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 06 February 2007
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 2006
Unaudited
London 6 February 2007
FOR IMMEDIATE RELEASE
----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005 %
=========================== ============================
3,685 6,231 2,880 Profit for the period* 22,000 22,341
747 744 1,015 Inventory holding (gains) losses 253 (3,027)
--------------------------- ----------------------------
4,432 6,975 3,895 Replacement cost profit 22,253 19,314 15
=========================== ============================
12.15 18.76 10.37 - per ordinary share (pence) 60.38 50.23
21.34 35.08 20.08 - per ordinary share (cents) 111.10 91.41 22
1.28 2.10 1.21 - per ADS (dollars) 6.67 5.48
=========================== ============================
- BP's fourth quarter replacement cost profit was $3,895 million,
compared with $4,432 million a year ago, a decrease of 12%. For the year,
replacement cost profit was $22,253 million compared with $19,314 million,
up 15%.
- The fourth quarter result included a net non-operating charge of $152
million compared with a net non-operating charge of $553 million in the
fourth quarter of 2005. For the year, the net non-operating gain was
$1,062 million compared with a net non-operating charge of $1,754 million
for 2005.
- Compared with a year ago, the fourth quarter trading environment
reflected higher oil realizations, lower refining and retail marketing
margins and lower gas realizations.
- Net cash provided by operating activities for the quarter and year was
$5.0 billion and $28.2 billion, respectively, compared with $4.2 billion and
$26.7 billion a year ago.
- The ratio of net debt to net debt plus equity was 20%.
- The quarterly dividend, to be paid in March, is 10.325 cents per share
($0.6195 per ADS) compared with 9.375 cents per share a year ago. For the
year, the dividend showed an increase of 10%. In sterling terms, the
quarterly dividend is 5.258 pence per share, compared with 5.288 pence per
share a year ago; for the year the increase was 6%. During the year, the
company repurchased 1,334 million of its own shares, representing 6.5% of
the end 2005 outstanding shares net of treasury shares, at a cost of $15.5
billion.
BP Group Chief Executive, Lord Browne, said:
"The fourth quarter result reflects the recent declines in the overall price and
margin environment, as well as operational factors and increased safety and
integrity investments. Our record full year replacement cost profit and
operating cash flow supported the group's capital programme and increased
dividends and share buybacks. We remain committed to addressing the recent
operational issues while executing our strategy with discipline and focus."
* Profit attributable to BP shareholders.
Summary Quarterly Results
-------------------------
Exploration and Production's fourth quarter result was impacted by significantly
lower gas prices and realizations and lower reported volumes, partly offset by
higher liquids realizations. In addition, it included higher costs, reflecting
the impacts of sector specific inflation and increased integrity and revenue
investment. Furthermore, BP's share of income from equity-accounted entities was
negatively affected by lower net income from TNK-BP, reflecting the adverse
effect of lagged tax reference prices and the absence of the gain on sale of
assets that occurred in the fourth quarter of 2005.
The Refining and Marketing result reflects a number of improvements on a year
ago. These result from the progressive recommissioning of the Texas City
refinery following the storm-related shutdown, together with the absence of
storm-related disruptions to our pipelines and marketing businesses, the absence
of rationalization costs and a lower adverse impact from IFRS fair value
accounting. Additionally, the result reflects lower refining margins partially
offset by stronger supply optimization benefits, and lower overall marketing
margins.
In Gas, Power and Renewables the higher result reflects non-operating gains
compared with a net non-operating charge in the same period last year, partly
offset by lower contributions from the gas marketing and trading and NGL
businesses and a lower benefit related to IFRS fair value accounting.
Finance costs and Other finance expense was $149 million for the quarter.
The consolidation adjustment, which removes the margin on sales between segments
in respect of inventory at the period end, was a charge of $103 million.
The effective tax rate on replacement cost profit of continuing operations was
25% versus 32% a year earlier reflecting the impact of a number of favorable
items in the fourth quarter and the effect of year end prices on inventory
holding gains and losses.
Capital expenditure and acquisitions was $5.4 billion for the quarter. Disposal
proceeds were $0.8 billion.
Net debt at the end of the quarter was $21.4 billion. The ratio of net debt to
net debt plus equity was 20%.
During the fourth quarter, the company repurchased 310 million of its own shares
for cancellation, at a cost of $3.5 billion.
The commentaries above and following are based on replacement cost profit.
The financial information for 2005 has been restated to reflect the following,
all with effect from 1 January 2006: (a) the transfer of three equity-accounted
entities from Other businesses and corporate to Refining and Marketing following
the sale of Innovene; (b) the transfer of certain mid-stream assets and
activities from Refining and Marketing and Exploration and Production to Gas,
Power and Renewables; (c) the transfer of Hydrogen for Transport activities from
Gas, Power and Renewables to Refining and Marketing; and (d) the change in the
basis of accounting for over-the-counter forward sale and purchase contracts for
oil, natural gas, NGLs and power. See Note 2 for further details.
Non-operating Items
-------------------
Fourth
$ million Quarter
2006
=========
Exploration and Production (177)
Refining and Marketing (53)
Gas, Power and Renewables 215
Other businesses and corporate (188)
----------
(203)
Taxation 51
----------
Continuing Operations (152)
Innovene Operations -
Taxation - -
-------- ---------
Total for all operations (152)
=========
Reconciliation of Replacement Cost Profit to Profit for the Period
------------------------------------------------------------------
Fourth Third Fouth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
================================= =================
6,566 9,935 5,063 Exploration and Production 29,647 25,485
(165) 1,503 312 Refining and Marketing 5,283 4,394
129 152 470 Gas, Power and Renewables 1,376 1,077
(409) (261) (276) Other businesses and corporate (947) (1,237)
Consolidation adjustments
234 440 (103) Unrealized profit in inventory 52 (208)
Net profit on transactions between continuing
128 - - and Innovene operations (a) - 527
--------------------------------- -----------------
6,483 11,769 5,466 RC profit before interest and tax 35,411 30,038
--------------------------------- -----------------
(215) (117) (149) Finance costs and other finance expense (516) (761)
(2,029) (4,614) (1,347) Taxation (12,331) (9,473)
(93) (63) (75) Minority interest (286) (291)
--------------------------------- -----------------
RC profit from continuing operations
4,146 6,975 3,895 attributable to BP shareholders (b) 22,278 19,513
================================= =================
Inventory holding gains (losses) for
(903) (744) (1,015) continuing operations (253) 2,644
--------------------------------- -----------------
Profit for the period from continuing
3,243 6,231 2,880 operations attributable to BP shareholders 22,025 22,157
Profit (loss) for the period from Innovene
442 - - Operations (c) (25) 184
--------------------------------- -----------------
Profit for the period attributable to
3,685 6,231 2,880 BP shareholders 22,000 22,341
================================= =================
RC profit from continuing operations
attributable
4,146 6,975 3,895 to BP shareholders 22,278 19,513
286 - - RC profit (loss) from Innovene operations (25) (199)
--------------------------------- -----------------
4,432 6,975 3,895 Replacement cost profit 22,253 19,314
================================= =================
(a) In the circumstances of discontinued operations, Accounting Standards
require that the profits earned by the discontinued operations, in this case the
Innovene operations, on sales to the continuing operations be eliminated on
consolidation from the discontinued operations, and attributed to the continuing
operations and vice versa. This adjustment has two offsetting elements: the net
margin on crude refined by Innovene as substantially all crude for their
refineries was supplied by BP and most of the refined products manufactured were
taken by BP; and the margin on sales of feedstock from BP's US refineries to
Innovene's manufacturing plants. The profits attributable to individual
segments were not affected by this adjustment. Neither does this representation
indicate the profits earned by continuing or Innovene operations, as if they
were stand-alone entities, for past periods or likely to be earned in future
periods.
(b) Replacement cost profit reflects the current cost of supplies. The
replacement cost profit for the period is arrived at by excluding from profit
inventory holding gains and losses. BP uses this measure to assist investors to
assess BP's performance from period to period. Replacement cost profit is not a
recognized GAAP measure. Operating cash flow is calculated from the starting
point of profit before taxation which includes inventory holding gains and
losses. Operating cash flow also reflects working capital movements including
inventories, trade and other receivables and trade and other payables. The
carrying value of these working capital items will change for various reasons,
including movements in oil, gas and products prices.
(c) See further detail in Note 3.
Per Share Amounts
-----------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
===================================== ======================
Results for the period ($m)
3,685 6,231 2,880 Profit (a) 22,000 22,341
4,432 6,975 3,895 Replacement cost profit 22,253 19,314
------------------------------------- ------------------------
Shares in issue at period end
20,657,045 19,815,830 19,510,496 (thousand) (b) 19,510,496 20,657,045
3,442,841 3,302,638 3,251,749 - ADS equivalent (thousand) (b) 3,251,749 3,442,841
Average number of shares outstanding
20,792,896 19,818,106 19,610,871 (thousand) (b) 20,027,527 21,125,902
3,465,483 3,303,018 3,268,479 - ADS equivalent (thousand) (b) 3,337,921 3,520,984
Per ordinary share (cents)
17.90 31.46 15.04 Profit for the period 109.84 105.74
21.34 35.08 20.08 RC profit for the period 111.10 91.41
Per ADS (cents)
107.40 188.76 90.24 Profit for the period 659.04 634.44
128.04 210.48 120.48 RC profit for the period 666.60 548.46
------------------------------------- ------------------------
(a) Profit attributable to BP shareholders.
(b) Excludes treasury shares.
Exploration and Production
--------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
================================ ===================
6,574 9,929 5,057 Profit before interest and tax (a) 29,629 25,502
(8) 6 6 Inventory holding (gains) losses 18 (17)
-------------------------------- -------------------
Replacement cost profit before interest
6,566 9,935 5,063 and tax 29,647 25,485
================================ ===================
Results include:
Impairment and gain (loss) on sale of
62 1,962 16 businesses and fixed assets 2,317 893
- (17) - Environmental and other provisions (17) -
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on embedded
(801) 521 240 derivatives 515 (1,688)
(240) - (433) Other (433) (203)
-------------------------------- -------------------
(979) 2,466 (177) Total non-operating items 2,382 (998)
================================ ===================
208 351 408 Exploration expense 1,045 684
Of which:
81 232 265 Exploration expenditure written off 624 305
================================ ===================
Production (Net of royalties) (b)
2,400 2,250 2,249 Crude oil (mb/d) 2,303 2,389
164 172 167 Natural gas liquids (mb/d) 172 173
2,564 2,422 2,416 Total liquids (mb/d) (c) 2,475 2,562
8,458 8,086 8,256 Natural gas (mmcf/d) 8,417 8,424
4,022 3,816 3,840 Total hydrocarbons (mboe/d) (d) 3,926 4,014
================================ ===================
Average realizations(e)
53.92 67.22 56.38 Crude oil ($/bbl) 61.91 50.27
39.29 40.08 35.21 Natural gas liquids ($/bbl) 37.17 33.23
52.44 64.15 54.13 Total liquids ($/bbl) 59.23 48.51
6.24 4.49 4.38 Natural gas ($/mcf) 4.72 4.90
44.56 45.47 40.13 Total hydrocarbons ($/boe) 43.60 38.86
================================ ===================
Average oil marker prices ($/bbl)
56.87 69.60 59.60 Brent 65.14 54.48
60.01 70.44 59.90 West Texas Intermediate 66.02 56.58
57.89 69.02 55.47 Alaska North Slope US West Coast 63.57 53.55
================================ ===================
Average natural gas marker prices
13.00 6.58 6.56 Henry Hub gas price ($/mmbtu) (f) 7.24 8.65
65.30 33.72 29.92 UK Gas - National Balancing Point (p/therm) 42.19 40.71
================================ ===================
(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) Henry Hub First of the Month Index.
Exploration and Production
--------------------------
The replacement cost profit before interest and tax for the fourth quarter was
$5,063 million, a decrease of 23% over the fourth quarter of 2005. This result
was impacted by significantly lower gas prices and realizations and lower
reported volumes, partly offset by higher liquids realizations. In addition, it
included higher costs, reflecting the impacts of sector specific inflation and
increased integrity and revenue investment. Furthermore, BP's share of income
from equity-accounted entities was negatively affected by lower net income from
TNK-BP, reflecting the adverse effect of lagged tax reference prices and the
absence of the gain on sale of assets that occurred in the fourth quarter of
2005. Net non-operating charges for the fourth quarter were $177 million, with
the most significant items being fair value gains on embedded derivatives
relating to North Sea gas contracts, the reversal of impairments, increases in
decommissioning estimates associated with the hurricane damaged fields in the
Gulf of Mexico which we divested during the year and other one off adjustments,
primarily legal provisions. The corresponding quarter in 2005 contained a net
non-operating charge of $979 million.
The replacement cost profit before interest and tax of $29,647 million for the
full year represented a record and is an increase of 16% on the previous year.
This result benefited from higher oil realizations partially offset by lower
reported volumes and lower gas realizations, higher production taxes and higher
costs reflecting the impacts of sector specific inflation and increased
integrity spend and revenue investments. The full year result included a net
non-operating gain of $2,382 million compared with a net non-operating charge of
$998 million in 2005.
After adjusting for the impact of divestments and the impact of lower
entitlement in our production sharing agreements, production was flat compared
with the fourth quarter of 2005. Actual production was down 182 mboe/d.
Production for the full year, on this adjusted basis, was also flat compared
with the prior year. Underlying production growth from major projects in the
new profit centres offset decline in existing profit centres. Actual production
was down 88 mboe/d from 2005.
During the quarter, in Azerbaijan, the East Azeri oil platform commenced
production. Additionally, in Angola, the Dalia field, which is our second hub
in block 17, started production.
Also during the quarter, we had further exploration success in Angola with the
Terra oil discovery in ultra-deepwater Block 31, bringing the number of
successful discoveries that BP has drilled in the Block to twelve.
We have decided to move solely to the SEC basis for reserve reporting to
simplify disclosures and allow for easier comparison to competitors. BP's proved
reserves replacement ratio, using reserves calculated in accordance with SEC
guidance, was 113% on a combined basis of subsidiaries and equity-accounted
entities, excluding acquisitions and disposals.
Since the end of the year, we have signed a production sharing agreement to
appraise and develop the Khazzan/Makarem fields in Oman.
Refining and Marketing
----------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
================================ ===================
(1,073) 717 (706) Profit (loss) before interest and tax (a) 5,041 6,926
908 786 1,018 Inventory holding (gains) losses 242 (2,532)
-------------------------------- -------------------
Replacement cost profit (loss) before
(165) 1,503 312 interest and tax 5,283 4,394
================================ ===================
Results include:
Impairment and gain (loss) on sale of
50 2 51 businesses and fixed assets 729 84
- (33) - Environmental and other provisions (33) (140)
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on embedded
- - - derivatives - -
- (400) (104) Other (1,080) (733)
-------------------------------- -------------------
50 (431) (53) Total non-operating items (384) (789)
================================ ===================
Refinery throughputs (mb/d)
144 200 188 UK 165 180
664 622 660 Rest of Europe 648 667
942 1,213 1,052 USA 1,110 1,255
288 252 294 Rest of World 275 297
-------------------------------- -------------------
2,038 2,287 2,194 Total throughput 2,198 2,399
================================ ==================
90.9 82.2 81.6 Refining availability (%)(b) 82.5 92.9
================================ ===================
Oil sales volumes (mb/d)
Refined products
358 370 354 UK 356 355
1,343 1,367 1,368 Rest of Europe 1,340 1,354
1,559 1,609 1,541 USA 1,595 1,634
573 578 601 Rest of World 581 599
-------------------------------- -------------------
3,833 3,924 3,864 Total marketing sales 3,872 3,942
1,448 1,911 1,920 Trading/supply sales 1,929 1,946
-------------------------------- -------------------
5,281 5,835 5,784 Total refined product sales 5,801 5,888
2,434 1,913 1,959 Crude oil 2,110 2,464
-------------------------------- -------------------
7,715 7,748 7,743 Total oil sales 7,911 8,352
================================ ===================
Global Indicator Refining Margin ($/bbl) (c)
5.51 4.54 2.49 NWE 3.92 5.47
11.64 11.47 7.92 USGC 12.00 11.40
7.91 11.50 5.42 Midwest 9.14 8.19
8.90 12.30 14.59 USWC 14.84 13.49
4.42 3.58 2.95 Singapore 4.22 5.56
7.60 8.40 6.30 BP Average 8.39 8.60
================================ ===================
Chemicals production (kte)
281 230 159 UK 990 1,199
811 776 797 Rest of Europe 3,156 3,123
676 883 976 USA 3,464 3,891
1,638 1,682 1,357 Rest of World 6,454 5,863
-------------------------------- -------------------
3,406 3,571 3,289 Total production 14,064 14,076
================================ ===================
(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 the year 2006, 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 profit before interest and tax for the fourth quarter and
full year was $312 million and $5,283 million, respectively. This compares with
a replacement cost loss before interest and tax of $165 million for the fourth
quarter of 2005 and a replacement cost profit before interest and tax of $4,394
million for the full year 2005.
The fourth quarter's result included a net non-operating charge of $53 million,
reflecting a net gain of $51 million in respect of impairment and disposals and
a charge of $104 million for other items. This compares with a net
non-operating gain of $50 million in the fourth quarter of 2005. The full year's
result included a charge of $384 million for non-operating items compared with a
charge of $789 million in 2005. Included in the 2006 charge is $925 million in
respect of fatality and personal injury claims associated with the Texas City
incident in March 2005, partially offset by net gains on disposals.
The fourth quarter's result reflects a number of improvements on a year ago.
Firstly, the progressive recommissioning of the Texas City refinery following
the storm-related shutdown, together with the absence of storm-related
disruptions to our pipelines and marketing businesses, relative to the fourth
quarter of 2005, resulted in an improvement in replacement cost profit before
interest and tax of around $250 million. For the full year, the Texas City
refinery recorded a loss of $1.1 billion (excluding non-operating items).
Secondly, the result reflects the absence of rationalization costs of $467
million that were incurred in the fourth quarter of 2005. Thirdly, the adverse
impact relating to IFRS fair value accounting was lower compared with the fourth
quarter of 2005. The last two factors also contributed to the improvement in the
full year 2006 result compared with 2005.
The average refining Global Indicator Margin (GIM) for the fourth quarter was
lower than that in the fourth quarter of 2005. BP's actual refining margin also
fell but was partially offset by stronger supply optimization benefits during
the quarter. For the full year, the GIM was lower with supply optimization
benefits more than offsetting the decline in refining margins.
Retail marketing margins for the fourth quarter were materially lower than those
for the same period last year, partially offset by an improvement in the margins
from the other marketing businesses. For the full year, retail margins improved
versus 2005, partially negated by deterioration in other marketing margins.
Refining throughputs were 2,194 mb/d for the quarter, some 156 mb/d higher than
the fourth quarter of 2005. For the full year, throughputs were 2,198 mb/d, 201
mb/d lower than 2005. Refining availability for the quarter and full year,
excluding the Texas City refinery, was 94.8% and 95.7% respectively, broadly
consistent with 2005. Marketing volumes were 3,864 mb/d, slightly higher than
the same quarter last year.
The efficiency programmes delivered lower operating costs in the marketing
businesses, both in the fourth quarter and full year compared with 2005, offset
by the costs of higher planned refinery turnaround activities and investments in
integrity management.
On 1 February 2007, BP announced that it has agreed to sell its Coryton Refinery
in Essex, UK, to Petroplus Holdings AG, subject to required regulatory
approvals. The sale includes the adjacent bulk terminal and BP's UK bitumen
business which is closely integrated with the refinery. Completion of the sale
is expected mid 2007.
Gas, Power and Renewables
-------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
============================= ==================
126 152 468 Profit before interest and tax (a) 1,321 1,172
3 - 2 Inventory holding (gains) losses 55 (95)
----------------------------- ------------------
Replacement cost profit before
129 152 470 interest and tax 1,376 1,077
============================= ==================
Results include:
Impairment and gain (loss) on sale of
(26) (65) 159 businesses and fixed assets 93 55
- - - Environmental and other provisions - 6
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on embedded
(546) (20) 56 derivatives 88 (346)
265 - - Other - 265
----------------------------- ------------------
(307) (85) 215 Total non-operating items 181 (20)
============================= ==================
(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 $470 million and $1,376 million respectively, compared with $129
million and $1,077 million a year ago. Non-operating items for the fourth
quarter included fair value gains on embedded derivatives of $56 million, a
charge of $30 million for the impairment of a North American NGL asset and a
$189 million net gain on disposal. The corresponding quarter of 2005 included a
net charge for non-operating items of $307 million, largely comprising fair
value losses of $546 million on embedded derivatives and $265 million
compensation received on cancellation of an intra-group gas supply contract.
The fourth quarter result was significantly higher than the same period in 2005
primarily due to the change in non-operating items described above, partly
offset by lower contributions from the gas marketing and trading and NGL
businesses and a lower benefit related to IFRS fair value accounting. The full
year result was higher than in 2005 reflecting a net gain from non-operating
items compared with a charge last year and higher contributions from the
operating businesses, partly offset by higher IFRS fair value accounting
charges.
In December 2006, BP acquired Orion Energy LLC, a leading US wind energy
developer which has a portfolio of projects under development with potential
power generation capacity of more than 6 gigawatts.
Other Businesses and Corporate
------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 $ million 2006 2005
=========================== =================
(409) (213) (265) Profit (loss) before interest and tax (a) (885) (1,237)
- (48) (11) Inventory holding (gains) losses (62) -
--------------------------- -----------------
Replacement cost profit (loss) before
(409) (261) (276) interest and tax (947) (1,237)
=========================== =================
Results include:
Impairment and gain (loss) on sale of
- (10) 14 businesses and fixed assets 26 38
(4) 96 (2) Environmental and other provisions 94 (278)
Restructuring, integration and
(57) - - rationalization costs - (134)
Fair value gain (loss) on embedded
(3) (8) - derivatives 5 (13)
- - (200) Other (200) 3
--------------------------- -----------------
(64) 78 (188) Total non-operating items (75) (384)
=========================== =================
(a) Profit from continuing operations and includes profit after interest and
tax of equity-accounted entities.
Other businesses and corporate comprises Finance, the group's aluminium asset,
interest income and costs relating to corporate activities. The fourth
quarter's result included a net charge of $188 million in respect of
non-operating items, primarily relating to a reassessment of certain provisions.
Dividends Payable
-----------------
March December March June, September
2006 2006 2007 December and March
2006/07 2005/06
=================================== =====================
Dividends per ordinary share
9.375 9.825 10.325 Cents 39.35 35.725
5.288 5.241 5.258 Pence 21.074 19.918
56.25 58.95 61.95 Dividends per ADS (cents) 236.10 214.35
----------------------------------- ---------------------
BP today announced a dividend of 10.325 cents per ordinary share to be paid in
March. Holders of ordinary shares will receive 5.258 pence per share and
holders of American Depository Receipts (ADRs) $0.6195 per ADS share. The
dividend is payable on 12 March to shareholders on the register on 23 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 12 March.
Outlook
---------
BP Group Chief Executive, Lord Browne, concluded:
"World economic growth has been sustained. US economic growth appears to have
been resilient in the fourth quarter, and growth in Europe and Asia has been
sustained. The near-term global outlook is for continued growth at close to
current rates.
"Crude oil prices averaged $59.60 per barrel (Dated Brent) in the fourth quarter
of 2006, $10 per barrel below the third quarter level but slightly above the
same period last year. For the year, Dated Brent averaged $65.14 per barrel, a
record in money-of-the-day terms and more than $10 per barrel above the 2005
average. Prices in the fourth quarter drifted higher after OPEC announced
production cuts in late October, but retreated in late December in face of
demand weakness and rising non-OPEC supply. Prices have declined further this
year. Further OPEC production cuts have been announced.
"US natural gas prices averaged $6.56/mmbtu (Henry Hub first of month index) in
the fourth quarter, nearly identical to the third quarter average but half the
very high levels seen in the fourth quarter of 2005. Gas continued to trade
near parity with residual fuel oil heading into the peak winter demand months.
Gas in storage at year-end was 14% above the five year average in face of
unusually warm weather. Prices may find temporary support for the remainder of
the winter but high inventories are expected to continue to weigh on prices.
"UK gas prices (NBP day-ahead) in the fourth quarter averaged 29.92 pence per
therm, 11% below the third quarter and less than half the level of a year ago.
New infrastructure projects, high inventories and above-average temperatures
contributed to the decline. These factors have eased concerns over winter
supply availability, although the risk of temporary price spikes due to
late-winter cold spells persists.
"The global average indicator refining margin fell to $6.30/bbl in the fourth
quarter, down just over $2/bbl versus the third quarter and more than $1/bbl
below the fourth quarter last year. Margins recovered well from mid-September
lows despite a light US hurricane season and an extremely warm start to winter.
So far in the first quarter, margins have averaged around $6/bbl, with the
near-term outlook dependant on the weather and a relatively heavy US refinery
turnaround programme.
"Retail Margins fell in October and November due to the increasing cost of
product, before stabilising in December. Average retail margins therefore
deteriorated in the fourth quarter relative to the third. The outlook for retail
margins is expected to remain uncertain.
"Our strategy is unchanged. We continue to execute it with discipline and focus.
Capital expenditure excluding acquisitions for the year was about $16.9 billion,
in line with the guidance given with our third quarter results, including $1
billion in respect of our investment in Rosneft, and is expected to be around
$18 billion in 2007. Production in 2007 is expected to be in the range of 3.8 to
3.9 mmboe/d.
"On the basis of a price assumption of $60 per barrel and our current portfolio,
we expect production of more than 4.0 million barrels of oil equivalent per day
by 2009, and more than 4.3 million barrels of oil equivalent per day by 2012."
Cautionary Statement: The foregoing discussion, in particular the statements
under "Outlook", contains forward looking statements particularly those
regarding world economic growth; oil and gas prices; refining margins; marketing
margins; production; capital expenditure; and divestment proceeds. By their
nature, forward looking statements involve risks and uncertainties and actual
results may differ from those expressed in such statements depending on a
variety of factors including the following: the timing of bringing new fields on
stream; industry product supply; OPEC policy decisions; demand and pricing;
currency exchange rates; operational problems; general economic conditions
including inflationary pressures; political stability; economic growth and
outlook in relevant areas of the world; changes in governmental regulations;
exchange rate fluctuations; development and use of new technology; the actions
of competitors; natural disasters and other changes in business conditions;
prolonged adverse weather conditions; wars and acts of terrorism or sabotage;
and other factors discussed in this Announcement. For more information you
should refer to our Annual Report and Accounts 2005 and our 2005 Annual Report
on Form 20-F/A filed with the US Securities and Exchange Commission.
Summarized Group Income Statement
--------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
============================ ===================
$ million $ million
62,410 68,540 61,946 Sales and other operating revenues (Note 4) 265,906 239,792
Earnings from jointly controlled entities - after
835 1,878 284 interest and tax 3,553 3,083
133 88 125 Earnings from associates - after interest and tax 442 460
229 220 177 Interest and other revenues 701 613
---------------------------- -------------------
63,607 70,726 62,532 Total revenues 270,602 243,948
210 2,276 300 Gain on sale of businesses and fixed assets 3,714 1,538
---------------------------- -------------------
63,817 73,002 62,832 Total revenues and other income 274,316 245,486
43,243 48,431 44,506 Purchases 187,183 163,026
6,118 6,275 6,425 Production and manufacturing expenses 23,793 21,092
830 1,202 632 Production and similar taxes (Note 5) 3,621 3,010
2,351 2,194 2,441 Depreciation, depletion and amortization 9,128 8,771
Impairment and losses on sale of businesses and
124 387 60 fixed assets 549 468
208 351 408 Exploration expense (Note 5) 1,045 684
4,013 3,630 4,205 Distribution and administration expenses 14,447 13,706
1,350 (493) (296) Fair value (gain) loss on embedded derivatives (608) 2,047
---------------------------- -------------------
Profit before interest and taxation from
5,580 11,025 4,451 continuing operations 35,158 32,682
172 169 205 Finance costs (Note 6) 718 616
43 (52) (56) Other finance (income) expense (Note 7) (202) 145
---------------------------- -------------------
5,365 10,908 4,302 Profit before taxation from continuing operations 34,642 31,921
Taxation (includes overseas taxation of
2,029 4,614 1,347 $9,174 million, 2005 $9,082 million) 12,331 9,473
---------------------------- -------------------
3,336 6,294 2,955 Profit from continuing operations 22,311 22,448
442 - - Profit (loss) from Innovene operations (Note 3) (25) 184
---------------------------- -------------------
3,778 6,294 2,955 Profit for the period 22,286 22,632
============================ ===================
Attributable to:
3,685 6,231 2,880 BP shareholders 22,000 22,341
93 63 75 Minority interest 286 291
---------------------------- -----------------
3,778 6,294 2,955 22,286 22,632
============================ =================
Earnings per share - cents
Profit for the period attributable to BP shareholders
17.90 31.46 15.04 Basic 109.84 105.74
17.68 31.40 14.88 Diluted 109.00 104.52
Profit from continuing operations attributable to
BP shareholders
15.82 31.46 15.04 Basic 109.97 104.87
15.62 31.40 14.88 Diluted 109.12 103.66
Summarized Group Balance Sheet
--------------------------------------
31 December 31 December
2006 2005
===========================
$ million
Non-current assets
Property, plant and equipment 90,999 85,947
Goodwill 10,780 10,371
Other intangible assets 5,246 4,772
Investments in jointly controlled entities 15,074 13,556
Investments in associates 5,975 6,217
Other investments 1,697 967
---------------------------
Fixed assets 129,771 121,830
Loans 817 821
Other receivables 862 770
Derivative financial instruments 3,025 3,909
Prepayments and accrued income 1,034 1,012
Defined benefit pension plan surplus 6,753 3,282
---------------------------
142,262 131,624
---------------------------
Current assets
Loans 141 132
Inventories 18,915 19,760
Trade and other receivables 38,692 40,902
Derivative financial instruments 10,373 10,056
Prepayments and accrued income 3,006 1,268
Current tax receivable 544 212
Cash and cash equivalents 2,590 2,960
---------------------------
74,261 75,290
Assets classified as held for sale 1,078 -
---------------------------
75,339 75,290
---------------------------
Total assets 217,601 206,914
===========================
Current liabilities
Trade and other payables 42,236 42,136
Derivative financial instruments 9,424 10,036
Accruals and deferred income 6,147 5,017
Finance debt 12,924 8,932
Current tax payable 2,635 4,274
Provisions 1,932 1,102
---------------------------
75,298 71,497
Liabilities directly associated with the assets classified as held for 54 -
sale
---------------------------
75,352 71,497
---------------------------
Non-current liabilities
Other payables 1,430 1,935
Derivative financial instruments 4,203 5,871
Accruals and deferred income 961 989
Finance debt 11,086 10,230
Deferred tax liabilities 18,116 16,443
Provisions 11,712 9,954
Defined benefit pension plan and other
Post-retirement benefit plan deficits 9,276 9,230
---------------------------
56,784 54,652
---------------------------
Total liabilities 132,136 126,149
---------------------------
Net assets 85,465 80,765
===========================
Equity
BP shareholders' equity 84,624 79,976
Minority interest 841 789
---------------------------
85,465 80,765
===========================
Group Statement of Recognized Income and Expense
---------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
$ million $ million
(320) 531 1,032 Currency translation differences 2,025 (2,502)
Exchange gain on translation of foreign operations
transferred to gain or loss on sale of businesses
(315) - - and fixed assets - (315)
Actuarial gain relating to pensions and other
975 - 2,615 post-retirement benefits 2,615 975
236 144 264 Available-for-sale investments marked to market 561 322
Available-for-sale investments - recycled to the
- (1) (269) income statement (695) (60)
(48) (15) 141 Cash flow hedges marked to market 413 (212)
43 (26) (143) Cash flow hedges - recycled to the income statement (93) 36
- 5 (11) Cash flow hedges - recycled to the balance sheet (6) -
(295) (166) (814) Taxation (934) (259)
--------------------------- -----------------
276 472 2,815 Net income (expense) recognized directly in equity 3,886 (2,015)
3,778 6,294 2,955 Profit for the period 22,286 22,632
--------------------------- -----------------
4,054 6,766 5,770 Total recognized income and expense for the period 26,172 20,617
=========================== =================
Attributable to:
3,961 6,703 5,646 BP shareholders 25,837 20,326
93 63 124 Minority interest 335 291
--------------------------- -----------------
4,054 6,766 5,770 26,172 20,617
=========================== =================
Effect of change in accounting policy - adoption of
IAS 32 and IAS 39 on 1 January 2005
(243) - - BP shareholders - (243)
- - - Minority interest - -
--------------------------- -----------------
(243) - - - (243)
=========================== =================
Movement in BP Shareholders' Equity
--------------------------------------
$ million
Movement in BP shareholders' equity
At 31 December 2005 79,976
Profit for the year 22,000
Distribution to shareholders (7,686)
Currency translation differences (net of tax) 1,756
Actuarial gain on pension and other post-retirement benefit plans (net of tax) 1,795
Share-based payments (net of tax) 773
Repurchase of ordinary share capital (15,481)
Issue of ordinary share capital for TNK-BP 1,250
Available-for-sale investments (net of tax) (26)
