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 10 February 2004
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 2003
London 10 February 2004
FOR IMMEDIATE RELEASE
RECORD ANNUAL RESULT, UP 42%; CONTINUING STRONG CASH GENERATION
---------------------------------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 $ million 2003 2002 %
======================= ====================
Replacement cost profit
1,697 2,142 1,819 before exceptional items 9,543 4,698
416 228 211 Special items(a) 444 1,443
522 498 637 Acquisition amortization(b) 2,392 2,574
----------------------- --------------------
Pro forma result adjusted
2,635 2,868 2,667 for special items 12,379 8,715 42
======================= ====================
7.61 8.07 7.07 - per ordinary share (pence) 34.25 25.93 32
11.78 13.00 12.07 - per ordinary share (cents) 55.83 38.90 44
0.71 0.78 0.72 - per ADS (dollars) 3.35 2.33
======================= ====================
- BP's fourth quarter pro forma result, adjusted for special items, was
$2,667 million, compared with $2,635 million a year ago, an increase of
1%. For the year, the result was a record $12,379 million compared with
$8,715 million, up 42%. Replacement cost profit, before exceptional
items, for the fourth quarter and year was $1,819 million and a record
$9,543 million respectively, compared with $1,697 million and
$4,698 million a year ago.
- The fourth quarter overall trading environment was more favourable than
a year ago.
- In Exploration and Production, the impact of higher prices and volumes
in the fourth quarter was offset by higher depreciation, foreign
exchange effects, one-time charges and an increase in the provision for
Unrealized Profit in Stock.
- Reserve replacement in 2003 was 122%. Including equity-accounted
entities and the effect of acquisitions (notably our interest in
TNK-BP) and disposals, additions to year end reserves were 158% of 2003
production.
- On 16 January 2004, we completed the deal to include AAR's 50% interest
in Slavneft into TNK-BP, at a cost of $1.4 billion in cash. On
13 January 2004, we sold our investment in PetroChina for
$1.65 billion.
- Net cash outflow for the quarter was $1,837 million and net cash inflow
for the year was $1,342 million, compared with an inflow of
$711 million and an outflow of $344 million a year ago.
- The pro forma ratio of net debt to net debt plus equity was 24% at the
end of the quarter.
- Return on average capital employed for the quarter and year
respectively, on a pro forma basis adjusted for special items, was 13%
and 16%, compared with 15% and 13% a year ago.
- The quarterly dividend was 6.75 cents per share ($0.405 per ADS). This
compares with 6.25 cents a year ago. For the year the dividend showed
an increase of 8.3%. In sterling terms, the quarterly dividend is
3.674 pence per share compared with 3.815 pence a year ago; for the
year the decrease was 0.8%.
BP Group Chief Executive, Lord Browne, said:
"Our results in 2003 have set a new record. We have delivered a good
result from our existing assets and operations, while building a strong
platform for the future. Our focus is now on delivering the growth in
free cash flow of which we believe our portfolio is capable. We intend
to restart our share buyback programme this quarter, subject to market
conditions."
The pro forma result is replacement cost profit before exceptional items
excluding acquisition amortization. The pro forma result, adjusted for special
items, has been derived from the group's reported UK GAAP accounting information
but is not in itself a recognized UK or US GAAP measure. This financial
performance information and measures derived therefrom, shown above and
elsewhere in the document, are provided in order to enable investors to evaluate
better BP's current performance against that of its competitors.
(a) The special items refer to non-recurring charges and credits. The
special items for the fourth quarter comprise impairment charges and
restructuring costs in Exploration and Production, Veba integration
costs in Refining and Marketing and a provision to cover future rental
payments on surplus property in Other businesses and corporate and tax
restructuring benefits.
(b) Acquisition amortization is depreciation and amortization relating to
the fixed asset revaluation adjustments and goodwill consequent upon
the ARCO and Burmah Castrol acquisitions. The fourth quarter 2003
includes accelerated depreciation of the revaluation adjustment in
respect of the impairment of former ARCO assets.
Summary Fourth Quarter Results
Exploration and Production's fourth quarter result was broadly in line with a
year ago, after reflecting the effects of higher oil and gas prices and a full
quarter of TNK-BP, offset by higher depreciation, foreign exchange effects,
one-time charges and an increase in the provision for Unrealized Profit in
Stock.
In Gas, Power and Renewables, the result reflects improvement in marketing and
trading, including LNG, partly offset by a lower result for the natural gas
liquids business.
The Refining and Marketing result increased 23% compared with a year ago due to
improved refining margins and marketing margins, particularly retail margins in
the USA and Europe, with some offset from higher gas fuel costs.
The Petrochemicals result reflects operational difficulties in the nitriles
business, the strength of the euro on our European cost base and non-routine
charges, partly offset by a slight improvement in margins.
Interest expense for the quarter was $227 million compared with $213 million for
the prior quarter. The increase reflects the inclusion of TNK-BP for a full
quarter, partly offset by lower debt buy-back costs and an increase in
capitalized interest.
The pro forma effective tax rate on replacement cost profit, before exceptional
items, and adjusted for special items, was 33.5% for the quarter compared with
34.0% a year ago. The special items in the quarter include tax restructuring
benefits of $150 million.
Capital expenditure was $4.7 billion for the quarter; there were no
acquisitions. Disposal proceeds for the quarter were $1.4 billion.
Net cash outflow was $1,837 million compared with an inflow of $711 million a
year ago, due to lower cash flow from operating activities and higher tax
payments, partly offset by higher disposal proceeds. The reduced cash flow from
operating activities reflects the payments of $1.6 billion to group pension
schemes.
Net debt at the end of the quarter was $20.2 billion. The pro forma ratio of net
debt to net debt plus equity was 24%.
---------
The commentaries above and following are based on the pro forma replacement cost
operating results, before exceptional items, adjusted for special items.
To reflect BP's increased focus on chemical products derived from oil and gas,
the Chemicals segment has been renamed Petrochemicals.
BP's share of the result of the TNK-BP joint venture has been included within
Exploration and Production with effect from 29 August. TNK-BP operational and
financial information has been estimated.
Reconciliation of Reported Results to
Pro Forma Results Adjusted for Special Items
Pro Forma Result Pro Forma Result
adjusted for ----- 4Q 2003 --------------- adjusted for
special items special items
-------------------
4Q 3Q 4Q Special Acq. Reported Year
2002 2003 2003 Items* Amort+ Earnings $ million 2003 2002
=========================================== ==============
Exploration and
3,666 3,813 3,687 323 426 2,938 Production 15,977 12,005
Gas, Power
72 98 77 - - 77 and Renewables 472 384
Refining and
587 978 722 146 211 365 Marketing 3,689 2,081
139 124 35 - - 35 Petrochemicals 606 765
Other businesses
(146) (320) (221) 74 - (295) and corporate (840) (515)
------------------------------------------- --------------
RC operating
4,318 4,693 4,300 543 637 3,120 profit 19,904 14,720
------------------------------------------- --------------
(317) (213) (227) - - (227)Interest expense (851) (1,264)
(1,360)(1,569)(1,365) (332) - (1,033)Taxation (6,504) (4,673)
(6) (43) (41) - - (41)MSI (170) (68)
------------------------------------------- --------------
RC profit before
2,635 2,868 2,667 211 637 1,819 exceptional items 12,379 8,715
------------------------------------------- --------------
(15)Exceptional items before tax
84 Taxation on exceptional items
-----
1,888 RC profit after exceptional items
84 Stock holding gains
-----
1,972 HC profit
=====
* The special items refer to non-recurring charges and credits. The special
items for the fourth quarter comprise impairment charges and restructuring
costs in Exploration and Production, Veba integration costs in Refining
and Marketing and a provision to cover future rental payments on surplus
property in Other businesses and corporate and tax restructuring benefits.
+ Acquisition amortization is depreciation and amortization relating to
the fixed asset revaluation adjustments and goodwill consequent upon
the ARCO and Burmah Castrol acquisitions. The fourth quarter 2003
includes accelerated depreciation of the revaluation adjustment in
respect of the impairment of former ARCO assets.
Operating Results
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= ==============
Replacement cost
3,181 3,844 3,120 operating profit ($m) 16,413 10,246
----------------------- --------------
Replacement cost profit
1,697 2,142 1,819 before exceptional items ($m) 9,543 4,698
----------------------- --------------
Profit after exceptional items ($m)
825 2,310 1,888 Replacement cost 10,251 5,741
651 2,394 1,972 Historical cost 10,267 6,845
----------------------- --------------
Per ordinary share (cents)
Pro forma result
11.78 13.00 12.07 adjusted for special items 55.83 38.90
RC profit before
7.58 9.71 8.23 exceptional items 43.03 20.97
2.92 10.85 8.93 HC profit after exceptional items 46.30 30.55
Per ADS (cents)
Pro forma result
70.68 78.00 72.42 adjusted for special items 334.98 233.40
RC profit before
45.48 58.26 49.38 exceptional items 258.18 125.82
17.52 65.10 53.58 HC profit after exceptional items 277.80 183.30
----------------------- --------------
Exploration and Production
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
================= ==============
3,248 3,520 2,938 Replacement cost operating profit 13,937 9,206
99 - 323 Special items 474 1,019
319 293 426 Acquisition amortization 1,566 1,780
----------------- --------------
Pro forma operating result
3,666 3,813 3,687 adjusted for special items 15,977 12,005
================= ==============
Results include:
179 136 193 Exploration expense 542 644
Of which:
124 75 129 Exploration expenditure written off 297 385
----------------- --------------
Production (Net of Royalties)
1,787 1,852 2,248 Crude oil (mb/d) 1,911 1,771
262 202 206 Natural gas liquids (mb/d) 210 247
2,049 2,054 2,454 Total liquids (mb/d)(a) 2,121 2,018
8,936 8,401 8,600 Natural gas (mmcf/d) 8,613 8,707
3,590 3,502 3,936 Total hydrocarbons (mboe/d)(b) 3,606 3,519
================= ==============
Average realizations
26.22 27.72 28.18 Crude oil ($/bbl) 28.23 24.06
14.62 19.39 20.15 Natural gas liquids ($/bbl) 19.26 12.85
24.78 26.79 27.30 Total liquids ($/bbl) 27.25 22.69
2.87 3.08 3.18 Natural gas ($/mcf) 3.39 2.46
21.03 22.58 23.15 Total hydrocarbons ($/bbl) 23.69 18.88
================= ==============
Average oil marker prices
($/bbl)
26.88 28.38 29.43 Brent 28.83 25.03
28.31 30.19 31.15 West Texas Intermediate 31.06 26.14
26.86 28.83 29.43 Alaska North Slope US West Coast 29.59 24.77
================= ==============
3.99 4.97 4.58 Henry Hub gas price ($/mmbtu)(c) 5.37 3.22
UK Gas - National
19.09 15.08 27.30 Balancing Point (p/therm) 20.28 15.78
================= ==============
(a) Crude oil and natural gas liquids.
(b) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
(c) Henry Hub First of the Month Index.
Exploration and Production
The pro forma result for the fourth quarter was $3,687 million, slightly ahead
of the result for the fourth quarter of 2002 when adjusted for special charges
of $323 million. Acquisition amortization of $426 million includes accelerated
amortization of $121 million. The special items and the accelerated acquisition
amortization relate to impairment of the Miller field ($133 million) in the UK
following a decision not to proceed with waterflood and gas import options and
four assets in the Gulf of Mexico Shelf ($296 million) following technical
reassessments and re-evaluation of future investment options, and special
restructuring charges of $15 million in respect of ongoing restructuring in the
UK and North America.
The quarter saw increased production and higher oil and gas prices. Liquids
realizations increased by $2.52/bbl, and natural gas realizations by $0.31/mcf
compared with a year ago. Higher depreciation, foreign exchange effects,
one-time charges in the USA and an increase in the provision for Unrealized
Profit in Stock (UPIS) offset the impact of higher volumes and prices in the
quarter. The charge of $57 million in the quarter for UPIS, which removes the
upstream margin from downstream inventories, compares with a credit of $49
million in the equivalent quarter of last year.
The full year result at $15,977 million, up $3,972 million on a year ago,
reflects the impact of increased production, higher oil and gas prices and a
reduction in exploration expense partly offset by an increase in the
depreciation charge.
During the quarter we had further exploration success in Angola on Block 31 with
the Marte discovery and in Block 15 with the Tchichumba discovery and in
Deepwater Gulf of Mexico with the Tubular Bells and the Puma discoveries.
Progress continues in our new profit centres. During the fourth quarter, the
deepwater developments of Jasmim and Xikomba in Angola and Na Kika in the Gulf
of Mexico started production. Other deepwater developments in the Gulf of Mexico
are progressing well with the Holstein and Mad Dog spars now on the Gulf Coast
for final construction and installation. Hull construction on Atlantis has
commenced in South Korea. In Azerbaijan, construction is well advanced on the
Azeri project and the BTC pipeline is on track for start-up in the first half of
2005. The Cannonball gas development in Trinidad has been approved and in Angola
we have commenced the awarding of major contracts on the Greater Plutonio
deepwater project.
Production for the quarter was up by more than 9% at 3,936 mboe/d compared with
the fourth quarter of 2002. This reflects a full quarter's production volumes
from our interest in TNK-BP partly offset by a reduction from divestments. Total
production for the year was 3,606 mboe/d, an increase of over 2% on last year
and reflects the offsetting impacts of divestments and the inclusion of TNK-BP
volumes from 29 August.
The reserve replacement ratio for the year was 122% with 1,342 billion barrels
of oil equivalent booked through discoveries, extensions, revisions and improved
recovery. Reserve replacement has exceeded production for the eleventh
consecutive year. Including equity-accounted entities and the effect of
acquisitions and disposals, additions to year end reserves were 158% of 2003
production.
During the fourth quarter we completed our 2003 programme of portfolio upgrading
with the sale of our 50% interest in the In Salah gas project in Algeria with
proceeds received on 23 December. This brought divestment proceeds for the year
to $4.9 billion.
On 16 January, we announced the completion of the transaction in which Alfa
Group and Access-Renova's 50% interest in Slavneft was transferred into TNK-BP.
Gas, Power and Renewables
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
====================== ==============
72 98 77 Replacement cost operating profit 472 354
- - - Special items - 30
- - - Acquisition amortization - -
---------------------- --------------
Pro forma operating result
72 98 77 adjusted for special items 472 384
====================== ==============
Gas sales volumes (mmcf/d)
2,715 2,174 2,565 UK 2,631 2,372
442 362 511 Rest of Europe 441 399
10,723 11,808 12,121 USA 11,528 9,315
10,659 11,133 13,138 Rest of World 11,669 9,535
----------------------- --------------
24,539 25,477 28,335 Total gas sales volumes 26,269 21,621
======================= ==============
NGL sales volumes (mb/d)
- - - UK - -
- - - Rest of Europe - -
262 188 206 USA 164 196
244 163 209 Rest of World 182 214
----------------------- --------------
506 351 415 Total NGL sales volumes 346 410
======================= ==============
Gas, Power and Renewables
The pro forma result for the fourth quarter was $77 million compared with $72
million a year ago. The year's result, after adjusting for special items, was
$472 million compared to $384 million for 2002.
The fourth quarter result is up due to an improved marketing and trading result,
including LNG, which more than offset a lower result in the natural gas liquids
business. The full year result reflects a strong performance from marketing and
trading, including LNG, partly offset by a lower result for the natural gas
liquids business, restructuring charges in Solar and the absence of a
contribution from Ruhrgas following the sale of our interest last year.
The increased marketing and trading results for the quarter and the year were
driven by higher gas sales volumes in North America and a strong performance
from the global LNG business. Fourth quarter gas sales volumes were up 15% and
equity LNG sales were up 36%. During the quarter BP and Sonatrach announced a
joint venture that has secured long term capacity rights to the Isle of Grain
import regasification terminal in the South East of England, which will enable
the two companies to source and then supply 500 mmscfd of LNG into the UK market
from 2005. BP announced that it proposes to build an LNG terminal in New Jersey,
USA, which is scheduled to come into service around 2008. BP and BPMIGAS of
Indonesia have signed a Heads of Agreement with Sempra LNG Corporation for a
20-year supply of LNG from Indonesia to markets in the USA and Mexico. BP has
acquired a 35% interest in SK Power (previously a subsidiary of SK Corporation
of South Korea), which has begun construction of a power station in Gwangyang,
South Korea. The Tangguh LNG project was selected earlier as the supplier to the
power station.
The result for the natural gas liquids business for the fourth quarter and year
is down due to high gas prices relative to liquids prices in North America,
which has led to lower sales volumes.
Refining and Marketing
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
======================= =============
(36) 455 365 Replacement cost operating profit 2,340 872
420 318 146 Special items 523 415
203 205 211 Acquisition amortization 826 794
----------------------- -------------
Pro forma operating result
587 978 722 adjusted for special items 3,689 2,081
======================= =============
Refinery throughputs (mb/d)
392 405 389 UK 397 389
959 909 873 Rest of Europe 932 918
1,439 1,406 1,374 USA 1,386 1,439
367 366 378 Rest of World 382 357
----------------------- -------------
3,157 3,086 3,014 Total throughput 3,097 3,103
======================= =============
96.1 96.2 94.9 Refining availability(a)(%) 95.5 96.1
======================= =============
Oil sales volumes (mb/d)
Refined products
269 270 257 UK 271 253
1,541 1,293 1,295 Rest of Europe 1,316 1,467
1,875 1,828 1,788 USA 1,797 1,874
611 657 681 Rest of World 648 586
----------------------- --------------
4,296 4,048 4,021 Total marketing sales 4,032 4,180
2,064 2,647 2,350 Trading/supply sales 2,691 2,383
----------------------- --------------
6,360 6,695 6,371 Total refined product sales 6,723 6,563
5,314 5,316 4,504 Crude oil 5,007 4,671
----------------------- --------------
11,674 12,011 10,875 Total oil sales 11,730 11,234
======================= ==============
Global Indicator Refining Margin(b)
($/bbl)
2.19 2.47 2.21 NWE 2.62 1.04
2.98 5.61 3.53 USGC 4.71 2.36
4.09 6.39 2.89 Midwest 4.54 3.30
3.95 9.04 6.09 USWC 7.06 4.34
1.41 1.27 2.20 Singapore 1.77 0.57
2.76 4.59 3.14 BP Average 3.88 2.11
======================= ==============
(a) Refining availability is the weighted average percentage of the period
that refinery units are available for processing, after accounting for
downtime such as turnarounds.
