SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the period ended 07 February 2006
BP p.l.c.
(Translation of registrant's name into English)
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F
--------------- ----------------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No |X|
--------------- ----------------
BP p.l.c.
Group Results
4th Quarter and Full Year 2005
London 7 February 2006
FOR IMMEDIATE RELEASE
RECORD 2005 RESULT, CASH FLOWS AND SHAREHOLDER DISTRIBUTIONS
---------------------------------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 $ million 2005 2004 %
======================= ====================
3,010 6,463 3,685 Profit for the period* 22,341 17,075
Inventory holding
494 (2,053) 747 (gains) losses (3,027) (1,643)
----------------------- --------------------
3,504 4,410 4,432 Replacement cost profit 19,314 15,432 25
======================= ====================
8.71 11.86 12.15 - per ordinary share (pence) 50.23 38.64
16.23 21.04 21.34 - per ordinary share (cents) 91.41 70.71 29
0.97 1.26 1.28 - per ADS (dollar) 5.48 4.24
======================= ====================
Innovene operations have been treated as discontinued operations and
presented accordingly within this document.
o BP's fourth quarter replacement cost profit was $4,432 million compared
with $3,504 million a year ago, an increase of 26%. For the year,
replacement cost profit was $19,314 million compared with $15,432
million, up 25%.
o The fourth quarter result includes a net non-operating charge of $553
millon compared with a net non-operating charge of $1,261 million in the
fourth quarter of 2004. In addition, the fourth quarter 2005 result for
the Refining and Marketing and Gas, Power and Renewables segments
reflects significant volatility arising under IFRS fair value
accounting. Furthermore, the Refining and Marketing result includes a
significant charge in respect of planned restructuring actions. For the
year, the net non-operating charge was $1,754 million compared with a
net charge of $1,072 million for the year 2004.
o The fourth quarter trading environment was stronger than a year ago with
higher oil and gas realizations and higher refining and retail marketing
margins but with lower olefins margins.
o Net cash provided by operating activities for the quarter and year was
$4.2 billion and $26.7 billion, respectively, compared with $5.2 billion
and $23.4 billion a year ago.
o The sale of Innovene to INEOS completed on 16 December 2005.
o The ratio of net debt to net debt plus equity was 17% compared with 22%
a year ago.
o The quarterly dividend, to be paid in March, is 9.375 cents per share
($0.5625 per ADS) compared with 8.50 cents per share a year ago. For the
year, the dividend showed an increase of 21%. In sterling terms, the
quarterly dividend is 5.288 pence per share, compared with 4.522 pence
per share a year ago; for the year the increase was 24%. During the
year, the company repurchased 1,060 million of its own shares at a cost
of $11.6 billion. Notwithstanding shares issued in respect of the TNK-BP
transaction during the year, shares in issue at end 2005 were 4% lower
than a year previously.
BP Group Chief Executive, Lord Browne, said:
"BP's fourth quarter result was particularly hit by the continued
shutdown of our Texas City refinery, during its refurbishment, and
significant non-economic effects of the application of IFRS fair value
accounting. Our 2005 result was a record; this reflects the quality of
our asset base and operations. Innovene has been sold for an attractive
price and earlier than expected. Strong operating cash flows and
proceeds from disposals have enabled record distributions to
shareholders".
* Profit attributable to BP shareholders.
Summary Quarterly Results
Exploration and Production's fourth quarter result was a record and up 38% on a
year ago. This result benefited from higher realizations, partially offset by
the hurricane impact on volumes and associated repair costs, the cost of the
Thunder Horse stability incident, and higher operating and revenue investment
costs.
The Refining and Marketing result reflects the impact of the shutdown of the
Texas City refinery for the whole quarter, due to hurricane Rita, along with
other storm related disruptions, a significant negative impact related to IFRS
fair value accounting and a significant charge in respect of rationalization and
efficiency programmes.
In Gas, Power and Renewables, the result reflects lower contributions from the
gas trading and marketing business. It also includes a positive impact related
to IFRS fair value accounting, in addition to a significant charge related to
embedded derivatives.
Finance costs and Other finance expense was $215 million for the quarter
compared with $181 million in the previous quarter. This reflects higher
interest costs partially offset by higher capitalized interest.
The consolidation adjustment, which removes the margin on sales between segments
in respect of inventory at the period end, was a credit of $234 million in the
fourth quarter, mainly reflecting the changes in supply patterns and inventory
levels due to the shutdown of the Texas City refinery.
The effective tax rate on replacement cost profit of continuing operations was
32.4%.
Capital expenditure was $4.8 billion for the quarter; there were no significant
acquisitions. Disposal proceeds were $9.2 billion, primarily from the sale of
Innovene to INEOS.
Net debt at the end of the quarter was $16.2 billion. The ratio of net debt to
net debt plus equity was 17%.
During the fourth quarter, the company repurchased 332 million of its own
shares, at a cost of $3.7 billion. These shares are held in treasury.
The commentaries above and following are based on replacement cost profit.
The financial information for 2004 has been restated to reflect the following,
all with effect from 1 January 2005: (a) the adoption by the group of
International Financial Reporting Standards (IFRS) (see Note 1); (b) the change
in accounting policy for sales and purchases (see Note 4); (c) the Mardi Gras
pipeline system has been transferred from Exploration and Production to Refining
and Marketing; (d) the aromatics and acetyls operations and the petrochemicals
assets that are integrated with our Gelsenkirchen refinery in Germany have been
transferred from the former Petrochemicals segment to Refining and Marketing;
(e) the olefins and derivatives operations have been transferred from the former
Petrochemicals segment to the Olefins and Derivatives business. The legacy
historical results of other petrochemicals assets that had been divested during
2004 and 2003 are included within Other businesses and corporate; (f) the
Grangemouth and Lavera refineries have been transferred from Refining and
Marketing to the Olefins and Derivatives business; and (g) the Hobbs
fractionator has been transferred from Gas, Power and Renewables to the Olefins
and Derivatives business. The Olefins and Derivatives business is reported
within Other businesses and corporate. This re-organisation was a precursor to
seeking to divest the Olefins and Derivatives business. As indicated in Note 3,
during 2005 we have divested Innovene and shown these activities as discontinued
operations in these accounts. Innovene represented the majority of the Olefins
and Derivatives business.
Non-operating Items
Fourth Quarter
$ million 2005
=======
Exploration and Production (979)
Refining and Marketing 50
Gas, Power and Renewables (307)
Other businesses and corporate (64)
-------
(1,300)
Taxation(a) 421
-------
Continuing operations (879)
Innovene Operations 136
Taxation(a) 190 326
------- -------
Total for all operations (553)
=======
(a) Taxation on non-operating items related to Innovene operations
includes the actual tax effects arising on the loss on re-measurement
to fair value and the sale to INEOS; other non-operating items are tax
effected at 32.4%, the effective tax rate for continuing operations.
Reconciliation of Replacement Cost Profit to Profit for the Period
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 $ million 2005 2004
============================= ================
4,750 6,535 6,567 Exploration and Production 25,491 18,077
1,337 1,858 (160) Refining and Marketing 4,405 5,240
495 314 117 Gas, Power and Renewables 1,009 915
Other businesses and
(245) (452) (403) corporate (1,186) 156
Consolidation adjustments
Unrealized profit
57 (285) 234 in inventory (208) (191)
Net profit on transactions
between continuing and
31 144 128 Innovene operations (a) 527 188
----------------------------- ----------------
RC profit before interest
6,425 8,114 6,483 and tax 30,038 24,385
----------------------------- ----------------
Finance costs and other
(264) (181) (215) finance expense (761) (780)
(1,818) (2,674) (2,029) Taxation(b) (9,473) (7,082)
(59) (68) (93) Minority interest (291) (187)
----------------------------- ----------------
RC profit for continuing
operations attributable
4,284 5,191 4,146 to BP shareholders (c) 19,513 16,336
============================= ================
Inventory holding gains
(losses) for continuing
(493) 1,938 (903) operations 2,644 1,361
----------------------------- ----------------
Profit for the period for
continuing operations
attributable to BP
3,791 7,129 3,243 shareholders 22,157 17,697
Profit (loss) for the period
(781) (666) 442 from Innovene operations(d) 184 (622)
----------------------------- ----------------
Profit for the period
attributable to
3,010 6,463 3,685 BP shareholders 22,341 17,075
============================= ================
RC profit for continuing
operations attributable to
4,284 5,191 4,146 BP shareholders 19,513 16,336
RC profit for Innovene
(780) (781) 286 operations (199) (904)
----------------------------- ----------------
3,504 4,410 4,432 Replacement cost profit 19,314 15,432
============================= ================
(a) In the circumstances of discontinued operations, Accounting Standards
require that the profits earned by the discontinued operations, in
this case the Innovene operations, on sales to the continuing
operations be eliminated on consolidation from the discontinued
operations, and attributed to the continuing operations and vice
versa. This adjustment has two offsetting elements: the net margin on
crude refined by Innovene as substantially all crude for their
refineries is supplied by BP and most of the refined products
manufactured are taken by BP; and the margin on sales of feedstock
from BP's US refineries to Innovene's manufacturing plants. The
profits attributable to individual segments are not affected by this
adjustment. Neither does this representation indicate the profits
earned by continuing or Innovene operations, as if they were stand-
alone entities, for past periods or likely to be earned in future
periods.
(b) The fourth quarter effective tax rate on continuing operations of
32.4% is calculated as the tax charge ($2,029 million) divided by RC
profit for continuing operations after interest ($6,483-$215=$6,268
million).
(c) Replacement cost profit reflects the current cost of supplies. The
replacement cost profit for the period is arrived at by excluding from
profit inventory holding gains and losses. BP uses this measure to
assist investors to assess BP's performance from period to period.
Replacement cost profit is not a recognized GAAP measure. Operating
cash flow is calculated from the starting point of profit before
taxation which includes inventory holding gains and losses. Operating
cash flow also reflects working capital movements including
inventories, trade and other receivables and trade and other payables.
The carrying value of these working capital items will change for
various reasons, including movements in oil, gas and products prices.
(d) See further detail in Note 3.
