BP 2010 Annual Report Download - page 181


Notesonnancialstatements
Financial statements
20.Dividends
FollowingtheGulfofMexicooilspillandtheagreementtoestablishthe$20-billiontrustfund,theBPboardrevieweditsdividendpolicyanddecidedto
cancelthepreviouslyannouncedrst-quarter2010ordinarysharedividendscheduledforpaymenton21June2010,andfurtherdecidedthatnoordinary
sharedividendswouldbepaidinrespectofthesecondandthirdquartersof2010.On1February2011,BPannouncedtheresumptionofquarterly
dividendpayments.Thequarterlydividendtobepaidon28March2011is7centsperordinaryshare($0.42perAmericanDepositaryShare(ADS)).The
correspondingamountinsterlingwillbeannouncedon14March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.
 pencepershare centspershare $million
    2010 2009 2008 2010 2009 2008 2010 2009 2008
Dividendsannouncedandpaid
 Preferenceshares      2 2 2
 Ordinaryshares
 March  8.679  9.818 6.813 14.000 14.000 13.525 2,625 2,619 2,553
 June  –  9.584 6.830 –  14.000 13.525 –  2,619 2,545
 September – 8.503 7.039 – 14.000 14.000 – 2,620 2,623
 December – 8.512 8.705 –  14.000 14.000 – 2,623 2,619
    8.679 36.417 29.387 14.000  56.000 55.050 2,627 10,483 10,342
Dividendannouncedperordinary
 share,payableinMarch2011a    7.000    1,315  

aTheamountinsterlingwillbeannouncedon14March2011.
Thegroupdoesnotaccountfordividendsuntiltheyarepaid.Thenancialstatementsfortheyearended31December2010donotreectthedividend
announcedon1February2011andpayableinMarch2011;thiswillbetreatedasanappropriationofprotintheyearended31December2011.
19.Taxationcontinued
ThegrouphasrecognizedsignicantcostsintheyearinrelationtotheGulfofMexicooilspill.Taxhasbeencalculatedontheexpendituresthatqualifyfor
taxreliefattheUSstatutorytaxrate.Adeferredtaxassethasbeenrecognizedinrespectofprovisionsforfutureexpenditurethatareexpectedtoqualify
fortaxrelief.Thisisincludedundertheheadingdecommissioning,environmentalandotherprovisionsandhasresultedinasignicantreductioninthe
overalldeferredtaxliabilityofthegroupcomparedto2009.
Deferredtaxassetsarerecognizedtotheextentthatitisprobablethattaxableprotwillbeavailableagainstwhichthedeductibletemporary
differencesandthecarry-forwardofunusedtaxcreditsandunusedtaxlossescanbeutilized.
At31December2010,thegrouphadapproximately$3.9billion(2009$4.8billiona)ofcarry-forwardtaxlosses,predominantlyinEurope,thatwould
beavailabletooffsetagainstfuturetaxableprot.Adeferredtaxassethasbeenrecognizedinrespectof$3.0billionoflosses(2009$3.2billion).No
deferredtaxassethasbeenrecognizedinrespectof$0.9billionoflosses(2009$1.6billiona).Substantiallyallthetaxlosseshavenoxedexpirydate.
At31December2010,thegrouphadapproximately$13.9billionofunusedtaxcreditspredominantlyintheUKandUS(2009$12.5billion).
At31December2010thereisadeferredtaxassetof$2.1billioninrespectofunusedtaxcredits(2009$1.0billion).Nodeferredtaxassethasbeen
recognizedinrespectof$11.8billionoftaxcredits(2009$11.5billion).In2010$0.3billionoftaxcreditswereutilizedonwhichadeferredtaxassethadnot
previouslybeenrecognized.
In2009achangeinUKlegislationrepealeddoubletaxationreliefinrelationtoforeigndividends,onshorepoolingandutilizationofeligibleunrelieved
foreigntaxeliminatingtheassociatedtaxcredits.TheUKtaxcredits,arisinginUKbranchesoverseas,withnodeferredtaxasset,amountingto$9.9billion
(2009$9.5billion),donothaveaxedexpirydate.InadditiontherearealsotemporarydifferencesinoverseasbranchesofUKcompanieswithnodeferred
taxassetrecognized.At31December2010theunrecognizeddeferredtaxamountedto$0.9billion(2009$0.5billion).Thesecreditsandtemporary
differencesariseinUKbranchespredominantlybasedinhightaxratejurisdictionssoareunlikelytohavevalueinthefutureasUKtaxesontheseoverseas
branchesarelargelymitigatedbydoubletaxreliefonthelocalforeigntax.
TheUStaxcreditswithnodeferredtaxasset,amountingto$1.9billion(2009$2.0billion)expire10yearsaftergeneration,andthemajorityexpire
intheperiod2014-2018.
Theothermajorcomponentsoftemporarydifferencesattheendof2010aretaxdepreciation,provisionsandotheritemsinrelationtotheGulfof
Mexicooilspill,USinventoryholdinggains(classiedasothertaxabletemporarydifferences)andpensionplanandotherpost-retirementbenet
plandecits.
In2010therearenomaterialtemporarydifferencesassociatedwithinvestmentsinsubsidiariesandequityaccountedentitiesforwhichdeferred
taxliabilitieshavenotbeenrecognized.
In2010theenactmentofa1%reductionintherateofUKcorporationtaxonprotsarisingfromactivitiesoutsidetheNorthSeahasreducedthe
deferredtaxchargeby$86million.In2009therewerenochangesinthestatutorytaxratesthatmateriallyimpactedthegroup’staxcharge.
a
2009comparativedatahasbeenamended.
BPAnnualReportandForm20-F2010 179