THE HAGUE, The Netherlands,
November 1, 2012 /PRNewswire/ --
Royal Dutch Shell's (NYSE:RDS.A) (NYSE:RDS.B) third
quarter 2012 earnings, on a current cost of supplies (CCS) basis
(see Note 1), were $6.1 billion
compared with $7.2 billion in the
same quarter a year ago.
Third quarter 2012 CCS earnings,
excluding identified items (see page 6), were $6.6 billion compared with $7.0 billion in the third quarter 2011, a
decrease of 6%. Basic CCS earnings per share excluding identified
items decreased by 6% versus the same quarter a year ago.
Cash flow from operating activities
for the third quarter 2012 was $9.5
billion. Cash flow from operating activities excluding
movements in working capital was $11.7
billion in the third quarter 2012.
Net capital investment (see Note 1)
for the third quarter 2012 was $8.0
billion. Capital investment for the third quarter 2012 was
some $8.8 billion and proceeds from
divestments were $0.8 billion.
Total dividends distributed in the
quarter were $2.8 billion, of which
some $0.8 billion were settled under
the Scrip Dividend Programme. During the third quarter 4.3 million
shares were bought back for cancellation for a consideration of
some $0.1 billion.
Gearing at the end of the third
quarter 2012 was 8.6%.
A third quarter 2012 dividend has been
announced of $0.43 per ordinary share
and $0.86 per American Depository
Share (ADS), an increase of 2.4% compared with the third quarter
2011.
SUMMARY OF UNAUDITED RESULTS
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 %[1] 2012 2011 %
Income attributable to
7,139 4,063 6,976 +2 shareholders 19,921 24,418 -18
Current cost of supplies
(CCS) adjustment for
(1,012) 1,901 270 Downstream (171) (2,252)
6,127 5,964 7,246 -15 CCS earnings 19,750 22,166 -11
(432) 245 245 Less: Identified items[2] 193 2,325
CCS earnings excluding
6,559 5,719 7,001 -6 identified items 19,557 19,841 -1
Of which:
4,888 4,507 5,435 Upstream 15,648 15,493
1,731 1,296 1,818 Downstream 4,148 4,552
Corporate and
(60) (84) (252) Non-controlling interest (239) (204)
Cash flow from operating
9,483 13,305 11,645 -19 activities 36,227 30,306 +20
Basic CCS earnings per
0.98 0.95 1.16 -16 share ($) 3.16 3.57 -11
Basic CCS earnings per ADS
1.96 1.90 2.32 ($) 6.32 7.14
Basic CCS earnings per
share excl. identified
1.05 0.91 1.12 -6 items ($) 3.13 3.20 -2
Basic CCS earnings per ADS
2.10 1.82 2.24 excl. identified items ($) 6.26 6.40
0.43 0.43 0.42 +2 Dividend per share ($) 1.29 1.26 +2
0.86 0.86 0.84 Dividend per ADS ($) 2.58 2.52
[1] Q3 on Q3 change.
[2] See page 6.
Royal Dutch Shell Chief Executive
Officer Peter Voser commented:
"Shell is driving a long-term and consistent strategy, against a
backdrop of volatile energy markets. Our profits pay for
substantial investments in new energy supplies, and they pay
dividends for our shareholders.
"Our earnings were driven by lower oil and gas prices, and lower
chemicals margins, which offset the benefits of our operating
performance, underlying growth in oil and gas production, and
higher results in Integrated Gas and Oil Products.
"We've made progress with our Alaska exploration programme, commencing
drilling operations in the Beaufort and Chukchi seas, as the
industry continues to assess offshore potential there. This will be
a multi-year exploration programme, demonstrating Shell's
commitments to high standards on sustainable development and
safety.
"We continue to refresh our portfolio, launching new oil and gas
developments, making new exploration discoveries, purchasing new
liquids-rich shale acreage and increasing our positions in oil and
gas fields where we can add value with our innovation and scale. We
are also continuing with our capital efficiency drive, selling down
positions where others can add more value. We have announced around
$6 billion of acquisitions and new
acreage and also around $6 billion of
asset sales in 2012, which will better position Shell for
growth.
"I am pleased with our progress in a difficult industry
environment. There is more to come from Shell."
THIRD QUARTER 2012 portfolio
developments
Upstream
In Australia, Shell
signed a agreement to consolidate the Crux gas and condensate field
with Nexus Energy and Osaka Gas. Following the completion of the
agreement, which is subject to regulatory approvals, Shell will
assume operatorship and hold an 80% interest in the new joint
venture.
Also in Australia, Shell agreed
to exchange its 33.3% interest in Clio-Acme for Chevron's 16.7%
interest in East Browse and Chevron's 20% interest in West Browse.
In addition to the assets exchanged, a cash payment of some
$0.5 billion from Shell to Chevron
was agreed. Following the completion of this transaction, Shell's
interest will be 35% in West Browse and 25% in East Browse. The
transaction is subject to regulatory approvals.
In China, Shell and
China National Petroleum Corporation signed an amendment of the
production-sharing contract ("PSC") for the onshore Changbei block,
covering some 1,692 square kilometres in the Ordos basin. The PSC
amendment allows for development of additional tight gas sands as
well as further development of the already producing main
reservoir.