Cash flow hedges (net of tax) 267
--------------
At 31 December 2006 84,624
==============
Summarized Group Cash Flow Statement
---------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== ==================
$ million $ million
Operating activities
Profit before taxation from continuing
5,365 10,908 4,302 operations 34,642 31,921
Adjustments to reconcile profits before tax
to net cash provided by operating activities
81 232 265 Exploration expenditure written off 624 305
2,351 2,194 2,441 Depreciation, depletion and amortization 9,128 8,771
Impairment and (gain) loss on sale of
(86) (1,889) (240) businesses and fixed assets (3,165) (1,070)
Earnings from jointly controlled entities
(968) (1,966) (409) Associates (3,995) (3,543)
Dividends received from jointly controlled
844 2,407 809 entities and associates 4,495 2,833
(4,171) (6,756) (2,198) Working capital and other movements (13,557) (13,466)
--------------------------- ------------------
Net cash provided by operating activities
3,416 5,130 4,970 of continuing operations 28,172 25,751
Net cash provided by operating activities
823 - - of Innovene operations - 970
--------------------------- ------------------
4,239 5,130 4,970 Net cash provided by operating activities 28,172 26,721
--------------------------- ------------------
Investing activities
(3,476) (3,945) (4,473) Capital expenditure (15,125) (12,281)
(60) (102) (127) Acquisitions, net of cash acquired (229) (60)
(132) - (11) Investment in jointly controlled entities (37) (185)
(252) (159) (103) Investment in associates (570) (619)
825 2,662 918 Proceeds from disposal of fixed assets 5,963 2,803
8,397 135 (100) Proceeds from disposal of businesses 291 8,397
32 33 26 Proceeds from loan repayments 189 123
93 - - Other - 93
--------------------------- ------------------
5,427 (1,376) (3,870) Net cash used in investing activities (9,518) (1,729)
--------------------------- ------------------
Financing activities
(3,687) (3,430) (3,449) Net repurchase of shares (15,151) (11,315)
685 706 2,215 Proceeds from long-term financing 3,831 2,475
(1,197) (996) (1,874) Repayments of long-term financing (3,655) (4,820)
(2,423) 294 3,348 Net increase (decrease) in short-term debt 3,873 (1,457)
(1,856) (1,943) (1,927) Dividends paid - BP shareholders (7,686) (7,359)
(405) (57) (72) - Minority interest (283) (827)
--------------------------- ------------------
(8,883) (5,426) (1,759) Net cash used in financing activities (19,071) (23,303)
--------------------------- ------------------
Currency translation differences relating to
(5) 19 50 cash and cash equivalents 47 (88)
--------------------------- ------------------
Increase (decrease) in cash and cash
778 (1,653) (609) Equivalents (370) 1,601
Cash and cash equivalents at beginning
2,182 4,852 3,199 of period 2,960 1,359
--------------------------- ------------------
2,960 3,199 2,590 Cash and cash equivalents at end of period 2,590 2,960
=========================== ==================
Summarized Group Cash Flow Statement
--------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
$ million $ million
Working capital and other movements
(228) (141) (80) Interest receivable (473) (479)
208 120 89 Interest received 500 401
172 169 205 Finance costs 718 616
(292) (267) (314) Interest paid (1,242) (1,127)
43 (52) (56) Other finance (income) expense (202) 145
56 134 77 Share-based payments 416 278
Net operating charge for pensions and other
(398) (36) (128) post-retirement benefits, less contributions (261) (435)
(284) (115) 446 Net charge for provisions, less payments 340 600
(318) 1,477 861 (Increase) decrease in inventories 995 (6,638)
(Increase) decrease in other current and non-current
(386) (1,616) 2,869 Assets 3,596 (16,427)
Increase (decrease) in other current and non-current
300 (1,763) (2,476) Liabilities (4,211) 18,628
(3,044) (4,666) (3,691) Income taxes paid (13,733) (9,028)
--------------------------- ------------------
(4,171) (6,756) (2,198) (13,557) (13,466)
=========================== ==================
Capital Expenditure and Acquisitions
--------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== ===================
$ million $ million
By business
Exploration and Production
211 220 309 UK 955 821
79 52 49 Rest of Europe 244 197
1,001 1,160 1,234 USA 4,605 3,870
1,671 2,505 1,905 Rest of World (a) 7,314 5,349
--------------------------- -------------------
2,962 3,937 3,497 13,118 10,237
--------------------------- -------------------
Refining and Marketing
203 67 217 UK 428 408
291 149 395 Rest of Europe 710 568
535 289 540 USA 1,339 1,226
379 117 334 Rest of World 667 658
--------------------------- -------------------
1,408 622 1,486 3,144 2,860
--------------------------- -------------------
Gas, Power and Renewables
10 17 43 UK 67 30
15 7 18 Rest of Europe 37 26
42 187 268 USA 507 96
57 9 35 Rest of World 77 83
--------------------------- -------------------
124 220 364 688 235
--------------------------- -------------------
Other businesses and corporate
90 13 66 UK 137 339
71 - - Rest of Europe - 189
131 32 21 USA 141 277
4 - 3 Rest of World 3 12
--------------------------- -------------------
296 45 90 281 817
--------------------------- -------------------
4,790 4,824 5,437 17,231 14,149
=========================== ===================
By geographical area
514 317 635 UK 1,587 1,598
456 208 462 Rest of Europe 991 980
1,709 1,668 2,063 USA 6,592 5,469
2,111 2,631 2,277 Rest of World 8,061 6,102
--------------------------- -------------------
4,790 4,824 5,437 17,231 14,149
=========================== ===================
Included above:
60 106 205 Acquisitions and asset exchanges 321 211
140 - - Innovene operations - 497
=========================== ===================
(a) Third quarter and year 2006 included $1 billion for the purchase of shares
in Rosneft.
Exchange rates
1.75 1.87 1.91 US dollar/sterling average rate for the period 1.84 1.82
1.73 1.87 1.96 US dollar/sterling period-end rate 1.96 1.73
1.19 1.27 1.29 US dollar/euro average rate for the period 1.25 1.24
1.18 1.27 1.31 US dollar/euro period-end rate 1.31 1.18
--------------------------- -------------------
Analysis of Profit Before Interest and Tax
------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== ===================
$ million $ million
By business
Exploration and Production
(295) 1,306 1,534 UK (a) 5,839 2,129
398 264 249 Rest of Europe (a) 1,209 2,321
2,972 3,820 948 USA 9,327 9,492
3,499 4,539 2,326 Rest of World 13,254 11,560
--------------------------- -------------------
6,574 9,929 5,057 29,629 25,502
--------------------------- -------------------
Refining and Marketing
(590) 46 28 UK 85 (600)
(266) 387 261 Rest of Europe 2,119 2,672
(316) 65 (951) USA 1,468 3,459
99 219 (44) Rest of World 1,369 1,395
--------------------------- -------------------
(1,073) 717 (706) 5,041 6,926
--------------------------- -------------------
Gas, Power and Renewables
(157) (46) 147 UK 217 70
(19) (15) 144 Rest of Europe 134 (16)
141 141 116 USA 682 801
161 72 61 Rest of World 288 317
--------------------------- -------------------
126 152 468 1,321 1,172
--------------------------- -------------------
Other businesses and corporate
(141) (327) 280 UK (268) (673)
(124) 11 (98) Rest of Europe (133) (79)
(22) 81 (307) USA (367) (405)
(122) 22 (140) Rest of World (117) (80)
--------------------------- -------------------
(409) (213) (265) (885) (1,237)
--------------------------- -------------------
5,218 10,585 4,554 35,106 32,363
234 440 (103) Unrealized profit in inventory 52 (208)
Net profit on transactions between continuing
128 - - and Innovene operations - 527
--------------------------- -------------------
5,580 11,025 4,451 Total for continuing operations 35,158 32,682
--------------------------- -------------------
Innovene operations
490 - (40) UK (185) 423
(1) - 25 Rest of Europe (36) 406
(42) - 15 USA 16 (166)
21 - - Rest of World 21 5
--------------------------- -------------------
468 - - (184) 668
Net profit on transactions between continuing
(128) - - and Innovene operations - (527)
--------------------------- -------------------
340 - - Total for Innovene operations (184) 141
--------------------------- -------------------
5,920 11,025 4,451 Total for period 34,974 32,823
=========================== ===================
By geographical area
(1,039) 989 1,988 UK (a) 5,897 1,167
31 695 533 Rest of Europe (a) 3,282 5,206
2,974 4,491 (289) USA 11,164 13,139
3,614 4,850 2,219 Rest of World 14,815 13,170
--------------------------- -------------------
5,580 11,025 4,451 Total for continuing operations 35,158 32,682
=========================== ===================
(a) Exploration and Production profit by region for the third quarter 2006 has
been restated, reducing Rest of Europe and increasing UK by $235 million. There
is no impact on total segment or total group profits.
Analysis of Replacement Cost Profit
Before Interest and Tax
--------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
$ million $ million
By business
Exploration and Production
(295) 1,306 1,534 UK (a) 5,839 2,129
398 264 249 Rest of Europe (a) 1,209 2,321
2,964 3,827 952 USA 9,344 9,475
3,499 4,538 2,328 Rest of World 13,255 11,560
--------------------------- -----------------
6,566 9,935 5,063 29,647 25,485
--------------------------- -----------------
Refining and Marketing
(516) 138 190 UK 351 (581)
(170) 765 336 Rest of Europe 2,249 1,567
354 388 (421) USA 1,353 2,247
167 212 207 Rest of World 1,330 1,161
--------------------------- -----------------
(165) 1,503 312 5,283 4,394
--------------------------- -----------------
Gas, Power and Renewables
(157) (46) 147 UK 217 70
(18) (17) 143 Rest of Europe 123 (16)
147 150 114 USA 692 777
157 65 66 Rest of World 344 246
--------------------------- -----------------
129 152 470 1,376 1,077
--------------------------- -----------------
Other businesses and corporate
(141) (327) 280 UK (268) (673)
(124) 9 (97) Rest of Europe (137) (79)
(22) 35 (319) USA (425) (405)
(122) 22 (140) Rest of World (117) (80)
--------------------------- -----------------
(409) (261) (276) (947) (1,237)
--------------------------- -----------------
6,121 11,329 5,569 35,359 29,719
234 440 (103) Unrealized profit in inventory 52 (208)
Net profit on transactions between continuing
128 - - and Innovene operations - 527
--------------------------- -----------------
6,483 11,769 5,466 Total for continuing operations 35,411 30,038
--------------------------- -----------------
Innovene operations
428 - (40) UK (185) 291
(4) - 25 Rest of Europe (36) 252
(127) - 15 USA 16 (253)
15 - - Rest of World 21 (5)
--------------------------- -----------------
312 - - (184) 285
Net profit on transactions between continuing
(128) - - and Innovene operations - (527)
--------------------------- -----------------
184 - - Total for Innovene operations (184) (242)
--------------------------- -----------------
6,667 11,769 5,466 Total for period 35,227 29,796
=========================== =================
By geographical area
(965) 1,081 2,150 UK (a) 6,163 1,186
128 1,069 609 Rest of Europe (a) 3,398 4,100
3,643 4,784 230 USA 11,017 11,888
3,677 4,835 2,477 Rest of World 14,833 12,864
--------------------------- -----------------
6,483 11,769 5,466 Total for continuing operations 35,411 30,038
=========================== =================
(a) Exploration and Production profit by region for the third quarter 2006 has
been restated, reducing Rest of Europe and increasing UK by $235 million. There
is no impact on total segment or total group profits.
Analysis of Non-operating Items
----------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
========================= =================
$ million $ million
By business
Exploration and Production
(975) 540 289 UK 821 (1,996)
6 (27) (13) Rest of Europe 43 1,036
(121) 2,016 (269) USA 1,758 (231)
111 (63) (184) Rest of World (240) 193
------------------------- -----------------
(979) 2,466 (177) 2,382 (998)
------------------------- -----------------
Refining and Marketing
(8) (27) 23 UK 15 (26)
(33) (18) (89) Rest of Europe 93 (97)
118 (264) 25 USA (589) (607)
(27) (122) (12) Rest of World 97 (59)
------------------------- -----------------
50 (431) (53) (384) (789)
------------------------- -----------------
Gas, Power and Renewables
(306) (20) 56 UK 88 (45)
- - 189 Rest of Europe 189 -
- 5 - USA 4 26
(1) (70) (30) Rest of World (100) (1)
------------------------- -----------------
(307) (85) 215 181 (20)
------------------------- -----------------
Other businesses and corporate
(57) (25) 13 UK (12) (111)
- (2) (2) Rest of Europe (5) 11
(7) 105 (199) USA (75) (284)
- - - Rest of World 17 -
------------------------- -----------------
(64) 78 (188) (75) (384)
------------------------- -----------------
(1,300) 2,028 (203) Total before taxation for continuing operations 2,104 (2,191)
421 (803) 51 Taxation credit (charge) (851) 717
------------------------- -----------------
(879) 1,225 (152) Total after taxation for continuing operations 1,253 (1,474)
------------------------- -----------------
Innovene operations
242 - (40) UK (185) (83)
(49) - 25 Rest of Europe (36) (273)
(51) - 15 USA 16 (259)
(6) - - Rest of World 21 (32)
------------------------- -----------------
136 - - Total before taxation for Innovene operations (a) (184) (647)
190 - - Taxation credit (charge) (7) 367
------------------------- -----------------
326 - - Total after taxation for Innovene operations (191) (280)
------------------------- -----------------
(553) 1,225 (152) Total after taxation for period 1,062 (1,754)
========================= =================
(a) Includes the loss on remeasurement to fair value of $184 million in 2006 and
$591 million in 2005, and impairment charges of $59 million and a gain on
disposal of $3 million in 2005.
Depreciation of Fixed Asset Revaluation Adjustment
--------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
========================= =================
$ million $ million
Exploration and Production
7 13 6 UK 34 33
62 48 43 USA 194 272
5 4 3 Rest of World 16 18
------------------------- -----------------
74 65 52 244 323
------------------------- -----------------
Refining and Marketing
26 25 25 USA 100 102
------------------------- -----------------
26 25 25 100 102
------------------------- -----------------
Gas, Power and Renewables
5 6 5 USA 22 22
------------------------- -----------------
5 6 5 22 22
------------------------- -----------------
105 96 82 Total depreciation of revaluation adjustment (a)(b) 366 447
========================= =================
(a) Relates to the revaluation adjustment consequent upon the ARCO acquisition.
(b) Excludes impairment of the revaluation adjustment which is included in non-
operating items.
Net Debt Ratio - Net Debt: Net Debt + Equity
--------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
$ million $ million
19,162 19,973 24,010 Gross debt 24,010 19,162
2,960 3,199 2,590 Cash and cash equivalents 2,590 2,960
--------------------------- -----------------
16,202 16,774 21,420 Net debt 21,420 16,202
=========================== =================
80,765 85,070 85,465 Equity 85,465 80,765
17% 16% 20% Net debt ratio 20% 17%
=========================== =================
Production and Realizations
--------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
Production (a)(d)
Crude oil (mb/d) (net of royalties)
244 199 229 UK 240 261
69 55 54 Rest of Europe 58 71
432 404 417 USA 427 491
1,655 1,592 1,549 Rest of World 1,578 1,566
--------------------------- -----------------
2,400 2,250 2,249 Total crude oil production 2,303 2,389
=========================== =================
Natural gas liquids (mb/d) (net of royalties)
16 14 10 UK 13 16
4 3 3 Rest of Europe 3 4
111 119 116 USA 120 122
33 36 38 Rest of World 36 31
--------------------------- -----------------
164 172 167 Total natural gas liquids production 172 173
=========================== =================
Liquids (b) (mb/d) (net of royalties)
260 213 239 UK 253 277
73 58 57 Rest of Europe 61 75
543 523 533 USA 547 613
1,688 1,628 1,587 Rest of World 1,614 1,597
--------------------------- -----------------
2,564 2,422 2,416 Total liquids production 2,475 2,562
=========================== =================
Natural gas (mmcf/d) (net of royalties)
1,156 754 888 UK 936 1,090
107 100 90 Rest of Europe 92 108
2,359 2,332 2,196 USA 2,376 2,547
4,836 4,900 5,082 Rest of World 5,013 4,679
--------------------------- -----------------
8,458 8,086 8,256 Total natural gas production 8,417 8,424
=========================== =================
Average realizations (c)
Crude oil ($/bbl)
54.70 64.74 56.51 UK 62.45 51.22
57.40 68.83 55.86 USA 62.03 50.98
49.93 67.05 56.29 Rest of World 61.11 48.32
53.92 67.22 56.38 BP Average 61.91 50.27
=========================== =================
Natural gas liquids ($/bbl)
43.68 46.48 48.40 UK 47.21 37.95
37.78 38.50 35.32 USA 36.13 31.94
42.10 41.15 31.22 Rest of World 36.03 35.11
39.29 40.08 35.21 BP Average 37.17 33.23
=========================== =================
Liquids ($/bbl) (b)
54.02 63.57 56.18 UK 61.67 50.45
53.98 62.95 52.11 USA 57.25 47.83
49.51 65.50 54.63 Rest of World 59.54 47.56
52.44 64.15 54.13 BP Average 59.23 48.51
=========================== =================
Natural gas ($/mcf)
6.96 5.55 5.61 UK 6.33 5.53
9.48 5.51 5.03 USA 5.74 6.78
4.08 3.62 3.70 Rest of World 3.70 3.46
6.24 4.49 4.38 BP Average 4.72 4.90
=========================== =================
(a) Includes BP's share of production of equity-accounted entities.
