UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2021
Commission File Number: 1-32575
Royal Dutch Shell plc
(Exact name of registrant as specified in its charter)
England and Wales
(Jurisdiction of incorporation or organization)
Carel van Bylandtlaan 30, 2596 HR, The Hague
The Netherlands
Tel No: 011 31 70 377 9111
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form
40-F.
Form 20-F þ Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Royal Dutch Shell plc (the “Registrant”) is filing the following exhibits on this Report on Form 6-K, each of which is hereby incorporated by reference:
| Exhibit | |||||
| No. | Description | ||||
| Regulatory release. | |||||
Royal Dutch Shell plc – Three month period ended March 31, 2021 Unaudited Condensed Interim Financial Report. | |||||
This Unaudited Condensed Interim Financial Report contains the Unaudited Condensed Consolidated Interim Financial Statements of the Registrant and its subsidiaries for the three month period ended March 31, 2021, and Business Review in respect of such period. This report on Form 6-K contains the Unaudited Condensed Interim Financial Report required to keep current the Registrant's registration statement on Form F-3.
This Report on Form 6-K is incorporated by reference into:
a) the Registration Statement on Form F-3 of Royal Dutch Shell plc and Shell International Finance B.V. (Registration Numbers 333-254137 and 333-254137-01); and
b) the Registration Statements on Form S-8 of Royal Dutch Shell plc (Registration Numbers 333-126715, 333-141397, 333-171206, 333-192821, 333-200953, 333-215273, 333-222813, 333-228137 and 333-254139).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Royal Dutch Shell plc
(Registrant)
| By: | /s/ Linda M. Coulter | ||||
| Name: Linda M. Coulter | |||||
| Title: Company Secretary | |||||
Date: April 29, 2021
Exhibit 99.1
Regulatory release
Regulatory release
Three month period ended March 31, 2021
Unaudited Condensed Interim Financial Report
Unaudited Condensed Interim Financial Report
On April 29, 2021, Royal Dutch Shell plc released the Unaudited Condensed Interim Financial Report for the three month period ended March 31, 2021, of Royal Dutch Shell plc and its subsidiaries (collectively, “Shell”).
| Contact – Investor Relations | |||||
| International: | +31 (0)70 377 4540 | ||||
| North America: | +1 832 337 2034 | ||||
| Contact – Media | |||||
| International: | +44 (0) 207 934 5550 | ||||
| USA: | +1 832 337 4355 | ||||
Exhibit 99.2
Royal Dutch Shell plc
Three month period ended March 31, 2021
Unaudited Condensed Interim Financial Report
Unaudited Condensed Interim Financial Report
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 1
ROYAL DUTCH SHELL PLC 1ST QUARTER 2021 UNAUDITED RESULTS | |||||
SUMMARY OF UNAUDITED RESULTS
| Quarters | $ million | |||||||||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | %¹ | Reference | ||||||||||||||||||||||
| 5,660 | (4,014) | (24) | +241 | Income/(loss) attributable to shareholders | ||||||||||||||||||||||
| 4,345 | (4,478) | 2,756 | +197 | CCS earnings attributable to shareholders | Note 2 | |||||||||||||||||||||
| 3,234 | 393 | 2,860 | +724 | Adjusted Earnings² | A | |||||||||||||||||||||
| 8,294 | 6,287 | 14,851 | +32 | Cash flow from operating activities | ||||||||||||||||||||||
| (590) | (5,406) | (2,718) | Cash flow from investing activities | |||||||||||||||||||||||
| 7,704 | 882 | 12,133 | Free cash flow | G | ||||||||||||||||||||||
| 3,974 | 5,503 | 4,970 | Cash capital expenditure | C | ||||||||||||||||||||||
| 9,436 | 9,652 | 8,618 | -2 | Operating expenses | F | |||||||||||||||||||||
| 8,724 | 8,544 | 8,600 | +2 | Underlying operating expenses | F | |||||||||||||||||||||
| (4.7)% | (6.8)% | 4.6% | ROACE (Net income basis) | D | ||||||||||||||||||||||
| 3.0% | 2.9% | 6.1% | ROACE (CCS basis excluding identified items) | D | ||||||||||||||||||||||
| 71,252 | 75,386 | 74,413 | Net debt | E | ||||||||||||||||||||||
| 29.9% | 32.2% | 28.9% | Gearing | E | ||||||||||||||||||||||
| 3,489 | 3,371 | 3,719 | +4 | Total production available for sale (thousand boe/d) | ||||||||||||||||||||||
| 0.73 | (0.52) | 0.00 | +240 | Basic earnings per share ($) | ||||||||||||||||||||||
| 0.42 | 0.05 | 0.37 | +740 | Adjusted Earnings per share ($) | B | |||||||||||||||||||||
| 0.1735 | 0.1665 | 0.16 | +4 | Dividend per share ($) | ||||||||||||||||||||||
1. Q1 on Q4 change.
2. Adjusted Earnings is defined as income/(loss) attributable to shareholders plus cost of supplies adjustment (see Note 2) and excluding identified items (see Reference A).
First quarter 2021 income attributable to Royal Dutch Shell plc shareholders was $5.7 billion, which included net gains on sale of assets of $1.4 billion and gains of $0.4 billion due to the fair value accounting of commodity derivatives, partly offset by redundancy and restructuring charges of $0.5 billion, mainly related to the restructuring plan named Reshape.
Adjusted Earnings for the quarter were $3.2 billion. Cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders for the first quarter 2021 was negative $1.3 billion. The Texas winter storm had an impact on our operations and had an aggregate adverse impact of around $0.2 billion on Adjusted Earnings.
Cash flow from operating activities for the first quarter 2021 was $8.3 billion, which included negative working capital movements of $4.4 billion. Cash flow from investing activities for the quarter was an outflow of $0.6 billion, driven mainly by capital expenditure and partly offset by proceeds from sale of property, plant and equipment and businesses.
Compared with the fourth quarter 2020, current quarter Adjusted Earnings reflected higher realised oil and LNG prices, chemicals and refining margins, Oil Products trading contributions and lower depreciation.
Compared with the first quarter 2020, current quarter Adjusted Earnings reflected higher realised oil prices and chemicals margins partly offset by lower realised refining and marketing margins.
At the end of the first quarter 2021, net debt was $71.3 billion, compared with $75.4 billion at the end of the fourth quarter 2020, mainly driven by free cash flow generation in the quarter. Gearing was 29.9% at the end of the first quarter 2021,
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 2
compared with 32.2% at the end of the fourth quarter 2020, mainly driven by net debt reduction, earnings and remeasurements of pensions.
Dividends declared to Royal Dutch Shell plc shareholders for the quarter amount to $0.1735 per share, an increase of around 4% from the last quarter.
With effect from the first quarter 2021, business performance analysis of the current quarter compared with the previous quarter is introduced, which will replace, starting from the second quarter 2021, business performance analysis compared with the same quarter of the previous year. This change is introduced to enable better understanding of our business performance sequentially from quarter to quarter.
Supplementary financial and operational disclosure and a separate press release for this quarter are available at www.shell.com/investors1. With effect from the first quarter 2021, new disclosures are included in these supplementary financial and operational disclosures to improve understanding of our businesses. See Reference J for reconciliations of new Additional Performance (Non-GAAP) Measures introduced in these disclosures.
1.Not incorporated by reference.
FIRST QUARTER 2021 PORTFOLIO DEVELOPMENTS
Integrated Gas
In March 2021, QGC Common Facilities Company Pty Ltd, a wholly-owned subsidiary of Shell, completed the sale of a 26.25% interest in the Queensland Curtis LNG (QCLNG) Common Facilities to Global Infrastructure Partners Australia for $2.5 billion, following the receipt of regulatory approval.
Upstream
In January 2021, Shell completed the sale of its 30% interest in Oil Mining Lease 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited, a related company of Heirs Holdings Limited and Transnational Corporation of Nigeria Plc, for a consideration of $533 million. A total of $453 million was paid by completion with the balance to be paid over an agreed period.
In February 2021, an agreement was reached with publicly listed Canadian energy company Crescent Point Energy Corp. to sell the Duvernay shale light oil position in Alberta, Canada. The transaction completed on April 1, 2021. The consideration received consisted of $533 million in cash and 50 million shares in Crescent Point Energy common stock (TSX: CPG) valued at $208 million based on the closing price on March 31, 2021.
In March 2021, Shell Egypt and one of its affiliates signed an agreement with a consortium made up of subsidiaries of Cheiron Petroleum Corporation and Cairn Energy plc to acquire Shell’s upstream assets in Egypt’s Western Desert for a base consideration of $646 million and additional payments of up to $280 million between 2021 and 2024, contingent on the oil price and the results of further exploration. The transaction is subject to government and regulatory approvals and is expected to complete in the second half of 2021.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 3
PERFORMANCE BY SEGMENT
INTEGRATED GAS
| Quarters | $ million | |||||||||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | %¹ | |||||||||||||||||||||||
| 2,527 | 20 | 1,812 | +12,638 | Segment earnings | ||||||||||||||||||||||
| 1,112 | (1,089) | (331) | Of which: Identified items (Reference A) | |||||||||||||||||||||||
| 1,415 | 1,109 | 2,143 | +28 | Adjusted Earnings | ||||||||||||||||||||||
| 2,491 | 2,203 | 3,986 | +13 | Cash flow from operating activities | ||||||||||||||||||||||
| 3,653 | 2,195 | 3,352 | +66 | Cash flow from operating activities excluding working capital movements (Reference H) | ||||||||||||||||||||||
| 1,015 | 1,664 | 882 | Cash capital expenditure (Reference C) | |||||||||||||||||||||||
| 170 | 156 | 162 | +9 | Liquids production available for sale (thousand b/d) | ||||||||||||||||||||||
| 4,621 | 4,555 | 4,596 | +1 | Natural gas production available for sale (million scf/d) | ||||||||||||||||||||||
| 967 | 942 | 955 | +3 | Total production available for sale (thousand boe/d) | ||||||||||||||||||||||
| 8.16 | 8.21 | 8.88 | -1 | LNG liquefaction volumes (million tonnes) | ||||||||||||||||||||||
| 15.80 | 16.89 | 19.00 | -6 | LNG sales volumes (million tonnes) | ||||||||||||||||||||||
1. Q1 on Q4 change.
First quarter segment earnings were $2,527 million. This included gains on sale of assets of $997 million and gains of $263 million due to the fair value accounting of commodity derivatives. These gains are part of identified items (see Reference A). Adjusted Earnings for the quarter were $1,415 million. Net financial impact from the Texas winter storm was limited as positive trading margins were offset by higher operating expenses ($0.4 billion post-tax) related to provisions for counterparty credit risk.
Cash flow from operating activities for the quarter was $2,491 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, as well as favourable commodity derivatives impacts of $867 million. This was partly offset by negative working capital movements of $1,162 million.
Compared with the fourth quarter 2020, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for oil and LNG, partly offset by higher operating expenses related to credit provisions.
Compared with the fourth quarter 2020, total oil and gas production increased by 3% mainly due to the restart of production at the Prelude floating LNG operations in Australia. LNG liquefaction volumes decreased by 1% due to cargo timing, partly offset by the restart of production at the Prelude floating LNG operations in Australia.
Compared with the first quarter 2020, Integrated Gas Adjusted Earnings primarily reflected higher operating expenses related to credit provisions, lower contributions from marketing and trading and favourable deferred tax movements in the first quarter 2020.
Compared with the first quarter 2020, total oil and gas production increased by 1% mainly due to new fields and lower maintenance. LNG liquefaction volumes decreased by 8% mainly as a result of feedgas constraints and maintenance activities, partly offset by higher production at the Prelude floating LNG operations in Australia.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 4
UPSTREAM
| Quarters | $ million | ||||||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | %¹ | ||||||||||||||||||||
| 1,096 | (2,091) | (863) | +152 | Segment earnings | |||||||||||||||||||
| 133 | (1,344) | (1,154) | Of which: Identified items (Reference A) | ||||||||||||||||||||
| 963 | (748) | 291 | +229 | Adjusted Earnings | |||||||||||||||||||
| 4,108 | 2,010 | 5,607 | +104 | Cash flow from operating activities | |||||||||||||||||||
| 4,702 | 2,890 | 3,718 | +63 | Cash flow from operating activities excluding working capital movements (Reference H) | |||||||||||||||||||
| 1,534 | 1,654 | 2,521 | Cash capital expenditure (Reference C) | ||||||||||||||||||||
| 1,579 | 1,537 | 1,730 | +3 | Liquids production available for sale (thousand b/d) | |||||||||||||||||||
| 5,126 | 4,837 | 5,680 | +6 | Natural gas production available for sale (million scf/d) | |||||||||||||||||||
| 2,462 | 2,371 | 2,710 | +4 | Total production available for sale (thousand boe/d) | |||||||||||||||||||
1. Q1 on Q4 change.
First quarter segment earnings were $1,096 million. This included a net gain of $411 million related to the sale of assets, and a charge of $232 million related to the impact of the weakening Brazilian real on a deferred tax position. These net gains are part of identified items (see Reference A). Adjusted Earnings were $963 million.
Cash flow from operating activities for the quarter was $4,108 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation.
Compared with the fourth quarter 2020, Upstream Adjusted Earnings reflected higher realised oil prices, lower depreciation, and the absence of the unfavourable deferred tax movements which impacted the fourth quarter 2020. These were partly offset by comparative adverse currency effects.
Compared with the fourth quarter 2020, total production increased by 4%, mainly due to favourable gas seasonal effects and the impact of hurricanes in the US Gulf of Mexico in the fourth quarter 2020.
Compared with the first quarter 2020, Upstream Adjusted Earnings reflected higher realised oil prices, and lower depreciation.
Compared with the first quarter 2020, total production decreased by 9%, mainly due to the impact of higher maintenance and divestments. The impact of field declines was largely offset by growth from new fields.
OIL PRODUCTS
| Quarters | $ million | ||||||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | %¹ | ||||||||||||||||||||
| 650 | (1,775) | 2,211 | +137 | Segment earnings² | |||||||||||||||||||
| (227) | (2,315) | 849 | Of which: Identified items (Reference A) | ||||||||||||||||||||
| 877 | 540 | 1,363 | +62 | Adjusted Earnings² | |||||||||||||||||||
| Of which: | |||||||||||||||||||||||
| (105) | (287) | 158 | +63 | Refining & Trading³ | |||||||||||||||||||
| 982 | 828 | 1,205 | +19 | Marketing³ | |||||||||||||||||||
| 893 | 1,198 | 4,878 | -25 | Cash flow from operating activities | |||||||||||||||||||
| 3,313 | 782 | 353 | +324 | Cash flow from operating activities excluding working capital movements (Reference H) | |||||||||||||||||||
| 668 | 1,310 | 580 | Cash capital expenditure (Reference C) | ||||||||||||||||||||
| 1,751 | 1,940 | 2,397 | -10 | Refinery processing intake (thousand b/d) | |||||||||||||||||||
| 4,164 | 4,781 | 5,278 | -13 | Oil Products sales volumes (thousand b/d) | |||||||||||||||||||
1. Q1 on Q4 change.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 5
2. Earnings are presented on a CCS basis (see Note 2).
3. As of Q1 2021, changes in the cost and activity allocation between Marketing and Refining & Trading resulted in a net charge of $170 million to Refining & Trading, with an offsetting amount in Marketing. This change does not impact consolidated Oil Products Adjusted Earnings.
First quarter segment earnings were $650 million. This included redundancy and restructuring costs of $284 million, which are part of identified items (see Reference A). Adjusted Earnings were $877 million.
Cash flow from operating activities for the first quarter 2021 was $893 million, primarily driven by Adjusted Earnings before depreciation and by cost-of-sales adjustments, partly offset by negative working capital movements of $2,420 million, and cash outflows for commodity derivatives of $200 million.
Compared with the fourth quarter 2020, Oil Products Adjusted Earnings reflected higher contributions from trading and optimisation, higher realised refining margins, and lower operating expenses. These were partly offset by the absence of the favourable deferred tax movements in the fourth quarter 2020.
Oil Products sales volumes decreased due to the impact of further lockdowns arising from COVID-19, and the Texas winter storm, compared with the fourth quarter 2020.
▪Refining & Trading Adjusted Earnings reflected higher realised refining margins, and higher contributions from trading and optimisation. These were partly offset by the absence of the favourable deferred tax movements in the fourth quarter 2020.
▪Marketing Adjusted Earnings reflected lower operating expenses.
Refinery utilisation remained at 72% compared with the fourth quarter 2020, with the impact of the Texas winter storm in the first quarter 2021, offset by the comparative effect of the Convent Refinery shutdown in the fourth quarter 2020.
Compared with the first quarter 2020, Oil Products Adjusted Earnings reflected lower realised refining and marketing margins due to a weaker macroeconomic environment and the COVID-19 pandemic.
▪Refining & Trading Adjusted Earnings reflected lower realised refining margins, partly offset by lower depreciation.
▪Marketing Adjusted Earnings reflected lower margins.
Refinery utilisation was 72% compared with 81% in the first quarter 2020, mainly due to lower demand and economic optimisation of the plants, as well as the impact of the Texas winter storm.
CHEMICALS
| Quarters | $ million | ||||||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | %¹ | ||||||||||||||||||||
| 689 | 367 | 146 | +88 | Segment earnings² | |||||||||||||||||||
| (41) | (14) | (2) | Of which: Identified items (Reference A) | ||||||||||||||||||||
| 730 | 381 | 148 | +92 | Adjusted Earnings² | |||||||||||||||||||
| 324 | 774 | (178) | -58 | Cash flow from operating activities | |||||||||||||||||||
| 1,045 | 775 | 189 | +35 | Cash flow from operating activities excluding working capital movements (Reference H) | |||||||||||||||||||
| 730 | 830 | 846 | Cash capital expenditure (Reference C) | ||||||||||||||||||||
| 3,583 | 3,718 | 3,871 | -4 | Chemicals sales volumes (thousand tonnes) | |||||||||||||||||||
1. Q1 on Q4 change.
2. Earnings are presented on a CCS basis (see Note 2).
First quarter segment earnings were $689 million.
Cash flow from operating activities for the quarter was $324 million, primarily driven by Adjusted Earnings before depreciation as well as negative working capital movements of $721 million.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 6
Compared with the fourth quarter 2020, Chemicals Adjusted Earnings reflected higher realised margins in base chemicals and intermediates from a stronger price environment.
Chemicals manufacturing plant utilisation remained at 79% compared with the fourth quarter 2020, with the impact of the Texas winter storm at the Deer Park site offsetting comparatively fewer maintenance activities.
Compared with the first quarter 2020, Chemicals Adjusted Earnings reflected higher realised margins in base chemicals and intermediates from a stronger price environment.
Chemicals manufacturing plant utilisation was 79% compared with 84% in the first quarter 2020, mainly due to the Texas winter storm.
CORPORATE
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| (531) | (954) | (453) | Segment earnings | |||||||||||||||||
| 134 | (118) | 535 | Of which: Identified items (Reference A) | |||||||||||||||||
| (666) | (836) | (989) | Adjusted Earnings | |||||||||||||||||
| 478 | 102 | 559 | Cash flow from operating activities | |||||||||||||||||
| (30) | (17) | (239) | Cash flow from operating activities excluding working capital movements (Reference H) | |||||||||||||||||
First quarter segment earnings were an expense of $531 million. This included a gain of $134 million from the deferred tax impact of the weakening Brazilian real on financing positions, which is part of identified items (see Reference A). Adjusted earnings for the quarter were an expense of $666 million.
Compared with the fourth quarter 2020, Adjusted Earnings reflected a favourable movement in tax credits partly offset by adverse currency exchange rate effects.
Compared with the first quarter 2020, Adjusted Earnings reflected favourable currency exchange rate effects and lower net interest expense.
OUTLOOK FOR THE SECOND QUARTER 2021
As a result of the COVID-19 pandemic, there continues to be significant uncertainty in the macroeconomic conditions with an expected negative impact on demand for oil, gas and related products. The second quarter 2021 outlook provides ranges for operational and financial metrics based on current expectations, but these are subject to change in the light of evolving market conditions. Due to demand or regulatory requirements and/or constraints in infrastructure, Shell may need to take measures to curtail or reduce oil and/or gas production, LNG liquefaction as well as utilisation of refining and chemicals plants and similarly sales volumes could be impacted. Such measures will likely have a variety of impacts on our operational and financial metrics.
Integrated Gas production is expected to be approximately 880 - 940 thousand boe/d. LNG liquefaction volumes are expected to be approximately 7.6 - 8.2 million tonnes.
Upstream production is expected to be approximately 2,150 - 2,350 thousand boe/d, reflecting lower seasonal gas demand and divestment impacts.
Refinery utilisation is expected to be approximately 73% - 81%.
Oil Products sales volumes are expected to be approximately 4,000 - 5,000 thousand b/d.
Chemicals manufacturing plant utilisation is expected to be approximately 76% - 84%.
Chemicals sales volumes are expected to be approximately 3,500 - 3,800 thousand tonnes.
Corporate Adjusted Earnings are expected to be a net expense of approximately $600 - $700 million in the second quarter 2021 and a net expense of approximately $2,400 - $2,800 million for the full year 2021. This excludes the impact of currency exchange rate effects.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 7
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 55,665 | 43,989 | 60,029 | Revenue¹ | |||||||||||||||||
| 995 | 629 | 854 | Share of profit of joint ventures and associates | |||||||||||||||||
| 2,455 | 411 | 76 | Interest and other income² | |||||||||||||||||
| 59,115 | 45,028 | 60,959 | Total revenue and other income | |||||||||||||||||
| 34,369 | 28,511 | 43,213 | Purchases | |||||||||||||||||
| 6,808 | 6,701 | 5,982 | Production and manufacturing expenses | |||||||||||||||||
| 2,462 | 2,751 | 2,393 | Selling, distribution and administrative expenses | |||||||||||||||||
| 166 | 199 | 243 | Research and development | |||||||||||||||||
| 285 | 508 | 294 | Exploration | |||||||||||||||||
| 5,896 | 9,573 | 7,093 | Depreciation, depletion and amortisation² | |||||||||||||||||
| 892 | 908 | 1,118 | Interest expense | |||||||||||||||||
| 50,878 | 49,152 | 60,336 | Total expenditure | |||||||||||||||||
| 8,237 | (4,124) | 623 | Income/(loss) before taxation | |||||||||||||||||
| 2,453 | (168) | 646 | Taxation charge/(credit) | |||||||||||||||||
| 5,784 | (3,956) | (23) | Income/(loss) for the period¹ | |||||||||||||||||
| 124 | 58 | 1 | Income/(loss) attributable to non-controlling interest | |||||||||||||||||
| 5,660 | (4,014) | (24) | Income/(loss) attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