(b) The Global Indicator Refining Margin (GIM) is the average of six
regional indicator margins weighted for BP's crude refining capacity in
each region. Each regional indicator margin is based on a single
representative crude with product yields characteristic of the typical
level of upgrading complexity. The regional indicator margins may not be
representative of the margins achieved by BP in any period because of
BP's particular refinery configurations and crude and product slate.
Refining and Marketing
The pro forma result for the fourth quarter, adjusted for special items, was
$722 million. This compares with $587 million a year ago, an increase of $135
million. The net special items of $146 million for the quarter consisted of Veba
integration costs of $156 million and a credit of $10 million arising from the
reversal of restructuring provisions. This represents the final charge in
respect of the Veba integration.
The result for the year of $3,689 million is up $1,608 million compared to last
year, an increase of 77%. The net special items for the year of $523 million
comprised a $246 million charge resulting from a reassessment of our
environmental remediation provisions, Veba integration costs of $287 million and
a credit of $10 million arising from the reversal of restructuring provisions.
The results for the fourth quarter and year reflect improved refining margins
despite higher gas fuel costs, and higher marketing margins, particularly retail
margins in the USA and Europe. Improved operating performance in the marketing
businesses also contributed to the results.
Refining throughputs for the quarter were 4.5% lower than the same period last
year due to disposals, with refining availability at 94.9% compared with 96.1% a
year ago. Full year refining throughputs were flat compared with 2002, while
availability for the year was 95.5% compared with 96.1%. Marketing volumes for
the quarter were 6% lower than the same period last year and 4% lower for the
year, as expected, due to divestments.
The roll-out of our new premium retail fuels, Ultimate gasoline and diesel,
continued this quarter. Ultimate is now available in the UK, the USA, Greece,
Spain, Portugal and Australia.
During the quarter we reached agreement in principle for H&R WASAG to purchase
BP's European Special Products business, including the Neuhof base oil refinery
in Hamburg, Germany.
Petrochemicals
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
======================= =============
104 81 35 Replacement cost operating profit 568 515
35 43 - Special items 38 250
- - - Acquisition amortization - -
----------------------- -------------
Pro forma operating result
139 124 35 adjusted for special items 606 765
======================= =============
108 109 114(b)Chemicals Indicator Margin(a)($/te) 113(b) 104
======================= =============
Petrochemicals production (kte)
698 771 832 UK 3,186 3,221
2,679 2,724 2,790 Rest of Europe 10,958 10,526
2,447 2,563 2,466 USA 10,068 10,201
785 982 1,065 Rest of World 3,731 3,040
----------------------- --------------
6,609 7,040 7,153 Total production 27,943 26,988
======================= ==============
(a) The Chemicals Indicator Margin (CIM) is a weighted average of
externally-based product margins. It is based on market data collected
by Nexant (formerly Chem Systems) in their quarterly market analyses,
then weighted based on BP's product portfolio. It does not cover our
entire portfolio of products, and consequently is only indicative rather
than representative of the margins achieved by BP in any particular
period. Amongst the products and businesses covered in the CIM are
olefins and derivatives, the aromatics and derivatives, linear alpha-
olefins (LAOs), acetic acid, vinyl acetate monomers and nitriles. Not
included are fabrics and fibres, plastic fabrications, poly alpha-
olefins (PAOs), anhydrides, speciality intermediates, and the remaining
parts of the solvents and acetyls businesses.
(b) Provisional. The data for the fourth quarter is based on two months'
actuals and one month of provisional data.
Petrochemicals
Petrochemicals' pro forma result for the fourth quarter was $35 million, down
from $124 million in the third quarter. A slight improvement in margins was more
than offset by several factors including operational difficulties in the
nitriles business, the strength of the euro on our European cost base and a
number of non-routine charges.
There were no special items in the fourth quarter. Special items for the year
were $38 million.
The year's result of $606 million was down $159 million. In addition to the
factors affecting the fourth quarter, the decrease reflected prolonged margin
weakness, primarily in our European polymers businesses, and a lower result from
SARS affected businesses in Asia during the first half year.
Petrochemicals production of 7,153 thousand tonnes in the fourth quarter was up
113 thousand tonnes on the previous quarter. Production for the year was 27,943
thousand tonnes, up 3.5% on 2002, establishing a new record for the business.
The increase was due to improved asset utilization across the business as well
as new production capacity and increased ownership in our Asian associated
undertakings.
During the fourth quarter, our portfolio management actions continued. We sold
our interest in AG International Chemical Company, a purified isophthalic acid
associated undertaking in Japan. Engineering contracts were awarded for a new
300 thousand-tonne acetic acid plant to be built in Taiwan as part of the
Formosa BP Chemicals Corporation joint venture.
Other Businesses and Corporate
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
================= =============
(207) (310) (295) Replacement cost operating loss (904) (701)
61 (10) 74 Special items 64 186
- - - Acquisition amortization - -
----------------- -------------
Pro forma operating result
(146) (320) (221) adjusted for special items (840) (515)
================= =============
Other businesses and corporate comprises Finance, the group's coal asset and
aluminium asset, its investments in PetroChina and Sinopec, interest income and
costs relating to corporate activities. BP sold its interest in PetroChina for
$1.65 billion on 13 January 2004. The special item for the quarter is a
provision for future rental payments on surplus leasehold property. Although not
classifed as special items, the result also includes charges of $59 million in
respect of additional provisions for litigation and $41 million for BP
Foundation funding and a foreign exchange credit of $42 million.
Exceptional Items
4Q 3Q 4Q Year
2002 2003 2003 $ million 2003 2002
================= =============
Profit (loss) on sale of fixed assets and
(893) 172 (15) businesses or termination of operations 831 1,168
21 (4) 84 Taxation (charge) credit (123) (125)
----------------- -------------
(872) 168 69 Exceptional items after taxation 708 1,043
================= =============
Exceptional items for the fourth quarter include a gain on the sale of our
interest in PT Kaltim Prima Coal, more than offset by losses on various minor
Exploration and Production and Refining and Marketing disposals.
2003 Dividends
4Q 3Q 4Q Year
2002 2003 2003 2003 2002
================= =============
Dividends per ordinary share
6.25 6.50 6.75 cents 26.00 24.00
3.815 3.857 3.674 pence 15.517 15.638
37.5 39.0 40.5 Dividends per ADS (cents) 156.0 144.0
----------------------- --------------
BP today announced a fourth quarterly dividend for 2003 of 6.75 cents per
ordinary share. Holders of ordinary shares will receive 3.674 pence per share
and holders of American Depositary Receipts (ADRs) $0.405 per ADS share. The
dividend is payable on 15 March to shareholders on the register on 20 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 15 March. The first quarter 2004 results and dividend will be announced on 27
April 2004.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
"The world economy recovered in the fourth quarter. Growth was robust in
the USA and in Asia, particularly China, but Europe continued to lag. The
USA and Asia are expected to continue growing above trend in 2004 but
European growth is expected to remain below trend, with the exception of
the UK.
"Crude oil prices continued to strengthen in the fourth quarter, adding
around $1 per barrel compared with the third quarter to average $29.43
per barrel (Dated Brent). Prices remained strong in January, averaging
$31.32 (Dated Brent) in the face of low US crude oil inventories and cold
weather in the eastern USA. Underlying oil demand appears to be strong on
the back of global economic recovery and the ongoing economic boom in
China, and has been growing faster than oil supply outside OPEC. OPEC
fourth quarter production is thought to have increased modestly, despite
the 900,000 barrels per day quota cut that became effective on 1
November. We expect that future oil prices will largely depend on OPEC's
ability to realign production in line with seasonal requirements.
"US natural gas prices continued to trade between residual fuel oil and
distillate parity in the fourth quarter, with the Henry Hub First of the
Month Index averaging $4.58/mmbtu, 39 cents per mmbtu below the third
quarter. Cold January weather raised prices to above $6/mmbtu on average,
but they have since eased. Working gas inventories are above last year's
and 5-year average levels. We expect the path of gas prices will depend
on weather during the balance of winter and movements in oil prices.
"Refining margins in the fourth quarter weakened relative to the third
quarter in the face of crude market tightness and recovering product
inventories, but remained above historic average levels. Margins have
been mostly firm so far in 2004 on the back of strong global oil demand
growth and cold US weather. Demand strength should continue to be a
constructive factor for refining margins. Retail margins were lower in
the fourth quarter relative to the third quarter.
"Petrochemical margins in the fourth quarter remained under pressure from
high feedstock costs and this has carried over into the first quarter of
2004. However, margins and sales are expected to improve in 2004,
reflecting modest increases in industry utilization rates.
"Capital expenditure for 2003 was $14.0 billion, excluding acquisitions,
and is projected to be approximately $13.5 billion in 2004. Production
capacity is expected to grow to more than 4 mmboe/d in 2004, an increase
of more than 10% from actual 2003 output. After adjusting for the impact
of portfolio changes, this is consistent with the lower end of the
guidance range for 2004 capacity of 3.6 to 3.7 mmboe/d given in February
2003. The company intends to restart its share buyback programme this
quarter, subject to market conditions. Purchases may be increased,
decreased or discontinued at any time without prior notice."
----------------------------------------------------------------------
The foregoing discussion, in particular the statements under "Outlook",
contains forward looking statements particularly those regarding BP's
asset portfolio and changes in it, capital expenditure, costs, demand,
future performance, gearing, growth and other trend projections,
margins, prices, production, sales, share repurchases and the timing of
pending transactions. Forward looking statements by their nature
involve risks and uncertainties and actual results may differ from
those expressed in such statements depending on a variety of factors
including the following: the timing of bringing new fields on stream;
industry product supply; demand and pricing; currency exchange rates;
operational problems; general economic conditions; political stability
and economic growth in relevant areas of the world; changes in
governmental regulations; exchange rate fluctuations; development and
use of new technology and successful commercial relationships; the
actions of competitors; natural disasters and other changes in business
conditions; prolonged adverse weather conditions; and wars and acts of
terrorism or sabotage. For more information you should refer to our
Annual Report and Accounts 2002 and our Annual Report on Form 20-F
filed with the US Securities and Exchange Commission.
----------------------------------------------------------------------
BP p.l.c. and Subsidiaries
Summarized Group Results
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= ==============
$ million $ million
3,248 3,520 2,938 Exploration and Production 13,937 9,206
72 98 77 Gas, Power and Renewables 472 354
(36) 455 365 Refining and Marketing 2,340 872
104 81 35 Petrochemicals 568 515
(207) (310) (295) Other businesses and corporate (904) (701)
----------------------- --------------
Total replacement cost
3,181 3,844 3,120 operating profit 16,413 10,246
Profit (loss) on sale of
fixed assets and businesses or
(893) 172 (15) termination of operations (Note 4) 831 1,168
----------------------- --------------
Replacement cost profit before
2,288 4,016 3,105 interest and tax 17,244 11,414
(174) 84 84 Stock holding gains (losses)(Note 5) 16 1,129
----------------------- --------------
Historical cost profit before
2,114 4,100 3,189 interest and tax 17,260 12,543
332 213 227 Interest expense (Note 6) 851 1,279
----------------------- --------------
1,782 3,887 2,962 Profit before taxation 16,409 11,264
1,125 1,450 949 Taxation (Note 7) 5,972 4,342
----------------------- --------------
657 2,437 2,013 Profit after taxation 10,437 6,922
6 43 41 Minority shareholders' interest 170 77
----------------------- --------------
651 2,394 1,972 Profit for the period 10,267 6,845
----------------------- --------------
1,398 1,438 1,495 Distribution to shareholders 5,753 5,375
----------------------- --------------
Retained profit (deficit)
(747) 956 477 for the period 4,514 1,470
======================= ==============
Earnings per ordinary share - cents
2.92 10.85 8.93 Basic 46.30 30.55
2.92 10.74 8.69 Diluted 45.87 30.41
======================= ==============
Replacement Cost Results
Historical cost profit
651 2,394 1,972 for the period 10,267 6,845
Stock holding (gains) losses
174 (84) (84) net of MSI (16) (1,104)
----------------------- --------------
Replacement cost profit
825 2,310 1,888 for the period 10,251 5,741
872 (168) (69) Exceptional items (net of tax) (708) (1,043)
----------------------- --------------
Replacement cost profit before
1,697 2,142 1,819 exceptional items 9,543 4,698
----------------------- --------------
Earnings per ordinary share - cents
On replacement cost profit before
7.58 9.71 8.23 exceptional items 43.03 20.97
======================= =============
Summarized Group Balance Sheet
31 December 31 December
2003 2002
--------------------------
$ million
Fixed assets
Intangible assets 13,642 15,566
Tangible assets 91,911 87,682
Investments 17,554 10,811
---------------------
123,107 114,059
---------------------
Current assets
Stocks 11,617 10,181
Debtors 40,716 33,150
Investments 185 215
Cash at bank and in hand 1,947 1,520
---------------------
54,465 45,066
Creditors - amounts falling due within one year
Finance debt 9,456 10,086
Other creditors 41,128 36,215
---------------------
Net current assets (liabilities) 3,881 (1,235)
---------------------
Total assets less current liabilities 126,988 112,824
Creditors - amounts falling due
after more than one year
Finance debt 12,869 11,922
Other creditors 6,090 3,455
Provisions for liabilities and charges
Deferred taxation 15,273 13,514
Other provisions 15,693 13,886
---------------------
Net assets 77,063 70,047
Minority shareholders' interest - equity 1,125 638
---------------------
BP shareholders' interest 75,938 69,409
=====================
Movement in BP shareholders' interest: $ million
At 31 December 2002 69,409
Profit for the period 10,267
Distribution to shareholders (5,753)
Currency translation differences (net of tax) 3,841
Issue of ordinary share capital for employee share schemes 173
Repurchase of ordinary share capital (1,999)
------
At 31 December 2003 75,938
======
Summarized Group Cash Flow Statement
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= ============
$ million $ million
Net cash inflow from
6,197 4,891 3,500 operating activities (a) 21,698 19,342
----------------------- ---------------
69 39 51 Dividends from joint ventures 131 198
----------------------- ---------------
Dividends from
65 65 120 associated undertakings 417 368
----------------------- ---------------
Servicing of finance and returns
on investments
63 41 51 Interest received 175 231
(335) (163) (190) Interest paid (1,006) (1,204)
38 26 66 Dividends received 140 102
Dividends paid to
(11) (4) (3) minority shareholders (20) (40)
----------------------- ---------------
Net cash outflow from servicing of
(245) (100) (76) finance and returns on investments (711) (911)
----------------------- ---------------
Taxation
(419) (264) (329) UK corporation tax (1,185) (979)
(642) (539) (1,187) Overseas tax (3,619) (2,115)
----------------------- ---------------
(1,061) (803) (1,516) Tax paid (4,804) (3,094)
----------------------- ---------------
Capital expenditure and
financial investment
(3,544) (3,063) (3,740) Payments for fixed assets (12,440) (12,116)
Proceeds from the sale
726 874 1,410 of fixed assets 6,253 2,470
----------------------- ---------------
Net cash outflow for
capital expenditure and
(2,818) (2,189) (2,330) financial investment (6,187) (9,646)
----------------------- --------------
Acquisitions and disposals
(28) (28) (33) Acquisitions, net of cash acquired (211) (4,324)
Proceeds from the sale
304 - - of businesses 179 1,974
Acquisition of investment in
- (2,625) 274 TNK-BP joint venture (2,351) -
Net investment in
(217) - (162) other joint ventures (178) (354)
Investments in associated
(215) (243) (227) undertakings (987) (971)
Proceeds from the sale of
- - - investment in Ruhrgas - 2,338
----------------------- ---------------
Net cash outflow for
(156) (2,896) (148) acquisitions and disposals (3,548) (1,337)
----------------------- ---------------
(1,340) (1,433) (1,438) Equity dividends paid (5,654) (5,264)
----------------------- ---------------
711 (2,426) (1,837) Net cash inflow (outflow) 1,342 (344)
======================= ===============
304 (1,471) (2,411) Financing (b) 1,066 (181)
(56) 76 (223) Management of liquid resources (41) (220)
463 (1,031) 797 Increase (decrease) in cash 317 57
----------------------- ---------------
711 (2,426) (1,837) 1,342 (344)
======================= ===============
Analysis of Cash Flow
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= ==============
$ million $ million
(a) Reconciliation of historical
cost profit before interest
and tax to net cash inflow
from operating activities
Historical cost profit before
2,114 4,100 3,189 interest and tax 17,260 12,543
2,515 2,485 3,093 Depreciation and amounts provided 10,940 10,401
Exploration expenditure
124 75 129 written off 297 385
Share of profits of joint ventures
(250) (433) (494) and associated undertakings (1,438) (966)
(115) (72) (121) Interest and other income (341) (358)
(Profit) loss on sale of fixed
895 (172) 15 assets and businesses (831) (1,166)
451 765 563 Charge for provisions 1,734 1,277
(424) (278) (382) Utilization of provisions (1,204) (1,427)
(63) (1,048) (362) (Increase) decrease in stocks (841) (1,521)
(269) (638) (1,307) (Increase) decrease in debtors (5,628) (2,672)
1,219 107 (823) Increase (decrease) in creditors 1,750 2,846
----------------------- ---------------
Net cash inflow from
6,197 4,891 3,500 operating activities 21,698 19,342
======================= ===============
(b) Financing
(651) (1,433) (1,666) Long-term borrowing (4,322) (3,707)
905 1,774 776 Repayments of long-term borrowing 3,560 2,369
(3,970) (1,924) (1,738) Short-term borrowing (4,706) (9,849)
Repayments of short-term
4,037 143 278 borrowing 4,708 10,451
----------------------- ---------------
321 (1,440) (2,350) (760) (736)
(17) (31) (61) Issue of ordinary share capital (173) (195)
Repurchase of ordinary
- - - share capital 1,999 750
----------------------- ---------------
Net cash outflow
304 (1,471) (2,411) (inflow)from financing 1,066 (181)
======================= ===============
Capital Expenditure and Acquisitions
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million $ million
By business
Exploration and Production
177 182 189 UK 787 955
73 80 75 Rest of Europe 279 262
1,079 989 1,145 USA 4,109 4,303
1,244 6,999 1,194 Rest of World(a) 10,277 4,179
----------------------- --------------
2,573 8,250 2,603 15,452 9,699
----------------------- --------------
Gas, Power and Renewables
- 15 21 UK 68 28
41 6 46 Rest of Europe(b) 76 161
60 18 44 USA 148 160
22 19 24 Rest of World 67 59
----------------------- --------------
123 58 135 359 408
----------------------- --------------
Refining and Marketing
163 89 249 UK 477 395
273 169 446 Rest of Europe(c) 783 5,759
430 322 623 USA 1,509 1,291
180 79 181 Rest of World 311 308
----------------------- --------------
1,046 659 1,499 3,080 7,753
----------------------- --------------
Petrochemicals
57 51 35 UK 116 112
10 16 69 Rest of Europe 137 173
116 55 130 USA 291 262
102 60 65 Rest of World 231 276
----------------------- --------------
285 182 299 775 823
----------------------- --------------
61 59 131 Other businesses and corporate(d)(e) 409 428
----------------------- --------------
4,088 9,208 4,667 20,075 19,111
======================= ==============
By geographical area
434 377 580 UK 1,619 1,637
398 271 637 Rest of Europe 1,277 6,556
1,708 1,403 1,985 USA 6,291 6,095
1,548 7,157 1,465 Rest of World 10,888 4,823
----------------------- --------------
4,088 9,208 4,667 20,075 19,111
======================= ==============
(a) Third quarter includes $5,888 million for the acquisition of our
interest in TNK-BP. Fourth quarter includes a subsequent adjustment of
$94 million to give a net total cost for the year 2003 of
$5,794 million.
Year 2002 included the acquisition of an additional interest in Sidanco.
(b) Year 2002 included the acquisition of a 5% stake in Enagas.
(c) Year 2002 included the acquisition of 100% of Veba.
(d) Year 2003 included the acquisition of the preferred stock of CH-Twenty.
(e) Year 2002 included the acquisition of the minority interest in Veba's
upstream oil and gas assets.
US dollar/Sterling exchange rates
1.57 1.61 1.70 Average rate for the period 1.63 1.50
1.60 1.66 1.78 Period-end rate 1.78 1.60
======================= =============
Analysis of Replacement Cost Operating Profit
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million $ million
By business
Exploration and Production
965 582 700 UK 2,889 2,526
177 124 152 Rest of Europe 610 714
1,081 1,368 680 USA 5,294 2,835
1,025 1,446 1,406 Rest of World 5,144 3,131
----------------------- --------------
3,248 3,520 2,938 13,937 9,206
----------------------- --------------
Gas, Power and Renewables
(31) 13 40 UK 74 (94)
1 (12) (11) Rest of Europe (37) 100
9 54 (3) USA 172 25
93 43 51 Rest of World 263 323
----------------------- -------------
72 98 77 472 354
----------------------- -------------
Refining and Marketing
(155) (119) (84) UK (208) (498)
(53) 325 141 Rest of Europe 1,226 571
80 51 161 USA 632 335
92 198 147 Rest of World 690 464
----------------------- -------------
(36) 455 365 2,340 872
----------------------- -------------
Petrochemicals
(47) (94) (26) UK (177) (82)
65 85 37 Rest of Europe 457 337
24 31 (10) USA 112 126
62 59 34 Rest of World 176 134
----------------------- -------------
104 81 35 568 515
----------------------- -------------
(207) (310) (295) Other businesses and corporate (904) (701)
----------------------- --------------
3,181 3,844 3,120 16,413 10,246
======================= ==============
By geographical area
793 283 943 UK 2,594 1,696
171 525 277 Rest of Europe 2,208 1,703
944 1,279 193 USA 5,201 2,818
1,273 1,757 1,707 Rest of World 6,410 4,029
----------------------- --------------
3,181 3,844 3,120 16,413 10,246
======================= ==============
Included above
83 303 402 Share of profits of joint ventures 923 346
Share of profits of
161 128 93 associated undertakings 511 616
----------------------- --------------
244 431 495 1,434 962
======================= ==============
Notes
1. Turnover
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= ==============
$ million $ million
By business
7,356 7,310 7,530 Exploration and Production 31,341 25,753
12,041 15,904 16,668 Gas, Power and Renewables 65,445 37,357
33,443 38,353 36,378 Refining and Marketing 149,477 125,836
3,118 3,798 4,336 Petrochemicals 16,075 13,064
Other businesses
131 138 137 and corporate 515 510
----------------------- ---------------
56,089 65,503 65,049 262,853 202,520
Less: sales between
6,367 7,253 7,185 businesses 30,282 23,799
----------------------- ---------------
49,722 58,250 57,864 Group excluding JVs 232,571 178,721
Share of sales by
413 914 1,798 joint ventures 3,474 1,465
----------------------- ---------------
50,135 59,164 59,662 236,045 180,186
======================= ===============
By geographical area
Group excluding JVs
13,084 12,561 14,117 UK 54,971 48,748
11,720 12,476 12,288 Rest of Europe 50,582 46,518
22,573 29,119 26,347 USA 108,910 80,381
10,845 12,766 13,894 Rest of World 52,498 34,401
----------------------- ---------------
58,222 66,922 66,646 266,961 210,048
Less: sales between
8,500 8,672 8,782 areas 34,390 31,327
----------------------- ---------------
49,722 58,250 57,864 232,571 178,721
======================= ===============
2. Replacement cost profit
Replacement cost profits reflect the current cost of supplies. The
replacement cost profit for the period is arrived at by excluding from
the historical cost profit stock holding gains and losses.
Notes
3. Operating profits are after charging:
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Exploration expense
1 11 1 UK 17 27
6 23 5 Rest of Europe 37 47
30 60 60 USA 204 258
142 42 127 Rest of World 284 312
----------------------- --------------
179 136 193 542 644
======================= ==============
Production taxes (a)
64 65 44 UK petroleum revenue tax 300 309
298 351 377 Overseas production taxes 1,423 965
----------------------- --------------
362 416 421 1,723 1,274
======================= ==============
(a) Production taxes are charged against Exploration and Production's
operating profit and are not included in the charge for taxation in
Note 7.
4. Analysis of exceptional items
(1,133) 196 (49) Exploration and Production 913 (726)
(33) (2) (10) Gas, Power and Renewables (6) 1,551
365 (21) (91) Refining and Marketing (213) 613
(122) 13 16 Petrochemicals 38 (256)
30 (14) 119 Other businesses and corporate 99 (14)
----------------------- --------------
Profit (loss) on sale of fixed
assets and businesses or
(893) 172 (15) termination of operations 831 1,168
21 (4) 84 Taxation (charge) credit (123) (125)
----------------------- --------------
Exceptional items
(872) 168 69 after taxation 708 1,043
======================= ==============
Notes
5. Stock holding gains (losses)
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million $ million
(2) - - Exploration and Production 3 3
41 (7) 58 Gas, Power and Renewables 6 51
(201) 89 16 Refining and Marketing (48) 1,049
(12) 2 10 Petrochemicals 55 26
---------------------- --------------
(174) 84 84 16 1,129
- - - Minority shareholders' interest - 25
---------------------- --------------
(174) 84 84 16 1,104
====================== ==============
6. Interest expense
248 178 172 Group interest payable(a) 700 1,026
(33) (53) (60) Capitalized (190) (100)
----------------------- --------------
215 125 112 510 926
14 23 36 Joint ventures 89 58
19 11 12 Associated undertakings 45 83
Unwinding of discount
42 45 42 on provisions 173 170
Unwinding of discount on
deferred consideration for
acquisition of investment
- 9 25 in TNK-BP 34 -
Change in discount rate
42 - - for provisions - 42
----------------------- --------------
332 213 227 851 1,279
======================= ==============
(a) Includes charges
relating to the early
15 18 10 redemption of debt 31 15
----------------------- --------------
7. Charge for taxation
1,112 1,528 404 Current 4,919 3,148
13 (78) 545 Deferred(a) 1,053 1,194
----------------------- --------------
1,125 1,450 949 5,972 4,342
======================= ==============
366 280 390 UK(a) 1,568 1,436
759 1,170 559 Overseas 4,404 2,906
----------------------- --------------
1,125 1,450 949 5,972 4,342
======================= ==============
(a) Includes the adjustment
to the North Sea deferred
tax balance for the
supplementary
- - - UK corporation tax of 10% - 355
----------------------- --------------
Notes
8. Analysis of changes in net debt
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Opening balance
22,276 18,594 19,970 Finance debt 22,008 21,417
1,005 2,115 1,091 Less: Cash 1,520 1,358
285 329 404 Current asset investments 215 450
----------------------- ---------------
20,986 16,150 18,475 Opening net debt 20,273 19,609
----------------------- ---------------
Closing balance
22,008 19,970 22,325 Finance debt 22,325 22,008
1,520 1,091 1,947 Less: Cash 1,947 1,520
215 404 185 Current asset investments 185 215
----------------------- ---------------
20,273 18,475 20,193 Closing net debt 20,193 20,273
----------------------- ---------------
Decrease (increase)
713 (2,325) (1,718) in net debt 80 (664)
======================= ===============
Movement in cash/
463 (1,031) 797 bank overdrafts 317 57
(Decrease) increase in
(56) 76 (223) current asset investments (41) (220)
Net cash (inflow) outflow
from financing(excluding
321 (1,440) (2,350) share capital) (760) (736)
Partnership interests
- - - exchanged for BP loan notes - 1,135
- 93 - Debt transferred to TNK-BP 93 -
Exchange of Exchangeable Bonds
for Lukoil American
- - - Depositary Shares 420 -
19 (31) 5 Other movements 144 76
(3) (12) (3) Debt acquired (15) (1,002)
----------------------- --------------
Movement in net debt before
744 (2,345) (1,774) exchange effects 158 (690)
(31) 20 56 Exchange adjustments (78) 26
----------------------- --------------
(Increase) decrease
713 (2,325) (1,718) in net debt 80 (664)
======================= ==============
Notes
9. TNK-BP Operational and Financial Information
29 August - Fourth 29 August -
30 September Quarter 31 December
2003 2003 2003
============ ======= ============
Production (Net of royalties) (BP share)
654 669 Crude oil (mb/d) 665
239 296 Natural gas (mmcf/d) 281
695 720 Total hydrocarbons (mboe/d)(a) 713
============ ======= ============
$ million Income statement (BP share) $ million
158 354 Replacement cost operating profit 512
Profit (loss) on sale of fixed
- - assets and businesses -
- - Stock holding gains (losses) -
(13) (24) Interest expense(b) (37)
(30) (53) Taxation (83)
(1) 1 Minority shareholders' interest -
------------ ------- ------------
114 278 Net Income 392
============ ======= ============
Replacement cost profit
114 278 before exceptional items 392
============ ======= ============
(b) Excludes unwinding of discount
9 25 or deferred consideration 34
============ ======= ============
Balance Sheet 31 December
2003
============
$ million
Fixed assets - investments
Gross assets 10,339
Gross liabilities (3,290)
------------
7,049
============
Deferred consideration
Due within one year 1,227
Due after more than one year 2,352
------------
3,579
============
29 August - Fourth 29 August -
30 September Quarter 31 December
2003 2003 2003
============ ======= ============
$ million Cash Flow $ million
Acquisition of investment
(2,625) 274 in TNK-BP joint venture (2,351)
============
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
BP's share of the result of the TNK-BP joint venture has been included within
Exploration and Production with effect from 29 August. TNK-BP operational and
financial information has been estimated.
Notes
10. Consolidated statement of cash flows presented on a US GAAP format
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Operating activities
657 2,437 2,013 Profit after taxation 10,437 6,922
Adjustments to reconcile
profits after tax to net
cash provided by
operating activities
Depreciation and
2,515 2,485 3,093 amounts provided 10,940 10,401
Exploration expenditure
124 75 129 written off 297 385
Share of (profit) loss of
joint ventures and associates
(8) (197) (217) less dividends received (532) 3
(Profit) loss on sale
of businesses and
895 (172) 15 fixed assets (831) (1,166)
Working capital movement
907 (873) (3,712) (see analysis below) (4,953) (1,416)
13 (78) 545 Deferred taxation 1,053 1,194
(33) 472 276 Other 530 (280)
----------------------- ---------------
Net cash provided by
5,070 4,149 2,142 operating activities 16,941 16,043
----------------------- ---------------
Investing activities
(3,577) (3,116) (3,800) Capital expenditures (12,630) (12,216)
Acquisitions, net of
(28) (28) (33) cash acquired (211) (4,324)
Acquisition of investment in
- (2,625) 274 TNK-BP joint venture (2,351) -
Net investment in other
(217) - (162) joint ventures (178) (354)
Investment in
(215) (243) (227) associated undertakings (987) (971)
Proceeds from
1,030 874 1,410 disposal of assets 6,432 6,782
----------------------- --------------
Net cash used in
(3,007) (5,138) (2,538) investing activities (9,925) (11,083)
----------------------- --------------
Notes
10. Consolidated statement of cash flows presented on a US GAAP format
(continued)
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million $ million
Financing activities
Net proceeds from shares
17 31 61 issued (repurchased) (1,826) (555)
Proceeds from
651 1,433 1,666 long-term financing 4,322 3,707
Repayments of
(905) (1,774) (776) long-term financing (3,560) (2,369)
Net (decrease) increase
(67) 1,781 1,460 in short-term debt (2) (602)
Dividends paid
(1,340) (1,433) (1,438) - BP shareholders (5,654) (5,264)
(11) (4) (3) - Minority shareholders (20) (40)
----------------------- -------------
Net cash used in
(1,655) 34 970 financing activities (6,740) (5,123)
----------------------- --------------
Currency translation
differences relating to
37 6 63 cash and cash equivalents 121 90
----------------------- --------------
Increase (decrease) in
445 (949) 637 cash and cash equivalents 397 (73)
Cash and cash equivalents
1,290 2,444 1,495 at beginning of period 1,735 1,808
----------------------- --------------
Cash and cash equivalents
1,735 1,495 2,132 at end of period 2,132 1,735
----------------------- --------------
Analysis of working
capital movement
(Increase) decrease
(63) (1,048) (362) in stocks (841) (1,521)
(Increase) decrease
(271) (656) (1,243) in debtors (5,611) (2,750)
Increase (decrease)
1,241 831 (2,107) in creditors 1,499 2,855
----------------------- --------------
Total working
907 (873) (3,712) capital movement (4,953) (1,416)
======================= ==============
Notes
11. Ordinary shares
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
================================== ================
(shares thousand) (shares thousand)
Shares in
issue at period
22,378,651 22,107,715 22,122,610 end (a) 22,122,610 22,378,651
Average number
of shares
outstanding
22,351,122 22,092,365 22,103,542 (b) 22,170,741 22,397,126
---------------------------------- ----------------------
(a) Each BP ADS represents six BP Ordinary Shares.
(b) Excludes shares held by the Employee Share Ownership Plans.
12. Statutory accounts
The above financial information for the year 2003 does not constitute
statutory accounts. It is an extract from the 2003 Annual Accounts
(except Notes 9 and 10), approved by a duly appointed and authorized
committee of the Board of Directors at the Results Committee meeting
held on 9 February 2004, but not yet delivered to the UK Registrar of
Companies; the report of the auditors on those accounts was
unqualified.
Contacts
London New York
------------------- ----------------
Press Office Roddy Kennedy Ian Stewart
+44 (0)20 7496 4624 +1 212 451 8026
Investor Relations Fergus McLeod Terry LaMore
+44 (0)20 7496 4717 +1 212 451 8034
http://www.bp.com/investors
BP p.l.c.
Group Results
Fourth Quarter and Full Year 2003
London 10 February 2004
INVESTOR RELATIONS SUPPLEMENT
REPLACEMENT COST OPERATING PROFIT ADJUSTED FOR SPECIAL ITEMS(a) AND ACQUISITION
AMORTIZATION(b)
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million
Exploration and Production
1,011 614 879 UK 3,232 3,256
177 124 152 Rest of Europe 610 714
1,421 1,608 1,234 USA 6,685 4,192
1,057 1,467 1,422 Rest of World 5,450 3,843
----------------------- --------------
3,666 3,813 3,687 15,977 12,005
----------------------- --------------
Gas, Power and Renewables
(31) 13 40 UK 74 (64)
1 (12) (11) Rest of Europe (37) 100
9 54 (3) USA 172 25
93 43 51 Rest of World 263 323
----------------------- --------------
72 98 77 472 384
----------------------- --------------
Refining and Marketing
(21) (9) 32 UK 238 (45)
225 397 287 Rest of Europe 1,503 936
235 392 256 USA 1,258 670
148 198 147 Rest of World 690 520
----------------------- --------------
587 978 722 3,689 2,081
----------------------- --------------
Petrochemicals
(26) (58) (26) UK (141) (39)
74 85 37 Rest of Europe 457 364
29 38 (10) USA 114 166
62 59 34 Rest of World 176 274
----------------------- --------------
139 124 35 606 765
----------------------- --------------
Other businesses and corporate
81 (99) 387 UK 90 (101)
(18) 3 (42) Rest of Europe (48) (18)
(210) (235) (635) USA (1,019) (373)
1 11 69 Rest of World 137 (23)
----------------------- --------------
(146) (320) (221) (840) (515)
----------------------- --------------
4,318 4,693 4,300 19,904 14,720
======================= ==============
(a) The special items refer to non-recurring charges and credits. The
special items for the fourth quarter comprise impairment charges and
restructuring costs in Exploration and Production, Veba integration
costs in Refining and Marketing and a provision to cover future rental
payments on surplus property in Other businesses and corporate and tax
restructuring benefits.
(b) Acquisition amortization is depreciation and amortization relating to
the fixed asset revaluation adjustments and goodwill consequent upon
the ARCO and Burmah Castrol acquisitions. The fourth quarter 2003
includes accelerated depreciation of the revaluation adjustment in
respect of the impairment of former ARCO assets.
PER SHARE AMOUNTS
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
=================================== ======================
Shares in issue
at period
22,378,651 22,107,715 22,122,610 end (thousand) 22,122,610 22,378,651
- ADS equivalent
3,729,775 3,684,619 3,687,102 (thousand) 3,687,102 3,729,775
Average number
of shares
outstanding
22,351,122 22,092,365 22,103,542 (thousand)* 22,170,741 22,397,126
- ADS equivalent
3,725,187 3,682,061 3,683,924 (thousand) 3,695,124 3,732,854
----------------------------------- ----------------------
Replacement cost
profit after
exceptional
825 2,310 1,888 items ($m) 10,251 5,741
cents/ordinary
3.69 10.47 8.55 share 46.23 25.62
0.22 0.63 0.51 dollars/ADS 2.77 1.54
----------------------------------- ----------------------
Replacement cost
profit before
exceptional
1,697 2,142 1,819 items ($m) 9,543 4,698
cents/ordinary
7.58 9.71 8.23 share 43.03 20.97
0.46 0.58 0.49 dollars/ADS 2.58 1.26
----------------------------------- ----------------------
Pro forma result
adjusted for special
2,635 2,868 2,667 items ($m) 12,379 8,715
11.78 13.00 12.07 cents/ordinary share 55.83 38.90
0.70 0.78 0.72 dollars/ADS 3.35 2.33
----------------------------------- ----------------------
* Excludes shares held by the Employee Share Ownership Plans.
ACQUISITION AMORTIZATION BY BUSINESS
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million
Exploration and Production
41 32 35 UK 134 488
246 240 375 USA 1,131 1,078
32 21 16 Rest of World 301 214
----------------------- -------------
319 293 426 1,566 1,780
----------------------- -------------
Refining and Marketing
107 110 116 UK 446 410
96 95 95 USA 380 384
----------------------- -------------
203 205 211 826 794
----------------------- -------------
522 498 637 Total acquisition amortization 2,392 2,574
======================= =============
SPECIAL ITEMS BY BUSINESS (PRE-TAX)
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million
Exploration and Production
5 - 144 UK 209 242
- - - Rest of Europe - -
94 - 179 USA 260 279
- - - Rest of World 5 498
----------------------- -------------
99 - 323 474 1,019
----------------------- -------------
Gas, Power and Renewables
- - - UK - 30
- - - Rest of Europe - -
- - - USA - -
- - - Rest of World - -
----------------------- -------------
- - - - 30
----------------------- -------------
Refining and Marketing
27 - - UK - 43
278 72 146 Rest of Europe 277 365
59 246 - USA 246 (49)
56 - - Rest of World - 56
----------------------- -------------
420 318 146 523 415
----------------------- -------------
Petrochemicals
21 36 - UK 36 43
9 - - Rest of Europe - 27
5 7 - USA 2 40
- - - Rest of World - 140
----------------------- -------------
35 43 - 38 250
----------------------- -------------
Other businesses and corporate
20 - 74 UK 74 55
1 - - Rest of Europe - 1
40 (10) - USA (10) 130
- - - Rest of World - -
----------------------- -------------
61 (10) 74 64 186
----------------------- -------------
615 351 543 Total special items before interest 1,099 1,900
15 - - Interest-bond redemption charges - 15
----------------------- -------------
630 351 543 1,099 1,915
======================= =============
PRODUCTION AND REALIZATIONS
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
Production
Crude oil (mb/d) (net of royalties)
447 312 339 UK 354 439
90 74 74 Rest of Europe 79 98
556 558 570 USA 576 576
694 908 1,265 Rest of World 902 658
----------------------- -------------
1,787 1,852 2,248 Total crude oil production 1,911 1,771
======================= =============
Natural gas liquids (mb/d) (net of royalties)
25 23 21 UK 23 23
5 5 5 Rest of Europe 5 6
200 141 147 USA 150 189
32 33 33 Rest of World 32 29
----------------------- -------------
Total natural gas
262 202 206 liquids production 210 247
======================= =============
Liquids (a)(mb/d) (net of royalties)
472 335 360 UK 377 462
95 79 79 Rest of Europe 84 104
756 699 717 USA 726 765
726 941 1,298 Rest of World 934 687
----------------------- -------------
2,049 2,054 2,454 Total liquids production 2,121 2,018
======================= =============
Natural gas (b) (mmcf/d) (net of royalties)
1,752 1,267 1,318 UK 1,446 1,555
140 98 143 Rest of Europe 119 147
3,360 3,005 2,933 USA 3,128 3,483
3,684 4,031 4,206 Rest of World 3,920 3,522
----------------------- -------------
8,936 8,401 8,600 Total natural gas production 8,613 8,707
======================= =============
Average realizations
Crude oil ($/bbl)
26.78 27.68 28.18 UK 28.30 24.86
26.02 28.61 28.49 USA 29.02 23.85
25.85 26.30 27.56 Rest of World 26.91 23.26
26.22 27.72 28.18 BP Average 28.23 24.06
======================= =============
Natural gas liquids ($/bbl)
22.07 22.62 20.06 UK 20.08 16.47
13.65 18.37 19.11 USA 18.39 12.14
12.55 21.76 24.23 Rest of World 22.31 12.93
14.62 19.39 20.15 BP Average 19.26 12.85
======================= =============
Liquids (a) ($/bbl)
26.54 27.34 27.71 UK 27.80 24.44
23.28 26.90 26.92 USA 27.23 21.34
25.06 25.98 27.33 Rest of World 26.60 22.65
24.78 26.79 27.30 BP Average 27.25 22.69
======================= =============
Natural gas ($/mcf)
2.88 2.69 3.87 UK 3.19 2.78
3.31 4.14 3.85 USA 4.47 2.63
2.40 2.31 2.35 Rest of World 2.47 2.10
2.87 3.08 3.18 BP Average 3.39 2.46
======================= =============
(a) Crude oil and natural gas liquids.
(b) Natural gas is converted to oil equivalent at 5.8 billion cubic feet =
1 million barrels.
RECONCILIATION OF HISTORICAL COST PROFIT (LOSS)
TO PRO FORMA RESULT ADJUSTED FOR SPECIAL ITEMS
pro forma result
adjusted for
Reported Acquisition Special special
$ million Earnings Amortization Items(a) items
==============================================
3Q 2003
Exploration and Production 3,520 293 - 3,813
Gas, Power and Renewables 98 - - 98
Refining and Marketing 455 205 318 978
Petrochemicals 81 - 43 124
Other businesses & corporate (310) - (10) (320)
---------------------------------------------
RC operating profit 3,844 498 351 4,693
---------------------------------------------
Interest expense (213) - - (213)
Taxation (1,446) - (123) (1,569)
MSI (43) - - (43)
----------------------------------------------
RC profit before
exceptional items 2,142 498 228 2,868
================================
Exceptional items before tax 172
Taxation on exceptional items (4)
-----
RC profit after
exceptional items 2,310
Stock holding gains (losses) 84
-----
HC profit 2,394
=====
4Q 2002
Exploration and Production 3,248 319 99 3,666
Gas, Power and Renewables 72 - - 72
Refining and Marketing (36) 203 420 587
Petrochemicals 104 - 35 139
Other businesses & corporate (207) - 61 (146)
---------------------------------------------
RC operating profit 3,181 522 615 4,318
---------------------------------------------
Interest expense (332) - 15 (317)
Taxation (1,146) - (214) (1,360)
MSI (6) - - (6)
----------------------------------------------
RC profit before
exceptional items 1,697 522 416 2,635
================================
Exceptional items before tax (893)
Taxation on exceptional items 21
-----
RC profit after
exceptional items 825
Stock holding gains (losses) (174)
-----
HC profit 651
=====
(a) The special items refer to non-recurring charges and credits. The
special items for the third quarter 2003 comprise a charge resulting
from the reassessment of environmental remediation provisions and Veba
integration costs in Refining and Marketing; a provision to cover future
rental payments on surplus property in Petrochemicals; and a credit
resulting from the reassessment of environmental remediation provisions
in Other businesses and corporate. The special items in the fourth
quarter 2002 include an asset writedown in Exploration and Production;
integration and restructuring costs and an impairment charge in Refining
and Marketing; integration and restructuring costs in Petrochemicals;
provisions to cover future rental payments on surplus leasehold property
and environmental charges in Other businesses and corporate; and a bond
redemption charge.
RECONCILIATION OF HISTORICAL COST PROFIT (LOSS)
TO PRO FORMA RESULT ADJUSTED FOR SPECIAL ITEMS
pro forma result
adjusted for
Reported Acquisition Special special
$ million Earnings Amortization Items(a) items
==============================================
Year 2003
Exploration and Production 13,937 1,566 474 15,977
Gas, Power and Renewables 472 - - 472
Refining and Marketing 2,340 826 523 3,689
Petrochemicals 568 - 38 606
Other businesses & corporate (904) - 64 (840)
----------------------------------------------
RC operating profit 16,413 2,392 1,099 19,904
----------------------------------------------
Interest expense (851) - - (851)
Taxation (5,849) - (655) (6,504)
MSI (170) - - (170)
----------------------------------------------
RC profit before
exceptional items 9,543 2,392 444 12,379
================================
Exceptional items before tax 831
Taxation on exceptional items (123)
-----
RC profit after
exceptional items 10,251
Stock holding gains (losses) 16
------
HC profit 10,267
======
Year 2002
Exploration and Production 9,206 1,780 1,019 12,005
Gas, Power and Renewables 354 - 30 384
Refining and Marketing 872 794 415 2,081
Petrochemicals 515 - 250 765
Other businesses & corporate (701) - 186 (515)
----------------------------------------------
RC operating profit 10,246 2,574 1,900 14,720
----------------------------------------------
Interest expense (1,279) - 15 (1,264)
Taxation (4,217) - (456) (4,673)
MSI (52) - (16) (68)
----------------------------------------------
RC profit before
exceptional items 4,698 2,574 1,443 8,715
================================
Exceptional items before tax 1,168
Taxation on exceptional items (125)
-----
RC profit after
exceptional items 5,741
Stock holding gains (losses) 1,104
-----
HC profit 6,845
=====
(a) The special items refer to non-recurring charges and credits. The
special items for 2003 comprise impairment charges and restructuring
costs in Exploration and Production; Veba integration costs and
environmental charges in Refining and Marketing; restructuring costs,
environmental charges and a reduction in the provision for costs
associated with closure of polypropylene capacity in Petrochemicals; a
credit related to environmental remediation provisions and a provision
to cover future rental payments on surplus property in Other businesses
and corporate; and tax restructuring benefits.
The special items for the year 2002 comprise impairment charges, an
asset writedown, restructuring and litigation costs for Exploration and
Production; an impairment charge in Gas, Power and Renewables;
integration and restructuring costs, business interruption insurance
proceeds and certain other costs in Refining and Marketing; integration
costs and an impairment charge in Petrochemicals; a provision to cover
future rental payments on surplus leasehold property and environmental
charges in Other businesses and corporate; and a bond redemption charge.
Taxation includes a special charge for an adjustment to the North Sea
deferred tax liability for the supplementary UK corporation tax as well
as tax relief expected on impairments and related restructuring.
REPLACEMENT COST OPERATING PROFIT ADJUSTED FOR
NON-CASH CHARGES AND CERTAIN OTHER ITEMS
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million
Replacement cost operating profit
3,181 3,844 3,120 (reported) (a) 16,413 10,246
2,515 2,485 3,093 Depreciation and amounts provided (b)10,940 10,401
124 75 129 Exploration expenditure written off 297 385
Dividends from JVs and associates
(110) (327) (324) less share of RCOP (886) (396)
(11) (4) (3) Dividends paid to minority shareholders (20) (40)
27 487 181 Adjust provisions to cash basis (c) 530 (150)
Adjust interest and other income
(14) (5) (4) to cash basis (d) (26) (25)
----------------------- -------------
5,712 6,555 6,192 27,248 20,421
(1,199) (856) (1,666) Tax paid adjusted for certain items* (5,033) (3,390)
----------------------- -------------
4,513 5,699 4,526 Adjusted RCOP after tax paid 22,215 17,031
----------------------- -------------
* Calculation of tax paid adjusted
for certain items
(1,061) (803) (1,516) Cash tax paid (4,804)(3,094)
(21) 4 (84) Tax charge on exceptional items 123 125
(117) (57) (66) Tax shield assumption + (352) (421)
----------------------- -------------
(1,199) (856) (1,666) (5,033)(3,390)
----------------------- -------------
+ Calculation of tax shield assumption
(335) (163) (190) Interest paid (1,006)(1,204)
35% 35% 35% Tax rate assumption (e) 35% 35%
----------------------- -------------
(117) (57) (66) (352) (421)
----------------------- -------------
(a) Total replacement cost operating profit is before tax, exceptional
items, stock holding gains and losses and interest expense.
(b) Includes depreciation and amortization relating to the fixed asset
revaluation adjustment and goodwill consequent upon the ARCO and Burmah
Castrol acquisitions.
(c) Add the amount by which the charge for provisions exceeds the
utilization of provisions.
(d) Deduct the amount by which interest and other income exceeds the total
of interest received and dividends received from the group cash flow
statement.
(e) Deemed tax rate for tax shield adjustment is equal to the US statutory
tax rate.
RETURN ON AVERAGE CAPITAL EMPLOYED
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million
Replacement cost basis
1,697 2,142 1,819 RC profit before exceptional items 9,543 4,698
140 82 73 Interest + 332 602
6 43 41 Minority shareholders' interest 170 52
----------------------- --------------
1,843 2,267 1,933 Adjusted RC profit 10,045 5,352
======================= ==============
91,767 93,001 96,857 Average capital employed 95,722 89,616
8.0% 9.8% 8.0% ROACE - replacement cost basis 10.5% 6.0%
----------------------- --------------
Pro forma basis
1,843 2,267 1,933 Adjusted RC profit 10,045 5,352
522 498 637 Acquisition amortization 2,392 2,574
406 228 211 Special items (post-tax) 444 1,449
91,767 93,001 96,857 Average capital employed 95,722 89,616
Average capital employed
16,903 14,110 13,556 acquisition adjustment 15,017 17,777
----------------------- --------------
Average capital employed
74,864 78,891 83,301 (pro forma basis) 80,705 71,839
ROACE - Pro forma basis
14.8% 15.2% 13.4% adjusted for special items 16.0% 13.0%
----------------------- -------------
Historical cost basis
Historical cost profit
651 2,394 1,972 after exceptional items 10,267 6,845
140 82 73 Interest + 332 602
6 43 41 Minority shareholders' interest 170 77
----------------------- --------------
797 2,519 2,086 Adjusted historical cost profit 10,769 7,524
======================= ==============
91,767 93,001 96,857 Average capital employed 95,722 89,616
3.5% 10.8% 8.6% ROACE - historical cost basis 11.3% 8.4%
+ Excludes interest on joint venture and associated undertakings debt as
well as unwinding of discount on provisions and effect of change in
discount rate on provisions and unwinding of discount on deferred
consideration for acquisition of investment in TNK-BP, and is on a post-
tax basis, using a deemed tax rate equal to the US statutory tax rate.
NET DEBT RATIO - NET DEBT: NET DEBT + EQUITY
Fourth Third Fourth
Quarter Quarter Quarter Year
2002 2003 2003 2003 2002
======================= =============
$ million
22,008 19,970 22,325 Gross debt 22,325 22,008
1,735 1,495 2,132 Cash and current asset investments 2,132 1,735
----------------------- --------------
20,273 18,475 20,193 Net debt 20,193 20,273
======================= =============
70,047 74,356 77,063 Equity 77,063 70,047
22% 20% 21% Net debt ratio 21% 22%
----------------------- --------------
16,672 13,751 13,362 Acquisition adjustment 13,362 16,672
----------------------- --------------
28% 23% 24% Net debt ratio - pro forma basis 24% 28%
======================= ==============
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: 10 February 2004 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary