“Non-current debt obligations” are included in the items “Non-current financial debt” and “Non-current financial assets” of the Consolidated Balance Sheet. It includes the non-current portion of swaps hedging bonds, and excludes non-current lease obligations of $7,736 million.

The current portion of non-current debt is included in the items “Current borrowings”, “Current financial assets” and “Other current financial liabilities” of the Consolidated Balance Sheet. It includes the current portion of swaps hedging bonds, and excludes the current portion of lease obligations of $1,207 million.

The information regarding contractual obligations linked to indebtedness is presented in Note 15 to the Consolidated Financial Statements.

The information regarding leases is presented in Note 13.2 to the Consolidated Financial Statements.

This item represents the discounted present value of Exploration & Production and Integrated Gas, Renewables & Power asset retirement obligations, primarily asset removal costs at the completion date. The information regarding contractual obligations linked to asset retirement obligations is presented in Note 12 to the Consolidated Financial Statements.

Purchase obligations are obligations under contractual agreements to purchase goods or services, including capital projects. These obligations are enforceable and legally binding on the company and specify all significant terms, including the amount and the timing of the payments.

These obligations mainly include: unconditional hydrocarbon purchase contracts (except where an active, highly-liquid market exists and when the hydrocarbons are expected to be re-sold shortly after purchase) in the Integrated Gas, Renewables & Power segment, reservation of transport capacities in pipelines, unconditional exploration works and development works in the Exploration & Production segment, and contracts for capital investment projects in the Refining & Chemicals segment.

These consist of guarantees given by the Group to customs authorities in order to guarantee the payments of taxes and excise duties on the importation of oil and gas products, mostly in France.

The Group guarantees bank debt and lease obligations of certain non-consolidated subsidiaries and equity affiliates. Maturity dates vary, and guarantees will terminate on payment and/or cancellation of the obligation. A payment would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee, and no assets are held as collateral for these guarantees. As of December 31, 2020, the maturities of these guarantees are up to 2053.

As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Ichthys LNG project amount to $4,912 million. As of December 31, 2019, the guarantees amounted to $4,937 million.

As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Yamal LNG project for an amount of $3,250 million by TOTAL SE. As of December 31, 2019, the guarantees amounted to $3,688 million.

As of December 31, 2020, TOTAL SE has confirmed guarantees for TOTAL Refining SAUDI ARABIA SAS shareholders' advances for an amount of $1,164 million. As of December 31, 2019, the guarantees amounted to $1,184 million.

As of December 31, 2020, the guarantee given in 2008 by TOTAL SE in connection with the financing of the Yemen LNG project amounts to $509 million as in 2019.

As of December 31, 2020, guarantees provided by TOTAL SE in connection with the financing of the Bayport Polymers LLC project, amount to $1,820 million as in 2019.

In the ordinary course of business, the Group executes contracts involving standard indemnities for the oil industry and indemnities specific to transactions such as sales of businesses. These indemnities might include claims against any of the following: environmental, tax and shareholder matters, intellectual property rights, governmental regulations and employment-related matters, and commercial contractual relationships. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third party claim. The Group regularly evaluates the probability of having to incur costs associated with these indemnities.

The Group also guarantees the current liabilities of certain non-consolidated subsidiaries. Performance under these guarantees would be triggered by a financial default of the entity.

As part of normal ongoing business operations and consistent with generally accepted industry practices, the Group enters into numerous agreements with other parties. These commitments are often entered into for commercial purposes, for regulatory purposes or for other operating agreements.

These amounts represent binding obligations to sell goods, including in particular hydrocarbon sales contracts (except where an active, highly-liquid market exists and when the volumes are expected to be re-sold shortly after purchase).

As part of the first application of IFRS 16 "Leases" as of January 1, 2019, the Group:

-

applied the simplified retrospective transition method, accounting for the cumulative effect of the initial application of the standard at the date of first application, without restating the comparative periods;

-

used the following simplification measures provided by the standard in the transitional provisions:

o

exclusion of contracts that the Group had not previously identified as containing a lease under IAS 17 and IFRIC 4,

o

exclusion of leases whose term ends within 12 months of the date of first application;

-

recognized each lease component as a separate lease, separately from non-lease components of the lease (services);

-

applied the two exemptions of the standard on short-term leases and leases of low-value assets.

