BP 2015 Annual Report Download - page 31

Cash flow and net debt information
$ million
2015 2014 2013
Net cash provided by operating
activities 19,133 32,754 21,100
Net cash used in investing activities (17,300) (19,574) (7,855)
Net cash used in financing activities (4,535) (5,266) (10,400)
Cash and cash equivalents at end of year 26,389 29,763 22,520
Gross debt 53,168 52,854 48,192
Net debt 27,158 22,646 25,195
Gross debt to gross debt-plus-equity 35.1% 31.9% 27.0%
Net debt to net debt-plus-equity 21.6% 16.7% 16.2%
KPIs used to measure progress against our strategy.
Net cash provided by operating activities
Net cash provided by operating activities for the year ended 31 December
2015 was $13.6 billion lower than 2014, of which $1.1 billion related to the
Gulf of Mexico oil spill. This was principally a result of the lower oil price
environment, although there were benefits of reduced working capital
requirements and lower tax paid.
There was an increase of $11.7 billion in 2014 compared with 2013. Profit
before taxation was lower but this was partially offset by movements in
the adjustments for non-cash items, including depreciation, depletion and
amortization, impairments and gains and losses on sale of businesses and
fixed assets. Furthermore, 2014 was impacted by a favourable movement
in working capital.
Net cash used in investing activities
Net cash used in investing activities for the year ended 31 December 2015
decreased by $2.3 billion compared with 2014. The decrease mainly
reflected a reduction in capital expenditure of $3.9 billion in response to the
lower oil price environment, partly offset by a reduction of $0.7 billion in
disposal proceeds.
The increase of $11.7 billion in 2014 compared with 2013 reflected a
decrease in disposal proceeds of $18.5 billion, partly offset by a $4.9-billion
decrease in our investments in equity-accounted entities, mainly relating to
the completion of the sale of our interest in TNK-BP and subsequent
investment in Rosneft in 2013. There was also a decrease in our other
capital expenditure excluding acquisitions of $2.0 billion.
There were no significant acquisitions in 2015, 2014 and 2013.
The group has had significant levels of capital investment for many years.
Cash flow in respect of capital investment, excluding acquisitions, was
$20.2 billion in 2015 (2014 $23.1 billion and 2013 $30 billion). Sources of
funding are fungible, but the majority of the group’s funding requirements
for new investment comes from cash generated by existing operations.
We expect capital expenditure, excluding acquisitions and asset
exchanges, to be at the lower end of the range of $17-19 billion in 2016.
Total cash disposal proceeds received during 2015 were $2.8 billion (2014
$3.5 billion, 2013 $22.0 billion). In 2015 this included amounts received
from our Toledo refinery partner, Husky Energy, in place of capital
commitments relating to the original divestment transaction that have not
been subsequently sanctioned. In 2013 this included $16.7 billion for the
disposal of BP’s interest in TNK-BP. See Financial statements – Note 4 for
more information on disposals.
We have now completed the $10-billion divestment programme which we
announced in 2013. We expect divestments to be around $3-5 billion in
2016 and ongoing divestments to be around $2-3 billion per annum
thereafter.
Net cash used in financing activities
Net cash used in financing activities for the year ended 31 December 2015
decreased by $0.7 billion compared with 2014. There were no share
repurchases in 2015, compared with $4.6 billion in 2014. This was largely
offset by lower net proceeds from financing of $3.2 billion ($4.4 billion
★ Defined on page 256.
lower net proceeds from long-term debt offset by an increase of
$1.2 billion in short-term debt).
The decrease of $5.1 billion in 2014 compared with 2013 primarily reflected
higher net proceeds of $3.3 billion from long-term financing and a decrease
in the net repayment of short-term debt of $1.3 billion. The $8-billion share
repurchase programme was completed in July 2014.
Total dividends paid in 2015 were 40 cents per share, up 2.6% compared
with 2014 on a dollar basis and 10.6% in sterling terms. This equated to a
total cash distribution to shareholders of $6.7 billion during the year (2014
$5.9 billion, 2013 $5.4 billion).
Net debt
Net debt at the end of 2015 increased by $4.5 billion from the 2014 year-end
position. The net debt ratio★ at the end of 2015 increased by 4.9%.
The total cash and cash equivalents at the end of 2015 were $3.4 billion
lower than 2014.
We aim to maintain the net debt ratio, with some flexibility, at around 20%.
We expect the net debt ratio to be above 20% while oil prices remain weak.
Net debt and the net debt ratio are non-GAAP measures. See Financial
statements – Note 26 for gross debt, which is the nearest equivalent
measure on an IFRS basis, and for further information on net debt.
For information on financing the group’s activities, see Financial statements
– Note 28 and Liquidity and capital resources on page 219.
Group reserves and production
2015 2014 2013
Estimated net proved reservesa
(net of royalties)
Liquids (mmb) 9,560 9,817 10,070
Natural gas (bcf) 44,197 44,695 45,975
Total hydrocarbons★(mmboe) 17,180 17,523 17,996
Of which: Equity-accounted
entitiesb7,928 7,828 7,753
Productiona (net of royalties)
Liquids (mb/d) 2,0451,927 2,013
Natural gas (mmcf/d) 7,146 7,100 7,060
Total hydrocarbons (mboe/d) 3,2773,151 3,230
Of which: Subsidiaries★2,007 1,898 1,882
Equity-accounted
entitiesc1,270 1,253 1,348
a Because of rounding, some totals may not agree exactly with the sum of their component parts.
b Includes BP’s share of Rosneft. See Rosneft on page 38 and Supplementary information on oil
and natural gas on page 169 for further information.
c Includes BP’s share of Rosneft. 2013 also includes BP’s share of TNK-BP production. See Rosneft
on page 38 and Oil and gas disclosures for the group on page 227 for further information.
Total hydrocarbon proved reserves at 31 December 2015, on an oil
equivalent basis including equity-accounted entities, decreased by 2%
compared with 31 December 2014. The change includes a net increase
from acquisitions and disposals of 130mmboe (103mmboe within our
subsidiaries, 28mmboe within our equity-accounted entities). Acquisition
activity in our subsidiaries occurred in Egypt, Trinidad, the US and the UK,
and divestment activity in our subsidiaries occurred in Egypt, Trinidad, the
US and the UK. In our equity-accounted entities the most significant item
was a purchase in Russia.
Our total hydrocarbon production for the group was 4% higher compared
with 2014. The increase comprised a 6% increase (13% increase for liquids
and 2% decrease for gas) for subsidiaries and a 1% increase (1% decrease
for liquids and 9% increase for gas) for equity-accounted entities.
See Oil and gas disclosures for the group on page 227.
BP Annual Report and Form 20-F 2015 27
Strategic report