<PAGE>
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, 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FROM THE DATE ON WHICH THIS REPORT IS FILED, TO THE EXTENT NOT SUPERSEDED BY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.
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BP AMOCO P.L.C. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GROUP RESULTS JANUARY - MARCH 2000
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
<S> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 3,961 1,246
REPLACEMENT COST PROFIT BEFORE EXCEPTIONAL ITEMS - $m 2,677 677
REPLACEMENT COST PROFIT FOR THE PERIOD - $m 2,553 (183)
HISTORICAL COST PROFIT FOR THE PERIOD - $m 3,085 (176)
PROFIT PER ORDINARY SHARE (a) - cents 15.88 (0.91)
DIVIDENDS PER ORDINARY SHARE (a) - cents 5.0 5.0
(a) Amounts for the three months ended March 31, 1999 have been restated for
the 2 for 1 share split on October 4, 1999.
For further information on replacement cost profit see Note 5 of Notes to
Consolidated Financial Statements.
</TABLE>
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's Annual Report on Form 20-F for the year ended
December 31, 1999. Comparative figures for the three months ended March 31, 1999
have been restated to reflect the creation of the Gas and Power business stream,
which is reported separately from January 1, 2000.
The Gas and Power business stream is responsible for BP Amoco'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 Amoco'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 profit before exceptional items (which excludes inventory
holding gains and losses) was $2,677 million for the three months ended March
31, 2000, compared with $677 million for the equivalent period of 1999. These
results included net special charges of $40 million ($30 million after tax) for
the three months ended March 31, 2000, and $114 million ($84 million after tax)
for the equivalent period of 1999. The special charges for the three months
ended March 31, 2000 related to the settlement of a lawsuit and damage incurred
to an aircraft; those of the corresponding period of 1999 related to integration
costs following the BP/Amoco merger. After excluding these special charges, the
profit of $2,707 million for the three months ended March 31, 2000 represented
an increase of 256% over the comparable result for 1999. This increase reflected
stronger oil and gas prices and improved refining margins, along with continued
performance improvements in all our businesses. Compared with the first quarter
of 1999, lower cash costs contributed around $280 million before tax. The cost
reduction related to distribution and marketing expenses and operating expenses
included in replacement cost of sales. In addition, there were other performance
improvements arising from an improved mix of sales.
The historical cost profit for the three months ended March 31, 2000 was $3,085
million including inventory holding gains of $532 million. For the equivalent
period of 1999 there was a loss of $176 million including inventory holding
gains of $7 million. The results for the first quarter of 2000 included net
exceptional losses of $157 million ($124 million after tax) in respect of net
losses on the sale of fixed assets and businesses and termination of operations;
those for the comparable period of 1999 included net exceptional losses of
$1,058 million ($860 million after tax) for restructuring costs and net profits
on the sale of fixed assets and businesses and termination of operations.
<PAGE>
Page 3
BP AMOCO P.L.C. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
Net taxation, other than production taxes, charged for the three months ended
March 31, 2000 was $887 million compared with $56 million in the equivalent
period last year. This included a tax credit of $33 million in respect of
exceptional items compared with $198 million for the first quarter of 1999. The
effective tax rate on replacement cost profit before exceptional items was 25%
for the three months ended March 31, 2000 compared with 27% for the equivalent
period of 1999, mainly reflecting 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 able to be used in 1999.
Net cash outflow for the three months ended March 31, 2000 was $766 million,
compared with $1,153 million for the equivalent period of 1999. The reduction in
cash outflow reflects improved operating cash flow, largely offset by higher
payments for capital expenditures and acquisitions and higher tax and dividend
payments.
Capital expenditure for the three months ended March 31, 2000 was $2.5 billion,
an increase of $1.0 billion compared with the same period in the previous year.
Capital expenditure for the first quarter of 2000 included $869 million for the
purchase of some 19.5% of Burmah Castrol plc's (Burmah Castrol) issued ordinary
share capital.
Net debt at the quarter end was $13.6 billion. The ratio of net debt to net debt
plus equity was 23% compared with 23% at December 31, 1999 and 25% at March 31,
1999. Interest expense for the three months ended March 31, 2000 was $296
million compared with $304 million in the equivalent period of 1999.
The return on average capital employed for the three months ended March 31,
2000, based on replacement cost profit before exceptional items and after adding
back interest expense and minority shareholders' interest, was 20% compared with
7% for the equivalent period of 1999. After adjusting to exclude special items,
and after adding back interest and minority shareholders' interest the return on
average capital employed was 21% for the first quarter of 2000 and 8% for the
first quarter of 1999.
BP Amoco p.l.c. announced a first quarterly dividend for 2000 of 5 cents per
Ordinary Share. Holders of Ordinary Shares will receive 3.220 pence per share
and holders of American Depositary Receipts (ADRs) $0.30 per ADS share. The
dividend is payable on June 12, 2000 to shareholders on the register on May 19,
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 June 12, 2000.
<PAGE>
Page 4
BP AMOCO P.L.C. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
DETAILED REVIEW OF BUSINESSES (EXCLUDING EXCEPTIONAL ITEMS)
EXPLORATION AND PRODUCTION
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
<S> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 3,203 750
RESULTS INCLUDED:
Exploration expense - $m 131 172
KEY STATISTICS:
Average prices : Crude oil - $/bbl 25.59 10.45
realized by BP Amoco
: Natural gas - $/mcf 2.18 1.8
Crude oil production (net of royalties) - mb/d 1,981 2,099
Natural gas production (net of royalties) - mmcf/d 6,309 6,072
Total production (net of royalties) (a) - mboe/d 3,069 3,146
(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.
</TABLE>
Exploration and Production's replacement cost operating profit for the first
three months of 2000 was $3,203 million. The adjusted result was $3,227 million
after adjusting for a special charge of $24 million. Average oil realizations
increased compared with a year ago by around $14 a barrel and natural gas
realizations by 38 cents/mcf. There were also benefits from cost savings and
lower exploration expense. Lower crude oil volumes reflected the effect of
divestments and the decline in mature fields in Alaska. Natural gas volumes
increased 4%, compared with the equivalent period of 1999, with additional
production from Trinidad.
The adjusted result represented an increase of 23% over the adjusted profit of
$2,676 million for the fourth quarter of 1999. The stronger oil price was again
a significant factor with realizations up almost $3 a barrel. Natural gas
realizations were at a similar level while cash costs were lower. These factors
more than offset the effect of slightly lower crude oil volumes and lower gas
volumes primarily in Trinidad, where domestic supply was affected by a plant
shut-in.
In February 2000, BP Amoco and the Algerian state-owned company, Sonatrach,
announced the go-ahead for the development of a $2.5-billion complex of seven
gas fields in central Algeria (BP Amoco 65%). First deliveries from the seven In
Salah fields are expected in 2003.
In March 2000, BP Amoco (64%) and Shell Exploration & Production Company (Shell)
announced the sale of their interests in Altura Energy, a US onshore
oil-producing joint venture. The transaction, with a total value for BP Amoco
and Shell together, amounted to $3.6 billion and closed in April, 2000. The
transaction is expected to result in an estimated profit after tax of
approximately $300 million for BP Amoco to be recognized in 2000.
During the quarter we announced a further successful gas condensate well in the
Shah Deniz field (BP Amoco 25.5% and operator), offshore Azerbaijan. The well
was drilled six kilometres to the south of the discovery SDX-1, which was
announced last year. A discovery was also made offshore Angola at the Jasmim-1
well in Block 17 (BP Amoco 16.7%). In addition, on the Australian North West
Shelf, there were discoveries at the Urania-1 well and the Maenad-1A well (both
BP Amoco 12.5%).
<PAGE>
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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
MARCH 31
(UNAUDITED)
2000 1999
<S> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 52 68
Euro/US$ 1.01 0.89
</TABLE>
Plans were announced in September 1999 to draw together BP Amoco's existing
activity in the areas of gas and power marketing and trading. This created a Gas
and Power business stream which is reported separately from January 1, 2000. The
new stream is responsible for BP Amoco's world-wide gas marketing activities and
all business development opportunities in natural gas, including gas-fired power
generation.
Replacement cost operating profit for the first three months of 2000 was $52
million compared with $68 million a year ago, and represented a slight increase
on the previous quarter's result of $48 million. The reduction compared to the
equivalent quarter of last year was largely attributable to expenditure on
building up gas marketing operations and exchange rate movements with respect to
Ruhrgas income. The euro declined in average value from euro 0.89 per US$ in the
first three months of 1999 to 1.01 per US$ in the first three months of 2000.
In February 2000, progress on the development of the future market for Trinidad
& Tobago LNG was made when BP Amoco was selected by the government of Brazil to
participate in a power generation programme, to meet Brazil's growing
electricity needs. Also in February, plans for natural gas business development
in Turkey were accelerated with the announcement of the discovery in Azerbaijan.
In addition, the go-ahead for the development of natural gas fields in Algeria
will underpin plans for development of business into Southern Europe. In March,
BP Amoco issued tenders for the construction and purchase of two LNG ships with
options for further vessels.
Progress in natural gas marketing was made in Spain, China and North America. BP
Amoco became the first non-Spanish company to be awarded marketer status and, in
March, was the first to agree sales to business customers in the recently
deregulated Spanish market. In China plans were announced to form a gas
marketing joint venture with PetroChina. In North America BP Amoco announced an
investment in Altra, a leading e-commerce energy exchange, as part of the
company's strategy to increase its web trading presence.
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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)
2000 1999
<S> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 674 346
BP Amoco average indicative global refining margin - $/bbl 2.45 0.82
Refinery throughputs - mb/d 2,438 2,494
Marketing sales - mb/d 3,112 3,141
(a) Further operating information is shown on page 16.
</TABLE>
Replacement cost operating profit for the first three months of 2000 was $674
million, an increase of 86% on the equivalent period of 1999, after adjusting
for special charges of $17 million in 1999. The higher operating profit reflects
the improved refining margins experienced during the latter part of the quarter,
mainly in the USA. Improved operating performance, lower costs and yield
management contributed to improvements in operating profits in both refining and
marketing. The result represented an increase of 45% over the adjusted profit of
$464 million for the fourth quarter of 1999 with stronger refining margins again
a significant factor.
In refining, although overall the environment was improved, weaker margin
conditions at the start of the quarter led to slightly lower throughputs
overall. In marketing, rising crude and product prices led to tighter margins,
in both the retail and commercial sectors.
On March 14, 2000 it was announced that BP Amoco had agreed to buy Burmah
Castrol for approximately $4.7 billion ((pound)3 billion) through a recommended
cash offer of (pound)16.75 per share. Following the acquisition, Castrol would
become BP Amoco's leading lubricants brand, with its products made available
both through BP Amoco's 28,000 retail sites and to our automotive, industrial
and marine customers around the world. The offer is conditional on Burmah
Castrol shareholder approval and regulatory clearance from the European
Commission, the US Federal Trade Commission, and other regulatory authorities.
On April 7, 2000 the US Federal Trade Commission cleared the purchase. As at May
30, 2000 BP Amoco had purchased some 19.5% of Burmah Castrol's issued ordinary
share capital at a cost of $869 million.
During the quarter, plans were announced to form a retail joint venture with
PetroChina in China. In addition, there was further progress on our clean fuels
initiatives, including the announcement of the offering of low sulphur gasoline
nationally across the UK and in the Detroit metropolitan area in the United
States. In addition the Ford Motor Company also announced that BP Amoco's
cleaner fuels would be used as a factory fill for new premium-gasoline-fuelled
Ford Motor Company vehicles from assembly lines in markets where the low-sulphur
fuel is available.
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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
MARCH 31
(UNAUDITED)
2000 1999
<S> <C> <C>
TOTAL REPLACEMENT COST OPERATING PROFIT - $m 259 206
Chemicals Indicator Margin* - ($/te) 119 112
Production volumes - kte 5,703 5,143
* 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 Amoco'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 Fibers, Plastic
Fabrications, poly alpha-olefins, anhydrides, Engineering Polymers and
Carbon Fibers, speciality intermediates, and the remaining parts of the
solvents and acetyls businesses.
</TABLE>
Chemicals' replacement cost operating profit for the first three months of 2000
was $259 million. Compared with the profit of $217 million for equivalent period
of 1999, after adjusting for special charges of $11 million, the result for the
first three months of 2000 benefited from cost reductions and volume
improvements. The result for the first three months of 2000 was similar to the
profit of $266 million, after adjusting for special charges of $127 million, for
the fourth quarter of 1999. The benefit of cost control efforts offset
environmental deterioration caused by the continued weakness of the euro and
feedstock increases early in the first quarter of 2000.
Chemicals production was 5,703 ktes in the first quarter of 2000. Compared with
the first three months of 1999 this was an 11% increase, reflecting higher
reliability and utilization across the business, and new plant capacity added in
1999 at the Feluy linear alpha-olefins, Chocolate Bayou polypropylene, Geel PTA
and Yaraco acetic acid operations. The production for the three months ended
March 31, 2000 was at a similar level to the record production of 5,716 ktes
achieved in the fourth quarter of 1999.
During the first quarter of 2000, BP Amoco signed letters of intent with key
suppliers for our joint venture development with SINOPEC of a $2.5-billion
ethylene complex in Shanghai, China. Also, BP Amoco purchased an equity interest
in ChemConnect, an internet on-line exchange for trading chemicals and plastics.
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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)
2000 1999
<S> <C> <C>
REPLACEMENT COST OPERATING LOSS - $m (227) (124)
</TABLE>
Other Businesses and Corporate comprises Finance, BP Solarex, the group's coal
asset, interest income and costs relating to corporate activities worldwide.
Replacement cost operating loss for the first quarter was $211 million, after
adjusting for a special charge of $16 million.
EXCEPTIONAL ITEMS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
<S> <C> <C>
Profit (loss) on sale of fixed assets and businesses - $m (157) 97
and termination of operations
Restructuring costs - $m - (1,155)
Taxation credit - $m 33 198
_____ _____
EXCEPTIONAL ITEMS AFTER TAXATION (124) (860)
For further information on exceptional items see Note 7 of Notes to Consolidated
Financial Statements.
</TABLE>
Exceptional items for the first three months of 2000 include the subvention of
Singapore Aromatics Company bank loans of $210 million.
OUTLOOK
Crude oil prices have responded to increased OPEC production; they are expected
to remain broadly in the current trading range though volatile.
Natural gas prices are expected to remain strong over the year and remain above
the historical trading range.
Downstream, marketing margins are expected to stabilize after the recent
increase and subsequent fall in oil prices. Refining margins are expected to be
similar to those of the first quarter of 2000 but to show considerable
volatility.
In Chemicals, margins in some businesses - particularly the commodity products -
should strengthen as oil prices stabilize, assuming continuation of firm demand.
However, continuing weakness of the euro, together with increasing industry
capacity, may somewhat limit the extent of any recovery.
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BP AMOCO P.L.C. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
THE COMBINATION OF BP AMOCO AND ARCO
On April 13, 2000 BP Amoco, ExxonMobil Corporation (ExxonMobil), Atlantic
Richfield Company (ARCO) and Phillips Petroleum Company (Phillips) announced
that they had reached an agreement (the agreement) to resolve outstanding issues
relating to the ownership and operation of the Prudhoe Bay Unit (PBU) and the
Point Thomson Unit (PTU) in Alaska.
The agreement will align the respective equity interests of BP Exploration
(Alaska), ExxonMobil and Phillips (as the purchaser of ARCO's Alaskan
businesses) in the Prudhoe Bay Unit, and provides for a single operator at the
PBU.
The aligned oil and gas interests among the major owners will be 26.7 per cent
for BP Exploration (Alaska), 36.8 per cent for ExxonMobil and 36.5 per cent for
Phillips. BP Exploration (Alaska), current operator of the Western Operating
Area in the Prudhoe Bay Unit, will become the single operator. ExxonMobil and BP
Exploration (Alaska) Inc. have also agreed to work towards alignment in the
Point Thomson field area with respective interests of 45 per cent for BP
Exploration and 55 per cent for Exxon.
In addition, the agreement resolved the issues that had resulted in the
Complaint filed by ExxonMobil in State Court, Los Angeles seeking to prevent the
sale of ARCO's Alaskan businesses to Phillips discussed below.
Also on April 13, 2000 BP Amoco and ARCO announced that they had received
clearance from the FTC for the combination of the two companies and the
combination was completed on April 18, 2000.
SALE OF ALASKAN BUSINESSES
On March 15, 2000 ARCO entered into an agreement to sell its Alaskan businesses
to Phillips for approximately $6.5 billion cash subject to purchase price
adjustments (and up to an additional $500 million based on the prices realized
on production subsequent to December 31, 1999). Under the purchase and sale
agreement, which was amended on April 6, 2000, ARCO agreed to sell all of the
outstanding shares of ARCO Alaska Inc., together with certain other subsidiaries
of ARCO engaged principally in the operation of ARCO's Alaskan businesses, along
with certain pipeline and marine assets associated with the transport of Alaskan
crude oil. The major portion of the sale closed on April 26, 2000. The remainder
of the assets are expected to be transferred upon receipt of government
approvals.
SUBSEQUENT EVENTS
REGULATORY CLEARANCE FOR RECOMMENDED CASH OFFER FOR BURMAH CASTROL
On May 19, 2000 BP Amoco announced that it had received unconditional regulatory
clearance from the European Commission's Merger Task Force for its proposed
acquisition of Burmah Castrol plc. This clearance from the European Commission,
in conjunction with that from the Federal Trade Commission received on April 7,
2000, satisfies the pre-conditions to the making of the recommended cash offer.
The offer documents for Burmah Castrol shareholders are currently being
prepared.
AGREED OFFER TO PURCHASE MINORITY INTEREST IN VASTAR RESOURCES INC.
On May 24, 2000 BP Amoco announced that it had entered into a merger agreement
with Vastar Resources, Inc. (Vastar) which provides for the acquisition by BP
Amoco of Vastar's publicly-held minority stockholding at a price of $83 a share.
