Thursday October 26, 2:00 am ET
Delivery and Growth – Leveraging a Strong Portfolio
LONDON, October 26 /PRNewswire-FirstCall/ —
– Royal Dutch Shell’s third quarter 2006 CCS earnings were $6.9 billion, compared to some $7.2 billion a year ago. CCS earnings per share increased by 1% versus a year ago. Third quarter 2005 earnings included divestment gains of some $1.7 billion related to the divestment of pipeline assets held through Gasunie NV in the Netherlands.
– Excluding the 2005 divestment gain of $1.7 billion related to Gasunie, CCS earnings per share increased by 33% versus a year ago.
– Royal Dutch Shell’s third quarter dividend has been announced at EUR0.25 per share, an increase of 9% from year-ago levels.
– $2.8 billion, or 1.2% of Royal Dutch Shell shares were bought back for cancellation during the quarter. Chief Executive Jeroen van der Veer commented “This is good performance by the Group. Our earnings have proven to be resilient in the face of rising industry costs and weakening refining margins. Operating performance has been satisfactory. LNG growth has been impressive in the quarter, and our upstream volumes have grown despite the shut-downs in Nigeria”.
Van der Veer added “Cost pressure remains a significant challenge for our industry. We remain focused on making the right portfolio choices to create long-term shareholder value”.
Summary unaudited results
THIRD $ million NINE
QUARTER MONTHS
2006 2005 % 2006 2005 %
5,942 9,032 -34 Income attributable to shareholders 20,159 20,943 -4
Estimated current cost of supplies
(CCS) adjustment for Oil Products
and Chemicals
1,006 (1,844) (see note 2) (809) (3,653)
6,948 7,188 -3 CCS earnings 19,350 17,290 +12
0.93 1.35 Basic earnings per share ($) 3.13 3.12
0.16 (0.27) Estimated CCS adjustment per share (0.13) (0.54)
($)
1.09 1.08 Basic CCS earnings per share ($) 3.00 2.58
0.25 0.23 Dividend per ordinary share (Euro)(1) 0.75 0.69
1. Q1 2005 based on dividend paid by Royal Dutch Petroleum Company,
adjusted for the effects of the unification.
Key features of the third quarter 2006
– Exploration & Production segment earnings were $3,743 million compared with $4,977 million a year ago. The third quarter 2005 included a gain of $1,699 million related to the divestment of pipeline assets held through Gasunie NV in the Netherlands. Earnings reflected higher production volumes and stronger oil and gas prices, partly offset by higher costs versus a year ago.
– Third quarter 2006 production was 3,251 thousand barrels of oil equivalent (boe) per day. Excluding the impact of hurricane damage in the Gulf of Mexico, security issues in Nigeria, and Production Sharing Contract (PSC) impacts from increased oil and gas prices, production increased by around 3% versus a year ago.
– Gas & Power segment earnings were $787 million, compared to $556 million in the same quarter last year. Earnings reflected substantially higher liquefied natural gas (LNG) volumes and continued strong marketing and trading earnings. LNG sales volumes increased by 19% compared to the same quarter last year.
– In Oil Products CCS earnings were $2,160 million compared to $1,726 million in the third quarter of 2005. CCS earnings reflected stronger marketing earnings, higher trading profits and improved refinery utilisation rates partly offset by lower refining margins. Chemicals CCS earnings were $335 million compared to $140 million for the third quarter of 2005, which included net charges of $184 million related to divested assets and various provisions. Operations in Chemicals reflected the start of a heavy planned maintenance programme, which is scheduled to extend into the fourth quarter 2006.
– Gearing (see note 6) was 13.4% at the end of the third quarter 2006 versus, on a comparable Royal Dutch Shell basis, 9.7% at the end of the third quarter 2005. Total cash returned to shareholders in the quarter was $4.9 billion in the form of dividends and share repurchases.
– Third quarter 2006 cash flow from operating activities was $10.1 billion compared to $6.6 billion a year ago. Excluding working capital movements and taxation effects, cash flow from operating activities was $9.6 billion compared to $10.5 billion a year ago.
– Capital investment for the third quarter 2006 was $5.5 billion, excluding the minority share of Sakhalin of $0.6 billion.
– Capital investment for the first nine months of 2006 was $16.0 billion excluding the minority share of Sakhalin of $1.4 billion. That investment includes $3.0 billion of acquisitions mainly related to the acquisition of BlackRock Ventures Inc. in Canada by Shell Canada in the second quarter 2006. Some $1.1 billion of proceeds were realised from divestments year to date, predominantly in Downstream. The industry continues to face significant cost pressures.
– Royal Dutch Shell plc has announced that it has approached the Board of Directors of Shell Canada Limited to indicate its intention to offer to acquire the minority interests in Shell Canada Limited (Toronto Stock Exchange, ticker symbol SHC), for a cash price of C$40 per share. This proposal would value Shell Canada Limited’s fully diluted minority share capital at approximately C$7.7 billion. The Group owns a 78% stake in Shell Canada Limited.
Basic earnings per share (see notes 1, 2 and 9)
QUARTERS NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
0.93 1.13 1.35 Earnings per share ($) 3.13 3.12
1.09 0.98 1.08 CCS earnings per share ($) 3.00 2.58
Diluted earnings per share (see notes 1, 2 and 9)
QUARTERS NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
0.93 1.13 1.35 Earnings per share ($) 3.12 3.11
1.09 0.97 1.07 CCS earnings per share ($) 2.99 2.57
Summary segment earnings
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
Segment
earnings
3,999 Exploration
&
3,743 4,977 Production 11,485 10,677
787 516 556 Gas & Power 2,068 1,043
2,065 Oil
Products
2,160 1,726 (CCS basis) 5,558 5,634
348 Chemicals
335 140 (CCS basis) 822 774
(451) Other
Industry
and
260 97 Corporate 31 (246)
(163) Minority
(337) (308) interests (614) (592)
_________ ___________ _______ ________ ___________
6,948 6,314 7,188 -3 CCS segment 19,350 17,290 +12
earnings
_________ ___________ _______ ________ ___________
Summary segment earnings – continued
Earnings in the third quarter 2006 reflected the following items, which in aggregate were a net charge of $77 million (compared to a net gain of $1,569 million mainly from divestments in the third quarter 2005) as summarised in the table below:
– Exploration & Production third quarter 2006 earnings included a net income of $147 million related to the mark-to-market valuation of certain UK gas contracts partly reversing earlier recorded mark-to-market losses.
– Also in Exploration and Production, charges of $310 million due to the UK tax increase that was effective from January 1, 2006, were included in the third quarter 2006. This amount includes deferred tax balance revaluations but excludes the normal effect on third quarter 2006 segment earnings.
– Corporate included $86 million of tax credits.
Summary table
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
Segment
earnings
impact
(163) 304 1,765 Exploration & 254 1,575
Production(1)
– – 94 Gas & Power – (84)
– (65) – Oil Products (65) 427
(CCS basis)
– (30) (184) Chemicals (CCS (30) (481)
basis)
86 (400) (60) Other Industry (314) (150)
and Corporate
– (41) (46) Minority (41) (46)
interests
___________ ___________ ___________ ___________ __________
(77) (232) 1,569 CCS earnings (196) 1,241
impact
___________ ___________ ___________ ___________ __________
1. Q3 2006 and nine months 2006 include a charge of $310 million related to the UK tax increase.
These items generally relate to events with an impact of greater than $50 million on earnings and are shown to provide additional insight in the direction of the segment earnings, CCS earnings and income attributable to shareholders. Further additional comments are provided in the section ‘Earnings per industry segment’ on page 5 and onwards.
Earnings per industry segment
Upstream
QUARTERS NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
$/bbl Realised Oil Prices $/bbl
65.60 63.99 56.89 WOUSA 62.35 49.79
62.57 63.63 56.24 USA 60.77 48.15
65.13 63.95 56.83 Global 62.15 49.56
$/thousand scf Realised Gas Prices $/thousand scf
6.43 6.54 4.24 Europe 6.72 4.72
4.05 4.18 3.70 WOUSA (including Europe) 4.35 3.61
7.31 7.36 8.35 USA 8.04 7.41
4.77 4.82 4.59 Global 5.09 4.43
Oil and gas marker
industry prices (period
average)
69.63 69.51 61.55 Brent $/bbl 66.97 53.65
70.44 70.45 63.20 WTI $/bbl 68.06 55.38
6.05 6.59 9.50 Henry Hub $/thousand scf 6.80 7.62
UK National Balancing
33.77 34.60 29.17 Point pence/therm 45.93 32.37
Exploration & Production
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
3,743 3,999 4,977 -25 Segment earnings 11,485 10,677 +8
Crude oil production (thousand
2,054 1,897 2,077 -1 b/d) 1,973 2,129 -7
6,942 7,865 6,551 +6 Natural gas production available 8,365 8,088 +3
for sale (million scf/d)
Barrels of oil equivalent
3,251 3,253 3,207 +1 (thousand boe/d) 3,415 3,523 -3
Exploration & Production segment earnings were $3,743 million compared to $4,977 million a year ago.
Third quarter 2006 earnings included a net gain of $147 million related to the mark-to-market valuation of certain UK gas contracts and charges of $310 million due to the UK Upstream tax increase effective from January 1, 2006. This amount includes deferred tax balance revaluations but excludes the normal impact on third quarter 2006 segment earnings. The third quarter 2005 included a net gain of $1,765 million mainly from divestments. Excluding these effects earnings were 22% higher than a year ago.
Earnings reflected higher production volumes and stronger oil and gas prices partly offset by higher operating costs reflecting industry conditions and increased pre-development activity levels.
Liquids realisations were 15% higher than a year ago, in line with increases in marker crudes Brent of 13% and WTI of 11%. Outside the USA gas realisations increased by 9% and in the USA gas realisations decreased by 12%.
Third quarter 2006 production was 3,251 thousand boe per day compared to 3,207 thousand boe per day a year ago.
Production compared to the third quarter 2005 included new volumes of 257 thousand boe per day including Bonga (Shell share 55%) and Erha (Shell share 44%) in Nigeria, West Salym (Shell share 50%) in Russia, Champion West Phase III (Shell share 50%) in Brunei and the early start up of E8 in Malaysia (Shell share 50%). In the USA, production rates during the third quarter 2006 at the Mars platform in the Gulf of Mexico were 20% above those prior to the damage caused by hurricanes in 2005.
Excluding the impact of security concerns in Nigeria in 2006, PSC impacts from oil and gas prices, and hurricane damage in the Gulf of Mexico in 2005, production was around 3% higher than the equivalent period last year.
Production from Shell Petroleum Development Company’s Nigerian operations was 185 thousand boe per day (Shell share) lower than a year ago due to deferred production mainly in the Western Delta resulting from security concerns. Whilst efforts continue towards restoring safe operational conditions in the Niger Delta, it is unlikely that the shut-in facilities in Nigeria will be restored in 2006. No firm date can be given for the re-start of the production nor is it possible to predict the rate of ramp up to full production. Restricted access in the area continues to impact the drilling programme for the future, and the progress of new projects.
Portfolio developments:
In the USA, Shell and its joint venture partners announced the development of the Great White, Tobago and Silvertip fields (Shell share between 33% and 40%) via a Perdido regional development host (Shell share 35%), located in Alaminos Canyon, offshore Gulf of Mexico. The facility will be designed to handle 130 thousand boe per day.
In Malaysia, first gas was delivered from the offshore E8 field (Shell Share 50%), which is a key component of the E11 Hub integrated gas project which aims to rejuvenate existing E11 facilities and develop several offshore gas fields over the next years. The E11 hub will have a design capacity of 1.6 billion cubic feet (bcf ) of gas per day.
In New Zealand, first gas was delivered from the Pohokura field (Shell share 48%), which is expected to produce around 40 thousand boe a day at its peak.
In Russia, the Sakhalin 2 project (Shell share 55%) continues to progress in accordance with the PSA. The project is now more than 80% complete and on track for first LNG deliveries in 2008. Activities continue in line with the overall cost estimate advised in July 2005.
Gas & Power
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
787 516 556 +42 Segment earnings 2,068 1,043 +98
Equity LNG sales volume (million
2.94 2.84 2.48 +19 tonnes) 8.78 7.84 +12
Gas and Power segment earnings were $787 million, compared to $556 million in the same quarter last year, which included gains of $94 million mainly related to divestments. Excluding these items earnings were 70% higher and reflected substantially higher liquefied natural gas (LNG) volumes and continued strong marketing and trading earnings.
LNG volumes of 2.94 million tonnes were 19% higher than a year ago, driven by capacity growth at Nigeria LNG (Shell share 26%) and Qalhat LNG (Shell share 11%) and supported by strong operating performance across the LNG plants. Realised LNG prices reflected higher crude prices and continued opportunities for cargo optimisation.
Marketing and trading earnings reflected gas storage optimisation in the USA and overall strong marketing performance across North America and Europe.
Portfolio developments:
In Mexico, the Altamira re-gasification terminal was commissioned with the first ever LNG cargo to be delivered to the country. Shell owns 50% of the terminal and has rights to 75% of the initial capacity of 4.4 million tonnes of LNG per annum. The state power company in Mexico, Comision Federal de Electricidad (CFE), has contracted to purchase 5.2 billion cubic meters of re-gasified LNG per annum from the facility (equivalent to 3.9 million tonnes of LNG per year).
In Australia, Shell and Anglo American signed a joint development agreement to further advance the Monash Energy coal-to-liquids project. This potential development involves the gasification of Anglo American’s brown coal from Victoria’s Latrobe Valley for conversion into transportation fuels, including virtually sulphur-free synthetic diesel, using Shell’s proprietary coal gasification and gas-to-liquids technologies.
Downstream
QUARTERS NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
Refining marker industry gross
margins
$/bbl (period average) $/bbl
13.25 22.20 17.75 ANS US West Coast coking margin 16.15 15.80
14.70 20.85 18.00 WTS US Gulf Coast coking margin 16.00 12.15
3.45 4.75 6.05 Rotterdam Brent complex 3.50 4.55
Singapore 80/20 Arab light/Tapis
0.95 4.05 3.00 complex 2.05 3.05
Oil Products
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
1,214 3,017 3,439 Segment 6,334 9,154
earnings
CCS
adjustment
– see note
946 (952) (1,713) 2 (776) (3,520)
________ ___________ ___________ ________ _______
2,160 2,065 1,726 +25 Segment 5,558 5,634 -1
CCS
earnings
Refinery
intake
(thousand
3,907 3,789 3,910 b/d) 3,852 3,982 -3
Total Oil
products
sales
See (thousand See
6,521 6,426 6,625 (1) b/d) 6,491 7,180 (1)
1. Certain contracts are held for trading purposes and reported net
rather than gross with effect from Q3 2005. The effect in Q1 2006, Q2
2006 and Q3 2006 is a reduction in Total Oil products sales of
approximately 890 thousand b/d, 840 thousand b/d and 870 thousand b/d
respectively. The effect in Q3 2005 was 850 thousand b/d.
Oil Products segment earnings were $1,214 million compared to $3,439 million for the same period last year.
Third quarter CCS earnings were $2,160 million compared to $1,726 million in the third quarter of 2005.
Higher CCS earnings reflected stronger marketing earnings, higher trading profits and improved refinery utilisation rates partly offset by lower refining margins.
In Manufacturing, Supply and Distribution, industry refining margins declined in all regions from the hurricane driven highs of the third quarter of 2005. Refinery utilisation on an Equivalent Distillation Capacity (EDC) basis increased to 81.6% compared to hurricane-impacted utilisation levels of 77.8% in the third quarter of 2005.
In Marketing including Lubricants and B2B, earnings increased compared to the same period a year ago. Increased earnings reflected increased margins for retail, commercial fuels, marine and bitumen. Marketing sales volumes declined 4.6% compared to volumes in the third quarter of 2005 including the impact from divested volumes (2.0%) and rationalised B2B volumes (0.9%). Trading continued to make a significant contribution to earnings in the third quarter of 2006.
Portfolio developments:
In China, Shell acquired a 75% share in Beijing Tongyi Petroleum Chemical Company Limited and Xianyang Tongyi Petroleum Chemical Company Limited, which produce and market China’s leading independent lubricant brand. The transaction makes Shell the leading international energy company marketing lubricants in China and increases Shell’s global finished lubricants volume by 8%.
Sales of Shell’s retail and lubricants marketing assets in Puerto Rico
and distribution and marketing assets in Bermuda were completed. In the USA
the sale of a residential and small commercial natural gas marketing business
was completed in the third quarter. The agreed sales of various distribution
and marketing assets in the Pacific Islands, are expected to be completed by
the end of the year.
Chemicals
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
251 446 321 Segment 880 1,029
earnings
CCS
adjustment
– see note
84 (98) (181) 2 (58) (255)
___________ ___________ ___________ ________ ________
335 348 140 Segment 822 774 +6
CCS
+139 earnings
Sales
volumes
(thousand
5,636 5,870 5,589 +1 tonnes) 17,447 17,097 +2
Chemicals segment earnings were $251 million compared to $321 million for the same period last year.
Third quarter 2006 CCS earnings were $335 million compared to $140 million for the third quarter of 2005, which included net charges of $184 million related to divested assets and various provisions.
