Royal Dutch Shell plc Financial and Operational Information

Transcription

1 PUBLICATION REQUESTS Royal Dutch Shell plc c/o Bankside Tel: +44 (0) PUBLICATIONS Annual Report and Form 20-F for the year ended December 31, 2005 A comprehensive overview of the Group. Available at Annual Review and Summary Financial Statements 2005 A summarised overview of the Group and the operational and financial performance of the business. Available at The above documents are available in both English and Dutch from the address listed on the left. De bovenstaande documenten zijn zowel in het Engels als in het Nederlands verkrijgbaar bij het links vermelde adres. Shell General Business Principles Fundamental principles that govern how each Shell company conducts its affairs. Available at Financial and Operational Information Five years financial and operational information about the Group, including maps of exploration and production activities. Available at More information about the Group is available at Royal Dutch Shell plc Financial and Operational Information Royal Dutch Shell plc Financial and Operational Information The Shell Sustainability Report 2005 Report on progress in contributing to sustainable development. Available at

2 2005 Results: Revenue $306.7 billion Income for the period $26.3 billion Cash flow from operating activities $30.1 billion Earnings per share $ Total assets less total liabilities Dividends paid to shareholders , , , ,391 Earnings per share $ Net assets before minority interest Dividends paid to shareholders , , , , , ,188 Throughout this booklet, a billion = 1,000 million. About this booklet The Financial and Operational Information booklet 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. Forwardlooking 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 booklet, 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 booklet 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 booklet. 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 booklet. Please refer to the Annual Report on Form 20-F for the year ended December 31, 2005 for a description of certain important factors, risks and uncertainties that may affect the businesses of the Shell Group. This booklet has not been subject to audit. Cautionary Note to US Investors 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. Investors are urged to consider closely the disclosure in our Annual Report on Form 20-F for the year ended December 31, 2005, File No and disclosure in our Forms 6-K file No , available on the SEC s website You can also obtain these forms from the SEC by calling SEC-0330.

3 OUR STRATEGY OF MORE UPSTREAM AND PROFITABLE DOWNSTREAM AIMS TO REINFORCE OUR POSITION AS A LEADER IN THE INDUSTRY, WHICH AIMS TO PROVIDE INVESTORS WITH A COMPETITIVE AND SUSTAINED TOTAL SHAREHOLDER RETURN. THE OBJECTIVES OF THE SHELL GROUP ARE TO ENGAGE EFFICIENTLY, RESPONSIBLY AND PROFITABLY IN OIL, OIL PRODUCTS, GAS, CHEMICALS AND OTHER SELECTED BUSINESSES. THE COMPANY PARTICIPATES IN THE SEARCH FOR AND DEVELOPMENT OF OTHER SOURCES OF ENERGY TO MEET EVOLVING CUSTOMER NEEDS AND THE WORLD S GROWING DEMAND FOR ENERGY. WE BELIEVE THAT OIL AND GAS WILL BE INTEGRAL TO THE GLOBAL ENERGY NEEDS FOR ECONOMIC DEVELOPMENT FOR MANY DECADES TO COME. OUR ROLE IS TO ENSURE THAT WE EXTRACT AND DELIVER THESE PROFITABLY, USING ENVIRONMENTALLY AND SOCIALLY RESPONSIBLE MEANS. THIS BOOKLET SUPPLEMENTS THE ROYAL DUTCH SHELL PLC ANNUAL REPORT AND FORM 20-F FOR THE YEAR ENDED DECEMBER 31, 2005, WHICH CONTAIN FINANCIAL STATEMENTS AND INFORMATION ON THE SHELL GROUP, INCLUDING DETAILS OF THE ACCOUNTING POLICIES EMPLOYED. REFERENCE TO THIS ANNUAL REPORT WILL ASSIST THE UNDERSTANDING OF THE INFORMATION IN THIS BOOKLET. 01 Nature of Group Financial Statements and operational data 02 Royal Dutch Shell shares 03 Royal Dutch Shell dividends 04 Financial Statements 04 Consolidated Statement of Income and earnings per share 06 Consolidated Balance Sheet 08 Consolidated Statement of Cash Flows 10 Earnings by industry segment, Quarterly earnings by industry segment 12 Financial ratios, dollar exchange rates 13 Capital investment 14 Fixed assets 15 Depreciation, depletion and amortisation 16 Capital employed, Taxation 17 Employee data 18 Exploration & Production 46 Gas & Power 49 Oil Products 50 Refining 52 Oil sales 53 Shipping 54 Chemicals 57 Other industry segments, Research 58 Financial calendar

4 NATURE OF GROUP FINANCIAL STATEMENTS AND OPERATIONAL DATA In 2005, as a result of the Unification Transaction, Royal Dutch Shell became the single 100% parent company of Royal Dutch Petroleum Company ( Royal Dutch ) and of Shell Transport and Trading Company Limited (previously known as The Shell Transport and Trading Company, p.l.c.) ( Shell Transport ) the two former public parent companies of the Group. The Unification Transaction did not result in the formation of a new reporting entity. Immediately after the Unification Transaction each former Royal Dutch and Shell Transport shareholder who participated in the Unification Transaction held the same economic interest in Royal Dutch Shell as the shareholder held in the Group immediately prior to implementation of the Unification Transaction. Accordingly, the Unification Transaction has been accounted for using the carry-over basis of the historical costs of the assets and liabilities of Royal Dutch, Shell Transport and the other companies comprising the Group. In this booklet Group is defined as Royal Dutch Shell together with all of its consolidated subsidiaries. The expression 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 booklet 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 booklet, associates and jointly controlled entities are also referred to as equity accounted investments. Except as otherwise specified, the figures shown in the tables in this booklet represent those in respect of Group companies only, without deduction of minority interests. However, where figures are given specifically for oil production (net of royalties in kind), natural gas production available for sale, and both the refinery processing intake and total oil product sales volumes, the term Group share is used for convenience to indicate not only the volumes to which Group companies are entitled (without deduction in respect of minority interests in Group companies) but also the portion of the volumes of associated companies and jointly controlled entities to which Group companies are entitled or which is proportionate to the Group interest in those companies. Financial Statements The Consolidated Financial Statements include the accounts of Royal Dutch Shell and of those companies in which it, either directly or indirectly, has control either through a majority of the voting rights or the right to exercise a controlling influence or to obtain the majority of the benefits and be exposed to the majority of the risks. Investments in companies over which Shell Group companies have significant influence but not control are classified as associated companies and are accounted for on the equity basis. Interests in jointly controlled entities are also recognised on the equity basis. Interests in jointly controlled assets are recognised by including the Shell Group share of assets, liabilities, income and expenses on a line-by-line basis. The Consolidated Financial Statements have been prepared using the carryover basis to account for the Unification and on the basis that the resulting structure was in place throughout the periods presented. The 2005 and 2004 Financial Statements contained in this booklet have been prepared in accordance with applicable laws in England and Wales and with International Financial Reporting Standards ( ) as adopted by the European Union. As applied to Royal Dutch Shell, there are no material differences with as issued by the International Accounting Standards Board. The 2003, 2002 and 2001 Financial Statements contained in this booklet have been prepared in accordance with US Generally Accepted Accounting Principles (), applied by the Group prior to its transition date to. The key accounting and presentation differences between and US GAAP for the Shell Group relate to retirement benefits, discontinued operations, incorporated joint ventures, Group share of profit of equity accounted investments, cumulative currency translation differences, sharebased compensation, major inspection costs, unquoted equity securities, impairments and reversal of impairments. Tables and disclosure that provide data over a five-year period show 2005 and 2004 on an basis and 2003, 2002 and 2001 on a basis. Except as otherwise noted, the figures shown in this booklet are in US dollars. As used herein all references to dollars or $ are to the US currency. Segment reporting Internal segment reporting is on a global basis. For the main segments an analysis of certain data is provided in this booklet between the USA and the world outside the USA. Operational data The operational data represent the totals reported by the Group companies, reflecting their dealings with third parties and with equity accounted investments. Certain data also include the Group share of equity accounted investments and this is indicated on the pages concerned. Currency translation Assets and liabilities of non-us dollar Group companies are translated to US dollars at year-end rates of exchange, whilst their statements of income and cash flows are translated at quarterly average rates. Translation differences arising on consolidation are taken directly to a currency translation differences account within equity. Upon divestment or liquidation of an entity, cumulative currency translation differences related to that entity are taken to income. Maps The maps on pages 20 to 30 are intended only to give an impression of the magnitude of the Group s Exploration & Production activities in certain parts of the world. They must not be considered authoritative, particularly in respect of delimitation of national, concession or other boundaries, nor in respect of the representation of pipeline routes and landfalls, field sizes or positions. The maps mainly describe the situation as at December 31,

