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Results | |
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| BP's result for the year was $12,379 million, compared with $8,715 million in 2002. The result per share was 55.83 cents,
an increase of 44%. The replacement cost operating result was $19,904 million (2002 $14,720 million). Replacement cost profit
before exceptional items was $9,543 million (2002 $4,698 million). The special items in 2003 and 2002 are shown in the table (see Financial tables). The return on average capital employed was 16%, compared with 13% in 2002. On a replacement cost before exceptional items basis, the 2003 return was 11% (2002 6%), and 11% (2002 8%) on a historical cost basis. Net exceptional gains of $708 million before tax include gains on the divestment of a further 20% interest in BP Trinidad and Tobago LLC and the sale of the group's interest in the Forties oil field in the UK North Sea, partly offset by net losses on a number of smaller transactions. Interest expense was $851 million, compared with $1,264 million in 2002. The 2002 figure has been adjusted for special charges of $15 million arising from the early redemption of bonds. The decrease mainly reflects lower average interest rates and lower average debt. Corporate tax expense was $6,504 million (2002 $4,673 million), representing an effective tax rate of 34% on the pro forma result, adjusted for special items. The effective tax rate on replacement cost profit before exceptional items was 38%, compared with 47% in 2002. Historical cost profit was $10,267 million, including exceptional net gains after tax of $708 million and stock holding gains of $16 million. The corresponding figures for 2002 were $6,845 million profit, $1,043 million net gains and $1,104 million gains respectively. Capital expenditure and acquisitions amounted to $20,075 million, including $5,794 million for the acquisition of our interest in TNK-BP. Excluding acquisitions, capital expenditure was $14,049 million, compared with $13,321 million in 2002. Net cash inflow for the year was $1,342 million, compared with an outflow of $344 million in 2002; higher operating cash flow and lower acquisition spending were partly offset by higher tax payments. Net cash outflow for capital expenditure and acquisitions, net of disposals, was $9,735 million (2002 $10,983 million). During 2003, we made incremental payments of $2,533 million into a number of the group's pension funds. The group's net debt, that is debt less cash and liquid resources, was $20,193 million at the end of 2003, compared with $20,273 million at the end of the previous year. The ratio of net debt to net debt plus equity was 24%, compared with 28% a year ago. We expect to keep this ratio in the range of 25-35%. On a reported basis, the percentage was 21% (2002 22%). In addition to reported debt, BP uses conventional off balance sheet sources of finance such as operating leases and borrowings in joint ventures and associates. The group has access to significant sources of liquidity in the form of committed facilities and other arrangements. BP has a financial risk management process that addresses the various risk exposures we encounter in the financial markets; these include market risk, credit risk and liquidity risk. |
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