The bonds, as of December 31, 2022, after taking into account currency and interest rates swaps fair value, are detailed as follows:

These analyses take into account interest rate and foreign currency swaps to hedge non-current financial net debt.

Current borrowings consist mainly of drawings on commercial papers or treasury bills and of bank loans. These instruments bear interest at rates that are close to market rates. Current deposits beyond three months include initial margins held as part of the Company’s activities on organized markets.

(a) Fair value or cash flow hedge instruments and other non-hedge debt-related derivative instruments.

Cash equivalents are mainly composed of deposits with a maturity of less than three months, deposited in government institutions or deposit banks selected in accordance with strict criteria.

As of December 31, 2022, the cash and cash equivalents include $2,352 million subject to restrictions, notably due to regulatory framework or to the fact they are owned by affiliates located in countries with exchange controls.

For its internal and external communication needs, TotalEnergies calculates a debt ratio by dividing its net financial debt excluding leases by its capital.

The ratio is calculated as follows: Net debt excluding leases / (Equity + Net debt excluding leases)

The impact on the income statement of financing assets and liabilities mainly includes:

Financial derivative instruments used for cash management purposes (interest rate and foreign exchange) are considered to be held for trading. Based on practical documentation issues, TotalEnergies did not elect to set up hedge accounting for such instruments. The impact on income statement of the derivatives is offset by the impact of loans and current liabilities they are related to. Therefore these transactions taken as a whole do not have a significant impact on the Consolidated Financial Statements.


For the year ended December 31,
(M$)	2022	2021	2020
Loans and receivables	562	188	154
Financing liabilities and associated hedging instruments	(1,812)	(1,373)	(1,660)
Fair value hedge (ineffective portion)	(5)	(10)	12
Lease assets and obligations	(458)	(413)	(422)
Assets and liabilities held for trading	470	83	(194)
IMPACT ON THE COST OF NET DEBT	(1,243)	(1,525)	(2,110)

B) Impact of the hedging strategies

Fair value hedge instruments

The impact on the income statement of the bond hedging instruments which is recorded in the item “Financial interest on debt” in the Consolidated Statement of Income is detailed as follows:


For the year ended December 31,
(M$)	2022	2021	2020
Revaluation impact at market value of bonds	3,817	3,199	(4,004)
Swaps hedging bonds	(3,822)	(3,209)	4,016
INEFFECTIVE PORTION OF THE FAIR VALUE HEDGE	(5)	(10)	12

The ineffective portion is not representative of TotalEnergies’ performance considering its objective to hold swaps to maturity. The current portion of the swaps valuation is not subject to active management.

Net investment hedge

As of December 31, 2022, 2021 and 2020 TotalEnergies had no open forward contracts held in respect of net investment hedge strategies.

Cash flow hedge

The impact on the income statement and other comprehensive income of the bonds hedging instruments qualified as cash flow hedges is detailed as follows:


For the year ended December 31,
(M$)	2022	2021	2020
Profit (Loss) recorded in other comprehensive income of the period	72	(167)	(327)
Recycled amount from other comprehensive income to the income statement of the period	(55)	(113)	139

As of December 31, 2022, 2021 and 2020, the ineffective portion of these financial instruments is nil.

Hedging instruments and hedged items by strategy

Fair Value Hedge

The following charts regarding Fair Value Hedge, disclose by nature of hedging instruments (Interest Rate Swaps and Cross Currency Swaps):

The nominal amounts and carrying amounts of hedging instruments;

The carrying amounts of hedged items and cumulative FVH adjustments included in the carrying amounts of the hedged items;

The hedged items that have ceased to be adjusted for hedging gains and losses.

For the year ended December 31, 2022

(M$)

Cumulative FVH

Nominal

adjustments included

amount of

Carrying amount of

in the carrying amount

Line items in the

Hedging

hedging

hedging instruments

hedged items

of the hedged items

statement of

Hedged items

instruments

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

financial position

Interest Rate

Financial debt /

Bonds

Swaps

5,000

–

(151)

–

(4,892)

–

108

Financial assets

Cross Currency

Financial debt /

Bonds

Swaps

7,029

–

(1,124)

–

(5,982)

–

1,047

Financial assets

End of hedging (before 2018)

–

(8)

For the year ended December 31, 2021

(M$)

Cumulative FVH

Nominal

adjustments included

amount of

Carrying amount of

in the carrying amount

Line items in the

Hedging

hedging

hedging instruments

hedged items

of the hedged items

statement of

Hedged items

instruments

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

financial position

Bonds

Interest Rate

Financial debt /

Swaps

6,767

303

(36)

–

(7,037)

–

(837)

Financial assets

Bonds

Cross Currency

Financial debt /

Swaps

9,566

154

(382)

–

(8,865)

–

701

Financial assets

End of hedging (before 2018)

–

(27)

For the year ended December 31, 2020

Cumulative FVH

(M$)

Nominal

adjustments included

amount of

Carrying amount of

in the carrying amount

Line items in the

Hedging

hedging

hedging instruments

hedged items

of the hedged items

statement of

Hedged items

instruments

Assets

Liabilities

Assets

Liabilities

Assets

Liabilities

financial position

Bonds

Interest Rate
Swaps

8,063

527

(15)

–

(8,586)

–

(1,136)

Financial debt /
Financial assets

Bonds

Cross Currency
Swaps

11,011

836

(211)

–

(11,109)

–

(98)

Financial debt /
Financial assets

End of hedging (before 2018)

–

(47)

Cash Flow Hedge

The following charts regarding Cash Flow Hedge disclose the nominal amounts and carrying amounts by nature of hedging instruments (Interest Rate Swaps and Cross Currency Swaps).

According to IFRS 9, there is no accounting entry related to Cash Flow Hedge on hedged items.


		Nominal
	Nature of	amount of	Carrying amount of		Line items in the
For the year ended December 31, 2022	hedging	hedging	hedging instruments		statement of
(M$)	instruments	instruments	Assets	Liabilities	financial position
	Interest Rate				Financial debt /
Bonds	Swaps	12,782	815	(2)	Financial assets
	Cross Currency				Financial debt /
Bonds	Swaps	17,511	–	(2,731)	Financial assets


		Nominal
	Nature of	amount of	Carrying amount of		Line items in the
For the year ended December 31, 2021	hedging	hedging	hedging instruments		statement of
(M$)	instruments	instruments	Assets	Liabilities	financial position
	Interest Rate				Financial debt /
Bonds	Swaps	12,782	–	(736)	Financial assets
	Cross Currency				Financial debt /
Bonds	Swaps	17,511	372	(660)	Financial assets


		Nominal
	Nature of	amount of	Carrying amount of		Line items in the
For the year ended December 31, 2020	hedging	hedging	hedging instruments		statement of
(M$)	instruments	instruments	Assets	Liabilities	financial position
	Interest Rate				Financial debt /
Bonds	Swaps	12,781	–	(1,441)	Financial assets
	Cross Currency				Financial debt /
Bonds	Swaps	17,511	1,856	(32)	Financial assets

C) Maturity of derivative instruments

The maturity of the notional amounts of derivative instruments, excluding the commodity contracts, is detailed in the following table:

For the year ended December 31, 2022

Notional

Notional value schedule

(M$)

Fair

value

Fair

2024

2028

Assets / (Liabilities)

value

2023

value

and beyond

2024

2025

2026

2027

and beyond

Fair value hedge

Swaps hedging bonds (assets)

–

1,000

–

Swaps hedging bonds (liabilities)

(260)

2,858

(1,015)

8,171

Total swaps hedging bonds - fair value hedge

(260)

3,858

(1,015)

8,171

2,087

1,630

202

820

3,432

Cash flow hedge

Swaps hedging bonds (assets)

250

813

11,782

Swaps hedging bonds (liabilities)

(2)

750

(2,731)

17,511

Total swaps hedging bonds - cash flow hedge

–

1,000

(1,918)

29,293

3,659

4,459

4,069

2,071

15,035

Forward exchange contracts related to operating activities (assets)

Forward exchange contracts related to operating activities (liabilities)

(19)

187

(19)

433

Total forward exchange contracts related to operating activities

(15)

257

(16)

524

–

Held for trading

Other interest rate swaps (assets)

154

14,955

447

7,470

Other interest rate swaps (liabilities)

(94)

13,236

(226)

4,128

Total other interest rate swaps

28,191

221

11,598

5,233

3,716

1,174

1,022

453

Currency swaps and forward exchange contracts (assets)

7,076

1,289

Currency swaps and forward exchange contracts (liabilities)

(110)

15,964

(57)

839

Total currency swaps and forward exchange contracts

(55)

23,040

(13)

2,128

391

1,737

–

Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.

For the year ended December 31, 2021

Notional

Notional value schedule

(M$)

Fair

value

Fair

2023

2027

Assets / (Liabilities)

value

2022

value

and beyond

2023

2024

2025

2026

and beyond

Fair value hedge

Swaps hedging bonds (assets)

566

415

9,659

Swaps hedging bonds (liabilities)

(316)

3,737

(102)

2,371

Total swaps hedging bonds - fair value hedge

(274)

4,303

313

12,030

3,858

2,087

1,630

202

4,253

Cash flow hedge

Swaps hedging bonds (assets)

–

372

7,149

Swaps hedging bonds (liabilities)

–

(1,396)

23,144

Total swaps hedging bonds - cash flow hedge

–

(1,024)

30,293

1,000

3,659

4,459

4,068

17,107

Forward exchange contracts related to operating activities (assets)

–

Forward exchange contracts related to operating activities (liabilities)

(8)

283

(14)

366

Total forward exchange contracts related to operating activities

(8)

319

(14)

366

171

195

–

Held for trading

Other interest rate swaps (assets)

20,876

5,170

Other interest rate swaps (liabilities)

(19)

6,470

(41)

2,561

Total other interest rate swaps

(6)

27,346

7,731

1,708

2,856

2,111

751

305

Currency swaps and forward exchange contracts (assets)

9,769

367

Currency swaps and forward exchange contracts (liabilities)

(37)

5,065

–

(16)

Total currency swaps and forward exchange contracts

14,834

351

265

–

Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.

For the year ended December 31, 2020

Notional

Notional value schedule

(M$)

Fair

value

Fair

2022

2026

Assets / (Liabilities)

value

2021

value

and beyond

2022

2023

2024

2025

and beyond

Fair value hedge

Swaps hedging bonds (assets)

1,250

1,365

12,642

Swaps hedging bonds (liabilities)

(104)

1,445

(142)

3,737

Total swaps hedging bonds - fair value hedge

(86)

2,695

1,223

16,379

4,350

3,858

2,087

1,630

4,454

Cash flow hedge

Swaps hedging bonds (assets)

–

1,856

16,259

Swaps hedging bonds (liabilities)

–

(1,473)

14,033

Total swaps hedging bonds - cash flow hedge

–

383

30,292

–

1,000

3,659

4,459

21,174

Forward exchange contracts related to operating activities (assets)

262

394

Forward exchange contracts related to operating activities (liabilities)

–

Total forward exchange contracts related to operating activities

262

394

276

118

–

Held for trading

Other interest rate swaps (assets)

22,011

3,214

Other interest rate swaps (liabilities)

(51)

7,693

(116)

3,695

Total other interest rate swaps

(41)

29,704

(32)

6,909

2,067

764

2,004

1,937

137

Currency swaps and forward exchange contracts (assets)

3,323

344

Currency swaps and forward exchange contracts (liabilities)

(48)

2,580

(2)

Total currency swaps and forward exchange contracts

(9)

5,903

398

189

145

–

Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.

D) Fair value hierarchy

Accounting principles

According to IFRS 13, fair values are estimated for the majority of TotalEnergies’ financial instruments, with the exception of publicly traded equity securities and marketable securities for which the market price is used.

Estimations of fair value, which are based on principles such as discounting future cash flows to present value, must be weighted by the fact that the value of a financial instrument at a given time may be influenced by the market environment (liquidity especially), and also the fact that subsequent changes in interest rates and exchange rates are not taken into account.

As a consequence, the use of different estimates, methodologies and assumptions could have a material effect on the estimated fair value amounts.

The methods used are as follows:

- Financial debts, swaps

The market value of swaps and of bonds that are hedged by those swaps has been determined on an individual basis by discounting future cash flows with the market curves existing at year-end.

- Other financial instruments

The fair value of interest rate swaps and of FRA’s (Forward Rate Agreements) is calculated by discounting future cash flows on the basis of market curves existing at year-end after adjustment for interest accrued but unpaid. Forward exchange contracts and currency swaps are valued on the basis of a comparison of the negotiated forward rates with the rates in effect on the financial markets at year-end for similar maturities.

Exchange options are valued based on models commonly used by the market.

The fair value hierarchy for financial instruments, excluding commodity contracts, is as follows:


	Quoted prices in
	active markets	Prices based	Prices based on
	for identical	on observable	non observable
As of December 31, 2022	assets	data	data
(M$)	(level 1)	(level 2)	(level 3)	Total
Fair value hedge instruments	–	(1,275)	–	(1,275)
Cash flow hedge instruments	–	(1,950)	–	(1,950)
Assets and liabilities held for trading	–	214	–	214
Equity instruments	33	–	–	33
TOTAL	33	(3,011)	–	(2,978)


	Quoted prices in
	active markets	Prices based	Prices based on
	for identical	on observable	non observable
As of December 31, 2021	assets	data	data
(M$)	(level 1)	(level 2)	(level 3)	Total
Fair value hedge instruments	–	39	–	39
Cash flow hedge instruments	–	(1,052)	–	(1,052)
Assets and liabilities held for trading	–	82	–	82
Equity instruments	501	–	–	501
TOTAL	501	(931)	–	(430)


	Quoted prices in
	active markets	Prices based	Prices based on
	for identical	on observable	non observable
As of December 31, 2020	assets	data	data
(M$)	(level 1)	(level 2)	(level 3)	Total
Fair value hedge instruments	–	1,137	–	1,137
Cash flow hedge instruments	–	408	–	408
Assets and liabilities held for trading	–	(68)	–	(68)
Equity instruments	706	–	–	706
TOTAL	706	1,477	–	2,183

15.3 FINANCIAL RISKS MANAGEMENT

Financial markets related risks

As part of its financing and cash management activities, TotalEnergies uses derivative instruments to manage its exposure to changes in interest rates and foreign exchange rates. These instruments are mainly interest rate and currency swaps. TotalEnergies may also occasionally use futures contracts and options. These operations and their accounting treatment are detailed in Notes 14, 15.1 and 15.2 to the Consolidated Financial Statements.

Risks relative to cash management operations and to interest rate and foreign exchange financial instruments are managed according to rules set by TotalEnergies' General Management, which provide for regular pooling of available cash balances, open positions and management of the financial instruments by the Treasury Department. Excess cash of TotalEnergies is deposited mainly in government institutions, deposit banks, or major companies through deposits, reverse repurchase agreements and purchase of commercial paper. Liquidity positions and the management of financial instruments are centralized by the Treasury Department, where they are managed by a team specialized in foreign exchange and interest rate market transactions.

The Cash Monitoring-Management Unit within the Treasury Department monitors limits and positions per bank on a daily basis and results of the Front Office. This unit also prepares marked-to-market valuations of used financial instruments and, when necessary, performs sensitivity analyses.

Counterparty risk

TotalEnergies has established standards for market transactions under which any banking counterparty must be approved in advance, based on an assessment of the counterparty’s financial solidity (multi-criteria analysis including notably a review of its Credit Default Swap (CDS) level, credit ratings from Standard & Poor’s and Moody’s, which must be of high standing, and general financial situation).

An overall credit limit is set for each authorised financial counterparty and is allocated amongst the affiliates and TotalEnergies' central treasury entities, according to TotalEnergies' financial needs.

To reduce the market valuation risk on its commitments, in particular relating to derivative instruments, the Treasury Department has entered into margin call agreements with its counterparties, in compliance with applicable regulations. Moreover, since December 21, 2018 any new interest rate hedging swap (excluding cross currency swaps) entered into by a TotalEnergies’ entity, and falling under the clearing obligation in accordance with EU regulations 648/2012 and 2019/834 on OTC derivatives, central counterparties and trade repositories (EMIR and EMIR Refit respectively), is now subject to central clearing.

Since September 1, 2021, Totalenergies applies the delegated Regulation (EU) No. 2016/2251 (supplementing Regulation (EU) No 648/2012), regarding initial margin calls on certain OTC derivative contracts not cleared by central counterparty.

Reform of benchmarks risk

The transition to IBOR indices did not have a significant impact on the financial instruments managed by the Treasury Department of TotalEnergies. The main LIBOR Dollar maturities such as the 3 month USD LIBOR will continue to be published until the end of June 2023 and will then be replaced by the SOFR. Furthermore, in Europe, the Eonia rate ceased to be published on January 3, 2022 and was replaced by the ESTR rate. TotalEnergies is proactively managing these regulatory changes.

Short-term interest rate exposure and cash

Cash balances, primarily composed of euros and dollars, are managed according to the guidelines established by TotalEnergies’ General Management (to maintain an adequate level of liquidity, optimize revenue from investments considering existing interest rate yield curves, and minimize the cost of borrowing) based on a daily interest rate benchmark, primarily through short-term interest rate swaps and short-term currency swaps.

Interest rate risk on non-current debt

TotalEnergies’ policy consists in incurring long-term debt at a floating or fixed rate, depending on TotalEnergies’ general corporate needs and the interest rate environment at the time of issuance, mainly in dollars or euros. Long-term interest rate and currency swaps may be entered into for the purpose of hedging bonds at the time of issuance, synthetically resulting in the incurrence of variable or fixed rate debt. In order to partially alter the interest rate exposure of its long-term indebtedness, TotalEnergies may also enter into long-term interest rate swaps on an ad-hoc basis.

Currency exposure

TotalEnergies generally seeks to minimize the currency exposure of each entity to its functional currency (primarily the dollar, the euro, the pound sterling and the Norwegian krone).

For currency exposure generated by commercial activity, the hedging of revenues and costs in foreign currencies is typically performed using currency operations on the spot market and, in some cases, on the forward market. TotalEnergies rarely hedges future cash flows, although it may use options to do so.

With respect to currency exposure linked to non-current assets, TotalEnergies has a hedging policy of financing these assets in their functional currency.

Net short-term currency exposure is periodically monitored against limits set by TotalEnergies’ General Management.

The non-current debt described in Note 15.1 to the Consolidated Financial Statements is generally raised by the corporate treasury entities either directly in dollars or in euros, or in other currencies which are then exchanged for dollars or euros through swap issuances to appropriately match general corporate needs. The proceeds from these debt issuances are loaned to affiliates whose accounts are kept in dollars or in euros. Thus, the net sensitivity of these positions to currency exposure is not significant.

TotalEnergies’ short-term currency swaps, the notional value of which appears in Note 15.2 to the Consolidated Financial Statements, are used to attempt to optimize the centralized cash management of TotalEnergies. Thus, the sensitivity to currency fluctuations which may be induced is likewise considered negligible.

Sensitivity analysis on interest rate and foreign exchange risk

The tables below present the potential impact of an increase or decrease of 10 basis points on the interest rate yield curves for each of the currencies on the fair value of the current financial instruments as of December 31, 2022, 2021 and 2020.


			Change in fair value due to a change in
			interest rate by
Assets / (Liabilities)	Carrying	Estimated	+ 10 basis	- 10 basis
(M$)	amount	fair value	points	points
As of December 31, 2022
Bonds (non-current portion, before swaps)	(32,184)	(30,391)	210	(210)
Swaps hedging bonds (liabilities)	(3,746)	(3,746)	–	–
Swaps hedging bonds (assets)	813	813	–	–
Total swaps hedging bonds (assets and liabilities)	(2,933)	(2,933)	(9)	9
Current portion of non-current debt after swaps (excluding lease obligations)	(5,328)	(5,344)	3	(3)
Other interest rates swaps	281	281	10	(10)
Currency swaps and forward exchange contracts	(68)	(68)	–	–
As of December 31, 2021
Bonds (non-current portion, before swaps)	(39,256)	(42,888)	349	(349)
Swaps hedging bonds (liabilities)	(1,498)	(1,498)	–	–
Swaps hedging bonds (assets)	787	787	–	–
Total swaps hedging bonds (assets and liabilities)	(711)	(711)	(34)	34
Current portion of non-current debt after swaps (excluding lease obligations)	(5,073)	(5,077)	5	(5)
Other interest rates swaps	31	31	16	(16)
Currency swaps and forward exchange contracts	45	45	–	–
As of December 31, 2020
Bonds (non-current portion, before swaps)	(46,239)	(52,246)	440	(440)
Swaps hedging bonds (liabilities)	(1,615)	(1,615)	–	–
Swaps hedging bonds (assets)	3,221	3,221	–	–
Total swaps hedging bonds (assets and liabilities)	1,606	1,606	(70)	70
Current portion of non-current debt after swaps (excluding lease obligations)	(4,674)	(4,696)	2	(2)
Other interest rates swaps	(73)	(73)	18	(18)
Currency swaps and forward exchange contracts	(6)	(6)	–	–

The impact of changes in interest rates on the cost of debt before tax is as follows:


For the year ended December 31,
(M$)	2022	2021	2020
Cost of net debt	(1,243)	(1,525)	(2,110)
Interest rate translation of :
+ 10 basis points	18	47	29
‑10 basis points	(18)	(47)	(29)

As a result of the policy for the management of currency exposure previously described, TotalEnergies' sensitivity to currency exposure is primarily influenced by the net equity of the subsidiaries whose functional currency is the euro and to a lesser extent, the pound sterling and the Norwegian krone.

This sensitivity is reflected in the historical evolution of the currency translation adjustment recorded in the statement of changes in consolidated shareholders’ equity which, over the course of the last three years, is essentially related to the fluctuation of the euro, the ruble and the pound sterling and is set forth in the table below:


	Dollar / Euro exchange	Dollar / Pound sterling	Dollar / Ruble exchange
	rates	exchange rates	rates
December 31, 2022	0.94	0.83	74.01
December 31, 2021	0.88	0.74	75.31
December 31, 2020	0.81	0.73	74.54

As of December 31, 2022

Pound

Other

(M$)

Total

Euro

Dollar

sterling

Ruble

currencies

Shareholders’ equity at historical exchange rate

124,560

15,835

88,902

6,258

13,520

Currency translation adjustment before net investment hedge

(12,831)

(7,170)

–

(2,463)

(30)

(3,168)

Net investment hedge – open instruments

(5)

(5)

–

Shareholders’ equity at exchange rate as of December 31, 2022

111,724

8,660

88,902

3,795

10,352

As of December 31, 2021

Pound

Other

(M$)

Total

Euro

Dollar

sterling

Ruble

currencies

Shareholders’ equity at historical exchange rate

124,407

24,617

70,030

6,064

10,596

13,100

Currency translation adjustment before net investment hedge

(12,666)

(4,239)

–

(1,902)

(4,281)

(2,244)

Net investment hedge – open instruments

(5)

(5)

–

Shareholders’ equity at exchange rate as of December 31, 2021

111,736

20,373

70,030

4,162

6,315

10,856


As of December 31, 2020				Pound		Other
(M$)	Total	Euro	Dollar	sterling	Ruble	currencies
Shareholders’ equity at historical exchange rate	113,958	28,893	60,613	4,494	9,913	10,045
Currency translation adjustment before net investment hedge	(10,279)	(2,448)	–	(1,726)	(4,253)	(1,852)
Net investment hedge – open instruments	23	23	–	–	–	–
Shareholders’ equity at exchange rate as of December 31, 2020	103,702	26,468	60,613	2,768	5,660	8,193

Based on the 2022 financial statements, a conversion using rates different from + or - 10% for each of the currencies below would have the following impact on shareholders equity and net income (TotalEnergies share):


As of December 31, 2022		Pound
(M$)	Euro	sterling	Ruble
Impact of an increase of 10% of exchange rates on :
– shareholders equity	866	380	2
– net income (TotalEnergies share)	(150)	275	(581)
Impact of a decrease of (10)% of exchange rates on :
– shareholders equity	(866)	(380)	(2)
– net income (TotalEnergies share)	150	(275)	581

Stock market risk

TotalEnergies holds interests in a number of publicly-traded companies (see Note 8 to the Consolidated Financial Statements). The market value of these holdings fluctuates due to various factors, including stock market trends, valuations of the sectors in which the companies operate, and the economic and financial condition of each individual company.

Liquidity risk

TotalEnergies SE has committed credit facilities granted by international banks allowing it to benefit from significant liquidity reserves.

As of December 31, 2022, these credit facilities amounted to $17,527 million and were entirely unutilized. The agreements underpinning credit facilities granted to TotalEnergies SE do not contain conditions related to TotalEnergies’ financial ratios, to its credit ratings from specialized agencies, or to the occurrence of events that could have a material adverse effect on its financial position.

As of December 31, 2022, the aggregated amount of the main committed credit facilities granted by international banks to the TotalEnergies’ companies, including TotalEnergies SE, was $18,963 million, of which $18,510 million were unutilized. In addition, the $8 billion undrawn credit line as of December 31, 2022, put in place in March 2022, has not been extended and will therefore end in March 2023.

Credit facilities granted to the TotalEnergies’ companies other than TotalEnergies SE are not intended to fund TotalEnergies’ general corporate purposes; they are intended to fund either general corporate purposes of the borrowing affiliate, or a specific project.

The following tables show the maturity of the financial assets and liabilities of TotalEnergies as of December 31, 2022, 2021 and 2020 (see Note 15.1 to the Consolidated Financial Statements).

As of December 31, 2022

Assets/(Liabilities)

Less than

More than

(M$)

one year

1-2 years

2-3 years

3-4 years

4-5 years

5 years

Total

Non-current financial debt (notional value excluding interests)

–

(6,719)

(4,527)

(3,356)

(3,503)

(25,856)

(43,961)

Non-current financial assets excluding derivative financial instruments

–

367

806

1,428

Current borrowings

(15,502)

–

(15,502)

Other current financial liabilities

(488)

–

(488)

Current financial assets

8,746

–

8,746

Assets and liabilities available for sale or exchange

–

Cash and cash equivalents

33,026

–

33,026

Net amount before financial expense

25,820

(6,352)

(4,442)

(3,271)

(3,418)

(25,050)

(16,713)

Financial expense on non-current financial debt

(662)

(583)

(515)

(449)

(416)

(4,611)

(7,236)

Interest differential on swaps

(431)

(312)

(264)

(272)

(221)

(761)

(2,261)

NET AMOUNT

24,727

(7,247)

(5,221)

(3,992)

(4,055)

(30,422)

(26,210)

As of December 31, 2021

Assets/(Liabilities)

Less than

More than

(M$)

one year

1-2 years

2-3 years

3-4 years

4-5 years

5 years

Total

Non-current financial debt (notional value excluding interests)

–

(6,073)

(6,328)

(4,420)

(3,314)

(28,495)

(48,630)

Non-current financial assets excluding derivative financial instruments

–

1,365

1,522

Current borrowings

(15,035)

–

(15,035)

Other current financial liabilities

(372)

–

(372)

Current financial assets

12,315

–

12,315

Assets and liabilities available for sale or exchange

–

Cash and cash equivalents

21,342

–

21,342

Net amount before financial expense

18,254

(6,032)

(6,287)

(4,382)

(3,277)

(27,130)

(28,854)

Financial expense on non-current financial debt

(821)

(786)

(664)

(576)

(506)

(5,197)

(8,550)

Interest differential on swaps

(217)

(235)

(232)

(229)

(221)

(836)

(1,970)

NET AMOUNT

17,216

(7,053)

(7,183)

(5,187)

(4,004)

(33,163)

(39,374)

As of December 31, 2020

Assets/(Liabilities)

Less than

More than

(M$)

one year

1-2 years

2-3 years

3-4 years

4-5 years

5 years

Total

Non-current financial debt (notional value excluding interests)

–

(9,849)

(5,762)

(5,990)

(4,321)

(30,951)

(56,873)

Non-current financial assets excluding derivative financial instruments

–

1,259

1,451

Current borrowings

(17,099)

–

(17,099)

Other current financial liabilities

(203)

–

(203)

Current financial assets

4,630

–

4,630

Assets and liabilities available for sale or exchange

(313)

–

(313)

Cash and cash equivalents

31,268

–

31,268

Net amount before financial expense

18,283

(9,790)

(5,720)

(5,945)

(4,275)

(29,692)

(37,139)

Financial expense on non-current financial debt

(930)

(888)

(825)

(696)

(603)

(5,833)

(9,775)

Interest differential on swaps

(163)

(149)

(158)

(173)

(196)

(930)

(1,769)

NET AMOUNT

17,190

(10,827)

(6,703)

(6,814)

(5,074)

(36,455)

(48,683)

The following table sets forth financial assets and liabilities related to operating activities as of December 31, 2022, 2021 and 2020 (see Note 14 of the Notes to the Consolidated Financial Statements).


As of December 31,
Assets/(Liabilities)
(M$)	2022	2021	2020
Accounts payable	(41,346)	(36,837)	(23,574)
Other operating liabilities	(35,186)	(27,294)	(14,302)
including derivative financial instruments related to commodity contracts (liabilities)	(18,774)	(16,166)	(3,666)
Accounts receivable, net	24,378	21,983	14,068
Other operating receivables	28,289	29,553	8,043
including derivative financial instruments related to commodity contracts (assets)	20,220	22,412	1,428
TOTAL	(23,865)	(12,595)	(15,765)

These financial assets and liabilities mainly have a maturity date below one year.

Credit risk

Credit risk is defined as the risk of the counterparty to a contract failing to perform or pay the amounts due.

TotalEnergies is exposed to credit risks in its operating and financing activities. TotalEnergies' maximum exposure to credit risk is partially related to financial assets recorded on its balance sheet, including energy derivative instruments that have a positive market value.

The following table presents TotalEnergies' maximum credit risk exposure:


As of December 31,
Assets/(Liabilities)
(M$)	2022	2021	2020
Loans to equity affiliates (note 8)	3,733	4,532	5,129
Loans and advances (note 6)	1,837	2,107	2,458
Other non-current financial assets related to operational activities (note 6)	250	312	287
Non-current financial assets (note 15.1)	2,731	2,404	4,781
Accounts receivable (note 5)	24,378	21,983	14,068
Other operating receivables (note 5)	28,289	29,553	8,043
Current financial assets (note 15.1)	8,746	12,315	4,630
Cash and cash equivalents (note 15.1)	33,026	21,342	31,268
TOTAL	102,990	94,548	70,664

The valuation allowance on accounts receivable, other operating receivables and on loans and advances is detailed in Notes 5 and 6 to the Consolidated Financial Statements.

As part of its credit risk management related to operating and financing activities, TotalEnergies has developed margining agreements with certain counterparties. As of December 31, 2022, the net margin call paid amounted to $2,857 million (against $7,299 million paid as of December 31, 2021 and $(1,556) million paid as of December 31, 2020).

TotalEnergies has established a number of programs for the sale of receivables, without recourse, with various banks, primarily to reduce its exposure to such receivables. As a result of these programs TotalEnergies retains no risk of payment default after the sale, but may continue to service the customer accounts as part of a service arrangement on behalf of the buyer and is required to pay to the buyer payments it receives from the customers relating to the receivables sold. As of December 31, 2022, the net value of receivables sold amounted to $8,681 million. TotalEnergies has substantially transferred all the risks and rewards related to receivables. No financial asset or liability remains recognized in the consolidated balance sheet after the date of sale.

Furthermore, in 2022, TotalEnergies conducted several operations of reverse factoring. The value of factored payables outstanding at year-end is $491 million.

Credit risk is managed by TotalEnergies' business segments as follows:

- Integrated Gas, Renewables & Power segment

Gas & Power activities

Trading of gas & power activities deal with counterparties in the energy, industrial and financial sectors throughout the world. Financial institutions providing credit risk coverage are highly rated international banks and insurance groups.

Potential counterparties are subject to credit assessment and approval before concluding transactions and are thereafter subject to regular review, including re-appraisal and approval of the limits previously granted.

The creditworthiness of counterparties is assessed based on an analysis of quantitative and qualitative data regarding financial standing and business risks, together with the review of any relevant third party and market information, such as data published by rating agencies. On this basis, credit limits are defined for each potential counterparty and, where appropriate, transactions are subject to specific authorizations.

Credit exposure, which is essentially an economic exposure or an expected future physical exposure, is permanently monitored and subject to sensitivity measures.

Credit risk is mitigated by the systematic use of industry standard contractual frameworks that permit netting, enable requiring added security in case of adverse change in the counterparty risk, and allow for termination of the contract upon occurrence of certain events of default.

About the professionals and retail gas and power sales activities, credit risk management policy is adapted to the type of customer either through the use of procedures of prepayments and appropriate collection, especially for mass customers or through credit insurances and sureties/guarantees obtaining. For the Professionals segment, the segregation of duties between the commercial and financial teams allows an “a priori” control of risks.

Other activities

Internal procedures include rules on credit risk management. Procedures to monitor customer risk are defined at the local level, especially for Saft Groupe and Greenflex (rules for the approval of credit limits, use of guarantees, monitoring and assessment of the receivables portfolio,...).

- Exploration & Production segment

Risks arising under contracts with government authorities or other oil companies or under long-term supply contracts necessary for the development of projects are evaluated during the project approval process. The long-term aspect of these contracts and the high-quality of the other parties lead to a low level of credit risk.

Risks related to commercial operations, other than those described above (which are, in practice, directly monitored by subsidiaries), are subject to procedures for establishing credit limits and reviewing outstanding balances.

- Refining & Chemicals segment

Refining & Chemicals activities

Credit risk is primarily related to commercial receivables. Internal procedures of Refining & Chemicals include rules for the management of credit describing the fundamentals of internal control in this domain. Each Business Unit implements the procedures of the activity for managing and provisioning credit risk according to the size of the subsidiary and the market in which it operates. The principal elements of these procedures are:

implementation of credit limits with different authorization schemes;

use of insurance policies or specific guarantees (letters of credit);

regular monitoring and assessment of overdue accounts (aging balance), including dunning procedures.

Counterparties are subject to credit assessment and approval prior to any transaction being concluded. Regular reviews are made for all active counterparties including a re-appraisal and renewing of the granted credit limits. The limits of the counterparties are assessed based on quantitative and qualitative data regarding financial standing, together with the review of any relevant third party and market information, such as that provided by rating agencies and insurance companies.

Trading & Shipping activities

Trading & Shipping deals with commercial counterparties and financial institutions located throughout the world. Counterparties to physical and derivative transactions are primarily entities involved in the oil and gas industry or in the trading of energy commodities, or financial institutions. Credit risk coverage is arranged with financial institutions, international banks and insurance groups selected in accordance with strict criteria.

The Trading & Shipping division applies a strict policy of internal delegation of authority in order to set up credit limits by country and counterparty and approval processes for specific transactions. Credit exposures contracted under these limits and approvals are monitored on a daily basis.

Potential counterparties are subject to credit assessment and approval prior to any transaction being concluded and all active counterparties are subject to regular reviews, including re-appraisal and approval of granted limits. The creditworthiness of counterparties is assessed based on an analysis of quantitative and qualitative data regarding financial standing and business risks, together with the review of any relevant third party and market information, such as ratings published by Standard & Poor’s, Moody’s Investors Service and other agencies.

Contractual arrangements are structured so as to maximize the risk mitigation benefits of netting between transactions wherever possible and additional protective terms providing for the provision of security in the event of financial deterioration and the termination of transactions on the occurrence of defined default events are used to the greatest permitted extent.

Credit risks in excess of approved levels are secured by means of letters of credit and other guarantees, cash deposits and insurance arrangements. In respect of derivative transactions, risks are secured by margin call contracts wherever possible.

- Marketing & Services segment

Internal procedures for the Marketing & Services division include rules on credit risk that describe the basis of internal control in this domain, including the segregation of duties between commercial and financial operations.

Credit policies are defined at the local level and procedures to monitor customer risk are implemented (credit committees at the subsidiary level, the creation of credit limits for corporate customers, etc.). Each entity also implements monitoring of its outstanding receivables. Risks related to credit may be mitigated or limited by subscription of credit insurance and/or requiring security or guarantees.