Interim Results - Part 2

BP PLC 7 August 2001 PART TWO BP p.l.c. and Subsidiaries Summarized Group Results Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============== $ million $ million 3,019 4,680 3,441 Exploration and Production 8,121 6,222 114 112 173 Gas and Power 285 256 1,183 753 1,477 Refining and Marketing 2,230 1,767 320 81 9 Chemicals 90 579 (299) (127) (128) Other businesses and corporate (255) (526) ----------------------- -------------- Total replacement cost 4,337 5,499 4,972 operating profit 10,471 8,298 Profit (loss) on sale of fixed assets and businesses and 161 218 171 termination of operations (Note 3) 389 4 ----------------------- -------------- Replacement cost profit before 4,498 5,717 5,143 interest and tax 10,860 8,302 213 (238) 40 Stock holding gains (losses)(Note 5) (198) 745 ----------------------- -------------- Historical cost profit before 4,711 5,479 5,183 interest and tax 10,662 9,047 403 446 441 Interest expense (Note 6) 887 699 ----------------------- -------------- 4,308 5,033 4,742 Profit before taxation 9,775 8,348 1,289 1,718 1,550 Taxation (Note 7) 3,268 2,176 ----------------------- -------------- 3,019 3,315 3,192 Profit after taxation 6,507 6,172 (5) 11 21 Minority shareholders' interest 32 63 ----------------------- -------------- 3,024 3,304 3,171 Profit for the period 6,475 6,109 ----------------------- -------------- 1,129 1,178 1,236 Distribution to shareholders 2,414 2,262 ======================= ============== Earnings per ordinary share - cents 13.59 14.70 14.12 Basic 28.82 29.47 13.49 14.61 14.04 Diluted 28.65 29.26 ======================= ============== Replacement Cost Results Historical cost profit 3,024 3,304 3,171 for the period 6,475 6,109 (213) 238 (40) Stock holding (gains) losses 198 (745) ----------------------- -------------- Replacement cost profit 2,811 3,542 3,131 for the period 6,673 5,364 (20) (105) (99) Exceptional items, net of tax (204) 104 ----------------------- -------------- Replacement cost profit before 2,791 3,437 3,032 exceptional items 6,469 5,468 ----------------------- -------------- Earnings per ordinary share - cents On replacement cost profit before 12.60 15.29 13.51 exceptional items 28.80 26.38 ======================= ============= Summarized Group Balance Sheet 30 June 31 December 2001 2000 --------------------- $ million Fixed assets Intangible assets 15,844 16,893 Tangible assets 75,704 75,173 Investments 11,144 11,753 --------------------- 102,692 103,819 --------------------- Current assets Business held for resale 666 636 Stocks 9,066 9,234 Debtors 29,983 28,418 Investments 563 661 Cash at bank and in hand 1,103 1,170 --------------------- 41,381 40,119 Creditors - amounts falling due within one year Finance debt 6,303 6,418 Other creditors 30,932 30,729 --------------------- Net current assets 4,146 2,972 --------------------- Total assets less current liabilities 106,838 106,791 Creditors - amounts falling due after more than one year Finance debt 14,195 14,772 Other creditors 4,316 5,223 Provisions for liabilities and charges 12,597 12,795 --------------------- Net assets 75,730 74,001 Minority shareholders' interest 630 585 --------------------- BP shareholders' interest 75,100 73,416 ===================== Movement in BP shareholders' interest: $ million At 31 December 2000 73,416 Profit for the period 6,475 Distribution to shareholders (2,414) Currency translation differences (1,599) Employee share schemes 120 Share buy-back (782) Redemption of ARCO preference shares (116) ------ At 30 June 2001 75,100 ====== Summarized Group Cash Flow Statement Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============ $ million $ million Net cash inflow from 5,269 6,740 5,076 operating activities (a) 11,816 8,033 ----------------------- --------------- 332 12 54 Dividends from joint ventures 66 527 ----------------------- --------------- Dividends from 143 110 159 associated undertakings 269 174 ----------------------- --------------- Servicing of finance and returns on investments 114 91 59 Interest received 150 149 (344) (361) (384) Interest paid (745) (568) 2 8 30 Dividends received 38 3 Dividends paid to (6) - (5) minority shareholders (5) (8) ----------------------- --------------- Net cash outflow from servicing of (234) (262) (300) finance and returns on investments (562) (424) ----------------------- --------------- Taxation (64) (204) (169) UK corporation tax (373) (264) (889) 65 (2,213) Overseas tax (2,148) (1,226) ----------------------- --------------- (953) (139) (2,382) Tax paid (2,521) (1,490) ----------------------- --------------- Capital expenditure (2,765) (2,577) (3,016) Payments for fixed assets (5,593) (4,186) Proceeds from the sale 182 694 232 of fixed assets 926 588 ----------------------- --------------- Net cash outflow for capital expenditure and (2,583) (1,883) (2,784) financial investment (4,667) (3,598) ----------------------- ------------- Acquisitions and disposals Investments in associated (244) (120) (148) undertakings (268) (441) 1,260 - (560) Acquisitions, net of cash acquired (560) 391 (121) (61) (72) Net investment in joint ventures (133) (123) 6,800 - - Proceeds from the sale of businesses - 6,825 ----------------------- --------------- Net cash (outflow) inflow for 7,695 (181) (780) acquisitions and disposals (961) 6,652 ----------------------- --------------- (1,133) (1,181) (1,179) Equity dividends paid (2,360) (2,104) ----------------------- --------------- 8,536 3,216 (2,136) Net cash inflow (outflow) 1,080 7,770 ======================= =============== 3,327 2,866 (1,669) Financing (b) 1,197 3,404 2,345 302 (404) Management of liquid resources (102) 2,365 2,864 48 (63) (Decrease) increase in cash (15) 2,001 ----------------------- --------------- 8,536 3,216 (2,136) 1,080 7,770 ======================= =============== Analysis of Cash Flow Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============== $ million $ million (a) Reconciliation of historical cost profit before interest and tax to net cash inflow from operating activities Historical cost profit before 4,711 5,479 5,183 interest and tax 10,662 9,047 1,933 2,140 2,103 Depreciation and amounts provided 4,243 3,128 Exploration expenditure 74 108 22 written off 130 140 Share of profits of joint ventures (535) (331) (282) and associated undertakings (613) (988) (113) (103) (127) Interest and other income (230) (160) (Profit) loss on sale of fixed (153) (218) (171) assets and businesses (389) 18 282 165 541 Charge for provisions 706 437 (129) (306) (329) Utilization of provisions (635) (333) (611) 358 (371) (Increase) decrease in stocks (13) (866) (2,446) (1,069) (399) (Increase) decrease in debtors (1,468) (3,586) 2,256 517 (1,094) Increase (decrease) in creditors (577) 1,196 ----------------------- --------------- Net cash inflow from 5,269 6,740 5,076 operating activities 11,816 8,033 ======================= =============== (b) Financing (1,140) (517) (505) Long-term borrowing (1,022) (1,452) 418 146 1,034 Repayments of long-term borrowing 1,180 511 (80) (161) (2,589) Short-term borrowing (2,750) (703) Repayments of short-term 3,113 2,955 172 borrowing 3,127 4,063 ----------------------- --------------- 2,311 2,423 (1,888) 535 2,419 (108) (56) (64) Issue of ordinary share capital (120) (139) Repurchase of ordinary 829 499 283 share capital 782 829 295 - - Stamp duty reserve tax - 295 ----------------------- --------------- Net cash outflow 3,327 2,866 (1,669) (inflow) from financing 1,197 3,404 ======================= =============== Capital Expenditure and Acquisitions Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============= $ million $ million By business Exploration and Production 277 168 289 UK 457 440 36 65 86 Rest of Europe 151 60 819 927 1,243 USA 2,170 1,200 410 706 805 Rest of World 1,511 705 ----------------------- -------------- 1,542 1,866 2,423 4,289 2,405 ----------------------- -------------- Gas and Power 28 8 6 UK(a) 14 30 1 9 12 Rest of Europe 21 2 30 8 29 USA(a) 37 31 12 - 4 Rest of World 4 21 ----------------------- -------------- 71 25 51 76 84 ----------------------- -------------- Refining and Marketing 29 111 67 UK(b) 178 918 65 47 114 Rest of Europe 161 109 334 180 227 USA 407 410 76 32 79 Rest of World 111 163 ----------------------- -------------- 504 370 487 857 1,600 ----------------------- -------------- Chemicals 136 66 63 UK 129 288 34 16 538 Rest of Europe(c) 554 67 52 78 96 USA 174 91 58 56 69 Rest of World 125 325 ----------------------- -------------- 280 216 766 982 771 ----------------------- -------------- 647 60 69 Other businesses and corporate(d) 129 700 ----------------------- -------------- 3,044 2,537 3,796 6,333 5,560 ======================= ============== By geographical area 499 394 448 UK 842 1,747 138 139 758 Rest of Europe 897 244 1,273 1,210 1,628 USA 2,838 1,770 1,134 794 962 Rest of World 1,756 1,799 ----------------------- -------------- 3,044 2,537 3,796 6,333 5,560 ======================= ============== Capital Expenditure and Acquisitions (continued) (a) 2Q and first half 2001 and 2000 included investment in Green Mountain Energy Company. 2Q and first half 2000 included investment in Great Yarmouth Power Station. (b) First half 2000 included $869 million for the purchase of some 19.5% of Burmah Castrol's issued share capital. (c) 2Q and first half 2001 included the acquisition of Bayer's 50% interest in Erdolchemie. (d) 2Q and first half 2000 included $578 million for the acquisition of a 2.2% interest in PetroChina. Analysis of Replacement Cost Operating Profit Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============= $ million $ million By business Exploration and Production 876 1,154 970 UK 2,124 1,964 185 226 190 Rest of Europe 416 373 998 2,125 1,214 USA 3,339 2,189 960 1,175 1,067 Rest of World 2,242 1,696 ----------------------- ------------- 3,019 4,680 3,441 8,121 6,222 ----------------------- ------------- Gas and Power 4 12 39 UK 51 (1) 11 62 34 Rest of Europe 96 66 47 35 96 USA 131 61 52 3 4 Rest of World 7 130 ----------------------- ------------- 114 112 173 285 256 ----------------------- ------------- Refining and Marketing 148 (111) (116) UK (227) 181 130 136 177 Rest of Europe 313 166 814 607 1,275 USA 1,882 1,223 91 121 141 Rest of World 262 197 ----------------------- ------------- 1,183 753 1,477 2,230 1,767 ----------------------- ------------- Chemicals (33) (50) (33) UK (83) (64) 118 80 19 Rest of Europe 99 196 196 13 (1) USA 12 364 39 38 24 Rest of World 62 83 ----------------------- ------------- 320 81 9 90 579 ----------------------- ------------- (299) (127) (128) Other businesses and corporate (255) (526) ----------------------- -------------- 4,337 5,499 4,972 10,471 8,298 ======================= ============== By geographical area 966 927 814 UK 1,741 1,940 461 485 429 Rest of Europe 914 827 1,762 2,712 2,512 USA 5,224 3,414 1,148 1,375 1,217 Rest of World 2,592 2,117 ----------------------- -------------- 4,337 5,499 4,972 10,471 8,298 ======================= ============== US dollar/Sterling exchange rates 1.53 1.46 1.42 Average rate for the period 1.44 1.57 1.52 1.44 1.41 Period-end rate 1.41 1.52 ======================= ============= Notes 1. Turnover Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============== $ million $ million By business 7,278 9,117 7,441 Exploration and Production 16,558 13,782 3,724 12,080 10,435 Gas and Power 22,515 6,979 24,168 28,523 34,257 Refining and Marketing 62,780 43,864 2,914 2,689 3,073 Chemicals 5,762 5,695 Other businesses 51 169 194 and corporate 363 92 ----------------------- --------------- 38,135 52,578 55,400 107,978 70,412 Less: sales between 4,977 7,166 6,991 businesses 14,157 9,543 ----------------------- --------------- 33,158 45,412 48,409 Group excluding JVs 93,821 60,869 5,869 288 280 Sales of joint ventures 568 11,249 ----------------------- --------------- 39,027 45,700 48,689 94,389 72,118 ======================= =============== By geographical area Group excluding JVs 11,112 11,940 11,974 UK 23,914 21,462 1,859 8,975 10,043 Rest of Europe 19,018 3,733 17,575 22,491 24,791 USA 47,282 30,548 6,977 9,691 8,929 Rest of World 18,620 13,337 ----------------------- --------------- 37,523 53,097 55,737 108,834 69,080 Less: sales between 4,365 7,685 7,328 areas 15,013 8,211 ----------------------- --------------- 33,158 45,412 48,409 93,821 60,869 ----------------------- --------------- Sales of joint ventures 1,414 - - UK - 2,774 5,358 - - Rest of Europe - 10,365 159 87 100 USA 187 159 128 201 180 Rest of World 381 249 ------------------------ -------------- 7,059 288 280 568 13,547 Less: sales between 1,190 - - areas - 2,298 ----------------------- -------------- 5,869 288 280 568 11,249 ======================== ============== Notes 2. Operating profits are after charging: Second First Second Quarter Quarter Quarter First half 2000 2001 2001 2001 2000 ======================= ============= $ million $ million Exploration expense 15 4 - UK 4 23 8 2 3 Rest of Europe 5 12 90 93 40 USA 133 125 55 70 38 Rest of World 108 139 ----------------------- -------------- 168 169 81 250 299 ======================= ============== Production taxes (a) 184 238 135 UK petroleum revenue tax 373 374 304 345 298 Overseas production taxes 643 612 ----------------------- -------------- 488 583 433 1,016 986 ======================= ============== (a) Production taxes are charged against Exploration and Production's operating profit and are not included in the charge for taxation in Note 7. 3. Analysis of exceptional items 168 (42) 319 Exploration and Production 277 206 - (1) - Gas and Power (1) - 5 265 (59) Refining and Marketing 206 24 - (6) (80) Chemicals (86) (210) (12) 2 (9) Other businesses and corporate (7) (16) ----------------------- ------------- Profit (loss) on sale of fixed assets and businesses and 161 218 171 termination of operations 389 4 (141) (113) (72) Taxation charge (185) (108) ----------------------- ------------- Exceptional items 20 105 99 after taxation 204 (104) ======================= ============= 4. 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 5. Stock holding gains (losses) Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============= $ million $ million 1 9 (9) Exploration and Production - 2 17 (11) (33) Gas and Power (44) 22 153 (243) 99 Refining and Marketing (144) 616 42 7 (17) Chemicals (10) 105 ---------------------- -------------- 213 (238) 40 (198) 745 ====================== ============== 6. Interest expense 341 367 363 Group interest payable(a) 730 572 (36) (34) (21) Capitalized (55) (51) ----------------------- -------------- 305 333 342 675 521 21 20 13 Joint ventures 33 35 32 40 36 Associated undertakings 76 62 Unwinding of discount 45 53 50 on provisions 103 81 ----------------------- -------------- 403 446 441 887 699 ======================= ============== (a) Interest expense includes charges of $10 million and $50 million for the first and second quarters of 2001 respectively and $60 million for the First Half 2001 relating to the early redemption of debt. 7. Charge for taxation 287 272 250 UK 522 604 1,002 1,446 1,300 Overseas 2,746 1,572 ----------------------- -------------- 1,289 1,718 1,550 3,268 2,176 ======================= ============== Notes 8. Analysis of changes in net debt Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============== $ million $ million Opening balance 14,357 21,190 18,788 Finance debt 21,190 14,544 462 1,170 1,188 Less: Cash 1,170 1,331 274 661 959 Current asset investments 661 220 ----------------------- -------------- 13,621 19,359 16,641 Opening net debt 19,359 12,993 ----------------------- -------------- Closing balance 19,187 18,788 20,498 Finance debt 20,498 19,187 3,313 1,188 1,103 Less: Cash 1,103 3,313 2,616 959 563 Current asset investments 563 2,616 ----------------------- --------------- 13,258 16,641 18,832 Closing net debt 18,832 13,258 ----------------------- --------------- Decrease (increase) 363 2,718 (2,191) in net debt 527 (265) ======================= ============== Movement in cash/ 2,864 48 (63) bank overdrafts (15) 2,001 (Decrease) increase in 2,345 302 (404) current asset investments (102) 2,365 Net cash outflow (inflow) from financing(excluding 2,311 2,423 (1,888) share capital) 535 2,419 (49) 31 51 Other movements 82 7 (7,123) - (47) Debt acquired (47) (7,123) ----------------------- -------------- Movement in net debt before 348 2,804 (2,351) exchange effects 453 (331) 15 (86) 160 Exchange adjustments 74 66 ----------------------- -------------- Decrease (increase) 363 2,718 (2,191) in net debt 527 (265) ======================= ============== Notes 9. Consolidated statement of cash flows presented on a US GAAP format Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============== $ million $ million Operating activities 3,019 3,315 3,192 Profit after taxation 6,507 6,172 Adjustments to reconcile profits after tax to net cash provided by operating activities Depreciation and 1,933 2,140 2,103 amounts provided 4,243 3,128 Exploration expenditure 74 108 22 written off 130 140 Share of (profit) loss of joint ventures and associates 19 (63) 38 less dividends received (25) (112) (Profit) loss on sale of (153) (218) (171) businesses and fixed assets (389) 18 Working capital movement (583) 1,354 (2,683) (see analysis below) (1,329) (2,551) 284 (141) 132 Other (9) 174 ----------------------- -------------- Net cash provided by 4,593 6,495 2,633 operating activities 9,128 6,969 ----------------------- -------------- Investing activities (2,795) (2,611) (3,037) Capital expenditures (5,648) (4,231) Acquisitions, net of 1,260 - (560) cash acquired (560) 391 Investment in (244) (120) (148) associated undertakings (268) (441) Net investment in (121) (61) (72) joint ventures (133) (123) Proceeds from 6,982 694 232 disposal of assets 926 7,413 ----------------------- -------------- Net cash from 5,082 (2,098) (3,585) investing activities (5,683) 3,009 ----------------------- -------------- Notes 9. Consolidated statement of cash flows presented on a US GAAP format (continued) Second First Second Quarter Quarter Quarter First Half 2000 2001 2001 2001 2000 ======================= ============== $ million $ million Financing activities Net proceeds from shares (1,016) (443) (219) issued (repurchased) (662) (985) Proceeds from 1,140 517 505 long-term financing 1,022 1,452 Repayments of (418) (146)(1,034) long-term financing (1,180) (511) Net (decrease) increase (3,033) (2,794) 2,417 in short-term debt (377) (3,360) Dividends paid (1,133) (1,181)(1,179) - BP shareholders (2,360) (2,104) (6) - (5) - Minority shareholders (5) (8) ----------------------- ------------- Net cash used in (4,466) (4,047) 485 financing activities (3,562) (5,516) ----------------------- -------------- Currency translation differences relating to (16) (34) (14) cash and cash equivalents (48) 12 ----------------------- -------------- (Decrease) increase in 5,193 316 (481) cash and cash equivalents (165) 4,474 ----------------------- -------------- Cash and cash equivalents 736 1,831 2,147 at beginning of period 1,831 1,455 ----------------------- -------------- Cash and cash equivalents 5,929 2,147 1,666 at end of period 1,666 5,929 ----------------------- -------------- Analysis of working capital movement (611) 358 (371) (Increase) decrease in stocks (13) (866) (Increase) decrease (2,443) (1,044) (502) in debtors (1,546) (3,540) Increase (decrease) 2,471 2,040 (1,810) in creditors 230 1,855 ----------------------- -------------- Total working (583) 1,354 (2,683) capital movement (1,329) (2,551) ======================= ============== Notes 10. Ordinary shares Shares in issue at 30 June 2001 = 22,478.9 million. Average number of shares in issue during January-June 2001 = 22,461.1 million (excluding shares held by the Employee Share Ownership Plans). Each BP ADS represents six BP Ordinary Shares. 11. Statutory accounts The financial information shown in this publication is unaudited and does not constitute statutory accounts. The 2000 group accounts have been delivered to the UK Registrar of Companies; the report of the auditors on those accounts was unqualified. Contacts London New York Frankfurt Press Roddy Kennedy Ian Fowler Office +44 (0)20 7496 4624 +1 212 451 8008 Investor Greg Coleman Terry LaMore Karl Weckel Relations +44 (0)20 7496 4717 +1 212 451 8034 +49 (0)69 71 37 9990 http://www.bp.com/investors MORE TO FOLLOW

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