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 26 July 2005
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
2nd Quarter and Half Year 2005
London 26 July 2005
FOR IMMEDIATE RELEASE
RECORD RESULT AND SHAREHOLDER DISTRIBUTIONS FOR THE HALF-YEAR
---------------------------------------------------------------------------
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 $ million 2005 2004 %
======================= ====================
4,335 6,602 5,591 Profit for the period* 12,193 9,247
Inventory holding
(462) (1,111) (610) (gains) losses (1,721) (1,110)
----------------------- --------------------
3,873 5,491 4,981 Replacement cost profit 10,472 8,137 29
======================= ====================
9.83 13.55 12.67 - per ordinary share (pence) 26.22 20.32
17.69 25.61 23.42 - per ordinary share (cents) 49.03 36.99 33
1.06 1.54 1.40 - per ADS (dollar) 2.94 2.22
======================= ====================
o BP's second quarter replacement cost profit was $4,981 million compared
with $3,873 million a year ago, an increase of 29%. For the half year,
replacement cost profit was a record $10,472 million compared with
$8,137 million, up 29%.
o The second quarter result includes a net non-operating charge of
$826 millon compared with a net non-operating charge of $198 million in
the second quarter of 2004, and a net non-operating gain of
$535 million in the first quarter of 2005. For the half year, the net
non-operating charge was $291 million compared with a net gain of
$578 million for the first half of 2004.
o The second quarter trading environment was generally stronger than a
year ago with higher oil and gas realizations, higher refining and
chemicals margins, but with lower retail marketing margins.
o Net cash provided by operating activities for the quarter and half year
was $6.7 billion and $16.1 billion, respectively, compared with
$5.2 billion and $12.2 billion a year ago.
o The ratio of net debt to net debt plus equity was 18% compared with 20%
a year ago.
o The quarterly dividend, to be paid in September, is 8.925 cents per
share ($0.5355 per ADS) compared with 7.10 cents per share a year ago.
For the half year, the dividend showed an increase of 26%. In sterling
terms, the quarterly dividend is 5.119 pence per share, compared with
3.860 pence per share a year ago; for the half year the increase was
25%. During the first half, the company repurchased 396 million of its
own shares at a cost of $4.1 billion.
BP Group Chief Executive, Lord Browne, said:
"Our record first half financial results could not have been delivered
without the significant investments made over the last decade. These
are capturing the benefit of the strong trading environment. Discipline
in returning capital to shareholders after continuing to invest for the
future is allowing us to reduce the number of shares outstanding,
further improving per share performance."
* Profit attributable to BP shareholders.
Summary Quarterly Results
Exploration and Production's second quarter result was up 38% on a year ago
reflecting higher realizations in both liquids and gas and higher volumes,
partially offset by higher operating costs and revenue investments.
The Refining and Marketing result reflects improved refining margins, lower
retail marketing margins and a higher net charge for non-operating items
compared with a year ago.
In Gas, Power and Renewables the result decreased compared with a year ago due
to lower contributions from the gas marketing and natural gas liquids
businesses.
Interest and Other finance expense was $162 million for the quarter compared
with $201 million in the previous quarter. The decrease relates primarily to the
absence in the second quarter of costs associated with the early redemption of
finance leases in the first quarter of 2005.
The effective tax rate on replacement cost profit was 31.5%.
Capital expenditure was $3.3 billion for the quarter. There were no acquisitions
in the quarter. Disposal proceeds were $0.4 billion.
Net debt at the end of the quarter was $17.9 billion. The ratio of net debt to
net debt plus equity was 18%, and was also 18% at the end of the first quarter.
During the second quarter, the company repurchased 203 million of its own
shares, at a cost of $2.1 billion. These shares are held in treasury.
---------
The commentaries above and following are based on replacement cost profit.
TNK-BP operational and financial information has been estimated.
The financial information for 2004 has been restated to reflect the following,
all with effect from 1 January 2005: (a) the adoption by the group of
International Financial Reporting Standards (IFRS) (see Note 1); (b) the
transfer of the aromatics and acetyls operations from the former Petrochemicals
segment to the Refining and Marketing segment; (c) the transfer of the olefins
and derivatives operations from the former Petrochemicals segment to Other
businesses and corporate; (d) the transfer of the Grangemouth and Lavera
refineries from the Refining and Marketing segment to Other businesses and
corporate; (e) the transfer of the Mardi Gras pipeline from the Exploration and
Production segment to the Refining and Marketing segment; and (f) the transfer
of the Hobbs fractionator from the Gas, Power and Renewables segment to Other
businesses and corporate. Note 2 provides further detail of the resegmentation.
Non-Operating Items
Second
Quarter
$ million 2005
=======
Exploration and Production (652)
Refining and Marketing (658)
Gas, Power and Renewables 87
Other businesses and corporate 17
-------
(1,206)
Taxation(a) 380
-------
(826)
=======
(a) Tax on Non-operating items is calculated using the effective tax
rate on replacement cost profit.
Reconciliation of Replacement Cost Profit to Profit for the Period
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 $ million 2005 2004
============================= ================
4,263 6,486 5,903 Exploration and Production 12,389 8,505
1,665 1,421 1,286 Refining and Marketing 2,707 2,585
189 404 174 Gas, Power and Renewables 578 390
Other businesses and
(197) 207 175 corporate 382 897
(87) (153) (4) Consolidation adjustment (157) (153)
----------------------------- ----------------
RC profit before interest
5,833 8,365 7,534 and tax 15,899 12,224
----------------------------- ----------------
Interest and other
(171) (201) (162) finance expense (363) (345)
(1,747) (2,612) (2,322) Taxation (4,934) (3,666)
(42) (61) (69) Minority interest (130) (76)
----------------------------- ----------------
3,873 5,491 4,981 RC profit(a) 10,472 8,137
============================= ================
Inventory holding
462 1,111 610 gains (losses) 1,721 1,110
----------------------------- ----------------
4,335 6,602 5,591 Profit for the period* 12,193 9,247
============================= ================
(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. 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.
Per Share Amounts
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
================================ =====================
Results for the
period ($m)
4,335 6,602 5,591 Profit* 12,193 9,247
3,873 5,491 4,981 Replacement cost profit 10,472 8,137
------------------------------- --------------------
Shares in issue at
21,789,115 21,367,827 21,174,934 period end (thousand)21,174,934 21,789,115
- ADS equivalent
3,631,519 3,561,305 3,529,156 (thousand) 3,529,156 3,631,519
Average number of
shares oustanding
21,906,318 21,441,285 21,270,485 (thousand) 21,355,418 21,997,057
- ADS equivalent
3,651,053 3,573,548 3,545,081 (thousand) 3,559,236 3,666,176
-------------------------------- ---------------------
Per ordinary share
(cents)
19.79 30.79 26.30 Profit for the period 57.09 42.03
RC profit
17.69 25.61 23.42 for the period 49.03 36.99
Per ADS (cents)
118.74 184.74 157.80 Profit for the period 342.54 252.18
RC profit
106.14 153.66 140.52 for the period 294.18 221.94
-------------------------------- ---------------------
* Profit attributable to BP shareholders.
Exploration and Production
2Q 1Q 2Q First Half
2004 2005 2005 $ million 2005 2004
================= ==============
4,263 6,491 5,906 Profit before interest and tax(a) 12,397 8,513
- (5) (3) Inventory holding (gains) losses (8) (8)
----------------- --------------
Replacement cost profit
4,263 6,486 5,903 before interest and tax 12,389 8,505
================= ==============
Results include:
Impairment and gain (loss) on sale of
(274) 940 (3) businesses and fixed assets 937 (249)
- - - Environmental and other provisions - -
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on
- (160) (674) embedded derviatives (834) -
- - 25 Other 25 -
----------------- --------------
(274) 780 (652) Total non-operating items 128 (249)
================= ==============
108 160 139 Exploration expense 299 244
Of which:
22 84 47 Exploration expenditure written off 131 89
----------------- --------------
Production (Net of Royalties)
2,321 2,405 2,437 Crude oil (mb/d) 2,421 2,331
197 188 182 Natural gas liquids (mb/d) 185 194
2,518 2,593 2,619 Total liquids (mb/d)(b) 2,606 2,525
8,425 8,745 8,661 Natural gas (mmcf/d) 8,703 8,512
3,971 4,101 4,112 Total hydrocarbons (mboe/d)(c) 4,107 3,993
================= ==============
Average realizations
34.47 43.37 47.79 Crude oil ($/bbl) 45.60 32.85
23.71 28.14 29.86 Natural gas liquids ($/bbl) 28.99 23.43
33.27 41.74 45.95 Total liquids ($/bbl) 43.85 31.85
3.68 4.26 4.38 Natural gas ($/mcf) 4.32 3.74
27.66 33.60 36.11 Total hydrocarbons ($/bbl) 34.86 27.06
================= ==============
Average oil marker prices($/bbl)
35.32 47.62 51.63 Brent 49.64 33.67
38.28 49.88 53.08 West Texas Intermediate 51.52 36.80
36.99 45.07 50.10 Alaska North Slope US West Coast 47.64 35.61
================= ==============
Average natural gas marker prices
6.00 6.27 6.74 Henry Hub gas price ($/mmbtu)(d) 6.51 5.84
UK Gas - National
20.70 37.96 30.15 Balancing Point (p/therm) 34.02 22.64
================= ==============
(a) Includes profit after interest and tax of equity-accounted entities.
(b) Crude oil and natural gas liquids.
(c) Natural gas is converted to oil equivalent at 5.8 billion cubic feet =
1 million barrels.
(d) Henry Hub First of the Month Index.
Exploration and Production
The replacement cost profit before interest and tax for the second quarter was
$5,903 million, an increase of 38% over the second quarter of 2004. This result
benefited from higher realizations in both liquids and gas and higher volumes,
partially offset by higher operating costs and revenue investments. Net
non-operating losses for the second quarter total $652 million, primarily
arising from fair value losses on embedded derivatives relating to North Sea gas
contracts. The corresponding quarter in 2004 contained charges for impairment of
$160 million and losses on sales of assets of $114 million.
Production for the quarter at 4,112 mboe/d was over 3.5% higher than the second
quarter of 2004. This reflects production growth from major projects in the new
profit centres and TNK-BP, partly offset by anticipated decline in existing
profit centres.
The replacement cost profit before interest and tax of $12,389 million for the
half year was a record and represented an increase of 46% over the same period
of the previous year. This result also benefited from higher realizations and
volumes partially offset by higher operating costs and revenue investments. The
half year result included net gains on sales of assets of $1,067 million, fair
value losses of $834 million on embedded derivatives and charges for impairments
of $130 million.
In the deepwater Gulf of Mexico, efforts continue in response to the Thunder
Horse platform incident. The facility is now stable and trim; freeboard and
displacement are normal. Work continues to determine the cause. We will not
begin production, originally scheduled for end-2005, until any damage has been
identified and repaired. Elsewhere, projects in the New Profit Centres remain on
track. In Azerbaijan, line-fill of the Baku-Tbilisi-Ceyhan (BTC) oil export
pipeline commenced and the official inauguration ceremony was held on 25 May
2005. In Angola, the Kizomba B development achieved first oil in early July,
ahead of schedule. In Trinidad, both the Cannonball project and the Atlantic LNG
Train 4 remain on course for start-up of production in the second half of the
year. In addition, we approved our investment in a fifth LNG train in the North
West Shelf development in Australia during the second quarter.
Projects in the Existing Profit Centres also remain on track. In Egypt, we
extended two concessions in the Gulf of Suez: the Merged Concession Agreement
(MCA) and South Garib, which will extend the life of the existing oil fields,
increase the recovery of remaining reserves and provide a foundation for growth
through future exploration.
During the quarter, BP Trinidad and Tobago LLC (BP 70%) reached agreement for
the sale of the Teak, Samaan and Poui fields in Trinidad. Completion of the
transaction is expected in the fourth quarter of 2005 subject to regulatory and
other approvals.
Customer Facing Segments
Refining and Marketing
2Q 1Q 2Q First Half
2004 2005 2005 $ million 2005 2004
======================= =============
2,070 2,363 1,950 Profit before interest and tax(a) 4,313 3,543
(405) (942) (664) Inventory holding (gains) losses (1,606) (958)
----------------------- -------------
Replacement cost profit
1,665 1,421 1,286 before interest and tax 2,707 2,585
======================= =============
Results include:
Impairment and gain (loss) on sale
55 (27) 75 of businesses and fixed assets 48 (105)
- - - Environmental and other provisions - -
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss) on
- - - embedded derivatives - -
- - (733) Other (733) -
----------------------- -------------
55 (27) (658) Total non-operating items (685) (105)
======================= =============
Refinery throughputs(b) (kb/d)
206 164 210 UK 187 202
729 647 671 Rest of Europe 659 720
1,370 1,400 1,350 USA 1,375 1,317
377 299 305 Rest of World 302 388
----------------------- -------------
2,682 2,510 2,536 Total throughput 2,523 2,627
======================= =============
94.9 95.2 93.1 Refining availability (%) 94.1 95.0
======================= =============
Oil sales volumes (kb/d)
Refined products
323 338 356 UK 347 310
1,318 1,323 1,346 Rest of Europe 1,335 1,335
1,687 1,648 1,656 USA 1,652 1,685
651 621 604 Rest of World 612 652
----------------------- --------------
3,979 3,930 3,962 Total marketing sales 3,946 3,982
2,262 2,196 2,129 Trading/supply sales 2,163 2,382
----------------------- --------------
6,241 6,126 6,091 Total refined product sales 6,109 6,364
3,761 3,635 4,123 Crude oil 3,879 3,909
----------------------- --------------
10,002 9,761 10,214 Total oil sales 9,988 10,273
======================= ==============
Global Indicator Refining Margin(c)
($/bbl)
5.29 2.84 5.68 NWE 4.27 4.01
9.18 7.30 9.37 USGC 8.34 8.05
9.01 3.84 7.45 Midwest 5.65 6.84
15.41 12.88 14.53 USWC 13.71 11.73
2.80 4.98 6.30 Singapore 5.64 3.11
8.28 5.94 8.42 BP Average 7.19 6.59
======================= ==============
Chemicals production (kte)
326 317 317 UK 634 629
814 806 735 Rest of Europe 1,541 1,611
1,144 1,218 1,107 USA 2,325 2,327
982 1,009 981 Rest of World 1,990 2,022
----------------------- --------------
3,266 3,350 3,140 Total production 6,490 6,589
======================= ==============
(a) Includes profit after interest and tax of equity-accounted entities.
(b) Refinery throughputs exclude the Grangemouth and Lavera refineries
which were transferred to Other businesses and corporate effective
1 January 2005.
(c) The Global Indicator Refining Margin (GIM) is the average of six
regional indicator margins weighted for BP's crude refining capacity in
each region. Each regional indicator margin is based on a single
representative crude with product yields characteristic of the typical
level of upgrading complexity. The regional indicator margins may not
be representative of the margins achieved by BP in any period because
of BP's particular refinery configurations and crude and product slate.
