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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pjsc Lukoil | LSE:LKOH | London | Ordinary Share | RU0009024277 | ORD RUB0.025 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 56.2184 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMLKOD
RNS Number : 5760Q
PJSC LukOil
30 November 2016
LUKOIL ANNOUNCES THIRD QUARTER AND NINE MONTHS 2016 RESULTS - revised
PJSC LUKOIL ("LUKOIL" or "Company") on 29 November, 2016 reported its condensed interim consolidated financial statements as of and for the three and nine months ended 30 September 2016 prepared in accordance with International Financial Reporting Standards (IFRS) ("the financial statements"). The Note 6 to the financial statements disclosing the breakdown of cash and cash equivalents contained a clerical error. As of 30 September, 2016 cash held in US dollars and cash held in other currencies were 52,259 mln rubles and 253,251 mln rubles, respectively. The correct numbers for cash held in US dollars and cash held in other currencies are 253,251 mln rubles and 52,259 mln rubles, respectively, as of 30 September, 2016.
Full set of condensed interim consolidated financial statements prepared in accordance with IFRS as of and for the three and nine-month period ended 30 September 2016 is available on the Company's web sites: www.lukoil.com and www.lukoil.ru
These condensed interim consolidated financial statements have been prepared by the Company in accordance with IFRS and have not been audited by our independent auditor. If these financial statements are audited in the future, the audit could reveal discrepancies, and we cannot give any assurance that any such discrepancies would not be material.
PJSC LUKOIL
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(prepared in accordance with IFRS)
As of and for the three and nine-month periods ended 30 September 2016
(unaudited)
These condensed interim consolidated financial statements were prepared by PJSC LUKOIL in accordance with IFRS and have not been audited by our independent auditor. If these condensed interim consolidated financial statements are audited in the future, the audit could reveal differences in our consolidated financial results and we can not assure that any such differences would not be material.
Auditors' Report on Review of Condensed Interim Consolidated Financial Statements To the Shareholders and Board of Directors PJSC LUKOIL
Introduction
We have reviewed the accompanying consolidated statement of financial position of PJSC LUKOIL (the "Company") and its subsidiaries (the "Group") as at 30 September 2016, and the related consolidated statements of profit or loss and other comprehensive income for the three- and nine-month periods ended 30 September 2016 and the related consolidated statements of changes in equity and cash flows for the nine - month period ended 30 September 2016, and notes to the condensed interim consolidated financial statements (the "condensed interim consolidated financial statements"). Management is responsible for the preparation and presentation of these condensed interim consolidated financial statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. Our responsibility is to express a conclusion on these condensed interim consolidated financial statements based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of condensed interim consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed interim consolidated financial statements as at 30 September 2016, and for the three -and nine-month periods ended 30 September 2016 are not prepared, in all material respects, in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.
Oussov A.I. Director, power of attorney dated 16 March 2015 No. 18/15 JSC "KPMG" 28 November 2016 Moscow, Russian Federation
PJSC LUKOIL
Consolidated Statement of Financial Position
(Millions of Russian rubles)
Hot Features
Premium
31 December
------------
30 September
2016
Note (unaudited) 2015
-------------------------------- ---- ------------ -------------
Assets
Current assets
Cash and cash equivalents 6 345,175 257,263
Accounts receivable, net 7 338,701 440,489
Other current financial
assets 7,314 23,768
Inventories 8 361,871 340,196
Income tax prepaid 14,474 7,413
Other taxes receivable 9 63,195 81,692
Other current assets 10 43,093 62,826
Total current assets 1,173,823 1,213,647
Property, plant and equipment 12 3,413,480 3,411,153
Investments in associates
and joint ventures 11 166,988 181,744
Other non-current financial
assets 13 112,494 102,067
Deferred income tax assets 26,995 28,735
Goodwill and other intangible
assets 46,127 51,749
Other non-current assets 32,657 31,512
-------------------------------- ---- ------------ -------------
Total non-current assets 3,798,741 3,806,960
-------------------------------- ---- ------------ -------------
Total assets 4,972,564 5,020,607
-------------------------------- ---- ------------ -------------
Liabilities and equity
Current liabilities
Accounts payable 14 404,374 394,339
Short-term borrowings and
current portion of long-term
debt 15 125,107 60,506
Income tax payable 10,724 11,640
Other taxes payable 17 86,627 73,277
Provisions 19 24,731 25,553
Other current liabilities 18 33,653 129,853
Total current liabilities 685,216 695,168
Long-term debt 16 714,397 799,207
Deferred income tax liabilities 235,929 234,107
Provisions 19 59,133 51,115
Other non-current liabilities 7,246 9,636
Total non-current liabilities 1,016,705 1,094,065
-------------------------------- ---- ------------ -------------
Total liabilities 1,701,921 1,789,233
-------------------------------- ---- ------------ -------------
Equity 20
Share capital 1,151 1,151
Treasury shares (241,615) (241,615)
Additional paid-in capital 129,510 129,403
Other reserves 65,056 104,150
Retained earnings 3,309,726 3,229,379
-------------------------------- ---- ------------ -------------
Total equity attributable
to PJSC LUKOIL shareholders 3,263,828 3,222,468
-------------------------------- ---- ------------ -------------
Non-controlling interests 6,815 8,906
-------------------------------- ---- ------------ -------------
Total equity 3,270,643 3,231,374
-------------------------------- ---- ------------ -------------
Total liabilities and equity 4,972,564 5,020,607
-------------------------------- ---- ------------ -------------
Vice-president - Chief
President of PJSC LUKOIL accountant of PJSC LUKOIL
Alekperov V.Y. Khoba L.N.
