BP Annual Report and Form 20-F 2011 - Company Reporting

Business reviewFinancial reviewSelected financial information a$ million except per share amounts2011 2010 2009 2008 2007Income statement dataSales and other operating revenues 375,517 297,107 239,272 361,143 284,365Replacement cost profit (loss) before interest and tax bBy businessExploration and Production 30,500 30,886 24,800 38,308 27,602Refining and Marketing 5,474 5,555 743 4,176 2,621Other businesses and corporate (2,478) (1,516) (2,322) (1,223) (1,209)Gulf of Mexico oil spill response c 3,800 (40,858) – – –Consolidation adjustment (113) 447 (717) 466 (220)Replacement cost profit (loss) before interest and taxation b 37,183 (5,486) 22,504 41,727 28,794Inventory holding gains (losses) 2,634 1,784 3,922 (6,488) 3,558Profit (loss) before interest and taxation 39,817 (3,702) 26,426 35,239 32,352Finance costs and net finance expense/income relating to pensions and otherpost-retirement benefits (983) (1,123) (1,302) (956) (741)Taxation (12,737) 1,501 (8,365) (12,617) (10,442)Profit (loss) for the year 26,097 (3,324) 16,759 21,666 21,169Profit (loss) for the year attributable to BP shareholders 25,700 (3,719) 16,578 21,157 20,845Inventory holding (gains) losses, net of tax (1,800) (1,195) (2,623) 4,436 (2,475)Replacement cost profit (loss) for the year attributable to BP shareholders b 23,900 (4,914) 13,955 25,593 18,370Per ordinary share – centsProfit (loss) for the year attributable to BP shareholdersBasic 135.93 (19.81) 88.49 112.59 108.76Diluted 134.29 (19.81) 87.54 111.56 107.84Replacement cost profit (loss) for the year attributable to BP shareholders b (basic) 126.41 (26.17) 74.49 136.20 95.85Dividends paid per share – cents 28.00 14.00 56.00 55.05 42.30– pence 17.4035 8.679 36.417 29.387 20.995Capital expenditure and acquisitions d 31,518 23,016 20,309 30,700 20,641Capital expenditure, excluding acquisitions and asset exchanges e 20,235 19,610 20,001 28,186 19,194Ordinary share data fAverage number outstanding of 25 cent ordinary shares (shares million undiluted) 18,905 18,786 18,732 18,790 19,163Average number outstanding of 25 cent ordinary shares (shares million diluted) 19,136 18,998 18,936 18,963 19,327Balance sheet data (at 31 December)Total assets 293,068 272,262 235,968 228,238 236,076Net assets 112,482 95,891 102,113 92,109 94,652Share capital 5,224 5,183 5,179 5,176 5,237BP shareholders’ equity 111,465 94,987 101,613 91,303 93,690Finance debt due after more than one year 35,169 30,710 25,518 17,464 15,651Net debt to net debt plus equity g 20.5% 21.2% 20.4% 21.4% 22.1%aThis information, insofar as it relates to 2011, has been extracted or derived from the audited consolidated financial statements of the BP group presented on pages 173-258. Note 1 to the financialstatements includes details on the basis of preparation of these financial statements. The selected information should be read in conjunction with the audited financial statements and related noteselsewhere herein.bReplacement cost profit or loss reflects the replacement cost of supplies. The replacement cost profit or loss for the year is arrived at by excluding from profit inventory holding gains and losses andtheir associated tax effect. Replacement cost profit or loss for the group is not a recognized GAAP measure. The equivalent measure on an IFRS basis is ‘Profit (loss) for the year attributable to BPshareholders’. Further information on inventory holding gains and losses is provided on page 110.cUnder IFRS these costs are presented as a reconciling item between the sum of the results of the reportable segments and the group results.dAll capital expenditure and acquisitions during the past five years have been financed from cash flow from operations, disposal proceeds and external financing. 2008 included capital expenditure of$2,822 million and an asset exchange of $1,909 million, both in respect of our transaction with Husky Energy Inc., as well as capital expenditure of $3,667 million in respect of our purchase of all ofChesapeake Energy Corporation’s interest in the Arkoma Basin Woodford shale assets and the purchase of a 25% interest in Chesapeake’s Fayetteville shale assets. 2007 included $1,132 million for theacquisition of Chevron’s Netherlands manufacturing company.e2011 included $1,096 million associated with deepening our natural gas asset base. 2010 included capital expenditure of $900 million relating to the formation of a partnership with Value Creation Inc.fThe number of ordinary shares shown has been used to calculate per share amounts.gNet debt and the ratio of net debt to net debt plus equity are non-GAAP measures. We believe that these measures provide useful information to investors. Further information on net debt is given inFinancial statements – Note 35 on page 230.Profit or loss for the yearProfit attributable to BP shareholders for the year ended 31 December2011 was $25,700 million and included inventory holding gains a , net oftax, of $1,800 million and a net credit for non-operating items, after tax, of$2,195 million. In addition, fair value accounting effects had a favourableimpact, net of tax, of $47 million relative to management’s measure ofperformance. Non-operating items in 2011 included a $3.7 billion pre-taxcredit relating to the Gulf of Mexico oil spill. More information on nonoperatingitems and fair value accounting effects can be found on page 58.See Gulf of Mexico oil spill on page 76 and in Financial statements – Note 2on page 190 for further information on the impact of the Gulf of Mexico oilspill on BP’s financial results.Loss attributable to BP shareholders for the year ended 31 December 2010included inventory holding gains, net of tax, of $1,195 million and a net chargefor non-operating items, after tax, of $25,449 million. In addition, fair valueaccounting effects had a favourable impact, net of tax, of $13 million relativeto management’s measure of performance. Non-operating items in 2010included a $40.9 billion pre-tax charge relating to the Gulf of Mexico oil spill.Profit attributable to BP shareholders for the year ended31 December 2009 included inventory holding gains, net of tax, of$2,623 million and a net charge for non-operating items, after tax, of$1,067 million. In addition, fair value accounting effects had a favourableimpact, net of tax, of $445 million relative to management’s measure ofperformance.56 BP Annual Report and Form 20-F 2011