3Q07 part 1 of 2
BP PLC
23 October 2007
BP p.l.c.
Group Results
Third Quarter 2007
London 23 October 2007
FOR IMMEDIATE RELEASE
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006 %
========================== =========================
6,231 7,376 4,406 Profit for the period* 16,446 19,120
744 (1,289) (539) Inventory holding (gains) losses (2,131) (762)
-------------------------- -------------------------
6,975 6,087 3,867 Replacement cost profit 14,315 18,358 (22)
========================== =========================
18.76 15.96 9.94 - per ordinary share (pence) 37.44 50.01
35.08 31.67 20.34 - per ordinary share (cents) 74.51 91.02 (18)
2.10 1.90 1.22 - per ADS (dollars) 4.47 5.46
========================== =========================
• BP's third-quarter replacement cost profit was $3,867 million, compared
with $6,975 million a year ago, a decrease of 45%. For the nine months,
replacement cost profit was $14,315 million compared with $18,358 million, down
22%.
• The third-quarter result included a net non-operating loss of $346
million compared with a net non-operating gain of $1,225 million in the third
quarter of 2006. For the nine months, the net non-operating gain was $758
million compared with a net non-operating gain of $1,214 million for the first
nine months of 2006.
• Net cash provided by operating activities for the quarter and nine
months was $6.4 billion and $20.4 billion respectively compared with $5.1
billion and $23.2 billion a year ago.
• The effective tax rate on replacement cost profit from continuing
operations for the third quarter was 35% compared with 40% a year ago. For the
nine months, the rate was 35% compared with 37% in the equivalent period of
2006.
• Net debt at the end of the quarter was $22.8 billion. The ratio of net
debt to net debt plus equity was 20% compared with 16% a year ago.
• Capital expenditure, excluding acquisitions and asset exchanges, was
$4.6 billion for the quarter and for the nine months was $12.6 billion. Total
capital expenditure and acquisitions was $4.6 billion for the quarter and $14
billion for the nine months. The nine months included $1.1 billion in respect of
the acquisition of Chevron's Netherlands manufacturing company. Disposal
proceeds were $0.2 billion for the quarter and were $3.9 billion for the nine
months.
• The quarterly dividend, to be paid in December, is 10.825 cents per
share ($0.6495 per ADS) compared with 9.825 cents per share a year ago. For the
nine months, the dividend showed an increase of 10%. In sterling terms, the
quarterly dividend is 5.308 pence per share, compared with 5.241 pence per share
a year ago; for the nine months the decrease was less than 1%. During the
quarter, the company repurchased 128 million of its own shares for cancellation
at a cost of $1.5 billion. For the nine months, share repurchases were 542
million at a cost of $6.0 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
------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
=============================== =================
9,935 6,893 6,343 Exploration and Production 19,279 24,584
1,503 2,740 376 Refining and Marketing 3,954 4,971
152 190 (57) Gas, Power and Renewables 339 906
(261) (164) (451) Other businesses and corporate (731) (671)
440 (69) 59 Consolidation adjustments 73 155
------------------------------- -----------------
11,769 9,590 6,270 RC profit before interest and tax 22,914 29,945
------------------------------- -----------------
(117) (155) (173) Finance costs and other finance income (499) (367)
(4,614) (3,283) (2,158) Taxation (7,881) (10,984)
(63) (65) (72) Minority interest (219) (211)
------------------------------- -----------------
RC profit from continuing operations
6,975 6,087 3,867 attributable to BP shareholders(a) 14,315 18,383
=============================== =================
Inventory holding gains (losses) for
(744) 1,289 539 continuing operations 2,131 762
------------------------------- -----------------
Profit for the period from continuing
operations attributable to
6,231 7,376 4,406 BP shareholders 16,446 19,145
Profit (loss) for the period from Innovene
- - - operations(b) - (25)
------------------------------- -----------------
Profit for the period attributable to
6,231 7,376 4,406 BP shareholders 16,446 19,120
=============================== =================
RC profit from continuing operations
attributable
6,975 6,087 3,867 to BP shareholders 14,315 18,383
- - - RC profit (loss) from Innovene operations - (25)
------------------------------- -----------------
6,975 6,087 3,867 Replacement cost profit 14,315 18,358
=============================== =================
(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 2.
