SHELL PLC
Q4 2020 Q3 2020 Q4 2019 2020 2019
Depreciation,
depletion and
9,573 7,689 9,238 amortisation 52,444 28,701
---------- --------- --------- ----------------- ---------- --------
Impairment losses of $3,344 million, of which $3,318 million recognised
in depreciation, depletion and amortisation and $26 million recognised
in share of profit of joint ventures and associates (Q3 2020: $1,636
million, of which $1,615 million recognised in depreciation, depletion
and amortisation and $21 million recognised in share of profit of joint
ventures and associates; full year: $28,062 million, of which $27,463
million recognised in depreciation, depletion and amortisation and $599
million recognised in share of profit of joint ventures and associates),
mainly relate to impairments in Upstream ($1,688 million pre-tax and
$1,272 million post-tax) and in Oil Products ($1,486 million pre-tax and
$1,325 million post-tax). In Upstream, the Appomattox asset in the US
Gulf of Mexico was partially impaired due to subsurface updates. The
impairments in Oil Products reflect the impact of the announced
transformation of the refining portfolio and mainly relate to assets in
the Netherlands and in Singapore, and the shutdown of the Convent
Refinery in the USA. The commodity price assumptions and the discount
rate applied remained unchanged from those disclosed in the notes to the
Condensed Consolidated Interim Financial Statements for the period ended
June 30, 2020. For further information regarding the impairments
recognised in the second quarter 2020, see notes 1 and 7 to the
Condensed Consolidated Interim Financial Statements for the period ended
June 30, 2020.
Page 18
ROYAL DUTCH SHELL PLC 4TH QUARTER 2020 AND FULL YEAR
UNAUDITED RESULTS
-----------------------------------------------------
Condensed Consolidated Balance Sheet
Retirement benefits
$ million
December 31, 2020 December 31, 2019
Non-current assets
Retirement benefits 2,474 4,717
Non-current liabilities
Retirement benefits 15,168 13,017
Current liabilities
Retirement benefits 437 419
Net liability 13,131 8,719
-------------------------- ----------------- -----------------
The increase in the net retirement benefit liability is mainly driven by
a decrease of the market yield on high-quality corporate bonds partly
offset by returns on plan assets. 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.
Decommissioning and other provisions
$ million
December 31, 2020 December 31, 2019
Non-current liabilities
Decommissioning and other
provisions 27,310 21,799
Current liabilities
Decommissioning and other
provisions 3,624 2,811
---------------------------- ----------------- -----------------
The discount rate applied at December 31, 2020 was 1.75% (December 31,
2019: 3.0%). Compared with December 31, 2019, non-current
decommissioning and restoration provisions increased by $3,999 million
at June 30, 2020 as a result of the change in the discount rate as at
that date.
Non-controlling interest
$ million
December 31, 2020 December 31, 2019
Non-controlling interest 3,227 3,987
--------------------------- ----------------- -----------------
The change in the non-controlling interest is mainly related to the
non-controlling interest in Shell Midstream Partners, L.P. ("SHLX")
following the completion of the sale of Shell's 79% interest in the
Mattox Pipeline Company LLC and certain logistics assets at the Shell
Norco Manufacturing Complex to SHLX in the second quarter 2020.
8. Post-Balance Sheet Events
A restructuring plan named Reshape was announced in the fourth quarter
2020. Under Reshape, between 7,000 and 9,000 job reductions are expected
by the end of 2022. The impact of Reshape was communicated to employees
in January 2021. Costs related to the currently announced plan will be
recognised in 2021.
Page 19
ROYAL DUTCH SHELL PLC 4TH QUARTER 2020 AND FULL YEAR
UNAUDITED RESULTS
-----------------------------------------------------
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
A.Adjusted Earnings
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. This measure was previously
referred to as "CCS earnings attributable to shareholders excluding
identified items" and was renamed for simplicity with effect from the
second quarter 2020.
ADJUSTED EARNINGS
Quarters $ million Full year
Q4 2020 Q3 2020 Q4 2019 2020 2019
Income/(loss) attributable to Royal Dutch Shell plc
(4,014) 489 965 shareholders (21,680) 15,842
Add: Current cost of supplies adjustment attributable
(465) (312) (94) to Royal Dutch Shell plc shareholders (Note 2) 1,758 (572)
Less: Identified items attributable to Royal Dutch
(4,871) (778) (2,060) Shell plc shareholders (24,767) (1,192)
393 955 2,931 Adjusted Earnings 4,846 16,462
--------- ------- --------- --------------------------------------------------------- ---------- ---------
Identified items
Identified items comprise: divestment gains and losses, impairments,
fair value accounting of commodity derivatives and certain gas contracts,
redundancy and restructuring, the impact of exchange rate movements on
certain deferred tax balances, and other items.
IDENTIFIED ITEMS
Quarters $ million Full year
Q4 2020 Q3 2020 Q4 2019 2020 2019
Identified items before tax
162 103 128 Divestment gains/(losses) 316 2,611
(3,344) (1,636) (2,941) Impairments (28,061) (4,155)
Fair value accounting of commodity derivatives and
(957) 721 616 certain gas contracts (1,151) 602
(372) 25 (59) Redundancy and restructuring (883) (132)
(1,404) (267) (333) Other1 (2,098) (770)
(5,914) (1,055) (2,589) Total identified items before tax (31,877) (1,844)
1,033 276 529 Total tax impact of identified items 7,100 674
Identified items after tax
(20) 46 111 Divestment gains/(losses) 4 2,170
(2,746) (1,143) (2,240) Impairments (21,267) (3,162)
Fair value accounting of commodity derivatives and
(864) 532 526 certain gas contracts (1,034) 650
(267) 4 (46) Redundancy and restructuring (644) (89)
157 13 29 Impact of exchange rate movements on tax balances (240) (69)
(1,141) (230) (441) Other1 (1,595) (670)
(4,881) (778) (2,060) Impact on CCS earnings (24,777) (1,170)
Of which:
(1,089) (920) (89) Integrated Gas (10,661) (326)
(1,344) (226) (1,564) Upstream (7,933) (598)
(2,315) 411 (318) Oil Products (6,489) (93)
(14) (96) (13) Chemicals (154) (263) (MORE TO FOLLOW) Dow Jones Newswires
02-04-21 0216ET