5 ROYAL DUTCH SHELL SHARES Royal Dutch Shell listing information Class A Shares Class B Shares Ticker Symbol London RDSA RDSB Ticker Symbol Amsterdam RDSA RDSB Ticker Symbol New York (ADR*) RDS.A RDS.B ISIN Code GB00B03MLX29 GB00B03MM408 CUSIP G7690A100 G7690A118 SEDOL Number London B03MLX2 B03MM40 SEDOL Number Euronext B09CBL4 B09CBN6 Weighted on FTSE as at 30/9/ % 3.911% Weighted on AEX as at 30/9/ % not included * One ADR is equal to two underlying shares Share prices RDSA and Royal Dutch ordinary shares Amsterdam a RDSA Royal Dutch ordinary shares 2005 b 2005 b (Jul 20 to (Jan 1 to Dec 31) Sep 30) High Low Year end RDSA London Pence (July 20 to December 31) High 1,894 Low 1,633 Year end 1,771 Class A ADRs and Royal Dutch New York Shares New York c $ Class A ADRs Royal Dutch New York Shares 2005 d 2005 d (Jul 20 to (Jan 1 to Dec 31) Oct 3) High Low Year end RDSB Amsterdam (July 20 to December 31) High Low Year end RDSB and Shell Transport Ordinary Shares London e RDSB Shell Transport Ordinary Shares Pence 2005 d 2005 d (Jul 20 to (Jan 1 to Dec 31) Jul 19) High 1,968 1,991 1,570 1,531 1,888 2,255 Low 1,717 1,528 1,205 1,154 1,256 1,403 Year end 1,858 1,838 1,545 1,446 1,423 1,643 Class B ADRs and Shell Transport ADRs New York f $ Class B ADRs Shell Transport ADRs 2005 f 2005 f (Jul 20 to (Jan 1 to Dec 31) Jul 19) High Low Year end Shares outstanding Weighted average At year end number of shares excluding shares excluding shares At year end held by the Group held by the Group A shares ,935,625,000 3,817,240,213 3,965,748, ,148,800,000 4,039,611,920 4,046,424, ,167,000,000 4,066,439,836 4,073,375, ,198,570,000 4,120,339,614 4,115,315, ,253,295,600 4,199,947,066 4,191,462,522 B shares ,759,360,000 2,707,858,347 2,708,431, ,765,552,027 2,712,563,580 2,724,034, ,777,792,416 2,735,191,315 2,737,938, ,777,792,416 2,745,748,422 2,760,872, ,801,102,311 2,777,853,725 2,803,961,113 Total shares ,694,985,000 6,525,098,560 6,674,179, ,914,352,027 6,752,175,500 6,770,458, ,944,792,416 6,801,631,151 6,811,314, ,976,362,416 6,866,088,036 6,876,188, ,054,397,911 6,977,800,791 6,995,423,635 a Pursuant to the terms of the Unification Transaction, holders of Royal Dutch ordinary shares received two Royal Dutch Shell plc Class A ordinary shares for each Royal Dutch ordinary share. To assist comparison, the historical prices of the Royal Dutch ordinary shares have been divided by 2 to reflect such exchange ratio. b Royal Dutch ordinary shares continued to trade on Euronext Amsterdam following the completion of the Unification Transaction until such shares were delisted on September 30, c Pursuant to the terms of the Unification Transaction, holders of Royal Dutch New York Shares received one Royal Dutch Shell plc Class A ADR for each Royal Dutch New York Shares. Each Royal Dutch Shell plc Class A ADR represents two Royal Dutch Shell plc Class A ordinary shares. d The New York Stock Exchange halted trading in the Royal Dutch New York Shares on October 3, 2005, following delisting in Amsterdam, and resumed trading in the Royal Dutch New York Shares on October 31, 2005, following the joint public announcement by Royal Dutch Shell and Royal Dutch of the definitive terms of the Restructuring, in which all outstanding Royal Dutch shares were exchanged for (or the equivalent in loan notes). The above table excludes trading in Royal Dutch New York Shares for the period from October 3 through their delisting on November 21, e Pursuant to the terms of the Unification Transaction, holders of Shell Transport Ordinary Shares (including Shell Transport Ordinary Shares to which holders of Shell Transport bearer warrants were entitled) received Royal Dutch Shell plc Class B ordinary shares for each Shell Transport Ordinary Share. To assist comparison, the historical prices of the Shell Transport Ordinary Shares have been divided by to reflect such exchange ratio. f Pursuant to the terms of the Unification Transaction, holders of Shell Transport ADRs received Royal Dutch Shell plc Class B ADRs for each Shell Transport ADR. To assist comparison, the historical prices of the Shell Transport ADRs have been divided by to reflect such exchange ratio. Each Royal Dutch Shell plc Class B ADR represents two Royal Dutch Shell plc Class B ordinary shares. 2 Royal Dutch Shell plc

6 ROYAL DUTCH SHELL DIVIDENDS Dividends In setting the level of dividends, the Royal Dutch Shell Board intends to pay quarterly dividends and provide per share increases in dividends at least in line with European inflation over time. Royal Dutch Shell has two classes of shares Class A ordinary shares and Class B ordinary shares. The Class A ordinary shares and Class B ordinary shares have identical rights except in relation to the dividend source. The Company will declare its dividends in euro. Dividends declared on Class A ordinary shares will be paid in euro, although holders of Class A ordinary shares will be able to elect to receive dividends in sterling. Dividends declared on Class B ordinary shares will be paid in sterling, although holders of Class B ordinary shares will be able to elect to receive payment in euro. Holders of ADRs will receive payment in dollars. Eligible shareholders must make currency elections the day before the declaration date. Dividends Class A shares Q1 0.23* Q Q Q Interim 0.38* 0.37* 0.36* 0.35* Final/second interim 0.52* 0.51* 0.50* 0.48* Total Amount paid during the year Class A ADRs $ Q1 0.59* Q Q Q Interim 0.90* 0.85* 0.70* 0.61* Final/second interim 1.33* 1.21* 1.10* 0.88* Total Amount paid during the year * Historical data for Royal Dutch New York Shares converted to Royal Dutch Shell equivalents. Class B ADRs $ Q1 0.57* Q Q Q Interim 0.78* 0.67* 0.64* 0.59* Final/second interim 1.43* 1.21* 1.04* 0.90* Total Amount paid during the year * Historical data for Shell Transport ADRs converted to Royal Dutch Shell equivalents. * Historical data for Royal Dutch shares converted to Royal Dutch Shell equivalents. Class B shares pence Q * Q Q Q Interim 21.75* 21.23* 20.71* 20.36* Final/second interim 37.24* 33.58* 32.37* 31.15* Total Amount paid during the year * Historical data for Shell Transport shares converted to Royal Dutch Shell equivalents. 3

7 FINANCIAL STATEMENTS Consolidated Statement of Income Revenue Exploration & Production 23,970 18,400 Gas & Power 13,766 9,625 Oil Products 237, ,424 Chemicals 31,018 26,877 Other industry segments and Corporate 767 1,060 Revenue a 306, ,386 Cost of sales 252, ,259 Gross profit 54,109 43,127 Selling, distribution and administrative expenses 15,482 15,098 Exploration 1,286 1,809 Share of profit of equity accounted investments 7,123 5,015 Interest and other income 1,171 1,483 Interest expense 1,068 1,059 Income before taxation 44,567 31,659 Taxation 17,999 12,168 Income from continuing operations 26,568 19,491 Income/(loss) from discontinued operations (307) (234) Income for the period 26,261 19,257 Income attributable to minority interest Income attributable to shareholders of Royal Dutch Shell plc 25,311 18,540 Research and development expenditure included in cost of sales Depreciation, depletion and amortisation are included within the following expense headings as follows: Cost of sales 10,384 10,569 Selling, distribution and administrative expenses 1,472 1,593 Exploration a Revenue is stated after deducting sales taxes, excise duties and similar levies of $72,277 million in 2005 and $72,370 million in ,981 12,845 Earnings per share Basic earnings per 0.07 ordinary share a b Continuing operations Discontinued operations (0.05) (0.03) Diluted earnings per 0.07 ordinary share a b Continuing operations Discontinued operations (0.05) (0.03) a Earnings per Royal Dutch Shell Class A ordinary and Class B ordinary shares are identical. The historical earnings per share following the Unification have been accounted for on a carry-over basis using the aggregate weighted average outstanding shares of the constituent businesses adjusted to the equivalent shares of Royal Dutch Shell for all periods presented. b The basic earnings per share amounts shown relate to income attributable to shareholders of Royal Dutch Shell. The 2005 calculation uses a weighted-average number of shares of 6,674,179,767 (2004: 6,770,458,950. The basic earnings per share number has been restated to exclude shares held by Share-Ownership Trusts for share-based compensation plans. For the purpose of the calculation, shares repurchased under the buyback programme are deemed to have been cancelled on purchase date. The diluted earnings per share are based on the same income figures. For this calculation, the following weighted-average number of shares are used. 2005: 6,694,427,705; 2004: 6,776,396,429. The difference between the basic and diluted number of shares relates to share-based compensation plans as mentioned above. 4 Royal Dutch Shell plc

8 Consolidated Statement of Income Revenue Exploration & Production 12,224 11,640 11,808 Gas & Power 7,377 4,254 5,947 Oil Products 159, ,681 90,862 Chemicals 18,843 14,125 13,260 Other industry segments and Corporate Revenue a 198, , ,453 Cost of sales 165, ,658 96,091 Gross profit 33,215 27,795 26,362 Selling, distribution and administrative expenses 13,296 11,215 8,846 Exploration 1,475 1, Research and development Operating profit of Shell Group companies 17,860 15,056 16,286 Share of operating profit of associated companies 3,446 2,792 2,615 Operating profit 21,306 17,848 18,901 Interest and other income 1, ,096 Interest expense 1,324 1,291 1,023 Currency exchange gains/(losses) (231) (25) (31) Income before taxation 21,747 17,314 18,943 Taxation 9,352 7,655 8,299 Income after taxation 12,395 9,659 10,644 Income applicable to minority interests Income from continuing operations 12,042 9,484 10,284 Income from discontinued operations, net of tax Cumulative effect of a change in accounting principle, net of tax 255 Income attributable to shareholders of Royal Dutch Shell plc 12,322 9,671 10,321 Depreciation, depletion and amortisation are included within the following expense headings as follows: Cost of sales 9,863 7,469 5,165 Selling, distribution and administrative expenses 1,409 1,157 1,060 Exploration Research and development a Revenue is stated after deducting sales taxes, excise duties and similar levies of $65,527 million in 2003, $54,834 million in 2002 and $40,908 million in ,711 8,739 6,295 Earnings per share Basic earnings per 0.07 ordinary share a b Continuing operations Discontinued operations 0.03 Cumulative effect of a change in accounting principle, net of tax 0.04 Diluted earnings per 0.07 ordinary share a b Continuing operations Discontinued operations 0.03 Cumulative effect of a change in accounting principle, net of tax 0.04 a Earnings per Royal Dutch Shell Class A ordinary and Class B ordinary shares are identical. The historical earnings per share following the Unification have been accounted for on a carry-over basis using the aggregate weighted average outstanding shares of the constituent businesses adjusted to the equivalent shares of Royal Dutch Shell for all periods presented. b The basic earnings per share amounts shown relate to income attributable to shareholders of Royal Dutch Shell. The 2003 calculation uses a weighted-average number of shares of 6,811,314,175; (2002: 6,876,188,213; 2001: 7,100,044,876). The basic earnings per share number has been restated to exclude shares held by Share-Ownership Trusts for share-based compensation plans. For the purpose of the calculation, shares repurchased under the buyback programme are deemed to have been cancelled on purchase date. The diluted earnings per share are based on the same income figures. For this calculation, the following weighted-average number of shares are used. 2003: 6,813,444,740; 2002: 6,878,412,716; 2001: 7,105,915,746. The difference between the basic and diluted number of shares relates to share-based compensation plans as mentioned above. Financial Statements 5

9 FINANCIAL STATEMENTS Consolidated Balance Sheet Assets Non-current assets Intangible assets 4,350 4,528 Property, plant and equipment 87,558 87,918 Exploration & Production 51,275 50,889 Gas & Power 7,256 6,251 Oil Products 22,263 23,622 Chemicals 5,945 6,348 Other industry segments and Corporate Investments: equity accounted investments 16,905 19,190 financial assets 3,672 2,700 Deferred tax 2,562 2,789 Prepaid pension costs 2,486 2,479 Other 4,091 5, , ,397 Current assets Inventories 19,776 15,375 Accounts receivable 66,386 37,473 Cash and cash equivalents 11,730 9,201 97,892 62,049 Total assets 219, ,446 Liabilities Non-current liabilities Debt 7,578 8,858 Deferred tax 10,763 12,930 Retirement benefit obligations 5,807 6,795 Other provisions 7,385 6,828 Other 5,095 5,800 36,628 41,211 Current liabilities Debt 5,338 5,734 Accounts payable and accrued liabilities 69,013 37,909 Taxes payable 8,782 9,058 Retirement benefit obligations Other provisions 1,549 1,812 84,964 54,852 Total liabilities 121,592 96,063 Equity Ordinary share capital Preference share capital 20 Treasury shares (3,809) (4,187) Other reserves 3,584 8,865 Retained earnings 90,578 80,788 Equity attributable to shareholders of Royal Dutch Shell plc 90,924 86,070 Minority interest 7,000 5,313 Total equity 97,924 91,383 Total liabilities and equity 219, ,446 Capital employed a 110, ,975 a Capital employed is Group total assets minus total liabilities before deduction of minority interests, plus short-term and long-term debt. 6 Royal Dutch Shell plc

10 Consolidated Balance Sheet Fixed assets Intangible assets 4,735 4, Property, plant and equipment 87,088 78,363 50,721 Exploration & Production 49,273 46,257 29,546 Gas & Power 5,949 2,079 1,596 Oil Products 24,773 23,763 14,129 Chemicals 6,177 5,299 4,718 Other industry segments and Corporate Investments: equity accounted investments 19,371 17,945 18,331 securities 2,317 1,719 1,914 other 1,086 1,420 1,108 Total fixed assets 114, ,143 73,013 Other long-term assets 11,349 7,333 7,716 Current assets Inventories 12,690 11,338 6,580 Accounts receivable 29,013 28,797 17,487 Cash and cash equivalents 2,117 1,709 7,254 Total current assets 43,820 41,844 31,321 Current liabilities: amounts due within one year Short-term debt 10,569 12,265 3,988 Accounts payable and accrued liabilities 32,383 32,221 18,909 Taxes payable 5,927 4,985 4,494 Total current liabilities 48,879 49,471 27,391 Net current assets/(liabilities) (5,059) (7,627) 3,930 Total assets less current liabilities 120, ,849 84,659 Long-term liabilities: Long-term debt 9,100 6,817 1,832 Other 6,054 6,174 4,515 15,154 12,991 6,347 Provisions Deferred taxation 15,185 12,551 7,078 Pensions and similar obligations 4,927 5,016 2,331 Decommissioning and restoration costs 3,955 3,528 2,615 24,067 21,095 12,024 Group net assets before minority interest 81,666 69,763 66,288 Minority interest (3,415) (3,568) (3,466) Net assets 78,251 66,195 62,822 Shareholders equity Equity share capital Preference shares Additional paid in capital 5,372 5,375 5,385 Treasury shares (3,428) (2,797) (1,933) Other comprehensive income (78) (6,971) (8,404) Retained earnings 75,778 69,978 67,178 78,251 66,195 62,822 Capital employed a 101,335 88,845 72,108 Financial Statements 7

11 FINANCIAL STATEMENTS Consolidated Statement of Cash Flows a Cash flow from operating activities: Income for the period 26,261 19,257 Adjustment for: Current taxation 19,435 13,081 Interest (income)/expense Depreciation, depletion and amortisation 11,981 12,845 (Profit)/loss on sale of assets (1,313) (3,087) Decrease/(increase) in net working capital (5,664) (4,062) Share of profit of equity accounted investments (7,123) (5,015) Dividends received from equity accounted investments 6,709 4,190 Deferred taxation and other provisions (1,515) (1,007) Other (47) 292 Cash flow from operating activities (pre-tax) 49,356 37,297 Taxation paid (19,243) (10,760) Cash flow from operating activities 30,113 26,537 Cash flow from investing activities: Capital expenditure (15,904) (13,566) Investments in equity accounted investments (705) (1,058) Proceeds from sale of assets 2,310 5,142 Proceeds from sale of equity accounted investments 4,313 1,316 Proceeds from sale of/additions to financial assets 362 1,739 Interest received Cash flow from investing activities (8,761) (5,964) Cash flow from financing activities: Net increase/(decrease) in debt with maturity period within three months (956) 8 Other debt: New borrowings 2,057 2,044 Repayments (2,656) (6,380) Interest paid (1,124) (962) Change in minority interest 1, Net issue/(repurchase) of shares (4,988) (698) Dividends paid to: Shareholders of Royal Dutch Shell plc (10,556) (7,391) Minority interest (293) (264) Payments to former Royal Dutch shareholders (1,651) Treasury shares: net sales/(purchases) and dividends received 451 (761) Cash flow from financing activities (18,573) (13,592) Currency translation differences relating to cash and cash equivalents (250) 113 Increase/(decrease) in cash and cash equivalents 2,529 7,094 Cash and cash equivalents at January 1 9,201 2,107 Cash and cash equivalents at December 31 11,730 9,201 a This statement reflects cash flows arising from the activities of Group companies as measured in their own currencies, translated into dollars at quarterly average rates of exchange. Accordingly, cash flows recorded exclude both the currency translation differences which arise as a result of translating the assets and liabilities of non-dollar Group companies to dollars at year-end rates of exchange (except for those arising on cash and cash equivalents) and non-cash investing and financing activities. 8 Royal Dutch Shell plc

