BP 2015 Annual Report Download - page 30

Financial and operating performance
$ million
2015 2014 2013
Profit (loss) before interest and
taxation (7,918)6,412 31,769
Finance costs and net finance
expense relating to pensions and
other post-retirement benefits (1,653) (1,462) (1,548)
Taxation 3,171 (947) (6,463)
Non-controlling interests (82) (223) (307)
Profit (loss) for the yeara(6,482)3,780 23,451
Inventory holding (gains) losses ,
net of tax 1,320 4,293 230
Replacement cost profit (loss) (5,162)8,073 23,681
Net charge (credit) for non-operating
items , net of tax 11,272 4,620 (10,533)
Net (favourable) unfavourable
impact of fair value accounting
effects , net of tax (205) (557) 280
Underlying replacement cost profit 5,905 12,136 13,428
Dividends paid per share – cents 40.0 39.0 36.5
– pence 26.383 23.850 23.399
Capital expenditure and acquisitions,
on an accruals basis 19,531 23,781 36,612
Taxation
The credit for corporate income taxes in 2015 reflects the deferred tax
impact of the increased provisions in respect of the Gulf of Mexico oil spill.
The effective tax rate (ETR) was 33% in 2015 (2014 19%, 2013 21%).
The ETR in 2015 compared with 2014 was impacted by various one-off
items. Adjusting for inventory holding impacts, non-operating items, fair
value accounting effects and the one-off deferred tax adjustment in 2015
as a result of the reduction in the UK North Sea supplementary charge, the
underlying ETR on RC profit was 31% in 2015 (2014 36%, 2013 35%). The
underlying ETR for 2015 is lower than 2014 mainly due to changes in the
geographical mix of profits.
The ETR in 2014 was similar to 2013 and was relatively low in both years.
The low ETR in 2014 reflected the impairment charges on which tax
credits arise in relatively high tax rate jurisdictions. The ETR in 2013
reflected the gain on disposal of TNK-BP in 2013 for which there was no
corresponding tax charge.
In the current environment, and with our existing portfolio of assets,
the underlying ETR in 2016 is expected to be lower than 2015 due to the
anticipated mix of profits moving away from relatively high tax Upstream
jurisdictions.
Group performance
A summary of our group financial and
operating performance.
A technician monitors the pressure gauges in the
enhanced oil recovery laboratory in Sunbury.
a Profit (loss) attributable to BP shareholders.
The result for the year ended 31 December 2015 was a loss of
$6.5 billion, compared with a profit of $3.8 billion in 2014. Excluding
inventory holding losses, replacement cost (RC) loss was $5.2 billion,
compared with a profit of $8.1 billion in 2014.
After adjusting for a net charge for non-operating items, which mainly
related to the agreements in principle to settle federal, state and the vast
majority of local government claims arising from the 2010 Deepwater
Horizon accident and impairment charges; and net favourable fair value
accounting effects, underlying RC profit for the year ended 31 December
2015 was $5.9 billion, a decrease of $6.2 billion compared with 2014.
The reduction was mainly due to a significantly lower profit in Upstream,
partially offset by improved earnings from Downstream.
See Upstream on page 28, Downstream on page 34, Rosneft on
page 38 and Other businesses and corporate on page 40 for
further information on segment results. Also see page 41 for
further information on the Gulf of Mexico oil spill.
Non-operating items in 2015 also included $1,088 million for
restructuring charges that largely relate to rationalization and
reorganization costs in response to the low oil and gas price
environment. A further $1.0 billion of restructuring charges are
expected to be incurred in 2016.
Profit for the year ended 31 December 2014 decreased by
$19.7 billion compared with 2013. Excluding inventory holding losses,
RC profit decreased by $15.6 billion compared with 2013. Both results
in 2013 included a $12.5-billion non-operating gain relating to the
disposal of our interest in TNK-BP.
After adjusting for a net charge for non-operating items, which mainly
related to impairments and further charges associated with the Gulf of
Mexico oil spill; and net favourable fair value accounting effects,
underlying RC profit for the year ended 31 December 2014 was down
by $1.3 billion compared with 2013. The reduction was mainly due to a
lower profit in Upstream, partially offset by improved earnings from
Downstream.
More information on non-operating items, and fair value accounting
effects, can be found on page 217. See Gulf of Mexico oil spill on page
41 and Financial statements – Note 2 for further information on the
impact of the Gulf of Mexico oil spill on BP’s financial results.
Segment RC profit (loss) before interest and tax ($ billion)
Group RC profit (loss)
before interest and tax
Upstream
Other businesses
and corporate
Rosneft
Unrealized profit
in inventory
Gulf of Mexico
oil spill
TNK-BP
Downstream
0
10
20
30
40
201520142013
-20
-10
BP Annual Report and Form 20-F 201526