BP 2008 Annual Report Download - page 2

BP Annual Report and Accounts 2008
Information about this report
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This document constitutes the Annual Report and Accounts of BP p.l.c. for the year ended 31 December 2008 in accordance with UK requirements
and is dated 24 February 2009. This document also contains information that will be included in the company’s Annual Report on Form 20-F 2008 in
accordance with the requirements of the US Securities and Exchange Commission (SEC). Such information will be supplemented and may be updated
at the time of filing that document with the SEC, or later amended, if necessary.
The Annual Report and Accounts for the year ended 31 December 2008 contains the Directors’ Report, including the Business Reviewand
Management Report, on pages 2-76 and 89-100, 102 and 191. The Directors’ Remun eration Report is on pages 77-87. The consolidated financial
statements are on pages 101-190. The report of the auditor is on page 103 for the group and page 192 for the company.
BP Annual Report and Accounts 2008 and BP Annual Review 2008 may be downloaded from www.bp.com/annualreport. No material on the
BP website, other than the items identified as BP Annual Report and Accounts 2008 and BP Annual Review 2008, forms any part of those documents.
Reconciliation of profit for the year to replacement cost profit
For the year ended 31 December $ million
2008 2007 2006
Profit before interest and taxation from continuing operations 35,239 32,352 35,158
Finance costs and net finance income relating to pensions and other post-retirement benefits (956) (741) (516)
Taxation (12,617) (10,442) (12,331)
Minority interest (509) (324) (286)
Profit for the year from continuing operations attributable to BP shareholders 21,157 20,845 22,025
Profit (loss) for the year from Innovene operations –– (25)
Inventory holding (gains) losses, net of tax 4,436 (2,475) 222
Replacement cost profita b 25,593 18,370 22,222
Replacement cost profit from continuing operations attributable to BP shareholders 25,593 18,370 22,247
Replacement cost profit (loss) from Innovene operations –– (25)
Replacement cost profit 25,593 18,370 22,222
Exploration and Production 38,308 27,602 31,026
Refining and Marketing 4,176 2,621 5,161
Other businesses and corporate (1,223) (1,209) (841)
Consolidation adjustments – Unrealized profit in inventory 466 (220) 65
Replacement cost profit before interest and taxation 41,727 28,794 35,411
Finance costs and net finance income relating to pensions and other post-retirement benefits (956) (741) (516)
Taxation on a replacement cost basis (14,669) (9,359) (12,362)
Minority interest (509) (324) (286)
Replacement cost profit from continuing operations attributable to BP shareholders 25,593 18,370 22,247
Per ordinary share – cents
Profit for the year attributable to BP shareholders 112.59 108.76 109.84
Replacement cost profit 136.20 95.85 110.95
Dividends paid per ordinary share – cents 55.05 42.30 38.40
– pence 29.387 20.995 21.104
Dividends paid per American depositary share (ADS) – dollars 3.303 2.538 2.304
aReplacement cost profit reflects the replacement cost of supplies.The replacement cost profit for the year is arrived at by excluding from profit inventory holding gains and losses and their
associated tax effect. Inventory holding gains and losses, for this purpose, are calculated for all inventories except for those that are held as part of a trading position and certain other temporary
inventory positions. BP uses this measure to assist investors in assessing BP’s performance from period to period. Replacement cost profit is not a recognized GAAP measure.
Effective 1 January 2008, replacement cost profit for the year is determined by excluding from profit inventory holding gains and losses as well as their associated tax effect. Previously,
replacement cost profit excluded inventory holding gains and losses while the tax charge remained unadjusted and included the tax effect on inventory holding gains and losses. Comparative
amounts have been amended to the new basis and the impact of the change is shown in the table below. There is no impact on profit for the year.
For the year ended 31 December $ million
2007 2006
Replacement cost profit
– as previously reported 17,287 22,253
– tax effect on inventory holding gains and losses 1,083 (31)
– as amended 18,370 22,222
Comparative information presented in the ’Reconciliation of profit for the year to replacement cost profit’ table above has been restated, where appropriate, to reflect the resegmentation, following
transfers of businesses between segments, that was effective from 1 January 2008. See page 16 for more details.
On pages 2-7, references within BP Annual Report and Accounts 2008 to ‘profits’, ‘results’ and ‘return on average capital employed’ are to those measures on a replacement cost basis unless
otherwise indicated.
BP p.l.c. is the parent company of the BP group of companies. Unless otherwise stated, the text does not distinguish between the activities and operations of the parent company and those
of its subsidiaries.
The term ‘shareholder’ in this Annual Report and Accounts means, unless the context otherwise requires, investors in the equity capital of BP p.l.c., both direct and/or indirect. As BP shares,
in the form of ADSs, are listed on the New York Stock Exchange (NYSE), an Annual Report on Form 20-F will be filed with the SEC in accordance with the US Securities Exchange Act of 1934. When
filed, copies may be obtained, free of charge (see page 98).
Cautionary statement
BP Annual Report and Accounts 2008 contains certain forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the financial condition,
results of operations and businesses of BP and certain of the plans and objectives of BP with respect to these items. For more details, please see forward-looking statements on page 14.
The registered office of BP p.l.c. is 1 St James’s Square, London SW1Y 4PD, UK. Tel [phone]. Registered in England and Wales No. 102498. Stock exchange symbol ‘BP’.
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