The agreement is the outcome of negotiations between BP Amoco and Vastar's
special committee which followed BP Amoco's announcement on March 16, 2000 of
its intention to make an offer of $71 a share for the Vastar minority. The
merger has been approved by the Vastar board, including all the members of the
special committee.
Through its combination with Atlantic Richfield Company (ARCO), BP Amoco already
owns some 81.9 per cent of Vastar. The acquisition of the outstanding minority
under the terms of the merger agreement would allow the integration of Vastar
with BP Amoco's own operations.
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BP AMOCO P.L.C. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONCLUDED
AGREED OFFER TO PURCHASE MINORITY INTEREST IN VASTAR RESOURCES INC.(CONTINUED)
The acquisition is structured as a merger of a wholly-owned indirect subsidiary
of BP Amoco into Vastar and will not involve a tender offer. The merger is
contingent on the approval by the holders of at least two-thirds of the Vastar
shares not held by BP Amoco at a meeting scheduled for the summer of 2000. A
proxy statement is currently being prepared.
AGREEMENT TO ACQUIRE BAYER AG'S SHAREHOLDING IN ERDOELCHEMIE
On May 26, 2000 BP Amoco announced that it had reached a common understanding in
principle with Bayer AG (Bayer) that Deutsche BP AG, a BP Amoco Group company,
will acquire Bayer's 50 per cent shareholding in their petrochemicals joint
venture, Erdoelchemie.
Final agreement will be subject to approval by European regulatory authorities
and the management boards of both companies.
At this stage it is anticipated that the final agreement will be completed early
in 2001, after which full ownership and control of Erdoelchemie and its
petrochemical manufacturing site near Cologne, Germany, would transfer to
Deutsche BP AG.
FORWARD-LOOKING STATEMENTS
The foregoing discussion, in particular the statements under `Outlook', focuses
on certain trends and general market and economic conditions and outlook on
production levels or rates, prices, margins and currency exchange rates and, as
such, are forward-looking statements that involve risk and uncertainty that
could cause actual results and developments to differ materially from those
expressed or implied by this discussion. By their nature, trends and outlook on
production, price, margin and currency exchange rates are difficult to forecast
with any precision, and there are a number of factors that could cause actual
results and developments to differ materially from those expressed or implied by
these forward-looking statements including future levels of industry product
supply, demand and pricing; currency exchange rates; political stability and
economic growth in relevant areas of the world; 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 May 9, 1999, BP Amoco p.l.c. announced a first quarterly dividend for 2000 of
5 cents per Ordinary Share of 25c (Ordinary Shares), representing $0.30 per
American Depositary Share (ADS) amounting to $1,133 million in total. The record
date for qualifying US resident holders of American Depositary Shares as well as
holders of Ordinary Shares is May 19, 2000, with payment to be made on June 12,
2000.
The dividend payable on June 12, 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 $0.033 per ADS.
A Dividend Reinvestment Plan was introduced with effect from the fourth
quarterly dividend in respect of 1998, whereby holders of Ordinary Shares can
elect to reinvest the net cash dividend in shares purchased on the London Stock
Exchange. This plan is not available to any person resident in the USA or
Canada, or in any jurisdiction outside the UK where such an offer requires
compliance by the Company with any governmental or regulatory procedures or any
similar formalities.
A dividend reinvestment facility is, however, available for holders of ADRs
through the Direct Access Plan of Morgan Guaranty Trust Company of New York.
Participants in the Dividend Reinvestment Plan or the dividend reinvestment
facility included in the US Direct Access Plan will receive the dividend in the
form of shares on June 12, 2000.
<PAGE>
Page 11
BP AMOCO P.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
except per share amounts
<S> <C> <C>
Turnover - Note 2 33,091 17,984
Less: joint ventures 5,380 3,342
------- -------
Group turnover 27,711 14,642
Replacement cost of sales 22,166 11,911
Production taxes - Note 3 498 142
------- -------
Gross profit 5,047 2,589
Distribution and administration expenses 1,379 1,536
Exploration expense - Note 4 131 172
------- -------
3,537 881
Other income 84 105
------- -------
Group replacement cost operating profit 3,621 986
Share of profits of joint ventures 169 131
Share of profits of associated undertakings 171 129
------- -------
Total replacement cost operating profit - Notes 5 and 6 3,961 1,246
(Loss) profit on sale of fixed assets and businesses
- Note 7 (157) 97
Restructuring costs - Note 7 - (1,155)
------- -------
Replacement cost profit before interest and tax - Note 5 3,804 188
Inventory holding gains (losses) - Note 8 532 7
------- -------
Historical cost profit before interest and tax 4,336 195
Interest expense - Note 9 296 304
------- -------
Profit before taxation 4,040 (109)
Taxation - Note 10 887 56
------- -------
Profit after taxation 3,153 (165)
Minority shareholders' interest 68 11
------- -------
Profit for the period 3,085 (176)
======= =======
Earnings per Ordinary Share - cents (a)
Basic 15.88 (0.91)
Diluted 15.77 (0.91)
------- -------
Earnings per American depositary share - cents (a)
Basic 95.28 (5.46)
Diluted 94.62 (5.46)
------- -------
Average number of outstanding Ordinary Shares (millions)(b)19,427 19,338
======= =======
</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 13.
(b) Average number of shares reflects the share split of October 4, 1999.
<PAGE>
Page 12
BP AMOCO P.L.C. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999
(UNAUDITED)
($ million)
<S> <C> <C> <C> <C>
Fixed assets
Intangible assets 3,320 3,344
Tangible assets 51,939 52,631
Investments 10,840 10,109
-------- --------
66,099 66,084
Current assets
Inventories 5,321 5,124
Receivables 17,950 16,802
Investments 274 220
Cash at bank and in hand 462 1,331
-------- --------
24,007 23,477
-------- --------
Current liabilities - falling due
within one year
Finance debt 4,612 4,900
Accounts payable and 18,030 18,375
accrued liabilities
-------- --------
22,642 23,275
-------- --------
Net current assets 1,365 202
-------- --------
TOTAL ASSETS LESS CURRENT LIABILITIES 67,464 66,286
LIABILITIES
Noncurrent liabilities
Finance debt 9,745 9,644
Accounts payable and
accrued liabilities 2,057 2,245
Provisions for liabilities
and charges 9,763 10,055
-------- --------
21,565 21,944
-------- --------
NET ASSETS 45,899 44,342
Minority shareholders' interest 1,126 1,061
-------- --------
BP AMOCO SHAREHOLDERS' INTEREST (a) 44,773 43,281
- Note 12 ======== ========
REPRESENTED BY:
Capital shares
Preference 21 21
Ordinary 4,874 4,871
Paid-in surplus 3,716 3,684
Retained earnings 35,465 34,008
Merger reserve 697 697
-------- --------
44,773 43,281
======== ========
</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 13.
<PAGE>
Page 13
BP AMOCO P.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASHFLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 2,764 829
------- -------
DIVIDENDS FROM JOINT VENTURES 195 212
------- -------
DIVIDENDS FROM ASSOCIATED UNDERTAKINGS 31 45
------- -------
SERVICING OF FINANCE AND RETURNS ON INVESTMENTS
Interest received 35 32
Interest paid (224) (281)
Dividends received 1 7
Dividends paid to minority shareholders (2) (65)
------- -------
NET CASH OUTFLOW FROM SERVICING OF FINANCE
AND RETURNS ON INVESTMENTS (190) (307)
------- -------
TAXATION
UK corporation tax (200) (72)
Overseas tax (337) 27
------- -------
TAX PAID (537) (45)
------- -------
CAPITAL EXPENDITURE
Payments for fixed assets (1,421) (1,515)
Proceeds from the sale of fixed assets 406 87
------- -------
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE (1,015) (1,428)
------- -------
ACQUISITIONS AND DISPOSALS
Investments in associated undertakings (197) (88)
Acquisitions (869) -
Net investment in joint ventures (2) (200)
Proceeds from the sale of businesses 25 92
------- -------
NET CASH (OUTFLOW) INFLOW FOR ACQUISITIONS AND DISPOSALS (1,043) (196)
------- -------
EQUITY DIVIDENDS PAID (971) (263)
------- -------
NET CASH INFLOW (OUTFLOW) (766) (1,153)
======= =======
Financing (Note 11) 77 (829)
Management of liquid resources 20 (161)
Increase (decrease) in cash (863) (163)
------- -------
(766) (1,153)
======= =======
</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
13.
<PAGE>
Page 14
BP AMOCO P.L.C. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASHFLOWS - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
RECONCILIATION OF HISTORICAL COST PROFIT BEFORE INTEREST
AND TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Historical cost profit before interest and tax 4,336 195
Depreciation and amounts provided 1,195 1,244
Exploration expenditure written off 66 84
Share of profits of joint ventures and
associated undertakings + (453) (356)
Interest and other income (47) (52)
Profit (loss) on sale of fixed assets and businesses 171 (58)
Charge for provisions 155 449
Utilization of provisions (204) (95)
Decrease (increase) in stocks (255) (1)
Decrease (increase) in debtors (1,140) (1,014)
(Increase) decrease in creditors (1,060) 433
------- -------
NET CASH INFLOW FROM OPERATING ACTIVITIES 2,764 829
======= =======
FINANCING
Long-term borrowing (312) (50)
Repayments of long-term borrowing 93 793
Short-term borrowing (623) (2,192)
Repayments of short-term borrowing 950 721
------- -------
108 (728)
Issue of ordinary share capital (31) (101)
------- -------
Net cash outflow (inflow) from financing 77 (829)
======= =======
---------------
+ Includes the following amounts of depreciation
for the BP/Mobil European JV 77 78
======= =======
</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
13.
<PAGE>
Page 15
BP AMOCO P.L.C. AND SUBSIDIARIES
CAPITAL EXPENDITURE AND ACQUISITIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
BY BUSINESS
EXPLORATION AND PRODUCTION
UK 163 244
Rest of Europe 24 8
USA 381 362
Rest of World 295 320
------- -------
863 934
------- -------
GAS AND POWER
UK 2 -
Rest of Europe 1 -
USA - -
Rest of World 4 -
------- -------
7 -
------- -------
REFINING AND MARKETING
UK 889 34
Rest of Europe 44 80
USA 77 154
Rest of World 92 48
------- -------
1,102 316
------- -------
CHEMICALS
UK 152 60
Rest of Europe 33 61
USA 39 63
Rest of World 267 25
------- -------
491 209
------- -------
OTHER BUSINESSES AND CORPORATE 53 25
------- -------
2,516 1,484
======= =======
BY GEOGRAPICAL AREA
UK 1,248 344
Rest of Europe 106 151
USA 497 595
Rest of World 665 394
------- -------
2,516 1,484
======= =======
Includes the following amounts for the BP/Mobil
European joint venture 55 107
======= =======
US DOLLAR/STERLING EXCHANGE RATES
Average rates for the period 1.60 1.63
Period-end rates 1.59 1.61
======= =======
</TABLE>
<PAGE>
Page 16
BP AMOCO P.L.C. AND SUBSIDIARIES
OPERATING INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
<S> <C> <C>
CRUDE OIL AND NATURAL GAS LIQUIDS PRODUCTION
(THOUSAND BARRELS PER DAY), (NET OF ROYALTIES)
UK 581 586
Rest of Europe 91 107
USA 794 814
Rest of World 515 592
------- -------
TOTAL CRUDE OIL AND LIQUIDS PRODUCTION 1,981 2,099
======= =======
NATURAL GAS PRODUCTION (MILLION CUBIC FEET PER DAY)
UK 1,746 1,490
Rest of Europe 184 243
USA 2,256 2,433
Rest of World 2,123 1,906
------- -------
TOTAL NATURAL GAS PRODUCTION 6,309 6,072
======= =======
REFINERY THROUGHPUTS (THOUSAND BARRELS PER DAY)
UK 281 273
Rest of Europe 518 563
USA 1,290 1,276
Rest of World 349 382
------- -------
TOTAL REFINERY THROUGHPUT 2,438 2,494
======= =======
OIL SALES VOLUMES (THOUSAND BARRELS PER DAY)
REFINED PRODUCTS
UK 224 240
Rest of Europe 766 785
USA 1,472 1,458
Rest of World 650 658
------- -------
Total marketing sales 3,112 3,141
Trading/supply sales 1,621 1,776
------- -------
TOTAL REFINED PRODUCT SALES 4,733 4,917
CRUDE OIL 6,496 3,947
------- -------
TOTAL OIL SALES 11,229 8,864
======= =======
CHEMICALS PRODUCTION+ (THOUSAND TONNES)
UK 867 975
Rest of Europe 1,640 1,409
USA 2,619 2,299
Rest of World 577 460
------- -------
TOTAL PRODUCTION 5,703 5,143
======= =======
</TABLE>
* Crude oil and natural gas liquids
+ Includes BP Amoco share of associated undertakings and other interests in
production.
<PAGE>
Page 17
BP AMOCO P.L.C. AND SUBSIDIARIES
ENVIRONMENTAL INDICATORS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
<S> <C> <C>
AVERAGE OIL REALIZATIONS - $/BBL*
UK 26.23 11.05
USA 24.52 9.86
Rest of World 26.26 10.45
BP Amoco average 25.59 10.45
AVERAGE NATURAL GAS REALIZATIONS - $/MCF
UK 2.23 2.31
USA 2.34 1.59
Rest of World 1.90 1.61
BP Amoco average 2.18 1.80
HENRY HUB GAS PRICE ($/MCF) 2.52 1.75
BP AMOCO INDICATIVE GLOBAL REFINING MARGINS - $/BBL
UK 2.42 0.68
USA 2.68 0.80
Rest of World 2.04 1.19
BP Amoco average 2.45 0.82
</TABLE>
<PAGE>
Page 18
BP AMOCO P.L.C. AND SUBSIDIARIES
SPECIAL ITEMS BY SEGMENT (PRE-TAX)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
EXPLORATION AND PRODUCTION
UK - 32
Rest of Europe - 2
USA - 48
Rest of World 24 4
------- -------
24 86
------- -------
GAS AND POWER
UK - -
Rest of Europe - -
USA - -
Rest of World - -
------- -------
- -
------- -------
REFINING AND MARKETING
UK - 13
Rest of Europe - -
USA - 4
Rest of World - -
------- -------
- 17
------- -------
CHEMICALS
UK - 2
Rest of Europe - 4
USA - 4
Rest of World - 1
------- -------
- 11
------- -------
OTHER BUSINESSES AND CORPORATE
UK - -
Rest of Europe - -
USA 16 -
Rest of World - -
------- -------
16 -
======= =======
BOND REDEMPTION CHARGES - -
------- -------
TOTAL 40 114
======= =======
</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
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
2. TURNOVER
BY BUSINESS
Exploration and Production 6,504 3,470
Gas and Power 2,173 1,216
Refining and Marketing 20,778 10,167
Chemicals 2,781 2,123
Other businesses and corporate 41 30
------- -------
32,277 17,006
Less: Sales between businesses 4,566 2,364
------- -------
GROUP EXCLUDING JOINT VENTURES 27,711 14,642
Sales of joint ventures 5,380 3,342
------- -------
33,091 17,984
======= =======
BY GEOGRAPHICAL AREA
UK 10,350 4,795
Rest of Europe 1,874 1,190
USA 12,973 6,630
Rest of World 6,360 3,454
------- -------
31,557 16,069
Less: Sales between areas 3,846 1,427
------- -------
GROUP EXCLUDING JOINT VENTURES 27,711 14,642
======= =======
Sales of joint ventures
UK 1,360 747
Rest of Europe 5,007 2,989
USA - 24
Rest of World 121 60
------- -------
6,488 3,820
Less: Sales between areas 1,108 478
------- -------
5,380 3,342
======= =======
3. PRODUCTION TAXES
UK petroleum revenue tax 190 33
Overseas production taxes 308 109
------- -------
498 142
======= =======
4. EXPLORATION EXPENSE
Exploration and Production
UK 8 13
Rest of Europe 4 24
USA 35 20
Rest of World 84 115
------- -------
131 172
======= =======
</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
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
6. TOTAL REPLACEMENT COST OPERATING PROFIT
BY BUSINESS
EXPLORATION AND PRODUCTION
UK 1,088 318
Rest of Europe 188 75
USA 1,191 192
Rest of World 736 165
------- -------
3,203 750
------- -------
GAS AND POWER
UK (5) 5
Rest of Europe 55 52
USA (1) 4
Rest of World 3 7
------- -------
52 68
------- -------
REFINING AND MARKETING
UK 33 (22)
Rest of Europe 36 100
USA 424 113
Rest of World 181 155
------- -------
674 346
------- -------
CHEMICALS
UK (31) 42
Rest of Europe 78 61
USA 168 107
Rest of World 44 (4)
------- -------
259 206
------- -------
OTHER BUSINESSES AND CORPORATE (227) (124)
------- -------
3,961 1,246
======= =======
BY GEOGRAPHICAL AREA
UK 974 347
Rest of Europe 366 282
USA 1,652 288
Rest of World 969 329
------- -------
3,961 1,246
======= =======
Includes the following amounts for joint ventures
and associated undertakings 340 260
======= =======
</TABLE>
<PAGE>
Page 21
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
7. ANALYSIS OF EXCEPTIONAL ITEMS
PROFIT (LOSS) ON SALE OF FIXED ASSETS
AND BUSINESSES
Exploration and Production 38 (9)
Gas and Power - -
Refining and Marketing 19 44
Chemicals (210) 62
Other businesses and corporate (4) -
------- -------
(157) 97
Restructuring costs - (1,155)
------- -------
TOTAL EXCEPTIONAL ITEMS BEFORE TAXATION (157) (1,058)
------- -------
Includes the following amounts for joint ventures
and associated undertakings 14 39
======= =======
</TABLE>
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 three months of 2000 the cash outflow for restructuring
charges totalled $152 million.
During 1999, some 16,000 employees left the Group through severance or
outsourcing arrangements. Of these, some 13,000 were based in the USA. The
reductions arose mainly in Houston, Texas; Chicago, Illinois; and Cleveland
and Warrensville, Ohio. Approximately 4,000 more employees had received
notification of the termination of their employment by the end of 1999 and
are expected to leave the Group in 2000. In the three months ended March 31,
2000 some 1,100 employees left the Group.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
8. INVENTORY HOLDING GAINS (LOSSES)
Exploration and Production 1 (11)
Gas and Power 5 -
Refining and Marketing 463 45
Chemicals 63 (27)
------- -------
532 7
======= =======
Includes the following amounts for joint ventures
and associated undertakings 99 57
======= =======
</TABLE>
<PAGE>
Page 22
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
9. INTEREST EXPENSE
Group interest payable 231 236
Capitalized (15) (15)
------- -------
216 221
Joint ventures 14 16
Associated undertakings 30 37
Unwinding of discount on provisions 36 30
------- -------
296 304
======= =======
10.CHARGE FOR TAXATION
United Kingdom 317 88
Overseas 570 (32)
------- -------
887 56
======= =======
Includes the following amounts for joint ventures
and associated undertakings 52 24
======= =======
11.ANALYSIS OF CHANGES IN NET DEBT
OPENING BALANCE
Finance debt 14,544 13,755
Less: Cash 1,331 405
Current asset investments 220 470
------- -------
Opening net debt 12,993 12,880
------- -------
CLOSING BALANCE
Finance debt 14,357 14,510
Less: Cash 462 270
Current asset investments 274 305
------- -------
Closing net debt 13,621 13,935
------- -------
INCREASE (DECREASE) IN NET DEBT (628) (1,055)
======= =======
Movement in cash/bank overdrafts (863) (163)
Increase (decrease) in current asset investments 20 (161)
Net cash outflow (inflow) from financing
(excluding share capital) 108 (728)
Other movements 56 -
------- -------
Movements in net debt before exchange effects (679) (1,052)
Exchange adjustments 51 (3)
------- -------
DECREASE (INCREASE) IN NET DEBT (628) (1,055)
======= =======
</TABLE>
<TABLE>
<CAPTION>
12.MOVEMENT IN BP AMOCO SHAREHOLDERS' INTEREST $ MILLION
(UNAUDITED)
<S> <C>
BALANCE AT DECEMBER 31, 1999 43,281
Profit for the period 3,085
Distribution to shareholders (1,133)
Currency translation differences (495)
Employee share schemes 35
-------
BALANCE AT MARCH 31, 2000 44,773
=======
</TABLE>
<PAGE>
Page 23
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
13. 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
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
Profit as reported in the consolidated 3,085 (176)
statement of income
Adjustments
Depreciation charge (19) (10)
Decommissioning and environmental expense (68) (42)
Onerous property leases (7) 156
Interest expense 36 30
Deferred taxation (514) 38
Other 15 5
------- -------
(557) 177
------- -------
Profit for the period as adjusted to accord 2,528 1
with US GAAP ======= =======
Profit for the period as adjusted:
Per Ordinary Share - cents
Basic 13.01 0.00
Diluted 12.92 0.00
======= =======
Per American Depositary Share - cents (a)
Basic 78.06 0.00
Diluted 77.52 0.00
======= =======
</TABLE>
<TABLE>
<CAPTION>
BP AMOCO SHAREHOLDERS' INTEREST MARCH 31, 2000 DECEMBER 31, 1999(b)
(UNAUDITED)
($ million)
<S> <C> <C>
BP Amoco shareholders' interest as
reported in the consolidated balance sheet 44,773 43,281
Adjustments:
Fixed assets 1,215 1,237
Ordinary shares held for future (404) (456)
awards to employees
Sale and leaseback of Chicago (413) (413)
building
Decommissioning and environmental (532) (499)
provisions
Onerous property leases 134 139
Deferred taxation (6,626) (6,082)
Quarterly dividend 1,133 972
Pension liability adjustment (144) (144)
Other (177) (197)
------- -------
(5,814) (5,443)
------- -------
BP Amoco shareholders' interest as
adjusted to accord with US GAAP 38,959 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 24
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
13. 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
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
OPERATING ACTIVITIES
Profit after taxation 3,153 (165)
ADJUSTMENTS TO RECONCILE PROFITS AFTER TAX TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Depreciation and amounts provided 1,195 1,244
Exploration expense 66 84
Share of (profit) loss of joint ventures and
associates less dividends received (227) (99)
Profit (loss) on sale of businesses and 171 (58)
fixed assets
Working capital movement (see analysis below) (2,028) (875)
Other (55) 435
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,275 566
------- -------
INVESTING ACTIVITIES
Capital expenditures (1,418) (1,284)
Acquisitions, net of cash acquired (869) -
Investment in associated undertakings (197) (88)
Net investment in joint ventures (2) (200)
Proceeds from disposal of assets 431 179
------- -------
NET CASH USED IN INVESTING ACTIVITIES (2,055) (1,393)
------- -------
FINANCING ACTIVITIES
Proceeds from shares issued 31 101
Proceeds from long-term financing 312 50
Repayments of long-term financing (93) (793)
Net increase (decrease) in short-term debt (327) 1,471
Dividends paid - BP Amoco (971) (263)
- Minority shareholders (2) (65)
------- -------
NET CASH USED IN FINANCING ACTIVITIES (1,050) 501
------- -------
Currency translation differences relating to
cash and cash equivalents (4) 25
------- -------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (834) (301)
------- -------
Cash and cash equivalents at beginning of period 1,455 794
------- -------
Cash and cash equivalents at end of period 621 493
------- -------
ANALYSIS OF WORKING CAPITAL MOVEMENT
Increase in inventories (255) (1)
Increase in receivables (1,180) (683)
Decrease in current liabilities (excluding (593) (191)
finance debt)
------- -------
TOTAL WORKING CAPITAL (2,028) (875)
======= =======
</TABLE>
<PAGE>
Page 25
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
13.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
MARCH 31
(UNAUDITED)
2000 1999
(shares million)
<S> <C> <C>
Weighted average number of ordinary shares 19,427 19,338
Ordinary shares issuable under employee 136 104
share schemes ------- -------
19,563 19,442
======= =======
</TABLE>
COMPREHENSIVE INCOME
The components of comprehensive income, net of related tax are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
Profit for the period as adjusted to accord 2,528 1
with US GAAP
Currency translation differences (495) (806)
Pension liability - -
------- -------
Comprehensive income 2,033 (805)
======= =======
</TABLE>
Accumulated other comprehensive income at March 31, 2000 and December 31,
1999 was $(2,013) million and $(1,518) million, respectively.
<PAGE>
Page 26
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
13.US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - CONTINUED
ACCOUNTING FOR ASSOCIATED UNDERTAKINGS AND JOINT VENTURES
Under the provisions of UK Financial Reporting Standard No.9 `Associates and
Joint Ventures' (`FRS9'), the Company includes its share of the results of
associated undertakings and joint ventures (JVs) within various captions in
the consolidated statement of income. Under US GAAP, the Company's share of
the after tax profit or loss of associated undertakings and joint ventures
would be recognized as a single amount. The following summarizes the
reclassifications necessary to accord with US GAAP.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
---------------------------------------
AS US GAAP
REPORTED RECLASSIFICATION PRESENTATION
---------------------------------------
($ million)
<S> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
Other income 84 357 441
Share of profits of JVs and 340 (340) -
associated undertakings
Exceptional items before taxation (157) (14) (171)
Inventory holding gains (losses) 532 (99) 433
Interest expense 296 (44) 252
Taxation 887 (52) 835
Profit for the period 3,085 - 3,085
</TABLE>
<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 105 279 384
Share of profits of JVs and 260 (260) -
associated undertakings
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
Profit for the period (176) - (176)
</TABLE>
<PAGE>
Page 27
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
13.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.
14.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 28
BP AMOCO P.L.C. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
14.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 29
BP AMOCO P.L.C. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
BP AMERICA INC. (a)
Sales and other operating revenue 7,321 2,301
Gross profit (b) 1,193 274
Profit (loss) for the period (c) 715 (164)
======= =======
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 13,823 13,790
Current assets 5,558 5,278
------ ------
Total assets 19,381 19,068
====== ======
Current liabilities 6,373 6,283
Noncurrent liabilities 5,707 6,199
Shareholders' interest 7,301 6,586
------ ------
Total liabilities and shareholders' 19,381 19,068
interest ====== ======
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
THE STANDARD OIL COMPANY (a)
Sales and other operating revenue 7,138 2,227
Gross profit (b) 1,079 245
Profit (loss) for the period (c) 715 (16)
======= =======
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 12,700 12,584
Current assets 6,884 6,664
------ ------
Total assets 19,584 19,248
====== ======
Current liabilities 4,368 4,303
Noncurrent liabilities 4,919 5,363
Shareholders' interest 10,297 9,582
------ ------
Total liabilities and shareholders' 19,584 19,248
interest ====== ======
</TABLE>
<PAGE>
Page 30
BP AMOCO P.L.C. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
BP PIPELINES (ALASKA) INC. (a)
Sales and other operating revenue 108 125
Gross profit (b) 37 45
Profit for the period 30 25
======= =======
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 1,283 1,290
Current assets 899 853
------ ------
Total assets 2,182 2,143
====== ======
Current liabilities 152 128
Noncurrent liabilities 952 967
Shareholders' interest 1,078 1,048
------ ------
Total liabilities and shareholders' 2,182 2,143
interest ====== ======
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
2000 1999
($ million)
<S> <C> <C>
BP EXPLORATION (ALASKA) INC. (a)
Sales and other operating revenue 4,529 965
Gross profit (b) 420 (49)
Profit (loss) for the period (c) 274 (110)
======= =======
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 2000 DECEMBER 31, 1999 (d)
(UNAUDITED)
($ million)
<S> <C> <C>
Fixed and other assets 10,367 10,124
Current assets 2,733 3,117
------ ------
Total assets 13,100 13,241
====== ======
Current liabilities 1,704 2,119
Noncurrent liabilities 1,536 1,536
Shareholders' interest 9,860 9,586
------ ------
Total liabilities and shareholders' 13,100 13,241
interest ====== ======
</TABLE>
<PAGE>
Page 31
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 Gross profit equals sales and other operating revenue less associated
costs, which exclude distribution and administration expenses and
exploration expense.
(c) Profit for the three months ended March 31, 1999 for BP America Inc., The
Standard Oil Company and BP Exploration (Alaska) Inc. includes
restructuring charges of $188 million, $91 million and $31 million,
respectively
(d) As reported in the summarized financial statements for the year ended
December 31, 1999 included in BP Amoco's Annual Report on Form 20-F for the
year ended December 31, 1999.
(e) In April 2000, BP Amoco p.l.c. transferred its 100% ownership of BP Amoco
Corporation and Atlantic Richfield Company to BP America Inc. in exchange
for 4,385,079 and 2,129,809 additional shares of BP America Inc.,
respectively. Following the transfer, BP Amoco Corporation and the Atlantic
Richfield Company are wholly-owned subsidiaries of BP America Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BP AMOCO P.L.C.
(REGISTRANT)
DATED: MAY 31, 2000 /s/ PAULA J CLAYTON
-------------------
P.J. CLAYTON
DEPUTY COMPANY SECRETARY
<PAGE>
Page 33
Exhibit 1
BP AMOCO P.L.C. AND SUBSIDIARIES
SUMMARIZED FINANCIAL INFORMATION - CONCLUDED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 2000
($ million, except ratios)
<S> <C>
Profit before taxation 4,040
Group's share of income in excess of dividends (227)
of joint ventures and associated undertakings
Captalized interest (15)
------
Profit as adjusted 3,798
------
Fixed charges:
Interest net of interest expense of joint ventures and 216
associated undertakings and unwinding of discount
Rental expense representative of interest 95
Captalized interest 15
------
326
------
Total adjusted earnings available for payment of fixed charges 4,124
======
Ratio of earnings to fixed charges 12.6
======
Total adjusted earnings available for payment of fixed 4,081
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 12.5
accord with US GAAP ======
</TABLE>
---------------
(a) See Note 13 of Notes to Consolidated Financial Statements.
