 3,910 | 5,855 | -13% | Investments (b) | 16,896 | 20,530 | -18% | |||||||||||||||||
1,467 | 539 | 927 | +58% | Divestments (c) | 5,264 | 2,877 | +83% | |||||||||||||||||
3,638 | 3,373 | 4,928 | -26% | Net investments (d) | 11,636 | 17,757 | -34% | |||||||||||||||||
4,442 | 3,060 | 4,728 | -6% | Organic investments (e) | 14,395 | 17,484 | -18% | |||||||||||||||||
107 | 542 | 651 | -84% | Resource acquisitions | 714 | 780 | -8% | |||||||||||||||||
8,615 | 4,363 | 7,018 | +23% | Cash flow from operations | 22,319 | 16,521 | +35% | |||||||||||||||||
2,206 | (1,057 | ) | 1,913 | +15% | •Includes (increase)/decrease in working capital (f) | 827 | (1,119 | ) | n/a |
(a) | Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value. See “Analysis of business segment results” below for further details. | |
(b) | Including acquisitions and increases in non-current loans. | |
(c) | Including divestments and reimbursements of non-current loans. | |
(d) | “Net investments” = gross investments – divestments – repayment of non-current loans – other operations with non-controlling interests. | |
(e) | “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. See page 11 of this exhibit. | |
(f) | The change in working capital as determined using the replacement cost method was $2,660 million in 4Q17, $(796) million in 3Q17, $2,260 million in 4Q16, $1,184 million in 2017 and $(467) million in 2016. For information on the replacement cost method, refer to the introduction to “B. Analysis of business segment results”. See also “C. Group results — Cash flow”. |
B. | ANALYSIS OF BUSINESS SEGMENT RESULTS |
The financial information for each business segment is reported on the same basis as that used internally by the chief operating decision-maker in assessing segment performance and the allocation of segment resources. Due to their particular nature or significance, certain transactions qualifying as “special items” are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. In certain instances, certain transactions such as restructuring costs or asset disposals, which are not considered to be representative of the normal course of business, may qualify as special items although they may have occurred in prior years or are likely to recur in following years.
In accordance with IAS 2, the Group values inventories of petroleum products in its financial statements according to the First-In, First-Out (FIFO) method and other inventories using the weighted-average cost method. Under the FIFO method,the cost of inventory is based on the historic cost of acquisition or manufacture rather than the current replacement cost. In volatile energy markets, this can have a significant distorting effect on the reported income. Accordingly, the adjusted results
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of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method in order to facilitate the comparability of the Group’s results with those of its competitors and to help illustrate the operating performance of these segments excluding the impact of oil price changes on the replacement of inventories. In the replacement cost method, which approximates the Last-In, First-Out (LIFO) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end price differential between one period and another or the average prices of the period. The inventory valuation effect is the difference between the results under the FIFO and replacement cost methods.
The effect of changes in fair value presented as an adjustment item reflects, for trading inventories and storage contracts, differences between internal measures of performance used by TOTAL’s management and the accounting for these transactions under IFRS, which requires that trading inventories be recorded at their fair value using period-end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories recorded at their fair value based on forward prices. Furthermore, TOTAL, in its trading activities, enters into storage contracts, the future effects of which are recorded at fair value in the Group’s internal economic performance. IFRS, by requiring accounting for storage contracts on an accrual basis, precludes recognition of this fair value effect.
The adjusted business segment results (adjusted operating income and adjusted net operating income) are defined as replacement cost results, adjusted for special items, excluding the effect of changes in fair value. For further information on the adjustments affecting operating income on a segment-by-segment basis, and for a reconciliation of segment figures to figures reported in TOTAL’s interim consolidated financial statements, see pages 24-30 of this exhibit.
The Group measures performance at the segment level on the basis of adjusted net operating income. Net operating income comprises operating income of the relevant segment after deducting the amortization and the depreciation of intangible assets other than leasehold rights, translation adjustments and gains or losses on the sale of assets, as well as all other income and expenses related to capital employed (dividends from non-consolidated companies, income from equity affiliates and capitalized interest expenses) and after income taxes applicable to the above. The income and expenses not included in net operating income that are included in net income are interest expenses related to long-term liabilities net of interest earned on cash and cash equivalents, after applicable income taxes (net cost of net debt and non-controlling interests). Adjusted net operating income excludes the effect of the adjustments (special items and the inventory valuation effect) described above.
B.1. | Exploration & Production segment |
Environment — liquids and gas price realizations (a) |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
hydrocarbon production | 2017 | 2016 |
2017 vs
2016 |
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61.3 | 52.1 | 49.3 | +24% | Brent ($/b) | 54.2 | 43.7 | +24% | |||||||||||||||||||||
57.6 | 48.9 | 46.1 | +25% | Average liquids price ($/b) | 50.2 | 40.3 | +25% | |||||||||||||||||||||
4.23 | 4.05 | 3.89 | +9% | Average gas price ($/Mbtu) | 4.08 | 3.56 | +15% | |||||||||||||||||||||
43.3 | 38.2 | 35.6 | +22% | Average hydrocarbons price ($/boe) | 38.7 | 31.9 | +21% |
(a) | Consolidated subsidiaries, excluding fixed margins. |
Production |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
hydrocarbon production | 2017 | 2016 |
2017 vs
2016 |
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2,613 | 2,581 | 2,462 | +6% | Combined production (kboe/d) | 2,566 | 2,452 | +5% | |||||||||||||||||||||
1,389 | 1,392 | 1,257 | +11% | • Liquids (kb/d) | 1,346 | 1,271 | +6% | |||||||||||||||||||||
6,832 | 6,247 | 6,597 | +4% | • Gas (Mcf/d) | 6,662 | 6,447 | +3% |
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Hydrocarbon production was 2,613 thousand barrels of oil equivalent per day (kboe/d) in the fourth quarter of 2017, an increase of close to 6% compared to 2016, due to the following:
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+6% due to new start-ups and ramp-ups, notably Moho Nord, Kashagan, Edradour-Glenlivet, Yamal LNG and Angola LNG;
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• |
+3% portfolio effect, mainly due to taking over the giant Al-Shaheen oil field concession in Qatar and acquiring an additional 75% interest in the Barnett shale in the United States, partially offset by the exit from the southern sector of the Republic of the Congo and asset sales in Norway;
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• |
+1% related to improved security conditions in Libya and Nigeria;
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• | -1% related to the PSC price effect (1) and OPEC quotas; and | |
• | -3% due to natural field decline and the interruption of production on Elgin-Franklin following the rupture of the Forties pipeline. |
For the full-year 2017, hydrocarbon production was 2,566 kboe/d, an increase of 5% compared to 2016, due to the following:
• | +5% due to new start-ups and ramp-ups, notably Moho Nord, Kashagan, Edradour-Glenlivet and Angola LNG; | |
• | +2% portfolio effect, mainly due to taking over the giant Al-Shaheen oil field concession in Qatar and acquiring an additional 75% interest in the Barnett shale in the United States, partially offset by the exit from the southern sector of the Republic of the Congo and asset sales in Norway; | |
• | +1% related to improved security conditions in Libya and Nigeria; and | |
• | -3% due to natural field decline, the PSC price effect and OPEC quotas. |
Results |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
in millions of dollars | 2017 | 2016 |
2017 vs
2016 |
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2,185 | 2,121 | 2,066 | +6% | Non-Group sales | 8,477 | 7,629 | +11% | |||||||||||||||||||||
(5 | ) | 1,606 | (800 | ) | +99% | Operating income | 2,792 | (431 | ) | n/a | ||||||||||||||||||
348 | 521 | 25 | x13.9 |
Equity in income (loss) of affiliates and other
items |
1,546 | 1,375 | +12% | |||||||||||||||||||||
42.8 | % | 42.8 | % | 47.1 | % | Effective tax rate (a) | 41.2 | % | 27.7 | % | ||||||||||||||||||
(537 | ) | (745 | ) | (53 | ) | x10.1 | Tax on net operating income | (2,233 | ) | 401 | n/a | |||||||||||||||||
(194 | ) | 1,382 | (828 | ) | +77% | Net operating income | 2,105 | 1,345 | +57% | |||||||||||||||||||
1,999 | 57 | 1,835 | +9% | Adjustments affecting net operating income | 3,880 | 1,872 | x2.1 | |||||||||||||||||||||
1,805 | 1,439 | 1,007 | +79% | Adjusted net operating income (b) | 5,985 | 3,217 | +86% | |||||||||||||||||||||
419 | 435 | 429 | -2% | • Including income from equity affiliates | 1,542 | 1,363 | +13% | |||||||||||||||||||||
3,490 | 3,228 | 4,833 | -28% | Investments | 12,802 | 16,085 | -20% | |||||||||||||||||||||
1,334 | 339 | 818 | +63% | Divestments | 1,918 | 2,187 | -12% | |||||||||||||||||||||
3,120 | 2,388 | 3,705 | -16% | Organic investments | 11,310 | 14,464 | -22% | |||||||||||||||||||||
3,826 | 2,633 | 4,039 | -5% | Cash flow from operations | 11,459 | 9,010 | +27% |
(a) | “Effective tax rate” = tax on adjusted net operating income / (adjusted net operating income – income from equity affiliates – dividends received from investments – impairment of goodwill + tax on adjusted net operating income). | |
(b) | Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit. |
The Exploration & Production segment’s adjusted net operating income was:
• | $1,805 million in the fourth quarter 2017, an increase of 79% compared to the fourth quarter 2016, notably due to production growth, cost reductions and an increase in oil and gas prices; and | |
• | $5,985 million for the full-year 2017, an increase of 86% compared to 2016, for the same reasons as above. |
(1) | The “price effect” refers to the impact of changing hydrocarbon prices on entitlement volumes from production sharing and buyback contracts. For example, as the price of oil or gas increases above certain pre-determined levels, TOTAL’s share of production normally decreases. |
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The effective tax rate increased from 27.7% in 2016 compared to 41.2% in 2017, in line with the rise in hydrocarbon prices.
Technical costs for consolidated affiliates, calculated in accordance with ASC 932 (1) , continue to fall, to $19.5/boe in 2017 compared to $20.4/boe in 2016. This decrease was mainly due to the reduction in operating costs from $5.9/boe in 2016 to $5.4/boe in 2017.
Adjusted net operating income for the Exploration & Production segment excludes special items. In the fourth quarter of 2017, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $1,999 million, consisting essentially of an impairment of Gladstone LNG in Australia and assets in Congo, compared to a positive impact of $1,835 million in the fourth quarter of 2016, consisting essentially of impairments on Gladstone LNG in Australia, Angola LNG, and Laggan-Tormore in the United Kingdom, reflecting the decrease in gas price assumptions for the coming years.
The segment’s cash flow from operating activities was $3,826 million in the fourth quarter of 2017, a decrease of 5% compared to $4,039 million in the fourth quarter of 2016. Operating cash flow in the fourth quarter of 2017 excluding the change in working capital at replacement cost of $(89) million ($1,144 million in the fourth quarter of 2016) was $3,915 million (2) , an increase of 35% compared to $2,895 million in the fourth quarter of 2016, notably due to increases in production, hydrocarbon prices and lower operating costs. Operating cash flow for the fourth quarter of 2017 excluding the change in working capital at replacement cost and without financial charges was $4,263 million compared to $3,142 million in the fourth quarter of 2016, an increase of 36%.
For the full-year 2017, the segment’s cash flow from operating activities was $11,459 million, an increase of 27% compared to $9,010 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $(1,932) million ($(726) million in 2016) was $13,391 million compared to $9,736 million in 2016, an increase of 38% whereas oil prices only increased by 24%, notably due to production ramp-ups on major projects started up since 2016, including Kashagan and Moho Nord, the increase in hydrocarbon prices and operating cost reductions. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost and without financial charges was $14,753 million compared to $10,592 million in 2016, an increase of 27%.
