Company Announcements
ROYAL DUTCH SHELL PLC - 4th Quarter and Full Year 2014 Unaudited Results
Related Companies
PR Newswire
London, January 29
ROYAL DUTCH SHELL PLC
4TH QUARTER AND FULL YEAR 2014 UNAUDITED RESULTS
* Royal Dutch Shell's fourth quarter 2014 earnings, on a current cost of
supplies (CCS) basis (see Note 2), were $4.2 billion compared with $2.2
billion for the same quarter a year ago. Full year 2014 CCS earnings were
$19.0 billion compared with $16.7 billion in 2013.
* Fourth quarter 2014 CCS earnings excluding identified items (see page 6)
were $3.3 billion compared with $2.9 billion for the fourth quarter 2013,
an increase of 12%. Full year 2014 CCS earnings excluding identified items
were $22.6 billion compared with $19.5 billion in 2013.
* Compared with the fourth quarter 2013, CCS earnings excluding identified
items benefited from improved Downstream results reflecting steps taken by
the company to improve financial performance and the industry environment.
In Upstream, earnings benefited from increased high-margin liquids
production volumes and improved operational performance, and lower well
write-offs. These items were more than offset by lower oil prices. Upstream
earnings excluding identified items were impacted by $330 million related
to an increase of a deferred tax liability as a result of the weakening
Australian dollar.
* Fourth quarter 2014 basic CCS earnings per share excluding identified items
increased by 13% versus the fourth quarter 2013. Full year 2014 basic CCS
earnings per share excluding identified items increased by 15% versus 2013.
* Total cash dividends paid to shareholders in the fourth quarter 2014 were
$3.0 billion. During the fourth quarter some 27.4 million shares were
bought back for cancellation for a consideration of $1.0 billion.
* Gearing at the end of 2014 was 12.2% compared with 16.1% at the end of
2013.
* A fourth quarter 2014 dividend has been announced of $0.47 per ordinary
share and $0.94 per American Depositary Share ("ADS"), an increase of 4%
compared with the fourth quarter 2013.
* Royal Dutch Shell is expected to announce a dividend of $0.47 per ordinary
share and $0.94 per American Depositary Share ("ADS") in respect of the
first quarter 2015.
SUMMARY OF UNAUDITED RESULTS
Quarters $ million Full year
Q4 Q3 Q4
2014 2014 2013 %1 2014 2013 %
Income attributable to Royal
773 4,463 1,781 -57 Dutch Shell plc shareholders 15,052 16,371 -8
Current cost of supplies (CCS)
3,390 803 371 adjustment for Downstream 3,989 374
4,163 5,266 2,152 +93 CCS earnings 19,041 16,745 +14
901 (581) (763) Identified items2 (3,521) (2,747)
CCS earnings excluding identified
3,262 5,847 2,915 +12 items 22,562 19,492 +16
Of which:
1,730 4,343 2,477 Upstream 16,505 15,117
1,550 1,793 558 Downstream 6,265 4,466
Corporate and Non-controlling
(18) (289) (120) interest (208) (91)
Cash flow from operating
9,608 12,811 6,028 +59 activities 45,044 40,440 +11
0.66 0.83 0.34 +94 Basic CCS earnings per share ($) 3.02 2.66 +14
1.32 1.66 0.68 Basic CCS earnings per ADS ($) 6.04 5.32
Basic CCS earnings per share
0.52 0.92 0.46 +13 excl. identified items ($) 3.57 3.10 +15
Basic CCS earnings per ADS excl.
1.04 1.84 0.92 identified items ($) 7.14 6.20
0.47 0.47 0.45 +4 Dividend per share ($) 1.88 1.80 +4
0.94 0.94 0.90 Dividend per ADS ($) 3.76 3.60
1 Q4 on Q4 change
2 See page 6
Royal Dutch Shell Chief Executive Officer Ben van Beurden:
"Our strategy is delivering with good performance on our three themes of
financial performance, capital efficiency and project delivery. These will
remain Shell's priorities in 2015, as we continue to balance growth and
returns."
FOURTH QUARTER 2014 PORTFOLIO DEVELOPMENTS
Upstream
In Malaysia, Shell announced first production from the Shell-operated
Gumusut-Kakap deep-water development (Shell interest 29%). The production
system is expected to reach a peak oil production of around 135 thousand
barrels of oil equivalent per day ("boe/d"). With oil production now underway,
work on the gas injection facilities is continuing with an expected start-up
during 2015.
Shell announced the final investment decision ("FID") on the Bonga Main phase 3
project (Shell interest 55%) offshore Nigeria. The development is expected to
contribute some 40 thousand boe/d at peak production through the existing Bonga
FPSO export facility.
Shell announced the FID on the Coulomb phase 2 project (Shell interest 100%) in
the Gulf of Mexico. The development is a subsea tie-back into the Na Kika
semi-submersible storage platform and is expected to contribute some 20
thousand boe/d at peak production.
Shell commenced front end engineering and design ("FEED") on the Vito
deep-water development project (Shell interest 51%) in the Gulf of Mexico,
United States. The development, which is expected to deliver peak production of
100 thousand boe/d, will be a floating production system with flexibility for
up to four subsea tiebacks.
Shell announced a frontier exploration discovery offshore Gabon, West Africa
(Shell interest 75%). The Leopard-1 well encountered a substantial gas column
with around 200 metres net gas pay in a pre-salt reservoir. Shell and its
partners are planning to undertake an appraisal programme to further determine
the resource volumes.
During the quarter, in Shell's heartlands exploration programme, Shell made two
Shell-operated oil discoveries in deep-water Gulf of Mexico with the Gettysburg
W well (Shell interest 80%) in the Norphlet play, and the Power Nap well (Shell
interest 50%) just east of the Vito discovery.
Shell had continued success with near-field exploration discoveries in a number
of countries.
As part of its global exploration programme, Shell added new acreage positions
following successful bidding results in the United States Gulf of Mexico.
Upstream divestment proceeds totalled some $2.2 billion for the fourth quarter
2014 and included proceeds from the divestment of the Haynesville dry gas
position in the United States, Oil Mining Lease 24 and related facilities in
onshore Nigeria, and the BM-ES-23 concession in the Espirito Santos Basin
offshore Brazil.
In Upstream outside the Americas, a strategic review of Shell's resources plays
portfolio is underway. This review may potentially lead to future portfolio
activities, well write-offs and/or impairments.
Downstream
In Norway, Shell signed an agreement for the sale of its retail, commercial
fuels, and supply and distribution logistics businesses to ST1. In addition,
Shell's aviation business will become a 50-50 joint venture with ST1. The sale
is subject to regulatory approval and is expected to be completed in 2015.
In Singapore, Shell has taken full control of Ellba Eastern (Pte) Ltd, through
the acquisition of a 50% stake in the company previously held by its joint
venture partner. The joint venture, which is already operated by Shell,
produces styrene monomer and propylene oxide. The buy-out enables integration
with and optimisation of Shell's existing asset base at Shell Jurong Island,
allowing for future growth.
In South Africa, Shell announced that it is merging its Marketing and Refining
businesses to form Shell Downstream South Africa. As part of the merger, Shell
will sell 3% of its shareholding in the Durban refinery in South Africa to our
Broad-Based Black Economic Empowerment partner, Thebe.
Shell Midstream Partners, L.P., a master limited partnership formed by Shell,
announced the pricing of its initial public offering of 40,000,000 common units
representing limited partner interests at $23.00 per common unit raising $1.0
billion in proceeds for Shell. The underwriters exercised the full
over-allotment option to purchase an additional 6,000,000 common units from
Shell Midstream Partners. The common units began trading on the New York Stock
Exchange on October 29, 2014 under the ticker symbol "SHLX".
KEY FEATURES OF THE FOURTH QUARTER AND FULL YEAR 2014
* Fourth quarter 2014 CCS earnings (see Note 2) were $4,163 million, 93%
higher than for the same quarter a year ago. Full year 2014 CCS earnings
were $19,041 million, 14% higher than in 2013.
* Fourth quarter 2014 CCS earnings excluding identified items (see page 6)
were $3,262 million compared with $2,915 million for the fourth quarter
2013, an increase of 12%. Fourth quarter 2014 CCS earnings excluding
identified items benefited from improved Downstream results reflecting
steps taken by the company to improve financial performance and the
industry environment. In Upstream, earnings benefited from increased
high-margin liquids production volumes and improved operational
performance, and lower well write-offs. These items were more than offset
by lower oil prices. Upstream earnings excluding identified items were
impacted by $330 million related to an increase of a deferred tax liability
as a result of the weakening Australian dollar.
Full year 2014 CCS earnings excluding identified items were $22,562 million
compared with $19,492 million in 2013, an increase of 16%.
* Basic CCS earnings per share for the fourth quarter 2014 increased by 94%
versus the same quarter a year ago. Full year 2014 basic CCS earnings per
share increased by 14% versus 2013.
* Basic CCS earnings per share excluding identified items for the fourth
quarter 2014 increased by 13% versus the same quarter a year ago. Full year
2014 basic CCS earnings per share excluding identified items increased by
15% versus 2013.
* Cash flow from operating activities for the fourth quarter 2014 was $9.6
billion, compared with $6.0 billion for the same quarter last year.
Excluding working capital movements, cash flow from operating activities
for the fourth quarter 2014 was $3.8 billion, compared with $7.7 billion in
the same quarter last year.
Full year 2014 cash flow from operating activities was $45.0 billion, compared
with $40.4 billion in 2013. Excluding working capital movements, cash flow from
operating activities for the full year 2014 was $38.9 billion, compared with
$37.5 billion in 2013.
* Net capital investment (see Note 2) for the fourth quarter 2014 was $7.8
billion. Capital investment for the fourth quarter 2014 was $9.7 billion
and divestments were $2.5 billion.
Full year 2014 net capital investment was $23.9 billion. Capital investment for
the full year 2014 was $37.3 billion, including $2.0 billion for the
acquisition of the Repsol LNG portfolio. This successfully completes the 2014
capital program. Divestments were $14.0 billion, excluding proceeds from the
initial public offering of the US midstream master limited partnership.
* Total cash dividends paid to shareholders in the fourth quarter 2014 were
$3.0 billion. Total dividends distributed in the full year 2014 were $11.8
billion, of which $2.4 billion were settled by issuing some 64.6 million A
shares under the Scrip Dividend Programme.
* Under our share buyback programme some 27.4 million A shares were bought
back for cancellation during the fourth quarter 2014 for a consideration of
$1.0 billion. During the full year 2014 some 87.7 million shares were
bought back for cancellation for a consideration of $3.3 billion.
* Return on average capital employed on a reported income basis (see Note 4)
was 7.1% at the end of 2014 compared with 7.9% at the end of 2013.
* Gearing was 12.2% at the end of 2014 versus 16.1% at the end of 2013.
* Oil and gas production for the fourth quarter 2014 was 3,213 thousand boe/
d, a decrease of 1% compared with the fourth quarter 2013. Excluding the
impact of divestments, Abu Dhabi license expiry, PSC price effects, and
security impacts in Nigeria, fourth quarter 2014 production volumes were 7%
higher than for the same period last year.
Full year 2014 oil and gas production was 3,080 thousand boe/d, a decrease of
4% compared with 2013. Excluding the impact of divestments, Abu Dhabi license
expiry, PSC price effects, and security impacts in Nigeria, 2014 production
volumes increased by 2% compared with 2013.
* Equity sales of LNG of 6.20 million tonnes for the fourth quarter 2014 were
26% higher than for the same quarter a year ago.
Full year 2014 equity sales of LNG of 23.97 million tonnes were 22% higher than
in 2013.
* Oil products sales volumes for the fourth quarter 2014 were 6% higher than
for the fourth quarter 2013. Chemicals sales volumes for the fourth quarter
2014 decreased by 12% compared with the same quarter a year ago.
Full year 2014 oil products sales volumes were 3% higher than in 2013. Full
year 2014 chemicals sales volumes decreased by 2% compared with 2013.
* When final volumes are reported in the 2014 Annual Report and Form 20-F,
Shell expects that proved oil and gas reserves additions before taking into
account production on an SEC basis will be around 0.3 billion barrels of
oil equivalent ("boe").
With 2014 production of some 1.2 billion boe, our headline proved Reserves
Replacement Ratio for the year on an SEC basis is expected to be around 26%.
Our Organic Reserves Replacement Ratio, which excludes the impact of oil and
gas price movements in the year, acquisitions and divestments, is expected to
be around 47%.
At the end of 2014, total proved reserves on an SEC basis are expected to be
around 13.1 billion boe, after taking into account 2014 production.
The 3-year average headline proved Reserves Replacement Ratio on an SEC basis
is expected to be around 67%. Our 3-year average Organic Reserves Replacement
Ratio, which excludes the impact of oil and gas price movements in the year,
acquisitions and divestments, is expected to be around 85%.
Further information will be provided in our Annual Report and Form 20-F, which
is expected to be filed in March 2015.
* Supplementary financial and operational disclosure for the fourth quarter
and full year 2014 is available at www.Shell.com/investor.
SUMMARY OF IDENTIFIED ITEMS
Earnings for the fourth quarter 2014 reflected the following items, which in
aggregate amounted to a net gain of $901 million (compared with a net charge of
$763 million for the fourth quarter 2013), as summarised in the table below:
* Upstream earnings included a net gain of $915 million, mainly reflecting
net divestment gains of $756 million and the net impact of fair value
accounting of commodity derivatives and certain gas contracts of $436
million. These items were partly offset by asset impairments of $119
million, as well as redundancy and restructuring charges and other items.
These other items included a $369 million charge associated with an update
of an Australian deferred tax asset, partly offset by a gain of $295
million related to the recognition of the Dutch pension plan amendment.
Upstream earnings for the fourth quarter 2013 included a net charge of $631
million.
* Downstream earnings included a net charge of $6 million, mainly reflecting
the net impact of fair value accounting of commodity derivatives of $186
million, redundancy and restructuring charges of $161 million, and
impairment charges of $132 million. These net charges were partly offset by
a gain of $480 million related to the recognition of the Dutch pension plan
amendment. Downstream earnings for the fourth quarter 2013 included a net
charge of $86 million.
* Corporate results and Non-controlling interest included a net charge of $8
million mainly reflecting redundancy and restructuring charges. Earnings
for the fourth quarter 2013 included a net charge of $46 million.
SUMMARY OF IDENTIFIED ITEMS
Quarters $ million Full year
Q4 2014 Q3 2014 Q4 2013 2014 2013
Segment earnings impact of
identified items:
915 (394) (631) Upstream (664) (2,479)
(6) (192) (86) Downstream (2,854) (597)
Corporate and Non-controlling
(8) 5 (46) interest (3) 329
901 (581) (763) Earnings impact (3,521) (2,747)
These identified items are shown to provide additional insight into segment
earnings and income attributable to shareholders. They 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 3)
* Redundancy and restructuring
Further items may be identified in addition to the above.
EARNINGS BY BUSINESS SEGMENT
UPSTREAM
Quarters $ million Full year
Q4 2014 Q3 2014 Q4 2013 %1 2014 2013 %
Upstream earnings excluding
1,730 4,343 2,477 -30 identified items 16,505 15,117 +9
2,645 3,949 1,846 +43 Upstream earnings 15,841 12,638 +25
Upstream cash flow from
4,991 8,854 5,557 -10 operating activities 31,839 30,114 +6
5,355 5,447 14,150 -62 Upstream net capital investment 20,704 39,217 -47
Liquids production available for
1,526 1,429 1,539 -1 sale (thousand b/d) 1,484 1,541 -4
Natural gas production available
9,782 7,892 9,925 -1 for sale (million scf/d) 9,259 9,616 -4
Total production available for
3,213 2,790 3,251 -1 sale (thousand boe/d) 3,080 3,199 -4
Equity sales of LNG (million
6.20 5.68 4.93 +26 tonnes) 23.97 19.64 +22
1 Q4 on Q4 change
Fourth quarter Upstream earnings excluding identified items were $1,730 million
compared with $2,477 million a year ago. Identified items were a gain of $915
million, compared with a net charge of $631 million for the fourth quarter 2013
(see page 6).
Compared with the fourth quarter 2013, earnings excluding identified items were
impacted by the significant decline in oil price. Earnings benefited from both
the impact of high-margin liquids production volumes from the start-up of new
deep-water projects and improved operational performance, and lower well
write-offs. The increase of a deferred tax liability as a result of the
weakening Australian dollar reduced earnings by some $140 million. The impact
of this item on the fourth quarter 2014 earnings excluding identified items was
$330 million after tax, compared with a $190 million after tax impact in the
fourth quarter 2013.
Upstream Americas excluding identified items incurred a loss.
Global liquids realisations were 25% lower than for the fourth quarter 2013.
Global natural gas realisations were 12% lower than for the same quarter a year
ago, with a 3% decrease in the Americas and a 15% decrease outside the
Americas.
Fourth quarter 2014 production was 3,213 thousand boe/d compared with 3,251
thousand boe/d a year ago. Liquids production decreased by 1% and natural gas
production decreased by 1% compared with the fourth quarter 2013. Excluding the
impact of divestments, Abu Dhabi license expiry, PSC price effects, and
security impacts in Nigeria, fourth quarter 2014 production was 7% higher than
for the same period last year. Underlying production was driven by increased
high-margin liquids production from both new deep-water projects and improved
operational performance.
New field start-ups and the continuing ramp-up of existing fields, in
particular Mars B, Cardamom and BC10 phase 2 in the Americas, Gumusut Kakap in
Malaysia, and Bonga NW in Nigeria contributed some 140 thousand boe/d to
production for the fourth quarter 2014, which more than offset the impact of
field declines.
Equity LNG sales volumes of 6.20 million tonnes increased by 26% compared with
the same quarter a year ago, mainly reflecting the contribution from Atlantic
LNG and Peru LNG.
Full year Upstream earnings excluding identified items were $16,505 million
compared with $15,117 million in 2013. Identified items were a net charge of
$664 million, compared with a net charge of $2,479 million in 2013 (see page
6).
Compared with 2013, Upstream earnings excluding identified items benefited from
increased liquids production volumes from both the start-up of new high-margin
deep-water projects and improved operational performance. Earnings also
reflected lower exploration expenses primarily driven by lower well write-offs,
and increased contributions from trading. Earnings were heavily impacted by
declining oil prices, and increased depreciation.
Global liquids realisations were 8% lower than in 2013. Global natural gas
realisations were 6% lower than in 2013, with a 20% increase in the Americas
and an 11% decrease outside the Americas.
Full year 2014 production was 3,080 thousand boe/d compared with 3,199 thousand
boe/d in 2013. Liquids production decreased by 4% and natural gas production
decreased by 4% compared with 2013. Excluding the impact of divestments, Abu
Dhabi license expiry, PSC price effects, and security impacts in Nigeria,
production volumes in 2014 increased by 2% compared with 2013.
New field start-ups and the continuing ramp-up of existing fields, in
particular Majnoon in Iraq, Mars B and BC-10 phase 2 in the Americas,
contributed some 130 thousand boe/d to production in 2014.
Equity LNG sales volumes of 23.97 million tonnes were 22% higher than in 2013,
mainly reflecting the contribution from Atlantic LNG and Peru LNG.
DOWNSTREAM
Quarters $ million Full year
Q4 2014 Q3 2014 Q4 2013 %1 2014 2013 %
Downstream CCS earnings
1,550 1,793 558 +178 excluding identified items 6,265 4,466 +40
1,544 1,601 472 +227 Downstream CCS earnings 3,411 3,869 -12
Downstream cash flow from
4,698 3,187 808 +481 operating activities 11,292 7,903 +43
Downstream net capital
2,375 (615) 1,571 +51 investment 3,079 4,885 -37
Refinery processing intake
2,718 2,896 2,910 -7 (thousand b/d) 2,903 2,915 -
Oil products sales volumes
6,392 6,295 6,038 +6 (thousand b/d) 6,365 6,164 +3
Chemicals sales volumes
3,895 4,441 4,412 -12 (thousand tonnes) 17,008 17,386 -2
1 Q4 on Q4 change
Fourth quarter Downstream earnings excluding identified items were $1,550
million compared with $558 million for the fourth quarter 2013. Identified
items were a net charge of $6 million, compared with a net charge of $86
million for the fourth quarter 2013 (see page 6).
Compared with the fourth quarter 2013, Downstream earnings excluding identified
items benefited from increased contributions from trading and supply, lower
costs and taxes, higher contributions from marketing, and Shell's actions to
improve its portfolio and profitability. Realised refining margins improved in
most regions, reflecting industry conditions and operating performance.
Chemicals earnings were negatively impacted by unit shut-downs at the Moerdijk
chemical site in the Netherlands.
Refinery intake volumes were 7% lower compared with the same quarter last year.
Excluding portfolio impacts, refinery intake volumes were 3% lower than in the
same period a year ago as a result of planned maintenance. Refinery
availability was 95%, compared with 93% for the fourth quarter 2013.
Oil products sales volumes increased by 6% compared with the same period a year
ago, mainly as a result of increased trading volumes.
Chemicals sales volumes decreased by 12% compared with the same quarter last
year primarily due to reduced volumes as a result of unplanned downtime at the
Moerdijk chemical site in the Netherlands. Chemicals manufacturing plant
availability was 65% compared with 91% in the same period last year, mainly
reflecting the impact of unplanned unit shut-downs at the Moerdijk chemical
site in the Netherlands.
Full year Downstream earnings excluding identified items were $6,265 million
compared with $4,466 million in 2013. Identified items were a net charge of
$2,854 million, compared with a net charge of $597 million in 2013 (see page
6).
Compared with 2013, Downstream earnings excluding identified items benefited
from higher realised refining margins, reflecting the industry environment and
improved operating performance, increased contributions from trading, and lower
costs mainly as a result of divestments. Contributions from Marketing continued
to be strong in 2014. Earnings were impacted by lower Chemicals contributions
mainly as a result of weaker intermediates industry conditions and the result
of unit shut-downs at the Moerdijk chemical site in the Netherlands.
Refinery intake volumes were in line with 2013. Refinery availability was 94%,
compared with 93% in 2013.
Oil products sales volumes increased by 3% compared with 2013, mainly
reflecting higher trading volumes.
Chemicals sales volumes decreased by 2% compared with 2013, primarily driven by
reduced volumes as a result of unplanned downtime at the Moerdijk chemical site
in the Netherlands. Chemicals manufacturing plant availability decreased to 85%
from 92% in 2013, mainly reflecting the impact of unit shut-downs at the
Moerdijk chemical site in the Netherlands.
CORPORATE AND NON-CONTROLLING INTEREST
Quarters $ million Full year
Q4 2014 Q3 2014 Q4 2013 2014 2013
Corporate and Non-controlling interest
(18) (289) (120) excl. identified items (208) (91)
Of which:
(24) (306) (73) Corporate (153) 73
6 17 (47) Non-controlling interest (55) (164)
(26) (284) (166) Corporate and Non-controlling interest (211) 238
Fourth quarter Corporate results and Non-controlling interest excluding
identified items were a loss of $18 million, compared with a loss of $120
million for the same period last year. Identified items for the fourth quarter
2014 were a net charge of $8 million, whereas earnings for the fourth quarter
2013 included a net charge of $46 million (see page 6).
Compared with the fourth quarter 2013, Corporate results excluding identified
items mainly reflected lower net interest expense and higher tax credits,
partly offset by adverse currency exchange rate effects.
Full year Corporate results and Non-controlling interest excluding identified
items were a loss of $208 million compared with a loss of $91 million in 2013.
Identified items for 2014 were a net charge of $3 million, whereas earnings for
2013 included a net gain of $329 million (see page 6).
Compared with 2013, Corporate results excluding identified items mainly
reflected lower tax credits, higher net interest expense and adverse currency
exchange rate effects.
FORTHCOMING EVENTS
First quarter 2015 results and first quarter 2015 dividend are scheduled to be
announced on April 30, 2015. Second quarter 2015 results and second quarter
2015 dividend are scheduled to be announced on July 30, 2015. Third quarter
2015 results and third quarter 2015 dividend are scheduled to be announced on
October 29, 2015.
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
Quarters $ million Full year
Q4 2014 Q3 2014 Q4 2013 %1 2014 2013 %
92,374 107,851 109,243 Revenue 421,105 451,235
Share of profit of joint
818 1,512 2,024 ventures and associates 6,116 7,275
974 462 212 Interest and other income 4,123 1,089
Total revenue and other
94,166 109,825 111,479 income 431,344 459,599
73,360 84,507 85,853 Purchases 326,998 353,199
Production and manufacturing
7,465 7,555 7,512 expenses 30,038 28,386
Selling, distribution and
3,426 3,350 3,861 administrative expenses 13,965 14,675
363 302 428 Research and development 1,222 1,318
1,323 846 1,766 Exploration 4,224 5,278
Depreciation, depletion and
4,991 4,730 5,629 amortisation 24,499 21,509
430 417 470 Interest expense 1,804 1,642
2,808 8,118 5,960 -53 Income before taxation 28,594 33,592 -15
2,212 3,693 4,138 Taxation 13,686 17,066
596 4,425 1,822 -67 Income for the period 14,908 16,526 -10
Income attributable to
(177) (38) 41 non-controlling interest (144) 155
Income attributable to Royal
773 4,463 1,781 -57 Dutch Shell plc shareholders 15,052 16,371 -8
1 Q4 on Q4 change
EARNINGS PER SHARE
Quarters $ Full year
Q4 2014 Q3 2014 Q4 2013 2014 2013
0.12 0.70 0.28 Basic earnings per share 2.38 2.60
0.12 0.70 0.28 Diluted earnings per share 2.38 2.60
SHARES1
Quarters Millions Full year
Q4 2014 Q3 2014 Q4 2013 2014 2013
Weighted average number of
shares as the basis for:
6,301.0 6,333.8 6,272.9 Basic earnings per share 6,311.5 6,291.1
6,301.1 6,334.1 6,275.1 Diluted earnings per share 6,311.6 6,293.4
Shares outstanding at the end of
6,295.0 6,320.3 6,295.4 the period 6,295.0 6,295.4
1 Royal Dutch Shell plc ordinary shares of euro 0.07 each
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters $ million Full year
Q4 2014 Q3 2014 Q4 2013 2014 2013
596 4,425 1,822 Income for the period 14,908 16,526
Other comprehensive income net of
tax:
Items that may be reclassified to
income in later periods:
(2,398) (2,963) (326) - Currency translation differences (5,321) (1,938)
- Unrealised (losses)/gains on
(560) (83) 28 securities (797) (166)
537 (10) (2) - Cash flow hedging gains/(losses) 528 178
- Share of other comprehensive loss
(86) (68) (43) of joint ventures and associates (156) (167)
(2,507) (3,124) (343) Total (5,746) (2,093)
Items that are not reclassified
to income in later periods:
(3,011) (2,672) 2,370 - Retirement benefits remeasurements(6,482) 3,833
(3,011) (2,672) 2,370 Total (6,482) 3,833
Other comprehensive (loss)/income
(5,518) (5,796) 2,027 for the period (12,228) 1,740
(4,922) (1,371) 3,849 Comprehensive income for the period 2,680 18,266
Comprehensive (loss)/income
attributable to non-controlling
(163) (104) (14) interest (190) 23
Comprehensive income attributable
to Royal Dutch Shell plc
(4,759) (1,267) 3,863 shareholders 2,870 18,243
CONDENSED CONSOLIDATED BALANCE SHEET
$ million
Dec 31, 2014 Sep 30, 2014 Dec 31, 2013
Assets
Non-current assets:
Intangible assets 7,076 7,135 4,394
Property, plant and equipment 192,472 190,842 191,897
Joint ventures and associates 31,558 33,316 34,613
Investments in securities 4,115 4,592 4,715
Deferred tax 8,029 7,465 5,785
Retirement benefits 1,682 2,405 3,574
Trade and other receivables 8,304 8,255 9,191
253,236 254,010 254,169
Current assets:
Inventories 19,981 27,318 30,009
Trade and other receivables 58,470 59,056 63,638
Cash and cash equivalents 21,607 19,027 9,696
100,058 105,401 103,343
Total assets 353,294 359,411 357,512
Liabilities
Non-current liabilities:
Debt 38,332 37,065 36,218
Trade and other payables 3,582 3,735 4,065
Deferred tax 12,052 12,970 11,943
Retirement benefits 16,318 14,064 11,182
Decommissioning and other provisions 23,834 22,156 19,698
94,118 89,990 83,106
Current liabilities:
Debt 7,208 5,917 8,344
Trade and other payables 64,864 65,741 70,112
Taxes payable 9,797 13,181 11,173
Retirement benefits 377 364 382
Decommissioning and other provisions 3,966 3,226 3,247
86,212 88,429 93,258
Total liabilities 180,330 178,419 176,364
Equity attributable to Royal Dutch Shell
plc shareholders 172,144 180,002 180,047
Non-controlling interest 820 990 1,101
Total equity 172,964 180,992 181,148
Total liabilities and equity 353,294 359,411 357,512
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, 2014 542 (1,932) (2,037) 183,474 180,047 1,101 181,148
Comprehensive
income for the
period - - (12,182) 15,052 2,870 (190) 2,680
Capital
contributions from,
and other changes
in, non-controlling
interest1 - - - 727 727 25 752
Dividends paid - - - (11,843)(11,843) (116) (11,959)
Scrip dividends2 6 - (6) 2,399 2,399 - 2,399
Repurchases of
shares3 (8) - 8 (2,787) (2,787) - (2,787)
Shares held in
trust: net sales/
(purchases) and
dividends received - 742 - 107 849 - 849
Share-based
compensation - - (148) 30 (118) - (118)
At December 31,
2014 540 (1,190) (14,365)187,159 172,144 820 172,964
At January 1, 2013 542 (2,287) (3,752) 180,246 174,749 1,433 176,182
Comprehensive
income for the
period - - 1,872 16,371 18,243 23 18,266
Capital
contributions from,
and other changes
in, non-controlling
interest - - - 18 18 (103) (85)
Dividends paid - - - (11,338)(11,338) (252) (11,590)
Scrip dividends2 12 - (12) 4,140 4,140 - 4,140
Repurchases of
shares3 (12) - 12 (5,757) (5,757) - (5,757)
Shares held in
trust: net sales/
(purchases) and
dividends received - 355 - 126 481 - 481
Share-based
compensation - - (157) (332) (489) - (489)
At December 31,
2013 542 (1,932) (2,037) 183,474 180,047 1,101 181,148
1 Mainly relates to the public offering of limited partner units in Shell
Midstream Partners, L.P. The difference between the proceeds after tax, and the
increase in non-controlling interest, measured by reference to the carrying
amount of the entity's net assets at the date of the transaction, was
recognised in retained earnings.
2 Under the Scrip Dividend Programme some 64.6 million A shares, equivalent to
$2.4 billion, were issued during 2014 and some 125.6 million A shares,
equivalent to $4.1 billion, were issued during 2013.
3 Includes shares committed to repurchase and repurchases subject to settlement
at the end of the period.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters $ million Full year
Q4 2014 Q3 2014 Q4 2013 2014 2013
Cash flow from operating
activities
596 4,425 1,822 Income for the period 14,908 16,526
Adjustment for:
2,330 2,691 4,677 - Current taxation 13,757 18,582
375 377 436 - Interest expense (net) 1,598 1,448
- Depreciation, depletion and
4,991 4,729 5,629 amortisation 24,499 21,509
(972) (78) (87) - Net gains on sale of assets (3,212) (382)
- Decrease/(increase) in working
5,844 1,741 (1,682) capital 6,125 2,988
- Share of profit of joint
(818) (1,512) (2,024) ventures and associates (6,116) (7,275)
- Dividends received from joint
1,531 2,096 1,865 ventures and associates 6,902 7,117
- Deferred taxation, retirement
benefits, decommissioning
(1,603) 689 (938) and other provisions (1,618) (2,701)
1,000 572 1,338 - Other 2,500 2,937
Net cash from operating
13,274 15,730 11,036 activities (pre-tax) 59,343 60,749
(3,666) (2,919) (5,008) Taxation paid (14,299) (20,309)
Net cash from operating
9,608 12,811 6,028 activities 45,044 40,440
Cash flow from investing
activities
(8,718) (7,867) (14,508) Capital expenditure (31,854) (40,145)
Investments in joint ventures and
107 (151) (523) associates (1,426) (1,538)
2,245 3,783 432 Proceeds from sales of assets 9,873 1,212
Proceeds from sales of joint
279 157 109 ventures and associates 4,163 538
(649) (278) 2 Other investments (net) (587) (388)
56 29 37 Interest received 174 175
Net cash used in investing
(6,680) (4,327) (14,451) activities (19,657) (40,146)
Cash flow from financing
activities
Net (decrease)/increase in debt
with maturity period within three
(173) (465) 3,239 months (3,332) 3,126
4,001 442 4,366 Other debt: New borrowings 7,778 9,146
(571) (334) (464) Repayments (4,089) (6,877)
(310) (404) (650) Interest paid (1,480) (1,307)
Change in non-controlling
1,002 0 (60) interest1 989 (51)
Cash dividends paid to:
- Royal Dutch Shell plc
(2,987) (2,994) (1,610) shareholders (9,444) (7,198)
(39) (4) (36) - Non-controlling interest (116) (252)
(971) (770) (996) Repurchases of shares (3,328) (5,000)
Shares held in trust: net
(purchases)/sales and dividends
(29) 48 66 received 232 (565)
Net cash used in financing
(77) (4,481) 3,855 activities (12,790) (8,978)
Currency translation differences
relating to cash and
(271) (395) (14) cash equivalents (686) (170)
Increase/(decrease) in cash and
2,580 3,608 (4,582) cash equivalents 11,911 (8,854)
Cash and cash equivalents at
19,027 15,419 14,278 beginning of period 9,696 18,550
Cash and cash equivalents at end
21,607 19,027 9,696 of period 21,607 9,696
1 Mainly relates to the public offering of limited partner units in Shell
Midstream Partners, L.P.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
These unaudited Condensed Consolidated Financial Statements of Royal Dutch
Shell plc and its subsidiaries (collectively referred to as Shell) have been
prepared 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, 2013 (pages 105 to 110) as filed with the U.S. Securities and
Exchange Commission.
The financial information presented in these Condensed Consolidated Financial
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, 2013 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.
2. 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 (excluding other investments (net) in the Corporate segment);
exploration expense excluding exploration wells written off; investments in
joint ventures and associates; 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.
3. 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.
4. 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. The rate
used is Shell's effective tax rate for the period. Capital employed consists of
total equity, current debt and non-current debt.
CAUTIONARY STATEMENT
All amounts shown throughout this Report are unaudited. All peak production
figures in Portfolio Developments are quoted at 100% expected production.
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 as "joint ventures" and companies over which Shell has
significant influence but neither control nor joint control are referred to as
"associates". The term "Shell interest" is used for convenience to indicate the
direct and/or indirect 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, 2013 (available at www.Shell.com/investor and 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, January
29, 2015. 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 the
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 www.sec.gov. You can also obtain this form from the SEC by
calling 1-800-SEC-0330.
January 29, 2015
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 +1 832
337 2034
- Media: International +44 (0) 207 934 5550; USA +1 713 241 4544
You are here: news > regulatory news
Digital Look Ltd,
10 Lower Thames St,
London EC3R 6EN
10 Lower Thames St,
London EC3R 6EN