BP Third Quarter 2011 Results
Release date: 25 October 2011
Download the full version of our third quarter 2011 results using the link below.
Third quarter 2011 results (SEA) (pdf, 388KB) Third quarter 2011 Third quarter Second quarter Third quarter $ million Nine months 2010 2011 2011 2011 2010
1,785 5,620 4,907 Profit (loss) for the period (a) 17,651 (9,286) 62 (311) 233 Inventory holding (gains) losses, net of tax (1,721) (242)
1,847 5,309 5,140 Replacement cost profit (loss) 15,930 (9,528)
9.83 28.10 27.13 - per ordinary share (cents) 84.35 (50.73) 0.59 1.69 1.63 - per ADS (dollars) 5.06 (3.04)
- BP's third quarter replacement cost profit was $5,140 million, compared with $1,847 million a year ago. For the nine months replacement cost profit was $15,930 million compared with a loss of $9,528 million a year ago. Replacement cost profit or loss for the group is a non-GAAP measure. For further information see pages 4 and 17.
- The group income statement for the third quarter and nine months includes pre-tax charges related to the Gulf of Mexico oil spill of $0.6 billion and $0.4 billion respectively. All amounts relating to the incident have been treated as non-operating items. For further information on the Gulf of Mexico oil spill and its consequences see pages 2 - 3, Note 2 on pages 21 - 26, and Legal proceedings on pages 32 - 37.
- Non-operating items (including amounts relating to the Gulf of Mexico oil spill) and fair value accounting effects for the third quarter, on a post-tax basis, had a net unfavourable impact of $187 million compared with a net unfavourable impact of $3,684 million in the third quarter of 2010. For the nine months, the respective amounts were $378 million and $25,686 million unfavourable. See pages 4, 18 and 19 for further details.
- Finance costs and net finance income or expense relating to pensions and other post-retirement benefits were $234 million for the third quarter, compared with $335 million for the same period last year. For the nine months, the respective amounts were $722 million and $777 million.
- The effective tax rate on replacement cost profit for the third quarter and nine months was 31% and 35% respectively, compared with -16% and 33% a year ago. The effective tax rates for 2010 were impacted by the Gulf of Mexico oil spill, resulting in a particularly unusual rate for the third quarter. Excluding these impacts, the effective tax rate a year ago was 25% for the quarter and 31% for the nine months. We expect the full-year effective tax rate for 2011 to be around 34%.
- Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the third quarter and nine months was $6.9 billion and $17.1 billion respectively, compared with net cash used in operating activities of $0.7 billion for the third quarter of 2010 and net cash provided by operating activities of $13.8 billion for the nine months of 2010. The amounts for the quarter and nine months of 2011 included net cash outflows of $0.9 billion and $5.6 billion respectively relating to the Gulf of Mexico oil spill.
- Net debt at the end of the quarter was $25.8 billion, compared with $26.4 billion a year ago. The ratio of net debt to net debt plus equity was 19% compared with 23% a year ago.
- Total capital expenditure for the third quarter and nine months was $11.7 billion and $23.9 billion respectively. Organic capital expenditure(b) in the third quarter and nine months was $4.7 billion and $12.9 billion respectively. For the full year 2011, we expect organic capital expenditure to be around $19 billion. Disposal proceeds, including deposits received in the period, were $2.1 billion for the third quarter and $4.7 billion for the nine months. As at 24 October 2011, we had signed agreements during 2010 and 2011 totalling $26 billion to dispose of assets against our previously announced $30-billion disposal programme. We now intend to undertake an additional $15-billion disposal programme by the end of 2013, which will include the previously announced disposals of the Texas City and Carson refineries and associated marketing interests.
- The quarterly dividend expected to be paid on 19 December 2011 is 7 cents per share ($0.42 per ADS). The corresponding amount in sterling will be announced on 5 December 2011. A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs. Details of the scrip dividend programme are available at www.bp.com/scrip.
(a) Profit (loss) attributable to BP shareholders.
(b) Organic capital expenditure excludes acquisitions and asset exchanges (see page 16).
Forward Looking Statements - Cautionary Statement: This presentation and the associated slides and discussion contains forward-looking statements particularly those regarding: expected increases in investment in exploration and upstream drilling and production; anticipated improvements, increases, sources and timing in operating cash flow and margins, including generating around 50% more annually in operating cashflow by 2014 versus 2011 at US$100/bbl; divestment plans; the anticipated timing for completion of and final proceeds from the disposition of certain BP assets (including BP's interests in Pan American Energy LLC); the timing and composition of major projects including expected start up, completion and margins; reductions in certain costs associated with the suspension of drilling in the Gulf of Mexico; the quarterly dividend payment; the expected total effective tax rate for 2011; expected full-year 2011 organic capital expenditure and increased capital spend for the future; expectations regarding the impact on costs of rig standby charges and of turnaround and related maintenance expenditures; expectations or plans for increased investment and increased distribution to shareholders and repayment of debt; expectations for fourth-quarter refining margins; the expected level of planned turnarounds in the fourth quarter; the timing for completion of the Whiting refinery upgrade, other refining upgrades and logistics optimization; planned maintenance and impact on crude capacity; plans to extend BP's footprint in petrochemical and lubricant operations and grow margin share, improve gross margin and restore missing revenues in downstream business; increased exposure to growth markets in refining and marketing; expected investments in refining and marketing; the expected impact on fourth-quarter production of the divestment programme, ongoing seasonal turnaround activity across BP's portfolio; expected fourth quarter and full-year 2011 production, and the impact of acquisitions and divestments and PSA entitlement on full-year 2011 production; expectations of seasonal increase in functional costs; the magnitude and timing of remaining remediation costs related to the Gulf of Mexico oil spill; the factors that could affect the magnitude of BP's ultimate exposure and the cost to BP in relation to the spill and any potential mitigation resulting from BP's partners or others involved in the spill; the potential liabilities resulting from pending and future legal proceedings and potential investigations and civil or criminal actions that US state and/or local governments could seek to take against BP as a result of the spill; the timing of claims and litigation outcomes and of payment of legal costs; expectations that more Gulf of Mexico permits will be issued in due course; expectations for drilling and rig activity generally and specifically in the Gulf of Mexico; timing and quantum of contributions to and payments from the $20 billion Trust Fund; expectations on reduction of net debt and net debt ratio; expectations for returns and earning momentum in refining & marketing; anticipated planned turnaround activity in the fourth-quarter of 2011; timing of implementation of contractor selection, oversight and verification processes; expectations on access to new acreage; intentions to increase the number of wells drilled in future years; the timing for publication of investigation reports; the impact of BP's potential liabilities relating to the Gulf of Mexico oil spill on the group, including its business, results and financial condition; the increase of investment that will deliver sustainable growth; expectations at getting back to work in Gulf of Mexico and the increase of operating cash flow faster than production volumes. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors including the timing of bringing new fields onstream; future levels of industry product supply; demand and pricing; OPEC quota restrictions; PSA effects; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; changes in taxation or regulation; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies sought; the impact on our reputation following the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the successful completion of certain disposals; the actions of competitors, trading partners, creditors, rating agencies and others; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism or sabotage; and other factors discussed under "Risk factors" in our Annual Report and Form 20-F 2010 as filed with the US Securities and Exchange Commission (SEC). Reconciliations to GAAP: This presentation also contains financial information which is not presented in accordance with generally accepted accounting principles (GAAP). A quantitative reconciliation of this information to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found on our website at www.bp.com. Statement of Assumptions: The operating cash flow projection for 2014 stated on slides 7, 18, 35 and 36 reflects our expectation that all required payments into the $20 billion US Trust Fund will have been completed prior to 2014. The projection does not reflect any cash flows relating to other liabilities, contingent liabilities, settlements or contingent assets arising from the Macondo incident which may or may not arise at that time. As disclosed in the Stock Exchange Announcement, we are not today able to reliably estimate the amount or timing of a number of contingent liabilities. Cautionary Note to US Investors: We use certain terms in this presentation, such as "resources", "non-proved resources" and references to projections in relation to such that the SEC's rules prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262. This form is available on our website at www.bp.com . You can also obtain this form from the SEC by calling 1-800-SEC-0330 or by logging on to their website at www.sec.gov. Tables and projections in this presentation are BP projections unless otherwise stated.