(1) | FASB Accounting Standards Codification Topic 932, Extractive industries – Oil and Gas. | |
(2) | Operating cash flow excluding the change in working capital at replacement cost provides information on underlying cash flow without the short-term impacts of changes in inventory and other working capital elements at replacement cost. For information on the replacement cost method, refer to the introduction to “B. Analysis of business segment results”, above. |
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B.2. | Gas, Renewables & Power segment |
Results |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
in millions of dollars | 2017 | 2016 |
2017 vs
2016 |
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4,083 | 2,903 | 3,675 | +11% | Non-Group sales | 12,854 | 10,124 | +27% | |||||||||||||||||||||
(310 | ) | 21 | (59 | ) | x5.3 | Operating income | (276 | ) | (161 | ) | -71% | |||||||||||||||||
51 | 12 | (50 | ) | n/a | Equity in income (loss) of affiliates and other items | 31 | 71 | -56% | ||||||||||||||||||||
(86 | ) | 7 | (5 | ) | x17.2 | Tax on net operating income | (140 | ) | (4 | ) | x35.0 | |||||||||||||||||
(345 | ) | 40 | (114 | ) | x3.0 | Net operating income | (385 | ) | (94 | ) | x4.1 | |||||||||||||||||
577 | 57 | 246 | x2.3 | Adjustments affecting net operating income | 870 | 533 | +63% | |||||||||||||||||||||
232 | 97 | 132 | +76% | Adjusted net operating income (a) | 485 | 439 | +10% | |||||||||||||||||||||
306 | 99 | (118 | ) | n/a | Investments | 797 | 1,221 | -35% | ||||||||||||||||||||
46 | ― | 29 | +59% | Divestments | 73 | 166 | -56% | |||||||||||||||||||||
85 | 98 | (57 | ) | n/a | Organic investments | 353 | 270 | +31% | ||||||||||||||||||||
657 | 325 | 732 | -10% | Cash flow from operations | 993 | 538 | +85% |
(a) | Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit. |
Adjusted net operating income for the Gas, Renewables & Power segment was $232 million in the fourth quarter 2017, including in particular the delivery of the El Pelicano solar farm in Chile, compared to $132 million in the fourth quarter of 2016, an increase of 76%. In 2017, adjusted net operating income increased by 10% compared to 2016.
Adjusted net operating income for the Gas, Renewables & Power segment excludes special items. In the fourth quarter of 2017, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $577 million compared to a positive impact of $246 million in the fourth quarter of 2016.
The segment’s cash flow from operating activities was $657 million in the fourth quarter of 2017, a decrease of 10% compared to $732 million in the fourth quarter of 2016. Operating cash flow in the fourth quarter of 2017 excluding the change in working capital at replacement cost of $642 million ($629 million in the fourth quarter of 2016) was $15 million, a decrease of 85% compared to $103 million in the fourth quarter of 2016. Operating cash flow for the fourth quarter of 2017 excluding the change in working capital at replacement cost and without financial charges was $25 million compared to $124 million in the fourth quarter of 2016, a decrease of 80%.
For the full-year 2017, the segment’s cash flow from operating activities was $993 million, an increase of 85% compared to $538 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $761 million ($413 million in 2016) was $232 million, an increase of 86% compared to $125 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost and without financial charges was $294 million compared to $176 million in 2016, an increase of 67%.
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B.3. | Refining & Chemicals segment |
Refinery throughput and utilization rates (a) |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
2017 | 2016 |
2017 vs
2016 |
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1,842 | 1,877 | 2,010 | -8% | Total refinery throughput (kb/d) | 1,827 | 1,965 | -7% | |||||||||||||||||||||
648 | 648 | 717 | -10% | • France | 624 | 669 | -7% | |||||||||||||||||||||
784 | 802 | 787 | ― | • Rest of Europe | 767 | 802 | -4% | |||||||||||||||||||||
410 | 427 | 506 | -19% | • Rest of world | 436 | 494 | -12% | |||||||||||||||||||||
91 | % | 90 | % | 87 | % | Utilization rates based on crude only (b) | 88 | % | 85 | % |
(a) | Includes share of TotalErg, and African refineries reported in the Marketing & Services segment. | ||
(b) | Based on distillation capacity at the beginning of the year. |
Refinery throughput:
• | decreased by 8% in the fourth quarter of 2017 compared to the fourth quarter of 2016, mainly as a result of the ending of oil refining at La Mède and maintenance activities at the Port Arthur refinery in the United States; and | |
• | decreased by 7% for the full-year 2017 compared to 2016 as a result of the definitive ending of distillation capacity at La Mède (France) and Lindsey (UK) and the temporary shutdown due to Hurricane Harvey in the United States. |
Results |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
in millions of dollars | 2017 | 2016 |
2017 vs
2016 |
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35.5 | 48.2 | 41.0 | -13% | European refining margin indicator - ERMI ($/t) | 40.9 | 34.1 | +20% | |||||||||||||||||||||
20,661 | 18,923 | 19,077 | +8% | Non-Group sales | 75,505 | 65,632 | +15% | |||||||||||||||||||||
1,248 | 1,348 | 1,593 | -22% | Operating income | 4,170 | 4,991 | -16% | |||||||||||||||||||||
199 | 179 | 162 | +23% | Equity in income (loss) of affiliates and other items | 2,979 | 779 | x3.8 | |||||||||||||||||||||
(67 | ) | (379 | ) | (392 | ) | -83% | Tax on net operating income | (944 | ) | (1,244 | ) | -24% | ||||||||||||||||
1,380 | 1,148 | 1,363 | +1% | Net operating income | 6,205 | 4,526 | +37% | |||||||||||||||||||||
(494 | ) | (128 | ) | (232 | ) | x2.1 | Adjustments affecting net operating income | (2,415 | ) | (331 | ) | x7.3 | ||||||||||||||||
886 | 1,020 | 1,131 | -22% | Adjusted net operating income (a) | 3,790 | 4,195 | -10% | |||||||||||||||||||||
710 | 357 | 566 | +25% | Investments | 1,734 | 1,861 | -7% | |||||||||||||||||||||
36 | 24 | 15 | x2.4 | Divestments | 2,820 | 88 | x32 | |||||||||||||||||||||
684 | 338 | 548 | +25% | Organic investments | 1,625 | 1,642 | -1% | |||||||||||||||||||||
3,041 | 662 | 1,746 | +74% | Cash flow from operations | 7,440 | 4,585 | +62% |
(a) | Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit. |
The Group’s European refining margin indicator (“ERMI”) increased to $40.9/t on average in 2017, due to elevated petroleum product demand. Petrochemicals continued to benefit from a favorable environment albeit down compared to a year ago.
The Refining & Chemicals segment’s adjusted net operating income was:
• | $886 million in the fourth quarter of 2017, a decrease of 22% compared to 2016 due to maintenance activities at Port Arthur in the United States and the sale of Atotech; and |
• | $3,790 million for the full-year 2017, a decrease of 10% compared to 2016, notably due to the impact of Hurricane Harvey, the impact of modernization work on the Antwerp platform and the sale of Atotech in early 2017 as well as lower trading results due to the evolution of the market into backwardation. |
Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. In the fourth quarter of 2017, the exclusion of the inventory valuation effect had a negative impact on the segment’s adjusted net operating income of $354 million compared to a negative impact of $281 million in the fourth quarter of 2016. The exclusion of special items in the fourth quarter of 2017 had a negative impact on the segment’s adjusted net operating income of $140 million compared to a positive impact of $49 million in the fourth quarter of 2016.
6 |
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The segment’s cash flow from operating activities was $3,041 million in the fourth quarter of 2017, an increase of 74% compared to $1,746 million in the fourth quarter of 2016. Operating cash flow in the fourth quarter of 2017 excluding the change in working capital at replacement cost of $1,888 million ($381 million in the fourth quarter of 2016) was $1,153 million, a decrease of 16% compared to $1,365 million in the fourth quarter of 2016. Operating cash flow for the fourth quarter of 2017 excluding the change in working capital at replacement cost and without financial charges was $1,142 million compared to $1,368 million in the fourth quarter of 2016, a decrease of 17%.
For the full-year 2017, the segment’s cash flow from operating activities was $7,440 million, an increase of 62% compared to $4,585 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $2,683 million ($(289) million in 2016) was $4,757 million, a decrease of 2% compared to $4,874 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost and without financial charges was $4,728 million compared to $4,873 million in 2016, a decrease of 3%.
B.4. | Marketing & Services segment |
Petroleum product sales |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
sales in kb/d (a) | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
1,821 | 1,807 | 1,808 | +1% | Total Marketing & Services sales | 1,779 | 1,793 | -1% | |||||||||||||||||||||
1,046 | 1,072 | 1,123 | -7% | • Europe | 1,049 | 1,093 | -4% | |||||||||||||||||||||
775 | 735 | 685 | +13% | • Rest of world | 730 | 700 | +4% |
(a) | Excludes trading and bulk refining sales (see page 12 of this exhibit); includes share of TotalErg. |
Petroleum product sales were generally stable compared to the previous year, with a move toward Africa and Asia where the Group has strong growth. European sales were affected by the divestment of mature LPG distribution activities in Belgium and Germany.
Results |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
in millions of dollars | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
20,419 | 19,086 | 17,454 | +17% | Non-Group sales | 74,634 | 66,351 | +12% | |||||||||||||||||||||
511 | 574 | 398 | +28% | Operating income | 1,819 | 1,789 | +2% | |||||||||||||||||||||
76 | 133 | 41 | +85% | Equity in income (loss) of affiliates and other items | 497 | 170 | x2.9 | |||||||||||||||||||||
(157 | ) | (173 | ) | (132 | ) | +19% | Tax on net operating income | (561 | ) | (541 | ) | +4% | ||||||||||||||||
430 | 534 | 307 | +40% | Net operating income | 1,755 | 1,418 | +24% | |||||||||||||||||||||
6 | (28 | ) | 99 | -94% | Adjustments affecting net operating income | (79 | ) | 141 | n/a | |||||||||||||||||||
436 | 506 | 406 | +7% | Adjusted net operating income (a) | 1,676 | 1,559 | +8% | |||||||||||||||||||||
570 | 190 | 500 | +14% | Investments | 1,457 | 1,245 | +17% | |||||||||||||||||||||
45 | 150 | 65 | -31% | Divestments | 413 | 424 | -3% | |||||||||||||||||||||
533 | 205 | 460 | +16% | Organic investments | 1,019 | 1,003 | +2% | |||||||||||||||||||||
992 | 596 | 340 | x2.9 | Cash flow from operations | 2,130 | 1,754 | +21% |
(a) | Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit. |
Marketing & Services results continue to grow in a context of strong retail margins, notably in Africa. Compared to a year ago, adjusted net operating income increased by 7% to $436 million in the fourth quarter of 2017, and by 8% to $1,676 million for the full-year 2017.
Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. In the fourth quarter of 2017, the exclusion of the inventory valuation effect had a negative impact on the segment’s adjusted net operating income of $11 million compared to a positive impact of $14 million in the fourth quarter of
7 |
|
2016. The exclusion of special items in the fourth quarter of 2017 had a positive impact on the segment’s adjusted net operating income of $17 million compared to a positive impact of $85 million in the fourth quarter of 2016.
The segment’s cash flow from operating activities was $992 million in the fourth quarter of 2017, 2.9 times higher than $340 million in the fourth quarter of 2016. Operating cash flow in the fourth quarter of 2017 excluding the change in working capital at replacement cost of $371 million ($(77) million in the fourth quarter of 2016) was $621 million, an increase of 49% compared to $417 million in the fourth quarter of 2016. Operating cash flow for the fourth quarter of 2017 excluding the change in working capital at replacement cost and without financial charges was $644 million compared to $440 million in the fourth quarter of 2016, an increase of 46%.
For the full-year 2017, the segment’s cash flow from operating activities was $2,130 million, an increase of 21% compared to $1,754 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $(21) million ($(133) million in 2016) was $2,151 million, an increase of 14% compared to $1,887 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost and without financial charges was $2,242 million compared to $1,996 million in 2016, an increase of 14%.
C. | GROUP RESULTS |
Net income (Group share) |
Net income (Group share) was $1,021 million in the fourth quarter of 2017, an increase of 86% compared to $548 million in the fourth quarter of 2016. It was $8,631 million for the full-year 2017 compared to $6,196 million in 2016, an increase of 39%.
Adjusted net income excludes the after-tax inventory effect, special items and the impact of changes in fair value.
Total adjustments affecting net income (Group share) ( 1 ) were:
• | -$1,851 million in the fourth quarter of 2017, including an impairment of Gladstone LNG in Australia and assets in Congo; and | |
• | -$1,947 million for the full-year 2017, including mainly an impairment of Fort Hills in Canada, Gladstone LNG in Australia and assets in Congo, partially offset by a gain on the sale of Atotech. |
Adjusted net income was $2,872 million in the fourth quarter of 2017, an increase of 19% compared to the fourth quarter of 2016, and $10,578 million for the full-year 2017, an increase of 28% compared to $8,287 million in 2016. The increase was the result of a much higher contribution from Exploration & Production and the continued decrease in the Group’s breakeven.
