BP Fourth Quarter and Full-Year 2011 Results

BP's fourth-quarter replacement cost profit was $7,606 million, compared with $4,614 million a year ago.
For the full year, replacement cost profit was $23,900 million compared with a loss of $4,914 million a year ago. Replacement cost profit or loss for the group is a non-GAAP measure.
• The group income statement for the fourth quarter and full year includes pre-tax credits related to the Gulf of Mexico oil spill of $4.1 billion and $3.7 billion respectively, reflecting the settlements reached in the fourth quarter with Anadarko Petroleum Company and Cameron International Corporation. The full year also reflects settlements with MOEX USA Corporation and Weatherford U.S., L.P. All amounts relating to the oil spill have been treated as non-operating items. For further information on the Gulf of Mexico oil spill and its consequences see pages 2 - 3, Note 2 on pages 21 - 26, and Legal proceedings on pages 34 - 42.

• Non-operating items (including amounts relating to the Gulf of Mexico oil spill) and fair value accounting effects for the fourth quarter, on a post-tax basis, had a net favourable impact of $2,620 million compared with a net favourable impact of $250 million in the fourth quarter of 2010. For the full year, there was a net favourable impact of $2,242 million for 2011 compared with a net unfavourable impact of $25,436 million in 2010. See pages 4, 18 and 19 for further details.

• Finance costs and net finance income or expense relating to pensions and other post-retirement benefits were $261 million for the fourth quarter, compared with $346 million for the same period last year. For the full year, the respective amounts were $983 million for 2011 and $1,123 million for 2010.

• The effective tax rates on replacement cost profit for the fourth quarter and full year were 30% and 33% respectively, compared with 34% and 32% a year ago. The reduction for the fourth quarter was due to the impact of the divestment programme and other factors. In 2012, we expect the effective tax rate to be in the range 34 - 36%.

• Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the fourth quarter and full year was $5.0 billion and $22.2 billion respectively, compared with net cash used in operating activities of $0.2 billion for the fourth quarter of 2010 and net cash provided by operating activities of $13.6 billion for the full year of 2010. The amounts for the quarter and full year of 2011 included net cash outflows of $1.2 billion and $6.8 billion respectively relating to the Gulf of Mexico oil spill.

• Net debt at the end of the quarter was $29.0 billion, compared with $25.9 billion a year ago. The ratio of net debt to net debt plus equity was 20.5%, compared with 21.2% a year ago. We intend to reduce the net debt ratio to the lower half of the 10 - 20% range over time. Net debt is a non-GAAP measure. See page 5 for further information.

• Our 2011 reported reserves replacement ratio, excluding acquisitions and disposals, was 103% (details of which will be provided in BP Annual Report and Form 20-F 2011). This reflects both subsidiaries and equity-accounted entities. Reserves additions for TNK-BP include the effect of moving from life-of-licence measurement to life-of-field measurement, reflecting TNK-BP's track record of successful licence renewal. Excluding this effect, our 2011 reserves replacement ratio excluding acquisitions and disposals would have been 83%.

• Total capital expenditure for the fourth quarter and full year was $7.6 billion and $31.5 billion respectively. Organic capital expenditure(c) in the fourth quarter and full year was $6.3 billion and $19.1 billion respectively. For 2012, we expect organic capital expenditure to be around $22 billion. Disposal proceeds, including deposits received or repaid, were $(2.0) billion for the fourth quarter and $2.7 billion for the full year. These amounts include the repayment of the deposit of $3.5 billion relating to Pan American Energy LLC in the fourth quarter, following the termination of that disposal transaction (see Note 4 on page 28). As a result of the termination, our previously announced divestment programme of $45 billion (over the period 2010 to 2013 inclusive) is reduced to $38 billion.

• Depreciation, depletion and amortization in 2012 is expected to be around $1.0 billion higher than in 2011.

• The quarterly dividend expected to be paid on 30 March 2012 is 8 cents per share ($0.48 per ADS). The corresponding amount in sterling will be announced on 19 March 2012. A scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs.
Source: BP