BP 2005 Annual Report Download - page 50

48 Making energy more
Notes on financial statements continued
6 Segmental analysis
The group’s primary format for segment reporting is business segments and the secondary format is geographical segments. The risks and returns
of the group’s operations are primarily determined by the nature of the different activities that the group engages in, rather than the geographical
location of these operations. This is reflected by the group’s organizational structure and the group’s internal financial reporting systems.
BP has three reportable operating segments: Exploration and Production; Refining and Marketing; and Gas, Power and Renewables. Exploration
and Production's activities include oil and natural gas exploration and field development and production, together with pipeline transportation and
natural gas processing. The activities of Refining and Marketing include oil supply and trading as well as refining and petrochemicals manufacturing
and marketing. Gas, Power and Renewables activities include marketing and trading of natural gas, natural gas liquids, new market development,
liquefied natural gas (LNG) and solar and renewables. The group is managed on an integrated basis.
The accounting policies of operating segments are the same as those described under the heading Accounting policies.
Sales between segments are made at prices that approximate market prices, taking into account the volumes involved. Segment revenue,
segment expense and segment result include transactions between business segments. These transactions and any unrealized profits and losses
are eliminated on consolidation.
The group’s geographical segments are based on the location of the group’s assets. The UK and US are significant countries of activity for
the group; the other geographical segments are determined by geographical location.
Sales to external customers are based on the location of the seller, which in most circumstances is not materially different from the location
of the customer. Crude oil and LNG are commodities for which there is an international market and buyers and sellers can be widely separated
geographically. The UK segment includes the UK-based international activities of Refining and Marketing.
$ million
2005
Gas, Other Consolidation Consolidation
Exploration Refining Power businesses adjustment adjustment Total
and and and and and Total Innovene and continuing
By business Production Marketing Renewables corporate eliminations group operations eliminationsaoperations
SALES AND OTHER
OPERATING REVENUES
Segment revenues 47,210 220,134 28,561 21,295 (55,359) 261,841 (20,627) 8,251 249,465
Less: sales between businesses (32,606) (11,407) (3,095) (8,251) 55,359 – 8,251 (8,251) –
Third party sales 14,604 208,727 25,466 13,044 – 261,841 (12,376) – 249,465
RESULTS
Profit (loss) before interest and tax 25,508 6,942 1,104 (523) (208) 32,823 (668) 527 32,682
Finance costs and other
finance expense ––––(758) (758) (3) – (761)
Profit (loss) before taxation 25,508 6,942 1,104 (523) (966) 32,065 (671) 527 31,921
Taxation ––––(9,433) (9,433) 133 (173) (9,473)
Profit (loss) for the year 25,508 6,942 1,104 (523) (10,399) 22,632 (538) 354 22,448
Includes
Equity-accounted income 3,238 238 19 34 – 3,529 14 – 3,543
ASSETS AND LIABILITIES
Segment assets 93,479 77,352 28,441 12,756 (5,326) 206,702
Tax receivable ––––212 212
Total assets 93,479 77,352 28,441 12,756 (5,114) 206,914
Includes
Equity-accounted investments 14,657 4,012 483 621 – 19,773
Segment liabilities (20,387) (31,727) (23,346) (15,358) 4,548 (86,270)
Current tax payable ––––(4,274) (4,274)
Finance debt ––––(19,162) (19,162)
Deferred tax liabilities ––––(16,443) (16,443)
Total liabilities (20,387) (31,727) (23,346) (15,358) (35,331) (126,149)
OTHER SEGMENT INFORMATION
Capital expenditure
Intangible assets 989 451 31 10 – 1,481
Property, plant and equipment 8,751 2,036 199 779 – 11,765
Other 497 285 5 116 – 903
To t al 10,237 2,772 235 905 – 14,149
Depreciation, depletion and amortization 6,033 2,392 225 533 – 9,183 (412) – 8,771
Impairment 266 93 – 59 – 418 (59) – 359
Loss on remeasurement to fair value
less costs to sell and on disposal of
Innovene operations – – – 591 – 591 (591) – –
Losses on sale of businesses and
fixed assets 39 64 – 6 – 109 – – 109
Gains on sale of businesses and
fixed assets 1,198 241 55 47 – 1,541 (3) – 1,538