The number of fully-diluted shares was 2,536 million on December 31, 2017, compared to 2,436 million on December 31, 2016.
Divestments — acquisitions |
Asset sales completed were:
• | $1,119 million in the fourth quarter of 2017, comprised mainly of the sale of mature assets in Gabon, Gina Krog in Norway and part of the interest in the Fort Hills project in Canada, compared to $416 million in the fourth quarter of 2016; and | |
• | $4,239 million for the full-year 2017, essentially comprised of the sale of Atotech, mature assets in Gabon, Gina Krog in Norway, part of the interest in the Fort Hills project in Canada, the SPMR pipeline and LPG activities in Germany, compared to $1,864 million in 2016. |
(1) | Details shown on page 13 of this exhibit. |
8 |
|
Acquisitions completed were:
• | $313 million in the fourth quarter of 2017, mainly comprised of the acquisitions of a 23% equity share in EREN Renewable Energy and a 12.5% equity share in the Anchor license in the United States, compared to $616 million in the fourth quarter of 2016; and | |
• | $1,476 million for the full-year 2017, mainly comprised of the bonus related to the license for Elk-Antelope in Papua New Guinea, a marketing and logistics network in East Africa and a 23% equity share in Tellurian, compared to $2,033 million in 2016. |
In addition, in early January 2018, the Group finalized the acquisition of assets in Brazil from Petrobras for $1.95 billion as well as the sale of TotalErg in Italy for $415 million (including the B2B and LPG business).
Cash flow |
The Group’s cash flow from operating activities in the fourth quarter of 2017 was $8,615 million, an increase of 23% compared to $7,018 million in the fourth quarter of 2016. The change in working capital at replacement cost in the fourth quarter of 2017, which is the (increase)/decrease in working capital of $2,206 million as determined in accordance with IFRS adjusted for the pre-tax inventory valuation effect of $454 million, was $2,660 million compared to $2,260 million in the fourth quarter of 2016. Operating cash flow excluding the change in working capital at replacement cost in the fourth quarter of 2017 was $5,955 million, an increase of 25% compared to $4,758 million in the fourth quarter of 2016. Operating cash flow for the fourth quarter of 2017 excluding the change in working capital at replacement cost and without financial charges (debt adjusted cash flow, “DACF”) was $6,233 million, an increase of 26% compared to $4,964 million in the fourth quarter of 2016. The Group’s net cash flow ( 1 ) was $2,317 million in the fourth quarter of 2017 compared to $(170) million in the fourth quarter of 2016, mainly due to the increase in operating cash flow before working capital changes and the increase in asset sales this quarter, leading to a decrease in net investments.
For the full-year 2017, the Group’s cash flow from operating activities was $22,319 million, an increase of 35% compared to $16,521 million in 2016. The change in working capital at replacement cost for the full-year 2017, which is the (increase)/decrease in working capital of $827 million as determined in accordance with IFRS adjusted for the pre-tax inventory valuation effect of $357 million, was $1,184 million compared to $(467) million in 2016. Operating cash flow excluding the change in working capital at replacement cost for the full-year 2017 was $21,135 million, an increase of 24% compared to $16,988 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost and without financial charges (DACF) was $22,183 million, an increase of 26% compared to $17,581 million in 2016. The Group’s net cash flow was $9,499 million for the full-year 2017 compared to $(769) million in 2016, mainly due to the nearly $4 billion increase in operating cash flow before working capital changes, the decrease in net investments related to the $3 billion decrease in organic investments and the sale of Atotech.
D. | RETURN ON EQUITY |
Return on equity for the twelve months ended December 31, 2017, was 10.1%, an increase compared to last year.
in millions of dollars |
01/01/2017 –
12/31/2017 |
10/01/2016 –
09/30/2017 |
01/01/2016 –
12/31/2016 |
|||||||||
Adjusted net income | 10,762 | 10,244 | 8,447 | |||||||||
Average adjusted shareholders’ equity | 106,078 | 105,130 | 96,929 | |||||||||
Return on equity (ROE) | 10.1 | % | 9.7 | % | 8.7 | % |
Return on average capital employed increased to 9.4% in 2017 from 7.5% in 2016.
in millions of dollars |
01/01/2017 –
12/31/2017 |
10/01/2016 –
09/30/2017 |
01/01/2016 –
12/31/2016 |
|||||||||
Adjusted net income | 11,958 | 11,298 | 9,274 | |||||||||
Average capital employed | 127,575 | 130,860 | 124,283 | |||||||||
ROACE | 9.4 | % | 8.6 | % | 7.5 | % |
(1) | “Net cash flow” = operating cash flow before working capital changes – net investments (including other transactions with non-controlling interests). |
9 |
|
E. | PROPOSED DIVIDEND |
The Board of Directors met on February 7, 2018 and decided to propose to the Combined Shareholders’ Meeting, which will be held on June 1, 2018, an annual dividend of €2.48/share for 2017, a 1.2% increase compared to 2016. Given the three previous 2016 interim quarterly dividends of €0.62/share, a fourth quarter 2017 dividend of €0.62/share is therefore proposed.
The Board of Directors also decided to propose to the Combined Shareholders’ Meeting the alternative for shareholders to receive the fourth quarter 2017 dividend in cash or in new shares of the company without a discount. Subject to approval at the Combined Shareholders’ Meeting, the ex-dividend date for the fourth quarter dividend will be June 11, 2018, and the payment of the dividend in cash or the delivery of the shares issued in lieu of the dividend in cash is set for June 28, 2018.
F. | SENSITIVITIES 2018 (a) |
Scenario retained | Change |
Estimated impact on
adjusted net operating income |
Estimated impact on
cash flow from operations |
|||||
Dollar | $1.2/€ | +/- $0.1 per € | -/+ $0.1 B | ≈ $0 B | ||||
Brent | $50/b | +/- $10/b | +/- $2.3 B | +/- $2.8 B | ||||
European refining margin indicator (ERMI) | $35/t | +/- $10/t | +/- $0.5 B | +/- $0.6 B |
(a) | Sensitivities are revised once per year upon publication of the previous year’s fourth quarter results. Sensitivities are estimates based on assumptions about the Group’s portfolio in 2018. Actual results could vary significantly from estimates based on the application of these sensitivities. The impact of the $-€ sensitivity on adjusted net operating income is essentially attributable to Refining & Chemicals. |
G. | SUMMARY AND OUTLOOK |
Since the end of 2017, Brent has been trading between $65-70/b, supported by strong demand (+1.6 Mb/d in 2017), the extended production cuts by OPEC and Russia and a decrease in crude oil inventories, which, nevertheless, remain higher than the past five-year average, which could contribute to continuing price volatility. The Group maintains its strategy to cut costs with the objective of achieving over $4 billion of cost savings in 2018 and production costs of $5.5/boe for the year. Organic investments are projected at around $14 billion in 2018, in line with the target of $13-15 billion.
In the Upstream, production is expected to increase by 6% in 2018, confirming the objective to grow by 5% per year on average between 2016 and 2022. As a result of this growth and the portfolio mix, the Group’s cash flow sensitivity to a $10/b change in the price of Brent increases to $2.8 billion in 2018 from $2.5 billion in 2017. The Group intends to take advantage of the favorable cost environment by continuing to launch projects in 2018. The growing demand for LNG supports the Group’s strategy to develop along the integrated gas value chain, as illustrated by the announced acquisition of Engie’s LNG portfolio.
In a context of sharply higher oil prices, rising refined product inventories, due to high global refining utilization rates, and seasonally weak winter demand, refining margins have decreased since December 2017. Despite the current weakness in refining margins, the Downstream is expected to generate $7 billion of operating cash flow once again this year. Refining & Chemicals continues to expand its high-return integrated platforms notably in the United States and in Asia–Middle East. Marketing & Services continues to pursue its growth strategy in high-potential markets.
The Group’s pre-dividend organic breakeven is continuing to fall with an objective of $25/b in 2018.
After a period of heavy investment, the Group’s cash flow generation is growing strongly, driven by an increase in production that is at the best level among the majors. The Group has taken advantage of the low part of the oil price cycle to acquire high-quality resources at attractive prices and emerge stronger with better visibility on its cash flow generation and a net-debt-to-capital ratio below 20% ( 1 ) . In this context, the Board of Directors is proposing a shareholder return policy for the coming three years comprised of dividend increases and share buybacks.
(1) | Excluding IFRS16 impact (under evaluation). |
10 |
|
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of the management of TOTAL and on the information currently available to such management. Forward-looking statements include information concerning forecasts, projections, anticipated synergies, and other information concerning possible or assumed future results of TOTAL, and may be preceded by, followed by, or otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “plans”, “targets”, “estimates” or similar expressions.
Forward-looking statements are not assurances of results or values. They involve risks, uncertainties and assumptions. TOTAL’s future results and share value may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond TOTAL’s ability to control or predict. Except for its ongoing obligations to disclose material information as required by applicable securities laws, TOTAL does not have any intention or obligation to update forward-looking statements after the distribution of this document, even if new information, future events or other circumstances have made them incorrect or misleading.
You should understand that various factors, certain of which are discussed elsewhere in this document and in the documents referred to in, or incorporated by reference into, this document, could affect the future results of TOTAL and could cause results to differ materially from those expressed in such forward-looking statements, including:
• | material adverse changes in general economic conditions or in the markets served by TOTAL, including changes in the prices of oil, natural gas, refined products, petrochemical products and other chemicals; | |
• | changes in currency exchange rates and currency devaluations; | |
• | the success and the economic efficiency of oil and natural gas exploration, development and production programs, including without limitation, those that are not controlled and/or operated by TOTAL; | |
• | uncertainties about estimates of changes in proven and potential reserves and the capabilities of production facilities; | |
• | uncertainties about the ability to control unit costs in exploration, production, refining and marketing (including refining margins) and chemicals; | |
• | changes in the current capital expenditure plans of TOTAL; | |
• | the ability of TOTAL to realize anticipated cost savings, synergies and operating efficiencies; | |
• | the financial resources of competitors; | |
• | changes in laws and regulations, including tax and environmental laws and industrial safety regulations; | |
• | the quality of future opportunities that may be presented to or pursued by TOTAL; | |
• | the ability to generate cash flow or obtain financing to fund growth and the cost of such financing and liquidity conditions in the capital markets generally; | |
• | the ability to obtain governmental or regulatory approvals; | |
• | the ability to respond to challenges in international markets, including political or economic conditions, including international armed conflict, and trade and regulatory matters; | |
• | the ability to complete and integrate appropriate acquisitions, strategic alliances and joint ventures; | |
• | changes in the political environment that adversely affect exploration, production licenses and contractual rights or impose minimum drilling obligations, price controls, nationalization or expropriation, and regulation of refining and marketing, chemicals and power generating activities; | |
• | the possibility that other unpredictable events such as labor disputes or industrial accidents will adversely affect the business of TOTAL; and | |
• | the risk that TOTAL will inadequately hedge the price of crude oil or finished products. |
For additional factors, you should read the information set forth under “Item 3. Risk Factors”, “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk” in TOTAL’s Form 20-F for the year ended December 31, 2016.
11 |
|
OPERATING INFORMATION BY SEGMENT
• | Exploration & Production |
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
Combined liquids and gas production by region (kboe/d) | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
765 | 730 | 752 | +2% | Europe and Central Asia | 762 | 757 | +1% | |||||||||||||||||||||
659 | 665 | 625 | +5% | Africa | 654 | 634 | +3% | |||||||||||||||||||||
595 | 592 | 503 | +18% | Middle East and North Africa | 559 | 517 | +8% | |||||||||||||||||||||
356 | 357 | 319 | +11% | Americas | 348 | 279 | +25% | |||||||||||||||||||||
239 | 237 | 263 | -9% | Asia-Pacific | 244 | 265 | -8% | |||||||||||||||||||||
2,613 | 2,581 | 2,462 | +6% | Total production | 2,566 | 2,452 | +5% | |||||||||||||||||||||
656 | 659 | 561 | +17% | • Including equity affiliates | 639 | 600 | +7% | |||||||||||||||||||||
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
Liquids production by region (kb/d) | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
265 | 257 | 258 | +3% | Europe and Central Asia | 265 | 249 | +6% | |||||||||||||||||||||
501 | 517 | 483 | +4% | Africa | 502 | 509 | -1% | |||||||||||||||||||||
457 | 452 | 365 | +25% | Middle East and North Africa | 419 | 373 | +12% | |||||||||||||||||||||
137 | 138 | 121 | +13% | Americas | 132 | 109 | +20% | |||||||||||||||||||||
29 | 29 | 30 | -2% | Asia-Pacific | 28 | 31 | -7% | |||||||||||||||||||||
1,389 | 1,392 | 1,257 | +11% | Total production | 1,346 | 1,271 | +6% | |||||||||||||||||||||
311 | 311 | 233 | +34% | • Including equity affiliates | 283 | 247 | +15% | |||||||||||||||||||||
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
Gas production by region (Mcf/d) | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
2,657 | 2,556 | 2,665 | — | Europe and Central Asia | 2,672 | 2,737 | -2% | |||||||||||||||||||||
980 | 663 | 710 | +38% | Africa | 759 | 621 | +22% | |||||||||||||||||||||
759 | 778 | 767 | -1% | Middle East and North Africa | 772 | 795 | -3% | |||||||||||||||||||||
1,225 | 1,228 | 1,108 | +11% | Americas | 1,212 | 944 | +28% | |||||||||||||||||||||
1,211 | 1,202 | 1,347 | -10% | Asia-Pacific | 1,247 | 1,350 | -8% | |||||||||||||||||||||
6,832 | 6,427 | 6,597 | +4% | Total production | 6,662 | 6,447 | +3% | |||||||||||||||||||||
2,022 | 1,798 | 1,779 | +14% | • Including equity affiliates | 1,916 | 1,894 | +1% | |||||||||||||||||||||
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
Liquefied natural gas | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
2.67 | 2.95 | 2.75 | -3% | LNG sales (a) (Mt) | 11.23 | 10.99 | +2% |
(a) | Sales, Group share, excluding trading; 2017 data restated to reflect volume estimates for Bontang LNG in Indonesia based on the 2017 SEC coefficient. |
• | Downstream (Refining & Chemicals and Marketing & Services) |
4Q17 | 3Q17 (a) | 4Q16 |
4Q17 vs
4Q16 |
Refined product sales by region (kb/d) (b) | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
2,034 | 2,246 | 2,330 | -13% | Europe | 2,142 | 2,355 | -9% | |||||||||||||||||||||
637 | 633 | 569 | +12% | Africa | 604 | 551 | +10% | |||||||||||||||||||||
479 | 537 | 313 | +53% | Americas | 560 | 517 | +8% | |||||||||||||||||||||
692 | 728 | 997 | -31% | Rest of world | 713 | 760 | -6% | |||||||||||||||||||||
3,842 | 4,144 | 4,209 | -9% | Total consolidated sales | 4,019 | 4,183 | -4% | |||||||||||||||||||||
587 | 583 | 678 | -13% | • Including bulk sales | 581 | 700 | -17% | |||||||||||||||||||||
1,434 | 1,754 | 1,723 | -17% | • Including trading | 1,659 | 1,690 | -2% |
(a) | 3Q2017 data restated. | |
(b) | Includes share of TotalErg. |
12 |
|
ADJUSTMENT ITEMS
• | Adjustments to net income (Group share) |
4Q17 | 3Q17 | 4Q16 | in millions of dollars | 2017 | 2016 | |||||||||||||||
(2,218 | ) | (123 | ) | (2,133 | ) | Special items affecting net income (Group share) | (2,213 | ) | (2,567 | ) | ||||||||||
188 | — | (45 | ) | • Gain (loss) on asset sales | 2,452 | 267 | ||||||||||||||
(5 | ) | (2 | ) | (10 | ) | • Restructuring charges | (66 | ) | (32 | ) | ||||||||||
(2,060 | ) | (74 | ) | (1,886 | ) | • Impairments | (3,884 | ) | (2,097 | ) | ||||||||||
(341 | ) | (47 | ) | (192 | ) | • Other | (715 | ) | (705 | ) | ||||||||||
354 | 183 | 262 | After-tax inventory effect: FIFO vs. replacement cost | 282 | 479 | |||||||||||||||
13 | (10 | ) | 12 | Effect of changes in fair value | (16 | ) | (3 | ) | ||||||||||||
(1,851 | ) | 50 | (1,859 | ) | Total adjustments affecting net income | (1,947 | ) | (2,091 | ) |
INVESTMENTS — DIVESTMENTS
4Q17 | 3Q17 | 4Q16 |
4Q17 vs
4Q16 |
in millions of dollars | 2017 | 2016 |
2017 vs
2016 |
|||||||||||||||||||||
4,442 | 3,060 | 4,728 | -6% | Organic investments | 14,395 | 17,484 | -18% | |||||||||||||||||||||
181 | 161 | 119 | +52% | • Capitalized exploration | 619 | 655 | -5% | |||||||||||||||||||||
207 | 153 | 157 | +32% | • Increase in non-current loans | 961 | 1,121 | -14% | |||||||||||||||||||||
(348 | ) | (337 | ) | (511 | ) | -32% | • Repayment of non-current loans | (1,025 | ) | (1,013 | ) | +1% | ||||||||||||||||
313 | 513 | 616 | -49% | Acquisitions | 1,476 | 2,033 | -27% | |||||||||||||||||||||
1,119 | 202 | 416 | x2.7 | Asset sales | 4,239 | 1,864 | x2.3 | |||||||||||||||||||||
(2 | ) | (2 | ) | — | n/a | Other transactions with non-controlling interests | (4 | ) | (104 | ) | n/a | |||||||||||||||||
3,638 | 3,373 | 4,928 | -26% | Net investments | 11,636 | 17,757 | -34% |
NET-DEBT-TO-EQUITY RATIO
Current borrowings | 12/31/2017 | 06/30/2017 | 12/31/2016 | |||||||||
Current borrowings | 11,096 | 11,206 | 13,920 | |||||||||
Net current financial assets | (3,148 | ) | (2,306 | ) | (4,221 | ) | ||||||
Net financial assets classified as held for sale | 0 | (2 | ) | (140 | ) | |||||||
Non-current financial debt | 41,340 | 40,226 | 43,067 | |||||||||
Hedging instruments of non-current debt | (679 | ) | (626 | ) | (908 | ) | ||||||
Cash and cash equivalents | (33,185 | ) | (28,583 | ) | (24,597 | ) | ||||||
Net debt | 15,424 | 19,915 | 27,121 | |||||||||
Shareholders’ equity – Group share | 111,556 | 109,801 | 98,680 | |||||||||
Estimated dividend payable | (1,874 | ) | (1,826 | ) | (1,581 | ) | ||||||
Non-controlling interests | 2,481 | 2,799 | 2,894 | |||||||||
Adjusted shareholders’ equity | 112,163 | 110,774 | 99,993 | |||||||||
Net-debt-to-equity ratio | 13.8 | % | 18.0 | % | 27.1 | % | ||||||
Net-debt-to-capital ratio (a) | 12.1 | % | 15.2 | % | 21.3 | % |
(a) | Net debt / (adjusted shareholders’ equity + net debt). |
13 |
|
RETURN ON AVERAGE CAPITAL EMPLOYED
• | Full-year 2017 |
in millions of dollars |
Exploration &
Production |
Gas, Renewables
& Power |
Refining &
Chemicals |
Marketing
& Services |
||||||||||||
Adjusted net operating income | 5,985 | 485 | 3,790 | 1,676 | ||||||||||||
Capital employed at 12/30/2016 (a) | 107,617 | 4,976 | 11,618 | 5,884 | ||||||||||||
Capital employed at 12/30/2017 (a) | 107,921 | 4,692 | 11,045 | 6,929 | ||||||||||||
ROACE | 5.6 | % | 10.0 | % | 33.4 | % | 26.2 | % |
(a) | At replacement cost (excluding after-tax inventory effect). |
• | Twelve months ended September 30, 2017 |
in millions of dollars |
Exploration &
Production |
Gas, Renewables
& Power |
Refining &
Chemicals |
Marketing
& Services |
||||||||||||
Adjusted net operating income | 5,187 | 385 | 4,035 | 1,646 | ||||||||||||
Capital employed at 09/30/2016 (a) | 109,210 | 6,058 | 12,034 | 5,704 | ||||||||||||
Capital employed at 09/30/2017 (a) | 110,114 | 5,388 | 11,919 | 6,871 | ||||||||||||
ROACE | 4.7 | % | 6.7 | % | 33.7 | % | 26.2 | % |
(a) | At replacement cost (excluding after-tax inventory effect). |
• | Full-year 2016 |
in millions of dollars |
Exploration &
Production |
Gas, Renewables
& Power |
Refining &
Chemicals |
Marketing
& Services |
||||||||||||
Adjusted net operating income | 3,217 | 439 | 4,195 | 1,559 | ||||||||||||
Capital employed at 12/31/2015 (a) | 103,791 | 4,340 | 10,454 | 5,875 | ||||||||||||
Capital employed at 12/31/2016 (a) | 107,617 | 4,975 | 11,618 | 5,884 | ||||||||||||
ROACE | 3.0 | % | 9.4 | % | 38.0 | % | 26.5 | % |
(a) | At replacement cost (excluding after-tax inventory effect). |
14 |
|
MAIN INDICATORS
Chart updated around the middle of the month following the end of each quarter.
€/$ | Brent ($/b) |
Average liquids
price (a) ($/b) |
Average gas
price ($/Mbtu) (a) |
ERMI (b) ($/t) (c) | ||||||||||||||||
Fourth quarter 2017 | 1.18 | 61.3 | 57.6 | 4.23 | 35.5 | |||||||||||||||
Third quarter 2017 | 1.17 | 52.1 | 48.9 | 4.05 | 48.2 | |||||||||||||||
Second quarter 2017 | 1.10 | 49.6 | 45.1 | 3.93 | 41.0 | |||||||||||||||
First quarter 2017 | 1.06 | 53.7 | 49.2 | 4.10 | 38.9 | |||||||||||||||
Fourth quarter 2016 | 1.08 | 49.3 | 46.1 | 3.89 | 41.0 |
(a) | Consolidated subsidiaries, excluding fixed margin contracts, including hydrocarbon production overlifting/underlifting position valued at market price. | |
(b) | The European refining margin indicator (“ERMI”) is a Group indicator intended to represent the margin after variable costs for a hypothetical complex refinery located around Rotterdam in Northern Europe that processes a mix of crude oil and other inputs commonly supplied to this region to produce and market the main refined products at prevailing prices in this region. The indicator margin may not be representative of the actual margins achieved by the Group in any period because of the Group’s particular refinery configurations, product mix effects or other company-specific operating conditions. | |
(c) | $1/t = $0.136/b. |
Disclaimer: data is based on TOTAL’s reporting, is not audited and is subject to change.