Shell and China National Offshore Oil Corporation ("CNOOC")
agreed for CNOOC to acquire a 25% participating interest in
offshore exploration blocks BC9 and BCD10 in Gabon. CNOOC will reimburse Shell for 25%
of certain past exploration costs and carry part of the future
exploration costs. Following completion of the transaction in
October, Shell's interest is 75%.
In Norway, Shell agreed
to acquire BP's 18.36% interest in the offshore Draugen field for a
consideration of some $0.2 billion.
Shell is already the operator of the field and this transaction
will bring Shell's interest to 44.56%. The transaction, subject to
regulatory approvals, is expected to be completed by the end of the
year.
In the United States,
Shell agreed to acquire 618 thousand net acres (equivalent to some
2,500 square kilometres) in the Permian basin in West Texas from Chesapeake Energy for a
consideration of some $1.9 billion.
The acreage is rich in oil and natural gas liquids and currently
produces some 26 thousand barrels of oil equivalent per day
("boe/d") with growth potential. The transaction was completed in
October.
Also in the United States,
Shell agreed to divest its 50% interest in the mature Holstein
field (Shell share of production of 5 thousand boe/d) in the
Gulf of Mexico for a consideration
of some $0.6 billion. The transaction
is expected to be completed by the end of the year.
Shell announced three final investment decisions,
including on the Quest carbon capture and storage project (Shell
share 60%) in Canada. Quest
is expected to capture and store deep underground more than one
million tonnes per annum of CO2 produced in bitumen
processing. Quest is expected to reduce direct emissions from the
Scotford Upgrader by up to 35%. In Italy, the final investment decision was
taken on the onshore Tempa Rossa
field (Shell share 25%) in the Basilicata region. The project is expected to
produce some 45 thousand boe/d at peak production. In October,
Shell announced the final investment decision for the Fram oil and
gas field (Shell share 32%) in the United Kingdom North Sea. The field will
be developed using floating production, storage and offloading
technology. The project is expected to produce 35 thousand boe/d at
peak production.
In Nigeria, Shell
completed the sale of its 30% interest in Oil Mining Lease 34
(Shell share of production of some 20 thousand boe/d) in the Niger
Delta for a consideration of some $0.4
billion. In a separate transaction, Shell also completed the
sale of its 30% interest in the non-producing Oil Mining Lease 40
for a consideration of some $0.1
billion. Including these transactions, Upstream
divestment proceeds totalled some $0.6 billion in the third quarter 2012.
During the third quarter 2012, Shell participated in the Satyr-2
gas discovery (Shell share 25%) in the Carnarvon basin
offshore Australia and the Tukau
Timur Deep gas discovery (Shell share 50%) offshore Malaysia. Shell also drilled a successful
appraisal well at Appomattox Southwest (Shell share 80%) in the
Gulf of Mexico.
As part of its global exploration programme, Shell spent some
$0.6 billion on new acreage
positions during the third quarter of 2012, including positions in
Benin deepwater, the Gulf of Mexico and onshore North America. New acreage positions were also
added offshore Australia,
China, Malaysia and Ukraine.
Downstream
In Norway, Shell
acquired the remaining outstanding shares in Gasnor AS ("Gasnor")
for some $0.1 billion. Shell
previously owned 4.1% of the shares in the company. Gasnor is a
market leader in Norway in small
scale LNG, supplying LNG as a transport fuel to industrial and
marine customers.
Key features of the Third quarter
2012
-
- Third quarter 2012 CCS earnings (see Note 1) were
$6,127 million, 15% lower than in the
same quarter a year ago.
- Third quarter 2012 CCS earnings, excluding identified items
(see page 6), were $6,559 million
compared with $7,001 million in the
third quarter 2011, a decrease of 6%.
- Basic CCS earnings per share decreased by 16% versus the
same quarter a year ago.
- Basic CCS earnings per share excluding identified items
decreased by 6% versus the same quarter a year ago.
- Cash flow from operating activities for the third quarter
2012 was $9.5 billion, compared with
$11.6 billion in the same quarter
last year. Excluding movements in working capital, cash flow from
operating activities in the third quarter 2012 was $11.7 billion, compared with $10.6 billion in the same quarter last
year.
- Net capital investment (see Note 1) for the third quarter
2012 was $8.0 billion. Capital
investment for the third quarter 2012 was some $8.8 billion and proceeds from divestments were
$0.8 billion.
- Total dividends distributed in the third quarter 2012
were $2.8 billion, of which some
$0.8 billion were settled by issuing
some 22.3 million Class A shares under the Scrip Dividend Programme
for the second quarter 2012. Under our share buyback
programme some 4.3 million Class B shares were bought back for
cancellation during the quarter for a consideration of some
$0.1 billion.
- Return on average capital employed (see Note 6) on a
reported income basis was 12.9% at the end of the third quarter
2012.
- Gearing was 8.6% at the end of the third quarter 2012 versus
10.8% at the end of the third quarter 2011.
- Oil and gas production for the third quarter 2012 was 2,982
thousand boe/d. Excluding the impact of divestments, exits, PSC
price effects and security impacts onshore Nigeria, third quarter 2012 production volumes
were 1% higher compared with the same period last year.
- LNG sales volumes of 4.97 million tonnes in the third
quarter 2012 were 4% higher than in the same quarter a year
ago.
- Oil products sales volumes in the third quarter 2012
were 1% lower compared with the third quarter 2011.
- Chemicals product sales volumes in the third quarter 2012
decreased by 3% compared with the same quarter a year ago.
- Supplementary financial and operational disclosure for the
third quarter 2012 is available
at http://www.shell.com/investor.
Summary of identified items
Earnings in the third quarter 2012 reflected the following
items, which in aggregate amounted to a net charge of $432 million (compared with a net gain of
$245 million in the third quarter
2011), as summarised in the table below:
- Upstream earnings included a net charge of $298 million, reflecting impairments of
$354 million mainly related to
onshore gas properties in North
America, a tax charge of $329
million related to the enactment of legislation in the
United Kingdom restricting tax
relief on decommissioning costs, an update to provisions related to
decommissioning and restoration in the
United States and the estimated fair value accounting of
commodity derivatives. These items were partially offset by
divestment gains of $554 million and
the mark-to-market valuation of certain gas contracts. Upstream
earnings for the third quarter 2011 included a net gain of
$636 million.
- Downstream earnings included a net charge of $134 million, reflecting legal and environmental
provisions. Downstream earnings for the third quarter 2011 included
a net charge of $338
million.
- Corporate results and Non-controlling interest included a
net charge of $53 million for the
third quarter 2011.
SUMMARY OF IDENTIFIED ITEMS
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 2012 2011
Segment earnings impact of
identified items:
(298) 181 636 Upstream 336 2,397
(134) 64 (338) Downstream 128 (19)
Corporate and Non-controlling
- - (53) interest (271) (53)
(432) 245 245 Earnings impact 193 2,325
These identified items generally relate to events with an impact
of more than $50 million on Royal
Dutch Shell's CCS earnings and are shown to provide additional
insight into segment earnings and income attributable to
shareholders. Further comments on the business segments are
provided in the section 'Earnings by Business Segment' on page 7 to
9.
EARNINGS BY BUSINESS SEGMENT
UPSTREAM
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 %[1] 2012 2011 %
Upstream earnings excluding
4,888 4,507 5,435 -10 identified items 15,648 15,493 +1
4,590 4,688 6,071 -24 Upstream earnings 15,984 17,890 -11
Upstream cash flow from
8,278 9,830 8,520 -3 operating activities 26,896 24,094 +12
Upstream net capital
6,932 5,293 5,944 +17 investment 15,997 11,720 +36
Liquids production
available for sale
1,599 1,612 1,676 -5 (thousand b/d) 1,631 1,674 -3
Natural gas production
available for sale (million
8,022 8,647 7,749 +4 scf/d) 9,167 8,769 +5
Total production available
2,982 3,103 3,012 -1 for sale (thousand boe/d) 3,211 3,186 +1
LNG sales volumes (million
4.97 4.57 4.76 +4 tonnes) 14.71 13.99 +5
[1] Q3 on Q3 change
Third quarter Upstream earnings excluding identified
items were $4,888 million compared
with $5,435 million a year ago.
Identified items were a net charge of $298
million, compared with a net gain of $636 million in the third quarter 2011 (see page
6).
Compared with the third quarter 2011, Upstream earnings
excluding identified items benefited from the increased
contribution from Integrated Gas, which included an additional
dividend from an LNG venture. Upstream Americas incurred a loss as
a result of higher depreciation, increased operating expenses,
lower gas realisations and the impact of hurricane Isaac on
offshore operations in the Gulf of
Mexico. Upstream earnings also reflected higher maintenance
activities and increased exploration expenses.
Global liquids realisations were 5% lower and synthetic crude
oil realisations in Canada were 8%
lower than in the third quarter 2011. Global natural gas
realisations were 3% lower than in the same quarter a year ago.
Natural gas realisations in the Americas decreased by 38%, whereas
natural gas realisations outside the Americas increased by 8%.
Third quarter 2012 production was 2,982 thousand boe/d compared
with 3,012 thousand boe/d a year ago. Liquids production decreased
by 5% and natural gas production increased by 4% compared with the
third quarter 2011. Excluding the impact of divestments, exits, PSC
price effects and security impacts onshore Nigeria, third quarter 2012 production volumes
were 1% higher compared with the same period last year.
New field start-ups and the continuing ramp-up of fields
contributed some 163 thousand boe/d to production in the third
quarter 2012, in particular from the ramp-up of Pearl GTL in
Qatar and Pluto LNG in
Australia, which more than offset
the impact of field declines.
LNG sales volumes of 4.97 million tonnes were 4% higher than in
the same quarter a year ago. LNG sales volumes mainly reflected the
contribution from Pluto LNG.
DOWNSTREAM
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 %[1] 2012 2011 %
Downstream CCS earnings
1,731 1,296 1,818 -5 excluding identified items 4,148 4,552 -9
1,597 1,360 1,480 +8 Downstream CCS earnings 4,276 4,533 -6
Downstream cash flow from
335 3,265 2,069 -84 operating activities 6,808 4,597 +48
Downstream net capital
1,051 967 149 +605 investment 2,804 1,980 +42
Refinery processing intake
2,880 2,810 2,854 +1 (thousand b/d) 2,824 2,905 -3
Oil products sales volumes
6,290 6,321 6,374 -1 (thousand b/d) 6,191 6,210 -
Chemicals sales volumes
4,699 4,671 4,832 -3 (thousand tonnes) 14,049 14,391 -2
[1] Q3 on Q3 change
Third quarter Downstream earnings excluding identified
items were $1,731 million compared
with $1,818 million in the third
quarter 2011. Identified items were a net charge of $134 million, compared with a net charge of
$338 million in the third quarter
2011 (see page 6).
Compared with the third quarter 2011, Downstream earnings
excluding identified items benefited from a recovery in industry
refining margins and Shell's operating performance. Earnings were
also supported by lower operating expenses, mainly as a result of
favourable currency exchange rate effects. These items were more
than offset by lower Chemicals earnings and reduced contributions
from marketing and trading. Rising oil prices during the third
quarter 2012 and the global economic slowdown impacted marketing
contributions. Compared with the third quarter 2011, Chemicals
earnings decreased due to rising feedstock prices in Europe, the impact of hurricane Isaac on
operations in the Gulf of Mexico
as well as the global economic slowdown.
Oil products sales volumes were 1% lower compared with the same
period a year ago. Lower marketing volumes, as a result of weaker
demand as well as portfolio divestments, were largely offset by
higher trading volumes.
Chemicals sales volumes decreased by 3% compared with the same
quarter last year, mainly due to reductions in European capacity
and the impact of hurricane Isaac in the Gulf of Mexico. Chemicals manufacturing plant
availability was 89% compared with 90% in the third quarter 2011.
Improved global operating performance during the quarter largely
offset the impact on availability of hurricane Isaac in the
Gulf of Mexico.
Refinery intake volumes were 1% higher compared with the third
quarter 2011. Excluding portfolio impacts, refinery intake volumes
were 3% higher than in the same period a year ago as result of
improved operating performance. Excluding the impact of hurricane
Isaac in the Gulf of Mexico,
availability was in line with the 94% availability in the third
quarter 2011.
CORPORATE AND NON-CONTROLLING INTEREST
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 2012 2011
Corporate and Non-controlling
(60) (84) (252) interest excl. identified items (239) (204)
Of which:
15 (36) (201) Corporate (51) 39
(75) (48) (51) Non-controlling interest (188) (243)
Corporate and Non-controlling
(60) (84) (305) interest (510) (257)
Third quarter Corporate results and Non-controlling
interest excluding identified items incurred a loss of $60 million compared with a loss of $252 million in the same period last year.
Corporate results excluding identified items compared with the
third quarter 2011 mainly reflected favourable currency exchange
rate effects and higher tax credits. These items were partly offset
by increased net interest expense. In the third quarter 2012
favourable currency exchange rate effects were $77 million compared with adverse currency
exchange rate effects of $270 million
in the same period last year.
FORTHCOMING EVENTS
Fourth quarter 2012 results and fourth quarter 2012 dividend are
scheduled to be announced on January 31,
2013. First quarter 2013 results and first quarter 2013
dividend are scheduled to be announced on May 2, 2013. Second quarter 2013 results and
second quarter 2013 dividend are scheduled to be announced on
August 1, 2013. Third quarter 2013
results and third quarter 2013 dividend are scheduled to be
announced on October 31, 2013.
Unaudited Condensed Consolidated
Interim Financial Statements
CONSOLIDATED STATEMENT OF INCOME
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 %[1] 2012 2011 %
112,118 117,068 123,412 Revenue 349,106 354,596
Share of profit of
equity-accounted
2,367 1,514 2,041 investments 6,821 6,504
944 1,304 504 Interest and other income 3,162 4,261
Total revenue and other
115,429 119,886 125,957 income 359,089 365,361
87,265 95,041 98,094 Purchases 276,375 278,179
Production and
6,513 6,379 6,761 manufacturing expenses 18,941 19,465
Selling, distribution and
3,709 3,459 3,516 administrative expenses 10,857 10,629
311 289 253 Research and development 895 721
713 862 661 Exploration 1,937 1,441
Depreciation, depletion
3,875 3,503 3,803 and amortisation 10,780 9,985
415 411 331 Interest expense 1,378 1,086
12,628 9,942 12,538 +1 Income before taxation 37,926 43,855 -14
5,389 5,874 5,505 Taxation 17,785 19,138
7,239 4,068 7,033 +3 Income for the period 20,141 24,717 -19
Income attributable to
100 5 57 non-controlling interest 220 299
Income attributable to
Royal Dutch Shell plc
7,139 4,063 6,976 +2 shareholders 19,921 24,418 -18
[1] Q3 on Q3 change.
EARNINGS PER SHARE
Quarters $ Nine months
Q3 2012 Q2 2012 Q3 2011 2012 2011
1.14 0.65 1.12 Basic earnings per share 3.19 3.93
1.14 0.65 1.12 Diluted earnings per share 3.18 3.93
SHARES[2]
Quarters Million Nine months
Q3 2012 Q2 2012 Q3 2011 2012 2011
Weighted average number of shares
as the basis for:
6,266.3 6,265.9 6,238.1 Basic earnings per share 6,253.9 6,206.2
6,273.9 6,273.2 6,247.1 Diluted earnings per share 6,261.2 6,216.2
Shares outstanding at the end of
6,284.8 6,266.2 6,236.5 the period 6,284.8 6,236.5
[2] Royal Dutch Shell plc ordinary shares of EUR0.07 each.
Notes 1 to 6 are an integral part of these Condensed
Consolidated Interim Financial Statements.
Consolidated Statement of Comprehensive Income
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 2012 2011
7,239 4,068 7,033 Income for the period 20,141 24,717
Other comprehensive income, net of
tax:
2,424 (2,805) (4,642) Currency translation differences 1,504 (2,018)
Unrealised gains/(losses) on
(97) 70 23 securities (132) 13
(187) 567 (130) Cash flow hedging gains/(losses) (70) (89)
Share of other comprehensive
income/(loss) of equity-accounted
27 39 29 investments (43) 99
Other comprehensive income/(loss)
2,167 (2,129) (4,720) for the period 1,259 (1,995)
9,406 1,939 2,313 Comprehensive income for the period 21,400 22,722
Comprehensive income/(loss)
attributable to non-controlling
132 (36) (46) interest 254 255
Comprehensive income attributable
to Royal Dutch Shell plc
9,274 1,975 2,359 shareholders 21,146 22,467
Notes 1 to 6 are an integral part of these Condensed
Consolidated Interim Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to Royal Dutch
Shell plc shareholders
Shares
Share held in Other Retained Non-controlling Total
$ million capital trust reserves earnings Total interest equity
At January 1,
2012 536 (2,990) 8,984 162,987 169,517 1,486 171,003
Comprehensive
income for the
period - - 1,225 19,921 21,146 254 21,400
Capital
contributions
from and other
changes in
non-controlling
interest - - - 36 36 (76) (40)
Dividends paid - - - (8,194) (8,194) (266) (8,460)
Scrip
dividends[1] 6 - (6) 2,438 2,438 - 2,438
Repurchases of
shares[2] (2) - 2 (1,815) (1,815) - (1,815)
Shares held in
trust: net
sales/
(purchases) and
dividends
received - 782 - 114 896 - 896
Share-based
compensation - - 243 (482) (239) - (239)
At September
30, 2012 540 (2,208) 10,448 175,005 183,785 1,398 185,183
[1] During the first nine months of 2012 some 69.6 million Class A shares,
equivalent to $2.4 billion, were issued under the Scrip Dividend
Programme.
[2] Includes shares committed to repurchase at September 30, 2012.
Equity attributable to Royal Dutch
Shell plc shareholders
Shares
Share held in Other Retained Non-controlling Total
$ million capital trust reserves earnings Total interest equity
At January 1,
2011 529 (2,789) 10,094 140,179 148,013 1,767 149,780
Comprehensive
income for the
period - - (1,951) 24,418 22,467 255 22,722
Capital
contributions
from and other
changes in
non-controlling
interest - - - 48 48 (46) 2
Dividends paid - - - (7,816) (7,816) (374) (8,190)
Scrip
dividends[1] 9 - (9) 2,627 2,627 - 2,627
Repurchases of
shares[2] (3) - 3 (1,501) (1,501) - (1,501)
Shares held in
trust: net
sales/
(purchases) and
dividends
received - 961 - 99 1,060 - 1,060
Share-based
compensation - - (230) (67) (297) - (297)
At September
30, 2011 535 (1,828) 7,907 157,987 164,601 1,602 166,203
[1] During the first nine months of 2011 some 77.3 million Class A shares,
equivalent to $2.6 billion, were issued under the Scrip Dividend
Programme.
[2] Includes shares committed to repurchase and repurchases subject to
settlement at September 30, 2011.
Notes 1 to 6 are an integral part of these Condensed
Consolidated Interim Financial Statements.
CONDENSED CONSOLIDATED balance sheet
$ million
Sept 30, June 30, Sept 30,
2012 2012 2011
Assets
Non-current assets:
Intangible assets 4,478 4,425 4,500
Property, plant and equipment 162,401 155,526 147,027
Equity-accounted investments 39,033 38,424 38,321
Investments in securities 5,492 5,530 3,915
Deferred tax 4,246 4,141 5,512
Prepaid pension costs 12,461 11,542 11,132
Trade and other receivables 10,070 9,467 9,040
238,181 229,055 219,447
Current assets:
Inventories 32,358 28,295 30,250
Trade and other receivables 70,972 71,200 78,529
Cash and cash equivalents 18,839 17,282 19,256
122,169 116,777 128,035
Total assets 360,350 345,832 347,482
Liabilities
Non-current liabilities:
Debt 28,078 28,383 31,092
Trade and other payables 4,322 4,250 5,415
Deferred tax 16,107 15,626 15,814
Retirement benefit obligations 6,169 6,026 5,988
Decommissioning and other
provisions 16,262 15,805 15,442
70,938 70,090 73,751
Current liabilities:
Debt 8,280 4,597 8,268
Trade and other payables 77,550 75,361 80,357
Taxes payable 14,869 14,491 15,305
Retirement benefit obligations 399 403 374
Decommissioning and other
provisions 3,131 2,814 3,224
104,229 97,666 107,528
Total liabilities 175,167 167,756 181,279
Equity attributable to Royal Dutch
Shell plc shareholders 183,785 176,637 164,601
Non-controlling interest 1,398 1,439 1,602
Total equity 185,183 178,076 166,203
Total liabilities and equity 360,350 345,832 347,482
Notes 1 to 6 are an integral part of these Condensed
Consolidated Interim Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters $ million Nine months
Q3 2012 Q2 2012 Q3 2011 2012 2011
Cash flow from operating
activities
7,239 4,068 7,033 Income for the period 20,141 24,717
Adjustment for:
5,385 5,892 5,746 - Current taxation 16,756 17,193
362 358 249 - Interest expense (net) 1,219 889
- Depreciation, depletion and
3,875 3,503 3,803 amortisation 10,780 9,985
(428) (1,193) (347) - Net gains on sale of assets (2,145) (3,335)
- Decrease/(increase) in net
(2,209) 3,836 1,011 working capital 2,397 (5,783)
- Share of profit of
(2,367) (1,514) (2,041) equity-accounted investments (6,821) (6,504)
- Dividends received from
equity-accounted
2,537 2,799 2,402 investments 7,918 6,485
- Deferred taxation and
decommissioning and other
(75) (70) (204) provisions 826 1,927
(205) 261 (540) - Other (352) (399)
Net cash from operating
14,114 17,940 17,112 activities (pre-tax) 50,719 45,175
(4,631) (4,635) (5,467) Taxation paid (14,492) (14,869)
Net cash from operating
9,483 13,305 11,645 activities 36,227 30,306
Cash flow from investing
activities
(8,413) (7,033) (7,261) Capital expenditure (21,902) (16,387)
Investments in equity-accounted
(789) (724) (199) investments (2,811) (1,571)
786 1,675 1,594 Proceeds from sales of assets 4,833 5,815
Proceeds from sales of
56 170 200 equity-accounted investments 283 425
Proceeds from sales/(purchases)
(26) 10 6 of securities (net) (56) 7
47 45 75 Interest received 140 185
Net cash used in investing
(8,339) (5,857) (5,585) activities (19,513) (11,526)
Cash flow from
financing activities
Net (decrease)/increase in debt
with maturity period
507 248 (365) within three months 302 (2,883)
2,551 134 477 Other debt: New borrowings 3,295 1,244
(182) (1,533) (2,529) Repayments (4,682) (4,064)
(352) (339) (173) Interest paid (1,145) (1,195)
Change in non-controlling
(10) (2) (3) interest (2) (3)
Cash dividends paid to:
- Royal Dutch Shell plc
(1,973) (2,112) (1,865) shareholders (5,756) (5,189)
(164) (78) (175) - Non-controlling interest (266) (374)
(149) (890) (817) Repurchases of shares (1,039) (817)
Shares held in trust: net
sales/(purchases) and dividends
(93) (103) 10 received 9 413
Net cash used in financing
135 (4,675) (5,440) activities (9,284) (12,868)
Currency translation
differences relating to cash
and
278 (515) (829) cash equivalents 117 (100)
Increase in cash and cash
1,557 2,258 (209) equivalents 7,547 5,812
Cash and cash equivalents at
17,282 15,024 19,465 beginning of period 11,292 13,444
Cash and cash equivalents at
18,839 17,282 19,256 end of period 18,839 19,256
Notes 1 to 6 are an integral part of these Condensed
Consolidated Interim Financial Statements.
Notes to the Condensed Consolidated
Interim Financial Statements
1. Basis of preparation
These Condensed Consolidated Interim Financial Statements
("Interim Statements") of Royal Dutch Shell plc and its
subsidiaries (collectively "Shell") are prepared in accordance with
IAS 34 'Interim Financial Reporting' as adopted by the European
Union and on the basis of the same accounting principles as, and
should be read in conjunction with, the Annual Report and Form 20-F
for the year ended December 31, 2011
(pages 105 to 110) as filed with the US Securities and Exchange
Commission.
The financial information presented in the Interim Statements
does not constitute statutory accounts within the meaning of
section 434(3) of the Companies Act 2006. Statutory accounts for
the year ended December 31, 2011 were
published in Shell's Annual Report and a copy was delivered to the
Registrar of Companies in England
and Wales. The auditors' report on
those accounts was unqualified, did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying the report and did not contain a statement under
sections 498(2) or (3) of the Companies Act 2006.
The Interim Statements are unaudited; however, in the opinion of
management, the interim data includes all adjustments, consisting
only of normal recurring adjustments, necessary for a fair
statement of the results for the interim period.
Segment information
Segment earnings are presented on a current cost of supplies
basis (CCS earnings). On this basis, the purchase price of volumes
sold during the period is based on the current cost of supplies
during the same period after making allowance for the tax effect.
CCS earnings thus exclude the effect of changes in the oil price on
inventory carrying amounts. Net capital investment information is
presented as measured based on capital expenditure as reported in
the Condensed Consolidated Statement of Cash Flows, adjusted for:
proceeds from divestments; exploration expenses excluding
exploration wells written off; investments in equity-accounted
investments; and leases and other items.
CCS earnings and net capital investment information are the
dominant measures used by the Chief Executive Officer for the
purposes of making decisions about allocating resources and
assessing performance.
2. Information by Business Segment
Quarters $ million Nine months
Q3 2012 Q3 2011 2012 2011
Third-party revenue
10,028 10,888 Upstream 32,066 30,659
102,075 112,516 Downstream 317,000 323,907
15 8 Corporate 40 30
112,118 123,412 Total third-party revenue 349,106 354,596
Inter-segment revenue
12,338 12,929 Upstream 38,337 37,304
172 125 Downstream 555 545
- - Corporate - -
Segment earnings
4,590 6,071 Upstream 15,984 17,890
1,597 1,480 Downstream 4,276 4,533
15 (254) Corporate (285) (14)
6,202 7,297 Total segment earnings 19,975 22,409
Quarters $ million Nine months
Q3 2012 Q3 2011 2012 2011
6,202 7,297 Total segment earnings 19,975 22,409
Current cost of supplies adjustment:
1,130 (260) Purchases 160 2,787
(294) 75 Taxation (51) (794)
Share of profit of equity-accounted
201 (79) investments 57 315
7,239 7,033 Income for the period 20,141 24,717
3. Share capital
Issued and fully paid
Sterling
shares of EUR0.07 each deferred
shares of GBP1
Number of shares Class A Class B each
At January 1, 2012 3,668,550,437 2,661,403,172 50,000
Scrip dividends 69,588,598 - -
Repurchases of shares - (30,728,970) -
At September 30, 2012 3,738,139,035 2,630,674,202 50,000
Nominal value
$ million Class A Class B Total
At January 1, 2012 312 224 536
Scrip dividends 6 - 6
Repurchases of shares - (2) (2)
At September 30, 2012 318 222 540
The total nominal value of sterling deferred shares is less than $1
million.
