SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[ X ] ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 2003
OR
[
] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to _________
Commission file number 1-6262
A. Full title of the plan and the address of the plan, if different from that of the
issuer named below:
BP EMPLOYEE SAVINGS PLAN
4101 Winfield Road
Warrenville, IL
60555
B. Name of issuer of the securities held pursuant to the
plan and the address
of
its principal executive office:
BP p.l.c.
1 St. James's Square
London SW1Y 4PD
England
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Investment Committee of BP Corporation North America Inc.
We have audited the accompanying statements of assets available for benefits of the BP Employee Savings Plan as of December 31, 2003 and 2002, and the related statement of changes in assets available for benefits for the year ended December 31, 2003. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Plan at December 31, 2003 and 2002, and the changes in its assets available for benefits for the year ended December 31, 2003, in conformity with U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of delinquent participant contributions for the year ended December 31, 2003 and schedule of assets (held at end of year) as of December 31, 2003, are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.
Ernst & Young LLP
Chicago, Illinois
June 17, 2004
EIN 36-1812780
Plan No.
001
BP EMPLOYEE SAVINGS
PLAN
__________________________
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
thousands of dollars
|
December 31, | ||
| 2003 2002 | ||
|
Investment in the BP Master Trust |
||
|
for Employee Savings Plans |
$ 7,762,803 |
$ 6,644,069 |
|
Participant loans |
95,482 |
95,450 |
|
Assets available for benefits |
$ 7,858,285 |
$ 6,739,519 |
The accompanying notes are an integral part of these statements.
EIN
36-1812780
Plan No. 001
BP EMPLOYEE SAVINGS
PLAN
__________________________
STATEMENT OF CHANGES IN ASSETS
AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31,
2003
thousands of
dollars
|
Additions of assets attributed to: |
||
|
Participant contributions |
$ 187,858 | |
|
Company contributions |
120,370 | |
|
Rollover contributions |
47,037 | |
|
Net investment gain - BP Master Trust |
||
|
for Employee Savings Plans |
1,280,742 | |
|
Transfer of assets from other BP |
||
|
sponsored savings plans |
96,250 | |
|
Loan interest |
6,461 | |
|
Total additions |
1,738,718 | |
|
Deductions of assets attributed to: |
||
|
Distributions to participants |
619,905 | |
|
Transfer of assets to savings plans |
||
|
sponsored by other entities |
47 | |
|
Total deductions |
619,952 | |
|
Net increase in assets during the year |
1,118,766 | |
|
Assets available for benefits: |
||
|
| ||
|
Beginning of year |
6,739,519 | |
|
End of year |
$ 7,858,285 | |
The accompanying notes are an integral part of this statement.
BP EMPLOYEE SAVINGS
PLAN
__________________________
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of the BP Employee Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan document for more complete information.
The Plan, established July 1, 1955, is a defined contribution plan which is subject to and complies with the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Generally, an employee of BP Corporation North America Inc. (the "Company") or a participating affiliate is eligible to participate in the Plan as long as that employee is not eligible to participate in a separate Company-sponsored defined contribution plan, or the employee is represented by a labor organization that has bargained for and agreed to the provisions of the Plan. The Company is a wholly owned subsidiary of BP p.l.c. ("BP"). The Company reserves the right to amend or terminate the Plan at any time.
The purpose of the Plan is to encourage eligible employees to regularly save part of their earnings and to assist them in accumulating additional security for their retirement. The Plan provides that both participant contributions and Company matching contributions be held in a trust by an independent trustee for the benefit of participating employees. Plan assets are held in the BP Master Trust for Employee Savings Plans (the "Master Trust"). The trustee of the Master Trust is State Street Bank and Trust Company.
Fidelity Investments Institutional Services Company, Inc. is the Plan's recordkeeper. The Company is the Plan sponsor and the Company's Senior Vice President, Human Resources is the Plan administrator.
Under the Plan, participating employees may contribute up to 100% of their qualified pay on a pre-tax and/or after tax basis, subject to Internal Revenue Service ("IRS") limits. Participants who attain age 50 before the end of the applicable plan year are eligible to make additional elective deferrals (catch-up contribution), subject to IRS limits. Participants may elect to invest in numerous investment fund options offered under the Plan. Participants may change the percentage they contribute and the investment direction of their contributions at any time throughout the year. A specified portion of the employee contribution, up to a maximum of 7 percent of compensation, as defined, is matched by the Company in the form of cash contributions, which are initially invested in the BP Stock Fund. Participants are permitted to rollover amounts into the Plan representing distributions from other qualified plans. Participants may elect to sell any portion of their investment fund(s) and reinvest the proceeds in one or more of the other available investment alternatives. Except where the fund provider or the Plan have restrictions responsive to frequent trading or market timing concerns, there are no restrictions on the number of transactions a participant may authorize during the year.
The benefit to which a participant is entitled is the benefit which can be provided by the participant's vested account balance. Participants are immediately and fully vested in their participant contribution accounts. Vesting in Company matching contribution accounts is dependent upon specific criteria as described in the Plan document.
BP EMPLOYEE SAVINGS
PLAN
__________________________
NOTES TO FINANCIAL STATEMENTS (continued)
1. DESCRIPTION OF THE PLAN (continued)
Forfeitures of Company contributions by participants who withdrew from the Plan before vesting amounted to (in thousands of dollars) $310 and $251 during the years ended December 31, 2003 and 2002, respectively. The Plan uses forfeitures to pay certain administrative expenses and to reduce future Company matching contributions.
All reasonable and necessary Plan administrative expenses are paid out of the Master Trust or paid by the Company. Generally, fees and expenses related to investment management of each investment option are paid out of the respective funds. As a result, the returns on those investments are net of the fees and expenses of the managers of those investment options and certain other brokerage commissions, fees and expenses incurred in connection with those investment options.
Effective December 31, 2003, the Burmah Castrol Group U.S.A. Thrift Plan was merged into the Plan. Assets totaling $96 million were transferred to the Plan on December 31, 2003.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting. The financial statements of the Plan are prepared under the accrual method of accounting in accordance with U.S. generally accepted accounting principles.
Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires estimates and assumptions that affect certain reported amounts. Actual results may differ in some cases from the estimates.
Investment Valuation. All investments of the Master Trust, except as noted below, are stated at fair value generally as determined by quoted closing market prices, if available. Investments in guaranteed investment contracts and synthetic guaranteed investment contracts, which are fully benefit responsive, are valued at contract value which approximates fair value. Money market investments are valued at cost which approximates fair value. Other investments for which no quoted market prices are available are valued at fair value as determined by the trustee based on the advice of its investment consultants. Participant loans are valued at cost which approximates fair value.
Reclassification. Certain amounts in the 2002 financial statements have been reclassified to conform to the 2003 presentation.
3. PARTICIPANT LOANS
Participants are eligible to borrow from their
account balances in the Plan. Loans are made in the form of cash and the amount
may not exceed the lesser of 50 percent of the market value of the total vested
participant's account or $50,000 less the participant's highest loan balance
outstanding during the preceding twelve months. Interest rates are fixed for the
duration of the loan and charged on the unpaid balance. The
interest rate charged is one percent plus the prime rate as reported
by The Wall Street Journal, on the last business day of the calendar quarter immediately preceding the calendar
quarter in which the participant applies for the loan.
BP EMPLOYEE SAVINGS
PLAN NOTES TO FINANCIAL STATEMENTS
(continued) A processing fee of $35 is charged for each new
loan. Repayment of loan principal and interest is generally made by
payroll deductions and credited to the participant's accounts. 4.
INCOME TAX
STATUS The Plan has received a determination letter from
the IRS dated November 5, 2003, with respect to its qualified status under
Section 401(a) of the Internal Revenue Code ("IRC") and, therefore, the related
trust is exempt from taxation. Once qualified, the Plan is required to
operate in conformity with the IRC to maintain its qualification. The Plan
has been amended since receiving the determination letter. However, the
Plan administrator and the Company's tax counsel believe the Plan continues to
meet the applicable tax qualification requirements of the IRC. The Plan
sponsor reserves the right to make any amendments necessary to maintain the
qualification of the Plan and trust. 5.
RISKS AND UNCERTAINTIES Investment securities held in the Master Trust are
exposed to various risks such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits. 6.
MASTER TRUST All investment assets of the Plan except
participant loans are held in the Master Trust with the assets of other BP
sponsored savings plans. The beneficial interest of the plans in the Master
Trust is adjusted daily to reflect the effect of income collected and accrued,
realized and unrealized gains and losses, contributions and withdrawals, and all
other transactions. The Master Trust constitutes a single investment
account as defined in the master trust reporting and disclosure rules and
regulations of the Department of Labor. The Master Trust holds guaranteed investment
contracts and synthetic guaranteed investment contracts in order to achieve
certain fixed income objectives and to manage interest rate risk. The
crediting interest rates on the contracts ranged from 3.7% to 7.6% at December
31, 2003 (4.9% to 7.6% at December 31, 2002). The average yield earned on
the contracts during the year ended December 31, 2003 was 4.7%. The
crediting interest rates on synthetic guaranteed investment contracts are
generally reset quarterly by the issuer, but can not be less than 0%. The
contract values of synthetic guaranteed investment contracts are net of ($12
million) at December 31, 2003 and 2002 representing the fair value of the
related wrapper contracts. The Master Trust's interest in the contracts
represents the maximum potential credit loss from concentrations of credit risk
associated with its investment.
BP EMPLOYEE SAVINGS
PLAN 6.
MASTER TRUST (continued) Certain Master Trust investments include American
Depositary Shares of BP p.l.c. ("BP ADSs"). Transactions in BP ADSs qualify as
party-in-interest transactions under the provisions of ERISA. During 2003, the
Master Trust made purchases of BP ADSs of $533 million and sales of $846
million. As of December 31, 2003 and December 31, 2002, the
Plan's percentage interest in the Master Trust was 98.3% and 98.4%,
respectively. The net assets of the Master Trust as of December 31, 2003 and
December 31, 2002, and changes in net assets of the Master Trust for the year
ended December 31, 2003 are as follows: NET ASSETS December
31, $
7,899,721 $
6,751,734
BP EMPLOYEE SAVINGS
PLAN NOTES TO FINANCIAL STATEMENTS
(continued) 6. MASTER TRUST
(continued) CHANGES IN NET ASSETS thousands of dollars Additions of assets attributed
to: Transfer of assets from participating
plans: Participant
contributions $
203,991 Rollover contributions 47,324 Company contributions 127,061 Loan repayments 56,770 Interest and dividends 178,715 Transfer of assets from Burmah
Castrol Group U.S.A. Thrift
Plan 77,054 Net realized and unrealized
appreciation in fair value of
investments: BP ADSs 557,801 351,409 Common collective trust
funds Total
additions Deductions of assets attributed
to: Transfer of assets to participating
plans: Distributions to
participants 630,224 Loans to participants 52,892 Transfer of assets to plans
sponsored by other entities 47 Administrative expenses Total
deductions Net increase in assets during the
year 1,147,987 Net assets: Beginning of year End of year
BP EMPLOYEE SAVINGS
PLAN NOTES TO FINANCIAL STATEMENTS
(continued) 7. SUBSEQUENT EVENT The BP Solar 401(k) Plan was merged into the Plan
effective December 31, 2003. Assets totaling $21 million were transferred to the
Plan on January 2, 2004.
EIN: 36-1812780 Plan No. 001 Year ended December 31,
2003 Participant Contributions
Transferred Total that Constitute
Nonexempt Late to
Plan Prohibited
Transactions Participant contributions of $1,976
and $2,527 withheld in 2002 were deposited
in $ 4,503 2003, 371 and 385 days,
respectively past time frame Participant loan repayments of
$17,862 withheld in 2001 and 2002 were
deposited $17,862 in 2003.
EIN: 36-1812780 Plan No. 001 December 31, 2003 Description
of Investment
Including Identity of
Issue, Maturity Date, Rate
of Borrower,
Lessor, Interest,
Collateral, Current Similar
Party Par, Maturity
Value Cost Value * Participant loans 4.75% - 11.25% N/A $ 95,481,438 *Indicates party in interest
SIGNATURE Pursuant to the requirements of the
Securities Exchange Act of 1934, the trustees (or other persons who administer
the employee benefit plan) have duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
BP EMPLOYEE SAVINGS PLAN
By Plan Administrator Date: June 25,
2004
/s/ Simon
Drysdale
BP EMPLOYEE SAVINGS
PLAN EXHIBITS
Exhibit
No.
Description
23 Consent
of Independent
Registered
_______________________
3.
PARTICIPANT LOANS
(continued)
__________________________
NOTES TO FINANCIAL STATEMENTS (continued)
thousands of dollars
2003
2002
Investments:
BP ADSs
$
2,986,237
$
2,745,112
Registered investment companies
2,078,502
1,443,097
Common collective trust funds
1,155,675
936,387
Money market and
short-term
investment funds
973,201
936,526
Synthetic guaranteed investment
contracts
649,418
621,923
Guaranteed investment contracts
52,856
74,302
Total investments
7,895,889
6,757,347
Receivables:
Dividends and interest
6
2,991
Securities sold
5,600
-
Total assets
7,901,495
6,760,338
Accrued
liabilities:
Securities purchased
1,030
7,223
Fees and expenses
744
1,381
Total liabilities
1,774
8,604
Net assets
__________________________
FOR THE YEAR
ENDED DECEMBER 31, 2003
Registered investment companies
233,019
1,833,144
1,994
685,157
6,751,734
$
7,899,721
__________________________
BP EMPLOYEE SAVINGS
PLAN
__________________________
Schedule H, Line 4a - Schedule Of
Delinquent Participant Contributions
BP EMPLOYEE SAVINGS
PLAN
__________________________
Schedule H, Line 4i - Schedule Of
Assets (Held At End Of Year)
Simon
Drysdale
Senior Vice President, Human
Resources
BP Corporation North America Inc.
___________________
Public Accounting Firm