<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the period ended June 30, 2000
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
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., THE PROSPECTUS INCLUDED IN THE
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-79399) OF BP AMOCO p.l.c., AND
THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO.
333-34968) OF BP AMOCO p.l.c., AND TO BE A PART THEREOF FROM THE DATE ON WHICH
THIS REPORT IS FILED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS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 - JUNE 2000
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ -----------------
<S> <C> <C> <C> <C>
Total replacement cost operating profit - $m 4,439 2,075 8,400 3,321
Replacement cost profit before exceptional items - $m 2,866 1,226 5,543 1,903
Replacement cost profit for the period - $m 2,886 1,063 5,439 880
Historical cost profit for the period - $m 3,099 1,635 6,184 1,459
Profit per Ordinary Share - cents 13.95 8.44 29.83 7.53
Dividends per Ordinary Share - cents 5.00 5.00 10.00 10.00
</TABLE>
(a) For further information on replacement cost profit see Note 5 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, 1999 included in BP Amoco p.l.c.'s Annual Report on Form 20-F for the year
ended December 31, 1999. Comparative figures for the three months and six months
ended June 30, 1999 have been restated to reflect the creation of the Gas and
Power business stream, which is reported separately from January 1, 2000. BP or
the Group means BP Amoco p.l.c. and its subsidiaries.
On April 13, 2000 BP and Atlantic Richfield Company (ARCO) announced that they
had received clearance from the US Federal Trade Commission (FTC) for the
combination of the two companies and the combination was completed on April 18,
2000. The combination has been accounted for as an acquisition under UK GAAP and
as a purchase under US GAAP. The results of ARCO have been included with effect
from April 14, 2000, the day following the FTC approval of the transaction.
The Burmah Castrol acquisition was completed in early July 2000. By August 18,
2000, BP owned 97% of the equity, costing a total of $4.4 billion.
Replacement cost profit before exceptional items (which excludes inventory
holding gains and losses) was $2,866 million for the three months ended June 30,
2000, compared with $1,226 million for the equivalent period of 1999. The
increase reflects the better environment, improvement in the cost base and the
inclusion of ARCO. These results include special charges of $600 million ($442
million after tax) for the three months ended June 30, 2000, and $197 million
($141 million after tax) for the equivalent period of 1999. The result for the
three months ended June 30, 2000 is also after charging depreciation and
amortization of $302 million arising from the fixed asset revaluation adjustment
and goodwill consequent upon the ARCO acquisition. The special charges for the
three months ended June 30, 2000 comprised ARCO integration costs of $464
million, rationalization costs post the BP/Amoco merger of $96 million and $40
million for an asset writedown. Those for the corresponding period of 1999
related to integration costs following the BP/Amoco merger.
For the six months ended June 30, 2000 the replacement cost profit before
exceptional items was $5,543 million, up from $1,903 million in 1999. The
results for 2000 are after charging special items of $640 million ($472 million
after tax) and acquisition depreciation and amortization of $302 million. The
results for 1999 include special charges of $311 million ($225 million after
tax).
For the half year the combined cost structure of BP and ARCO was $1 billion
lower than a year ago, excluding the impact of divesting ARCO's Alaskan and
Cushing assets. This represents the achievement of half the target of a $2
billion cost reduction year-on-year.
<PAGE>
Page 3
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
The historical cost profit for the three months ended June 30, 2000 was $3,099
million including inventory holding gains of $213 million and net exceptional
gains of $161 million ($20 million after tax) in respect of net profits on the
sale of fixed assets and businesses and termination of operations. For the
equivalent period of 1999 there was a profit of $1,635 million including
inventory holding gains of $572 million and net exceptional charges of $186
million ($163 million after tax) for restructuring costs and net profits on the
sale of fixed assets and businesses and termination of operations.
For the six months ended June 30, 2000 the historical cost profit was $6,184
million including inventory holding gains of $745 million. This compares with a
profit of $1,459 million including inventory holding gains of $579 million for
the same period in 1999. Included in the results for the first six months of
2000 were net exceptional profits of $4 million (net loss of $104 million after
tax) for the sale of fixed assets and businesses and termination of operations.
The results for the comparable period in 1999 included net exceptional charges
of $1,244 million ($1,023 million after tax) for restructuring costs and net
profits on the sale of fixed assets and businesses and termination of
operations.
BP is presenting a pro forma result adjusted for special items in order to
enable investors to evaluate better both BP historical performance and its
performance against that of its competitors. The pro forma result adjusted for
special items has been derived from BP reported UK GAAP accounting information
but is not in itself a recognized UK or US GAAP measure.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ -----------------
<S> <C> <C> <C> <C>
Replacement cost profit before exceptional items - $m 2,866 1,226 5,543 1,903
Special items* - $m 442 141 472 225
Acquisition amortization+ - $m 302 - 302 -
------------------ -----------------
Pro forma result adjusted for special items - $m 3,610 1,367 6,317 2,128
------------------ -----------------
</TABLE>
* The special items refer to non-recurring charges and credits reported in
the quarter. The special items for the three months ended June 30, 2000
comprise ARCO integration costs, rationalization costs post the BP/Amoco
merger and an asset writedown.
+ Acquisition amortization refers to depreciation relating to the fixed asset
revaluation adjustment and amortization of goodwill consequent upon the
ARCO acquisition.
The pro forma result adjusted for special items was $3,610 million for the three
months ended June 30, 2000 and $6,317 million for the six months ended June 30,
2000. These results represent an increase of 164% and 197% respectively over the
comparable periods of 1999.
Net taxation, other than production taxes, charged for the three months ended
June 30, 2000 was $1,289 million compared with $473 million in the equivalent
period last year. This included a tax charge of $141 million in respect of
exceptional items compared with a tax credit of $23 million for the second
quarter of 1999. The effective tax rate on replacement cost profit before
exceptional items was 28% for the three months ended June 30, 2000 and 27% for
the half year, compared with 28% for the equivalent periods of 1999. On a pro
forma basis, the effective tax rate for the quarter and the half year was 26%.
The decrease in the effective tax rate mainly reflects increased utilization of
Nonconventional Fuels (Section 29) tax credits in the USA. These are tax credits
relating to the production and sale of certain quantities of coalbed methane and
other gases. Utilization of such credits is governed by certain restrictions. No
such credits were available to be used in 1999.
Net cash inflow for the three months ended June 30, 2000 was $7.3 billion,
compared with an outflow of $1.2 billion for the equivalent period of 1999. For
the first half of 2000, net cash inflow was $6.5 billion compared with a net
cash outflow of $2.5 billion in the same period in 1999. The improved cash flow
in both periods in 2000 reflects strong operating cash flow along with sales
proceeds from the FTC mandated ARCO asset sales, partly offset by higher tax and
capital payments.
<PAGE>
Page 4
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
Capital expenditure for the second quarter, excluding $634 million for
acquisitions of interests in PetroChina and various new business ventures in Gas
and Power and e-commerce, was $2.4 billion, up 35% on a year ago. For the first
six months of 2000, capital expenditure was $5.6 billion, an increase of 70% on
the first six months of the previous year. Capital expenditure in the first half
of 2000 included $869 million for the purchase of 19.5% of Burmah Castrol's
issued share capital in addition to the cost of acquisition of interests in
PetroChina and new business ventures in Gas and Power and e-commerce. Underlying
capital expenditure is in line with our plans to grow the company.
Net debt at June 30, 2000 was $13.3 billion. The ratio of net debt to net debt
plus equity was 15% compared with 23% at March 31, 2000 and 26% at June 30,
1999. Based on the pro forma result adjusted for special items, the ratio of net
debt to net debt plus equity was 19% at June 30, 2000. Interest expense for the
three months ended June 30, 2000 was $403 million compared with $328 million in
the equivalent period of 1999. For the first half of 2000 interest expense was
$699 million compared to $632 million a year ago. Interest expense for the
second quarter of 2000 reflects interest on the combined debt of BP and ARCO.
The return on average capital employed for the three months ended June 30, 2000,
based on replacement cost profit before exceptional items and after adding back
interest expense and minority shareholders' interest, was 14% compared with 11%
for the equivalent period of 1999. Based on the pro forma result adjusted for
special items, and after adding back interest expense and minority shareholders'
interest, the return on average capital employed was 21% for the second quarter
of 2000 and 12% for the second quarter of 1999.
BP purchased for cancellation $976 million of its own shares during the second
quarter of 2000.
BP intends to continue to pay dividends in the future of around 50% of estimated
average replacement cost profit before exceptional items through the business
cycle.
BP announced a second quarterly dividend for 2000 of 5 cents per Ordinary Share.
