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 11 February, 2003
BP p.l.c.
(Translation of registrant's name into English)
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F
--------------- ----------------
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No |X|
--------------- ----------------
BP p.l.c.
Group Results
Fourth Quarter and Full Year 2002
London 11 February 2003
FOR IMMEDIATE RELEASE
STRONG CASH GENERATION - 175% RESERVE REPLACEMENT
---------------------------------------------------------------------------
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 $ million 2002 2001 %
======================= ====================
Replacement cost profit
706 766 1,697 before exceptional items 4,698 8,291
461 556 416 Special items(a) 1,443 683
604 977 522 Acquisition amortization(b) 2,574 2,585
----------------------- --------------------
Pro forma result adjusted
1,771 2,299 2,635 for special items 8,715 11,559 (25)
======================= ====================
5.50 6.60 7.61 - per ordinary share (pence) 25.93 35.77 (28)
7.91 10.26 11.78 - per ordinary share (cents) 38.90 51.51 (24)
0.47 0.62 0.71 - per ADS (dollars) 2.33 3.09
======================= ====================
o BP's fourth quarter pro forma result, adjusted for special items, was
$2,635 million, compared with $1,771 million a year ago, an increase of
49%. For the year, the result was $8,715 million compared with
$11,559 million, down 25%. Replacement cost profit, before exceptional
items, for the fourth quarter and year was $1,697 million and
$4,698 million respectively, compared with $706 million and
$8,291 million a year ago.
o The fourth quarter trading environment was more favourable than a year
ago for Exploration and Production with higher oil and gas
realizations, though less favourable for Refining and Marketing where
adverse crude price differentials depressed BP's refining margins
relative to the industry marker. The trading environment for the year
reflected significantly less favourable gas prices and refining
margins.
o Underlying performance improvements were $1.2 billion before tax for
the year. Hydrocarbon production increased by 1.8% and 2.9% for the
fourth quarter and year respectively. The increase for the year
reflected 4.5% growth in liquids production and a 0.9% increase for
gas. The reserve replacement ratio for 2002 was 175%. Production growth
and reserve replacement represent a strong competitive position.
o Net special and exceptional items after tax for the fourth quarter and
for the year were charges of $1,288 million and $400 million
respectively.
o Return on average capital employed for the year, on a pro forma basis
adjusted for special items, was 13% compared with 19% in 2001.
o Quarterly dividend increased to 6.25 cents per share ($0.375 per
ADS). This compares with 5.75 cents a year ago. For the year the
dividend showed an increase of 9.1%. In sterling terms, the quarterly
dividend is 3.815 pence per share compared with 4.055 pence a year ago;
for the year the increase was 1.3%. The company did not repurchase any
shares during the quarter. In 2002, 100 million of its own shares were
purchased for cancellation at a cost of $750 million.
o BP has determined to repurchase $2 billion of its own shares, subject
to market conditions and continuing AGM support.
BP Group Chief Executive, Lord Browne, said:
"The year's trading environment showed significant deterioration, with
gas prices lower and refining margins depressed. The effect of this
was partly offset by underlying performance improvements. Our reserve
replacement ratio places us in a strong position for the future. The
net debt ratio was 28%, below the mid-point of our target range. The
decision to repurchase shares reflects our confidence in our present
financial condition and future cash flows, and our desire to
give shareholders increased cash returns as the situation warrants."
The pro forma result, adjusted for special items, has been derived from the
group's reported UK GAAP accounting information but is not in itself a
recognized UK or US GAAP measure. This financial performance information and
measures derived therefrom, shown above and elsewhere in the document, are
provided in order to enable investors to evaluate better both BP's current
performance, in the context of past performance, and its performance against
that of its competitors.
(a) The special items refer to non-recurring charges and credits. The
special items for the fourth quarter include an asset write-down in
Exploration and Production, integration and restructuring costs and an
impairment charge in Refining and Marketing, integration and
restructuring costs in Chemicals, provisions to cover future rental
payments on surplus leasehold property and environmental charges in
Other businesses and corporate, and a bond redemption charge.
(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 third quarter 2002
includes accelerated depreciation of the revaluation adjustment in
respect of the impairment of former ARCO assets.
Summary Quarterly Results
Exploration and Production's pro forma fourth quarter result, adjusted for
special items, was up 54% on a year ago as a result of higher average
realizations, record production and reduced unit lifting costs. There were six
new discoveries and seven new field start-ups.
In Gas, Power and Renewables, the result reflected the absence of the Ruhrgas
contribution, partly offset by higher volumes and margins in marketing and
trading.
The Refining and Marketing result decreased significantly, reflecting lower US
West Coast refining margins and lower US retail margins than a year ago. BP's
achieved refining margins suffered from adverse crude price differentials versus
the industry marker.
The Chemicals result was down on the prior quarter's, due to margin pressure
from high feedstock costs, particularly in Europe, and weaker demand.
Interest expense for the quarter was $317 million after adjusting for bond
redemption charges, compared to $300 million for the prior quarter. The fourth
quarter charge included $42 million resulting from revaluation of environmental
and other provisions at a lower interest rate. This was partly offset by lower
average interest rates on debt.
The pro forma effective tax rate on replacement cost profit, before exceptional
items, and adjusted for special items, was 34.0% compared to 35.6% a year ago.
Capital expenditure, excluding acquisitions, was $4.1 billion for the quarter.
Disposal proceeds were $1.0 billion.
Net cash inflow was $711 million, compared to an outflow of $983 million a year
ago. The increase reflects higher operating cash flow, lower tax payments and
lower acquisition spending.
Net debt at the end of the year was $20.3 billion. The pro forma ratio of net
debt to net debt plus equity was 28%.
---------
The financial information for 2001 has been restated to reflect (i) the adoption
by the group of FRS 19 'Deferred Tax' with effect from 1 January 2002; and (ii)
the transfer of the solar, renewables and alternative fuels activities from
Other businesses and corporate to Gas and Power on 1 January 2002. To reflect
this transfer, Gas and Power has been renamed Gas, Power and Renewables from the
same date. See Note 1 on page 20 for further information.
The commentaries above and following are based on the pro forma replacement cost
operating results, before exceptional items, adjusted for special items.
Reconciliation of Reported Results to
Pro Forma Results Adjusted for Special Items
Pro Forma Result Pro Forma Result
adjusted for ----- 4Q 2002 --------------- adjusted for
special items special items
-------------------
4Q 3Q 4Q Special Acq. Reported Year
2001 2002 2002 Items* Amort+ Earnings $ million 2002 2001
=========================================== ==============
Exploration and
2,374 3,050 3,666 99 319 3,248 Production 12,005 14,498
Gas, Power
102 87 72 - - 72 and Renewables 384 488
Refining and
785 522 587 420 203 (36) Marketing 2,081 4,830
39 272 139 35 - 104 Chemicals 765 242
Other businesses
(102) (116) (146) 61 - (207) and corporate (515) (450)
------------------------------------------- --------------
RC operating
3,198 3,815 4,318 615 522 3,181 profit 14,720 19,608
------------------------------------------- --------------
(414) (300) (317) 15 - (332) Interest expense (1,264) (1,608)
(990)(1,213)(1,360) (214) - (1,146) Taxation (4,673) (6,380)
(23) (3) (6) - - (6) MSI (68) (61)
------------------------------------------- --------------
RC profit before
1,771 2,299 2,635 416 522 1,697 exceptional items 8,715 11,559
------------------------------------------- --------------
(893)Exceptional items before tax
21 Taxation on exceptional items
-----
825 RC profit after exceptional items
(174)Stock holding losses
-----
651 HC profit
=====
* The special items refer to non-recurring charges and credits. The special
items for the fourth quarter include an asset write-down in Exploration
and Production, integration and restructuring costs and an impairment
charge in Refining and Marketing, integration and restructuring costs in
Chemicals, provisions to cover future rental payments on surplus leasehold
property and environmental charges in Other businesses and corporate,
and a bond redemption charge.
+ Acquisition amortization is depreciation and amortization relating to the
fixed asset revaluation adjustments and goodwill consequent upon the ARCO
and Burmah Castrol acquisitions. The third quarter 2002 includes
accelerated depreciation of the revaluation adjustment in respect of the
impairment of former ARCO assets.
Operating Results
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= ==============
Replacement cost
1,880 1,757 3,181 operating profit ($m) 10,246 16,027
----------------------- --------------
Replacement cost profit
706 766 1,697 before exceptional items ($m) 4,698 8,291
----------------------- --------------
Profit after exceptional items ($m)
694 2,535 825 Replacement cost 5,741 8,456
(603) 2,840 651 Historical cost 6,845 6,556
----------------------- --------------
Per ordinary share (cents)
Pro forma result
7.91 10.26 11.78 adjusted for special items 38.90 51.51
RC profit before
3.17 3.42 7.58 exceptional items 20.97 36.95
(2.67) 12.67 2.92 HC profit after exceptional items 30.55 29.21
Per ADS (cents)
Pro forma result
47.46 61.56 70.68 adjusted for special items 233.40 309.06
RC profit before
19.02 20.52 45.48 exceptional items 125.82 221.70
(16.02) 76.02 17.52 HC profit after exceptional items 183.30 175.26
----------------------- --------------
Exploration and Production
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
================= ==============
1,641 1,572 3,248 Replacement cost operating profit 9,206 12,361
322 703 99 Special items 1,019 322
411 775 319 Acquisition amortization 1,780 1,815
----------------- --------------
Pro forma operating result
2,374 3,050 3,666 adjusted for special items 12,005 14,498
================= ==============
Results include:
144 119 179 Exploration expense 644 480
Of which:
85 55 124 Exploration expenditure written off 385 238
----------------- --------------
Crude oil and natural gas
liquids production (mb/d)
(Net of Royalties)
500 414 472 UK 462 485
116 107 96 Rest of Europe 104 100
772 754 756 USA 765 744
629 708 725 Rest of World 687 602
----------------- --------------
2,017 1,983 2,049 Total liquids production 2,018 1,931
================= ==============
Natural gas production(a)
(mmcf/d)(Net of Royalties)
1,715 1,240 1,752 UK 1,555 1,713
160 131 140 Rest of Europe 147 147
3,621 3,450 3,360 USA 3,483 3,554
3,268 3,661 3,684 Rest of World 3,522 3,218
----------------- --------------
8,764 8,482 8,936 Total natural gas production 8,707 8,632
================= ==============
Average liquids realizations(b)
($/bbl)
18.53 26.26 26.54 UK 24.44 23.55
17.05 22.94 23.28 USA 21.34 21.87
17.70 24.43 25.06 Rest of World 22.65 21.90
17.72 24.40 24.78 BP Average 22.69 22.50
================= ==============
Average oil marker prices
($/bbl)
19.41 26.91 26.88 Brent 25.03 24.44
20.31 28.26 28.31 West Texas Intermediate 26.14 25.89
17.79 27.26 26.86 Alaska North Slope US West Coast 24.77 23.18
================= ==============
Average natural gas realizations
($/mcf)
3.15 2.58 2.88 UK 2.78 3.07
2.06 2.34 3.31 USA 2.63 3.99
1.99 1.99 2.40 Rest of World 2.10 2.52
2.28 2.25 2.87 BP Average 2.46 3.30
----------------- --------------
2.43 3.16 3.99 Henry Hub gas price(c) ($/mmBtu) 3.22 4.26
UK Gas - National
22.32 12.74 19.09 Balancing Point (p/therm) 15.78 22.21
================= ==============
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
(b) Crude oil and natural gas liquids.
(c) Henry Hub First of the Month Index.
Exploration and Production
The pro forma result for the fourth quarter, adjusted for special items, was
$3,666 million, up $1,292 million on a year ago. The special items for the
quarter are $94 million for the write-off of our Gas to Liquids demonstration
plant in Alaska and $5 million restructuring charges.
The result for the quarter benefited from higher average liquids realizations,
up $7.06 on a year ago. There was a benefit from a credit of $49 million for
Unrealized Profit in Stock (UPIS) to remove the upstream margin from downstream
inventories following a decrease in the ANS oil price. This compares to a credit
of $119 million in the equivalent quarter of last year. Average natural gas
realizations have increased by $0.59 per thousand cubic feet compared with the
fourth quarter of 2001. North American natural gas realizations have improved
reflecting the strong North American gas market.
Fourth quarter production of 3,590 mboe/d was a record and benefited from seven
new field start-ups. Increased production was partly offset by the effects of
Gulf of Mexico hurricanes, shut-ins in Venezuela and an earthquake in Alaska.
The full year result reflects production growth of 4.5% for liquids and 0.9% for
gas, a 6% decrease in unit lifting costs and slightly higher liquids
realizations, which were more than offset by significantly lower natural gas
realizations.
The reserve replacement ratio for the year was 175% with 2,016 billion barrels
of oil equivalent booked through discoveries, extensions, revisions and improved
recovery. Reserve replacement has exceeded production for ten consecutive years
at an average ratio of 145% over that period.
In support of growth, 2002 capital expenditure at $9.7 billion (including $434
million of acquisitions) was 9% higher than 2001. During the quarter the
development of Atlantis in the Gulf of Mexico and an expansion of the
development at In Amenas in Algeria were approved and there were a total of six
discoveries in the Gulf of Mexico, Angola and Egypt.
In December, the sale of the Arbroath, Montrose and Arkwright fields in the
North Sea to Paladin Resources was announced. In January, we announced the sale
of our stake in the North Sea Forties oil field, together with a package of
shallow-water assets in the Gulf of Mexico, to Apache. Also in January, we
completed the sale of 20% of our upstream interests in Trinidad to Repsol. We
also announced a transaction with Amerada Hess, under which BP will exchange its
interest in block A-18 of the Malaysia Thailand Joint Development Area for
Amerada Hess's interests in Colombia. In February, we announced the sale of a
12.5% share in the Tangguh liquefied natural gas project in Indonesia to China
National Offshore Oil Corporation.
Gas, Power and Renewables
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
====================== ==============
102 57 72 Replacement cost operating profit 354 488
- 30 - Special items 30 -
- - - Acquisition amortization - -
---------------------- --------------
Pro forma operating result
102 87 72 adjusted for special items 384 488
====================== ==============
Gas sales volumes (mmcf/d)
2,534 1,809 2,715 UK 2,372 2,641
232 353 442 Rest of Europe 399 213
8,094 9,332 10,723 USA 9,315 8,327
8,867 9,556 10,659 Rest of World 9,535 7,613
----------------------- --------------
19,727 21,050 24,539 Total gas sales volumes 21,621 18,794
======================= ==============
NGL sales volumes (mb/d)
- - - UK - -
- - - Rest of Europe - -
226 178 262 USA 208 221
215 185 244 Rest of World 202 189
----------------------- --------------
441 363 506 Total NGL sales volumes 410 410
======================= ==============
Gas, Power and Renewables
The pro forma result for the fourth quarter was $72 million, compared with $102
million a year ago and $87 million during the third quarter. The year's result,
after adjusting for special items, was $384 million compared to $488 million for
2001.
The fourth quarter result is down versus the prior year due to the absence of
contributions from Ruhrgas, partly offset by higher volumes and margins in
marketing and trading. The sale of the Ruhrgas shareholding was effective 1
August 2002.
The full year result is down on 2001 due to a lower contribution from Ruhrgas
and a weaker marketing and trading environment, partly offset by better
performance in the NGL business and increased gas sales volumes, up by 15%.
During the fourth quarter, BP announced a restructuring of its Solar operation
and the withdrawal from Thin Film manufacturing. We also announced the start-up
of our 22.5 megawatt wind farm at the Nerefco oil refinery in the Netherlands
and the first commercial sale of green electricity into the Dutch national power
grid. The refinery and the wind farm are jointly (BP 69%) owned with
ChevronTexaco. In the fourth quarter BP took delivery of the British Trader, the
first of three new LNG ships.
Refining and Marketing
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
======================= =============
379 237 (36) Replacement cost operating profit 872 3,573
213 83 420 Special items 415 487
193 202 203 Acquisition amortization 794 770
----------------------- -------------
Pro forma operating result
785 522 587 adjusted for special items 2,081 4,830
======================= =============
Refinery throughputs (mb/d)
415 394 392 UK 389 364
692 956 959 Rest of Europe 918 663
1,371 1,455 1,439 USA 1,439 1,526
369 349 367 Rest of World 357 376
----------------------- -------------
2,847 3,154 3,157 Total throughput 3,103 2,929
======================= =============
Oil sales volumes (mb/d)
Refined products
268 258 269 UK 253 266
1,084 1,604 1,541 Rest of Europe 1,467 1,062
1,773 1,847 1,875 USA 1,874 1,866
612 613 611 Rest of World 586 603
----------------------- --------------
3,737 4,322 4,296 Total marketing sales 4,180 3,797
2,710 2,589 2,064 Trading/supply sales 2,383 2,409
----------------------- --------------
6,447 6,911 6,360 Total refined product sales 6,563 6,206
4,599 3,648 5,314 Crude oil 4,671 4,473
----------------------- --------------
11,046 10,559 11,674 Total oil sales 11,234 10,679
======================= ==============
Global Indicator Refining Margin(a)
($/bbl)
1.53 1.28 2.19 NWE 1.04 2.24
1.79 1.82 2.98 USGC 2.36 4.84
2.63 3.27 4.09 Midwest 3.30 6.05
6.25 3.54 3.95 USWC 4.34 8.60
1.20 0.47 1.41 Singapore 0.57 0.90
2.40 1.98 2.76 BP Average 2.11 4.06
======================= ==============
(a) The Global Indicator Refining Margin (GIM) is the average of seven
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.
Refining and Marketing
The pro forma result, adjusted for special items, for the fourth quarter was
$587 million, a decrease of $198 million on the same period last year. The
special items include $261 million Veba integration costs, $116 million
restructuring costs, a $35 million write-down of retail assets in Venezuela and
$8 million costs associated with the Olympic pipeline incident. The lower result
was primarily due to lower US retail and US West Coast refining margins, which
more than offset the contribution from Veba. Refining throughputs increased by
11% compared with a year ago due to Veba and a smaller maintenance programme in
the USA. Marketing volumes increased by 15%, but were down slightly excluding
Veba. Shop sales increased by 66%, 7% excluding Veba.
The result for the year was $2,081 million, a decrease of $2,749 million from a
year ago. The result reflects the impact of a halving of worldwide refining
margins with a further adverse effect from price differentials in BP's crude
slate, and lower US retail margins, with some offset from Veba. Refining
throughputs increased by 6% over the previous year and marketing volumes by 10%,
primarily due to Veba. Excluding Veba, marketing volumes were slightly down.
Retail shop sales grew 60% due to Veba and the increased number of BP Connect
stations, 10% excluding Veba.
A total of 486 BP Connect stations were open in the USA, Europe, Australia and
New Zealand at year end. In addition, BP has reimaged over 10,000 retail
stations worldwide to BP's new Helios logo.
In December, BP completed the sale of its interest in Colonial Pipeline in the
USA. BP also announced that it had signed an agreement to sell 494 service
stations to PKN Orlen. On 10 February, BP announced that it had agreed to sell a
45% stake in the Bayernoil Refinery, an 18% stake in the Trans Alpine Pipeline
(TAL), 247 retail stations in Germany, 55 stations in Hungary and 11 in Slovakia
to OMV AG for EUR377 million in cash and assumption of debt. The sale is
conditional on regulatory approvals and the nonexercise of certain pre-emption
rights. The sale of the German assets enables BP to fully comply with the
conditions imposed by the German Federal Cartel Office (FCO) when it approved
BP's acquisition of Veba Oil in April 2002.
Chemicals
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
======================= =============
(67) 132 104 Replacement cost operating profit 515 128
106 140 35 Special items 250 114
- - - Acquisition amortization - -
----------------------- -------------
Pro forma operating result
39 272 139 adjusted for special items 765 242
======================= =============
112 120 100(b)Chemicals Indicator Margin(a)($/te) 102(b) 109
======================= =============
Chemicals production (kte)
792 858 698 UK 3,221 3,126
2,278 2,669 2,679 Rest of Europe 10,526 7,925
2,279 2,570 2,447 USA 10,201 8,943
699 783 785 Rest of World 3,040 2,722
----------------------- --------------
6,048 6,880 6,609 Total production 26,988 22,716
======================= ==============
(a) The Chemicals Indicator Margin (CIM) is a weighted average of
externally-based product margins. It is based on market data collected
by Chem Systems 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. Amongst the products and
businesses covered in the CIM are olefins and derivatives, aromatics and
derivatives, linear alpha-olefins, acetic acid, vinyl acetate monomer
and nitriles. Not included are fabrics and fibres, plastic fabrications,
poly alpha-olefins, anhydrides, engineering polymers and carbon fibres,
speciality intermediates, and the remaining parts of the solvents and
acetyls businesses.
(b) Provisional. The data for the fourth quarter is based on two months'
actuals and one month of provisional data.
Chemicals
Chemicals' pro forma result for the fourth quarter, after adjusting for special
items, was $139 million, down from $272 million in the third quarter. The
decline was the result of margin compression due to higher feedstock costs,
particularly in Europe, and weaker demand. The fourth quarter result was an
increase of $100 million over a year ago, reflecting higher production and lower
costs than in 2001, despite a weaker environment.
Chemicals production of 6,609 thousand tonnes in the fourth quarter was down 271
thousand tonnes on the previous quarter, as demand weakened. Production for the
year was 26,988 thousand tonnes, up 19%, as a result of new production from
existing and acquired assets.
The year's result of $765 million was an increase of $523 million, in an overall
trading environment which was similar. This improvement was driven by
significantly lower costs and increased production.
Major restructuring continued throughout the year, aimed at repositioning the
portfolio and lowering the cost base. The fourth quarter and full year results
include $14 million and $39 million respectively for restructuring costs not
classified as special. Special items for the fourth quarter include $17 million
Solvay integration costs and $18 million for restructuring.
During the fourth quarter, we announced the intention to exit from a
polyethylene joint venture in Bataan, Philippines and the closure of an older
118 thousand tonnes per annum high-density polyethylene plant at Deer Park,
Texas. Also during the quarter, we sold one of the remaining Burmah Castrol
chemicals businesses and have since announced the sale of the other two. We also
announced the formation of an acetic acid joint venture in Taiwan and plans to
expand our olefins production at Chocolate Bayou, Texas.
Other Businesses and Corporate
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
================= =============
(175) (241) (207) Replacement cost operating loss (701) (523)
73 125 61 Special items 186 73
- - - Acquisition amortization - -
----------------- -------------
Pro forma operating result
(102) (116) (146) adjusted for special items (515) (450)
================= =============
Other businesses and corporate comprises Finance, the group's coal asset and
aluminium asset, its investments in PetroChina and Sinopec, interest income and
costs relating to corporate activities. The special items for the quarter
include provision of $15 million for future rentals on surplus leasehold
property and a charge of $46 million for environmental liabilities.
Exceptional Items
4Q 3Q 4Q Year
2001 2002 2002 $ million 2002 2001
================= =============
Profit (loss) on sale of fixed assets and
(38)1,794 (893) businesses or termination of operations 1,168 535
26 (25) 21 Taxation credit (charge) (125) (370)
----------------- -------------
(12)1,769 (872) Exceptional items after taxation 1,043 165
================= =============
Exceptional items for the fourth quarter include provisions for losses on
disposal of certain upstream interests announced since the year end and profit
on disposal of BP's interest in the Colonial pipeline in the USA.
2002 Dividends
4Q 3Q 4Q Year
2001 2002 2002 2002 2001
================= ==============
Dividends per ordinary share
5.75 6.00 6.25 cents 24.00 22.00
4.055 3.897 3.815 pence 15.638 15.436
34.5 36.0 37.5 Dividends per ADS (cents) 144.0 132.0
----------------------- --------------
BP today announced a fourth quarterly dividend for 2002 of 6.25 cents per
ordinary share. Holders of ordinary shares will receive 3.815 pence per share
and holders of American Depositary Receipts (ADRs) $0.375 per ADS share. The
dividend is payable on 24 March to shareholders on the register on 28 February.
Participants in the Dividend Reinvestment Plan (DRIP) or the DRIP facility in
the US Direct Access Plan will receive the dividend in the form of shares, also
on 24 March.
Outlook
BP Group Chief Executive, Lord Browne, concluded:
"The world economy slowed during the fourth quarter with weaker growth in
both the USA and much of Continental Europe. Evidence of sustained
recovery is limited and confidence fragile.
"Brent crude oil prices have recently exceeded $30 per barrel compared to
an average of $27 in the fourth quarter. Venezuelan oil production has
declined sharply as a result of the general strike that commenced in
early December. Other OPEC producers have begun to raise production to
replace some of this lost output. Crude oil inventories have fallen,
especially in the USA, and are below normal seasonal levels. The prospect
for crude oil prices is particularly uncertain, and will be affected by
such issues as the timing and extent of developments in Venezuela and
Iraq and global economic growth.
"US natural gas prices have strengthened further as demand has firmed
seasonally, oil prices have increased and production has been weak.
Prices are expected to remain at a premium to residual fuel oil through
the winter heating season.
"Refining margins remain volatile. Crude oil prices have risen and
product inventories are adequate. Although product demand is improving,
margins remain susceptible to market uncertainties.
"Retail margins weakened towards the end of the fourth quarter,
especially in the USA. Margins have since shown some signs of recovery,
although they remain vulnerable to further increases in oil product
prices.
"The Chemicals business environment has remained weak, with demand soft
and margins under pressure from high feedstock prices.
"Capital expenditure for 2002 was $13.5 billion, excluding acquisitions,
and is projected to be in the range of $14-14.5 billion in 2003.
"Our strategy remains to create value from a distinctive set of
opportunities, biased towards the upstream, which, through a disciplined
approach to long term investment growth, can produce returns which are
both secure and highly competitive."
----------------------------------------------------------------------
The foregoing discussion, in particular certain statements under
'Outlook', focuses on certain trends and general market and economic
conditions and outlook on production levels or rates, prices, margins,
debt, levels of annual investment and currency exchange rates and, as
such, are forward-looking statements that involve risk and uncertainty
that could cause actual results and developments to differ materially
from those expressed or implied by this discussion. By their nature,
trends and outlook on production, price, margin, debt, profitability
and currency exchange rates are difficult to forecast with any
precision, and there are a number of factors that could cause actual
results and developments to differ materially from those expressed or
implied by these forward-looking statements, including specific factors
accompanying such statements; future levels of industry product supply,
demand and pricing; currency exchange rates; political stability and
economic growth in relevant areas of the world; development and use of
new technology and successful partnering; the actions of competitors;
natural disasters and other changes to business conditions; prolonged
adverse weather conditions; and wars and acts of terrorism and
sabotage. Additional information, including information on factors
which may affect BP's business, is contained in BP's Annual Report and
Accounts and in the Annual Report on Form 20-F filed with the US
Securities and Exchange Commission.
----------------------------------------------------------------------
BP p.l.c. and Subsidiaries
Summarized Group Results
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= ==============
$ million $ million
1,641 1,572 3,248 Exploration and Production 9,206 12,361
102 57 72 Gas, Power and Renewables 354 488
379 237 (36) Refining and Marketing 872 3,573
(67) 132 104 Chemicals 515 128
(175) (241) (207) Other businesses and corporate (701) (523)
----------------------- --------------
Total replacement cost
1,880 1,757 3,181 operating profit 10,246 16,027
Profit (loss) on sale of
fixed assets and businesses or
(38) 1,794 (893) termination of operations (Note 4) 1,168 535
----------------------- --------------
Replacement cost profit before
1,842 3,551 2,288 interest and tax 11,414 16,562
(1,297) 305 (174) Stock holding gains (losses)(Note 6) 1,129 (1,900)
----------------------- --------------
Historical cost profit before
545 3,856 2,114 interest and tax 12,543 14,662
414 300 332 Interest expense (Note 7) 1,279 1,670
----------------------- --------------
131 3,556 1,782 Profit before taxation 11,264 12,992
711 713 1,125 Taxation (Note 8) 4,342 6,375
----------------------- --------------
(580) 2,843 657 Profit (loss) after taxation 6,922 6,617
23 3 6 Minority shareholders' interest 77 61
----------------------- --------------
(603) 2,840 651 Profit (loss) for the period 6,845 6,556
1,289 1,340 1,398 Distribution to shareholders 5,375 4,935
----------------------- --------------
Retained profit (deficit)
(1,892) 1,500 (747) for the period 1,470 1,621
======================= ==============
Earnings per ordinary share - cents
(2.67) 12.67 2.92 Basic 30.55 29.21
(2.64) 12.61 2.92 Diluted 30.41 29.04
======================= ==============
Replacement Cost Results
Historical cost profit (loss)
(603) 2,840 651 for the period 6,845 6,556
Stock holding (gains) losses
1,297 (305) 174 net of MSI (1,104) 1,900
----------------------- --------------
Replacement cost profit
694 2,535 825 for the period 5,741 8,456
12 (1,769) 872 Exceptional items, net of tax (1,043) (165)
----------------------- --------------
Replacement cost profit before
706 766 1,697 exceptional items 4,698 8,291
----------------------- --------------
Earnings per ordinary share - cents
On replacement cost profit before
3.17 3.42 7.58 exceptional items 20.97 36.95
======================= =============
Summarized Group Balance Sheet
31 December 31 December
2002 2001
--------------------------
$ million
Fixed assets
Intangible assets 15,566 16,489
Tangible assets 87,682 77,410
Investments 10,811 11,963
---------------------
114,059 105,862
---------------------
Current assets
Stocks 10,181 7,631
Debtors 33,150 26,669
Investments 215 450
Cash at bank and in hand 1,520 1,358
---------------------
45,066 36,108
Creditors - amounts falling due within one year
Finance debt 10,086 9,090
Other creditors 36,215 28,524
---------------------
Net current liabilities (1,235) (1,506)
---------------------
Total assets less current liabilities 112,824 104,356
Creditors - amounts falling due
after more than one year
Finance debt 11,922 12,327
Other creditors 3,455 3,086
Provisions for liabilities and charges
Deferred taxation 13,514 11,702
Other provisions 13,886 11,482
---------------------
Net assets 70,047 65,759
Minority shareholders' interest - equity 638 598
---------------------
BP shareholders' interest 69,409 65,161
=====================
Movement in BP shareholders' interest: $ million
At 31 December 2001 74,367
Prior year adjustment - change in accounting policy (see Note 1) (9,206)
------
As restated 65,161
Profit for the year 6,845
Distribution to shareholders (5,375)
Currency translation differences 3,333
Issue of ordinary share capital for employee share schemes 195
Repurchase of ordinary share capital (750)
------
At 31 December 2002 69,409
======
Summarized Group Cash Flow Statement
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= ============
$ million $ million
Net cash inflow from
5,547 4,376 6,197 operating activities (a) 19,342 22,409
----------------------- ---------------
12 30 69 Dividends from joint ventures 198 104
----------------------- ---------------
Dividends from
104 96 65 associated undertakings 368 528
----------------------- ---------------
Servicing of finance and returns
on investments
83 63 63 Interest received 231 256
(229) (218) (335) Interest paid (1,204) (1,282)
35 4 38 Dividends received 102 132
Dividends paid to
(38) (13) (11) minority shareholders (40) (54)
----------------------- ---------------
Net cash outflow from servicing of
(149) (164) (245) finance and returns on investments (911) (948)
----------------------- ---------------
Taxation
(454) (206) (419) UK corporation tax (979) (1,058)
(968) (455) (642) Overseas tax (2,115) (3,602)
----------------------- ---------------
(1,422) (661) (1,061) Tax paid (3,094) (4,660)
----------------------- ---------------
Capital expenditure and
financial investment
(3,688) (2,980) (3,544) Payments for fixed assets (12,116) (12,214)
Proceeds from the sale
615 488 726 of fixed assets 2,470 2,365
----------------------- ---------------
Net cash outflow for
capital expenditure and
(3,073) (2,492) (2,818) financial investment (9,646) (9,849)
----------------------- -------------
Acquisitions and disposals
Investments in associated
(179) (125) (215) undertakings (971) (586)
Proceeds from sale of
- 2,338 - investment in Ruhrgas 2,338 -
(602) (2,607) (28) Acquisitions, net of cash acquired (4,324) (1,210)
(220) (23) (217) Net investment in joint ventures (354) (497)
Proceeds from the sale
231 55 304 of businesses 1,974 538
----------------------- ---------------
Net cash outflow for
(770) (362) (156) acquisitions and disposals (1,337) (1,755)
----------------------- ---------------
(1,232) (1,346) (1,340) Equity dividends paid (5,264) (4,827)
----------------------- ---------------
(983) (523) 711 Net cash (outflow) inflow (344) 1,002
======================= ===============
(855) (219) 304 Financing (b) (181) 972
(65) (32) (56) Management of liquid resources (220) (211)
(63) (272) 463 Increase (decrease) in cash 57 241
----------------------- ---------------
(983) (523) 711 (344) 1,002
======================= ===============
Analysis of Cash Flow
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= ==============
$ million $ million
(a) Reconciliation of historical
cost profit before interest
and tax to net cash inflow
from operating activities
Historical cost profit before
545 3,856 2,114 interest and tax 12,543 14,662
2,457 3,506 2,515 Depreciation and amounts provided 10,401 8,858
Exploration expenditure
85 55 124 written off 385 238
Share of profits of joint ventures
(303) (172) (250) and associated undertakings (966) (1,194)
(132) (62) (115) Interest and other income (358) (478)
(Profit) loss on sale of fixed
36 (1,796) 895 assets and businesses (1,166) (537)
187 332 451 Charge for provisions 1,277 1,008
(221) (392) (424) Utilization of provisions (1,427) (1,119)
1,368 (155) (63) (Increase) decrease in stocks (1,521) 1,490
1,241 (379) (269) (Increase) decrease in debtors (2,672) 1,989
284 (417) 1,219 Increase (decrease) in creditors 2,846 (2,508)
----------------------- ---------------
Net cash inflow from
5,547 4,376 6,197 operating activities 19,342 22,409
======================= ===============
(b) Financing
(267) (558) (651) Long-term borrowing (3,707) (1,296)
434 567 905 Repayments of long-term borrowing 2,369 2,602
(2,764) (1,627) (3,970) Short-term borrowing (9,849) (6,257)
Repayments of short-term
1,656 704 4,037 borrowing 10,451 4,823
----------------------- ---------------
(941) (914) 321 (736) (128)
(13) (55) (17) Issue of ordinary share capital (195) (181)
Repurchase of ordinary
99 750 - share capital 750 1,281
----------------------- ---------------
Net cash (inflow)
(855) (219) 304 outflow from financing (181) 972
======================= ===============
Capital Expenditure and Acquisitions
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million $ million
By business
Exploration and Production
312 270 177 UK 955 1,095
99 61 73 Rest of Europe 262 329
862 980 1,079 USA 4,303 4,155
880 929 1,244 Rest of World(a) 4,179 3,282
----------------------- --------------
2,153 2,240 2,573 9,699 8,861
----------------------- --------------
Gas, Power and Renewables
51 7 - UK 28 102
107 29 41 Rest of Europe(b) 161 156
83 52 60 USA 160 155
60 19 22 Rest of World 59 79
----------------------- --------------
301 107 123 408 492
----------------------- --------------
Refining and Marketing
127 56 163 UK 395 394
209 198 273 Rest of Europe(c) 5,759 380
623 298 430 USA 1,291 1,311
157 53 180 Rest of World 308 330
----------------------- --------------
1,116 605 1,046 7,753 2,415
----------------------- --------------
Chemicals
26 30 57 UK 112 205
294 58 10 Rest of Europe(d) 173 917
167 49 116 USA 262 460
107 43 102 Rest of World 276 344
----------------------- --------------
594 180 285 823 1,926
----------------------- --------------
264 48 61 Other businesses and corporate(e) 428 430
----------------------- --------------
4,428 3,180 4,088 19,111 14,124
======================= ==============
By geographical area
745 394 434 UK 1,637 2,128
709 353 398 Rest of Europe 6,556 1,787
1,758 1,389 1,708 USA 6,095 6,160
1,216 1,044 1,548 Rest of World 4,823 4,049
----------------------- --------------
4,428 3,180 4,088 19,111 14,124
======================= ==============
(a) Year 2002 included the acquisition of an additional interest in
Sidanco.
(b) Year 2002 included the acquisition of a 5% stake in Enagas.
(c) Year 2002 included the acquisition of 100% of Veba.
(d) 4Q 2001 included the formation of the joint venture with Solvay. Year
2001 also included the acquisition of Bayer's 50% interest in
Erdolchemie.
(e) Year 2002 included the acquisition of the minority interest in Veba's
upstream oil and gas assets.
US dollar/Sterling exchange rates
1.44 1.55 1.57 Average rate for the period 1.50 1.44
1.45 1.55 1.60 Period-end rate 1.60 1.45
======================= =============
Analysis of Replacement Cost Operating Profit
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million $ million
By business
Exploration and Production
571 185 965 UK 2,526 3,424
144 213 177 Rest of Europe 714 748
426 661 1,081 USA 2,835 4,573
500 513 1,025 Rest of World 3,131 3,616
----------------------- --------------
1,641 1,572 3,248 9,206 12,361
----------------------- --------------
Gas, Power and Renewables
(29) (66) (31) UK (94) 52
64 17 1 Rest of Europe 100 189
36 28 9 USA 25 229
31 78 93 Rest of World 323 18
----------------------- -------------
102 57 72 354 488
----------------------- -------------
Refining and Marketing
(197) (158) (155) UK (498) (475)
227 236 (53) Rest of Europe 571 762
46 55 80 USA 335 2,585
303 104 92 Rest of World 464 701
----------------------- -------------
379 237 (36) 872 3,573
----------------------- -------------
Chemicals
(75) 6 (47) UK (82) (216)
(1) 161 65 Rest of Europe 337 185
(9) 54 37 USA 198 62
18 (89) 49 Rest of World 62 97
----------------------- -------------
(67) 132 104 515 128
----------------------- -------------
(175) (241) (207) Other businesses and corporate (701) (523)
----------------------- --------------
1,880 1,757 3,181 10,246 16,027
======================= ==============
By geographical area
375 (131) 793 UK 1,696 2,668
388 620 171 Rest of Europe 1,703 1,814
216 672 957 USA 2,890 6,941
901 596 1,260 Rest of World 3,957 4,604
----------------------- --------------
1,880 1,757 3,181 10,246 16,027
======================= ==============
Included above
91 104 83 Share of profits of joint ventures 346 443
Share of profits of
219 71 161 associated undertakings 616 760
----------------------- --------------
310 175 244 962 1,203
======================= ==============
Notes
1. Restatement of comparative information
Comparative information for 2001 has been restated to reflect the
changes described below.
(a) Transfer of solar, renewables and alternative fuels activities
With effect from 1 January 2002, the solar, renewables and
alternative fuels activities have been transferred from Other
businesses and corporate to Gas and Power. To reflect this
transfer Gas and Power has been renamed Gas, Power and Renewables
from the same date.
(b) New accounting standard for deferred tax
With effect from 1 January 2002 BP has adopted Financial Reporting
Standard No.19 'Deferred Tax' (FRS 19). This standard generally
requires that deferred tax should be provided on a full liability
basis rather than on a restricted liability basis as required by
Statement of Standard Accounting Practice No.15 'Accounting for
Deferred Tax'. The adoption of FRS 19 has been treated as a
change in accounting policy.
Under FRS 19 deferred tax is recognised in respect of all timing
differences that have originated but not reversed at the balance
sheet date where transactions or events have occurred at that date
that will result in an obligation to pay more, or a right to pay
less, tax in the future. In particular:
o Provision is made for tax on gains arising from the disposal of
fixed assets that have been rolled over into replacement
assets, only to the extent that, at the balance sheet date,
there is a binding agreement to dispose of the replacement
assets concerned. However, no provision is made where, on the
basis of all available evidence at the balance sheet date, it
is more likely than not that the taxable gain will be rolled
over into replacement assets and charged to tax only where the
replacement assets are sold.
o Provision is made for deferred tax that would arise on
remittance of the retained earnings of overseas subsidiaries,
joint ventures and associated undertakings only to the extent
that, at the balance sheet date, dividends have been accrued as
receivable.
Deferred tax assets are recognised only to the extent that it is
considered more likely than not that there will be suitable
taxable profits from which the underlying timing differences can
be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates
that are expected to apply in the periods in which timing
differences reverse, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.
As a consequence of adopting FRS 19 acquisitions have been
restated as if the new standard applied at that time. This leads
to the creation of higher deferred tax liabilities and greater
amounts of goodwill on those acquisitions.
Notes
Balance sheet at 31 December 2001 Restated Reported
=================
$ million
Fixed assets
Intangible assets 16,489 15,593
Tangible assets 77,410 77,410
Investments 11,963 12,047
-----------------
105,862 105,050
-----------------
Current assets 36,108 36,108
Creditors - amounts falling due
within one year 37,614 37,614
-----------------
Net current liabilities (1,506) (1,506)
-----------------
Total assets less current liabilities 104,356 103,544
Creditors - amounts falling due
after more than one year 15,413 15,413
Provisions for liabilities and charges
Deferred taxation 11,702 1,655
Other provisions 11,482 11,482
-----------------
Net assets 65,759 74,994
Minority shareholders' interest 598 627
-----------------
BP shareholders' interest 65,161 74,367
=================
Notes
Income statements Restated Reported
---------------- ----------------
Fourth Fourth
Quarter Year Quarter Year
2001 2001 2001 2001
===================================
$ million
Exploration and Production 1,641 12,361 1,655 12,417
Gas, Power and Renewables 102 488 106 521
Refining and Marketing 379 3,573 392 3,625
Chemicals (67) 128 (67) 128
Other businesses and corporate (175) (523) (179) (556)
-----------------------------------
Total replacement cost operating profit 1,880 16,027 1,907 16,135
Profit (loss) on sale of fixed assets
and businesses or termination
of operations (38) 535 (38) 535
-----------------------------------
Replacement cost profit before
interest and tax 1,842 16,562 1,869 16,670
Stock holding gains (losses) (1,297) (1,900) (1,297) (1,900)
-----------------------------------
Historical cost profit before
interest and tax 545 14,662 572 14,770
Interest expense 414 1,670 414 1,670
-----------------------------------
Profit before taxation 131 12,992 158 13,100
Taxation 711 6,375 537 5,017
-----------------------------------
Profit (loss) after taxation (580) 6,617 (379) 8,083
Minority shareholders' interest 23 61 26 73
-----------------------------------
Profit (loss) for the period (603) 6,556 (405) 8,010
Distribution to shareholders 1,289 4,935 1,289 4,935
-----------------------------------
Retained profit (deficit) for the period (1,892) 1,621 (1,694) 3,075
===================================
Earnings (loss) per ordinary share - cents
Basic (2.67) 29.21 (1.78) 35.70
Diluted (2.64) 29.04 (1.76) 35.48
===================================
Notes
2. Turnover
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= ==============
$ million $ million
By business
5,336 6,220 7,356 Exploration and Production 25,753 28,229
7,522 9,313 12,041 Gas, Power and Renewables 37,357 39,442
26,528 35,634 33,443 Refining and Marketing 125,836 120,233
2,481 3,720 3,118 Chemicals 13,064 11,515
Other businesses
146 108 131 and corporate 510 549
----------------------- ---------------
42,013 54,995 56,089 202,520 199,968
Less: sales between
5,196 5,941 6,367 businesses 23,799 25,750
----------------------- ---------------
36,817 49,054 49,722 Group excluding JVs 178,721 174,218
297 369 413 Sales of joint ventures 1,465 1,171
----------------------- ---------------
37,114 49,423 50,135 180,186 175,389
======================= ===============
By geographical area
Group excluding JVs
11,432 12,160 13,084 UK 48,748 47,618
8,657 13,460 11,720 Rest of Europe 46,518 36,701
16,039 22,880 22,573 USA 80,381 84,696
7,285 8,537 10,845 Rest of World 34,401 33,911
----------------------- ---------------
43,413 57,037 58,222 210,048 202,926
Less: sales between
6,596 7,983 8,500 areas 31,327 28,708
----------------------- ---------------
36,817 49,054 49,722 178,721 174,218
======================= ===============
Notes
3. Operating profits are after charging:
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million $ million
Exploration expense
9 16 1 UK 27 14
7 5 6 Rest of Europe 47 22
82 53 30 USA 258 256
46 45 142 Rest of World 312 188
----------------------- --------------
144 119 179 644 480
======================= ==============
Production taxes (a)
147 92 64 UK petroleum revenue tax 309 600
189 258 298 Overseas production taxes 965 1,089
----------------------- --------------
336 350 362 1,274 1,689
======================= ==============
(a) Production taxes are charged against Exploration and Production's
operating profit and are not included in the charge for taxation in
Note 8.
4. Analysis of exceptional items
(85) (25) (1,133) Exploration and Production (726) 195
1 1,585 (33) Gas, Power and Renewables 1,551 -
18 262 365 Refining and Marketing 613 471
(130) 11 (122) Chemicals (256) (297)
158 (39) 30 Other businesses and corporate (14) 166
----------------------- --------------
Profit (loss) on sale of fixed
assets and businesses or
(38) 1,794 (893) termination of operations 1,168 535
26 (25) 21 Taxation (credit) charge (125) (370)
----------------------- --------------
Exceptional items
(12) 1,769 (872) after taxation 1,043 165
======================= ==============
5. 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
6. Stock holding gains (losses)
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million $ million
(5) 3 (2) Exploration and Production 3 (6)
(20) 2 41 Gas, Power and Renewables 51 (81)
(1,138) 311 (201) Refining and Marketing 1,049 (1,583)
(134) (11) (12) Chemicals 26 (230)
---------------------- --------------
(1,297) 305 (174) 1,129 (1,900)
- - - Minority shareholders' interest 25 -
---------------------- --------------
(1,297) 305 (174) 1,104 (1,900)
====================== ==============
7. Interest expense
286 250 248 Group interest payable(a) 1,026 1,308
(7) (27) (33) Capitalized (100) (81)
----------------------- --------------
279 223 215 926 1,227
21 15 14 Joint ventures 58 70
26 19 19 Associated undertakings 83 135
Unwinding of discount
46 43 42 on provisions 170 196
Change in discount rate
42 - 42 for provisions 42 42
----------------------- --------------
414 300 332 1,279 1,670
======================= ==============
(a) Includes charges relating
to the early redemption
- - 15 of debt 15 62
----------------------- --------------
8. Charge for taxation
550 463 1,112 Current 3,148 5,131
161 250 13 Deferred(a) 1,194 1,244
----------------------- --------------
711 713 1,125 4,342 6,375
======================= ==============
174 235 366 UK(a) 1,436 940
537 478 759 Overseas 2,906 5,435
----------------------- --------------
711 713 1,125 4,342 6,375
======================= ==============
(a) Includes the adjustment
to the North Sea deferred
tax balance for the
supplementary
- - - UK corporation tax of 10% 355 -
----------------------- --------------
Notes
9. Analysis of changes in net debt
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= ===============
$ million $ million
Opening balance
20,474 21,409 22,276 Finance debt 21,417 21,190
1,438 1,284 1,005 Less: Cash 1,358 1,170
519 285 285 Current asset investments 450 661
----------------------- ---------------
18,517 19,840 20,986 Opening net debt 19,609 19,359
----------------------- ---------------
Closing balance
21,417 22,276 22,008 Finance debt 22,008 21,417
1,358 1,005 1,520 Less: Cash 1,520 1,358
450 285 215 Current asset investments 215 450
----------------------- ---------------
19,609 20,986 20,273 Closing net debt 20,273 19,609
----------------------- ---------------
(Increase) decrease
(1,092) (1,146) 713 in net debt (664) (250)
======================= ===============
Movement in cash/
(63) (272) 463 bank overdrafts 57 241
Decrease in current
(66) (32) (56) asset investments (220) (211)
Net cash (inflow) outflow
from financing(excluding
(941) (914) 321 share capital) (736) (128)
Partnership interests
- - - exchanged for BP loan notes 1,135 -
(16) 13 19 Other movements 76 (36)
(8) - (3) Debt acquired (1,002) (55)
----------------------- --------------
Movement in net debt before
(1,094) (1,205) 744 exchange effects (690) (189)
2 59 (31) Exchange adjustments 26 (61)
----------------------- --------------
(Increase) decrease
(1,092) (1,146) 713 in net debt (664) (250)
======================= ==============
Notes
10. Consolidated statement of cash flows presented on a US GAAP format
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million $ million
Operating activities
(580) 2,843 657 Profit after taxation 6,922 6,617
Adjustments to reconcile
profits after tax to net
cash provided by
operating activities
Depreciation and
2,457 3,506 2,515 amounts provided 10,401 8,858
Exploration expenditure
85 55 124 written off 385 238
Share of (profit) loss of
joint ventures and associates
(52) 51 (8) less dividends received 3 (60)
(Profit) loss on sale
of businesses and
36 (1,796) 895 fixed assets (1,166) (537)
Working capital movement
2,087 (1,002) 907 (see analysis below) (1,416) 1,319
161 250 13 Deferred taxation 1,194 1,244
(58) (191) (33) Other (280) (111)
----------------------- ---------------
Net cash provided by
4,136 3,716 5,070 operating activities 16,043 17,568
----------------------- ---------------
Investing activities
(3,695) (3,007) (3,577) Capital expenditures (12,216) (12,295)
Acquisitions, net of
(602) (2,607) (28) cash acquired (4,324) (1,210)
Investment in
(179) (125) (215) associated undertakings (971) (586)
Net investment in
(220) (23) (217) joint ventures (354) (497)
Proceeds from
846 2,881 1,030 disposal of assets 6,782 2,903
----------------------- --------------
Net cash used in
(3,850) (2,881) (3,007) investing activities (11,083) (11,685)
----------------------- --------------
Notes
10. Consolidated statement of cash flows presented on a US GAAP format
(continued)
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million $ million
Financing activities
Net proceeds from shares
(86) (695) 17 issued (repurchased) (555) (1,100)
Proceeds from
267 558 651 long-term financing 3,707 1,296
Repayments of
(434) (567) (905) long-term financing (2,369) (2,602)
Net (decrease) increase
1,108 923 (67) in short-term debt (602) 1,434
Dividends paid
(1,232) (1,346) (1,340) - BP shareholders (5,264) (4,827)
(38) (13) (11) - Minority shareholders (40) (54)
----------------------- -------------
Net cash used in
(415) (1,140) (1,655) financing activities (5,123) (5,853)
----------------------- --------------
Currency translation
differences relating to
(20) 26 37 cash and cash equivalents 90 (53)
----------------------- --------------
(Decrease) increase in
(149) (279) 445 cash and cash equivalents (73) (23)
Cash and cash equivalents
1,957 1,569 1,290 at beginning of period 1,808 1,831
----------------------- --------------
Cash and cash equivalents
1,808 1,290 1,735 at end of period 1,735 1,808
----------------------- --------------
Analysis of working
capital movement
(Increase) decrease
1,368 (155) (63) in stocks (1,521) 1,490
(Increase) decrease
1,202 (345) (271) in debtors (2,750) 1,905
Increase (decrease)
(483) (502) 1,241 in creditors 2,855 (2,076)
----------------------- --------------
Total working
2,087 (1,002) 907 capital movement (1,416) 1,319
======================= ==============
Notes
11. Ordinary shares
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
================================== ================
(shares thousand) (Shares thousand)
Shares in
issue at period
22,432,077 22,374,747 22,378,651 end (a) 22,378,651 22,432,077
Average number
of shares
outstanding
22,396,315 22,408,297 22,351,122 (b) 22,397,126 22,435,737
---------------------------------- ----------------------
(a) Each BP ADS represents six BP Ordinary Shares.
(b) Excludes shares held by the Employee Share Ownership Plans.
12. Statutory accounts
The above financial information for the year 2002 does not constitute
statutory accounts. It is an extract from the 2002 Annual Accounts
(except Note 10), approved by a duly appointed and authorized committee
of the Board of Directors at today's Results Committee, but not yet
delivered to the UK Registrar of Companies; the report of the auditors
on those accounts was unqualified. In preparing the financial
statements for the current year, the group has adopted Financial
Reporting Standard No. 19 'Deferred Tax' (FRS 19). The adoption of
FRS 19 has resulted in a change in accounting policy for deferred tax.
Prior year figures have been restated - see Note 1 for further details.
Quarterly results are unuadited.
Contacts
London New York Frankfurt
------------------- ---------------- --------------------
Press Roddy Kennedy Ian Fowler
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Relations +44 (0)20 7496 4717 +1 212 451 8034 +49 (0)69 71 379 9912
http://www.bp.com/investors
BP p.l.c.
Group Results
Fourth Quarter and Full Year 2002
London 11 February 2003
INVESTOR RELATIONS SUPPLEMENT
REPLACEMENT COST OPERATING PROFIT ADJUSTED FOR SPECIAL ITEMS(a) AND ACQUISITION
AMORTIZATION(b)
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million
Exploration and Production
682 668 1,011 UK 3,256 3,645
144 213 177 Rest of Europe 714 748
840 1,059 1,421 USA 4,192 6,180
708 1,110 1,057 Rest of World 3,843 3,925
----------------------- --------------
2,374 3,050 3,666 12,005 14,498
----------------------- --------------
Gas, Power and Renewables
(29) (36) (31) UK (64) 52
64 17 1 Rest of Europe 100 189
36 28 9 USA 25 229
31 78 93 Rest of World 323 18
----------------------- --------------
102 87 72 384 488
----------------------- --------------
Refining and Marketing
(28) (36) (21) UK (45) 50
271 274 225 Rest of Europe 936 929
203 180 235 USA 670 3,043
339 104 148 Rest of World 520 808
----------------------- --------------
785 522 587 2,081 4,830
----------------------- --------------
Chemicals
14 6 (26) UK (39) (127)
32 161 74 Rest of Europe 364 226
(25) 54 42 USA 238 46
18 51 49 Rest of World 202 97
----------------------- --------------
39 272 139 765 242
----------------------- --------------
Other businesses and corporate
105 (63) 81 UK (101) (117)
(46) (7) (18) Rest of Europe (18) (70)
(210) (36) (210) USA (373) (433)
49 (10) 1 Rest of World (23) 170
----------------------- --------------
(102) (116) (146) (515) (450)
----------------------- --------------
3,198 3,815 4,318 14,720 19,608
======================= ==============
(a) The special items refer to non-recurring charges and credits. The
special items for the fourth quarter include an asset write-down in
Exploration and Production, integration and restructuring costs and an
impairment charge in Refining and Marketing, integration and
restructuring costs in Chemicals, provisions to cover future rental
payments on surplus leasehold property and environmental charges in
Other businesses and corporate, and a bond redemption charge.
(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 third quarter 2002 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
2001 2002 2002 2002 2001
=================================== ======================
Shares in issue
at period
22,432,077 22,374,747 22,378,651 end (thousand) 22,378,651 22,432,077
- ADS equivalent
3,738,680 3,729,125 3,729,775 (thousand) 3,729,775 3,738,680
Average number
of shares
outstanding
22,396,315 22,408,297 22,351,122 (thousand)* 22,397,126 22,435,737
- ADS equivalent
3,732,719 3,734,716 3,725,187 (thousand) 3,732,854 3,739,290
----------------------------------- ----------------------
Replacement cost
profit after
exceptional
694 2,535 825 items ($m) 5,741 8,456
cents/ordinary
3.11 11.31 3.69 share 25.62 37.68
0.19 0.68 0.22 dollars/ADS 1.54 2.26
----------------------------------- ----------------------
Replacement cost
profit before
exceptional
706 766 1,697 items ($m) 4,698 8,291
cents/ordinary
3.17 3.42 7.58 share 20.97 36.95
0.19 0.20 0.45 dollars/ADS 1.26 2.22
----------------------------------- ----------------------
Pro forma result
adjusted for special
1,771 2,299 2,635 items ($m) 8,715 11,559
7.91 10.26 11.78 cents/ordinary share 38.90 51.51
0.47 0.62 0.71 dollars/ADS 2.33 3.09
----------------------------------- ----------------------
* Excludes shares held by the Employee Share Ownership Plans.
ACQUISITION AMORTIZATION BY BUSINESS
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million
Exploration and Production
41 378 41 UK 488 151
337 283 246 USA 1,078 1,530
33 114 32 Rest of World 214 134
----------------------- -------------
411 775 319 1,780 1,815
----------------------- -------------
Refining and Marketing
99 106 107 UK 410 394
94 96 96 USA 384 376
----------------------- -------------
193 202 203 794 770
----------------------- -------------
604 977 522 Total acquisition amortization 2,574 2,585
======================= =============
SPECIAL ITEMS BY BUSINESS (PRE-TAX)
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million
Exploration and Production
70 105 5 UK 242 70
- - - Rest of Europe - -
77 115 94 USA 279 77
175 483 - Rest of World 498 175
----------------------- -------------
322 703 99 1,019 322
----------------------- -------------
Gas, Power and Renewables
- 30 - UK 30 -
- - - Rest of Europe - -
- - - USA - -
- - - Rest of World - -
----------------------- -------------
- 30 - 30 -
----------------------- -------------
Refining and Marketing
70 16 27 UK 43 131
44 38 278 Rest of Europe 365 167
63 29 59 USA (49) 82
36 - 56 Rest of World 56 107
----------------------- -------------
213 83 420 415 487
----------------------- -------------
Chemicals
89 - 21 UK 43 89
33 - 9 Rest of Europe 27 41
(16) - 5 USA 40 (16)
- 140 - Rest of World 140 -
----------------------- -------------
106 140 35 250 114
----------------------- -------------
Other businesses and corporate
- 35 20 UK 55 -
- - 1 Rest of Europe 1 -
73 90 40 USA 130 73
- - - Rest of World - -
----------------------- -------------
73 125 61 186 73
----------------------- -------------
714 1,081 615 Total special items before interest 1,900 996
- - 15 Interest - bond redemption charges 15 62
----------------------- -------------
714 1,081 630 Total 1,915 1,058
======================= =============
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 2002
Exploration and Production 1,572 775 703 3,050
Gas, Power and Renewables 57 - 30 87
Refining and Marketing 237 202 83 522
Chemicals 132 - 140 272
Other businesses & corporate (241) - 125 (116)
----------------------------------------------
RC operating profit 1,757 977 1,081 3,815
----------------------------------------------
Interest expense (300) - - (300)
Taxation (688) - (525) (1,213)
MSI (3) - - (3)
----------------------------------------------
RC profit before
exceptional items 766 977 556 2,299
==============================================
Exceptional items before tax 1,794
Taxation on exceptional items (25)
-----
RC profit after
exceptional items 2,535
Stock holding gains (losses) 305
-----
HC profit 2,840
=====
4Q 2001
Exploration and Production 1,641 411 322 2,374
Gas, Power and Renewables 102 - - 102
Refining and Marketing 379 193 213 785
Chemicals (67) - 106 39
Other businesses & corporate (175) - 73 (102)
----------------------------------------------
RC operating profit 1,880 604 714 3,198
----------------------------------------------
Interest expense (414) - - (414)
Taxation (737) - (253) (990)
MSI (23) - - (23)
----------------------------------------------
RC profit before
exceptional items 706 604 461 1,771
==============================================
Exceptional items before tax (38)
Taxation on exceptional items 26
-----
RC profit after
exceptional items 694
Stock holding gains (losses) (1,297)
-----
HC profit (603)
=====
(a) The special items refer to non-recurring charges and credits. The
special items for the third quarter 2002 comprise impairment charges and
restructuring costs for Exploration and Production; an impairment charge
in Gas, Power and Renewables; integration and certain other costs in
Refining and Marketing; an impairment charge in Chemicals; and a
provision to cover future rental payments on surplus leasehold property
in Other businesses and corporate. The special items for the fourth
quarter 2001 comprise additional severance charges, mainly related to
former ARCO employees, an impairment charge for our partner operated
Venezuelan Lake Maracaibo operations, Castrol, Solvay and Erdolchemie
integration costs, Grangemouth restructuring, and litigation costs.
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 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
Chemicals 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
=====
Year 2001
Exploration and Production 12,361 1,815 322 14,498
Gas, Power and Renewables 488 - - 488
Refining and Marketing 3,573 770 487 4,830
Chemicals 128 - 114 242
Other businesses & corporate (523) - 73 (450)
----------------------------------------------
RC operating profit 16,027 2,585 996 19,608
----------------------------------------------
Interest expense (1,670) - 62 (1,608)
Taxation (6,005) - (375) (6,380)
MSI (61) - - (61)
----------------------------------------------
RC profit before
exceptional items 8,291 2,585 683 11,559
==============================================
Exceptional items before tax 535
Taxation on exceptional items (370)
-----
RC profit after
exceptional items 8,456
Stock holding gains (losses) (1,900)
-----
HC profit 6,556
=====
(a) The special items refer to non-recurring charges and credits. 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 Chemicals; 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. The
special items for the year 2001 comprise additional severance charges,
mainly related to former ARCO employees, an impairment charge for our
partner operated Venezuelan Lake Maracaibo operations, rationalization
costs in the European downstream commercial business, Castrol, Solvay
and Erdolchemie integration costs, Grangemouth restructuring, and
litigation costs.
REPLACEMENT COST OPERATING PROFIT ADJUSTED FOR
NON-CASH CHARGES AND CERTAIN OTHER ITEMS
Fourth Third Fourth
Quarter Quarter Quarter Year
2001 2002 2002 2002 2001
======================= =============
$ million
Replacement cost operating profit
1,880 1,757 3,181 (reported) (a) 10,246 16,027
2,457 3,506 2,515 Depreciation and amounts provided (b)10,401 8,858
85 55 124 Exploration expenditure written off 385 238
Dividends from JVs and associates
(194) (49) (110) less share of RCOP (396) (571)
(38) (13) (11) Dividends paid to minority shareholders (40) (54)
(34) (60) 27 Adjust provisions to cash basis (c) (150) (111)
Adjust interest and other income
(14) 5 (14) to cash basis (d) (25) (90)
----------------------- -------------
4,142 5,201 5,712 20,421 24,297
(1,528) (712) (1,199) Tax paid adjusted for certain items* (3,390) (4,738)
----------------------- -------------
2,614 4,489 4,513 Adjusted RCOP after tax paid 17,031 19,559
----------------------- -------------
* Calculation of tax paid adjusted
for certain items
(1,422) (661) (1,061) Cash tax paid (3,094) (4,660)
(26) 25 (21) Tax charge on exceptional items 125 370
(80) (76) (117) Tax shield assumption + (421) (448)
----------------------- -------------
(1,528) (712) (1,199) (3,390) (4,738)
----------------------- -------------
+ Calculation of tax shield assumption
(229) (218) (335) Interest paid (1,204) (1,282)
35% 35% 35% Tax rate assumption (e) 35% 35%
----------------------- -------------
(80) (76) (117) (421) (448)
----------------------- -------------
(a) Total replacement cost operating profit is before 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) Calculated as the net of charge for provisions and utilization of
provisions.
(d) Calculated as interest and other income, less 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
2001 2002 2002 2002 2001
======================= =============
$ million
Replacement cost basis
706 766 1,697 RC profit before exceptional items 4,698 8,291
181 145 140 Interest + 602 798
23 3 6 Minority shareholders' interest 52 61
----------------------- --------------
910 914 1,843 Adjusted RC profit 5,352 9,150
======================= ==============
87,791 90,507 91,767 Average capital employed 89,616 87,259
4.1% 4.0% 8.0% ROACE - replacement cost basis 6.0% 10.5%
----------------------- -------------
Pro forma basis
910 914 1,843 Adjusted RC profit 5,352 9,150
604 977 522 Acquisition amortization 2,574 2,585
461 556 406 Special items (post-tax) 1,449 643
87,791 90,507 91,767 Average capital employed 89,616 87,259
Average capital employed
19,647 17,581 16,903 acquisition adjustment 17,777 20,739
----------------------- -------------
Average capital employed
68,144 72,926 74,864 (pro forma basis) 71,839 66,520
ROACE - Pro forma basis
11.6% 13.4% 14.8% adjusted for special items 13.0% 18.6%
----------------------- ------------
Historical cost basis
Historical cost profit (loss)
(603) 2,840 651 after exceptional items 6,845 6,556
181 145 140 Interest + 602 798
23 3 6 Minority shareholders' interest 77 61
----------------------- --------------
(399) 2,988 797 Adjusted historical cost profit 7,524 7,415
======================= ==============
87,791 90,507 91,767 Average capital employed 89,616 87,259
(1.8)% 13.2% 3.5% ROACE 8.4% 8.5%
+ 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 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
2001 2002 2002 2002 2001
======================= =============
$ million
21,417 22,276 22,008 Gross debt 22,008 21,417
1,808 1,290 1,735 Cash and current asset investments 1,735 1,808
----------------------- -------------
19,609 20,986 20,273 Net debt 20,273 19,609
======================= =============
65,759 69,203 70,047 Equity 70,047 65,759
23% 23% 22% Net debt ratio 22% 23%
----------------------- --------------
18,882 17,134 16,672 Acquisition adjustment 16,672 18,882
----------------------- --------------
29% 29% 28% Net debt ratio - pro forma basis 28% 29%
======================= ==============
END
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: 11 February, 2003 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary