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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997 or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-170-2
AMOCO CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 36-1812780
(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)
312-856-6111
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address, and former fiscal year, if
changed since last report)
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
Number of shares outstanding as of September 30, 1997--486,937,192
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PART I-- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Income
(millions of dollars)
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
Revenues:
Sales and other operating
revenues................... $ 7,984 $ 7,910 $23,724 $23,018
Consumer excise taxes........ 894 869 2,577 2,532
Other income................. 105 239 299 447
Total revenues ............ 8,983 9,018 26,600 25,997
Costs and Expenses:
Purchased crude oil,
natural gas, petroleum
products and merchandise... 4,471 4,582 13,144 12,856
Operating expenses........... 1,219 1,165 3,649 3,455
Petroleum exploration
expenses, including
exploratory dry holes...... 132 165 417 416
Selling and administrative
expenses................... 555 488 1,562 1,611
Taxes other than income taxes 1,058 1,088 3,163 3,155
Depreciation, depletion,
amortization, and retire-
ments and abandonments..... 570 583 1,662 1,674
Interest expense............. 97 59 269 164
Total costs and expenses... 8,102 8,130 23,866 23,331
Income before income taxes..... 881 888 2,734 2,666
Income taxes................... 246 253 803 703
Net income..................... $ 635 $ 635 $ 1,931 $ 1,963
Weighted average number of
shares of common stock
outstanding (in thousands)... 488,253 497,203 491,906 496,984
Per Share Data (Based on weighted
average shares outstanding):
Net income..................... $ 1.30 $ 1.28 $ 3.92 $ 3.95
Cash dividends per share....... $ .70 $ .65 $ 2.10 $ 1.95
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Consolidated Statement of Financial Position
(millions of dollars)
Sept. 30, Dec. 31,
ASSETS 1997 1996
Current Assets:
Cash......................................... $ 186 $ 186
Marketable securities -- at cost (all
corporate except $52 at September 30, 1997,
and $141 at December 31, 1996 which
represent state and municipal securities).. 839 1,135
Accounts and notes receivable (less
allowances of $17 at September 30, 1997,
and $17 at December 31, 1996).............. 3,777 3,942
Inventories
Crude oil and products..................... 992 795
Materials and supplies..................... 274 274
Prepaid expenses, income taxes and other..... 969 731
Total current assets....................... 7,037 7,063
Investments and Other Assets:
Investments and related advances............. 900 796
Long-term receivables and other assets....... 1,013 841
1,913 1,637
Properties--at cost, less accumulated depre-
ciation, depletion and amortization of
$27,931 at September 30, 1997, and $27,111
at December 31, 1996 (The successful efforts
method of accounting is followed for costs
incurred in oil and gas producing activities) 23,914 23,400
Total assets............................... $ 32,864 $ 32,100
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term obligations..... $ 170 $ 151
Short-term obligations....................... 1,079 821
Accounts payable............................. 2,662 3,196
Accrued liabilities.......................... 923 908
Taxes payable (including income taxes)....... 1,067 1,063
Total current liabilities.................. 5,901 6,139
Long-term Obligations:
Debt......................................... 4,843 4,153
Capitalized leases........................... 89 76
4,932 4,229
Deferred Credits and Other Non-Current Liabilities:
Income taxes................................. 3,061 2,850
Other........................................ 2,290 2,345
5,351 5,195
Minority Interest.............................. 432 129
Shareholders' Equity:
Common stock (authorized 800,000,000 shares;
issued and outstanding at September 30,
1997--486,937,192; December 31, 1996
--497,275,364 shares)...................... 2,584 2,646
Earnings retained and invested in the
business................................... 13,805 13,806
Pension liability adjustment................. (25) (25)
Foreign currency translation adjustment...... (116) (19)
16,248 16,408
Total liabilities and shareholders' equity. $ 32,864 $ 32,100
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Consolidated Statement of Cash Flows
(millions of dollars)
Nine Months Ended
September 30,
1997 1996
Cash Flows from Operating Activities:
Net income.................................. $ 1,931 $ 1,963
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, amortization,
and retirements and abandonments........ 1,662 1,674
Decrease (increase) in receivables........ 172 (140)
Increase in inventories................... (200) (111)
Decrease in payables and accrued
liabilities............................. (583) (181)