Holders of Ordinary Shares will receive 3.352 pence per share and holders of
American Depositary Receipts (ADRs) $0.30 per ADS share. The dividend is payable
on September 11, 2000 to shareholders on the register on August 18, 2000.
Participants in the Dividend Reinvestment Plan or the dividend reinvestment
facility in the US Direct Access Plan will receive the dividend in the form of
shares on September 11, 2000.
<PAGE>
Page 5
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
DETAILED REVIEW OF BUSINESSES (EXCLUDING EXCEPTIONAL ITEMS)
EXPLORATION AND PRODUCTION
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ ------------------
<S> <C> <C> <C> <C>
Total replacement cost operating profit - $m 3,115 1,465 6,318 2,215
Special items - $m 259 28 283 114
Acquisition amortization - $m 253 - 253 -
------------------ ------------------
Pro forma operating result
adjusted for special items - $m 3,627 1,493 6,854 2,329
------------------ ------------------
Results included:
Exploration expense - $m 168 124 299 296
Key Statistics:
Average prices realized by BP :Crude oil* - $/bbl 24.98 14.49 25.30 12.45
:Natural gas - $/mcf 2.51 1.82 2.33 1.81
Crude oil production (net of royalties) - mb/d 1,897 2,049 1,939 2,073
Natural gas production (net of royalties) - mmcf/d 7,694 5,944 7,002 6,007
Total production (net of royalties) (a) - mboe/d 3,224 3,074 3,146 3,109
</TABLE>
* Crude oil and natural gas liquids
(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.
Replacement cost operating profits for the three months and six months ended
June 30, 2000 were $3,115 million and $6,318 million respectively. This compares
with $1,465 million and $2,215 million for the corresponding periods in 1999.
The results for both periods in 2000 reflect a contribution from ARCO for the
period from April 14, 2000 including income of $80 million from two weeks of
ARCO Alaskan operations, prior to the sale to Phillips Petroleum. In addition,
the results are after charging special items of $259 million for the second
quarter and $283 million for the half year respectively, and depreciation and
amortization arising from the fixed asset revaluation adjustment and goodwill
consequent upon the ARCO acquisition of $253 million for both periods.
Special charges in the three months and six months ended June 30, 2000 comprised
$259 million of costs arising from ARCO integration activities in both periods
and in addition for the half year $24 million related to the settlement of a
lawsuit. There were special charges of $114 million in the first half of 1999
related mainly to BP/Amoco merger integration costs.
The pro forma result adjusted for special items for the second quarter was
$3,627 million, up 143% compared with a year ago, and $6,854 million for the six
months ended June 30, 2000. This reflects significantly higher oil and gas
prices and cost savings. Hydrocarbon production was up, with increased gas
production more than offsetting lower liquids production.
The lower liquids production was a consequence of divestments and the Alaskan
alignment. In April, BP and its partners finalized an agreement to align their
Alaskan interests and thereby optimize operations. In return for a reduction in
its share of liquids production, BP has achieved a significantly strengthened
gas position and immediate cost savings through its single operatorship. During
the second quarter, the divestment of non-core properties continued. Most
significantly the disposal of the interest in Altura Energy was closed out.
After the quarter end we announced the sale of certain ARCO UK Southern North
Sea gas assets, subject to regulatory approvals.
At the end of May, BP announced that it had entered into an agreement with
Vastar Resources Inc. which would enable it to acquire the publicly-held
minority stock holding. This will enable cost synergies by combining Vastar
operations with those of BP. The transaction remains subject to shareholder
approval.
BP has announced three major discoveries. In May, offshore Trinidad, the Manakin
1 exploration well (BP 70% and operator), including a portion which lies in
Venezuela, encountered natural gas, and offshore Angola, (BP 50% and operator),
BP announced its third discovery in Block 18 at the Galio well. In July, a
discovery was announced offshore Kazakhstan at the Kashagan East 1 well (BP
9.5%) in the Caspian Sea.
<PAGE>
Page 6
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
GAS AND POWER
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ ------------------
<S> <C> <C> <C> <C>
Total replacement cost operating profit - $m 26 38 78 106
Special items - $m - - - -
Acquisition amortization - $m - - - -
------------------ ------------------
Pro forma operating result
adjusted for special items - $m 26 38 78 106
------------------ ------------------
Euro/US$ 1.07 0.95 1.04 0.92
</TABLE>
(a) Further operating information is shown on page 16.
The Gas and Power business stream which is reported separately from January 1,
2000 is responsible for BP's world-wide gas marketing activities and all
business development opportunities in natural gas, including gas-fired power
generation. The Gas and Power stream has responsibility for the shareholding in
Ruhrgas, BP's existing gas marketing and trading operations in the UK and North
America, and world-wide power development activities. Gas and Power has
established business development operations in Latin America, the Mediterranean,
the Caspian region, the Middle East, Northern Europe, China and the Asia-Pacific
region.
Replacement cost operating profit for the second quarter of 2000 was $26 million
compared with $38 million a year ago. Gas sales volumes showed strong growth
over a year ago. The result reflected lower Ruhrgas income, a stronger dollar
and increased business development costs. Profit for the first six months of
2000 was down $28 million on the same period in 1999, reflecting the same
factors. Capital expenditure and acquisitions are rising, with the ambitious
growth agenda of the business.
In June, BP announced the approval of a major investment in a liquefied natural
gas (LNG) and power project in northern Spain. The Bahia de Bizkaia project is
an integrated energy project which comprises a combined cycle gas turbine power
plant, a regasification facility and a LNG import terminal. A long-term gas
sales agreement was signed to supply and deliver gas in the form of LNG to power
plants in the Dominican Republic, beginning mid 2002. Contracts were signed in
July for the purchase of two LNG ships, with options for further vessels. BP was
one of three successful bidders for LNG tanker discharging capacity at the Cove
Point facility on the eastern seaboard of the USA.
During the second quarter, BP purchased an 18.5% shareholding in
GreenMountain.com, a leading clean energy consumer marketer in the United
States. In early July, BP purchased, subject to regulatory approvals, IGI
Resources, a gas and power trading and transportation business in the Pacific
Northwest, USA.
<PAGE>
Page 7
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
REFINING AND MARKETING
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ ------------------
<S> <C> <C> <C> <C>
Total replacement cost operating profit - $m 1,277 506 1,951 906
Special items - $m 141 33 141 50
Acquisition amortization - $m 64 - 64 -
------------------ ------------------
Pro forma operating result
adjusted for special items - $m 1,482 593 2,156 956
------------------ ------------------
Global Indicator Refining Margin* - $/bbl 4.69 1.21 3.56 1.12
Refinery throughputs - mb/d 3,021 2,583 2,734 2,539
Marketing sales - mb/d 3,619 3,184 3,366 3,163
</TABLE>
* The Global Indicator Refining Margin (GIM) is the average of seven regional
indicator margins weighted for BP's crude refining capacity in each region.
Each regional indicator margin is based on a single representative crude
with product yields characteristic of the typical level of upgrading
complexity.
(a) Further operating information is shown on page 16.
Replacement cost operating profits for the three months and six months ended
June 30, 2000 were $1,277 million and $1,951 million respectively. This compares
with $560 million and $906 million for the same periods in 1999. The results for
both periods in 2000 include a contribution from ARCO for the period from
April 14, 2000, and are after charging special items of $141 million and
depreciation and amortization arising from the fixed asset revaluation
adjustment and goodwill consequent upon the ARCO acquisition of $64 million.
Special items for the three months and the six months ended June 30, 2000
amounted to $141 million and comprised $84 million of costs arising from ARCO
integration activities and $57 million of costs related to rationalization
activities post the BP/Amoco merger. There were special items of $33 million and
$50 million for the three months and six months ended June 30, 1999. The special
items in 1999 were in respect of BP/Amoco merger integration costs.
The pro forma result adjusted for special items for the second quarter was
$1,482 million, up by $889 million or 150% on the same period last year. The
half year result was up 125% on a year ago.
The main drivers of the improvement in 2000 on the corresponding quarter and
half year in 1999 were higher refining margins, a continued reduction in
operating costs, with the overall cost reduction programme on track, and ARCO
income. Although weak at the start of the second quarter, refining margins
improved over the period, particularly in the USA and, to a lesser extent, in
Europe. Improved operating performance also played a significant part in the
period-on-period improvement. The strength was principally due to OPEC
constraint on crude output and gasoline tightness. In marketing, the effect of
steadily rising crude and product prices was to depress margins, with impacts in
both the retail sector and, to a lesser extent, in the commercial sector.
Including the contribution from ARCO, product sales and retail shop revenues in
the second quarter increased significantly versus a year ago.
During the second quarter there was further progress on our clean fuels
initiatives, with the launch on June 21, of low sulphur gasoline in the
Indianapolis metropolitan area in the United States. This is the fifth
metropolitan area in the United States where low sulphur gasoline has been
introduced. On July 3, the launch of BP Cleaner Unleaded in London took place as
part of the national roll-out of low sulphur gasoline in the UK. Worldwide, 32
markets now sell cleaner fuels.
On July 13, BP announced that a definitive agreement to sell the Alliance
refinery, located in Belle Chasse, Louisiana, USA, had been reached with Tosco
Corporation. In late July, it was announced that BP had agreed to sell the
Alliance Products Pipeline and Terminal System to Colonial Pipeline Company.
Both these transactions are subject to regulatory approvals.
<PAGE>
Page 8
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
CHEMICALS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ ------------------
<S> <C> <C> <C> <C>
Total replacement cost operating profit - $m 320 198 579 404
Special Items - $m 50 59 50 70
Acquisition amortization - $m - - - -
------------------ ------------------
Pro forma operating result
adjusted for special items - $m 370 257 629 474
------------------ ------------------
Chemicals Indicator Margin* - $/te 143 96 128 108
Production volumes - kte 5,489 5,515 11,192 10,658
</TABLE>
* The Chemicals Indicator Margin (CIM) is a weighted average of
externally-based product margins. It is based on market data collected by
Chem Systems in their quarterly market analyses, then weighted based on
BP's product portfolio. While it does not cover our entire portfolio, it
includes a broader range of products than our previous indicator. Among the
products and businesses covered in the CIM are the olefins and derivatives,
the aromatics and derivatives, linear alpha-olefins, acetic acid, vinyl
acetate monomer and nitriles. Not included are Fabrics and Fibres, plastic
fabrications, poly alpha-olefins, anhydrides, Engineering Polymers and
Carbon Fibres, speciality intermediates, and the remaining parts of the
solvents and acetyls businesses.
(a) Further operating information is shown on page 16.
Replacement cost operating profits for the three months and six months ended
June 30, 2000 were $320 million and $579 million respectively, each including
special charges of $50 million. For the corresponding periods in 1999 the
replacement cost operating profits were $198 million (including special charges
of $59 million) and $404 million (including special charges of $70 million).
The special items in 2000 mainly comprise an asset writedown. The special items
in 1999 related to litigation settlement and integration costs arising from the
BP/Amoco merger.
The quarter's pro forma result adjusted for special items was $111 million
higher than in the first quarter, primarily on the strength of improved margins,
in spite of lower volumes. Results were well above the second quarter of 1999,
reflecting the benefits of better margins and lower costs, in spite of higher
business development expenditure. The half year result was up 33% on a year ago
reflecting similar factors.
Chemicals production was 5,489 ktes in the second quarter. This was a 4%
decrease from the first quarter due to scheduled maintenance shutdowns and
unplanned plant outages. Production for the second quarter was similar to a year
ago. For the six months ended June 30, 2000 production was up 5% compared with
1999.
Capital expenditure in the quarter was down slightly on a year ago due to the
phasing of projects.
During the second quarter, we reached agreement in principle with Bayer to
acquire their 50% interest in the two companies' Erdoelchemie joint venture.
Also, we received the Chinese government's approval to increase the capacity of
our planned ethylene joint venture in Shanghai, and we joined with other major
chemical companies in agreeing to evaluate the creation of a new e-commerce
company which will develop and provide an on-line marketplace for a broad range
of chemical products. BP also announced plans to divest its Engineering Polymers
and Carbon Fibres businesses.
<PAGE>
Page 9
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
OTHER BUSINESSES AND CORPORATE
CHEMICALS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ ------------------
<S> <C> <C> <C> <C>
Replacement cost operating loss - $m (299) (186) (526) (310)
Special items - $m 150 77 166 77
Acquisition amortization - $m - - - -
------------------ ------------------
Pro forma operating result
adjusted for special items - $m (149) (109) (360) (233)
------------------ ------------------
</TABLE>
Other Businesses and Corporate comprises Finance, Aluminium, BP Solar, the
group's coal asset, interest income and costs relating to corporate activities
worldwide. Replacement cost operating loss for the three months ended June 30,
2000 was $299 million (including special items of $150 million) and $526 million
for the six months ended June 30, 2000 (including special items of $166
million). There were special items of $77 million for the three months and six
months ended June 30, 1999 in respect of BP/Amoco merger integration costs.
The special items in 2000 comprised $121 million of costs arising from ARCO
integration activities and $45 million related to rationalization activities
post the BP/Amoco merger.
BP Solar production and shipments in the quarter and half year showed continuing
growth, with the second quarter up 26% on a year ago and the half year up by
24%. Capacity is being expanded to meet further anticipated growth in sales.
EXCEPTIONAL ITEMS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
2000 1999 2000 1999
------------------ ------------------
<S> <C> <C> <C> <C>
Profit (loss) on sale of fixed assets and
businesses and termination of operations - $m 161 162 4 259
Restructuring costs - $m - (348) - (1,503)
Taxation credit (charge) - $m (141) 23 (108) 221
------------------ ------------------
Exceptional items after taxation 20 (163) (104) (1,023)
------------------ ------------------
</TABLE>
(a) For further information on exceptional items see Note 7 of Notes to
Consolidated Financial Statements.
Exceptional items for the second quarter of 2000 include the profit of some $380
million on sale of BP's interest in Altura Energy and the losses of some $220
million on sale of certain Venezuelan upstream interests. In addition,
exceptional items for the half year include the subvention of Singapore
Aromatics Company bank loans of $210 million.
OUTLOOK
Overall, the outlook in the near term remains broadly positive. Crude prices
continue to be firm but volatile despite recent OPEC production increases. In
the short term, low stocks, particularly in the USA, are likely to continue to
support the market. Natural gas prices have been very strong this year and it is
probable that this trend will continue. Refining margins are likely to remain
healthy but volatile, supported by low product stocks. The expectation for
Chemicals is for continued volume growth, but with pressure on margins due to
increased supply.
<PAGE>
Page 10
BP AMOCO p.l.c. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - continued
FORWARD-LOOKING STATEMENTS
In order to utilize the 'Safe Habor' provisions of the United States Private
Securities Litigation Reform Act of 1995, BP is providing the following
cautionary statement: 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;
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 1999
and in the Annual Report on Form 20-F for 1999 filed with the US Securities and
Exchange Commission.
2000 DIVIDENDS
On August 8, 2000, BP Amoco p.l.c. announced a second quarterly dividend for
2000 of 5 cents per Ordinary Share of 25c (Ordinary Shares), representing $0.30
per American Depositary Share (ADS) amounting to $1,129 million in total. The
record date for qualifying US resident holders of American Depositary Shares as
well as holders of Ordinary Shares is August 18, 2000, with payment to be made
on September 11, 2000.
The dividend payable on September 11, 2000 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 $0.033 per ADS.
There is a Dividend Reinvestment Plan whereby holders of Ordinary Shares can
elect to reinvest the net cash dividend in shares purchased on the London Stock
Exchange. This plan is not available to any person resident in the USA or
Canada, or in any jurisdiction outside the UK where such an offer requires
compliance by the Company with any governmental or regulatory procedures or any
similar formalities.
A dividend reinvestment facility is, however, available for holders of ADRs
through the Direct Access Plan of Morgan Guaranty Trust Company of New York.
Participants in the Dividend Reinvestment Plan or the dividend reinvestment
facility included in the US Direct Access Plan will receive the dividend in the
form of shares on September 11, 2000.
<PAGE>
Page 11
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million, except per share amounts)
Turnover - Note 2 39,027 22,939 72,118 40,923
Less: joint ventures 5,869 3,923 11,249 7,265
------- ------- ------- -------
Group turnover 33,158 19,016 60,869 33,658
Replacement cost of sales 27,056 15,443 49,222 27,354
Production taxes - Note 3 488 215 986 357
------- ------- ------- -------
Gross profit 5,614 3,358 10,661 5,947
Distribution and administration expenses 1,815 1,569 3,194 3,105
Exploration expense - Note 4 168 124 299 296
------- ------- ------- -------
3,631 1,665 7,168 2,546
Other income 354 164 438 269
------- ------- ------- -------
Group replacement cost operating profit 3,985 1,829 7,606 2,815
Share of profits of joint ventures 286 140 455 271
Share of profits of associated undertakings 168 106 339 235
------- ------- ------- -------
Total replacement cost operating profit - Notes 5 and 6 4,439 2,075 8,400 3,321
Profit on sale of fixed assets and businesses - Note 7 161 162 4 259
Restructuring costs - Note 7 - (348) - (1,503)
------- ------- ------- -------
Replacement cost profit before interest and tax - Note 5 4,600 1,889 8,404 2,077
Inventory holding gains (losses) - Note 9 213 572 745 579
------- ------- ------- -------
Historical cost profit before interest and tax 4,813 2,461 9,149 2,656
Interest expense - Note 10 403 328 699 632
------- ------- ------- -------
Profit before taxation 4,410 2,133 8,450 2,024
Taxation - Note 11 1,289 473 2,176 529
------- ------- ------- -------
Profit after taxation 3,121 1,660 6,274 1,495
Minority shareholders' interest 22 25 90 36
------- ------- ------- -------
Profit for the period 3,099 1,635 6,184 1,459
======= ======= ======= =======
Earnings per Ordinary Share - cents (a)
Basic 13.95 8.44 29.83 7.53
Diluted 13.85 8.40 29.62 7.49
------- ------- ------- -------
Earnings per American depositary share - cents (a)
Basic 83.70 50.64 178.98 45.18
Diluted 83.10 50.40 177.72 44.94
------- ------- ------- -------
Average number of outstanding Ordinary Shares (millions) 22,030 19,386 20,728 19,362
======= ======= ======= =======
</TABLE>
---------------
(a)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 16.
<PAGE>
Page 12
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
(Unaudited)
($ million)
Fixed assets
<S> <C> <C> <C> <C>
Intangible assets 14,725 3,344
Tangible assets 67,080 52,631
Investments 16,422 10,109
-------- --------
98,227 66,084
Current assets
Inventories 6,630 5,124
Receivables 21,139 16,802
Investments 2,616 220
Cash at bank and in hand 3,313 1,331
-------- --------
33,698 23,477
-------- --------
Current liabilities - falling due within one year
Finance debt 2,833 4,900
Accounts payable and accrued liabilities 24,428 18,375
-------- --------
27,261 23,275
-------- --------
Net current assets 6,437 202
-------- --------
Total assets less current liabilities 104,664 66,286
Noncurrent liabilities
Finance debt 16,354 9,644
Accounts payable and accrued liabilities 2,155 2,245
Provisions for liabilities and charges 12,027 10,055
-------- --------
30,536 21,944
-------- --------
Net assets 74,128 44,342
Minority shareholders' interest 1,836 1,061
-------- --------
BP Amoco shareholders' interest (a) - Note 15 72,292 43,281
======== ========
Represented by:
Capital shares
Preference 21 21
Ordinary 5,657 4,871
Paid-in surplus 3,559 3,684
Retained earnings 35,730 34,008
Merger and other reserve 27,325 697
-------- --------
72,292 43,281
======== ========
</TABLE>
---------------
(a) 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 16.
<PAGE>
Page 13
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASHFLOWS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
Net cash inflow from operating activities 5,244 2,329 8,008 3,158
------- ------- ------- -------
Dividends from joint ventures 332 230 527 442
------- ------- ------- -------
Dividends from associated undertakings 143 98 174 143
------- ------- ------- -------
Servicing of finance and returns on investments
Interest received 114 50 149 82
Interest paid (344) (316) (568) (597)
Dividends received 2 13 3 20
Dividends paid to minority shareholders (6) (31) (8) (96)
------- ------- ------- -------
Net cash outflow from servicing of finance
and returns on investments (234) (284) (424) (591)
------- ------- ------- -------
Taxation
UK corporation tax (64) (59) (264) (131)
Overseas tax (889) (89) (1,226) (62)
------- ------- ------- -------
Tax paid (953) (148) (1,490) (193)
------- ------- ------- -------
Capital expenditure
Payments for fixed assets (2,765) (1,678) (4,186) (3,193)
Proceeds from the sale of fixed assets 182 352 588 439
------- ------- ------- -------
Net cash outflow for capital expenditure (2,583) (1,326) (3,598) (2,754)
------- ------- ------- -------
Acquisitions and disposals
Investments in associated undertakings (244) (51) (441) (139)
Acquisitions - (45) (869) (45)
Net investment in joint ventures (121) (69) (123) (269)
Proceeds from the sale of businesses 6,800 - 6,825 92
------- ------- ------- -------
Net cash inflow (outflow) for
acquisitions and disposals 6,435 (165) 5,392 (361)
------- ------- ------- -------
Equity dividends paid (1,133) (1,934) (2,104) (2,197)
------- ------- ------- -------
Net cash inflow (outflow) 7,251 (1,200) 6,485 (2,353)
======= ======= ======= =======
Financing (Note 13) 3,465 (1,438) 3,542 (2,267)
Management of liquid resources 1,919 - 1,939 (161)
Increase (decrease) in cash 1,867 238 1,004 75
------- ------- ------- -------
7,251 (1,200) 6,485 (2,353)
======= ======= ======= =======
</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 16.
<PAGE>
Page 14
BP AMOCO p.l.c. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASHFLOWS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
Reconciliation of historical cost profit before interest
and tax to net cash inflow from operating activities
Historical cost profit before interest and tax 4,813 2,461 9,149 2,656
Depreciation and amounts provided 1,831 1,152 3,026 2,396
Exploration expenditure written off 74 51 140 135
Share of profits of joint ventures and
associated undertakings + (535) (383) (988) (739)
Interest and other income (113) (61) (160) (113)
(Profit) loss on sale of fixed assets and businesses (153) (148) 18 (206)
Charge for provisions 282 30 437 479
Utilization of provisions (129) (115) (333) (210)
(Increase) decrease in stocks (611) (603) (866) (604)
(Increase) decrease in debtors (2,446) (774) (3,586) (1,788)
(Decrease) increase in creditors 2,231 719 1,171 1,152
------- ------- ------- -------
Net cash inflow from operating activities 5,244 2,329 8,008 3,158
======= ======= ======= =======
Financing
Long-term borrowing (1,228) (1,616) (1,540) (1,666)
Repayments of long-term borrowing 487 558 580 1,351
Short-term borrowing (59) (463) (682) (2,655)
Repayments of short-term borrowing 3,249 148 4,199 869
------- ------- ------- -------
2,449 (1,373) 2,557 (2,101)
Issue of ordinary share capital (108) (65) (139) (166)
Repurchase of share capital 829 - 829 -
Stamp duty reserve tax 295 - 295 -
------- ------- ------- -------
Net cash outflow (inflow) from financing 3,465 (1,438) 3,542 (2,267)
======= ======= ======= =======
---------------
+ Includes the following amounts of depreciation
for the BP/Mobil European JV 71 72 148 150
======= ======= ======= =======
</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 16.
<PAGE>
Page 15
BP AMOCO p.l.c. AND SUBSIDIARIES
CAPITAL EXPENDITURE AND ACQUISITIONS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
By business
Exploration and Production
UK 277 203 440 447
Rest of Europe 36 5 60 13
USA 819 400 1,200 762
Rest of World 410 490 705 810
------- ------- ------- -------
1,542 1,098 2,405 2,032
------- ------- ------- -------
Gas and Power
UK* 28 - 30 -
Rest of Europe 1 - 2 -
USA* 28 3 28 3
Rest of World - 1 4 1
------- ------- ------- -------
57 4 64 4
------- ------- ------- -------
Refining and Marketing
UK** 29 41 918 75
Rest of Europe 65 96 109 176
USA 336 130 413 284
Rest of World 88 62 180 110
------- ------- ------- -------
518 329 1,620 645
------- ------- ------- -------
Chemicals
UK 136 103 288 163
Rest of Europe 34 71 67 132
USA 52 84 91 147
Rest of World 58 52 325 77
------- ------- ------- -------
280 310 771 519
------- ------- ------- -------
Other businesses and corporate+ 647 38 700 63
------- ------- ------- -------
3,044 1,779 5,560 3,263
======= ======= ======= =======
By geograpical area
UK 1,077 376 2,325 720
Rest of Europe 138 172 244 323
USA 1,273 626 1,770 1,221
Rest of World 556 605 1,221 999
------- ------- ------- -------
3,044 1,779 5,560 3,263
======= ======= ======= =======
Includes the following amounts for the
BP/Mobil European joint venture 86 127 141 234
======= ======= ======= =======
</TABLE>
* The three months ended June 30, 2000 includes investment in Great Yarmouth
Power Station and GreenMountain.com.
** The six months ended June 30, 2000 includes $869 million for the purchase of
some 19.5% of Burmah Castrol's issued share capital.
+ The three months ended June 30, 2000 includes $578 million for the
acquisition of a 2.2% interest in PetroChina.
<PAGE>
Page 16
BP AMOCO p.l.c. AND SUBSIDIARIES
OPERATING INFORMATION
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000* 1999
($ million)
Crude oil and natural gas liquids production
(thousand barrels per day), (net of royalties)
UK 519 565 550 575
Rest of Europe 88 98 90 102
USA 705 794 749 804
Rest of World 585 592 550 592
------- ------- ------- -------
Total crude oil and liquids production 1,897 2,049 1,939 2,073
======= ======= ======= =======
Natural gas production (million cubic feet per day)
UK 1,630 1,132 1,688 1,310
Rest of Europe 99 146 142 194
USA 3,188 2,380 2,760 2,406
Rest of World 2,777 2,286 2,412 2,097
------- ------- ------- -------
Total natural gas production 7,694 5,944 7,002 6,007
======= ======= ======= =======
Gas sales volumes (million cubic feet per day)
UK 1,482 1,052 1,525 1,320
Rest of Europe 148 142 168 195
USA 6,239 4,178 5,512 3,643
Rest of World 4,616 2,918 4,311 2,760
------- ------- ------- -------
Total gas sales volumes 12,485 8,290 11,516 7,918
======= ======= ======= =======
Refinery throughputs (thousand barrels per day)
UK 265 285 273 279
Rest of Europe 535 519 528 541
USA 1,853 1,396 1,573 1,336
Rest of World 368 383 360 383
------- ------- ------- -------
Total refinery throughput 3,021 2,583 2,734 2,539
======= ======= ======= =======
Oil sales volumes (thousand barrels per day)
Refined products
UK 227 231 225 236
Rest of Europe 781 785 774 785
USA 2,027 1,597 1,750 1,528
Rest of World 584 571 617 614
------- ------- ------- -------
Total marketing sales 3,619 3,184 3,366 3,163
Trading/supply sales 2,071 1,928 1,846 1,851
------- ------- ------- -------
Total refined product sales 5,690 5,112 5,212 5,014
Crude oil 6,271 4,175 6,383 4,062
------- ------- ------- -------
Total oil sales 11,961 9,287 11,595 9,076
======= ======= ======= =======
Chemicals production+ (thousand tonnes)
UK 658 941 1,525 1,916
Rest of Europe 1,692 1,507 3,332 2,916
USA 2,562 2,488 5,181 4,787
Rest of World 577 579 1,154 1,039
------- ------- ------- -------
Total production 5,489 5,515 11,192 10,658
======= ======= ======= =======
</TABLE>
+ Includes BP share of associated undertakings and other interests in
production.
* The daily average operating information for the six months ended June 30,
2000 includes ARCO with effect from April 14.
<PAGE>
Page 17
BP AMOCO p.l.c. AND SUBSIDIARIES
ENVIRONMENTAL INDICATORS
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
Average oil realizations - $/bbl
UK 26.24 14.75 26.23 12.86
USA 23.77 14.12 24.18 11.96
Rest of World 24.64 14.51 25.41 12.51
BP average 24.98 14.49 25.30 12.45
Average natural gas realizations - $/mcf
UK 1.99 2.24 2.12 2.27
USA 3.01 1.97 2.73 1.78
Rest of World 2.20 1.42 2.00 1.51
BP average 2.51 1.82 2.33 1.81
Henry Hub gas price ($/mcf) 3.44 2.15 2.99 1.95
Global Indicator Refining Margins *- $/bbl
UK 4.26 0.81 3.16 1.01
USA 5.22 1.48 3.95 1.22
Rest of World 0.63 0.17 1.53 0.48
BP average 4.69 1.21 3.56 1.12
Chemicals Indicator Margin+ - $/te 143 96 128 108
</TABLE>
* The Global Indicator Refining Margin (GIM) is the average of seven regional
indicator margins weighted for BP's crude refining capacity in each region.
Each regional indicator margin is based on a single representative crude with
product yields characteristic of the typical level of upgrading complexity.
+ The Chemicals Indicator Margin (CIM) is a weighted average of
externally-based product margins. It is based on market data collected by
Chem Systems in their quarterly market analyses, then weighted based on BP's
product portfolio. While it does not cover our entire portfolio, it includes
a broader range of products than our previous indicator. Among the products
and businesses covered in the CIM are the olefins and derivatives, the
aromatics and derivatives, linear alpha-olefins, acetic acid, vinyl acetate
monomer and nitriles. Not included are Fabrics and Fibres, plastic
fabrications, poly alpha-olefins, anhydrides, Engineering Polymers and Carbon
Fibres, speciality intermediates, and the remaining parts of the solvents and
acetyls businesses.
The rates used in preparing these Financial Statements are shown below:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
US dollar/Sterling exchange rates
Average rates for the period 1.53 1.61 1.57 1.62
Period-end rates 1.52 1.58 1.52 1.58
======= ======= ======= =======
</TABLE>
<PAGE>
Page 18
BP AMOCO p.l.c. AND SUBSIDIARIES
SPECIAL ITEMS AND ACQUISITION AMORTIZATION BY SEGMENT (PRE-TAX)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
Special Items
Exploration and Production
UK 70 11 70 43
Rest of Europe - 6 - 8
USA 152 9 152 57
Rest of World 37 2 61 6
------- ------- ------- -------
259 28 283 114
------- ------- ------- -------
Gas and Power
UK - - - -
Rest of Europe - - - -
USA - - - -
Rest of World - - - -
------- ------- ------- -------
- - - -
------- ------- ------- -------
Refining and Marketing
UK - 3 - 16
Rest of Europe 29 - 29 -
USA 112 29 112 33
Rest of World - 1 - 1
------- ------- ------- -------
141 33 141 50
------- ------- ------- -------
Chemicals
UK 3 24 3 26
Rest of Europe 1 31 1 35
USA 46 4 46 8
Rest of World - - - 1
------- ------- ------- -------
50 59 50 70
------- ------- ------- -------
Other businesses and corporate
UK 19 30 19 30
Rest of Europe - 2 - 2
USA 131 44 147 44
Rest of World - 1 - 1
------- ------- ------- -------
150 77 166 77
======= ======= ======= =======
Total 600 197 640 311
======= ======= ======= =======
Acquisition Amortization
Exploration and Production
UK 6 - 6 -
USA 227 - 227 -
Rest of World 20 - 20 -
------- ------- ------- -------
253 - 253 -
------- ------- ------- -------
Refining and Marketing
USA 64 - 64 -
------- ------- ------- -------
Total 317 - 317 -
------- ------- ------- -------
</TABLE>
<PAGE>
Page 19
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, 1999
included in BP Amoco's Annual Report on Form 20-F filed with the Securities
and Exchange Commission.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
2. Turnover
By business
Exploration and Production 7,278 4,355 13,782 7,825
Gas and Power 2,772 1,153 4,945 2,369
Refining and Marketing 25,120 13,988 45,898 24,155
Chemicals 2,914 2,248 5,695 4,371
Other businesses and corporate 51 45 92 75
------- ------- ------- -------
38,135 21,789 70,412 38,795
Less: sales between businesses 4,977 2,773 9,543 5,137
------- ------- ------- -------
Group excluding joint ventures 33,158 19,016 60,869 33,658
Sales of joint ventures 5,869 3,923 11,249 7,265
------- ------- ------- -------
39,027 22,939 72,118 40,923
======= ======= ======= =======
By geographical area
UK 11,112 6,397 21,462 11,192
Rest of Europe 1,859 1,468 3,733 2,658
USA 17,575 9,043 30,548 15,673
Rest of World 6,977 4,248 13,337 7,702
------- ------- ------- -------
37,523 21,156 69,080 37,225
Less: Sales between areas 4,365 2,140 8,211 3,567
------- ------- ------- -------
Group excluding joint ventures 33,158 19,016 60,869 33,658
======= ======= ======= =======
Sales of joint ventures
UK 1,414 836 2,774 1,583
Rest of Europe 5,358 3,528 10,365 6,517
USA 159 27 159 51
Rest of World 128 99 249 159
------- ------- ------- -------
7,059 4,490 13,547 8,310
Less: sales between areas 1,190 567 2,298 1,045
------- ------- ------- -------
5,869 3,923 11,249 7,265
======= ======= ======= =======
3. Production taxes
UK petroleum revenue tax 184 49 374 82
Overseas production taxes 304 166 612 275
------- ------- ------- -------
488 215 986 357
======= ======= ======= =======
4. Exploration expense
Exploration and Production
UK 15 7 23 20
Rest of Europe 8 11 12 35
USA 90 30 125 50
Rest of World 55 76 139 191
------- ------- ------- -------
168 124 299 296
======= ======= ======= =======
</TABLE>
<PAGE>
Page 20
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
5. 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, 1999.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
6. Total replacement cost operating profit
By business
Exploration and Production
UK 896 458 1,984 776
Rest of Europe 185 74 373 149
USA 1,084 425 2,275 617
Rest of World 950 508 1,686 673
------- ------- ------- -------
3,115 1,465 6,318 2,215
------- ------- ------- -------
Gas and Power
UK 4 3 (1) 8
Rest of Europe 11 29 66 81
USA 11 2 10 6
Rest of World - 4 3 11
------- ------- ------- -------
26 38 78 106
------- ------- ------- -------
Refining and Marketing
UK 148 67 181 45
Rest of Europe 130 58 166 158
USA 856 332 1,280 445
Rest of World 143 103 324 258
------- ------- ------- -------
1,277 560 1,951 906
------- ------- ------- -------
Chemicals
UK (33) (26) (64) 16
Rest of Europe 118 21 196 82
USA 196 155 364 262
Rest of World 39 48 83 44
------- ------- ------- -------
320 198 579 404
------- ------- ------- -------
Other businesses and corporate (299) (186) (526) (310)
------- ------- ------- -------
4,439 2,075 8,400 3,321
======= ======= ======= =======
By geographical area
UK 986 397 1,960 744
Rest of Europe 461 191 827 473
USA 1,854 823 3,506 1,111
Rest of World 1,138 664 2,107 993
------- ------- ------- -------
4,439 2,075 8,400 3,321
======= ======= ======= =======
Includes the following amounts for joint
ventures and associated undertakings 454 246 794 506
======= ======= ======= =======
</TABLE>
<PAGE>
Page 21
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
7. Analysis of exceptional items
Profit (loss) on sale of fixed assets
and businesses
Exploration and Production 168 8 206 (1)
Gas and Power - - - -
Refining and Marketing 5 59 24 103
Chemicals - 102 (210) 164
Other businesses and corporate (12) (7) (16) (7)
------- ------- ------- -------
161 162 4 259
Restructuring costs - (348) - (1,503)
------- ------- ------- -------
Total exceptional items before taxation 161 (186) 4 (1,244)
------- ------- ------- -------
Includes the following amounts for joint
ventures and associated undertakings 8 8 22 47
======= ======= ======= =======
</TABLE>
8. Restructuring and integration costs
During the year ended December 31, 1999 BP Amoco recognized exceptional
charges before tax of $1,943 million for restructuring costs. The
restructuring costs arose from restructuring activity across the Group
following the merger of BP and Amoco at the end of 1998 and relate
predominantly to the Group's US operations. The main areas of activity were
the elimination of duplication in the former BP and Amoco operations and
ongoing restructuring to adapt to the changing business environment, and
some further outsourcing. The major elements of the restructuring charges
comprised employee severance costs ($1,212 million) and provisions to cover
future rental payments on surplus leasehold office accommodation and other
property ($297 million). Also included in the restructuring charges were
office closure costs, contract termination payments and asset write-offs.
The cash outflow for these restructuring charges during 1999 was $976
million. During the first six months of 2000 the cash outflow for
restructuring charges totalled $224 million.
During 1999, some 16,000 employees left the Group through severance or
outsourcing arrangements. Of these, some 13,000 were based in the USA. The
reductions arose mainly in Houston, Texas; Chicago, Illinois; and Cleveland
and Warrensville, Ohio. Approximately 4,000 more employees had received
notification of the termination of their employment by the end of 1999 and
are expected to leave the Group in 2000. In the six months ended June 30,
2000 some 1,700 employees left the Group.
During the three months ended June 30, 2000 following the combination of BP
and ARCO, integration costs of $464 million including severance costs of
$311 million and provisions against surplus properties of $100 million were
recognized. Approximately 1,800 ARCO employees, mainly in the USA, were
notified of the termination of their employment. By the end of June
approximately 300 employees had left the Group and approximately $5 million
of severance and ancillary benefits had been paid.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
9. Inventory holding gains (losses)
Exploration and Production 1 1 2 (10)
Gas and Power 17 - 22 -
Refining and Marketing 153 531 616 576
Chemicals 42 40 105 13
------- ------- ------- -------
213 572 745 579
======= ======= ======= =======
Includes the following amounts for joint
ventures and associated undertakings 95 129 194 186
======= ======= ======= =======
</TABLE>
<PAGE>
Page 22
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
10.Interest expense
Group interest payable 341 263 572 499
Capitalized (36) (11) (51) (26)
------- ------- ------- -------
305 252 521 473
Joint ventures 21 15 35 31
Associated undertakings 32 28 62 65
Unwinding of discount on provisions 45 33 81 63
------- ------- ------- -------
403 328 699 632
======= ======= ======= =======
11.Charge for taxation
United Kingdom 287 100 604 188
Overseas 1,002 373 1,572 341
------- ------- ------- -------
1,289 473 2,176 529
======= ======= ======= =======
Includes the following amounts for joint
ventures and associated undertakings 26 26 78 50
======= ======= ======= =======
12.Return on Average Capital Employed
Replacement cost basis
RC profit before exceptional items 2,866 1,226 5,543 1,903
Interest 403 328 699 632
Minority shareholders' interest 22 25 90 36
------- ------- ------- -------
3,291 1,579 6,332 2,571
Average Capital Employed 94,599* 57,551 + 57,905
------- ------- ------- -------
ROACE 13.9% 11.0% + 8.9%
------- ------- ------- -------
Pro forma and special items adjustments
Acquisition amortization 317 - 317 -
Special items (post tax) 442 141 472 225
Average Capital Employed acquisition adjustment 18,079** - + -
------- ------- ------- -------
ROACE - Pro forma basis adjusted for special items 21.2% 12.0% + 9.7%
------- ------- ------- -------
Historical cost basis
Historical cost profit after exceptional items 3,099 1,635 6,184 1,459
Interest 403 328 699 632
Minority shareholders' interest 22 25 90 36
------- ------- ------- -------
3,524 1,988 6,973 2,127
------- ------- ------- -------
ROACE 14.9% 13.8% o 7.3%
</TABLE>
* Based on an opening capital employed of $95,883 million and closing
capital employed of $93,315 million.
** Based on the average pro forma adjustment for intangible and tangible
fixed assets (average of $18,237 million and $17,920 million).
+ As the combination of ARCO was completed in April it is not meaningful to
show ROACE for the six months ended June 30, 2000.
<PAGE>
Page 23
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
13.Analysis of changes in net debt
Opening balance
Finance debt 14,357 14,510 14,544 13,755
Less: Cash 462 270 1,331 405
Current asset investments 274 305 220 470
------- ------- ------- -------
Opening net debt 13,621 13,935 12,993 12,880
------- ------- ------- -------
Closing balance
Finance debt 19,187 15,850 19,187 15,850
Less: Cash 3,313 467 3,313 467
Current asset investments 2,616 304 2,616 304
------- ------- ------- -------
Closing net debt 13,258 15,079 13,258 15,079
------- ------- ------- -------
Decrease (increase) in net debt 363 (1,144) (265) (2,199)
======= ======= ======= =======
Movement in cash/bank overdrafts 1,867 238 1,004 75
Increase (decrease) in current asset investments 1,919 - 1,939 (161)
Net cash outflow (inflow) from financing
(excluding share capital) 2,449 (1,373) 2,557 (2,101)
Other movements 28 (7) 84 (7)
ARCO net debt acquired (5,863) - (5,863) -
------- ------- ------- -------
Movements in net debt before exchange effects 400 (1,142) (279) (2,194)
Exchange adjustments (37) (2) 14 (5)
------- ------- ------- -------
Decrease (increase) in net debt 363 (1,144) (265) (2,199)
======= ======= ======= =======
14.Net Debt Ratio - Net Debt: Net Debt + Equity
Gross debt 19,187 15,850 19,187 15,850
Cash and current asset investments 5,929 771 5,929 771
------- ------- ------- -------
Net debt 13,258 15,079 13,258 15,079
Equity 74,128 42,632 74,128 42,632
------- ------- ------- -------
Net debt ratio 15% 26% 15% 26%
Acquisition adjustment 17,920 - 17,920 -
------- ------- ------- -------
Net debt ratio - pro forma basis 19% 26% 19% 26%
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
15.Movement in BP Amoco shareholders' interest $ million
(Unaudited)
<S> <C>
Balance at December 31, 1999 43,281
Profit for the period 6,184
Distribution to shareholders (2,262)
Currency translation differences (1,216)
Employee share schemes 149
Share buy-back (976)
ARCO acquisition 27,427
Share premium (295)
-------
Balance at June 30, 2000 72,292
=======
</TABLE>
<PAGE>
Page 24
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
16.US generally accepted accounting principles
The following is a summary of the adjustments to profit for the period and to
BP Amoco shareholders' interest which would be required if generally accepted
accounting principles in the United States (US GAAP) had been applied instead
of those generally accepted in the United Kingdom.
<TABLE>
<CAPTION>
Profit for the period Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
Profit as reported in the consolidated
statement of income 3,099 1,635 6,184 1,459
Adjustments:
Depreciation charge (101) 3 (120) (7)
Decommissioning and environmental expense (98) (41) (166) (83)
Onerous property leases (5) - (12) 156
Interest expense 45 33 81 63
Deferred taxation (199) (24) (713) 14
Other 16 (28) 31 (23)
------ ------ ------ ------
(342) (57) (899) 120
------ ------ ------ ------
Profit for the period as adjusted
to accord with US GAAP 2,757 1,578 5,285 1,579
====== ====== ====== ======
Profit for the period as adjusted:
Per Ordinary Share - cents
Basic 12.51 8.14 25.50 8.16
Diluted 12.42 8.09 25.31 8.11
====== ====== ====== ======
Per American Depositary Share - cents (a)
Basic 75.06 48.84 153.00 48.96
Diluted 74.52 48.54 151.86 48.66
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
BP Amoco shareholders' interest June 30, 2000 December 31, 1999 (b)
(Unaudited)
($ million)
<S> <C> <C>
BP Amoco shareholders' interest as reported
in the consolidated balance sheet 72,292 43,281
Adjustments:
Fixed assets 7,283 1,237
Ordinary shares held for future
awards to employees (396) (456)
Sale and leaseback of Chicago office building (413) (413)
Decommissioning and environmental provisions (406) (499)
Onerous property leases 131 139
Deferred taxation (14,665) (6,082)
Quarterly dividend 1,129 972
Pension liability adjustment (144) (144)
Other (160) (197)
------- -------
(7,641) (5,443)
------- -------
BP Amoco shareholders' interest as
adjusted to accord with US GAAP 64,651 37,838
======= =======
</TABLE>
---------------
(a) One American Depositary share is equivalent to six Ordinary Shares.
(b) As reported in Note 44 of Notes to Financial Statements included in BP
Amoco's Annual Report on Form 20-F for the year ended December 31, 1999.
<PAGE>
Page 25
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
16.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 Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
Operating activities
Profit after taxation 3,121 1,660 6,274 1,495
Adjustments to reconcile profits after tax to
net cash provided by operating activities
Depreciation and amounts provided 1,831 1,152 3,026 2,396
Exploration expense 74 51 140 135
Share of (profit) loss of joint ventures
and associates less dividends received (60) (55) (287) (154)
(Profit) loss on sale of businesses and fixed assets (153) (148) 18 (206)
Working capital movement (see analysis below) 796 (547) (1,232) (1,422)
Other (537) 42 (592) 477
------- ------- ------- -------
Net cash provided by operating activities 5,072 2,155 7,347 2,721
------- ------- ------- -------
Investing activities
Capital expenditures (2,799) (1,582) (4,217) (2,866)
Acquisitions, net of cash acquired - (45) (869) (45)
Investment in associated undertakings (244) (51) (441) (139)
Net investment in joint ventures (121) (69) (123) (269)
Proceeds from disposal of assets 6,982 352 7,413 531
------- ------- ------- -------
Net cash used in investing activities 3,818 (1,395) 1,763 (2,788)
------- ------- ------- -------
Financing activities
Net proceeds from shares issued (repurchased) (1,016) 65 (985) 166
Proceeds from long-term financing 1,228 1,616 1,540 1,666
Repayments of long-term financing (487) (558) (580) (1,351)
Net (decrease) increase in short-term debt (3,190) 315 (3,517) 1,786
Dividends paid - BP Amoco (1,133) (1,934) (2,104) (2,197)
- Minority shareholders (6) (31) (8) (96)
------- ------- ------- -------
Net cash used in financing activities (4,604) (527) (5,654) (26)
------- ------- ------- -------
Currency translation differences
relating to cash and cash equivalents 42 (40) 38 (15)
------- ------- ------- -------
Increase (decrease) in cash and cash equivalents 4,328 193 3,494 (108)
------- ------- ------- -------
Cash and cash equivalents at beginning of period 621 493 1,455 794
------- ------- ------- -------
Cash and cash equivalents at end of period 4,949 686 4,949 686
------- ------- ------- -------
Analysis of working capital movement
Increase in inventories (611) (603) (866) (604)
Increase in receivables (2,261) (837) (3,441) (1,520)
Increase in current liabilities
(excluding finance debt) 3,668 893 3,075 702
------- ------- ------- -------
Total working capital 796 (547) (1,232) (1,422)
======= ======= ======= =======
</TABLE>
<PAGE>
Page 26
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
16.US generally accepted accounting principles - continued
Earnings per share
Basic earnings per share excludes the dilutive effects of options, warrants
and convertible securities. Diluted earnings per share reflects the potential
dilution that could occur if options, warrants or convertible securities were
exercised or converted into ordinary shares that shared in the earnings of
the Group. The dilutive effect of outstanding share options is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
(shares million)
Weighted average number of ordinary shares 22,030 19,386 20,728 19,362
Ordinary shares issuable under employee share schemes 168 108 152 112
------- ------- ------- -------
22,198 19,494 20,880 19,474
======= ======= ======= =======
</TABLE>
Comprehensive income
The components of comprehensive income, net of related tax are as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
2000 1999 2000 1999
($ million)
Profit for the period as adjusted to
accord with US GAAP 2,667 1,578 5,285 1,579
Currency translation differences (721) (210) (1,216) (1,016)
Pension liability - - - -
------- ------- ------- -------
Comprehensive income 1,946 1,368 4,069 563
======= ======= ======= =======
</TABLE>
Accumulated other comprehensive income at June 30, 2000 and December 31, 1999
was $(2,734) million and $(1,518) million, respectively.
<PAGE>
Page 27
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
16.US generally accepted accounting principles - continued
Accounting for associated undertakings and joint ventures
Under the provisions of UK Financial Reporting Standard No.9 `Associates and
Joint Ventures', the Company includes its share of the results of associated
undertakings and joint ventures (JVs) within various captions in the
consolidated statement of income. Under US GAAP, the Company's share of the
after tax profit or loss of associated undertakings and joint ventures would
be recognized as a single amount. The following summarizes the
reclassifications necessary to accord with US GAAP.
<TABLE>
<CAPTION>
Three months ended June 30, 2000
(Unaudited)
------------------------------------------
As US GAAP
Reported Reclassification Presentation
------------------------------------------
($ million)
<S> <C> <C> <C>
Consolidated statement of income
Other income 354 478 832
Share of profits of JVs and associated undertakings 454 (454) -
Exceptional items before taxation 161 (8) 153
Inventory holding gains (losses) 213 (95) 118
Interest expense 403 (53) 350
Taxation 1,289 (26) 1,263
Profit for the period 3,099 - 3,099
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30, 2000
(Unaudited)
------------------------------------------
As US GAAP
Reported Reclassification Presentation
------------------------------------------
($ million)
<S> <C> <C> <C>
Consolidated statement of income
Other income 438 835 1,273
Share of profits of JVs and associated undertakings 794 (794) -
Exceptional items before taxation 4 (22) (18)
Inventory holding gains (losses) 745 (194) 551
Interest expense 699 (97) 602
Taxation 2,176 (78) 2,098
Profit for the period 6,184 - 6,184
</TABLE>
<TABLE>
<CAPTION>
Three months ended June 30, 1999
(Unaudited)
------------------------------------------
As US GAAP
Reported Reclassification Presentation
------------------------------------------
($ million)
<S> <C> <C> <C>
Consolidated statement of income
Other income 164 314 478
Share of profits of JVs and associated undertakings 246 (246) -
Exceptional items before taxation (186) (8) (194)
Inventory holding gains (losses) 572 (129) 443
Interest expense 328 (43) 285
Taxation 473 (26) 447
Profit for the period 1,635 - 1,635
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30, 1999
(Unaudited)
------------------------------------------
As US GAAP
Reported Reclassification Presentation
------------------------------------------
($ million)
<S> <C> <C> <C>
Consolidated statement of income
Other income 269 593 862
Share of profits of JVs and associated undertakings 506 (506) -
Exceptional items before taxation (1,244) (47) (1,291)
Inventory holding gains (losses) 579 (186) 393
Interest expense 632 (96) 536
Taxation 529 (50) 479
Profit for the period 1,459 - 1,459
</TABLE>
<PAGE>
Page 28
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
16.US generally accepted accounting principles - concluded
Impact of new accounting standards
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.
17.Comparative information relating to the Exploration and Production
and Gas and Power businesses
Following the creation of the Gas and Power business, which is reported
separately from January 1, 2000, the comparative figures for 1999 have been
restated. The following information reflects that restatement.
<TABLE>
<CAPTION>
YEAR
THREE MONTHS ENDED ENDED
--------------------------------- -------
MAR 31, JUN 30, SEP 30, DEC 31, DEC 31,
1999 1999 1999 1999 1999
--------------------------------- -------
$ MILLION
<S> <C> <C> <C> <C> <C>
Replacement cost operating profit
Previously reported Exploration
& Production total 818 1,503 2,240 2,633 7,194
================================= ======
Restated as:
Exploration and Production
UK 318 458 673 861 2,310
Rest of Europe 75 74 163 175 487
USA 192 425 597 922 2,136
Rest of World 165 508 750 627 2,050
--------------------------------- ------
750 1,465 2,183 2,585 6,983
================================= ======
Gas and Power
UK 5 3 4 2 14
Rest of Europe 52 29 44 46 171
USA 4 2 3 (2) 7
Rest of World 7 4 6 2 19
--------------------------------- ------
68 38 57 48 211
================================= ======
Turnover
By business
Exploration and Production 3,470 4,355 5,678 5,630 19,133
Gas and Power 1,216 1,153 1,359 1,595 5,323
Refining and Marketing 10,167 13,988 16,697 22,041 62,893
Chemicals 2,123 2,248 2,297 2,724 9,392
Other businesses and corporate 30 45 39 84 198
--------------------------------- -------
17,006 21,789 26,070 32,074 96,939
Less: sales between businesses 2,364 2,773 4,112 4,124 13,373
--------------------------------- -------
Group excluding JVs 14,642 19,016 21,958 27,950 83,566
Sales of joint ventures 3,342 3,923 4,707 5,642 17,614
--------------------------------- --------
17,984 22,939 26,665 33,592 101,180
================================= ========
</TABLE>
<PAGE>
Page 29
BP AMOCO p.l.c. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - concluded
17.Comparative information relating to the Exploration and Production
and Gas and Power businesses - continued
<TABLE>
<CAPTION>
YEAR
THREE MONTHS ENDED ENDED
--------------------------------- -------
MAR 31, JUN 30, SEP 30, DEC 31, DEC 31,
1999 1999 1999 1999 1999
--------------------------------- -------
$ MILLION
<S> <C> <C> <C> <C> <C>
Exceptional items
Previously reported Exploration &
Production total (9) 8 (419) (91) (511)
================================= =======
Restated as:
Exploration and Production (9) 8 (419) (105) (525)
Gas and Power - - - 14 14
================================= =======
Capital expenditure and acquisitions
Previously reported Exploration &
Production total 934 1,102 775 1,401 4,212
================================= =======
Restated as:
Exploration and Production
UK 244 203 135 187 769
Rest of Europe 8 5 44 37 94
USA 362 400 318 793 1,873
Rest of World 320 490 277 371 1,458
--------------------------------- -------
934 1,098 774 1,388 4,194
================================= =======
Gas and Power
UK - - - - -
Rest of Europe - - - 3 3
USA - 3 - 5 8
Rest of World - 1 1 5 7
--------------------------------- -------
- 4 1 13 18
================================= =======
</TABLE>
<PAGE>
Page 30
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
BP America Inc. (a)(b)(e)(f)(g)(h) 2000 1999 2000 1999
($ million)
Sales and other operating revenue 21,082 10,512 36,812 18,490
Gross profit (c) 4,315 2,269 7,628 3,702
Profit for the period (d) 2,544 1,232 4,585 780
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
(Unaudited) (Unaudited)
($ million)
<S> <C> <C>
Fixed and other assets 74,139 40,110
Current assets 23,355 15,479
------ ------
Total assets 97,494 55,589
====== ======
Current liabilities 19,122 13,633
Noncurrent liabilities 17,819 14,543
Minority shareholders' interest 2,239 970
Shareholders' interest 58,314 26,443
------ ------
Total liabilities and shareholders' interest 97,494 55,589
====== ======
</TABLE>
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
The Standard Oil Company (a)(e) 2000 1999 2000 1999
($ million)
Sales and other operating revenue 7,358 3,733 14,496 5,960
Gross profit (c) 1,132 667 2,211 912
Profit for the period (d) 600 328 1,315 312
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
(Unaudited)
($ million)
<S> <C> <C>
Fixed and other assets 12,515 12,584
Current assets 7,915 6,664
------ ------
Total assets 20,430 19,248
====== ======
Current liabilities 4,716 4,709
Noncurrent liabilities 4,817 4,957
Shareholders' interest 10,897 9,582
------ ------
Total liabilities and shareholders' interest 20,430 19,248
====== ======
</TABLE>
<PAGE>
Page 31
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - continued
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
BP Pipelines (Alaska) Inc. (a) 2000 1999 2000 1999
($ million)
Sales and other operating revenue 116 103 224 228
Gross profit (c) 54 50 91 95
Profit for the period 41 32 71 57
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
(Unaudited)
($ million)
<S> <C> <C>
Fixed and other assets 1,277 1,290
Current assets 919 853
------ ------
Total assets 2,196 2,143
====== ======
Current liabilities 140 128
Noncurrent liabilities 937 967
Shareholders' interest 1,119 1,048
------ ------
Total liabilities and shareholders' interest 2,196 2,143
====== ======
</TABLE>
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
BP Exploration (Alaska) Inc. (a)(g) 2000 1999 2000 1999
Sales and other operating revenue 4,038 2,066 8,567 3,031
Gross profit (c) 295 162 715 113
Profit (loss) for the period (d) 169 100 443 (10)
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
(Unaudited)
($ million)
<S> <C> <C>
Fixed and other assets 10,566 10,124
Current assets 3,314 3,117
------ ------
Total assets 13,880 13,241
====== ======
Current liabilities 2,404 2,119
Noncurrent liabilities 1,447 1,536
Shareholders' interest 10,029 9,586
------ ------
Total liabilities and shareholders' interest 13,880 13,241
====== ======
</TABLE>
<PAGE>
Page32
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) In April 2000, BP Amoco p.l.c. transferred its 100% ownership of BP Amoco
Corporation and Atlantic Richfield Company to BP America Inc. in exchange
for 4,385,079 and 2,129,809 additional shares of BP America Inc.,
respectively. Following the transfer, BP Amoco Corporation and the Atlantic
Richfield Company are wholly-owned subsidiaries of BP America Inc. In the
summarized financial information for BP America, Inc., 1999 amounts have
been restated to include BP Amoco Corporation.
(c) Gross profit equals sales and other operating revenue less associated
costs, which exclude distribution and administration expenses and
exploration expense.
(d) Profit for the three months ended June 30, 1999 for BP America Inc., The
Standard Oil Company, and BP Exploration (Alaska) Inc. includes
restructuring costs of $215 million, $55 million and $4 million
respectively. Profit (loss) for the six months ended June 30, 1999 for BP
America Inc., The Standard Oil Company and BP Exploration (Alaska) Inc.
includes restructuring charges of $1,154 million, $146 million and $35
million respectively.
(e) The December 1999 summarized balance sheets for BP America and Standard Oil
have been restated by $406 million for a reclassification from noncurrent
to current liabilities pertaining to the short term classification of
floating rate municipal bonds.
(f) In April 2000, the Alaskan operations of Atlantic Richfield Company,
comprising oil and gas production, crude oil marine transportation and
related crude oil inventory, were sold for proceeds totalling approximately
$5.8 billion.
(g) In April 2000, an agreement was reached between BP, Exxon Mobil and
Phillips to align the respective oil and gas equity interest of BP
Exploration (Alaska), Exxon Mobil and Phillips in the Prudhoe Bay Unit.
This agreement also provides for BP Exploration (Alaska) to become the
single operator.
(h) In April 2000, BP Amoco Corporation completed the sale of its interest in
Altura to Occidental Petroleum Corporation. The after-tax gain recorded was
some $140 million. Proceeds on the disposition of Altura were approximately
$1.2 billion.
<PAGE>
Page 33
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP AMOCO p.l.c.
(Registrant)
DATED: August 23, 2000 /s/ PAULA J CLAYTON
-------------------
P.J. CLAYTON
DEPUTY COMPANY SECRETARY
<PAGE>
Page 33
Exhibit 1
BP AMOCO p.l.c. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - concluded
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30, 2000
($ million, except ratios)
<S> <C>
Profit before taxation 8,450
Group's share of income in excess of dividends (309)
of joint ventures and associated undertakings
Captalized interest (36)
------
Profit as adjusted 8,105
------
Fixed charges:
Interest net of interest expense of joint ventures and 521
associated undertakings and unwinding of discount
Rental expense representative of interest 176
Capitalized interest 36
------
733
------
Total adjusted earnings available for payment of fixed charges 8,838
======
Ratio of earnings to fixed charges 12.1
======
Total adjusted earnings available for payment of fixed 8,652
charges, after taking account of adjustments to profit
before taxation to accord with US GAAP (a) ======
Ratio of earnings to fixed charges with adjustments to 11.8
accord with US GAAP ======
</TABLE>
---------------
(a) See Note 16 of Notes to Consolidated Financial Statements.
