<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number 1-2475
SHELL OIL COMPANY
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-1299890
(State of Incorporation) (I.R.S. Employer Identification No.)
One Shell Plaza, Houston, Texas 77002
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (713) 241-6161
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] NO [ ].
The number of shares of Common Stock, $10.00 par value, outstanding as
of April 25, 1996 - 1,000 shares.
------------------
OMISSION OF CERTAIN INFORMATION
In accordance with General Instruction H of Form 10-Q, the registrant is
omitting Part II, Items 2, 3, and 4 because:
(1) Royal Dutch Petroleum Company, a Netherlands company, and the "Shell"
Transport and Trading Company, public limited company, an English company, each
of which is a reporting company under the Securities Exchange Act of 1934 that
has filed all material required to be filed by it pursuant to Section 13, 14,
or 15(d) thereof, own directly or indirectly 60 percent and 40 percent,
respectively, of the shares of the companies of the Royal Dutch/Shell Group of
Companies, including all the equity securities of the registrant; and
(2) during the preceding thirty-six calendar months and any subsequent period of
days, there has not been any material default in the payment of principal,
interest, sinking or purchase fund installment, or any other material default
not cured within thirty days with respect to any indebtedness of the registrant
or its subsidiaries, and there has not been any material default in the payment
by the registrant or its subsidiaries of rentals under material long-term
leases.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
SHELL OIL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Millions of Dollars
<TABLE>
<CAPTION>
FIRST QUARTER
---------------------------
1996 1995
-------- --------
<S> <C> <C>
REVENUES
Sales and other operating revenue . . . . . . . . . . . . . . . . . . . $7,149 $6,307
Less: Consumer excise and sales taxes . . . . . . . . . . . . . . . . . 843 759
------ ------
6,306 5,548
Equity earnings, interest and other income . . . . . . . . . . . . . . . 63 110
------ ------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,369 5,658
COSTS AND EXPENSES
Purchases and operating expenses . . . . . . . . . . . . . . . . . . . . 4,793 4,210
Selling, general and administrative expenses . . . . . . . . . . . . . . 238 193
Exploration, including exploratory dry holes . . . . . . . . . . . . . . 49 45
Research expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 29
Depreciation, depletion, amortization and retirements . . . . . . . . . 503 442
Interest and discount amortization . . . . . . . . . . . . . . . . . . . 47 50
Operating taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 128
------- ------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,792 5,097
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST . . . . . . . . . . . . . . 577 561
Federal and Other Income Taxes . . . . . . . . . . . . . . . . . . . . . 84 209
Minority interest in income of subsidiaries . . . . . . . . . . . . . . 10 12
------ ------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 483 $ 340
====== ======
</TABLE>
Note: Certain 1995 amounts have been reclassified to conform with current year
presentation.
____________________________________________
OPERATING SEGMENTS INFORMATION
Millions of Dollars
<TABLE>
<CAPTION>
FIRST QUARTER
-------------------------
1996 1995
------ ------
<S> <C> <C>
SEGMENT NET INCOME (net of minority interest)
Oil and Gas Exploration and Production . . . . . . . . . . . . . . . . $ 314 $ 167
Oil Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 14
Chemical Products . . . . . . . . . . . . . . . . . . . . . . . . . . 86 214
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) --
Corporate Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 (55)
------ ------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 483 $ 340
====== ======
</TABLE>
2
<PAGE> 3
SHELL OIL COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Millions of Dollars
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1996 1995
-------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 805 $ 421
Receivables and prepayments, less allowance for
doubtful accounts . . . . . . . . . . . . . . . . . . . . . . 3,358 3,415
Inventories of oils and chemicals . . . . . . . . . . . . . . . . 794 567
Inventories of materials and supplies . . . . . . . . . . . . . . 234 234
------ -------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . 5,191 4,637
INVESTMENTS, LONG-TERM RECEIVABLES AND
DEFERRED CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . 2,962 2,912
PROPERTY, PLANT AND EQUIPMENT AT COST, LESS
ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF $20,510 AT MARCH 31, 1996 19,501 19,472
AND $20,193 AT DECEMBER 31, 1995 . . . . . . . . . . . . . . . . . ------- -------
$27,654 $27,021
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . ======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable - trade . . . . . . . . . . . . . . . . . . . . . $ 2,018 $ 2,094
Other payables and accruals . . . . . . . . . . . . . . . . . . . 1,180 1,212
Income, operating and consumer taxes . . . . . . . . . . . . . . . 833 808
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 2,888 1,950
------- --------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . 6,919 6,064
LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,069 1,301
DEFERRED INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 2,710 2,841
LONG-TERM LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . 2,222 2,213
MINORITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . 748 749
SHAREHOLDER'S EQUITY
Common stock - 1,000 shares of $10 per share
par value . . . . . . . . . . . . . . . . . . . . . . . . . . -- --
Capital in excess of par value . . . . . . . . . . . . . . . . . . 2,206 2,206
Earnings reinvested . . . . . . . . . . . . . . . . . . . . . . . 11,780 11,647
------- --------
TOTAL SHAREHOLDER'S EQUITY . . . . . . . . . . . . . . . . 13,986 13,853
------- --------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . $27,654 $ 27,021
======= ========
</TABLE>
Note: Certain 1995 amounts have been reclassified to conform with current year
presentation.
3
<PAGE> 4
SHELL OIL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Millions of Dollars
<TABLE>
<CAPTION>
FIRST QUARTER
------------------------
1996 1995
------ -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 483 $ 340
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, amortization and retirements . . . . . . 503 442
Dividends in excess of (less than) equity income . . . . . . . . . (23) (8)
(Increases) decreases in working capital:
Receivables and prepayments . . . . . . . . . . . . . . . . . 57 64
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . (227) (65)
Current payables and accruals . . . . . . . . . . . . . . . . (83) (208)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . (131) 4
Minority interest in income of subsidiaries . . . . . . . . . . . 10 12
Other noncurrent items . . . . . . . . . . . . . . . . . . . . . . (36) (58)
------- -------
Net Cash Provided by Operating Activities . . . . . . . 553 523
CASH FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . (662) (642)
Proceeds from property sales and salvage . . . . . . . . . . . . . . . 127 46
Other investments and advances . . . . . . . . . . . . . . . . . . . . 21 22
------- -------
Net Cash Used for Investing Activities . . . . . . . . . (514) (574)
------- -------
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . 5 97
Principal payments on long-term debt . . . . . . . . . . . . . . . . . (243) (22)
Proceeds from sales of redeemable securities
of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . (1) --
Dividends to shareholder . . . . . . . . . . . . . . . . . . . . . . . (350) (350)
Dividends to minority interest . . . . . . . . . . . . . . . . . . . . (10) (7)
Increase (decrease) in short-term obligations . . . . . . . . . . . . 944 134
------- -------
Net Cash Provided by Financing Activities . . . . . . . 345 (148)
------- -------
NET CASH FLOWS
Increase (Decrease) in cash and cash equivalents . . . . . . . . . . . $ 384 $ (199)
======= =======
CASH AND CASH EQUIVALENTS
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . $ 421 $ 617
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . 384 (199)
------- -------
Balance at end of period . . . . . . . . . . . . . . . . $ 805 $ 418
======= =======
</TABLE>
Note: Certain 1995 amounts have been reclassified to conform with current year
presentation.
4
<PAGE> 5
SHELL OIL COMPANY AND SUBSIDIARIES
NOTES TO INTERIM FINANCIAL STATEMENTS
A. INTERIM FINANCIAL STATEMENT MATTERS
The unaudited financial statements and summarized notes of Shell Oil
Company (the Company) and its consolidated subsidiaries (Shell Oil) included in
this report do not include complete financial information and should be read in
conjunction with the Consolidated Financial Statements and the Notes to
Consolidated Financial Statements filed with the Securities and Exchange
Commission in the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995. The financial information presented in the financial
statements included in this report reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of results for the
interim periods presented. Any such adjustments are of a normal recurring
nature, except as may otherwise be described in Management's Discussion and
Analysis of Financial Condition and Results of Operations.
The results for the first quarter of 1996 should not be construed as
necessarily indicative of future financial results.
B. SUMMARIZED FINANCIAL INFORMATION - SHELL PIPE LINE CORPORATION
The following summarized financial information for Shell Pipe Line
Corporation, a wholly owned subsidiary of Shell Oil Company, is presented here
for the information of holders of Shell Pipe Line Corporation's 7 1/2%
Guaranteed Sinking Fund Debentures due 1999, which are fully guaranteed by
Shell Oil Company.
<TABLE>
<CAPTION>
March 31 December 31
Millions of dollars 1996 1995
-------- -----------
<S> <C> <C>
Current assets . . . . . . . . . . . . . . . . . . . . . . . . $129 $154
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . 560 524
Current Liabilities . . . . . . . . . . . . . . . . . . . . . 61 89
Noncurrent Liabilities . . . . . . . . . . . . . . . . . . . . 75 73
</TABLE>
<TABLE>
<CAPTION>
First Quarter
----------------------------
Millions of dollars 1996 1995
------ --------
<S> <C> <C>
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 87 $ 75
Operating income . . . . . . . . . . . . . . . . . . . . . . . 50 39
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . 37 30
</TABLE>
C. CONTINGENCIES AND OTHER MATTERS
Shell Oil is subject to a number of possible loss contingencies.
These include actions based upon environmental laws involving present and past
operating and waste disposal locations and related private claims, contract and
product liability actions, and actions challenging the correctness of oil and
gas royalty calculations. In addition, federal, state and local income,
property and excise tax returns are being examined and certain interpretations
by Shell Oil of complex tax statutes, regulations and practices are being
challenged.
Shell Oil has received allegations or claims under the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA) or similar
state statutes that it is involved at 220 sites, including the Rocky Mountain
Arsenal (RMA). As of March 31, 1996, discussions or activities were
5
<PAGE> 6
ongoing concerning 80 of these sites, in some cases in the early stages.
During the first quarter of 1996, expenses recorded under CERCLA and such state
statutes were approximately $2 million and approximately $8 million was charged
to previously established reserves. The United States and the Company have
entered into a consent decree to settle environmental claims at the RMA and,
with the State of Colorado, have agreed to a Conceptual Remedy for the cleanup.
The Company has accrued $500 million for its share of the related costs, $271
million of which had been spent as of March 31, 1996. The Company believes its
current accruals will be adequate to cover its anticipated costs under the
Conceptual Remedy for the RMA. Shell Oil also has certain obligations under the
Resource Conservation and Recovery Act (RCRA) and similar state laws regarding
corrective action at manufacturing locations and provides assurances regarding
its financial ability to meet certain closure and post-closure obligations that
will arise in the future at such locations under such laws.
Since 1984, the Company has been named as a defendant in numerous
product liability cases, including class actions, involving the failure of
plumbing systems in the U.S. constructed with polybutylene plastic pipe. The
plaintiffs in the litigation claim actual and punitive damages arising
primarily from leaking residential plumbing systems. The Company manufactured
the resin used to make the pipe in these systems. Two other substantial
manufacturers made the resins for the polyacetal insert fittings used in the
residential plumbing systems (the fittings' co-defendants) and, with the
manufacturers of the fittings and pipe, are also defendants in these cases.
The Company's position and most of the judgments to date have confirmed that
most of the leaks have occurred in residential plumbing systems due to failure
of the polyacetal insert fitting system, which is no longer used. In addition
to the numerous cases which have been filed on behalf of individual claimants,
over 25 purported statewide, partial statewide or nationwide class actions have
been filed. During 1995, Shell and one of the fittings co-defendants settled a
nationwide class action in Tennessee State Court while the other fittings
co-defendant settled a nationwide class action in Alabama State Court. The
parties agreed to coordinate the implementation of these two settlements.
Settlement has also been reached with an attorney representing many of the
known opt-outs to such Tennessee settlement. However, a significant number of
opt-outs remain and at least some are likely to seek to litigate their claims.
The class action settlements provide for the creation of an entity to receive
and handle claims and for a $950 million fund to pay such claims, which claims
may be made over a period of up to 14 years, depending on various factors. If
the settlement funds are exhausted, additional funds may be provided by the
defendants or claimants who have not received their full benefits under the
settlements may seek their remedy in a new court proceeding at that time.
There are significant issues to be resolved as to how costs will be shared
among certain co-defendants. The Company and one fittings co-defendant have
agreed to arbitration during 1996 to determine how the costs of the settlements
will be shared between them; the other fittings co-defendant has agreed to fund
10% of all acetal fitting costs related to the class action settlements. At
least some contribution to the settlements is expected from other parties.
There are issues remaining to be resolved in connection with certain litigation
in other states and possible conflicts among the various courts. Additionally,
in matters outside the residential plumbing litigation and settlements, claims
involving problems with polybutylene pipe used in municipal water distribution
systems increased during 1995. The Company will continue to defend vigorously
in these matters but it cannot currently predict when or how polybutylene
related matters will finally be resolved.
In December 1993, a Los Angeles Superior Court jury, in two
consolidated lawsuits against the Company and its subsidiary involving the
condition of the Dominguez oil field, returned a verdict for the plaintiffs in
the amount of $46.9 million compensatory damages and $173 million punitive
damages. Plaintiffs alleged they were defrauded, that the oil and gas lease was
breached, and that soil contamination on the property constitutes a continuing
trespass. Final resolution through the appeals process could take at least
another year. The Company and its subsidiary believe the verdict was wrong and
expect ultimately to prevail in the litigation.
6
<PAGE> 7
The Company is a party to litigation regarding Nemagon(R), an
agricultural chemical containing DBCP manufactured and sold by it from 1955 to
1978. In California, the claims involve alleged contamination of water wells
based on revisions to governmental standards. The claims in the litigation
seek the cost of cleanup and future monitoring of such water wells. The
Company is a co-defendant in these cases with other substantial manufacturers
and suppliers of the same chemical. During the second quarter of 1995, the
majority of these cases were settled, with the defendants accepting certain
future obligations. Ultimate exposure will not be known with certainty until
all cases are resolved and time has passed to see what cleanup will in fact be
required, which may be affected both by changes in DBCP levels detected in
certain water tables, new wells drilled and regulations in place. Cases have
been filed against the Company, other substantial manufacturers and suppliers
of DBCP and various banana growers alleging that the plaintiffs suffer
fertility problems arising from exposure to DBCP while working on banana
plantations outside the United States. The Company is contesting whether any
injury has in fact been incurred by plaintiffs, whether DBCP was in fact the
cause of any such injury as may exist, and in any case if the Company was a
supplier or otherwise has liability in connection with any such injury.
The Company has filed declaratory judgment actions to resolve
insurance coverage for polybutylene through mid-1985; for asbestos, Nemagon(R)
and other toxic tort claims; and for certain environmental claims.
The Company's assessment of these matters is continuing. Future
provisions may be required as administrative and judicial proceedings progress
and the scope and nature of remediation programs and related costs estimates
are clarified. However, while periodic results may be significantly affected
by these matters, based upon developments to date, the management of the
Company anticipates that it will be able to meet related obligations without a
material adverse effect on its financial position.
________________________
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Shell Oil Company reported record first quarter net income of $483
million, an increase of $143 million, or 42 percent, over the $340 million in
the same 1995 period. Adjusted net income, which excludes special items, was
$385 million for the first quarter of 1996, an increase of $82 million, or 27
percent.
All three operating segments experienced growth during the first
quarter of 1996, as production of crude oil and natural gas increased and sales
volumes of refined and chemical products were higher. In addition, oil and gas
exploration and production benefited from improved prices for crude oil and
natural gas, while oil products margins improved somewhat over their low levels
of the 1995 quarter. These benefits more than offset lower chemical margins,
which declined substantially from their higher 1995 levels.
Special items benefited net income $98 million in the first quarter of
1996 and $37 million in the 1995 quarter. In the 1996 quarter, special items
included benefits from prior year tax adjustments and from gains on the sale of
oil and gas producing properties.
7
<PAGE> 8
OIL AND GAS EXPLORATION AND PRODUCTION
<TABLE>
<CAPTION>
Income Highlights FIRST QUARTER
- ----------------- -------------------------
1996 1995
--------- ----------
(millions of dollars)
<S> <C> <C>
Income from Ongoing Operations . . . . . . . . . . . . . . . . . . . . $ 314 $ 167
Other charges* . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
-------- ----------
Segment Net Income . . . . . . . . . . . . . . . . . . . . . . . . 314 167
Special Items (includes "Other Charges") . . . . . . . . . . . . . . . 23 40
-------- --------
Adjusted Net Income . . . . . . . . . . . . . . . . . . . . . . . . . 291 127
</TABLE>
____________________
* Amounts associated with major product classifications for which there has
been no revenue stream or investment in the last five years.
Oil and gas exploration and production segment net income totaled $314
million for the first quarter of 1996, an increase of $147 million over the
1995 quarter. Adjusted net income, which excludes special items, was $291
million for the 1996 quarter, up $164 million.
In the first quarter of 1996, income benefited from higher prices and
production of crude oil and natural gas. Natural gas prices rebounded from the
depressed levels of the 1995 quarter, increasing 57 percent. Average domestic
crude oil prices increased $1.78 per barrel in the 1996 quarter over 1995,
averaging $16.55 per barrel, the highest level in over three years. Domestic
crude oil production rose 22,000 barrels per day, or 6 per cent, while natural
gas production increased 154 million cubic feet per day, or 9 percent. These
production increases were mainly in the Gulf of Mexico and more than offset
natural declines elsewhere.
OIL PRODUCTS
<TABLE>
<CAPTION>
Income Highlights FIRST QUARTER
- ----------------- ------------------------
1996 1995
------- ----------
(millions of dollars)
<S> <C> <C>
Income from Ongoing Operations . . . . . . . . . . . . . . . . . . . . $ 71 $ 14
Other charges* . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
------- ----------
Segment Net Income . . . . . . . . . . . . . . . . . . . . . . . . 71 14
Special Items (includes "Other Charges") . . . . . . . . . . . . . . - -
------- ----------
Adjusted Net Income . . . . . . . . . . . . . . . . . . . . . . . . . 71 14
</TABLE>
_____________________
* Amounts associated with major product classifications for which there has
been no revenue stream or investment in the last five years.
Oil products segment net income was $71 million in the first quarter
of 1996, an increase of $57 million over 1995. Adjusted net income, which
excludes special items, was also $71 million for the first quarter of 1996.
Refined product margins, which were severely depressed during the
first quarter of 1995, were higher in the 1996 quarter as selling price
increases exceeded rising crude oil costs. Operating costs declined from the
1995 quarter, primarily due to a lower level of scheduled refinery maintenance
in 1996. Sales volumes of refined products increased 8 percent in the 1996
period, while sales volumes of automotive gasolines to branded service stations
increased 1 percent.
8
<PAGE> 9
CHEMICAL PRODUCTS
<TABLE>
<CAPTION>
Income Highlights FIRST QUARTER
- ----------------- -------------------------
1996 1995
-------- ---------
(millions of dollars)
<S> <C> <C>
Income from Ongoing Operations . . . . . . . . . . . . . . . . . . . . $ 89 $ 217
Other charges* . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (3)
-------- ----------
Segment Net Income . . . . . . . . . . . . . . . . . . . . . . . . 86 214
Special Items (includes "Other Charges") . . . . . . . . . . . . . . . 15 (3)
------- ----------
Adjusted Net Income . . . . . . . . . . . . . . . . . . . . . . . . . 71 217
</TABLE>
_____________________
* Amounts associated with major product classifications for which there as been
no revenue stream or investment in the last five years.
Chemical products segment net income was $86 million in the first
quarter of 1996, a decrease of $128 million from the respective 1995 period.
Adjusted net income, which excludes special items, was $71 million for the 1996
quarter, down $146 million.
In the 1996 quarter, margins declined substantially due to lower
prices and higher feedstock costs, while sales volumes increased over the 1995
quarter. These effects were mostly in primary chemicals.
OTHER
Net income for the other operating segment was a loss of $2 million in
the first quarter of 1996 compared to a nil amount in the first quarter of
1995.
CORPORATE ITEMS
Corporate items totaled a positive $14 million in the first quarter of
1996 compared to charges totaling $55 million in the first quarter of 1995.
However, excluding a prior year tax adjustment, charges totaled $48 million in
the first quarter of 1996, decreasing $7 million compared to the 1995 period.
Financing costs were lower primarily due to lower interest rates.
FINANCIAL CONDITION
CAPITAL RESOURCES AND LIQUIDITY
Cash flow provided by operating activities totaled $553 million for
the first quarter of 1996, compared with $523 million last year, an increase of
$30 million. The increase was due to higher earnings in 1996. The major uses
of cash generated from operating activities coupled with an increase in debt of
$706 million, were for capital expenditures of $662 million and a dividend
payment of $350 million. During the first quarter of 1996, the Company
borrowed $549 million at market rates and terms from a company affiliated with
the Royal Dutch/Shell Group of companies.
OTHER MATTERS
In addition to the economic conditions and other matters discussed
above affecting Shell Oil, the operations, earnings and financial condition of
Shell Oil may be affected by political developments; litigation; and
legislation, regulation and other actions taken by federal, state, local and
international governmental entities, including those matters discussed in Note
C of the Notes to Interim Financial statements.
_____________________
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There were no new legal proceedings or developments to existing legal
proceedings which required reporting in the first quarter of 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
None
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.
SHELL OIL COMPANY
By /s/ N. J. CARUSO
--------------------------
N. J. Caruso, Controller
(Principal Accounting and
Duly Authorized Officer)
Date: April 25, 1996
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<S> <C> <C>
27 Financial Data Schedule . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000089629
<NAME> SHELL OIL COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 805
<SECURITIES> 0
<RECEIVABLES> 2138
<ALLOWANCES> 18
<INVENTORY> 1028
<CURRENT-ASSETS> 5191
<PP&E> 40011
<DEPRECIATION> 20510
<TOTAL-ASSETS> 27654
<CURRENT-LIABILITIES> 6919
<BONDS> 1069
<COMMON> 0
0
0
<OTHER-SE> 13986
<TOTAL-LIABILITY-AND-EQUITY> 27654
<SALES> 6226
<TOTAL-REVENUES> 6369
<CGS> 4793
<TOTAL-COSTS> 4924
<OTHER-EXPENSES> 552
<LOSS-PROVISION> 4
<INTEREST-EXPENSE> 47
<INCOME-PRETAX> 577
<INCOME-TAX> 84
<INCOME-CONTINUING> 483
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 483
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
