5th Apr 2019 08:27
The profitable growth in the gas and low carbon electricity integrated value chains is one of the key axes of Total’s (Paris:FP) (LSE:TTA) (NYSE:TOT) strategy. In order to give more visibility to these businesses, a new reporting structure for the business segments’ financial information has been put in place, effective January 1, 2019 and organized around four business segments: Exploration & Production (EP), Integrated Gas, Renewables & Power segment (iGRP), Refining & Chemicals (RC) and Marketing & Services (MS).
The iGRP segment spearheads Total’s ambitions in integrated gas (including LNG, liquefied natural gas) and low carbon electricity businesses. It consists of the upstream and midstream LNG activity that was previously reported in the EP segment (refer to the indicative list of assets in the Annex) and the activity previously reported in the Gas Renewables & Power segment. The new EP segment is adjusted accordingly.
The RC and MS segments are not affected.
The tables below show the key figures for the years 2017 and 2018 restated in order to reflect these changes.
| Group hydrocarbon production | ||||||||||||
| 2017 | 2018 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | |||||||
| Group production (kboe/d) | 2,566 | 2,775 | 2,703 | 2,717 | 2,804 | 2,876 | ||||||
| EP (kboe/d) | 2,229 | 2,394 | 2,359 | 2,375 | 2,433 | 2,408 | ||||||
| iGRP (kboe/d) | 337 | 381 | 344 | 342 | 371 | 468 | ||||||
| Group production (kboe/d) | 2,566 | 2,775 | 2,703 | 2,717 | 2,804 | 2,876 | ||||||
| Oil (including bitumen) (kb/d) | 1,167 | 1,378 | 1,297 | 1,400 | 1,431 | 1,382 | ||||||
| Gas (including Condensates and associated LPG)(kboe/d) | 1,398 | 1,397 | 1,406 | 1,317 | 1,373 | 1,493 | ||||||
| Group production (kboe/d) | 2,566 | 2,775 | 2,703 | 2,717 | 2,804 | 2,876 | ||||||
| Liquids (kb/d) | 1,346 | 1,566 | 1,481 | 1,582 | 1,611 | 1,589 | ||||||
| Gas (Mcf/d) | 6,662 | 6,599 | 6,664 | 6,176 | 6,557 | 6,994 |
EP – Exploration-Production (redefined scope)
> Production
| Hydrocarbon production | 2017 | 2018 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | ||||||
| EP (kboe/d) | 2,229 | 2,394 | 2,359 | 2,375 | 2,433 | 2,408 | ||||||
| Liquids (kb/d) | 1,310 | 1,527 | 1,445 | 1,544 | 1,575 | 1,541 | ||||||
| Gas (Mcf/d) | 4,995 | 4,724 | 4,976 | 4,536 | 4,678 | 4,710 |
> Key financial metrics
| In millions of dollars | 2017 | 2018 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | ||||||
| Adjusted operating income | 6,208 | 13,408 | 2,902 | 3,726 | 3,947 | 2,833 | ||||||
| Effective tax rate | 40.5% | 46.2% | 48.7% | 46.6% | 47.5% | 41.2% | ||||||
| Adjusted net operating income | 4,541 | 8,547 | 1,817 | 2,315 | 2,439 | 1,976 | ||||||
| including income from equity affiliates | 827 | 1140 | 228 | 327 | 316 | 269 |
| Investments | 10,005 | 13,789 | 5,545 | 2,612 | 2,472 | 3,160 | ||||||
| Divestments | 1,793 | 3,674 | 2,176 | 466 | 494 | 538 | ||||||
| Organic investments | 9,110 | 7,953 | 1,798 | 1,785 | 1,605 | 2,765 | ||||||
| Operating cash flow before working capital changes * | 12,758 | 17,832 | 3,921 | 4,800 | 5,200 | 3,911 | ||||||
| Cash flow from operations * | 10,719 | 18,537 | 3,322 | 4,474 | 4,431 | 6,310 |
* Excluding financial charges
Note: For definitions, refer to the Group quarterly result press release
iGRP - Integrated Gas, Renewables & Power
> Production and LNG sales
| Hydrocarbon production | 2017 | 2018 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | ||||||
| iGRP (kboe/d) | 337 | 381 | 344 | 342 | 371 | 468 | ||||||
| Liquids (kb/d) | 36 | 40 | 36 | 38 | 36 | 48 | ||||||
| Gas (Mcf/d) | 1,668 | 1,875 | 1,688 | 1,640 | 1,879 | 2,284 |
| Liquefied natural gas (Mt) | 2017 | 2018 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | ||||||
| Overall LNG sales | 15.6 | 21.8 | 3.8 | 3.9 | 6.2 | 7.9 | ||||||
| incl. sales from equity production* | 11.2 | 11.1 | 2.5 | 2.5 | 2.8 | 3.3 | ||||||
| incl. sales by Total from equity production andthird party
| 7.6 | 17.1 | 2.6 | 2.7 | 5.1 | 6.7 |
* Equity production can be sold either by Total or by JV
> Key financial metrics
| In millions of dollars | 2017 | 2018 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | ||||||
| Adjusted operating income | 1,435 | 1,174 | 235 | 217 | 373 | 349 | ||||||
| Adjusted net operating income | 1,929 | 2,419 | 481 | 565 | 697 | 676 | ||||||
| including income from equity affiliates | 804 | 1,249 | 228 | 250 | 324 | 447 | ||||||
| Investments | 3,594 | 5,032 | 575 | 447 | 3,325 | 685 | ||||||
| Divestments | 198 | 2,209 | 153 | 439 | 198 | 1,419 | ||||||
| Organic investments | 2,553 | 1,745 | 336 | 388 | 407 | 614 | ||||||
| Operating cash flow before working capital changes * | 2,289 | 2,055 | 393 | 492 | 553 | 617 | ||||||
| Cash flow from operations * | 3,157 | 596 | 68 | 258 | (164) | 434 |
* Excluding financial charges
ANNEX
Indicative list of assets reported in EP segment until end-2018 and in iGRP segment from January 1, 2019 onwards
| Country | Asset | % equity | ||
| Angola | Angola LNG | 13.60% | ||
| Australia | Gladstone LNG | 27.50% | ||
| Australia | Ichthys | 26.00% | ||
| Indonesia | Mahakam | Until end 2017 (Mahakam license expired) | ||
| Nigeria | Nigeria LNG | 15.00% | ||
| Nigeria | OML 58 | 40.00% | ||
| Norway | Snohvit | 18.40% | ||
| Oman | Oman LNG | 5.54% | ||
| Oman | Qalhat LNG | 2.04%. indirect participation through Oman LNG | ||
| Papua New Guinea | Papua LNG | 40.10% | ||
| Qatar | Qatargas 1 Upstream | 20.00% | ||
| Qatar | Qatargas 1 Downstream | 10.00% | ||
| Qatar | Qatargas 2 Train 5 | 16.70% | ||
| Russia | Arctic LNG 2* | 10.00% direct working interest (21.64 % includingindirect interest** and considering a 60%participation of Novatek in the project) | ||
| Russia | Yamal LNG | 20.02% direct working interest (29.72% includingindirect interest**) | ||
| United Arab Emirates | ADNOC LNG | 5.00% | ||
| USA | Barnett Shale *** | 90.92% in average | ||
| Yemen | Yemen LNG | 39.62% |
* Total signed definitive agreements for entry into Arctic LNG 2 on the 5th of March 2019** The iGRP segment includes the interests that Total holds in Arctic LNG 2 and Yamal LNG projects through its 19.4% ownership in Novatek. The other Novatek assets remain included in the EP figures.*** Barnett shale consolidated in iGRP reporting along with the other Group’s LNG assets, such as the Group’s equity in Cameron LNG or Tellurian Inc., which were already reported in GRP end-2018
The restated data presented herein have been derived from TOTAL’s internal reporting system and have not been audited by TOTAL’s statutory auditors. Such related financial data are presented solely for information purposes. To the extent permitted by law, TOTAL S.A. disclaims all liability from the use of the restated financial data.
The list of assets in the Annex is presented for indicative purposes, and mentions the assets previously reported in the EP reporting segment, which are, as from January 1, 2019, reported in the iGRP reporting segment. This list refers to assets or contractual rights which may group the contributions of multiple subsidiaries and/or consolidated entities.
Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TOTAL. 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). These indicators are meant to facilitate the analysis of the financial performance of TOTAL and the comparison of income between periods. They allow investors to track the measures used internally to manage and measure the performance of the Group. These adjustment items include:
(i) Special itemsDue 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 effectThe 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 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 valueThe effect of changes in fair value presented as an adjustment item reflects, for some transactions, differences between internal measures of performance used by TOTAL’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.Furthermore, TOTAL, in its trading activities, enters into storage contracts, whose future effects are recorded at fair value in Group’s internal economic performance. IFRS precludes recognition of this fair value effect.
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.
Additional information concerning the risk factors and uncertainties that may have an impact on the Group's financial results or activities is available in the most recent versions of the Registration Document (Document de référence) filed with the French Autorité des marchés financiers (AMF) and the Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (SEC).
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