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), return on equity (ROE), return on average capital employed (ROACE), gearing ratio and operating cash flow before working capital changes. 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 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 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 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 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. 


  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. 


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


  The adjusted results (adjusted operating income, adjusted net operating income, adjusted net income) are defined as replacement cost results, adjusted for special items, 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 our Form 20-F/A, 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 total.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or on the SEC's website sec.gov. 


  (1) Definition page 2 


  (2) cf press release published on July 29, 2020 


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


  (4) 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 12. 


  (5) 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). 


  (6) 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 


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


  (8) Net acquisitions = acquisitions -- assets sales -- other transactions with non-controlling interests (see page 12). 


  (9) Net investments = Organic investments + net acquisitions (see page 12). 


  (10) Operating cash flow before working capital changes, is defined as cash flow from operating activities before changes in working capital at replacement cost, and effective second quarter 2019 including organic loan repayments from equity affiliates, and effective first quarter 2020 including capital gain from renewable projects sale. The inventory valuation effect is explained on page 14. The reconciliation table for different cash flow figures is on page 12. 


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


  12 Adjustment items shown on page 12. 


  (13) Details shown on page 12 and in the appendix to the financial statements. 


  (14) Net cash flow = operating cash flow before working capital changes - net investments (including other transactions with non-controlling interests). 


  Total financial statements 


  ________________________________ 


  Second quarter and first half 2020 consolidated accounts, IFRS 

 
CONSOLIDATED STATEMENT OF INCOME 
TOTAL 
(unaudited) 
                             2(nd) quarter  1(st) quarter  2(nd) quarter 
(M$)(a)                      2020           2020           2019 
 
Sales                        25,730         43,870         51,242 
Excise taxes                 (4,168)        (5,293)        (6,040) 
 Revenues from sales         21,562         38,577         45,202 
 
Purchases, net of inventory 
 variation                   (12,025)       (28,068)       (30,390) 
Other operating expenses     (6,321)        (6,944)        (7,078) 
Exploration costs            (114)          (140)          (170) 
Depreciation, depletion and 
 impairment of tangible 
 assets and mineral 
 interests                   (11,593)       (3,635)        (3,661) 
Other income                 362            580            321 
Other expense                (108)          (420)          (189) 
 
Financial interest on debt   (530)          (569)          (568) 
Financial income and 
 expense from cash & cash 
 equivalents                 50             (155)          (42) 
 Cost of net debt            (480)          (724)          (610) 
 
Other financial income       419            188            326 
Other financial expense      (161)          (181)          (188) 
 
Net income (loss) from 
 equity affiliates           (447)          732            812 
 
Income taxes                 484            37             (1,571) 
Consolidated net income      (8,422)        2              2,804 
Group share                  (8,369)        34             2,756 
Non-controlling interests    (53)           (32)           48 
Earnings per share ($)       (3.27)         (0.01)         1.01 
Fully-diluted earnings per 
 share ($)                   (3.27)         (0.01)         1.00 
(a) Except for per share 
 amounts. 
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
TOTAL 
(unaudited) 
                               2(nd) quarter  1(st) quarter  2(nd) quarter 
(M$)                           2020           2020           2019 
Consolidated net income        (8,422)        2              2,804 
 
Other comprehensive income 
 
Actuarial gains and losses     (356)          133            (223) 
Change in fair value of 
 investments in equity 
 instruments                   90             (164)          74 
Tax effect                     101            (15)           59 
Currency translation 
 adjustment generated by the 
 parent company                1,780          (1,976)        1,057 
Items not potentially 
 reclassifiable to profit and 
 loss                          1,615          (2,022)        967 
Currency translation 
 adjustment                    (919)          (21)           (619) 
Cash flow hedge                231            (1,524)        (246) 
Variation of foreign currency 
 basis spread                  14             56             43 
Share of other comprehensive 
 income of equity affiliates, 
 net amount                    296            (1,223)        (135) 
Other                          -              3              1 
Tax effect                     (78)           445            69 
Items potentially 
 reclassifiable to profit and 
 loss                          (456)          (2,264)        (887) 
Total other comprehensive 
 income (net amount)           1,159          (4,286)        80 
 


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