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RDS 4th Quarter And Full Year 2012 Unaudited Results

The 3 year average headline proved Reserves Replacement Ratio on an SEC basis is expected to be around 84%. Our 3 year average Organic Reserves Replacement Ratio, which excludes the impact of oil and gas price movements in the year, acquisitions and divestments, is expected to be around 115%.

Further information will be provided in our Annual Report and Form 20-F, which is expected to be filed in March 2013.

Summary of identified items

Earnings in the fourth quarter 2012 reflected the following items, which in aggregate amounted to a net gain of $1,712 million (compared with a net gain of $1,613 million in the fourth quarter 2011), as summarised in the table below:

  • Upstream earnings included a net gain of $1,801 million, reflecting gains of $1,756 million mainly related to divestments, and the mark-to-market valuation of certain gas contracts (see Note 2). Upstream earnings for the fourth quarter 2011 included a net gain of $1,458 million.
  • Downstream earnings included a net charge of $89 million, reflecting losses related to divestments, partly offset by a tax credit. Downstream earnings for the fourth quarter 2011 included a net gain of $34 million.
  • Corporate results and Non-controlling interest did not include any identified items in the fourth quarter of 2012. Corporate results and Non-controlling interest for the fourth quarter 2011 included a net gain of $121 million.
    Summary of Identified Items           

           Quarters                    $ million               Full year
    Q4 2012 Q3 2012 Q4 2011                                   2012   2011
                            Segment earnings impact of
                            identified items:
      1,801   (298)   1,458 Upstream                          2,137  3,855
        (89)  (134)      34 Downstream                           39     15
                            Corporate and Non-controlling
          -       -     121 interest                           (271)    68
      1,712   (432)   1,613 Earnings impact                   1,905  3,938
 

These identified items generally relate to events with an impact of more than $50 million on Royal Dutch Shell's CCS earnings and are shown to provide additional insight into segment earnings and income attributable to shareholders. Further comments on the business segments are provided in the section 'Earnings by Business Segment' on pages 5 to 7.

Earnings BY BUSINESS segment

    Upstream
              Quarters                    $ million              Full year
    Q4 2012 Q3 2012 Q4 2011 %[1]                              2012   2011   %
 
                                 Upstream earnings excluding
      4,377   4,888   5,107 -14  identified items            20,025 20,600  -3
      6,178   4,590   6,565  -6  Upstream earnings           22,162 24,455  -9
 
                                 Upstream cash flow from
      6,165   8,278   6,485  -5  operating activities        33,061 30,579  +8
 
                                 Upstream net capital
      9,323   6,932   7,363 +27  investment                  25,320 19,083 +33
 
                                 Liquids production
                                 available for sale
      1,640   1,599   1,644  -   (thousand b/d)               1,633  1,666  -2
                                 Natural gas production
                                 available for sale (million
     10,288   8,022   9,633  +7  scf/d)                       9,449  8,986  +5
                                 Total production available
      3,414   2,982   3,305  +3  for sale (thousand boe/d)    3,262  3,215  +1
 
                                 Equity LNG sales volumes
       5.49    4.97    4.84 +13  (million tonnes)             20.20  18.83  +7

    [1] Q4 on Q4 change

Fourth quarter Upstream earnings excluding identified items were $4,377 million compared with $5,107 million a year ago. Identified items were a net gain of $1,801 million, compared with a net gain of $1,458 million in the fourth quarter 2011 (see page 4).

Compared with the fourth quarter 2011, Upstream earnings excluding identified items benefited from the contribution of Integrated Gas, reflecting the ramp-up of Pearl GTL in Qatar, higher equity LNG sales volumes and realisations as well as increased LNG trading contributions. Earnings were lower than in the fourth quarter 2011 mainly due to increased operating expenses, higher depreciation and higher exploration expenses. Earnings were also impacted by lower liquids and synthetic crude oil realisations in the Americas, which incurred a loss.

Global liquids realisations were 1% lower than in the fourth quarter 2011. In Canada, synthetic crude oil realisations were 19% lower than in the same period last year. Global natural gas realisations were 3% higher than in the same quarter a year ago, with a 4% decrease in the Americas and a 3% increase outside the Americas.

Fourth quarter 2012 production was 3,414 thousand boe/d compared with 3,305 thousand boe/d a year ago, an increase of 3%. Liquids production was in line with the fourth quarter 2011, while natural gas production increased by 7%.

New field start-ups and the continuing ramp-up of fields, in particular Pearl GTL in Qatar and Pluto LNG in Australia, contributed some 235 thousand boe/d to production in the fourth quarter 2012, which more than offset the impact of field declines.

Equity LNG sales volumes of 5.49 million tonnes were 13% higher than in the same quarter a year ago. Equity LNG sales volumes reflected the contribution from Pluto LNG and higher volumes from Qatargas 4 LNG.

Full year Upstream earnings excluding identified items were $20,025 million compared with $20,600 million in 2011. Identified items were a net gain of $2,137 million, compared with a net gain of $3,855 million in 2011.

Compared with 2011, Upstream earnings excluding identified items benefited from the contribution of Integrated Gas, reflecting the ramp-up of Pearl GTL in Qatar, higher LNG realisations as well as increased LNG trading contributions and equity LNG sales volumes. Earnings also reflected higher gas realisations outside the Americas. These items were more than offset by reduced contributions of the Americas, mainly as a result of higher depreciation, increased operating expenses, higher exploration expenses and lower gas realisations.

Global liquids realisations were 1% higher than in 2011. In Canada, synthetic crude oil realisations were 11% lower than in 2011. Global natural gas realisations were 1% higher than in 2011, with a 31% decrease in the Americas and a 9% increase outside the Americas.

Full year 2012 production was 3,262 thousand boe/d compared with 3,215 thousand boe/d for 2011. Liquids production was down 2% and natural gas production increased by 5% compared with 2011. Excluding the impact of divestments and exits, production volumes in 2012 were 3% higher than in 2011.

New field start-ups and the continuing ramp-up of fields, in particular the ramp-up of Pearl GTL in Qatar and Pluto LNG in Australia, contributed some 225 thousand boe/d to production in 2012, which more than offset the impact of field declines.

Equity LNG sales volumes of 20.20 million tonnes were 7% higher than in 2011, mainly reflecting the successful ramp-up of Qatargas 4 LNG in Qatar and the start-up of Pluto LNG in Australia.

    DOWNSTREAM
              Quarters                   $ million              Full year
    Q4 2012 Q3 2012 Q4 2011 %[1]                             2012   2011   %
 
                                 Downstream CCS earnings
      1,163   1,731   (278)  -   excluding identified items  5,311  4,274  +24
      1,074   1,597   (244)  -   Downstream CCS earnings     5,350  4,289  +25
 
                                 Downstream cash flow from
      4,303     335     324  -   operating activities       11,111  4,921 +126
 
                                 Downstream net capital
      1,471   1,051   2,362 -38  investment                  4,275  4,342   -2
 
                                 Refinery processing intake
      2,804   2,880   2,666  +5  (thousand b/d)              2,819  2,845   -1
 
                                 Oil products sales volumes
      6,367   6,290   6,155  +3  (thousand b/d)              6,235  6,196   +1
 
                                 Chemicals sales volumes
      4,620   4,699   4,440  +4  (thousand tonnes)          18,669 18,831   -1

    [1] Q4 on Q4 change

Fourth quarter Downstream earnings excluding identified items were $1,163 million compared with a loss of $278 million in the fourth quarter 2011. Identified items were a net charge of $89 million, compared with a net gain of $34 million in the fourth quarter 2011 (see page 4).

Compared with the fourth quarter 2011, Downstream earnings excluding identified items benefited from higher realised refining margins and Shell's improved operating performance, as well as increased contributions from marketing and trading. Chemicals earnings were lower, mainly as a result of higher operating expenses and, in the United States, supply constraints of advantaged feedstock.

Oil products sales volumes were 3% higher compared with the same period a year ago, mainly as a result of increased trading volumes.

Chemicals sales volumes increased by 4% compared with the same quarter last year, due to improved operating performance and demand. Chemicals manufacturing plant availability was 91% compared with 86% in the fourth quarter 2011, mainly due to lower planned maintenance activities.

Refinery intake volumes were 5% higher compared with the fourth quarter 2011. Excluding portfolio impacts, refinery intake volumes were 8% higher than in the same period a year ago. Refinery availability was 92%, in line with the fourth quarter 2011.

In the United States, the crude distillation unit at the expansion of Motiva's refinery (Shell share 50%) in Port Arthur, Texas was restarted in January 2013 and is expected to ramp-up during early 2013.

Full year Downstream earnings excluding identified items were $5,311 million compared with $4,274 million in 2011. Identified items were a net gain of $39 million, compared with a net gain of $15 million in 2011.

Compared with 2011, Downstream earnings excluding identified items reflected higher realised refining margins and lower operating expenses, mainly as a result of favourable currency exchange rate effects. Trading contributions were lower, while marketing contributions were broadly in line with 2011. Chemicals earnings were lower, mainly as a result of the impact of the global economic slowdown and, in the United States, supply constraints of advantaged feedstock and the impact of hurricane Isaac on operations.

Oil products sales volumes were 1% higher compared with 2011. Lower marketing volumes, mainly as a result of portfolio divestments, were more than offset by higher trading volumes. Excluding the impact of divestments and the effect of the formation of the Raízen joint venture, sales volumes were 3% higher than in 2011.

Chemicals sales volumes were 1% lower compared with 2011, as reductions in European manufacturing capacity and rationalisation of the contract portfolio were largely offset by improved operating performance. Chemicals manufacturing plant availability increased to 91% compared with 89% in 2011.

Refinery intake volumes were 1% lower compared with 2012. Excluding portfolio impacts, refinery intake volumes were 4% higher than in 2011. Refinery availability increased to 93% compared with 92% in 2011.

    Corporate and Non-controlling Interest

           Quarters                       $ million                 Full year
    Q4 2012 Q3 2012 Q4 2011                                        2012  2011
 
                            Corporate and Non-controlling interest
         42    (60)     17  excl. identified items                 (197) (187)
                            Of which:
         76     15      24  Corporate                                25    63
        (34)   (75)     (7) Non-controlling interest               (222) (250)
 
         42    (60)    138  Corporate and Non-controlling interest (468) (119)
 

Fourth quarter Corporate results and Non-controlling interest excluding identified items were $42 million compared with $17 million in the same period of 2011. Identified items in the fourth quarter 2011 were a net gain of $121 million (see page 4).

Corporate results excluding identified items compared with the fourth quarter 2011 mainly reflected favourable currency exchange rate effects and higher tax credits, partly offset by higher net interest expense.

Full year Corporate results and Non-controlling interest excluding identified items were a loss of $197 million compared with a loss of $187 million in 2011. Identified items were a net charge of $271 million, compared with a net gain of $68 million in 2011.

Corporate results excluding identified items compared with 2011 mainly reflected higher net interest expense and increased operating expenses, which were largely offset by higher tax credits and favourable currency exchange rate effects.

FORTHCOMING EVENTS

First quarter 2013 results and first quarter 2013 dividend are scheduled to be announced on May 2, 2013. Second quarter 2013 results and second quarter 2013 dividend are scheduled to be announced on August 1, 2013. Third quarter 2013 results and third quarter 2013 dividend are scheduled to be announced on October 31, 2013.

Unaudited Condensed Consolidated Financial Statements

    Consolidated Statement of income

              Quarters                   $ million              Full year
    Q4 2012 Q3 2012 Q4 2011 %[1]                            2012    2011    %
    118,047 112,118 115,575      Revenue                   467,153 470,171
                                 Share of profit of
                                 equity-accounted
      2,127   2,367   2,233      investments                 8,948   8,737
      2,437     944   1,320      Interest and other income   5,599   5,581
                                 Total revenue and other
    122,611 115,429 119,128      income                    481,700 484,489
     93,350  87,265  91,865      Purchases                 369,725 370,044
                                 Production and
      7,339   6,513   6,993      manufacturing expenses     26,280  26,458
                                 Selling, distribution and
      3,759   3,709   3,706      administrative expenses    14,616  14,335
        419     311     404      Research and development    1,314   1,125
      1,167     713     825      Exploration                 3,104   2,266
                                 Depreciation, depletion
      3,835   3,875   3,243      and amortisation           14,615  13,228
        379     415     287      Interest expense            1,757   1,373
     12,363  12,628  11,805   +5 Income before taxation     50,289  55,660 -10
      5,664   5,389   5,337      Taxation                   23,449  24,475
      6,699   7,239   6,468   +4 Income for the period      26,840  31,185 -14
                                 Income attributable to
         28     100    (32)      non-controlling interest      248     267
                                 Income attributable to
                                 Royal Dutch Shell plc
      6,671   7,139   6,500   +3 shareholders               26,592  30,918 -14
 
                                                          [1] Q4 on Q4 change.
 
    Earnings per share

           Quarters                         $                    Full year
    Q4 2012 Q3 2012 Q4 2011                                    2012    2011
     1.06    1.14    1.04   Basic earnings per share           4.25    4.98
     1.06    1.14    1.04   Diluted earnings per share         4.24    4.97
    SHARES[1]

           Quarters                      Million                 Full year
    Q4 2012 Q3 2012 Q4 2011                                    2012    2011
                            Weighted average number of shares
                            as the basis for:
    6,282.8 6,266.3 6,231.3 Basic earnings per share          6,261.2 6,212.5
    6,289.2 6,273.9 6,241.0 Diluted earnings per share        6,267.8 6,221.7
 
                            Shares outstanding at the end of
    6,305.9 6,284.8 6,220.1 the period                        6,305.9 6,220.1

    [1] Royal Dutch Shell plc ordinary shares of EUR0.07 each.
    Consolidated Statement of Comprehensive Income

           Quarters                      $ million                Full year
    Q4 2012 Q3 2012 Q4 2011                                      2012   2011
      6,699   7,239   6,468 Income for the period               26,840  31,185
                            Other comprehensive income, net of
                            tax:
        140   2,424 (1,310) Currency translation differences     1,644 (3,328)
                            Unrealised gains/(losses) on
      (683)    (97)   1,671 securities                           (815)   1,684
        101   (187)   (133) Cash flow hedging gains/(losses)        31   (222)
                            Share of other comprehensive
                            income/(loss) of
 
      (179)      27    (39) equity-accounted investments         (222)      60
                            Other comprehensive income/(loss)
      (621)   2,167     189 for the period                         638 (1,806)
      6,078   9,406   6,657 Comprehensive income for the period 27,478  29,379
                            Comprehensive income/(loss)
                            attributable to
 
         46     132   (603) non-controlling interest               300   (348)
                            Comprehensive income attributable
                            to
 
      6,032   9,274   7,260 Royal Dutch Shell plc shareholders  27,178  29,727
    Consolidated Statement of Changes in Equity

                        Equity attributable to Royal Dutch
                              Shell plc shareholders

                            Shares
                     Share  held in  Other   Retained          Non-controlling  Total
       $ million    capital  trust  reserves earnings  Total      interest      equity
    At January 1,
    2012                536 (2,990)    8,984  162,987  169,517           1,486  171,003
    Comprehensive
    income for the
    period                -       -      586   26,592   27,178             300   27,478
    Capital
    contributions
    from, and other
    changes in,
    non-controlling
    interest              -       -        -       39       39            (61)     (22)
    Dividends paid        -       -        - (10,955) (10,955)           (292) (11,247)
    Scrip
    dividends[1]          9       -      (9)    3,565    3,565               -    3,565
    Repurchases of
    shares[2]           (3)       -        3  (1,728)  (1,728)               -  (1,728)
    Shares held in
    trust: net
    sales/
    (purchases) and
    dividends
    received              -     703        -      150      853               -      853
    Share-based
    compensation          -       -      457    (432)       25               -       25
    At December 31,
    2012                542 (2,287)   10,021  180,218  188,494           1,433  189,927

    [1] During 2012 some 103.8 million Class A shares, equivalent to $3.6
    billion, were issued under the Scrip Dividend Programme.
 
    [2] Includes shares committed to repurchase at December 31, 2012.
                        Equity attributable to Royal Dutch
                              Shell plc shareholders

                            Shares
                     Share  held in  Other   Retained          Non-controlling  Total
       $ million    capital  trust  reserves earnings  Total      interest      equity
    At January 1,
    2011                529 (2,789)   10,094  140,179  148,013           1,767  149,780
    Comprehensive
    income for the
    period                -       -  (1,191)   30,918   29,727           (348)   29,379
    Capital
    contributions
    from, and other
    changes in,
    non-controlling
    interest              -       -        -       41       41             505      546
    Dividends paid        -       -        - (10,457) (10,457)           (438) (10,895)
    Scrip
    dividends[1]         10       -     (10)    3,580    3,580               -    3,580
    Repurchases of
    shares              (3)       -        3  (1,106)  (1,106)               -  (1,106)
    Shares held in
    trust: net
    sales/
    (purchases) and
    dividends
    received              -   (201)        -      142     (59)               -     (59)
    Share-based
    compensation          -       -       88    (310)    (222)               -    (222)
    At December 31,
    2011                536 (2,990)    8,984  162,987  169,517           1,486  171,003

    [1] During 2011 some 104.6 million Class A shares, equivalent to $3.6
    billion, were issued under the Scrip Dividend Programme.
    Condensed Consolidated balance sheet
                                                      $ million
                                                       Sept 30,
                                        Dec 31, 2012     2012     Dec 31, 2011
 
    Assets
    Non-current assets:
    Intangible assets                          4,470        4,478        4,521
    Property, plant and equipment            172,293      162,401      152,081
    Equity-accounted investments              38,350       39,033       37,990
    Investments in securities                  4,867        5,492        5,492
    Deferred tax                               4,045        4,246        4,732
    Retirement benefits                       12,575       12,461       11,408
    Trade and other receivables                8,991       10,070        9,256
                                             245,591      238,181      225,480
 
    Current assets:
    Inventories                               30,781       32,358       28,976
    Trade and other receivables               65,403       70,972       79,509
    Cash and cash equivalents                 18,550       18,839       11,292
                                             114,734      122,169      119,777
 
    Total assets                             360,325      360,350      345,257
 
    Liabilities
    Non-current liabilities:
    Debt                                      29,921       28,078       30,463
    Trade and other payables                   4,175        4,322        4,921
    Deferred tax                              15,590       16,107       14,649
    Retirement benefits                        6,298        6,169        5,931
    Decommissioning and other
    provisions                                17,435       16,262       15,631
                                              73,419       70,938       71,595
 
    Current liabilities:
    Debt                                       7,833        8,280        6,712
    Trade and other payables                  72,839       77,550       81,846
    Taxes payable                             12,684       14,869       10,606
    Retirement benefits                          402          399          387
    Decommissioning and other
    provisions                                 3,221        3,131        3,108
                                              96,979      104,229      102,659
 
    Total liabilities                        170,398      175,167      174,254
 
    Equity attributable to Royal Dutch
    Shell plc shareholders                   188,494      183,785      169,517
 
    Non-controlling interest                   1,433        1,398        1,486
    Total equity                             189,927      185,183      171,003
 
    Total liabilities and equity             360,325      360,350      345,257
    Condensed consolidated statement of cash flows

            Quarters                    $ million                Full year
    Q4 2012  Q3 2012 Q4 2011                                   2012     2011
 
                             Cash flow from operating
                             activities
       6,699   7,239   6,468 Income for the period             26,840   31,185
                             Adjustment for:
       5,966   5,385   5,816 - Current taxation                22,722   23,009
         324     362     275 - Interest expense (net)           1,543    1,164
                             - Depreciation, depletion and
       3,835   3,875   3,243 amortisation                      14,615   13,228
      (2,083)   (428) (1,150)- Net gain on sales of assets     (4,228)  (4,485)
                             - Decrease/(increase) in net
         994 (2,209)   (688) working capital                    3,391   (6,471)
                             - Share of profit of
     (2,127) (2,367) (2,233) equity-accounted investments      (8,948)  (8,737)
                             - Dividends received from
                             equity-accounted
       2,655   2,537   3,196 investments                       10,573    9,681
                             - Deferred taxation and
                             decommissioning and
 
        (365)    (75)   (159)other provisions                     461    1,768
         553    (205)   (550)- Other                              201     (949)
                             Net cash from operating
      16,451  14,114  14,218 activities (pre-tax)              67,170   59,393
 
      (6,538) (4,631) (7,753)Taxation paid                    (21,030) (22,622)
 
                             Net cash from operating
       9,913   9,483   6,465 activities                        46,140   36,771
 
                             Cash flow from investing
                             activities
    (10,674) (8,413) (9,914) Capital expenditure              (32,576) (26,301)
                             Investments in
       (217)   (789)   (315) equity-accounted investments      (3,028)  (1,886)
       1,513     786   1,175 Proceeds from sales of assets      6,346    6,990
                             Proceeds from sales of
         415      56      43 equity-accounted investments         698      468
                             Proceeds from
                             sales/(purchases) of
         (30)    (26)     83 securities (net)                     (86)      90
          53      47      11 Interest received                    193      196
                             Net cash used in investing
      (8,940) (8,339) (8,917)activities                       (28,453) (20,443)
 
                             Cash flow from
                             financing activities
                             Net (decrease)/increase in
                             debt with maturity period
 
        (467)    507    (841)within three months                 (165)  (3,724)
       1,813   2,551       5 Other debt: New borrowings         5,108    1,249
        (278)   (182)   (585) Repayments                       (4,960)  (4,649)
        (283)   (352)   (470) Interest paid                    (1,428)  (1,665)
                             Change in non-controlling
          25     (10)     11 interest                              23        8
                             Cash dividends paid to:
                             - Royal Dutch Shell plc
      (1,634) (1,973) (1,688)shareholders                      (7,390)  (6,877)
         (26)   (164)    (64)- Non-controlling interest          (292)    (438)
        (453)   (149)   (289)Repurchases of shares             (1,492)  (1,106)
                             Shares held in trust: net
                             sales/(purchases) and
         (43)    (93) (1,342)dividends received                   (34)    (929)
                             Net cash used in financing
      (1,346)     135 (5,263)activities                       (10,630) (18,131)
 
                             Currency translation
                             differences relating to cash
                             and
 
          84     278    (249)cash equivalents                     201     (349)
                             Increase/(decrease) in cash
        (289)   1,557 (7,964)and cash equivalents               7,258   (2,152)
 
                             Cash and cash equivalents at
      18,839  17,282  19,256 beginning of period               11,292   13,444
 
                             Cash and cash equivalents at
      18,550  18,839  11,292 end of period                     18,550   11,292
 

EXPLANATORY Notes

1. Basis of preparation

The unaudited quarterly and full year financial report and tables of Royal Dutch Shell plc and its subsidiaries (collectively known as Shell) are prepared on the basis of the same accounting principles as, and should be read in conjunction with, the Annual Report and Form 20-F for the year ended December 31, 2011 (pages 105 to 110) as filed with the U.S. Securities and Exchange Commission.

The financial information presented does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006. Statutory accounts for the year ended December 31, 2011 were published in Shell's Annual Report and a copy was delivered to the Registrar of Companies in England and Wales. The auditors' report on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.

Segment information

Segment earnings are presented on a current cost of supplies basis (CCS earnings). On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings thus exclude the effect of changes in the oil price on inventory carrying amounts. Net capital investment information is presented as measured based on capital expenditure as reported in the Condensed Consolidated Statement of Cash Flows, adjusted for: proceeds from divestments; exploration expenses excluding exploration wells written off; investments in equity-accounted investments; and leases and other items.

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

2. Impacts of accounting for derivatives

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

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

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

The accounting impacts of the aforementioned are reported as identified items in the quarterly results.

3. Return on average capital employed

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

CAUTIONARY STATEMENT

All amounts shown throughout this Report are unaudited.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this document "Shell", "Shell Group" and " Royal Dutch Shell" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. "Subsidiaries", "Shell subsidiaries" and "Shell companies" as used in this document refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as "associated companies" or "associates" and companies in which Shell has joint control are referred to as "jointly controlled entities". In this document, associates and jointly controlled entities are also referred to as "equity-accounted investments". The term "Shell interest" is used for convenience to indicate the direct and/or indirect (for example, through our 23 per cent shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This document contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell and the Shell Group to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook", "plan", "probably", "project", "risks", "seek", "should", "target", "will" and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and the Shell Group and could cause those results to differ materially from those expressed in the forward-looking statements included in this document, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Shell's Annual Report and Form 20-F for the year ended December 31, 2011 (available at http://www.shell.com/investor and http://www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this document, January 31, 2013. Neither Shell nor any of its subsidiaries nor the Shell Group undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this document.

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

January 31, 2013

Contacts:

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

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

SOURCE Royal Dutch Shell plc

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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