ROYAL DUTCH SHELL PLC 3RD QUARTER 2021 UNAUDITED RESULTS
ROYAL DUTCH SHELL PLC
3RD QUARTER 2021 UNAUDITED RESULTS
*SUMMARY OF UNAUDITED RESULTS*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *%¹* *Reference* *2021* *2020* **%**
(447) 3,428 489 -113 Income/(loss) attributable to shareholders 8,640 (17,666) +149
(988) 2,634 177 -138 CCS earnings attributable to shareholders Note 2 5,992 (15,443) +139
4,130 5,534 955 -25 Adjusted Earnings² A 12,898 4,453 +190
13,460 13,623 7,998 Adjusted EBITDA (CCS basis) A 38,656 28,159
16,025 12,617 10,403 +27 Cash flow from operating activities 36,935 27,818 +33
(3,804) (2,946) (2,833) Cash flow from investing activities (7,339) (7,871)
12,221 9,671 7,571 Free cash flow G 29,596 19,947
4,840 4,383 3,737 Cash capital expenditure C 13,197 12,324
8,359 8,470 8,095 -1 Operating expenses F 26,264 25,137 +4
8,696 8,505 7,854 +2 Underlying operating expenses F 25,924 23,958 +8
2.9% 3.2% (4.9)% ROACE (Net income basis) D 2.9% (4.9)%
6.1% 4.9% 3.9% ROACE on an Adjusted Earnings plus Non-controlling interest (NCI) basis D 6.1% 3.9%
57,492 65,735 73,463 Net debt E 57,492 73,463
25.6% 27.7% 31.4% Gearing E 25.6% 31.4%
3,068 3,254 3,081 -6 Total production available for sale (thousand boe/d) 3,269 3,392 -4
(0.06) 0.44 0.06 -114 Basic earnings per share ($) 1.11 (2.27) +149
0.53 0.71 0.12 -25 Adjusted Earnings per share ($) B 1.66 0.57 +191
0.24 0.24 0.1665 — Dividend per share ($) 0.6535 0.4865 +34
1. Q3 on Q2 change.
2. Adjusted Earnings is defined as income/(loss) attributable to shareholders plus cost of supplies adjustment (see Note 2) and excluding identified items (see Reference A).
Third quarter 2021 income attributable to Royal Dutch Shell plc shareholders was a loss of $0.4 billion, which included non-cash charges of $5.2 billion due to the fair value accounting of commodity derivatives and post-tax impairment charges of $0.3 billion, partly offset by net gains on sale of assets of $0.3 billion.
Adjusted Earnings for the quarter were $4.1 billion. Cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders for the third quarter 2021 was negative $0.5 billion. Hurricane Ida impacted our operations, with an aggregate adverse impact of around $0.4 billion on Adjusted Earnings.
Cash flow from operating activities for the third quarter 2021 was $16.0 billion, which included positive impacts of $4.0 billion from commodity derivatives partly offset by negative working capital movements of $1.4 billion. Cash flow from investing activities for the quarter was an outflow of $3.8 billion, mainly driven by capital expenditure and partly offset by proceeds from sale of property, plant and equipment and businesses.
Compared with the second quarter 2021, current quarter Adjusted Earnings reflected comparative adverse one-off tax impacts, lower production volumes partly due to the impact of Hurricane Ida, and comparative lower contributions from trading and optimisation. This was partly offset by higher oil, LNG and gas prices.
At the end of the third quarter 2021, net debt was $57.5 billion, compared with $65.7 billion at the end of the second quarter 2021, mainly driven by free cash flow generation in the quarter, partly offset by dividends and share buybacks. Gearing was 25.6% at the end of the third quarter 2021, compared with 27.7% at the end of the second quarter 2021, mainly driven by net debt reduction.
Dividends declared to Royal Dutch Shell plc shareholders for the quarter amount to $0.24 per share. During the quarter, $1.0 billion of share buybacks were completed out of a total target of $2 billion in the second half of 2021. Additional shareholder distributions of $7 billion related to the Permian sale to start in 2022, post deal completion.
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
This announcement, together with supplementary financial and operational disclosure and a separate press release for this quarter, is available at www.shell.com/investors1.
1. Not incorporated by reference.
*THIRD QUARTER 2021 PORTFOLIO DEVELOPMENTS*
*Integrated Gas*
In July 2021, we signed a memorandum of understanding with Deutsche Telekom to advance digital innovation as both companies accelerate their transitions to net-zero emissions.
In July 2021, we started production on Block 5C in the East Coast Marine Area (ECMA) in Trinidad and Tobago.
*Upstream*
In July 2021, we announced the final investment decision for Whale, a deep-water development in the US Gulf of Mexico.
In August 2021, we announced a final investment decision taken by the Libra consortium, operated by Petrobras, to contract the Mero-4 floating production, storage and offloading vessel to be deployed at the Mero field in offshore Brazil.
In August 2021, we announced a final investment decision on the Timi gas development project in Malaysia.
In September 2021, we reached an agreement for the sale of the Permian business in the USA for a base consideration of $9.5 billion in cash. The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions to start in 2022, post deal completion, with the remainder used for further strengthening of the balance sheet.
In September 2021, we completed the sale of upstream assets in Egypt’s Western Desert for a base consideration of $646 million.
*Oil Products*
In July 2021, we announced the start-up of Europe's largest polymer electrolyte membrane hydrogen electrolyser at the Energy and Chemicals Park Rheinland, Germany, producing green hydrogen.
In July 2021, we reached an agreement for the sale of the non-operated 37.5% shareholding in the Germany PCK Schwedt Refinery.
In August 2021, we marked the start of trading in shares of Raízen S.A. on the São Paulo Stock Exchange (B3), following the successful execution of an initial public offering.
In September 2021, we announced a final investment decision to build an 820,000-tonnes-a-year biofuels facility at the Energy and Chemicals Park Rotterdam, Netherlands.
In October 2021, we signed an agreement to acquire 248 company-owned fuel and convenience retail sites from the Landmark group of companies, whose convenience stores operate in Texas under the Timewise brand. The agreement also includes supply agreements with an additional 117 independently operated fuel and convenience sites. Page 2
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
PERFORMANCE BY SEGMENT
*INTEGRATED GAS*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* **%¹** *Reference* *2021* *2020* **%**
(3,247) 422 (151) -869 Segment earnings (297) (6,298) +95
(4,927) (1,187) (920) Of which: Identified items A (5,002) (9,572)
1,680 1,609 768 +4 Adjusted Earnings A 4,705 3,274 +44
3,768 3,364 2,349 Adjusted EBITDA (CCS basis) A 10,339 8,999
5,674 3,761 2,323 +51 Cash flow from operating activities 11,926 8,972 +33
7,871 4,350 2,396 +81 Cash flow from operating activities excluding working capital movements H 15,874 8,619 +84
1,272 880 1,020 Cash capital expenditure C 3,167 2,638
166 162 143 +2 Liquids production available for sale (thousand b/d) 166 152 +9
4,476 4,502 4,067 -1 Natural gas production available for sale (million scf/d) 4,532 4,343 +4
938 938 844 Total production available for sale (thousand boe/d) 947 901 +5
7.39 7.49 7.80 -1 LNG liquefaction volumes (million tonnes) 23.04 25.03 -8
15.18 15.92 17.63 -5 LNG sales volumes (million tonnes) 47.48 54.73 -13
1.Q3 on Q2 change.
Third quarter segment earnings amounted to a loss of $3,247 million and Adjusted Earnings for the quarter were $1,680 million. As part of our normal business, commodity derivative hedge contracts are entered into for mitigation of future purchases, sales and inventory. As these commodity derivatives are fair value accounted for, this creates an accounting mismatch over periods. As a result, this quarter included losses of $4,929 million due to the fair value accounting of commodity derivatives (primarily due to gas price developments) and are part of identified items (see Reference A).
Cash flow from operating activities excluding working capital movements for the quarter was $7,871 million, primarily driven by Adjusted EBITDA of $3,768 million and derivatives cash inflows of $4,280 million driven by variation margin in gas and power trading due to significant gas and electricity price increases. As these variation margin cash inflows reflect underlying hedges, this effect could reverse in future quarters.
Compared with the second quarter 2021, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for LNG, oil and gas. This was partly offset by comparative lower earnings contribution from the Renewables & Energy Solutions business due to lower margins in North America and comparative adverse one-off tax impacts.
Compared with the second quarter 2021, total oil and gas production remained at a similar level due to lower maintenance activities, offset by field decline and lower demand. LNG liquefaction volumes decreased by 1% due to feedgas constraints and cargo timing, partly offset by lower maintenance activities.
Nine months segment earnings amounted to a loss of $297 million. This included losses of $5,447 million due to the fair value accounting of commodity derivatives. These are mainly related to gas and power trading in Europe to hedge supply and purchase contracts as well as inventory and to physical future global LNG sales that are partially hedged through paper derivative positions. There were also post-tax impairment charges of $588 million, partly offset by gains on sale of assets of $1,094 million. These gains and losses are part of identified items (see Reference A). Adjusted Earnings for the nine months were $4,705 million.
Cash flow from operating activities excluding working capital movements for the first nine months of 2021 was $15,874 million, primarily driven by Adjusted EBITDA of $10,339 million and cash inflows of $6,768 million from commodity derivatives.
Compared with the first nine months 2020, Integrated Gas Adjusted Earnings primarily reflected higher realised prices for oil, gas and LNG as well as one-off favourable tax impacts. This was partly offset by lower contributions from trading and optimisation.
Compared with the *first nine months 2020*, total oil and gas production increased by 5% mainly due to the restart of production at the Prelude floating LNG operations in Australia, production sharing contract effects and increased demand, partly offset by field decline. LNG liquefaction volumes decreased by 8% due to feedgas constraints and higher maintenance activities, partly offset by the restart of production at the Prelude floating LNG operations in Australia. Page 3
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*UPSTREAM*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* **%¹** *Reference* *2021* *2020* **%**
1,274 2,415 (1,110) -47 Segment earnings 4,786 (8,694) +155
(412) (53) (226) Of which: Identified items A (332) (6,590)
1,686 2,469 (884) -32 Adjusted Earnings A 5,118 (2,104) +343
6,766 6,714 2,911 Adjusted EBITDA (CCS basis) A 18,866 9,421
5,777 5,056 2,101 +14 Cash flow from operating activities 14,940 8,026 +86
5,889 5,444 2,629 +8 Cash flow from operating activities excluding working capital movements H 16,035 6,894 +133
1,502 1,696 1,245 Cash capital expenditure C 4,732 5,642
1,497 1,558 1,520 -4 Liquids production available for sale (thousand b/d) 1,544 1,619 -5
3,387 4,082 3,960 -17 Natural gas production available for sale (million scf/d) 4,192 4,768 -12
2,081 2,262 2,203 -8 Total production available for sale (thousand boe/d) 2,267 2,441 -7
1. Q3 on Q2 change.
Third quarter segment earnings were $1,274 million. This included a net charge of $192 million related to the impact of the weakening Brazilian real on a deferred tax position, losses of $181 million due to the fair value accounting of commodity derivatives and post-tax impairment charges of $116 million, partly offset by a gain of $51 million related to remeasurement of redundancy and restructuring costs. These net losses are part of identified items (see Reference A). Adjusted Earnings were $1,686 million.
Cash flow from operating activities for the quarter was $5,777 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, partly offset by negative working capital movements.
Compared with the second quarter 2021, Upstream Adjusted Earnings reflected the comparative adverse impact of a one-off release of a tax provision in Nigeria in the second quarter, higher well write-offs and lower volumes. These were partly offset by higher realised oil and gas prices.
Compared with the second quarter 2021, total production decreased by 8%, mainly due to the effects of Hurricane Ida and unfavourable seasonal effects.
*Nine months* segment earnings were $4,786 million. This included losses of $378 million due to the fair value accounting of commodity derivatives, a net charge of $99 million related to the impact of the weakening Brazilian real on a deferred tax position, and post-tax impairment charges of $72 million, partly offset by a net gain of $240 million related to the sale of assets. These net gains are part of identified items (see Reference A). Adjusted Earnings were $5,118 million.
Cash flow from operating activities for the first nine months of 2021 was $14,940 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, partly offset by negative working capital movements.
Compared with the *first nine months 2020*, Upstream Adjusted Earnings reflected higher realised oil and gas prices, the one-off release of a tax provision in Nigeria and lower depreciation.
Compared with the *first nine months 2020*, total production decreased by 7%, mainly due to the impact of divestments and higher maintenance activities. Page 4
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*OIL PRODUCTS*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* **%¹** *Reference* *2021* *2020* **%**
1,362 33 2,092 +4065 Segment earnings² 2,044 1,281 +60
150 (1,267) 411 Of which: Identified items A (1,344) (4,174)
1,212 1,299 1,680 -7 Adjusted Earnings² A 3,389 5,454 -38 Of which:
(3) 112 55 -102 Refining & Trading³ 5 1,713 -100
1,215 1,187 1,626 +2 Marketing³ 3,384 3,742 -10
2,360 2,608 2,520 Adjusted EBITDA (CCS basis) A 7,080 9,134 Of which:
415 676 228 Refining & Trading³ 1,558 3,425
1,945 1,932 2,293 Marketing³ 5,522 5,710
3,757 2,213 5,131 +70 Cash flow from operating activities 6,863 9,647 -29
3,262 3,365 3,476 -3 Cash flow from operating activities excluding working capital movements H 9,939 6,259 +59
976 882 832 Cash capital expenditure C 2,527 2,019
1,629 1,833 1,972 -11 Refinery processing intake (thousand b/d) 1,737 2,104 -17
4,665 4,552 4,740 +3 Oil Products sales volumes (thousand b/d) 4,462 4,686 -5
1. Q3 on Q2 change.
2. Earnings are presented on a CCS basis (see Note 2).
3. With effect from Q1 2021, changes are made in the cost and activity allocation between Marketing and Refining & Trading. This resulted in a net Q3 2021 charge of $120 million (nine months 2021: $339 million) to Refining & Trading, with an offsetting amount in Marketing. This change does not impact consolidated Oil Products Adjusted Earnings.
Third quarter segment earnings were $1,362 million. This included a gain of $301 million related to the dilution of interest in the Raizen joint venture, partly offset by post-tax impairment charges of $138 million. These net gains are part of identified items (see Reference A). Adjusted Earnings were $1,212 million.
Cash flow from operating activities for the third quarter 2021 was $3,757 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, as well as positive working capital movements due to lower volumes held in inventory.
Compared with the second quarter 2021, Oil Products Adjusted Earnings reflected lower contributions from trading and optimisation, partly offset by favourable deferred tax movements.
Oil Products sales volumes increased due to favourable seasonal effects and continued demand recovery.
•Refining & Trading Adjusted Earnings reflected lower refinery processing intake and utilisation due to planned maintenance and the impact of Hurricane Ida, as well as lower contributions from trading and optimisation.
•Marketing Adjusted Earnings reflected higher sales volumes.
Refinery utilisation was 71% compared with 76% in the second quarter 2021, due to higher planned maintenance and the impact of Hurricane Ida.
Nine months segment earnings were $2,044 million. This included post-tax impairment charges of $1,268 million, losses of $158 million due to the fair value accounting of commodity derivatives, and redundancy and restructuring costs of $134 million, partly offset by a gain of $301 million related to the dilution of interest in the Raizen joint venture. These net losses are part of identified items (see Reference A). Adjusted Earnings were $3,389 million.
Cash flow from operating activities for the first nine months of 2021 was $6,863 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, partly offset by negative working capital movements and cash outflows for commodity derivatives. Page 5
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
Compared with the first nine months 2020, Oil Products Adjusted Earnings reflected lower contributions from trading and optimisation and higher operating expenses. These were partly offset by higher marketing volumes and Oil Sands margins.
Oil Products sales volumes decreased due to lower trading volumes compared with the first nine months of 2020.
•Refining & Trading Adjusted Earnings reflected lower contributions from trading and optimisation and higher operating expenses. These were partly offset by higher Oil Sands margins and lower depreciation.
•Marketing Adjusted Earnings reflected higher operating expenses and favourable tax impacts in the first nine months of 2020, offset by higher sales volumes.
Refinery utilisation was 73% compared with 72% in the first nine months of 2020. Page 6
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*CHEMICALS*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* **%¹** *Reference* *2021* *2020* **%**
357 462 131 -23 Segment earnings² 1,509 441 +242
(38) (208) (96) Of which: Identified items A (286) (140)
395 670 227 -41 Adjusted Earnings² A 1,795 581 +209
715 1,036 466 Adjusted EBITDA (CCS basis) A 2,792 1,439
840 1,133 335 -26 Cash flow from operating activities 2,297 891 +158
684 1,225 488 -44 Cash flow from operating activities excluding working capital movements H 2,953 981 +201
1,053 895 595 Cash capital expenditure C 2,678 1,810
3,549 3,609 3,823 -2 Chemicals sales volumes (thousand tonnes) 10,741 11,318 -5
1. Q3 on Q2 change.
2. Earnings are presented on a CCS basis (see Note 2).
Third quarter segment earnings were $357 million. This included post-tax impairment charges, and a legal provision. These net losses are part of identified items (see Reference A). Adjusted earnings were $395 million.
Cash flow from operating activities for the quarter was $840 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation, as well as positive working capital movements, partly offset by the timing impact of dividends from Joint Ventures and Associates.
Compared with the second quarter 2021, Chemicals Adjusted Earnings reflected the operational impact of Hurricane Ida, lower intermediate and base chemicals margins, as well as lower income from Joint Ventures and Associates.
Chemicals manufacturing plant utilisation was 78% compared with 82% in the second quarter 2021, due to the impact of Hurricane Ida and higher planned maintenance.
Nine months segment earnings were $1,509 million. This included post-tax impairment charges of $227 million, and legal provisions of $37 million. These net losses are part of identified items (see Reference A). Adjusted earnings were $1,795 million.
Cash flow from operating activities for the first nine months was $2,297 million, primarily driven by Adjusted Earnings before non-cash expenses including depreciation and cost-of-sales adjustments, partly offset by negative working capital movements.
Compared with the first nine months 2020, Chemicals Adjusted Earnings reflected higher realised margins in base chemicals and intermediates from a stronger price environment.
Chemicals manufacturing plant utilisation was 79% compared with 81% for the first nine months 2020 due to the impact of Hurricane Ida. Page 7
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*CORPORATE*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *Reference* *2021* *2020*
(623) (592) (739) Segment earnings (1,747) (1,998)
109 (193) 52 Of which: Identified items A 50 578
(732) (399) (792) Adjusted Earnings A (1,797) (2,576)
(147) (101) (247) Adjusted EBITDA (CCS basis) A (421) (834)
(22) 454 514 Cash flow from operating activities 909 282
(233) (208) (33) Cash flow from operating activities excluding working capital movements H (471) 118
Third quarter segment earnings were an expense of $623 million. This included a gain of $108 million from the deferred tax impact of the weakening Brazilian real on financing positions, which is part of identified items (see Reference A). Adjusted Earnings were a net expense of $732 million.
Compared with the second quarter 2021, Adjusted Earnings reflected unfavourable movements in tax credits and currency exchange rate effects, partly offset by lower operating and net interest expenses.
Nine months segment earnings were an expense of $1,747 million. This included a gain of $50 million from the deferred tax impact of the weakening Brazilian real on financing positions, which is part of identified items (see Reference A). Adjusted Earnings were a net expense of $1,797 million.
Compared with the first nine months 2020, Adjusted Earnings reflected lower net interest expense and favourable currency exchange rate effects.
*OUTLOOK FOR THE FOURTH QUARTER 2021 *
Cash capital expenditure was $13.2 billion for the first nine months 2021 and is expected to be around $20 billion for the full year 2021.
Integrated Gas production is expected to be approximately 940 - 980 thousand boe/d and LNG liquefaction volumes are expected to benefit from lower maintenance activities and be approximately 8.0 - 8.6 million tonnes.
Upstream production is expected to be approximately 2,100 - 2,350 thousand boe/d.
Refinery utilisation is expected to be approximately 68% - 76%.
Oil Products sales volumes are expected to be approximately 4,200 - 5,200 thousand b/d.
Chemicals manufacturing plant utilisation is expected to be approximately 73% - 81%.
Chemicals sales volumes are expected to be approximately 3,500 - 3,900 thousand tonnes.
Corporate Adjusted Earnings are expected to be a net expense of approximately $650 - $750 million in the fourth quarter 2021 and a net expense of approximately $2,450 - $2,550 million for the full year 2021. This excludes the impact of currency exchange rate effects. Page 8
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
FORTHCOMING EVENTS
Fourth quarter 2021 and full year results and dividends are scheduled to be announced on February 3, 2022. First quarter 2022 results and dividends are scheduled to be announced on May 5, 2022. Second quarter 2022 and half year results and dividends are scheduled to be announced on July 28, 2022. Third quarter 2022 results and dividends are scheduled to be announced on October 27, 2022.
Page 9
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS*
*CONSOLIDATED STATEMENT OF INCOME*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
60,044 60,515 44,021 Revenue¹ 176,224 136,554
1,014 1,114 461 Share of profit of joint ventures and associates 3,122 1,154
497 134 234 Interest and other income² 3,087 458
61,555 61,764 44,717 Total revenue and other income 182,434 138,167
44,260 39,717 27,276 Purchases 118,346 88,582
5,322 5,162 5,496 Production and manufacturing expenses 17,292 17,299
2,892 3,107 2,366 Selling, distribution and administrative expenses 8,461 7,130
145 201 233 Research and development 511 708
526 332 222 Exploration 1,143 1,239
6,358 8,223 7,689 Depreciation, depletion and amortisation² 20,477 42,871
859 893 992 Interest expense 2,643 3,181
60,362 57,634 44,275 Total expenditure 168,874 161,009
1,193 4,130 442 Income/(loss) before taxation 13,560 (22,842)
1,510 571 (104) Taxation charge/(credit) 4,535 (5,265)
(317) 3,559 546 Income/(loss) for the period¹ 9,025 (17,578)
130 131 57 Income/(loss) attributable to non-controlling interest 385 88
(447) 3,428 489 Income/(loss) attributable to Royal Dutch Shell plc shareholders 8,640 (17,666)
(0.06) 0.44 0.06 Basic earnings per share ($)^³ 1.11 (2.27)
(0.06) 0.44 0.06 Diluted earnings per share ($)^³ 1.10 (2.27)
1. See Note 2 “Segment information”.
2. See Note 7 “Other notes to the unaudited Condensed Consolidated Interim Financial Statements”.
3. See Note 3 “Earnings per share”.
*CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
(317) 3,559 546 Income/(loss) for the period 9,025 (17,578) Other comprehensive income/(loss) net of tax: Items that may be reclassified to income in later periods:
(943) 575 1,246 – Currency translation differences (1,219) (1,101)
(1) (2) 5 – Debt instruments remeasurements (17) 20
102 (84) 75 – Cash flow hedging gains/(losses) 150 (214)
89 (51) (153) – Net investment hedging gains/(losses) 209 (253)
16 (20) (59) – Deferred cost of hedging (38) 97
(104) (7) (51) – Share of other comprehensive income/(loss) of joint ventures and associates (167) (80)
(841) 410 1,063 Total (1,083) (1,530) Items that are not reclassified to income in later periods:
291 1,675 (580) – Retirement benefits remeasurements 6,594 (3,747)
(25) 10 36 – Equity instruments remeasurements 25 (24)
41 (42) 45 – Share of other comprehensive income/(loss) of joint ventures and associates (26) 112
307 1,643 (499) Total 6,592 (3,659)
(534) 2,053 564 Other comprehensive income/(loss) for the period 5,510 (5,189)
(851) 5,612 1,111 Comprehensive income/(loss) for the period 14,535 (22,767)
85 145 82 Comprehensive income/(loss) attributable to non-controlling interest 351 2
(937) 5,467 1,029 Comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders 14,184 (22,768) Page 10
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*CONDENSED CONSOLIDATED BALANCE SHEET*
*$ million* *September 30, 2021* *December 31, 2020 **4*
*Assets*
*Non-current assets*
Intangible assets 22,344 22,710
Property, plant and equipment 196,261 209,700
Joint ventures and associates 23,724 22,451
Investments in securities 3,662 3,222
Deferred tax 14,542 16,311
Retirement benefits^1 8,009 2,474
Trade and other receivables 7,605 7,641
Derivative financial instruments² 1,052 2,805 277,199 287,315
*Current assets*
Inventories 24,596 19,457
Trade and other receivables 46,366 33,625
Derivative financial instruments² 14,613 5,783
Cash and cash equivalents 38,073 31,830 123,648 90,695
Assets classified as held for sale^1 7,922 *1,258* 131,570 91,953
*Total assets* *408,769 * *379,268 *
*Liabilities*
*Non-current liabilities*
Debt 84,705 91,115
Trade and other payables 2,224 2,304
Derivative financial instruments² 571 420
Deferred tax 12,159 10,463
Retirement benefits^1,3 11,835 15,605
Decommissioning and other provisions 26,361 27,116 137,856 147,023
*Current liabilities*
Debt 10,686 16,899
Trade and other payables³ 59,722 44,572
Derivative financial instruments² 26,118 5,308
Income taxes payable³ 2,809 3,111
Decommissioning and other provisions 3,139 3,622 102,473 73,512
Liabilities directly associated with assets classified as held for sale^1 1,758 196 104,230 73,708
*Total liabilities* *242,086 * *220,731 *
Equity attributable to Royal Dutch Shell plc shareholders 163,390 155,310
Non-controlling interest 3,293 3,227
*Total equity* *166,683 * *158,537 *
*Total liabilities and equity* *408,769 * *379,268 *
1. See Note 7 "Other notes to the unaudited Condensed Consolidated Interim Financial Statements".
2. See Note 6 “Derivative financial instruments and debt excluding lease liabilities”.
3. As from January 1, 2021 the 'Retirement benefits' liability has been classified under non-current liabilities (previously partly presented within current liabilities) and taxes payable not related to income tax are presented within 'Trade and other payables' (previously 'Taxes payable'). Prior period comparatives have been revised to conform with current year presentation. See Note 7. Page 11
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
4. For Q3 2021, assets held for sale are presented separately. Prior period comparatives have been revised to conform with current year presentation.
*CONSOLIDATED STATEMENT OF CHANGES IN EQUITY* *Equity attributable to Royal Dutch Shell plc shareholders*
*$ million* *Share capital¹* *Shares held in trust* *Other reserves²* *Retained earnings* *Total* *Non-controlling interest* *Total equity*
*At January 1, 2021* *651 * *(709)* *12,752 * *142,616 * *155,310 * *3,227 * *158,537 *
Comprehensive income/(loss) for the period — — 5,544 8,640 14,184 351 14,535
Transfer from other comprehensive income — — (14) 14 — — —
Dividends³ — — — (4,475) (4,475) (305) (4,780)
Repurchases of shares^4 (4) — 4 (2,003) (2,003) — (2,003)
Share-based compensation — 350 (68) 93 375 — 375
Other changes in non-controlling interest — — — (1) (1) 20 19
*At September 30, 2021* *647 * *(359)* *18,218 * *144,884 * *163,390 * *3,293 * *166,683 *
*At January 1, 2020* *657 * *(1,063)* *14,451 * *172,431 * *186,476 * *3,987 * *190,463 *
Comprehensive income/(loss) for the period — — (5,102) (17,666) (22,768) 2 (22,767)
Transfer from other comprehensive income — — 185 (185) — — —
Dividends^3 — — — (5,956) (5,956) (242) (6,198)
Repurchases of shares (6) — 6 (1,214) (1,214) — (1,214)
Share-based compensation — 539 (237) (230) 73 — 73
Other changes in non-controlling interest — — — 557 557 (573) (16)
*At September 30, 2020* *651 * *(523)* *9,303 * *147,737 * *157,168 * *3,173 * *160,341 *
1. See Note 4 “Share capital”.
2. See Note 5 “Other reserves”.
3. The amount charged to retained earnings is based on prevailing exchange rates on payment date.
4. Includes shares committed to repurchase and repurchases subject to settlement at the end of the quarter. Page 12
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*CONSOLIDATED STATEMENT OF CASH FLOWS*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
1,193 4,130 442 Income before taxation for the period 13,560 (22,842) Adjustment for:
723 797 814 – Interest expense (net) 2,277 2,600
6,358 8,223 7,689 – Depreciation, depletion and amortisation 20,477 42,871
323 108 14 – Exploration well write-offs 567 615
(298) 55 (103) – Net (gains)/losses on sale and revaluation of non-current assets and businesses (2,316) (124)
(1,014) (1,114) (461) – Share of (profit)/loss of joint ventures and associates (3,122) (1,154)
956 782 468 – Dividends received from joint ventures and associates 2,318 1,609
(538) (2,495) 405 – (Increase)/decrease in inventories (6,459) 6,286
(2,859) (4,080) (540) – (Increase)/decrease in current receivables (13,768) 9,733
1,950 5,016 1,583 – Increase/(decrease) in current payables 12,831 (11,073)
10,116 2,173 233 – Derivative financial instruments 12,474 899
(113) 47 152 – Retirement benefits 43 355
(206) (124) 43 – Decommissioning and other provisions (252) 333
894 561 265 – Other 2,038 363
(1,459) (1,465) (601) Tax paid (3,733) (2,653)
*16,025 * **12,617*** * **10,403*** * *Cash flow from operating activities* **36,935*** * **27,818*** *
(4,648) (4,232) (3,679) Capital expenditure (12,764) (11,379)
(151) (115) (34) Investments in joint ventures and associates (335) (754)
(41) (36) (23) Investments in equity securities (98) (190)
1,122 1,162 571 Proceeds from sale of property, plant and equipment and businesses 5,390 2,395
168 4 159 Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans^1 447 1,129
6 108 139 Proceeds from sale of equity securities 145 274
93 110 112 Interest received 302 422
929 799 588 Other investing cash inflows 2,440 2,617
(1,283) (746) (665) Other investing cash outflows (2,866) (2,384)
*(3,804)* *(2,946)* **(2,833)** *Cash flow from investing activities* **(7,339)** **(7,871)**
(33) (34) (176) Net increase/(decrease) in debt with maturity period within three months 46 236 Other debt:
23 57 4,745 – New borrowings 189 20,986
(4,077) (3,901) (2,688) – Repayments (13,684) (12,523)
(788) (1,162) (831) Interest paid (2,756) (2,952)
(268) (57) 419 Derivative financial instruments (774) 662
4 — — Change in non-controlling interest 19 (40) Cash dividends paid to:
(1,812) (1,310) (1,236) – Royal Dutch Shell plc shareholders^2 (4,414) (6,117)
(40) (140) (65) – Non-controlling interest (305) (242)
(971) — — Repurchases of shares (1,187) (1,702)
34 (2) 1 Shares held in trust: net sales/(purchases) and dividends received (32) (198)
*(7,930)* **(6,550)** **169*** * *Cash flow from financing activities* **(22,900)** **(1,892)**
(322) (2) 36 Effects of exchange rate changes on cash and cash equivalents (453) (395)
*3,969 * **3,119*** * **7,775*** * *Increase/(decrease) in cash and cash equivalents* **6,244*** * **17,659*** *
*34,104 * **30,985*** * **27,939*** * *Cash and cash equivalents at beginning of period* **31,830*** * **18,055*** *
*38,073 * **34,104*** * **35,714*** * *Cash and cash equivalents at end of period* **38,073*** * **35,714*** *
1. As from 2021 renamed from 'Proceeds from sale of joint ventures and associates'.
2. Cash dividends paid represents the payment of net dividends (after deduction of withholding taxes where applicable) and payment of withholding taxes on dividends paid in the previous quarter. Page 13
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS*
1. *Basis of preparation*
These unaudited Condensed Consolidated Interim Financial Statements ("Interim Statements") of Royal Dutch Shell plc (“the Company”) and its subsidiaries (collectively referred to as “Shell”) have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board ("IASB") and as adopted by the UK. For periods beginning on or after January 1, 2021, Shell's (interim) financial statements are prepared in accordance with UK-adopted international accounting standards which were established as a result of the UK's exit from the European Union. As applied to Shell there are no material differences from International Financial Reporting Standards as issued by the IASB. Except for the application of UK-adopted international accounting standards these Interim Statements have been prepared on the basis of the same accounting principles as those used in the Annual Report and Accounts (pages 216 to 264) and Form 20-F (pages 164 to 211) for the year ended December 31, 2020 as filed with the Registrar of Companies for England and Wales and the US Securities and Exchange Commission, respectively, and should be read in conjunction with these filings.
The financial information presented in the unaudited Interim Statements does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 (“the Act”). Statutory accounts for the year ended December 31, 2020 were published in Shell’s Annual Report and Accounts, a copy of which was delivered to the Registrar of Companies for England and Wales, and in Shell's Form 20-F. The auditor’s report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or 498(3) of the Act.
Key accounting considerations, significant judgements and estimates
Future commodity price assumptions and management's view on the future development of refining margins represent a significant estimate and both were subject to change in 2020, resulting in the recognition of impairments in 2020. These assumptions continue to apply for impairment testing purposes in the third quarter 2021.
2. *Segment information *
Segment earnings are presented on a current cost of supplies basis (CCS earnings), which is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance. On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts. Sales between segments are based on prices generally equivalent to commercially available prices. Page 14
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*INFORMATION BY SEGMENT*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020* *Third-party revenue*
6,994 9,247 7,684 Integrated Gas 27,499 25,277
2,368 2,242 1,670 Upstream 6,551 5,191
46,281 44,570 31,823 Oil Products 129,233 97,716
4,390 4,444 2,831 Chemicals 12,904 8,335
11 12 13 Corporate 36 35
*60,044 * *60,515 * *44,021 * *Total third-party revenue¹* *176,224 * *136,554 * *Inter-segment revenue*
1,887 1,794 864 Integrated Gas 5,032 2,313
9,191 8,924 5,111 Upstream 25,370 15,704
3,094 3,017 1,547 Oil Products 8,567 4,480
1,663 1,633 715 Chemicals 4,483 2,065
— — — Corporate — — *CCS earnings*
(3,247) 422 (151) Integrated Gas (297) (6,298)
1,274 2,415 (1,110) Upstream 4,786 (8,694)
1,362 33 2,092 Oil Products 2,044 1,281
357 462 131 Chemicals 1,509 441
(623) (592) (739) Corporate (1,747) (1,998)
*(876)* *2,741 * *222 * *Total CCS earnings* *6,295 * *(15,268)*
1. Includes revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. Third quarter 2021 included losses of $5,032 million mainly driven by Integrated Gas, refer to “Performance by Segment” (Q2 2021: $340 million losses; Q3 2020: $1,803 million income). This amount includes both the reversal of prior losses of $1,205 million (Q2 2021: $374 million losses; Q3 2020: $15 million losses) related to sales contracts and prior gains of $1,517 million (Q2 2021: $434 million gains; Q3 2020: $22 million gains) related to purchase contracts that were previously recognised and where physical settlement took place in the third quarter 2021.
*RECONCILIATION OF INCOME FOR THE PERIOD TO CCS EARNINGS*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
(447) 3,428 489 Income/(loss) attributable to Royal Dutch Shell plc shareholders 8,640 (17,666)
130 131 57 Income/(loss) attributable to non-controlling interest 385 88
*(317)* *3,559 * *546 * *Income/(loss) for the period* *9,025 * *(17,578)* Current cost of supplies adjustment:
(666) (994) (395) Purchases (3,291) 2,947
142 208 100 Taxation 703 (719)
(35) (33) (29) Share of profit/(loss) of joint ventures and associates (143) 82
*(559)* *(818)* *(324)* *Current cost of supplies adjustment* *(2,730)* *2,310 * of which:
(541) (793) (312) Attributable to Royal Dutch Shell plc shareholders (2,648) 2,222
(18) (25) (12) Attributable to non-controlling interest (82) 88
*(876)* *2,741 * *222 * *CCS earnings* *6,295 * *(15,268)* of which:
(988) 2,634 177 CCS earnings attributable to Royal Dutch Shell plc shareholders 5,992 (15,443)
112 106 45 CCS earnings attributable to non-controlling interest 303 176
Page 15
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
3. *Earnings per share*
*EARNINGS PER SHARE*
*Quarters* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
(447) 3,428 489 Income/(loss) attributable to Royal Dutch Shell plc shareholders ($ million) 8,640 (17,666) Weighted average number of shares used as the basis for determining:
7,773.3 7,790.1 7,788.7 Basic earnings per share (million) 7,781.8 7,799.4
7,773.3 7,835.9 7,823.6 Diluted earnings per share (million) 7,827.9 7,799.4
4. *Share capital*
*ISSUED AND FULLY PAID ORDINARY SHARES OF €0.07 EACH**1* *Number of shares* *Nominal value ($ million)* *A* *B* *A* *B* *Total*
*At January 1, 2021* *4,101,239,499 * *3,706,183,836 * *345* *306* *651*
Repurchases of shares — *(48,493,633)* — (4) (4)
*At September 30, 2021* *4,101,239,499 * *3,657,690,203 * *345* *302* *647*
*At January 1, 2020* *4,151,787,517 * *3,729,407,107 * *349* *308* *657*
Repurchases of shares (50,548,018) (23,223,271) (4) (2) (6)
*At September 30, 2020* *4,101,239,499 * *3,706,183,836 * *345* *306* *651*
1. Share capital at September 30, 2021 also included 50,000 issued and fully paid sterling deferred shares of £1 each.
At Royal Dutch Shell plc’s Annual General Meeting on May 18, 2021, the Board was authorised to allot ordinary shares in Royal Dutch Shell plc, and to grant rights to subscribe for, or to convert, any security into ordinary shares in Royal Dutch Shell plc, up to an aggregate nominal amount of €182.1 million (representing 2,602 million ordinary shares of €0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the earlier of the close of business on August 18, 2022, and the end of the Annual General Meeting to be held in 2022, unless previously renewed, revoked or varied by Royal Dutch Shell plc in a general meeting.
5. *Other reserves*
*OTHER RESERVES*
*$ million* *Merger reserve* *Share premium reserve* *Capital redemption reserve* *Share plan reserve* *Accumulated other comprehensive income* *Total*
*At January 1, 2021* *37,298 * *154 * *129 * *906 * *(25,735)* *12,752 *
Other comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders — — — — 5,544 5,544
Transfer from other comprehensive income — — — — (14) (14)
Repurchases of shares — — 4 — — 4
Share-based compensation — — — (68) — (68)
*At September 30, 2021* *37,298 * *154 * *133 * *838 * *(20,206)* *18,218 *
*At January 1, 2020* *37,298 * *154 * *123 * *1,049 * *(24,173)* *14,451 *
Other comprehensive income/(loss) attributable to Royal Dutch Shell plc shareholders — — — — (5,102) (5,102)
Transfer from other comprehensive income — — — — 185 185
Repurchases of shares — — 6 — — 6
Share-based compensation — — — (237) — (237)
*At September 30, 2020* *37,298 * *154 * *129 * *812 * *(29,091)* *9,303 * Page 16
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
The merger reserve and share premium reserve were established as a consequence of Royal Dutch Shell plc becoming the single parent company of Royal Dutch Petroleum Company and The “Shell” Transport and Trading Company, p.l.c., now The Shell Transport and Trading Company Limited, in 2005. The merger reserve increased in 2016 following the issuance of shares for the acquisition of BG Group plc. The capital redemption reserve was established in connection with repurchases of shares of Royal Dutch Shell plc. The share plan reserve is in respect of equity-settled share-based compensation plans.
6. *Derivative financial instruments and debt excluding lease liabilities*
As disclosed in the Consolidated Financial Statements for the year ended December 31, 2020, presented in the Annual Report and Accounts and Form 20-F for that year, Shell is exposed to the risks of changes in fair value of its financial assets and liabilities. The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values at September 30, 2021, are consistent with those used in the year ended December 31, 2020, though the carrying amounts of derivative financial instruments measured using predominantly unobservable inputs have changed since that date.
The table below provides the comparison of the fair value with the carrying amount of debt excluding lease liabilities, disclosed in accordance with IFRS 7 Financial Instruments: Disclosures.
*DEBT EXCLUDING LEASE LIABILITIES*
*$ million* *September 30, 2021* *December 31, 2020*
Carrying amount 67,422 79,594
Fair value¹ 74,397 88,294
1. Mainly determined from the prices quoted for these securities.
7. Other notes to the unaudited Condensed Consolidated Interim Financial Statements
Consolidated Statement of Income
Interest and other income
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
497 134 234 **Interest and other income** 3,087 458 of which:
136 95 154 Interest income 366 511
9 34 3 Dividend income (from investments in equity securities) 44 19
298 (55) 103 Net gains on sales and revaluation of non-current assets and businesses 2,316 124
(42) 4 (150) Net foreign exchange gains/(losses) on financing activities 48 (355)
96 56 123 Other 313 159
Depreciation, depletion and amortisation
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
6,358 8,223 7,689 Depreciation, depletion and amortisation 20,477 42,871
Depreciation, depletion and amortisation in Q3 2021 includes $352 million pre-tax (Q2 2021: $2,333 million; Q3 2020: $1,615 million; nine months 2021: $2,770 million; nine months 2020: $24,145) of impairments.
Condensed Consolidated Balance Sheet
Assets classified as held for sale Page 17
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*$ million* *September 30, 2021* *December 31, 2020*
*Assets classified as held for sale* 7,922 1,258
Liabilities directly associated with assets classified as held for sale 1,758 196
Assets classified as held for sale and associated liabilities at September 30, 2021 mainly relate to the Permian business in the USA and two refineries. The major classes of assets and liabilities classified as held for sale are Property, plant and equipment ($6,192 million; December 31, 2020: $1,146 million), Inventories ($787 million; December 31, 2020: zero), Decommissioning and other provisions ($692 million; December 31, 2020: $196 million) and Debt ($531 million; December 31, 2020: zero).
Retirement benefits
*$ million* *September 30, 2021* *December 31, 2020*
*Non-current assets*
*Retirement benefits* 8,009 2,474
**Non-current liabilities**
*Retirement benefits¹* 11,835 15,605
*Deficit* *3,826 * *13,131 *
1.As from January 1, 2021 the 'Retirement benefits' liability has been classified under non-current liabilities (previously partly presented within current liabilities). Prior period comparatives have been revised by $437 million to conform with current year presentation.
The decrease in the net retirement benefit liability is mainly driven by an increase of the market yield on high-quality corporate bonds in the USA, the UK and Eurozone and positive returns on plan assets, partly offset by an increase in expected inflation in the UK and Eurozone. Amounts recognised in the balance sheet in relation to defined benefit plans include both plan assets and obligations that are presented on a net basis on a plan-by-plan basis.
Income taxes payable
*$ million* *September 30, 2021* *December 31, 2020*
Income taxes payable 2,809 3,111
As from January 1, 2021 taxes payable not related to income tax are presented within 'Trade and other payables' (previously within 'Taxes payable') and 'Taxes payable' has been renamed into 'Income taxes payable'. Prior period comparatives have been revised by $2,895 million to conform with current year presentation. Page 18
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES*
A.*Adjusted Earnings and Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) *
The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest.
The “Adjusted EBITDA (CCS basis)” and “Adjusted EBITDA (FIFO basis)” measures are introduced with effect from January 1, 2021. Management uses both measures to evaluate Shell’s performance in the period and over time.
We define "Adjusted EBITDA (CCS basis)" as "Income/(loss) for the period" adjusted for current cost of supplies; identified items; tax charge/(credit); depreciation, amortisation and depletion; exploration well write-offs and net interest expense. All items include the non-controlling interest component.
We define “Adjusted EBITDA (FIFO basis)” as “Income/(loss) for the period adjusted for identified items; tax charge/(credit); depreciation, amortisation and depletion; exploration well write-offs and net interest expense. All items include the non-controlling interest component.
*ADJUSTED EARNINGS*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
**(447)** **3,428*** * **489*** * **Income/(loss) attributable to Royal Dutch Shell plc shareholders** **8,640*** * **(17,666)**
(541) (793) (312) Add: Current cost of supplies adjustment attributable to Royal Dutch Shell plc shareholders (Note 2) (2,648) 2,222
(5,118) (2,899) (778) Less: Identified items attributable to Royal Dutch Shell plc shareholders (6,906) (19,897)
*4,130 * *5,534 * *955 * *Adjusted Earnings* *12,898 * *4,453 * *Of which:*
1,680 1,609 768 *Integrated Gas* 4,705 3,274
1,686 2,469 (884) *Upstream* 5,118 (2,104)
1,212 1,299 1,680 *Oil Products* 3,389 5,454
(3) 112 55 *Refining and Trading* 5 1,713
1,215 1,187 1,626 *Marketing* 3,384 3,742
395 670 227 *Chemicals* 1,795 581
(732) (399) (792) *Corporate* (1,797) (2,576)
(112) (115) (45) *Less: Non-controlling interest* (312) (176)
Page 19
*ROYAL DUTCH SHELL PLC*
3RD QUARTER 2021 UNAUDITED RESULTS
*ADJUSTED EBITDA*
*Quarters* *$ million* *Nine months*
*Q3 2021* *Q2 2021* *Q3 2020* *2021* *2020*
*4,130 * *5,534 * *955 * *Adjusted Earnings* *12,898 * *4,453 *
112 115 45 Add: Non-controlling interest 312 176
2,168 1,178 72 Add: Taxation charge/(credit) excluding tax impact of identified items 4,896 1,520
6,005 5,890 6,074 Add: Depreciation, depletion and amortisation excluding impairments 17,707 18,726
323 108 14 Add: Exploration well write-offs 567 615
859 893 992 Add: Interest expense excluding identified items 2,643 3,180
136 95 154 Less: Interest income 366 511
*13,460 * *13,623 * *7,998 * *Adjusted EBITDA (CCS basis)*^*1* *38,656 * *28,159 * Of which:
3,768 3,364 2,349 Integrated Gas 10,339 8,999
6,766 6,714 2,911 Upstream 18,866 9,421
2,360 2,608 2,520 Oil Products 7,080 9,134
415 676 228 Refining and Trading 1,558 3,425
1,945 1,932 2,293 Marketing 5,522 5,710
715 1,036 466 Chemicals 2,792 1,439
(147) (101) (247) Corporate (421) (834)
(559) (818) (324) Less: Current cost of supplies adjustment (Note 2) (2,730) 2,310
142 208 100 Add: Current cost of supplies adjustment to taxation charge/(credit) (Note 2) 703 (719)
*14,160 * *14,647 * *8,423 * *Adjusted EBITDA (FIFO basis)**1* *42,090 * *25,130 * Of which:
3,768 3,364 2,349 Integrated Gas 10,339 8,999
6,766 6,714 2,911 Upstream 18,866 9,421
2,965 3,553 2,863 Oil Products 10,104 6,478
892 1,370 578 Refining and Trading 3,977 1,017
2,073 2,182 2,286 Marketing 6,126 5,463
810 1,117 548 Chemicals 3,201 1,066
(147) (101) (247) Corporate (421) (834)
1.With effect from Q3 2021, Adjusted EBITDA include