Core Viewpoint - TotalEnergies demonstrated strong financial performance in Q1, exceeding Wall Street expectations despite challenging market conditions, and is exploring a potential primary listing in the US to close valuation gaps with American peers [4][6][12]. Financial Performance - TotalEnergies reported an adjusted net income of $5.1 billion in Q1, slightly above the consensus estimate of $5 billion, despite a 43% decline in average gas prices [13]. - Cash flow from operations before working capital reached $8.2 billion, with operating cash flow at $2.2 billion for the quarter, leading to a net debt of $14.2 billion [13]. - The company’s exploration division achieved a core EBIT of $2.6 billion and cash flow of $4.5 billion, benefiting from low upstream production costs below $5 per barrel [14]. Production and Growth Outlook - TotalEnergies' total production has decreased by 18% since its peak in 2019, but there is a positive outlook for upstream production growth driven by LNG projects in North America, Qatar, and Mozambique [8]. - The company anticipates organic growth of 2% per year by 2030, supported by significant discoveries in Namibia [8]. Dividend and Share Buyback Strategy - TotalEnergies plans to increase its first interim dividend to €0.79 per share in 2024, a 7% increase from 2023, and has been authorized for a $2 billion share buyback in Q2 [16]. - The company expects to generate a cash flow from operations of $35 billion, allowing for at least an $8 billion buyback, with a distribution yield of 10% fully covered by an FCF yield above 11% [17]. Market Position and Valuation - The ongoing valuation gap between TotalEnergies and US peers like ExxonMobil and Chevron is highlighted, with the company’s P/E ratio expected to increase to $74 per share, supported by a potential US primary listing [4][17]. - The company’s management team and capital allocation priorities are viewed positively, contributing to its robust earnings potential [6][16].

Core Viewpoint - TotalEnergies SE has signed an agreement to acquire all shares of West Burton Energy for an enterprise value of £450 million ($576 million), pending regulatory approval [1]. Deal Details - The acquisition is expected to enhance TotalEnergies' flexible asset base, reducing intermittency and ensuring a steady power supply for customers [2]. Renewable Energy Focus - This agreement will increase TotalEnergies' global flexible power generation portfolio to approximately 7 GW of gross capacity, alongside its existing 23 GW of gross renewable capacity [3]. Energy Transition - TotalEnergies, along with other major oil and gas companies like ExxonMobil, BP, and Chevron, is taking steps to reduce emissions and meet clean energy targets [4]. Customer Support and Market Position - The deal will enable TotalEnergies to better serve its 300,000 UK gas and electricity customers by providing more accessible, economical, and sustainable energy, while also strengthening its trading position in the UK electricity and gas markets [9]. Asset Details - West Burton Energy operates the West Burton B gas-fired power plant in Nottinghamshire, England, with a total output of 1.3 GW, and includes a 49 MW battery storage system [10]. Future Capacity Needs - TotalEnergies anticipates a need for 700 MW of gas-based power generation capacity, given its renewable portfolio in the UK, which includes 1.1 GW of gross installed capacity and 4.5 GW under development [11]. Net Zero Emissions Strategy - The company aims to achieve net zero emissions by 2050 by developing a competitive portfolio that combines flexible assets with renewable energy sources [12]. Growth Projections - TotalEnergies is constructing and developing a portfolio of 35 GW by 2025, with over 20 GW already secured through long-term power purchase agreements [13]. Industry Trends - The global renewable energy market was valued at $1,056.27 billion in 2023 and is projected to grow at a CAGR of 8.6% through 2032, indicating a significant shift towards clean energy [14]. Share Performance - Over the past six months, TotalEnergies' shares have increased by 7.6%, outperforming the industry's growth of 6.6% [18].

TotalEnergies global LNG portfolio stands at 44 Mt/y in 2023 thanks to its interests in liquefaction plants in all geographies. The company continues to expand its LNG operation through acquisition, partnership and agreements. Its large fleet of LNG tankers and reserved capacity in several regasification terminals make it a perfect partner for the development of LNG projects globally. Expanding LNG operation is in sync with its long-term ambition to increase the share of natural gas in its sales mix to clos ...

