Royal Dutch Shell Plc 1st Quarter 2018 Unaudited Results
THE HAGUE, Netherlands, April 26, 2018 /PRNewswire/ --
SUMMARY OF UNAUDITED RESULTS
$ million Quarters
Definition Q1 2018 Q4 2017 Q1 2017 %1
Income/(loss) attributable
to shareholders 5,899 3,807 3,538 +67
CCS earnings attributable
to shareholders Note 2 5,703 3,082 3,381 +69
Of which: Identified items [A] 381 (1,221) (373)
CCS earnings attributable
to shareholders excluding
identified items 5,322 4,303 3,754 +42
Add: CCS earnings
attributable to
non-controlling interest 121 94 109
CCS earnings excluding
identified items 5,443 4,397 3,863 +41
Of which:
Integrated Gas 2,439 1,636 1,181
Upstream 1,551 1,650 540
Downstream 1,687 1,396 2,489
Corporate (234) (285) (347)
Cash flow from operating
activities 9,427 7,275 9,508 -1
Cash flow from investing
activities (4,249) (665) (4,324)
Free cash flow H 5,178 6,610 5,184
Basic earnings per share
($) 0.71 0.46 0.43 +65
Basic CCS earnings per
share ($) [B] 0.69 0.37 0.41 +68
Basic CCS earnings per
share excl. identified
items ($) 0.64 0.52 0.46 +39
Dividend per share ($) 0.47 0.47 0.47 -
1. Q1 on Q1 change.
Compared with the first quarter 2017, CCS earnings attributable to shareholders excluding identified items increased by $1.6 billion, mainly driven by higher contributions from Integrated Gas and Upstream, partly offset by lower earnings in Downstream.
Cash flow from operating activities for the first quarter 2018 was $9.4 billion, which included negative working capital movements of $0.9 billion, compared with $9.5 billion in the first quarter 2017, which included negative working capital movements of $1.6 billion [1].
________________________________________ [1] Revised from negative working capital movements of $1.8 billion. See Note 7 and Definition I.
Total dividends distributed to shareholders in the quarter were $4.0 billion.
Royal Dutch Shell Chief Executive Officer Ben van Beurden commented: "Shell's strong earnings this quarter were underpinned by higher oil and gas prices, the continued growth and very good performance of our Integrated Gas business, and improved profitability in our Upstream business. Less favourable refining market conditions and lower contributions from trading impacted the earnings of our Downstream business.
We continue to upgrade our portfolio through performance improvement, new projects, divestments and the development of new businesses. Competitiveness and resilience - now and through the energy transition - are key features of our world-class investment case.
We have a strong financial framework. Our commitment to capital discipline is unchanged, we are making good progress with our $30 billion divestment programme and our outlook for free cash flow - which covered our cash dividend and interest this quarter and over the last year - is consistent with our intent to buy back at least $25 billion of our shares over the period 2018-2020."
ADDITIONAL PERFORMANCE MEASURES
$ million Quarters
Definition Q1 2018 Q4 2017 Q1 2017 %[1]
Capital investment [C] 5,183 6,778 4,720
Divestments D 1,288 6,474 29
Total production available
for sale (thousand boe/d) 3,839 3,756 3,752 +2
Global liquids realised
price ($/b) 60.66 55.28 48.36 +25
Global natural gas realised
price ($/thousand scf) 4.86 4.40 4.29 +13
Operating expenses [G] 9,719 9,776 9,282 +5
Underlying operating
expenses [G] 9,786 9,839 9,181 +7
ROACE [E] 6.4% 5.8% 4.0%
ROACE (CCS basis excluding
identified items) [E] 6.0% 5.6% 3.3%
Gearing[2] [F] 24.7% 25.0% 28.3%
1. Q1 on Q1 change.
2. With effect from 2018, the net debt calculation has been amended (see
Definition F). Gearing as previously published at December 31, 2017, and at
March 31, 2017, was 24.8% and 27.2% respectively.
Changes to the Interim Financial Statements are described in Notes 1, 6 and 7, while revised definitions are explained in Definitions A, F and I.
Supplementary financial and operational disclosure for this quarter is available at http://www.shell.com/investor.
FIRST QUARTER 2018 PORTFOLIO DEVELOPMENTS
Integrated Gas
During the quarter, Shell announced the sale of its shares in Shell entities in New Zealand to OMV for $578 million.
Upstream
During the quarter, Shell announced one of its largest US Gulf of Mexico exploration finds in the past decade from the Whale deep-water well (Shell share 60%). The discovery is under evaluation.
In the deep-water bid round in Mexico in January for the Gulf of Mexico, Shell won four exploration blocks on its own, four with its partner Qatar Petroleum and one with its partner Pemex Exploracion y Produccion. Shell will be the operator of all nine blocks.
Shell won four additional deep-water exploration blocks in Brazil, one block on its own, and three in joint bids with Chevron, Petrobras and Galp. Shell will be the operator of two blocks.
In March, the Dutch cabinet decided to reduce NAM's production (Shell interest 50%) from the Groningen field to zero by 2030. It is expected that this decision, if fully implemented, will reduce Shell's proved reserves by an estimated 0.5 to 0.65 billion boe in 2018.
In March, Shell completed the sale of its 19.6% interest in the West Qurna 1 oil field in Iraq to Itochu Corporation. Divestments completed in the quarter totalled $574 million.
In April, Shell announced a final investment decision to develop the Vito deep-water field in the US Gulf of Mexico. Vito (Shell interest 63.1%) is expected to reach an average peak production of 100 thousand boe/d.
Downstream
During the quarter, Shell Midstream Partners, L.P., sold approximately 36 million common units for total gross proceeds of $980 million. Gross proceeds from the public offering were $680 million with $300 million from a private offering with Shell Midstream LP Holdings LLC.
In April, Shell signed an agreement to sell its Downstream business in Argentina to Raizen. The sale includes the Buenos Aires refinery, around 645 retail stations, the global commercial businesses, as well as supply and distribution activities in the country. The businesses acquired by Raizen will continue the relationship with Shell through various commercial agreements.
PERFORMANCE BY SEGMENT
INTEGRATED GAS
$ million Quarters
Q1 2018 Q4 2017 Q1 2017 %[1]
Segment earnings 2,391 848 1,822 +31
Of which: Identified items
(Definition [A]) (48) (788) 641
Earnings excluding identified items 2,439 1,636 1,181 +107
Cash flow from operating activities 2,561 823 1,951 +31
Capital investment (Definition C) 1,311 1,043 805 +63
Liquids production available for
sale (thousand b/d) 212 229 169 +25
Natural gas production available
for sale (million scf/d) 4,407 4,364 3,317 +33
Total production available for sale
(thousand boe/d) 972 981 741 +31
LNG liquefaction volumes (million
tonnes) 8.90 8.52 8.18 +9
LNG sales volumes (million tonnes) 18.58 17.15 15.84 +17
1. Q1 on Q1 change.
First quarter identified items primarily reflected an impairment charge of $50 million, a loss on fair value accounting of commodity derivatives of $30 million, and a charge of $26 million related to the impact of the weakening of the Australian dollar on a deferred tax position. Identified items also included a gain of $54 million from a deferred tax adjustment.
Compared with the first quarter 2017, Integrated Gas earnings excluding identified items benefited from increased contributions from trading, higher volumes and higher realised oil, gas and LNG prices. This more than offset the impact of higher operating expenses.
Cash flow from operating activities increased compared with the same quarter a year ago as a result of higher earnings, partly offset by increased cash margining on derivatives. Cash flow from operating activities included negative working capital movements of $384 million, compared with negative movements of $405 million[2] in the same quarter a year ago.
Compared with the first quarter 2017, total production increased by 31%, mainly due to higher volumes from Pearl GTL and Gorgon. Despite the Woodside divestment that was completed in the fourth quarter 2017, LNG liquefaction volumes increased by 9% compared with the first quarter 2017, mainly due to higher volumes from Gorgon and increased feedgas supply across the portfolio. ________________________________________________________________________________________ [2]Revised from negative working capital movements of $590 million. See Note 7 and Definition I.
UPSTREAM
$ million Quarters
Q1 2018 Q4 2017 Q1 2017 %[1]
Segment earnings 1,854 2,050 (530) +450
Of which: Identified items
(Definition [A]) 303 400 (1,070)
Earnings excluding identified items 1,551 1,650 540 +187
Cash flow from operating activities 3,556 3,765 3,849 -8
Capital investment (Definition C) 2,479 3,485 2,854 -13
Liquids production available for
sale (thousand b/d) 1,573 1,542 1,697 -7
Natural gas production available
for sale (million scf/d) 7,505 7,154 7,618 -1
Total production available for sale
(thousand boe/d) 2,867 2,775 3,011 -5
1. Q1 on Q1 change.
First quarter identified items primarily reflected a total net gain on sale of assets of $606 million, mainly related to the divestments of Shell's interests in the West Qurna 1 field in Iraq and North Sabah in Malaysia. In addition, as a result of the Dutch cabinet's decision to reduce production from the Groningen field to zero by 2030, Shell's joint venture NAM impaired the Groningen asset. Consequently, Shell's share of results of the NAM joint venture for the first quarter included an impairment of $244 million, resulting in Shell's net investment in NAM now being fully written down to zero. Other impairments totalled $70 million.
Compared with the first quarter 2017, Upstream earnings excluding identified items benefited from higher realised oil and gas prices as well as lower depreciation. This more than offset the impact of lower volumes.
Despite higher earnings, cash flow from operating activities decreased as a result of higher tax payments, portfolio impacts and lower dividends received compared with the same quarter a year ago. Cash flow from operating activities included negative working capital movements of $830 million, compared with negative movements of $671 million[3] in the first quarter 2017.
First quarter production decreased by 5%, compared with the same quarter a year ago, mainly due to the divestments of a package of assets in the UK North Sea, oil sands interests in Canada and onshore assets in Gabon, partly offset by new fields ramping-up. Excluding portfolio impacts, production was 4% higher than in the same quarter a year ago. __________________________________________________________________________________________ __ [3] Revised from negative working capital movements of $803 million. See Note 7 and Definition I.
DOWNSTREAM
$ million Quarters
Q1 2018 Q4 2017 Q1 2017 %[1]
Segment earnings[2] 1,806 1,116 2,580 -30
Of which: Identified items
(Definition [A]) 119 (280) 91
Earnings excluding identified items2 1,687 1,396 2,489 -32
Of which:
Oil Products 1,002 884 1,653 -39
Refining & Trading 62 96 715 -91
Marketing 940 788 938 -
Chemicals 685 512 836 -18
Cash flow from operating activities 3,107 2,649 3,705 -16
Capital investment (Definition C) 1,369 2,208 1,046 +31
Refinery processing intake (thousand
b/d) 2,637 2,589 2,630 -
Oil products sales volumes (thousand
b/d) 6,785 6,861 6,508 +4
Chemicals sales volumes (thousand
tonnes) 4,514 4,688 4,546 -1
1. Q1 on Q1 change.
2. Earnings are presented on a CCS basis (See Note 2).
First quarter identified items primarily reflected a gain on fair value accounting of commodity derivatives of $66 million, as well as a gain of $57 million related to deferred tax remeasurements in non-operated ventures, partly offset by impairments of $37 million.
Compared with the first quarter 2017, Downstream earnings excluding identified items reflected lower contributions from trading, adverse exchange rate effects, as well as weaker refining industry conditions.
Cash flow from operating activities reflected decreased earnings and included negative working capital movements of $29 million, compared with negative movements of $368 million [4] in the same quarter a year ago.
Oil Products
- Refining & Trading earnings excluding identified items reflected lower contributions from trading and weaker refining industry conditions, compared with the first quarter 2017. Earnings also decreased as a result of portfolio impacts.
Refinery availability decreased to 92 [\\UKPR-FILE01.universe.local\EDAPP$\ANair\EdApp\Conversions\CQ_Availability_Refinery ]% compared with 94 [\\UKPR-FILE01.universe.local\EDAPP$\ANair\EdApp\Conversions\PQ_Availability_Refinery ] % in the first quarter 2017, mainly due to additional planned maintenance.
- Marketing earnings excluding identified items were at the same level as in the first quarter 2017.
Compared with the first quarter 2017, Oil Products sales volumes were higher due to increased trading volumes.
Chemicals
- Chemicals earnings excluding identified items reflected less favourable industry conditions, higher operating expenses and adverse exchange rate effects.
Chemicals manufacturing plant availability increased to 94 [\\UKPR-FILE01.universe.local\EDAPP$\ANair\EdApp\Conversions\CQ_Availability_Chemicals ]% from 93 [\\UKPR-FILE01.universe.local\EDAPP$\ANair\EdApp\Conversions\PQ_Availability_Chemicals ]% in the first quarter 2017, mainly reflecting lower planned maintenance. __________________________________________________________________________________________ ___ [4]Revised from negative working capital movements of $221 million. See Note 7 and Definition I.
CORPORATE
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Segment earnings (227) (838) (410)
Of which: Identified items
(Definition [A]) 7 (553) (63)
Earnings excluding identified items (234) (285) (347)
Cash flow from operating activities 203 38 3
First quarter identified items mainly reflected a small tax credit related to the impact of the weakening Brazilian real on deferred tax positions related to financing of the Upstream business.
Compared with the first quarter 2017, Corporate earnings excluding identified items benefited from lower net interest expense, partly offset by lower currency exchange gains.
OUTLOOK FOR THE SECOND QUARTER 2018
Compared with the second quarter 2017, Integrated Gas production is expected to be 140 to 160 thousand boe/d higher. This is mainly due to lower maintenance. LNG liquefaction volumes are expected to be at a similar level.
Compared with the second quarter 2017, Upstream production is expected to be 230 to 260 thousand boe/d lower. This is mainly due to portfolio impacts, higher maintenance, lower production at NAM in the Netherlands and field decline more than offsetting project start-ups.
Refinery availability is expected to decrease in the second quarter 2018 compared with the same period a year ago as a result of higher maintenance.
Oil products sales volumes are expected to increase by some 70 thousand boe/d compared with the same period a year ago as a result of the separation of Motiva assets, partly offset by completed divestments.
Chemicals availability is expected to increase in the second quarter 2018 as a result of lower maintenance compared with the same period a year ago.
Corporate earnings excluding identified items are expected to be a net charge of $300 - 350 million in the second quarter and a net charge of around $1.4 - 1.6 billion for the full year 2018. This excludes the impact of currency exchange rate effects and interest rate movements. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Revenue[1] 89,235 85,422 71,796
Share of profit of joint ventures
and associates 1,039 1,034 1,198
Interest and other income 840 1,668 317
Total revenue and other income 91,114 88,124 73,311
Purchases 66,528 64,095 51,266
Production and manufacturing
expenses 6,923 6,563 6,658
Selling, distribution and
administrative expenses 2,588 2,953 2,412
Research and development 208 260 212
Exploration 230 921 443
Depreciation, depletion and
amortisation 5,334 5,796 7,838
Interest expense 936 984 1,112
Total expenditure 82,747 81,572 69,941
Income/(loss) before taxation 8,367 6,552 3,370
Taxation charge/(credit)[2] 2,336 2,615 (274)
Income/(loss) for the period[1] 6,031 3,937 3,644
Income/(loss) attributable to
non-controlling interest 132 130 106
Income/(loss) attributable to Royal
Dutch Shell plc shareholders 5,899 3,807 3,538
Basic earnings per share ($)[3] 0.71 0.46 0.43
Diluted earnings per share ($)[3] 0.70 0.46 0.43
1. See Note 2 "Segment information".
2. Fourth quarter 2017 included a charge of $2,014 million primarily related to a
remeasurement of deferred tax positions following the US tax reform legislation.
3. See Note 3 "Earnings per share".
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Income/(loss) for the period 6,031 3,937 3,644
Other comprehensive income/(loss) net of tax:
Items that may be reclassified to income in
later periods:
- Currency translation differences 464 355 1,222
- Unrealised gains/(losses) on securities[1] - 258 129
- Debt instruments remeasurements[1] (12) - -
- Cash flow hedging gains/(losses) (68) (484) 88
- Deferred cost of hedging[1] (93) - -
- Share of other comprehensive income/(loss) of
joint ventures and associates 22 46 60
Total 313 175 1,499
Items that are not reclassified to income in
later periods:
- Retirement benefits remeasurements 1,282 (2,056) 1,753
- Equity instruments remeasurements[1] (418) - -
- Share of other comprehensive income/(loss) of
joint ventures and associates 1 - -
Total 865 (2,056) 1,753
Other comprehensive income/(loss) for the
period 1,178 (1,881) 3,252
Comprehensive income/(loss) for the period 7,209 2,056 6,896
Comprehensive income/(loss) attributable to
non-controlling interest 93 133 116
Comprehensive income/(loss) attributable to
Royal Dutch Shell plc shareholders 7,116 1,923 6,780
1. See Note 1 "Basis of preparation" regarding
IFRS 9 Financial Instruments.
CONDENSED CONSOLIDATED BALANCE SHEET
$ million
Mar 31, 2018 Dec 31, 2017
Assets
Non-current assets
Intangible assets 24,312 24,180
Property, plant and equipment 226,328 226,380
Joint ventures and associates 28,852 27,927
Investments in securities 7,023 7,222
Deferred tax 13,247 13,791
Retirement benefits 3,256 2,799
Trade and other receivables 8,371 8,475
Derivative financial
instruments[1] 1,284 919
312,673 311,693
Current assets
Inventories 25,014 25,223
Trade and other receivables 45,071 44,565
Derivative financia[l]
instruments1 6,034 5,304
Cash and cash equivalents 21,927 20,312
98,046 95,404
Total assets 410,719 407,097
Liabilities
Non-current liabilities
Debt 73,630 73,870
Trade and other payables 3,131 3,447
Derivative financial
instruments[1] 883 981
Deferred tax 13,131 13,007
Retirement benefits 12,319 13,247
Decommissioning and other
provisions 24,723 24,966
127,817 129,518
Current liabilities
Debt 14,392 11,795
Trade and other payables 49,405 51,410
Derivative financial
instruments[1] 5,283 5,253
Taxes payable 8,657 7,250
Retirement benefits 454 594
Decommissioning and other
provisions 3,398 3,465
81,589 79,767
Total liabilities 209,406 209,285
Equity attributable to Royal
Dutch Shell plc shareholders 197,331 194,356
Non-controlling interest 3,982 3,456
Total equity 201,313 197,812
Total liabilities and equity 410,719 407,097
1. See Note 6 "Derivative financial instruments and debt excluding finance lease
liabilities".
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to Royal Dutch
Shell plc shareholders
Shares Other Non-
Share held in reserves Retained controlling Total
$ million capital[1] trust [2] earnings Total interest equity
At January 1,
2018 (as
previously
published) 696 (917) 16,932 177,645 194,356 3,456 197,812
Impact of IFRS
9 [3] - - (138) 88 (50) - (50)
At January 1,
2018 (as
revised) 696 (917) 16,794 177,733 194,306 3,456 197,762
Comprehensive
income/(loss)
for the period - - 1,217 5,899 7,116 93 7,209
Transfer from
other
comprehensive
income - - (37) 37 - - -
Dividends - - - (3,971) (3,971) (208) (4,179)
Share-based
compensation[4] - (119) (238) 191 (166) - (166)
Other changes
in
non-controlling
interest - - - 46 46 641 687
At March 31,
2018 696 (1,036) 17,736 179,935 197,331 3,982 201,313
At January 1,
2017 683 (901) 11,298 175,566 186,646 1,865 188,511
Comprehensive
income/(loss)
for the period - - 3,242 3,538 6,780 116 6,896
Dividends - - - (3,903) (3,903) (31) (3,934)
Scrip dividends 4 - (4) 1,249 1,249 - 1,249
Share-based
compensation - 557 (510) (1) 46 - 46
Other changes
in
non-controlling
interest - - - (1) (1) (14) (15)
At March 31,
2017 687 (344) 14,026 176,448 190,817 1,936 192,753
1. See Note 4 "Share capital".
2. See Note 5 "Other reserves".
3. See Note 1 "Basis of preparation".
4. The amendments to IFRS 2 Share-based Payment became effective January 1,
2018. Following adoption of the amendments, components of share-based
payments that were previously classified as cash-settled are now classified
as equity-settled. This resulted in an increase of $172 million in the share
plan reserve within other reserves and a net increase of $125 million in
retained earnings.
1) <start_table>
CONSOLIDATED STATEMENT OF CASH FLOWS
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Income/(loss)
for the period 6,031 3,937 3,644
Adjustment for:
- Current tax 2,169
1,467 1,882
- Interest expense (net)
737 817 952
- Depreciation, depletion and
amortisation 5,334
5,796 7,838
- Exploration well write-offs[1]
109 541 284
- Net (gains)/losses on sale
and revaluation of non-current
assets and businesses (607) (1,319)
70
- Share of (profit)/loss of
joint ventures and associates (1,039) (1,034)
(1,198)
- Dividends received from joint
ventures and associates 750
1,647 776
- (Increase)/decrease in
inventories 281 (1,368)
266
- (Increase)/decrease in
current receivables[1] (683) (2,544)
721
- Increase/(decrease) in
current payables[1] (484)
2,040 (2,552)
- Derivative financial
instruments[1] (763) (140)
49
- Deferred tax, retirement
benefits, decommissioning and
other provisions[1] (51)
167 (2,143)
- Other[1] 12 (367)
9
Tax paid (2,369) (2,365)
(1,090)
Cash flow from operating
activities 9,42
7 7,275 9,508
Capital expenditure (4,789) (5,861)
(4,306)
Investments in joint ventures
and associates (415) (202)
(194)
Proceeds from sale of property,
plant and equipment and
businesses
747 2,866 122
Proceeds from sale of joint
ventures and associates 21
221 1
Interest received 156
157 123
Other
31 2,154 (70)
Cash flow from investing
activities (4,249) (665)
(4,324)
Net increase/(decrease) in debt
with maturity period
within three months 2,707
543 (290)
Other debt:
- New borrowings 241
120 364
- Repayments (1,390) (4,103)
(1,322)
Interest paid (889) (840)
(850)
Change in non-controlling
interest
674 6 2
Cash dividends paid to:
- Royal Dutch Shell plc
shareholders (3,971) (2,266)
(2,654)
- Non-controlling interest (124) (97)
(31)
Repurchases of shares -
- -
Shares held in trust: net
sales/(purchases) and dividends
received (894) (443)
(60)
Cash flow from financing
activities (3,646) (7,080)
(4,841)
Currency translation
differences relating to cash
and
cash equivalents 83
83 122
Increase/(decrease) in cash and
cash equivalents 1,615 (387)
465
Cash and cash equivalents at
beginning of period 20,312
20,699 19,130
Cash and cash equivalents at
end of period 21,927
20,312 19,595
<end_table>
1. Prior period comparatives within Cash flow from operating activities have been revised to conform with current year presentation. Overall, the revisions do not have an impact on the previously published Cash flow from operating activities. See Note 7 "Change in presentation of Consolidated Statement of Cash Flows".
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Basis of preparation
These unaudited Condensed Consolidated Interim Financial Statements ("Interim Statements") of Royal Dutch Shell plc ("the Company") and its subsidiaries (collectively referred to as "Shell") have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board and as adopted by the European Union, and on the basis of the same accounting principles as those used in the Annual Report and Form 20-F for the year ended December 31, 2017 (pages 142 to 148) as filed with the U.S. Securities and Exchange Commission, except for the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers on January 1, 2018, and should be read in conjunction with that filing.
IFRS 9 sets out the requirements for recognising and measuring financial assets, financial liabilities and certain contracts to buy or sell non-financial items. Furthermore, the standard facilitates use of hedge accounting and also results in different income recognition upon the sale of certain investments in securities. The adoption of IFRS 9 resulted in a decrease of $83 million in equity at January 1, 2018, mainly representing the recognition of additional provisions for impairment of receivables under the expected loss model. In addition, changing the measurement basis from amortised cost to fair value for certain financial assets resulted in an increase of $33 million in equity at January 1, 2018. Furthermore, a reclassification within equity between other reserves and retained earnings, primarily representing deferred cost of hedging, was recognised.
IFRS 15 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations, and revenue from contracts with customers that is distinguished from other sources. Shell has adopted IFRS 15 with effect from January 1, 2018, and has elected to apply the modified retrospective transition approach. Although IFRS 15 does not generally represent a change from Shell's current practice, the accounting for certain contracts, such as those with provisional pricing or take-or-pay arrangements, and underlifts and overlifts, has been identified as an area of change. However, these do not have a significant effect on Shell's accounting or disclosures, and therefore no transition adjustment is presented.
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 ("the Act"). Statutory accounts for the year ended December 31, 2017 were published in Shell's Annual Report and Form 20-F and a copy was delivered to the Registrar of Companies for England and Wales. The auditor's report on those accounts was unqualified, did not include a reference to any matters to which the auditor 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 Act.
2. Segment information
Segment earnings are presented on a current cost of supplies basis (CCS earnings), which is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance. 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. Sales between segments are based on prices generally equivalent to commercially available prices.
CONSOLIDATED STATEMENT OF CASH FLOWS
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Income/(loss) for the period 6,031 3,937 3,644
Adjustment for:
- Current tax 2,169 1,467 1,882
- Interest expense (net) 737 817 952
- Depreciation, depletion and
amortisation 5,334 5,796 7,838
- Exploration well write-offs[1] 109 541 284
- Net (gains)/losses on sale
and revaluation of non-current
assets and businesses (607) (1,319) 70
- Share of (profit)/loss of
joint ventures and associates (1,039) (1,034) (1,198)
- Dividends received from joint
ventures and associates 750 1,647 776
- (Increase)/decrease in
inventories 281 (1,368) 266
- (Increase)/decrease in
current receivables[1] (683) (2,544) 721
- Increase/(decrease) in
current payables[1] (484) 2,040 (2,552)
- Derivative financial
instruments[1] (763) (140) 49
- Deferred tax, retirement
benefits, decommissioning and
other provisions[1] (51) 167 (2,143)
- Other[1] 12 (367) 9
Tax paid (2,369) (2,365) (1,090)
Cash flow from operating
activities 9,427 7,275 9,508
Capital expenditure (4,789) (5,861) (4,306)
Investments in joint ventures
and associates (415) (202) (194)
Proceeds from sale of property,
plant and equipment and
businesses 747 2,866 122
Proceeds from sale of joint
ventures and associates 21 221 1
Interest received 156 157 123
Other 31 2,154 (70)
Cash flow from investing
activities (4,249) (665) (4,324)
Net increase/(decrease) in debt
with maturity period
within three months 2,707 543 (290)
Other debt:
- New borrowings 241 120 364
- Repayments (1,390) (4,103) (1,322)
Interest paid (889) (840) (850)
Change in non-controlling
interest 674 6 2
Cash dividends paid to:
- Royal Dutch Shell plc
shareholders (3,971) (2,266) (2,654)
- Non-controlling interest (124) (97) (31)
Repurchases of shares - - -
Shares held in trust: net
sales/(purchases) and dividends
received (894) (443) (60)
Cash flow from financing
activities (3,646) (7,080) (4,841)
Currency translation
differences relating to cash
and
cash equivalents 83 83 122
Increase/(decrease) in cash and
cash equivalents 1,615 (387) 465
Cash and cash equivalents at
beginning of period 20,312 20,699 19,130
Cash and cash equivalents at
end of period 21,927 20,312 19,595
3. Earnings per share
INFORMATION BY SEGMENT
$ million Quarters
Q4
Q1 2018 2017 Q1 2017
Third-party revenue
Integrated Gas 10,721 8,205 8,419
Upstream 2,572 2,644 1,609
Downstream 75,926 74,561 61,752
Corporate 16 12 16
Total third-party revenue[1] 89,235 85,422 71,796
Inter-segment revenue
Integrated Gas 1,088 1,199 805
Upstream 8,904 8,258 8,661
Downstream 794 1,281 726
Corporate - - -
CCS earnings
Integrated Gas 2,391 848 1,822
Upstream 1,854 2,050 (530)
Downstream 1,806 1,116 2,580
Corporate (227) (838) (410)
Total 5,824 3,176 3,462
1. First quarter 2018 includes $ 534 million of revenue from
sources other than from contracts with customers.
RECONCILIATION OF INCOME FOR THE PERIOD to CCS EARNINGS
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Income/(loss) attributable
to Royal Dutch Shell plc
shareholders 5,899 3,807 3,538
Income/(loss) attributable
to non-controlling interest 132 130 106
Income/(loss) for the period 6,031 3,937 3,644
Current cost of supplies
adjustment:
Purchases (274) (1,022) (217)
Taxation 67 287 60
Share of profit/(loss) of
joint ventures and
associates - (26) (25)
Current cost of supplies
adjustment1 (207) (761) (182)
CCS earnings 5,824 3,176 3,462
of which:
CCS earnings attributable to
Royal Dutch Shell plc
shareholders 5,703 3,082 3,381
CCS earnings attributable to
non-controlling interest 121 94 109
1. The adjustment attributable to Royal Dutch Shell plc shareholders
is a negative $196 million in the first quarter 2018
(Q4 2017: negative $725 million; Q1 2017: negative $157 million).
4. Share capital
EARNINGS PER SHARE
Quarters
Q1 2018 Q4 2017 Q1 2017
Income/(loss) attributable to
Royal Dutch Shell plc
shareholders
($ million) 5,899 3,807 3,538
Weighted average number of
shares used as the basis for
determining:
Basic earnings per share
(million) 8,304.6 8,274.6 8,154.8
Diluted earnings per share
(million) 8,377.2 8,354.5 8,222.9
At Royal Dutch Shell plc's Annual General Meeting on May 23, 2017, 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 EUR190 million (representing 2,714 million ordinary shares of EUR0.07 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 23, 2018, and the end of the Annual General Meeting to be held in 2018, unless previously renewed, revoked or varied by Royal Dutch Shell plc in a general meeting.
5. Other reserves
ISSUED AND FULLY PAID ORDINARY SHARES OF EUR0.07 EACH[1]
Number of shares Nominal value ($ million)
A B A B Total
At January 1, 2018 4,597,136,050 3,745,486,731 387 309 696
At March 31, 2018 4,597,136,050 3,745,486,731 387 309 696
At January 1, 2017 4,428,903,813 3,745,486,731 374 309 683
Scrip dividends 47,791,678 - 4 - 4
At March 31, 2017 4,476,695,491 3,745,486,731 378 309 687
1. Share capital at March 31, 2018 also included 50,000 issued and fully paid
sterling deferred shares of GBP1 each.
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, p.l.c., now The Shell Transport and Trading Company Limited, in 2005. The merger reserve increased in 2016 following the issuance of shares for the acquisition of BG Group plc. The capital redemption reserve was established in connection with repurchases of shares of Royal Dutch Shell plc. The share plan reserve is in respect of equity-settled share-based compensation plans.
6. Derivative financial instruments and debt excluding finance lease liabilities
As disclosed in the Consolidated Financial Statements for the year ended December 31, 2017, presented in the Annual Report and Form 20-F for that year, Shell is exposed to the risks of changes in fair value of its financial assets and liabilities. The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values at March 31, 2018 are consistent with those used in the year ended December 31, 2017, and the carrying amounts of derivative financial instruments measured using predominantly unobservable inputs have not changed materially since that date.
With effect from 2018, current and non-current derivative assets and liabilities are no longer presented as part of "Trade and other receivables" and "Trade and other payables", but separately disclosed on the Balance Sheet to provide more insight.
The table below provides the comparison of the fair value with the carrying amount of debt excluding finance lease liabilities, disclosed in accordance with IFRS 7 Financial Instruments: Disclosures.
OTHER RESERVES
Accumulated
Share Capital other
Merger premium redemption Share plan comprehensi
$ million reserve reserve reserve reserve ve income Total
At January 1, 2018
(as previously
published) 37,298 154 84 1,440 (22,044) 16,932
Impact of IFRS 9 - - - - (138) (138)
At January 1, 2018
(as revised) 37,298 154 84 1,440 (22,182) 16,794
Other comprehensive
income/(loss)
attributable to Royal
Dutch Shell plc
shareholders - - - - 1,217 1,217
Transfer from other
comprehensive income - - - - (37) (37)
Share-based
compensation - - - (238) - (238)
At March 31, 2018 37,298 154 84 1,202 (21,002) 17,736
At January 1, 2017 37,311 154 84 1,644 (27,895) 11,298
Other comprehensive
income/(loss)
attributable to Royal
Dutch Shell plc
shareholders - - - - 3,242 3,242
Scrip dividends (4) - - - - (4)
Share-based
compensation - - - (510) - (510)
At March 31, 2017 37,307 154 84 1,134 (24,653) 14,026
7. Change in presentation of Consolidated Statement of Cash Flows
With effect from 2018, the reconciliation from "Income for the period" to "Cash flow from operating activities" has been revised to provide more insight and improve correlation with the Balance Sheet and Statement of Income. "Cash flow from operating activities" itself remains unchanged.
Exploration well write-offs, previously presented under "Other", are shown separately. Changes in current and non-current derivative financial instruments, previously presented under "Decrease/(increase) in working capital" and "Other", are presented under a new line item "Derivative financial instruments". Changes in current retirement benefits and decommissioning provisions, previously included in "Increase/(decrease) in payables", are presented under "Deferred tax, retirement benefits, decommissioning and other provisions", together with changes in non-current balances. The impact of these changes is presented below.
DEBT EXCLUDING FINANCE LEASE LIABILITIES
$ million Mar 31, 2018 Dec 31, 2017
Carrying amount 73,350 70,140
Fair value[1] 76,581 74,650
1. Mainly determined from the prices quoted for these securities.
DEFINITIONS
A. Identified items
Identified items comprise: divestment gains and losses, impairments, fair value accounting of commodity derivatives and certain gas contracts, redundancy and restructuring, the impact of exchange rate movements on certain deferred tax balances, and other items. These items, either individually or collectively, can cause volatility to net income, in some cases driven by external factors, which may hinder the comparative understanding of Shell's financial results from period to period. The impact of identified items on Shell's CCS earnings is shown below.
$ million Quarters
Full year
Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017
Working capital movements (as
previously published) (1,828) 2,258 (2,467) (1,121) (3,158)
Impact of working capital
definition changes on:
- (Increase)/decrease in
current receivables (1,087) (238) 1,018 (585) (892)
- Increase/(decrease) in
current payables 1,350 444 172 (166) 1,800
Working capital movements (as
revised) (I) (1,565) 2,464 (1,277) (1,872) (2,250)
Cash flow from operating
activities excluding working
capital movements (as
previously published) 11,336 9,027 10,049 8,396 38,808
Impact of working capital
definition changes on:
- Exploration well write-offs 284 25 47 541 897
- Derivative financial
instruments 49 128 (1,076) (140) (1,039)
- Deferred tax, retirement
benefits, decommissioning and
other provisions (104) (129) (161) 12 (382)
- Other (492) (230) - 338 (384)
Cash flow from operating
activities excluding working
capital movements (as revised)
(II) 11,073 8,821 8,859 9,147 37,900
Cash flow from operating
activities (unchanged) (I +
II) 9,508 11,285 7,582 7,275 35,650
The categories above represent the nature of the items identified irrespective of whether the items relate to Shell subsidiaries or joint ventures and associates. The after-tax impact of identified items of joint ventures and associates is fully reported within "Share of profit of joint ventures and associates" on the Consolidated Statement of Income, and fully reported as "identified items before tax" in the table above. Identified items related to subsidiaries are consolidated and reported across appropriate lines of the Consolidated Statement of Income. Only pre-tax identified items reported by subsidiaries are taken into account in the calculation of "underlying operating expenses" (Definition G).
Fair value accounting of commodity derivatives and certain gas contracts: In the ordinary course of business, Shell enters into contracts to supply or purchase oil and gas products as well as power and environmental products. Derivative contracts are entered into for mitigation of resulting economic exposures (generally price exposure) and these 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; 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 contracts 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 are reported as identified items.
Impacts of exchange rate movements on tax balances represent the impact on tax balances of exchange rate movements arising on (a) the conversion to dollars of the local currency tax base of non-monetary assets and liabilities, as well as losses (this primarily impacts the Integrated Gas and Upstream segments) and (b) the conversion of dollar-denominated inter-segment loans to local currency, leading to taxable exchange rate gains or losses (this primarily impacts the Corporate segment).
Other identified items represent other credits or charges Shell's management assesses should be excluded to provide additional insight, such as the impact arising from the US tax reform legislation and certain provisions for onerous contracts or litigation.
B. Basic CCS earnings per share
Basic CCS earnings per share is calculated as CCS earnings attributable to Royal Dutch Shell plc shareholders (see Note 2), divided by the weighted average number of shares used as the basis for basic earnings per share (see Note 3).
C. Capital investment
Capital investment is a measure used to make decisions about allocating resources and assessing performance. It comprises capital expenditure, new investments in joint ventures and associates, exploration expense excluding well write-offs, new finance leases and investments in Integrated Gas, Upstream and Downstream equity securities, all of which on an accruals basis.
The reconciliation of "Capital expenditure" to "Capital investment" is as follows.
IDENTIFIED ITEMS
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Identified items before tax
- Divestment gains/(losses) 625 1,220 (70)
- Impairments (417) (426) (2,444)
- Fair value accounting of
commodity derivatives and
certain gas contracts 66 (652) 573
- Redundancy and
restructuring 63 (135) (76)
- Other 53 356 (89)
Total identified items before
tax 390 363 (2,106)
Tax impact
- Divestment gains/(losses) (10) 55 267
- Impairments 16 105 919
- Fair value accounting of
commodity derivatives and
certain gas contracts (8) 111 (69)
- Redundancy and
restructuring (16) 28 31
- Impact of exchange rate
movements on tax balances (45) (111) 535
- Other 54 (1,772) 22
Total tax impact (9) (1,584) 1,705
Identified items after tax
- Divestment gains/(losses) 615 1,275 197
- Impairments (401) (321) (1,525)
- Fair value accounting of
commodity derivatives and
certain gas contracts 58 (541) 504
- Redundancy and
restructuring 47 (107) (45)
- Impact of exchange rate
movements on tax balances (45) (111) 535
- Other 107 (1,416) (67)
Impact on CCS earnings 381 (1,221) (401)
Of which:
Integrated Gas (48) (788) 641
Upstream 303 400 (1,070)
Downstream 119 (280) 91
Corporate 7 (553) (63)
Impact on CCS earnings
attributable to
non-controlling interest - - (28)
Impact on CCS earnings
attributable to shareholders 381 (1,221) (373)
D. Divestments
Divestments is a measure used to monitor the progress of Shell's divestment programme. This measure comprises proceeds from sale of property, plant and equipment and businesses, joint ventures and associates, and other Integrated Gas, Upstream and Downstream investments in equity securities, reported in "Cash flow from investing activities", adjusted onto an accruals basis and for any share consideration received or contingent consideration initially recognised upon the related divestment, as well as proceeds from the sale of interests in entities while retaining control (for example, proceeds from sale of interest in Shell Midstream Partners, L.P.), which are included in "Change in non-controlling interest" within "Cash flow from financing activities".
In future periods, the proceeds from any disposal of shares received as divestment consideration, and proceeds from realisation of contingent consideration, will be included in "Cash flow from investing activities".
The reconciliation of "Proceeds from sale of property, plant and equipment and businesses" to "Divestments" is as follows.
A) <start_table>
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Proceeds from sale of property,
plant and equipment and businesses 747
2,866 122
Proceeds from sale of joint
ventures and associates
21 221 1
Share and contingent consideration1 -
217 -
Proceeds from sale of interests in
entities while retaining contro[l]
673 - -
Other[2] (153)
3,170 (94)
Divestments
1,288 6,474 29
Of which:
Integrated Gas
14 3,021 12
Upstream
574 3,254 17
Downstream
700 199 -
Corporate
- - -
1. This is valued at the date of the related divestment, instead of when these
shares are disposed of or the contingent consideration is realised.
2. Fourth quarter 2017 includes proceeds of $2,635 million from the sale of shares
in Woodside Petroleum Limited.
<end_table>
E. Return on average capital employed
Return on average capital employed (ROACE) measures the efficiency of Shell's utilisation of the capital that it employs. In this calculation, ROACE is defined as 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.
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Capital expenditure 4,789 5,861 4,306
Investments in joint ventures
and associates 415 202 194
Exploration expense, excluding
exploration wells written off 122 380 157
Finance leases 182 330 41
Other1 (325) 5 22
Capital investment 5,183 6,778 4,720
Of which:
Integrated Gas 1,311 1,043 805
Upstream 2,479 3,485 2,854
Downstream 1,369 2,208 1,046
Corporate 24 42 15
1. First quarter 2018 includes a payment of $380 million related to a payable
position that formed part of the acquisition of Marathon Oil Canada Corporation in
Canada in the second quarter 2017.
Return on average capital employed on a CCS basis excluding identified items is defined as the sum of CCS earnings attributable to shareholders excluding identified items for the current and previous three quarters, as a percentage of the average capital employed for the same period.
A) <start_table>
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
CCS earnings excluding
identified items 17,332
15,764 9,386
Capital employed - average 286,859
282,233 281,635
ROACE on a CCS basis excluding
identified items 6.0%
5.6% 3.3%
<end_table>
F. Gearing
Gearing is a key measure of Shell's capital structure and is defined as net debt as a percentage of total capital. With effect from 2018, the net debt calculation includes the fair value of derivative financial instruments used to hedge foreign exchange and interest rate risks relating to debt, and associated collateral balances. Management believes this amendment is useful, because it reduces the volatility of net debt caused by fluctuations in foreign exchange and interest rates, and eliminates the potential impact of related collateral payments or receipts. Debt-related derivative financial instruments are a subset of the derivative financial instrument assets and liabilities presented on the Balance Sheet. Collateral balances are reported under "Trade and other receivables" or "Trade and other payables" as appropriate. Prior period comparatives have been revised to reflect the change in net debt calculation.
A) <start_table>
$ million Quarters
Mar 31,
Mar 31, 2018 Dec 31, 2017 2017
Current debt 14,392 11,795 8,620
Non-current debt 73,630 73,870 83,009
Total debt1 88,022 85,665 91,629
Add: Debt-related derivative
financial instruments: net
liability/(asset) 2 42 591 3,892
Less: Cash and cash
equivalents (21,927) (20,312) (19,595)
Net debt 66,137 65,944 75,926
Add: Total equity 201,313 197,812 192,753
Total capital 267,450 263,756 268,679
Gearing3 24.7% 25.0% 28.3%
1. Includes finance lease liabilities of $14,672 million at March 31, 2018,
$15,524 million at December 31, 2017, and $14,704 million at March 31,
2017.
2. There were no collateral balances in the quarters presented.
3. Gearing as previously published at December 31, 2017, and at March 31,
2017, was 24.8% and 27.2% respectively. Gearing as previously published at
December 31, 2016, was 28.0% (29.1% as per revised net debt calculation).
<end_table>
G. Operating expenses
Operating expenses is a measure of Shell's cost management performance, comprising the following items from the Consolidated Statement of Income: production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses. Underlying operating expenses measures Shell's total operating expenses performance excluding identified items.
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Proceeds from sale of property,
plant and equipment and businesses 747 2,866 122
Proceeds from sale of joint
ventures and associates 21 221 1
Share and contingent consideration1 - 217 -
Proceeds from sale of interests in
entities while retaining contro[l] 673 - -
Other[2] (153) 3,170 (94)
Divestments 1,288 6,474 29
Of which:
Integrated Gas 14 3,021 12
Upstream 574 3,254 17
Downstream 700 199 -
Corporate - - -
1. This is valued at the date of the related divestment, instead of when these
shares are disposed of or the contingent consideration is realised.
2. Fourth quarter 2017 includes proceeds of $2,635 million from the sale of shares
in Woodside Petroleum Limited.
H. Free cash flow
Free cash flow is used to evaluate cash available for financing activities, including dividend payments, after investment in maintaining and growing our business. It is defined as the sum of "Cash flow from operating activities" and "Cash flow from investing activities" as shown on page 1.
I. Cash flow from operating activities excluding working capital movements
Working capital movements are defined as the sum of the following items in the Consolidated Statement of Cash Flows: (i) (increase)/decrease in inventories, (ii) (increase)/decrease in current receivables, and (iii) increase/(decrease) in current payables.
Cash flow from operating activities excluding working capital movements is a measure used by Shell to analyse its operating cash generation over time excluding the timing effects of changes in inventories and operating receivables and payables from period to period.
$ million Quarters
Q1 2018 Q4 2017 Q1 2017
Income for current and
previous three quarters 15,822 13,435 7,966
Interest expense after tax 2,645 2,995 3,268
Income before interest expense 18,467 16,430 11,234
Capital employed - opening 284,382 280,988 278,887
Capital employed - closing 289,335 283,477 284,382
Capital employed - average 286,859 282,233 281,635
ROACE 6.4% 5.8% 4.0%
CAUTIONARY STATEMENT
All amounts shown throughout this announcement 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 legal entities. In this announcement "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 Royal Dutch Shell plc and subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ''Subsidiaries'', "Shell subsidiaries" and "Shell companies" as used in this announcement refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as "joint ventures" and "joint operations", respectively. Entities 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 an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) 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 "aim", "ambition", ''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 announcement, 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. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement 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, 2017 (available at www.shell.com/investor and http://www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, April 26, 2018. 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 announcement.
This Report contains references to Shell's website. These references are for the readers' convenience only. Shell is not incorporating by reference any information posted on http://www.shell.com .
We may have used certain terms, such as resources, in this announcement 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 http://www.sec.gov .
This announcement contains inside information.
April 26, 2018
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:
Linda Szymanski
Company Secretary
Investor Relations:
International +31(0)70-377-4540
North America +1-832-337-2034
Media:
International +44(0)207-934-5550
USA +1-832-337-4355
LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70
Classification: Inside Information
SOURCE Royal Dutch Shell plc
