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 28 October, 2003
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
Third Quarter 2003
London 28 October 2003
FOR IMMEDIATE RELEASE
RESULT UP 25%; CONTINUING STRONG CASH GENERATION
---------------------------------------------------------------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 $ million 2003 2002 %
======================= ====================
Replacement cost profit
766 2,454 2,142 before exceptional items 7,724 3,001
556 32 228 Special items(a) 233 1,027
977 629 498 Acquisition amortization(b) 1,755 2,052
----------------------- --------------------
Pro forma result adjusted
2,299 3,115 2,868 for special items 9,712 6,080 60
======================= ====================
6.61 8.67 8.07 - per ordinary share (pence) 27.18 18.32 49
10.26 14.06 13.00 - per ordinary share (cents) 43.76 27.12 62
0.62 0.85 0.78 - per ADS (dollars) 2.63 1.62
======================= ====================
o BP's third quarter pro forma result, adjusted for special items, was
$2,868 million, compared with $2,299 million a year ago, an increase of
25%. For the nine months, the result was $9,712 million compared with
$6,080 million, up 60%. Replacement cost profit, before exceptional
items, for the third quarter and nine months was $2,142 million and
$7,724 million respectively, compared with $766 million and $3,001
million a year ago.
o The third quarter overall trading environment was more favourable than
a year ago.
o Improved operating performance generated additional income for the
quarter and nine months. Excluding charges for impairment, non-cash
costs were higher in both periods due to higher depreciation.
o The TNK-BP deal was completed on 29 August. Third quarter results and
production reflect a strong contribution from the joint venture.
o Net cash outflow for the quarter was $2,426 million and net cash inflow
for the nine months was $3,179 million, compared with outflows of
$523 million and $1,055 million a year ago. Net cash flow from
operating activities for the quarter and nine months was $4,891 million
and $18,198 million respectively compared with $4,376 million and
$13,145 million a year ago.
o The pro forma ratio of net debt to net debt plus equity was 23% at the
end of the quarter.
o Return on average capital employed for the quarter, on a pro forma
basis adjusted for special items, was 15%, compared with 13% a year
ago.
o The quarterly dividend was 6.50 cents per share ($0.39 per ADS). This
compares with 6.00 cents a year ago. For the nine months the dividend
showed an increase of 8.5%. In sterling terms, the quarterly dividend
is 3.857 pence per share compared with 3.897 pence a year ago; for the
nine months the increase was 0.2%.
BP Group Chief Executive, Lord Browne, said:
"This has been another good quarter and a strong financial result. We
continue to invest steadily against a clear set of strategic goals, and
to drive hard on operations where there is room for improvement.
The pro forma result, adjusted for special items, has been derived from the
group's reported UK GAAP accounting information but is not in itself a
recognized UK or US GAAP measure. This financial performance information and
measures derived therefrom, shown above and elsewhere in the document, are
provided in order to enable investors to evaluate better both BP's current
performance, in the context of past performance, and its performance against
that of its competitors.
(a) The special items refer to non-recurring charges and credits. The
special items for the third quarter comprise net charges resulting from
the reassessment of environmental remediation provisions, Veba
integration costs in Refining and Marketing and a provision to cover
future rental payments on surplus property in Petrochemicals.
(b) Acquisition amortization is depreciation and amortization relating to
the fixed asset revaluation adjustments and goodwill consequent upon
the ARCO and Burmah Castrol acquisitions.
Summary Quarterly Results
Exploration and Production's third quarter result was up 25% on a year ago,
reflecting higher average realizations.
In Gas, Power and Renewables, the result reflects improvement in marketing and
trading, including LNG, partly offset by a lower result for the natural gas
liquids business and restructuring costs related to the Solar business.
The Refining and Marketing result increased 87% compared with a year ago due to
higher refining margins and improved marketing margins, particularly retail
margins in the USA and Europe, with some offset from higher gas fuel costs.
The Petrochemicals result was $184 million down on the prior quarter, reflecting
substantially lower margins due to higher feedstock prices partly offset by
slightly higher demand.
Interest expense for the quarter was $213 million compared with $191 million for
the prior quarter, reflecting increased debt buyback costs and the impact of the
inclusion of TNK-BP, partly offset by an increase in capitalized interest.
The pro forma effective tax rate on replacement cost profit, before exceptional
items, and adjusted for special items, was 35% compared with 34.5% a year ago.
Capital expenditure, excluding acquisitions, was $3.3 billion for the quarter.
Total capital expenditure and acquisitions was $9.2 billion. Disposal proceeds
were $0.9 billion.
Net cash outflow was $2,426 million compared with $523 million a year ago;
higher cash flow from operating activities was more than offset by lower
disposal proceeds.
Net debt at the end of the quarter was $18.5 billion. The pro forma ratio of net
debt to net debt plus equity was 23%.
---------
The commentaries above and following are based on the pro forma replacement cost
operating results, before exceptional items, adjusted for special items.
To reflect BP's increased focus on chemical products derived from oil and gas,
the Chemicals segment has been renamed Petrochemicals.
BP's share of the result of the TNK-BP joint venture has been included within
Exploration and Production with effect from 29 August. TNK-BP operational and
financial information has been estimated.
Reconciliation of Reported Results to
Pro Forma Results Adjusted for Special Items
Pro Forma Result Pro Forma Result
adjusted for ----- 3Q 2003 --------------- adjusted for
special items special items
-------------------
3Q 2Q 3Q Special Acq. Reported Nine Months
2002 2003 2003 Items* Amort+ Earnings $ million 2003 2002
=========================================== ==============
Exploration and
3,050 3,589 3,813 - 293 3,520 Production 12,290 8,339
Gas, Power
87 103 98 - - 98 and Renewables 395 312
Refining and
522 1,135 978 318 205 455 Marketing 2,967 1,494
272 308 124 43 - 81 Petrochemicals 571 626
Other businesses
(116) (134) (320) (10) - (310) and corporate (619) (369)
------------------------------------------- --------------
RC operating
3,815 5,001 4,693 351 498 3,844 profit 15,604 10,402
------------------------------------------- --------------
(300) (191) (213) - - (213)Interest expense (624) (947)
(1,213)(1,635)(1,569) (123) - (1,446)Taxation (5,139) (3,313)
(3) (60) (43) - - (43)MSI (129) (62)
------------------------------------------- --------------
RC profit before
2,299 3,115 2,868 228 498 2,142 exceptional items 9,712 6,080
------------------------------------------- --------------
172 Exceptional items before tax
(4)Taxation on exceptional items
-----
2,310 RC profit after exceptional items
84 Stock holding gains
-----
2,394 HC profit
=====
* The special items refer to non-recurring charges and credits. The special
items for the third quarter comprise net charges resulting from the
reassessment of environmental remediation provisions, Veba integration
costs in Refining and Marketing and a provision to cover future rental
payments on surplus property in Petrochemicals.
+ Acquisition amortization is depreciation and amortization relating to the
fixed asset revaluation adjustments and goodwill consequent upon the ARCO
and Burmah Castrol acquisitions.
Operating Results
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= ==============
Replacement cost
1,757 4,324 3,844 operating profit ($m) 13,293 7,065
----------------------- --------------
Replacement cost profit
766 2,454 2,142 before exceptional items ($m) 7,724 3,001
----------------------- --------------
Profit after exceptional items ($m)
2,535 2,585 2,310 Replacement cost 8,363 4,916
2,840 1,634 2,394 Historical cost 8,295 6,194
----------------------- --------------
Per ordinary share (cents)
Pro forma result
10.26 14.06 13.00 adjusted for special items 43.76 27.12
RC profit before
3.42 11.08 9.71 exceptional items 34.80 13.39
12.67 7.41 10.85 HC profit after exceptional items 37.37 27.63
Per ADS (cents)
Pro forma result
61.56 84.36 78.00 adjusted for special items 262.56 162.72
RC profit before
20.52 66.48 58.26 exceptional items 208.80 80.34
76.02 44.46 65.10 HC profit after exceptional items 224.22 165.78
----------------------- --------------
Exploration and Production
3Q 2Q 3Q Nine Months
2002 2003 2003 $ million 2003 2002
================= ==============
1,572 3,153 3,520 Replacement cost operating profit 10,999 5,958
703 12 - Special items 151 920
775 424 293 Acquisition amortization 1,140 1,461
----------------- --------------
Pro forma operating result
3,050 3,589 3,813 adjusted for special items 12,290 8,339
================= ==============
Results include:
119 101 136 Exploration expense 349 465
Of which:
55 43 75 Exploration expenditure written off 168 261
----------------- --------------
Production (Net of Royalties)
1,736 1,712 1,852 Crude oil (mb/d) 1,798 1,766
247 199 202 Natural gas liquids (mb/d) 211 242
1,983 1,911 2,054 Total liquids (mb/d)(a) 2,009 2,008
8,482 8,439 8,401 Natural gas (mmcf/d) 8,617 8,631
3,445 3,366 3,502 Total hydrocarbons (mboe/d)(b)(c) 3,495 3,496
================= ==============
Average realizations
26.01 25.73 27.72 Crude oil ($/bbl) 28.25 23.35
13.15 17.49 19.39 Natural gas liquids ($/bbl) 18.96 12.23
24.40 24.90 26.79 Total liquids ($/bbl) 27.24 21.99
2.25 3.39 3.08 Natural gas ($/mcf) 3.46 2.32
19.27 22.43 22.58 Total hydrocarbons ($/bbl) 23.88 18.17
================= ==============
Average oil marker prices
($/bbl)
26.91 26.03 28.38 Brent 28.64 24.40
28.26 29.02 30.19 West Texas Intermediate 31.08 25.40
27.26 27.04 28.83 Alaska North Slope US West Coast 29.69 24.06
================= ==============
3.16 5.40 4.97 Henry Hub gas price ($/mmBtu)(d) 5.65 2.94
UK Gas - National
12.74 17.44 15.08 Balancing Point (p/therm) 17.92 14.53
================= ==============
(a) Crude oil and natural gas liquids.
(b) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
(c) Includes 249 mboe/d production from TNK-BP.
(d) Henry Hub First of the Month Index.
Exploration and Production
The pro forma result for the third quarter, adjusted for special items, was
$3,813 million, up 25% from the third quarter of 2002.
The result for the quarter reflected higher realizations, with liquids up $2.39/
bbl and natural gas up $0.83/mcf on a year ago. North American basin
differentials to the Henry Hub marker price continued to narrow over the quarter
following the opening of pipeline expansion routes. The result includes income
of $15 million reflecting a lower provision for Unrealized Profit in Stock
(UPIS), which removes the upstream margin from downstream inventories. This
compares with a charge of $64 million in the third quarter of last year.
The nine months result of $12,290 million was up $3,951 million on a year ago,
reflecting the impact of significantly higher oil and gas prices and a reduction
in exploration write-offs partly offset by the impact of divestments and higher
depreciation.
Significant progress was made during the quarter toward completion of our
projects in our new profit centres. The Kapok field in Trinidad started up in
July. In preparation for start-up, the Na Kika tension leg platform has arrived
on location in the Gulf of Mexico and the Xikomba Floating Production Storage
and Offloading vessel is on location in Angola. The Holstein Spar has sailed
from the fabrication yard in Finland and the Kizomba A tension leg platform has
arrived in Angola. In Azerbaijan, construction is well advanced on our Azeri
project and the BTC pipeline is on track for start-up in early 2005.
Production for the quarter was up by more than one and a half per cent at 3,502
mboe/d compared with a year ago. This reflects the impacts of the inclusion of
incremental production volumes of 208 mboe/d from TNK-BP offset by a reduction
of 179 mboe/d from divestments. Other factors include strong growth in Trinidad
and decline in our mature areas. Total production for the nine months at 3,495
mboe/d was in line with a year ago.
We are nearing the end of the 2003 programme of high-grading our portfolio with
the completion of previously announced divestments in China and the Lower 48
states in the USA and the sale of 49% of our In Amenas gas project in Algeria.
On 29 August we completed the creation of our joint venture TNK-BP. This sees
the establishment of the third largest integrated oil company in Russia in which
we have a 50% interest. That transaction did not include Alfa Group and Access
Renova's interests in Slavneft or BP's interest in Sakhalin. The TNK-BP result
included for the period 29 August to 30 September benefited from favourable
price conditions in Russia, and production was robust.
Gas, Power and Renewables
3Q 2Q 3Q Nine Months
2002 2003 2003 $ million 2003 2002
====================== ==============
57 103 98 Replacement cost operating profit 395 282
30 - - Special items - 30
- - - Acquisition amortization - -
---------------------- --------------
Pro forma operating result
87 103 98 adjusted for special items 395 312
====================== ==============
Gas sales volumes (mmcf/d)
1,809 2,581 2,174 UK 2,653 2,256
353 421 362 Rest of Europe 418 385
9,332 10,441 11,808 USA 11,328 8,841
9,556 10,839 11,133 Rest of World 11,173 9,155
----------------------- --------------
21,050 24,282 25,477 Total gas sales volumes 25,572 20,637
======================= ==============
NGL sales volumes (mb/d)
- - - UK - -
- - - Rest of Europe - -
178 136 188 USA 150 173
185 124 163 Rest of World 173 204
----------------------- --------------
363 260 351 Total NGL sales volumes 323 377
======================= ==============
Gas, Power and Renewables
The pro forma result for the third quarter and nine months was $98 million and
$395 million, respectively, compared with $87 million and $312 million a year
ago. The third quarter and nine month results reflect improvement in marketing
and trading, including LNG, partly offset by a lower result for the natural gas
liquids business, restructuring charges in the Solar business and the absence of
the contribution from Ruhrgas following the sale of our interest last year.
The increased marketing and trading result for the quarter and nine months was
driven by higher gas sales volumes in North America and strong performance from
the Global LNG business. Third quarter gas sales volumes were up 21%, and equity
LNG sales were up 47%. During the quarter, the first delivery of LNG was made to
the recently completed LNG import and regasification facility in Bilbao (BP 25%)
and the first delivery was made to the facility at Cove Point (operated by
Dominion Resources) in the USA, where BP has a contract for capacity access.
The result for the natural gas liquids business for the third quarter and nine
months is substantially down on a year ago due to continued high gas prices
relative to liquids prices in North America, which has led to lower sales
volumes and margins.
The Solar and Renewables result includes a restructuring charge of $45 million
as a result of decisions taken during the quarter to improve future
profitability. This charge provides for consolidation of manufacturing
operations and staff reductions across the business.
Refining and Marketing
3Q 2Q 3Q Nine Months
2002 2003 2003 $ million 2003 2002
======================= =============
237 889 455 Replacement cost operating profit 1,975 908
83 41 318 Special items 377 (5)
202 205 205 Acquisition amortization 615 591
----------------------- -------------
Pro forma operating result
522 1,135 978 adjusted for special items 2,967 1,494
======================= =============
Refinery throughputs (mb/d)
394 416 405 UK 399 387
956 991 909 Rest of Europe 951 905
1,455 1,465 1,406 USA 1,391 1,438
349 393 366 Rest of World 383 354
----------------------- -------------
3,154 3,265 3,086 Total throughput 3,124 3,084
======================= =============
96.5 96.7 96.2 Refining availability(a)(%) 95.7 96.0
======================= =============
Oil sales volumes (mb/d)
Refined products
258 279 270 UK 276 248
1,604 1,358 1,293 Rest of Europe 1,323 1,441
1,847 1,822 1,828 USA 1,800 1,874
613 607 657 Rest of World 636 578
----------------------- --------------
4,322 4,066 4,048 Total marketing sales 4,035 4,141
2,589 2,957 2,647 Trading/supply sales 2,805 2,489
----------------------- --------------
6,911 7,023 6,695 Total refined product sales 6,840 6,630
3,648 5,679 5,316 Crude oil 5,175 4,458
----------------------- --------------
10,559 12,702 12,011 Total oil sales 12,015 11,088
======================= ==============
Global Indicator Refining Margin(b)
($/bbl)
1.28 2.15 2.47 NWE 2.77 0.66
1.82 3.59 5.61 USGC 5.11 2.16
3.27 4.73 6.39 Midwest 5.09 3.03
3.54 6.34 9.04 USWC 7.39 4.47
0.47 0.66 1.27 Singapore 1.63 0.28
1.98 3.27 4.59 BP Average 4.13 1.90
======================= ==============
(a) Refining availability is the weighted average percentage of the period
that refinery units are available for processing, after accounting for
downtime such as turnarounds.
(b) 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.
Refining and Marketing
The pro forma result for the third quarter, adjusted for special items, was $978
million. This compares with $522 million for the same period last year, an
increase of $456 million or 87%.
The special items of $318 million comprise a $246 million charge resulting from
a reassessment of our environmental remediation provisions and ongoing Veba
integration costs of $72 million. In addition, the third quarter result included
charges of $123 million in respect of new environmental remediation provisions
which were not classified as special items.
The nine months result of $2,967 million is up $1,473 million compared with the
first nine months of last year, an increase of 99%.
The results for the quarter and nine months reflect improved refining margins
and higher marketing margins, particularly retail margins in the USA and Europe,
with some offset from higher gas fuel costs. Improved operating performance also
contributed to the results in the marketing businesses.
Refining throughputs decreased by 2%, compared with a year ago, with
availability at 96.2%. Marketing volumes were 6% lower than a year ago, as
expected, largely due to divestments.
During the quarter, an additional 2,037 sites were reimaged, bringing the total
number of sites with the BP Helios to some 14,000 worldwide.
During October, we announced that H&R WASAG has agreed to purchase our European
Special Products business, including the Neuhof base oil refinery in Hamburg,
Germany. The transaction is subject to a number of approvals and appropriate
employee consultation.
Petrochemicals
3Q 2Q 3Q Nine Months
2002 2003 2003 $ million 2003 2002
======================= =============
132 313 81 Replacement cost operating profit 533 411
140 (5) 43 Special items 38 215
- - - Acquisition amortization - -
----------------------- -------------
Pro forma operating result
272 308 124 adjusted for special items 571 626
======================= =============
120 134 109(b)Chemicals Indicator Margin(a)($/te) 113(b) 103
======================= =============
Petrochemicals production (kte)
858 714 771 UK 2,354 2,523
2,669 2,681 2,724 Rest of Europe 8,168 7,847
2,570 2,503 2,563 USA 7,602 7,754
783 872 982 Rest of World 2,666 2,255
----------------------- --------------
6,880 6,770 7,040 Total production 20,790 20,379
======================= ==============
(a) The Chemicals Indicator Margin (CIM) is a weighted average of
externally-based product margins. It is based on market data collected
by Nexant (formerly Chem Systems) in their quarterly market analyses,
then weighted based on BP's product portfolio. It does not cover our
entire portfolio of products, and consequently is only indicative rather
than representative of the margins achieved by BP in any particular
period. Amongst the products and businesses covered in the CIM are
olefins and derivatives, the aromatics and derivatives, linear alpha-
olefins (LAOs), acetic acid, vinyl acetate monomers and nitriles. Not
included are fabrics and fibres, plastic fabrications, poly alpha-
olefins (PAOs), anhydrides, speciality intermediates, and the remaining
parts of the solvents and acetyls businesses.
(b) Provisional. The data for the third quarter is based on two months'
actuals and one month of provisional data.
Petrochemicals
Petrochemicals pro forma result for the third quarter, after adjusting for
special items, was $124 million, down from $308 million for the prior quarter.
Following a stronger second quarter, petrochemicals margins were much weaker in
the third quarter as a result of higher feedstock costs, particularly in Europe.
Similar margin pressure occurred in the first quarter. The impact of lower
margins was partly offset by slightly higher demand.
The special items of $43 million included a provision to cover future rental
payments on surplus property and a charge resulting from a reassessment of our
environmental remediation provisions.
The nine months result was $55 million below that of a year ago. The effect of
increased volumes and margins was more than offset by lower income from
SARS-affected businesses in Asia, several non-recurring items and portfolio
rationalization.
Petrochemicals production of 7,040 thousand tonnes in the third quarter was 270
thousand tonnes above the second quarter, reflecting capacity additions and
lower turnaround activity. Production for the first nine months was 411 thousand
tonnes higher than last year due to Asian PTA and acetic acid capacity
additions, the Veba acquisition and growth in market demand.
During the quarter, production commenced at a new world-scale high density
polyethylene plant (BP 25%), located in Cedar Bayou, Texas.
Other Businesses and Corporate
3Q 2Q 3Q Nine Months
2002 2003 2003 $ million 2003 2002
================= =============
(241) (134) (310) Replacement cost operating loss (609) (494)
125 - (10) Special items (10) 125
- - - Acquisition amortization - -
----------------- -------------
Pro forma operating result
(116) (134) (320) adjusted for special items (619) (369)
================= =============
Other businesses and corporate comprises Finance, the group's coal asset and
aluminium asset, its investments in PetroChina and Sinopec, interest income and
costs relating to corporate activities. The special item for the quarter is a
credit resulting from a reassessment of our environmental remediation
provisions. Although not classifed as a special item, the result also includes a
charge of $132 million in respect of new environmental remediation provisions.
During October, BP completed the sale of its 50% interest in the Indonesian coal
mining company PT Kaltim Prima Coal to PT Bumi Resources.
Exceptional Items
3Q 2Q 3Q Nine Months
2002 2003 2003 $ million 2003 2002
================= =============
Profit (loss) on sale of fixed assets and
1,794 280 172 businesses or termination of operations 846 2,061
(25) (149) (4) Taxation charge (207) (146)
----------------- -------------
1,769 131 168 Exceptional items after taxation 639 1,915
================= =============
Exceptional items for the third quarter principally relate to net gains from the
sale of various upstream interests.
2003 Dividends
3Q 2Q 3Q Nine Months
2002 2003 2003 2003 2002
================= =============
Dividends per ordinary share
6.00 6.50 6.50 cents 19.25 17.75
3.897 4.039 3.857 pence 11.843 11.823
36.0 39.0 39.0 Dividends per ADS (cents) 115.3 106.5
----------------------- --------------
BP today announced a third quarterly dividend for 2003 of 6.50 cents per
ordinary share. Holders of ordinary shares will receive 3.857 pence per share
and holders of American Depositary Receipts (ADRs) $0.39 per ADS share. The
dividend is payable on 8 December to shareholders on the register on 14
November. 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 8 December. The fourth quarter 2003 results and dividend will be
announced on 10 February 2004.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
"World economic activity has strengthened through the third quarter. The
US appears to have grown strongly, in part owing to further policy
stimulus. Asia has also shown robust growth, in particular in China, but
also in Japan. However, OECD industrial production has been largely flat,
and Europe, as a whole, has grown slowly, with the exception of the UK.
Further economic growth is expected in the fourth quarter.
"Crude oil prices in the third quarter were supported by strong crude
demand on the back of high refining margins, the slow recovery in Iraqi
exports and lower OPEC-10 production following the quota reductions that
became effective in June. Commercial oil inventories remain below normal
seasonal levels but a recovery in US crude stocks has resulted in a
marked narrowing of the WTI-Brent differential. OPEC has announced a new
quota cut, effective 1 November. Oil prices have risen by around $5 per
barrel since OPEC's 24 September announcement. The future path of oil
prices will depend upon the recovery of exports from Iraq and the degree
of OPEC's production restraint.
"US natural gas prices softened in the third quarter but remained high by
historical standards and above residual fuel oil parity. Gas price
differentials in the Rockies and San Juan Basin have narrowed
significantly following the opening of the Kern River pipeline expansion.
High prices throughout 2003 have led to large storage injections through
the summer. Gas in storage has reached historical average levels and is
expected to be sufficient for the forthcoming winter heating season,
assuming normal weather.
"Refining margins have started the fourth quarter below the third quarter
average but remain above historic average levels, particularly in the
USA. The autumn refinery turnaround season is supporting margins at
present but OECD commercial product inventories are recovering. Retail
margins in the third quarter were below the second quarter levels but
continued to be relatively strong, especially in western Europe and
western USA. Fourth quarter margins are expected to soften further and
revert to more typical levels.
"Petrochemical margins in the third quarter fell back from second quarter
levels as a result of increases in feedstock costs despite some recovery
of demand in Europe. Fourth quarter prospects will be influenced by
continued strength in feedstock costs.
"Our capital expenditure, excluding acquisitions, was $9.4 billion for
the nine months. We now expect full year capital expenditure to be
slightly below the $14-14.5 billion range indicated previously, due to
continuous refinement of our spending programmes. As previously
indicated, we expect 2003 to be the peak of our medium term capital
spending programme. As a follow-up to the completion of the TNK-BP deal
in August, we have agreed to invest a further $1.35 billion to expand
TNK-BP to include AAR's 50% interest in Slavneft; we now expect to
complete this transaction by year-end. We also expect to make the
remaining two-thirds of the $2 billion of incremental payments into a
number of the group's pension plans announced in July. We expect gearing
to be within our 25-35% target range following these events. In light of
these factors, we do not currently plan any share buy-backs during the
fourth quarter."
----------------------------------------------------------------------
The foregoing discussion, in particular the statements under "Outlook",
contains forward looking statements particularly those regarding BP's
asset portfolio and changes in it, capital expenditure, costs, future
performance, gearing, margins, pension plan support, prices, timing of
pending transactions, and other trend projections. Forward looking
statements by their nature 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; political stability and economic growth in relevant areas
of the world; changes in governmental regulations; exchange rate
fluctuations; development and use of new technology and successful
commercial relationships; the actions of competitors; natural disasters
and other changes in business conditions; prolonged adverse weather
conditions; and wars and acts of terrorism or sabotage. For more
information you should refer to our Annual Report and Accounts 2002 and
our Annual Report on Form 20-F filed with the US Securities and
Exchange Commission.
----------------------------------------------------------------------
BP p.l.c. and Subsidiaries
Summarized Group Results
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= ==============
$ million $ million
1,572 3,153 3,520 Exploration and Production 10,999 5,958
57 103 98 Gas, Power and Renewables 395 282
237 889 455 Refining and Marketing 1,975 908
132 313 81 Petrochemicals 533 411
(241) (134) (310) Other businesses and corporate (609) (494)
----------------------- --------------
Total replacement cost
1,757 4,324 3,844 operating profit 13,293 7,065
Profit (loss) on sale of
fixed assets and businesses or
1,794 280 172 termination of operations (Note 4) 846 2,061
----------------------- --------------
Replacement cost profit before
3,551 4,604 4,016 interest and tax 14,139 9,126
305 (951) 84 Stock holding gains (losses)(Note 5) (68) 1,303
----------------------- --------------
Historical cost profit before
3,856 3,653 4,100 interest and tax 14,071 10,429
300 191 213 Interest expense (Note 6) 624 947
----------------------- --------------
3,556 3,462 3,887 Profit before taxation 13,447 9,482
713 1,768 1,450 Taxation (Note 7) 5,023 3,217
----------------------- --------------
2,843 1,694 2,437 Profit after taxation 8,424 6,265
3 60 43 Minority shareholders' interest 129 71
----------------------- --------------
2,840 1,634 2,394 Profit for the period 8,295 6,194
----------------------- --------------
1,340 1,434 1,438 Distribution to shareholders 4,258 3,977
======================= ==============
Earnings per ordinary share - cents
12.67 7.41 10.85 Basic 37.37 27.63
12.61 7.39 10.74 Diluted 37.18 27.49
======================= ==============
Replacement Cost Results
Historical cost profit
2,840 1,634 2,394 for the period 8,295 6,194
Stock holding (gains) losses
(305) 951 (84) net of MSI 68 (1,278)
----------------------- --------------
Replacement cost profit
2,535 2,585 2,310 for the period 8,363 4,916
(1,769) (131) (168) Exceptional items, net of tax (639) (1,915)
----------------------- --------------
Replacement cost profit before
766 2,454 2,142 exceptional items 7,724 3,001
----------------------- --------------
Earnings per ordinary share - cents
On replacement cost profit before
3.42 11.08 9.71 exceptional items 34.80 13.39
======================= =============
Summarized Group Balance Sheet
30 September 31 December
2003 2002
--------------------------
$ million
Fixed assets
Intangible assets 13,631 15,566
Tangible assets 88,930 87,682
Investments 16,935 10,811
---------------------
119,496 114,059
---------------------
Current assets
Stocks 10,868 10,181
Debtors 38,243 33,150
Investments 404 215
Cash at bank and in hand 1,091 1,520
---------------------
50,606 45,066
Creditors - amounts falling due within one year
Finance debt 6,811 10,086
Other creditors 41,191 36,215
---------------------
Net current assets (liabilities) 2,604 (1,235)
---------------------
Total assets less current liabilities 122,100 112,824
Creditors - amounts falling due
after more than one year
Finance debt 13,159 11,922
Other creditors 5,778 3,455
Provisions for liabilities and charges
Deferred taxation 14,282 13,514
Other provisions 14,525 13,886
---------------------
Net assets 74,356 70,047
Minority shareholders' interest - equity 1,074 638
---------------------
BP shareholders' interest 73,282 69,409
=====================
Movement in BP shareholders' interest: $ million
At 31 December 2002 69,409
Profit for the period 8,295
Distribution to shareholders (4,258)
Currency translation differences (net of tax) 1,723
Issue of ordinary share capital for employee share schemes 112
Repurchase of ordinary share capital (1,999)
------
At 30 September 2003 73,282
======
Summarized Group Cash Flow Statement
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= ============
$ million $ million
Net cash inflow from
4,376 7,346 4,891 operating activities (a) 18,198 13,145
----------------------- ---------------
30 28 39 Dividends from joint ventures 80 129
----------------------- ---------------
Dividends from
96 177 65 associated undertakings 297 303
----------------------- ---------------
Servicing of finance and returns
on investments
63 52 41 Interest received 124 168
(218) (446) (163) Interest paid (816) (869)
4 42 26 Dividends received 74 64
Dividends paid to
(13) (11) (4) minority shareholders (17) (29)
----------------------- ---------------
Net cash outflow from servicing of
(164) (363) (100) finance and returns on investments (635) (666)
----------------------- ---------------
Taxation
(206) (280) (264) UK corporation tax (856) (560)
(455) (1,573) (539) Overseas tax (2,432) (1,473)
----------------------- ---------------
(661) (1,853) (803) Tax paid (3,288) (2,033)
----------------------- ---------------
Capital expenditure and
financial investment
(2,980) (2,760) (3,063) Payments for fixed assets (8,700) (8,572)
Proceeds from the sale
488 1,652 874 of fixed assets 4,843 1,744
----------------------- ---------------
Net cash outflow for
capital expenditure and
(2,492) (1,108) (2,189) financial investment (3,857) (6,828)
----------------------- --------------
Acquisitions and disposals
Investments in associated
(125) (331) (243) undertakings (760) (756)
Proceeds from the sale of
2,338 - - investment in Ruhrgas - 2,338
(2,607) (150) (28) Acquisitions, net of cash acquired (178) (4,296)
Acquisition of investment in
- - (2,625) TNK-BP joint venture (2,625) -
Net investment in
(23) (2) - other joint ventures (16) (137)
Proceeds from the sale
55 19 - of businesses 179 1,670
----------------------- ---------------
Net cash outflow for
(362) (464) (2,896) acquisitions and disposals (3,400) (1,181)
----------------------- ---------------
(1,346) (1,386) (1,433) Equity dividends paid (4,216) (3,924)
----------------------- ---------------
(523) 2,377 (2,426) Net cash inflow (outflow) 3,179 (1,055)
======================= ===============
(219) 1,355 (1,471) Financing (b) 3,477 (485)
(32) 93 76 Management of liquid resources 182 (164)
(272) 929 (1,031) (Decrease) increase in cash (480) (406)
----------------------- ---------------
(523) 2,377 (2,426) 3,179 (1,055)
======================= ===============
Analysis of Cash Flow
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= ==============
$ million $ million
(a) Reconciliation of historical
cost profit before interest
and tax to net cash inflow
from operating activities
Historical cost profit before
3,856 3,653 4,100 interest and tax 14,071 10,429
3,506 2,653 2,485 Depreciation and amounts provided 7,847 7,886
Exploration expenditure
55 43 75 written off 168 261
Share of profits of joint ventures
(172) (207) (433) and associated undertakings (944) (716)
(62) (100) (72) Interest and other income (220) (243)
(Profit) loss on sale of fixed
(1,796) (280) (172) assets and businesses (846) (2,061)
332 204 765 Charge for provisions 1,171 826
(392) (316) (278) Utilization of provisions (822) (1,003)
(155) 193 (1,048) (Increase) decrease in stocks (479) (1,458)
(379) 3,252 (638) (Increase) decrease in debtors (4,321) (2,403)
(417) (1,749) 107 Increase (decrease) in creditors 2,573 1,627
----------------------- ---------------
Net cash inflow from
4,376 7,346 4,891 operating activities 18,198 13,145
======================= ===============
(b) Financing
(558) (208) (1,433) Long-term borrowing (2,656) (3,056)
567 607 1,774 Repayments of long-term borrowing 2,784 1,464
(1,627) (418) (1,924) Short-term borrowing (2,968) (5,879)
Repayments of short-term
704 388 143 borrowing 4,430 6,414
----------------------- ---------------
(914) 369 (1,440) 1,590 (1,057)
(55) (14) (31) Issue of ordinary share capital (112) (178)
Repurchase of ordinary
750 1,000 - share capital 1,999 750
----------------------- ---------------
Net cash outflow
(219) 1,355 (1,471) (inflow)from financing 3,477 (485)
======================= ===============
Capital Expenditure and Acquisitions
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million $ million
By business
Exploration and Production
270 220 182 UK 598 778
61 73 80 Rest of Europe 204 189
980 1,009 989 USA 2,964 3,224
929 1,160 6,999 Rest of World(a) 9,083 2,935
----------------------- --------------
2,240 2,462 8,250 12,849 7,126
----------------------- --------------
Gas, Power and Renewables
7 24 15 UK 47 28
29 9 6 Rest of Europe(b) 30 120
52 48 18 USA 104 100
19 17 19 Rest of World 43 37
----------------------- --------------
107 98 58 224 285
----------------------- --------------
Refining and Marketing
56 66 89 UK 228 232
198 64 169 Rest of Europe(c) 337 5,486
298 228 322 USA 886 861
53 27 79 Rest of World 130 128
----------------------- --------------
605 385 659 1,581 6,707
----------------------- --------------
Petrochemicals
30 30 51 UK 81 55
58 21 16 Rest of Europe 68 163
49 95 55 USA 196 146
43 52 60 Rest of World 131 174
----------------------- --------------
180 198 182 476 538
----------------------- --------------
48 183 59 Other businesses and corporate(d) 278 367
----------------------- --------------
3,180 3,326 9,208 15,408 15,023
======================= ==============
By geographical area
394 361 377 UK 1,039 1,203
353 167 271 Rest of Europe 640 6,158
1,389 1,542 1,403 USA 4,341 4,387
1,044 1,256 7,157 Rest of World 9,388 3,275
----------------------- --------------
3,180 3,326 9,208 15,408 15,023
======================= ==============
(a) Third quarter and nine months 2003 included the investment in the TNK-BP
joint venture.
Nine months 2002 included the acquisition of an additional interest in
Sidanco.
(b) Nine months 2002 included the acquisition of a 5% stake in Enagas.
(c) Nine months 2002 included the acquisition of 100% of Veba.
(d) Nine months 2002 included the acquisition of the minority interest in
Veba's upstream oil and gas assets.
US dollar/Sterling exchange rates
1.55 1.62 1.61 Average rate for the period 1.61 1.48
1.55 1.65 1.66 Period-end rate 1.66 1.55
======================= =============
Analysis of Replacement Cost Operating Profit
Third Second Third
Quarter Quarter Quarter Nine Nonths
2002 2003 2003 2003 2002
======================= =============
$ million $ million
By business
Exploration and Production
185 473 582 UK 2,189 1,561
213 141 124 Rest of Europe 458 537
661 1,441 1,368 USA 4,614 1,754
513 1,098 1,446 Rest of World 3,738 2,106
----------------------- --------------
1,572 3,153 3,520 10,999 5,958
----------------------- --------------
Gas, Power and Renewables
(66) 18 13 UK 34 (63)
17 (5) (12) Rest of Europe (26) 99
28 85 54 USA 175 16
78 5 43 Rest of World 212 230
----------------------- -------------
57 103 98 395 282
----------------------- -------------
Refining and Marketing
(158) (31) (119) UK (124) (343)
236 423 325 Rest of Europe 1,085 624
55 323 51 USA 471 255
104 174 198 Rest of World 543 372
----------------------- -------------
237 889 455 1,975 908
----------------------- -------------
Petrochemicals
6 25 (63) UK (72) (35)
161 199 54 Rest of Europe 341 272
54 65 47 USA 154 161
(89) 24 43 Rest of World 110 13
----------------------- -------------
132 313 81 533 411
----------------------- -------------
(241) (134) (310) Other businesses and corporate (609) (494)
----------------------- --------------
1,757 4,324 3,844 13,293 7,065
======================= ==============
By geographical area
(131) 363 314 UK 1,730 903
620 756 494 Rest of Europe 1,852 1,532
672 1,863 1,295 USA 5,040 1,933
596 1,342 1,741 Rest of World 4,671 2,697
----------------------- --------------
1,757 4,324 3,844 13,293 7,065
======================= ==============
Included above
104 101 303 Share of profits of joint ventures 521 263
Share of profits of
71 110 128 associated undertakings 418 455
----------------------- --------------
175 211 431 939 718
======================= ==============
Notes
1. Turnover
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= ==============
$ million $ million
By business
6,220 7,433 7,310 Exploration and Production 23,811 18,397
9,313 14,875 15,904 Gas, Power and Renewables 48,777 25,316
35,634 36,949 40,245 Refining and Marketing 118,629 92,393
3,720 4,003 3,798 Petrochemicals 11,739 9,946
Other businesses
108 129 138 and corporate 378 379
----------------------- ---------------
54,995 63,389 67,395 203,334 146,431
Less: sales between
5,941 7,082 7,253 businesses 23,097 17,432
----------------------- ---------------
49,054 56,307 60,142 Group excluding JVs 180,237 128,999
Share of sales by
369 364 914 joint ventures 1,676 1,052
----------------------- ---------------
49,423 56,671 61,056 181,913 130,051
======================= ===============
By geographical area
Group excluding JVs
12,160 13,456 12,856 UK 41,739 35,664
13,460 12,206 12,181 Rest of Europe 37,409 34,798
22,880 25,984 31,011 USA 88,093 57,808
8,537 12,102 12,766 Rest of World 38,604 23,556
----------------------- ---------------
57,037 63,748 68,814 205,845 151,826
Less: sales between
7,983 7,441 8,672 areas 25,608 22,827
----------------------- ---------------
49,054 56,307 60,142 180,237 128,999
======================= ===============
2. Replacement cost profit
Replacement cost profits reflect the current cost of supplies. The
replacement cost profit for the period is arrived at by excluding from
the historical cost profit stock holding gains and losses.
Notes
3. Operating profits are after charging:
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Exploration expense
16 2 11 UK 16 26
5 5 23 Rest of Europe 32 41
53 47 60 USA 144 228
45 47 42 Rest of World 157 170
----------------------- --------------
119 101 136 349 465
======================= ==============
Production taxes (a)
92 58 65 UK petroleum revenue tax 256 245
258 324 351 Overseas production taxes 1,046 667
----------------------- --------------
350 382 416 1,302 912
======================= ==============
(a) Production taxes are charged against Exploration and Production's
operating profit and are not included in the charge for taxation in
Note 7.
4. Analysis of exceptional items
(25) 333 196 Exploration and Production 962 407
1,585 6 (2) Gas, Power and Renewables 4 1,584
262 (49) (21) Refining and Marketing (122) 248
11 2 13 Petrochemicals 22 (134)
(39) (12) (14) Other businesses and corporate (20) (44)
----------------------- --------------
Profit (loss) on sale of fixed
assets and businesses or
1,794 280 172 termination of operations 846 2,061
(25) (149) (4) Taxation charge (207) (146)
----------------------- --------------
Exceptional items
1,769 131 168 after taxation 639 1,915
======================= ==============
Notes
5. Stock holding gains (losses)
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million $ million
3 (3) - Exploration and Production 3 5
2 (72) (7) Gas, Power and Renewables (52) 10
311 (773) 89 Refining and Marketing (64) 1,250
(11) (103) 2 Petrochemicals 45 38
---------------------- --------------
305 (951) 84 (68) 1,303
- - - Minority shareholders' interest - 25
---------------------- --------------
305 (951) 84 (68) 1,278
====================== ==============
6. Interest expense
250 163 178 Group interest payable(a) 528 778
(27) (43) (53) Capitalized (130) (67)
----------------------- --------------
223 120 125 398 711
15 17 23 Joint ventures 53 44
19 12 11 Associated undertakings 33 64
Unwinding of discount
43 42 45 on provisions 131 128
Unwinding of discount on
deferred consideration for
acquisition of investment
- - 9 in TNK-BP 9 -
----------------------- --------------
300 191 213 624 947
======================= ==============
(a) Includes charges
relating to the early
- 3 18 redemption of debt 21 -
----------------------- --------------
7. Charge for taxation
463 1,406 1,528 Current 4,515 2,036
250 362 (78) Deferred(a) 508 1,181
----------------------- --------------
713 1,768 1,450 5,023 3,217
======================= ==============
235 413 280 UK(a) 1,178 1,070
478 1,355 1,170 Overseas 3,845 2,147
----------------------- --------------
713 1,768 1,450 5,023 3,217
======================= ==============
(a) Includes the adjustment
to the North Sea deferred
tax balance for the
supplementary
- - - UK corporation tax of 10% - 355
----------------------- --------------
Notes
8. Analysis of changes in net debt
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Opening balance
21,409 19,042 18,594 Finance debt 22,008 21,417
1,284 1,151 2,115 Less: Cash 1,520 1,358
285 228 329 Current asset investments 215 450
----------------------- ---------------
19,840 17,663 16,150 Opening net debt 20,273 19,609
----------------------- ---------------
Closing balance
22,276 18,594 19,970 Finance debt 19,970 22,276
1,005 2,115 1,091 Less: Cash 1,091 1,005
285 329 404 Current asset investments 404 285
----------------------- ---------------
20,986 16,150 18,475 Closing net debt 18,475 20,986
----------------------- ---------------
Decrease (increase)
(1,146) 1,513 (2,325) in net debt 1,798 (1,377)
======================= ===============
Movement in cash/
(272) 929 (1,031) bank overdrafts (480) (406)
Increase (decrease) in
(32) 93 76 current asset investments 182 (164)
Net cash outflow (inflow)
from financing(excluding
(914) 369 (1,440) share capital) 1,590 (1,057)
Partnership interests
- - - exchanged for BP loan notes - 1,135
- - 93 Debt transferred to TNK-BP 93 -
Exchange of Exchangeable Bonds
for Lukoil American
- - - Depositary Shares 420 -
13 106 (31) Other movements 139 57
- - (12) Debt acquired (12) (999)
----------------------- --------------
Movement in net debt before
(1,205) 1,497 (2,345) exchange effects 1,932 (1,434)
59 16 20 Exchange adjustments (134) 57
----------------------- --------------
Decrease (increase)
(1,146) 1,513 (2,325) in net debt 1,798 (1,377)
======================= ==============
Notes
9. TNK-BP Operational and Financial Information
29 August -
30 September
2003
============
Production (Net of royalties) (BP share)
Crude oil (mb/d) 654
Natural gas (mmcf/d) 239
Total hydrocarbons (mboe/d)(a) 695
Income statement (BP share) $ million
Replacement cost operating profit 158
Profit (loss) on sale of fixed assets and businesses -
Stock holding gains (losses) -
Interest expense(b) (13)
Taxation (30)
Minority shareholders' interest (1)
------------
Net Income 114
============
Replacement cost profit before exceptional items 114
============
Balance Sheet 30 September
2003
============
$ million
Fixed assets - investments
Gross assets 10,131
Gross liabilities (3,267)
------------
6,864
============
Deferred consideration
Due within one year 1,218
Due after more than one year 2,336
------------
3,554
============
Cash Flow
Net investment in joint ventures (2,625)
============
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
(b) Does not include $9 million unwinding of discount on deferred
consideration.
Notes
10. Consolidated statement of cash flows presented on a US GAAP format
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Operating activities
2,843 1,694 2,437 Profit after taxation 8,424 6,265
Adjustments to reconcile
profits after tax to net
cash provided by
operating activities
Depreciation and
3,506 2,653 2,485 amounts provided 7,847 7,886
Exploration expenditure
55 43 75 written off 168 261
Share of (profit) loss of
joint ventures and associates
51 30 (197) less dividends received (315) 11
(Profit) loss on sale
of businesses and
(1,796) (280) (172) fixed assets (846) (2,061)
Working capital movement
(1,002) 1,107 (873) (see analysis below) (1,241) (2,323)
250 362 (78) Deferred taxation 508 1,181
(191) (220) 472 Other 254 (247)
----------------------- ---------------
Net cash provided by
3,716 5,389 4,149 operating activities 14,799 10,973
----------------------- ---------------
Investing activities
(3,007) (2,803) (3,116) Capital expenditures (8,830) (8,639)
Acquisitions, net of
(2,607) (150) (2,653) cash acquired (2,803) (4,296)
Investment in
(125) (331) (243) associated undertakings (760) (756)
Net investment in
(23) (2) - joint ventures (16) (137)
Proceeds from
2,881 1,671 874 disposal of assets 5,022 5,752
----------------------- --------------
Net cash used in
(2,881) (1,615) (5,138) investing activities (7,387) (8,076)
----------------------- --------------
Notes
10. Consolidated statement of cash flows presented on a US GAAP format
(continued)
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Financing activities
Net proceeds from shares
(695) (986) 31 issued (repurchased) (1,887) (572)
Proceeds from
558 208 1,433 long-term financing 2,656 3,056
Repayments of
(567) (607) (1,774) long-term financing (2,784) (1,464)
Net (decrease) increase
923 30 1,781 in short-term debt (1,462) (535)
Dividends paid
(1,346) (1,386) (1,433) - BP shareholders (4,216) (3,924)
(13) (11) (4) - Minority shareholders (17) (29)
----------------------- -------------
Net cash used in
(1,140) (2,752) 34 financing activities (7,710) (3,468)
----------------------- --------------
Currency translation
differences relating to
26 43 6 cash and cash equivalents 58 53
----------------------- --------------
(Decrease) increase in
(279) 1,065 (949) cash and cash equivalents (240) (518)
Cash and cash equivalents
1,569 1,379 2,444 at beginning of period 1,735 1,808
----------------------- --------------
Cash and cash equivalents
1,290 2,444 1,495 at end of period 1,495 1,290
----------------------- --------------
Analysis of working
capital movement
(Increase) decrease
(155) 193 (1,048) in stocks (479) (1,458)
(Increase) decrease
(345) 3,234 (656) in debtors (4,368) (2,479)
Increase (decrease)
(502) (2,320) 831 in creditors 3,606 1,614
----------------------- --------------
Total working
(1,002) 1,107 (873) capital movement (1,241) (2,323)
======================= ==============
Notes
11. Ordinary shares
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
================================== ================
(shares thousand) (shares thousand)
Shares in
issue at period
22,374,747 22,101,622 22,107,715 end (a) 22,107,715 22,374,747
Average number
of shares
outstanding
22,408,297 22,164,026 22,092,365 (b) 22,193,403 22,412,655
---------------------------------- ----------------------
(a) Each BP ADS represents six BP Ordinary Shares.
(b) Excludes shares held by the Employee Share Ownership Plans.
12. Statutory accounts
The financial information shown in this publication is unaudited and
does not constitute statutory accounts. The 2002 group accounts have
been delivered to the UK Registrar of Companies; the report of the
auditors on those accounts was unqualified.
Contacts
London New York
------------------- ----------------
Press Office Roddy Kennedy Ian Stewart
+44 (0)20 7496 4624 +1 212 451 8026
Investor Relations Fergus McLeod Terry LaMore
+44 (0)20 7496 4717 +1 212 451 8034
http://www.bp.com/investors
BP p.l.c.
Group Results
Third Quarter 2003
London 28 October 2003
INVESTOR RELATIONS SUPPLEMENT
REPLACEMENT COST OPERATING PROFIT ADJUSTED FOR SPECIAL ITEMS(a) AND ACQUISITION
AMORTIZATION(b)
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million
Exploration and Production
668 519 614 UK 2,353 2,245
213 141 124 Rest of Europe 458 537
1,059 1,698 1,608 USA 5,451 2,771
1,110 1,231 1,467 Rest of World 4,028 2,786
----------------------- --------------
3,050 3,589 3,813 12,290 8,339
----------------------- --------------
Gas, Power and Renewables
(36) 18 13 UK 34 (33)
17 (5) (12) Rest of Europe (26) 99
28 85 54 USA 175 16
78 5 43 Rest of World 212 230
----------------------- --------------
87 103 98 395 312
----------------------- --------------
Refining and Marketing
(36) 79 (9) UK 206 (24)
274 464 397 Rest of Europe 1,216 711
180 418 392 USA 1,002 435
104 174 198 Rest of World 543 372
----------------------- --------------
522 1,135 978 2,967 1,494
----------------------- --------------
Petrochemicals
6 25 (27) UK (36) (13)
161 199 54 Rest of Europe 341 290
54 60 54 USA 156 196
51 24 43 Rest of World 110 153
----------------------- --------------
272 308 124 571 626
----------------------- --------------
Other businesses and corporate
(63) (122) (99) UK (297) (182)
(7) (2) 3 Rest of Europe (6) -
(36) (51) (235) USA (384) (163)
(10) 41 11 Rest of World 68 (24)
----------------------- --------------
(116) (134) (320) (619) (369)
----------------------- --------------
3,815 5,001 4,693 15,604 10,402
======================= ==============
(a) The special items refer to non-recurring charges and credits. The
special items for the third quarter comprise net charges resulting from
the reassessment of environmental remediation provisions, Veba
integration costs in Refining and Marketing and a provision to cover
future rental payments on surplus property in Petrochemicals.
(b) Acquisition amortization is depreciation and amortization relating to
the fixed asset revaluation adjustments and goodwill consequent upon
the ARCO and Burmah Castrol acquisitions.
PER SHARE AMOUNTS
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
=================================== ======================
Shares in issue
at period
22,374,747 22,101,622 22,107,715 end (thousand) 22,107,715 22,374,747
- ADS equivalent
3,729,125 3,683,604 3,684,619 (thousand) 3,684,619 3,729,125
Average number
of shares
outstanding
22,408,297 22,164,026 22,092,365 (thousand)* 22,193,403 22,412,655
- ADS equivalent
3,734,716 3,694,004 3,682,061 (thousand) 3,698,901 3,735,443
----------------------------------- ----------------------
Replacement cost
profit after
exceptional
2,535 2,585 2,310 items ($m) 8,363 4,916
cents/ordinary
11.31 11.68 10.47 share 37.68 21.93
0.68 0.70 0.63 dollars/ADS 2.26 1.32
----------------------------------- ----------------------
Replacement cost
profit before
exceptional
766 2,454 2,142 items ($m) 7,724 3,001
cents/ordinary
3.42 11.08 9.71 share 34.80 13.39
0.20 0.67 0.58 dollars/ADS 2.09 0.80
----------------------------------- ----------------------
Pro forma result
adjusted for special
2,299 3,115 2,868 items ($m) 9,712 6,080
10.26 14.06 13.00 cents/ordinary share 43.76 27.12
0.62 0.85 0.78 dollars/ADS 2.63 1.62
----------------------------------- ----------------------
* Excludes shares held by the Employee Share Ownership Plans.
ACQUISITION AMORTIZATION BY BUSINESS
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million
Exploration and Production
378 34 32 UK 99 447
283 257 240 USA 756 832
114 133 21 Rest of World 285 182
----------------------- -------------
775 424 293 1,140 1,461
----------------------- -------------
Refining and Marketing
106 110 110 UK 330 303
96 95 95 USA 285 288
----------------------- -------------
202 205 205 615 591
----------------------- -------------
977 629 498 Total acquisition amortization 1,755 2,052
======================= =============
SPECIAL ITEMS BY BUSINESS (PRE-TAX)
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million
Exploration and Production
105 12 - UK 65 237
- - - Rest of Europe - -
115 - - USA 81 185
483 - - Rest of World 5 498
----------------------- -------------
703 12 - 151 920
----------------------- -------------
Gas, Power and Renewables
30 - - UK - 30
- - - Rest of Europe - -
- - - USA - -
- - - Rest of World - -
----------------------- -------------
30 - - - 30
----------------------- -------------
Refining and Marketing
16 - - UK - 16
38 41 72 Rest of Europe 131 87
29 - 246 USA 246 (108)
- - - Rest of World - -
----------------------- -------------
83 41 318 377 (5)
----------------------- -------------
Petrochemicals
- - 36 UK 36 22
- - - Rest of Europe - 18
- (5) 7 USA 2 35
140 - - Rest of World - 140
----------------------- -------------
140 (5) 43 38 215
----------------------- -------------
Other businesses and corporate
35 - - UK - 35
- - - Rest of Europe - -
90 - (10) USA (10) 90
- - - Rest of World - -
----------------------- -------------
125 - (10) (10) 125
----------------------- -------------
1,081 48 351 Total 556 1,285
======================= =============
PRODUCTION AND REALIZATIONS
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
Production
Crude oil (mb/d) (net of royalties)
395 325 312 UK 359 436
101 80 74 Rest of Europe 81 100
561 569 558 USA 578 584
679 738 908 Rest of World 780 646
----------------------- -------------
1,736 1,712 1,852 Total crude oil production 1,798 1,766
======================= =============
Natural gas liquids (mb/d) (net of royalties)
19 18 23 UK 24 23
6 5 5 Rest of Europe 5 6
193 144 141 USA 150 184
29 32 33 Rest of World 32 29
----------------------- -------------
Total natural gas
247 199 202 liquids production 211 242
======================= =============
Liquids (b)(mb/d) (net of royalties)
414 343 335 UK 383 459
107 85 79 Rest of Europe 86 106
754 713 699 USA 728 768
708 770 941 Rest of World 812 675
----------------------- -------------
1,983 1,911 2,054 Total liquids production 2,009 2,008
======================= =============
Natural gas (a) (mmcf/d) (net of royalties)
1,240 1,407 1,267 UK 1,489 1,488
131 103 98 Rest of Europe 111 150
3,450 3,145 3,005 USA 3,194 3,525
3,661 3,784 4,031 Rest of World 3,823 3,468
----------------------- -------------
8,482 8,439 8,401 Total natural gas production 8,617 8,631
======================= =============
Average realizations
Crude oil ($/bbl)
26.78 25.16 27.68 UK 28.33 24.22
25.86 27.09 28.61 USA 29.19 23.15
25.13 24.16 26.30 Rest of World 26.69 22.36
26.01 25.73 27.72 BP Average 28.25 23.35
======================= =============
Natural gas liquids ($/bbl)
15.30 11.97 22.62 UK 20.09 14.43
12.59 17.80 18.37 USA 18.15 11.62
13.75 20.16 21.76 Rest of World 21.65 13.07
13.15 17.49 19.39 BP Average 18.96 12.23
======================= =============
Liquids (b) ($/bbl)
26.26 24.45 27.34 UK 27.83 23.74
22.94 25.61 26.90 USA 27.34 20.71
24.43 23.93 25.98 Rest of World 26.35 21.81
24.40 24.90 26.79 BP Average 27.24 21.99
======================= =============
Natural gas ($/mcf)
2.58 2.84 2.69 UK 2.99 2.75
2.34 4.52 4.14 USA 4.66 2.41
1.99 2.53 2.31 Rest of World 2.51 1.99
2.25 3.39 3.08 BP Average 3.46 2.32
======================= =============
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet =
1 million barrels.
(b) Crude oil and natural gas liquids.
RECONCILIATION OF HISTORICAL COST PROFIT (LOSS)
TO PRO FORMA RESULT ADJUSTED FOR SPECIAL ITEMS
pro forma result
adjusted for
Reported Acquisition Special special
$ million Earnings Amortization Items(a) items
==============================================
2Q 2003
Exploration and Production 3,153 424 12 3,589
Gas, Power and Renewables 103 - - 103
Refining and Marketing 889 205 41 1,135
Petrochemicals 313 - (5) 308
Other businesses & corporate (134) - - (134)
---------------------------------------------
RC operating profit 4,324 629 48 5,001
---------------------------------------------
Interest expense (191) - - (191)
Taxation (1,619) - (16) (1,635)
MSI (60) - - (60)
----------------------------------------------
RC profit before
exceptional items 2,454 629 32 3,115
================================
Exceptional items before tax 280
Taxation on exceptional items (149)
-----
RC profit after
exceptional items 2,585
Stock holding gains (losses) (951)
-----
HC profit 1,634
=====
3Q 2002
Exploration and Production 1,572 775 703 3,050
Gas, Power and Renewables 57 - 30 87
Refining and Marketing 237 202 83 522
Petrochemicals 132 - 140 272
Other businesses & corporate (241) - 125 (116)
---------------------------------------------
RC operating profit 1,757 977 1,081 3,815
---------------------------------------------
Interest expense (300) - - (300)
Taxation (688) - (525) (1,213)
MSI (3) - - (3)
----------------------------------------------
RC profit before
exceptional items 766 977 556 2,299
================================
Exceptional items before tax 1,794
Taxation on exceptional items (25)
-----
RC profit after
exceptional items 2,535
Stock holding gains (losses) 305
-----
HC profit 2,840
=====
(a) The special items for the second quarter 2003 are restructuring costs in
Exploration and Production, Veba integration costs in Refining and
Marketing and a reduction in the provision for costs associated with
closure of polypropylene capacity in Petrochemicals. The special items
in the third quarter 2002 include impairment charges and restructuring
costs in Exploration & Production, an impairment charge in Gas, Power &
Renewables, integration and certain other costs in Refining and
Marketing, an impairment charge in Petrochemicals and a provision to
cover future rental payments on surplus leasehold office accommodation
in Other businesses and corporate.
RECONCILIATION OF HISTORICAL COST PROFIT (LOSS)
TO PRO FORMA RESULT ADJUSTED FOR SPECIAL ITEMS
pro forma result
adjusted for
Reported Acquisition Special special
$ million Earnings Amortization Items(a) items
==============================================
Nine months 2003
Exploration and Production 10,999 1,140 151 12,290
Gas, Power and Renewables 395 - - 395
Refining and Marketing 1,975 615 377 2,967
Petrochemicals 533 - 38 571
Other businesses & corporate (609) - (10) (619)
----------------------------------------------
RC operating profit 13,293 1,755 556 15,604
----------------------------------------------
Interest expense (624) - - (624)
Taxation (4,816) - (323) (5,139)
MSI (129) - - (129)
----------------------------------------------
RC profit before
exceptional items 7,724 1,755 233 9,712
================================
Exceptional items before tax 846
Taxation on exceptional items (207)
-----
RC profit after
exceptional items 8,363
Stock holding gains (losses) (68)
-----
HC profit 8,295
=====
Nine months 2002
Exploration and Production 5,958 1,461 920 8,339
Gas, Power and Renewables 282 - 30 312
Refining and Marketing 908 591 (5) 1,494
Petrochemicals 411 - 215 626
Other businesses & corporate (494) - 125 (369)
----------------------------------------------
RC operating profit 7,065 2,052 1,285 10,402
----------------------------------------------
Interest expense (947) - - (947)
Taxation (3,071) - (242) (3,313)
MSI (46) - (16) (62)
----------------------------------------------
RC profit before
exceptional items 3,001 2,052 1,027 6,080
================================
Exceptional items before tax 2,061
Taxation on exceptional items (146)
-----
RC profit after
exceptional items 4,916
Stock holding gains (losses) 1,278
-----
HC profit 6,194
=====
(a) The special items for the nine months 2003 comprise restructuring and
impairment charges in Exploration and Production, Veba integration costs
and environmental charges in Refining and Marketing, restructuring
costs, environmental charges and a reduction in the provision for costs
associated with closure of polypropylene capacity in Petrochemicals, a
credit related to environmental remediation provisions in Other
Businesses and Corporate and tax restructuring benefits. The special
items for the nine months 2002 comprise restructuring charges for
Exploration and Production and Petrochemicals, Veba, Solvay and
Erdolchemie integration costs, business interruption insurance proceeds
and costs related to a pipeline incident in Refining and Marketing, an
adjustment to the North Sea deferred tax balance for the supplementary
UK corporation tax rate, impairment charges in Exploration and
Production and Gas, Power and Renewables and provisions against the
investments in Indonesia in Petrochemicals and for lease payments for
vacant office space in Other businesses and corporate.
REPLACEMENT COST OPERATING PROFIT ADJUSTED FOR
NON-CASH CHARGES AND CERTAIN OTHER ITEMS
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million
Replacement cost operating profit
1,757 4,324 3,844 (reported) (a) 13,293 7,065
3,506 2,653 2,485 Depreciation and amounts provided (b) 7,847 7,886
55 43 75 Exploration expenditure written off 168 261
Dividends from JVs and associates
(49) (6) (327) less share of RCOP (562) (286)
(13) (11) (4) Dividends paid to minority shareholders (17) (29)
(60) (112) 487 Adjust provisions to cash basis (c) 349 (177)
Adjust interest and other income
5 (6) (5) to cash basis (d) (22) (11)
----------------------- -------------
5,201 6,885 6,555 21,056 14,709
(712) (1,861) (856) Tax paid adjusted for certain items* (3,367)(2,191)
----------------------- -------------
4,489 5,024 5,699 Adjusted RCOP after tax paid 17,689 12,518
----------------------- -------------
* Calculation of tax paid adjusted
for certain items
(661) (1,853) (803) Cash tax paid (3,288)(2,033)
25 149 4 Tax charge on exceptional items 207 146
(76) (157) (57) Tax shield assumption + (286) (304)
----------------------- -------------
(712) (1,861) (856) (3,367)(2,191)
----------------------- -------------
+ Calculation of tax shield assumption
(218) (446) (163) Interest paid (816) (869)
35% 35% 35% Tax rate assumption (e) 35% 35%
----------------------- -------------
(76) (157) (57) (286) (304)
----------------------- -------------
(a) Total replacement cost operating profit is before tax, exceptional
items, stock holding gains and losses and interest expense.
(b) Includes depreciation and amortization relating to the fixed asset
revaluation adjustment and goodwill consequent upon the ARCO and Burmah
Castrol acquisitions.
(c) Add the amount by which the charge for provisions exceeds the
utilization of provisions.
(d) Deduct the amount by which interest and other income exceeds the total
of interest received and dividends received from the group cash flow
statement.
(e) Deemed tax rate for tax shield adjustment is equal to the US statutory
tax rate.
RETURN ON AVERAGE CAPITAL EMPLOYED
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million
Replacement cost basis
766 2,454 2,142 RC profit before exceptional items 7,724 3,001
145 78 82 Interest + 259 462
3 60 43 Minority shareholders' interest 129 46
----------------------- --------------
914 2,592 2,267 Adjusted RC profit 8,112 3,509
======================= ==============
90,507 91,420 93,001 Average capital employed 93,191 89,328
4.0% 11.3% 9.8% ROACE - replacement cost basis 11.6% 5.2%
----------------------- --------------
Pro forma basis
914 2,592 2,267 Adjusted RC profit 8,112 3,509
977 629 498 Acquisition amortization 1,755 2,052
556 32 228 Special items (post-tax) 233 1,043
90,507 91,420 93,001 Average capital employed 93,191 89,328
Average capital employed
17,581 14,839 14,110 acquisition adjustment 15,211 18,008
----------------------- --------------
Average capital employed
72,926 76,581 78,891 (pro forma basis) 77,980 71,320
ROACE - Pro forma basis
13.4% 17.0% 15.2% adjusted for special items 17.3% 12.3%
----------------------- -------------
Historical cost basis
Historical cost profit
2,840 1,634 2,394 after exceptional items 8,295 6,194
145 78 82 Interest + 259 462
3 60 43 Minority shareholders' interest 129 71
----------------------- --------------
2,988 1,772 2,519 Adjusted historical cost profit 8,683 6,727
======================= ==============
90,507 91,420 93,001 Average capital employed 93,191 89,328
13.2% 7.8% 10.8% ROACE - historical cost basis 12.4% 10.0%
+ Excludes interest on joint venture and associated undertakings debt as
well as unwinding of discount on provisions and effect of change in
discount rate on provisions, and is on a post-tax basis, using a deemed
tax rate equal to the US statutory tax rate.
NET DEBT RATIO - NET DEBT: NET DEBT + EQUITY
Third Second Third
Quarter Quarter Quarter Nine Months
2002 2003 2003 2003 2002
======================= =============
$ million
22,276 18,594 19,970 Gross debt 19,970 22,276
1,290 2,444 1,495 Cash and current asset investments 1,495 1,290
----------------------- --------------
20,986 16,150 18,475 Net debt 18,475 20,986
======================= =============
69,203 73,081 74,356 Equity 74,356 69,203
23% 18% 20% Net debt ratio 20% 23%
----------------------- --------------
17,134 14,469 13,751 Acquisition adjustment 13,751 17,134
----------------------- --------------
29% 22% 23% Net debt ratio - pro forma basis 23% 29%
======================= ==============
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: 28 October, 2003 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary