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<PAGE> 1
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 March 31, 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. 333-9568) 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DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY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.
- 1 -
<PAGE> 2
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GROUP RESULTS JANUARY - MARCH 1999
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
<S> <C> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 1,246 1,999
REPLACEMENT COST PROFIT BEFORE EXCEPTIONAL ITEMS - $m 677 1,279
REPLACEMENT COST (LOSS) PROFIT FOR THE PERIOD - $m (183) 1,329
HISTORICAL COST (LOSS) PROFIT FOR THE PERIOD - $m (176) 640
(LOSS) PROFIT PER ORDINARY SHARE - cents (2) 7
DIVIDENDS PER ORDINARY SHARE - cents 10.0 9.5
</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 filed with the Securities
and Exchange Commission in BP Amoco's Annual Report on Form 20-F for the year
ended December 31, 1998.
Effective January 1, 1999, the Group adopted UK Financial Reporting Standard FRS
12 'Provisions, Contingent Liabilities and Contingent Assets'. 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 $677 million for the three months ended March 31,
1999, compared with $1,279 million for the equivalent period of 1998. These
results included special charges of $114 million ($84 million after tax) for the
first three months of 1999, and $nil for the first quarter of 1998. The special
items in the first quarter of 1999 were in respect of merger integration costs.
After excluding these special items, the result of the first three months of
1999 was 41% below that of the equivalent quarter of 1998. The decrease
reflected a substantial deterioration in oil prices and downstream and chemicals
margins. Underlying performance improvements for the quarter were on target and
some benefit from merger integration contributed to the quarter's result. Lower
cash costs contributed $200 million and there were higher volumes in all
businesses compared with the first quarter of 1998.
The historical cost result for the three months ended March 31, 1999, was a loss
of $176 million including inventory holding gains of $7 million. For the
equivalent period of 1998, there was a profit of $640 million after inventory
holding losses of $689 million. The results for the first quarter of 1999
included net exceptional charges of $1,058 million ($860 million after tax) for
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 $66
million ($50 million after tax).
Net taxation charged for the three months ended March 31, 1999, other than
production taxes, was $56 million compared with $143 million in the previous
quarter and $453 million in the equivalent quarter last year. This included a
tax credit of $198 million in respect of exceptional items, compared with $16
million in the previous quarter and a charge of $16 million for the equivalent
quarter of 1998. The effective tax rate on replacement cost profit, before
exceptional items, was 27% for the three months ended March 31, 1999 compared
with 25% a year ago, when there was tax relief on stock holding losses.
Net cash outflow for the three months ended March 31, 1999 was $1.2 billion,
similar to that of a year ago. Lower operating cash flow was partially offset by
reduced net capital expenditure and tax payments.
- 2 -
<PAGE> 3
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
Capital expenditure and acquisitions was $1.5 billion for the three months ended
March 31, 1999 compared with $2.7 billion for the same period last year,
reflecting the increased focus in the capital investment program.
Capital expenditure net of divestments was $1.3 billion.
Net debt at the quarter-end was $13.9 billion, an increase of $1.1 billion in
the quarter. The ratio of net debt to net debt plus equity was 24.9%. Interest
expense was $304 million compared with $307 million in the previous quarter and
$264 million in the equivalent quarter of the previous year.
BP Amoco p.l.c. announced a first quarterly dividend for 1999 of 10 cents per
ordinary share. Holders of ordinary shares will receive 6.138 pence per share
and holders of American Depositary Receipts (ADRs) $0.60 per ADS share. The
dividend was paid on June 10, 1999 to shareholders on the register on May 21,
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 June 10, 1999.
- 3 -
<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
MARCH 31
(UNAUDITED)
1999 1998
<S> <C> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 818 1,221
RESULTS INCLUDED:
Exploration expense - $m 172 220
KEY STATISTICS:
Average prices : North Sea - $/bbl 11.1 14.4
realized by BP : Alaskan North Slope (ANS) - $/bbl 9.7 14.5
: US natural gas - $/mcf 1.6 1.8
Oil production (net of royalties) - mb/d 2,099 2,025
Natural gas production (net of royalties) - mmcf/d 6,072 6,128
Total production (net of royalties) (a) - mboe/d 3,146 3,082
</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 13.
Exploration and Production's replacement cost operating profit for the first
three months of 1999 was $904 million, after adjusting for special charges of
$86 million. This adjusted result was down 26% from a year ago, reflecting lower
oil and gas prices. North Sea and ANS oil prices were down by over $3 and nearly
$5 a barrel, respectively. US gas prices have also fallen by some 20 cents per
thousand cubic feet. These external environmental factors were significantly
offset by lower costs, reflecting the savings instigated last year in response
to the low oil price and reductions resulting from the rationalization decisions
made following the merger. Exploration expenditure was lower, following the
refocusing of our exploration effort on the high-graded areas of the portfolio
after the merger.
Overall production for the quarter was up from a year ago. There was a
significant contribution from the Eastern Trough Area Project in the central
North Sea, commissioned in July last year. The increase more than offset the
decline at the mature fields in Alaska.
In March, BP Amoco, in our 50/50 joint venture with the Egyptian General
Petroleum Company, signed a new concession agreement with the Egyptian
Government under which we will invest some $450 million over the next six years
to maintain production and prolong the life of the fields in the Gulf of Suez.
Also in March, production began at the Ursa field (BP Amoco 23%) in the deep
water Gulf of Mexico.
North American natural gas distribution and marketing performed strongly in the
quarter. In April, the first cargo of liquefied natural gas (LNG) was loaded
from the Atlantic LNG operation in Trinidad (BP Amoco 34%), for shipment to
Spain.
- 4 -
<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
MARCH 31
(UNAUDITED)
1999 1998
<S> <C> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 346 539
Indicative global refining margin - $/bbl 0.8 2.2
Refinery throughputs - mb/d 2,494 2,764
Marketing sales - mb/d 3,141 3,031
</TABLE>
(a) Further operating information is shown on page 13.
Replacement cost operating profit for the first three months of 1999 was $363
million, after adjusting for special charges of $17 million. This result
reflected higher marketing volumes and lower costs which provided some offset to
the significantly lower refining margins and pressure on marketing margins
compared with a year ago, when the result was $539 million.
BP Amoco integration made good progress during the quarter. New integrated
business units are now in place and significant progress has been made towards
achieving cost savings. The US Federal Trade Commission mandated sale of certain
downstream assets in the USA is on track for completion by the end of June 1999.
CHEMICALS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
<S> <C> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 206 346
Chemicals integrated margin - DM/te 638 1,085
Production volumes+ - kte 5,143 4,817
</TABLE>
+ Includes BP Amoco share of associated undertakings and other interests in
production.
Chemicals' replacement cost operating profit for the first three months of 1999
of $217 million, after adjusting for special charges of $11 million, was 74%
higher than the previous quarter's result of $125 million. The improvement in
the face of continued market weakness was the result of higher volumes and a
lower level of maintenance shutdowns. The adjusted result for the first quarter
of 1999 was 37% lower than that of the equivalent period of 1998, reflecting the
decline in margins over the last year. Volumes were up 7% versus a year ago,
providing some offset to the downturn in the environment.
During the quarter, BP Amoco authorized the construction of a new 250 ktepa
chemicals additives plant in Alberta, Canada. This plant is scheduled to come on
stream in mid-2001. Also during the quarter, a 150 ktepa acetic acid plant near
Chongqing, China was opened (BP Amoco 51%), the expansion of catalyst production
capabilities at the Green Lake, Texas facility was authorized and construction
of a butanediol plant in Lima, Ohio commenced.
- 5 -
<PAGE> 6
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
MARCH 31
(UNAUDITED)
1999 1998
<S> <C> <C> <C>
REPLACEMENT COST OPERATING LOSS - $m (124) (107)
</TABLE>
Other Businesses and Corporate comprises comprises Finance, Solar, the Group's
coal asset, interest income and costs relating to corporate activities
worldwide. In April, BP Amoco announced that it had acquired from Enron
Corporation the 50% of Solarex it did not already own.
EXCEPTIONAL ITEMS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
<S> <C> <C> <C>
Profit on sale of fixed assets and businesses - $m 97 66
Restructuring costs - $m (1,155) -
Taxation credit (charge) - $m 198 (16)
------ ----
EXCEPTIONAL ITEMS AFTER TAXATION - $m (860) 50
------ ----
</TABLE>
Exceptional items include the profit on sale of fixed assets and businesses
which, in the first quarter, included the sale of the Verdugt acid salts
business, and the divestment of the BP/Mobil JV's retail network in Hungary.
The major components of restructuring relate to severance of $722 million and
property rationalization of $370 million, both of which are a result of the
merger.
OUTLOOK
Crude oil prices have risen from the lows experienced in the first quarter,
reflecting market reaction to production cut-backs by OPEC. Prices are likely to
remain higher than those of the first quarter of 1999 if there is continued
compliance with lower production levels.
Natural gas prices are likely to fluctuate reflecting normal seasonal trends.
Downstream, margins are likely to remain under pressure.
In Chemicals, pressure on margins and volumes is expected to continue for some
time, caused by a combination of new industry capacity coming on stream and
weaker demand.
PROPOSED COMBINATION WITH THE ATLANTIC RICHFIELD COMPANY
On April 1, 1999 BP Amoco announced that it had reached agreement to combine
with the Atlantic Richfield Company (ARCO) of Los Angeles. The all-share
transaction, 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. 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. BP Amoco's report on Form 6-K,
dated April 1, 1999, filed with the Securities and Exchange Commission contains
additional information regarding this announcement.
- 6 -
<PAGE> 7
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
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 and margins 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 and margins
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 March 31, 1999, some $240
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.
We have finished the global inventory and risk analysis work, and a substantial
part of the remediation and testing effort is also 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.
- 7 -
<PAGE> 8
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONCLUDED
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 existing Crisis
Management, Emergency Response, and Business Continuity organizations, plans and
procedures in Year 2000 contingency planning.
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 its 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 May 11, 1999, BP Amoco p.l.c. announced a first 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 was May 21, 1999 with
payment made on June 10, 1999.
The dividend paid on June 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 that currently the tax credit would raise the
value of the dividend from $0.600 to $0.667 but the withholding tax would reduce
it to $0.600 per ADS.
A Dividend Reinvestment Plan was introduced with effect from the fourth
quarterly 1998 dividend, whereby holders of Ordinary Shares can elect to
reinvest the net cash dividend in shares purchased on the London Stock Exchange.
This plan is not available to any person resident in the USA or Canada, or in
any jurisdiction outside the UK where such an offer requires compliance by the
Company with any governmental or regulatory procedures or any similar
formalities.
A dividend reinvestment facility is, however, available for holders of ADRs
through the Direct Access Plan of Morgan Guaranty Trust Company of New York.
Participants in the Dividend Reinvestment Plan or the dividend reinvestment
facility included in the US Direct Access Plan received the dividend in the form
of shares on June 10, 1999.
- 8 -
<PAGE> 9
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998(a)
($ million)
<S> <C> <C>
Turnover - Note 3 17,984 21,516
Less: Joint ventures 3,342 3,653
------- -------
Group turnover 14,642 17,863
Replacement cost of sales 11,911 14,395
Production taxes - Note 4 142 190
------- -------
Gross profit 2,589 3,278
Distribution and administration expenses 1,536 1,581
Exploration expense - Note 5 172 220
------- -------
881 1,477
Other income 105 167
------- -------
Group replacement cost operating profit 986 1,644
Share of profits of joint ventures 131 217
Share of profits of associated undertakings 129 138
------- -------
Total replacement cost operating profit - Notes 6 and 7 1,246 1,999
Profit on sale of fixed assets and businesses - Note 8 97 66
Restructuring costs (1,155) --
------- -------
Replacement cost profit before interest and tax - Note 6 188 2,065
Inventory holding gains (losses) - Note 9 7 (689)
------- -------
Historical cost profit before interest and tax 195 1,376
Interest expense - Note 10 304 264
------- -------
(Loss) profit before taxation (109) 1,112
Taxation - Note 11 56 453
------- -------
(Loss) profit after taxation (165) 659
Minority shareholders' interest 11 19
------- -------
(Loss) profit for the period (176) 640
======= =======
(Loss) profit per Ordinary Share - cents (b)
Basic (2) 7
Diluted (2) 7
------- -------
(Loss) profit per American Depositary Share - cents (b)
Basic (12) 42
Diluted (12) 42
------- -------
Average number of outstanding Ordinary Shares (millions) 9,669 9,573
======= =======
</TABLE>
- ----------
(a) Restated - for further information see Note 2.
(b) A summary of the material adjustments to (loss) 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 15.
- 9 -
<PAGE> 10
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998 (a) (b)
(UNAUDITED)
($ million)
<S> <C> <C> <C> <C>
Fixed assets
Intangible assets 3,310 3,037
Tangible assets 53,947 54,880
Investments 9,742 9,772
------- -------
66,999 67,689
Current assets
Inventories 3,616 3,642
Receivables 13,513 12,709
Investments 305 470
Cash at bank and in hand 270 405
------- -------
17,704 17,226
------- -------
Current liabilities - falling due within one year
Finance debt 3,789 2,837
Accounts payable and accrued liabilities 15,633 15,329
------- -------
19,422 18,166
------- -------
Net current liabilities (1,718) (940)
------- -------
TOTAL ASSETS LESS CURRENT LIABILITIES 65,281 66,749
Noncurrent liabilities
Finance debt 10,721 10,918
Accounts payable and accrued liabilities 2,532 2,047
Provisions for liabilities and charges 9,918 10,100
------- -------
23,171 23,065
------- -------
NET ASSETS 42,110 43,684
Minority shareholders' interest 1,038 1,072
------- -------
BP AMOCO SHAREHOLDERS' INTEREST (b) - Note 14 41,072 42,612
======= =======
REPRESENTED BY:
Capital shares
Preference 21 21
Ordinary 4,861 4,842
Paid-in surplus 3,468 3,386
Retained earnings 32,025 33,666
Merger reserve 697 697
======= =======
41,072 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 15.
- 10 -
<PAGE> 11
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 829 2,071
------ ------
DIVIDENDS FROM JOINT VENTURES 212 74
------ ------
DIVIDENDS FROM ASSOCIATED UNDERTAKINGS 45 38
------ ------
SERVICING OF FINANCE AND RETURNS ON INVESTMENTS
Interest received 32 44
Interest paid (281) (256)
Dividends received 7 8
Dividends paid to minority shareholders (65) (1)
------ ------
NET CASH OUTFLOW FROM SERVICING OF FINANCE AND RETURNS ON INVESTMENTS (307) (205)
------ ------
TAXATION
UK corporation tax (72) (54)
Overseas tax 27 (377)
------ ------
TAX PAID (45) (431)
------ ------
CAPITAL EXPENDITURE
Payments for fixed assets (1,515) (2,195)
Proceeds from the sale of fixed assets 87 328
------ ------
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE (1,428) (1,867)
------ ------
ACQUISITIONS AND DISPOSALS
Investments in associated undertakings (88) (139)
Acquisitions -- (205)
Net investment in joint ventures (200) 10
Proceeds from the sale of businesses 92 77
------ ------
NET CASH OUTFLOW FOR ACQUISITIONS AND DISPOSALS (196) (257)
------ ------
EQUITY DIVIDENDS PAID (263) (599)
------ ------
NET CASH OUTFLOW (1,153) (1,176)
====== ======
Financing (Note 12) (829) (811)
Management of liquid resources (161) (550)
(Decrease) increase in cash (163) 185
------ ------
(1,153) (1,176)
====== ======
RECONCILIATION OF HISTORICAL COST PROFIT BEFORE INTEREST AND TAX TO NET CASH INFLOW
FROM OPERATING ACTIVITIES
Historical cost profit before interest and tax 195 1,376
Depreciation and amounts provided 1,244 1,215
Exploration expenditure written off 84 79
Share of profits of joint ventures and associated undertakings + (356) (218)
Interest and other income (52) (57)
Profit on sale of fixed assets or businesses (58) (66)
Increase in working capital and other items (228) (258)
------ ------
NET CASH INFLOW FROM OPERATING ACTIVITIES 829 2,071
====== ======
+ INCLUDES THE FOLLOWING AMOUNTS OF DEPRECIATION FOR THE BP/MOBIL EUROPEAN JV 78 69
====== ======
</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 15.
- 11 -
<PAGE> 12
BP AMOCO p.l.c. AND SUBSIDIARIES
CAPITAL EXPENDITURE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
BY BUSINESS
EXPLORATION AND PRODUCTION
UK 244 406
Rest of Europe 8 51
USA 362 509
Rest of World 320 606
----- -----
934 1,572
----- -----
REFINING AND MARKETING
UK 34 21
Rest of Europe 80 112
USA 154 171
Rest of World 48 54
----- -----
316 358
----- -----
CHEMICALS
UK 60 45
Rest of Europe 61 267
USA 63 90
Rest of World 25 55
----- -----
209 457
----- -----
OTHER BUSINESSES AND CORPORATE 25 324
----- -----
1,484 2,711
===== =====
BY GEOGRAPHICAL AREA
UK 344 713
Rest of Europe 151 468
USA 595 813
Rest of World 394 717
----- -----
1,484 2,711
===== =====
Includes the following amounts for the BP/Mobil
European joint venture 107 132
===== =====
</TABLE>
- 12 -
<PAGE> 13
BP AMOCO p.l.c. AND SUBSIDIARIES
OPERATING INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
<S> <C> <C>
CRUDE OIL AND NATURAL GAS PRODUCTION
(net of royalties)
Crude oil and natural gas liquids production (thousand barrels per day)
UK 586 483
Rest of Europe 107 116
USA 814 850
Rest of World 592 576
----- -----
Total crude oil and natural gas liquids production 2,099 2,025
===== =====
Natural gas production (million cubic feet per day)
UK 1,490 1,576
Rest of Europe 243 212
USA 2,433 2,428
Rest of World 1,906 1,912
----- -----
Total natural gas production 6,072 6,128
===== =====
Total production
(thousand barrels oil equivalent per day) 3,146 3,082
===== =====
REFINERY THROUGHPUTS (thousand barrels per day)
UK 273 304
Rest of Europe 563 545
USA 1,276 1,537
Rest of World 382 378
----- -----
Total throughput 2,494 2,764
===== =====
OIL SALES VOLUMES (thousand barrels per day)
Refined products
UK 240 257
Rest of Europe 785 768
USA 1,458 1,419
Rest of World 658 587
----- -----
Total marketing sales 3,141 3,031
Trading/supply sales 1,776 1,610
----- -----
TOTAL OIL PRODUCT SALES 4,917 4,641
Crude oil 3,947 4,107
----- -----
TOTAL OIL SALES 8,864 8,748
===== =====
CHEMICALS PRODUCTION + (thousand tonnes) 5,143 4,817
===== =====
</TABLE>
+ Includes BP Amoco share of associated undertakings and other interests in
production.
- 13 -
<PAGE> 14
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 in BP Amoco's Annual
Report on Form 20-F for the year ended December 31,1998 filed with the
Securities and Exchange Commission.
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
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
Exploration and Production 21 20
---------- ---------
TOTAL REPLACEMENT COST OPERATING PROFIT 21 20
Interest expense (30) (30)
---------- ---------
DECREASE IN PROFIT FOR THE PERIOD (9) (10)
========== =========
</TABLE>
The adjustments to tangible assets and provisions for liabilities and
charges at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
($ million)
<S> <C>
Tangible assets 415
Other creditors 62
Other provisions 349
---------
INCREASE IN BP AMOCO SHAREHOLDERS' INTEREST 826
=========
</TABLE>
- 14 -
<PAGE> 15
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
3. TURNOVER
BY BUSINESS
Exploration and Production 4,024 4,596
Refining and Marketing 10,167 12,501
Chemicals 2,123 2,586
Other businesses and corporate 30 54
---------- ---------
16,344 19,737
Less: Sales between businesses 1,702 1,874
---------- ---------
GROUP EXCLUDING JOINT VENTURES 14,642 17,863
Sales of joint ventures 3,342 3,653
---------- ---------
17,984 21,516
========== =========
BY GEOGRAPHICAL AREA
UK 4,795 6,222
Rest of Europe 1,190 1,551
USA 6,630 8,388
Rest of World 3,454 3,728
---------- ---------
16,069 19,889
Less: Sales between areas 1,427 2,026
---------- ---------
GROUP EXCLUDING JOINT VENTURES 14,642 17,863
========== =========
Sales of joint ventures
UK 747 884
Rest of Europe 2,989 3,312
USA 24 16
Rest of World 93 76
---------- ---------
3,853 4,288
Less: Sales between areas 511 635
---------- ---------
3,342 3,653
========== =========
4. PRODUCTION TAXES
UK petroleum revenue tax 33 26
Overseas production taxes 109 164
---------- ---------
142 190
========== =========
5. EXPLORATION EXPENSE
Exploration and Production
UK 13 15
Rest of Europe 24 26
USA 20 55
Rest of World 115 124
---------- ---------
172 220
========== =========
</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 Annual Report on Form 20-F for the year ended
December 31, 1998.
- 15 -
<PAGE> 16
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C> <C>
7. REPLACEMENT COST OPERATING PROFIT
BY BUSINESS
EXPLORATION AND PRODUCTION
UK 323 526
Rest of Europe 127 118
USA 196 489
Rest of World 172 88
--------- ---------
818 1,221
--------- ---------
REFINING AND MARKETING
UK (22) 78
Rest of Europe 100 124
USA 113 164
Rest of World 155 173
--------- ---------
346 539
--------- ---------
CHEMICALS
UK 42 85
Rest of Europe 61 73
USA 107 206
Rest of World (4) (18)
--------- ---------
206 346
--------- ---------
OTHER BUSINESSES AND CORPORATE (124) (107)
--------- ---------
1,246 1,999
========= =========
BY GEOGRAPHICAL AREA
UK 347 665
Rest of Europe 282 301
USA 288 759
Rest of World 329 274
--------- ---------
1,246 1,999
--------- ---------
Includes the following amounts for joint ventures and associated undertakings 260 355
========= =========
8. ANALYSIS OF EXCEPTIONAL ITEMS
PROFIT (LOSS) ON SALE OF FIXED ASSETS AND BUSINESSES
Exploration and Production (9) 64
Refining and Marketing 44 2
Chemicals 62 -
Other businesses and corporate - -
--------- ---------
97 66
Restructuring costs (1,155) -
--------- ---------
TOTAL EXCEPTIONAL ITEMS BEFORE TAXATION (1,058) 66
========= =========
Includes the following amounts for joint ventures and associated undertakings 39 -
========= =========
</TABLE>
- 16 -
<PAGE> 17
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
8. ANALYSIS OF EXCEPTIONAL ITEMS - CONTINUED
During the first quarter of 1999, BP Amoco recognized exceptional charges
of $1,155 million for restructuring costs following the merger of BP and
Amoco at the end of 1998. These costs related mainly to employee severance
($722 million) and provisions against surplus properties ($370 million).
Most of these costs relate to the Group's US operations. Cash outlays
charged against these liabilities amounted to $165 million in the period.
Approximately 6,000 employees were notified of the termination of their
employment in the first quarter of 1999, and 1,900 left. Most of these were
exploration and production staff, mainly in Houston, Texas, and business
head office and corporate staff in Chicago, Illinois, and Cleveland, Ohio.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
9. INVENTORY HOLDING GAINS (LOSSES)
Exploration and Production (11) (16)
Refining and Marketing 45 (642)
Chemicals (27) (31)
--------- ---------
7 (689)
========= =========
Includes the following amounts for joint ventures
and associated undertakings 57 (137)
========= =========
10. INTEREST EXPENSE
Group interest payable 236 241
Capitalized (15) (43)
--------- ---------
221 198
Joint ventures 16 13
Associated undertakings 37 23
Unwinding of discount on provisions (Note 2) 30 30
--------- ---------
304 264
========= =========
11. CHARGE FOR TAXATION
United Kingdom 88 143
Overseas (32) 310
--------- ---------
56 453
========= =========
Includes the following amounts for joint ventures
and associated undertakings 24 51
========= =========
12. ANALYSIS OF CASH FLOW
FINANCING
Long-term borrowing (50) (340)
Repayments of long-term borrowing 793 199
Short-term borrowing (2,192) (1,100)
Repayments of short-term borrowing 721 160
--------- ---------
(728) (1,081)
Issue of ordinary share capital (101) (43)
Repurchase of ordinary share capital - 313
--------- ---------
Net cash inflow from financing (829) (811)
========= =========
</TABLE>
- 17 -
<PAGE> 18
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
13. ANALYSIS OF CHANGES IN NET DEBT
OPENING BALANCE
Finance debt 13,755 12,877
Less: Cash 405 355
Current asset investments 470 1,067
--------- ---------
Opening net debt 12,880 11,455
--------- ---------
CLOSING BALANCE
Finance debt 14,510 13,932
Less: Cash 270 544
Current asset investments 305 512
--------- ---------
Closing net debt 13,935 12,876
--------- ---------
INCREASE IN NET DEBT (1,055) (1,421)
========= =========
Movement in cash/bank overdrafts (163) 185
Decrease in current asset investments (161) (550)
Net cash inflow from financing (excluding share capital) (728) (1,081)
Other movements - 2
--------- ---------
Movements in net debt before exchange effects (1,052) (1,444)
Exchange adjustments (3) 23
--------- ---------
INCREASE IN NET DEBT (1,055) (1,421)
========= =========
</TABLE>
14. MOVEMENT IN BP AMOCO SHAREHOLDERS' INTEREST
<TABLE>
<CAPTION>
$ MILLION
(UNAUDITED)
<S> <C>
BALANCE AT DECEMBER 31, 1998 41,786
Prior year adjustment - change in accounting policy (see Note 2) 826
---------
42,612
Loss for the period (176)
Distribution to shareholders (970)
Currency translation differences (806)
Share dividend plan 311
Employee share schemes 101
---------
BALANCE AT MARCH 31, 1999 41,072
=========
</TABLE>
- 18 -
<PAGE> 19
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
15. 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>
(LOSS) PROFIT FOR THE PERIOD THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
(Loss) profit as reported in the consolidated statement of income (176) 640
Adjustments:
Depreciation charge (10) (19)
Deferred taxation 38 44
Interest expense 30 30
Onerous property leases 156 -
Decommissioning expense (42) (32)
Other 5 (8)
--------- ---------
177 15
--------- ---------
Profit for the period as adjusted to accord with US GAAP
1 655
======== ========
Profit for the period as adjusted:
Per Ordinary Share
Basic 0.00 0.07
Diluted 0.00 0.07
======== ========
Per American Depositary Share (a)
Basic 0.00 0.42
Diluted 0.00 0.42
======== ========
</TABLE>
<TABLE>
<CAPTION>
BP AMOCO SHAREHOLDERS' INTEREST MARCH 31, 1999 DECEMBER 31, 1998 (b)
(UNAUDITED)
($ million)
<S> <C> <C>
BP Amoco shareholders' interest as reported
in the consolidated balance sheet 41,072 42,612
Adjustments:
Fixed assets 1,102 1,112
Deferred taxation (5,708) (5,776)
Ordinary shares held for future awards to employees (457) (489)
Sale and leaseback of Chicago office building (413) (413)
Fourth quarterly dividend 970 968
Pension liability adjustment (143) (143)
Onerous property leases 156 -
Decommissioning and environmental provisions (423) (411)
Severance costs 32 32
Other (141) (158)
------------ -----------
(5,025) (5,278)
---------- ----------
BP shareholders' interest as adjusted
to accord with US GAAP 36,047 37,334
========== ==========
</TABLE>
- ---------------
(a) One American Depositary Share is equivalent to six Ordinary Shares.
(b) As reported in Note 45 of Notes to Financial Statements included in
BP Amoco's Annual Report on Form 20-F for the year ended December
31, 1998, except as restated for the adoption of FRS 12 (Note 2).
- 19 -
<PAGE> 20
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
15. US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - CONTINUED
CASH FLOW
The consolidated statement of cash flows presented in accordance with
SFAS 95 is summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ millions)
<S> <C> <C>
Net cash provided by operating activities 566 1,573
Net cash used in investing activities (1,393) (2,155)
Net cash used in financing activities 501 210
Currency translation differences relating
to cash and cash equivalents 25 5
--------- ---------
Decrease in cash and cash equivalents (301) (367)
Cash and cash equivalents at beginning of period 794 1,338
--------- ---------
Cash and cash equivalents at end of period 493 971
========= =========
</TABLE>
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
MARCH 31
(UNAUDITED)
1999 1998
(shares millions)
<S> <C> <C>
Weighted average number of ordinary shares 9,669 9,573
Ordinary shares issuable under employee share schemes 52 40
--------- ---------
9,721 9,613
========= =========
</TABLE>
COMPREHENSIVE INCOME
The components of comprehensive income, net of related tax are as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
($ million)
<S> <C> <C>
Profit for the period as adjusted to accord with US GAAP 1 655
Currency translation differences (806) (26)
Pension liability - -
--------- ---------
Comprehensive income (805) 629
========= =========
</TABLE>
Accumulated other comprehensive income at March 31, 1999 and December
31, 1998 was $(1,402) million and $(596) million, respectively.
- 20 -
<PAGE> 21
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
15. US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - CONTINUED
ACCOUNTING FOR ASSOCIATED UNDERTAKINGS AND JOINT VENTURES
Under the provisions of UK Financial Reporting Standard No.9
'Associates and Joint Ventures' ('FRS9'), the Company includes its
share of the results of associated undertakings and joint ventures
(JVs) within various captions in the consolidated statement of income.
Under US GAAP, the Company's share of the after tax profit or loss of
associated undertakings and joint ventures would be recognized as a
single amount. The following summarizes the reclassifications necessary
to accord with US GAAP.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
--------------------------------------------------
AS US GAAP
REPORTED RECLASSIFICATION PRESENTATION
--------------------------------------------------
($ million)
<S> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
Other income 105 433 538
Share of profits of JVs and associated undertakings 260 (260) -
Exceptional items before taxation (1,058) (39) (1,097)
Inventory holding gains (losses) 7 (57) (50)
Interest expense 304 (53) 251
Taxation 56 (24) 32
Loss for the period (176) - (176)
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
--------------------------------------------------
AS US GAAP
REPORTED RECLASSIFICATION PRESENTATION
--------------------------------------------------
($ million)
<S> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
Other income 167 305 472
Share of profits of JVs and associated undertakings 355 (355) -
Exceptional items before taxation 66 - 66
Inventory holding gains (losses) (689) 137 (552)
Interest expense 264 (36) 228
Taxation 453 (51) 402
Profit for the period 640 - 640
</TABLE>
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'). This new standard is
currently effective for accounting periods beginning after June 15,
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.
- 21 -
<PAGE> 22
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
BP AMERICA INC. (A)(B) ($ million)
<S> <C> <C>
Sales and other operating revenue 2,301 3,145
Gross profit (c) 274 401
Loss for the period (e) (164) (87)
========= =========
</TABLE>
<TABLE>
MARCH 31, 1999 DECEMBER 31, 1998 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 13,866 13,783
Current assets 3,240 3,002
---------- ---------
Total assets 17,106 16,785
========== =========
Current liabilities 5,705 5,172
Noncurrent liabilities 5,709 5,759
Shareholders' interest 5,692 5,854
---------- ---------
Total liabilities and shareholders' interest 17,106 16,785
========== =========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
THE STANDARD OIL COMPANY (A)(B) ($ million)
<S> <C> <C>
Sales and other operating revenue 2,227 3,043
Gross profit (c) 245 335
Loss for the period (f) (e) (16) (84)
========= =========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 12,513 12,387
Current assets 4,754 4,547
---------- ---------
Total assets 17,267 16,934
========== =========
Current liabilities 3,092 2,772
Noncurrent liabilities 5,591 5,562
Shareholders' interest 8,584 8,600
---------- ---------
Total liabilities and shareholders' interest 17,267 16,934
========== =========
</TABLE>
- 22 -
<PAGE> 23
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
BP PIPELINES (ALASKA) INC. (a)(b) ($ million)
<S> <C> <C>
Sales and other operating revenue 125 150
Gross profit (c) 45 73
Profit for the period (f) 25 23
========= =========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 1,350 1,362
Current assets 836 803
---------- ---------
Total assets 2,186 2,165
========== =========
Current liabilities 125 152
Noncurrent liabilities 1,016 994
Shareholders' interest 1,045 1,019
---------- ---------
Total liabilities and shareholders' interest 2,186 2,165
========== =========
</TABLE>
<TABLE>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1999 1998
BP EXPLORATION (ALASKA) INC. (a)(b) ($ million)
<S> <C> <C>
Sales and other operating revenue 965 1,606
Gross (loss) profit (c) (49) 4
Loss for the period (e)(f) (110) (78)
========= =========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 9,129 9,267
Current assets 2,416 2,273
---------- ---------
Total assets 11,545 11,540
========== =========
Current liabilities 739 628
Noncurrent liabilities 1,583 1,582
Shareholders' interest 9,223 9,330
---------- ---------
Total liabilities and shareholders' interest 11,545 11,540
========== =========
</TABLE>
- 23 -
<PAGE> 24
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), loss for the three months ended
March 31, 1999 for BP America Inc. and The Standard Oil Company were
increased by $6 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. were increased by $827 million, $822 million, $281 million
and $362 million, respectively; and (ii) loss for the three months ended
March 31, 1998 for BP America Inc., The Standard Oil Company and BP
Exploration (Alaska) Inc. were increased by $6 million, $6 million and $2
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 summarized financial information for those companies
included within BP Amoco's Annual Report on Form 20-F for the year ended
December 31, 1998, except as restated for the adoption of FRS 12 as
discussed in Note (b).
(e) Loss the for three months ended March 31, 1999 for BP America Inc., The
Standard Oil Company and BP Exploration (Alaska) Inc. includes
restructuring costs (Note 8) of $188 million, $91 million and $31 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 three months ended March 31, 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 $28 million respectively.
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<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP AMOCO p.l.c.
(REGISTRANT)
DATED JUNE 15, 1999 BY /S/ G.E. YOUNG
------------------------
G.E. YOUNG
Assistant Secretary
- 25 -
<PAGE> 26
BP AMOCO p.l.c. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1999
($ million, except ratios)
<S> <C>
Loss before taxation (109)
Group's share of income in excess of
dividends of joint ventures and associated undertakings (46)
Capitalized interest (15)
----
Loss as adjusted (170)
----
Fixed charges:
Interest net of interest expense of joint ventures and associated undertakings and unwinding
of discount 221
Rental expense representative of interest 79
Capitalized interest 15
----
315
----
</TABLE>
Earnings are insufficient to cover fixed charges by $485 million primarily due
to restructuring costs of $1,155 million. The ratio of earnings to fixed charges
before deducting the exceptional restructuring costs is 4.1.
The corresponding ratio after taking account of adjustments to profit before
taxation to accord with US GAAP is 4.6 - see Note 15 of Notes to Consolidated
Financial Statements.
Exhibit 1
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