BP 4Q and full-year 2008 results | press

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A webcast presentation was hosted by Tony Hayward, Chief Executive Officer, and Byron Grote, Chief Financial Officer. The presentation discussed BP's fourth quarter and full-year 2008 results, and was followed by a question and answer session. An archive of the presentation is now available.

Fourth Quarter	Third Quarter	Fourth Quarter	$ million		Year
2007	2008	2008	$ million	2008	2007	%

4,399	8,049	(3,344)	Profit (loss) for the period(a)	21,157	20,845
(1,004)	1,980	5,931	Inventory holding (gains) losses, net of tax (b)	4,436	(2,475)

3,395	10,029	2,587	Replacement cost profit (b)	25,593	18,370	39

8.75	27.76	11.32	- per ordinary share (pence)(c)	74.02	47.92
17.90	53.43	13.93	- per ordinary share (cents)	136.20	95.85	42
1.07	3.21	0.84	- per ADS (dollars)	8.17	5.75

BP's fourth-quarter replacement cost profit was $2,587 million, compared with $3,395 million a year ago, a decrease of 24% due largely to the significantly lower oil prices. For the full year, replacement cost profit was $25,593 million compared with $18,370 million a year ago, up 39%.
Non-operating items and fair value accounting effects for the fourth quarter had a net $18 million unfavourable impact compared to a net $1,132 million unfavourable impact for the fourth quarter of 2007. For the full years of 2008 and 2007, the respective amounts were $650 million unfavourable and $571 million unfavourable - see further details on page 3. The most significant non-operating items for the fourth quarter were, on a pre-tax basis, fair value gains on embedded derivatives, which amounted to $1,562 million, and a net charge of $1,460 million for impairments and gains and losses on the sale of businesses and fixed assets.
Net cash provided by operating activities for the quarter and year was $5.6 billion and $38.1 billion compared with $4.3 billion and $24.7 billion respectively a year ago.
The effective tax rate on replacement cost profit for the fourth quarter was 44% and for the year was 36%; a year ago, the rates were 38% and 33% respectively. The rate in the fourth quarter reflects the impact of a loss from jointly controlled entities and the impairment of an investment, neither of which generate a corresponding credit to the group tax charge. We expect the tax rate to be in the range of 36% to 39% during 2009.
Net debt at the end of the quarter was $25.0 billion compared to $26.8 billion a year ago. The ratio of net debt to net debt plus equity was 21%, compared with 22% a year ago.
Total capital expenditure and acquisitions was $7.0 billion for the quarter and $30.7 billion for the year. Capital expenditure, excluding acquisitions and asset exchanges and excluding the accounting for our transactions with Husky (see page 24) and Chesapeake (see page 17), was $6.8 billion for the quarter and $21.7 billion for the year. Disposal proceeds were $229 million for the quarter and $929 million for the year. In 2009, we expect our capital expenditure, excluding acquisitions and asset exchanges, to be around $20-22 billion, broadly in line with 2008, and we expect disposal proceeds to be around $2-3 billion.
The quarterly dividend, to be paid in March, is 14 cents per share ($0.84 per ADS) compared with 13.525 cents per share a year ago. For the year, the dividend showed an increase of 22%. In sterling terms, the quarterly dividend is 9.818 pence per share, compared with 6.813 pence per share a year ago; for the year, the increase was 44%. During the quarter, the company did not repurchase any of its own shares for cancellation. For the year, share repurchases were 269.8 million at a cost of $2.9 billion.

(a)Profit (loss) attributable to BP shareholders.
(b)With effect from 1 January 2008, replacement cost profit excludes inventory holding gains and losses net of tax. Comparative amounts have been amended to the new basis. See page 2 for further details.
(c)Comparative for the third quarter has been corrected from 29.75 pence to 27.76 pence.

Cautionary Statement
The foregoing discussion and the notes which follow contain forward-looking statements particularly those regarding tax rate; capital expenditure; disposal proceeds; the expected timing of completion of certain transactions; expected 2008 reserves replacement ratio; the continued slowing of global economies and uncertainty in the global financial markets; anticipated low demand for certain products; impact from falling crude oil prices on US domestic pipeline barrels; potential capacity of the Sherbino wind farm; quarterly charges and expected timing of commencement of production at the Sunrise field. By their nature, forward-looking statements involve risk and uncertainty and actual results may differ from those expressed in such statements depending on a variety of factors including the following: the timing of bringing new fields onstream; industry product supply; demand and pricing; operational problems; general economic conditions (including inflation); political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations and quotas; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the actions of competitors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism or sabotage; and other factors discussed in this announcement. For more information you should refer to our Annual Report and Accounts 2007 and our 2007 Annual Report on Form 20-F filed with the US Securities and Exchange Commission.

BP Fourth Quarter and Full-Year 2008 Results

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