2Q06 Part 2 of 2
BP PLC
25 July 2006
BP p.l.c. and Subsidiaries
Summarized Group Income Statement
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
Sales and other operating
58,320 65,057 72,428 revenues (Note 4) 137,485 110,666
Earnings from jointly
controlled entities - after
742 573 818 interest and tax 1,391 1,228
Earnings from associates -
101 115 114 after interest and tax 229 215
105 198 106 Interest and other revenues 304 271
---------------------- ----------------
59,268 65,943 73,466 Total revenues 139,409 112,380
Gain on sale of businesses
136 597 541 and fixed assets 1,138 1,298
---------------------- ----------------
59,404 66,540 74,007 Total revenues and other income 140,547 113,678
38,988 45,588 50,723 Purchases 96,311 73,032
Production and manufacturing
5,682 5,217 5,876 expenses 11,093 10,384
Production and similar taxes
697 932 855 (Note 5) 1,787 1,346
Depreciation, depletion and
2,232 2,184 2,308 amortization 4,492 4,379
Impairment and losses on sale
10 23 80 of businesses and fixed assets 103 196
139 189 97 Exploration expense (Note 5) 286 299
Distribution and administration
3,025 3,096 3,516 expenses 6,612 6,249
Fair value (gain) loss on
621 442 (261) embedded derivatives 181 743
---------------------- ----------------
Profit before interest and taxation
8,010 8,869 10,813 from continuing operations 19,682 17,050
128 191 153 Finance costs (Note 6) 344 300
Other finance (income) expense
35 (48) (46) (Note 7) (94) 65
---------------------- ----------------
Profit before taxation from
7,847 8,726 10,706 continuing operations 19,432 16,685
2,291 2,929 3,441 Taxation 6,370 4,770
---------------------- ----------------
Profit from continuing
5,556 5,797 7,265 operations 13,062 11,915
Profit (loss) from Innovene
104 (103) 78 operations (Note 3) (25) 408
---------------------- ----------------
5,660 5,694 7,343 Profit for the period 13,037 12,323
====================== ================
Attributable to:
5,591 5,623 7,266 BP shareholders 12,889 12,193
69 71 77 Minority interest 148 130
---------------------- ----------------
5,660 5,694 7,343 13,037 12,323
====================== ================
Earnings per share - cents
Profit for the period attributable
to BP shareholders
26.30 27.40 35.94 Basic 63.34 57.09
25.94 27.13 35.59 Diluted 62.72 56.30
Profit from continuing operations
attributable to BP shareholders
25.81 27.90 35.57 Basic 63.47 55.18
25.45 27.63 35.21 Diluted 62.84 54.42
Summarized Group Balance Sheet
30 June 31 December
2006 2005
=====================
$ million
Non-current assets
Property, plant and equipment 85,953 85,947
Goodwill 10,413 10,371
Other intangible assets 5,251 4,772
Investments in jointly controlled entities 15,711 13,556
Investments in associates 5,736 6,217
Other investments 592 967
---------------------
Fixed assets 123,656 121,830
Loans 854 821
Other receivables 842 770
Derivative financial instruments 3,789 3,652
Prepayments and accrued income 1,399 1,269
Defined benefit pension plan surplus 3,757 3,282
---------------------
134,297 131,624
---------------------
Current assets
Loans 118 132
Inventories 20,727 19,760
Trade and other receivables 38,639 40,902
Derivative financial instruments 9,103 9,726
Prepayments and accrued income 2,604 1,598
Current tax receivable 218 212
Cash and cash equivalents 4,852 2,960
---------------------
76,261 75,290
---------------------
Assets classified as held for sale 1,409 -
---------------------
Total assets 211,967 206,914
=====================
Current liabilities
Trade and other payables 43,323 42,136
Derivative financial instruments 8,538 9,083
Accruals and deferred income 6,149 5,970
Finance debt 9,648 8,932
Current tax payable 5,043 4,274
Provisions 1,282 1,102
---------------------
73,983 71,497
---------------------
Non-current liabilities
Other payables 1,783 1,935
Derivative financial instruments 3,634 3,696
Accruals and deferred income 3,957 3,164
Finance debt 9,638 10,230
Deferred tax liabilities 16,703 16,443
Provisions 10,395 9,954
Defined benefit pension plan and other
post-retirement benefit plan deficits 9,476 9,230
---------------------
55,586 54,652
---------------------
Liabilities directly associated with the assets
classified as held for sale 42 -
---------------------
Total liabilities 129,611 126,149
---------------------
Net assets 82,356 80,765
=====================
Equity
BP shareholders' equity 81,586 79,976
Minority interest 770 789
---------------------
82,356 80,765
=====================
Group Statement of Recognized Income and Expense
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
(1,646) 153 309 Currency translation differences 462 (2,398)
Available-for-sale investments
20 197 (44) marked to market 153 22
Available-for-sale investments -
