4Q06 Part 2 of 2

BP PLC 06 February 2007 Summarized Group Income Statement -------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ============================ =================== $ million $ million 62,410 68,540 61,946 Sales and other operating revenues (Note 4) 265,906 239,792 Earnings from jointly controlled entities - after 835 1,878 284 interest and tax 3,553 3,083 133 88 125 Earnings from associates - after interest and tax 442 460 229 220 177 Interest and other revenues 701 613 ---------------------------- ------------------- 63,607 70,726 62,532 Total revenues 270,602 243,948 210 2,276 300 Gain on sale of businesses and fixed assets 3,714 1,538 ---------------------------- ------------------- 63,817 73,002 62,832 Total revenues and other income 274,316 245,486 43,243 48,431 44,506 Purchases 187,183 163,026 6,118 6,275 6,425 Production and manufacturing expenses 23,793 21,092 830 1,202 632 Production and similar taxes (Note 5) 3,621 3,010 2,351 2,194 2,441 Depreciation, depletion and amortization 9,128 8,771 Impairment and losses on sale of businesses and 124 387 60 fixed assets 549 468 208 351 408 Exploration expense (Note 5) 1,045 684 4,013 3,630 4,205 Distribution and administration expenses 14,447 13,706 1,350 (493) (296) Fair value (gain) loss on embedded derivatives (608) 2,047 ---------------------------- ------------------- Profit before interest and taxation from 5,580 11,025 4,451 continuing operations 35,158 32,682 172 169 205 Finance costs (Note 6) 718 616 43 (52) (56) Other finance (income) expense (Note 7) (202) 145 ---------------------------- ------------------- 5,365 10,908 4,302 Profit before taxation from continuing operations 34,642 31,921 Taxation (includes overseas taxation of 2,029 4,614 1,347 $9,174 million, 2005 $9,082 million) 12,331 9,473 ---------------------------- ------------------- 3,336 6,294 2,955 Profit from continuing operations 22,311 22,448 442 - - Profit (loss) from Innovene operations (Note 3) (25) 184 ---------------------------- ------------------- 3,778 6,294 2,955 Profit for the period 22,286 22,632 ============================ =================== Attributable to: 3,685 6,231 2,880 BP shareholders 22,000 22,341 93 63 75 Minority interest 286 291 ---------------------------- ----------------- 3,778 6,294 2,955 22,286 22,632 ============================ ================= Earnings per share - cents Profit for the period attributable to BP shareholders 17.90 31.46 15.04 Basic 109.84 105.74 17.68 31.40 14.88 Diluted 109.00 104.52 Profit from continuing operations attributable to BP shareholders 15.82 31.46 15.04 Basic 109.97 104.87 15.62 31.40 14.88 Diluted 109.12 103.66 Summarized Group Balance Sheet -------------------------------------- 31 December 31 December 2006 2005 =========================== $ million Non-current assets Property, plant and equipment 90,999 85,947 Goodwill 10,780 10,371 Other intangible assets 5,246 4,772 Investments in jointly controlled entities 15,074 13,556 Investments in associates 5,975 6,217 Other investments 1,697 967 --------------------------- Fixed assets 129,771 121,830 Loans 817 821 Other receivables 862 770 Derivative financial instruments 3,025 3,909 Prepayments and accrued income 1,034 1,012 Defined benefit pension plan surplus 6,753 3,282 --------------------------- 142,262 131,624 --------------------------- Current assets Loans 141 132 Inventories 18,915 19,760 Trade and other receivables 38,692 40,902 Derivative financial instruments 10,373 10,056 Prepayments and accrued income 3,006 1,268 Current tax receivable 544 212 Cash and cash equivalents 2,590 2,960 --------------------------- 74,261 75,290 Assets classified as held for sale 1,078 - --------------------------- 75,339 75,290 --------------------------- Total assets 217,601 206,914 =========================== Current liabilities Trade and other payables 42,236 42,136 Derivative financial instruments 9,424 10,036 Accruals and deferred income 6,147 5,017 Finance debt 12,924 8,932 Current tax payable 2,635 4,274 Provisions 1,932 1,102 --------------------------- 75,298 71,497 Liabilities directly associated with the assets classified as held for 54 - sale --------------------------- 75,352 71,497 --------------------------- Non-current liabilities Other payables 1,430 1,935 Derivative financial instruments 4,203 5,871 Accruals and deferred income 961 989 Finance debt 11,086 10,230 Deferred tax liabilities 18,116 16,443 Provisions 11,712 9,954 Defined benefit pension plan and other Post-retirement benefit plan deficits 9,276 9,230 --------------------------- 56,784 54,652 --------------------------- Total liabilities 132,136 126,149 --------------------------- Net assets 85,465 80,765 =========================== Equity BP shareholders' equity 84,624 79,976 Minority interest 841 789 --------------------------- 85,465 80,765 =========================== Group Statement of Recognized Income and Expense --------------------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================= $ million $ million (320) 531 1,032 Currency translation differences 2,025 (2,502) Exchange gain on translation of foreign operations transferred to gain or loss on sale of businesses (315) - - and fixed assets - (315) Actuarial gain relating to pensions and other 975 - 2,615 post-retirement benefits 2,615 975 236 144 264 Available-for-sale investments marked to market 561 322 Available-for-sale investments - recycled to the - (1) (269) income statement (695) (60) (48) (15) 141 Cash flow hedges marked to market 413 (212) 43 (26) (143) Cash flow hedges - recycled to the income statement (93) 36 - 5 (11) Cash flow hedges - recycled to the balance sheet (6) - (295) (166) (814) Taxation (934) (259) --------------------------- ----------------- 276 472 2,815 Net income (expense) recognized directly in equity 3,886 (2,015) 3,778 6,294 2,955 Profit for the period 22,286 22,632 --------------------------- ----------------- 4,054 6,766 5,770 Total recognized income and expense for the period 26,172 20,617 =========================== ================= Attributable to: 3,961 6,703 5,646 BP shareholders 25,837 20,326 93 63 124 Minority interest 335 291 --------------------------- ----------------- 4,054 6,766 5,770 26,172 20,617 =========================== ================= Effect of change in accounting policy - adoption of IAS 32 and IAS 39 on 1 January 2005 (243) - - BP shareholders - (243) - - - Minority interest - - --------------------------- ----------------- (243) - - - (243) =========================== ================= Movement in BP Shareholders' Equity -------------------------------------- $ million Movement in BP shareholders' equity At 31 December 2005 79,976 Profit for the year 22,000 Distribution to shareholders (7,686) Currency translation differences (net of tax) 1,756 Actuarial gain on pension and other post-retirement benefit plans (net of tax) 1,795 Share-based payments (net of tax) 773 Repurchase of ordinary share capital (15,481) Issue of ordinary share capital for TNK-BP 1,250 Available-for-sale investments (net of tax) (26) Cash flow hedges (net of tax) 267 -------------- At 31 December 2006 84,624 ============== Summarized Group Cash Flow Statement --------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================== $ million $ million Operating activities Profit before taxation from continuing 5,365 10,908 4,302 operations 34,642 31,921 Adjustments to reconcile profits before tax to net cash provided by operating activities 81 232 265 Exploration expenditure written off 624 305 2,351 2,194 2,441 Depreciation, depletion and amortization 9,128 8,771 Impairment and (gain) loss on sale of (86) (1,889) (240) businesses and fixed assets (3,165) (1,070) Earnings from jointly controlled entities (968) (1,966) (409) Associates (3,995) (3,543) Dividends received from jointly controlled 844 2,407 809 entities and associates 4,495 2,833 (4,171) (6,756) (2,198) Working capital and other movements (13,557) (13,466) --------------------------- ------------------ Net cash provided by operating activities 3,416 5,130 4,970 of continuing operations 28,172 25,751 Net cash provided by operating activities 823 - - of Innovene operations - 970 --------------------------- ------------------ 4,239 5,130 4,970 Net cash provided by operating activities 28,172 26,721 --------------------------- ------------------ Investing activities (3,476) (3,945) (4,473) Capital expenditure (15,125) (12,281) (60) (102) (127) Acquisitions, net of cash acquired (229) (60) (132) - (11) Investment in jointly controlled entities (37) (185) (252) (159) (103) Investment in associates (570) (619) 825 2,662 918 Proceeds from disposal of fixed assets 5,963 2,803 8,397 135 (100) Proceeds from disposal of businesses 291 8,397 32 33 26 Proceeds from loan repayments 189 123 93 - - Other - 93 --------------------------- ------------------ 5,427 (1,376) (3,870) Net cash used in investing activities (9,518) (1,729) --------------------------- ------------------ Financing activities (3,687) (3,430) (3,449) Net repurchase of shares (15,151) (11,315) 685 706 2,215 Proceeds from long-term financing 3,831 2,475 (1,197) (996) (1,874) Repayments of long-term financing (3,655) (4,820) (2,423) 294 3,348 Net increase (decrease) in short-term debt 3,873 (1,457) (1,856) (1,943) (1,927) Dividends paid - BP shareholders (7,686) (7,359) (405) (57) (72) - Minority interest (283) (827) --------------------------- ------------------ (8,883) (5,426) (1,759) Net cash used in financing activities (19,071) (23,303) --------------------------- ------------------ Currency translation differences relating to (5) 19 50 cash and cash equivalents 47 (88) --------------------------- ------------------ Increase (decrease) in cash and cash 778 (1,653) (609) Equivalents (370) 1,601 Cash and cash equivalents at beginning 2,182 4,852 3,199 of period 2,960 1,359 --------------------------- ------------------ 2,960 3,199 2,590 Cash and cash equivalents at end of period 2,590 2,960 =========================== ================== Summarized Group Cash Flow Statement -------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================= $ million $ million Working capital and other movements (228) (141) (80) Interest receivable (473) (479) 208 120 89 Interest received 500 401 172 169 205 Finance costs 718 616 (292) (267) (314) Interest paid (1,242) (1,127) 43 (52) (56) Other finance (income) expense (202) 145 56 134 77 Share-based payments 416 278 Net operating charge for pensions and other (398) (36) (128) post-retirement benefits, less contributions (261) (435) (284) (115) 446 Net charge for provisions, less payments 340 600 (318) 1,477 861 (Increase) decrease in inventories 995 (6,638) (Increase) decrease in other current and non-current (386) (1,616) 2,869 Assets 3,596 (16,427) Increase (decrease) in other current and non-current 300 (1,763) (2,476) Liabilities (4,211) 18,628 (3,044) (4,666) (3,691) Income taxes paid (13,733) (9,028) --------------------------- ------------------ (4,171) (6,756) (2,198) (13,557) (13,466) =========================== ================== Capital Expenditure and Acquisitions -------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== =================== $ million $ million By business Exploration and Production 211 220 309 UK 955 821 79 52 49 Rest of Europe 244 197 1,001 1,160 1,234 USA 4,605 3,870 1,671 2,505 1,905 Rest of World (a) 7,314 5,349 --------------------------- ------------------- 2,962 3,937 3,497 13,118 10,237 --------------------------- ------------------- Refining and Marketing 203 67 217 UK 428 408 291 149 395 Rest of Europe 710 568 535 289 540 USA 1,339 1,226 379 117 334 Rest of World 667 658 --------------------------- ------------------- 1,408 622 1,486 3,144 2,860 --------------------------- ------------------- Gas, Power and Renewables 10 17 43 UK 67 30 15 7 18 Rest of Europe 37 26 42 187 268 USA 507 96 57 9 35 Rest of World 77 83 --------------------------- ------------------- 124 220 364 688 235 --------------------------- ------------------- Other businesses and corporate 90 13 66 UK 137 339 71 - - Rest of Europe - 189 131 32 21 USA 141 277 4 - 3 Rest of World 3 12 --------------------------- ------------------- 296 45 90 281 817 --------------------------- ------------------- 4,790 4,824 5,437 17,231 14,149 =========================== =================== By geographical area 514 317 635 UK 1,587 1,598 456 208 462 Rest of Europe 991 980 1,709 1,668 2,063 USA 6,592 5,469 2,111 2,631 2,277 Rest of World 8,061 6,102 --------------------------- ------------------- 4,790 4,824 5,437 17,231 14,149 =========================== =================== Included above: 60 106 205 Acquisitions and asset exchanges 321 211 140 - - Innovene operations - 497 =========================== =================== (a) Third quarter and year 2006 included $1 billion for the purchase of shares in Rosneft. Exchange rates 1.75 1.87 1.91 US dollar/sterling average rate for the period 1.84 1.82 1.73 1.87 1.96 US dollar/sterling period-end rate 1.96 1.73 1.19 1.27 1.29 US dollar/euro average rate for the period 1.25 1.24 1.18 1.27 1.31 US dollar/euro period-end rate 1.31 1.18 --------------------------- ------------------- Analysis of Profit Before Interest and Tax ------------------------------------------ Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== =================== $ million $ million By business Exploration and Production (295) 1,306 1,534 UK (a) 5,839 2,129 398 264 249 Rest of Europe (a) 1,209 2,321 2,972 3,820 948 USA 9,327 9,492 3,499 4,539 2,326 Rest of World 13,254 11,560 --------------------------- ------------------- 6,574 9,929 5,057 29,629 25,502 --------------------------- ------------------- Refining and Marketing (590) 46 28 UK 85 (600) (266) 387 261 Rest of Europe 2,119 2,672 (316) 65 (951) USA 1,468 3,459 99 219 (44) Rest of World 1,369 1,395 --------------------------- ------------------- (1,073) 717 (706) 5,041 6,926 --------------------------- ------------------- Gas, Power and Renewables (157) (46) 147 UK 217 70 (19) (15) 144 Rest of Europe 134 (16) 141 141 116 USA 682 801 161 72 61 Rest of World 288 317 --------------------------- ------------------- 126 152 468 1,321 1,172 --------------------------- ------------------- Other businesses and corporate (141) (327) 280 UK (268) (673) (124) 11 (98) Rest of Europe (133) (79) (22) 81 (307) USA (367) (405) (122) 22 (140) Rest of World (117) (80) --------------------------- ------------------- (409) (213) (265) (885) (1,237) --------------------------- ------------------- 5,218 10,585 4,554 35,106 32,363 234 440 (103) Unrealized profit in inventory 52 (208) Net profit on transactions between continuing 128 - - and Innovene operations - 527 --------------------------- ------------------- 5,580 11,025 4,451 Total for continuing operations 35,158 32,682 --------------------------- ------------------- Innovene operations 490 - (40) UK (185) 423 (1) - 25 Rest of Europe (36) 406 (42) - 15 USA 16 (166) 21 - - Rest of World 21 5 --------------------------- ------------------- 468 - - (184) 668 Net profit on transactions between continuing (128) - - and Innovene operations - (527) --------------------------- ------------------- 340 - - Total for Innovene operations (184) 141 --------------------------- ------------------- 5,920 11,025 4,451 Total for period 34,974 32,823 =========================== =================== By geographical area (1,039) 989 1,988 UK (a) 5,897 1,167 31 695 533 Rest of Europe (a) 3,282 5,206 2,974 4,491 (289) USA 11,164 13,139 3,614 4,850 2,219 Rest of World 14,815 13,170 --------------------------- ------------------- 5,580 11,025 4,451 Total for continuing operations 35,158 32,682 =========================== =================== (a) Exploration and Production profit by region for the third quarter 2006 has been restated, reducing Rest of Europe and increasing UK by $235 million. There is no impact on total segment or total group profits. Analysis of Replacement Cost Profit Before Interest and Tax -------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================= $ million $ million By business Exploration and Production (295) 1,306 1,534 UK (a) 5,839 2,129 398 264 249 Rest of Europe (a) 1,209 2,321 2,964 3,827 952 USA 9,344 9,475 3,499 4,538 2,328 Rest of World 13,255 11,560 --------------------------- ----------------- 6,566 9,935 5,063 29,647 25,485 --------------------------- ----------------- Refining and Marketing (516) 138 190 UK 351 (581) (170) 765 336 Rest of Europe 2,249 1,567 354 388 (421) USA 1,353 2,247 167 212 207 Rest of World 1,330 1,161 --------------------------- ----------------- (165) 1,503 312 5,283 4,394 --------------------------- ----------------- Gas, Power and Renewables (157) (46) 147 UK 217 70 (18) (17) 143 Rest of Europe 123 (16) 147 150 114 USA 692 777 157 65 66 Rest of World 344 246 --------------------------- ----------------- 129 152 470 1,376 1,077 --------------------------- ----------------- Other businesses and corporate (141) (327) 280 UK (268) (673) (124) 9 (97) Rest of Europe (137) (79) (22) 35 (319) USA (425) (405) (122) 22 (140) Rest of World (117) (80) --------------------------- ----------------- (409) (261) (276) (947) (1,237) --------------------------- ----------------- 6,121 11,329 5,569 35,359 29,719 234 440 (103) Unrealized profit in inventory 52 (208) Net profit on transactions between continuing 128 - - and Innovene operations - 527 --------------------------- ----------------- 6,483 11,769 5,466 Total for continuing operations 35,411 30,038 --------------------------- ----------------- Innovene operations 428 - (40) UK (185) 291 (4) - 25 Rest of Europe (36) 252 (127) - 15 USA 16 (253) 15 - - Rest of World 21 (5) --------------------------- ----------------- 312 - - (184) 285 Net profit on transactions between continuing (128) - - and Innovene operations - (527) --------------------------- ----------------- 184 - - Total for Innovene operations (184) (242) --------------------------- ----------------- 6,667 11,769 5,466 Total for period 35,227 29,796 =========================== ================= By geographical area (965) 1,081 2,150 UK (a) 6,163 1,186 128 1,069 609 Rest of Europe (a) 3,398 4,100 3,643 4,784 230 USA 11,017 11,888 3,677 4,835 2,477 Rest of World 14,833 12,864 --------------------------- ----------------- 6,483 11,769 5,466 Total for continuing operations 35,411 30,038 =========================== ================= (a) Exploration and Production profit by region for the third quarter 2006 has been restated, reducing Rest of Europe and increasing UK by $235 million. There is no impact on total segment or total group profits. Analysis of Non-operating Items ---------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ========================= ================= $ million $ million By business Exploration and Production (975) 540 289 UK 821 (1,996) 6 (27) (13) Rest of Europe 43 1,036 (121) 2,016 (269) USA 1,758 (231) 111 (63) (184) Rest of World (240) 193 ------------------------- ----------------- (979) 2,466 (177) 2,382 (998) ------------------------- ----------------- Refining and Marketing (8) (27) 23 UK 15 (26) (33) (18) (89) Rest of Europe 93 (97) 118 (264) 25 USA (589) (607) (27) (122) (12) Rest of World 97 (59) ------------------------- ----------------- 50 (431) (53) (384) (789) ------------------------- ----------------- Gas, Power and Renewables (306) (20) 56 UK 88 (45) - - 189 Rest of Europe 189 - - 5 - USA 4 26 (1) (70) (30) Rest of World (100) (1) ------------------------- ----------------- (307) (85) 215 181 (20) ------------------------- ----------------- Other businesses and corporate (57) (25) 13 UK (12) (111) - (2) (2) Rest of Europe (5) 11 (7) 105 (199) USA (75) (284) - - - Rest of World 17 - ------------------------- ----------------- (64) 78 (188) (75) (384) ------------------------- ----------------- (1,300) 2,028 (203) Total before taxation for continuing operations 2,104 (2,191) 421 (803) 51 Taxation credit (charge) (851) 717 ------------------------- ----------------- (879) 1,225 (152) Total after taxation for continuing operations 1,253 (1,474) ------------------------- ----------------- Innovene operations 242 - (40) UK (185) (83) (49) - 25 Rest of Europe (36) (273) (51) - 15 USA 16 (259) (6) - - Rest of World 21 (32) ------------------------- ----------------- 136 - - Total before taxation for Innovene operations (a) (184) (647) 190 - - Taxation credit (charge) (7) 367 ------------------------- ----------------- 326 - - Total after taxation for Innovene operations (191) (280) ------------------------- ----------------- (553) 1,225 (152) Total after taxation for period 1,062 (1,754) ========================= ================= (a) Includes the loss on remeasurement to fair value of $184 million in 2006 and $591 million in 2005, and impairment charges of $59 million and a gain on disposal of $3 million in 2005. Depreciation of Fixed Asset Revaluation Adjustment -------------------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ========================= ================= $ million $ million Exploration and Production 7 13 6 UK 34 33 62 48 43 USA 194 272 5 4 3 Rest of World 16 18 ------------------------- ----------------- 74 65 52 244 323 ------------------------- ----------------- Refining and Marketing 26 25 25 USA 100 102 ------------------------- ----------------- 26 25 25 100 102 ------------------------- ----------------- Gas, Power and Renewables 5 6 5 USA 22 22 ------------------------- ----------------- 5 6 5 22 22 ------------------------- ----------------- 105 96 82 Total depreciation of revaluation adjustment (a)(b) 366 447 ========================= ================= (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 Year 2005 2006 2006 2006 2005 =========================== ================= $ million $ million 19,162 19,973 24,010 Gross debt 24,010 19,162 2,960 3,199 2,590 Cash and cash equivalents 2,590 2,960 --------------------------- ----------------- 16,202 16,774 21,420 Net debt 21,420 16,202 =========================== ================= 80,765 85,070 85,465 Equity 85,465 80,765 17% 16% 20% Net debt ratio 20% 17% =========================== ================= Production and Realizations -------------------------------------- Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================= Production (a)(d) Crude oil (mb/d) (net of royalties) 244 199 229 UK 240 261 69 55 54 Rest of Europe 58 71 432 404 417 USA 427 491 1,655 1,592 1,549 Rest of World 1,578 1,566 --------------------------- ----------------- 2,400 2,250 2,249 Total crude oil production 2,303 2,389 =========================== ================= Natural gas liquids (mb/d) (net of royalties) 16 14 10 UK 13 16 4 3 3 Rest of Europe 3 4 111 119 116 USA 120 122 33 36 38 Rest of World 36 31 --------------------------- ----------------- 164 172 167 Total natural gas liquids production 172 173 =========================== ================= Liquids (b) (mb/d) (net of royalties) 260 213 239 UK 253 277 73 58 57 Rest of Europe 61 75 543 523 533 USA 547 613 1,688 1,628 1,587 Rest of World 1,614 1,597 --------------------------- ----------------- 2,564 2,422 2,416 Total liquids production 2,475 2,562 =========================== ================= Natural gas (mmcf/d) (net of royalties) 1,156 754 888 UK 936 1,090 107 100 90 Rest of Europe 92 108 2,359 2,332 2,196 USA 2,376 2,547 4,836 4,900 5,082 Rest of World 5,013 4,679 --------------------------- ----------------- 8,458 8,086 8,256 Total natural gas production 8,417 8,424 =========================== ================= Average realizations (c) Crude oil ($/bbl) 54.70 64.74 56.51 UK 62.45 51.22 57.40 68.83 55.86 USA 62.03 50.98 49.93 67.05 56.29 Rest of World 61.11 48.32 53.92 67.22 56.38 BP Average 61.91 50.27 =========================== ================= Natural gas liquids ($/bbl) 43.68 46.48 48.40 UK 47.21 37.95 37.78 38.50 35.32 USA 36.13 31.94 42.10 41.15 31.22 Rest of World 36.03 35.11 39.29 40.08 35.21 BP Average 37.17 33.23 =========================== ================= Liquids ($/bbl) (b) 54.02 63.57 56.18 UK 61.67 50.45 53.98 62.95 52.11 USA 57.25 47.83 49.51 65.50 54.63 Rest of World 59.54 47.56 52.44 64.15 54.13 BP Average 59.23 48.51 =========================== ================= Natural gas ($/mcf) 6.96 5.55 5.61 UK 6.33 5.53 9.48 5.51 5.03 USA 5.74 6.78 4.08 3.62 3.70 Rest of World 3.70 3.46 6.24 4.49 4.38 BP Average 4.72 4.90 =========================== ================= (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 that will be used in preparing the Annual Report and Accounts 2006, which do not differ significantly from those used for the 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 -------------------------------------------- Fourth Year Fourth Year Quarter 2005 Quarter 2005 2005 2005 -------------------------------------------- $ million Profit before interest and tax Exploration and Production 6,574 25,502 6,575 25,508 Refining and Marketing (1,073) 6,926 (1,068) 6,942 Gas, Power and Renewables 126 1,172 114 1,104 Other businesses and corporate (409) (1,237) (403) (1,191) -------------------------------------------- 5,218 32,363 5,218 32,363 Unrealized profit in inventory 234 (208) 234 (208) Net profit on transactions between continuing and Innovene operations 128 527 128 527 -------------------------------------------- Profit before interest and tax from continuing operations 5,580 32,682 5,580 32,682 ============================================ 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 ---------------------------------------------- Fourth Year Fourth Year Quarter 2005 Quarter 2005 2005 2005 ---------------------------------------------- $ million Sales and other operating revenues Exploration and Production 14,769 47,210 14,769 47,210 Refining and Marketing 52,873 213,326 53,979 220,134 Gas, Power and Renewables 6,795 25,696 7,987 28,561 Other businesses and corporate 161 668 161 668 ---------------------------------------------- Sales by continuing operations 74,598 286,900 76,896 296,573 Less: sales between businesses 10,595 35,318 10,595 35,318 sales by continuing operations to 1,593 11,790 1,593 11,790 Innovene ---------------------------------------------- Third party sales of continuing operations 62,410 239,792 64,708 249,465 ============================================== Purchases 43,243 163,026 45,541 172,699 ============================================== 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. The period to 31 December 2006 includes a loss before tax of $184 million related to post-closing adjustments and is unchanged since 30 September 2006. Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ========================= ================= $ million $ million 335 - - Profit before tax from Innovene operations - 1,259 Net profit on transactions between continuing (128) - - and Innovene operations - (527) ------------------------- ----------------- 207 - - Profit before interest and taxation - 732 1 - - Other finance income (expense) - 3 (Loss) gain recognized on the remeasurement 133 - - to fair value (184) (591) ------------------------- ----------------- 341 - - (184) 144 Taxation (86) - - Related to profit before tax 166 (306) 187 - - Related to remeasurement to fair value (7) 346 ------------------------- ----------------- 442 - - Profit (loss) from Innovene operations (25) 184 ========================= ================= Earnings (loss) per share from Innovene operations - cents 2.08 - - Basic (0.13) 0.87 2.06 - - Diluted (0.12) 0.86 ========================= ================= The net cash flows of Innovene operations are presented below 823 - - Net cash provided by operating activities - 970 (163) - - Net cash used in investing activities - (524) Net cash provided by (used in) financing ------------------------- ----------------- (660) - - Activities - (446) ========================= ================= Notes -------------------------------------- 4. Sales and other operating revenues Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== =================== $ million $ million By business 14,769 12,932 12,255 Exploration and Production 52,600 47,210 52,873 61,169 53,776 Refining and Marketing 232,855 213,326 6,795 5,840 5,224 Gas, Power and Renewables 23,708 25,696 161 212 339 Other businesses and corporate 1,009 668 --------------------------- ------------------- 74,598 80,153 71,594 Sales by continuing operations 310,172 286,900 10,595 11,613 9,648 Less: sales between businesses 44,266 35,318 1,593 - - sales to Innovene operations - 11,790 --------------------------- ------------------- 62,410 68,540 61,946 Third party sales of continuing operations 265,906 239,792 3,509 - - Innovene sales - 20,627 1,445 - - Less: sales to continuing operations - 8,251 --------------------------- ------------------- 2,064 - - Third party sales of Innovene operations - 12,376 --------------------------- ------------------- 64,474 68,540 61,946 Total third party sales 265,906 252,168 =========================== =================== By geographical area 17,808 27,809 23,676 UK 105,518 92,765 14,661 20,412 18,576 Rest of Europe 76,768 64,305 21,283 27,447 23,368 USA 99,935 96,881 20,693 17,337 16,768 Rest of World 71,547 59,628 --------------------------- ------------------- 74,445 93,005 82,388 Sales by continuing operations 353,768 313,579 10,442 24,465 20,442 Less: sales between areas 87,862 61,997 1,593 - - sales to Innovene operations - 11,790 --------------------------- ------------------- 62,410 68,540 61,946 265,906 239,792 =========================== =================== 5. Profit before interest and taxation is after charging: Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ========================= ================= $ million $ million Exploration expense 11 7 6 UK 20 32 - - - Rest of Europe - 2 117 188 324 USA 633 425 80 156 78 Rest of World 392 225 ------------------------- ----------------- 208 351 408 1,045 684 ========================= ================= Production and similar taxes 133 96 (143) UK 260 495 697 1,106 775 Overseas 3,361 2,515 ------------------------- ----------------- 830 1,202 632 3,621 3,010 ========================= ================= Notes -------------------------------------- 6. Finance costs Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ========================= ================= $ million $ million 278 328 290 Interest payable 1,196 910 (106) (159) (85) Capitalized (478) (351) ------------------------- ----------------- 172 169 205 718 559 - - - Early redemption of finance leases - 57 ------------------------- ----------------- 172 169 205 718 616 ========================= ================= 7. Other finance (income) expense Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ========================= ================= $ million $ million Interest on pension and other post-retirement 497 489 496 benefit plan liabilities 1,940 2,022 Expected return on pension and other (521) (610) (619) post-retirement benefit plan assets (2,410) (2,138) ------------------------- ----------------- (24) (121) (123) Interest net of expected return on plan assets (470) (116) 57 63 67 Unwinding of discount on provisions 245 201 Unwinding of discount on deferred consideration 9 6 - for acquisition of investment in TNK-BP 23 57 ------------------------- ----------------- 42 (52) (56) (202) 142 1 - - Innovene operations - 3 ------------------------- ----------------- 43 (52) (56) Continuing operations (202) 145 ========================= ================= 8. Dividends paid Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 ========================= ================= $ million $ million Dividends per ordinary share 8.925 9.825 9.825 Cents 38.40 34.85 5.061 5.324 5.241 Pence 21.104 19.152 53.55 58.95 58.95 Dividends per ADS (cents) 230.40 209.10 ========================= ================= Notes -------------------------------------- 9. Analysis of changes in net debt Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================= $ million $ million Opening balance 22,159 19,286 19,973 Finance debt 19,162 23,091 2,182 4,852 3,199 Less: Cash and cash equivalents 2,960 1,359 --------------------------- ----------------- 19,977 14,434 16,774 Opening net debt 16,202 21,732 --------------------------- ----------------- Closing balance 19,162 19,973 24,010 Finance debt 24,010 19,162 2,960 3,199 2,590 Less: Cash and cash equivalents 2,590 2,960 --------------------------- ----------------- 16,202 16,774 21,420 Closing net debt 21,420 16,202 --------------------------- ----------------- 3,775 (2,340) (4,646) Decrease (increase) in net debt (5,218) 5,530 =========================== ================= Movement in cash and cash equivalents 783 (1,672) (659) (excluding exchange adjustments) (417) 1,689 Net cash outflow (inflow) from financing 2,936 (5) (3,689) (excluding share capital) (4,049) 3,803 - - - Adoption of IAS 39 - (147) 48 (515) (208) Fair value hedge adjustment (581) 171 - - (13) Debt acquired (13) - 11 (34) (57) Other movements (33) 146 --------------------------- ----------------- 3,778 (2,226) (4,626) Movement in net debt before exchange effects (5,093) 5,662 (3) (114) (20) Exchange adjustments (125) (132) --------------------------- ----------------- 3,775 (2,340) (4,646) Decrease (increase) in net debt (5,218) 5,530 =========================== ================= Notes -------------------------------------- 10. TNK-BP Operational and Financial Information Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================= Production (Net of royalties) (BP share) 936 867 837 Crude oil (mb/d) 876 911 530 472 602 Natural gas (mmcf/d) 544 482 1,027 948 941 Total hydrocarbons (mboe/d) (a) 970 994 =========================== ================= $ million $ million Income statement (BP share) 1,029 2,321 359 Profit before interest and tax 4,616 3,817 (30) (52) (52) Interest expense* (192) (128) (234) (651) (118) Taxation (1,467) (976) (31) (100) (6) Minority interest (193) (104) --------------------------- ----------------- 734 1,518 183 Net Income (b) 2,764 2,609 =========================== ================= * Excludes unwinding of discount on 9 6 - deferred consideration 23 57 =========================== ================= Cash Flow 525 2,000 500 Dividends received (c) 3,271 1,950 =========================== ================= Fourth Third Fourth Quarter Quarter Quarter Year 2005 2006 2006 2006 2005 =========================== ================= Average oil marker prices ($/bbl) 53.23 65.90 56.06 Urals (NWE - cif) 61.22 50.29 54.07 65.81 56.48 Urals (Med - cif) 61.35 50.84 31.73 39.83 26.33 Domestic Oil 34.39 28.77 =========================== ================= Balance Sheet 31 December 31 December 2006 2005 =========================== $ million Investments in jointly controlled entities 8,353 8,089 =========================== Deferred consideration Due within one year - 1,227 Due after more than one year - - --------------------------- - 1,227 =========================== (a) Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels. (b) Third quarter and year 2006 included a net gain of $892 million on the disposal of the Udmurtneft assets. Fourth quarter and year 2005 included a net gain of $270 million on the disposal of non-core producing assets in the Saratov region, along with the Orsk refinery. (c) Year 2006 includes $771 million declared in 2005. On 23 October 2006, TNK-BP received decisions from the Russian tax authorities in relation to the tax audits of certain TNK-BP Group companies for the years 2002 and 2003, resulting in a payment by TNK-BP of approximately $1.4 billion in settlement of these claims. At the present time, BP believes that its provisions are adequate for its share of any liabilities arising from these and other outstanding tax decisions not covered by the indemnities provided by our co-venturers in respect of historical tax liabilities related to assets contributed to the joint venture. Notes -------------------------------------- 11. Equity-accounted entities The group's profit for the period includes the following in respect of equity-accounted entities. RC profit Inventory Profit (loss) holding (loss) Profit before gains before (loss) interest (losses) interest Minority for the and tax and tax Interest Tax interest period ---------------------------------------------------------------------- $ million Fourth Quarter 2006 Exploration and Production 594 (2) 592 (87) (206) (6) 293 Refining and Marketing 147 (16) 131 (21) (19) - 91 Gas, Power and Renewables 39 - 39 (6) (8) - 25 Other businesses and corporate - - - - - - - ---------------------------------------------------------------------- Continuing operations 780 (18) 762 (114) (233) (6) 409 Innovene operations - - - - - - - ---------------------------------------------------------------------- 780 (18) 762 (114) (233) (6) 409 ====================================================================== Third Quarter 2006 Exploration and Production (a) 2,727 1 2,728 (87) (723) (100) 1,818 Refining and Marketing 138 8 146 (20) (25) - 101 Gas, Power and Renewables 56 - 56 (5) (4) - 47 Other businesses and corporate - - - - - - - ---------------------------------------------------------------------- Continuing operations 2,921 9 2,930 (112) (752) (100) 1,966 Innovene operations - - - - - - - ---------------------------------------------------------------------- 2,921 9 2,930 (112) (752) (100) 1,966 ====================================================================== Fourth Quarter 2005 Exploration and Production (b) 1,291 - 1,291 (56) (313) (30) 892 Refining and Marketing 88 8 96 (18) (27) - 51 Gas, Power and Renewables 27 - 27 (1) (1) - 25 Other businesses and corporate - - - - - - - ---------------------------------------------------------------------- Continuing operations 1,406 8 1,414 (75) (341) (30) 968 Innovene operations (17) - (17) - - - (17) ---------------------------------------------------------------------- 1,389 8 1,397 (75) (341) (30) 951 ====================================================================== Year 2006 Exploration and Production (a) 5,839 (1) 5,838 (324) (1,804) (193) 3,517 Refining and Marketing 486 1 487 (79) (67) - 341 Gas, Power and Renewables 179 - 179 (21) (20) - 138 Other businesses and corporate (1) - (1) - - - (1) ---------------------------------------------------------------------- Continuing operations 6,503 - 6,503 (424) (1,891) (193) 3,995 Innovene operations - - - - - - - ---------------------------------------------------------------------- 6,503 - 6,503 (424) (1,891) (193) 3,995 ====================================================================== Year 2005 Exploration and Production (b) 4,813 - 4,813 (227) (1,250) (104) 3,232 Refining and Marketing 392 (7) 385 (55) (81) - 249 Gas, Power and Renewables 77 - 77 (7) (8) - 62 Other businesses and corporate - - - - - - - ---------------------------------------------------------------------- Continuing operations 5,282 (7) 5,275 (289) (1,339) (104) 3,543 Innovene operations (14) - (14) - - - (14) ---------------------------------------------------------------------- 5,268 (7) 5,261 (289) (1,339) (104) 3,529 ====================================================================== (a) Third quarter and year 2006 included a net gain of $892 million on the disposal of the Udmurtneft assets. (b) Fourth quarter and year 2005 included a net gain of $270 million on the disposal of non-core producing assets in the Saratov region, along with the Orsk refinery. Notes -------------------------------------- 12. First quarter results BP's first quarter results will be announced on 24 April 2007. 13. Statutory accounts The financial information shown in this publication, which was approved by the Board of Directors on 5 February 2007, is unaudited and does not constitute statutory financial statements. The audited 2006 BP Annual Report and Accounts will be published on 6 March 2007 and delivered to the Registrar of Companies in due course. The 2005 BP Annual Report and Accounts have been filed with the Registrar of Companies; the report of the auditors on those accounts was unqualified and did not contain a statement under section 237(2) or section 237(3) of the Companies Act 1985. Contacts -------------------------------------- London United States Press Office Roddy Kennedy Ronnie Chappell +44 (0)20 7496 4624 +1 281 366 5174 Investor Relations Fergus MacLeod Rachael MacLean +44 (0)20 7496 4717 +1 212 451 8072 http://www.bp.com/investors This information is provided by RNS The company news service from the London Stock Exchange

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