ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

This section is the Company’san analysis of itsthe financial performance and of significant trends that may affect itsTotalEnergies’ future performance. Itperformance and it should be read in conjunction with the Consolidated Financial Statements and the Notes thereto starting on page F-9 attached hereto.F-9. The Consolidated Financial Statements and the Notes thereto are prepared in accordance with IFRS as issued by the IASB and IFRS as adopted by the EU.

This section contains forward-looking statements that are subject to risks and uncertainties. For a list of important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, see “Cautionary Statement Concerning Forward-Looking Statements” starting on page ii.

Critical accounting policiesFor information on the Russian-Ukrainian conflict and standards applicable in the future

For an overviewsituation of TOTAL’s critical accounting policies, including policies involving management’s judgment and estimates and significant accounting policies applicable in the future,Company at March 24, 2022, refer to the Introduction and Note 1.2 (“Significant accounting policies applicable in the future”) of the Notes to the Consolidated Financial Statements (startingItem 5. – 5.6 starting on pages F-15 and F-17, respectively).page 17.

5.1    Overview

TOTAL’sTotalEnergies’ results are affected by a variety of factors, including changes in crude oil and natural gas prices as well asand refining and marketing margins, which are all generally expressed in dollars, andas well as changes in exchange rates, particularly the value of the euro compared to the dollar. Higher crude oil and natural gas prices generally have a positive effect on the income of TOTAL, sinceTotalEnergies because the Exploration & Production segment’s oil and gas business and the Integrated Gas, Renewables & Power segment’s LNG and downstream gas business are positively impacted by the resulting increase in revenues. Lower crude oil and natural gas prices generally have a corresponding negative effect. The effect of changes in crude oil prices on the activities of TOTAL’sTotalEnergies' Refining & Chemicals and Marketing & Services segments (Downstream) depends upon the speed at which the prices of refined petroleum products adjust to reflect such changes. TOTAL’sTotalEnergies' results are also significantly affected by the costs of its activities, in particular those related to exploration and production, and by the outcome of its strategic decisions with respect to cost reduction efforts. In addition, TOTAL’sTotalEnergies' results are affected by general economic and political conditions and changes in governmental laws and regulations, as well as by the impact of decisions by OPECOPEC+ on production levels. For more information, refer to “Item 3. - 3.23.1 Risk factors”.

In 2021, TotalEnergies generated cash flow (DACF)¹ of $30.7 billion, up $13 billion compared to 2020, and adjusted EBITDA² of $42.3 billion. TotalEnergies reported adjusted net income³ of $18.1 billion, representing a return on equity of 16.9% and a return on capital employed (ROACE) of nearly 14% for 2021, which demonstrates the quality of its portfolio and operations. IFRS net income was $16 billion (€13.6 billion).

The integrated Gas, Renewables & Power (iGRP) segment reported an adjusted net operating income⁴ and cash flow (DACF)⁵ of $6.2 billion and $6.1 billion, respectively. These historic results build on the globally integrated LNG portfolio, leveraging rising oil and gas prices and outperformance in the gas and LNG trading business. The profitable growth strategy in Renewables & Electricity continues with more than 10 GW of gross installed capacity and more than 6 million electricity customers at year-end 2021. At the start of 2022, TotalEnergies secured an additional 2 GW of offshore wind projects with the award of a concession in Scotland, as part of the Scotwind tender.

The Exploration & Production segment benefited from higher oil and gas prices with adjusted net operating income of $10.4 billion and was a strong contributor to the Company’s net cash flow with $12.2 billion. In line with its strategy to invest in low-cost and low-emission projects, TotalEnergies increased its presence in Brazil by entering the Atapu and Sépia giant fields, launched the Lake Albert Resource Development Project in Uganda, while divesting interests in mature assets.

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¹   DACF = debt adjusted cash flow, is defined as operating cash flow before working capital changes and without financial charges. Operating cash flow before working capital changes is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sales (effective first quarter 2020). Operating cash flow before working capital changes provides information on underlying cash flow without the short-term impacts of changes in inventory and other working capital elements at replacement cost. For information on the inventory effect and replacement cost method, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

²   Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) corresponds to the adjusted earnings before depreciation, depletion and impairment of tangible and intangible assets and mineral interests, income tax expense and cost of net debt, i.e., all operating income and contribution of equity affiliates to net income. The reconciliation of adjusted EBITDA with the consolidated financial statements is set forth under “Reconciliation of net income (TotalEnergies share) to adjusted EBITDA” on page 5.

³   Adjusted net income refers to adjusted net operating income, adjusted for special items, inventory valuation effect and the effect of changes in fair value. See “- 5.3 Business segment reporting” below for further details.

⁴   Adjusted for special items, inventory valuation effect and the effect of changes in fair value. See Note 3 to the Consolidated Financial Statements (starting on page F-19).

⁵   DACF = debt adjusted cash flow. Operating cash flow before working capital changes without financial charges of the segment is defined as the cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases, excluding the impact of contracts recognized at fair value for the segment and including capital gains on the sale of renewable projects.

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TOTAL faced two major crisesDownstream¹ posted solid results with $3.5 billion in 2020:adjusted net operating income and cash flow (DACF)² of $5.5 billion, or more than $3 billion in net cash flow. High margins in petrochemicals and the return to pre-crisis results in the Marketing & Services segment, despite sales volumes still impacted by the COVID-19 pandemic, offset European refining margins that severely affected global energy demand, and the oil crisis that drove the Brent price below $20 per barrel in the second quarter. In this particularly difficult context, the Group implemented an immediate action plan and proved its resilience thanksremained low, due to the quality of its portfolio (production cost of $5.1 per boe, the lowest among its peers) and its integrated modelrise in energy costs.

The Company maintained capital discipline with cash flow (DACF)⁽¹⁾ generation of nearly $18 billion. It posted an adjusted net incomeinvestments⁽²⁾³ of $4.1$13.3 billion, and, thanks to strong discipline on investments ($13 billion, down 26%) and costs ($1.1 billion in savings), the organic cash breakeven⁽³⁾ was $26 per barrel. Consistent with its climate ambition, the Group recorded exceptional asset impairments, notably on Canadian oil sands assets, most of which were recorded25% was in its accounts at the endRenewables & Electricity. TotalEnergies reported net cash flow⁴ of June, leading to an IFRS loss$15.8 billion for the year, allowing it to continue to reduce its net debt with year-end gearing⁵ reduced to 15.3%, compared to 21.7% at year-end 2020, and buy back $1.5 billion of $7.2 billion.

2020 represents a pivotal year for the Group’s strategyshares, in line with the announcementpreviously announced objective.

In line with the policy announced in February 2021, the Board of its ambition to get to net zero emissions (Net Zero), together with society. The Group affirms its plan to transform itself into a broad energy company to meet the dual challenge of the energy transition: more energy, less emissions. Thus, the Group’s profile will be transformed over the 2020-30 decade: the growth of energy production will be based on two pillars, LNG and Renewables & Electricity, while oil products are expected to fall from 55% to 30% of sales. To anchor this transformation, the GroupDirectors will propose to its shareholders at the Annual GeneralShareholders’ Meeting to be held on May 28, 2021, changing its name to TotalEnergies. They will thus have the opportunity to endorse this strategy and the underlying ambition to transition to carbon neutrality.

In 2020, TOTAL secured its investments in Renewables & Electricity ($2 billion) and accelerated the implementation of its strategy to grow renewables, adding 10 GW to its portfolio. With the acquisition at the start of 2021 of a 20% stake in Adani Green Energy Limited (AGEL), one of the largest solar developers in the world, and of portfolios of projects in the United States, the Group now has a portfolio of gross installed capacity, under construction and in development of 35 GW by 2025, with more than 20 GW already benefiting from long-term power purchase agreements.

TOTAL preserves its financial strength with a gearing⁽⁴⁾ of 21.7% at the end of 2020. Confident in the Group’s fundamentals, the Board of Directors of TOTAL SE confirms its policy of supporting the dividend through economic cycles. Therefore, it will propose at the Annual General Meeting of Shareholders to be held on May 28, 2021,25, 2022, the distribution of a final 2021 dividend of €0.66 per share, equal to the previous three quarters,2021 interim dividends already declared.