- (346) (79) recycled to the income statement (425) (43)
(89) 57 230 Cash flow hedges marked to market 287 (149)
Cash flow hedges - recycled to
(4) 57 19 the income statement 76 (11)
(3) 61 (15) Taxation 46 53
---------------------- ----------------
Net income (expense) recognized
(1,722) 179 420 directly in equity 599 (2,526)
5,660 5,694 7,343 Profit for the period 13,037 12,323
---------------------- ----------------
Total recognized income and
3,938 5,873 7,763 expense relating to the period 13,636 9,797
====================== ================
Attributable to:
3,869 5,802 7,686 BP shareholders 13,488 9,667
69 71 77 Minority interest 148 130
---------------------- ----------------
3,938 5,873 7,763 13,636 9,797
====================== ================
Change in accounting policy -
adoption of IAS 32 and 39 on
1 January 2005 (wholly attributable
- - - to BP shareholders) - (243)
====================== ================
Movement in BP Shareholders' Equity
Movement in BP shareholders' equity $ million
At 31 December 2005 79,976
Profit for the period 12,889
Distribution to shareholders (3,816)
Currency translation differences (net of tax) 494
Repurchase of ordinary share capital (8,499)
Issue of ordinary share capital for employee share schemes 426
Purchase of shares by ESOP trusts (199)
Share-based payments (net of tax) 241
Available-for-sale investments (net of tax) (205)
Cash flow hedges (net of tax) 279
------
At 30 June 2006 81,586
======
Summarized Group Cash Flow Statement
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
Operating activities
Profit before taxation from
7,847 8,726 10,706 continuing operations 19,432 16,685
Adjustments to reconcile profits
before tax to net cash provided
by operating activities
47 114 13 Exploration expenditure written off 127 131
Depreciation, depletion and
2,232 2,184 2,308 amortization 4,492 4,379
Impairment and (gain) loss on sale
(126) (574) (461) of businesses and fixed assets (1,035) (1,102)
Earnings from jointly controlled
(843) (688) (932) entities and associates (1,620) (1,443)
Dividends received from jointly
controlled entities and
741 1,011 268 associates 1,279 1,096
Working capital and other
(2,691) (1,850) (2,753) movements (4,603) (3,577)
---------------------- ----------------
Net cash provided by operating
activities of continuing
7,207 8,923 9,149 operations 18,072 16,169
Net cash used in operating
activities of Innovene
(470) - - operations - (58)
---------------------- ----------------
Net cash provided by operating
6,737 8,923 9,149 activities 18,072 16,111
---------------------- ----------------
Investing activities
(2,911) (3,295) (3,412) Capital expenditure (6,707) (5,736)
Investment in jointly controlled
(36) - (26) entities (26) (51)
(186) (157) (151) Investment in associates (308) (285)
Proceeds from disposal of
425 484 1,899 fixed assets 2,383 1,752
Proceeds from disposal of
- 166 90 businesses 256 -
48 72 58 Proceeds from loan repayments 130 80
---------------------- ----------------
Net cash used in
(2,660) (2,730) (1,542) investing activities (4,272) (4,240)
---------------------- ----------------
Financing activities
(2,034) (3,861) (4,411) Net repurchase of shares (8,272) (3,967)
482 396 514 Proceeds from long-term financing 910 1,293
(1,011) (65) (720) Repayments of long-term financing (785) (3,203)
Net increase (decrease) in
149 (710) 941 short-term debt 231 (2,017)
(1,809) (1,922) (1,894) Dividends paid - BP shareholders (3,816) (3,632)
(15) (66) (88) - Minority interest (154) (335)
---------------------- ----------------
Net cash used in financing
(4,238) (6,228) (5,658) activities (11,886) (11,861)
---------------------- ----------------
Currency translation differences
relating to cash and cash
- 14 (36) equivalents (22) (9)
---------------------- ----------------
Increase (decrease) in cash
(161) (21) 1,913 and cash equivalents 1,892 1
Cash and cash equivalents at
1,521 2,960 2,939 beginning of period 2,960 1,359
---------------------- ----------------
Cash and cash equivalents at
1,360 2,939 4,852 end of period 4,852 1,360
====================== ================
Summarized Group Cash Flow Statement
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
Working capital and other movements
(102) (130) (122) Interest receivable (252) (165)
78 146 145 Interest received 291 112
128 191 153 Finance costs 344 300
(119) (310) (351) Interest paid (661) (451)
35 (48) (46) Other finance (income) expense (94) 65
79 83 122 Share-based payments 205 156
Net operating charge for pensions
and other post-retirement benefits,
(6) (50) (47) less contributions (97) (16)
Net charge for provisions,
507 (207) 216 less payments 9 444
(Increase) decrease in
(1,786) 1,008 (2,351) inventories (1,343) (2,583)
(Increase) decrease in other