15 |
|
CONSOLIDATED STATEMENT OF INCOME
TOTAL
(unaudited)
(M$) (a) |
4
th
quarter
2017 |
3
rd
quarter
2017 |
4
th
quarter
2016 |
|||||||||
Sales | 47,351 | 43,044 | 42,275 | |||||||||
Excise taxes | (5,909 | ) | (5,962 | ) | (5,408 | ) | ||||||
Revenues from sales | 41,442 | 37,082 | 36,867 | |||||||||
Purchases, net of inventory variation | (27,659 | ) | (24,367 | ) | (23,967 | ) | ||||||
Other operating expenses | (6,586 | ) | (6,108 | ) | (6,791 | ) | ||||||
Exploration costs | (287 | ) | (181 | ) | (260 | ) | ||||||
Depreciation, depletion and impairment of tangible assets and mineral interests | (5,691 | ) | (3,035 | ) | (4,939 | ) | ||||||
Other income | 512 | 404 | 337 | |||||||||
Other expense | (570 | ) | (67 | ) | (473 | ) | ||||||
Financial interest on debt | (352 | ) | (368 | ) | (299 | ) | ||||||
Financial income and expense from cash & cash equivalents | (45 | ) | (45 | ) | (2 | ) | ||||||
Cost of net debt | (397 | ) | (413 | ) | (301 | ) | ||||||
Other financial income | 240 | 204 | 203 | |||||||||
Other financial expense | (159 | ) | (164 | ) | (161 | ) | ||||||
Net income (loss) from equity affiliates | 657 | 500 | 409 | |||||||||
Income taxes | (772 | ) | (1,092 | ) | (437 | ) | ||||||
Consolidated net income | 730 | 2,763 | 487 | |||||||||
Group share | 1,021 | 2,724 | 548 | |||||||||
Non-controlling interests | (291 | ) | 39 | (61 | ) | |||||||
Earnings per share ($) | 0.37 | 1.06 | 0.20 | |||||||||
Fully-diluted earnings per share ($) | 0.37 | 1.06 | 0.20 |
(a) | Except for per share amounts. |
16 |
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
TOTAL
(unaudited)
(M$) |
4
th
quarter
2017 |
3
rd
quarter
2017 |
4
th
quarter
2016 |
|||||||||
Consolidated net income | 730 | 2,763 | 487 | |||||||||
Other comprehensive income | ||||||||||||
Actuarial gains and losses | 794 | (129 | ) | 205 | ||||||||
Tax effect | (373 | ) | 36 | (64 | ) | |||||||
Currency translation adjustment generated by the parent company | 1,432 | 2,420 | (3,515 | ) | ||||||||
Items not potentially reclassifiable to profit and loss | 1,853 | 2,327 | (3,374 | ) | ||||||||
Currency translation adjustment | (585 | ) | (575 | ) | 619 | |||||||
Available for sale financial assets | 3 | 4 | 3 | |||||||||
Cash flow hedge | 174 | 116 | 94 | |||||||||
Share of other comprehensive income of equity affiliates, net amount | (5 | ) | (209 | ) | 458 | |||||||
Other | — | — | 1 | |||||||||
Tax effect | (49 | ) | (42 | ) | (32 | ) | ||||||
Items potentially reclassifiable to profit and loss | (462 | ) | (706 | ) | 1,143 | |||||||
Total other comprehensive income (net amount) | 1,391 | 1,621 | (2,231 | ) | ||||||||
Comprehensive income | 2,121 | 4,384 | (1,744 | ) | ||||||||
Group share | 2,385 | 4,346 | (1,676 | ) | ||||||||
Non-controlling interests | (264 | ) | 38 | (68 | ) |
17 |
|
CONSOLIDATED STATEMENT OF INCOME
TOTAL
(M$) (a) |
Year
2017 (unaudited) |
Year
2016 |
||||||
Sales | 171,493 | 149,743 | ||||||
Excise taxes | (22,394 | ) | (21,818 | ) | ||||
Revenues from sales | 149,099 | 127,925 | ||||||
Purchases, net of inventory variation | (99,411 | ) | (83,377 | ) | ||||
Other operating expenses | (24,966 | ) | (24,302 | ) | ||||
Exploration costs | (864 | ) | (1,264 | ) | ||||
Depreciation, depletion and impairment of tangible assets and mineral interests | (16,103 | ) | (13,523 | ) | ||||
Other income | 3,811 | 1,299 | ||||||
Other expense | (1,034 | ) | (1,027 | ) | ||||
Financial interest on debt | (1,396 | ) | (1,108 | ) | ||||
Financial income and expense from cash & cash equivalents | (138 | ) | 4 | |||||
Cost of net debt | (1,534 | ) | (1,104 | ) | ||||
Other financial income | 957 | 971 | ||||||
Other financial expense | (642 | ) | (636 | ) | ||||
Net income (loss) from equity affiliates | 2,015 | 2,214 | ||||||
Income taxes | (3,029 | ) | (970 | ) | ||||
Consolidated net income | 8,299 | 6,206 | ||||||
Group share | 8,631 | 6,196 | ||||||
Non-controlling interests | (332 | ) | 10 | |||||
Earnings per share ($) | 3.36 | 2.52 | ||||||
Fully-diluted earnings per share ($) | 3.34 | 2.51 |
(a) | Except for per share amounts. |
18 |
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
TOTAL
(M$) |
Year
2017 (unaudited) |
Year
2016 |
||||||
Consolidated net income | 8,299 | 6,206 | ||||||
Other comprehensive income | ||||||||
Actuarial gains and losses | 823 | (371 | ) | |||||
Tax effect | (390 | ) | 55 | |||||
Currency translation adjustment generated by the parent company | 9,316 | (1,548 | ) | |||||
Items not potentially reclassifiable to profit and loss | 9,749 | (1,864 | ) | |||||
Currency translation adjustment | (2,578 | ) | (1,098 | ) | ||||
Available for sale financial assets | 7 | 4 | ||||||
Cash flow hedge | 324 | 239 | ||||||
Share of other comprehensive income of equity affiliates, net amount | (677 | ) | 935 | |||||
Other | — | 1 | ||||||
Tax effect | (100 | ) | (76 | ) | ||||
Items potentially reclassifiable to profit and loss | (3,024 | ) | 5 | |||||
Total other comprehensive income (net amount) | 6,725 | (1,859 | ) | |||||
Comprehensive income | 15,024 | 4,347 | ||||||
Group share | 15,312 | 4,336 | ||||||
Non-controlling interests | (288 | ) | 11 |
19 |
|
CONSOLIDATED BALANCE SHEET
TOTAL
(M$) |
December
31,
2017 (unaudited) |
September
30,
2017 (unaudited) |
December
31,
2016 |
|||||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Intangible assets, net | 14,587 | 14,891 | 15,362 | |||||||||
Property, plant and equipment, net | 109,397 | 113,491 | 111,971 | |||||||||
Equity affiliates : investments and loans | 22,103 | 22,130 | 20,576 | |||||||||
Other investments | 1,727 | 1,124 | 1,133 | |||||||||
Non-current financial assets | 679 | 626 | 908 | |||||||||
Deferred income taxes | 5,206 | 5,345 | 4,368 | |||||||||
Other non-current assets | 3,984 | 4,291 | 4,143 | |||||||||
Total non-current assets | 157,683 | 161,898 | 158,461 | |||||||||
Current assets | ||||||||||||
Inventories, net | 16,520 | 14,769 | 15,247 | |||||||||
Accounts receivable, net | 14,893 | 13,738 | 12,213 | |||||||||
Other current assets | 14,210 | 13,944 | 14,835 | |||||||||
Current financial assets | 3,393 | 2,579 | 4,548 | |||||||||
Cash and cash equivalents | 33,185 | 28,583 | 24,597 | |||||||||
Assets classified as held for sale | 2,747 | 997 | 1,077 | |||||||||
Total current assets | 84,948 | 74,610 | 72,517 | |||||||||
Total assets | 242,631 | 236,508 | 230,978 | |||||||||
LIABILITIES & SHAREHOLDERS’ EQUITY | ||||||||||||
Shareholders’ equity | ||||||||||||
Common shares | 7,882 | 7,806 | 7,604 | |||||||||
Paid-in surplus and retained earnings | 112,040 | 111,128 | 105,547 | |||||||||
Currency translation adjustment | (7,908 | ) | (8,675 | ) | (13,871 | ) | ||||||
Treasury shares | (458 | ) | (458 | ) | (600 | ) | ||||||
Total shareholders’ equity - Group share | 111,556 | 109,801 | 98,680 | |||||||||
Non-controlling interests | 2,481 | 2,799 | 2,894 | |||||||||
Total shareholders’ equity | 114,037 | 112,600 | 101,574 | |||||||||
Non-current liabilities | ||||||||||||
Deferred income taxes | 10,828 | 11,326 | 11,060 | |||||||||
Employee benefits | 3,735 | 4,384 | 3,746 | |||||||||
Provisions and other non-current liabilities | 15,986 | 17,140 | 16,846 | |||||||||
Non-current financial debt | 41,340 | 40,226 | 43,067 | |||||||||
Total non-current liabilities | 71,889 | 73,076 | 74,719 | |||||||||
Current liabilities | ||||||||||||
Accounts payable | 26,479 | 21,092 | 23,227 | |||||||||
Other creditors and accrued liabilities | 17,779 | 17,740 | 16,720 | |||||||||
Current borrowings | 11,096 | 11,206 | 13,920 | |||||||||
Other current financial liabilities | 245 | 273 | 327 | |||||||||
Liabilities directly associated with the assets classified as held for sale | 1,106 | 521 | 491 | |||||||||
Total current liabilities | 56,705 | 50,832 | 54,685 | |||||||||
Total liabilities & shareholders’ equity | 242,631 | 236,508 | 230,978 |
20 |
|
CONSOLIDATED STATEMENT OF CASH FLOW
TOTAL
(unaudited)
(M$) |
4
th
quarter
2017 |
3
rd
quarter
2017 |
4
th
quarter
2016 |
|||||||||
CASH FLOW FROM OPERATING ACTIVITIES | ||||||||||||
Consolidated net income | 730 | 2,763 | 487 | |||||||||
Depreciation, depletion, amortization and impairment | 5,857 | 3,164 | 5,030 | |||||||||
Non-current liabilities, valuation allowances and deferred taxes | (44 | ) | (93 | ) | (275 | ) | ||||||
(Gains) losses on disposals of assets | (71 | ) | (144 | ) | 58 | |||||||
Undistributed affiliates’ equity earnings | (54 | ) | (110 | ) | 65 | |||||||
(Increase) decrease in working capital | 2,206 | (1,057 | ) | 1,913 | ||||||||
Other changes, net | (9 | ) | (160 | ) | (260 | ) | ||||||
Cash flow from operating activities | 8,615 | 4,363 | 7,018 | |||||||||
CASH FLOW USED IN INVESTING ACTIVITIES | ||||||||||||
Intangible assets and property, plant and equipment additions | (4,662 | ) | (3,104 | ) | (5,742 | ) | ||||||
Acquisitions of subsidiaries, net of cash acquired | (3 | ) | (472 | ) | 118 | |||||||
Investments in equity affiliates and other securities | (231 | ) | (181 | ) | (74 | ) | ||||||
Increase in non-current loans | (207 | ) | (153 | ) | (157 | ) | ||||||
Total expenditures | (5,103 | ) | (3,910 | ) | (5,855 | ) | ||||||
Proceeds from disposals of intangible assets and property, plant and equipment | 901 | 55 | 413 | |||||||||
Proceeds from disposals of subsidiaries, net of cash sold | 213 | — | — | |||||||||
Proceeds from disposals of non-current investments | 5 | 147 | 3 | |||||||||
Repayment of non-current loans | 348 | 337 | 511 | |||||||||
Total divestments | 1,467 | 539 | 927 | |||||||||
Cash flow used in investing activities | (3,636 | ) | (3,371 | ) | (4,928 | ) | ||||||
CASH FLOW USED IN FINANCING ACTIVITIES | ||||||||||||
Issuance (repayment) of shares: | ||||||||||||
- Parent company shareholders | 33 | 65 | 60 | |||||||||
- Treasury shares | — | — | — | |||||||||
Dividends paid: | ||||||||||||
- Parent company shareholders | (643 | ) | — | (534 | ) | |||||||
- Non-controlling interests | (54 | ) | (11 | ) | (16 | ) | ||||||
Issuance of perpetual subordinated notes | — | — | 2,761 | |||||||||
Payments on perpetual subordinated notes | (57 | ) | — | — | ||||||||
Other transactions with non-controlling interests | (2 | ) | (2 | ) | — | |||||||
Net issuance (repayment) of non-current debt | 1,531 | 400 | (105 | ) | ||||||||
Increase (decrease) in current borrowings | (878 | ) | (3,717 | ) | (335 | ) | ||||||
Increase (decrease) in current financial assets and liabilities | (916 | ) | 1,182 | (3,006 | ) | |||||||
Cash flow used in financing activities | (986 | ) | (2,083 | ) | (1,175 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 3,993 | (1,091 | ) | 915 | ||||||||
Effect of exchange rates | 609 | 954 | (1,119 | ) | ||||||||
Cash and cash equivalents at the beginning of the period | 28,583 | 28,720 | 24,801 | |||||||||
Cash and cash equivalents at the end of the period | 33,185 | 28,583 | 24,597 |
21 |
|
CONSOLIDATED STATEMENT OF CASH FLOW
TOTAL
(M$) |
Year
2017 (unaudited) |
Year
2016 |
||||||
CASH FLOW FROM OPERATING ACTIVITIES | ||||||||
Consolidated net income | 8,299 | 6,206 | ||||||
Depreciation, depletion, amortization and impairment | 16,611 | 14,423 | ||||||
Non-current liabilities, valuation allowances and deferred taxes | (384 | ) | (1,559 | ) | ||||
(Gains) losses on disposals of assets | (2,598 | ) | (263 | ) | ||||
Undistributed affiliates’ equity earnings | 42 | (643 | ) | |||||
(Increase) decrease in working capital | 827 | (1,119 | ) | |||||
Other changes, net | (478 | ) | (524 | ) | ||||
Cash flow from operating activities | 22,319 | 16,521 | ||||||
CASH FLOW USED IN INVESTING ACTIVITIES | ||||||||
Intangible assets and property, plant and equipment additions | (13,767 | ) | (18,106 | ) | ||||
Acquisitions of subsidiaries, net of cash acquired | (800 | ) | (1,123 | ) | ||||
Investments in equity affiliates and other securities | (1,368 | ) | (180 | ) | ||||
Increase in non-current loans | (961 | ) | (1,121 | ) | ||||
Total expenditures | (16,896 | ) | (20,530 | ) | ||||
Proceeds from disposals of intangible assets and property, plant and equipment | 1,036 | 1,462 | ||||||
Proceeds from disposals of subsidiaries, net of cash sold | 2,909 | 270 | ||||||
Proceeds from disposals of non-current investments | 294 | 132 | ||||||
Repayment of non-current loans | 1,025 | 1,013 | ||||||
Total divestments | 5,264 | 2,877 | ||||||
Cash flow used in investing activities | (11,632 | ) | (17,653 | ) | ||||
CASH FLOW USED IN FINANCING ACTIVITIES | ||||||||
Issuance (repayment) of shares: | ||||||||
- Parent company shareholders | 519 | 100 | ||||||
- Treasury shares | — | — | ||||||
Dividends paid: | ||||||||
- Parent company shareholders | (2,643 | ) | (2,661 | ) | ||||
- Non-controlling interests | (141 | ) | (93 | ) | ||||
Issuance of perpetual subordinated notes | — | 4,711 | ||||||
Payments on perpetual subordinated notes | (276 | ) | (133 | ) | ||||
Other transactions with non-controlling interests | (4 | ) | (104 | ) | ||||
Net issuance (repayment) of non-current debt | 2,277 | 3,576 | ||||||
Increase (decrease) in current borrowings | (7,175 | ) | (3,260 | ) | ||||
Increase (decrease) in current financial assets and liabilities | 1,903 | 1,396 | ||||||
Cash flow used in financing activities | (5,540 | ) | 3,532 | |||||
Net increase (decrease) in cash and cash equivalents | 5,147 | 2,400 | ||||||
Effect of exchange rates | 3,441 | (1,072 | ) | |||||
Cash and cash equivalents at the beginning of the period | 24,597 | 23,269 | ||||||
Cash and cash equivalents at the end of the period | 33,185 | 24,597 |
22 |
|
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
TOTAL
(2017 unaudited)
Common shares issued | Paid-in | Treasury shares | ||||||||||||||||||||||||||||||||||
(M$) | Number | Amount |
surplus and
retained earnings |
Currency
translation adjustment |
Number | Amount |
Shareholders’
equity - Group share |
Non-
controlling interests |
Total
shareholders’ equity |
|||||||||||||||||||||||||||
As of January 1, 2016 | 2,440,057,883 | 7,670 | 101,528 | (12,119 | ) | (113,967,758 | ) | (4,585 | ) | 92,494 | 2,915 | 95,409 | ||||||||||||||||||||||||
Net income 2016 | — | — | 6,196 | — | — | — | 6,196 | 10 | 6,206 | |||||||||||||||||||||||||||
Other comprehensive Income | — | — | (108 | ) | (1,752 | ) | — | — | (1,860 | ) | 1 | (1,859 | ) | |||||||||||||||||||||||
Comprehensive Income | — | — | 6,088 | (1,752 | ) | — | — | 4,336 | 11 | 4,347 | ||||||||||||||||||||||||||
Dividend | — | — | (6,512 | ) | — | — | — | (6,512 | ) | (93 | ) | (6,605 | ) | |||||||||||||||||||||||
Issuance of common shares | 90,639,247 | 251 | 3,553 | — | — | — | 3,804 | — | 3,804 | |||||||||||||||||||||||||||
Purchase of treasury shares | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Sale of treasury shares (1) | — | — | (163 | ) | — | 3,048,668 | 163 | — | — | — | ||||||||||||||||||||||||||
Share-based payments | — | — | 112 | — | — | — | 112 | — | 112 | |||||||||||||||||||||||||||
Share cancellation | (100,331,268 | ) | (317 | ) | (3,505 | ) | — | 100,331,268 | 3,822 | — | — | — | ||||||||||||||||||||||||
Issuance of perpetual subordinated notes | — | — | 4,711 | — | — | — | 4,711 | — | 4,711 | |||||||||||||||||||||||||||
Payments on perpetual subordinated notes | — | — | (203 | ) | — | — | — | (203 | ) | — | (203 | ) | ||||||||||||||||||||||||
Other operations with non-controlling interests | — | — | (98 | ) | — | — | — | (98 | ) | (43 | ) | (141 | ) | |||||||||||||||||||||||
Other items | — | — | 36 | — | — | — | 36 | 104 | 140 | |||||||||||||||||||||||||||
As of December 31, 2016 | 2,430,365,862 | 7,604 | 105,547 | (13,871 | ) | (10,587,822 | ) | (600 | ) | 98,680 | 2,894 | 101,574 | ||||||||||||||||||||||||
Net income 2017 | — | — | 8,631 | — | — | — | 8,631 | (332 | ) | 8,299 | ||||||||||||||||||||||||||
Other comprehensive Income | — | — | 718 | 5,963 | — | — | 6,681 | 44 | 6,725 | |||||||||||||||||||||||||||
Comprehensive Income | — | — | 9,349 | 5,963 | — | — | 15,312 | (288 | ) | 15,024 | ||||||||||||||||||||||||||
Dividend | — | — | (6,992 | ) | — | — | — | (6,992 | ) | (141 | ) | (7,133 | ) | |||||||||||||||||||||||
Issuance of common shares | 98,623,754 | 278 | 4,431 | — | — | — | 4,709 | — | 4,709 | |||||||||||||||||||||||||||
Purchase of treasury shares | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Sale of treasury shares (1) | — | — | (142 | ) | — | 2,211,066 | 142 | — | — | — | ||||||||||||||||||||||||||
Share-based payments | — | — | 151 | — | — | — | 151 | — | 151 | |||||||||||||||||||||||||||
Share cancellation | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Issuance of perpetual subordinated notes | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Payments on perpetual subordinated notes | — | — | (302 | ) | — | — | — | (302 | ) | — | (302 | ) | ||||||||||||||||||||||||
Other operations with non-controlling interests | — | — | (8 | ) | — | — | — | (8 | ) | 4 | (4 | ) | ||||||||||||||||||||||||
Other items | — | — | 6 | — | — | — | 6 | 12 | 18 | |||||||||||||||||||||||||||
As of December 31, 2017 | 2,528,989,616 | 7,882 | 112,040 | (7,908 | ) | (8,376,756 | ) | (458 | ) | 111,556 | 2,481 | 114,037 |
(1) | Treasury shares related to the restricted stock grants. |
23 |
|
BUSINESS SEGMENT INFORMATION
TOTAL
(unaudited)
24 |
|
BUSINESS SEGMENT INFORMATION
TOTAL
(unaudited)
25 |
|
BUSINESS SEGMENT INFORMATION
TOTAL
(unaudited)
26 |
|
BUSINESS SEGMENT INFORMATION
TOTAL
(unaudited)
27 |
|
BUSINESS SEGMENT INFORMATION
TOTAL
28 |
|
Reconciliation of the information by business segment with consolidated financial statements
TOTAL
(unaudited)
29 |
|
Reconciliation of the information by business segment with consolidated financial statements
TOTAL
30 |
Exhibit 99.2
RECENT DEVELOPMENTS
TOTAL’s Board of Directors confirms priority of implementing Group’s growth strategy and announces shareholder return policy for next 3 years: 2017 dividend proposed at 2.48 €/share; increasing dividend by 10% over 2018-20; and up to $5 billion share buyback over 2018-20
The Board of Directors met on February 7, 2018 to review the Group’s 2017 accounts and cash flow allocation, including the shareholder return policy, for the next three years.
Despite a volatile environment over the past three years, TOTAL has successfully reset its business model, delivering solid results in 2017 thanks to strong operational performance and reducing its pre-dividend organic breakeven to $27/b Brent.
After five years of heavy investment, TOTAL is now delivering strong cash-accretive production growth. The Group has also invested counter-cyclically to acquire resources at attractive prices and is emerging stronger, with clear visibility on growing cash flow and a net-debt-to-capital ratio reduced to 12% at end-2017 that provides increased financial flexibility.
Confident in the ability of the Group’s teams to seize value-adding growth opportunities, the Board of Directors confirms the priority to implement its long term growth strategy.
In this context, the Board of Directors has decided to provide visibility on cash flow allocation and shareholder return for the next three years. The Board of Directors confirms a capital investment program of $15-17 billion per year, set an objective to maintain the net-debt-to-capital ratio below 20%, and maintain its grade A credit rating and further proposes the following measures:
1. | Increasing the dividend by 10% over the next 3 years |
- | The full-year 2017 dividend will be proposed to the Combined Shareholders’ Meeting at €2.48/share, corresponding to a final quarterly dividend of €0.62/share and an increase of 1.2% compared to the full-year 2016 dividend. |
- | The 2018 interim dividends (1) will be increased by 3.2% to €0.64/share, with the intention of proposing to the Combined Shareholders’ Meeting a full-year 2018 dividend of €2.56/share. |
- | The target for the full-year 2020 dividend would be €2.72/share. |
2. | Buying back shares issued with no discount as part of the scrip dividend option |
- | Maintain the scrip dividend option, with no discount on the price, since certain shareholders prefer to take their dividend in shares. |
- | Buy back the newly issued shares with the intention to cancel them. No dilution linked to the scrip dividend from 2018. |
- | The buyback of the shares issued in January 2018 as part of the 2 nd 2017 interim dividend payment will start immediately. |
3. | Buying back up to $5 billion of shares over the period 2018-20 |
- | The objective is to share with investors the benefits of the oil price upside. |
- | The amount of buyback will be adjusted to the oil price. |
- | This is in addition to the scrip share buyback. |
(1) First interim dividend will be paid in October 2018 .
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2017 Dividend
The Board of Directors has decided to propose to the Combined Shareholders’ Meeting, which will be held on June 1, 2018, an annual dividend of €2.48/share for 2017, an increase of 1.2% compared to 2016. Given the three previous 2017 interim quarterly dividends of €0.62/share, a fourth quarter 2017 dividend of €0.62/share is therefore proposed.
The Board of Directors also decided to propose to the Combined Shareholders’ Meeting the alternative for shareholders to receive the fourth quarter 2017 dividend in cash or in new shares of the company with no discount.
Subject to approval at the Combined Shareholders’ Meeting:
• | the ex-dividend date for the fourth quarter dividend will be June 11, 2018; and |
• | the payment of the dividend in cash or the delivery of shares issued in lieu of the cash dividend is set for June 28, 2018. |
American depositary receipts (“ADRs”) will receive the final quarterly installment of the 2017 dividend in dollars based on the then-prevailing exchange rate according to the following timetable:
• | ADR ex-dividend date: June 7, 2018; |
• | ADR record date: June 8, 2018; and |
• | ADR distribution date for cash or shares issued in lieu of the cash dividend: July 6, 2018. |
Registered ADR holders may also contact JP Morgan Chase Bank for additional information. Non-registered ADR holders should contact their broker, financial intermediary, bank or financial institution for additional information.
TOTAL and Mitsui O.S.K. Lines sign a long-term charter contract for a pioneer liquefied natural gas (LNG) bunker vessel
On February 6, 2018, TOTAL S.A. (together with its subsidiaries and affiliates, “TOTAL” or the “Group”) announced that Total Marine Fuels Global Solutions (TMFGS) and Mitsui O.S.K. Lines, Ltd. (MOL) have signed a long-term charter contract for a large LNG bunker vessel of 18,600 m³, to be delivered in 2020. She will operate in Northern Europe and will be the first ever capable of supplying large quantities of LNG in one single bunkering operation.
With this vessel, TMFGS intends to serve the emerging marine LNG market for the container ships segment, including those sailing on the Europe-Asia trade. She will be used in particular to supply CMA CGM’s new build LNG mega container ships, following the 10 years contract of 300 kt per annum signed with TMFGS in December 2017.
This bunker vessel will be built by Hudong-Zhonghua Shipbuilding in China and fitted with the Mark III membrane containment system provided by the French company GTT. Highly maneuverable by design, with a length of about 135 meters, she is expected to operate safely and to meet the highest environmental standards through the use of LNG as fuel and a complete reliquefaction of the boil-off gas.
The new-build vessel will be managed by MOL (Europe Africa) Ltd, a UK subsidiary of MOL.
This agreement is a significant milestone in the cooperation between MOL and Total Marine Fuels Global Solutions, with developments in both conventional fuels and LNG ahead of 2020 IMO sulphur regulations. Beyond their historical commercial relationship, the two companies have also signed a Memorandum of Understanding to combine their expertise in the development of marine LNG infrastructures and serve MOL future LNG needs.
Qatar Petroleum joins TOTAL as a partner in the Exploration Block 11B/12B in South Africa
On February 5, 2018, TOTAL announced that it had signed an agreement to sell a 25% interest in the Exploration Block 11B/12B, offshore South Africa, to Qatar Petroleum. The transaction remains subject to regulatory approval.
The Block 11B/12B is located in the Outeniqua Basin, around 175 kilometers off the southern coast of South Africa, and covers an area of 19,000 square kilometers with water depths ranging from 200 to 1,800 meters. Upon receiving all regulatory approvals the new partnership structure will be as follows: TOTAL (operator, 45%), Qatar Petroleum (25%), CNR international (20%) and Main Street (10%).
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TOTAL enters exploration in the prolific Guyana basin with three exploration licenses
On February 5, 2018, TOTAL announced that it had signed agreements to acquire interests into two exploration licenses offshore Guyana, the Canje Block and the Kanuku Block. These agreements come after entering into an option agreement for the nearby Orinduik Block. Subject to the approval of relevant authorities, TOTAL will thus own exploration rights to an area covering over 12,000 square kilometers in the Guyana Basin.
TOTAL will acquire a 35% working interest in the Canje Block, located in water depths of 1,700 to 3,000 meters, under the terms of the agreement signed with an affiliate of Canadian company JHI Associates, Inc. and Guyana-based company Mid-Atlantic Oil & Gas, Inc. These two companies will retain a shared 30% interest alongside operator ExxonMobil (35%).
TOTAL will acquire a 25% working interest in the Kanuku Block, located in water depths of 70 to 100 meters, under the terms of the agreement signed with operator Repsol (37.5%), and will be a partner alongside Tullow (37.5%).
TOTAL holds an option to purchase a 25% working interest in the Orinduik Block, located in water depths of 70 to 100 meters, under the terms of the agreement signed in September 2017 with an affiliate of Canadian company Eco Atlantic Oil & Gas Ltd, who will retain a 15% interest following exercise of the option, alongside operator Tullow (60%).
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USA: TOTAL announces major deepwater discovery in the Gulf of Mexico
On January 31, 2018, TOTAL announced a major oil discovery in the Ballymore prospect, located deep offshore in the U.S. Gulf of Mexico (Eastern GoM). The well was drilled to a final depth of 8,898 meters and encountered 205 meters of net oil pay in a high quality Norphlet reservoir.
A sidetrack well is now ongoing to confirm the upside potential.
Located in water depth of about 2,000 meters and 120 kilometers from the Louisiana coast, the Ballymore prospect covers four blocks in the Norphlet play, including Block MC 607 where the discovery was made. TOTAL’s acquisition of a 40% working interest in Ballymore was part of an exploration agreement with Chevron (60%, operator) signed in September 2017 that included seven prospects covering 16 blocks in the Norphlet (Eastern GoM) and the Wilcox (Central GoM) plays.
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Canada: Fort Hills project reaches first oil
On January 29, 2018, TOTAL announced that the Fort Hills oil sands project located in Alberta, Canada, 90 kilometers north of Fort McMurray, had achieved first oil. Production will ramp up over the next months to reach a plateau of 180,000 barrels per day. The project is operated by Suncor and owned by Suncor (53.06%), TOTAL (26.05%) and Teck (20.89%).
In line with its strategy, which aims at focusing its capital allocation on low breakeven oil projects and managing its investment effort with discipline on the most profitable projects, and in agreement with the other partners of the project, TOTAL reduced gradually since 2015 its interest from 39.2% to 26.05%. It should eventually settle near 25% once the final project cost is known.
TOTAL reinforces its position in deepwater Gulf of Mexico by entering the Anchor discovery
On January 24, 2018, TOTAL announced that it had signed an agreement with Samson in order to acquire Samson Offshore Anchor, LLC, which holds a 12.5% interest in four blocks covering the Anchor discovery, one of the most significant recent discoveries in the Gulf of Mexico (GoM), USA. The deal also includes a 12.5% interest in the nearby exploration block Green Canyon 761, where TOTAL already has a 25% interest.
Discovered in the Wilcox play in 2014, Anchor is located approximately 225 kilometers off the coast of Louisiana in more than 1,500 meters of water. Additional prospective resources have been identified in the Anchor vicinity, strengthening the potential of the asset.
Anchor is operated by Chevron (55%) alongside Cobalt (20%), and Venari (12.5%).
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Petrobras and TOTAL complete the transfer of rights in the Lapa and Iara concessions, as part of their strategic alliance
On January 15, 2018, Petrobras and TOTAL announced that they had finalized a decisive milestone in the realization of their Strategic Alliance, signed in March 2017, with the completion of the following transactions:
• | Transfer from Petrobras to TOTAL of 35% of the rights, as well as the operatorship, of the Lapa field in Block BM-S-9A in the Santos Basin pre-salt, alongside Shell (30%), Repsol-Sinopec (25%) and Petrobras (10%). The Lapa field was put in production in December 2016, via the 100,000 barrel per day capacity Cidade de Caraguatatuba FPSO. |
• | Transfer from Petrobras to TOTAL of 22.5% of the rights of the Iara area, which comprises the Sururu, Berbigão and Oeste de Atapu fields in Block BM-S-11A in the Santos Basin pre-salt, operated by Petrobras (42.5%) alongside Shell (25%) and Petrogal (10%). Production in Iara is expected to start in 2018 through the 150,000 barrel per day capacity P-68 FPSO in Berbigão-Sururu fields, which will be followed by a second FPSO in 2019 in the Atapu field. |
The consideration for the above transactions amounts to US$1.95 billion, including closing adjustments. This amount does not include US$ 400 million that can be triggered by Petrobras to carry a part of its investment share in the Iara development fields and contingent payments. All conditions preceding the transfers were fulfilled, in particular the granting of operation and installation licenses by the Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) in order for TOTAL to become the operator of the Lapa field.
These transactions give shape to the Strategic Alliance between Petrobras and TOTAL, allowing them to combine their deep-offshore expertise.
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Results of the option to receive the 2017 second interim dividend in shares
The Board of Directors of TOTAL met on December 12, 2017, and declared a 2017 second interim dividend of €0.62 per share and offered, under the conditions set by the fourth resolution at the Combined Shareholders’ Meeting of May 26, 2017, the option for shareholders to receive the 2017 second interim dividend in cash or in new shares of the Company.
The period for exercising the option ran from December 19, 2017 to January 3, 2018. At the end of the option period, 21% of rights were exercised in favor of receiving the payment for the 2017 second interim dividend in shares.
The settlement and delivery of the new shares as well as their admission to trading on Euronext Paris occurred on January 11, 2018. The shares carried immediate dividend rights and were fully assimilated with existing shares already listed.
7,087,904 new shares were issued, representing 0.28% of the Company’s share capital on the basis of the share capital of December 31, 2017. The share price for the new shares as payment of the 2017 second interim dividend was set at €46.55 on December 12, 2017. The price was equal to the average opening price on Euronext Paris for the twenty trading days preceding the Board of Directors on December 12, 2017, reduced by the amount of the 2017 second interim dividend, without any discount.
The remaining cash dividend paid to shareholders who did not elect to receive the 2017 second interim dividend in shares amounted to €1,231 million and was paid on January 11, 2018.
Brazil: TOTAL launches large-scale development of the giant Libra field
On December 18, 2017, TOTAL announced that it had taken the investment decision for the first large-scale development phase of the Libra project, located deep offshore, 180 kilometers off the coast of Rio de Janeiro, in the pre-salt area of the Santos Basin in Brazil.
This phase, consisting of a floating production storage and offloading (FPSO) unit with a production capacity of 150,000 barrels of oil per day and 17 wells, will be deployed in the Northwestern part of the block.
First oil started flowing from the Libra field in November with the start-up of the Pioneiro de Libra, a 50,000-barrel-per-day FPSO early production phase to further appraise the field and generate early revenue. As the next step in the field development, the new “Mero 1” FPSO is expected to come on stream in 2021. In the coming years, this development will continue with the addition of at least three other FPSO’s to fully exploit the potential of the field, with a production that should reach more than 600,000 barrels per day.
The Libra Consortium is led by Petrobras (40%) in partnership with TOTAL (20%), Shell (20%), CNOOC Limited (10%) and CNPC (10%). Pré-Sal Petróleo (PPSA) manages the Libra Production Sharing Contract.
Second interim dividend: The Board of Directors decided to remove the discount on the scrip dividend
The Board of Directors of TOTAL met on December 12, 2017 and declared a 2017 second interim dividend of €0.62 per share, in accordance with the Board’s decision of July 26, 2017, unchanged compared to the 2017 first interim dividend and representing an increase of 1.6% compared to the 2016 second interim dividend. The Board of Directors also decided to offer, under the conditions set by the fourth resolution at the Combined Shareholders’ Meeting of May 26, 2017, the option for shareholders,
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including holders of its American Depositary Shares, to receive the 2017 second interim dividend in cash or in new shares of the Company.
Given current oil prices above $60/b and the performance of the Group in terms of cash-flow generation in such environment, the Board of Directors has decided to remove the discount offered on the share price for the new shares to be issued as payment of the 2017 second interim dividend. As a result, the share price for the new shares to be issued was set at €46.55, equal to the average opening price on Euronext Paris for the twenty trading days preceding the Board of Directors on December 12, 2017, reduced by the amount of the interim dividend, rounded up to the nearest cent. Shares issued as payment of the 2017 second interim dividend will carry immediate dividend rights. An application will be made to admit the new shares for trading on the Euronext Paris market.
South Korea: Hanwha Total Petrochemical invests to expand its polymer production
On December 11, 2017, Hanwha Total Petrochemical, a 50/50 joint venture between Hanwha and TOTAL, announced an expected investment of more than $300 million to expand its integrated refining & petrochemicals platform located in Daesan, South Korea. The investment is expected to increase the site’s polyethylene capacity by more than 50% to 1.1 million tons per year by the end of 2019. This project complements the steam cracker expansion and flexibilisation project announced earlier this year, that will notably enable it to process low-cost propane feedstock. Thus, it will allow the facility to capture margin along the full ethylene-polyethylene value chain.
Daesan is one of TOTAL’s six world-class integrated platforms and a strategic asset for both shareholders. The site is comprised of a flexible condensate splitter, a competitive steam cracker and polymers, styrene and aromatics.
Hanwha Total Petrochemical will use the state-of-the-art Advanced Double Loop technology licensed by TOTAL and Chevron Phillips Chemical Company, which will enable the production of a wide range of high-end specialty polyethylenes.
The additional production of polyethylene, the most widely used polymer, will supply the local South Korean demand and also the fast-growing Chinese market.
Yamal LNG project begins gas exports
On December 8, 2017, TOTAL announced that the first cargo of liquefied natural gas (LNG) from Yamal LNG is ready to leave Sabetta. This first shipment is a major milestone for Yamal LNG, one of the biggest liquefied natural gas projects in the world. At full capacity, the three-train facility is expected to supply 16.5 million tons of LNG per year to Asian and European markets.
Yamal LNG processes natural gas from the giant onshore South Tambey gas and condensate field, located on the Yamal peninsula. The project includes an integrated gas treatment and liquefaction facility with three trains each having a capacity of 5.5 million tons per year, storage tanks, port and airport infrastructures. The construction of the first train as well as the logistic facilities was successfully completed with more than 30,000 personnel actively involved on site at peak. The second and third trains are expected to be commissioned in 2018 and 2019, respectively.
Yamal LNG’s production is sold under long-term contracts on Asian and European markets, predominantly under oil-index price formulas. LNG will be supplied to the markets all year round through an innovative shipping approach involving a fleet of purposely designed ice-class LNG carriers which will travel the Northern Sea Route to Asia over the Bering Strait during the summer time.
The project is operated by Yamal LNG company, owned by Russian independent gas producer Novatek (50.1%), TOTAL (20%), CNPC (20%) and Silk Road Fund (9.9%).
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Angola: TOTAL paves the way for new projects in the country
On December 4, 2017, Patrick Pouyanné, Chairman and CEO of TOTAL, had an audience with João Lourenço, recently elected President of the Republic of Angola, and with Carlos Saturnino, new Chairman of Sonangol, the national oil company.
On this occasion, TOTAL and Sonangol signed several agreements covering both upstream and downstream activities.