12 Consolidated Statement of Cash Flows Cash flow provided by operating activities Income attributable to shareholders of Royal Dutch Shell plc 12,322 9,671 10,321 Adjustments to reconcile net income to cash flow provided by operating activities Depreciation, depletion and amortisation 11,711 8,739 6,295 Profit on sale of assets (2,141) (367) (133) Movements in: inventories (236) (2,079) 1,375 accounts receivable 1,834 (5,830) 8,518 accounts payable and accrued liabilities (212) 6,989 (7,785) taxes payable (223) (744) (1,457) Associated companies, dividends more/(less) than net income Deferred taxation and other provisions (621) 423 (207) Long-term liabilities and other (1,328) (1,326) (983) Income applicable to minority interests Cash flow provided by operating activities 21,983 15,768 16,936 Cash flow used in investing activities Capital expenditure (including capitalised leases) (12,252) (12,102) (9,598) Acquisitions (Enterprise Oil, Pennzoil-Quaker State and additional shares in Equilon) (8,925) Proceeds from sale of assets 2,286 1,099 1,265 New investments in associated companies (983) (1,289) (1,074) Disposals of investments in associated companies Proceeds from sale and other movements in investments 1, (180) Cash flow used in investing activities (8,253) (20,632) (9,080) Cash flow used in financing activites Long-term debt (including short-term part) New borrowings 572 5, Repayments (2,740) (5,610) (1,115) (2,168) (343) (935) Net increase/(decrease) in short-term debt (2,501) 7,075 (794) Change in minority interests (1,363) 421 (206) Repurchase of share capital, including expenses (1,393) (4,001) Dividends paid to Royal Dutch and Shell Transport shareholders (6,532) (5,522) (5,188) Dividends paid to minority interests (300) (228) (221) Cash flow used in financing activities (12,864) 10 (11,345) Net investment in treasury stock and dividends received (633) (864) (773) Currency translation differences relating to cash and cash equivalents (290) Increase/(decrease) in cash and cash equivalents 408 (5,545) (4,552) Cash and cash equivalents at January 1 1,709 7,254 11,806 Cash and cash equivalents at December 31 2,117 1,709 7,254 Financial Statements 9

13 FINANCIAL STATEMENTS Earnings by industry segment World World outside outside USA USA Total USA USA Total Exploration & Production 10,541 3,697 14,238 6,511 3,312 9,823 Gas & Power 1, ,573 2,011 (196) 1,815 Oil Products 7,726 2,256 9,982 5,677 1,920 7,597 Chemicals 1, ,298 1, ,347 Other industry segments (202) (145) Total operating segments 26,889 20,437 Corporate (321) (946) Minority interest Income from continuing operations 26,568 19,491 Income from discontinued operations, net of tax (307) (234) Cumulative effect of a change in accounting principle, net of tax Income for the period 26,261 19,257 Minority interest Income attributable to shareholders of Royal Dutch Shell plc 25,311 18,540 Quarterly earnings by industry segment Quarters 2005 Quarters st 2nd 3rd 4th Year 1st 2nd 3rd 4th Year Exploration & Production World outside USA 2,010 1,644 4,051 2,836 10,541 1,955 1,168 1,556 1,832 6,511 USA 945 1, , ,086 3,312 Gas & Power World outside USA , ,011 USA (42) (63) (41) 9 (242) (196) Oil Products World outside USA 2,306 2,034 2,377 1,009 7,726 1,192 1,319 1,953 1,213 5,677 USA ,063 (182) 2, ,920 Chemicals World outside USA , ,257 USA (178) 59 (9) (70) 125 Other industry segments (8) (8) (76) (110) (202) (16) (8) (39) (82) (145) Total operating segments 7,137 5,671 9,311 4,770 26,889 4,987 4,328 5,765 5,386 20,437 Corporate Interest income/(expense) (70) (74) (22) (174) (196) (143) (223) (707) Currency exchange gains/(losses) (40) (6) 126 (145) (65) (7) (2) Other including taxation (7) (130) (24) (73) (234) 20 (103) (59) (165) (307) Minority interest Income from continuing operations 7,020 5,461 9,484 4,603 26,568 4,826 4,028 5,597 5,040 19,491 Income from discontinued operations, net of tax (214) (93) (307) (299) (234) Cumulative effect of a change in accounting principle, net of tax Income for the period 6,806 5,461 9,391 4,603 26,261 4,846 4,050 5,620 4,741 19,257 Income attributable to minority interest Income attributable to shareholders of Royal Dutch Shell plc 6,675 5,236 9,032 4,368 25,311 4,701 3,897 5,371 4,571 18, Royal Dutch Shell plc

14 World World World outside outside outside USA USA Total USA USA Total USA USA Total 5,814 2,776 8,590 4,763 1,878 6,641 5,691 2,191 7,882 2, , (90) ,199 2, ,821 2, ,485 2,078 (159) 1, (523) (209) 633 (68) (361) 127 (267) (110) (287) 13,205 10,328 10,840 (810) (669) (196) (353) (175) (360) 12,042 9,484 10, ,322 9,671 10,321 Quarters 2003 Quarters 2002 Quarters st 2nd 3rd 4th Year 1st 2nd 3rd 4th Year 1st 2nd 3rd 4th Year 1,979 1,288 1,244 1,303 5,814 1,168 1,221 1,146 1,228 4,763 1,878 1,470 1,341 1,002 5, , , ,191 1, , (26) (8) 14 (23) (73) (90) , , , (26) 2, (32) (4) 287 (1) (431) (159) (123) (142) (105) (45) (231) (523) (18) 35 (35) (50) (68) (109) 30 (73) (209) (361) (40) (27) (160) (40) (267) (41) (89) 42 (22) (110) (54) (60) (71) (102) (287) 5,508 2,696 2,630 2,371 13,205 2,566 2,416 2,830 2,516 10,328 4,012 3,595 2, ,840 (252) (171) (148) (223) (794) (107) (111) (260) (276) (754) (26) (51) (72) (54) (203) (10) (19) (31) (100) (160) (7) 32 (16) (19) (13) 144 (41) (48) 81 1 (7) (57) (55) (20) (86) (64) (117) (81) (353) (8) (13) (77) (77) (175) (127) (128) (75) (30) (360) 5,169 2,537 2,387 1,949 12,042 2,403 2,276 2,558 2,247 9,484 3,815 3,488 2, , (119) (39) ,496 2,575 2,421 1,830 12,322 2,454 2,328 2,609 2,280 9,671 3,776 3,510 2, ,321 Financial Statements 11

15 FINANCIAL STATEMENTS Financial ratios Return on average capital employed Income attributable to shareholders of Royal Dutch Shell plc plus interest expense, less tax and minority interest (both calculated at the average rate for the Group), as % of the Group share of average capital employed Return on sales Income attributable to shareholders of Royal Dutch Shell plc plus minority interests as % of revenue plus sales taxes, excise duties and similar levies Return on equity Income attributable to shareholders of Royal Dutch Shell plc as % of average net assets (i.e. equity attributable to shareholders of Royal Dutch Shell plc and minority interest) Current ratio Current assets: current liabilities Long-term debt ratio Long-term debt as % of capital employed less short-term debt Total debt ratio Long-term debt plus short-term debt as % of capital employed Gearing Total debt plus off-balance sheet commitments less net cash, as % of capital employed plus off-balance sheet commitments less net cash (net cash represents total cash balances less operational cash requirements) Dollar exchange rates Quarters 2005 Quarters Average for period 1st 2nd 3rd 4th Year 1st 2nd 3rd 4th Year Year Year Year Pound sterling Euro Swiss franc Canadian dollar Japanese yen End-period Pound sterling Euro Swiss franc Canadian dollar Japanese yen Royal Dutch Shell plc

16 Capital investment Capital expenditure a Exploration & Production Europe 1,820 1,591 1,996 7,342 1,137 Other Eastern Hemisphere 6,654 5,420 4,143 2,634 2,860 USA 1,225 1,061 1,377 1,766 1,720 Other Western Hemisphere b 1, ,322 1,130 10,858 8,699 8,129 13,064 6,847 Gas & Power Europe Other Eastern Hemisphere 1,476 1, USA Other Western Hemisphere (13) ,568 1,357 1, Oil Products Europe 1,107 1, , Other Eastern Hemisphere USA ,408 3 Other Western Hemisphere ,810 2,761 2,367 7,653 1,462 Chemicals Europe Other Eastern Hemisphere USA Other Western Hemisphere Other industry segments ,916 13,566 12,252 22,362 9,598 Exploration expense (excluding depreciation and release of currency translation differences) Europe Other Eastern Hemisphere USA Other Western Hemisphere , Total capital expenditure and exploration expense 16,731 14,217 13,311 23,359 10,483 New equity in equity accounted investments Europe Other Eastern Hemisphere USA Other Western Hemisphere New loans to equity accounted investments Europe Other Eastern Hemisphere USA (22) Other Western Hemisphere Other investments 224 Total capital investment* 17,436 15,275 14,294 24,648 11,781 *comprising Europe 3,620 3,387 3,391 10,384 2,232 Other Eastern Hemisphere 9,657 8,129 6,172 4,373 4,319 USA 2,204 2,396 3,211 7,461 2,976 Other Western Hemisphere 1,955 1,363 1,520 2,430 2,254 17,436 15,275 14,294 24,648 11,781 *comprising Exploration & Production 12,045 9,708 9,337 14,151 8,191 Gas & Power 1,602 1,633 1, Oil Products 2,844 2,823 2,405 7,968 1,527 Chemicals Other industry segments ,436 15,275 14,294 24,648 11,781 a Includes acquisitions in also includes $1.3 billion for acquisition of DEA (paid in July 2003). b Includes capital expenditure on the Athabasca Oil Sands Project. Financial Statements 13

17 FINANCIAL STATEMENTS Fixed assets a (at December 31) Exploration & Production Europe 15,984 20,448 20,978 21,003 7,696 Other Eastern Hemisphere 26,136 21,274 18,670 15,328 14,370 USA 7,580 7,745 8,064 8,524 8,189 Other Western Hemisphere 7,249 6,977 6,727 6,057 3,534 56,949 56,444 54,439 50,912 33,789 Gas & Power Europe Other Eastern Hemisphere 8,237 6,521 5,290 4,027 3,243 USA 2,568 3,046 4,622 1,894 1,830 Other Western Hemisphere ,241 11,909 10,476 11,315 7,272 6,720 Oil Products Europe 9,752 11,339 11,171 10,263 6,938 Other Eastern Hemisphere 6,448 6,516 7,167 6,567 6,300 USA 12,402 12,242 13,164 12,946 4,581 Other Western Hemisphere 3,801 3,726 3,653 3,401 3,424 32,403 33,823 35,155 33,177 21,243 Chemicals Europe 2,091 4,332 4,253 3,887 3,472 Other Eastern Hemisphere 2,472 2,128 2,276 2,461 2,215 USA 3,496 3,626 3,613 3,139 2,687 Other Western Hemisphere ,500 10,558 10,565 9,840 8,719 Other industry segments Europe Other Eastern Hemisphere USA Other Western Hemisphere Total operating segments 110, , , ,126 71,120 Corporate 2,462 2,624 2,475 2,017 1, , , , ,143 73,013 a Comprises intangible assets, property, plant and equipment and investments. 14 Royal Dutch Shell plc

18 Depreciation, depletion and amortisation Exploration & Production Europe 3,777 3,425 3,781 2,292 1,330 Other Eastern Hemisphere 1,915 1,934 1,570 1,787 1,328 USA 1,596 1,595 1,644 1,354 1,072 Other Western Hemisphere a ,277 7,698 7,787 5,690 4,011 Gas & Power Europe Other Eastern Hemisphere USA Other Western Hemisphere Oil Products Europe 1,065 1,588 1, Other Eastern Hemisphere USA Other Western Hemisphere ,622 3,357 2,863 2,406 1,617 Chemicals Europe Other Eastern Hemisphere USA Other Western Hemisphere Other industry segments Europe Other Eastern Hemisphere USA Other Western Hemisphere Total operating segments 11,870 12,701 11,624 8,717 6,277 Corporate ,981 12,845 11,711 8,739 6,295 a Includes depreciation, depletion and amortisation on the Athabasca Oil Sands Project. Financial Statements 15

19 FINANCIAL STATEMENTS Capital employed (at December 31) Exploration & Production World outside USA 37,272 34,840 33,131 28,615 17,918 USA 5,364 5,438 5,761 6,492 6,293 42,636 40,278 38,892 35,107 24,211 Gas & Power World outside USA 9,848 8,302 7,115 5,482 5,135 USA 4,350 3,639 5,051 2,168 2,275 14,198 11,941 12,166 7,650 7,410 Oil Products World outside USA 23,962 23,174 24,211 20,782 18,108 USA 10,300 10,463 11,084 11,274 3,966 34,262 33,637 35,295 32,056 22,074 Chemicals World outside USA 5,445 7,738 7,484 7,098 6,109 USA 3,077 3,187 2,946 2,408 2,470 8,522 10,925 10,430 9,506 8,579 Other industry segments ,611 1,815 Total operating segments 99,789 97,270 97,647 85,930 64,089 Corporate 11,051 8,705 3,688 2,915 8, , , ,335 88,845 72,108 Taxation Exploration & Production 14,794 9,649 7,280 5,945 6,905 Other industry segments 3,205 2, Charge for equity accounted investments 1, ,087 Total a 17,999 12,168 9,352 7,655 8,299 As percentage of income before taxation % a The charge for Group companies (excluding equity accounted investments) comprises: current taxation 19,435 13,081 8,200 6,658 7,617 deferred taxation (1,436) (913) (311) 7 (405) 17,999 12,168 7,889 6,665 7, Royal Dutch Shell plc

20 EMPLOYEE DATA Employees by segment (average numbers) thousands a Exploration & Production Gas & Power Oil Products Chemicals Other industry segments and Corporate Employees by geographical area (average numbers) thousands a Europe The Netherlands UK Others Other Eastern Hemisphere USA Other Western Hemisphere Employee emoluments a Remuneration 8,286 8,037 7,477 6,096 4,651 Social law taxes Retirement benefits (201) (580) Share-based compensation a 10,111 9,795 8,675 6,413 4,466 In connection with the adoption of as of January 1, 2004, an entity in Europe that had previously been accounted for as a Group company on a proportionate basis, has instead been accounted for as equity accounted investment. As a result of this change, information as of December 31, 2003 shown for Group companies is, as of January 1, 2004, shown as part of the Group share of equity accounted investments. Employee data 17

21 EXPLORATION & PRODUCTION > Exploration & Production explores for and extracts oil and gas and builds and operates the infrastructure necessary to deliver these hydrocarbons to market. > Oil and gas production in 2005 averaged 3.5 million boe per day. > We expect production to grow and reach between 3.8 and 4.0 million boe per day by > The Group s longer-term production aspiration is some million boe per day by Revenue (including inter-segment sales) 45,674 37,295 Purchases (including change in inventories) (1,673) (2,669) Exploration (1,286) (1,809) Depreciation (8,152) (7,015) Operating expenses (9,295) (8,467) Share of profit of equity accounted investments 4,112 2,463 Other income/(expense) (272) (95) Taxation (14,870) (9,880) Segment earnings 14,238 9,823 Capital investment 12,046 9,708 Capital employed 42,636 40,278 thousand barrels of oil equivalent/day Hydrocarbon production 3,518 3,772 $/barrel of oil equivalent Average production cost average numbers in thousands Employees Revenue (including inter-segment sales) 32,468 26,320 25,601 Purchases (including change in inventories) (1,535) (1,050) (1,265) Exploration (1,475) (1,052) (910) Depreciation (7,316) (5,556) (3,969) Operating expenses (7,174) (6,686) (5,474) Share of profit of equity accounted investments 1,857 1,316 1,548 Other income/(expense) Taxation (8,307) (6,724) (7,697) Segment earnings from continuing operations 8,590 6,641 7,882 Income from discontinued operations, net of tax Cumulative effect of a change in accounting principle 255 Segment earnings 8,923 6,726 7,911 Capital investment 9,337 14,151 8,191 Capital employed 38,892 35,107 24,211 thousand barrels of oil equivalent/day Hydrocarbon production 3,905 3,960 3,746 $/barrel of oil equivalent Average production cost Royal Dutch Shell plc average numbers in thousands Employees