(4,608) 335 2,008 current and non-current assets 2,343 (5,925)
Increase (decrease) in other
current and non-current
5,536 (107) 135 liabilities 28 7,903
(2,433) (2,761) (2,615) Income taxes paid (5,376) (3,417)
---------------------- ----------------
(2,691) (1,850) (2,753) (4,603) (3,577)
====================== ================
Capital Expenditure and Acquisitions
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
By business
Exploration and Production
213 182 244 UK 426 389
37 69 74 Rest of Europe 143 68
942 1,021 1,190 USA 2,211 1,939
1,289 1,428 1,476 Rest of World 2,904 2,386
---------------------- ----------------
2,481 2,700 2,984 5,684 4,782
---------------------- ----------------
Refining and Marketing
97 61 83 UK 144 140
111 65 101 Rest of Europe 166 178
219 258 252 USA 510 409
118 107 109 Rest of World 216 164
---------------------- ----------------
545 491 545 1,036 891
---------------------- ----------------
Gas,Power and Renewables
16 1 6 UK 7 17
6 5 7 Rest of Europe 12 7
19 20 32 USA 52 32
10 14 19 Rest of World 33 16
---------------------- ----------------
51 40 64 104 72
---------------------- ----------------
Other businesses and corporate
82 19 39 UK 58 157
58 - - Rest of Europe - 78
53 8 80 USA 88 117
4 - - Rest of World - 5
---------------------- ----------------
197 27 119 146 357
---------------------- ----------------
3,274 3,258 3,712 6,970 6,102
====================== ================
By geographical area
408 263 372 UK 635 703
212 139 182 Rest of Europe 321 331
1,233 1,307 1,554 USA 2,861 2,497
1,421 1,549 1,604 Rest of World 3,153 2,571
---------------------- ----------------
3,274 3,258 3,712 6,970 6,102
====================== ================
Included above:
66 10 - Acquisitions and asset exchanges 10 151
125 - - Innovene operations - 254
====================== ================
Exchange rates
US dollar/sterling average rate
1.86 1.75 1.83 for the period 1.79 1.87
1.80 1.75 1.81 US dollar/sterling period-end rate 1.81 1.80
US dollar/euro average rate for
1.26 1.20 1.26 the period 1.23 1.28
1.21 1.21 1.25 US dollar/euro period-end rate 1.25 1.21
---------------------- ----------------
Analysis of Profit Before Interest and Tax
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
By business
Exploration and Production
574 1,165 1,834 UK 2,999 1,485
294 303 393 Rest of Europe 696 1,622
2,441 2,304 2,255 USA 4,559 4,449
2,595 3,044 3,345 Rest of World 6,389 4,837
---------------------- ----------------
5,904 6,816 7,827 14,643 12,393
---------------------- ----------------
Refining and Marketing
(74) (155) 166 UK 11 (325)
982 686 785 Rest of Europe 1,471 1,817
679 828 1,526 USA 2,354 2,104
345 679 515 Rest of World 1,194 689
---------------------- ----------------
1,932 2,038 2,992 5,030 4,285
---------------------- ----------------
Gas, Power and Renewables
125 (72) 188 UK 116 243
(8) 7 (2) Rest of Europe 5 (2)
51 168 257 USA 425 227
7 135 20 Rest of World 155 133
---------------------- ----------------
175 238 463 701 601
---------------------- ----------------
Other businesses and corporate
(209) (141) (80) UK (221) (388)
30 (1) (45) Rest of Europe (46) 34
(13) (104) (37) USA (141) (22)
36 31 (30) Rest of World 1 49
---------------------- ----------------
(156) (215) (192) (407) (327)
---------------------- ----------------
7,855 8,877 11,090 19,967 16,952
(4) (8) (277) Unrealized profit in inventory (285) (157)
Net profit on transactions between
159 - - continuing and Innovene operations - 255
---------------------- ----------------
8,010 8,869 10,813 Total for continuing operations 19,682 17,050
---------------------- ----------------
Innovene operations
164 (55) (90) UK (145) 222
129 (21) (40) Rest of Europe (61) 495
(16) 7 (6) USA 1 96
16 (27) 48 Rest of World 21 12
---------------------- ----------------
293 (96) (88) (184) 825
Net profit on transactions between
(159) - - continuing and Innovene operations - (255)
---------------------- ----------------
134 (96) (88) Total for Innovene operations (184) 570
---------------------- ----------------
8,144 8,773 10,725 Total for period 19,498 17,620
====================== ================
By geographical area
463 772 2,148 UK 2,920 1,068
1,406 995 1,059 Rest of Europe 2,054 3,652
3,158 3,245 3,717 USA 6,962 6,622
2,983 3,857 3,889 Rest of World 7,746 5,708
---------------------- ----------------
8,010 8,869 10,813 Total for continuing operations 19,682 17,050
====================== ================
Analysis of Replacement Cost Profit
Before Interest and Tax
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
By business
Exploration and Production
574 1,165 1,834 UK 2,999 1,485
294 303 393 Rest of Europe 696 1,622
2,438 2,311 2,254 USA 4,565 4,441
2,595 3,044 3,345 Rest of World 6,389 4,837
---------------------- ----------------