Deferred taxes and other items............ 116 (371)
Net cash provided by operating activities. 3,098 2,834
Cash Flows from Investing Activities:
Capital expenditures........................ (2,335) (2,663)
Proceeds from dispositions of property
and other assets.......................... 450 705
Net investments, advances and business
acquisitions.............................. (507) (642)
Proceeds from sales of investments.......... 20 110
Other....................................... 54 15
Net cash used in investing activities..... (2,318) (2,475)
Cash Flows from Financing Activities:
New long-term obligations................... 775 346
Repayment of long-term obligations.......... (116) (385)
Cash dividends paid......................... (1,038) (958)
Issuance of common stock.................... 101 40
Acquisitions of common stock................ (1,056) -
Increase in short-term obligations.......... 258 165
Net cash used in financing activities..... (1,076) (792)
Decrease in Cash and Marketable Securities.... (296) (433)
Cash and Marketable Securities-
Beginning of Period......................... 1,321 1,394
Cash and Marketable Securities-End of Period.. $ 1,025 $ 961
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Basis of Financial Statement Preparation
The consolidated financial statements contained herein are
unaudited and have been prepared from the books and records of
Amoco Corporation ("Amoco" or the "Corporation"). In the opinion
of management, the consolidated financial statements reflect all
adjustments, consisting of only normal recurring adjustments,
necessary for a fair statement of the results for the interim
periods. The consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and, therefore,
do not include all information and notes necessary for a complete
presentation of results of operations, financial position and
cash flows in conformity with generally accepted accounting
principles.
Item 2. Management's Discussion and Analysis
Results of Operations
Net income for the third quarter of 1997 of $635 million was
equal to third-quarter 1996 earnings. Earnings per share of $1.30
were two percent over the comparable 1996 period. Included in
1996 earnings was a $97 million after-tax gain on the sale of
Amoco's polystyrene foam products business. Excluding the gain,
1997 third-quarter earnings were up 18 percent. The increase in
earnings reflected stronger refining margins, and an increase in
chemical sales volumes for most product lines. Partially
offsetting were lower worldwide crude oil prices and lower North
American production volumes. A gain on the sale of Amoco's
Canadian arctic drilling unit during the quarter largely offset
higher corporate and other operations expenses related to revised
estimates of litigation and tax obligations.
Net income for the first nine months of 1997 totaled $1,931
million or $3.92 per share. Net income for the first nine months
of 1996 amounted to $1,810 million, excluding the third-quarter
1996 asset-sale gain of $97 million, and first-quarter 1996 gains
of $56 million on certain Canadian asset dispositions. Favorably
affecting 1997 earnings were higher exploration and production
("E&P") results, primarily due to higher natural gas prices, and
improved refining operations. Offsetting were lower chemical
earnings compared to 1996, mainly as a result of lower paraxylene
margins.
Sales and other operating revenues for the third quarter of 1997
totaled $8 billion, about even with the corresponding 1996
period. For the first nine months of 1997 revenues were $23.7
billion, up slightly over the 1996 revenues of $23 billion,
reflecting higher prices for natural gas and refined products and
higher sales volumes for most chemical product lines.
Other income in the 1997 third quarter was $134 million lower
than the comparable 1996 period. In the 1996 third quarter, other
income reflected the gain on the sale of Amoco's polystyrene foam
products business.
Purchases of crude oil, natural gas, petroleum products and
merchandise totaled $4.5 billion for the third quarter of 1997,
two percent lower than the 1996 third quarter. The decrease was
primarily attributable to lower crude oil purchase prices. Year-
to-date purchases in 1997 were two percent higher than the 1996
nine-month period, primarily due to higher refined products
volumes and higher natural gas prices, offset by lower crude oil
purchase prices and volumes.
Third-quarter 1997 operating expenses were up slightly over the
third quarter of 1996. Operating expenses for the first nine
months were six percent above the prior-year period, reflecting
higher refining maintenance expenses, primarily in the first
quarter, and higher U.S. production costs.
Third-quarter 1997 exploration expenses of $132 million decreased
by $33 million over the similar 1996 period, reflecting lower dry
hole costs worldwide. For the first nine months of 1997,
exploration expenses of $417 million were flat compared with
1996, with lower exploration expenses in the United States and
Canada offset by higher exploration expenses overseas.
Selling and administrative expenses totaled $555 million for the
1997 third quarter compared with $488 million for the comparable
1996 period. Reflected in the third quarter 1997 results were
unfavorable before-tax currency effects of $29 million compared
with favorable before-tax currency effects of $3 million in the
third quarter of 1996. Selling and administrative expenses for
the first nine-months of 1997 were slightly lower than the first
nine months of 1996.
Interest expense increased $38 million and $105 million over the
third quarter and first nine months of 1996, respectively,
reflecting an increase in long-term debt and associated interest
expense on revised estimates of litigation and tax obligations.
Included in 1996 was a reduction of interest expense on tax
obligations.
For the 12 months ended September 30, 1997, return on average
shareholders' equity was 17.5 percent compared with 14.0 percent
for the 12 months ended September 30, 1996. Return on average
capital employed was 13.3 percent for the 12-month period ended
September 30, 1997, compared with 10.9 percent for the
corresponding prior-year period.
Results by Industry Segment
As previously announced, Amoco changed the basis upon which
operations are grouped for the purpose of business segment
reporting to maintain alignment with changes made in its internal
structure. Canadian supply and marketing operations for crude
oil, sulfur and natural gas liquids are now included in the
petroleum products segment. Previously, those businesses were
reported in the E&P segment. Segment earnings for 1996 have been
restated to conform to the new basis.
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Three Months Nine Months
Ended Ended
September 30, September 30,
(millions of dollars) 1997 1996 1997 1996
Exploration and Production
United States.............. $ 217 $ 224 $ 791 $ 739
Canada..................... 61 8 164 124
Overseas................... 67 104 261 310
Subtotal................... 345 336 1,216 1,173
Petroleum Products........... 241 119 454 300
Chemicals.................... 172 217 504 630
Corporate and Other
Operations*............... (123) (37) (243) (140)
Net Income................. $ 635 $ 635 $1,931 $1,963
* Corporate and other operations include net interest and general
corporate expenses as well as the results of investments in
technology companies, real estate interests and other
activities.
Exploration and Production
Operating Statistics
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
Net Production of Natural Gas(million cubic feet per day)
United States............ 2,356 2,579 2,385 2,574
Canada................... 775 802 757 821
Overseas................. 910 840 974 949
Total.................. 4,041 4,221 4,116 4,344
Net Production of Crude Oil and NGL(thousand barrels per day)
United States--crude oil. 161 180 165 181
--NGL....... 105 117 112 113
Canada--crude oil........ 50 50 51 50
--NGL.............. 10 11 10 12
Overseas................. 292 307 299 300
Total.................. 618 665 637 656
Exploration and Production - U. S.
U.S. E&P operations earned $217 million during the third quarter
of 1997 compared with $224 million for the similar 1996 period.
The decline primarily reflected lower crude oil prices and lower
crude oil and natural gas production. Partly offsetting were
lower exploration expenses and higher natural gas prices.
Earnings of $791 million for first nine months of 1997 increased
seven percent over the comparable 1996 period, primarily
reflecting higher natural gas prices and lower exploration
expenses, offset by lower production due to normal field declines
and dispositions.
Amoco's third-quarter U.S. natural gas prices averaged
approximately $1.80 per thousand cubic feet ("mcf"), an increase
of six percent over the comparable period of 1996. Amoco's
average U.S. crude oil prices of about $17.50 per barrel declined
over $3.00 per barrel from the third quarter of 1996.
For the first nine months of 1997, Amoco's U.S. natural gas
prices averaged about $2.00 per mcf, about a 30 cent per mcf
increase over the prior-year period. Amoco's U.S. crude oil
prices averaged over $18.60 per barrel during the first nine
months of 1997, a decrease of about 60 cents per barrel from the
comparable 1996 period.
Exploration and Production - Canada
Canadian operations earned $61 million in the third quarter of
1997 compared with restated 1996 third-quarter earnings of $8
million. The 1996 earnings were restated to reflect the transfer
of Canadian supply and marketing operations for crude oil, sulfur
and natural gas liquids to the petroleum products segment. The
increase in 1997 earnings primarily reflected a gain on the sale
of Amoco's Canmar arctic drilling unit and higher natural gas
prices, partially offset by lower crude oil prices and lower
natural gas production.
Earnings for the first nine months of 1997 totaled $164 million
compared with nine-month restated 1996 earnings of $68 million,
excluding gains of $56 million on the sale of assets. Excluding
that gain, the earnings improvement resulted primarily from
higher natural gas prices, lower exploration expenses and a gain
on the sale of the arctic drilling unit. Partially offsetting was
lower natural gas production due to property dispositions and
natural field declines.
Amoco's Canadian natural gas prices averaged $1.20 per mcf for
the quarter, about 25 cents per mcf higher than the third quarter
of 1996. For the first nine months, Canadian natural gas prices
increased 34 percent over the comparable 1996 period to average
about $1.40 per mcf.
Canadian crude oil prices averaged $14.00 per barrel for the
third quarter of 1997, about $4.20 per barrel below the prior-
year third quarter average, reflecting lower industry prices and
increased lower-priced heavy oil production. For the first nine
months of 1997, Canadian crude oil prices averaged about $14.90
per barrel, a $2.30 per barrel decrease from the 1996 level.
Exploration and Production - Overseas
Overseas E&P operations earned $67 million in the third quarter
of 1997 compared with $104 million in the third quarter of 1996.
The decline was primarily due to lower crude oil prices. For the
first nine months of 1997, overseas E&P operations earned $261
million, a decline of $49 million from the comparable prior-year
period. The decrease mainly reflected higher exploration
expenses, which more than offset favorable currency effects.
Third-quarter 1997 natural gas production increased due to new
production in Bolivia and higher European production. Crude oil
production for the third quarter of 1997 declined as lower
production in China and Egypt more than offset new production in
Bolivia and Venezuela.
Petroleum Products
Operating Statistics
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
U.S. Refined Product Sales
(thousand barrels per day)
Gasoline................. 686 659 652 633
Distillates.............. 352 343 338 358
Other products........... 238 230 199 198
Total.................. 1,276 1,232 1,189 1,189
Input to U.S. Crude Units
(thousand barrels per day) 988 959 943 950
Refinery Utilization Rate 98% 95% 93% 94%
Petroleum Products activities earned $241 million for the third
quarter compared with restated earnings of $119 million in the
third quarter of 1996. The 1996 earnings were restated to reflect
the transfer of Canadian supply and marketing operations for
crude oil, sulfur and natural gas liquids to the petroleum
products segment. The increase in third-quarter 1997 earnings
primarily resulted from improved refinery operations and higher
U.S. refined product margins and volumes.
Earnings for the first nine months of 1997 totaled $454 million,
an increase of $154 million over the comparable period of 1996.
The increase reflected higher U.S. refined product margins and
favorable product mix. Offsetting was lower throughput primarily
experienced in the first quarter of 1997, reflecting planned
turnaround at Amoco's largest refineries.
Chemicals
Chemical earnings of $172 million for the third quarter of 1997
compared with $120 million for the similar 1996 period, excluding
a $97 million after-tax gain on the 1996 sale of Amoco's
polystyrene foam products business. The increase in earnings
primarily reflected increased productive capacity, and higher
sales volumes and margins for most product lines.
For the first nine months of 1997, earnings totaled $504 million
compared with $533 million for the same period in 1996, excluding
the asset-sale gain. The decline in earnings resulted from lower
paraxylene and purified terephthalic acid ("PTA") margins, partly
offset by increased sales volumes and higher olefins margins.
Corporate and Other Operations
Corporate and other operations include net interest and general
corporate expenses as well as the results of investments in
technology companies, real estate interests and other activities.
Corporate and other operations incurred net expenses of $123
million and $243 million for the third quarter and first nine
months of 1997, respectively, compared with net expenses after
tax of $37 million and $140 million in the corresponding 1996
periods.
The increase in corporate and other operations expenses primarily
reflected increases in interest expense for long-term debt,
revised estimates of litigation and tax obligations, including
associated interest expense, and adverse currency effects.
Outlook
The Corporation and the petroleum industry will continue to be
affected by the volatility of crude oil and natural gas prices.
Also affecting chemicals and petroleum products activities is the
overall industry product supply and demand balance. Amoco's
future performance is expected to continue to be impacted by
ongoing cost reduction programs; the divestment of non-strategic
assets; application of new technologies; and new governmental
regulations.
Amoco will pursue areas that capitalize on its natural gas
resources and continue to expand internationally. As announced in
June, Amoco plans to divest a number of its oil and gas
properties and royalty interests in the United States as part of
a major refocusing of its U.S. exploration and production
business. During the third quarter of 1997, Amoco had a sale
pending for the San Juan Basin properties in New Mexico. There
are three remaining packages of non-core U.S. crude oil and
natural gas properties expected to be sold by year-end 1997 or
early 1998. Amoco has also agreed to sell its intrastate pipeline
unit in Texas. The proceeds from the divestments will be invested
in more strategic areas.
Amoco's worldwide barrel-oil-equivalent production is expected to
increase from 1996 levels by 25 percent over the next five years,
with the largest increases expected to occur in the later years.
Production in 1997 is expected to decrease from year-end 1996,
with incremental production from the Gulf of Mexico, and
production from Venezuela, Colombia and Bolivia, being offset by
normal field declines and dispositions.
Amoco Argentina Oil Company ("Amoco Argentina") and Bridas
Corporation ("Bridas") are in the process of creating a jointly
owned company called Pan American Energy LLC. The new diversified
enterprise will be formed, pending definitive agreements, by
contributing the respective assets of Amoco and Bridas in the
Southern Cone of South America and will create the second largest
producer of crude oil and natural gas in Argentina. Amoco will
hold a 60 percent interest in the new venture.
Amoco also recently formed a limited partnership with YPF S.A.,
called Crescendo Resources L.P., to manage about one trillion
cubic feet of natural gas in the Texas Panhandle and western
Oklahoma. The combined resources are expected to operate more
efficiently and allow the opportunity of sharing best practices
and technology of both partners.
Recently, Amoco announced a definitive agreement with Shell Oil
Company to build a natural gas processing plant in Mississippi to
handle anticipated production increases in the Gulf of Mexico.
In petroleum products, recent refinery operations have seen
improved margins over the last nine months. However, Amoco
anticipates a return to more historical levels in U.S. industry
refining margins in the long-term. Amoco will continue to pursue
additional cost reduction programs and improved asset
utilization. Amoco's marketing strategy will continue to
emphasize brand product quality and growth in its position as a
convenience retailer. Strategic alliances with such companies as
McDonald's Corporation and Femsa in Mexico are expected to
continue.
In chemicals, Amoco's overall strategy is to manage its portfolio
to optimize the quality of its businesses through acquisitions
and divestments, and selectively invest in local market growth
for existing businesses. While current industry excess PTA
capacity is putting downside pressure on margins, long-term
worldwide annual growth is expected to be eight percent.
Paraxylene ("PX") long-term annual growth is expected to be seven
percent. In order to meet expected growth in PTA and PX, Amoco is
expanding its wholly owned and joint-ventures operations. Amoco's
naphthalene dicarboxylate ("NDC") plant in Decatur, Alabama
achieved full-scale production capacity of 27,000 tons in the
third quarter of 1997. Amoco is planning on expanding the
capacity to between 40,000 and 50,000 tons by 1999.
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Liquidity and Capital Resources
Cash flows from operating activities for the first nine months of
1997 amounted to $3.1 billion compared with $2.8 billion in the
prior-year period. Working capital of $1,136 million at September
30, 1997 compared with $924 million at December 31, 1996. The
Corporation's current ratio was 1.19 to 1 at September 30, 1997,
compared with 1.15 to 1 at year-end 1996. As a matter of policy,
Amoco 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
Corporation has ready access to both short- and long-term debt
markets.
Long-term receivables and other assets at September 30, 1997
included $271 million in restricted cash and investments
committed to the operatorship of a Bolivian oil and gas company,
Empresa Petrolera Chaco. Amoco completed the agreement for
operatorship and 50 percent ownership of Empresa Petrolera Chaco
in April 1997.
Amoco's debt totaled $6.1 billion at September 30, 1997, an
increase of $1 billion over the $5.1 billion at year-end 1996.
Debt as a percentage of debt-plus-equity was 26.7 percent at
September 30, 1997, and 23.6 percent at year-end 1996. Amoco
Corporation guarantees the public debt obligations of Amoco
Company. Amoco Corporation and Amoco Company guarantee the public
notes and debentures of Amoco Canada Petroleum Company Ltd.
("Amoco Canada") and Amoco Argentina.
In the first nine months of 1997, Amoco completed $1 billion of
the previously announced $2 billion, two-year common stock
repurchase program. This represented 11.1 million common shares.
It is anticipated that share repurchases made in the fourth
quarter of 1997 will be largely for benefit plan purposes. In
1998, Amoco plans to complete the share repurchase program.
The Corporation believes its strong financial position will
permit the financing of business needs and opportunities as they
arise. It is anticipated that ongoing operations will be financed
primarily by internally generated funds. Short-term obligations,
such as commercial paper borrowings, give the Corporation the
flexibility to meet short-term working capital and other
temporary requirements. At September 30, 1997, bank lines of
credit available to support commercial paper borrowings amounted
to $500 million, all of which were supported by commitment fees.
The Corporation also may utilize its favorable access to long-
term debt markets to finance profitable growth opportunities and
other business needs. In early August 1997, Amoco Company issued
$300 million of 10-year, 6.5% guaranteed notes. In October 1997,
Amoco Company issued $200 million of seven-year, 6.25% guaranteed
notes. Amoco has a shelf registration statement covering an
additional $500 million of Amoco Company guaranteed debt.
Capital and exploration expenditures for the first nine months of
1997 totaled $2,752 million. Capital and exploration expenditures
for the first nine months of 1996 amounted to $3,079 million,
excluding $535 million for the purchase of Albemarle
Corporation's alpha-olefins, poly alpha-olefins and synthetic
alcohol businesses.
Proceeds from dispositions of property and other assets for the
first nine months of 1996 included $310 million received from the
sale of Amoco's polystyrene foam products business to Tenneco
Inc.
The Corporation has provided in its accounts for the reasonably
estimable future costs of probable environmental remediation
obligations relating to various oil and gas operations,
refineries, marketing sites and chemical locations, including
multiparty sites at which Amoco and certain of its subsidiaries
have been identified as potentially responsible parties by the
U.S. Environmental Protection Agency. Such estimated costs will
be refined over time as remedial requirements and regulations
become better defined. However, any additional environmental
costs cannot be reasonably estimated at this time due to
uncertainty of timing, the magnitude of contamination, future
technology, regulatory changes and other factors. Although future
costs could have a significant effect on the results of
operations in any one period, they are not expected to be
material in relation to Amoco's liquidity or consolidated
financial position. In total, the accrued liability represents a
reasonable best estimate of Amoco's remediation liability.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995.
Statements in this report that are not historical facts,
including statements under the heading of "Outlook" and other
statements about industry and company growth, estimates of
expenditures and savings, and other trend projections are forward
looking statements. The statements are based on current
expectations and involve risk and uncertainties. Actual future
results or trends may differ materially depending on a variety of
factors. These include specific factors identified in the
discussion accompanying such forward looking statements, industry
product supply and pricing, political stability and economic
growth in relevant areas of the world, Amoco's successful
execution of its internal performance plans, successful
partnering, actions of competitors, natural disasters and other
changes to business conditions.
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PART II--OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the description of the challenge by the
Internal Revenue Service of certain foreign income taxes as
credits against the Corporation's U.S. taxes that otherwise would
have been payable for the years 1980 through 1992 in Part I, Item
3 of Amoco's 1996 Form 10-K.
Eleven proceedings instituted by governmental authorities are
pending or known to be contemplated against Amoco and certain of
its subsidiaries under federal, state or local environmental
laws, each of which could result in monetary sanctions in excess
of $100,000. No individual proceeding is, nor are the proceedings
as a group, expected to have a material adverse effect on Amoco's
liquidity, consolidated financial position or results of
operations. Amoco estimates that in the aggregate the monetary
sanctions reasonably likely to be imposed from these proceedings
amount to approximately $7.3 million.
Amoco has various other suits and claims pending against it among
which are several class actions for substantial monetary damages
which in Amoco's opinion are not meritorious. While it is
impossible to estimate with certainty the ultimate legal and
financial liability in respect to these other suits and claims,
Amoco believes that, while the aggregate amount could be
significant, it will not be material in relation to its liquidity
or its consolidated financial position.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
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Item 5. Other Information
Shown below is summarized financial information for Amoco's
wholly owned subsidiary, Amoco Company.
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
(millions of dollars)
Total revenues(including
excise taxes)............. $8,299 $8,272 $24,199 $23,702
Net income................ $ 468 $ 566 $ 1,570 $ 1,674
Sept. 30, Dec. 31,
1997 1996
(millions of dollars)
Current assets...................... $ 7,992 $ 6,361
Total assets........................ $31,743 $29,208
Current liabilities................. $ 4,853 $ 4,926
Long-term debt-affiliates........... $ 4,733 $ 4,731
-other................ $ 2,936 $ 2,190
Deferred credits and other
non-current liabilities........... $ 4,727 $ 4,524
Minority interest................... $ 421 $ 131
Shareholder's equity................ $13,984 $12,630
Shown below is summarized financial information for Amoco's
wholly owned subsidiary, Amoco Canada.
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
(millions of dollars)
Revenues.................. $1,101 $1,094 $3,508 $3,135
Net income(loss).......... $ 91 $ (18) $ 228 $ 129
Sept. 30, Dec. 31,
1997 1996
(millions of dollars)
Current assets................... $ 1,518 $ 1,615
Total assets..................... $ 4,199 $ 4,412
Current liabilities.............. $ 841 $ 1,110
Non-current liabilities.......... $ 3,205 $ 3,377
Shareholder's equity(deficit).... $ 153 $ (75)
<PAGE>
<PAGE>
Shown below is summarized financial information for Amoco's
indirectly wholly owned subsidiary, Amoco Argentina.
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1996 1997 1996
(millions of dollars)
Revenues.................. $ 74 $ 90 $227 $244
Net income................ $ 22 $ 34 $ 78 $ 90
Sept. 30, Dec. 31,
1997 1996
(millions of dollars)
Current assets .................. $ 50 $251
Total assets..................... $463 $613
Current liabilities.............. $ 88 $ 87
Non-current liabilities.......... $280 $237
Shareholder's equity ............ $ 95 $289
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits
Exhibit
Number
12 Statement Setting Forth Computation of
Ratio of Earnings to Fixed Charges.
27 Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1997.
<PAGE>
<PAGE>
Signature
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.
Amoco Corporation
(Registrant)
Date: November 13, 1997
Judith G. Boynton
Judith G. Boynton
Vice President and Controller
(Duly Authorized and Chief
Accounting Officer)
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 12
AMOCO CORPORATION
______________________
STATEMENT SETTING FORTH COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(millions of dollars, except ratios)
Nine
Months
Ended Year Ended December 31,
Sept. 30,
1997 1996 1995 1994 1993 1992
Determination of Income:
Consolidated earnings
before income taxes
and minority interest $2,737 $3,965 $2,404 $2,491 $2,506 $ 998
Fixed charges expensed
by consolidated
companies............ 328 412 406 316 350 376
Adjustments for certain
companies accounted
for by the equity
method............... 51 69 25 7 11 28
Adjusted earnings plus
fixed charges........ $3,116 $4,446 $2,835 $2,814 $2,867 $1,402
Determination of Fixed Charges:
Consolidated interest
on indebtedness
(including interest
capitalized)......... $ 261 $ 317 $ 317 $ 288 $ 299 $ 333
Consolidated rental
expense representa-
tive of an interest
factor............... 79 107 89 23 50 44
Adjustments for certain
companies accounted
for by the equity
method............... 6 8 6 5 8 20
Total fixed charges.... $ 346 $ 432 $ 412 $ 316 $ 357 $ 397
Ratio of earnings to
fixed charges.......... 9.0 10.3 6.9 8.9 8.0 3.5
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
the Consolidated Statement of Income and the Consolidated Statement of
Financial Position and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000093397
<NAME> AMOCO CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 186
<SECURITIES> 839
<RECEIVABLES> 3794
<ALLOWANCES> 17
<INVENTORY> 1266
<CURRENT-ASSETS> 7037
<PP&E> 51845
<DEPRECIATION> 27931
<TOTAL-ASSETS> 32864
<CURRENT-LIABILITIES> 5901
<BONDS> 4843
0
0
<COMMON> 2584
<OTHER-SE> 13664
<TOTAL-LIABILITY-AND-EQUITY> 32864
<SALES> 23724
<TOTAL-REVENUES> 26600
<CGS> 17210
<TOTAL-COSTS> 17210
<OTHER-EXPENSES> 4825
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 269
<INCOME-PRETAX> 2734
<INCOME-TAX> 803
<INCOME-CONTINUING> 1931
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1931
<EPS-PRIMARY> 3.92
<EPS-DILUTED> 0
<PAGE>
<PAGE>
</TABLE>
