TotalEnergies SE (TTE) 20-F 2020 FY Annual report (foreign)

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from             to

OR

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Date of event requiring this shell company report

Commission file number: 1-10888

TOTAL SE

(Exact Name of Registrant as Specified in Its Charter)

N/A

(Translation of Registrant's name into English)

Republic of France

(Jurisdiction of Incorporation or Organization)

2, place Jean Millier

La Défense 6

92400 Courbevoie

France

(Address of Principal Executive Offices)

Jean-Pierre Sbraire

Chief Financial Officer

TOTAL SE

2, place Jean Millier

La Défense 6

92400 Courbevoie

France

Tel: +33 (0)1 47 44 45 46

Fax: +33 (0)1 47 44 49 44

(Name, Telephone, Email and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Shares		New York Stock Exchange*
American Depositary Shares	TOT	New York Stock Exchange

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

2,653,124,025 Shares, par value €2.50 each, as of December 31, 2020

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☑    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐    No  ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer  ☐	Non-accelerated filer  ☐
		Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards*** provided pursuant to Section 13(a) of the Exchange Act.

***    The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☐ International Financial Reporting Standards as issued by the International
Accounting Standards Board  ☑ Other  ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ☐    Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

TABLE OF CONTENTS

BASIS OF PRESENTATION		i
STATEMENTS REGARDING COMPETITIVE POSITION		i
ADDITIONAL INFORMATION		i
CERTAIN TERMS, ABBREVIATIONS AND CONVERSION TABLE		i
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		ii
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
ITEM 4.	INFORMATION ON THE COMPANY	2
ITEM 4A.	UNRESOLVED STAFF COMMENTS	2
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	2
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	18
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	18
ITEM 8.	FINANCIAL INFORMATION	18
ITEM 9.	THE OFFER AND LISTING	19
ITEM 10.	ADDITIONAL INFORMATION	19
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	24
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	25
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	25
ITEM 15.	CONTROLS AND PROCEDURES	25
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	26
ITEM 16B.	CODE OF ETHICS	26
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	26
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	26
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	27
ITEM 16F.	CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT	27
ITEM 16G.	CORPORATE GOVERNANCE	27
ITEM 16H.	MINE SAFETY DISCLOSURE	30
ITEM 17.	FINANCIAL STATEMENTS	30
ITEM 18.	FINANCIAL STATEMENTS	30
ITEM 19.	EXHIBITS	31

BASIS OF PRESENTATION

References in this annual report on Form 20-F (this “Annual Report”) to pages and sections of the “Universal Registration Document 2020”  are references only to those pages and sections of TOTAL’s Universal Registration Document for the year ended December 31, 2020 attached in Exhibit 15.1 to this Form 20-F and forming a part hereof. Other than as expressly provided herein, the Universal Registration Document 2020 is not incorporated herein by reference.

TOTAL’s Consolidated Financial Statements on pages F-9 to F-13 are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union (EU) as of December 31, 2020.

In addition, this Annual Report and the Universal Registration Document 2020 contain certain measures that are not defined by generally accepted accounting principles (GAAP) such as IFRS. Our management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance. We believe that presentation of this information, along with comparable GAAP measures, is useful to investors because it allows investors to understand the primary method used by management to evaluate performance on a meaningful basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Non-GAAP financial measures as reported by us may not be comparable with similarly titled amounts reported by other companies.

STATEMENTS REGARDING COMPETITIVE POSITION

Unless otherwise indicated, statements made in “Item 4. Information on the company” referring to TOTAL’s competitive position are based on the Company’s estimates, and in some cases rely on a range of sources, including investment analysts’ reports, independent market studies and TOTAL’s internal assessments of market share based on publicly available information about the financial results and performance of market participants.

ADDITIONAL INFORMATION

This Annual Report reports information primarily regarding TOTAL’s business, operations and financial information relating to the fiscal year ended December 31, 2020. For more recent updates regarding TOTAL, you may inspect any reports, statements or other information TOTAL files with the United States Securities and Exchange Commission (“SEC”). All of TOTAL’s SEC filings made after December 31, 2001 are available to the public at the SEC website at http://www.sec.gov and from certain commercial document retrieval services. See also “Item 10. - 10.8 Documents on display”.

No material on the TOTAL website forms any part of this Annual Report. References in this Annual Report to documents on the TOTAL website are included as an aid to the location of such documents and such documents are not incorporated by reference. References to websites contained in this Annual Report (including all exhibits hereto) are provided for reference only; the information contained on the referenced websites is not incorporated by reference in this Annual Report.

CERTAIN TERMS, ABBREVIATIONS AND CONVERSION TABLE

For the meanings of certain terms used in this document, as well as certain abbreviations and a conversion table, refer to the “Glossary” starting on page 519 of the Universal Registration Document 2020, which is incorporated herein by reference. The terms “TOTAL” and “Group” as used in this document refer to TOTAL SE collectively with all of its direct and indirect consolidated companies located in or outside of France. The term “Company” as used in this document exclusively refers to TOTAL SE, which is the parent company of the Group.

Form 20-F 2020   TOTAL    i

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

TOTAL has made certain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) in this document and in the documents referred to in, or incorporated by reference into, this Annual Report. This document may contain forward-looking statements, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TOTAL. This document may also contain statements regarding the perspectives, objectives, areas of improvements and goals of the Group, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by the Group, it being specified that the means to be deployed do not depend solely on TOTAL. These forward-looking statements may generally be identified by the use of the future or conditional tense or forward-looking words such as “envisions”, “intends”, “anticipates”, “believes”, “considers”, “plans”, “expects”, “thinks”, “targets”, “aims” or similar terminology. Such forward-looking statements included in this document are based on economic data, estimates and assumptions prepared in a given economic, competitive and regulatory environment and considered to be reasonable by the Group as of the date of this document.

These forward-looking statements are not historical data and should not be interpreted as assurances that the perspectives, objectives or goals announced will be achieved. They may prove to be inaccurate in the future, and may evolve or be modified with a significant difference between the actual results and those initially estimated, due to the uncertainties notably related to the economic, financial, competitive and regulatory environment, or due to the occurrence of risk factors, such as, notably, the price fluctuations in crude oil and natural gas, the evolution of the demand and price of petroleum products, the changes in production results and reserves estimates, the ability to achieve cost reductions and operating efficiencies without unduly disrupting business operations, changes in laws and regulations including those related to the environment and climate, currency fluctuations, as well as economic and political developments, changes in market conditions, loss of market share and changes in consumer preferences, or pandemics such as the COVID-19 pandemic. Additionally, certain financial information is based on estimates particularly in the assessment of the recoverable value of assets and potential impairments of assets relating thereto.

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.

For additional factors, please refer to “Item 3. - 3.2 Risk factors”, “Item 5. Operating and financial review and prospects” and “Item 11. Quantitative and qualitative disclosures about market risk”.

ii    TOTAL   Form 20-F 2020

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3.1    Selected financial data

The following table presents selected consolidated financial data for TOTAL on the basis of IFRS as issued by the IASB and IFRS as adopted by the EU for the years ended December 31, 2020, 2019, 2018, 2017 and 2016. Effective January 1, 2014, TOTAL changed the presentation currency of the Group’s Consolidated Financial Statements from the Euro to the U.S. Dollar. ERNST & YOUNG Audit and KPMG Audit, a division of KPMG S.A., independent registered public accounting firms and the Company’s auditors, audited the historical Consolidated Financial Statements of TOTAL for these periods from which the financial data presented below for such periods are derived. All such data should be read in conjunction with the Consolidated Financial Statements and the Notes thereto starting on page F-9.

(in millions of dollars, except share and per share data)	2020	2019	2018	2017	2016
INCOME STATEMENT DATA
Revenues from sales	119,704	176,249	184,106	149,099	127,925
Net income, Group share	(7,242)	11,267	11,446	8,631	6,196
Earnings per share ($)	($2.90)	$4.20	$4.27	$3.36	$2.52
Fully diluted earnings per share ($)	($2.90)	$4.17	$4.24	$3.34	$2.51
CASH FLOW STATEMENT DATA
Cash flow from operating activities	14,803	24,685	24,703	22,319	16,521
Total expenditures	15,534	19,237	22,185	16,896	20,530
BALANCE SHEET DATA
Total assets	266,132	273,294	256,762	242,631	230,978
Non-current financial debt	60,203	47,773	40,129	41,340	43,067
Non-controlling interests	2,383	2,527	2,474	2,481	2,894
Shareholders’ equity - Group share	103,702	116,778	115,640	111,556	98,680
·    Common shares	8,267	8,123	8,227	7,882	7,604
DIVIDENDS
Dividend per share (€)	€2.64(a)	€2.68	€2.56	€2.48	€2.45
Dividend per share ($)	$3.13(a)(b)	$2.95	$2.94	$2.96	$2.61
COMMON SHARES(c)
Average number outstanding of common shares €2.50 par value (shares undiluted)	2,602,026,749	2,601,621,815	2,607,456,934	2,481,802,636	2,379,182,155
Average number outstanding of common shares €2.50 par value (shares diluted)(d)	2,602,026,749	2,618,007,888	2,623,716,444	2,494,756,413	2,389,713,936

(a) Subject to approval by the shareholders’ meeting on May 28, 2021.

(b) Estimated dividend in dollars includes the first quarterly interim ADR dividend of $0.77 paid in October 2020 and the second quarterly interim ADR dividend of $0.80 paid in January 2021, as well as the third quarterly interim ADR dividend of $0.79 payable in April 2021 and the proposed final ADR dividend of $0.77 payable in July 2021. The proposed final ADR dividend of $0.77 payable in July 2021 was converted at a rate of $1.1782/€, based on the exchange rate of the European Central Bank as of March 26, 2021.

(c) The number of common shares shown has been used to calculate per share amounts.

(d) In 2020, the effect generated by the grant of TOTAL performance shares and by the capital increase reserved for employees (19,007,836 shares) is anti-dilutive. In accordance with IAS 33, the weighted-average number of diluted shares is therefore equal to the weighted-average number of shares.

3.2    Risk factors

The Group conducts its activities in an ever-changing environment. It is exposed to risks that, if they were to occur, could have a material adverse effect on its business, financial condition, reputation, outlook, or the price of financial instruments issued by TOTAL. Point 3.1 of chapter 3 of the Universal Registration Document 2020 (starting on page 90), which is incorporated herein by reference, presents the significant risk factors specific to the Group, to which it believes it is exposed as of the filing date of this Annual Report. However, the Group may be exposed to other non-specific risks, or of which it may not be aware, or which it may be underestimating the potential consequences of, or other risks that may not have been considered by the Group as being likely to have a material adverse impact on the Group, its business, financial condition, reputation or outlook.

For additional information on the risks to which TOTAL believes it is exposed as of the filing date of this Annual Report, along with TOTAL’s approaches to managing certain of these risks, please refer to “Item 5. Operating and financial review and prospects” and “Item 11. Quantitative and qualitative disclosures about market risk”, as well as points 3.3 and 3.6 of chapter 3 (starting on pages 101 and 109, respectively) of the Universal Registration Document 2020, which are incorporated herein by reference.

Form 20-F 2020   TOTAL    1

ITEM 4. INFORMATION ON THE COMPANY

The following information providing an integrated overview of the Group from the Universal Registration Document 2020 is incorporated herein by reference:

- presentation of the Group and its governance (points 1.1.1 and 1.7.1-1.7.2 of chapter 1, starting on pages 4 and 26 respectively);

- the Group’s collective ambition and strategy (points 1.2 and 1.3 of chapter 1, starting on pages 12 and 16 respectively);

- history, employees, integrated business model, industrial assets and geographic presence (points 1.1.2, 1.1.3, 1.6.1-1.6.4 of chapter 1, starting on pages 8, 10 and 22 respectively);

- an overview of the Group’s investment policy, R&D, dialogue with stakeholders and sustainability-linked commitments (points 1.4, 1.5, 1.6.5 and 1.8.2 of chapter 1, starting on pages 18, 20, 25 and 39 respectively); and

- organizational structure (point 1.7.3 of chapter 1, starting on page 29).

The following information providing an overview of the Group’s businesses and activities from the Universal Registration Document 2020 is incorporated herein by reference:

- information concerning the Group’s principal capital expenditures and divestitures (point 1.4 of chapter 1, starting on page 18). See also “Item 5. Operating and financial review and prospects”;

- business overview for fiscal year 2020 (points 2.1 to 2.5 of chapter 2, starting on page 44); and

- geographical breakdown of the Group’s sales, property, plants and equipment, intangible assets and capital expenditures over the past three years (Note 4 to the Consolidated Financial Statements, on page F-30).

The following other information from the Universal Registration Document 2020 is incorporated herein by reference:

- countries under economic sanctions (point 3.2 of chapter 3, starting on page 98);

- insurance and risk management (point 3.4 of chapter 3, starting on page 107);

- non-financial performance and additional reporting information (points 5.1 to 5.11 of chapter 5 and chapter 11, starting on page 218 and 495 respectively); and

- investor relations (point 6.6 of chapter 6, starting on page 295).

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This section is the Company’s analysis of its financial performance and of significant trends that may affect its future performance. It should be read in conjunction with the Consolidated Financial Statements and the Notes thereto starting on page F-9 attached hereto. The Consolidated Financial Statements and the Notes thereto are prepared in accordance with IFRS as issued by the IASB and IFRS as adopted by the EU.

This section contains forward-looking statements that are subject to risks and uncertainties. For a list of important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, see “Cautionary Statement Concerning Forward-Looking Statements” starting on page ii.

Critical accounting policies and standards applicable in the future

For an overview of TOTAL’s critical accounting policies, including policies involving management’s judgment and estimates and significant accounting policies applicable in the future, refer to the Introduction and Note 1.2 (“Significant accounting policies applicable in the future”) of the Notes to the Consolidated Financial Statements (starting on pages F-15 and F-17, respectively).

5.1    Overview

TOTAL’s results are affected by a variety of factors, including changes in crude oil and natural gas prices as well as refining and marketing margins, which are all generally expressed in dollars, and changes in exchange rates, particularly the value of the euro compared to the dollar. Higher crude oil and natural gas prices generally have a positive effect on the income of TOTAL, since the Exploration & Production segment’s oil and gas business and Integrated Gas, Renewables & Power segment’s downstream gas business are positively impacted by the resulting increase in revenues. Lower crude oil and natural gas prices generally have a corresponding negative effect. The effect of changes in crude oil prices on the activities of TOTAL’s Refining & Chemicals and Marketing & Services segments depends upon the speed at which the prices of refined petroleum products adjust to reflect such changes. TOTAL’s results are also significantly affected by the costs of its activities, in particular those related to exploration and production, and by the outcome of its strategic decisions with respect to cost reduction efforts. In addition, TOTAL’s results are affected by general economic and political conditions and changes in governmental laws and regulations, as well as by the impact of decisions by OPEC on production levels. For more information, refer to “Item 3. - 3.2 Risk factors”.

2    TOTAL   Form 20-F 2020

TOTAL faced two major crises in 2020: the COVID-19 pandemic that severely affected global energy demand, and the oil crisis that drove the Brent price below $20 per barrel in the second quarter. In this particularly difficult context, the Group implemented an immediate action plan and proved its resilience thanks to the quality of its portfolio (production cost of $5.1 per boe, the lowest among its peers) and its integrated model with cash flow (DACF)⁽¹⁾ generation of nearly $18 billion. It posted an adjusted net income⁽²⁾ of $4.1 billion and, thanks to strong discipline on investments ($13 billion, down 26%) and costs ($1.1 billion in savings), the organic cash breakeven⁽³⁾ was $26 per barrel. Consistent with its climate ambition, the Group recorded exceptional asset impairments, notably on Canadian oil sands assets, most of which were recorded in its accounts at the end of June, leading to an IFRS loss for the year of $7.2 billion.

2020 represents a pivotal year for the Group’s strategy with the announcement of its ambition to get to net zero emissions (Net Zero), together with society. The Group affirms its plan to transform itself into a broad energy company to meet the dual challenge of the energy transition: more energy, less emissions. Thus, the Group’s profile will be transformed over the 2020-30 decade: the growth of energy production will be based on two pillars, LNG and Renewables & Electricity, while oil products are expected to fall from 55% to 30% of sales. To anchor this transformation, the Group will propose to its shareholders at the Annual General Meeting to be held on May 28, 2021, changing its name to TotalEnergies. They will thus have the opportunity to endorse this strategy and the underlying ambition to transition to carbon neutrality.

In 2020, TOTAL secured its investments in Renewables & Electricity ($2 billion) and accelerated the implementation of its strategy to grow renewables, adding 10 GW to its portfolio. With the acquisition at the start of 2021 of a 20% stake in Adani Green Energy Limited (AGEL), one of the largest solar developers in the world, and of portfolios of projects in the United States, the Group now has a portfolio of gross installed capacity, under construction and in development of 35 GW by 2025, with more than 20 GW already benefiting from long-term power purchase agreements.

TOTAL preserves its financial strength with a gearing⁽⁴⁾ of 21.7% at the end of 2020. Confident in the Group’s fundamentals, the Board of Directors of TOTAL SE confirms its policy of supporting the dividend through economic cycles. Therefore, it will propose at the Annual General Meeting of Shareholders to be held on May 28, 2021, the distribution of a final dividend of €0.66 per share, equal to the previous three quarters, and set the dividend for 2020 at €2.64 per share.

Outlook

Supported by OPEC+ quota compliance, oil prices have remained above 50$/b since the beginning of 2021. However, the oil environment remains uncertain and dependent on the recovery of global demand, still affected by the COVID-19 pandemic.

In a context of disciplined OPEC+ quota implementation, the Group anticipates 2021 production will be stable compared to 2020, benefiting from the resumption of production in Libya.

European refining margins remain fragile, with low demand for jet fuel weighing on the recovery of distillates.

Faced with uncertainties in the environment, net investments⁽⁵⁾ are projected at $12 billion in 2021, while preserving the flexibility to mobilize additional investments should the oil and gas environment strengthen. After reducing operating costs by $1.1 billion in 2020 compared to 2019, the Group maintains strong discipline on spending and targets additional savings of $0.5 billion in 2021.

The Group’s teams are fully committed to the four priorities of HSE (Health, Safety and the Environment), operational excellence, cost reduction and cash flow generation.

The Group maintains its priorities for cash flow allocation: investing in profitable projects to implement the Group’s transformation strategy, support the dividend and maintain a strong balance sheet.

Already in 2021, in renewables, the Group has announced more than 10 GW of additional projects through the acquisition of a 20% stake in Adani Green Energy Limited (AGEL), one of the world’s leading solar developers, a partnership with Hanwha Group in the United States with a 1.6 GW portfolio, and the acquisition of a 2.2 GW portfolio of projects in Texas. TOTAL intends to allocate more than 20% of its net investments to Renewables and Electricity in 2021.

(1) Cash flow means DACF. “DACF” = debt adjusted cash flow, is defined as operating cash flow before working capital changes and without financial charges. See footnote 13.

(2) Adjusted net income refers to adjusted net operating income, adjusted for special items, inventory valuation effect and the effect of changes in fair value. See item 5.3 for further details.

(3) “Organic cash breakeven” refers to pre-dividend organic cash breakeven, defined as the Brent price for which the operating cash flow before working capital changes covers the organic investments.

(4) Gearing ratio excluding lease commitments = net debt excluding lease commitments / (net debt excluding lease commitments + shareholders equity Group share + non-controlling interests). For additional information, refer to Note 15.1(E) to the Consolidated Financial Statements (starting on page F-76).

(5) “Net investments” = organic investments + net acquisitions.

Form 20-F 2020   TOTAL    3

5.2    Group results 2018-2020

As of and for the year ended December 31 (in millions of dollars, except per share data)	2020	2019	2018
Non-Group sales	140,685	200,316	209,363
Adjusted net operating income from business segments(a)	6,404	14,554	15,997
·    Integrated Gas, Renewables & Power(b)	1,778	2,389	2,419
·    Exploration & Production(b)	2,363	7,509	8,547
·    Refining & Chemicals	1,039	3,003	3,379
·    Marketing & Services	1,224	1,653	1,652
Net income (loss) from equity affiliates	452	3,406	3,170
Fully-diluted earnings per share ($)	(2.90)	4.17	4.24
Fully-diluted weighted-average shares (millions)(c)	2,602	2,618	2,624
Net income (Group share)	(7,242)	11,267	11,446
Organic investments(d)	10,339	13,397	12,427
Net acquisitions(e)	2,650	4,052	3,141
Net investments(f)	12,989	17,449	15,568
Cash flow from operating activities	14,803	24,685	24,703
Of which:
·    (increase)/decrease in working capital	1,869	(1,718)	769
·    financial charges	(1,938)	(2,069)	(1,538)

2020 and 2019 data take into account the impact of the IFRS 16 “Leases” rule, effective January 1, 2019.

(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes in fair value. See “- 5.3 Business segment reporting” below for further details.

(b) 2018 data restated to reflect the new reporting structure for the business segments’ financial information, effective January 1, 2019.

(c) In 2020, the effect generated by the grant of TOTAL performance shares and by the capital increase reserved for employees (19,007,836 shares) is anti-dilutive. In accordance with IAS 33, the weighted-average number of diluted shares is therefore equal to the weighted-average number of shares.

(d) “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

(e) “Net acquisitions” = acquisitions - assets sales - other operations with non-controlling interests.

(f) “Net investments” = organic investments + net acquisitions. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

Market environment parameters	2020	2019	2018
Brent ($/b)	41.8	64.2	71.3
Henry Hub ($/Mbtu)	2.1	2.5	3.1
NBP ($/Mbtu)(a)	3.3	4.9	7.9
JKM ($/Mbtu)(b)	4.4	5.5	9.7
Average price of liquids ($/b)
Consolidated subsidiaries	37.0	59.8	64.3
Average price of gas ($/Mbtu)
Consolidated subsidiaries	2.96	3.88	4.87
Average price of LNG ($/Mbtu)
Consolidated subsidiaries and equity affiliates	4.83	6.31	–
Variable cost margin – Refining Europe, VCM(c) ($/t)	11.5	34.9	38.2

(a) NBP (National Balancing Point) is a virtual natural gas trading point in the United Kingdom for transferring rights in respect of physical gas and which is widely used as a price benchmark for the natural gas markets in Europe. NBP is operated by National Grid Gas plc, the operator of the UK transmission network.

(b) JKM (Japan-Korea Marker) measures the prices of spot LNG trades in Asia. It is based on prices reported in spot market trades and/or bids and offers collected after the close of the Asian trading day at 16:30 Singapore time.

(c) VCM (variable cost margin - Refining Europe) represents the average margin on variable costs realized by the Group’s European refining business (equal to the difference between the sales of refined products realized by the Group’s European refining and the crude purchases as well as associated variable costs, divided by refinery throughput in tons).

Hydrocarbon production	2020	2019	2018
Combined production (kboe/d)	2,871	3,014	2,775
●    Oil (including bitumen) (kb/d)	1,298	1,431	1,378
●    Gas (including condensates and associated NGL) (kboe/d)	1,573	1,583	1,397

Hydrocarbon production	2020	2019	2018
Combined production (kboe/d)	2,871	3,014	2,775
●    Liquids (kb/d)*	1,543	1,672	1,566
●    Gas (Mcf/d)**	7,246	7,309	6,599

*Including condensate and NGLs, associated to the gas production.

**2019 data restated.

4    TOTAL   Form 20-F 2020

For a discussion of the Group’s proved reserves, refer to point 2.3.1 of chapter 2 of the Universal Registration Document 2020 (starting on page 65), which is incorporated herein by reference. See also point 9.1 of chapter 9 of the Universal Registration Document 2020 (starting on page 426), which is incorporated herein by reference, for additional information on proved reserves, including tables showing changes in proved reserves by region.

2020 vs. 2019

In 2020, market conditions were less favorable than in 2019 due to the COVID-19 pandemic and the oil crisis. The Brent price decreased to $41.8/b on average in 2020 from $64.2/b on average in 2019, while remaining volatile throughout 2020. TOTAL’s average liquids price realization⁽⁶⁾ decreased by 38% to $37.0/b in 2020 from $59.8/b in 2019. TOTAL’s average gas price realization⁽⁶⁾ decreased by 24% to $2.96/Mbtu in 2020 from $3.88/Mbtu in 2019. TOTAL’s average LNG price realization⁽⁷⁾ decreased by 24% to $4.83/Mbtu in 2020 from $6.31/Mbtu in 2019. The Group’s variable cost margin – Refining Europe (“VCM”) decreased by 67% to $11.5/t on average in 2020 compared to $34.9/t in 2019, mainly due to decreasing crude oil prices.

For the full-year 2020, hydrocarbon production was 2,871 kboe/d, a decrease of 5% compared to 3,014 kboe/d in 2019, comprised of:

● (5)% due to compliance with OPEC+ quotas, notably in Nigeria, the United Arab Emirates and Kazakhstan, as well as voluntary reductions in Canada and disruptions in Libya;

● +5% due to the ramp-up of recently started projects, notably Culzean in the United Kingdom, Johan Sverdrup in Norway, Iara in Brazil, Tempa Rossa in Italy and North Russkoye in Russia;

● (3)% due to the natural decline of fields; and

● (2)% due to maintenance, and unplanned outages, notably in Norway.

The euro-dollar exchange rate averaged $1.1422/€ in 2020, compared to $1.1195/€ in 2019.

Non-Group sales were $140,685 million in 2020 compared to $200,316 million in 2019, a decrease of 30% reflecting the decreased hydrocarbon prices and the decrease in global energy demand due to the COVID-19 pandemic. In 2020, Non-Group sales decreased by 32% for the Exploration & Production segment, 14% for the Integrated Gas, Renewables & Power segment, 35% for Refining & Chemicals segment and 27% for the Marketing & Services segment.

Net income (Group share) decreased to $(7,242) million in 2020 compared to $11,267 million in 2019, due to exceptional asset impairments, notably on Canadian oil sands assets. In 2020, total adjustments to net income (Group share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had a negative impact of $11,301 million, including $8.5 billion of impairments, related mainly to oil sands assets in Canada. For a detailed overview of adjustment items for 2020, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19). In 2019, adjustments to net income (Group share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had a negative impact of $561 million mainly due to impairments of assets mainly located in the United States (Utica, Chinook).

Total income taxes in 2020 amounted to $(318) million, a decrease of 95% compared to $(5,872) million in 2019, due to the relative weight and lower tax rates in the Upstream segment and a lower hydrocarbon price environment.

In 2020, TOTAL SE bought back 13,236,044 TOTAL SE shares on the market, i.e., 0.50% of the share capital as of December 31, 2020. In 2019, the Company bought back 52,389,336 TOTAL shares on the market, i.e., 2.01% of the Company’s outstanding share capital as of December 31, 2019. See also “- 5.4.4 Shareholders’ equity”, below.

Fully-diluted earnings per share was $(2.90) in 2020 compared to $4.17 in 2019.

Finalized asset sales amounted to $1.5 billion in 2020, comprised notably of the sale of Enphase shares by SunPower⁽⁸⁾, the sale of the Group's corporate offices in Brussels, the sale of non-strategic assets in the UK North Sea, the completion of the sale of Block CA1 in Brunei, the sale of the Group’s interest in the Fos Cavaou regasification terminal in France, and the sale of 50% of a portfolio of solar and wind assets from Total Quadran in France. Finalized asset sales amounted to $1,939 million for the full-year 2019, comprised notably of the payment received upon the take-over of the Toshiba LNG portfolio in the United States, the sale of the interest in the Wepec refinery in China and the sale of the Group’s interest in the Hazira terminal in India and polystyrene activities in China.

Finalized acquisitions⁽⁹⁾ amounted to $4.2 billion for the full-year 2020, comprised notably of the acquisition of Tullow’s entire interest in the Lake Albert project in Uganda, the acquisition of CCGT assets and of a portfolio of customers from Energías de Portugal in Spain, the acquisition in India of 50% of a portfolio of installed solar activities from Adani Green Energy Limited, the finalization of the acquisition of 37.4% stake in Adani Gas Ltd, the acquisition of interests in Blocks 20 and 21 in Angola and the payment for a second bonus tranche linked to taking the 10% stake in the Arctic LNG 2 project in Russia. Finalized acquisitions amounted to $5,991 million for the full-year 2019, comprised mainly of the acquisition of Anadarko’s interest in Mozambique LNG, the acquisition of a 10% stake in the Arctic LNG 2 project in Russia and the acquisition of Chevron’s interest in the Danish Underground Consortium in Denmark.

(6) Consolidated subsidiaries, excluding inventory value variation.

(7) Consolidated subsidiaries and equity affiliates, excluding inventory value variation.

(8) As at December 31, 2020, TOTAL held an interest of 51.61% in SunPower, an American company listed on NASDAQ and based in California.

(9) Acquisitions net of operations with non-controlling interests.

Form 20-F 2020   TOTAL    5

The Group’s cash flow from operating activities for the full-year 2020 was $14,803 million, a decrease of 40% compared to $24,685 million for the full-year 2019. The change in working capital as determined using the replacement cost method⁽¹⁰⁾ excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable project sale (effective first quarter 2020) and organic loan repayment from equity affiliates was $(894) million for the full-year 2020, compared to $(1,426) million for the full-year 2019. It is the (increase) decrease in working capital of $1,869 million as determined in accordance with IFRS adjusted for (i) the pre-tax inventory valuation effect of $(1,440) million, (ii) the mark-to-market effect of iGRP’s contracts of $(1,116) million, (iii) the capital gains from renewables project sale of $(96) million and (iv) the organic loan repayments from equity affiliates of $(111) million. For the full-year 2020, operating cash flow before working capital changes and without financial charges (DACF)⁽¹¹⁾ was $17,635 million, a decrease of 37% compared to $28,180 million for the full-year 2019. For the full-year 2020, operating cash flow before working capital changes⁽¹²⁾ was $15,697 million, a decrease of 40% compared to $26,111 million for the full-year 2019.

The Group’s net cash flow⁽¹³⁾ was $2,708 million in 2020 compared to $8,662 million in 2019, due to the decrease of $10,414 million in operating cash flow before working capital changes, partially offset by a reduction in net investments of $4,460 million.

See also “- 5.4 Liquidity and Capital Resources”, below.

2019 vs. 2018

In 2019, market conditions were less favorable than in 2018. The Brent price decreased to $64.2/b on average in 2019 from $71.3/b on average in 2018, while remaining volatile. In 2019, TOTAL’s average liquids price realization⁽¹⁴⁾ decreased by 7% to $59.8/b in 2019 from $64.3/b in 2018. TOTAL’s average gas price realization⁽¹⁴⁾ decreased by 20% to $3.88/Mbtu in 2019 from $4.87/Mbtu in 2018. The Group’s European refining VCM decreased by 9% to $34.9/t on average in 2019 compared to $38.2/t in 2018, mainly due to decreasing crude oil prices.

For the full-year 2019, hydrocarbon production was 3,014 kboe/d, an increase of 9% compared to 2,775 kboe/d in 2018, due to:

- +13% related to the start-up and ramp-up of new projects, including Yamal LNG in Russia, Egina in Nigeria, Ichthys in Australia, Kaombo in Angola, Culzean in the United Kingdom and Johan Sverdrup in Norway;

- (3)% due to the natural decline of the fields; and

- (1)% due to maintenance, notably in Nigeria, Norway and the Tyra redevelopment project in Denmark.

The euro-dollar exchange rate averaged $1.1195/€ in 2019, compared to $1.1810/€ in 2018.

Non-Group sales were $200,316 million in 2019 compared to $209,363 million in 2018, a decrease of 4% reflecting the decreased hydrocarbon prices, partially offset by the increase of the Group’s production in 2019. In 2019, Non-Group sales decreased by 27% for the Exploration & Production segment, 5% for the Refining & Chemicals segment and 3% for the Marketing & Services segment. The Integrated Gas, Renewables & Power segment’s Non-Group sales increased by 5% in 2019.

Net income (Group share) decreased by 2% to $11,267 million in 2019 compared to $11,446 million in 2018, mainly due to lower hydrocarbon prices, partially offset by growth of the Group’s hydrocarbon production. In 2019, adjustments to net income (Group share), which include the after-tax inventory valuation effect, special items and the impact of changes in fair value, had a negative impact of $561 million mainly due to impairments on assets mainly located in the United States (Utica, Chinook). For a detailed overview of adjustment items for 2019, refer to Note 3 to the Consolidated Financial Statements (starting on page F - 16). In 2018, adjustments to net income (Group share), which include the after-tax inventory valuation effect, special items and the impact of changes in fair value, had a negative impact of $2,113 million, mainly due to an inventory effect and an impairment on Ichthys related to the sale of a partial interest by the Group, as well as the impairment of production facilities by SunPower⁽¹⁵⁾.

Income taxes in 2019 amounted to $(5,872) million, a decrease of 9.9% compared to $(6,516) million in 2018, due to the relative weight and lower tax rates in the Upstream segment and a lower hydrocarbon price environment.

In 2019, the Company bought back 52,389,336 TOTAL shares on the market, i.e., 2.01% of the Company’s outstanding share capital as of December 31, 2019. See also “- 5.4.4 Shareholders’ equity”, below. In 2018, the Company bought back 72,766,481 TOTAL shares on the market, i.e., 2.76% of the Company’s outstanding share capital as of December 31, 2018.

Fully-diluted earnings per share was $4.17 in 2019 compared to $4.24 in 2018, a decrease of 2%.

Finalized asset sales amounted to $1,939 million for the full-year 2019, comprised notably of the payment received upon the take-over of the Toshiba LNG portfolio in the United States, the sale of the interest in the Wepec refinery in China, the sale of the Group’s interest in the Hazira terminal in India and polystyrene activities in China. Asset sales completed were $5,172 million for the full-year 2018, comprised of the sale of a 4% interest in the Ichthys project in Australia and the sale of the Group’s share of the LNG re-gas terminal at Dunkirk, as well as the sale of Joslyn in Canada, Rabi in Gabon, the Martin Linge and Visund fields in Norway, an interest in Fort Hills in Canada, SunPower’s sale of its interest in 8point3, the marketing activities of TotalErg in Italy, the Marketing & Services network in Haiti, and the contribution of the Bayport polyethylene unit in the United States to the joint venture formed with Borealis (and Nova prior to 2020) in which TOTAL holds 50%.

(10) For information on the replacement cost method, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

(11) “DACF” = debt adjusted cash flow, is defined as operating cash flow before working capital changes and without financial charges. See footnote 12.

(12) “Operating cash flow before working capital changes” is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sale (effective first quarter 2020). 2019 data have been restated to cancel the impact of fair valuation of iGRP sector’s contracts.

(13) “Net cash flow” = operating cash flow before working capital changes - net investments (including other transactions with non-controlling interests). See footnote 12.

(14) Consolidated subsidiaries, excluding inventory value variation.

(15) As at December 31, 2019, TOTAL held an interest of 46.74% in SunPower, an American company listed on NASDAQ and based in California. As at December 31, 2018, TOTAL held an interest of 55.66% in SunPower.

6    TOTAL   Form 20-F 2020

Finalized acquisitions⁽¹⁶⁾ amounted to $5,991 million for the full-year 2019, comprised mainly of the acquisition of Anadarko’s interest in Mozambique LNG, the acquisition of a 10%-stake in the Arctic LNG 2 project in Russia and the acquisition of Chevron’s interest in the Danish Underground Consortium in Denmark. Finalized acquisitions amounted to $8,314 million for the full-year 2018, including $4,493 million in resource acquisitions⁽¹⁷⁾, comprised of the extension of licenses in Nigeria and the acquisition of a network of service stations in Brazil, as well as notably the acquisitions of Direct Énergie, Engie’s LNG business, the increase in the share of Novatek to 19.4%, interests in the Iara and Lapa fields in Brazil, two new 40-year offshore concessions in Abu Dhabi, which follow the previous Abu Dhabi Marine Areas Ltd (ADMA) offshore concession, and the acquisition of offshore assets from Cobalt in the Gulf of Mexico.

The Group’s cash flow from operating activities for the full-year 2019 was $24,685 million, stable compared to $24,703 million for the full-year 2018. The change in working capital as determined using the replacement cost method⁽¹⁸⁾ excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable project sale and organic loan repayment from equity affiliates was $(1,426) million for the full-year 2019, compared to $410 million for the full-year 2018. It is the (increase) decrease in working capital of $(1,718) million as determined in accordance with IFRS adjusted for (i) the pre-tax inventory valuation effect of $446 million, (ii) the mark-to-market effect of iGRP’s contracts of $321 million, (iii) the capital gains from renewables project sale of $0 million and (iv) the organic loan repayments from equity affiliates of $(475) million. Operating cash flow before working capital changes without financial charges (DACF)⁽¹⁹⁾ for the full-year 2019 was $28,180 million, an increase of 9% compared to $25,831 million for the full-year 2018. Operating cash flow before working capital changes⁽²⁰⁾ for the full-year 2019 was $26,111 million, an increase of 7.5% compared to $24,293 million for the full-year 2018.

The Group’s net cash flow⁽²¹⁾ remained stable in 2019 at $8,662 million for the full-year 2019, compared to $8,725 million for the full-year 2018. The start-up of strong cash flow generating projects such as Yamal LNG in Russia, Ichthys in Australia, Kaombo in Angola and Egina in Nigeria offset the impact of lower Brent and gas prices.

See also “- 5.4 Liquidity and Capital Resources”, below.

5.3    Business segment reporting

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. However, 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 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 rather than the historical value. 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 executive committee 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. 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. Furthermore, TOTAL enters into derivative instruments to risk manage certain operational contracts or assets. Under IFRS, these derivatives are recorded at fair value while the underlying operational transactions are recorded as they occur. Internal indicators defer the fair value on derivatives to match with the transaction occurrence. 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, and 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 the Company’s audited Consolidated Financial Statements, see Note 3 to the Consolidated Financial Statements (starting on page F-19).

(16) Acquisitions net of operations with non-controlling interests.

(17) “Resource acquisitions” = acquisition of a participating interest in an oil and gas mining property by way of an assignment of rights and obligations in the corresponding permit or license and related contracts, with a view to producing the recoverable oil and gas.

(18) For information on the replacement cost method, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

(19) “DACF” = debt adjusted cash flow, is defined as operating cash flow before working capital changes and without financial charges. See footnote 20.

(20) “Operating cash flow before working capital changes” is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sale (effective first quarter 2020). 2018 and 2019 data have been restated to cancel the impact of fair valuation of iGRP sector’s contracts.

(21) “Net cash flow” = operating cash flow before working capital changes - net investments (including other transactions with non-controlling interests). See footnote 20.

Form 20-F 2020   TOTAL    7

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. For further discussion of the calculation of net operating income and the calculation of return on average capital employed (ROACE⁽²²⁾), see Note 3 to the Consolidated Financial Statements (starting on page F-19).

The profitable growth in the gas and low carbon electricity integrated value chains is one of the key axes of TOTAL’s strategy. In order to give more visibility to these businesses, a new reporting structure for the business segments’ financial information was implemented effective January 1, 2019. The organization of the Group’s activities is structured around the following four segments: Exploration & Production (EP), Integrated Gas, Renewables & Power (iGRP - comprising TOTAL’s integrated gas (including LNG) and low carbon electricity businesses and the upstream and midstream LNG activity that was previously reported in the EP segment), Refining & Chemicals and Marketing & Services. Certain figures for the year 2018 were previously restated in order to reflect the new reporting structure for the business segments’ financial information.

5.3.1    Integrated Gas, Renewables & Power segment

Hydrocarbon production for LNG and LNG sales

Hydrocarbon production for LNG	2020	2019	2018
iGRP (kboe/d)	530	560	381
·    Liquids (kb/d)*	69	71	39
·    Gas (Mcf/d)**	2,519	2,656	1,875

*Including condensates and NGLs, associated to the gas production.

**2019 data restated.

Liquefied Natural Gas	2020	2019	2018
Overall LNG sales (Mt)	38.3	34.3	21.8
·    including sales from equity production*	17.6	16.3	11.1
·    including sales by TOTAL from equity production and third-party purchases	31.1	27.9	17.1

*The Group’s equity production may be sold by TOTAL or by joint ventures.

Renewables & Electricity	2020	2019	2018
Gross renewables installed capacity (GW)*	7.0	3.0	1.7
Gross renewables installed or in development capacity with PPA (GW)*	17.5
Net power production (TWh)**	14.1	11.4	6.4
·    including power production from renewables	4.0	2.0	1.0
Clients power – BtB and BtC (Million)*	5.6	4.1	3.6
Clients gas – BtB and BtC (Million)*	2.7	1.7	1.5
Sales power – BtB and BtC (TWh)	47.3	46.0	31.0
Sales gas – BtB and BtC (TWh)	95.8	95.0	88.4

*Capacity at end of period.

**Solar, wind, biogas, hydroelectric and combined-cycle gas turbine (CCGT) plants.

Results (in millions of dollars except ROACE)	2020	2019	2018
Non-Group sales	15,629	18,167	17,236
Operating income(a)	(527)	1,184	(72)
Net income (loss) from equity affiliates and other items	794	2,330	1,639
Tax on net operating income	71	(741)	(471)
Net operating income(a)	338	2,773	1,096
Adjustments affecting net operating income	1,440	(384)	1,323
Adjusted net operating income(b)	1,778	2,389	2,419
·    including income from equity affiliates	375	1,009	1,249
Organic investments(c)	2,720	2,259	1,745
Net acquisitions(d)	2,183	3,921	1,701
Net investments(e)	4,903	6,180	3,445
ROACE	4.1%	6.3%	7.5%

(a) For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

(b) Adjusted for special items, inventory valuation effect and the effect of changes in fair value. See Note 3 to the Consolidated Financial Statements (starting on page F-19).

(c) “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

(d) “Net acquisitions” = acquisitions - assets sales - other operations with non-controlling interests.

(e) “Net investments” = organic investments + net acquisitions. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

(22) “ROACE” = ratio of adjusted net operating income to average capital employed between the beginning and the end of the period.

8    TOTAL   Form 20-F 2020

2020 vs. 2019

Hydrocarbon production for LNG in 2020 decreased by 5% compared to a year ago, notably due to the shutdown of Snøhvit LNG following a fire at the end of September 2020. Total LNG sales increased by 12% in volume in 2020 compared to 2019 due to the start-up of three trains at Cameron LNG in the United States, the ramp-up of Yamal LNG in Russia and Ichthys LNG in Australia and the increase in trading activities.

The Group's gross installed renewable power generation capacity more than doubled during 2020 to reach 7 GW at the end of the fourth quarter 2020, notably thanks to the acquisition in India of 50% of a 3 GWp portfolio from the Adani Group.

The Group continues to implement its strategy to integrate along the electricity and gas chain in Europe and has increased the number of its electricity and gas customers by 1.5 million and 1 million since 2019, respectively, notably thanks to the finalization of the acquisition in the fourth quarter 2020 of a portfolio of customers from Energías de Portugal in Spain.

Non-Group sales for the Integrated Gas, Renewables & Power segment in 2019 were $15,629 million compared $18,167 million in 2019, a decrease of 14%.

The iGRP segment's adjusted net operating income was $1,778 million in 2020, a decrease of 26% compared to $2,389 million in 2019, mainly due to a decrease in the LNG price.

Adjusted net operating income for the iGRP segment excludes special items. In 2020, the exclusion of special items had a positive impact of $1,440 million on the iGRP segment's adjusted net operating income. Special items included impairments of LNG assets located in Australia. For further information on the recognition of impairment of assets for the iGRP segment, refer to Note 3.D to the Consolidated Financial Statements (starting on page F-25). In 2019, the exclusion of special items had a negative impact of $384 million on the iGRP segment's adjusted net operating income.

For the full-year 2020, the iGRP segment's operating cash flow before working capital changes without financial charges (DACF)⁽²³⁾ was $3,418 million, stable compared to $3,409 million for the full-year 2019. For the full-year 2020, the iGRP segment's cash flow from operating activities excluding financial charges, except those related to leases was $2,129 million, a decrease of 38% compared to $3,461 million for the full-year 2019.

For information on the segment's investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also "- 5.4 Liquidity and Capital Resources", below.

In this context, the iGRP segment's ROACE for the full-year 2020 was 4.1% compared to 6.3% for the full-year 2019.

2019 vs. 2018

Production growth in 2019 was essentially related to the start-up of Ichthys in Australia in the third quarter of 2018 and the successive start-ups of Yamal LNG trains in Russia and the start-up of the first Cameron LNG train in the United States in the second quarter of 2019.

In 2019, LNG sales increased by 57% compared to 2018 for the same reasons and the acquisition of the Engie portfolio of LNG contracts in the third quarter of 2018.

Non-Group sales for the Integrated Gas, Renewables & Power segment in 2019 were $18,167 million compared to $17,236 million in 2018, an increase of 5%.

The iGRP segment’s adjusted net operating income was $2,389 million in 2019, a decrease of 1% compared to $2,419 million in 2018, impacted by lower gas prices in Europe and Asia as well as higher depreciation, depletion and amortization expenses on new projects such as Ichthys in Australia and Yamal LNG in Russia.

Adjusted net operating income for the iGRP segment excludes special items. In 2019, the exclusion of special items had a negative impact of $384 million on the iGRP segment’s adjusted net operating income. In 2018, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $1,323 million. Special items in 2018 included impairments on Ichthys related to the sale of a partial interest by the Group and the impairment of production facilities by SunPower.

For the full-year 2019, the iGRP segment’s operating cash flow before working capital changes without financial charges (DACF)⁽²³⁾ was $3,409 million, an increase of 87% compared to $1,819 million for the full-year 2018 due to strong increases in production and LNG sales. For the full-year 2019, the iGRP segment’s cash flow from operating activities excluding financial charges, except those related to leases was $3,461 million, compared to $596 million for the full-year 2018 due to strong increases in production and LNG sales.

For information on the segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.

In this context, the iGRP segment’s ROACE for the full-year 2019 was 6.3% compared to 7.5% for the full-year 2018.

(23) “DACF” = debt adjusted cash flow. The operating cash flow before working capital changes without financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable project sale (effective first quarter 2020), and without financial charges except those related to leases. 2018 and 2019 data restated. Operating cash flow before changes 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 Note 3 to the Consolidated Financial Statements (starting on page F-19).

Form 20-F 2020   TOTAL    9

5.3.2    Exploration & Production segment

Hydrocarbon production	2020	2019	2018
EP (kboe/d)	2,341	2,454	2,394
·    Liquids (kb/d)*	1,474	1,601	1,527
·    Gas (Mcf/d)	4,727	4,653	4,724

* Including condensates and NGLs, associated to the gas production.

Results (in millions of dollars except effective tax rate and ROACE)	2020	2019	2018
Non-Group sales	4,973	7,261	9,889
Operating income(a)	(5,514)	10,542	12,502
Net income (loss) from equity affiliates and other items	697	610	1,365
Effective tax rate(b)	29.4%	41.5%	46.2%
Tax on net operating income	(208)	(4,572)	(5,770)
Net operating income(a)	(5,025)	6,580	8,097
Adjustments affecting net operating income	7,388	929	450
Adjusted net operating income(c)	2,363	7,509	8,547
·    of which income from equity affiliates	928	996	1,140
Organic investments(d)	5,519	8,635	7,953
Net acquisitions(e)	544	14	2,162
Net investments(f)	6,063	8,649	10,115
ROACE	2.8%	8.4%	9.9%

(a) For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

(b) “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).

(c) Adjusted for special items, inventory valuation effect and the effect of changes in fair value. See Note 3 to the Consolidated Financial Statements (starting on page F-19).

(d) “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

(e) “Net acquisitions” = acquisitions - assets sales - other operations with non-controlling interests.

(f) “Net investments” = organic investments + net acquisitions. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

2020 vs. 2019

Non-Group sales for the EP segment in 2020 were $4,973 million compared to $7,261 million in 2019, a decrease of 32%.

The EP segment’s adjusted net operating income was $2,363 million in 2020, a decrease of 69% compared to $7,509 million in 2019, due to the sharp drop in oil and gas prices and lower production. The effective tax rate decreased from 41.5% in 2019 to 29.4% in 2020, in line with this sharp drop.

Adjusted net operating income for the EP segment excludes special items. In 2020, the exclusion of special items had a positive impact of $7,388 million on the EP segment’s adjusted net operating income. Special items included impairments of the Group’s oil sands assets in Canada. For further information on the recognition of impairment of assets for the EP segment, refer to Note 3.D to the Consolidated Financial Statements (starting on page F-25). In 2019, the exclusion of special items had a positive impact of $929 million on the EP segment’s adjusted net operating income.

For the full-year 2020, the EP segment’s operating cash flow before working capital changes without financial charges (DACF)⁽²⁴⁾ was $9,684 million, a decrease of 46% compared to $18,030 million for the full-year 2019. For the full-year 2020, the segment’s cash flow from operating activities excluding financial charges, except those related to leases was $9,922 million, a decrease of 41% compared to $16,917 million for the full-year 2019.

For additional information on the EP segment’s capital expenditures, refer to point 1.4 (starting on page 18) of chapter 1 and point 2.3.2 (on page 66) of chapter 2 of the Universal Registration Document 2020, which are incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.

In this context, the EP segment’s ROACE for the full-year 2020 was 2.8% compared to 8.4% for the full-year 2019.

2019 vs. 2018

Non-Group sales for the EP segment in 2019 were $7,261 million compared to $9,889 million in 2018, a decrease of 27%.

The EP segment’s adjusted net operating income was $7,509 million in 2019, a decrease of 12% compared to $8,547 million in 2018, due to the decrease in hydrocarbon prices, despite strong production growth.

The effective tax rate decreased from 46.2% in 2018 to 41.5% in 2019, in line with the decrease in oil prices.

Adjusted net operating income for the EP segment excludes special items. In 2019, the exclusion of special items had a positive impact of $929 million on the EP segment’s adjusted net operating income. In 2018, the exclusion of special items had a positive impact on the EP segment’s adjusted net operating income of $450 million due to impairments of assets located mainly in Algeria, Colombia and Congo.

(24) “DACF” = debt adjusted cash flow. The operating cash flow before working capital changes without financial charges of the segment is defined as cash flow operating activities before changes in working capital at replacement cost, without financial charges except those related to leases. Operating cash flow before changes 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 Note 3 to the Consolidated Financial Statements (starting on page F-19).

10    TOTAL   Form 20-F 2020

In 2019, the EP segment’s operating cash flow before working capital changes without financial charges (DACF)⁽²⁴⁾ was $18,030 million, an increase of 1% compared to $17,832 million for the full-year 2018. The start-up of strong cash flow generating projects offset the impact of lower Brent and gas prices. In 2019, the EP segment’s cash flow from operating activities excluding financial charges, except those related to leases was $16,917 million, a decrease of 9% compared to $18,537 million for the full-year 2018.  

For additional information on the EP segment’s capital expenditures, refer to point 1.4 (starting on page 18) of chapter 1 and point 2.3.2 (on page 66) of chapter 2 of the Universal Registration Document 2020, which are incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.

In this context, the EP segment’s ROACE for the full-year 2019 was 8.4% compared to 9.9% for the full-year 2018.

5.3.3    Downstream (Refining & Chemicals and Marketing & Services segments)

Results (in millions of dollars)	2020	2019	2018
Non-Group sales	120,066	174,878	182,231
Operating income(a)	627	5,394	4,354
Net income (loss) from equity affiliates and other items	(356)	423	1,089
Tax on net operating income	(456)	(1,068)	(977)
Net operating income(a)	(185)	4,749	4,466
Adjustments affecting net operating income	2,448	(93)	565
Adjusted net operating income(b)	2,263	4,656	5,031
Organic investments(c)	2,023	2,395	2,614
Net acquisitions(d)	32	118	(722)
Net investments(e)	2,055	2,513	1,892

(a) For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

(b) Adjusted for special items, inventory valuation effect and the effect of changes in fair value. See Note 3 to the Consolidated Financial Statements (starting on page F-19).

(c) “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

(d) “Net acquisitions” = acquisitions - assets sales - other operations with non-controlling interests.

(e) “Net investments” = organic investments + net acquisitions. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

For the full-year 2020, the Downstream segment’s operating cash flow excluding the change in working capital at replacement cost and financial charges, except those related to leases, and including organic loan repayment from equity affiliates was $4,652 million, a decrease of 30% compared to $6,617 million for the full-year 2019. For the full-year 2020, the Downstream segment’s cash flow from operating activities excluding financial charges, except those related to leases was $4,539 million, a decrease of 30% compared to $6,441 million for the full-year 2019.

A.    Refining & Chemicals segment

Refinery throughput and utilization rates(a)	2020	2019	2018
Total refinery throughput (kb/d)	1,292	1,671	1,852
·    France	244	456	610
·    Rest of Europe	618	754	755
·    Rest of World	430	462	487
Utilization rates based on crude only(b)	61%	80%	88%

(a) Includes refineries in Africa reported in the Marketing & Services segment.

(b) Based on distillation capacity at the beginning of the year

Form 20-F 2020   TOTAL    11

Results (in millions of dollars except ROACE)	2020	2019	2018
Non-Group sales	56,615	87,598	92,025
Operating income(a)	(814)	3,342	2,513
Net income (loss) from equity affiliates and other items	(393)	322	782
Tax on net operating income	59	(470)	(445)
Net operating income(a)	(1,148)	3,194	2,850
Adjustments affecting net operating income	2,187	(191)	529
Adjusted net operating income(b)	1,039	3,003	3,379
Organic investments(c)	1,209	1,426	1,604
Net acquisitions(d)	(54)	(44)	(742)
Net investments(e)	1,155	1,382	862
ROACE	8.8%	26.3%	31%

(a) For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

(b) Adjusted for special items, inventory valuation effect and the effect of changes in fair value. See Note 3 to the Consolidated Financial Statements (starting on page F-19).

(c) “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

(d) “Net acquisitions” = acquisitions - assets sales - other operations with non-controlling interests.

(e) “Net investments” = organic investments + net acquisitions. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

2020 vs. 2019

Refinery throughput volumes decreased by 23% in 2020 year-on-year mainly due to high inventories of refined products and the drop in demand which notably led to the economic shutdown of the Donges refinery as well as the prolonged shutdown of the distillation unit at the Normandy platform following a fire that affected the distillation unit at the end of 2019.

Monomer production increased 6% in 2020 year-on-year, supported by demand, and notably as a result of the 2019 planned maintenance on the steamcracker at Daesan in South Korea. Polymer production was stable for full-year 2020 compared to full-year 2019.

Non-Group sales for the Refining & Chemicals segment in 2020 were $56,615 million compared to $87,598 million in 2019, a decrease of 35%.

The Refining & Chemicals segment’s adjusted net operating income was $1,039 million for the full-year 2020, a decrease of 65% compared to $3,003 million for the full-year 2019, due to refining margin deterioration, partially offset by resilient petrochemical margins and outperformance of the trading activities. Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. For the full-year 2020, the exclusion of the inventory valuation effect had a positive impact of $1,165 million on the segment’s adjusted net operating income, compared to a negative impact of $371 million for the full-year 2019. For the full-year 2020, the exclusion of special items had a positive impact of $1,022 million on the segment’s adjusted net operating income, compared to a positive impact of $180 million for the full-year 2019. Special items in 2020 included impairments of refining cash-generating units located in France and the United Kingdom. For further information on the recognition of impairment of assets for the Refining & Chemicals segment, refer to Note 3.D to the Consolidated Financial Statements (starting on page F-19).

For the full-year 2020, the Refining & Chemicals segment’s operating cash flow before working capital changes without financial charges (DACF)⁽²⁵⁾ was $2,472 million, a decrease of 39% compared to $4,072 million for the full-year 2019. For the full-year 2020, the segment’s cash flow from operating activities excluding financial charges, except those related to leases was $2,438 million, a decrease of 36% compared to $3,837 million for the full-year 2019.

For information on the Refining & Chemicals segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.

In this context, the Refining & Chemicals segment’s ROACE for the full-year 2020 was 8.8% compared to 26.3% for the full-year 2019.

(25) “DACF” = debt adjusted cash flow. The operating cash flow before working capital changes without financial charges of the segment is defined as cash flow operating activities before changes in working capital at replacement cost, without financial charges except those related to leases. Operating cash flow before changes 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 Note 3 to the Consolidated Financial Statements (starting on page F-19).

12    TOTAL   Form 20-F 2020

2019 vs. 2018

Refinery throughput volumes decreased by 10% in 2019 notably due to the shutdown for nearly six months of Grandpuits in France.

Non-Group sales for the Refining & Chemicals segment in 2019 were $87,598 million compared to $92,025 million in 2018, a decrease of 5%.

The Refining & Chemicals segment’s adjusted net operating income was $3,003 million for the full-year 2019, a decrease of 11% compared to $3,379 million in 2018 notably due to a decrease of around 10% in refining and petrochemical margins as well as lower throughput.

Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. In 2019, the exclusion of the inventory valuation effect had a negative impact of $371 million on the Refining & Chemicals segment’s adjusted net operating income, compared to a positive impact of $413 million for the full-year 2018. In 2019, the exclusion of special items had a positive impact of $180 million on the Refining & Chemicals segment’s adjusted net operating income, compared to a positive impact of $116 million for the full-year 2018.

In 2019, the Refining & Chemicals segment’s operating cash flow before working capital changes without financial charges (DACF)⁽²⁵⁾ decreased by 7% compared to the full-year 2018, from $4,388 million to $4,072 million due to a decrease of approximately 10% in refining and petrochemical margins as well as lower throughput. In 2019, the Refining & Chemicals segment’s cash flow from operating activities excluding financial charges, except those related to leases was $3,837 million compared to $4,308 million for the full-year 2018 due to a decrease of approximately 10% in refining and petrochemical margins as well as lower throughput.

For information on the Refining & Chemicals segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.

In this context, the Refining & Chemicals segment’s ROACE for the full-year 2019 was 26.3% compared to 31% for the full-year 2018.

B.    Marketing & Services segment

Petroleum product sales(a) (kb/d)	2020	2019	2018
Total Marketing & Services sales	1,477	1,845	1,801
·    Europe	823	1,021	1,001
·    Rest of world	654	824	800

(a) Excludes trading and bulk refining sales.

Results (in millions of dollars except ROACE)	2020	2019	2018
Non-Group sales	63,451	87,280	90,206
Operating income(a)	1,441	2,052	1,841
Net income (loss) from equity affiliates and other items	37	101	307
Tax on net operating income	(515)	(598)	(532)
Net operating income(a)	963	1,555	1,616
Adjustments affecting net operating income	261	98	36
Adjusted net operating income(b)	1,224	1,653	1,652
Organic investments(c)	814	969	1,010
Net acquisitions(d)	86	162	20
Net investments(e)	900	1,131	1,030
ROACE	14.3%	22.3%	25%

(a) For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

(b) Adjusted for special items, inventory valuation effect and the effect of changes in fair value. See Note 3 to the Consolidated Financial Statements (starting on page F-19).

(c) “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

(d) “Net acquisitions” = acquisitions - assets sales - other operations with non-controlling interests.

(e) “Net investments” = organic investments + net acquisitions. For additional information on investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference.

2020 vs. 2019

Petroleum product sales volumes decreased by 20% in 2020 compared to 2019, in response to the significant slowdown in global activity related to the COVID-19 pandemic. Aviation and marine activities remain severely affected in this context; however, the decline in retail sales was mitigated by network growth in Angola, Saudi Arabia, Brazil and Mexico.

Non-Group sales for the Marketing & Services segment in 2020 were $63,451 million compared to $87,280 million in 2019, a decrease of 27%.

Form 20-F 2020   TOTAL    13

The Marketing & Services segment’s adjusted net operating income decreased by 26% in 2020 to $1,224 million compared to $1,653 million in 2019. Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. For the full-year 2020, the exclusion of the inventory valuation effect had a positive impact of $137 million on the segment’s adjusted net operating income, compared to a positive impact of $14 million for the full-year 2019. For the full-year 2020, the exclusion of special items had a positive impact of $124 million on the segment’s adjusted net operating income, compared to a positive impact of $84 million for the full-year 2019.

For the full-year 2020, the Marketing & Services segment’s operating cash flow before working capital changes without financial charges (DACF)⁽²⁶⁾ $2,180 million, a decrease of 14% compared to $2,546 million for the full-year 2019. For the full-year 2020, the segment’s cash flow from operating activities excluding financial charges, except those related to leases was $2,101 million, a decrease of 19% compared to $2,604 million for the full-year 2019.

For information on the Marketing & Services segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.

In this context, the Marketing & Services segment’s ROACE for the full-year 2020 was 14.3% compared to 22.3% for the full-year 2018.

2019 vs. 2018

In 2019, petroleum product sales increased by 2% compared to 2018, notably due to business developments in the African and American regions, notably Mexico and Brazil.

Non-Group sales for the Marketing & Services segment in 2019 were $87,280 million compared to $90,206 million in 2018, a decrease of 3%.

The Marketing & Services segment’s adjusted net operating income remained stable in 2019 at $1,653 million compared to $1,652 million in 2018. Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. In 2019, the exclusion of the inventory valuation effect had a positive impact of $14 million on the Marketing & Services segment’s adjusted net operating income, compared to a positive impact of $5 million for the full-year 2018. In 2019, the exclusion of special items had a positive impact of $84 million on the Marketing & Services segment’s adjusted net operating income, compared to a positive impact of $31 million for the full-year 2018.

In 2019, the Marketing & Services segment’s operating cash flow before working capital changes without financial charges (DACF)⁽²⁶⁾ was $2,546 million, an increase of 18% compared to $2,156 million for the full-year 2018. In 2019, the Marketing & Services segment’s cash flow from operating activities excluding financial charges, except those related to leases decreased by 6% compared to the full-year 2018, from $2,759 million to $2,604 million.

For information on the Marketing & Services segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.

In this context, the Marketing & Services segment’s ROACE for the full-year 2019 was 22.3% compared to 25% for the full-year 2018.

5.4    Liquidity and capital resources

(M$)	2020	2019	2018
Cash flow from operating activities	14,803	24,685	24,703
Including (increase) decrease in working capital	1,869	(1,718)	769
Cash flow used in investing activities	(13,079)	(17,177)	(14,946)
Total expenditures	(15,534)	(19,237)	(22,185)
Total divestments	2,455	2,060	7,239
Cash flow used in financing activities	1,398	(7,709)	(13,925)
Net increase (decrease) in cash and cash equivalents	3,122	(201)	(4,168)
Effect of exchange rates	794	(354)	(1,110)
Cash and cash equivalents at the beginning of the period	27,352	27,907	33,185
Cash and cash equivalents at the end of the period	31,268	27,352	27,907

TOTAL’s cash requirements for working capital, capital expenditures, acquisitions and dividend payments over the past three years were financed primarily by a combination of funds generated from operations, net borrowings and divestments of assets. In the current environment, TOTAL expects its external debt to be principally financed from the international debt capital markets. The Group continually monitors the balance between cash flow from operating activities and net expenditures. In the Company’s opinion, its working capital is sufficient for its present requirements.

(26) “DACF” = debt adjusted cash flow. The operating cash flow before working capital changes without financial charges of the segment is defined as cash flow operating activities before changes in working capital at replacement cost, without financial charges except those related to leases. 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 Note 3 to the Consolidated Financial Statements (starting on page F-19).

14    TOTAL   Form 20-F 2020

5.4.1    Capital expenditures

The largest part of TOTAL’s capital expenditures in 2020 of $15,534 million was made up of additions to intangible assets and property, plant and equipment (approximately 75%), with the remainder attributable to equity-method affiliates and to acquisitions of subsidiaries. In the Exploration & Production segment, as described in more detail under point 9.1.6 of chapter 9 of the Universal Registration Document 2020 (on page 438), which is incorporated herein by reference, capital expenditures in 2020 were principally development costs (approximately 75%, mainly for construction of new production facilities), exploration expenditures (successful or unsuccessful, approximately 10%) and acquisitions of proved and unproved properties (approximately 15%). In the Integrated Gas, Renewables & Power segment, approximately 52% of capital expenditures were related mainly to facilities investments with the balance being related mainly to acquisitions. In the Refining & Chemicals segment, approximately 83% of capital expenditures in 2020 were related to refining and petrochemical activities (essentially 74% for existing units including maintenance and major turnarounds and 26% for new constructions), the balance being related mainly to Hutchinson. In the Marketing & Services segment, approximately 88% of capital expenditures in 2020 were development expenditures, mainly in Europe and Africa, with the balance being mainly attributable to acquisitions.

For additional information on capital expenditures, refer to the discussion above in “- 5.1 Overview”, “- 5.2 Group results 2018-2020” and “- 5.3 Business segment reporting”, above, as well as point 1.4.3 of chapter 1 (on page 20) of the Universal Registration Document 2020, which is incorporated herein by reference.

5.4.2    Cash flow

Cash flow from operating activities in 2020 was $14,803 million compared to $24,685 million in 2019 and $24,703 million in 2018. The decrease of $9,882 million from 2019 to 2020 was mainly due to the decrease in net income.

Cash flow used in investing activities in 2020 was $13,079 million compared to $17,177 million in 2019 and $14,946 million in 2018. The decrease of $4,098 million from 2019 to 2020 was mainly due to lower expenditures in the Exploration & Production segment and the Integrated Gas, Power & Renewables segment. The increase of $2,231 million from 2018 to 2019 was mainly due to lower divestments in the Exploration & Production segment. Total expenditures in 2020 were $15,534 million compared to $19,237 million in 2019 and $22,185 million in 2018. During 2020, 44% of the expenditures were made by the Exploration & Production segment (as compared to 47% in 2019 and 62% in 2018), 40% by the Integrated Gas, Power & Renewables segment (as compared to 37% in 2019 and 23% in 2018), 9% by the Refining & Chemicals segment (compared to 9% in 2019 and 8% in 2018) and 7% by the Marketing & Services segment (compared to 7% in 2019 and 7% in 2018). The main source of funding for these expenditures was cash from operating activities and issuances of non-current debt.

For additional information on expenditures, please refer to the discussions in “- 5.1 Overview”, “- 5.2 Group results 2018-2020” and “- 5.3 Business segment reporting”, above, and point 1.4 of chapter 1 and point 6.2.2 of chapter 6 of the Universal Registration Document 2020 (starting on pages 18 and 285 respectively), which are incorporated herein by reference and Note 15.1.D to the Consolidated Financial Statements on page F-76.

Divestments, based on selling price and net of cash sold, in 2020 were $2,455 million compared to $2,060 million in 2019 and $7,239 million in 2018. In 2020, the Group’s principal divestments were assets sales of $1,539 million compared to $1,939 million in 2019, consisting mainly of the sales described in “- 5.2 Group results 2018-2020” above. In 2018, the Group’s principal divestments were assets sales of $5,172 million, consisting mainly of sales of a 4% interest in the Ichthys project in Australia, the Group’s share of the LNG re-gas terminal at Dunkirk, Joslyn in Canada, Rabi in Gabon, the Martin Linge and Visund fields in Norway, an interest in Fort Hills in Canada, SunPower’s sale of its interest in 8point3, the marketing activities of TotalErg in Italy, the sale of the Marketing & Services network in Haiti and the contribution of the Bayport polyethylene unit in the United States to the joint venture formed with Borealis (and Nova prior to 2020) in which TOTAL holds 50%.

Cash flow from/(used in) financing activities in 2020 was $1,398 million compared to $(7,709) million in 2019 and $(13,925) million in 2018. The increase in cash flow from financing activities in 2020 compared to 2019 was primarily due to the increase in the net issuance of non-current debt ($15,800 million in 2020 compared to $8,131 million in 2019) and the decrease in buyback of shares ($611 million in 2020 compared to $2,810 million in 2019). The decrease in cash flow used in financing activities in 2019 compared to 2018 was primarily due to the decrease in buyback of shares ($2,810 million in 2019 compared to $4,328 million in 2018), the increase in the net issuance of non-current debt ($8,131 million in 2019 compared to $649 million in 2018) and the decrease in current financial assets and liabilities ($536 million in 2019 compared to $797 million in 2018).

5.4.3    Indebtedness

The Company’s non-current financial debt at year-end 2020 was $60,203 million⁽²⁷⁾ compared to $47,773 million at year-end 2019 and $40,129 million at year-end 2018. For further information on the Company’s level of borrowing and the type of financial instruments, including maturity profile of debt and currency and interest rate structure, see point 1.8.1.2 of chapter 1 in the Universal Registration Document 2020 (starting on page 37), which is incorporated herein by reference and Note 15 (“Financial structure and financial costs”) to the Consolidated Financial Statements starting on page F - 70. For further information on the Company’s treasury policies, including the use of instruments for hedging purposes and the currencies in which cash and cash equivalents are held, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.

Cash and cash equivalents at year-end 2020 were $31,268 million compared to $27,352 million at year-end 2019 and $27,907 million at year-end 2018.

On March 24, 2021, Moody’s revised TOTAL’s outlook from negative to stable, with its long-term credit rating revised from Aa3 to A1. On February 18, 2021, Standard and Poor’s revised TOTAL’s outlook from credit watch negative to stable and its long-term credit rating from A+ to A.

(27) Excludes net current and non-current financial debt of $313 million as of December 31, 2020, related to assets classified in accordance with IFRS 5 “non-current assets held for sale and discontinued operations” and $301 million as of December 31, 2019.

Form 20-F 2020   TOTAL    15

5.4.4    Shareholders’ equity

Shareholders’ equity at year-end 2020 was $106,085 million compared to $119,305 million at year-end 2019 and $118,114 million at year-end 2018. Changes in shareholders’ equity in 2020 were primarily due to the impacts of comprehensive income, dividend payments, the issuance of common shares of TOTAL SE and perpetual subordinated notes issued by TOTAL SE in September 2020 (callable in 2030) recorded as equity for €1 billion (or approximately $1.2 billion using the €/$ exchange rate on September 4, 2020 of €1 = $1.1820 as released by the Board of Governors of the Federal Reserve System on September 7, 2020) proceeds of which were used to repurchase part of the €2.5 billion notional amount of existing perpetual subordinated notes issued by TOTAL SE in February 2015, of which €1 billion were then outstanding, and the buy-back of TOTAL SE shares. Changes in shareholders’ equity in 2019 were primarily due to the impacts of comprehensive income, dividend payments, the issuance of common shares of TOTAL SE and perpetual subordinated notes in April 2019 (callable in 2021) recorded as equity for €1.5 billion (or approximately $1.7 billion using the €/$ exchange rate on April 19, 2019 of €1 = $1.1246 as released by the Board of Governors of the Federal Reserve System on April 22, 2019) proceeds of which were used to repurchase €1.5 billion notional amount of existing perpetual subordinated notes issued by TOTAL SE in 2015, and the buy-back of TOTAL SE shares. Changes in shareholders’ equity in 2018 were primarily due to the impacts of comprehensive income, dividend payments, the issuance of common shares of TOTAL SE and the buy-back of TOTAL SE shares in the context of the shareholder return policy announced in February 2018.

In 2020, TOTAL SE bought back 13,236,044 TOTAL SE shares on the market, i.e., 0.50% of the share capital as of December 31, 2020: 12,233,265 TOTAL SE shares for an amount of $0.55 billion⁽²⁸⁾, within the framework of the $5 billion share buyback program over the 2018-2020 period and 1,002,779 TOTAL SE shares were bought back in order to cover the performance share plans approved by the Board of Directors.

In 2019, TOTAL SE bought back 52,389,336 TOTAL SE shares on the market, i.e., 2.01% of the share capital as of December 31, 2019: 3,589,035 TOTAL SE shares were bought back in order to cover the performance share plans approved by the Board of Directors and 48,800,301 TOTAL SE shares were bought back for cancellation, including:

- 16,076,936 TOTAL SE shares in order to cancel the dilution related to the TOTAL SE shares issued for payment of the second and third interim dividends for the fiscal year ended December 31, 2018; and

- 32,723,365 TOTAL SE shares for an amount of $1.75 billion⁽²⁹⁾, within the framework of the $5 billion share buyback program over the 2018-2020 period.

Additionally, the Board of Directors, at a meeting held on December 11, 2019, decided, following the authorization of the Extraordinary Shareholders’ Meeting on May 26, 2017, to cancel 65,109,435 treasury shares of TOTAL SE including: 34,860,133 TOTAL SE shares issued, with no discount, in 2019 for payment of the first, second and third interim dividends for the fiscal year ended December 31, 2018 and 30,249,302 TOTAL SE shares repurchased within the framework of the $5 billion share buyback program over the 2018-2020 period. This transaction had no impact on the consolidated financial statements of TOTAL SE, the number of fully-diluted weighted-average shares or on the earnings per share.

In 2018, the Company bought back 72,766,481 TOTAL SE shares on the market, i.e., 2.76% of the share capital as of December 31, 2018. Of these, 71,950,977 TOTAL SE shares were bought back for cancellation, including:

- 47,229,037 TOTAL SE shares in order to cancel the dilution related to the TOTAL SE shares issued for payment (i) of the second and third interim dividends and the final dividend for fiscal year 2017, as well as (ii) the first interim dividend for fiscal year 2018; and

- 24,721,940 TOTAL SE shares for $1.5 billion⁽³⁰⁾, following the Board’s decision to buy back shares of the Company up to an amount of $5 billion over the 2018-2020 period.

The remaining 815,504 TOTAL SE shares were bought back in order to cover the performance share plans approved by the Board of Directors on July 27, 2016, and July 26, 2017.

Additionally, the Board of Directors of the Company, at a meeting held on December 12, 2018, decided, following the authorization of the Extraordinary Shareholders’ Meeting on May 26, 2017, to cancel 44,590,699 treasury shares of TOTAL SE, including 28,445,840 TOTAL SE shares issued, with no discount, in 2018 for payment of the second and third interim dividends, as well as the final dividend, for fiscal year 2017 and 16,144,859 TOTAL SE shares bought back pursuant to the shareholder return policy, up to an amount of $5 billion over the 2018-2020 period. This cancellation of shares had no impact on the consolidated financial statements of TOTAL SE, the number of fully-diluted weighted-average shares or on the earnings per share.

5.4.5    Net-debt-to-capital ratio

As of December 31, 2020, TOTAL’s net-debt-to-capital ratio excluding leases⁽³¹⁾ was 21.7% compared to 16.7% and 14.3% at year-ends 2019 and 2018 respectively. The increase from 2019 to 2020 and from 2018 to 2019 was mostly due to the increase of net debt. For additional information, please refer to the Notes to the Consolidated Financial Statements (starting on page F-14).

As of December 31, 2020, TOTAL SE had $14,902 million of long-term confirmed lines of credit, of which $11,256 million were unused.

(28) Or €0.50 billion based on the European Central Bank average exchange rate for the first semester of 2020.

(29) Or €1.56 billion based on the European Central Bank average exchange rate for 2019.

(30) Or €1.2 billion based on the European Central Bank average exchange rate for 2018.

(31) For additional information, refer to Note 15.1(E) to the Consolidated Financial Statements (starting on page F-76).

16    TOTAL   Form 20-F 2020

5.5       Guarantees and other off-balance sheet arrangements

As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Ichthys LNG project amounted to $4,912 million. As of December 31, 2019, the guarantees amounted to $4,937 million. As of December 31, 2018, the guarantees amounted to $9,425 million.

As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Yamal LNG project amounted to $3,250 million by TOTAL SE. As of December 31, 2019, the guarantees amounted to $3,688 million. As of December 31, 2018, the guarantees amounted to $3,875 million.

As of December 31, 2020, TOTAL SE has confirmed guarantees for TOTAL Refining SAUDI ARABIA SAS shareholders' advances for an amount of $1,164 million. As of December 31, 2019, the guarantees amounted to $1,184 million. As of December 31, 2018, the guarantees amounted to $1,462 million.

As of December 31, 2020, the guarantee given in 2008 by TOTAL SE in connection with the financing of the Yemen LNG project amounted to $509 million, the same amount as in 2019. As of December 31, 2018, the guarantee given in 2008 by TOTAL SE in connection with the financing of the Yemen LNG project amounted to $551 million.

As of December 31, 2020, guarantees provided by TOTAL SE in connection with the financing of the Bayport Polymers LLC project, amounted to $1,820 million, the same amount as in 2019 and 2018.

These guarantees and other information on the Company’s commitments and contingencies are presented in Note 13 (“Off balance sheet commitments and contractual obligations”) to the Consolidated Financial Statements (starting on page F-64).

The Group does not currently consider that these guarantees, or any other off-balance sheet arrangements of the Company or any other members of the Group, have or are reasonably likely to have, currently or in the future, a material effect on the Group’s financial condition, changes in financial condition, revenues or expenses, results of operation, liquidity, capital expenditures or capital resources.

5.6       Contractual obligations

	Less than			More than
Payment due by period (M$)	1 year	1-3 years	3-5 years	5 years	Total
Non-current debt obligations net of hedging instruments(a)	–	13,755	8,990	25,960	48,705
Current portion of non-current debt obligations net of hedging instruments(b)	4,674	–	–	–	4,674
Lease obligations recorded in the balance sheet(c)	1,207	1,858	1,320	4,558	8,943
Asset retirement obligations(d)	463	1,067	773	13,065	15,368
Lease obligations not recorded in the balance sheet(c)	704	411	215	415	1,745
Purchase obligations(e)	11,719	21,210	17,916	92,332	143,177
TOTAL	18,767	38,301	29,214	136,330	222,612

(a) Non-current debt obligations are included in the items “Non-current financial debt” and “Hedging instruments of non-current financial debt” of the Consolidated Balance Sheet (on page F-8). The figures in this table are net of the non-current portion of issue swaps and swaps hedging bonds and exclude non-current lease obligations of $7,736 million.

(b) The current portion of non-current debt is included in the items “Current borrowings”, “Current financial assets” and “Other current financial liabilities” of the Consolidated Balance Sheet. The figures in this table are net of the current portion of issue swaps and swaps hedging bonds and exclude the current portion of lease obligations of $1,207 million.

(c) Lease obligations: the Group leases real estate, retail stations, ships and other equipment through non-cancelable capital and operating leases. Leases that are of short duration or that relate to low value assets are not recorded in the balance sheet, in accordance with the exemptions in IFRS 16 “Leases”.

(d) The discounted present value of exploration & production asset retirement obligations, primarily asset removal costs at the completion date.

(e) Purchase obligations are obligations under contractual agreements to purchase goods or services, including capital projects. These obligations are enforceable and legally binding on TOTAL and specify all significant terms, including the amount and the timing of the payments. These obligations mainly include: hydrocarbon unconditional purchase contracts (except where an active, highly liquid market exists and when the hydrocarbons are expected to be re-sold shortly after purchase); reservation of transport capacities in pipelines; unconditional exploration works and development works in the Exploration & Production and Integrated Gas and Renewables segments; and contracts for capital investment projects in the Refining & Chemicals segment. This disclosure does not include contractual exploration obligations with host states where a monetary value is not attributed and purchases of booking capacities in pipelines where the Group has a participation superior to the capacity used.

For additional information on the Group’s contractual obligations, refer to Note 13 to the Consolidated Financial Statements (starting on page F-64). The Group has other obligations in connection with pension plans that are described in Note 10 (“Payroll, staff and employee benefits obligations”) to the Consolidated Financial Statements (starting on page F-57). As these obligations are not contractually fixed as to timing and amount, they have not been included in this disclosure. Other non-current liabilities, detailed in Note 12 (“Provisions and other non-current liabilities”) to the Consolidated Financial Statements (starting on page F-62), are liabilities related to risks that are probable and amounts that can be reasonably estimated. However, no contractual agreements exist related to the settlement of such liabilities, and the timing of the settlement is not known.

5.7       Research and development

For a discussion of the Group’s R&D policies and activities, refer to points 1.4.2 and 1.5 of chapter 1 (starting on pages 19 and 20 respectively) of the Universal Registration Document 2020, which are incorporated herein by reference.

Form 20-F 2020   TOTAL    17

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

The following information concerning directors and senior management from the Universal Registration Document 2020 is incorporated herein by reference:

- composition of the Board of Directors (introduction and point 4.1.1 of chapter 4, starting on page 136); and

- information concerning the General Management (point 4.1.5 of chapter 4, starting on page 172).

The following information concerning compensation from the Universal Registration Document 2020 is incorporated herein by reference:

- approach to overall compensation (point 5.3.1.2 of chapter 5, starting on page 225); and

- compensation for the administration and management bodies (point 4.3 of chapter 4, starting on page 180).

The following information concerning Board practices and corporate governance from the Universal Registration Document 2020 is incorporated herein by reference:

- practices of the Board of Directors (point 4.1.2 of chapter 4, starting on page 158);

- report of the Lead Independent Director on her mandate (point 4.1.3 of chapter 4, starting on page 170);

- evaluation of the functioning of the Board of Directors (point 4.1.4 of chapter 4, on page 171); and

- statement regarding corporate governance (point 4.2 of chapter 4, on page 179).

The following information concerning employees and share ownership from the Universal Registration Document 2020 is incorporated herein by reference:

- number and categories of employees (point 5.3.1.1 of chapter 5, starting on page 224);

- shares held by the administration and management bodies (point 4.1.6 of chapter 4, starting on page 178); and

- employee shareholding (point 6.4.2 of chapter 6, on page 293).

TOTAL believes that the relationship between its management and labor unions is, in general, satisfactory.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

The following information concerning shareholders from the Universal Registration Document 2020 is incorporated herein by reference:

- major shareholders (point 6.4.1 of chapter 6, starting on page 291); and

- shareholding structure (point 6.4.3 of chapter 6, on page 294).

The Group’s main transactions with related parties (principally all the investments carried under the equity method) and the balances receivable from and payable to them are shown in point 8.3 of Note 8 (“Equity affiliates, other investments and related parties”) to the Consolidated Financial Statements (on page F-46). In the ordinary course of its business, TOTAL enters into transactions with various organizations with which certain of its directors or executive officers may be associated, but no such transactions of a material or unusual nature have been entered into during the period commencing on January 1, 2020 and ending on the date of this document. For further information on regulated agreement and undertakings and related-party transactions, refer to point 4.4.1 of chapter 4 of the Universal Registration Document 2020 (on page 209), which is incorporated herein by reference.

ITEM 8. FINANCIAL INFORMATION

The following information from the Universal Registration Document 2020 is incorporated herein by reference:

- supplemental oil and gas information (points 9.1 and 9.2 of chapter 9, starting on page 426);

- report on payments made to governments (point 9.3 of chapter 9, starting on page 445);

- reporting of payments to governments for purchases of oil, gas and minerals (EITI reporting) (point 9.4 of chapter 9, starting on page 464);

- legal and arbitration proceedings (point 3.5 of chapter 3, on page 108); and

- dividend policy and other related information (point 6.2 of chapter 6, starting on page 285).

The Consolidated Financial Statements and Notes thereto are included in pages F-9 to F-109 attached hereto.

Except for certain events mentioned in “Item 5. Operating and financial review and prospects ” and, point 3.5 of chapter 3 (on page 108) of the Universal Registration Document 2020, which is incorporated herein by reference and Note 17 to the Consolidated Financial Statements (on page F-91), no significant changes to the Group’s financial or commercial situation have occurred since the date of the Company’s Consolidated Financial Statements.

Refer to “Item 18. Financial statements” for the reports of the statutory auditors.

Our independent registered public accounting firms, as auditors of companies that are traded publicly in the United States and firms registered with the Public Company Accounting Oversight Board (United States), or the PCAOB, are required by the laws of the United States to undergo regular inspections by the PCAOB. Since the expiration of the cooperative arrangement between the PCAOB and the High council for statutory auditors (Haut conseil du commissariat aux comptes) in December 2019, the PCAOB is unable to conduct inspections on PCAOB registered audit firms located in France until such time as a new cooperative arrangement is entered into. Discussions between the PCAOB and the High council for statutory auditors (Haut conseil du commissariat aux comptes) are still ongoing.

18    TOTAL   Form 20-F 2020

ITEM 9. THE OFFER AND LISTING

9.1       Markets

The principal trading markets for the Company shares are the following: Euronext Paris (France) and the New York Stock Exchange (“NYSE”, United States). The shares are also listed on Euronext Brussels (Belgium) and the London Stock Exchange (United Kingdom).

9.2       Offer and listing details

Provided below is certain information on trading on Euronext Paris and the New York Stock Exchange. For additional information on listing details and share performance, refer to point 6.1 in chapter 6 of the Universal Registration Document 2020 (starting on page 282), which is incorporated herein by reference.

9.2.1    Trading on Euronext Paris

Official trading of listed securities on Euronext Paris, including the Company shares, is transacted through French investment service providers that are members of Euronext Paris and takes place continuously on each business day in Paris from 9:00 a.m. to 5:30 p.m. (Paris time), with a fixing of the closing price at 5:35 p.m. (Paris time). Euronext Paris may suspend or resume trading in a security listed on Euronext Paris if the quoted price of the security exceeds certain price limits defined by the regulations of Euronext Paris. The Euronext Paris ticker symbol for TOTAL SE is FP.

The markets of Euronext Paris settle and transfer ownership two trading days after a transaction (T+2). Highly liquid shares, including those of the Company, are eligible for deferred settlement (Service de Règlement Différé - SRD). Payment and delivery for shares under the SRD occurs on the last trading day of each month. Use of the SRD service requires payment of a commission.

In France, the Company shares are included in the principal index published by Euronext Paris (the “CAC 40 Index”). The CAC 40 Index is derived daily by comparing the total market capitalization of forty stocks traded on Euronext Paris to the total market capitalization of the stocks that made up the CAC 40 Index on December 31, 1987. Adjustments are made to allow for expansion of the sample due to new issues. The CAC 40 Index indicates trends in the French stock market as a whole and is one of the most widely followed stock price indices in France. In the UK, the shares are included in both FTSE Eurotop 100 and FTSEurofirst 100 indices. As a result of the creation of Euronext, the Company shares are included in Euronext 100, the index representing Euronext’s blue chip companies based on market capitalization. The Company shares are also included in the Stoxx Europe 50 and Euro Stoxx 50, blue chip indices comprised of the fifty most highly capitalized and most actively traded equities throughout Europe and within the European Monetary Union, respectively.

9.2.2    Trading on the New York Stock Exchange

ADSs evidenced by ADRs have been listed on the NYSE since October 25, 1991. JPMORGAN CHASE BANK, N.A. serves as depositary with respect to the ADSs evidenced by ADRs traded on the NYSE. One ADS corresponds to one TOTAL SE share.

The NYSE ticker symbol for TOTAL SE is TOT.

ITEM 10. ADDITIONAL INFORMATION

10.1       Share capital

The following information from the Universal Registration Document 2020 is incorporated herein by reference:

- information concerning the share capital (point 7.1 of chapter 7, starting on page 298);

- the use of delegations of authority and power granted to the Board of Directors with respect to share capital increases (point 4.4.2 of chapter 4, starting on page 210);

- information on share buybacks (point 6.3 of chapter 6, starting on page 288); and

- factors likely to have an impact in the event of a public offering (point 4.4.4 of chapter 4, starting on page 211).

10.2       Memorandum and articles of association

The following information from the Universal Registration Document 2020 is incorporated herein by reference:

- information concerning the articles of incorporation and bylaws, and other information (point 7.2 of chapter 7, starting on page 300); and

- participation of shareholders at shareholders’ meetings (point 4.4.3 of chapter 4, on page 211).

10.3       Material contracts

There have been no material contracts (not entered into in the ordinary course of business) entered into by members of the Group since March 30, 2019.

Form 20-F 2020   TOTAL    19

10.4       Exchange controls

Under current French exchange control regulations, no limits exist on the amount of payments that TOTAL may remit to residents of the United States. Laws and regulations concerning foreign exchange controls do require, however, that an accredited intermediary must handle all payments or transfer of funds made by a French resident to a non-resident.

10.5       Taxation

10.5.1    General

This section generally summarizes the material U.S. federal income tax and French tax consequences of owning and disposing of shares or ADSs of TOTAL SE to U.S. Holders that hold their shares or ADSs as capital assets for tax purposes. A U.S. Holder is a beneficial owner of shares or ADSs that is (i) a citizen or resident of the United States for U.S. federal income tax purposes, (ii) a domestic corporation or other domestic entity treated as a corporation for U.S. federal income tax purposes, (iii) an estate whose income is subject to U.S. federal income tax regardless of its source, or (iv) a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

This section does not address the Medicare tax on net investment income, U.S. federal estate or gift taxes or any taxes from jurisdictions other than the United States and France. This section does not apply to members of special classes of holders subject to special rules, including without limitation:

- broker-dealers;

- traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

- tax-exempt organizations;

- certain financial institutions;

- insurance companies;

- U.S. pension funds;

- U.S. Regulated Investment Companies (RICs), Real Estate Investment Trusts (REITs), and Real Estate Mortgage Investment Conduits (REMICs);

- persons who are liable for the alternative minimum tax;

- persons that actually or constructively own 10% or more of the shares of TOTAL SE (by vote or value);

- persons who acquired the shares or ADS pursuant to the exercise of any employee share option or otherwise as consideration;

- persons that purchase or sell shares or ADSs as part of a wash sale for U.S. federal income tax purposes;

- persons holding offsetting positions in respect of the shares or ADSs (including as part of a straddle, hedging, conversion or integrated transaction);

- persons subject to special tax accounting rules as a result of any item of gross income with respect to the shares or ADSs being taken into account in an applicable financial statement;

- U.S. expatriates; and

- persons whose functional currency is not the U.S. dollar.

If a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes holds shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of a partnership holding these shares or ADSs should consult their tax advisors as to the tax consequences of owning or disposing of shares or ADSs, as applicable.

Under French law, specific rules apply to trusts, in particular specific tax and filing requirements; additionally, specific rules apply to wealth, estate and gift taxes as they apply to trusts. Given the complex nature of these rules and the fact that their application varies depending on the status of the trust, the grantor, the beneficiary and the assets held in the trust, the following summary does not address the tax treatment of shares or ADSs held in a trust. If shares or ADSs are held in trust, the grantor, trustee and beneficiary are urged to consult their own tax advisor regarding the specific tax consequences of acquiring, owning and disposing of shares or ADSs.

In addition, the discussion below is limited to U.S. Holders that (i) are residents of the United States for purposes of the Treaty (as defined below), (ii) do not maintain a permanent establishment or fixed base in France to which the shares or ADSs are attributable and through which the respective U.S. Holders carry on, or have carried on, a business (or, if the holder is an individual, performs or has performed independent personal services), and (iii) are otherwise eligible for the benefits of the Treaty in respect of income and gain from the shares or ADSs (in particular, under the “Limitation on Benefits” provision of the Treaty). In addition, this section is based in part upon the representations of the Depositary and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms.

The discussions below of the material U.S. federal income tax consequences to U.S. Holders of owning and disposing of shares or ADSs of TOTAL SE are based on the Internal Revenue Code of 1986, as amended (IRC), Treasury regulations promulgated thereunder and judicial and administrative interpretations thereof, as well as on the Convention Between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital dated August 31, 1994, as amended (the “Treaty”), all as in effect on the date hereof and all of which are subject to change, which change could apply retroactively and could affect the tax consequences described below. The description of the material French tax consequences is based on the laws of the Republic of France and French tax regulations, all as currently in effect, as well as the Treaty, as currently in effect. These laws, regulations and the Treaty are subject to change, possibly on a retroactive basis.

20    TOTAL   Form 20-F 2020

In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, a U.S. Holder of ADRs evidencing ADSs will be treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security. Accordingly, the creditability of any French taxes and the availability of the reduced tax rate for any dividends received by certain non-corporate U.S. Holders (as discussed below), could be affected by actions taken by intermediaries in the chain of ownership between the holders of the ADSs and TOTAL if as a result of such actions the U.S. Holders of the ADSs are not properly treated as beneficial owners of underlying shares.

This discussion is intended only as a descriptive summary and does not purport to be a complete analysis or listing of all potential tax effects of the ownership or disposition of the shares and ADSs and is not intended to substitute competent professional advice. Individual situations of holders of shares and ADSs may vary from the description made below. The following summary does not address the French tax treatment applicable to dividends paid in so-called “Non Cooperative Countries and Territories” (“NCCT”) within the meaning of Article 238-0 A of the French Code général des impôts (“French Tax Code”) as such provision or list may be amended from time to time or replaced by any other provision or list having a similar purpose. It does not apply to dividends paid to persons established or domiciled in such a NCCT, or paid to a bank account opened in a financial institution located in such a NCCT, nor does it apply to capital gains realized by persons established or domiciled in such a NCCT. Furthermore, the following summary does not address the tax treatment applicable to temporary transfers and other similar transactions which could, under certain conditions, fall within the scope of the new anti-abuse measure set forth in Article 119 bis A of the French Tax Code.

Holders are urged to consult their own tax advisors regarding the U.S. federal, state and local, and the French and other tax consequences of owning and disposing shares or ADSs of TOTAL in their respective circumstances. In particular, a holder is encouraged to confirm with its advisor whether the holder is a U.S. Holder eligible for the benefits of the Treaty.

10.5.2    Taxation of dividends

French taxation

The term “dividends” used in the following discussion means dividends within the meaning of the Treaty.

Dividends paid to non-residents of France who are U.S. Holders are in principle subject to a French withholding tax regardless of whether they are paid in cash, in shares or a mix of both. The French withholding tax is levied (i) at a rate of 12.8% for dividends paid to U.S. Holders who are individuals and (ii) at a rate of 28% in 2020 (to be reduced and aligned on the standard corporate income tax rate set forth in the first sentence of the second paragraph of Article 219-I of the French Tax Code which is anticipated to decrease to 25% over the next fiscal years) for dividends paid to U.S. Holders that are legal entities (the “Legal Entities U.S. Holders”) subject to more favorable provisions of the Treaty as described below and certain more favorable French domestic law provisions.

However, under the Treaty, a U.S. Holder is generally entitled to a reduced rate of French withholding tax of 15% with respect to dividends, provided that certain requirements are satisfied. This reduced rate is, in practice, only of interest to Legal Entities U.S. Holders subject to the withholding tax at a rate of 28% in 2020.

Administrative guidelines (Bulletin Officiel des Finances Publiques, BOI-INT-DG-20-20-20-20-12/09/2012) (the “Administrative Guidelines”) set forth the conditions under which the reduced French withholding tax at the rate of 15% may be available. The immediate application of the reduced 15% rate is available to those U.S. Holders that may benefit from the so-called “simplified procedure” (within the meaning of the Administrative Guidelines).

Under the “simplified procedure”, U.S. Holders may claim the immediate application of withholding tax at the rate of 15% on the dividends to be received by them, provided that:

(i) they furnish to the U.S. financial institution managing their securities account a certificate of residence conforming with form No. 5000-FR. The immediate application of the 15% withholding tax will be available only if the certificate of residence is sent to the U.S. financial institution managing their securities account no later than the dividend payment date. Furthermore, each financial institution managing the U.S. Holders’ securities account must also send to the French paying agent the figure of the total amount of dividends to be received which are eligible to the reduced withholding tax rate before the dividend payment date; and

(ii) the U.S. financial institution managing the U.S. Holder’s securities account provides the French paying agent with a list of the eligible U.S. Holders and other pieces of information set forth in the Administrative Guidelines. Furthermore, the financial institution managing the U.S. Holders’ securities account should certify that the U.S. Holder is, to the best of its knowledge, a United States resident within the meaning of the Treaty. These documents must be sent to the French paying agent within a time frame that will allow the French paying agent to file them no later than the end of the third month computed as from the end of the month of the dividend payment date.

Where the U.S. Holder’s identity and tax residence are known by the French paying agent, the latter may release such U.S. Holder from furnishing to (i) the financial institution managing its securities account, or (ii) as the case may be, the U.S. Internal Revenue Service (“IRS”), the abovementioned certificate of residence, and apply the 15% withholding tax rate to dividends it pays to such U.S. Holder.

Form 20-F 2020   TOTAL    21

For a U.S. Holder that is not entitled to the “simplified procedure” and whose identity and tax residence are not known by the paying agent at the time of the payment, the French withholding tax at the domestic rate will be levied at the time the dividends are paid. Such U.S. Holder, however, may be entitled to a refund of the withholding tax in excess of the 15% rate under the “standard procedure”, as opposed to the “simplified procedure”, provided that the U.S. Holder furnishes to the French paying agent an application for refund on forms No. 5000-FR and 5001-FR (or any other relevant form to be issued by the French tax authorities) certified by the U.S. financial institution managing the U.S. Holder’s securities account (or, if not, by the competent U.S. tax authorities) before December 31 of the second year following the date of payment of the withholding tax at the domestic rate to the French tax authorities, according to the requirements provided by the Administrative Guidelines.

Copies of forms No. 5000-FR and 5001-FR (or any other relevant form to be issued by the French tax authorities) as well as the form of the certificate of residence and the U.S. financial institution certification, together with instructions, are available from the IRS and the French tax authorities.

These forms, together with instructions, are to be provided by the Depositary to all U.S. Holders of ADRs registered with the Depositary. The Depositary is to use reasonable efforts to follow the procedures established by the French tax authorities for U.S. Holders to benefit from the immediate application of the 15% French withholding tax rate or, as the case may be, to recover the excess 15% French withholding tax initially withheld and deducted in respect of dividends distributed to them by TOTAL. To effect such benefit or recovery, the Depositary shall advise such U.S. Holder to return the relevant forms to it, properly completed and executed. Upon receipt of the relevant forms properly completed and executed by such U.S. Holder, the Depositary shall cause them to be filed with the appropriate French tax authorities, and upon receipt of any resulting remittance, the Depositary shall distribute to the U.S. Holder entitled thereto, as soon as practicable, the proceeds thereof in U.S. dollars.

The identity and address of the French paying agent are available from TOTAL.

In addition, subject to certain specific filing obligations, there is no withholding tax on dividend payments made by French companies to:

(i) non-French collective investment funds formed under foreign law and established in a Member State of the European Union or in another State or territory, such as the United States, that has entered with France into an administrative assistance agreement for the purpose of combating fraud and tax evasion, and which fulfill the two following conditions: (a) the fund raises capital among a number of investors for the purpose of investing in accordance with a defined investment policy, in the interest of its investors, and (b) the fund has characteristics similar to those of collective investment funds organized under French law fulfilling the conditions set forth in Article 119-bis 2, 2 of the French Tax Code and the Administrative Guidelines Bulletin Officiel des Finances Publiques, BOI-RPPM-RCM-30-30-20-70-12/08/2020 (i.e., among others, open-end mutual fund (OPCVM), open-end real estate fund (OPCI) and closed-end investment companies (SICAF)); and

(ii) companies whose effective place of management is, or which have a permanent establishment receiving the dividends, in a Member State of the European Union or in another State or territory that has entered with France into an administrative assistance agreement for the purpose of combating fraud and tax evasion, such as the United States, that are in a loss-making position and subject, at the time of the distribution, to insolvency proceedings similar to the one set out in Article L. 640-1 of the French Commercial Code (or where there is no such procedure available, in a situation of cessation of payments with recovery being manifestly impossible) and that meet the other conditions set out in Article 119 quinquies of the French Tax Code as specified by the Administrative Guidelines Bulletin Officiel des Finances Publiques, BOI-RPPM-RCM-30-30-20-80-06/04/2016.

Collective investment funds and companies mentioned in (ii) above are urged to consult their own tax advisors to confirm whether they are eligible to such provisions and under which conditions.

Finally, companies having their seat in a Member State of the European Union or in another Member State of the European Economic Area Agreement or any third country that has concluded with France a tax treaty including an administrative assistance provision to tackle tax evasion and avoidance and which is not a “non-cooperative State or territory”, as defined by Article 238-0 A of the French Tax Code, such as the United States, and being in a tax loss position might, provided that the conditions set forth in Article 235 quater of the French Tax Code are met, benefit from a temporary reimbursement of the withholding tax applicable on dividend payments, the corresponding amount having to be refunded to the French treasury, in particular, at the time they become in a profitable tax position.

U.S. taxation

For U.S. federal income tax purposes and subject to the passive foreign investment company rules discussed below, the gross amount of any dividend that a U.S. Holder must include in gross income equals the amount paid by TOTAL (i.e., the net distribution received plus any tax withheld therefrom) from its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Dividends will not be eligible for the dividends-received deduction allowed to a U.S. corporation under IRC section 243. Distributions, if any, in excess of such current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will constitute a non-taxable return of capital to a U.S. Holder and will be applied against and reduce such U.S. Holder’s tax basis in such shares or ADSs, but not below zero. To the extent that such distributions are in excess of such basis, the distributions will constitute capital gain. Because TOTAL does not currently maintain calculations of earnings and profits for U.S. federal income tax purposes, a U.S. Holder of shares or ADSs of TOTAL should expect to treat the entire amount of distributions paid with respect to the shares or ADSs as dividends.

Dividends paid to a non-corporate U.S. Holder that constitute “qualified dividend income” will be taxable to the holder at the preferential rates applicable to long-term capital gains provided (1) the Company is neither a passive foreign investment company nor treated as such with respect to the U.S. Holder for the taxable year in which the dividend was paid and the preceding taxable year and (2) certain holding period requirements are met. TOTAL believes that dividends paid by TOTAL with respect to its shares or ADSs will be qualified dividend income. The dividend is taxable to the U.S. Holder when the holder, in the case of shares, or the Depositary, in the case of ADSs, receives the dividend, actually or constructively.

22    TOTAL   Form 20-F 2020

The amount of any dividend distribution includible in the income of a U.S. Holder equals the U.S. dollar value of the euro payment made, determined at the spot euro/dollar exchange rate on the date the dividend distribution is includible in the U.S. Holder’s income, regardless of whether the payment is in fact converted into U.S. dollars. Any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is includible in the U.S. Holder’s income to the date the payment is converted into U.S. dollars will generally be treated as ordinary income or loss and, for foreign tax credit limitation purposes, from sources within the United States and will not be eligible for the special tax rate applicable to qualified dividend income. The U.S. federal income tax rules governing the availability and computation of foreign tax credits are complex. U.S. Holders should consult their own tax advisors concerning the implications of these rules in light of their particular circumstances.

Subject to certain conditions and limitations, U.S. Holders may elect to claim a credit against their U.S. federal income tax liability for the net amount of French taxes withheld in accordance with the Treaty and paid over to the French tax authorities. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. In addition, special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the preferential tax rates. To the extent a refund of the tax withheld is available to a U.S. Holder under French law or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit against such holder’s U.S. federal income tax liability. For this purpose, dividends distributed by TOTAL will generally constitute “passive income” for purposes of computing the foreign tax credit allowable to the U.S. Holder.

If a U.S. Holder has the option to receive a distribution in shares (or ADSs) instead of cash, the distribution of shares (or ADSs) will be taxable as if the holder had received an amount equal to the fair market value of the distributed shares (or ADSs), and such holder’s tax basis in the distributed shares (or ADSs) will be equal to such amount.

10.5.3    Taxation of disposition of shares

A U.S. Holder will not be subject to French tax on any capital gain from the sale or exchange of the shares or ADSs or redemption of the underlying shares that the ADSs represent.

Pursuant to Article 235 ter ZD of the French tax code, a financial transaction tax applies, under certain conditions, to the acquisition of shares of publicly traded companies registered in France having a market capitalization over €1 billion on December 1 of the year preceding the acquisition. A list of the companies within the scope of the financial transaction tax for 2020 is published in the Administrative guidelines Bulletin Officiel des Finances Publiques, BOI-ANNX-000467-23/12/2020. TOTAL is included in this list, although it cannot be excluded that this list might be amended in the future. The tax also applies to the acquisition of ADRs evidencing ADSs. The financial transaction tax is due at a rate of 0.3% on the price paid to acquire the shares. The person or entity liable for the tax is generally the provider of investment services defined in Article L. 321-1 of the French Monetary and Financial Code (prestataire de services d’investissement). Investment service providers providing equivalent services outside France are subject to the tax under the same terms and conditions. Taxable transactions are broadly construed but several exceptions may apply. In general, non-income taxes, such as this financial transaction tax, paid by a U.S. Holder are not eligible for a foreign tax credit for U.S. federal income tax purposes. U.S. Holders should consult their own tax advisors as to the tax consequences and creditability of such financial transaction tax.

For U.S. federal income tax purposes and subject to the passive foreign investment company rules discussed below, a U.S. Holder will generally recognize capital gain or loss upon the sale or other disposition of shares or ADSs equal to the difference between the U.S. dollar value of the amount realized on the sale or other disposition and the holder’s tax basis, determined in U.S. dollars, in the shares or ADSs. The gain or loss will generally be U.S. source gain or loss and will be long-term capital gain or loss if the U.S. Holder’s holding period of the shares or ADSs is more than one year at the time of the disposition. Long-term capital gain of a non-corporate U.S. Holder is generally taxed at preferential rates if specified minimum holding periods are met. The deductibility of capital losses is subject to limitation.

10.5.4    Passive foreign investment company status

TOTAL believes that the shares and ADSs are not treated as stock of a passive foreign investment company (PFIC) for U.S. federal income tax purposes, and TOTAL does not expect that it will be treated as a PFIC in the current or future taxable years. This conclusion is a factual determination that is made annually and thus is subject to uncertainty and change. In general, a non-U.S. corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. If TOTAL were treated as a PFIC with respect to a U.S. Holder for any taxable year, the U.S. Holder generally would suffer adverse tax consequences, that may include having gains realized on the disposition of the shares or ADSs treated as ordinary income rather than capital gain and being subject to punitive interest charges on the receipt of certain distributions and on the proceeds of the sale or other disposition of the shares or ADSs. U.S. Holders would also be subject to information reporting requirements on an annual basis. U.S. Holders should consult their tax advisors about the potential application of the PFIC rules to shares or ADSs.

10.5.5    French estate and gift taxes

In general, a transfer of shares or ADSs by gift or by reason of the death of a U.S. Holder that would otherwise be subject to French gift or inheritance tax, respectively, will not be subject to such French tax by reason of the Convention between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritances and Gifts, dated November 24, 1978, as amended, unless the donor or the transferor is domiciled in France at the time of the gift, or at the time of the transferor’s death, or if the shares or ADSs were used in, or held for use in, the conduct of a business through a permanent establishment or a fixed base in France.

10.5.6    U.S. state and local taxes

In addition to U.S. federal income tax, U.S. Holders of shares or ADSs may be subject to U.S. state and local taxes with respect to their shares or ADSs. U.S. Holders should consult their own tax advisors.

Form 20-F 2020   TOTAL    23

10.6    Dividends and paying agents

The information set forth in point 6.2.2 of chapter 6 of the Universal Registration Document 2020 (on page 285) is incorporated herein by reference.

10.7    Statements by experts

The independent third-party report of DeGolyer and MacNaughton, a petroleum engineering consulting firm with address at 5001 Spring Valley Road, Suite 800 East, Dallas, Texas 75244, is attached as Exhibit 15.3 to this Form 20-F. This report provides TOTAL estimates of proved oil, condensate and gas reserves, as of December 31, 2020, of certain properties attributable to or controlled by PAO NOVATEK. As evidenced by Exhibit 15.4 to this Form 20-F, DeGolyer and MacNaughton has consented to the inclusion of their report in this Form 20-F.

10.8    Documents on display

TOTAL files annual, periodic and other reports and information with the Securities and Exchange Commission. All of TOTAL’s SEC filings made after December 31, 2001 are available to the public at the SEC website at www.sec.gov and from certain commercial document retrieval services.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Please refer to Notes 15.3 (“Financial risks management”) (starting on page F-83) and 16.2 (“Oil, Gas and Power markets related risks management”) (on page F-91) to the Consolidated Financial Statements, for a qualitative and quantitative discussion of the Group’s exposure to market risks. Please also refer to Notes 15.2 (“Fair value of financial instruments (excluding commodity contracts)”) (starting on page F-77) and 16 (“Financial instruments related to commodity contracts”) (starting on page F-88) to the Consolidated Financial Statements, for details of the different derivatives owned by the Group in these markets.

As part of its financing and cash management activities, the Group uses derivative instruments to manage its exposure to changes in interest rates and foreign exchange rates. These instruments are mainly interest rate and currency swaps. The Group may also occasionally use futures contracts and options. These operations and their accounting treatment are detailed in Notes 15.2 and 16 to the Consolidated Financial Statements.

The financial performance of TOTAL is sensitive to a number of factors; the most significant being oil and gas prices, generally expressed in dollars, and exchange rates, in particular that of the dollar versus the euro. Generally, a rise in the price of crude oil has a positive effect on earnings as a result of an increase in revenues from oil and gas production. Conversely, a decline in crude oil prices reduces revenues. The impact of changes in crude oil prices on the activities of the Refining & Chemicals and Marketing & Services segments depends upon the speed at which the prices of finished products adjust to reflect these changes. All of the Group’s activities are, to various degrees, sensitive to fluctuations in the dollar/euro exchange rate.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.1    American depositary receipts fees and charges

JPMORGAN CHASE BANK, N.A., as depositary for the TOTAL SE ADR program, collects its fees for delivery and surrender of ADRs directly from investors depositing shares or surrendering ADRs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid. A copy of the depositary agreement is attached as Exhibit (a) to the registration statement on Form F-6 (Reg. No. 333-199737) filed by the Company with the SEC on October 31, 2014.

Investors must pay:	For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	- Issuance of ADRs, including issuances resulting from a distribution of shares or rights or other property, stocks splits or mergers - Cancellation of ADRs for the purpose of withdrawal, including if the deposit agreement terminates
A fee equivalent to the fee that would be payable if securities distributed to the investor had been shares and the shares had been deposited for issuance of ADSs	- Distribution, by the depositary, of deposited securities to ADS registered holders
Registration or transfer fees	- Transfer and registration of shares on the Company’s share register to or from the name of the depositary or its agent when the investor deposits or withdraws shares
Expenses of the depositary	- Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) - Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes	- As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities	- As necessary

24    TOTAL   Form 20-F 2020

Fees paid to TOTAL SE by the depositary

In consideration for acting as depositary, JPMORGAN CHASE BANK, N.A., has agreed to share, on an annual basis, with TOTAL SE portions of certain fees collected, less ADS program expenses paid by the Depositary. For example, these expenses include the Depositary’s annual program fees, transfer agency fees, custody fees, legal expenses, postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. federal tax information, mailing required tax forms, stationery, postage, facsimile and telephone calls and the standard out-of-pocket maintenance costs for the ADSs.

In the year ended December 31, 2020, the ADR depositary paid aggregate fees and made other direct and indirect payments to TOTAL SE in an amount of USD $11.6 million.

For additional information on TOTAL SE shares and the American depositary shares, please refer to Exhibit 2.2 “Description of securities registered under Section 12 of the Exchange Act”.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

15.1    Disclosure controls and procedures

An evaluation was carried out under the supervision and with the participation of the Group’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness, as of the end of the period covered by this report, of the design and operation of the Group’s disclosure controls and procedures, which are defined as those controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, summarized and reported within specified time periods. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to management, including themselves, as appropriate to allow timely decisions regarding required disclosure.

15.2    Management’s annual report on internal control over financial reporting

The Group’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, the effectiveness of an internal control system may change over time.

The Group’s management, including the Chief Executive Officer and the Chief Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of this evaluation, the Group’s management concluded that its internal control over financial reporting was effective as of December 31, 2020.

The effectiveness of internal control over financial reporting as of December 31, 2020, was audited by ERNST  & YOUNG Audit and KPMG Audit, a division of KPMG S.A., independent registered public accounting firms, as stated in their report included starting on page F-2 attached hereto.

15.3    Changes in internal control over financial reporting

There were no changes in the Group’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or that were reasonably likely to materially affect, the Group’s internal control over financial reporting.

Form 20-F 2020   TOTAL    25

15.4    Internal control and risk management procedures

For additional information, refer to points 3.3 and 3.6 of chapter 3 of the Universal Registration Document 2020 (starting on pages 101 and 109, respectively), which are incorporated herein by reference.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Mr. Patrick Artus is the Audit Committee financial expert. He is an independent member of the Board of Directors in accordance with the NYSE listing standards applicable to TOTAL.

ITEM 16B. CODE OF ETHICS

At its meeting on October 27, 2016, the Board of Directors adopted a revised code of ethics that applies to its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and the financial and accounting officers for its principal activities. A copy of this code of ethics is included as an exhibit to this Annual Report.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

16C.1    Fees for accountants’ services

The information set forth in point 4.4.5.2 of chapter 4 of the Universal Registration Document 2020 (on page 213) is incorporated herein by reference.

16C.2    Audit Committee pre-approval policy

The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy that sets forth the procedures and the conditions pursuant to which services proposed to be performed by the statutory auditors may be pre-approved and that are not prohibited by regulatory or other professional requirements. This policy provides for both pre-approval of certain types of services through the use of an annual budget approved by the Audit Committee for these types of services and special pre-approval of services by the Audit Committee on a case-by-case basis. The Audit Committee reviews on an annual basis the services provided by the statutory auditors. During 2019, no audit-related fees, tax fees or other non-audit fees were approved by the Audit Committee pursuant to the de minimis exception to the pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

16C.3    Auditor’s term of office

French law provides that the statutory and alternate auditors are appointed for renewable 6 fiscal-year terms. The terms of office of the current statutory auditors and the alternate auditors will expire at the end of the Annual Shareholders’ Meeting called in 2022 to approve the financial statements for fiscal year 2021.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

None.

26    TOTAL   Form 20-F 2020

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

			Total Number of Shares	Maximum Number of
			(or Units) Purchased,	Shares (or Units) that
	Total Number of	Average Price Paid	as part of Publicly	may yet be purchased
	Shares (or Units)	Per Share (or Units)	Announced Plans or	under the Plans or
Period (in 2020)	Purchased	($)(a)	Programs(b)	Programs(c)
January	1,002,779	54.58	1,002,779	243,711,274
February	5,667,871	48.34	5,667,871	238,046,253
March	6,565,394	42.85	6,565,394	231,480,859
April	0	n.a.	0	231,482,747
May	0	n.a.	0	231,482,747
June	0	n.a.	0	232,799,435
July	0	n.a.	0	240,898,441
August	0	n.a.	0	240,898,821
September	0	n.a.	0	240,899,626
October	0	n.a.	0	240,914,296
November	0	n.a.	0	240,914,646
December	0	n.a.	0	240,919,699

(a) Based on the average European Central Bank exchange rate for the first semester of 2020 at $1.1020/€.

(b) The Annual Shareholders’ Meeting of May 29, 2020, canceled and superseded the previous resolution (for any unused portion) from the Annual Shareholders’ Meeting of May 29, 2019, authorizing the Board of Directors to trade in the Company’s own shares on the market for a period of 18 months within the framework of the stock purchase program. The maximum number of shares that may be purchased by virtue of this authorization or under the previous authorization may not exceed 10% of the total number of shares constituting the share capital, this amount being periodically adjusted to take into account operations modifying the share capital after each shareholders’ meeting. Under no circumstances may the total number of shares held by the Company, either directly or indirectly through its subsidiaries, exceed 10% of the share capital. This authorization will be renewed subject to the approval of the Annual Shareholders’ Meeting of May 28, 2021.

(c) Based on 10% of the Company’s share capital, and after deducting the shares held by the Company for cancellation and the shares held by the Company to cover the share subscription or purchase option plans and the performance share plans for Group employees.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE

This section presents a summary of significant differences between French corporate governance practices and the NYSE’s corporate governance standards, as required by section 303A.11 of the NYSE Listed Company Manual.

16G.1    Overview

The following paragraphs provide a brief, general summary of significant ways in which our corporate governance practices differ from those required by the listing standards of the New York Stock Exchange (“NYSE”) for U.S. companies that have common stock listed on the NYSE. While our management believes that our corporate governance practices are similar in many respects to those of U.S. domestic NYSE listed companies and provide investors with protections that are comparable in many respects to those established by the NYSE Listed Company Manual, certain significant differences are described below.

The principal sources of corporate governance standards in France are the French Commercial Code (Code de commerce), the French Financial and Monetary Code (Code monétaire et financier) and the regulations and recommendations provided by the French Financial Markets Authority (Autorité des marchés financiers, AMF), as well as a number of general recommendations and guidelines on corporate governance, most notably the Corporate Governance Code of Listed Corporations (the “AFEP-MEDEF Code”) published by the two main French business confederations, the Association Française des Entreprises Privées (AFEP) and the Mouvement des Entreprises de France (MEDEF), the latest version of which was published in January 2020.

The AFEP-MEDEF Code includes, among other things, recommendations relating to the role and operation of the board of directors (creation, composition and evaluation of the board of directors and the audit, compensation and nominations committees) and the independence criteria for board members. Articles L. 820-1 et seq. of the French Commercial Code authorizes statutory auditors to provide certain non-audit services if in compliance with provisions of the French Commercial Code, the European legislation and the Code of ethics of the auditors. It also defines certain criteria for the independence of statutory auditors. In France, the independence of statutory auditors is also monitored by an independent body, the High Council for statutory auditors (Haut Conseil du Commissariat aux Comptes).

For an overview of certain of our corporate governance policies, refer to points 4.1 and 4.2 of chapter 4 of the Universal Registration Document 2020 (starting on page 136), which are incorporated herein by reference.

Form 20-F 2020   TOTAL    27

16G.2    Composition of Board of Directors; Independence

The NYSE listing standards provide that the board of directors of a U.S.-listed company must include a majority of independent directors and that the audit committee, the nominating/corporate governance committee and the compensation committee must be composed entirely of independent directors. A director qualifies as independent only if the board affirmatively determines that the director has no material relationship with the company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the company. Furthermore, as discussed below, the listing standards require additional procedures in regards to the independence of directors who sit on the audit committee and the compensation committee. In addition, the listing standards enumerate a number of relationships that preclude independence.

French law does not contain any independence requirement for the members of the board of directors of a French company, except for the audit committee, as described below. The AFEP-MEDEF Code recommends, however, that (i) the independent directors should account for half of the members of the board of directors of widely-held corporations without controlling shareholders, and (ii) independent directors should account for at least one-third of board members in controlled companies. Members of the board representing employees and employee shareholders are not taken into account in calculating these percentages. The AFEP-MEDEF Code states that a director is independent when “he or she has no relationship of any kind whatsoever with the corporation, its group or the management that may interfere with his or her freedom of judgment. Accordingly, an independent director is understood to be any non-executive director of the corporation or the group who has no particular bonds of interest (significant shareholder, employee, other) with them.” The AFEP-MEDEF Code also enumerates specific criteria for determining independence, which are on the whole consistent with the goals of the NYSE listing standards, although the specific tests under the two standards may vary on some points.

As noted in the AFEP-MEDEF Code, “qualification as an independent director should be discussed by the appointments committee […] and decided on by the board on the occasion of the appointment of a director, and annually for all directors.”

For an overview of the Company’s Board of Directors’ assessment of the independence of the Company’s Directors, including a description of the Board’s independence criteria, refer to point 4.1.1.4 of chapter 4 of the Universal Registration Document 2020 (starting on page 153), which is incorporated herein by reference.

16G.3    Representation of women on corporate boards

The French Commercial Code provides for legally binding quotas to balance gender representation on boards of directors of French listed companies, requiring that each gender represent at least 40%. Directors representing the employees and directors representing the employee shareholders are not taken into account in calculating this percentage. When the board of directors consists of a maximum of eight members, the difference between the number of directors of each gender should not be higher than two. Any appointment of a director made in violation of these rules will be declared null and void and payment of the directors’ compensation will be suspended until the board composition is compliant with the required quota (the suspension of the directors’ compensation will also be disclosed in the management report). However, if a director whose appointment is null and void takes part in decisions of the board of directors, such decisions are not declared automatically null and void by virtue thereof. As of March 17, 2021, the Company’s Board of Directors consisted of seven male members and six female members. Excluding the directors representing employees and the director representing employee shareholders in accordance with French law, the proportion of women on the Board was 50%.

16G.4    Board committees

16G.4.1  Overview

The NYSE listing standards require that a U.S.-listed company have an audit committee, a nominating/corporate governance committee and a compensation committee. Each of these committees must consist solely of independent directors and must have a written charter that addresses certain matters specified in the listing standards. Furthermore, the listing standards require that, in addition to the independence criteria referenced above under “Composition of Board of Directors; Independence”, certain enumerated factors be taken into consideration when making a determination on the independence of directors on the compensation committee or when engaging advisors to the compensation committee.

With the exception of an audit committee, as described below, French law currently requires neither the establishment of board committees nor the adoption of written charters.

The AFEP-MEDEF Code recommends, however, that the board of directors sets up, in addition to the audit committee required by French law, a nominations committee and a compensation committee. The AFEP-MEDEF Code also recommends that at least two-thirds of the audit committee members and a majority of the members of each of the compensation committee and the nominations committee be independent directors. It is recommended that the chairman of the compensation committee be independent and that one of its members be an employee director. None of those three committees should include any Executive Officer⁽³²⁾.

TOTAL has established an Audit Committee, a Governance and Ethics Committee, a Compensation Committee and a Strategy & CSR Committee. As of March 17, 2021, the composition of these Committees was as follows:

- the Audit Committee had four members, 100% of whom have been deemed independent by the Board of Directors;

- the Governance and Ethics Committee had four members, 75% of whom have been deemed independent by the Board of Directors;

(32) As defined by the AFEP-MEDEF Code, Executive Officers “include the Chairman and Chief Executive Officer, the Deputy chief executive officer(s) of public limited companies with a Board of Directors, the Chairman and members of the Management Board in public limited companies having a Management Board and Supervisory Board and the statutory managers of partnerships limited by shares”.

28    TOTAL   Form 20-F 2020

- the Compensation Committee had four members, 67% of whom have been deemed independent by the Board of Directors (according to point 9.3 of the AFEP-MEDEF Code, directors representing the employee shareholders and directors representing employees are not taken into account when determining this percentage); and

- the Strategy & CSR Committee had six members, 67% of the members of this Committee have been deemed independent by the Board of Directors (according to point 9.3 of the AFEP-MEDEF Code, directors representing the employee shareholders and directors representing employees are not taken into account when determining this percentage).

For a description of the independence assessment of each member of the Board of Directors, see point 4.1.1.4 of chapter 4 of the Universal Registration Document 2020 (starting on page 153), which is incorporated herein by reference. For a description of the scope of each Committee’s activity, see point 4.1.2.3 of chapter 4 of the Universal Registration Document 2020 (starting on page 165), which is incorporated herein by reference.

The NYSE listing standards also require that the audit, nominating/corporate governance and compensation committees of a U.S.-listed company be vested with decision-making powers on certain matters. Under French law, however, those committees are advisory in nature and have no decision-making authority. Board committees are responsible for examining matters within the scope of their charter and making recommendations thereon to the board of directors. Under French law, the board of directors has the final decision-making authority.

16G.4.2   Audit Committee

The NYSE listing standards contain detailed requirements for the audit committees of U.S.-listed companies. Some, but not all, of these requirements also apply to non U.S.-listed companies, such as TOTAL. French law and the AFEP-MEDEF Code share the NYSE listing standards’ goal of establishing a system for overseeing the company’s accounting process that is independent from management and that ensures auditor independence. As a result, they address similar topics, with some overlap.

Article L. 823-19 of the French Commercial Code requires the board of directors of companies listed in France to establish an audit committee, at least one member of which must be an independent director and must be competent in finance, accounting or statutory audit procedures. The AFEP-MEDEF Code provides that at least two-thirds of the directors on the audit committee be independent and that the audit committee should not include any Executive Officer. Under NYSE rules, in the absence of an applicable exemption, audit committees are required to satisfy the independence requirements under Rule 10A-3 of the Exchange Act. TOTAL’s Audit Committee consists of four directors, all of whom meet the independence requirements under Rule 10A-3.

The duties of the Company’s Audit Committee, in line with French law and the AFEP-MEDEF Code, are described in point 4.1.2.3 of chapter 4 of the Universal Registration Document 2020 (starting on page 165), which is incorporated herein by reference. The Audit Committee regularly reports to the Board of Directors on the fulfillment of its tasks, the results of the financial statements certification process and the contribution of such process to guaranteeing the financial information’s integrity.

One structural difference between the legal status of the audit committee of a U.S.-listed company and that of a French-listed company concerns the degree of the committee’s involvement in managing the relationship between the company and the auditors. French law requires French companies that publish consolidated financial statements, such as TOTAL SE, to have two co-statutory auditors, while the NYSE listing standards require that the audit committee of a U.S.-listed have direct responsibility for the appointment, compensation, retention and oversight of the work of the auditor. French law provides that the election of the co-statutory auditors is the sole responsibility of the shareholders duly convened at a shareholders’ meeting. In making their decision, the shareholders may rely on proposals submitted to them by the board of directors based on recommendations from the audit committee. The shareholders elect the statutory auditors for an audit period of six financial years. The statutory auditors may only be revoked by a court order and only on grounds of professional negligence or incapacity to perform their mission.

16G.5    Meetings of non-management directors

The NYSE listing standards require that the non-management directors of a U.S.-listed company meet at regularly scheduled executive sessions without management. French law does not contain such a requirement. The AFEP-MEDEF Code recommends, however, that a meeting not attended by the Executive Officers be organized at least once a year.

Since December 16, 2015, the rules of procedure of the board of directors provide that, with the agreement of the Governance and Ethics Committee, the Lead Independent Director may hold meetings of the directors who do not hold executive or salaried positions on the Board of Directors. He or she reports to the Board of Directors on the conclusions of such meetings.

In December 2020, the Lead Independent Director held a meeting of the independent directors. She subsequently presented a summary of this meeting to the Board of Directors.

Thus, the Board of Directors’ practice is in line with the recommendation made in the AFEP-MEDEF Code.

Form 20-F 2020   TOTAL    29

16G.6    Shareholder approval of compensation

Pursuant to the provisions of the French Commercial Code, as amended, the compensation of the chairman of the board of directors, the members of the board of directors, the chief executive officer and, as the case may be, the deputy chief executive officer(s) in French listed companies shall each year be submitted to the approval of their shareholders. Articles L. 22-10-8 and L. 22-10-34 of the French Commercial Code (formerly Articles L. 225-37-2 and L. 225-100 as amended by the ordinance n°2019-1234 supplemented by the decree n° 2019-1235 each dated November 27, 2019) provide, respectively, for an ex ante vote and two ex post votes:

- ex ante vote: the shareholders shall each year approve the compensation policy of the above-mentioned directors and officers for the current fiscal year. Such policy shall describe all components of fixed and variable compensation and shall explain the decision process followed for its determination, review and implementation. In the event a resolution is rejected by the shareholders, the preceding already-approved compensation policy for the concerned director(s) and officer(s) will be applicable; in the absence of a preceding already-approved compensation policy, the compensation is determined in line with compensation granted the preceding year if any, or in line with existing practices in the company; and

- two ex post votes, the shareholders shall each year approve:

o the fixed, variable and extraordinary components of the aggregate compensation and benefit of any kinds due or attributable to the chief executive officer and the chairman of the board for the preceding fiscal year. In the event a resolution is rejected by the shareholders, the variable and extraordinary components of the compensation will not be paid to the chief executive officer and the chairman of the board;

o the total annual compensation of all the above-mentioned directors and officers. In the event a resolution is rejected by the shareholders, such compensation will not be paid to the directors and officers.

16G.7    Disclosure

The NYSE listing standards require US-listed companies to adopt, and post on their websites, a set of corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation of the board. In addition, the chief executive officer of a U.S.-listed company must certify to the NYSE annually that he or she is not aware of any violations by the company of the NYSE’s corporate governance listing standards.

French law requires neither the adoption of such guidelines nor the provision of such certification. The AFEP-MEDEF Code recommends, however, that the board of directors of a French-listed company review its operation annually and perform a formal evaluation at least once every three years, under the leadership of the appointments or nominations committee or an independent director, assisted by an external consultant. TOTAL’s Board of Directors’ most recent formal self-evaluation took place in early 2021. The AFEP-MEDEF Code also recommends that shareholders be informed of these evaluations each year in the annual report. In addition, Article L. 225-37 of the French Commercial Code requires the board of directors to present to the shareholders a corporate governance report appended to the management report, notably describing the composition of the board and the balanced representation of men and women on the board, the preparation and organization of the Board’s work, the offices and positions of each TOTAL Executive Officer and the compensation attributable and received by each such officer as well as the compensation attributable and received by the members of the board of directors. The AFEP-MEDEF Code also includes ethical rules concerning which directors are expected to comply.

16G.8    Code of business conduct and ethics

The NYSE listing standards require each U.S.-listed company to adopt, and post on its website, a code of business conduct and ethics for its directors, officers and employees. Under Article 17 of Law n° 2016/1691 of December 9, 2016, top management (such as the chairman of the board or chief executive officer) of large French companies is required to adopt a code of conduct proscribing the different types of behavior being likely to characterize acts of corruption, bribery or influence peddling. This code must be included in the rules of procedure of the company and be submitted to employee representatives. Under the SEC’s rules and regulations, all companies required to submit periodic reports to the SEC, including TOTAL, must disclose in their annual reports whether they have adopted a code of ethics for their principal executive officers and senior financial officers. In addition, they must file a copy of the code with the SEC, post the text of the code on their website or undertake to provide a copy upon request to any person without charge. There is significant, though not complete, overlap between the code of ethics required by the NYSE listing standards and the code of ethics for senior financial officers required by the SEC’s rules. For a description of the code of ethics adopted by TOTAL, refer to point 3.3.2 of chapter 3 of the Universal Registration Document 2020 (starting on page 101), which is incorporated herein by reference, and “Item 16B. Code of ethics”.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The Consolidated Financial Statements and Notes thereto are included in pages F-9 to F-109 attached hereto.

The reports of the statutory auditors, ERNST & YOUNG Audit and KPMG Audit, a division of KPMG S.A., are included in pages F-1 to F-8 attached hereto.

30    TOTAL   Form 20-F 2020

ITEM 19. EXHIBITS

The following documents are filed as part of this annual report:

1	Articles of Associations (Statuts) of TOTAL SE (as amended through February 8, 2021).
2.1	The total amount of long-term debt securities authorized under any instrument does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. We hereby agree to furnish to the SEC, upon its request, a copy of any instrument defining the rights of holders of long-term debt of the Company or of its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed.
2.2	Description of securities registered under section 12 of the Exchange Act.
8	List of Subsidiaries (see Note 18 to the Consolidated Financial Statements, starting on page F-92).
11	Code of Ethics (incorporated by reference to exhibit 11 of the Company’s annual report on Form 20-F for the year ended December 31, 2016, filed on March 17, 2017).
12.1	Certification of Chief Executive Officer.
12.2	Certification of Chief Financial Officer.
13.1	Certification of Chief Executive Officer.
13.2	Certification of Chief Financial Officer.
15.1	Excerpt of the pages and sections of the Universal Registration Document 2020 incorporated herein by reference.
15.2	Consent of ERNST & YOUNG Audit and of KPMG Audit, a division of KPMG S.A.
15.3	Third party report of DeGolyer and MacNaughton.
15.4	Consent of DeGolyer and MacNaughton.
101.INS	Inline XBRL Instance Document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101).

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	TOTAL SE
	By: /s/ PATRICK POUYANNÉ
	Name:	Patrick Pouyanné
	Title:	Chairman and Chief Executive Officer
Date: March 31, 2021

Form 20-F 2020   TOTAL    31

Report of independent registered public accounting firms on the internal control over financial reporting	F-2
Report of independent registered public accounting firms on the consolidated financial statements	F-4
Consolidated statement of income	F-9
Consolidated statement of comprehensive income	F-10
Consolidated balance sheet	F-11
Consolidated statement of cash flow	F-12
Consolidated statement of changes in shareholder’s equity	F-13
Notes to the Consolidated Financial Statements	F-14

Form 20-F 2020   TOTAL   F-1

	KPMG Audit A division of KPMG S.A. Tour EQHO 2 Avenue Gambetta CS 60055 92066 Paris-la Défense Cedex	ERNST & YOUNG Audit 1/2, place des Saisons 92400 Courbevoie - Paris-La Défense 1 France S.A.S. à capital variable

TOTAL SE

Registered office: 2, place Jean Millier - La Défense 6 - 92400 Courbevoie - France

Report of Independent Registered Public Accounting Firms on the Internal Control Over Financial Reporting

To the Shareholders and Board of Directors,

Opinion on Internal Control Over Financial Reporting

We have audited TOTAL SE and subsidiaries’ (“the Group”) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Group as of December 31, 2020, 2019, and 2018, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020 and the related notes (collectively, “the consolidated financial statements”), and our report dated March 17, 2021 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

F-2    TOTAL   Form 20-F 2020

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of  financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Paris La Défense, March 17, 2021

KPMG Audit, a division of KPMG S.A.		ERNST & YOUNG Audit
/s/ JACQUES-FRANÇOIS LETHU	/s/ ERIC JACQUET	/s/ ERNST & YOUNG Audit
Jacques-François Lethu	Eric Jacquet
Partner	Partner

Form 20-F 2020   TOTAL   F-3

KPMG Audit A division of KPMG S.A. Tour EQHO 2 Avenue Gambetta CS 60055 92066 Paris-la Défense Cedex	ERNST & YOUNG Audit 1/2, place des Saisons 92400 Courbevoie - Paris-La Défense 1 France

TOTAL SE

Registered office: 2, place Jean Millier - La Défense 6 - 92400 Courbevoie - France

Report of Independent Registered Public Accounting Firms on the Consolidated Financial Statements

To the Shareholders and Board of Directors,

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of TOTAL SE and subsidiaries (“the Group”) as of December 31, 2020, 2019 and 2018, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, “the consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2020, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with International Financial Reporting Standards as adopted by the European Union and in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Group’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 17, 2021 expressed an unqualified opinion on the effectiveness of the Group’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 13.2 “Lease contracts” to the consolidated financial statements, the Group has changed its method of accounting for leases on January 1, 2019, due to the adoption of IFRS 16 “Leases”.

F-4    TOTAL   Form 20-F 2020

	TOTAL SE
	Report of Independent Registered Public Accounting Firms on the Consolidated Financial Statements
	March 17, 2021

Basis for Opinion

These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The Critical Audit Matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the Audit Committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of Critical Audit Matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the Critical Audit Matters below, providing separate opinions on the Critical Audit Matters or on the accounts or disclosures to which they relate.

Evaluation of the impairment of non-current assets of exploration and production activities of the Exploration & Production and Integrated Gas, Renewables and Power segments (“E&P and iGRP segments”)

Description of the Matter

As discussed in Notes 7.1, 7.2, and 3 to the consolidated financial statements as of December 31, 2020, the non-current assets of exploration and production activities of the E&P and iGRP segments are mainly comprised of proved and unproved properties and work in progress of exploration and production activities (83,700 million US dollars), proved mineral interests (6,964 million US dollars), unproved mineral interests (15,510 million US dollars), and a portion of the 23,783 million US dollars balance of investments and loans in equity affiliates.

The Group performs impairment tests on these assets as soon as any indication of impairment exists. As described in Note “Major judgments and accounting estimates” and Note 3.D “Asset impairment” to the consolidated financial statements, in 2020, in the context of the health crisis, the Group decided to revise the price assumptions used for its assets impairment tests. In addition, in line with its new Climate Ambition announced on May 5, 2020, which aims at carbon neutrality, the Group has reviewed its oil assets that can be qualified as “stranded”, meaning with reserves beyond 20 years and high production costs, whose overall reserves may therefore not be produced by 2050. In 2020, asset

Form 20-F 2020   TOTAL   F-5

	TOTAL SE
	Report of Independent Registered Public Accounting Firms on the Consolidated Financial Statements
	March 17, 2021

impairments were recorded for an amount of 8,646 million US dollars in operating income and 8,157 million US dollars in net income, Group share.

The testing method is described in Note 3.D to the consolidated financial statements. The Group assesses the recoverable amount of the E&P and iGRP segments’ non-current assets of exploration and production activities based on the cash-generating units (CGU) that include all the hydrocarbon sites and industrial assets involved in the production, processing and extraction of hydrocarbons. The recoverable amount is measured for each CGU, taking into account the economic business environment and the Group’s operating plans. The primary assumptions used by the Group to measure the recoverable amount include the future price of hydrocarbons, the future operational costs, oil and gas reserves, and the after-tax discount rate.

We identified the evaluation of the impairment of the E&P and iGRP segments’ non-current assets of exploration and production activities as a critical audit matter because evaluating the Group’s assumptions discussed above involved a high degree of subjective auditor judgment. Specifically, such evaluation required the consideration of evidence that corroborates the Group’s assumptions and evidence that might contradict the assumptions, such as publicly available industry information.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included the following. We obtained an understanding, evaluated the design, and tested the operating effectiveness of certain controls over the Group’s processes to address the risks of material misstatement relating to the evaluation of the impairment of the E&P and iGRP segments’ non-current assets of exploration and production activities. This included testing certain controls over the Group’s determination of the primary assumptions underlying the recoverable amount, such as the estimates of the future price of hydrocarbons, the future operational costs, oil and gas reserves, and the after-tax discount rate.

We considered whether there was an indication of impairment for these assets, such as an expected severe decline of production, a new tax law enacted, an expected impact of new price assumptions, or the Group’s new Climate Ambition. We compared the primary assumptions to those included in analyses, and to budgets and forecasts approved by the Executive Committee and the Board of Directors. We also compared the hydrocarbon pricing scenarios used by the Group as prepared by the Strategy and Climate division to publicly available industry information (International Energy Agency, brokers, and consultants). We analyzed the future operational costs by calculating ratios over production and comparing them over time or to those of other similar assets. We agreed oil production profiles to the proved and probable hydrocarbon reserves established as part of the Group’s internal procedures. With the assistance of valuation specialists included in our audit teams, we performed a re-calculation of the after-tax discount rate used by management, which we compared with the rates calculated by major market financial analysts. We assessed the consistency of the tax rates used by management with the applicable tax schemes and the oil agreements in force. We analyzed the information disclosed in Note 3.D ”Asset impairment” to the consolidated financial statements. In particular, we analyzed the Company’s sensitivity analysis on operating income and net income to variations of the hydrocarbon pricing scenarios, and compared it to information disclosed in this Note.

F-6    TOTAL   Form 20-F 2020

	TOTAL SE
	Report of Independent Registered Public Accounting Firms on the Consolidated Financial Statements
	March 17, 2021

Effect of estimated proved and proved developed hydrocarbon reserves on the depreciation of oil and gas assets of production activities of the Exploration & Production and Integrated Gas, Renewables and Power segments (“E&P and iGRP segments”)

Description of the Matter

As discussed in the Note “Major judgments and accounting estimates” to the consolidated financial statements, the proved and proved developed hydrocarbon reserves are used by the Group in the successful efforts method to account for its oil and gas activities. Notes 7.1 and 7.2 to the consolidated financial statements outline that under such method, oil and gas assets are depreciated using the unit-of-production method. The unit-of-production method is based on either proved hydrocarbon reserves or proved developed hydrocarbon reserves. Those reserves are estimated by the Group’s petroleum engineers in accordance with industry practice and Securities and Exchange Commission (SEC) regulations.

As described in Note 7.2 “Property, plant and equipment” to the consolidated financial statements, in the event that, due to the price effect on the hydrocarbon reserves evaluation, the unit-of-production depreciation method does not reflect properly the useful life of the asset, an alternative depreciation method is applied based on the reserves evaluated using the 12-month average price of the previous year. This is the case in 2020 where the unit-of-production depreciation method is applied to all assets in 2020 based on proved hydrocarbon reserves or proved developed hydrocarbon reserves measured using the 12-month average price for 2019.

The primary assumptions used by the Group to estimate the proved and proved developed hydrocarbon reserves for purposes of the depreciation of oil and gas assets of production activities of the E&P and iGRP segments for the year ended December 31, 2020 include the following: geoscience and engineering data used to determine deposit quantities; contractual arrangements that determine the Group’s share of the reserves; and the price.

We identified the effect of estimated proved and proved developed hydrocarbon reserves on the depreciation of oil and gas assets of production activities of the E&P and iGRP segments as a critical audit matter because evaluating the Group’s aforementioned assumptions involved a high degree of complex auditor judgment due to the inherent uncertainty and nature of such assumptions.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included the following. We obtained an understanding, evaluated the design, and tested the operating effectiveness of certain controls over the Group’s processes to address the risks of material misstatement in the depreciation of oil and gas assets of production activities of the E&P and iGRP segments relating to the effect of estimated proved and proved developed hydrocarbon reserves. This included testing certain controls over management’s determination and evaluation of deposit quantities and the modeling of contractual arrangements that determine the Group’s share of proved and proved developed hydrocarbon reserves.

We assessed the qualifications and objectivity of the Group’s petroleum engineers responsible for estimating reserves and analyzed the main changes in proved and proved developed hydrocarbon reserves compared to the prior fiscal year. We compared the 2020 forecasted production to 2020 actual production. We inspected evidence from contractual arrangements that determine the Group’s share of the proved and proved developed hydrocarbon reserves through the expiration of the

Form 20-F 2020   TOTAL   F-7

	TOTAL SE
	Report of Independent Registered Public Accounting Firms on the Consolidated Financial Statements
	March 17, 2021

contracts. We evaluated the Group’s assessment, where appropriate, of the reasons leading the Group to believe that the renewal of contractual arrangements is reasonably certain. We evaluated the analysis performed by the Group to determine that using the 12-month average price of 2020 to estimate the proved and proved developed hydrocarbon reserves for purposes of the depreciation of oil and gas assets of production activities of the E&P and iGRP segments would not properly reflect the anticipated useful life of these assets. We analyzed the Group’s use of the 12-month average price for 2019 by comparing such average price to the Group’s average long-term view of prices. We assessed the Group’s methodology used to estimate these proved and proved developed hydrocarbon reserves, considering SEC’s regulations and the 12-month average price for 2019.

Paris La Défense, March 17, 2021

KPMG Audit, a division of KPMG S.A.		ERNST & YOUNG Audit
/s/ JACQUES-FRANÇOIS LETHU	/s/ ERIC JACQUET	/s/ ERNST & YOUNG Audit
Jacques-François Lethu Partner	Eric Jacquet Partner
We or our predecessor firms have served as the Group’s auditor since 1996.		We have served as the Group’s auditor since 2004.

F-8    TOTAL   Form 20-F 2020

Consolidated Financial Statements
	Consolidated statement of income

Consolidated statement of income

TOTAL

For the year ended December 31, (M$)(a)		2020	2019	2018
Sales	(Notes 3, 4, 5)	140,685	200,316	209,363
Excise taxes	(Notes 3 & 5)	(20,981)	(24,067)	(25,257)
Revenues from sales	(Notes 3 & 5)	119,704	176,249	184,106
Purchases, net of inventory variation	(Note 5)	(77,486)	(116,221)	(125,816)
Other operating expenses	(Note 5)	(25,538)	(27,255)	(27,484)
Exploration costs	(Note 5)	(731)	(785)	(797)
Depreciation, depletion and impairment of tangible assets and mineral interests	(Note 5)	(22,264)	(15,731)	(13,992)
Other income	(Note 6)	2,237	1,163	1,838
Other expense	(Note 6)	(1,506)	(1,192)	(1,273)
Financial interest on debt		(2,147)	(2,333)	(1,933)
Financial income and expense from cash & cash equivalents		37	(19)	(188)
Cost of net debt	(Note 15)	(2,110)	(2,352)	(2,121)
Other financial income	(Note 6)	914	792	1,120
Other financial expense	(Note 6)	(690)	(764)	(685)
Net income (loss) from equity affiliates	(Note 8)	452	3,406	3,170
Income taxes	(Note 11)	(318)	(5,872)	(6,516)
CONSOLIDATED NET INCOME		(7,336)	11,438	11,550
Group share		(7,242)	11,267	11,446
Non-controlling interests		(94)	171	104
Earnings per share ($)		(2.90)	4.20	4.27
Fully-diluted earnings per share ($)		(2.90)	4.17	4.24

(a) Except for per share amounts.

Form 20-F 2020   TOTAL   F-9

Consolidated Financial Statements

Consolidated statement of comprehensive income

Consolidated statement of comprehensive income

TOTAL

For the year ended December 31, (M$)		2020	2019	2018
Consolidated net income		(7,336)	11,438	11,550
Other comprehensive income
Actuarial gains and losses	(Note 10)	(212)	(192)	(12)
Change in fair value of investments in equity instruments	(Note 8)	533	142	–
Tax effect		65	53	13
Currency translation adjustment generated by the parent company	(Note 9)	7,541	(1,533)	(4,022)
Items not potentially reclassifiable to profit and loss		7,927	(1,530)	(4,021)
Currency translation adjustment	(Note 9)	(4,645)	740	1,113
Cash flow hedge	(Notes 15 & 16)	(313)	(599)	25
Variation of foreign currency basis spread	(Note 15)	28	1	(80)
Share of other comprehensive income of equity affiliates, net amount	(Note 8)	(1,831)	408	(540)
Other		(8)	(3)	(5)
Tax effect		72	202	14
Items potentially reclassifiable to profit and loss		(6,697)	749	527
Total other comprehensive income (net amount)		1,230	(781)	(3,494)
COMPREHENSIVE INCOME		(6,106)	10,657	8,056
- Group share		(6,312)	10,418	8,021
- Non-controlling interests	(Note 9)	206	239	35

F-10    TOTAL   Form 20-F 2020

Consolidated Financial Statements
	Consolidated balance sheet

Consolidated balance sheet

TOTAL

ASSETS
As of December 31, (M$)		2020	2019	2018
Non-current assets
Intangible assets, net	(Notes 4 & 7)	33,528	33,178	28,922
Property, plant and equipment, net	(Notes 4 & 7)	108,335	116,408	113,324
Equity affiliates: investments and loans	(Note 8)	27,976	27,122	23,444
Other investments	(Note 8)	2,007	1,778	1,421
Non-current financial assets	(Note 15)	4,781	912	680
Deferred income taxes	(Note 11)	7,016	6,216	6,663
Other non-current assets	(Note 6)	2,810	2,415	2,509
Total non-current assets		186,453	188,029	176,963
Current assets
Inventories, net	(Note 5)	14,730	17,132	14,880
Accounts receivable, net	(Note 5)	14,068	18,488	17,270
Other current assets	(Note 5)	13,428	17,013	14,724
Current financial assets	(Note 15)	4,630	3,992	3,654
Cash and cash equivalents	(Note 15)	31,268	27,352	27,907
Assets classified as held for sale	(Note 2)	1,555	1,288	1,364
Total current assets		79,679	85,265	79,799
TOTAL ASSETS		266,132	273,294	256,762
LIABILITIES & SHAREHOLDERS’ EQUITY
Shareholders’ equity
Common shares		8,267	8,123	8,227
Paid-in surplus and retained earnings		107,078	121,170	120,569
Currency translation adjustment		(10,256)	(11,503)	(11,313)
Treasury shares		(1,387)	(1,012)	(1,843)
Total shareholders' equity - Group share	(Note 9)	103,702	116,778	115,640
Non-controlling interests		2,383	2,527	2,474
Total shareholders' equity		106,085	119,305	118,114
Non-current liabilities
Deferred income taxes	(Note 11)	10,326	11,858	11,490
Employee benefits	(Note 10)	3,917	3,501	3,363
Provisions and other non-current liabilities	(Note 12)	20,925	20,613	21,432
Non-current financial debt	(Note 15)	60,203	47,773	40,129
Total non-current liabilities		95,371	83,745	76,414
Current liabilities
Accounts payable		23,574	28,394	26,134
Other creditors and accrued liabilities	(Note 5)	22,465	25,749	22,246
Current borrowings	(Note 15)	17,099	14,819	13,306
Other current financial liabilities	(Note 15)	203	487	478
Liabilities directly associated with the assets classified as held for sale	(Note 2)	1,335	795	70
Total current liabilities		64,676	70,244	62,234
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY		266,132	273,294	256,762

Form 20-F 2020   TOTAL   F-11

Consolidated Financial Statements

Consolidated statement of cash flow

Consolidated statement of cash flow

TOTAL

For the year ended December 31, (M$)		2020	2019	2018
CASH FLOW FROM OPERATING ACTIVITIES
Consolidated net income		(7,336)	11,438	11,550
Depreciation, depletion, amortization and impairment	(Note 5.3)	22,861	16,401	14,584
Non-current liabilities, valuation allowances, and deferred taxes	(Note 5.5)	(1,782)	(58)	(887)
(Gains) losses on disposals of assets		(909)	(614)	(930)
Undistributed affiliates’ equity earnings		948	(1,083)	(826)
(Increase) decrease in working capital	(Note 5.5)	1,869	(1,718)	769
Other changes, net		(848)	319	443
Cash flow from operating activities		14,803	24,685	24,703
CASH FLOW USED IN INVESTING ACTIVITIES
Intangible assets and property, plant and equipment additions	(Note 7)	(10,764)	(11,810)	(17,080)
Acquisitions of subsidiaries, net of cash acquired		(966)	(4,748)	(3,379)
Investments in equity affiliates and other securities		(2,120)	(1,618)	(1,108)
Increase in non-current loans		(1,684)	(1,061)	(618)
Total expenditures		(15,534)	(19,237)	(22,185)
Proceeds from disposals of intangible assets and property, plant and equipment		740	527	3,716
Proceeds from disposals of subsidiaries, net of cash sold		282	158	12
Proceeds from disposals of non-current investments		578	349	1,444
Repayment of non-current loans		855	1,026	2,067
Total divestments		2,455	2,060	7,239
Cash flow used in investing activities		(13,079)	(17,177)	(14,946)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance (repayment) of shares:
– Parent company shareholders		374	452	498
– Treasury shares		(611)	(2,810)	(4,328)
Dividends paid:
– Parent company shareholders		(6,688)	(6,641)	(4,913)
– Non-controlling interests		(184)	(115)	(97)
Net issuance of perpetual subordinated notes	(Note 9)	331	–	–
Payments on perpetual subordinated notes	(Note 9)	(315)	(371)	(325)
Other transactions with non-controlling interests		(204)	10	(622)
Net issuance (repayment) of non-current debt	(Note 15)	15,800	8,131	649
Increase (decrease) in current borrowings		(6,501)	(5,829)	(3,990)
Increase (decrease) in current financial assets and liabilities		(604)	(536)	(797)
Cash flow from / (used in) financing activities		1,398	(7,709)	(13,925)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3,122	(201)	(4,168)
Effect of exchange rates		794	(354)	(1,110)
Cash and cash equivalents at the beginning of the period		27,352	27,907	33,185
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	(Note 15)	31,268	27,352	27,907

F-12    TOTAL   Form 20-F 2020

Consolidated Financial Statements
	Consolidated statement of changes in shareholder’s equity

Consolidated statement of changes in shareholders’ equity

TOTAL

			Paid-in
			surplus and	Currency			Shareholders’	Non-	Total
	Common shares issued		retained	translation	Treasury shares		equity -	controlling	shareholders’
(M$)	Number	Amount	earnings	adjustment	Number	Amount	Group share	interests	equity
As of January 1, 2018	2,528,989,616	7,882	112,040	(7,908)	(8,376,756)	(458)	111,556	2,481	114,037
Net income 2018	–	–	11,446	–	–	–	11,446	104	11,550
Other comprehensive income	–	–	(20)	(3,405)	–	–	(3,425)	(69)	(3,494)
Comprehensive income	–	–	11,426	(3,405)	–	–	8,021	35	8,056
Dividend	–	–	(7,881)	–	–	–	(7,881)	(97)	(7,978)
Issuance of common shares	156,203,090	476	8,366	–	–	–	8,842	–	8,842
Purchase of treasury shares	–	–	–	–	(72,766,481)	(4,328)	(4,328)	–	(4,328)
Sale of treasury shares(a)	–	–	(240)	–	4,079,257	240	–	–	–
Share-based payments	–	–	294	–	–	–	294	–	294
Share cancellation	(44,590,699)	(131)	(2,572)	–	44,590,699	2,703	–	–	–
Net issuance (repayment) of perpetual subordinated notes	–	–	–	–	–	–	–	–	–
Payments on perpetual subordinated notes	–	–	(315)	–	–	–	(315)	–	(315)
Other operations with non-controlling interests	–	–	(517)	–	–	–	(517)	(99)	(616)
Other items	–	–	(32)	–	–	–	(32)	154	122
As of December 31, 2018	2,640,602,007	8,227	120,569	(11,313)	(32,473,281)	(1,843)	115,640	2,474	118,114
Net income 2019	–	–	11,267	–	–	–	11,267	171	11,438
Other comprehensive income	–	–	(659)	(190)	–	–	(849)	68	(781)
Comprehensive income	–	–	10,608	(190)	–	–	10,418	239	10,657
Dividend	–	–	(7,730)	–	–	–	(7,730)	(115)	(7,845)
Issuance of common shares	26,388,503	74	1,265	–	–	–	1,339	–	1,339
Purchase of treasury shares	–	–	–	–	(52,389,336)	(2,810)	(2,810)	–	(2,810)
Sale of treasury shares(a)	–	–	(219)	–	4,278,948	219	–	–	–
Share-based payments	–	–	207	–	–	–	207	–	207
Share cancellation	(65,109,435)	(178)	(3,244)	–	65,109,435	3,422	–	–	–
Net issuance (repayment) of perpetual subordinated notes	–	–	(4)	–	–	–	(4)	–	(4)
Payments on perpetual subordinated notes	–	–	(353)	–	–	–	(353)	–	(353)
Other operations with non-controlling interests	–	–	55	–	–	–	55	(42)	13
Other items	–	-	16	–	–	–	16	(29)	(13)
As of December 31, 2019	2,601,881,075	8,123	121,170	(11,503)	(15,474,234)	(1,012)	116,778	2,527	119,305
Net income 2020	–	–	(7,242)	–	–	–	(7,242)	(94)	(7,336)
Other comprehensive income	–	–	(321)	1,251	–	–	930	300	1,230
Comprehensive income	–	–	(7,563)	1,251	–	–	(6,312)	206	(6,106)
Dividend	–	–	(7,899)	–	–	–	(7,899)	(234)	(8,133)
Issuance of common shares	51,242,950	144	1,470	–	–	–	1,614	–	1,614
Purchase of treasury shares	–	–	-	–	(13,236,044)	(611)	(611)	–	(611)
Sale of treasury shares(a)	–	–	(236)	–	4,317,575	236	–	–	–
Share-based payments	–	–	188	–	–	–	188	–	188
Share cancellation	–	–	-	–	–	–	–	–	–
Net issuance (repayment) of perpetual subordinated notes	–	–	331	–	–	–	331	–	331
Payments on perpetual subordinated notes	–	–	(308)	–	–	–	(308)	–	(308)
Other operations with non-controlling interests	–	–	(61)	(4)	–	–	(65)	(117)	(182)
Other items	–	–	(14)	–	–	–	(14)	1	(13)
AS OF DECEMBER 31, 2020	2,653,124,025	8,267	107,078	(10,256)	(24,392,703)	(1,387)	103,702	2,383	106,085

(a) Treasury shares related to the restricted stock grants.

Changes in equity are detailed in Note 9.

Form 20-F 2020   TOTAL   F-13

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

TOTAL

Notes to the Consolidated Financial Statements

Basis of preparation of the consolidated financial statements	15
Major judgments and accounting estimates	15
Judgments in case of transactions not addressed by any accounting standard or interpretation	16
NOTE 1 General accounting policies	17
NOTE 2 Changes in the Group structure	18
NOTE 3 Business segment information	19
NOTE 4 Segment information by geographical area	30
NOTE 5 Main items related to operating activities	30
NOTE 6 Other items from operating activities	35
NOTE 7 Intangible and tangible assets	37
NOTE 8 Equity affiliates, other investments and related parties	42
NOTE 9 Shareholders’ equity and share-based payments	47
NOTE 10 Payroll, staff and employee benefits obligations	57
NOTE 11 Income taxes	60
NOTE 12 Provisions and other non-current liabilities	62
NOTE 13 Off balance sheet commitments and lease contracts	64
NOTE 14 Financial assets and liabilities analysis per instrument class and strategy	70
NOTE 15 Financial structure and financial costs	72
NOTE 16 Financial instruments related to commodity contracts	88
NOTE 17 Post closing events	91
NOTE 18 Consolidation scope	92

F-14    TOTAL   Form 20-F 2020

Consolidated Financial Statements
	Notes to the Consolidated Financial Statements
Note 1

On February 8, 2021, the Board of Directors established and authorized the publication of the Consolidated Financial Statements of TOTAL SE for the year ended December 31, 2020, which will be submitted for approval to the Shareholders’ Meeting to be held on May 28, 2021.

Basis of preparation of the consolidated financial statements

The Consolidated Financial Statements of TOTAL SE and its subsidiaries (the Group) are presented in U.S. dollars and have been prepared on the basis of IFRS (International Financial Reporting Standards) as adopted by the European Union and IFRS as issued by the IASB (International Accounting Standard Board) as of December 31, 2020.

The accounting principles applied for the consolidated financial statements at December 31, 2020, were the same as those that were used for the financial statements at December 31, 2019, with the exception of the IFRS standard changes listed below which had not been early adopted by the Group.

As of January 1st, 2020, the Group early adopted the amendments to IFRS 7 and IFRS 9 relating to the interest rate benchmark reform phase II. In particular, these amendments allow to maintain the hedge accounting qualification of interest rate derivatives.

As part of this transition, the Group set up a working group in order to cover all aspects relating to the IBOR reform and is currently assessing the future impacts of these index changes.

As of December 31, 2020, except for the index change on the remuneration of cash collateral with the clearing houses, whose impact is not material, no modification of the IBOR indexes was applied on the financial instruments used by the Group.

Major judgments and accounting estimates

The preparation of financial statements in accordance with IFRS for the closing as of December 31, 2020 requires the executive management to make estimates, assumptions and judgments that affect the information reported in the Consolidated Financial Statements and the Notes thereto.

These estimates, assumptions and judgments are based on historical experience and other factors believed to be reasonable at the date of preparation of the financial statements. They are reviewed on an on-going basis by management and therefore could be revised as circumstances change or as a result of new information.

Different estimates, assumptions and judgments could significantly affect the information reported, and actual results may differ from the amounts included in the Consolidated Financial Statements and the Notes thereto.

The following summary provides further information about the key estimates, assumptions and judgments that are involved in preparing, the Consolidated Financial Statements and the Notes thereto. It should be read in conjunction with the sections of the Notes mentioned in the summary.

The consolidated financial statements are impacted by the health and oil crises. The Group has taken into account the impact of this environment, particularly on the depreciation and impairment of oil and gas assets (see Note 3.D “Asset impairment” and Note 7.2 “Tangible assets”).

Estimation of hydrocarbon reserves

The estimation of oil and gas reserves is a key factor in the Successful Efforts method used by the Group to account for its oil and gas activities.

The Group’s oil and gas reserves are estimated by the Group’s petroleum engineers in accordance with industry standards and SEC (U.S. Securities and Exchange Commission) regulations.

Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geosciences and engineering data, can be determined with reasonable certainty to be recoverable (from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations), prior to the time at which contracts providing the rights to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.

Proved oil and gas reserves are calculated using a 12-month average price determined as the unweighted arithmetic average of the first-day-of-the-month price for each month of the relevant year unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. The Group reassesses its oil and gas reserves at least once a year on all its properties.

The Successful Efforts method and the mineral interests and property, plant and equipment of exploration and production are presented in Note 7 “Intangible and tangible assets”.

Impairment of property, plant and equipment, intangible assets and goodwill

As part of the determination of the recoverable value of assets for impairment (IAS36), the estimates, assumptions and judgments mainly concern hydrocarbon prices scenarios, operating costs, production volumes and oil and gas proved and probable reserves, refining margins and product marketing conditions (mainly petroleum, petrochemical and chemical products as well as renewable industry products). The estimates and assumptions used by the executive management are determined in specialized internal departments in light of economic conditions and external expert analysis. The discount rate is reviewed annually.

Form 20-F 2020   TOTAL    F-15

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Note 1

In 2020, the Group decided to revise the price assumptions used for its assets impairment tests. Based on these new assumptions, asset impairments were recorded during the period. In line with its new Climate Ambition announced on May 5, 2020, which aims at carbon neutrality, the Group has reviewed its oil assets that can be qualified as “stranded”, and therefore has decided to impair its oil sands assets in Canada. These impairments and revised assumptions are presented in Note 3.D “Asset impairment”.

Impairment of assets and the method applied are described in Note 3 "Business segment information".

Employee benefits

The benefit obligations and plan assets can be subject to significant volatility due in part to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account local conditions. They are determined following a formal process involving expertise and Group internal judgments, in financial and actuarial terms, and also in consultation with actuaries and independent experts.

The assumptions for each plan are reviewed annually and adjusted if necessary to reflect changes from the experience and actuarial advice. The discount rate is reviewed quarterly.

Payroll, staff and employee benefits obligations and the method applied are described in Note 10 “Payroll, staff and employee benefits obligations”.

Asset retirement obligations

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises.

This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimates of reserves and production, the analysis of site conditions and technologies.

The discount rate is reviewed annually.

Asset retirement obligations and the method used are described in Note 12 “Provisions and other non-current liabilities”.

Income Taxes

A tax liability is recognized when in application of a tax regulation, a future payment is considered probable and can be reasonably estimated. The exercise of judgment is required to assess the impact of new events on the amount of the liability.

Deferred tax assets are recognized in the accounts to the extent that their recovery is considered probable. The amount of these assets is determined after taking into account deferred tax liabilities with comparable maturity, arising from the same entities and tax regimes. It takes into account existing taxable profits and future taxable profits which estimation is inherently uncertain and subject to change over time. The exercise of judgment is required to assess the impact of new events on the value of these assets and including changes in estimates of future taxable profits and the deadlines for their use.

In addition, these tax positions may depend on interpretations of tax laws and regulations in the countries where the Group operates. These interpretations may have uncertain nature. Depending on the circumstances, they are final only after negotiations or resolution of disputes with authorities that can last several years.

Incomes taxes and the accounting methods are described in Note 11 “Income taxes”.

Judgments in case of transactions not addressed by any accounting standard or interpretation

Furthermore, when the accounting treatment of a specific transaction is not addressed by any accounting standard or interpretation, the management applies its judgment to define and apply accounting policies that provide information consistent with the general IFRS concepts: faithful representation, relevance and materiality.

F-16    TOTAL   Form 20-F 2020

Consolidated Financial Statements
	Notes to the Consolidated Financial Statements
Note 1

NOTE 1 General accounting policies

1.1 Accounting policies

A)  Principles of consolidation

Entities that are directly controlled by the parent company or indirectly controlled by other consolidated entities are fully consolidated.

Investments in joint ventures are consolidated under the equity method. The Group accounts for joint operations by recognizing its share of assets, liabilities, income and expenses.

Investments in associates, in which the Group has significant influence, are accounted for by the equity method. Significant influence is presumed when the Group holds, directly or indirectly (e.g. through subsidiaries), 20% or more of the voting rights. Companies in which ownership interest is less than 20%, but over which the Company is deemed to exercise significant influence, are also accounted for by the equity method.

All internal balances, transactions and income are eliminated.

B)  Business combinations

Business combinations are accounted for using the acquisition method. This method requires the recognition of the acquired identifiable assets and assumed liabilities of the companies acquired by the Group at their fair value.

The purchase accounting of the acquisition is finalized up to a maximum of one year from the acquisition date.

The acquirer shall recognize goodwill at the acquisition date, being the excess of:

- The consideration transferred, the amount of non-controlling interests and, in business combinations achieved in stages, the fair value at the acquisition date of the investment previously held in the acquired company;

- Over the fair value at the acquisition date of acquired identifiable assets and assumed liabilities.

If the consideration transferred is lower than the fair value of acquired identifiable assets and assumed liabilities, an additional analysis is performed on the identification and valuation of the identifiable elements of the assets and liabilities. After having completed such additional analysis, any negative goodwill is recorded as income.

Non-controlling interests are measured either at their proportionate share in the net assets of the acquired company or at fair value.

In transactions with non-controlling interests, the difference between the price paid (received) and the book value of non-controlling interests acquired (sold) is recognized directly in equity.

C)  Foreign currency translation

The presentation currency of the Group's Consolidated Financial Statements is the US dollar. However, the functional currency of the parent company is the euro. The resulting currency translation adjustments are presented on the line "currency translation adjustment generated by the parent company" of the consolidated statement of comprehensive income, within "items not potentially reclassifiable to profit and loss". In the balance sheet, they are recorded in "currency translation adjustment".

The financial statements of subsidiaries are prepared in the currency that most clearly reflects their business environment. This is referred to as their functional currency.

Since 1st July 2018, Argentina is considered to be hyperinflationary. IAS 29 "Financial Reporting in Hyperinflationary Economies" is applicable to entities whose functional currency is the Argentine peso. The functional currency of the Argentine Exploration & Production subsidiary is the US dollar, therefore IAS 29 has no incidence on the Group accounts. Net asset of the other business segments is not significant.

(i)    Monetary transactions

Transactions denominated in currencies other than the functional currency of the entity are translated at the exchange rate on the transaction date. At each balance sheet date, monetary assets and liabilities are translated at the closing rate and the resulting exchange differences are recognized in the statement of income.

(ii)   Translation of financial statements

Assets and liabilities of entities denominated in currencies other than dollar are translated into dollar on the basis of the exchange rates at the end of the period. The income and cash flow statements are translated using the average exchange rates for the period. Foreign exchange differences resulting from such translations are either recorded in shareholders’ equity under “Currency translation adjustments” (for the Group share) or under “Non-controlling interests” (for the share of non-controlling interests) as deemed appropriate.

1.2 Significant accounting policies applicable in the future

The expected impact of the standards or interpretations published respectively by the International Accounting Standards Board (IASB) and the International Financial Reporting Standards Interpretations Committee (IFRS IC) which were not yet in effect at December 31, 2020, is not material.

Form 20-F 2020   TOTAL    F-17

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Note 2

NOTE 2 Changes in the Group structure

2.1 Main acquisitions and divestments

In 2020, the main changes in the Group structure were as follows:

Integrated Gas, Renewables & Power

- On February 28, 2020, TOTAL finalized the acquisition of a 37.4% interest in Adani Gas Limited, one of the four main distributors of city gas in India. To acquire 37.4% of equity shares of Adani Gas Limited, TOTAL launched a tender offer to public shareholders on October 14, 2019 that ended on January 14, 2020, and then acquired the remaining shares from Adani on February 27 and 28, 2020.

- On December 1, 2020, TOTAL finalized the acquisition from Energías de Portugal of its activity of supplying gas and electricity to residential customers in Spain, which represents a portfolio of 2 million customers, as well as 2 gas-fired combined cycle power plants which represent an electricity generation capacity of nearly 850 megawatts.

Exploration & Production

- On March 31, 2020, TOTAL finalized the sale of its subsidiary Total E&P Deep Offshore Borneo BV which holds an 86.95% interest in Block CA1, located 100 kilometers off the coast of Brunei, to Shell.

- On August 6, 2020, TOTAL closed the sale of UK North Sea non-core assets to NEO Energy.

- In November, 2020, TOTAL finalized the acquisition of 33.3% interest of Tullow’s interests in Uganda Lake Albert development project including the East African Crude Oil Pipeline.

2.2 Major business combinations

Accounting principles

In accordance with IFRS 3 “Business combinations”, TOTAL is assessing the fair value of identifiable acquired assets, liabilities and contingent liabilities on the basis of available information. This assessment will be finalised within 12 months following the acquisition date.

Integrated Gas, Renewables & Power

EDP Comercializadora Espagne

● On December 1, 2020, TOTAL finalized the acquisition from Energías de Portugal of its activity of supplying gas and electricity to residential customers in Spain as well as 2 gas-fired combined cycle power plants. This transaction was recorded for a purchase price of $578 million and a preliminary goodwill of $345 million was recognized in the consolidated financial statements at December 31, 2020.

In the accounts as at December 31, 2020, the fair value of the identifiable acquired assets and the liabilities assumed amounts to $233 million.

The preliminary purchase price allocation is shown below:

(M$)	At the acquisition date
Goodwill	345
Intangible assets	56
Tangible assets	235
Other assets and liabilities	(58)
Debt net of cash acquired	-
FAIR VALUE OF CONSIDERATION	578

2.3 Divestment projects

Accounting principles

Pursuant to IFRS 5 "Non-current assets held for sale and discontinued operations”, assets and liabilities of affiliates that are held for sale are presented separately on the face of the balance sheet. Depreciation of assets ceases from the date of classification in “Non-current assets held for sale”.

Exploration & Production

- On July 30, 2020, TOTAL announced that its 58% owned affiliate Total Gabon has signed an agreement with Perenco to divest its interests in 7 mature non-operated offshore fields, along with its interests and operatorship in the Cap Lopez oil terminal. The transaction remains subject to approval by the Gabonese authorities.

F-18    TOTAL   Form 20-F 2020

Consolidated Financial Statements
	Notes to the Consolidated Financial Statements
Note 3

- As of December 31, 2020, the assets and liabilities have been respectively classified in the consolidated balance sheet as “assets classified as held for sale” for an amount of $391 million and “liabilities classified as held for sale” for an amount of $150 million. These assets mainly include tangible assets.

Refining & Chemicals

- On July 27, 2020, TOTAL signed an agreement to sell the Lindsey refinery and its associated logistic assets, as well as all the related rights and obligations, to the Prax Group.

- As of December 31, 2020, the assets and liabilities have been respectively classified in the consolidated balance sheet as “assets classified as held for sale” for an amount of $154 million and “liabilities classified as held for sale” for an amount of $238 million.

NOTE 3 Business segment information

Description of the business segments

Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TOTAL and which is reviewed by the main operational decision-making body of the Group, namely the Executive Committee.

The operational profit and assets are broken down by business segment prior to the consolidation and inter-segment adjustments.

Sales prices between business segments approximate market prices.

The profitable growth in the gas and low carbon electricity integrated value chains is one of the key axes of TOTAL’s strategy. In order to give more visibility to these businesses, a new reporting structure for the business segments’ financial information has been put in place, effective January 1, 2019.

The organization of the Group's activities is structured around the 4 followings segments:

- An Exploration & Production segment;

- An Integrated Gas, Renewables & Power segment comprising integrated gas (including LNG) and low carbon electricity businesses. It includes the upstream and midstream LNG activity that was previously reported in the Exploration & Production segment;

- A Refining & Chemicals segment constituting a major industrial hub comprising the activities of refining, petrochemicals and specialty chemicals. This segment also includes the activities of oil Supply, Trading and marine Shipping;

- A Marketing & Services segment including the global activities of supply and marketing in the field of petroleum products;

In addition, the Corporate segment includes holdings operating and financial activities.

Certain figures for the year 2018 have been restated in order to reflect the new organization.

Definition of the indicators

(i)  Operating income (measure used to evaluate operating performance)

Revenue from sales after deducting cost of goods sold and inventory variations, other operating expenses, exploration expenses and depreciation, depletion, and impairment of tangible assets and mineral interests.

Operating income excludes the amortization of intangible assets other than mineral interests, currency translation adjustments and gains or losses on the disposal of assets.

(ii)  Net operating income (measure used to evaluate the return on capital employed)

Operating income after taking into account the amortization of intangible assets other than mineral interests, currency translation adjustments, gains or losses on the disposal of assets, as well as all other income and expenses related to capital employed (dividends from non-consolidated companies, income from equity affiliates, capitalized interest expenses…), and after income taxes applicable to the above.

The only income and expense not included in net operating income but included in net income Group share are interest expenses related to net financial debt, after applicable income taxes (net cost of net debt) and non-controlling interests.

(iii)  Adjusted income

Operating income, net operating income, or net income excluding the effect of adjustment items described below.

(iv)  Capital employed

Non-current assets and working capital, at replacement cost, net of deferred income taxes and non-current liabilities.

(v)  ROACE (Return on Average Capital Employed)

Ratio of adjusted net operating income to average capital employed between the beginning and the end of the period.

Performance indicators excluding the adjustment items, such as adjusted incomes and ROACE are meant to facilitate the analysis of the financial performance and the comparison of income between periods.

Form 20-F 2020   TOTAL    F-19

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Note 3

Adjustment items

Adjustment items include:

(i)  Special items

Due to their unusual nature or particular significance, certain transactions qualified as “special items” are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, transactions such as restructuring costs or assets disposals, which are not considered to be representative of the normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to occur again within the coming years.

(ii)  The inventory valuation effect

The adjusted results of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method. This method is used to assess the segments’ performance and facilitate the comparability of the segments’ performance with those of its main competitors.

In the replacement cost method, which approximates the LIFO (Last-In, First-Out) 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 prices differential between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results according to the FIFO (First-In, First-Out) and the replacement cost methods.

(iii)  Effect of changes in fair value

The effect of changes in fair value presented as adjustment items reflects for certain transactions differences between the internal measure of performance used by TOTAL’s executive committee and the accounting for these transactions under IFRS.

IFRS 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 based on forward prices.

TOTAL, in its trading activities, enters into storage contracts, which future effects are recorded at fair value in the Group’s internal economic performance. IFRS precludes recognition of this fair value effect.

Furthermore, TOTAL enters into derivative instruments to risk manage certain operational contracts or assets. Under IFRS, these derivatives are recorded at fair value while the underlying operational transactions are recorded as they occur. Internal indicators defer the fair value on derivatives to match with the transaction occurrence.

The adjusted results (adjusted operating income, adjusted net operating income, adjusted net income) are defined as replacement cost results, adjusted for special items and the effect of changes in fair value.

A)  Information by business segment

		Integrated
		Gas,
For the year ended December 31, 2020	Exploration &	Renewables	Refining &	Marketing &
(M$)	Production	& Power	Chemicals	Services	Corporate	Intercompany	Total
Non-Group sales	4,973	15,629	56,615	63,451	17	—	140,685
Intersegment sales	18,483	2,003	17,378	357