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 27 April 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
First Quarter 2004
London 27 April 2004
FOR IMMEDIATE RELEASE
---------------------------------------------------------------------------
RESULT UP 17% - STRONG CASH FLOW
===========================================================================
1Q
2004
1Q 4Q 1Q vs.1Q
$ million 2004 2003 2003 2003
==========================
Replacement cost profit for the period(a) 4,170 2,250 3,420
Acquisition amortization(b) 547 637 628
--------------------------
Pro forma result 4,717 2,887 4,048 17%
==========================
- per ordinary share (pence) 11.61 7.68 11.33
- per ordinary share (cents) 21.36 13.07 18.13 18%
- per ADS (dollars) 1.28 0.78 1.09
==========================
o BP's first quarter pro forma result was $4,717 million compared with
$4,048 million a year ago, an increase of 17%. Replacement cost profit
for the quarter was $4,170 million compared with $3,420 million a year
ago.
o The first quarter result includes a net exceptional and non-operating
credit of $1,177 million compared with $285 million in the first
quarter of 2003. This includes the exceptional gains from the sale of
our investments in PetroChina and Sinopec.
o The first quarter trading environment was generally stronger than a
year ago, with higher oil realizations, refining margins and
petrochemicals margins, slightly reduced gas realizations and lower NGL
and marketing margins.
o Net cash inflow for the quarter was $3.8 billion compared with an
inflow of $3.2 billion a year ago, reflecting higher cash flow from
operating activities partly offset by higher acquisition spending. Net
cash flow from operating activities was $7.7 billion compared with $6.0
billion a year ago.
o The pro forma ratio of net debt to net debt plus equity was 22% at the
end of the quarter.
o Return on average capital employed for the quarter, on a pro forma
basis, was 24%, the same as a year ago. The cash return for the quarter
was 32% compared with 37% a year ago.
o The quarterly dividend is 6.75 cents per share ($0.405 per ADS)
compared with 6.25 cents per share a year ago, an increase of 8%.
In sterling terms, the quarterly dividend is 3.807 pence per share
compared with 3.947 pence per share a year ago, a decrease of 3.5%. The
company repurchased for cancellation 155 million of its own shares
during the quarter, at a cost of $1,249 million.
BP Group Chief Executive, Lord Browne, said:
"This has been another strong performance against the backdrop of a
robust trading environment. We are on track against our targets of
investing for growth, growing the dividend and utilizing surplus
cash to fund a significant level of share buybacks. We are continuing
our portfolio management actions in Petrochemicals and today announced
that we intend to dispose of our Olefins and Derivatives business."
The pro forma result 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 performance against that of its competitors.
(a) Replacement cost profit for the period includes the net profit or loss
on the sale of fixed assets and businesses or termination of
operations.
(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 first quarter 2004 and
both comparative periods include accelerated depreciation of the
revaluation adjustment in respect of the impairment of former ARCO
assets.
Summary Quarterly Results
Exploration and Production's first quarter result decreased 11% compared with a
year ago, reflecting lower exceptional gains, higher depreciation, the impact of
the changing composition of production resulting from the TNK-BP acquisition and
the divestments made in 2003, higher costs due to foreign exchange movements and
slightly lower US gas realizations, partly offset by higher production and
slightly higher liquids realizations.
The Refining and Marketing result increased 13% compared with a year ago,
reflecting improved refining margins, particularly in the US, partly offset by
lower marketing margins due to pressure from higher crude prices.
The Petrochemicals result decreased compared with the prior quarter, as overall
improvement in margins was more than offset by exceptional losses associated
with the sale of the Specialty Intermediates business and the exit of the Baglan
Bay site in the UK.
In Gas, Power and Renewables, the result was down slightly compared with a year
ago and reflects a lower result from marketing and trading, improved results in
global LNG and the solar and renewables business and a similar contribution from
the natural gas liquids business.
Interest and Other finance expense was $228 million for the quarter compared
with $312 million in the previous quarter. The decrease relates primarily to a
reduction in net pension finance costs.
The pro forma effective tax rate on replacement cost profit was 28%.
Capital expenditure, excluding acquisitions, was $3.2 billion for the quarter.
Total capital expenditure and acquisitions was $4.5 billion, including $1.35
billion for including TNK's interest in Slavneft within TNK-BP. Disposal
proceeds were $2.8 billion.
Net debt at the end of the quarter was $17.6 billion. The pro forma ratio of net
debt to net debt plus equity was 22%, compared with 26% at the end of 2003.
----------
The commentaries above and following are based on the pro forma replacement cost
results.
The financial information for 2003 has been restated to reflect (a) the transfer
of natural gas liquids (NGLs) operations from the Exploration and Production
segment to Gas, Power and Renewables on 1 January 2004; (b) the adoption by the
group of Financial Reporting Standard No. 17 'Retirement Benefits' (FRS 17) with
effect from 1 January 2004; and (c) the adoption by the group of Urgent Issues
Task Force Abstract No. 38 'Accounting for ESOP Trusts' with effect from 1
January 2004. For further information see Note 1.
Exceptional and Non-Operating Items
1Q 2004
------------------------------
Exceptional Non-Operating
$ million Items Items and UPIS
------------------------------
Exploration and Production 211 (189)
Refining and Marketing (140) -
Petrochemicals (154) -
Gas, Power and Renewables - -
Other businesses and corporate 1,313 -
------------------------------
1,230 (189)
Taxation 70 66
------------------------------
1,300 (123)
==============================
Reconciliation of Reported Results to Pro Forma Results
------ 1Q 2004------ Pro forma Result
---------------------
Reported Acq. 1Q 4Q 1Q
$ million Earnings(a) Amort.(b) 2004 2003 2003
------------------------------------------
Exploration and Production 4,242 326 4,568 3,274 5,141
Refining and Marketing 720 221 941 531 833
Petrochemicals (25) - (25) 41 137
Gas, Power and Renewables 198 - 198 86 216
Other businesses and corporate 1,129 - 1,129 465 (166)
------------------------------------------
RC profit before interest and tax 6,264 547 6,811 4,397 6,161
------------------------------------------
Interest and Other finance expense (228) - (228) (312) (305)
Taxation (1,822) - (1,822) (1,157) (1,782)
MSI (44) - (44) (41) (26)
------------------------------------------
RC profit 4,170 547 4,717 2,887 4,048
==========================================
Stock holding gains (losses) 648
-----
HC profit 4,818
=====
(a) Replacement cost profit for the period includes the net profit or loss
on the sale of fixed assets and businesses or termination of operations.
(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 first quarter 2004 and both
comparative periods include accelerated depreciation of the revaluation
adjustment in respect of the impairment of former ARCO assets.
Operating Results and Per Share Amounts
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
================================
Replacement cost profit
before interest and tax ($m) 6,264 3,760 5,533
--------------------------------
Results for the period ($m)
Pro forma result 4,717 2,887 4,048
Replacement cost profit 4,170 2,250 3,420
Historical cost profit 4,818 2,334 4,219
--------------------------------
Shares in issue at period end (thousand) 21,996,888 22,122,610 22,241,895
- ADS equivalent (thousand) 3,666,148 3,687,102 3,706,983
Average number of shares
outstanding (thousand) 22,087,796 22,103,542 22,326,486
- ADS equivalent (thousand) 3,681,299 3,683,924 3,721,081
Per ordinary share (cents)
Pro forma result 21.36 13.07 18.13
RC profit for the period 18.88 10.18 15.32
HC profit for the period 21.81 10.56 18.90
Per ADS (cents)
Pro forma result 128.16 78.42 108.78
RC profit for the period 113.28 61.08 91.92
HC profit for the period 130.86 63.36 113.40
================================
Exploration and Production
1Q 4Q 1Q
$ million 2004 2003 2003
=====================
Replacement cost profit before interest and tax 4,242 2,848 4,718
Acquisition amortization 326 426 423
---------------------
Pro forma replacement cost result
before interest and tax 4,568 3,274 5,141
=====================
Results include:
Asset write-downs/impairment (123) (308) (49)
Environmental charges - - -
Restructuring, integration and rationalization costs - (15) (90)
Other - - -
Unrealized profit in stock (UPIS) (66) (57) (125)
---------------------
Total non-operating items and UPIS (189) (380) (264)
Exceptional items 211 (49) 433
---------------------
Total non-operating items, UPIS and exceptional items 22 (429) 169
=====================
Exploration expense 136 193 112
Of which:
Exploration expenditure written off 67 129 50
=====================
Production(Net of Royalties)
Crude oil (mb/d) 2,342 2,248 1,830
Natural gas liquids (mb/d) 191 206 233
Total liquids (mb/d)(a) 2,533 2,454 2,063
Natural gas (mmcf/d) 8,600 8,600 9,017
Total hydrocarbons (mboe/d)(b) 4,015 3,936 3,618
=======================
Average realizations
Crude oil ($/bbl) 31.30 28.18 31.07
Natural gas liquids ($/bbl) 23.14 20.15 19.82
Total liquids ($/bbl) 30.48 27.30 29.82
Natural gas ($/mcf) 3.79 3.18 3.87
Total hydrocarbons ($/bbl) 26.48 23.15 26.39
=======================
Average oil marker prices ($/bbl)
Brent 32.03 29.43 31.47
West Texas Intermediate 35.30 31.15 34.00
Alaska North Slope US West Coast 34.22 29.43 33.16
=====================
Average natural gas marker prices
Henry Hub gas price(c) ($/mmbtu) 5.69 4.58 6.53
UK Gas - National Balancing Point (p/therm) 24.59 27.30 21.28
=======================
(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 replacement cost result before interest and tax for the first
quarter was $4,568 million, down 11% from the first quarter of 2003. The primary
drivers for the change are lower exceptional gains, higher depreciation, the
impact of the changing composition of production resulting from the TNK-BP
acquisition and the divestments made in 2003, higher costs due to foreign
exchange movements and slightly lower US gas realizations, partly offset by
higher production and slightly higher liquids realizations.
In Venezuela, the sales agreement for our interest in Desarrollo Zuli Occidental
(DZO) and Boqueron has lapsed and we will now retain these fields. We had
previously reported an exceptional loss on disposal of $217 million in respect
of these assets which has now been reversed. As a result of the lapse of the
agreement, an impairment charge of $186 million has been recognized in the
quarter, comprising a $123 million non-operating charge and accelerated
acquisition amortization of $63 million.
The first quarter result also includes a charge of $66 million, reflecting an
increase in the provision for Unrealized Profit in Stock (UPIS), which removes
the upstream margin from downstream inventories. This compares with a charge of
$125 million in the equivalent quarter of last year.
Production for the quarter was up from 3,618 mboe/d in the first quarter of 2003
to 4,015 mboe/d. This reflects the impact of the inclusion of TNK-BP from 29
August 2003 and the first quarter of Slavneft, growth in Trinidad, the start up
of NaKika in Deepwater Gulf of Mexico and Xikomba in Angola, partly offset by
decline in existing profit centers in North America and Europe and divestments
made during 2003.
Progress continues in our new profit centres as indicated in our strategy
presentation on 29 March 2004. During the first quarter, construction of the
Holstein and Mad Dog Spars was completed and installation offshore has
commenced. In Algeria, commissioning of the In Salah gas facilities is underway.
In Azerbaijan, construction on the Azeri project and the BTC pipeline remains on
track. In Angola, the Kizomba A Floating Production Storage and Offloading
vessel sailed away from the construction yard in Korea enroute to the field
location in Block 15.
The first quarter saw exploration successes in Egypt with the Raven 1 and Taurt
wells in the Nile Delta along with three further discoveries in Angola: Cesio 1
and Chumbo 1 in offshore Block 18 and Bavuca in Block 15.
In January we sold 45% of our interest in Kings Peak in Deepwater Gulf of Mexico
to Marubeni Oil & Gas (USA) Inc. Additionally, on 9 February 2004 we signed a
sale and purchase agreement with Fairborne Energy Ltd to sell a package of
non-core assets in Alberta, Canada for $88 million.
Customer Facing Segments
Refining and Marketing
1Q 4Q 1Q
$ million 2004 2003 2003
=====================
Replacement cost profit before interest and tax 720 320 628
Acquisition amortization 221 211 205
---------------------
Pro forma replacement cost result
before interest and tax 941 531 833
=====================
Results include:
Asset write-downs/impairment - - -
Environmental charges - - -
Restructuring, integration and rationalization costs - (156) (18)
Other - 10 -
---------------------
Total non-operating items - (146) (18)
Exceptional items (140) (91) (52)
---------------------
Total non-operating and exceptional items (140) (237) (70)
=====================
Refinery throughputs (mb/d)
UK 395 389 377
Rest of Europe 884 873 954
USA 1,265 1,374 1,302
Rest of World 399 378 391
---------------------
Total throughput 2,943 3,014 3,024
=====================
Refinery availability 95.1 94.9 94.2
=====================
Oil sales volumes (mb/d)
Refined products
UK 294 257 279
Rest of Europe 1,324 1,295 1,318
USA 1,727 1,788 1,751
Rest of World 679 681 645
-----------------------
Total marketing sales 4,024 4,021 3,993
Trading/supply sales 2,917 2,350 2,811
-----------------------
Total refined product sales 6,941 6,371 6,804
Crude oil 5,104 4,504 4,529
-----------------------
Total oil sales 12,045 10,875 11,333
=======================
Global Indicator Refining Margin(a)($/bbl)
NWE 2.73 2.21 3.70
USGC 6.92 3.53 6.14
Midwest 4.67 2.89 4.14
USWC 8.06 6.09 6.77
Singapore 3.42 2.20 2.98
BP Average 4.62 3.14 4.52
=====================
(a) 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.
Customer Facing Segments
Refining and Marketing
The pro forma replacement cost result before interest and tax for the first
quarter was $941 million. This compares with $833 million for the same period
last year, an increase of 13%.
The result reflects improved refining margins, particularly in the US, due to
strong demand, cold weather and concerns over US gasoline supplies. Marketing
margins were lower than those in both the first quarter and the fourth quarter
of 2003 due to pressure from higher crude and product prices.
Refining throughputs for the quarter were 3% below those in the first quarter of
2003; the decrease was attributable to the disposal of the Bayernoil refinery in
Germany in the second quarter of 2003. The quarter's refining availability was
95.1%, enabling strong margin capture. Marketing sales were slightly higher than
in the first quarter of 2003.
During the quarter BP launched its new product line of gasoline and diesel
fuels, BP Ultimate, in Portugal. We also launched a new advertising and
communications campaign - Fluid Motion - for the Castrol brand in Europe, along
with a new product, Castrol GTX High Mileage, in the UK.
During the quarter, BP and the Singapore Petroleum Company Limited (SPC)
announced that conditional agreement had been reached for SPC to purchase BP's
interests and one-third stake in Singapore Refining Company Private Limited
(SRC) for $140 million. Subsequent to this announcement we have been notified
that the remaining shareholders would like to exercise their pre-emption rights.
This would result in BP's one third share being divided equally between the two
remaining shareholders in SRC, namely Caltex Singapore Private Ltd and Singapore
Petroleum Company Limited. As a result these two companies would also acquire
BP's one-sixth equity interest in Tanker Mooring Services Company Pte Ltd (TMS).
In the first quarter, BP and Lembaga Tabung Angkatan Tentera (LTAT) announced
that agreement had been reached for LTAT to purchase BP's 70% shareholding in
the BP Malaysia Sdn Bhd fuels business. Subject to receiving the necessary
regulatory consents, this transaction is also expected to be concluded by 30
June 2004.
The quarter's result includes net exceptional losses of $140 million before tax,
which principally relate to the disposal of the SRC and the closure of the
lubricants operation of the Coryton Refinery, in the UK.
Customer Facing Segments
Petrochemicals
1Q 4Q 1Q
$ million 2004 2003 2003
=====================
Replacement cost profit before interest and tax (25) 41 137
Acquisition amortization - - -
---------------------
Pro forma replacement cost result
before interest and tax (25) 41 137
=====================
Results include:
Provision against fixed asset investments/
asset write-downs/impairment - - -
Environmental charges - - -
Restructuring, integration and rationalization costs - - -
Other - - -
---------------------
Total non-operating items - - -
Exceptional items (154) 16 7
---------------------
Total non-operating and exceptional items (154) 16 7
=====================
Chemicals Indicator Margin(a)($/te) 122(b) 109 96
=====================
Petrochemicals production (kte)
UK 840 832 869
Rest of Europe 2,728 2,790 2,763
USA 2,543 2,466 2,536
Rest of World 1,132 1,065 812
-----------------------
Total production 7,243 7,153 6,980
=======================
(a) The Chemicals Indicator Margin (CIM) is a weighted average of externally
based product margins. It is based on market data collected by Nexant in
their quarterly market analyses, then weighted based on BP's product
portfolio. While it does not cover our entire portfolio, it includes a
broad range of products. Among the products and businesses covered in
the CIM are the 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 first quarter is based on two months'
actuals and one month of provisional data.
Petrochemicals' pro forma replacement cost result before interest and tax for
the first quarter was a loss of $25 million, down from $41 million in the fourth
quarter of 2003. The result was affected by exceptional losses largely
associated with the sale of our Specialty Intermediates Business and the exit of
the Baglan Bay site in the UK more than offsetting overall margin improvement.
The first quarter result was a decrease of $162 million compared with the same
quarter last year, due to the exceptional losses and adverse foreign exchange
impacts. The margin structures of our European operations continue to be
affected by the strength of the Euro and Sterling, as we are unable to achieve
offsetting price increases due to dollar-based competition.
Petrochemicals production of 7,243 thousand tonnes in the first quarter was up
90 thousand tonnes compared with the previous quarter due to improved
reliability and asset utilization.
During the first quarter, our portfolio management actions continued. We
announced the closure and exit from the Baglan Bay site in the UK. We signed a
sale and purchase agreement for our Specialty Intermediates Business
(trimellitic anhydride, purified isophthalic acid (PIA) and maleic anhydride)
based in Joliet, Illinois in the USA, plus the economic interest in our European
PIA business. We also announced the intention to sell our Global Fabrics and
Fibres business as well as our speciality business manufacturing and marketing
linear and poly alpha olefins based in Feluy, Belgium; Pasadena, USA and Joffre,
Canada.
Customer Facing Segments
Gas, Power and Renewables
1Q 4Q 1Q
$ million 2004 2003 2003
=====================
Replacement cost profit before interest and tax 198 86 216
Acquisition amortization - - -
---------------------
Pro forma replacement cost result
before interest and tax 198 86 216
=====================
Results include:
Asset write-downs/impairment - - -
Environmental charges - - -
Restructuring, integration and rationalization costs - - -
Other - - -
---------------------
Total non-operating items - - -
Exceptional items - (10) -
---------------------
Total non-operating and exceptional items - (10) -
---------------------
Gas sales volumes (mmcf/d)
UK 3,027 2,565 3,215
Rest of Europe 442 511 473
USA 13,618 12,121 11,734
Rest of World 13,902 13,138 11,553
-----------------------
Total gas sales volumes 30,989 28,335 26,975
=======================
NGL sales volumes (mb/d)
UK 4 2 5
Rest of Europe 1 - -
USA 462 400 282
Rest of World 244 234 251
-----------------------
Total NGL sales volumes 711 636 538
=======================
The pro forma replacement cost result before interest and tax for the first
quarter was $198 million compared with $216 million a year ago. The result
reflects a lower result in marketing and trading, improved results in global LNG
and Solar and a similar contribution from the natural gas liquids business.
The marketing and trading result in North America is down compared with the
first quarter of 2003, when the business benefited from high margins as a result
of the prolonged cold weather in north east and midwest markets. The global LNG
business had a strong quarter due to higher margins and continued growth in LNG
sales volumes. Group gas sales volumes are up 15% above the same period last
year.
The first quarter NGL result was flat, with volume increases of 32% offset by
lower margins.
First quarter results for the solar business were improved over a year ago
primarily as a result of the benefits of the 2003 restructuring programme.
Other Businesses and Corporate
1Q 4Q 1Q
$ million 2004 2003 2003
=====================
Replacement cost profit (loss)
before interest and tax 1,129 465 (166)
Acquisition amortization - - -
---------------------
Pro forma replacement cost result
before interest and tax 1,129 465 (166)
=====================
Results include:
Asset write-downs/impairment - - -
Environmental charges - - -
Restructuring, integration and rationalization costs - - -
Other(a) - 574 -
---------------------
Total non-operating items - 574 -
Exceptional items 1,313 119 6
---------------------
Total non-operating and exceptional items 1,313 693 6
=====================
(a) For 4Q 2003, Other businesses and corporate other items includes a
vacant space provision of $74 million and a credit of $648 million
relating to US post-retirement benefit schemes.
