Final Results

BG Group plc

2010 FOURTH QUARTER & FULL YEAR RESULTS

Full Year Highlights

·; Business Performance(a) earnings per share up 18%

·; Strong cash flow from operations of $8.4 billion

·; Full year dividend increased by 10% to 21.60 cents per share (13.66 pence per share)

·; Excellent progress on major projects in Australia, Brazil and the USA

·; Three-year proved reserve replacement ratio of 223%

·; Total reserves and resources increased by 1.7 billion boe to 16.2 billion boe

BG Group's Chief Executive, Frank Chapman said:

"BG Group delivered good financial results for 2010. The reserves replacement ratio is further evidence of our progress with the major projects underpinning our very strong growth programme to 2020."

BG Group issued its annual strategy update (available at www.bg-group.com) in conjunction with these results.

a) 'Business Performance' excludes discontinued operations and disposals, certain re-measurements and impairments as exclusion of these items provides a clear and consistent presentation of the underlying operating performance of the Group's ongoing business. During the fourth quarter, total results included a pre-tax charge of $342 million in relation to mark-to-market movements on long-term commodity contracts and economic hedges (pre-tax charge of $591 million for the full year). For further explanation of Business Performance and the presentation of results from joint ventures and associates, see Presentation of Non-GAAP measures (page 7),

note 1 (page 14) and note 3 (page 16). For further details of the items included in disposals, re-measurements and impairments, see note 2 (page 15). Unless otherwise stated, the results discussed in this release relate to BG Group's Business Performance.

b) 2009 results have been restated: from Pounds Sterling to US Dollars; to reflect the application of IFRIC 12; and to reflect the presentation of the majority of the businesses that comprised the Power Generation segment as discontinued operations (see note 1, page 14).

c) For further information on discontinued operations see page 3, note 1 (page 14) and note 6

Business Review - Group

a) See note 1 (page 14).

b) Includes capital investment relating to discontinued operations for the quarter of $nil (2009 $28 million) and for the full year of $28 million (2009 $44 million).

Fourth quarter

Revenue and other operating income increased by 1% to $4 363 million, reflecting higher realised prices, partially offset by lower LNG managed volumes and E&P production volumes.

This increased revenue and other operating income, together with a lower exploration charge, resulted in a 3% increase in total operating profit to $1 802 million.

Cash generated by operations was $1 813 million (2009 $2 177 million). Net finance costs were $48 million.

Capital investment of $2 497 million in the quarter comprised investment in E&P ($2 071 million), LNG ($337 million) and T&D ($89 million) and reflected a ramp-up of activity in Australia, Brazil and the USA.

Full year

Revenue and other operating income increased by 11% to $17 363 million and total operating profit increased by 9% to $6 925 million, primarily reflecting the impact of higher commodity prices.

Net finance costs of $156 million (2009 $192 million) benefited from foreign exchange gains of $82 million

(2009 $45 million gains).

The Group's effective tax rate (including BG Group's share of joint venture and associates' tax) was 38.5%

(2009 42%) for the full year and included a credit of $106 million in relation to a favourable settlement for a prior period.

Cash generated by operations increased by 10% to $8 370 million (2009 $7 597 million). As at 31 December 2010, net debt was $6 973 million and the gearing ratio of the Group was 20%.

Capital investment in the year (including acquisitions of $1 233 million) was $9 247 million and included investment in E&P ($7 092 million), LNG ($1 868 million) and T&D ($259 million).

In considering the dividend level the Board takes account of the outlook for earnings growth, cash flow and financial gearing. Taking these factors into account, the Board has recommended a final dividend of 11.78 cents per share

(7.31 pence per share), bringing the full year dividend to 21.60 cents per share (13.66 pence per share), an increase of 10% compared with last year. The final dividend will be paid to shareholders in Pounds Sterling on 20 May 2011.

Discontinued operations - Power Generation

Following the disposal of the Group's power stations in the USA and UK earlier in the year, BG Group announced in September 2010 that it had agreed to sell its interests in the Santa Rita and San Lorenzo power stations in the Philippines subject to receiving necessary waivers and consents. Together, these power stations represented the majority of the Group's Power Generation business segment and were considered to be a separate major line of business for BG Group. As a result of these sales, these operations have been treated as discontinued operations for the year ended 31 December 2010.

The Power businesses that remain with BG Group have been allocated to other business segments based on their activity and location. Comparative information has also been restated. For further information on discontinued operations, see note 1 (page 14) and note 6.

Disposals, re-measurements and impairments

A post-tax charge of $152 million for the quarter and $631 million for the full year was recorded in respect of disposals, re-measurements and impairments. The full year charge included a post-tax charge of $407 million in relation to

mark-to-market movements on long-term commodity contracts and economic hedges and a post-tax charge of

$224 million in relation to profits and losses on disposal of non-current assets and impairments. For further information, see note 2 (page 15).

Board change

In December, BG Group announced that Ashley Almanza will stand down from the Board and leave his role as Chief Financial Officer on 31 March 2011. BG Group also announced that Fabio de Oliveira Barbosa had joined the Group. It is intended that Mr Barbosa will join the Board as Chief Financial Officer on 31 March 2011.

Exploration and Production (E&P)

a) See note 1 (page 14).

Additional operating and financial data is given on page 22.

Fourth quarter

Revenue and other operating income increased by 6% to $2 284 million, reflecting the impact of higher realised prices, partially offset by a 2% fall in production volumes.

Total operating profit of $1 067 million was 13% higher as a result of the increase in revenue and other operating income and a lower exploration charge, partially offset by higher unit operating costs and depreciation charges.

International gas realisations were 22% higher at 32.81 cents per produced therm, reflecting gas prices linked to higher oil market prices and favourable mix effects. The average UK realised gas price was 43.78 pence per produced therm, 18% higher than 2009.

The exploration charge of $162 million was $122 million lower as a result of lower well write-off.

Unit operating expenditure increased to $7.32 per barrel of oil equivalent (2009 $6.40 per barrel of oil equivalent), reflecting the impact of higher commodity prices and changes in the production mix.

Capital investment of $2 071 million in the quarter comprised investment in the Americas ($844 million), Africa, Middle East and Asia ($521 million), Australia ($481 million) and Europe and Central Asia ($225 million).

Full year

Revenue and other operating income was 15% higher at $8 583 million, reflecting higher commodity prices.

Total operating profit increased by 17% to $3 766 million as a result of the increase in revenue and other operating income and a lower exploration charge.

Production volumes increased by 0.8 mmboe for the full year as production growth from the USA, Tunisia and Australia was largely offset by lower production in the UK, Egypt and India and planned maintenance activity, particularly in Kazakhstan.

International gas realisations for the full year increased by 17% to 32.81 cents per produced therm, reflecting gas prices linked to higher oil and Henry Hub market prices. The average realised gas price in the UK decreased to

36.86 pence per produced therm as a result of lower contract prices.

Unit operating expenditure increased to $7.28 per barrel of oil equivalent (2009 $5.97 per barrel of oil equivalent), reflecting the impact of higher maintenance activity, changes in the production mix and higher commodity prices.

The exploration charge fell by $170 million to $765 million as a result of lower well write-off.

Capital investment of $7 092 million in the year comprised investment in the Americas ($3 525 million, including

$1 233 million on acquisitions in the USA as part of the alliance with EXCO Resources, Inc.), Africa, Middle East and Asia ($1 387 million), Australia ($1 103 million) and Europe and Central Asia ($1 077 million).

Fourth quarter business highlights

Brazil

In December, BG Group announced that its partner Petrobras, as the operator of block BM-S-11 (BG Group 25%) in the Santos Basin, filed the Declaration of Commerciality (DoC) with the Brazilian National Agency of Petroleum, Natural Gas and Biofuels for the accumulations of light oil and gas in the Tupi and Iracema areas. In the proposal sent to the regulatory body, the names "Lula" field and "Cernambi" field have been proposed for Tupi and Iracema respectively. The DoC is another significant milestone in the development of the Group's substantial interests in the region, marking the start of the commercial production phase for the fields and setting the licence period to run to 2037.

Further announcements were made in November 2010 and January 2011 regarding Floating Production, Storage and Offloading (FPSO) vessels for the Santos Basin developments. There are now 13 FPSOs being procured across the two blocks, with four currently allocated to BM-S-9 (BG Group 30%) which includes the Carioca and Guará areas and nine allocated to BM-S-11 which includes the Lula and Cernambi fields, as well as the Iara area. This will result in a gross production capacity of some 2.3 million boe per day onstream by 2017.

In December, BG Group provided additional data on operational and capital costs. The cost update related to the first two FPSO vessels on the Lula field and the first FPSO on the Guará field. Based on the new resources estimates for these fields previously released by BG Group in November 2010, the three FPSOs are expected to recover total gross reserves of approximately 2.2 billion boe - approximately 600 mmboe net to BG Group - within the concession periods, utilising a total of approximately 40 production and injection wells. In light of the outstanding reservoir characteristics and high recovery per well, BG Group anticipates very low unit technical costs for this initial phase of development, amounting to: capital costs of $5/boe and operating costs of $9/boe.

In December, BG Group confirmed that the eleventh well on the BM-S-11 concession was successful. The well, encountered a 90-metre reservoir section on the western flank of Lula, which will help further delineate the size and quality of the field.

In December, BG Group announced that the initial Extended Well Test (EWT) on the Guará discovery in the BM-S-9 concession commenced. The EWT will last for about five months with gross daily production estimated to average about 20 000 bopd. Following completion of the EWT, commercial production on the discovery will commence in 2013 with wells connected to the FPSO Cidade de São Paulo which has a production capacity of 120 000 bopd and around 177 mmscfd.

In January 2011, BG Group confirmed a new discovery of light oil in a 200-metre reservoir section in block BM-S-9. The discovery well, known as Carioca North-East, is located nine kilometres north-east of the original Carioca discovery well. Drilling on Carioca North-East has been concluded and drill stem tests will be conducted in due course.

Tanzania

In December, BG Group announced that its second Tanzanian exploration well, Chewa-1, had also discovered gas. The well, located in Block 4 approximately 80 kilometres offshore southern Tanzania in a water depth of around

1 300 metres, is some eight kilometres north-west of BG Group's Pweza-1 gas discovery announced in October 2010. A third well is planned for early 2011.

China

In December, BG Group announced a discovery on Block 64/11 offshore China after the Lingshui 22-1-1 exploration well encountered gas-bearing sands. The well, the first drilled by BG Group in China, is in the deep-water Qiongdongnan Basin in the South China Sea, approximately 130 kilometres offshore and in a water depth of

1 338 metres. BG Group plans to continue its exploration programme in 2011 with a second well and the acquisition of 1 500 square kilometres of 3D seismic data on Block 63/16 later in the year.

Norway

In January 2011, BG Group submitted the Plan for Development and Operation for the Jordbær field, to the Norwegian Ministry of Petroleum and Energy for approval. Jordbær is an oil field in a water depth of 410 metres, situated in the Tampen North area in the Norwegian North Sea. It will be developed using a leased FPSO and first production is expected by the end of 2013.

UK

In February 2011, following the exercise of pre-emption rights under its joint operating agreements, BG Group completed its acquisition of Hess Limited's equity in the Everest and Lomond fields, located in the UK central North Sea. Following the transaction, BG Group increased its interests in Everest and Lomond to 99.1% and 100% respectively.

USA

In February 2011, BG Group acquired further Marcellus shale properties in partnership with EXCO Resources, Inc. for a consideration of approximately $230 million, net to BG Group.

Bolivia

In January 2011, BG Group and partners in the Itaú consortium (BG Group 25%), submitted a field development plan (FDP) to the Bolivian national oil company (YPFB) for approval as part of Itaú Phase II. The FDP includes the drilling of a new well, the sidetrack of two existing wells and the construction of a new processing facility. This follows the project sanction by BG Group and congressional approval of the farm-in to Total's equity by Petrobras who becomes operator. First production from Phase II is expected in 2013.

Liquefied Natural Gas (LNG)

a) See note 1 (page 14).

Additional operating and financial data is given on page 22.

Fourth quarter

LNG total operating profit for the quarter was $550 million.

Shipping and marketing total operating profit of $484 million was 11% lower, reflecting fewer cargoes in the quarter.

BG Group's share of operating profit from liquefaction activities of $86 million was in line with 2009.

Capital investment of $337 million in the quarter included $300 million in Australia and $16 million in Chile.

Full year

LNG total operating profit increased by 2% to $2 449 million.

Shipping and marketing total operating profit of $2 221 million was in line with 2009.

BG Group's share of operating profit from liquefaction activities of $326 million was in line with last year.

Capital investment of $1 868 million in the year included $944 million in Australia, $492 million following the commissioning of a natural gas liquids-stripping facility at Lake Charles in the USA, $320 million relating to LNG ships and $40 million in Chile.

Fourth quarter business highlights

In January 2011, GNL Quintero S.A. (BG Group 40%) issued the declaration of full commercial operations. BG Group has a supply contract to certain Chilean gas buyers for up to 1.7 mtpa for 21 years from September 2009.

During the quarter, BG Group took delivery of two new-generation LNG ships. Both 170 000 cubic metre capacity ships have tri-fuel diesel electric (heavy fuel oil/gas/marine fuel) propulsion and reliquefaction capability. The ships are some of the first in the world to integrate onboard reliquefaction with the propulsion system, allowing natural gas boil-off to be consumed as fuel or reliquefied and returned to cargo tanks.

Transmission and Distribution (T&D)

a) See note 1 (page 14).

Fourth quarter

Revenue and other operating income increased by 5% to $827 million, reflecting higher volumes at Comgás in Brazil and at Gujarat Gas in India.

T&D total operating profit of $190 million was 13% lower, reflecting the timing effect of gas cost recovery at Comgás.

The net recovery of gas costs at Comgás in the quarter was $43 million compared with $77 million in 2009. At the end of the quarter, $137 million of net benefit is due to be passed back to customers in future periods. Excluding the timing effect of gas cost recovery, total operating profit at Comgás was 2% lower, as higher volumes were offset by changes in the sales mix and higher costs.

Full year

Revenue and other operating income increased by 15% to $3 081 million, reflecting higher volumes at Comgás, following a recovery in demand within the industrial and power segments, and at Gujarat Gas in India.

T&D total operating profit for the full year was $711 million.

The net recovery of gas costs at Comgás for the full year was $149 million compared with $252 million in 2009. Excluding the timing effect of gas cost recovery, operating profit at Comgás increased by 19% principally as a result of higher volumes and favourable foreign exchange movements.

Operating profit for other T&D activities increased by $29 million to $157 million, reflecting higher volumes and prices at Gujarat Gas.

Capital investment mainly represents the development of the Comgás pipeline network.

Power Generation

Following the disposal of the majority of BG Group's power interests, the Group's remaining power assets have been re-allocated to other operating segments based on their activity and location.

Presentation of Non-GAAP measures

Legal Notice

Consolidated Income Statement

Fourth Quarter

a) See note 1 (page 14).

b) See Presentation of Non-GAAP measures (page 7) for an explanation of results excluding disposals, certain re-measurements and impairments and presentation of the results of joint ventures and associates.

c) Operating profit/(loss) is before share of results from joint ventures and associates.

d) Includes earnings from continuing operations of $905 million (2009 $809 million) and from discontinued operations of $35 million (2009 $(55) million).

e) This measurement is shown by BG Group as it is used as a means of measuring the underlying performance of the business.

Consolidated Income Statement

Full Year

a) See note 1 (page 14).

b) See Presentation of Non-GAAP measures (page 7) for an explanation of results excluding disposals, certain re-measurements and impairments and presentation of the results of joint ventures and associates.

c) Operating profit/(loss) is before share of results from joint ventures and associates.

d) Includes earnings from continuing operations of $3 383 million (2009 $3 311 million) and from discontinued operations of $(32) million (2009 $8 million).

e) This measurement is shown by BG Group as it is used as a means of measuring the underlying performance of the business.

Consolidated Statement of Comprehensive Income

a) See note 1 (page 14).

b) Income tax relating to hedge adjustments is a $30 million credit for the quarter (2009 $62 million credit) and a $206 million credit for the full year (2009 $252 million credit).

c) Income tax relating to fair value movements on 'available-for-sale' assets is a $3 million charge for the quarter (2009 $2 million credit) and a $2 million charge for the full year (2009 $2 million credit).

Consolidated Balance Sheet

a) See note 1 (page 14).

Consolidated Statement of Changes in Equity

a) See note 1 (page 14).

Consolidated Cash Flow Statement

a) See note 1 (page 14).

b) Includes profit/(loss) before tax from discontinued operations for the fourth quarter of $38 million (2009 $(99) million) and for the full year of $(121) million

(2009 $(32) million).

c) Includes capitalised interest for the fourth quarter of $31 million (2009 $18 million) and for the full year of $79 million (2009 $49 million).

d) Cash and cash equivalents comprise cash and short-term liquid investments that are readily convertible to cash.

e) The balance at 31 December 2010 includes cash and cash equivalents of $2 533 million and cash included within assets held for sale of $18 million.

Notes

1. Basis of preparation

These primary statements are the unaudited preliminary consolidated financial statements ('the financial statements')

of BG Group plc for the quarter and the full year ended 31 December 2010. The financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006, and should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2009 which have been prepared in accordance with IFRS as adopted by the EU, as they provide an update of previously reported information. The latest statutory accounts delivered to the registrar were for the year ended 31 December 2009 which were audited by BG Group's statutory auditors PricewaterhouseCoopers LLP and on which the Auditors' Report was unqualified and did not contain statements under Sections 498(2) or 498(3) of the Companies Act 2006. These financial statements have been prepared in accordance with the requirements of the Disclosure and Transparency Rules issued by the Financial Services Authority and the accounting policies set out in the 2009 Annual Report and Accounts (except as disclosed below).

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities at the date of the financial statements. If in the future such estimates and assumptions, which are based on management's best judgement at the date of the financial statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.

With effect from 1 January 2010, BG Group has presented its results in US Dollars. Accordingly, 2009 results have been translated from Pounds Sterling to US Dollars using monthly average rates of exchange. Comparative assets and liabilities have been translated from Pounds Sterling to US Dollars at closing rates of exchange. Further information on the procedures used to restate comparative information into US Dollars can be found on page 114 of the 2009 Annual Report and Accounts.

In September 2010, BG Group announced that it had agreed to sell its interests in Santa Rita and San Lorenzo power stations in the Philippines subject to receiving necessary waivers and consents. Accordingly, as at 31 December 2010, these assets were classified as held for sale at their carrying value. This agreement followed the disposal earlier in the year of power stations in the USA, Premier Power Limited in the UK and the Group's investment in the Seabank power station in the UK. Together, these power stations represented the majority of the Group's Power business segment and were considered to be a separate major line of business for BG Group. These operations have been treated as discontinued operations for the year ended 31 December 2010. The Power businesses that remain with BG Group have been allocated to other business segments based on their activity and location.

A single amount is presented on the income statement for discontinued operations, comprising the post-tax results of these businesses and the post-tax profit or loss recognised on re-measurement to fair value less costs to sell and on disposal of the businesses. Comparative information has also been restated to reflect the presentation of discontinued operations as a separate line item.

Presentation of results

The presentation of BG Group's results separately identifies the effect of:

·; The re-measurement of certain financial instruments; and

·; Profits and losses on the disposal and impairment of non-current assets and businesses.

These items, which are detailed in note 2 to the financial statements (page 15), are excluded from Business Performance in order to provide readers with a clear and consistent presentation of the underlying operating performance of the Group's ongoing businesses.

1. Basis of preparation continued 

New accounting standards and interpretations

IFRIC 12 'Service Concession Arrangements' is applicable to BG Group for the period beginning 1 January 2010.

This interpretation provides guidance on the accounting by operators for public-to-private service concession arrangements and requires infrastructure considered to be under the control of a regulator rather than an operator to

be recognised as an intangible concession asset and amortised over the concession period. Prior to the adoption of IFRIC 12 such infrastructure was recognised as property, plant and equipment of the operator and depreciated over

its useful economic life. The interpretation also requires additions to the infrastructure incurred by the operator to be accounted for as a construction contract with the regulator, with revenues and associated costs recognised in the income statement on a percentage of completion basis.

BG Group has concluded that the Comgás concession in Brazil falls within the scope of IFRIC 12 and has applied

the interpretation from 1 January 2010, restating comparative information as necessary. On 1 January 2010, infrastructure associated with the transmission and distribution network operated by Comgás of approximately

$1.6 billion (1 January 2009 $1.1 billion) was recognised as intangible assets resulting in a corresponding decrease to property, plant and equipment. The application of IFRIC 12 has resulted in an increase to revenue and operating costs of $148 million in the full year to 31 December 2010 (2009 $114 million). There has been no change to total operating profit or earnings for the Group.

A number of other amendments to accounting standards issued by the IASB are applicable from 1 January 2010. They have not had a material impact on the Group's financial statements for the full year ended 31 December 2010.

2. Disposals, re-measurements and impairments

Fourth quarter and full year: Revenue and other operating income

Re-measurements included within revenue and other operating income amount to a charge of $342 million for the quarter (2009 $51 million credit), of which a charge of $105 million (2009 $17 million charge) represents non-cash mark-to-market movements on certain long-term UK gas contracts. For the full year, a charge of $591 million in respect of re-measurements is included within revenue and other operating income (2009 $161 million credit), of which a charge of $132 million represents non-cash mark-to-market movements on certain long-term UK gas contracts (2009 $73 million credit). Whilst the activity surrounding these contracts involves the physical delivery of gas, the contracts fall within the scope of IAS 39 and meet the definition of a derivative instrument. In addition, re-measurements include a $237 million charge for the quarter (2009 $68 million credit) and a $459 million charge for the full year (2009 $88 million credit) representing unrealised mark-to-market movements associated with economic hedges.

Fourth quarter and full year: Disposals of non-current assets and impairments

In the second quarter of 2010, BG Group completed the disposal of its Canadian E&P assets, resulting in a pre-tax charge of $40 million (post-tax charge of $30 million) to the income statement.

In the second and third quarters of 2010, $360 million of pre-tax impairment charges (post-tax $262 million) were recognised against certain assets in the E&P segment.

Other disposals and impairments in 2010 resulted in a pre and post-tax $74 million credit in the quarter and a pre-tax credit of $64 million (post-tax credit of $68 million) in the year.

During the fourth quarter of 2009, a pre-tax impairment charge of $217 million (post-tax charge $156 million) was recognised against certain assets in the E&P segment.

Also during the fourth quarter of 2009, plant write-offs and disposals resulted in a pre-tax credit to the income statement of $1 million (post-tax credit $2 million).

Fourth quarter and full year: Net finance costs

Re-measurements presented in net finance costs include certain derivatives used to hedge foreign exchange and interest rate risk, partly offset by foreign exchange movements on certain borrowings.

3. Segmental analysis

a) External sales are attributable to segments as follows: E&P $2 044 million (2009 $2 001 million), LNG $1 446 million (2009 $1 435 million) and T&D $827 million (2009 $784 million). Intra-group sales are attributable to segments as follows: E&P $235 million (2009 $132 million) and LNG $nil (2009 $19 million).

b) Business Performance Other operating income is attributable to segments as follows: E&P $5 million (2009 $19 million) and LNG $41 million (2009 $73 million).

3. Segmental analysis continued 

a) External sales are attributable to segments as follows: E&P $7 781 million (2009 $6 999 million), LNG $6 304 million (2009 $5 761 million) and T&D $3 081 million

(2009 $2 681 million). Intra-group sales are attributable to segments as follows: E&P $777 million (2009 $414 million) and LNG $45 million (2009 $80 million).

b) Business Performance Other operating income is attributable to segments as follows: E&P $25 million (2009 $35 million) and LNG $172 million (2009 $191 million).

3. Segmental analysis continued

4. Net finance costs

a) Relates to the unwinding of the discount on provisions and amounts in respect of pension obligations which represent the unwinding of discount on the plans' liabilities offset by the expected return on the plans' assets.

b) Includes foreign exchange gains for the quarter of $18 million (2009 $13 million) and foreign exchange gains for the full year of $82 million (2009 $45 million).

c) Excludes Group share of net finance costs from joint ventures and associates for the quarter of $14 million (2009 $16 million) and for the full year of $49 million

(2009 $45 million).

5. Taxation

The taxation charge for the fourth quarter before disposals, re-measurements and impairments was $626 million

(2009 $689 million) and the taxation charge including disposals, re-measurements and impairments was $506 million (2009 $635 million).

For the full year, the taxation charge before disposals, re-measurements and impairments was $2 494 million

(2009 $2 500 million) and the taxation charge including disposals, re-measurements and impairments was

$2 198 million (2009 $2 493 million).

The Group share of taxation from joint ventures and associates for the fourth quarter was $30 million (2009 $35 million) and for the full year was $112 million (2009 $95 million).

6. Discontinued operations

During 2010, the Group completed the disposal of its power plants in the USA, Premier Power Limited in the UK and its investment in the Seabank power plant in the UK.

The sale of the Group's investment in the Seabank power plant resulted in a pre and post-tax profit on disposal of

$167 million. The disposal of Premier Power Limited resulted in a pre-tax loss on disposal of $24 million (post-tax loss of $29 million).

During the year, the Group's power plants in the USA were revalued to their fair value less costs to sell and subsequently sold. This resulted in a pre-tax charge to the income statement of $321 million (post-tax charge

$222 million).

In 2010, BG Group also signed a Sale and Purchase Agreement for the sale of its interests in both the Santa Rita and San Lorenzo power stations in the Philippines. Accordingly, these assets were reclassified as held for sale at their carrying value.

In 2009, a pre-tax impairment charge of $139 million (post-tax charge $89 million) was recognised against the Group's US power plants.

Excluding profits and losses on disposals and impairments, the post-tax profit/loss of the businesses comprising discontinued operations for the fourth quarter was a $2 million loss (2009 $34 million profit) and for the full year was a $52 million profit (2009 $97 million profit).

7. Earnings per ordinary share - continuing operations

Basic earnings per share calculations in 2010 are based on the weighted average number of shares in issue of

3 385 million for the quarter and 3 381 million for the full year. The earnings figure used to calculate diluted earnings per ordinary share is the same as that used to calculate earnings per ordinary share given above, divided by 3 407 million for the quarter and 3 402 million for the full year, being the weighted average number of ordinary shares in issue during the period as adjusted for dilutive equity instruments.

8. Reconciliation of net borrowings(a) - Full Year

Net borrowings attributable to Comgás were $798 million (31 December 2009 $829 million).

As at 31 December 2010, BG Group's share of the net borrowings in joint ventures and associates amounted to approximately $1.7 billion, including BG Group shareholder loans of approximately $1.3 billion. These net borrowings are included in BG Group's share of the net assets in joint ventures and associates which are consolidated in BG Group's accounts.

a) Net borrowings/funds are defined on page 24.

b) During 2010, BG Group issued €750 million and £750 million bonds maturing in 2019 and 2025 respectively, both under its Euro Medium Term Note Programme, and $350 million and $650 million bonds maturing in 2015 and 2020 respectively, pursuant to Rule 144A and Reg S under the US Securities Act of 1933, as amended.

c) Net borrowings comprise:

d) These items are included within commodity contracts and other derivative financial instrument balances on the balance sheet.

e) Includes finance lease receivable of $134 million (2009 $nil) included within non-current assets on the balance sheet.

8. Reconciliation of net borrowings - Full Year continued

Liquidity and Capital Resources

All the information below is as at 31 December 2010

The Group's principal borrowing entities are: BG Energy Holdings Limited (BGEH), including wholly owned subsidiary undertakings, the majority of whose borrowings are guaranteed by BG Energy Holdings Limited (collectively BGEH), and Comgás and Gujarat Gas which conduct their borrowing activities on a stand-alone basis.

BGEH had a $2.0 billion US Commercial Paper Programme, of which $1 176 million was unutilised, and a $2.0 billion Eurocommercial Paper Programme, of which $1 827 million was unutilised. BGEH also had a $7.5 billion Euro Medium Term Note Programme, of which $3.1 billion was unutilised.

BGEH had aggregate committed multicurrency revolving borrowing facilities of $1.2 billion which expire in 2012 and $2.3 billion which expire in 2013. There are no restrictions on the application of funds under these facilities, which were undrawn.

In addition, BGEH had uncommitted borrowing facilities including multicurrency lines, overdraft facilities of £45 million and credit facilities of $20 million, all of which were unutilised.

Comgás had committed borrowing facilities of Brazilian Real (BRL) 1 730.1 million, of which BRL 316.5 million was unutilised, and uncommitted borrowing facilities of BRL 200 million, of which BRL 150 million was unutilised.

9. Dividends

The proposed final dividend for the year ended 31 December 2010 of 11.78c takes the 2010 full year dividend to 21.60c.

The final dividend of 10.43c ($352 million) in respect of the year ended 31 December 2009 was paid on 21 May 2010

to shareholders on the register at the close of business on 16 April 2010. The interim dividend of 9.82c ($332 million) in respect of the year ended 31 December 2010 was paid on 10 September 2010 to shareholders on the register as at

6 August 2010. The proposed final dividend of 11.78c ($399 million) in respect of the year ended 31 December 2010 is payable on 20 May 2011 to shareholders on the register at the close of business on 15 April 2011.

10. Capital investment: geographical analysis

a) Includes capital investment relating to discontinued operations for the quarter of $nil (2009 $28 million) and for the full year of $28 million (2009 $44 million).

11. Post balance sheet events

BG Group has important businesses in Tunisia and Egypt. Recent events in these countries have had no material impact on BG Group and management continues to monitor developments closely.

12. Quarterly information: earnings and earnings per share

Supplementary information: Operating and financial data