BP's second-quarter replacement cost (RC) loss was $6,266 million, compared with a profit of $3,182 million a year ago. After adjusting for a net charge for non-operating items of $7,486 million, mainly relating to the recently announced agreements in principle to settle federal, state and the vast majority of local government claims arising from the 2010 Deepwater Horizon accident, and net unfavourable fair value accounting effects of $93 million (both on a post-tax basis), underlying RC profit for the second quarter was $1,313 million, compared with $3,635 million for the same period in 2014. For the half year, RC loss was $4,163 million, compared with a profit of $6,657 million a year ago. After adjusting for a net charge for non-operating items of $7,899 million and net unfavourable fair value accounting effects of $154 million (both on a post-tax basis), underlying RC profit for the half year was $3,890 million, compared with $6,860 million for the same period in 2014. Non-operating items include a restructuring charge of $272 million for the quarter and $487 million for the half year. Restructuring charges are now expected to be around $1.5 billion by the end of 2015 relative to the $1 billion we announced back in December. 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 30.
On 2 July 2015, BP announced that it has reached agreements in principle to settle all outstanding federal and state claims and claims made by more than 400 local government entities arising from the 2010 Deepwater Horizon oil spill. BP has accepted releases received from the vast majority of local government entities and the District Court has ordered BP to commence processing payments under the releases.
The group income statement for the second quarter reflects a pre-tax charge of $9.8 billion related to the agreements in principle. All amounts relating to the Gulf of Mexico oil spill have been treated as non-operating items, with a net pre-tax charge of $10,755 million for the second quarter and $11,087 million for the half year ($7,154 million and $7,374 million respectively on a post-tax basis). For further information on the Gulf of Mexico oil spill and its consequences see page 10 and Note 2 on page 18. See also Principal risks and uncertainties on page 34 and Legal proceedings on page 35.
Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was $6.3 billion and $8.1 billion respectively, compared with $7.9 billion and $16.1 billion for the same periods in 2014. Excluding amounts related to the Gulf of Mexico oil spill, net cash provided by operating activities for the second quarter and half year was $6.4 billion and $8.9 billion respectively, compared with $7.6 billion and $16.5 billion for the same periods in 2014.
Net debt at 30 June 2015 was $24.8 billion, compared with $24.4 billion a year ago. The net debt ratio at 30 June 2015 was 18.8%, compared with 15.5% a year ago. Net debt and the net debt ratio are non-GAAP measures. See page 26 for more information.
Total capital expenditure on an accruals basis for the second quarter was $4.7 billion, of which organic capital expenditure was $4.5 billion, compared with $5.6 billion for the same period in 2014, almost all of which was organic. For the half year, total capital expenditure on an accruals basis was $9.1 billion, of which organic capital expenditure was $8.9 billion, compared with $11.7 billion for the same period in 2014, of which organic capital expenditure was $11.0 billion. For full year 2015, we now expect organic capital expenditure to be below $20 billion.
BP today announced a quarterly dividend of 10.00 cents per ordinary share ($0.600 per ADS), which is expected to be paid on 18 September 2015. The corresponding amount in sterling will be announced on 8 September 2015. See page 25 for further information.
