STRS/BP and a puzzle to me..........

From John Curry, June 17, 2010

Tim Myers to John Curry, June 17, 2010
Subject: RE: STRS/BP and a puzzle to me..........

That's a good question. I've asked Steve Mitchell to clarify. I am heading to a meeting at Mohican State Park, but I will get back to you as soon as Steve gets back to me if I have internet at the Park. I remember Steve talking about this at the last meeting, but I did not take complete notes.

Tim

From John Curry, June 17, 2010
Subject: RE: STRS/BP and a puzzle to me..........Tim,

Maybe you can help enlighten retirees on this apparent difference in figures. Cincinnati.com ran an article below re. STRS and BP stock owned by STRS. This article advised that STRS "told" (I think they mean "sold") its 23,000 shares of BP before the end of March (2010)." However, in my copy of the STRS Board Minutes of the April 15 & 16, 2010, page 71(scanned in the attachment) entitled, "Board Report PURCHASE 3/1/2010 through 3/31/2010" shows that STRS "purchased" 193,333 shares of BP Amoco for $1,803747.07! My flatbed scanner wouldn't correctly copy the 193,333 shares purchased figure (after I circled it in pen) but I'm sure you have access to this page 71 in your copy of these minutes. 193,333 shares certainly are a lot more than the 23,000 shares stated in the news article.

In looking through the STRS "Sell" stocks for this same time period I see no evidence of STRS selling any BP stock. This appears to conflict with the Cincinnati article. Can you shed some light on this for retirees as the STRS Board Minutes seem to completely disagree with the Cincinnati article below.

Also, how many shares of BP does STRS currently own as of today?

Thanks,
John

http://news.cincinnati.com/article/20100616/BIZ/6170336/1076/biz/BP-cancels-dividend-to-set-aside-20B-for-spill-costs

BP cancels dividend to set aside $20B for spill costs

June 16, 2010

BP Plc Wednesday canceled three quarterly payments of its $10 billion-a-year dividend after President Barack Obama demanded it put up cash for victims of the Gulf of Mexico spill.

The previously announced first-quarter payment due June 21 will be canceled, the company said in a statement. No dividend will be paid for the second and third quarters, BP said.

BP said it will consider resuming dividend payments in 2011 when it issues results for the fourth quarter of this year and has a better sense of the full impact of the sinking of a rig it operated in the Gulf in late April and the resulting spill.

The move affects BP shareholders around the world.

An estimated 39 percent of the company's shares are held by U.S.-based companies, mutual funds, pension funds or individuals, some of them with ties to Greater Cincinnati and Northern Kentucky. For example, downtown Cincinnati-based Fifth Third Bancorp held about 800,000 shares of BP at the end of March or about 0.03 percent of BP's outstanding shares, according to regulatory filings. US Bancorp held 4.2 million or 0.13 percent of BP's outstanding shares. The Ohio State Teachers Retirement System, however, told its 23,000 shares in BP before the end of March.

Analysts anticipated some action on the dividend and said the agreement between BP and the White House removed a degree of political uncertainty that had been weighing on the stock.

Because of questions about the dividend, BP shares have been especially volatile over the past week. The company has lost about $90 billion in value since the spill in the Gulf nearly two months ago.

"The dividend is off the table," said Alastair Syme, an oil and gas analyst at Nomura Holdings Inc. in London, before the announcement. "Until they have some clarity on the costs of the spill, they can't do anything."

Phil Weiss, an analyst with Argus Research, said the only surprise for him was the rescission of the first quarter payout.

"I think at this point the board recognizes" the political pressure the company was facing because of the dividend, Weiss said.

At the current quarterly dividend rate of 84 cents per American depositary share, BP's dividend rate is an extraordinarily high 10 percent.

Although the tab for the cleanup and damages will run well into the billions, many analysts agreed with the company that it had the ability to continue to pay its dividend as well as the spill.

BP had $5 billion of cash available, $5.25 billion of credit lines it hadn't used and another $5.25 billion of stand- by bank facilities, the company said in an investor conference call June 4. Fitch said Tuesday it expected BP's lenders to allow the company to use the credit lines if needed.

The company generated $27.7 billion in cash flow from operations last year and posted profit of $6 billion in the first quarter.

Bloomberg News and the Associated Press contributed.
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