REG - BP PLC - 4Q16 Part 1 of 1 <Origin Href="QuoteRef">BP.L</Origin> - Part 2
07/02/2017 07:07
- Part 2: For the preceding part double click ID:nRSG1699Wa
98,387
(a) Includes amounts relating to the issue of new ordinary shares in relation to the renewal of a 10% interest in the Abu Dhabi onshore oil concession.
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Financial statements (continued)
Group balance sheet
31 December 31 December
$ million 2016 2015
Non-current assets
Property, plant and equipment 129,757 129,758
Goodwill 11,194 11,627
Intangible assets 18,183 18,660
Investments in joint ventures 8,609 8,412
Investments in associates 14,092 9,422
Other investments 1,033 1,002
Fixed assets 182,868 178,881
Loans 532 529
Trade and other receivables 1,474 2,216
Derivative financial instruments 4,359 4,409
Prepayments 945 1,003
Deferred tax assets 4,741 1,545
Defined benefit pension plan surpluses 584 2,647
195,503 191,230
Current assets
Loans 259 272
Inventories 17,655 14,142
Trade and other receivables 20,675 22,323
Derivative financial instruments 3,016 4,242
Prepayments 1,486 1,838
Current tax receivable 1,194 599
Other investments 44 219
Cash and cash equivalents 23,484 26,389
67,813 70,024
Assets classified as held for sale - 578
67,813 70,602
Total assets 263,316 261,832
Current liabilities
Trade and other payables 37,915 31,949
Derivative financial instruments 2,991 3,239
Accruals 5,136 6,261
Finance debt 6,634 6,944
Current tax payable 1,666 1,080
Provisions 4,012 5,154
58,354 54,627
Liabilities directly associated with assets classified as held for sale - 97
58,354 54,724
Non-current liabilities
Other payables 13,946 2,910
Derivative financial instruments 5,513 4,283
Accruals 469 890
Finance debt 51,666 46,224
Deferred tax liabilities 7,238 9,599
Provisions 20,412 35,960
Defined benefit pension plan and other post-retirement benefit plan deficits 8,875 8,855
108,119 108,721
Total liabilities 166,473 163,445
Net assets 96,843 98,387
Equity
BP shareholders' equity 95,286 97,216
Non-controlling interests 1,557 1,171
Total equity 96,843 98,387
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Financial statements (continued)
Condensed group cash flow statement
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Operating activities
(4,100) 1,329 617 Profit (loss) before taxation (2,295) (9,571)
Adjustments to reconcile profit (loss) before taxation
to net cash provided by operating activities
Depreciation, depletion and amortization and
4,578 4,183 3,808 exploration expenditure written off 15,779 17,048
Impairment and (gain) loss on sale of businesses
1,158 (1,891) (553) and fixed assets (2,796) 1,243
Earnings from equity-accounted entities,
1,028 259 (605) less dividends received (855) (197)
Net charge for interest and other finance
164 204 310 expense less net interest paid 795 502
167 166 150 Share-based payments 779 321
Net operating charge for pensions and other post-
retirement benefits, less contributions and
(464) (96) (347) benefit payments for unfunded plans (467) (592)
591 (184) (629) Net charge for provisions, less payments 4,487 11,792
Movements in inventories and other current and
2,978 (1,001) 393 non-current assets and liabilities (3,198) 843
(294) (461) (716) Income taxes paid (1,538) (2,256)
5,806 2,508 2,428 Net cash provided by operating activities 10,691 19,133
Investing activities
(5,126) (3,379) (4,658) Capital expenditure (16,701) (18,648)
(10) - (1) Acquisitions, net of cash acquired (1) 23
(87) (1) (37) Investment in joint ventures (50) (265)
(888) (185) (226) Investment in associates (700) (1,312)
17 590 391 Proceeds from disposal of fixed assets 1,372 1,066
Proceeds from disposal of businesses, net of
215 (21) 78 cash disposed 1,259 1,726
1 9 7 Proceeds from loan repayments 68 110
(5,878) (2,987) (4,446) Net cash used in investing activities (14,753) (17,300)
Financing activities
185 3,925 3,069 Proceeds from long-term financing 12,442 8,173
(3,559) (75) (1,733) Repayments of long-term financing (6,685) (6,426)
(124) (512) 375 Net increase (decrease) in short-term debt 51 473
(5) 323 126 Net increase (decrease) in non-controlling interests 887 (5)
(1,541) (1,161) (1,182) Dividends paid - BP shareholders (4,611) (6,659)
(20) (31) (24) - non-controllinginterests (107) (91)
(5,064) 2,469 631 Net cash provided by (used in) financing activities 1,977 (4,535)
Currency translation differences relating to cash
(177) 13 (649) and cash equivalents (820) (672)
(5,313) 2,003 (2,036) Increase (decrease) in cash and cash equivalents (2,905) (3,374)
31,702 23,517 25,520 Cash and cash equivalents at beginning of period 26,389 29,763
26,389 25,520 23,484 Cash and cash equivalents at end of period 23,484 26,389
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Financial statements (continued)
Notes
1. Basis of preparation
The results for the interim periods and for the year ended 31 December 2016 are unaudited and, in the opinion of
management, include all adjustments necessary for a fair presentation of the results for each period. All such adjustments
are of a normal recurring nature. This report should be read in conjunction with the consolidated financial statements and
related notes for the year ended 31 December 2015 included in BP Annual Report and Form 20-F 2015.
BP prepares its consolidated financial statements included within BP Annual Report and Form 20-F on the basis of
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), IFRS
as adopted by the European Union (EU) and in accordance with the provisions of the UK Companies Act 2006. IFRS as adopted
by the EU differs in certain respects from IFRS as issued by the IASB. The differences have no impact on the group's
consolidated financial statements for the periods presented.
The financial information presented herein has been prepared in accordance with the accounting policies expected to be used
in preparing BP Annual Report and Form 20-F 2016, which do not differ significantly from those used in BP Annual Report and
Form 20-F 2015.
In BP Annual Report and Form 20-F 2015 we disclosed a significant estimate or judgement relating to provisions arising from
the Gulf of Mexico oil spill in 2010. At that time, no reliable estimate could be made of any business economic loss (BEL)
claims under the Plaintiffs' Steering Committee (PSC) settlement that were not yet processed or processed but not yet paid,
except where an eligibility notice had been issued and was not subject to appeal by BP within the Deepwater Horizon Court
Supervised Settlement Program claims facility (DHCSSP). A reliable estimate could also not be made in relation to
securities-related litigation and other litigation, including economic loss and property damage claims from parties
excluded from and/or who opted out of the PSC settlement. No amounts were provided for these items and they were disclosed
as contingent liabilities.
As a result of developments during the second quarter of 2016 sufficient information existed in order to make a reliable
estimate of the amounts that BP will pay relating to all outstanding BEL claims under the DHCSSP, securities class actions
and economic loss and property damage claims from parties who were excluded from and/or opted out of the PSC settlement.
Liabilities for these items were therefore recognized in the financial statements in the second quarter of 2016. See Note 2
for further information.
In BP Annual Report and Form 20-F 2015 - Financial statements - Note 1 we disclosed a significant estimate or judgement
relating to the recoverability of asset values, including oil and natural gas price assumptions used to estimate future
cash flows and the discount rates applied to determine the recoverable amounts of assets when performing impairment tests.
During the third quarter of 2016, the price assumptions and discount rates used in impairment tests were revised.
From the third quarter onwards, the long-term price assumptions used to determine recoverable amount based on fair value
less costs of disposal from 2022 onwards were derived from $75 per barrel for Brent and $4/mmBtu for Henry Hub (both in
2015 prices) inflated for the remaining life of the asset. To determine the recoverable amount based on value in use, the
price assumptions were inflated to 2022 but from 2022 onwards were not inflated.
For both value-in-use and fair value less costs of disposal impairment tests performed from the third quarter onwards, the
price assumptions used have been set such that there is a gradual transition over a five-year period from current market
prices to the long-term price assumptions for 2022, as noted above.
The post-tax discount rate applied to Upstream asset cash flows used to calculate fair value less costs of disposal from
the third quarter onwards was 6%. For value-in-use calculations from the third quarter onwards the pre-tax discount rate
applied was 9%. For both calculations a premium of 2% continues to be added for assets located in higher-risk countries.
See Note 3 for further information on impairment charges and reversals.
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Financial statements (continued)
Notes
2. Gulf of Mexico oil spill
(a) Overview
The information presented in this note should be read in conjunction with BP Annual Report and Form 20-F 2015 - Financial
statements - Note 2 and Legal proceedings on page 237.
During the second quarter, significant progress was made in resolving outstanding claims arising from the 2010 Deepwater
Horizon accident and oil spill and a reliable estimate was determined for all remaining material liabilities arising from
the incident.
The group income statement includes a pre-tax charge of $799 million for the fourth quarter and $7,134 million for the full
year in relation to the Gulf of Mexico oil spill. The cumulative pre-tax income statement charge since the incident, in
April 2010, amounts to $62,585 million. The charge for the fourth quarter reflects the latest estimate for claims and
associated costs, finance costs relating to unwinding of discounting effects and other items. The charge for the full year
is primarily attributable to the recognition of additional provisions for claims, as well as the cost of the securities
claims settlement with the certified class of post-explosion ADS purchasers which was agreed in June 2016 and functional
costs.
The amounts set out below reflect the impacts on the financial statements of the Gulf of Mexico oil spill for the periods
presented. The income statement, balance sheet and cash flow statement impacts are included within the relevant line items
in those statements as set out below.
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Income statement
328 66 674 Production and manufacturing expenses 6,640 11,709
(328) (66) (674) Profit (loss) before interest and taxation (6,640) (11,709)
115 123 125 Finance costs 494 247
(443) (189) (799) Profit (loss) before taxation (7,134) (11,956)
(134) 53 268 Taxation 3,105 3,492
(577) (136) (531) Profit (loss) for the period (4,029) (8,464)
31 December 31 December
$ million 2016 2015
Balance sheet
Current assets
Trade and other receivables 194 686
Current liabilities
Trade and other payables (3,056) (693)
Accruals - (40)
Provisions (2,330) (3,076)
Net current assets (liabilities) (5,192) (3,123)
Non-current assets
Deferred tax assets 2,973 -
Non-current liabilities
Other payables (13,522) (2,057)
Accruals - (186)
Provisions (112) (13,431)
Deferred tax liabilities 5,119 5,200
Net non-current assets (liabilities) (5,542) (10,474)
Net assets (liabilities) (10,734) (13,597)
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Financial statements (continued)
Notes
2. Gulf of Mexico oil spill (continued)
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Cashflow statement - Operating activities
(443) (189) (799) Profit (loss) before taxation (7,134) (11,956)
Adjustments to reconcile profit (loss)
before taxation to net cash provided
by operating activities
Net charge for interest and other finance
115 123 125 expense, less net interest paid 494 247
227 (494) (376) Net charge for provisions, less payments 4,353 11,296
Movements in inventories and other current
(36) (1,766) (993) and non-current assets and liabilities (4,818) (732)
(137) (2,326) (2,043) Pre-tax cash flows (7,105) (1,145)
Net cash from operating activities relating to the Gulf of Mexico oil spill, on a post-tax basis, amounted to an outflow of
$2,043 million and an outflow of $6,892 million in the fourth quarter and full year of 2016 respectively. For the same
periods in 2015, the amounts were an outflow of $137 million and an outflow of $1,130 million respectively.
Trust fund
During the first half of 2016, the remaining cash in the Deepwater Horizon Oil Spill Trust (the Trust) was exhausted and BP
commenced paying claims and other costs previously funded from the Trust. For certain costs, these payments are made by BP
into a qualified settlement fund, the fund then distributes the amounts to claimants; $976 million was paid into a
qualified settlement fund during the fourth quarter ($3,210 million during the full year).
(b) Provisions and contingent liabilities
Provisions
BP had recorded provisions relating to the Gulf of Mexico oil spill in relation to environmental expenditure, litigation
and claims, and Clean Water Act penalties. Movements in the fourth quarter, all of which relate to litigation and claims
provisions, are presented in the table below.
$ million Total
At 1 October 2016 5,132
Net increase in provision 675
Reclassified to other payables (1,202)
Utilization - paid by BP (1,051)
- paid by settlement fund (1,112)
At 31 December 2016 2,442
Of which - current 2,330
- non-current 112
Movements in each class of provision during the full year are presented in the table below.
Litigation Clean
and Water Act
Environmental claims penalties Total
$ million
At 1 January 2016 5,919 6,459 4,129 16,507
Net increase in provision - 6,440 - 6,440
Unwinding of discount 52 25 38 115
Reclassified to other payables (5,970) (4,943) (4,167) (15,080)
Utilization - paid by BP (1) (2,086) - (2,087)
- paid by settlement fund or Trust - (3,453) - (3,453)
At 31 December 2016 - 2,442 - 2,442
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Financial statements (continued)
Notes
2. Gulf of Mexico oil spill (continued)
Environmental
The environmental provisions relating to natural resource damage costs and the early restoration framework agreement were
reclassified to Other payables during the first quarter following approval by the Court in April 2016 of the Consent Decree
between the United States, the Gulf states and BP. Remaining amounts related to early restoration were paid during the
second quarter.
Litigation and claims
The litigation and claims provision includes amounts for the future cost of resolving claims by individuals and businesses
for damage to real or personal property, lost profits or impairment of earning capacity and loss of subsistence use of
natural resources. Claims administration costs and legal costs have also been provided for.
At 31 December 2015, the litigation and claims provision included amounts provided under the state claims settlement
agreement with the Gulf states in relation to state claims that had not yet been paid. These amounts were reclassified to
Other payables during the first quarter and are payable over 18 years.
Litigation and claims - PSC settlement
The provision for the cost associated with the 2012 PSC settlement has been determined based upon an expected value of the
remaining claims, including business economic loss claims. During the fourth quarter, significant progress was made in
resolving business economic loss claims. Claims were determined by the DHCSSP in accordance with the PSC settlement
agreement and in addition, certain claims were settled by BP. The provision has been increased in the fourth quarter to
reflect the estimate of the cost of the remaining claims which are expected to be determined by the DHCSSP or resolved by
BP, and associated costs. Amounts to resolve remaining claims are expected to be substantially paid in 2017. However, the
amounts ultimately payable may differ from the amount provided and the timing of payment is uncertain.
Litigation and claims - Other claims
An estimate of the cost of the remaining economic loss and property damage claims from individuals and businesses that
either opted out of the PSC settlement and/or were excluded from that settlement, is recognized in provisions.
Clean Water Act penalties
The provision previously recognized for penalties under Section 311 of the Clean Water Act, as determined by the civil
settlement with the United States, was reclassified to Other payables during the first quarter following approval by the
Court of the Consent Decree. The amount is payable in instalments over 15 years, commencing April 2017. The unpaid balance
of this penalty accrues interest at a fixed rate.
Further information on provisions is provided in BP Annual Report and Form 20-F 2015 - Financial statements -Note 2.
Contingent liabilities
Any further outstanding Deepwater Horizon related claims are not expected to have a material impact on the group's
financial performance.
3. Impairment of fixed assets
Included within the line item in the income statement for Impairment and losses on sale of businesses and fixed assets is a
net impairment reversal for the fourth quarter of $375 million. The net impairment reversal for the full year is $1,925
million.
The net impairment reversal in Upstream in the fourth quarter is $442 million, comprising impairment charges of $339
million offset by impairment reversals of $781 million. The impairment reversals include $234 million relating to assets in
India, with the recoverable amount calculated on a fair value basis. In addition $319 million of exploration costs were
written back relating to India.
The net impairment reversal in Upstream for the full year is $2,003 million, comprising impairment reversals of $3,025
million offset by impairment charges of $1,022 million. The impairment reversals related principally to assets in Angola
and the North Sea, for which the recoverable amounts were calculated on a value-in-use basis.
See Note 1 for further information on changes in the discount rate and future price assumptions which have been applied
since the third quarter.
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Financial statements (continued)
Notes
4. Analysis of replacement cost profit (loss) before interest and tax and
reconciliation to profit (loss) before taxation
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
(2,280) 1,196 692 Upstream 574 (937)
838 978 899 Downstream 5,162 7,111
235 120 158 Rosneft 590 1,310
(955) (441) (1,117) Other businesses and corporate(a) (8,157) (13,477)
(2,162) 1,853 632 (1,831) (5,993)
65 17 (132) Consolidation adjustment - UPII* (196) (36)
(2,097) 1,870 500 RC profit (loss) before interest and tax* (2,027) (6,029)
Inventory holding gains (losses)*
(18) (13) 19 Upstream 60 (30)
(1,482) (35) 558 Downstream 1,484 (1,863)
(46) (12) 24 Rosneft (net of tax) 53 4
(3,643) 1,810 1,101 Profit (loss) before interest and tax (430) (7,918)
379 433 434 Finance costs 1,675 1,347
Net finance expense relating to pensions
78 48 50 and other post-retirement benefits 190 306
(4,100) 1,329 617 Profit (loss) before taxation (2,295) (9,571)
RC profit (loss) before interest and tax
(1,429) (15) (1,646) US (8,311) (12,243)
(668) 1,885 2,146 Non-US 6,284 6,214
(2,097) 1,870 500 (2,027) (6,029)
(a) Includes costs related to the Gulf of Mexico oil spill. See Note 2 for further information.
5. Sales and other operating revenues
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
By segment
10,212 8,452 9,129 Upstream 33,188 43,235
43,463 43,488 46,834 Downstream 167,683 200,569
556 425 424 Other businesses and corporate 1,667 2,048
54,231 52,365 56,387 202,538 245,852
Less: sales and other operating revenues
between segments
4,987 4,952 4,695 Upstream 17,581 21,949
(133) 175 523 Downstream 1,291 68
205 191 162 Other businesses and corporate 658 941
5,059 5,318 5,380 19,530 22,958
Third party sales and other operating revenues
5,225 3,500 4,434 Upstream 15,607 21,286
43,596 43,313 46,311 Downstream 166,392 200,501
351 234 262 Other businesses and corporate 1,009 1,107
49,172 47,047 51,007 Total sales and other operating revenues 183,008 222,894
By geographical area
16,936 18,853 18,642 US 68,772 78,281
34,773 31,762 37,381 Non-US 128,771 158,519
51,709 50,615 56,023 197,543 236,800
Less: sales and other operating revenues
2,537 3,568 5,016 between areas 14,535 13,906
49,172 47,047 51,007 183,008 222,894
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Financial statements (continued)
Notes
6. Production and similar taxes
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
118 32 38 US 155 215
145 180 161 Non-US 528 821
263 212 199 683 1,036
7. Earnings per share and shares in issue
Basic earnings per ordinary share (EpS) amounts are calculated by dividing the profit for the period attributable to
ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
The calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date period. As a
result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be equal to the EpS
amount for the year-to-date period.
For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for the
number of shares that are potentially issuable in connection with employee share-based payment plans using the treasury
stock method.
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Results for the period
Profit (loss) for the period
(3,307) 1,620 497 attributable to BP shareholders 115 (6,482)
1 - - Less: preference dividend 1 2
Profit (loss) attributable to BP
(3,308) 1,620 497 ordinary shareholders 114 (6,484)
Number of shares (thousand)(a)(b)
Basic weighted average number of
18,369,064 18,824,739 18,995,725 shares outstanding 18,744,800 18,323,646
3,061,510 3,137,456 3,165,954 ADS equivalent 3,124,133 3,053,941
Weighted average number of shares
outstanding used to calculate
18,369,064 18,920,920 19,107,599 diluted earnings per share 18,855,319 18,323,646
3,061,510 3,153,486 3,184,599 ADS equivalent 3,142,553 3,053,941
18,412,392 18,912,989 19,438,990 Shares in issue at period-end 19,438,990 18,412,392
3,068,732 3,152,164 3,239,831 ADS equivalent 3,239,831 3,068,732
(a) Excludes treasury shares and includes certain shares that will be issued in the future under employee share-based payment plans.
(b) If the inclusion of potentially issuable shares would decrease loss per share, the potentially issuable shares are excluded from the weighted average number of shares outstanding used to calculate diluted earnings per share.
8. Dividends
Dividends payable
BP today announced an interim dividend of 10.00 cents per ordinary share which is expected to be paid on 31 March 2017 to
shareholders and American Depositary Share (ADS) holders on the register on 17 February 2017. The corresponding amount in
sterling is due to be announced on 20 March 2017, calculated based on the average of the market exchange rates for the four
dealing days commencing on 14 March 2017. Holders of ADSs are expected to receive $0.600 per ADS (less applicable fees). A
scrip dividend alternative is available, allowing shareholders to elect to receive their dividend in the form of new
ordinary shares and ADS holders in the form of new ADSs. Details of the fourth quarter dividend and timetable are available
at bp.com/dividends and details of the scrip dividend programme are available at bp.com/scrip.
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Financial statements (continued)
Notes
8. Dividends (continued)
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 2016 2015
Dividends paid per ordinary share
10.000 10.000 10.000 cents 40.000 40.000
6.634 7.558 7.931 pence 29.418 26.383
60.00 60.00 60.00 Dividends paid per ADS (cents) 240.00 240.00
Scrip dividends
49.7 130.0 129.2 Number of shares issued (millions) 548.0 102.8
289 714 710 Value of shares issued ($ million) 2,858 642
9. Net debt*
Net debt ratio*
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
53,168 58,997 58,300 Gross debt 58,300 53,168
Fair value (asset) liability of hedges related
379 (1,113) 697 to finance debt(a) 697 379
53,547 57,884 58,997 58,997 53,547
26,389 25,520 23,484 Less: cash and cash equivalents 23,484 26,389
27,158 32,364 35,513 Net debt 35,513 27,158
98,387 92,797 96,843 Equity 96,843 98,387
21.6% 25.9% 26.8% Net debt ratio 26.8% 21.6%
Analysis of changes in net debt
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Opening balance
57,405 55,727 58,997 Finance debt 53,168 52,854
Fair value (asset) liability of hedges
(57) (1,279) (1,113) related to finance debt(a) 379 (445)
31,702 23,517 25,520 Less: cash and cash equivalents 26,389 29,763
25,646 30,931 32,364 Opening net debt 27,158 22,646
Closing balance
53,168 58,997 58,300 Finance debt 58,300 53,168
Fair value (asset) liability of hedges
379 (1,113) 697 related to finance debt(a) 697 379
26,389 25,520 23,484 Less: cash and cash equivalents 23,484 26,389
27,158 32,364 35,513 Closing net debt 35,513 27,158
(1,512) (1,433) (3,149) Decrease (increase) in net debt (8,355) (4,512)
Movement in cash and cash equivalents
(5,136) 1,990 (1,387) (excluding exchange adjustments) (2,085) (2,702)
Net cash outflow (inflow) from financing
3,498 (3,338) (1,711) (excluding share capital and dividends) (5,808) (2,220)
(33) 29 (146) Other movements 278 17
(1,671) (1,319) (3,244) Movement in net debt before exchange effects (7,615) (4,905)
159 (114) 95 Exchange adjustments (740) 393
(1,512) (1,433) (3,149) Decrease (increase) in net debt (8,355) (4,512)
(a) Derivative financial instruments entered into for the purpose of managing interest rate and foreign currency exchange risk associated with net debt with a fair value liability position of $1,962 million (third quarter 2016 liability of $1,323 million and fourth quarter 2015 liability of $1,617 million) are not included in the calculation of net debt shown above as hedge accounting is not applied for these instruments.
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Financial statements (continued)
Notes
10. Inventory valuation
A provision of $501 million was held at 31 December 2016 ($509 million at 30 September 2016 and $1,295 million at 31
December 2015) to write inventories down to their net realizable value. The net movement charged to the income statement
during the fourth quarter 2016 was $13 million (third quarter 2016 was a credit of $178 million and fourth quarter 2015 was
a charge of $583 million).
11. Statutory accounts
The financial information shown in this publication, which was approved by the Board of Directors on 6 February 2017, is
unaudited and does not constitute statutory financial statements. Audited financial information will be published in BP
Annual Report and Form 20-F2016. BP Annual Report and Form 20-F 2015 has been filed with the Registrar of Companies in
England and Wales. The report of the auditor on those accounts was unqualified and did not contain a statement under
section 498(2) or section 498(3) of the UK Companies Act 2006.
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Additional information
Capital expenditure on an accruals basis*
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Capital expenditure on an accruals basis
5,531 3,622 6,955 Organic capital expenditure*(a) 18,440 18,747
585 45 618 Inorganic capital expenditure* 939 711
6,116 3,667 7,573 19,379 19,458
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Organic capital expenditure by segment
Upstream
1,313 458 717 US 2,989 4,518
3,257 2,642 5,135 Non-US(a) 13,059 11,788
4,570 3,100 5,852 16,048 16,306
Downstream
224 166 317 US 784 702
610 306 659 Non-US 1,357 1,399
834 472 976 2,141 2,101
Other businesses and corporate
37 2 30 US 45 70
90 48 97 Non-US 206 270
127 50 127 251 340
5,531 3,622 6,955 18,440 18,747
Organic capital expenditure by geographical area
1,574 626 1,064 US 3,818 5,290
3,957 2,996 5,891 Non-US 14,622 13,457
5,531 3,622 6,955 18,440 18,747
(a) Fourth quarter and full year 2016 include amounts relating to the renewal of a 10% interest in the Abu Dhabi onshore oil concession for which new ordinary shares in BP were issued.
Reconciliation of additions to non-current assets to capital expenditure on an accruals basis
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
6,376 5,773 7,503 Additions to non-current assets(a) 21,204 20,080
16 7 23 Additions to other investments 48 35
Element of business combinations not related
(7) - (4) to non-current assets (4) (31)
(246) (565) 977 (Additions to) reductions in decommissioning asset 656 (553)
(23) (1,548) (926) Asset exchanges(b) (2,525) (73)
6,116 3,667 7,573 Capital expenditure on an accruals basis 19,379 19,458
(a) Includes additions to property, plant and equipment; goodwill; intangible assets; investments in joint ventures; and investments in associates.
(b) Third quarter 2016 principally relates to the contribution of BP's Norwegian upstream business into Aker BP ASA in exchange for a 30% interest in Aker BP ASA. Fourth quarter 2016 principally relates to the dissolution of the group's German refining joint operation with Rosneft. Full year 2016 principally relates to the two aforementioned transactions.
Top of page 24
Additional information (continued)
Non-operating items*
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Upstream
Impairment and gain (loss) on sale of businesses
(853) 1,908 479 and fixed assets(a) 2,391 (1,204)
- (8) - Environmental and other provisions (8) (24)
(70) (36) (71) Restructuring, integration and rationalization costs (373) (410)
18 8 (17) Fair value gain (loss) on embedded derivatives 32 120
(734) (407) 245 Other(b) (289) (717)
(1,639) 1,465 636 1,753 (2,235)
Downstream
Impairment and gain (loss) on sale of businesses
(185) (11) 72 and fixed assets 405 131
(9) (72) 2 Environmental and other provisions (73) (108)
(351) (108) (103) Restructuring, integration and rationalization costs (300) (607)
- - - Fair value gain (loss) on embedded derivatives - -
(3) (5) (48) Other (56) (6)
(548) (196) (77) (24) (590)
Rosneft
Impairment and gain (loss) on sale of businesses
- - 62 and fixed assets 62 -
- - - Environmental and other provisions - -
- - - Restructuring, integration and rationalization costs - -
- - - Fair value gain (loss) on embedded derivatives - -
- - (39) Other (39) -
- - 23 23 -
Other businesses and corporate
Impairment and gain (loss) on sale of businesses
(120) (6) 2 and fixed assets - (170)
(24) (99) - Environmental and other provisions (134) (151)
(29) (10) (21) Restructuring, integration and rationalization costs (90) (71)
- - - Fair value gain (loss) on embedded derivatives - -
(328) (66) (674) Gulf of Mexico oil spill(c) (6,640) (11,709)
(155) - - Other (55) (155)
(656) (181) (693) (6,919) (12,256)
(2,843) 1,088 (111) Total before interest and taxation (5,167) (15,081)
(115) (123) (125) Finance costs(c) (494) (247)
(2,958) 965 (236) Total before taxation (5,661) (15,328)
341 (16) 56 Taxation credit (charge) 2,833 4,056
(2,617) 949 (180) Total after taxation for period (2,828) (11,272)
(a) See Notes 1 and 3 for further information on impairment charges and reversals.
(b) Fourth quarter and full year 2016 include the write-off of $147 million in relation to the value ascribed to licences in the deepwater Gulf of Mexico as part of the accounting for the acquisition of upstream assets from Devon Energy in 2011. Also included is a $319-million reversal relating to Block KG D6 in India. Third quarter and full year 2016 include the write-off of $334 million in relation to the value ascribed to the BM-C-34 licence in Brazil as part of the accounting for the acquisition of
upstream assets from Devon Energy in 2011.
(c) See Note 2 for further details regarding costs relating to the Gulf of Mexico oil spill.
Top of page 25
Additional information (continued)
Non-GAAP information on fair value accounting effects
Fourth Third Fourth
quarter quarter quarter Year Year
2015 2016 2016 $ million 2016 2015
Favourable (unfavourable) impact relative to
management's measure of performance
87 (45) (344) Upstream (637) 105
168 (257) 99 Downstream (448) 156
255 (302) (245) (1,085) 261
(67) 81 97 Taxation credit (charge) 329 (56)
188 (221) (148) (756) 205
BP uses derivative instruments to manage the economic exposure relating to inventories above normal operating requirements
of crude oil, natural gas and petroleum products. Under IFRS, these inventories are recorded at historical cost. The
related derivative instruments, however, are required to be recorded at fair value with gains and losses recognized in
income because hedge accounting is either not
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