The GIM data shown above excludes the Grangemouth and Lavera
refineries.
Customer Facing Segments
Refining and Marketing
The replacement cost profit before interest and tax for the second quarter and
half year was $1,286 million and $2,707 million respectively. This compares with
$1,665 million and $2,585 million respectively, for the equivalent periods in
2004.
The quarter's result includes a net charge of $658 million for non-operating
items. Of this, $700 million is in respect of all fatality and personal injury
compensation claims associated with the incident at the Texas City refinery on
23 March 2005. Non-operating items also include a gain of $75 million on the
disposal of retail assets and a charge of $33 million for the impairment of an
equity-accounted entity. The total charge for non-operating items for the half
year amounted to $685 million.
The second quarter and half year results, compared with the prior year, reflect
improved refining margins, lower retail marketing margins and a higher net
charge for non-operating items. The average refining Global Indicator Margin
(GIM) for both the second quarter and the first half of 2005 were higher than in
the equivalent periods of 2004 due to product demand strength and the benefits
of heavy/sour crude discounts. The margin realized by BP's refinery system also
reflected the benefits of locational advantages and supply optimization. Retail
marketing margins were lower than last year for both the quarter and half year
as a result of rises in crude and product prices being faster than the increase
in selling prices.
Refining crude oil throughputs for the quarter and first half were 2,536 kb/d
and 2,523 kb/d respectively, lower than last year primarily due to the impact of
disposals. The quarter's refining availability reduced to 93% compared with the
95% we achieved consistently last year and in the first quarter. This reflects
the full quarter impact of the Texas City incident. Marketing sales were 3,962
kb/d in the second quarter and 3,946 kb/d for the half year. The sales were held
at similar levels to both the second quarter and first half of 2004 despite the
significant increase in crude and product prices.
Customer Facing Segments
Gas, Power and Renewables
2Q 1Q 2Q First Half
2004 2005 2005 $ million 2005 2004
======================= =============
183 418 160 Profit before interest and tax(a) 578 374
6 (14) 14 Inventory holding (gains) losses - 16
----------------------- -------------
Replacement cost result
189 404 174 before interest and tax 578 390
======================= =============
Results include:
Impairment and gain (loss) on sale
- 63 20 of businesses and fixed assets 83 -
- - - Environmental and other provisions - -
Restructuring, integration and
- - - rationalization costs - -
Fair value gain (loss)
- 42 67 on embedded derivatives 109 -
- - - Other - -
----------------------- -------------
- 105 87 Total non-operating items 192 -
======================= =============
Gas sales volumes (mmcf/d)
4,489 5,413 4,699 UK 5,054 5,409
266 387 382 Rest of Europe 385 354
12,477 14,188 14,501 USA 14,345 13,047
12,079 15,628 14,933 Rest of World 15,279 12,991
---------------------- --------------
29,311 35,616 34,515 Total gas sales volumes 35,063 31,801
======================= ==============
NGL sales volumes (mb/d)
8 10 4 UK 7 6
3 13 12 Rest of Europe 12 2
334 371 317 USA 344 397
166 254 162 Rest of World 208 205
----------------------- --------------
511 648 495 Total NGL sales volumes 571 610
======================= ==============
(a) Includes profit after interest and tax of equity-accounted entities.
The replacement cost profit before interest and tax for the second quarter and
half year was $174 million and $578 million respectively, compared with $189
million and $390 million a year ago.
The second quarter result is lower than the same period in 2004 due to lower
contributions from the gas marketing and natural gas liquids businesses. The
first half result is higher than the same period in 2004 reflecting higher gains
from non-operating items and a similar contribution from the operating
businesses. Results reflect changes to fair value accounting following the
introduction of IFRS in 2005 which have created increased volatility in the Gas,
Power and Renewables result, negatively impacting the second quarter and half
year.
Non-operating items in the second quarter include a gain on disposal of an NGL
plant in the US and net fair value gains on embedded derivatives.
In June, BP announced plans for the world's first industrial scale project to
generate electricity from hydrogen while reducing CO2 emissions and enhancing
oil recovery in the North Sea.
Other Businesses and Corporate
2Q 1Q 2Q First Half
2004 2005 2005 $ million 2005 2004
====================== =============
Profit (loss) before
(134) 357 132 interest and tax(a) 489 1,057
(63) (150) 43 Inventory holding (gains) losses (107) (160)
---------------------- -------------
Replacement cost profit
(197) 207 175 before interest and tax 382 897
====================== =============
Results include:
Impairment and gain (loss) on sale
(68) (24) 34 of business and fixed assets 10 1,189
- - 22 Environmental and other provisions 22 -
Restructuring, integration and
- (43) (28) rationalization costs (71) -
Fair value gain (loss) on
- (4) (14) embedded derivatives (18) -
- - 3 Other 3 -
---------------------- --------------
(68) (71) 17 Total non-operating items (54) 1,189
====================== ==============
Analysis of replacement cost result
before interest and tax(a)
(11) 356 290 Olefins and Derivatives 646 (116)
(186) (149) (115) Other (264) 1,013
---------------------- --------------
(197) 207 175 382 897
====================== ==============
(a) Includes profit after interest and tax of equity-accounted entities.
Other businesses and corporate comprises Olefins and Derivatives, Finance, the
group's aluminium asset, interest income and costs relating to corporate
activities. The group's interests in PetroChina and Sinopec were divested in
early 2004. The second quarter's result includes a net gain of $17 million in
respect of non-operating items. This includes a charge in respect of the
separation of the Olefins and Derivatives business. The Olefins and Derivatives
result showed a marked increase over a year ago primarily as a result of higher
margins and volumes.
Dividends Payable
September June September June and September
2004 2005 2005 2005 2004
========================== =================
Dividends per ordinary share
7.10 8.50 8.925 cents 17.425 13.85
3.860 4.450 5.119 pence 9.569 7.667
42.6 51.0 53.55 Dividends per ADS (cents) 104.55 83.1
-------------------------- ----------------
BP today announced a dividend of 8.925 cents per ordinary share to be paid in
September. Holders of ordinary shares will receive 5.119 pence per share and
holders of American Depository Receipts (ADRs) $0.5355 per ADS share. The
dividend is payable on 6 September to shareholders on the register on 12 August.
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 6 September.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
"First half world economic growth has been sustained near its 10-year
average of 3%, and is expected to remain so for the rest of 2005.
"Oil prices averaged $51.63 per barrel (Dated Brent) in the second
quarter, around $4.00 per barrel higher than in the first quarter. OECD
commercial inventories have risen at above normal seasonal rates in the
second quarter and remain above five-year average levels. Prices remain
supported by strong world oil consumption growth and limited spare oil
production capacity.
"US natural gas prices averaged $6.74/mmbtu (Henry Hub first of month
index) in the second quarter, up by around $0.50/mmbtu versus the first
quarter. Gas inventories remain above year-earlier and five-year average
levels but the surplus has been declining and the futures market
continues to signal a supply-constrained market heading into the winter
heating season.
"BP's average refining Global Indicator Margin improved by nearly
$2.50/bbl versus the first quarter to reach $8.42/bbl. So far in the
third quarter, refining margins remain very firm in all regions, albeit
below second quarter levels. The outlook for retail margins remains
uncertain with continuing crude and product price volatility. Rising
product prices have dampened margins over the past few weeks and have
contributed to a weak start to the third quarter.
"Our strategy is unchanged. We continue to execute it with discipline and
focus. Our ability to capture the benefit of current prices and margin
strength underpins continued dividend growth and further increases in
share buybacks which we expect to be at least $6 billion in the second
half of 2005 subject to market conditions and constraints. Capital
expenditure is expected to be around $14.5 billion for the year and
around $15 billion in 2006."
----------------------------------------------------------------------
The foregoing discussion, in particular the statements under "Outlook",
contains forward looking statements particularly those regarding
capital expenditure, costs, demand, dividends, future performance,
growth and other trend projections, margins, prices, production, share
buybacks, supply and the timing of projects. By their nature, forward
looking statements involve risks and uncertainties and actual results
may differ from those expressed in such statements depending on a
variety of factors including the following: the timing of bringing new
fields on stream; industry product supply; demand and pricing; currency
exchange rates; operational problems; general economic conditions
including inflationary pressures; political stability and economic
growth in relevant areas of the world; changes in governmental
regulations; exchange rate fluctuations; development and use of new
technology and successful commercial relationships; the actions of
competitors; natural disasters and other changes in business
conditions; prolonged adverse weather conditions; wars and acts of
terrorism or sabotage; and other factors discussed in this
Announcement. For more information you should refer to our Annual
Report and Accounts 2004 and our 2004 Annual Report on Form 20-F filed
with the US Securities and Exchange Commission.
----------------------------------------------------------------------
BP p.l.c. and Subsidiaries
Group Results
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Sales and other operating
70,314 78,998 86,817 revenues (Note 3) 165,815 138,775
Earnings from jointly controlled
496 486 742 Entities - after interest and tax 1,228 808
Earnings from associates - after
97 114 104 interest and tax 218 204
161 212 141 Interest and other revenues 353 250
----------------------- --------------
71,068 79,810 87,804 Total revenues 167,614 140,037
Gain on sale of businesses and
66 1,198 202 fixed assets 1,400 1,615
----------------------- --------------
71,134 81,008 88,006 Total revenues and other income 169,014 141,652
54,135 59,205 66,367 Purchases 125,572 106,622
Production and manufacturing
4,611 5,430 6,335 expenses 11,765 9,466
424 649 697 Production and similar taxes (Note 4)1,346 949
Depreciation, depletion and
2,124 2,288 2,375 amortization 4,663 4,287
Impairment and losses on sale of
353 246 76 businesses and fixed assets 322 779
108 160 139 Exploration expense (Note 4) 299 244
Distribution and administration
3,084 3,432 3,252 expenses 6,684 5,971
Fair value (gain) loss on embedded
- 122 621 derivatives 743 -
----------------------- --------------
6,295 9,476 8,144 Profit before interest and taxation 17,620 13,334
(95) (172) (128) Interest payable (Note 5) (300) (193)
(76) (29) (34) Other finance expense (Note 6) (63) (152)
----------------------- --------------
6,124 9,275 7,982 Profit before taxation 17,257 12,989
(1,747) (2,612) (2,322) Taxation (4,934) (3,666)
----------------------- --------------
4,377 6,663 5,660 Profit for the period 12,323 9,323
======================= ==============
Attributable to:
4,335 6,602 5,591 BP shareholders 12,193 9,247
42 61 69 Minority interest 130 76
----------------------- --------------
4,377 6,663 5,660 12,323 9,323
======================= ==============
Earnings per share - cents
Profit attributable to BP shareholders
19.79 30.79 26.30 Basic 57.09 42.03
19.39 30.36 25.94 Diluted 56.30 41.16
======================= ==============
Summarized Group Balance Sheet
30 June 31 December
2005 2004
=====================
$ million
Non-current assets
Property, plant and equipment 90,947 93,092
Goodwill 10,555 10,857
Other intangible assets 4,518 4,205
Investments in jointly controlled entities 14,499 14,556
Investments in associates 5,713 5,486
Other investments 748 467
---------------------
Fixed assets 126,980 128,663
Loans and other receivables 5,716 2,419
Defined benefit pension plan surplus 2,106 2,105
---------------------
134,802 133,187
---------------------
Current assets
Inventories 18,066 15,645
Trade and other receivables 46,339 44,282
Current tax receivable 155 157
Cash and cash equivalents 1,360 1,359
---------------------
65,920 61,443
---------------------
200,722 194,630
=====================
Total assets
Current liabilities
Trade and other payables 51,770 48,096
Finance debt 6,506 10,184
Current tax payable 5,269 4,131
Provisions 1,423 715
---------------------
64,968 63,126
---------------------
Non-current liabilities
Other payables 8,156 4,438
Finance debt 12,796 12,907
Deferred tax liabilities 16,437 16,701
Provisions 8,511 8,884
Defined benefit pension plan and other
Post-retirement benefit plan deficits 9,757 10,339
---------------------
55,657 53,269
---------------------
Total liabilities 120,625 116,395
---------------------
Net assets 80,097 78,235
=====================
Equity
BP shareholders' equity 78,925 76,892
Minority interest 1,172 1,343
---------------------
80,097 78,235
=====================
Movement in BP shareholders' equity : $ million
At 31 December 2004 76,892
Adoption of IAS 39 (243)
------
As restated at 1 January 2005 76,649
Profit for the period 12,193
Distribution to shareholders (3,632)
Currency translation differences (net of tax) (2,337)
Issue of ordinary share capital for employee share schemes 271
Purchase of shares by ESOP trusts (140)
Share based payment accrual (net of tax) 213
Available-for-sale investments (net of tax) (34)
Cash flow hedges (net of tax) (160)
Repurchase of ordinary share capital (4,098)
------
At 30 June 2005 78,925
======
Summarized Group Cash Flow Statement
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Operating activities
6,124 9,275 7,982 Profit before taxation 17,257 12,989
Adjustments to reconcile profits
before tax to net cash provided by
operating activities
22 84 47 Exploration expenditure written off 131 89
Depreciation, depletion and
2,124 2,288 2,375 amortization 4,663 4,287
Impairment and (gain) loss on sale
287 (952) (126) of businesses and fixed assets (1,078) (836)
Earnings from jointly controlled
(593) (600) (846) entities and associates (1,446) (1,012)
Dividends received from jointly
104 355 742 controlled entities and associates 1,097 313
(59) (65) (105) Interest receivable (170) (114)
48 35 79 Interest received 114 92
95 172 128 Interest payable 300 193
(154) (332) (119) Interest paid (451) (319)
76 29 34 Other finance expense 63 152
57 77 79 Share-based payments 156 115
Net operating charge for pensions and
other post-retirement benefits,
(34) (10) (6) less contributions (16) (57)
Net charge for provisions,
(60) (65) 504 less payments 439 (170)
(1,391) (960) (2,101) (Increase) decrease in inventories (3,061) (1,137)
(Increase) decrease in trade and
(1,361) (1,573) (4,384) other receivables (5,957) (2,842)
Increase (decrease) in trade and
1,492 2,749 4,956 other payables 7,705 2,622
(1,619) (1,133) (2,502) Income taxes paid (3,635) (2,199)
----------------------- ---------------
Net cash provided by operating
5,158 9,374 6,737 activities 16,111 12,166
----------------------- ---------------
Investing activities
(2,603) (2,825) (2,911) Capital expenditure (5,736) (5,398)
(14) - - Acquisitions, net of cash acquired - (14)
Net investment in jointly controlled
(47) (15) (36) entities (51) (1,426)
(148) (99) (186) Net investment in associates (285) (581)
Proceeds from disposal of businesses
657 1,327 425 and fixed assets 1,752 3,493
- 32 48 Proceeds from loan repayments 80 3
----------------------- ---------------
Net cash used in investing
(2,155) (1,580) (2,660) activities (4,240) (3,923)
----------------------- ---------------
Financing activities
(1,948) (1,933) (2,034) Net issue (repurchase) of shares (3,967) (3,086)
430 811 482 Proceeds from long-term financing 1,293 1,058
(434) (2,192) (1,011) Repayments of long-term financing (3,203) (1,270)
Net (decrease) increase in short-
(195) (2,166) 149 term debt (2,017) (2,423)
(1,478) (1,823) (1,809) Dividends paid - BP shareholders (3,632) (2,970)
(8) (320) (15) - Minority interest (335) (10)
----------------------- ---------------
Net cash used in financing
(3,633) (7,623) (4,238) activities (11,861) (8,701)
----------------------- ---------------
Currency translation differences
relating to cash and cash
(11) (9) - equivalents (9) (8)
----------------------- ---------------
(Decrease) increase in cash and
(641) 162 (161) cash equivalents 1 (466)
Cash and cash equivalents at
2,231 1,359 1,521 beginning of period 1,359 2,056
----------------------- ---------------
Cash and cash equivalents at
1,590 1,521 1,360 end of period 1,360 1,590
======================= ===============
Capital Expenditure and Acquisitions
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
Exploration and Production
211 176 213 UK 389 364
45 31 37 Rest of Europe 68 93
981 997 942 USA 1,939 1,870
1,015 1,097 1,289 Rest of World (a) 2,386 3,689
----------------------- -------------
2,252 2,301 2,481 4,782 6,016
----------------------- -------------
Refining and Marketing
81 43 97 UK 140 143
133 67 111 Rest of Europe 178 203
313 190 219 USA 409 531
59 31 88 Rest of World 119 90
----------------------- -------------
586 331 515 846 967
----------------------- -------------
Gas, Power and Renewables
5 1 16 UK 17 6
3 1 6 Rest of Europe 7 5
13 13 19 USA 32 24
56 6 10 Rest of World 16 102
----------------------- -------------
77 21 51 72 137
----------------------- -------------
Other businesses and corporate
15 75 82 UK 157 46
37 20 58 Rest of Europe 78 71
64 64 53 USA 117 111
32 16 34 Rest of World 50 86
----------------------- -------------
148 175 227 402 314
----------------------- -------------
3,063 2,828 3,274 6,102 7,434
======================= =============
By geographical area
312 295 408 UK 703 559
218 119 212 Rest of Europe 331 372
1,371 1,264 1,233 USA 2,497 2,536
1,162 1,150 1,421 Rest of World (a) 2,571 3,967
----------------------- -------------
3,063 2,828 3,274 6,102 7,434
======================= =============
Included above:
14 85 66 Acquisitions and asset exchanges 151 1,373
======================= =============
(a) First half 2004 included $1,354 million investment in TNK's interest in
Slavneft within TNK-BP.
Exchange rates
US dollar/sterling average rate
1.81 1.89 1.86 for the period 1.87 1.82
1.81 1.88 1.80 US dollar/sterling period-end rate 1.80 1.81
US dollar/euro average rate
1.20 1.31 1.26 for the period 1.28 1.23
1.21 1.30 1.21 US dollar/euro period-end rate 1.21 1.21
======================= =============
Analysis of Profit Before Interest and Tax
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
Exploration and Production
852 911 574 UK 1,485 1,692
206 1,328 294 Rest of Europe 1,622 369
1,714 2,008 2,441 USA 4,449 3,406
1,491 2,244 2,597 Rest of World 4,841 3,046
----------------------- -------------
4,263 6,491 5,906 12,397 8,513
----------------------- -------------
Refining and Marketing
(110) (249) (73) UK (322) (214)
658 835 982 Rest of Europe 1,817 1,081
1,152 1,429 691 USA 2,120 1,979
370 348 350 Rest of World 698 697
----------------------- -------------
2,070 2,363 1,950 4,313 3,543
----------------------- -------------
Gas, Power and Renewables
(7) 116 124 UK 240 16
(4) 6 (8) Rest of Europe (2) (17)
98 172 39 USA 211 172
96 124 5 Rest of World 129 203
----------------------- -------------
183 418 160 578 374
----------------------- -------------
Other businesses and corporate
(77) (121) (45) UK (166) (344)
104 370 159 Rest of Europe 529 250
(175) 103 (29) USA 74 (279)
14 5 47 Rest of World 52 1,430
----------------------- -------------
(134) 357 132 489 1,057
----------------------- -------------
6,382 9,629 8,148 17,777 13,487
(87) (153) (4) Consolidation adjustment (157) (153)
----------------------- -------------
6,295 9,476 8,144 17,620 13,334
======================= =============
By geographical area
658 640 576 UK 1,216 1,150
964 2,539 1,427 Rest of Europe 3,966 1,683
2,702 3,576 3,142 USA 6,718 5,125
1,971 2,721 2,999 Rest of World 5,720 5,376
----------------------- -------------
6,295 9,476 8,144 17,620 13,334
======================= =============
Analysis of Replacement Cost Profit
Before Interest and Tax
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
Exploration and Production
852 911 574 UK 1,485 1,692
206 1,328 294 Rest of Europe 1,622 369
1,714 2,003 2,438 USA 4,441 3,398
1,491 2,244 2,597 Rest of World 4,841 3,046
----------------------- -------------
4,263 6,486 5,903 12,389 8,505
----------------------- -------------
Refining and Marketing
(128) (270) (59) UK (329) (246)
550 423 658 Rest of Europe 1,081 869
973 1,003 373 USA 1,376 1,416
270 265 314 Rest of World 579 546
----------------------- -------------
1,665 1,421 1,286 2,707 2,585
----------------------- -------------
Gas, Power and Renewables
(7) 116 124 UK 240 16
(4) 6 (1) Rest of Europe 5 (17)
113 163 43 USA 206 192
87 119 8 Rest of World 127 199
----------------------- -------------
189 404 174 578 390
----------------------- -------------
Other businesses and corporate
(97) (191) (57) UK (248) (378)
68 309 150 Rest of Europe 459 189
(182) 86 29 USA 115 (342)
14 3 53 Rest of World 56 1,428
----------------------- -------------
(197) 207 175 382 897
----------------------- -------------
5,920 8,518 7,538 16,056 12,377
(87) (153) (4) Consolidation adjustment (157) (153)
----------------------- -------------
5,833 8,365 7,534 15,899 12,224
======================= =============
By geographical area
620 549 578 UK 1,127 1,084
820 2,066 1,101 Rest of Europe 3,167 1,410
2,531 3,119 2,883 USA 6,002 4,511
1,862 2,631 2,972 Rest of World 5,603 5,219
----------------------- -------------
5,833 8,365 7,534 15,899 12,224
======================= =============
Analysis of Non-operating Items
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
Exploration and Production
(2) (290) (678) UK (968) (3)
- 1,027 3 Rest of Europe 1,030 -
(117) (1) (3) USA (4) (136)
(155) 44 26 Rest of World 70 (110)
----------------------- -------------
(274) 780 (652) 128 (249)
----------------------- -------------
Refining and Marketing
(58) 8 (23) UK (15) (94)
73 1 (12) Rest of Europe (11) 36
7 5 (634) USA (629) 2
33 (41) 11 Rest of World (30) (49)
----------------------- -------------
55 (27) (658) (685) (105)
----------------------- -------------
Gas, Power and Renewables
- 105 66 UK 171 -
- - - Rest of Europe - -
- - 21 USA 21 -
- - - Rest of World - -
----------------------- -------------
- 105 87 192 -
----------------------- -------------
Other businesses and corporate
4 (66) (6) UK (72) (4)
(1) (1) 12 Rest of Europe 11 -
(70) (4) 11 USA 7 (196)
(1) - - Rest of World - 1,389
----------------------- -------------
(68) (71) 17 (54) 1,189
----------------------- -------------
(287) 787 (1,206) Total before taxation (419) 835
89 (252) 380 Taxation credit (charge) 128 (257)
----------------------- -------------
(198) 535 (826) Total after taxation (291) 578
======================= =============
Depreciation of Fixed Asset Revaluation Adjustment
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Exploration and Production
8 7 12 UK 19 19
90 77 70 USA 147 183
6 4 3 Rest of World 7 12
----------------------- -------------
104 88 85 173 214
----------------------- -------------
Refining and Marketing
31 31 31 USA 62 62
----------------------- -------------
31 31 31 62 62
----------------------- -------------
Total depreciation of revaluation
135 119 116 adjustment (a)(b) 235 276
======================= =============
(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
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
19,858 19,564 19,302 Gross debt 19,302 19,858
1,590 1,521 1,360 Cash and cash equivalents 1,360 1,590
----------------------- --------------
18,268 18,043 17,942 Net debt 17,942 18,268
======================= ==============
73,088 79,911 80,097 Equity 80,097 73,088
20% 18% 18% Net debt ratio 18% 20%
======================= ==============
Production and Realizations
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
Production
Crude oil (mb/d) (net of royalties)
321 288 290 UK 289 333
80 76 73 Rest of Europe 74 76
541 560 546 USA 553 552
1,379 1,481 1,528 Rest of World 1,505 1,370
----------------------- -------------
2,321 2,405 2,437 Total crude oil production 2,421 2,331
======================= =============
Natural gas liquids (mb/d) (net of royalties)
21 17 20 UK 18 20
5 5 4 Rest of Europe 5 5
140 135 127 USA 131 139
31 31 31 Rest of World 31 30
----------------------- -------------
Total natural gas
197 188 182 liquids production 185 194
======================= =============
Liquids (a)(mb/d) (net of royalties)
342 305 310 UK 307 353
85 81 77 Rest of Europe 79 81
681 695 673 USA 684 691
1,410 1,512 1,559 Rest of World 1,536 1,400
----------------------- -------------
2,518 2,593 2,619 Total liquids production 2,606 2,525
======================= =============
Natural gas (mmcf/d) (net of royalties)
1,213 1,242 1,136 UK 1,189 1,284
136 121 106 Rest of Europe 114 139
2,790 2,648 2,727 USA 2,688 2,829
4,286 4,734 4,692 Rest of World 4,712 4,260
----------------------- -------------
8,425 8,745 8,661 Total natural gas production 8,703 8,512
======================= =============
Average realizations
Crude oil ($/bbl)
33.99 45.54 48.76 UK 47.16 31.60
35.82 43.20 49.27 USA 46.21 34.22
32.64 41.49 44.57 Rest of World 43.08 31.69
34.47 43.37 47.79 BP Average 45.60 32.85
======================= =============
Natural gas liquids ($/bbl)
28.30 29.82 34.34 UK 32.30 27.04
23.13 26.98 28.04 USA 27.50 22.71
22.17 31.24 33.77 Rest of World 32.47 23.36
23.71 28.14 29.86 BP Average 28.99 23.43
======================= =============
Liquids (a) ($/bbl)
33.64 44.68 47.83 UK 46.27 31.33
33.67 40.56 45.92 USA 43.21 32.36
31.90 40.83 43.94 Rest of World 42.43 31.14
33.27 41.74 45.95 BP Average 43.85 31.85
======================= =============
Natural gas ($/mcf)
3.59 5.58 4.82 UK 5.21 4.18
5.11 5.31 5.83 USA 5.57 4.91
2.54 3.10 3.20 Rest of World 3.15 2.60
3.68 4.26 4.38 BP Average 4.32 3.74
======================= =============
(a) Crude oil and natural gas liquids.
Notes
1. Transition to International Financial Reporting Standards
For all periods up to and including the year ended 31 December 2004, BP
prepared its financial statements in accordance with UK generally
accepted accounting practice (UK GAAP). From 1 January 2005 BP is
required to prepare consolidated financial statements in accordance with
International Financial Reporting Standards (IFRS) as endorsed by the
European Commission ('EC'). Consequently, financial information for
interim quarters of 2005 must be prepared on the basis of IFRS.
The general principle that should be applied on first-time adoption of
IFRS is that standards in force at the first reporting date (that is,
for BP, 31 December 2005) should be applied retrospectively. However,
IFRS 1 'First-time Adoption of International Financial Reporting
Standards' contains a number of exemptions which companies are permitted
to apply. BP has elected:
- not to present comparative information in accordance with IAS 32
'Financial Instruments: Disclosure and Presentation' and IAS 39
'Financial Instruments: Recognition and Measurement'.
- not to restate its financial information for acquisitions occurring
before 1 January 2003.
- to deem cumulative translation differences to be zero at 1 January
2003.
- to recognize all actuarial gains and losses on pensions and other
post-retirement benefits directly in shareholders' equity at 1
January 2003. This is consistent with the group's adoption of FRS 17
'Retirement Benefits' in 2004.
- to apply IFRS 2 'Share-based Payment' retrospectively to all share-
based payments.
As a result of the above exemptions certain changes apply from 1 January
2003 (BP's Date of Transition) followed by further changes (due to IAS
32 and IAS 39) to apply from 1 January 2005.
The quarterly information for 2005 and the restatement of financial
information for the year ended 31 December 2004 and the interim quarters
of 2004 have been prepared on the basis of all International Financial
Reporting Standards (IFRSs) (with the exception of IAS 32 and IAS 39 (as
amended) for the 2004 information) and Standing Interpretations
Committee (SIC) and International Financial Reporting Interpretations
Committee (IFRIC) interpretations issued by the International Accounting
Standards Board (IASB) expected to be in effect for the year ending 31
December 2005. It is possible that there will be changes to these
standards and interpretations before the end of 2005, which might
require further adjustments to this information before it is included in
the 2005 Annual Report and Accounts. In addition, BP has decided to
early adopt IFRS 5 'Non-current Assets Held for Sale and Discontinued
Operations', IFRS 6 'Exploration for and Evaluation of Mineral
Resources', the amendment to IAS 19 'Amendment to international
accounting standard IAS 19 Employee Benefits: Actuarial Gains and
Losses, Group Plans and Disclosures', the amendment to IAS 39 'Financial
Instruments: Recognition and Measurement - Cash Flow Hedge Accounting of
Forecast Intra-group Transactions' and IFRIC 4 'Determining whether an
Arrangement contains a Lease'.
In the restatement information for the year ended 31 December 2004 and
the interim quarters of 2004 financial assets and financial liabilities
are accounted for on the basis of UK GAAP.
Under UK GAAP, all derivatives used for trading purposes are recognized
on the balance sheet at fair value. However, derivative financial
instruments used for hedging purposes are recognized by applying either
the accrual method or the deferral method. Under the accrual method,
amounts payable or receivable in respect of derivatives are recognized
rateably in earnings over the period of the contracts. Changes in the
derivative's fair value are not recognized. On the deferral method,
gains and losses from derivatives are deferred and recognized in
earnings or as adjustments to carrying amounts as the underlying hedged
transaction matures or occurs.
From 1 January 2005 for IFRS all financial assets and financial
liabilities have to be recognized initially at fair value. In
subsequent periods the measurement of these financial instruments
depends on their classification into one of the following measurement
categories: i) financial assets or financial liabilities at-fair-value-
through-profit-and-loss (such as those used for trading purposes, and
all derivatives which do not qualify for hedge accounting); ii) loans
and receivables; iii) available-for-sale financial assets (including
certain investments held for the long term) and iv) other liabilities.
The effect of adopting IAS 39 at 1 January 2005 is shown as a movement
in BP shareholders' equity for 2005.
Notes
1. Transition to International Financial Reporting Standards (continued)
The principal differences for the group between reporting on the basis
of UK GAAP and IFRS are as follows:
- ceasing to amortize goodwill.
- setting up deferred taxation on:
- acquisitions;
- inventory valuation differences;
- unremitted earnings of subsidiaries, associates and jointly
controlled entities.
- expensing a greater proportion of major maintenance costs.
- no longer recognizing dividends proposed but not declared as a
liability at the balance sheet date.
- recognizing an expense for the fair value of employee share option
schemes rather than the intrinsic value.
- recording asset swaps on the basis of fair value.
- embedded derivatives measured at fair value.
BP has produced an explanatory note setting out its accounting policies
under IFRS, the major differences between UK GAAP and IFRS for BP, and
reconciliations of UK GAAP to IFRS for its 2003 and 2004 Income and Cash
Flow Statements, its Balance Sheets at 1 January 2003, 31 December 2003,
31 December 2004 and 1 January 2005. This information can be found at
the Investor Centre www.bp.com. In addition, the reconciliations for
2004 interim periods included in this report are shown below.
Second First
Quarter Half
2004 2004
=====================
$ million
Profit for the period under UK GAAP 3,948 8,810
Adjustments
Goodwill amortization 357 716
Major maintenance expenditure (56) (88)
Share-based payments (19) (35)
Asset swaps - 2
Recycling forex on disposal - 78
Deferred tax 159 (154)
Other (12) (6)
---------------------
Profit for the period under IFRS 4,377 9,323
=====================
30 June
2004
=======
$ million
BP shareholders' equity under UK GAAP 72,818
Adjustments
Goodwill amortization 2,139
Major maintenance expenditure (630)
Share-based payments 254
Asset swaps (139)
Deferred tax (4,077)
Dividend accrual 1,542
Other (51)
-------
BP shareholders' equity under IFRS 71,856
=======
Notes
2. Resegmentation
With effect from 1 January 2005 there have been the following changes to
the business segments reported by the group.
(a) Our petrochemicals operations have been divided between the
Refining and Marketing segment and Other businesses and corporate.
The Aromatics and Acetyls businesses and the petrochemicals assets
that are integrated with our Gelsenkirchen refinery in Germany are
now part of Refining and Marketing. The Olefins and Derivatives
business is now reported within Other businesses and corporate.
This segment has also been restated to include the legacy
historical results of other petrochemicals assets that have been
divested during 2004. We have also combined our Grangemouth and
Lavera refineries into the Olefins and Derivatives business to
maintain current operating synergies. These changes have been made
in connection with the establishment of our Olefins and Derivatives
business as a stand-alone entity within BP, with a view towards its
divestment at a later date.
(b) A small US operation, the Hobbs fractionator, which supplies
petrochemicals feedstock, has been transferred from Gas, Power and
Renewables to Olefins and Derivatives.
(c) The Mardi Gras pipeline system in the Gulf of Mexico has been
transferred from Exploration and Production to Refining and
Marketing.
Comparative financial and operating information is shown after
resegmentation and the adoption of International Financial Reporting
Standards. Further information regarding these adjustments can be found
at the BP investor centre www.bp.com.
3. Sales and other operating revenues
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
By business
8,083 10,186 10,934 Exploration and Production 21,120 16,269
48,514 49,869 61,022 Refining and Marketing 110,891 92,610
18,434 23,667 23,110 Gas, Power and Renewables 46,777 39,409
Other businesses
3,911 5,515 6,125 and corporate 11,640 7,730
----------------------- ---------------
78,942 89,237 101,191 190,428 156,018
Less: sales between
8,628 10,239 14,374 businesses 24,613 17,243
----------------------- ---------------
70,314 78,998 86,817 165,815 138,775
======================= ===============
By geographical area
18,008 26,911 30,791 UK 57,702 35,870
13,545 17,009 17,870 Rest of Europe 34,879 25,973
33,333 34,282 38,841 USA 73,123 64,929
15,638 18,706 20,208 Rest of World 38,914 31,460
----------------------- ---------------
80,524 96,908 107,710 204,618 158,232
10,210 17,910 20,893 Less: sales between areas 38,803 19,457
----------------------- ---------------
70,314 78,998 86,817 165,815 138,775
======================= ===============
Notes
4. Operating profits are after charging:
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Exploration expense
3 5 13 UK 18 5
6 1 - Rest of Europe 1 8
63 103 85 USA 188 160
36 51 41 Rest of World 92 71
----------------------- --------------
108 160 139 299 244
======================= ==============
Production and similar taxes (a)
46 114 153 UK 267 172
378 535 544 Overseas 1,079 777
----------------------- --------------
424 649 697 1,346 949
======================= ==============
(a) Production taxes are charged against Exploration and Production's
operating profit.
5. Interest payable
147 191 204 Group interest payable 395 295
(52) (76) (76) Capitalized (152) (102)
----------------------- --------------
95 115 128 243 193
Early redemption of finance
- 57 - leases 57 -
----------------------- --------------
95 172 128 300 193
======================= ==============
6. Other finance expense
Interest on pension and other
post-retirement benefit
491 514 509 plan liabilities 1,023 991
Expected return on pension
and other post-retirement
(491) (547) (542) benefit plan assets (1,089) (989)
----------------------- --------------
Interest net of expected return
- (33) (33) on plan assets (66) 2
Unwinding of discount
50 45 50 on provisions 95 98
Unwinding of discount on
deferred consideration for
acquisition of investment
26 17 17 in TNK-BP 34 52
----------------------- --------------
76 29 34 63 152
======================= ==============
Notes
7. Dividends paid
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
Dividends per ordinary share
6.75 8.50 8.50 cents 17.0 13.5
3.807 4.522 4.450 pence 8.972 7.481
40.5 51.0 51.0 Dividends per ADS (cents) 102.0 81.0
======================= ==============
8. Analysis of changes in net debt
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
$ million $ million
Opening balance
19,937 23,091 19,564 Finance debt 23,091 22,325
Less: Cash and cash
2,231 1,359 1,521 equivalents 1,359 2,056
----------------------- ---------------
17,706 21,732 18,043 Opening net debt 21,732 20,269
----------------------- ---------------
Closing balance
19,858 19,564 19,302 Finance debt 19,302 19,858
Less: Cash and cash
1,590 1,521 1,360 equivalents 1,360 1,590
----------------------- ---------------
18,268 18,043 17,942 Closing net debt 17,942 18,268
----------------------- ---------------
Decrease (increase)
(562) 3,689 101 in net debt 3,790 2,001
======================= ===============
Movement in cash and cash
equivalents (excluding
(630) 171 (161) exchange adjustments) 10 (458)
Net cash outflow (inflow)
from financing(excluding
199 3,547 380 share capital) 3,927 2,635
- (147) - Adoption of IAS 39 (147) -
- 98 17 Fair value hedge adjustment 115 -
15 49 53 Other movements 102 53
----------------------- --------------
Movement in net debt before
(416) 3,718 289 exchange effects 4,007 2,230
(146) (29) (188) Exchange adjustments (217) (229)
----------------------- --------------
Decrease (increase)
(562) 3,689 101 in net debt 3,790 2,001
======================= ==============
Notes
9. TNK-BP Operational and Financial Information
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
Production (Net of royalties)
(BP share)
814 875 903 Crude oil (mb/d) 889 790
450 527 429 Natural gas (mmcf/d) 477 416
891 966 977 Total hydrocarbons (mboe/d)(a) 971 862
======================= ==============
$ million $ million
Income statement (BP share)
581 615 920 Profit before interest and tax 1,535 955
(26) (29) (32) Interest expense * (61) (56)
(161) (167) (227) Taxation (394) (269)
(10) (8) (20) Minority interest (28) (20)
----------------------- --------------
384 411 641 Net Income 1,052 610
======================= ==============
* Excludes unwinding of discount
26 17 17 on deferred consideration 34 52
======================= ==============
Cash Flow
Additional investment in
- - - TNK-BP joint venture - (1,416)
Dividends related to period
- - - prior to acquisition - 143
----------------------- --------------
Net investment in TNK-BP
- - - joint venture - (1,273)
======================= ==============
- 250 425 Dividends received 675 119
======================= ==============
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
Average oil marker prices ($/bbl)
32.32 42.54 48.08 Urals (NWE - cif) 45.31 30.67
32.60 43.21 48.49 Urals (Med - cif) 45.85 30.79
19.71 19.14 27.39 Domestic Oil 23.27 18.40
======================= ==============
Balance Sheet 30 June 31 December
2005 2004
==========================
Investments in jointly controlled entities 8,671 8,294
==========================
Deferred consideration
Due within one year 1,244 1,227
Due after more than one year 1,211 1,194
--------------------------
2,455 2,421
==========================
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1
million barrels.
TNK-BP operational and financial information has been estimated and
includes adjustments to net income in respect of prior periods amounting to
a credit of $14 million in 2Q 2005 and a charge of $14 million in first
half 2005.
As reported at first quarter 2005, various TNK-BP group companies have
received tax notifications totalling approximately $1 billion in respect of
2001. Discussions between TNK-BP and the Russian Federal Tax Service (FTS)
regarding these notifications are still ongoing. In addition, the FTS is
currently conducting routine tax audits for 2002 and 2003, although it has
not communicated any preliminary findings and any such findings are likely
to be dependent on the resolution of the 2001 tax issues. In the agreements
executed at the formation of TNK-BP, BP has extensive indemnities from its
co-venturers in respect of pre-acquisition tax liabilities.
Notes
10. Olefins and Derivatives
Second First Second
Quarter Quarter Quarter First Half
2004 2005 2005 2005 2004
======================= ==============
Refinery throughputs (mb/d)
198 193 165 UK 179 198
142 199 186 Rest of Europe 192 158
----------------------- --------------
340 392 351 Total throughput 371 356
----------------------- --------------
Petrochemicals production (kte)
530 461 583 UK 1,044 1,067
1,912 2,132 2,126 Rest of Europe 4,258 3,843
1,370 1,301 1,340 USA 2,641 2,730
93 104 552 Rest of World 656 185
----------------------- --------------
3,905 3,998 4,601 Total production 8,599 7,825
----------------------- --------------
$ million $ million
Income Statement
52 506 247 Profit before interest and tax 753 44
(63) (150) 43 Inventory holding (gains) losses(107) (160)
----------------------- --------------
Replacement cost profit before
(11) 356 290 interest and tax 646 (116)
======================= ==============
By geographical area:
(21) (30) 125 UK 95 (126)
69 302 124 Rest of Europe 426 196
(77) 89 24 USA 113 (212)
18 (5) 17 Rest of World 12 26
----------------------- --------------
(11) 356 290 646 (116)
======================= ==============
Replacement cost result includes:
Impairment and gain (loss) on sale
(67) (24) - of businesses and fixed assets (24) (201)
----------------------- --------------
(67) (24) - Total non-operating items (24) (201)
======================= ==============
Other Financial Information
Capital expenditure and
122 144 155 acquisitions 299 277
======================= ==============
Olefins and Derivatives includes the Olefins and Derivatives businesses
previously reported in the former Petrochemicals segment, the Grangemouth and
Lavera refineries previously reported within the Refining and Marketing segment,
the Hobbs fractionator previously included in Gas, Power and Renewables and
costs associated with the former Petrochemicals segment.
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
before holding before
interest gains interest
and tax (losses) and tax
---------------------------------------
$ million
Second Quarter 2005
Exploration and Production 1,163 - 1,163
Refining and Marketing 72 (10) 62
Gas, Power and Renewables 9 - 9
Other businesses and corporate 5 (5) -
---------------------------------------
1,249 (15) 1,234
=======================================
First Quarter 2005
Exploration and Production 841 - 841
Refining and Marketing 76 (4) 72
Gas, Power and Renewables 5 - 5
Other businesses and corporate (1) - (1)
---------------------------------------
921 (4) 917
=======================================
Second Quarter 2004
Exploration and Production 814 - 814
Refining and Marketing 72 (1) 71
Gas, Power and Renewables 2 - 2
Other businesses and corporate 9 (2) 7
---------------------------------------
897 (3) 894
=======================================
Half Year 2005
Exploration and Production 2,004 - 2,004
Refining and Marketing 148 (14) 134
Gas, Power and Renewables 14 - 14
Other businesses and corporate 4 (5) (1)
---------------------------------------
2,170 (19) 2,151
=======================================
Half Year 2004
Exploration and Production 1,377 - 1,377
Refining and Marketing 170 (7) 163
Gas, Power and Renewables 2 - 2
Other businesses and corporate 26 (11) 15
---------------------------------------
1,575 (18) 1,557
=======================================
Notes
11. Equity-accounted entities (continued)
Profit
Minority for the
Interest Tax interest period
----------------------------------------
$ million
Second Quarter 2005
Exploration and Production (56) (289) (20) 798
Refining and Marketing (5) (13) - 44
Gas, Power and Renewables (3) (1) - 5
Other businesses and corporate (1) - - (1)
---------------------------------------
(65) (303) (20) 846
=======================================
First Quarter 2005
Exploration and Production (52) (227) (8) 554
Refining and Marketing (5) (18) - 49
Gas, Power and Renewables (2) (2) - 1
Other businesses and corporate (3) - - (4)
---------------------------------------
(62) (247) (8) 600
=======================================
Second Quarter 2004
Exploration and Production (46) (222) (10) 536
Refining and Marketing (4) (17) - 50
Gas, Power and Renewables (1) - - 1
Other businesses and corporate (1) - - 6
---------------------------------------
(52) (239) (10) 593
=======================================
Half Year 2005
Exploration and Production (108) (516) (28) 1,352
Refining and Marketing (10) (31) - 93
Gas, Power and Renewables (5) (3) - 6
Other businesses and corporate (4) - - (5)
---------------------------------------
(127) (550) (28) 1,446
=======================================
Half Year 2004
Exploration and Production (96) (380) (20) 881
Refining and Marketing (8) (36) - 119
Gas, Power and Renewables (3) - - (1)
Other businesses and corporate (2) - - 13
---------------------------------------
(109) (416) (20) 1,012
=======================================
Notes
12. Third quarter results
BP's third quarter results will be announced on 25 October 2005.
13. Statutory accounts
The financial information shown in this publication is unaudited and
does not constitute statutory accounts. The 2004 Annual Report and
Accounts have been delivered to the UK Registrar of Companies; the
report of the auditors on those accounts was unqualified.
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: 26 July 2005 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary