Annual Report and Accounts 2009 - BG Group

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88 Financial Statements Notes to the accounts continued 6 FINANCE INCOME AND COSTS Interest receivable (a) www.bg-group.com 2009 £m 2008 £m 63 276 Net fair value gains and losses on interest rate and currency exchange rate derivatives 12 – Fair value hedge adjustments (8) – Finance income 67 276 Interest payable (91) (69) Finance lease charges (53) (57) Other finance charges (2) (15) Less: interest capitalised (b) 31 22 Unwinding of discount on provisions and pension obligations (c) (45) (31) Exchange losses (a) (22) – Net fair value gains and losses on interest rate and currency exchange rate derivatives – (34) Fair value hedge adjustments – (21) Finance costs (182) (205) Net finance (costs)/income (d) (115) 71 (a) Interest receivable includes exchange gains of £25m (2008 net exchange gains of £145m). Exchange losses (2008 net exchange gains) include the retranslation of certain borrowings in subsidiaries. Certain exposures relating to these borrowings are hedged using interest rate and currency derivative instruments; the net fair value gains and losses on such derivatives are reported separately. (b) Finance costs associated with general Group central borrowings used to finance major capital projects are capitalised up to the point that the project is ready for its intended use. The weighted average interest cost applicable to these borrowings is 1.9% per annum (2008 4.8%). Tax relief for capitalised interest is approximately £9m (2008 £6m). (c) Amount in respect of pension obligations represents the unwinding of discount on the plans’ liabilities offset by the expected return on the plans’ assets (see note 25, page 107). Also includes the unwinding of discount on decommissioning and other provisions (see note 20, page 102). (d) Excludes the Group’s share of net finance costs from joint ventures and associates of £47m (2008 £52m). 7 TAXATION Current tax UK – corporation tax at 28% and 50% (2008 28.5% and 50%) 1 240 1 710 – petroleum revenue tax at 50% (2008 50%) 14 27 – adjustments in respect of prior periods (73) (13) – less: double tax relief (460) (627) UK tax charge 721 1 097 Overseas tax charge 655 990 – adjustments in respect of prior periods 31 (19) Current tax charge 1 407 2 068 Deferred tax Temporary differences 209 232 Recognition of previously unrecognised deferred tax asset (20) – Deferred petroleum revenue tax at 50% (2008 50%) 2 18 Tax charge 1 598 2 318 The tax credit relating to disposals, re-measurements and impairments is £31m (2008 tax charge £70m). This consists of a tax charge on unrealised re-measurements of £36m (2008 tax charge £71m) and a tax credit on disposals and impairments of £67m (2008 tax credit £1m). The total tax charge reconciles with the charge calculated using the statutory rates of UK corporation tax as follows: Profit before taxation 3 862 5 468 Tax at UK statutory rates on profit Effect on tax charge of: 1 299 1 904 Non tax-deductible or non-taxable items 61 55 Overseas or petroleum revenue taxes at different rates to UK statutory rates 267 374 Prior year and other adjustments including unrelieved overseas tax losses (29) (15) Tax charge 1 598 2 318 2009 £m 2009 £m 2008 £m 2008 £m
8 DIVIDENDS £m 2009 2008 Pence per ordinary share £m Pence per ordinary share Prior year final dividend, paid in the year 220 6.55 193 5.76 Interim dividend, paid in the year 189 5.62 156 4.68 Total dividend paid in the year 409 12.17 349 10.44 Proposed final dividend for the year ended 31 December 2009 227 (a) 6.73 (a) Proposed final dividend is based on the shares in issue as at 31 December 2009 that are eligible for the dividend. The proposed final dividend for the year ended 31 December 2009 of 6.73p takes the 2009 full-year dividend to 12.35p per ordinary share. The final dividend of 6.55p (£220m) in respect of the year ended 31 December 2008 was paid to shareholders on 22 May 2009 (1 June 2009 to American Depositary Receipt (ADR) holders). The interim dividend was paid to shareholders on 11 September 2009 (18 September 2009 to ADR holders). The proposed final dividend of 6.73p per ordinary share (£227m) in respect of the financial year ended 31 December 2009 is payable on 21 May 2010 to shareholders (28 May 2010 to ADR holders) on the register at the close of business on 16 April 2010. 9 EARNINGS PER ORDINARY SHARE Earnings per ordinary share have been calculated by dividing the earnings for the financial year for the Group of £2 168m (2008 £3 127m) by 3 363m (2008 3 349m), being the weighted average number of ordinary shares in issue and ranking for dividend during the year. Earnings per ordinary share excluding disposals, re-measurements and impairments have been presented in order to reflect the underlying performance of the Group. 2009 2008 Basic earnings Basic earnings per ordinary per ordinary share share £m pence £m pence Earnings Disposals, re-measurements and impairments 2 168 64.5 3 127 93.4 (see note 5, page 87) 95 2.8 (59) (1.8) Earnings excluding disposals, re-measurements and impairments 2 263 67.3 3 068 91.6 The earnings figure used to calculate diluted earnings per ordinary share is the same as that used to calculate earnings per ordinary share given above, divided by 3 389m (2008 3 382m), being the weighted average number of ordinary shares in issue during the year as adjusted for dilutive equity instruments relating to the employee share schemes. A reconciliation of the weighted average number of ordinary shares used as the denominator in calculating the basic and diluted earnings per ordinary share is given below: Basic Dilutive potential ordinary shares: 3 363 3 349 Equity instruments outstanding during the year 26 33 Diluted basis 3 389 3 382 Diluted earnings per ordinary share (including disposals, re-measurements and impairments) (pence) 64.0 92.5 Diluted earnings per ordinary share (excluding disposals, re-measurements and impairments) (pence) 66.8 90.7 2009 Shares m 2008 Shares m BG Group Annual Report and Accounts 2009 89 Directors’ Report Business Review Directors’ Report Corporate Governance Financial Statements Shareholder Information
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A world leader in natural gas Annua
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Contents Directors’ Report: Busin
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ALGERIA UK NORWAY TUNISIA ITALY LIB
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E&P production (mmboe) 250 200 150
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Governance and risk One of the most
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Sustainability and safety BG Group
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Performance A cost leader BG Group
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Australia QGC BG Group has made sig
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Outlook Market context The challeng
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The Buzzard field (BG Group 21.73%)
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FPSOs, with the first targeted to c
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Dragon LNG, UK During 2009, work on
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Power Generation BG Group has a pro
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expenditure was £1 651 million (20
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and associates amounted to approxim
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BG Group uses a range of long-term
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Commodity prices Principal risks an
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Credit Principal risks and uncertai
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communities, partners, contractors,
Page 39 and 40: involved. In 2009, BG Group complet
Page 41 and 42: 4 5 6 10 11 7. Jürgen Dormann Non-
Page 43 and 44: 3 4 5 8 9 10 5. Robert Booker Execu
Page 45 and 46: A DIRECTORS The Board The Board is
Page 47 and 48: evaluation. Accordingly, during 200
Page 49 and 50: Board Committees Sustainability Com
Page 51 and 52: Audit Committee and auditors Lord S
Page 53 and 54: Other external advisers also provid
Page 55 and 56: TSR performance for the Performance
Page 57 and 58: Director’s length of service. Fur
Page 59 and 60: DEFERRED BONUS PLAN Award date Ashl
Page 61 and 62: DIRECTORS’ INTERESTS IN ORDINARY
Page 63 and 64: Directors’ pension provisions wer
Page 65 and 66: Share capital In order to enable th
Page 67 and 68: Financial Statements Independent Au
Page 69 and 70: REVENUE RECOGNITION Revenue associa
Page 71 and 72: Consolidated income statement Notes
Page 73 and 74: Balance sheets as at 31 December As
Page 75 and 76: Statements of changes in equity Cal
Page 77 and 78: Notes to the accounts 1 NEW ACCOUNT
Page 79 and 80: 2 SEGMENTAL ANALYSIS AND RESULTS PR
Page 81 and 82: 2 SEGMENTAL ANALYSIS AND RESULTS PR
Page 83 and 84: 3 OPERATING COSTS Included within t
Page 85 and 86: 4 DIRECTORS AND EMPLOYEES A) DIRECT
Page 87 and 88: 4 DIRECTORS AND EMPLOYEES continued
Page 89: 5 DISPOSALS, RE-MEASUREMENTS AND IM
Page 93 and 94: 12 PROPERTY, PLANT AND EQUIPMENT TH
Page 95 and 96: 13 INVESTMENTS continued THE COMPAN
Page 97 and 98: 17 BORROWINGS continued The effecti
Page 99 and 100: 18 FINANCIAL INSTRUMENTS continued
Page 105 and 106: 21 DEFERRED TAX Deferred taxes are
Page 107 and 108: 23 COMMITMENTS AND CONTINGENCIES co
Page 109 and 110: 25 PENSIONS AND POST-RETIREMENT BEN
Page 111 and 112: 25 PENSIONS AND POST-RETIREMENT BEN
Page 113 and 114: 26 NOTES TO THE CASH FLOW STATEMENT
Page 115 and 116: 27 PRINCIPAL SUBSIDIARY UNDERTAKING
Page 117 and 118: CONDENSED CONSOLIDATED INCOME STATE
Page 119 and 120: Special Purpose Auditors’ Report
Page 121 and 122: A) RESERVES ESTIMATED NET PROVED RE
Page 123 and 124: B) STANDARDISED MEASURE OF DISCOUNT
Page 125 and 126: C) CAPITALISED COSTS Capitalised co
Page 127 and 128: E) RESULTS OF OPERATIONS The result
Page 129 and 130: Five year financial summary (unaudi
Page 131 and 132: Shareholder Information Presentatio
Page 133 and 134: Index Item Page Accountants’ fees
Page 135 and 136: SHAREHOLDER PROFILE as at 31 Decemb
Page 137 and 138: the Directors may determine and oth
Page 139 and 140: ordinary share capital (excluding t
Page 141 and 142:
Appointing a corporate representati
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BG Group plc 100 Thames Valley Park
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