TotalEnergies SE (TTE) and EREN Groupe's joint venture TE H2, along with VERBUND, Austria's leading electricity company, have signed a Memorandum of Understanding with Republic of Tunisia to develop a large green hydrogen project named H2 Notos for export to Central Europe through pipelines. Green hydrogen will be produced using electrolysers, powered by large onshore wind and solar projects, and supplied with desalinated sea water. The project aims to produce 200,000 tons of green hydrogen annually during ...

Financial Data and Key Metrics Changes - TotalEnergies reported an adjusted net income of $5.1 billion for Q1 2024, down only 2% sequentially, with cash flow from operations (excluding working capital) of $8.2 billion [28][12] - The return on average capital employed was 16.5%, and the company maintained a net investment guidance of $17 billion to $18 billion for 2024 [12][11] - The interim dividend was increased by 7% year-on-year to EUR 0.79 per share, reflecting a strong commitment to shareholder returns [17][9] Business Line Data and Key Metrics Changes - Exploration and production reported adjusted net operating income of $2.6 billion and cash flow of $4.5 billion, with upstream production costs at $4.6 per barrel [13][12] - Integrated LNG adjusted net operating income was $1.2 billion, impacted by lower LNG prices, with cash flow totaling $1.3 billion [14][12] - Downstream refinery utilization rate was stable at close to 80%, with cash flow from marketing and services increasing by 5% year-on-year to $480 million [15][16] Market Data and Key Metrics Changes - Brent prices were flat quarter-to-quarter, down only 1% to $83 per barrel, while refining margins increased by 36% [28][12] - European gas prices declined by 35% due to a mild winter and high storage levels [28][12] - First quarter LNG sales decreased by 9% quarter-to-quarter, primarily due to lower demand in Europe [30][12] Company Strategy and Development Direction - The company is advancing its two-pillar strategy focused on oil and gas production and integrated power development, aiming to become net cash positive by 2028 [4][22] - TotalEnergies is making progress on several projects, including the Cameia project in Angola and the Marsa LNG project in Oman, which sets a new low-carbon intensity standard [6][7] - The company is also expanding its LNG position and acquiring assets in Malaysia to enhance its integrated gas business [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining production guidance of 2.4 million to 2.5 million barrels of oil equivalent per day for 2024, reflecting a 2% growth year-on-year [29][12] - The company anticipates an increase in refining utilization rates to around 85% in Q2 2024 as operations normalize [32][12] - Management remains optimistic about the LNG market, expecting demand to grow despite potential delays in new capacities [81][12] Other Important Information - The company celebrated its 100th anniversary, emphasizing its commitment to energy transition and sustainable practices [3][21] - TotalEnergies is now the number one company in Europe in terms of employee capital ownership, with over EUR 11 billion owned by employees [27][12] - Gearing increased to around 10% at the end of Q1 2024, compared to 5% at the end of the previous year [33][12] Q&A Session Summary Question: What is the outlook for the LNG market given potential EU sanctions on Russian LNG? - Management indicated that if EU sanctions were imposed on Yamal LNG, it could lead to an increase in LNG prices, benefiting TotalEnergies' portfolio [94][12] Question: Can you provide details on the FID for Namibia and the size of resources? - Management stated that they are comfortable with the FID in Namibia and expect to be the first to produce oil there, with ongoing exploration to capture additional resources [67][69] Question: What is the rationale behind the acquisition of SapuraOMV? - The acquisition strengthens TotalEnergies' position in Malaysia and is seen as a strategic move to enhance its gas business, particularly in relation to LNG pricing [110][12] Question: How does the company view the potential for a U.S. listing? - Management confirmed that the Board is considering a U.S. listing to better access U.S. shareholders and will report back by September [104][12] Question: What are the expectations for share buybacks in the current environment? - Management indicated that share buybacks would be considered if cash flows exceed the base case, but no specific formula is in place [86][12]

