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1ST QUARTER 2009 UNAUDITED RESULTS

  • Royal Dutch Shell’s first quarter 2009 earnings, on a current cost of supplies (CCS) basis, were $3.3 billion compared to $7.8 billion a year ago. Basic CCS earnings per share decreased by 57% versus the same quarter a year ago.
  • Cash flow from operating activities for the first quarter 2009 was $7.6 billion. Net capital investment for the quarter was $6.9 billion. Total cash returned to shareholders in the form of dividends was $2.4 billion.
  • A first quarter 2009 dividend has been announced of $0.42 per share, an increase of 5% over the US dollar dividend for the same period in 2008.



Royal Dutch Shell Chief Executive Jeroen van der Veer commented: "First quarter 2009 performance was affected by the weaker global economy, with a challenging Upstream and Downstream business environment. As we announced previously, our dividend for first quarter 2009 will be $0.42 per share, an increase of 5%. We continue to make significant investments in the company for future profitability. Industry conditions remain challenging, and our focus is on capital discipline and costs. We are taking a prudent approach to this downturn, focused on sustaining a strong position in the energy landscape. Shell people, operational excellence, good investments and technology are our cornerstones for the future."

SUMMARY UNAUDITED RESULTS

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Income attributable to shareholders

3,488

(2,810)

9,083

-62

Less: Estimated CCS adjustment for Oil Products and Chemicals (see Note 2)

191

(7,595)

1,307

 

CCS earnings

3,297

4,785

7,776

-58

Basic earnings per share ($)

0.57

(0.44)

1.47

-61

Less: Estimated CCS adjustment per share ($)

0.03

(1.22)

0.21

 

Basic CCS earnings per share ($)

0.54

0.78

1.26

-57

Dividend per ordinary share ($)

0.42

0.40

0.40

+5

1 Q1 on Q1 change




KEY FEATURES OF THE FIRST QUARTER 2009

  • First quarter 2009 CCS earnings were $3,297 million, 58% lower than in the same quarter a year ago.
  • First quarter 2009 reported earnings were $3,488 million compared to earnings of $9,083 million in the same quarter a year ago.
  • Basic CCS earnings per share decreased by 57% versus the same quarter a year ago.
  • Total cash returned to shareholders in the form of dividends in the first quarter 2009 was $2.4 billion.
  • Cash flow from operating activities, excluding net working capital movements, was $7.9 billion compared to $14.1 billion for the same quarter last year. Including net working capital movements, cash flow from operating activities was $7.6 billion compared to $16.9 billion for the same quarter last year.
  • Capital investment for the first quarter 2009 was $7.1 billion. Net capital investment (capital investment, less divestment proceeds) for the first quarter 2009 was $6.9 billion.
  • Return on average capital employed (ROACE), on a reported income basis (see Note 3), was 14.1%.
  • Gearing was 6.6% at the end of the first quarter 2009 versus 1.9% at the end of the first quarter 2008.
  • Upstream oil and gas volumes were impacted by ongoing security challenges in Nigeria, OPEC quota restrictions and weakening industrial demand for natural gas. Refinery intake and marketing and chemicals sales volumes were impacted by the weak economic environment across all regions.
  • Oil and gas production, including oil sands production, for the first quarter 2009 was 3,396 thousand barrels of oil equivalent per day (boe/d). Excluding the impact of divestments, production sharing contracts (PSC) pricing effects, OPEC quota restrictions and impacts from the security situation in Nigeria, production was broadly similar to the same quarter last year.
  • Liquefied Natural Gas (LNG) sales volumes of 3.06 million tonnes were 13% lower than in the same quarter a year ago. Excluding the impacts from the security situation in Nigeria, LNG sales volumes were broadly similar compared to the same quarter last year.
  • Oil Products marketing sales volumes were 6% lower than in the first quarter 2008. Excluding the impact of divestments, marketing sales volumes decreased by 3%. Chemical product sales volumes in the first quarter 2009 decreased by 21% compared to the first quarter 2008.
  • Oil Products refinery availability was in line with the first quarter 2008 at 92%. Chemicals manufacturing plant availability was 92%, 3% lower than in the first quarter 2008. Oil Sands upgrader availability was 96% compared to 94% in the same quarter last year.

SUMMARY UNAUDITED RESULTS

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Exploration & Production

1,697

3,710

5,143

 

Gas & Power

514

981

948

 

Oil Sands

(42)

(30)

249

 

Oil Products (CCS basis)

1,092

582

1,194

 

Chemicals (CCS basis)

(74)

(19)

201

 

Corporate

133

(373)

146

 

Minority interest

(23)

(66)

(105)

 

CCS earnings

3,297

4,785

7,776

-58

1 Q1 on Q1 change



SUMMARY OF IDENTIFIED ITEMS

Earnings in the first quarter 2009 reflected the following items, which in aggregate amounted to a net gain of $337 million (compared to a net charge of $77 million in the first quarter 2008), as summarised in the table below:

  • Exploration & Production earnings included a net gain of $345 million, reflecting gains from divestments of $65 million, tax credits of $235 million and a gain of $96 million related to the mark-to-market valuation of certain UK gas contracts, which were partly offset by a charge related to a pension adjustment for inflation in the USA of $51 million. Earnings for the first quarter 2008 included a net charge of $66 million.
  • Gas & Power earnings included a charge of $15 million related to a pension adjustment for inflation in the USA of $14 million and a charge of $1 million related to the mark-to-market valuation of certain gas contracts. Earnings for the first quarter 2008 included a charge of $11 million.
  • Oil Products earnings included a charge of $136 million, reflecting a pension adjustment for inflation in the USA of $80 million and tax charges of $56 million.
  • Chemicals earnings included a charge of $19 million related to a pension adjustment for inflation in the USA.
  • Corporate earnings included a gain of $162 million related to tax credits.

SUMMARY OF IDENTIFIED ITEMS

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Segment earnings impact of identified items:

 

 

 

  Exploration & Production

345

1,303

(66)

  Gas & Power

(15)

(55)

(11)

  Oil Sands

-

-

-

  Oil Products (CCS basis)

(136)

(233)

-

  Chemicals (CCS basis)

(19)

(22)

-

  Corporate

162

(96)

-

  Minority interest

-

-

-

CCS earnings impact

337

897

(77)



These identified items generally relate to events with an impact of more than $50 million on Royal Dutch Shell’s earnings and are shown to provide additional insight into its segment earnings, CCS earnings and income attributable to shareholders. Further additional comments on the business segments are provided in the section ‘Earnings by business segment’ on page 4 and onwards.

Retirement benefit accounting effects

Retirement plans are provided for employees of all major subsidiaries. The nature of such plans varies according to the legal and fiscal requirements and economic conditions of the country in which the employees are engaged.

As detailed in Shell's 2008 Annual Report and Form 20-F, the sharp downturn in financial markets in 2008 resulted in a reduction in plan asset values held for retirement benefits. This in turn reduces the expected return on plan assets in the following year, according to IFRS accounting rules. This will result in approximately $1.1 billion (post-tax) of non-cash charges in the 2009 full-year Statement of Income, which will be allocated to the business segments and divided equally in each quarter. This compares to $0.6 billion (post-tax) of non-cash gains in the full year 2008 Statement of Income.




EARNINGS BY BUSINESS SEGMENT

EXPLORATION & PRODUCTION

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Segment earnings

1,697

3,710

5,143

-67

Crude oil production (thousand b/d)

1,639

1,693

1,756

-7

Natural gas production available for sale (million scf/d)

9,751

9,531

9,755

-

Barrels of oil equivalent (thousand boe/d) 2

3,321

3,336

3,438

-3

1  Q1 on Q1 change

2 Excludes oil sands bitumen production


First quarter
Exploration & Production segment earnings were $1,697 million compared to $5,143 million a year ago. Earnings included a net gain of $345 million related to identified items, compared to a net charge of $66 million in the first quarter 2008 (see page 3 for details).

Earnings compared to the first quarter 2008 reflected the impact of lower oil and gas prices on revenues, lower oil production volumes, higher exploration expenses, mainly related to on going amortisation of leasehold license costs, and non-cash pension charges, which were partly offset by lower royalty expenses.

Global liquids realisations were 54% lower than in the first quarter 2008. Global gas realisations were 15% lower than a year ago. Outside the USA, gas realisations decreased by 2% whereas in the USA gas realisations decreased by 50%.

First quarter 2009 production (excluding oil sands bitumen production) was 3,321 thousand barrels of oil equivalent per day (boe/d) compared to 3,438 thousand boe/d a year ago. Crude oil production was down 7% and natural gas production was in line with the first quarter 2008.

Underlying production, compared to the first quarter 2008, increased by some 200 thousand boe/d from new fields start-ups and the continuing ramp-up of fields started up in recent years, more than offsetting field declines.

First quarter portfolio developments

In Russia, the Sakhalin II project (Shell share 27.5%) delivered first gas production from the Lunskoye A platform and also commenced LNG exports. The Sakhalin II project is expected to deliver 395 thousand boe/d of peak production (100% basis) after full ramp-up.

In the USA, the final investment decision (FID) was taken on the Caesar Tonga project (Shell share 22.4%), with estimated peak production of 40 thousand boe/d (100% basis).

Also in the USA, Shell was the apparent highest bidder on 39 of 54 blocks in Lease Sale 208 in the Gulf of Mexico.

In Guyana, Shell acquired a 25% interest in the Stabroek exploration licence covering an area of some 47 thousand km2.

In Abu Dhabi, Shell signed an agreement with Abu Dhabi National Oil Company (ADNOC) to extend the GASCO Joint Venture for a further twenty years. GASCO’s operations are mainly focused on gas processing and natural gas liquid (NGL) extraction.


GAS & POWER

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Segment earnings

514

981

948

-46

LNG sales volumes (million tonnes)

3.06

3.36

3.51

-13

1 Q1 on Q1 change


First quarter
Gas & Power segment earnings were $514 million compared to $948 million a year ago. Earnings included a charge of $15 million related to identified items, compared to a charge of $11 million in the first quarter 2008 (see page 3 for details).

Earnings compared to the first quarter 2008 mainly reflected lower LNG earnings, reduced gas-to-liquids product prices, lower natural gas and power trading contributions and non-cash pension charges.

LNG earnings were lower than in the same quarter last year reflecting lower LNG sales volumes and the impact of lower oil prices on LNG revenues. In addition, lower dividends were received from an LNG joint venture due to payment timing differences. These were partly offset by higher income from LNG cargo diversion opportunities and the benefit of recent sales contract renegotiations.

LNG sales volumes of 3.06 million tonnes were 13% lower than in the same quarter a year ago. Compared to the first quarter 2008, volumes increased following the start-up of Train 5 at the North West Shelf project and the start-up of the Sakhalin II LNG production. This growth was more than offset by lower volumes from Nigeria LNG due to natural gas supply disruptions. Excluding the impacts from the security situation in Nigeria, LNG sales volumes were broadly similar compared to the same quarter last year.

Natural gas and power marketing and trading earnings were lower than in the same quarter a year ago, reflecting increased contributions from Europe, which were more than offset by reduced earnings in North America.

First quarter portfolio developments

In Russia, following the start-up of LNG production, the first LNG cargo was lifted from the Sakhalin II project (Shell share 27.5%), which will have an LNG capacity of 9.6 million tonnes per annum (100% basis) after full ramp-up.


OIL SANDS

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Segment earnings

(42)

(30)

249

-

Bitumen production (thousand b/d)

75

79

84

-11

Sales volumes (thousand b/d)

110

112

144

-24

Upgrader availability (%)

96

87

94

 

1 Q1 on Q1 change


First quarter
Oil Sands segment results were a loss of $42 million compared to earnings of $249 million in the same quarter last year.

Earnings compared to the first quarter 2008 reflected the impact of lower oil prices on revenues, higher operating costs, higher royalty expenses and non-cash pension charges, which were partly offset by higher underlying production volumes.

Bitumen production compared to the same quarter last year decreased by 11%. Bitumen production, excluding the one-off effect of the royalty revision in the first quarter 2008, resulted in an increase of the underlying production of 4%. Upgrader availability was 96% compared to 94% in the same quarter last year.


OIL PRODUCTS

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Segment earnings

1,396

(6,416)

2,367

 

Less: Estimated CCS adjustment (see note 2)

304

(6,998)

1,173

 

Segment CCS earnings

1,092

582

1,194

-9

Total Oil Products sales (thousand b/d)

6,029

6,400

6,831

-12

Refinery intake (thousand b/d)

3,153

3,125

3,694

-15

Refinery availability (%)

92

90

92

 

1 Q1 on Q1 change


First quarter
Oil Products segment earnings were $1,396 million compared to $2,367 million for the same period last year.

First quarter Oil Products CCS segment earnings were $1,092 million compared to $1,194 million in the first quarter 2008. Earnings included a charge of $136 million related to identified items (see page 3 for details).

CCS earnings compared to the first quarter 2008 reflected increased marketing earnings, lower refining earnings and non-cash pension charges.

Marketing earnings compared to the same period a year ago reflected lower oil products marketing sales volumes, as a consequence of a worldwide decline in demand, and lower retail and lubricants earnings, which were more than offset by higher trading and B2B contributions.

Oil products (marketing and trading) sales volumes decreased by 12% compared to the same quarter last year mainly as a result of reduced global demand. Marketing sales volumes were 6% lower than in the first quarter 2008. Excluding the impact of divestments, marketing sales volumes decreased by 3%.

Refining earnings compared to the first quarter 2008 reflected lower realised refining margins and lower refinery intake volumes, which were partly offset by lower operating costs.

Industry refining margins compared to the same quarter a year ago were higher in the Asia-Pacific region and the US West Coast and lower in Europe and the US Gulf Coast.

Refining intake volumes decreased by 15% compared to the same quarter last year. Excluding the impact of divestments, intake volumes decreased by 7% mainly as a result of weaker market conditions. Refinery availability was in line with the first quarter of 2008 at 92%.


CHEMICALS

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Segment earnings

(182)

(831)

348

 

Less: Estimated CCS adjustment (see note 2)

(108)

(812)

147

 

Segment CCS earnings

(74)

(19)

201

-

Sales volumes (thousand tonnes)

4,294

4,483

5,459

-21

Manufacturing plant availability (%)

92

93

95

 

1 Q1 on Q1 change


First quarter
Chemicals segment results were a loss of $182 million compared to earnings of $348 million for the same period last year.

First quarter Chemicals CCS segment results were a loss of $74 million compared to earnings of $201 million in the same quarter last year. Earnings included a charge of $19 million related to an identified item (see page 3 for details).

CCS earnings compared to the first quarter 2008 reflected lower sales volumes, lower realised margins, lower income from equity-accounted investments and higher operating costs primarily due to non-cash pension charges.

Sales volumes decreased by 21% compared to the first quarter 2008, mainly as a result of reduced global demand.

Chemicals manufacturing plant availability was 92%, 3% lower than in the first quarter 2008. The reduced global demand for chemicals products has significantly impacted the chemicals manufacturing plant utilisation rate, which dropped to 64% from 86% in the first quarter 2008.


CORPORATE

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Segment earnings

133

(373)

146

-9

1 Q1 on Q1 change


First quarter
Corporate segment earnings were $133 million compared to $146 million for the same period last year. Earnings included a gain of $162 million related to an identified item (see page 3 for details). Currency exchange losses in the first quarter 2009 were $46 million compared to losses of $62 million in the first quarter 2008.

Earnings, when compared to the first quarter 2008, reflected lower interest income and higher shareholder and other costs, which were partly offset by increased tax credits and reduced currency exchange rate losses.


PRICE AND MARGIN INFORMATION

OIL & GAS

 

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Realised oil prices – Exploration & Production (period average)

$/bbl

WOUSA

42.88

58.40

90.40

USA

37.81

52.32

92.55

Global

42.16

57.60

90.72

Realised oil prices – Oil Sands (period average)

$/bbl

Canada

37.94

47.26

85.08

Realised gas prices (period average)

$/thousand scf

Europe

9.44

10.58

9.00

WOUSA (including Europe)

5.75

6.89

5.85

USA

4.80

6.37

9.52

Global

5.57

6.80

6.52

Oil and gas marker industry prices (period average)

 

Brent ($/bbl)

44.46

55.48

96.66

WTI ($/bbl)

43.20

59.13

97.86

Edmonton Par ($/bbl)

40.25

52.83

97.91

Henry Hub ($/MMBtu)

4.61

6.38

8.55

UK National Balancing Point (pence/therm)

46.90

57.03

53.05

Japanese Crude Cocktail – JCC ($/bbl)1

43.17

77.04

93.16

REFINING & CRACKER INDUSTRY MARGINS2

 

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Refining marker industry gross margins (period average)

$/bbl

ANS US West Coast coking margin

10.65

8.50

8.75

WTS US Gulf Coast coking margin

7.90

4.05

8.70

Rotterdam Brent complex

3.00

5.55

3.55

Singapore 80/20 Arab light/Tapis complex

2.85

4.45

1.80

Cracker industry margins (period average)

$/tonne

US Ethane

367.00

490.00

359.00

Western Europe naphtha

113.00

1,448.00

433.00

North East Asia naphtha

(67.00)

(29.00)

8.00

1 JCC prices for the first quarter 2009 are based on available market data up to the end of January 2009. Prices for this period will be updated when full market data are available.

2 The refining and cracker industry margins shown above do not represent actual Shell realised margins for the periods. These are estimated industry margins based on available market information at the end of the quarter.



    

OIL & GAS – OPERATIONAL DATA

 

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Crude oil production

thousand b/d

 

Europe

361

361

416

 

Africa

274

293

322

 

Asia Pacific

207

218

208

 

Middle East, Russia, CIS

455

480

428

 

USA

275

264

301

 

Other Americas

67

77

81

 

Total crude oil production excluding oil sands

1,639

1,693

1,756

-7

Bitumen production – oil sands

75

79

84

 

Total crude oil production including oil sands

1,714

1,772

1,840

-7

Natural gas production available for sale

million scf/d2

 

Europe

4,762

4,450

4,894

 

Africa

253

448

619

 

Asia Pacific

2,708

2,718

2,438

 

Middle East, Russia, CIS

340

257

232

 

USA

1,110

1,071

1,105

 

Other Americas

578

587

467

 

 

9,751

9,531

9,755

-

Total production in barrels of oil equivalent

thousand boe/d3

 

Europe

1,182

1,128

1,260

 

Africa

318

370

429

 

Asia Pacific

674

687

628

 

Middle East, Russia, CIS

514

524

468

 

USA

466

449

492

 

Other Americas

167

178

161

 

Total production excluding oil sands

3,321

3,336

3,438

-3

Bitumen production – oil sands

75

79

84

 

Total production including oil sands

3,396

3,415

3,522

-4

1 Q1 on Q1 change

2 scf/d = standard cubic feet per day; 1 scf = 0.0283 cubic metre

3 Natural gas converted to oil equivalent at 5.8 million scf/d = thousand boe/d



    

OIL PRODUCTS AND CHEMICALS – OPERATIONAL DATA

 

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Refinery processing intake

thousand b/d

 

Europe

1,357

1,227

1,741

 

Africa, Asia, Australia/Oceania

644

746

756

 

USA

794

808

845

 

Other Americas

358

344

352

 

 

3,153

3,125

3,694

-15

Oil sales

 

 

 

 

Gasolines

1,957

2,025

2,083

 

Kerosenes

718

728

814

 

Gas/diesel oils

2,046

2,225

2,337

 

Fuel oil

620

732

839

 

Other products

688

690

758

 

Total oil products *

6,029

6,400

6,831

-12

*Comprising:

 

 

 

 

Europe

1,645

1,791

1,959

 

Africa, Asia, Australia/Oceania

1,229

1,245

1,245

 

USA

1,335

1,409

1,396

 

Other Americas

682

698

755

 

Export sales

1,138

1,257

1,476

 

Chemical sales volumes by main product category 2**

thousand tonnes

 

Base chemicals

2,419

2,584

3,119

 

First-line derivatives

1,874

1,897

2,338

 

Other

1

2

2

 

 

4,294

4,483

5,459

-21

**Comprising:

 

 

 

 

Europe

1,782

1,882

2,289

 

Africa, Asia, Australia/Oceania

1,123

1,179

1,228

 

USA

1,321

1,306

1,784

 

Other Americas

68

116

158

 

1 Q1 on Q1 change

2 Excluding volumes sold by equity-accounted investments, chemical feedstock trading and by-products.



NOTE

All amounts shown throughout this Report are unaudited.

Second quarter 2009 results are expected to be announced on July 30, 2009 and third quarter results are expected to be announced on October 29, 2009.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this document “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this document refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this document, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 34% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This document contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this document, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve 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 potential litigation and regulatory effects arising from recategorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2008 (available at www.shell.com/investor and www.sec.gov). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this document, April 29, 2009. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this document.

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov . You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

 

    April 29, 2009

 



APPENDIX: ROYAL DUTCH SHELL FINANCIAL REPORT AND TABLES

SUMMARISED STATEMENT OF INCOME (SEE NOTE 1)

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Revenue2

58,222

81,073

114,302

 

Cost of sales

49,245

76,349

96,780

 

Gross profit

8,977

4,724

17,522

-49

Selling, distribution and administrative expenses

3,693

4,476

3,969

 

Exploration

496

778

325

 

Share of profit of equity-accounted investments

928

350

2,425

 

Net finance costs and other (income)/expense

(18)

290

(53)

 

Income before taxation

5,734

(470)

15,706

-63

Taxation

2,218

2,489

6,505

 

Income for the period

3,516

(2,959)

9,201

-62

Income attributable to minority interest

28

(149)

118

 

Income attributable to Royal Dutch Shell plc shareholders

3,488

(2,810)

9,083

-62

1 Q1 on Q1 change

2 Revenue is stated after deducting sales taxes, excise duties and similar levies of $17,555 million in Q1 2009, $20,413 million in Q4 2008, and $22,920 million in Q1 2008.



BASIC EARNINGS PER SHARE (SEE NOTES 1, 2 AND 6)

 

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Earnings per share ($)

0.57

(0.44)

1.47

CCS earnings per share ($)

0.54

0.78

1.26



DILUTED EARNINGS PER SHARE (SEE NOTES 1, 2 AND 6)

 

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Earnings per share ($)

0.57

(0.44)

1.46

CCS earnings per share ($)

0.54

0.78

1.25


EARNINGS BY BUSINESS SEGMENT (SEE NOTES 2 AND 4)

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

%1

Exploration & Production:

 

 

 

 

- World outside USA

1,753

3,477

3,540

-50

- USA

(56)

233

1,603

-

 

1,697

3,710

5,143

-67

Gas & Power:

 

 

 

 

- World outside USA

601

956

933

-36

- USA

(87)

25

15

-

 

514

981

948

-46

Oil Sands:

(42)

(30)

249

-

Oil Products (CCS basis):

 

 

 

 

- World outside USA

1,036

1,375

978

+6

- USA

56

(793)

216

-74

 

1,092

582

1,194

-9

Chemicals (CCS basis):

 

 

 

 

- World outside USA

109

115

304

-64

- USA

(183)

(134)

(103)

-78

 

(74)

(19)

201

-

Total operating segments

3,187

5,224

7,735

-59

Corporate:

 

 

 

 

- Interest and investment income/(expense)

21

(41)

110

 

- Currency exchange gains/(losses)

(46)

(351)

(62)

 

- Other - including taxation

158

19

98

 

 

133

(373)

146

 

Minority interest

(23)

(66)

(105)

 

CCS earnings

3,297

4,785

7,776

-58

Estimated CCS adjustment for Oil Products and Chemicals

191

(7,595)

1,307

 

Income attributable to Royal Dutch Shell plc shareholders

3,488

(2,810)

9,083

-62

1 Q1 on Q1 change


SUMMARISED BALANCE SHEET (SEE NOTES 1 AND 5)

 

$ million

 

Mar 31, 2009

Dec 31, 2008

Mar 31, 2008

Assets

 

 

 

Non-current assets:

 

 

 

Intangible assets

4,961

5,021

5,282

Property, plant and equipment

113,255

112,038

105,806

Investments:

 

 

 

- equity-accounted investments

28,516

28,327

31,198

- financial assets

4,092

4,065

3,333

Deferred tax

3,464

3,418

3,409

Pre-paid pension costs

5,575

6,198

5,878

Other

6,976

6,764

6,406

 

166,839

165,831

161,312

Current assets:

 

 

 

Inventories

21,404

19,342

32,184

Accounts receivable

77,116

82,040

87,507

Cash and cash equivalents

15,961

15,188

14,417

 

114,481

116,570

134,108

Total assets

281,320

282,401

295,420

Liabilities

 

 

 

Non-current liabilities:

 

 

 

Debt

18,341

13,772

11,378

Deferred tax

12,778

12,518

13,473

Retirement benefit obligations

5,463

5,469

6,304

Other provisions

12,444

12,570

14,016

Other

3,642

3,677

4,189

 

52,668

48,006

49,360

Current liabilities:

 

 

 

Debt

6,693

9,497

5,684

Accounts payable and accrued liabilities

81,554

85,091

89,531

Taxes payable

9,849

8,107

14,412

Retirement benefit obligations

386

383

455

Other provisions

2,229

2,451

2,815

 

100,711

105,529

112,897

Total liabilities

153,379

153,535

162,257

Equity attributable to Royal Dutch Shell plc shareholders

126,434

127,285

131,130

Minority interest

1,507

1,581

2,033

Total equity

127,941

128,866

133,163

Total liabilities and equity

281,320

282,401

295,420


SUMMARISED STATEMENT OF CASH FLOWS (SEE NOTE 1)

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Cash flow from operating activities:

 

 

 

Income for the period

3,516

(2,959)

9,201

Adjustment for:

 

 

 

- Current taxation

1,844

2,411

6,405

- Interest (income)/expense

330

414

178

- Depreciation, depletion and amortisation

3,090

3,684

3,146

- (Gains)/losses on sale of assets

(147)

(1,234)

(281)

- Decrease/(increase) in net working capital

(365)

14,687

2,784

- Share of profit of equity-accounted investments

(928)

(350)

(2,425)

- Dividends received from equity-accounted investments

977

2,522

1,752

- Deferred taxation and other provisions

365

(1,105)

322

- Other

141

(35)

94

Cash flow from operating activities (pre-tax)

8,823

18,035

21,176

Taxation paid

(1,264)

(7,748)

(4,314)

Cash flow from operating activities

7,559

10,287

16,862

Cash flow from investing activities:

 

 

 

Capital expenditure

(5,985)

(7,892)

(7,429)

Investments in equity-accounted investments

(436)

(193)

(616)

Proceeds from sale of assets

204

1,179

445

Proceeds from sale of equity-accounted investments

17

569

61

Proceeds from sale of /(additions to) financial assets

6

(36)

10

Interest received

101

191

285

Cash flow from investing activities

(6,093)

(6,182)

(7,244)

Cash flow from financing activities:

 

 

 

Net increase/(decrease) in debt with maturity period within three months

(3,588)

3,970

(863)

Other debt: New borrowings

6,884

3,001

185

  Repayments

(1,386)

(581)

(664)

Interest paid

(262)

(409)

(298)

Change in minority interest

12

31

(7)

Repurchase of shares

-

(302)

(1,073)

Dividends paid to:

 

 

 

- Royal Dutch Shell plc shareholders

(2,405)

(2,408)

(2,329)

- Minority interest

(30)

(54)

(51)

Treasury shares:

 

 

 

- Net sales/(purchases) and dividends received

136

47

200

Cash flow from financing activities

(639)

3,295

(4,900)

Currency translation differences relating to cash and cash equivalents

(54)

(33)

43

Increase/(decrease) in cash and cash equivalents

773

7,367

4,761

Cash and cash equivalents at beginning of period

15,188

7,821

9,656

Cash and cash equivalents at end of period

15,961

15,188

14,417


CAPITAL INVESTMENT

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Capital expenditure:

 

 

 

Exploration & Production:

 

 

 

- World outside USA

2,835

3,510

2,202

- USA

801

965

2,530

 

3,636

4,475

4,732

Gas & Power:

 

 

 

- World outside USA

877

1,033

823

- USA

3

2

1

 

880

1,035

824

Oil Sands

749

817

711

Oil Products::

 

 

 

- World outside USA

454

1,252

456

- USA

188

158

61

 

642

1,410

517

Chemicals:

 

 

 

- World outside USA

367

567

374

- USA

49

70

34

 

416

637

408

Corporate

62

98

37

Total capital expenditure

6,385

8,472

7,229

Exploration expense

 

 

 

- World outside USA

176

336

135

- USA

79

153

80

 

255

489

215

New equity in equity-accounted investments

 

 

 

- World outside USA

160

135

365

- USA

36

19

5

 

196

154

370

New loans to equity-accounted investments

240

39

246

Total capital investment*

7,076

9,154

8,060

*Comprising:

 

 

 

- Exploration & Production

4,191

5,040

5,439

- Gas & Power

959

1,096

925

- Oil Sands

749

817

711

- Oil Products

699

1,464

536

- Chemicals

416

639

412

- Corporate

62

98

37

 

7,076

9,154

8,060


ADDITIONAL SEGMENTAL INFORMATION1

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Exploration & Production

 

 

 

Segment earnings

1,697

3,710

5,143

Including:

 

 

 

- Exploration

496

778

325

- Depreciation, depletion & amortisation

2,073

2,368

2,165

- Share of profit of equity-accounted investments

548

1,297

1,212

Cash flow from operations

4,043

3,105

10,329

Less: Net working capital movements2

(901)

397

923

Cash flow from operations excluding net working capital movements

4,944

2,708

9,406

Capital employed

55,882

55,274

47,927

Gas & Power

 

 

 

Segment earnings

514

981

948

Including:

 

 

 

- Depreciation, depletion & amortisation

88

80

81

- Share of profit of equity-accounted investments

319

550

584

Cash flow from operations

1,724

1,120

1,917

Less: Net working capital movements2

1,030

(1)

902

Cash flow from operations excluding net working capital movements

694

1,121

1,015

Capital employed

22,169

22,497

19,305

Oil Sands

 

 

 

Segment earnings

(42)

(30)

249

Including:

 

 

 

- Depreciation, depletion & amortisation

38

40

44

Cash flow from operations

5

(37)

298

Less: Net working capital movements2

(57)

(34)

(102)

Cash flow from operations excluding net working capital movements

62

(3)

400

Capital employed

6,763

6,200

5,292

1 Corporate segment information has not been included in the table above. Please refer to the “Earnings by business segment” section for additional information. The above data does not consider minority interest impacts on the segments.

2 Excluding working capital movements related to taxation.


ADDITIONAL SEGMENTAL INFORMATION1 (continued)

$ million

Quarters

 

Q1 2009

Q4 2008

Q1 2008

Oil Products

 

 

 

Segment CCS earnings

1,092

582

1,194

Including:

 

 

 

- Depreciation, depletion & amortisation

549

855

608

- Share of profit of equity-accounted investments

89

(239)

267

Cash flow from operations

526

6,521

2,362

Less: Net working capital movements2

(2,113)

13,783

(435)

Cash flow from operations excluding net working capital movements

2,639

(7,262)

2,797

Capital employed

44,690

44,171

55,768

Chemicals

 

 

 

Segment CCS earnings

(74)

(19)

201

Including:

 

 

 

- Depreciation, depletion & amortisation

159

155

162

- Share of profit of equity-accounted investments

68

(99)

158

Cash flow from operations

(110)

890

386

Less: Net working capital movements2

109

1,439

(9)

Cash flow from operations excluding net working capital movements

(219)

(549)

395

Capital employed

10,096

9,904

11,233

1 Corporate segment information has not been included in the above table. Please refer to the ‘Earnings by business segment’ section for additional information. The above data does not consider minority interest impacts on the segments.

2 Excluding working capital movements related to taxation.




NOTES

1. Accounting policies and basis of presentation

The quarterly financial report and tables are prepared in accordance with International Financial Reporting Standards (IFRS) and are also in accordance with IFRS as adopted by the European Union.

The accounting policies are unchanged from those set out in Note 2 to the Consolidated Financial Statements of Royal Dutch Shell plc in the Annual Report and Form 20-F for the year ended December 31, 2008 on pages 118 to 122.


2. Earnings on an estimated current cost of supplies (CCS) basis

To facilitate a better understanding of underlying business performance, the financial results are also analysed on an estimated current cost of supplies (CCS) basis as applied for the Oil Products and Chemicals segment earnings. Earnings on an estimated current cost of supplies basis provides useful information concerning the effect of changes in the cost of supplies on Royal Dutch Shell’s results of operations and is a measure to manage the performance of the Oil Products and Chemicals segments but is not a measure of financial performance under IFRS.

On this basis, Oil Products and Chemicals segment cost of sales of the volumes sold during the period is based on the cost of supplies during the same period after making allowance for the estimated tax effect, instead of the first-in, first-out (FIFO) method of inventory accounting. Earnings calculated on this basis do not represent an application of the last-in, first-out (LIFO) inventory basis and do not reflect any inventory drawdown effects.


3. Return on average capital employed (ROACE)

ROACE is defined as the sum of the current and previous three quarters’ income adjusted for interest expense, after tax, divided by the average capital employed for the period.

Components of the calculation are:

$ million

Q1 2009

Q1 2008

Income (four quarters)

20,791

33,686

Interest expense after tax

543

726

ROACE numerator

21,334

34,412

Capital employed - opening

150,225

130,881

Capital employed - closing

152,975

150,225

Capital employed - average

151,600

140,553

ROACE

14.1%

24.5%


4. Earnings by business segment

Operating segment results are presented before deduction of minority interest and also exclude interest and other income of a non-operational nature, interest expense, non-trading currency exchange effects and tax on these items, which are included in the Corporate results. Operating segment results are after tax and include equity-accounted investments.


5. Equity

Total equity comprises equity attributable to shareholders of Royal Dutch Shell and to the minority interest. Other reserves comprise the capital redemption reserve, share premium reserve, merger reserve, share plan reserve, currency translation differences, unrealised gains/(losses) on securities and unrealised gains/(losses) on cash flow hedges.

$ million

Ordinary share capital

Treasury shares

Other reserves

Retained earnings

Total

Minority interest

Total equity

At December 31, 2008

527

(1,867)

3,178

125,447

127,285

1,581

128,866

Income for the period

-

-

-

3,488

3,488

28

3,516

Other comprehensive income

-

-

(2,072)

-

(2,072)

(84)

(2,156)

Capital contributions/ (repayments) from/to minority shareholders and other changes in minority interest

-

-

-

 

-

12

12

Dividends paid

-

-

-

(2,405)

(2,405)

(30)

(2,435)

Treasury shares: net sales/(purchases) and dividends received

-

136

-

-

136

-

136

Repurchases of shares

-

-

-

 

-

-

-

Share-based compensation

-

-

(57)

59

2

-

2

At March 31, 2009

527

(1,731)

1,049

126,589

126,434

1,507

127,941


$ million

Ordinary share capital

Treasury shares

Other reserves

Retained earnings

Total

Minority interest

Total equity

At December 31, 2007

536

(2,392)

14,148

111,668

123,960

2,008

125,968

Income for the period

-

-

-

9,083

9,083

118

9,201

Other comprehensive income

-

-

1,656

-

1,656

(35)

1,621

Capital contributions/ (repayments) from/to minority shareholders

-

-

-

-

-

(7)

(7)

Dividends paid

-

-

-

(2,329)

(2,329)

(51)

(2,380)

Treasury shares: net sales/(purchases) and dividends received

-

200

-

-

200

-

200

Repurchases of shares

(2)

-

2

(1,327)

(1,327)

-

(1,327)

Share-based compensation

-

-

(113)

-

(113)

-

(113)

At March 31, 2008

534

(2,192)

15,693

117,095

131,130

2,033

133,163



6. Basis for Royal Dutch Shell earnings per ordinary share

The total number of Royal Dutch Shell ordinary shares in issue at the end of the period was 6,241.5 million. Royal Dutch Shell reports earnings per share on a basic and on a diluted basis, based on the weighted average number of Royal Dutch Shell (combined A and B) ordinary shares outstanding. Shares held in respect of share options and other incentive compensation plans are excluded in determining basic earnings per share.

Basic earnings per share calculations are based on the following weighted average number of shares:

Millions

Q1 2009

Q4 2008

Q1 2008

Royal Dutch Shell ordinary shares of euro 0.07 each

6,121.6

6,123.8

6,195.5

Diluted earnings per share calculations are based on the following weighted average number of shares. This adjusts the basic number of shares for all share options currently “in-the-money”.

Millions

Q1 2009

Q4 2008

Q1 2008

Royal Dutch Shell ordinary shares of euro 0.07 each

6,124.5

6,127.5

6,211.4

Basic shares outstanding at the end of the following periods are:

Millions

Q1 2009

Q4 2008

Q1 2008

Royal Dutch Shell ordinary shares of euro 0.07 each

6,124.9

6,121.7

6,187.0

One American Depository Receipt (ADR) is equal to two Royal Dutch Shell ordinary shares.

_________________________________________________________________________________

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