4Q05 Part 2 of 2

BP PLC 07 February 2006 BP p.l.c. and Subsidiaries Summarized Group Income Statement Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million Sales and other operating 53,343 69,310 64,708 revenues (Notes 4 and 5) 249,465 199,876 Earnings from jointly controlled 358 1,020 835 entities - after interest and tax 3,083 1,818 Earnings from associates - after 130 112 133 interest and tax 460 462 230 113 229 Interest and other revenues 613 615 ----------------------- -------------- 54,061 70,555 65,905 Total revenues 253,621 202,771 Gain on sale of businesses and 273 30 210 fixed assets 1,538 1,685 ----------------------- -------------- 54,334 70,585 66,115 Total revenues and other income 255,159 204,456 36,210 49,345 45,541 Purchases 172,699 135,907 Production and manufacturing 4,420 4,590 6,118 expenses 21,092 17,330 647 834 830 Production and similar taxes (Note 6)3,010 2,149 Depreciation, depletion and 2,430 2,041 2,351 amortization 8,771 8,529 Impairment and losses on sale of 796 148 124 businesses and fixed assets 468 1,390 258 177 208 Exploration expense (Note 6) 684 637 Distribution and administration 3,641 3,444 4,013 expenses 13,706 12,768 Fair value (gain) loss on embedded - (46) 1,350 derivatives 2,047 - ----------------------- -------------- Profit before interest and taxation from continuing 5,932 10,052 5,580 operations 32,682 25,746 143 144 172 Finance costs (Note 7) 616 440 121 37 43 Other finance expense (Note 8) 145 340 ----------------------- -------------- Profit before taxation 5,668 9,871 5,365 from continuing operations 31,921 24,966 Taxation (includes overseas Taxation of $9,082 million, 1,818 2,674 2,029 2004 $5,461 million) 9,473 7,082 ----------------------- -------------- 3,850 7,197 3,336 Profit from continuing operations 22,448 17,884 Profit (loss) from Innovene (781) (666) 442 operations (Note 3) 184 (622) ----------------------- -------------- 3,069 6,531 3,778 Profit for the period 22,632 17,262 ======================= ============== Attributable to: 3,010 6,463 3,685 BP shareholders 22,341 17,075 59 68 93 Minority interest 291 187 ----------------------- -------------- 3,069 6,531 3,778 22,632 17,262 ======================= ============== Earnings per share - cents Profit for the period attributable to BP shareholders 14.00 30.75 17.90 Basic 105.74 78.24 13.75 30.54 17.68 Diluted 104.52 76.87 Profit from continuing operations Attributable to BP shareholders 17.57 33.87 15.82 Basic 104.87 81.09 17.26 33.62 15.62 Diluted 103.66 79.66 ======================= ============== Summarized Group Balance Sheet 31 December 31 December 2005 2004 ========================= $ million Non-current assets Property, plant and equipment 85,947 93,092 Goodwill 10,371 10,857 Other intangible assets 4,772 4,205 Investments in jointly controlled entities 13,556 14,556 Investments in associates 6,217 5,486 Other investments 967 394 --------------------- Fixed assets 121,830 128,590 Loans 821 811 Other receivables 770 429 Derivative financial instruments 3,652 898 Prepayments and accrued income 1,269 354 Defined benefit pension plan surplus 3,282 2,105 --------------------- 131,624 133,187 --------------------- Current assets Loans 132 193 Inventories 19,760 15,645 Trade and other receivables 40,902 37,099 Derivative financial instruments 9,726 5,317 Prepayments and accrued income 1,598 1,671 Current tax receivable 212 159 Cash and cash equivalents 2,960 1,359 --------------------- 75,290 61,443 --------------------- Total assets 206,914 194,630 ===================== Current liabilities Trade and other payables 42,136 38,540 Derivative financial instruments 9,083 5,074 Accruals and deferred income 5,970 4,482 Finance debt 8,932 10,184 Current tax payable 4,274 4,131 Provisions 1,102 715 --------------------- 71,497 63,126 --------------------- Non-current liabilities Other payables 1,935 3,581 Derivative financial instruments 3,696 158 Accruals and deferred income 3,164 699 Finance debt 10,230 12,907 Deferred tax liabilities 16,443 16,701 Provisions 9,954 8,884 Defined benefit pension plan and other post-retirement benefit plan deficits 9,230 10,339 --------------------- 54,652 53,269 --------------------- Total liabilities 126,149 116,395 --------------------- Net assets 80,765 78,235 ===================== Equity BP shareholders' equity 79,976 76,892 Minority interest 789 1,343 --------------------- 80,765 78,235 ===================== Movement in BP Shareholders' Equity Movement in BP shareholders' equity: $ million At 31 December 2004 76,892 Adoption of IAS 39 (243) ------ As restated at 1 January 2005 76,649 Profit for the year 22,341 Distribution to shareholders (7,359) Currency translation differences (net of tax) (2,479) Exchange differences on translation of foreign operations transferred to loss on sale (net of tax) (220) Actuarial gain on pension and other post-retirement benefits plans (net of tax) 619 Repurchase of ordinary share capital (11,597) Issue of ordinary share capital for employee share schemes 534 Issue of ordinary share capital for TNK-BP 1,250 Purchase of shares by ESOP trusts (251) Share-based payment accrual (net of tax) 412 Available-for-sale investments (net of tax) 190 Cash flow hedges (net of tax) (113) ------ At 31 December 2005 79,976 ====== Summarized Group Cash Flow Statement Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million Operating activities Profit before taxation from 5,668 9,871 5,365 continuing operations 31,921 24,966 Adjustments to reconcile profits before tax to net cash provided by operating activities 151 93 81 Exploration expenditure written off 305 274 Depreciation, depletion and 2,430 2,041 2,351 amortization 8,771 8,529 Impairment and (gain) loss on sale 523 118 (86) of businesses and fixed assets (1,070) (295) Earnings from jointly controlled (488) (1,132) (968) entities and associates (3,543) (2,280) Dividends received from jointly 756 893 844 controlled entities and associates 2,833 2,199 (3,098) (5,718) (4,171) Working capital and other movements(13,466) (9,346) ----------------------- --------------- Net cash provided by operating activities of continuing 5,942 6,166 3,416 operations 25,751 24,047 Net cash provided by (used in) operating activities of (785) 205 823 Innovene operations 970 (669) ----------------------- --------------- Net cash provided by 5,157 6,371 4,239 operating activities 26,721 23,378 ----------------------- --------------- Investing activities (3,805) (3,069) (3,476) Capital expenditure (12,281)(12,286) (1,489) - (60) Acquisitions, net of cash acquired (60) (1,503) Investment in jointly controlled (134) (2) (132) entities (185) (1,648) (190) (82) (252) Investment in associates (619) (942) Proceeds from disposal