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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 Fee Required
For the fiscal year ended December 31, 1995 or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 No Fee Required
For the transition period from to .
Commission file number: 1-8888
AMOCO COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 36-3353184
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 EAST RANDOLPH DRIVE, CHICAGO, ILLINOIS 60601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312)856-6111
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
8 5/8% Debentures Due 2016 New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and(2) has been subject to such filing requirements for the past
90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: X.
Number of shares outstanding as of March 21, 1996, was 100
shares.
DOCUMENTS INCORPORATED BY REFERENCE
1995 Annual Report on Form 10-K of Amoco Corporation
Registrant meets the conditions set forth in General
Instructions J(1)(a) and (b) of Form 10-K and is therefore filing
this form with reduced disclosure format.
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AMOCO COMPANY
PART I
Items 1. and 2. Business and Properties
Amoco Company, a Delaware corporation (the "Company"), the
principal wholly owned subsidiary of Amoco Corporation, an
Indiana corporation ("Amoco"), functions as the holding company
for substantially all of Amoco's petroleum and chemical
operations, except Canadian petroleum operations. Amoco has
guaranteed all presently outstanding public debt obligations of
Amoco Company. The principal wholly owned subsidiaries of the
Company and the businesses in which they are engaged are
summarized below:
Amoco Production Company..... Exploration, development and
production of crude oil, natural
gas and natural gas liquids
("NGL"), and marketing of natural
gas and NGL.
Amoco Oil Company............ Refining, marketing and transporting
of petroleum and related products.
Amoco Chemical Company....... Manufacture and sale of chemical
products.
Since the Company's operations are similar to those of
Amoco, except for Canadian petroleum operations and selected
other activities, the information contained in Items 1. and 2.
"Business and Properties" of Amoco Corporation's 1995 Annual
Report on Form 10-K is incorporated herein by reference.
Information related to Canadian petroleum operations is
identified separately therein and is not incorporated herein.
Item 3. Legal Proceedings
The information required by this item is incorporated by
reference to Item 3 of Amoco Corporation's 1995 Annual Report on
Form 10-K.
Item 4. Submission of Matters to a Vote of Security Holders
Not required.
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_________________
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters
All of the common stock of the registrant is owned by its
parent company; therefore, there is no market for such stock.
Item 6. Selected Financial Data
Not required.
Item 7. Management's Narrative Analysis of Results of Operations
Results of Operations
1995 Compared With 1994
The Company earned $1,798 million in 1995 compared with
$1,878 million in 1994. Adversely affecting 1995 earnings were
non-cash charges of $287 million associated with the adoption of
Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of." SFAS No. 121 requires long-
lived assets with recorded values that are not expected to be
recovered through future cash flows to be written down to current
fair value. Also included in 1995 earnings was an $83 million
gain related to the sale of Amoco Motor Club. Results for 1994
benefited from settlements of crude oil excise taxes ("COET") of
$270 million, a gain of $45 million related to the disposition of
certain European oil and gas properties and tax adjustments
relating to prior years totaling $63 million. Adversely
affecting 1994 earnings were after-tax charges of $60 million
pertaining to provision for future environmental remediation
expenditures relating to past operations, and restructuring
charges of $149 million. Of this latter amount, $51 million
related to employee-termination costs. The remaining $98 million
was attributable to a reduction in carrying value of assets that
have been divested.
Adjusting both years for special items, 1995 earnings were
$2,002 million compared with 1994 earnings of $1,709 million.
The increase in 1995 results of operations primarily represented
higher chemical earnings resulting from both higher volumes and
margins across most product lines, and strong exploration and
production (E&P) earnings overseas. These strong results, as
well as continuing efficiency improvements throughout the
organization, more than offset lower U.S. petroleum product
margins and lower U.S. natural gas prices.
Sales and other operating revenues totaled $24.4 billion for
1995, slightly higher than $23.6 billion for 1994. Chemical
revenues improved 11 percent reflecting higher sales volumes and
prices for major product lines. Natural gas revenues were lower
by 7 percent primarily reflecting lower U.S. natural gas prices.
Total costs and expenses increased 3 percent in 1995.
Operating expenses were about the same as 1994 after adjusting
1994 operating expenses for before-tax restructuring charges of
$150 million related to various facility closings and asset
dispositions. In 1995, expense reductions resulting from
restructuring efforts offset increased costs to support expanded
chemical activities and higher planned and unplanned refinery
maintenance expenses.
Exploration expenses decreased $16 million primarily due to
lower overseas dry hole costs. Selling and administrative
expenses for 1995 were down 10 percent. The 1994 expenses
included before-tax restructuring charges of $79 million related
to employee-termination costs. The 1995 expenses included
favorable currency effects of $17 million before tax compared
with adverse currency effects of $31 million before tax in 1994.
Depreciation, depletion, amortization, and retirements and
abandonments totaled $2,304 million in 1995, an increase of $410
million over 1994, reflecting impairment charges of $441 million
associated with the adoption of SFAS No. 121.
Interest expense was $434 million higher in 1995 than in
1994, due to interest on intercompany notes from affiliates. The
higher interest expense with affiliates reflects the 1994
transfer of 95 percent ownership of certain European chemical
operations to Amoco Corporation.
Liquidity and Capital Resources
Cash flows from operating activities generated $3.7 billion
in 1995, compared with $4 billion in 1994.
The debt to debt-plus-equity ratio on outstanding public
obligations was 20 percent at December 31, 1995, compared with
18.8 percent at December 31, 1994. Including debt with
affiliates, the ratio was 40.7 at December 31, 1995, and 39.6
percent at year-end 1994.
Working capital totaled $725 million at December 31, 1995,
compared with $1,257 million at December 31, 1994. The Company's
current ratio was 1.16 to 1 at year-end 1995, compared with 1.30
to 1 at year-end 1994. As a matter of policy, Amoco Company
practices asset and liability management techniques that are
designed to minimize its investment in non-cash working capital.
This does not impair operational flexibility since the Company
has ready access to both short- and long-term debt markets.
During 1995, 8.9 million shares of Amoco's common stock in
excess of amounts needed for benefit plan purposes were acquired
by the Company at a cost of $601 million. During the fourth
quarter, the Company transferred the stock to Amoco Corporation.
During December, 1995, Amoco Company purchased an additional
620,000 shares of Amoco Corporation at a cost of $43 million.
Investments in affiliates totaled $1,428 million at December
31, 1995. The investments reflect the Company's remaining
interest in certain European chemical operations, of which 95
percent ownership was transferred to Amoco Corporation in 1994.
Also reflected were the Company's purchases of Amoco
Corporation's common stock.
Amoco Corporation and Amoco Company guarantee the notes and
debentures of Amoco Canada Petroleum Company Ltd. and Amoco
Argentina Oil Company.
The following table summarizes selected liquidity
information for the last three years as of December 31:
1995 1994 1993
Debt to debt-plus-
equity ratio on
outstanding public
debt obligations ........ 20.0 18.8 16.8
Debt to debt-plus-
equity ratio including
debt with affiliates..... 40.7 39.6 16.8
Current ratio ........... 1.16 1.30 1.10
Ratio of earnings to
fixed charges* .......... 11.6 20.4 13.2
* Earnings consist of income before income taxes and fixed
charges; fixed charges include interest on outstanding public
debt obligations, rental expense representative of an interest
factor, and adjustments for certain companies accounted for by
the equity method. Including debt with affiliates, the ratio of
earnings to fixed charges was 4.4 and 13.0 as of December 31, 1995
and 1994, respectively.
Item 8. Financial Statements and Supplemental Information
Index to Financial Statements and Supplemental Information
Page
Financial Statements:
Basis of Financial Statement Preparation ..... 6
Condensed Consolidated Statement of Income ... 7
Condensed Consolidated Statement of
Financial Position ......................... 8
Condensed Consolidated Statement of Cash Flows 10
Supplemental Information:
Supplemental Oil and Gas Exploration and
Production Activities ........................ 11
Quarterly Financial Data ..................... 11
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Separate financial statements of 50 percent or less owned
companies accounted for by the equity method have been omitted
since, if considered in the aggregate, they would not constitute
a significant subsidiary.
Financial Statements
Basis of Financial Statement Preparation
The Company is a wholly owned subsidiary of Amoco and its
presently outstanding public debt securities are guaranteed by
Amoco. Pursuant to Securities and Exchange Commission Staff
Accounting Bulletin No. 53, summarized financial data of the
Company appear in a note to Amoco's 1995 audited consolidated
financial statements. Such financial statements, together with
the Report of Independent Accountants thereon of Amoco's 1995
Annual Report on Form 10-K are incorporated herein by reference.
The unaudited condensed financial statements of the Company
contained herein do not include all information and footnotes
necessary for a complete presentation of results of operations
and financial position in conformity with generally accepted
accounting principles and should be read in conjunction with
Amoco's audited consolidated financial statements.
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AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31,
1995 1994 1993
(millions of dollars)
Revenues:
Sales and other operating
revenues ............... $24,404 $23,619 $22,885
Consumer excise taxes .... 3,339 3,409 2,812
Other income ............. 596 813 233
Total revenues ......... 28,339 27,841 25,930
Costs and Expenses:
Purchased crude oil,
natural gas, petroleum
products and merchandise 12,778 12,330 11,761
Operating expenses ....... 3,991 4,190 4,075
Petroleum exploration
expenses, including
exploratory dry holes .. 498 514 482
Selling and administrative
expenses ............... 1,718 1,901 1,632
Taxes other than income
taxes .................. 3,954 4,087 3,566
Depreciation, depletion,
amortization, and
retirements and
abandonments ........... 2,304 1,894 1,813
Interest expense:
Affiliates.............. 491 86 2
Other................... 180 151 172
Net income applicable to
minority interest....... 5 - -
Total costs and expenses 25,919 25,153 23,503
Income before income taxes . 2,420 2,688 2,427
Income taxes ............... 622 810 624
Net income ................. $ 1,798 $ 1,878 $ 1,803
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AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
December 31,
1995 1994
ASSETS (millions of dollars)
Current Assets:
Cash..................................... $ 145 $ 134
Marketable securities--at cost........... 855 1,104
Accounts and notes receivable (less
allowances of $12 at December 31, 1995,
and $19 at December 31, 1994).......... 2,744 2,763
Inventories.............................. 870 836
Prepaid expenses and income taxes........ 689 562
Total current assets................... 5,303 5,399
Investments and Other Assets:
Affiliates............................... 1,428 171
Other.................................... 1,063 914
2,491 1,085
Properties--at cost, less accumulated
depreciation, depletion and amorti-
zation of $23,337 at December 31, 1995,
and $21,882 at December 31, 1994 (The
successful efforts method of accounting
is followed for costs incurred in oil
and gas producing activities)............ 18,532 18,065
Total assets........................... $26,326 $24,549
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current portion of long-term obligations $ 196 $ 24
Short-term obligations................... 266 112
Accounts payable......................... 2,496 2,217
Accrued liabilities...................... 948 1,124
Taxes payable (including income taxes)... 672 665
Total current liabilities.............. 4,578 4,142
Long-Term Debt:
Affiliates............................... 4,608 4,104
Other debt............................... 2,177 2,086
6,785 6,190
Deferred Credits and Other Non-Current Liabilities:
Income taxes............................. 2,502 2,413
Other.................................... 1,895 2,171
4,397 4,584
Minority Interest........................ 110 5
Shareholder's Equity..................... 10,456 9,628
Total liabilities and shareholder's
equity............................... $26,326 $24,549
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Annual maturities of long-term debt during the next five
years, including the portion classified as current, are $196
million in 1996, $18 million in 1997, $117 million in 1998, $80
million in 1999 and $113 million in 2000.
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AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31,
1995 1994 1993
(millions of dollars)
Cash Flows from Operating Activities:
Net income.......................... $ 1,798 $ 1,878 $ 1,803
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation, depletion,
amortization, and retirements
and abandonments ................. 2,304 1,894 1,813
Increase (decrease) in receivables 142 (361) (131)
Decrease (increase) in payables
and accrued liabilities .......... 56 553 (573)
Other............................... (575) 44 555
Net cash provided by operating
activities ..................... 3,725 4,008 3,467
Cash Flows From Investing Activities:
Capital expenditures................ (2,938) (2,131) (2,472)
Proceeds from dispositions of
property and other assets........... 180 316 217
Other............................... (738) (145) (87)
Net cash used in investing
activities ..................... (3,496) (1,960) (2,342)
Cash Flows From Financing Activities:
New long-term obligations........... 412 118 473
Repayment of long-term obligations . (144) (133) (1,358)
Distributions to Amoco Corporation . (989) (837) (1,284)
Issuance of preferred stock by
affiliate......................... 100 - -
Increase (decrease) in short-term
obligations ...................... 154 (540) 651
Net cash used in financing
activities ..................... (467) (1,392) (1,518)
(Decrease) increase in Cash and
Marketable Securities .............. (238) 656 (393)
Cash and Marketable Securities--
Beginning of Year .................. 1,238 582 975
Cash and Marketable Securities--
End of Year ........................ $ 1,000 $ 1,238 $ 582
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Supplemental Information
1. Supplemental Oil and Gas Exploration and Production Activities
The supplemental information about oil and gas exploration
and production activities for the Company is essentially the same
as reported by Amoco, if Canadian exploration and production
information is excluded. Therefore, the information with respect
to supplemental oil and gas exploration and production activities
is incorporated by reference to Amoco Corporation's 1995 Annual
Report on Form 10-K. Information related to Canadian petroleum
operations is identified separately therein and is not
incorporated herein.
2. Quarterly Financial Data
Summarized quarterly financial data for the years ended
December 31, 1995 and 1994 are as follows:
Revenues Operating Profit* Net Income*
1995 1994 1995 1994 1995 1994
First ... $6,739 $6,136 $ 679 $ 509 $ 446 $ 377
Second .. 7,195 7,397 810 596 502 561
Third ... 7,062 7,204 926 711 606 488
Fourth .. 7,343 7,104 368 654 244 452
* Net income in the fourth quarter of 1995 included charges of
$287 million related to impairment of long-lived assets and a
gain of $83 million on the sale of Amoco Motor Club. Earnings
for the second quarter of 1994 included benefits attributable to
the COET settlement of $270 million, and charges related to
restructuring of $149 million.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
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______________
PART III
Item 10. Directors and Executive Officers of the Registrant
Not required.
Item 11. Executive Compensation
Not required.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Not required.
Item 13. Certain Relationships and Related Transactions
Not required.
______________
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) 1 and 2.The financial statements, supplemental financial
information and financial statement schedules,
together with the report thereon of Price
Waterhouse dated February 27, 1996, appearing in
Amoco Corporation's 1995 Annual Report on Form 10-K
are incorporated by reference in Item 8 of this
Form 10-K. Information related to Canadian
petroleum operations is identified separately
therein and is not incorporated herein. With the
exception of the aforementioned information and the
information incorporated in Items 1, 2, and 3
hereof, Amoco Corporation's 1995 Annual Report on
Form 10-K is not deemed to be filed as part of this
report.
3. Exhibits - See attached Index to Exhibits.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
December 31, 1995.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Chicago, and State of
Illinois, on the 22nd day of March, 1996.
Amoco Company
(Registrant)
JOHN L. CARL
John L. Carl
(President)
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities
indicated on March 22, 1996.
Signatures Titles
JOHN L. CARL President and Director
John L. Carl (Principal Executive Officer)
W. R. HUTCHINSON Vice President, Treasurer, and
W. R. Hutchinson Director
(Principal Financial Officer)
J. R. REID Vice President and Controller
J. R. Reid (Principal Accounting Officer)
DANIEL B. PINKERT Vice President and Director
Daniel B. Pinkert
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AMOCO COMPANY
INDEX TO EXHIBITS
Exhibit
Number Exhibit
3(a) The Certificate of Incorporation of the
registrant is incorporated herein by
reference to Exhibit 3(a) to the
registrant's Annual Report on Form 10-K
for the year ended December 31, 1989. --
3(b) By-laws of the registrant are incorporated
herein by reference to Exhibit 3(b) to the
registrant's Annual Report on Form 10-K for
the year ended December 31, 1989. --
4 The registrant will provide to the Securities
and Exchange Commission upon request copies
of instruments defining the rights of holders
of long-term debt of the registrant and its
consolidated subsidiaries. --
9 None. --
10 None. --
11 None required. --
12 Statement Setting Forth Computation of
Ratio of Earnings to Fixed Charges for the
five years ended December 31, 1995.
13 Amoco Corporation's 1995 Annual Report on
Form 10-K is incorporated herein by reference
as described in this 1995 Form 10-K.
16 None. --
18 None. --
19 None. --
21 None required. --
23 None required. --
24 None. --
27 Financial Data Schedule for the year
ended December 31, 1995.
28 None. --
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EXHIBIT 12
AMOCO COMPANY
STATEMENT SETTING FORTH COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(millions of dollars, except ratios)
Year Ended December 31,
1995 1994 1993 1992 1991
Determination of Income:
Consolidated earnings
before income taxes
and minority interest.. $2,425 $2,688 $2,427 $1,823 $2,093
Fixed charges expensed by
consolidated companies.. 233 140 193 238 231
Adjustments for certain
companies accounted for
by the equity method... 10 7 9 18 12
Adjusted earnings plus
fixed charges........... $2,668 $2,835 $2,629 $2,079 $2,336
Determination of Fixed Charges:
Consolidated interest on
indebtedness (including
interest capitalized)... $ 152 $ 127 $ 162 $ 219 $ 216
Consolidated rental
expense representative
of an interest factor... 71 7 31 20 22
Adjustments for certain
companies accounted for
by the equity method.... 6 5 6 12 17
Total fixed charges...... $ 229 $ 139 $ 199 $ 251 $ 255
Ratio of earnings to
fixed charges........... 11.6* 20.4* 13.2 8.3 9.2
*Based on outstanding public debt obligations. Including debt
with affiliates, the ratio would have been 4.4 as of December
31, 1995, and 13.0 as of December 31, 1994.
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Statement of Income and the Condensed Consolidated
Statement of Financial Position and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000766916
<NAME> AMOCO COMPANY
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 145
<SECURITIES> 855
<RECEIVABLES> 2756
<ALLOWANCES> 12
<INVENTORY> 870
<CURRENT-ASSETS> 5303
<PP&E> 41869
<DEPRECIATION> 23337
<TOTAL-ASSETS> 26326
<CURRENT-LIABILITIES> 4578
<BONDS> 2177
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0
0
<OTHER-SE> 10456
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<SALES> 24404
<TOTAL-REVENUES> 28339
<CGS> 17267
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<OTHER-EXPENSES> 6258
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 180
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<INCOME-TAX> 622
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<PAGE>
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