| 0.73 | (0.52) | 0.00 | Basic earnings per share ($)³ | |||||||||||||||||
| 0.72 | (0.52) | 0.00 | Diluted earnings per share ($)³ | |||||||||||||||||
1. See Note 2 “Segment information”.
2. See Note 7 “Other notes to the Condensed Consolidated Interim Financial Statements”.
3. See Note 3 “Earnings per share”.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 8
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 5,784 | (3,956) | (23) | Income/(loss) for the period | |||||||||||||||||
| Other comprehensive income/(loss) net of tax: | ||||||||||||||||||||
| Items that may be reclassified to income in later periods: | ||||||||||||||||||||
| (852) | 2,280 | (3,935) | – Currency translation differences | |||||||||||||||||
| (14) | 3 | (28) | – Debt instruments remeasurements | |||||||||||||||||
| 132 | 54 | (152) | – Cash flow hedging gains/(losses) | |||||||||||||||||
| 171 | (170) | — | – Net investment hedging gains/(losses) | |||||||||||||||||
| (34) | 3 | 101 | – Deferred cost of hedging | |||||||||||||||||
| (56) | 39 | (60) | – Share of other comprehensive income/(loss) of joint ventures and associates | |||||||||||||||||
| (652) | 2,208 | (4,074) | Total | |||||||||||||||||
| Items that are not reclassified to income in later periods: | ||||||||||||||||||||
| 4,628 | 1,045 | 1,756 | – Retirement benefits remeasurements | |||||||||||||||||
| 40 | 88 | (137) | – Equity instruments remeasurements | |||||||||||||||||
| (25) | 6 | 48 | – Share of other comprehensive income/(loss) of joint ventures and associates | |||||||||||||||||
| 4,643 | 1,140 | 1,667 | Total | |||||||||||||||||
| 3,991 | 3,347 | (2,407) | Other comprehensive income/(loss) for the period | |||||||||||||||||
| 9,775 | (609) | (2,430) | Comprehensive income/(loss) for the period | |||||||||||||||||
| 121 | 134 | (123) | Comprehensive income/(loss) attributable to non-controlling interest | |||||||||||||||||
| 9,653 | (743) | (2,307) | Comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 9
CONDENSED CONSOLIDATED BALANCE SHEET
| $ million | ||||||||||||||
| March 31, 2021 | December 31, 2020 | |||||||||||||
| Assets | ||||||||||||||
| Non-current assets | ||||||||||||||
| Intangible assets | 22,872 | 22,822 | ||||||||||||
| Property, plant and equipment | 208,298 | 210,847 | ||||||||||||
| Joint ventures and associates | 22,537 | 22,451 | ||||||||||||
| Investments in securities | 3,341 | 3,222 | ||||||||||||
Deferred tax | 13,871 | 16,311 | ||||||||||||
Retirement benefits¹ | 5,845 | 2,474 | ||||||||||||
| Trade and other receivables | 7,396 | 7,641 | ||||||||||||
Derivative financial instruments² | 1,681 | 2,805 | ||||||||||||
| 285,841 | 288,573 | |||||||||||||
| Current assets | ||||||||||||||
| Inventories | 22,680 | 19,457 | ||||||||||||
| Trade and other receivables | 40,142 | 33,625 | ||||||||||||
Derivative financial instruments² | 5,752 | 5,783 | ||||||||||||
| Cash and cash equivalents | 30,985 | 31,830 | ||||||||||||
| 99,559 | 90,695 | |||||||||||||
| Total assets | 385,400 | 379,268 | ||||||||||||
| Liabilities | ||||||||||||||
| Non-current liabilities | ||||||||||||||
| Debt | 87,828 | 91,115 | ||||||||||||
| Trade and other payables | 2,670 | 2,304 | ||||||||||||
Derivative financial instruments² | 554 | 420 | ||||||||||||
Deferred tax | 11,285 | 10,463 | ||||||||||||
Retirement benefits1,3 | 12,348 | 15,605 | ||||||||||||
| Decommissioning and other provisions | 27,330 | 27,310 | ||||||||||||
| 142,016 | 147,217 | |||||||||||||
| Current liabilities | ||||||||||||||
| Debt | 14,541 | 16,899 | ||||||||||||
| Trade and other payables³ | 49,456 | 44,572 | ||||||||||||
Derivative financial instruments² | 5,260 | 5,308 | ||||||||||||
| Income taxes payable³ | 3,372 | 3,111 | ||||||||||||
| Decommissioning and other provisions | 3,802 | 3,624 | ||||||||||||
| 76,431 | 73,514 | |||||||||||||
| Total liabilities | 218,447 | 220,731 | ||||||||||||
| Equity attributable to Royal Dutch Shell plc shareholders | 163,714 | 155,310 | ||||||||||||
| Non-controlling interest | 3,239 | 3,227 | ||||||||||||
| Total equity | 166,953 | 158,537 | ||||||||||||
| Total liabilities and equity | 385,400 | 379,268 | ||||||||||||
1. See Note 7 "Other notes to the Condensed Consolidated Interim Financial Statements".
2. See Note 6 “Derivative financial instruments and debt excluding lease liabilities”.
3. As from January 1, 2021 the 'Retirement benefits' liability has been classified under non-current liabilities (previously partly presented within current liabilities) and taxes payable not related to income tax are presented within 'Trade and other payables' (previously 'Taxes payable'). Prior period comparatives have been revised to conform with current year presentation. See Note 7.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 10
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Equity attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||||||||||||||||||||||||||||||||
| $ million | Share capital¹ | Shares held in trust | Other reserves² | Retained earnings | Total | Non-controlling interest | Total equity | ||||||||||||||||||||||||||||||||||||||||
| At January 1, 2021 | 651 | (709) | 12,752 | 142,616 | 155,310 | 3,227 | 158,537 | ||||||||||||||||||||||||||||||||||||||||
| Comprehensive income/(loss) for the period | — | — | 3,994 | 5,660 | 9,653 | 121 | 9,775 | ||||||||||||||||||||||||||||||||||||||||
| Dividends³ | — | — | — | (1,289) | (1,289) | (125) | (1,414) | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | 356 | (371) | 55 | 41 | — | 41 | ||||||||||||||||||||||||||||||||||||||||
| Other changes in non-controlling interest | — | — | — | (1) | (1) | 15 | 15 | ||||||||||||||||||||||||||||||||||||||||
| At March 31, 2021 | 651 | (352) | 16,375 | 147,041 | 163,714 | 3,239 | 166,953 | ||||||||||||||||||||||||||||||||||||||||
| At January 1, 2020 | 657 | (1,063) | 14,451 | 172,431 | 186,476 | 3,987 | 190,463 | ||||||||||||||||||||||||||||||||||||||||
| Comprehensive income/(loss) for the period | — | — | (2,283) | (24) | (2,307) | (123) | (2,430) | ||||||||||||||||||||||||||||||||||||||||
| Transfer from other comprehensive income | — | — | (6) | 6 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Dividends3 | — | — | — | (3,482) | (3,482) | (110) | (3,591) | ||||||||||||||||||||||||||||||||||||||||
| Repurchases of shares | (5) | — | 5 | (1,006) | (1,006) | — | (1,006) | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | 585 | (374) | (253) | (43) | — | (43) | ||||||||||||||||||||||||||||||||||||||||
| Other changes in non-controlling interest | — | — | — | 1 | 1 | (14) | (14) | ||||||||||||||||||||||||||||||||||||||||
| At March 31, 2020 | 652 | (479) | 11,794 | 167,672 | 179,639 | 3,740 | 183,379 | ||||||||||||||||||||||||||||||||||||||||
1. See Note 4 “Share capital”.
2. See Note 5 “Other reserves”.
3. The amount charged to retained earnings is based on prevailing exchange rates on payment date.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 11
CONSOLIDATED STATEMENT OF CASH FLOWS
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 8,237 | (4,124) | 623 | Income before taxation for the period | |||||||||||||||||
| Adjustment for: | ||||||||||||||||||||
| 757 | 716 | 897 | – Interest expense (net) | |||||||||||||||||
| 5,896 | 9,573 | 7,093 | – Depreciation, depletion and amortisation | |||||||||||||||||
| 136 | 199 | 83 | – Exploration well write-offs | |||||||||||||||||
| (2,073) | (162) | 106 | – Net (gains)/losses on sale and revaluation of non-current assets and businesses | |||||||||||||||||
| (995) | (629) | (854) | – Share of (profit)/loss of joint ventures and associates | |||||||||||||||||
| 580 | 982 | 531 | – Dividends received from joint ventures and associates | |||||||||||||||||
| (3,426) | (1,809) | 9,594 | – (Increase)/decrease in inventories | |||||||||||||||||
| (6,829) | (107) | 6,314 | – (Increase)/decrease in current receivables | |||||||||||||||||
| 5,865 | 1,579 | (8,430) | – Increase/(decrease) in current payables | |||||||||||||||||
| 185 | 78 | (171) | – Derivative financial instruments | |||||||||||||||||
| 109 | 212 | (91) | – Retirement benefits | |||||||||||||||||
| 77 | 771 | (102) | – Decommissioning and other provisions | |||||||||||||||||
| 583 | (355) | 579 | – Other | |||||||||||||||||
| (809) | (638) | (1,321) | Tax paid | |||||||||||||||||
| 8,294 | 6,287 | 14,851 | Cash flow from operating activities | |||||||||||||||||
| (3,885) | (5,206) | (4,263) | Capital expenditure | |||||||||||||||||
| (69) | (269) | (559) | Investments in joint ventures and associates | |||||||||||||||||
| (21) | (28) | (147) | Investments in equity securities | |||||||||||||||||
| 3,106 | 94 | 1,613 | Proceeds from sale of property, plant and equipment and businesses | |||||||||||||||||
| 275 | 111 | 547 | Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans² | |||||||||||||||||
| 31 | 7 | 73 | Proceeds from sale of equity securities | |||||||||||||||||
| 98 | 111 | 192 | Interest received | |||||||||||||||||
| 711 | 622 | 855 | Other investing cash inflows | |||||||||||||||||
| (837) | (848) | (1,028) | Other investing cash outflows | |||||||||||||||||
| (590) | (5,406) | (2,718) | Cash flow from investing activities | |||||||||||||||||
| 113 | (299) | 321 | Net increase/(decrease) in debt with maturity period within three months | |||||||||||||||||
| Other debt: | ||||||||||||||||||||
| 109 | 2,048 | 1,003 | – New borrowings | |||||||||||||||||
| (5,707) | (4,862) | (2,723) | – Repayments | |||||||||||||||||
| (806) | (1,153) | (1,033) | Interest paid | |||||||||||||||||
| (449) | 495 | (81) | Derivative financial instruments | |||||||||||||||||
| 15 | (2) | (8) | Change in non-controlling interest | |||||||||||||||||
| Cash dividends paid to: | ||||||||||||||||||||
| (1,292) | (1,307) | (3,483) | – Royal Dutch Shell plc shareholders¹ | |||||||||||||||||
| (125) | (69) | (110) | – Non-controlling interest | |||||||||||||||||
| (216) | — | (1,486) | Repurchases of shares3 | |||||||||||||||||
| (63) | (184) | (182) | Shares held in trust: net sales/(purchases) and dividends received | |||||||||||||||||
| (8,420) | (5,333) | (7,781) | Cash flow from financing activities | |||||||||||||||||
| (128) | 567 | (595) | Effects of exchange rate changes on cash and cash equivalents | |||||||||||||||||
| (844) | (3,884) | 3,756 | Increase/(decrease) in cash and cash equivalents | |||||||||||||||||
| 31,830 | 35,714 | 18,055 | Cash and cash equivalents at beginning of period | |||||||||||||||||
| 30,985 | 31,830 | 21,811 | Cash and cash equivalents at end of period | |||||||||||||||||
1. Cash dividends paid represents the payment of net dividends (after deduction of withholding taxes where applicable) and payment of withholding taxes on dividends paid in the previous quarter.
2. As from 2021 renamed from 'Proceeds from sale of joint ventures and associates'.
3. The amount in Q1 2021 represents a payment of withholding taxes related to repurchases of shares in Q1 2020.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 12
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 ("IASB") and as adopted by the UK. For periods beginning on or after January 1, 2021, Shell's (interim) financial statements are prepared in accordance with UK-adopted international accounting standards which were established as a result of the UK's exit from the European Union. As applied to Shell there are no material differences from International Financial Reporting Standards as issued by the IASB. Except for the application of UK-adopted international accounting standards these Interim Statements have been prepared on the basis of the same accounting principles as those used in the Annual Report and Accounts (pages 216 to 264) and Form 20-F (pages 164 to 211) for the year ended December 31, 2020 as filed with the Registrar of Companies for England and Wales and the US Securities and Exchange Commission, respectively, and should be read in conjunction with these filings.
The financial information presented in the unaudited 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, 2020 were published in Shell’s Annual Report and Accounts, a copy of which was delivered to the Registrar of Companies for England and Wales, and in Shell's Form 20-F. 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.
Key accounting considerations, significant judgements and estimates
Future commodity price assumptions and management's view on the future development of refining margins represent a significant estimate and both were subject to change in 2020, resulting in the recognition of impairments in 2020. These assumptions continue to apply for impairment testing purposes in the first quarter 2021.
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.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 13
INFORMATION BY SEGMENT
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| Third-party revenue | ||||||||||||||||||||
| 11,258 | 8,010 | 10,157 | Integrated Gas | |||||||||||||||||
| 1,941 | 1,576 | 2,344 | Upstream | |||||||||||||||||
| 38,382 | 31,001 | 44,297 | Oil Products | |||||||||||||||||
| 4,070 | 3,386 | 3,221 | Chemicals | |||||||||||||||||
| 14 | 16 | 11 | Corporate | |||||||||||||||||
| 55,665 | 43,989 | 60,029 | Total third-party revenue¹ | |||||||||||||||||
Inter-segment revenue | ||||||||||||||||||||
| 1,351 | 1,098 | 891 | Integrated Gas | |||||||||||||||||
| 7,254 | 5,860 | 6,476 | Upstream | |||||||||||||||||
| 2,457 | 1,733 | 1,851 | Oil Products | |||||||||||||||||
| 1,187 | 784 | 875 | Chemicals | |||||||||||||||||
| — | — | — | Corporate | |||||||||||||||||
| CCS earnings | ||||||||||||||||||||
| 2,527 | 20 | 1,812 | Integrated Gas | |||||||||||||||||
| 1,096 | (2,091) | (863) | Upstream | |||||||||||||||||
| 650 | (1,775) | 2,211 | Oil Products | |||||||||||||||||
| 689 | 367 | 146 | Chemicals | |||||||||||||||||
| (531) | (954) | (453) | Corporate | |||||||||||||||||
| 4,430 | (4,434) | 2,854 | Total CCS earnings | |||||||||||||||||
1. Includes revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. First quarter 2021 included income of $1,211 million (Q4 2020: $114 million income; Q1 2020: $6,686 million income). This amount includes both the reversal of prior losses of $385 million (Q4 2020: $147 million gains; Q1 2020: $317 million gains) related to sales contracts and prior gains of $465 million (Q4 2020: $23 million gains; Q1 2020: $76 million losses) related to purchase contracts that were previously recognised and where physical settlement took place in the first quarter 2021.
RECONCILIATION OF INCOME FOR THE PERIOD TO CCS EARNINGS
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 5,660 | (4,014) | (24) | Income/(loss) attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
| 124 | 58 | 1 | Income/(loss) attributable to non-controlling interest | |||||||||||||||||
| 5,784 | (3,956) | (23) | Income/(loss) for the period | |||||||||||||||||
| Current cost of supplies adjustment: | ||||||||||||||||||||
| (1,631) | (589) | 3,774 | Purchases | |||||||||||||||||
| 353 | 133 | (916) | Taxation | |||||||||||||||||
| (76) | (23) | 19 | Share of profit/(loss) of joint ventures and associates | |||||||||||||||||
| (1,354) | (479) | 2,876 | Current cost of supplies adjustment | |||||||||||||||||
| of which: | ||||||||||||||||||||
| (1,314) | (465) | 2,780 | Attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
| (39) | (14) | 96 | Attributable to non-controlling interest | |||||||||||||||||
| 4,430 | (4,434) | 2,854 | CCS earnings | |||||||||||||||||
| of which: | ||||||||||||||||||||
| 4,345 | (4,478) | 2,756 | CCS earnings attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
| 85 | 44 | 97 | CCS earnings attributable to non-controlling interest | |||||||||||||||||
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 14
3. Earnings per share
EARNINGS PER SHARE
| Quarters | ||||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 5,660 | (4,014) | (24) | Income/(loss) attributable to Royal Dutch Shell plc shareholders ($ million) | |||||||||||||||||
| Weighted average number of shares used as the basis for determining: | ||||||||||||||||||||
| 7,782.1 | 7,784.4 | 7,819.8 | Basic earnings per share (million) | |||||||||||||||||
| 7,832.3 | 7,784.4 | 7,819.8 | Diluted earnings per share (million) | |||||||||||||||||
4. Share capital
ISSUED AND FULLY PAID ORDINARY SHARES OF €0.07 EACH1
| Number of shares | Nominal value ($ million) | |||||||||||||||||||||||||||||||
| A | B | A | B | Total | ||||||||||||||||||||||||||||
| At January 1, 2021 | 4,101,239,499 | 3,706,183,836 | 345 | 306 | 651 | |||||||||||||||||||||||||||
| At March 31, 2021 | 4,101,239,499 | 3,706,183,836 | 345 | 306 | 651 | |||||||||||||||||||||||||||
| At January 1, 2020 | 4,151,787,517 | 3,729,407,107 | 349 | 308 | 657 | |||||||||||||||||||||||||||
| Repurchases of shares | (46,143,892) | (15,422,859) | (4) | (1) | (5) | |||||||||||||||||||||||||||
| At March 31, 2020 | 4,105,643,625 | 3,713,984,248 | 345 | 307 | 652 | |||||||||||||||||||||||||||
1. Share capital at March 31, 2021 also included 50,000 issued and fully paid sterling deferred shares of £1 each.
At Royal Dutch Shell plc’s Annual General Meeting on May 19, 2020, 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 €182.7 million (representing 2,611 million ordinary shares of €0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the earlier of the close of business on August 19, 2021, and the end of the Annual General Meeting to be held in 2021, unless previously renewed, revoked or varied by Royal Dutch Shell plc in a general meeting.
5. Other reserves
OTHER RESERVES
| $ million | Merger reserve | Share premium reserve | Capital redemption reserve | Share plan reserve | Accumulated other comprehensive income | Total | |||||||||||||||||||||||||||||
| At January 1, 2021 | 37,298 | 154 | 129 | 906 | (25,735) | 12,752 | |||||||||||||||||||||||||||||
| Other comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders | — | — | — | — | 3,994 | 3,994 | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | (371) | — | (371) | |||||||||||||||||||||||||||||
| At March 31, 2021 | 37,298 | 154 | 129 | 535 | (21,742) | 16,375 | |||||||||||||||||||||||||||||
| At January 1, 2020 | 37,298 | 154 | 123 | 1,049 | (24,173) | 14,451 | |||||||||||||||||||||||||||||
| Other comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders | — | — | — | — | (2,283) | (2,283) | |||||||||||||||||||||||||||||
| Transfer from other comprehensive income | — | — | — | — | (6) | (6) | |||||||||||||||||||||||||||||
| Repurchases of shares | — | — | 5 | — | — | 5 | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | (374) | — | (374) | |||||||||||||||||||||||||||||
| At March 31, 2020 | 37,298 | 154 | 128 | 675 | (26,462) | 11,794 | |||||||||||||||||||||||||||||
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
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 15
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 lease liabilities
As disclosed in the Consolidated Financial Statements for the year ended December 31, 2020, presented in the Annual Report and Accounts 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, 2021, are consistent with those used in the year ended December 31, 2020, though the carrying amounts of derivative financial instruments measured using predominantly unobservable inputs have changed since that date.
The table below provides the comparison of the fair value with the carrying amount of debt excluding lease liabilities, disclosed in accordance with IFRS 7 Financial Instruments: Disclosures.
DEBT EXCLUDING LEASE LIABILITIES
| $ million | March 31, 2021 | December 31, 2020 | |||||||||
| Carrying amount | 74,192 | 79,594 | |||||||||
| Fair value¹ | 79,603 | 88,294 | |||||||||
1. Mainly determined from the prices quoted for these securities.
7. Other notes to the unaudited Condensed Consolidated Interim Financial Statements
Consolidated Statement of Income
Interest and other income
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 2,455 | 411 | 76 | Interest and other income | |||||||||||||||||
| of which: | ||||||||||||||||||||
| 134 | 168 | 199 | Interest income | |||||||||||||||||
| 1 | 2 | 2 | Dividend income (from investments in equity securities) | |||||||||||||||||
| 2,073 | 162 | (106) | Net gains on sales and revaluation of non-current assets and businesses | |||||||||||||||||
| 85 | (35) | (82) | Net foreign exchange (losses)/gains on financing activities | |||||||||||||||||
| 161 | 113 | 63 | Other | |||||||||||||||||
Depreciation, depletion and amortisation
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 5,896 | 9,573 | 7,093 | Depreciation, depletion and amortisation | |||||||||||||||||
Depreciation, depletion and amortisation in Q1 2021 includes $84 million of impairments (Q4 2020: $3,318 million; Q1 2020: $749 million).
Condensed Consolidated Balance Sheet
Retirement benefits
| $ million | ||||||||||||||
| March 31, 2021 | December 31, 2020 | |||||||||||||
| Non-current assets | ||||||||||||||
Retirement benefits | 5,845 | 2,474 | ||||||||||||
| Non-current liabilities | ||||||||||||||
Retirement benefits¹ | 12,348 | 15,605 | ||||||||||||
| Deficit | 6,503 | 13,131 | ||||||||||||
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 16
1.As from January 1, 2021 the 'Retirement benefits' liability has been classified under non-current liabilities (previously partly presented within current liabilities). Prior period comparatives have been revised by $437 million to conform with current year presentation.
The decrease in the net retirement benefit liability is mainly driven by an increase of the market yield on high-quality corporate bonds in the US, the UK and Eurozone, partly offset by an increase in expected inflation in the UK and Eurozone. Amounts recognised in the balance sheet in relation to defined benefit plans include both plan assets and obligations that are presented on a net basis on a plan-by-plan basis.
Income taxes payable
| $ million | ||||||||||||||
| March 31, 2021 | December 31, 2020 | |||||||||||||
| Income taxes payable | 3,372 | 3,111 | ||||||||||||
As from January 1, 2021 taxes payable not related to income tax are presented within 'Trade and other payables' (previously within 'Taxes payable') and 'Taxes payable' has been renamed into 'Income taxes payable'. Prior period comparatives have been revised by $2,895 million to conform with current year presentation.
8. Post-Balance Sheet Events
In February 2021, an agreement was reached with publicly listed Canadian energy company Crescent Point Energy Corp. to sell the Duvernay shale light oil position in Alberta, Canada. The transaction completed on April 1, 2021. The consideration received was comprised of $533 million in cash and 50 million shares in Crescent Point Energy common stock (TSX: CPG) valued at $208 million based on the closing price on March 31, 2021.
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
A.Adjusted Earnings
The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest.
| Quarters | $ million | ||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | |||||||||
| 5,660 | (4,014) | (24) | Income/(loss) attributable to Royal Dutch Shell plc shareholders | ||||||||
| (1,314) | (465) | 2,780 | Add: Current cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders (Note 2) | ||||||||
| 1,112 | (4,871) | (104) | Less: Identified items attributable to Royal Dutch Shell plc shareholders | ||||||||
| 3,234 | 393 | 2,860 | Adjusted Earnings | ||||||||
Identified items
Identified items comprise: divestment gains and losses, impairments, redundancy and restructuring, provisions for onerous contracts, fair value accounting of commodity derivatives and certain gas contracts and the impact of exchange rate movements on certain deferred tax balances, and other items.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 17
IDENTIFIED ITEMS
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| Identified items before tax | ||||||||||||||||||||
| 2,073 | 162 | (76) | Divestment gains/(losses) | |||||||||||||||||
| (84) | (3,344) | (749) | Impairments | |||||||||||||||||
| (748) | (372) | (18) | Redundancy and restructuring | |||||||||||||||||
| — | (1,259) | — | Provisions for onerous contracts | |||||||||||||||||
| 388 | (957) | 968 | Fair value accounting of commodity derivatives and certain gas contracts | |||||||||||||||||
| 31 | (145) | — | Other | |||||||||||||||||
| 1,661 | (5,914) | 125 | Total identified items before tax | |||||||||||||||||
| (549) | 1,033 | (228) | Total tax impact of identified items | |||||||||||||||||
| Identified items after tax | ||||||||||||||||||||
| 1,410 | (20) | (32) | Divestment gains/(losses) | |||||||||||||||||
| (94) | (2,746) | (536) | Impairments | |||||||||||||||||
| (486) | (267) | (7) | Redundancy and restructuring | |||||||||||||||||
| — | (994) | — | Provisions for onerous contracts | |||||||||||||||||
| 365 | (864) | 838 | Fair value accounting of commodity derivatives and certain gas contracts | |||||||||||||||||
| (110) | 157 | (366) | Impact of exchange rate movements on tax balances | |||||||||||||||||
| 25 | (147) | — | Other | |||||||||||||||||
| 1,112 | (4,881) | (104) | Impact on CCS earnings | |||||||||||||||||
Of which: | ||||||||||||||||||||
| 1,112 | (1,089) | (331) | Integrated Gas | |||||||||||||||||
| 133 | (1,344) | (1,154) | Upstream | |||||||||||||||||
| (227) | (2,315) | 849 | Oil Products | |||||||||||||||||
| (41) | (14) | (2) | Chemicals | |||||||||||||||||
| 134 | (118) | 535 | Corporate | |||||||||||||||||
| 1,112 | (4,871) | (104) | Impact on CCS earnings attributable to shareholders | |||||||||||||||||
| — | (10) | — | Impact on CCS earnings attributable to non-controlling interest | |||||||||||||||||
The identified items categories above may include after-tax impacts of identified items of joint ventures and associates which are fully reported within "Share of profit of joint ventures and associates" in 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 (Reference F).
Provisions for onerous contracts: Provisions for onerous contracts that relate to businesses that Shell has exited or to redundant assets or assets that cannot be used.
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. Shell also enters into contracts for tolling, pipeline and storage capacity. 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, as well as contracts for tolling, pipeline and storage capacity, 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 Upstream and Integrated Gas 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).
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 18
Other identified items represent other credits or charges that based on Shell management's assessment hinder the comparative understanding of Shell's financial results from period to period.
B. Adjusted Earnings per share
Adjusted Earnings per share is calculated as Adjusted Earnings (see Reference A), divided by the weighted average number of shares used as the basis for basic earnings per share (see Note 3).
C. Cash capital expenditure
Cash capital expenditure represents cash spent on maintaining and developing assets as well as on investments in the period. Management regularly monitors this measure as a key lever to delivering sustainable cash flows. Cash capital expenditure is the sum of the following lines from the Consolidated Statement of Cash flows: Capital expenditure, Investments in joint ventures and associates and Investments in equity securities.
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 3,885 | 5,206 | 4,263 | Capital expenditure | |||||||||||||||||
| 69 | 269 | 559 | Investments in joint ventures and associates | |||||||||||||||||
| 21 | 28 | 147 | Investments in equity securities | |||||||||||||||||
| 3,974 | 5,503 | 4,970 | Cash capital expenditure | |||||||||||||||||
| Of which: | ||||||||||||||||||||
| 1,015 | 1,664 | 882 | Integrated Gas | |||||||||||||||||
| 1,534 | 1,654 | 2,521 | Upstream | |||||||||||||||||
| 668 | 1,310 | 580 | Oil Products | |||||||||||||||||
| 730 | 830 | 846 | Chemicals | |||||||||||||||||
| 28 | 46 | 141 | Corporate | |||||||||||||||||
D. Return on average capital employed
Return on average capital employed ("ROACE") measures the efficiency of Shell’s utilisation of the capital that it employs. Shell uses two ROACE measures: ROACE on a Net income basis and ROACE on a CCS basis excluding identified items, both adjusted for after-tax interest expense. With effect from the second quarter 2020, the after-tax interest expense adjustment is calculated using an applicable blended statutory tax rate. This change is implemented to eliminate the distorting volatility effects of the effective tax rate. There is no significant impact on prior periods comparatives, which therefore have not been revised.
Both measures refer to Capital employed which consists of total equity, current debt and non-current debt.
ROACE on a Net income basis
In this calculation, the sum of income for the current and previous three quarters, adjusted for after-tax interest expense, is expressed as a percentage of the average capital employed for the same period.
| $ million | Quarters | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| Income - current and previous three quarters | (15,727) | (21,534) | 10,252 | |||||||||||||||||
| Interest expense after tax - current and previous three quarters | 2,728 | 2,822 | 2,854 | |||||||||||||||||
| Income before interest expense - current and previous three quarters | (12,999) | (18,712) | 13,106 | |||||||||||||||||
| Capital employed – opening | 278,444 | 286,887 | 292,797 | |||||||||||||||||
| Capital employed – closing | 269,323 | 266,551 | 278,444 | |||||||||||||||||
| Capital employed – average | 273,883 | 276,719 | 285,620 | |||||||||||||||||
| ROACE on a Net income basis | (4.7)% | (6.8) | % | 4.6 | % | |||||||||||||||
ROACE on a CCS basis excluding identified items
In this calculation, the sum of CCS earnings excluding identified items for the current and previous three quarters, adjusted for after-tax interest expense, is expressed as a percentage of the average capital employed for the same period.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 19
| $ million | Quarters | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| CCS earnings - current and previous three quarters | (18,125) | (19,702) | 13,256 | |||||||||||||||||
| Identified items - current and previous three quarters | (23,562) | (24,777) | (1,266) | |||||||||||||||||
| Interest expense after tax – current and previous three quarters | 2,728 | 2,822 | 2,854 | |||||||||||||||||
| CCS earnings excluding identified items before interest expense - current and previous three quarters | 8,165 | 7,898 | 17,376 | |||||||||||||||||
| Capital employed – average | 273,883 | 276,719 | 285,620 | |||||||||||||||||
| ROACE on a CCS basis excluding identified items | 3.0 | % | 2.9 | % | 6.1 | % | ||||||||||||||
E. Gearing
Gearing is a measure of Shell’s capital structure and is defined as net debt as a percentage of total capital. Net debt is defined as the sum of current and non-current debt, less cash and cash equivalents, adjusted for the fair value of derivative financial instruments used to hedge foreign exchange and interest rate risks relating to debt, and associated collateral balances. Management considers this adjustment 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.
| $ million | Quarters | |||||||||||||||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | ||||||||||||||||||
| Current debt | 14,541 | 16,899 | 15,767 | |||||||||||||||||
| Non-current debt | 87,828 | 91,115 | 79,298 | |||||||||||||||||
| Total debt | 102,369 | 108,014 | 95,065 | |||||||||||||||||
| Of which lease liabilities | 28,177 | 28,419 | 29,290 | |||||||||||||||||
| Add: Debt-related derivative financial instruments: net liability/(asset) | (864) | (1,979) | 1,218 | |||||||||||||||||
| Add: Collateral on debt-related derivatives: net liability/(asset) | 732 | 1,181 | (58) | |||||||||||||||||
| Less: Cash and cash equivalents | (30,985) | (31,830) | (21,811) | |||||||||||||||||
| Net debt | 71,252 | 75,386 | 74,413 | |||||||||||||||||
| Add: Total equity | 166,953 | 158,537 | 183,379 | |||||||||||||||||
| Total capital | 238,205 | 233,923 | 257,792 | |||||||||||||||||
| Gearing | 29.9 | % | 32.2 | % | 28.9 | % | ||||||||||||||
F. 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 is a measure aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 20
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 6,808 | 6,701 | 5,982 | Production and manufacturing expenses | |||||||||||||||||
| 2,462 | 2,751 | 2,393 | Selling, distribution and administrative expenses | |||||||||||||||||
| 166 | 199 | 243 | Research and development | |||||||||||||||||
| 9,436 | 9,652 | 8,618 | Operating expenses | |||||||||||||||||
| Of which identified items: | ||||||||||||||||||||
| (747) | (371) | (18) | Redundancy and restructuring (charges)/reversal | |||||||||||||||||
| — | (737) | — | (Provisions)/reversal | |||||||||||||||||
| 35 | — | — | Other | |||||||||||||||||
| (712) | (1,108) | (18) | ||||||||||||||||||
| 8,724 | 8,544 | 8,600 | Underlying operating expenses | |||||||||||||||||
G. Free cash flow
Free cash flow is used to evaluate cash available for financing activities, including dividend payments and debt servicing, after investment in maintaining and growing the business. It is defined as the sum of “Cash flow from operating activities” and “Cash flow from investing activities”.
Cash flows from acquisition and divestment activities are removed from Free cash flow to arrive at the Organic free cash flow, a measure used by management to evaluate the generation of free cash flow without these activities.
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 8,294 | 6,287 | 14,851 | Cash flow from operating activities | |||||||||||||||||
| (590) | (5,406) | (2,718) | Cash flow from investing activities | |||||||||||||||||
| 7,704 | 882 | 12,133 | Free cash flow | |||||||||||||||||
| 3,412 | 212 | 2,233 | Less: Divestment proceeds (Reference I) | |||||||||||||||||
| — | — | — | Add: Tax paid on divestments (reported under "Other investing cash outflows") | |||||||||||||||||
| 89 | 202 | 404 | Add: Cash outflows related to inorganic capital expenditure1 | |||||||||||||||||
| 4,381 | 871 | 10,304 | Organic free cash flow2 | |||||||||||||||||
1.Cash outflows related to inorganic capital expenditure includes portfolio actions which expand Shell's activities through acquisitions and restructuring activities as reported in capital expenditure lines in the Consolidated Statement of Cash Flows.
2.Free cash flow less divestment proceeds, adding back outflows related to inorganic expenditure.
H. 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.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 21
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 8,294 | 6,287 | 14,851 | Cash flow from operating activities | |||||||||||||||||
| (3,426) | (1,809) | 9,594 | (Increase)/decrease in inventories | |||||||||||||||||
| (6,829) | (107) | 6,314 | (Increase)/decrease in current receivables | |||||||||||||||||
| 5,865 | 1,579 | (8,430) | Increase/(decrease) in current payables | |||||||||||||||||
| (4,390) | (337) | 7,478 | (Increase)/decrease in working capital | |||||||||||||||||
| 12,683 | 6,624 | 7,373 | Cash flow from operating activities excluding working capital movements | |||||||||||||||||
| Of which: | ||||||||||||||||||||
| 3,653 | 2,195 | 3,352 | Integrated Gas | |||||||||||||||||
| 4,702 | 2,890 | 3,718 | Upstream | |||||||||||||||||
| 3,313 | 782 | 353 | Oil Products | |||||||||||||||||
| 1,045 | 775 | 189 | Chemicals | |||||||||||||||||
| (30) | (17) | (239) | Corporate | |||||||||||||||||
I. Divestment proceeds
Divestment proceeds represent cash received from divestment activities in the period. Management regularly monitors this measure as a key lever to deliver sustainable cash flow.
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 3,106 | 94 | 1,613 | Proceeds from sale of property, plant and equipment and businesses | |||||||||||||||||
| 275 | 111 | 547 | Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans¹ | |||||||||||||||||
| 31 | 7 | 73 | Proceeds from sale of equity securities | |||||||||||||||||
| 3,412 | 212 | 2,233 | Divestment proceeds | |||||||||||||||||
1.As from 2021 renamed from 'Proceeds from sale of joint ventures and associates'.
J. Earnings before interest, taxes, depreciation and amortisation
The “Adjusted EBITDA (FIFO basis)” and “Adjusted EBITDA (CCS basis)” measures are introduced with effect from January 1, 2021. Management uses both measures to evaluate Shell’s performance in the period and over time.
We define “Adjusted EBITDA (FIFO basis)” as “Income/(loss) attributable to Royal Dutch Shell plc shareholders” adjusted for identified items; tax charge/(credit); depreciation, amortisation and depletion; exploration well write-offs and net interest expense. We also use “Adjusted EBITDA” on a CCS basis as the current cost of supplies adjustment aims to remove the impact of price changes on our inventories in our Oil Products and Chemicals segments, therefore enabling comparisons over time.
| Quarters | $ million | |||||||||||||||||||
| Q1 2021 | Q4 2020 | Q1 2020 | ||||||||||||||||||
| 5,660 | (4,014) | (24) | Income/(loss) attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
| 1,112 | (4,871) | (104) | Less: Identified items attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
| 1,903 | 865 | 417 | Add: Taxation charge/(credit) excluding tax impact of identified items | |||||||||||||||||
| 5,812 | 6,255 | 6,344 | Add: Depreciation, depletion and amortisation excluding impairments | |||||||||||||||||
| 136 | 199 | 83 | Add: Exploration well write-offs | |||||||||||||||||
| 892 | 908 | 1,118 | Add: Interest expense excluding identified items | |||||||||||||||||
| 134 | 168 | 199 | Less: Interest income | |||||||||||||||||
| 13,157 | 8,916 | 7,843 | Adjusted EBITDA (FIFO basis) | |||||||||||||||||
| (1,314) | (465) | 2,780 | Add: Current cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders | |||||||||||||||||
| (353) | (133) | 916 | Add: Current cost of supplies adjustment to taxation charge/(credit) | |||||||||||||||||
| 11,490 | 8,319 | 11,540 | Adjusted EBITDA (CCS basis) | |||||||||||||||||
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 22
CAUTIONARY STATEMENT
All amounts shown throughout this announcement are unaudited. All peak production figures in Portfolio Developments are quoted at 100% expected production. The numbers presented throughout this announcement may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures, due to rounding.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” 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 its 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 Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell 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 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; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) 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 plc's Form 20-F for the year ended December 31, 2020 (available at www.shell.com/investor and 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 29, 2021. 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.
The content of websites referred to in this announcement do not form part of this announcement.
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. 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.
This announcement contains inside information.
April 29, 2021
The information in this announcement 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.
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 23
Contacts:
- Linda M. Coulter, Company Secretary
- Media: International +44 (0) 207 934 5550; USA +1 832 337 4355
LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70
Classification: Inside Information
APPENDIX
LIQUIDITY AND CAPITAL RESOURCES FOR THE THREE MONTHS ENDED MARCH 31, 2021
▪Cash and cash equivalents decreased to $31.0 billion at March 31, 2021, from $31.8 billion at December 31, 2020.
▪Cash flow from operating activities was an inflow of $8.3 billion for the first quarter 2021, which included a negative working capital movement of $4.4 billion.
▪Cash flow from investing activities was an outflow of $0.6 billion, mainly driven by capital expenditure of $3.9 billion partly offset by proceeds from sale of property, plant and equipment and businesses of $3.1 billion.
▪Cash flow from financing activities was an outflow of $8.4 billion, mainly driven by net debt repayments of $5.5 billion and dividend payments to Royal Dutch Shell plc shareholders of $1.3 billion.
▪Total current and non-current debt decreased to $102.4 billion at March 31, 2021, compared with $108.0 billion at December 31, 2020. Total debt excluding leases decreased by $5.4 billion and the carrying amount of leases decreased by $0.2 billion. In the first quarter 2021, Shell issued no debt under the US shelf registration or under the Euro medium-term note programmes.
▪Cash dividends paid to Royal Dutch Shell plc shareholders were $1.3 billion in the first quarter 2021 compared with $3.5 billion in the first quarter 2020.
▪Dividends of $0.1735 per share are announced on April 29, 2021, in respect of the first quarter 2021. These dividends are payable on June 21, 2021. In the case of B shares, the dividends will be payable through the dividend access mechanism and are expected to be treated as UK-source rather than Dutch-source. See the Annual Report and Accounts and Form 20-F for the year ended December 31, 2020 for additional information on the dividend access mechanism.
CAPITALISATION AND INDEBTEDNESS
The following table sets out the unaudited consolidated combined capitalisation and indebtedness of Shell at March 31, 2021. This information is derived from the Unaudited Condensed Consolidated Interim Financial Statements.
| CAPITALISATION AND INDEBTEDNESS | $ million | ||||
| March 31, 2021 | |||||
| Equity attributable to Royal Dutch Shell plc shareholders | 163,714 | ||||
| Current debt | 14,541 | ||||
| Non-current debt | 87,828 | ||||
| Total debt[A] | 102,369 | ||||
| Total capitalisation | 266,084 | ||||
[A] Of the total carrying amount of debt at March 31, 2021, $74.1 billion was unsecured, $28.3 billion was secured and $64.9 billion was issued by Shell International Finance B.V., a 100%-owned subsidiary of Royal Dutch Shell plc with its debt guaranteed by Royal Dutch Shell plc (December 31, 2020: $69.9 billion).
Royal Dutch Shell plc Unaudited Condensed Interim Financial Report 24