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Royal Dutch Shell plc: 4th Quarter and Full Year 2013 Unaudited Results

THE HAGUE, The Netherlands, January 30, 2014 /PRNewswire/ --

Royal Dutch Shell's (NYSE:RDS.A) (NYSE:RDS.B) fourth quarter 2013 earnings, on a current cost of supplies (CCS) basis (see Note 1), were $2.2 billion compared with $7.4 billion in the same quarter a year ago. Full year 2013 CCS earnings were $16.7 billion compared with $27.2 billion in 2012.

Fourth quarter 2013 CCS earnings excluding identified items (see page 6) were $2.9 billion compared with $5.6 billion in the fourth quarter of 2012. Full year 2013 CCS earnings excluding identified items were $19.5 billion compared with $25.3 billion in 2012.

Compared with the fourth quarter 2012, CCS earnings excluding identified items were impacted by higher depreciation, increased exploration expenses, lower upstream volumes and weak industry conditions in downstream oil products.

Fourth quarter 2013 basic CCS earnings per share excluding identified items decreased by 49% versus the fourth quarter 2012. Full year 2013 basic CCS earnings per share excluding identified items decreased by 23% versus 2012.

Total dividends distributed in the fourth quarter were some $2.8 billion, of which $1.2 billion were settled under the Scrip Dividend Programme. During the fourth quarter some 27.2 million shares were bought back for cancellation for a consideration of $1.0 billion.

Gearing at the end of 2013 was 16.1% compared with 9.8% at the end of 2012.

A fourth quarter 2013 dividend has been announced of $0.45 per ordinary share and $0.90 per American Depositary Share ("ADS"), an increase of 5% compared with the fourth quarter 2012.

The first quarter 2014 dividend is expected to be declared at $0.47 per ordinary share and $0.94 per American Depositary Share ("ADS"), an increase of 4% compared with the first quarter 2013.

    Summary OF unaudited results
            Quarters                   $ million                Full year
     Q4     Q3     Q4
    2013   2013  2012[1] %[2]                               2013   2012[1]  %

                              Income attributable to
    1,781  4,677   6,728 -74  shareholders                  16,371  26,712 -39
                              Current cost of supplies
                              (CCS) adjustment for
      371  (429)     623      Downstream                       374     452
    2,152  4,248   7,351 -71  CCS earnings                  16,745  27,164 -38
    (763)  (209)   1,712      Less: Identified items[3]    (2,747)   1,905
                              CCS earnings excluding
    2,915  4,457   5,639 -48  identified items              19,492  25,259 -23
                              Of which:
    2,477  3,466   4,401      Upstream                      15,117  20,107
      558    892   1,190      Downstream                     4,466   5,343
                              Corporate and
    (120)     99      48      Non-controlling interest        (91)   (191)

                              Cash flow from operating
    6,028 10,409   9,913 -39  activities                    40,440  46,140 -12

                              Basic CCS earnings per share
     0.34   0.68    1.17 -71  ($)                             2.66    4.34 -39
                              Basic CCS earnings per ADS
     0.68   1.36    2.34      ($)                             5.32    8.68
                              Basic CCS earnings per share
     0.46   0.71    0.90 -49  excl. identified items ($)      3.10    4.04 -23
                              Basic CCS earnings per ADS
     0.92   1.42    1.80      excl. identified items ($)      6.20    8.08

     0.45   0.45    0.43  +5  Dividend per share ($)          1.80    1.72  +5
     0.90   0.90    0.86      Dividend per ADS ($)            3.60    3.44


    [1] Restated for accounting policy change (see Note 2)
    [2] Q4 on Q4 change [3] See page 6


    Royal Dutch Shell Chief Executive Officer Ben van Beurden:
    "Our momentum slowed in 2013. We must improve our financial results,
    achieve better capital efficiency and continue to strengthen our
    operational performance and project delivery."


FOURTH QUARTER 2013 portfolio developments

Upstream

In Brazil, Shell paid $1.3 billion as its share of the signature bonus for the 35-year production-sharing contract ("PSC") to develop the Libra discovery (Shell interest 20%), a potentially multi-billion barrel oil field in pre-salt reservoirs located in the Santos Basin.

Also in Brazil, Shell completed the acquisition of an additional 23% interest in the Shell-operated deepwater project BC-10, for a consideration of some $1 billion.

During the fourth quarter 2013, Shell announced positive well test results in Block 2-3 (Shell interest 75%) onshore south-central Albania, demonstrating light oil potential in a fractured carbonate play. In addition, Shell drilled a number of successful exploration and appraisal wells during 2013 near its established production infrastructure.

As part of its global exploration programme Shell added new acreage positions during the fourth quarter 2013, including offshore positions in Australia and Greenland as well as onshore positions in Tunisia.

Upstream divestment proceeds totalled some $0.3 billion for the fourth quarter 2013 and included proceeds from the divestment of certain liquids-rich shales acreage positions in Ohio, United States.

In January 2014, Shell completed the acquisition of Repsol S.A.'s LNG portfolio outside of North America, including supply positions in Peru and Trinidad & Tobago, for a net cash purchase price of $3.8 billion, subject to post-closing adjustments. As part of the transaction, Shell also assumed $1.6 billion of balance sheet liabilities relating to existing leases for LNG ship charters. The acquisition adds 7.2 million tonnes per annum ("mtpa") of directly managed LNG volumes through long-term offtake agreements, including 4.2 mtpa of equity LNG plant capacity. Shell's fourth quarter 2013 capital investment includes $3.4 billion for this transaction, with the remaining $2.0 billion booked in the first quarter 2014, of which $1.6 billion is a non-cash item relating to the LNG ship charter finance leases.

Also in January 2014, Shell agreed to sell its 8% interest in the Wheatstone-Iago joint venture and its 6.4% interest in the 8.9 mtpa Wheatstone LNG project in Western Australia to the Kuwait Foreign Petroleum Exploration Company for $1.1 billion, subject to closing.

In Upstream Americasresources plays, insights from ongoing exploration and appraisal drilling results and production information, and Shell's ongoing restructuring of this portfolio, could potentially lead to future asset sales and/or impairments.

Downstream

Shell is restructuring its Oil Products business to improve profitability.

In the Czech Republic, Shell agreed to sell its 16.3% interest in Ceska Rafinerska, which includes the Kralupy and Litvinov refineries with a combined capacity of 160 thousand barrels per day ("b/d") (100%). The transaction is expected to complete during the first half of 2014.

Shell sold its 21% interest in the Mongstad refinery (capacity 205 thousand b/d) in Norway and, under the transaction, acquired an additional 10% interest in the Pernis refinery (capacity 404 thousand b/d) in the Netherlands. Following this transaction, Shell's interest in the Pernis refinery increased to 100%.

Downstream divestment proceeds totalled some $0.2 billion for the fourth quarter 2013 and included proceeds from the divestment of certain downstream marketing businesses in Egypt, the first phase of the sale of the Harburg refinery (capacity 108 thousand b/d) in Germany and the divestment of the LPG business in the Philippines.

Shell commenced a review of its global refining portfolio, in the context of the growth of light crude supply in North America, and excess industry refining capacity world-wide. These factors are affecting the dynamics of the global refining industry environment. The portfolio review could potentially lead to further asset sales, closures and/or impairments.

Shell is also considering the sale of certain of its marketing assets in Norway and Italy. In Australia, Shell has received indications of interest to acquire its refining and parts of its marketing portfolio. The company is considering its options for divestment, subject to achieving satisfactory commercial terms for these positions.

Key features of the Fourth Quarter and Full Year 2013

Fourth quarter 2013 CCS earnings (see Note 1) were $2,152 million, 71% lower than for the same quarter a year ago. Full year 2013 CCS earnings were $16,745 million, 38% lower than in 2012.

Fourth quarter 2013 CCS earnings excluding identified items (see page 6) were $2,915 million compared with $5,639 million in the fourth quarter 2012, a decrease of 48%. Fourth quarter 2013 CCS earnings excluding identified items were impacted by higher depreciation, increased exploration expenses, lower upstream volumes and weak industry conditions in downstream oil products.

Full year 2013 CCS earnings excluding identified items were $19,492 million compared with $25,259 million in the fourth quarter 2012, a decrease of 23%.

Basic CCS earnings per share for the fourth quarter 2013 decreased by 71% versus the same quarter a year ago. Full year 2013 basic CCS earnings per share decreased by 39% versus 2012.

Basic CCS earnings per share excluding identified items for the fourth quarter 2013 decreased by 49% versus the same quarter a year ago. Full year 2013 basic CCS earnings per share excluding identified items decreased by 23% versus 2012.

Cash flow from operating activities for the fourth quarter 2013 was $6.0 billion, compared with $9.9 billion in the same quarter last year. Excluding working capital movements, cash flow from operating activities for the fourth quarter 2013 was $7.7 billion, compared with $8.9 billion in the same quarter last year.

Full year 2013 cash flow from operating activities was $40.4 billion, compared with $46.1 billion in 2012. Excluding working capital movements, cash flow from operating activities for the full year 2013 was $37.5 billion, compared with $42.7 billion in 2012.

Net capital investment (see Note 1) for the fourth quarter 2013 was $15.8 billion. Capital investment for the fourth quarter 2013 was $16.3 billion and divestment proceeds were some $0.5 billion.

Full year 2013 net capital investment was $44.3 billion. Capital investment for the full year 2013 was $46.0 billion and divestment proceeds were $1.7 billion.

Total dividends distributed in the fourth quarter 2013 were some $2.8 billion, of which $1.2 billion were settled by issuing some 37.3 million A shares under the Scrip Dividend Programme for the third quarter 2013. Total dividends distributed in the full year 2013 were $11.3 billion, of which $4.1 billion were settled by issuing some 125.6 million A shares under the Scrip Dividend Programme.

Under our share buyback programme some 27.2 million B shares were bought back for cancellation during the fourth quarter 2013 for a consideration of $1.0 billion. During the full year 2013 some 144.9 million B shares were bought back for cancellation for a consideration of $5.0 billion.

Return on average capital employed (see Note 5) on a reported income basis was 7.9% at the end of 2013 compared with 13.6% at the end of 2012 (see Note 2).

Gearing was 16.1% at the end of 2013 versus 9.8% at the end of 2012 (see Note 2).

Oil and gas production for the fourth quarter 2013 was 3,251 thousand barrels of oil equivalent per day ("boe/d"), a decrease of 5% compared with the fourth quarter 2012. Excluding the impact of the deteriorated security situation in Nigeria, divestments and PSC price effects, fourth quarter 2013 production volumes were 3% lower than in the same period last year. Production volumes were impacted by higher maintenance and asset replacement activities during the fourth quarter 2013.

Full year 2013 oil and gas production was 3,199 thousand boe/d, a decrease of 2% compared with 2012. Excluding the impact of the deteriorated operating environment in Nigeria, divestments and PSC price effects, 2013 production volumes were in line with 2012. Production volumes were impacted by higher maintenance and asset replacement activities during 2013.

Equity LNG sales volumes of 4.93 million tonnes for the fourth quarter 2013 were 10% lower than in the same quarter a year ago.

Full year 2013 equity LNG sales volumes of 19.64 million tonnes were 3% lower than in 2012.

Oil products sales volumes for the fourth quarter 2013 were 5% lower than for the fourth quarter 2012. Chemicals sales volumes for the fourth quarter 2013 decreased by 5% compared with the same quarter a year ago.

Full year 2013 oil products sales volumes were 1% lower than in 2012. Full year 2013 chemicals sales volumes decreased by 7% compared with 2012. When final volumes are reported in the 2013 Annual Report and Form 20-F, Shell expects that proved oil and gas reserves additions before taking into account production on an SEC basis will be around 1.6 billion barrels of oil equivalent ("boe").

With 2013 production of some 1.2 billion boe, our headline proved Reserves Replacement Ratio for the year on an SEC basis is expected to be around 131%. Our Organic Reserves Replacement Ratio, which excludes the impact of oil and gas price movements in the year, acquisitions and divestments, is expected to be around 123%.

At the end of 2013, total proved reserves on an SEC basis are expected to be around 13.9 billion boe, after taking into account 2013 production.

The 3-year average headline proved Reserves Replacement Ratio on an SEC basis is expected to be around 91%. Our 3-year average Organic Reserves Replacement Ratio, which excludes the impact of oil and gas price movements in the year, acquisitions and divestments, is expected to be around 112%.

Further information will be provided in our Annual Report and Form 20-F, which is expected to be filed in March 2014.

Comparative information in this Report has been restated following the adoption of revised IAS 19 Employee Benefits on January 1, 2013, with retrospective effect (see Note 2). Comparative information was not restated for other accounting policy changes (see Note 1) for which the impacts are not significant, including the adoption of IFRS 11 Joint Arrangements on January 1, 2013, which results in certain previously equity-accounted entities now in effect being proportionately consolidated.Supplementary financial and operational disclosure for the fourth quarter and full year 2013 is available at http://www.shell.com/investor.


Summary of identified items

Earnings for the fourth quarter 2013 reflected the following items, which in aggregate amounted to a net charge of $763 million (compared with a net gain of $1,712 million in the fourth quarter 2012), as summarised in the table below:

Upstream earnings included a net charge of $631 million, reflecting impairments of $687 million, mainly related to two liquids-rich shales properties, gas infrastructure and the Kulluk drilling rig, all in North America. Identified items also included redundancy and restructuring charges of $31 million and a net charge of $16 million related to divestments. This was partly offset by a net gain of $55 million from movements in tax provisions and by the net impact of fair value accounting of commodity derivatives and certain gas contracts of $48 million. Upstream earnings for the fourth quarter 2012 included a net gain of $1,801 million.

Downstream earnings included a net charge of $86 million, reflecting impairments of $105 million, mainly related to a bitumen refinery in North America, redundancy and restructuring charges of $27 million and the net impact of fair value accounting of commodity derivatives of $27 million. This was partly offset by a net gain of $73 million related to divestments. Downstream earnings for the fourth quarter 2012 included a net charge of $89 million.

Corporate results and Non-controlling interest included a net charge of $46 million, mainly reflecting a net charge from movements in tax provisions. Earnings for the fourth quarter 2012 did not include any identified items.

    Summary OF IDENTIFIED ITEMS
           Quarters                    $ million               Full year
    Q4 2013 Q3 2013 Q4 2012                                   2013    2012
                            Segment earnings impact of
                            identified items:
      (631)   (176)   1,801 Upstream                         (2,479)  2,137
       (86)      14    (89) Downstream                         (597)     39
                            Corporate and Non-controlling
       (46)    (47)       - interest                             329  (271)
      (763)   (209)   1,712 Earnings impact                  (2,747)  1,905


These identified items are shown to provide additional insight into segment earnings and income attributable to shareholders. From the first quarter 2013 onwards, identified items include the full impact on Shell's CCS earnings of the following items:

Divestment gains and losses

Impairments

Fair value accounting of commodity derivatives and certain gas contracts (see Note 4)

Redundancy and restructuring


Further items may be identified in addition to the above. Prior period comparatives have not been restated.


Earnings BY BUSINESS segment

    UPSTREAM
              Quarters                    $ million              Full year
    Q4 2013 Q3 2013 Q4 2012 %[2]                              2013   2012   %

                                 Upstream earnings excluding
      2,477   3,466   4,401 -44  identified items[1]         15,117 20,107 -25
      1,846   3,290   6,202 -70  Upstream earnings[1]        12,638 22,244 -43

                                 Upstream cash flow from
      5,557   6,709   6,165 -10  operating activities        30,114 33,061 -9

                                 Upstream net capital
     14,150   8,148   9,323 +52  investment                  39,217 25,320 +55

                                 Liquids production
                                 available for sale
      1,539   1,485   1,640  -6  (thousand b/d)               1,541  1,633 -6
                                 Natural gas production
                                 available for sale (million
      9,925   8,383  10,288  -4  scf/d)                       9,616  9,449 +2
                                 Total production available
      3,251   2,931   3,414  -5  for sale (thousand boe/d)    3,199  3,262 -2

                                 Equity LNG sales volumes
       4.93    4.88    5.49 -10  (million tonnes)             19.64  20.20 -3

    [1] Fourth quarter 2012 and full year 2012 comparatives restated for accounting
        policy change (see Note 2)
    [2] Q4 on Q4 change


Fourth quarter Upstream earnings excluding identified items were $2,477 million compared with $4,401 million a year ago. Identified items were a net charge of $631 million, compared with a net gain of $1,801 million in the fourth quarter 2012 (see page 6).

Compared with the fourth quarter 2012, earnings excluding identified items were impacted by higher exploration expenses, mainly due to well write-offs in French Guiana and in resources plays globally. Increased maintenance activities, affecting high value oil and gas volumes as well as LNG sales volumes, adversely impacted earnings by some $500 million compared with the fourth quarter 2012. Depreciation increased, and the impact of the weakening Australian dollar on a deferred tax liability reduced earnings by some $170 million compared with the fourth quarter 2012. Earnings also reflected lower liquids and gas realisations, higher operating expenses and the deteriorated security situation onshore Nigeria. Earnings benefited from the contribution of growth projects and from higher LNG realisations.

Upstream Americas excluding identified items continued to incur a loss.

Global liquids realisations were 6% lower than for the fourth quarter 2012. In Canada, synthetic crude oil realisations were 2% higher than for the same period last year. Global natural gas realisations were 1% higher than for the same quarter a year ago, with a 4% increase in the Americas and a 1% decrease outside the Americas.

Fourth quarter 2013 production was 3,251 thousand boe/d compared with 3,414 thousand boe/d a year ago. Liquids production decreased by 6% and natural gas production decreased by 4% compared with the fourth quarter 2012. The deteriorated security situation in Nigeria impacted production volumes by some 40 thousand boe/d compared with the fourth quarter 2012. Excluding the impact of the deteriorated security situation environment in Nigeria, divestments and PSC price effects, fourth quarter 2013 production was 3% lower than for the same period last year. Compared with the fourth quarter 2012, production volumes were impacted by some 95 thousand boe/d due to higher maintenance and asset replacement activities.

New field start-ups and the continuing ramp-up of existing fields contributed some 115 thousand boe/d to production for the fourth quarter 2013.

Equity LNG sales volumes of 4.93 million tonnes decreased by 10% compared with the same quarter a year ago, mainly reflecting higher planned maintenance activities at several LNG plants, partly offset by stronger operating performance.

Full year Upstream earnings excluding identified items were $15,117 million compared with $20,107 million in 2012. Identified items were a net charge of $2,479 million, compared with a net gain of $2,137 million in 2012 (see page 6).

Compared with 2012, Upstream earnings excluding identified items reflected higher exploration expenses, increased operating expenses, higher depreciation as well as lower liquids and LNG realisations. Earnings were also impacted by the deteriorated operating environment in Nigeria and the impact of the weakening Australian dollar on a deferred tax liability. This was partly offset by the contribution of Pearl GTL, and higher gas realisations in the Americas.

Global liquids realisations were 6% lower than in 2012. In Canada, synthetic crude oil realisations were 7% higher than in 2012. Global natural gas realisations were 6% higher than in 2012, with a 27% increase in the Americas and a 3% increase outside the Americas.

Full year 2013 production was 3,199 thousand boe/d compared with 3,262 thousand boe/d in 2012. Liquids production was down 6% and natural gas production increased by 2% compared with 2012. The deteriorated operating environment in Nigeria impacted production volumes by some 50 thousand boe/d compared with 2012. Excluding the impact of divestments, PSC price effects and the deteriorated operating environment in Nigeria, production volumes in 2013 were in line with 2012. Production volumes were impacted by higher maintenance and asset replacement activities.

New field start-ups and the continuing ramp-up of existing fields, in particular Pearl GTL in Qatar, contributed some 170 thousand boe/d to production in 2013.

Equity LNG sales volumes of 19.64 million tonnes were 3% lower than in 2012, mainly reflecting lower volumes from Nigeria LNG due to reduced feedgas supply as a result of the deteriorated operating environment in Nigeria. Excluding the impact of the challenging operating environment in Nigeria, equity LNG sales volumes were in line with 2012.

    DOWNSTREAM

              Quarters                    $ million              Full year
    Q4 2013 Q3 2013 Q4 2012 %[2]                              2013   2012   %

                                 Downstream CCS earnings
                                 excluding identified
        558     892   1,190 -53  items[1]                     4,466  5,343 -16
        472     906   1,101 -57  Downstream CCS earnings[1]   3,869  5,382 -28

                                 Downstream cash flow from
        808   2,969   4,303 -81  operating activities         7,903 11,111 -29

                                 Downstream net capital
      1,571   1,166   1,471  +7  investment                   4,885  4,275 +14

                                 Refinery processing intake
      2,910   2,947   2,804  +4  (thousand b/d)               2,915  2,819  +3

                                 Oil products sales volumes
      6,038   6,398   6,367  -5  (thousand b/d)               6,164  6,235  -1

                                 Chemicals sales volumes
      4,412   4,620   4,620  -5  (thousand tonnes)           17,386 18,669  -7

    [1] Fourth quarter 2012 and full year 2012 comparatives restated
        for accounting policy change (see Note 2)
    [2] Q4 on Q4 change


Fourth quarter Downstream earnings excluding identified items were $558 million compared with $1,190 million for the fourth quarter 2012. Identified items were a net charge of $86 million, compared with a net charge of $89 million for the fourth quarter 2012 (see page 6).

Compared with the fourth quarter 2012, Downstream earnings excluding identified items were mainly impacted by significantly weaker refining industry conditions, in particular in Asia and Europe. Earnings also reflected lower contributions from marketing and trading. This was partly offset by positive contributions from the Motiva joint venture in the United States and by higher Chemicals earnings, as a result of improved chemicals industry conditions in Asia and the United States, as well as continued strong operating performance.

Oil products sales volumes decreased by 5% compared with the same period a year ago, as a result of lower marketing and trading volumes, partly offset by an accounting policy change (see Note 1b).

Chemicals sales volumes also decreased by 5% compared with the same quarter last year, mainly as a result of an accounting policy change (see Note 1b) and contract expirations, partly offset by higher trading volumes. Chemicals manufacturing plant availability of 91% was in line with the fourth quarter 2012 and reflected continued strong operating performance, offset by higher planned maintenance.

Refinery intake volumes were 4% higher compared with the same quarter last year, mainly as a result of an accounting policy change (see Note 1b) and also from higher volumes from the Motiva joint venture. Refinery availability was 93%, compared with 92% for the fourth quarter 2012.

Full year Downstream earnings excluding identified items were $4,466 million compared with $5,343 million in 2012. Identified items were a net charge of $597 million, compared with a net gain of $39 million in 2012 (see page 6).

Compared with 2012, Downstream earnings excluding identified items reflected higher contributions from Chemicals and trading, with continued strong contributions from marketing, which were broadly similar to 2012. This was more than offset by significantly lower realised refining margins, mainly as a result of a severe deterioration of industry conditions in most regions. Contributions from North American refineries were also impacted by the narrower price differential between North American crude oil markers and the Brent crude oil marker. As a result of these developments, refining incurred a loss in 2013.

Oil products sales volumes were 1% lower compared with 2012, reflecting lower marketing and trading volumes, partly offset by the effect of an accounting policy change (see Note 1b).

Chemicals sales volumes decreased by 7% compared with 2012, mainly as a result of an accounting policy change (see Note 1b) and contract expirations, partly offset by higher trading volumes. Chemicals manufacturing plant availability increased to 92% from 91% in 2012, reflecting improved operational performance.

Refinery intake volumes were 3% higher than in 2012, mainly as a result of an accounting policy change (see Note 1b). Refinery availability was 92%, compared with 93% in 2012.

    CORPORATE AND Non-controlling Interest
           Quarters                       $ million                 Full year
    Q4 2013 Q3 2013 Q4 2012                                        2013  2012

                            Corporate and Non-controlling interest
      (120)      99      48 excl. identified items[1]               (91) (191)
                            Of which:
       (73)     135      82 Corporate[1]                              73    31
       (47)    (36)    (34) Non-controlling interest               (164) (222)

                            Corporate and Non-controlling
      (166)      52      48 interest[1]                              238 (462)

    [1] Fourth quarter 2012 and full year 2012 comparatives restated for
        accounting policy change (see Note 2)


Fourth quarter Corporate results and Non-controlling interest excluding identified items were a loss of $120 million, compared with a gain of $48 million in the same period last year. Identified items for the fourth quarter 2013 were a net charge of $46 million, whereas earnings for the fourth quarter 2012 did not include any identified items (see page 6).

Compared with the fourth quarter 2012, Corporate results excluding identified items mainly reflected higher net interest expense and adverse currency exchange rate effects, partly offset by lower costs.

Full year Corporate results and Non-controlling interest excluding identified items were a loss of $91 million compared with a loss of $191 million in 2012. Identified items for 2013 were a net gain of $329 million, compared with a net charge of $271 million in 2012 (see page 6).

Compared with 2012, Corporate results excluding identified items mainly reflected lower net interest expense and lower costs, partly offset by adverse currency exchange rate effects.

FORTHCOMING EVENTS

Shell's annual Management Day is scheduled for March 13, 2014 in London, United Kingdom, and will also be webcast on http://www.shell.com/investor. On March 17, 2014 a Management Day will be held in New York, United States.

First quarter 2014 results and first quarter 2014 dividend are scheduled to be announced on May 1, 2014. Second quarter 2014 results and second quarter 2014 dividend are scheduled to be announced on July 31, 2014. Third quarter 2014 results and third quarter 2014 dividend are scheduled to be announced on October 30, 2014.

Unaudited Condensed Consolidated Financial Statements

    CONSOLIDATED Statement of income
              Quarters                   $ million             Full year
                       Q4
    Q4 2013 Q3 2013 2012[1]  %[2]                          2013   2012[1]  %
    109,243 116,513  118,047      Revenue                 451,235 467,153
                                  Share of profit of
                                  joint ventures and
      2,024   1,515    2,127      associates                7,275   8,948
                                  Interest and other
        212     230    2,437      income                    1,089   5,599
                                  Total revenue and other
    111,479 118,258  122,611      income                  459,599 481,700
     85,853  91,842   93,350      Purchases               353,199 369,725
                                  Production and
      7,512   7,416    7,319      manufacturing expenses   28,386  26,215
                                  Selling, distribution
                                  and administrative
      3,861   3,566    3,698      expenses                 14,675  14,465
                                  Research and
        428     291      416      development               1,318   1,307
      1,766   1,636    1,167      Exploration               5,278   3,104
                                  Depreciation, depletion
      5,629   4,153    3,835      and amortisation         21,509  14,615
        470     392      379      Interest expense          1,642   1,757
      5,960   8,962   12,447  -52 Income before taxation   33,592  50,512 -33
      4,138   4,225    5,691      Taxation                 17,066  23,552
      1,822   4,737    6,756  -73 Income for the period    16,526  26,960 -39
                                  Income attributable to
                                  non-controlling
         41      60       28      interest                    155     248
                                  Income attributable to
                                  Royal Dutch Shell plc
      1,781   4,677    6,728  -74 shareholders             16,371  26,712 -39

    [1] Restated for accounting policy change (see Note 2)
    [2] Q4 on Q4 change


    earnings per share
            Quarters     
                 $                Full year
                       Q4
    Q4 2013 Q3 2013  2012[1]                               2013  2012[1]
     0.28    0.75     1.07    Basic earnings per share     2.60   4.27
     0.28    0.75     1.07    Diluted earnings per share   2.60   4.26

    [1] Restated for accounting policy change (see Note 2)


    SHARES[1]
           Quarters                      Millions                 Full year
    Q4 2013 Q3 2013 Q4 2012                                     2013    2012
                            Weighted average number of shares
                            as the basis for:
    6,272.9 6,269.7 6,282.8 Basic earnings per share           6,291.1 6,261.2
    6,275.1 6,272.5 6,289.2 Diluted earnings per share         6,293.4 6,267.8

                            Shares outstanding at the end of
    6,295.4 6,282.2 6,305.9 the period                         6,295.4 6,305.9

    [1] Royal Dutch Shell plc ordinary shares of EUR0.07 each


    Consolidated Statement of Comprehensive Income
            Quarters                     $ million                Full year
                       Q4
    Q4 2013 Q3 2013  2012[1]                                    2013   2012[1]
      1,822   4,737     6,756 Income for the period             16,526  26,960
                              Other comprehensive income, net
                              of tax:
                              Items that may be reclassified
                              to income in later periods:
                              - Currency translation
      (326)   1,064        36 differences                      (1,938)   1,394
                              - Unrealised gains/(losses) on
         28   (154)     (683) securities                         (166)   (815)
                              - Cash flow hedging
        (2)      25       101 gains/(losses)                       178      31
                              - Share of other comprehensive
                              loss of joint ventures and
       (43)    (39)     (179) associates                         (167)   (222)
      (343)     896     (725) Total                            (2,093)     388
                              Items that are not reclassified
                              to income in later periods:
                              - Retirement benefits
      2,370   (557)   (2,500) remeasurements                     3,833 (2,578)
      2,370   (557)   (2,500) Total                              3,833 (2,578)
                              Other comprehensive
      2,027     339   (3,225) income/(loss) for the period       1,740 (2,190)
                              Comprehensive income for the
      3,849   5,076     3,531 period                            18,266  24,770
                              Comprehensive income
                              attributable to non-controlling
       (14)      34        46 interest                              23     300
                              Comprehensive income
                              attributable to Royal Dutch
      3,863   5,042     3,485 Shell plc shareholders            18,243  24,470

    [1] Restated for accounting policy change (see Note 2)


    CONDENSED CONSOLIDATED balance sheet
                                                     $ million
                                                                    Dec 31,
                                      Dec 31, 2013 Sept 30, 2013    2012[1]

    Assets
    Non-current assets:
    Intangible assets                        4,394         4,348         4,470
    Property, plant and equipment          191,897       186,541       172,293
    Joint ventures and associates           34,613        34,010        38,350
    Investments in securities                4,715         4,703         4,867
    Deferred tax                             5,785         5,514         4,288
    Retirement benefits                      3,574         3,205         2,301
    Trade and other receivables              9,191         9,633         8,991
                                           254,169       247,954       235,560

    Current assets:
    Inventories                             30,009        29,820        30,781
    Trade and other receivables             63,638        62,561        65,403
    Cash and cash equivalents                9,696        14,278        18,550
                                           103,343       106,659       114,734

    Total assets                           357,512       354,613       350,294

    Liabilities
    Non-current liabilities:
    Debt                                    36,218        31,972        29,921
    Trade and other payables                 4,065         4,198         4,175
    Deferred tax                            11,943        11,678        10,312
    Retirement benefits                     11,182        13,738        15,290
    Decommissioning and other
    provisions                              19,698        18,839        17,435
                                            83,106        80,425        77,133

    Current liabilities:
    Debt                                     8,344         5,106         7,833
    Trade and other payables                70,112        71,988        72,839
    Taxes payable                           11,173        13,110        12,684
    Retirement benefits                        382           383           402
    Decommissioning and other
    provisions                               3,247         3,195         3,221
                                            93,258        93,782        96,979

    Total liabilities                      176,364       174,207       174,112

    Equity attributable to Royal
    Dutch Shell plc shareholders           180,047       179,147       174,749

    Non-controlling interest                 1,101         1,259         1,433
    Total equity                           181,148       180,406       176,182

    Total liabilities and equity           357,512       354,613       350,294

    [1] Restated for accounting policy change (see Note 2)


    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                         Equity attributable to Royal Dutch Shell
                                     plc shareholders
                              Shares
                       Share  held in  Other   Retained                  Non-     Total
        $ million     capital  trust  reserves earnings     Total    controlling equity
    At January 1,                                                      interest
    2013[1]               542 (2,287)  (3,752)  180,246       174,749    1,433  176,182
    Comprehensive
    income
    for the period          -       -    1,872   16,371        18,243       23   18,266
    Capital
    contributions
    from, and other
    changes
    in,
    non-controlling
    interest                -       -        -       18            18    (103)     (85)
    Dividends paid          -       -        - (11,338)      (11,338)    (252) (11,590)
    Scrip
    dividends[2]           12       -     (12)    4,140         4,140        -    4,140
    Repurchases of
    shares[3]            (12)       -       12  (5,757)       (5,757)        -  (5,757)
    Shares held in
    trust:
    net
    sales/(purchases)
    and dividends
    received                -     355        -      126           481        -      481
    Share-based
    compensation            -       -    (157)    (332)         (489)        -    (489)
    At December 31,
    2013                  542 (1,932)  (2,037)  183,474       180,047    1,101  181,148

    At January 1,
    2012[1]               536 (2,990)  (1,961)  162,895  158,480         1,486  159,966
    Comprehensive
    income for the
    period[1]               -       -  (2,242)   26,712   24,470           300   24,770
    Capital
    contributions
    from, and other
    changes
    in,
    non-controlling
    interest                -       -        -       39       39          (61)     (22)
    Dividends paid          -       -        - (10,955) (10,955)         (292) (11,247)
    Scrip
    dividends[2]            9       -      (9)    3,565    3,565             -    3,565
    Repurchases of
    shares[3]             (3)     - -        3  (1,728)  (1,728)             -  (1,728)
    Shares held in
    trust:
    net
    sales/(purchases)
    and dividends
    received                -     703        -      150      853             -      853
    Share-based
    compensation            -       -      457    (432)       25             -       25
    At December 31,
    2012[1]               542 (2,287)  (3,752)  180,246  174,749         1,433  176,182

    [1] Restated for accounting policy change (see Note 2)
    [2] Under the Scrip Dividend Programme some 125.6 million A shares, equivalent to
        $4.1 billion, were issued during 2013 and some 103.8 million A shares, equivalent
        to $3.6 billion, were issued during 2012.
    [3] Includes shares committed to repurchase and repurchases subject to settlement
        at the end of the period


    CONDENSED CONSOLIDATED statement of cash flows
            Quarters                    $ million                Full year
                        Q4
    Q4 2013  Q3 2013 2012[1]                                   2013   2012[1]

                              Cash flow from operating
                              activities
       1,822   4,737    6,756 Income for the period            16,526   26,960
                              Adjustment for:
       4,677   4,965    5,966 - Current taxation               18,582   22,722
         436     354      324 - Interest expense (net)          1,448    1,543
                              - Depreciation, depletion and
       5,629   4,153    3,835 amortisation                     21,509   14,615
        (87)    (38)  (2,083) - Net gains on sale of assets     (382)  (4,228)
                              - Decrease/(increase) in
     (1,682)     551      994 working capital                   2,988    3,391
                              - Share of profit of joint
     (2,024) (1,515)  (2,127) ventures and associates         (7,275)  (8,948)
                              - Dividends received from
       1,865   1,307    2,655 joint ventures and associates     7,117   10,573
                              - Deferred taxation,
                              retirement benefits,
                              decommissioning

       (938)   (907)    (422) and other provisions            (2,701)      341
       1,338     788      553 - Other                           2,937      201
                              Net cash from operating
      11,036  14,395   16,451 activities (pre-tax)             60,749   67,170

     (5,008) (3,986)  (6,538) Taxation paid                  (20,309) (21,030)

                              Net cash from operating
       6,028  10,409    9,913 activities                       40,440   46,140

                              Cash flow from investing
                              activities
    (14,508) (8,788) (10,674) Capital expenditure[2]         (40,145) (32,576)
                              Investments in joint ventures
       (523)   (352)    (217) and associates                  (1,538)  (3,028)
         432      79    1,513 Proceeds from sales of assets     1,212    6,346
                              Proceeds from sales of joint
         109     212      415 ventures and associates             538      698
           2    (63)     (30) Other investments (net)           (388)     (86)
          37      31       53 Interest received                   175      193
                              Net cash used in investing
    (14,451) (8,881)  (8,940) activities                     (40,146) (28,453)

                              Cash flow from
                              financing
                              activities
                              Net increase/(decrease) in
                              debt with maturity period

       3,239     124    (467) within three months               3,126    (165)
       4,366   4,402    1,813 Other debt: New borrowings        9,146    5,108
       (464)   (672)    (278) Repayments                      (6,877)  (4,960)
       (650)   (323)    (283) Interest paid                   (1,307)  (1,428)
                              Change in non-controlling
        (60)       8       25 interest                           (51)       23
                              Cash dividends paid to:
                              - Royal Dutch Shell plc
     (1,610) (1,637)  (1,634) shareholders                    (7,198)  (7,390)
        (36)   (136)     (26) - Non-controlling interest        (252)    (292)
       (996) (1,525)    (453) Repurchases of shares           (5,000)  (1,492)
                              Shares held in trust: net
                              (purchases)/sales and
          66   (189)     (43) dividends received                (565)     (34)
                              Net cash used in financing
       3,855      52  (1,346) activities                      (8,978) (10,630)

                              Currency translation
                              differences relating to cash
                              and

        (14)     158       84 cash equivalents                  (170)      201
                              (Decrease)/increase in cash
     (4,582)   1,738    (289) and cash equivalents            (8,854)    7,258

                              Cash and cash equivalents at
      14,278  12,540   18,839 beginning of period              18,550   11,292

                              Cash and cash equivalents at
       9,696  14,278   18,550 end of period                     9,696   18,550

    [1] Restated for accounting policy change (see Note 2)
    [2] See Note 6


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of preparation

The unaudited quarterly and full year Condensed Consolidated Financial Statements of Royal Dutch Shell plc and its subsidiaries (collectively known as Shell) have been prepared on the basis of the same accounting principles as, and should be read in conjunction with, the Annual Report and Form 20-F for the year ended December 31, 2012 (pages 103 to 108) as filed with the U.S. Securities and Exchange Commission, except as described below:

  1. Revised IAS 19 Employee Benefits was adopted on January 1, 2013, with retrospective effect (see Note 2).
  2. IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and revised standards IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures were adopted on January 1, 2013. The standards reinforce the principles for determining when an investor controls another entity and in certain cases amend the accounting for arrangements where an investor has joint control. The impact of the changes on the accounting for Shell's interests is not significant, hence comparative information was not restated; the major investments affected are listed in Note 3.
  3. IFRS 13 Fair Value Measurement was adopted on January 1, 2013, with prospective effect. The standard affects nearly all instances where assets and liabilities are currently recognised at fair value, primarily by refining the measurement concept to represent an asset or liability's exit value. The standard also introduces certain additional considerations to the measurement process and additional disclosures. The impact of the changes for Shell is not significant.

The financial information presented in these Condensed Consolidated Financial Statements does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006. Statutory accounts for the year ended December 31, 2012 were published in Shell's Annual Report and a copy delivered to the Registrar of Companies in England and Wales. The auditors' report on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.

Segment information

Segment earnings are presented on a current cost of supplies basis (CCS earnings). On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts.

Net capital investment is defined as capital expenditure as reported in the Condensed Consolidated Statement of Cash Flows, adjusted for: proceeds from disposals (excluding those in the Corporate segment relating to other investments); exploration expense excluding exploration wells written off; investments in joint ventures and associates; and leases and other items.

CCS earnings and net capital investment information are the dominant measures used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance.

2. Accounting for defined benefit plans

Revised IAS 19 Employee Benefits (IAS 19R) was adopted on January 1, 2013, with retrospective effect; comparative information is therefore restated.

The revised standard requires immediate recognition of actuarial gains and losses and return on assets arising in connection with defined benefit plans through other comprehensive income (see page 12). Previously, Shell applied the corridor method of accounting under which amounts falling inside the corridor remained unrecognised, while amounts falling outside it were recognised (amortised) in income over a number of years. For the periods presented in this Report, the elimination of this amortisation is approximately offset by lower interest income being recognised in income under the IAS 19R "net interest" approach. Under this approach, interest income from defined benefit plan assets is determined based on the same discount rate as applied to measure plan obligations, rather than on an expected rate of return reflecting the plan's investment portfolio.

The following table sets out the impact of the change on relevant lines in the Condensed Consolidated Balance Sheet, on gearing, and on the return on average capital employed (ROACE, see Note 5) for the twelve months ending December 31, 2012.

           $ million                          Dec 31, 2012
                                                  Effect of
                              As previously   accounting policy
                                 stated            change         Restated
    Non-current assets
    Deferred tax                        4,045               243         4,288
    Retirement benefits                12,575          (10,274)         2,301

    Non-current liabilities
    Deferred tax                       15,590           (5,278)        10,312
    Retirement benefits                 6,298             8,992        15,290

    Total equity
    Other reserves                     10,021          (13,773)       (3,752)
    Retained earnings                 180,218                28       180,246

    Gearing[1]                           9.2%              0.6%          9.8%

    ROACE                               12.7%              0.9%         13.6%

    [1] Net debt (total debt less cash and cash equivalents) as percentage
        of total capital (net debt plus equity)


The effect of the accounting policy change at January 1, 2012 was to reduce Accumulated other comprehensive income (within Other reserves) by $10,945 million, Retained earnings by $92 million and Total equity by $11,037 million.

Income for the fourth quarter 2012 increased by $57 million, of which Upstream segment earnings increased by $24 million, Downstream segment earnings increased by $27 million and Corporate segment earnings increased by $6 million. Basic and diluted earnings per share for the fourth quarter 2012 increased by $0.01. There was no impact on net cash from operating activities.

Income for the full year 2012 increased by $120 million, of which Upstream segment earnings increased by $82 million, Downstream segment earnings increased by $32 million and Corporate segment earnings increased by $6 million. Basic and diluted earnings per share for the full year 2012 increased by $0.02. There was no impact on net cash from operating activities.

3. Major investments in joint ventures and associates

Of the major investments in joint ventures and associates listed in the Annual Report and Form 20-F for the year ended December 31, 2012 (page 117), Aera, Deer Park and Saudi Aramco Shell Refinery have been assessed as joint operations under IFRS 11 Joint Arrangements (see Note 1b) and are no longer accounted for using the equity method as from January 1, 2013.

4. Impacts of accounting for derivatives

In the ordinary course of business Shell enters into contracts to supply or purchase oil and gas products, and also enters into derivative contracts to mitigate resulting economic exposures (generally price exposure). Derivative contracts are carried at period-end market price (fair value), with movements in fair value recognised in income for the period. Supply and purchase contracts entered into for operational purposes are, by contrast, recognised when the transaction occurs (see also below); furthermore, inventory is carried at historical cost or net realisable value, whichever is lower.

As a consequence, accounting mismatches occur because: (a) the supply or purchase transaction is recognised in a different period; or (b) the inventory is measured on a different basis.

In addition, certain UK gas contracts held by Upstream are, due to pricing or delivery conditions, deemed to contain embedded derivatives or written options and are also required to be carried at fair value even though they are entered into for operational purposes.

The accounting impacts of the aforementioned are reported as identified items in this Report.

5. Return on average capital employed

Return on average capital employed (ROACE) measures the efficiency of Shell's utilisation of the capital that it employs and is a common measure of business performance. In this calculation, ROACE is defined as the sum of income for the current and previous three quarters, adjusted for after-tax interest expense, as a percentage of the average capital employed for the same period. Capital employed consists of total equity, current debt and non-current debt. The tax rate is derived from calculations at the published segment level.

6. Acquisition of Repsol LNG businesses

On January 1, 2014, Shell completed the acquisition of part of Repsol S.A.'s LNG portfolio for a net cash purchase price of $3.8 billion, subject to post-closing adjustments. Of this amount, $3.4 billion was paid on December 31, 2013 (reflected within Trade and other receivables in the Condensed Consolidated Balance Sheet and within Capital expenditure in the Condensed Consolidated Statement of Cash Flows), with the balance settled on completion.

CAUTIONARY STATEMENT

All amounts shown throughout this Report are unaudited.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this document "Shell", "Shell group" and "Royal Dutch Shell" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. "Subsidiaries", "Shell subsidiaries" and "Shell companies" as used in this document refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Companies over which Shell has joint control are generally referred to as "joint ventures" and companies over which Shell has significant influence but neither control nor joint control are referred to as "associates". The term "Shell interest" is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This document contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook", "plan", "probably", "project", "risks", "schedule", "seek", "should", "target", "will" and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this document, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell's Form 20-F for the year ended December 31, 2012 (available at http://www.shell.com/investor and http://www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this document and should be considered by the reader. Each forward-looking statement speaks only as of the date of this document, January 30, 2014. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this document.

We may have used certain terms, such as resources, in this document that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website http://www.sec.gov. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

January 30, 2014

The information in this Report reflects the unaudited consolidated financial position and results of Royal Dutch Shell plc. Company No. 4366849, Registered Office: Shell Centre, London, SE1 7NA, England, UK.

Contacts:

- Investor Relations: International +31(0)70-377-4540; North America +1-713-241-1042

- Media: International +44(0)207-934-5550; USA +1-713-241-4544

SOURCE Royal Dutch Shell plc

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