BP PLC (BP) | Analysis of Investments

Investment Accounting Policy

Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are not classified as loans and receivables. After initial recognition, available-for-sale financial assets are measured at fair value, with gains or losses recognized within other comprehensive income. Accumulated changes in fair value are recorded as a separate component of equity until the investment is derecognized or impaired.

The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date. Where there is no active market, fair value is determined using valuation techniques. Where fair value cannot be reliably measured, assets are carried at cost.

Financial assets at fair value through profit or loss

Derivatives, other than those designated as effective hedging instruments, are classified as held for trading and are included in this category. These assets are carried on the balance sheet at fair value with gains or losses recognized in the income statement.

Source: BP PLC, Annual Report

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

BP PLC, adjustment to Profit (loss) For The Year Attributable To BP Shareholders

	12 months ended	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007	Dec 31, 2006
	Profit (loss) for the year attributable to BP shareholders (as reported)
	Add: Available-for-sale investments marked to market
	Less: Available-for-sale investments, recycled to the income statement
	Profit (loss) for the year attributable to BP shareholders (adjusted)

Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)

BP PLC, adjusted ratios

		Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007	Dec 31, 2006
	Net Profit Margin
	Reported net profit margin	%	%	%	%	%
	Adjusted net profit margin	%	%	%	%	%
	Return on Equity (ROE)
	Reported ROE	%	%	%	%	%
	Adjusted ROE	%	%	%	%	%
	Return on Assets (ROA)
	Reported ROA	%	%	%	%	%
	Adjusted ROA	%	%	%	%	%

Adjusted Net Profit Margin

		Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007	Dec 31, 2006
	As Reported
	Profit (loss) for the year attributable to BP shareholders (USD $ in millions)
	Sales and other operating revenues (USD $ in millions)
	Net profit margin1	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted profit (loss) for the year attributable to BP shareholders (USD $ in millions)
	Sales and other operating revenues (USD $ in millions)
	Adjusted net profit margin2	%	%	%	%	%

2010 Calculations

Adjusted Return On Equity (ROE)

		Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007	Dec 31, 2006
	As Reported
	Profit (loss) for the year attributable to BP shareholders (USD $ in millions)
	BP shareholders’ equity (USD $ in millions)
	ROE1	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted profit (loss) for the year attributable to BP shareholders (USD $ in millions)
	BP shareholders’ equity (USD $ in millions)
	Adjusted ROE2	%	%	%	%	%

2010 Calculations

Adjusted Return On Assets (ROA)

		Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007	Dec 31, 2006
	As Reported
	Profit (loss) for the year attributable to BP shareholders (USD $ in millions)
	Total assets (USD $ in millions)
	ROA1	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted profit (loss) for the year attributable to BP shareholders (USD $ in millions)
	Total assets (USD $ in millions)
	Adjusted ROA2	%	%	%	%	%

2010 Calculations