The Events launch webcast section provides the audio of the conference call to the financial community and

provides downloads of the related slides as well as the restated earnings data for prior periods. BP announced today that it intends to implement FRS 19, the new UK accounting standard, with effect from the beginning of this year. The measure, which introduces full provisioning for income tax, applies to all UK publicly-quoted companies and will bring UK Generally Accepted Accounting Principles (UK GAAP) more closely in line with the GAAPs of other countries.

BP said the new rules, which will be applied in its first quarter results, due on 30 April, will have no impact on its cash flows or the economic value of its business though it will result in a higher reported income tax provision that more closely reflects the average statutory rate in the countries where the company operates around the world.

Although it will reduce reported headline earnings, the change will not affect the companys dividends or return on capital employed. Nor will it impact the company's growth or volume targets or its financial framework, BP chief financial officer John Buchanan said.

Outlining the impact of FRS 19 on a webcast to the global financial community, Buchanan said: "Although it changes some of our reported results, important measures do not change. Our performance targets, including a 5.5% upstream volume growth and $1.4 billion pre-tax mid-cycle performance improvement for 2002, remain in place.

"Cash flow does not change. Our operations will generate the same amount of cash before and after FRS 19, and we will continue to redeploy this cash based on our financial and operating framework. So sources and uses of cash are unaffected.

"FRS 19 moves the effective tax rate reported in our income statement towards the average statutory rate in the places we operate. In 2001, for example, this would have increased our effective tax rate from 26% to around 35%. However, since the new standard requires full provision of deferred income tax in both the income statement and the balance sheet, income and capital employed are reduced proportionately, so that FRS 19 has a broadly neutral impact on our return on average capital employed. Buchanan said that for the purposes of comparison, BP would retrospectively apply FRS 19 to its earnings for the past five years. On this basis, last year's adjusted replacement cost operating result would remain constant at $19.6 billion and the pro forma replacement cost result would decline by some 12% from $13.2 billion to around $11.6 billion.

"The reduction in our pro forma result is entirely non-cash. Our cash flow statement does not change. Our bottom line cash flow from operating and investing activities, after paying $4.8 billion of dividends, is the same before and after FRS 19.

Buchanan said that BP would adjust its financial framework on an equivalent basis to accommodate FRS 19. "Our pro forma gearing band will be raised by 5% to 25-35%, offsetting the FRS 19 impact on capital employed. Similarly, we are raising our dividend payout target by 10% to around 60% of mid-cycle results to offset the impact of FRS 19.

"Our dividend policy does not change. We will continue to deliver the benefits of underlying performance improvements in dividends to our investors on a basis equivalent to the recent past.