Results include Non-operating Items
------------------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
================================ =================
2,466 399 22 Exploration and Production 1,169 2,559
(431) 767 (344) Refining and Marketing 194 (331)
(85) (36) (8) Gas, Power and Renewables (35) (34)
78 7 (205) Other businesses and corporate (164) 113
-------------------------------- -----------------
2,028 1,137 (535) 1,164 2,307
(803) (396) 189 Taxation(a) (406) (902)
-------------------------------- -----------------
1,225 741 (346) Continuing operations 758 1,405
-------------------------------- -----------------
- - - Innovene operations - (184)
- - - Taxation - (7)
-------------------------------- -----------------
1,225 741 (346) Total for all operations 758 1,214
================================ =================
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
----------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 2007 2006
================================ =====================
Results for the period ($m)
6,231 7,376 4,406 Profit(a) 16,446 19,120
6,975 6,087 3,867 Replacement cost profit 14,315 18,358
-------------------------------- ---------------------
Shares in issue at period end
19,815,830 19,133,973 19,019,579 (thousand)(b) 19,019,579 19,815,830
3,302,638 3,188,996 3,169,930 - ADS equivalent (thousand)(b) 3,169,930 3,302,638
Average number of shares outstanding
19,818,106 19,186,461 19,061,853 (thousand)(b) 19,209,757 20,167,945
3,303,018 3,197,744 3,176,976 - ADS equivalent (thousand)(b) 3,201,626 3,361,324
Shares repurchased in the period
299,155 175,806 128,253 (thousand) 541,975 1,023,978
Per ordinary share (cents)
31.46 38.37 23.18 Profit for the period 85.61 94.80
35.08 31.67 20.34 RC profit for the period 74.51 91.02
Per ADS (cents)
188.76 230.22 139.08 Profit for the period 513.66 568.80
210.48 190.02 122.04 RC profit for the period 447.06 546.12
-------------------------------- ---------------------
(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
December. Holders of ordinary shares will receive 5.308 pence per share and
holders of American Depository Receipts (ADRs) $0.6495 per ADS. The dividend is
payable on 3 December to shareholders on the register on 9 November.
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 3 December.
Dividends Paid
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 2007 2006
================================ ======================
Dividends paid per ordinary share
9.825 10.325 10.825 Cents 31.475 28.575
5.324 5.151 5.278 Pence 15.687 15.863
58.95 61.95 64.95 Dividends paid per ADS (cents) 188.85 171.45
================================ ======================
Net Debt Ratio - Net Debt: Net Debt + Equity
-----------------------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
================================ ======================
19,973 23,754 25,245 Gross debt 25,245 19,973
3,199 2,643 2,410 Cash and cash equivalents 2,410 3,199
-------------------------------- ----------------------
16,774 21,111 22,835 Net debt 22,835 16,774
================================ ======================
85,070 89,423 91,494 Equity 91,494 85,070
16% 19% 20% Net debt ratio 20% 16%
================================ ======================
Exploration and Production
----------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
================================ =================
9,929 6,894 6,347 Profit before interest and tax(a) 19,295 24,572
6 (1) (4) Inventory holding (gains) losses (16) 12
-------------------------------- -----------------
Replacement cost profit before interest
9,935 6,893 6,343 and tax 19,279 24,584
================================ =================
By region:
1,306 1,113 703 UK 2,878 4,305
264 183 221 Rest of Europe 1,124 960
3,827 2,038 1,843 US 5,533 8,392
4,538 3,559 3,576 Rest of World 9,744 10,927
-------------------------------- -----------------
9,935 6,893 6,343 19,279 24,584
================================ =================
Results include:
Non-operating items
540 187 33 UK 365 532
(27) (2) 7 Rest of Europe 538 56
2,016 177 (15) US 154 2,027
(63) 37 (3) Rest of World 112 (56)
-------------------------------- -----------------
2,466 399 22 1,169 2,559
================================ =================
Exploration expense
7 7 2 UK 29 14
- - - Rest of Europe - -
188 54 60 US 191 309
156 94 182 Rest of World 335 314
-------------------------------- -----------------
351 155 244 555 637
================================ =================
Production (net of royalties)(b)
Liquids (mb/d) (net of royalties)(c)
213 218 151 UK 202 258
58 43 52 Rest of Europe 52 63
523 532 475 US 510 551
1,628 1,656 1,614 Rest of World 1,632 1,623
-------------------------------- -----------------
2,422 2,449 2,292 2,396 2,495
================================ =================
Natural gas (mmcf/d) (net of royalties)
754 731 582 UK 739 952
100 22 26 Rest of Europe 30 92
2,332 2,165 2,186 US 2,171 2,436
4,900 4,941 5,085 Rest of World 5,138 4,991
-------------------------------- -----------------
8,086 7,859 7,879 8,078 8,471
================================ =================
Total hydrocarbons (mboe/d)(d)
343 344 251 UK 329 422
75 47 57 Rest of Europe 57 78
925 905 851 US 885 971
2,473 2,508 2,492 Rest of World 2,517 2,483
-------------------------------- -----------------
3,816 3,804 3,651 3,788 3,954
================================ =================
Average realizations(e)
64.15 62.58 71.12 Total liquids ($/bbl) 62.00 60.91
4.49 4.45 3.93 Natural gas ($/mcf) 4.42 4.83
45.47 44.97 46.36 Total hydrocarbons ($/boe) 44.05 44.74
================================ =================
(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 third quarter was
$6,343 million, a decrease of 36% from the third quarter of 2006. The result
benefited from higher liquids realizations, but was impacted by lower gas
realizations, lower reported volumes and higher costs. In addition, the result
was lower due to the absence of significant gains from non-operating items in
the third quarter of 2006 (see below) and the absence of disposal gains in
equity-accounted entities, primarily the $892 million gain on TNK-BP's disposal
of the Urdmurtneft assets.
The net non-operating gain in the third quarter of 2007 was $22 million which
included gains on the sale of assets and fair value gains on embedded
derivatives relating to North Sea gas contracts, partially offset by an
impairment charge relating to a gas plant in the US. This compares with a net
non-operating gain of $2,466 million in the third quarter of 2006, which was
primarily comprised of disposal gains.
The replacement cost profit before interest and tax of $19,279 million for the
first nine months represents a decrease of 22% over the same period of the
previous year. This result was impacted by lower gas realizations as well as
lower reported volumes and higher costs, reflecting sector-specific inflation,
increased integrity spend and higher depreciation charges. The nine-months
result included a net non-operating gain of $1,169 million compared with a net
non-operating gain of $2,559 million in the equivalent period of 2006.
Reported production for the third quarter and the first nine months was
3,651mboe/d and 3,788mboe/d respectively, 4% lower than in the equivalent
periods of 2006. After adjusting for the effect of disposals, entitlement
changes in our production-sharing agreements and the impact of the CATS pipeline
incident in the North Sea, production in both the third quarter and the first
nine months was broadly flat compared with 2006. Full year production in 2007 is
expected to be in the range of 3.8 to 3.9mmboe/d, in line with the guidance
provided earlier in the year.
During the quarter, we were the highest bidder for 91 blocks in the Western Gulf
of Mexico lease sale and we were awarded two new exploration licences in
Colombia. Additionally, in early October we participated in the Central Gulf of
Mexico lease sale, where we were highest bidder for 83 blocks.
Our major projects are progressing well. In October, we had first oil from
Greater Plutonio in Angola, where BP holds a 50% working interest. In the Gulf
of Mexico we have started commissioning the Atlantis field.
Refining and Marketing
-------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
============================== =================
717 3,981 936 Profit before interest and tax(a) 6,046 5,747
786 (1,241) (560) Inventory holding (gains) losses (2,092) (776)
------------------------------ -----------------
Replacement cost profit before
1,503 2,740 376 interest and tax 3,954 4,971
============================== =================
By region:
138 963 22 UK 975 161
765 584 492 Rest of Europe 1,374 1,913
388 964 (527) US 559 1,774
212 229 389 Rest of World 1,046 1,123
------------------------------ -----------------
1,503 2,740 376 3,954 4,971
============================== =================
Results include:
Non-operating items
(27) 844 (4) UK 677 (8)
(18) (44) (16) Rest of Europe (72) 182
(264) 170 (316) US (204) (614)
(122) (203) (8) Rest of World (207) 109
------------------------------ -----------------
(431) 767 (344) 194 (331)
============================== =================
Refinery throughputs (mb/d)
200 123 - UK 90 158
622 700 735 Rest of Europe 691 644
1,213 996 1,109 US 1,086 1,130
252 309 304 Rest of World 302 268
------------------------------ -----------------
2,287 2,128 2,148 Total throughput 2,169 2,200
============================== =================
82.2 82.7 83.4 Refining availability (%)(b) 82.6 83.2
============================== =================
Oil sales volumes (mb/d)
Refined products
370 343 350 UK 343 356
1,367 1,271 1,329 Rest of Europe 1,282 1,331
1,609 1,579 1,535 US 1,559 1,613
578 615 641 Rest of World 627 575
------------------------------ -----------------
3,924 3,808 3,855 Total marketing sales 3,811 3,875
1,911 1,867 1,687 Trading/supply sales 1,860 1,932
------------------------------ -----------------
5,835 5,675 5,542 Total refined product sales 5,671 5,807
1,913 2,161 1,709 Crude oil 1,964 2,160
------------------------------ -----------------
7,748 7,836 7,251 Total oil sales 7,635 7,967
============================== =================
Global Indicator Refining Margin ($/bbl)(c)
4.54 7.12 3.82 NWE 5.03 4.40
11.47 24.46 12.58 USGC 15.74 13.36
11.50 26.05 14.31 Midwest 16.02 10.38
12.30 22.71 6.90 USWC 17.22 14.93
3.58 6.01 4.52 Singapore 5.12 4.65
8.40 16.66 8.05 BP Average 11.38 9.09
============================== =================
Chemicals production (kte)
230 246 237 UK 739 831
776 655 587 Rest of Europe 1,990 2,359
883 1,047 1,117 US 3,240 2,488
1,682 1,497 1,569 Rest of World 4,586 5,097
------------------------------ -----------------
3,571 3,445 3,510 Total production 10,555 10,775
============================== =================
(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 third quarter and
nine months was $376 million and $3,954 million respectively. The results in the
equivalent periods of 2006 were $1,503 million and $4,971 million respectively.
The third-quarter result included a net non-operating charge of $344 million
which was primarily comprised of charges in respect of new, and revisions to
existing, provisions. The nine-months result included a net non-operating gain
of $194 million.
Compared with the third quarter of 2006, realized refining margins were lower
due to the effects of narrowing light heavy crude differentials, particularly in
the US. Marketing margins remained robust although they were lower than the
exceptionally strong margins of a year ago. Relative to 2006, both refining and
marketing margins were stronger in the first nine months of 2007. Compared with
the equivalent periods of 2006, both the current quarter and nine-months results
reflected the adverse impact of operational issues, particularly at the Whiting
refinery, and scheduled turnarounds, along with reduced supply optimization
benefits and higher integrity and repair costs.
Information on fair value accounting effects is set out on page 10.
Refining throughputs for the quarter and nine months were 2,148mb/d and 2,169mb/
d respectively, compared with 2,287mb/d and 2,200mb/d for the same periods last
year. The lower throughputs were mainly due to the disposal of Coryton refinery
on 31 May 2007 and lower availability at the Whiting refinery, partially offset
by the benefits of the ongoing recommissioning at the Texas City refinery and
the acquisition of the remaining interests in the Rotterdam refinery.
Marketing sales were 3,855mb/d for the quarter and 3,811mb/d for the nine
months, slightly lower than the comparative periods in the previous year, mainly
due to lower European heating oil demand as a result of milder weather.
Refining availability, at 83.4%, improved for the third successive quarter. We
continue to make progress in the recommissioning of both the Texas City and
Whiting refineries. In line with our prior guidance, by the end of the fourth
quarter of 2007 we expect available production capacity to reach 400mb/d and
300mb/d at Texas City and Whiting respectively, with sour crude processing
having resumed at Whiting. We expect to restore both refineries to their full
crude capacity and flexibility in the first half of 2008.
Gas, Power and Renewables
-----------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
============================= ================
152 235 (71) Profit before interest and tax(a) 370 853
- (45) 14 Inventory holding (gains) losses (31) 53
----------------------------- ----------------
Replacement cost profit before interest
152 190 (57) and tax 339 906
============================= ================
By region:
(46) (38) (85) UK (75) 70
(17) (8) (37) Rest of Europe (38) (20)
150 102 (23) US 105 578
65 134 88 Rest of World 347 278
----------------------------- ----------------
152 190 (57) 339 906
============================= ================
Results include:
Non-operating items
(20) (38) (12) UK (43) 32
- - - Rest of Europe - -
5 1 4 US 6 4
(70) 1 - Rest of World 2 (70)
----------------------------- ----------------
(85) (36) (8) (35) (34)
============================= ================
(a)Profit from continuing operations and includes profit after interest and tax
of equity-accounted entities.
The replacement cost loss before interest and tax for the third quarter was $57
million compared with a profit of $152 million in the same period of 2006. The
replacement cost profit before interest and tax for the nine months was $339
million compared with $906 million in the same period of 2006. Included in the
result for the quarter was a net charge for non-operating items of $8 million
primarily arising from fair value losses on embedded derivatives related to
long-term gas contracts. The corresponding quarter of 2006 included a net
non-operating charge of $85 million.
The third-quarter result decreased by more than $200 million over the third
quarter of 2006. This reflected a significant reduction in the contribution from
the marketing and trading businesses, lower natural gas liquids volumes and
higher Alternative Energy expenditure, partly offset by improved margins in the
natural gas liquids business and a lower charge related to non-operating items.
The nine-months result was lower than the same period in 2006, largely
reflecting weaker contributions from the marketing and trading businesses and
higher expenditure in the Alternative Energy business.
Information on fair value accounting effects is set out on page 10.
Other Businesses and Corporate
--------------------------
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
========================= =================
(213) (162) (462) Profit (loss) before interest and tax(a) (739) (620)
(48) (2) 11 Inventory holding (gains) losses 8 (51)
------------------------- -----------------
Replacement cost profit (loss) before
(261) (164) (451) interest and tax (731) (671)
========================= =================
By region:
(327) (25) 124 UK 53 (548)
9 (2) (77) Rest of Europe (58) (40)
35 (112) (359) US (585) (106)
22 (25) (139) Rest of World (141) 23
------------------------- -----------------
(261) (164) (451) (731) (671)
========================= =================
Results include:
Non-operating items
(25) - 1 UK 1 (25)
(2) - (11) Rest of Europe 17 (3)
105 7 (199) US (186) 124
- - 4 Rest of World 4 17
------------------------- -----------------
78 7 (205) (164) 113
========================= =================
(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 third quarter's
result included a net charge of $205 million in respect of non-operating items
which was primarily comprised of new, and revisions to existing, provisions.
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.
Third Second Third
Quarter Quarter Quarter Nine Months
2006 2007 2007 $ million 2007 2006
========================= =================
Refining and Marketing
Unrecognized gains (losses) brought forward from
332 611 274 previous period 72 283
252 (274) (367) Unrecognized (gains) losses carried forward (367) 252
------------------------- -----------------
Favourable/(unfavourable) impact relative to
584 337 (93) management's measure of performance (295) 535
========================= =================
Gas, Power and Renewables
Unrecognized gains (losses) brought forward from
376 124 198 previous period 155 123
(399) (198) (234) Unrecognized (gains) losses carried forward (234) (399)
------------------------- -----------------
Favourable/(unfavourable) impact relative to
(23) (74) (36) management's measure of performance (79) (276)
========================= =================
561 263 (129) (374) 259
(222) (92) 46 Taxation(a) 134 (116)
------------------------- -----------------
339 171 (83) (240) 143
========================= =================
By region
Refining and Marketing
111 83 45 UK (53) 136
156 48 2 Rest of Europe (115) 161
315 174 (142) US (133) 244
2 32 2 Rest of World 6 (6)
------------------------- -----------------
584 337 (93) (295) 535
========================= =================
Gas, Power and Renewables
(48) (4) (22) UK 12 (12)
- - - Rest of Europe - -
14 (71) (19) US (96) (250)
11 1 5 Rest of World 5 (14)
------------------------- -----------------
(23) (74) (36) (79) (276)
========================= =================
(a)Tax is calculated using the quarter's effective tax rate on replacement cost
profit from continuing operations.
The amounts shown in the table above, in respect of comparative periods for the
Refining and Marketing segment, have been revised from those disclosed
previously. The revisions reflect changes in the basis for valuation of certain
forward supply contracts to be consistent with the method used for other forward
supply contracts when calculating management's internal measure of performance.
The changes to comparative figures are not material in relation to management's
internal measure of the Refining and Marketing segment's performance. The
changes have no impact on the results reported under IFRS.
Cautionary Statement: The foregoing discussion contains forward looking
statements particularly those regarding production and refining production and
capacity. 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.
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