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
PJSC LUKOIL
Consolidated Statement of Profit or Loss and Other Comprehensive Income
(Millions of Russian rubles, unless otherwise noted)
For the For the For the
three three nine months For the
months months ended nine months
ended ended 30 September ended
30 September 30 September 2016 30 September
2016 2015 (unaudited) 2015
Note (unaudited) (unaudited) (unaudited)
-------------------------- ---- ------------- ------------- ------------- -------------
Revenues
Sales (including
excise and export
tariffs) 28 1,309,488 1,464,053 3,826,121 4,381,324
Costs and other
deductions
Operating expenses (112,133) (116,833) (339,086) (328,342)
Cost of purchased
crude oil, gas and
products (654,871) (733,220) (1,869,901) (2,210,925)
Transportation expenses (71,169) (71,371) (235,533) (218,533)
Selling, general
and administrative expenses (52,658) (40,838) (145,783) (122,051) Depreciation, depletion and amortization (74,790) (100,061) (230,746) (265,582) Taxes other than income taxes (122,245) (134,256) (324,522) (405,310) Excise and export tariffs (129,440) (145,685) (358,209) (442,143) Exploration expenses (1,082) (8,819) (5,634) (23,602) -------------------------- ---- ------------- ------------- ------------- ------------- Profit from operating activities 91,100 112,970 316,707 364,836 Finance income 22 3,778 4,210 11,120 12,777 Finance costs 22 (11,949) (11,667) (33,418) (34,153) Equity share in income of affiliates 198 2,131 5,976 8,606 Foreign exchange (loss) gain (10,207) 83,762 (84,530) 60,283 Other income (expenses) 23 2,872 36,542 (4,676) 27,986 Profit before income taxes 75,792 227,948 211,179 440,335 Current income taxes (19,389) (33,843) (47,048) (76,177) Deferred income taxes (1,300) (5,508) (3,364) (6,866) -------------------------- ---- ------------- ------------- ------------- ------------- Total income tax expense (20,689) (39,351) (50,412) (83,043) -------------------------- ---- ------------- ------------- ------------- ------------- Profit for the period 55,103 188,597 160,767 357,292 Profit for the period attributable to non-controlling interests (300) (204) (572) (1,120) -------------------------- ---- ------------- ------------- ------------- ------------- Profit for the period attributable to PJSC LUKOIL shareholders 54,803 188,393 160,195 356,172 -------------------------- ---- ------------- ------------- ------------- ------------- Other comprehensive income (loss), net of income taxes Items that may be reclassified to profit or loss: Foreign currency translation differences for foreign operations (1,715) 26,574 (39,029) (9,067) Items that will never be reclassified to profit or loss: Remeasurements of defined benefit liability / asset of pension plan (9) 304 24 956 -------------------------- ---- ------------- ------------- ------------- ------------- Other comprehensive (loss) income (1,724) 26,878 (39,005) (8,111) -------------------------- ---- ------------- ------------- ------------- ------------- Total comprehensive income for the period 53,379 215,475 121,762 349,181 Total comprehensive income for the period attributable to non-controlling interests (311) (189) (609) (1,156) -------------------------- ---- ------------- ------------- ------------- ------------- Total comprehensive income for the period attributable to PJSC LUKOIL shareholders 53,068 215,286 121,153 348,025 -------------------------- ---- ------------- ------------- ------------- ------------- Earnings per share of common stock attributable to PJSC LUKOIL shareholders (in Russian rubles): Basic 20 76.87 264.25 224.70 499.59 Diluted 20 76.87 264.25 224.70 492.85
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
PJSC LUKOIL
Consolidated Statement of Changes in Equity (unaudited)
(Millions of Russian rubles)
Total
equity
attributable
Additional to PJSC
Share Treasury Equity-linked paid-in Other Retained LUKOIL Non-controlling Total
capital shares notes capital reserves earnings shareholders interests equity
---------------- ------- --------- ------------- ---------- -------- --------- ------------ --------------- ---------
31 December
2015 1,151 (241,615) - 129,403 104,150 3,229,379 3,222,468 8,906 3,231,374
Profit
for the
period - - - - - 160,195 160,195 572 160,767
Other
comprehensive
income:
Foreign
currency
translation
differences - - - (39,066) - (39,066) 37 (39,029)
Remeasurements
of defined
benefit
liability
/ asset
of pension
plan - - - - 24 - 24 - 24
-------- --------- ------------ --------------- ---------
Total
comprehensive
income
(loss) (39,042) 160,195 121,153 609 121,762
Dividends
on common
stock - - - - - (79,848) (79,848) - (79,848)
Changes
in
non-controlling
interests - - - 107 (52) - 55 (2,700) (2,645)
---------------- ------- --------- ------------- ---------- -------- --------- ------------ --------------- ---------
30 September
2016 1,151 (241,615) - 129,510 65,056 3,309,726 3,263,828 6,815 3,270,643
---------------- ------- --------- ------------- ---------- -------- --------- ------------ --------------- ---------
31 December
2014 1,151 (158,615) (83,000) 128,846 93,454 3,055,542 3,037,378 12,164 3,049,542
Profit
for the
period - - - - - 356,172 356,172 1,120 357,292
Other comprehensive
income:
Foreign
currency
translation
differences - - - - (9,103) - (9,103) 36 (9,067)
Remeasurements
of defined
benefit
liability
/ asset
of pension
plan - - - - 956 - 956 - 956
------- --------- --------- ------ ---------
Total comprehensive
income
(loss) (8,147) 356,172 348,025 1,156 349,181
Dividends
on common
stock - - - - - (70,957) (70,957) - (70,957)
Equity-linked
notes conversion - (83,000) 83,000 - - - - - -
Changes
in non-controlling
interests - - - (721) - - (721) 1,931 1,210
-------------------- ----- --------- -------- ------- ------- --------- --------- ------ ---------
30 September
2015 1,151 (241,615) - 128,125 85,307 3,340,757 3,313,725 15,251 3,328,976
-------------------- ----- --------- -------- ------- ------- --------- --------- ------ ---------
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
PJSC LUKOIL
Consolidated Statement of Changes in Equity (unaudited)
(Millions of Russian rubles)
For the For the
nine nine
months months
ended ended
30 September 30 September
2016 2015
Note (unaudited) (unaudited)
----------------------------------- ---- ------------- -------------
Cash flows from operating
activities
Profit for the period attributable
to PJSC LUKOIL shareholders 160,195 356,172
Adjustments for non-cash
items:
Depreciation, depletion
and amortization 230,746 265,582
Equity share in income
of affiliates, net of dividends
received (2,918) 568
Dry hole write-offs 631 21,877
Loss (gain) on disposal
and impairment of assets 5,083 (27,466)
Income tax expense 50,412 83,043
Non-cash foreign exchange
loss (gain) 80,201 (64,074)
Non-cash investing activities (70) (165)
Finance income (11,120) (12,777)
Finance costs 33,418 34,153 Bad debt provision 6,762 2,532 All other items - net 11,374 7,196 Changes in operating assets and liabilities: Trade accounts receivable 44,088 96,843 Inventories (65,706) (1,397) Accounts payable 56,671 (52,184) Other taxes 33,980 47,652 Other current assets and liabilities (35,046) (78,976) Income tax paid (50,878) (72,182) Dividends received 3,106 - Interests received 6,950 11,270 ------------------------------------ ---- ------------- ------------- Net cash provided by operating activities 557,879 617,667 ------------------------------------ ---- ------------- ------------- Cash flows from investing activities Acquisition of licenses (2,556) (502) Capital expenditures (357,392) (445,969) Proceeds from sale of property, plant and equipment 1,672 1,490 Purchases of financial assets (15,160) (8,153) Proceeds from sale of financial assets 8,929 9,833 Sale of subsidiaries, net of cash disposed 537 3,837 Sale of equity method affiliates - 79,327 Acquisitions of subsidiaries, net of cash acquired - (665) Acquisitions of equity method affiliates (3,216) (4,399) Net cash used in investing activities (367,186) (365,201) ------------------------------------ ---- ------------- ------------- Cash flows from financing activities Proceeds from issuance of short-term borrowings 39,800 84,880 Principal repayments of short-term borrowings (17,298) (68,938) Proceeds from issuance of long-term debt 89,276 70,411 Principal repayments of long-term debt (14,722) (105,791) Interests paid (30,622) (24,267) Dividends paid on Company common shares (127,007) (111,846) Dividends paid to non-controlling interest shareholders (2,297) (3,003) Financing received from non-controlling interest shareholders 68 87 Sale of non-controlling interests - 2,568 Purchases of non-controlling interests (1,285) - Net cash used in financing activities (64,087) (155,899) ------------------------------------ ---- ------------- ------------- Effect of exchange rate changes on cash and cash equivalents (38,694) (3,126) Net increase in cash and cash equivalents 87,912 93,441 Cash and cash equivalents at beginning of period 257,263 169,023 ------------------------------------ ---- ------------- ------------- Cash and cash equivalents at end of period 6 345,175 262,464 ------------------------------------ ---- ------------- -------------
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
PJSC LUKOIL
Notes to Condensed Interim Consolidated Financial Statements (unaudited)
(Millions of Russian rubles, unless otherwise noted)
Note 1. Organization and environment
The primary activities of PJSC LUKOIL (the "Company") and its subsidiaries (together, the "Group") are oil exploration, production, refining, marketing and distribution. The Company is the ultimate parent entity of this vertically integrated group of companies.
The Group was established in accordance with Presidential Decree No. 1403, issued on 17 November 1992. Under this decree, on 5 April 1993, the Government of the Russian Federation transferred to the Company 51% of the voting shares of fifteen enterprises. Under Government Resolution No. 861 issued on 1 September 1995, a further nine enterprises were transferred to the Group during 1995. Since 1995, the Group has carried out a share exchange program to increase its shareholding in each of the twenty-four founding subsidiaries to 100%.
From formation, the Group has expanded substantially through consolidation of its interests, acquisition of new companies and establishment of new businesses.
In July 2015, the Company changed its legal form to Public Joint Stock Company ("PJSC") following the requirements of the amended Russian Civil Code.
Business and economic environment
The accompanying condensed interim consolidated financial statements reflect management's assessment of the impact of the business environment in the countries in which the Group operates on the operations and the financial position of the Group. The future business environments may differ from management's assessment.
Note 2. Basis of preparation
Statement of compliance
The condensed interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. These condensed interim consolidated financial statements should be read in conjunction with the Group's consolidated financial statements for 2015 prepared in accordance with International Financial Reporting Standards ("IFRS").
Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last consolidated financial statements for 2015.
The accompanying condensed interim consolidated financial statements and notes thereto have not been audited by independent auditors, except for the consolidated statement of financial position at 31 December 2015.
The condensed interim consolidated financial statements were authorised by the President of the Company on 28 November 2016.
Functional and presentation currency
The functional currency of each of the Group's consolidated companies is the currency of the primary economic environment in which the company operates. Management has analysed factors that influence the choice of functional currency and has determined the functional currency for each Group company. For the majority of them the functional currency is the local currency. The functional currency of the Company is the Russian ruble ("RUB").
The presentation currency of the consolidated financial statements of the Group is the RUB. All financial information presented in the RUB has been rounded to the nearest million, except when otherwise indicated.
The results and financial position of Group companies whose functional currency is different from the presentation currency of the Group are translated into presentation currency using the following procedures. Assets and liabilities are translated at period-end exchange rates, income and expenses are translated at rates which approximate actual rates at the date of the transaction. Resulting exchange differences are recognised in other comprehensive income.
Note 3. Summary of significant accounting policies
The accounting policies adopted in the preparation of these condensed interim consolidated financial statements are consistent with those applied and disclosed in the consolidated financial statements for 2015.
Note 4. Use of estimates and judgments
Preparation of the consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are the following:
-- Estimation of oil and gas reserves; -- Estimation of useful lives of property, plant and equipment; -- Impairment of non-current assets; -- Assessment of asset retirement obligations; -- Assessment and recognition of provisions and contingent liabilities; -- Assessment of deferred income tax assets and liabilities; -- Determination of whether a joint arrangement is a joint venture or a joint operation.
Note 5. Income taxes
Operations in the Russian Federation are subject to a Federal income tax rate of 2.0% and a regional income tax rate that varies from 13.5% to 18.0% at the discretion of the individual regional administration. The Group's foreign operations are subject to taxes at the tax rates applicable to the jurisdictions in which they operate.
The Group's effective income tax rate for the periods presented differs from the statutory income tax rate primarily due to domestic and foreign tax rate differences and the incurrence of costs that are either not tax deductible or only deductible to a certain limit. Tax expense is recognised based on the management's best estimate of the weighted-average annual income tax rate expected for the full financial year multiplied by the pre-tax income of the interim reporting period.
The Company and its Russian subsidiaries file income tax returns in Russia. A number of Group companies in Russia are paying income tax as a consolidated taxpayers' group ("CTG"). This allows taxpayers to offset taxable losses generated by certain participants of a CTG against taxable profits of other participants of the CTG.
Note 6. Cash and cash equivalents
30 September 31 December
2016 2015
-------------------------------- ------------ -----------
Cash held in RUB 39,665 98,253
Cash held in US dollars 253,251 141,863
Cash held in other currencies 52,259 17,147
Total cash and cash equivalents 345,175 257,263
--------------------------------- ------------ -----------
Note 7. Accounts receivable, net
30 September 31 December
2016 2015
------------------------------------ ------------ -----------
Trade accounts receivable (net
of allowances of 20,991 million
RUB and
17,322 million RUB at 30 September
2016 and 31 December 2015,
respectively) 310,318 375,531
Other current accounts receivable
(net of allowances of 1,886
million RUB and 1,599 million
RUB at 30 September 2016 and
31 December 2015, respectively) 28,383 64,958
Total accounts receivable,
net 338,701 440,489
------------------------------------- ------------ -----------
Note 8. Inventories
30 September 31 December
2016 2015
--------------------------------- ------------ -----------
Crude oil and petroleum products 297,431 275,941
Materials for extraction and
drilling 20,186 21,345
Materials and supplies for
refining 3,354 3,732
Other goods, materials and
supplies 40,900 39,178
Total inventories 361,871 340,196
---------------------------------- ------------ -----------
Note 9. Other taxes receivable
30 September 31 December
2016 2015
------------------------------- ------------ -----------
VAT and excise tax recoverable 36,656 39,171
Export duties prepaid 12,213 21,824
Other taxes prepaid 14,326 20,697
Total other taxes receivable 63,195 81,692
-------------------------------- ------------ -----------
Note 10. Other current assets
30 September 31 December
2016 2015
--------------------------- ------------ -----------
Advance payments 11,051 16,341
Prepaid expenses 20,646 31,960
Other assets 11,396 14,525
Total other current assets 43,093 62,826
---------------------------- ------------ -----------
Note 11. Investments in associates and joint ventures
Carrying value of investments in associates and joint ventures:
Ownership, %
-------------------------
30 September 31 December 30 September 31 December
Name of the company Country 2016 2015 2016 2015
---------------------- ----------- ------------ ----------- ------------ -----------
Joint Ventures:
Tengizchevroil Kazakhstan 5.0% 5.0% 88,091 99,843
Caspian Pipeline
Consortium Kazakhstan 12.5% 12.5% 25,602 27,574
Turgai Petroleum Kazakhstan 50.0% 50.0% 1,955 1,675
Shakh-Deniz Midstream Azerbaijan 10.0% 10.0% 23,507 22,284
Associates:
Other associates 27,833 30,368
Total 166,988 181,744
----------------------------------- ------------ ----------- ------------ -----------
Note 12. Property, plant and equipment
Refining,
Exploration marketing
and production and distribution Other Total
-------------------------- ---------------- ------------------ --------- ------------
Cost
1 January 2016 3,232,673 1,206,252 103,587 4,542,512
Additions 319,058 43,409 1,986 364,453
Capitalised borrowing
costs 7,854 327 1 8,182
Disposals (8,396) (18,919) (813) (28,128)
Foreign currency
translation differences (156,851) (51,873) (2,044) (210,768)
Other (3,913) 6,678 (482) 2,283
-------------------------- ---------------- ------------------ --------- ------------
30 September 2016 3,390,425 1,185,874 102,235 4,678,534
-------------------------- ---------------- ------------------ --------- ------------
Depreciation and
impairment
1 January 2016 (953,254) (259,515) (14,627) (1,227,396)
Depreciation for
the period (157,165) (64,925) (4,550) (226,640)
Impairment loss - (82) - (82)
Disposals 1,751 10,315 453 12,519
Foreign currency
translation differences 87,721 18,825 448 106,994
Other (63) (1,419) 14 (1,468)
-------------------------- ---------------- ------------------ --------- ------------
30 September 2016 (1,021,010) (296,801) (18,262) (1,336,073)
-------------------------- ---------------- ------------------ --------- ------------
Advance payments
for property,
plant and equipment
1 January 2016 94,619 1,280 138 96,037
-------------------------- ---------------- ------------------ --------- ------------
30 September 2016 70,230 625 164 71,019
-------------------------- ---------------- ------------------ --------- ------------
Carrying amounts
1 January 2016 2,374,038 948,017 89,098 3,411,153
-------------------------- ---------------- ------------------ --------- ------------
30 September 2016 2,439,645 889,698 84,137 3,413,480
-------------------------- ---------------- ------------------ --------- ------------
Refining,
Exploration marketing
and production and distribution Other Total
-------------------------- ---------------- ------------------ --------- ----------
Cost
1 January 2015 2,556,173 1,030,097 95,392 3,681,662
Additions 336,214 84,993 2,750 423,957
Acquisitions through
business combinations 605 417 - 1,022
Capitalised borrowing
costs 250 686 - 936
Disposals (29,780) (5,677) (622) (36,079)
Foreign currency
translation differences 140,451 32,193 1,837 174,481
Other 1,005 (709) (899) (603)
-------------------------- ---------------- ------------------ --------- ----------
30 September 2015 3,004,918 1,142,000 98,458 4,245,376
-------------------------- ---------------- ------------------ --------- ----------
Depreciation and
impairment
1 January 2015 (444,128) (142,713) (8,525) (595,366)
Depreciation for
the period (214,206) (48,212) (4,391) (266,809)
Disposals 1,241 2,757 128 4,126
Foreign currency
translation differences (65,382) (8,621) (300) (74,303)
Other 500 28 24 552
-------------------------- ---------------- ------------------ --------- ----------
30 September 2015 (721,975) (196,761) (13,064) (931,800)
-------------------------- ---------------- ------------------ --------- ----------
Advance payments
for property,
plant and equipment
1 January 2015 58,558 8,258 467 67,283
-------------------------- ---------------- ------------------ --------- ---------- 30 September 2015 91,072 1,354 383 92,809 -------------------------- ---------------- ------------------ --------- ---------- Carrying amounts 1 January 2015 2,170,603 895,642 87,334 3,153,579 -------------------------- ---------------- ------------------ --------- ---------- 30 September 2015 2,374,015 946,593 85,777 3,406,385 -------------------------- ---------------- ------------------ --------- ----------
The cost of assets under construction included in Property, plant and equipment was 638,927 million RUB and 676,908 million RUB at 30 September 2016 and 31 December 2015, respectively.
Exploration and evaluation assets:
For the For the
nine months nine months
ended ended
30 September 30 September
2016 2015
------------------------------------ ------------- -------------
1 January 52,302 46,906
Capitalized expenditures 20,719 15,781
Reclassified to development assets (4,103) (9,683)
Charged to expense (591) (238)
Foreign currency translation
differences (1,316) -
Other movements (125) 82
------------------------------------ ------------- -------------
30 September 66,886 52,848
------------------------------------ ------------- -------------
Note 13. Other non-current financial assets
30 September 31 December
2016 2015
---------------------------------- ------------ -----------
Long-term loans 100,409 89,770
Non-current accounts and notes
receivable 8,222 8,148
Other non-current financial
assets 3,863 4,149
Total other non-current financial
assets 112,494 102,067
----------------------------------- ------------ -----------
Note 14. Accounts payable
30 September 31 December
2016 2015
----------------------- ------------ -----------
Trade accounts payable 357,211 339,091
Other accounts payable 47,163 55,248
Total accounts payable 404,374 394,339
------------------------ ------------ -----------
Note 15. Short-term borrowings and current portion of long-term debt
30 September 31 December
2016 2015
---------------------------------- ------------ -----------
Short-term borrowings from
third parties 47,004 33,611
Short-term borrowings from
related parties 5,126 5,609
Current portion of long-term
debt 72,977 21,286
Total short-term borrowings
and current portion of long-term
debt 125,107 60,506
----------------------------------- ------------ -----------
Short-term borrowings from third parties include amounts repayable in US dollars of 29,821 million RUB and 22,951 million RUB and amounts repayable in other currencies of 17,183 million RUB and 10,660 million RUB at 30 September 2016 and 31 December 2015, respectively. The weighted-average interest rate on short-term borrowings from third parties was 4.63% and 5.43% per annum at 30 September 2016 and 31 December 2015, respectively. Approximately 76% of total short-term borrowings from third parties at 30 September 2016 are secured by inventories.
Note 16. Long-term debt
30 September 31 December
2016 2015
------------------------------- ------------ -----------
Long-term loans and borrowings
from third parties 430,559 408,781
Long-term borrowings from
related parties - 138
6.356% non-convertible US
dollar bonds, maturing 2017 31,579 36,441
3.416% non-convertible US
dollar bonds, maturing 2018 94,498 108,983
7.250% non-convertible US
dollar bonds, maturing 2019 37,792 43,583
6.125% non-convertible US
dollar bonds, maturing 2020 63,079 72,778
6.656% non-convertible US
dollar bonds, maturing 2022 31,579 36,441
4.563% non-convertible US
dollar bonds, maturing 2023 94,498 108,983
Capital lease obligations 3,790 4,365
-------------------------------- ------------ -----------
Total long-term debt 787,374 820,493
Current portion of long-term
debt (72,977) (21,286)
Total non-current portion
of long-term debt 714,397 799,207
-------------------------------- ------------ -----------
Long-term loans and borrowings
Long-term loans and borrowings from third parties include amounts repayable in US dollars of 298,556 million RUB and 336,842 million RUB, amounts repayable in euros of 60,694 million RUB and 70,447 million RUB, amounts repayable in other currencies of 1,309 million RUB and 1,492 million RUB at 30 September 2016 and 31 December 2015, respectively, and amounts repayable in RUB of 70,000 million RUB at 30 September 2016. This debt has maturity dates from 2016 through 2028. The weighted-average interest rate on long-term loans and borrowings from third parties was 5.41% and 3.77% per annum at 30 September 2016 and 31 December 2015, respectively. A number of long-term loan agreements contain certain financial covenants which are being met by the Group. Approximately 14% of total long-term loans and borrowings from third parties at 30 September 2016 are secured by shares of an associated company, export sales and property, plant and equipment.
Note 17. Other taxes payable
30 September 31 December
2016 2015
-------------------------- ------------ -----------
Mineral extraction tax 30,470 24,566
VAT 27,939 21,532
Excise tax 18,149 15,553
Property tax 4,373 4,583
Other taxes 5,696 7,043
Total other taxes payable 86,627 73,277
--------------------------- ------------ -----------
Note 18. Other current liabilities
30 September 31 December
2016 2015
-------------------------------- ------------ -----------
Advances received 23,855 79,424
Dividends payable 1,397 47,615
Other 8,401 2,814
Total other current liabilities 33,653 129,853
--------------------------------- ------------ -----------
Note 19. Provisions
Asset Provision Provision
retirement Provision for for
obligation for employee environmental Pension compensated Other
compensations liabilities provisions absences provisions Total
------------------- ------------ -------------- -------------- ------------ -------------- ------------ -------
30 September
2016 33,677 30,385 4,590 7,587 3,912 3,713 83,864
Incl.:
Non-current 32,210 16,776 2,672 6,089 63 1,323 59,133
Current 1,467 13,609 1,918 1,498 3,849 2,390 24,731
31 December
2015 32,919 19,837 5,455 7,913 3,591 6,953 76,668
------------------- ------------ -------------- -------------- ------------ -------------- ------------ -------
Incl.:
Non-current 32,632 6,733 3,575 6,392 134 1,649 51,115
Current 287 13,104 1,880 1,521 3,457 5,304 25,553
Assets retirement obligation:
For the For the
nine months nine months
ended ended
30 September 30 September
2016 2015
----------------------------------- -------------- --------------
1 January 32,919 19,604
Provisions made during the period 1,811 338
Reversal of provisions (67) (133)
Provisions used during the period (88) (20)
Accretion expense 1,692 680
Changes in estimates 43 (370)
Foreign currency translation
differences (2,447) 2,247
Other (186) 100
----------------------------------- -------------- --------------
30 September 33,677 22,446
----------------------------------- -------------- --------------
Note 20. Equity
Common shares
30 September 31 December
2016 2015
(thousands (thousands
of shares) of shares)
Authorized common shares,
par value of 0.025 RUB each 850,563 850,563
Issued common shares, par
value of 0.025 RUB each 850,563 850,563
Treasury shares (137,630) (137,630)
Outstanding common shares 712,933 712,933
------------------------------ ------------ -----------
Dividends
At the annual shareholders' meeting on 23 June 2016, dividends for 2015 were approved in the amount of 112.00 RUB per common share. At the extraordinary shareholders' meeting on 16 December 2015, interim dividends for 2015 were approved in the amount of 65.00 RUB per common share. Total dividends for 2015 were approved in the amount of 177.00 RUB per common share. At the annual shareholders' meeting on 25 June 2015, dividends for 2014 were approved in the amount of 94.00 RUB per common share. At the extraordinary shareholders' meeting on 12 December 2014, interim dividends for 2014 were approved in the amount of 60.00 RUB per common share. Total dividends for 2014 were approved in the amount of 154.00 RUB per common share.
Dividends on the Company's shares payable of 314 million RUB and 46,609 million RUB are included in "Other current liabilities" in the consolidated statement of financial position at 30 September 2016 and 31 December 2015, respectively.
Earnings per share
The calculation of basic and diluted earnings per share was as follows.
For the
For the For the For the nine
three months three months nine months months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
-------------------------- ------------- ------------- ------------- -------------
Profit for the
period attributable
to
PJSC LUKOIL shareholders 54,803 188,393 160,195 356,172
-------------------------- ------------- ------------- ------------- -------------
Add back interest
and accretion on
2.625% convertible
US dollar bonds,
maturing 2015
(net of tax at
effective rate) - - - 1,718
-------------------------- ------------- ------------- ------------- -------------
Total diluted profit
for the period
attributable to
PJSC LUKOIL shareholders 54,803 188,393 160,195 357,890
-------------------------- ------------- ------------- ------------- -------------
Weighted average
number of outstanding
common shares (thousands
of shares) 712,933 744,838 712,933 751,487
Equity-linked notes - (31,905) - (38,554)
-------------------------- ------------- ------------- ------------- -------------
Weighted average
number of common
shares (thousands
of shares) 712,933 712,933 712,933 712,933
Add back treasury
shares held in
respect of convertible
debt (thousands
of shares) - - - 13,224
-------------------------- ------------- ------------- ------------- -------------
Weighted average
number of common
shares, assuming
dilution
(thousands of shares) 712,933 712,933 712,933 726,157
-------------------------- ------------- ------------- ------------- -------------
Earnings per share
of common stock
attributable to
PJSC LUKOIL shareholders
(in Russian rubles):
Basic 76.87 264.25 224.70 499.59
Diluted 76.87 264.25 224.70 492.85
-------------------------- ------------- ------------- ------------- -------------
Note 21. Personnel expenses
Personnel expenses were as follows.
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
--------------------- -------------- -------------- -------------- --------------
Salary 33,071 32,420 102,923 93,002
Statutory insurance
contributions 7,305 6,931 22,299 20,575
Share-based
payments 5,965 (647) 12,309 2,938
Total personnel
expenses 46,341 38,704 137,531 116,515
--------------------- -------------- -------------- -------------- --------------
Note 22. Finance income and costs
Finance income was as follows.
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
----------------- -------------- -------------- -------------- --------------
Interest income
from deposits 1,884 2,514 4,733 7,428
Interest income
from loans 1,770 1,602 5,467 4,517
Other finance
income 124 94 920 832
----------------- -------------- -------------- -------------- --------------
Total finance
income 3,778 4,210 11,120 12,777
----------------- -------------- -------------- -------------- --------------
Finance costs were as follows.
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
-------------------- -------------- -------------- -------------- --------------
Interest expenses 10,096 11,295 30,280 31,862
Accretion expenses 578 257 1,702 699
Loss on financial
assets disposals 965 47 1,104 303
Other finance
expenses 310 68 332 1,289
-------------------- -------------- -------------- -------------- --------------
Total finance
costs 11,949 11,667 33,418 34,153
-------------------- -------------- -------------- -------------- --------------
Note 23. Other income and expenses
Other income was as follows.
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
------------------ -------------- -------------- -------------- --------------
Gain on disposal
of assets 1,781 38,639 2,697 41,389
Other income 6,685 3,080 14,493 10,207
------------------ -------------- -------------- -------------- --------------
Total other
income 8,466 41,719 17,190 51,596
------------------ -------------- -------------- -------------- --------------
Other expenses were as follows.
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
------------------ -------------- -------------- -------------- --------------
Loss on disposal
of assets 1,927 2,791 7,097 8,918
Impairment loss 219 135 683 5,305
Charity expenses 2,771 2,026 9,114 5,731
Other expenses 677 225 4,972 3,656
------------------ -------------- -------------- -------------- --------------
Total other
expenses 5,594 5,177 21,866 23,610
------------------ -------------- -------------- -------------- --------------
Note 24. Operating lease
At 30 September 2016 and 31 December 2015, Group companies had commitments primarily related to the lease of vessels and petroleum distribution outlets. Commitments for minimum rentals under these leases are payable as follows.
30 September 31 December
2016 2015
------------------ ------------ -----------
Less than a year 32,757 35,858
1-5 years 55,451 46,589
More than 5 years 92,724 80,924
Total 180,932 163,371
------------------- ------------ -----------
Note 25. Commitments and contingencies
Capital commitments
At 30 September 2016, capital commitments of the Group relating to construction and acquisition of property, plant and equipment are evaluated as 469,681 million RUB.
Taxation environment
The taxation systems in the Russian Federation and other emerging markets where Group companies operate are relatively new and are characterised by numerous taxes and frequently changing legislation, which is often unclear, contradictory, and subject to interpretation. Often, differing interpretations exist among different tax authorities within the same jurisdictions and among taxing authorities in different jurisdictions. Taxes are subject to review and investigation by a number of authorities, who are enabled by law to impose severe fines, penalties and interest charges. In the Russian Federation a tax year remains open for review by the tax authorities during the three subsequent calendar years. However, under certain circumstances a tax year may remain open longer. Recent events within the Russian Federation suggest that the tax authorities are taking a more assertive position in their interpretation and enforcement of tax legislation. Such factors may create substantially more significant taxation risks in the Russian Federation and other emerging markets where Group companies operate, than those in other countries where taxation regimes have been subject to development and clarification over long periods.
The tax authorities in each region may have a different interpretation of similar taxation issues which may result in taxation issues successfully defended by the Group in one region being unsuccessful in another region. There is some direction provided from the central authority based in Moscow on particular taxation issues. The Group has implemented tax planning and management strategies based on existing legislation at the time of implementation. The Group is subject to tax authority audits on an ongoing basis, as is normal in the Russian environment and other republics of the former Soviet Union, and, at times, the authorities have attempted to impose additional significant taxes on the Group. Management believes that it has adequately met and provided for tax liabilities based on its interpretation of existing tax legislation. However, the relevant tax authorities may have differing interpretations and the effects on the consolidated financial statements, if the authorities were successful in enforcing their interpretations, could be significant.
Litigation and claims
On 27 November 2001, Archangel Diamond Corporation ("ADC"), a Canadian diamond development company, filed a lawsuit in the Denver District Court, Colorado against AO Arkhangelskgeoldobycha ("AGD"), a Group company, and the Company (together the "Defendants"). ADC alleged that the Defendants interfered with the transfer of a diamond exploration license to Almazny Bereg, a joint venture between ADC and AGD. ADC claimed compensatory damages of $1.2 billion (75.8 billion RUB) and punitive damages of $3.6 billion (227.4 billion RUB). On 15 October 2002, the District Court dismissed the lawsuit for lack of personal jurisdiction. This ruling was upheld by the Colorado Court of Appeals on 25 March 2004. However, on 21 November 2005, due to a procedural error, the Colorado Supreme Court remanded the case to the Colorado Court of Appeals and the Colorado Court of Appeals remanded the case to the District Court. On 20 October 2011, the Denver District Court dismissed all claims against the Company for lack of jurisdiction. On 23 August 2012, the Colorado Court of Appeals affirmed this decision. On 1 July 2013, the Colorado Supreme Court denied ADC's Petition for Writ of Certiorari. The case in the state court is therefore over.
On 6 January 2012, ADC filed a lawsuit in the US District Court for the District of Colorado (federal court) reasserting almost identical claims asserted in the aforementioned lawsuit and dismissed by the Denver District Court (state court). In the federal Court case, the Company has filed a Motion to Dismiss. On 18 December 2014, the federal court granted the motion based on lack of personal jurisdiction over the Company and the doctrine of "forum non conveniens". ADC filed a notice of appeal in the US Court of Appeals for the Tenth Circuit. On 9 February 2016, the US Court of Appeals for the Tenth Circuit affirmed the dismissal of the case on "forum non conveniens" grounds. On 23 February 2016, ADC filed a Petition for rehearing and for "rehearing en banc". On 1 April 2016, the US Court of Appeals for the Tenth Circuit denied both ADC'c Petition for rehearing and for "rehearing en banc". On 7 November 2016, the US Supreme court denied ADC's Petition for Writ of Certiorari. The case is therefore over.
In June 2014, the prosecutors with the Ploesti Court of Appeals (hereinafter the "Prosecutor's Office") issued an order on initiation of criminal proceedings and brought charges against PETROTEL-LUKOIL S.A. refinery, a Group company, and its general director based on alleged tax evasion and money laundering. Later the Prosecutor's Office added bad faith use of the company's credit and money laundering charges for 2008-2010 against LUKOIL Europe Holdings B.V., a Group company. The amount of the claim is not finalised. LUKOIL LUBRICANTS EAST EUROPE S.R.L., LUKOIL ENERGY & GAS ROMANIA S.R.L., Group companies, and a number of Romanian legal entities not affiliated with the Group are also considered to be suspects in this criminal case. At the moment a preliminary investigation of the criminal case is being conducted. Tax audits of PETROTEL-LUKOIL S.A. have not revealed any material violations so far. In July 2015, a new charge in respect of bad faith use of the company's credit and money laundering was brought against the general director and several officers of PETROTEL-LUKOIL S.A. A similar charge was brought against LUKOIL Europe Holdings B.V. and PETROTEL-LUKOIL S.A. for 2011-2014. On 3 August 2015, the Prosecutor's Office issued the final indictment on the new charges and submitted the case to the Prahova Tribunal for further consideration by the preliminary chamber judge. The allegations of bad faith use of the company's credit in respect of PETROTEL-LUKOIL S.A. were excluded from the final indictment. Following the preliminary hearing the Prosecutor's Office revised the amount of damage claimed from $2.2 billion (138.9 billion RUB) to $1.5 billion (94.7 billion RUB). This amount is not final. During the entire trial it may be revised by the Tribunal on the basis of evidence produced. On 15 December 2015, the Prahova Tribunal ascertained that there are numerous irregularities in the indictment act and returned the criminal file to the Prosecutor's Office. The solution was confirmed by the Ploesti Court of Appeal on 19 January 2016. However, the Prosecutor has prepared a new indictment act based on the same accusations which were submitted to the Prahova Tribunal on 22 January 2016. On 18 April 2016, the preliminary hearing chamber of the Prahova Tribunal decided on the hearing of the case on the merits. Moreover, on 10 May 2016, the Prahova Tribunal lifted all preventive measures that were in effect against the accused individuals. At the current stage of the hearings the defendants are making oral statements. Next hearing on the merits will take place on 21 December 2016. Management of PETROTEL-LUKOIL S.A. and its tax and legal counsel are actively defending the lawful rights and interests of the refinery, provide all required opinions, clarifications and comments, and prepare an exhaustive set of evidence to fully rebut the charges brought by the Prosecutor's Office. Management does not believe that the outcome of this matter will have a material adverse effect on the Group's financial position.
LUKOIL Overseas Karachaganak B.V., a Group company, among other contractors, is involved in the dispute related to cost recovery and calculation of the "fairness index" in accordance with the Final Production Sharing Agreement in respect of the Karachaganak field in Kazakhstan. An estimated total of claims filed by the Republic of Kazakhstan is about $1.8 billion (113.7 billion RUB), a share of LUKOIL Overseas Karachaganak B.V. is about $243 million (15.3 billion RUB). At the moment the parties are negotiating an amicable settlement of this dispute. Management does not believe that the ultimate resolution of this matter will have a material adverse effect on the Group's financial position.
The Commission for Protection of Competition in Bulgaria issued ruling alleging violations of applicable antimonopoly laws by Lukoil Bulgaria EOOD, a Group company, and a number of other legal entities not affiliated with the Group, in connection with concerted actions and anti-competitive agreements to fix petrol and diesel fuel retail market prices in Bulgaria. The maximum amount of fines for this violation is evaluated at $150 million (9.5 billion RUB). Lukoil Bulgaria EOOD filed written objections in required period. The announcement of the date of the open hearing is expected and after that the closing hearing will be held. This hearing will state whether there is any violations or not and the amount of fines if any. Management does not believe that the outcome of this matter will have a material adverse effect on the Group's financial position.
The Group is involved in various other claims and legal proceedings arising in the normal course of business. While these claims may seek substantial damages against the Group and are subject to uncertainty inherent in any litigation, management does not believe that the ultimate resolution of such matters will have a material adverse impact on the Group's operating results or financial condition.
Political situation
Political and economic situation in Ukraine remained unstable during 2015-2016. Though the Group's assets and operations in Ukraine are not material, the Group monitors the situation and assesses the risks associated with its operations in Ukraine.
In July-September 2014, the United States ("US"), the European Union ("EU") and other countries imposed a set of economic sanctions on Russia, including certain sectoral sanctions which affect Russian oil and gas companies. Such sectoral sanctions prohibit US and the EU companies and individuals from providing, exporting, or reexporting directly or indirectly, goods, services (except for financial services), or technology in support of exploration or production for deepwater, Arctic offshore or shale projects on the territory of the Russian Federation. The Company considers these sanctions in its activities, continuously monitors them and analyses the effect of the sanctions on the Company's financial position and results of operations.
The Group is exposed to political, economic and legal risks due to its operations in Iraq. Management monitors the risks associated with the projects in Iraq and believes that there is no adverse effect on the Group's financial position that can be reasonably estimated at present.
Note 26. Related party transactions
In the rapidly developing business environment in the Russian Federation, companies and individuals have frequently used nominees and other forms of intermediary companies in transactions. The senior management of the Company believes that the Group has appropriate procedures in place to identify and properly disclose transactions with related parties in this environment and has disclosed all of the relationships identified which it deemed to be significant. Related party sales and purchases of oil and oil products were primarily to and from associated companies.
Outstanding balances with related parties were as follows.
30 September 31 December
2016 2015
----------------------- ------------ -----------
Accounts receivable 10,294 10,925
Other financial assets 96,962 98,538
------------------------ ------------ -----------
Total assets 107,256 109,463
------------------------ ------------ -----------
Accounts payable 5,782 8,458
Loans and borrowings 5,126 5,747
------------------------ ------------ -----------
Total liabilities 10,908 14,205
------------------------ ------------ -----------
Related party transactions were as follows.
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
----------------------- -------------- -------------- -------------- --------------
Sales of oil
and oil products 5,182 6,673 15,016 22,708
Other sales 510 329 1,356 1,070
Purchases of
oil and oil products 17,852 15,905 53,294 49,418
Other purchases 637 2,105 3,322 5,540
Loans given 1,279 5,812 13,808 7,681
Loans received 1,553 2,401 3,791 13,734
----------------------- -------------- -------------- -------------- --------------
Note 27. Compensation plan
In December 2012, the Company introduced a compensation plan available to certain members of management for the period from 2013 to 2017, which is based on assigned shares and provides compensation consisting of two parts. The first part represents annual bonuses that are based on the number of assigned shares and amount of dividend per share. The payment of these bonuses is contingent on the Group meeting certain financial KPIs in each financial year. The second part is based upon the Company's common shares appreciation from 2013 to 2017, with rights vesting after the date of the compensation plan's termination. The number of assigned shares is approximately 19 million shares.
For the first part of the share plan the Group recognised a liability based on expected dividends and number of assigned shares. The second part of the share plan was also classified as liability settled. The reporting date fair value of this part of the plan was estimated at 22,368 million RUB, using the Black-Scholes-Merton option-pricing model. The fair value was estimated assuming a risk-free interest rate of 8.89% per annum, an expected dividend yield of 6.84% per annum, an expected time to maturity of one year and one quarter and a volatility factor of 14.99%. The expected volatility factor for the annual weighted average share price was estimated based on the historical volatility of the Company's shares for the previous ten years from 2006 till 2015.
Related to this share plan the Group recognised 5,965 million RUB of compensation expenses during the three months ended 30 September 2016, 647 million RUB of income during the three months ended 30 September 2015, 12,309 million RUB and 2,938 million RUB of compensation expenses during the nine months ended 30 September 2016 and 2015, respectively. At 30 September 2016 and 31 December 2015, 19,298 million RUB and 9,698 million RUB related to this plan are included in "Provisions" of the consolidated statement of financial position, respectively.
At 30 September 2016, there was 5,592 million RUB of total unrecognized compensation cost related to unvested benefits. This cost is expected to be recognized periodically by the Group up to December 2017.
Note 28. Segment information
The Group has the following operating segments - exploration and production; refining, marketing and distribution; corporate and other business segments. These segments have been determined based on the nature of their operations. Management on a regular basis assesses the performance of these operating segments. The exploration and production segment explores for, develops and produces primarily crude oil. The refining, marketing and distribution segment processes crude oil into refined products, purchases, sells and transports crude oil and refined petroleum products, refines and sells chemical products, produces steam and electricity, distributes them and provides related services. The corporate and other business operating segment includes activities of the Company and businesses beyond the Group's traditional operations.
Geographical segments are based on the area of operations and include two segments: Russia and International.
Operating segments
For the three months ended 30 September 2016
Refining,
Exploration marketing Corporate
and production and distribution and other Elimination Consolidated
-------------------- --------------- ----------------- ---------- ----------- ------------
Sales and other
operating revenues
Third parties 31,095 1,269,095 9,298 - 1,309,488
Inter-segment 363,665 17,265 8,791 (389,721) -
-------------------- --------------- ----------------- ---------- ----------- ------------
Total revenues 394,760 1,286,360 18,089 (389,721) 1,309,488
-------------------- --------------- ----------------- ---------- ----------- ------------
Operating expenses 65,681 52,875 5,994 (12,417) 112,133
Selling, general
and administrative
expenses 11,974 31,863 16,044 (7,223) 52,658 Profit (loss) for the period attributable to PJSC LUKOIL shareholders 39,482 33,086 (21,827) 4,062 54,803 EBITDA 108,416 63,644 (18,972) 5,365 158,453 Income tax expense (20,689) Finance income 3,778 Finance costs (11,949) Depreciation, depletion and amortisation (74,790) Profit for the period attributable to PJSC LUKOIL shareholders 54,803 -------------------- --------------- ----------------- ---------- ----------- ------------
For the three months ended 30 September 2015
Refining,
Exploration marketing Corporate
and production and distribution and other Elimination Consolidated
-------------------- --------------- ----------------- ---------- ----------- ------------
Sales and other
operating revenues
Third parties 72,736 1,383,564 7,753 - 1,464,053
Inter-segment 378,172 13,715 13,048 (404,935) -
-------------------- --------------- ----------------- ---------- ----------- ------------
Total revenues 450,908 1,397,279 20,801 (404,935) 1,464,053
-------------------- --------------- ----------------- ---------- ----------- ------------
Operating expenses 67,462 50,176 6,176 (6,981) 116,833
Selling, general
and administrative
expenses 9,783 32,772 5,778 (7,495) 40,838
Profit for
the period
attributable
to PJSC LUKOIL
shareholders 43,870 47,764 54,668 42,091 188,393
EBITDA 146,250 79,651 69,341 40,020 335,262
Income tax
expense (39,351)
Finance income 4,210
Finance costs (11,667)
Depreciation,
depletion and
amortisation (100,061)
Profit for
the period
attributable
to PJSC LUKOIL
shareholders 188,393
-------------------- --------------- ----------------- ---------- ----------- ------------
For the nine months ended 30 September 2016
Refining,
Exploration marketing Corporate
and production and distribution and other Elimination Consolidated
-------------------- --------------- ----------------- ---------- ----------- ------------
Sales and other
operating revenues
Third parties 126,557 3,669,804 29,760 - 3,826,121
Inter-segment 1,057,211 49,248 34,697 (1,141,156) -
-------------------- --------------- ----------------- ---------- ----------- ------------
Total revenues 1,183,768 3,719,052 64,457 (1,141,156) 3,826,121
-------------------- --------------- ----------------- ---------- ----------- ------------
Operating expenses 199,304 157,520 15,518 (33,256) 339,086
Selling, general
and administrative
expenses 31,950 98,560 40,947 (25,674) 145,783
Profit (loss)
for the period
attributable
to PJSC LUKOIL
shareholders 157,476 89,297 (90,554) 3,976 160,195
EBITDA 370,027 173,635 (85,394) 5,383 463,651
Income tax
expense (50,412)
Finance income 11,120
Finance costs (33,418)
Depreciation,
depletion and
amortisation (230,746)
Profit for
the period
attributable
to PJSC LUKOIL
shareholders 160,195
-------------------- --------------- ----------------- ---------- ----------- ------------
For the nine months ended 30 September 2015
Refining,
Exploration marketing Corporate
and production and distribution and other Elimination Consolidated
-------------------- --------------- ----------------- ---------- ----------- ------------
Sales and other
operating revenues
Third parties 199,206 4,160,944 21,174 - 4,381,324
Inter-segment 1,246,112 41,395 41,648 (1,329,155) -
-------------------- --------------- ----------------- ---------- ----------- ------------
Total revenues 1,445,318 4,202,339 62,822 (1,329,155) 4,381,324
-------------------- --------------- ----------------- ---------- ----------- ------------
Operating expenses 193,941 137,418 16,984 (20,001) 328,342
Selling, general
and administrative
expenses 29,871 93,512 24,800 (26,132) 122,051
Profit for
the period
attributable
to PJSC LUKOIL
shareholders 181,624 110,687 33,793 30,068 356,172
EBITDA 458,984 194,924 48,434 23,831 726,173
Income tax
expense (83,043)
Finance income 12,777
Finance costs (34,153)
Depreciation,
depletion and
amortisation (265,582)
Profit for
the period
attributable
to PJSC LUKOIL
shareholders 356,172
-------------------- --------------- ----------------- ---------- ----------- ------------
Geographical segments
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
Sales of crude oil
within Russia 31,177 39,147 75,921 114,379
Export of crude oil
and sales of crude
oil by foreign subsidiaries 326,947 297,857 960,353 1,068,858
Sales of petroleum
products within Russia 183,801 165,075 460,087 445,271
Export of petroleum
products and sales
of petroleum products
by foreign subsidiaries 677,259 865,289 2,042,894 2,485,719
Sales of chemicals
within Russia 10,521 9,330 28,615 18,724
Export of chemicals
and sales of chemicals
by foreign subsidiaries 7,915 10,782 26,877 27,871
Sales of gas and
gas products within
Russia 8,242 9,483 26,062 28,314
Export of gas products
and sales of gas
and gas products
by foreign subsidiaries 18,824 23,691 63,109 72,550
Sales of energy and
related services
within Russia 12,268 11,521 42,946 40,941
Sales of energy and
related services
by foreign subsidiaries 3,859 4,294 10,384 8,503
Other sales within
Russia 12,616 11,492 35,512 30,120
Other export sales
and other sales of
foreign subsidiaries 16,059 16,092 53,361 40,074
----------------------------- ------------- ------------- ------------- -------------
Total sales 1,309,488 1,464,053 3,826,121 4,381,324
----------------------------- ------------- ------------- ------------- -------------
For the three months ended 30 September 2016
Russian
Federation International Elimination Consolidated
------------------------------------ ----------- ------------- ----------- ------------
Sales and other operating
revenues
Third parties 270,875 1,038,613 - 1,309,488
Inter-segment 227,660 576 (228,236) -
------------------------------------ ----------- ------------- ----------- ------------
Total revenues 498,535 1,039,189 (228,236) 1,309,488
------------------------------------ ----------- ------------- ----------- ------------
Operating expenses 80,226 28,368 3,539 112,133
Selling, general and administrative
expenses 31,125 22,600 (1,067) 52,658
Profit (loss) for the period
attributable to PJSC LUKOIL
shareholders 54,093 (3,550) 4,260 54,803
EBITDA 123,831 29,473 5,149 158,453
------------------------------------ ----------- ------------- ----------- ------------
For the three months ended 30 September 2015
Russian
Federation International Elimination Consolidated
------------------------------------ ----------- ------------- ----------- ------------
Sales and other operating
revenues
Third parties 255,067 1,208,986 - 1,464,053
Inter-segment 266,628 1,800 (268,428) -
------------------------------------ ----------- ------------- ----------- ------------
Total revenues 521,695 1,210,786 (268,428) 1,464,053
------------------------------------ ----------- ------------- ----------- ------------
Operating expenses 81,565 35,306 (38) 116,833
Selling, general and administrative
expenses 21,366 20,274 (802) 40,838
Profit for the period attributable
to PJSC LUKOIL shareholders 142,767 3,557 42,069 188,393
EBITDA 221,464 70,832 42,966 335,262
------------------------------------ ----------- ------------- ----------- ------------
For the nine months ended 30 September 2016
Russian
Federation International Elimination Consolidated
------------------------------------ ----------- ------------- ----------- ------------
Sales and other operating
revenues
Third parties 700,827 3,125,294 - 3,826,121
Inter-segment 737,097 1,903 (739,000) -
------------------------------------ ----------- ------------- ----------- ------------
Total revenues 1,437,924 3,127,197 (739,000) 3,826,121
------------------------------------ ----------- ------------- ----------- ------------
Operating expenses 236,085 89,643 13,358 339,086
Selling, general and administrative
expenses 79,999 68,658 (2,874) 145,783
Profit for the period attributable
to PJSC LUKOIL shareholders 153,105 3,727 3,363 160,195
EBITDA 343,040 115,990 4,621 463,651
------------------------------------ ----------- ------------- ----------- ------------
For the nine months ended 30 September 2015
Russian
Federation International Elimination Consolidated
------------------------------------ ----------- ------------- ----------- ------------
Sales and other operating
revenues
Third parties 699,584 3,681,740 - 4,381,324
Inter-segment 915,115 4,557 (919,672) -
------------------------------------ ----------- ------------- ----------- ------------
Total revenues 1,614,699 3,686,297 (919,672) 4,381,324
------------------------------------ ----------- ------------- ----------- ------------
Operating expenses 229,518 97,542 1,282 328,342
Selling, general and administrative
expenses 63,475 61,631 (3,055) 122,051
Profit for the period attributable
to PJSC LUKOIL shareholders 322,641 4,352 29,179 356,172
EBITDA 525,069 173,480 27,624 726,173
------------------------------------ ----------- ------------- ----------- ------------
In the International segment the Group receives the most substantial revenues in Switzerland and the USA.
For the For the For the For the
three months three months nine months nine months
ended ended ended ended
30 September 30 September 30 September 30 September
2016 2015 2016 2015
------------------- ------------- ------------- ------------- -------------
Sales revenues
in Switzerland 584,328 641,921 1,732,717 2,010,827
in the USA 98,983 98,746 309,288 311,244
------------------- ------------- ------------- ------------- -------------
These amounts are attributed to individual countries based on the jurisdiction of subsidiaries making the sale.
Note 29. Fair value
There are the following methods of fair value measurement based on the valuation technique:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly;
Level 3: unobservable inputs.
The following table shows the carrying amounts and fair values of financial assets and financial liabilities included in the consolidated statement of financial position at 30 September 2016 and 31 December 2015.
Fair value
--------------- --------- --------------------------
30 September Carrying Level Level Level
2016 amount 1 2 3 Total
--------------- --------- -------- ------ -------- --------
Financial
assets:
Commodity
derivative
contracts 9,851 - 9,851 - 9,851
Available
for sale
securities 3,768 - 3,768 3,768
--------------- --------- -------- ------ -------- --------
Financial
liabilities:
Commodity
derivative
contracts 8,914 - 8,914 - 8,914
Long-term
debt 787,374 374,631 - 446,146 820,777
--------------- --------- -------- ------ -------- --------
Fair value
--------------- --------- ---------------------------
31 December Carrying Level Level Level
2015 amount 1 2 3 Total
--------------- --------- -------- ------- -------- --------
Financial
assets:
Commodity
derivative
contracts 41,648 - 41,648 - 41,648
Available
for sale
securities 4,045 - - 4,045 4,045
--------------- --------- -------- ------- -------- --------
Financial
liabilities:
Commodity
derivative
contracts 10,827 - 10,827 - 10,827
Long-term
debt 820,493 400,140 - 392,952 793,092
--------------- --------- -------- ------- -------- --------
The fair values of cash and cash equivalents (Level 1), current and long-term accounts receivable (Level 3) are approximately equal to their value as disclosed in the consolidated statement of financial position. The fair value of long-term receivables was determined by discounting with estimated market interest rates for similar financing arrangements. The fair value of long-term loans (Level 3) was determined as a result of discounting using estimated market interest rates for similar financing arrangements. These amounts include all future cash outflows associated with the long-term debt repayments, including the current portion and interest. Market interest rates mean the rates of raising long-term debt by companies with a similar credit rating for similar periods, repayment schedules and similar other main terms. The fair value of bonds (Level 1) was determined based on market quotations at 30 September 2016 and 31 December 2015.
Note 30. Subsequent events
In November 2016, a Group company issued non-convertible bonds totaling $1 billion (63.2 billion RUB). The bonds were placed with a maturity of 10 years and a coupon yield of 4.750% per annum. The proceeds will be used for general corporate purposes, primarily on refinancing of existing debt.
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTLLFVVLFLIVIR
(END) Dow Jones Newswires
November 30, 2016 08:37 ET (13:37 GMT)
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