SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the period ended June 30, 1999
BP AMOCO p.l.c.
(Translation of registrant's name into English)
BRITANNIC HOUSE, 1 FINSBURY CIRCUS, LONDON,
EC2M 7BA, ENGLAND (Address of
principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F
... ...
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes No |X|
... ...
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE
PROXY STATEMENT/PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-4
(FILE NO. 333-10588) OF BP AMOCO p.l.c., THE PROSPECTUS INCLUDED IN THE
REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-9790) OF BP AMOCO p.l.c., THE
PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3 (FILE NO.
33-39075) OF BP AMERICA INC. AND BP AMOCO p.l.c., THE PROSPECTUS INCLUDED IN THE
REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 33-20338) OF BP AMERICA INC. AND BP
AMOCO p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM F-3
(FILE NO. 33-29102) OF THE STANDARD OIL COMPANY AND BP AMOCO p.l.c., THE
PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.
33-21868) OF BP AMOCO p.l.c., THE PROSPECTUS INCLUDED IN THE REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-9020) OF BP AMOCO p.l.c., THE PROSPECTUS
INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-9798) OF BP
AMOCO p.l.c., AND THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM
S-8 (FILE NO. 333-79399) OF BP AMOCO p.l.c., AND TO BE A PART THEREOF FROM THE
DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY
DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GROUP RESULTS JANUARY - JUNE 1999
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
1998 1999 1999 1998
<S> <C> <C> <C> <C> <C>
1,932 2,075 Total replacement cost operating profit - $m 3,321 3,931
Replacement cost profit before
1,079 1,226 exceptional items - $m 1,903 2,358
1,091 1,063 Replacement cost profit for the period - $m 880 2,420
992 1,635 Historical cost profit for the period - $m 1,459 1,632
10 17 Profit per Ordinary Share - cents 15 17
10 10 Dividends per Ordinary Share - cents 20 19.5
</TABLE>
For further information on replacement cost profit see Note 6 of Notes to
Consolidated Financial Statements
The following discussion should be read in conjunction with the consolidated
financial statements provided elsewhere in this Form 6-K and with the
consolidated financial statements and related notes for the year ended December
31, 1998 included in BP Amoco's Report on Form 6-K filed with the Securities and
Exchange Commission on July 7, 1999. The restated financial statements of BP
Amoco included in BP Amoco's Report on Form 6-K filed on July 7, 1999 modify and
supersede the financial statements included in BP Amoco's Annual Report on Form
20-F for the year ended December 31, 1998. The financial statements included in
such Form 6-K have been restated to reflect the adoption of FRS No. 12,
effective as of January 1, 1999, and also to correct reserve information.
Effective January 1, 1999, the Group adopted UK Financial Reporting Standard No.
12 `Provisions, Contingent Liabilities and Contingent Assets (FRS12)'. As a
result of adopting this standard comparative figures have been restated. The
effect of adopting the standard is shown in Note 2 of Notes to Consolidated
Financial Statements.
Replacement cost profit before exceptional items (which excludes inventory
holding gains and losses) was $1,226 million for the three months ended June 30,
1999, compared with $1,079 million for the equivalent period of 1998. These
results included net special charges of $197 million ($141 million after tax)
for the three months ended June 30, 1999, and $158 million ($68 million after
tax) for the equivalent period of 1998. The special charges in the second
quarter of 1999 were mainly in respect of merger integration costs; those of
1998 related to impairment charges offset by a receipt from the settlement of an
insurance claim. After excluding these special charges, the profit of $1,367
million for the three months ended June 30, 1999 represented an increase of 19%
over the comparable result of 1998. This increase reflected further benefits
from merger integration and from underlying performance improvements, and was
achieved despite adverse conditions in the economic environment. Compared with
the second quarter of 1998, performance improvements contributed around $550
million, more than offsetting the adverse effect of the economic environment
estimated at $350 million.
For the six months ended June 30, 1999, the replacement cost profit before
exceptional items was $1,903 million compared with $2,358 million for the
equivalent period of 1998. The result for the six months ended June 30, 1999
included net special charges of $311 million ($225 million after tax) compared
with $158 million ($68 million after tax) for the same period in 1998. The
special charges in 1999 related mainly to merger integration costs while those
of 1998 were in respect of impairment charges offset by income from an insurance
claim. After adjusting to exclude these special items, the result for the first
half of 1999 was $2,128 million compared with $2,426 million in 1998. The
reduction in profit compared with the same period of the previous year was
limited to some $300 million in spite of an adverse effect due to the economic
environment estimated at $1.2 billion. This result reflects substantial cost
reductions and higher volumes in all businesses.
The historical cost profit for the three months ended June 30, 1999 was $1,635
million including inventory holding gains of $572 million. For the equivalent
period of 1998 there was a profit of $992 million after inventory holding losses
of $99 million. The results for the second quarter of 1999 included net
exceptional charges of $186 million ($163 million after tax) in respect of
restructuring costs and net profits on the sale of fixed assets and businesses;
those for the comparable period of 1998 included net exceptional profits of $12
million ($12 million after tax).
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
For the six months ended June 30, 1999 the historical cost profit was $1,459
million including inventory holding gains of $579 million. This compares with a
profit of $1,632 million after inventory holding losses of $788 million for the
equivalent period of 1998. Included in the results for the first six months of
1999 were net exceptional charges of $1,244 million ($1,023 million after tax)
for restructuring costs and net profits on the sale of fixed assets and
businesses. The results for the equivalent period of 1998 included net profits
on the sale of fixed assets and businesses of $78 million ($62 million after
tax).
Taxation, other than production taxes, charged for the three months ended June
30, 1999 was $473 million compared with $553 million in the equivalent period
last year. This included a tax credit of $23 million in respect of exceptional
items compared with $ nil for the second quarter of 1998. The effective tax rate
on replacement cost profit before exceptional items was 28% for the three months
and the six months ended June 30, 1999.
Net cash outflow for the three months ended June 30 1999 was $1.2 billion,
compared with $0.3 billion for the equivalent period of 1998. The cash flow for
the second quarter of 1999 included two dividend payments. The second of these
was a non-recurring payment arising from the rescheduling of dividend payment
dates following the merger of BP and Amoco. Cash flow for the three months ended
June 30, 1999 was positive before the second dividend payment and restructuring
costs. For the first half of 1999, net cash outflow was $2.4 billion.
Capital expenditure for the first six months of 1999 amounted to $3.3 billion, a
decrease of 34% on the first six months of the previous year, reflecting
increased focus in the capital program. Divestment proceeds from the sale of
fixed assets and businesses amounted to $531 million for the half year.
Net debt at the quarter-end was $15.1 billion. The ratio of net debt to net debt
plus equity was 26%. Interest expense for the three months ended June 30, 1999
was $328 million compared with $289 million in the equivalent period of 1998.
The increase in interest expense resulted mainly from lower levels of
capitalized interest.
BP Amoco p.l.c. announced a second quarterly dividend for 1999 of 10 cents per
Ordinary Share. Holders of Ordinary Shares will receive 6.225 pence per share
and holders of American Depositary Receipts (ADRs) $0.60 per ADS share. The
dividend is payable on September 10, 1999 to shareholders on the register on
August 20, 1999. Participants in the Dividend Reinvestment Plan or the dividend
reinvestment facility in the US Direct Access Plan will receive the dividend in
the form of shares on September 10, 1999.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
DETAILED REVIEW OF BUSINESSES (EXCLUDING EXCEPTIONAL ITEMS)
EXPLORATION AND PRODUCTION
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
1998 1999 1999 1998
<S> <C> <C> <C> <C> <C>
836 1,503 Total replacement cost operating profit - $m 2,321 2,057
Results included:
221 124 Exploration expense - $m 296 441
Key statistics:
12.13 14.49 Average prices : Crude oil and natural- $/bbl 12.45 12.89
realized by BP Amoco gas liquids
1.94 1.82 : Natural gas - $/mcf 1.81 2.0
2,026 2,049 Oil production (net of royalties) - mb/d 2,073 2,026
5,775 5,944 Natural gas production (net of royalties) - mmcf/d 6,007 5,951
3,022 3,074 Total production (net of royalties) (a) - mboe/d 3,109 3,052
</TABLE>
- ----------------
(a) Expressed in thousands of barrels of oil equivalent per day (mboe/d).
Gas is converted to oil equivalent at 5.8 billion cubic feet :
1 million barrels.
(b) Further operating information is shown on page 16.
Exploration and Production's replacement cost operating profit for the three
months ended June 30, 1999 was $1,531 million, after adjusting for special
charges of $28 million. This adjusted result was up 54% on the equivalent
quarter last year, reflecting lower costs, stronger oil prices and increased
production. The special charges for the three months ended June 30, 1999 related
to merger integration costs; the net special charges of $158 million for the
equivalent period of 1998 consisted of charges for the impairment of the Opon
field and adjacent power plant in Colombia offset by a receipt for the
settlement of an insurance claim.
Overall production for the quarter was up 2% on the second quarter of 1998.
There has been a significant contribution from the Eastern Trough Area Project
in the UK central North Sea which was commissioned in July last year. The
increase more than offset the declines at the mature fields in Alaska.
The profit for the six months ended June 30, 1999 was $2,435 million,
after adjusting for special charges of $114 million. The equivalent result
for 1998 was $2,215 million after adjusting for net special charges of
$158 million. The increase in profit compared with the first half of 1998
reflected lower costs and increased production which were partially offset
by the depressed prices of the earlier part of 1999. The special charges for
the six months ended June 30, 1999 related mainly to merger integration costs;
the net special charges for the equivalent period of 1998 comprised
impairment charges offset by an insurance claim receipt.
In May, BP Amoco (26.7% interest and operator) signed a Production Sharing
Agreement with the Angolan state oil company Sonangol, for Block 31 in Angola's
deep water acreage, with exploration activities commencing shortly. This adds to
the Group's interests in five other blocks offshore Angola. Further, it was
announced that BP Amoco (50% interest and operator) had a significant oil
discovery on its second exploration well on Block 18. Further geological and
engineering studies will be carried out to fully evaluate this and an earlier
discovery on the same block.
In July, four major discoveries, in which BP Amoco is the operator, were
announced in the Gulf of Mexico. The largest is the Crazy Horse prospect
(BP Amoco 75%). The others are Atlantis (BP Amoco 56%), Mad Dog (BP Amoco
63.6%) and Holstein (BP Amoco 50%).
Also in July, we announced a significant gas condensate discovery in Azerbaijan
following the completion of the SDX1 well on the offshore prospect Shah Deniz in
the Caspian Sea (BP Amoco 25.5% interest and operator).
In early August, BP Amoco agreed the sale of its Canadian oil assets for $1.07
billion. The estimated after-tax gain resulting from this sale amounts to $200
million. The sale does not include the Group's Canadian natural gas assets; BP
Amoco remains Canada's biggest producer of natural gas.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
REFINING AND MARKETING
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
1998 1999 1999 1998
<S> <C> <C> <C> <C> <C>
839 560 Total replacement cost operating profit - $m 906 1,378
2.35 0.83 Indicative global refining margin* - $/bbl 0.83 2.28
2,805 2,583 Refinery throughputs - mb/d 2,539 2,786
3,101 3,184 Marketing sales - mb/d 3,163 3,067
</TABLE>
- ----------------
* BP Amoco average.
(a) Further operating information is shown on page 16.
Replacement cost operating profit of $593 million for the three months ended
June 30, 1999, after adjusting for special charges of $33 million related to
merger integration costs, was down 29% on a year ago. This reflected the severe
deterioration in refining margins and pressure on marketing margins, partially
offset by significant cost savings and improved marketing volumes.
The result for the six months ended June 30, 1999 was $956 million, after
adjusting for special charges of $50 million in respect of merger integration
costs and also represented a decrease compared with the equivalent result of
$1,378 million in 1998. Performance improvements partly offset the effect
of the severe deterioration in the refining environment.
There were no special charges in the three months or the six months ended June
30, 1998.
During the three months ended June 30, 1999 the sale of most of the 134 sites
mandated by the US Federal Trade Commission during the merger approval process
was completed. Additionally, a program of refinery sales was announced in July,
with the Alliance refinery in Louisiana to be marketed immediately.
Growth has continued in markets new to BP Amoco with some 30 new retail sites
brought into operation in Venezuela, Poland and Japan during the first
half of the year.
In the BP/Mobil joint venture's LPG business unit, portfolio adjustments
continued during the second quarter with the sale of its business
in Hungary and the acquisition of VanderVel NV, Belgium, a bottle and bulk
distributor.
In April, we completed a $245 million upgrade to our Toledo, Ohio,
refinery by commissioning the coker unit. The upgrade allows the refinery to
process 70% of its throughput as lower cost, heavy sour crudes.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
CHEMICALS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
1998 1999 1999 1998
<S> <C> <C> <C> <C> <C>
323 198 Total replacement cost operating profit - $m 404 669
825 392 Chemicals integrated margin - Dm/te 485 954
5,088 5,515 Production volumes - kte 10,658 9,905
</TABLE>
Chemicals' replacement cost operating profit for the three months ended June 30,
1999 was $257 million, after adjusting for $59 million of special costs related
to litigation settlement and integration. Although there was continued market
deterioration due to rising oil prices, excess capacity and the weak euro, the
adjusted result reflected an 18% increase on the previous quarter due to
restructuring benefits and volume growth. Despite these improvements, the
adjusted result for the quarter was 20% down on a year ago, reflecting the
extent of the decline in margins over the past year.
The adjusted result for the six months ended June 30, 1999, at $474 million,
reflected a decrease of 29% compared with that of the first six months of 1998.
Performance improvements partially offset the steep decline in margins for many
products. The replacement cost operating profit for the six months ended June
30, 1999 included special charges of $70 million related to litigation
settlement and merger integration costs.
There were no special charges in the three months or the six months ended June
30, 1998.
Chemicals production in the three months ended June 30, 1999 was up 7% from the
first quarter of 1999, due to improved sales and also additional capacity
(mainly polypropylene at Chocolate Bayou, Texas and PTA (purified terephthalic
acid) at Geel, Belgium). These factors also contributed to the 8% growth in
production in the three months ended June 30, 1999 compared with the equivalent
period of 1998.
During the quarter, BP Amoco announced plans for the creation of two new
polypropylene joint ventures with Elf Atochem, one to pool polypropylene
activities in Europe and the other to form a global polypropylene research and
technology alliance. Also during the quarter, we sold our 20% share of the
Wilton (UK) olefins cracker.
The sale of BP Amoco's Plaskon electronic materials business, located in the US
and Singapore, for $121 million was announced in July.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
OTHER BUSINESSES AND CORPORATE
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
1998 1999 1999 1998
<S> <C> <C> <C> <C> <C>
(66) (186) Replacement cost operating loss - $m (310) (173)
</TABLE>
Other Businesses and Corporate comprises Finance, BP Solarex, the Group's coal
asset, interest income and costs relating to corporate activities worldwide.
Replacement cost operating loss was $109 million, after adjusting for special
charges of $77 million in respect of integration costs. In April, BP Amoco
announced that it had acquired from Enron Corporation, for $45 million, the 50%
of Solarex it did not already own.
EXCEPTIONAL ITEMS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
1998 1999 1999 1998
<S> <C> <C> <C> <C> <C>
12 162 Profit on sale of fixed assets and businesses - $m 259 78
- (348) Restructuring costs - $m (1,503) -
- 23 Taxation credit (charge) - $m 221 (16)
------ ------ ------ ------
12 (163) Exceptional items after taxation - $m (1,023) 62
====== ====== ====== ======
</TABLE>
Exceptional items for the three months ended June 30, 1999 included the profit
on sale of fixed assets and businesses and further restructuring relating mainly
to severance. For further information on exceptional items see Note 8 of Notes
to Consolidated Financial Statements.
OUTLOOK
The Group's outlook has improved, with positive developments on the crude oil
supply side underpinned by firming aggregate demand.
Crude oil prices have responded to OPEC quota discipline and are
approaching OPEC target levels. Continuation of this discipline will be
critical to price stability.
Natural gas prices are likely to remain stable with some firming
towards year-end.
Downstream, refining margins are not likely to show marked recovery; marketing
margins are expected to stabilize following oil price increases.
In Chemicals, margins are likely to remain weak in the near term due to higher
oil prices, new industry capacity and the weak euro. Most businesses are
at or below their historic bottom-of-cycle position, which should lead, in
due course, to some stability and recovery.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
PROPOSED COMBINATION WITH THE ATLANTIC RICHFIELD COMPANY AND
SUBDIVISION OF ORDINARY SHARE CAPITAL
On April 1, 1999 BP Amoco announced that it had reached agreement to combine
with the Atlantic Richfield Company (ARCO) of Los Angeles.
A special meeting of ARCO shareholders has been convened for August 30, 1999 and
an Extraordinary General Meeting of BP Amoco shareholders will be held on
September 1, 1999. Shareholders of each company will be asked to approve the
proposed combination at these meetings. Completion of the transaction is subject
to certain conditions including the approval of shareholders of both companies
and the consent of various state and regulatory authorities including the US
Federal Trade Commission and the European Commission.
On July 15, 1999, BP Amoco announced that it proposed, subject to necessary
approvals, to subdivide the ordinary share capital of BP Amoco with effect from
October 4, 1999 so that each holder of BP Amoco Ordinary Shares and each holder
of BP Amoco American Depositary Shares (ADSs) will receive one additional BP
Amoco Ordinary Share for each BP Amoco Ordinary Share held and one additional
ADS for each ADS held. After the subdivision the nominal value of each BP Amoco
Ordinary Share would be half its current value of $0.50.
The proposed combination, approved by the boards of both companies, provides for
the exchange of 0.82 of a BP Amoco American Depositary Share (4.92 BP Amoco
Ordinary Shares) for each share of ARCO common stock. If the proposed 2 for 1
share subdivision becomes effective before the combination, then the exchange
ratio in the combination will be 1.64 BP Amoco ADSs (9.84 New BP Amoco Ordinary
Shares of $0.25 nominal value) for each share of ARCO common stock.
FORWARD-LOOKING STATEMENTS
The foregoing discussion, in particular the statements under `Outlook', focuses
on certain trends and general market and economic conditions and outlook on
production levels or rates, prices, margins and currency exchange rates and, as
such, are forward-looking statements that involve risk and uncertainty that
could cause actual results and developments to differ materially from those
expressed or implied by this discussion. By their nature, trends and outlook on
production, price, margin and currency exchange rates are difficult to forecast
with any precision, and there are a number of factors, that could cause actual
results and developments to differ materially from those expressed or implied by
these forward-looking statements including future levels of industry product
supply, demand and pricing; currency exchange rates; political stability and
economic growth in relevant areas of the world; the ability to successfully
integrate after merger; development and use of new technology and successful
partnering; the actions of competitors, natural disasters and other changes to
business conditions. Additional information, including information on factors
which may affect BP Amoco's business, is contained in BP Amoco's Annual Report
and Accounts for 1998 and in the Annual Report on Form 20-F filed with the US
Securities and Exchange Commission.
MILLENNIUM IT RISK
The Year 2000 issue, which stems from computer programs written using two digits
rather than four to define the applicable year, could result in processing
faults on the change of century, producing a wide range of consequences.
We have conducted a risk-based review of our computer systems and
computer-controlled processes and have developed plans to remediate Year
2000-related faults by replacement or repair. Apart from some global and
regional systems, which are handled centrally, project implementation is
devolved to the management of operating units so as to ensure complete coverage.
The project is designed to minimize risks arising from the Year 2000 problem
which might endanger health, safety, the environment, the Group's reputation or
its cash flow.
The estimated total cost of BP Amoco's Year 2000 program is approximately $300
million to be incurred by the end of 1999. As at June 30, 1999, some $260
million had been spent. This estimate excludes the costs of existing major
systems replacement projects launched independently of the Year 2000
remediation. The Year 2000 costs are charged against income in the period in
which they are incurred.
Our Year 2000 program covers all areas that are known to be impacted by the
issue including IT application systems and infrastructure, process control
systems and embedded microprocessors in plants, oil and gas fields and building
facilities. The Year 2000 process also includes the ongoing assessment of Year
2000 readiness of critical suppliers, customers, joint ventures and partners.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
BP Amoco business units have identified third parties to their business
operations, and reviewed such parties' Year 2000 status. This is generally
accomplished in face-to-face meetings where the company shares status reports
and hard evidence of Year 2000 progress with the third party in order to give
each other mutual confidence. This is typically not done in a single meeting,
but is repeated at intervals as appropriate to each third party. Where
satisfactory assurance is not possible, alternative plans are put in place to
handle potential failure of the third party. The value of such assurances as
have been received is variable, depending on the credibility of the answer which
in turn depends on the thoroughness with which Year 2000 remediation has been
carried out and the assurer's own exposure to third party Year 2000 risk.
Typically, new contracts include Year 2000 clauses, and where appropriate and
feasible, existing contracts have had a Year 2000 clause inserted that has been
agreed with local legal departments. Certain customary limitations on legal
remedies do, however, remain, particularly on consequential loss.
We have finished the global inventory and risk analysis work, and the
remediation and testing effort is also substantially complete. A small amount of
remediation dependent on planned plant shutdowns and other remediation work
consisting mainly of implementation of package software releases is scheduled
for completion by September 30, 1999. Systems rationalization and organizational
restructuring made necessary by the BP Amoco merger are being managed to avoid
any risks which might reduce the Group's ability to meet 2000 with confidence.
BP Amoco is providing information to third parties, on request, as to the
progress of its Year 2000 project.
Because of the Group's widespread use of standardized hardware and global
package software, in many instances the bulk of the work is achieved by
upgrading to the supplier's most recent software release. BP Amoco believes its
Year 2000 process is in line with best practice and is underpinned by an
internal assurance process. We have not made extensive use of external
verification.
The Year 2000 project has caused the deferral of some other computer systems
work. Other systems projects continue to be assessed on their economic value,
and are resourced from internal and external personnel. We have not experienced
significant difficulties in retaining the necessary IT skills internally or
obtaining them in the market.
The Year 2000 problem may affect the operation of automated non-IT systems such
as those used to control certain processes in oil production facilities,
pipelines, refineries and chemicals plants. In relation to the engineering
process control risk in these operations, we have made some use of external
engineering consultancies to help develop the methodology of risk assessment and
analysis, to review progress and to ensure that the work has been carried out to
an acceptable standard. We have also commissioned some of our engineering
equipment suppliers to perform reviews of site systems adaptations where the
supplier's expertise provides the most cost-effective means of completing this
work. Emergency response systems in these operations are generally not dependent
on IT and IT-related processes.
To meet any unexpected Year 2000 failure in the Group or by key third parties,
we are developing contingency plans to deliver a flexible response, especially
for critical systems in the first days of 2000. Each business entity is
accountable for identifying, categorizing, and prioritizing risks associated
with the Year 2000 transition and developing and implementing appropriate
contingency plans to mitigate those risks. We intend to use our existing crisis
management, emergency response, and business continuity organizations, plans and
procedures in Year 2000 contingency planning.
Such plans and procedures use risk analysis in assessing the impact of single
failures and multiple failures involving consequential knock-on effects and the
appropriate response to such failures. Examples of this range from panic buying
of products through significant infrastructure failures with contingency plans
designed to provide a graduated response ranging from adjusting the level of
operations to provision of alternative sources of supply of the affected
service. We expect the need to activate contingency plans will be variable from
country to country with the greater need in countries where infrastructure
assessments have already revealed a lack of focus on the problem.
The Group's objective is to ensure "business as usual" in respect of our own
operations. However, our detailed plans are based on assumptions about the
robustness of infrastructure suppliers such as power and telecommunications,
upon which our businesses are dependent. BP Amoco, together with other
companies, remains exposed, to an unquantifiable degree, to the risk of major
non-compliance by those suppliers and other third parties, and also to any
abnormal customer demand patterns resulting from concerns about supply
constraints around the 1999 year-end.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
The failure by third parties to correct a material Year 2000 problem could
result in an interruption in, or a failure of, certain of BP Amoco's normal
business activities or operations. Due to the general uncertainty inherent in
the Year 2000 problem, we are unable to determine at this time whether any such
interruptions and failures will have a material impact on the Group's results of
operations. We do not, however, expect them to have a material effect on the
Group's liquidity or financial condition.
The foregoing constitutes a "forward-looking statement" within the meaning of
the Securities Act of 1933. It is based on management's current expectations,
estimates and projections, which could ultimately prove to be inaccurate.
Factors which could affect the Group's ability to be Year 2000 compliant by the
end of 1999 include the failure of third parties, including software suppliers
and others, to achieve compliance, the inaccuracy of certifications received
from them, and a shortage of necessary programmers, hardware and software.
1999 DIVIDENDS
On August 10, 1999, BP Amoco p.l.c. announced a second quarterly dividend for
1999 of 10 cents per Ordinary Share of 50c (Ordinary Shares) amounting to $970
million in total. The record date for qualifying US resident holders of American
Depositary Receipts as well as holders of Ordinary Shares is August 20, 1999,
with payment to be made on September 10, 1999.
The dividend payable on September 10, 1999 entitles qualifying ADS shareholders
to a refund of the 1/9th UK tax credit attaching to the dividend less a UK
withholding tax limited to the amount of the tax credit. The effect of these
arrangements for ADS holders is currently a cash payment of $0.600, a gross
dividend for tax purposes of $0.667 and a potential tax credit of $0.067 per
ADS.
A Dividend Reinvestment Plan was introduced with effect from the fourth
quarterly dividend in respect of 1998, whereby holders of Ordinary Shares can
elect to reinvest the net cash dividend in shares purchased on the London Stock
Exchange. This plan is not available to any person resident in the USA or
Canada, or in any jurisdiction outside the UK where such an offer requires
compliance by the Company with any governmental or regulatory procedures or any
similar formalities.
A dividend reinvestment facility is, however, available for holders of ADRs
through the Direct Access Plan of Morgan Guaranty Trust Company of New York.
Participants in the Dividend Reinvestment Plan or the dividend reinvestment
facility included in the US Direct Access Plan will receive the dividend in the
form of shares on September 10, 1999.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 (a) 1999 1998 (a)
($ million, except per share amounts)
Turnover - Note 3 22,939 20,969 40,923 42,485
Less: joint ventures 3,923 3,707 7,265 7,360
--------- --------- --------- ---------
Group turnover 19,016 17,262 33,658 35,125
Replacement cost of sales 15,443 14,103 27,354 28,498
Production taxes - Note 4 215 149 357 339
--------- --------- --------- ---------
Gross profit 3,358 3,010 5,947 6,288
Distribution and administration expenses 1,569 1,475 3,105 3,056
Exploration expense - Note 5 124 221 296 441
--------- --------- --------- ---------
1,665 1,314 2,546 2,791
Other income 164 309 269 476
--------- --------- --------- ---------
Group replacement cost operating profit 1,829 1,623 2,815 3,267
Share of profits of joint ventures 140 205 271 422
Share of profits of associated undertakings 106 104 235 242
--------- --------- --------- ---------
Total replacement cost operating profit - Notes 6 and 7 2,075 1,932 3,321 3,931
Profit on sale of fixed assets and businesses - Note 8 162 12 259 78
Restructuring costs - Note 8 (348) - (1,503) -
--------- --------- --------- ---------
Replacement cost profit before interest and tax - Note 6 1,889 1,944 2,077 4,009
Inventory holding gains (losses) - Note 9 572 (99) 579 (788)
--------- --------- --------- ---------
Historical cost profit before interest and tax 2,461 1,845 2,656 3,221
Interest expense - Note 10 328 289 632 553
--------- --------- --------- ---------
Profit before taxation 2,133 1,556 2,024 2,668
Taxation - Note 11 473 553 529 1,006
--------- --------- --------- ---------
Profit after taxation 1,660 1,003 1,495 1,662
Minority shareholders' interest 25 11 36 30
--------- --------- --------- ---------
Profit for the period 1,635 992 1,459 1,632
========= ========= ========= =========
Earnings per Ordinary Share - cents (b)
Basic 17 10 15 17
Diluted 17 10 15 17
--------- --------- --------- ---------
Earnings per American depositary share - cents (b)
Basic 102 60 90 102
Diluted 102 60 90 102
--------- --------- --------- ---------
Average number of outstanding Ordinary Shares (millions) 9,693 9,598 9,681 9,572
========= ========= ========= =========
</TABLE>
- ----------------
(a) Restated - for further information see Note 2.
(b) A summary of the material adjustments to profit for the period which would
be required if generally accepted accounting principles in the United
States had been applied instead of those generally accepted in the United
Kingdom is given in Note 14.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998 (a)
(Unaudited)
($ million)
<S> <C> <C> <C> <C>
Fixed assets
Intangible assets 3,489 3,037
Tangible assets 53,831 54,880
Investments 9,752 9,772
--------- ---------
67,072 67,689
Current assets
Inventories 4,232 3,642
Receivables 14,577 12,709
Investments 304 470
Cash at bank and in hand 467 405
--------- ---------
19,580 17,226
--------- ---------
Current liabilities - falling due within one year
Finance debt 4,029 2,837
Accounts payable and accrued liabilities 16,170 15,329
--------- ---------
20,199 18,166
--------- ---------
Net current liabilities (619) (940)
--------- ---------
Total assets less current liabilities 66,453 66,749
Noncurrent liabilities
Finance debt 11,821 10,918
Accounts payable and accrued liabilities 2,219 2,047
Provisions for liabilities and charges 9,781 10,100
--------- ---------
23,821 23,065
--------- ---------
Net assets 42,632 43,684
Minority shareholders' interest 1,040 1,072
--------- ---------
BP Amoco shareholders' interest (b) - Note 14 41,592 42,612
========= =========
Represented by:
Capital shares
Preference 21 21
Ordinary 4,865 4,842
Paid-in surplus 3,529 3,386
Retained earnings 32,480 33,666
Merger reserve 697 697
--------- ---------
41,592 42,612
========= =========
</TABLE>
- ----------------
(a) Restated - for further information see Note 2.
(b) A summary of the material adjustments to BP Amoco shareholders' interest
which would be required if generally accepted accounting principles in
the United States had been applied instead of those generally accepted
in the United Kingdom is given in Note 14.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Net cash inflow from operating activities 2,329 2,579 3,158 4,650
--------- --------- --------- ---------
Dividends from joint ventures 230 127 442 201
--------- --------- --------- ---------
Dividends from associated undertakings 98 152 143 190
--------- --------- --------- ---------
Servicing of finance and returns on investments
Interest received 50 75 82 119
Interest paid (316) (270) (597) (526)
Dividends received 13 3 20 11
Dividends paid to minority shareholders (31) (39) (96) (40)
--------- --------- --------- ---------
Net cash outflow from servicing of finance and
returns on investments (284) (231) (591) (436)
--------- --------- --------- ---------
Taxation
UK corporation tax (59) (73) (131) (127)
Overseas tax (89) (392) (62) (769)
--------- --------- --------- ---------
Tax paid (148) (465) (193) (896)
--------- --------- --------- ---------
Capital expenditure
Payments for fixed assets (1,678) (2,092) (3,193) (4,287)
Proceeds from the sale of fixed assets 352 252 439 580
--------- --------- --------- ---------
Net cash outflow for capital expenditure (1,326) (1,840) (2,754) (3,707)
--------- --------- --------- ---------
Acquisitions and disposals
Investments in associated undertakings (51) (81) (139) (220)
Acquisitions (45) - (45) (205)
Net investment in joint ventures (69) 18 (269) 28
Proceeds from the sale of businesses - - 92 77
--------- --------- --------- ---------
Net cash outflow for acquisitions and disposals (165) (63) (361) (320)
--------- --------- --------- ---------
Equity dividends paid (1,934) (578) (2,197) (1,177)
--------- --------- --------- ---------
Net cash outflow (1,200) (319) (2,353) (1,495)
========= ========= ========= =========
Financing (Note 12) (1,438) (602) (2,267) (1,413)
Management of liquid resources - 332 (161) (218)
(Increase) decrease in cash 238 (49) 75 136
--------- --------- --------- ---------
(1,200) (319) (2,353) (1,495)
========= ========= ========= =========
</TABLE>
- --------------------------
(a) This cash flow statement has been prepared in accordance with UK GAAP. A
cash flow statement prepared on the basis of US GAAP is included in Note
14.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998(a) 1999 1998(a)
($ million)
Reconciliation of historical cost profit before interest
and tax to net cash inflow from operating activities
Historical cost profit before interest and tax 2,461 1,845 2,656 3,221
Depreciation and amounts provided 1,152 1,448 2,396 2,674
Exploration expenditure written off 51 101 135 180
Share of profits of joint ventures and associated
undertakings+ (383) (253) (739) (471)
Interest and other income (61) (78) (113) (135)
Profit on sale of fixed assets and businesses (148) (12) (206) (78)
Charge for provisions 30 26 479 147
Utilization of provisions (115) (87) (210) (164)
(Increase) decrease in stocks (603) 6 (604) 518
(Increase) decrease in debtors (774) 190 (1,788) 1,165
Increase (decrease) in creditors 719 (607) 1,152 (2,407)
--------- --------- --------- ---------
Net cash inflow from operating activities 2,329 2,579 3,158 4,650
========= ========= ========= =========
Analysis of cash flow
Financing
Long-term borrowing (1,616) (1,221) (1,666) (1,561)
Repayments of long-term borrowing 558 681 1,351 880
Short-term borrowing (463) (436) (2,655) (1,536)
Repayments of short-term borrowing 148 136 869 296
--------- --------- --------- ---------
(1,373) (840) (2,101) (1,921)
Issue of ordinary share capital (65) (10) (166) (53)
Repurchase of ordinary share capital - 248 - 561
--------- --------- --------- ---------
Net cash inflow from financing (1,438) (602) (2,267) (1,413)
========= ========= ========= =========
- --------------------------
+ Includes the following amounts of depreciation
for the BP/Mobil European JV 72 79 150 148
========= ========= ========= =========
(a) Restated - for futher information see Note 2.
(b) This cash flow statement has been prepared in accordance with UK GAAP. A
cash flow statement prepared on the basis of US GAAP is included in Note
14.
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
CAPITAL EXPENDITURE
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
By business
Exploration and Production
UK 203 470 447 876
Rest of Europe 5 40 13 91
USA 403 521 765 1,030
Rest of World 491 547 811 1,153
-------- -------- -------- --------
1,102 1,578 2,036 3,150
-------- -------- -------- --------
Refining and Marketing
UK 41 38 75 59
Rest of Europe 96 73 176 185
USA 130 218 284 389
Rest of World 62 82 110 136
-------- -------- -------- --------
329 411 645 769
-------- -------- -------- --------
Chemicals
UK 103 74 163 119
Rest of Europe 71 55 132 322
USA 84 114 147 204
Rest of World 52 58 77 113
-------- -------- -------- --------
310 301 519 758
-------- -------- -------- --------
Other businesses and corporate 38 64 63 388
-------- -------- -------- ---------
1,779 2,354 3,263 5,065
======== ======== ======== ========
By geographical area
UK 376 604 720 1,317
Rest of Europe 172 169 323 637
USA 626 894 1,221 1,707
Rest of World 605 687 999 1,404
-------- -------- -------- ---------
1,779 2,354 3,263 5,065
======== ======== ======== ========
Includes the following amounts for the BP/Mobil
European joint venture 127 106 234 238
======== ======== ======== ========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
OPERATING INFORMATION
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
Average oil realizations - $/bbl*
UK 14.75 13.08 12.86 13.72
USA 14.12 11.79 11.96 12.80
Rest of World 14.51 11.56 12.51 11.99
BP Amoco average 14.49 12.13 12.45 12.89
Average natural gas realizations - $/mcf
UK 2.24 2.80 2.27 2.94
USA 1.97 1.88 1.78 1.87
Rest of World 1.42 1.70 1.51 1.74
BP Amoco average 1.82 1.94 1.81 2.00
Crude oil and natural gas liquids production
(thousand barrels per day), (net of royalties)
UK 565 484 575 484
Rest of Europe 98 114 102 115
USA 794 846 804 848
Rest of World 592 582 592 579
--------- -------- -------- ---------
Total crude oil and liquids production 2,049 2,026 2,073 2,026
========= ======== ======== =========
Natural gas production (million cubic feet per day)
UK 1,132 1,165 1,310 1,369
Rest of Europe 146 197 194 205
USA 2,380 2,436 2,406 2,432
Rest of World 2,286 1,977 2,097 1,945
--------- -------- -------- ---------
Total natural gas production 5,944 5,775 6,007 5,951
========= ======== ======== =========
Indicative global refining margins - $/bbl
North West Europe 0.34 2.09 0.51 2.28
USA 1.34 2.60 1.07 2.38
Singapore 0.87 2.39 1.03 2.04
BP Amoco average 0.83 2.35 0.83 2.28
Refinery throughputs (thousand barrels per day)
UK 285 313 279 309
Rest of Europe 519 534 541 540
USA 1,396 1,605 1,336 1,571
Rest of World 383 353 383 366
--------- -------- -------- ---------
2,583 2,805 2,539 2,786
========= ======== ======== =========
Oil sales volumes (thousand barrels per day)
Refined products
UK 231 256 236 257
Rest of Europe 785 745 785 757
USA 1,597 1,503 1,528 1,461
Rest of World 571 597 614 592
--------- -------- -------- ---------
Total marketing sales 3,184 3,101 3,163 3,067
Trading/supply sales 1,928 1,763 1,851 1,687
--------- -------- -------- ---------
Total refined product sales 5,112 4,864 5,014 4,754
Crude oil 4,175 3,889 4,062 3,998
--------- -------- -------- ---------
Total oil sales 9,287 8,753 9,076 8,752
========= ======== ======== =========
Chemicals production+ (thousand tonnes)
UK 941 907 1,916 1,881
Rest of Europe 1,507 1,288 2,916 2,614
USA 2,488 2,454 4,787 4,534
Rest of World 579 439 1,039 876
--------- -------- -------- ---------
Total production 5,515 5,088 10,658 9,905
========= ======== ======== =========
</TABLE>
* Crude oil and natural gas liquids.
+ Includes BP Amoco share of associated undertakings and other interests
in production.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The results for the interim periods are unaudited and in the opinion
of management include all adjustments necessary for a fair presentation
of the results for the periods presented. The interim financial
statements and notes included in this Report should be read in conjunction
with the consolidated financial statements and related notes for the year
ended December 31,1998 included in BP Amoco's Report on Form 6-K filed
with the Securities and Exchange Commission on July 7, 1999. The restated
financial statements of BP Amoco included in BP Amoco's Report on Form 6-K
filed on July 7, 1999 modify and supersede the financial statements
included in BP Amoco's Annual Report on Form 20-F for the year ended
December 31, 1998. The financial statements included in such Form 6-K
have been restated to reflect the adoption of FRS No 12, effective as
of January 1, 1999, and also to correct reserve information.
2. New accounting standard
The Group has adopted Financial Reporting Standard No. 12 `Provisions,
Contingent Liabilities and Contingent Assets' (FRS12) with effect from
January 1, 1999. This standard changes the criteria for recognizing
provisions for such costs as decommissioning, environmental liabilities and
restructuring charges. It also requires provisions for liabilities which
may not be settled for a number of years to be discounted to their net
present value. The adoption of this standard has been treated as a change
in accounting policy. Comparative figures have been restated to reflect
this change in accounting policy.
The principal effects of the adoption of FRS12 are as follows:
(a) Provisions for environmental liabilities are determined on a discounted
basis as the effect of the time value of money is material. Previously
these liabilities were on an undiscounted basis.
(b) Provisions for decommissioning are recognized in full, on a discounted
basis, at the commencement of oil and natural gas production. The
Group's prior practice was to accrue the expected cost of
decommissioning oil and natural gas production facilities on a
unit-of-production basis over the life of the field. FRS12 also
requires the Group to capitalize an amount equivalent to the provision
as a tangible fixed asset and to amortize this amount over the life of
the field on a unit-of-production basis.
(c) The unwinding of the discount, which represents a period-by-period
cost, is included within interest expense.
The adjustments to total replacement cost operating profit for businesses
and interest expense are as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Exploration and Production 24 21 45 41
--------- --------- --------- ---------
Total replacement cost operating profit 24 21 45 41
Interest expense (33) (30) (63) (60)
--------- --------- --------- ---------
Decrease in profit for the period (9) (9) (18) (19)
========= ========= ========= =========
</TABLE>
The adjustments to tangible assets and provisions for liabilities and
charges at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
<S> <C>
($ million)
Tangible assets 415
Other creditors 62
Other provisions 349
---------
Increase in BP Amoco shareholders' interest 826
=========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
3. Turnover
By business
Exploration and Production 4,852 4,481 8,876 9,077
Refining and Marketing 13,988 12,180 24,155 24,681
Chemicals 2,248 2,532 4,371 5,118
Other businesses and corporate 45 52 75 106
--------- --------- --------- ---------
21,133 19,245 37,477 38,982
Less: Sales between businesses 2,117 1,983 3,819 3,857
--------- --------- --------- ---------
Group excluding joint ventures 19,016 17,262 33,658 35,125
Sales of joint ventures 3,923 3,707 7,265 7,360
--------- --------- --------- ---------
22,939 20,969 40,923 42,485
========= ========= ========= =========
By geographical area
UK 6,397 5,242 11,192 11,464
Rest of Europe 1,468 1,513 2,658 3,064
USA 9,043 8,746 15,673 17,134
Rest of World 4,248 3,625 7,702 7,353
--------- --------- --------- ---------
21,156 19,126 37,225 39,015
Less: Sales between areas 2,140 1,864 3,567 3,890
--------- --------- --------- ---------
Group excluding joint ventures 19,016 17,262 33,658 35,125
========= ========= ========= =========
Sales of joint ventures
UK 836 900 1,583 1,784
Rest of Europe 3,528 3,436 6,517 6,748
USA 27 9 51 25
Rest of World 193 63 286 139
--------- --------- --------- ---------
4,584 4,408 8,437 8,696
Less: Sales between areas 661 701 1,172 1,336
--------- --------- --------- ---------
3,923 3,707 7,265 7,360
========= ========= ========= =========
4. Production taxes
UK petroleum revenue tax 49 7 82 33
Overseas production taxes 166 142 275 306
--------- --------- --------- ---------
215 149 357 339
========= ========= ========= =========
5. Exploration expense
Exploration and Production
UK 7 36 20 51
Rest of Europe 11 14 35 40
USA 30 54 50 109
Rest of World 76 117 191 241
--------- --------- --------- ---------
124 221 296 441
========= ========= ========= =========
</TABLE>
6. Replacement cost profit
Replacement cost profits reflect the current cost of supplies. The
replacement cost profit for the period is arrived at by excluding from the
historical cost profit inventory holding gains and losses. These are the
difference between the amount that is charged to cost of sales on a
first-in, first-out (FIFO) basis of inventory valuation and the amount
charged to cost of sales based on the average cost of supplies incurred
during the period. The former basis is used in arriving at the historical
cost result whereas the latter basis is used in arriving at the replacement
cost result. For further discussion of replacement cost operating profit
see Item 8 of BP Amoco's Report on Form 6-K for the year ended December 31,
1998, filed on July 7, 1999.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
7. Total replacement cost operating profit By
business Exploration and
Production
UK 461 464 784 990
Rest of Europe 103 116 230 234
USA 427 343 623 829
Rest of World 512 (87) 684 4
--------- --------- --------- ---------
1,503 836 2,321 2,057
--------- --------- --------- ---------
Refining and Marketing
UK 67 67 45 145
Rest of Europe 58 152 158 276
USA 332 477 445 641
Rest of World 103 143 258 316
--------- --------- --------- ---------
560 839 906 1,378
--------- --------- --------- ---------
Chemicals
UK (26) 62 16 147
Rest of Europe 21 69 82 142
USA 155 181 262 387
Rest of World 48 11 44 (7)
--------- --------- --------- ---------
198 323 404 669
--------- --------- --------- ---------
Other businesses and corporate (186) (66) (310) (173)
--------- --------- --------- ---------
2,075 1,932 3,321 3,931
========= ========= ========= =========
By geographical area
UK 397 558 744 1,223
Rest of Europe 191 344 473 645
USA 823 942 1,111 1,698
Rest of World 664 88 993 365
--------- --------- --------- ---------
2,075 1,932 3,321 3,931
========= ========= ========= =========
Includes the following amounts for joint ventures
and associated undertakings 246 309 506 664
========= ========= ========= =========
8. Analysis of exceptional items Profit (loss)
on sale of fixed assets and businesses
Exploration and Production 8 15 (1) 79
Refining and Marketing 59 (7) 103 (5)
Chemicals 102 - 164 -
Other businesses and corporate (7) 4 (7) 4
--------- --------- --------- ---------
162 12 259 78
Restructuring costs (348) - (1,503) -
--------- --------- --------- ---------
Total exceptional items before taxation (186) 12 (1,244) 78
========= ========= ========= =========
Includes the following amounts for joint ventures
and associated undertakings 8 - 47 -
========= ========= ========= =========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Analysis of exceptional items - continued
During the three months ended June 30, 1999 and the six months ended June
30, 1999, BP Amoco recognized exceptional charges before tax of $348
million and $1,503 million respectively for restructuring costs following
the merger of BP and Amoco at the end of 1998. These costs related mainly
to employee severance. Most of these costs relate to the Group's US
operations. Cash outlays in respect of these exceptional charges amounted
to approximately $700 million in the six months ended June 30, 1999.
Approximately 7,500 employees were notified of the termination of
their employment in the second quarter of 1999, and 8,900 left. The
corresponding first quarter numbers were 6,000 and 1,900. Most of these
were exploration and production staff, mainly in Houston, Texas, and
business head office and corporate staff in Chicago, Illinois, and
Cleveland, Ohio.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
9. Inventory holding gains (losses)
Exploration and Production 1 - (10) (16)
Refining and Marketing 531 (90) 576 (732)
Chemicals 40 (9) 13 (40)
--------- --------- --------- ---------
572 (99) 579 (788)
========= ========= ========= =========
Includes the following amounts for joint ventures
and associated undertakings 129 (56) 186 (193)
========= ========= ========= =========
10. Interest expense
Group interest payable 263 263 499 504
Capitalized (11) (41) (26) (84)
--------- --------- --------- ---------
252 222 473 420
Joint ventures 15 20 31 33
Associated undertakings 28 17 65 40
Unwinding of discount on provisions (Note 2) 33 30 63 60
--------- --------- --------- ---------
328 289 632 553
========= ========= ========= =========
11. Charge for taxation
United Kingdom 100 146 188 289
Overseas 373 407 341 717
--------- --------- --------- ---------
473 553 529 1,006
========= ========= ========= =========
Includes the following amounts for joint ventures
and associated undertakings 26 20 50 71
========= ========= ========= =========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
12. Analysis of changes in net debt Opening balance
Finance debt 14,510 13,932 13,755 12,877
Less: Cash 270 544 405 355
Current asset investments 305 512 470 1,067
--------- --------- --------- ---------
Opening net debt 13,935 12,876 12,880 11,455
--------- --------- --------- ---------
Closing balance
Finance debt 15,850 14,779 15,850 14,779
Less: Cash 467 472 467 472
Current asset investments 304 847 304 847
--------- --------- --------- ---------
Closing net debt 15,079 13,460 15,079 13,460
--------- --------- --------- ---------
Increase in net debt (1,144) (584) (2,199) (2,005)
========= ========= ========= =========
Movement in cash/bank overdrafts 238 (49) 75 136
Increase (decrease) in current asset investments - 332 (161) (218)
Net cash inflow from financing
(excluding share capital) (1,373) (840) (2,101) (1,921)
Other movements (7) (11) (7) (9)
--------- --------- --------- ---------
Movements in net debt before exchange effects (1,142) (568) (2,194) (2,012)
Exchange adjustments (2) (16) (5) 7
--------- --------- --------- ---------
Increase in net debt (1,144) (584) (2,199) (2,005)
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
13. Movement in BP Amoco shareholders' interest $ million
(Unaudited)
Balance at December 31, 1998 41,786
Prior year adjustment - change in accounting policy (Note 2) 826
---------
As restated 42,612
Profit for the period 1,459
Distribution to shareholders (1,940)
Currency translation differences (1,016)
Share dividend plan 311
Employee share schemes 166
--------
Balance at June 30, 1999 41,592
========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
14. US generally accepted accounting principles
The following is a summary of the adjustments to profit for the period and
to BP Amoco shareholders' interest which would be required if generally
accepted accounting principles in the United States (US GAAP) had been
applied instead of those generally accepted in the United Kingdom;
<TABLE>
<CAPTION>
Profit for the period Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Profit as reported in the consolidated
statement of income 1,635 992 1,459 1,632
Adjustments:
Depreciation charge 3 (11) (7) (30)
Deferred taxation (24) (130) 14 (86)
Interest expense 33 30 63 60
Onerous property leases - - 156 -
Decommissioning expense (41) (32) (83) (64)
Severance (32) - (32) -
Other 4 10 9 2
-------- -------- -------- --------
(57) (133) 120 (118)
-------- -------- -------- --------
Profit for the period as adjusted to accord
with US GAAP 1,578 859 1,579 1,514
======== ======== ======== ========
Profit for the period as adjusted:
Per Ordinary Share - cents
Basic 16 9 16 16
Diluted 16 9 16 16
======== ======== ======== ========
Per American Depositary Share - cents (a)
Basic 96 54 96 96
Diluted 96 54 96 96
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
BP Amoco shareholders' interest June 30, 1999 December 31, 1998 (b)
(Unaudited)
($ million)
BP Amoco shareholders' interest as reported
in the consolidated balance sheet 41,592 42,612
Adjustments:
Fixed assets 1,105 1,112
Deferred taxation (5,729) (5,776)
Ordinary shares held for future awards to employees (442) (489)
Sale and leaseback of Chicago office building (413) (413)
Dividend announced 970 968
Pension liability adjustment (143) (143)
Onerous property leases 156 -
Decommissioning and environmental provisions (369) (349)
Severance costs - 32
Other (198) (220)
---------- ----------
(5,063) (5,278)
---------- ----------
BP Amoco shareholders' interest as adjusted
to accord with US GAAP 36,529 37,334
========== ==========
</TABLE>
- ----------------
(a) One American Depositary Share is equivalent to six Ordinary Shares.
(b) As reported in Note 46 of Notes to Financial Statements for the year
ended December 31, 1998 included in BP Amoco's Report on Form 6-K
filed on July 7, 1999.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
14. US generally accepted accounting principles - continued
Cash flow
The consolidated statement of cash flows presented in accordance with
SFAS 95 is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Operating activities
Profit after taxation 1,660 1,003 1,495 1,662
Adjustments to reconcile profits after tax to net
cash provided by operating activities
Depreciation and amounts provided 1,152 1,448 2,396 2,674
Exploration expense 51 101 135 180
Share of (profit) loss of joint ventures and
associates less dividends received (55) 26 (154) (80)
(Profit) loss on sale of businesses and fixed (148) (12) (206) (78)
assets
Working capital movement (see analysis below) (547) (124) (1,422) (534)
Other 42 (146) 477 45
--------- --------- --------- ---------
Net cash provided by operating activities 2,155 2,296 2,721 3,869
--------- --------- --------- ---------
Investing activities
Capital expenditures (1,582) (2,173) (2,866) (4,398)
Acquisitions, net of cash acquired (45) - (45) (205)
Investment in associated undertakings (51) (81) (139) (220)
Net investment in joint ventures (69) 18 (269) 28
Proceeds from disposal of assets 352 252 531 657
--------- --------- --------- ---------
Net cash used in investing activities (1,395) (1,984) (2,788) (4,138)
--------- --------- --------- ---------
Financing activities
Proceeds from shares issued (repurchased) 65 (238) 166 (508)
Proceeds from long-term financing 1,616 1,221 1,666 1,561
Repayments of long-term financing (558) (681) (1,351) (880)
Net increase (decrease) in short-term debt 315 300 1,786 1,240
Dividends paid - BP Amoco (1,934) (578) (2,197) (1,177)
- Minority shareholders (31) (39) (96) (40)
--------- --------- --------- ---------
Net cash used in financing activities (527) (15) (26) 196
--------- --------- --------- ---------
Currency translation differences relating to cash
and cash equivalents (40) (22) (15) (19)
--------- --------- --------- ---------
(Decrease) increase in cash and cash equivalents 193 275 (108) (92)
--------- --------- --------- ---------
Cash and cash equivalents at beginning of year 493 971 794 1,338
--------- --------- --------- ---------
Cash and cash equivalents at end of period 686 1,246 686 1,246
--------- --------- --------- ---------
Analysis of working capital movement
Inventories (603) 6 (604) 518
Receivables (837) 292 (1,520) 1,276
Current liabilities (excluding finance debt) 893 (422) 702 (2,328)
--------- --------- --------- ---------
Total working capital (547) (124) (1,422) (534)
========= ========= ========= =========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
14. US generally accepted accounting principles - continued
Earnings per share
Basic earnings per share excludes the dilutive effects of options,
warrants and convertible securities. Diluted earnings per share
reflects the potential dilution that could occur if options, warrants
or convertible securities were exercised or converted into ordinary
shares that shared in the earnings of the Group. The dilutive effect of
outstanding share options is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
(shares million)
Weighted average number of ordinary shares 9,693 9,598 9,681 9,572
Ordinary shares issuable under employee
share schemes 54 41 56 42
--------- --------- --------- ---------
9,747 9,639 9,737 9,614
========= ========= ========= =========
</TABLE>
Comprehensive income
The components of comprehensive income, net of related tax are as
follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Profit for the period as adjusted to accord with
US GAAP 1,578 859 1,579 1,514
Currency translation differences (210) (65) (1,016) (91)
Pension liability - - - -
--------- --------- --------- ---------
Comprehensive income 1,368 794 563 1,423
========= ========= ========= =========
</TABLE>
Accumulated other comprehensive income at June 30, 1999 and December
31, 1998 was $(1,612) million and $(596) million, respectively.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
14. US generally accepted accounting principles - continued
Accounting for associated undertakings and joint ventures
Under the provisions of UK Financial Reporting Standard No.9
`Associates and Joint Ventures' (`FRS9'), the Company includes its
share of the results of associated undertakings and joint ventures
(JVs) within various captions in the consolidated statement of income.
Under US GAAP, the Company's share of the after tax profit or loss of
associated undertakings and joint ventures would be recognized as a
single amount. The following summarizes the reclassifications necessary
to accord with US GAAP.
<TABLE>
<CAPTION>
Three months ended June 30, 1999
(Unaudited)
------------------------------------------------------
<S> <C> <C> <C>
As US GAAP
Reported Reclassification Presentation
------------------------------------------------------
($ million)
Consolidated statement of income
Other income 164 452 616
Share of profits of JVs and associated undertakings 246 (246) -
Exceptional items before taxation (186) (8) (194)
Inventory holding gains (losses) 572 (129) 443
Interest expense 328 (43) 285
Taxation 473 (26) 447
Profit for the period 1,635 - 1,635
Six months ended June 30, 1999
(Unaudited)
------------------------------------------------------
As US GAAP
Reported Reclassification Presentation
------------------------------------------------------
($ million)
Consolidated statement of income
Other income 269 885 1,154
Share of profits of JVs and associated undertakings 506 (506) -
Exceptional items before taxation (1,244) (47) (1,291)
Inventory holding gains (losses) 579 (186) 393
Interest expense 632 (96) 536
Taxation 529 (50) 479
Profit for the period 1,459 - 1,459
Three months ended June 30, 1998
(Unaudited)
------------------------------------------------------
As US GAAP
Reported Reclassification Presentation
------------------------------------------------------
($ million)
Consolidated statement of income
Other income 309 310 619
Share of profits of JVs and associated undertakings 309 (309) -
Exceptional items before taxation 12 - 12
Inventory holding gains (losses) (99) 56 (43)
Interest expense 289 (37) 252
Taxation 553 (20) 533
Profit for the period 992 - 992
Six months ended June 30, 1998
(Unaudited)
------------------------------------------------------
As US GAAP
Reported Reclassification Presentation
------------------------------------------------------
($ million)
Consolidated statement of income
Other income 476 615 1,091
Share of profits of JVs and associated undertakings 664 (664) -
Exceptional items before taxation 78 - 78
Inventory holding gains (losses) (788) 193 (595)
Interest expense 553 (73) 480
Taxation 1,006 (71) 935
Profit for the period 1,632 - 1,632
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - concluded
14. US generally accepted accounting principles - concluded
Impact of new accounting standards
Start-up costs: Effective January 1, 1999 the Group adopted the
American Institute of Certified Public Accountants' issued Statement of
Position No. 98-5, `Reporting on the Costs of Start-up Activities'
(`SOP 98-5'). This Statement requires costs associated with start-up
activities and organization costs be expensed as incurred. Under its
previous practice, the Group generally expensed such costs as incurred.
The adoption of SOP 98-5 had no impact on the Group's results of
operations and financial position as adjusted to accord with US GAAP.
Derivative instruments and hedging activities: In June 1998, the
Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 133, `Accounting for Derivative
Instruments and Hedging Activities' (`SFAS 133'). The effective date of
this standard was delayed for one year, to accounting periods beginning
after June 15, 2000, by Statement of Financial Accounting Standards
No.137, `Accounting for Derivative Instruments and Hedging Activities
Deferral of the Effective Date of FASB Statement No. 133 - an amendment
of FASB Statement No.133', issued in June 1999. SFAS 133 requires that
all derivative instruments be recorded on the balance sheet at their
fair value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on
whether a derivative is designated as part of a hedge transaction and,
if it is, the type of hedge transaction. The Company has not yet
completed its evaluation of the impact of adopting SFAS 133 on the
Group's results of operations and financial position as adjusted to
accord with US GAAP.
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
BP America Inc. (a)(b) ($ million)
Sales and other operating revenue 3,815 3,201 6,116 6,346
Gross profit (c) 702 534 976 935
Profit for the period (e) 282 124 118 37
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 13,953 13,783
Current assets 3,679 3,002
---------- ---------
Total assets 17,632 16,785
========== =========
Current liabilities 6,183 5,172
Noncurrent liabilities 5,482 5,759
Shareholders' interest 5,967 5,854
---------- ---------
Total liabilities and shareholders' interest 17,632 16,785
========== =========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
The Standard Oil Company (a)(b) ($ million)
Sales and other operating revenue 3,733 3,108 5,960 6,151
Gross profit (c) 667 479 912 814
Profit for the period (e) (f) 328 198 312 114
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 12,621 12,387
Current assets 5,348 4,547
---------- ---------
Total assets 17,969 16,934
========== =========
Current liabilities 3,670 2,772
Noncurrent liabilities 5,392 5,562
Shareholders' interest 8,907 8,600
---------- ---------
Total liabilities and shareholders' interest 17,969 16,934
========== =========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
BP Pipelines (Alaska) Inc. (a)(b) ($ million)
Sales and other operating revenue 103 137 228 287
Gross profit (c) 50 60 95 133
Profit for the period (f) 32 31 57 54
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 1,242 1,362
Current assets 869 803
---------- ---------
Total assets 2,111 2,165
========== =========
Current liabilities 125 152
Noncurrent liabilities 995 994
Shareholders' interest 991 1,019
---------- ---------
Total liabilities and shareholders' interest 2,111 2,165
========== =========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
BP Exploration (Alaska) Inc. (a)(b) ($ million)
Sales and other operating revenue 2,066 1,515 3,031 3,121
Gross (loss) profit (c) 162 9 113 13
Profit/(loss) for the period (e)(f) 100 41 (10) (37)
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 9,069 9,267
Current assets 2,713 2,273
---------- ---------
Total assets 11,782 11,540
========== =========
Current liabilities 848 628
Noncurrent liabilities 1,593 1,582
Shareholders' interest 9,341 9,330
---------- ---------
Total liabilities and shareholders' interest 11,782 11,540
========== =========
</TABLE>
<PAGE>
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - concluded
- -----------------
(a) BP America Inc. is a wholly-owned subsidiary of BP Amoco p.l.c.; The
Standard Oil Company is a wholly-owned subsidiary of BP America Inc.;
and BP Pipelines (Alaska) Inc. and BP Exploration (Alaska) Inc. are
wholly-owned subsidiaries of The Standard Oil Company.
(b) As a result of adopting FRS 12 (Note 2), profit for the three months
ended June 30, 1999 for BP America Inc. and The Standard Oil Company
was decreased by $7 million and the profit for the six months ended
June 30, 1999 for BP America Inc. and The Standard Oil Company was
decreased by $13 million. In addition, the adoption of FRS 12 resulted
in the restatement of certain prior year financial information as
follows - (i) shareholders' interest at December 31, 1998 for
BP America Inc., The Standard Oil Company, BP Pipelines (Alaska) Inc.
and BP Exploration (Alaska) Inc. was increased by $827 million,
$822 million, $281 million and $362 million, respectively; (ii) profit
for the three months ended June 30, 1998 for BP America Inc., The
Standard Oil Company and BP Exploration (Alaska) Inc. was decreased
by $20 million, $20 million and $10 million respectively and (iii)
profit for the six months ended June 30, 1998 for BP America Inc. and
The Standard Oil Company was decreased by $26 million and the loss for
the six months ended June 30, 1998 for BP Exploration (Alaska) Inc.
was increased by $12 million.
(c) Gross profit equals sales and other operating revenue less associated
costs, which exclude distribution and administration expenses and
exploration expense.
(d) As reported in the restated financial statements for the year ended
December 31, 1998 included in BP Amoco's Report on Form 6-K filed on
July 7, 1999. The financial statements included in such Form 6-K have
been restated to reflect the adoption of FRS 12, effective as of
January 1, 1999, as discussed in Note (b).
(e) Profit for three months ended June 30, 1999 for BP America Inc., The
Standard Oil Company and BP Exploration (Alaska) Inc. includes
restructuring costs (Note 8) of $56 million, $55 million and $4 million
respectively. Profit (loss) for the six months ended June 30, 1999 for BP
America Inc., The Standard Oil Company and BP Exploration (Alaska) Inc.
includes restructuring charges of $244 million, $146 million and $35
million respectively.
(f) During 1998, certain tax liabilities provided in the financial statements
of BP America Inc. were transferred to BP Pipelines (Alaska) Inc. and BP
Exploration (Alaska) Inc. As a result of this transfer, profit (loss) for
the six months ended June 30, 1998 for The Standard Oil Company, BP
Pipelines (Alaska) Inc. and BP Exploration (Alaska) Inc. includes a tax
charge of $49 million, $21 million and $28 million respectively.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP AMOCO p.l.c.
(Registrant)
Dated August 13, 1999 By /S/ G.E. YOUNG
....................
G.E. YOUNG
Assistant Secretary
<PAGE>
Exhibit 1
BP AMOCO p.l.c. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30, 1999
($ million, except ratios)
<S> <C>
Profit before taxation 2,024
Group's share of income in excess of
dividends of joint ventures and associated undertakings (58)
Capitalized interest (26)
---------
Profit as adjusted 1,940
---------
Fixed charges:
Interest net of interest expense of joint ventures and associated undertakings and unwinding
of discount 473
Rental expense representative of interest 168
Capitalized interest 26
---------
667
---------
Total adjusted earnings available for payment of fixed charges 2,607
=========
Ratio of earnings to fixed charges 3.91
=========
Total adjusted earnings available for payment of fixed charges, after taking
account of adjustments to profit before taxation to accord with US GAAP (a) 2,713
=========
Ratio of earnings to fixed charges with adjustments to accord with US GAAP 4.07
=========
</TABLE>
- ---------------
(a) See Note 14 of Notes to Consolidated Financial Statements.
