Exhibit 99.1
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The financial information on pages 1-15 in this exhibit concerning TOTAL S.A. and its subsidiaries and affiliates (collectively, "TOTAL" or the "Group") with respect to the fourth quarter of 2018 and year ended December 31, 2018, has been derived from TOTAL’s unaudited consolidated balance sheets as of December 31, 2018, unaudited statements of income, comprehensive income, cash flow and business segment information for the fourth quarter of 2018 and year ended December 31, 2018 and unaudited consolidated statements of changes in shareholders’ equity for the year ended December 31, 2018 presented on pages 16 to 30 of this exhibit. The following discussion should be read in conjunction with the aforementioned financial statements and with the information, including TOTAL’s audited consolidated financial statements and related notes, provided in TOTAL’s Annual Report on Form 20-F for the year ended December 31, 2017, filed with the Securities and Exchange Commission ("SEC") on March 16, 2018.
A. | KEY FIGURES |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | in millions of dollars | 2018 | 2017 | 2018 vs | |||||||||||||||||
52,495 | 54,717 | 47,351 | +11% | Non-Group sales | 209,363 | 171,493 | +22% | |||||||||||||||||
3,885 | 4,548 | 3,359 | +16% | Adjusted net operating income from business segments(a) | 15,997 | 11,936 | +34% | |||||||||||||||||
2,476 | 2,864 | 1,805 | +37% | • Exploration & Production | 10,210 | 5,985 | +71% | |||||||||||||||||
176 | 272 | 232 | -24% | • Gas, Renewables & Power | 756 | 485 | +56% | |||||||||||||||||
900 | 938 | 886 | +2% | • Refining & Chemicals | 3,379 | 3,790 | -11% | |||||||||||||||||
333 | 474 | 436 | -24% | • Marketing & Services | 1,652 | 1,676 | -1% | |||||||||||||||||
665 | 918 | 657 | +1% | Net income (loss) from equity affiliates | 3,170 | 2,015 | +57% | |||||||||||||||||
0.40 | 1.47 | 0.37 | +8% | Fully-diluted earnings per share ($) | 4.24 | 3.34 | +27% | |||||||||||||||||
2,637 | 2,637 | 2,536 | +4% | Fully-diluted weighted-average shares (millions) | 2,624 | 2,495 | +5% | |||||||||||||||||
1,132 | 3,957 | 1,021 | +11% | Net income (Group share) | 11,446 | 8,631 | +33% | |||||||||||||||||
5,190 | 6,484 | 5,103 | +2% | Investments(b) | 22,185 | 16,896 | +31% | |||||||||||||||||
2,483 | 897 | 1,467 | +69% | Divestments(c) | 7,239 | 5,264 | +38% | |||||||||||||||||
2,708 | 6,208 | 3,638 | -26% | Net investments(d) | 15,568 | 11,636 | +34% | |||||||||||||||||
4,459 | 2,568 | 4,442 | +0% | Organic investments(e) | 12,426 | 14,395 | -14% | |||||||||||||||||
211 | 475 | 107 | x2 | Resource acquisitions | 4,493 | 714 | x6.3 | |||||||||||||||||
10,640 | 5,736 | 8,615 | +24% | Cash flow from operations | 24,703 | 22,319 | +11% | |||||||||||||||||
Of which: | ||||||||||||||||||||||||
6,425 | (1,578 | ) | 2,206 | x3 | •(increase)/decrease in working capital(f) | 769 | 827 | -7% | ||||||||||||||||
(423) | (419) | (278) | +52% | •financial charges | (1,538) | (1,048) | +47% | |||||||||||||||||
____________
(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value. See "Analysis of business segment results" below for further details.
(b) Including acquisitions and increases in non-current loans.
(c) Including divestments and reimbursements of non-current loans.
(d) "Net investments" = gross investments - divestments - repayment of non-current loans - other operations with non-controlling interests.
(e) "Organic investments" = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. See page 13 of this exhibit.
(f) The change in working capital as determined using the replacement cost method was $4,968 million in 4Q18, $(1,352) million in 3Q18, $2,660 million in 4Q17, $174 million in 2018 and $1,184 million in 2017. For information on the replacement cost method, refer to the introduction to "B. Analysis of business segment results". See also "C. Group results — Cash flow".
B. | ANALYSIS OF BUSINESS SEGMENT RESULTS |
The financial information for each business segment is reported on the same basis as that used internally by the chief operating decision-maker in assessing segment performance and the allocation of segment resources. Due to their particular nature or significance, certain transactions qualifying as "special items" are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. In certain instances, certain transactions such as restructuring costs or asset disposals, which are not considered to be representative of the normal course of business, may qualify as special items although they may have occurred in prior years or are likely to recur in following years.
1
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. The inventory valuation effect is the difference between the results under the FIFO and replacement cost methods.
The effect of changes in fair value presented as an adjustment item reflects, for trading inventories and storage contracts, differences between internal measures of performance used by TOTAL’s management and the accounting for these transactions under IFRS, which requires that trading inventories be recorded at their fair value using period-end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories recorded at their fair value based on forward prices. Furthermore, TOTAL, in its trading activities, enters into storage contracts, the future effects of which are recorded at fair value in the Group’s internal economic performance. IFRS, by requiring accounting for storage contracts on an accrual basis, precludes recognition of this fair value effect.
The adjusted business segment results (adjusted operating income and adjusted net operating income) are defined as replacement cost results, adjusted for special items, excluding the effect of changes in fair value. For further information on the adjustments affecting operating income on a segment-by-segment basis, and for a reconciliation of segment figures to figures reported in TOTAL’s interim consolidated financial statements, see pages 24-30 of this exhibit.
The Group measures performance at the segment level on the basis of adjusted net operating income. Net operating income comprises operating income of the relevant segment after deducting the amortization and the depreciation of intangible assets other than leasehold rights, translation adjustments and gains or losses on the sale of assets, as well as all other income and expenses related to capital employed (dividends from non-consolidated companies, income from equity affiliates and capitalized interest expenses) and after income taxes applicable to the above. The income and expenses not included in net operating income that are included in net income are interest expenses related to long-term liabilities net of interest earned on cash and cash equivalents, after applicable income taxes (net cost of net debt and non-controlling interests). Adjusted net operating income excludes the effect of the adjustments (special items and the inventory valuation effect) described above.
As of January 1, 2018, the reporting of the cash flow from operations at the segment level changed due to the transfer of financial charges to the Corporate segment. The Corporate segment includes the Group’s holdings operating and financial activities. As a result of this change in reporting, the 2017 comparative information has been restated at the segment level.
B.1. | Exploration & Production segment |
| Environment — liquids and gas price realizations* |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | hydrocarbon production | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
68.8 | 75.2 | 61.3 | +12% | Brent ($/b) | 71.3 | 54.2 | +32% | |||||||||||||||||||||
57.2 | 69.5 | 57.6 | -1% | Average liquids price ($/b) | 64.2 | 50.2 | +28% | |||||||||||||||||||||
4.94 | 4.96 | 4.23 | +17% | Average gas price ($/Mbtu) | 4.78 | 4.08 | +17% | |||||||||||||||||||||
46.9 | 55.4 | 43.3 | +8% | Average hydrocarbons price ($/boe) | 51.0 | 38.7 | +32% | |||||||||||||||||||||
____________
* Consolidated subsidiaries, excluding fixed margins.
2
| Production |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | Hydrocarbon production | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
2,876 | 2,804 | 2,613 | +10% | Combined production (kboe/d) | 2,775 | 2,566 | +8% | |||||||||||||||||||||
1,589 | 1,611 | 1,389 | +14% | • Liquids (kb/d) | 1,566 | 1,346 | +16% | |||||||||||||||||||||
6,994 | 6,557 | 6,832 | +2% | • Gas (Mcf/d) | 6,599 | 6,662 | -1% | |||||||||||||||||||||
2,876 | 2,804 | 2,613 | +10% | Combined production (kboe/d) | 2,775 | 2,566 | +8% | |||||||||||||||||||||
1,371 | 1,434 | 1,212 | +13% | • Oil (including bitumen) (kb/d) | 1,378 | 1,167 | +18% | |||||||||||||||||||||
1,505 | 1,370 | 1,401 | +7% | • Gas (including Condensates and associated LPG) (kboe/d) | 1,397 | 1,398 | n/a | |||||||||||||||||||||
Hydrocarbon production was 2,876 thousand barrels of oil equivalent per day (kboe/d) in the fourth quarter of 2018, an increase of 10% compared to 2017, due to the following:
• +12% for start-ups and ramp-ups on new projects, notably Yamal LNG, Ichthys, Fort Hills, Kaombo North and Kashagan.
• + 2% portfolio effect. The integration of Maersk Oil, as well as the acquisition of an additional 0.5% of Novatek, were partially offset by the expiration of the Mahakam permit at the end of 2017 and the sales of Visund in Norway and Rabi in Gabon.
• -4% for natural field declines and PSC price effect(1).
For the full-year 2018, hydrocarbon production was 2,775 kboe/d, an increase of more than 8% compared to 2017, due to:
• +9% for start-ups and ramp-ups on new projects, notably Yamal LNG, Moho Nord, Fort Hills, Kashagan, Kaombo Norte and Ichthys.
• +3%portfolio effect. The addition of Maersk Oil, Al Shaheen in Qatar, Waha in Libya, Lapa and Iara in Brazil as well as the acquisition of an additional 0.5% of Novatek were partially offset by the expiration of the Mahakam permit at the end of 2017 and the sales of Visund in Norway and Rabi in Gabon.
• -4% for natural field declines and PSC price effect.
| Results |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | in millions of dollars | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
2,390 | 2,734 | 2,185 | +9% | Non-Group sales | 10,989 | 8,477 | +30% | |||||||||||||||||||||
1,802 | 3,999 | (5 | ) | n/a | Operating income | 12,570 | 2,792 | x4.5 | ||||||||||||||||||||
647 | 829 | 348 | +86% | Net income (loss) from equity affiliates and other | 2,686 | 1,546 | +74% | |||||||||||||||||||||
43.7% | 47.6 | % | 42.8 | % | Effective tax rate* | 46.5% | 41.2% | |||||||||||||||||||||
(771) | (1,975 | ) | (537 | ) | +44% | Tax on net operating income | (6,068) | (2,233 | ) | x2.7 | ||||||||||||||||||
1,678 | 2,853 | (194 | ) | n/a | Net operating income | 9,188 | 2,105 | x4.4 | ||||||||||||||||||||
798 | 11 | 1,999 | -60% | Adjustments affecting net operating income | 1,022 | 3,880 | -74% | |||||||||||||||||||||
2,476 | 2,864 | 1,805 | +37% | Adjusted net operating income** | 10,210 | 5,985 | +71% | |||||||||||||||||||||
706 | 614 | 419 | +68% | • of which income from equity affiliates | 2,341 | 1,542 | +52% | |||||||||||||||||||||
3,635 | 2,796 | 3,490 | +4% | Investments | 15,282 | 12,802 | +19% | |||||||||||||||||||||
1,638 | 563 | 1,334 | +23% | Divestments | 4,952 | 1,918 | x2.6 | |||||||||||||||||||||
3,168 | 1,847 | 3,120 | +2% | Organic investments | 9,186 | 11,310 | -19% | |||||||||||||||||||||
____________
* "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).
** Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit.
____________
(1) The "PSC price effect" refers to the impact of changing hydrocarbon prices on entitlement volumes from production sharing and buyback contracts. For example, as the price of oil or gas increases above certain pre-determined levels, TOTAL’s share of production normally decreases.
3
The Exploration & Production segment’s adjusted net operating income was:
• $2,476 million in the fourth quarter 2018, an increase of 37% compared to the fourth quarter 2017. The Group benefited fully from the increase in hydrocarbon prices and strong production growth.
• $10,210 million for the full-year 2018, an increase of 71% compared to 2017 for the same reasons as above and despite a tax rate that increased in line with the increase in hydrocarbon prices.
The effective tax rate increased from 41.2% in 2017 to 46.5% in 2018, in line with the increase in oil prices.
Technical costs for consolidated subsidiaries, calculated in accordance with ASC 932(2) standards, continued decreasing to $18.9/boe in 2018, including $5.7/boe of Opex, compared to $19.5/boe in 2017, including $5.4/boe of Opex.
Adjusted net operating income for the Exploration & Production segment excludes special items. In the fourth quarter of 2018, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $798 million notably due to the impairment on Ichthys related to the sale of a partial interest by the Group, compared to a positive impact of $1,999 million in the fourth quarter of 2017.
The segment’s cash flow from operating activities excluding financial charges was $6,785 million in the fourth quarter of 2018, an increase of 63% compared to $4,174 million in the fourth quarter of 2017. Operating cash flow excluding the change in working capital at replacement cost(1) and excluding financial charges in the fourth quarter of 2018 was $4,412 million, an increase of 3% compared to $4,263 million in the fourth quarter of 2017, partially offset by the decrease in oil prices in Canada.
For the full-year 2018, the segment’s cash flow from operating activities excluding financial charges was $19,803 million, an increase of 54% compared to $12,821 million for the full-year 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges for the full-year 2018 was $19,374 million, an increase of 31% compared to $14,753 million for the full-year 2017, for the same reason mentioned above. The Exploration & Production segment generated $10.2 billion of operating cash flow before working capital changes less organic investments for the full-year 2018.
____________
(1) FASB Accounting Standards Codification Topic 932, Extractive industries - Oil and Gas.
(2) Operating cash flow excluding the change in working capital at replacement cost provides information on underlying cash flow without the short-term impacts of changes in inventory and other working capital elements at replacement cost. For information on the replacement cost method, refer to the introduction to "B. Analysis of business segment results", above. The reconciliation table for different cash flow figures is set forth under "Cash Flow" on page 13 of this exhibit.
4
B.2. | Gas, Renewables & Power segment |
| Results |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | in millions of dollars | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
3,510 | 5,267 | 4,083 | -14% | Non-Group sales | 16,136 | 12,854 | +26% | |||||||||||||||||||||
130 | 103 | (310 | ) | n/a | Operating income | (140) | (276 | ) | -49% | |||||||||||||||||||
91 | 65 | 51 | +78% | Net income (loss) from equity affiliates and other | 318 | 31 | x10.2 | |||||||||||||||||||||
(106) | (33) | (86 | ) | +23% | Tax on net operating income | (173) | (140 | ) | +24% | |||||||||||||||||||
115 | 135 | (345 | ) | n/a | Net operating income | 5 | (385 | ) | n/a | |||||||||||||||||||
61 | 137 | 577 | -89% | Adjustments affecting net operating income | 751 | 870 | -14% | |||||||||||||||||||||
176 | 272 | 232 | x0.8 | Adjusted net operating income* | 756 | 485 | x1.6 | |||||||||||||||||||||
210 | 3,001 | 306 | -31% | Investments | 3,539 | 797 | x4.4 | |||||||||||||||||||||
319 | 129 | 46 | x6.9 | Divestments | 931 | 73 | x12.8 | |||||||||||||||||||||
210 | 165 | 85 | x2.5 | Organic investments | 511 | 353 | +45% | |||||||||||||||||||||
____________
* Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit.
Adjusted net operating income for the Gas, Renewables & Power segment was $176 million in the fourth quarter 2018, 0.8 times lower than $232 million in the fourth quarter 2017. For the full-year 2018, adjusted net operating income was $756 million, notably thanks to the good performance of LNG and gas/power trading activities, 1.6 times higher than $485 million in the full-year 2017. The acquisitions of Direct Energie and the LNG business of Engie account for the increase in investments to $3.5 billion in the full-year 2018, 4.4 times higher than compared to $797 million in the full-year 2017. The increase in working capital related to the consolidation of the acquisitions of Direct Energie and the LNG business of Engie was mainly responsible for the negative cash flow from operations in the full-year 2018.
Adjusted net operating income for the Gas, Renewables & Power segment excludes special items. In the fourth quarter of 2018, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $61 million compared to a positive impact of $577 million in the fourth quarter of 2017.
The segment’s cash flow from operating activities excluding financial charges was $(41) million in the fourth quarter of 2018, compared to $667 million in the fourth quarter of 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges was $116 million in the fourth quarter of 2018, 4.6 times higher than compared to $25 million in the fourth quarter of 2017.
For the full-year 2018, the segment’s cash flow from operating activities excluding financial charges was $(670) million compared to $1,055 million for the full-year 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges was $513 million for the full-year 2018, an increase of 74% compared to $294 million for the full-year 2017.
B.3. | Refining & Chemicals segment |
| Refinery throughput and utilization rates* |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | 2018 | 2017 | 2018 vs | ||||||||||||||||||||||
1,886 | 1,953 | 1,842 | +2% | Total refinery throughput (kb/d) | 1,852 | 1,827 | +1% | |||||||||||||||||||||
591 | 654 | 648 | -9% | • France | 610 | 624 | -2% | |||||||||||||||||||||
809 | 795 | 784 | +3% | • Rest of Europe | 755 | 767 | -2% | |||||||||||||||||||||
486 | 504 | 410 | +19% | • Rest of world | 487 | 436 | +12% | |||||||||||||||||||||
90% | 92% | 91% | Utilization rates based on crude only** | 88% | 88% | |||||||||||||||||||||||
____________
* Includes share of TotalErg, and African refineries reported in the Marketing & Services segment.
** Based on distillation capacity at the beginning of the year.
5
Refinery throughput:
• increased by 2% in the fourth quarter 2018 compared to the fourth quarter 2017, as a result of the good availability of the units and their high utilization rate.
• was stable in full-year 2018 compared to full-year 2017. Lower throughput in Europe linked to planned maintenance, notably at Antwerp during the second quarter, was offset by higher throughput outside Europe.
| Results |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | in millions of dollars | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
29.1 | 39.9 | 35.5 | -18% | European refining margin indicator - ERMI ($/t) | 32.3 | 40.9 | -21% | |||||||||||||||||||||
23,365 | 23,572 | 20,661 | +13% | Non-Group sales | 92,025 | 75,505 | +22% | |||||||||||||||||||||
(534) | 1,142 | 1,248 | n/a | Operating income | 2,513 | 4,170 | -40% | |||||||||||||||||||||
144 | 221 | 199 | -28% | Net income (loss) from equity affiliates and other | 782 | 2,979 | -74% | |||||||||||||||||||||
230 | (292 | ) | (67 | ) | n/a | Tax on net operating income | (445) | (944 | ) | -53% | ||||||||||||||||||
(160) | 1,071 | 1,380 | n/a | Net operating income | 2,850 | 6,205 | -54% | |||||||||||||||||||||
1,060 | (133 | ) | (494 | ) | n/a | Adjustments affecting net operating income | 529 | (2,415 | ) | n/a | ||||||||||||||||||
900 | 938 | 886 | +2% | Adjusted net operating income* | 3,379 | 3,790 | -11% | |||||||||||||||||||||
668 | 377 | 710 | -6% | Investments | 1,781 | 1,734 | +3% | |||||||||||||||||||||
482 | 88 | 36 | x13.4 | Divestments | 919 | 2,820 | -67% | |||||||||||||||||||||
615 | 295 | 684 | -10% | Organic investments | 1,604 | 1,625 | -1% | |||||||||||||||||||||
____________
* Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit.
The Group’s European refining margin indicator ("ERMI") was $29.1/t in the fourth quarter 2018, a decrease of 18% compared to the fourth quarter 2017, and $32.3/t for the full-year 2018, a decrease of 21%, mainly due to rising crude oil prices. The petrochemicals environment remained favorable in the fourth quarter 2018; although margins in Europe were lower than last year, affected by the higher price of raw materials.
In this context, the Refining & Chemicals segment’s adjusted net operating income was resilient:
• $900 million in the fourth quarter 2018, an increase of 2% compared to the fourth quarter 2017; and
• $3,379 million for the full-year 2018, a decrease of 11% compared to the full-year 2017.
Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. In the fourth quarter of 2018, the exclusion of the inventory valuation effect had a positive impact on the segment’s adjusted net operating income of $963 million compared to a negative impact of $354 million in the fourth quarter of 2017. The exclusion of special items in the fourth quarter of 2018 had a positive impact on the segment’s adjusted net operating income of $97 million compared to a negative impact of $140 million in the fourth quarter of 2017.
The segment’s cash flow from operating activities excluding financial charges was $3,080 million in the fourth quarter of 2018, an increase of 2% compared to $3,030 million in the fourth quarter of 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges in the fourth quarter of 2018 was $1,276 million, an increase of 12% compared to $1,142 million in the fourth quarter of 2017.
For the full-year 2018, the segment’s cash flow from operating activities excluding financial charges was $4,308 million, a decrease of 42% compared to $7,411 million for the full-year 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges was $4,388 million for the full-year 2018, a decrease of 7% compared to $4,728 million for the full-year 2017.
6
B.4. | Marketing & Services segment |
| Petroleum product sales |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | sales in kb/d* | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
1,786 | 1,818 | 1,821 | -2% | Total Marketing & Services sales | 1,801 | 1,779 | +1% | |||||||||||||||||||||
986 | 1,024 | 1,046 | -6% | • Europe | 1,001 | 1,049 | -5% | |||||||||||||||||||||
800 | 794 | 775 | +3% | • Rest of world | 800 | 730 | +10% | |||||||||||||||||||||
____________
* Excludes trading and bulk refining sales (see page 12 of this exhibit); includes share of TotalErg.
Petroleum product sales increased by 1% in the full-year 2018 compared to the full-year 2017. The sale of TotalErg in Italy was offset by higher sales in the rest of the world.
| Results |
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | in millions of dollars | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
23,226 | 23,144 | 20,419 | +14% | Non-Group sales | 90,206 | 74,634 | +21% | |||||||||||||||||||||
253 | 569 | 511 | -50% | Operating income | 1,841 | 1,819 | +1% | |||||||||||||||||||||
5 | 109 | 76 | -93% | Net income (loss) from equity affiliates and other items | 307 | 497 | -38% | |||||||||||||||||||||
(69) | (166 | ) | (157 | ) | -56% | Tax on net operating income | (532) | (561 | ) | -5% | ||||||||||||||||||
189 | 512 | 430 | -56% | Net operating income | 1,616 | 1,755 | -8% | |||||||||||||||||||||
144 | (38 | ) | 6 | x24 | Adjustments affecting net operating income | 36 | (79 | ) | n/a | |||||||||||||||||||
333 | 474 | 436 | -24% | Adjusted net operating income* | 1,652 | 1,676 | -1% | |||||||||||||||||||||
627 | 293 | 570 | +10% | Investments | 1,458 | 1,457 | n/a | |||||||||||||||||||||
38 | 117 | 45 | -16% | Divestments | 428 | 413 | +4% | |||||||||||||||||||||
424 | 245 | 533 | -20% | Organic investments | 1,010 | 1,019 | -1% | |||||||||||||||||||||
____________
* Detail of adjustment items shown in the business segment information starting on page 24 of this exhibit.
The Marketing & Services segment’s adjusted net operating income was $333 million in the fourth quarter of 2018, a decrease of 24% compared to the fourth quarter of 2017, and $1,652 million for the full-year 2018, a decrease of 1% compared to the full-year 2017.
Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. In the fourth quarter of 2018, the exclusion of the inventory valuation effect had a positive impact on the segment’s adjusted net operating income of $113 million compared to a negative impact on the segment’s adjusted net operating income of $11 million. The exclusion of special items in the fourth quarter of 2018 had a positive impact on the segment’s adjusted net operating income of $31 million compared to a positive impact of $17 million in the fourth quarter of 2017.
The segment’s cash flow from operating activities excluding financial charges was $1,226 million in the fourth quarter of 2018, an increase of 21% compared to $1,015 million in the fourth quarter of 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges in the fourth quarter of 2018 was $500 million, a decrease of 22% compared to $644 million in the fourth quarter of 2017.
For the full-year 2018, the segment’s cash flow from operating activities excluding financial charges was $2,759 million, an increase of 24% compared to $2,221 million for the full-year 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges for the full-year 2018 was $2,156 million, a decrease of 4% compared to $2,242 million for the full-year 2017.
7
C. | GROUP RESULTS |
| Net income (Group share) |
Net income (Group share) was $1,132 million in the fourth quarter of 2018, an increase of 11% compared to $1,021 million in the fourth quarter of 2017. It was $11,446 million for the full-year 2018 compared to $8,631 million in 2017, an increase of 33%.
In line with the contribution from the segments, adjusted net income was:
• $3,164 million in the fourth quarter 2018, a 10% increase compared to the fourth quarter 2017.
• $13,559 million for the full-year 2018, a 28% increase compared to full-year 2017.
Adjusted net income excludes the after-tax inventory effect, special items and the impact of changes in fair value.(1)
Total adjustments affecting net income(2) were:
• $-2,032 million in the fourth quarter 2018, mainly due to a $1.1 billion inventory effect linked to the decrease in oil prices and notably an impairment on Ichthys related to the sale of a partial interest by the Group.
• $-2,113 million for the full-year 2018 for the reasons above as well as the impairment of production facilities by SunPower.
Fully-diluted earnings per share and share buyback
In the context of the shareholder return policy announced in February 2018, the Group has bought back shares since then, including:
• on the one hand, the buyback of shares issued in 2018 under scrip dividend option in order to cancel any dilution related to the exercise of this option: 21.6 million shares repurchased in the fourth quarter 2018 and 47.2 million shares in 2018.
• on the other hand, the buyback of additional shares: 8.6 million shares repurchased in the fourth quarter 2018 for $500 million and 24.7 million shares in 2018 for $1.5 billion.
• on December 31, 2018, the number of fully-diluted shares was 2,623 million.
| Divestments — acquisitions |
Asset sales completed were:
• $2,101 million in the fourth quarter 2018, comprised mainly 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.
• $5,172 million for the full-year 2018, comprised mainly of the elements mentioned above 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 in which TOTAL holds 50%.
Acquisitions completed were:
• $350 million in the fourth quarter 2018, comprised mainly of the extension of licenses in Nigeria and the acquisition of a network of service stations in Brazil.
• $8,314 million for the full-year in 2018, comprised of the elements above as well as notably the acquisitions of Direct Energie, 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 and the acquisition of offshore assets from Cobalt in the Gulf of Mexico.
____________
(1) Details shown on page 13 of this exhibit.
(2) Details shown on pages 13, 24, 29 and 30 of this exhibit.
8
| Cash flow |
The Group’s cash flow from operating activities in the fourth quarter of 2018 was $10,640 million, an increase of 24% compared to $8,615 million in the fourth quarter of 2017. The change in working capital at replacement cost in the fourth quarter of 2018, which is the (increase)/decrease in working capital of $(6,425) million as determined in accordance with IFRS adjusted for the pre-tax inventory valuation effect of $(1,457) million, was $4,968 million compared to $2,660 million in the fourth quarter of 2017. Operating cash flow excluding the change in working capital at replacement cost in the fourth quarter of 2018 was $5,672 million, a decrease of 5% compared to $5,955 million in the fourth quarter of 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges in the fourth quarter of 2018 was $6,095 million, a decrease of 2% compared to $6,233 million in the fourth quarter of 2017.The Group’s net cash flow(1) was $2,964 million in the fourth quarter of 2018 compared to $2,317 million in the fourth quarter of 2017, notably as a result of the $930 million decrease in net investments.
For the full-year 2018, the Group’s cash flow from operating activities was $24,703 million, an increase of 11% compared to $22,319 million for the full-year 2017. The change in working capital at replacement cost for the full-year 2018, which is the (increase)/decrease in working capital of $769 million as determined in accordance with IFRS adjusted for the pre-tax inventory valuation effect of $(595) million, was $174 million compared to $1,184 million for the full-year 2017. Operating cash flow excluding the change in working capital at replacement cost for the full year 2018 was $24,529 million, an increase of 16% compared to $21,135 million for the full-year 2017. Operating cash flow excluding the change in working capital at replacement cost and excluding financial charges for the full-year 2018 was $26,067 million, an increase of 18% compared to $22,183 million for the full-year 2017. The Group’s net cash flow was $8,961 million for the full-year 2018 compared to $9,499 million for the full-year 2017, partially offset by a $3,394 million increase in operating cash flow before changes in working capital.
D. | PROFITABILITY |
Return on equity for the twelve months ended December 31, 2018, was 12.2%, an increase compared to the full-year 2017.
in millions of dollars | 01/01/2018 - | 10/01/2017 - | 01/01/2017 - | |||||||||
Adjusted net income | 13,964 | 13,679 | 10,762 | |||||||||
Average adjusted shareholders’ equity | 114,183 | 114,729 | 106,078 | |||||||||
Return on equity (ROE) | 12.2 | % | 11.9 | % | 10.1 | % | ||||||
Return on average capital employed increased to 11.8% in 2018 from 9.4% for the full-year 2017.
in millions of dollars | 01/01/2018 - | 10/01/2017 - | 01/01/2017 - | |||||||||
Adjusted net income | 15,691 | 15,295 | 11,958 | |||||||||
Average capital employed | 133,123 | 138,242 | 127,575 | |||||||||
ROACE | 11.8 | % | 11.1 | % | 9.4 | % | ||||||
E. | 2019 SENSITIVITIES * |
Scenario retained | Change | Estimated impact on | Estimated impact on | |||||
Dollar | $1.2/€ | +/- $0.1 per € | -/+ $0.1 B | ~ $0 B | ||||
Average Liquids Price | $60/b** | +/- $10/b | +/- $2.7 B | +/- $3.2 B | ||||
European refining margin indicator (ERMI) | $35/t | +/- $10/t | +/- $0.5 B | +/- $0.6 B |
____________
* Sensitivities are revised once per year upon publication of the previous year’s fourth quarter results. Sensitivities are estimates based on assumptions about the Group’s portfolio in 2018. Actual results could vary significantly from estimates based on the application of these sensitivities. The impact of the $-€ sensitivity on adjusted net operating income is essentially attributable to Refining & Chemicals.
** Based on a $60/b Brent environment.
____________
(1) "Net cash flow" = operating cash flow before working capital changes - net investments (including other transactions with non-controlling interests).
9
F. | SUMMARY AND OUTLOOK |
Since the start of 2019, Brent has traded around $60/b in a context of oil supply and demand near the record-high level of 100 Mb/d. In a volatile environment, the Group is pursuing its strategy for integrated growth along the oil, gas and low-carbon electricity chains.
The Group has clear visibility on its 2019 cash flow, supported by the strong contribution of project start-ups in 2018 and recent acquisitions.
The Group maintains financial discipline to reduce its breakeven to remain profitable across a broader range of environments. In particular, it is targeting cost reductions of $4.7 billion, projected net investments of $15-16 billion in 2019, and an Opex target of $5.5/boe.
In Exploration & Production, production is expected to grow by more than 9% in 2019, thanks to the ramp-ups of Kaombo North, Egina and Ichthys plus the start-ups of Iara 1 in Brazil, Kaombo South in Angola, Culzean in the UK and Johan Sverdrup in Norway. Determined to take advantage of the favorable cost environment, the Group plans to launch projects in 2019, notably including Mero 2 in Brazil, Tilenga and Kingfisher in Uganda and Arctic LNG 2 in Russia.
The Group is pursuing its strategy for profitable growth along the integrated gas and low-carbon electricity chains. Effective 2019, the Group will report the new iGRP segment (integrated Gas, Renewables & Power) which combines the Gas, Renewables & Power segment with the upstream gas and LNG activities currently reported within the Exploration & Production segment.
Affected by an abundance of available products, European refining margins have been very volatile since the start of the year. In 2019, the Downstream will continue to rely on its diversified portfolio, notably its integrated Refining & Chemical platforms in the U.S. and Asia-Middle East as well as its non-cyclical Marketing & Services segment.
In this context, the Group is continuing to implement its shareholder return policy announced in February 2018, by increasing the dividend in 2019 by 3.1%, in line with the objective to increase the dividend by 10% over the 2018-20 period. Taking into account its strong financial position, the Group will eliminate the scrip dividend option from June 2019. Within the framework of its program to buy back $5 billion of shares over the 2018-20 period, the Group expects to buy back $1.5 billion of its shares in 2019 in a $60/b Brent environment.
10
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of the management of TOTAL and on the information currently available to such management. Forward-looking statements include information concerning forecasts, projections, anticipated synergies, and other information concerning possible or assumed future results of TOTAL, and may be preceded by, followed by, or otherwise include the words "believes", "expects", "anticipates", "intends", "plans", "targets", "estimates" or similar expressions.
Forward-looking statements are not assurances of results or values. They involve risks, uncertainties and assumptions. TOTAL’s future results and share value may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond TOTAL’s ability to control or predict. Except for its ongoing obligations to disclose material information as required by applicable securities laws, TOTAL does not have any intention or obligation to update forward-looking statements after the distribution of this document, even if new information, future events or other circumstances have made them incorrect or misleading.
You should understand that various factors, certain of which are discussed elsewhere in this document and in the documents referred to in, or incorporated by reference into, this document, could affect the future results of TOTAL and could cause results to differ materially from those expressed in such forward-looking statements, including:
• material adverse changes in general economic conditions or in the markets served by TOTAL, including changes in the prices of oil, natural gas, refined products, petrochemical products and other chemicals;
• changes in currency exchange rates and currency devaluations;
• the success and the economic efficiency of oil and natural gas exploration, development and production programs, including without limitation, those that are not controlled and/or operated by TOTAL;
• uncertainties about estimates of changes in proven and potential reserves and the capabilities of production facilities;
• uncertainties about the ability to control unit costs in exploration, production, refining and marketing (including refining margins) and chemicals;
• changes in the current capital expenditure plans of TOTAL;
• the ability of TOTAL to realize anticipated cost savings, synergies and operating efficiencies;
• the financial resources of competitors;
• changes in laws and regulations, including tax and environmental laws and industrial safety regulations;
• the quality of future opportunities that may be presented to or pursued by TOTAL;
• the ability to generate cash flow or obtain financing to fund growth and the cost of such financing and liquidity conditions in the capital markets generally;
• the ability to obtain governmental or regulatory approvals;
• the ability to respond to challenges in international markets, including political or economic conditions, including international armed conflict, and trade and regulatory matters;
• the ability to complete and integrate appropriate acquisitions, strategic alliances and joint ventures;
• changes in the political environment that adversely affect exploration, production licenses and contractual rights or impose minimum drilling obligations, price controls, nationalization or expropriation, and regulation of refining and marketing, chemicals and power generating activities;
• the possibility that other unpredictable events such as labor disputes or industrial accidents will adversely affect the business of TOTAL; and
• the risk that TOTAL will inadequately hedge the price of crude oil or finished products.
For additional factors, you should read the information set forth under "Item 3. -3.2 Risk Factors", "Item 4. Information on the Company", "Item 5. Operating and Financial Review and Prospects" and "Item 11. Quantitative and Qualitative Disclosures about Market Risk" in TOTAL’s Form 20-F for the year ended December 31, 2017.
11
OPERATING INFORMATION BY SEGMENT
• Exploration & Production
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | Combined liquids and gas production by region (kboe/d) | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
997 | 910 | 764 | +30% | Europe and Central Asia | 909 | 761 | +19% | |||||||||||||||||||||
661 | 676 | 659 | n/a | Africa | 670 | 654 | +3% | |||||||||||||||||||||
655 | 687 | 595 | +10% | Middle East and North Africa | 666 | 559 | +19% | |||||||||||||||||||||
386 | 399 | 356 | +8% | Americas | 389 | 348 | +12% | |||||||||||||||||||||
176 | 132 | 239 | -26% | Asia-Pacific | 141 | 244 | -42% | |||||||||||||||||||||
2,876 | 2,804 | 2,613 | +10% | Total production | 2,775 | 2,566 | +8% | |||||||||||||||||||||
699 | 645 | 656 | +7% | • Including equity affiliates | 671 | 639 | +5% | |||||||||||||||||||||
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | Liquids production by region (kb/d) | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
363 | 341 | 265 | +37% | Europe and Central Asia | 334 | 265 | +26% | |||||||||||||||||||||
509 | 528 | 501 | +2% | Africa | 513 | 502 | +2% | |||||||||||||||||||||
503 | 538 | 457 | +10% | Middle East and North Africa | 520 | 419 | +24% | |||||||||||||||||||||
191 | 186 | 137 | +40% | Americas | 183 | 132 | +39% | |||||||||||||||||||||
22 | 18 | 29 | -24% | Asia-Pacific | 16 | 28 | -43% | |||||||||||||||||||||
1,589 | 1,611 | 1,389 | +14% | Total production | 1,566 | 1,346 | +16% | |||||||||||||||||||||
231 | 221 | 311 | -26% | • Including equity affiliates | 247 | 283 | -13% | |||||||||||||||||||||
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | Gas production by region (Mcf/d) | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
3,416 | 3,069 | 2,657 | +29% | Europe and Central Asia | 3,100 | 2,672 | +16% | |||||||||||||||||||||
738 | 776 | 980 | -25% | Africa | 785 | 759 | +3% | |||||||||||||||||||||
843 | 830 | 759 | +11% | Middle East and North Africa | 806 | 772 | +4% | |||||||||||||||||||||
1,094 | 1,198 | 1,225 | -11% | Americas | 1,160 | 1,212 | -4% | |||||||||||||||||||||
903 | 684 | 1,211 | -25% | Asia-Pacific | 748 | 1,247 | -40% | |||||||||||||||||||||
6,994 | 6,557 | 6,832 | +2% | Total production | 6,599 | 6,662 | -1% | |||||||||||||||||||||
2,524 | 2,313 | 2,022 | +25% | • Including equity affiliates | 2,281 | 1,916 | +19% | |||||||||||||||||||||
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | Liquefied natural gas | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
3.32 | 2.78 | 2.67 | +24% | LNG sales* (Mt) | 11.07 | 11.23 | -1% | |||||||||||||||||||||
____________
* Sales, Group share, excluding trading; 2017 data restated to reflect volume estimates for Bontang LNG in Indonesia based on the 2017 SEC coefficient.
• Downstream (Refining & Chemicals and Marketing & Services)
4Q18 | 3Q18 | 4Q17* | 4Q18 vs | Petroleum product sales by region (kb/d)** | 2018 | 2017* | 2018 vs | |||||||||||||||||||||
2,062 | 2,030 | 2,000 | +3% | Europe | 1,984 | 2,086 | -5% | |||||||||||||||||||||
778 | 760 | 639 | +22% | Africa | 736 | 615 | +20% | |||||||||||||||||||||
767 | 979 | 476 | +61% | Americas | 827 | 561 | +47% | |||||||||||||||||||||
531 | 569 | 727 | -27% | Rest of world | 606 | 757 | -20% | |||||||||||||||||||||
4,138 | 4,338 | 3,842 | +8% | Total consolidated sales | 4,153 | 4,019 | +3% | |||||||||||||||||||||
593 | 581 | 587 | +1% | • Including bulk sales | 575 | 581 | -1% | |||||||||||||||||||||
1,759 | 1,939 | 1,434 | +23% | • Including trading | 1,777 | 1,659 | +7% | |||||||||||||||||||||
____________
* 2017 data restated.
** Includes share of TotalErg.
12
ADJUSTMENT ITEMS
• Adjustments to net income (Group share)
4Q18 | 3Q18 | 4Q17 | in millions of dollars | 2018 | 2017 | |||||||||||||||
(1,026) | (152) | (2,218 | ) | Special items affecting net income (Group share) | (1,731) | (2,213 | ) | |||||||||||||
(2) | 89 | 188 | • Gain (loss) on asset sales | (16) | 2,452 | |||||||||||||||
(32) | (39) | (5 | ) | • Restructuring charges | (138) | (66 | ) | |||||||||||||
(1,259) | (88) | (2,060 | ) | • Impairments | (1,595) | (3,884 | ) | |||||||||||||
267 | (114) | (341 | ) | • Other | 18 | (715 | ) | |||||||||||||
(1,052) | 160 | 354 | After-tax inventory effect: FIFO vs. replacement cost | (420) | 282 | |||||||||||||||
46 | (9) | 13 | Effect of changes in fair value | 38 | (16 | ) | ||||||||||||||
(2,032) | (1) | (1,851 | ) | Total adjustments affecting net income | (2,113) | (1,947 | ) | |||||||||||||
INVESTMENTS — DIVESTMENTS
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | in millions of dollars | 2018 | 2017 | 2018 vs | |||||||||||||||||||||
4,459 | 2,568 | 4,442 | n/a | Organic investments (a) | 12,426 | 14,395 | -14% | |||||||||||||||||||||
306 | 156 | 181 | +69% | • Capitalized exploration | 711 | 619 | +15% | |||||||||||||||||||||
160 | 147 | 207 | -23% | • Increase in non-current loans | 618 | 961 | -36% | |||||||||||||||||||||
(382) | (688) | (348 | ) | x1.1 | • Repayment of non-current loans | (2,067) | (1,025 | ) | x2 | |||||||||||||||||||
350 | 3,228 | 313 | x1.1 | Acquisitions (b) | 7,692 | 1,476 | x5.2 | |||||||||||||||||||||
2,101 | 209 | 1,119 | +88% | Asset sales (c) | 5,172 | 4,239 | +22% | |||||||||||||||||||||
(1) | (621) | (2) | -50% | Other transactions with non-controlling interests (d) | (622) | (4 | ) | n/a | ||||||||||||||||||||
2,708 | 6,208 | 3,638 | -26% | Net investments (a + b - c - d) | 15,568 | 11,636 | +34% | |||||||||||||||||||||
CASH FLOW
4Q18 | 3Q18 | 4Q17 | 4Q18 vs | in millions of dollars | 12M18 | 12M17 | 12M18 vs | |||||||||||||||||||||
6,095 | 7,507 | 6,233 | -2% | Operating cash flow before working capital changes w/o financial charges (DACF)(1) | 26,067 | 22,183 | +18% | |||||||||||||||||||||
(423) | (419) | (278) | +52% | • Financial charges | (1,538) | (1,048) | +47% | |||||||||||||||||||||
5,672 | 7,088 | 5,995 | -5% | Operating cash flow before working capital changes (a) | 24,529 | 21,135 | +16% | |||||||||||||||||||||
6,425 | (1,578) | 2,206 | n/a | • (Increase) decrease in working capital | 769 | 827 | -7% | |||||||||||||||||||||
(1,457) | 226 | 454 | n/a | • Inventory effect | (595) | 357 | n/a | |||||||||||||||||||||
10,640 | 5,736 | 8,615 | +24% | Cash flow from operations | 24,703 | 22,319 | +11% | |||||||||||||||||||||
4,459 | 2,568 | 4,442 | n/a | Organic investments (b) | 12,426 | 14,395 | -14% | |||||||||||||||||||||
1,213 | 4,520 | 1,513 | -20% | Free cash flow after organic investments, w/o net asset sales (a-b) | 12,103 | 6,740 | x1.8 | |||||||||||||||||||||
2,708 | 6,208 | 3,638 | -26% | Net investments (c) | 15,568 | 11,636 | +34% | |||||||||||||||||||||
2,964 | 880 | 2,317 | +28% | Net cash flow (a-c) | 8,961 | 9,499 | -6% | |||||||||||||||||||||
____________
(1) DACF= debt adjusted cash flow, is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges.
13
GEARING RATIO
in millions of dollars | 12/31/2018 | 09/30/2018 | 12/31/2017 | |||||||||
Current borrowings | 13,306 | 15,180 | 11,096 | |||||||||
Net current financial assets | (3,176) | (2,884) | (3,148) | |||||||||
Net financial assets classified as held for sale | (15) | (14) | 0 | |||||||||
Non-current financial debt | 40,129 | 41,088 | 41,430 | |||||||||
Hedging instruments of non-current debt | (680) | (1,129) | (679) | |||||||||
Cash and cash equivalents | (27,907) | (25,252) | (33,185) | |||||||||
Net debt (a) | 21,657 | 26,989 | 15,424 | |||||||||
Shareholders’ equity - Group share | 115,640 | 118,193 | 111,556 | |||||||||
Non-controlling interests | 2,474 | 2,430 | 2,481 | |||||||||
Shareholders’ equity (b) | 118,114 | 120,623 | 114,037 | |||||||||
Net-debt-to-capital ratio = a/(a+b) | 15.5% | 18.3% | 11.9% | |||||||||
RETURN ON AVERAGE CAPITAL EMPLOYED
• Full-year 2018
in millions of dollars | Exploration & | Gas, Renewables | Refining & | Marketing | ||||||||||||
Adjusted net operating income | 10,210 | 756 | 3,379 | 1,652 | ||||||||||||
Capital employed at 12/31/2017* | 107,921 | 4,692 | 11,045 | 6,929 | ||||||||||||
Capital employed at 12/31/2018* | 114,885 | 9,261 | 10,599 | 6,442 | ||||||||||||
ROACE | 9.2 | % | 10.8 | % | 31.2 | % | 24.7 | % | ||||||||
• Twelve months ended September 30, 2018
in millions of dollars | Exploration & | Gas, Renewables | Refining & | Marketing | ||||||||||||
Adjusted net operating income | 9,539 | 812 | 3,365 | 1,755 | ||||||||||||
Capital employed at 09/30/2017* | 110,114 | 5,388 | 11,919 | 6,871 | ||||||||||||
Capital employed at 09/30/2018* | 118,820 | 9,871 | 12,884 | 6,841 | ||||||||||||
ROACE | 8.3 | % | 10.6 | % | 27.1 | % | 25.6 | % | ||||||||
• Full-year 2017
in millions of dollars | Exploration & | Gas, Renewables | Refining & | Marketing | ||||||||||||
Adjusted net operating income | 5,985 | 485 | 3,790 | 1,676 | ||||||||||||
Capital employed at 12/31/2016* | 107,617 | 4,976 | 11,618 | 5,884 | ||||||||||||
Capital employed at 12/31/2017* | 107,921 | 4,692 | 11,045 | 6,929 | ||||||||||||
ROACE | 5.6 | % | 10.0 | % | 33.4 | % | 26.2 | % | ||||||||
____________
* At replacement cost (excluding after-tax inventory effect).
14
MAIN INDICATORS
Chart updated around the middle of the month following the end of each quarter.
€/$ | Brent ($/b) | Average liquids | Average gas | ERMI** ($/t)*** | ||||||||||||||||
Fourth quarter 2018 | 1.14 | 68.8 | 57.2 | 4.94 | 29.1 | |||||||||||||||
Third quarter 2018 | 1.16 | 75.2 | 69.5 | 4.96 | 39.9 | |||||||||||||||
Second quarter 2018 | 1.19 | 74.4 | 69.5 | 4.49 | 34.7 | |||||||||||||||
First quarter 2018 | 1.23 | 66.8 | 60.4 | 4.73 | 25.6 | |||||||||||||||
Fourth quarter 2017 | 1.18 | 61.3 | 57.6 | 4.23 | 35.5 | |||||||||||||||
____________
* Consolidated subsidiaries, excluding fixed margin contracts, including hydrocarbon production overlifting/underlifting position valued at market price.
** The European refining margin indicator ("ERMI") is a Group indicator intended to represent the margin after variable costs for a hypothetical complex refinery located around Rotterdam in Northern Europe that processes a mix of crude oil and other inputs commonly supplied to this region to produce and market the main refined products at prevailing prices in this region. The indicator margin may not be representative of the actual margins achieved by the Group in any period because of the Group’s particular refinery configurations, product mix effects or other company-specific operating conditions.
*** $1/t = $0.136/b.
Disclaimer: data is based on TOTAL’s reporting, is not audited and is subject to change.
15
CONSOLIDATED STATEMENT OF INCOME | |||
TOTAL | |||
(unaudited) | |||
(M$) (a) | 4th quarter | 3rd quarter | 4th quarter |
Sales | 52,495 | 54,717 | 47,351 |
Excise taxes | (6,183) | (6,317) | (5,909) |
Revenues from sales | 46,312 | 48,400 | 41,442 |
Purchases, net of inventory variation | (33,420) | (32,351) | (27,659) |
Other operating expenses | (6,913) | (6,873) | (6,586) |
Exploration costs | (201) | (234) | (287) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (4,362) | (3,279) | (5,691) |
Other income | 482 | 581 | 512 |
Other expense | (315) | (355) | (570) |
Financial interest on debt | (529) | (536) | (352) |
Financial income and expense from cash & cash equivalents | (30) | (63) | (45) |
Cost of net debt | (559) | (599) | (397) |
Other financial income | 269 | 290 | 240 |
Other financial expense | (185) | (171) | (159) |
Net income (loss) from equity affiliates | 665 | 918 | 657 |
Income taxes | (593) | (2,240) | (772) |
Consolidated net income | 1,180 | 4,087 | 730 |
Group share | 1,132 | 3,957 | 1,021 |
Non-controlling interests | 48 | 130 | (291) |
Earnings per share ($) | 0.40 | 1.48 | 0.37 |
Fully-diluted earnings per share ($) | 0.40 | 1.47 | 0.37 |
(a) Except for per share amounts. | |||
16
17
18
19
CONSOLIDATED BALANCE SHEET | |||
TOTAL | |||
(M$) | December 31, 2018 | September 30, 2018 | December 31, 2017 |
ASSETS | |||
Non-current assets | |||
Intangible assets, net | 28,922 | 27,356 | 14,587 |
Property, plant and equipment, net | 113,324 | 115,136 | 109,397 |
Equity affiliates : investments and loans | 23,444 | 23,402 | 22,103 |
Other investments | 1,421 | 1,602 | 1,727 |
Non-current financial assets | 680 | 1,129 | 679 |
Deferred income taxes | 6,663 | 5,186 | 5,206 |
Other non-current assets | 2,509 | 3,167 | 3,984 |
Total non-current assets | 176,963 | 176,978 | 157,683 |
Current assets | |||
Inventories, net | 14,880 | 19,689 | 16,520 |
Accounts receivable, net | 17,270 | 20,010 | 14,893 |
Other current assets | 14,724 | 18,613 | 14,210 |
Current financial assets | 3,654 | 3,553 | 3,393 |
Cash and cash equivalents | 27,907 | 25,252 | 33,185 |
Assets classified as held for sale | 1,364 | 207 | 2,747 |
Total current assets | 79,799 | 87,324 | 84,948 |
Total assets | 256,762 | 264,302 | 242,631 |
LIABILITIES & SHAREHOLDERS' EQUITY | |||
Shareholders' equity | |||
Common shares | 8,227 | 8,304 | 7,882 |
Paid-in surplus and retained earnings | 120,569 | 123,167 | 112,040 |
Currency translation adjustment | (11,313) | (10,321) | (7,908) |
Treasury shares | (1,843) | (2,957) | (458) |
Total shareholders' equity - Group share | 115,640 | 118,193 | 111,556 |
Non-controlling interests | 2,474 | 2,430 | 2,481 |
Total shareholders' equity | 118,114 | 120,623 | 114,037 |
Non-current liabilities | |||
Deferred income taxes | 11,490 | 12,138 | 10,828 |
Employee benefits | 3,363 | 3,308 | 3,735 |
Provisions and other non-current liabilities | 21,432 | 18,740 | 15,986 |
Non-current financial debt | 40,129 | 41,088 | 41,340 |
Total non-current liabilities | 76,414 | 75,274 | 71,889 |
Current liabilities | |||
Accounts payable | 26,134 | 28,100 | 26,479 |
Other creditors and accrued liabilities | 22,246 | 24,429 | 17,779 |
Current borrowings | 13,306 | 15,180 | 11,096 |
Other current financial liabilities | 478 | 669 | 245 |
Liabilities directly associated with the assets classified as held for sale | 70 | 27 | 1,106 |
Total current liabilities | 62,234 | 68,405 | 56,705 |
Total liabilities & shareholders' equity | 256,762 | 264,302 | 242,631 |
20
CONSOLIDATED STATEMENT OF CASH FLOW | |||
TOTAL | |||
(unaudited) | |||
(M$) | 4th quarter | 3rd quarter | 4th quarter |
CASH FLOW FROM OPERATING ACTIVITIES | |||
Consolidated net income | 1,180 | 4,087 | 730 |
Depreciation, depletion, amortization and impairment | 4,553 | 3,477 | 5,857 |
Non-current liabilities, valuation allowances and deferred taxes | (1,356) | 320 | (44) |
(Gains) losses on disposals of assets | (390) | (267) | (71) |
Undistributed affiliates' equity earnings | 147 | (416) | (54) |
(Increase) decrease in working capital | 6,425 | (1,578) | 2,206 |
Other changes, net | 81 | 113 | (9) |
Cash flow from operating activities | 10,640 | 5,736 | 8,615 |
CASH FLOW USED IN INVESTING ACTIVITIES | |||
Intangible assets and property, plant and equipment additions | (4,550) | (3,352) | (4,662) |
Acquisitions of subsidiaries, net of cash acquired | 49 | (2,714) | (3) |
Investments in equity affiliates and other securities | (529) | (271) | (231) |
Increase in non-current loans | (160) | (147) | (207) |
Total expenditures | (5,190) | (6,484) | (5,103) |
Proceeds from disposals of intangible assets and property, plant and equipment | 1,321 | 113 | 901 |
Proceeds from disposals of subsidiaries, net of cash sold | 27 | (11) | 213 |
Proceeds from disposals of non-current investments | 753 | 107 | 5 |
Repayment of non-current loans | 382 | 688 | 348 |
Total divestments | 2,483 | 897 | 1,467 |
Cash flow used in investing activities | (2,707) | (5,587) | (3,636) |
CASH FLOW USED IN FINANCING ACTIVITIES | |||
Issuance (repayment) of shares: | |||
- Parent company shareholders | - | 16 | 33 |
- Treasury shares | (1,744) | (844) | - |
Dividends paid: | |||
- Parent company shareholders | (705) | - | (643) |
- Non-controlling interests | (4) | (9) | (54) |
Issuance of perpetual subordinated notes | - | - | - |
Payments on perpetual subordinated notes | (59) | - | (57) |
Other transactions with non-controlling interests | (1) | (621) | (2) |
Net issuance (repayment) of non-current debt | 931 | 2,146 | 1,531 |
Increase (decrease) in current borrowings | (2,994) | (1,965) | (878) |
Increase (decrease) in current financial assets and liabilities | (242) | 69 | (916) |
Cash flow used in financing activities | (4,818) | (1,208) | (986) |
Net increase (decrease) in cash and cash equivalents | 3,115 | (1,059) | 3,993 |
Effect of exchange rates | (460) | (164) | 609 |
Cash and cash equivalents at the beginning of the period | 25,252 | 26,475 | 28,583 |
Cash and cash equivalents at the end of the period | 27,907 | 25,252 | 33,185 |
21
22
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||||
TOTAL | |||||||||
(Unaudited: Year 2018) | |||||||||
Common shares issued | Paid-in surplus and retained earnings | Currency translation adjustment | Treasury shares | Shareholders' equity - | Non-controlling interests | Total shareholders' equity | |||
(M$) | Number | Amount | Number | Amount | |||||
As of January 1, 2017 | 2,430,365,862 | 7,604 | 105,547 | (13,871) | (10,587,822) | (600) | 98,680 | 2,894 | 101,574 |
Net income 2017 | - | - | 8,631 | - | - | - | 8,631 | (332) | 8,299 |
Other comprehensive Income | - | - | 718 | 5,963 | - | - | 6,681 | 44 | 6,725 |
Comprehensive Income | - | - | 9,349 | 5,963 | - | - | 15,312 | (288) | 15,024 |
Dividend | - | - | (6,992) | - | - | - | (6,992) | (141) | (7,133) |
Issuance of common shares | 98,623,754 | 278 | 4,431 | - | - | - | 4,709 | - | 4,709 |
Purchase of treasury shares | - | - | - | - | - | - | - | - | - |
Sale of treasury shares (1) | - | - | (142) | - | 2,211,066 | 142 | - | - | - |
Share-based payments | - | - | 151 | - | - | - | 151 | - | 151 |
Share cancellation | - | - | - | - | - | - | - | - | - |
Issuance of perpetual subordinated notes | - | - | - | - | - | - | - | - | - |
Payments on perpetual subordinated notes | - | - | (302) | - | - | - | (302) | - | (302) |
Other operations with non-controlling interests | - | - | (8) | - | - | - | (8) | 4 | (4) |
Other items | - | - | 6 | - | - | - | 6 | 12 | 18 |
As of December 31, 2017 | 2,528,989,616 | 7,882 | 112,040 | (7,908) | (8,376,756) | (458) | 111,556 | 2,481 | 114,037 |
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 (1) | - | - | (240) | - | 4,079,257 | 240 | - | - | - |
Share-based payments | - | - | 294 | - | - | - | 294 | - | 294 |
Share cancellation | (44,590,699) | (131) | (2,572) | - | 44,590,699 | 2,703 | - | - | - |
Issuance 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 |
(1) Treasury shares related to the restricted stock grants. | |||||||||
23
24
BUSINESS SEGMENT INFORMATION | |||||||
TOTAL | |||||||
(unaudited) | |||||||
3rd quarter 2018 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | 2,734 | 5,267 | 23,572 | 23,144 | - | - | 54,717 |
Intersegment sales | 8,538 | 455 | 9,280 | 242 | 12 | (18,527) | - |
Excise taxes | - | - | (823) | (5,494) | - | - | (6,317) |
Revenues from sales | 11,272 | 5,722 | 32,029 | 17,892 | 12 | (18,527) | 48,400 |
Operating expenses | (4,559) | (5,535) | (30,593) | (17,147) | (151) | 18,527 | (39,458) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (2,714) | (84) | (294) | (176) | (11) | - | (3,279) |
Operating income | 3,999 | 103 | 1,142 | 569 | (150) | - | 5,663 |
Net income (loss) from equity affiliates and other items | 829 | 65 | 221 | 109 | 39 | - | 1,263 |
Tax on net operating income | (1,975) | (33) | (292) | (166) | 146 | - | (2,320) |
Net operating income | 2,853 | 135 | 1,071 | 512 | 35 | - | 4,606 |
Net cost of net debt | (519) | ||||||
Non-controlling interests | (130) | ||||||
Net income - group share | 3,957 | ||||||
3rd quarter 2018 (adjustments) (a) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | - | - | - | - | - | - | - |
Intersegment sales | - | - | - | - | - | - | - |
Excise taxes | - | - | - | - | - | - | - |
Revenues from sales | - | - | - | - | - | - | - |
Operating expenses | (50) | (64) | 176 | 47 | - | - | 109 |
Depreciation, depletion and impairment of tangible assets and mineral interests | (65) | (39) | - | - | - | - | (104) |
Operating income (b) | (115) | (103) | 176 | 47 | - | - | 5 |
Net income (loss) from equity affiliates and other items | 39 | (25) | 9 | - | - | - | 23 |
Tax on net operating income | 65 | (9) | (52) | (9) | - | - | (5) |
Net operating income (b) | (11) | (137) | 133 | 38 | - | - | 23 |
Net cost of net debt | (44) | ||||||
Non-controlling interests | 20 | ||||||
Net income - group share | (1) | ||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||||||
On operating income | - | - | 179 | 47 | - | ||
On net operating income | - | - | 135 | 38 | - | ||
3rd quarter 2018 (adjusted) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | 2,734 | 5,267 | 23,572 | 23,144 | - | - | 54,717 |
Intersegment sales | 8,538 | 455 | 9,280 | 242 | 12 | (18,527) | - |
Excise taxes | - | - | (823) | (5,494) | - | - | (6,317) |
Revenues from sales | 11,272 | 5,722 | 32,029 | 17,892 | 12 | (18,527) | 48,400 |
Operating expenses | (4,509) | (5,471) | (30,769) | (17,194) | (151) | 18,527 | (39,567) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (2,649) | (45) | (294) | (176) | (11) | - | (3,175) |
Adjusted operating income | 4,114 | 206 | 966 | 522 | (150) | - | 5,658 |
Net income (loss) from equity affiliates and other items | 790 | 90 | 212 | 109 | 39 | - | 1,240 |
Tax on net operating income | (2,040) | (24) | (240) | (157) | 146 | - | (2,315) |
Adjusted net operating income | 2,864 | 272 | 938 | 474 | 35 | - | 4,583 |
Net cost of net debt | (475) | ||||||
Non-controlling interests | (150) | ||||||
Adjusted net income - group share | 3,958 | ||||||
3rd quarter 2018 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Total expenditures | 2,796 | 3,001 | 377 | 293 | 17 | - | 6,484 |
Total divestments | 563 | 129 | 88 | 117 | - | - | 897 |
Cash flow from operating activities (*) | 4,821 | (554) | 1,338 | 752 | (621) | - | 5,736 |
(*) As of January 1st, 2018, for a better reflection of the operating performance of the segments, financial expenses were all transferred to the Corporate segment. 2017 comparative information has been restated. | |||||||
25
BUSINESS SEGMENT INFORMATION | |||||||
TOTAL | |||||||
(unaudited) | |||||||
4th quarter 2017 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | 2,185 | 4,083 | 20,661 | 20,419 | 3 | - | 47,351 |
Intersegment sales | 6,506 | 311 | 7,890 | 207 | 90 | (15,004) | - |
Excise taxes | - | - | (828) | (5,081) | - | - | (5,909) |
Revenues from sales | 8,691 | 4,394 | 27,723 | 15,545 | 93 | (15,004) | 41,442 |
Operating expenses | (3,806) | (4,385) | (26,191) | (14,849) | (305) | 15,004 | (34,532) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (4,890) | (319) | (284) | (185) | (13) | - | (5,691) |
Operating income | (5) | (310) | 1,248 | 511 | (225) | - | 1,219 |
Net income (loss) from equity affiliates and other items | 348 | 51 | 199 | 76 | 6 | - | 680 |
Tax on net operating income | (537) | (86) | (67) | (157) | 55 | - | (792) |
Net operating income | (194) | (345) | 1,380 | 430 | (164) | - | 1,107 |
Net cost of net debt | (377) | ||||||
Non-controlling interests | 291 | ||||||
Net income - group share | 1,021 | ||||||
4th quarter 2017 (adjustments) (a) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | - | 21 | - | - | - | - | 21 |
Intersegment sales | - | - | - | - | - | - | - |
Excise taxes | - | - | - | - | - | - | - |
Revenues from sales | - | 21 | - | - | - | - | 21 |
Operating expenses | - | (243) | 355 | 33 | - | - | 145 |
Depreciation, depletion and impairment of tangible assets and mineral interests | (2,382) | (266) | (3) | (10) | - | - | (2,661) |
Operating income (b) | (2,382) | (488) | 352 | 23 | - | - | (2,495) |
Net income (loss) from equity affiliates and other items | (112) | (22) | 9 | (19) | - | - | (144) |
Tax on net operating income | 495 | (67) | 133 | (10) | (136) | - | 415 |
Net operating income (b) | (1,999) | (577) | 494 | (6) | (136) | - | (2,224) |
Net cost of net debt | (8) | ||||||
Non-controlling interests | 381 | ||||||
Net income - group share | (1,851) | ||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||||||
On operating income | - | - | 423 | 31 | - | ||
On net operating income | - | - | 354 | 11 | - | ||
4th quarter 2017 (adjusted) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | 2,185 | 4,062 | 20,661 | 20,419 | 3 | - | 47,330 |
Intersegment sales | 6,506 | 311 | 7,890 | 207 | 90 | (15,004) | - |
Excise taxes | - | - | (828) | (5,081) | - | - | (5,909) |
Revenues from sales | 8,691 | 4,373 | 27,723 | 15,545 | 93 | (15,004) | 41,421 |
Operating expenses | (3,806) | (4,142) | (26,546) | (14,882) | (305) | 15,004 | (34,677) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (2,508) | (53) | (281) | (175) | (13) | - | (3,030) |
Adjusted operating income | 2,377 | 178 | 896 | 488 | (225) | - | 3,714 |
Net income (loss) from equity affiliates and other items | 460 | 73 | 190 | 95 | 6 | - | 824 |
Tax on net operating income | (1,032) | (19) | (200) | (147) | 191 | - | (1,207) |
Adjusted net operating income | 1,805 | 232 | 886 | 436 | (28) | - | 3,331 |
Net cost of net debt | (369) | ||||||
Non-controlling interests | (90) | ||||||
Adjusted net income - group share | 2,872 | ||||||
4th quarter 2017 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Total expenditures | 3,490 | 306 | 710 | 570 | 27 | - | 5,103 |
Total divestments | 1,334 | 46 | 36 | 45 | 6 | - | 1,467 |
Cash flow from operating activities (*) | 4,174 | 667 | 3,030 | 1,015 | (271) | - | 8,615 |
(*) As of January 1st, 2018, for a better reflection of the operating performance of the segments, financial expenses were all transferred to the Corporate segment. 2017 comparative information has been restated. | |||||||
26
BUSINESS SEGMENT INFORMATION | |||||||
TOTAL | |||||||
(unaudited) | |||||||
Year 2018 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | 10,989 | 16,136 | 92,025 | 90,206 | 7 | - | 209,363 |
Intersegment sales | 31,173 | 1,889 | 35,462 | 979 | 64 | (69,567) | - |
Excise taxes | - | - | (3,359) | (21,898) | - | - | (25,257) |
Revenues from sales | 42,162 | 18,025 | 124,128 | 69,287 | 71 | (69,567) | 184,106 |
Operating expenses | (18,304) | (17,434) | (120,393) | (66,737) | (796) | 69,567 | (154,097) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (11,288) | (731) | (1,222) | (709) | (42) | - | (13,992) |
Operating income | 12,570 | (140) | 2,513 | 1,841 | (767) | - | 16,017 |
Net income (loss) from equity affiliates and other items | 2,686 | 318 | 782 | 307 | 77 | - | 4,170 |
Tax on net operating income | (6,068) | (173) | (445) | (532) | 375 | - | (6,843) |
Net operating income | 9,188 | 5 | 2,850 | 1,616 | (315) | - | 13,344 |
Net cost of net debt | (1,794) | ||||||
Non-controlling interests | (104) | ||||||
Net income - group share | 11,446 | ||||||
Year 2018 (adjustments) (a) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | - | 56 | - | - | - | - | 56 |
Intersegment sales | - | - | - | - | - | - | - |
Excise taxes | - | - | - | - | - | - | - |
Revenues from sales | - | 56 | - | - | - | - | 56 |
Operating expenses | (199) | (237) | (616) | (45) | (9) | - | (1,106) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (1,256) | (516) | (2) | - | - | - | (1,774) |
Operating income (b) | (1,455) | (697) | (618) | (45) | (9) | - | (2,824) |
Net income (loss) from equity affiliates and other items | (335) | (40) | (116) | (5) | - | - | (496) |
Tax on net operating income | 768 | (14) | 205 | 14 | - | - | 973 |
Net operating income (b) | (1,022) | (751) | (529) | (36) | (9) | - | (2,347) |
Net cost of net debt | - | - | - | - | - | - | (67) |
Non-controlling interests | - | - | - | - | - | - | 301 |
Net income - group share | - | - | - | - | - | - | (2,113) |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||||||
On operating income | - | - | (589) | (6) | - | ||
On net operating income | - | - | (413) | (5) | - | ||
Year 2018 (adjusted) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Non-Group sales | 10,989 | 16,080 | 92,025 | 90,206 | 7 | - | 209,307 |
Intersegment sales | 31,173 | 1,889 | 35,462 | 979 | 64 | (69,567) | - |
Excise taxes | - | - | (3,359) | (21,898) | - | - | (25,257) |
Revenues from sales | 42,162 | 17,969 | 124,128 | 69,287 | 71 | (69,567) | 184,050 |
Operating expenses | (18,105) | (17,197) | (119,777) | (66,692) | (787) | 69,567 | (152,991) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (10,032) | (215) | (1,220) | (709) | (42) | - | (12,218) |
Adjusted operating income | 14,025 | 557 | 3,131 | 1,886 | (758) | - | 18,841 |
Net income (loss) from equity affiliates and other items | 3,021 | 358 | 898 | 312 | 77 | - | 4,666 |
Tax on net operating income | (6,836) | (159) | (650) | (546) | 375 | - | (7,816) |
Adjusted net operating income | 10,210 | 756 | 3,379 | 1,652 | (306) | - | 15,691 |
Net cost of net debt | (1,727) | ||||||
Non-controlling interests | (405) | ||||||
Adjusted net income - group share | 13,559 | ||||||
Year 2018 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total |
Total expenditures | 15,282 | 3,539 | 1,781 | 1,458 | 125 | - | 22,185 |
Total divestments | 4,952 | 931 | 919 | 428 | 9 | - | 7,239 |
Cash flow from operating activities (*) | 19,803 | (670) | 4,308 | 2,759 | (1,497) | - | 24,703 |
(*) As of January 1st, 2018, for a better reflection of the operating performance of the segments, financial expenses were all transferred to the Corporate segment. 2017 comparative information has been restated. | |||||||
27
BUSINESS SEGMENT INFORMATION | ||||||||
TOTAL | ||||||||
Year 2017 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total | |
Non-Group sales | 8,477 | 12,854 | 75,505 | 74,634 | 23 | - | 171,493 | |
Intersegment sales | 22,837 | 1,180 | 26,844 | 857 | 374 | (52,092) | - | |
Excise taxes | - | - | (3,008) | (19,386) | - | - | (22,394) | |
Revenues from sales | 31,314 | 14,034 | 99,341 | 56,105 | 397 | (52,092) | 149,099 | |
Operating expenses | (14,672) | (13,828) | (94,097) | (53,629) | (1,107) | 52,092 | (125,241) | |
Depreciation, depletion and impairment of tangible assets and mineral interests | (13,850) | (482) | (1,074) | (657) | (40) | - | (16,103) | |
Operating income | 2,792 | (276) | 4,170 | 1,819 | (750) | - | 7,755 | |
Net income (loss) from equity affiliates and other items | 1,546 | 31 | 2,979 | 497 | 54 | - | 5,107 | |
Tax on net operating income | (2,233) | (140) | (944) | (561) | 540 | - | (3,338) | |
Net operating income | 2,105 | (385) | 6,205 | 1,755 | (156) | - | 9,524 | |
Net cost of net debt | (1,225) | |||||||
Non-controlling interests | 332 | |||||||
Net income - group share | 8,631 | |||||||
Year 2017 (adjustments) (a) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total | |
Non-Group sales | - | (20) | - | - | - | - | (20) | |
Intersegment sales | - | - | - | - | - | - | - | |
Excise taxes | - | - | - | - | - | - | - | |
Revenues from sales | - | (20) | - | - | - | - | (20) | |
Operating expenses | (119) | (389) | 167 | (11) | (64) | - | (416) | |
Depreciation, depletion and impairment of tangible assets and mineral interests | (4,308) | (291) | (53) | (10) | - | - | (4,662) | |
Operating income (b) | (4,427) | (700) | 114 | (21) | (64) | - | (5,098) | |
Net income (loss) from equity affiliates and other items | (328) | (116) | 2,177 | 102 | - | - | 1,835 | |
Tax on net operating income | 875 | (54) | 124 | (2) | (114) | - | 829 | |
Net operating income (b) | (3,880) | (870) | 2,415 | 79 | (178) | - | (2,434) | |
Net cost of net debt | (29) | |||||||
Non-controlling interests | 516 | |||||||
Net income - group share | (1,947) | |||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | ||||||||
On operating income | - | - | 344 | 13 | - | |||
On net operating income | - | - | 298 | (3) | - | |||
Year 2017 (adjusted) | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total | |
Non-Group sales | 8,477 | 12,874 | 75,505 | 74,634 | 23 | - | 171,513 | |
Intersegment sales | 22,837 | 1,180 | 26,844 | 857 | 374 | (52,092) | - | |
Excise taxes | - | - | (3,008) | (19,386) | - | - | (22,394) | |
Revenues from sales | 31,314 | 14,054 | 99,341 | 56,105 | 397 | (52,092) | 149,119 | |
Operating expenses | (14,553) | (13,439) | (94,264) | (53,618) | (1,043) | 52,092 | (124,825) | |
Depreciation, depletion and impairment of tangible assets and mineral interests | (9,542) | (191) | (1,021) | (647) | (40) | - | (11,441) | |
Adjusted operating income | 7,219 | 424 | 4,056 | 1,840 | (686) | - | 12,853 | |
Net income (loss) from equity affiliates and other items | 1,874 | 147 | 802 | 395 | 54 | - | 3,272 | |
Tax on net operating income | (3,108) | (86) | (1,068) | (559) | 654 | - | (4,167) | |
Adjusted net operating income | 5,985 | 485 | 3,790 | 1,676 | 22 | - | 11,958 | |
Net cost of net debt | (1,196) | |||||||
Non-controlling interests | (184) | |||||||
Adjusted net income - group share | 10,578 | |||||||
Year 2017 | Exploration & Production | Gas, Renewables & Power | Refining & Chemicals | Marketing & Services | Corporate | Intercompany | Total | |
Total expenditures | 12,802 | 797 | 1,734 | 1,457 | 106 | - | 16,896 | |
Total divestments | 1,918 | 73 | 2,820 | 413 | 40 | - | 5,264 | |
Cash flow from operating activities (*) | 12,821 | 1,055 | 7,411 | 2,221 | (1,189) | - | 22,319 | |
* Reclassification of intercompany transactions between Upstream and Corporate for €823 million with no impact on the total of cash flow from operating activities | ||||||||
(*) As of January 1st, 2018, for a better reflection of the operating performance of the segments, financial expenses were all transferred to the Corporate segment. 2017 comparative information has been restated. | ||||||||
28
Reconciliation of the information by business segment with consolidated financial statements | |||
TOTAL | |||
(unaudited) | |||
4th quarter 2018 | Adjusted | Adjustments (a) | Consolidated statement of income |
Sales | 52,452 | 43 | 52,495 |
Excise taxes | (6,183) | - | (6,183) |
Revenues from sales | 46,269 | 43 | 46,312 |
Purchases, net of inventory variation | (31,944) | (1,476) | (33,420) |
Other operating expenses | (6,798) | (115) | (6,913) |
Exploration costs | (201) | - | (201) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (3,138) | (1,224) | (4,362) |
Other income | 425 | 57 | 482 |
Other expense | (124) | (191) | (315) |
Financial interest on debt | (525) | (4) | (529) |
Financial income and expense from cash & cash equivalents | (30) | - | (30) |
Cost of net debt | (555) | (4) | (559) |
Other financial income | 269 | - | 269 |
Other financial expense | (185) | - | (185) |
Net income (loss) from equity affiliates | 893 | (228) | 665 |
Income taxes | (1,664) | 1,071 | (593) |
Consolidated net income | 3,247 | (2,067) | 1,180 |
Group share | 3,164 | (2,032) | 1,132 |
Non-controlling interests | 83 | (35) | 48 |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||
4th quarter 2017 | Adjusted | Adjustments (a) | Consolidated statement of income |
Sales | 47,330 | 21 | 47,351 |
Excise taxes | (5,909) | - | (5,909) |
Revenues from sales | 41,421 | 21 | 41,442 |
Purchases, net of inventory variation | (28,020) | 361 | (27,659) |
Other operating expenses | (6,370) | (216) | (6,586) |
Exploration costs | (287) | - | (287) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (3,030) | (2,661) | (5,691) |
Other income | 220 | 292 | 512 |
Other expense | (208) | (362) | (570) |
Financial interest on debt | (344) | (8) | (352) |
Financial income and expense from cash & cash equivalents | (45) | - | (45) |
Cost of net debt | (389) | (8) | (397) |
Other financial income | 240 | - | 240 |
Other financial expense | (159) | - | (159) |
Net income (loss) from equity affiliates | 731 | (74) | 657 |
Income taxes | (1,187) | 415 | (772) |
Consolidated net income | 2,962 | (2,232) | 730 |
Group share | 2,872 | (1,851) | 1,021 |
Non-controlling interests | 90 | (381) | (291) |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||
29
Reconciliation of the information by business segment with consolidated financial statements | |||
TOTAL | |||
Year 2018 | Adjusted | Adjustments (a) | Consolidated statement of income |
Sales | 209,307 | 56 | 209,363 |
Excise taxes | (25,257) | - | (25,257) |
Revenues from sales | 184,050 | 56 | 184,106 |
Purchases, net of inventory variation | (125,134) | (682) | (125,816) |
Other operating expenses | (27,060) | (424) | (27,484) |
Exploration costs | (797) | - | (797) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (12,218) | (1,774) | (13,992) |
Other income | 1,518 | 320 | 1,838 |
Other expense | (448) | (825) | (1,273) |
Financial interest on debt | (1,866) | (67) | (1,933) |
Financial income and expense from cash & cash equivalents | (188) | - | (188) |
Cost of net debt | (2,054) | (67) | (2,121) |
Other financial income | 1,120 | - | 1,120 |
Other financial expense | (685) | - | (685) |
Net income (loss) from equity affiliates | 3,161 | 9 | 3,170 |
Income taxes | (7,489) | 973 | (6,516) |
Consolidated net income | 13,964 | (2,414) | 11,550 |
Group share | 13,559 | (2,113) | 11,446 |
Non-controlling interests | 405 | (301) | 104 |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||
Year 2017 | Adjusted | Adjustments (a) | Consolidated statement of income |
Sales | 171,513 | (20) | 171,493 |
Excise taxes | (22,394) | - | (22,394) |
Revenues from sales | 149,119 | (20) | 149,099 |
Purchases, net of inventory variation | (99,534) | 123 | (99,411) |
Other operating expenses | (24,427) | (539) | (24,966) |
Exploration costs | (864) | - | (864) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (11,441) | (4,662) | (16,103) |
Other income | 772 | 3,039 | 3,811 |
Other expense | (389) | (645) | (1,034) |
Financial interest on debt | (1,367) | (29) | (1,396) |
Financial income and expense from cash & cash equivalents | (138) | - | (138) |
Cost of net debt | (1,505) | (29) | (1,534) |
Other financial income | 957 | - | 957 |
Other financial expense | (642) | - | (642) |
Net income (loss) from equity affiliates | 2,574 | (559) | 2,015 |
Income taxes | (3,858) | 829 | (3,029) |
Consolidated net income | 10,762 | (2,463) | 8,299 |
Group share | 10,578 | (1,947) | 8,631 |
Non-controlling interests | 184 | (516) | (332) |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||
30