BP 2010 Annual Report Download - page 68

Businessreview
Cash ow
Thefollowingtablesummarizesthegroup’scashows.
 $million
2010 2009 2008
Netcashprovidedbyoperating
 activities 13,616 27,716 38,095
Netcashusedininvestingactivities (3,960) (18,133) (22,767)
Netcashprovidedby(usedin)
 nancingactivities 840 (9,551) (10,509)
Currencytranslationdifferences
 relatingtocashandcashequivalents (279) 110 (184)
Increaseincashandcashequivalents 10,217 142 4,635
Cashandcashequivalentsat
 beginningofyear 8,339 8,197 3,562
Cashandcashequivalentsat
 endofyear 18,556 8,339 8,197
Netcashprovidedbyoperatingactivitiesfortheyearended31December
2010was$13,616millioncomparedwith$27,716millionfor2009,the
reductionprimarilyreectinganetcashoutowof$16,019millionin
respectoftheGulfofMexicooilspill.ExcludingtheimpactsoftheGulfof
Mexicooilspill,protbeforetaxationincreasedby$10,986millionanda
decreaseinworkingcapitalrequirementscontributed$842million.This
higherprotbeforetaxdidnotresultinanequivalentnetincreasein
operatingcashowbecauseitincluded$4,854millioninnetgainson
disposals,netofimpairments,adecreaseof$1,160millionindepreciation,
depletion,amortizationandexplorationexpense,andadecreaseof
$787millioninthenetchargeforprovisions,lesspayments,allofwhich
arenon-cashitems.
Netcashprovidedbyoperatingactivitiesfortheyearended
31December2009was$27,716millioncomparedwith$38,095millionfor
2008reectingadecreaseinprotbeforetaxationof$9,159million,an
increaseinworkingcapitalrequirementsof$8,944millionandadecrease
individendsfromjointlycontrolledentitiesandassociatesof$725million.
Thesewerepartlyoffsetbyadecreaseinincometaxespaidof
$6,500million,higherdepreciation,depletion,amortizationandimpairment
chargesof$1,329millionandanincreaseinchargesforprovisionsof
$948million.
Netcashusedininvestingactivitieswas$3,960millionin2010,
comparedwith$18,133millionand$22,767millionin2009and2008
respectively.Thedecreasein2010reectedanincreaseof$14,273million
indisposalproceedsandadecreaseincapitalexpenditureandinvestments
of$2,445million,partlyoffsetbyanincreaseinacquisitionsof
$2,469million.Thedecreaseincashusedininvestingactivitiesin2009
comparedto2008reectedadecreaseincapitalexpenditureand
acquisitionsof$2,356millionandanincreaseindisposalproceedsof
$1,752million.
Netcashprovidedbynancingactivitieswas$840millionin2010
comparedwith$9,551millionnetcashusedin2009and$10,509millionnet
cashusedin2008.Thenetincreaseincashprovidedin2010reectsa
decreaseindividendspaidof$7,957million,anincreaseinnetproceeds
fromlong-termnancingof$1,686millionandadecreaseinnetrepayments
ofshort-termdebtof$786million.Thedecreasein2009reecteda
$2,774milliondecreaseinthenetrepurchaseofsharesandanincreasein
netproceedsfromlong-termnancingof$1,406million;thesewerepartly
offsetbyanincreaseinnetrepaymentsofshort-termdebtof$3,090million.
Thegrouphashadsignicantlevelsofcapitalinvestmentformanyyears.
Cashowinrespectofcapitalinvestment,excludingacquisitions,was
$18.9billionin2010,$21.4billionin2009and$23.7billionin2008.Sources
offundingarecompletelyfungible,butthemajorityofthegroup’sfunding
requirementsfornewinvestmentcomefromcashgeneratedbyexisting
operations.Thegroup’slevelofnetdebt,thatisdebtlesscashandcash
equivalents,was$25.9billionattheendof2010,$26.2billionattheendof
2009andwas$25.0billionattheendof2008.
Duringtheperiod2008to2010,ourtotalsourcesofcashamounted
to$101billion,whilstourtotalusesofcashamountedto$93billion.The
netcashprovidedof$8billion,alongwithanincreaseinnancedebtof
$7billion,resultedinanincreaseinourbalanceofcashandcash
equivalentsof$15billionoverthethree-yearperiod.Duringthisperiod,the
priceofBrentcrudeoilhasaveraged$79.48perbarrel.Thefollowingtable
summarizesthethree-yearsourcesandusesofcash.
 $billion
Sourcesofcash
Netcashprovidedbyoperatingactivities   79
Disposals    22
      101
Usesofcash
Capitalexpenditure   64
Acquisitions   3
Netrepurchaseofshares   2
DividendspaidtoBPshareholders   23
Dividendspaidtominorityinterests   1
   93
Netsourceofcash   8
Increaseinnancedebt   7
Increaseincashandcashequivalents   15
Disposalproceedsreceivedduringthethree-yearperiodweresignicantly
higherthancashusedforacquisitions,asaresultinparticularofour
disposalprogrammestartedin2010.Netinvestment(capitalexpenditure
andacquisitionslessdisposalproceeds)duringthisperiodaveraged
$15billionperyear.DividendspaidtoBPshareholderstotalled$23billion
duringthethree-yearperiod,withnoordinarysharedividendsbeingpaidin
respectoftherstthreequartersof2010.Netrepurchaseofshareswas
$2billion,whichincluded$3billionin2008inrespectofoursharebuyback
programmelessnetproceedsfromsharesissuedinconnectionwith
employeeshareschemesoverthethreeyears.Finally,cashwasusedto
strengthenthenancialconditionofcertainofourpensionplans.Inthe
pastthreeyears,$3billionhasbeencontributedtofundedpensionplans.
Thisisreectedinnetcashprovidedbyoperatingactivitiesinthetable
above.Thebalanceofcashandcashequivalentsheldhasbeenincreased
inlightofthegroup’scurrentcircumstances,asnotedabove.
66BPAnnualReportandForm20-F2010