(b) Crude oil and natural gas liquids.
(c) Based on sales of consolidated subsidiaries only - this excludes equity-
accounted entities.
(d) Because of rounding, some totals may not agree exactly with the sum of their
component parts.
Notes
--------------------------------------
1. Basis of preparation
BP prepares its Annual Report and Accounts on the basis of International
Financial Reporting Standards (IFRS) as adopted for use by the European Union
(EU). 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 2006, which do not differ significantly from those
used for the Annual Report and Accounts 2005.
2. Resegmentation and other changes to comparatives
With effect from 1 January 2006 the following changes to the
business segment boundaries have been implemented:
(a) Following the sale of Innovene to INEOS in
December 2005, the transfer of three equity-accounted entities (Shanghai SECCO
Petrochemical Company Limited in China and Polyethylene Malaysia Sdn Bhd (PEMSB)
and Ethylene Malaysia Sdn Bhd (EMSB), both in Malaysia), previously reported in
Other businesses and corporate, to Refining and Marketing.
(b) The formation of BP Alternative Energy in November
2005 has resulted in the transfer of certain mid-stream assets and activities to
Gas, Power and Renewables:
- South Houston Green Power (SHGP)
co-generation facility (in Texas City refinery) from Refining and Marketing.
- Watson Cogeneration (in Carson City
refinery) from Refining and Marketing.
- Phu My Phase 3 CCGT plant in Vietnam from
Exploration and Production.
(c) The transfer of Hydrogen for Transport activities
from Gas, Power and Renewables to Refining and Marketing.
Comparative financial data is shown after these changes.
Restated Reported
--------------------------------------------
Fourth Year Fourth Year
Quarter 2005 Quarter 2005
2005 2005
--------------------------------------------
$ million
Profit before interest and tax
Exploration and Production 6,574 25,502 6,575 25,508
Refining and Marketing (1,073) 6,926 (1,068) 6,942
Gas, Power and Renewables 126 1,172 114 1,104
Other businesses and corporate (409) (1,237) (403) (1,191)
--------------------------------------------
5,218 32,363 5,218 32,363
Unrealized profit in inventory 234 (208) 234 (208)
Net profit on transactions between
continuing and Innovene operations 128 527 128 527
--------------------------------------------
Profit before interest and tax from
continuing operations 5,580 32,682 5,580 32,682
============================================
In 2005 the basis of accounting for over-the-counter forward
sale and purchase contracts for oil, natural gas, NGLs and power was changed.
These transactions are now reported on a net basis in sales and other operating
revenues, whereas previously they had been reported gross in sales and
purchases. This change, while reducing sales and other operating revenues and
purchases, had no impact on reported profit, profit per ordinary share, cash
flow or the balance sheet.
During 2006, as part of a continuous process to review how individual contracts
are accounted for, certain other minor adjustments have been identified that
should have been reflected in the restatement from gross to net presentation.
Though these adjustments are not significant to the group income statement, the
amendment has been made to bring the comparatives onto a consistent basis. The
comparative figures have been amended to reflect these items as set out below.
Notes
--------------------------------------
2. Resegmentation and other changes to comparatives (concluded)
Amended Reported
----------------------------------------------
Fourth Year Fourth Year
Quarter 2005 Quarter 2005
2005 2005
----------------------------------------------
$ million
Sales and other operating revenues
Exploration and Production 14,769 47,210 14,769 47,210
Refining and Marketing 52,873 213,326 53,979 220,134
Gas, Power and Renewables 6,795 25,696 7,987 28,561
Other businesses and corporate 161 668 161 668
----------------------------------------------
Sales by continuing operations 74,598 286,900 76,896 296,573
Less: sales between businesses 10,595 35,318 10,595 35,318
sales by continuing operations to 1,593 11,790 1,593 11,790
Innovene
----------------------------------------------
Third party sales of continuing operations 62,410 239,792 64,708 249,465
==============================================
Purchases 43,243 163,026 45,541 172,699
==============================================
Notes
--------------------------------------
3. 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 Innovene operations represented a separate major line of
business for BP. As a result of the sale, these operations were treated as
discontinued operations for the year ended 31 December 2005. A single amount was
shown on the face of the income statement comprising the post-tax result of
discontinued operations and the post-tax loss recognized on the remeasurement to
fair value less costs to sell of the discontinued operation. That is, the income
and expenses of Innovene were reported separately from the continuing operations
of the BP group. The table below provides further detail of the amount shown on
the income statement.
In the cash flow statement the cash provided by the operating
activities of Innovene in 2005 has been separated from that of the rest of the
group and reported as a single line item.
The period to 31 December 2006 includes a loss before tax of
$184 million related to post-closing adjustments and is unchanged since 30
September 2006.
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
========================= =================
$ million $ million
335 - - Profit before tax from Innovene operations - 1,259
Net profit on transactions between continuing
(128) - - and Innovene operations - (527)
------------------------- -----------------
207 - - Profit before interest and taxation - 732
1 - - Other finance income (expense) - 3
(Loss) gain recognized on the remeasurement
133 - - to fair value (184) (591)
------------------------- -----------------
341 - - (184) 144
Taxation
(86) - - Related to profit before tax 166 (306)
187 - - Related to remeasurement to fair value (7) 346
------------------------- -----------------
442 - - Profit (loss) from Innovene operations (25) 184
========================= =================
Earnings (loss) per share from Innovene
operations - cents
2.08 - - Basic (0.13) 0.87
2.06 - - Diluted (0.12) 0.86
========================= =================
The net cash flows of Innovene operations
are presented below
823 - - Net cash provided by operating activities - 970
(163) - - Net cash used in investing activities - (524)
Net cash provided by (used in) financing
------------------------- -----------------
(660) - - Activities - (446)
========================= =================
Notes
--------------------------------------
4. Sales and other operating revenues
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== ===================
$ million $ million
By business
14,769 12,932 12,255 Exploration and Production 52,600 47,210
52,873 61,169 53,776 Refining and Marketing 232,855 213,326
6,795 5,840 5,224 Gas, Power and Renewables 23,708 25,696
161 212 339 Other businesses and corporate 1,009 668
--------------------------- -------------------
74,598 80,153 71,594 Sales by continuing operations 310,172 286,900
10,595 11,613 9,648 Less: sales between businesses 44,266 35,318
1,593 - - sales to Innovene operations - 11,790
--------------------------- -------------------
62,410 68,540 61,946 Third party sales of continuing operations 265,906 239,792
3,509 - - Innovene sales - 20,627
1,445 - - Less: sales to continuing operations - 8,251
--------------------------- -------------------
2,064 - - Third party sales of Innovene operations - 12,376
--------------------------- -------------------
64,474 68,540 61,946 Total third party sales 265,906 252,168
=========================== ===================
By geographical area
17,808 27,809 23,676 UK 105,518 92,765
14,661 20,412 18,576 Rest of Europe 76,768 64,305
21,283 27,447 23,368 USA 99,935 96,881
20,693 17,337 16,768 Rest of World 71,547 59,628
--------------------------- -------------------
74,445 93,005 82,388 Sales by continuing operations 353,768 313,579
10,442 24,465 20,442 Less: sales between areas 87,862 61,997
1,593 - - sales to Innovene operations - 11,790
--------------------------- -------------------
62,410 68,540 61,946 265,906 239,792
=========================== ===================
5. Profit before interest and taxation is after charging:
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
========================= =================
$ million $ million
Exploration expense
11 7 6 UK 20 32
- - - Rest of Europe - 2
117 188 324 USA 633 425
80 156 78 Rest of World 392 225
------------------------- -----------------
208 351 408 1,045 684
========================= =================
Production and similar taxes
133 96 (143) UK 260 495
697 1,106 775 Overseas 3,361 2,515
------------------------- -----------------
830 1,202 632 3,621 3,010
========================= =================
Notes
--------------------------------------
6. Finance costs
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
========================= =================
$ million $ million
278 328 290 Interest payable 1,196 910
(106) (159) (85) Capitalized (478) (351)
------------------------- -----------------
172 169 205 718 559
- - - Early redemption of finance leases - 57
------------------------- -----------------
172 169 205 718 616
========================= =================
7. Other finance (income) expense
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
========================= =================
$ million $ million
Interest on pension and other post-retirement
497 489 496 benefit plan liabilities 1,940 2,022
Expected return on pension and other
(521) (610) (619) post-retirement benefit plan assets (2,410) (2,138)
------------------------- -----------------
(24) (121) (123) Interest net of expected return on plan assets (470) (116)
57 63 67 Unwinding of discount on provisions 245 201
Unwinding of discount on deferred consideration
9 6 - for acquisition of investment in TNK-BP 23 57
------------------------- -----------------
42 (52) (56) (202) 142
1 - - Innovene operations - 3
------------------------- -----------------
43 (52) (56) Continuing operations (202) 145
========================= =================
8. Dividends paid
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
========================= =================
$ million $ million
Dividends per ordinary share
8.925 9.825 9.825 Cents 38.40 34.85
5.061 5.324 5.241 Pence 21.104 19.152
53.55 58.95 58.95 Dividends per ADS (cents) 230.40 209.10
========================= =================
Notes
--------------------------------------
9. Analysis of changes in net debt
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
$ million $ million
Opening balance
22,159 19,286 19,973 Finance debt 19,162 23,091
2,182 4,852 3,199 Less: Cash and cash equivalents 2,960 1,359
--------------------------- -----------------
19,977 14,434 16,774 Opening net debt 16,202 21,732
--------------------------- -----------------
Closing balance
19,162 19,973 24,010 Finance debt 24,010 19,162
2,960 3,199 2,590 Less: Cash and cash equivalents 2,590 2,960
--------------------------- -----------------
16,202 16,774 21,420 Closing net debt 21,420 16,202
--------------------------- -----------------
3,775 (2,340) (4,646) Decrease (increase) in net debt (5,218) 5,530
=========================== =================
Movement in cash and cash equivalents
783 (1,672) (659) (excluding exchange adjustments) (417) 1,689
Net cash outflow (inflow) from financing
2,936 (5) (3,689) (excluding share capital) (4,049) 3,803
- - - Adoption of IAS 39 - (147)
48 (515) (208) Fair value hedge adjustment (581) 171
- - (13) Debt acquired (13) -
11 (34) (57) Other movements (33) 146
--------------------------- -----------------
3,778 (2,226) (4,626) Movement in net debt before exchange effects (5,093) 5,662
(3) (114) (20) Exchange adjustments (125) (132)
--------------------------- -----------------
3,775 (2,340) (4,646) Decrease (increase) in net debt (5,218) 5,530
=========================== =================
Notes
--------------------------------------
10. TNK-BP Operational and Financial Information
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
Production (Net of royalties) (BP share)
936 867 837 Crude oil (mb/d) 876 911
530 472 602 Natural gas (mmcf/d) 544 482
1,027 948 941 Total hydrocarbons (mboe/d) (a) 970 994
=========================== =================
$ million $ million
Income statement (BP share)
1,029 2,321 359 Profit before interest and tax 4,616 3,817
(30) (52) (52) Interest expense* (192) (128)
(234) (651) (118) Taxation (1,467) (976)
(31) (100) (6) Minority interest (193) (104)
--------------------------- -----------------
734 1,518 183 Net Income (b) 2,764 2,609
=========================== =================
* Excludes unwinding of discount on
9 6 - deferred consideration 23 57
=========================== =================
Cash Flow
525 2,000 500 Dividends received (c) 3,271 1,950
=========================== =================
Fourth Third Fourth
Quarter Quarter Quarter Year
2005 2006 2006 2006 2005
=========================== =================
Average oil marker prices ($/bbl)
53.23 65.90 56.06 Urals (NWE - cif) 61.22 50.29
54.07 65.81 56.48 Urals (Med - cif) 61.35 50.84
31.73 39.83 26.33 Domestic Oil 34.39 28.77
=========================== =================
Balance Sheet
31 December 31 December
2006 2005
===========================
$ million
Investments in jointly controlled entities 8,353 8,089
===========================
Deferred consideration
Due within one year - 1,227
Due after more than one year - -
---------------------------
- 1,227
===========================
(a) Natural gas is converted to oil equivalent at 5.8
billion cubic feet = 1 million barrels.
(b) Third quarter and year 2006 included a net gain of $892
million on the disposal of the Udmurtneft assets.
Fourth quarter and year 2005 included a net gain of
$270 million on the disposal of non-core producing assets in the Saratov region,
along with the Orsk refinery.
(c) Year 2006 includes $771 million declared in 2005.
On 23 October 2006, TNK-BP received decisions from the Russian tax authorities
in relation to the tax audits of certain TNK-BP Group companies for the years
2002 and 2003, resulting in a payment by TNK-BP of approximately $1.4 billion in
settlement of these claims. At the present time, BP believes that its
provisions are adequate for its share of any liabilities arising from these and
other outstanding tax decisions not covered by the indemnities provided by our
co-venturers in respect of historical tax liabilities related to assets
contributed to the joint venture.
Notes
--------------------------------------
11. Equity-accounted entities
The group's profit for the period includes the following in
respect of equity-accounted entities.
RC profit Inventory Profit
(loss) holding (loss) Profit
before gains before (loss)
interest (losses) interest Minority for the
and tax and tax Interest Tax interest period
----------------------------------------------------------------------
$ million
Fourth Quarter 2006
Exploration and Production 594 (2) 592 (87) (206) (6) 293
Refining and Marketing 147 (16) 131 (21) (19) - 91
Gas, Power and Renewables 39 - 39 (6) (8) - 25
Other businesses and corporate - - - - - - -
----------------------------------------------------------------------
Continuing operations 780 (18) 762 (114) (233) (6) 409
Innovene operations - - - - - - -
----------------------------------------------------------------------
780 (18) 762 (114) (233) (6) 409
======================================================================
Third Quarter 2006
Exploration and Production (a) 2,727 1 2,728 (87) (723) (100) 1,818
Refining and Marketing 138 8 146 (20) (25) - 101
Gas, Power and Renewables 56 - 56 (5) (4) - 47
Other businesses and corporate - - - - - - -
----------------------------------------------------------------------
Continuing operations 2,921 9 2,930 (112) (752) (100) 1,966
Innovene operations - - - - - - -
----------------------------------------------------------------------
2,921 9 2,930 (112) (752) (100) 1,966
======================================================================
Fourth Quarter 2005
Exploration and Production (b) 1,291 - 1,291 (56) (313) (30) 892
Refining and Marketing 88 8 96 (18) (27) - 51
Gas, Power and Renewables 27 - 27 (1) (1) - 25
Other businesses and corporate - - - - - - -
----------------------------------------------------------------------
Continuing operations 1,406 8 1,414 (75) (341) (30) 968
Innovene operations (17) - (17) - - - (17)
----------------------------------------------------------------------
1,389 8 1,397 (75) (341) (30) 951
======================================================================
Year 2006
Exploration and Production (a) 5,839 (1) 5,838 (324) (1,804) (193) 3,517
Refining and Marketing 486 1 487 (79) (67) - 341
Gas, Power and Renewables 179 - 179 (21) (20) - 138
Other businesses and corporate (1) - (1) - - - (1)
----------------------------------------------------------------------
Continuing operations 6,503 - 6,503 (424) (1,891) (193) 3,995
Innovene operations - - - - - - -
----------------------------------------------------------------------
6,503 - 6,503 (424) (1,891) (193) 3,995
======================================================================
Year 2005
Exploration and Production (b) 4,813 - 4,813 (227) (1,250) (104) 3,232
Refining and Marketing 392 (7) 385 (55) (81) - 249
Gas, Power and Renewables 77 - 77 (7) (8) - 62
Other businesses and corporate - - - - - - -
----------------------------------------------------------------------
Continuing operations 5,282 (7) 5,275 (289) (1,339) (104) 3,543
Innovene operations (14) - (14) - - - (14)
----------------------------------------------------------------------
5,268 (7) 5,261 (289) (1,339) (104) 3,529
======================================================================
(a) Third quarter and year 2006 included a net gain of $892 million on the
disposal of the Udmurtneft assets.
(b) Fourth quarter and year 2005 included a net gain of $270 million on the
disposal of non-core producing assets in the Saratov region, along with the Orsk
refinery.
Notes
--------------------------------------
12. First quarter results
BP's first quarter results will be announced on 24 April 2007.
13. Statutory accounts
The financial information shown in this publication, which was
approved by the Board of Directors on 5 February 2007, is unaudited and does not
constitute statutory financial statements. The audited 2006 BP Annual Report
and Accounts will be published on 6 March 2007 and delivered to the Registrar of
Companies in due course. The 2005 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 +1 212 451 8072
http://www.bp.com/investors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP p.l.c.
(Registrant)
Dated: 06 February 2007 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary