Analysis of Equity Method Investments

Selected Financial Data
Summarized Financial Information
Adjustments to Financial Statements: Proportionate Consolidation
Adjusted Financial Ratios: Proportionate Consolidation (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Assets (ROA)

Selected Financial Data

BP PLC selected financial data

US$ in millions

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Earnings from joint ventures and associates, after interest and tax	3,372)	3,189)	4,419)	6,220)	4,757)
Group share of net assets of joint ventures and associates	18,394)	25,035)	17,148)	26,833)	23,539)
Profitability Ratio
ROA (equity method investments only)¹	18.33%	12.74%	25.77%	23.18%	20.21%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

¹ 2014 Calculation
ROA (equity method investments only) = 100 × Earnings from joint ventures and associates, after interest and tax ÷ Group share of net assets of joint ventures and associates
= 100 × 3,372 ÷ 18,394 = 18.33%

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Item	Description	The company
Earnings from joint ventures and associates, after interest and tax	This item represents the entity proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. Such amount typically reflects adjustments similar to those made in preparing consolidated statements, including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between cost and underlying equity in net assets of the investee at the date of investment.	BP PLC earnings from joint ventures and associates, after interest and tax decreased from 2012 to 2013 but then slightly increased from 2013 to 2014.
Group share of net assets of joint ventures and associates	This item represents the carrying amount on the entity balance sheet of its investment in common stock of an equity method investee. This is not an indicator of the fair value of the investment, rather it is the initial cost adjusted for the entity share of earnings and losses of the investee, adjusted for any distributions (dividends) and other than temporary impairment losses recognized.	BP PLC group share of net assets of joint ventures and associates increased from 2012 to 2013 but then slightly decreased from 2013 to 2014 not reaching 2012 level.
ROA (equity method investments only)	A profitability ratio calculated as earnings from joint ventures and associates, after interest and tax divided by group share of net assets of joint ventures and associates.	BP PLC ROA of equity method investments deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014.

Summarized Financial Information

Summarized financial information for BP PLC affiliates, subsidiaries, associates, and joint ventures

US$ in millions

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Joint ventures	11,586)	11,576)	17,945)	16,495)	12,054)
Associates	22,937)	32,605)	3,270)	20,037)	18,710)
Non-current assets	34,523)	44,181)	21,215)	36,532)	30,764)
Joint ventures	2,853)	3,095)	4,374)	4,613)	3,595)
Associates	9,759)	12,110)	2,399)	6,483)	6,489)
Current assets	12,612)	15,205)	6,773)	11,096)	10,084)
Total assets	47,135)	59,386)	27,988)	47,628)	40,848)
Joint ventures	2,222)	2,276)	3,014)	2,553)	1,615)
Associates	8,803)	10,641)	2,126)	5,235)	5,172)
Current liabilities	11,025)	12,917)	5,140)	7,788)	6,787)
Joint ventures	3,774)	3,499)	4,410)	3,980)	2,701)
Associates	13,811)	17,536)	1,290)	8,160)	7,197)
Non-current liabilities	17,585)	21,035)	5,700)	12,140)	9,898)
Total liabilities	28,610)	33,952)	10,840)	19,928)	16,685)
Joint ventures	8,443)	8,896)	14,895)	14,575)	11,333)
Associates	9,951)	16,139)	2,253)	12,258)	12,206)
Equity	18,394)	25,035)	17,148)	26,833)	23,539)
Associates	131)	399)	—)	867)	624)
Non-controlling interests	131)	399)	—)	867)	624)
Total liabilities and equity	47,135)	59,386)	27,988)	47,628)	40,848)
Joint ventures	12,208)	12,507)	16,237)	15,720)	11,679)
Associates	37,938)	32,233)	36,640)	42,245)	32,354)
Sales and other operating revenues	50,146)	44,740)	52,877)	57,965)	44,033)
Joint ventures	1,210)	1,076)	1,331)	1,918)	1,730)
Associates	4,763)	3,694)	5,311)	6,950)	5,081)
Profit before interest and taxation	5,973)	4,770)	6,642)	8,868)	6,811)
Joint ventures	(125)	(130)	(129)	(134)	(122)
Associates	(1,040)	(275)	(100)	(145)	(150)
Finance costs	(1,165)	(405)	(229)	(279)	(272)
Profit before taxation	4,808)	4,365)	6,413)	8,589)	6,539)
Joint ventures	(515)	(499)	(458)	(480)	(433)
Associates	(907)	(635)	(1,180)	(1,547)	(1,141)
Taxation	(1,422)	(1,134)	(1,638)	(2,027)	(1,574)
Associates	(14)	(42)	(356)	(342)	(208)
Non-controlling interests	(14)	(42)	(356)	(342)	(208)
Profit for the year	3,372)	3,189)	4,419)	6,220)	4,757)

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

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Item	Description	The company
Equity	Amount of equity, excluding noncontrolling interest, attributable to the equity method investment of the entity.	Equity of BP PLC affiliates, subsidiaries, associates, and joint ventures increased from 2012 to 2013 but then slightly decreased from 2013 to 2014 not reaching 2012 level.
Profit for the year	The amount of net income (loss) reported by an equity method investment of the entity.	Profit for the year of BP PLC affiliates, subsidiaries, associates, and joint ventures decreased from 2012 to 2013 but then slightly increased from 2013 to 2014.

Adjustments to Financial Statements: Proportionate Consolidation

Recognition of BP PLC proportionate share of affiliates, subsidiaries, associates, and joint ventures assets and liabilities instead of net equity.

BP PLC, adjustments to financial statements

US$ in millions

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Weighted average percentage interest in affiliates	100.00%	100.00%	100.00%	100.00%	100.00%
Adjustment to Current Assets
Current assets (as reported)	87,262)	96,840)	110,981)	97,584)	96,853)
Add: Current assets of affiliates (adjustment)	12,612)	15,205)	6,773)	11,096)	10,084)
Current assets (adjusted)	99,874)	112,045)	117,754)	108,680)	106,937)
Adjustments to Total Assets
Total assets (as reported)	284,305)	305,690)	300,193)	293,068)	272,262)
Less: Group share of net assets of joint ventures and associates (adjustment)	18,394)	25,035)	17,148)	26,833)	23,539)
Add: Total assets of affiliates (adjustment)	47,135)	59,386)	27,988)	47,628)	40,848)
Total assets (adjusted)	313,046)	340,041)	311,033)	313,863)	289,571)
Adjustment to Current Liabilities
Current liabilities (as reported)	63,615)	72,812)	77,586)	84,318)	83,879)
Add: Current liabilities of affiliates (adjustment)	11,025)	12,917)	5,140)	7,788)	6,787)
Current liabilities (adjusted)	74,640)	85,729)	82,726)	92,106)	90,666)
Adjustment to Total Liabilities
Total liabilities (as reported)	171,663)	175,283)	180,573)	180,586)	176,371)
Add: Total liabilities of affiliates (adjustment)	28,610)	33,952)	10,840)	19,928)	16,685)
Total liabilities (adjusted)	200,273)	209,235)	191,413)	200,514)	193,056)
Adjustment to Non-controlling Interests
Non-controlling interests (as reported)	1,201)	1,105)	1,206)	1,017)	904)
Add: Non-controlling interests of affiliates (adjustment)	131)	399)	—)	867)	624)
Non-controlling interests (adjusted)	1,332)	1,504)	1,206)	1,884)	1,528)
Adjustment to Sales And Other Operating Revenues
Sales and other operating revenues (as reported)	353,568)	379,136)	375,580)	375,517)	297,107)
Add: Sales and other operating revenues of affiliates (adjustment)	50,146)	44,740)	52,877)	57,965)	44,033)
Sales and other operating revenues (adjusted)	403,714)	423,876)	428,457)	433,482)	341,140)

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

BP PLC, Financial Data: Reported vs. Adjusted

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Adjusted Financial Ratios: Proportionate Consolidation (Summary)

BP PLC, adjusted financial ratios

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Current Ratio
Reported current ratio	1.37	1.33	1.43	1.16	1.15
Adjusted current ratio	1.34	1.31	1.42	1.18	1.18
Net Profit Margin
Reported net profit margin	1.07%	6.19%	3.08%	6.84%	-1.25%
Adjusted net profit margin	0.94%	5.53%	2.70%	5.93%	-1.09%
Total Asset Turnover
Reported total asset turnover	1.24	1.24	1.25	1.28	1.09
Adjusted total asset turnover	1.29	1.25	1.38	1.38	1.18
Financial Leverage
Reported financial leverage	2.55	2.36	2.54	2.63	2.87
Adjusted financial leverage	2.81	2.63	2.63	2.82	3.05
Return on Assets (ROA)
Reported ROA	1.33%	7.67%	3.86%	8.77%	-1.37%
Adjusted ROA	1.21%	6.90%	3.72%	8.19%	-1.28%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

Financial ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	BP PLC adjusted current ratio deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014.
Adjusted net profit margin	An indicator of profitability, calculated as net income divided by adjusted revenue.	BP PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
Adjusted total asset turnover	An activity ratio calculated as adjusted total revenue divided by adjusted total assets.	BP PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	BP PLC adjusted financial leverage ratio increased from 2012 to 2013 and from 2013 to 2014.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	BP PLC adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

BP PLC, Financial Ratios: Reported vs. Adjusted

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Adjusted Current Ratio

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions)
Current assets	87,262)	96,840)	110,981)	97,584)	96,853)
Current liabilities	63,615)	72,812)	77,586)	84,318)	83,879)
Liquidity Ratio
Current ratio¹	1.37	1.33	1.43	1.16	1.15
Adjusted: from Equity Method to Proportionate Consolidation
Selected Financial Data (US$ in millions)
Adjusted current assets	99,874)	112,045)	117,754)	108,680)	106,937)
Adjusted current liabilities	74,640)	85,729)	82,726)	92,106)	90,666)
Liquidity Ratio
Adjusted current ratio²	1.34	1.31	1.42	1.18	1.18

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 87,262 ÷ 63,615 = 1.37

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 99,874 ÷ 74,640 = 1.34

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Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	BP PLC adjusted current ratio deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014.

Adjusted Net Profit Margin

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions)
Profit (loss) for the year attributable to BP shareholders	3,780)	23,451)	11,582)	25,700)	(3,719)
Sales and other operating revenues	353,568)	379,136)	375,580)	375,517)	297,107)
Profitability Ratio
Net profit margin¹	1.07%	6.19%	3.08%	6.84%	-1.25%
Adjusted: from Equity Method to Proportionate Consolidation
Selected Financial Data (US$ in millions)
Profit (loss) for the year attributable to BP shareholders	3,780)	23,451)	11,582)	25,700)	(3,719)
Adjusted sales and other operating revenues	403,714)	423,876)	428,457)	433,482)	341,140)
Profitability Ratio
Adjusted net profit margin²	0.94%	5.53%	2.70%	5.93%	-1.09%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

¹ Net profit margin = 100 × Profit (loss) for the year attributable to BP shareholders ÷ Sales and other operating revenues
= 100 × 3,780 ÷ 353,568 = 1.07%

² Adjusted net profit margin = 100 × Profit (loss) for the year attributable to BP shareholders ÷ Adjusted sales and other operating revenues
= 100 × 3,780 ÷ 403,714 = 0.94%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as net income divided by adjusted revenue.	BP PLC adjusted net profit margin ratio improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

Adjusted Total Asset Turnover

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions)
Sales and other operating revenues	353,568)	379,136)	375,580)	375,517)	297,107)
Total assets	284,305)	305,690)	300,193)	293,068)	272,262)
Activity Ratio
Total asset turnover¹	1.24	1.24	1.25	1.28	1.09
Adjusted: from Equity Method to Proportionate Consolidation
Selected Financial Data (US$ in millions)
Adjusted sales and other operating revenues	403,714)	423,876)	428,457)	433,482)	341,140)
Adjusted total assets	313,046)	340,041)	311,033)	313,863)	289,571)
Activity Ratio
Adjusted total asset turnover²	1.29	1.25	1.38	1.38	1.18

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

¹ Total asset turnover = Sales and other operating revenues ÷ Total assets
= 353,568 ÷ 284,305 = 1.24

² Adjusted total asset turnover = Adjusted sales and other operating revenues ÷ Adjusted total assets
= 403,714 ÷ 313,046 = 1.29

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as adjusted total revenue divided by adjusted total assets.	BP PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014.

Adjusted Financial Leverage

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions)
Total assets	284,305)	305,690)	300,193)	293,068)	272,262)
Total BP shareholders’ equity	111,441)	129,302)	118,414)	111,465)	94,987)
Solvency Ratio
Financial leverage¹	2.55	2.36	2.54	2.63	2.87
Adjusted: from Equity Method to Proportionate Consolidation
Selected Financial Data (US$ in millions)
Adjusted total assets	313,046)	340,041)	311,033)	313,863)	289,571)
Total BP shareholders’ equity	111,441)	129,302)	118,414)	111,465)	94,987)
Solvency Ratio
Adjusted financial leverage²	2.81	2.63	2.63	2.82	3.05

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

¹ Financial leverage = Total assets ÷ Total BP shareholders’ equity
= 284,305 ÷ 111,441 = 2.55

² Adjusted financial leverage = Adjusted total assets ÷ Total BP shareholders’ equity
= 313,046 ÷ 111,441 = 2.81

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	BP PLC adjusted financial leverage ratio increased from 2012 to 2013 and from 2013 to 2014.

Adjusted Return on Assets (ROA)

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
As Reported
Selected Financial Data (US$ in millions)
Profit (loss) for the year attributable to BP shareholders	3,780)	23,451)	11,582)	25,700)	(3,719)
Total assets	284,305)	305,690)	300,193)	293,068)	272,262)
Profitability Ratio
ROA¹	1.33%	7.67%	3.86%	8.77%	-1.37%
Adjusted: from Equity Method to Proportionate Consolidation
Selected Financial Data (US$ in millions)
Profit (loss) for the year attributable to BP shareholders	3,780)	23,451)	11,582)	25,700)	(3,719)
Adjusted total assets	313,046)	340,041)	311,033)	313,863)	289,571)
Profitability Ratio
Adjusted ROA²	1.21%	6.90%	3.72%	8.19%	-1.28%

Based on: 20-F (reporting date: 2014-12-31), 20-F (reporting date: 2013-12-31), 20-F (reporting date: 2012-12-31), 20-F (reporting date: 2011-12-31), 20-F (reporting date: 2010-12-31).

2014 Calculations

¹ ROA = 100 × Profit (loss) for the year attributable to BP shareholders ÷ Total assets
= 100 × 3,780 ÷ 284,305 = 1.33%

² Adjusted ROA = 100 × Profit (loss) for the year attributable to BP shareholders ÷ Adjusted total assets
= 100 × 3,780 ÷ 313,046 = 1.21%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	BP PLC adjusted ROA improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

BP PLC (NYSE:BP)

Analysis of Equity Method Investments

Selected Financial Data

Summarized Financial Information

Adjustments to Financial Statements: Proportionate Consolidation

BP PLC, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Proportionate Consolidation (Summary)

BP PLC, Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Assets (ROA)