Per Share Amounts
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
================================ =====================
Results for the
period ($m)
3,010 6,463 3,685 Profit* 22,341 17,075
3,504 4,410 4,432 Replacement cost profit 19,314 15,432
-------------------------------- --------------------
Shares in issue at
21,525,978 20,984,851 20,657,045 period end (thousand)20,657,045 21,525,978
- ADS equivalent
3,587,663 3,497,475 3,442,841 (thousand) 3,442,841 3,587,663
Average number of
shares outstanding
21,607,872 21,007,316 20,792,896 (thousand) 21,125,902 21,820,535
- ADS equivalent
3,601,312 3,501,219 3,465,483 (thousand) 3,520,984 3,636,756
-------------------------------- ---------------------
Per ordinary share
(cents)
14.00 30.75 17.90 Profit for the period 105.74 78.24
RC profit
16.23 21.04 21.34 for the period 91.41 70.71
Per ADS (cents)
84.00 184.50 107.40 Profit for the period 634.44 469.44
RC profit
97.38 126.24 128.04 for the period 548.46 424.26
-------------------------------- ---------------------
* Profit attributable to BP shareholders.
Exploration and Production
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 $ million 2005 2004
======================= ==============
4,747 6,536 6,575 Profit before interest and tax(a) 25,508 18,087
3 (1) (8) Inventory holding (gains) losses (17) (10)
----------------------- --------------
Replacement cost profit
4,750 6,535 6,567 before interest and tax 25,491 18,077
======================= ==============
Results include:
Impairment and gain (loss) on sale of
(236) (106) 62 businesses and fixed assets 893 (469)
- - - Environmental and other provisions - -
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on
- (53) (801) embedded derivatives (1,688) -
8 12 (240) Other (203) (27)
----------------------- --------------
(228) (147) (979) Total non-operating items (998) (496)
======================= ==============
258 177 208 Exploration expense 684 637
Of which:
151 93 81 Exploration expenditure written off 305 274
======================= ==============
Production (Net of Royalties) (b)
2,396 2,313 2,400 Crude oil (mb/d) 2,389 2,340
197 159 164 Natural gas liquids (mb/d) 173 191
2,593 2,472 2,564 Total liquids (mb/d)(c) 2,562 2,531
8,714 7,841 8,458 Natural gas (mmcf/d) 8,424 8,503
4,095 3,824 4,022 Total hydrocarbons (mboe/d)(d) 4,014 3,997
======================= ==============
Average realizations (e)
41.01 56.83 53.92 Crude oil ($/bbl) 50.27 36.45
31.20 36.70 39.29 Natural gas liquids ($/bbl) 33.23 26.75
39.88 54.80 52.44 Total liquids ($/bbl) 48.51 35.39
4.28 4.75 6.24 Natural gas ($/mcf) 4.90 3.86
32.64 41.68 44.56 Total hydrocarbons ($/boe) 38.86 29.20
======================= ==============
Average oil marker prices($/bbl)
43.85 61.63 56.87 Brent 54.48 38.27
48.29 63.18 60.01 West Texas Intermediate 56.58 41.49
42.62 60.91 57.89 Alaska North Slope US West Coast 53.55 38.96
======================= ==============
Average natural gas marker prices
7.07 8.53 13.00 Henry Hub gas price ($/mmbtu)(f) 8.65 6.13
UK Gas - National
28.51 29.26 65.30 Balancing Point (p/therm) 40.71 24.39
======================= ==============
(a) Profit from continuing operations and includes profit after interest
and tax of equity-accounted entities.
(b) Includes BP's share of production of equity-accounted entities.
(c) Crude oil and natural gas liquids.
(d) Natural gas is converted to oil equivalent at 5.8 billion cubic feet =
1 million barrels.
(e) Based on turnover of consolidated subsidiaries only - this excludes
equity-accounted entities.
(f) Henry Hub First of the Month Index.
Exploration and Production
The replacement cost profit before interest and tax for the fourth quarter was
$6,567 million, a record result, up 38% from the fourth quarter of 2004. This
result benefited from higher realizations, partially offset by the hurricane
impact on volumes and associated repair costs, the cost of the Thunder Horse
stability incident, and higher operating and revenue investment costs.
Included in the result for the quarter were net non-operating charges of $979
million, primarily arising from fair value losses of $801 million on embedded
derivatives relating to North Sea gas contracts, and a charge of $265 million on
the cancellation of an intra-group gas supply contract (which is offset by a
gain in our Gas, Power and Renewables segment). The corresponding quarter of
2004 contained net non-operating charges of $228 million.
The replacement cost profit before interest and tax for the full year at $25,491
million was a record, up 41% on a year ago. This reflects higher realizations,
partly offset by costs associated with the hurricanes and Thunder Horse, and
higher operating and revenue investment costs. The year's result included net
non-operating charges of $998 million primarily arising from fair value losses
on embedded derivatives of $1,688 million, net gains on sales of assets of
$1,159 million, mainly from the sale of Ormen Lange in the first quarter, and
net impairment charges of $266 million. The full year results in 2004 included
net non-operating charges of $496 million.
Production for the quarter at 4,022 mboe/d was 2% lower than in the fourth
quarter of 2004, principally as a result of the lost production owing to the
hurricane damage in the Gulf of Mexico.
Total production for the year was 4,014 mboe/d, compared with 3,997 mboe/d in
2004. Increases in production in our New Profit Centres and TNK-BP were offset
by the effect of the hurricanes, higher planned maintenance shutdowns,
anticipated decline and operational issues in our Existing Profit Centres.
We estimate the opportunity losses caused by the hurricanes in the fourth
quarter and year to be in the region of $950 million for the fourth quarter and
$1,600 million for the full year.
Projects in our New Profit Centres are progressing well. During the quarter the
West Azeri project in Azerbaijan achieved first production four months ahead of
schedule, and good progress is being made on the completion of the BTC pipeline
with the first lifting at Ceyhan in Turkey expected in the second quarter of
2006. In Trinidad, Atlantic LNG Train 4 started production in mid December with
the Cannonball gas development expected to start production in the first quarter
of 2006. Repairs and construction of the Thunder Horse platform in the Gulf of
Mexico are proceeding offshore, and production is expected to start in the
second half of 2006. In Russia, TNK-BP disposed of non-core producing assets in
the Saratov region, along with the Orsk refinery. In our Existing Profit
Centres, production commenced from the Rhum and Farragon fields in the North
Sea.
BP's proved reserve replacement ratio, on a UK SORP basis, was 100% on a
combined basis of subsidiaries and equity-accounted entities, excluding
acquisitions and disposals. This is the thirteenth consecutive year that we have
at least replaced our production.
Refining and Marketing
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 $ million 2005 2004
======================= =============
Profit (loss) before interest
811 3,697 (1,068) and tax(a) 6,942 6,544
526 (1,839) 908 Inventory holding (gains) losses (2,537) (1,304)
----------------------- -------------
Replacement cost profit (loss)
1,337 1,858 (160) before interest and tax 4,405 5,240
======================= =============
Results include:
Impairment and gain (loss) on sale
(333) (14) 50 of businesses and fixed assets 84 (456)
- (140) - Environmental and other provisions (140) (206)
Restructuring, integration and
(32) - - rationalization costs - (32)
Fair value gain (loss) on
- - - embedded derivatives - -
- - - Other (733) -
----------------------- -------------
(365) (154) 50 Total non-operating items (789) (694)
======================= =============
Refinery throughputs(b) (mb/d)
218 202 144 UK 180 208
601 687 664 Rest of Europe 667 684
1,436 1,328 942 USA 1,255 1,373
296 296 288 Rest of World 297 342
----------------------- -------------
2,551 2,513 2,038 Total throughput 2,399 2,607
======================= =============
96.5 92.6 90.9 Refining availability (%) 92.9 95.4
======================= =============
Oil sales volumes (mb/d)
Refined products
335 369 358 UK 355 322
1,363 1,402 1,343 Rest of Europe 1,354 1,360
1,664 1,674 1,559 USA 1,634 1,682
627 599 573 Rest of World 599 638
----------------------- --------------
3,989 4,044 3,833 Total marketing sales 3,942 4,002
2,194 2,010 1,448 Trading/supply sales 1,946 2,396
----------------------- --------------
6,183 6,054 5,281 Total refined product sales 5,888 6,398
2,569 2,803 2,710 Crude oil 2,804 2,691
----------------------- --------------
8,752 8,857 7,991 Total oil sales 8,692 9,089
======================= ==============
Global Indicator Refining Margin(c)
($/bbl)
4.72 7.78 5.51 NWE 5.47 4.28
5.52 17.12 11.64 USGC 11.40 7.15
1.65 13.40 7.91 Midwest 8.19 5.08
10.36 17.57 8.90 USWC 13.49 11.27
8.02 6.52 4.42 Singapore 5.56 4.94
5.69 12.35 7.60 BP Average 8.60 6.31
======================= ==============
Chemicals production (kte)
316 284 281 UK 1,199 1,302
779 771 811 Rest of Europe 3,123 3,189
1,122 890 676 USA 3,891 4,643
990 1,115 1,049 Rest of World 4,154 4,016
----------------------- --------------
3,207 3,060 2,817 Total production 12,367 13,150
======================= ==============
(a) Profit from continuing operations and includes profit after interest
and tax of equity-accounted entities.
(b) Refinery throughputs exclude the Grangemouth and Lavera refineries
which are now treated as discontinued operations within Other
businesses and corporate.
(c) The Global Indicator Refining Margin (GIM) is the average of six
regional indicator margins weighted for BP's crude refining capacity
in each region. Each regional indicator margin is based on a single
representative crude with product yields characteristic of the typical
level of upgrading complexity. The regional indicator margins may not
be representative of the margins achieved by BP in any period because
of BP's particular refinery configurations and crude and product
slate. The GIM data shown above excludes the Grangemouth and Lavera
refineries.
Refining and Marketing
The replacement cost loss before interest and tax for the fourth quarter was
$160 million compared with a profit of $1,337 million for the same period in
2004. The replacement cost profit before interest and tax for the year was
$4,405 million compared with $5,240 million in 2004.
The reduction in the fourth quarter result compared with a year ago was driven
by three significant factors. Firstly, the impact of the shutdown, throughout
the quarter, of the Texas City refinery, along with other storm-related supply
disruptions to a number of our US-based businesses. Compared with the fourth
quarter of 2004, the reduction in replacement cost profit before interest and
tax in respect of these disruptions was some $870 million; compared with the
third quarter of 2005 the reduction was $670 million. Secondly, the fourth
quarter's result was adversely impacted by $454 million of accounting effects.
This resulted from a combination of changes in both inventory levels and the
forward trajectory of market prices across the quarter, and compares to a net
gain of $114 million in the third quarter of 2005. The third factor was a charge
of $467 million in respect of rationalization and efficiency programmes, mainly
across our marketing activities in Europe. This has not been identified as a
non-operating item.
The fourth quarter's result includes a net non-operating gain of $50 million
primarily from retail divestments. In comparison, the net charge for
non-operating items in the fourth quarter of 2004 was $365 million.
Supply disruptions in the USA and market uncertainty continued into the fourth
quarter of 2005. The average refining Global Indicator Margin (GIM) fell sharply
from the record levels of last quarter but was higher than those of the
equivalent quarter last year. Retail marketing margins recovered strongly from
the third quarter and were above those of the equivalent quarter last year,
although margins in our other marketing businesses were lower. In addition to
the impact of the three significant factors identified above, the fourth quarter
result also reflects the impact of lower refining availability compared to the
equivalent quarter last year.
Refining throughputs for the quarter were 2,038 mb/d, some 513 mb/d lower than
in the fourth quarter of 2004 due principally to the complete shut down of the
Texas City refinery late in the third quarter. Marketing volumes were 3,833 mb/
d, lower than those in the same quarter last year due primarily to
hurricane-related supply disruptions in the USA.
The full year result of $4,405 million was also impacted by the factors outlined
above: the Texas City refinery outage, adverse impacts related to fair value
accounting and costs associated with the rationalization and efficiency
programmes.
The full year average GIM was higher than that for the full year 2004, and
consistent with the increase in BP's actual realized refining margin. Retail
marketing margins, despite the recovery in the fourth quarter, were
significantly lower than those for the full year 2004, although partly offset by
increases in our other marketing businesses. Our purchased energy costs and
operating and investment costs were higher year-on-year due to refinery repair,
manufacturing integrity costs and the initial charges for the rationalization
and efficiency programmes mentioned above.
The full year result includes a charge of $789 million for non-operating items
compared with a charge of $694 million in 2004. Included in the 2005 charge is
$700 million in respect of fatality and personal injury claims associated with
the Texas City incident and charges in respect of new, and revisions to
existing, environmental and other provisions.
The total opportunity loss in respect of the Texas City refinery shutdown and
storms, at prevailing margins, is estimated at around $1,800 million for the
year.
Gas, Power and Renewables
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 $ million 2005 2004
======================= =============
523 412 114 Profit before interest and tax(a) 1,104 954
(28) (98) 3 Inventory holding (gains) losses (95) (39)
----------------------- -------------
Replacement cost profit
495 314 117 before interest and tax 1,009 915
======================= =============
Results include:
Impairment and gain (loss) on sale
40 (2) (26) of businesses and fixed assets 55 56
- 6 - Environmental and other provisions 6 -
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss)
- 91 (546) on embedded derivatives (346) -
- - 265 Other 265 -
----------------------- -------------
40 95 (307) Total non-operating items (20) 56
======================= =============
(a) Profit from continuing operations and includes profit after interest
and tax of equity-accounted entities.
The replacement cost profit before interest and tax for the fourth quarter and
full year was $117 million and $1,009 million respectively, compared with $495
million and $915 million a year ago. Non-operating items for the fourth quarter
include fair value losses on embedded derivatives of $546 million and $265
million compensation received on the cancellation of an intra-group gas supply
contract (which is offset by a loss in our Exploration and Production segment).
The fourth quarter result is lower than the same period in 2004 primarily due to
lower contributions from the gas trading and marketing business and the net
non-operating charge described above, partially offset by a $289 million
positive impact related to IFRS fair value accounting. The full year result is
higher than in 2004 reflecting higher contributions from the operating
businesses.
Other Businesses and Corporate
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 $ million 2005 2004
======================= =============
Profit (loss) before
(237) (452) (403) interest and tax(a) (1,191) 164
(8) - - Inventory holding (gains) losses 5 (8)
----------------------- -------------
Replacement cost profit (loss)
(245) (452) (403) before interest and tax (b) (1,186) 156
======================= =============
Results include:
Impairment and gain (loss) on sale
8 4 - of businesses and fixed assets 38 1,164
- (296) (4) Environmental and other provisions (278) (283)
Restructuring, integration and
(85) (6) (57) rationalization costs (134) (102)
Fair value gain (loss) on
- 8 (3) embedded derivatives (13) -
66 - - Other 3 66
----------------------- -------------
(11) (290) (64) Total non-operating items (384) 845
======================= =============
(a) Profit from continuing operations and includes profit after interest
and tax of equity-accounted entities.
(b) Includes the portion of Olefins and Derivatives not included in the
sale of Innovene to INEOS. This includes the equity-accounted
investments in China and Malaysia that were part of Olefins and
Derivatives.
Other businesses and corporate comprises Finance, the group's aluminium asset,
interest income and costs relating to corporate activities. The group's
interests in PetroChina and Sinopec were divested in early 2004. The fourth
quarter's result includes a net charge of $64 million in respect of
non-operating items.
Dividends Payable
June, September,
March December March December and March
2005 2005 2006 2005/06 2004/05
============================ ===================
Dividends per ordinary share
8.50 8.925 9.375 cents 35.725 29.45
4.522 5.061 5.288 pence 19.918 16.099
51.0 53.55 56.25 Dividends per ADS (cents) 214.35 176.70
---------------------------- -------------------
BP today announced a dividend of 9.375 cents per ordinary share to be paid in
March. Holders of ordinary shares will receive 5.288 pence per share and holders
of American Depository Receipts (ADRs) $0.5625 per ADS share. The dividend is
payable on 13 March to shareholders on the register on 24 February. Participants
in the Dividend Reinvestment Plan (DRIP) or the DRIP facility in the US Direct
Access Plan will receive the dividend in the form of shares, also on 13 March.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
"World economic growth has continued at near trend rates. In addition to
sustained growth in the US and Asia, there has been an acceleration of activity
in Europe; the near-term global outlook appears solid.
"Crude oil prices averaged $56.87 per barrel (Dated Brent) in the fourth
quarter, a decline of nearly $5 per barrel from the third quarter average but
more than $13 per barrel above the same period last year. Prices weakened in
face of ample inventories and relatively mild weather in the early part of the
fourth quarter, and despite large production losses from hurricanes Katrina and
Rita. Prices rebounded in December with the onset of colder weather and have
been sustained above $60 in 2006. Oil prices are expected to remain strong but
remain dependent upon OPEC production levels and geopolitical concerns.
"US natural gas prices averaged $13/mmbtu (Henry Hub first of month index) in
the fourth quarter, up nearly $4.50 per mmbtu versus the third quarter. Lost
supply following hurricanes Katrina and Rita and the onset of the winter heating
season pushed prices above distillate parity for most of December. In recent
weeks prices have traded closer to parity with residual fuel oil. US gas prices
are expected to track oil prices but remain vulnerable to weather-related price
spikes in the months ahead.
"UK gas prices (National Balancing Point) more than doubled in the fourth
quarter to 65.3 pence per therm from 29.3 pence per therm in the third quarter
in face of concerns about gas availability through the winter. Prompt prices
have recently eased but remain volatile. Supplies are expected to be adequate in
the face of normal winter weather.
"Average global refining margins softened to $7.60/bbl in the fourth quarter.
The disruptions caused by last autumn's hurricanes eased during the quarter as
new sources of product supply were accessed. Oil product stocks currently appear
adequate to meet winter demand and global margins have softened further during
2006 to date. However, margin spikes are still possible during extended periods
of cold weather and a heavier than normal maintenance programme.
"During the fourth quarter, retail margins benefited from falling product prices
particularly in the first two months of the quarter. During December and so far
in 2006, a rise in wholesale gasoline and crude prices is evident. Marketing
margins are expected to remain volatile.
"Following a comprehensive refurbishment, the steam system at the Texas City
refinery was successfully recommissioned in December 2005. Initial production is
expected to commence in the first quarter, with further units restarting in a
phased programme, primarily in the second and third quarters.
"Our strategy is unchanged. We continue to execute it with discipline and focus.
Our ability to capture the benefit of current prices and margin strength
underpins continued dividend growth and continuing share buybacks subject to
market conditions and constraints. Capital expenditure excluding acquisitions
for the year was about $14 billion and is expected to be around $15 billion in
2006 with divestments in the region of $3 billion."
----------------------------------------------------------------------
The foregoing discussion, in particular the statements under "Outlook",
contains forward looking statements particularly those regarding first
lifting of oil from the BTC pipeline, the start-up of production from
the Cannonball gas development, the timing of production from the
Thunder Horse platform, world economic growth, oil prices, US and UK
gas prices and supplies, oil product stocks, margins, production at
Texas City, dividends and share buy-backs and capital expenditure. By
their nature, forward looking statements involve risks and
uncertainties and actual results may differ from those expressed in
such statements depending on a variety of factors including the
following: the timing of bringing new fields on stream; industry
product supply; demand and pricing; currency exchange rates;
operational problems; general economic conditions including
inflationary pressures; political stability and economic growth in
relevant areas of the world; changes in governmental regulations;
exchange rate fluctuations; development and use of new technology; the
actions of competitors; natural disasters and other changes in business
conditions; prolonged adverse weather conditions; wars and acts of
terrorism or sabotage; and other factors discussed in this
Announcement. For more information you should refer to our Annual
Report and Accounts 2004 and our 2004 Annual Report on Form 20-F filed
with the US Securities and Exchange Commission.
----------------------------------------------------------------------
BP p.l.c. and Subsidiaries
Summarized Group Income Statement
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Sales and other operating
53,343 69,310 64,708 revenues (Notes 4 and 5) 249,465 199,876
Earnings from jointly controlled
358 1,020 835 entities - after interest and tax 3,083 1,818
Earnings from associates - after
130 112 133 interest and tax 460 462
230 113 229 Interest and other revenues 613 615
----------------------- --------------
54,061 70,555 65,905 Total revenues 253,621 202,771
Gain on sale of businesses and
273 30 210 fixed assets 1,538 1,685
----------------------- --------------
54,334 70,585 66,115 Total revenues and other income 255,159 204,456
36,210 49,345 45,541 Purchases 172,699 135,907
Production and manufacturing
4,420 4,590 6,118 expenses 21,092 17,330
647 834 830 Production and similar taxes (Note 6)3,010 2,149
Depreciation, depletion and
2,430 2,041 2,351 amortization 8,771 8,529
Impairment and losses on sale of
796 148 124 businesses and fixed assets 468 1,390
258 177 208 Exploration expense (Note 6) 684 637
Distribution and administration
3,641 3,444 4,013 expenses 13,706 12,768
Fair value (gain) loss on embedded
- (46) 1,350 derivatives 2,047 -
----------------------- --------------
Profit before interest and
taxation from continuing
5,932 10,052 5,580 operations 32,682 25,746
143 144 172 Finance costs (Note 7) 616 440
121 37 43 Other finance expense (Note 8) 145 340
----------------------- --------------
Profit before taxation
5,668 9,871 5,365 from continuing operations 31,921 24,966
Taxation (includes overseas
Taxation of $9,082 million,
1,818 2,674 2,029 2004 $5,461 million) 9,473 7,082
----------------------- --------------
3,850 7,197 3,336 Profit from continuing operations 22,448 17,884
Profit (loss) from Innovene
(781) (666) 442 operations (Note 3) 184 (622)
----------------------- --------------
3,069 6,531 3,778 Profit for the period 22,632 17,262
======================= ==============
Attributable to:
3,010 6,463 3,685 BP shareholders 22,341 17,075
59 68 93 Minority interest 291 187
----------------------- --------------
3,069 6,531 3,778 22,632 17,262
======================= ==============
Earnings per share - cents
Profit for the period
attributable to BP shareholders
14.00 30.75 17.90 Basic 105.74 78.24
13.75 30.54 17.68 Diluted 104.52 76.87
Profit from continuing operations
Attributable to BP shareholders
17.57 33.87 15.82 Basic 104.87 81.09
17.26 33.62 15.62 Diluted 103.66 79.66
======================= ==============
Summarized Group Balance Sheet
31 December 31 December
2005 2004
=========================
$ million
Non-current assets
Property, plant and equipment 85,947 93,092
Goodwill 10,371 10,857
Other intangible assets 4,772 4,205
Investments in jointly controlled entities 13,556 14,556
Investments in associates 6,217 5,486
Other investments 967 394
---------------------
Fixed assets 121,830 128,590
Loans 821 811
Other receivables 770 429
Derivative financial instruments 3,652 898
Prepayments and accrued income 1,269 354
Defined benefit pension plan surplus 3,282 2,105
---------------------
131,624 133,187
---------------------
Current assets
Loans 132 193
Inventories 19,760 15,645
Trade and other receivables 40,902 37,099
Derivative financial instruments 9,726 5,317
Prepayments and accrued income 1,598 1,671
Current tax receivable 212 159
Cash and cash equivalents 2,960 1,359
---------------------
75,290 61,443
---------------------
Total assets 206,914 194,630
=====================
Current liabilities
Trade and other payables 42,136 38,540
Derivative financial instruments 9,083 5,074
Accruals and deferred income 5,970 4,482
Finance debt 8,932 10,184
Current tax payable 4,274 4,131
Provisions 1,102 715
---------------------
71,497 63,126
---------------------
Non-current liabilities
Other payables 1,935 3,581
Derivative financial instruments 3,696 158
Accruals and deferred income 3,164 699
Finance debt 10,230 12,907
Deferred tax liabilities 16,443 16,701
Provisions 9,954 8,884
Defined benefit pension plan and other
post-retirement benefit plan deficits 9,230 10,339
---------------------
54,652 53,269
---------------------
Total liabilities 126,149 116,395
---------------------
Net assets 80,765 78,235
=====================
Equity
BP shareholders' equity 79,976 76,892
Minority interest 789 1,343
---------------------
80,765 78,235
=====================
Movement in BP Shareholders' Equity
Movement in BP shareholders' equity: $ million
At 31 December 2004 76,892
Adoption of IAS 39 (243)
------
As restated at 1 January 2005 76,649
Profit for the year 22,341
Distribution to shareholders (7,359)
Currency translation differences (net of tax) (2,479)
Exchange differences on translation of foreign operations
transferred to loss on sale (net of tax) (220)
Actuarial gain on pension and other post-retirement
benefits plans (net of tax) 619
Repurchase of ordinary share capital (11,597)
Issue of ordinary share capital for employee share schemes 534
Issue of ordinary share capital for TNK-BP 1,250
Purchase of shares by ESOP trusts (251)
Share-based payment accrual (net of tax) 412
Available-for-sale investments (net of tax) 190
Cash flow hedges (net of tax) (113)
------
At 31 December 2005 79,976
======
Summarized Group Cash Flow Statement
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Operating activities
Profit before taxation from
5,668 9,871 5,365 continuing operations 31,921 24,966
Adjustments to reconcile profits
before tax to net cash provided by
operating activities
151 93 81 Exploration expenditure written off 305 274
Depreciation, depletion and
2,430 2,041 2,351 amortization 8,771 8,529
Impairment and (gain) loss on sale
523 118 (86) of businesses and fixed assets (1,070) (295)
Earnings from jointly controlled
(488) (1,132) (968) entities and associates (3,543) (2,280)
Dividends received from jointly
756 893 844 controlled entities and associates 2,833 2,199
(3,098) (5,718) (4,171) Working capital and other movements(13,466) (9,346)
----------------------- ---------------
Net cash provided by operating
activities of continuing
5,942 6,166 3,416 operations 25,751 24,047
Net cash provided by (used in)
operating activities of
(785) 205 823 Innovene operations 970 (669)
----------------------- ---------------
Net cash provided by
5,157 6,371 4,239 operating activities 26,721 23,378
----------------------- ---------------
Investing activities
(3,805) (3,069) (3,476) Capital expenditure (12,281)(12,286)
(1,489) - (60) Acquisitions, net of cash acquired (60) (1,503)
Investment in jointly controlled
(134) (2) (132) entities (185) (1,648)
(190) (82) (252) Investment in associates (619) (942)
Proceeds from disposal of
894 226 825 fixed assets 2,803 4,236
- - 8,397 Proceeds from disposal of businesses 8,397 725
84 11 32 Proceeds from loan repayments 123 87
- - 93 Other 93 -
----------------------- ---------------
Net cash provided by (used in)
(4,640) (2,916) 5,427 investing activities (1,729)(11,331)
----------------------- ---------------
Financing activities
(1,942) (3,661) (3,687) Net repurchase of shares (11,315) (7,208)
900 497 685 Proceeds from long-term financing 2,475 2,675
(921) (420) (1,197) Repayments of long-term financing (4,820) (2,204)
Net increase (decrease) in short-
2,529 2,983 (2,423) term debt (1,457) (24)
(1,535) (1,871) (1,856) Dividends paid - BP shareholders (7,359) (6,041)
(8) (87) (405) - Minority interest (827) (33)
----------------------- ---------------
Net cash used in financing
(977) (2,559) (8,883) activities (23,303)(12,835)
----------------------- ---------------
Currency translation differences
relating to cash and cash
78 (74) (5) equivalents (88) 91
----------------------- ---------------
Increase (decrease) in cash and
(382) 822 778 cash equivalents 1,601 (697)
Cash and cash equivalents at
1,741 1,360 2,182 beginning of period 1,359 2,056
----------------------- ---------------
Cash and cash equivalents at
1,359 2,182 2,960 end of period 2,960 1,359
======================= ===============
Summarized Group Cash Flow Statement
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Working capital and other movements
(129) (86) (228) Interest receivable (479) (284)
193 81 208 Interest received 401 331
143 144 172 Interest payable 616 440
(227) (384) (292) Interest paid (1,127) (698)
121 37 43 Other finance expense 145 340
68 66 56 Share-based payments 278 224
Net operating charge for pensions and
other post-retirement benefits,
(54) (21) (398) less contributions (435) (84)
Net charge for provisions,
(364) 440 (284) less payments 600 (110)
127 (3,737) (318) (Increase) decrease in inventories (6,638) (3,182)
(Increase) decrease in trade and
(4,160)(10,116) (386) other receivables (16,427)(10,225)
Increase (decrease) in trade and
3,580 10,425 300 other payables 18,628 10,290
(2,396) (2,567) (3,044) Income taxes paid (9,028) (6,388)
----------------------- ---------------
(3,098) (5,718) (4,171) (13,466) (9,346)
======================= ===============
Group Statement of Recognized Income and Expense
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
2,424 216 (308) Currency translation differences (2,490) 2,283
Exchange gain on translation of
foreign operations transferred to
gain or loss on sale of businesses
- - (315) and fixed assets (315) (78)
Actuarial gain relating to pensions
107 - 975 and other post-retirement benefits 975 107
- 47 236 Available-for-sale investments 262 -
- (11) (5) Cash flow hedges (176) -
Unrealized gain on acquisition of
further investment in equity-
94 - - accounted investments - 94
(52) (17) (295) Taxation (259) (73)
----------------------- ---------------
Net income recognized directly
2,573 235 288 in equity (2,003) 2,333
3,069 6,531 3,778 Profit for the period 22,632 17,262
----------------------- ---------------
Total recognized income and expense
5,642 6,766 4,066 relating to the year 20,629 19,595
Change in accounting policy -
adoption of IAS 32 and 39 on
- - - 1 January 2005 (243) -
----------------------- ---------------
Total recognized income and expense
5,642 6,766 4,066 since last annual accounts 20,386 19,595
======================= ===============
Attributable to:
5,583 6,698 3,973 BP shareholders 20,095 19,408
59 68 93 Minority interest 291 187
----------------------- ---------------
5,642 6,766 4,066 20,386 19,595
======================= ===============
Capital Expenditure and Acquisitions
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
Exploration and Production
207 221 211 UK 821 762
94 50 79 Rest of Europe 197 255
1,060 930 1,001 USA 3,870 3,913
1,237 1,292 1,671 Rest of World (a) 5,349 6,078
----------------------- -------------
2,598 2,493 2,962 10,237 11,008
----------------------- -------------
Refining and Marketing
186 65 203 UK 408 411
248 99 291 Rest of Europe 568 599
485 282 535 USA 1,226 1,314
301 115 336 Rest of World 570 495
----------------------- -------------
1,220 561 1,365 2,772 2,819
----------------------- -------------
Gas, Power and Renewables
154 3 10 UK 30 166
12 4 15 Rest of Europe 26 19
42 22 42 USA 96 80
117 10 57 Rest of World 83 259
----------------------- -------------
325 39 124 235 524
----------------------- -------------
Other businesses and corporate
244 92 90 UK 339 403
880 40 71 Rest of Europe 189 1,024
527 29 131 USA 277 698
74 3 47 Rest of World 100 175
----------------------- -------------
1,725 164 339 905 2,300
----------------------- -------------
5,868 3,257 4,790 14,149 16,651
======================= =============
By geographical area
791 381 514 UK 1,598 1,742
1,234 193 456 Rest of Europe 980 1,897
2,114 1,263 1,709 USA 5,469 6,005
1,729 1,420 2,111 Rest of World (a) 6,102 7,007
----------------------- -------------
5,868 3,257 4,790 14,149 16,651
======================= =============
Included above:
1,482 - 60 Acquisitions and asset exchanges 211 2,841
1,539 103 140 Innovene operations 497 1,915
======================= =============
(a) Year 2004 included $1,354 million investment in TNK's interest in
Slavneft within TNK-BP.
Exchange rates
US dollar/sterling average rate
1.86 1.78 1.75 for the period 1.82 1.83
1.92 1.76 1.73 US dollar/sterling period-end rate 1.73 1.92
US dollar/euro average rate
1.29 1.22 1.19 for the period 1.24 1.24
1.36 1.20 1.18 US dollar/euro period-end rate 1.18 1.36
======================= =============
Analysis of Profit Before Interest and Tax
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
Exploration and Production
998 939 (295) UK 2,129 3,453
222 301 398 Rest of Europe 2,321 837
1,597 2,071 2,972 USA 9,492 6,807
1,930 3,225 3,500 Rest of World 11,566 6,990
----------------------- -------------
4,747 6,536 6,575 25,508 18,087
----------------------- -------------
Refining and Marketing
(395) 316 (588) UK (594) (627)
353 1,122 (266) Rest of Europe 2,673 2,300
619 1,701 (307) USA 3,514 3,616
234 558 93 Rest of World 1,349 1,255
----------------------- -------------
811 3,697 (1,068) 6,942 6,544
----------------------- -------------
Gas, Power and Renewables
158 (17) (159) UK 64 84
(3) 4 (19) Rest of Europe (17) (31)
102 403 132 USA 746 418
266 22 160 Rest of World 311 483
----------------------- -------------
523 412 114 1,104 954
----------------------- -------------
Other businesses and corporate
207 (144) (141) UK (673) (217)
(132) 11 (124) Rest of Europe (79) (134)
(197) (361) (22) USA (405) (782)
(115) 42 (116) Rest of World (34) 1,297
----------------------- -------------
(237) (452) (403) (1,191) 164
----------------------- -------------
5,844 10,193 5,218 32,363 25,749
57 (285) 234 Unrealized profit in inventory (208) (191)
Net profit on transactions between
31 144 128 continuing and Innovene operations 527 188
----------------------- -------------
5,932 10,052 5,580 Total for continuing operations 32,682 25,746
----------------------- -------------
Innovene operations
(71) (289) 490 UK 423 (170)
(468) (88) (1) Rest of Europe 406 14
(311) (220) (42) USA (166) (259)
(122) (28) 21 Rest of World 5 (111)
----------------------- -------------
(972) (625) 468 668 (526)
Net profit on transactions between
(31) (144) (128) continuing and Innovene operations (527) (188)
----------------------- -------------
(1,003) (769) 340 Total for Innovene operations 141 (714)
----------------------- -------------
4,929 9,283 5,920 Total for period 32,823 25,032
======================= ==============
By geographical area
1,082 1,138 (1,039) UK 1,167 2,875
500 1,523 31 Rest of Europe 5,206 3,121
2,035 3,543 2,974 USA 13,139 9,725
2,315 3,848 3,614 Rest of World 13,170 10,025
----------------------- -------------
5,932 10,052 5,580 Total for continuing operations 32,682 25,746
======================= =============
Analysis of Replacement Cost Profit
Before Interest and Tax
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
Exploration and Production
998 939 (295) UK 2,129 3,453
222 301 398 Rest of Europe 2,321 837
1,600 2,070 2,964 USA 9,475 6,797
1,930 3,225 3,500 Rest of World 11,566 6,990
----------------------- --------------
4,750 6,535 6,567 25,491 18,077
----------------------- --------------
Refining and Marketing
(375) 268 (514) UK (575) (690)
585 657 (170) Rest of Europe 1,568 1,988
847 563 363 USA 2,302 2,874
280 370 161 Rest of World 1,110 1,068
----------------------- --------------
1,337 1,858 (160) 4,405 5,240
----------------------- --------------
Gas, Power and Renewables
158 (17) (159) UK 64 84
(3) (4) (18) Rest of Europe (17) (32)
90 378 138 USA 722 420
250 (43) 156 Rest of World 240 443
----------------------- --------------
495 314 117 1,009 915
----------------------- --------------
Other businesses and corporate
207 (144) (141) UK (673) (217)
(132) 10 (124) Rest of Europe (79) (134)
(197) (366) (22) USA (405) (782)
(123) 48 (116) Rest of World (29) 1,289
----------------------- --------------
(245) (452) (403) (1,186) 156
----------------------- --------------
6,337 8,255 6,121 29,719 24,388
57 (285) 234 Unrealized profit in inventory (208) (191)
Net profit on transactions
between continuing and
31 144 128 Innovene operations 527 188
----------------------- --------------
6,425 8,114 6,483 Total for continuing operations 30,038 24,385
----------------------- --------------
Innovene operations
(71) (276) 428 UK 291 (244)
(423) (169) (4) Rest of Europe 252 (54)
(362) (258) (127) USA (253) (398)
(115) (37) 15 Rest of World (5) (112)
----------------------- --------------
(971) (740) 312 285 (808)
Net profit on transactions
between continuing and
(31) (144) (128) Innovene operations (527) (188)
----------------------- --------------
(1,002) (884) 184 Total for Innovene operations (242) (996)
----------------------- --------------
5,423 7,230 6,667 Total for period 29,796 23,389
======================= ==============
By geographical area
1,102 1,089 (965) UK 1,186 2,812
732 1,049 128 Rest of Europe 4,100 2,808
2,254 2,376 3,643 USA 11,888 8,975
2,337 3,600 3,677 Rest of World 12,864 9,790
----------------------- --------------
6,425 8,114 6,483 Total for continuing operations 30,038 24,385
======================= ==============
Analysis of Non-operating Items
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ================
$ million $ million
By business
Exploration and Production
(15) (53) (975) UK (1,996) (21)
- - 6 Rest of Europe 1,036 (1)
(268) (106) (121) USA (231) (373)
55 12 111 Rest of World 193 (101)
----------------------- ---------------
(228) (147) (979) (998) (496)
----------------------- ---------------
Refining and Marketing
(411) (3) (8) UK (26) (530)
(25) (53) (33) Rest of Europe (97) (35)
89 (96) 118 USA (607) (52)
(18) (2) (27) Rest of World (59) (77)
----------------------- ---------------
(365) (154) 50 (789) (694)
----------------------- ---------------
Gas, Power and Renewables
- 90 (306) UK (45) -
(1) - - Rest of Europe - (1)
1 5 - USA 26 1
40 - (1) Rest of World (1) 56
----------------------- ---------------
40 95 (307) (20) 56
----------------------- ---------------
Other businesses and corporate
(87) (6) (57) UK (111) (130)
(12) - - Rest of Europe 11 (66)
100 (284) (7) USA (284) (347)
(12) - - Rest of World - 1,388
----------------------- ---------------
(11) (290) (64) (384) 845
----------------------- ---------------
Total before taxation
(564) (496) (1,300) for continuing operations (2,191) (289)
166 167 421 Taxation credit (charge) 717 83
----------------------- ---------------
Total after taxation for
(398) (329) (879) continuing operations (1,474) (206)
----------------------- ---------------
Innovene operations
(218) (301) 221 UK (83) (223)
(427) (224) (30) Rest of Europe (273) (427)
(355) (208) (50) USA (259) (355)
(114) (26) (5) Rest of World (32) (114)
----------------------- ---------------
Total before taxation for
(1,114) (759) 136 Innovene operations (a) (647)(a)(1,119)
251 167 190 Taxation credit (charge) 367 253
----------------------- ---------------
Total after taxation for
(863) (592) 326 Innovene operations (280) (866)
----------------------- ---------------
(1,261) (921) (553) Total after taxation for period (1,754) (1,072)
======================= ===============
(a) Includes the loss on re-measurement to fair value of $724 million and
$(133) million in the third and fourth quarters of 2005, impairment
charges of $24 million and $35 million in the first and third quarters
of 2005 respectively, and a gain on disposal of $3 million in the
fourth quarter of 2005.
Depreciation of Fixed Asset Revaluation Adjustment
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Exploration and Production
9 6 7 UK 33 34
81 64 62 USA 272 362
3 5 5 Rest of World 18 19
----------------------- -------------
93 75 74 323 415
----------------------- -------------
Refining and Marketing
31 31 31 USA 124 124
----------------------- -------------
31 31 31 124 124
----------------------- -------------
Total depreciation of revaluation
124 106 105 adjustment (a)(b) 447 539
======================= =============
(a) Relates to the revaluation adjustment consequent upon the ARCO
acquisition.
(b) Excludes impairment of the revaluation adjustment which is included in
non-operating items.
Net Debt Ratio - Net Debt: Net Debt + Equity
Fourth Third Fourth
Quarter Quarter Quarter 31 December
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
23,091 22,159 19,162 Gross debt 19,162 23,091
1,359 2,182 2,960 Cash and cash equivalents 2,960 1,359
----------------------- --------------
21,732 19,977 16,202 Net debt 16,202 21,732
======================= ==============
78,235 82,726 80,765 Equity 80,765 78,235
22% 19% 17% Net debt ratio 17% 22%
======================= ==============
Production and Realizations
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
Production (a)
Crude oil (mb/d) (net of royalties)
301 224 244 UK 261 312
70 64 69 Rest of Europe 71 73
519 427 432 USA 491 530
1,506 1,598 1,655 Rest of World 1,566 1,425
----------------------- -------------
2,396 2,313 2,400 Total crude oil production 2,389 2,340
======================= =============
Natural gas liquids (mb/d) (net of royalties)
19 12 16 UK 16 18
4 4 4 Rest of Europe 4 4
142 113 111 USA 122 138
32 30 33 Rest of World 31 31
----------------------- -------------
Total natural gas
197 159 164 liquids production 173 191
======================= =============
Liquids (b)(mb/d) (net of royalties)
320 236 260 UK 277 330
74 68 73 Rest of Europe 75 77
661 540 543 USA 613 668
1,538 1,628 1,688 Rest of World 1,597 1,456
----------------------- -------------
2,593 2,472 2,564 Total liquids production 2,562 2,531
======================= =============
Natural gas (mmcf/d) (net of royalties)
1,227 831 1,156 UK 1,090 1,174
113 99 107 Rest of Europe 108 125
2,651 2,456 2,359 USA 2,547 2,748
4,723 4,455 4,836 Rest of World 4,679 4,456
----------------------- -------------
8,714 7,841 8,458 Total natural gas production 8,424 8,503
======================= =============
Average realizations (c)
Crude oil ($/bbl)
42.01 57.77 54.70 UK 51.22 36.11
42.07 56.64 57.40 USA 50.98 37.40
38.29 55.89 49.93 Rest of World 48.32 34.99
41.01 56.83 53.92 BP Average 50.27 36.45
======================= =============
Natural gas liquids ($/bbl)
40.23 47.49 43.68 UK 37.95 31.79
29.31 36.39 37.78 USA 31.94 25.67
33.10 32.97 42.10 Rest of World 35.11 27.76
31.20 36.70 39.29 BP Average 33.23 26.75
======================= =============
Liquids ($/bbl)
41.91 57.26 54.02 UK 50.45 35.87
39.73 53.17 53.98 USA 47.83 35.41
37.94 54.63 49.51 Rest of World 47.56 34.51
39.88 54.80 52.44 BP Average 48.51 35.39
======================= =============
Natural gas ($/mcf)
5.16 4.45 6.96 UK 5.53 4.32
5.72 6.77 9.48 USA 6.78 5.11
3.00 3.43 4.08 Rest of World 3.46 2.74
4.28 4.75 6.24 BP Average 4.90 3.86
======================= =============
(a) Includes BP's share of production of equity-accounted entities.
(b) Crude oil and natural gas liquids.
(c) Based on sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
Notes
1. Transition to International Financial Reporting Standards
For all periods up to and including the year ended 31 December 2004, BP
prepared its financial statements in accordance with UK generally
accepted accounting practice (UK GAAP). From 1 January 2005 BP is
required to prepare consolidated financial statements in accordance with
International Financial Reporting Standards (IFRS) as adopted by the
European Commission ('EC'). Consequently, financial information for
year of 2005 must be prepared on the basis of IFRS.
The general principle that should be applied on first-time adoption of
IFRS is that standards in force at the first reporting date (that is,
for BP, 31 December 2005) should be applied retrospectively. However,
IFRS 1 'First-time Adoption of International Financial Reporting
Standards' contains a number of exemptions which companies are permitted
to apply. BP has elected:
- not to present comparative information in accordance with IAS 32
'Financial Instruments: Disclosure and Presentation' and IAS 39
'Financial Instruments: Recognition and Measurement'.
- not to restate its financial information for acquisitions occurring
before 1 January 2003.
- to deem cumulative translation differences to be zero at 1 January
2003.
- to recognize all actuarial gains and losses on pensions and other
post-retirement benefits directly in shareholders' equity at 1
January 2003. This is consistent with the group's adoption of FRS 17
'Retirement Benefits' in 2004.
- to apply IFRS 2 'Share-based Payment' retrospectively to all share-
based payments.
As a result of the above exemptions certain changes apply from 1 January
2003 (BP's Date of Transition) followed by further changes (due to IAS
32 and IAS 39) to apply from 1 January 2005.
The annual information for 2005 and the restatement of financial
information for the year ended 31 December 2004 and the interim quarters
of 2004 have been prepared on the basis of all International Financial
Reporting Standards (IFRSs) (with the exception of IAS 32 and IAS 39 (as
amended) for the 2004 information) and Standing Interpretations
Committee (SIC) and International Financial Reporting Interpretations
Committee (IFRIC) interpretations issued by the International Accounting
Standards Board (IASB) in effect for the year ending 31 December 2005.
In addition, BP has decided to early adopt IFRS 6 'Exploration for and
Evaluation of Mineral Resources', the amendment to IAS 19 'Amendment to
international accounting standard IAS 19 Employee Benefits: Actuarial
Gains and Losses, Group Plans and Disclosures', the amendment to IAS 39
'Financial Instruments: Recognition and Measurement - Cash Flow Hedge
Accounting of Forecast Intra-group Transactions' and IFRIC 4
'Determining whether an Arrangement contains a Lease'.
In the financial information for the year ended 31 December 2004 and the
interim quarters of 2004 financial assets and financial liabilities are
accounted for on the basis of UK GAAP.
Under UK GAAP, all derivatives used for trading purposes are recognized
on the balance sheet at fair value. However, derivative financial
instruments used for hedging purposes are recognized by applying either
the accrual method or the deferral method. Under the accrual method,
amounts payable or receivable in respect of derivatives are recognized
rateably in earnings over the period of the contracts. Changes in the
derivative's fair value are not recognized. On the deferral method,
gains and losses from derivatives are deferred and recognized in
earnings or as adjustments to carrying amounts as the underlying hedged
transaction matures or occurs.
From 1 January 2005 for IFRS all financial assets and financial
liabilities have to be recognized initially at fair value. In
subsequent periods the measurement of these financial instruments
depends on their classification into one of the following measurement
categories: i) financial assets or financial liabilities at-fair-value-
through-profit-and-loss (such as those used for trading purposes, and
all derivatives which do not qualify for hedge accounting); ii) loans
and receivables; iii) available-for-sale financial assets (including
certain investments held for the long term) and iv) other liabilities.
The effect of adopting IAS 39 at 1 January 2005 is shown as a movement
in BP shareholders' equity for 2005.
Notes
1. Transition to International Financial Reporting Standards (continued)
The principal differences for the group between reporting on the basis
of UK GAAP and IFRS are as follows:
- ceasing to amortize goodwill.
- setting up deferred taxation on:
- acquisitions;
- inventory valuation differences;
- unremitted earnings of subsidiaries, associates and jointly
controlled entities.
- expensing a greater proportion of major maintenance costs.
- no longer recognizing dividends proposed but not declared as a
liability at the balance sheet date.
- recognizing an expense for the fair value of employee share option
schemes rather than the intrinsic value.
- recording asset swaps on the basis of fair value.
- measuring embedded derivatives at fair value.
BP has produced an explanatory note setting out its accounting policies
under IFRS, the major differences between UK GAAP and IFRS for BP, and
reconciliations of UK GAAP to IFRS for its 2003 and 2004 Income and Cash
Flow Statements, its Balance Sheets at 1 January 2003, 31 December 2003,
31 December 2004 and 1 January 2005. This information can be found at
the Investor Centre www.bp.com. In addition, the reconciliations for
2004 interim periods included in this report are shown below.
Fourth
Quarter Year
2004 2004
=====================
$ million
Profit for the period under UK GAAP 2,610 15,961
Adjustments
Goodwill amortization 412 1,489
Major maintenance expenditure (94) (217)
Share-based payments 85 (24)
Asset swaps 36 39
Recycling foreign exchange on disposal - 78
Deferred tax (24) (74)
Other 44 10
---------------------
Profit for the period under IFRS 3,069 17,262
=====================
31 December
2004
=======
$ million
BP shareholders' equity under UK GAAP 76,656
Adjustments
Goodwill amortization 2,985
Major maintenance expenditure (794)
Share-based payments 353
Asset swaps (190)
Deferred tax (3,986)
Dividend accrual 1,821
Other 47
-------
BP shareholders' equity under IFRS 76,892
=======
Notes
2. Resegmentation
With effect from 1 January 2005 there have been the following changes to
the business segments reported by the group.
(a) The Mardi Gras pipeline system in the Gulf of Mexico has been
transferred from Exploration and Production to Refining and
Marketing.
(b) The aromatics and acetyls operations and the petrochemicals assets
that are integrated with our Gelsenkirchen refinery in Germany have
been transferred from the former Petrochemicals segment to Refining
and Marketing.
(c) The olefins and derivatives operations have been transferred from
the former Petrochemicals segment to the Olefins and Derivatives
business. The legacy historical results of other petrochemicals
assets that had been divested during 2004 and 2003 are included
within Other businesses and corporate.
(d) The Grangemouth and Lavera refineries have been transferred from
Refining and Marketing to the Olefins and Derivatives business to
maintain existing operating synergies with the co-located olefin
and derivatives operations.
(e) A small US operation, the Hobbs fractionator, which supplies
petrochemicals feedstock, has been transferred from Gas, Power and
Renewables to the Olefins and Derivatives business.
The Olefins and Derivatives business is reported within Other businesses
and corporate. This re-organisation was a precursor to seeking to
divest the Olefins and Derivatives business. As indicated in Note 3,
during 2005 we have divested Innovene and shown these activities as
discontinued operations in these accounts. Innovene represented the
majority of the Olefins and Derivatives business.
Comparative financial and operating information is shown after
resegmentation and the adoption of International Financial Reporting
Standards.
3. Sale of Olefins and Derivatives business
BP announced on 7 October 2005 its intention to sell Innovene, its
olefins, derivatives and refining group to INEOS. The transaction became
unconditional on 9 December on receipt of European Commission clearance
and was completed on 16 December 2005. The transaction included all
Innovene's manufacturing sites, markets and technologies. The equity-
accounted investments in China and Malaysia which were part of the
Olefins and Derivatives business remain with BP and are included within
Other businesses and corporate.
The Innovene operations represent a separate major line of business for
BP. As a result of the sale, these operations have been treated as
discontinued operations for the year ended 31 December 2005. A single
amount is shown on the face of the income statement comprising the post-
tax result of discontinued operations and the post-tax loss recognized
on the re-measurement to fair value less costs to sell of the
discontinued operation. That is, the income and expenses of Innovene are
reported separately from the continuing operations of the BP group. The
table below provides further detail of the amount shown on the income
statement. The income statements for prior periods have been restated to
conform to this style of presentation.
In the cash flow statement the cash provided by the operating activities
of Innovene has been separated from that of the rest of the group and
reported as a single line item.
Gross proceeds received amounted to $8,477 million and there were
selling costs of $120 million and initial closing adjustments of $43
million. The proceeds are subject to final closing adjustments. The re-
measurement to fair value less costs to sell resulted in a loss of $591
million before tax. The originally announced transaction value of $9,000
million has been reduced by the value of certain liabilities transferred
to INEOS and certain assets retained by BP on closing.
Notes
3. Sale of Olefins and Derivatives business (continued)
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Profit (loss) before tax from
(972) 99 335 Innovene operations 1,259 (526)
Net profit on transactions
between continuing and
(31) (144) (128) Innovene operations (527) (188)
----------------------- ---------------
Profit (loss) before
(1,003) (45) 207 Interest and taxation 732 (714)
(5) - 1 Other finance income (expense) 3 (17)
(Loss)/gain recognized on
the re-measurement to
- (724) 133 fair value (591) -
----------------------- ---------------
(1,008) (769) 341 144 (731)
Taxation
Related to profit
227 (56) (86) before tax (306) 109
Related to re-measurement
- 159 187 to fair value 346 -
----------------------- ---------------
Profit (loss) from
(781) (666) 442 Innovene operations 184 (622)
======================= ===============
4. Change in accounting policy
The group's accounting policy has been to present oil, natural gas
and power forward sales and purchases gross in the income statement.
However, during 2005, a review was undertaken into the presentation of
these commodity derivative transactions and related activity. These
transactions have previously been presented gross in the income
statement, although in certain areas of the group's activity physical
delivery can be optional and avoided by buying or selling offsetting
contracts through a market mechanism. This led to the conclusion that it
was more appropriate to represent transactions in these areas net rather
than gross. These sale and purchase transactions are now offset and
reported net in sales and other operating revenues. Other derivative
contracts where physical delivery is the norm continue to be reported
gross.
This change in accounting policy, while reducing sales and other
operating revenues and purchases, has no impact on reported profit, cash
flows and balance sheet.
Sales and other operating revenues for earlier quarters of 2005 and for
2004 have been restated as have purchases. The restated sales and other
operating revenues information is set out below. The impact of the
change in accounting policy on sales and other operating revenues and
purchases for the year ended 31 December 2005 was approximately $105,000
million.
Notes
4. Change in accounting policy (continued)
Sales and other operating revenues First Second Third Nine
for 2005 as reported Quarter Quarter Quarter Months
----------------------------------
$ million
By business
Exploration and Production 10,186 10,934 11,321 32,441
Refining and Marketing 51,646 61,022 68,790 181,458
Gas, Power and Renewables 23,667 23,110 28,917 75,694
Other businesses and corporate 172 174 161 507
----------------------------------
Sales by continuing operations 85,671 95,240 109,189 290,100
Less: sales between businesses 8,369 7,843 8,511 24,723
sales to Innovene operations 2,113 3,926 4,158 10,197
----------------------------------
Third party sales of
continuing operations 75,189 83,471 96,520 255,180
----------------------------------
Innovene sales 7,120 5,951 5,824 18,895
Less: sales to continuing operations 3,311 2,605 2,667 8,583
----------------------------------
Third party sales of
Innovene operations 3,809 3,346 3,157 10,312
----------------------------------
Total third party sales 78,998 86,817 99,677 265,492
==================================
By geographical area
UK 24,829 29,998 37,406 92,233
Rest of Europe 15,824 16,916 16,904 49,644
USA 32,944 38,115 45,759 116,818
Rest of World 18,614 20,028 19,595 58,237
----------------------------------
Sales by continuing operations 92,211 105,057 119,664 316,932
Less: sales between areas 14,909 17,660 18,986 51,555
sales to Innovene operations 2,113 3,926 4,158 10,197
----------------------------------
75,189 83,471 96,520 255,180
==================================
Sales and other operating revenues First Second Third Nine
for 2005 as restated Quarter Quarter Quarter Months
----------------------------------
$ million
By business
Exploration and Production 10,186 10,934 11,321 32,441
Refining and Marketing 47,762 55,115 63,278 166,155
Gas, Power and Renewables 7,105 6,250 7,219 20,574
Other businesses and corporate 172 174 161 507
----------------------------------
Sales by continuing operations 65,225 72,473 81,979 219,677
Less: sales between businesses 8,369 7,843 8,511 24,723
sales to Innovene operations 2,113 3,926 4,158 10,197
----------------------------------
Third party sales of
continuing operations 54,743 60,704 69,310 184,757
----------------------------------
Innovene sales 7,120 5,951 5,824 18,895
Less: sales to continuing operations 3,311 2,605 2,667 8,583
----------------------------------
Third party sales of
Innovene operations 3,809 3,346 3,157 10,312
----------------------------------
Total third party sales 58,552 64,050 72,467 195,069
==================================
By geographical area
UK 19,821 25,246 32,863 77,930
Rest of Europe 15,824 16,916 16,904 49,644
USA 23,395 25,881 30,724 80,000
Rest of World 12,725 14,247 11,963 38,935
----------------------------------
Sales by continuing operations 71,765 82,290 92,454 246,509
Less: sales between areas 14,909 17,660 18,986 51,555
sales to Innovene operations 2,113 3,926 4,158 10,197
----------------------------------
54,743 60,704 69,310 184,757
==================================
Notes
4. Change in accounting policy (continued)
Sales and other operating First Second Third Fourth
revenues for 2004 as reported Quarter Quarter Quarter Quarter Year
----------------------------------------
$ million
By business
Exploration and Production 8,186 8,083 8,601 9,830 34,700
Refining and Marketing 45,307 49,849 46,639 51,122 192,917
Gas, Power and Renewables 20,975 18,434 20,443 23,468 83,320
Other businesses and corporate 121 132 137 156 546
---------------------------------------
Sales by continuing operations 74,589 76,498 75,820 84,576 311,483
Less: sales between businesses 6,726 6,769 7,873 8,236 29,604
sales to Innovene operations 1,824 1,948 2,183 2,271 8,226
---------------------------------------
Third party sales of
continuing operations 66,039 67,781 65,764 74,069 273,653
---------------------------------------
Innovene sales 3,698 3,779 4,437 5,534 17,448
Less: sales to continuing
operations 1,276 1,246 1,774 1,873 6,169
---------------------------------------
Third party sales of
Innovene operations 2,422 2,533 2,663 3,661 11,279
---------------------------------------
Total third party sales 68,461 70,314 68,427 77,730 284,932
=======================================
By geographical area
UK 15,839 15,881 20,355 23,013 75,088
Rest of Europe 9,787 11,023 11,499 12,549 44,858
USA 30,931 32,629 30,476 32,556 126,592
Rest of World 15,721 15,533 16,552 19,504 67,310
---------------------------------------
Sales by continuing operations 72,278 75,066 78,882 87,622 313,848
Less: sales between areas 4,415 5,337 10,935 11,282 31,969
sales to Innovene operations 1,824 1,948 2,183 2,271 8,226
---------------------------------------
66,039 67,781 65,764 74,069 273,653
=======================================
Sales and other operating First Second Third Fourth
revenues for 2004 as restated Quarter Quarter Quarter Quarter Year
----------------------------------------
$ million
By business
Exploration and Production 8,186 8,083 8,601 9,830 34,700
Refining and Marketing 41,380 47,809 41,057 46,104 176,350
Gas, Power and Renewables 6,685 5,916 5,749 7,760 26,110
Other businesses and corporate 121 132 137 156 546
---------------------------------------
Sales by continuing operations 56,372 61,940 55,544 63,850 237,706
Less: sales between businesses 6,726 6,769 7,873 8,236 29,604
sales to Innovene operations 1,824 1,948 2,183 2,271 8,226
---------------------------------------
Third party sales of
continuing operations 47,822 53,223 45,488 53,343 199,876
---------------------------------------
Innovene sales 3,698 3,779 4,437 5,534 17,448
Less: sales to continuing
Operations 1,276 1,246 1,774 1,873 6,169
---------------------------------------
Third party sales of
Innovene operations 2,422 2,533 2,663 3,661 11,279
---------------------------------------
Total third party sales 50,244 55,756 48,151 57,004 211,155
=======================================
By geographical area
UK 11,584 13,901 16,407 18,259 60,151
Rest of Europe 9,787 11,023 11,499 12,549 44,858
USA 22,062 24,351 18,571 22,216 87,200
Rest of World 10,628 11,233 12,129 13,872 47,862
---------------------------------------
Sales by continuing operations 54,061 60,508 58,606 66,896 240,071
Less: sales between areas 4,415 5,337 10,935 11,282 31,969
sales to Innovene operations 1,824 1,948 2,183 2,271 8,226
---------------------------------------
47,822 53,223 45,488 53,343 199,876
=======================================
Notes
5. Sales and other operating revenues
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
9,830 11,321 14,769 Exploration and Production 47,210 34,700
46,104 63,278 53,979 Refining and Marketing 220,134 176,350
7,760 7,219 7,987 Gas, Power and Renewables 28,561 26,110
Other businesses
156 161 161 and corporate 668 546
----------------------- ---------------
Sales by continuing
63,850 81,979 76,896 operations 296,573 237,706
Less: sales between
8,236 8,511 10,595 businesses 35,318 29,604
sales to Innovene
2,271 4,158 1,593 operations 11,790 8,226
----------------------- ---------------
Third party sales of
53,343 69,310 64,708 continuing operations 249,465 199,876
======================= ===============
5,534 5,824 3,509 Innovene sales 20,627 17,448
Less: sales to continuing
1,873 2,667 1,445 operations 8,251 6,169
----------------------- ---------------
Third party sales of
3,661 3,157 2,064 Innovene operations 12,376 11,279
----------------------- ---------------
57,004 72,467 66,772 Total third party sales 261,841 211,155
======================= ===============
By geographical area
18,259 32,863 18,204 UK 96,134 60,151
12,549 16,904 14,661 Rest of Europe 64,305 44,858
22,216 30,724 23,185 USA 103,185 87,200
13,872 11,963 20,693 Rest of World 59,628 47,862
----------------------- ---------------
Sales by continuing
66,896 92,454 76,743 operations 323,252 240,071
11,282 18,986 10,442 Less: sales between areas 61,997 31,969
sales to Innovene
2,271 4,158 1,593 operations 11,790 8,226
----------------------- ---------------
53,343 69,310 64,708 249,465 199,876
======================= ===============
Notes
6. Operating profits are after charging:
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Exploration expense
17 3 11 UK 32 26
10 1 - Rest of Europe 2 25
143 120 117 USA 425 361
88 53 80 Rest of World 225 225
----------------------- --------------
258 177 208 684 637
======================= ==============
Production and similar taxes (a)
112 95 133 UK 495 335
535 739 697 Overseas 2,515 1,814
----------------------- --------------
647 834 830 3,010 2,149
======================= ==============
(a) Production taxes are charged against Exploration and Production's
operating profit.
7. Finance costs
188 237 278 Interest payable 910 644
(45) (93) (106) Capitalized (351) (204)
----------------------- --------------
143 144 172 559 440
Early redemption of finance
- - - leases 57 -
----------------------- --------------
143 144 172 616 440
======================= ==============
8. Other finance expense
Interest on pension and other
post-retirement benefit
519 502 497 plan liabilities 2,022 2,012
Expected return on pension
and other post-retirement
(501) (528) (521) benefit plan assets (2,138) (1,983)
----------------------- --------------
Interest net of expected return
18 (26) (24) on plan assets (116) 29
Unwinding of discount
50 49 57 on provisions 201 196
Unwinding of discount on
deferred consideration for
acquisition of investment
17 14 9 in TNK-BP 57 91
Change in discount rate
41 - - for provision - 41
----------------------- --------------
126 37 42 142 357
(5) - 1 Innovene operations 3 (17)
----------------------- --------------
121 37 43 145 340
======================= Continuing operations ==============
Notes
9. Dividends paid
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
Dividends per ordinary share
7.10 8.925 8.925 cents 34.85 27.70
3.910 5.119 5.061 pence 19.152 15.251
42.6 53.55 53.55 Dividends per ADS (cents) 209.10 166.20
======================= ==============
10. Analysis of changes in net debt
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Opening balance
20,445 19,302 22,159 Finance debt 23,091 22,325
Less: Cash and cash
1,741 1,360 2,182 equivalents 1,359 2,056
----------------------- ---------------
18,704 17,942 19,977 Opening net debt 21,732 20,269
----------------------- ---------------
Closing balance
23,091 22,159 19,162 Finance debt 19,162 23,091
Less: Cash and cash
1,359 2,182 2,960 equivalents 2,960 1,359
----------------------- ---------------
21,732 19,977 16,202 Closing net debt 16,202 21,732
----------------------- ---------------
Decrease (increase)
(3,028) (2,035) 3,775 in net debt 5,530 (1,463)
======================= ===============
Movement in cash and cash
equivalents (excluding
(460) 896 783 exchange adjustments) 1,689 (788)
Net cash outflow (inflow)
from financing(excluding
(2,535) (3,060) 2,936 share capital) 3,803 (431)
- - - Adoption of IAS 39 (147) -
- 8 48 Fair value hedge adjustment 171 -
37 33 11 Other movements 146 68
----------------------- --------------
Movement in net debt before
(2,958) (2,123) 3,778 exchange effects 5,662 (1,151)
(70) 88 (3) Exchange adjustments (132) (312)
----------------------- --------------
Decrease (increase)
(3,028) (2,035) 3,775 in net debt 5,530 (1,463)
======================= ==============
Notes
11. TNK-BP Operational and Financial Information
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
Production (Net of royalties)
(BP share)
884 930 936 Crude oil (mb/d) 911 830
515 449 530 Natural gas (mmcf/d) 482 463
972 1,007 1,027 Total hydrocarbons (mboe/d)(a) 994 910
======================= ==============
$ million $ million
Income statement (BP share)
659 1,253 1,029 Profit before interest and tax 3,817 2,421
(22) (37) (30) Interest expense * (128) (101)
(184) (347) (234) Taxation (976) (675)
(17) (46) (31) Minority interest (104) (43)
----------------------- --------------
436 823 734 Net Income (b) 2,609 1,602
======================= ==============
* Excludes unwinding of discount
17 14 9 on deferred consideration 57 91
======================= ==============
Cash Flow
Additional investment in
- - - TNK-BP joint venture - (1,416)
Dividends related to period
- - - prior to acquisition - 166
----------------------- --------------
Net investment in TNK-BP
- - - joint venture - (1,250)
======================= ==============
610 750 525 Dividends received 1,950 1,760
- - 771 Dividends receivable 771 -
======================= ==============
Fourth Third Fourth
Quarter Quarter Quarter Year
2004 2005 2005 2005 2004
======================= ==============
Average oil marker prices ($/bbl)
37.75 57.13 53.23 Urals (NWE - cif) 50.29 34.08
38.82 57.39 54.07 Urals (Med - cif) 50.84 34.45
22.30 36.60 31.73 Domestic Oil 28.77 20.61
======================= ==============
Balance Sheet 31 December 31 December
2005 2004
==========================
Investments in jointly controlled entities 8,089 8,294
==========================
Deferred consideration
Due within one year 1,227 1,227
Due after more than one year - 1,194
--------------------------
1,227 2,421
==========================
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet =
1 million barrels.
(b) Fourth quarter 2005 includes a net gain of $270 million on the disposal
of non-core producing assets in the Saratov region, along with the Orsk
refinery.
As reported in previous quarters, various TNK-BP companies have received tax
notifications. Upon entering into the joint venture arrangement, each party
received indemnities from its co-venturers in respect of historical tax
liabilities related to assets contributed to the joint venture. BP believes
existing provisions are adequate for its share of any liabilities arising from
tax claims not covered by these indemnities.
Notes
12. Equity-accounted entities
The group's profit for the period includes the following in respect of
equity-accounted entities.
RC profit Profit
(loss) Inventory (loss)
before holding before
interest gains interest
and tax (losses) and tax
---------------------------------------
$ million
Fourth Quarter 2005
Exploration and Production 1,292 - 1,292
Refining and Marketing 71 8 79
Gas, Power and Renewables 22 - 22
Other businesses and corporate 21 - 21
---------------------------------------
Continuing operations 1,406 8 1,414
Innovene operations (17) - (17)
---------------------------------------
1,389 8 1,397
=======================================
Third Quarter 2005
Exploration and Production 1,523 - 1,523
Refining and Marketing 126 4 130
Gas, Power and Renewables (2) - (2)
Other businesses and corporate 62 - 62
---------------------------------------
Continuing operations 1,709 4 1,713
Innovene operations - - -
---------------------------------------
1,709 4 1,713
=======================================
Fourth Quarter 2004
Exploration and Production 889 - 889
Refining and Marketing 71 7 78
Gas, Power and Renewables 7 - 7
Other businesses and corporate (17) - (17)
---------------------------------------
Continuing operations 950 7 957
Innovene operations (2) 2 -
---------------------------------------
948 9 957
=======================================
Notes
12. Equity-accounted entities (continued)
Profit
(loss)
Minority for the
Interest Tax interest period
----------------------------------------
$ million
Fourth Quarter 2005
Exploration and Production (56) (313) (30) 893
Refining and Marketing (8) (27) - 44
Gas, Power and Renewables (1) (1) - 20
Other businesses and corporate (10) - - 11
---------------------------------------
Continuing operations (75) (341) (30) 968
Innovene operations - - - (17)
---------------------------------------
(75) (341) (30) 951
=======================================
Third Quarter 2005
Exploration and Production (63) (421) (46) 993
Refining and Marketing (6) (23) - 101
Gas, Power and Renewables (1) (4) - (7)
Other businesses and corporate (17) - - 45
---------------------------------------
Continuing operations (87) (448) (46) 1,132
Innovene operations - - - -
---------------------------------------
(87) (448) (46) 1,132
=======================================
Fourth Quarter 2004
Exploration and Production (48) (376) (17) 448
Refining and Marketing (3) (25) - 50
Gas, Power and Renewables (2) (1) - 4
Other businesses and corporate (1) 4 - (14)
---------------------------------------
Continuing operations (54) (398) (17) 488
Innovene operations - - - -
---------------------------------------
(54) (398) (17) 488
=======================================
Notes
12. Equity-accounted entities (continued)
RC profit Profit
(loss) Inventory (loss)
before holding before
interest gains interest
and tax (losses) and tax
---------------------------------------
$ million
Year 2005
Exploration and Production 4,819 - 4,819
Refining and Marketing 345 (2) 343
Gas, Power and Renewables 34 - 34
Other businesses and corporate 84 (5) 79
---------------------------------------
Continuing operations 5,282 (7) 5,275
Innovene operations (14) - (14)
---------------------------------------
5,268 (7) 5,261
=======================================
Year 2004
Exploration and Production 3,246 - 3,246
Refining and Marketing 336 21 357
Gas, Power and Renewables 15 - 15
Other businesses and corporate 23 7 30
---------------------------------------
Continuing operations 3,620 28 3,648
Innovene operations (19) 10 (9)
---------------------------------------
3,601 38 3,639
=======================================
Profit
(loss)
Minority for the
Interest Tax interest period
----------------------------------------
$ million
Year 2005
Exploration and Production (227) (1,250) (104) 3,238
Refining and Marketing (24) (81) - 238
Gas, Power and Renewables (7) (8) - 19
Other businesses and corporate (31) - - 48
---------------------------------------
Continuing operations (289) (1,339) (104) 3,543
Innovene operations - - - (14)
---------------------------------------
(289) (1,339) (104) 3,529
=======================================
Year 2004
Exploration and Production (189) (1,029) (43) 1,985
Refining and Marketing (15) (83) - 259
Gas, Power and Renewables (7) (2) - 6
Other businesses and corporate (4) 4 - 30
---------------------------------------
Continuing operations (215) (1,110) (43) 2,280
Innovene operations (3) - - (12)
---------------------------------------
(218) (1,110) (43) 2,268
=======================================
Notes
13. First quarter results
BP's first quarter results will be announced on 25 April 2006.
14. Statutory accounts
The above financial information does not constitute statutory accounts.
The summarized group income statement, summarized group balance sheet,
summarized group cash flow statement, group statement of recognized
income and expenses and the notes thereon (except Note 11) for the
years ended 31 December 2005 and 2004 are an extract from BP Annual
Report and Accounts 2005, approved by a duly appointed and authorised
committee of the Board of Directors at the Results Committee meeting
held on 6 February 2006, but not yet delivered to the UK Registrar of
Companies; the report of the auditors on those accounts was
unqualified. BP Annual Report and Accounts 2005 will be published on 14
March 2006.
Contacts
London United States
-------------- --------------
Press Office Roddy Kennedy Ronnie Chappell
+44 (0)20 7496 4624 +1 281 366 5174
Investor Relations Fergus MacLeod Rachael MacLean
+44 (0)20 7496 4717 +1 212 451 8072
http://www.bp.com/investors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP p.l.c.
(Registrant)
Dated: 07 February 2006 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary