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• | “Minority Holders” means, collectively, all of the holders of Royal Dutch Shares other than Royal Dutch Shell and Royal Dutch. | |
• | “Royal Dutch Shell” refers to Royal Dutch Shell plc, a public company incorporated in England and Wales. | |
• | “Royal Dutch” refers to N.V. Koninklijke Nederlandsche Petroleum Maatschappij (also known as Royal Dutch Petroleum Company), a company organized under the laws of The Netherlands. | |
• | “the Shell Group” means, collectively, Royal Dutch Shell and its subsidiaries and subsidiary undertakings. | |
• | “Shell Petroleum” refers to Shell Petroleum N.V., a company organized under the laws of The Netherlands. | |
• | “Shell Transport” refers to The Shell Transport and Trading Company Limited (previously known as The “Shell” Transport and Trading Company, p.l.c.), a company incorporated in England and Wales. | |
• | “SPCo” refers to The Shell Petroleum Company Limited, a company incorporated in England and Wales. | |
• | “U.S. dollars” or “$” refers to U.S. currency, “pounds sterling,” “£” or “pence” refers to UK currency, and “euro” or “€” refers to the currency established for participating member states of the European Union as of the beginning of stage three of the European Monetary Union on January 1, 1999. |
• | the failure to fulfill any conditions of, and/or the failure to obtain any necessary consents and approvals necessary in order to consummate, the Proposed Transaction; | |
• | the failure of the Proposed Transaction to achieve the expected benefits; | |
• | the costs related to the Proposed Transaction; and | |
• | other factors affecting the Shell Group’s businesses generally, including, but not limited to, price fluctuations in crude oil, natural gas and refined products, changes in demand for the Shell Group’s products, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, risks associated with the identification of suitable potential acquisition properties and targets and successful negotiation and consummation of such transactions, the risk of doing business in developing countries and countries subject to international sanctions, legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorization of reserves, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. |
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What is the Proposed Transaction? |
What effect will the Merger have on Royal Dutch and my Royal Dutch Shares? |
What will I receive for my Royal Dutch Shares? |
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Has Royal Dutch taken a position with respect to the Proposed Transaction? |
How will I receive the Merger Consideration? |
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What are the conditions to the Proposed Transaction? |
When is the EGM and when is the Proposed Transaction expected to be completed? |
What is the relationship between Royal Dutch Shell, Royal Dutch and Shell Petroleum? |
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How did Royal Dutch Shell acquire such Royal Dutch Shares? |
What is the purpose of the Proposed Transaction? |
Does Shell Petroleum have available the financial resources necessary to make payment for the outstanding Royal Dutch Shares? |
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How will U.S. shareholders be taxed for U.S. Federal income tax purposes? |
How will Dutch shareholders be taxed for Dutch tax purposes? |
Why am I receiving this Disclosure Document? |
Where can I obtain additional information? |
• | If your Royal Dutch Shares are held on the New York register, please contact The Bank of New York by telephone on +1 888 737 2377 or, if you are outside the United States, on +1 212 815 3700. | |
• | If you hold your Royal Dutch Shares through a financial institution affiliated with Euroclear Nederland or if you hold K-certificates, please contact your bank or broker or, alternatively, ABN AMRO Bank N.V. by telephone on +31 (0)20 383 6707 or by email at: prospectus@nl.abnamro.com. | |
• | If your Royal Dutch Shares are held in your name on the The Hague register, please contact N.V. Algemeen Nederlands Trustkantoor ANT by telephone on +31 (0)20 522 2510 or by email at: registers@ant-trust.nl. |
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Position of Royal Dutch on the fairness of the Proposed Transaction |
• | The fact that the Merger Consideration is equal to two times€26.103 (rounded up to the nearest euro cent), being the average Royal Dutch Shell Class A ordinary share closing price over the period July 20, 2005 to October 28, 2005, which results in premiums of 0.6% and 2.8% relative to two times the Royal Dutch Shell Class A ordinary share opening price and closing price, respectively, on Euronext Amsterdam on July 20, 2005, a 1.2% premium relative to the Royal Dutch Share closing price on Euronext Amsterdam on September 30, 2005 (the last day of exchange trading of Royal Dutch Shares before the Merger Consideration was set), and a 7.3% premium to the average Royal Dutch Share closing price over the period January 1 to September 30, 2005 (it also reflects premiums of 20.7% and 11.2% to the average of the prices at which Royal Dutch Shares were repurchased since the beginning of 2004 and in 2005, respectively, as noted by ABN AMRO). The Board noted the advice of De Brauw, described above, that under Dutch law the Board should be satisfied that the Minority Holders are treated reasonably. In this connection, the Board concluded that the trading price of the Royal Dutch Shell shares is a highly objective proxy for valuing the underlying enterprise (so long as all material price sensitive information has been disclosed to the market). In reaching that conclusion, the Board considered that (i) 98.5% of the |
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Royal Dutch shareholders who tendered their Royal Dutch Shares in the Exchange Offer received Royal Dutch Shell Class A ordinary shares, (ii) shareholders of Royal Dutch and Royal Dutch Shell hold an interest in the same economic entity, (iii) the historic share price development of Royal Dutch is broadly in line with the historic share price development of Royal Dutch Shell, and (iv) Royal Dutch Shell is a very large listed company, well covered by equity analysts, with a diversified shareholder base and with highly liquid shares. The Board also considered that the Royal Dutch Shell Class A ordinary shares are a better proxy for underlying value than the Class B ordinary shares because although Royal Dutch Shell Class A and Class B ordinary shares hold the same economic interest in the Shell Group, the difference in market prices between these two classes of shares is likely attributable to the dividend access scheme, created for tax purposes, in which holders of Royal Dutch Shell Class B ordinary shares participate, and in which holders of Royal Dutch Shell Class A ordinary shares and Royal Dutch Shares do not participate. The Board also noted that Royal Dutch Shares represent only 1.5% of the equity of Royal Dutch and do not have the ability to affect the outcome of any matter put to a vote of shareholders of Royal Dutch and so should not command any “control” or “strategic” premium. It was noted that this is supported by the fact that during the period beginning after August 9, 2005 (when the subsequent offer acceptance period under the Exchange Offer ended) through September 30, 2005 (the last day of exchange trading of Royal Dutch Shares before the Merger Consideration was set), the Royal Dutch Shares largely traded at a discount to two Royal Dutch Shell Class A ordinary shares. It was also noted that the Merger would not result in any synergies that would justify a material premium over market prices. | ||
• | The fact that the Merger Consideration reflects the highest of the pricing formulas considered under the pricing methodology and reflects a 2:1 ratio based on closing market prices on Euronext Amsterdam. The Board considered that this approach provided the Minority Holders the benefit of increases in the trading price of the Royal Dutch Shell Class A ordinary shares over both longer and shorter periods since July 20, 2005 and allowed for the amount of the Merger Consideration to reflect any market reaction to the information contained in the 2005 third quarter results announcement. It is also consistent with the Dutch legal advice regarding Dutch statutory squeeze out proceedings received from De Brauw as described above. The Board also noted that the 2:1 ratio reflects the ratio of the Exchange Offer (although Royal Dutch Shares have largely traded at a discount to this ratio after August 9, 2005). The Board determined to use Euronext Amsterdam as the reference market because the greatest volume of Royal Dutch Shell Class A ordinary shares is traded on Euronext Amsterdam, noting also that Euronext Amsterdam uses an auction at market close (the result of which is published), which is judged to be more transparent to non-market participants than other metrics such as volume weighted average prices. | |
• | The fact that Royal Dutch Shell has resolved to initiate statutory squeeze out proceedings in relation to Royal Dutch, if for any reason it should be impossible to complete the Merger (Royal Dutch Shell, as the owner of more than 95% of the share capital of Royal Dutch, has the right to implement such proceedings without the consent of Royal Dutch), and the advice of De Brauw, noted above, that a Dutch court would likely award cash consideration equivalent to the cash value per share of the Exchange Offer as of the close of the Exchange Offer, with consideration as to whether there is a change of circumstances in the intervening time period to the time at which the Board determines the Exchange Ratio, and that squeeze out proceedings would likely take considerably longer to complete than the Merger. Accordingly, the Board determined that the Merger would allow the Minority Holders to receive cash for their Royal Dutch Shares more quickly and more efficiently than through statutory squeeze out proceedings. | |
• | The fact that Minority Holders on the applicable record date will receive the Royal Dutch interim dividend for the third quarter of 2005 of€0.46 per share (or $0.5556 per share for holders of New York registered shares) which will be payable on December 15, 2005, and that the Merger Consideration was set based on trading prices that included the expected quarterly dividend. The Board also noted that, as in Dutch statutory squeeze out proceedings, the terms of the Merger provide (a) for interest to accrue on the Merger Consideration at the statutory rate of 4% per annum from October 31, 2005 until the effective date of the Merger (expected to be December 21, 2005), as part of the consideration under the Merger, and (b) for any dividends payable in that period (before the deduction of any withholding tax from such dividend) to be deducted from that interest amount. |
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• | The fact that the Proposed Transaction would allow for eligible UK resident holders to have the option to elect to receive exchangeable loan notes, which, under provisions of UK law, would allow for a rollover of UK capital gains tax, and that this election would not be available in a statutory squeeze out proceeding. | |
• | The terms and conditions of the Implementation Agreement, including the requirements for an extraordinary general meeting and the other requirements of Dutch law relating to the establishment of the Exchange Ratio and the Merger Consideration pursuant thereto. In connection with its evaluation of the Exchange Ratio and the Merger Consideration pursuant thereto, the Board of Royal Dutch noted that a reclassification of shares would occur in connection with the election by eligible UK resident Minority Holders to receive loan notes but was not otherwise expected to have any ultimate substantive effect on Royal Dutch shareholders. | |
• | The two written opinions dated October 31, 2005 of ABN AMRO to the Board of Royal Dutch to the effect that, based upon and subject to the matters considered, assumptions used and qualifications set forth therein, (i) as at October 31, 2005, the Exchange Ratio and the Merger Consideration pursuant thereto are fair, from a financial point of view, to the Minority Holders who will receive the Merger Consideration in the Merger, and (ii) the value of the exchangeable loan notes to be offered to eligible UK resident Minority Holders, when issued, will not be greater than the value of the Merger Consideration to be paid to the Minority Holders under the terms of the Merger. | |
• | The certifications and reports delivered by Deloitte and E&Y, pursuant to and in accordance with Dutch legal requirements, that (i) the Exchange Ratio is reasonable, (ii) the equity of Royal Dutch as of September 30, 2005 was at least equal to the nominal value of the aggregate number of the shares to be allotted by Shell Petroleum pursuant to the Exchange Ratio, plus the cash payments and loan notes issued for fractional entitlements represented by the Merger Consideration. |
• | The fact that the Minority Holders receiving the Merger Consideration would not have a continuing interest in the Shell Group. However, this factor was considered mitigated by the fact that in a statutory squeeze out proceeding, which Royal Dutch Shell intends to implement if the Proposed Transaction is not completed, Minority Holders would also not have any continuing interest in the Shell Group. It was also mitigated by the fact that holders had the opportunity to participate in the Exchange Offer and were advised in connection with the Exchange Offer that Royal Dutch Shell intended to acquire 100% of the Royal Dutch Shares by means of a squeeze out proceeding or other transaction. | |
• | The fact that the Proposed Transaction would be taxable in a number of jurisdictions for Minority Holders receiving the Merger Consideration. However, this was considered mitigated by the fact that Minority Holders will be entitled to receive cash payments for their Royal Dutch Shares. | |
• | The fact that the Proposed Transaction would not require a separate vote of the unaffiliated shareholders. However, this factor was considered mitigated by the fact that a financial advisor to Royal Dutch had provided an opinion with respect to the fairness, from a financial point of view, of the Exchange Ratio and the Merger Consideration pursuant thereto and that Dutch law does not require such a vote. | |
• | The fact that loan notes would only be offered to eligible UK residents giving appropriate representations. However, this was considered mitigated by the fact that the Board of Royal Dutch had received an opinion of ABN AMRO to the effect that, based upon and subject to matters considered, assumptions used and qualifications set forth therein, the value of the exchangeable loan notes to be offered to eligible UK resident Minority Holders, when issued, will not be greater than the value of the Merger Consideration to be paid to the Minority Holders under the terms of the Merger. The Board also noted that as a result of the two share limit, the market value of the consideration received on exchange will be less than the face amount of the loan notes unless the Royal Dutch Shell Class A ordinary shares are trading above the sterling equivalent of€26.1050 (being one-half of the Merger Consideration of€52.21) at the time of exchange (the sterling equivalent value being set based on the euro/sterling exchange rate on the day prior to the effective date of the Merger). It was noted that Royal Dutch was not aware of any other jurisdiction apart from the UK where Minority Holders are resident and a loan note would provide a comparable |
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benefit. Therefore, given the above, it was not anticipated that loan notes would be attractive to holders outside the UK. It was also noted that an offer of loan notes in some countries (including the U.S. and The Netherlands) would require the preparation of a prospectus or other regulatory compliance that would involve additional time and expense. | ||
• | The fact that under Dutch law the amount of the Exchange Ratio and the Merger Consideration pursuant thereto must be determined no later than on the date of signing of the Merger Proposal (October 31, 2005), and cannot be adjusted prior to the effective date of the Merger (which is expected to be December 21, 2005). It was noted that this may be adverse to the Minority Holders if the price of Royal Dutch Shell Shares increases during that period, however, this was considered mitigated as Minority Holders are also insulated against decreases in the Royal Dutch Shell share price during that period. |
• | The fact that the Merger will complete the unification of Royal Dutch and Shell Transport under Royal Dutch Shell as contemplated by the Unification Transaction and follows the successful Exchange Offer in which holders of 98.5% of Royal Dutch Shares participated and received Royal Dutch Shell shares, and the fact that the Merger will allow Royal Dutch Shell to acquire 100% of the interests in Royal Dutch as contemplated in the Unification Transaction, on a basis that is likely to be less time consuming and procedurally more efficient than the implementation of statutory squeeze out proceedings under Dutch law. | |
• | The fact that the Proposed Transaction will achieve governance, management, and fiscal efficiencies for the Shell Group because it will (i) simplify the organizational structure of the Shell Group and eliminate the potential investor confusion of having, and the duplicative and administrative burdens associated with maintaining, two publicly held holding companies in the Shell Group, and (ii) allow the Shell Group to realize overall tax efficiencies for 2005 and thereafter by unifying the Dutch tax resident companies into one Dutch fiscal group and the UK tax resident companies into another fiscal group and, in particular, the completion of the Merger in 2005 allows for tax consolidation of Royal Dutch and Shell Petroleum under Dutch law from January 1, 2005. |
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Positions of Royal Dutch Shell and Shell Petroleum on fairness to the Minority Holders |
(c) | Alternatives Considered |
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4. | Certain Opinions and Reports |
(i) Opinion with respect to the fairness, from a financial point of view, of the Exchange Ratio and the Merger Consideration pursuant thereto to the Minority Holders receiving the Merger Consideration |
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• | reviewed certain publicly available business and financial information relating to Royal Dutch, including the audited annual financial statements (the “annual accounts”) for the consecutive financial years ending December 31, 1999 through December 31, 2004 and the unaudited nine-month financial figures for the period ending September 30, 2005; | |
• | reviewed certain publicly available business and financial information relating to Shell Transport, including the audited annual accounts for the consecutive financial years ending December 31, 1999 through December 31, 2004 and the unaudited nine-month financial figures for the period ending September 30, 2005 as prepared for the purposes of the Proposed Transaction; | |
• | reviewed certain publicly available business and financial information relating to Royal Dutch Shell, including the audited annual accounts for the consecutive financial years ending December 31, 2002 through December 31, 2004 and the unaudited nine-month financial figures for the period ending September 30, 2005; | |
• | reviewed certain documents relating to the Proposed Transaction and the Unification Transaction, including among other things the pricing methodology approved by the Boards of Royal Dutch Shell, Royal Dutch and Shell Petroleum; | |
• | participated in discussions with and reviewed information provided by management and employees of Royal Dutch Shell and Royal Dutch and their advisers with respect to matters ABN AMRO believed necessary or appropriate for its enquiry; | |
• | reviewed the historical share prices and trading volumes of Royal Dutch Shell shares, Royal Dutch Shares and Shell Transport shares; | |
• | reviewed publicly available data regarding share buybacks of Royal Dutch Shell, Royal Dutch and Shell Transport; | |
• | reviewed the financial terms of certain transactions ABN AMRO believed to be comparable to the Proposed Transaction; | |
• | reviewed the legal review on the typical price determination in a squeeze out proceeding under Dutch law by the Court of Appeal in The Netherlands provided to Royal Dutch Shell by De Brauw, Dutch legal counsel to Royal Dutch, Royal Dutch Shell and Shell Petroleum, which was reviewed and concurred with by Freshfields Bruckhaus Deringer (“Freshfields”), Dutch legal counsel to ABN AMRO; | |
• | reviewed publicly available data regarding the market practice of settlement of fractional entitlements; and |
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• | performed such other financial reviews and analysis, as ABN AMRO, in its absolute discretion, deemed appropriate. |
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• | ABN AMRO analyzed the value that would be attributable to the Minority Holders (before payment of fractional entitlements) in the Proposed Transaction based on their economic interest in the Shell Group. | |
In particular ABN AMRO performed an analysis to establish that the Proposed Transaction does not alter the current economic interest of the Minority Holders in the Shell Group (before payment of fractional entitlements). ABN AMRO also analyzed market practice with respect to determining the cash value of fractional entitlements. In addition, ABN AMRO conducted an analysis to determine whether the market price of Royal Dutch Shares can be used as an indication of the going concern value of the Shell Group and of Royal Dutch. | ||
• | ABN AMRO analyzed the consideration typically paid to minority shareholders under Dutch legal squeeze out proceedings. Given that Royal Dutch Shell has decided to implement the Merger as it is likely to be less time consuming and procedurally more efficient than statutory squeeze out proceedings under Dutch law, and given also that Royal Dutch Shell has advised Royal Dutch that if the Proposed Transaction is not completed as proposed, it intends to implement squeeze out proceedings, ABN AMRO have considered how a Dutch court would typically determine the price payable to minority shareholders in squeeze out proceedings under Dutch law. | |
• | ABN AMRO analyzed the consideration paid in precedent unification transactions. | |
• | ABN AMRO compared the Merger Consideration to the Royal Dutch Share price and net asset value per Royal Dutch Share. |
Analysis of the value which would be attributable to the Minority Holders of Royal Dutch based on the economic interest that they have in the Shell Group |
Historic dividend receipts and payments |
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Historic share buyback programs |
Historic trading relationship |
Value Residing in the Parent Companies |
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DSM N.V. — Gist Brocades N.V., 1998
Getronics N.V. — Pink Roccade N.V., 2004
Koninklijke KPN N.V. — SNT Group N.V., 2004
Modex Therapeutics S.A. — Isotis N.V., 2002
NH Hoteles S.A. — Krasnapolsky Hotels and Restaurants N.V., 2000
Pink Roccade N.V. — TAS Groep N.V., 2000
Rodamco Europe N.V. — Rodamco Retail Nederland B.V., 2001
Telefonica S.A. — Endemol Entertainment Holding N.V., 2000
Epicor Software Corporation — Scala Business Solution N.V., 2003
Tiscali S.p.A. — WorldOnline International N.V., 2000
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Analysis of the consideration that is typically paid to minority shareholders under Dutch legal squeeze out proceedings. |
• | transactions where squeeze outs were preceded by cash offers with regard to the decision of the court regarding the price, the date upon which this price was based and any adjustments of this price; | |
• | transactions where squeeze outs were preceded by share exchange offers with regard to the consideration paid to the relevant minority shareholders; | |
• | legal advice on the likely outcome of the price determination by the Court of Appeal as provided by De Brauw to Royal Dutch Shell, Royal Dutch and Shell Petroleum, and subsequently reviewed and concurred with by Freshfields. |
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• | the target company had a Dutch statutory seat; | |
• | the squeeze out was performed under Dutch law; | |
• | the offer and the subsequent squeeze out proceedings were completed; | |
• | the squeeze out proceedings or the exchange offer took place in the last five years. |
Analysis of the consideration paid to minority shareholders in precedent unification transactions |
ABB Ltd., 1999 | |
Dexia SA, 1996 | |
Merita Nordbanken plc, 1999 |
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Comparison of the Merger Consideration to the historical Royal Dutch Share price and net asset value per Royal Dutch Share |
(ii) Opinion with respect to whether or not the value of the Loan Note Consideration, when issued, will be greater than the value of the Merger Consideration |
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• | reviewed the form of the loan note deed (the “Loan Note Deed”) included as an exhibit to the joint proposal which sets forth the terms of the Merger and which has been approved by each of the Boards of Royal Dutch and Shell Petroleum (the “Merger Proposal”); | |
• | reviewed the loan note document and election forms which are being separately made available to eligible UK resident Minority Holders; | |
• | reviewed certain other documents relating to both the Unification Transaction and the Proposed Transaction; | |
• | participated in discussions with and reviewed information provided by Royal Dutch Shell, Royal Dutch and its advisers with respect to matters ABN AMRO believed necessary or appropriate to its enquiry; and | |
• | performed such other financial reviews and analysis as ABN AMRO, in its absolute discretion, deemed appropriate. |
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Analysis of the various price scenarios of the underlying Royal Dutch Shell Class A ordinary shares |
• | Market Price of Royal Dutch Shell Class A ordinary shares greater than the Base Price: In this scenario, the holder of a loan note would receive, on the date of exchange, less than two Royal Dutch Shell Class A ordinary shares. Fractions of Royal Dutch Shell Class A ordinary shares would be paid in cash. The aggregate value of such shares plus any fractions paid in cash would be equal to the principal amount of the loan note, which in turn would be equal to two times the Base Price. | |
• | Market Price of Royal Dutch Shell Class A ordinary shares less than the Base Price: In this scenario, the holder of a loan note would receive, on the date of exchange, two Royal Dutch Shell Class A ordinary shares. The aggregate value of such shares would be less than the principal amount of the loan note and therefore less than two times the Base Price. | |
• | Market Price of Royal Dutch Shell Class A ordinary shares equal to the Base Price: In this scenario, the holder of a loan note would receive, on the date of exchange, two Royal Dutch Shell Class A ordinary shares. The aggregate value of such shares would be equal to the principal amount of the loan note, which in turn would be equal to two times the Base Price. |
Analysis of the loan note value by disaggregation into, and valuation of, its hypothetical component parts |
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(iii) General |
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5. | Intentions of Royal Dutch Shell with Regard to Royal Dutch and Shell Petroleum |
• | any extraordinary corporate transaction involving Shell Petroleum after the completion of the Proposed Transaction; | |
• | any sale or transfer of a material amount of assets currently held by Royal Dutch after the completion of the Proposed Transaction; | |
• | any change in the board of directors or management of Shell Petroleum; or | |
• | any material change in Shell Petroleum’s dividend policy, indebtedness, capitalization, corporate structure or business after the completion of the Proposed Transaction. |
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1. | Description of Royal Dutch Shell and Shell Petroleum |
• | Exploration & Production: Searching for, finding and producing crude oil and natural gas. Building and operating the infrastructure needed to deliver hydrocarbons to market. | |
• | Gas & Power: Liquefying and transporting natural gas, developing gas markets and infrastructure including gas-fired power plants and engaging in the marketing and trading of natural gas and electricity. Converting natural gas to liquids to provide clean fuels. | |
• | Oil Products: Marketing transportation fuels, lubricants and specialty products. Refining, supplying, trading and shipping crude oil and petroleum products. | |
• | Chemicals: Producing and selling petrochemicals to industrial customers globally. | |
• | Other industry segments comprise technical consultancy services, Shell Renewables and Hydrogen. |
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2. | Description of Royal Dutch and the Royal Dutch Shares |
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NYSE (in U.S. dollars) | |||||||||
Calendar Year | High | Low | |||||||
2003 | |||||||||
First Quarter | 46.88 | 36.69 | |||||||
Second Quarter | 49.81 | 40.56 | |||||||
Third Quarter | 46.79 | 42.84 | |||||||
Fourth Quarter | 52.70 | 43.95 | |||||||
2004 | |||||||||
First Quarter | 54.00 | 45.79 | |||||||
Second Quarter | 53.24 | 47.48 | |||||||
Third Quarter | 53.82 | 48.94 | |||||||
Fourth Quarter | 57.79 | 51.63 | |||||||
2005 | |||||||||
First Quarter | 65.11 | 55.37 | |||||||
Second Quarter | 66.29 | 56.28 | |||||||
Third Quarter | 67.45 | 59.65 | |||||||
Fourth Quarter (October 31 to November 11, 2005) | 62.79 | 60.68 |
Euronext Amsterdam (in euro) | |||||||||
Calendar Year | High | Low | |||||||
2003 | |||||||||
First Quarter | 44.58 | 33.35 | |||||||
Second Quarter | 42.15 | 36.56 | |||||||
Third Quarter | 42.09 | 37.45 | |||||||
Fourth Quarter | 41.85 | 37.01 | |||||||
2004 | |||||||||
First Quarter | 42.43 | 36.59 | |||||||
Second Quarter | 43.94 | 38.02 | |||||||
Third Quarter | 43.63 | 39.96 | |||||||
Fourth Quarter | 44.03 | 41.17 | |||||||
2005 | |||||||||
First Quarter | 49.33 | 41.84 | |||||||
Second Quarter | 54.90 | 44.66 | |||||||
Third Quarter | 56.75 | 48.00 |
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Dividend | U.S. $ | ||||||||
Dates | (€) | equivalent* | |||||||
2003 | |||||||||
May 6 (Final Dividend for 2002) | 1.00 | 1.10 | |||||||
September 17 (Interim Dividend for 2003) | 0.74 | 0.85 | |||||||
2004 | |||||||||
May 6 (Second Interim Dividend for 2003) | 1.02 | 1.21 | |||||||
September 15 (Interim Dividend for 2004) | 0.75 | 0.90 | |||||||
2005 | |||||||||
March 15 (Second Interim Dividend for 2004) | 1.04 | 1.33 | |||||||
June 15 (First Interim Dividend for 2005) | 0.46 | 0.59 | |||||||
September 15 (Second Interim Dividend for 2005) | 0.46 | 0.55 | |||||||
December 15 (Third Interim Dividend for 2005 — payable on December 15, 2005) | 0.46 | 0.56 |
* | Rounded to two decimal places. |
Shares | Low | High | Average | ||||||||||||||
Purchased | Price € | Price € | Price € | ||||||||||||||
2003 | |||||||||||||||||
Fourth Quarter | 464 | 31.44 | 31.44 | 31.44 | |||||||||||||
2004 | |||||||||||||||||
First Quarter | — | — | — | — | |||||||||||||
Second Quarter | 8,002,000 | 40.78 | 41.92 | 41.36 | |||||||||||||
Third Quarter | 13,270,000 | 40.08 | 42.78 | 41.12 | |||||||||||||
Fourth Quarter | — | — | — | — | |||||||||||||
2005 | |||||||||||||||||
