Final Results Part 3 of 3
BP PLC
10 February 2004
Part 3 of 3
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%
======================= ==============
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