September 2022 - Strategy and Outlook
Disclaimer
The terms "Total Energies", "TotalEnergies company" and "Company" in this document are used to designate Total Energies SE
and the consolidated entities directly or indirectly controlled by Total Energies SE. Likewise, the words "we", "us" and "our" may
also be used to refer to these entities or their employees. The entities in which Total Energies 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
Total Energies. 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 Total Energies, it being specified that the means to be deployed do not depend solely on
Total Energies. 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 Total Energies 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 Total Energies' 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 Total Energies. 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 Total Energies 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:
1. Special items
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TotalEnergies
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.
2. 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.
3. 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 Energies' 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, Total Energies 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 (€-$) exchange rate for the applicable period and are not the result of financial statements prepared in euros.
This document is not, does not contain and may not be deemed to constitute an offer for the sale or the subscription of securities.
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", "future 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 Total Energies SE, File
N° 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.
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