Other businesses and corporate comprises Finance, the group's aluminium asset,
its investments in PetroChina and Sinopec, interest income and costs relating to
corporate activities. During the quarter, BP sold its interest in PetroChina for
$1.65 billion and its interest in Sinopec for $0.7 billion; these transactions
resulted in exceptional gains of $1.3 billion.
Dividends
1Q 4Q 1Q
2004 2003 2003
=====================
Dividends per ordinary share
cents 6.75 6.75 6.25
pence 3.807 3.674 3.947
Dividends per ADS (cents) 40.5 40.5 37.5
-----------------------
BP today announced a first quarterly dividend for 2004 of 6.75 cents per
ordinary share. Holders of ordinary shares will receive 3.807 pence per share
and holders of American Depository Receipts (ADRs) $0.405 per ADS share. The
dividend is payable on 7 June to shareholders on the register on 14 May.
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 7 June. The second quarter 2004 results and dividend will be announced on 27
July 2004.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
"The world economy appears to have grown at or above trend in the first
quarter of 2004. Growth was especially robust in the US and in Asian
economies, particularly in China, but Europe, with the exception of the
UK, continues to lag. The US and Asia are expected to continue growing at
or above trend in 2004 but mainland European growth is expected to remain
below trend.
"At just over $32 per barrel (dated Brent), crude oil prices during the
first quarter were the highest since the fourth quarter of 1990
(immediately prior to the first Gulf War) and $2.60 per barrel higher
than in the fourth quarter of 2003. Prices have averaged around
$32.91 so far in April (through close 23 April 2004). Strong oil demand
growth, low inventories, a tight US gasoline market and concern about
possible supply disruptions have kept crude prices supported,
notwithstanding the continuing high levels of OPEC production. The same
forces should underpin crude prices during the second quarter but a
rebuilding of inventories closer to seasonal norms looks likely if OPEC
does not make production cuts that more closely match the seasonal drop
in oil product demand.
"US natural gas prices traded in a relatively narrow range for most of
the first quarter, averaging $5.69/mmbtu (Henry Hub first of the month
index). This represented an increase of around $1.10/mmbtu versus the
fourth quarter of 2003, due to seasonal weather effects, lingering supply
concerns and the strength in oil prices. Spot gas prices traded between
residual fuel oil and distillate parity throughout the whole period.
Working gas in storage currently stands well above last year's levels and
close to the five-year average. With storage at adequate levels and with
growth in supply and demand looking more balanced than in recent years,
we expect that gas prices will remain strongly influenced by movements in
oil prices for the remainder of 2004.
"Refining margins in the first quarter strengthened relative to the
fourth quarter 2003 in the face of declining product inventories, strong
global oil demand growth and cold US weather. Margin gains were most
pronounced in the US, where low gasoline inventories and specification
changes raised concerns about supply during the coming driving season.
Margins have begun the second quarter strongly, with low gasoline
inventories and demand strength. Marketing margins are expected to
reflect seasonal improvements although they continue to be impacted by
high crude oil and product prices.
"Petrochemical margins in the first quarter improved versus the prior
period. We continue to remain cautious about the overall market although
we expect demand to improve gradually during 2004 provided the global
economic recovery is sustained.
"Capital expenditure, excluding acquisitions, for the quarter was $3.2
billion, and is projected to be approximately $13.5 billion for the year,
subject to developments in the US dollar exchange rate. The share buyback
programme is continuing."
----------------------------------------------------------------------
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, economic
growth, growth in oil demand, impact of foreign exchange exposure,
inventory levels, the US gasoline market and supply concerns, margins,
prices, petrochemicals demand and share buybacks. 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;
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 2003 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
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Exploration and Production 4,242 2,848 4,718
Refining and Marketing 720 320 628
Petrochemicals (25) 41 137
Gas, Power and Renewables 198 86 216
Other businesses and corporate 1,129 465 (166)
-----------------------
Replacement cost profit before interest and tax 6,264 3,760 5,533
Stock holding gains (losses) (Note 5) 648 84 799
-----------------------
Historical cost profit before interest and tax 6,912 3,844 6,332
Interest expense (Note 6) 152 160 176
Other finance expense (Note 7) 76 152 129
-----------------------
Profit before taxation 6,684 3,532 6,027
Taxation (Note 8) 1,822 1,157 1,782
-----------------------
Profit after taxation 4,862 2,375 4,245
Minority shareholders' interest 44 41 26
-----------------------
Profit for the period 4,818 2,334 4,219
=======================
Distribution to shareholders 1,483 1,495 1,386
-----------------------
Earnings per ordinary share - cents
Basic 21.81 10.56 18.90
Diluted 21.34 10.32 18.84
=======================
Replacement Cost Results
Historical cost profit for the period 4,818 2,334 4,219
Stock holding (gains) losses net of
minority shareholders' interest (648) (84) (799)
-----------------------
Replacement cost profit for the period 4,170 2,250 3,420
-----------------------
Earnings per ordinary share - cents
On replacement cost profit for the period 18.88 10.18 15.32
=======================
Summarized Group Balance Sheet
31 March 31 December
2004 2003
=====================
$ million
Fixed assets
Intangible assets 13,386 13,642
Tangible assets 91,800 91,911
Investments 18,492 17,458
---------------------
123,678 123,011
---------------------
Current assets
Stocks 11,298 11,617
Debtors 35,099 33,902
Investments 328 185
Cash at bank and in hand 2,006 1,947
---------------------
48,731 47,651
Creditors - amounts falling due within one year
Finance debt 6,997 9,456
Other creditors 43,018 41,128
---------------------
Net current assets (liabilities) (1,284) (2,933)
---------------------
Total assets less current liabilities 122,394 120,078
Creditors - amounts falling due
after more than one year
Finance debt 12,940 12,869
Other creditors 5,834 6,090
Provisions for liabilities and charges
Deferred taxation 14,578 14,371
Other provisions 8,766 8,815
---------------------
Net assets excluding pensions and other
post-retirement benefit balances 80,276 77,933
Defined benefit pension plan surplus 1,258 1,021
Defined benefit pension plan and other
post-retirement benefit plan deficits (7,524) (7,510)
---------------------
Net assets 74,010 71,444
Minority shareholders' interest - equity 1,181 1,125
---------------------
BP shareholders' interest 72,829 70,319
=====================
Movement in BP shareholders' interest: $ million
At 31 December 2003 75,938
Prior year adjustment - change in accounting policy
(see Note 1) (5,619)
------
As restated 70,319
Profit for the period 4,818
Distribution to shareholders (1,483)
Currency translation differences (net of tax) 238
Issue of ordinary share capital for employee share schemes 126
(Purchase) release of shares by ESOP trusts 60
Repurchase of ordinary share capital (1,249)
------
At 31 March 2004 72,829
======
Summarized Group Cash Flow Statement
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Net cash inflow from operating activities (a) 7,674 3,500 5,961
-----------------------
Dividends from joint ventures 178 51 13
-----------------------
Dividends from associated undertakings 31 120 55
-----------------------
Servicing of finance and returns on investments
Interest received 41 51 31
Interest paid (165) (190) (207)
Dividends received 12 66 6
Dividends paid to minority shareholders (2) (3) (2)
-----------------------
Net cash outflow from servicing of
finance and returns on investments (114) (76) (172)
-----------------------
Taxation
UK corporation tax (322) (329) (312)
Overseas tax (258) (1,187) (320)
-----------------------
Tax paid (580) (1,516) (632)
-----------------------
Capital expenditure and financial investment
Payments for fixed assets (2,941) (3,683) (2,871)
Proceeds from the sale of fixed assets 2,839 1,410 2,317
-----------------------
Net cash outflow for capital expenditure and
financial investment (102) (2,273) (554)
-----------------------
Acquisitions and disposals
Acquisitions, net of cash acquired - (33) -
Proceeds from the sale of businesses - - 160
Net investment in TNK-BP joint venture (1,273) 274 -
Net investment in other joint ventures (92) (162) (14)
Investments in associated undertakings (433) (227) (186)
-----------------------
Net cash outflow for acquisitions and disposals (1,798) (148) (40)
-----------------------
Equity dividends paid (1,492) (1,438) (1,397)
-----------------------
Net cash inflow (outflow) 3,797 (1,780) 3,234
=======================
Financing (b) 3,598 (2,354) 3,599
Management of liquid resources 138 (223) 13
Increase (decrease) in cash 61 797 (378)
-----------------------
3,797 (1,780) 3,234
=======================
Analysis of Cash Flow
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
(a) Reconciliation of historical cost profit
before interest and tax to net cash inflow
from operating activities
Historical cost profit before interest and tax 6,912 3,844 6,332
Depreciation and amounts provided 2,814 3,093 2,709
Exploration expenditure written off 67 129 50
Net operating charge for pensions and other
post-retirement benefits, less contributions (23) (2,190) (243)
Share of profits of joint ventures
and associated undertakings (641) (494) (304)
Interest and other income (64) (121) (48)
(Profit) loss on sale of fixed
assets and businesses (1,230) 15 (394)
Charge for provisions 67 238 29
Utilization of provisions (155) (204) (116)
Decrease (increase) in stocks 247 (362) 376
(Increase) decrease in debtors (1,586) 375 (6,645)
Increase (decrease) in creditors 1,266 (823) 4,215
-----------------------
Net cash inflow from operating activities 7,674 3,500 5,961
=======================
(b) Financing
Long-term borrowing (628) (1,666) (1,015)
Repayments of long-term borrowing 836 776 403
Short-term borrowing (156) (1,738) (626)
Repayments of short-term borrowing 2,408 278 3,899
-----------------------
2,460 (2,350) 2,661
Issue of ordinary share capital
for employee share schemes (126) (61) (67)
Purchase of shares by ESOP trusts 15 57 6
Repurchase of ordinary share capital 1,249 - 999
-----------------------
Net cash outflow (inflow) from financing 3,598 (2,354) 3,599
=======================
Adjusted Operating Cash Flow
Net cash inflow from operating activities (a) 7,674 3,500 5,961
Dividends received from joint ventures 178 51 13
Dividends received from associated undertakings 31 120 55
Net cash outflow from servicing of finance
and returns on investments (114) (76) (172)
-----------------------
Adjusted operating cash flow (pre-tax) 7,769 3,595 5,857
Tax paid on operations* (650) (1,600) (578)
-----------------------
Adjusted operating cash flow (post-tax) 7,119 1,995 5,279
-----------------------
* Components of tax payments
Tax paid on operations (650) (1,600) (578)
Tax refunded/paid) on exceptional items 70 84 (54)
-----------------------
Total tax paid (580) (1,516) (632)
=======================
(a) Includes pre-tax discretionary pension funding of $85 million in 1Q
2004, $1,586 million in 4Q 2003 and $308 million in 1Q 2003. On a
post-tax basis, these amounts are $60 million, $1,031 million and $197
million respectively.
Capital Expenditure and Acquisitions
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
By business
Exploration and Production
UK 153 189 196
Rest of Europe 48 75 51
USA 932 1,140 963
Rest of World(a) 2,690 1,191 908
-----------------------
3,823 2,595 2,118
-----------------------
Refining and Marketing
UK 77 249 73
Rest of Europe 92 446 104
USA 258 623 336
Rest of World 37 181 24
-----------------------
464 1,499 537
-----------------------
Petrochemicals
UK 20 35 -
Rest of Europe 38 69 31
USA 47 130 44
Rest of World 61 65 21
-----------------------
166 299 96
-----------------------
Gas, Power and Renewables
UK 1 21 8
Rest of Europe 2 46 15
USA 11 49 41
Rest of World 47 27 23
-----------------------
61 143 87
-----------------------
Other businesses and corporate
UK 2 29 18
Rest of Europe - 1 1
USA 9 43 10
Rest of World - 1 1
-----------------------
11 74 30
-----------------------
4,525 4,610 2,868
=======================
By geographical area
UK 253 523 295
Rest of Europe 180 637 202
USA 1,257 1,985 1,394
Rest of World(a) 2,835 1,465 977
-----------------------
4,525 4,610 2,868
=======================
(a) First quarter 2004 included the investment in TNK's interest in
Slavneft within TNK-BP.
Exchange rates
US dollar/sterling average rate for the period 1.84 1.70 1.60
US dollar/sterling period-end rate 1.83 1.78 1.57
US dollar/euro average rate for the period 1.25 1.19 1.07
US dollar/euro period-end rate 1.22 1.25 1.08
Analysis of Replacement Cost Profit
Before Interest and Tax
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
By business
Exploration and Production
UK 823 654 1,078
Rest of Europe 163 154 195
USA 1,494 716 1,658
Rest of World 1,762 1,324 1,787
-----------------------
4,242 2,848 4,718
-----------------------
Refining and Marketing
UK (189) (152) (43)
Rest of Europe 289 158 361
USA 409 174 145
Rest of World 211 140 165
-----------------------
720 320 628
-----------------------
Petrochemicals
UK (156) (65) (90)
Rest of Europe 154 34 117
USA (109) 6 54
Rest of World 86 66 56
-----------------------
(25) 41 137
-----------------------
Gas, Power and Renewables
UK 12 40 4
Rest of Europe (11) (11) (9)
USA 79 5 57
Rest of World 118 52 164
-----------------------
198 86 216
-----------------------
Other businesses and corporate
UK (163) 324 (93)
Rest of Europe (6) (42) (8)
USA (30) (23) (81)
Rest of World 1,328 206 16
-----------------------
1,129 465 (166)
-----------------------
6,264 3,760 5,533
=======================
By geographical area
UK 327 801 856
Rest of Europe 589 293 656
USA 1,843 878 1,833
Rest of World 3,505 1,788 2,188
-----------------------
6,264 3,760 5,533
=======================
Included above:
Share of profits of joint ventures 485 402 117
Share of profits of associated undertakings 141 93 180
-----------------------
626 495 297
=======================
Pro Forma Result: Replacement Cost Profit Before
Interest and Tax Adjusted for Acquisition Amortization
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
By business
Exploration and Production
UK 858 689 1,111
Rest of Europe 163 154 195
USA 1,708 1,091 1,917
Rest of World 1,839 1,340 1,918
-----------------------
4,568 3,274 5,141
-----------------------
Refining and Marketing
UK (63) (36) 67
Rest of Europe 289 158 361
USA 504 269 240
Rest of World 211 140 165
-----------------------
941 531 833
-----------------------
Petrochemicals
UK (156) (65) (90)
Rest of Europe 154 34 117
USA (109) 6 54
Rest of World 86 66 56
-----------------------
(25) 41 137
-----------------------
Gas, Power and Renewables
UK 12 40 4
Rest of Europe (11) (11) (9)
USA 79 5 57
Rest of World 118 52 164
-----------------------
198 86 216
-----------------------
Other businesses and corporate
UK (163) 324 (93)
Rest of Europe (6) (42) (8)
USA (30) (23) (81)
Rest of World 1,328 206 16
-----------------------
1,129 465 (166)
-----------------------
6,811 4,397 6,161
-----------------------
By geographical area
UK 488 952 999
Rest of Europe 589 293 656
USA 2,152 1,348 2,187
Rest of World 3,582 1,804 2,319
-----------------------
6,811 4,397 6,161
=======================
Analysis of Exceptional Items
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Exploration and Production
UK (1) 11 1
Rest of Europe - 1 -
USA (19) 20 (160)
Rest of World 231 (81) 592
-----------------------
211 (49) 433
-----------------------
Refining and Marketing
UK (36) (12) (15)
Rest of Europe (17) (47) (40)
USA (5) (32) 4
Rest of World (82) - (1)
-----------------------
(140) (91) (52)
-----------------------
Petrochemicals
UK (7) (1) 3
Rest of Europe (19) (10) (1)
USA (126) (5) 4
Rest of World (2) 32 1
-----------------------
(154) 16 7
-----------------------
Gas, Power and Renewables
UK - - -
Rest of Europe - - -
USA - (10) -
Rest of World - - -
-----------------------
- (10) -
-----------------------
Other businesses and corporate
UK (1) 27 -
Rest of Europe - - (1)
USA - (45) 7
Rest of World 1,314 137 -
-----------------------
1,313 119 6
Profit (loss) on sale of fixed assets and
businesses or termination of operations
1,230 (15) 394
Taxation credit (charge) 70 84 (54)
-----------------------
Exceptional items after taxation 1,300 69 340
=======================
Identified Non-operating Items and UPIS
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
By business
Exploration and Production
UK - (144) (53)
Rest of Europe - - -
USA(a) (66) (236) (206)
Rest of World (123) - (5)
-----------------------
(189) (380) (264)
-----------------------
Refining and Marketing
UK - - -
Rest of Europe - (146) (18)
USA - - -
Rest of World - - -
-----------------------
- (146) (18)
-----------------------
Petrochemicals
UK - - -
Rest of Europe - - -
USA - - -
Rest of World - - -
-----------------------
- - -
-----------------------
Gas, Power and Renewables
UK - - -
Rest of Europe - - -
USA - - -
Rest of World - - -
-----------------------
- - -
-----------------------
Other businesses and corporate(b)
UK - (74) -
Rest of Europe - - -
USA - 648 -
Rest of World - - -
-----------------------
- 574 -
-----------------------
Sub-total (189) 48 (282)
Interest - - -
-----------------------
Total before taxation (189) 48 (282)
Taxation credit (charge) 66 134 227
-----------------------
Total after taxation (123) 182 (55)
=======================
(a) Includes increases in the provision for Unrealized Profit in Stock
(UPIS) of $66 million in 1Q 2004, $57 million in 4Q 2003 and $125
million in 1Q 2003, which removes the upstream margin from downstream
inventories.
(b) For 4Q 2003 Other businesses and corporate includes a vacant space
provision of $74 million and a credit of $648 million relating to US
post-retirement benefit schemes.
Acquisition Amortization by Business
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Exploration and Production
UK 35 35 33
USA 214 375 259
Rest of World 77 16 131
-----------------------
326 426 423
-----------------------
Refining and Marketing
UK 126 116 110
USA 95 95 95
-----------------------
221 211 205
-----------------------
Total acquisition amortization 547 637 628
=======================
Production and Realizations
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
Production
Crude oil (mb/d) (net of royalties)
UK 344 339 442
Rest of Europe 73 74 90
USA 564 570 606
Rest of World 1,361 1,265 692
---------------------
Total crude oil production 2,342 2,248 1,830
=====================
Natural gas liquids (mb/d) (net of royalties)
UK 20 21 29
Rest of Europe 5 5 5
USA 137 147 167
Rest of World 29 33 32
---------------------
Total natural gas liquids production 191 206 233
=====================
Liquids (a)(mb/d) (net of royalties)
UK 364 360 471
Rest of Europe 78 79 95
USA 701 717 773
Rest of World 1,390 1,298 724
---------------------
Total liquids production 2,533 2,454 2,063
=====================
Natural gas (b) (mmcf/d) (net of royalties)
UK 1,355 1,318 1,798
Rest of Europe 142 143 131
USA 2,869 2,933 3,437
Rest of World 4,234 4,206 3,651
---------------------
Total natural gas production 8,600 8,600 9,017
=====================
Average realizations
Crude oil ($/bbl)
UK 29.36 28.18 31.16
USA 32.69 28.49 31.74
Rest of World 30.80 27.56 29.91
BP Average 31.30 28.18 31.07
=====================
Natural gas liquids ($/bbl)
UK 25.70 20.06 23.28
USA 22.25 19.11 18.26
Rest of World 24.61 24.23 23.05
BP Average 23.14 20.15 19.82
=====================
Liquids (a) ($/bbl)
UK 29.16 27.71 30.67
USA 31.08 26.92 29.36
Rest of World 30.42 27.33 29.48
BP Average 30.48 27.30 29.82
=====================
Natural gas ($/mcf)
UK 4.70 3.87 3.32
USA 4.72 3.85 5.27
Rest of World 2.67 2.35 2.70
BP Average 3.79 3.18 3.87
=====================
(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
Reported Acquisition Pro forma
$ million earnings amortization result
======================================
4Q 2003
Exploration and Production 2,848 426 3,274
Refining and Marketing 320 211 531
Petrochemicals 41 - 41
Gas, Power and Renewables 86 - 86
Other businesses and corporate 465 - 465
--------------------------------------
RC profit before interest and tax 3,760 637 4,397
--------------------------------------
Interest and other finance expense (312) - (312)
Taxation (1,157) - (1,157)
MSI (41) - (41)
--------------------------------------
RC profit 2,250 637 2,887
=================
Stock holding gains (losses) 84
-----
HC profit 2,334
=====
1Q 2003
Exploration and Production 4,718 423 5,141
Refining and Marketing 628 205 833
Petrochemicals 137 - 137
Gas, Power and Renewables 216 - 216
Other businesses and corporate (166) - (166)
--------------------------------------
RC profit before interest and tax 5,533 628 6,161
--------------------------------------
Interest and other finance expense (305) - (305)
Taxation (1,782) - (1,782)
MSI (26) - (26)
--------------------------------------
RC profit 3,420 628 4,048
=================
Stock holding gains (losses) 799
-----
HC profit 4,219
=====
Return on Average Capital Employed
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Replacement cost basis
RC profit for the period (a) 4,170 2,250 3,420
Interest (b) 64 73 99
Minority shareholders' interest 44 41 26
-----------------------
Adjusted RC profit 4,278 2,364 3,545
=======================
Average capital employed 93,858 90,938 85,787
ROACE - replacement cost basis 18.2% 10.4% 16.5%
-----------------------
Pro forma basis
Adjusted RC profit (a) 4,278 2,364 3,545
Acquisition amortization 547 637 628
Average capital employed 93,858 90,938 85,787
Average capital employed acquisition adjustment 13,146 13,556 15,940
-----------------------
Average capital employed (pro forma basis) 80,712 77,382 69,847
ROACE - Pro forma basis 23.9% 15.5% 23.9%
-----------------------
Historical cost basis
Profit for the period (a) 4,818 2,334 4,219
Interest (b) 64 73 99
Minority shareholders' interest 44 41 26
-----------------------
Adjusted historical cost profit 4,926 2,448 4,344
=======================
Average capital employed 93,858 90,938 85,787
ROACE - historical cost basis 21.0% 10.8% 20.3%
(a) 1Q 2004 includes $1,300 million in respect of exceptional items and
$(123) million in respect of non-operating items and UPIS. 4Q 2003
includes $69 million in respect of exceptional items and $182 million
in respect of non-operating items and UPIS. 1Q 2003 includes $340
million in respect of exceptional items and $(55) million in respect of
non-operating items and UPIS.
(b) Excludes interest on joint venture and associated undertakings' debt
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
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Gross debt 19,937 22,325 19,042
Cash and current asset investments 2,334 2,132 1,379
-----------------------
Net debt 17,603 20,193 17,663
=======================
Equity 74,010 71,444 66,236
Net debt ratio 19% 22% 21%
-----------------------
Acquisition adjustment 12,930 13,362 15,208
-----------------------
Net debt ratio - pro forma basis 22% 26% 26%
Pre-Tax Cash Returns
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Replacement cost profit before interest and tax 6,264 3,760 5,533
Exceptional items (1,230) 15 (394)
-----------------------
Replacement cost operating profit 5,034 3,775 5,139
Acquisition amortization 547 637 628
-----------------------
Pro forma replacement cost operating profit 5,581 4,412 5,767
Non-cash non-operating items 123 308 49
Pro forma DD&A, adjusted for non-cash
non-operating items 2,144 2,148 2,032
-----------------------
Cash returns numerator 7,848 6,868 7,848
=======================
Capital employed 93,947 93,769 85,278
Liabilities for current and deferred taxation 17,207 16,068 15,314
-----------------------
Operating capital employed 111,154 109,837 100,592
Acquisition adjustment (12,930)(13,362)(15,208)
-----------------------
Cash returns denominator 98,224 96,475 85,384
=======================
Average cash returns denominator 97,350 93,490 84,609
=======================
Cash return 32% 29% 37%
Notes
1. Restatement of comparative information
Comparative information for 2003 has been restated to reflect the
changes described below.
(a) Transfer of natural gas liquids activities
With effect from 1 January 2004 natural gas liquids (NGLs)
activities have been transferred from the Exploration and Production
segment to Gas, Power and Renewables.
(b) New accounting standard for pensions and other post-retirement
benefits
With effect from 1 January 2004 BP has adopted Financial Reporting
Standard No. 17 'Retirement Benefits' (FRS 17). FRS 17 requires
that financial statements reflect at fair value the assets and
liabilities arising from an employer's retirement benefit
obligations and any related funding. The operating costs of
providing retirement benefits are recognized in the period in which
they are earned together with any related finance costs and changes
in the value of related assets and liabilities. This contrasts with
Statement of Standard Accounting Practice No. 24 'Accounting for
Pension Costs', which requires the cost of providing pensions to be
recognized on a systematic and rational basis over the period during
which the employer benefits from the employee's services. The
difference between the amount charged in the income statement and
the amount paid as contributions into the pension fund is shown as a
prepayment or provision on the balance sheet.
(c) Accounting for Employee Share Ownership Plans
With effect from 1 January 2004 BP has adopted Urgent Issues Task
Force Abstract No. 38 'Accounting for ESOP Trusts'. This abstract
requires that BP shares held by the group for the purposes of
Employee Share Ownership Plans (ESOPs) are deducted from equity on
the balance sheet. Such shares were previously classified as fixed
asset investments.
Balance sheet at 31 December 2003 Restated Reported
====================
$ million
Fixed assets
Intangible assets 13,642 13,642
Tangible assets 91,911 91,911
Investments 17,458 17,554
--------------------
123,011 123,107
--------------------
Current assets 47,651 54,465
Creditors - amounts falling due within one year 50,584 50,584
-------------------
Net current assets (liabilities) (2,933) 3,881
-------------------
Total assets less current liabilities 120,078 126,988
Creditors - amounts falling due after
more than one year 18,959 18,959
Provisions for liabilities and charges
Deferred taxation 14,371 15,273
Other provisions 8,815 15,693
-------------------
Net assets excluding pension and other
post-retirement benefit balances 77,933 77,063
Defined benefit pension plan surplus 1,021 -
Defined benefit pension plan and other
post-retirement benefit plan deficits (7,510) -
-------------------
Net assets 71,444 77,063
Minority shareholders' interest 1,125 1,125
-------------------
BP shareholders' interest 70,319 75,938
===================
Notes
Income statements Restated Reported
Fourth First Fourth First
Quarter Quarter Quarter Quarter
2003 2003 2003 2003
================ ================
$ million
Exploration and Production 2,848 4,718 2,889 4,759
Refining and Marketing 320 628 274 579
Petrochemicals 41 137 51 146
Gas, Power and Renewables 86 216 67 194
Other businesses and corporate 465 (166) (176) (159)
-----------------------------------
Replacement cost profit before
interest and tax 3,760 5,533 3,105 5,519
Stock holding gains (losses) 84 799 84 799
-----------------------------------
Historical cost profit before
interest and tax 3,844 6,332 3,189 6,318
Interest expense 160 176 227 220
Other finance expense 152 129 - -
-----------------------------------
Profit before taxation 3,532 6,027 2,962 6,098
Taxation 1,157 1,782 949 1,805
-----------------------------------
Profit after taxation 2,375 4,245 2,013 4,293
Minority shareholders' interest 41 26 41 26
-----------------------------------
Profit for the period 2,334 4,219 1,972 4,267
===================================
Distribution to shareholders 1,495 1,386 1,495 1,386
-----------------------------------
Earnings per ordinary share - cents
Basic 10.56 18.90 8.93 19.11
Diluted 10.32 18.84 8.69 19.05
===================================
Notes
2. Turnover
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
By business
Exploration and Production 8,166 7,450 8,878
Refining and Marketing 41,694 36,378 39,678
Petrochemicals 4,510 4,336 3,938
Gas, Power and Renewables 20,975 16,701 18,080
Other businesses and corporate 121 137 111
------------------------
75,466 65,002 70,685
Less: sales between businesses 7,864 7,138 8,654
------------------------
Group excluding JVs 67,602 57,864 62,031
Share of sales by joint ventures 1,878 1,798 398
------------------------
69,480 59,662 62,429
========================
By geographical area
Group excluding JVs
UK 17,296 14,117 15,132
Rest of Europe 12,041 12,288 13,317
USA 31,803 26,347 29,341
Rest of World 15,817 13,894 13,736
------------------------
76,957 66,646 71,526
Less: sales between areas 9,355 8,782 9,495
------------------------
67,602 57,864 62,031
------------------------
3. 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
4. Operating profits are after charging:
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Exploration expense
UK 2 1 3
Rest of Europe 2 5 4
USA 97 60 37
Rest of World 35 127 68
-----------------------
136 193 112
=======================
Production taxes (a)
UK petroleum revenue tax 126 44 133
Overseas production taxes 399 377 371
-----------------------
525 421 504
=======================
(a) Production taxes are charged against Exploration and Production's
operating profit and are not included in the charge for taxation in
Note 8.
5. Stock holding gains (losses)
Exploration and Production 8 - 6
Refining and Marketing 529 16 620
Petrochemicals 121 10 146
Gas, Power and Renewables (10) 58 27
-----------------------
648 84 799
=======================
Notes
6. Interest expense
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Group interest payable 149 172 187
Capitalized (50) (60) (34)
-----------------------
99 112 153
Joint ventures 41 36 13
Associated undertakings 12 12 10
-----------------------
152 160 176
=======================
7. Other finance expense
Interest on pension and other
post-retirement benefit plan liabilities 500 460 460
Expected return on pension and other
post-retirement benefit plan assets (498) (375) (375)
-----------------------
Interest net of expected return on plan assets 2 85 85
Unwinding of discount on provisions 48 42 44
Unwinding of discount on deferred consideration
for acquisition of investment in TNK-BP 26 25 -
-----------------------
76 152 129
=======================
8. Charge for taxation
Current 1,706 404 1,581
Deferred 116 753 201
-----------------------
1,822 1,157 1,782
=======================
UK 345 356 451
Overseas 1,477 801 1,331
-----------------------
1,822 1,157 1,782
=======================
Notes
9. Analysis of changes in net debt
First Fourth First
Quarter Quarter Quarter
2004 2003 2003
=======================
$ million
Opening balance
Finance debt 22,325 19,970 22,008
Less: Cash 1,947 1,091 1,520
Current asset investments 185 404 215
-----------------------
Opening net debt 20,193 18,475 20,273
-----------------------
Closing balance
Finance debt 19,937 22,325 19,042
Less: Cash 2,006 1,947 1,151
Current asset investments 328 185 228
-----------------------
Closing net debt 17,603 20,193 17,663
-----------------------
Decrease (increase) in net debt 2,590 (1,718) 2,610
=======================
Movement in cash/bank overdrafts 61 797 (378)
Increase (decrease) in current asset investments 138 (223) 13
Net cash outflow (inflow) from financing
(excluding share capital) 2,460 (2,350) 2,661
Exchange of Exchangeable Bonds for
Lukoil American Depositary Shares - - 420
Other movements 14 5 64
Debt acquired - (3) -
-----------------------
Movement in net debt before exchange effects 2,673 (1,774) 2,780
Exchange adjustments (83) 56 (170)
-----------------------
Decrease (increase) in net debt 2,590 (1,718) 2,610
=======================
Notes
10. TNK-BP Operational and Financial Information
First Fourth
Quarter Quarter
2004 2003
======= =======
Production (Net of royalties) (BP share)
Crude oil (mb/d) 766 669
Natural gas (mmcf/d) 382 296
Total hydrocarbons (mboe/d) (a) 832 720
======= =======
$ million
Income statement (BP share)
Replacement cost profit before interest and tax 374 354
Stock holding gains (losses) - -
Interest expense + (30) (24)
Taxation (115) (53)
Minority shareholders' interest (10) 1
------- -------
Net Income 219 278
======= =======
+ Excludes unwinding of discount on
deferred consideration 26 25
======= =======
Balance Sheet 31 March 31 December
2004 2003
======== ===========
Fixed assets - investments
Gross assets 12,011 10,339
Gross liabilities (3,509) (3,290)
------- -------
8,502 7,049
======= =======
Deferred consideration
Due within one year 1,236 1,227
Due after more than one year 2,369 2,352
------- -------
3,605 3,579
======= =======
First Fourth
Quarter Quarter
2004 2003
======= =======
Cash Flow
Additional investment in TNK-BP joint venture (1,416) (23)
Dividends related to period prior to acquisition 143 297
------- -------
Net investment in TNK-BP joint venture (1,273) 274
======= =======
Dividends received 119 -
======= =======
(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 2003. TNK-BP
operational and financial information for the first quarter has been
estimated and includes an adjustment in respect of the period 29 August to
31 December 2003 amounting to charges of $11 million and $29 million
respectively in replacement cost profit before interest and tax and net
income. TNK-BP's 2003 audited financial statements are expected to be
finalized in May 2004. Any further adjustment in respect of 2003 will be
reflected in BP's second quarter results.
Notes
11. Statutory accounts
The financial information shown in this publication is unaudited and
does not constitute statutory accounts. The 2003 Annual Report and
Accounts have been delivered to the UK Registrar of Companies; the
report of the auditors on those accounts was unqualified.
Contacts
London New York
-------------- --------------
Press Office Roddy Kennedy Ian Stewart
+44 (0)20 7496 4624 +1 212 451 8026
Investor Relations Fergus MacLeod Terry LaMore
+44 (0)20 7496 4717 +1 212 451 8034
http://www.bp.com/investors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP p.l.c.
(Registrant)
Dated: 27 April, 2004 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary