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 24 July, 2007
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
Second Quarter and Half Year 2007
London 24 July 2007
FOR IMMEDIATE RELEASE
----------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006 %
============================ ============================
7,266 4,664 7,376 Profit for the period* 12,040 12,889
(1,148) (303) (1,289) Inventory holding (gains) losses (1,592) (1,506)
---------------------------- ----------------------------
6,118 4,361 6,087 Replacement cost profit 10,448 11,383 (8)
============================ ============================
16.59 11.54 15.96 - per ordinary share (pence) 27.50 31.25
30.28 22.50 31.67 - per ordinary share (cents) 54.17 55.94 (3)
1.82 1.35 1.90 - per ADS (dollars) 3.25 3.36
============================ ============================
- BP's second quarter replacement cost profit was $6,087 million, compared
with $6,118 million a year ago, a decrease of 1%. For the half year,
replacement cost profit was $10,448 million compared with $11,383 million,
down 8%.
- The second quarter result included a net non-operating gain of $741 million
compared with a net non-operating gain of $6 million in the second quarter
of 2006. For the half year, the net non-operating gain was $1,104
million compared with a net non-operating charge of $11 million for the first
half of 2006.
- Net cash provided by operating activities for the quarter and half year was
$6.1 billion and $14.1 billion compared with $9.1 billion and $18.1 billion
a year ago.
- The effective tax rate on replacement cost profit from continuing operations
for both the second quarter and half year was 35%; the rate was 36% for the
second quarter and first half of 2006.
- Net debt at the end of the quarter was $21.1 billion. The ratio of net debt
to net debt plus equity was 19% compared with 15% a year ago.
- Capital expenditure, excluding acquisitions and asset exchanges, was
$4.4 billion for the quarter and for the half year was $8.0 billion. Total
capital expenditure and acquisitions was $4.7 billion for the quarter and
$9.5 billion for the half year. The half year included $1.1 billion in
respect of the acquisition of Chevron's Netherlands manufacturing company.
Disposal proceeds were $2.7 billion for the quarter and were $3.7 billion
for the half year.
- The quarterly dividend, to be paid in September, is 10.825 cents per share
($0.6495 per ADS) compared with 9.825 cents per share a year ago. For the
half year, the dividend showed an increase of 10%. In sterling terms, the
quarterly dividend is 5.278 pence per share, compared with 5.324 pence per
share a year ago; for the half year, the decrease was 1%. During the quarter,
the company repurchased 176 million of its own shares for cancellation at a
cost of $2.0 billion. For the first half, share repurchases were 414 million
at a cost of $4.5 billion.
- Information on fair value accounting effects in relation to Refining
and Marketing and Gas, Power and Renewables is set out on page 10.
* Profit attributable to BP shareholders.
The commentaries above and following are based on replacement cost profit and
should be read in conjunction with the cautionary statement on page 11.
Analysis of Replacement Cost Profit and Reconciliation to Profit for the Period
---------------------------------------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
=============================== ================
7,826 6,043 6,893 Exploration and Production 12,936 14,649
1,856 838 2,740 Refining and Marketing 3,578 3,468
453 206 190 Gas, Power and Renewables 396 754
(193) (116) (164) Other businesses and corporate (280) (410)
(277) 83 (69) Consolidation adjustment 14 (285)
------------------------------- ----------------
9,665 7,054 9,590 RC profit before interest and tax 16,644 18,176
------------------------------- ----------------
(107) (171) (155) Finance costs and other finance income (326) (250)
(3,441) (2,440) (3,283) Taxation (5,723) (6,370)
(77) (82) (65) Minority interest (147) (148)
------------------------------- ----------------
RC profit from continuing operations
6,040 4,361 6,087 attributable to BP shareholders(a) 10,448 11,408
=============================== ================
Inventory holding gains (losses) for continuing
1,148 303 1,289 operations 1,592 1,506
------------------------------- ----------------
Profit for the period from continuing
operations attributable to
7,188 4,664 7,376 BP shareholders 12,040 12,914
Profit (loss) for the period from Innovene
78 - - operations(b) - (25)
------------------------------- ----------------
Profit for the period attributable to BP
7,266 4,664 7,376 shareholders 12,040 12,889
=============================== ================
RC profit from continuing operations
attributable
6,040 4,361 6,087 to BP shareholders 10,448 11,408
78 - - RC profit (loss) from Innovene operations - (25)
------------------------------- ----------------
6,118 4,361 6,087 Replacement cost profit 10,448 11,383
=============================== ================
(a) Replacement cost profit reflects the current cost of supplies. The
replacement cost profit for the period is arrived at by excluding from
profit inventory holding gains and losses. BP uses this measure to assist
investors to assess BP's performance from period to period. Replacement
cost profit is not a recognized GAAP measure.
(b) See further detail in Note 3.
Results include Non-operating Items
------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
=============================== =================
479 748 399 Exploration and Production 1,147 93
(464) (229) 767 Refining and Marketing 538 100
106 9 (36) Gas, Power and Renewables (27) 51
26 34 7 Other businesses and corporate 41 35
------------------------------- -----------------
147 562 1,137 1,699 279
(53) (199) (396) Taxation(a) (595) (99)
------------------------------- -----------------
94 363 741 Continuing operations 1,104 180
------------------------------- -----------------
(88) - - Innovene operations - (184)
- - - Taxation - (7)
------------------------------- -----------------
6 363 741 Total for all operations 1,104 (11)
=============================== =================
An analysis of non-operating items by type is provided on page 21.
(a) Tax on non-operating items is calculated using the quarter's effective tax
rate on replacement cost profit from continuing operations.
Per Share Amounts
----------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
=============================== =====================
Results for the period ($ million)
7,266 4,664 7,376 Profit(a) 12,040 12,889
6,118 4,361 6,087 Replacement cost profit 10,448 11,383
------------------------------- ---------------------
Shares in issue at period end
19,993,613 19,290,540 19,133,973 (thousand)(b) 19,133,973 19,993,613
3,332,269 3,215,090 3,188,996 ADS equivalent (thousand)(b) 3,188,996 3,332,269
Average number of shares outstanding
20,171,546 19,384,508 19,186,461 (thousand)(b) 19,284,938 20,345,750
3,361,924 3,230,751 3,197,744 ADS equivalent (thousand)(b) 3,214,156 3,390,958
Shares repurchased in the period
375,744 237,916 175,806 (thousand) 413,722 724,823
Per ordinary share (cents)
35.94 24.06 38.37 Profit for the period 62.43 63.34
30.28 22.50 31.67 RC profit for the period 54.17 55.94
Per ADS (cents)
215.64 144.36 230.22 Profit for the period 374.58 380.04
181.68 135.00 190.02 RC profit for the period 325.02 335.64
------------------------------- ---------------------
(a) Profit attributable to BP shareholders.
(b) Excludes treasury shares.
Dividends
---------
Dividends Payable
BP today announced a dividend of 10.825 cents per ordinary share to be paid in
September. Holders of ordinary shares will receive 5.278 pence per share and
holders of American Depository Receipts (ADRs) $0.6495 per ADS. The dividend is
payable on 4 September to shareholders on the register on 10 August.
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 4 September.
Dividends Paid
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
================================ ======================
Dividends paid per ordinary share
9.375 10.325 10.325 Cents 20.650 18.750
5.251 5.258 5.151 Pence 10.409 10.539
56.25 61.95 61.95 Dividends paid per ADS (cents) 123.90 112.50
================================ ======================
Net Debt Ratio - Net Debt: Net Debt + Equity
------------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
================================ ======================
19,286 23,728 23,754 Gross debt 23,754 19,286
4,852 1,956 2,643 Cash and cash equivalents 2,643 4,852
-------------------------------- ----------------------
14,434 21,772 21,111 Net debt 21,111 14,434
================================ ======================
82,356 85,749 89,423 Equity 89,423 82,356
15% 20% 19% Net debt ratio 19% 15%
================================ ======================
Exploration and Production
----------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
============================= ================
7,827 6,054 6,894 Profit before interest and tax(a) 12,948 14,643
(1) (11) (1) Inventory holding (gains) losses (12) 6
----------------------------- ----------------
Replacement cost profit before interest
7,826 6,043 6,893 and tax 12,936 14,649
============================= ================
By region:
1,834 1,062 1,113 UK 2,175 2,999
393 720 183 Rest of Europe 903 696
2,254 1,652 2,038 US 3,690 4,565
3,345 2,609 3,559 Rest of World 6,168 6,389
----------------------------- ----------------
7,826 6,043 6,893 12,936 14,649
============================= ================
Results include:
Non-operating items
386 145 187 UK 332 (8)
83 533 (2) Rest of Europe 531 83
9 (8) 177 US 169 11
1 78 37 Rest of World 115 7
----------------------------- ----------------
479 748 399 1,147 93
============================= ================
Exploration expense
- 20 7 UK 27 7
- - - Rest of Europe - -
55 77 54 US 131 121
42 59 94 Rest of World 153 158
----------------------------- ----------------
97 156 155 311 286
============================= ================
Production (net of royalties)(b)
Liquids (mb/d) (net of royalties)(c)
280 236 218 UK 227 280
64 59 43 Rest of Europe 52 65
565 526 532 US 529 566
1,622 1,625 1,656 Rest of World 1,640 1,620
----------------------------- ----------------
2,531 2,446 2,449 2,448 2,532
============================= ================
Natural gas (mmcf/d) (net of royalties)
911 907 731 UK 818 1,053
83 41 22 Rest of Europe 32 88
2,493 2,163 2,165 US 2,164 2,489
5,138 5,391 4,941 Rest of World 5,165 5,038
----------------------------- ----------------
8,624 8,502 7,859 8,179 8,668
============================= ================
Total hydrocarbons (mboe/d)(d)
437 393 344 UK 368 462
78 66 47 Rest of Europe 57 80
995 899 905 US 902 995
2,508 2,554 2,508 Rest of World 2,530 2,489
----------------------------- ----------------
4,018 3,912 3,804 3,857 4,026
============================= ================
Average realizations(e)
62.86 53.43 62.58 Total liquids ($/bbl) 57.96 59.36
4.44 4.86 4.45 Natural gas ($/mcf) 4.66 4.99
44.58 41.06 44.97 Total hydrocarbons ($/boe) 42.97 44.39
============================= ================
(a) Profit from continuing operations and includes profit after interest and tax
of equity-accounted entities.
(b) Includes BP's share of production of equity-accounted entities.
(c) Crude oil and natural gas liquids.
(d) Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1
million barrels.
(e) Based on sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
(f) Because of rounding, some totals may not agree exactly with the sum of their
component parts.
Exploration and Production
----------------------
The replacement cost profit before interest and tax for the second quarter was
$6,893 million, a decrease of 12% from the second quarter of 2006. This result
was impacted by lower reported volumes and higher costs, reflecting the
continued impact of sector-specific inflation, increased integrity spend and
higher depreciation charges associated primarily with the change to SEC
guidelines for reserves reporting as well as increased decommissioning
provisions. Net non-operating gains for the second quarter were $399 million,
mainly arising from net gains on the disposal of interests in the Permian,
Entrada and Kaybob assets in North America and fair value gains on embedded
derivatives relating to North Sea gas contracts, partially offset by an
impairment charge related to the cancellation of the DF1 project in Scotland.
Reported production for the quarter was 3,804 mboe/d, down 5% compared with the
second quarter of 2006. After adjusting for the effect of disposals and
entitlement changes in our production sharing agreements, production for the
quarter was down 1%. Full year production in 2007 is expected to be in the range
of 3.8 to 3.9 mmboe/d, in line with the guidance provided earlier in the year.
The replacement cost profit before interest and tax of $12,936 million for the
half year represented a decrease of 12% over the same period of the previous
year. This result was impacted by lower oil and gas realizations as well as
lower reported volumes and higher costs, reflecting sector-specific inflation,
increased integrity spend and higher depreciation charges. The half-year result
included net non-operating gains of $1,147 million.
Reported production for the half year was 3,857 mboe/d, 4% lower than in the
first half of 2006. After adjusting for the effect of disposals and entitlement
changes in our production-sharing agreements, production for the half year was
broadly flat compared with the prior year.
During the quarter, we had first production from the Rosa project in Angola,
where BP holds a 16.67% working interest. Also in Angola, we made our 14th
discovery in Block 31 (Cordelia). Additionally, we announced the Isabela
discovery in the deepwater Gulf of Mexico.
In May, we signed agreements with Occidental Petroleum Corporation to dispose of
our 100% interest in the West Texas pipeline system and our interests in
non-core Permian assets in the US. In exchange, BP acquired a 42% interest in
the Badin field in Pakistan and a 331/3% interest in Horn Mountain in the
deepwater Gulf of Mexico and received a cash payment. Separately, in April, we
divested our interest in the Entrada field in the Gulf of Mexico and in June we
divested some of our interests in the Kaybob field in Alberta, Canada.
During the quarter, we also announced a major exploration and production
agreement with Libya's National Oil Company, a memorandum of understanding to
establish a global strategic alliance with Gazprom and TNK-BP and the proposed
divestment of TNK-BP's interests in the Kovytka gas project.
