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Off balance sheet commitments and lease contracts
12 Months Ended
Dec. 31, 2019
Off balance sheet commitments and lease contracts  
Off balance sheet commitments and lease contracts

13) Off balance sheet commitments and lease contracts

13.1) Off balance sheet commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

Maturity and installments

As of December 31, 2019

 

 

 

Less than 1

 

Between 1

 

More than 5

(M$)

    

Total

    

year

    

and 5 years

    

years

Non-current debt obligations net of hedging instruments (Note 15)

 

40,931

 

 —

 

19,888

 

21,043

Current portion of non-current debt obligations net of hedging instruments (Note 15)

 

5,331

 

5,331

 

 —

 

 —

Lease obligations (Note 13.2)

 

7,465

 

1,202

 

2,883

 

3,380

Asset retirement obligations (Note 12)

 

14,492

 

617

 

3,153

 

10,722

Contractual obligations recorded in the balance sheet

 

68,219

 

7,150

 

25,924

 

35,145

Lease obligations for low value assets, short term contracts or not yet commenced (Note 13.2)

 

2,077

 

536

 

879

 

662

Purchase obligations

 

147,516

 

10,763

 

38,189

 

98,564

Contractual obligations not recorded in the balance sheet

 

149,593

 

11,299

 

39,068

 

99,226

Total of contractual obligations

 

217,812

 

18,449

 

64,992

 

134,371

 

 

 

 

 

 

 

 

 

Guarantees given for excise taxes

 

2,012

 

1,876

 

17

 

119

Guarantees given against borrowings

 

14,510

 

306

 

7,372

 

6,832

Indemnities related to sales of businesses

 

331

 

163

 

16

 

152

Guarantees of current liabilities

 

172

 

79

 

60

 

33

Guarantees to customers / suppliers

 

12,318

 

1,435

 

2,169

 

8,714

Letters of credit

 

2,786

 

2,768

 

18

 

 —

Other operating commitments

 

22,055

 

3,240

 

1,202

 

17,613

Total of other commitments given

 

54,184

 

9,867

 

10,854

 

33,463

 

 

 

 

 

 

 

 

 

Mortgages and liens received

 

85

 

23

 

37

 

25

Sales obligations

 

93,441

 

7,135

 

31,330

 

54,976

Other commitments received

 

22,358

 

16,845

 

1,705

 

3,808

Total of commitments received

 

115,884

 

24,003

 

33,072

 

58,809

 

 

 

 

 

 

 

 

 

Of which commitments given relating to joint ventures

 

39,055

 

461

 

11,822

 

26,772

Of which commitments given relating to associates

 

31,465

 

913

 

8,381

 

22,171

 

 

 

 

 

 

 

 

 

 

 

 

Maturity and installments

As of December 31, 2018

 

 

 

Less than 1

 

Between 1

 

More than 5

(M$)

    

Total

    

year

    

and 5 years

    

years

Non-current debt obligations net of hedging instruments (Note 15)

 

37,784

 

 —

 

19,072

 

18,712

Current portion of non-current debt obligations net of hedging instruments (Note 15)

 

5,027

 

5,027

 

 —

 

 —

Finance lease obligations (Note 13.2)

 

1,878

 

213

 

468

 

1,197

Asset retirement obligations (Note 12)

 

14,286

 

844

 

3,388

 

10,054

Contractual obligations recorded in the balance sheet

 

58,975

 

6,084

 

22,928

 

29,963

Operating lease obligations (Note 13.2)

 

9,130

 

1,644

 

3,690

 

3,796

Purchase obligations

 

121,119

 

9,708

 

30,652

 

80,759

Contractual obligations not recorded in the balance sheet

 

130,249

 

11,352

 

34,343

 

84,554

Total of contractual obligations

 

189,224

 

17,436

 

57,271

 

114,517

 

 

 

 

 

 

 

 

 

Guarantees given for excise taxes

 

2,043

 

1,904

 

12

 

127

Guarantees given against borrowings

 

18,680

 

169

 

68

 

18,443

Indemnities related to sales of businesses

 

334

 

165

 

10

 

159

Guarantees of current liabilities

 

222

 

83

 

74

 

65

Guarantees to customers / suppliers

 

8,463

 

1,222

 

847

 

6,394

Letters of credit

 

3,515

 

3,164

 

160

 

191

Other operating commitments

 

29,416

 

2,085

 

1,046

 

26,285

Total of other commitments given

 

62,673

 

8,792

 

2,217

 

51,664

 

 

 

 

 

 

 

 

 

Mortgages and liens received

 

84

 

23

 

33

 

28

Sales obligations

 

91,695

 

7,989

 

27,709

 

55,997

Other commitments received

 

21,565

 

15,527

 

1,328

 

4,710

Total of commitments received

 

113,344

 

23,539

 

29,070

 

60,735

 

 

 

 

 

 

 

 

 

Of which commitments given relating to joint ventures

 

42,768

 

162

 

4,425

 

38,181

Of which commitments given relating to associates

 

39,437

 

773

 

8,378

 

30,286

 

 

 

 

 

 

 

 

 

 

 

 

Maturity and installments

As of December 31, 2017

 

 

 

Less than 1

 

Between 1

 

More than 5

(M$)

    

Total

    

year

    

and 5 years

    

years

Non-current debt obligations net of hedging instruments (Note 15)

 

39,544

 

 —

 

19,540

 

20,004

Current portion of non-current debt obligations net of hedging instruments (Note 15)

 

4,646

 

4,646

 

 —

 

 —

Finance lease obligations (Note 13.2)

 

1,156

 

39

 

261

 

856

Asset retirement obligations (Note 12)

 

12,240

 

485

 

2,165

 

9,590

Contractual obligations recorded in the balance sheet

 

57,586

 

5,170

 

21,966

 

30,450

Operating lease obligations (Note 13.2)

 

6,441

 

1,401

 

2,887

 

2,153

Purchase obligations

 

86,366

 

8,605

 

23,917

 

53,844

Contractual obligations not recorded in the balance sheet

 

92,807

 

10,006

 

26,803

 

55,998

Total of contractual obligations

 

150,393

 

15,176

 

48,769

 

86,448

 

 

 

 

 

 

 

 

 

Guarantees given for excise taxes

 

2,073

 

1,938

 

29

 

106

Guarantees given against borrowings

 

16,080

 

411

 

10,607

 

5,062

Indemnities related to sales of businesses

 

341

 

120

 

61

 

160

Guarantees of current liabilities

 

321

 

91

 

109

 

121

Guarantees to customers / suppliers

 

4,180

 

1,100

 

268

 

2,812

Letters of credit

 

2,965

 

2,680

 

102

 

183

Other operating commitments

 

17,431

 

1,165

 

637

 

15,629

Total of other commitments given

 

43,391

 

7,505

 

11,813

 

24,073

 

 

 

 

 

 

 

 

 

Mortgages and liens received

 

89

 

23

 

26

 

40

Sales obligations

 

67,014

 

6,263

 

21,513

 

39,238

Other commitments received

 

7,398

 

3,549

 

1,111

 

2,738

Total of commitments received

 

74,501

 

9,835

 

22,650

 

42,016

 

 

 

 

 

 

 

 

 

Of which commitments given relating to joint ventures

 

36,847

 

160

 

12,225

 

24,462

Of which commitments given relating to associates

 

20,629

 

580

 

5,991

 

14,058

 

A.

Contractual obligations

Debt obligations

“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 $6,263 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 $1,202 million.

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

Lease contracts

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

Asset retirement obligations

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

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.

B.Other commitments given

Guarantees given for excise taxes

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.

Guarantees given against borrowings

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, 2019, the maturities of these guarantees are up to 2043.

As of December 31, 2019, the guarantees provided by TOTAL S.A. in connection with the financing of the Ichthys LNG project amount to $4,937 million. As of December 31, 2018, the guarantees amounted to $9,425 million. 

As of December 31, 2019, the guarantees provided by TOTAL S.A. in connection with the financing of the Yamal LNG project for an amount of $3,688 million by TOTAL S.A. As of December 31, 2018, the guarantees amounted to $3,875 million.

As of December 31, 2019, TOTAL S.A. has confirmed guarantees for TOTAL Refining SAUDI ARABIA SAS shareholders' advances for an amount of $1,184 million. As of December 31, 2018, the guarantees amounted to $1,462 million.  

As of December 31, 2019, the guarantee given in 2008 by TOTAL S.A. in connection with the financing of the Yemen LNG project amounts to $509 million. As of December 31, 2018, the guarantee amounted to $551 million.

As of December 31, 2019, guarantees provided by TOTAL S.A. in connection with the financing of the Bayport Polymers LLC project, amount to $1,820 million as in 2018.

Indemnities related to sales of businesses

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, dealer, supplier, and other 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.

Other guarantees given

Non-consolidated subsidiaries

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.

Operating agreements

As part of normal ongoing business operations and consistent with generally accepted and recognized 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.

C.Commitments received

Sales obligations

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

13.2) Lease contracts

 

 

 

 

Accounting principles

A lease contract is a contract that grants lessee the right to use an identified asset for a specified period of time. At lease inception, an asset corresponding to right of use and a debt are recognized in the lessee’s balance sheet. Carrying value of right of use corresponds to present value of future lease payments plus any direct costs incurred for concluding the contract. Lease debt is recorded as a liability in the balance sheet under financial debts. Rights of use are depreciated over the useful lives applied by the Group.

Leases that are of short duration or that relate to low value assets are not recorded in the balance sheet, in accordance with the exemptions in the standard. They are presented as off-balance sheet commitments.

 

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

Note 1 explains the impacts of the first-time application of IFRS 16 as at 1 January 2019.

Reconciliation between the operating lease commitments disclosed under IAS 17 at December 31, 2018 and the additional lease liabilities 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

 

(628)

Variable lease payments

 

(6)

Other impacts

 

204

Impact of discounting

 

(1,360)

Additional lease liability

 

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.

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

 

 

 

 

 

 

For the year ended December 31, 2019

    

Leases not recorded in

    

Leases recorded in

(M$)

 

balance sheet

 

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, 2017

    

 

 

 

(M$)

 

Operating leases

    

Finance leases

2018

 

1,401

 

76

2019

 

988

 

67

2020

 

814

 

67

2021

 

623

 

65

2022

 

462

 

65

2023 and beyond

 

2,153

 

864

Total minimum payments

 

6,441

 

1,204

Less financial expenses

 

  

 

(48)

Nominal value of contracts

 

  

 

1,156

Less current portion of finance lease contracts

 

  

 

(39)

Non-current finance lease liabilities

 

  

 

1,117

 

For the year ended December 31, 2019, net 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.

 

Net rental expense recorded in the income statement and incurred under operating leases for the year ended December 31, 2018 is $1,304 million (against $1,467 million in 2017).