23rd Oct 2007 07:02
BP PLC23 October 2007 BP p.l.c.Group ResultsThird Quarter 2007 London 23 October 2007 FOR IMMEDIATE RELEASE Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 % ========================== ========================= 6,231 7,376 4,406 Profit for the period* 16,446 19,120 744 (1,289) (539) Inventory holding (gains) losses (2,131) (762) -------------------------- ------------------------- 6,975 6,087 3,867 Replacement cost profit 14,315 18,358 (22) ========================== ========================= 18.76 15.96 9.94 - per ordinary share (pence) 37.44 50.01 35.08 31.67 20.34 - per ordinary share (cents) 74.51 91.02 (18) 2.10 1.90 1.22 - per ADS (dollars) 4.47 5.46 ========================== ========================= • BP's third-quarter replacement cost profit was $3,867 million, comparedwith $6,975 million a year ago, a decrease of 45%. For the nine months,replacement cost profit was $14,315 million compared with $18,358 million, down22%. • The third-quarter result included a net non-operating loss of $346million compared with a net non-operating gain of $1,225 million in the thirdquarter of 2006. For the nine months, the net non-operating gain was $758million compared with a net non-operating gain of $1,214 million for the firstnine months of 2006. • Net cash provided by operating activities for the quarter and ninemonths was $6.4 billion and $20.4 billion respectively compared with $5.1billion and $23.2 billion a year ago. • The effective tax rate on replacement cost profit from continuingoperations for the third quarter was 35% compared with 40% a year ago. For thenine months, the rate was 35% compared with 37% in the equivalent period of2006. • Net debt at the end of the quarter was $22.8 billion. The ratio of netdebt to net debt plus equity was 20% compared with 16% a year ago. • Capital expenditure, excluding acquisitions and asset exchanges, was$4.6 billion for the quarter and for the nine months was $12.6 billion. Totalcapital expenditure and acquisitions was $4.6 billion for the quarter and $14billion for the nine months. The nine months included $1.1 billion in respect ofthe acquisition of Chevron's Netherlands manufacturing company. Disposalproceeds were $0.2 billion for the quarter and were $3.9 billion for the ninemonths. • The quarterly dividend, to be paid in December, is 10.825 cents pershare ($0.6495 per ADS) compared with 9.825 cents per share a year ago. For thenine months, the dividend showed an increase of 10%. In sterling terms, thequarterly dividend is 5.308 pence per share, compared with 5.241 pence per sharea year ago; for the nine months the decrease was less than 1%. During thequarter, the company repurchased 128 million of its own shares for cancellationat a cost of $1.5 billion. For the nine months, share repurchases were 542million at a cost of $6.0 billion. • Information on fair value accounting effects in relation to Refiningand Marketing and Gas, Power and Renewables is set out on page 10. * Profit attributable to BP shareholders. The commentaries above and following are based on replacement cost profit andshould be read in conjunction with the cautionary statement on page 11. Analysis of Replacement Cost Profit and Reconciliation --------------------------------------------- to Profit for the Period ------------------ Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 =============================== ================= 9,935 6,893 6,343 Exploration and Production 19,279 24,584 1,503 2,740 376 Refining and Marketing 3,954 4,971 152 190 (57) Gas, Power and Renewables 339 906 (261) (164) (451) Other businesses and corporate (731) (671) 440 (69) 59 Consolidation adjustments 73 155 ------------------------------- ----------------- 11,769 9,590 6,270 RC profit before interest and tax 22,914 29,945 ------------------------------- ----------------- (117) (155) (173) Finance costs and other finance income (499) (367) (4,614) (3,283) (2,158) Taxation (7,881) (10,984) (63) (65) (72) Minority interest (219) (211) ------------------------------- ----------------- RC profit from continuing operations 6,975 6,087 3,867 attributable to BP shareholders(a) 14,315 18,383 =============================== ================= Inventory holding gains (losses) for (744) 1,289 539 continuing operations 2,131 762 ------------------------------- ----------------- Profit for the period from continuing operations attributable to 6,231 7,376 4,406 BP shareholders 16,446 19,145 Profit (loss) for the period from Innovene - - - operations(b) - (25) ------------------------------- ----------------- Profit for the period attributable to 6,231 7,376 4,406 BP shareholders 16,446 19,120 =============================== ================= RC profit from continuing operations attributable 6,975 6,087 3,867 to BP shareholders 14,315 18,383 - - - RC profit (loss) from Innovene operations - (25) ------------------------------- ----------------- 6,975 6,087 3,867 Replacement cost profit 14,315 18,358 =============================== ================= (a)Replacement cost profit reflects the current cost of supplies. Thereplacement cost profit for the period is arrived at by excluding from profitinventory holding gains and losses. BP uses this measure to assist investors toassess BP's performance from period to period. Replacement cost profit is not arecognized GAAP measure. (b)See further detail in Note 2. Results include Non-operating Items ------------------------------ Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 ================================ ================= 2,466 399 22 Exploration and Production 1,169 2,559 (431) 767 (344) Refining and Marketing 194 (331) (85) (36) (8) Gas, Power and Renewables (35) (34) 78 7 (205) Other businesses and corporate (164) 113 -------------------------------- ----------------- 2,028 1,137 (535) 1,164 2,307 (803) (396) 189 Taxation(a) (406) (902) -------------------------------- ----------------- 1,225 741 (346) Continuing operations 758 1,405 -------------------------------- ----------------- - - - Innovene operations - (184) - - - Taxation - (7) -------------------------------- ----------------- 1,225 741 (346) Total for all operations 758 1,214 ================================ ================= An analysis of non-operating items by type is provided on page 21. (a)Tax on non-operating items is calculated using the quarter's effective taxrate on replacement cost profit from continuing operations. Per Share Amounts ---------------- Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 2007 2006 ================================ ===================== Results for the period ($m) 6,231 7,376 4,406 Profit(a) 16,446 19,120 6,975 6,087 3,867 Replacement cost profit 14,315 18,358 -------------------------------- --------------------- Shares in issue at period end 19,815,830 19,133,973 19,019,579 (thousand)(b) 19,019,579 19,815,830 3,302,638 3,188,996 3,169,930 - ADS equivalent (thousand)(b) 3,169,930 3,302,638 Average number of shares outstanding 19,818,106 19,186,461 19,061,853 (thousand)(b) 19,209,757 20,167,945 3,303,018 3,197,744 3,176,976 - ADS equivalent (thousand)(b) 3,201,626 3,361,324 Shares repurchased in the period 299,155 175,806 128,253 (thousand) 541,975 1,023,978 Per ordinary share (cents) 31.46 38.37 23.18 Profit for the period 85.61 94.80 35.08 31.67 20.34 RC profit for the period 74.51 91.02 Per ADS (cents) 188.76 230.22 139.08 Profit for the period 513.66 568.80 210.48 190.02 122.04 RC profit for the period 447.06 546.12 -------------------------------- --------------------- (a)Profit attributable to BP shareholders.(b)Excludes treasury shares. Dividends --------- Dividends Payable BP today announced a dividend of 10.825 cents per ordinary share to be paid inDecember. Holders of ordinary shares will receive 5.308 pence per share andholders of American Depository Receipts (ADRs) $0.6495 per ADS. The dividend ispayable on 3 December to shareholders on the register on 9 November.Participants in the Dividend Reinvestment Plan (DRIP) or the DRIP facility inthe US Direct Access Plan will receive the dividend in the form of shares, alsoon 3 December. Dividends Paid Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 2007 2006 ================================ ====================== Dividends paid per ordinary share 9.825 10.325 10.825 Cents 31.475 28.575 5.324 5.151 5.278 Pence 15.687 15.863 58.95 61.95 64.95 Dividends paid per ADS (cents) 188.85 171.45 ================================ ====================== Net Debt Ratio - Net Debt: Net Debt + Equity ----------------------------------- Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 ================================ ====================== 19,973 23,754 25,245 Gross debt 25,245 19,973 3,199 2,643 2,410 Cash and cash equivalents 2,410 3,199 -------------------------------- ---------------------- 16,774 21,111 22,835 Net debt 22,835 16,774 ================================ ====================== 85,070 89,423 91,494 Equity 91,494 85,070 16% 19% 20% Net debt ratio 20% 16% ================================ ====================== Exploration and Production ---------------------- Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 ================================ ================= 9,929 6,894 6,347 Profit before interest and tax(a) 19,295 24,572 6 (1) (4) Inventory holding (gains) losses (16) 12 -------------------------------- ----------------- Replacement cost profit before interest 9,935 6,893 6,343 and tax 19,279 24,584 ================================ ================= By region: 1,306 1,113 703 UK 2,878 4,305 264 183 221 Rest of Europe 1,124 960 3,827 2,038 1,843 US 5,533 8,392 4,538 3,559 3,576 Rest of World 9,744 10,927 -------------------------------- ----------------- 9,935 6,893 6,343 19,279 24,584 ================================ ================= Results include: Non-operating items 540 187 33 UK 365 532 (27) (2) 7 Rest of Europe 538 56 2,016 177 (15) US 154 2,027 (63) 37 (3) Rest of World 112 (56) -------------------------------- ----------------- 2,466 399 22 1,169 2,559 ================================ ================= Exploration expense 7 7 2 UK 29 14 - - - Rest of Europe - - 188 54 60 US 191 309 156 94 182 Rest of World 335 314 -------------------------------- ----------------- 351 155 244 555 637 ================================ ================= Production (net of royalties)(b) Liquids (mb/d) (net of royalties)(c) 213 218 151 UK 202 258 58 43 52 Rest of Europe 52 63 523 532 475 US 510 551 1,628 1,656 1,614 Rest of World 1,632 1,623 -------------------------------- ----------------- 2,422 2,449 2,292 2,396 2,495 ================================ ================= Natural gas (mmcf/d) (net of royalties) 754 731 582 UK 739 952 100 22 26 Rest of Europe 30 92 2,332 2,165 2,186 US 2,171 2,436 4,900 4,941 5,085 Rest of World 5,138 4,991 -------------------------------- ----------------- 8,086 7,859 7,879 8,078 8,471 ================================ ================= Total hydrocarbons (mboe/d)(d) 343 344 251 UK 329 422 75 47 57 Rest of Europe 57 78 925 905 851 US 885 971 2,473 2,508 2,492 Rest of World 2,517 2,483 -------------------------------- ----------------- 3,816 3,804 3,651 3,788 3,954 ================================ ================= Average realizations(e) 64.15 62.58 71.12 Total liquids ($/bbl) 62.00 60.91 4.49 4.45 3.93 Natural gas ($/mcf) 4.42 4.83 45.47 44.97 46.36 Total hydrocarbons ($/boe) 44.05 44.74 ================================ ================= (a)Profit from continuing operations and includes profit after interest and taxof equity-accounted entities.(b)Includes BP's share of production of equity-accounted entities.(c)Crude oil and natural gas liquids.(d)Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1million barrels.(e)Based on sales of consolidated subsidiaries only - this excludesequity-accounted entities.(f)Because of rounding, some totals may not agree exactly with the sum of theircomponent parts. Exploration and Production ---------------------- The replacement cost profit before interest and tax for the third quarter was$6,343 million, a decrease of 36% from the third quarter of 2006. The resultbenefited from higher liquids realizations, but was impacted by lower gasrealizations, lower reported volumes and higher costs. In addition, the resultwas lower due to the absence of significant gains from non-operating items inthe third quarter of 2006 (see below) and the absence of disposal gains inequity-accounted entities, primarily the $892 million gain on TNK-BP's disposalof the Urdmurtneft assets. The net non-operating gain in the third quarter of 2007 was $22 million whichincluded gains on the sale of assets and fair value gains on embeddedderivatives relating to North Sea gas contracts, partially offset by animpairment charge relating to a gas plant in the US. This compares with a netnon-operating gain of $2,466 million in the third quarter of 2006, which wasprimarily comprised of disposal gains. The replacement cost profit before interest and tax of $19,279 million for thefirst nine months represents a decrease of 22% over the same period of theprevious year. This result was impacted by lower gas realizations as well aslower reported volumes and higher costs, reflecting sector-specific inflation,increased integrity spend and higher depreciation charges. The nine-monthsresult included a net non-operating gain of $1,169 million compared with a netnon-operating gain of $2,559 million in the equivalent period of 2006. Reported production for the third quarter and the first nine months was3,651mboe/d and 3,788mboe/d respectively, 4% lower than in the equivalentperiods of 2006. After adjusting for the effect of disposals, entitlementchanges in our production-sharing agreements and the impact of the CATS pipelineincident in the North Sea, production in both the third quarter and the firstnine months was broadly flat compared with 2006. Full year production in 2007 isexpected to be in the range of 3.8 to 3.9mmboe/d, in line with the guidanceprovided earlier in the year. During the quarter, we were the highest bidder for 91 blocks in the Western Gulfof Mexico lease sale and we were awarded two new exploration licences inColombia. Additionally, in early October we participated in the Central Gulf ofMexico lease sale, where we were highest bidder for 83 blocks. Our major projects are progressing well. In October, we had first oil fromGreater Plutonio in Angola, where BP holds a 50% working interest. In the Gulfof Mexico we have started commissioning the Atlantis field. Refining and Marketing ------------------- Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 ============================== ================= 717 3,981 936 Profit before interest and tax(a) 6,046 5,747 786 (1,241) (560) Inventory holding (gains) losses (2,092) (776) ------------------------------ ----------------- Replacement cost profit before 1,503 2,740 376 interest and tax 3,954 4,971 ============================== ================= By region: 138 963 22 UK 975 161 765 584 492 Rest of Europe 1,374 1,913 388 964 (527) US 559 1,774 212 229 389 Rest of World 1,046 1,123 ------------------------------ ----------------- 1,503 2,740 376 3,954 4,971 ============================== ================= Results include: Non-operating items (27) 844 (4) UK 677 (8) (18) (44) (16) Rest of Europe (72) 182 (264) 170 (316) US (204) (614) (122) (203) (8) Rest of World (207) 109 ------------------------------ ----------------- (431) 767 (344) 194 (331) ============================== ================= Refinery throughputs (mb/d) 200 123 - UK 90 158 622 700 735 Rest of Europe 691 644 1,213 996 1,109 US 1,086 1,130 252 309 304 Rest of World 302 268 ------------------------------ ----------------- 2,287 2,128 2,148 Total throughput 2,169 2,200 ============================== ================= 82.2 82.7 83.4 Refining availability (%)(b) 82.6 83.2 ============================== ================= Oil sales volumes (mb/d) Refined products 370 343 350 UK 343 356 1,367 1,271 1,329 Rest of Europe 1,282 1,331 1,609 1,579 1,535 US 1,559 1,613 578 615 641 Rest of World 627 575 ------------------------------ ----------------- 3,924 3,808 3,855 Total marketing sales 3,811 3,875 1,911 1,867 1,687 Trading/supply sales 1,860 1,932 ------------------------------ ----------------- 5,835 5,675 5,542 Total refined product sales 5,671 5,807 1,913 2,161 1,709 Crude oil 1,964 2,160 ------------------------------ ----------------- 7,748 7,836 7,251 Total oil sales 7,635 7,967 ============================== ================= Global Indicator Refining Margin ($/bbl)(c) 4.54 7.12 3.82 NWE 5.03 4.40 11.47 24.46 12.58 USGC 15.74 13.36 11.50 26.05 14.31 Midwest 16.02 10.38 12.30 22.71 6.90 USWC 17.22 14.93 3.58 6.01 4.52 Singapore 5.12 4.65 8.40 16.66 8.05 BP Average 11.38 9.09 ============================== ================= Chemicals production (kte) 230 246 237 UK 739 831 776 655 587 Rest of Europe 1,990 2,359 883 1,047 1,117 US 3,240 2,488 1,682 1,497 1,569 Rest of World 4,586 5,097 ------------------------------ ----------------- 3,571 3,445 3,510 Total production 10,555 10,775 ============================== ================= (a)Profit from continuing operations and includes profit after interest and taxof equity-accounted entities.(b)Refining availability is defined as the ratio of units which are availablefor processing, regardless of whether they are actually being used, to totalcapacity. Where there is planned maintenance, such capacity is not regarded asbeing available. During 2006, there was planned maintenance of a substantialpart of the Texas City refinery.(c)The Global Indicator Refining Margin (GIM) is the average of regionalindicator margins weighted for BP's crude refining capacity in each region. Eachregional indicator margin is based on a single representative crude with productyields characteristic of the typical level of upgrading complexity. The regionalindicator margins may not be representative of the margins achieved by BP in anyperiod because of BP's particular refinery configurations and crude and productslate. Refining and Marketing ------------------- The replacement cost profit before interest and tax for the third quarter andnine months was $376 million and $3,954 million respectively. The results in theequivalent periods of 2006 were $1,503 million and $4,971 million respectively. The third-quarter result included a net non-operating charge of $344 millionwhich was primarily comprised of charges in respect of new, and revisions toexisting, provisions. The nine-months result included a net non-operating gainof $194 million. Compared with the third quarter of 2006, realized refining margins were lowerdue to the effects of narrowing light heavy crude differentials, particularly inthe US. Marketing margins remained robust although they were lower than theexceptionally strong margins of a year ago. Relative to 2006, both refining andmarketing margins were stronger in the first nine months of 2007. Compared withthe equivalent periods of 2006, both the current quarter and nine-months resultsreflected the adverse impact of operational issues, particularly at the Whitingrefinery, and scheduled turnarounds, along with reduced supply optimizationbenefits and higher integrity and repair costs. Information on fair value accounting effects is set out on page 10. Refining throughputs for the quarter and nine months were 2,148mb/d and 2,169mb/d respectively, compared with 2,287mb/d and 2,200mb/d for the same periods lastyear. The lower throughputs were mainly due to the disposal of Coryton refineryon 31 May 2007 and lower availability at the Whiting refinery, partially offsetby the benefits of the ongoing recommissioning at the Texas City refinery andthe acquisition of the remaining interests in the Rotterdam refinery. Marketing sales were 3,855mb/d for the quarter and 3,811mb/d for the ninemonths, slightly lower than the comparative periods in the previous year, mainlydue to lower European heating oil demand as a result of milder weather. Refining availability, at 83.4%, improved for the third successive quarter. Wecontinue to make progress in the recommissioning of both the Texas City andWhiting refineries. In line with our prior guidance, by the end of the fourthquarter of 2007 we expect available production capacity to reach 400mb/d and300mb/d at Texas City and Whiting respectively, with sour crude processinghaving resumed at Whiting. We expect to restore both refineries to their fullcrude capacity and flexibility in the first half of 2008. Gas, Power and Renewables ----------------------- Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 ============================= ================ 152 235 (71) Profit before interest and tax(a) 370 853 - (45) 14 Inventory holding (gains) losses (31) 53 ----------------------------- ---------------- Replacement cost profit before interest 152 190 (57) and tax 339 906 ============================= ================ By region: (46) (38) (85) UK (75) 70 (17) (8) (37) Rest of Europe (38) (20) 150 102 (23) US 105 578 65 134 88 Rest of World 347 278 ----------------------------- ---------------- 152 190 (57) 339 906 ============================= ================ Results include: Non-operating items (20) (38) (12) UK (43) 32 - - - Rest of Europe - - 5 1 4 US 6 4 (70) 1 - Rest of World 2 (70) ----------------------------- ---------------- (85) (36) (8) (35) (34) ============================= ================ (a)Profit from continuing operations and includes profit after interest and taxof equity-accounted entities. The replacement cost loss before interest and tax for the third quarter was $57million compared with a profit of $152 million in the same period of 2006. Thereplacement cost profit before interest and tax for the nine months was $339million compared with $906 million in the same period of 2006. Included in theresult for the quarter was a net charge for non-operating items of $8 millionprimarily arising from fair value losses on embedded derivatives related tolong-term gas contracts. The corresponding quarter of 2006 included a netnon-operating charge of $85 million. The third-quarter result decreased by more than $200 million over the thirdquarter of 2006. This reflected a significant reduction in the contribution fromthe marketing and trading businesses, lower natural gas liquids volumes andhigher Alternative Energy expenditure, partly offset by improved margins in thenatural gas liquids business and a lower charge related to non-operating items.The nine-months result was lower than the same period in 2006, largelyreflecting weaker contributions from the marketing and trading businesses andhigher expenditure in the Alternative Energy business. Information on fair value accounting effects is set out on page 10. Other Businesses and Corporate -------------------------- Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 ========================= ================= (213) (162) (462) Profit (loss) before interest and tax(a) (739) (620) (48) (2) 11 Inventory holding (gains) losses 8 (51) ------------------------- ----------------- Replacement cost profit (loss) before (261) (164) (451) interest and tax (731) (671) ========================= ================= By region: (327) (25) 124 UK 53 (548) 9 (2) (77) Rest of Europe (58) (40) 35 (112) (359) US (585) (106) 22 (25) (139) Rest of World (141) 23 ------------------------- ----------------- (261) (164) (451) (731) (671) ========================= ================= Results include: Non-operating items (25) - 1 UK 1 (25) (2) - (11) Rest of Europe 17 (3) 105 7 (199) US (186) 124 - - 4 Rest of World 4 17 ------------------------- ----------------- 78 7 (205) (164) 113 ========================= ================= (a)Profit from continuing operations and includes profit after interest and taxof equity-accounted entities. Other businesses and corporate comprises Finance, the group's aluminium asset,interest income and costs relating to corporate activities. The third quarter'sresult included a net charge of $205 million in respect of non-operating itemswhich was primarily comprised of new, and revisions to existing, provisions. Information on fair value accounting effects ----------------------------------- BP uses derivative instruments to manage the economic exposure relating toinventories above normal operating requirements of crude oil, natural gas andpetroleum products as well as certain contracts to supply physical volumes atfuture dates. Under IFRS, these inventories and contracts are recorded athistoric cost and on an accruals basis respectively. The related derivativeinstruments, however, are required to be recorded at fair value with gains andlosses recognized in income because hedge accounting is either not permitted ornot followed, principally due to the impracticality of effectiveness testingrequirements. Therefore, measurement differences in relation to recognition ofgains and losses occur. Gains and losses on these inventories and contracts arenot recognized until the commodity is sold in a subsequent accounting period.Gains and losses on the related derivative commodity contracts are recognized inthe income statement from the time the derivative commodity contract is enteredinto on a fair value basis using forward prices consistent with the contractmaturity. IFRS requires that inventory held for trading be recorded at its fair valueusing period end spot prices whereas any related derivative commodityinstruments are required to be recorded at values based on forward pricesconsistent with the contract maturity. Depending on market conditions, theseforward prices can be either higher or lower than spot prices resulting inmeasurement differences. The Gas, Power and Renewables business enters into contracts for pipelines andstorage capacity which, under IFRS, are recorded on an accruals basis. Thesecontracts are risk managed using a variety of derivative instruments which arefair valued under IFRS. This results in measurement differences in relation torecognition of gains and losses. The way that BP manages the economic exposures described above, and measuresperformance internally, differs from the way these activities are measured underIFRS. BP calculates this difference by comparing the IFRS result withmanagement's internal measure of performance, under which the inventory and thesupply and capacity contracts in question are valued based on fair value usingrelevant forward prices prevailing at the end of the period. We believe thatdisclosing management's estimate of this difference provides useful informationfor investors because it enables investors to see the economic effect of theseactivities as a whole. The impacts of fair value accounting effects, relative tomanagement's internal measure of performance, are shown in the table below.Information for all quarters of 2005 and 2006 can be found at www.bp.com/FVAE. Third Second Third Quarter Quarter Quarter Nine Months 2006 2007 2007 $ million 2007 2006 ========================= ================= Refining and Marketing Unrecognized gains (losses) brought forward from 332 611 274 previous period 72 283 252 (274) (367) Unrecognized (gains) losses carried forward (367) 252 ------------------------- ----------------- Favourable/(unfavourable) impact relative to 584 337 (93) management's measure of performance (295) 535 ========================= ================= Gas, Power and Renewables Unrecognized gains (losses) brought forward from 376 124 198 previous period 155 123 (399) (198) (234) Unrecognized (gains) losses carried forward (234) (399) ------------------------- ----------------- Favourable/(unfavourable) impact relative to (23) (74) (36) management's measure of performance (79) (276) ========================= ================= 561 263 (129) (374) 259 (222) (92) 46 Taxation(a) 134 (116) ------------------------- ----------------- 339 171 (83) (240) 143 ========================= ================= By region Refining and Marketing 111 83 45 UK (53) 136 156 48 2 Rest of Europe (115) 161 315 174 (142) US (133) 244 2 32 2 Rest of World 6 (6) ------------------------- ----------------- 584 337 (93) (295) 535 ========================= ================= Gas, Power and Renewables (48) (4) (22) UK 12 (12) - - - Rest of Europe - - 14 (71) (19) US (96) (250) 11 1 5 Rest of World 5 (14) ------------------------- ----------------- (23) (74) (36) (79) (276) ========================= ================= (a)Tax is calculated using the quarter's effective tax rate on replacement costprofit from continuing operations. The amounts shown in the table above, in respect of comparative periods for theRefining and Marketing segment, have been revised from those disclosedpreviously. The revisions reflect changes in the basis for valuation of certainforward supply contracts to be consistent with the method used for other forwardsupply contracts when calculating management's internal measure of performance.The changes to comparative figures are not material in relation to management'sinternal measure of the Refining and Marketing segment's performance. Thechanges have no impact on the results reported under IFRS. Cautionary Statement: The foregoing discussion contains forward lookingstatements particularly those regarding production and refining production andcapacity. By their nature, forward looking statements involve risk anduncertainty and actual results may differ from those expressed in suchstatements depending on a variety of factors including the following: the timingof bringing new fields on stream; industry product supply; demand and pricing;operational problems; general economic conditions (including inflation);political stability and economic growth in relevant areas of the world; changesin 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; warsand acts of terrorism or sabotage; and other factors discussed in thisAnnouncement. For more information you should refer to our Annual Report andAccounts 2006 and our 2006 Annual Report on Form 20-F filed with the USSecurities and Exchange Commission. 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