TOTAL: New Organization for the Group, Creatio...

Business segments’ restated key figures for the years 2015 and 2016

TOTAL: New Organization for the Group, Creation of the Gas, Renewables & Power Segment

TOTAL

In order to implement its strategy Total (Paris:FP) (LSE:TTA) (NYSE:TOT) has put in place a new organization fully effective since January 1, 2017, structured around four business segments following the creation of the Gas, Renewables & Power segment, alongside the Exploration & Production, Refining & Chemicals and Marketing & Services segments.

The Gas, Renewables & Power segment spearheads Total’s ambitions in low-carbon businesses by expanding in downstream gas and renewable energies as well as in energy efficiency businesses. This segment brings together the Gas and New Energies divisions (excluding biotechnologies) and a new Innovation & Energy efficiency division. A new Biofuels division now regroups within the Refining & Chemicals segment all the bioenergies activities.

Certain figures for the years 2015 and 2016 have been restated in order to reflect the new organization with four business segments.

Exploration & Production

In millions of dollars       2015       2016       1Q16       2Q16       3Q16       4Q16
Adjusted operating income       4,481       2,349       47       499       714       1,089
Effective tax rate*       48.2%       27.7%       -48.2%       -0.2%       30.5%       47.1%
Adjusted net operating income       4,330       3,217       386       1,043       781       1,007
including income from equity affiliates       1,662       1,363       260       433       241       429
                                                 
Investments1       24,233       16,085       4,235       3,533       3,484       4,833
Divestments       2,880       2,187       818       446       105       818
Operating cash flow before working capital changes2       11,322       9,736       1,865       2,208       2,768       2,895
Cash flow from operations       11,567       9,010       2,101       595       2,275       4,039
 

* 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).

Gas, Renewables & Power

In millions of dollars       2015       2016       1Q16       2Q16       3Q16       4Q16
Adjusted operating income       572       288       35       2       124       127
Adjusted net operating income       567       439       73       43       191       132
                                                 
Investments       588       1,221       147       95       1,097       (118)
Divestments       418       166       98       6       33       29
Operating cash flow before working capital changes       (19)       125       (82)       31       73       103
Cash flow from operations       (384)       538       (329)       111       24       732
                                   

1 Including acquisitions and increases in non-current loans.
2 Operating cash flow before working capital changes, previously referred to as adjusted cash flow from operations, is defined as cash flow from operating activities before changes in working capital at replacement cost. The inventory valuation effect is explained on page 2.

Refining & Chemicals

In millions of dollars       2015       2016       1Q16       2Q16       3Q16       4Q16
Adjusted operating income       5,649       4,366       1,297       965       890       1,214
Adjusted net operating income       4,839       4,195       1,130       1,018       916       1,131
                                                 
Investments       1,875       1,861       261       480       554       566
Divestments       3,494       88       29       23       21       15
Operating cash flow before working capital changes       5,788       4,874       1,321       1,137       1,051       1,365
Cash flow from operations       6,435       4,585       (419)       1,561       1,697       1,746
                                   

Marketing & Services

In millions of dollars       2015       2016       1Q16       2Q16       3Q16       4Q16
Adjusted operating income       1,972       1,926       392       512       507       515
Adjusted net operating income       1,591       1,559       289       420       444       406
                                                 
Investments       1,267       1,245       251       251       243       500
Divestments       767       424       36       294       29       65
Operating cash flow before working capital changes       1,941       1,887       407       555       508       417
Cash flow from operations       2,323       1,754       580       261       573       340
                                   

These restated data have been derived from TOTAL’s internal reporting system and have not been audited by the statutory auditors. They are presented solely for information purposes and no legal consequences can arise from them. TOTAL S.A. can not under any circumstances be held liable by this press release or the use that may be made of it.

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. 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. 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.
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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