TIDMTTE 
 
 

TOTALENERGIES

Financial report

 

1(st) half 2022

 

Certification of the person responsible for the half-year financial report

 

This translation is a non binding translation into English of the Chairman and Chief Executive Officer's certification issued in French, and is provided solely for the convenience of English-speaking readers.

 

"I certify, to the best of my knowledge, that the condensed Consolidated Financial Statements of TotalEnergies SE (the Corporation) for the first half of 2022 have been prepared in accordance with the applicable set of accounting standards and give a fair view of the assets, liabilities, financial position and profit or loss of the Corporation and all the entities included in the consolidation, and that the half-year financial report on pages to herein includes a fair review of the important events that have occurred during the first six months of the financial year and their impact on the financial statements, major related parties transactions and the principal risks and uncertainties for the remaining six months of the financial year.

 

The statutory auditors' report on the limited review of the above-mentioned condensed Consolidated Financial Statements is included on page of this half-year financial report."

 

Courbevoie, July 28, 2022

Patrick Pouyanné

 

Chairman and Chief Executive Officer

Glossary

 

The terms "TotalEnergies" and "TotalEnergies company" as used in this document refer to TotalEnergies SE collectively with all of its direct and indirect consolidated companies located in or outside of France. The term "Corporation" as used in this document exclusively refers to TotalEnergies SE, which is the parent company of TotalEnergies company.

 
Abbreviations 
EUR :          euro 
$ or dollar :  US dollar 
ADR :          American depositary receipt (evidencing an ADS) 
ADS :          American depositary share (representing a share of a company) 
AMF :          Autorité des marchés financiers (French Financial 
               Markets Authority) 
API :          American Petroleum Institute 
CO(2) :        carbon dioxide 
DACF :         debt adjusted cash flow is defined as operating cash flow 
               before working capital changes without financial charges 
EV :           electric vehicle 
FLNG :         floating liquefied natural gas 
FPSO :         floating production, storage and offloading 
FSRU :         floating storage and regasification unit 
GHG :          greenhouse gas 
HSE :          health, safety and the environment 
IFRS :         International Financial Reporting Standards 
IPIECA :       International Petroleum Industry Environmental Conservation 
               Association 
LNG :          liquefied natural gas 
LPG :          liquefied petroleum gas 
NGL :          natural gas liquids 
NGV :          natural gas vehicle 
OML :          oil mining lease 
PPA :          Power Purchase Agreement 
ROACE :        return on average capital employed 
ROE :          return on equity 
SEC :          United States Securities and Exchange Commission 
VCM :          variable cost margin -- Refining Europe This indicator 
               represents the average margin on variable costs realized by 
               TotalEnergies' European refining business. It is equal to the 
               difference between the sales of refined products realized by 
               TotalEnergies' European refining and the crude purchases as 
               well as associated variable costs, divided by refinery 
               throughput in tons. 
 
 Units of measurement 
b = barrel(1) 
b = billion 
Bcm = billion of cubic meters 
boe = barrel of oil equivalent 
btu = British thermal unit 
cf = cubic feet 
CO(2) e = CO(2) equivalent 
/d = per day 
GtCO(2) = billion of CO(2) tons 
GW = gigawatt 
GWh = gigawatt hour 
k = thousand 
km = kilometer 
m = meter 
m(3) = cubic meter(1) 
M = million 
MW = megawatt 
PJ = petajoule 
t = (Metric) ton 
toe = ton of oil equivalent 
TWh = terawatt hour 
W = watt 
Wac = AC watt 
Wp = watt-peak or watt of peak power 
/y = per year 
 
Conversion table 
1 acre .APPROX. 0.405 hectares 
1 b = 42 gallons US .APPROX. 159 liters 
1 b/d of crude oil .APPROX. 50 t/y of crude oil 
1 km .APPROX. 0.62 miles 
1 m(3) .APPROX. 35.3 cf 
1 Mt de LNG .APPROX. 48 Bcf of gas 
1 Mt/y of LNG .APPROX. 131 Mcf/d of gas 
1 t of oil .APPROX. 7.5 b of oil (assuming a specific gravity of 37deg API) 
1 boe = 1 b of crude oil .APPROX. 5,378 cf of gas in 2021(2) (5,399 cf in 2020 
and 5,395 cf in 2019) 
 

(1) Liquid and gas volumes are reported at international standard metric conditions (15degC and 1 atm).

 

(2) Natural gas is converted to barrels of oil equivalent using a ratio of cubic feet of natural gas per one barrel. This ratio is based on the actual average equivalent energy content of TotalEnergies' natural gas reserves during the applicable periods and is subject to change. The tabular conversion rate is applicable to TotalEnergies natural gas reserves on a Company-wide basis.

 

1. HALF YEAR FINANCIAL REPORT

 

1.1 Highlights since the beginning of 2022(1)

 

Social and environmental responsibility

   -- Statement of principles of conduct for managing its Russian activities 
 
   -- Publication of the Sustainability & Climate 2022 Progress Report 
      presenting the advances made on TotalEnergies' transformation strategy 
      and the update of its climate ambition 
 
   -- Publication of TotalEnergies' first tax transparency report 
 
   -- Solidarity measures taken by TotalEnergies in France aimed at reducing 
      its customers' gas and fuel bills with a discount of 10 cts on each liter 
      of fuel sold at its service stations and the implementation of a "gas 
      cheque" of EUR100 for its gas customers in a precarious energy situation 
 
   -- Implementation of the responsible withdrawal of TotalEnergies from 
      Myanmar: transfer of the operatorship to PTTEP by ensuring a fair 
      transition for key stakeholders, employees and communities 
 
   -- Climate Resolution 2022 approved by 89% of shareholders at the Annual 
      General Meeting of May 25, 2022 
 
   -- Launched global campaign to detect and measure methane emissions by drone 
 
   -- Fuel price reduction programme until year-end for TotalEnergies' service 
      stations in France 
 

Renewables and Electricity

   -- Acquisition of 50% of Clearway Energy Group, a major player in the United 
      States, with 7.7 GW of solar and wind assets in operation and a portfolio 
      of 25 GW in development 
 

Offshore wind:

   -- Award of leases to develop offshore wind farms for 3 GW on the east coast 
      of the United States, off New York and New Jersey, and 2 GW in Scotland 
      with Green Investment Group (GIG) and RIDG 
 
   -- Partnership with KGHM in Poland to participate in the Polish government 
      tender for the development of offshore wind projects 
 
   -- Obtained an offshore concession to develop a 1 GW offshore wind farm off 
      the U.S. East Coast, off the coast of North Carolina 
 

Solar:

   -- Acquisition of SunPower's industrial and commercial solar business in the 
      United States 
 
   -- Creation of a joint venture with Eneos to develop onsite B2B solar 
      distributed generation across Asia, with a target capacity of 2 GW in the 
      next 5 years 
 
   -- Core Solar: acquisition of a 4 GW pipeline of projects in the United 
      States 
 
   -- Launched TotalEnergies On, TotalEnergies' start-up accelerator program 
      dedicated to the electricity business, with the selection of the first 10 
      start-ups 
 

LNG

   -- Acquired 6.25% stake in the North Field East LNG project in Qatar with a 
      capacity of 32 Mt/y 
 
   -- Expansion of the strategic alliance with Sempra to develop the Vista 
      Pacifico LNG project in Mexico and to co-develop several onshore and 
      offshore renewable projects in North America 
 
   -- Launched the FEED for the Cameron LNG extension project in the U.S. with 
      a capacity of 6.75 Mt/y 
 
   -- Launched the FEED for the upstream installations of the Papua LNG project 
      in Papua New Guinea 
 
   -- Signed a 15-year contract for the sale of 600 kt/y of LNG with Hanwha 
      Energy in South Korea 
 

Upstream

   -- Withdrawal from the North Platte deep-water project in the Gulf of Mexico 
 
   -- Significant new oil and associated gas discovery at the Krabdagu-1 well 
      located on Block 58 in Suriname 
 
   -- Significant discovery of light oil and associated gas on the Venus 
      prospect located on Block 2913B in Namibia 
 
   -- Started production on the first 180 kb/d FPSO on the Mero field in Brazil 
 
   -- Approved the development of the Ballymore field in the U.S. Gulf of 
      Mexico for a planned 2025 start-up with 75 kb/d of production capacity 
 
   -- 25-year license extension Blocks 404a and 208 in the Berkine Basin, 
      Algeria 
 
   -- Agreed to transfer to Zarubezhneft the 20% residual interest in the 
      Kharyaga oil field in Russia 
 

Downstream and new molecules

   -- Started the ethane cracker in Port Arthur, USA 
 
   -- Hydrogen: acquired a 25% stake in Adani New Industries Limited (ANIL) for 
      the production of green hydrogen in India 
 

Sustainable aviation fuel:

   -- Start of sustainable aviation fuel production at the Normandy platform, 
      in France 
 
   -- Collaboration with Eneos to jointly conduct a feasibility study of a 
      sustainable aviation fuel production unit with 300 kt/y capacity at their 
      Negishi refinery in Japan 
 

Circular economy:

   -- Signature of an agreement with Honeywell to promote the development of 
      advanced plastic recycling in Europe 
 
   -- Commercial agreement with New Hope Energy for the production of polymers 
      from recycled plastic in the United States 
 

Carbon sinks

   -- $50 million contribution in the Tropical Asia Forest Fund 2 to invest in 
      sustainable forestry projects in Southeast Asia 
 
   -- Start-up of the "3D" carbon capture industrial pilot at the ArcelorMittal 
      site in Dunkirk 
 
   -- Acquired a 49% stake in Compagnie des Bois du Gabon to develop natural 
      carbon sinks 
 
   -- Launched a CO2 capture project to decarbonize Cameron LNG's production in 
      the U.S 
 

(1) Certain transactions referred to in the highlights are subject to approval by authorities or to conditions as per the agreements.

 

1.2 Key figures from TotalEnergies' consolidated financial statements(1)

 
In millions of dollars, except effective tax 
rate, earnings per share and number of shares     1H22    1H21    1H22 vs 1H21 
Adjusted EBITDA(2)                                36,161  16,837  x2.1 
Adjusted net operating income from business 
 segments                                         19,958  7,519   x2.7 
Exploration & Production                          9,734   4,188   x2.3 
Integrated Gas, Renewables & Power                5,606   1,876   x3 
Refining & Chemicals                              3,880   754     x5.1 
Marketing & Services                              738     701     +5% 
Contribution of equity affiliates to adjusted 
 net income                                       3,805   1,260   x3 
Effective tax rate(3)                             39.0%   34.4% 
Adjusted net income (TotalEnergies share)         18,773  6,466   x2.9 
Adjusted fully-diluted earnings per share 
 (dollars)(4)                                     7.14    2.38    x3 
Adjusted fully-diluted earnings per share 
 (euros)*                                         6.53    1.97    x3.3 
Fully-diluted weighted-average shares (millions)  2,602   2,644   -2% 
Net income (TotalEnergies share)                  10,636  5,550   +92% 
Organic investments(5)                            4,800   5,181   -7% 
Net acquisitions(6)                               2,998   1,986   +51% 
Net investments(7)                                7,798   7,167   +9% 
Operating cash flow before working capital 
 changes(8)                                       24,859  11,718  x2.1 
Operating cash flow before working capital 
 changes w/o financial charges (DACF)(9)          25,626  12,511  x2 
Cash flow from operations                         23,901  13,149  +82% 
 

* Average EUR-$ exchange rate: 1.0934 in the first half 2022 and 1.2053 in the first half 2021.

 

(1) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value; adjustment items are on page .

 

(2) Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) corresponds to the adjusted earnings before depreciation, depletion and impairment of tangible and intangible assets and mineral interests, income tax expense and cost of net debt, i.e., all operating income and contribution of equity affiliates to net income.

 

(3) 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).

 

(4) In accordance with IFRS rules, adjusted fully-diluted earnings per share is calculated from the adjusted net income less the interest on the perpetual subordinated bond

 

(5) Organic investments = net investments excluding acquisitions, asset sales and other operations with non-controlling interests.

 

(6) Net acquisitions = acquisitions -- assets sales -- other transactions with non-controlling interests (see page ).

 

(7) Net investments = organic investments + net acquisitions (see page ).

 

(8) 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. The inventory valuation effect is explained on page . The reconciliation table for different cash flow figures is on page .

 

(9) DACF = debt adjusted cash flow, is defined as operating cash flow before working capital changes and financial charges.

 

1.3 Key figures of environment, greenhouse gas emissions and production

 

1.3.1 Environment -- liquids and gas price realizations, refining margins

 
                                                     1H22   1H21  1H22 vs 1H21 
Brent ($/b)                                          107.9  65.0  +66% 
Henry Hub ($/Mbtu)                                   6.1    2.9   x2.1 
NBP ($/Mbtu)                                         27.2   7.7   x3.5 
JKM ($/Mbtu)                                         29.1   10.0  x2.9 
Average price of liquids ($/b) Consolidated 
 subsidiaries                                        96.3   59.7  +61% 
Average price of gas ($/Mbtu) Consolidated 
 subsidiaries                                        11.65  4.23  x2.8 
Average price of LNG ($/Mbtu) Consolidated 
 subsidiaries and equity affiliates                  13.77  6.33  x2.2 
Variable cost margin - Refining Europe, VCM ($/t)*   101.0  7.6   x13.3 
 

* This indicator represents TotalEnergies' average margin on variable cost for refining in Europe (equal to the difference between TotalEnergies European refined product sales and crude oil purchases with associated variable costs divided by volumes refined in tons).

 

The average LNG selling price was $13.77/Mbtu in the first half, more than double the prices over the same period in 2021, benefiting on a lagged basis from the increase in oil and gas indexes on long-term contracts as well as high spot gas prices over these periods.

 

1.3.2 Greenhouse gas emissions(1)

 
GHG emissions (MtCO(2) e)               1H22  1H21   1H22 vs 1H21 
Scope 1+2 from operated facilities(2)   19.3  17.8*  +9% 
Scope 1+2 - equity share                27.4  -      - 
Scope 3 Oil & Gas Worldwide(3)          192*  193*   - 
of which Scope 3 Oil Worldwide(4)       131*  137*   -4% 
Scope 1+2+3 in Europe(5)                129*  121*   +6% 
of which Scope 3 in Europe              117*  111*   +6% 
 

Estimated 1H22 emissions. Equity share half year 2021 data is not available.

 

* Excluding Covid effect

 
Methane emissions (ktCH(4) )                 1H22  1H21  1H22 vs 1H21 
Methane emissions from operated facilities   20    24    -18% 
Methane emissions - equity share             24    -     - 
 

Estimated 1H22 emissions. Equity share half year 2021 data is not available.

 

The evolution of Scope 1+2 emissions from the operated facilities is the result of the high-capacity utilization of CCGTs and refineries in Europe, TotalEnergies responding by increasing energy output, thus contributing to energy security.

 

(1) The six greenhouse gases in the Kyoto protocol, namely CO2, CH4, N2O, HFCs, PFCs and SF6, with their respective GWP (Global Warming Potential) as described in the 2007 IPCC report. HFCs, PFCs and SF6 are virtually absent from the Company's emissions or are considered as non-material, and are therefore not counted.

 

(2) Scope 1+2 GHG emissions of operated facilities are defined as the sum of direct emissions of greenhouse gases from sites or activities that are included in the scope of reporting (as defined in the Company's 2021 Universal Registration Document) and indirect emissions attributable to brought-in energy (electricity, heat, steam), excluding purchased industrial gases (H2).

 

(3) TotalEnergies reports Scope 3 GHG emissions, category 11, which correspond to indirect GHG emissions related to the use by customers of energy products, i.e., combustion of the products to obtain energy. The Company follows the oil & gas industry reporting guidelines published by IPIECA, which comply with the GHG Protocol methodologies. In order to avoid double counting, this methodology accounts for the largest volume in the oil and gas value chain, i.e., the higher of the two production volumes or sales to end customers. For TotalEnergies, in 2021 and 2022, the calculation of Scope 3 GHG emissions for the oil value chain considers oil products and biofuels sales (higher than production) and for the gas value chain, gas sales either as LNG or as part of direct sales to B2B/B2C customers (higher than or equivalent to marketable gas production).

 

(4) Scope 3 GHG emissions, category 11, which correspond to indirect GHG emissions related to the sale of petroleum products (including biofuels).

 

(5) Scope 1+2+3 GHG emissions in Europe are defined as the sum of Scope 1+2 GHG emissions of facilities operated by the Company and indirect GHG emissions related to the use by customers of energy products (Scope 3) in the EU, Norway, United Kingdom and Switzerland.

 

1.3.3 Production*

 
Hydrocarbon production                              1H22   1H21   1H22 vs 1H21 
Hydrocarbon production (kboe/d)                     2,791  2,805  -0.5% 
Oil (including bitumen) (kb/d)                      1,287  1,265  +2% 
Gas (including condensates and associated NGL) 
 (kboe/d)                                           1,504  1,540  -2% 
Hydrocarbon production (kboe/d)                     2,791  2,805  -0.5% 
Liquids (kb/d)                                      1,505  1,486  +1% 
Gas (Mcf/d)                                         6,997  7,208  -3% 
* Company production = E&P production + iGRP production 
 

* Company production = E&P production + iGRP production

 

Hydrocarbon production was 2,791 kboe/d in the first half 2022, down slightly by 0.5% year-on-year, comprised of:

   -- +2% due to the increase in production quotas of OPEC countries, 
 
   -- +2% due to the start-up and ramp-up of projects, including Clov Phase 2 
      and Zinia Phase 2 in Angola, and Iara in Brazil, 
 
   -- +2% due to a reduction in planned maintenance and unplanned downtime, 
 
   -- -2% portfolio effect, mainly related to the end of the Qatargas 1 
      operating license, 
 
   -- -1% due to security-related production cuts in Libya and Nigeria, 
 
   -- -1% due to the price effect, 
 
   -- -2.5% due to the natural decline of fields. 
 

1.4 Analysis of business segments

 

1.4.1 Integrated Gas, Renewables & Power (iGRP)

 

1.4.1.1 Production and sales of Liquefied natural gas (LNG) and electricity

 
Hydrocarbon production for LNG   1H22   1H21   1H22 vs 1H21 
iGRP (kboe/d)                    477    510    -6% 
Liquids (kb/d)                   56     58     -2% 
Gas (Mcf/d)                      2,291  2,470  -7% 
 
 
Liquefied Natural Gas in Mt                           1H22  1H21  1H22 vs 1H21 
Overall LNG sales                                     24.9  20.4  +22% 
incl. Sales from equity production*                   8.6   8.5   - 
incl. Sales by TotalEnergies from equity production 
 and third party purchases                            22.2  16.7  +33% 
 

* The Company's equity production may be sold by Total Energies or by the joint ventures.

 

Hydrocarbon production for LNG is down 6% year-on-year in the first half 2022, mainly due to the end of the Qatargas 1 contract and the decrease in supply to NLNG for security reasons in Nigeria. Production in Snøhvit, Norway, restarted in the second quarter.

 

Total LNG sales are up year-on-year by 22% in the first half 2022, due to the increase in spot purchases to maximize the use of the Company's regasification capacity in Europe.

 
Renewables & Electricity                              1H22  1H21  1H22 vs 1H21 
Portfolio of renewable power generation gross 
 capacity (GW)(1)(2)                                  50.7  41.7  +22% 
o/w installed capacity                                11.6  8.3   +40% 
o/w capacity in construction                          5.2   5.4   -4% 
o/w capacity in development                           33.9  28.0  +21% 
Gross renewables capacity with PPA (GW)(1)(2)         26.8  22.6  +19% 
Portfolio of renewable power generation net capacity 
 (GW)(1)(2)                                           38.4  30.7  +25% 
o/w installed capacity                                5.8   4.0   +46% 
o/w capacity in construction                          3.7   3.1   +17% 
o/w capacity in development                           28.9  23.6  +22% 
Net power production (TWh)(3)                         15.2  9.8   +56% 
incl. Power production from renewables                4.7   3.2   +47% 
Clients power -- BtB and BtC (Million)(2)             6.2   5.8   +6% 
Clients gas -- BtB and BtC (Million)(2)               2.7   2.7   +1% 
Sales power -- BtB and BtC (TWh)                      28.6  28.8  - 
Sales gas -- BtB and BtC (TWh)                        54.1  56.8  -5% 
Proportional adjusted EBITDA Renewables and 
 Electricity (M$)(4)                                  637   654*  -3% 
incl. from renewables business                        222   230*  -4% 
 

* 1H21 data corrected after taking into account AGEL's result.

 

(1) Includes 20% of Adani Green Energy Ltd's gross capacity effective first quarter 2021.

 

(2) End of period data.

 

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

 

(4) TotalEnergies share (% interest) of EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) in Renewables & Electricity affiliates, regardless of consolidation method.

 

Gross installed capacity of renewable electricity generation grew to 11.6 GW at the end of first half 2022.

 

Net electricity production was 15.2 TWh in the first half 2022, an increase of 56% year-on-year, thanks to higher utilization rates of flexible power plants (CCGT) as well as growth in electricity generation from renewable sources.

 

EBITDA from the Renewables & Electricity business reached $637 million in the first half 2022, down 3% year-on-year.

 

1.4.1.2 Results

 
In millions of dollars                              1H22   1H21   1H22 vs 1H21 
Adjusted net operating income*                      5,606  1,876  x3 
including adjusted income from equity affiliates    2,649  620    x4.3 
Organic investments                                 599    1,512  -60% 
Net acquisitions                                    583    2,059  -72% 
Net investments                                     1,182  3,571  -67% 
Operating cash flow before working capital 
 changes**                                          4,945  1,963  x2.5 
Cash flow from operations***                        4,285  1,347  x3.2 
 

* Detail of adjustment items shown in the business segment information annex to financial statements.

 

** Excluding financial expenses, except those related to lease contracts, excluding the impact of contracts recognized at fair value for the sector and including capital gains on the sale of renewable projects.

 

*** Excluding financial charges, except those related to leases.

 

Adjusted net operating income for the iGRP sector was $5,606 million in the first half 2022, tripling over one year, thanks to higher LNG prices, the performance of the gas, LNG and electricity trading activities and the growing contribution of the Renewables & Electricity businesses.

 

Operating cash flow before working capital changes was 2.5 times higher over one year to $4,945 million in the first half 2022, for the same reasons.

 

1.4.2 Exploration-Production

 

1.4.2.1 Production

 
Hydrocarbon production   1H22   1H21   1H22 vs 1H21 
EP (kboe/d)              2,314  2,295  +1% 
Liquids (kb/d)           1,449  1,428  +1% 
Gas (Mcf/d)              4,706  4,738  -1% 
 

1.4.2.2 Results

 
In millions of dollars, except effective tax rate  1H22    1H21   1H22 vs 1H21 
Adjusted net operating income*                     9,734   4,188  x2.3 
including adjusted income from equity affiliates   642     549    +17% 
Effective tax rate**                               47.1%   39.5% 
Organic investments                                3,299   2,838  +16% 
Net acquisitions                                   2,541   29     x87.6 
Net investments                                    5,840   2,867  x2 
Operating cash flow before working capital 
 changes***                                        14,686  8,086  +82% 
Cash flow from operations***                       14,536  8,571  +70% 
 

* Details on adjustment items are shown in the business segment information annex to financial statements.

 

** 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).

 

*** Excluding financial charges, except those related to leases.

 

Adjusted net operating income for Exploration & Production was $9,734 million in the first half 2022, 2,3 times higher in the first half 2021, thanks to the sharp increase in oil and gas prices.

 

Operating cash flow before working capital changes increased by 82% to $14,686 million in the first half 2022, in line with higher oil and gas prices.

 

1.4.3 Downstream (Refining & Chemicals and Marketing & Services)

 

1.4.3.1 Results

 
In millions of dollars                              1H22   1H21   1H22 vs 1H21 
Adjusted net operating income*                      4,618  1,455  x3.2 
Organic investments                                 878    803    +9% 
Net acquisitions                                    (125)  (104)  ns 
Net investments                                     753    699    +8% 
Operating cash flow before working capital 
 changes**                                          5,444  2,332  x2.3 
Cash flow from operations**                         6,111  4,330  +41% 
 

* Detail of adjustment items shown in the business segment information annex to financial statements.

 

** Excluding financial charges, except those related to leases.

 

1.4.3.2 Refining & Chemicals

 

1.4.3.2.1 Refinery and petrochemicals throughput and utilization rates

 
Refinery throughput and utilization rate*   1H22   1H21   1H22 vs 1H21 
Total refinery throughput (kb/d)            1,448  1,109  +31% 
France                                      324    131    x2.5 
Rest of Europe                              627    578    +8% 
Rest of world                               497    400    +24% 
Utlization rate based on crude only**       81%    58% 
 

* Includes refineries in Africa reported in the Marketing & Services segment.

 

** Based on distillation capacity at the beginning of the year, excluding Grandpuits (definitively shut down first quarter 2021) from 2021 and Lindsey refinery (divested) from second quarter 2021.

 
Petrochemicals production and utilization rate   1H22   1H21   1H22 vs 1H21 
Monomers* (kt)                                   2,611  2,829  -8% 
Polymers (kt)                                    2,461  2,377  +4% 
Vapocracker utilization rate**                   78%    88% 
 

* Olefins.

 

** Based on olefins production from steamcrackers and their treatment capacity at the start of the year.

 

Refinery throughput Increased by 31% in the first half 2022 over one year due to the recovery in demand, particularly in Europe and the United States, the restart of the Donges refinery in France and the Leuna refinery in Germany, which was scheduled for a major turnaround in the second quarter 2021, as well as the restart, in 2021, of the distillation unit of the Normandy refinery in France.

 

Monomer production was down 8% in the first half 2022 year-on-year, mainly due to planned turnarounds at the Antwerp in Belgium and Feyzin in France as well as construction affecting sites in the U.S.

 

1.4.3.2.2 Results

 
In millions of dollars                              1H22   1H21   1H22 vs 1H21 
Adjusted net operating income*                      3,880  754    x5.1 
Organic investments                                 510    501    +2% 
Net acquisitions                                    (34)   (55)   ns 
Net investments                                     476    446    +7% 
Operating cash flow before working capital 
 changes**                                          4,396  1,147  x3.8 
Cash flow from operations**                         4,633  3,228  +44% 
 

* Detail of adjustment items shown in the business segment information annex to financial statements.

 

** Excluding financial charges, except those related to leases.

 

Adjusted net operating income for the Refining-Chemicals was exceptional: $3,880 million in the first half of 2022 compared to $754 million a year ago, due to higher refined volumes in response to the recovery in demand in Europe and the United States, very high margins on distillates and gasoline in the context of reduced imports of Russian petroleum products, as well as the outperformance of crude oil and petroleum product trading activities.

 

Operating cash flow before working capital changes also increased sharply to to $4,396 million in the first half 2022.

 

1.4.3.3 Marketing & Services

 

1.4.3.3.1 Petroleum product sales

 
Sales in kb/d*                     1H22   1H21   1H22 vs 1H21 
Total Marketing & Services sales   1,464  1,458  - 
Europe                             804    783    +3% 
Rest of world                      661    674    -2% 
 

* Excludes trading and bulk refining sales.

 

Sales of petroleum products were stable in the first half 2022 compared to the same periods last year, as the recovery in aviation and network activities worldwide offset the decline in sales to commercial and industrial customers, particularly in Europe.

 

1.4.3.3.2 Results

 
In millions of dollars                              1H22   1H21   1H22 vs 1H21 
Adjusted net operating income*                      738    701    +5% 
Organic investments                                 368    302    +22% 
Net acquisitions                                    (91)   (49)   ns 
Net investments                                     277    253    +9% 
Operating cash flow before working capital 
 changes**                                          1,048  1,185  -12% 
Cash flow from operations**                         1,478  1,102  +34% 
 

* Detail of adjustment items shown in the business segment information annex to financial statements.

 

** Excluding financial charges, except those related to leases.

 

In first half 2022, adjusted net operating income was $738 million, up 5% year-on-year, thanks mainly to the recovery of the network and aviation activities.

 

Operating cash flow before working capital changes was down 12% year-on-year to $1,048 million in the first half 2022, mainly due to the fiscal effect of higher prices on the valuation of petroleum product inventories.

 

1.5 TotalEnergies results

 

1.5.1 Adjusted net operating income from business segments

 

Adjusted net operating income for the sectors was $19,958 million in the first half 2022, compared to $7,519 million a year earlier, due to higher oil and gas prices, refining margins and the good performance of trading activities.

 

1.5.2 Adjusted net income (TotalEnergies share)

 

Adjusted net income (TotalEnergies share) was $18,773 million in the first half 2022 compared to $6,466 million a year earlier, due to higher oil and gas prices, refining margins and the good performance of trading activities.

 

Adjusted net income excludes the after-tax inventory effect, special items and impact of changes in fair value(1) .

 

Total net income adjustments(2) were $(8,137) million in the first half 2022. Taking into account notably the impact of new sanctions prohibiting the export of LNG technologies benefiting a Russian company on the execution ability of the Arctic LNG 2 project, TotalEnergies took an impairment of $4.1 billion in its accounts as of March 31 2022. TotalEnergies recorded in its accounts as of June 30 2022 a new $3.5 billion impairment charge related mainly to the potential impact of international sanctions on the value of its Novatek stake.

 

The effective tax rate for TotalEnergies was 39.0% in the first half 2022, compared to 34.4% in the first half 2021.

 

1.5.3 Adjusted earnings per share

 

Adjusted fully-diluted earnings per share was $7.14 in the first half 2022, calculated based on 2,602 million weighted-average diluted shares, compared to $2.38 a year earlier.

 

As of June 30, 2022, the number of fully-diluted shares was 2,578 million.

 

As part of its shareholder return policy, TotalEnergies repurchased 55.3 million shares for cancellation in the first half of 2022 for $3 billion.

 

1.5.4 Acquisitions -- asset sales

 

Acquisitions were $3,864 million in the first half 2022 and included notably the bonus paid to the State of Brazil and the payments to Petrobras related to the award of the Atapu and Sepia Production Sharing Contracts in Brazil, as well as the bonus related to the offshore wind concessions in New York Bight and North Carolina, in the United States.

 

Asset sales were $866 million in the first half 2022 and included notably the partial sale of the Landivisiau power generation plant in France, a payment related to the sale of interests in the CA1 offshore block in Brunei and the sale by SunPower of its Enphase shares.

 

1.5.5 Net cash flow

 

TotalEnergies' net cash flow(3) was $17,061 million in the first half 2022 compared to $4,551 million a year earlier, which takes into account the $13.1 billion increase in operating cash flow before changes in working capital, partially offset by a $631 million increase in net investments to $7,798 million in the first half 2022.

 

1.5.6 Profitability

 

The return on equity was 27.1% for the twelve months ended June 30, 2022.

 
                                      July 1,        April 1,    July 1, 
                                       2021June 30,   2021March   2020June 30, 
In millions of dollars                 2022           31, 2022    2021 
Adjusted net income                   30,716         24,382      8,786 
Average adjusted shareholders' 
 equity                               113,333        111,794     105,066 
Return on equity (ROE)                27.1%          21.8%       8.4% 
 

The return on average capital employed was 23.1% for the twelve months ended June 30, 2022.

 
                                July 1,        April 1,        July 1, 
                                 2021June 30,   2021March 31,   2020June 30, 
In millions of dollars           2022           2022            2021 
Adjusted net operating income   32,177         25,803          10,252 
Average capital employed        139,377        143,517         142,172 
ROACE                           23.1%          18.0%           7.2% 
 

(1) Adjustment items shown on page --.

(2) Details shown on page -- and in the appendix to the financial statements.

 

(3) Net cash flow = cash flow - net investments (including other transactions with non-controlling interest).

 

1.6 TotalEnergies SE accounts

 

Net income for TotalEnergies SE, the parent company, was EUR3,702 million in the first half 2022 compared to EUR4,568 in the first half 2021.

 

1.7 2022 Sensitivities*

 
                                        Estimated impact    Estimated impact 
                                        on adjusted net     on cash flow from 
                     Change             operating income    operations 
Dollar               +/- 0.1 $ per EUR  -/+ 0.1 B$          0 B$ 
Average liquids 
 price**             +/-10 $/b          +/- 2.7 B$          +/- 3.2 B$ 
European gas price 
 - NBP               +/-10 $/Mbtu       +/- 3.0 B$          +/- 3.0 B$ 
Variable cost 
 margin, European 
 refining (VCM)      +/-10 $/t          +/- 0.4 B$          +/- 0.5 B$ 
 

* Sensitivities are revised once per year upon publication of the previous year's fourth quarter results. Sensitivities are estimates based on assumptions about TotalEnergies' portfolio in 2022. Actual results could vary significantly from estimates based on the application of these sensitivities. The impact of the $-EUR sensitivity on adjusted net operating income is essentially attributable to Refining & Chemicals.

 

** In a 60 $/b Brent environment.

 

1.8 Summary and outlook

 

Oil and gas prices, while volatile, have remained at high levels since the beginning of the third quarter. Due to the limited additional spare capacity of production and refining at the global level, market disruptions linked to the sanctions against Russia and the counter-sanctions implemented by Russia, the supply-demand balance of energy markets are expected to remain fragile and support prices, especially gas.

 

In the oil markets however, the price of Brent retreated to a level close to $100/bbl in July, due to negative expectations on global growth, and therefore on oil demand, in response to high energy prices and inflation.

 

Gas prices are expected to remain high, particularly in Europe where gas indices exceeded $50/Mbtu in early July for winter 2022-23 futures contracts, due to fears of a shutdown in pipeline exports from Russia to Europe. Local electricity markets are also impacted by gas prices.

 

The Company is mobilizing its human and financial resources to contribute to the diversification of Europe's gas supply by maximizing the use of its LNG regasification capacity. Given the evolution of oil and gas prices in recent months and the lag effect on pricing formulas, TotalEnergies anticipates that its average LNG selling price should be more than $15/Mbtu in the third quarter of 2022. However, the Company's LNG operations will be affected by the outage of the Freeport LNG plant in the third quarter.

 

Despite the approximately 40 kboe/d increase in planned maintenance in the third quarter compared to the second quarter, TotalEnergies expects production to be stable compared to the second quarter due to the contribution of new projects, notably in Brazil with the production ramp-up of Mero 1 and the entry into Sépia and Atapu. The Refining business aims to maintain a high utilization rate.

 

With nearly $8 billion in investments recorded at the end of June, TotalEnergies anticipates net investments of around $16 billion in 2022, 25% of which will be in Renewables & Electricity.

 

Given the strong cash flow generation and strong balance sheet, the Board of Directors has decided to prioritize countercyclical opportunities to accelerate the Company's transformation. The shareholder return policy is reinforced through dividend growth of 5% and the continuation of the share buyback program of $2 billion in the third quarter.

 

1.9 Other information

 

1.9.1 Results from Russian assets

 
                          1H22                      2021 
                                        Operating                 Operating 
                                         cash flow                 cash flow 
                                         before                    before 
                          Adjusted net   working    Adjusted net   working 
                           operating     capital     operating     capital 
                           income        changes     income        changes 
Russian Upstream Assets   1,727         1,144       2,092         1,613 
 

Capital Employed by TotalEnergies in Russia as at June 30, 2022 was $8,760 million, after taking into account the $3,513 million impairment and the impact of the evolution of the ruble/dollar exchange rate between March 31, 2022 and June 30, 2022, which leads to a $2,066 million revaluation of Capital Employed on the balance sheet as at June 30, 2022.

 

1.9.2 Operating information by segment

 

1.9.2.1 Company's production (Exploration & Production + iGRP)

 
Combined liquids and gas production by region 
(kboe/d)                                            1H22   1H21   1H22 vs 1H21 
Europe and Central Asia                             1,007  1,018  -1% 
Africa                                              479    542    -12% 
Middle East and North Africa                        675    652    +3% 
Americas                                            403    377    +7% 
Asia-Pacific                                        227    216    +5% 
Total production                                    2,791  2,805  - 
includes equity affiliates                          702    740    -5% 
 
 
Liquids production by region (kb/d)   1H22   1H21   1H22 vs 1H21 
Europe and Central Asia               343    363    -5% 
Africa                                362    407    -11% 
Middle East and North Africa          542    500    +8% 
Americas                              216    181    +19% 
Asia-Pacific                          42     35     +21% 
Total production                      1,505  1,486  +1% 
includes equity affiliates            206    207    -1% 
 
 
Gas production by region (Mcf/d)   1H22   1H21   1H22 vs 1H21 
Europe and Central Asia            3,563  3,523  +1% 
Africa                             594    686    -13% 
Middle East and North Africa       734    845    -13% 
Americas                           1,052  1,098  -4% 
Asia-Pacific                       1,054  1,056  - 
Total production                   6,997  7,208  -3% 
includes equity affiliates         2,673  2,875  -7% 
 

1.9.2.2 Downstream (Refining & Chemicals and Marketing & Services)

 
Petroleum product sales by region (kb/d)   1H22   1H21   1H22 vs 1H21 
Europe                                     1,724  1,540  +12% 
Africa                                     747    665    +12% 
Americas                                   849    785    +8% 
Rest of world                              618    493    +25% 
Total consolidated sales                   3,939  3,483  +13% 
Includes bulk sales                        409    368    +11% 
Includes trading                           2,065  1,658  +25% 
 
 
Petrochemicals production* (kt)   1H22   1H21   1H22 vs 1H21 
Europe                            2,282  2,512  -9% 
Americas                          1,240  1,235  - 
Middle East and Asia              1,549  1,459  +6% 
* Olefins, polymers 
 

* Olefins, polymers

 

1.9.2.3 Renewables

 
Installed 
power 
generation 
gross 
capacity 
(GW)(1),(2)    1H22                                    1H21 
                      Onshore  Offshore                       Onshore  Offshore 
               Solar  Wind     Wind      Other  Total  Solar  Wind     Wind      Other  Total 
France         0.7    0.5      0.0       0.1    1.3    0.5    0.5      0.0       0.1    1.0 
Rest of 
 Europe        0.2    1.1      0.0       0.0    1.3    0.1    1.0      0.0       0.1    1.1 
Africa         0.1    0.0      0.0       0.0    0.1    0.1    0.0      0.0       0.0    0.1 
Middle East    0.7    0.0      0.0       0.0    0.7    0.3    0.0      0.0       0.0    0.3 
North America  1.1    0.0      0.0       0.0    1.1    0.8    0.0      0.0       0.0    0.9 
South America  0.4    0.3      0.0       0.0    0.7    0.4    0.1      0.0       0.0    0.5 
India          4.9    0.2      0.0       0.0    5.1    3.5    0.1      0.0       0.0    3.6 
Asia-Pacific   1.2    0.0      0.1       0.0    1.2    0.7    0.0      0.0       0.0    0.7 
Total          9.2    2.1      0.1       0.2    11.6   6.4    1.8      0.0       0.1    8.3 
 

(1) Includes 20% of gross capacity of Adani Green Energy Ltd effective first quarter 2021.

 

(2) End-of-period data.

 
Power 
generation 
gross 
capacity from 
renewables in 
construction 
(GW)(1),(2)    1H22                                    1H21 
                      Onshore  Offshore                       Onshore  Offshore 
               Solar  Wind     Wind      Other  Total  Solar  Wind     Wind      Other  Total 
France         0.2    0.2      0.0       0.1    0.4    0.3    0.1      0.0       0.1    0.5 
Rest of 
 Europe        0.0    0.0      1.1       0.0    1.1    0.1    0.1      1.1       0.0    1.3 
Africa         0.0    0.0      0.0       0.0    0.0    0.0    0.0      0.0       0.0    0.0 
Middle East    0.4    0.0      0.0       0.0    0.4    0.8    0.0      0.0       0.0    0.8 
North America  1.3    0.0      0.0       0.0    1.3    0.3    0.0      0.0       0.0    0.3 
South America  0.0    0.0      0.0       0.0    0.0    0.0    0.2      0.0       0.0    0.2 
India          0.9    0.3      0.0       0.0    1.2    0.9    0.2      0.0       0.0    1.1 
Asia-Pacific   0.1    0.0      0.6       0.0    0.7    0.5    0.0      0.6       0.0    1.1 
Total          2.8    0.5      1.7       0.1    5.2    2.8    0.6      1.8       0.1    5.4 
 

(1) Includes 20% of gross capacity of Adani Green Energy Ltd effective first quarter 2021.

 

(2) End-of-period data.

 
Power 
generation 
gross 
capacity from 
renewables in 
development 
(GW)(1),(2)    1H22                                    1H21 
                      Onshore  Offshore                       Onshore  Offshore 
               Solar  Wind     Wind      Other  Total  Solar  Wind     Wind      Other  Total 
France         2.3    0.5      0.0       0.0    2.8    3.2    0.8      0.0       0.0    4.0 
Rest of 
 Europe        4.8    0.3      4.4       0.1    9.5    5.3    0.3      0.4       0.0    6.0 
Africa         0.6    0.1      0.0       0.1    0.8    0.4    0.1      0.0       0.2    0.6 
Middle East    1.8    0.0      0.0       0.0    1.8    0.1    0.0      0.0       0.0    0.1 
North America  6.2    0.1      4.0       0.8    11.0   3.5    0.2      0.0       0.7    4.3 
South America  0.6    0.0      0.0       0.2    0.8    0.6    1.0      0.0       0.0    1.7 
India          3.9    0.1      0.0       0.0    4.0    6.2    0.1      0.0       0.0    6.3 
Asia-Pacific   1.7    0.2      1.2       0.1    3.2    1.1    0.0      0.0       0.0    1.1 
Total          21.7   1.3      9.6       1.3    33.9   20.3   2.5      0.4       0.8    24.0 
 

(1) Includes 20% of gross capacity of Adani Green Energy Ltd effective first quarter 2021.

 

(2) End-of-period data.

 
Gross 
renewables 
capacity 
covered by 
PPA at 
06/30/2022 
(GW)         In operation                            In construction                         In development 
                    Onshore  Offshore                       Onshore  Offshore                       Onshore  Offshore 
             Solar  Wind     Wind      Other  Total  Solar  Wind     Wind      Other  Total  Solar  Wind     Wind      Other  Total 
Europe       0.9    1.6      0.0       X      2.6    X      X        0.8       X      1.2    3.4    0.2      0.0       X      3.6 
Asia         6.0    0.2      X         X      6.4    0.9    0.3      0.6       0.0    1.8    4.3    X        0.0       X      4.5 
North 
 America     1.0    X        0.0       X      1.1    1.3    0.0      0.0       X      1.3    X      X        0.0       X      X 
Rest of 
 World       1.2    0.3      0.0       X      1.5    0.4    0.0      0.0       X      0.5    1.9    0.0      0.0       0.3    2.2 
Total        9.2    2.1      X         X      11.5   2.8    0.5      1.4       X      4.8    9.7    0.3      0.0       0.5    10.5 
 

X : not specified, capacity < 0.2 GW.

 
PPA average 
price at 
06/30/2022 
($/MWh)      In operation                            In construction                         In development 
                    Onshore  Offshore                       Onshore  Offshore                       Onshore  Offshore 
             Solar  Wind     Wind      Other  Total  Solar  Wind     Wind      Other  Total  Solar  Wind     Wind      Other  Total 
Europe       201    115      -         X      145    X      X        72        X      75     44     85       -         X      46 
Asia         70     43       X         X      70     55     51       254       -      115    39     X        -         X      39 
North 
 America     121    X        -         X      125    28     -        -         X      28     X      X        -         X      X 
Rest of 
 World       90     54       -         X      82     18     -        -         X      18     76     -        -         -      76 
Total        90     100      X         X      93     38     64       146       X      73     43     81       -         145    45 
 

X : not specified, capacity < 0.2 GW.

 

1.9.3 Adjustment items to net income (TotalEnergies share)

 
In millions of dollars                                     1H22     1H21 
Special items affecting net income (TotalEnergies share)   (9,539)  (1,930) 
Gain (loss) on asset sales                                 -        (1,379) 
Restructuring charges                                      (11)     (271) 
Impairments                                                (8,780)  (193) 
Other                                                      (748)    (87) 
After-tax inventory effect : FIFO vs. replacement cost     2,033    1,064 
Effect of changes in fair value                            (631)    (50) 
Total adjustments affecting net income                     (8,137)  (916) 
 

1.9.4 Reconciliation of adjusted EBITDA with consolidated financial statements

 

1.9.4.1 Reconciliation of net income (TotalEnergies share) to adjusted EBITDA

 
In millions of dollars                            1H22    1H21    1H22 vs 1H21 
Net income -- TotalEnergies share                 10,636  5,550   +92% 
Less: adjustment items to net income 
 (TotalEnergies share)                            8,137   916     x8.9 
Adjusted net income -- TotalEnergies share        18,773  6,466   x2.9 
Adjusted items 
Add: non-controlling interests                    165     147     +12% 
Add: income taxes                                 9,998   2,931   x3.4 
Add: depreciation, depletion and impairment of 
 tangible assets and mineral interests            6,186   6,285   -2% 
Add: amortization and impairment of intangible 
 assets                                           194     197     -2% 
Add: financial interest on debt                   1034    967     +7% 
Less: financial income and expense from cash & 
 cash equivalents                                 (189)   (156)   ns 
Adjusted EBITDA                                   36,161  16,837  x2.1 
 

1.9.4.2 Reconciliation of revenues from sales to adjusted EBITDA and net income (TotalEnergies share)

 
In millions of dollars                        1H22      1H21      1H22 vs 1H21 
Adjusted items 
Revenues from sales                           134,398   80,310    +67% 
Purchases, net of inventory variation         (86,785)  (51,397)  ns 
Other operating expenses                      (15,029)  (13,576)  ns 
Exploration costs                             (253)     (290)     ns 
Other income                                  550       554       -1% 
Other expense, excluding amortization and 
 impairment of intangible assets              (604)     (137)     ns 
Other financial income                        350       374       -6% 
Other financial expense                       (271)     (261)     ns 
Net income (loss) from equity affiliates      3,805     1,260     x3 
Adjusted EBITDA                               36,161    16,837    x2.1 
Adjusted items 
Less: depreciation, depletion and impairment 
 of tangible assets and mineral interests     (6,186)   (6,285)   ns 
Less: amortization of intangible assets       (194)     (197)     ns 
Less: financial interest on debt              (1,034)   (967)     ns 
Add: financial income and expense from cash 
 & cash equivalents                           189       156       +21% 
Less: income taxes                            (9,998)   (2,931)   ns 
Less: non-controlling interests               (165)     (147)     ns 
Add: adjustment -- TotalEnergies share        (8,137)   (916)     ns 
Net income -- TotalEnergies share             10,636    5,550     +92% 
 

1.9.5 Investments -- Divestments

 
In millions of dollars                              1H22   1H21   1H22 vs 1H21 
Organic investments (a)                             4,800  5,181  -7% 
Capitalized exploration                             212    488    -57% 
Increase in non-current loans                       511    672    -24% 
Repayment of non-current loans, excluding organic 
 loan repayment from equity affiliates              (609)  (185)  ns 
Change in debt from renewable projects 
 (TotalEnergies share)                              (190)  (171)  ns 
Acquisitions (b)                                    3,864  2,870  +35% 
Asset sales (c)                                     866    884    -2% 
Change in debt from renewable projects (partner 
 share)                                             174    105    +66% 
Net acquisitions                                    2,998  1,986  +51% 
Net investments (a + b - c)                         7,798  7,167  +9% 
Other transactions with non-controlling interests 
(d)                                                 -      -      ns 
Organic loan repayment from equity affiliates (e)   (725)  (108)  ns 
Change in debt from renewable projects financing* 
 (f)                                                364    276    +32% 
Capex linked to capitalized leasing contracts (g)   73     47     +55% 
Expenditures related to carbon credits (h)          4      -      ns 
Cash flow used in investing activities (a + b - c 
 - d + e + f - g - h)                               7,360  7,288  +1% 
 

* Change in debt from renewable projects (TotalEnergies share and partner share).

 

1.9.6 Cash-flow

 
In millions of dollars                           1H22     1H21    1H22 vs 1H21 
Operating cash flow before working capital 
 changes w/o financials charges (DACF)           25,626   12,511  x2 
Financial charges                                (767)    (793)   ns 
Operating cash flow before working capital 
 changes (a)*                                    24,859   11,718  x2.1 
(Increase) decrease in working capital**         (2,614)  259     ns 
Inventory effect                                 2,406    1,346   +79% 
Capital gain from renewable projects sale        (25)     (66)    ns 
Organic loan repayment from equity affiliates    (725)    (108)   ns 
Cash flow from operations                        23,901   13,149  +82% 
Organic investments (b)                          4,800    5,181   -7% 
Free cash flow after organic investments, w/o 
 net asset sales (a - b)                         20,059   6,537   x3.1 
Net investments (c)                              7,798    7,167   +9% 
Net cash flow (a - c)                            17,061   4,551   x3.7 
 

* 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. Historical data have been restated to cancel the impact of fair valuation of iGRP sector's contracts.

 

** Changes in working capital are presented excluding the mark-to-market effect of iGRP's contracts.

 

1.9.7 Gearing ratio

 
In millions of dollars                      30/06/2022  31/03/2022  30/06/2021 
Current borrowings*                         14,589      16,759      15,795 
Other current financial liabilities         401         502         322 
Current financial assets*(,) **             (7,697)     (7,231)     (4,326) 
Net financial assets classified as held 
 for sale                                   (14)        (38)        - 
Non-current financial debt*                 39,233      38,924      44,687 
Non-current financial assets*               (692)       (587)       (2,726) 
Cash and cash equivalents                   (32,848)    (31,276)    (28,643) 
Net debt (a)                                12,972      17,053      25,109 
Shareholders' equity - TotalEnergies share  116,688     116,480     108,096 
Non-controlling interests                   3,309       3,375       2,480 
Shareholders' equity (b)                    119,997     119,855     110,576 
Net-debt-to-capital ratio = a / (a+b)       9.8%        12.5%       18.5% 
Leases (c)                                  7,963       8,028       7,702 
Net-debt-to-capital ratio including leases 
 (a+c) / (a+b+c)                            14.9%       17.3%       22.9% 
 

* Excludes leases receivables and leases debts.

 

** Including initial margins held as part of the Company's activities on organized markets.

 

1.9.8 Return on average capital employed

 

1.9.8.1 Twelve months ended June 30, 2022

 
               Integrated 
               Gas,          Exploration 
In millions    Renewables &  &             Refining &    Marketing & 
of dollars     Power         Production    Chemicals     Services      Company 
Adjusted net 
 operating 
 income        9,973         15,985        5,035         1,655         32,177 
Capital 
 employed at 
 06/30/2021*   49,831        76,013        9,285         8,439         141,720 
Capital 
 employed at 
 06/30/2022*   54,174        70,248        7,958         7,475         137,035 
ROACE          19.2%         21.9%         58.4%         20.8%         23.1% 
 

1.9.8.2 Twelve months ended March 31, 2022

 
               Integrated 
               Gas,          Exploration 
In millions    Renewables &  &             Refining &    Marketing & 
of dollars     Power         Production    Chemicals     Services      Company 
Adjusted net 
 operating 
 income        8,309         13,479        2,786         1,606         25,803 
Capital 
 employed at 
 03/31/2021*   48,423        78,170        10,403        8,198         145,180 
Capital 
 employed at 
 03/31/2022*   54,740        71,518        8,847         7,751         141,853 
ROACE          16.1%         18.0%         28.9%         20.1%         18.0% 
 

* At replacement cost (excluding after-tax inventory effect).

 

1.10 Principal risks and uncertainties for the remaining six months of 2022

 

The Company and its businesses are subject to various risks relating to changing political, economic, monetary, legal, environmental, social, industrial, competitive, operating and financial conditions. A description of such risk factors is provided in TotalEnergies' 2021 Universal Registration Document filed with the Autorité des marchés financiers (French Financial Markets Authority) on March 25, 2022. These conditions are subject to change not only in the six months remaining in the current financial year, but also in the years to come.

 

Additionally, a description of certain risks is included in the Notes to the condensed Consolidated Financial Statements for the first half of 2022 (page of this half-year financial report).

 

1.11 Major related parties' transactions

 

Information concerning the major related parties' transactions for the first six months of 2022 is provided in Note 6 to the condensed Consolidated Financial Statements for the first half of 2022 (page of this half-year financial report).

 

Disclaimer

 

The terms "TotalEnergies", "TotalEnergies company" and "Company" in this document are used to designate TotalEnergies SE and the consolidated entities directly or indirectly controlled by TotalEnergies SE. Likewise, the words "we", "us" and "our" may also be used to refer to these entities or their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate and independent legal entities.

 

This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TotalEnergies. This document may also contain statements regarding the perspectives, objectives, areas of improvement and goals of TotalEnergies, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by TotalEnergies, it being specified that the means to be deployed do not depend solely on TotalEnergies. 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 TotalEnergies 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.

 

Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. The information on risk factors that could have a significant adverse effect on TotalEnergies' business, financial condition, including its operating income and cash flow, reputation, outlook or the value of financial instruments issued by TotalEnergies is provided in the most recent version of the Universal Registration Document which is filed by TotalEnergies SE with the French Autorité des Marchés Financiers and the annual report on Form 20-F filed with the United States Securities and Exchange Commission ("SEC").

 

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 TotalEnergies. In addition to IFRS measures, certain alternative performance indicators are presented, such as performance indicators excluding the adjustment items described below (adjusted operating income, adjusted net operating income, adjusted net income), return on equity (ROE), return on average capital employed (ROACE), gearing ratio, operating cash flow before working capital changes, the shareholder rate of return. These indicators are meant to facilitate the analysis of the financial performance of TotalEnergies and the comparison of income between periods. They allow investors to track the measures used internally to manage and measure the performance of TotalEnergies.

 

These 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 asset 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) 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 TotalEnergies' principal 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 price differentials 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.

(iii) Effect of changes in fair value

 

The effect of changes in fair value presented as an adjustment item reflects, for some transactions, differences between internal measures of performance used by TotalEnergies' management 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.

 

TotalEnergies, in its trading activities, enters into storage contracts, whose future effects are recorded at fair value in TotalEnergies' internal economic performance. IFRS precludes recognition of this fair value effect.

 

Furthermore, TotalEnergies 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, excluding the effect of changes in fair value.

 

Euro amounts presented for the fully adjusted-diluted earnings per share represent dollar amounts converted at the average euro-dollar (EUR-$) exchange rate for the applicable period and are not the result of financial statements prepared in euros.

 

Cautionary Note to U.S. Investors -- The SEC permits oil and gas companies, in their filings with the SEC, to separately disclose proved, probable and possible reserves that a company has determined in accordance with SEC rules. We may use certain terms in this press release, such as "potential reserves" or "resources", that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in the Form 20-F of TotalEnergies SE, File Ndeg 1-10888, available from us at 2, place Jean Millier -- Arche Nord Coupole/Regnault - 92078 Paris-La Défense Cedex, France, or at our website totalenergies.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or on the SEC's website sec.gov.

 

2. CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2022

 

2.1 Statutory Auditors' Review Report on the half-yearly Financial Information

 

This is a free translation into English of the statutory auditors' review report on the half-yearly financial information issued in French and is provided solely for the convenience of English-speaking users. This report includes information relating to the specific verification of information given in the Group's half-yearly management report. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.

 

For the period from January 1(st) to June 30, 2022

 

To the Shareholders,

 

In compliance with the assignment entrusted to us by your Annual General Meeting and in accordance with the requirements of article L. 451-1-2 III of the French monetary and financial code ("code monétaire et financier"), we hereby report to you on:

   -- the review of the accompanying condensed half-yearly consolidated 
      financial statements of TotalEnergies SE for the period from January 1st 
      to June 30, 2022, 
 
   -- the verification of the information presented in the half-yearly 
      management report. 
 

These condensed half-yearly consolidated financial statements are the responsibility of the Board of Directors. Our role is to express a conclusion on these financial statements based on our review.

I -- Conclusion on the financial statements

 

We conducted our review in accordance with professional standards applicable in France.

 

A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-yearly consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 -- standard of the IFRSs as adopted by the European Union applicable to interim financial information.

II -- Specific verification

 

We have also verified the information presented in the half-yearly management report on the condensed half-yearly consolidated financial statements subject to our review.

 

We have no matters to report as to its fair presentation and consistency with the condensed half-yearly consolidated financial statements.

 

Neuilly-sur-Seine and Paris-La Défense, July 27, 2022

 

The Statutory Auditors

 

French original signed by

 
PricewaterhouseCoopers Audit            ERNST & YOUNG Audit 
Olivier Lotz  Cécile Saint-Martin  Laurent Vitse  Stéphane 
 Partner       Partner                   Partner       Pédron Partner 
 

2.2 Consolidated statement of income -- half-yearly

 

TotalEnergies

 

(unaudited)

 
(M$)(a)                                       1(st) half 2022  1(st) half 2021 
Sales                                         143,380          90,786 
Excise taxes                                  (8,985)          (10,520) 
Revenues from sales                           134,395          80,266 
Purchases, net of inventory variation         (85,091)         (50,117) 
Other operating expenses                      (15,664)         (13,597) 
Exploration costs                             (978)            (290) 
Depreciation, depletion and impairment of 
 tangible assets and mineral interests        (6,781)          (6,446) 
Other income                                  572              581 
Other expense                                 (3,595)          (957) 
Financial interest on debt                    (1,034)          (967) 
Financial income and expense from cash & 
 cash equivalents                             459              172 
Cost of net debt                              (575)            (795) 
Other financial income                        434              374 
Other financial expense                       (271)            (261) 
Net income (loss) from equity affiliates      (1,503)          201 
Income taxes                                  (10,088)         (3,248) 
CONSOLIDATED NET INCOME                       10,855           5,711 
TotalEnergies share                           10,636           5,550 
Non-controlling interests                     219              161 
Earnings per share ($)                        4.04             2.04 
Fully-diluted earnings per share ($)          4.02             2.03 
 

(a) Except for per share amounts.

 

2.3 Consolidated statement of comprehensive income -- half-yearly

 

TotalEnergies

 

(unaudited)

 
(M$)                                          1(st) half 2022  1(st) half 2021 
CONSOLIDATED NET INCOME                       10,855           5,711 
Other comprehensive income 
Actuarial gains and losses                    204              449 
Change in fair value of investments in 
 equity instruments                           (17)             68 
Tax effect                                    (42)             (154) 
Currency translation adjustment generated by 
 the parent company                           (7,137)          (2,934) 
ITEMS NOT POTENTIALLY RECLASSIFIABLE TO 
 PROFIT AND LOSS                              (6,992)          (2,571) 
Currency translation adjustment               3,535            1,777 
Cash flow hedge                               2,959            80 
Variation of foreign currency basis spread    70               (4) 
Share of other comprehensive income of 
 equity affiliates, net amount                2,464            451 
Other                                         (1)              - 
Tax effect                                    (1,059)          (57) 
ITEMS POTENTIALLY RECLASSIFIABLE TO PROFIT 
 AND LOSS                                     7,968            2,247 
TOTAL OTHER COMPREHENSIVE INCOME (NET 
 AMOUNT)                                      976              (324) 
COMPREHENSIVE INCOME                          11,831           5,387 
-- TotalEnergies share                        11,658           5,212 
-- Non-controlling interests                  173              175 
 

2.4 Consolidated statement of income -- quarterly

 

TotalEnergies

 

(unaudited)

 
(M$)(a)             2(nd) quarter 2022  1(st) quarter 2022  2(nd) quarter 2021 
Sales               74,774              68,606              47,049 
Excise taxes        (4,329)             (4,656)             (5,416) 
Revenues from 
 sales              70,445              63,950              41,633 
Purchases, net of 
 inventory 
 variation          (45,443)            (39,648)            (26,719) 
Other operating 
 expenses           (8,041)             (7,623)             (6,717) 
Exploration costs   (117)               (861)               (123) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests          (3,102)             (3,679)             (3,121) 
Other income        429                 143                 223 
Other expense       (1,305)             (2,290)             (298) 
Financial interest 
 on debt            (572)               (462)               (501) 
Financial income 
 and expense from 
 cash & cash 
 equivalents        245                 214                 77 
Cost of net debt    (327)               (248)               (424) 
Other financial 
 income             231                 203                 265 
Other financial 
 expense            (136)               (135)               (131) 
Net income (loss) 
 from equity 
 affiliates         (1,546)             43                  (680) 
Income taxes        (5,284)             (4,804)             (1,609) 
CONSOLIDATED NET 
 INCOME             5,804               5,051               2,299 
TotalEnergies 
 share              5,692               4,944               2,206 
Non-controlling 
 interests          112                 107                 93 
Earnings per share 
 ($)                2.18                1.87                0.80 
Fully-diluted 
 earnings per 
 share ($)          2.16                1.85                0.80 
 

(a) Except for per share amounts.

 

2.5 Consolidated statement of comprehensive income -- quarterly

 

TotalEnergies

 

(unaudited)

 
(M$)                2(nd) quarter 2022  1(st) quarter 2022  2(nd) quarter 2021 
CONSOLIDATED NET 
 INCOME             5,804               5,051               2,299 
Other 
comprehensive 
income 
Actuarial gains 
 and losses         204                 -                   449 
Change in fair 
 value of 
 investments in 
 equity 
 instruments        (20)                3                   56 
Tax effect          (53)                11                  (142) 
Currency 
 translation 
 adjustment 
 generated by the 
 parent company     (5,387)             (1,750)             1,239 
ITEMS NOT 
 POTENTIALLY 
 RECLASSIFIABLE TO 
 PROFIT AND LOSS    (5,256)             (1,736)             1,602 
Currency 
 translation 
 adjustment         2,523               1,012               (746) 
Cash flow hedge     3,222               (263)               (424) 
Variation of 
 foreign currency 
 basis spread       21                  49                  (4) 
Share of other 
 comprehensive 
 income of equity 
 affiliates, net 
 amount             2,548               (84)                (18) 
Other               (1)                 -                   (1) 
Tax effect          (1,112)             53                  100 
ITEMS POTENTIALLY 
 RECLASSIFIABLE TO 
 PROFIT AND LOSS    7,201               767                 (1,093) 
TOTAL OTHER 
 COMPREHENSIVE 
 INCOME (NET 
 AMOUNT)            1,945               (969)               509 
COMPREHENSIVE 
 INCOME             7,749               4,082               2,808 
-- TotalEnergies 
 share              7,705               3,953               2,670 
-- Non-controlling 
 interests          44                  129                 138 
 

2.6 Consolidated balance sheet

 

TotalEnergies

 
                                 March 31, 
                  June 30, 2022  2022           December 31,    June 30, 2021 
(M$)              (unaudited)    (unaudited)    2021            (unaudited) 
ASSETS 
Non-current 
assets 
Intangible 
 assets, net      37,020         32,504         32,484          33,359 
Property, plant 
 and equipment, 
 net              101,454        104,450        106,559         106,791 
Equity 
 affiliates: 
 investments and 
 loans            28,210         29,334         31,053          29,712 
Other 
 investments      1,383          1,490          1,625           2,247 
Non-current 
 financial 
 assets           1,612          1,490          2,404           3,778 
Deferred income 
 taxes            4,737          5,299          5,400           6,578 
Other 
 non-current 
 assets           3,075          3,033          2,797           2,800 
TOTAL 
 NON-CURRENT 
 ASSETS           177,491        177,600        182,322         185,265 
Current assets 
Inventories, net  28,542         24,456         19,952          19,162 
Accounts 
 receivable, 
 net              30,796         32,000         21,983          17,192 
Other current 
 assets           55,553         50,976         35,144          17,585 
Current 
 financial 
 assets           7,863          7,415          12,315          4,404 
Cash and cash 
 equivalents      32,848         31,276         21,342          28,643 
Assets 
 classified as 
 held for sale    313            856            400             456 
TOTAL CURRENT 
 ASSETS           155,915        146,979        111,136         87,442 
TOTAL ASSETS      333,406        324,579        293,458         272,707 
LIABILITIES & 
SHAREHOLDERS' 
EQUITY 
Shareholders' 
equity 
Common shares     8,163          8,137          8,224           8,224 
Paid-in surplus 
 and retained 
 earnings         125,554        123,008        117,849         110,967 
Currency 
 translation 
 adjustment       (14,019)       (13,643)       (12,671)        (11,087) 
Treasury shares   (3,010)        (1,022)        (1,666)         (8) 
TOTAL 
 SHAREHOLDERS' 
 EQUITY -- 
 TOTALENERGIES 
 SHARE            116,688        116,480        111,736         108,096 
Non-controlling 
 interests        3,309          3,375          3,263           2,480 
TOTAL 
 SHAREHOLDERS' 
 EQUITY           119,997        119,855        114,999         110,576 
Non-current 
 liabilities 
Deferred income 
 taxes            12,169         11,281         10,904          10,596 
Employee 
 benefits         2,341          2,610          2,672           3,305 
Provisions and 
 other 
 non-current 
 liabilities      23,373         21,649         20,269          20,716 
Non-current 
 financial debt   46,868         46,546         49,512          52,331 
TOTAL 
 NON-CURRENT 
 LIABILITIES      84,751         82,086         83,357          86,948 
Current 
 liabilities 
Accounts payable  49,700         46,869         36,837          29,752 
Other creditors 
 and accrued 
 liabilities      62,498         56,972         42,800          27,836 
Current 
 borrowings       16,003         18,252         15,035          16,983 
Other current 
 financial 
 liabilities      401            502            372             322 
Liabilities 
 directly 
 associated with 
 the assets 
 classified as 
 held for sale    56             43             58              290 
TOTAL CURRENT 
 LIABILITIES      128,658        122,638        95,102          75,183 
TOTAL 
 LIABILITIES & 
 SHAREHOLDERS' 
 EQUITY           333,406        324,579        293,458         272,707 
 

2.7 Consolidated statement of cash flow -- half-yearly

 

TotalEnergies

 

(unaudited)

 
(M$)                                          1(st) half 2022  1(st) half 2021 
CASH FLOW FROM OPERATING ACTIVITIES 
Consolidated net income                       10,855           5,711 
Depreciation, depletion, amortization and 
 impairment                                   7,899            6,760 
Non-current liabilities, valuation 
 allowances and deferred taxes                3,965            331 
(Gains) losses on disposals of assets         (178)            (370) 
Undistributed affiliates' equity earnings     3,261            682 
(Increase) decrease in working capital        (2,425)          (150) 
Other changes, net                            524              185 
CASH FLOW FROM OPERATING ACTIVITIES           23,901           13,149 
CASH FLOW USED IN INVESTING ACTIVITIES 
Intangible assets and property, plant and 
 equipment additions                          (8,607)          (5,085) 
Acquisitions of subsidiaries, net of cash 
 acquired                                     (82)             (170) 
Investments in equity affiliates and other 
 securities                                   (225)            (2,433) 
Increase in non-current loans                 (519)            (680) 
Total expenditures                            (9,433)          (8,368) 
Proceeds from disposals of intangible assets 
 and property, plant and equipment            330              271 
Proceeds from disposals of subsidiaries, net 
 of cash sold                                 151              229 
Proceeds from disposals of non-current 
 investments                                  250              279 
Repayment of non-current loans                1,342            301 
Total divestments                             2,073            1,080 
CASH FLOW USED IN INVESTING ACTIVITIES        (7,360)          (7,288) 
CASH FLOW USED IN FINANCING ACTIVITIES 
Issuance (repayment) of shares: 
-- Parent company shareholders                371              381 
-- Treasury shares                            (3,164)          (165) 
Dividends paid: 
-- Parent company shareholders                (3,753)          (4,184) 
-- Non-controlling interests                  (119)            (63) 
Net issuance (repayment) of perpetual 
 subordinated notes                           -                3,248 
Payments on perpetual subordinated notes      (274)            (234) 
Other transactions with non-controlling 
 interests                                    (5)              (55) 
Net issuance (repayment) of non-current debt  542              (839) 
Increase (decrease) in current borrowings     (2,046)          (6,031) 
Increase (decrease) in current financial 
 assets and liabilities                       4,863            (215) 
CASH FLOW FROM (USED IN) FINANCING 
 ACTIVITIES                                   (3,585)          (8,157) 
NET INCREASE (DECREASE) IN CASH AND CASH 
 EQUIVALENTS                                  12,956           (2,296) 
Effect of exchange rates                      (1,450)          (329) 
Cash and cash equivalents at the beginning 
 of the period                                21,342           31,268 
CASH AND CASH EQUIVALENTS AT THE OF THE 
 PERIOD                                       32,848           28,643 
 

2.8 Consolidated statement of cash flow -- quarterly

 

TotalEnergies

 

(unaudited)

 
(M$)                2(nd) quarter 2022  1(st) quarter 2022  2(nd) quarter 2021 
CASH FLOW FROM 
OPERATING 
ACTIVITIES 
Consolidated net 
 income             5,804               5,051               2,299 
Depreciation, 
 depletion, 
 amortization and 
 impairment         3,321               4,578               3,287 
Non-current 
 liabilities, 
 valuation 
 allowances and 
 deferred taxes     1,427               2,538               210 
(Gains) losses on 
 disposals of 
 assets             (165)               (13)                (85) 
Undistributed 
 affiliates' 
 equity earnings    2,999               262                 1,255 
(Increase) 
 decrease in 
 working capital    2,498               (4,923)             669 
Other changes, net  400                 124                 (84) 
CASH FLOW FROM 
 OPERATING 
 ACTIVITIES         16,284              7,617               7,551 
CASH FLOW USED IN 
 INVESTING 
 ACTIVITIES 
Intangible assets 
 and property, 
 plant and 
 equipment 
 additions          (5,150)             (3,457)             (2,675) 
Acquisitions of 
 subsidiaries, net 
 of cash acquired   (82)                -                   (170) 
Investments in 
 equity affiliates 
 and other 
 securities         (136)               (89)                (307) 
Increase in 
 non-current 
 loans              (278)               (241)               (380) 
Total expenditures  (5,646)             (3,787)             (3,532) 
Proceeds from 
 disposals of 
 intangible assets 
 and property, 
 plant and 
 equipment          153                 177                 45 
Proceeds from 
 disposals of 
 subsidiaries, net 
 of cash sold       63                  88                  - 
Proceeds from 
 disposals of 
 non-current 
 investments        35                  215                 216 
Repayment of 
 non-current 
 loans              413                 929                 167 
Total divestments   664                 1,409               428 
CASH FLOW USED IN 
 INVESTING 
 ACTIVITIES         (4,982)             (2,378)             (3,104) 
CASH FLOW USED IN 
 FINANCING 
 ACTIVITIES 
Issuance 
(repayment) of 
shares: 
-- Parent company 
 shareholders       371                 -                   381 
-- Treasury shares  (1,988)             (1,176)             - 
Dividends paid: 
-- Parent company 
 shareholders       (1,825)             (1,928)             (2,094) 
-- Non-controlling 
 interests          (97)                (22)                (53) 
Net issuance 
 (repayment) of 
 perpetual 
 subordinated 
 notes              (1,958)             1,958               - 
Payments on 
 perpetual 
 subordinated 
 notes              (138)               (136)               (147) 
Other transactions 
 with 
 non-controlling 
 interests          (10)                5                   - 
Net issuance 
 (repayment) of 
 non-current debt   508                 34                  51 
Increase 
 (decrease) in 
 current 
 borrowings         (2,703)             657                 (4,369) 
Increase 
 (decrease) in 
 current financial 
 assets and 
 liabilities        (731)               5,594               (67) 
CASH FLOW FROM 
 (USED IN) 
 FINANCING 
 ACTIVITIES         (8,571)             4,986               (6,298) 
NET INCREASE 
 (DECREASE) IN 
 CASH AND CASH 
 EQUIVALENTS        2,731               10,225              (1,851) 
Effect of exchange 
 rates              (1,159)             (291)               209 
Cash and cash 
 equivalents at 
 the beginning of 
 the period         31,276              21,342              30,285 
CASH AND CASH 
 EQUIVALENTS AT 
 THE OF THE 
 PERIOD             32,848              31,276              28,643 
 

2.9 Consolidated statement of changes in shareholders' equity

 

TotalEnergies

 

(unaudited)

 
                                       Paid-in 
                                       surplus                                       Shareholders' 
                                       and       Currency                            equity --                       Total 
                                       retained  translation                         TotalEnergies  Non-controlling  shareholders' 
(M$)            Common shares issued   earnings  adjustment   Treasury shares        Share          interests        equity 
                Number         Amount                         Number        Amount 
AS OF JANUARY 
 1, 2021        2,653,124,025  8,267   107,078   (10,256)     (24,392,703)  (1,387)  103,702        2,383            106,085 
Net income of 
 the first 
 half 2021      -              -       5,550     -            -             -        5,550          161              5,711 
Other 
 comprehensive 
 income         -              -       485       (823)        -             -        (338)          14               (324) 
Comprehensive 
 Income         -              -       6,035     (823)        -             -        5,212          175              5,387 
Dividend        -              -       (4,189)   -            -             -        (4,189)        (63)             (4,252) 
Issuance of 
 common 
 shares         10,589,713     31      350       -            -             -        381            -                381 
Purchase of 
 treasury 
 shares         -              -       -         -            (3,636,351)   (165)    (165)          -                (165) 
Sale of 
 treasury 
 shares(a)      -              -       (216)     -            4,570,220     216      -              -                - 
Share-based 
 payments       -              -       61        -            -             -        61             -                61 
Share 
 cancellation   (23,284,409)   (74)    (1,254)   -            23,284,409    1,328    -              -                - 
Net issuance 
 (repayment) 
 of perpetual 
 subordinated 
 notes          -              -       3,254     -            -             -        3,254          -                3,254 
Payments on 
 perpetual 
 subordinated 
 notes          -              -       (184)     -            -             -        (184)          -                (184) 
Other 
 operations 
 with non- 
 controlling 
 interests      -              -       26        (6)          -             -        20             (20)             - 
Other items     -              -       6         (2)          -             -        4              5                9 
AS OF JUNE 30, 
 2021           2,640,429,329  8,224   110,967   (11,087)     (174,425)     (8)      108,096        2,480            110,576 
Net income of 
 the second 
 half 2021      -              -       10,482    -            -             -        10,482         173              10,655 
Other 
 comprehensive 
 income         -              -       506       (1,584)      -             -        (1,078)        (44)             (1,122) 
Comprehensive 
 Income         -              -       10,988    (1,584)      -             -        9,404          129              9,533 
Dividend        -              -       (4,011)   -            -             -        (4,011)        (61)             (4,072) 
Issuance of 
common shares   -              -       -         -            -             -        -              -                - 
Purchase of 
 treasury 
 shares         -              -       -         -            (33,669,654)  (1,658)  (1,658)        -                (1,658) 
Sale of 
 treasury 
 shares(a)      -              -       -         -            2,975         -        -              -                - 
Share-based 
 payments       -              -       82        -            -             -        82             -                82 
Share 
cancellation    -              -       -         -            -             -        -              -                - 
Net issuance 
(repayment) of 
perpetual 
subordinated 
notes           -              -       -         -            -             -        -              -                - 
Payments on 
 perpetual 
 subordinated 
 notes          -              -       (184)     -            -             -        (184)          -                (184) 
Other 
 operations 
 with non- 
 controlling 
 interests      -              -       4         -            -             -        4              709              713 
Other items     -              -       3         -            -             -        3              6                9 
AS OF DECEMBER 
 31, 2021       2,640,429,329  8,224   117,849   (12,671)     (33,841,104)  (1,666)  111,736        3,263            114,999 
Net income of 
 the first 
 half 2022      -              -       10,636    -            -             -        10,636         219              10,855 
Other 
 comprehensive 
 income         -              -       2,370     (1,348)      -             -        1,022          (46)             976 
Comprehensive 
 Income         -              -       13,006    (1,348)      -             -        11,658         173              11,831 
Dividend        -              -       (3,803)   -            -             -        (3,803)        (119)            (3,922) 
Issuance of 
 common 
 shares         9,367,482      26      345       -            -             -        371            -                371 
Purchase of 
 treasury 
 shares         -              -       -         -            (58,458,536)  (3,164)  (3,164)        -                (3,164) 
Sale of 
 treasury 
 shares(a)      -              -       (315)     -            6,168,197     315      -              -                - 
Share-based 
 payments       -              -       157       -            -             -        157            -                157 
Share 
 cancellation   (30,665,526)   (87)    (1,418)   -            30,665,526    1,505    -              -                - 
Net issuance 
 (repayment) 
 of perpetual 
 subordinated 
 notes          -              -       (44)      -            -             -        (44)           -                (44) 
Payments on 
 perpetual 
 subordinated 
 notes          -              -       (183)     -            -             -        (183)          -                (183) 
Other 
 operations 
 with non- 
 controlling 
 interests      -              -       4         -            -             -        4              (9)              (5) 
Other items     -              -       (44)      -            -             -        (44)           1                (43) 
AS OF JUNE 30, 
 2022           2,619,131,285  8,163   125,554   (14,019)     (55,465,917)  (3,010)  116,688        3,309            119,997 
 

(a) Treasury shares related to the performance share grants.

 

2.10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FIRST SIX MONTHS 2022 (UNAUDITED)

 

1) Basis of preparation of the consolidated financial statements

 

The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and IFRS as published by the International Accounting Standards Board (IASB).

 

The interim consolidated financial statements of TotalEnergies SE and its subsidiaries (the Company) as of June 30, 2022, are presented in U.S. dollars and have been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting".

 

The accounting principles applied for the consolidated financial statements at June 30, 2022, are consistent with those used for the financial statements at December 31, 2021. Since January 1, 2020, the Company has 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.

 

The preparation of financial statements in accordance with IFRS for the closing as of June 30, 2022 requires the General 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 General Management and therefore could be revised as circumstances change or as a result of new information.

 

The main estimates, judgments and assumptions relate to the estimation of hydrocarbon reserves in application of the successful efforts method for the oil and gas activities, asset impairments, employee benefits, asset retirement obligations and income taxes. These estimates and assumptions are described in the Notes to the Consolidated Financial Statements as of December 31, 2021.

 

The interim consolidated financial statements are impacted by the Russian-Ukrainian conflict described in paragraph 7 Other risks and commitments. The Company has taken this environment into account in its estimates and recorded in its accounts as of March 31, 2022, an impairment of $(4,095) million, concerning notably Arctic LNG 2. As of June 30, 2022, TotalEnergies recorded in its accounts a new $(3,513) million impairment charge related mainly to the potential impact of international sanctions on the value of its Novatek stake.

 

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.

 

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

 

2) Changes in the Company structure

 

2.1) Main acquisitions and divestments

 

Integrated Gas, Renewables & Power

 

On February 28, 2022, TotalEnergies has successfully been named a winner of maritime lease area OCS-A 0538 by the BOEM (Bureau of Ocean Energy Management) in the New York Bight auction in United States.

 

This bid for the development of an offshore wind farm off the U.S. East Coast was won for a consideration of $795 million (100%) by both TotalEnergies and EnBW.

 

Located up to 47 nautical miles (87 kilometers) from the coast, the lease covers a 132 square miles (341 square kilometer) area that could accommodate a generation capacity of at least 3 GW, enough to provide power to about one million homes. The project is expected to come online by 2028.

 

Exploration & Production

   -- In January 2022, TotalEnergies has decided to initiate the contractual 
      process of withdrawing from the Yadana field and from MGTC in Myanmar, 
      both as operator and as shareholder, without any financial compensation 
      for TotalEnergies. As a result, TotalEnergies registered an impairment of 
      assets of $(201) million in operational result and of $(305) million in 
      TotalEnergies' share net result in the financial statements as of 
      December 31, 2021. This withdrawal became effective on 20 July 2022. 
 
   -- In February 2022, TotalEnergies announced its decision not to sanction 
      and so to withdraw from the North Platte deepwater project in the US Gulf 
      of Mexico. The decision not to continue with the project was taken as 
      TotalEnergies has better opportunities of allocation of its capital 
      within its global portfolio. An impairment of the project's assets has 
      been recorded in the consolidated financial statements of the first 
      quarter of 2022, for an amount of $(957) million in net income, 
      TotalEnergies' share. 
 
   -- In April 2022, TotalEnergies finalized the acquisition of the Atapu and 
      Sepia pre-salt oil fields offered by Brazil's National Agency of 
      Petroleum, Natural Gas and Biofuels (ANP) in the Transfer of Rights (ToR) 
      Surplus bidding round, that took place in December 2021. The details of 
      the acquisition are presented in Note 2.2 to the consolidated financial 
      statements. 
 

2.2) Major business combinations

 

Exploration & production

 

Transfer of rights in the Atapu and Sepia fields in Brazil

 

On 26 April 2022, Petrobras transferred to TotalEnergies 22.5% of the rights of the pre-salt Atapu oil field. Production started in 2020 and has reached a plateau of 160,000 barrels per day with a first Floating, Production, Storage and Offloading unit (FPSO). A second FPSO is planned to be sanctioned, which would increase the overall oil production of the field to around 350,000 b/d.

 

On 27 April 2022, Petrobras also transferred to TotalEnergies 28% of the rights of the pre-salt Sepia oil field. Production started in 2021 and is targeting a plateau of 180,000 barrels per day with a first Floating, Production, Storage and Offloading unit (FPSO). A second FPSO is planned to be sanctioned, which would increase the overall oil production of the field to around 350,000 b/d.

 

In accordance with IFRS 3, TotalEnergies 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.

 

2.3) Divestment projects

 

As of June 30, 2022, there is no material divestment project recorded in "assets held for sale".

 

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 TotalEnergies and which is reviewed by the main operational decision-making body of the Company, 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 organization of the Company's activities is structured around the four followings segments:

   -- An Integrated Gas, Renewables & Power segment comprising integrated gas 
      (including LNG) and low carbon electricity businesses. It includes the 
      upstream and midstream LNG activity; 
 
   -- An Exploration & Production segment; Starting September 2021, it notably 
      includes the carbon neutrality activity that was previously reported in 
      the Integrated Gas, Renewables & Power 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.

 

Adjustment items

 

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

 

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 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 TotalEnergies's management 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.

TotalEnergies, in its trading activities, enters into storage contracts, whose future effects are recorded at fair value in the Company's internal economic performance. IFRS precludes recognition of this fair value effect.

 

Furthermore, TotalEnergies 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.

 

3.1) Information by business segment

 
                  Integrated 
                  Gas,         Exploration   Refining   Marketing 
1(st) half 2022   Renewables    &            &           & 
 (M$)             & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    22,575       4,672         66,069     50,056      8          -             143,380 
Intersegment 
 sales            3,360        27,623        22,062     983         133        (54,161)      - 
Excise taxes      -            -             (378)      (8,607)     -          -             (8,985) 
Revenues from 
 sales            25,935       32,295        87,753     42,432      141        (54,161)      134,395 
Operating 
 expenses         (22,629)     (11,468)      (80,653)   (40,294)    (850)      54,161        (101,733) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (648)        (4,773)       (769)      (514)       (77)       -             (6,781) 
Operating income  2,658        16,054        6,331      1,624       (786)      -             25,881 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      (1,677)      (3,426)       505        56          179        -             (4,363) 
Tax on net 
 operating 
 income           (554)        (7,739)       (1,391)    (521)       97         -             (10,108) 
Net operating 
 income           427          4,889         5,445      1,159       (510)      -             11,410 
Net cost of net 
 debt                                                                                        (555) 
Non-controlling 
 interests                                                                                   (219) 
Net income -- 
 TotalEnergies 
 share                                                                                       10,636 
 
 
                    Integrated 
1(st) half 2022     Gas,         Exploration   Refining   Marketing 
(adjustments)(a)    Renewables    &            &           & 
(M$)                & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales      (3)          -             -          -           -          -             (3) 
Intersegment sales  -            -             -          -           -          -             - 
Excise taxes        -            -             -          -           -          -             - 
Revenues from 
 sales              (3)          -             -          -           -          -             (3) 
Operating expenses  (723)        (873)         1,722      641         (433)      -             334 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interestst         (14)         (539)         -          (33)        (9)        -             (595) 
Operating 
 income(b)          (740)        (1,412)       1,722      608         (442)      -             (264) 
Net income (loss) 
 from equity 
 affiliates and 
 other items        (4,497)      (3,770)       169        (7)         106        -             (7,999) 
Tax on net 
 operating income   58           337           (326)      (180)       98         -             (13) 
Net operating 
 income(b)          (5,179)      (4,845)       1,565      421         (238)      -             (8,276) 
Net cost of net 
 debt               -            -             -          -           -          -             193 
Non-controlling 
 interests          -            -             -          -           -          -             (54) 
Net income -- 
 TotalEnergies 
 share              -            -             -          -           -          -             (8,137) 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

(b) Of which inventory valuation effect

 
 
-- On operating income-       1,722  684 
-- On net operating income-   1,597  503 
 
 
                  Integrated 
                  Gas,         Exploration   Refining   Marketing 
1(st) half 2022   Renewables    &            &           & 
(adjusted) (M$)   & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    22,578       4,672         66,069     50,056      8          -             143,383 
Intersegment 
 sales            3,360        27,623        22,062     983         133        (54,161)      - 
Excise taxes      -            -             (378)      (8,607)     -          -             (8,985) 
Revenues from 
 sales            25,938       32,295        87,753     42,432      141        (54,161)      134,398 
Operating 
 expenses         (21,906)     (10,595)      (82,375)   (40,935)    (417)      54,161        (102,067) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (634)        (4,234)       (769)      (481)       (68)       -             (6,186) 
Adjusted 
 operating 
 income           3,398        17,466        4,609      1,016       (344)      -             26,145 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      2,820        344           336        63          73         -             3,636 
Tax on net 
 operating 
 income           (612)        (8,076)       (1,065)    (341)       (1)        -             (10,095) 
Adjusted net 
 operating 
 income           5,606        9,734         3,880      738         (272)      -             19,686 
Net cost of net 
 debt                                                                                        (748) 
Non-controlling 
 interests                                                                                   (165) 
Adjusted net 
 income -- 
 TotalEnergies 
 share                                                                                       18,773 
 
 
               Integrated 
               Gas,         Exploration   Refining   Marketing 
1(st) half     Renewables    &            &           & 
2022 (M$)      & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
Total 
 expenditures  2,311        6,099         561        428         34         -             9,433 
Total 
 divestments   1,481        346           83         151         12         -             2,073 
Cash flow 
 from 
 operating 
 activities    4,285        14,536        4,633      1,478       (1,031)    -             23,901 
 
 
                  Integrated 
                  Gas,         Exploration   Refining   Marketing 
1(st) half 2021   Renewables    &            &           & 
 (M$)             & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    10,588       3,257         40,054     36,880      7          -             90,786 
Intersegment 
 sales            1,555        14,433        11,890     186         68         (28,132)      - 
Excise taxes      -            -             (630)      (9,890)     -          -             (10,520) 
Revenues from 
 sales            12,143       17,690        51,314     27,176      75         (28,132)      80,266 
Operating 
 expenses         (10,321)     (7,352)       (48,579)   (25,510)    (374)      28,132        (64,004) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (762)        (4,317)       (787)      (526)       (54)       -             (6,446) 
Operating income  1,060        6,021         1,948      1,140       (353)      -             9,816 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      682          (973)         211        23          (5)        -             (62) 
Tax on net 
 operating 
 income           (157)        (2,375)       (561)      (352)       54         -             (3,391) 
Net operating 
 income           1,585        2,673         1,598      811         (304)      -             6,363 
Net cost of net 
 debt                                                                                        (652) 
Non-controlling 
 interests                                                                                   (161) 
Net income -- 
 TotalEnergies 
 share                                                                                       5,550 
 
 
                    Integrated 
1(st) half 2021     Gas,         Exploration   Refining   Marketing 
(adjustments)(a)    Renewables    &            &           & 
(M$)                & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales      (44)         -             -          -           -          -             (44) 
Intersegment sales  -            -             -          -           -          -             - 
Excise taxes        -            -             -          -           -          -             - 
Revenues from 
 sales              (44)         -             -          -           -          -             (44) 
Operating expenses  (62)         (23)          1,131      213         -          -             1,259 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests          (148)        -             (13)       -           -          -             (161) 
Operating 
 income(b)          (254)        (23)          1,118      213         -          -             1,054 
Net income (loss) 
 from equity 
 affiliates and 
 other items        (96)         (1,482)       28         (43)        (62)       -             (1,655) 
Tax on net 
 operating income   59           (10)          (302)      (60)        2          -             (311) 
Net operating 
 income(b)          (291)        (1,515)       844        110         (60)       -             (912) 
Net cost of net 
 debt               -            -             -          -           -          -             10 
Non-controlling 
 interests          -            -             -          -           -          -             (14) 
Net income -- 
 TotalEnergies 
 share              -            -             -          -           -          -             (916) 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

 

(b) Of which inventory valuation effect

 
-- On operating income        1,140  206  - 
-- On net operating income-   937    148  - 
 
 
                  Integrated 
                  Gas,         Exploration   Refining   Marketing 
1(st) half 2021   Renewables    &            &           & 
(adjusted) (M$)   & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    10,632       3,257         40,054     36,880      7          -             90,830 
Intersegment 
 sales            1,555        14,433        11,890     186         68         (28,132)      - 
Excise taxes      -            -             (630)      (9,890)     -          -             (10,520) 
Revenues from 
 sales            12,187       17,690        51,314     27,176      75         (28,132)      80,310 
Operating 
 expenses         (10,259)     (7,329)       (49,710)   (25,723)    (374)      28,132        (65,263) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (614)        (4,317)       (774)      (526)       (54)       -             (6,285) 
Adjusted 
 operating 
 income           1,314        6,044         830        927         (353)      -             8,762 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      778          509           183        66          57         -             1,593 
Tax on net 
 operating 
 income           (216)        (2,365)       (259)      (292)       52         -             (3,080) 
Adjusted net 
 operating 
 income           1,876        4,188         754        701         (244)      -             7,275 
Net cost of net 
 debt                                                                                        (662) 
Non-controlling 
 interests                                                                                   (147) 
Adjusted net 
 income -- 
 TotalEnergies 
 share                                                                                       6,466 
 
 
               Integrated 
               Gas,         Exploration   Refining   Marketing 
1(st) half     Renewables    &            &           & 
2021 (M$)      & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
Total 
 expenditures  4,187        3,195         578        360         48         -             8,368 
Total 
 divestments   452          374           129        107         18         -             1,080 
Cash flow 
 from 
 operating 
 activities    1,347        8,571         3,228      1,102       (1,099)    -             13,149 
 
 
                  Integrated 
                  Gas,         Exploration   Refining   Marketing 
2(nd) quarter     Renewables    &            &           & 
2022 (M$)         & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    10,281       2,521         35,061     26,907      4          -             74,774 
Intersegment 
 sales            1,889        13,805        12,785     716         70         (29,265)      - 
Excise taxes      -            -             (186)      (4,143)     -          -             (4,329) 
Revenues from 
 sales            12,170       16,326        47,660     23,480      74         (29,265)      70,445 
Operating 
 expenses         (10,997)     (5,760)       (43,242)   (22,310)    (557)      29,265        (53,601) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (327)        (2,112)       (389)      (241)       (33)       -             (3,102) 
Operating income  846          8,454         4,029      929         (516)      -             13,742 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      823          (3,668)       349        98          71         -             (2,327) 
Tax on net 
 operating 
 income           (260)        (3,876)       (866)      (296)       (8)        -             (5,306) 
Net operating 
 income           1,409        910           3,512      731         (453)      -             6,109 
Net cost of net 
 debt                                                                                        (305) 
Non-controlling 
 interests                                                                                   (112) 
Net income -- 
 TotalEnergies 
 share                                                                                       5,692 
 
 
                    Integrated 
2(nd) quarter 2022  Gas,         Exploration   Refining   Marketing 
(adjustments)(a)    Renewables    &            &           & 
(M$)                & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales      (15)         -             -          -           -          -             (15) 
Intersegment sales  -            -             -          -           -          -             - 
Excise taxes        -            -             -          -           -          -             - 
Revenues from 
 sales              (15)         -             -          -           -          -             (15) 
Operating expenses  (606)        (82)          775        373         (301)      -             159 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests          (14)         (46)          -          (4)         -          -             (64) 
Operating 
 income(b)          (635)        (128)         775        369         (301)      -             80 
Net income (loss) 
 from equity 
 affiliates and 
 other items        (558)        (3,756)       52         (4)         -          -             (4,266) 
Tax on net 
 operating income   47           75            (75)       (100)       78         -             25 
Net operating 
 income(b)          (1,146)      (3,809)       752        265         (223)      -             (4,161) 
Net cost of net 
 debt               -            -             -          -           -          -             80 
Non-controlling 
 interests          -            -             -          -           -          -             (23) 
Net income -- 
 TotalEnergies 
 share              -            -             -          -           -          -             (4,104) 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

 

(b) Of which inventory valuation effect

 
-- On operating income        775  376  - 
-- On net operating income-   752  275  - 
 
 
                  Integrated 
2(nd) quarter     Gas,         Exploration   Refining   Marketing 
2022 (adjusted)   Renewables    &            &           & 
(M$)              & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    10,296       2,521         35,061     26,907      4          -             74,789 
Intersegment 
 sales            1,889        13,805        12,785     716         70         (29,265)      - 
Excise taxes      -            -             (186)      (4,143)     -          -             (4,329) 
Revenues from 
 sales            12,185       16,326        47,660     23,480      74         (29,265)      70,460 
Operating 
 expenses         (10,391)     (5,678)       (44,017)   (22,683)    (256)      29,265        (53,760) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (313)        (2,066)       (389)      (237)       (33)       -             (3,038) 
Adjusted 
 operating 
 income           1,481        8,582         3,254      560         (215)      -             13,662 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      1,381        88            297        102         71         -             1,939 
Tax on net 
 operating 
 income           (307)        (3,951)       (791)      (196)       (86)       -             (5,331) 
Adjusted net 
 operating 
 income           2,555        4,719         2,760      466         (230)      -             10,270 
Net cost of net 
 debt                                                                                        (385) 
Non-controlling 
 interests                                                                                   (89) 
Adjusted net 
 income -- 
 TotalEnergies 
 share                                                                                       9,796 
 
 
               Integrated 
               Gas,         Exploration   Refining   Marketing 
2(nd) quarter  Renewables    &            &           & 
2022 (M$)      & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
Total 
 expenditures  872          4,128         333        288         25         -             5,646 
Total 
 divestments   466          63            56         72          7          -             664 
Cash flow 
 from 
 operating 
 activities    3,970        8,768         3,526      580         (560)      -             16,284 
 
 
                  Integrated 
                  Gas,         Exploration   Refining   Marketing 
2(nd) quarter     Renewables    &            &           & 
2021 (M$)         & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    5,086        1,743         20,853     19,367      -          -             47,049 
Intersegment 
 sales            744          7,855         6,369      108         39         (15,115)      - 
Excise taxes      -            -             (225)      (5,191)     -          -             (5,416) 
Revenues from 
 sales            5,830        9,598         26,997     14,284      39         (15,115)      41,633 
Operating 
 expenses         (5,103)      (4,284)       (25,646)   (13,434)    (207)      15,115        (33,559) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (291)        (2,134)       (396)      (271)       (29)       -             (3,121) 
Operating income  436          3,180         955        579         (197)      -             4,953 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      419          (1,243)       123        57          23         -             (621) 
Tax on net 
 operating 
 income           (56)         (1,195)       (281)      (176)       16         -             (1,692) 
Net operating 
 income           799          742           797        460         (158)      -             2,640 
Net cost of net 
 debt                                                                                        (341) 
Non-controlling 
 interests                                                                                   (93) 
Net income -- 
 TotalEnergies 
 share                                                                                       2,206 
 
 
                    Integrated 
2(nd) quarter 2021  Gas,         Exploration   Refining   Marketing 
(adjustments)(a)    Renewables    &            &           & 
(M$)                & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales      (9)          -             -          -           -          -             (9) 
Intersegment sales  -            -             -          -           -          -             - 
Excise taxes        -            -             -          -           -          -             - 
Revenues from 
 sales              (9)          -             -          -           -          -             (9) 
Operating expenses  (54)         (23)          386        71          -          -             380 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests          (3)          -             (13)       -           -          -             (16) 
Operating income 
 (b)                (66)         (23)          373        71          -          -             355 
Net income (loss) 
 from equity 
 affiliates and 
 other items        (47)         (1,436)       22         (8)         (22)       -             (1,491) 
Tax on net 
 operating income   21           (12)          (109)      (20)        -          -             (120) 
Net operating 
 income (b)         (92)         (1,471)       286        43          (22)       -             (1,256) 
Net cost of net 
 debt                                                                                          4 
Non-controlling 
 interests                                                                                     (5) 
Net income -- 
 TotalEnergies 
 share                                                                                         (1,257) 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

 

(b) Of which inventory valuation effect

 
-- On operating income        394  69  - 
-- On net operating income-   331  50  - 
 
 
                  Integrated 
2(nd) quarter     Gas,         Exploration   Refining   Marketing 
2021 (adjusted)   Renewables    &            &           & 
(M$)              & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
External sales    5,095        1,743         20,853     19,367      -          -             47,058 
Intersegment 
 sales            744          7,855         6,369      108         39         (15,115)      - 
Excise taxes      -            -             (225)      (5,191)     -          -             (5,416) 
Revenues from 
 sales            5,839        9,598         26,997     14,284      39         (15,115)      41,642 
Operating 
 expenses         (5,049)      (4,261)       (26,032)   (13,505)    (207)      15,115        (33,939) 
Depreciation, 
 depletion and 
 impairment of 
 tangible assets 
 and mineral 
 interests        (288)        (2,134)       (383)      (271)       (29)       -             (3,105) 
Adjusted 
 operating 
 income           502          3,203         582        508         (197)      -             4,598 
Net income 
 (loss) from 
 equity 
 affiliates and 
 other items      466          193           101        65          45         -             870 
Tax on net 
 operating 
 income           (77)         (1,183)       (172)      (156)       16         -             (1,572) 
Adjusted net 
 operating 
 income           891          2,213         511        417         (136)      -             3,896 
Net cost of net 
 debt                                                                                        (345) 
Non-controlling 
 interests                                                                                   (88) 
Adjusted net 
 income -- 
 TotalEnergies 
 share                                                                                       3,463 
 
 
               Integrated 
               Gas,         Exploration   Refining   Marketing 
2(nd) quarter  Renewables    &            &           & 
2021 (M$)      & Power       Production   Chemicals   Services   Corporate  Intercompany  Total 
Total 
 expenditures  1,167        1,830         291        222         22         -             3,532 
Total 
 divestments   310          63            13         36          6          -             428 
Cash flow 
 from 
 operating 
 activities    567          4,835         2,232      437         (520)      -             7,551 
 

3.2) Reconciliation of the information by business segment with consolidated financial statements

 
                                                     Consolidated statement of 
1(st) half 2022 (M$)       Adjusted  Adjustments(a)  income 
Sales                      143,383   (3)             143,380 
Excise taxes               (8,985)   -               (8,985) 
Revenues from sales        134,398   (3)             134,395 
Purchases net of 
 inventory variation       (86,785)  1,694           (85,091) 
Other operating expenses   (15,029)  (635)           (15,664) 
Exploration costs          (253)     (725)           (978) 
Depreciation, depletion 
 and impairment of 
 tangible assets and 
 mineral interests         (6,186)   (595)           (6,781) 
Other income               550       22              572 
Other expense              (798)     (2,797)         (3,595) 
Financial interest on 
 debt                      (1,034)   -               (1,034) 
Financial income and 
 expense from cash & cash 
 equivalents               189       270             459 
Cost of net debt           (845)     270             (575) 
Other financial income     350       84              434 
Other financial expense    (271)     -               (271) 
Net income (loss) from 
 equity affiliates         3,805     (5,308)         (1,503) 
Income taxes               (9,998)   (90)            (10,088) 
Consolidated net income    18,938    (8,083)         10,855 
TotalEnergies share        18,773    (8,137)         10,636 
Non-controlling interests  165       54              219 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

 
                                                     Consolidated statement of 
1(st) half 2021 (M$)       Adjusted  Adjustments(a)  income 
Sales                      90,830    (44)            90,786 
Excise taxes               (10,520)  -               (10,520) 
Revenues from sales        80,310    (44)            80,266 
Purchases net of 
 inventory variation       (51,397)  1,280           (50,117) 
Other operating expenses   (13,576)  (21)            (13,597) 
Exploration costs          (290)     -               (290) 
Depreciation, depletion 
 and impairment of 
 tangible assets and 
 mineral interests         (6,285)   (161)           (6,446) 
Other income               554       27              581 
Other expense              (334)     (623)           (957) 
Financial interest on 
 debt                      (967)     -               (967) 
Financial income and 
 expense from cash & cash 
 equivalents               156       16              172 
Cost of net debt           (811)     16              (795) 
Other financial income     374       -               374 
Other financial expense    (261)     -               (261) 
Net income (loss) from 
 equity affiliates         1,260     (1,059)         201 
Income taxes               (2,931)   (317)           (3,248) 
Consolidated net income    6,613     (902)           5,711 
TotalEnergies share        6,466     (916)           5,550 
Non-controlling interests  147       14              161 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

 
                                                     Consolidated statement of 
2nd quarter 2022 (M$)      Adjusted  Adjustments(a)  income 
Sales                      74,789    (15)            74,774 
Excise taxes               (4,329)   -               (4,329) 
Revenues from sales        70,460    (15)            70,445 
Purchases net of 
 inventory variation       (46,023)  580             (45,443) 
Other operating expenses   (7,620)   (421)           (8,041) 
Exploration costs          (117)     -               (117) 
Depreciation, depletion 
 and impairment of 
 tangible assets and 
 mineral interests         (3,038)   (64)            (3,102) 
Other income               429       -               429 
Other expense              (529)     (776)           (1,305) 
Financial interest on 
 debt                      (572)     -               (572) 
Financial income and 
 expense from cash & cash 
 equivalents               130       115             245 
Cost of net debt           (442)     115             (327) 
Other financial income     231       -               231 
Other financial expense    (136)     -               (136) 
Net income (loss) from 
 equity affiliates         1,944     (3,490)         (1,546) 
Income taxes               (5,274)   (10)            (5,284) 
Consolidated net income    9,885     (4,081)         5,804 
TotalEnergies share        9,796     (4,104)         5,692 
Non-controlling interests  89        23              112 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

 
                                                     Consolidated statement of 
2(nd) quarter 2021 (M$)    Adjusted  Adjustments(a)  income 
Sales                      47,058    (9)             47,049 
Excise taxes               (5,416)   -               (5,416) 
Revenues from sales        41,642    (9)             41,633 
Purchases net of 
 inventory variation       (27,108)  389             (26,719) 
Other operating expenses   (6,708)   (9)             (6,717) 
Exploration costs          (123)     -               (123) 
Depreciation, depletion 
 and impairment of 
 tangible assets and 
 mineral interests         (3,105)   (16)            (3,121) 
Other income               138       85              223 
Other expense              (142)     (156)           (298) 
Financial interest on 
 debt                      (501)     -               (501) 
Financial income and 
 expense from cash & cash 
 equivalents               69        8               77 
Cost of net debt           (432)     8               (424) 
Other financial income     265       -               265 
Other financial expense    (131)     -               (131) 
Net income (loss) from 
 equity affiliates         740       (1,420)         (680) 
Income taxes               (1,485)   (124)           (1,609) 
Consolidated net income    3,551     (1,252)         2,299 
TotalEnergies share        3,463     (1,257)         2,206 
Non-controlling interests  88        5               93 
 

(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.

 

3.3) Adjustment items

 

The main adjustment items in the first half of 2022 are the following exceptional impairments and provisions related to the Russian-Ukrainian conflict:

   -- In the first quarter, an impairment of $(4,095) million in net result 
      concerning notably Arctic LNG 2. 
 
   -- In the second quarter, an impairment of $(3,513) million in net result 
      related to the potential impact of international sanctions on the value 
      of Novatek stake. 
 

The detail of the adjustment items is presented in the table below.

 

Adjustments to operating income

 
                          Integrated 
                          Gas,        Exploration  Refining   Marketing 
                          Renewables  &            &           & 
(M$)                      & Power     Production   Chemicals   Services   Corporate  Total 
2(nd)     Inventory 
 quarter   valuation 
 2022      effect         -           -            775        376         -          1,151 
 Effect of changes in 
  fair value              (597)       -            -          -           -          (597) 
 Restructuring charges    (17)        -            -          -           -          (17) 
 Asset impairment and 
  provisions charges      (18)        (46)         -          4           -          (60) 
 Other items              (3)         (82)         -          (11)        (301)      (397) 
TOTAL                     (635)       (128)        775        369         (301)      80 
2(nd)     Inventory 
 quarter   valuation 
 2021      effect         -           -            394        69          -          463 
 Effect of changes in 
  fair value              (49)        -            -          -           -          (49) 
 Restructuring charges    (1)         -            (8)        -           -          (9) 
 Asset impairment and 
  provisions charges      (3)         -            (13)       -           -          (16) 
 Other items              (13)        (23)         -          2           -          (34) 
TOTAL                     (66)        (23)         373        71          -          355 
1(st)     Inventory 
 half      valuation 
 2022      effect         -           -            1,722      684         -          2,406 
 Effect of changes in 
  fair value              (685)       -            -          -           -          (685) 
 Restructuring charges    (22)        -            -          -           -          (22) 
 Asset impairment and 
  provisions charges      (18)        (1,330)      -          (65)        (9)        (1,422) 
 Other items              (15)        (82)         -          (11)        (433)      (541) 
TOTAL                     (740)       (1,412)      1,722      608         (442)      (264) 
1(st)     Inventory 
 half      valuation 
 2021      effect         -           -            1,140      206         -          1,346 
 Effect of changes in 
  fair value              (58)        -            -          -           -          (58) 
 Restructuring charges    (10)        -            (8)        -           -          (18) 
 Asset impairment and 
  provisions charges      (148)       -            (13)       -           -          (161) 
 Other items              (38)        (23)         (1)        7           -          (55) 
TOTAL                     (254)       (23)         1,118      213         -          1,054 
 

Adjustments to net income, TotalEnergies share

 
                          Integrated 
                          Gas,        Exploration  Refining   Marketing 
                          Renewables  &            &           & 
(M$)                      & Power     Production   Chemicals   Services   Corporate  Total 
2(nd)     Inventory 
 quarter   valuation 
 2022      effect         -           -            738        255         -          993 
 Effect of changes in 
  fair value              (551)       -            -          -           -          (551) 
 Restructuring charges    (8)         -            -          -           -          (8) 
 Asset impairment and 
  provisions charges      (226)       (3,493)      -          -           -          (3,719) 
          Gains (losses) 
          on disposals 
          of assets       -           -            -          -           -          - 
 Other items              (352)       (286)        -          (8)         (173)      (819) 
TOTAL                     (1,137)     (3,779)      738        247         (173)      (4,104) 
2(nd)     Inventory 
 quarter   valuation 
 2021      effect         -           -            327        48          -          375 
 Effect of changes in 
  fair value              (44)        -            -          -           -          (44) 
 Restructuring charges    (4)         (44)         (32)       (8)         (22)       (110) 
 Asset impairment and 
  provisions charges      (36)        -            (13)       -           -          (49) 
 Gains (losses) on 
  disposals of assets     -           (1 379)*     -          -           -          (1,379) 
 Other items              (7)         (44)         -          1           -          (50) 
TOTAL                     (91)        (1,467)      282        41          (22)       (1,257) 
1(st)     Inventory 
 half      valuation 
 2022      effect         -           -            1,573      460         -          2,033 
 Effect of changes in 
  fair value              (631)       -            -          -           -          (631) 
 Restructuring charges    (11)        -            -          -           -          (11) 
 Asset impairment and 
  provisions charges      (4,174)     (4,525)      -          (72)        (9)        (8,780) 
          Gains (losses) 
          on disposals 
          of assets       -           -            -          -           -          - 
 Other items              (352)       (272)        (32)       (8)         (84)       (748) 
TOTAL                     (5,168)     (4,797)      1,541      380         (93)       (8,137) 
1(st)     Inventory 
 half      valuation 
 2021      effect         -           -            926        138         -          1,064 
 Effect of changes in 
  fair value              (50)        -            -          -           -          (50) 
 Restructuring charges    (12)        (85)         (71)       (43)        (60)       (271) 
 Asset impairment and 
  provisions charges      (180)       -            (13)       -           -          (193) 
 Gains (losses) on 
  disposals of assets     -           (1 379)*     -          -           -          (1,379) 
 Other items              (42)        (41)         (9)        5           -          (87) 
TOTAL                     (284)       (1,505)      833        100         (60)       (916) 
 

* Impact of the TotalEnergies' interest sale of Petrocedeño to PDVSA.

4) Shareholders' equity

 

Treasury shares (TotalEnergies shares held directly by TotalEnergies SE)

 
                                              December 31, 2021  June 30, 2022 
Number of treasury shares                     33,841,104         55,465,917 
Percentage of share capital                   1.28%              2.12% 
of which shares acquired with the intention 
 to cancel them                               30,665,526         55,260,084 
of which shares allocated to TotalEnergies 
 share performance plans for Company 
 employees                                    3,103,018          99,850 
of which shares intended to be allocated to 
 new share performance or purchase options 
 plans                                        72,560             105,983 
 

Dividend

 

The Shareholders' meeting of May 25, 2022 approved the distribution of a dividend of 2.64 euros per share for the 2021 fiscal year and the payment of a final dividend of 0.66 euro per share given the three interim dividends that had already been paid. The dividend for fiscal year 2021 was paid according to the following timetable:

 
Dividend 2021    First interim   Second interim  Third interim   Final 
Amount           EUR 0.66        EUR 0.66        EUR 0.66        EUR 0.66 
Set date         April 28, 2021  July 28, 2021   October 27,     May 25, 2022 
                                                 2021 
Ex-dividend      September 21,   January 3,      March 22, 2022  June 21, 2022 
 date            2021            2022 
Payment date     October 1,      January 13,     April 1, 2022   July 1, 2022 
                 2021            2022 
 

The Board of Directors of April 27, 2022 decided to increase interim dividends by 5% and consequently set the first interim dividend for the fiscal year 2022 at EUR0.69 per share. The ex-dividend date of this interim dividend will be September 21, 2022 and it will be paid in cash on October 3, 2022.

 

Furthermore, the Board of Directors of July 27, 2022 decided to set the amount of the second interim dividend for the 2022 fiscal year at 0.69 euro per share, i.e an amount equal to the aforementioned first interim dividend. The ex-dividend date of the second interim dividend will be January 2, 2023 and it will be paid in cash on January 12, 2023.

 
Dividend 2022      First interim       Second interim 
Amount             EUR 0.69            EUR 0.69 
Set date           April 27, 2022      July 27, 2022 
Ex-dividend date   September 21, 2022  January 2, 2023 
Payment date       October 3, 2022     January 12, 2023 
 

Earnings per share in Euro

 

Earnings per share in Euro, calculated from the earnings per share in U.S. dollars converted at the average Euro/USD exchange rate for the period, amounted to EUR2.03 per share for the 2nd quarter 2022 (EUR1.67 per share for the 1st quarter 2022 and EUR0.66 per share for the 2nd quarter 2021). Diluted earnings per share calculated using the same method amounted to EUR2.03 per share for the 2nd quarter 2022 (EUR1.65 per share for the 1st quarter 2022 and EUR0.66 per share for the 2nd quarter 2021).

 

Earnings per share are calculated after remuneration of perpetual subordinated notes.

 

Perpetual subordinated notes

 

On January 17, 2022, TotalEnergies SE issued perpetual subordinated notes:

   -- Perpetual subordinated notes 2.000% callable in April 2027, or in 
      anticipation in January 2027 (EUR1,000 million); and 
 
   -- Perpetual subordinated notes 3.250% callable in January 2037, or in 
      anticipation in July 2036 (EUR750 million). 
 

On May 18, 2022, TotalEnergies SE fully reimbursed the residual nominal amount of EUR1,750 million of its perpetual subordinated notes 3.875% issued in May 2016, on their first call date.

 

Other comprehensive income

 

Detail of other comprehensive income is presented in the table below:

 
(M$)                                          1(st) half 2022  1(st) half 2021 
Actuarial gains and losses                    204              449 
Change in fair value of investments in 
 equity instruments                           (17)             68 
Tax effect                                    (42)             (154) 
Currency translation adjustment generated by 
 the parent company                           (7,137)          (2,934) 
Sub-total items not potentially 
 reclassifiable to profit and loss            (6,992)          (2,571) 
Currency translation adjustment               3,535            1,777 
-- Unrealized gain/(loss) of the period       3,532            1,898 
-- Less gain/(loss) included in net income    (3)              121 
Cash flow hedge                               2,959            80 
-- Unrealized gain/(loss) of the period       2,901            (56) 
-- Less gain/(loss) included in net income    (58)             (136) 
Variation of foreign currency basis spread    70               (4) 
-- Unrealized gain/(loss) of the period       49               (29) 
-- Less gain/(loss) included in net income    (21)             (25) 
Share of other comprehensive income of 
 equity affiliates, net amount                2,464            451 
-- Unrealized gain/(loss) of the period       2,427            449 
-- Less gain/(loss) included in net income    (37)             (2) 
Other                                         (1)              - 
Tax effect                                    (1,059)          (57) 
Sub-total items potentially reclassifiable 
 to profit and loss                           7,968            2,247 
Total other comprehensive income, net amount  976              (324) 
 

Tax effects relating to each component of other comprehensive income are as follows:

 
(M$)             1(st) half 2022                1(st) half 2021 
                 Pre-tax   Tax       Net        Pre-tax   Tax        Net 
                 amount    effect    amount     amount    effect     amount 
Actuarial gains 
 and losses      204       (53)      151        449       (141)      308 
Change in fair 
 value of 
 investments in 
 equity 
 instruments     (17)      11        (6)        68        (13)       55 
Currency 
 translation 
 adjustment 
 generated by 
 the parent 
 company         (7,137)   -         (7,137)    (2,934)   -          (2,934) 
Sub-total items 
 not 
 potentially 
 reclassifiable 
 to profit and 
 loss            (6,950)   (42)      (6,992)    (2,417)   (154)      (2,571) 
Currency 
 translation 
 adjustment      3,535     -         3,535      1,777     -          1,777 
Cash flow hedge  2,959     (1,041)   1,918      80        (55)       25 
Variation of 
 foreign 
 currency basis 
 spread          70        (18)      52         (4)       (2)        (6) 
Share of other 
 comprehensive 
 income of 
 equity 
 affiliates, 
 net amount      2,464     -         2,464      451       -          451 
Other            (1)       -         (1)        -         -          - 
Sub-total items 
 potentially 
 reclassifiable 
 to profit and 
 loss            9,027     (1,059)   7,968      2,304     (57)       2,247 
Total other 
 comprehensive 
 income          2,077     (1,101)   976        (113)     (211)      (324) 
 

5) Financial debt

 

The Company has not issued any new senior bond during the first six months of 2022.

 

The Company reimbursed three senior bonds during the first six months of 2022:

   -- Bond 2.875% issued by TotalEnergies Capital International in 2012 and 
      maturing in February 2022 ($1,000 million) 
 
   -- Bond 1.125% issued by TotalEnergies Capital Canada in 2014 and maturing 
      in March 2022 (EUR1,000 million) 
 
   -- Bond 2.250% issued by TotalEnergies Capital International in 2015 and 
      maturing in June 2022 (GBP400 million). 
 

On March 4, 2022, the Company put in place a committed syndicated credit line with banks for an amount of $8,000 million and with a 12-month tenor (with the option to extend its maturity twice by a further 6 months at TotalEnergies SE' hand).

 

6) Related parties

 

The related parties are mainly equity affiliates and non-consolidated investments.

 

There were no major changes concerning transactions with related parties during the first six months of 2022.

 

The impact of the Russian-Ukrainian conflict on transactions with related parties in Russia is described in paragraph 7 Other risks and commitments.

 

7) Other risks and contingent liabilities

 

TotalEnergies is not currently aware of any exceptional event, dispute, risks or contingent liabilities that could have a material impact on the assets and liabilities, results, financial position or operations of the TotalEnergies, other than those mentioned below.

 

Yemen

 

In Yemen, the deterioration of security conditions in the vicinity of the Balhaf site caused the company Yemen LNG, in which TotalEnergies holds a stake of 39.62%, to stop its commercial production and export of LNG and to declare force majeure to its various stakeholders in 2015. The plant has been put in preservation mode.

 

Mozambique

 

Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, TotalEnergies has confirmed on April 26, 2021, the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation led TotalEnergies, as operator of Mozambique LNG project, to declare force majeure.

 

Russian-Ukrainian conflict

 

Since the month of February 2022, Russia's invasion of Ukraine led European and American authorities to adopt several sets of sanctions measures targeting Russian and Belarusian persons and entities, as well as the financial sector.

 

TotalEnergies holds investments in this country in major LNG projects (Yamal LNG and Arctic LNG 2) both directly and through its holding in the company PAO Novatek, whose production and sale of LNG are not materially impacted by the sanctions adopted as of the date hereof.

 

Depending on the developments of the Russian-Ukrainian conflict and the measures that the European and American authorities could be required to take, the activities of TotalEnergies in Russia could be affected in the future.

 

TotalEnergies announced on March 1, 2022, that it condemned Russia's military aggression against Ukraine, and that sanctions will be implemented by the Company regardless of the consequences on its asset management.

 

On March 22, 2022, TotalEnergies announced that, given the uncertainty created by the technological and financial sanctions on the ability to carry out the Arctic LNG 2 project currently under construction and their probable tightening with the worsening conflict, TotalEnergies SE had decided to no longer book proved reserves for the Arctic LNG 2 project.

 

Since then, on April 8,2022, new sanctions have effectively been adopted by the European authorities, notably prohibiting export from European Union countries of goods and technology for use in the liquefaction of natural gas benefitting a Russian company. It appears that these new prohibitions constitute additional risks on the execution of the Arctic LNG 2 project.

 

As a result, TotalEnergies recorded, in its accounts as of March 31, 2022, an impairment of $(4,095) million, concerning notably Arctic LNG 2. As of June 30, 2022, TotalEnergies recorded in its accounts a new $(3,513) million impairment charge related mainly to the potential impact of international sanctions on the value of its Novatek stake. In this context, indications of impairment were identified, and an impairment test to determine the value in use based on future cash flows was performed, taking into account assumptions reflecting the impact of sanctions on future cash flows.

 

The table below presents the contribution of Russian assets to the key income and cash flow indicators:

 
                               2(nd) quarter  1(st) quarter  1(st) half 
Russian Upstream Assets (M$)    2022           2022           2022       2021 
Adjusted net operating income  707            1,021          1,727       2,092 
Operating cash flow before 
 working capital changes(1)    857            288            1,144       1,613 
 

Capital Employed(2) by TotalEnergies in Russia as at June 30, 2022 was $8,760 million, after taking into account the $(3,513) million impairment and the impact of the evolution of the ruble/dollar exchange rate between March 31, 2022 and June 30, 2022, which leads to a $2,066 million revaluation of Capital Employed on the balance sheet as at June 30, 2022.

 

8) Subsequent events

 

There are no post-balance sheet events that could have a material impact on the Company's financial statements.

(1) 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 sales.

 

(2) Capital Employed consists of non-current assets and working capital, at replacement cost, net of deferred income taxes and non-current liabilities.

 
TotalEnergies SE                              Financial report first half 2022 
 Registered office:                            Published in July 2022 
 2, place Jean Millier -- La Défense      Produced by Acolad France 
 692400 
 Courbevoie -- France 
 
Reception:+33 (0)1 47 44 45 46 Investor 
Relations:+44 (0)1 47 44 46 46 North 
American Investor Relations:+1 (173) 
483-5070 
 
Share capital:EUR6,547,828,212.50542 051 
180 RCS Nanterre 
 
 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220729005316/en/

 
    CONTACT: 

TotalEnergies SE

 
    SOURCE: TOTALENERGIES SE 
Copyright Business Wire 2022 
 

(END) Dow Jones Newswires

July 29, 2022 11:00 ET (15:00 GMT)

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