The impact of the application of this standard as at January 1, 2019 is $5,698 million on fixed assets, $(5,505) million on net debt and $(193) million on other assets and liabilities. The weighted average incremental borrowing rate of 4.5% at transition date was determined on the basis of the initial duration of the contracts.

In 2019, the impact on fixed assets was broken down as follows:


(in M$)
Right of use of buildings		2,278
Right of use of machinery, plant and equipment (including transportation equipment)		2,632
Other right of use		788
TOTAL		5,698

The Group mainly leases real estate, retail stations, ships, and other equipment (see Note 7 to the Consolidated Financial Statements).

A-Reconciliation between the operating lease commitments disclosed under IAS17 at December 31, 2018 and the additional lease liabilities (IFRS 16) recognized on the balance sheet at January 1, 2019

Reconciliation between the operating lease commitments disclosed under IAS 17 at December 31, 2018 and the additional lease liabilities (IFRS 16) recognized on the balance sheet at January 1, 2019

The reconciliation is as follows:


		January 1,
M$		2019
Operating lease commitments at December 31, 2018		9,130
Commitments relating to IFRS 16 exemptions:		(417)
- Low value assets		(90)
- Short-term leases		(327)
Leases not yet commenced at January 1, 2019		(608)
Commitments relating to service component of lease contracts		(760)
Commitments relating to leases of non identified assets or substitute assets		(628)
Variable lease payments		(6)
Other impacts		204
Impact of discounting		(1,360)
ADDITIONAL LEASE LIABILITY ON CONTRACTS PREVIOUSLY ACCOUNTED FOR AS OPERATING LEASES		5,555
Finance lease liability at December 31, 2018		1,878
TOTAL LEASE LIABILITY AT JANUARY 1, 2019		7,433

Other information required on lease debts, notably their maturity, is presented in Note 15 to the consolidated financial statements.

B-The future minimum lease payments on leases to which the Group is committed

The future minimum lease payments on leases to which the Group is committed are as follows:


For the year ended December 31, 2020		Leases recorded in
(M$)	Exempted contracts	balance sheet
2021	704	1,659
2022	252	1,366
2023	159	1,117
2024	118	1,022
2025	97	964
2026 and beyond	415	6,325
Total minimum payments	1,745	12,453
Less financial expenses		(3,510)
Nominal value of contracts		8,943
Less current portion of lease contracts		(1,207)
NON-CURRENT LEASE LIABILITIES		7,736


For the year ended December 31, 2019		Leases recorded in
(M$)	Exempted contracts	balance sheet
2020	536	1,586
2021	360	1,228
2022	212	1,019
2023	162	835
2024	145	766
2025 and beyond	662	4,757
Total minimum payments	2,077	10,191
Less financial expenses		(2,726)
Nominal value of contracts		7,465
Less current portion of lease contracts		(1,202)
NON-CURRENT LEASE LIABILITIES		6,263


For the year ended December 31, 2018
(M$)	Operating leases	Finance leases
2019	1,644	263
2020	1,282	183
2021	967	182
2022	772	179
2023	669	179
2024 and beyond	3,796	1,826
Total minimum payments	9,130	2,812
Less financial expenses		(934)
Nominal value of contracts		1,878
Less current portion of finance lease contracts		(213)
NON-CURRENT FINANCE LEASE LIABILITIES		1,665

For the year ended December 31, 2020, rental expense recorded in the income statement and incurred under short term leases or low value assets leases and under variable lease payments is $600million and $162 million, respectively.

For the year ended December 31, 2019, rental expense recorded in the income statement and incurred under short term leases or low value assets leases and under variable lease payments is $366 million and $132 million, respectively.

Rental expense recorded in the income statement and incurred under operating leases for the year ended December 31, 2018 is $1,304 million.