2nd Quarter & Interims-Part 2

BP AMOCO PLC 10 August 1999 Part 2 BP Amoco p.l.c. Group Results 2nd Quarter and Half Year 1999 =========================================================================== Notes 1. New accounting standard: provisions The group has adopted Financial Reporting Standard No. 12 'Provisions, Contingent Liabilities and Contingent Assets' (FRS12) with effect from 1 January 1999. This standard changes the criteria for recognizing provisions for such costs as decommissioning, environmental liabilities and restructuring charges. It also requires provisions for liabilities which may not be settled for a number of years to be discounted to their net present value. The adoption of this standard has been treated as a change in accounting policy. Comparative figures have been restated to reflect this change in accounting policy. The principal effects of the adoption of FRS12 are as follows: (a) Provisions for environmental liabilities are determined on a discounted basis as the effect of the time value of money is material. Previously these liabilities were on an undiscounted basis. (b) Provisions for decommissioning are recognized in full, on a discounted basis, at the commencement of oil and natural gas production. The group's prior practice was to accrue the expected cost of decommissioning oil and natural gas production facilities on a unit-of-production basis over the life of the field. FRS12 also requires the group to capitalize an amount equivalent to the provision as a tangible fixed asset and to amortize this amount over the life of the field on a unit-of-production basis. (c) The unwinding of the discount, which represents a period-by-period cost, is included within interest expense. The adjustments to total replacement cost operating profit for businesses and interest expense are as follows: Second First Second Quarter Quarter Quarter First Half 1998 1999 1999 1999 1998 ======================= ============= $ million $ million 21 21 24 Exploration and Production 45 41 ---------------------- ------------- Total replacement cost 21 21 24 operating profit 45 41 (30) (30) (33) Interest expense (63) (60) ---------------------- ------------ (9) (9) (9) Loss for the period (18) (19) ======================= ============ The adjustments to tangible assets and provisions for liabilities and charges at 31 December 1998 are as follows: $ million Tangible assets 415 Other creditors 62 Other provisions 349 ---- BP Amoco shareholders' interest 826 ==== 2. Turnover Second First Second Quarter Quarter Quarter First Half 1998 1999 1999 1999 1998 ======================= ============== $ million $ million By business 4,481 4,024 4,852 Exploration and Production 8,876 9,077 12,180 10,167 13,988 Refining and Marketing 24,155 24,681 2,532 2,123 2,248 Chemicals 4,371 5,118 Other businesses 52 30 45 and corporate 75 106 ------------------------ -------------- 19,245 16,344 21,133 37,477 38,982 Less: Sales between 1,983 1,702 2,117 businesses 3,819 3,857 ------------------------ -------------- 17,262 14,642 19,016 Group excluding JVs 33,658 35,125 3,707 3,342 3,923 Sales of joint ventures 7,265 7,360 ------------------------ -------------- 20,969 17,984 22,939 40,923 42,485 ======================== ============== By geographical area Group excluding JVs 5,242 4,795 6,397 UK 11,192 11,464 1,513 1,190 1,468 Rest of Europe 2,658 3,064 8,746 6,630 9,043 USA 15,673 17,134 3,625 3,454 4,248 Rest of World 7,702 7,353 ------------------------ -------------- 19,126 16,069 21,156 37,225 39,015 Less: Sales between 1,864 1,427 2,140 areas 3,567 3,890 ------------------------ -------------- 17,262 14,642 19,016 33,658 35,125 ------------------------ -------------- Sales of joint ventures 900 747 836 UK 1,583 1,784 3,436 2,989 3,528 Rest of Europe 6,517 6,748 9 24 27 USA 51 25 63 93 193 Rest of World 286 139 ------------------------ -------------- 4,408 3,853 4,584 8,437 8,696 Less: Sales between 701 511 661 areas 1,172 1,336 ------------------------ -------------- 3,707 3,342 3,923 7,265 7,360 ======================== ============== 3. Operating profits are after charging: Second First Second Quarter Quarter Quarter First Half 1998 1999 1999 1999 1998 ======================= ============= $ million $ million Exploration expense 36 13 7 UK 20 51 14 24 11 Rest of Europe 35 40 54 20 30 USA 50 109 117 115 76 Rest of World 191 241 ----------------------- ------------- 221 172 124 296 441 ======================= ============= Production taxes (i) 7 33 49 UK petroleum revenue tax 82 33 142 109 166 Overseas production taxes 275 306 ----------------------- ------------- 149 142 215 357 339 ======================= ============= (i) Production taxes are charged against Exploration and Production's operating profit and are not included in the charge for taxation in Note 8. 4. Analysis of exceptional items 15 (9) 8 Exploration and Production (1) 79 (7) 44 59 Refining and Marketing 103 (5) - 62 102 Chemicals 164 - 4 - (7) Other businesses and corporate (7) 4 ----------------------- ------------- Profit on sale of fixed assets 12 97 162 and businesses 259 78 - (1,155) (348) Restructuring costs (1,503) - ----------------------- ------------- Exceptional items 12 (1,058) (186) before taxation+ (1,244) 78 - 198 23 Taxation credit (charge) 221 (16) ----------------------- ------------- Exceptional items 12 (860) (163) after taxation (1,023) 62 ======================= ============= +Includes the following amounts for joint ventures and - 39 8 associated undertakings 47 - ----------------------- ------------- 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 stock holding gains and losses. 6. Stock holding gains (losses) Second First Second Quarter Quarter Quarter First Half 1998 1999 1999 1999 1998 ======================= ============= $ million $ million - (11) 1 Exploration and Production (10) (16) (90) 45 531 Refining and Marketing 576 (732) (9) (27) 40 Chemicals 13 (40) ---------------------- -------------- (99) 7 572 579 (788) ====================== ============== Includes the following amounts for joint ventures and (56) 57 129 associated undertakings 186 (193) ----------------------- -------------- 7. Interest expense 263 236 263 Group interest payable 499 504 (41) (15) (11) Capitalized (26) (84) ----------------------- -------------- 222 221 252 473 420 20 16 15 Joint ventures 31 33 17 37 28 Associated undertakings 65 40 Unwinding of discount on 30 30 33 provisions (Note 1) 63 60 ----------------------- -------------- 289 304 328 632 553 ======================= ============== 8. Charge for taxation 146 88 100 UK 188 289 407 (32) 373 Overseas 341 717 ----------------------- ------------- 553 56 473 529 1,006 ======================= ============= Includes the following amounts for joint ventures and 20 24 26 associated undertakings 50 71 ----------------------- ------------- 9. Analysis of changes in net debt Second First Second Quarter Quarter Quarter First Half 1998 1999 1999 1999 1998 ======================= ============== $ million $ million Opening balance 13,932 13,755 14,510 Finance debt 13,755 12,877 544 405 270 Less: Cash 405 355 512 470 305 Current asset investments 470 1,067 ----------------------- -------------- 12,876 12,880 13,935 Opening net debt 12,880 11,455 ----------------------- -------------- Closing balance 14,779 14,510 15,850 Finance debt 15,850 14,779 472 270 467 Less: Cash 467 472 847 305 304 Current asset investments 304 847 ----------------------- -------------- 13,460 13,935 15,079 Closing net debt 15,079 13,460 ----------------------- -------------- (584) (1,055) (1,144) Increase in net debt (2,199) (2,005) ======================= ============== Movement in cash/ (49) (163) 238 bank overdrafts 75 136 Increase(Decrease) in 332 (161) - current asset investments (161) (218) Net cash inflow from financing (840) (728) (1,373) (excluding share capital) (2,101) (1,921) (11) - (7) Other movements (7) (9) ----------------------- -------------- Movement in net debt before (568)(1,052) (1,142) exchange effects (2,194) (2,012) (16) (3) (2) Exchange adjustments (5) 7 ----------------------- -------------- (584)(1,055) (1,144) Increase in net debt (2,199) (2,005) ======================= ============== 10. Consolidated statement of cash flows presented on a US GAAP format Second First Second Quarter Quarter Quarter First Half 1998 1999 1999 1999 1998 ======================= ============= $ million $ million Operating activities 1,003 (165) 1,660 Profit after taxation 1,495 1,662 Adjustments to reconcile profits after tax to net cash provided by operating activities Depreciation and 1,448 1,244 1,152 amounts provided 2,396 2,674 101 84 51 Exploration expense 135 180 Share of (profit) loss of joint ventures and associates 26 (99) (55) less dividend received (154) (80) (Profit) loss on sale of (12) (58) (148) businesses and fixed assets (206) (78) Working capital movement (124) (875) (547) (see analysis below) (1,422) (534) (146) 435 42 Other 477 45 ----------------------- ------------- Net cash provided by 2,296 566 2,155 operating activities 2,721 3,869 ----------------------- ------------- Investing activities (2,173) (1,284) (1,582) Capital expenditures (2,866) (4,398) Acquisitions, net of - - (45) cash acquired (45) (205) Investment in (81) (88) (51) associated undertakings (139) (220) Net investment in 18 (200) (69) joint ventures (269) 28 Proceeds from 252 179 352 disposal of assets 531 657 ----------------------- -------------- Net cash used (1,984) (1,393) (1,395) in investing activities (2,788) (4,138) ----------------------- -------------- 10. Consolidated statement of cash flows presented on a US GAAP format (continued) Second First Second Quarter Quarter Quarter First Half 1998 1999 1999 1999 1998 ======================= ============= $ million $ million Financing activities Proceeds from shares (238) 101 65 issued (repurchased) 166 (508) Proceeds from 1,221 50 1,616 long-term financing 1,666 1,561 Repayments of (681) (793) (558) long-term financing (1,351) (880) Net increase (decrease) 300 1,471 315 in short-term debt 1,786 1,240 Dividends paid (578) (263) (1,934) - BP Amoco shareholders (2,197) (1,177) (39) (65) (31) - Minority shareholders (96) (40) ----------------------- -------------- Net cash used in (15) 501 (527) financing activities (26) 196 ----------------------- -------------- Currency translation differences relating to (22) 25 (40) cash and cash equivalents (15) (19) ----------------------- -------------- (Decrease) increase in cash 275 (301) 193 and cash equivalents (108) (92) ----------------------- -------------- Cash and cash equivalents 971 794 493 at beginning of year 794 1,338 ----------------------- -------------- Cash and cash equivalents 1,246 493 686 at end of period 686 1,246 ----------------------- -------------- Analysis of working capital movement 6 (1) (603) Decrease (increase)in stocks (604) 518 Decrease (increase) 292 (683) (837) in debtors (1,520) 1,276 Increase (decrease) (422) (191) 893 in creditors 702 (2,328) ----------------------- -------------- Total working (124) (875) (547) capital movement (1,422) (534) ======================= ============== 11. Ordinary shares Shares in issue at 30 June 1999 = 9,728.7 million. Average number of shares in issue during January-June 1999 = 9,680.9 million (excluding shares held by the Employee Share Ownership Plans). Each BP Amoco ADS represents six BP Amoco Ordinary Shares. 12. Statutory accounts The financial information shown in this publication is unaudited and does not constitute statutory accounts. The 1998 statutory accounts have been delivered to the UK Registrar of Companies; the report of the auditors on those accounts was unqualified. Contacts London New York Chicago Press Office Roddy Kennedy Ian Fowler Jim Fair (+44) 0171 496 4624 (+1) 212 451 8008 (+1) 312 856 5566 Investor Relations David Peattie Terry LaMore (+44) 0171 496 4717 (+1) 212 451 8034 http://www.bpamoco.com/investors

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