RDSB.L Regulatory News (RDSB)

ROYAL DUTCH SHELL PLC 3RD QUARTER 2014 UNAUDITED RESULTS * Royal Dutch Shell's third quarter 2014 earnings, on a current cost of supplies (CCS) basis (see Note 2), were $5.3 billion compared with $4.2 billion for the same quarter a year ago. * Third quarter 2014 CCS earnings excluding identified items (see page 5) were $5.8 billion compared with $4.5 billion for the third quarter 2013, an increase of 31%. * Compared with the third quarter 2013, CCS earnings excluding identified items benefited from improved Downstream and Upstream results. In Downstream, earnings benefited from increased contributions from refining including improved operating performance, and trading. In Upstream, earnings increased due to the impact of new, higher-margin production, lower exploration expenses, and higher earnings from Integrated Gas, despite the effect of lower oil prices and volumes overall. The increase of a deferred tax liability as a result of the weakening Australian dollar reduced earnings by some $400 million compared with the third quarter 2013. * Basic CCS earnings per share excluding identified items increased by 30% versus the third quarter 2013. * Cash flow from operating activities for the third quarter 2014 was $12.8 billion, compared with $10.4 billion for the same quarter last year. Excluding working capital movements, cash flow from operating activities for the third quarter 2014 was $11.1 billion, compared with $9.9 billion for the third quarter 2013. * Capital investment for the third quarter 2014 was $8.5 billion. Net capital investment (see Note 2) for the third quarter was $4.8 billion, compared with $9.4 billion for the same period a year ago. * Total cash dividends paid to shareholders in the third quarter 2014 were $3.0 billion. During the third quarter some 18.5 million shares were bought back for cancellation for a consideration of $0.8 billion. * Gearing at the end of the third quarter 2014 was 11.7%. * A third quarter 2014 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share ("ADS"), an increase of 4% compared with the third quarter 2013. SUMMARY OF UNAUDITED RESULTS Quarters $ million Nine months Q3 Q2 Q32014 2014 2013 %1 2014 2013 % Income attributable to Royal4,463 5,307 4,677 -5 Dutch Shell plc shareholders 14,279 14,590 -2 Current cost of supplies (CCS)803 (160) (429) adjustment for Downstream 599 3 5,266 5,147 4,248 +24 CCS earnings 14,878 14,593 +2 (581) (979) (209) Identified items2 (4,422) (1,984) CCS earnings excluding identified5,847 6,126 4,457 +31 items 19,300 16,577 +16 Of which: 4,343 4,722 3,466 Upstream 14,775 12,640 1,793 1,347 892 Downstream 4,715 3,908 Corporate and Non-controlling(289) 57 99 interest (190) 29 Cash flow from operating12,811 8,641 10,409 +23 activities 35,436 34,412 +3 0.83 0.81 0.68 +22 Basic CCS earnings per share ($) 2.36 2.32 +2 1.66 1.62 1.36 Basic CCS earnings per ADS ($) 4.72 4.64 Basic CCS earnings per share0.92 0.97 0.71 +30 excl. identified items ($) 3.06 2.63 +16 Basic CCS earnings per ADS excl.1.84 1.94 1.42 identified items ($) 6.12 5.26 0.47 0.47 0.45 +4 Dividend per share ($) 1.41 1.35 +4 0.94 0.94 0.90 Dividend per ADS ($) 2.82 2.70 1 Q3 on Q3 change 2 See page 5 Royal Dutch Shell Chief Executive Officer Ben van Beurden commented: "Shell is proud to deliver high-quality fuels, lubricants and petrochemicals,for transportation, power generation and manufacturing industries. With over90,000 employees in more than 70 countries around the world, Shell is dedicatedto delivering low-cost, safe and reliable energy for our customers. The recent decline in oil prices is part of the volatility in our industry. Itunderlines the importance of our drive to get a tighter grip on performancemanagement, keep a tight hold on costs and spending, and improve the balancebetween growth and returns. Our results today show that we are delivering on the three priorities I set outat the start of 2014 - better financial performance, enhanced capitalefficiency and continued strong project delivery. We have moderated our spending on growth and accelerated disposals of ournon-strategic portfolio as part of a drive to improve capital efficiency.Proceeds from asset sales so far this year total $11.6 billion, with furtherdisposals ongoing. Our plans to exit from Pinedale and Haynesville mark the completion of themajor sales programme in our North America resources plays portfolio. We arenow focusing on creating value from this slimmed-down position. Restructuringin Oil Products continues, with the completion of the divestment of Shell'sAustralia positions in the quarter. Our new investments are delivering benefits to the bottom line. We have broughtfour new deep-water fields on-stream this year. We are also adding newpotential to the portfolio through exploration and appraisal successes. Shell's strategy is founded on creating value for the long term. Our dividend per share for the third quarter of 2014 is up 4% from year-agolevels. With $8.9 billion of dividends declared and $2.4 billion of sharesrepurchased in the first three quarters of this year, we are on track for aprogramme of over $30 billion of dividend distributions and buybacks for 2014and 2015 combined. All of this underlines the company's recent improvedperformance and potential for the future." THIRD QUARTER 2014 PORTFOLIO DEVELOPMENTS Upstream In Nigeria, Shell announced first production from the Shell-operated BongaNorth West deep-water development (Shell interest 55%). Oil from the BongaNorth West subsea facilities is transported by a new undersea pipeline to theexisting Bonga floating production, storage and offloading ("FPSO") exportfacility. The Bonga FPSO has been upgraded to handle the additional oil flowfrom Bonga North West which, at peak production, is expected to contribute 40thousand barrels of oil equivalent per day ("boe/d"). In the United States, Shell announced the second major 2014 start-up in thedeep-water Gulf of Mexico with the Cardamom development first oil (Shellinterest 100%). Oil from the Cardamom subsea development is piped throughShell's Auger platform and is planned to ramp up to 50 thousand boe/d at peakproduction. In October, Shell announced first production from the Shell-operatedGumusut-Kakap deep-water development (Shell interest 33%) in Malaysia. Theproduction system is expected to reach a peak oil production of around 135thousand boe/d. With oil production now underway, work on the gas injectionfacilities is continuing with an expected start-up during 2015. In October, Shell announced the final investment decision ("FID") on the BongaMain phase 3 project (Shell interest 55%) offshore Nigeria. The development isexpected to contribute some 40 thousand boe/d at peak production through theexisting Bonga FPSO export facility. In October, Shell commenced front end engineering and design ("FEED") on theVito deep-water development project (Shell interest 51%) in the Gulf of Mexico,United States. The development, which is expected to deliver peak production of100 thousand boe/d after coming on-stream, will be a 120 thousand boe/dcapacity floating production system ("FPS") with flexibility for up to foursubsea tiebacks. In October, Shell announced a frontier exploration discovery offshore Gabon,West Africa (Shell interest 75%). The Leopard-1 well encountered a substantialgas column with around 200 metres net gas pay in a pre-salt reservoir. Shelland its partners are planning to undertake an appraisal programme to furtherdetermine the resource volumes. During the quarter, in Shell's heartlands exploration programme Shell made agas discovery at the Shell-operated deep-water Marjoram-1 well (Shell interest85%) in Malaysia. Shell also announced two oil discoveries in the Gulf ofMexico with the successful Rydberg exploration well (Shell interest 57%) in theNorphlet play, and with the Kaikias well (Shell interest 100%) in the Marsbasin. Shell had continued success with near-field exploration discoveries in a numberof countries, including the successful Dhulaima drilling campaign in NorthOman. As part of its global exploration programme, Shell added new acreage positionsfollowing successful bidding results in the United States and Colombia. In resources plays in the United States, Shell announced two gas discoveries inthe Utica formation in Tioga County, Pennsylvania with the Neal and Geeexploration wells. Shell continued to divest non-strategic Upstream positions during the thirdquarter 2014, with divestment proceeds totalling some $1.6 billion. In Canada, Shell completed the divestment of its 100% interest in the OrionSteam Assisted Gravity Drainage ("SAGD") project to Osum Oil Sands Corp. for aconsideration of $0.3 billion. Shell also completed the sale of its interest in a portion of its dry gas DeepBasin assets in Canada to Mapan Energy Ltd. for a consideration of some $0.1billion. In the United States, Shell completed the divestment of its entire interest inthe Pinedale dry gas asset in Wyoming to Ultra Petroleum Corp. As part of thetransaction, Shell received cash consideration of $0.8 billion includingclosing adjustments and gained an additional 155 thousand net acres in theMarcellus and Utica Shale areas in Pennsylvania. Shell now holds a 100%interest in the Tioga Area of Mutual Interest where two new gas discoverieswere announced during the quarter. Also in the United States, Shell completed the sale of its interest in 207thousand net acres in the Slippery Rock acreage in western Pennsylvania to RexEnergy for a consideration of $0.1 billion. Shell also agreed to sell its entire interest in the Haynesville dry gas assetin Louisiana, United States to Vine Oil & Gas LP and its partner BlackstoneGroup L.P. for a consideration of $1.2 billion, subject to closing. Thetransaction is effective from July 2014. Shell agreed to sell its non-operated 20% interest in the BM-ES-23 concessionin the Espirito Santos basin offshore Brazil to PTT Exploration and ProductionPublic Company Ltd. The transaction, which is effective from January 2014, isexpected to close later in the year. Downstream Shell (40%), together with Hyundai Oilbank (60%), announced through its jointventure, Hyundai and Shell Base Oil Company Ltd, first production from theventure's Base Oil Manufacturing Plant ("BOMP") in South Korea. The plant hasthe capacity to produce some 13 thousand barrels per day of API Group II baseoils. On October 28, 2014 Shell Midstream Partners, L.P., a limited partnershipformed by Shell in the United States earlier this year, announced the pricingof its initial public offering of 40,000,000 common units representing limitedpartner interests at $23.00 per common unit. The common units began trading onthe New York Stock Exchange on October 29, 2014 under the ticker symbol "SHLX".The underwriters of the offering have a 30-day option to purchase up to anadditional 6,000,000 common units from Shell Midstream Partners. The offeringis expected to close on or around November 3, 2014, subject to customaryclosing conditions. Downstream divestment proceeds totalled some $2 billion for the third quarter2014 and included proceeds from the sale of Shell's Downstream businesses(excluding Aviation) in Australia to Vitol. KEY FEATURES OF THE THIRD QUARTER 2014 * Third quarter 2014 CCS earnings (see Note 2) were $5,266 million, 24% higher than for the same quarter a year ago. * Third quarter 2014 CCS earnings excluding identified items (see page 5) were $5,847 million compared with $4,457 million for the third quarter 2013, an increase of 31%. * Compared with the third quarter 2013, CCS earnings excluding identified items benefited from improved Downstream and Upstream results. In Downstream, earnings benefited from increased contributions from refining including improved operating performance, and trading. In Upstream, earnings increased due to the impact of new, higher-margin production, lower exploration expenses, and higher earnings from Integrated Gas, despite the effect of lower oil prices and volumes overall. The increase of a deferred tax liability as a result of the weakening Australian dollar reduced earnings by some $400 million compared with the third quarter 2013. * Basic CCS earnings per share increased by 22% versus the same quarter a year ago. * Basic CCS earnings per share excluding identified items increased by 30% versus the same quarter a year ago. * Cash flow from operating activities for the third quarter 2014 was $12.8 billion, compared with $10.4 billion for the same quarter last year. Excluding working capital movements, cash flow from operating activities for the third quarter 2014 was $11.1 billion, compared with $9.9 billion for the third quarter 2013. * Net capital investment (see Note 2) for the third quarter 2014 was $4.8 billion. Capital investment for the third quarter 2014 was $8.5 billion and divestment proceeds were $3.6 billion. * Total cash dividends paid to shareholders in the third quarter 2014 were $3.0 billion. * Under our share buyback programme some 18.5 million shares were bought back for cancellation during the third quarter 2014 for a consideration of $0.8 billion. * Return on average capital employed on a reported income basis (see Note 7) was 7.7% at the end of the third quarter 2014 compared with 10.4% at the end of the third quarter 2013. * Gearing was 11.7% at the end of the third quarter 2014 versus 11.2% at the end of the third quarter 2013. * Oil and gas production for the third quarter 2014 was 2,790 thousand boe/d, a decrease of 5% compared with the third quarter 2013. Excluding the impact of divestments, Abu Dhabi license expiry, PSC price effects, and security impacts in Nigeria, third quarter 2014 production volumes were 2% higher than for the same period last year. * Equity sales of LNG of 5.68 million tonnes for the third quarter 2014 were 16% higher than for the same quarter a year ago. * Oil products sales volumes for the third quarter 2014 were 2% lower than for the third quarter 2013. Chemicals sales volumes for the third quarter 2014 decreased by 4% compared with the same quarter a year ago. * Supplementary financial and operational disclosure for the third quarter 2014 is available at www.shell.com/investor. SUMMARY OF IDENTIFIED ITEMS Earnings for the third quarter 2014 reflected the following items, which inaggregate amounted to a net charge of $581 million (compared with a net chargeof $209 million for the third quarter 2013), as summarised in the table below: * Upstream earnings included a net charge of $394 million, mainly reflecting a deferred tax liability of $349 million related to an associate company and impairments of $176 million. These were partly offset by net divestment gains of $112 million. Upstream earnings for the third quarter 2013 included a net charge of $176 million. * Downstream earnings included a net charge of $192 million, primarily reflecting losses related to divestments of $92 million and impairments of $75 million. Downstream earnings for the third quarter 2013 included a net gain of $14 million. * Corporate results and Non-controlling interest included a net gain of $5 million. Earnings for the third quarter 2013 included a net charge of $47 million. SUMMARY OF IDENTIFIED ITEMS Quarters $ million Nine months Q3 2014 Q2 2014 Q3 2013 2014 2013 Segment earnings impact of identified items: (394) (902) (176) Upstream (1,579) (1,848) (192) (76) 14 Downstream (2,848) (511) Corporate and Non-controlling5 (1) (47) interest 5 375 (581) (979) (209) Earnings impact (4,422) (1,984) These identified items are shown to provide additional insight into segmentearnings and income attributable to shareholders. They include the full impacton Shell's CCS earnings of the following items: * Divestment gains and losses * Impairments * Fair value accounting of commodity derivatives and certain gas contracts (see Note 6) * Redundancy and restructuring Further items may be identified in addition to the above. EARNINGS BY BUSINESS SEGMENT UPSTREAM Quarters $ million Nine months Q3 2014 Q2 2014 Q3 2013 %1 2014 2013 % Upstream earnings excluding4,343 4,722 3,466 +25 identified items 14,775 12,640 +17 3,949 3,820 3,290 +20 Upstream earnings 13,196 10,792 +22 Upstream cash flow from8,854 8,919 6,709 +32 operating activities 26,848 24,557 +9 5,447 562 8,148 -33 Upstream net capital investment 15,349 25,067 -39 Liquids production available for1,429 1,499 1,485 -4 sale (thousand b/d) 1,469 1,541 -5 Natural gas production available7,892 9,153 8,383 -6 for sale (million scf/d) 9,082 9,511 -5 Total production available for2,790 3,077 2,931 -5 sale (thousand boe/d) 3,035 3,181 -5 Equity sales of LNG (million5.68 6.00 4.88 +16 tonnes) 17.77 14.71 +21 1 Q3 on Q3 change Third quarter Upstream earnings excluding identified items were $4,343 millioncompared with $3,466 million a year ago. Identified items were a net charge of$394 million, compared with a net charge of $176 million for the third quarter2013 (see page 5). Compared with the third quarter 2013, earnings excluding identified itemsbenefited from new, high-margin production despite the effect of lower oilprices and volumes overall. Earnings also reflected lower exploration expenses,primarily driven by fewer well write-offs and increased dividends from an LNGventure including the phasing of a dividend from the second quarter 2014. Theseitems were partly offset by higher depreciation. The increase of a deferred taxliability as a result of the weakening Australian dollar reduced earnings bysome $400 million. Global liquids realisations were 8% lower than for the third quarter 2013.Global natural gas realisations were 7% lower than for the same quarter a yearago, with a 17% increase in the Americas and an 11% decrease outside theAmericas. Third quarter 2014 production was 2,790 thousand boe/d compared with 2,931thousand boe/d a year ago. Liquids production decreased by 4% and natural gasproduction decreased by 6% compared with the third quarter 2013. Excluding theimpact of divestments, Abu Dhabi license expiry, PSC price effects, andsecurity impacts in Nigeria, third quarter 2014 production was 2% higher thanfor the same period last year. Underlying production was driven by increasedhigh-margin liquids production in the Americas, including the impact ofsubstantially lower downtime, partly offset by higher downtime elsewhere. New field start-ups and the continuing ramp-up of existing fields, inparticular Majnoon in Iraq, Mars B and BC-10 in the Americas, contributed some139 thousand boe/d to production for the third quarter 2014, which more thanoffset the impact of field declines. Equity LNG sales volumes of 5.68 million tonnes increased by 16% compared withthe same quarter a year ago, mainly reflecting the contribution from theacquisition of Repsol's LNG business. DOWNSTREAM Quarters $ million Nine months Q3 2014 Q2 2014 Q3 2013 %1 2014 2013 % Downstream CCS earnings1,793 1,347 892 +101 excluding identified items 4,715 3,908 +21 1,601 1,271 906 +77 Downstream CCS earnings 1,867 3,397 -45 Downstream cash flow from3,187 262 2,969 +7 operating activities 6,594 7,095 -7 Downstream net capital(615) 543 1,166 - investment 704 3,314 -79 Refinery processing intake2,896 3,034 2,947 -2 (thousand b/d) 2,965 2,917 +2 Oil products sales volumes6,295 6,453 6,398 -2 (thousand b/d) 6,355 6,206 +2 Chemicals sales volumes4,441 4,387 4,620 -4 (thousand tonnes) 13,113 12,974 +1 1 Q3 on Q3 change Third quarter Downstream earnings excluding identified items were $1,793million compared with $892 million for the third quarter 2013. Identified itemswere a net charge of $192 million, compared with a net gain of $14 million forthe third quarter 2013 (see page 5). Compared with the third quarter 2013, Downstream earnings excluding identifieditems benefited from higher realised refining margins, reflecting the industryenvironment and improved operating performance. Earnings also benefited fromlower operating expenses, mainly resulting from divestments, as well asincreased trading contributions. Contributions from Chemicals decreased mainlyas a result of weaker intermediates industry conditions, and a prior-periodadjustment, partly offset by improved base chemicals industry conditions. Refinery intake volumes were 2% lower compared with the same quarter last year.Excluding portfolio impacts, refinery intake volumes were in line with the sameperiod a year ago. Refinery availability was 94%, compared with 93% for thethird quarter 2013. Oil products sales volumes decreased by 2% compared with the same period a yearago. Excluding portfolio impacts, oil products sales volumes were in line withthe same period a year ago. Chemicals sales volumes decreased by 4% compared with the same quarter lastyear, mainly as a result of lower trading activity. Chemicals manufacturingplant availability decreased to 90% from 96% for the third quarter 2013,reflecting higher unplanned downtime, primarily due to an incident in June atthe Moerdijk chemical site in the Netherlands. The impact of a separateincident in October at Moerdijk is currently being assessed; however, mostunits will be out for the remainder of 2014 and impact on some units isexpected to extend into 2015. CORPORATE AND NON-CONTROLLING INTEREST Quarters $ million Nine months Q3 2014 Q2 2014 Q3 2013 2014 2013 Corporate and Non-controlling interest(289) 57 99 excl. identified items (190) 29 Of which: (306) 101 135 Corporate (129) 146 17 (44) (36) Non-controlling interest (61) (117) (284) 56 52 Corporate and Non-controlling interest (185) 404 Third quarter Corporate results and Non-controlling interest excludingidentified items were a charge of $289 million, compared with a gain of $99million for the same period last year. Identified items for the third quarter2014 were a net gain of $5 million, whereas earnings for the third quarter 2013included a net charge of $47 million (see page 5). Compared with the third quarter 2013, Corporate results excluding identifieditems mainly reflected adverse currency exchange rate effects and lower taxcredits. FORTHCOMING EVENTS Fourth quarter 2014 results and fourth quarter 2014 dividend are scheduled tobe announced on January 29, 2015. First quarter 2015 results and first quarter2015 dividend are scheduled to be announced on April 30, 2015. Second quarter2015 results and second quarter 2015 dividend are scheduled to be announced onJuly 30, 2015. Third quarter 2015 results and third quarter 2015 dividend arescheduled to be announced on October 29, 2015. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME Quarters $ million Nine months Q3 2014 Q2 2014 Q3 2013 %1 2014 2013 % 107,851 111,222 116,513 Revenue 328,731 341,992 Share of profit of joint1,512 1,716 1,515 ventures and associates 5,298 5,251 462 2,336 230 Interest and other income 3,149 877 Total revenue and other109,825 115,274 118,258 income 337,178 348,120 84,507 85,296 91,842 Purchases 253,638 267,346 Production and manufacturing7,555 7,839 7,416 expenses 22,573 20,874 Selling, distribution and3,350 3,755 3,566 administrative expenses 10,539 10,814 302 274 291 Research and development 859 890 846 1,128 1,636 Exploration 2,901 3,512 Depreciation, depletion and4,730 7,354 4,153 amortisation 19,508 15,880 417 505 392 Interest expense 1,374 1,172 8,118 9,123 8,962 -9 Income before taxation 25,786 27,632 -7 3,693 3,778 4,225 Taxation 11,474 12,928 4,425 5,345 4,737 -7 Income for the period 14,312 14,704 -3 Income attributable to(38) 38 60 non-controlling interest 33 114 Income attributable to Royal4,463 5,307 4,677 -5 Dutch Shell plc shareholders 14,279 14,590 -2 1 Q3 on Q3 change EARNINGS PER SHARE Quarters $ Nine months Q3 2014 Q2 2014 Q3 2013 2014 2013 0.70 0.84 0.75 Basic earnings per share 2.26 2.32 0.70 0.84 0.75 Diluted earnings per share 2.26 2.32 SHARES1 Quarters Millions Nine months Q3 2014 Q2 2014 Q3 2013 2014 2013 Weighted average number of shares as the basis for: 6,333.8 6,323.0 6,269.7 Basic earnings per share 6,315.0 6,297.3 6,334.1 6,323.4 6,272.5 Diluted earnings per share 6,315.3 6,300.3 Shares outstanding at the end of6,320.3 6,341.7 6,282.2 the period 6,320.3 6,282.2 1 Royal Dutch Shell plc ordinary shares of euro 0.07 each Notes 1 to 5 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarters $ million Nine months Q3 2014 Q2 2014 Q3 2013 2014 2013 4,425 5,345 4,737 Income for the period 14,312 14,704 Other comprehensive income net of tax: Items that may be reclassified to income in later periods: (2,963) 591 1,064 - Currency translation differences (2,923) (1,612) (83) (182) (154) - Unrealised losses on securities (237) (194) (10) (18) 25 - Cash flow hedging (losses)/gains (9) 180 - Share of other comprehensive (loss) /income of joint ventures and(68) 5 (39) associates (70) (124) (3,124) 396 896 Total (3,239) (1,750) Items that are not reclassified to income in later periods: (2,672) (253) (557) - Retirement benefits remeasurements(3,471) 1,463 (2,672) (253) (557) Total (3,471) 1,463 Other comprehensive (loss)/income(5,796) 143 339 for the period (6,710) (287) (1,371) 5,488 5,076 Comprehensive income for the period 7,602 14,417 Comprehensive (loss)/income attributable to non-controlling(104) 48 34 interest (27) 37 Comprehensive income attributable to Royal Dutch Shell plc(1,267) 5,440 5,042 shareholders 7,629 14,380 Notes 1 to 5 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONDENSED CONSOLIDATED BALANCE SHEET $ million Sep 30, 2014 Jun 30, 2014 Sep 30, 2013 Assets Non-current assets: Intangible assets 7,135 7,423 4,348 Property, plant and equipment 190,842 193,069 186,541 Joint ventures and associates 33,316 34,455 34,010 Investments in securities 4,592 4,647 4,703 Deferred tax 7,465 6,557 5,514 Retirement benefits 2,405 3,439 3,205 Trade and other receivables 8,255 9,121 9,633 254,010 258,711 247,954 Current assets: Inventories 27,318 31,361 29,820 Trade and other receivables 59,056 65,225 62,561 Cash and cash equivalents 19,027 15,419 14,278 105,401 112,005 106,659 Total assets 359,411 370,716 354,613 Liabilities Non-current liabilities: Debt 37,065 38,901 31,972 Trade and other payables 3,735 4,167 4,198 Deferred tax 12,970 11,950 11,678 Retirement benefits 14,064 11,967 13,738 Decommissioning and other provisions 22,156 22,714 18,839 89,990 89,699 80,425 Current liabilities: Debt 5,917 5,221 5,106 Trade and other payables 65,741 72,495 71,988 Taxes payable 13,181 13,542 13,110 Retirement benefits 364 389 383 Decommissioning and other provisions 3,226 3,257 3,195 88,429 94,904 93,782 Total liabilities 178,419 184,603 174,207 Equity attributable to Royal Dutch Shellplc shareholders 180,002 185,015 179,147 Non-controlling interest 990 1,098 1,259 Total equity 180,992 186,113 180,406 Total liabilities and equity 359,411 370,716 354,613 Notes 1 to 5 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity attributable to Royal Dutch Shell plc shareholders Shares Share held in Other Retained Non-controlling Total$ million capital trust reserves earnings Total interest equity At January 1, 2014 542 (1,932) (2,037) 183,474 180,047 1,101 181,148 Comprehensiveincome for theperiod - - (6,650) 14,279 7,629 (27) 7,602 Capitalcontributions from,and other changesin, non-controllinginterest - - - 3 3 (7) (4) Dividends paid - - - (8,856) (8,856) (77) (8,933) Scrip dividends1 6 - (6) 2,399 2,399 - 2,399 Repurchases ofshares2 (5) - 5 (2,010) (2,010) - (2,010) Shares held intrust: net sales/(purchases) anddividends received - 807 - 77 884 - 884 Share-basedcompensation - - (122) 28 (94) - (94) At September 30,2014 543 (1,125) (8,810) 189,394 180,002 990 180,992 At January 1, 2013 542 (2,287) (3,752) 180,246 174,749 1,433 176,182 Comprehensiveincome for theperiod - - (210) 14,590 14,380 37 14,417 Capitalcontributions from,and other changesin, non-controllinginterest - - - - - 5 5 Dividends paid - - - (8,481) (8,481) (216) (8,697) Scrip dividends1 8 - (8) 2,893 2,893 - 2,893 Repurchases ofshares2 (10) - 10 (4,226) (4,226) - (4,226) Shares held intrust: net sales/(purchases) anddividends received - 322 - 92 414 - 414 Share-basedcompensation - - (256) (326) (582) - (582) At September 30,2013 540 (1,965) (4,216) 184,788 179,147 1,259 180,406 1 Under the Scrip Dividend Programme some 64.6 million A shares, equivalent to$2.4 billion, were issued during the first nine months 2014 and some 88.3million A shares, equivalent to $2.9 billion, were issued during the first ninemonths 2013. On May 22, 2014, Shell announced the cancellation of its ScripDividend Programme with effect from the second quarter 2014 interim dividendonwards. 2 Includes shares committed to repurchase and repurchases subject to settlementat the end of the quarter Notes 1 to 5 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Quarters $ million Nine months Q3 2014 Q2 2014 Q3 2013 2014 2013 Cash flow from operating activities 4,425 5,345 4,737 Income for the period 14,312 14,704 Adjustment for: 2,691 4,336 4,965 - Current taxation 11,427 13,905 377 468 354 - Interest expense (net) 1,223 1,012 - Depreciation, depletion and4,729 7,355 4,153 amortisation 19,508 15,880 (78) (2,203) (38) - Net gains on sale of assets (2,240) (295) - Decrease/(increase) in working1,741 (2,335) 551 capital 281 4,670 - Share of profit of joint(1,512) (1,716) (1,515) ventures and associates (5,298) (5,251) - Dividends received from joint2,096 1,768 1,307 ventures and associates 5,371 5,252 - Deferred taxation, retirement benefits, decommissioning 689 (396) (907) and other provisions (15) (1,763) 572 399 788 - Other 1,500 1,599 Net cash from operating15,730 13,021 14,395 activities (pre-tax) 46,069 49,713 (2,919) (4,380) (3,986) Taxation paid (10,633) (15,301) Net cash from operating12,811 8,641 10,409 activities 35,436 34,412 Cash flow from investing activities (7,867) (7,872) (8,788) Capital expenditure (23,136) (25,637) Investments in joint ventures and(151) (493) (352) associates (1,533) (1,015) 3,783 3,539 79 Proceeds from sales of assets 7,628 780 Proceeds from sales of joint157 3,671 212 ventures and associates 3,884 429 (278) 188 (63) Other investments (net) 62 (390) 29 31 31 Interest received 118 138 Net cash used in investing(4,327) (936) (8,881) activities (12,977) (25,695) Cash flow from financing activities Net (decrease)/increase in debt with maturity period within three(465) (1,397) 124 months (3,159) (113) 442 140 4,402 Other debt: New borrowings 3,777 4,780 (334) (251) (672) Repayments (3,518) (6,413) (404) (398) (323) Interest paid (1,170) (657) Change in non-controlling- (13) 8 interest (13) 9 Cash dividends paid to: - Royal Dutch Shell plc(2,994) (1,964) (1,637) shareholders (6,457) (5,588) (4) (45) (136) - Non-controlling interest (77) (216) (770) (346) (1,525) Repurchases of shares (2,357) (4,004) Shares held in trust: net (purchases)/sales and dividends48 90 (189) received 261 (631) Net cash used in financing(4,481) (4,184) 52 activities (12,713) (12,833) Currency translation differences relating to cash and (395) (26) 158 cash equivalents (415) (156) Increase/(decrease) in cash and3,608 3,495 1,738 cash equivalents 9,331 (4,272) Cash and cash equivalents at15,419 11,924 12,540 beginning of period 9,696 18,550 Cash and cash equivalents at end19,027 15,419 14,278 of period 19,027 14,278 Notes 1 to 5 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Basis of preparation These unaudited Condensed Consolidated Interim Financial Statements ("InterimStatements") of Royal Dutch Shell plc and its subsidiaries (collectivelyreferred to as Shell) have been prepared on the basis of the same accountingprinciples as, and should be read in conjunction with, the Annual Report andForm 20-F for the year ended December 31, 2013 (pages 105 to 110) as filed withthe U.S. Securities and Exchange Commission. The financial information presented in the Interim Statements does notconstitute statutory accounts within the meaning of section 434(3) of theCompanies Act 2006. Statutory accounts for the year ended December 31, 2013were published in Shell's Annual Report and a copy was delivered to theRegistrar of Companies in England and Wales. The auditors' report on thoseaccounts was unqualified, did not include a reference to any matters to whichthe auditors drew attention by way of emphasis without qualifying the reportand did not contain a statement under sections 498(2) or 498(3) of theCompanies Act 2006. 2. Segment information Segment earnings are presented on a current cost of supplies basis (CCSearnings). On this basis, the purchase price of volumes sold during the periodis based on the current cost of supplies during the same period after makingallowance for the tax effect. CCS earnings therefore exclude the effect ofchanges in the oil price on inventory carrying amounts. Net capital investment is defined as capital expenditure as reported in theCondensed Consolidated Statement of Cash Flows, adjusted for: proceeds fromdisposals (excluding other investments (net) in the Corporate segment);exploration expense excluding exploration wells written off; investments injoint ventures and associates; and leases and other items. CCS earnings and net capital investment information are the dominant measuresused by the Chief Executive Officer for the purposes of making decisions aboutallocating resources and assessing performance. Information by business segment: Quarters $ million Nine months Q3 2014 Q3 2013 2014 2013 Third-party revenue 10,318 11,563 Upstream 33,989 36,024 97,508 104,914 Downstream 294,659 305,857 25 36 Corporate 83 111 107,851 116,513 Total third-party revenue 328,731 341,992 Inter-segment revenue 12,758 11,569 Upstream 37,630 34,064 627 76 Downstream 1,698 477 - - Corporate - - Segment earnings 3,949 3,290 Upstream1 13,196 10,792 1,601 906 Downstream2 1,867 3,397 (301) 88 Corporate (124) 506 5,249 4,284 Total segment earnings 14,939 14,695 1 Second quarter 2014 Upstream earnings included an impairment charge of $1,943million after taxation, partly offset by divestment gains of $1,230 millionafter taxation. Second quarter 2013 Upstream earnings included an impairmentcharge of $2,071 million after taxation. 2 First quarter 2014 Downstream earnings included an impairment charge of $2,284million related to refineries in Asia and Europe. Quarters $ million Nine months Q3 2014 Q3 2013 2014 2013 5,249 4,284 Total segment earnings 14,939 14,695 Current cost of supplies adjustment: (894) 541 Purchases (751) (140) 246 (137) Taxation 203 53 Share of profit of joint ventures and(176) 49 associates (79) 96 4,425 4,737 Income for the period 14,312 14,704 3. Share capital Issued and fully paid Sterling deferred Ordinary shares of euro 0.07 each shares Number of shares A B of £1 each At January 1, 2014 3,898,011,213 2,472,839,187 50,000 Scrip dividends 64,568,758 - - Repurchases of shares (27,917,878) (32,428,573) - At September 30, 2014 3,934,662,093 2,440,410,614 50,000 At January 1, 2013 3,772,388,687 2,617,715,189 50,000 Scrip dividends 88,288,316 - - Repurchases of shares - (117,715,539) - At September 30, 2013 3,860,677,003 2,499,999,650 50,000 Nominal value Ordinary shares of euro 0.07 each $ million A B Total At January 1, 2014 333 209 542 Scrip dividends 6 - 6 Repurchases of shares (2) (3) (5) At September 30, 2014 337 206 543 At January 1, 2013 321 221 542 Scrip dividends 8 - 8 Repurchases of shares - (10) (10) At September 30, 2013 329 211 540 The total nominal value of sterling deferred shares is less than $1 million. At Royal Dutch Shell plc's Annual General Meeting on May 20, 2014, the Boardwas authorised to allot ordinary shares in Royal Dutch Shell plc, and to grantrights to subscribe for or to convert any security into ordinary shares inRoyal Dutch Shell plc, up to an aggregate nominal amount of euro 147 million(representing 2,100 million ordinary shares of euro 0.07 each), and to listsuch shares or rights on any stock exchange. This authority expires at theearlier of the close of business on August 20, 2015, and the end of the AnnualGeneral Meeting to be held in 2015, unless previously renewed, revoked orvaried by Royal Dutch Shell plc in a general meeting. 4. Other reserves Accumulated Share Capital Share other Merger premium redemption plan comprehensive$ million reserve1 reserve1 reserve2 reserve income Total At January 1, 2014 3,411 154 75 1,871 (7,548) (2,037) Other comprehensiveloss attributable toRoyal Dutch Shell plcshareholders - - - - (6,650) (6,650) Scrip dividends (6) - - - - (6) Repurchases of shares - - 5 - - 5 Share-basedcompensation - - - (122) - (122) At September 30, 2014 3,405 154 80 1,749 (14,198) (8,810) At January 1, 2013 3,423 154 63 2,028 (9,420) (3,752) Other comprehensiveloss attributable toRoyal Dutch Shell plcshareholders - - - - (210) (210) Scrip dividends (8) - - - - (8) Repurchases of shares - - 10 - - 10 Share-basedcompensation - - - (256) - (256) At September 30, 2013 3,415 154 73 1,772 (9,630) (4,216) 1 The merger reserve and share premium reserve were established as aconsequence of Royal Dutch Shell plc becoming the single parent company ofRoyal Dutch Petroleum Company and The "Shell" Transport and Trading Company,plc, now The Shell Transport and Trading Company Limited, in 2005. 2 The capital redemption reserve was established in connection with repurchasesof shares of Royal Dutch Shell plc. 5. Derivative contracts The table below provides the carrying amounts of derivatives contracts held,disclosed in accordance with IFRS 13 Fair Value Measurement. $ million Sep 30, 2014 Jun 30, 2014 Sep 30, 2013 Included within: Trade and other receivables - non-current 1,003 1,587 1,683 Trade and other receivables - current 7,000 8,393 7,218 Trade and other payables - non-current 589 497 583 Trade and other payables - current 6,230 8,949 7,200 As disclosed in the Consolidated Financial Statements for the year endedDecember 31, 2013, 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 assetsand liabilities. The fair values of the financial assets and liabilities aredefined as the price that would be received to sell an asset or paid totransfer a liability in an orderly transaction between market participants atthe measurement date. Methods and assumptions used to estimate the fair valuesat September 30, 2014 are consistent with those used in the year ended December31, 2013, and the carrying amounts of derivative contracts measured usingpredominantly unobservable inputs has not changed materially since that date. The fair value of debt excluding finance lease liabilities at September 30,2014, was $38,013 million (June 30, 2014: $39,047million; September 30, 2013:$33,604 million). Fair value is determined from the prices quoted for thosesecurities. 6. Impacts of accounting for derivatives In the ordinary course of business Shell enters into contracts to supply orpurchase oil and gas products, and also enters into derivative contracts tomitigate resulting economic exposures (generally price exposure). Derivativecontracts are carried at period-end market price (fair value), with movementsin fair value recognised in income for the period. Supply and purchasecontracts entered into for operational purposes are, by contrast, recognisedwhen the transaction occurs (see also below); furthermore, inventory is carriedat historical cost or net realisable value, whichever is lower. As a consequence, accounting mismatches occur because: (a) the supply orpurchase transaction is recognised in a different period; or (b) the inventoryis measured on a different basis. In addition, certain UK gas contracts held by Upstream are, due to pricing ordelivery conditions, deemed to contain embedded derivatives or written optionsand are also required to be carried at fair value even though they are enteredinto for operational purposes. The accounting impacts of the aforementioned are reported as identified itemsin this Report. 7. Return on average capital employed Return on average capital employed (ROACE) measures the efficiency of Shell'sutilisation of the capital that it employs and is a common measure of businessperformance. In this calculation, ROACE is defined as the sum of income for thecurrent and previous three quarters, adjusted for after-tax interest expense,as a percentage of the average capital employed for the same period. Capitalemployed consists of total equity, current debt and non-current debt. 8. Liquidity and capital resources Third quarter net cash from operating activities was $12.8 billion comparedwith $10.4 billion for the same period last year. Total current and non-current debt decreased to $43.0 billion at September 30,2014 from $44.1 billion at June 30, 2014 while cash and cash equivalentsincreased to $19.0 billion at September 30, 2014 from $15.4 billion at June 30,2014. No new debt was issued under the US shelf registration or under the euromedium-term note programme during the third quarter of 2014. Net capital investment for the third quarter 2014 was $4.8 billion, of which$5.4 billion in Upstream, and ($0.6) billion in Downstream. Net capitalinvestment for the same period of 2013 was $9.4 billion, of which $8.1 billionin Upstream, $1.2 billion in Downstream and $0.1 billion in Corporate. Dividends of $0.47 per share are announced on October 30, 2014 in respect ofthe third quarter. These dividends are payable on December 22, 2014. In thecase of B shares, the dividends will be payable through the dividend accessmechanism and are expected to be treated as UK-source rather than Dutch-source.See the Annual Report and Form 20-F for the year ended December 31, 2013 foradditional information on the dividend access mechanism. Nine months net cash from operating activities was $35.4 billion compared with$34.4 billion for the same period last year. Total current and non-current debt decreased to $43.0 billion at September 30,2014 from $44.6 billion at December 31, 2013 while cash and cash equivalentsincreased to $19.0 billion at September 30, 2014 from $9.7 billion at December31, 2013. New debt was issued under the euro medium-term note programme duringthe first nine months 2014. Net capital investment in the first nine months 2014 was $16.1 billion, ofwhich $15.3 billion in Upstream, $0.7 billion in Downstream and $0.1 billion inCorporate. Net capital investment for the same period of 2013 was $28.5billion, of which $25.1 billion in Upstream, $3.3 billion in Downstream and$0.1billion in Corporate. CAUTIONARY STATEMENT All amounts shown throughout this Report are unaudited. All peak productionfigures in Portfolio Developments are quoted at 100% expected production. The companies in which Royal Dutch Shell plc directly and indirectly ownsinvestments are separate entities. In this document "Shell", "Shell group" and"Royal Dutch Shell" are sometimes used for convenience where references aremade to Royal Dutch Shell plc and its subsidiaries in general. Likewise, thewords "we", "us" and "our" are also used to refer to subsidiaries in general orto those who work for them. These expressions are also used where no usefulpurpose is served by identifying the particular company or companies.''Subsidiaries'', "Shell subsidiaries" and "Shell companies" as used in thisdocument refer to companies over which Royal Dutch Shell plc either directly orindirectly has control. Companies over which Shell has joint control aregenerally referred to as "joint ventures" and companies over which Shell hassignificant influence but neither control nor joint control are referred to as"associates". The term "Shell interest" is used for convenience to indicate thedirect and/or indirect ownership interest held by Shell in a venture,partnership or company, after exclusion of all third-party interest. This document contains forward-looking statements concerning the financialcondition, results of operations and businesses of Royal Dutch Shell. Allstatements other than statements of historical fact are, or may be deemed tobe, forward-looking statements. Forward-looking statements are statements offuture expectations that are based on management's current expectations andassumptions and involve known and unknown risks and uncertainties that couldcause actual results, performance or events to differ materially from thoseexpressed or implied in these statements. Forward-looking statements include,among other things, statements concerning the potential exposure of Royal DutchShell to market risks and statements expressing management's expectations,beliefs, estimates, forecasts, projections and assumptions. Theseforward-looking statements are identified by their use of terms and phrasessuch as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'',''goals'', ''intend'', ''may'', ''objectives'', ''outlook'', ''plan'',''probably'', ''project'', ''risks'', "schedule", ''seek'', ''should'',''target'', ''will'' and similar terms and phrases. There are a number offactors that could affect the future operations of Royal Dutch Shell and couldcause those results to differ materially from those expressed in theforward-looking statements included in this document, including (withoutlimitation): (a) price fluctuations in crude oil and natural gas; (b) changesin demand for Shell's products; (c) currency fluctuations; (d) drilling andproduction results; (e) reserves estimates; (f) loss of market share andindustry competition; (g) environmental and physical risks; (h) risksassociated with the identification of suitable potential acquisition propertiesand targets, and successful negotiation and completion of such transactions;(i) the risk of doing business in developing countries and countries subject tointernational sanctions; (j) legislative, fiscal and regulatory developmentsincluding regulatory measures addressing climate change; (k) economic andfinancial market conditions in various countries and regions; (l) politicalrisks, including the risks of expropriation and renegotiation of the terms ofcontracts with governmental entities, delays or advancements in the approval ofprojects and delays in the reimbursement for shared costs; and (m) changes intrading conditions. All forward-looking statements contained in this documentare expressly qualified in their entirety by the cautionary statementscontained or referred to in this section. Readers should not place unduereliance on forward-looking statements. Additional risk factors that may affectfuture results are contained in Royal Dutch Shell's Form 20-F for the yearended December 31, 2013 (available at www.shell.com/investor and www.sec.gov).These risk factors also expressly qualify all forward-looking statementscontained in this document and should be considered by the reader. Eachforward-looking statement speaks only as of the date of this document, October30, 2014. Neither Royal Dutch Shell plc nor any of its subsidiaries undertakeany obligation to publicly update or revise any forward-looking statement as aresult of new information, future events or other information. In light ofthese risks, results could differ materially from those stated, implied orinferred from the forward-looking statements contained in this document. We may have used certain terms, such as resources, in this document that theUnited States Securities and Exchange Commission (SEC) strictly prohibits usfrom including in our filings with the SEC. U.S. investors are urged toconsider closely the disclosure in our Form 20-F, File No 1-32575, available onthe SEC website www.sec.gov. You can also obtain this form from the SEC bycalling 1-800-SEC-0330. October 30, 2014 The information in this Report reflects the unaudited consolidated financialposition and results of Royal Dutch Shell plc. Company No. 4366849, RegisteredOffice: Shell Centre, London, SE1 7NA, England, UK. Contacts: - Investor Relations: International + 31 (0) 70 377 4540; North America +1 832337 2034 - Media: International +44 (0) 207 934 5550; USA +1 713 241 4544