of 894 226 825 fixed assets 2,803 4,236 - - 8,397 Proceeds from disposal of businesses 8,397 725 84 11 32 Proceeds from loan repayments 123 87 - - 93 Other 93 - ----------------------- --------------- Net cash provided by (used in) (4,640) (2,916) 5,427 investing activities (1,729)(11,331) ----------------------- --------------- Financing activities (1,942) (3,661) (3,687) Net repurchase of shares (11,315) (7,208) 900 497 685 Proceeds from long-term financing 2,475 2,675 (921) (420) (1,197) Repayments of long-term financing (4,820) (2,204) Net increase (decrease) in short- 2,529 2,983 (2,423) term debt (1,457) (24) (1,535) (1,871) (1,856) Dividends paid - BP shareholders (7,359) (6,041) (8) (87) (405) - Minority interest (827) (33) ----------------------- --------------- Net cash used in financing (977) (2,559) (8,883) activities (23,303)(12,835) ----------------------- --------------- Currency translation differences relating to cash and cash 78 (74) (5) equivalents (88) 91 ----------------------- --------------- Increase (decrease) in cash and (382) 822 778 cash equivalents 1,601 (697) Cash and cash equivalents at 1,741 1,360 2,182 beginning of period 1,359 2,056 ----------------------- --------------- Cash and cash equivalents at 1,359 2,182 2,960 end of period 2,960 1,359 ======================= =============== Summarized Group Cash Flow Statement Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million Working capital and other movements (129) (86) (228) Interest receivable (479) (284) 193 81 208 Interest received 401 331 143 144 172 Interest payable 616 440 (227) (384) (292) Interest paid (1,127) (698) 121 37 43 Other finance expense 145 340 68 66 56 Share-based payments 278 224 Net operating charge for pensions and other post-retirement benefits, (54) (21) (398) less contributions (435) (84) Net charge for provisions, (364) 440 (284) less payments 600 (110) 127 (3,737) (318) (Increase) decrease in inventories (6,638) (3,182) (Increase) decrease in trade and (4,160)(10,116) (386) other receivables (16,427)(10,225) Increase (decrease) in trade and 3,580 10,425 300 other payables 18,628 10,290 (2,396) (2,567) (3,044) Income taxes paid (9,028) (6,388) ----------------------- --------------- (3,098) (5,718) (4,171) (13,466) (9,346) ======================= =============== Group Statement of Recognized Income and Expense Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million 2,424 216 (308) Currency translation differences (2,490) 2,283 Exchange gain on translation of foreign operations transferred to gain or loss on sale of businesses - - (315) and fixed assets (315) (78) Actuarial gain relating to pensions 107 - 975 and other post-retirement benefits 975 107 - 47 236 Available-for-sale investments 262 - - (11) (5) Cash flow hedges (176) - Unrealized gain on acquisition of further investment in equity- 94 - - accounted investments - 94 (52) (17) (295) Taxation (259) (73) ----------------------- --------------- Net income recognized directly 2,573 235 288 in equity (2,003) 2,333 3,069 6,531 3,778 Profit for the period 22,632 17,262 ----------------------- --------------- Total recognized income and expense 5,642 6,766 4,066 relating to the year 20,629 19,595 Change in accounting policy - adoption of IAS 32 and 39 on - - - 1 January 2005 (243) - ----------------------- --------------- Total recognized income and expense 5,642 6,766 4,066 since last annual accounts 20,386 19,595 ======================= =============== Attributable to: 5,583 6,698 3,973 BP shareholders 20,095 19,408 59 68 93 Minority interest 291 187 ----------------------- --------------- 5,642 6,766 4,066 20,386 19,595 ======================= =============== Capital Expenditure and Acquisitions Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million By business Exploration and Production 207 221 211 UK 821 762 94 50 79 Rest of Europe 197 255 1,060 930 1,001 USA 3,870 3,913 1,237 1,292 1,671 Rest of World (a) 5,349 6,078 ----------------------- ------------- 2,598 2,493 2,962 10,237 11,008 ----------------------- ------------- Refining and Marketing 186 65 203 UK 408 411 248 99 291 Rest of Europe 568 599 485 282 535 USA 1,226 1,314 301 115 336 Rest of World 570 495 ----------------------- ------------- 1,220 561 1,365 2,772 2,819 ----------------------- ------------- Gas, Power and Renewables 154 3 10 UK 30 166 12 4 15 Rest of Europe 26 19 42 22 42 USA 96 80 117 10 57 Rest of World 83 259 ----------------------- ------------- 325 39 124 235 524 ----------------------- ------------- Other businesses and corporate 244 92 90 UK 339 403 880 40 71 Rest of Europe 189 1,024 527 29 131 USA 277 698 74 3 47 Rest of World 100 175 ----------------------- ------------- 1,725 164 339 905 2,300 ----------------------- ------------- 5,868 3,257 4,790 14,149 16,651 ======================= ============= By geographical area 791 381 514 UK 1,598 1,742 1,234 193 456 Rest of Europe 980 1,897 2,114 1,263 1,709 USA 5,469 6,005 1,729 1,420 2,111 Rest of World (a) 6,102 7,007 ----------------------- ------------- 5,868 3,257 4,790 14,149 16,651 ======================= ============= Included above: 1,482 - 60 Acquisitions and asset exchanges 211 2,841 1,539 103 140 Innovene operations 497 1,915 ======================= ============= (a) Year 2004 included $1,354 million investment in TNK's interest in Slavneft within TNK-BP. Exchange rates US dollar/sterling average rate 1.86 1.78 1.75 for the period 1.82 1.83 1.92 1.76 1.73 US dollar/sterling period-end rate 1.73 1.92 US dollar/euro average rate 1.29 1.22 1.19 for the period 1.24 1.24 1.36 1.20 1.18 US dollar/euro period-end rate 1.18 1.36 ======================= ============= Analysis of Profit Before Interest and Tax Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million By business Exploration and Production 998 939 (295) UK 2,129 3,453 222 301 398 Rest of Europe 2,321 837 1,597 2,071 2,972 USA 9,492 6,807 1,930 3,225 3,500 Rest of World 11,566 6,990 ----------------------- ------------- 4,747 6,536 6,575 25,508 18,087 ----------------------- ------------- Refining and Marketing (395) 316 (588) UK (594) (627) 353 1,122 (266) Rest of Europe 2,673 2,300 619 1,701 (307) USA 3,514 3,616 234 558 93 Rest of World 1,349 1,255 ----------------------- ------------- 811 3,697 (1,068) 6,942 6,544 ----------------------- ------------- Gas, Power and Renewables 158 (17) (159) UK 64 84 (3) 4 (19) Rest of Europe (17) (31) 102 403 132 USA 746 418 266 22 160 Rest of World 311 483 ----------------------- ------------- 523 412 114 1,104 954 ----------------------- ------------- Other businesses and corporate 207 (144) (141) UK (673) (217) (132) 11 (124) Rest of Europe (79) (134) (197) (361) (22) USA (405) (782) (115) 42 (116) Rest of World (34) 1,297 ----------------------- ------------- (237) (452) (403) (1,191) 164 ----------------------- ------------- 5,844 10,193 5,218 32,363 25,749 57 (285) 234 Unrealized profit in inventory (208) (191) Net profit on transactions between 31 144 128 continuing and Innovene operations 527 188 ----------------------- ------------- 5,932 10,052 5,580 Total for continuing operations 32,682 25,746 ----------------------- ------------- Innovene operations (71) (289) 490 UK 423 (170) (468) (88) (1) Rest of Europe 406 14 (311) (220) (42) USA (166) (259) (122) (28) 21 Rest of World 5 (111) ----------------------- ------------- (972) (625) 468 668 (526) Net profit on transactions between (31) (144) (128) continuing and Innovene operations (527) (188) ----------------------- ------------- (1,003) (769) 340 Total for Innovene operations 141 (714) ----------------------- ------------- 4,929 9,283 5,920 Total for period 32,823 25,032 ======================= ============== By geographical area 1,082 1,138 (1,039) UK 1,167 2,875 500 1,523 31 Rest of Europe 5,206 3,121 2,035 3,543 2,974 USA 13,139 9,725 2,315 3,848 3,614 Rest of World 13,170 10,025 ----------------------- ------------- 5,932 10,052 5,580 Total for continuing operations 32,682 25,746 ======================= ============= Analysis of Replacement Cost Profit Before Interest and Tax Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million By business Exploration and Production 998 939 (295) UK 2,129 3,453 222 301 398 Rest of Europe 2,321 837 1,600 2,070 2,964 USA 9,475 6,797 1,930 3,225 3,500 Rest of World 11,566 6,990 ----------------------- -------------- 4,750 6,535 6,567 25,491 18,077 ----------------------- -------------- Refining and Marketing (375) 268 (514) UK (575) (690) 585 657 (170) Rest of Europe 1,568 1,988 847 563 363 USA 2,302 2,874 280 370 161 Rest of World 1,110 1,068 ----------------------- -------------- 1,337 1,858 (160) 4,405 5,240 ----------------------- -------------- Gas, Power and Renewables 158 (17) (159) UK 64 84 (3) (4) (18) Rest of Europe (17) (32) 90 378 138 USA 722 420 250 (43) 156 Rest of World 240 443 ----------------------- -------------- 495 314 117 1,009 915 ----------------------- -------------- Other businesses and corporate 207 (144) (141) UK (673) (217) (132) 10 (124) Rest of Europe (79) (134) (197) (366) (22) USA (405) (782) (123) 48 (116) Rest of World (29) 1,289 ----------------------- -------------- (245) (452) (403) (1,186) 156 ----------------------- -------------- 6,337 8,255 6,121 29,719 24,388 57 (285) 234 Unrealized profit in inventory (208) (191) Net profit on transactions between continuing and 31 144 128 Innovene operations 527 188 ----------------------- -------------- 6,425 8,114 6,483 Total for continuing operations 30,038 24,385 ----------------------- -------------- Innovene operations (71) (276) 428 UK 291 (244) (423) (169) (4) Rest of Europe 252 (54) (362) (258) (127) USA (253) (398) (115) (37) 15 Rest of World (5) (112) ----------------------- -------------- (971) (740) 312 285 (808) Net profit on transactions between continuing and (31) (144) (128) Innovene operations (527) (188) ----------------------- -------------- (1,002) (884) 184 Total for Innovene operations (242) (996) ----------------------- -------------- 5,423 7,230 6,667 Total for period 29,796 23,389 ======================= ============== By geographical area 1,102 1,089 (965) UK 1,186 2,812 732 1,049 128 Rest of Europe 4,100 2,808 2,254 2,376 3,643 USA 11,888 8,975 2,337 3,600 3,677 Rest of World 12,864 9,790 ----------------------- -------------- 6,425 8,114 6,483 Total for continuing operations 30,038 24,385 ======================= ============== Analysis of Non-operating Items Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ================ $ million $ million By business Exploration and Production (15) (53) (975) UK (1,996) (21) - - 6 Rest of Europe 1,036 (1) (268) (106) (121) USA (231) (373) 55 12 111 Rest of World 193 (101) ----------------------- --------------- (228) (147) (979) (998) (496) ----------------------- --------------- Refining and Marketing (411) (3) (8) UK (26) (530) (25) (53) (33) Rest of Europe (97) (35) 89 (96) 118 USA (607) (52) (18) (2) (27) Rest of World (59) (77) ----------------------- --------------- (365) (154) 50 (789) (694) ----------------------- --------------- Gas, Power and Renewables - 90 (306) UK (45) - (1) - - Rest of Europe - (1) 1 5 - USA 26 1 40 - (1) Rest of World (1) 56 ----------------------- --------------- 40 95 (307) (20) 56 ----------------------- --------------- Other businesses and corporate (87) (6) (57) UK (111) (130) (12) - - Rest of Europe 11 (66) 100 (284) (7) USA (284) (347) (12) - - Rest of World - 1,388 ----------------------- --------------- (11) (290) (64) (384) 845 ----------------------- --------------- Total before taxation (564) (496) (1,300) for continuing operations (2,191) (289) 166 167 421 Taxation credit (charge) 717 83 ----------------------- --------------- Total after taxation for (398) (329) (879) continuing operations (1,474) (206) ----------------------- --------------- Innovene operations (218) (301) 221 UK (83) (223) (427) (224) (30) Rest of Europe (273) (427) (355) (208) (50) USA (259) (355) (114) (26) (5) Rest of World (32) (114) ----------------------- --------------- Total before taxation for (1,114) (759) 136 Innovene operations (a) (647)(a)(1,119) 251 167 190 Taxation credit (charge) 367 253 ----------------------- --------------- Total after taxation for (863) (592) 326 Innovene operations (280) (866) ----------------------- --------------- (1,261) (921) (553) Total after taxation for period (1,754) (1,072) ======================= =============== (a) Includes the loss on re-measurement to fair value of $724 million and $(133) million in the third and fourth quarters of 2005, impairment charges of $24 million and $35 million in the first and third quarters of 2005 respectively, and a gain on disposal of $3 million in the fourth quarter of 2005. Depreciation of Fixed Asset Revaluation Adjustment Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million Exploration and Production 9 6 7 UK 33 34 81 64 62 USA 272 362 3 5 5 Rest of World 18 19 ----------------------- ------------- 93 75 74 323 415 ----------------------- ------------- Refining and Marketing 31 31 31 USA 124 124 ----------------------- ------------- 31 31 31 124 124 ----------------------- ------------- Total depreciation of revaluation 124 106 105 adjustment (a)(b) 447 539 ======================= ============= (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 Fourth Third Fourth Quarter Quarter Quarter 31 December 2004 2005 2005 2005 2004 ======================= ============== $ million $ million 23,091 22,159 19,162 Gross debt 19,162 23,091 1,359 2,182 2,960 Cash and cash equivalents 2,960 1,359 ----------------------- -------------- 21,732 19,977 16,202 Net debt 16,202 21,732 ======================= ============== 78,235 82,726 80,765 Equity 80,765 78,235 22% 19% 17% Net debt ratio 17% 22% ======================= ============== Production and Realizations Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== Production (a) Crude oil (mb/d) (net of royalties) 301 224 244 UK 261 312 70 64 69 Rest of Europe 71 73 519 427 432 USA 491 530 1,506 1,598 1,655 Rest of World 1,566 1,425 ----------------------- ------------- 2,396 2,313 2,400 Total crude oil production 2,389 2,340 ======================= ============= Natural gas liquids (mb/d) (net of royalties) 19 12 16 UK 16 18 4 4 4 Rest of Europe 4 4 142 113 111 USA 122 138 32 30 33 Rest of World 31 31 ----------------------- ------------- Total natural gas 197 159 164 liquids production 173 191 ======================= ============= Liquids (b)(mb/d) (net of royalties) 320 236 260 UK 277 330 74 68 73 Rest of Europe 75 77 661 540 543 USA 613 668 1,538 1,628 1,688 Rest of World 1,597 1,456 ----------------------- ------------- 2,593 2,472 2,564 Total liquids production 2,562 2,531 ======================= ============= Natural gas (mmcf/d) (net of royalties) 1,227 831 1,156 UK 1,090 1,174 113 99 107 Rest of Europe 108 125 2,651 2,456 2,359 USA 2,547 2,748 4,723 4,455 4,836 Rest of World 4,679 4,456 ----------------------- ------------- 8,714 7,841 8,458 Total natural gas production 8,424 8,503 ======================= ============= Average realizations (c) Crude oil ($/bbl) 42.01 57.77 54.70 UK 51.22 36.11 42.07 56.64 57.40 USA 50.98 37.40 38.29 55.89 49.93 Rest of World 48.32 34.99 41.01 56.83 53.92 BP Average 50.27 36.45 ======================= ============= Natural gas liquids ($/bbl) 40.23 47.49 43.68 UK 37.95 31.79 29.31 36.39 37.78 USA 31.94 25.67 33.10 32.97 42.10 Rest of World 35.11 27.76 31.20 36.70 39.29 BP Average 33.23 26.75 ======================= ============= Liquids ($/bbl) 41.91 57.26 54.02 UK 50.45 35.87 39.73 53.17 53.98 USA 47.83 35.41 37.94 54.63 49.51 Rest of World 47.56 34.51 39.88 54.80 52.44 BP Average 48.51 35.39 ======================= ============= Natural gas ($/mcf) 5.16 4.45 6.96 UK 5.53 4.32 5.72 6.77 9.48 USA 6.78 5.11 3.00 3.43 4.08 Rest of World 3.46 2.74 4.28 4.75 6.24 BP Average 4.90 3.86 ======================= ============= (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. Notes 1. Transition to International Financial Reporting Standards For all periods up to and including the year ended 31 December 2004, BP prepared its financial statements in accordance with UK generally accepted accounting practice (UK GAAP). From 1 January 2005 BP is required to prepare consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Commission ('EC'). Consequently, financial information for year of 2005 must be prepared on the basis of IFRS. The general principle that should be applied on first-time adoption of IFRS is that standards in force at the first reporting date (that is, for BP, 31 December 2005) should be applied retrospectively. However, IFRS 1 'First-time Adoption of International Financial Reporting Standards' contains a number of exemptions which companies are permitted to apply. BP has elected: - not to present comparative information in accordance with IAS 32 'Financial Instruments: Disclosure and Presentation' and IAS 39 'Financial Instruments: Recognition and Measurement'. - not to restate its financial information for acquisitions occurring before 1 January 2003. - to deem cumulative translation differences to be zero at 1 January 2003. - to recognize all actuarial gains and losses on pensions and other post-retirement benefits directly in shareholders' equity at 1 January 2003. This is consistent with the group's adoption of FRS 17 'Retirement Benefits' in 2004. - to apply IFRS 2 'Share-based Payment' retrospectively to all share- based payments. As a result of the above exemptions certain changes apply from 1 January 2003 (BP's Date of Transition) followed by further changes (due to IAS 32 and IAS 39) to apply from 1 January 2005. The annual information for 2005 and the restatement of financial information for the year ended 31 December 2004 and the interim quarters of 2004 have been prepared on the basis of all International Financial Reporting Standards (IFRSs) (with the exception of IAS 32 and IAS 39 (as amended) for the 2004 information) and Standing Interpretations Committee (SIC) and International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board (IASB) in effect for the year ending 31 December 2005. In addition, BP has decided to early adopt IFRS 6 'Exploration for and Evaluation of Mineral Resources', the amendment to IAS 19 'Amendment to international accounting standard IAS 19 Employee Benefits: Actuarial Gains and Losses, Group Plans and Disclosures', the amendment to IAS 39 'Financial Instruments: Recognition and Measurement - Cash Flow Hedge Accounting of Forecast Intra-group Transactions' and IFRIC 4 'Determining whether an Arrangement contains a Lease'. In the financial information for the year ended 31 December 2004 and the interim quarters of 2004 financial assets and financial liabilities are accounted for on the basis of UK GAAP. Under UK GAAP, all derivatives used for trading purposes are recognized on the balance sheet at fair value. However, derivative financial instruments used for hedging purposes are recognized by applying either the accrual method or the deferral method. Under the accrual method, amounts payable or receivable in respect of derivatives are recognized rateably in earnings over the period of the contracts. Changes in the derivative's fair value are not recognized. On the deferral method, gains and losses from derivatives are deferred and recognized in earnings or as adjustments to carrying amounts as the underlying hedged transaction matures or occurs. From 1 January 2005 for IFRS all financial assets and financial liabilities have to be recognized initially at fair value. In subsequent periods the measurement of these financial instruments depends on their classification into one of the following measurement categories: i) financial assets or financial liabilities at-fair-value- through-profit-and-loss (such as those used for trading purposes, and all derivatives which do not qualify for hedge accounting); ii) loans and receivables; iii) available-for-sale financial assets (including certain investments held for the long term) and iv) other liabilities. The effect of adopting IAS 39 at 1 January 2005 is shown as a movement in BP shareholders' equity for 2005. Notes 1. Transition to International Financial Reporting Standards (continued) The principal differences for the group between reporting on the basis of UK GAAP and IFRS are as follows: - ceasing to amortize goodwill. - setting up deferred taxation on: - acquisitions; - inventory valuation differences; - unremitted earnings of subsidiaries, associates and jointly controlled entities. - expensing a greater proportion of major maintenance costs. - no longer recognizing dividends proposed but not declared as a liability at the balance sheet date. - recognizing an expense for the fair value of employee share option schemes rather than the intrinsic value. - recording asset swaps on the basis of fair value. - measuring embedded derivatives at fair value. BP has produced an explanatory note setting out its accounting policies under IFRS, the major differences between UK GAAP and IFRS for BP, and reconciliations of UK GAAP to IFRS for its 2003 and 2004 Income and Cash Flow Statements, its Balance Sheets at 1 January 2003, 31 December 2003, 31 December 2004 and 1 January 2005. This information can be found at the Investor Centre www.bp.com. In addition, the reconciliations for 2004 interim periods included in this report are shown below. Fourth Quarter Year 2004 2004 ===================== $ million Profit for the period under UK GAAP 2,610 15,961 Adjustments Goodwill amortization 412 1,489 Major maintenance expenditure (94) (217) Share-based payments 85 (24) Asset swaps 36 39 Recycling foreign exchange on disposal - 78 Deferred tax (24) (74) Other 44 10 --------------------- Profit for the period under IFRS 3,069 17,262 ===================== 31 December 2004 ======= $ million BP shareholders' equity under UK GAAP 76,656 Adjustments Goodwill amortization 2,985 Major maintenance expenditure (794) Share-based payments 353 Asset swaps (190) Deferred tax (3,986) Dividend accrual 1,821 Other 47 ------- BP shareholders' equity under IFRS 76,892 ======= Notes 2. Resegmentation With effect from 1 January 2005 there have been the following changes to the business segments reported by the group. (a) The Mardi Gras pipeline system in the Gulf of Mexico has been transferred from Exploration and Production to Refining and Marketing. (b) The aromatics and acetyls operations and the petrochemicals assets that are integrated with our Gelsenkirchen refinery in Germany have been transferred from the former Petrochemicals segment to Refining and Marketing. (c) The olefins and derivatives operations have been transferred from the former Petrochemicals segment to the Olefins and Derivatives business. The legacy historical results of other petrochemicals assets that had been divested during 2004 and 2003 are included within Other businesses and corporate. (d) The Grangemouth and Lavera refineries have been transferred from Refining and Marketing to the Olefins and Derivatives business to maintain existing operating synergies with the co-located olefin and derivatives operations. (e) A small US operation, the Hobbs fractionator, which supplies petrochemicals feedstock, has been transferred from Gas, Power and Renewables to the Olefins and Derivatives business. The Olefins and Derivatives business is reported within Other businesses and corporate. This re-organisation was a precursor to seeking to divest the Olefins and Derivatives business. As indicated in Note 3, during 2005 we have divested Innovene and shown these activities as discontinued operations in these accounts. Innovene represented the majority of the Olefins and Derivatives business. Comparative financial and operating information is shown after resegmentation and the adoption of International Financial Reporting Standards. 3. Sale of Olefins and Derivatives business BP announced on 7 October 2005 its intention to sell Innovene, its olefins, derivatives and refining group to INEOS. The transaction became unconditional on 9 December on receipt of European Commission clearance and was completed on 16 December 2005. The transaction included all Innovene's manufacturing sites, markets and technologies. The equity- accounted investments in China and Malaysia which were part of the Olefins and Derivatives business remain with BP and are included within Other businesses and corporate. The Innovene operations represent a separate major line of business for BP. As a result of the sale, these operations have been treated as discontinued operations for the year ended 31 December 2005. A single amount is shown on the face of the income statement comprising the post- tax result of discontinued operations and the post-tax loss recognized on the re-measurement to fair value less costs to sell of the discontinued operation. That is, the income and expenses of Innovene are reported separately from the continuing operations of the BP group. The table below provides further detail of the amount shown on the income statement. The income statements for prior periods have been restated to conform to this style of presentation. In the cash flow statement the cash provided by the operating activities of Innovene has been separated from that of the rest of the group and reported as a single line item. Gross proceeds received amounted to $8,477 million and there were selling costs of $120 million and initial closing adjustments of $43 million. The proceeds are subject to final closing adjustments. The re- measurement to fair value less costs to sell resulted in a loss of $591 million before tax. The originally announced transaction value of $9,000 million has been reduced by the value of certain liabilities transferred to INEOS and certain assets retained by BP on closing. Notes 3. Sale of Olefins and Derivatives business (continued) Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million Profit (loss) before tax from (972) 99 335 Innovene operations 1,259 (526) Net profit on transactions between continuing and (31) (144) (128) Innovene operations (527) (188) ----------------------- --------------- Profit (loss) before (1,003) (45) 207 Interest and taxation 732 (714) (5) - 1 Other finance income (expense) 3 (17) (Loss)/gain recognized on the re-measurement to - (724) 133 fair value (591) - ----------------------- --------------- (1,008) (769) 341 144 (731) Taxation Related to profit 227 (56) (86) before tax (306) 109 Related to re-measurement - 159 187 to fair value 346 - ----------------------- --------------- Profit (loss) from (781) (666) 442 Innovene operations 184 (622) ======================= =============== 4. Change in accounting policy The group's accounting policy has been to present oil, natural gas and power forward sales and purchases gross in the income statement. However, during 2005, a review was undertaken into the presentation of these commodity derivative transactions and related activity. These transactions have previously been presented gross in the income statement, although in certain areas of the group's activity physical delivery can be optional and avoided by buying or selling offsetting contracts through a market mechanism. This led to the conclusion that it was more appropriate to represent transactions in these areas net rather than gross. These sale and purchase transactions are now offset and reported net in sales and other operating revenues. Other derivative contracts where physical delivery is the norm continue to be reported gross. This change in accounting policy, while reducing sales and other operating revenues and purchases, has no impact on reported profit, cash flows and balance sheet. Sales and other operating revenues for earlier quarters of 2005 and for 2004 have been restated as have purchases. The restated sales and other operating revenues information is set out below. The impact of the change in accounting policy on sales and other operating revenues and purchases for the year ended 31 December 2005 was approximately $105,000 million. Notes 4. Change in accounting policy (continued) Sales and other operating revenues First Second Third Nine for 2005 as reported Quarter Quarter Quarter Months ---------------------------------- $ million By business Exploration and Production 10,186 10,934 11,321 32,441 Refining and Marketing 51,646 61,022 68,790 181,458 Gas, Power and Renewables 23,667 23,110 28,917 75,694 Other businesses and corporate 172 174 161 507 ---------------------------------- Sales by continuing operations 85,671 95,240 109,189 290,100 Less: sales between businesses 8,369 7,843 8,511 24,723 sales to Innovene operations 2,113 3,926 4,158 10,197 ---------------------------------- Third party sales of continuing operations 75,189 83,471 96,520 255,180 ---------------------------------- Innovene sales 7,120 5,951 5,824 18,895 Less: sales to continuing operations 3,311 2,605 2,667 8,583 ---------------------------------- Third party sales of Innovene operations 3,809 3,346 3,157 10,312 ---------------------------------- Total third party sales 78,998 86,817 99,677 265,492 ================================== By geographical area UK 24,829 29,998 37,406 92,233 Rest of Europe 15,824 16,916 16,904 49,644 USA 32,944 38,115 45,759 116,818 Rest of World 18,614 20,028 19,595 58,237 ---------------------------------- Sales by continuing operations 92,211 105,057 119,664 316,932 Less: sales between areas 14,909 17,660 18,986 51,555 sales to Innovene operations 2,113 3,926 4,158 10,197 ---------------------------------- 75,189 83,471 96,520 255,180 ================================== Sales and other operating revenues First Second Third Nine for 2005 as restated Quarter Quarter Quarter Months ---------------------------------- $ million By business Exploration and Production 10,186 10,934 11,321 32,441 Refining and Marketing 47,762 55,115 63,278 166,155 Gas, Power and Renewables 7,105 6,250 7,219 20,574 Other businesses and corporate 172 174 161 507 ---------------------------------- Sales by continuing operations 65,225 72,473 81,979 219,677 Less: sales between businesses 8,369 7,843 8,511 24,723 sales to Innovene operations 2,113 3,926 4,158 10,197 ---------------------------------- Third party sales of continuing operations 54,743 60,704 69,310 184,757 ---------------------------------- Innovene sales 7,120 5,951 5,824 18,895 Less: sales to continuing operations 3,311 2,605 2,667 8,583 ---------------------------------- Third party sales of Innovene operations 3,809 3,346 3,157 10,312 ---------------------------------- Total third party sales 58,552 64,050 72,467 195,069 ================================== By geographical area UK 19,821 25,246 32,863 77,930 Rest of Europe 15,824 16,916 16,904 49,644 USA 23,395 25,881 30,724 80,000 Rest of World 12,725 14,247 11,963 38,935 ---------------------------------- Sales by continuing operations 71,765 82,290 92,454 246,509 Less: sales between areas 14,909 17,660 18,986 51,555 sales to Innovene operations 2,113 3,926 4,158 10,197 ---------------------------------- 54,743 60,704 69,310 184,757 ================================== Notes 4. Change in accounting policy (continued) Sales and other operating First Second Third Fourth revenues for 2004 as reported Quarter Quarter Quarter Quarter Year ---------------------------------------- $ million By business Exploration and Production 8,186 8,083 8,601 9,830 34,700 Refining and Marketing 45,307 49,849 46,639 51,122 192,917 Gas, Power and Renewables 20,975 18,434 20,443 23,468 83,320 Other businesses and corporate 121 132 137 156 546 --------------------------------------- Sales by continuing operations 74,589 76,498 75,820 84,576 311,483 Less: sales between businesses 6,726 6,769 7,873 8,236 29,604 sales to Innovene operations 1,824 1,948 2,183 2,271 8,226 --------------------------------------- Third party sales of continuing operations 66,039 67,781 65,764 74,069 273,653 --------------------------------------- Innovene sales 3,698 3,779 4,437 5,534 17,448 Less: sales to continuing operations 1,276 1,246 1,774 1,873 6,169 --------------------------------------- Third party sales of Innovene operations 2,422 2,533 2,663 3,661 11,279 --------------------------------------- Total third party sales 68,461 70,314 68,427 77,730 284,932 ======================================= By geographical area UK 15,839 15,881 20,355 23,013 75,088 Rest of Europe 9,787 11,023 11,499 12,549 44,858 USA 30,931 32,629 30,476 32,556 126,592 Rest of World 15,721 15,533 16,552 19,504 67,310 --------------------------------------- Sales by continuing operations 72,278 75,066 78,882 87,622 313,848 Less: sales between areas 4,415 5,337 10,935 11,282 31,969 sales to Innovene operations 1,824 1,948 2,183 2,271 8,226 --------------------------------------- 66,039 67,781 65,764 74,069 273,653 ======================================= Sales and other operating First Second Third Fourth revenues for 2004 as restated Quarter Quarter Quarter Quarter Year ---------------------------------------- $ million By business Exploration and Production 8,186 8,083 8,601 9,830 34,700 Refining and Marketing 41,380 47,809 41,057 46,104 176,350 Gas, Power and Renewables 6,685 5,916 5,749 7,760 26,110 Other businesses and corporate 121 132 137 156 546 --------------------------------------- Sales by continuing operations 56,372 61,940 55,544 63,850 237,706 Less: sales between businesses 6,726 6,769 7,873 8,236 29,604 sales to Innovene operations 1,824 1,948 2,183 2,271 8,226 --------------------------------------- Third party sales of continuing operations 47,822 53,223 45,488 53,343 199,876 --------------------------------------- Innovene sales 3,698 3,779 4,437 5,534 17,448 Less: sales to continuing Operations 1,276 1,246 1,774 1,873 6,169 --------------------------------------- Third party sales of Innovene operations 2,422 2,533 2,663 3,661 11,279 --------------------------------------- Total third party sales 50,244 55,756 48,151 57,004 211,155 ======================================= By geographical area UK 11,584 13,901 16,407 18,259 60,151 Rest of Europe 9,787 11,023 11,499 12,549 44,858 USA 22,062 24,351 18,571 22,216 87,200 Rest of World 10,628 11,233 12,129 13,872 47,862 --------------------------------------- Sales by continuing operations 54,061 60,508 58,606 66,896 240,071 Less: sales between areas 4,415 5,337 10,935 11,282 31,969 sales to Innovene operations 1,824 1,948 2,183 2,271 8,226 --------------------------------------- 47,822 53,223 45,488 53,343 199,876 ======================================= Notes 5. Sales and other operating revenues Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million By business 9,830 11,321 14,769 Exploration and Production 47,210 34,700 46,104 63,278 53,979 Refining and Marketing 220,134 176,350 7,760 7,219 7,987 Gas, Power and Renewables 28,561 26,110 Other businesses 156 161 161 and corporate 668 546 ----------------------- --------------- Sales by continuing 63,850 81,979 76,896 operations 296,573 237,706 Less: sales between 8,236 8,511 10,595 businesses 35,318 29,604 sales to Innovene 2,271 4,158 1,593 operations 11,790 8,226 ----------------------- --------------- Third party sales of 53,343 69,310 64,708 continuing operations 249,465 199,876 ======================= =============== 5,534 5,824 3,509 Innovene sales 20,627 17,448 Less: sales to continuing 1,873 2,667 1,445 operations 8,251 6,169 ----------------------- --------------- Third party sales of 3,661 3,157 2,064 Innovene operations 12,376 11,279 ----------------------- --------------- 57,004 72,467 66,772 Total third party sales 261,841 211,155 ======================= =============== By geographical area 18,259 32,863 18,204 UK 96,134 60,151 12,549 16,904 14,661 Rest of Europe 64,305 44,858 22,216 30,724 23,185 USA 103,185 87,200 13,872 11,963 20,693 Rest of World 59,628 47,862 ----------------------- --------------- Sales by continuing 66,896 92,454 76,743 operations 323,252 240,071 11,282 18,986 10,442 Less: sales between areas 61,997 31,969 sales to Innovene 2,271 4,158 1,593 operations 11,790 8,226 ----------------------- --------------- 53,343 69,310 64,708 249,465 199,876 ======================= =============== Notes 6. Operating profits are after charging: Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million Exploration expense 17 3 11 UK 32 26 10 1 - Rest of Europe 2 25 143 120 117 USA 425 361 88 53 80 Rest of World 225 225 ----------------------- -------------- 258 177 208 684 637 ======================= ============== Production and similar taxes (a) 112 95 133 UK 495 335 535 739 697 Overseas 2,515 1,814 ----------------------- -------------- 647 834 830 3,010 2,149 ======================= ============== (a) Production taxes are charged against Exploration and Production's operating profit. 7. Finance costs 188 237 278 Interest payable 910 644 (45) (93) (106) Capitalized (351) (204) ----------------------- -------------- 143 144 172 559 440 Early redemption of finance - - - leases 57 - ----------------------- -------------- 143 144 172 616 440 ======================= ============== 8. Other finance expense Interest on pension and other post-retirement benefit 519 502 497 plan liabilities 2,022 2,012 Expected return on pension and other post-retirement (501) (528) (521) benefit plan assets (2,138) (1,983) ----------------------- -------------- Interest net of expected return 18 (26) (24) on plan assets (116) 29 Unwinding of discount 50 49 57 on provisions 201 196 Unwinding of discount on deferred consideration for acquisition of investment 17 14 9 in TNK-BP 57 91 Change in discount rate 41 - - for provision - 41 ----------------------- -------------- 126 37 42 142 357 (5) - 1 Innovene operations 3 (17) ----------------------- -------------- 121 37 43 145 340 ======================= Continuing operations ============== Notes 9. Dividends paid Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== Dividends per ordinary share 7.10 8.925 8.925 cents 34.85 27.70 3.910 5.119 5.061 pence 19.152 15.251 42.6 53.55 53.55 Dividends per ADS (cents) 209.10 166.20 ======================= ============== 10. Analysis of changes in net debt Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== $ million $ million Opening balance 20,445 19,302 22,159 Finance debt 23,091 22,325 Less: Cash and cash 1,741 1,360 2,182 equivalents 1,359 2,056 ----------------------- --------------- 18,704 17,942 19,977 Opening net debt 21,732 20,269 ----------------------- --------------- Closing balance 23,091 22,159 19,162 Finance debt 19,162 23,091 Less: Cash and cash 1,359 2,182 2,960 equivalents 2,960 1,359 ----------------------- --------------- 21,732 19,977 16,202 Closing net debt 16,202 21,732 ----------------------- --------------- Decrease (increase) (3,028) (2,035) 3,775 in net debt 5,530 (1,463) ======================= =============== Movement in cash and cash equivalents (excluding (460) 896 783 exchange adjustments) 1,689 (788) Net cash outflow (inflow) from financing(excluding (2,535) (3,060) 2,936 share capital) 3,803 (431) - - - Adoption of IAS 39 (147) - - 8 48 Fair value hedge adjustment 171 - 37 33 11 Other movements 146 68 ----------------------- -------------- Movement in net debt before (2,958) (2,123) 3,778 exchange effects 5,662 (1,151) (70) 88 (3) Exchange adjustments (132) (312) ----------------------- -------------- Decrease (increase) (3,028) (2,035) 3,775 in net debt 5,530 (1,463) ======================= ============== Notes 11. TNK-BP Operational and Financial Information Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== Production (Net of royalties) (BP share) 884 930 936 Crude oil (mb/d) 911 830 515 449 530 Natural gas (mmcf/d) 482 463 972 1,007 1,027 Total hydrocarbons (mboe/d)(a) 994 910 ======================= ============== $ million $ million Income statement (BP share) 659 1,253 1,029 Profit before interest and tax 3,817 2,421 (22) (37) (30) Interest expense * (128) (101) (184) (347) (234) Taxation (976) (675) (17) (46) (31) Minority interest (104) (43) ----------------------- -------------- 436 823 734 Net Income (b) 2,609 1,602 ======================= ============== * Excludes unwinding of discount 17 14 9 on deferred consideration 57 91 ======================= ============== Cash Flow Additional investment in - - - TNK-BP joint venture - (1,416) Dividends related to period - - - prior to acquisition - 166 ----------------------- -------------- Net investment in TNK-BP - - - joint venture - (1,250) ======================= ============== 610 750 525 Dividends received 1,950 1,760 - - 771 Dividends receivable 771 - ======================= ============== Fourth Third Fourth Quarter Quarter Quarter Year 2004 2005 2005 2005 2004 ======================= ============== Average oil marker prices ($/bbl) 37.75 57.13 53.23 Urals (NWE - cif) 50.29 34.08 38.82 57.39 54.07 Urals (Med - cif) 50.84 34.45 22.30 36.60 31.73 Domestic Oil 28.77 20.61 ======================= ============== Balance Sheet 31 December 31 December 2005 2004 ========================== Investments in jointly controlled entities 8,089 8,294 ========================== Deferred consideration Due within one year 1,227 1,227 Due after more than one year - 1,194 -------------------------- 1,227 2,421 ========================== (a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels. (b) Fourth quarter 2005 includes a net gain of $270 million on the disposal of non-core producing assets in the Saratov region, along with the Orsk refinery. 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 existing provisions are adequate for its share of any liabilities arising from tax claims not covered by these indemnities. Notes 12. 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 Fourth Quarter 2005 Exploration and Production 1,292 - 1,292 Refining and Marketing 71 8 79 Gas, Power and Renewables 22 - 22 Other businesses and corporate 21 - 21 --------------------------------------- Continuing operations 1,406 8 1,414 Innovene operations (17) - (17) --------------------------------------- 1,389 8 1,397 ======================================= Third Quarter 2005 Exploration and Production 1,523 - 1,523 Refining and Marketing 126 4 130 Gas, Power and Renewables (2) - (2) Other businesses and corporate 62 - 62 --------------------------------------- Continuing operations 1,709 4 1,713 Innovene operations - - - --------------------------------------- 1,709 4 1,713 ======================================= Fourth Quarter 2004 Exploration and Production 889 - 889 Refining and Marketing 71 7 78 Gas, Power and Renewables 7 - 7 Other businesses and corporate (17) - (17) --------------------------------------- Continuing operations 950 7 957 Innovene operations (2) 2 - --------------------------------------- 948 9 957 ======================================= Notes 12. Equity-accounted entities (continued) Profit (loss) Minority for the Interest Tax interest period ---------------------------------------- $ million Fourth Quarter 2005 Exploration and Production (56) (313) (30) 893 Refining and Marketing (8) (27) - 44 Gas, Power and Renewables (1) (1) - 20 Other businesses and corporate (10) - - 11 --------------------------------------- Continuing operations (75) (341) (30) 968 Innovene operations - - - (17) --------------------------------------- (75) (341) (30) 951 ======================================= Third Quarter 2005 Exploration and Production (63) (421) (46) 993 Refining and Marketing (6) (23) - 101 Gas, Power and Renewables (1) (4) - (7) Other businesses and corporate (17) - - 45 --------------------------------------- Continuing operations (87) (448) (46) 1,132 Innovene operations - - - - --------------------------------------- (87) (448) (46) 1,132 ======================================= Fourth Quarter 2004 Exploration and Production (48) (376) (17) 448 Refining and Marketing (3) (25) - 50 Gas, Power and Renewables (2) (1) - 4 Other businesses and corporate (1) 4 - (14) --------------------------------------- Continuing operations (54) (398) (17) 488 Innovene operations - - - - --------------------------------------- (54) (398) (17) 488 ======================================= Notes 12. Equity-accounted entities (continued) RC profit Profit (loss) Inventory (loss) before holding before interest gains interest and tax (losses) and tax --------------------------------------- $ million Year 2005 Exploration and Production 4,819 - 4,819 Refining and Marketing 345 (2) 343 Gas, Power and Renewables 34 - 34 Other businesses and corporate 84 (5) 79 --------------------------------------- Continuing operations 5,282 (7) 5,275 Innovene operations (14) - (14) --------------------------------------- 5,268 (7) 5,261 ======================================= Year 2004 Exploration and Production 3,246 - 3,246 Refining and Marketing 336 21 357 Gas, Power and Renewables 15 - 15 Other businesses and corporate 23 7 30 --------------------------------------- Continuing operations 3,620 28 3,648 Innovene operations (19) 10 (9) --------------------------------------- 3,601 38 3,639 ======================================= Profit (loss) Minority for the Interest Tax interest period ---------------------------------------- $ million Year 2005 Exploration and Production (227) (1,250) (104) 3,238 Refining and Marketing (24) (81) - 238 Gas, Power and Renewables (7) (8) - 19 Other businesses and corporate (31) - - 48 --------------------------------------- Continuing operations (289) (1,339) (104) 3,543 Innovene operations - - - (14) --------------------------------------- (289) (1,339) (104) 3,529 ======================================= Year 2004 Exploration and Production (189) (1,029) (43) 1,985 Refining and Marketing (15) (83) - 259 Gas, Power and Renewables (7) (2) - 6 Other businesses and corporate (4) 4 - 30 --------------------------------------- Continuing operations (215) (1,110) (43) 2,280 Innovene operations (3) - - (12) --------------------------------------- (218) (1,110) (43) 2,268 ======================================= Notes 13. First quarter results BP's first quarter results will be announced on 25 April 2006. 14. Statutory accounts The above financial information does not constitute statutory accounts. The summarized group income statement, summarized group balance sheet, summarized group cash flow statement, group statement of recognized income and expenses and the notes thereon (except Note 11) for the years ended 31 December 2005 and 2004 are an extract from BP Annual Report and Accounts 2005, approved by a duly appointed and authorised committee of the Board of Directors at the Results Committee meeting held on 6 February 2006, but not yet delivered to the UK Registrar of Companies; the report of the auditors on those accounts was unqualified. BP Annual Report and Accounts 2005 will be published on 14 March 2006. 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 This information is provided by RNS The company news service from the London Stock Exchange

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