THE HAGUE, The Netherlands,
May 2, 2013 /PRNewswire/ --
Royal Dutch Shell's first quarter 2013
earnings, on a current cost of supplies (CCS) basis (see Note 1),
were $8.0 billion compared with
$7.7 billion for the first quarter
2012.
First quarter 2013 CCS earnings
excluding identified items (see page 6) were $7.5 billion compared with $7.3 billion for the first quarter 2012, an
increase of 3%.
Basic CCS earnings per share excluding
identified items for the first quarter 2013 increased by 2% versus
the same quarter a year ago.
Cash flow from operating activities
for the first quarter 2013 was $11.6
billion. Excluding working capital movements, cash flow from
operating activities for the first quarter 2013 was $11.5 billion.
Capital investment for the first
quarter 2013 was $8.8 billion. Net
capital investment (see Note 1) for the quarter was $8.2 billion.
Total dividends distributed in the
quarter were some $2.7 billion, of
which $0.8 billion were settled under
the Scrip Dividend Programme. During the first quarter some 16.1
million shares were bought back for cancellation for a
consideration of some $0.5
billion.
Gearing at the end of the first
quarter 2013 was 9.1%.
A first quarter 2013 dividend has been
announced of $0.45 per ordinary share
and $0.90 per American Depositary
Share ("ADS"), an increase of 5% compared with the first quarter
2012.
Comparative information in this Report
has been restated following the adoption of revised IAS 19 Employee
Benefits on January 1, 2013, with
retrospective effect (see Note 2). Comparative information was not
restated for other accounting policy changes (see Note 1) for which
the impacts are not significant, including the adoption of IFRS 11
Joint Arrangements on January 1,
2013, which results in certain previously equity-accounted
entities now in effect being proportionately consolidated.
Summary OF unaudited results
$ million Quarters
Q1 2013 Q4 2012[1] Q1 2012[1] %[2]
Income attributable to shareholders 8,176 6,728 8,737 -6
Current cost of supplies (CCS)
adjustment for Downstream (225) 623 (1,060)
CCS earnings 7,951 7,351 7,677 +4
Less: Identified items[3] 431 1,712 380
CCS earnings excluding identified items 7,520 5,639 7,297 +3
Of which:
Upstream 5,648 4,401 6,270
Downstream 1,848 1,190 1,122
Corporate and Non-controlling interest 24 48 (95)
Cash flow from operating activities 11,559 9,913 13,439 -14
Basic CCS earnings per share ($) 1.26 1.17 1.23 +2
Basic CCS earnings per ADS ($) 2.52 2.34 2.46
Basic CCS earnings per share excl.
identified items ($) 1.19 0.90 1.17 +2
Basic CCS earnings per ADS excl.
identified items ($) 2.38 1.80 2.34
Dividend per share ($) 0.45 0.43 0.43 +5
Dividend per ADS ($) 0.90 0.86 0.86
[1] Restated for accounting policy change (see Note 2)
[2] Q1 on Q1 change
[3] See page 6
Royal Dutch Shell Chief Executive Officer Peter Voser commented:
"Our industry continues to see significant energy price
volatility as a result of economic and political developments. Oil
prices have fallen recently but Shell is implementing a long-term,
competitive and innovative strategy against this volatile
backdrop."
"Shell's underlying CCS earnings were $7.5 billion for the quarter, a 2% increase in
CCS earnings per share from the first quarter of 2012. These
results were underpinned by Shell's growth projects, an improvement
in downstream profitability, and were delivered despite a difficult
security environment in Nigeria."
"Our profits pay for Shell's dividends and investment in new
projects to ensure affordable and reliable energy supplies for our
customers, and to add value for our shareholders."
"Shell is investing for profitable growth, whilst maintaining
strong capital discipline. We are developing some 30 new projects
and maturing a series of further opportunities for investment. So
far this year, we've seen the growth impact of recent start ups and
we took four final investment decisions in petrochemicals,
deepwater, and LNG."
"We continue to take a dynamic approach to portfolio" continued
Voser. "Asset sales - $0.6 billion in
the first quarter and over $21
billion in the last three years - improve our capital
efficiency and can bring in strategic partners. We use selective
acquisitions to refresh our opportunity set."
Voser commented "We distributed $11
billion of dividends over the last year, the highest in our
industry, and today we confirm a 5% rise in our dividend to
$0.45 per share."
He concluded "Dividends are Shell's main route for returning
cash to shareholders. Our improving cash flow also enables us to
accelerate our share buyback programme, this year so far we have
repurchased some $1.2 billion of
shares by the end of April. In the current environment we would
expect to more than offset the scrip dividend issue this year, and
we are determined to implement the policy to offset dilution over
the business cycle. This underlines our commitment to shareholder
returns."
First quarter 2013 portfolio developments
Upstream
In Canada, the first
debottlenecking project for the Athabasca Oil Sands Project (Shell
interest 60%) was completed. The project is expected to add some 10
thousand barrels per day ("b/d") of capacity.
In Nigeria, Shell took
the final investment decision for the development of the deep-water
project Erha North Phase 2 (Shell interest 44%), part of oil
mining lease 133, located over 100 kilometres off the Nigerian
coast. The project is expected to produce some 60 thousand barrels
of oil equivalent per day ("boe/d") of mainly oil at peak
production and improve utilisation of the existing Erha floating
production, storage and offloading ("FPSO") vessel.
In Oman, the Amal Steam
enhanced oil recovery project (Shell interest 34%) was brought on
stream. The project is expected to ramp up over a number of years
and produce some 20 thousand b/d of oil at peak production.
Shell entered into an agreement to acquire part of Repsol S.A.'s
LNG portfolio outside of North
America, including supply positions in Peru and Trinidad & Tobago, for a cash
consideration of $4.4 billion. Under
the terms of the agreement, Shell will assume finance lease
obligations of the businesses acquired, predominantly reflecting
leases for LNG ship charters, provisionally estimated at
$1.8 billion. The acquisition is
expected to add some 7.2 million tonnes per annum ("mtpa") of LNG
volumes through long-term offtake agreements, including 4.2 mtpa of
equity LNG plant capacity. The transaction, which has an effective
date of October 1, 2012, is expected
to close in the second half of 2013 or early 2014, subject to
regulatory approvals and other conditions precedent.
In the United Kingdom,
Shell completed the acquisition of an additional 5.9% interest in
the offshore Schiehallion field, increasing Shell's interest to
55%. Shell also completed the acquisition of additional interests
in the Beryl area fields and SAGE infrastructure, lifting Shell's
production in the Beryl area fields from 9 thousand boe/d to 20
thousand boe/d. Further investment in Schiehallion and Beryl is
expected to extend the production life of the fields.
In the United States, Shell and
Kinder Morgan affiliates announced
their intent to form a company to develop a natural gas
liquefaction plant in two phases at the existing Elba Island LNG
terminal to export LNG. The total project is expected to have a
liquefaction capacity of approximately 2.5 mtpa. Shell will own 49%
of the entity and subscribe to 100% of the liquefaction capacity.
The agreement is subject to corporate and regulatory approvals.
In North America, Shell took
the final investment decision for two 0.25 mtpa natural gas
liquefaction units (Shell interest 100%) in Louisiana, United
States and Ontario, Canada.
These units will form the basis of two new LNG transport corridors
in the Gulf Coast and Great Lakes regions, fuelling marine vessels
and heavy-duty trucking fleets.
Upstream divestment proceeds totalled some $0.4 billion for the first quarter 2013 and
included proceeds from the divestment of a 5% interest in the
Prelude floating LNG project to CPC Corporation as announced in
2012, reducing Shell's interest in the project to 67.5%.
During the first quarter 2013, Shell participated in the Kentish
Knock South-1 gas discovery (Shell interest 50%)
offshore Western Australia. As
part of its global exploration programme Shell added new
acreage positions during the first quarter 2013, including
liquids-rich acreage positions in Canada, offshore positions in Norway and the United Kingdom North Sea, along
with successful bidding results in the Gulf of Mexico, United States. Shell also signed a production
sharing contract ("PSC") for tight gas in the Yuzivska area in the
Ukraine and, in China, Shell received government approval for
the tight gas PSC for the Fushun-Yongchuan block in the
Sichuan basin.
Downstream
In Singapore, Shell
announced the final investment decisions for additional capacity at
its Jurong Island petrochemicals facility. The investments (Shell
interest 100%) are expected to add 140 thousand tonnes per annum
("tpa") of high-purity ethylene oxide capacity, 140 thousand tpa of
ethoxylation capacity and more than 100 thousand tpa of polyols
capacity.
Downstream divestment proceeds totalled some $0.1 billion for the first quarter 2013 and
included proceeds from the divestment of Shell's interest in a
pipeline business in the United
States, Shell's LPG business in Vietnam and the majority of Shell's
shareholding in its downstream business in Uganda.
In April, Shell announced that its 120 thousand b/d Geelong
refinery in Australia is
for sale and that it is considering the sale of selected downstream
marketing businesses in Italy.
Also in April, Shell finalised an agreement with TravelCenters
of America in the United
States to develop a nationwide network of LNG fuelling
centres for heavy-duty road transport customers at up to 100
existing sites.
Key features of the FIRST quarter
2013
First quarter 2013 CCS earnings (see
Note 1) were $7,951 million, 4%
higher than for the same quarter a year ago.
First quarter 2013 CCS earnings
excluding identified items (see page 6) were $7,520 million compared with $7,297 million for the first quarter 2012, an
increase of 3%.
Basic CCS earnings per share increased
by 2% versus the same quarter a year ago.
Basic CCS earnings per share excluding
identified items increased by 2% compared with the first quarter
2012.
Cash flow from operating activities
for the first quarter 2013 was $11.6
billion, compared with $13.4
billion in the same quarter last year. Excluding working
capital movements, cash flow from operating activities for the
first quarter 2013 was $11.5 billion,
compared with $12.7 billion in the
same quarter last year.
Net capital investment (see Note 1)
for the first quarter 2013 was $8.2
billion. Capital investment for the first quarter 2013 was
$8.8 billion and divestment proceeds
were $0.6 billion.
Total dividends distributed in the
first quarter 2013 were some $2.7
billion of which $0.8 billion
were settled by issuing some 25.6 million A shares under the Scrip
Dividend Programme for the fourth quarter 2012.
Under our share buyback programme some
16.1 million B shares were bought back for cancellation during the
first quarter 2013 for a consideration of some $0.5 billion.
Return on average capital employed
(see Note 9) on a reported income basis was 13.0% at the end of the
first quarter 2013.
Gearing was 9.1% at the end of the
first quarter 2013 versus 10.5% at the end of the first quarter
2012 (see Note 2).
Oil and gas production for the first
quarter 2013 was 3,559 thousand boe/d. Excluding the impact of
divestments, PSC price effects and security impacts onshore
Nigeria, first quarter 2013
production was 2% higher than in the same period last year.
Equity LNG sales volumes of 5.15
million tonnes for the first quarter 2013 were broadly similar to
the same quarter a year ago.
Oil products sales volumes were 1%
higher than for the first quarter 2012. Chemicals sales volumes for
the first quarter 2013 decreased by 11% compared with the same
quarter a year ago.
Supplementary financial and
operational disclosure for the first quarter 2013 is available at
http://www.shell.com/investor.
Summary of identified items
Earnings for the first quarter 2013 reflected the following
items, which in aggregate amounted to a net gain
of $431 million (compared with a net
gain of $380 million in the first
quarter 2012), as summarised in the table below:
Upstream earnings included a net gain
of $173 million, mainly reflecting
the revaluation of a deferred tax asset of $199 million and net divestment gains of
$107 million, both predominantly
related to Australia, partly
offset by the net impact of fair value accounting of commodity
derivatives and certain gas contracts of $103 million. Earnings for the first quarter 2012
included a net gain of $453
million.
Downstream earnings included a net
charge of $160 million, mainly
reflecting impairments of $155
million, predominantly in Australia, and the net impact of fair value
accounting of commodity derivatives of $30
million, partly offset by net divestment gains of
$24 million. Earnings for the first
quarter 2012 included a net gain of $198
million.
Corporate and Non-controlling interest
earnings included a net gain of $418
million, mainly reflecting a tax credit of $407 million related to prior years. Earnings for
the first quarter 2012 included a net charge of $271 million.
Summary OF IDENTIFIED ITEMS
$ million Quarters
Q1 2013 Q4 2012 Q1 2012
Segment earnings impact of identified items:
Upstream 173 1,801 453
Downstream (160) (89) 198
Corporate and Non-controlling interest 418 - (271)
Earnings impact 431 1,712 380
These identified items are shown to provide additional insight
into segment earnings and income attributable to shareholders. From
the first quarter 2013 onwards, identified items include the full
impact on Shell's CCS earnings of the following items:
Divestment gains and losses
Impairments
Fair value accounting of commodity
derivatives and certain gas contracts (see Note 8)
Redundancy and restructuring
Further items may be identified in addition to the above. Prior
period comparatives have not been restated.
Earnings BY BUSINESS segment
upstream
$ million Quarters
Q1 2013 Q4 2012 Q1 2012 %[2]
Upstream earnings excluding identified
items[1] 5,648 4,401 6,270 -10
Upstream earnings[1] 5,821 6,202 6,723 -13
Upstream cash flow from operating activities 9,705 6,165 8,788 +10
Upstream net capital investment 7,370 9,323 3,772 +95
Liquids production available for sale
(thousand b/d) 1,640 1,640 1,682 -2
Natural gas production available for sale
(million scf/d) 11,132 10,288 10,844 +3
Total production available for sale (thousand
boe/d) 3,559 3,414 3,552 -
Equity LNG sales volumes (million tonnes) 5.15 5.49 5.17 -
[1] Fourth quarter 2012 and first quarter 2012 comparatives restated
for accounting policy change (see Note 2).
[2] Q1 on Q1 change
First quarter Upstream earnings excluding identified items were
$5,648 million compared with
$6,270 million
a year ago. Identified items were a net gain of $173 million, compared with a net gain of
$453 million for
the first quarter 2012 (see page 6).
Compared with the first quarter 2012, Upstream earnings
excluding identified items benefited from the ramp-up of Pearl GTL,
increased trading contributions, higher gas realisations and tax
credits. These items were more than offset by lower liquids
realisations, higher depreciation, increased operating and
exploration expenses, as well as lower earnings from LNG
ventures.
Global liquids realisations were 7% lower than for the first
quarter 2012. In Canada, synthetic
crude oil realisations were 8% lower than for the same period last
year. Global natural gas realisations were 8% higher than for the
same quarter a year ago, with a 19% increase in the Americas and a
6% increase outside the Americas.
First quarter 2013 production was 3,559 thousand boe/d compared
with 3,552 thousand boe/d a year ago. Liquids production decreased
by 2% and natural gas production increased by 3% compared with the
first quarter 2012. Excluding the impact of divestments, PSC price
effects and security impacts onshore Nigeria, first quarter 2013 production was 2%
higher than for the same period last year.
New field start-ups and the continuing ramp-up of fields, in
particular Pearl GTL in Qatar,
Eagle Ford in the United States
and Pluto LNG in Australia,
contributed some 175 thousand boe/d to production for the first
quarter 2013, which more than offset the impact of field
declines.
Equity LNG sales volumes of 5.15 million tonnes were broadly
similar compared with the same quarter a year ago, reflecting the
contribution from Pluto LNG, which was offset by lower volumes from
Nigeria LNG due to reduced feedgas supply.
DOWNSTREAM
$ million Quarters
Q1 2013 Q4 2012 Q1 2012 %[2]
Downstream CCS earnings excluding identified
items[1] 1,848 1,190 1,122 +65
Downstream CCS earnings[1] 1,688 1,101 1,320 +28
Downstream cash flow from operating
activities 365 4,303 3,208 -89
Downstream net capital investment 820 1,471 786 +4
Refinery processing intake (thousand b/d) 2,890 2,804 2,782 +4
Oil products sales volumes (thousand b/d) 6,004 6,367 5,960 +1
Chemicals sales volumes (thousand tonnes) 4,143 4,620 4,679 -11
[1] Fourth quarter 2012 and first quarter 2012 comparatives restated
for accounting policy change (see Note 2).
[2] Q1 on Q1 change
First quarter Downstream earnings excluding identified items
were $1,848 million compared with
$1,122 million for the first quarter
2012. Identified items were a net charge of $160 million, compared with a net gain of
$198 million for the first quarter
2012 (see page 6).
Compared with the first quarter 2012, Downstream earnings
excluding identified items benefited from higher realised refining
margins, reflecting the industry environment and Shell's operating
performance, as well as increased contributions from trading and
marketing. Chemicals earnings were higher as a result of improved
realised margins. Adverse currency exchange rate effects, increased
depreciation and higher taxation impacted Downstream earnings.
Oil products sales volumes increased by 1% compared with the
same period a year ago, as a result of higher trading volumes and
an accounting policy change (see Note 1b), partly offset by lower
marketing volumes.
Chemicals sales volumes decreased by 11% compared with the same
quarter last year, mainly as a result of an
accounting policy change (see Note 1b) and lower trading volumes.
Chemicals manufacturing plant availability decreased to 92% from
94% for the first quarter 2012, as a result of higher planned
maintenance.
Refinery intake volumes were 4% higher compared with the same
quarter last year, mainly as a result of an accounting policy
change (see Note 1b). Refinery availability decreased to 91% from
94% for the first quarter 2012, as a result of higher planned
maintenance.
CORPORATE AND Non-controlling interest
$ million Quarters
Q1 2013 Q4 2012 Q1 2012
Corporate and Non-controlling interest excluding
identified items[1] 24 48 (95)
Of which:
Corporate[1] 88 82 (30)
Non-controlling interest (64) (34) (65)
Corporate and Non-controlling interest[1] 442 48 (366)
[1] Fourth quarter 2012 and first quarter 2012 comparatives restated
for accounting policy change (see Note 2).
First quarter Corporate results and Non-controlling interest
excluding identified items were $24
million, compared with a loss of $95
million in the same period last year. Identified items for
the first quarter of 2013 were a net gain of $418 million, compared with a net charge of
$271 million for the first quarter of
2012 (see page 6).
Compared with the first quarter of 2012, Corporate results
excluding identified items reflected lower net interest expense and
higher tax credits. In the first quarter 2013, adverse currency
exchange rate effects impacted earnings by $20 million, compared with favourable currency
exchange rate effects of $185 million
in the same period last year.
FORTHCOMING EVENTS
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. The Annual General Meeting will
be held on May 21, 2013.
UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
CONSOLIDATED Statement of income
$ million Quarters
Q4 2012 Q1 2012
Q1 2013 Restated[1] Restated[1] %[2]
Revenue 112,810 118,047 119,920
Share of profit of equity-accounted
investments 2,303 2,127 2,940
Interest and other income 401 2,437 914
Total revenue and other income 115,514 122,611 123,774
Purchases 86,603 93,350 94,069
Production and manufacturing expenses 6,458 7,319 6,038
Selling, distribution and
administrative expenses 3,587 3,698 3,659
Research and development 294 416 294
Exploration 648 1,167 362
Depreciation, depletion and
amortisation 4,225 3,835 3,402
Interest expense 401 379 552
Income before taxation 13,298 12,447 15,398 -14
Taxation 5,072 5,691 6,546
Income for the period 8,226 6,756 8,852 -7
Income attributable to
non-controlling interest 50 28 115
Income attributable to Royal Dutch
Shell plc shareholders 8,176 6,728 8,737 -6
[1] Restated for accounting policy change (see Note 2).
[2] Q1 on Q1 change.
earnings per share
$ Quarters
Q4 2012 Q1 2012
Q1 2013 Restated[1] Restated[1]
Basic earnings per share 1.30 1.07 1.40
Diluted earnings per share 1.29 1.07 1.40
[1] Restated for accounting policy change (see Note 2).
SHARES[1]
Million Quarters
Q1 2013 Q4 2012 Q1 2012
Weighted average number of shares as the basis
for:
Basic earnings per share 6,308.9 6,282.8 6,229.4
Diluted earnings per share 6,313.7 6,289.2 6,239.1
Shares outstanding at the end of the period 6,340.2 6,305.9 6,273.8
[1] Royal Dutch Shell plc ordinary shares of EUR0.07 each.
Notes 1 to 7 are an integral part
of these Condensed Consolidated Interim Financial Statements
Consolidated Statement of Comprehensive Income
$ million Quarters
Q4 2012 Q1 2012
Q1 2013 Restated[1] Restated[1]
Income for the period 8,226 6,756 8,852
Other comprehensive income:
Items that may be reclassified to income
in later periods:
- Currency translation differences (1,652) 36 1,625
- Unrealised gains/(losses) on securities 31 (683) (105)
- Cash flow hedging gains/(losses) 13 101 (450)
- Share of other comprehensive loss of
equity-accounted investments (56) (179) (109)
Total (1,664) (725) 961
Items that are not reclassified to income
in later periods:
- Retirement benefits remeasurements 1,436 (2,500) (29)
Total 1,436 (2,500) (29)
Other comprehensive income/(loss) for the
period (228) (3,225) 932
Comprehensive income for the period 7,998 3,531 9,784
Comprehensive income attributable to
non-controlling interest 25 46 158
Comprehensive income attributable to Royal
Dutch Shell plc shareholders 7,973 3,485 9,626
[1] Restated for accounting policy change (see Note 2).
Notes 1 to 7 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,
2013[1] 542 (2,287) (3,752) 180,246 174,749 1,433 176,182
Comprehensive
income
for the period - - (203) 8,176 7,973 25 7,998
Capital
contributions
from, and other
changes
in,
non-controlling
interest - - - - - (4) (4)
Dividends paid - - - (2,752) (2,752) (21) (2,773)
Scrip
dividends[2] 2 - (2) 844 844 - 844
Repurchases of
shares[3] (1) - 1 (1,104) (1,104) - (1,104)
Shares held in
trust:
net
sales/(purchases)
and dividends
received - 1,030 - 36 1,066 - 1,066
Share-based
compensation - - (603) (367) (970) - (970)
At March 31, 2013 543 (1,257) (4,559) 185,079 179,806 1,433 181,239
At January 1,
2012[1] 536 (2,990) (1,961) 162,895 158,480 1,486 159,966
Comprehensive
income for the
period[1] - - 889 8,737 9,626 158 9,784
Capital
contributions
from, and other
changes
in,
non-controlling
interest - - - 48 48 (75) (27)
Dividends paid - - - (2,670) (2,670) (24) (2,694)
Scrip
dividends[2] 3 - (3) 999 999 - 999
Repurchases of
shares[3] - - - (627) (627) (627)
Shares held in
trust:
net
sales/(purchases)
and dividends
received - 1,013 - 44 1,057 - 1,057
Share-based
compensation - - (135) (439) (574) - (574)
At March 31,
2012[1] 539 (1,977) (1,210) 168,987 166,339 1,545 167,884
[1] Restated for accounting policy change (see Note 2).
[2] Under the Scrip Dividend Programme some 25.6 million A shares,
equivalent to $0.8 billion, were issued during the first quarter 2013 and
some 27.5 million A shares, equivalent to $1.0 billion, were issued during
the first quarter 2012.
[3] Includes shares committed to repurchase and repurchases subject to
settlement at the end of the quarter.
Notes 1 to 7 are an integral part of these Condensed
Consolidated Interim Financial Statements
CONDENSED CONSOLIDATED balance sheet
$ million
Dec 31, 2012 March 31, 2012
March 31, 2013 Restated[1] Restated[1]
Assets
Non-current assets:
Intangible assets 4,456 4,470 4,545
Property, plant and equipment 180,244 172,293 155,239
Equity-accounted investments 34,478 38,350 39,534
Investments in securities 4,878 4,867 5,454
Deferred tax 4,641 4,288 4,874
Retirement benefits 3,502 2,301 3,624
Trade and other receivables 9,052 8,991 10,061
241,251 235,560 223,331
Current assets:
Inventories 31,531 30,781 34,163
Trade and other receivables 66,598 65,403 78,798
Cash and cash equivalents 17,614 18,550 15,024
115,743 114,734 127,985
Total assets 356,994 350,294 351,316
Liabilities
Non-current liabilities:
Debt 27,329 29,921 29,116
Trade and other payables 4,170 4,175 4,542
Deferred tax 11,490 10,312 11,289
Retirement benefits 15,091 15,290 13,986
Decommissioning and other
provisions 18,054 17,435 16,010
76,134 77,133 74,943
Current liabilities:
Debt 8,461 7,833 5,657
Trade and other payables 73,301 72,839 85,360
Taxes payable 14,386 12,684 14,113
Retirement benefits 376 402 408
Decommissioning and other
provisions 3,097 3,221 2,951
99,621 96,979 108,489
Total liabilities 175,755 174,112 183,432
Equity attributable to Royal
Dutch Shell plc shareholders 179,806 174,749 166,339
Non-controlling interest 1,433 1,433 1,545
Total equity 181,239 176,182 167,884
Total liabilities and equity 356,994 350,294 351,316
[1] Restated for accounting policy change (see Note 2).
Notes 1 to 7 are an integral part of these Condensed
Consolidated Interim Financial Statements
CONDENSED CONSOLIDATED statement of cash flows
$ million Quarters
Q4 2012 Q1 2012
Q1 2013 Restated[1] Restated[1]
Cash flow from operating activities
Income for the period 8,226 6,756 8,852
Adjustment for:
- Current taxation 4,892 5,966 5,479
- Interest expense (net) 357 324 499
- Depreciation, depletion and
amortisation 4,225 3,835 3,402
- Net gains on sale of assets (213) (2,083) (524)
- Decrease in working capital 34 994 770
- Share of profit of equity-accounted
investments (2,303) (2,127) (2,940)
- Dividends received from
equity-accounted investments 1,242 2,655 2,582
- Deferred taxation, retirement benefits,
decommissioning and
other provisions (11) (422) 953
- Other 27 553 (408)
Net cash from operating activities
(pre-tax) 16,476 16,451 18,665
Taxation paid (4,917) (6,538) (5,226)
Net cash from operating activities 11,559 9,913 13,439
Cash flow from investing activities
Capital expenditure (7,862) (10,674) (6,456)
Investments in equity-accounted
investments (372) (217) (1,298)
Proceeds from sales of assets 382 1,513 2,372
Proceeds from sales of equity-accounted
investments 154 415 57
Proceeds from sales/(purchases) of
securities (net) 20 (30) (40)
Interest received 36 53 48
Net cash used in investing activities (7,642) (8,940) (5,317)
Cash flow from financing activities
Net (decrease)/increase in debt with
maturity period
within three months 133 (467) (453)
Other debt: New borrowings 180 1,813 610
Repayments (2,185) (278) (2,967)
Interest paid (158) (283) (454)
Change in non-controlling interest (7) 25 10
Cash dividends paid to:
- Royal Dutch Shell plc shareholders (1,908) (1,634) (1,671)
- Non-controlling interest (21) (26) (24)
Repurchases of shares (545) (453) -
Shares held in trust: net
sales/(purchases) and dividends received (10) (43) 205
Net cash used in financing activities (4,521) (1,346) (4,744)
Currency translation differences relating
to cash and
cash equivalents (332) 84 354
Increase/(decrease) in cash and cash
equivalents (936) (289) 3,732
Cash and cash equivalents at beginning of
period 18,550 18,839 11,292
Cash and cash equivalents at end of
period 17,614 18,550 15,024
[1] Restated for accounting policy change (see Note 2).
Notes 1 to 7 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 known as Shell) have been prepared in
accordance with IAS 34 Interim Financial Reporting 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, 2012 (pages 103 to
108) as filed with the U.S. Securities and Exchange Commission,
except as described below:
- Revised IAS 19 Employee Benefits was adopted on
January 1, 2013, with retrospective
effect (see Note 2).
- IFRS 10 Consolidated Financial Statements, IFRS 11
Joint Arrangements and revised standards IAS 27 Separate
Financial Statements and IAS 28 Investments in Associates
and Joint Ventures were adopted on January 1, 2013. The standards reinforce the
principles for determining when an investor controls another entity
and in certain cases amend the accounting for arrangements where an
investor has joint control. The impact of the changes on the
accounting for Shell's interests is not significant; the major
investments affected are listed in Note 7.
- IFRS 13 Fair Value Measurement was adopted on
January 1, 2013, with prospective
effect. The standard affects nearly all instances where assets and
liabilities are currently recognised at fair value, primarily by
refining the measurement concept to represent an asset or
liability's exit value. The standard also introduces certain
additional considerations to the measurement process and additional
disclosures have been provided where considered material (see Note
6). The impact of the changes for Shell is not significant.
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, 2012 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 498(3) of the Companies Act 2006.
The Interim Statements are unaudited.
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 therefore exclude the effect of changes in the oil
price on inventory carrying amounts.
Net capital investment is defined as capital expenditure as
reported in the Condensed Consolidated Statement of Cash Flows,
adjusted for: proceeds from disposals; exploration expense
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. Accounting for defined benefit plans
Revised IAS 19 Employee Benefits (IAS 19R) was adopted on
January 1, 2013, with retrospective
effect; comparative information is therefore restated.
The revised standard requires immediate recognition of actuarial
gains and losses arising in connection with defined benefit plans
through other comprehensive income (see page 11). Previously, Shell
applied the corridor method of accounting under which amounts
falling inside the corridor remained unrecognised, while amounts
falling outside it were recognised (amortised) in income over a
number of years. For the periods presented in this Report, the
elimination of this amortisation is approximately offset by lower
interest being recognised in income under the IAS 19R "net
interest" approach. Under this approach, interest income from
defined benefit plan assets is determined based on the same
discount rate as applied to measure plan obligations, rather than
on an expected rate of return reflecting the plan's investment
portfolio.
The following table sets out the impact of the change on
relevant lines in the Condensed Consolidated Balance Sheet, on
gearing, and on the return on capital employed (ROACE, see Note 9)
for the twelve months ending at the respective balance sheet
date.
$ million Dec 31, 2012 Mar 31, 2012
Effect of Effect of
As accounting As accounting
previously policy previously policy
stated change Restated stated change Restated
Non-current
assets
Deferred tax 4,045 243 4,288 4,666 208 4,874
Retirement
benefits 12,575 (10,274) 2,301 11,816 (8,192) 3,624
Non-current
liabilities
Deferred tax 15,590 (5,278) 10,312 15,887 (4,598) 11,289
Retirement
benefits 6,298 8,992 15,290 6,064 7,922 13,986
Total equity
Other
reserves 10,021 (13,773) (3,752) 10,024 (11,234) (1,210)
Retained
earnings 180,218 28 180,246 169,061 (74) 168,987
Gearing[1] 9.2% 0.6% 9.8% 9.9% 0.6% 10.5%
ROACE 12.7% 0.9% 13.6% 15.4% 0.7% 16.1%
[1] Net debt (total debt less cash and cash equivalents) as a
percentage of total capital (net debt plus total equity).
The effect of the accounting policy change at January 1, 2012 was to reduce Accumulated other
comprehensive income (within Other reserves) by $10,945 million, Retained earnings by
$92 million and Total equity by
$11,037 million.
Income for the first quarter 2012 increased by $18 million of which Upstream segment earnings
increased by $17 million and
Downstream segment earnings increased by $1
million. Income for the fourth quarter 2012 increased by
$57 million of which Upstream segment
earnings increased by $24 million,
Downstream segment earnings increased by $27
million and Corporate segment earnings increased by
$6 million. Basic and diluted
earnings per share for the fourth quarter 2012 increased by
$0.01. There was no impact on net
cash from operating activities.
3. Information by business segment
$ million Quarters
Q1 2013 Q1 2012[1]
Third-party revenue
Upstream 12,376 11,990
Downstream 100,409 107,918
Corporate 25 12
Total third-party revenue 112,810 119,920
Inter-segment revenue
Upstream 12,142 13,451
Downstream 243 212
Corporate - -
Segment earnings
Upstream 5,821 6,723
Downstream 1,688 1,320
Corporate 491 (264)
Total segment earnings 8,000 7,779
[1] Restated for accounting policy change (see Note 2).
$ million Quarters
Q1 2013 Q1 2012[1]
Total segment earnings 8,000 7,779
Current cost of supplies adjustment:
Purchases 113 1,195
Taxation (28) (342)
Share of profit of equity-accounted
investments 141 220
Income for the period 8,226 8,852
[1] Restated for accounting policy change (see Note 2).
4. Share capital
Issued and fully paid
Sterling deferred
Ordinary shares of EUR0.07 each shares
Number of shares A B of GBP1 each
At January 1, 2013 3,772,388,687 2,617,715,189 50,000
Scrip dividends 25,586,312 - -
Repurchases of shares - (16,080,000) -
At March 31, 2013 3,797,974,999 2,601,635,189 50,000
Nominal value
Ordinary shares
$ million A B Total
At January 1, 2013 321 221 542
Scrip dividends 2 - 2
Repurchases of shares - (1) (1)
At March 31, 2013 323 220 543
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
to 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 the close
of business on August 22, 2013 and
the end of the Annual General Meeting to be held in 2013, unless
previously renewed, revoked or varied by Royal Dutch Shell plc in a
general meeting.
5. 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,
2013[3] 3,423 154 63 2,028 (9,420) (3,752)
Other
comprehensive
loss
attributable to
Royal Dutch
Shell plc
shareholders - - - - (203) (203)
Scrip dividends (2) - - - - (2)
Repurchases of
shares - - 1 - - 1
Share-based
compensation - - - (603) - (603)
At March 31,
2013 3,421 154 64 1,425 (9,623) (4,559)
At January 1,
2012[3] 3,432 154 60 1,571 (7,178) (1,961)
Other
comprehensive
income
attributable to
Royal Dutch
Shell plc
shareholders[3] - - - - 889 889
Scrip dividends (3) - - - - (3)
Share-based
compensation - - - (135) - (135)
At March 31,
2012[3] 3,429 154 60 1,436 (6,289) (1,210)
[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 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.
[3] Restated for accounting policy change (see Note 2).
6. Derivative contracts
The table below provides the carrying amounts of derivatives
contracts held, disclosed in accordance with IFRS 13 Fair Value
Measurement (see Note 1c).
March March
$ million 31, 2013 Dec 31, 2012 31, 2012
Included within:
Trade and other receivables - non-current 1,426 1,881 1,808
Trade and other receivables - current 8,443 9,192 17,469
Trade and other payables - non-current 609 658 901
Trade and other payables - current 8,530 9,145 17,285
7. Major investments in joint ventures and associates
Of the major investments in joint ventures and associates listed
in the Annual Report and Form 20-F for the year ended December 31, 2012 (page 117), Aera, Deer Park and Saudi Aramco Shell Refinery have
been assessed as joint operations under IFRS 11 Joint
Arrangements (see Note 1b) and are no longer accounted for
using the equity method as from January 1,
2013.
8. 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 this Report.
9. Return on average capital employed
Return on average capital employed (ROACE) measures the
efficiency of Shell's utilisation of the capital that it employs
and is a common measure of business performance. In this
calculation, ROACE 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.
10. Liquidity and capital resources
Net cash from operating activities for the first quarter 2013
was $11.6 billion compared with
$13.4 billion for the same period
last year.
Total current and non-current debt increased to $35.8 billion at March 31,
2013 from $34.8 billion at
March 31, 2012 while cash and cash
equivalents increased to $17.6
billion at March 31, 2013 from
$15.0 billion at March 31, 2012. No new debt was issued under the
US shelf registration programme or under the euro medium-term note
programme during the first quarter of 2013.
Net capital investment for the first quarter 2013 was
$8.2 billion, of which $7.4 billion was invested in Upstream and
$0.8 billion in Downstream. Net
capital investment for the same period of 2012 was $4.6 billion, of which $3.8 billion was invested in Upstream and
$0.8 billion in Downstream.
Dividends of $0.45 per share are
announced on May 2, 2013 in respect
of the first quarter. These dividends are payable on June 27, 2013. In the case of 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, 2012 for additional information on
the dividend access mechanism.
Under the Scrip Dividend Programme shareholders can increase
their shareholding in Shell by choosing to receive new shares
instead of cash dividends. Only new A shares will be issued under
the Programme, including to shareholders who currently hold B
shares.
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 over which
Royal Dutch Shell plc either directly or indirectly has control.
Companies over which Shell has joint control are generally referred
to "joint ventures" and companies over which Shell has significant
influence but neither control nor joint control are referred to as
"associates". In this document, joint ventures and associates may
also be 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% 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 Royal Dutch Shell 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", "schedule", "seek",
"should", "target", "will" and similar terms and phrases. There are
a number of factors that could affect the future operations of
Royal Dutch Shell 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 risk factors that may affect
future results are contained in Royal Dutch Shell's Form 20-F for
the year ended December 31, 2012 (available at
http://www.shell.com/investor and http://www.sec.gov). These risk
factors also expressly qualify all forward-looking statements
contained in this document and should be considered by the reader.
Each forward-looking statement speaks only as of the date of
this document, May 2, 2013. Neither Royal Dutch Shell plc nor any
of its subsidiaries 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
document 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 this form from the SEC by
calling 1-800-SEC-0330.
The information in this Report reflects the unaudited
consolidated financial position and results of Royal Dutch Shell
plc.
Company No. 4366849, Registered Office: Shell Centre, London, SE1 7NA, England, UK.
Contacts:
Investor Relations:
International, +31(0)70-377-4540
North America,
+1-713-241-1042
Media:
International, +44(0)207-934-5550
USA, +1-713-241-4544
SOURCE Royal Dutch Shell plc