5,901 6,823 7,826 14,649 12,385
---------------------- ----------------
Refining and Marketing
(60) (148) 171 UK 23 (332)
658 564 584 Rest of Europe 1,148 1,081
361 637 749 USA 1,386 1,360
314 559 352 Rest of World 911 575
---------------------- ----------------
1,273 1,612 1,856 3,468 2,684
---------------------- ----------------
Gas, Power and Renewables
125 (72) 188 UK 116 243
(1) 1 (4) Rest of Europe (3) 5
55 178 250 USA 428 222
10 194 19 Rest of World 213 131
---------------------- ----------------
189 301 453 754 601
---------------------- ----------------
Other businesses and corporate
(209) (141) (80) UK (221) (388)
30 (3) (46) Rest of Europe (49) 34
(13) (104) (37) USA (141) (22)
36 31 (30) Rest of World 1 49
---------------------- ----------------
(156) (217) (193) (410) (327)
---------------------- ----------------
7,207 8,519 9,942 18,461 15,343
(4) (8) (277) Unrealized profit in inventory (285) (157)
Net profit on transactions between
159 - - continuing and Innovene operations - 255
---------------------- ----------------
7,362 8,511 9,665 Total for continuing operations 18,176 15,441
---------------------- ----------------
Innovene operations
152 (55) (90) UK (145) 139
120 (21) (40) Rest of Europe (61) 425
42 7 (6) USA 1 132
17 (27) 48 Rest of World 21 17
---------------------- ----------------
331 (96) (88) (184) 713
Net profit on transactions between
(159) - - continuing and Innovene operations - (255)
---------------------- ----------------
172 (96) (88) Total for Innovene operations (184) 458
---------------------- ----------------
7,534 8,415 9,577 Total for period 17,992 15,899
====================== ================
By geographical area
477 779 2,153 UK 2,932 1,062
1,089 865 855 Rest of Europe 1,720 2,923
2,841 3,071 2,932 USA 6,003 5,869
2,955 3,796 3,725 Rest of World 7,521 5,587
---------------------- ----------------
7,362 8,511 9,665 Total for continuing operations 18,176 15,441
====================== ================
Analysis of Non-operating Items
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
By business
Exploration and Production
(678) (394) 386 UK (8) (968)
3 - 83 Rest of Europe 83 1,030
(3) 2 9 USA 11 (4)
26 6 1 Rest of World 7 70
---------------------- ----------------
(652) (386) 479 93 128
---------------------- ----------------
Refining and Marketing
(23) 20 (1) UK 19 (15)
(12) 229 (29) Rest of Europe 200 (11)
(634) 96 (446) USA (350) (629)
11 219 12 Rest of World 231 (30)
---------------------- ----------------
(658) 564 (464) 100 (685)
---------------------- ----------------
Gas, Power and Renewables
66 (55) 107 UK 52 171
- - - Rest of Europe - -
21 - (1) USA (1) 21
- - - Rest of World - -
---------------------- ----------------
87 (55) 106 51 192
---------------------- ----------------
Other businesses and corporate
(6) - - UK - (48)
12 - (1) Rest of Europe (1) 11
11 9 10 USA 19 7
- - 17 Rest of World 17 -
---------------------- ----------------
17 9 26 35 (30)
---------------------- ----------------
Total before taxation for continuing
(1,206) 132 147 operations 279 (395)
384 (46) (53) Taxation credit (charge) (99) 129
---------------------- ----------------
Total after taxation for continuing
(822) 86 94 operations 180 (266)
---------------------- ----------------
Innovene operations
- (55) (90) UK (145) (24)
- (21) (40) Rest of Europe (61) -
- 7 (6) USA 1 -
- (27) 48 Rest of World 21 -
---------------------- ----------------
Total before taxation for Innovene
- (96) (88) operations (a) (184) (24)
- (7) - Taxation credit (charge) (7) 10
---------------------- ----------------
Total after taxation for Innovene
- (103) (88) operations (191) (14)
---------------------- ----------------
(822) (17) 6 Total after taxation for period (11) (280)
====================== ================
(a) Includes the loss on re-measurement to fair value of $88 million in
the second quarter of 2006 and $96 million in the first quarter of
2006 and impairment charges of $24 million in the first quarter of
2005.
Depreciation of Fixed Asset Revaluation Adjustment
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
Exploration and Production
12 8 7 UK 15 20
70 55 48 USA 103 146
3 5 4 Rest of World 9 8
---------------------- ----------------
85 68 59 127 174
---------------------- ----------------
Refining and Marketing
26 25 25 USA 50 51
---------------------- ----------------
26 25 25 50 51
---------------------- ----------------
Gas, Power and Renewables
5 6 5 USA 11 11
---------------------- ----------------
5 6 5 11 11
---------------------- ----------------
Total depreciation of revaluation
116 99 89 adjustment (a)(b) 188 236
====================== ================
(a) Relates to the revaluation adjustment consequent upon the ARCO
acquisition.
(b) Excludes impairment of the revaluation adjustment which is included in
non-operating items.
Net Debt Ratio - Net Debt: Net Debt + Equity
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
$ million $ million
19,302 18,679 19,286 Gross debt 19,286 19,302
1,360 2,939 4,852 Cash and cash equivalents 4,852 1,360
---------------------- ----------------
17,942 15,740 14,434 Net debt 14,434 17,942
====================== ================
80,097 80,881 82,356 Equity 82,356 80,097
18% 16% 15% Net debt ratio 15% 18%
====================== ================
Production and Realizations
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= =============
Production (a)(d)
Crude oil (mb/d) (net of royalties)
290 268 264 UK 266 289
73 64 60 Rest of Europe 62 74
546 444 444 USA 444 553
1,528 1,584 1,587 Rest of World 1,586 1,505
---------------------- ----------------
2,437 2,360 2,355 Total crude oil production 2,358 2,421
====================== ================
Natural gas liquids (mb/d)
(net of royalties)
20 13 16 UK 14 18
4 4 3 Rest of Europe 4 5
127 122 121 USA 122 131
31 34 35 Rest of World 35 31
---------------------- ----------------
182 173 176 Total natural gas liquids production 174 185
====================== ================
Liquids (b) (mb/d) (net of royalties)
310 281 280 UK 280 307
77 68 64 Rest of Europe 65 79
673 566 565 USA 566 684
1,559 1,618 1,622 Rest of World 1,620 1,536
---------------------- ----------------
2,619 2,533 2,531 Total liquids production 2,532 2,606
====================== ================
Natural gas (mmcf/d) (net of royalties)
1,136 1,196 911 UK 1,053 1,189
106 94 83 Rest of Europe 88 114
2,727 2,485 2,493 USA 2,489 2,688
4,692 4,938 5,138 Rest of World 5,038 4,712
---------------------- ----------------
8,661 8,713 8,624 Total natural gas production 8,668 8,703
====================== ================
Average realizations(c)
Crude oil ($/bbl)
48.76 60.57 67.82 UK 64.19 47.16
49.27 58.27 65.37 USA 61.84 46.21
44.57 56.18 64.90 Rest of World 60.46 43.08
47.79 58.25 65.96 BP Average 62.08 45.60
====================== ================
Natural gas liquids ($/bbl)
34.34 48.19 46.33 UK 47.16 32.30
28.04 33.25 37.32 USA 35.33 27.50
33.77 37.05 35.18 Rest of World 36.10 32.47
29.86 35.47 37.80 BP Average 36.66 28.99
====================== ================
Liquids ($/bbl)(b)
47.83 60.00 66.61 UK 63.32 46.27
45.92 53.79 60.21 USA 57.03 43.21
43.94 55.02 63.00 Rest of World 58.95 42.43
45.95 55.88 62.86 BP Average 59.36 43.85
====================== ================
Natural gas ($/mcf)
4.82 7.87 5.67 UK 6.92 5.21
5.83 6.91 5.44 USA 6.17 5.57
3.20 3.94 3.54 Rest of World 3.73 3.15
4.38 5.54 4.44 BP Average 4.99 4.32
====================== ================
(a) Includes BP's share of production of equity-accounted entities.
(b) Crude oil and natural gas liquids.
(c) Based on sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
(d) Because of rounding, some totals may not agree exactly with the sum of
their component parts.
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 (EU). The financial information presented herein
has been prepared in accordance with the accounting policies expected
to be used in preparing Annual Report and Accounts 2006, which do not
differ significantly from those used for Annual Report and Accounts
2005.
2. Resegmentation and other changes to comparatives
With effect from 1 January 2006 the following changes to the business
segment boundaries have been implemented:
(a) Following the sale of Innovene to INEOS in December 2005, the
transfer of three equity-accounted entities (Shanghai SECCO
Petrochemical Company Limited in China and Polyethylene Malaysia
Sdn Bhd (PEMSB) and Ethylene Malaysia Sdn Bhd (EMSB), both in
Malaysia), previously reported in Other businesses and corporate,
to Refining and Marketing.
(b) The formation of BP Alternative Energy in November 2005 has
resulted in the transfer of certain mid-stream assets and
activities to Gas, Power and Renewables:
• South Houston Green Power (SHGP) co-generation facility (in
Texas City refinery) from Refining and Marketing.
• Watson Cogeneration (in Carson City refinery) from Refining and
Marketing.
• Phu My Phase 3 CCGT plant in Vietnam from Exploration and
Production.
(c) The transfer of Hydrogen for Transport activities from Gas, Power
and Renewables to Refining and Marketing.
Comparative financial data is shown after these changes.
Restated Reported
-----------------------------------------
Second First Second First
Quarter Half Quarter Half
2005 2005 2005 2005
-----------------------------------------
$ million
Profit before interest
and tax
Exploration and
Production 5,904 12,393 5,906 12,397
Refining and Marketing 1,932 4,285 1,950 4,313
Gas, Power and Renewables 175 601 160 578
Other businesses and
corporate (156) (327) (161) (336)
-----------------------------------------
Profit before interest
and tax 7,855 16,952 7,855 16,952
Unrealized profit in
inventory (4) (157) (4) (157)
Net profit on transactions
between continuing and
Innovene operations 159 255 159 255
-----------------------------------------
8,010 17,050 8,010 17,050
=========================================
In 2005 the basis of accounting for over-the-counter forward sale and
purchase contracts for oil, natural gas, NGLs and power was changed.
These 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 have been
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.
Notes
2. Resegmentation and other changes to comparatives (concluded)
Amended Reported
--------------------------------------------------
First Second First First Second First
Quarter Quarter Half Quarter Quarter Half
2006 2005 2005 2006 2005 2005
--------------------------------------------------
$ million
Sales and other
operating revenues
Exploration and
Production 13,918 10,934 21,120 13,918 10,934 21,120
Refining and Marketing 55,880 53,164 99,173 56,605 55,115 102,877
Gas, Power and Renewables 6,979 5,817 12,278 8,279 6,250 13,355
Other businesses and
corporate 206 174 346 206 174 346
--------------------------------------------------
Sales by continuing
operations 76,983 70,089 132,917 79,008 72,473 137,698
Less: sales between
businesses 11,926 7,843 16,212 11,926 7,843 16,212
sales to continuing
operations - 3,926 6,039 - 3,926 6,039
--------------------------------------------------
Third party sales of
continuing operations 65,057 58,320 110,666 67,082 60,704 115,447
==================================================
Purchases 45,588 38,988 73,032 47,613 41,372 77,813
==================================================
Notes
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 Innovene operations represented a separate major line of business
for BP. As a result of the sale, these operations were treated as
discontinued operations for the year ended 31 December 2005. A single
amount was shown on the face of the income statement comprising the
post-tax result of discontinued operations and the post-tax loss
recognized on the remeasurement to fair value less costs to sell of the
discontinued operation. That is, the income and expenses of Innovene
were reported separately from the continuing operations of the BP
group. The table below provides further detail of the amount shown on
the income statement.
In the cash flow statement the cash provided by the operating
activities of Innovene in 2005 has been separated from that of the rest
of the group and reported as a single line item.
Second quarter 2006 includes a loss before tax of $88 million related
to post-closing adjustments. There was a similar adjustment of $96
million in the first quarter of 2006. We anticipate further
adjustments during the second half of 2006.
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
Profit before tax from
293 - - Innovene operations - 825
Net profit on transactions
between continuing and
(159) - - Innovene operations - (255)
----------------------- --------------
Profit before interest and
134 - - taxation - 570
1 - - Other finance income (expense) - 2
(Loss) gain recognized on the
- (96) (88) remeasurement to fair value (184) -
----------------------- --------------
135 (96) (88) (184) 572
Taxation
(31) - 166 Related to profit before tax 166 (164)
Related to remeasurement to
- (7) - fair value (7) -
----------------------- --------------
Profit (loss) from Innovene
104 (103) 78 operations (25) 408
======================= ==============
Earnings (loss) per share from
Innovene operations - cents
0.49 (0.50) 0.37 Basic (0.13) 1.91
0.49 (0.50) 0.38 Diluted (0.12) 1.88
======================= ==============
The net cash flows of Innovene
operations are presented below
Net cash used in operating
(470) - - activities - (58)
Net cash used in investing
(105) - - activities - (264)
----------------------- --------------
Net cash provided by
575 - - financing activities - 322
======================= ==============
Notes
4. Sales and other operating revenues
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
By business
10,934 13,918 13,495 Exploration and Production 27,413 21,120
53,164 55,880 64,025 Refining and Marketing 119,905 99,173
5,817 6,979 5,735 Gas, Power and Renewables 12,714 12,278
174 206 252 Other businesses and corporate 458 346
----------------------- ---------------
Sales by continuing
70,089 76,983 83,507 operations 160,490 132,917
7,843 11,926 11,079 Less: sales between businesses 23,005 16,212
sales to Innovene
3,926 - - operations - 6,039
----------------------- ---------------
Third party sales of
58,320 65,057 72,428 continuing operations 137,485 110,666
5,951 - - Innovene sales - 11,294
Less: sales to continuing
2,605 - - operations - 4,139
----------------------- ---------------
Third party sales of
3,346 - - Innovene operations - 7,155
----------------------- ---------------
