8) Equity affiliates, other investments and related parties

8.1) Equity affiliates: investments and loans

Accounting principles

Under the equity method, the investment in the associate or joint venture is initially recognized at acquisition cost and subsequently adjusted to recognize the Group’s share of the net income and other comprehensive income of the associate or joint venture.

Unrealized gains on transactions between the Group and its equity-accounted entities are eliminated to the extent of the Group’s interest in the equity accounted entity.

In equity affiliates, goodwill is included in investment book value.

In cases where the group holds less than 20% of the voting rights in another entity, the determination of whether the Group exercises significant influence is also based on other facts and circumstances: representation on the board of directors or an equivalent governing body of the entity, participation in policy-making processes, including participation in decisions relating to dividends or other distributions, significant transactions between the investor and the entity, exchange of management personnel, or provision of essential technical information.

The contribution of equity affiliates in the consolidated balance sheet, consolidated statement of income and consolidated statement of comprehensive income is presented below:


Equity value
As of December 31,
(M$)	2019	2018	2017
Total Associates	17,026	13,330	12,177
Total Joint ventures	6,097	5,359	4,791
Total	23,123	18,689	16,968
Loans	3,999	4,755	5,135
Total	27,122	23,444	22,103


Profit/(loss)
As of December 31,
(M$)	2019	2018	2017
Total Associates	2,534	2,329	1,694
Total Joint ventures	872	841	321
Total	3,406	3,170	2,015


Other comprehensive income
As of December 31,
(M$)	2019	2018	2017
Total Associates	592	(461)	(801)
Total Joint ventures	(184)	(79)	124
Total	408	(540)	(677)

A) Information related to associates

Information (100% gross) related to significant associates is as follows:


	Novatek(a)						Liquefaction entities			PetroCedeño
(M$)	2019		2018		2017		2019	2018	2017	2019		2018		2017
Non current assets	24,081		14,639		14,232		30,578	28,664	29,656	3,994		4,324		5,551
Current assets	6,898		4,545		3,404		9,994	9,358	7,875	7,457		5,580		4,291
Total Assets	30,979		19,184		17,636		40,572	38,022	37,531	11,451		9,904		9,842

Shareholder’s equity	24,884		14,163		12,842		23,640	22,615	22,804	4,548		4,581		5,178
Non current liabilities	3,727		3,086		3,187		11,445	9,826	10,291	76		20		13
Current liabilities	2,368		1,935		1,607		5,487	5,581	4,436	6,827		5,303		4,651
Total Liabilities	30,979		19,184		17,636		40,572	38,022	37,531	11,451		9,904		9,842

Revenue from sales	13,227		13,415		10,022		22,684	25,644	20,401	356		1,629		1,708
Net income	8,260		4,636		1,950		5,692	7,408	5,781	(33)		122		204
Other comprehensive income	1,807		(2,545)		580		—	—	—	—		—		—

% owned	19.40	%	19.40	%	18.90	%				30.32	%	30.32	%	30.32	%
Revaluation identifiable assets on equity affiliates	1,641		1,556		1,804		1,714	44	6	—		—		—
Equity value	6,469		4,303		4,231		5,493	3,758	3,768	1,379		1,389		1,570
Profit/(loss)	1,508		794		263		637	874	735	(10)		37		62
Share of Other Comprehensive Income, net amount	634		(540)		(491)		23	49	(194)	—		—		—
Dividends paid to the Group	266		151		128		752	816	672	—		218		164

(a)

Information includes the best Group’s estimates of results at the date of TOTAL's financial statements.

Novatek, listed in Moscow and London, is the 2nd largest producer of natural gas in Russia. The Group share of Novatek’s market value amounted to $11,938 million as at December 31, 2019. Novatek is consolidated by the equity method. TOTAL, in fact, exercises significant influence particularly via its representation on the Board of Directors of Novatek and its interest in Yamal LNG and the project Arctic LNG 2.

The Group is not aware of significant restrictions limiting the ability of OAO Novatek to transfer funds to its shareholder, be it under the form of dividends, repayment of advances or loans made.

The Group’s interests in associates operating liquefaction plants are combined. The amounts include investments in: Nigeria LNG (15.00%), Angola LNG (13.60%), Yemen LNG (39.62%), Qatar Liquefied Gas Company Limited (Qatargas) (10.00%), Qatar Liquefied Gas Company Limited II (16.70%), Oman LNG (5.54%), and Abu Dhabi Gas Liquefaction Company Limited (5.00%), Arctic LNG 2 (10.00)%.

PetroCedeño produces and upgrades extra-heavy crude oil in Venezuela.


	Saudi Aramco Total
	Refining & Petrochemicals						Qatar
(M$)	2019		2018		2017		2019	2018	2017
Non current assets	10,976		11,281		11,601		4,160	3,968	4,405
Current assets	1,793		2,069		2,021		1,571	1,741	1,696
Total Assets	12,769		13,350		13,622		5,731	5,709	6,101

Shareholder’s equity	2,113		2,412		2,424		2,676	2,748	3,200
Non current liabilities	8,098		8,398		9,029		2,150	1,914	1,895
Current liabilities	2,558		2,540		2,169		905	1,047	1,006
Total Liabilities	12,769		13,350		13,622		5,731	5,709	6,101

Revenue from sales	10,522		11,886		9,049		8,225	9,929	7,388
Net income	(171)		122		222		42	409	490
Other comprehensive income	(124)		16		20		111	(21)	80

% owned	37.50	%	37.50	%	37.50	%
Revaluation identifiable assets on equity affiliates	—		—		—		—	—	—
Equity value	792		905		909		706	740	814
Profit/(loss)	(64)		46		83		91	198	190
Share of Other Comprehensive Income, net amount	(33)		40		(82)		14	6	(12)
Dividends paid to the Group	—		56		45		159	271	201

Saudi Aramco Total Refining & Petrochemicals is an entity including a refinery in Jubail, Saudi Arabia, with a capacity of 440,000 barrels/day with integrated petrochemical units.

The Group’s interests in associates of the Refining & Chemicals segment, operating steam crackers and polyethylene lines in Qatar have been combined: Qatar Petrochemical Company Ltd. (20.00%), Qatofin (49.09%), Laffan Refinery (10.00%) and Laffan Refinery II (10.00%).

B) Information related to joint ventures

The information (100% gross) related to significant joint ventures is as follows:


	Liquefaction entities			Hanwha Total Petrochemicals
(M$)	2019	2018	2017	2019		2018		2017
Non current assets	70,279	68,003	59,422	4,310		4,017		3,989
Current assets excluding cash and cash equivalents	1,866	1,928	966	1,842		2,180		2,258
Cash and cash equivalents	1,678	339	1,258	322		237		283
Total Assets	73,823	70,270	61,646	6,474		6,434		6,530

Shareholder’s equity	7,151	7,059	4,037	3,319		3,534		3,612
Other non current liabilities	6,864	3,472	504	150		157		148
Non current financial debts	56,379	56,841	55,566	1,761		1,418		1,078
Other current liabilities	3,429	2,898	1,539	756		725		1,144
Current financial debts	—	—	—	488		600		548
Total Liabilities	73,823	70,270	61,646	6,474		6,434		6,530

Revenue from sales	9,240	2,908	37	8,437		10,191		8,565
Depreciation and depletion of tangible assets and mineral interests	(3,040)	(1,227)	(10)	(256)		(269)		(264)
Interest income	5	119	16	—		9		—
Interest expense	(2,993)	(670)	(15)	(14)		(5)		(3)
Income taxes	(270)	(386)	338	(124)		(310)		(369)

Net income	383	2,029	(1,730)	302		754		973
Other comprehensive income	(429)	132	97	(116)		(169)		398

% owned				50.00	%	50.00	%	50.00	%
Revaluation identifiable assets on equity affiliates	660	683	905	—		—		—
Equity value	2,318	2,404	2,049	1,660		1,767		1,806
Profit/(loss)	(19)	192	(348)	150		377		486
Share of Other Comprehensive Income, net amount	(112)	40	29	(68)		(67)		170
Dividends paid to the Group	—	—	—	200		332		353

The Group’s interests in joint ventures operating liquefaction plants have been combined. The amounts include investments in Yamal LNG in Russia (20.02% direct holding) and Ichthys LNG in Australia (26.00%).

Hanwha Total Petrochemicals is a South Korean company that operates a petrochemical complex in Daesan (condensate separator, steam cracker, styrene, paraxylene, polyolefins).

Off balance sheet commitments relating to joint ventures are disclosed in Note 13 of the Consolidated Financial Statements.

C) Other equity consolidated affiliates

In Group share, the main aggregated financial items in equity consolidated affiliates including assets held for sale, which have not been presented individually are as follows:


	2019		2018		2017
As of December 31,		Joint		Joint		Joint
(M$)	Associates	ventures	Associates	ventures	Associates	ventures
Non Current assets	5,435	4,287	4,512	2,487	2,908	2,428
Current assets	1,357	1,276	1,263	752	1,156	1,150
Total Assets	6,792	5,563	5,775	3,239	4,064	3,578

Shareholder’s equity	1,405	1,437	1,438	1,108	885	1,102
Non current liabilities	4,412	3,091	3,254	1,585	2,171	1,281
Current liabilities	975	1,035	1,083	546	1,008	1,195
Total Liabilities	6,792	5,563	5,775	3,239	4,064	3,578


	2019		2018		2017
For the year ended December 31,		Joint		Joint		Joint
(M$)	Associates	ventures	Associates	ventures	Associates	ventures
Revenues from sales	2,190	3,535	2,542	11,914	2,226	4,358
Net income	383	288	380	281	361	183
Share of other comprehensive income items	(46)	(4)	(16)	(52)	(22)	(75)
Equity value	2,187	2,119	2,235	1,188	885	936
Profit/(Loss)	372	741	380	272	361	183
Dividends paid to the Group	362	50	416	49	328	147

8.2) Other investments

Accounting policies

Other investments are equity instruments and are measured according to IFRS 9 at fair value through profit and loss (default option). On initial recognition, the standard allows to make an election and record the changes of fair value in other comprehensive income. For these securities, only dividends can be recognized in profit or loss.

The Group recognizes changes in fair value in equity or in profit or loss according to the option chosen on an instrument by instrument basis.

For securities traded in active markets, this fair value is equal to the market price.

Securities whose fair value is not reliably determinable, are recorded at their acquisition value.

For years prior to the application of IFRS 9, equity instruments were classified as available for sale financial assets and measured at fair value.

For securities traded in active markets, this fair value was equal to the market price. Changes in fair value were recorded in other comprehensive income. If there was any evidence of a significant or long-lasting impairment loss, a loss was recorded in the statement of income. This impairment was irreversible.

For other securities, if the fair value was not reliably determinable, the securities were recorded at their historical value.


As of December 31, 2019	As of			As of
(M$)	January 1,	Increase -	Change in	December 31,
	2019	Decrease	fair value	2019
Enphase Energy Inc	36	(5)	142	173
Tellurian Investments Inc.	207	—	—	207
Other shares through fair value OCI (unit value < $50M)	119	7	—	126
Equity instruments recorded through fair value OCI	362	2	142	506
BBPP	62	—	—	62
BTC Limited	50	—	(22)	28
Tas Helat Marketing Company (a)	—	108	—	108
Total Lubrificantes do Brasil(b)	111	(111)	—	—
Other shares through fair value P&L (unit value < $50M)	836	238	—	1,074
Equity instruments recorded through fair value P&L	1,059	235	(22)	1,272
Total equity instruments	1,421	237	120	1,778

(a)

Tas Helat Marketing Company is a joint venture with SAUDI ARAMCO to develop the retail business. It will be consolidated in 2020 (using the equity method).

(b)

Total Lubrificantes do Brasil was consolidated in 2019.


As of December 31, 2018	As of			As of
(M$)	January 1,	Increase -	Change in	December 31,
	2018	Decrease	fair value	2018
Tellurian Investments Inc.	207	—	—	207
Other shares through fair value OCI (unit value < $50M)	77	80	(2)	155
Equity instruments recorded through fair value OCI	284	80	(2)	362
BBPP	62	—	—	62
BTC Limited	55	—	(5)	50
DUNKERQUE LNG SAS	144	(217)	73	—
Total Lubrificantes do Brasil(a)	—	111	—	111
Other shares through fair value P&L (unit value < $50M)	1,182	(346)	—	836
Equity instruments recorded through fair value P&L	1,443	(452)	68	1,059
Total equity instruments	1,727	(372)	66	1,421

(a)

Total Lubrificantes do Brasil will be consolidated in 2019.


As of December 31, 2017	Historical	Unrealized gain	Balance
(M$)	value	(loss)	sheet value
Other equity securities publicly traded in active markets	8	42	50
Total equity securities publicly traded in active markets(a)	8	42	50
BBPP	62	—	62
BTC Limited	55	—	55
DUNKERQUE LNG SAS	144	—	144
Tellurian Investments Inc.	207	—	207
Total Eren Holding SA(b)	285	—	285
Greenflex(b)	76	—	76
Other equity securities (unit value < $50 million)	848	—	848
Total other equity securities (a)	1,677	—	1,677
Other investments	1,685	42	1,727

(a)

Including cumulative impairments of $2,029 million in 2017.

(b)

Acquisitions made in the fourth quarter 2017 and consolidated in 2018

8.3) Related parties

The main transactions and receivable and payable balances with related parties (principally non-consolidated subsidiaries and equity consolidated affiliates) are detailed as follows:


As of December 31,
(M$)	2019	2018	2017
Balance sheet
Receivables
Debtors and other debtors	486	496	492
Loans (excl. loans to equity affiliates)	42	57	63
Payables
Creditors and other creditors	968	888	1,161
Debts	2	2	2


For the year ended December 31,
(M$)	2019	2018	2017
Statement of income
Sales	4,127	4,192	3,407
Purchases	(10,158)	(9,253)	(7,354)
Financial income	4	2	6
Financial expense	(4)	(5)	(9)

8.4) Compensation for the administration and management bodies

The aggregate amount of direct and indirect compensation accounted by the French and foreign affiliates of the Company, for all executive officers of TOTAL as of December 31, 2019 and for the members of the Board of Directors who are employees of the Group, is detailed below.

As of December 31, 2019, the main Group executive officers include the members of the Executive Committee and the four directors of the corporate functions members of the Group Performance Management Committee (Communication, Legal, Health, Safety and Environment, Investor relations), and the Group Treasurer.


For the year ended December 31,
(M$)	2019	2018	2017
Number of people	15	15	15
Direct or indirect compensation	15.0	17.7	15.6
Pension expenses (a)	(4.9)	2.5	10.8
Share-based payments expense (IFRS 2) (b)	8.7	12.6	6.5

(a)

The benefits provided for executive officers of the Group and the members of the Board of Directors, who are employees of the Group, include severance to be paid upon retirement, supplementary pension schemes and insurance plans, which represent $113.3 million provisioned as of December 31, 2019 (against $117.0 million as of December 31, 2018 and $119.7 million as of December 31, 2017).

The negative pension expense in 2019 is related to the application of the "ordonnance 2019-697" impacting the supplementary defined benefit pension plan which benefit the employees of TOTAL S.A. whose reference salary exceeded on 4 July 2019 an amount equal to 8 times the annual ceiling for calculating French Social Security contributions (PASS). This "ordonnance" involves a freeze of the years of service of beneficiaries as of 31/12/2019, which generates a reversal of provision established priorly.

(b)

Share-based payments expense computed for the executive officers and the members of the Board of Directors who are employees of the Group and based on the principles of IFRS 2 “Share-based payments” described in Note 9. The grant rate of the 2016 plan has been revised downwards, the level of achievement of the performance conditions having been lower than the estimates used in the previous year.

The compensation allocated to members of the board of directors for directors’ fees totaled €1.4 million ($1.57 million) in 2019, €1.4 million ($1.65 million) in 2018 and €1.28 million ($1.44 million) in 2017.