First Quarter | 4,880,000 | 45.42 | 48.59 | 46.94 | |||||||||||||
Total | 26,152,464 | 31.44 | 48.59 | 42.28 |
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Year ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Ratio of earnings to fixed charges(a)(U.S. GAAP basis) | 21.64 | 15.58 | 11.45 |
Nine months ended | ||||||||||||
September 30, 2005 | ||||||||||||
Ratio of earnings to fixed charges(a)(IFRS) | 24.07 | |||||||||||
Ratio of earnings to fixed charges(a)(U.S. GAAP) | 27.81 |
(a) | For the purposes of this table, “earnings” consists of pre-tax income from continuing operations before adjustment for minority interest and income from equity investees plus fixed charges (excluding capitalized interest) less undistributed earnings of equity investees, plus distributed income from equity interests. “Fixed charges” consists of expensed and capitalized interest plus interest within rental expenses plus preference security dividend requirements of consolidated subsidiaries. |
4. | Interest of the Filing Companies in Royal Dutch |
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(a) Shell Transport will receive newly issued bonus shares in SPCo and Royal Dutch shall consent and take other necessary actions to allow Shell Transport to be registered as holder of such shares. As consideration for Royal Dutch consenting and taking such actions, Shell Transport will transfer to Royal Dutch the entire interest in Shell Petroleum held by Shell Transport (other than four B shares that Shell Transport will retain for U.S. tax purposes); | |
(b) Royal Dutch will issue new Royal Dutch Shares to Royal Dutch Shell and, in consideration for such issue, Royal Dutch Shell shall contribute to Royal Dutch all of its shares in Shell Transport; | |
(c) Royal Dutch will contribute its remaining SPCo shares to its subsidiary Shell Transport; and | |
(d) upon completion of the above steps, Shell Petroleum and Royal Dutch will effect the Merger, following which Shell Petroleum will be the surviving entity and Royal Dutch and the Royal Dutch Shares will cease to exist. |
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2. | Conditions to the Proposed Transaction |
• | an accountants statement pursuant to article 2:94b(2) of the Dutch Civil Code relating to the value of Shell Transport in relation to the contribution of the entire issued ordinary share capital of Shell Transport to Royal Dutch having been received; | |
• | no enforcement proceedings related to the Schedule 13E-3, of which this Disclosure Document forms a part, together with the exhibits thereto (the “Schedule 13E-3”), having been initiated or threatened by the SEC and this Disclosure Document having been provided to Royal Dutch shareholders no less than 20 days prior to the EGM in accordance with Rule 13e-3 under the Exchange Act; | |
• | Royal Dutch and Shell Petroleum having obtained (i) written confirmation from the trade register in The Hague that the Merger Proposal and the certain other documents required to be filed under Dutch law have been on file for public inspection for a period of one month and (ii) evidence that no petition (as described in article 2:316 (2) of the Dutch Civil Code) has been filed, or that all such petitions have been withdrawn or dismissed by the Court; | |
• | the EGM having adopted resolutions to (i) approve the Unwind, (ii) issue 1,379,680,000 shares to Royal Dutch Shell against the contribution in kind of the entire issued ordinary share capital of Shell Transport, (iii) amend the articles of association of Royal Dutch in two steps and (iv) to merge Royal Dutch with Shell Petroleum as described in the Merger Proposal; | |
• | a declaration of no objection having been received from the Dutch Ministry of Justice in respect of the proposed amendments of the articles of association of Royal Dutch; | |
• | Royal Dutch having provided to SPCo a consent for the issue of 1,262,361,568 bonus shares by SPCo to Shell Transport and having signed the requisite written resolutions; | |
• | the general meeting of shareholders of Shell Petroleum having resolved to amend the articles of association of Shell Petroleum and a declaration of no objection having been received from the Dutch Ministry of Justice in respect of the proposed amendment of the articles of association of Shell Petroleum; | |
• | the board of management of Shell Petroleum having resolved upon the merger with Royal Dutch as described in the Merger Proposal; | |
• | Royal Dutch Shell certifying in writing that certain of the above conditions have been satisfied; and | |
• | a notarial deed containing the minutes of the general meeting of shareholders of Royal Dutch having been drawn up. |
3. | Source and Amount of Funds |
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4. | Transaction Expenses |
Filing | $ | 229,535 | |||
Legal | 4,600,000 | ||||
Accounting | 450,000 | ||||
Printing | 100,000 | ||||
Fees relating to fairness reports and opinions | 1,200,000 | ||||
Miscellaneous | 1,600,000 | ||||
Total | $ | 8,179,535 | |||
1. | Material U.S. Federal Income Tax Consequences of the Proposed Transaction |
General |
• | a citizen or resident of the United States; | |
• | a corporation, or other entity taxable as a corporation, created or organized under the laws of the United States or any of its political subdivisions; | |
• | a trust, if (i) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. fiduciaries have the authority to control all substantial decisions of the trust or (ii) the trust has made a valid election under applicable U.S. Treasury regulations to be treated as a U.S. person; or | |
• | an estate that is subject to U.S. Federal income tax on its income regardless of its source. |
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• | insurance companies; | |
• | tax-exempt organizations; | |
• | dealers in securities or foreign currency; | |
• | banks or trusts; | |
• | persons that hold their Royal Dutch Shares as part of a straddle, a hedge against currency risk or a constructive sale or conversion transaction; | |
• | holders that have a functional currency other than the U.S. dollar; | |
• | investors in pass-through entities; | |
• | shareholders who acquired their Royal Dutch Shares through the exercise of options, or otherwise as compensation or through a tax-qualified retirement plan; or | |
• | holders of options granted under any Royal Dutch benefit plan. |
Taxation of the Proposed Transaction |
United States Backup Withholding and Information Reporting |
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Withholding tax on Proposed Transaction |
Dutch taxes on income and capital gains |
Residents of The Netherlands |
(A) individuals who are resident or deemed to be resident in The Netherlands for purposes of Dutch taxation; | |
(B) individuals who opt to be treated as a resident in The Netherlands for purposes of Dutch taxation ((A) and (B) jointly “Dutch Individuals”); and | |
(C) entities (“Dutch Corporate Entities”) that are subject to the Dutch Corporate Income Tax Act 1969 (“CITA”) and are resident or deemed to be resident of The Netherlands for the purposes of the CITA, excluding: |
• | pension funds (pensioenfondsen) and other entities that are exempt from Dutch corporate income tax; | |
• | entities which are entitled to the participation exemption with respect to the “A” Shares and/or “B” Shares based on article 13, CITA; and | |
• | investment institutions (beleggingsinstellingen) as defined in article 28, CITA. |
Dutch Individuals not engaged or deemed to be engaged in an enterprise or receiving benefits from miscellaneous activities |
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Dutch Individuals engaged or deemed to be engaged in an enterprise or receiving benefits from miscellaneous activities |
Dutch Corporate Entities |
Non-residents of The Netherlands |
(a) such holder derives profits from an enterprise, whether as entrepreneur (ondernemer) or pursuant to a co-entitlement to the net worth of such enterprise, other than as an entrepreneur or a shareholder which enterprise is, in whole or in part, carried on through a permanent establishment (vaste inrichting) or a permanent representative (vaste vertegenwoordiger) in The Netherlands to which the Royal Dutch Shares are attributable; or | |
(b) the holder is an individual and derives benefits from miscellaneous activities (resultaat uit overige werkzaamheden) performed in The Netherlands in respect of the Royal Dutch Shares, including, without limitation, activities which are beyond the scope of active portfolio investment activities. |
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Name, Citizenship, Positions | Present Principal Occupation | |||
at Filing Companies | or Employment* | Five Year Employment History | ||
Aad Jacobs The Netherlands Non-Executive Chairman of Royal Dutch Shell Non-Executive Chairman of Royal Dutch | Non-Executive Chairman of the Board of Directors of Royal Dutch Shell | He was appointed a member of the Royal Dutch supervisory board in 1998 and Chairman of the Royal Dutch supervisory board (currently Non-Executive Chairman) in 2002 and Non-Executive Chairman of the Royal Dutch Shell Board of Directors in 2004. He has been Chairman of the supervisory boards of Joh. Enschedé B.V., which engages in printing commercial and confidential documents, since 1998, Imtech N.V., which provides technical services in the fields of information & communication technology and electrical & mechanical engineering, since 2001 and VNU N.V., a global information and media company, since 1998; Vice-Chairman of the supervisory boards of Buhrmann N.V., which supplies office products to businesses and institutions, since 1998 and SBM Offshore (formerly IHC Caland N.V.), which engages as a supplier to the offshore oil and gas industry, since 1998; and a member of the supervisory board of ING Groep N.V., a financial services company, since 1998. | ||
Lord Kerr of Kinlochard Britain Deputy Chairman and Senior Independent Non-Executive Director of Royal Dutch Shell | Deputy Chairman of the Board of Directors and Senior Independent Non-Executive Director of Royal Dutch Shell | He was a Non-Executive Director of Shell Transport from 2002 to 2005 and has been Deputy Chairman and Senior Independent Non-Executive Director of Royal Dutch Shell in 2004. Previously, he served in various jobs in the UK Diplomatic Service from 1966 to 2002, including as UK Permanent Representative to the European Union, British Ambassador to the U.S., Foreign Office, Permanent Under Secretary of State and Head of the UK Diplomatic Service. On leaving government service he was appointed Secretary-General of the European Convention from 2002 to 2003. A member of the House of Lords since 2004 and Chairman of the Court and Council of Imperial College, London, he has been a trustee and Deputy Chairman of the National Gallery since 2002 and a trustee of the Rhodes Trust since 1997. He has been a non-executive Director of Rio Tinto plc and Rio Tinto Limited (both engaged in finding, mining and processing mineral resources) since 2003 and Scottish American Investment Company plc, an investment company, since 2002. |
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Name, Citizenship, Positions | Present Principal Occupation | |||
at Filing Companies | or Employment* | Five Year Employment History | ||
Jeroen van der Veer The Netherlands Chief Executive of Royal Dutch Shell Principal Director of Shell Petroleum Chief Executive of Royal Dutch | Chief Executive of Royal Dutch Shell | He was appointed President (currently Chief Executive) of Royal Dutch in 2000, having been a Managing Director since 1997. He was appointed Chairman of the Committee of Managing Directors of the Shell Group in March 2004 and Chief Executive of Royal Dutch Shell in 2004. He has also been a non-executive director of Unilever (which includes Unilever N.V., Unilever plc and Unilever Holdings Ltd and engages in the worldwide manufacture and supply of consumer goods) since 2002. He was a member of the supervisory board of De Nederlandsche Bank N.V. (The Netherlands central bank) from 2000 to 2004. | ||
Peter Voser Switzerland Chief Financial Officer of Royal Dutch Shell Principal Director of Shell Petroleum | Chief Financial Officer of Royal Dutch Shell | He was employed from 1982 to March 2002 by the Shell Group in a variety of finance and business roles in Switzerland, the UK, Argentina and Chile, including Group Chief Internal Auditor of the Shell Group, Chief Financial Officer of Shell Europe Oil Products and Chief Financial Officer of Shell International Oil Products. He was appointed Managing Director of Shell Transport, a Group Managing Director and Chief Financial Officer and an Executive Director of Royal Dutch Shell with effect from October 2004. From March 2002 until September 2004, he was Chief Finance Officer and Member of the Group executive committee of the Asea Brown Boveri group of companies, based in Switzerland and engaged in the energy and automation business areas. He has been a member of the supervisory board of Aegon N.V., which is engaged in the insurance business, since 2004, UBS AG, a financial services firm, since 2005 and was a member of the Swiss-American Chamber of Commerce from 2003 to 2004. | ||
Malcolm Brinded Britain Executive Director, Exploration and Production of Royal Dutch Shell Principal Director of Shell Petroleum | Executive Director, Exploration and Production, of Royal Dutch Shell | He joined the Shell Group in 1974 and has held various positions around the world. He was Country Chair for the Shell Group in the UK from 1999 to 2002 and Director of Planning, Environment and External Affairs at Shell International Ltd. from 2001 to 2002. He was a Managing Director of Royal Dutch from 2002 to 2005. In March 2004, he was appointed a Director and Managing Director of Shell Transport and became Vice-Chairman of the Committee of Managing Directors and in 2004 became an Executive Director of Royal Dutch Shell. He co-chaired the UK Industry Leadership Team from 1998 to 2001, covering all UK upstream industry operators, contractors and suppliers. |
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Name, Citizenship, Positions | Present Principal Occupation | |||
at Filing Companies | or Employment* | Five Year Employment History | ||
Linda Cook United States Executive Director, Gas & Power, of Royal Dutch Shell Principal Director of Shell Petroleum Executive Director of Royal Dutch | Executive Director, Gas & Power, of Royal Dutch Shell | She was Chief Executive Officer for Shell Gas & Power from 2000 to 2003. She was President and Chief Executive Officer and a member of the Board of Directors of Shell Canada Limited from 2003 to 2004. In August 2004, she was appointed a Managing Director (currently Executive Director) of Royal Dutch and became a Group Managing Director and Chief Executive Officer of Shell Gas & Power. In 2004 she became an Executive Director of Royal Dutch Shell. She has been non-executive Director of The Boeing Company, an aerospace company, since 2003. | ||
Rob Routs The Netherlands Executive Director, Oil Products and Chemicals, of Royal Dutch Shell Principal Director of Shell Petroleum | Executive Director, Oil Products and Chemicals, of Royal Dutch Shell | He joined the Shell Group in 1971 and has held various positions in The Netherlands, Canada and the U.S.A. He was President and Chief Executive Officer of Shell Oil Products U.S.A. and President of Shell Oil Company and Country Chair for the Shell Group in the U.S.A. from 2002 to 2003. He was a Managing Director of Royal Dutch from 2003 to 2005 and became a Group Managing Director with effect from July 2003 and an Executive Director of Royal Dutch Shell since 2004. He was Chief Executive Officer of Equilon Enterprise LLC, (a joint venture between Shell and Texaco), from 2000 to 2002. He is also a director of INSEAD (a worldwide business school). | ||
Maarten van den Bergh The Netherlands Non-Executive Director of Royal Dutch Shell | Chairman of the Board of Directors of Lloyds TSB Group plc, which engages in consumer and commercial banking and the insurance and investment business and has its principal business address at 25 Gresham Street, London, EC2V 7HN, England. | He was President of Royal Dutch from 1998 to 2000 having been a Managing Director of Royal Dutch since 1992. He was a member of the Royal Dutch supervisory board from 2000 to 2005 and became a Non-Executive Director of Royal Dutch Shell in 2004. He has been Chairman of the Board of Directors of Lloyds TSB Group plc since 2001 and a Non-Executive director of BT Group plc, a telecommunications company, since 2000, British Airways plc, an international airline, since 2002 and a member of the supervisory board of Akzo Nobel N.V., which manufactures paint, chemicals, salt and healthcare products, since 2005. |
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Name, Citizenship, Positions | Present Principal Occupation | |||
at Filing Companies | or Employment* | Five Year Employment History | ||
Sir Peter Burt Britain Non-Executive Director of Royal Dutch Shell | Chairman of ITV plc, which engages in television broadcasting and production, pay and digital TV and television leasing and has its principal business address at The London Television Centre, Upper Ground, London SE1 9LT, England. | He was a Non-Executive Director of Shell Transport from 2002 to 2005 and became a Non-Executive Director of Royal Dutch Shell in 2004. He was the Executive Deputy Chairman of HBOS plc and subsidiaries, engaged in commercial banking, from 2001 to 2003 and was Group Chief Executive of the Bank of Scotland, engaged in commercial banking, from 1996 to 2001. He has been Chairman of ITV plc since 2004, a director of a number of charitable organizations and non-executive director of Templeton Emerging Markets Trust plc, an investment trust for emerging markets, since 2004. He was a partner of Gleacher Partners LLP in 2003 and has been a partner of Gleacher Shudclock LLP (known as Gleacher Shudclock Ltd) since 2003, both engaged in investment banking. | ||
Mary R. (Nina) Henderson United States Non-Executive Director of Royal Dutch Shell | Non-Executive Director of Royal Dutch Shell | She was a Non-Executive Director of Shell Transport from 2001 to 2005 and became a Non-Executive Director of Royal Dutch Shell in 2004. She was a director of the Hunt Corporation, engaged in the manufacture and distribution of office and art/ framing supplies, from 1991 to 2002. She has been a Director of Pactiv Corporation, a producer of specialty packaging products, since 2000, AXA Financial Inc., a provider of diversified financial services, since 1996, Del Monte Foods Company, a manufacturer and marketer of processed foods, since 2002 and Visiting Nurse Service of New York, a healthcare service provider, since 1997. | ||
Sir Peter Job Britain Non-Executive Director of Royal Dutch Shell | Non-Executive Director of Royal Dutch Shell | He was a Non-Executive Director of Shell Transport from 2001 to 2005 and became a Non-Executive Director of Royal Dutch Shell in 2004. He was Chief Executive of Reuters Group plc, a provider of news services, from 1991 to 2001, a member of the supervisory board of Bertelsmann AG, a publishing and communications company, from 2002 to 2005, non-executive director of GlaxoSmithKline plc, a pharmaceuticals company, from 2000 to 2004, and a non-executive director Multex.com Inc., a provider of global financial information, from 2002 to 2003. He has been a non-executive director of Schroders plc, a global asset management company, since 1999, TIBCO Software Inc, a software company, since 2000, Instinet Group Inc, an provider of electronic trading solutions, since 2000 and a member of the supervisory board of Deutsche Bank AG, a provider of banking and financial services, since 2001. |
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Name, Citizenship, Positions | Present Principal Occupation | |||
at Filing Companies | or Employment* | Five Year Employment History | ||
Wim Kok The Netherlands Non-Executive Director of Royal Dutch Shell | Non-Executive Director of Royal Dutch Shell | He was a member of the Royal Dutch supervisory board from 2003 to 2005. He was appointed Dutch Prime Minister in 1994, serving for two periods of government up to July 2002. Since 2003 he has been a member of the supervisory boards of ING Groep N.V., a financial services company, KLM N.V., an international airline, and TNT N.V. (formerly TPG N.V.), a global provider of mail, express and logistics services. | ||
Jonkheer Aarnout Loudon The Netherlands Non-Executive Director of Royal Dutch Shell Non-Executive Director of Royal Dutch | Chairman of the Supervisory Board of ABN AMRO Holding N.V., which provides financial services including retail banking, private banking, asset management and investment banking services and has its principal business address at Gustav Mahlerlaan 10, Amsterdam, 1082PP, The Netherlands, and Akzo Nobel N.V., which manufactures paint, chemicals, salt and healthcare products and has its principal business address at Velperweg 76, 6824 BM Arnhem, Postbus 9300, 6800 SB Arnhem, The Netherlands. | He was appointed a member of the Royal Dutch supervisory board (currently a Non-Executive Director) in 1997 and a Non-Executive Director of Royal Dutch Shell in 2004. He was a non-executive director of Corus Group plc, which engages in the manufacturing processing and distribution of metal products and provides design, technology and consultancy services, from 1999 to 2002 and Hollandsche Betongroep N.V., an international construction company, from 1995 to 2002. He has been Chairman of the Supervisory Board of ABN AMRO Holding N.V. since 1996, the Supervisory Board of Akzo Nobel N.V. since 1995, a member of the International Advisory Board of Allianz AG, an insurance and financial services company, since 1984 and a member of the supervisory board of Het Concertgebouw N.V., a concert hall, since 1993. He was a partner of Maat Schap S-Gravenhage, from 1995 to 2005. | ||
Christine Morin-Postel France Non-Executive Director of Royal Dutch Shell Non-Executive Director of Royal Dutch | Non-Executive Director of Royal Dutch Shell | She was appointed a member of the Royal Dutch supervisory board (currently a Non-Executive Director) in 2004 and a Non-Executive Director of Royal Dutch Shell in 2004. From 1998 until March 2001, she was Chief Executive and Chairman of the Management Committee of Societe Generale de Belgique, an international and industrial services group. She was Executive Vice-president of Suez S.A., an international and industrial services group, from 2000 to 2003. She was a non-executive director of Arlington Capital Investors Europe, an investment management company, from 2002 to 2005 and Fortis S.A./N.V., an international financial services company, from 1998 to 2003. She has been a non-executive director of Alcan Inc., a manufacturer of aluminum, light gauge sheet, foil and packaging products, since 2003, Pilkington plc, a manufacturer of glass and glazing products, since 2003 and 3i Group plc, which is engaged in private equity and venture capital, since 2002. |
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Name, Citizenship, Positions | Present Principal Occupation | |||
at Filing Companies | or Employment* | Five Year Employment History | ||
Lawrence Ricciardi United States Non-Executive Director of Royal Dutch Shell Non-Executive Director of Royal Dutch | Senior Advisor to Jones Day Reaves & Pogue, a law firm that has its business address at 222 East 41st St., New York, NY 10017-6702, and to Lazard Freres & Co., which provides financial services, including mergers and acquisitions, asset management, corporate restructuring, underwriting, securities placement and research services and has its business address at 30 Rockefeller Plaza, New York, NY 10020. | He was appointed a member of the Royal Dutch supervisory board (currently a Non-Executive Director) in 2001 and a Non-Executive Director of Royal Dutch Shell in 2004. He was previously Senior Vice President and General Counsel of IBM, which creates, develops and manufactures advanced information technologies, from 1995 to 2002. He has been Senior Advisor to the law firm Jones Day and to Lazard Freres & Co. since 2003 and a member of the Board of Directors of The Reader’s Digest Association, Inc., which is engaged in publishing and direct marketing, since 1998. |
* | Unless otherwise indicated, the business address of each of the above persons is Royal Dutch Shell, Carel van Bylandtlaan 30, 2596 HR The Hague, The Netherlands. |
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Mr. Jacobs | €38,500 | |||
Mr. Loudon | €34,500 | |||
Ms. Morin-Postel | €31,000 | |||
Mr. Ricciardi* | €42,875 |
Mr. Jacobs | £75,000 | |||
Mr. Loudon | £49,000 | |||
Ms. Morin-Postel | £42,500 | |||
Mr. Ricciardi* | £56,500 |
* | Mr. Ricciardi’s compensation includes amounts received for intercontinental travel to attend meetings, which was€2,375 per meeting for the Royal Dutch Supervisory Board and £3,000 per meeting for Royal Dutch Shell (the fee for Royal Dutch Shell is not paid for one meeting per year held in a location other than The Hague or London). |
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![]() The Board N.V. Koninklijke Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company) Carel van Bylandtlaan 30 2596 HR The Hague The Netherlands | Corporate Finance ABN AMRO Bank N.V. Gustav Mahlerlaan 10 1082 PP Amsterdam Mailing address P.O. Box 283 1000 EA Amsterdam The Netherlands Telephone +31 20 628 93 93 Telex 11006 ABAM NL |
Letter of opinion | 31 October 2005 |
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1. Reviewed certain publicly available business and financial information relating to the Company, including the audited annual accounts for the consecutive financial years ending 31 December 1999 through 31 December 2004 and the unaudited nine-month financial figures for the period ending 30 September 2005; | |
2. Reviewed certain publicly available business and financial information relating to Shell Transport, including the audited annual accounts for the consecutive financial years ending 31 December 1999 through 31 December 2004 and the unaudited nine-month financial figures for the period ending 30 September 2005 as prepared for the purposes of the Proposed Transaction; | |
3. Reviewed certain publicly available business and financial information relating to Royal Dutch Shell, including the audited annual accounts for the consecutive financial years ending 31 December 2002 through 31 December 2004 and the unaudited nine-month financial figures for the period ending 30 September 2005; | |
4. Reviewed certain documents relating to the Proposed Transaction and the Unification Transaction, including among other things the pricing methodology approved by the Boards of Royal Dutch, Royal Dutch Shell and SPNV; | |
5. Participated in discussions with and reviewed information provided by management and employees of Royal Dutch Shell and Royal Dutch and their advisers with respect to matters ABN AMRO believed necessary or appropriate to its enquiry; | |
6. Reviewed the historical stock prices and trading volumes of the Royal Dutch Shell Shares, Royal Dutch Shares and Shell Transport shares; | |
7. Reviewed publicly available data regarding share buybacks of Royal Dutch Shell, Royal Dutch and Shell Transport; | |
8. Reviewed the financial terms of certain transactions ABN AMRO believes to be comparable to the Proposed Transaction; | |
9. Reviewed the legal review on the typical price determination in a squeeze-out procedure under Dutch law by the Court of Appeal in The Netherlands provided to Royal Dutch Shell by De Brauw Blackstone Westbroek, Dutch legal counsel to Royal Dutch, Royal Dutch Shell and SPNV, which was reviewed and concurred with by Freshfields Bruckhaus Deringer, Dutch legal counsel to ABN AMRO; | |
10. Reviewed publicly available data regarding the market practice of settlement of fractional entitlements; and | |
11. Performed such other financial reviews and analyses, as ABN AMRO, in its absolute discretion, deemed appropriate. |
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![]() The Board N.V. Koninklijke Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company) Carel van Bylandtlaan 30 2596 HR The Hague The Netherlands | Corporate Finance ABN AMRO Bank N.V. Gustav Mahlerlaan 10 1082 PP Amsterdam Mailing address P.O. Box 283 1000 EA Amsterdam The Netherlands Telephone +31 20 628 93 93 Telex 11006 ABAM NL |
Letter of opinion | 31 October 2005 |
1. Reviewed the form of the Loan Note deed (the “Loan Note Deed”) included as an exhibit to the joint proposal which sets forth the terms of the Merger and which has been approved by each of the Boards of Royal Dutch and SPNV; |
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2. Reviewed the Loan Note document and election forms which are being separately made available to eligible UK resident Minority Shareholders; | |
3. Reviewed certain other documents relating to both the unification transaction consummated on 20 July 2005 (as a result of which Royal Dutch Shell became the parent company of Royal Dutch) and the Proposed Transaction; | |
4. Participated in discussions with and reviewed information provided by Royal Dutch Shell, Royal Dutch and its advisers with respect to matters ABN AMRO believed necessary or appropriate to its enquiry; and | |
5. Performed such other financial reviews and analysis as ABN AMRO, in its absolute discretion, deemed appropriate. |
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Audited Combined Financial Statements of Royal Dutch Petroleum Company and The Shell Transport and Trading Company Limited for the Year Ended December 31, 2004 (US GAAP) | ||
Report of the Independent Registered Public Accounting Firms | F-3 | |
Combined Statement of Income | F-4 | |
Combined Balance Sheet | F-5 | |
Combined Statement of Changes in Shareholders’ Equity | F-6 | |
Combined Statement of Cash Flows | F-7 | |
Notes to the Combined Financial Statements | F-8 | |
Supplementary Information — Oil and Gas (Unaudited) | F-52 | |
Reserves | F-52 | |
Standardised measure of discounted future cash flows | F-55 | |
Supplementary Information — Derivatives and other Financial Instruments and Derivative Commodity Instruments | F-57 | |
Schedule 1 | F-78 | |
Unaudited Condensed Combined Interim Financial Statements of Royal Dutch Petroleum Company and The Shell Transport and Trading Company Limited for the Three and Nine Month Periods Ended September 30, 2005 (IFRS) | ||
Condensed Combined Interim Statement of Income | F-80 | |
Condensed Combined Interim Balance Sheet | F-81 | |
Condensed Combined Interim Statement of Changes in Equity | F-82 | |
Condensed Combined Interim Statement of Cash Flows | F-83 | |
Notes to the Condensed Combined Interim Financial Statements | F-84 |
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Note | 2004 | 2003 | 2002 | |||||||||||||
$ million | ||||||||||||||||
Sales proceeds | 337,522 | 263,889 | 218,287 | |||||||||||||
Sales taxes, excise duties and similar levies | 72,332 | 65,527 | 54,834 | |||||||||||||
Net proceeds(a) | 265,190 | 198,362 | 163,453 | |||||||||||||
Cost of sales(b) | 221,678 | 165,147 | 135,658 | |||||||||||||
Gross profit | 43,512 | 33,215 | 27,795 | |||||||||||||
Selling and distribution expenses | 12,340 | 11,409 | 9,617 | |||||||||||||
Administrative expenses | 2,542 | 1,887 | 1,598 | |||||||||||||
Exploration | 1,823 | 1,475 | 1,052 | |||||||||||||
Research and development | 553 | 584 | 472 | |||||||||||||
Operating profit of Shell Group companies | 26,254 | 17,860 | 15,056 | |||||||||||||
Share of operating profit of associated companies | 4 | 5,653 | 3,446 | 2,792 | ||||||||||||
Operating profit | 31,907 | 21,306 | 17,848 | |||||||||||||
Interest and other income | 5 | 1,730 | 1,996 | 782 | ||||||||||||
Interest expense | 6 | 1,213 | 1,324 | 1,291 | ||||||||||||
Currency exchange gains/(losses) | (39 | ) | (231 | ) | (25 | ) | ||||||||||
Income before taxation | 32,385 | 21,747 | 17,314 | |||||||||||||
Taxation | 7 | 15,137 | 9,352 | 7,655 | ||||||||||||
Income after taxation | 17,248 | 12,395 | 9,659 | |||||||||||||
Income applicable to minority interests | 626 | 353 | 175 | |||||||||||||
Income from continuing operations | 16,622 | 12,042 | 9,484 | |||||||||||||
Income from discontinued operations, net of tax | 3 | 1,560 | 25 | 187 | ||||||||||||
Cumulative effect of a change in accounting principle, net of tax | 2 | — | 255 | — | ||||||||||||
Net income | 18,182 | 12,322 | 9,671 | |||||||||||||
(a) Includes net proceeds related to buy/sell contracts: | 2 | 24,744 | 19,795 | 14,267 | ||||||||||||
(b) Includes costs related to buy/sell contracts: | 2 | 24,719 | 19,713 | 14,419 |
2004 | 2003 | 2002 | |||||||||||
$ | |||||||||||||
Net income per Royal Dutch Petroleum Company share | 5.39 | 3.63 | 2.82 | ||||||||||
— Continuing operations | 4.93 | 3.54 | 2.77 | ||||||||||
— Discontinued operations | 0.46 | 0.01 | 0.05 | ||||||||||
— Cumulative effect of a change in accounting principle, net of tax | — | 0.08 | — | ||||||||||
Diluted net income per Royal Dutch Petroleum Company share | 5.39 | 3.63 | 2.81 | ||||||||||
— Continuing operations | 4.93 | 3.54 | 2.76 | ||||||||||
— Discontinued operations | 0.46 | 0.01 | 0.05 | ||||||||||
— Cumulative effect of a change in accounting principle, net of tax | — | 0.08 | — | ||||||||||
Net income per Shell Transport and Trading Company Limited share | 0.77 | 0.52 | 0.40 | ||||||||||
— Continuing operations | 0.70 | 0.51 | 0.39 | ||||||||||
— Discontinued operations | 0.07 | — | 0.01 | ||||||||||
— Cumulative effect of a change in accounting principle, net of tax | — | 0.01 | — | ||||||||||
Diluted net income per Shell Transport and Trading Company Limited share | 0.77 | 0.52 | 0.40 | ||||||||||
— Continuing operations | 0.70 | 0.51 | 0.39 | ||||||||||
— Discontinued operations | 0.07 | — | 0.01 | ||||||||||
— Cumulative effect of a change in accounting principle, net of tax | — | 0.01 | — |
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Dec 31, | Dec 31, | |||||||||||||
Note | 2004 | 2003 | ||||||||||||
$ million | ||||||||||||||
Fixed assets | ||||||||||||||
Tangible assets | 8 | 88,940 | 87,088 | |||||||||||
Intangible assets | 8 | 4,890 | 4,735 | |||||||||||
Investments: | ||||||||||||||
associated companies | 4 | 19,743 | 19,371 | |||||||||||
securities | 12 | 1,627 | 2,317 | |||||||||||
other | 1,121 | 1,086 | ||||||||||||
Total fixed assets | 116,321 | 114,597 | ||||||||||||
Other long term assets | ||||||||||||||
Prepaid pension costs | 20 | 8,278 | 6,516 | |||||||||||
Deferred taxation | 7 | 1,995 | 2,092 | |||||||||||
Other | 9 | 4,369 | 2,741 | |||||||||||
Total other long-term assets | 14,642 | 11,349 | ||||||||||||
Current assets | ||||||||||||||
Inventories | 10 | 15,391 | 12,690 | |||||||||||
Accounts receivable | 11 | 38,063 | 29,013 | |||||||||||
Cash and cash equivalents | 12 | 9,208 | 2,117 | |||||||||||
Total current assets | 62,662 | 43,820 | ||||||||||||
Current liabilities:amounts due within one year | ||||||||||||||
Short-term debt | 13 | 5,762 | 10,569 | |||||||||||
Accounts payable and accrued liabilities | 15 | 39,862 | 32,383 | |||||||||||
Taxes payable | 7 | 9,885 | 5,927 | |||||||||||
Total current liabilities | 55,509 | 48,879 | ||||||||||||
Net current assets/(liabilities) | 7,153 | (5,059 | ) | |||||||||||
Total assets less current liabilities | 138,116 | 120,887 | ||||||||||||
Long-term liabilities:amounts due after more than one year | ||||||||||||||
Long-term debt | 13 | 8,600 | 9,100 | |||||||||||
Other | 16 | 8,065 | 6,054 | |||||||||||
16,665 | 15,154 | |||||||||||||
Provisions | ||||||||||||||
Deferred taxation | 7 | 14,844 | 15,185 | |||||||||||
Pensions and similar obligations | 20 | 5,044 | 4,927 | |||||||||||
Decommissioning and restoration costs | 23 | 5,709 | 3,955 | |||||||||||
25,597 | 24,067 | |||||||||||||
Group net assets before minority interests | 95,854 | 81,666 | ||||||||||||
Minority interests | 5,309 | 3,415 | ||||||||||||
Net assets | 90,545 | 78,251 | ||||||||||||
Shareholders’ equity | ||||||||||||||
Equity share capital | 18 | 586 | 587 | |||||||||||
Preference shares | 18 | 20 | 20 | |||||||||||
Additional paid in capital | 17 | 5,374 | 5,372 | |||||||||||
Treasury shares(a) | 17 | (4,187 | ) | (3,428 | ) | |||||||||
Other comprehensive income | 17 | (792 | ) | (3,836 | ) | |||||||||
Retained earnings | 17 | 89,544 | 79,536 | |||||||||||
90,545 | 78,251 | |||||||||||||
(a) | Comprises 62 million shares of Royal Dutch Petroleum Company (2003: 51 million) and 184 million shares of The Shell Transport and Trading Company Limited (2003: 148 million). |
F-5
Table of Contents
2004 | 2003 | 2002 | |||||||||||
$ million | |||||||||||||
Shareholders’ equity at 1 January | 78,251 | 66,195 | 62,822 | ||||||||||
Earnings reinvested: | |||||||||||||
Net income for the year | 18,182 | 12,322 | 9,671 | ||||||||||
Less dividends | (7,396 | ) | (6,532 | ) | (5,522 | ) | |||||||
10,786 | 5,790 | 3,945 | |||||||||||
Other comprehensive income, net of tax: | |||||||||||||
Currency translation differences | 3,548 | 5,795 | 3,108 | ||||||||||
Unrealised gains/(losses) on securities | (350 | ) | 689 | 25 | |||||||||
Unrealised gains/(losses) on cash flow hedges | 31 | 51 | (225 | ) | |||||||||
Minimum pension liability adjustments | (185 | ) | 358 | (1,475 | ) | ||||||||
3,044 | 6,893 | 1,433 | |||||||||||
Common stock held in treasury: | |||||||||||||
Purchase of treasury shares | (848 | ) | (715 | ) | (981 | ) | |||||||
Release of treasury shares | — | 21 | 52 | ||||||||||
Dividends received | 89 | 63 | 85 | ||||||||||
(759 | ) | (631 | ) | (844 | ) | ||||||||
(Share buy backs)/cancellations | (777 | ) | 4 | (1,365 | ) | ||||||||
Shareholders’ equity at 31 December | 90,545 | 78,251 | 66,195 | ||||||||||
F-6
Table of Contents
Note | 2004 | 2003 | 2002 | ||||||||||||||||
$ million | |||||||||||||||||||
Cash flow provided by operating activities | |||||||||||||||||||
Net income: | 18,182 | 12,322 | 9,671 | ||||||||||||||||
Adjustments to reconcile net income to cash flow provided by operating activities | — | — | — | ||||||||||||||||
Depreciation, depletion and amortisation | 8 | 12,273 | 11,711 | 8,739 | |||||||||||||||
Profit on sale of assets | (3,033 | ) | (2,141 | ) | (367 | ) | |||||||||||||
Movements in: | — | — | — | ||||||||||||||||
inventories | (2,731 | ) | (236 | ) | (2,079 | ) | |||||||||||||
accounts receivable | (8,462 | ) | 1,834 | (5,830 | ) | ||||||||||||||
accounts payable and accrued liabilities | 7,317 | (212 | ) | 6,989 | |||||||||||||||
taxes payable | 2,997 | (223 | ) | (744 | ) | ||||||||||||||
Associated companies: dividends more/(less) than net income | 4 | 258 | 511 | 117 | |||||||||||||||
Deferred taxation and other provisions | (524 | ) | (621 | ) | 423 | ||||||||||||||
Long-term liabilities and other | (1,391 | ) | (1,328 | ) | (1,326 | ) | |||||||||||||
Income applicable to minority interests | 714 | 366 | 175 | ||||||||||||||||
Cash flow provided by operating activities | 25,600 | 21,983 | 15,768 | ||||||||||||||||
Cash flow used in investing activities | |||||||||||||||||||
Capital expenditure (including capitalised leases) | 8 | (12,734 | ) | (12,252 | ) | (12,102 | ) | ||||||||||||
Acquisitions (Enterprise Oil, Penzoil-Quaker State and additional shares in Equilon) | — | — | (8,925 | ) | |||||||||||||||
Proceeds from sale of assets | 5,078 | 2,286 | 1,099 | ||||||||||||||||
New investments in associated companies | 4 | (1,058 | ) | (983 | ) | (1,289 | ) | ||||||||||||
Disposals of investments in associated companies | 1,327 | 708 | 501 | ||||||||||||||||
Proceeds from sale and other movements in investments | 1,743 | 1,988 | 84 | ||||||||||||||||
Cash flow used in investing activities | (5,644 | ) | (8,253 | ) | (20,632 | ) | |||||||||||||
Cash flow used in financing activities | |||||||||||||||||||
Long-term debt (including short term part) | |||||||||||||||||||
new borrowings | 544 | 572 | 5,267 | ||||||||||||||||
repayments | (1,688 | ) | (2,740 | ) | (5,610 | ) | |||||||||||||
(1,144 | ) | (2,168 | ) | (343 | ) | ||||||||||||||
Net increase/(decrease) in short-term debt | 3,698 | (2,501 | ) | 7,075 | |||||||||||||||
Change in minority interests | 807 | (1,363 | ) | 421 | |||||||||||||||
Repurchase of share capital, including expenses | (781 | ) | — | (1,393 | ) | ||||||||||||||
Dividends paid to Royal Dutch and Shell Transport shareholders | (7,396 | ) | (6,532 | ) | (5,522 | ) | |||||||||||||
Dividends paid to minority interests | (264 | ) | (300 | ) | (228 | ) | |||||||||||||
Cash flow used in financing activities | (12,476 | ) | (12,864 | ) | 10 | ||||||||||||||
Net investments in treasury stock and dividends received | (758 | ) | (633 | ) | (864 | ) | |||||||||||||
Currency translation differences relating to cash and cash equivalents | 369 | 175 | 173 | ||||||||||||||||
Increase/(decrease) in cash and cash equivalents | 7,091 | 408 | (5,545 | ) | |||||||||||||||
Cash and cash equivalents at January 1 | 2,117 | 1,709 | 7,254 | ||||||||||||||||
Cash and cash equivalents at December 31 | 9,208 | 2,117 | 1,709 | ||||||||||||||||
F-7
Table of Contents
1 | Basis of Presentation |
Royal Dutch Petroleum Company and The Shell Transport and Trading Company Limited |
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Royal Dutch | 10,910 | 7,395 | 5,807 | |||||||||
Shell Transport | 7,272 | 4,927 | 3,864 | |||||||||
18,182 | 12,322 | 9,671 | ||||||||||
2004 | 2003 | |||||||
$ million | ||||||||
Royal Dutch | 54,324 | 47,087 | ||||||
Shell Transport | 36,221 | 31,164 | ||||||
90,545 | 78,251 | |||||||
2004 | 2003 | 2002 | ||||||||||
Royal Dutch | 2,023,212,126 | 2,036,687,755 | 2,057,657,737 | |||||||||
Shell Transport | 9,480,407,909 | 9,528,797,724 | 9,608,614,760 |
F-8
Table of Contents
2004 | 2003 | 2002 | ||||||||||
Royal Dutch | 2,025,495,289 | 2,037,361,965 | 2,058,100,317 | |||||||||
Shell Transport | 9,485,180,086 | 9,531,519,807 | 9,613,276,052 |
The Transaction and Royal Dutch Shell plc |
• for each Royal Dutch Ordinary Share held in New York registry form tendered: | 1 Royal Dutch Shell Class A American depositary receipt (representing 2 Royal Dutch Shell Class A ordinary shares) | |
• for each Royal Dutch Ordinary Share held in bearer or Hague registry form tendered: | 2 Royal Dutch Shell Class A ordinary shares | |
• for each Shell Transport Ordinary Share (including Shell Transport Ordinary Shares to which holders of Shell Transport bearer warrants are entitled): | 0.287333066 Royal Dutch Shell Class B ordinary shares | |
• for each Shell Transport ADR: | 0.861999198 Royal Dutch Shell Class B American depositary receipts (representing 2 Royal Dutch Shell Class B ordinary shares) |
2 | Accounting policies |
Nature of the Combined Financial Statements |
F-9
Table of Contents
Currency translation |
Revenue recognition |
F-10
Table of Contents
Depreciation, depletion and amortisation |
F-11
Table of Contents
Recoverability of assets |
Administrative expenses |
Exploration costs |
F-12
Table of Contents
Research and development |
Deferred taxation |
Leasing |
Interest capitalisation |
Securities |
Inventories |
F-13
Table of Contents
Derivative instruments |
Environmental expenditures |
Employee retirement plans |
Postretirement benefits other than pensions |
F-14
Table of Contents
Stock-based compensation plans |
Decommissioning and restoration costs |
Acquisitions |
Discontinued operations |
Changes in US GAAP Accounting Policies since January 1, 2005 |
F-15
Table of Contents
3 | Discontinued operations |
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Income before taxation from discontinued operations (including gains on disposal of $1,564 million in 2004 and impairments of $88 million in 2003 and $9 million in 2002) | 1,980 | 135 | 282 | |||||||||
Taxation | 332 | 97 | 95 | |||||||||
Minority interests | 88 | 13 | — | |||||||||
Income from discontinued operations, net of tax | 1,560 | 25 | 187 | |||||||||
4 | Associated companies |
(a) | Income |
F-16
Table of Contents
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Net proceeds | 53,544 | 44,422 | 33,467 | |||||||||
Cost of sales | 43,694 | 37,084 | 26,744 | |||||||||
Gross profit | 9,850 | 7,338 | 6,723 | |||||||||
Other operating expenses | 4,197 | 3,892 | 3,931 | |||||||||
Operating profit | 5,653 | 3,446 | 2,792 | |||||||||
Interest and other income | 173 | 228 | 102 | |||||||||
Interest expense | 580 | 540 | 451 | |||||||||
Currency exchange gains/(losses) | 20 | (3 | ) | (15 | ) | |||||||
Income before taxation | 5,266 | 3,131 | 2,428 | |||||||||
Taxation | 2,065 | 1,463 | 990 | |||||||||
Income from continuing operations | 3,201 | 1,668 | 1,438 | |||||||||
Income from discontinued operations, net of tax | 13 | 13 | 16 | |||||||||
Net income | 3,214 | 1,681 | 1,454 | |||||||||
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Exploration & Production | 1,145 | 800 | 541 | |||||||||
Gas & Power | 1,142 | 650 | 589 | |||||||||
Oil Products | 1,253 | 632 | 448 | |||||||||
Chemicals | (7 | ) | (169 | ) | 153 | |||||||
Corporate and Other | (319 | ) | (232 | ) | (277 | ) | ||||||
3,214 | 1,681 | 1,454 | ||||||||||
(b) | Investments |
2004 | 2003 | |||||||||||||||
Shares | Loans | Total | Total | |||||||||||||
$ million | ||||||||||||||||
At January 1 | 16,800 | 2,571 | 19,371 | 17,945 | ||||||||||||
New investments | 681 | 377 | 1,058 | 983 | ||||||||||||
Net asset transfers to/(from) associates, disposals and other movements | (649 | ) | (284 | ) | (933 | ) | (173 | ) | ||||||||
Net income | 3,214 | — | 3,214 | 1,681 | ||||||||||||
Dividends | (3,472 | ) | — | (3,472 | ) | (2,192 | ) | |||||||||
Currency translation differences | 455 | 50 | 505 | 1,127 | ||||||||||||
At December 31 | 17,029 | 2,714 | 19,743 | 19,371 | ||||||||||||
F-17
Table of Contents
2004 | 2003 | |||||||
$ million | ||||||||
Fixed assets | 28,665 | 30,892 | ||||||
Current assets | 10,427 | 8,248 | ||||||
Total assets | 39,092 | 39,140 | ||||||
Current liabilities | 7,559 | 8,745 | ||||||
Long-term liabilities | 11,790 | 11,024 | ||||||
Net assets | 19,743 | 19,371 | ||||||
Shell Group | Country of | ||||||
Segment Name | interest | incorporation | |||||
Exploration & Production | |||||||
Aera | 52% | USA | |||||
Brunei Shell | 50% | Brunei | |||||
Woodside | 34% | Australia | |||||
Gas & Power | |||||||
InterGen | 68% | The Netherlands | |||||
Nigeria LNG | 26% | Nigeria | |||||
Oman LNG | 30% | Oman | |||||
Oil Products | |||||||
Motiva | 50% | USA | |||||
Showa Shell | 40% | Japan | |||||
Chemicals | |||||||
Basell | 50% | The Netherlands | |||||
Saudi Petrochemical | 50% | Saudi Arabia | |||||
Infinium | 50% | The Netherlands |
F-18
Table of Contents
(c) | Transactions between Shell Group companies and associated companies |
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Charges to associated companies | 14,018 | 18,155 | 10,573 | |||||||||
Charges from associated companies | 12,373 | 8,608 | 5,623 |
5 | Interest and other income |
2004 | 2003 | 2002 | |||||||||||
$ million | |||||||||||||
Shell Group companies | |||||||||||||
Interest income | 457 | 354 | 521 | ||||||||||
Other income | 1,100 | 1,414 | 159 | ||||||||||
1,557 | 1,768 | 680 | |||||||||||
Associated companies | 173 | 228 | 102 | ||||||||||
1,730 | 1,996 | 782 | |||||||||||
6 | Interest expense |
2004 | 2003 | 2002 | |||||||||||
$ million | |||||||||||||
Shell Group companies | |||||||||||||
Interest incurred | 839 | 828 | 883 | ||||||||||
lessinterest capitalised | 206 | 44 | 43 | ||||||||||
633 | 784 | 840 | |||||||||||
Associated companies | 580 | 540 | 451 | ||||||||||
1,213 | 1,324 | 1,291 | |||||||||||
F-19
Table of Contents
7 | Taxation |
(a) | Taxation charge for the year |
2004 | 2003 | 2002 | |||||||||||
$ million | |||||||||||||
Shell Group companies | |||||||||||||
Current tax charge | 13,585 | 8,200 | 6,658 | ||||||||||
Deferred tax charge/(credit) | (513 | ) | (311 | ) | 7 | ||||||||
13,072 | 7,889 | 6,665 | |||||||||||
Associated companies | 2,065 | 1,463 | 990 | ||||||||||
15,137 | 9,352 | 7,655 | |||||||||||
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Expected tax charge at statutory rates | 13,718 | 8,913 | 6,512 | |||||||||
Adjustments in respect of prior years | (52 | ) | 166 | (252 | ) | |||||||
Other reconciling items | (594 | ) | (1,190 | ) | 405 | |||||||
Taxation charge of Shell Group companies | 13,072 | 7,889 | 6,665 | |||||||||
F-20
Table of Contents
(b) | Taxes payable |
2004 | 2003 | |||||||
$ million | ||||||||
Taxes on activities of Shell Group companies | 5,606 | 2,148 | ||||||
Sales taxes, excise duties and similar levies and social law taxes | 4,279 | 3,779 | ||||||
9,885 | 5,927 | |||||||
(c) | Provision for deferred taxation |
2004 | 2003 | ||||||||
$ million | |||||||||
Tangible and intangible fixed assets | 17,738 | 17,365 | |||||||
Pensions and similar obligations | 2,653 | 2,118 | |||||||
Other items | 2,568 | 2,649 | |||||||
Total deferred tax liabilities | 22,959 | 22,132 | |||||||
Tax losses carried forward | (4,214 | ) | (3,876 | ) | |||||
Foreign tax credits(a) | (2,042 | ) | (1,633 | ) | |||||
US trademark(b) | (247 | ) | (309 | ) | |||||
Provisions | |||||||||
Pensions and similar obligations | (1,228 | ) | (1,329 | ) | |||||
Decommissioning and restoration costs | (2,191 | ) | (1,934 | ) | |||||
Environmental and other provisions | (455 | ) | (334 | ) | |||||
Tangible and intangible fixed assets | (461 | ) | (153 | ) | |||||
Other items | (3,266 | ) | (3,268 | ) | |||||
Total deferred tax assets | (14,104 | ) | (12,836 | ) | |||||
Asset valuation allowance | 3,994 | 3,797 | |||||||
Deferred tax assets net of valuation allowance | (10,110 | ) | (9,039 | ) | |||||
Net deferred tax liability | 12,849 | 13,093 | |||||||
Presented in the Combined Statement of Assets and Liabilities as: | |||||||||
Deferred tax assets | 1,995 | 2,092 | |||||||
Deferred tax liabilities | 14,844 | 15,185 |
(a) | Foreign tax credits represent surplus credits arising in holding and sub-holding Shell Group companies on income from other jurisdictions. A valuation allowance has been recorded against the substantial part of these balances in both 2004 and 2003. | |
(b) | Deferred tax asset created upon transfer of US trademark rights from a US wholly-owned Shell Group company to a Netherlands wholly-owned Shell Group company. |
F-21
Table of Contents
$ million | ||||
2005 | 702 | |||
2006 | 239 | |||
2007 | 452 | |||
2008 | 70 | |||
2009 - 2013 | 404 | |||
2014 - 2019 | 368 |
8 | Tangible and intangible fixed assets |
2004 | ||||||||||||||||||||||||
2003 | ||||||||||||||||||||||||
Other | Total | Total | Total | |||||||||||||||||||||
Tangible | Goodwill | intangibles | intangibles | Shell Group | Shell Group | |||||||||||||||||||
$ million | ||||||||||||||||||||||||
Cost | ||||||||||||||||||||||||
At January 1 | 181,685 | 4,011 | 2,998 | 7,009 | 188,694 | 163,957 | ||||||||||||||||||
Capital expenditure | 12,440 | 3 | 291 | 294 | 12,734 | 12,252 | ||||||||||||||||||
Sales, retirements and other movements(a) | (9,345 | ) | (44 | ) | 102 | 58 | (9,287 | ) | (1,770 | ) | ||||||||||||||
Currency translation differences | 8,382 | 62 | 81 | 143 | 8,525 | 14,255 | ||||||||||||||||||
At December 31(b) | 193,162 | 4,032 | 3,472 | 7,504 | 200,666 | 188,694 | ||||||||||||||||||
Depreciation | ||||||||||||||||||||||||
At January 1 | 94,597 | 1,336 | 938 | 2,274 | 96,871 | 80,898 | ||||||||||||||||||
Depreciation, depletion and amortisation charge | 11,945 | — | 328 | 328 | 12,273 | 11,711 | ||||||||||||||||||
Sales, retirements and other movements | (7,310 | ) | (37 | ) | (38 | ) | (75 | ) | (7,385 | ) | (3,711 | ) | ||||||||||||
Currency translation differences | 4,990 | 42 | 45 | 87 | 5,077 | 7,973 | ||||||||||||||||||
At December 31 | 104,222 | 1,341 | 1,273 | 2,614 | 106,836 | 96,871 | ||||||||||||||||||
Net 2004 | 88,940 | 2,691 | 2,199 | 4,890 | 93,830 | |||||||||||||||||||
Net 2003 | 87,088 | 2,675 | 2,060 | 4,735 | 91,823 | |||||||||||||||||||
(a) | Sales, retirements and other movements in 2003 include the effect of a change in accounting policy for certain long-term agreements (see Note 2). | |
(b) | Tangible fixed assets at December 31, 2004 include rights and concessions of $11.1 billion (2003: $12.0 billion). |
F-22
Table of Contents
2004 | 2003 | ||||||||
$ million | |||||||||
Capitalised costs in respect of assets not yet used in operations | |||||||||
Unproved properties | 2,844 | 4,576 | |||||||
Proved properties under development and other assets in the course of construction | 13,491 | 12,680 | |||||||
16,335 | 17,256 | ||||||||
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
At January 1 | 771 | 720 | 515 | |||||||||
Additions pending determination of proved reserves | 566 | 501 | 568 | |||||||||
Amounts charged to expense | (432 | ) | (449 | ) | (393 | ) | ||||||
Reclassifications to productive wells on determination of proved reserves | (94 | ) | (56 | ) | (24 | ) | ||||||
Other movements, including acquisitions, disposals and currency translation effects | (22 | ) | 55 | 54 | ||||||||
At December 31 | 789 | 771 | 720 | |||||||||
2004 | 2003 | 2002 | |||||||||||
$ million | |||||||||||||
Cost of sales | 9,876 | 9,702 | 7,312 | ||||||||||
Selling and distribution expenses | 1,438 | 1,229 | 1,041 | ||||||||||
Administrative expenses | 121 | 121 | 62 | ||||||||||
Exploration | 684 | 411 | 80 | ||||||||||
Research and development | 33 | 28 | 33 | ||||||||||
Depreciation, depletion and amortisation: | |||||||||||||
from continuing operations | 12,152 | 11,491 | 8,528 | ||||||||||
from discontinued operations | 121 | 220 | 211 | ||||||||||
12,273 | 11,711 | 8,739 | |||||||||||
F-23
Table of Contents
9 | Other long-term assets |
10 | Inventories |
2004 | 2003 | |||||||
$ million | ||||||||
Inventories of oil and chemicals | 14,488 | 11,742 | ||||||
Inventories of materials | 903 | 948 | ||||||
15,391 | 12,690 | |||||||
11 | Accounts receivable |
2004 | 2003 | |||||||
$ million | ||||||||
Trade receivables | 23,626 | 17,523 | ||||||
Amounts owed by associated companies | 2,619 | 2,093 | ||||||
Other receivables | 4,061 | 3,647 | ||||||
Deferred charges and prepayments | 7,757 | 5,750 | ||||||
38,063 | 29,013 | |||||||
F-24
Table of Contents
12 | Securities |
13 | Debt |
(a) | Short-term debt |
2004 | 2003 | |||||||
$ million | ||||||||
Debentures and other loans | 4,661 | 8,181 | ||||||
Amounts due to banks and other credit institutions (including long-term debt due within one year) | 1,048 | 2,279 | ||||||
5,709 | 10,460 | |||||||
Capitalised lease obligations | 53 | 109 | ||||||
Short-term debt | 5,762 | 10,569 | ||||||
lesslong-term debt due within one year | 1,291 | 1,874 | ||||||
Short-term debt excluding long-term debt due within one year | 4,471 | 8,695 | ||||||
F-25
Table of Contents
2004 | 2003 | ||||||||
$ million | |||||||||
Maximum amount outstanding at the end of any quarter | 6,688 | 9,159 | |||||||
Average amount outstanding | 6,381 | 8,392 | |||||||
Amounts due to banks and other credit institutions | 812 | 2,657 | |||||||
Unused lines of short-term credit | 4,023 | 3,916 | |||||||
Approximate average interest rate on: | |||||||||
average amount outstanding | 3 | % | 3 | % | |||||
amount outstanding at December 31 | 3 | % | 2 | % |
(b) Long-term debt |
2004 | 2003 | |||||||
$ million | ||||||||
Debentures and other loans | 4,204 | 4,868 | ||||||
Amounts due to banks and other credit institutions | 3,744 | 3,724 | ||||||
7,948 | 8,592 | |||||||
Capitalised lease obligations | 652 | 508 | ||||||
Long-term debt | 8,600 | 9,100 | ||||||
addlong-term debt due within one year | 1,291 | 1,874 | ||||||
Long-term debt including long-term debt due within one year | 9,891 | 10,974 | ||||||
Average | |||||||||
$ million | interest rate | ||||||||
US Dollar denominated debt | |||||||||
Fixed rate | 4,925 | 6% | |||||||
Variable rate | 697 | 4% | |||||||
Non-dollar denominated debt | |||||||||
Fixed rate | 3,101 | 4% | |||||||
Variable rate | 463 | 5% | |||||||
9,186 | |||||||||
F-26
Table of Contents
$ million | ||||
2005 | 1,238 | |||
2006 | 1,884 | |||
2007 | 2,474 | |||
2008 | 530 | |||
2009 | 117 | |||
2010 and after | 2,943 | |||
9,186 | ||||
14 | Commitments |
(a) | Leasing arrangements |
Operating | Capital | |||||||
leases | leases | |||||||
$ million | ||||||||
2005 | 1,744 | 105 | ||||||
2006 | 1,203 | 73 | ||||||
2007 | 958 | 67 | ||||||
2008 | 781 | 61 | ||||||
2009 | 709 | 58 | ||||||
2010 and after | 4,460 | 852 | ||||||
Total minimum payments | 9,855 | 1,216 | ||||||
lessexecutory costs and interest | 511 | |||||||
Present value of net minimum capital lease payments | 705 | |||||||
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Minimum rentals | 2,140 | 2,135 | 1,557 | |||||||||
Contingent rentals | 75 | 60 | 104 | |||||||||
Sub-lease rentals | (198 | ) | (198 | ) | (300 | ) | ||||||
2,017 | 1,997 | 1,361 | ||||||||||
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Table of Contents
(b) | Long-term purchase obligations |
$ million | ||||
2005 | 461 | |||
2006 | 420 | |||
2007 | 413 | |||
2008 | 385 | |||
2009 | 380 | |||
2010 and after | 3,437 | |||
5,496 | ||||
15 | Accounts payable and accrued liabilities |
2004 | 2003 | |||||||
$ million | ||||||||
Trade payables | 18,716 | 14,110 | ||||||
Amounts due to associated companies | 1,927 | 1,828 | ||||||
Pensions and similar obligations | 286 | 261 | ||||||
Other payables | 11,245 | 8,841 | ||||||
Accruals and deferred income | 7,659 | 7,315 | ||||||
Dividends payable | 29 | 28 | ||||||
39,862 | 32,383 | |||||||
16 | Long-term liabilities — Other |
2004 | 2003 | |||||||
$ million | ||||||||
Risk management activities | 1,801 | 439 | ||||||
Deferred income | 1,501 | 1,354 | ||||||
Environmental liabilities | 664 | 676 | ||||||
Deposits for return items | 603 | 566 | ||||||
Liabilities under staff benefit plans | 541 | 315 | ||||||
Advance payments received under long-term supply contracts | 354 | 315 | ||||||
Redundancy liabilities | 127 | 165 | ||||||
Other | 2,474 | 2,224 | ||||||
8,065 | 6,054 | |||||||
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Table of Contents
17 | Changes in Combined Shareholders’ Equity |
Shell | Shell | ||||||||||||||||||||||||||||||||||||
Royal Dutch | Transport | Total equity | Transport | Additional | Other | ||||||||||||||||||||||||||||||||
Ordinary | Ordinary | share | Preference | paid in | Treasury | comprehensive | Retained | ||||||||||||||||||||||||||||||
shares | shares | capital | shares | capital | shares | income | earnings | Total | |||||||||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||||||||||
At 1 January 2002 | 359 | 237 | 596 | 20 | 5,385 | (1,953 | ) | (12,162 | ) | 70,936 | 62,822 | ||||||||||||||||||||||||||
Net income | 9,671 | 9,671 | |||||||||||||||||||||||||||||||||||
Dividends | (5,522 | ) | (5,522 | ) | |||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||||||||||
Currency translation differences | 3,108 | 3,108 | |||||||||||||||||||||||||||||||||||
unrealised gains/(losses) on securities | 25 | 25 | |||||||||||||||||||||||||||||||||||
unrealised gains/(losses) on cash flow hedges | (225 | ) | (225 | ) | |||||||||||||||||||||||||||||||||
minimum pension liability adjustments | (1,475 | ) | (1,475 | ) | |||||||||||||||||||||||||||||||||
Purchase of treasury shares | (981 | ) | (981 | ) | |||||||||||||||||||||||||||||||||
Release of treasury shares | 52 | 52 | |||||||||||||||||||||||||||||||||||
Dividends received | 85 | 85 | |||||||||||||||||||||||||||||||||||
Shares repurchased for cancellation | (4 | ) | (2 | ) | (6 | ) | (10 | ) | (1,349 | ) | (1,365 | ) | |||||||||||||||||||||||||
At January 1 2003 | 355 | 235 | 590 | 20 | 5,375 | (2,797 | ) | (10,729 | ) | 73,736 | 66,195 | ||||||||||||||||||||||||||
Net income | 12,322 | 12,322 | |||||||||||||||||||||||||||||||||||
Dividends | (6,532 | ) | (6,532 | ) | |||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | ||||||||||||||||||||||||||||||||||||
Currency translation differences | 5,795 | 5,795 | |||||||||||||||||||||||||||||||||||
unrealised gains/(losses) on securities | 689 | 689 | |||||||||||||||||||||||||||||||||||
unrealised gains/(losses) on cash flow hedges | 51 | 51 | |||||||||||||||||||||||||||||||||||
minimum pension liability adjustments | 358 | 358 | |||||||||||||||||||||||||||||||||||
Purchase of treasury shares | (715 | ) | (715 | ) | |||||||||||||||||||||||||||||||||
Release of treasury shares | 21 | 21 | |||||||||||||||||||||||||||||||||||
Dividends received | 63 | 63 | |||||||||||||||||||||||||||||||||||
Shares repurchased for cancellation | (3 | ) | (3 | ) | (3 | ) | 10 | 4 | |||||||||||||||||||||||||||||
At January 1 2004 | 352 | 235 | 587 | 20 | 5,372 | (3,428 | ) | (3,836 | ) | 79,536 | 78,251 | ||||||||||||||||||||||||||
Net income | 18,182 | 18,182 | |||||||||||||||||||||||||||||||||||
Dividends | (7,396 | ) | (7,396 | ) | |||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||||||||||
Currency translation differences | 3,548 | 3,548 | |||||||||||||||||||||||||||||||||||
unrealised gains/(losses) on securities | (350 | ) | (350 | ) | |||||||||||||||||||||||||||||||||
unrealised gains/(losses) on cash flow hedges | 31 | 31 | |||||||||||||||||||||||||||||||||||
minimum pension liability adjustments | (185 | ) | (185 | ) | |||||||||||||||||||||||||||||||||
Purchase of treasury shares | (848 | ) | (848 | ) | |||||||||||||||||||||||||||||||||
Release of treasury shares | — | ||||||||||||||||||||||||||||||||||||
Dividends received | 89 | 89 | |||||||||||||||||||||||||||||||||||
Shares repurchased for cancellation | (1 | ) | (1 | ) | 2 | (778 | ) | (777 | ) | ||||||||||||||||||||||||||||
At December 31 2004 | 352 | 234 | 586 | 20 | 5,374 | (4,187 | ) | (792 | ) | 89,544 | 90,545 | ||||||||||||||||||||||||||
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Table of Contents
18 | Share Capital |
Equity shares |
2004 | 2003 | |||||||
$ million | ||||||||
Allotted, called up and fully paid | ||||||||
Royal Dutch Ordinary Shares | 352 | 352 | ||||||
Shell Transport Ordinary Shares | 234 | 235 | ||||||
586 | 587 | |||||||
Shell Transport | ||||||||
Royal Dutch | and Trading | |||||||
Shares outstanding at December 31, 2004 | 2,081,725,000 | 9,624,900,000 | ||||||
Shares outstanding at December 31, 2003 | 2,083,500,000 | 9,667,500,000 |
Non equity shares |
number of | ||||||||||||
shares | 2004 | 2003 | ||||||||||
$ million | ||||||||||||
Allotted, called up and fully paid | ||||||||||||
€448 Royal Dutch priority shares | 1,500 | 1 | 1 | |||||||||
£1 Shell Transport First Preference Shares | 2,000,000 | 3 | 3 | |||||||||
£1 Shell Transport Second Preference Shares | 10,000,000 | 16 | 16 | |||||||||
20 | 20 | |||||||||||
19 | Combined Statement of Cash Flows |
F-30
Table of Contents
2004 | ||||||||||||||||
Movements | ||||||||||||||||
Movements | Movements | derived from | ||||||||||||||
derived from | arising from | Statement of | ||||||||||||||
Statement of | currency | Non-cash | Assets and | |||||||||||||
Cash Flows | translation | movements | Liabilities | |||||||||||||
$ million | ||||||||||||||||
Tangible and intangible fixed assets | (2,626 | ) | 3,447 | 1,186 | 2,007 | |||||||||||
Investments | (2,075 | ) | 1,598 | 194 | (283 | ) | ||||||||||
Other long-term assets | 2,053 | 1,004 | 236 | 3,293 | ||||||||||||
Inventories | 2,731 | 691 | (721 | ) | 2,701 | |||||||||||
Accounts receivable | 8,462 | 1,348 | (760 | ) | 9,050 | |||||||||||
Cash and cash equivalents | 8,199 | (1,108 | ) | — | 7,091 | |||||||||||
Short-term debt | 4,370 | (898 | ) | 1,335 | 4,807 | |||||||||||
Accounts payable and accrued liabilities | (7,317 | ) | (794 | ) | 632 | (7,479 | ) | |||||||||
Taxes payable | (2,997 | ) | (579 | ) | (382 | ) | (3,958 | ) | ||||||||
Long-term debt | 817 | (357 | ) | 40 | 500 | |||||||||||
Other long-term liabilities | (1,441 | ) | (248 | ) | (322 | ) | (2,011 | ) | ||||||||
Deferred taxation | 672 | (673 | ) | 342 | 341 | |||||||||||
Other provisions | (148 | ) | (471 | ) | (1,252 | ) | (1,871 | ) | ||||||||
Minority interests | (1,257 | ) | (109 | ) | (528 | ) | (1,894 | ) | ||||||||
Other items | (193 | ) | 193 | — | — | |||||||||||
Adjustment for Treasury stock and Other comprehensive income excluding currency translation differences | 758 | 504 | — | — | ||||||||||||
