BP 2011 Annual Report Download - page 54

52 BP Annual Report and Form 20-F 2011
Replacement cost profit (loss) reflects
the replacement cost of supplies. It is
arrived at by excluding from profit
inventory holding gains and losses and
their associated tax effect. Replacement
cost profit for the group is the profitability
measure used by management. It is a
non-GAAP measure. See page 56 for
the equivalent measure on an IFRS basis.
In 2011, we returned to profitability
following the financial impact of the
Deepwater Horizon oil spill in 2010.
95.85
136.20
74.49
(26.17)
126.41
0
80
60
Replacement cost profit (loss)
per ordinary share (cents)
160
120
2007 2008 2009 2010 2011
Gearing enables investors to see how
significant net debt is relative to equity
from shareholders. Net debt is equal to
gross finance debt, plus associated
derivatives, less cash and cash
equivalents. Net debt and net debt ratio
are non-GAAP measures. See Financial
statements – Note 35 on page 230 for the
nearest equivalent measure on an IFRS
basis and for further information.
In 2011, gearing decreased slightly
and we expect it to reduce to the lower
half of the 10-20% range over time.
22.1
21.4
20.4
21.2
20.5
10
30
20
Gearing (net debt ratio)
(%)
2007 2008 2009 2010 2011
Total shareholder return represents the
change in value of a BP shareholding
over a calendar year, assuming that
dividends are re-invested to purchase
additional shares at the closing price
applicable on the ex-dividend date.
In 2011, shareholder return improved
with the resumption of dividends.
14.1
(34.6)
(15.1)
6.8
33.0
27.6
(24.1)
(21.4)
2.5
3.0
-20
60
40
20
0
Total shareholder return
(%)
ADS basis
Ordinary share basis
2007 2008 2009 2010 2011
We report crude oil, natural gas liquids
(NGLs) and natural gas produced from
subsidiaries and equity-accounted
entities. These are converted to barrels
of oil equivalent (boe) at 1 barrel of
NGL = 1boe and 5,800 standard cubic
feet of natural gas = 1boe.
Reported production in 2011 was
10% lower than in 2010, due to higher
turnaround and maintenance activity,
and the impact of the drilling
moratorium in the Gulf of Mexico.
3,818
3,838
3,998
3,822
3,454
3,250
3,750
3,500
Production
(mboe/d)
4,250
4,000
2007 2008 2009 2010 2011
Proved reserves replacement ratio (also
known as the production replacement
ratio) is the extent to which production
is replaced by proved reserves additions.
The ratio is expressed in oil equivalent
terms and includes changes resulting
from revisions to previous estimates,
improved recovery and extensions,
and discoveries. The measure reflects
both subsidiaries and equity-accounted
entities, but excludes acquisitions
and disposals.
The 2011 reserves additions for
TNK-BP include the effect of moving
from life-of-licence measurement to
life-of-field measurement, reflecting
TNK-BP’s track record of successful
licence renewal. Excluding this effect,
BP’s 2011 reserves replacement ratio
would have been 83%.
112
121
129
106
103
30
90
60
Reserves replacement ratio
(%)
150
120
2007 2008 2009 2010 2011
Refining availability represents Solomon
Associates’ operational availability,
which is defined as the percentage
of the year that a unit is available for
processing after subtracting the
annualized time lost due to turnaround
activity and all planned mechanical,
process and regulatory maintenance
downtime.
Refining availability decreased slightly
in 2011 principally due to the second
quarter weather-related power outage
at Texas City.
82.9
88.8
93.6
95.0
94.8
80
90
85
Refining availability
(%)
100
95
2007 2008 2009 2010 2011
Operating cash flow is net cash flow
provided by operating activities, from
the group cash flow statement.
Operating activities are the principal
revenue-generating activities of the
group and other activities that are not
investing or financing activities.
In 2011, operating cash flow
recovered, primarily due to a reduction
in cash outflow in respect of the
Deepwater Horizon oil spill.
24.7
38.1
27.7
13.6
22.2
10
30
20
Operating cash flow
($ billion)
50
40
2007 2008 2009 2010 2011
Our performance
We track performance against key financial
and non-financial indicators. This year, in
alignment with our 10-point strategic plan,
we have introduced gearing as a key measure.