Refining and Marketing
-------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
============================= =================
2,992 1,129 3,981 Profit before interest and tax(a) 5,110 5,030
(1,136) (291) (1,241) Inventory holding (gains) losses (1,532) (1,562)
----------------------------- -----------------
Replacement cost profit (loss) before interest
1,856 838 2,740 and tax 3,578 3,468
============================= =================
By region:
171 (10) 963 UK 953 23
584 298 584 Rest of Europe 882 1,148
749 122 964 US 1,086 1,386
352 428 229 Rest of World 657 911
----------------------------- -----------------
1,856 838 2,740 3,578 3,468
============================= =================
Results include:
Non-operating items
(1) (163) 844 UK 681 19
(29) (12) (44) Rest of Europe (56) 200
(446) (58) 170 US 112 (350)
12 4 (203) Rest of World (199) 231
----------------------------- -----------------
(464) (229) 767 538 100
============================= =================
Refinery throughputs (mb/d)
162 148 123 UK 136 137
671 640 700 Rest of Europe 670 655
1,200 1,152 996 US 1,074 1,088
256 292 309 Rest of World 300 276
----------------------------- -----------------
2,289 2,232 2,128 Total throughput 2,180 2,156
============================= =================
86.4 81.6 82.7 Refining availability (%)(b) 82.2 83.1
============================= =================
Oil sales volumes (mb/d)
Refined products
354 335 343 UK 339 350
1,311 1,246 1,271 Rest of Europe 1,258 1,313
1,631 1,564 1,579 US 1,571 1,615
579 624 615 Rest of World 620 573
----------------------------- -----------------
3,875 3,769 3,808 Total marketing sales 3,788 3,851
1,682 2,026 1,867 Trading/supply sales 1,947 1,943
----------------------------- -----------------
5,557 5,795 5,675 Total refined product sales 5,735 5,794
1,996 2,017 2,161 Crude oil 2,089 2,283
----------------------------- -----------------
7,553 7,812 7,836 Total oil sales 7,824 8,077
============================= =================
Global Indicator Refining Margin ($/bbl)(c)
5.78 4.16 7.12 NWE 5.65 4.33
17.74 10.14 24.46 USGC 17.34 14.30
14.75 7.62 26.05 Midwest 16.89 9.82
21.27 22.21 22.71 USWC 22.46 16.25
6.83 4.84 6.01 Singapore 5.43 5.18
12.59 9.45 16.66 BP Average 13.07 9.44
============================= =================
Chemicals production (kte)
298 256 246 UK 251 601
741 748 655 Rest of Europe 701 1,583
816 1,076 1,047 US 1,062 1,605
1,728 1,520 1,497 Rest of World 1,509 3,415
----------------------------- -----------------
3,583 3,600 3,445 Total production 3,523 7,204
============================= =================
(a) Profit from continuing operations and includes profit after interest and tax
of equity-accounted entities.
(b) Refining availability is defined as the ratio of units which are available
for processing, regardless of whether they are actually being used, to total
capacity. Where there is planned maintenance, such capacity is not regarded
as being available. During 2006, there was planned maintenance of a
substantial part of the Texas City refinery.
(c) The Global Indicator Refining Margin (GIM) is the average of regional
indicator margins weighted for BP's crude refining capacity in each region.
Each regional indicator margin is based on a single representative crude
with product yields characteristic of the typical level of upgrading
complexity. The regional indicator margins may not be representative of the
margins achieved by BP in any period because of BP's particular refinery
configurations and crude and product slate.
Refining and Marketing
-------------------
The replacement cost profit before interest and tax for the second quarter and
half year was $2,740 million and $3,578 million respectively. The results in the
equivalent periods of 2006 were $1,856 million and $3,468 million respectively.
The results include net non-operating gains of $767 million in the second
quarter and $538 million for the half year. The second quarter gain comprised of
disposal gains of $1,025 million primarily related to the sale of the Coryton
refinery, which completed on 31 May 2007, and the sale of the US West Texas
pipeline system to Occidental Petroleum Corporation, partially offset by an
impairment charge of $258 million.
Compared with 2006, both the second quarter and half-year results benefited from
significantly stronger refining margins, particularly in the US; marketing
margins were also stronger. However, these benefits were more than offset by the
impact of operational issues and scheduled turnarounds at a number of our
refineries in the US. Compared with 2006, the second quarter and first half
results reflect higher integrity management and refinery turnaround costs as
well as lower supply optimization benefits, partially offset by a positive
impact from non-operating items.
Information on fair value accounting effects is set out on page 10.
Refining throughputs for the quarter and half year were 2,128 mb/d and 2,180 mb/
d respectively, compared with 2,289 mb/d and 2,156 mb/d for the same periods
last year. The lower throughputs were mainly due to the outages in our Mid West
US refineries and were only partially offset by the benefits of the ongoing
recommissioning at the Texas City refinery.
Operational issues at the Whiting refinery in the US have limited the site's
throughput and ability to make low- sulphur gasoline from sour crude oil.
Repairs are ongoing and we expect to resume sour crude processing in the fourth
quarter of 2007 and to restore the refinery to its full flexibility and crude
capacity in the first half of 2008.
Marketing sales were 3,808 mb/d for the quarter and 3,788 mb/d for the half
year, slightly lower than the comparative periods in the previous year, mainly
due to divestments and lower European heating oil demand as a result of milder
weather.
On 26 June 2007, BP, Associated British Foods and DuPont announced investment of
$400 million in the construction of a world-scale bioethanol plant with expected
annual production capacity of some 420 million litres from wheat feedstock, to
be commissioned in late 2009. On 29 June 2007, BP announced a joint venture with
D1 Oils plc, a UK-based global producer of biodiesel, for the development of
jatropha as a new energy crop.
Gas, Power and Renewables
-----------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
============================= ================
463 206 235 Profit before interest and tax(a) 441 701
(10) - (45) Inventory holding (gains) losses (45) 53
----------------------------- ----------------
Replacement cost profit before interest
453 206 190 and tax 396 754
============================= ================
By region:
188 48 (38) UK 10 116
(4) 7 (8) Rest of Europe (1) (3)
250 26 102 US 128 428
19 125 134 Rest of World 259 213
----------------------------- ----------------
453 206 190 396 754
============================= ================
Results include:
Non-operating items
107 7 (38) UK (31) 52
- - - Rest of Europe - -
(1) 1 1 US 2 (1)
- 1 1 Rest of World 2 -
----------------------------- ----------------
106 9 (36) (27) 51
============================= ================
(a) Profit from continuing operations and includes profit after interest and tax
of equity-accounted entities.
The replacement cost profit before interest and tax for the second quarter and
half year was $190 million and $396 million respectively, compared with $453
million and $754 million a year ago. Included in the result for the quarter was
a net charge for non-operating items of $36 million primarily arising from fair
value losses of $23 million on embedded derivatives related to long-term gas
contracts and an impairment charge.
The second quarter result decreased by 58% over the second quarter of 2006 and
the first half result was also lower. The results for both periods were impacted
by weaker contributions from the gas trading and marketing business, higher
expenditure in the Alternative Energy business and a negative impact in respect
of non-operating items.
Information on fair value accounting effects is set out on page 10.
In May, BP and Rio Tinto announced the formation of a new jointly owned company,
Hydrogen Energy, which will develop decarbonized energy projects around the
world. The venture will initially focus on hydrogen-fuelled power generation,
using fossil fuels and carbon capture and storage (CCS) technology to produce
new large-scale supplies of clean electricity.
Other Businesses and Corporate
--------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
========================= =================
(192) (115) (162) Profit (loss) before interest and tax(a) (277) (407)
(1) (1) (2) Inventory holding (gains) losses (3) (3)
------------------------- -----------------
Replacement cost profit (loss) before interest
(193) (116) (164) and tax (280) (410)
========================= =================
By region:
(80) (46) (25) UK (71) (221)
(46) 21 (2) Rest of Europe 19 (49)
(37) (114) (112) US (226) (141)
(30) 23 (25) Rest of World (2) 1
------------------------- -----------------
(193) (116) (164) (280) (410)
========================= =================
Results include:
Non-operating items
- - - UK - -
(1) 28 - Rest of Europe 28 (1)
10 6 7 US 13 19
17 - - Rest of World - 17
------------------------- -----------------
26 34 7 41 35
========================= =================
(a) Profit from continuing operations and includes profit after interest and tax
of equity-accounted entities.
Other businesses and corporate comprises Finance, the group's aluminium asset,
interest income and costs relating to corporate activities. The second quarter's
result includes a net gain of $7 million in respect of non-operating items.
Explanatory Note
--------------
Information on fair value accounting effects
BP uses derivative instruments to manage the economic exposure relating to
inventories above normal operating requirements of crude oil, natural gas and
petroleum products as well as certain contracts to supply physical volumes at
future dates. Under IFRS, these inventories and contracts are recorded at
historic cost and on an accruals basis respectively. The related derivative
instruments, however, are required to be recorded at fair value with gains and
losses recognized in income because hedge accounting is either not permitted or
not followed, principally due to the impracticality of effectiveness testing
requirements. Therefore, measurement differences in relation to recognition of
gains and losses occur. Gains and losses on these inventories and contracts are
not recognized until the commodity is sold in a subsequent accounting period.
Gains and losses on the related derivative commodity contracts are recognized in
the income statement from the time the derivative commodity contract is entered
into on a fair value basis using forward prices consistent with the contract
maturity.
IFRS requires that inventory held for trading be recorded at its fair value
using period end spot prices whereas any related derivative commodity
instruments are required to be recorded at values based on forward prices
consistent with the contract maturity. Depending on market conditions, these
forward prices can be either higher or lower than spot prices resulting in
measurement differences.
The Gas, Power and Renewables business enters into contracts for pipelines and
storage capacity which, under IFRS, are recorded on an accruals basis. These
contracts are risk managed using a variety of derivative instruments which are
fair valued under IFRS. This results in measurement differences in relation to
recognition of gains and losses.
The way that BP manages the economic exposures described above, and measures
performance internally, differs from the way these activities are measured under
IFRS. BP calculates this difference by comparing the IFRS result with
management's internal measure of performance, under which the inventory and the
supply and capacity contracts in question are valued based on fair value using
relevant forward prices prevailing at the end of the period. We believe that
disclosing management's estimate of this difference provides useful information
for investors because it enables investors to see the economic effect of these
activities as a whole. The impacts of fair value accounting effects, relative to
management's internal measure of performance, are shown in the table below.
Information for all quarters of 2005 and 2006 can be found at www.bp.com/FVAE.
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 $ million 2007 2006
======================= ===============
Refining and Marketing
Unrecognized gains (losses) brought forward from
406 157 750 previous period 157 283
(336) (750) (446) Unrecognized (gains) losses carried forward (446) (336)
----------------------- ---------------
Favourable/(unfavourable) impact relative to
70 (593) 304 management's measure of performance (289) (53)
======================= ===============
Gas, Power and Renewables
Unrecognized gains (losses) brought forward from
226 155 124 previous period 155 123
(376) (124) (198) Unrecognized (gains) losses carried forward (198) (376)
----------------------- ---------------
Favourable/(unfavourable) impact relative to
(150) 31 (74) management's measure of performance (43) (253)
======================= ===============
(80) (562) 230 (332) (306)
29 199 (80) Taxation(a) 119 108
======================= ===============
(51) (363) 150 (213) (198)
======================= ===============
By region
Refining and Marketing
7 (181) 83 UK (98) 25
41 (165) 48 Rest of Europe (117) 6
22 (219) 141 US (78) (76)
- (28) 32 Rest of World 4 (8)
----------------------- ---------------
70 (593) 304 (289) (53)
======================= ==============
Gas, Power and Renewables
- 38 (4) UK 34 36
- - - Rest of Europe - -
(147) (6) (71) US (77) (264)
(3) (1) 1 Rest of World - (25)
----------------------- ---------------
(150) 31 (74) (43) (253)
======================= ==============
(a) Tax is calculated using the quarter's effective tax rate on replacement cost
profit from continuing operations.
Cautionary Statement: The foregoing discussion contains forward looking
statements particularly those regarding capital expenditure, production and the
timing and anticipated production capacity of projects. By their nature, forward
looking statements involve risk and uncertainty 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 (including inflation); political stability and economic growth in
relevant areas of the world; changes in laws and governmental regulations and
quotas; exchange rate fluctuations; development and use of new technology; the
success or otherwise of partnering; the actions of competitors; natural
disasters and adverse weather conditions; changes in public expectations and
other changes to business conditions; wars and acts of terrorism or sabotage;
and other factors discussed in this Announcement. For more information you
should refer to our Annual Report and Accounts 2006 and our 2006 Annual Report
on Form 20-F filed with the US Securities and Exchange Commission.
Summarized Group Income Statement
------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
72,132 61,307 71,872 Sales and other operating revenues (Note 4) 133,179 135,420
Earnings from jointly controlled entities - after
818 333 910 interest and tax 1,243 1,391
114 163 173 Earnings from associates - after interest and tax 336 229
106 233 128 Interest and other revenues 361 304
------------------------- -----------------
73,170 62,036 73,083 Total revenues 135,119 137,344
541 680 1,309 Gain on sale of businesses and fixed assets 1,989 1,138
------------------------- -----------------
73,711 62,716 74,392 Total revenues and other income 137,108 138,482
50,427 42,660 49,983 Purchases 92,643 94,246
5,876 5,752 6,276 Production and manufacturing expenses 12,028 11,093
855 747 827 Production and similar taxes (Note 5) 1,574 1,787
2,309 2,519 2,535 Depreciation, depletion and amortization 5,054 4,493
Impairment and losses on sale of businesses and
79 223 455 fixed assets 678 102
97 156 155 Exploration expense 311 286
3,516 3,457 3,565 Distribution and administration expenses 7,022 6,612
(261) (155) (283) Fair value (gain) loss on embedded derivatives (438) 181
------------------------- -----------------
Profit before interest and taxation from
10,813 7,357 10,879 continuing operations 18,236 19,682
153 264 251 Finance costs (Note 6) 515 344
(46) (93) (96) Other finance income (Note 7) (189) (94)
------------------------- -----------------
10,706 7,186 10,724 Profit before taxation from continuing operations 17,910 19,432
3,441 2,440 3,283 Taxation 5,723 6,370
------------------------- -----------------
7,265 4,746 7,441 Profit from continuing operations 12,187 13,062
78 - - Profit (loss) from Innovene operations (Note 3) - (25)
------------------------- -----------------
7,343 4,746 7,441 Profit for the period 12,187 13,037
========================= =================
Attributable to:
7,266 4,664 7,376 BP shareholders 12,040 12,889
77 82 65 Minority interest 147 148
------------------------- -----------------
7,343 4,746 7,441 12,187 13,037
========================= =================
Earnings per share - cents
Profit for the period attributable to BP shareholders
35.94 24.06 38.37 Basic 62.43 63.34
35.59 23.94 38.18 Diluted 62.12 62.72
Profit from continuing operations attributable to
BP shareholders
35.57 24.06 38.37 Basic 62.43 63.47
35.21 23.94 38.18 Diluted 62.12 62.84
Summarized Group Balance Sheet
----------------------------
30 June 31 December
2007 2006
============================
$ million
Non-current assets
Property, plant and equipment 95,193 90,999
Goodwill 11,055 10,780
Intangible assets 5,735 5,246
Investments in jointly controlled entities 15,088 15,074
Investments in associates 5,849 5,975
Other investments 1,657 1,697
----------------------------
Fixed assets 134,577 129,771
Loans 864 817
Other receivables 926 862
Derivative financial instruments 2,950 3,025
Prepayments and accrued income 1,075 1,034
Defined benefit pension plan surplus 7,298 6,753
----------------------------
147,690 142,262
----------------------------
Current assets
Loans 163 141
Inventories 20,645 18,915
Trade and other receivables 39,847 38,692
Derivative financial instruments 7,234 10,373
Prepayments and accrued income 3,494 3,006
Current tax receivable 178 544
Cash and cash equivalents 2,643 2,590
----------------------------
74,204 74,261
Assets classified as held for sale - 1,078
----------------------------
74,204 75,339
----------------------------
Total assets 221,894 217,601
============================
Current liabilities
Trade and other payables 42,634 42,236
Derivative financial instruments 6,736 9,424
Accruals and deferred income 5,803 6,147
Finance debt 11,566 12,924
Current tax payable 4,637 2,635
Provisions 1,690 1,932
----------------------------
73,066 75,298
Liabilities directly associated with the assets classified as held for - 54
sale
----------------------------
73,066 75,352
----------------------------
Non-current liabilities
Other payables 1,240 1,430
Derivative financial instruments 3,888 4,203
Accruals and deferred income 1,001 961
Finance debt 12,188 11,086
Deferred tax liabilities 18,582 18,116
Provisions 13,070 11,712
Defined benefit pension plan and other
post-retirement benefit plan deficits 9,436 9,276
----------------------------
59,405 56,784
----------------------------
Total liabilities 132,471 132,136
----------------------------
Net assets 89,423 85,465
============================
Equity
BP shareholders' equity 88,549 84,624
Minority interest 874 841
----------------------------
89,423 85,465
============================
Group Statement of Recognized Income and Expense
------------------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
309 174 621 Currency translation differences 795 462
Exchange gain on translation of foreign operations
transferred to gain on sale of businesses and fixed
- (19) (128) assets (147) -
(44) (109) 6 Available-for-sale investments marked to market (103) 153
Available-for-sale investments - recycled to the
(79) - - income statement - (425)
230 28 13 Cash flow hedges marked to market 41 287
19 (60) (21) Cash flow hedges - recycled to the income statement (81) 76
- (7) - Cash flow hedges - recycled to the balance sheet (7) -
(15) (77) 105 Taxation 28 46
------------------------- -----------------
420 (70) 596 Net income (expense) recognized directly in equity 526 599
7,343 4,746 7,441 Profit for the period 12,187 13,037
------------------------- -----------------
7,763 4,676 8,037 Total recognized income and expense for the period 12,713 13,636
========================= =================
Attributable to:
7,686 4,578 7,967 BP shareholders 12,545 13,488
77 98 70 Minority interest 168 148
------------------------- -----------------
7,763 4,676 8,037 12,713 13,636
========================= =================
Movement in BP Shareholders' Equity
-------------------------------
$ million
Movement in BP shareholders' equity
At 31 December 2006 84,624
Profit for the period 12,040
Distribution to shareholders (3,984)
Currency translation differences (net of tax) 574
Exchange gain on translation of foreign operations transferred to gain on sale (net of tax) (147)
Share-based payments (net of tax) 616
Repurchase of ordinary share capital (4,993)
Available-for-sale investments (net of tax) (136)
Cash flow hedges (net of tax) (16)
Other (29)
----------
At 30 June 2007 88,549
==========
Summarized Group Cash Flow Statement
---------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Operating activities
10,706 7,186 10,724 Profit before taxation from continuing operations 17,910 19,432
Adjustments to reconcile profits before tax to net
cash provided by operating activities
13 55 60 Exploration expenditure written off 115 127
2,309 2,519 2,535 Depreciation, depletion and amortization 5,054 4,493
Impairment and (gain) loss on sale of businesses
(462) (457) (854) and fixed assets (1,311) (1,036)
(932) (496) (1,083) Earnings from jointly controlled entities and (1,579) (1,620)
associates
Dividends received from jointly controlled entities
268 229 813 and associates 1,042 1,279
(2,753) (1,058) (6,109) Working capital and other movements (7,167) (4,603)
------------------------- -----------------
9,149 7,978 6,086 Net cash provided by operating activities(a) 14,064 18,072
------------------------- -----------------
Investing activities
(3,412) (3,645) (4,334) Capital expenditure (7,979) (6,707)
- (1,087) (111) Acquisitions, net of cash acquired (1,198) -
(26) (9) (12) Investment in jointly controlled entities (21) (26)
(151) (44) (65) Investment in associates (109) (308)
1,899 310 836 Proceeds from disposal of fixed assets 1,146 2,383
Proceeds from disposal of businesses, net of cash
90 608 1,905 disposed 2,513 256
58 45 33 Proceeds from loan repayments 78 130
- - 374 Other 374 -
------------------------- -----------------
(1,542) (3,822) (1,374) Net cash used in investing activities (5,196) (4,272)
------------------------- -----------------
Financing activities
(4,411) (2,402) (1,918) Net repurchase of shares (4,320) (8,272)
514 1,358 1,513 Proceeds from long-term financing 2,871 910
(720) (1,134) (93) Repayments of long-term financing (1,227) (785)
941 (558) (1,499) Net increase (decrease) in short-term debt (2,057) 231
(1,894) (2,001) (1,983) Dividends paid - BP shareholders (3,984) (3,816)
(88) (64) (71) - Minority interest (135) (154)
------------------------- -----------------
(5,658) (4,801) (4,051) Net cash used in financing activities (8,852) (11,886)
------------------------- -----------------
Currency translation differences relating to cash
(36) 11 26 and cash equivalents 37 (22)
------------------------- -----------------
1,913 (634) 687 Increase (decrease) in cash and cash equivalents 53 1,892
2,939 2,590 1,956 Cash and cash equivalents at beginning of period 2,590 2,960
------------------------- -----------------
4,852 1,956 2,643 Cash and cash equivalents at end of period 2,643 4,852
========================= =================
(a) Operating cash flow is calculated from the starting point of profit before
taxation which includes inventory holding gains and losses. Operating cash
flow also reflects working capital movements including inventories, trade
and other receivables and trade and other payables. The carrying value of
these working capital items will change for various reasons, including
movements in oil, gas and products prices.
Summarized Group Cash Flow Statement
---------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Working capital and other movements
(122) (95) (93) Interest receivable (188) (252)
145 85 103 Interest received 188 291
153 264 251 Finance costs 515 344
(351) (333) (335) Interest paid (668) (661)
(46) (93) (96) Other finance income (189) (94)
122 75 107 Share-based payments 182 205
Net operating charge for pensions and other
(47) (87) (31) post-retirement benefits, less contributions (118) (97)
216 (157) (257) Net charge for provisions, less payments (414) 9
(2,351) (648) (683) (Increase) decrease in inventories (1,331) (1,343)
(Increase) decrease in other current and non-current
2,008 3,139 (621) assets 2,518 2,343
Increase (decrease) in other current and non-current
135 (2,000) (2,429) liabilities (4,429) 28
(2,615) (1,208) (2,025) Income taxes paid (3,233) (5,376)
------------------------- -----------------
(2,753) (1,058) (6,109) (7,167) (4,603)
========================= =================
Capital Expenditure and Acquisitions
-----------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
244 221 195 UK 416 426
74 87 108 Rest of Europe 195 143
1,190 1,050 1,453 US 2,503 2,211
1,476 1,638 1,874 Rest of World 3,512 2,904
------------------------- -----------------
2,984 2,996 3,630 6,626 5,684
------------------------- -----------------
Refining and Marketing
83 73 94 UK 167 144
101 1,210 266 Rest of Europe(a) 1,476 166
252 269 380 US 649 510
109 80 118 Rest of World 198 216
------------------------- -----------------
545 1,632 858 2,490 1,036
------------------------- -----------------
Gas, Power and Renewables
6 7 12 UK 19 7
7 7 3 Rest of Europe(a) 10 12
32 36 106 US 142 52
19 13 20 Rest of World 33 33
------------------------- -----------------
64 63 141 204 104
------------------------- -----------------
Other businesses and corporate
39 35 21 UK 56 58
- 2 - Rest of Europe 2 -
80 32 46 US 78 88
- - - Rest of World - -
------------------------- -----------------
119 69 67 136 146
------------------------- -----------------
3,712 4,760 4,696 9,456 6,970
========================= =================
By geographical area
372 336 322 UK 658 635
182 1,306 377 Rest of Europe 1,683 321
1,554 1,387 1,985 US 3,372 2,861
1,604 1,731 2,012 Rest of World 3,743 3,153
------------------------- -----------------
3,712 4,760 4,696 9,456 6,970
========================= =================
Included above:
- 1,113 332 Acquisitions and asset exchanges(a) 1,445 10
========================= =================
(a) First half 2007 includes $1,132 million for the acquisition of Chevron's
Netherlands manufacturing company.
Exchange rates
1.83 1.95 1.99 US dollar/sterling average rate for the period 1.97 1.79
1.81 1.96 2.00 US dollar/sterling period-end rate 2.00 1.81
1.26 1.31 1.35 US dollar/euro average rate for the period 1.33 1.23
1.25 1.33 1.35 US dollar/euro period-end rate 1.35 1.25
------------------------- -----------------
Analysis of Profit Before Interest and Tax
---------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
1,834 1,062 1,113 UK 2,175 2,999
393 720 183 Rest of Europe 903 696
2,255 1,663 2,037 US 3,700 4,559
3,345 2,609 3,561 Rest of World 6,170 6,389
------------------------- -----------------
7,827 6,054 6,894 12,948 14,643
------------------------- -----------------
Refining and Marketing
166 (64) 1,028 UK 964 11
785 481 1,029 Rest of Europe 1,510 1,471
1,526 289 1,631 US 1,920 2,354
515 423 293 Rest of World 716 1,194
------------------------- -----------------
2,992 1,129 3,981 5,110 5,030
------------------------- -----------------
Gas, Power and Renewables
188 48 (38) UK 10 116
(2) 7 (7) Rest of Europe - 5
257 24 124 US 148 425
20 127 156 Rest of World 283 155
------------------------- -----------------
463 206 235 441 701
------------------------- -----------------
Other businesses and corporate
(80) (46) (25) UK (71) (221)
(45) 21 (1) Rest of Europe 20 (46)
(37) (113) (111) US (224) (141)
(30) 23 (25) Rest of World (2) 1
------------------------- -----------------
(192) (115) (162) (277) (407)
------------------------- -----------------
11,090 7,274 10,948 18,222 19,967
(277) 83 (69) Consolidation adjustment 14 (285)
------------------------- -----------------
10,813 7,357 10,879 Total for continuing operations 18,236 19,682
------------------------- -----------------
Innovene operations
(90) - - UK - (145)
(40) - - Rest of Europe - (61)
(6) - - US - 1
48 - - Rest of World - 21
------------------------- -----------------
(88) - - Total for Innovene operations - (184)
------------------------- -----------------
10,725 7,357 10,879 Total for period 18,236 19,498
========================= =================
By geographical area
2,148 998 2,080 UK 3,078 2,920
1,059 1,245 1,213 Rest of Europe 2,458 2,054
3,717 1,932 3,622 US 5,554 6,962
3,889 3,182 3,964 Rest of World 7,146 7,746
------------------------- -----------------
10,813 7,357 10,879 Total for continuing operations 18,236 19,682
========================= =================
Analysis of Replacement Cost Profit Before Interest and Tax
------------------------------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
1,834 1,062 1,113 UK 2,175 2,999
393 720 183 Rest of Europe 903 696
2,254 1,652 2,038 US 3,690 4,565
3,345 2,609 3,559 Rest of World 6,168 6,389
------------------------- -----------------
7,826 6,043 6,893 12,936 14,649
------------------------- -----------------
Refining and Marketing
171 (10) 963 UK 953 23
584 298 584 Rest of Europe 882 1,148
749 122 964 US 1,086 1,386
352 428 229 Rest of World 657 911
------------------------- -----------------
1,856 838 2,740 3,578 3,468
------------------------- -----------------
Gas, Power and Renewables
188 48 (38) UK 10 116
(4) 7 (8) Rest of Europe (1) (3)
250 26 102 US 128 428
19 125 134 Rest of World 259 213
------------------------- -----------------
453 206 190 396 754
------------------------- -----------------
Other businesses and corporate
(80) (46) (25) UK (71) (221)
(46) 21 (2) Rest of Europe 19 (49)
(37) (114) (112) US (226) (141)
(30) 23 (25) Rest of World (2) 1
------------------------- -----------------
(193) (116) (164) (280) (410)
------------------------- -----------------
9,942 6,971 9,659 16,630 18,461
(277) 83 (69) Consolidation adjustment 14 (285)
------------------------- -----------------
9,665 7,054 9,590 Total for continuing operations 16,644 18,176
------------------------- -----------------
Innovene operations
(90) - - UK - (145)
(40) - - Rest of Europe - (61)
(6) - - US - 1
48 - - Rest of World - 21
------------------------- -----------------
(88) - - Total for Innovene operations - (184)
------------------------- -----------------
9,577 7,054 9,590 Total for period 16,644 17,992
========================= =================
By geographical area
2,153 1,052 2,015 UK 3,067 2,932
855 1,061 766 Rest of Europe 1,827 1,720
2,932 1,756 2,933 US 4,689 6,003
3,725 3,185 3,876 Rest of World 7,061 7,521
------------------------- -----------------
9,665 7,054 9,590 Total for continuing operations 16,644 18,176
========================= =================
Analysis of Non-operating Items
--------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
Exploration and Production
Impairment and gain (loss) on sale of businesses and
330 603 100 fixed assets 703 339
- - - Environmental and other provisions - -
- - - Restructuring, integration and rationalization costs - -
149 145 299 Fair value gain (loss) on embedded derivatives 444 (246)
- - - Other - -
------------------------- -----------------
479 748 399 1,147 93
------------------------- -----------------
Refining and Marketing
Impairment and gain (loss) on sale of businesses and
112 (179) 767 fixed assets 588 676
- - - Environmental and other provisions - -
- - - Restructuring, integration and rationalization costs - -
- - - Fair value gain (loss) on embedded derivatives - -
(576) (50) - Other (50) (576)
------------------------- -----------------
(464) (229) 767 538 100
------------------------- -----------------
Gas, Power and Renewables
Impairment and gain (loss) on sale of businesses and
(1) 2 (13) fixed assets (11) (1)
- - - Environmental and other provisions - -
- - - Restructuring, integration and rationalization costs - -
107 7 (23) Fair value gain (loss) on embedded derivatives (16) 52
- - - Other - -
------------------------- -----------------
106 9 (36) (27) 51
------------------------- -----------------
Other businesses and corporate
Impairment and gain (loss) on sale of businesses and
21 31 - fixed assets 31 22
- - - Environmental and other provisions - -
- - - Restructuring, integration and rationalization costs - -
5 3 7 Fair value gain (loss) on embedded derivatives 10 13
- - - Other - -
------------------------- -----------------
26 34 7 41 35
------------------------- -----------------
147 562 1,137 Total before taxation for continuing operations 1,699 279
(53) (199) (396) Taxation credit (charge)(a) (595) (99)
------------------------- -----------------
94 363 741 Total after taxation for continuing operations 1,104 180
------------------------- -----------------
Innovene operations
(88) - - Total before taxation for Innovene operations(b) - (184)
- - - Taxation credit (charge) - (7)
------------------------- -----------------
(88) - - Total after taxation for Innovene operations - (191)
------------------------- -----------------
6 363 741 Total after taxation for period 1,104 (11)
========================= =================
(a) Tax on non-operating items is calculated using the quarter's effective tax
rate on replacement cost profit from continuing operations.
(b) Includes the loss on remeasurement to fair value of $88 million in the
second quarter of 2006 and $184 million in the first half of 2006.
Realizations and Marker Prices
-------------------------
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= ================
Average realizations(a)
Liquids ($/bbl)(b)
66.61 55.42 63.82 UK 59.47 63.32
60.21 51.62 59.42 US 55.57 57.03
63.00 54.09 64.76 Rest of World 59.36 58.95
62.86 53.43 62.58 BP Average 57.96 59.36
========================= ================
Natural gas ($/mcf)
5.67 7.28 4.84 UK 6.19 6.92
5.44 5.76 5.94 US 5.85 6.17
3.54 3.90 3.56 Rest of World 3.74 3.73
4.44 4.86 4.45 BP Average 4.66 4.99
========================= ================
Average oil marker prices ($/bbl)
69.59 57.76 68.76 Brent 63.22 65.71
70.46 58.05 64.89 West Texas Intermediate 61.53 66.89
68.84 55.78 65.77 Alaska North Slope US West Coast 60.86 64.89
63.74 53.22 62.16 Mars 57.76 59.69
64.73 54.36 65.03 Urals (NWE- cif) 59.65 61.42
36.18 27.33 39.56 Russian domestic oil 33.48 35.73
========================= ================
Average natural gas marker prices
6.80 6.77 7.55 Henry Hub gas price ($/mmbtu)(c) 7.16 7.90
34.55 22.33 20.24 UK Gas - National Balancing Point (p/therm) 21.31 52.70
========================= ================
(a)Based on sales of consolidated subsidiaries only - this excludes equity-
accounted entities.
(b)Crude oil and natural gas liquids.
(c)Henry Hub First of the Month Index.
Notes
-----
1. Basis of preparation
BP prepares its Annual Report and Accounts on the basis of International
Financial Reporting Standards (IFRS) as adopted for use by the European
Union. The financial information presented herein has been prepared in
accordance with the accounting policies expected to be used in preparing
the Annual Report and Accounts 2007, which do not differ significantly
from those used for the Annual Report and Accounts 2006.
2. Changes to comparatives
In 2005 the basis of accounting for over-the-counter forward sale and
purchase contracts for oil, natural gas, NGLs and power was changed.
Certain transactions are now reported on a net basis in sales and other
operating revenues, whereas previously they had been reported gross in
sales and purchases. This change, while reducing sales and other operating
revenues and purchases, had no impact on reported profit, profit per
ordinary share, cash flow or the balance sheet.
During 2006, as part of a continuous process to review how individual contracts
are accounted for, certain other minor adjustments were identified that should
have been reflected in the restatement from gross to net presentation. Though
these adjustments are not significant to the group income statement, the
amendment has been made to bring the comparatives onto a consistent basis. The
comparative figures have been amended to reflect these items as set out below.
Amended Reported
----------------------------------
Second First Second First
Quarter Half Quarter Half
2006 2006 2006 2006
-----------------------------------
$ million
Sales and other operating revenues
Exploration and Production 13,495 27,413 13,495 27,413
Refining and Marketing 63,373 117,910 64,025 119,905
Gas, Power and Renewables 6,091 12,644 5,735 12,714
Other businesses and corporate 252 458 252 458
-----------------------------------
Sales by continuing operations 83,211 158,425 83,507 160,490
Less: sales between businesses 11,079 23,005 11,079 23,005
-----------------------------------
Third party sales of continuing operations 72,132 135,420 72,428 137,485
===================================
Purchases 50,427 94,246 50,723 96,311
===================================
3. Sale of Olefins and Derivatives business
The sale of Innovene, BP's olefins, derivatives and refining group, to
INEOS, was completed on 16 December 2005. The second quarter and first
half of 2006 include a loss on remeasurement to fair value of $88 million
and $184 million respectively.
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================== =================
$ million $ million
(88) - - Loss recognized on the remeasurement to - (184)
fair value
Taxation
166 - - Related to profit before tax - 166
- - - Related to remeasurement to fair value - (7)
-------------------------- -----------------
78 - - Profit/(loss) from Innovene operations - (25)
========================== =================
Earnings (loss) per share from Innovene
operations - cents
0.37 - - Basic - (0.13)
0.38 - - Diluted - (0.12)
========================== =================
Notes
-----
4. Sales and other operating revenues
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
By business
13,495 12,219 12,747 Exploration and Production 24,966 27,413
63,373 53,119 63,960 Refining and Marketing 117,079 117,910
6,091 5,613 5,403 Gas, Power and Renewables 11,016 12,644
252 206 178 Other businesses and corporate 384 458
------------------------- -----------------
83,211 71,157 82,288 153,445 158,425
11,079 9,850 10,416 Less: sales between businesses 20,266 23,005
------------------------- -----------------
72,132 61,307 71,872 Total third party sales 133,179 135,420
========================= =================
By geographical area
26,300 24,055 27,713 UK 51,768 54,033
19,406 16,588 19,064 Rest of Europe 35,652 37,780
27,054 23,034 26,825 US 49,859 49,120
19,067 16,844 18,273 Rest of World 35,117 37,442
------------------------- -----------------
91,827 80,521 91,875 172,396 178,375
19,695 19,214 20,003 Less: sales between areas 39,217 42,955
------------------------- -----------------
72,132 61,307 71,872 Total third party sales 133,179 135,420
========================= =================
5. Profit before interest and taxation is after charging:
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2005
========================= =================
$ million $ million
Production and similar taxes
72 67 - UK 67 307
783 680 827 Overseas 1,507 1,480
------------------------- -----------------
855 747 827 1,574 1,787
========================= =================
6. Finance costs
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
285 347 345 Interest payable 692 578
(132) (83) (94) Capitalized (177) (234)
------------------------- -----------------
153 264 251 515 344
========================= =================
Notes
-----
7. Other finance income
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Interest on pension and other post-retirement
484 538 546 benefit plan liabilities 1,084 955
Expected return on pension and other
(599) (698) (708) post-retirement benefit plan assets (1,406) (1,181)
------------------------- -----------------
(115) (160) (162) Interest net of expected return on plan assets (322) (226)
61 67 66 Unwinding of discount on provisions 133 115
Unwinding of discount on deferred consideration
8 - - for acquisition of investment in TNK-BP - 17
------------------------- -----------------
(46) (93) (96) (189) (94)
========================= =================
8. Analysis of changes in net debt
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= =================
$ million $ million
Opening balance
18,679 24,010 23,728 Finance debt 24,010 19,162
2,939 2,590 1,956 Less: Cash and cash equivalents 2,590 2,960
------------------------- -----------------
15,740 21,420 21,772 Opening net debt 21,420 16,202
------------------------- -----------------
Closing balance
19,286 23,728 23,754 Finance debt 23,754 19,286
4,852 1,956 2,643 Less: Cash and cash equivalents 2,643 4,852
------------------------- -----------------
14,434 21,772 21,111 Closing net debt 21,111 14,434
------------------------- -----------------
1,306 (352) 661 Decrease (increase) in net debt 309 1,768
========================= =================
Movement in cash and cash equivalents
1,949 (645) 661 (excluding exchange adjustments) 16 1,914
Net cash outflow (inflow) from financing
(734) 334 79 (excluding share capital) 413 (355)
60 (30) (51) Fair value hedge adjustment (81) 142
26 (11) (13) Other movements (24) 58
------------------------- -----------------
1,301 (352) 676 Movement in net debt before exchange effects 324 1,759
5 - (15) Exchange adjustments (15) 9
------------------------- -----------------
1,306 (352) 661 Decrease (increase) in net debt 309 1,768
========================= =================
Notes
-----
9. TNK-BP Operational and Financial Information
Second First Second
Quarter Quarter Quarter First Half
2006 2007 2007 2007 2006
========================= ======================
Production (Net of royalties) (BP share)
907 832 837 Crude oil (mb/d) 835 901
538 566 441 Natural gas (mmcf/d) 503 552
999 930 913 Total hydrocarbons (mboe/d)(a) 922 997
========================= ======================
$ million $ million
Income statement (BP share)
1,084 356 1,016 Profit before interest and tax 1,372 1,936
(45) (61) (64) Interest expense ... (125) (88)
(348) (103) (188) Taxation (291) (698)
(46) (30) (78) Minority interest (108) (87)
------------------------- ----------------------
645 162 686 Net Income 848 1,063
========================= ======================
... Excludes unwinding of discount on
8 - - consideration - 17
========================= ======================
Cash Flow
- - 500 Dividends received(b) 500 771
========================= ======================
Balance Sheet 30 June 31 December
2007 2006
======================
Investments in jointly controlled entities 8,193 8,353
======================
(a) Natural gas is converted to oil equivalent at 5.8 billion
cubic feet = 1 million barrels.
(b) First half 2006 includes $771 million declared in fourth
quarter 2005.
10. Third quarter results
BP's third quarter results will be announced on 23 October 2007.
11. Statutory accounts
The financial information shown in this publication is unaudited
and does not constitute statutory financial statements. The 2006 BP Annual
Report and Accounts have been filed with the Registrar of Companies; the
report of the auditors on those accounts was unqualified and did not
contain a statement under section 237(2) or section 237(3) of the
Companies Act 1985.
Contacts
--------
London United States
Press Office Roddy Kennedy Ronnie Chappell
+44 (0)20 7496 4624 +1 281 366 5174
Investor Relations Fergus MacLeod Rachael MacLean
+44 (0)20 7496 4717 +1 212 451 8072
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: 24 July, 2007 /s/ D. J. PEARL
..............................
D. J. PEARL
Deputy Company Secretary