Reconciliation of non-GAAP financial measures

Total spend on goods and services

Total spend on goods and services represents the amounts paid to our suppliers globally and is comprised of both Capital Expenditure and Operating Expenditure. Employee costs are excluded from Operating costs as these do not relate to 3rd party/supplier spend.

The total spend on goods and services is used to demonstrate the company’s societal contribution towards suppliers, contractors and communities where Shell operates and is disclosed annually in the Sustainability Report.

The calculation of Total spend on goods and services has changed, with data published in previous years being limited to spend for Operated assets that has been contracted with the support of the Contracting and Procurement team, calculated on a cash payments basis.

Taxes paid and collected

Taxes paid and collected represents the total taxes paid to governments as disclosed in the annual Tax Contribution Report. It comprises Corporate income tax and government royalties as well as excise duties, sales taxes and similar levies on our fuel and products that are collected on behalf of the governments.

Cash capital expenditure

Cash capital expenditure monitors investing activities on a cash basis, excluding items such as lease additions which do not necessarily result in cash outflows in the period. The measure comprises the following lines from the Consolidated Statement of Cash Flows: Capital expenditure, Investments in joint ventures and associates and Investments in equity securities.

Operating expenses and underlying operating expenses

Operating expenses is a measure of Shell’s cost management performance, comprising the following items from the "Consolidated Statement of Income": production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses. See Note 7 to the "Consolidated Financial Statements" for reconciliation of total operating expenses.

Underlying operating expenses is a measure aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors.