BP PLC

Adjusting items are items that bp discloses separately because it considers such disclosures to be meaningful and relevant to investors. They are items that management considers to be important to period-on-period analysis of the group's results and are disclosed in order to enable investors to better understand and evaluate the group’s reported financial performance. An analysis of adjusting items is shown in the table below.

a See Financial statements – Note 4 for further information.

b Restructuring charges are classified as adjusting items where they relate to an announced major group restructuring. A major group restructuring is a restructuring programme affecting more than one of the group’s operating segments that is expected to result in charges of more than $1 billion over a defined period. 2022 includes release of provisions for the reinvent bp restructuring costs. 2021 includes recognized provisions for the reinvent bp restructuring costs that were formalized in 2020.

c Under IFRS bp marks-to-market the value of the hedges used to risk-manage LNG contracts, but not the contracts themselves, resulting in a mismatch in accounting treatment. The fair value accounting effect includes the change in value of LNG contracts that are being risk managed, and the underlying result reflects how bp risk-manages its LNG contracts.

d For further information, including the nature of fair value accounting effects reported in each segment, see page 377.

e 2023 includes $1,140 million of impairment charges recognized through equity-accounted earnings relating to our US offshore wind projects.

f 2022 includes a provision reversal relating to the change in discount rate on retained decommissioning provisions. 2021 includes adjustments relating to the change in discount rate on retained decommissioning provisions and the recognition of a decommissioning provision in relation to certain assets previously sold to a third party where the decommissioning obligation transferred may revert to bp due to the financial condition of the current owner.

g 2021 includes a $415 million charge relating to a remeasurement of deferred tax balances in our equity-accounted entity in Argentina following income tax rate changes partially offset by impairment reversals in equity-accounted entities.

h 2021 includes amounts arising in relation to the amendment of the timing of recognition of certain customer incentives in our customers business.

i 2023 primarily relates to charges related to the control, abatement, clean-up or elimination of environmental pollution and legal settlements. 2022 and 2021 primarily reflect charges due to the annual update of environmental provisions, including asbestos-related provisions for past operations, together with updates of non-Gulf of Mexico oil spill related legal provisions.

j For more information see Financial statements – Note 1 Significant accounting policies, judgements, estimates and assumptions – Investment in Rosneft and Note 17 – Investments in associates.

k Includes the unwinding of discounting effects relating to Gulf of Mexico oil spill payables, the income statement impact associated with the buyback of finance debt (see Financial statements – Note 26 for further information) and temporary valuation differences associated with the group's interest rate and foreign currency exchange risk management of finance debt.

l Includes certain foreign exchange effects on tax as adjusting items. These amounts represent the impact of: (i) foreign exchange on deferred tax balances arising from the conversion of local currency tax base amounts into functional currency; and (ii) taxable gains and losses from the retranslation of US dollar-denominated intra-group loans to local currency.

m 2023 includes a revision to the deferred tax impact of the introduction of the UK Energy Profits Levy (EPL) on temporary differences existing at 31 December 2022 that are expected to unwind over the period 1 January 2023 to 31 March 2028. 2022 includes the deferred tax impact of the introduction of the EPL. The EPL increases the headline rate of tax to 75% and applies to taxable profits from bp’s North Sea business made from 1 January 2023 until 31 March 2028. On 6 March 2024 the UK government announced an extension of the EPL to 31 March 2029. This has not yet been substantively enacted.

n 2023 and 2022 include a $146-million charge and a $505-million charge respectively for the EU Solidarity Contribution.