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 September 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DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY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>
Page 2
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GROUP RESULTS JANUARY - SEPTEMBER 1999
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C>
1998 1999 1999 1998
1,591 2,848 Total replacement cost operating profit - $m 6,169 5,522
1,089 1,743 Replacement cost profit before exceptional items - $m 3,646 3,447
1,671 1,205 Replacement cost profit for the period - $m 2,085 4,091
1,579 1,848 Historical cost profit for the period - $m 3,307 3,211
8.2 9.6 Profit per Ordinary Share - cents 17.1 16.8
5.0 5.0 Dividends per Ordinary Share - cents 15.0 14.8
</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 (FRS 12)'. 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 $1,743 million for the three months ended
September 30, 1999, compared with $1,089 million for the equivalent period of
1998. These results included net special charges of $294 million ($212 million
after tax) for the three months ended September 30, 1999, and $67 million ($50
million after tax) for the equivalent period of 1998. The special charges in the
third quarter of 1999 were in respect of an asset write-down and non-recurring
charges principally relating to integration costs. After excluding these special
charges, the profit of $1,955 million for the three months ended September 30,
1999 represented an increase of 72% over the comparable result of 1998. This
increase reflected performance improvements and an increase in oil and natural
gas prices, and was achieved despite the adverse economic environment in the
downstream businesses where higher feedstock costs could not be fully passed on
to customers. Compared with the third quarter of 1998, performance improvements
contributed around $400 million, reflecting higher volumes and lower cash costs,
with the original BP Amoco merger benefit target of $2 billion per year before
tax now fully achieved.
For the nine months ended September 30, 1999, the replacement cost profit before
exceptional items was $3,646 million compared with $3,447 million for the
equivalent period of 1998. The result for the nine months ended September 30,
1999 included net special charges of $605 million ($437 million after tax)
compared with $225 million ($118 million after tax) for the same period in 1998.
The special charges in 1999 related mainly to integration costs and an asset
write-down. After adjusting to exclude these special items, the result for the
nine months ended September 30, 1999 was $4,083 million compared with $3,565
million in 1998. Performance improvements more than compensated for the adverse
net effect of the economic environment with the severe deterioration in margins
in the downstream businesses only partly offset by higher crude oil
realizations.
The historical cost profit for the three months ended September 30, 1999 was
$1,848 million including inventory holding gains of $643 million. For the
equivalent period of 1998 there was a profit of $1,579 million after inventory
holding losses of $92 million. The results for the third quarter of 1999
included net exceptional charges of $501 million ($538 million after tax) in
respect of restructuring costs and net losses on the sale of fixed assets and
businesses; those for the comparable period of 1998 included net exceptional
profits of $780 million ($582 million after tax) on the sale of fixed assets and
businesses.
<PAGE>
Page 3
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
For the nine months ended September 30, 1999 the historical cost profit was
$3,307 million including inventory holding gains of $1,222 million. This
compares with a profit of $3,211 million after inventory holding losses of $880
million for the equivalent period of 1998. Included in the results for the nine
months ended September 30, 1999 were net exceptional charges of $1,745 million
($1,561 million after tax) for restructuring costs and net losses 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 $858 million
($644 million after tax).
Taxation, other than production taxes, charged for the three months ended
September 30, 1999 was $738 million compared with $371 million in the equivalent
period last year. This included a tax charge of $37 million in respect of
exceptional items compared with $198 million for the third quarter of 1998. The
effective tax rate on replacement cost profit before exceptional items was 28%
for the three and nine months ended September 30, 1999.
Net cash inflow for the three months ended September 30, 1999 was $363 million,
compared with $684 million for the equivalent period of 1998. For the nine
months ended September 30, 1999, net cash outflow was $1,990 million, compared
with $811 million for the equivalent period of 1998.
Capital expenditure for the three months ended September 30, 1999 was $1.6
billion, a decrease of 35% compared with the same period in the previous year.
Capital expenditure for the nine months ended September 30, 1999 also
represented a decrease of 35% compared with the equivalent period of 1998. These
decreases reflect the increased focus in the capital program, which is on track
for the year's target of $7 billion. Divestment proceeds received in the three
months and the nine months ended September 30, 1999 amounted to $615 million and
$1,146 million, respectively.
Net debt at the quarter end was $14.8 billion. The ratio of net debt to net debt
plus equity was 25%. This is at the bottom of the Group's target range of 25-30%
for this ratio. Interest expense for the three months ended September 30, 1999
was $355 million compared with $313 million in the equivalent period of 1998.
The increase in interest expense resulted from higher debt and a lower level of
capitalized interest.
BP Amoco p.l.c. announced a third quarterly dividend for 1999 of 5 cents per
Ordinary Share. Holders of Ordinary Shares will receive 3.033 pence per share
and holders of American Depositary Receipts (ADRs) $0.30 per ADS share. The
dividend is payable on December 10, 1999 to shareholders on the register on
November 19, 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 December 10, 1999.
<PAGE>
Page 4
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 Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C>
1998 1999 1999 1998
732 2,240 Total replacement cost operating profit - $m 4,561 2,789
Results included:
216 141 Exploration expense - $m 437 657
Key Statistics:
11.59 19.17 Average prices : Crude oil and natural - $/bbl 14.68 12.46
realized by BP Amoco gas liquids
1.77 1.99 : Natural gas - $/mcf 1.87 1.93
2,029 2,047 Crude oil and liquids production (net of - mb/d 2,065 2,027
royalties)
5,344 5,917 Natural gas production (net of royalties) - mmcf/d 5,977 5,746
2,950 3,067 Total production (net of royalties) (a) - mboe/d 3,096 3,018
</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 September 30, 1999 was $2,382 million, after adjusting for special
charges of $142 million. The adjusted result was over three times the amount of
the equivalent period last year. Average oil realizations increased by around
$7.50 a barrel, while average natural gas realizations were up 22 cents per
thousand cubic feet. There were also significant underlying improvements
including cost savings, lower exploration expense and higher production. The
special charges for the three months ended September 30, 1999 comprised a $100
million write-down on Badami, Alaska and non-recurring costs, principally
relating to integration activities. There were no special charges in the
equivalent period of 1998.
Oil and gas production were up on a year ago by 1% and 11%, respectively. Oil
production in the UK increased with a significant contribution from the Eastern
Trough Area Project in the central North Sea and from Schiehallion, west of
Shetland. This increase, combined with the higher production from the Lower 48
states in the USA, more than offset natural declines in production in Alaska.
The higher gas production mainly reflected additional capacity in Trinidad.
Future levels of production will be affected by the program of divestments of
non-strategic assets started during the quarter.
The replacement cost operating profit for the nine months ended September 30,
1999 was $4,817 million after adjusting for special charges of $256 million.
This represented an increase of 63% over the replacement cost operating profit
of the equivalent period of 1998 with average oil realizations some $2 per
barrel higher. The increase in profit compared with the first nine months of
1998 reflected lower costs and increased production, and higher oil and natural
gas prices in the third quarter, which were partially offset by the depressed
prices of the earlier part of 1999. The special charges for the nine months
ended September 30, 1999 relate mainly to integration costs and an asset
write-down; the net special charges for the equivalent period of 1998, which
amounted to $158 million, comprised impairment charges offset by an insurance
claim receipt.
During the third quarter of 1999, the Canadian oil properties were sold. Shortly
after the quarter end arrangements were made to dispose of the Group's interest
in the Pedernales field in Venezuela, subject to approvals. Production from
these assets has averaged 74,000 barrels per day in 1999.
In October, it was announced that BP Amoco was purchasing all of the shares it
did not already own in ProGas, a major Canadian natural gas supply aggregator.
The deal is expected to close by the end of the year. During the quarter, the
group agreed to market the Provincial Crown Corporation's 45 million cubic feet
per day of natural gas production flowing from the Sable Offshore Energy Project
located offshore Nova Scotia, Canada.
<PAGE>
Page 5
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 Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C>
1998 1999 1999 1998
680 641 Total replacement cost operating profit - $m 1,547 2,058
1.16 1.30 Indicative global refining margin * - $/bbl 0.99 1.90
2,658 2,506 Refinery throughputs - mb/d 2,524 2,742
3,140 3,151 Marketing sales - mb/d 3,158 3,091
</TABLE>
* BP Amoco average
(b) Further operating information is shown on page 16.
Replacement cost operating profit for the three months ended September 30, 1999
was $662 million, after adjusting for special items of $21 million, principally
in respect of integration costs. This result was down 3% on a year ago,
reflecting the deteriorating environment. Rising product prices led to squeezed
marketing margins. Although there was a short recovery in August and September,
soft refining margins at the beginning and end of the quarter led to run cuts at
a number of refineries. In both refining and marketing, operating profits
continued to benefit significantly from cost reduction programs.
The adjusted result for the nine months ended September 30, 1999, at $1,618
million, represented a decrease of 21% on the same period of the previous year,
with the severe deterioration in the economic environment significantly offset
by performance improvements. Special charges amounted to $71 million for the
first nine months of 1999 and related principally to integration costs.
There were no special charges in the three months or the nine months ended
September 30, 1998.
In July, an agreement was signed with Primary Energy to develop, engineer and
construct a natural gas-fired co-generation facility at the Whiting refinery in
Indiana. The plant, which will generate 525 megawatts of power and substantial
steam production, is scheduled to be completed during the second quarter of
2001. Also during the quarter, BP Amoco and Caltex Australia created a joint
venture, Australasian Lubricants Manufacturing Company, to blend, package and
warehouse lubricants. Operations began on October 1.
<PAGE>
Page 6
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 Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C>
1998 1999 1999 1998
306 143 Total replacement cost operating profit - $m 547 975
689 630 Chemicals integrated margin - Dm/te 538 865
5,190 5,479 Production volumes - kte 16,137 15,095
</TABLE>
Chemicals' replacement cost operating profit for the three months ended
September 30, 1999 was $193 million, after adjusting for special charges of $50
million principally in respect of integration costs. This result was down 25%
from the previous quarter and 46% compared with the same quarter last year,
despite ongoing cost improvements across the chemicals portfolio. The market
environment continued to deteriorate for most products, driven by a combination
of rising feedstock prices and euro weakness. Both the three months and the nine
months ended September 30, 1998 were adversely affected by a special charge in
respect of several periodic and non-recurring items amounting to $50 million.
These included unscheduled plant shutdowns and settlement of several legal
disputes.
The adjusted result for the first nine months of 1999, at $667 million, was down
35% on a year ago, although the effect of the poor economic environment was
partly offset by improved operating performance.
Chemicals production in the three months ended September 30, 1999 was similar to
that of the previous quarter, with increased capacity offset by shutdowns.
Production was up 6% compared to a year ago, reflecting additional capacity and
debottleneckings.
During the quarter, BP Amoco sold its Plaskon electronic materials business,
located in the USA and Singapore, and announced an agreement to sell its Fibers
and Yarns business, located at several sites in south eastern USA. Progress also
continued on restructuring, with the decision to close the styrene unit at
Baglan Bay, and the announcement that European polybutene production will be
consolidated at the plant in Lavera, France.
<PAGE>
Page 7
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 Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C>
1998 1999 1999 1998
(127) (176) Replacement cost operating loss - $m (486) (300)
</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 for the three months ended September 30, 1999
was $95 million, after adjusting for special charges of $81 million principally
in respect of integration costs. The adjusted loss for the nine months ended
September 30, 1999 was $328 million, similar to the previous year's level.
During the quarter, BP Amoco acquired APEX, a solar electric company based in
Montpellier, France.
EXCEPTIONAL ITEMS
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C>
1998 1999 1999 1998
780 (317) Profit (loss) on sale of fixed assets and - $m (58) 858
businesses
- (184) Restructuring costs - $m (1,687) -
(198) (37) Taxation credit (charge) - $m 184 (214)
582 (538) Exceptional items after taxation (1,561) 644
</TABLE>
Exceptional items for the three months ended September 30, 1999 included the
profit of some $280 million on the sale of the Canadian oil properties and a
loss of some $730 million in respect of the sale of the Group's interest in the
Pedernales field, together with further restructuring, relating mainly to
severance.
OUTLOOK
The Group's overall outlook for the rest of the year remains broadly positive
with favourable indications for both oil supply and aggregate demand conditions.
Crude oil prices may remain reasonably stable if supply discipline is
maintained.
Natural gas prices are expected to firm during the northern hemisphere winter.
Downstream marketing margins are likely to recover from recent lows as markets
adjust to the higher oil price, though competition will remain intense. Refining
margins, however, are expected to remain under continuing pressure.
In Chemicals, margins in some businesses may begin to recover as oil prices
stabilize. However, surplus industry capacity and euro weakness will limit this
recovery in the near term.
<PAGE>
Page 8
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
SUBDIVISION OF ORDINARY SHARE CAPITAL
With effect from October 4, 1999, every one of BP Amoco's ordinary shares of
US$0.50 each was subdivided into two ordinary shares of US$0.25 each. At the
same time, one additional BP Amoco American Depository Share (BP Amoco ADS) was
issued to each holder of BP Amoco ADSs for each BP Amoco ADS held, thereby
maintaining the existing ratio of one BP Amoco ADS to six BP Amoco ordinary
shares.
THE PROPOSED COMBINATION OF BP AMOCO AND ARCO
On April 1, 1999 the Board of BP Amoco announced that it had reached agreement
on a proposed combination (the combination) with the Atlantic Richfield Company
(`ARCO') of Los Angeles.
The agreement relating to the proposed combination, approved by the Boards of
both BP Amoco and ARCO, provides that all common shareholders of ARCO, with the
exception of BP Amoco, ARCO or any of their subsidiaries, will receive 9.84 BP
Amoco ordinary shares of US$0.25 each in the form of BP Amoco ADSs or, at the
election of the shareholder, BP Amoco ordinary shares, in return for the
cancellation of each of their shares (other than the shares held by CH-Twenty
Holdings, LLC, a subsidiary of ARCO) (the Cancelled ARCO Shares). It also
provides for the issue to BP Amoco of new common shares equal in number to the
Cancelled ARCO Shares by a newly enlarged ARCO formed by a statutory merger of
Prairie Holdings, Inc. (a direct wholly owned subsidiary of BP Amoco) into and
with ARCO. Any right to a fraction of a BP Amoco ADS or an odd lot of less than
six BP Amoco ordinary shares will be satisfied by a cash payment. Both ARCO and
BP Amoco shareholders voted overwhelmingly in favour of the combination at
shareholders' meetings on August 30, 1999 and September 1, 1999, respectively.
BP Amoco and ARCO announced in early November 1999 that they had reached
provisional agreement with the Alaskan State Governor on a package of asset
disposals and other measures designed to secure Alaskan government acceptance
for the proposed combination of the two companies.
Subject to the completion of the combination, BP Amoco would sell 175,000
barrels of production per day together with associated infrastructure, 620,000
acres of state and federal exploration leases, and matching stakes in the
Trans-Alaska Pipeline System (TAPS).
Completion of the combination remains subject to regulatory approvals and the
satisfaction of other conditions. BP Amoco and ARCO are working towards
completion, which is expected by the year-end.
SUBSEQUENT EVENT
On November 11, 1999 BP Amoco announced that it had agreed to acquire for $500
million a significant part of Repsol-YPF's holding in Crescendo Resources, a
natural gas producer and processor in Texas and Oklahoma. BP Amoco already holds
41 percent of Crescendo Resources, with the remaining 59 percent currently held
by Repsol-YPF.
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 for 1998 filed with
the US Securities and Exchange Commission.
<PAGE>
Page 9
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
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 total cost of BP Amoco's Year 2000 program is estimated to be some $310
million, approximately $300 million of which is expected to be incurred by the
end of 1999. As at September 30, 1999, some $280 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.
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 essentially complete. At September 30,
1999 there was a very small amount of remediation dependent on planned plant
shutdowns and other remediation work consisting mainly of implementation of
package software releases still outstanding. Completion of this is scheduled by
the end of November 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.
<PAGE>
Page 10
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - concluded
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 have made use of our existing crisis
management, emergency response, and business continuity organizations, plans and
procedures in Year 2000 contingency planning. The development and testing of
contingency plans is substantially complete.
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.
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 November 8, 1999, BP Amoco p.l.c. announced a third quarterly dividend for
1999 of 5 cents per Ordinary Share of 25c (Ordinary Shares) amounting to $972
million in total. The record date for qualifying US resident holders of American
Depositary Receipts as well as holders of Ordinary Shares is November 19, 1999,
with payment to be made on December 10, 1999.
The dividend payable on December 10, 1999 entitles qualifying ADS shareholders
to a refund of the 1/9th UK tax credit (approximately $0.033) 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
$0.300, a gross dividend for tax purposes of $0.333 and a potential tax credit
of $0.033 per ADS.
A Dividend Reinvestment Plan was introduced with effect from the fourth
quarterly dividend in respect of 1998, whereby holders of Ordinary Shares can
elect to reinvest the net cash dividend in shares purchased on the London Stock
Exchange. This plan is not available to any person resident in the USA or
Canada, or in any jurisdiction outside the UK where such an offer requires
compliance by the Company with any governmental or regulatory procedures or any
similar formalities.
A dividend reinvestment facility is, however, available for holders of ADRs
through the Direct Access Plan or Morgan Guaranty Trust Company of New York.
Participants in the Dividend Reinvestment Plan or the dividend reinvestment
facility included in the US Direct Access Plan will receive the dividend in the
form of shares on December 10, 1999.
<PAGE>
Page 11
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 (a) 1999 1998 (a)
($ million, except per share amounts)
Turnover - Note 3 26,665 21,651 67,588 64,136
Less: joint ventures 4,707 4,305 11,972 11,665
--------- --------- --------- ---------
Group turnover 21,958 17,346 55,616 52,471
Replacement cost of sales 17,787 14,331 45,141 42,829
Production taxes - Note 4 292 170 649 509
--------- --------- --------- ---------
Gross profit 3,879 2,845 9,826 9,133
Distribution and administration expenses 1,353 1,499 4,458 4,555
Exploration expense - Note 5 141 216 437 657
--------- --------- --------- ---------
2,385 775 4,931 3,921
Other income 104 92 373 568
--------- --------- --------- ---------
Group replacement cost operating profit 2,489 867 5,304 4,489
Share of profits of joint ventures 203 213 474 635
Share of profits of associated undertakings 156 156 391 398
--------- --------- --------- ---------
Total replacement cost operating profit - Notes 6 and 7 2,848 1,591 6,169 5,522
(Loss) profit on sale of fixed assets and businesses - Note 8 (317) 780 (58) 858
Restructuring costs - Note 8 (184) - (1,687) -
--------- --------- --------- ---------
Replacement cost profit before interest and tax - Note 6 2,347 2,371 4,424 6,380
Inventory holding gains (losses) - Note 9 643 (92) 1,222 (880)
--------- --------- --------- ---------
Historical cost profit before interest and tax 2,990 2,279 5,646 5,500
Interest expense - Note 10 355 313 987 866
--------- --------- --------- ---------
Profit before taxation 2,635 1,966 4,659 4,634
Taxation - Note 11 738 371 1,267 1,377
--------- --------- --------- ---------
Profit after taxation 1,897 1,595 3,392 3,257
Minority shareholders' interest 49 16 85 46
========= ========= ========= =========
Profit for the period 1,848 1,579 3,307 3,211
========= ========= ========= =========
Earnings per Ordinary Share - cents (b)
Basic 9.6 8.2 17.1 16.8
Diluted 9.5 8.2 17.0 16.8
--------- --------- --------- ---------
Earnings per American depositary share - cents (b)
Basic 57.6 49.2 102.6 100.8
Diluted 57.0 49.2 102.0 100.8
--------- --------- --------- ---------
Average number of outstanding Ordinary Shares (millions) (c) 19,402 19,193 19,376 19,162
========= ========= ========= =========
</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.
(c) Average number of shares reflects the share split of October 4, 1999.
<PAGE>
Page 12
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
September 30, 1999 December 31, 1998 (a)
(Unaudited)
($ million)
Fixed assets
Intangible assets 3,637 3,037
Tangible assets 52,616 54,880
Investments 10,271 9,772
----------- ----------
66,524 67,689
Current assets
Inventories 4,827 3,642
Receivables 16,317 12,709
Investments 347 470
Cash at bank and in hand 536 405
---------- -----------
22,027 17,226
---------- -----------
Current liabilities - falling due within one year
Finance debt 4,160 2,837
Accounts payable and accrued liabilities 15,842 15,329
---------- -----------
20,002 18,166
---------- -----------
Net current liabilities 2,025 (940)
----------- ----------
Total assets less current liabilities 68,549 66,749
Noncurrent liabilities
Finance debt 11,511 10,918
Accounts payable and accrued liabilities 2,197 2,047
Provisions for liabilities and charges 10,322 10,100
---------- -----------
24,030 23,065
----------- ----------
Net assets 44,519 43,684
Minority shareholders' interest 1,152 1,072
=========== ==========
BP Amoco shareholders' interest (b) - Note 14 43,367 42,612
=========== ==========
Represented by:
Capital shares
Preference 21 21
Ordinary 4,869 4,842
Paid-in surplus 3,525 3,386
Retained earnings 34,255 33,666
Merger reserve 697 697
=========== ==========
43,367 42,612
=========== ==========
</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>
Page 13
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASHFLOWS
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Net cash inflow from operating activities 2,689 2,962 5,847 7,612
--------- --------- --------- ---------
Dividends from joint ventures 371 296 813 497
--------- --------- --------- ---------
Dividends from associated undertakings 25 97 168 287
--------- --------- --------- ---------
Servicing of finance and returns on investments
Interest received 33 52 115 171
Interest paid (209) (232) (806) (758)
Dividends received 8 15 28 26
Dividends paid to minority shareholders (49) (21) (145) (61)
--------- --------- --------- ---------
Net cash outflow from servicing of finance
and returns on investments (217) (186) (808) (622)
--------- --------- --------- ---------
Taxation
UK corporation tax (48) (60) (179) (187)
Overseas tax (400) (244) (462) (1,013)
--------- --------- --------- ---------
Tax paid (448) (304) (641) (1,200)
--------- --------- --------- ---------
Capital expenditure
Payments for fixed assets (1,473) (2,163) (4,666) (6,450)
Proceeds from the sale of fixed assets 419 120 858 700
--------- --------- --------- ---------
Net cash outflow for capital expenditure (1,054) (2,043) (3,808) (5,750)
--------- --------- --------- ---------
Acquisitions and disposals
Investments in associated undertakings (2) (163) (141) (383)
Acquisitions (4) (28) (49) (233)
Net investment in joint ventures (226) (61) (495) (33)
Proceeds from the sale of businesses 196 703 288 780
--------- --------- --------- ---------
Net cash (outflow) inflow for acquisitions and disposals (36) 451 (397) 131
--------- --------- --------- ---------
Equity dividends paid (967) (589) (3,164) (1,766)
========= ========= ========= =========
Net cash inflow (outflow) 363 684 (1,990) (811)
========= ========= ========= =========
Financing (Note 12) 227 1,037 (2,040) (376)
Management of liquid resources 55 (238) (106) (456)
Increase (decrease) in cash 81 (115) 156 21
========= ========= ========= =========
363 684 (1,990) (811)
========= ========= ========= =========
</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>
Page 14
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASHFLOWS - continued
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 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 2,990 2,279 5,646 5,500
Depreciation and amounts provided 1,197 1,122 3,593 3,796
Exploration expenditure written off 135 97 270 277
Share of profits of joint ventures and
associated undertakings + (568) (443) (1,307) (914)
Interest and other income (53) (72) (166) (207)
Loss (profit) loss on sale of fixed assets and businesses 308 (670) 102 (748)
Charge for provisions 144 75 623 222
Utilization of provisions (61) (16) (271) (180)
(Increase) decrease in stocks (586) 141 (1,190) 659
(Increase) decrease in debtors (350) 265 (2,138) 1,430
(Decrease) increase in creditors (467) 184 685 (2,223)
========= ========= ========= =========
Net cash inflow from operating activities 2,689 2,962 5,847 7,612
========= ========= ========= =========
Financing
Long-term borrowing (303) (217) (1,969) (1,778)
Repayments of long-term borrowing 603 235 1,954 1,115
Short-term borrowing (164) 921 (2,819) (615)
Repayments of short-term borrowing 143 116 1,012 412
--------- --------- --------- ---------
279 1,055 (1,822) (866)
Issue of ordinary share capital (52) (41) (218) (94)
Repurchase of ordinary share capital - 23 - 584
========= ========= ========= =========
Net cash outflow (inflow) from financing 227 1,037 (2,040) (376)
========= ========= ========= =========
- ---------------
+ Includes the following amounts of depreciation for
the BP/Mobil European JV 77 76 227 224
========= ========= ========= =========
</TABLE>
(a) Restated - for further 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.
<PAGE>
Page 15
BP AMOCO p.l.c. AND SUBSIDIARIES
CAPITAL EXPENDITURE AND ACQUISITIONS
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
By business
Exploration and Production
UK 135 447 582 1,323
Rest of Europe 44 44 57 135
USA 318 592 1,083 1,622
Rest of World 278 535 1,089 1,688
--------- --------- --------- ---------
775 1,618 2,811 4,768
--------- --------- --------- ---------
Refining and Marketing
UK 47 25 122 84
Rest of Europe 134 148 310 333
USA 151 228 435 617
Rest of World 67 90 177 226
--------- --------- --------- ---------
399 491 1,044 1,260
--------- --------- --------- ---------
Chemicals
UK 133 71 296 190
Rest of Europe 51 56 183 378
USA 65 123 212 327
Rest of World 70 53 147 166
--------- --------- --------- ---------
319 303 838 1,061
--------- --------- --------- ---------
Other businesses and corporate 118 55 226 443
========= ========= ========= =========
1,611 2,467 4,919 7,532
========= ========= ========= =========
By geograpical area
UK 355 552 1,075 1,869
Rest of Europe 234 252 557 889
USA 606 986 1,872 2,693
Rest of World 416 677 1,415 2,081
--------- --------- --------- ---------
1,611 2,467 4,919 7,532
========= ========= ========= =========
Includes the following amounts for the BP/Mobil
European joint venture 175 161 409 399
========= ========= ========= =========
</TABLE>
<PAGE>
Page 16
BP AMOCO p.l.c. AND SUBSIDIARIES
OPERATING INFORMATION
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
Average oil realizations - $/bbl*
UK 19.86 12.20 15.17 13.18
USA 18.18 11.25 14.02 12.30
Rest of World 19.32 11.18 14.80 11.71
BP Amoco average 19.17 11.59 14.68 12.46
Average natural gas realizations - $/mcf
UK 1.96 2.51 2.19 2.83
USA 2.37 1.72 1.97 1.81
Rest of World 1.59 1.58 1.54 1.69
BP Amoco average 1.99 1.77 1.87 1.93
Crude oil and natural gas liquids production
(thousand barrels per day), (net of royalties)
UK 564 528 572 499
Rest of Europe 100 89 101 106
USA 791 813 800 836
Rest of World 592 599 592 586
========= ========= ========= =========
Total crude oil and liquids production 2,047 2,029 2,065 2,027
========= ========= ========= =========
Natural gas production (million cubic feet per day)
UK 1,040 950 1,219 1,228
Rest of Europe 112 127 166 178
USA 2,359 2,288 2,391 2,384
Rest of World 2,406 1,979 2,201 1,956
========= ========= ========= =========
Total natural gas production 5,917 5,344 5,977 5,746
========= ========= ========= =========
Indicative global refining margins - $/bbl
North West Europe 1.18 1.07 0.74 1.87
USA 1.51 1.38 1.22 2.04
Singapore 1.14 0.88 1.07 1.65
BP Amoco average 1.30 1.16 0.99 1.90
Refinery throughputs (thousand barrels per day)
UK 245 271 268 296
Rest of Europe 532 553 538 544
USA 1,376 1,485 1,345 1,542
Rest of World 353 349 373 360
========= ========= ========= =========
2,506 2,658 2,524 2,742
========= ========= ========= =========
Oil sales volumes (thousand barrels per day)
Refined products
UK 236 265 235 259
Rest of Europe 787 752 786 755
USA 1,552 1,525 1,536 1,483
Rest of World 576 598 601 594
--------- --------- --------- ---------
Total marketing sales 3,151 3,140 3,158 3,091
Trading/supply sales 1,549 1,785 1,751 1,720
--------- --------- --------- ---------
Total refined product sales 4,700 4,925 4,909 4,811
Crude oil 5,883 4,675 4,668 4,226
========= ========= ========= =========
Total oil sales 10,583 9,600 9,577 9,037
========= ========= ========= =========
Chemicals production+ (thousand tonnes)
UK 914 981 2,830 2,862
Rest of Europe 1,475 1,442 4,391 4,056
USA 2,487 2,330 7,274 6,864
Rest of World 603 437 1,642 1,313
========= ========= ========= =========
Total production 5,479 5,190 16,137 15,095
========= ========= ========= =========
</TABLE>
* Crude oil and natural gas liquids
+ Includes BP Amoco share of associated undertakings and other interests
in production.
<PAGE>
Page 17
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 No12, 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 Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Exploration and Production 24 21 69 62
--------- --------- --------- ---------
Total replacement cost operating profit 24 21 69 62
Interest expense (33) (30) (96) (90)
========= ========= ========= =========
Decrease in profit for the period (9) (9) (27) (28)
========= ========= ========= =========
</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>
Page 18
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
3. Turnover
By business
Exploration and Production 6,301 4,086 15,177 13,163
Refining and Marketing 16,697 12,673 40,852 37,354
Chemicals 2,297 2,348 6,668 7,466
Other businesses and corporate 39 44 114 150
--------- --------- --------- ---------
25,334 19,151 62,811 58,133
Less: Sales between businesses 3,376 1,805 7,195 5,662
--------- --------- --------- ---------
Group excluding joint ventures 21,958 17,346 55,616 52,471
Sales of joint ventures 4,707 4,305 11,972 11,665
========= ========= ========= =========
26,665 21,651 67,588 64,136
========= ========= ========= =========
By geographical area
UK 8,139 5,812 19,331 17,276
Rest of Europe 1,561 1,452 4,219 4,516
USA 10,255 8,357 25,928 25,491
Rest of World 5,235 3,394 12,937 10,747
--------- --------- --------- ---------
25,190 19,015 62,415 58,030
Less: Sales between areas 3,232 1,669 6,799 5,559
========= ========= ========= =========
Group excluding joint ventures 21,958 17,346 55,616 52,471
========= ========= ========= =========
Sales of joint ventures
UK 1,155 861 2,738 2,645
Rest of Europe 4,428 3,974 10,945 10,722
USA 36 8 87 33
Rest of World 143 65 429 204
--------- --------- --------- ---------
5,762 4,908 14,199 13,604
Less: Sales between areas 1,055 603 2,227 1,939
========= ========= ========= =========
4,707 4,305 11,972 11,665
========= ========= ========= =========
4. Production taxes
UK petroleum revenue tax 72 10 154 43
Overseas production taxes 220 160 495 466
========= ========= ========= =========
292 170 649 509
========= ========= ========= =========
5. Exploration expense
Exploration and Production
UK 16 35 36 86
Rest of Europe - 35 35 75
USA 65 56 115 165
Rest of World 60 90 251 331
========= ========= ========= =========
141 216 437 657
========= ========= ========= =========
</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>
Page 19
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 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 677 338 1,461 1,328
Rest of Europe 207 69 437 303
USA 600 178 1,223 1,007
Rest of World 756 147 1,440 151
--------- --------- --------- ---------
2,240 732 4,561 2,789
--------- --------- --------- ---------
Refining and Marketing
UK 102 103 147 248
Rest of Europe 91 188 249 464
USA 305 317 750 958
Rest of World 143 72 401 388
--------- --------- --------- ---------
641 680 1,547 2,058
--------- --------- --------- ---------
Chemicals
UK (1) - 15 147
Rest of Europe 8 118 90 260
USA 124 158 386 545
Rest of World 12 30 56 23
--------- --------- --------- ---------
143 306 547 975
--------- --------- --------- ---------
Other businesses and corporate (176) (127) (486) (300)
========= ========= ========= =========
2,848 1,591 6,169 5,522
========= ========= ========= =========
By geographical area
UK 668 379 1,412 1,602
Rest of Europe 350 386 823 1,031
USA 930 559 2,041 2,257
Rest of World 900 267 1,893 632
--------- --------- --------- ---------
2,848 1,591 6,169 5,522
========= ========= ========= =========
Includes the following amounts for joint
ventures and associated undertakings 359 369 865 1,033
========= ========= ========= =========
8. Analysis of exceptional items
Profit(loss)on sale of fixed assets
and businesses
Exploration and Production (419) 272 (420) 351
Refining and Marketing 12 422 115 417
Chemicals 89 90 253 90
Other businesses and corporate 1 (4) (6) -
--------- --------- --------- ---------
(317) 780 (58) 858
Restructuring costs (184) - (1,687) -
--------- --------- --------- ---------
Total exceptional items before taxation (501) 780 (1,745) 858
--------- --------- --------- ---------
Includes the following amounts for joint
ventures and associated undertakings (11) 110 36 110
========= ========= ========= =========
</TABLE>
<PAGE>
Page 20
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
8. Analysis of exceptional items - continued
During the three months and the nine months ended September 30, 1999, BP
Amoco recognized exceptional charges before tax of $184 million and $1,687
million, respectively, for restructuring costs following the merger of BP
and Amoco at the end of 1998. Most of these costs relate to the Group's US
operations. The greater part of the costs incurred in the three months
ended September 30, 1999 related to employee severance. Of the costs
incurred in the nine months ended September 30, 1999, some $959 million
related to employee severance and $385 million to property rationalization.
Cash outlays in respect of these exceptional charges amounted to
approximately $850 million in the nine months ended September 30, 1999. In
the three months ended September 30, 1999 approximately 2,100 employees
left the Group. During the nine months ended September 30, 1999
approximately 14,700 employees were notified of the termination of their
employment and 12,900 of these left. Most of these were exploration and
production staff, mainly in Houston, Texas, and business head office and
corporate staff in Chicago, Illinois, and Cleveland, Ohio.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
9. Inventory holding gains (losses)
Exploration and Production (3) 6 (13) (10)
Refining and Marketing 582 (31) 1,158 (763)
Chemicals 64 (67) 77 (107)
--------- --------- --------- ---------
643 (92) 1,222 (880)
========= ========= ========= =========
Includes the following amounts for joint ventures
and associated undertakings 220 (36) 406 (229)
========= ========= ========= =========
10. Interest expense
Group interest payable 285 259 784 763
Capitalized (7) (20) (33) (104)
--------- --------- --------- ---------
278 239 751 659
Joint ventures 13 7 44 40
Associated undertakings 31 37 96 77
Unwinding of discount on provisions (Note 2) 33 30 96 90
========= ========= ========= =========
355 313 987 866
========= ========= ========= =========
11. Charge for taxation
United Kingdom 165 128 353 417
Overseas 573 243 914 960
--------- --------- --------- ---------
738 371 1,267 1,377
========= ========= ========= =========
Includes the following amounts for joint ventures
and associated undertakings 25 58 75 129
========= ========= ========= =========
</TABLE>
<PAGE>
Page 21
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
12. Analysis of changes in net debt Opening balance
Finance debt 15,850 14,779 13,755 12,877
Less: Cash 467 472 405 355
Current asset investments 304 847 470 1,067
--------- --------- --------- ---------
Opening net debt 15,079 13,460 12,880 11,455
--------- --------- --------- ---------
Closing balance
Finance debt 15,671 13,759 15,671 13,759
Less: Cash 536 375 536 375
Current asset investments 347 612 347 612
--------- --------- --------- ---------
Closing net debt 14,788 12,772 14,788 12,772
========= ========= ========= =========
Decrease (increase) in net debt 291 688 (1,908) (1,317)
========= ========= ========= =========
Movement in cash/bank overdrafts 81 (115) 156 21
Increase (decrease) in current asset investments 55 (238) (106) (456)
Net cash outflow (inflow) from financing
(excluding share capital) 279 1,055 (1,822) (866)
Other movements (108) (8) (115) (17)
--------- --------- --------- ---------
Movements in net debt before exchange effects 307 694 (1,887) (1,318)
Exchange adjustments (16) (6) (21) 1
========= ========= ========= =========
Decrease (increase) in net debt 291 688 (1,908) (1,317)
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
13. Movement in BP Amoco shareholders' interest
<S> <C>
$
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 3,307
Distribution to shareholders (2,912)
Currency translation differences (175)
Share dividend plan 311
Employee share schemes 224
=========
Balance at September 30, 1999 43,367
=========
</TABLE>
<PAGE>
Page 22
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 Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Profit as reported in the consolidated
statement of income 1,848 1,579 3,307 3,211
Adjustments
---------- ---------- ---------- ----------
Depreciation charge 9 (23) 2 (53)
Deferred taxation (407) (124) (393) (210)
Interest expense 33 30 96 90
Onerous property leases - - 156 -
Decommissioning expense (43) (32) (126) (96)
Severance - - (32) -
Other 5 5 14 7
---------- ---------- ---------- ----------
(403) (144) (283) (262)
========= ========= ========= =========
Profit for the period as adjusted to accord with US GAAP 1,445 1,435 3,024 2,949
========= ========= ========= =========
Profit for the period as adjusted:
Per Ordinary Share - cents
Basic 7.4 7.5 15.6 15.4
Diluted 7.4 7.4 15.5 15.3
========= ========= ========= =========
Per American Depositary Share - cents (a)
Basic 44.4 45.0 93.6 92.4
Diluted 44.4 44.4 93.0 91.8
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
BP Amoco shareholders' interest September 30, 1999 December 31, 1998 (b)
(Unaudited)
($ million)
BP Amoco shareholders' interest as reported
in the consolidated balance sheet 43,367 42,612
Adjustments:
---------- ----------
Fixed assets 1,114 1,112
Deferred taxation (6,148) (5,776)
Ordinary shares held for further awards to employees (432) (489)
Sale and leaseback of Chicago office building (413) (413)
Dividend announced 972 968
Pension liability adjustment (143) (143)
Onerous property leases 149 -
Decommissioning and environmental provisions (379) (349)
Severance costs - 32
Other (191) (220)
---------- ----------
(5,471) (5,278)
========= =========
BP Amoco shareholders' interest as adjusted
to accord with US GAAP 37,896 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>
Page 23
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
14. US generally accepted accounting principles - continued
The consolidated statement of cash flows presented in accordance with SFAS
95 is as follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Operating activities
Profit after taxation 1,897 1,595 3,392 3,257
Adjustments to reconcile profits after tax to
net cash provided by operating activities
Depreciation and amounts provided 1,197 1,122 3,593 3,796
Exploration expense 135 97 270 277
Share of (profit) loss of joint ventures and
associates less dividends received (172) (50) (326) (130)
Loss (profit) on sale of businesses and fixed assets 308 (670) 102 (748)
Working capital movement (see analysis below) (1,261) 173 (2,683) (361)
Other 464 370 941 415
--------- --------- --------- ---------
Net cash provided by operating activities 2,568 2,637 5,289 6,506
--------- --------- --------- ---------
Investing activities
Capital expenditures (1,566) (1,918) (4,432) (6,316)
Acquisitions, net of cash acquired (4) (28) (49) (233)
Investment in associated undertakings (2) (163) (141) (383)
Net investment in joint ventures (226) (61) (495) (33)
Proceeds from disposal of assets 615 823 1,146 1,480
--------- --------- --------- ---------
Net cash used in investing activities (1,183) (1,347) (3,971) (5,485)
--------- --------- --------- ---------
Financing activities
Proceeds from shares issued (repurchased) 52 18 218 (490)
Proceeds from long-term financing 303 217 1,969 1,778
Repayments of long-term financing (603) (235) (1,954) (1,115)
Net increase (decrease) in short-term debt 21 (1,037) 1,807 203
Dividends paid - BP Amoco (967) (589) (3,164) (1,766)
- Minority shareholders (49) (21) (145) (61)
--------- --------- --------- ---------
Net cash used in financing activities (1,243) (1,647) (1,269) (1,451)
--------- --------- --------- ---------
Currency translation differences relating to
cash and cash equivalents (27) 21 (42) 2
--------- --------- --------- ---------
(Decrease) increase in cash and cash equivalents 115 (336) 7 (428)
--------- --------- --------- ---------
Cash and cash equivalents at beginning of period 686 1,246 794 1,338
--------- --------- --------- ---------
Cash and cash equivalents at end of period 801 910 801 910
--------- --------- --------- ---------
Analysis of working capital movement
Decrease (increase) in inventories (586) 141 (1,190) 659
Decrease (increase) in receivables (549) 285 (2,069) 1,561
Increase (decrease) in current liabilities
(excluding finance debt) (126) (253) 576 (2,581)
========= ========= ========= =========
Total working capital (1,261) 173 (2,683) (361)
========= ========= ========= =========
</TABLE>
<PAGE>
Page 24
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 Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
(shares million)
Weighted average number of ordinary shares 19,402 19,193 19,376 19,162
Ordinary shares issuable under employee share schemes 135 93 109 95
========= ========= ========= =========
19,537 19,286 19,485 19,257
========= ========= ========= =========
</TABLE>
Comprehensive income
The components of comprehensive income, net of related tax are as follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
($ million)
Profit for the period as adjusted to accord with US GAAP 1,445 1,435 3,024 2,949
Currency translation differences 841 681 (175) 590
Pension liability - - - -
========= ========= ========= =========
Comprehensive income 2,286 2,116 2,849 3,539
========= ========= ========= =========
</TABLE>
Accumulated other comprehensive income at September 30, 1999 and December
31, 1998 was $(771) million and $(596) million, respectively.
<PAGE>
Page 25
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
14. US generally accepted accounting principles - continued
Accounting for associated undertakings and joint ventures
Under the provisions of UK Financial Reporting Standard No.9 `Associates
and Joint Ventures' (`FRS9'), the Company includes its share of the results
of associated undertakings and joint ventures (JVs) within various captions
in the consolidated statement of income. Under US GAAP, the Company's share
of the after tax profit or loss of associated undertakings and joint
ventures would be recognized as a single amount. The following summarizes
the reclassifications necessary to accord with US GAAP.
<TABLE>
<CAPTION>
Three months ended September 30, 1999
(Unaudited)
--------------------------------------------------------------
<S> <C> <C> <C>
As US GAAP
Reported Reclassification Presentation
--------------------------------------------------------------
($ million)
Consolidated statement of income
Other income 104 499 603
Share of profits of JVs and associated undertakings 359 (359) -
Exceptional items before taxation (501) 11 (490)
Inventory holding gains (losses) 643 (220) 423
Interest expense 355 (44) 311
Taxation 738 (25) 713
Profit for the period 1,848 - 1,848
Nine months ended September 30, 1999
(Unaudited)
--------------------------------------------------------------
As US GAAP
Reported Reclassification Presentation
--------------------------------------------------------------
($ million)
Consolidated statement of income
Other income 373 1,092 1,465
Share of profits of JVs and associated undertakings 865 (865) -
Exceptional items before taxation (1,745) (36) (1,781)
Inventory holding gains (losses) 1,222 (406) 816
Interest expense 987 (140) 847
Taxation 1,267 (75) 1,192
Profit for the period 3,307 - 3,307
Three months ended September 30, 1998
(Unaudited)
--------------------------------------------------------------
As US GAAP
Reported Reclassification Presentation
--------------------------------------------------------------
($ million)
Consolidated statement of income
Other income 92 341 433
Share of profits of JVs and associated undertakings 369 (369) -
Exceptional items before taxation 780 (110) 670
Inventory holding gains (losses) (92) 36 (56)
Interest expense 313 (44) 269
Taxation 371 (58) 313
Profit for the period 1,579 - 1,579
Nine months ended September 30, 1998
(Unaudited)
--------------------------------------------------------------
As US GAAP
Reported Reclassification Presentation
--------------------------------------------------------------
($ million)
Consolidated statement of income
Other income 568 668 1,236
Share of profits of JVs and associated undertakings 1,033 (1,033) -
Exceptional items before taxation 858 (110) 748
Inventory holding gains (losses) (880) 229 (651)
Interest expense 866 (117) 749
Taxation 1,377 (129) 1,248
Profit for the period 3,211 - 3,211
</TABLE>
<PAGE>
Page 26
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
positions 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>
Page 27
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
BP America Inc. (a)(b) ($ million)
Sales and other operating revenue 4,232 3,301 10,348 9,647
Gross profit (c) 718 483 1,694 1,418
Profit for the period (e)(f) 131 429 249 466
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 13,769 13,783
Current assets 4,415 3,002
========= =========
Total assets 18,184 16,785
========= =========
Current liabilities 5,663 5,172
Noncurrent liabilities 6,421 5,759
Shareholders' interest 6,100 5,854
========= =========
Total liabilities and shareholders' interest 18,184 16,785
========= =========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
The Standard Oil Company (a)(b) ($ million)
Sales and other operating revenue 4,104 3,202 10,064 9,353
Gross profit (c) 652 431 1,564 1,245
Profit for the period (e)(f)(g) 205 437 517 551
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 12,494 12,387
Current assets 6,119 4,547
========= =========
Total assets 18,613 16,934
========= =========
Current liabilities 4,071 2,772
Noncurrent liabilities 5,428 5,562
Shareholders' interest 9,114 8,600
========= =========
Total liabilities and shareholders' interest 18,613 16,934
========= =========
</TABLE>
<PAGE>
Page 28
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - continued
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
BP Pipelines (Alaska) Inc. (a)(b) ($ million)
Sales and other operating revenue 131 124 359 411
Gross profit (c) 54 46 149 179
Profit for the period (a) 35 28 92 82
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 1,335 1,362
Current assets 935 803
========= =========
Total assets 2,270 2,165
========= =========
Current liabilities 152 152
Noncurrent liabilities 1,015 994
Shareholders' interest 1,103 1,019
========= =========
Total liabilities and shareholders' interest 2,270 2,165
========= =========
</TABLE>
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
1999 1998 1999 1998
BP Exploration (Alaska) Inc. (a)(b) ($ million)
Sales and other operating revenue 2,248 1,458 5,279 4,579
Gross profit (c) 116 (4) 229 9
Profit for the period (e)(f)(g) 6 54 (4) 17
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, 1999 December 31, 1998 (d)
(Unaudited)
($ million)
Fixed and other assets 10,078 9,267
Current assets 2,393 2,273
========= =========
Total assets 12,471 11,540
========= =========
Current liabilities 1,546 628
Noncurrent liabilities 1,586 1,582
Shareholders' interest 9,339 9,330
========= =========
Total liabilities and shareholders' interest 12,471 11,540
========= =========
</TABLE>
<PAGE>
Page 29
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
September 30, 1999 for BP America Inc., The Standard Oil Company and BP
Exploration (Alaska) Inc. was decreased by $4 million and the profit for
the nine months ended September 30, 1999 for BP America Inc., The Standard
Oil Company and BP Exploration (Alaska) Inc. was decreased by $17 million,
$17 million and $4 million respectively. 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 September 30, 1998 for BP America Inc. and The Standard Oil Company
was decreased by $3 million and (iii) profit for the nine months ended
September 30, 1998 for BP America Inc., The Standard Oil Company and BP
Exploration (Alaska) Inc. was decreased by $29 million, $29 million and $12
million respectively.
(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 the three months and nine months ended September 30, 1999 for BP
America Inc., The Standard Oil Company and BP Exploration (Alaska) Inc.
includes a pretax charge of $100 million relating to the write down of the
investment in the Badami oilfield.
(f) Profit for the three months ended September 30, 1999 for The Standard Oil
Company and BP Exploration (Alaska) Inc. includes restructuring costs (Note
8) of $26 million and $13 million respectively. Profit (loss) for the nine
months ended September 30, 1999 for BP America Inc., The Standard Oil
Company and BP Exploration (Alaska) Inc. includes restructuring charges of
$244 million, $172 million and $48 million respectively
(g) 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 transfers, profit for the
three months ended September 30, 1998 for The Standard Oil Company includes
a tax charge of $30 million, and profit for the nine months ended September
30, 1998 for The Standard Oil Company, BP Pipelines (Alaska) Inc. and BP
Exploration (Alaska) Inc. includes a tax charge of $79 million, $21 million
and $28 million respectively.
<PAGE>
Page 30
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP AMOCO p.l.c.
(Registrant)
Dated: November 18, 1999 By: /s/ P.J. CLAYTON
Deputy Company Secretary
<PAGE>
Page 31
Exhibit 1
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - concluded
<TABLE>
<CAPTION>
<S> <C>
Nine months ended
September 30, 1999
($ million, except ratios)
Profit before taxation 4,659
Group's share of income in excess of dividends
of joint ventures and associated undertakings (186)
Captalized interest (33)
--------
Profit as adjusted 4,440
--------
Fixed charges:
Interest net of interest expense of joint ventures and
associated undertakings and unwinding of discount 751
Rental expense representative of interest 229
Captalized interest 33
--------
1,013
--------
Total adjusted earnings available for payment of fixed charges 5,453
========
Ratio of earnings to fixed charges 5.38
========
Total adjusted earnings available for payment of fixed charges, after taking
account of adjustments to profit before taxation to accord with US GAAP (a) 5,563
========
Ratio of earnings to fixed charges with adjustments to accord with US GAAP 5.49
========
</TABLE>
- ---------------
(a) See Note 14 of Notes to Consolidated Financial Statements.