In addition, the Board of Directors defined a return-to-shareholder policy for 2022 combining, on the one hand, an increase in interim dividends of 5% given the structural growth in cash flow generated by the LNG and setelectricity business, and, on the dividendother hand, buybacks to share the surplus cash flow from high hydrocarbon prices. These share buybacks are expected to be $2 billion for 2020the first half of 2022.

In accordance with the resolution approved by shareholders in May 2021 on TotalEnergies’ ambitions for sustainable development and energy transition toward carbon neutrality, the Board of Directors will report on the progress made in implementing these ambitions at €2.64 per share.the Shareholders’ Meeting to be held on May 25, 2022. With this in mind, the Board of Directors adopted a ‘Sustainability & Climate - Progress Report 2022’, which will be submitted to a shareholder advisory vote at the Annual Shareholders’ Meeting on May 25, 2022. It was published and presented on March 24, 2022, during a Strategy, Sustainability & Climate investor meeting.

Outlook

SupportedThe price of oil rose above $90/b for the first time since 2014 at the beginning of 2022. This increase in price is driven by the global demand recovery and OPEC+ quota compliance,discipline in a context of constrained supply, given the low level of investment in hydrocarbons since 2015. It is exacerbated in the short term by low oil inventories. Prices could therefore remain at high levels, depending on the mobilization of OPEC+ production and the growth of unconventional oil production in the United States.

After reaching all-time highs in the fourth quarter 2021, gas prices have remained above 50$/bvery high in Europe and Asia since the beginning of 2021. However, the oil environment remains uncertain and dependent on the recovery2022, driven by geopolitical uncertainties in Europe despite a mild winter season. In this context, futures markets anticipate gas prices that may remain above $20/Mbtu in 2022.

TotalEnergies anticipates 2022 hydrocarbon production growth of global demand, still affectedaround 2%, driven by the COVID-19 pandemic.

In a contextstart-ups of disciplined OPEC+ quota implementation,Mero 1 in Brazil and Ikike in Nigeria, the Group anticipates 2021 production will be stable compared to 2020, benefiting fromentry into the resumptionAtapu and Sépia PSCs in Brazil effective May 2022 but impacted by the sales of production in Libya.

European refining margins remain fragile, with low demand for jet fuel weighing on the recovery of distillates.

Faced with uncertainties in the environment, net investments⁽⁵⁾ are projected at $12 billionmature assets completed in 2021 while preservingas well as the flexibilityexit from Myanmar effective July 2022.

Continuing the momentum that has been underway for several years, TotalEnergies is implementing its strategy of integrated growth in LNG, which is expected to mobilize additional investments shouldgenerate structural cash flow growth in 2022. In addition, given the evolution of oil and gas environment strengthen. After reducing operating costs by $1.1 billionprices in 2020 compared to 2019, the Group maintains strong discipline on spending and targets additional savings of $0.5 billion in 2021.

The Group’s teams are fully committed to the four priorities of HSE (Health, Safetyrecent months and the Environment), operational excellence, cost reductionlag effect on price formulas, TotalEnergies anticipates that its average LNG selling price should remain at a high level of at least $12/Mbtu in the first half of 2022.

In Renewables & Electricity, TotalEnergies plans to have more than 16 GW of renewable gross capacity in operation by year-end 2022. Electricity generation is expected to increase by more than 25% in 2022. To implement its profitable growth strategy in the electricity value chain, TotalEnergies expects to allocate, in 2022, $3.5 billion of net investments to Renewables & Electricity, or 25% of its net investments.

Downstream will continue to strengthen its industrial competitiveness and invest in petrochemicals and in new markets, such as biofuels and electric mobility.

Confident in its ability to transform itself into a sustainable multi-energy company and increase the return to shareholders, the Company confirms its cash flow generation.

The Group maintains its priorities for cash flow allocation:allocation priorities: investing in profitable projects to implement the Group’sits transformation strategy, support thelinking dividend and maintaingrowth to structural cash flow growth, maintaining a strong balance sheet.

Already in 2021, in renewables, the Group has announced more than 10 GW of additional projects through the acquisition ofsheet and a long-term debt rating with a minimum “A” level by anchoring gearing below 20% stake in Adani Green Energy Limited (AGEL), oneand allocating a share of the world’s leading solar developers, a partnershipsurplus cash flow from high hydrocarbon prices to share buybacks.

In accordance with Hanwha Groupthis policy, TotalEnergies expects net investments of $14-15 billion in 2022, of which 50% will be allocated to growth and 50% to maintaining the United States with a 1.6 GW portfolio,base of its activity.

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¹   Downstream refers to the Refining & Chemicals business segment and the acquisitionMarketing & Services business segment.

²   DACF = debt adjusted cash flow. Operating cash flow before working capital changes without financial charge of a 2.2 GW portfoliothe segment is defined as the cash flow from operating activities before changes in working capital at replacement cost, except those related to leases.

³   Net investments = organic investments + net acquisitions. For additional information on investments, refer to point 1.6 of projects in Texas. TOTAL intendschapter 1 of the Universal Registration Document 2021 (starting on page 30), incorporated herein by reference.

⁴   Refer to allocate more than 20% of itsthe reconciliation table for different cash flow figures set forth under “Cash Flow” on page 5.

⁵   Gearing = net investmentsdebt / (net debt +shareholders equity TotalEnergies share + non-controlling interests); excludes leases receivables and leases debts. For additional information, refer to Renewables and Electricity in 2021.Note 15.1(E) to the Consolidated Financial Statements (starting on page F-71).

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Adjustment Items to net income* (TotalEnergies share)

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*   For details on adjustments to operating income, refer to Note 3(C) to the Consolidated Financial Statements (starting on page F-26).

Cash Flow

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*   Operating cash flow before working capital changes, is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sales (effective first quarter 2020). Historical data have been restated to cancel the impact of fair valuation of the iGRP segment’s contracts.

**  Changes in working capital are presented excluding the mark-to-market effect of iGRP’s contracts.

Reconciliation of net income (TotalEnergies share) to adjusted EBITDA

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2021 vs. 2020

In terms of market environment parameters:

●the Brent price increased by 69% to $70.9/b on average in 2021 from $41.8/b on average in 2020;

●TotalEnergies’ average liquids price realization¹ increased by 76% to $65.0/b in 2021 from $37.0/b in 2020;

●TotalEnergies’ average gas price realization² was $6.60/Mbtu in 2021, or 2.2 times greater than $2.96/Mbtu in 2020;

●TotalEnergies’ average LNG price realization³ increased by 82% to $8.80/Mbtu in 2021 from $4.83/Mbtu in 2020;

●TotalEnergies’ variable cost margin – Refining Europe (VCM)⁴ decreased by 9% to $10.5/t on average in 2021 compared to $11.5/t in 2020.

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¹   Consolidated subsidiaries.

²   Consolidated subsidiaries.

³   Consolidated subsidiaries and equity affiliates.

⁴   This indicator represents TotalEnergies’ average margin on variable cost for refining in Europe (equal to the difference between TotalEnergies European refined product sales and crude oil purchases with associated variable costs divided by volumes refined in tons).

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Hydrocarbon production was 2,819 kboe/d for the full-year 2021, down 2% year-on-year, comprised of:

●+3% due to start-ups and ramp-ups, including North Russkoye in Russia, Iara in Brazil and Johan Sverdrup in Norway, as well as the resumption of production in Libya;

●+3% due to the increase in gas demand and OPEC+ quotas,

●-1% due to portfolio effect, notably the disposals of assets in the UK and the CA1 block in Brunei;

●-1% due to the price effect;

●-3% due to planned maintenance and unplanned downtime, particularly in the UK and Norway (Snøhvit);

●-3% due to the natural field decline.

The euro-dollar exchange rate averaged $1.1827/€ in 2021, compared to $1.1422/€ in 2020.

Sales were $205,863 million in 2021 compared to $140,685 million in 2020, an increase of 46%. In 2021, external sales were 2 times greater than 2020 for the Integrated Gas, Renewables & Power segment, 1.5 times greater for the Exploration & Production segment, 1.5 times greater for Refining & Chemicals segment and 1.3 times greater for the Marketing & Services segment.

Net income (TotalEnergies share) increased to $16,032 million in 2021 compared to $(7,242) million in 2020, due to higher oil and gas prices. In 2021, total adjustments to net income (TotalEnergies share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had an impact of ($2,028) million, comprised of $(910) million for impairments (including $(305) million for the withdrawal of TotalEnergies from Myanmar and the $(89) million impairment related to the end of the Qatargas 1 contract) and $(170) million for the loss on the sale of TotalEnergies’ interest in Yucal Placer in Venezuela, as well as notably the $(1,379) million loss on the sale of TotalEnergies’ interest in Petrocedeño¹ to PDVSA in Venezuela and the $(177) million loss on the Utica sale in the United States, restructuring charges related to the voluntary departure plan in France and Belgium, and a positive inventory effect of $1,495 million for the year. For a detailed overview of adjustment items for 2021, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19). In 2020, total adjustments to net income (TotalEnergies share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had an impact of $(11,301) million, including $(8.5) billion of impairments, related mainly to oil sands assets in Canada.

Total income taxes in 2021 amounted to $(9,587) million, 30 times greater than $(318) million in 2020. For further detail on income taxes, refer to Note 11 to the Consolidated Financial Statements (starting on page F-57).

TotalEnergies SE bought back, in 2021, 37,306,005 TotalEnergies SE shares on the market, i.e., 1.4% of the share capital as of December 31, 2021, of which 30,665,526 million for cancellation and, in 2020, 13,236,044 TotalEnergies SE shares on the market, i.e., 0.50% of the share capital as of December 31, 2020, of which 12,233,265 for cancellation. See also “- 5.4.3 Shareholders’ equity”, below.

Fully-diluted earnings per share was $5.92 in 2021 compared to $(2.90) in 2020.

Finalized asset sales amounted to:

Finalized acquisitions⁴ amounted to:

TotalEnergies’ cash flow from operating activities for the full-year 2021 was $30,410 million, 2.1 times greater than $14,803 million for the full-year 2020. The change in working capital as determined using the replacement cost method⁵ excluding the mark-to-market effect of iGRP’s contracts, including capital gain from renewable project sales (effective first quarter 2020) and including organic loan repayment from equity affiliates was a decrease of $1,269 million for the full-year 2021, compared to an increase of $894 million for the full-year 2020. For the full-year 2021, the change in working capital was an increase of $616 million in accordance with IFRS. The difference of $1,885 million between IFRS and replacement cost method corresponds to the following adjustments: (i) the pre-tax inventory valuation effect of $1,796 million, (ii) plus the mark-to-market effect of iGRP’s contracts of $804 million, (iii) less the capital gains from renewables project sale of $89 million and (iv) less the organic loan repayments from equity affiliates of $626 million.

¹   Sale of TotalEnergies’ interest in Petrocedeño S.A. to Corporation Venezolana de Petróleos (CVP), an affiliate of Petróleos de Venezuela (PDVSA).

²   As at December 31, 2021, TotalEnergies held an interest of 19.09% in Clean Energy Fuels Corp., an American company listed on NASDAQ and based in California.

³   As at December 31, 2021, TotalEnergies held an interest of 50.83% in SunPower, an American company listed on NASDAQ and based in California.

⁴   Acquisitions net of operations with non-controlling interests.

⁵   For information on the replacement cost method, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19).

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Operating cash flow before working capital changes¹ totaled $29,140 million for the full-year 2021, an increase of 86% compared to $15,697 million for the full-year 2020. Operating cash flow before working capital changes without financial charges (DACF)² totaled $30,660 million for the full-year 2021, an increase of 74% compared to $17,635 million for the full-year 2020.

TotalEnergies’ net cash flow³ totaled $15,833 million in 2021 compared to $2,708 million in 2020, reflecting the $13.4 billion increase in operating cash flow before working capital changes and a $318 million increase in net investments to $13,307 million in 2021.

See also “- 5.4 Liquidity and Capital Resources”, below.

2020 vs. 2019

In 2020, market conditions were less favorable than in 2019 due to the COVID-19 pandemic and the oil crisis. The Brent price decreased to $41.8/b on average in 2020 from $64.2/b on average in 2019, while remaining volatile throughout 2020. TOTAL’sTotalEnergies’ average liquids price realization⁽⁶⁾⁴ decreased by 38% to $37.0/b in 2020 from $59.8/b in 2019. TOTAL’sTotalEnergies’ average gas price realization⁽⁶⁾⁵ decreased by 24% to $2.96/Mbtu in 2020 from $3.88/Mbtu in 2019. TOTAL’sTotalEnergies’ average LNG price realization⁽⁷⁾⁶ decreased by 24% to $4.83/Mbtu in 2020 from $6.31/Mbtu in 2019. The Group’sTotalEnergies’ variable cost margin – Refining Europe (“VCM”)(VCM) decreased by 67% to $11.5/t on average in 2020 compared to $34.9/t in 2019, mainly due to decreasing crude oil prices.

For the full-year 2020, hydrocarbon production was 2,871 kboe/d, a decrease of 5% compared to 3,014 kboe/d in 2019, comprised of:

●-5% due to compliance with OPEC+ quotas, notably in Nigeria, the United Arab Emirates and Kazakhstan, as well as voluntary reductions in Canada and disruptions in Libya;

●+5% due to the ramp-up of recently started projects, notably Culzean in the United Kingdom, Johan Sverdrup in Norway, Iara in Brazil, Tempa Rossa in Italy and North Russkoye in Russia;

●-3% due to the natural decline of fields; and

●-2% due to maintenance, and unplanned outages, notably in Norway.

The euro-dollar exchange rate averaged $1.1422/€ in 2020, compared to $1.1195/€ in 2019.

Non-Group salesSales were $140,685 million in 2020 compared to $200,316 million in 2019, a decrease of 30% reflecting the decreased hydrocarbon prices and the decrease in global energy demand due to the COVID-19 pandemic. In 2020, Non-Groupexternal sales decreased by 32% for the Exploration & Production segment, 14% for the Integrated Gas, Renewables & Power segment, 35% for Refining & Chemicals segment and 27% for the Marketing & Services segment.segment compared to 2019.

Net income (Group(TotalEnergies share) decreased to $(7,242) million in 2020 compared to $11,267 million in 2019, due to exceptional asset impairments, notably on Canadian oil sands assets. In 2020, total adjustments to net income (Group(TotalEnergies share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had a negative impact of $11,301 million, including $8.5 billion of impairments, related mainly to oil sands assets in Canada. For a detailed overview of adjustment items for 2020, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19). In 2019, adjustments to net income (Group(TotalEnergies share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had a negative impact of $561 million mainly due to impairments of assets mainly located in the United States (Utica, Chinook).

Total income taxes in 2020 amounted to $(318) million, a decrease of 95% compared to $(5,872) million in 2019, due to the relative weight and lower tax rates in the Upstream segment and a lower hydrocarbon price environment.

In 2020, TOTALTotalEnergies SE bought back, in 2020, 13,236,044 TOTAL SEof its shares on the market, i.e., 0.50% of theits share capital as of December 31, 2020. In2020, of which 12,233,265 for cancellation and, in 2019, the Company bought back 52,389,336 TOTALof its shares on the market, i.e., 2.01% of the Company’sits outstanding share capital as of December 31, 2019.2019, of which 32,723,365 for cancellation. See also “- 5.4.45.4.3 Shareholders’ equity”, below.

Fully-diluted earnings per share was $(2.90) in 2020 compared to $4.17 in 2019.

Finalized asset sales amounted to $1.5 billion in 2020, comprised notably of the sale of Enphase shares by SunPower⁽⁸⁾⁷, the sale of the Group'sTotalEnergies’ corporate offices in Brussels, the sale of non-strategic assets in the UK North Sea, the completion of the sale of Block CA1 in Brunei, the sale of the Group’sTotalEnergies’ interest in the Fos Cavaou regasification terminal in France, and the sale of 50% of a portfolio of solar and wind assets from Total Quadran in France. Finalized asset sales amounted to $1,939 million for the full-year 2019, comprised notably of the payment received upon the take-over of the Toshiba LNG portfolio in the United States, the sale of the interest in the Wepec refinery in China and the sale of the Group’sTotalEnergies’ interest in the Hazira terminal in India and polystyrene activities in China.

Finalized acquisitions⁽⁹⁾ amounted to $4.2 billion for the full-year 2020, comprised notably of the acquisition of Tullow’s entire interest in the Lake Albert project in Uganda, the acquisition of CCGT assets and of a portfolio of customers from Energías de Portugal in Spain, the acquisition in India of 50% of a portfolio of installed solar activities from Adani Green Energy Limited, the finalization of the acquisition of 37.4% stake in Adani Gas Ltd, the acquisition of interests in Blocks 20 and 21 in Angola and the payment for a second bonus tranche linked to taking the 10% stake in the Arctic LNG 2 project in Russia. Finalized acquisitions amounted to $5,991 million for the full-year 2019, comprised mainly of the acquisition of Anadarko’s interest in Mozambique LNG, the acquisition of a 10% stake in the Arctic LNG 2 project in Russia and the acquisition of Chevron’s interest in the Danish Underground Consortium in Denmark.

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¹   Operating cash flow before working capital changes is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sales (effective first quarter 2020). Operating cash flow before working capital changes provides information on underlying cash flow without the short-term impacts of changes in inventory and other working capital elements at replacement cost. For information on the replacement cost method, refer to refer to Note 3 to the Consolidated Financial Statements (starting on page F-19). The reconciliation table for different cash flow figures is set forth under “Cash Flow” on page 5.

²   DACF = debt adjusted cash flow, is defined as operating cash flow before working capital changes and without financial charges.

³   See the reconciliation table for different cash flow figures set forth under “Cash Flow” on page 5.

⁴   Consolidated subsidiaries.

⁵   Consolidated subsidiaries.

⁶   Consolidated subsidiaries and equity affiliates.

⁷   As at December 31, 2020, TotalEnergies held an interest of 51.61% in SunPower, an American company listed on NASDAQ and based in California.

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The Group’sTotalEnergies’ cash flow from operating activities for the full-year 2020 was $14,803 million, a decrease of 40% compared to $24,685 million for the full-year 2019. The change in working capital as determined using the replacement cost method⁽¹⁰⁾ excluding the mark-to-market effect of iGRP’s contracts, and including capital gain from renewable project salesales (effective first quarter 2020) and including organic loan repayment from equity affiliates was $(894)an increase of $894 million for the full-year 2020, compared to $(1,426)an increase of $1,426 million for the full-year 2019. It isFor the (increase) decreasefull-year 2020, the change in working capital was a decrease of $1,869 million as determined in accordance with IFRS. The difference of $2,763 million between IFRS adjusted forand replacement cost method corresponds to the following adjustments: (i) the pre-tax inventory valuation effect of $(1,440)$1,440 million, (ii) plus the mark-to-market effect of iGRP’s contracts of $(1,116)$1,116 million, (iii) plus the capital gains from renewables project sale of $(96)$96 million and (iv) plus the organic loan repayments from equity affiliates of $(111)$111 million. For the full-year 2020, operating

Operating cash flow before working capital changes andtotaled $15,697 million for the full-year 2020, a decrease of 40% compared to $26,111 million for the full-year 2019¹. Operating cash flow before working capital changes without financial charges (DACF)⁽¹¹⁾ was totaled $17,635 million for the full-year 2020, a decrease of 37% compared to $28,180 million for the full-year 2019. For the full-year 2020, operating cash flow before working capital changes⁽¹²⁾ was $15,697 million, a decrease of 40% compared to $26,111 million for the full-year 2019.

The Group’sTotalEnergies’ net cash flow⁽¹³⁾ was $2,708 million in 2020 compared to $8,662 million in 2019, due to the decrease of $10,414 million in operating cash flow before working capital changes, partially offset by a reduction in net investments of $4,460 million.

See also “- 5.4 Liquidity and Capital Resources”, below.

2019 vs. 2018

In 2019, market conditions were less favorable than in 2018. The Brent price decreased to $64.2/b on average in 2019 from $71.3/b on average in 2018, while remaining volatile. In 2019, TOTAL’s average liquids price realization⁽¹⁴⁾ decreased by 7% to $59.8/b in 2019 from $64.3/b in 2018. TOTAL’s average gas price realization⁽¹⁴⁾ decreased by 20% to $3.88/Mbtu in 2019 from $4.87/Mbtu in 2018. The Group’s European refining VCM decreased by 9% to $34.9/t on average in 2019 compared to $38.2/t in 2018, mainly due to decreasing crude oil prices.

For the full-year 2019, hydrocarbon production was 3,014 kboe/d, an increase of 9% compared to 2,775 kboe/d in 2018, due to:

The euro-dollar exchange rate averaged $1.1195/€ in 2019, compared to $1.1810/€ in 2018.

Non-Group sales were $200,316 million in 2019 compared to $209,363 million in 2018, a decrease of 4% reflecting the decreased hydrocarbon prices, partially offset by the increase of the Group’s production in 2019. In 2019, Non-Group sales decreased by 27% for the Exploration & Production segment, 5% for the Refining & Chemicals segment and 3% for the Marketing & Services segment. The Integrated Gas, Renewables & Power segment’s Non-Group sales increased by 5% in 2019.

Net income (Group share) decreased by 2% to $11,267 million in 2019 compared to $11,446 million in 2018, mainly due to lower hydrocarbon prices, partially offset by growth of the Group’s hydrocarbon production. In 2019, adjustments to net income (Group share), which include the after-tax inventory valuation effect, special items and the impact of changes in fair value, had a negative impact of $561 million mainly due to impairments on assets mainly located in the United States (Utica, Chinook). For a detailed overview of adjustment items for 2019, refer to Note 3 to the Consolidated Financial Statements (starting on page F - 16). In 2018, adjustments to net income (Group share), which include the after-tax inventory valuation effect, special items and the impact of changes in fair value, had a negative impact of $2,113 million, mainly due to an inventory effect and an impairment on Ichthys related to the sale of a partial interest by the Group, as well as the impairment of production facilities by SunPower⁽¹⁵⁾.

Income taxes in 2019 amounted to $(5,872) million, a decrease of 9.9% compared to $(6,516) million in 2018, due to the relative weight and lower tax rates in the Upstream segment and a lower hydrocarbon price environment.

In 2019, the Company bought back 52,389,336 TOTAL shares on the market, i.e., 2.01% of the Company’s outstanding share capital as of December 31, 2019. See also “- 5.4.4 Shareholders’ equity”, below. In 2018, the Company bought back 72,766,481 TOTAL shares on the market, i.e., 2.76% of the Company’s outstanding share capital as of December 31, 2018.

Fully-diluted earnings per share was $4.17 in 2019 compared to $4.24 in 2018, a decrease of 2%.

Finalized asset sales amounted to $1,939 million for the full-year 2019, comprised notably of the payment received upon the take-over of the Toshiba LNG portfolio in the United States, the sale of the interest in the Wepec refinery in China, the sale of the Group’s interest in the Hazira terminal in India and polystyrene activities in China. Asset sales completed were $5,172 million for the full-year 2018, comprised of the sale of a 4% interest in the Ichthys project in Australia and the sale of the Group’s share of the LNG re-gas terminal at Dunkirk, as well as the sale of Joslyn in Canada, Rabi in Gabon, the Martin Linge and Visund fields in Norway, an interest in Fort Hills in Canada, SunPower’s sale of its interest in 8point3, the marketing activities of TotalErg in Italy, the Marketing & Services network in Haiti, and the contribution of the Bayport polyethylene unit in the United States to the joint venture formed with Borealis (and Nova prior to 2020) in which TOTAL holds 50%.

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