At Royal Dutch Shell plc's Annual General Meeting on
May 22, 2012, the Board was
authorised to allot ordinary shares in Royal Dutch Shell plc and
grant rights to subscribe for or to convert any security into
ordinary shares in Royal Dutch Shell plc up to an aggregate nominal
amount of €147 million (representing 2,100 million ordinary shares
of €0.07 each), and to list such shares or rights on any stock
exchange. This authority expires at the earlier of August 22, 2013, and the conclusion of the Annual
General Meeting to be held in 2013, unless previously renewed,
revoked or varied in a General Meeting of Shareholders.
4. Other reserves
Accumulated
Share Capital Share other
Merger premium redemption plan comprehensive
$ million reserve[1] reserve[1] reserve[2] reserve income Total
At January 1,
2012 3,432 154 60 1,571 3,767 8,984
Other
comprehensive
income
attributable
to Royal
Dutch Shell
plc
shareholders - - - - 1,225 1,225
Scrip
dividends (6) - - - - (6)
Repurchases
of shares - - 2 - - 2
Share-based
compensation - - - 243 - 243
At September
30, 2012 3,426 154 62 1,814 4,992 10,448
At January 1,
2011 3,442 154 57 1,483 4,958 10,094
Other
comprehensive
loss
attributable
to Royal
Dutch Shell
plc
shareholders - - - - (1,951) (1,951)
Scrip
dividends (9) - - - - (9)
Repurchases
of shares - - 3 - - 3
Share-based
compensation - - - (230) - (230)
At September
30, 2011 3,433 154 60 1,253 3,007 7,907
[1] The merger reserve and share premium reserve were established as a
consequence of Royal Dutch Shell plc becoming the single parent
company of Royal Dutch Petroleum Company and of The "Shell" Transport
and Trading Company plc, now The Shell Transport and Trading Company
Limited, in 2005.
[2] The capital redemption reserve was established in connection with
repurchases of shares of Royal Dutch Shell plc.
5. Impacts of accounting for
derivatives
In the ordinary course of business Shell enters into contracts
to supply or purchase oil and gas products, and also enters into
derivative contracts to mitigate resulting economic exposures
(generally price exposure). Derivative contracts are carried at
period-end market price (fair value), with movements in fair value
recognised in income for the period. Supply and purchase contracts
entered into for operational purposes are, by contrast, recognised
when the transaction occurs (see also below); furthermore,
inventory is carried at historical cost or net realisable value,
whichever is lower.
As a consequence, accounting mismatches occur because: (a) the
supply or purchase transaction is recognised in a different period;
or (b) the inventory is measured on a different basis.
In addition, certain UK gas contracts held by Upstream are, due
to pricing or delivery conditions, deemed to contain embedded
derivatives or written options and are also required to be carried
at fair value even though they are entered into for operational
purposes.
The accounting impacts of the aforementioned are reported as
identified items in the quarterly results.
6. Return on average capital
employed
Return on average capital employed measures the efficiency of
Shell's utilisation of the capital that it employs and is a common
measure of business performance. In this calculation, return on
average capital employed is defined as the sum of income for the
current and previous three quarters adjusted for after-tax interest
expense as a percentage of the average capital employed for the
same period. Capital employed consists of total equity, current
debt and non-current debt. The tax rate is derived from
calculations at the published segment level.
LIQUIDITY AND CAPITAL RESOURCES
Third quarter Net cash from operating activities in the
third quarter 2012 was $9.5 billion
compared with $11.6 billion for the
same period last year.
Total current and non-current debt increased to $36.4 billion at September
30, 2012 from $33.0 billion at
June 30, 2012 while cash and cash
equivalents increased to $18.8
billion at September 30, 2012,
from $17.3 billion at June 30, 2012. During the third quarter 2012
Shell issued $2.5 billion of debt
under the US universal shelf registration. No new debt was issued
under the euro medium-term note programme.
Net capital investment in the third quarter 2012 was
$8.0 billion, of which $6.9 billion was in Upstream and $1.1 billion in Downstream. Net capital
investment in the same period of 2011 was $6.1 billion, of which $5.9 billion was in Upstream and $0.2 billion in Downstream.
Dividends of $0.43 per share are
announced on November 1, 2012 in
respect of the third quarter. These dividends are payable on
December 20, 2012. In the case of the
Class B shares, the dividends will be payable through the dividend
access mechanism and are expected to be treated as UK-source rather
than Dutch-source. See the Annual Report and Form 20-F for the year
ended December 31, 2011 for
additional information on the dividend access mechanism.
Shell provides shareholders with a choice to receive dividends
in cash or in shares via a Scrip Dividend Programme. Under the
Scrip Dividend Programme shareholders can increase their
shareholding in Shell by choosing to receive new shares instead of
cash dividends. Only new Class A shares will be issued under the
Programme, including to shareholders who currently hold Class B
shares.
Nine months Net cash from operating activities in the
first nine months of 2012 was $36.2
billion compared with $30.3
billion for the same period last year.
Total current and non-current debt decreased to $36.4 billion at September
30, 2012 from $37.2 billion at
December 31, 2011 while cash and cash
equivalents increased to $18.8
billion at September 30, 2012,
from $11.3 billion at December 31, 2011. During the first nine months
of 2012 Shell issued $2.5 billion of
debt under the US universal shelf registration. No new debt was
issued under the euro medium-term note programme.
Net capital investment in the first nine months of 2012 was
$18.9 billion, of which $16.0 billion was in Upstream, $2.8 billion in Downstream and $0.1 billion in Corporate. Net capital investment
in the same period of 2011 was $13.8
billion, of which $11.7
billion was in Upstream, $2.0
billion in Downstream and $0.1
billion in Corporate.
CAUTIONARY STATEMENT
All amounts shown throughout this Report are unaudited.
The companies in which Royal Dutch Shell plc directly and
indirectly owns investments are separate entities. In this document
"Shell", "Shell Group" and "Royal Dutch Shell" are sometimes used
for convenience where references are made to Royal Dutch Shell plc
and its subsidiaries in general. Likewise, the words "we", "us" and
"our" are also used to refer to subsidiaries in general or to those
who work for them. These expressions are also used where no useful
purpose is served by identifying the particular company or
companies. "Subsidiaries", "Shell subsidiaries" and "Shell
companies" as used in this document refer to companies in which
Royal Dutch Shell either directly or indirectly has control, by
having either a majority of the voting rights or the right to
exercise a controlling influence. The companies in which Shell has
significant influence but not control are referred to as
"associated companies" or "associates" and companies in which Shell
has joint control are referred to as "jointly controlled entities".
In this document, associates and jointly controlled entities are
also referred to as "equity-accounted investments". The term "Shell
interest" is used for convenience to indicate the direct and/or
indirect (for example, through our 23 per cent shareholding in
Woodside Petroleum Ltd.) ownership interest held by Shell in a
venture, partnership or company, after exclusion of all third-party
interest.
This document contains forward-looking statements concerning the
financial condition, results of operations and businesses of Royal
Dutch Shell. All statements other than statements of historical
fact are, or may be deemed to be, forward-looking statements.
Forward-looking statements are statements of future expectations
that are based on management's current expectations and assumptions
and involve known and unknown risks and uncertainties that could
cause actual results, performance or events to differ materially
from those expressed or implied in these statements.
Forward-looking statements include, among other things, statements
concerning the potential exposure of Shell and the Shell Group to
market risks and statements expressing management's expectations,
beliefs, estimates, forecasts, projections and assumptions. These
forward-looking statements are identified by their use of terms and
phrases such as "anticipate", "believe", "could", "estimate",
"expect", "goals", "intend", "may", "objectives", "outlook",
"plan", "probably", "project", "risks", "seek", "should", "target",
"will" and similar terms and phrases. There are a number of factors
that could affect the future operations of Shell and the Shell
Group and could cause those results to differ materially from those
expressed in the forward-looking statements included in this
document, including (without limitation): (a) price fluctuations in
crude oil and natural gas; (b) changes in demand for Shell's
products; (c) currency fluctuations; (d) drilling and production
results; (e) reserves estimates; (f) loss of market share and
industry competition; (g) environmental and physical risks; (h)
risks associated with the identification of suitable potential
acquisition properties and targets, and successful negotiation and
completion of such transactions; (i) the risk of doing business in
developing countries and countries subject to international
sanctions; (j) legislative, fiscal and regulatory developments
including regulatory measures addressing climate change; (k)
economic and financial market conditions in various countries and
regions; (l) political risks, including the risks of expropriation
and renegotiation of the terms of contracts with governmental
entities, delays or advancements in the approval of projects and
delays in the reimbursement for shared costs; and (m) changes in
trading conditions. All forward-looking statements contained in
this document are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section.
Readers should not place undue reliance on forward-looking
statements. Additional factors that may affect future results are
contained in Shell's Annual Report and Form 20-F for the year ended
December 31, 2011 (available at http://www.shell.com/investor and
http://www.sec.gov ). These factors also should be considered by
the reader. Each forward-looking statement speaks only as of the
date of this document, November 1, 2012. Neither Shell nor any of
its subsidiaries nor the Shell Group undertake any obligation to
publicly update or revise any forward-looking statement as a result
of new information, future events or other information. In light of
these risks, results could differ materially from those stated,
implied or inferred from the forward-looking statements contained
in this document.
We may have used certain terms, such as resources, in this
report that United States Securities and Exchange Commission (SEC)
strictly prohibits us from including in our filings with the SEC.
U.S. Investors are urged to consider closely the disclosure in our
Form 20-F, File No 1-32575, available on the SEC website
http://www.sec.gov. You can also obtain these forms from the SEC by
calling 1-800-SEC-0330.
November 1, 2012
Contacts:
- Investor Relations: Europe: +31(0)70-377-4540; USA: +1-713-241-1042
- Media: Europe:
+31(0)70-377-3600
SOURCE Royal Dutch Shell plc