BP's third-quarter replacement cost (RC) profit was $2,385 million, compared with $3,178 million a year ago. After adjusting for a net charge for non-operating items of $798 million and net favourable fair value accounting effects of $146 million (both on a post-tax basis), underlying RC profit for the third quarter 2014 was $3,037 million, compared with $3,692 million for the same period in 2013. For the nine months, RC profit was $9,042 million, compared with $22,174 million a year ago which included a $12.5-billion gain relating to the disposal of our interest in TNK-BP. After adjusting for a net charge for non-operating items of $1,055 million and net favourable fair value accounting effects of $200 million (both on a post-tax basis), underlying RC profit for the nine months was $9,897 million, compared with $10,619 million for the same period last year. RC profit or loss for the group, underlying RC profit or loss and fair value accounting effects are non-GAAP measures and further information is provided on pages 3 and 29.
All amounts relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net pre-tax charge of $43 million for the quarter and $342 million for the nine months. In its decision on 4 September 2014 in the Trial of Phase 1 of MDL 2179, the federal district court in New Orleans ruled that under the US Clean Water Act, the discharge of oil was the result of the gross negligence and wilful misconduct of BP Exploration & Production Inc. (BPXP) and that BPXP is therefore subject to enhanced civil penalties. BP intends to appeal this ruling. For the reasons described in Note 2, no adjustment has been made to the provision previously recognized for the liability under the Clean Water Act.
As at 30 September 2014, the cumulative charges to be paid from the Deepwater Horizon Oil Spill Trust fund reached $20 billion. Subsequent additional costs, over and above those provided within the $20 billion, will be charged to the income statement as they arise. For further information on the Gulf of Mexico oil spill and its consequences see page 10 and Note 2 on page 16. See also Legal proceedings on page 33.
Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the quarter and nine months was $9.4 billion and $25.5 billion respectively, compared with $6.3 billion and $15.7 billion for the same periods in 2013. Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the third quarter and nine months was $9.4 billion and $25.8 billion respectively, compared with $6.3 billion and $15.9 billion respectively for the same periods in 2013.
Net debt at 30 September 2014 was $22.4 billion, compared with $20.1 billion a year ago. The ratio of net debt to net debt plus equity at 30 September 2014 was 15.0%, compared with 13.3% a year ago. Net debt and the ratio of net debt to net debt plus equity are non-GAAP measures. See page 25 for more information.
Total capital expenditure on an accruals basis for the third quarter was $5.3 billion, almost all of which was organic*. For the nine months, total capital expenditure on an accruals basis was $17.0 billion, of which organic capital expenditure was $16.3 billion. Organic capital expenditure for the full year 2014 is expected to be around $23 billion.
In October 2013, BP announced plans to divest a further $10 billion of assets before the end of 2015, having completed its earlier divestment programme of $38 billion in 2012. BP has agreed around $4.0 billion of such further divestments to date. Disposal proceeds received in cash were $0.6 billion for the quarter and $2.4 billion for the nine months.
BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 19 December 2014. The corresponding amount in sterling will be announced on 8 December 2014. See page 25 for further information.
