BP 2007 Annual Report Download - page 195

BP ANNUAL REPORT AND ACCOUNTS 2007 193
5Creditors
$ million
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2007 2006
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Within After Within After
1 year 1 year 1 year 1 year
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Overdraft ––21 –
Group undertakings 2,571 – 5,025 –
Social security ––5
Accruals and deferred income 10 44 10 30
Dividends 1–1
Other 543 27 154 27
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3,125 71 5,216 57
The carrying amounts of creditors approximate their fair value.
The profile of the maturity of the financial liabilities included in the balance sheet at 31 December is shown in the table below. These amounts are
included within Creditors – amounts falling due after more than one year, and are denominated in US dollars.
$ million
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2007 2006
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Due within
1 to 2 years 15 7
2 to 5 years 28 35
More than 5 years 28 15
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71 57
6Pensions
The material financial assumptions used for estimating the benefit obligations of the plans are set out below. The assumptions used to evaluate
accrued pension at 31 December in any year are used to determine pension expense for the following year, that is, the assumptions at 31 December
2007 are used to determine the pension liabilities at that date and the pension cost for 2008.
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Financial assumptions %
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2007 2006 2005
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Expected long-term rate of return 7.4 7.0 7.00
Discount rate for plan liabilities 5.7 5.1 4.75
Rate of increase in salaries 5.1 4.7 4.25
Rate of increase for pensions in payment 3.2 2.8 2.50
Rate of increase in deferred pensions 3.2 2.8 2.50
Inflation 3.2 2.8 2.50
In addition to the financial assumptions, we regularly review the demographic and mortality assumptions. The mortality assumption reflects best
practice in the UK, and has been chosen with regard to the latest available published tables adjusted to reflect the experience of the group and an
extrapolation of past longevity improvements into the future.
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Mortality assumptions Years
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2007 2006 2005
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Life expectancy at age 60 for a male currently aged 60 24.0 23.9 23.0
Life expectancy at age 60 for a female currently aged 60 26.9 26.8 26.0
Life expectancy at age 60 for a male currently aged 40 25.1 25.0 23.9
Life expectancy at age 60 for a female currently aged 40 27.9 27.8 26.9
The market values of the various categories of asset held by the pension plan at 31 December are set out below.
$ million
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2007 2006 2005
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Expected Expected Expected
long-term long-term long-term
rate of Market rate of Market rate of Market
return value return value return value
%$million % $ million % $ million
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UK plans
Equities 8.0 22,869 7.5 22,256 7.50 17,330
Bonds 4.4 4,456 4.7 3,305 4.25 2,231
Property 6.5 1,173 6.5 1,274 6.50 1,085
Cash 5.6 913 3.8 334 3.50 896
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7.4 29,411 7.0 27,169 7.00 21,542
Present value of plan liabilities 22,146 21,507 18,316
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Surplus in the plan 7,265 5,662 3,226
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