Sales volumes and operating rates were unchanged compared to the same quarter a year ago. Operations in the third quarter 2006 reflected the start of a heavy planned maintenance programme in the USA and Europe, which impacted operating rates by some 6 percentage points. The programme is scheduled to extend into the fourth quarter 2006. Earnings reflected higher margins and improved earnings from equity-accounted investments partly offset by higher costs and lower trading earnings. In China, the Nanhai joint venture (Shell share 50%) continued to make good progress with production and sales volumes increasing progressively. The third quarter 2005 was impacted by hurricane-related downtime in the USA and supply constraints, which reduced operating rates by some 7 percentage points.
Other Industry and Corporate segments
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
(4) (7) (76) Other (19) (92)
Industry
segment
earnings
264 (444) 173 Corporate 50 (154)
segment
earnings
(see note
10)
___________ ___________ ___________ ___________ ___________
Other
Industry
and
Corporate
segments
260 (451) 97 results 31 (246)
Third quarter Other Industry and Corporate segment results were a gain of $260 million, which included tax credits of $86 million in Corporate. This compared to a gain of $97 million in the third quarter 2005, which included impairment charges of $60 million in Other Industry segments.
In the third quarter 2006 in the Corporate segment, net income from insurance and taxation effects, was partly offset by a reduction in net interest gains (including higher interest expense related to equity accounted investments) and negative results from currency movements.
Note
All amounts shown throughout this report are unaudited.
Fourth quarter results for 2006 are expected to be announced on February 1, 2007. First quarter results for 2007 are expected to be announced on May 3, 2007, second quarter results for 2007 are expected to be announced on July 26, 2007 and third quarter results are expected to be announced on October 25, 2007.
In this Report “Group” is defined as Royal Dutch Shell together with all of its consolidated subsidiaries. The expressions “Shell”, “Group”, “Shell Group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to the Group or Group companies in general. Likewise, the words “we”, “us” and “our” are also used to refer to Group companies 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. The expression “Group companies” as used in this Report refers 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 the Group has significant influence but not control are referred to as “associated companies” or “associates” and companies in which the Group has joint control are referred to as “jointly controlled entities”. In this Report, associates and jointly controlled entities are also referred to as “equity accounted investments”.
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 Report, 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 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, project delay or advancement, approvals and cost estimates; and (m) changes in trading conditions. All forward-looking statements contained in this Report 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. Each forward-looking statement speaks only as of the date of this Report. 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 Report.
Please refer to the Annual Report and Form 20-F for the year ended December 31, 2005 for a description of certain important factors, risks and uncertainties that may affect the Company’s businesses.
Cautionary Note to US Investors:
Disclaimer
(*Be on your guard: Royal Dutch Shell senior management are masters of double talk and double dealing. Shell has a track record of engaging in fictitious trades, securities fraud, price fixing, theft of intellectual property, bribes, corruption, organising and arming a private army of police spies in Nigeria, conspiring with successive Nigerian governments to rob billions from a poverty stricken population and using a registered charity – The Shell Foundation, as a front for commercial objectives: in other words a bunch of evil con-artists)
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 announcement, such as “barrels of oil equivalent in place” that the 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 and disclosure in our Forms 6-K file No 1-32575, available on the SEC’s website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
October 26, 2006
Appendix 1: Royal Dutch Shell financial report and tables
Statement of income (see note 1)
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
84,254 83,127 76,435 +10 Revenue(1) 243,345 231,235 +5
70,383 67,838 60,704 Cost of sales 200,143 188,733
_______ ___________ ___________ _______ _______
13,871 15,289 15,731 -12 Gross profit 43,202 42,502 +2
Selling,
distribution and
administrative
4,126 4,429 3,763 expenses 11,968 11,219
401 250 275 Exploration 932 784
Share of profit
of equity
accounted
1,358 1,829 3,081 investments 5,010 5,734
Net finance
costs and other
(60) 47 (268) (income)/expense (168) (159)
_______ ___________ ___________ ________ ________
Income before -3
10,762 12,392 15,042 -28 taxation 35,480 36,392
4,507 4,865 5,558 Taxation 14,682 14,427
_______ ___________ ___________ ________ ________
6,255 7,527 9,484 Income from
continuing
operations 20,798 21,965
– – (93) Income/(loss)
from
discontinued
operations – (307)
_______ ___________ ___________ ________ ________
Income for the
6,255 7,527 9,391 -33 period 20,798 21,658 -4
======= ========== ========== ======= ========
Income
attributable to
minority
313 203 359 interests 639 715
_______ ___________ ___________ ________ ________
Income
attributable to
5,942 7,324 9,032 -34 shareholders 20,159 20,943 -4
_______ ___________ ___________ ________ ________
1. Revenue is stated after deducting sales taxes, excise duties and
similar levies of $18,472 million in Q3 2006, $17,984 million in Q2 2006,
$16,709 million in Q1 2006, $18,282 million in Q3 2005, $18,739 million
in Q2 2005 and $17,912 million in Q1 2005.
Earnings by industry segment (see notes 2 and 5)
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
Exploration &
Production:
2,650 3,014 4,051 -35 World outside 8,459 7,705 +10
USA
1,093 985 926 +18 USA 3,026 2,972 +2
_____ ________ ________ ______ ___________
3,743 3,999 4,977 -25 11,485 10,677 +8
_____ ________ ________ ______ ___________
Gas & Power:
621 468 469 +32 World outside 1,812 1,061 +71
USA
166 48 87 +91 USA 256 (18)
_____ ________ ________ ___________ ___________
787 516 556 +42 2,068 1,043 +98
_____ ________ ________ ___________ ___________
Oil Products
(CCS basis):
1,665 1,332 1,229 +35 World outside 4,068 4,204 -3
USA
495 733 497 USA 1,490 1,430 +4
_____ ________ ________ ___________ ___________
2,160 2,065 1,726 +25 5,558 5,634 -1
_____ ________ ________ ___________ ___________
Chemicals (CCS
basis):
348 309 227 +53 World outside 830 713 +16
USA
(13) 39 (87) USA (8) 61
_____ ________ ________ ___________ ___________
335 348 140 +139 822 774 +6
_____ ________ ________ ___________ ___________
(4) (7) (76) Other industry (19) (92)
segments
_____ ________ ________ ___________ ___________
7,021 6,921 7,323 -4 TOTAL OPERATING 19,914 18,036 +10
SEGMENTS
_____ ________ ________ ___________ ___________
Corporate:
35 39 71 Interest 74 (73)
income/(expense)
(19) (73) 126 Currency 20 80
exchange
gains/(losses)
248 (410) (24) Other – (44) (161)
including
taxation
_____ ________ ________ ___________ ___________
264 (444) 173 50 (154)
_____ ________ ________ ___________ ___________
(337) (163) (308) Minority (614) (592)
interests
_____ ________ ________ ___________ ___________
6,948 6,314 7,188 -3 CCS EARNINGS 19,350 17,290 +12
_____ ________ ________ ___________ ___________
CCS adjustment
for Oil Products
(1,006) 1,010 1,844 and Chemicals 809 3,653
______ _______ ________ ___________ ___________
Income
attributable to
shareholders of
Royal Dutch
5,942 7,324 9,032 -34 Shell plc 20,159 20,943 -4
_____ ________ ________ ___________ ___________
Summarised balance sheet (see notes 1 and 7)
$ million
Sep 30 Jun 30 Sep 30
ASSETS 2006 2006 2005
Non-current assets:
Intangible assets 4,697 4,721 4,361
Property, plant and equipment 96,133 94,102 85,601
Investments:
equity accounted investments 19,453 19,083 17,138
financial assets 3,914 3,912 3,236
Deferred tax 2,664 2,259 3,039
Prepaid pension costs 3,459 3,143 2,453
Other 4,598 4,569 4,102
___________ ___________ ___________
134,918 131,789 119,930
___________ ___________ ___________
Current assets:
Inventories 23,391 24,660 21,490
Accounts receivable 63,895 62,327 83,812
Cash and cash equivalents 11,240 11,774 15,998
___________ ___________ ___________
98,526 98,761 121,300
___________ ___________ ___________
___________ ___________ ___________
TOTAL ASSETS 233,444 230,550 241,230
___________ ___________ ___________
LIABILITIES
Non-current liabilities:
Debt 7,665 8,472 7,795
Deferred tax 12,485 12,007 12,411
Retirement benefit obligations 6,298 6,271 6,018
Other provisions 8,793 8,682 7,114
Other 4,346 4,650 4,395
___________ ___________ ___________
39,587 40,082 37,733
___________ ___________ ___________
Current liabilities:
Debt 6,395 6,112 6,714
Accounts payable and accrued 64,445 63,701 82,912
liabilities
Taxes payable 10,679 10,525 12,510
Retirement benefit obligations 284 285 302
Other provisions 1,763 1,612 1,254
___________ ___________ ___________
83,566 82,235 103,692
___________ ___________ ___________
___________ ___________ ___________
TOTAL LIABILITIES 123,153 122,317 141,425
___________ ___________ ___________
Equity attributable to 101,604 100,213 92,353
shareholders of Royal Dutch
Shell plc
Minority interests 8,687 8,020 7,452
___________ ___________ ___________
TOTAL EQUITY 110,291 108,233 99,805
___________ ___________ ___________
TOTAL LIABILITIES AND EQUITY 233,444 230,550 241,230
___________ ___________ ___________
Summarised statement of cash flows (see notes 1 and 8)
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
CASH FLOW FROM
OPERATING ACTIVITIES:
Income for the
6,255 7,527 9,391 period 20,798 21,658
Adjustment for:
4,403 4,763 5,548 Current taxation 14,181 14,945
Interest
145 121 120 (income)/expense 498 484
Depreciation,
depletion and
3,365 3,132 2,903 amortisation 9,309 9,194
(Profit)/loss on
(86) (8) (352) sale of assets (279) (1,103)
Decrease/(increase)
in net working
560 (3,276) (5,490) capital (4,695) (8,959)
Share of profit of
equity accounted
(1,358) (1,829) (3,073) investments (5,010) (5,512)
Dividends received
from equity
accounted
1,450 1,556 2,761 investments 4,066 5,268
Deferred taxation
and other
133 903 (112) provisions 1,614 (646)
(299) 489 (1,159) Other (317) (1,102)
_______ ___________ ___________ ________ _______
Cash flow from
operating
activities
14,568 13,378 10,537 (pre-tax) 40,165 34,227
_______ ___________ ___________ ________ _______
(4,489) (5,544) (3,891) Taxation paid (14,428) (12,579)
_______ ___________ ___________ ________ _______
Cash flow from
operating
10,079 7,834 6,646 activities 25,737 21,648
_______ ___________ ___________ ________ _______
CASH FLOW FROM
INVESTING ACTIVITIES:
(5,408) (6,630) (3,787) Capital expenditure (15,857) (10,457)
Investments in
equity accounted
(126) (177) (135) investments (534) (566)
Proceeds from sale
289 211 416 of assets 1,006 1,914
Proceeds from sale
of equity accounted
37 36 3,869 investments 81 4,101
Proceeds from sale
of / (additions to)
(22) 29 113 financial assets (33) 363
285 240 251 Interest received 759 618
________ ___________ ___________ ________ _______
Cash flow from
investing
(4,945) (6,291) 727 activities (14,578) (4,027)
________ ___________ ___________ ________ _______
CASH FLOW FROM
FINANCING ACTIVITIES:
Net
increase/(decrease)
(843) 1,852 1,087 in debt 664 291
(330) (261) (284) Interest paid (952) (813)
Change in minority
287 423 90 interests 1,070 893
Net
issue/(repurchase)
(2,801) (2,512) (1,938) of shares (6,657) (2,438)
Dividends paid to:
Shareholders of
Royal Dutch Shell
(2,083) (2,091) (1,902) plc (6,012) (8,687)
(53) (161) (130) Minority interest (258) (235)
Treasury shares:
Net
sales/(purchases)
and dividends
149 135 169 received 375 415
_______ ___________ ___________ ________ _______
Cash flow from
financing
(5,674) (2,615) (2,908) activities (11,770) (10,574)
_______ ___________ ___________ ________ _______
Currency
translation
differences
relating to cash
and cash
6 79 13 equivalents 121 (250)
_______ ___________ ___________ ________ _______
INCREASE/(DECREASE)
IN CASH AND CASH
(534) (993) 4,478 EQUIVALENTS (490) 6,797
_______ ___________ ___________ ________ _______
Cash and cash
equivalents at
11,774 12,767 11,520 beginning of period 11,730 9,201
Cash and cash
equivalents at end
11,240 11,774 15,998 of period 11,240 15,998
Operational data – Upstream
QUARTERS NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
CRUDE OIL
thousand b/d PRODUCTION thousand b/d
433 488 516 Europe 484 551
346 321 370 Africa 335 374
Asia
254 232 222 Pacific 239 229
Middle
East,
489 439 512 Russia, CIS 446 439
353 295 289 USA 313 364
Other
Western
81 76 70 Hemisphere 82 81
___________ ___________ ___________ _______ _________
Total crude
oil
production
excluding
1,956 1,851 1,979 oil sands 1,899 2,038
98 46 98 Oil sands 74 91
___________ ___________ ___________ _______ _________
Total crude
oil
production
including
2,054 1,897 2,077 -1 oil sands 1,973 2,129 -7
___________ ___________ ___________ _______ _________
NATURAL GAS
million scf/d(1) PRODUCTION million scf/d(1)
AVAILABLE
FOR SALE
2,125 3,027 2,268 Europe 3,521 3,455
475 481 341 Africa 467 370
Asia
2,356 2,381 2,267 Pacific 2,408 2,287
Middle
East,
273 304 231 Russia, CIS 299 253
1,186 1,175 948 USA 1,160 1,228
Other
Western
527 497 496 Hemisphere 510 495
___________ ___________ ___________ _______ _________
6,942 7,865 6,551 +6 8,365 8,088 +3
___________ ___________ ___________ _______ _________
BARRELS OF
OIL
thousand boe/d(2) EQUIVALENT thousand boe/d(2)
800 1,010 907 Europe 1,091 1,147
428 404 429 Africa 416 438
Asia
660 642 613 Pacific 654 623
Middle
East,
536 491 552 Russia, CIS 497 483
557 498 453 USA 513 575
Other
Western
172 162 155 Hemisphere 170 166
___________ ___________ ___________ _______ _________
Total
production
excluding
3,153 3,207 3,109 oil sands 3,341 3,432
98 46 98 Oil sands 74 91
___________ ___________ ___________ _______ _________
Total
production
including
3,251 3,253 3,207 +1 oil sands 3,415 3,523 -3
___________ ___________ ___________ _______ _________
1. scf/d = standard cubic feet per day; 1
standard cubic foot = 0.0283 cubic metre
2. Natural gas converted to oil equivalent at
5.8 million scf/d = thousand boe/d
Operational data – Downstream
QUARTERS NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 % 2006 2005 %
thousand b/d thousand b/d
REFINERY
PROCESSING
INTAKE
1,758 1,627 1,774 Europe 1,708 1,785
Other Eastern
797 832 853 Hemisphere 814 850
965 978 909 USA 964 965
Other Western
387 352 374 Hemisphere 366 382
_________ _________ _________ _______ _________
3,907 3,789 3,910 3,852 3,982 -3
_________ _________ _________ _______ _________
OIL SALES
2,256 2,186 2,230 Gasolines 2,198 2,449
750 780 770 Kerosenes 754 818
Gas/Diesel
2,074 2,071 2,142 oils 2,113 2,344
729 735 783 Fuel oil 757 854
712 654 700 Other products 669 715
_________ _________ _________ _______ _________
See Total oil See
6,521 6,426 6,625 (1) products (1) * 6,491 7,180 (1)
2,442 2,513 2,864 Crude oil (1) 2,482 4,130
_________ _________ _________ _______ _________
See Total oil See
8,963 8,939 9,489 (1) sales (1) 8,973 11,310 (1)
_________ _________ _________ _______ _________
*comprising
1,948 1,948 2,094 Europe 1,973 2,086
Other Eastern
1,215 1,229 1,236 Hemisphere 1,220 1,236
1,506 1,502 1,558 USA 1,495 2,168
Other Western
658 652 722 Hemisphere 658 706
1,194 1,095 1,015 Export sales 1,145 984
CHEMICAL SALES
VOLUMES BY
MAIN PRODUCT
thousand tones CATEGORY (2) ** thousand tonnes
3,430 3,504 3,324 Base chemicals 10,648 10,255
First line
2,200 2,361 2,238 derivatives 6,776 6,737
6 5 27 Other 23 105
_________ _________ _________ _______ _________
5,636 5,870 5,589 +1 17,447 17,097 +2
_________ _________ _________ _______ _________
**comprising
2,232 2,433 2,495 Europe 7,128 7,512
Other Eastern
1,385 1,370 1,305 Hemisphere 4,199 3,890
1,851 1,908 1,630 USA 5,639 5,200
Other Western
168 159 159 Hemisphere 481 495
1. Certain contracts are held for trading purposes and reported net
rather than gross with effect from Q3 2005. The effect in Q1 2006 is
a reduction in Total Oil products sales of approximately 890
thousand b/d and a reduction in crude oil sales of approximately
1,720 thousand b/d, in Q2 2006 840 thousand b/d and 1,940 thousand
b/d respectively and in Q3 2006 870 thousand b/d and 2,130 thousand
b/d respectively.
2. Excluding volumes sold by equity accounted investments, chemical
feedstock trading and by-products.
Capital investment
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
Capital
expenditure:
Exploration
&
Production:
World
3,425 5,095 2,276 outside USA 11,020 6,362
519 481 318 USA 1,312 775
___________ ___________ ___________ ___________ _________
3,944 5,576 2,594 12,332 7,137
___________ ___________ ___________ ___________ _________
Gas & Power:
World
599 252 334 outside USA 1,243 1,124
2 1 0 USA 4 2
___________ ___________ ___________ ___________ _________
601 253 334 1,247 1,126
___________ ___________ ___________ ___________ _________
Oil
Products:
Refining:
World
251 373 290 outside USA 866 748
75 57 56 USA 193 153
___________ ___________ ___________ ___________ _________
326 430 346 1,059 901
___________ ___________ ___________ ___________ _________
Marketing:
World
569 314 317 outside USA 1,072 700
36 26 34 USA 80 100
___________ ___________ ___________ ___________ _________
605 340 351 1,152 800
___________ ___________ ___________ ___________ _________
Chemicals:
World
166 63 52 outside USA 265 122
53 47 46 USA 150 173
___________ ___________ ___________ ___________ _________
219 110 98 415 295
___________ ___________ ___________ ___________ _________
Other
1 6 64 segments 28 198
___________ ___________ ___________ ___________ _________
TOTAL
CAPITAL
5,696 6,715 3,787 EXPENDITURE 16,233 10,457
___________ ___________ ___________ ___________ _________
Exploration
expense:
World
161 139 127 outside USA 414 340
67 64 56 USA 194 117
___________ ___________ ___________ ___________ _________
228 203 183 608 457
___________ ___________ ___________ ___________ _________
New equity in equity
accounted investments
World
112 135 85 outside USA 311 278
3 4 12 USA 12 15
___________ ___________ ___________ ___________ _________
115 139 97 323 293
___________ ___________ ___________ ___________ _________
New loans to
equity
accounted
11 38 38 investments 211 273
___________ ___________ ___________ ___________ _________
TOTAL
CAPITAL
6,050 7,095 4,105 INVESTMENT* 17,375 11,480
___________ ___________ ___________ ___________ _________
*comprising
Exploration
4,214 5,823 2,839 & Production 13,204 7,902
645 332 342 Gas & Power 1,373 1,145
962 799 707 Oil Products 2,279 1,717
219 118 152 Chemicals 465 481
Other
10 23 65 segments 54 235
___________ ___________ ___________ ___________ _________
6,050 7,095 4,105 17,375 11,480
___________ ___________ ___________ ___________ _________
Notes
NOTE 1. Accounting policies and basis of presentation
The quarterly financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the financial statements are also in accordance with IFRS as adopted by the European Union.
The Group’s accounting policies are unchanged from those set out in Note 3 to the Consolidated Financial Statements of Royal Dutch Shell plc in the Annual Report and Form 20-F for the year ended December 31, 2005 on pages 110 to 113.
In the third quarter 2005 Royal Dutch Shell plc became the Parent Company of Royal Dutch Petroleum Company (Royal Dutch) and The ”Shell” Transport and Trading Company, p.l.c. (Shell Transport) by acquiring all outstanding shares of Shell Transport and approximately 98.5% of the outstanding shares of Royal Dutch.
The comparative periods represent information for Royal Dutch Shell as if it had acquired 100% of Royal Dutch and Shell Transport. For financial reporting purposes, the 1.5% minority holders in Royal Dutch were shown in the Royal Dutch Shell consolidated financial statements as a minority interest in Royal Dutch Shell from August 10, 2005, as prior to that time those holders had a right to participate in the Exchange Offer and receive Royal Dutch Shell shares.
The minority in Royal Dutch ceased to exist as of December 21, 2005 as a result of the merger of Royal Dutch and Shell Petroleum NV.
These financial statements give retroactive effect for all periods presented prior to the Unification Transaction, which has been accounted for using a carry-over basis of the historical costs of the assets and liabilities of Royal Dutch, Shell Transport and other companies comprising the Royal Dutch/Shell Group of Companies. The interest of the minority shareholders in Royal Dutch was accounted for using a carry-over basis of the historical costs of its consolidated assets and liabilities.
Royal Dutch Shell will discontinue the publication of the Annual Report and Form 20-F in Dutch. This document will now only be published in English. The Annual Review and Summary Financial Statements, a summary of the Annual Report and Form 20-F, will continue to be published in both English and Dutch.
NOTE 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 provide 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 use 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 draw down effects. The adjustment for the Chemicals segment was implemented in Q1 2006, historic periods have been restated accordingly.
NOTE 3. Discontinued operations
Income/(loss) from discontinued operations, which comprises gains and losses on disposals and results of operations for the period, is provided in the statement of income in accordance with IFRS for separate major lines of business or geographical area of operations.
Earnings by industry segment relating to discontinued operations, included within the segment earnings on page 13, are as follows:
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
– – (93) Chemicals segment earnings – (307)
– – (93) Income/(loss) from discontinued – (307)
operations
Basic earnings per share for the third quarter 2006 for discontinued operations were nil.
NOTE 4. Return on average capital employed (ROACE)
ROACE on an income basis is the sum of the current and previous three quarters’ income attributable to shareholders plus interest, less tax and minority interest as a percentage of the average of Royal Dutch Shell’s share of closing capital employed and the opening capital employed a year earlier. The tax rate and the minority interest components are derived from calculations at the published segment level.
Components of the calculation ($ million):
Q3 2006 Q3 2005
Income attributable to shareholders (four quarters) 24,527 25,520
Royal Dutch Shell share of interest expense after tax 627 688
ROACE numerator 25,154 26,208
Royal Dutch Shell share of capital employed – opening 105,779 93,660
Royal Dutch Shell share of capital employed – closing 114,556 105,779
Royal Dutch Shell share of capital employed – average 110,168 99,720
ROACE 22.8% 26.3%
NOTE 5. Earnings by industry segment
Operating segment results are 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 results of the Corporate segment. Operating segment results are after tax and include equity accounted investments. Segment results in accordance with International Accounting Standard 14 “Segment Reporting” will be disclosed in Royal Dutch Shell’s 2006 Annual Report and Form 20-F, with a reconciliation to the basis as presented here.
NOTE 6. Gearing
The Group aims to maintain an efficient balance sheet with an average gearing ratio over time of between 20% and 25%. The numerator and denominator in the gearing calculation used by the Group is calculated by adding to reported debt and equity certain off-balance sheet obligations such as operating lease commitments and unfunded retirement benefits which it believes to be in the nature of incremental debt, and deducting cash and cash equivalents held in excess of amounts required for operational purposes.
Components of the calculation ($ million):
30 Sep 30 Sep
2006 2005
Non current debt 7,665 7,795
Current debt 6,395 6,714
___________ ___________
Total Debt 14,060 14,509
Add: Net present value of operating lease 9,442 6,283
obligations (as per year end 2005)
Unfunded pension benefit obligations (as per year 2,919 4,045
end 2005)
Less: Cash and cash equivalents in excess of 9,340 14,098
operational requirements
___________ ___________
Adjusted Debt 17,081 10,739
___________ ___________
Total Equity 110,291 99,805
___________ ___________
Total Capital 127,372 110,544
___________ ___________
Gearing ratio (adjusted debt as a percentage of 13.4% 9.7%
total capital)
NOTE 7. Equity
Total equity comprises equity attributable to shareholders of Royal Dutch Shell and to the minority interests. Other reserves comprises the capital redemption reserve, share premium reserve, merger reserve, share-based compensation reserve, cumulative currency translation differences, unrealised gains/(losses) on securities and unrealised gains/(losses) on cash flow hedges.
$ million Ordinary Treasury Other Retained Total Minority Total
share shares reserves earnings interests equity
capital
At January 1, 571 (3,809) 3,584 90,578 90,924 7,000 97,924
2006
Income for the 20,159 20,159 639 20,798
period
Income/(expense) 2,528 2,528 73 2,601
recognised
directly in
equity
Capital – 1,233 1,233
contributions
from minority
shareholders
Dividends paid (6,012) (6,012) (258) (6,270)
Treasury shares: 375 375 375
net
sales/(purchases)
and dividends
received
Effect of 154 154 154
Unification
Shares (22) 22 (6,811) (6,811) (6,811)
repurchased for
cancellation
Share-based 287 287 287
compensation
At September 30, 549 (3,434) 6,575 97,914 101,604 8,687 110,291
2006
$ million Ordinary Treasury Other Retained Total Minority Total
share shares reserves earnings interests equity
capital
At January 1, 584 (4,187) 9,688 80,781 86,866 5,313 92,179
2005
Income for the 20,943 20,943 715 21,658
period
Income/(expense) (4,039) 4 (4,035) 92 (3,943)
recognised
directly in
equity
Capital – 732 732
contributions
from minority
shareholders
Dividends paid (8,687) (8,687) (235) (8,922)
Effects of (835) (835) 835 –
Unification
Treasury shares: 415 415 415
net
sales/(purchases)
and dividends
received
Shares (6) 5 (2,437) (2,438) (2,438)
repurchased for
cancellation
Share-based 124 124 124
compensation
At September 30, 578 (3,772) 5,778 89,769 92,353 7,452 99,805
2005
NOTE 8. Statement of cash flows
This statement reflects cash flows of Royal Dutch Shell and its subsidiaries as measured in their own currencies, which are translated into US dollars at average rates of exchange for the periods and therefore exclude currency translation differences except for those arising on cash and cash equivalents.
Cash from operating activities excluding net working capital movements, current taxation and taxation paid is calculated using the following line items from the cash flow statement:
QUARTERS $ million NINE MONTHS
Q3 Q2 Q3
2006 2006 2005 2006 2005
Cash flow from
operating
10,079 7,834 6,646 activities 25,737 21,648
4,403 4,763 5,548 Current taxation 14,181 14,945
Decrease/(increase)
in net working
560 (3,276) (5,490) capital (4,695) (8,959)
(4,489) (5,544) (3,891) Taxation paid (14,428) (12,579)
_______ ___________ ___________ _______ ___________
9,605 11,891 10,479 30,679 28,241
_______ ___________ ___________ _______ ___________
NOTE 9. Earnings per Royal Dutch Shell share
The total number of Royal Dutch Shell shares in issue at the end of the period was 6,497.2 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) 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):
Nine Nine
Q3 Q2 Q3 Months Months
2006 2006 2005 2006 2005
Royal Dutch Shell shares of
EUR 0.07 6,373.9 6,457.6 6,676.5 6,446.6 6,711.4
Diluted earnings per share calculations are based on the following weighted average number of shares (millions). This adjusts the basic number of shares for all share options currently in-the-money.
Nine Nine
Q3 Q2 Q3 Months Months
2006 2006 2005 2006 2005
Royal Dutch Shell shares of
EUR 0.07 6,399.8 6,483.1 6,703.5 6,470.9 6,732.5
Basic shares at the end of the following periods are (millions):
Q3 Q2 Q3
2006 2006 2005
Royal Dutch Shell shares of EUR 0.07 6,336.3 6,414.0 6,608.2
One American Depository Receipt (ADR) is equal to two Royal Dutch Shell shares.
NOTE 10. Contingencies and litigation
The litigation relating to the 2004 recategorisation of certain hydrocarbon reserves is still at an early stage and subject to substantial uncertainties concerning the outcome of material factual and legal issues. Potential damages, if any, in a fully litigated securities class action would depend on the losses caused by the alleged wrongful conduct that would be demonstrated by individual class members in their purchases and sales of Royal Dutch and Shell Transport shares during the relevant class period. Based on the current status of the litigation, however, management of the Shell Group established a $500 million provision in the second quarter 2006. This amount reflects what Shell is prepared to pay to the plaintiffs to resolve this litigation. No settlement has been reached in the matter. Management of the Shell Group will review this determination as the litigation progresses.
A report by Royal Dutch Shell plc (‘Royal Dutch Shell’). The information in these quarterly results reflects the consolidated financial position and results of Royal Dutch Shell. All amounts shown throughout this report are unaudited.
*Comment added by ShellNews.net
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.