BP 2007 Annual Report Download - page 86

shares will be paid in pounds sterling and on BP ADSs in US dollars. The
rate of exchange used to determine the sterling amount equivalent is the
average of the forward exchange rate in London over the five business
days prior to the announcement date. The directors may choose to
declare dividends in any currency provided that a sterling equivalent is
announced, but it is not the company’s intention to change its current
policy of announcing dividends on ordinary shares in US dollars.
The following table shows dividends announced and paid by the
company per ADS for each of the past five years. In the case of
dividends paid before 1 May 2004, the dividends shown are before the
deemed credit allowed to shareholders resident in the US under the
former income tax convention between the US and the UK and the
associated withholding tax in respect thereof equal to the amount of
such credit. (This deemed credit and associated withholding tax do not
apply to dividends paid after 30 April 2004 to shareholders resident in
the US.)
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March June September December Total
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Dividends per American depositary share
2003 UK pence 22.9 23.7 24.2 23.1 93.9
US cents 37.5 37.5 39.0 39.0 153.0
Canadian cents 57.4 54.3 54.0 51.1 216.8
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2004 UK pence 22.0 22.8 23.2 23.5 91.5
US cents 40.5 40.5 42.6 42.6 166.2
Canadian cents 53.7 54.8 56.7 52.2 217.4
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2005 UK pence 27.1 26.7 30.7 30.4 114.9
US cents 51.0 51.0 53.55 53.55 209.1
Canadian cents 64.0 63.2 65.3 63.7 256.2
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2006 UK pence 31.7 31.5 31.9 31.4 126.5
US cents 56.25 56.25 58.95 58.95 230.40
Canadian cents 64.5 64.1 67.4 66.5 262.5
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2007 UK pence 31.5 30.9 31.7 31.8 125.9
US cents 61.95 61.95 64.95 64.95 253.8
Canadian cents 73.3 69.5 67.80 63.60 274.2
A dividend reinvestment plan is in place whereby holders of BP ordinary shares can elect to reinvest the net cash dividend in shares purchased on the
London Stock Exchange. This plan is not available to any person resident in the US or Canada or in any jurisdiction outside the UK where such an offer
requires compliance by the company with any governmental or regulatory procedures or any similar formalities. A dividend reinvestment plan is,
however, available for holders of ADSs through JPMorgan Chase Bank.
Future dividends will be dependent on future earnings, the financial condition of the group, the Risk factors set out on pages 9-10 and other matters
that may affect the business of the group set out in Financial and operating performance on page 46.
Legal proceedings
Save as disclosed in the following paragraphs, no member of the group is
a party to, and no property of a member of the group is subject to, any
pending legal proceedings that are significant to the group.
On 28 June 2006, the US Commodity Futures Trading Commission
(CFTC) filed a civil enforcement action in the US District Court for the
Northern District of Illinois against BP Products North America Inc. (BP
Products), a wholly owned subsidiary of BP, alleging that BP Products
manipulated the price of February 2004 TET physical propane. The CFTC
also charged BP Products with attempting to manipulate the price of
February 2004 and April 2003 TET physical propane. On 28 June 2006,
the US Department of Justice (DOJ) filed a criminal charge against a
former BP Products propane trader, who entered a guilty plea, and on
8 November 2007, four additional former BP Products traders were
indicted on charges of conspiracy and market corner and commodity
price manipulation. Private class action complaints have also been filed
against BP Products that have been consolidated in the US District Court
for the Northern District of Illinois. The complaints contain allegations
similar to those in the CFTC action as well as of violations of federal and
state antitrust and unfair competition laws and state consumer protection
statutes and unjust enrichment. The complaints seek actual and punitive
damages and injunctive relief.
On 25 October 2007, BP America Inc. (BP America) entered into a
deferred prosecution agreement (DPA) with the DOJ relating to
allegations that BP America manipulated the price of February 2004 TET
physical propane and attempted to manipulate the price of TET propane
in April 2003. The DPA requires BP America’s and certain of its affiliates’
continued co-operation with the US government investigations of the
trades in question, as well as other trading matters that may arise.
Pursuant to the DPA, an independent monitor has been appointed to
oversee compliance with the DPA. The independent monitor has
authority to investigate and report alleged violations of the US
Commodity Exchange Act or CFTC regulations and to recommend
corrective action. The DPA has a term of three years and contemplates
dismissal of all charges at the end of the term following the DOJ’s
determination that BP America has complied with the terms of the DPA.
BP America understands that its entry into the DPA concludes the
pending criminal investigations of it and its affiliates relating to trading in
various commodities, including propane, unleaded gasoline and crude oil.
On 25 October 2007, BP Products also entered a companion consent
order with the CFTC resolving all civil enforcement matters concerning
BP Products’ propane trading. The remit of the independent monitor
includes overseeing compliance with the Consent Order. BP Products
understands that with its entry into the Consent Order, the CFTC closed
its investigation of trading in unleaded gasoline without the filing of any
charges against BP Products. In connection with the DPA and the
Consent Order, BP America and BP Products agreed to pay fines,
penalties and restitution totaling just over $303.5 million, including
$53.5 million to a victim restitution fund, a criminal penalty of $100
million, a civil penalty of $125 million and a $25 million payment to the
US Postal Inspection Service Consumer Fraud Fund. Investigations into
BP’s trading activities continue to be conducted from time to time.
On 23 March 2005, an explosion and fire occurred in the isomerization
unit of BP Products’ Texas City refinery as the unit was coming out of
planned maintenance. Fifteen workers died in the incident and many
others were injured. BP Products has reached more than 2,000
settlements in respect of all the fatalities and many of the personal injury
claims arising from the incident and has set aside $2,125 million, in
aggregate, for the purpose. A number of claims remain to be resolved.
The US Occupational Safety and Health Administration (OSHA), the US
Chemical Safety and Hazard Investigation Board (CSB), the US
Environmental Protection Agency (EPA), the Texas Commission on
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