• | Zinia Phase 2 project development: TOTAL and Sonangol agreed on the contractual conditions for the development of Zinia Phase 2, enabling a commitment to the final investment decision. Located in Block 17 and operated by TOTAL (40%), Zinia 2 will be connected to the Pazflor FPSO and will produce 40,000 barrels per day. |
• | Entry on block 48: TOTAL and Sonangol have decided to jointly explore Block 48. This agreement contributes to restarting deep offshore exploration in Angola. The first phase of this program will last for two years with the drilling of one exploration well. |
• | Extension of cooperation: |
o | Distribution of oil products : TOTAL and Sonangol signed a Memorandum of Understanding (MoU) to develop jointly a retail network in the country including logistics and the supply of oil products. |
o | Renewable energ y: Both companies signed an MoU providing for them to screen jointly opportunities for renewable energy supply in Angola. |
Strategic agreement between TOTAL and CMA CGM on liquefied natural gas fuel supply for CMA CGM new-build container ships
On December 4, 2017, TOTAL and CMA CGM announced having signed an agreement covering the supply of around 300,000 tons of LNG per year for 10 years starting in 2020. This unprecedented volume in the history of LNG bunker will fuel CMA CGM’s nine new-build container ships, scheduled for delivery beginning 2020 onwards.
CMA CGM, the first shipping company in the world to equip its giant container ships (capacity of 22,000 TEUs (1) ) with LNG propulsion, has selected Total Marine Fuels Global Solutions, the TOTAL affiliate responsible for marketing marine fuels worldwide, for these future supply operations. In February 2017, CMA CGM and TOTAL signed a cooperation agreement to examine the most environmentally responsible propulsion solutions to meet the International Maritime Organization’s 2020 implementation date for new sulfur regulations.
By selecting LNG as a fuel, CMA CGM is opting for a solution that will outperform the sulfur cap of 0.5% required in 2020.
Under this agreement, TOTAL will provide a tailor-made solution for LNG supply. The new supply chains created would lead to a wider use of LNG, especially in other shipping sectors, to achieve even greater and ambitious environmental responsibility.
In addition, both companies reached an agreement in principle on the potential supply of lubricants for the nine new-builds, giving CMA CGM access to Total Lubmarine’s innovative products, technical expertise and global distribution network.
(1) | Twenty-foot Equivalent Unit: Unit used to measure a container ship’s cargo carrying capacity. |
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Belgium: TOTAL completes the upgrade of its largest refining & petrochemicals platform in Europe
On November 30, 2017, TOTAL announced that it had inaugurated the new units at its Antwerp integrated refining & petrochemicals platform, which have progressively started up in the last few months. This event marks the completion of the upgrade program launched in 2013 of one of the largest and most efficient integrated refining & petrochemicals platforms in Europe. Thus, the company has invested more than €1 billion to further improve the competitiveness of this major site located in the heart of Europe’s main markets.
Two key projects were completed:
• | An investment in a new refining complex was approved for the conversion of more heavy fuel oil into low-sulfur light products. |
o | A deasphalting unit and a hydrocracker were built to increase the production of clean and high-value-added products. |
o | The new refining complex will reduce the high-sulfur heavy fuel oil yield, in anticipation of the new marine fuel regulation that will take effect in 2020. |
• | Steam cracker (1) flexibility has been increased to maximize the processing of low cost advantaged feedstock. |
o | A new unit was built to convert rich gases produced by the refinery into cracker feedstock. |
o | One of the two steam crackers and site logistics has been adapted to import and process ethane. |
TOTAL also announced a logistics project last August to connect the platform to the neighboring storage terminal via a new pipeline and the expansion of the terminal’s capacities to maximize product value.
Norway: TOTAL sells its interest in the Martin Linge field to Statoil
On November 27, 2017, TOTAL announced that it has agreed to sell all of its interests in the Martin Linge field (51%) and Garantiana discovery (40%) on the Norwegian Continental Shelf to Statoil. The consideration for the transaction is $1.45 billion with an effective date of January 1, 2017. The transaction remains subject to final due diligence and approval from the relevant authorities.
The transaction involves the transfer of relevant employees from TOTAL to Statoil in compliance with the applicable legislation.
TOTAL acquires Engie’s upstream LNG business and becomes the second largest global LNG player
On November 8, 2017, TOTAL announced having signed an agreement with Engie to acquire its portfolio of upstream LNG assets for an overall enterprise value of $1.49 billion. This portfolio includes participating interests in liquefaction plants, notably the interest in the Cameron LNG project in the United States, long-term LNG sales and purchase agreements, an LNG tanker fleet as well as access to regasification capacities in Europe. Additional payments of up to $ 550 million could be payable by TOTAL in case of an improvement in the oil markets in the coming years.
The proposed transaction is subject to the applicable legally required consultation and notification processes with employee representatives as well as approvals by the relevant regulatory authorities and
(1) | Steam cracking is a petrochemical process that uses petroleum or gas derivatives to produce monomers (ethylene and propylene), bases for the plastics industry (polyethylene and polypropylene). |
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partners on certain contracts. The transaction is expected to close by mid-2018 and will have an effective date of January 1, 2018.
Following the transaction, TOTAL will take over the teams in charge of the LNG activities at Engie, which represents around 180 employees.
In addition, in parallel with this transaction, TOTAL and Engie agreed to cooperate to promote the use of biogas and renewable hydrogen, with Engie becoming TOTAL’s priority supplier in this field.
This transaction will bring to TOTAL:
• | 2.5 MTPA of liquefaction capacity to reinforce TOTAL’s existing portfolio, bringing it to 23 MTPA by 2020, with: |
o | 16.6% equity stake in the Cameron LNG liquefaction plant with 3 trains currently under construction in Louisiana and the potential to expand by adding two further trains. |
o | 5% equity stake in the first train of the Idku LNG project in Egypt. |
• | A portfolio of long-term LNG purchase and sale contracts, enabling the Group to increase its overall portfolio to 28 MTPA by 2020, with a diversified supply from Algeria, Nigeria, Norway, Russia, Qatar and the United States, and outlets balanced between Europe and Asia. |
• | The access to regasification capacities of 14 MTPA in Europe, which, combined with the existing 4 MTPA of TOTAL, allows the Group to balance its consolidated purchase and sales portfolio. |
• | A fleet of 10 LNG tankers which will be consolidated with the 3 LNG carriers of TOTAL. |
Overall, combining its interests in liquefaction plants and its portfolio of third party supply contracts, the Group will manage a global volume of nearly 40 MTPA.
TOTAL sells its fuel marketing activities in Italy and focuses on the lubricants business
On November 3, 3017, TOTAL and Erg announced having signed an agreement (subject to the approval of the relevant authorities) with the Italian Group API to sell their fuel marketing and refining assets in the TotalErg joint venture (Erg 51%, TOTAL 49%). Following the divestment of the LPG and Commercial Sales businesses, this third transaction completes the sale of all TotalErg’s assets, for a total amount of around €750 million.
In parallel with this agreement, TOTAL is reinforcing its lubricants business in Italy by buying out Erg’s 51% stake in the lubricants activities of the joint venture that will consequently be terminated.
Created in 2010 by merging the TOTAL and Erg activities, TotalErg is the fourth-largest fuel marketer in Italy, a fragmented market where the profitability outlook was not in line with the Group’s expectations despite the joint efforts of the two shareholders. The lubricants market, however, does offer satisfactory growth perspectives and this consolidation is in line with the Group strategy in this business sector.
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Exhibit 99.3
RATIO OF EARNINGS TO FIXED CHARGES
(unaudited)
The following table shows the ratios of earnings to fixed charges for TOTAL S.A. and its subsidiaries and affiliates (collectively, “TOTAL” or the “Group”), computed based on information used in the preparation of our consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and as adopted by the European Union, for the fiscal years ended December 31, 2017, 2016, 2015, 2014 and 2013.
Years Ended December 31, | |||||||||
2017 | 2016 | 2015 | 2014 | 2013 (a) | |||||
For the Group (IFRS) | 6.64 | 4.53 | 4.76 | 10.91 | 19.57 |
(a) | Figures for 2013 have been restated pursuant to the retrospective application of the accounting interpretation IFRIC 21 from January 1, 2014. |
Earnings for the computations above under IFRS were calculated by adding pre-tax income from continuing operations before adjustment for minority interests in consolidated subsidiaries or income or loss from equity investees, fixed charges and distributed income of equity investees. Fixed charges for the computations above consist of interest (including capitalized interest) on all indebtedness, amortization of debt discount and expense and that portion of rental expense representative of the interest factor.
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CAPITALIZATION AND INDEBTEDNESS OF TOTAL
(unaudited)
The following table sets out the unaudited consolidated capitalization and long-term indebtedness, as well as short-term indebtedness, of the Group as of December 31, 2017, prepared on the basis of IFRS. Currency amounts are expressed in U.S. dollars (“dollars” or “$”) or in euros (“euros” or “€”).
At December
31,
2017 |
||||
(in millions of dollars) | ||||
Current financial debt, including current portion of non-current financial debt | ||||
Current portion of non-current financial debt | 4,700 | |||
Current financial debt | 6,396 | |||
Current portion of financial instruments for interest rate swaps liabilities | 157 | |||
Other current financial instruments — liabilities | 88 | |||
Financial liabilities directly associated with assets held for sale | — | |||
Total current financial debt | 11,341 | |||
Non-current financial debt | 41,340 | |||
Non-controlling interests | 2,481 | |||
Shareholders’ equity | ||||
Common shares | 7,882 | |||
Paid-in surplus and retained earnings | 112,040 | |||
Currency translation adjustment | (7,908 | ) | ||
Treasury shares | (458 | ) | ||
Total shareholders’ equity — Group share | 111,556 | |||
Total capitalization and non-current indebtedness | 155,377 |
As of December 31, 2017, TOTAL S.A. had an authorized share capital of 3,434,245,369 ordinary shares with a par value of €2.50 per share, and an issued share capital of 2,528,989,616 ordinary shares (including 8,376,756 treasury shares from shareholders’ equity).
As of December 31, 2017, approximately $1,310 million of the Group’s non-current financial debt was secured and approximately $39,351 million was unsecured, and all of the Group’s current financial debt of $6,396 million was unsecured. As of December 31, 2017, TOTAL had no outstanding guarantees from third parties relating to its consolidated indebtedness. For more information about TOTAL’s off balance sheet commitments and contingencies, see Note 13 of the Notes to TOTAL’s audited Consolidated Financial Statements in its Annual Report on Form 20-F for the year ended December 31, 2016, filed with the Securities and Exchange Commission on March 17, 2017.
Except as disclosed herein, there have been no material changes in the consolidated capitalization, indebtedness and contingent liabilities of TOTAL since December 31, 2017.
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Exhibit 99.4
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(unaudited)
Years Ended December 31, | |||||||||||||||||||||
(Amounts in millions of dollars) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net income (a) | 8,631 | 6,196 | 5,087 | 4,244 | 11,228 | ||||||||||||||||
Income tax expenses (a) | 3,029 | 970 | 1,653 | 8,614 | 14,767 | ||||||||||||||||
Non-controlling interests | (332 | ) | 10 | (301 | ) | 6 | 293 | ||||||||||||||
Equity in income of affiliates (in excess of)/less than dividends received | 42 | (643 | ) | (311 | ) | 29 | (775 | ) | |||||||||||||
Interest expensed | 1,000 | 734 | 742 | 536 | 656 | ||||||||||||||||
Estimate of the interest within rental expense | 489 | 543 | 477 | 406 | 357 | ||||||||||||||||
Amortization of capitalized interest | 191 | 161 | 174 | 160 | 135 | ||||||||||||||||
Total (a) | 13,050 | 7,971 | 7,521 | 13,995 | 26,661 | ||||||||||||||||
Interest expensed | 1,000 | 734 | 742 | 536 | 656 | ||||||||||||||||
Capitalized interest | 475 | 481 | 362 | 341 | 349 | ||||||||||||||||
Estimate of the interest within rental expense | 489 | 543 | 477 | 406 | 357 | ||||||||||||||||
Preference security dividend requirements of consolidated subsidiaries | — | — | — | — | — | ||||||||||||||||
Fixed charges | 1,964 | 1,758 | 1,581 | 1,283 | 1,362 | ||||||||||||||||
Ratio of earnings to fixed charges (a) | 6.64 | 4.53 | 4.76 | 10.91 | 19.57 |
(a) | Figures for 2013 have been restated pursuant to the retrospective application of the accounting interpretation IFRIC 21 from January 1, 2014. |