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$)	2018	2017	2016
Total Associates	13,330	12,177	11,819
Total Joint ventures	5,359	4,791	4,039
Total	18,689	16,968	15,858
Loans	4,755	5,135	4,718
Total	23,444	22,103	20,576


Profit/(loss)
As of December 31,
(M$)	2018	2017	2016
Total Associates	2,329	1,694	1,530
Total Joint ventures	841	321	684
Total	3,170	2,015	2,214


Other comprehensive income
As of December 31,
(M$)	2018	2017	2016
Total Associates	(461)	(801)	847
Total Joint ventures	(79)	124	88
Total	(540)	(677)	935

A) Information related to associates

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


Exploration & Production	Novatek(a)						Liquefaction entities			PetroCedeño
(M$)	2018		2017		2016		2018	2017	2016	2018		2017		2016
Non current assets	14,639		14,232		13,981		28,664	29,656	31,044	4,324		5,551		5,515
Current assets	4,545		3,404		2,409		9,358	7,875	5,790	5,580		4,291		4,166
Total Assets	19,184		17,636		16,390		38,022	37,531	36,834	9,904		9,842		9,681

Shareholder’s equity	14,163		12,842		11,015		22,615	22,804	22,886	4,581		5,178		5,515
Non current liabilities	3,086		3,187		3,574		9,826	10,291	10,839	20		13		10
Current liabilities	1,935		1,607		1,801		5,581	4,436	3,109	5,303		4,651		4,156
Total Liabilities	19,184		17,636		16,390		38,022	37,531	36,834	9,904		9,842		9,681

Revenue from sales	13,415		10,022		7,779		25,644	20,401	15,557	1,629		1,708		1,398
Net income	4,636		1,950		3,137		7,408	5,781	1,472	122		204		277
Other comprehensive income	(2,545)		580		1,651		—	—	—	—		—		—

% owned	19.40	%	18.90	%	18.90	%				30.32	%	30.32	%	30.32	%
Revaluation identifiable assets on equity affiliates	1,556		1,804		1,811		44	6	—	—		—		—
Equity value	4,303		4,231		3,893		3,758	3,768	3,755	1,389		1,570		1,672
Profit/(loss)	794		263		494		874	735	147	37		62		84
Share of Other Comprehensive Income, net amount	(540)		(491)		808		49	(194)	23	—		—		—
Dividends paid to the Group	151		128		111		816	672	479	218		164		91

(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 $9,578 million as at December 31, 2018. Novatek is consolidated by the equity method. TOTAL considers, in fact, that it exercises significant influence particularly via its representation on the board of directors of Novatek and its interest in the major project of Yamal LNG.

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%).

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


	Saudi Aramco Total
Refining & Chemicals	Refining & Petrochemicals						Qatar
(M$)	2018		2017		2016		2018	2017	2016
Non current assets	11,281		11,601		12,056		3,968	4,405	4,152
Current assets	2,069		2,021		1,531		1,741	1,696	1,404
Total Assets	13,350		13,622		13,587		5,709	6,101	5,556

Shareholder’s equity	2,412		2,424		2,302		2,748	3,200	3,393
Non current liabilities	8,398		9,029		9,466		1,914	1,895	1,349
Current liabilities	2,540		2,169		1,819		1,047	1,006	814
Total Liabilities	13,350		13,622		13,587		5,709	6,101	5,556

Revenue from sales	11,886		9,049		7,134		9,929	7,388	4,665
Net income	122		222		289		409	490	615
Other comprehensive income	16		20		2		(21)	80	(11)

% owned	37.50	%	37.50	%	37.50	%
Revaluation identifiable assets on equity affiliates	—		—		—		—	—	—
Equity value	905		909		863		740	814	832
Profit/(loss)	46		83		108		198	190	211
Share of Other Comprehensive Income, net amount	40		(82)		22		6	(12)	6
Dividends paid to the Group	56		45		—		271	201	292

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
	(Exploration & Production)			(Refining & Chemicals)
(M$)	2018	2017	2016	2018		2017		2016
Non current assets	68,003	59,422	47,014	4,017		3,989		3,454
Current assets excluding cash and cash equivalents	1,928	966	922	2,180		2,258		1,506
Cash and cash equivalents	339	1,258	703	237		283		473
Total Assets	70,270	61,646	48,639	6,434		6,530		5,433

Shareholder’s equity	7,059	4,037	2,961	3,534		3,612		2,947
Other non current liabilities	3,472	504	327	157		148		120
Non current financial debts	56,841	55,566	43,980	1,418		1,078		1,105
Other current liabilities	2,898	1,539	1,371	725		1,144		764
Current financial debts	—	—	—	600		548		497
Total Liabilities	70,270	61,646	48,639	6,434		6,530		5,433

Revenue from sales	2,908	37	52	10,191		8,565		7,057
Depreciation and depletion of tangible assets and mineral interests	(1,227)	(10)	(12)	(269)		(264)		(259)
Interest income	119	16	5	9		—		—
Interest expense	(670)	(15)	(7)	(5)		(3)		(3)
Income taxes	(386)	338	(29)	(310)		(369)		(338)

Net income	2,029	(1,730)	449	754		973		930
Other comprehensive income	132	97	166	(169)		398		(79)

% owned				50.00	%	50.00	%	50.00	%
Revaluation identifiable assets on equity affiliates	683	905	905	—		—		—
Equity value	2,404	2,049	1,555	1,767		1,806		1,474
Profit/(loss)	192	(348)	88	377		486		465
Share of Other Comprehensive Income, net amount	40	29	50	(67)		170		22
Dividends paid to the Group	—	—	—	332		353		256

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 (30.00%).

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:


	2018		2017		2016
As of December 31,		Joint		Joint		Joint
(M$)	Associates	ventures	Associates	ventures	Associates	ventures
Non Current assets	4,512	2,487	2,908	2,428	3,047	1,971
Current assets	1,263	752	1,156	1,150	1,365	825
Total Assets	5,775	3,239	4,064	3,578	4,412	2,796

Shareholder’s equity	1,438	1,108	885	1,102	804	1,010
Non current liabilities	3,254	1,585	2,171	1,281	2,369	985
Current liabilities	1,083	546	1,008	1,195	1,239	801
Total Liabilities	5,775	3,239	4,064	3,578	4,412	2,796


	2018		2017		2016
For the year ended December 31,		Joint		Joint		Joint
(M$)	Associates	ventures	Associates	ventures	Associates	ventures
Revenues from sales	2,542	11,914	2,226	4,358	2,603	3,181
Net income	380	281	361	183	486	131
Share of other comprehensive income items	(16)	(52)	(22)	(75)	(12)	16
Equity value	2,235	1,188	885	936	804	1,010
Profit/(Loss)	380	272	361	183	486	131
Dividends paid to the Group	416	49	328	147	308	30

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.

For other shares, if the fair value is not reliably determinable, they 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.


For the year 2018,	As of	Increase -	Change in	As of
(M$)	January 1,	Decrease	fair value	December 31,
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*	—	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

*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


As of December 31, 2016	Historical	Unrealized gain	Balance
(M$)	value	(loss)	sheet value
Areva	17	—	17
Other equity securities publicly traded in active markets	8	29	37
Total equity securities publicly traded in active markets(a)	25	29	54
BBPP	62	—	62
BTC Limited	121	—	121
DUNKERQUE LNG SAS	133	—	133
Other equity securities (unit value < $50 million)	763	—	763
Total other equity securities (a)	1,079	—	1,079
Other investments	1,104	29	1,133

(a)

Including cumulative impairments of $2,029 million in 2017 and $1,633 million in 2016.

(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$)	2018	2017	2016
Balance sheet
Receivables
Debtors and other debtors	496	492	492
Loans (excl. loans to equity affiliates)	57	63	65
Payables
Creditors and other creditors	888	1,161	897
Debts	2	2	6


For the year ended December 31,
(M$)	2018	2017	2016
Statement of income
Sales	4,192	3,407	2,270
Purchases	(9,253)	(7,354)	(4,882)
Financial income	2	6	6
Financial expense	(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, 2018 and for the members of the Board of Directors who are employees of the Group, is detailed below.

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, Strategy & Climate), the Deputy Chief Financial Officer of the Group and the Group Treasurer.


For the year ended December 31,
(M$)	2018	2017	2016
Number of people	15	15	14
Direct or indirect compensation	17.7	15.6	13.4
Pension expenses (a)	2.5	10.8	6.1
Share-based payments expense (IFRS 2) (b)	12.6	6.5	5.3

(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 $117.0 million provisioned as of December 31, 2018 (against $119.7 million as of December 31, 2017 and $104.7 million as of December 31, 2016). The decrease in the pension expenses in 2018 is due to the recognition in 2017 of the entire expense related to the agreement on the transition from work to retirement in France.

(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 achievement of the performance conditions for the grant of the number of shares (82%) having been higher than assumption used for the estimation (70%) for the year 2017, the grant rate of the 2015 to 2018 plans has been revised upwards.

The compensation allocated to members of the board of directors for directors’ fees totaled $1.65 million in 2018 (against $1.44 million in 2017 and $1.22 million in 2016).