61,666 65,057 72,428 Total third party sales 137,485 117,821
======================= ===============
By geographical area
24,340 27,865 26,288 UK 54,153 43,148
16,916 18,374 19,406 Rest of Europe 37,780 32,740
24,403 23,703 27,962 USA 51,665 46,414
14,247 18,375 18,467 Rest of World 36,842 26,972
----------------------- ---------------
Sales by continuing
79,906 88,317 92,123 operations 180,440 149,274
17,660 23,260 19,695 Less: sales between areas 42,955 32,569
sales to Innovene
3,926 - - operations - 6,039
----------------------- ---------------
58,320 65,057 72,428 137,485 110,666
======================= ===============
5. Profit before interest and taxation is after charging:
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
Exploration expense
13 7 - UK 7 18
- - - Rest of Europe - 1
85 66 55 USA 121 188
41 116 42 Rest of World 158 92
----------------------- ---------------
139 189 97 286 299
======================= ===============
Production and similar taxes
153 235 72 UK 307 267
544 697 783 Overseas 1,480 1,079
----------------------- ---------------
697 932 855 1,787 1,346
======================= ===============
Notes
6. Finance costs
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
204 293 285 Interest payable 578 395
(76) (102) (132) Capitalized (234) (152)
----------------------- ---------------
128 191 153 344 243
Early redemption of finance
- - - leases - 57
----------------------- ---------------
128 191 153 344 300
======================= ===============
7. Other finance (income) expense
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
Interest on pension and other
post-retirement benefit plan
509 471 484 liabilities 955 1,023
Expected return on pension and
other post-retirement benefit
(542) (582) (599) plan assets (1,181) (1,089)
----------------------- ---------------
Interest net of expected return
(33) (111) (115) on plan assets (226) (66)
Unwinding of discount on
50 54 61 provisions 115 95
Unwinding of discount on deferred
consideration for acquisition
17 9 8 of investment in TNK-BP 17 34
----------------------- ---------------
34 (48) (46) (94) 63
1 - - Innovene operations - 2
----------------------- ---------------
35 (48) (46) Continuing operations (94) 65
======================= ===============
8. Dividends paid
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
Dividends per ordinary share
8.50 9.375 9.375 Cents 18.75 17.0
4.450 5.288 5.251 Pence 10.539 8.972
51.0 56.25 56.25 Dividends per ADS (cents) 112.50 102.0
======================= ===============
Notes
9. Analysis of changes in net debt
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
$ million $ million
Opening balance
19,564 19,162 18,679 Finance debt 19,162 23,091
1,521 2,960 2,939 Less: Cash and cash equivalents 2,960 1,359
----------------------- ---------------
18,043 16,202 15,740 Opening net debt 16,202 21,732
----------------------- ---------------
Closing balance
19,302 18,679 19,286 Finance debt 19,286 19,302
1,360 2,939 4,852 Less: Cash and cash equivalents 4,852 1,360
----------------------- ---------------
17,942 15,740 14,434 Closing net debt 14,434 17,942
----------------------- ---------------
101 462 1,306 Decrease (increase) in net debt 1,768 3,790
======================= ===============
Movement in cash and cash
equivalents (excluding
(161) (35) 1,949 exchange adjustments) 1,914 10
Net cash outflow (inflow)
from financing (excluding
380 379 (734) share capital) (355) 3,927
- - - Adoption of IAS 39 - (147)
17 82 60 Fair value hedge adjustment 142 115
53 32 26 Other movements 58 102
----------------------- ---------------
Movement in net debt before
289 458 1,301 exchange effects 1,759 4,007
(188) 4 5 Exchange adjustments 9 (217)
----------------------- ---------------
101 462 1,306 Decrease (increase) in net debt 1,768 3,790
======================= ===============
Notes
10. TNK-BP Operational and Financial Information
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
Production (Net of royalties)
(BP share)
903 896 907 Crude oil (mb/d) 901 889
429 567 538 Natural gas (mmcf/d) 552 477
977 994 999 Total hydrocarbons (mboe/d)(a) 997 971
======================= ==============
$ million $ million
Income statement (BP share)
920 852 1,084 Profit before interest and tax 1,936 1,535
(32) (43) (45) Interest expense * (88) (61)
(227) (350) (348) Taxation (698) (394)
(20) (41) (46) Minority interest (87) (28)
----------------------- ---------------
641 418 645 Net Income 1,063 1,052
======================= ==============
* Excludes unwinding of
discount on deferred
17 9 8 consideration 17 34
======================= ==============
Cash Flow
425 771 - Dividends received 771 675
======================= ==============
Second First Second
Quarter Quarter Quarter First Half
2005 2006 2006 2006 2005
======================= ==============
Average oil marker prices ($/bbl)
48.08 58.15 64.73 Urals (NWE - cif) 61.42 45.31
48.49 58.26 64.84 Urals (Med - cif) 61.52 45.85
27.39 35.27 36.18 Domestic Oil 35.73 23.27
======================= ==============
Balance sheet 30 June 31 December
2006 2005
=======================
Investments in jointly controlled entities 9,151 8,089
=======================
Deferred consideration
Due within one year 1,244 1,227
Due after more than one year - -
-----------------------
1,244 1,227
=======================
(a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet
= 1 million barrels.
As reported in previous quarters, various TNK-BP companies have received tax
notifications. Upon entering into the joint venture arrangement, each party
received indemnities from its co-venturers in respect of historical tax
liabilities related to assets contributed to the joint venture. BP believes its
provisions are adequate for its share of any liabilities arising from tax claims
not covered by these indemnities.
Notes
11. Equity-accounted entities
The group's profit for the period includes the following in respect of
equity-accounted entities.
RC profit Profit
(loss) Inventory (loss)
before holding before
interest gains interest
and tax (losses) and tax
---------------------------------------
$ million
Second Quarter 2006
Exploration and Production 1,369 - 1,369
Refining and Marketing 106 3 109
Gas, Power and Renewables 55 - 55
Other businesses and corporate 1 - 1
---------------------------------------
Continuing operations 1,531 3 1,534
Innovene operations - - -
---------------------------------------
1,531 3 1,534
=======================================
First Quarter 2006
Exploration and Production 1,149 - 1,149
Refining and Marketing 95 6 101
Gas, Power and Renewables 29 - 29
Other businesses and corporate (2) - (2)
---------------------------------------
Continuing operations 1,271 6 1,277
Innovene operations - - -
---------------------------------------
1,271 6 1,277
=======================================
Second Quarter 2005
Exploration and Production 1,161 - 1,161
Refining and Marketing 67 (15) 52
Gas, Power and Renewables 18 - 18
Other businesses and corporate - - -
---------------------------------------
Continuing operations 1,246 (15) 1,231
Innovene operations 3 - 3
---------------------------------------
1,249 (15) 1,234
=======================================
Half Year 2006
Exploration and Production 2,518 - 2,518
Refining and Marketing 201 9 210
Gas, Power and Renewables 84 - 84
Other businesses and corporate (1) - (1)
---------------------------------------
Continuing operations 2,802 9 2,811
Innovene operations - - -
---------------------------------------
2,802 9 2,811
=======================================
Half Year 2005
Exploration and Production 2,000 - 2,000
Refining and Marketing 142 (19) 123
Gas, Power and Renewables 25 - 25
Other businesses and corporate - - -
---------------------------------------
Continuing operations 2,167 (19) 2,148
Innovene operations 3 - 3
---------------------------------------
2,170 (19) 2,151
=======================================
Notes
11. Equity-accounted entities (continued)
Profit
(loss)
Minority for the
Interest Tax interest period
----------------------------------------
$ million
Second Quarter 2006
Exploration and Production (78) (436) (46) 809
Refining and Marketing (19) (13) - 77
Gas, Power and Renewables (6) (4) - 45
Other businesses and corporate - - - 1
---------------------------------------
Continuing operations (103) (453) (46) 932
Innovene operations - - - -
---------------------------------------
(103) (453) (46) 932
=======================================
First Quarter 2006
Exploration and Production (72) (439) (41) 597
Refining and Marketing (19) (10) - 72
Gas, Power and Renewables (4) (4) - 21
Other businesses and corporate - - - (2)
---------------------------------------
Continuing operations (95) (453) (41) 688
Innovene operations - - - -
---------------------------------------
(95) (453) (41) 688
=======================================
Second Quarter 2005
Exploration and Production (56) (289) (20) 796
Refining and Marketing (6) (13) - 33
Gas, Power and Renewables (3) (1) - 14
Other businesses and corporate - - - -
---------------------------------------
Continuing operations (65) (303) (20) 843
Innovene operations - - - 3
---------------------------------------
(65) (303) (20) 846
=======================================
Half Year 2006
Exploration and Production (150) (875) (87) 1,406
Refining and Marketing (38) (23) - 149
Gas, Power and Renewables (10) (8) - 66
Other businesses and corporate - - - (1)
---------------------------------------
Continuing operations (198) (906) (87) 1,620
Innovene operations - - - -
---------------------------------------
(198) (906) (87) 1,620
=======================================
Half Year 2005
Exploration and Production (108) (516) (28) 1,348
Refining and Marketing (14) (31) - 78
Gas, Power and Renewables (5) (3) - 17
Other businesses and corporate - - - -
---------------------------------------
Continuing operations (127) (550) (28) 1,443
Innovene operations - - - 3
---------------------------------------
(127) (550) (28) 1,446
=======================================
Notes
12. Third quarter results
BP's third quarter results will be announced on 24 October 2006.
13. Statutory accounts
The financial information shown in this publication is unaudited and
does not constitute statutory accounts. The 2005 Annual Report and
Accounts have been delivered to the UK Registrar of Companies; the
report of the auditors on those accounts (in accordance with section
235 of the Companies Act 2005) was unqualified.
Contacts
London United States
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+44 (0)20 7496 4624 +1 281 366 5174
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http://www.bp.com/investors
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