Financial Performance - In 2023, TotalEnergies reported net income of $21.4 billion and adjusted net income of $23.2 billion, with cash flow from operating activities of $40.7 billion[37]. - TotalEnergies' sales for 2023 were $237.1 billion, a decrease from $281.0 billion in 2022[48]. - Net income for TotalEnergies was $21,384 million in 2023, a 4% increase compared to $20,526 million in 2022[55]. - Adjusted net income decreased to $23,176 million in 2023 from $36,197 million in 2022, primarily due to lower oil prices and refining margins[56]. - TotalEnergies' cash flow from operating activities was $40,679 million in 2023, a 14% decrease from $47,367 million in 2022[57]. - Total revenues from sales were $218,945 million in 2023, down from $263,206 million in 2022[139]. - Adjusted EBITDA for 2023 was $50,030 million, significantly lower than $71,578 million in 2022[138]. Segment Performance - The Exploration & Production segment generated adjusted net operating income of $10.9 billion, with a reserves replacement ratio of 141% and a proved reserves life index of 12 years[38]. - Integrated LNG achieved annual adjusted net operating income of $6.2 billion, with cash flow from operating activities of $8.4 billion[39]. - Integrated Power's cash flow from operating activities was $3.6 billion, more than double the previous year's cash flow, supported by several acquisitions in the US and Europe[40]. - Downstream segments reported adjusted net operating income of $6.1 billion, with cash flow from operating activities of $9.9 billion[41]. - Integrated LNG reported net investments of $3,159 million in 2023, a substantial increase from $472 million in 2022, with net acquisitions rising to $1,096 million[142]. - Integrated Power's net investments reached $4,945 million in 2023, compared to $3,521 million in 2022, with net acquisitions increasing to $2,363 million[143]. Production and Sales - Hydrocarbon production was 2,483 kboe/d in 2023, a 2% increase from 2,437 kboe/d in 2022, excluding Novatek[55]. - For 2024, TotalEnergies anticipates hydrocarbon production growth of 2% compared to 2023, with expected production above 2.4 Mboe/d in Q1[45]. - The company expects LNG sales to exceed 40 Mt in 2024, with average LNG selling prices stable around $10/Mbtu in Q1[44]. - For full-year 2023, LNG sales decreased by 8% compared to 2022, mainly due to lower spot volumes related to reduced demand in Europe[91]. Dividends and Shareholder Returns - TotalEnergies plans to distribute a final 2023 dividend of €0.79/share, marking a 7.1% increase from the previous year[42]. - TotalEnergies' Board confirmed a shareholder return policy for 2024, including a 6.8% increase in interim dividends and $2 billion in share buybacks[46]. - The payout ratio for 2023 was 46.0%, compared to 37.2% in 2022[158]. - TotalEnergies repurchased 144,700,577 shares in 2023, with 142,569,920 shares allocated for cancellation at a cost of $9.00 billion[170]. Investments and Capital Expenditures - Total expenditures in 2023 were $24,860 million, up from $19,802 million in 2022, with 50% allocated to Exploration & Production[160]. - Organic investments across all sectors totaled $18,126 million in 2023, an increase from $11,852 million in 2022, highlighting a focus on growth initiatives[147]. - The net investments in Exploration & Production for 2023 totaled $7,526 million, down from $10,027 million in 2022, with net acquisitions showing a significant decline to $(2,706) million[141]. - Total cash flow used in investing activities was $16,454 million in 2023, an increase from $15,116 million in 2022[140]. Financial Position and Ratios - The gearing ratio for TotalEnergies improved to 5.0% in 2023 from 7.0% in 2022, indicating a stronger financial position[153]. - TotalEnergies' net cash flow was $19,109 million in 2023, down from $29,426 million in 2022, reflecting a decrease in cash flow from operations excluding working capital[62]. - The company’s total liabilities decreased from $36,727 million in 2022 to $34,938 million in 2023, indicating a reduction in financial obligations[155]. - The net-debt-to-capital ratio as of December 31, 2023, was 5.0%, a significant decrease from 7.0% in 2022 and 15.3% in 2021, primarily due to changes in net debt[171]. Strategic Changes and Challenges - TotalEnergies recorded a $4.1 billion impairment charge in Q4 2022 related to the deconsolidation of its stake in Novatek due to the impact of international sanctions[191]. - The company has fully impaired its Russian assets in 2022, with total impairments and provisions amounting to $(14,756) million in its net result[191]. - TotalEnergies has provisioned $1.822 billion in its accounts related to its investments in Russia as of March 31, 2022[198]. - The company initiated a contractual suspension procedure for the LNG purchase contract with Arctic LNG 2 on November 7, 2023, following US sanctions[204].

3. Effect of changes in fair value These adjustment items include: Due to their unusual nature or particular significance, certain transactions qualifying as "special items" are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. 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 qualify as special ...

TotalEnergies SE (NYSE:TTE) Q4 2023 Earnings Conference Call February 7, 2024 4:30 AM ET Company Participants Renaud Lions - Investor Relations Bernard Pinatel - President, Refining & Chemicals Jean-Pierre Sbraire - Chief Financial Officer Patrick Pouyanné - Chairman, Chief Executive Officer and President Stephane Michel - President, Gas, Renewables & Power Conference Call Participants Irene Himona - Societe Generale Oswald Clint - Bernstein Michele Vigna - Goldman Sachs Martijn Rats - Morgan Stanley Lucas ...

Patrick Pouyanne - Chairman, CEO & President Jean-Pierre Sbraire - CFO Ladies and gentlemen, welcome to the TotalEnergies Third Quarter 2023 Results Conference Call. As explained in our total strategy and outlook presentation end of September, we have stayed the course, and this quarter illustrates all the strategies in motion in all of business segments. Oil and gas first, as you know, we have developed organically a deep portfolio of projects. But our low cost and low emissions, which will offer a growth ...

[Operating and Financial Review and Prospects](index=1&type=section&id=OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) [Key Figures](index=1&type=section&id=A.%20KEY%20FIGURES) TotalEnergies reported a 15% YoY sales decrease to $59.0 billion in Q3 2023, with adjusted net operating income down 34% to $6.8 billion, alongside a 5% rise in hydrocarbon production (excl. Novatek) and an 18% reduction in GHG emissions Q3 2023 and 9M 2023 Key Financial Figures (in millions of dollars) | | 3Q23 | 3Q22 | 3Q23 vs 3Q22 | 9M23 | 9M22 | 9M23 vs 9M22 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Sales** | 59,017 | 69,037 | -15% | 177,891 | 212,417 | -16% | | **Net income (TotalEnergies share)** | 6,676 | 6,626 | +1% | 16,321 | 17,262 | -5% | | **Adjusted EBITDA** | 13,062 | 19,420 | -33% | 38,334 | 55,581 | -31% | | **Adjusted net operating income** | 6,808 | 10,279 | -34% | 19,383 | 30,237 | -36% | | **Cash flow from operating activities** | 9,496 | 17,848 | -47% | 24,529 | 41,749 | -41% | | **Net investments** | 5,091 | 4,703 | +8% | 16,102 | 12,501 | +29% | Environment - Price Realizations | | 3Q23 | 3Q22 | 3Q23 vs 3Q22 | 9M23 | 9M22 | 9M23 vs 9M22 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Brent ($/b)** | 86.7 | 100.8 | -14% | 82.1 | 105.5 | -22% | | **Average price of liquids ($/b)** | 78.9 | 93.6 | -16% | 74.9 | 95.4 | -22% | | **Average price of gas ($/Mbtu)** | 5.47 | 16.83 | -67% | 6.80 | 13.28 | -49% | | **Average price of LNG ($/Mbtu)** | 9.56 | 21.51 | -56% | 10.92 | 16.26 | -33% | - Scope 1+2 GHG emissions from operated facilities decreased by **18% YoY** in Q3 2023, attributed to reduced flaring in Exploration & Production and lower utilization of gas-fired power plants in Europe[9](index=9&type=chunk)[12](index=12&type=chunk) - Total hydrocarbon production was **2,476 thousand barrels of oil equivalent per day** in Q3 2023, with production excluding Novatek increasing by **5% YoY** due to portfolio additions and project ramp-ups[15](index=15&type=chunk)[16](index=16&type=chunk)[23](index=23&type=chunk) [Analysis of Business Segment Results](index=3&type=section&id=B.%20ANALYSIS%20OF%20BUSINESS%20SEGMENT%20RESULTS) Effective January 1, 2023, TotalEnergies restructured its reporting into five business segments, utilizing adjusted financial indicators to measure performance by excluding special items and valuation effects - TotalEnergies' performance is measured using adjusted financial indicators like Adjusted Net Operating Income, which exclude special items, inventory valuation effects, and changes in fair value for trading activities[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - As of January 1, 2023, the company implemented a new reporting structure with five business segments: Exploration-Production, Integrated LNG, Integrated Power, Refining & Chemicals, and Marketing & Services[27](index=27&type=chunk)[30](index=30&type=chunk) [Exploration & Production](index=5&type=section&id=B.1%20Exploration%20%26%20Production) The Exploration & Production segment's adjusted net operating income was **$3.14 billion** in Q3 2023, down 26% YoY but up 34% QoQ, driven by higher oil prices and a favorable portfolio mix, with production (excl. Novatek) rising 3% YoY Exploration & Production Financial and Operational Highlights | Indicator | 3Q23 | 3Q22 | % Change | 9M23 | 9M22 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Adjusted Net Operating Income (M$)** | 3,138 | 4,217 | -26% | 8,140 | 13,951 | -42% | | **Hydrocarbon Production (kboe/d)** | 2,043 | 2,251 | -9% | 2,045 | 2,292 | -11% | | **Production excl. Novatek (kboe/d)** | 2,043 | 1,988 | +3% | 2,045 | 2,023 | +1.1% | | **Organic Investments (M$)** | 2,557 | 1,989 | +29% | 7,115 | 5,288 | +35% | - Adjusted net operating income increased **34% quarter-over-quarter** to **$3,138 million**, primarily due to higher oil prices and a lower effective tax rate[36](index=36&type=chunk) [Integrated LNG](index=6&type=section&id=B.2%20Integrated%20LNG) The Integrated LNG segment's adjusted net operating income was **$1.34 billion** in Q3 2023, a **61% YoY decrease** primarily due to lower LNG prices and exceptional Q3 2022 trading results, despite an 18% YoY growth in hydrocarbon production (excl. Novatek) Integrated LNG Financial and Operational Highlights | Indicator | 3Q23 | 3Q22 | % Change | 9M23 | 9M22 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Adjusted Net Operating Income (M$)** | 1,342 | 3,413 | -61% | 4,744 | 8,761 | -46% | | **Hydrocarbon Production for LNG (kboe/d)** | 433 | 418 | +4% | 445 | 458 | -3% | | **Overall LNG Sales (Mt)** | 10.5 | 10.4 | - | 32.5 | 35.4 | -8% | | **Organic Investments (M$)** | 495 | 213 | x2.3 | 1,273 | 324 | x3.9 | - The **53% YoY decrease** in adjusted net operating income (excluding Novatek) was primarily driven by lower LNG prices and exceptionally strong trading results in Q3 2022, partly mitigated by higher production[42](index=42&type=chunk) - Cash flow from operations excluding working capital (CFFO) was **$1,648 million** in Q3 2023, down **34% YoY** (excluding Novatek), mainly due to lower LNG prices, partially offset by high margins captured in 2022[42](index=42&type=chunk) [Integrated Power](index=7&type=section&id=B.3%20Integrated%20Power) The Integrated Power segment's adjusted net operating income more than doubled to **$506 million** in Q3 2023, driven by a 2.3x YoY increase in renewables production and gross installed renewable capacity surpassing **20 GW** Integrated Power Financial and Operational Highlights | Indicator | 3Q23 | 3Q22 | % Change | 9M23 | 9M22 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Adjusted Net Operating Income (M$)** | 506 | 236 | x2.1 | 1,326 | 494 | x2.7 | | **Net Power Production (TWh)** | 8.9 | 8.5 | +4% | 25.5 | 23.7 | +7% | | **o/w Renewables Production (TWh)** | 5.4 | 2.4 | x2.3 | 13.5 | 7.1 | +90% | | **Gross Installed Renewable Capacity (GW)** | 20.2 | 16.0 | +26% | 20.2 | 16.0 | +26% | - Net power production rose **7% quarter-over-quarter** to **8.9 TWh**, driven by growing renewable generation following the full integration of Total Eren and new solar project start-ups[45](index=45&type=chunk) - Adjusted net operating income for the first nine months of 2023 was **$1,326 million**, **2.7 times higher** than the prior year, reflecting the success of its profitable Integrated Power model[50](index=50&type=chunk) [Refining & Chemicals](index=9&type=section&id=B.5%20Refining%20%26%20Chemicals) The Refining & Chemicals segment's adjusted net operating income was **$1.40 billion** in Q3 2023, down 28% YoY but up 39% QoQ, driven by higher European refining margins and an 84% utilization rate, despite a 7% YoY decrease in throughput Refining & Chemicals Financial and Operational Highlights | Indicator | 3Q23 | 3Q22 | % Change | 9M23 | 9M22 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Adjusted Net Operating Income (M$)** | 1,399 | 1,935 | -28% | 4,021 | 5,815 | -31% | | **Total Refinery Throughput (kb/d)** | 1,489 | 1,599 | -7% | 1,456 | 1,497 | -3% | | **Refinery Utilization Rate** | 84% | 88% | - | 81% | 84% | - | - Refinery throughput decreased **7% YoY** in Q3 2023, primarily due to planned maintenance and unplanned shutdowns at the Port Arthur (US) and Antwerp (Belgium) refineries[54](index=54&type=chunk) - Adjusted net operating income rose **39% quarter-over-quarter**, reflecting higher refining margins in Europe and an increased refinery utilization rate[58](index=58&type=chunk) [Marketing & Services](index=11&type=section&id=B.6%20Marketing%20%26%20Services) The Marketing & Services segment reported an adjusted net operating income of **$423 million** in Q3 2023, down **12% YoY**, primarily due to a **6% YoY decrease** in petroleum product sales from the Egypt divestment, partially offset by aviation sector recovery Marketing & Services Financial and Operational Highlights | Indicator | 3Q23 | 3Q22 | % Change | 9M23 | 9M22 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Adjusted Net Operating Income (M$)** | 423 | 478 | -12% | 1,152 | 1,216 | -5% | | **Petroleum Product Sales (kb/d)** | 1,399 | 1,495 | -6% | 1,386 | 1,475 | -6% | - The **6% YoY decrease** in petroleum product sales was mainly due to the portfolio effect from the disposal of 50% of the fuel distribution business in Egypt, partly offset by the recovery in aviation fuel demand[60](index=60&type=chunk) [TotalEnergies Results](index=12&type=section&id=C.%20TOTALENERGIES%20RESULTS) In Q3 2023, TotalEnergies' net income remained stable at **$6.7 billion**, with adjusted net income at **$6.5 billion**, while the company repurchased **$2.1 billion** in shares and generated **$9.3 billion** in cash flow from operations - Adjusted net income was **$6.5 billion** in Q3 2023, up from **$5.0 billion** in Q2 2023, mainly due to higher oil prices and refining margins, with total adjustments of **$223 million**[65](index=65&type=chunk)[66](index=66&type=chunk) - Shareholder returns in Q3 2023 included the repurchase of **33.9 million shares** for **$2.1 billion**[66](index=66&type=chunk) - Key acquisitions in Q3 2023 totaled **$2.0 billion**, primarily for Total Eren and the Rio Grande LNG project, while divestments amounted to **$1.2 billion**[66](index=66&type=chunk) - Cash flow from operations excluding working capital (CFFO) was **$9.3 billion** in Q3 2023, down **20% YoY**, resulting in a net cash flow of **$4.2 billion** after **$5.1 billion** in net investments[69](index=69&type=chunk)[70](index=70&type=chunk) [Profitability](index=14&type=section&id=D.%20PROFITS) TotalEnergies' profitability metrics, while declining from prior year highs, remained strong with a Return on Equity (ROE) of **22.3%** and a Return on Average Capital Employed (ROACE) of **20.1%** for the twelve months ending September 30, 2023 Profitability Ratios (Twelve months ended) | In millions of dollars | Oct 1, 2022 - Sep 30, 2023 | Oct 1, 2021 - Sep 30, 2022 | | :--- | :--- | :--- | | **Adjusted net income** | 25,938 | 35,790 | | **Return on equity (ROE)** | 22.3% | 31.4% | | **Adjusted net operating income** | 27,351 | 37,239 | | **Return on average capital employed (ROACE)** | 20.1% | 27.2% | [Annual 2023 Sensitivities](index=14&type=section&id=E.%20Annual%202023%20Sensitivities) The company's financial performance is sensitive to commodity price and exchange rate changes, with a **$10 per barrel** shift in average liquids price estimated to impact annual adjusted net operating income by **$2.5 billion** and cash flow from operations by **$3.0 billion** Annual 2023 Sensitivities | | Change | Estimated impact on adjusted net operating income | Estimated impact on cash flow from operations | | :--- | :--- | :--- | :--- | | **Average liquids price** | +/- 10$/b | +/- 2.5 B$ | +/- 3.0 B$ | | **European gas price – NBP / TTF** | +/- 2 $/Mbtu | +/- 0.4 B$ | +/- 0.4 B$ | | **Dollar** | +/- 0.1 $ per € | -/+ 0.1 B$ | ~0 B$ | [Summary and Outlook](index=14&type=section&id=F.%20SUMMARY%20AND%20OUTLOOK) For Q4 2023, TotalEnergies anticipates oil prices around **$90/b** and average LNG selling prices above **$10/Mbtu**, with hydrocarbon production projected between **2.4 and 2.5 Mboe/d**, while confirming **$16-$17 billion** in net investment guidance - The company anticipates its average LNG selling price to be above **$10 per Mbtu** in Q4 2023, given the evolution of oil and gas prices and lag effects on price formulas[77](index=77&type=chunk) - Guidance for Q4 2023 includes hydrocarbon production expected between **2.4 and 2.5 million barrels of oil equivalent per day**, reflecting the Canadian oil sands asset sale, and a refinery utilization rate above **80%**[78](index=78&type=chunk) - The company confirms its 2023 net investment guidance of **$16 billion to $17 billion**, anticipating **$4.1 billion** in cash from Canadian asset divestments in Q4 2023, potentially lowering gearing below **8%**[79](index=79&type=chunk) [Financial Statements and Reconciliations](index=16&type=section&id=FINANCIAL%20STATEMENTS%20AND%20RECONCILIATIONS) This section provides detailed financial data, including segment operating information, non-GAAP reconciliations, and core consolidated financial statements, highlighting a **12.3%** gearing ratio and a **42.7%** payout ratio for the first nine months of 2023 Gearing Ratio as of September 30, 2023 | In millions of dollars | 09/30/2023 | | :--- | :--- | | **Net debt (a)** | 16,676 | | **Shareholders' equity (b)** | 118,424 | | **Gearing = a / (a+b)** | **12.3%** | | **Leases (c)** | 8,277 | | **Gearing including leases (a+c) / (a+b+c)** | **17.4%** | Payout Ratio | In millions of dollars | 9M23 | 9M22 | | :--- | :--- | :--- | | **Dividend paid (a)** | 5,648 | 5,630 | | **Share buy-backs (b)** | 6,082 | 4,979 | | **CFFO (c)** | 27,446 | 36,595 | | **Payout ratio = (a+b) / c** | **42.7%** | **29.0%** | [Consolidated Statement of Income](index=30&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20INCOME) For the nine months ended September 30, 2023, TotalEnergies' revenues from sales decreased to **$164.2 billion**, with consolidated net income at **$16.5 billion** and fully-diluted earnings per share remaining stable at **$6.57** Consolidated Statement of Income (9 Months Ended) | (M$) | 9 months 2023 | 9 months 2022 | | :--- | :--- | :--- | | **Revenues from sales** | 164,180 | 199,357 | | **Consolidated net income** | 16,473 | 17,603 | | **Net income (TotalEnergies share)** | **16,321** | **17,262** | | **Fully-diluted earnings per share ($)** | **6.57** | **6.57** | [Consolidated Balance Sheet](index=34&type=section&id=CONSOLIDATED%20BALANCE%20SHEET) As of September 30, 2023, TotalEnergies reported total assets of **$290.0 billion** and total shareholders' equity of **$118.4 billion**, while net debt (excluding leases) increased to **$16.7 billion** due to share buybacks and dividends Consolidated Balance Sheet Highlights (in millions of dollars) | | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | | :--- | :--- | :--- | :--- | | **Total Assets** | 290,004 | 303,864 | 349,715 | | **Total Liabilities** | 171,580 | 189,294 | 229,043 | | **Total Shareholders' Equity** | 118,424 | 114,570 | 120,672 | | **Cash and cash equivalents** | 24,731 | 33,026 | 35,941 | [Consolidated Statement of Cash Flow](index=35&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOW) For the first nine months of 2023, cash flow from operating activities was **$24.5 billion**, decreasing from **$41.7 billion** in 2022, with **$15.8 billion** used in investing and **$16.7 billion** in financing activities, resulting in an **$8.0 billion** net decrease in cash Consolidated Statement of Cash Flow (9 Months Ended, in millions of dollars) | | 9M 2023 | 9M 2022 | | :--- | :--- | :--- | | **Cash flow from operating activities** | 24,529 | 41,749 | | **Cash flow used in investing activities** | (15,822) | (11,435) | | **Cash flow from (used in) financing activities** | (16,691) | (12,699) | | **Net increase (decrease) in cash** | (7,984) | 17,615 | [Notes to the Consolidated Financial Statements](index=41&type=section&id=NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section details the basis of financial statement preparation, significant structural changes including acquisitions and divestments, shareholder equity matters like share cancellations and dividends, and key risks such as geopolitical issues and climate-related litigation [Changes in the Company structure](index=42&type=section&id=2)%20Changes%20in%20the%20Company%20structure) During 2023, TotalEnergies made significant portfolio adjustments, including acquiring a **20%** interest in SARB and Umm Lulu and fully acquiring Total Eren, while divesting its Surmont and Fort Hills oil sands assets and agreeing to sell retail networks in Germany and the Netherlands - Completed the acquisition of a **20% interest** in the SARB and Umm Lulu offshore concession in the UAE in March 2023[154](index=154&type=chunk)[151](index=151&type=chunk) - Completed the acquisition of the remaining shares of Total Eren in July 2023 for a net investment of **€1,467 million**, integrating its **3.5 GW** of operational renewable assets[155](index=155&type=chunk) - Finalized the sale of its **50% interest** in the Surmont oil sands asset to ConocoPhillips for **C$4.03 billion** and agreed to sell the Fort Hills asset to Suncor for **C$1.47 billion**[159](index=159&type=chunk)[160](index=160&type=chunk) - Agreed to sell its retail networks in Germany and the Netherlands to Alimentation Couche-Tard, based on an enterprise value of **€3.1 billion**, with these assets classified as held for sale[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Shareholders' equity](index=50&type=section&id=4)%20Shareholders'%20equity) The company executed significant share cancellations in 2023, retiring over **214 million** treasury shares, while the Board of Directors established a consistent quarterly interim dividend of **€0.74 per share** for 2023 - The Board of Directors decided to cancel **128.9 million** treasury shares bought back in 2022 and an additional **86.0 million** treasury shares bought back in 2023[188](index=188&type=chunk)[189](index=189&type=chunk) 2023 Interim Dividend Schedule | Dividend 2023 | First interim | Second interim | Third interim | | :--- | :--- | :--- | :--- | | **Amount** | €0.74 | €0.74 | €0.74 | | **Payment date** | Oct 2, 2023 | Jan 12, 2024 | Apr 3, 2024 | [Other risks and contingent liabilities](index=53&type=section&id=7)%20Other%20risks%20and%20contingent%20liabilities) TotalEnergies faces material risks including suspended operations at Yemen LNG and Mozambique LNG due to geopolitical instability, and ongoing climate-related lawsuits in France and the US concerning its vigilance plan, communications, and historical GHG emissions - Operations remain suspended at the Yemen LNG plant (since 2015) and the Mozambique LNG project (since 2021) due to security issues, with force majeure declared at both sites[203](index=203&type=chunk)[204](index=204&type=chunk) - The company is facing several climate-related legal challenges in France and the US, including lawsuits regarding its Vigilance Plan, alleged misleading environmental claims, and liability for historical GHG emissions, which TotalEnergies considers unfounded[205](index=205&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk)