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 5 February, 2008
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
Fourth Quarter and Full Year 2007
London 5 February 2008
FOR IMMEDIATE RELEASE
-----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006 %
========================== =========================
2,880 4,406 4,399 Profit for the period* 20,845 22,000
1,015 (539) (1,427) Inventory holding (gains) losses (3,558) 253
-------------------------- -------------------------
3,895 3,867 2,972 Replacement cost profit 17,287 22,253 (22)
========================== =========================
10.37 9.94 7.66 - per ordinary share (pence) 45.10 60.38
20.08 20.34 15.69 - per ordinary share (cents) 90.20 111.10 (19)
1.21 1.22 0.94 - per ADS (dollars) 5.41 6.67
========================== =========================
- BP's fourth-quarter replacement cost profit was $2,972 million,
compared with $3,895 million a year ago, a decrease of 24%. For the full year,
replacement cost profit was $17,287 million compared with $22,253 million, down
22%.
- The fourth-quarter result included a net non-operating charge of $1,030
million, including pre-tax charges of $603 million for the impairment of US
Convenience Retail and $338 million for restructuring, integration and
rationalization costs associated with BP's Forward Agenda. This compares with a
net non-operating charge of $152 million in the fourth quarter of 2006. For the
full year, the net non-operating charge was $272 million compared with a net
non-operating gain of $1,062 million in 2006.
- Net cash provided by operating activities for the quarter and year was
$4.3 billion and $24.7 billion respectively compared with $5.0 billion and $28.2
billion a year ago.
- The effective tax rate on replacement cost profit from continuing
operations for the fourth quarter was 45% compared with 25% a year ago. For the
year, the rate was 37% compared with 35% a year ago. The increased rate in the
fourth quarter reflects the effect of inventory holding gains and losses, which
are eliminated in the replacement cost profit, while the tax charge remains
unadjusted and includes the tax effect on inventory holding gains and losses. If
this effect is excluded, the rate would have been 38% in the fourth quarter
compared to 31% a year ago.
- Net debt at the end of the quarter was $27.5 billion. The ratio of net
debt to net debt plus equity was 23% compared with 20% a year ago.
- Capital expenditure, excluding acquisitions and asset exchanges, was
$6.6 billion for the quarter and for the year was $19.2 billion. Total capital
expenditure and acquisitions was $6.6 billion for the quarter and $20.6 billion
for the year. The year included $1.1 billion in respect of the acquisition of
Chevron's Netherlands manufacturing company. Disposal proceeds were $0.4 billion
for the quarter and were $4.3 billion for the year.
- The quarterly dividend, to be paid in March, is 13.525 cents per share
($0.8115 per ADS) compared with 10.325 cents per share a year ago. For the year,
the dividend showed an increase of 16%. The dividend increase marks a shift in
the balance between dividends and share buybacks as a means of returning value
to shareholders. In sterling terms, the quarterly dividend is 6.813 pence per
share, compared with 5.258 pence per share a year ago; for the year the increase
was 7%. During the quarter, the company repurchased 121 million of its own
shares for cancellation at a cost of $1.5 billion. For the year, share
repurchases were 663 million at a cost of $7.5 billion.
- Information on fair value accounting effects in relation to Refining
and Marketing and Gas, Power and Renewables is set out on page 10.
* Profit attributable to BP shareholders.
The commentaries above and following are based on replacement cost profit and
should be read in conjunction with the cautionary statement on page 11.
Analysis of Replacement Cost Profit and Reconciliation
--------------------------------------------
to Profit for the Period
------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
=============================== =================
5,063 6,343 7,648 Exploration and Production 26,927 29,647
312 376 (1,337) Refining and Marketing 2,617 5,283
470 (57) 219 Gas, Power and Renewables 558 1,376
(276) (451) (373) Other businesses and corporate (1,104) (947)
(103) 59 (277) Consolidation adjustments (204) 52
------------------------------- -----------------
5,466 6,270 5,880 RC profit before interest and tax 28,794 35,411
------------------------------- -----------------
(149) (173) (242) Finance costs and other finance income (741) (516)
(1,347) (2,158) (2,561) Taxation (10,442) (12,331)
(75) (72) (105) Minority interest (324) (286)
------------------------------- -----------------
RC profit from continuing operations
3,895 3,867 2,972 attributable to BP shareholders(a) 17,287 22,278
=============================== =================
Inventory holding gains (losses) from
(1,015) 539 1,427 continuing operations 3,558 (253)
------------------------------- -----------------
Profit for the period from continuing
operations attributable to
2,880 4,406 4,399 BP shareholders 20,845 22,025
Profit (loss) for the period from Innovene
- - - operations(b) - (25)
------------------------------- -----------------
Profit for the period attributable to
2,880 4,406 4,399 BP shareholders 20,845 22,000
=============================== =================
RC profit from continuing operations
attributable
3,895 3,867 2,972 to BP shareholders 17,287 22,278
- - - RC profit (loss) from Innovene operations - (25)
------------------------------- -----------------
3,895 3,867 2,972 Replacement cost profit 17,287 22,253
=============================== =================
(a)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.
(b)See further detail in Note 2.
Results include Non-operating Items
------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
================================ ===============
(177) 22 (616) Exploration and Production 553 2,382
(53) (344) (1,146) Refining and Marketing (952) (384)
215 (8) (62) Gas, Power and Renewables (97) 181
(188) (205) (63) Other businesses and corporate (227) (75)
-------------------------------- ---------------
(203) (535) (1,887) (723) 2,104
51 189 857 Taxation(a) 451 (851)
-------------------------------- ---------------
(152) (346) (1,030) Continuing operations (272) 1,253
-------------------------------- ---------------
- - - Innovene operations - (184)
- - - Taxation - (7)
-------------------------------- ---------------
(152) (346) (1,030) Total for all operations (272) 1,062
================================ ===============
An analysis of non-operating items by type is provided on page 21.
(a)Tax on non-operating items is calculated using the quarter's effective tax
rate on replacement cost profit from continuing operations.
Per Share Amounts
----------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
================================ ======================
Results for the period ($m)
2,880 4,406 4,399 Profit(a) 20,845 22,000
3,895 3,867 2,972 Replacement cost profit 17,287 22,253
-------------------------------- ----------------------
Shares in issue at period end
19,510,496 19,019,579 18,922,786 (thousand)(b) 18,922,786 19,510,496
3,251,749 3,169,930 3,153,798 - ADS equivalent (thousand)(b) 3,153,798 3,251,749
Average number of shares outstanding
19,610,871 19,061,853 18,979,138 (thousand)(b) 19,163,389 20,027,527
3,268,479 3,176,976 3,163,190 - ADS equivalent (thousand)(b) 3,193,898 3,337,921
Shares repurchased in the period
310,385 128,253 121,175 (thousand) 663,150 1,334,363
Per ordinary share (cents)
15.04 23.18 23.15 Profit for the period 108.76 109.84
20.08 20.34 15.69 RC profit for the period 90.20 111.10
Per ADS (cents)
90.24 139.08 138.90 Profit for the period 652.56 659.04
120.48 122.04 94.14 RC profit for the period 541.20 666.60
-------------------------------- ----------------------
(a)Profit attributable to BP shareholders.
(b)Excludes treasury shares.
Dividends
---------
Dividends Payable
BP today announced a dividend of 13.525 cents per ordinary share to be paid in
March. Holders of ordinary shares will receive 6.813 pence per share and holders
of American Depository Receipts (ADRs) $0.8115 per ADS. The dividend is payable
on 10 March to shareholders on the register on 22 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 10 March.
Dividends Paid
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
================================ =====================
Dividends paid per ordinary share
9.825 10.825 10.825 Cents 42.300 38.400
5.241 5.278 5.308 Pence 20.995 21.104
58.95 64.95 64.95 Dividends paid per ADS (cents) 253.80 230.40
================================ =====================
Net Debt Ratio - Net Debt: Net Debt + Equity
-----------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
================================ =====================
24,010 25,245 31,045 Gross debt 31,045 24,010
2,590 2,410 3,562 Cash and cash equivalents 3,562 2,590
-------------------------------- ---------------------
21,420 22,835 27,483 Net debt 27,483 21,420
================================ =====================
85,465 91,494 94,652 Equity 94,652 85,465
20% 20% 23% Net debt ratio 23% 20%
================================ =====================
Exploration and Production
----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
================================ =================
5,057 6,347 7,643 Profit before interest and tax(a) 26,938 29,629
6 (4) 5 Inventory holding (gains) losses (11) 18
-------------------------------- -----------------
Replacement cost profit before interest
5,063 6,343 7,648 and tax 26,927 29,647
================================ =================
By region:
1,534 703 816 UK 3,694 5,839
249 221 262 Rest of Europe 1,386 1,209
952 1,843 2,213 US 7,746 9,344
2,328 3,576 4,357 Rest of World 14,101 13,255
-------------------------------- -----------------
5,063 6,343 7,648 26,927 29,647
================================ =================
Results include:
Non-operating items
289 33 (538) UK (173) 821
(13) 7 (3) Rest of Europe 535 43
(269) (15) 222 US 376 1,758
(184) (3) (297) Rest of World (185) (240)
-------------------------------- -----------------
(177) 22 (616) 553 2,382
================================ =================
Exploration expense
6 2 17 UK 46 20
- - - Rest of Europe - -
324 60 61 US 252 633
78 182 123 Rest of World 458 392
-------------------------------- -----------------
408 244 201 756 1,045
================================ =================
Production (net of royalties)(b)
Liquids (mb/d) (net of royalties)(c)
239 151 199 UK 201 253
57 52 50 Rest of Europe 51 61
533 475 523 US 514 547
1,587 1,614 1,697 Rest of World 1,648 1,614
-------------------------------- -----------------
2,416 2,292 2,469 2,414 2,475
================================ =================
Natural gas (mmcf/d) (net of royalties)
888 582 853 UK 768 936
90 26 26 Rest of Europe 29 92
2,196 2,186 2,183 US 2,174 2,376
5,082 5,085 5,275 Rest of World 5,172 5,013
-------------------------------- -----------------
8,256 7,879 8,337 8,143 8,417
================================ =================
Total hydrocarbons (mboe/d)(d)
392 251 346 UK 333 414
73 57 55 Rest of Europe 56 77
912 851 900 US 888 957
2,463 2,492 2,606 Rest of World 2,541 2,478
-------------------------------- -----------------
3,840 3,651 3,907 3,818 3,926
================================ =================
Average realizations(e)
54.13 71.12 82.72 Total liquids ($/bbl) 67.45 59.23
4.38 3.93 4.83 Natural gas ($/mcf) 4.53 4.72
40.13 46.36 56.03 Total hydrocarbons ($/boe) 47.18 43.60
================================ =================
(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 sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
(f)Because of rounding, some totals may not agree exactly with the sum of their
component parts.
Exploration and Production
----------------------
The replacement cost profit before interest and tax for the fourth quarter was
$7,648 million, an increase of 51% over the fourth quarter of 2006. This result
benefited from higher reported volumes, higher overall realizations and the
favourable effect of lagged tax reference prices in TNK-BP, partially offset by
higher costs reflecting the impacts of sector-specific inflation, project
start-up costs and higher depreciation charges. Additionally, the fourth-quarter
result was impacted by the retroactive effect of increased production taxes in
Alaska, which were effective mid-year. The net non-operating charge for the
quarter was $616 million and included fair value losses of $430 million on
embedded derivatives related to North Sea gas contracts as well as restructuring
costs. The fourth quarter of 2006 included a net charge of $177 million.
The replacement cost profit before interest and tax of $26,927 million for the
full year represented a decrease of 9% on the previous year. This result
benefited from higher liquids realizations and the favourable effect of lagged
tax reference prices in TNK-BP, but was impacted by lower gas realizations,
lower reported volumes, higher production taxes and higher costs reflecting the
impacts of sector-specific inflation, increased integrity spend and higher
depreciation charges. Additionally, the full-year result was lower due to the
absence of disposal gains in equity-accounted entities in 2006, primarily the
$892 million gain on TNK-BP's disposal of the Udmurtneft assets. The full-year
result included a net non-operating gain of $553 million compared with a $2,382
million gain in 2006.
Reported production for the fourth quarter was 3,907mboe/d, 2% higher than in
the fourth quarter of 2006. After adjusting for the effect of acquisitions and
disposals and the impact of lower entitlement in our production-sharing
agreements (PSAs), production was 3% higher than in the fourth quarter of 2006.
Reported production of 3,818mboe/d for the full year was 3% lower than in 2006
on a reported basis and was flat after adjusting for the effects of
acquisitions, disposals and lower PSA entitlements.
During the fourth quarter, we started production at five BP-operated major
projects: Mango and Cashima in Trinidad, Atlantis and King Subsea Pump in the
Gulf of Mexico and Greater Plutonio in Angola. Additionally, we had first
production from the Denise field in Egypt, where BP holds a 50% interest and,
shortly after the end of the quarter, we also had first production from the
Mondo field within the Kizomba C development in Angola, where BP holds a 26.67%
interest.
Furthermore, we had further exploration success in Azerbaijan with the Shah
Deniz SDX-04 discovery, in Angola with the Portia discovery and in Egypt with
the Satis and Taurus Deep discoveries.
In December, we announced an agreement with Husky Energy Inc. to create an
integrated North American oil sands business, by means of two separate joint
ventures. In one, BP will take a 50% interest in Husky Energy's Sunrise field in
Alberta, Canada, while in the other, Husky will take a 50% interest in BP's
Toledo refinery.
Also in December, the Libyan General People's Committee ratified the exploration
and production agreement between BP and Libya's National Oil Company, which we
announced in May of 2007.
During 2007, we extended our track record in achieving reported reserves
replacement of more than 100%, excluding acquisitions and disposals, in spite of
significant PSA effects associated with high oil prices.
Refining and Marketing
-------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
=============================== ==================
(706) 936 26 Profit before interest and tax(a) 6,072 5,041
1,018 (560) (1,363) Inventory holding (gains) losses (3,455) 242
------------------------------- ------------------
Replacement cost profit before
312 376 (1,337) interest and tax 2,617 5,283
=============================== ==================
By region:
190 22 122 UK 1,097 351
336 492 278 Rest of Europe 1,652 2,249
(421) (527) (1,811) US (1,252) 1,353
207 389 74 Rest of World 1,120 1,330
------------------------------- ------------------
312 376 (1,337) 2,617 5,283
=============================== ==================
Results include:
Non-operating items
23 (4) (10) UK 667 15
(89) (16) (56) Rest of Europe (128) 93
25 (316) (977) US (1,181) (589)
(12) (8) (103) Rest of World (310) 97
------------------------------- ------------------
(53) (344) (1,146) (952) (384)
=============================== ==================
Refinery throughputs (mb/d)
188 - - UK 67 165
660 735 689 Rest of Europe 691 648
1,052 1,109 996 US 1,064 1,110
294 304 313 Rest of World 305 275
------------------------------- ------------------
2,194 2,148 1,998 Total throughput 2,127 2,198
=============================== ==================
81.6 83.4 84.0 Refining availability (%)(b) 82.9 82.5
=============================== ==================
Oil sales volumes (mb/d)
Refined products
354 350 328 UK 339 356
1,368 1,329 1,330 Rest of Europe 1,294 1,340
1,541 1,535 1,455 US 1,533 1,595
601 641 680 Rest of World 640 581
------------------------------- ------------------
3,864 3,855 3,793 Total marketing sales 3,806 3,872
1,920 1,687 1,696 Trading/supply sales 1,818 1,929
------------------------------- ------------------
5,784 5,542 5,489 Total refined product sales 5,624 5,801
1,959 1,709 1,659 Crude oil 1,885 2,110
------------------------------- ------------------
7,743 7,251 7,148 Total oil sales 7,509 7,911
=============================== ==================
Global Indicator Refining Margin ($/bbl)(c)
2.49 3.82 4.84 NWE 4.99 3.92
7.92 12.58 6.82 USGC 13.48 12.00
5.42 14.31 3.39 Midwest 12.81 9.14
14.59 6.90 8.49 USWC 15.05 14.84
2.95 4.52 5.80 Singapore 5.29 4.22
6.30 8.05 5.68 BP Average 9.94 8.39
=============================== ==================
Chemicals production (kte)
159 237 228 UK 967 990
797 587 660 Rest of Europe 2,650 3,156
976 1,117 1,088 US 4,328 3,464
1,357 1,569 1,497 Rest of World 6,083 6,454
------------------------------- ------------------
3,289 3,510 3,473 Total production 14,028 14,064
=============================== ==================
(a)Profit from continuing operations and includes profit after interest and tax
of equity-accounted entities.
(b)Refining availability is defined as the ratio of units which are available
for processing, regardless of whether they are actually being used, to total
capacity. Where there is planned maintenance, such capacity is not regarded as
being available. During 2006 and 2007, there was planned maintenance of a
substantial part of the Texas City refinery.
(c)The Global Indicator Refining Margin (GIM) is the average of 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 replacement cost result before interest and tax was a loss of $1,337 million
for the fourth quarter of 2007 and was a profit of $2,617 million for the full
year. This compares with a replacement cost profit before interest and tax for
the fourth quarter and full year of 2006 of $312 million and $5,283 million
respectively. The fourth-quarter result included a net non-operating charge of
$1,146 million, primarily reflecting impairment charges associated with our exit
from the operated Convenience Retail channel in the US, restructuring costs, and
a reassessment of certain provisions. The full-year result included a charge of
$952 million for non-operating items compared with a charge of $384 million in
2006.
Compared with a year ago, the fourth-quarter result reflected a lower refining
margin environment, higher refining outages and costs, including those
associated with the repair and recommissioning activities at our Texas City and
Whiting US refineries, and a lower contribution from supply optimization. The
quarter's result also reflected the impact of a major scheduled turnaround at
the Toledo refinery. In addition, the charge for non-operating items was
significantly higher than a year ago. These factors were partially offset by the
effects of continued strong performance from a number of our marketing
businesses. The refining outages outlined above, and the majority of the
non-operating charges, related to our operations in the US, leading to the
fourth-quarter loss of $1,811 million in the US (which included non-operating
charges of $977 million). This compares with a loss of $421 million a year ago,
which included a non-operating gain of $25 million.
The average refining Global Indicator Margin (GIM) and BP's actual refining
margin for the fourth quarter were both lower than those in the fourth quarter
of 2006, mainly due to improved product stock levels and rising crude prices,
most notably in the US.
During 2007, the segment continued to focus on the restoration of operations at
the Texas City refinery and on investments in integrity management throughout
our refining portfolio. We have also focused on the repair and recommissioning
of the Whiting refinery following the operational issues in March 2007. In many
parts of the refining portfolio and the other market-facing businesses, we
delivered high reliability and improved results versus 2006. However for the
full year, compared with 2006, the impact of the outages and recommissioning
costs at the Texas City and Whiting refineries, cost inflation, lower results
from supply optimization and higher charges in respect of non-operating items
more than offset increased margins in both refining and marketing.
Refining throughputs were 1,998mb/d for the quarter, 196mb/d lower than the
fourth quarter of 2006. The reduction was mainly due to the effects of the
Coryton refinery disposal, major scheduled turnarounds at the Rotterdam and
Toledo refineries, as well as the outage at the Whiting refinery; this was
partially offset by improvements in the remainder of the refining portfolio. For
the full year, throughputs were 2,127mb/d, 71mb/d lower than in 2006. Refining
availability for the quarter and full year was 84.0% and 82.9% respectively,
higher than in the corresponding periods of 2006, reflecting the ongoing
progress towards Texas City recommissioning.
Marketing volumes were 3,793mb/d in the fourth quarter and 3,806mb/d for the
full year, slightly lower than in the equivalent periods last year, reflecting
reduced industry demand in Europe and supply disruptions caused by the outage at
the Whiting refinery.
By the end of 2007, the Whiting refinery had recommenced sour crude processing
and available distillation capacity exceeded 300,000bpd, in line with prior
guidance. At Texas City, we have successfully recommissioned the three
desulphurisation and upgrading units necessary to allow restart of the remaining
crude distillation capacity. The final sour crude unit is mechanically complete
and is expected to be fully operational during the first quarter. By mid-2008,
we expect most of the economic capability at the Texas City refinery to have
been restored.
On 15 November 2007, BP announced that it would sell all of its company-owned
and company-operated convenience sites in the US. The majority of sites will be
sold to franchisees with the remaining sites sold to dealers and large
distributors (jobbers).
On 5 December 2007, BP announced it had agreed to create an integrated North
American oil sands business with Husky Energy Inc., by means of two separate
joint ventures, one associated with BP's Toledo refinery.
In mid-January 2008, BP and Sinopec signed a memorandum of understanding to add
a new 650,000 tonnes per annum acetic acid plant at their YARACO joint venture
in Chongqing, upstream Yangtze River, south-west China. This world-scale acetic
acid plant, using BP's leading Cativa(R) technology, is expected to come
onstream in 2011.
Gas, Power and Renewables
-----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
============================= ================
468 (71) 304 Profit before interest and tax(a) 674 1,321
2 14 (85) Inventory holding (gains) losses (116) 55
----------------------------- ----------------
Replacement cost profit (loss) before interest
470 (57) 219 and tax 558 1,376
============================= ================
By region:
147 (85) (103) UK (178) 217
143 (37) (14) Rest of Europe (52) 123
114 (23) 23 US 128 692
66 88 313 Rest of World 660 344
----------------------------- ----------------
470 (57) 219 558 1,376
============================= ================
Results include:
Non-operating items
56 (12) (31) UK (74) 88
189 - (26) Rest of Europe (26) 189
- 4 (5) US 1 4
(30) - - Rest of World 2 (100)
----------------------------- ----------------
215 (8) (62) (97) 181
============================= ================
(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 $219 million and $558 million respectively, compared with $470
million and $1,376 million a year ago. The net non-operating charge for the
fourth quarter was $62 million, comprising net fair value losses on embedded
derivatives, a provision for restructuring costs, a charge for the impairment of
a solar asset and a net disposal gain. The corresponding quarter of 2006
included a net non-operating gain of $215 million. For the full year, the net
charge for non-operating items was $97 million compared with a net gain of $181
million in 2006.
The fourth-quarter result was lower than the same period in 2006 primarily due
to the change in non-operating items, described above, and lower contributions
from the marketing and trading business, partly offset by better NGL operating
performance. The full-year result was also lower than in 2006 reflecting a net
charge for non-operating items (compared with a net gain last year) and lower
marketing and trading contributions, partly offset by improved NGL performance.
In the fourth quarter of 2007, Alternative Energy commenced full commercial
operations at the 300MW Cedar Creek project in Colorado, US and at the 40MW
Dhule project in India.
Information on fair value accounting effects is set out on page 10.
Other Businesses and Corporate
--------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
========================= =================
(265) (462) (389) Profit (loss) before interest and tax(a) (1,128) (885)
(11) 11 16 Inventory holding (gains) losses 24 (62)
------------------------- -----------------
Replacement cost profit (loss) before
(276) (451) (373) interest and tax (1,104) (947)
========================= =================
By region:
280 124 (63) UK (10) (268)
(97) (77) 23 Rest of Europe (35) (137)
(319) (359) (316) US (901) (425)
(140) (139) (17) Rest of World (158) (117)
------------------------- -----------------
(276) (451) (373) (1,104) (947)
========================= =================
Results include:
Non-operating items
13 1 (26) UK (25) (12)
(2) (11) 24 Rest of Europe 41 (5)
(199) (199) (61) US (247) (75)
- 4 - Rest of World 4 17
------------------------- -----------------
(188) (205) (63) (227) (75)
========================= =================
(a)Profit from continuing operations and includes profit after interest and tax
of equity-accounted entities.
Other businesses and corporate comprises Treasury (previously referred to as
Finance), the group's aluminium asset, interest income and costs relating to
corporate activities. The fourth quarter's result included a net charge of $63
million in respect of non-operating items, compared with a net charge of $188
million a year ago.
Information on fair value accounting effects
-----------------------------------
BP uses derivative instruments to manage the economic exposure relating to
inventories above normal operating requirements of crude oil, natural gas and
petroleum products as well as certain contracts to supply physical volumes at
future dates. Under IFRS, these inventories and contracts are recorded at
historic cost and on an accruals basis respectively. The related derivative
instruments, however, are required to be recorded at fair value with gains and
losses recognized in income because hedge accounting is either not permitted or
not followed, principally due to the impracticality of effectiveness testing
requirements. Therefore, measurement differences in relation to recognition of
gains and losses occur. Gains and losses on these inventories and contracts are
not recognized until the commodity is sold in a subsequent accounting period.
Gains and losses on the related derivative commodity contracts are recognized in
the income statement from the time the derivative commodity contract is entered
into on a fair value basis using forward prices consistent with the contract
maturity.
IFRS requires that inventory held for trading be recorded at its fair value
using period end spot prices whereas any related derivative commodity
instruments are required to be recorded at values based on forward prices
consistent with the contract maturity. Depending on market conditions, these
forward prices can be either higher or lower than spot prices resulting in
measurement differences.
The Gas, Power and Renewables business enters into contracts for pipelines and
storage capacity which, under IFRS, are recorded on an accruals basis. These
contracts are risk managed using a variety of derivative instruments which are
fair valued under IFRS. This results in measurement differences in relation to
recognition of gains and losses.
The way that BP manages the economic exposures described above, and measures
performance internally, differs from the way these activities are measured under
IFRS. BP calculates this difference by comparing the IFRS result with
management's internal measure of performance, under which the inventory and the
supply and capacity contracts in question are valued based on fair value using
relevant forward prices prevailing at the end of the period. We believe that
disclosing management's estimate of this difference provides useful information
for investors because it enables investors to see the economic effect of these
activities as a whole. The impacts of fair value accounting effects, relative to
management's internal measure of performance, are shown in the table below.
Information for all quarters of 2005, 2006 and 2007 can be found at www.bp.com/
FVAE.
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 $ million 2007 2006
========================= =================
Refining and Marketing
Unrecognized gains (losses) brought forward from
(252) 274 367 previous period 72 283
(72) (367) (429) Unrecognized (gains) losses carried forward (429) (72)
------------------------- -----------------
Favourable/(unfavourable) impact relative to
(324) (93) (62) management's measure of performance (357) 211
========================= =================
Gas, Power and Renewables
Unrecognized gains (losses) brought forward from
399 198 234 previous period 155 123
(155) (234) (107) Unrecognized (gains) losses carried forward (107) (155)
------------------------- -----------------
Favourable/(unfavourable) impact relative to
244 (36) 127 management's measure of performance 48 (32)
========================= =================
(80) (129) 65 (309) 179
20 46 (29) Taxation(a) 105 (96)
------------------------- -----------------
(60) (83) 36 (204) 83
========================= =================
By region
Refining and Marketing
(27) 45 1 UK (52) 109
(60) 2 5 Rest of Europe (110) 101
(231) (142) (32) US (165) 13
(6) 2 (36) Rest of World (30) (12)
------------------------- -----------------
(324) (93) (62) (357) 211
========================= =================
Gas, Power and Renewables
75 (22) (11) UK 1 63
- - - Rest of Europe - -
191 (19) 19 US (77) (59)
(22) 5 119 Rest of World 124 (36)
------------------------- -----------------
244 (36) 127 48 (32)
========================= =================
(a)Tax is calculated using the quarter's effective tax rate on replacement cost
profit from continuing operations.
Cautionary Statement: The foregoing discussion contains forward looking
statements particularly those regarding refining production and capacity,
disposals, intended expansion and new production capability. By their nature,
forward looking statements involve risk and uncertainty 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; operational problems; general economic
conditions (including inflation); political stability and economic growth in
relevant areas of the world; changes in laws and governmental regulations and
quotas; exchange rate fluctuations; development and use of new technology; the
success or otherwise of partnering; the actions of competitors; natural
disasters and adverse weather conditions; changes in public expectations and
other changes to business 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 2006 and our 2006 Annual Report
on Form 20-F filed with the US Securities and Exchange Commission.
Group Income Statement
--------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
61,946 71,334 79,852 Sales and other operating revenues (Note 3) 284,365 265,906
Earnings from jointly controlled entities - after
284 900 992 interest and tax 3,135 3,553
125 204 157 Earnings from associates - after interest and tax 697 442
177 172 221 Interest and other revenues 754 701
------------------------- -----------------
62,532 72,610 81,222 Total revenues 288,951 270,602
300 228 270 Gain on sale of businesses and fixed assets 2,487 3,714
------------------------- -----------------
62,832 72,838 81,492 Total revenues and other income 291,438 274,316
44,506 51,810 56,313 Purchases 200,766 187,183
6,425 6,297 7,590 Production and manufacturing expenses 25,915 23,793
632 921 1,518 Production and similar taxes (Note 4) 4,013 3,621
2,441 2,505 3,020 Depreciation, depletion and amortization 10,579 9,128
Impairment and losses on sale of businesses and
60 129 872 fixed assets 1,679 549
408 244 201 Exploration expense 756 1,045
4,205 4,137 4,212 Distribution and administration expenses 15,371 14,447
(296) (14) 459 Fair value (gain) loss on embedded derivatives 7 (608)
------------------------- -----------------
Profit before interest and taxation from
4,451 6,809 7,307 continuing operations 32,352 35,158
205 262 333 Finance costs (Note 5) 1,110 718
(56) (89) (91) Other finance income (Note 6) (369) (202)
------------------------- -----------------
4,302 6,636 7,065 Profit before taxation from continuing operations 31,611 34,642
Taxation (includes overseas taxation for the year
1,347 2,158 2,561 of $8,159 million, 2006 $9,174 million) 10,442 12,331
------------------------- -----------------
2,955 4,478 4,504 Profit from continuing operations 21,169 22,311
- - - Profit (loss) from Innovene operations (Note 2) - (25)
------------------------- -----------------
2,955 4,478 4,504 Profit for the period 21,169 22,286
========================= =================
Attributable to:
2,880 4,406 4,399 BP shareholders 20,845 22,000
75 72 105 Minority interest 324 286
------------------------- -----------------
2,955 4,478 4,504 21,169 22,286
========================= =================
Earnings per share - cents
Profit for the period attributable to BP shareholders
15.04 23.18 23.15 Basic 108.76 109.84
14.88 23.07 22.65 Diluted 107.84 109.00
Profit from continuing operations attributable to
BP shareholders
15.04 23.18 23.15 Basic 108.76 109.97
14.88 23.07 22.65 Diluted 107.84 109.12
Group Balance Sheet
-----------------
31 December 31 December
2007 2006
===========================
$ million
Non-current assets
Property, plant and equipment 97,989 90,999
Goodwill 11,006 10,780
Intangible assets 6,652 5,246
Investments in jointly controlled entities 18,113 15,074
Investments in associates 4,579 5,975
Other investments 1,830 1,697
---------------------------
Fixed assets 140,169 129,771
Loans 999 817
Other receivables 968 862
Derivative financial instruments 3,741 3,025
Prepayments and accrued income 1,083 1,034
Defined benefit pension plan surplus 8,914 6,753
---------------------------
155,874 142,262
---------------------------
Current assets
Loans 165 141
Inventories 26,554 18,915
Trade and other receivables 38,020 38,692
Derivative financial instruments 6,321 10,373
Prepayments and accrued income 3,589 3,006
Current tax receivable 705 544
Cash and cash equivalents 3,562 2,590
---------------------------
78,916 74,261
Assets classified as held for sale 1,286 1,078
---------------------------
80,202 75,339
---------------------------
Total assets 236,076 217,601
===========================
Current liabilities
Trade and other payables 43,152 42,236
Derivative financial instruments 6,405 9,424
Accruals and deferred income 6,640 6,147
Finance debt 15,394 12,924
Current tax payable 3,282 2,635
Provisions 2,195 1,932
---------------------------
77,068 75,298
Liabilities directly associated with the assets classified as held for 163 54
sale
---------------------------
77,231 75,352
---------------------------
Non-current liabilities
Other payables 1,251 1,430
Derivative financial instruments 5,002 4,203
Accruals and deferred income 959 961
Finance debt 15,651 11,086
Deferred tax liabilities 19,215 18,116
Provisions 12,900 11,712
Defined benefit pension plan and other
post-retirement benefit plan deficits 9,215 9,276
---------------------------
64,193 56,784
---------------------------
Total liabilities 141,424 132,136
---------------------------
Net assets 94,652 85,465
===========================
Equity
BP shareholders' equity 93,690 84,624
Minority interest 962 841
---------------------------
94,652 85,465
===========================
Group Statement of Recognized Income and Expense
------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
1,032 788 304 Currency translation differences 1,887 2,025
Exchange gain on translation of foreign operations
transferred to gain on sale of businesses and fixed
- - - assets (147) -
Actuarial gain relating to pensions and other
2,615 - 1,717 post-retirement benefits 1,717 2,615
264 78 225 Available-for-sale investments marked to market 200 561
Available-for-sale investments - recycled to the
(269) (91) - income statement (91) (695)
141 139 (25) Cash flow hedges marked to market 155 413
(143) (5) 12 Cash flow hedges - recycled to the income statement (74) (93)
(11) (2) (31) Cash flow hedges - recycled to the balance sheet (40) (6)
(814) 90 (181) Taxation (63) (934)
------------------------- -----------------
2,815 997 2,021 Net income recognized directly in equity 3,544 3,886
2,955 4,478 4,504 Profit for the period 21,169 22,286
------------------------- -----------------
Total recognized income and expense relating to
5,770 5,475 6,525 the period 24,713 26,172
========================= =================
Attributable to:
5,646 5,372 6,448 BP shareholders 24,365 25,837
124 103 77 Minority interest 348 335
------------------------- -----------------
5,770 5,475 6,525 24,713 26,172
========================= =================
Movement in BP Shareholders' Equity
------------------------------
$ million
Movement in BP shareholders' equity
At 31 December 2006 84,624
Profit for the period 20,845
Distribution to shareholders (8,106)
Currency translation differences (net of tax) 2,002
Exchange gain on translation of foreign operations
transferred to gain on sale (net of tax) (147)
Share-based payments (net of tax) 1,017
Repurchase of ordinary share capital (7,997)
Available-for-sale investments (net of tax) 95
Cash flow hedges (net of tax) 67
Actuarial gain on pension and other post-retirement benefit plans (net of tax) 1,290
---------
At 31 December 2007 93,690
=========
Group Cash Flow Statement
----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Operating activities
4,302 6,636 7,065 Profit before taxation from continuing operations 31,611 34,642
Adjustments to reconcile profit before taxation to net
cash provided by operating activities
265 146 86 Exploration expenditure written off 347 624
2,441 2,505 3,020 Depreciation, depletion and amortization 10,579 9,128
Impairment and (gain) loss on sale of businesses
(240) (99) 602 and fixed assets (808) (3,165)
(409) (1,104) (1,149) Earnings from jointly controlled entities and (3,832) (3,995)
associates
Dividends received from jointly controlled entities
809 1,060 371 and associates 2,473 4,495
(2,198) (2,788) (5,706) Working capital and other movements (15,661) (13,557)
------------------------- -----------------
4,970 6,356 4,289 Net cash provided by operating activities(a) 24,709 28,172
------------------------- -----------------
Investing activities
(4,473) (4,336) (5,515) Capital expenditure (17,830) (15,125)
(127) (27) - Acquisitions, net of cash acquired (1,225) (229)
(11) (122) (285) Investment in jointly controlled entities (428) (37)
(103) (37) (41) Investment in associates (187) (570)
918 211 392 Proceeds from disposal of fixed assets 1,749 5,963
Proceeds from disposal of businesses, net of cash
(100) - 5 disposed 2,518 291
26 45 69 Proceeds from loan repayments 192 189
- - - Other 374 -
------------------------- -----------------
(3,870) (4,266) (5,375) Net cash used in investing activities (14,837) (9,518)
------------------------- -----------------
Financing activities
(3,449) (1,441) (1,352) Net repurchase of shares (7,113) (15,151)
2,215 107 5,131 Proceeds from long-term financing 8,109 3,831
(1,874) (369) (1,596) Repayments of long-term financing (3,192) (3,655)
3,348 1,426 2,125 Net increase (decrease) in short-term debt 1,494 3,873
(1,927) (2,066) (2,056) Dividends paid - BP shareholders (8,106) (7,686)
(72) (24) (68) - Minority interest (227) (283)
------------------------- -----------------
(1,759) (2,367) 2,184 Net cash used in financing activities (9,035) (19,071)
------------------------- -----------------
Currency translation differences relating to cash
50 44 54 and cash equivalents 135 47
------------------------- -----------------
(609) (233) 1,152 Increase (decrease) in cash and cash equivalents 972 (370)
3,199 2,643 2,410 Cash and cash equivalents at beginning of period 2,590 2,960
------------------------- -----------------
2,590 2,410 3,562 Cash and cash equivalents at end of period 3,562 2,590
========================= =================
(a)Net cash provided by operating activities is calculated from the starting
point of profit before taxation which includes inventory holding gains and
losses. Net cash provided by operating activities 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 product prices.
Group Cash Flow Statement
----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Working capital and other movements
(80) (154) (147) Interest receivable (489) (473)
89 152 160 Interest received 500 500
205 262 333 Finance costs 1,110 718
(314) (300) (395) Interest paid (1,363) (1,242)
(56) (89) (91) Other finance income (369) (202)
77 129 109 Share-based payments 420 416
Net operating charge for pensions and other
post-retirement benefits, less contributions
(128) (61) (225) and benefit payments for unfunded plans (404) (261)
446 362 (40) Net charge for provisions, less payments (92) 340
861 (803) (5,121) (Increase) decrease in inventories (7,255) 995
(Increase) decrease in other current and non-current
2,869 956 1,736 assets 5,210 3,596
Increase (decrease) in other current and non-current
(2,476) (104) 676 liabilities (3,857) (4,211)
(3,691) (3,138) (2,701) Income taxes paid (9,072) (13,733)
------------------------- -----------------
(2,198) (2,788) (5,706) (15,661) (13,557)
========================= =================
Capital Expenditure and Acquisitions
-----------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
309 276 301 UK 993 955
49 122 144 Rest of Europe 461 244
1,234 1,133 1,216 US 4,852 4,605
1,905 1,710 2,378 Rest of World(a) 7,600 7,314
------------------------- -----------------
3,497 3,241 4,039 13,906 13,118
------------------------- -----------------
Refining and Marketing
217 137 224 UK 528 428
395 379 683 Rest of Europe(b) 2,538 710
540 466 758 US 1,873 1,339
334 155 294 Rest of World 647 667
------------------------- -----------------
1,486 1,137 1,959 5,586 3,144
------------------------- -----------------
Gas, Power and Renewables
43 6 11 UK 36 67
18 8 21 Rest of Europe(b) 39 37
268 90 373 US 605 507
35 34 127 Rest of World 194 77
------------------------- -----------------
364 138 532 874 688
------------------------- -----------------
Other businesses and corporate
66 22 37 UK 115 137
- - - Rest of Europe 2 -
21 34 45 US 157 141
3 - 1 Rest of World 1 3
------------------------- -----------------
90 56 83 275 281
------------------------- -----------------
5,437 4,572 6,613 20,641 17,231
========================= =================
By geographical area
635 441 573 UK 1,672 1,587
462 509 848 Rest of Europe 3,040 991
2,063 1,723 2,392 US 7,487 6,592
2,277 1,899 2,800 Rest of World 8,442 8,061
------------------------- -----------------
5,437 4,572 6,613 20,641 17,231
========================= =================
Included above:
205 2 - Acquisitions and asset exchanges(b) 1,447 321
========================= =================
(a)Full year 2006 included $1 billion for the purchase of shares in Rosneft.
(b)Full year 2007 included $1,132 million for the acquisition of Chevron's
Netherlands manufacturing
company.
Exchange rates
1.91 2.02 2.05 US dollar/sterling average rate for the period 2.00 1.84
1.96 2.02 1.99 US dollar/sterling period-end rate 1.99 1.96
1.29 1.37 1.45 US dollar/euro average rate for the period 1.37 1.25
1.31 1.42 1.47 US dollar/euro period-end rate 1.47 1.31
------------------------- -----------------
Analysis of Profit Before Interest and Tax
---------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
1,534 703 816 UK 3,694 5,839
249 221 262 Rest of Europe 1,386 1,209
948 1,845 2,212 US 7,757 9,327
2,326 3,578 4,353 Rest of World 14,101 13,254
------------------------- -----------------
5,057 6,347 7,643 26,938 29,629
------------------------- -----------------
Refining and Marketing
28 (10) 153 UK 1,107 85
261 623 786 Rest of Europe 2,919 2,119
(951) (136) (1,221) US 563 1,468
(44) 459 308 Rest of World 1,483 1,369
------------------------- -----------------
(706) 936 26 6,072 5,041
------------------------- -----------------
Gas, Power and Renewables
147 (85) (103) UK (178) 217
144 (37) (14) Rest of Europe (51) 134
116 (26) 61 US 183 682
61 77 360 Rest of World 720 288
------------------------- -----------------
468 (71) 304 674 1,321
------------------------- -----------------
Other businesses and corporate
280 124 (63) UK (10) (268)
(98) (78) 22 Rest of Europe (36) (133)
(307) (369) (331) US (924) (367)
(140) (139) (17) Rest of World (158) (117)
------------------------- -----------------
(265) (462) (389) (1,128) (885)
------------------------- -----------------
4,554 6,750 7,584 32,556 35,106
(103) 59 (277) Consolidation adjustment (204) 52
------------------------- -----------------
4,451 6,809 7,307 Total for continuing operations 32,352 35,158
------------------------- -----------------
Innovene operations
(40) - - UK - (185)
25 - - Rest of Europe - (36)
15 - - US - 16
- - - Rest of World - 21
------------------------- -----------------
- - - Total for Innovene operations - (184)
------------------------- -----------------
4,451 6,809 7,307 Total for period 32,352 34,974
========================= =================
By geographical area
1,988 731 804 UK 4,613 5,897
533 718 988 Rest of Europe 4,164 3,282
(289) 1,364 521 US 7,439 11,164
2,219 3,996 4,994 Rest of World 16,136 14,815
------------------------- -----------------
4,451 6,809 7,307 Total for continuing operations 32,352 35,158
========================= =================
Analysis of Replacement Cost Profit
Before Interest and Tax
------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
1,534 703 816 UK 3,694 5,839
249 221 262 Rest of Europe 1,386 1,209
952 1,843 2,213 US 7,746 9,344
2,328 3,576 4,357 Rest of World 14,101 13,255
------------------------- -----------------
5,063 6,343 7,648 26,927 29,647
------------------------- -----------------
Refining and Marketing
190 22 122 UK 1,097 351
336 492 278 Rest of Europe 1,652 2,249
(421) (527) (1,811) US (1,252) 1,353
207 389 74 Rest of World 1,120 1,330
------------------------- -----------------
312 376 (1,337) 2,617 5,283
------------------------- -----------------
Gas, Power and Renewables
147 (85) (103) UK (178) 217
143 (37) (14) Rest of Europe (52) 123
114 (23) 23 US 128 692
66 88 313 Rest of World 660 344
------------------------- -----------------
470 (57) 219 558 1,376
------------------------- -----------------
Other businesses and corporate
280 124 (63) UK (10) (268)
(97) (77) 23 Rest of Europe (35) (137)
(319) (359) (316) US (901) (425)
(140) (139) (17) Rest of World (158) (117)
------------------------- -----------------
(276) (451) (373) (1,104) (947)
------------------------- -----------------
5,569 6,211 6,157 28,998 35,359
(103) 59 (277) Consolidation adjustment (204) 52
------------------------- -----------------
5,466 6,270 5,880 Total for continuing operations 28,794 35,411
------------------------- -----------------
Innovene operations
(40) - - UK - (185)
25 - - Rest of Europe - (36)
15 - - US - 16
- - - Rest of World - 21
------------------------- -----------------
- - - Total for Innovene operations - (184)
------------------------- -----------------
5,466 6,270 5,880 Total for period 28,794 35,227
========================= =================
By geographical area
2,150 763 773 UK 4,603 6,163
609 590 480 Rest of Europe 2,897 3,398
230 983 (91) US 5,581 11,017
2,477 3,934 4,718 Rest of World 15,713 14,833
------------------------- -----------------
5,466 6,270 5,880 Total for continuing operations 28,794 35,411
========================= =================
Analysis of Non-operating Items
--------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
Impairment and gain (loss) on sale of businesses and
16 1 148 fixed assets 852 2,317
- (12) - Environmental and other provisions (12) (17)
- - (166) Restructuring, integration and rationalization costs (166) -
240 33 (430) Fair value gain (loss) on embedded derivatives 47 515
(433) - (168) Other (168) (433)
------------------------- -----------------
(177) 22 (616) 553 2,382
------------------------- -----------------
Refining and Marketing
Impairment and gain (loss) on sale of businesses and
51 105 (728) fixed assets (35) 729
- (138) - Environmental and other provisions (138) (33)
- - (118) Restructuring, integration and rationalization costs (118) -
- - - Fair value gain (loss) on embedded derivatives - -
(104) (311) (300) Other (661) (1,080)
------------------------- -----------------
(53) (344) (1,146) (952) (384)
------------------------- -----------------
Gas, Power and Renewables
Impairment and gain (loss) on sale of businesses and
159 4 (21) fixed assets (28) 93
- - - Environmental and other provisions - -
- - (22) Restructuring, integration and rationalization costs (22) -
56 (12) (19) Fair value gain (loss) on embedded derivatives (47) 88
- - - Other - -
------------------------- -----------------
215 (8) (62) (97) 181
------------------------- -----------------
Other businesses and corporate
Impairment and gain (loss) on sale of businesses and
14 (11) (1) fixed assets 19 26
(2) (35) - Environmental and other provisions (35) 94
- - (32) Restructuring, integration and rationalization costs (32) -
- (7) (10) Fair value gain (loss) on embedded derivatives (7) 5
(200) (152) (20) Other (172) (200)
------------------------- -----------------
(188) (205) (63) (227) (75)
------------------------- -----------------
(203) (535) (1,887) Total before taxation for continuing operations (723) 2,104
51 189 857 Taxation credit (charge)(a) 451 (851)
------------------------- -----------------
(152) (346) (1,030) Total after taxation for continuing operations (272) 1,253
------------------------- -----------------
Innovene operations
- - - Total before taxation for Innovene operations(b) - (184)
- - - Taxation credit (charge) - (7)
------------------------- -----------------
- - - Total after taxation for Innovene operations - (191)
------------------------- -----------------
(152) (346) (1,030) Total after taxation for period (272) 1,062
========================= =================
(a)Tax on non-operating items is calculated using the quarter's effective tax
rate on replacement cost profit from
continuing operations.
(b)Includes the loss on remeasurement to fair value of $184 million in 2006.
Realizations and Marker Prices
-------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
Average realizations(a)
Liquids ($/bbl)(b)
56.18 72.99 88.05 UK 69.17 61.67
52.11 67.47 78.28 US 64.18 57.25
54.63 73.56 84.51 Rest of World 69.56 59.54
54.13 71.12 82.72 BP Average 67.45 59.23
========================= =================
Natural gas ($/mcf)
5.61 4.89 7.83 UK 6.40 6.33
5.03 4.64 5.41 US 5.43 5.74
3.70 3.42 3.94 Rest of World 3.71 3.70
4.38 3.93 4.83 BP Average 4.53 4.72
========================= =================
Average oil marker prices ($/bbl)
59.60 74.74 88.45 Brent 72.39 65.14
59.90 75.24 90.47 West Texas Intermediate 72.20 66.02
55.47 76.31 88.65 Alaska North Slope US West Coast 71.68 63.57
53.29 69.37 81.38 Mars 66.58 58.90
56.06 71.98 85.41 Urals (NWE- cif) 69.16 61.22
26.33 41.95 48.98 Russian domestic oil 39.81 34.39
========================= =================
Average natural gas marker prices
6.56 6.16 6.97 Henry Hub gas price ($/mmbtu)(c) 6.86 7.24
29.92 30.58 46.70 UK Gas - National Balancing Point (p/therm) 29.95 42.19
========================= =================
(a)Based on sales of consolidated subsidiaries only - this excludes equity-
accounted entities.
(b)Crude oil and natural gas liquids.
(c)Henry Hub First of the Month Index.
Notes
-----
1. Basis of preparation
BP prepares its Annual Report and Accounts in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) and IFRS as adopted for use by the European Union (EU).
IFRS as adopted for use by the EU differs in certain respects from IFRS as
issued by the IASB, however, the differences have no impact on the group's
consolidated financial statements for the periods presented. The financial
information presented herein has been prepared in accordance with the accounting
policies that will be used in preparing the Annual Report and Accounts 2007
which do not differ significantly from those used for the Annual Report and
Accounts 2006.
2. Sale of Olefins and Derivatives business
The sale of Innovene, BP's olefins, derivatives and refining
group, to INEOS, was completed on 16 December 2005. The year ended 31 December
2006 includes a loss on remeasurement to fair value of $184 million.
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Loss recognized on the remeasurement to
- - - fair value - (184)
Taxation
- - - Related to profit before tax - 166
- - - Related to remeasurement to fair value - (7)
------------------------- -----------------
- - - Profit (loss) from Innovene operations - (25)
========================= =================
Earnings (loss) per share from Innovene
operations - cents
- - - Basic - (0.13)
- - - Diluted - (0.12)
========================= =================
3. Sales and other operating revenues
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
12,255 12,796 16,788 Exploration and Production 54,550 52,600
53,776 63,761 70,026 Refining and Marketing 250,866 232,855
5,224 4,490 5,863 Gas, Power and Renewables 21,369 23,708
339 238 221 Other businesses and corporate 843 1,009
------------------------- -----------------
71,594 81,285 92,898 327,628 310,172
9,648 9,951 13,046 Less: sales between businesses 43,263 44,266
------------------------- -----------------
61,946 71,334 79,852 Total third party sales 284,365 265,906
========================= =================
By geographical area
23,676 25,017 33,015 UK 109,800 105,518
18,576 19,817 22,897 Rest of Europe 78,366 76,768
23,368 26,409 28,852 US 105,120 99,935
16,768 18,374 20,971 Rest of World 74,462 71,547
------------------------- -----------------
82,388 89,617 105,735 367,748 353,768
20,442 18,283 25,883 Less: sales between areas 83,383 87,862
------------------------- -----------------
61,946 71,334 79,852 284,365 265,906
========================= =================
Notes
-----
4. Profit before interest and taxation is after charging:
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Production and similar taxes
(143) (34) 164 UK 197 260
775 955 1,354 Overseas 3,816 3,361
------------------------- -----------------
632 921 1,518 4,013 3,621
========================= =================
5. Finance costs
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
290 348 393 Interest payable 1,433 1,196
(85) (86) (60) Capitalized (323) (478)
------------------------- -----------------
205 262 333 1,110 718
========================= =================
6. Other finance income
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Interest on pension and other post-retirement
496 555 564 benefit plan liabilities 2,203 1,940
Expected return on pension and other
(619) (719) (730) post-retirement benefit plan assets (2,855) (2,410)
------------------------- -----------------
(123) (164) (166) Interest net of expected return on plan assets (652) (470)
67 75 75 Unwinding of discount on provisions 283 245
Unwinding of discount on deferred consideration
- - - for acquisition of investment in TNK-BP - 23
------------------------- -----------------
(56) (89) (91) (369) (202)
========================= =================
Notes
-----
7. Analysis of changes in net debt
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Opening balance
19,973 23,754 25,245 Finance debt 24,010 19,162
3,199 2,643 2,410 Less: Cash and cash equivalents 2,590 2,960
------------------------- -----------------
16,774 21,111 22,835 Opening net debt 21,420 16,202
------------------------- -----------------
Closing balance
24,010 25,245 31,045 Finance debt 31,045 24,010
2,590 2,410 3,562 Less: Cash and cash equivalents 3,562 2,590
------------------------- -----------------
21,420 22,835 27,483 Closing net debt 27,483 21,420
------------------------- -----------------
(4,646) (1,724) (4,648) Decrease (increase) in net debt (6,063) (5,218)
========================= =================
Movement in cash and cash equivalents
(659) (277) 1,098 (excluding exchange adjustments) 837 (417)
Net cash outflow (inflow) from financing
(3,689) (1,164) (5,660) (excluding share capital) (6,411) (4,049)
(208) (261) (26) Fair value hedge adjustment (368) (581)
(13) - - Debt acquired - (13)
(57) (21) (89) Other movements (134) (33)
------------------------- -----------------
(4,626) (1,723) (4,677) Movement in net debt before exchange effects (6,076) (5,093)
(20) (1) 29 Exchange adjustments 13 (125)
------------------------- -----------------
(4,646) (1,724) (4,648) Decrease (increase) in net debt (6,063) (5,218)
========================= =================
Notes
-----
8. TNK-BP Operational and Financial Information
Fourth Third Fourth
Quarter Quarter Quarter Year
2006 2007 2007 2007 2006
========================= =================
Production (Net of royalties) (BP share)
837 830 829 Crude oil (mb/d) 832 876
602 364 437 Natural gas (mmcf/d) 451 544
941 892 904 Total hydrocarbons (mboe/d)(a) 910 970
========================= =================
$ million $ million
Income statement (BP share)
359 1,094 1,278 Profit before interest and tax(b) 3,743 4,616
(52) (67) (71) Interest expense ... (264) (192)
(118) (289) (413) Taxation (993) (1,467)
(6) (66) (42) Minority interest (215) (193)
------------------------- -----------------
183 672 752 Net Income 2,271 2,764
========================= =================
... Excludes unwinding of discount on
- - - consideration - 23
========================= =================
Cash Flow
500 800 - Dividends received(c) 1,300 3,271
========================= =================
Balance Sheet 31 December 31 December
2007 2006
===========================
Investments in jointly controlled entities 8,817 8,353
===========================
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
(b) Full year 2006 included a net gain of $892 million on the disposal
of the Udmurtneft assets.
(c) Full year 2006 included $771 million declared in fourth quarter 2005.
9. First quarter 2008 results
BP's first quarter 2008 results will be announced on 29 April
2008.
10. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 4 February 2008, is unaudited and does not
constitute statutory financial statements. The audited 2007 BP Annual Report
and Accounts will be published on 4 March 2008 and delivered to the Registrar of
Companies in due course. The 2006 BP Annual Report and Accounts have been filed
with the Registrar of Companies; the report of the auditors on those accounts
was unqualified and did not contain a statement under section 237(2) or section
237(3) of the Companies Act 1985.
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 +1 281 366 6766
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: 5 February, 2008 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary