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BP reports record performance

BP reports record performance

BP Amoco p.l.c. Group Results
4th Quarter and Full Year 2000

London 13 February 2001


Original location:

BP's pro forma result, adjusted for special items, for the fourth quarter was $4,090 million compared to $2,123 million a year ago. The result per share was 18.25 cents compared to 10.94 cents a year ago, an increase of 67%. For the year, the result was $14,203 million, compared to $6,206 million in 1999. The result per share was 65.63 cents, up from 32.00 cents, an increase of 105%. Replacement cost profit, before exceptional items, for the fourth quarter and year was $2,799 million and $11,214 million respectively, compared to $1,684 million and $5,330 million a year ago. $2 billion year on year reductions in the combined cost structure of BP and ARCO have been achieved. Return on average capital employed, on a pro forma basis and adjusted for special items, is 25% for the fourth quarter compared to 17% a year ago. The annual return is 23% compared to 13% in 1999. The company purchased for cancellation 71.5 million of its own shares during the quarter. Total purchases in 2000 amounted to 221.7 million shares at a cost of $2 billion. Fourth quarter upstream volumes increased 9% on a year ago. Excluding the effect of acquisitions and divestments, volumes declined by 4%. For the year, the comparable numbers are an increase of 4% and a decrease of 2% respectively. 1.8 billion barrels of oil equivalent were added during the year to reserves through revisions, extensions, discoveries and improved recovery; this represents a reserve replacement ratio of 160%. Quarterly dividend 5.25 cents per share ($0.315 per ADS). Total dividends for the year amount to 20.5 cents per share ($1.23 per ADS) compared to 20.0 cents per share ($1.20 per ADS) in 1999.
BP Group Chief Executive, Sir John Browne, commented:

"The strong trading environment, together with the benefits of recent integration and restructuring, and productivity improvements, has produced an outstanding worldwide result for BP. We have delivered on our 2000 cost saving target and are on track for the cost saving and improvement in return on capital targets by the end of 2001. Hydrocarbon production is set to grow after the plateau seen in 2000 resulting from curtailed investment at the time of the BP Amoco merger."

The financial performance information above and elsewhere in the document is provided in order to enable investors to evaluate better both the company's current performance, in the context of past performance, and its performance against that of its competitors. The pro forma result, adjusted for special items, has been derived from the company's reported UK GAAP accounting information but is not in itself a recognized UK or US GAAP measure.
The special items refer to non-recurring charges and credits. The special items for the quarter and year comprise principally ARCO, Vastar and Burmah Castrol integration costs, rationalization costs post the BP Amoco merger, environmental charges and asset writedowns. Depreciation and amortization in 2000 relating to the fixed asset revaluation adjustment and goodwill consequent upon the ARCO and Burmah Castrol acquisitions.
Summary Results

Exploration and Production's pro forma results, adjusted for special items, for the quarter and the year, were again at record levels and reflected significantly higher oil and gas prices, the contribution from ARCO and lower costs. Production was at record levels; the year was up 4% on 1999. When acquisitions and disposals are excluded there was a decline of 2%, reflecting the reduced 1999 capital expenditure programme. Capital expenditure has increased during 2000 and totalled $6.4 billion for the year. The reserve replacement ratio was 160% with 1.8 billion barrels of oil equivalent booked through revisions, extensions, discoveries and improved recovery. Recently, for the Gulf of Mexico projects, industrial capacity of around $3 billion was secured for fabrication and installation, in Vietnam, key elements of the $1.5 billion gas project were signed and, in Alaska, it was agreed to carry out a joint feasibility study for the gas pipeline. There have been discoveries offshore Angola and in the Gulf of Mexico.

In Gas and Power, gas sales volumes increased significantly for both the quarter and the year, both on a reported basis and also excluding acquisitions and divestments. For the year, the improved contribution from operations partly offset increased business development costs.

The strong Refining and Marketing results for the quarter and year reflected significantly higher refining margins, though marketing margins came under pressure from higher product prices, and contributions from ARCO and Burmah Castrol. The year's result also benefited from cost reductions and a strong oil trading performance.

The Chemicals' result for the quarter was down from the third quarter as higher oil and natural gas prices and a weak euro eroded margins and slowed demand growth. The result for the year was an improvement on 1999. The year's result benefited from productivity improvements which more than offset the effect of the weaker environment.

Interest expense for the quarter and year reflected higher debt and interest rates.

The pro forma effective tax rate on replacement cost profit, before exceptional items, was 28% in the quarter and 27% for the year.

Excluding the cost of acquisitions and spending by the acquisitions, capital expenditure for the year was $9.0 billion, compared to $6.9 billion in 1999, an increase of 29%. Disposal proceeds amounted to $11.4 billion compared to $2.4 billion a year ago. Cash acquisitions in 2000 amounted to $8.9 billion compared to $0.4 billion in 1999. Net cash outflow for capital expenditure and acquisitions, net of disposals, was $6.2 billion compared with $5.1 billion for 1999.

Net debt at the end of the year was $19.4 billion. The pro forma ratio of net debt to net debt plus equity was 27%.

Net cash outflow for the quarter was $1,647 million, compared with an inflow of $1,908 million a year ago. This reflects higher operating cash flow more than offset by increased tax payments and net cash outflows in respect of capital expenditure, acquisitions and disposals. The year's cash inflow was $3,743 million, compared to an outflow of $82 million in 1999. This results from an almost doubling of operating cash flow at $20.4 billion, partially offset by higher tax payments and net cash outflows from capital expenditure, acquisitions and disposals.

Summary Results (continued)

------ The commentaries above and following are based on the pro forma replacement cost operating results for the quarter, before exceptional items, adjusted for special items. The results of ARCO and Burmah Castrol have been included with effect from 14 April and 7 July 2000 respectively. The European fuels joint venture has been consolidated with effect from 1 August 2000. Included in the group's pro forma operating result for the year, adjusted for special items, are estimated amounts of $2,600 million in respect of ARCO, $200 million in respect of Burmah Castrol and $180 million in respect of the purchased interest in the European fuels joint venture, representing their respective results since their dates of acquisition.

Following the recent completion of the fair value exercises for the ARCO and Burmah Castrol acquisitions, the charges for depreciation and goodwill amortization for the second and third quarters have been increased. The results for those two periods have been restated to reflect these higher charges. The pro forma results, adjusted for special items, are unaffected


London New York Frankfurt Press Roddy Kennedy Ian Fowler Office +44 (0)20 7496 4624 +1 212 451 8008

Investor Greg Coleman Terry LaMore Karl Weckel Relations +44 (0)20 7496 4717 +1 212 451 8034 +49 (0)69 71 37 9990

There will be a presentation to analysts at 13.00 GMT / 08.00 EST on Tuesday 13th February in which Sir John Browne (CEO) will cover the Group's progress to existing targets and outlook for 2001. John Buchanan (CFO) will cover the 4Q and Year 2000 results.

There will be a live webcast of the presentation, available at


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