— | ||||||||||||||||
Movement in retained earnings of Shell Group companies | 10,008 | |||||||||||||||
Movement in cumulative currency translation differences | 3,548 | |||||||||||||||
Movement in net assets | 12,294 | |||||||||||||||
20 | Employee retirement plans and other postretirement benefits |
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Table of Contents
Other benefits | ||||||||||||||||||||||||||||||||
Pension benefits | 2004 | 2003 | ||||||||||||||||||||||||||||||
2004 | 2003 | USA | Other | Total | USA | Other | Total | |||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||
Change in benefit obligation | ||||||||||||||||||||||||||||||||
Obligations for benefits based on employee service to date at January 1 | 46,476 | 39,109 | 2,520 | 512 | 3,032 | 2,068 | 377 | 2,445 | ||||||||||||||||||||||||
Increase in present value of the obligation for benefits based on employee service during the year | 1,086 | 991 | 35 | 16 | 51 | 37 | 15 | 52 | ||||||||||||||||||||||||
Interest on the obligation for benefits in respect of employee service in previous years | 2,529 | 2,333 | 139 | 28 | 167 | 141 | 24 | 165 | ||||||||||||||||||||||||
Benefit payments made | (2,350 | ) | (2,034 | ) | (119 | ) | (28 | ) | (147 | ) | (95 | ) | (25 | ) | (120 | ) | ||||||||||||||||
Currency translation effects | 3,461 | 5,333 | — | 40 | 40 | — | 78 | 78 | ||||||||||||||||||||||||
Other components(a) | 3,620 | 744 | (66 | ) | 43 | (23 | ) | 369 | 43 | 412 | ||||||||||||||||||||||
Obligations for benefits based on employee service to date at December 31 | 54,822 | 46,476 | 2,509 | 611 | 3,120 | 2,520 | 512 | 3,032 | ||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||||||||||
Plan assets held in trust at fair value at January 1 | 43,960 | 33,035 | ||||||||||||||||||||||||||||||
Actual return on plan assets | 5,262 | 6,598 | ||||||||||||||||||||||||||||||
Employer contributions | 1,562 | 1,275 | ||||||||||||||||||||||||||||||
Plan participants’ contributions | 56 | 40 | ||||||||||||||||||||||||||||||
Benefit payments made | (2,350 | ) | (2,034 | ) | ||||||||||||||||||||||||||||
Currency translation effects | 3,367 | 4,911 | ||||||||||||||||||||||||||||||
Other components(a) | 17 | 135 | ||||||||||||||||||||||||||||||
Plan assets held in trust at fair value at December 31 | 51,874 | 43,960 | ||||||||||||||||||||||||||||||
Plan assets in excess of/(less than) the present value of obligations for benefits at December 31 | (2,948 | ) | (2,516 | ) | (2,509 | ) | (611 | ) | (3,120 | ) | (2,520 | ) | (512 | ) | (3,032 | ) | ||||||||||||||||
Unrecognised net (gains)/losses remaining from the adoption of current method of determining pension costs | 3 | 5 | ||||||||||||||||||||||||||||||
Unrecognised net (gains)/losses since adoption | 9,888 | 7,295 | 727 | 186 | 913 | 876 | 149 | 1,025 | ||||||||||||||||||||||||
Unrecognised prior service cost/(credit) | 1,185 | 1,258 | (34 | ) | 2 | (32 | ) | (82 | ) | — | (82 | ) | ||||||||||||||||||||
Net amount recognised | 8,128 | 6,042 | (1,816 | ) | (423 | ) | (2,239 | ) | (1,726 | ) | (363 | ) | (2,089 | ) | ||||||||||||||||||
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Table of Contents
Other benefits | |||||||||||||||||||||||||||||||||
Pension benefits | 2004 | 2003 | |||||||||||||||||||||||||||||||
2004 | 2003 | USA | Other | Total | USA | Other | Total | ||||||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||||||
Amounts recognised in the Statement of Assets and Liabilities: | |||||||||||||||||||||||||||||||||
Intangible assets | 353 | 326 | |||||||||||||||||||||||||||||||
Prepaid benefit costs | 8,278 | 6,516 | |||||||||||||||||||||||||||||||
Accrued benefit liabilities: | |||||||||||||||||||||||||||||||||
Short-term | (213 | ) | (182 | ) | (40 | ) | (33 | ) | (73 | ) | (51 | ) | (28 | ) | (79 | ) | |||||||||||||||||
Long-term | (2,878 | ) | (2,917 | ) | (1,776 | ) | (390 | ) | (2,166 | ) | (1,675 | ) | (335 | ) | (2,010 | ) | |||||||||||||||||
5,540 | 3,743 | (1,816 | ) | (423 | ) | (2,239 | ) | (1,726 | ) | (363 | ) | (2,089 | ) | ||||||||||||||||||||
Amount recognised in Equity: | |||||||||||||||||||||||||||||||||
Accumulated other comprehensive income | 2,588 | 2,299 | |||||||||||||||||||||||||||||||
Net amount recognised | 8,128 | 6,042 | (1,816 | ) | (423 | ) | (2,239 | ) | (1,726 | ) | (363 | ) | (2,089 | ) | |||||||||||||||||||
(a) | Other components comprise mainly the effect of changes in actuarial assumptions, most notably the discount rate and in 2004 the impact of accounting for the US Medicare Act on the accumulated postretirement benefit obligation at January 1. |
Additional information on pension benefits |
2004 | 2003 | ||||||||
$ million | |||||||||
Obligation for pension benefits in respect of unfunded plans | 2,032 | 2,155 | |||||||
Accumulated benefit obligation | 48,654 | 41,865 | |||||||
For employee retirement plans with projected benefit obligation in excess of plan assets, the respective amounts are: | |||||||||
Projected benefit obligation | 36,246 | 30,291 | |||||||
Plan assets | 33,646 | 28,176 | |||||||
For employee retirement plans with accumulated benefit obligation in excess of plan assets, the respective amounts are: | |||||||||
Accumulated benefit obligation | 11,844 | 10,452 | |||||||
Plan assets | 10,734 | 9,356 |
Other benefits | ||||||||||||||||
Pension | ||||||||||||||||
benefits | USA | Other | Total | |||||||||||||
$ million | ||||||||||||||||
2005 | 2,584 | 132 | 32 | 164 | ||||||||||||
2006 | 2,664 | 135 | 33 | 168 | ||||||||||||
2007 | 2,738 | 147 | 33 | 180 | ||||||||||||
2008 | 2,829 | 157 | 34 | 191 | ||||||||||||
2009 | 2,908 | 165 | 35 | 200 | ||||||||||||
2010 - 2014 | 15,759 | 905 | 178 | 1,083 |
F-33
Table of Contents
Other benefits | ||||||||||||||||||||||||||||||||||||||||||||||||
Pension benefits | 2004 | 2003 | 2002 | |||||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | USA | Other | Total | USA | Other | Total | USA | Other | Total | |||||||||||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||||||||||||||
Service cost | 1,086 | 991 | 899 | 35 | 16 | 51 | 37 | 15 | 52 | 32 | 7 | 39 | ||||||||||||||||||||||||||||||||||||
Interest cost | 2,529 | 2,333 | 2,001 | 139 | 28 | 167 | 141 | 24 | 165 | 111 | 21 | 132 | ||||||||||||||||||||||||||||||||||||
Expected return on plan assets | (3,894 | ) | (3,547 | ) | (3,339 | ) | ||||||||||||||||||||||||||||||||||||||||||
Other components | 317 | 303 | (100 | ) | 41 | 8 | 49 | 66 | 4 | 70 | 76 | 7 | 83 | |||||||||||||||||||||||||||||||||||
Cost of defined benefit plans | 38 | 80 | (539 | ) | 215 | 52 | 267 | 244 | 43 | 287 | 219 | 35 | 254 | |||||||||||||||||||||||||||||||||||
Payments to defined contribution plans | 221 | 171 | 84 | |||||||||||||||||||||||||||||||||||||||||||||
259 | 251 | (455 | ) | 215 | 52 | 267 | 244 | 43 | 287 | 219 | 35 | 254 | ||||||||||||||||||||||||||||||||||||
Other benefits | ||||||||||||||||||||||||||||||||||||
Pension benefits | 2004 | 2003 | 2002 | |||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | USA | Other | USA | Other | USA | Other | ||||||||||||||||||||||||||||
Assumptions used to determine benefit obligations at December 31 | ||||||||||||||||||||||||||||||||||||
Discount rate | 5.1% | 5.6% | 5.9% | 5.8% | 5.0% | 6.0% | 5.6% | 6.5% | 5.6% | |||||||||||||||||||||||||||
Projected rate of remuneration growth | 3.8% | 3.9% | 4.0% | |||||||||||||||||||||||||||||||||
Assumptions used to determine benefit costs for year ended December 31 | ||||||||||||||||||||||||||||||||||||
Discount rate | 5.6% | 5.9% | 6.0% | 6.0% | 5.6% | 6.5% | 5.6% | 7.0% | 6.0% | |||||||||||||||||||||||||||
Expected rate of return on plan assets | 7.6% | 7.9% | 8.0% | |||||||||||||||||||||||||||||||||
Projected rate of remuneration growth | 3.9% | 4.0% | 4.0% | |||||||||||||||||||||||||||||||||
Healthcare cost trend rates | ||||||||||||||||||||||||||||||||||||
Healthcare cost trend rate in year after reporting year | 10.0% | 3.7% | 10.0% | 3.9% | 7.8% | 4.6% | ||||||||||||||||||||||||||||||
Ultimate healthcare cost trend rate | 5.0% | 2.9% | 5.0% | 2.9% | 5.0% | 2.9% | ||||||||||||||||||||||||||||||
Year ultimate healthcare cost trend rate is applicable | 2012 | 2007 | 2011 | 2006 | 2010 | 2004 |
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Table of Contents
Percentage of | ||||||||||||
Target | plan assets at | |||||||||||
allocation | December 31 | |||||||||||
2004 | 2004 | 2003 | ||||||||||
Equity securities | 72% | 73% | 73% | |||||||||
Debt securities | 23% | 21% | 22% | |||||||||
Real estate | 2% | 2% | 2% | |||||||||
Other | 3% | 4% | 3% | |||||||||
Total | 100% | 100% | 100% | |||||||||
21 | Employee emoluments and numbers |
(a) | Emoluments |
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Remuneration | 8,125 | 7,477 | 6,096 | |||||||||
Social law taxes | 695 | 660 | 518 | |||||||||
Pensions and similar obligations (Note 21) | 526 | 538 | (201 | ) | ||||||||
9,346 | 8,675 | 6,413 | ||||||||||
(b) | Average numbers |
2004 | 2003 | 2002 | ||||||||||
thousands | ||||||||||||
Exploration & Production | 17 | 17 | 17 | |||||||||
Gas & Power | 2 | 2 | 2 | |||||||||
Oil Products | 78 | 82 | 75 | |||||||||
Chemicals | 8 | 9 | 9 | |||||||||
Corporate and Other | 9 | 9 | 8 | |||||||||
114 | 119 | 111 | ||||||||||
(c) | Year-end numbers |
2004 | 2003 | 2002 | ||||||||||
thousands | ||||||||||||
Exploration & Production | 17 | 17 | 17 | |||||||||
Gas & Power | 2 | 2 | 2 | |||||||||
Oil Products | 76 | 82 | 80 | |||||||||
Chemicals | 8 | 9 | 9 | |||||||||
Corporate and Other | 9 | 9 | 8 | |||||||||
112 | 119 | 116 | ||||||||||
F-35
Table of Contents
2004 | 2003 | |||||||
$ million | ||||||||
At January 1 | 494 | 395 | ||||||
Charges | 526 | 291 | ||||||
Payments | (394 | ) | (245 | ) | ||||
Other movements and currency translation effects | (29 | ) | 53 | |||||
At December 31 | 597 | 494 | ||||||
22 | Stock-based compensation plans |
F-36
Table of Contents
Royal Dutch Ordinary | Shell Transport | Shell Canada common | ||||||||||||||||||||||
Shares | Ordinary Shares | shares(a) | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
average | average | average | ||||||||||||||||||||||
exercise | exercise | exercise | ||||||||||||||||||||||
Number | price | Number | price | Number | price | |||||||||||||||||||
(thousands) | ($) | (thousands) | ($) | (thousands) | ($) | |||||||||||||||||||
Under option at January 1, 2003 | 33,381 | 59.86 | 101,447 | 8.26 | 4,777 | 21.71 | ||||||||||||||||||
Granted | 15,643 | 45.13 | 41,893 | 6.74 | 1,674 | 35.65 | ||||||||||||||||||
Exercised | — | — | (192 | ) | 6.47 | (505 | ) | 22.88 | ||||||||||||||||
Expired | (1,003 | ) | 64.03 | (2,813 | ) | 8.92 | (73 | ) | 26.03 | |||||||||||||||
Under option at December 31, 2003(b) | 48,021 | 60.09 | 140,335 | 8.44 | 5,873 | 29.43 | ||||||||||||||||||
Granted | 14,816 | 52.42 | 42,998 | 7.47 | 1,697 | 45.99 | ||||||||||||||||||
Exercised | (495 | ) | 47.20 | (1,341 | ) | 7.10 | (1,175 | ) | 22.73 | |||||||||||||||
Expired | (1,644 | ) | 68.14 | (6,033 | ) | 9.69 | (285 | ) | 25.85 | |||||||||||||||
Under option at December 31, 2004(b) | 60,698 | 60.56 | 175,959 | 8.73 | 6,110 | 37.17 | ||||||||||||||||||
(a) | Unissued. | |
(b) | The underlying weighted average exercise prices for Royal Dutch and Shell Transport shares under option at December 31, 2004 were€44.42 (2003:€47.64) and £4.53 (2003: £4.73) respectively. |
Royal Dutch Ordinary Shares | ||||||||||||||||||||
Options outstanding | Options exercisable | |||||||||||||||||||
Weighted | ||||||||||||||||||||
average | Weighted | Weighted | ||||||||||||||||||
remaining | average | average | ||||||||||||||||||
contractual | exercise | exercise | ||||||||||||||||||
Range of exercise prices | Number | life | price | Number | price | |||||||||||||||
(thousands) | (years) | ($) | (thousands) | ($) | ||||||||||||||||
$40 to $45 | 6,541 | 8.2 | 42.25 | 2,027 | 42.24 | |||||||||||||||
$45 to $50 | 7,096 | 9.1 | 48.65 | 223 | 45.71 | |||||||||||||||
$50 to $55 | 19,118 | 7.4 | 52.72 | 6,241 | 53.49 | |||||||||||||||
$55 to $60 | 8,354 | 7.6 | 56.30 | 2,353 | 56.21 | |||||||||||||||
$60 to $65 | 3,759 | 6.2 | 60.77 | 3,759 | 60.77 | |||||||||||||||
$65 to $70 | 773 | 2.3 | 66.70 | 773 | 66.70 | |||||||||||||||
$75 to $80 | 149 | 6.8 | 76.94 | 149 | 76.94 | |||||||||||||||
$80 to $85 | 9,503 | 6.3 | 82.92 | 1,959 | 81.34 | |||||||||||||||
$85 to $90 | 2,124 | 5.4 | 85.36 | 2,124 | 85.36 | |||||||||||||||
$90 to $95 | 79 | 5.2 | 94.11 | 79 | 94.11 | |||||||||||||||
$95 to $100 | 3,202 | 6.2 | 96.21 | 3,202 | 96.21 | |||||||||||||||
$40 to $100 | 60,698 | 7.3 | 60.56 | 22,889 | 65.95 | |||||||||||||||
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Shell Transport Ordinary Shares | ||||||||||||||||||||
Options outstanding | Options exercisable | |||||||||||||||||||
Weighted | ||||||||||||||||||||
average | Weighted | Weighted | ||||||||||||||||||
remaining | average | average | ||||||||||||||||||
contractual | exercise | exercise | ||||||||||||||||||
Range of exercise prices | Number | life | price | Number | price | |||||||||||||||
(thousands) | (years) | ($) | (thousands) | ($) | ||||||||||||||||
$7 to $8 | 93,250 | 7.8 | 7.36 | 9,847 | 7.00 | |||||||||||||||
$8 to $9 | 6,937 | 3.3 | 8.45 | 6,137 | 8.47 | |||||||||||||||
$9 to $10 | 11,694 | 4.4 | 9.74 | 11,694 | 9.74 | |||||||||||||||
$10 to $11 | 51,761 | 6.3 | 10.29 | 14,110 | 10.64 | |||||||||||||||
$11 to $12 | 12,317 | 6.0 | 11.80 | 12,317 | 11.80 | |||||||||||||||
$7 to $12 | 175,959 | 6.8 | 8.73 | 54,105 | 9.80 | |||||||||||||||
2004 | 2003 | |||||||
thousands | ||||||||
Under option at January 1 | 15,089 | 18,680 | ||||||
Granted | — | 4,975 | ||||||
Exercised | (1,924 | ) | (707 | ) | ||||
Expired | (2,634 | ) | (7,859 | ) | ||||
Under option at December 31 | 10,531 | 15,089 | ||||||
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Table of Contents
Effects on Shell Group net income and Earnings per share under the fair value method |
2004 | 2003 | 2002 | ||||||||||||||||||||||
Pro forma | Pro forma | Pro forma | ||||||||||||||||||||||
Shell Group net income ($ million) | 18,182 | 17,937 | 12,322 | 12,045 | 9,671 | 9,468 | ||||||||||||||||||
Basic earnings per share attributable to Royal Dutch ($)(a) | 5.39 | 5.32 | 3.63 | 3.55 | 2.82 | 2.76 | ||||||||||||||||||
Diluted earnings per share attributable to Royal Dutch ($)(a) | 5.39 | 5.31 | 3.63 | 3.55 | 2.81 | 2.76 | ||||||||||||||||||
Basic earnings per ADR attributable to Shell Transport ($)(a) | 4.60 | 4.54 | 3.10 | 3.03 | 2.41 | 2.36 | ||||||||||||||||||
Diluted earnings per ADR attributable to Shell Transport ($)(a) | 4.60 | 4.54 | 3.10 | 3.03 | 2.41 | 2.36 |
(a) | Based on Royal Dutch and Shell Transport Ordinary Shares/numbers before unification. |
23 | Decommissioning and restoration costs |
2004 | 2003 | |||||||||||||||||||||||
Short-term | Long-term | Total | Short-term | Long-term | Total | |||||||||||||||||||
$ million | ||||||||||||||||||||||||
At January 1 | 89 | 3,955 | 4,044 | 71 | 3,528 | 3,599 | ||||||||||||||||||
Cumulative effect of change in accounting policy(a) | — | — | — | 108 | (102 | ) | 6 | |||||||||||||||||
Liabilities incurred | 6 | 291 | 297 | — | 174 | 174 | ||||||||||||||||||
Liabilities settled | (77 | ) | (18 | ) | (95 | ) | (106 | ) | (37 | ) | (143 | ) | ||||||||||||
Accretion expense | — | 284 | 284 | — | 49 | 49 | ||||||||||||||||||
Reclassifications and other movements | 160 | 912 | 1,072 | 12 | 12 | 24 | ||||||||||||||||||
Currency translation differences | 7 | 285 | 292 | 4 | 331 | 335 | ||||||||||||||||||
At December 31 | 185 | 5,709 | 5,894 | 89 | 3,955 | 4,044 | ||||||||||||||||||
(a) | US accounting standard FAS 143 (Asset Retirement Obligations) was effective from the beginning of 2003 (see Note 2). |
F-39
Table of Contents
24 | Information by geographical area and by industry segment(a) |
(a) | Geographical area |
2004 | 2003 | 2002 | ||||||||||||||||||||||
Net | Fixed | Net | Fixed | Net | Fixed | |||||||||||||||||||
proceeds | assets | proceeds | assets | proceeds | assets | |||||||||||||||||||
$ million | ||||||||||||||||||||||||
Europe | 94,904 | 37,930 | 70,375 | 37,686 | 62,575 | 36,516 | ||||||||||||||||||
Other Eastern Hemisphere | 49,482 | 36,977 | 37,482 | 33,530 | 32,406 | 28,492 | ||||||||||||||||||
USA | 102,877 | 27,580 | 75,109 | 30,343 | 54,677 | 27,266 | ||||||||||||||||||
Other Western Hemisphere | 17,927 | 13,834 | 15,396 | 13,038 | 13,795 | 11,869 | ||||||||||||||||||
Total Group | 265,190 | 116,321 | 198,362 | 114,597 | 163,453 | 104,143 | ||||||||||||||||||
(a) | As a consequence of the separate reporting of income from discontinued operations (see Note 3), information for comparative periods has been reclassified where necessary. |
2004 | |||||||||||||||||||||||||
Total | Exploration | Gas & | Oil | Corporate | |||||||||||||||||||||
Shell Group | & Production | Power | Products | Chemicals | and Other | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
Sales | |||||||||||||||||||||||||
third parties | 265,190 | 20,643 | 9,604 | 207,006 | 26,877 | 1,060 | |||||||||||||||||||
inter-segment | 19,001 | 1,210 | 11,924 | 2,620 | 11 | ||||||||||||||||||||
Net proceeds | 39,644 | 10,814 | 218,930 | 29,497 | 1,071 | ||||||||||||||||||||
Operating profit/(loss) | |||||||||||||||||||||||||
Shell Group companies | 26,254 | 18,386 | 331 | 7,152 | 1,245 | (860 | ) | ||||||||||||||||||
Shell Group share of associated companies | 5,653 | 2,438 | 1,384 | 1,749 | 94 | (12 | ) | ||||||||||||||||||
31,907 | 20,824 | 1,715 | 8,901 | 1,339 | (872 | ) | |||||||||||||||||||
Interest and other income | 1,730 | 244 | 768 | 90 | 1 | 627 | |||||||||||||||||||
Interest expense | 1,213 | 1,213 | |||||||||||||||||||||||
Currency exchange gains/(losses) | (39 | ) | (78 | ) | 15 | (19 | ) | (16 | ) | 59 | |||||||||||||||
Taxation | 15,137 | 12,033 | 429 | 2,691 | 394 | (410 | ) | ||||||||||||||||||
Income applicable to minority interests | 626 | ||||||||||||||||||||||||
Income from continuing operations | 16,622 | 8,957 | 2,069 | 6,281 | 930 | (989 | ) | ||||||||||||||||||
Income from discontinued operations, net of tax(a) | 1,560 | 358 | 86 | 1,256 | — | (52 | ) | ||||||||||||||||||
Net income | 18,182 | 9,315 | 2,155 | 7,537 | 930 | (1,041 | ) | ||||||||||||||||||
Total assets at December 31 | 193,626 | 68,199 | 23,214 | 71,447 | 18,330 | 12,406 | |||||||||||||||||||
Total liabilities at December 31 | (97,862 | ) | (44,602 | ) | (15,897 | ) | (44,509 | ) | (8,062 | ) | 15,208 | ||||||||||||||
Tangible fixed assets at December 31 | |||||||||||||||||||||||||
Cost | 193,162 | 115,404 | 8,028 | 53,773 | 14,561 | 1,396 | |||||||||||||||||||
Accumulated depreciation | (104,222 | ) | (63,411 | ) | (1,107 | ) | (30,689 | ) | (8,381 | ) | (634 | ) | |||||||||||||
Goodwill at December 31 | 2,691 | — | 184 | 2,470 | 23 | 14 | |||||||||||||||||||
Investments in associated companies at December 31 | 19,743 | 4,762 | 4,312 | 6,206 | 4,139 | 324 | |||||||||||||||||||
Capital expenditure and new investments in associated companies | 13,792 | 8,745 | 1,633 | 2,466 | 705 | 243 | |||||||||||||||||||
Depreciation, depletion and amortisation charge from continuing operations | |||||||||||||||||||||||||
Impairment | 622 | 7 | — | 580 | 29 | 6 | |||||||||||||||||||
Other | 11,530 | 8,132 | 262 | 2,476 | 515 | 145 |
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Table of Contents
2003 | |||||||||||||||||||||||||
Total | Exploration | Gas & | Oil | Corporate | |||||||||||||||||||||
Shell Group | & Production | Power | Products | Chemicals | and Other | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
Sales | |||||||||||||||||||||||||
third parties | 198,362 | 12,224 | 7,377 | 159,075 | 18,843 | 843 | |||||||||||||||||||
inter-segment | 20,244 | 850 | 3,416 | 1,974 | 29 | ||||||||||||||||||||
Net proceeds | 32,468 | 8,227 | 162,491 | 20,817 | 872 | ||||||||||||||||||||
Operating profit/(loss) | |||||||||||||||||||||||||
Shell Group companies | 17,860 | 14,968 | 510 | 3,175 | (112 | ) | (681 | ) | |||||||||||||||||
Shell Group share of associated companies | 3,446 | 1,857 | 871 | 910 | (165 | ) | (27 | ) | |||||||||||||||||
21,306 | 16,825 | 1,381 | 4,085 | (277 | ) | (708 | ) | ||||||||||||||||||
Interest and other income | 1,996 | 88 | 1,366 | (39 | ) | (29 | ) | 610 | |||||||||||||||||
Interest expense | 1,324 | 1,324 | |||||||||||||||||||||||
Currency exchange gains/(losses) | (231 | ) | (16 | ) | (23 | ) | (23 | ) | (14 | ) | (155 | ) | |||||||||||||
Taxation | 9,352 | 8,307 | 454 | 1,202 | (111 | ) | (500 | ) | |||||||||||||||||
Income applicable to minority interests | 353 | ||||||||||||||||||||||||
Income from continuing operations | 12,042 | 8,590 | 2,270 | 2,821 | (209 | ) | (1,077 | ) | |||||||||||||||||
Income from discontinued operations, net of tax(a) | 25 | 78 | 19 | 39 | — | (98 | ) | ||||||||||||||||||
Cumulative effect of change in accounting principle, net of tax | 255 | 255 | |||||||||||||||||||||||
Net income | 12,322 | 8,923 | 2,289 | 2,860 | (209 | ) | (1,175 | ) | |||||||||||||||||
Total assets at December 31 | 169,737 | 63,641 | 19,212 | 64,725 | 15,297 | 6,862 | |||||||||||||||||||
Total liabilities at December 31 | (88,215 | ) | (47,866 | ) | (13,277 | ) | (42,549 | ) | (7,888 | ) | 23,365 | ||||||||||||||
Tangible fixed assets at December 31 | |||||||||||||||||||||||||
Cost | 181,685 | 105,540 | 6,934 | 53,556 | 14,028 | 1,627 | |||||||||||||||||||
Accumulated depreciation | (94,597 | ) | (56,265 | ) | (985 | ) | (28,784 | ) | (7,851 | ) | (712 | ) | |||||||||||||
Goodwill at December 31 | 2,675 | — | 184 | 2,455 | 23 | 13 | |||||||||||||||||||
Investments in associated companies at December 31 | 19,371 | 4,108 | 4,924 | 5,965 | 4,017 | 357 | |||||||||||||||||||
Capital expenditure and new investments in associated companies | 13,235 | 8,278 | 1,511 | 2,405 | 599 | 442 | |||||||||||||||||||
Depreciation, depletion and amortisation charge from continuing operations | |||||||||||||||||||||||||
Impairment | 1,288 | 679 | — | 262 | 220 | 127 | |||||||||||||||||||
Other | 10,203 | 7,048 | 116 | 2,455 | 458 | 126 |
(a) | $88 million of income applicable to minority interests is deducted in arriving at income from discontinued operations for the Shell Group in 2004 (2003: $13 million). |
F-41
Table of Contents
2002 | |||||||||||||||||||||||||
Total | Exploration | Gas & | Oil | Corporate | |||||||||||||||||||||
Shell Group | & Production | Power | Products | Chemicals | and Other | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
Sales | |||||||||||||||||||||||||
third parties | 163,453 | 11,640 | 4,254 | 132,681 | 14,125 | 753 | |||||||||||||||||||
inter-segment | 14,680 | 620 | 3,080 | 1,082 | 17 | ||||||||||||||||||||
Net proceeds | 26,320 | 4,874 | 135,761 | 15,207 | 770 | ||||||||||||||||||||
Operating profit/(loss) | |||||||||||||||||||||||||
Shell Group companies | 15,056 | 11,976 | 89 | 3,009 | 438 | (456 | ) | ||||||||||||||||||
Shell Group share of associated companies | 2,792 | 1,316 | 729 | 554 | 213 | (20 | ) | ||||||||||||||||||
17,848 | 13,292 | 818 | 3,563 | 651 | (476 | ) | |||||||||||||||||||
Interest and other income | 782 | 98 | 118 | 10 | 3 | 553 | |||||||||||||||||||
Interest expense | 1,291 | 1,291 | |||||||||||||||||||||||
Currency exchange gains/(losses) | (25 | ) | (25 | ) | 6 | (67 | ) | (16 | ) | 77 | |||||||||||||||
Taxation | 7,655 | 6,724 | 195 | 1,021 | 73 | (358 | ) | ||||||||||||||||||
Income applicable to minority interests | 175 | ||||||||||||||||||||||||
Income from continuing operations | 9,484 | 6,641 | 747 | 2,485 | 565 | (779 | ) | ||||||||||||||||||
Income from discontinued operations, net of tax | 187 | 85 | 27 | 142 | — | (67 | ) | ||||||||||||||||||
Net income | 9,671 | 6,726 | 774 | 2,627 | 565 | (846 | ) | ||||||||||||||||||
Total assets at December 31 | 153,291 | 56,988 | 16,057 | 60,549 | 14,172 | 5,525 | |||||||||||||||||||
Total liabilities at December 31(a) | (83,672 | ) | (45,191 | ) | (12,223 | ) | (41,826 | ) | (7,903 | ) | 23,471 | ||||||||||||||
Tangible fixed assets at December 31 | |||||||||||||||||||||||||
Cost | 157,499 | 93,333 | 2,843 | 47,689 | 12,010 | 1,624 | |||||||||||||||||||
Accumulated depreciation | (79,136 | ) | (47,076 | ) | (763 | ) | (23,926 | ) | (6,711 | ) | (660 | ) | |||||||||||||
Goodwill at December 31 | 2,324 | — | 184 | 1,989 | 22 | 129 | |||||||||||||||||||
Investments in associated companies at December 31 | 17,945 | 3,591 | 4,679 | 5,344 | 4,154 | 177 | |||||||||||||||||||
Capital expenditure, acquisitions and new investments in associated companies | 23,651 | 13,154 | 953 | 7,968 | 998 | 578 | |||||||||||||||||||
Depreciation, depletion and amortisation charge from continuing operations | |||||||||||||||||||||||||
Impairment | 188 | 33 | 4 | 102 | 29 | 20 | |||||||||||||||||||
Other | 8,340 | 5,603 | 112 | 2,160 | 372 | 93 |
(a) | Deferred taxation as at December 31, 2002 is included on a net liability basis, rather than as separate deferred taxation assets and liabilities as in 2004 and 2003. |
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Table of Contents
25 | Oil and gas exploration and production activities |
(a) Capitalised costs |
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
Cost | ||||||||||||
Proved properties | 104,479 | (a) | 94,069 | (a) | 83,964 | |||||||
Unproved properties | 4,281 | 5,400 | 4,768 | |||||||||
Support equipment and facilities | 3,266 | 3,128 | 2,352 | |||||||||
112,026 | 102,597 | 91,084 | ||||||||||
Depreciation | ||||||||||||
Proved properties | 60,101 | (a) | 53,867 | (a) | 45,525 | |||||||
Unproved properties | 1,437 | 824 | 325 | |||||||||
Support equipment and facilities | 1,582 | 1,443 | 1,224 | |||||||||
63,120 | 56,134 | 47,074 | ||||||||||
Net capitalised costs | 48,906 | 46,463 | 44,010 | |||||||||
Oil sands: net capitalised costs | 3,087 | 2,811 | 2,246 |
(a) | Includes capitalised asset retirement costs. |
(b) Costs incurred |
2004 | |||||||||||||||||||||||||||||
Western | |||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | ||||||||||||||||||||||||||||
Middle East, | |||||||||||||||||||||||||||||
Asia | Russia, | ||||||||||||||||||||||||||||
Europe | Africa | Pacific | CIS(a) | USA | Other | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Acquisition of properties | |||||||||||||||||||||||||||||
Proved | — | — | — | 192 | 17 | (1 | ) | 208 | |||||||||||||||||||||
Unproved | (3 | ) | 46 | (3 | ) | 7 | 19 | 44 | 110 | ||||||||||||||||||||
Exploration | 152 | 196 | 141 | 127 | 418 | 214 | 1,248 | ||||||||||||||||||||||
Development(b) | |||||||||||||||||||||||||||||
Excluding oil sands | 2,404 | 1,831 | 363 | 2,645 | 867 | 362 | �� | 8,472 | |||||||||||||||||||||
Oil sands | 132 | 132 |
F-43
Table of Contents
2003 | |||||||||||||||||||||||||||||
Western | |||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | ||||||||||||||||||||||||||||
Middle East, | |||||||||||||||||||||||||||||
Asia | Russia, | ||||||||||||||||||||||||||||
Europe | Africa | Pacific | CIS(a) | USA | Other | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Acquisition of properties | |||||||||||||||||||||||||||||
Proved | 6 | 8 | 177 | 194 | — | — | 385 | ||||||||||||||||||||||
Unproved | — | 209 | 3 | 273 | 17 | 8 | 510 | ||||||||||||||||||||||
Exploration | 187 | 163 | 139 | 273 | 342 | 155 | 1,259 | ||||||||||||||||||||||
Development(b) | |||||||||||||||||||||||||||||
Excluding oil sands | 2,776 | 1,660 | 311 | 1,251 | 1,599 | 588 | 8,185 | ||||||||||||||||||||||
Oil sands | 88 | 88 |
2002 | |||||||||||||||||||||||||||||
Western | |||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | ||||||||||||||||||||||||||||
Middle East, | |||||||||||||||||||||||||||||
Asia | Russia, | ||||||||||||||||||||||||||||
Europe | Africa | Pacific | CIS | USA | Other | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Acquisition of properties | |||||||||||||||||||||||||||||
Proved | 3,776 | — | — | 122 | 565 | 801 | 5,264 | ||||||||||||||||||||||
Unproved | 1,693 | 53 | — | 3 | 368 | 412 | 2,529 | ||||||||||||||||||||||
Exploration | 217 | 279 | 115 | 170 | 328 | 182 | 1,291 | ||||||||||||||||||||||
Development | |||||||||||||||||||||||||||||
Excluding oil sands | 1,605 | 1,370 | 442 | 685 | 1,465 | 407 | 5,974 | ||||||||||||||||||||||
Oil sands | 931 | 931 |
(a) | These amounts do not include Sakhalin II project costs in 2004 of $869 million (2003: $384 million) reported in the Gas & Power segment. | |
(b) | Includes capitalised asset retirement costs. |
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Table of Contents
(c) Earnings |
2004 | |||||||||||||||||||||||||||||
Western | |||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | ||||||||||||||||||||||||||||
Middle East, | |||||||||||||||||||||||||||||
Asia | Russia, | ||||||||||||||||||||||||||||
Europe | Africa | Pacific | CIS | USA | Other | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Sales: | |||||||||||||||||||||||||||||
Third parties | 5,856 | 137 | 1,045 | 1,806 | 2,092 | 1,277 | 12,213 | ||||||||||||||||||||||
Intra-group | 7,223 | 5,616 | 1,517 | 4,616 | 4,755 | 1,187 | 24,914 | ||||||||||||||||||||||
Net proceeds | 13,079 | 5,753 | 2,562 | 6,422 | 6,847 | 2,464 | 37,127 | ||||||||||||||||||||||
Production costs(a) | 1,895 | 1,548 | 537 | 1,687 | 779 | 518 | 6,964 | ||||||||||||||||||||||
Exploration expense | 201 | 157 | 139 | 101 | 364 | 209 | 1,171 | ||||||||||||||||||||||
Depreciation, depletion and amortisation | 3,764 | 700 | 566 | 799 | 1,622 | 811 | 8,262 | ||||||||||||||||||||||
Other income/(costs) | (1,308 | ) | (353 | ) | 280 | (517 | ) | (340 | ) | (334 | ) | (2,572 | ) | ||||||||||||||||
Earnings before taxation | 5,911 | 2,995 | 1,600 | 3,318 | 3,742 | 592 | 18,158 | ||||||||||||||||||||||
Taxation | 3,559 | 2,448 | 350 | 2,795 | 1,298 | 186 | 10,636 | ||||||||||||||||||||||
Earnings from continuing operations | 2,352 | 547 | 1,250 | 523 | 2,444 | 406 | 7,522 | ||||||||||||||||||||||
Earnings from discontinued operations, net of tax | — | 144 | 109 | 105 | — | — | 358 | ||||||||||||||||||||||
Earnings from operations | 2,352 | 691 | 1,359 | 628 | 2,444 | 406 | 7,880 | ||||||||||||||||||||||
Earnings from oil sands | 290 | 290 |
F-45
Table of Contents
2003 | |||||||||||||||||||||||||||||
Western | |||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | ||||||||||||||||||||||||||||
Middle East, | |||||||||||||||||||||||||||||
Asia | Russia, | ||||||||||||||||||||||||||||
Europe | Africa | Pacific | CIS | USA | Other | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Sales: | |||||||||||||||||||||||||||||
Third parties | 5,386 | 129 | 808 | 1,640 | 1,903 | 1,115 | 10,981 | ||||||||||||||||||||||
Intra-group | 5,873 | 3,888 | 1,179 | 3,713 | 4,480 | 713 | 19,846 | ||||||||||||||||||||||
Net proceeds | 11,259 | 4,017 | 1,987 | 5,353 | 6,383 | 1,828 | 30,827 | ||||||||||||||||||||||
Production costs(a) | 1,886 | 1,087 | 419 | 1,408 | 603 | 366 | 5,769 | ||||||||||||||||||||||
Exploration expense | 229 | 235 | 112 | 121 | 275 | 144 | 1,116 | ||||||||||||||||||||||
Depreciation, depletion and amortisation | 3,723 | 462 | 539 | 585 | 1,667 | 681 | 7,657 | ||||||||||||||||||||||
Other income/(costs) | (512 | ) | (187 | ) | 238 | (443 | ) | 30 | (240 | ) | (1,114 | ) | |||||||||||||||||
Earnings before taxation | 4,909 | 2,046 | 1,155 | 2,796 | 3,868 | 397 | 15,171 | ||||||||||||||||||||||
Taxation | 1,686 | 1,437 | 217 | 2,239 | 1,497 | 204 | 7,280 | ||||||||||||||||||||||
Earnings from continuing operations | 3,223 | 609 | 938 | 557 | 2,371 | 193 | 7,891 | ||||||||||||||||||||||
Earnings from discontinued operations, net of tax | — | (16 | ) | 68 | 26 | — | — | 78 | |||||||||||||||||||||
Earnings from operations | 3,223 | 593 | 1,006 | 583 | 2,371 | 193 | 7,969 | ||||||||||||||||||||||
Earnings from oil sands | (101 | ) | (101 | ) |
2002 | |||||||||||||||||||||||||||||
Western | |||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | ||||||||||||||||||||||||||||
Middle East, | |||||||||||||||||||||||||||||
Asia | Russia, | ||||||||||||||||||||||||||||
Europe | Africa | Pacific | CIS | USA | Other | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Sales: | |||||||||||||||||||||||||||||
Third parties | 5,472 | 73 | 763 | 1,772 | 1,997 | 892 | 10,969 | ||||||||||||||||||||||
Intra-group | 4,572 | 2,538 | 1,186 | 3,087 | 2,863 | 433 | 14,679 | ||||||||||||||||||||||
Net proceeds | 10,044 | 2,611 | 1,949 | 4,859 | 4,860 | 1,325 | 25,648 | ||||||||||||||||||||||
Production costs(a) | 1,826 | 754 | 420 | 1,275 | 589 | 298 | 5,162 | ||||||||||||||||||||||
Exploration expense | 177 | 204 | 58 | 81 | 249 | 208 | 977 | ||||||||||||||||||||||
Depreciation, depletion and amortisation | 2,469 | 458 | 572 | 777 | 1,461 | 265 | 6,002 | ||||||||||||||||||||||
Other income/(costs) | (428 | ) | (97 | ) | 160 | (654 | ) | (221 | ) | (219 | ) | (1,459 | ) | ||||||||||||||||
Earnings before taxation | 5,144 | 1,098 | 1,059 | 2,072 | 2,340 | 335 | 12,048 | ||||||||||||||||||||||
Taxation | 2,340 | 789 | 294 | 1,638 | 791 | 93 | 5,945 | ||||||||||||||||||||||
Earnings from continuing operations | 2,804 | 309 | 765 | 434 | 1,549 | 242 | 6,103 | ||||||||||||||||||||||
Earnings from discontinued operations, net of tax | — | (15 | ) | 70 | 30 | — | — | 85 | |||||||||||||||||||||
Earnings from operations | 2,804 | 294 | 835 | 464 | 1,549 | 242 | 6,188 | ||||||||||||||||||||||
Earnings from oil sands | (3 | ) | (3 | ) |
(a) | Includes certain royalties paid in cash amounting to $2,019 million in 2004 (2003: $1,700 million; 2002: $1,449 million). |
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26 | Auditors’ remuneration |
Remuneration of KPMG and PricewaterhouseCoopers | 2004 | 2003 | 2002 | |||||||||
$ million | ||||||||||||
Audit fees | 42 | 32 | 27 | |||||||||
Audit-related fees(a) | 13 | 11 | 17 | |||||||||
Tax fees(b) | 9 | 7 | 6 | |||||||||
Fees for all other non-audit services | 6 | 6 | 12 |
(a) | Fees for audit-related services such as employee benefit plan audits, due diligence assistance, assurance of non-financial data, operational audits, training services and special investigations. | |
(b) | Fees for tax compliance, tax advice and tax planning services. |
27 | Contingencies and litigation |
$ billion | ||||
In respect of debt | 1.7 | |||
In respect of customs duties | 0.5 | |||
Other | 0.7 | |||
2.9 | ||||
• | While the majority of the cases have been consolidated for pre-trial proceedings in the U.S. District Court for the Southern District of New York, there are many cases pending in other jurisdictions throughout the U.S. Most of the cases are at a preliminary stage. In many matters, little discovery has been taken and the |
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courts have yet to rule upon motions on substantive legal issues. Consequently, management of the Shell Group does not have sufficient information to assess the facts underlying the plaintiffs’ claims; the nature and extent of damages claimed, if any; the reasonableness of any specific claim for money damages; the allocation of potential responsibility among defendants; or the law that may be applicable. Additionally, given the pendency of cases in varying jurisdictions, there may be inconsistencies in the determinations made in these matters. | ||
• | There are significant unresolved legal questions relating to claims asserted in this litigation. For example, it has not been established whether the use of oxygenates mandated by the 1990 amendments to the Clean Air Act can give rise to a products liability based claim. While some trial courts have held that it cannot, other courts have left the question open or declined to dismiss claims brought on a products liability theory. Other examples of unresolved legal questions relate to the applicability of federal preemption, whether a plaintiff may recover damages for alleged levels of contamination significantly below state environmental standards, and whether a plaintiff may recover for an alleged threat to groundwater before detection of contamination. | |
• | There are also significant unresolved legal questions relating to whether punitive damages are available for products liability claims or, if available, the manner in which they might be determined. For example, some courts have held that for certain types of product liability claims, punitive damages are not available. It is not known whether that rule of law would be applied in some or all of the pending oxygenate additive cases. Where specific claims for damages have been made, punitive damages represent in most cases a majority of the total amounts claimed. | |
• | There are significant issues relating to the allocation of any liability among the defendants. Virtually all of the oxygenate additives cases involve multiple defendants including most of the major participants in the retail gasoline marketing business in the regions involved in the pending cases. The basis on which any potential liability may be apportioned among the defendants in any particular pending case cannot yet be determined. |
F-48
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F-49
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F-50
Table of Contents
2004 | 2003 | |||||||||||||||
Contract/ | Contract/ | |||||||||||||||
notional | Estimated | notional | Estimated | |||||||||||||
amount | fair value | amount | fair value | |||||||||||||
$ million | ||||||||||||||||
Interest rate swaps/forward rate agreements | 4,307 | 70 | 4,322 | 121 | ||||||||||||
Forward exchange contracts and currency swaps/options | 18,830 | 53 | 18,874 | 165 | ||||||||||||
Commodity swaps, options and futures | 101,021 | 81 | 65,800 | 61 | ||||||||||||
124,158 | 204 | 88,996 | 347 | |||||||||||||
F-51
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F-52
Table of Contents
2004 | 2003 | 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Western | Western | Western | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | Eastern Hemisphere | Hemisphere | Eastern Hemisphere | Hemisphere | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Middle | Middle | Middle | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
East | Americas | East, | East, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia | Russia, | Asia | Russia, | Asia | Russia, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
million barrels(a) | million barrels | million barrels | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 1,199 | 1,379 | 303 | 1,202 | 547 | 379 | 5,009 | 1,377 | 1,449 | 323 | 1,446 | 717 | 470 | 5,782 | 1,013 | 1,308 | 426 | 1,677 | 672 | 504 | 5,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions and reclassifications | (27 | ) | (46 | ) | 13 | 80 | (2 | ) | (197 | ) | (179 | ) | 88 | (102 | ) | 21 | (204 | ) | (54 | ) | (57 | ) | (308 | ) | 99 | 89 | (27 | ) | (26 | ) | 77 | (42 | ) | 170 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Improved recovery | 6 | 2 | — | 4 | — | — | 12 | 5 | (6 | ) | 16 | 10 | 8 | 1 | 34 | 13 | — | 6 | 47 | 51 | — | 117 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions and discoveries | 5 | 13 | 10 | 68 | 12 | 2 | 110 | 12 | 171 | — | 128 | 9 | 2 | 322 | — | 173 | 6 | — | 33 | — | 212 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of minerals in place | — | — | — | — | — | — | — | 1 | — | — | 3 | — | — | 4 | 507 | — | — | — | 7 | 41 | 555 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales of minerals in place | (2 | ) | (57 | ) | (35 | ) | — | — | — | (94 | ) | (39 | ) | — | — | — | (23 | ) | — | (62 | ) | (1 | ) | (19 | ) | (19 | ) | (62 | ) | (3 | ) | — | (104 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Production | (212 | ) | (146 | ) | (46 | ) | (172 | ) | (99 | ) | (38 | ) | (713 | ) | (245 | ) | (133 | ) | (57 | ) | (181 | ) | (110 | ) | (37 | ) | (763 | ) | (254 | ) | (102 | ) | (69 | ) | (190 | ) | (120 | ) | (33 | ) | (768 | ) | ||||||||||||||||||||||||||||||||||||||||||
Transfers to associated companies | — | — | — | (384 | ) | — | — | (384 | ) | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 969 | 1,145 | 245 | 798 | 458 | 146 | 3,761 | 1,199 | 1,379 | 303 | 1,202 | 547 | 379 | 5,009 | 1,377 | 1,449 | 323 | 1,446 | 717 | 470 | 5,782 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group share of associated companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 2 | — | 304 | 86 | 413 | — | 805 | 2 | — | 325 | 118 | 413 | — | 858 | 1 | — | 307 | — | 356 | — | 664 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions and reclassifications | — | — | (22 | ) | (13 | ) | 18 | — | (17 | ) | — | — | 1 | — | 41 | — | 42 | 1 | — | 55 | — | 65 | — | 121 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Improved recovery | — | — | 38 | — | — | — | 38 | — | — | 13 | — | — | — | 13 | — | — | 4 | — | — | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions and discoveries | — | — | — | — | — | — | — | — | — | 11 | 86 | — | — | 97 | — | — | 9 | — | 33 | — | 42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of minerals in place | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 121 | — | — | 121 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales of minerals in place | — | — | (1 | ) | — | — | — | (1 | ) | — | — | — | (117 | ) | — | — | (117 | ) | — | — | — | (1 | ) | — | — | (1 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production | — | — | (43 | ) | — | (39 | ) | — | (82 | ) | — | — | (46 | ) | (1 | ) | (41 | ) | — | (88 | ) | — | — | (50 | ) | (2 | ) | (41 | ) | — | (93 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers from Shell Group companies | — | — | — | 384 | — | — | 384 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 2 | — | 276 | 457 | 392 | — | 1,127 | 2 | — | 304 | 86 | 413 | — | 805 | 2 | — | 325 | 118 | 413 | — | 858 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minority Interests’ share of proved reserves of Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | — | 23 | 1 | 109 | — | 14 | 147 | — | 24 | 1 | 137 | — | 54 | 216 | — | 23 | 1 | 126 | — | 61 | 211 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
million barrels | million barrels | million barrels | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oil sands(e) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 572 | 572 | 517 | 517 | 594 | 594 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions and reclassifications | 72 | 72 | 10 | 10 | (77 | ) | (77 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions and discoveries | — | — | 60 | 60 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production | (29 | ) | (29 | ) | (15 | ) | (15 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 615 | 615 | 572 | 572 | 517 | 517 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minority Interests’ share of oil sands | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 135 | 135 | 126 | 126 | 115 | 115 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proved developed reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 962 | 777 | 184 | 864 | 291 | 191 | 3,269 | 1,063 | 674 | 194 | 1,023 | 371 | 191 | 3,516 | 750 | 662 | 245 | 1,089 | 429 | 212 | 3,387 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31(f) | 755 | 617 | 134 | 475 | 242 | 115 | 2,338 | 962 | 777 | 184 | 864 | 291 | 191 | 3,269 | 1,063 | 674 | 194 | 1,023 | 371 | 191 | 3,516 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group share of associated companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 1 | — | 224 | 1 | 364 | — | 590 | 1 | — | 206 | 15 | 365 | — | 587 | 1 | — | 208 | — | 330 | — | 539 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31(f) | 1 | — | 187 | 360 | 349 | — | 897 | 1 | — | 224 | 1 | 364 | — | 590 | 1 | — | 206 | 15 | 365 | — | 587 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | These quantities have not been adjusted to standard heat content. | |
(b) | Excludes Egypt. | |
(c) | Excludes Sakhalin. | |
(d) | Middle East and Former Soviet Union/Commonwealth of Independent States. Includes Caspian region, Egypt and Sakhalin. | |
(e) | Petroleum reserves from operations that do not qualify as oil and gas producing activities, such as our Athabasca Oil Sands Project, are not included in oil and gas reserves and are not considered in the standardised measure of discounted future cash flows for oil and gas reserves, which is found on page F-55. The petroleum reserves for the Athabasca Oil Sands Project are presented in this report net of royalty volumes. | |
(f) | After accounting for a transfer of proved developed reserves from Shell Group to associated companies of 360 million barrels at the end of 2004. |
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2004 | 2003 | 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Western | Western | Western | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | Eastern Hemisphere | Hemisphere | Eastern Hemisphere | Hemisphere | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Middle | Middle | Middle | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
East | Americas | East, | East, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia | Russia, | Asia | Russia, | Asia | Russia, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
thousand million standard cubic feet(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 19,876 | 2,743 | 7,352 | 3,628 | 3,143 | 1,628 | 38,370 | 21,284 | 1,692 | 7,862 | 1,118 | 3,842 | 1,959 | 37,757 | 22,022 | 1,780 | 9,031 | 1,777 | 3,663 | 2,257 | 40,530 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions and reclassifications | (270 | ) | (74 | ) | 125 | 138 | (100 | ) | (45 | ) | (226 | ) | (435 | ) | (688 | ) | 8 | (22 | ) | (70 | ) | (181 | ) | (1,388 | ) | (110 | ) | 1 | (680 | ) | (282 | ) | 162 | (123 | ) | (1,032 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Improved recovery | 9 | — | — | — | — | 4 | 13 | 4 | 506 | 17 | — | 10 | 30 | 567 | 6 | — | 150 | — | 20 | — | 176 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions and discoveries | 217 | — | 171 | 2,128 | 257 | 192 | 2,965 | 459 | 1,361 | 6 | 2,790 | 305 | 34 | 4,955 | 29 | — | 126 | — | 410 | 9 | 574 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of minerals in place | — | — | — | — | 9 | — | 9 | 6 | — | — | — | — | — | 6 | 673 | — | — | — | 208 | 12 | 893 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales of minerals in place | (48 | ) | — | (310 | ) | (258 | ) | — | (37 | ) | (653 | ) | (139 | ) | — | — | — | (389 | ) | (17 | ) | (545 | ) | (5 | ) | — | (212 | ) | — | (10 | ) | — | (227 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Production | (1,345 | ) | (137 | ) | (535 | ) | (253 | ) | (486 | ) | (197 | ) | (2,953 | ) | (1,303 | ) | (128 | ) | (541 | ) | (258 | ) | (555 | ) | (197 | ) | (2,982 | ) | (1,331 | ) | (89 | ) | (553 | ) | (377 | ) | (611 | ) | (196 | ) | (3,157 | ) | ||||||||||||||||||||||||||||||||||||||||||
At December 31 | 18,439 | 2,532 | 6,803 | 5,383 | 2,823 | 1,545 | 37,525 | 19,876 | 2,743 | 7,352 | 3,628 | 3,143 | 1,628 | 38,370 | 21,284 | 1,692 | 7,862 | 1,118 | 3,842 | 1,959 | 37,757 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group share of associated companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 39 | — | 3,122 | — | 27 | — | 3,188 | 44 | — | 3,243 | — | 21 | — | 3,308 | 48 | — | 2,943 | — | 15 | — | 3,006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revisions and reclassifications | — | — | 120 | — | (8 | ) | — | 112 | — | — | 106 | — | 9 | — | 115 | 1 | — | 434 | — | 7 | — | 442 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Improved recovery | — | — | 45 | — | — | — | 45 | 1 | — | 11 | — | — | — | 12 | — | — | 8 | — | — | — | 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extensions and discoveries | 5 | — | 1 | — | — | — | 6 | 1 | — | — | — | — | — | 1 | 3 | — | 80 | — | 1 | — | 84 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of minerals in place | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales of minerals in place | — | — | (55 | ) | — | — | — | (55 | ) | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production | (7 | ) | — | (246 | ) | — | (2 | ) | — | (255 | ) | (7 | ) | — | (238 | ) | — | (3 | ) | — | (248 | ) | (8 | ) | — | (222 | ) | — | (2 | ) | — | (232 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 37 | — | 2,987 | — | 17 | — | 3,041 | 39 | — | 3,122 | — | 27 | — | 3,188 | 44 | — | 3,243 | — | 21 | — | 3,308 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minority Interests’ share of proved reserves of Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 209 | — | 56 | 2,231 | — | 274 | 2,770 | — | — | 63 | 1,285 | — | 300 | 1,648 | — | — | 61 | 59 | — | 342 | 462 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proved developed reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 11,477 | 886 | 3,128 | 446 | 1,754 | 1,297 | 18,988 | 11,472 | 735 | 3,405 | 574 | 2,311 | 1,464 | 19,961 | 11,880 | 668 | 3,635 | 1,097 | 2,363 | 1,754 | 21,397 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 12,961 | 919 | 2,702 | 166 | 1,875 | 1,080 | 19,703 | 11,477 | 886 | 3,128 | 446 | 1,754 | 1,297 | 18,988 | 11,472 | 735 | 3,405 | 574 | 2,311 | 1,464 | 19,961 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group share of associated companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At January 1 | 34 | — | 1,825 | — | 22 | — | 1,881 | 38 | — | 1,776 | — | 17 | — | 1,831 | 41 | — | 1,759 | — | 11 | — | 1,811 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
At December 31 | 28 | — | 1,606 | — | 15 | — | 1,649 | 34 | — | 1,825 | — | 22 | — | 1,881 | 38 | — | 1,776 | — | 17 | — | 1,831 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | These quantities have not been adjusted to standard heat content. | |
(b) | Excludes Egypt. | |
(c) | Excludes Sakhalin. | |
(d) | Middle East and Former Soviet Union/Commonwealth of Independent States. Includes Caspian region, Egypt and Sakhalin. |
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2004 | 2003 | 2002 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Western | Western | Western | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eastern Hemisphere | Hemisphere | Eastern Hemisphere | Hemisphere | Eastern Hemisphere | Hemisphere | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Middle | Middle | Middle | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
East, | East, | East, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia | Russia, | Asia | Russia, | Asia | Russia, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | Europe | Africa(b) | Pacific(c) | CIS(d) | USA | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group companies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future cash inflows | 107,956 | 47,326 | 26,461 | 51,565 | 33,525 | 12,578 | 279,411 | 108,836 | 36,965 | 21,695 | 42,627 | 31,203 | 14,710 | 256,036 | 98,126 | 36,427 | 22,243 | 36,513 | 32,541 | 16,280 | 242,130 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future production costs | 29,641 | 13,354 | 4,882 | 10,020 | 5,354 | 3,600 | 66,851 | 20,241 | 6,347 | 4,365 | 7,579 | 4,949 | 4,156 | 47,637 | 18,721 | 5,034 | 3,563 | 5,174 | 4,841 | 3,673 | 41,006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future development costs | 11,778 | 4,928 | 3,669 | 10,216 | 1,841 | 834 | 33,266 | 6,541 | 4,661 | 2,528 | 9,679 | 3,085 | 1,315 | 27,809 | 4,783 | 4,670 | 2,397 | 2,844 | 3,201 | 1,532 | 19,427 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future tax expenses | 34,635 | 16,831 | 6,147 | 14,031 | 9,860 | 2,074 | 83,578 | 39,605 | 16,396 | 4,076 | 15,309 | 8,467 | 2,469 | 86,322 | 32,125 | 18,690 | 4,538 | 17,443 | 9,103 | 3,447 | 85,346 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future net cash flows | 31,902 | 12,213 | 11,763 | 17,298 | 16,470 | 6,070 | 95,716 | 42,449 | 9,561 | 10,726 | 10,060 | 14,702 | 6,770 | 94,268 | 42,497 | 8,033 | 11,745 | 11,052 | 15,396 | 7,628 | 96,351 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of discounting cash flows at 10% | 14,925 | 4,037 | 5,270 | 11,375 | 5,803 | 2,007 | 43,417 | 21,126 | 4,210 | 4,590 | 8,491 | 5,170 | 2,509 | 46,096 | 19,511 | 3,601 | 5,343 | 4,166 | 5,427 | 3,143 | 41,191 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Standardised measure of discounted future net cash flows | 16,977 | 8,176 | 6,493 | 5,923 | 10,667 | 4,063 | 52,299 | 21,323 | 5,351 | 6,136 | 1,569 | 9,532 | 4,261 | 48,172 | 22,986 | 4,432 | 6,402 | 6,886 | 9,969 | 4,485 | 55,160 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shell Group share of associated companies | 5,527 | 5,501 | �� | 5,600 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minority interests | 285 | 180 | 36 | 1,078 | — | 548 | 2,128 | – | 136 | 30 | (1,186 | ) | — | 547 | (473 | ) | — | 123 | 22 | 753 | — | 468 | 1,366 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | ||||||||||
$ million | ||||||||||||
At January 1 | 48,172 | 55,160 | 37,910 | |||||||||
Net changes in prices and production costs | 23,524 | 12,178 | 34,592 | |||||||||
Extensions, discoveries and improved recovery | 6,223 | 9,255 | 5,177 | |||||||||
Purchases and sales of minerals in place | (564 | ) | (2,558 | ) | 7,319 | |||||||
Revisions of previous reserve estimates | (385 | ) | (4,103 | ) | 375 | |||||||
Development cost related to future production | (6,829 | ) | (14,291 | ) | (6,168 | ) | ||||||
Sales and transfers of oil and gas, net of production costs(e) | (27,530 | ) | (24,892 | ) | (20,387 | ) | ||||||
Development cost incurred during the year | 9,386 | 8,205 | 6,503 | |||||||||
Accretion of discount | 7,947 | 9,051 | 6,053 | |||||||||
Net change in income tax | (7,645 | ) | 167 | (16,214 | ) | |||||||
At December 31 | 52,299 | 48,172 | 55,160 | |||||||||
(a) | The weighted average year-end spot oil price in 2004 was $37.61/bbl ($26.52/bbl in 2003, $24.49/bbl in 2002) and the weighted average year-end spot gas price in 2004 was $21.27/boe ($18.03/boe in 2003, $15.75/boe in 2002). | |
(b) | Excludes Egypt. | |
(c) | Excludes Sakhalin. | |
(d) | Middle East and Former Soviet Union / Commonwealth of Independent States. Includes Caspian region, Egypt and Sakhalin. | |
(e) | Includes a transfer of proved developed reserves from Shell Group to associated companies of 360 million barrels in 2004 ($260 million). |
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F-56
Table of Contents
Debt securities held for trading purposes |
Debt securities held for purposes other than trading |
2010 | |||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | and after | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
2004 | |||||||||||||||||||||||||||||
Fixed rate US dollar debt securities | 1,090 | 29 | 100 | 105 | 162 | 95 | 1,581 | ||||||||||||||||||||||
average Interest rate | 2.5 | % | 7.1 | % | 7.2 | % | 5.7 | % | 5.5 | % | 6.5 | % | |||||||||||||||||
Variable rate US dollar debt securities | 1 | — | — | — | — | — | 1 | ||||||||||||||||||||||
average Interest rate | 1.4 | % | — | — | — | — | — | ||||||||||||||||||||||
Fixed rate euro debt securities | 255 | 47 | 45 | — | 17 | 119 | 483 | ||||||||||||||||||||||
average Interest rate | 2.2 | % | 5.9 | % | 5.5 | % | — | 4.0 | % | 4.8 | % | ||||||||||||||||||
Fixed rate UK pound debt securities | 5 | — | — | 6 | — | 17 | 28 | ||||||||||||||||||||||
average Interest rate | 8.5 | % | — | — | 5.0 | % | — | 7.5 | % | ||||||||||||||||||||
Variable rate UK pound debt securities | 24 | — | — | — | — | — | 24 | ||||||||||||||||||||||
average Interest rate | 4.8 | % | — | — | — | — | — | ||||||||||||||||||||||
Fixed rate Canadian dollar debt securities | 106 | — | — | — | — | 10 | 116 | ||||||||||||||||||||||
average Interest rate | 2.5 | % | — | — | — | — | 8.1 | % | |||||||||||||||||||||
Other fixed rate debt securities | 1 | — | — | — | — | 14 | 15 | ||||||||||||||||||||||
average Interest rate | 4.9 | % | — | — | — | — | 5.8 | % | |||||||||||||||||||||
Other variable rate debt securities | 37 | — | — | — | — | — | 37 | ||||||||||||||||||||||
average Interest rate | 4.6 | % | — | — | — | — | — | ||||||||||||||||||||||
Total | 1,519 | 76 | 145 | 111 | 179 | 255 | 2,285 | ||||||||||||||||||||||
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2009 | |||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | and after | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
2003 | |||||||||||||||||||||||||||||
Fixed rate US dollar debt securities | 9 | 54 | 23 | 230 | 75 | 131 | 522 | ||||||||||||||||||||||
average Interest rate | 0.7 | % | 5.8 | % | 7.1 | % | 5.6 | % | 3.3 | % | 6.2 | % | |||||||||||||||||
Variable rate US dollar debt securities | 9 | — | — | — | — | — | 9 | ||||||||||||||||||||||
Average Interest rate | 1.4 | % | — | — | — | — | — | ||||||||||||||||||||||
Fixed rate euro debt securities | 5 | — | 48 | 42 | — | 109 | 204 | ||||||||||||||||||||||
average Interest rate | 1.9 | % | — | 6.1 | % | 5.3 | % | — | 5.7 | % | |||||||||||||||||||
Fixed rate UK pound debt securities | — | 8 | — | — | 10 | 5 | 23 | ||||||||||||||||||||||
average Interest rate | — | 8.5 | % | — | — | 5.7 | % | 7.0 | % | ||||||||||||||||||||
Fixed rate Canadian dollar debt securities | 39 | — | — | — | — | 8 | 47 | ||||||||||||||||||||||
average Interest rate | 2.7 | % | — | — | — | — | 9.6 | % | |||||||||||||||||||||
Fixed rate Swedish krone debt securities | — | — | — | — | — | 6 | 6 | ||||||||||||||||||||||
average Interest rate | — | — | — | — | — | 6.8 | % | ||||||||||||||||||||||
Fixed rate Danish krone debt securities | — | — | — | — | — | 7 | 7 | ||||||||||||||||||||||
average Interest rate | — | — | — | — | — | 5.0 | % | ||||||||||||||||||||||
Other fixed rate debt securities | 2 | — | — | — | — | — | 2 | ||||||||||||||||||||||
average Interest rate | 9.0 | % | — | — | — | — | — | ||||||||||||||||||||||
Other variable rate debt securities | 48 | — | — | — | — | — | 48 | ||||||||||||||||||||||
average Interest rate | 5.6 | % | — | — | — | — | — | ||||||||||||||||||||||
Total | 112 | 62 | 71 | 272 | 85 | 266 | 868 | ||||||||||||||||||||||
Equity securities held for purposes other than trading |
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Debt |
2010 | |||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | and after | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
2004 | |||||||||||||||||||||||||||||
Fixed rate US dollar debt | 4,200 | 676 | 1,115 | 85 | 91 | 2,073 | 8,240 | ||||||||||||||||||||||
average interest rate | 2.9 | % | 3.7 | % | 5.2 | % | 8.1 | % | 8.2 | % | 8.3 | % | |||||||||||||||||
Variable rate US dollar debt | 339 | 260 | 19 | 9 | 9 | 309 | 945 | ||||||||||||||||||||||
average interest rate | 7.5 | % | 1.8 | % | 3.6 | % | 3.6 | % | 3.7 | % | 5.8 | % | |||||||||||||||||
Fixed rate European debt | 294 | 723 | 1,322 | 419 | 1 | 2 | 2,761 | ||||||||||||||||||||||
average interest rate | 2.6 | % | 4.2 | % | 3.4 | % | 3.3 | % | 4.2 | % | 4.5 | % | |||||||||||||||||
Variable rate European debt | 20 | 1 | 1 | 1 | — | — | 23 | ||||||||||||||||||||||
average interest rate | 5.4 | % | 2.9 | % | 3.0 | % | 3.0 | % | 5.0 | % | 5.0 | % | |||||||||||||||||
Other fixed rate debt | 201 | 14 | 17 | 16 | 16 | 559 | 823 | ||||||||||||||||||||||
average interest rate | 3.6 | % | 6.6 | % | 5.6 | % | 6.9 | % | 6.9 | % | 7.3 | % | |||||||||||||||||
Other variable rate debt | 655 | 210 | — | — | — | — | 865 | ||||||||||||||||||||||
average interest rate | 7.3 | % | 2.8 | % | — | — | — | — | |||||||||||||||||||||
Total | 5,709 | 1,884 | 2,474 | 530 | 117 | 2,943 | 13,657 | ||||||||||||||||||||||
2009 | |||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | and after | Total | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
2003 | |||||||||||||||||||||||||||||
Fixed rate US dollar debt | 5,766 | 804 | 613 | 1,073 | 152 | 2,709 | 11,117 | ||||||||||||||||||||||
average interest rate | 1.2 | % | 4.8 | % | 3.2 | % | 5.0 | % | 5.5 | % | 7.9 | % | |||||||||||||||||
Variable rate US dollar debt | 1,654 | 144 | 169 | 17 | 9 | 316 | 2,309 | ||||||||||||||||||||||
average interest rate | 3.9 | % | 2.2 | % | 2.1 | % | 3.3 | % | 4.2 | % | 6.1 | % | |||||||||||||||||
Fixed rate European debt | 733 | 4 | 666 | 946 | 377 | 4 | 2,730 | ||||||||||||||||||||||
average interest rate | 8.6 | % | 3.6 | % | 4.2 | % | 3.3 | % | 3.5 | % | 3.7 | % | |||||||||||||||||
Variable rate European debt | 1,173 | 2 | 3 | 3 | 1 | — | 1,182 | ||||||||||||||||||||||
average interest rate | 2.3 | % | 4.3 | % | 4.1 | % | 4.1 | % | 4.6 | % | 5.3 | % | |||||||||||||||||
Other fixed rate debt | 203 | 3 | 33 | 1 | — | 180 | 420 | ||||||||||||||||||||||
average interest rate | 5.0 | % | 4.2 | % | 10.5 | % | 5.5 | % | 5.5 | % | 7.5 | % | |||||||||||||||||
Other variable rate debt | 931 | 255 | 42 | 27 | 22 | 17 | 1,294 | ||||||||||||||||||||||
average interest rate | 6.8 | % | 5.3 | % | 4.0 | % | 4.8 | % | 4.8 | % | 4.8 | % | |||||||||||||||||
Total | 10,460 | 1,212 | 1,526 | 2,067 | 561 | 3,226 | 19,052 | ||||||||||||||||||||||
F-59
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Interest rate swaps/forward rate agreements |
2009 | Total contract/ | Estimated | |||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | and after | notional amount | fair value | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
2004 | |||||||||||||||||||||||||||||
US dollar | |||||||||||||||||||||||||||||
Fixed to Variable: | |||||||||||||||||||||||||||||
contract/notional amount | 801 | 600 | 1,000 | 300 | — | 2,701 | 72 | ||||||||||||||||||||||
average pay rate | 1.7 | % | 1.3 | % | 1.4 | % | 1.4 | % | — | ||||||||||||||||||||
average receive rate | 5.1 | % | 3.1 | % | 5.0 | 3.3 | % | — | |||||||||||||||||||||
Variable to Fixed: | |||||||||||||||||||||||||||||
contract/notional amount | 264 | — | 122 | 88 | — | 474 | (17 | ) | |||||||||||||||||||||
average pay rate | 2.8 | % | — | 7.2 | % | 6.2 | % | — | |||||||||||||||||||||
average receive rate | 3.3 | % | — | 4.4 | % | 7.3 | % | — | |||||||||||||||||||||
UK pound | |||||||||||||||||||||||||||||
Fixed to Variable: | |||||||||||||||||||||||||||||
contract/notional amount | — | 723 | — | — | — | 723 | 8 | ||||||||||||||||||||||
average pay rate | — | 4.5 | % | — | — | — | |||||||||||||||||||||||
average receive rate | — | 4.3 | % | — | — | — | |||||||||||||||||||||||
Euro | |||||||||||||||||||||||||||||
Fixed to Variable: | |||||||||||||||||||||||||||||
contract/notional amount | — | — | — | 409 | — | 409 | 7 | ||||||||||||||||||||||
average pay rate | — | — | — | 2.0 | % | — | |||||||||||||||||||||||
average receive rate | — | — | — | 3.3 | % | — | |||||||||||||||||||||||
Total | 1,065 | 1,323 | 1,122 | 797 | — | 4,307 | 70 | ||||||||||||||||||||||
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2008 | Total contract/ | Estimated | |||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | and after | notional amount | fair value | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
2003 | |||||||||||||||||||||||||||||
US dollar | |||||||||||||||||||||||||||||
Fixed to Variable: | |||||||||||||||||||||||||||||
contract/notional amount | — | 1,801 | 600 | — | 400 | 2,801 | 140 | ||||||||||||||||||||||
average pay rate | — | 1.3 | % | 1.1 | % | — | 0.9% | ||||||||||||||||||||||
average receive rate | — | 5.0 | % | 3.1 | % | — | 3.2% | ||||||||||||||||||||||
Variable to Fixed: | |||||||||||||||||||||||||||||
contract/notional amount | — | 264 | — | 122 | 88 | 474 | (25 | ) | |||||||||||||||||||||
average pay rate | — | 2.8 | % | — | 7.2 | % | 6.8% | ||||||||||||||||||||||
average receive rate | — | 3.2 | % | — | 4.2 | % | 7.3% | ||||||||||||||||||||||
UK pound | |||||||||||||||||||||||||||||
Fixed to Variable: | |||||||||||||||||||||||||||||
contract/notional amount | — | — | 669 | — | — | 669 | 11 | ||||||||||||||||||||||
average pay rate | — | — | 3.6 | % | — | — | |||||||||||||||||||||||
average receive rate | — | — | 4.3 | % | — | — | |||||||||||||||||||||||
Euro | |||||||||||||||||||||||||||||
Fixed to Variable: | |||||||||||||||||||||||||||||
contract/notional amount | — | — | — | — | 378 | 378 | (5 | ) | |||||||||||||||||||||
average pay rate | — | — | — | — | 2.1% | ||||||||||||||||||||||||
average receive rate | — | — | — | — | 3.3% | ||||||||||||||||||||||||
Total | — | 2,065 | 1,269 | 122 | 866 | 4,322 | 121 | ||||||||||||||||||||||
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Foreign exchange contracts |
Average contractual | Contract/notional | Estimated | ||||||||||
exchange rate | amount | fair value | ||||||||||
$ million | ||||||||||||
2004 (all contracts mature in 2005) | ||||||||||||
Buy euro/sell US dollar | 1.34 | 3,919 | 81 | |||||||||
Buy US dollar/sell euro | 0.74 | 2,124 | (19 | ) | ||||||||
Buy euro/sell UK pound | 0.70 | 1,836 | 35 | |||||||||
Buy UK pound/sell US dollar | 1.89 | 1,376 | 25 | |||||||||
Buy US dollar/sell Australian dollar | 1.30 | 1,024 | (9 | ) | ||||||||
Buy US dollar/sell Norwegian krone | 6.26 | 741 | (27 | ) | ||||||||
Buy Singapore dollar/sell US dollar | 0.61 | 401 | 2 | |||||||||
Buy New Zealand dollar/sell US dollar | 0.71 | 335 | 2 | |||||||||
Buy Canadian dollar/sell US dollar | 0.79 | 208 | 11 | |||||||||
Buy Norwegian krone/sell US dollar | 0.16 | 202 | 1 | |||||||||
Buy US dollar/sell Philippine peso | 56.19 | 172 | — | |||||||||
Buy US dollar/sell Swedish krone | 6.61 | 141 | — | |||||||||
Buy euro/sell Polish zloty | 4.10 | 134 | — | |||||||||
Buy US dollar/sell Hong Kong dollar | 7.77 | 131 | — | |||||||||
Other contracts | 1,176 | (7 | ) | |||||||||
Total | 13,920 | 95 | ||||||||||
Average contractual | Contract/notional | Estimated | ||||||||||
exchange rate | amount | fair value | ||||||||||
$ million | ||||||||||||
2003 (all contracts mature in 2004) | ||||||||||||
Buy US dollar/sell UK pound | 0.59 | 2,255 | (118 | ) | ||||||||
Buy US dollar/sell euro | 0.80 | 1,897 | (26 | ) | ||||||||
Buy euro/sell US dollar | 1.18 | 2,742 | 177 | |||||||||
Buy UK pound/sell US dollar | 1.73 | 1,017 | 3 | |||||||||
Buy euro/sell UK pound | 0.69 | 824 | 24 | |||||||||
Buy US dollar/sell Australian dollar | 1.36 | 422 | (7 | ) | ||||||||
Buy Swiss franc/sell US dollar | 0.77 | 431 | 24 | |||||||||
Buy US dollar/sell Norwegian krone | 6.67 | 672 | (18 | ) | ||||||||
Buy Singapore dollar/sell US dollar | 0.58 | 381 | 2 | |||||||||
Buy US dollar/sell Danish krone | 5.88 | 239 | (3 | ) | ||||||||
Buy US dollar/sell Swedish krone | 7.14 | 429 | (3 | ) | ||||||||
Buy Swedish krona/sell US dollar | 0.14 | 217 | 1 | |||||||||
Buy euro/sell Norwegian krone | 8.33 | 127 | 5 | |||||||||
Buy US dollar/sell Philippine peso | 55.87 | 118 | — | |||||||||
Other contracts | 1,074 | 25 | ||||||||||
Total | 12,845 | 86 | ||||||||||
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Currency swaps/options |
Average | ||||||||||||||||||||||||||||||||||||
contractual | 2010 | Total contract/ | Estimated | |||||||||||||||||||||||||||||||||
exchange rate | 2005 | 2006 | 2007 | 2008 | 2009 | and after | notional amount | fair value | ||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||
2004 | ||||||||||||||||||||||||||||||||||||
Buy UK pound/sell euro | 1.54 | — | — | 924 | 410 | — | — | 1,334 | 139 | |||||||||||||||||||||||||||
Buy US dollar/sell Canadian dollar | 1.40 | 867 | 606 | 441 | 296 | 132 | — | 2,342 | (175 | ) | ||||||||||||||||||||||||||
Buy Canadian dollar/sell US dollar | 0.69 | 283 | 85 | 59 | 33 | 3 | — | 463 | 35 | |||||||||||||||||||||||||||
Buy US dollar/sell Brazilian real | 2.85 | 101 | 5 | 89 | 61 | — | — | 256 | (60 | ) | ||||||||||||||||||||||||||
Buy UK pound/sell US dollar | 1.74 | 37 | 31 | 24 | 18 | 14 | 213 | 337 | 26 | |||||||||||||||||||||||||||
Buy US dollar/sell Thai baht | 39.94 | 142 | — | — | — | — | — | 142 | (3 | ) | ||||||||||||||||||||||||||
Other contracts | — | 36 | — | — | — | — | — | 36 | (4 | ) | ||||||||||||||||||||||||||
Total | 1,466 | 727 | 1,537 | 818 | 149 | 213 | 4,910 | (42 | ) | |||||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||||||||||||
contractual | 2009 | Total contract/ | Estimated | |||||||||||||||||||||||||||||||||
exchange rate | 2004 | 2005 | 2006 | 2007 | 2008 | and after | notional amount | fair value | ||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||
2003 | ||||||||||||||||||||||||||||||||||||
Buy UK pound/sell euro | 1.54 | 338 | — | — | 855 | 378 | — | 1,571 | 173 | |||||||||||||||||||||||||||
Buy US dollar/sell Canadian dollar | 1.31 | 1,136 | 640 | 358 | 209 | 96 | — | 2,439 | (126 | ) | ||||||||||||||||||||||||||
Buy US dollar/sell euro | 1.09 | 461 | — | — | — | — | — | 461 | 171 | |||||||||||||||||||||||||||
Buy Australian dollar/sell US dollar | 1.67 | 472 | — | — | — | — | — | 472 | (130 | ) | ||||||||||||||||||||||||||
Buy Canadian dollar/sell US dollar | 0.67 | 324 | 91 | 56 | 46 | 17 | — | 534 | 34 | |||||||||||||||||||||||||||
Buy US dollar/sell Brazilian real | 2.82 | 121 | 47 | — | 71 | — | 15 | 254 | (39 | ) | ||||||||||||||||||||||||||
Buy UK pound/sell US dollar | 1.74 | 14 | 18 | 5 | — | — | 144 | 181 | 1 | |||||||||||||||||||||||||||
Other contracts | 98 | 18 | 1 | — | — | — | 117 | (5 | ) | |||||||||||||||||||||||||||
Total | 2,964 | 814 | 420 | 1,181 | 491 | 159 | 6,029 | 79 | ||||||||||||||||||||||||||||
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Commodity derivatives |
Commodity swaps held for trading purposes |
2010 and | Total contract/ | Estimated | |||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | after | notional amount | fair value | ||||||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||||||
2004 | |||||||||||||||||||||||||||||||||
Crude oil swaps | |||||||||||||||||||||||||||||||||
(a) Variable price to variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 1,776 | 30 | — | — | — | — | 1,806 | (8 | ) | ||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 42 | 1 | — | — | — | — | |||||||||||||||||||||||||||
average pay | 42.3 | 41.6 | — | — | — | — | |||||||||||||||||||||||||||
average receive | 42.1 | 41.5 | — | — | — | — | |||||||||||||||||||||||||||
(b) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 1,843 | 397 | 49 | 13 | — | — | 2,302 | 390 | |||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 54 | 13 | 2 | * | — | — | |||||||||||||||||||||||||||
average pay | 34.3 | 31.5 | 32.6 | 36.4 | — | — | |||||||||||||||||||||||||||
average receive | 39.6 | 39.3 | 38.0 | 37.9 | — | — | |||||||||||||||||||||||||||
(c) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 2,304 | 286 | 38 | 10 | — | — | 2,638 | (350 | ) | ||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 64 | 9 | 1 | * | — | — | |||||||||||||||||||||||||||
average pay | 40.3 | 38.7 | 37.8 | 37.9 | — | — | |||||||||||||||||||||||||||
average receive | 36.1 | 30.7 | 32.9 | 36.3 | — | — | |||||||||||||||||||||||||||
Crude oil basis swaps | |||||||||||||||||||||||||||||||||
(a) Buy variable/sell variable price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 53 | — | — | — | — | — | 53 | (8 | ) | ||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 34 | — | — | — | — | — | |||||||||||||||||||||||||||
average pay | 3.9 | — | — | — | — | — | |||||||||||||||||||||||||||
average receive | 1.8 | — | — | — | — | — | |||||||||||||||||||||||||||
(b) Sell variable/buy variable price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 2 | — | — | — | — | — | 2 | — | |||||||||||||||||||||||||
Volume (million barrels “m bbl”) | * | — | — | — | — | — | |||||||||||||||||||||||||||
average pay | 4.0 | — | — | — | — | — | |||||||||||||||||||||||||||
average receive | 4.5 | — | — | — | — | — | |||||||||||||||||||||||||||
Crude oil freight swaps | |||||||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 53 | — | — | — | — | — | 53 | (7 | ) | ||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 29 | — | — | — | — | — | |||||||||||||||||||||||||||
average pay | 1.9 | — | — | — | — | — | |||||||||||||||||||||||||||
average receive | 1.7 | — | — | — | — | — | |||||||||||||||||||||||||||
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2010 and | Total contract/ | Estimated | |||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | after | notional amount | fair value | ||||||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 63 | — | — | — | — | — | 63 | 1 | |||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 47 | — | — | — | — | — | |||||||||||||||||||||||||||
average pay | 1.3 | — | — | — | — | — | |||||||||||||||||||||||||||
average receive | 1.4 | — | — | — | — | — | |||||||||||||||||||||||||||
Oil products swaps | |||||||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 3,055 | 106 | — | — | — | — | 3,161 | (111 | ) | ||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 117 | 3 | — | — | — | — | |||||||||||||||||||||||||||
average pay | 26.0 | 39.4 | — | — | — | — | |||||||||||||||||||||||||||
average receive | 25.1 | 40.3 | — | — | — | — | |||||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 3,193 | 158 | — | — | — | 11 | 3,362 | 95 | |||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 121 | 4 | — | — | — | * | |||||||||||||||||||||||||||
average pay | 25.5 | 39.6 | — | — | — | 41.3 | |||||||||||||||||||||||||||
average receive | 26.3 | 37.5 | — | — | — | 38.4 | |||||||||||||||||||||||||||
(c) Buy variable/sell variable price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 810 | 15 | — | — | — | — | 825 | 1 | |||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 16 | * | — | — | — | — | |||||||||||||||||||||||||||
average pay | 49.3 | 48.5 | — | — | — | — | |||||||||||||||||||||||||||
average receive | 49.4 | 48.6 | — | — | — | — | |||||||||||||||||||||||||||
Oil products basis swaps | |||||||||||||||||||||||||||||||||
(a) Buy variable/sell variable price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 1,020 | 30 | — | — | — | — | 1,050 | (8 | ) | ||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 170 | 4 | — | — | — | — | |||||||||||||||||||||||||||
average pay | 5.8 | 8.5 | — | — | — | — | |||||||||||||||||||||||||||
average receive | 5.7 | 8.6 | — | — | — | — | |||||||||||||||||||||||||||
(b) Sell variable/buy variable price contracts | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 137 | — | — | — | — | — | 137 | 23 | |||||||||||||||||||||||||
Volume (million barrels “m bbl”) | 18 | — | — | — | — | — | |||||||||||||||||||||||||||
average pay | 7.5 | — | — | — | — | — | |||||||||||||||||||||||||||
average receive | 8.7 | — | — | — | — | — | |||||||||||||||||||||||||||
Electricity swaps | |||||||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 3,268 | 1,296 | 341 | 25 | 2 | — | 4,932 | (2 | ) | ||||||||||||||||||||||||
Volume (thousand megawatt hours) | 57 | 24 | 7 | 0 | 0 | — | |||||||||||||||||||||||||||
average pay | 57.0 | 55.0 | 52.4 | 64.3 | 60.5 | — | |||||||||||||||||||||||||||
average receive | 55.8 | 56.6 | 56.4 | 65.1 | 56.5 | — | |||||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 3,250 | 1,245 | 391 | 54 | 6 | — | 4,946 | (14 | ) | ||||||||||||||||||||||||
Volume (thousand megawatt hours) | 57 | 23 | 7 | 1 | * | — | |||||||||||||||||||||||||||
average pay | 56.1 | 56.4 | 57.0 | 60.6 | 57.3 | — | |||||||||||||||||||||||||||
average receive | 57.4 | 55.3 | 53.3 | 59.6 | 61.3 | — | |||||||||||||||||||||||||||
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2010 and | Total contract/ | Estimated | |||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | after | notional amount | fair value | ||||||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||||||
Natural gas swaps | |||||||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 5,947 | 1,350 | 308 | 312 | 70 | — | 7,987 | 188 | |||||||||||||||||||||||||
Volume (thousand million cubic feet “bcf”) | 923 | 223 | 53 | 55 | 13 | — | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 6.4 | 6.1 | 5.8 | 5.2 | 4.6 | — | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 6.4 | 6.5 | 6.0 | 5.5 | 5.1 | — | |||||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 6,267 | 1,005 | 426 | 409 | 206 | 57 | 8,370 | 123 | |||||||||||||||||||||||||
Volume (thousand million cubic feet “bcf”) | 954 | 162 | 70 | 69 | 37 | 11 | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 6.4 | 6.6 | 6.0 | 5.7 | 5.5 | 5.2 | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 6.6 | 6.2 | 6.1 | 5.9 | 5.6 | 5.1 | |||||||||||||||||||||||||||
(c) Buy variable price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 404 | 8 | — | — | — | — | 412 | 7 | |||||||||||||||||||||||||
Volume (thousand million cubic feet “bcf”) | 64 | 1 | — | — | — | — | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 6.4 | 6.6 | — | — | — | — | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 6.5 | 6.6 | — | — | — | — | |||||||||||||||||||||||||||
Natural gas basis swaps | |||||||||||||||||||||||||||||||||
(a) Buy variable price/sell variable price | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 455 | 184 | 60 | 35 | 22 | 10 | 766 | (134 | ) | ||||||||||||||||||||||||
Volume (thousand million cubic feet “bcf”) | 903 | 365 | 116 | 72 | 43 | 24 | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 0.5 | 0.6 | 0.7 | 0.6 | 0.6 | 0.5 | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 0.4 | 0.4 | 0.5 | 0.5 | 0.5 | 0.3 | |||||||||||||||||||||||||||
(b) Sell variable price/buy variable price | |||||||||||||||||||||||||||||||||
contract/notional amount ($ millions) | 388 | 135 | 20 | 18 | 4 | 3 | 568 | 139 | |||||||||||||||||||||||||
Volume (thousand million cubic feet “bcf”) | 827 | 281 | 56 | 56 | 18 | 15 | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 0.3 | 0.3 | 0.3 | 0.3 | 0.0 | 0.0 | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 0.4 | 0.5 | 0.5 | 0.4 | 0.3 | 0.2 | |||||||||||||||||||||||||||
43,433 | 325 | ||||||||||||||||||||||||||||||||
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Total contract/ | Estimated | ||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | notional amount | fair value | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
2003 | |||||||||||||||||||||||||||||
Crude oil swaps | |||||||||||||||||||||||||||||
(a) Variable price to variable price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 2,671 | 13 | — | — | — | 2,684 | (3 | ) | |||||||||||||||||||||
Volume (million barrels “m bbl”) | 84 | * | — | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 31.9 | 26.3 | — | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 31.9 | 26.3 | — | — | — | ||||||||||||||||||||||||
(b) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 1,452 | 272 | 63 | — | — | 1,787 | 230 | ||||||||||||||||||||||
Volume (m bbl) | 58 | 11 | 3 | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 25.0 | 24.3 | 24.2 | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 28.3 | 28.0 | 26.1 | — | — | ||||||||||||||||||||||||
(c) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 1,364 | 241 | 13 | — | — | 1,618 | (160 | ) | |||||||||||||||||||||
Volume (m bbl) | 58 | 10 | 1 | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 28.9 | 24.5 | 26.7 | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 27.1 | 23.2 | 23.8 | — | — | ||||||||||||||||||||||||
Crude oil basis swaps | |||||||||||||||||||||||||||||
(a) Buy variable price/sell variable price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 2 | — | — | — | — | 2 | — | ||||||||||||||||||||||
Volume (m bbl) | 5 | — | — | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 1.0 | — | — | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 0.3 | — | — | — | — | ||||||||||||||||||||||||
(b) Sell variable price/buy variable price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 3 | — | — | — | — | 3 | (1 | ) | |||||||||||||||||||||
Volume (m bbl) | 2 | — | — | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 0.5 | — | — | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 1.5 | — | — | — | — | ||||||||||||||||||||||||
Crude oil freight swaps | |||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 10 | — | — | — | — | 10 | 1 | ||||||||||||||||||||||
Volume (m bbl) | 9 | — | — | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 1.2 | — | — | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 1.4 | — | — | — | — | ||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 53 | — | — | — | — | 53 | (9 | ) | |||||||||||||||||||||
Volume (m bbl) | 79 | — | — | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 0.8 | — | — | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 0.7 | — | — | — | — | ||||||||||||||||||||||||
Oil products swaps | |||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 853 | 19 | — | — | — | 872 | 42 | ||||||||||||||||||||||
Volume (m bbl) | 34 | 1 | — | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 25.4 | 19.9 | — | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 26.4 | 22.2 | — | — | — | ||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||
contract/notional amount ($ million) | 934 | 4 | 11 | — | — | 949 | (46 | ) | |||||||||||||||||||||
Volume (m bbl) | 40 | * | 1 | — | — | ||||||||||||||||||||||||
average pay ($/bbl) | 24.3 | 23.8 | 24.3 | — | — | ||||||||||||||||||||||||
average receive ($/bbl) | 23.2 | 22.6 | 21.7 | — | — | ||||||||||||||||||||||||
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2009 | Total contract/ | Estimated | |||||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | and after | notional amount | fair value | ||||||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||||||
Oil products basis swaps | |||||||||||||||||||||||||||||||||
(a) Buy variable price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 268 | — | — | — | — | — | 268 | (16 | ) | ||||||||||||||||||||||||
Volume (m bbl) | 94 | — | — | — | — | — | |||||||||||||||||||||||||||
average pay ($/bbl) | 1.8 | — | — | — | — | — | |||||||||||||||||||||||||||
average receive ($/bbl) | 2.9 | — | — | — | — | — | |||||||||||||||||||||||||||
(b) Sell variable price/buy variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 95 | — | — | — | — | — | 95 | 13 | |||||||||||||||||||||||||
Volume (m bbl) | 20 | — | — | — | — | — | |||||||||||||||||||||||||||
average pay ($/bbl) | 0.2 | — | — | — | — | — | |||||||||||||||||||||||||||
average receive ($/bbl) | 5.4 | — | — | — | — | — | |||||||||||||||||||||||||||
Electricity swaps | |||||||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 832 | 177 | 147 | 88 | 12 | — | 1,256 | 35 | |||||||||||||||||||||||||
Volume (thousand megawatt hours “MMwh”) | 17 | 3 | 3 | 2 | ** | — | |||||||||||||||||||||||||||
average pay ($/Mwh) | 50.5 | 51.3 | 50.4 | 51.9 | 66.3 | — | |||||||||||||||||||||||||||
average receive ($/Mwh) | 52.9 | 51.4 | 49.0 | 51.0 | 61.3 | — | |||||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 803 | 188 | 120 | 124 | 33 | — | 1,268 | 1 | |||||||||||||||||||||||||
Volume (MMwh) | 16 | 3 | 2 | 2 | 1 | — | |||||||||||||||||||||||||||
average pay ($/Mwh) | 54.1 | 54.9 | 53.8 | 53.5 | 59.5 | — | |||||||||||||||||||||||||||
average receive ($/Mwh) | 54.9 | 53.1 | 52.3 | 52.2 | 56.4 | — | |||||||||||||||||||||||||||
Natural gas swaps | |||||||||||||||||||||||||||||||||
(a) Buy fixed price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 5,212 | 485 | 135 | 47 | — | — | 5,879 | 750 | |||||||||||||||||||||||||
Volume (thousand million cubic feet “bcf”) | 1,005 | 109 | 32 | 9 | — | — | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 5.2 | 4.5 | 4.1 | 5.0 | — | — | |||||||||||||||||||||||||||
average receive($/thousand cf) | 5.8 | 5.2 | 4.8 | 5.0 | — | — | |||||||||||||||||||||||||||
(b) Buy variable price/sell fixed price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 5,362 | 391 | 27 | 4 | 4 | 7 | 5,795 | (711 | ) | ||||||||||||||||||||||||
Volume (bcf) | 1,025 | 83 | 445 | 1 | 1 | 2 | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 5.9 | 5.2 | 4.7 | 4.7 | 4.7 | 4.6 | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 5.2 | 4.7 | 4.8 | 4.2 | 4.2 | 4.2 | |||||||||||||||||||||||||||
Natural gas basis swaps | |||||||||||||||||||||||||||||||||
(a) Buy variable price/sell variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 325 | 97 | 50 | 32 | 14 | 19 | 537 | (180 | ) | ||||||||||||||||||||||||
Volume (bcf) | 829 | 210 | 109 | 62 | 33 | 46 | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 1.81 | 0.58 | 0.60 | 1.33 | 0.49 | 0.43 | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 2.57 | 0.46 | 0.46 | 1.05 | 0.42 | 0.42 | |||||||||||||||||||||||||||
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2009 | Total contract/ | Estimated | |||||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | and after | notional amount | fair value | ||||||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||||||
(b) Sell variable price/buy variable price contracts: | |||||||||||||||||||||||||||||||||
contract/notional amount ($ million) | 255 | 59 | 22 | 9 | 5 | 6 | 356 | 196 | |||||||||||||||||||||||||
Volume (m bcf) | 743 | 145 | 54 | 30 | 20 | 23 | |||||||||||||||||||||||||||
average pay ($/thousand cf) | 0.15 | 0.20 | 0.16 | 0.11 | 0.11 | 0.09 | |||||||||||||||||||||||||||
average receive ($/thousand cf) | 0.34 | 0.41 | 0.40 | 0.31 | 0.23 | 0.25 | |||||||||||||||||||||||||||
Total | 23,432 | 142 | |||||||||||||||||||||||||||||||
* | less than one million barrels |
** | less than one thousand megawatt hours |
Commodity swaps held for purposes other than trading |
Commodity options held for trading purposes |
2008 | Total contract/ | Estimated | |||||||||||||||||||||||
2005 | 2006 | 2007 | and after | notional amount | fair value | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
2004 | |||||||||||||||||||||||||
Crude oil buy calls | |||||||||||||||||||||||||
contract/notional amount ($ million) | 870 | 143 | 11 | — | 1,024 | (37 | ) | ||||||||||||||||||
volume (m bbl) | 19 | 4 | * | — | |||||||||||||||||||||
average strike price ($/bbl) | 44.7 | 33.2 | 39.7 | — | |||||||||||||||||||||
Crude oil sell calls | |||||||||||||||||||||||||
contract/notional amount ($ million) | 873 | 145 | — | — | 1,018 | 46 | |||||||||||||||||||
volume (m bbl) | 20 | 4 | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 42.9 | 32.8 | — | — | |||||||||||||||||||||
Crude oil buy put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 917 | 97 | 3 | — | 1,017 | 10 | |||||||||||||||||||
volume (m bbl) | 27 | 3 | * | — | |||||||||||||||||||||
average strike price ($/bbl) | 34.5 | 32.0 | 29.7 | — | |||||||||||||||||||||
Crude oil sell put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 972 | 103 | 20 | — | 1,095 | (27 | ) | ||||||||||||||||||
volume (m bbl) | 28 | 3 | 1 | — | |||||||||||||||||||||
average strike price ($/bbl) | 34.2 | 33.4 | 31.2 | — | |||||||||||||||||||||
Oil products buy put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 177 | 132 | — | — | 309 | 15 | |||||||||||||||||||
volume (m bbl) | 158 | 128 | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 1.1 | 1.0 | — | — | |||||||||||||||||||||
F-69
Table of Contents
2008 | Total contract/ | Estimated | |||||||||||||||||||||||
2005 | 2006 | 2007 | and after | notional amount | fair value | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
Oil products sell put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 193 | 131 | — | — | 324 | (14 | ) | ||||||||||||||||||
volume (m bbl) | 158 | 128 | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 1.2 | 1.0 | — | — | |||||||||||||||||||||
Oil products buy call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 176 | 51 | — | — | 227 | — | |||||||||||||||||||
volume (m bbl) | 50 | 42 | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 3.5 | 1.2 | — | — | |||||||||||||||||||||
Oil products sell call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 128 | 51 | — | — | 179 | (1 | ) | ||||||||||||||||||
volume (m bbl) | 49 | 42 | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 2.6 | 1.2 | — | — | |||||||||||||||||||||
Natural gas buy call | |||||||||||||||||||||||||
contract/notional amount ($ million) | 10,740 | 1,354 | 60 | — | 12,154 | 583 | |||||||||||||||||||
volume (bcf) | 1,493 | 180 | 9 | — | |||||||||||||||||||||
average strike price ($/thousand cf) | 7.2 | 7.5 | 6.6 | — | |||||||||||||||||||||
Natural gas sell call | |||||||||||||||||||||||||
contract/notional amount ($ million) | 9,309 | 1,060 | 22 | 6 | 10,397 | (455 | ) | ||||||||||||||||||
volume (bcf) | 1,312 | 158 | 4 | * | |||||||||||||||||||||
average strike price ($/thousand cf) | 7.1 | 6.7 | 6.3 | 6.3 | |||||||||||||||||||||
Natural gas buy put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 8,332 | 942 | 25 | 14 | 9,313 | 674 | |||||||||||||||||||
volume (bcf) | 1,757 | 201 | 4 | 3 | |||||||||||||||||||||
average strike price ($/thousand cf) | 4.7 | 4.7 | 5.5 | 4.8 | |||||||||||||||||||||
Natural gas sell put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 9,547 | 986 | 44 | 21 | 10,598 | (818 | ) | ||||||||||||||||||
volume (bcf) | 1,996 | 209 | 8 | 5 | |||||||||||||||||||||
average strike price ($/thousand cf) | 4.8 | 4.7 | 5.8 | 5.7 | |||||||||||||||||||||
�� | |||||||||||||||||||||||||
Electricity buy call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 290 | — | — | — | 290 | 3 | |||||||||||||||||||
volume (million MWh) | 6 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 48.4 | — | — | — | |||||||||||||||||||||
Electricity sell call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 379 | — | — | — | 379 | (7 | ) | ||||||||||||||||||
volume (million MWh) | 8 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 48.6 | — | — | — | |||||||||||||||||||||
Electricity buy put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 486 | — | — | — | 486 | 8 | |||||||||||||||||||
volume (million MWh) | 12 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 41.3 | — | — | — | |||||||||||||||||||||
F-70
Table of Contents
2008 | Total contract/ | Estimated | |||||||||||||||||||||||
2005 | 2006 | 2007 | and after | notional amount | fair value | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
Electricity sell put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 204 | — | — | — | 204 | 1 | |||||||||||||||||||
volume (million MWh) | 5 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 38.2 | — | — | — | |||||||||||||||||||||
Total | 49,014 | (19 | ) | ||||||||||||||||||||||
* | less than one million barrels |
Total contract/ | Estimated | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | notional amount | fair value | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
2003 | |||||||||||||||||||||||||
Crude oil buy calls | |||||||||||||||||||||||||
contract/notional amount ($ million) | 397 | 7 | — | — | 404 | 31 | |||||||||||||||||||
volume (m bbl) | 14 | * | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 29.6 | 29.8 | |||||||||||||||||||||||
Crude oil sell calls | |||||||||||||||||||||||||
contract/notional amount ($ million) | 389 | 68 | — | — | 457 | (58 | ) | ||||||||||||||||||
volume (m bbl) | 14 | 2 | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 28.3 | 25.6 | — | — | |||||||||||||||||||||
Crude oil buy put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 570 | 28 | — | — | 598 | 9 | |||||||||||||||||||
volume (m bbl) | 24 | 1 | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 23.8 | 20.5 | — | — | |||||||||||||||||||||
Crude oil sell put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 455 | 7 | — | — | 462 | (9 | ) | ||||||||||||||||||
volume (m bbl) | 20 | * | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 23.4 | 26.6 | — | — | |||||||||||||||||||||
Oil products buy put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 261 | — | — | — | 261 | (2 | ) | ||||||||||||||||||
volume (m bbl) | 11 | — | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 23.1 | — | — | — | |||||||||||||||||||||
Oil products sell put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 41 | — | — | — | 41 | — | |||||||||||||||||||
volume (m bbl) | 2 | — | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 27.7 | — | — | — | |||||||||||||||||||||
Oil products buy call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 8 | — | — | — | 8 | — | |||||||||||||||||||
volume (m bbl) | * | — | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 42.0 | — | — | — | |||||||||||||||||||||
F-71
Table of Contents
Total contract/ | Estimated | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | notional amount | fair value | ||||||||||||||||||||
$ million | |||||||||||||||||||||||||
Oil products sell call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 274 | — | — | — | 274 | (2 | ) | ||||||||||||||||||
volume (m bbl) | 10 | — | — | — | |||||||||||||||||||||
average strike price ($/bbl) | 27.2 | — | — | — | |||||||||||||||||||||
Natural gas buy call | |||||||||||||||||||||||||
contract/notional amount ($ million) | 8,112 | 414 | 30 | — | 8,556 | 692 | |||||||||||||||||||
volume (bcf) | 1,242 | 74 | 6 | — | |||||||||||||||||||||
average strike price ($/thousand cf) | 6.5 | 5.6 | 4.9 | — | |||||||||||||||||||||
Natural gas sell call | |||||||||||||||||||||||||
contract/notional amount ($ million) | 6,788 | 232 | 39 | 1 | 7,060 | (528 | ) | ||||||||||||||||||
volume (bcf) | 1,024 | 36 | 7 | * | |||||||||||||||||||||
average strike price ($/thousand cf) | 6.6 | 6.4 | 6.0 | 4.1 | |||||||||||||||||||||
Natural gas buy put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 6,316 | 168 | 63 | — | 6,547 | 174 | |||||||||||||||||||
volume (bcf) | 1,479 | 41 | 14 | — | |||||||||||||||||||||
average strike price ($/thousand cf) | 4.3 | 4.1 | 4.5 | — | |||||||||||||||||||||
Natural gas sell put | |||||||||||||||||||||||||
contract/notional amount ($ million) | 7,292 | 387 | 47 | 1 | 7,727 | (252 | ) | ||||||||||||||||||
volume (bcf) | 1,648 | 96 | 12 | * | |||||||||||||||||||||
average strike price ($ /thousand cf) | 4.4 | 4.1 | 4.1 | 5.7 | |||||||||||||||||||||
Electricity buy call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 409 | — | — | — | 409 | (28 | ) | ||||||||||||||||||
volume (million MWh) | 10 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 41.6 | — | — | — | |||||||||||||||||||||
Electricity sell call option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 350 | — | — | — | 350 | 30 | |||||||||||||||||||
volume (MWh) | 9 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 39.3 | — | — | — | |||||||||||||||||||||
Electricity buy put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 176 | — | — | — | 176 | (11 | ) | ||||||||||||||||||
volume (MWh) | 6 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 31.1 | — | — | — | |||||||||||||||||||||
Electricity sell put option | |||||||||||||||||||||||||
contract/notional amount ($ million) | 183 | — | — | — | 183 | 16 | |||||||||||||||||||
volume (MWh) | 6 | — | — | — | |||||||||||||||||||||
average strike price ($/MWh) | 28.8 | — | — | — | |||||||||||||||||||||
Total | 33,513 | 62 | |||||||||||||||||||||||
* | less than one million barrels |
F-72
Table of Contents
Commodity options held for purposes other than trading |
Commodity futures held for trading purposes |
Total contract/ | Estimated | ||||||||||||||||||||
2005 | 2006 | 2007 | notional amount | fair value | |||||||||||||||||
$ million | |||||||||||||||||||||
2004 | |||||||||||||||||||||
IPE Brent futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 341 | 26 | — | 367 | 66 | ||||||||||||||||
volume (m bbl) | 8 | 1 | — | ||||||||||||||||||
weighted average price ($/bbl) | 42.2 | 34.3 | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 561 | 79 | — | 640 | 86 | ||||||||||||||||
volume (m bbl) | 14 | 2 | — | ||||||||||||||||||
weighted average price ($/bbl) | 40.9 | 39.2 | — | ||||||||||||||||||
IPE Gasoil futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 274 | — | — | 274 | 17 | ||||||||||||||||
volume (m bbl) | 6 | — | — | ||||||||||||||||||
weighted average price ($/bbl) | 34.81 | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 196 | 2 | — | 198 | (5 | ) | |||||||||||||||
volume (m bbl) | 4 | * | — | ||||||||||||||||||
weighted average price ($/bbl) | 39.42 | 32.7 | — | ||||||||||||||||||
IPE Natural gas futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 6 | — | — | 6 | 3 | ||||||||||||||||
volume (bcf) | 1 | — | — | ||||||||||||||||||
weighted average price ($/thousands cf) | 6.0 | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 4 | — | — | 4 | 4 | ||||||||||||||||
volume (bcf) | 1 | — | — | ||||||||||||||||||
weighted average price ($/bbl) | 5.7 | — | — | ||||||||||||||||||
F-73
Table of Contents
Total contract/ | Estimated | ||||||||||||||||||||
2005 | 2006 | 2007 | notional amount | fair value | |||||||||||||||||
$ million | |||||||||||||||||||||
Nymex crude oil futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 130 | 132 | 15 | 277 | (18 | ) | |||||||||||||||
volume (m bbl) | 3 | 3 | * | ||||||||||||||||||
weighted average price ($/bbl) | 43.9 | 39.4 | 36.4 | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 427 | 21 | 10 | 458 | (15 | ) | |||||||||||||||
volume (m bbl) | 10 | 1 | * | ||||||||||||||||||
weighted average price ($/bbl) | 44.1 | 40.5 | 37.0 | ||||||||||||||||||
Nymex oil product futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 533 | — | — | 533 | (28 | ) | |||||||||||||||
volume (m bbl) | 11 | — | — | ||||||||||||||||||
weighted average price ($/bbl) | 50.9 | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 308 | 4 | — | 312 | — | ||||||||||||||||
volume (m bbl) | 6 | * | — | ||||||||||||||||||
weighted average price ($/bbl) | 51.9 | 47.88 | — | ||||||||||||||||||
Nymex natural gas futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 1,824 | 121 | 1 | 1,946 | 95 | ||||||||||||||||
volume (bcf) | 278 | 19 | ** | ||||||||||||||||||
weighted average price ($/thousand cf) | 5.9 | 6.1 | 5.7 | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 1,678 | 77 | 2 | 1,757 | (70 | ) | |||||||||||||||
volume (bcf) | 256 | 13 | ** | ||||||||||||||||||
weighted average price ($/thousand cf) | 5.7 | 5.2 | 5.8 | ||||||||||||||||||
Imarex freight futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 14 | — | — | 14 | 2 | ||||||||||||||||
volume (million tonnes) | 3 | — | — | ||||||||||||||||||
weighted average price ($/tonne) | 11.8 | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 7 | — | — | 7 | — | ||||||||||||||||
volume (million tonnes) | 1 | — | — | ||||||||||||||||||
weighted average price ($/tonne) | 12.9 | — | — | ||||||||||||||||||
F-74
Table of Contents
Total contract/ | Estimated | ||||||||||||||||||||
2005 | 2006 | 2007 | notional amount | fair value | |||||||||||||||||
$ million | |||||||||||||||||||||
Nord Pool electricity futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | — | — | — | — | — | ||||||||||||||||
volume (million MWh) | — | — | — | ||||||||||||||||||
weighted average price ($/MWh) | — | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 10 | 37 | — | 47 | (2 | ) | |||||||||||||||
volume (million MWh) | *** | 1 | — | ||||||||||||||||||
weighted average price ($/MWh) | 34.7 | 378 | — | ||||||||||||||||||
Total | 6,840 | 135 | |||||||||||||||||||
* | less than one million barrels |
** | less than one billion cubic feet |
*** | less than one million megawatt hours |
Total contract/ | Estimated | ||||||||||||||||||||
2004 | 2005 | 2006 | notional amount | fair value | |||||||||||||||||
$ million | |||||||||||||||||||||
2003 | |||||||||||||||||||||
IPE Brent futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 218 | 15 | — | 233 | — | ||||||||||||||||
volume (m bbl) | 8 | * | — | ||||||||||||||||||
weighted average price ($/bbl) | 28.4 | 26.7 | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 510 | 33 | — | 543 | 32 | ||||||||||||||||
volume (m bbl) | 17 | 1 | — | ||||||||||||||||||
weighted average price ($/bbl) | 29.9 | 26.8 | — | ||||||||||||||||||
IPE Gasoil futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 89 | 21 | — | 110 | (4 | ) | |||||||||||||||
volume (m bbl) | 2 | 1 | — | ||||||||||||||||||
weighted average price ($/bbl) | 36.7 | 30.3 | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 92 | 20 | — | 112 | 2 | ||||||||||||||||
volume (m bbl) | 3 | * | — | ||||||||||||||||||
weighted average price ($/bbl) | 33.9 | 30.0 | — | ||||||||||||||||||
F-75
Table of Contents
Total contract/ | Estimated | ||||||||||||||||||||
2004 | 2005 | 2006 | notional amount | fair value | |||||||||||||||||
$ million | |||||||||||||||||||||
IPE Natural gas futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 11 | — | — | 11 | (1 | ) | |||||||||||||||
volume (bcf) | 2 | — | — | ||||||||||||||||||
weighted average price ($/thousand bcf) | 5.8 | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 75 | — | — | 75 | (3 | ) | |||||||||||||||
volume (bcf) | 12 | — | — | ||||||||||||||||||
weighted average price ($/thousand bcf | 6.3 | — | — | ||||||||||||||||||
Nymex crude oil futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 82 | 4 | — | 86 | 1 | ||||||||||||||||
volume (mbbl) | 3 | * | — | ||||||||||||||||||
weighted average price ($/bbl) | 31.6 | 24.9 | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 456 | 22 | — | 478 | 43 | ||||||||||||||||
volume (m bbl) | 16 | 1 | — | ||||||||||||||||||
weighted average price ($/bbl) | 28.9 | 25.2 | — | ||||||||||||||||||
Nymex oil product futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 350 | — | — | 350 | (6 | ) | |||||||||||||||
volume (m bbl) | 9 | — | — | ||||||||||||||||||
weighted average price ($/bbl) | 38.4 | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 71 | 1 | — | 72 | — | ||||||||||||||||
volume (m bbl) | 2 | * | — | ||||||||||||||||||
weighted average price ($/bbl) | 34.8 | 31.6 | — | ||||||||||||||||||
Nymex natural gas futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 1,983 | 22 | — | 2,005 | (253 | ) | |||||||||||||||
volume (bcf) | 384 | 4 | — | ||||||||||||||||||
weighted average price ($/thousand cf) | 5.2 | 5.2 | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 1,776 | 81 | 2 | 1,859 | 242 | ||||||||||||||||
volume (bcf) | 344 | 18 | ** | ||||||||||||||||||
weighted average price ($/thousand cf) | 5.2 | 4.6 | 4.4 | ||||||||||||||||||
F-76
Table of Contents
Total contract/ | Estimated | ||||||||||||||||||||
2004 | 2005 | 2006 | notional amount | fair value | |||||||||||||||||
$ million | |||||||||||||||||||||
Nord Pool electricity futures | |||||||||||||||||||||
(a) Short contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 52 | — | — | 52 | — | ||||||||||||||||
volume (million MWh) | 2 | — | — | ||||||||||||||||||
weighted average price ($/MWh) | 31.8 | — | — | ||||||||||||||||||
(b) Long contracts: | |||||||||||||||||||||
contract/notional amount ($ million) | 1,420 | 222 | — | 1,642 | (5 | ) | |||||||||||||||
volume (million MWh) | 43 | 7 | — | ||||||||||||||||||
weighted average price ($/MWh)) | 33.0 | 32.9 | — | ||||||||||||||||||
Total | 7,628 | 48 | |||||||||||||||||||
* | less than one million barrels. |
** | less than one billion cubic feet. |
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Currency of | ||||||||
financial statements | ||||||||
2004 | in 2004 20-F/A | US$m | ||||||
Share of net income: | ||||||||
Royal Dutch Petroleum Company | €8,788m | 10,910 | ||||||
Shell Transport and Trading Company Limited | £3,973.0m | 7,272 | ||||||
18,182 | ||||||||
Share of shareholders’ equity: | ||||||||
Royal Dutch Petroleum Company | €39,839m | 54,324 | ||||||
Shell Transport and Trading Company Limited | £18,785.0m | 36,221 | ||||||
90,545 | ||||||||
Currency of | ||||||||
financial statements | ||||||||
2003 | in 2004 20-F/A | US$m | ||||||
Share of net income: | ||||||||
Royal Dutch Petroleum Company | €6,649m | 7,395 | ||||||
Shell Transport and Trading Company Limited | £3,045.2m | 4,927 | ||||||
12,322 | ||||||||
Share of shareholders’ equity: | ||||||||
Royal Dutch Petroleum Company | €37,332m | 47,087 | ||||||
Shell Transport and Trading Company Limited | £17,478.8m | 31,164 | ||||||
78,251 | ||||||||
Currency of | ||||||||
financial statements | ||||||||
2002 | in 2004 20-F/A | US$m | ||||||
Share of net income: | ||||||||
Royal Dutch Petroleum Company | €6,167m | 5,807 | ||||||
Shell Transport and Trading Company Limited | £2,578.0m | 3,864 | ||||||
9,671 | ||||||||
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Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$ million | ||||||||||||||||
Sales proceeds | 94,717 | 89,006 | 286,168 | 243,634 | ||||||||||||
Less: Sales taxes, excise duties and similar levies | 18,282 | 18,321 | 54,933 | 53,549 | ||||||||||||
Revenue | 76,435 | 70,685 | 231,235 | 190,085 | ||||||||||||
Cost of sales | 60,704 | 58,604 | 188,733 | 157,901 | ||||||||||||
Gross profit | 15,731 | 12,081 | 42,502 | 32,184 | ||||||||||||
Selling and distribution expenses | 3,150 | 3,110 | 9,462 | 9,046 | ||||||||||||
Administrative expenses | 613 | 533 | 1,757 | 1,646 | ||||||||||||
Exploration | 275 | 294 | 784 | 1,294 | ||||||||||||
Share of profit of equity accounted investments | 3,081 | 1,254 | 5,734 | 3,496 | ||||||||||||
Net finance costs and other income | (268 | ) | 11 | (159 | ) | (32 | ) | |||||||||
Income before taxation | 15,042 | 9,387 | 36,392 | 23,726 | ||||||||||||
Taxation | 5,558 | 3,790 | 14,427 | 9,276 | ||||||||||||
Income from continuing operations | 9,484 | 5,597 | 21,965 | 14,450 | ||||||||||||
Income/(loss) from discontinued operations (see Note 7) | (93 | ) | 23 | (307 | ) | 65 | ||||||||||
Income for the period | 9,391 | 5,620 | 21,658 | 14,515 | ||||||||||||
Attributable to minority interest | 313 | 249 | 669 | 546 | ||||||||||||
Income attributable to Shareholders of Royal Dutch and Shell Transport | 9,078 | 5,371 | 20,989 | 13,969 | ||||||||||||
Three months | Nine months | ||||||||||||||||
ended | ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
Net income per Royal Dutch Petroleum Company share | 2.74 | 1.60 | 6.29 | 4.14 | |||||||||||||
— Continuing operations | 2.77 | 1.59 | 6.38 | 4.12 | |||||||||||||
— Discontinued operations | (0.03 | ) | 0.01 | (0.09 | ) | 0.02 | |||||||||||
Diluted net income per Royal Dutch Petroleum Company share | 2.73 | 1.60 | 6.27 | 4.13 | |||||||||||||
— Continuing operations | 2.76 | 1.59 | 6.36 | 4.11 | |||||||||||||
— Discontinued operations | (0.03 | ) | 0.01 | (0.09 | ) | 0.02 | |||||||||||
Net income per Shell Transport and Trading Company Limited share | 0.39 | 0.23 | 0.89 | 0.59 | |||||||||||||
— Continuing operations | 0.39 | 0.23 | 0.90 | 0.59 | |||||||||||||
— Discontinued operations | — | — | (0.01 | ) | — | ||||||||||||
Diluted net income per Shell Transport and Trading Company Limited share | 0.39 | 0.23 | 0.89 | 0.59 | |||||||||||||
— Continuing operations | 0.39 | 0.23 | 0.90 | 0.59 | |||||||||||||
— Discontinued operations | — | — | (0.01 | ) | — |
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Sept 30, | Dec 31, | |||||||||
2005 | 2004 | |||||||||
$ million | ||||||||||
ASSETS | ||||||||||
Non-current assets | ||||||||||
Property, plant and equipment | 85,601 | 87,918 | ||||||||
Intangible assets | 4,361 | 4,528 | ||||||||
Investments: | ||||||||||
equity accounted investments | 17,138 | 20,493 | ||||||||
financial assets | 3,236 | 2,700 | ||||||||
Deferred tax | 3,039 | 2,789 | ||||||||
Employee benefit assets | 2,453 | 2,479 | ||||||||
Other | 4,102 | 4,490 | ||||||||
119,930 | 125,397 | |||||||||
Current assets | ||||||||||
Inventories | 21,490 | 15,375 | ||||||||
Accounts receivable | 83,812 | 37,473 | ||||||||
Cash and cash equivalents | 15,998 | 9,201 | ||||||||
121,300 | 62,049 | |||||||||
Total assets | 241,230 | 187,446 | ||||||||
LIABILITIES | ||||||||||
Non-current liabilities | ||||||||||
Debt | 9,339 | 8,858 | ||||||||
Deferred tax | 12,411 | 12,930 | ||||||||
Employee benefit obligations | 6,018 | 6,795 | ||||||||
Other provisions | 7,114 | 6,828 | ||||||||
Other | 4,395 | 5,800 | ||||||||
39,277 | 41,211 | |||||||||
Current liabilities | ||||||||||
Debt | 6,714 | 5,734 | ||||||||
Accounts payable and accrued liabilities | 86,284 | 37,909 | ||||||||
Taxes payable | 12,510 | 9,058 | ||||||||
Employee benefit obligations | 302 | 339 | ||||||||
Other provisions | 1,254 | 1,812 | ||||||||
107,064 | 54,852 | |||||||||
Total liabilities | 146,341 | 96,063 | ||||||||
EQUITY | ||||||||||
Equity share capital (see Note 9) | 583 | 584 | ||||||||
Non-equity share capital (see Note 9) | – | 20 | ||||||||
Additional paid-in capital | 5,670 | 5,546 | ||||||||
Treasury shares | (3,772 | ) | (4,187 | ) | ||||||
Other reserves | 103 | 3,319 | ||||||||
Retained earnings | 85,695 | 80,788 | ||||||||
Equity attributable to Shareholders of Royal Dutch and Shell Transport | 88,279 | 86,070 | ||||||||
Minority interest | 6,610 | 5,313 | ||||||||
Total equity | 94,889 | 91,383 | ||||||||
Total liabilities and equity | 241,230 | 187,446 | ||||||||
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Equity attributable to shareholders of Royal Dutch and Shell Transport | ||||||||||||||||||||||||||||||||||||
Equity | Preference | Additional | ||||||||||||||||||||||||||||||||||
share | share | paid in | Treasury | Other | Retained | Minority | Total | |||||||||||||||||||||||||||||
capital(1) | capital(1) | capital | shares | reserves(2) | earnings | Total | interests | equity | ||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||
At January 1, 2005 | 584 | 20 | 5,546 | (4,187 | ) | 3,319 | 80,788 | 86,070 | 5,313 | 91,383 | ||||||||||||||||||||||||||
IAS 32/39 transition | – | (20 | ) | – | – | 823 | (7 | ) | 796 | – | 796 | |||||||||||||||||||||||||
Income for the period | – | – | – | – | – | 20,989 | 20,989 | 669 | 21,658 | |||||||||||||||||||||||||||
Income/(expense) recognised directly in equity | – | – | 124 | – | (4,039 | ) | 4 | (3,911 | ) | 92 | (3,819 | ) | ||||||||||||||||||||||||
Change in minority interest | – | – | – | – | – | – | – | 733 | 733 | |||||||||||||||||||||||||||
Dividends | – | – | – | – | – | (15,579 | ) | (15,579 | ) | (197 | ) | (15,776 | ) | |||||||||||||||||||||||
(Purchase)/release of treasury shares, net of dividends | – | – | – | 415 | – | – | 415 | – | 415 | |||||||||||||||||||||||||||
Shares repurchased for cancellation | (1 | ) | – | – | – | – | (500 | ) | (501 | ) | – | (501 | ) | |||||||||||||||||||||||
At September 30, 2005 | 583 | – | 5,670 | (3,772 | ) | 103 | 85,695 | 88,279 | 6,610 | 94,889 | ||||||||||||||||||||||||||
At January 1, 2004 | 587 | 20 | 5,432 | (3,428 | ) | 512 | 70,412 | 73,535 | 3,408 | 76,943 | ||||||||||||||||||||||||||
Income for the period | – | – | – | – | – | 13,969 | 13,969 | 547 | 14,516 | |||||||||||||||||||||||||||
Income/(expense) recognised directly in equity | – | – | 91 | – | (857 | ) | – | (766 | ) | 17 | (749 | ) | ||||||||||||||||||||||||
Change in minority interest | – | – | – | – | – | – | 964 | 964 | ||||||||||||||||||||||||||||
Dividends | – | – | – | – | – | (7,390 | ) | (7,390 | ) | (202 | ) | (7,592 | ) | |||||||||||||||||||||||
(Purchase)/release of treasury shares, net of dividends | – | – | – | (740 | ) | – | – | (740 | ) | – | (740 | ) | ||||||||||||||||||||||||
Shares repurchased for cancellation | (3 | ) | – | – | – | – | (792 | ) | (795 | ) | – | (795 | ) | |||||||||||||||||||||||
At September 30, 2004 | 584 | 20 | 5,523 | (4,168 | ) | (345 | ) | 76,199 | 77,813 | 4,734 | 82,547 | |||||||||||||||||||||||||
(1) | See Note 9. |
(2) | See Note 4. |
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Nine months ended | |||||||||
September 30, | |||||||||
2005 | 2004 | ||||||||
$ million | |||||||||
Cash flow from operating activities: | |||||||||
Income for the period | 21,658 | 14,515 | |||||||
Adjustment for: | |||||||||
Taxation accrued | 14,945 | 9,544 | |||||||
Interest accrued | 484 | 645 | |||||||
Depreciation, depletion and amortisation | 9,194 | 8,655 | |||||||
(Profit)/loss on sale of assets | (1,103 | ) | (859 | ) | |||||
Decrease/(increase) in net working capital | (5,587 | ) | (4,237 | ) | |||||
Share of profit of equity accounted investments | (5,512 | ) | (3,562 | ) | |||||
Dividends received from equity accounted investments | 5,268 | 2,731 | |||||||
Deferred taxation and other provisions | (646 | ) | (142 | ) | |||||
Other | (1,102 | ) | (356 | ) | |||||
Cash flow from operating activities (pre-tax) | 37,599 | 26,934 | |||||||
Taxation paid | (12,579 | ) | (6,746 | ) | |||||
Cash flow from operating activities | 25,020 | 20,188 | |||||||
Cash flow from investing activities: | |||||||||
Capital expenditure | (10,457 | ) | (8,911 | ) | |||||
Proceeds from sale of assets | 1,914 | 1,300 | |||||||
Proceeds from sales and (additions): | |||||||||
equity accounted investments | 3,535 | (380 | ) | ||||||
investments: financial assets | 363 | 1,069 | |||||||
Interest received | 618 | 332 | |||||||
Cash flow from investing activities | (4,027 | ) | (6,590 | ) | |||||
Cash flow from financing activities: | |||||||||
Net increase/(decrease) in debt | 1,988 | (2,963 | ) | ||||||
Interest paid | (813 | ) | (671 | ) | |||||
Change in minority interest | 893 | 860 | |||||||
Net issue/ (repurchase) of shares | (501 | ) | (698 | ) | |||||
Dividends paid to: | |||||||||
Shareholders of Royal Dutch and Shell Transport | (15,677 | ) | (7,309 | ) | |||||
Minority interest | (235 | ) | (202 | ) | |||||
Treasury shares: net sales/(purchases) and dividends received | 399 | (738 | ) | ||||||
Cash flow from financing activities | (13,946 | ) | (11,721 | ) | |||||
Currency translation differences relating to cash and cash equivalents | (250 | ) | (37 | ) | |||||
Increase/(decrease) in cash and cash equivalents | 6,797 | 1,840 | |||||||
Cash and cash equivalents at beginning of period | 9,201 | 2,108 | |||||||
Cash and cash equivalents at end of period | 15,998 | 3,948 | |||||||
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Royal Dutch Petroleum Company and The Shell Transport and Trading Company Limited |
Three months | ||||||||||||||||
ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$ million | ||||||||||||||||
Royal Dutch | 5,447 | 3,223 | 12,594 | 8,381 | ||||||||||||
Shell Transport | 3,631 | 2,148 | 8,395 | 5,588 | ||||||||||||
9,078 | 5,371 | 20,989 | 13,969 | |||||||||||||
Sept. 30, | Dec. 31, | |||||||
2005 | 2004 | |||||||
$ million | ||||||||
Royal Dutch | 52,967 | 51,642 | ||||||
Shell Transport | 35,312 | 34,428 | ||||||
88,279 | 86,070 | |||||||
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Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Royal Dutch | 1,984,420,979 | 2,018,231,477 | 2,001,475,299 | 2,026,830,771 | ||||||||||||
Shell Transport | 9,423,242,311 | 9,460,440,999 | 9,426,262,883 | 9,493,874,001 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Royal Dutch | 1,993,403,299 | 2,020,728,970 | 2,008,538,475 | 2,028,688,303 | ||||||||||||
Shell Transport | 9,455,010,531 | 9,466,211,000 | 9,450,450,597 | 9,497,099,001 |
• for each Royal Dutch Ordinary Share held in New York registry form tendered: | 1 Royal Dutch Shell Class A American depositary receipt (representing 2 Royal Dutch Shell Class A ordinary shares) |
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• for each Royal Dutch Ordinary Share held in bearer or Hague registry form tendered: | 2 Royal Dutch Shell Class A ordinary shares | |
• for each Shell Transport Ordinary Share (including Shell Transport Ordinary Shares to which holders of Shell Transport bearer warrants are entitled): | 0.287333066 Royal Dutch Shell Class B ordinary shares | |
• for each Shell Transport ADR: | 0.861999198 Royal Dutch Shell Class B American depositary receipts (representing 2 Royal Dutch Shell Class B ordinary shares) |
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• | cumulative currency translation differences were eliminated by transfer to retained earnings. | |
• | cumulative previously unrecognised actuarial gains and losses on post-employment benefits were recognised. | |
• | prior business combinations have not been restated. | |
• | IFRS 2 Share-based Payment has only been applied to options issued after November 7, 2002 and not vested by January 1, 2005. |
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Income/(expense) | ||||||||||||||||||||
At Jan 1, | ||||||||||||||||||||
2005 | ||||||||||||||||||||
after | ||||||||||||||||||||
At Dec 31, | IAS 32/39 | IAS 32/39 | At Sept 30, | |||||||||||||||||
2004 | transition | transition | Movement | 2005 | ||||||||||||||||
$ million | ||||||||||||||||||||
Cumulative currency translation differences | 3,126 | – | 3,126 | (3,843 | ) | (717 | ) | |||||||||||||
Unrealised gains/(losses) on securities | 350 | – | 350 | 736 | 1,086 | |||||||||||||||
Unrealised gains/(losses) on cash flow hedges | (157 | ) | 823 | 666 | (932 | ) | (266 | ) | ||||||||||||
Total | 3,319 | 823 | 4,142 | (4,039 | ) | 103 | ||||||||||||||
Income/(expense) | ||||||||||||
At Jan 1, | At Sept 30, | |||||||||||
2004 | Movement | 2004 | ||||||||||
$ million | ||||||||||||
Cumulative currency translation differences | – | (403 | ) | (403 | ) | |||||||
Unrealised gains/(losses) on securities | 700 | (443 | ) | 257 | ||||||||
Unrealised gains/(losses) on cash flow hedges | (188 | ) | (11 | ) | (199 | ) | ||||||
Total | 512 | (857 | ) | (345 | ) | |||||||
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Corporate | |||||||||||||||||||||||||||||
Exploration & | Gas & | and | Total | ||||||||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Elimination | Shell Group | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Third party | 7,078 | 3,086 | 58,877 | 7,311 | 83 | – | 76,435 | ||||||||||||||||||||||
Inter-segment | 8,603 | 417 | 1,709 | 1,165 | – | (11,894 | ) | – | |||||||||||||||||||||
Total | 15,681 | 3,503 | 60,586 | 8,476 | 83 | – | 76,435 | ||||||||||||||||||||||
Segment result | 7,136 | 228 | 4,241 | 354 | (266 | ) | – | 11,693 | |||||||||||||||||||||
Share of profit of equity accounted investments | 2,220 | 271 | 492 | 85 | 13 | – | 3,081 | ||||||||||||||||||||||
Net finance costs | (106 | ) | |||||||||||||||||||||||||||
Other income | 162 | ||||||||||||||||||||||||||||
Taxation | 5,558 | ||||||||||||||||||||||||||||
Income from continuing operations | 9,484 | ||||||||||||||||||||||||||||
Income/(loss) from discontinued operations | – | – | – | (93 | ) | – | – | (93 | ) | ||||||||||||||||||||
Income for the period | 9,391 | ||||||||||||||||||||||||||||
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Corporate | |||||||||||||||||||||||||||||
Exploration & | Gas & | and | Total | ||||||||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Elimination | Shell Group | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Third party | 5,640 | 2,190 | 55,761 | 6,915 | 179 | – | 70,685 | ||||||||||||||||||||||
Inter-segment | 6,582 | 243 | 1,445 | 893 | – | (9,163 | ) | – | |||||||||||||||||||||
Total | 12,222 | 2,433 | 57,206 | 7,808 | 179 | – | 70,685 | ||||||||||||||||||||||
Segment result | 4,737 | (16 | ) | 3,087 | 565 | (229 | ) | – | 8,144 | ||||||||||||||||||||
Share of profit of equity accounted investments | 422 | 277 | 466 | 163 | (74 | ) | – | 1,254 | |||||||||||||||||||||
Net finance costs | 74 | ||||||||||||||||||||||||||||
Other income | 63 | ||||||||||||||||||||||||||||
Taxation | 3,790 | ||||||||||||||||||||||||||||
Income from continuing operations | 5,597 | ||||||||||||||||||||||||||||
Income/(loss) from discontinued operations | – | – | – | 23 | – | – | 23 | ||||||||||||||||||||||
Income for the period | 5,620 | ||||||||||||||||||||||||||||
Exploration | Corporate | ||||||||||||||||||||||||||||
and | Gas & | and | Total | ||||||||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Elimination | Group | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Third party | 17,717 | 9,221 | 180,799 | 22,941 | 557 | – | 231,235 | ||||||||||||||||||||||
Inter-segment | 24,125 | 1,143 | 4,765 | 2,882 | – | (32,915 | ) | – | |||||||||||||||||||||
Total | 41,842 | 10,364 | 185,564 | 25,823 | 557 | – | 231,235 | ||||||||||||||||||||||
Segment Result | 18,686 | 299 | 10,829 | 1,396 | (711 | ) | – | 30,499 | |||||||||||||||||||||
Share of profit of equity accounted investments | 3,394 | 630 | 1,517 | 329 | (136 | ) | – | 5,734 | |||||||||||||||||||||
Net finance costs | 76 | ||||||||||||||||||||||||||||
Other income | 235 | ||||||||||||||||||||||||||||
Taxation | 14,427 | ||||||||||||||||||||||||||||
Income from continuing operations | 21,965 | ||||||||||||||||||||||||||||
Income/(loss) from discontinued operations | – | – | – | (307 | ) | – | – | (307 | ) | ||||||||||||||||||||
Income for the period | 21,658 | ||||||||||||||||||||||||||||
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Exploration | Corporate | ||||||||||||||||||||||||||||
and | Gas & | and | Total | ||||||||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Elimination | Group | |||||||||||||||||||||||
$ million | |||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Third party | 12,350 | 6,502 | 151,442 | 19,053 | 738 | – | 190,085 | ||||||||||||||||||||||
Inter-segment | 18,324 | 880 | 3,815 | 2,387 | 4 | (25,410 | ) | – | |||||||||||||||||||||
Total | 30,674 | 7,382 | 155,257 | 21,440 | 742 | – | 190,085 | ||||||||||||||||||||||
Segment Result | 12,400 | 87 | 7,241 | 1,093 | (623 | ) | – | 20,198 | |||||||||||||||||||||
Share of profit of equity accounted investments | 1,560 | 854 | 980 | 342 | (240 | ) | – | 3,496 | |||||||||||||||||||||
Net finance costs | 581 | ||||||||||||||||||||||||||||
Other income | 613 | ||||||||||||||||||||||||||||
Taxation | 9,276 | ||||||||||||||||||||||||||||
Income from continuing operations | 14,450 | ||||||||||||||||||||||||||||
Income/(loss) from discontinued operations | – | – | – | 65 | – | – | 65 | ||||||||||||||||||||||
Income for the period | 14,515 | ||||||||||||||||||||||||||||
Exploration | Corporate | |||||||||||||||||||||||
and | Gas & | and | Total | |||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Group | |||||||||||||||||||
$ million | ||||||||||||||||||||||||
Segment result — IAS 14 | 7,136 | 228 | 4,241 | 354 | (266 | ) | 11,693 | |||||||||||||||||
Share of profit of equity accounted investments | 2,220 | 271 | 492 | 85 | 13 | 3,081 | ||||||||||||||||||
Net finance costs and other (income)/expense | 53 | (144 | ) | (3 | ) | 4 | (178 | ) | (268 | ) | ||||||||||||||
Taxation | 4,326 | 87 | 1,296 | 21 | (172 | ) | 5,558 | |||||||||||||||||
Discontinued operations | – | – | – | (93 | ) | – | (93 | ) | ||||||||||||||||
Segment result | 4,977 | 556 | 3,440 | 321 | 97 | 9,391 | ||||||||||||||||||
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Exploration | Corporate | |||||||||||||||||||||||
and | Gas & | and | Total | |||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Group | |||||||||||||||||||
$ million | ||||||||||||||||||||||||
Segment result — IAS 14 | 4,737 | (16 | ) | 3,087 | 565 | (229 | ) | 8,144 | ||||||||||||||||
Share of profit of equity accounted investments | 422 | 277 | 466 | 163 | (74 | ) | 1,254 | |||||||||||||||||
Net finance costs and other (income)/expense | (15 | ) | (12 | ) | 2 | 8 | 28 | 11 | ||||||||||||||||
Taxation | 2,831 | (81 | ) | 994 | 171 | (125 | ) | 3,790 | ||||||||||||||||
Discontinued operations | – | – | – | 23 | – | 23 | ||||||||||||||||||
Segment result | 2,343 | 354 | 2,557 | 572 | (206 | ) | 5,620 | |||||||||||||||||
Exploration | Corporate | |||||||||||||||||||||||
& | Gas & | and | Total | |||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Group | |||||||||||||||||||
$ million | ||||||||||||||||||||||||
Segment result — IAS 14 | 18,686 | 299 | 10,829 | 1,396 | (711 | ) | 30,499 | |||||||||||||||||
Share of profit of equity accounted investments | 3,394 | 630 | 1,517 | 329 | (136 | ) | 5,734 | |||||||||||||||||
Net finance costs and other (income)/expense | 203 | (174 | ) | (16 | ) | 5 | (177 | ) | (159 | ) | ||||||||||||||
Taxation | 11,200 | 60 | 3,208 | 384 | (425 | ) | 14,427 | |||||||||||||||||
Discontinued operations | – | – | – | (307 | ) | – | (307 | ) | ||||||||||||||||
Segment result | 10,677 | 1,043 | 9,154 | 1,029 | (245 | ) | 21,658 | |||||||||||||||||
Exploration | Corporate | |||||||||||||||||||||||
& | Gas & | and | Total | |||||||||||||||||||||
Production | Power | Oil Products | Chemicals | Other | Group | |||||||||||||||||||
$ million | ||||||||||||||||||||||||
Segment result — IAS 14 | 12,400 | 87 | 7,241 | 1,093 | (623 | ) | 20,198 | |||||||||||||||||
Share of profit of equity accounted investments | 1,560 | 854 | 980 | 342 | (240 | ) | 3,496 | |||||||||||||||||
Net finance costs and other (income)/expense | 38 | (245 | ) | (30 | ) | 13 | 192 | (32 | ) | |||||||||||||||
Taxation | 7,017 | (24 | ) | 2,327 | 319 | (363 | ) | 9,276 | ||||||||||||||||
Discontinued operations | – | – | – | 65 | – | 65 | ||||||||||||||||||
Segment result | 6,905 | 1,210 | 5,924 | 1,168 | (692 | ) | 14,515 | |||||||||||||||||
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$ million | ||||
Investments: financial assets | 1,018 | |||
Non-current assets: deferred tax | 5 | |||
Current assets | 42 | |||
Non-current liabilities: deferred tax | (195 | ) | ||
Non-current liabilities debt | (20 | ) | ||
Current liabilities | (54 | ) | ||
796 | ||||
Sept. 30 | Dec. 31 | |||||||
2005 | 2004 | |||||||
$ million | ||||||||
Allotted, called up and fully paid | ||||||||
Royal Dutch Ordinary shares | 350 | 350 | ||||||
Shell Transport Ordinary shares | 233 | 234 | ||||||
583 | 584 | |||||||
Royal Dutch | Shell Transport | |||||||
Shares outstanding at September 30, 2005 | 2,069,520,000 | 9,603,350,002 | ||||||
Shares outstanding at December 31, 2004 | 2,074,400,000 | 9,624,900,000 |
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Sept. 30 | Dec. 31 | Sept. 30 | Dec. 31 | |||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Number of shares | $ million | |||||||||||||||
Allotted, called up and fully paid | ||||||||||||||||
€448 Priority Shares | – | 1,500 | – | 1 | ||||||||||||
£1 First Preference Shares | – | 2,000,000 | – | 3 | ||||||||||||
£1 Second Preference Shares | – | 10,000,000 | – | 16 | ||||||||||||
– | 20 | |||||||||||||||
• | While the majority of the cases have been consolidated for pre-trial proceedings in the United States District Court for the Southern District of New York, there are many cases pending in other jurisdictions throughout the U.S. Most of the cases are at a preliminary stage. In many matters, little discovery has been taken and many critical substantial legal issues remain unresolved. Consequently, management of the Shell Group does not have sufficient information to assess the facts underlying the plaintiffs’ claims; the nature and extent of damages claimed, if any; the reasonableness of any specific claim for money damages; the allocation of potential responsibility among defendants; or the law that may be applicable. Additionally, given the pendency of cases in varying jurisdictions, there may be inconsistencies in the determinations made in these matters. | |
• | There are significant unresolved legal questions relating to claims asserted in this litigation. For example, it has not been established whether the use of oxygenates mandated by the 1990 amendments to the Clean Air Act can give rise to a products liability based claim. While some trial courts have held that it cannot, other courts have left the question open or declined to dismiss claims brought on a products liability theory. Other examples of unresolved legal questions relate to the applicability of federal preemption, whether a plaintiff may recover damages for alleged levels of contamination significantly below state environmental standards, and whether a plaintiff may recover for an alleged threat to groundwater before detection of contamination. |
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• | There are also significant unresolved legal questions relating to whether punitive damages are available for products liability claims or, if available, the manner in which they might be determined. For example, some courts have held that for certain types of product liability claims, punitive damages are not available. It is not known whether that rule of law would be applied in some or all of the pending oxygenate additive cases. Where specific claims for damages have been made, punitive damages represent in most cases a majority of the total amounts claimed. | |
• | There are significant issues relating to the allocation of any liability among the defendants. Virtually all of the oxygenate additives cases involve multiple defendants including most of the major participants in the retail gasoline marketing business in the regions involved in the pending cases. The basis on which any potential liability may be apportioned among the defendants in any particular pending case cannot yet be determined. |
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Employee | ||||||||||||||||||||||||||||||||||||
benefits | ||||||||||||||||||||||||||||||||||||
Discontinued | Reversals of | |||||||||||||||||||||||||||||||||||
IFRS | operations(1) | Reclassifications(2) | (a) | (b) | Impairments | Impairments | Other | US GAAP | ||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||
Sales proceeds | 94,717 | – | – | – | – | – | – | 45 | 94,762 | |||||||||||||||||||||||||||
less: Sales taxes, excise duties and similar levies | 18,282 | – | – | – | – | – | – | – | 18,282 | |||||||||||||||||||||||||||
Revenue | 76,435 | – | – | – | – | – | – | 45 | 76,480 | |||||||||||||||||||||||||||
Cost of sales | 60,704 | 85 | (2 | ) | 47 | 9 | 11 | (203 | ) | 333 | 60,984 | |||||||||||||||||||||||||
Gross profit | 15,731 | (85 | ) | 2 | (47 | ) | (9 | ) | (11 | ) | 203 | (288 | ) | 15,496 | ||||||||||||||||||||||
Selling and distribution expenses | 3,150 | – | – | 10 | 4 | – | – | (7 | ) | 3,157 | ||||||||||||||||||||||||||
Administrative expenses | 613 | – | – | 18 | 1 | – | – | – | 632 | |||||||||||||||||||||||||||
Exploration | 275 | – | – | – | – | – | – | – | 275 | |||||||||||||||||||||||||||
Research and development | – | – | 71 | – | – | – | – | – | 71 | |||||||||||||||||||||||||||
Share of profit of equity accounted investments | 3,081 | (8 | ) | – | (1 | ) | – | – | 9 | 1 | 3,082 | |||||||||||||||||||||||||
Net finance costs and other income | (268 | ) | – | (69 | ) | – | – | – | – | (21 | ) | (358 | ) | |||||||||||||||||||||||
Income before taxation | 15,042 | (93 | ) | – | (76 | ) | (14 | ) | (11 | ) | 212 | (259 | ) | 14,801 | ||||||||||||||||||||||
Taxation | 5,558 | – | – | (34 | ) | – | (3 | ) | (2 | ) | (67 | ) | 5,452 | |||||||||||||||||||||||
Income from continuing operations | 9,484 | (93 | ) | – | (42 | ) | (14 | ) | (8 | ) | 214 | (192 | ) | 9,349 | ||||||||||||||||||||||
Income from discontinued operations | (93 | ) | 93 | – | – | – | – | – | – | – | ||||||||||||||||||||||||||
Cumulative effect of change in accounting policy | – | – | – | – | – | – | – | – | – | |||||||||||||||||||||||||||
Income for the period | 9,391 | – | – | (42 | ) | (14 | ) | (8 | ) | 214 | (192 | ) | 9,349 | |||||||||||||||||||||||
Attributable to minority interest | 359 | – | – | – | – | – | – | – | 359 | |||||||||||||||||||||||||||
Income attributable to shareholders of Royal Dutch and Shell Transport | 9,032 | – | – | (42 | ) | (14 | ) | (8 | ) | 214 | (192 | ) | 8,990 | |||||||||||||||||||||||
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Employee | ||||||||||||||||||||||||||||||||||||||||
benefits | Major | |||||||||||||||||||||||||||||||||||||||
Discontinued | Reversals of | inspection | ||||||||||||||||||||||||||||||||||||||
IFRS | operations(1) | Reclassifications(2) | (a) | (b) | Impairments | Impairments | costs | Other | US GAAP | |||||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||||||
Sales proceeds | 286,168 | (1,374 | ) | – | – | – | – | – | 31 | 284,825 | ||||||||||||||||||||||||||||||
less: Sales taxes, excise duties and similar levies | 54,933 | (726 | ) | – | – | – | – | – | – | 54,207 | ||||||||||||||||||||||||||||||
Revenue | 231,235 | (648 | ) | – | – | – | – | – | 31 | 230,618 | ||||||||||||||||||||||||||||||
Cost of sales | 188,733 | (85 | ) | (64 | ) | 150 | 23 | 31 | (256 | ) | 263 | 188,795 | ||||||||||||||||||||||||||||
Gross profit | 42,502 | (563 | ) | 64 | (150 | ) | (23 | ) | (31 | ) | 256 | (232 | ) | 41,823 | ||||||||||||||||||||||||||
Selling and distribution expenses | 9,462 | (64 | ) | – | 62 | 4 | – | – | (34 | ) | 9,430 | |||||||||||||||||||||||||||||
Administrative expenses | 1,757 | – | – | 23 | 2 | – | – | (25 | ) | 1,757 | ||||||||||||||||||||||||||||||
Exploration | 784 | – | – | – | – | – | – | – | 784 | |||||||||||||||||||||||||||||||
Research and development | – | – | 303 | – | – | – | – | – | 303 | |||||||||||||||||||||||||||||||
Share of profit of equity accounted investments | 5,734 | (222 | ) | – | (2 | ) | – | – | 129 | (13 | ) | 5,626 | ||||||||||||||||||||||||||||
Net finance costs and other income | (159 | ) | (1 | ) | (239 | ) | – | – | – | – | (21 | ) | (420 | ) | ||||||||||||||||||||||||||
Income before taxation | 36,392 | (720 | ) | – | (237 | ) | (29 | ) | (31 | ) | 385 | (165 | ) | 35,595 | ||||||||||||||||||||||||||
Taxation | 14,427 | (35 | ) | – | (90 | ) | 3 | (64 | ) | (2 | ) | (70 | ) | 14,169 | ||||||||||||||||||||||||||
Income from continuing operations | 21,965 | (685 | ) | – | (147 | ) | (32 | ) | 33 | 387 | (95 | ) | 21,426 | |||||||||||||||||||||||||||
Income from discontinued operations | (307 | ) | 685 | – | – | – | – | – | – | 378 | ||||||||||||||||||||||||||||||
Cumulative effect of change in accounting policy | – | – | – | – | – | – | – | (554 | ) | – | (554 | ) | ||||||||||||||||||||||||||||
Income for the period | 21,658 | – | – | (147 | ) | (32 | ) | 33 | 387 | 554 | (95 | ) | 22,358 | |||||||||||||||||||||||||||
Attributable to minority interest | 715 | – | – | – | – | 60 | – | – | 775 | |||||||||||||||||||||||||||||||
Income attributable to shareholders of Royal Dutch and Shell Transport | 20,943 | – | – | (147 | ) | (32 | ) | (27 | ) | 387 | 554 | (95 | ) | 21,583 | ||||||||||||||||||||||||||
(1) | The definition of activities classified as discontinued operations differs from that under US GAAP. Under IFRS equity accounted or other investments are not excluded from this classification, but the activity must be a separate major line of business or geographical area of operations. During the nine months ended September 30, 2005, discontinued operations have been assessed and presented in accordance with FAS 144. Where new discontinued operations have been identified in the current period, the disclosures have been applied retrospectively. This is a 2005 event and does not affect the combined financial statements of Royal Dutch and Shell Transport for the year ended December 31, 2004. |
(2) | Reclassifications are differences in line item allocation under IFRS but do not affect income compared with that shown under US GAAP. They mainly comprise impacts from reporting 1) all jointly controlled entities |
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using the equity method, 2) the results of equity accounted investments on a single line (therefore after net finance costs and tax), 3) accretion expense arising on asset retirement obligations as net finance costs rather than as cost of sales, and 4) research and development within cost of sales. |
Three months | Nine months | |||||||||||||||
ended | ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
$ | ||||||||||||||||
Royal Dutch Petroleum Company | ||||||||||||||||
Earnings per share | 2.72 | 1.60 | 6.47 | 4.12 | ||||||||||||
— Continuing operations | 2.72 | 1.57 | 6.19 | 3.99 | ||||||||||||
— Discontinuing operations | – | 0.03 | 0.11 | 0.13 | ||||||||||||
— Cumulative effect of change in accounting policy | – | – | 0.17 | – | ||||||||||||
Diluted earnings per share | 2.71 | 1.60 | 6.45 | 4.11 | ||||||||||||
— Continuing operations | 2.71 | 1.57 | 6.17 | 3.98 | ||||||||||||
— Discontinuing operations | – | 0.03 | 0.11 | 0.13 | ||||||||||||
— Cumulative effect of change in accounting policy | – | – | 0.17 | – | ||||||||||||
The Shell Transport and Trading Company Limited | ||||||||||||||||
Earnings per share | 0.38 | 0.22 | 0.92 | 0.59 | ||||||||||||
— Continuing operations | 0.38 | 0.22 | 0.88 | 0.57 | ||||||||||||
— Discontinuing operations | — | — | 0.02 | 0.02 | ||||||||||||
— Cumulative effect of change in accounting policy | — | — | 0.02 | — | ||||||||||||
Diluted earnings per share | 0.38 | 0.22 | 0.91 | 0.59 | ||||||||||||
— Continuing operations | 0.38 | 0.22 | 0.87 | 0.57 | ||||||||||||
— Discontinuing operations | — | — | 0.02 | 0.02 | ||||||||||||
— Cumulative effect of change in accounting policy | — | — | 0.02 | — | ||||||||||||
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Employee | Reversals of | |||||||||||||||||||||||||
IFRS | benefits | Impairments | Impairments | Other | US GAAP | |||||||||||||||||||||
$ million | ||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||||
Property, plant and equipment | 85,601 | – | 675 | (156 | ) | (105 | ) | 86,015 | ||||||||||||||||||
Intangible assets | 4,361 | 349 | (5 | ) | – | (17 | ) | 4,688 | ||||||||||||||||||
Investments: | ||||||||||||||||||||||||||
equity accounted investments | 17,138 | 121 | (212 | ) | (53 | ) | (49 | ) | 16,945 | |||||||||||||||||
financial assets | 3,236 | – | – | – | (385 | ) | 2,851 | |||||||||||||||||||
Deferred tax | 3,039 | (991 | ) | (3 | ) | – | 206 | 2,251 | ||||||||||||||||||
Other long term assets | 6,555 | 5,545 | – | – | (166 | ) | 11,934 | |||||||||||||||||||
119,930 | 5,024 | 455 | (209 | ) | (516 | ) | 124,684 | |||||||||||||||||||
Current assets | ||||||||||||||||||||||||||
Inventories | 21,490 | – | – | – | – | 21,490 | ||||||||||||||||||||
Accounts receivable | 83,812 | – | – | – | (31 | ) | 83,781 | |||||||||||||||||||
Cash and cash equivalents | 15,998 | – | – | – | – | 15,998 | ||||||||||||||||||||
121,300 | – | – | – | (31 | ) | 121,269 | ||||||||||||||||||||
Total assets | 241,230 | 5,024 | 455 | (209 | ) | (547 | ) | 245,953 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||
Debt | 9,339 | – | – | – | (290 | ) | 9,049 | |||||||||||||||||||
Deferred tax | 12,411 | 1,428 | 237 | (125 | ) | 16 | 13,967 | |||||||||||||||||||
Provisions | 13,132 | (1,188 | ) | – | – | (1,279 | ) | 10,665 | ||||||||||||||||||
Other | 4,395 | – | – | – | 1,360 | 5,755 | ||||||||||||||||||||
39,277 | 240 | 237 | (125 | ) | (193 | ) | 39,436 | |||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||
Debt | 6,714 | – | – | – | (12 | ) | 6,702 | |||||||||||||||||||
Accounts payable and accrued liabilities | 86,284 | (22 | ) | – | – | 73 | 86,335 | |||||||||||||||||||
Taxes payable | 12,510 | – | – | – | 6 | 12,516 | ||||||||||||||||||||
107,064 | (22 | ) | – | – | 67 | 107,109 | ||||||||||||||||||||
Total liabilities | 146,341 | 218 | 237 | (125 | ) | (126 | ) | 146,545 | ||||||||||||||||||
Minority interest | 6,653 | 6,653 | ||||||||||||||||||||||||
Equity attributable to shareholders of Royal Dutch and Shell Transport | 88,279 | 4,786 | 218 | (84 | ) | (444 | ) | 92,755 | ||||||||||||||||||
Minority interest | 6,610 | 20 | – | – | (6,630 | ) | – | |||||||||||||||||||
Total equity | 94,889 | 4,806 | 218 | (84 | ) | (7,074 | ) | 92,755 | ||||||||||||||||||
Total liabilities and equity | 241,230 | 5,024 | 455 | (209 | ) | (547 | ) | 245,953 | ||||||||||||||||||
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At September 30, | ||||
2005 | ||||
$ million | ||||
Currency translation differences | 234 | |||
Unrealised gains on securities | 1,083 | |||
Unrealised gains on cash flow hedges | 692 | |||
Minimum pension liability | (1,645 | ) | ||
(1,020 | ) | |||
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12. | Reconciliations from IFRS to US GAAP in 2004 |
Employee | Cumulative | |||||||||||||||||||||||||||||||||||||||||||
benefits(3) | currency | Major | ||||||||||||||||||||||||||||||||||||||||||
Discontinued | translation | Reversals of | inspection | |||||||||||||||||||||||||||||||||||||||||
IFRS | operations(1) | Reclassifications(2) | (a) | (b) | differences(3) | Impairments(3) | impairments(3) | costs(3) | Other | US GAAP | ||||||||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||||||||||
Sales proceeds | 89,006 | (1,985 | ) | 453 | – | – | – | – | – | – | 2 | 87,476 | ||||||||||||||||||||||||||||||||
Less: Sales taxes, excise duties and similar levies | 18,321 | (690 | ) | 148 | – | – | – | – | – | – | – | 17,779 | ||||||||||||||||||||||||||||||||
Revenue | 70,685 | (1,295 | ) | 305 | – | – | – | – | – | – | 2 | 69,697 | ||||||||||||||||||||||||||||||||
Cost of sales | 58,604 | (1,006 | ) | 6 | (76 | ) | (35 | ) | (33 | ) | – | – | 15 | 19 | 57,494 | |||||||||||||||||||||||||||||
Gross profit | 12,081 | (289 | ) | 299 | 76 | 35 | 33 | – | – | (15 | ) | (17 | ) | 12,203 | ||||||||||||||||||||||||||||||
Selling and distribution expenses | 3,110 | (129 | ) | – | (4 | ) | (3 | ) | 28 | – | – | – | 24 | 3,026 | ||||||||||||||||||||||||||||||
Administrative expenses | 533 | (5 | ) | – | 5 | (1 | ) | – | – | – | – | (7 | ) | 525 | ||||||||||||||||||||||||||||||
Exploration | 294 | (2 | ) | 10 | – | – | – | – | – | – | – | 302 | ||||||||||||||||||||||||||||||||
Research and development | – | – | 97 | – | – | – | – | – | – | – | 97 | |||||||||||||||||||||||||||||||||
Share of profit of equity accounted investments | 1,254 | 20 | 574 | (3 | ) | – | – | – | – | 5 | (9 | ) | 1,841 | |||||||||||||||||||||||||||||||
Net finance costs and other income | 11 | (18 | ) | 67 | – | – | – | – | – | – | (35 | ) | 25 | |||||||||||||||||||||||||||||||
Income before taxation | 9,387 | (115 | ) | 699 | 72 | 39 | 5 | – | – | (10 | ) | (8 | ) | 10,069 | ||||||||||||||||||||||||||||||
Taxation | 3,790 | (22 | ) | 699 | 26 | 3 | – | – | – | (3 | ) | 81 | 4,574 | |||||||||||||||||||||||||||||||
Income from continuing operations | 5,597 | (93 | ) | – | 46 | 36 | 5 | – | – | (7 | ) | (89 | ) | 5,495 | ||||||||||||||||||||||||||||||
Income from discontinued operations | 23 | 64 | – | – | – | – | – | – | – | – | 87 | |||||||||||||||||||||||||||||||||
Income for the period | 5,620 | (29 | ) | – | 46 | 36 | 5 | – | – | (7 | ) | (89 | ) | 5,582 | ||||||||||||||||||||||||||||||
Attributable to minority interest | 249 | (29 | ) | – | (1 | ) | 1 | – | – | – | (5 | ) | 9 | 224 | ||||||||||||||||||||||||||||||
Income attributable to shareholders of Royal Dutch and Shell Transport | 5,371 | – | – | 47 | 35 | 5 | – | – | (2 | ) | (98 | ) | 5,358 | |||||||||||||||||||||||||||||||
(1) | The definition of activities classified as discontinued operations differs from that under US GAAP. Under IFRS equity accounted or other investments are not excluded from this classification, but the activity must be a separate major line of business or geographical area of operations. As a result, all of the items presented as discontinued operations in 2004 and 2005 under US GAAP are included within continuing operations under IFRS. |
(2) | Reclassifications are differences in line item allocation under IFRS but do not affect income compared with that shown under US GAAP. They mainly comprise impacts from reporting 1) all jointly controlled entities using the equity method, 2) the results of equity accounted investments on a single line (therefore after net finance costs and tax), 3) accretion expense arising on asset retirement obligations as net finance costs rather than as cost of sales, and 4) research and development within cost of sales. |
(3) | See Note 11. |
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Employee | Cumulative | |||||||||||||||||||||||||||||||||||||||||||
benefits(3) | currency | Major | ||||||||||||||||||||||||||||||||||||||||||
Discontinued | translation | Reversals of | inspection | |||||||||||||||||||||||||||||||||||||||||
IFRS | operations(1) | Reclassifications(2) | (a) | (b) | differences(3) | Impairments(3) | impairments(3) | costs(3) | Other | US GAAP | ||||||||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||||||||||
Sales proceeds | 243,634 | (5,448 | ) | 2,449 | – | – | – | – | – | – | 5 | 240,640 | ||||||||||||||||||||||||||||||||
Less: Sales taxes, excise duties and similar levies | 53,549 | (1,981 | ) | 920 | – | – | – | – | – | – | – | 52,488 | ||||||||||||||||||||||||||||||||
Revenue | 190,085 | (3,467 | ) | 1,529 | – | – | – | – | – | – | 5 | 188,152 | ||||||||||||||||||||||||||||||||
Cost of sales | 157,901 | (2,422 | ) | 187 | (210 | ) | (91 | ) | (21 | ) | – | – | 190 | 52 | 155,586 | |||||||||||||||||||||||||||||
Gross profit | 32,184 | (1,045 | ) | 1,342 | 210 | 91 | 21 | – | – | (190 | ) | (47 | ) | 32,566 | ||||||||||||||||||||||||||||||
Selling and distribution expenses | 9,046 | (357 | ) | – | 3 | (8 | ) | 28 | – | – | – | 22 | 8,734 | |||||||||||||||||||||||||||||||
Administrative expenses | 1,646 | (21 | ) | 1 | 22 | (2 | ) | – | – | – | – | (5 | ) | 1,641 | ||||||||||||||||||||||||||||||
Exploration | 1,294 | (5 | ) | 15 | – | – | – | – | – | – | – | 1,304 | ||||||||||||||||||||||||||||||||
Research and development | – | – | 392 | – | – | – | – | – | – | – | 392 | |||||||||||||||||||||||||||||||||
Share of profit of equity accounted investments | 3,496 | 52 | 1,197 | (9 | ) | – | – | (4 | ) | – | (17 | ) | (20 | ) | 4,695 | |||||||||||||||||||||||||||||
Net finance costs and other income | (32 | ) | (49 | ) | 4 | – | – | – | – | – | – | (66 | ) | (143 | ) | |||||||||||||||||||||||||||||
Income before taxation | 23,726 | (561 | ) | 2,127 | 176 | 101 | (7 | ) | (4 | ) | – | (207 | ) | (18 | ) | 25,333 | ||||||||||||||||||||||||||||
Taxation | 9,276 | (134 | ) | 2,127 | 63 | 6 | – | – | – | (68 | ) | 103 | 11,373 | |||||||||||||||||||||||||||||||
Income from continuing operations | 14,450 | (427 | ) | – | 113 | 95 | (7 | ) | (4 | ) | – | (139 | ) | (121 | ) | 13,960 | ||||||||||||||||||||||||||||
Income from discontinued operations | 65 | 371 | – | – | – | – | – | – | – | – | 436 | |||||||||||||||||||||||||||||||||
Income for the period | 14,515 | (56 | ) | – | 113 | 95 | (7 | ) | (4 | ) | – | (139 | ) | (121 | ) | 14,396 | ||||||||||||||||||||||||||||
Attributable to minority interest | 546 | (56 | ) | – | (2 | ) | 2 | – | – | – | (10 | ) | 6 | 486 | ||||||||||||||||||||||||||||||
Income attributable to shareholders of Royal Dutch and Shell Transport | 13,969 | – | – | 115 | 93 | (7 | ) | (4 | ) | – | (129 | ) | (127 | ) | 13,910 | |||||||||||||||||||||||||||||
F-113
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Employee | Cumulative | |||||||||||||||||||||||||||||||||||||||||||
benefits(3) | currency | Major | ||||||||||||||||||||||||||||||||||||||||||
Discontinued | translation | Reversals of | inspection | |||||||||||||||||||||||||||||||||||||||||
IFRS | operations(1) | Reclassifications(2) | (a) | (b) | differences(3) | Impairments(3) | impairments(3) | costs(3) | Other | US GAAP | ||||||||||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||||||||||||
Sales proceeds | 338,756 | (6,945 | ) | 3,803 | – | – | – | – | – | – | 7 | 335,621 | ||||||||||||||||||||||||||||||||
Less: Sales taxes, excise duties and similar levies | 72,370 | (2,529 | ) | 1,499 | – | – | – | – | – | – | – | 71,340 | ||||||||||||||||||||||||||||||||
Revenue | 266,386 | (4,416 | ) | 2,304 | – | – | – | – | – | – | 7 | 264,281 | ||||||||||||||||||||||||||||||||
Cost of sales | 223,259 | (1,810 | ) | 134 | (306 | ) | (128 | ) | 102 | (730 | ) | 211 | 223 | 54 | 221,009 | |||||||||||||||||||||||||||||
Gross profit | 43,127 | (2,606 | ) | 2,170 | 306 | 128 | (102 | ) | 730 | (211 | ) | (223 | ) | (47 | ) | 43,272 | ||||||||||||||||||||||||||||
Selling and distribution expenses | 12,550 | (448 | ) | – | 25 | (9 | ) | 28 | – | – | – | 87 | 12,233 | |||||||||||||||||||||||||||||||
Administrative expenses | 2,548 | (28 | ) | 3 | 25 | (5 | ) | – | – | – | – | (1 | ) | 2,542 | ||||||||||||||||||||||||||||||
Exploration | 1,809 | (5 | ) | 19 | – | – | – | – | – | – | – | 1,823 | ||||||||||||||||||||||||||||||||
Research and development | – | – | 553 | – | – | – | – | – | – | – | 553 | |||||||||||||||||||||||||||||||||
Share of profit of equity accounted investments | 5,015 | (252 | ) | 1,420 | (6 | ) | – | – | (212 | ) | (258 | ) | (50 | ) | (4 | ) | 5,653 | |||||||||||||||||||||||||||
Net finance costs and other income | (424 | ) | (28 | ) | 121 | – | – | – | – | – | – | (145 | ) | (476 | ) | |||||||||||||||||||||||||||||
Income before taxation | 31,659 | (2,349 | ) | 2,894 | 250 | 142 | (130 | ) | 518 | (469 | ) | (273 | ) | 8 | 32,250 | |||||||||||||||||||||||||||||
Taxation | 12,168 | (381 | ) | 2,894 | 77 | 27 | – | 258 | – | (75 | ) | 120 | 15,088 | |||||||||||||||||||||||||||||||
Income from continuing operations | 19,491 | (1,968 | ) | – | 173 | 115 | (130 | ) | 260 | (469 | ) | (198 | ) | (112 | ) | 17,162 | ||||||||||||||||||||||||||||
Income from discontinued operations | (234 | ) | 1,880 | – | – | – | – | – | – | – | – | 1,646 | ||||||||||||||||||||||||||||||||
Income for the period | 19,257 | (88 | ) | – | 173 | 115 | (130 | ) | 260 | (469 | ) | (198 | ) | (112 | ) | 18,808 | ||||||||||||||||||||||||||||
Attributable to minority interest | 717 | (88 | ) | – | (3 | ) | – | – | – | – | (2 | ) | 2 | 626 | ||||||||||||||||||||||||||||||
Income attributable to shareholders of Royal Dutch and Shell Transport | 18,540 | – | – | 176 | 115 | (130 | ) | 260 | (469 | ) | (196 | ) | (114 | ) | 18,182 | |||||||||||||||||||||||||||||
(1) | The definition of activities classified as discontinued operations differs from that under US GAAP. Under IFRS equity accounted or other investments are not excluded from this classification, but the activity must be a separate major line of business or geographical area of operations. As a result, all of the items presented as discontinued operations in 2004 and 2005 under US GAAP are included within continuing operations under IFRS. |
(2) | Reclassifications are differences in line item allocation under IFRS but do not affect income compared with that shown under US GAAP. They mainly comprise impacts from reporting 1) all jointly controlled entities using the equity method, 2) the results of equity accounted investments on a single line (therefore after net finance costs and tax), 3) accretion expense arising on asset retirement obligations as net finance costs rather than as cost of sales, and 4) research and development within cost of sales. |
(3) | See Note 11. |
F-114
Table of Contents
Major | ||||||||||||||||||||||||||
Employee | inspection | |||||||||||||||||||||||||
IFRS | Reclassifications(1) | benefits (a)(2) | costs(2) | Other(3) | US GAAP | |||||||||||||||||||||
$ million | ||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||||
Property, plant and equipment | 85,357 | 1,222 | – | (630 | ) | (42 | ) | 85,907 | ||||||||||||||||||
Intangible assets | 4,338 | 15 | 326 | – | (11 | ) | 4,668 | |||||||||||||||||||
Investments: | ||||||||||||||||||||||||||
equity accounted investments | 20,709 | 32 | 97 | (138 | ) | 59 | 20,759 | |||||||||||||||||||
financial assets | 2,435 | – | – | – | 51 | 2,486 | ||||||||||||||||||||
Deferred tax(2) | 3,015 | – | (541 | ) | 29 | (797 | ) | 1,706 | ||||||||||||||||||
Employee benefit assets | 1,975 | – | 5,305 | – | (10 | ) | 7,270 | |||||||||||||||||||
Other | 4,648 | 9 | (103 | ) | – | (30 | ) | 4,524 | ||||||||||||||||||
122,477 | 1,278 | 5,084 | (739 | ) | (780 | ) | 127,320 | |||||||||||||||||||
Current assets | ||||||||||||||||||||||||||
Inventories | 16,866 | 13 | – | – | – | 16,879 | ||||||||||||||||||||
Accounts receivable | 37,898 | 232 | – | – | (7 | ) | 38,123 | |||||||||||||||||||
Cash and cash equivalents | 3,948 | 5 | – | – | – | 3,953 | ||||||||||||||||||||
58,712 | 250 | – | – | (7 | ) | 58,955 | ||||||||||||||||||||
Total assets | 181,189 | 1,528 | 5,084 | (739 | ) | (787 | ) | 186,275 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||
Debt | 9,638 | 10 | – | – | (180 | ) | 9,468 | |||||||||||||||||||
Deferred tax(2) | 13,459 | 251 | 2,040 | (229 | ) | (908 | ) | 14,613 | ||||||||||||||||||
Employee benefit obligations | 6,873 | 19 | (1,920 | ) | – | 11 | 4,983 | |||||||||||||||||||
Other provisions | 5,525 | (1,086 | ) | – | – | 122 | 4,561 | |||||||||||||||||||
Other | 5,675 | 1,786 | – | – | 178 | 7,639 | ||||||||||||||||||||
41,170 | 980 | 120 | (229 | ) | (777 | ) | 41,264 | |||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||
Debt | 7,173 | – | – | – | (3 | ) | 7,170 | |||||||||||||||||||
Accounts payable and accrued liabilities | 38,399 | 1,310 | – | – | 17 | 39,726 | ||||||||||||||||||||
Taxes payable | 10,471 | 588 | – | – | – | 11,059 | ||||||||||||||||||||
Employee benefit obligations | 301 | (245 | ) | (57 | ) | – | 1 | – | ||||||||||||||||||
Other provisions | 1,128 | (1,105 | ) | – | – | (23 | ) | – | ||||||||||||||||||
57,472 | 548 | (57 | ) | – | (8 | ) | 57,955 | |||||||||||||||||||
Total liabilities | 98,642 | 1,528 | 63 | (229 | ) | (785 | ) | 99,219 | ||||||||||||||||||
Minority interest | 4,733 | 4,733 | ||||||||||||||||||||||||
Equity attributable to shareholders of Royal Dutch and Shell Transport | 77,813 | – | 5,001 | (495 | ) | 4 | 82,323 | |||||||||||||||||||
Minority interest | 4,734 | – | 20 | (15 | ) | (4,739 | ) | – | ||||||||||||||||||
Total equity | 82,547 | – | 5,021 | (510 | ) | (4,735 | ) | 82,323 | ||||||||||||||||||
Total liabilities and equity | 181,189 | 1,528 | 5,084 | (739 | ) | (787 | ) | 186,275 | ||||||||||||||||||
(1) | Reclassifications are differences in line item allocation under IFRS which do not affect equity compared with that shown under US GAAP. They mainly comprise impacts from reporting all jointly controlled entities using the equity method and separate reporting of all provisions. |
(2) | See Note 11. |
(3) | Includes the impact of the effect of transition to IFRS on cumulative currency translation differences. |
F-115
Table of Contents
Major | ||||||||||||||||||||||||||||||||||
Employee | Reversals of | inspection | ||||||||||||||||||||||||||||||||
IFRS | Reclassifications(1) | benefits (a)(2) | Impairments(2) | impairments(2) | costs(2) | Other(3) | US GAAP | |||||||||||||||||||||||||||
$ million | ||||||||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||||||||||||
Property, plant and equipment | 87,918 | 1,309 | – | 730 | (211 | ) | (660 | ) | (146 | ) | 88,940 | |||||||||||||||||||||||
Intangible assets | 4,528 | 19 | 349 | – | – | – | (6 | ) | 4,890 | |||||||||||||||||||||||||
Investments: | ||||||||||||||||||||||||||||||||||
equity accounted investments | 20,493 | (222 | ) | 99 | (212 | ) | (397 | ) | (170 | ) | 152 | 19,743 | ||||||||||||||||||||||
financial assets | 2,700 | – | – | – | – | – | 48 | 2,748 | ||||||||||||||||||||||||||
Deferred tax | 2,789 | (6 | ) | (980 | ) | (12 | ) | – | 31 | 173 | 1,995 | |||||||||||||||||||||||
Employee benefit assets | 2,479 | – | 5,377 | – | – | – | 422 | 8,278 | ||||||||||||||||||||||||||
Other | 4,490 | 8 | (98 | ) | – | – | – | (31 | ) | 4,369 | ||||||||||||||||||||||||
125,397 | 1,108 | 4,747 | 506 | (608 | ) | (799 | ) | 612 | 130,963 | |||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||||||
Inventories | 15,375 | 16 | – | – | – | – | – | 15,391 | ||||||||||||||||||||||||||
Accounts receivable | 37,473 | 575 | – | – | – | – | 15 | 38,063 | ||||||||||||||||||||||||||
Cash and cash equivalents | 9,201 | 6 | – | – | – | – | 1 | 9,208 | ||||||||||||||||||||||||||
62,049 | 597 | – | – | – | – | 16 | 62,662 | |||||||||||||||||||||||||||
Total assets | 187,446 | 1,705 | 4,747 | 506 | (608 | ) | (799 | ) | 628 | 193,625 | ||||||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||||||||||
Debt | 8,858 | (26 | ) | – | – | – | – | (232 | ) | 8,600 | ||||||||||||||||||||||||
Deferred tax | 12,930 | 206 | 1,541 | 246 | (139 | ) | (220 | ) | 280 | 14,844 | ||||||||||||||||||||||||
Employee benefit obligations | 6,795 | 21 | (1,711 | ) | – | – | – | (61 | ) | 5,044 | ||||||||||||||||||||||||
Other provisions | 6,828 | (1,227 | ) | – | – | – | – | 108 | 5,709 | |||||||||||||||||||||||||
Other | 5,800 | 2,014 | – | – | – | – | 251 | 8,065 | ||||||||||||||||||||||||||
41,211 | 988 | (170 | ) | 246 | (139 | ) | (220 | ) | 346 | 42,262 | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||||||||
Debt | 5,734 | – | – | – | – | – | 28 | 5,762 | ||||||||||||||||||||||||||
Accounts payable and accrued liabilities | 37,909 | 1,868 | – | – | – | – | 85 | 39,862 | ||||||||||||||||||||||||||
Taxes payable | 9,058 | 829 | – | – | – | – | (2 | ) | 9,885 | |||||||||||||||||||||||||
Employee benefit obligations | 339 | (282 | ) | (57 | ) | – | – | – | – | – | ||||||||||||||||||||||||
Other provisions | 1,812 | (1,698 | ) | – | – | – | – | (114 | ) | – | ||||||||||||||||||||||||
54,852 | 717 | (57 | ) | – | – | – | (3 | ) | 55,509 | |||||||||||||||||||||||||
Total liabilities | 96,063 | 1,705 | (227 | ) | 246 | (139 | ) | (220 | ) | 343 | 97,771 | |||||||||||||||||||||||
Minority interest | – | – | – | – | – | – | 5,309 | 5,309 | ||||||||||||||||||||||||||
Equity attributable to Shareholders of Royal Dutch and Shell Transport | 86,070 | – | 4,954 | 260 | (469 | ) | (564 | ) | 294 | 90,545 | ||||||||||||||||||||||||
Minority interest | 5,313 | – | 20 | – | – | (15 | ) | (5,318 | ) | – | ||||||||||||||||||||||||
Total equity | 91,383 | – | 4,974 | 260 | (469 | ) | (579 | ) | (5,024 | ) | 90,545 | |||||||||||||||||||||||
Total liabilities and equity | 187,446 | 1,705 | 4,747 | 506 | (608 | ) | (799 | ) | 628 | 193,625 | ||||||||||||||||||||||||
(1) | Reclassifications are differences in line item allocation under IFRS which do not affect equity compared with that shown under US GAAP. They mainly comprise impacts from reporting all jointly controlled entities using the equity method and separate reporting of all provisions. The impact of the reclassification to report all jointly controlled entities using the equity method will also be reflected in the Supplementary information — Oil and Gas (unaudited) in the Shell Group’s 2005 Annual Report. |
(2) | See Note 11. |
(3) | Includes the impact of the effect of transition to IFRS on cumulative currency translation differences. |
F-116
Table of Contents
Major | ||||||||||||||||||||||||||
Employee | inspection | |||||||||||||||||||||||||
US GAAP | Reclassifications(1) | benefits (a)(2) | costs(2) | Other | IFRS | |||||||||||||||||||||
$ million | ||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||||
Property, plant and equipment | 87,088 | (1,350 | ) | – | 440 | 103 | 86,281 | |||||||||||||||||||
Intangible assets | 4,735 | (16 | ) | (326 | ) | – | – | 4,393 | ||||||||||||||||||
Investments: | ||||||||||||||||||||||||||
equity accounted investments | 19,371 | (118 | ) | (109 | ) | 113 | (78 | ) | 19,179 | |||||||||||||||||
financial assets | 3,403 | – | – | – | (54 | ) | 3,349 | |||||||||||||||||||
Deferred tax | 2,092 | – | 935 | (17 | ) | 53 | 3,063 | |||||||||||||||||||
Employee benefit assets | 6,516 | – | (5,055 | ) | – | – | 1,461 | |||||||||||||||||||
Other | 2,741 | (14 | ) | 119 | – | 33 | 2,879 | |||||||||||||||||||
125,946 | (1,498 | ) | (4,436 | ) | 536 | 57 | 120,605 | |||||||||||||||||||
Current assets | ||||||||||||||||||||||||||
Inventories | 12,690 | (13 | ) | – | – | – | 12,677 | |||||||||||||||||||
Accounts receivable | 29,013 | (328 | ) | – | – | 2 | 28,687 | |||||||||||||||||||
Cash and cash equivalents | 2,117 | (10 | ) | – | – | – | 2,107 | |||||||||||||||||||
43,820 | (351 | ) | – | – | 2 | 43,471 | ||||||||||||||||||||
Total assets | 169,766 | (1,849 | ) | (4,436 | ) | 536 | 59 | 164,076 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||
Debt | 9,100 | – | – | – | 174 | 9,274 | ||||||||||||||||||||
Deferred tax | 15,185 | (257 | ) | (1,596 | ) | 153 | 316 | 13,801 | ||||||||||||||||||
Employee benefit obligations | 4,927 | (20 | ) | 2,038 | – | – | 6,945 | |||||||||||||||||||
Other provisions | 3,955 | 1,072 | – | – | (86 | ) | 4,941 | |||||||||||||||||||
Other | 6,054 | (1,838 | ) | – | – | (194 | ) | 4,022 | ||||||||||||||||||
39,221 | (1,043 | ) | 442 | 153 | 210 | 38,983 | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||
Debt | 10,569 | – | – | – | 6 | 10,575 | ||||||||||||||||||||
Accounts payable and accrued liabilities | 32,383 | (1,553 | ) | – | – | (15 | ) | 30,815 | ||||||||||||||||||
Taxes payable | 5,927 | (561 | ) | – | – | – | 5,366 | |||||||||||||||||||
Employee benefit obligations | – | 259 | 60 | – | – | 319 | ||||||||||||||||||||
Other provisions | – | 1,049 | – | – | 26 | 1,075 | ||||||||||||||||||||
48,879 | (806 | ) | 60 | – | 17 | 48,150 | ||||||||||||||||||||
Total liabilities | 88,100 | (1,849 | ) | 502 | 153 | 227 | 87,133 | |||||||||||||||||||
Minority interests | 3,415 | – | (20 | ) | 15 | (3,410 | ) | – | ||||||||||||||||||
Equity attributable to shareholders of Royal Dutch and Shell Transport | 78,251 | – | (4,918 | ) | 368 | (166 | ) | 73,535 | ||||||||||||||||||
Minority interest | – | – | – | – | 3,408 | 3,408 | ||||||||||||||||||||
Total equity | 78,251 | – | (4,918 | ) | 368 | 3,242 | 76,943 | |||||||||||||||||||
Total liabilities and equity | 169,766 | (1,849 | ) | (4,436 | ) | 536 | 59 | 164,076 | ||||||||||||||||||
(1) | Reclassifications are differences in line item allocation under IFRS which do not affect equity compared with that shown under US GAAP. They mainly comprise impacts from reporting all jointly controlled entities using the equity method and separate reporting of all provisions. The impact of the reclassification to report all jointly controlled entities using the equity method will also be reflected in the Supplementary information — Oil and Gas (unaudited) in the Shell Group’s 2005 Annual Report. |
(2) | See Note 11. |
F-117