Third Quarter 2013 Results (Stock Exchange Announcement) | Press | BP Global

Third Quarter 2013 Results (Stock Exchange Announcement)

Release date: 29 October 2013
Third quarter and nine months 2013
Third quarter 2012 Second quarter 2013 Third quarter 2013

$ million
Nine months 2013 Nine months 2012
5,281 2,042 3,504 Profit for the period(a) 22,409 9,529
(747) 358 (326) Inventory holding (gains) losses, net of tax (235) (110)
4,534 2,400 3,178 Replacement cost profit(b) 22,174 9,419
483 312 514 Net (favourable) unfavourable impact of non-operating items and fair value accounting effects, net of tax(c) (11,555) 3,800
5,017 2,712 3,692 Underlying replacement cost profit(b)
10,619 13,219

23.82
1.43


26.35
1.58

12.62
0.76


14.26
0.86

16.84
1.01


19.57
1.17
Replacement cost profit
per ordinary share (cents)
per ADS (dollars)

Underlying replacement cost profit
per ordinary share (cents)
per ADS (dollars)

116.62
7.00


55.85
3.35

49.54
2.97


69.52
4.17
  • BP’s third-quarter replacement cost (RC) profit was $3,178 million, compared with $4,534 million a year ago. After adjusting for a net charge for non-operating items of $522 million and net favourable fair value accounting effects of $8 million (both on a post-tax basis), underlying RC profit for the third quarter was $3,692 million, compared with $5,017 million for the same period in 2012. For the nine months, RC profit was $22,174 million, compared with $9,419 million a year ago. After adjusting for a net gain for non-operating items of $11,536 million and net favourable fair value accounting effects of $19 million (both on a post-tax basis), underlying RC profit for the nine months was $10,619 million, compared with $13,219 million for the same period last year. RC profit or loss for the group, underlying RC profit or loss and fair value accounting effects are non-GAAP measures and further information is provided on pages 3, 19 and 21. 
  • All amounts relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net adverse impact on a pre-tax basis of $39 million for the quarter and $280 million for the nine months. For further information on the Gulf of Mexico oil spill and its consequences, including information on utilization of the Deepwater Horizon Oil Spill Trust fund, see page 12 and Note 2 on pages 25 – 30. Information on the Gulf of Mexico oil spill is also included in Legal proceedings on pages 35 – 37.
  • Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the quarter and nine months was $6.3 billion and $15.7 billion respectively, compared with $6.2 billion and $14.1 billion in the same periods of 2012. Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the third quarter and nine months was $6.3 billion and $15.9 billion respectively, compared with $6.4 billion and $17.1 billion in the same periods last year.
  • Net debt at the end of the quarter was $20.1 billion, compared with $31.3 billion a year ago. The ratio of net debt to net debt plus equity at the end of the quarter was 13.3% compared with 20.9% a year ago. Net debt and the ratio of net debt to net debt plus equity are non-GAAP measures. See page 4 for more information.
  • Total capital expenditure for the third quarter was $5.9 billion, all of which was organic(d). For the nine months, total capital expenditure was $29.4 billion (including the Rosneft transaction), of which organic capital expenditure was $17.5 billion. Organic capital expenditure for the full year 2013 is expected to be $24 – $25 billion with a similar level of expenditure expected in 2014. Organic capital expenditure through 2020 is expected to be $24 – $27 billion per annum. Disposal proceeds received in cash were $0.4 billion for the quarter and $21.6 billion for the nine months. BP intends to continue to focus its global business portfolio around key assets and strategic strengths, and, as a result, expects to divest a further $10 billion of assets before the end of 2015. Post-tax proceeds from these divestments are expected to be used predominantly for additional distributions to shareholders, with a bias for share buybacks.
  • BP today announced a quarterly dividend of 9.5 cents per ordinary share ($0.57 per ADS), which is expected to be paid on 20 December 2013. The corresponding amount in sterling will be announced on 9 December 2013. See page 4 for further information. Moving forward, BP’s board intends to review the level of dividend with the first and the third quarter results each year.
  • The effective tax rate (ETR) on RC profit for the third quarter and nine months was 31% and 22% respectively, compared with 34% and 35% for the same periods in 2012. Adjusting for non-operating items and fair value accounting effects, the underlying ETR in the third quarter and nine months was 31% and 38% respectively, compared with 34% and 34% for the same periods in 2012. Recently enacted UK corporation tax rate changes have resulted in a $99-million deferred tax benefit in the third quarter. In the third quarter 2012 changes in the taxation of UK oil and gas production resulted in a $256-million deferred tax charge. The increase in the underlying ETR for the nine months is mainly due to a reduction in equity-accounted earnings (which are reported net of tax) and foreign exchange impacts on deferred tax, partly offset by the deferred tax adjustments for changes in UK taxation noted above.
  • Finance costs and net finance expense relating to pensions and other post-retirement benefits were a charge of $397 million for the third quarter, compared with $376 million for the same period in 2012. For the nine months, the respective amounts were $1,170 million and $1,171 million. 
  • As at 30 September 2013, BP had bought back 465 million shares for a total amount of $3.3 billion, including fees and stamp duty, since the announcement on 22 March 2013 of an $8-billion share repurchase programme expected to be fulfilled over 12 – 18 months.
  • Total production for the third quarter, including Rosneft, was 3.17 million barrels of oil equivalent per day. BP’s share of Rosneft production in the third quarter was 965 thousand barrels of oil equivalent per day.

(a) Profit attributable to BP shareholders.
(b) See page 3 for definitions of RC profit and underlying RC profit.
(c) See pages 20 and 21 respectively for further information on non-operating items and fair value accounting effects.
(d) Organic capital expenditure excludes acquisitions, asset exchanges, and other inorganic capital expenditure. See page 18 for further information.
 

The commentaries above and on the above download are based on RC profit and should be read in conjunction with the cautionary statement

Cautionary statement

Cautionary statement regarding forward-looking statements: The discussion in this results announcement contains certain forecasts, projections and forward-looking statements – that is, statements related to future, not past events – with respect to the financial condition, results of operation and businesses of BP and certain of the plans and objectives of BP with respect to these items. These statements may generally, but not always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar expressions. In particular, among other statements, certain statements regarding the expected level of organic capital expenditure in 2013 and per annum through 2020; BP’s intentions in respect of its announced share repurchase programme, including the total quantum of shares expected to be purchased in connection therewith and programme timing; the expected quarterly dividend payment and timing of the payment; the expected level of reported production and the expected level of costs in the fourth quarter of 2013; the expected level of reported and underlying production for the full year 2013; the expected identities of purchasers of gas from the Shah Deniz field; the expected timing of the completion of the Whiting refinery modernization project and future prospects for the Whiting refinery; the expected level of refining margins in the fourth quarter of 2013; the expected level of fuels profitability in the fourth quarter of 2013; the timing of future dividends from Rosneft; and certain statements regarding the anticipated timing of, prospects for and BP’s prospective responses to legal and trial proceedings, court decisions, potential investigations and civil actions by regulators, government entities and/or other entities or parties, and the risks associated with such proceedings; are all forward looking in nature. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors including the timing of bringing new fields onstream; the timing and level of maintenance and/or turnaround activity; the nature, timing and volume of refinery additions and outages; the timing, quantum and nature of divestments, including plans to divest a further $10 billion in assets before the end of 2015 and plans for the use of proceeds of such divestments; the receipt of relevant third-party and/or regulatory approvals; future levels of industry product supply; demand and pricing; OPEC quota restrictions; PSA effects; operational problems; economic and financial market conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; regulatory or legal actions including court decisions, the types of enforcement action pursued and the nature of remedies sought or imposed; the impact on our reputation following the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the actions of competitors, trading partners, creditors, rating agencies and others; decisions by Rosneft’s management and board of directors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism, cyber-attacks or sabotage; and other factors discussed under "Principal risks and uncertainties" in our Form 6-K for the period ended 30 June 2013 and under "Risk factors" in BP Annual Report and Form 20-F 2012, each as filed with the US Securities and Exchange Commission.