UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(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 29, 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 1-8544

AMERICAN PRESIDENT COMPANIES, LTD.
(Exact name of registrant as specified in its charter)

Delaware 94-2911022
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1111 Broadway
Oakland, CA 94607
(Address of principal executive offices)
Registrant's telephone number: (510) 272-8000
Securities registered pursuant to Section 12(b) of the
Act:

Name of each exchange on
Title of each class which registered
Common Stock, Par New York Stock Exchange
Value $.01 Pacific Stock Exchange
Rights to Purchase Series A New York Stock Exchange
Junior Participating Preferred Stock Pacific Stock Exchange

Securities registered pursuant to Section 12 (g) of the Act:
None
______________
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. ( )

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 ( )
______________
At March 1, 1996 the number of shares of Common Stock outstanding
was 25,696,015. Based solely upon the closing price of the New
York Stock Exchange on such date, the aggregate market value of
Common Stock held by non-affiliates of the registrant was
approximately $533.2 million.

Documents Incorporated by Reference

Portions of registrant's Proxy Statement for its 1996 Annual
Meeting of Stockholders are incorporated by reference into Part
III hereof.
______________

TABLE OF CONTENTS

Page

PART I

Items 1. and 2. BUSINESS AND PROPERTIES 3-13
Item 3. LEGAL PROCEEDINGS 14-15
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 15

PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS 15
Item 6. SELECTED FINANCIAL DATA 15-16
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 17-28
Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA 28-52
Item 9. DISAGREEMENTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE 53

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT 53
Item 11. EXECUTIVE COMPENSATION 54
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 54
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 54

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K 54-61

SIGNATURES 62-63
PART I

ITEMS 1. AND 2. BUSINESS AND PROPERTIES

American President Companies, Ltd. and its subsidiaries (the
"company") provide container transportation and related services
in the Americas, Asia, the Middle East and Europe, through an
intermodal system combining ocean, rail and truck transportation.

The company's international transportation operations are
conducted through American President Lines, Ltd., an ocean common
carrier with operations in the Pacific Basin, Europe and Latin
America. Another operating unit, American Consolidation
Services, Ltd., provides cargo distribution, warehousing and
freight consolidation services. Stevedoring and terminal
operations on the U.S. West Coast are conducted through Eagle
Marine Services, Ltd. American President Business Logistics
Services, Ltd. provides logistical consulting and management
services. The company's North America transportation operations
are conducted through APL Land Transport Services, Inc., which
provides intermodal transportation, freight brokerage and over-
the-road truck transportation. The company was engaged in real
estate operations through Natomas Real Estate Company until 1994,
when its remaining real estate holdings were sold.

TRANSPORTATION

International

The company provides ocean-going containerized cargo
transportation services primarily in the trans-Pacific market, as
well as in the intra-Asia, Asia-Europe and Asia-Latin America
markets. The company offers six scheduled trans-Pacific services
per week between key ports in Asia and four U.S. ports and one
Canadian port.

The company provides scheduled service between over 60 ports
in the Pacific and Indian Oceans and in the Arabian Gulf. In the
intra-Asia market, the company provides service between over 400
Asian cities and commercial centers. The companyOs trans-Pacific
services are provided between Asia and over 3,300 cities in North
America via eight West Coast ports and three East Coast ports.
In addition, service is provided between Asia and Europe to over
2,500 cities in Europe which are served through five northern
European ports. Also, in the market between Asia and the
Caribbean, Latin America, Central and South America, over 50
ports and cities are served. The company's ocean transportation
business maintains 333 offices and agencies located in 13
countries in North and South America, 26 countries in Asia and
the Middle East, 13 countries in Europe, two countries in Africa,
and in Australia.

Since 1991, the company and Orient Overseas Container Line
("OOCL") have been parties to agreements enabling them to
exchange vessel space and coordinate vessel sailings through
2005. These agreements permit both companies to offer faster
transit times and more frequent sailings between key markets in
Asia and the U.S. West Coast, and to share terminals and several
feeder operations within Asia. In September 1994, the company,
Mitsui OSK Lines, Ltd. ("MOL"), and OOCL signed an agreement to
exchange vessel space, coordinate vessel sailings and cooperate
in the use of port terminals and equipment for ocean
transportation services in the Asia-U.S. West Coast trade through
2005. The carriers commenced service under this agreement in
January 1996. The agreement between the company and OOCL is
suspended so long as the agreement between the company, OOCL and
MOL is in effect.

The three carriers and Nedlloyd Lines B.V. ("NLL") are also
parties to a separate agreement to exchange vessel space,
coordinate vessel sailings and cooperate in the use of port
terminals and equipment in an all-water service in the Asia-Latin
America trade for a minimum of three years. The four carriers
initiated service under this agreement in March 1995.

Additionally, the four carriers and Malaysian International
Shipping Corporation BHD ("MISC") have an agreement to exchange
vessel space, coordinate vessel sailings and cooperate in the use
of port terminals and equipment for ocean transportation services
in the Asia-Europe trade through 2001, with early termination
rights upon six months notice to the other parties beginning
January 1, 1998. The carriers commenced service under the
agreement in January 1996. The company entered the Asia-Europe
trade in March 1995 by chartering vessel space through MOL.

The Asia-U.S. West Coast, Asia-Latin America and Asia-Europe
alliance agreements are all currently scheduled to be fully
operational by the end of the first quarter of 1996.

In 1994, the company and Transportacion Maritima Mexicana
("TMM"), a Mexican transportation company, entered into an
agreement enabling them to reciprocally charter vessel space for
a period of three years between major Asian ports and certain
ports on the Pacific Coast of the U.S. and Mexico. This
agreement was terminated in September 1995, and the company and
TMM have entered into a memorandum of understanding with respect
to negotiation of a new three-year agreement for reciprocal
charters of lesser amounts of vessel space beginning in March or
April 1996 and a possible joint service. However, no assurances
can be given as to whether those negotiations will be successful.
The company and TMM have agreed to continue to exchange vessel
space pending finalization of a new agreement.

In October 1995, the company and Matson Navigation Company,
Inc. ("Matson") signed an agreement for a 10-year alliance, which
commenced in February 1996. Pursuant to the terms of this
alliance, the company sold Matson six of its ships (three C9-
class vessels and three C8-class vessels) and certain of its
assets in Guam for approximately $163 million in cash. One of
the ships was sold in December 1995, and the remaining five
vessels were sold in January 1996. Four of these vessels,
together with a fifth Matson vessel, are being used in the
alliance. Matson is operating the vessels in the alliance, which
serves the U.S. West Coast, Hawaii, Guam, Korea and Japan, and
has the use of substantially all the westbound capacity. The
company has the use of substantially all the vessels' eastbound
capacity.

The following tables show the company's line haul capacity
provided to and available from alliance partners (OOCL, MOL,
Nedlloyd, MISC, TMM and Matson) under the company's alliance
agreements for 1995 and as estimated for 1996, in thousands of
twenty-foot equivalent units ("TEUs"):

Capacity provided by the company
to the alliances: 1995 1996(1)(2)
Trans-Pacific
Eastbound 472.7 615.1
Westbound 345.1 371.6

Capacity available to the company
from the alliances: 1995 1996(1)(2)
Trans-Pacific
Eastbound 491.4 521.8
Westbound 352.8 311.0

Asia-Europe
Eastbound 21.4 42.8
Westbound 30.4 53.5

Asia-Latin America
Eastbound 16.1 27.9
Westbound 9.5 19.8

(1)Capacity for 1996 is based upon the current schedule for
delivery and deployment of newly constructed vessels and
implementation of the alliances and assumes currently
allocated vessel space which is subject to adjustment.

(2)Excludes TMM, pending finalization of a new agreement.

Under the alliance agreements, alliance partners contribute
and are allocated vessel space, which may be adjusted from time
to time. The agreements provide for, among other things,
settlement of the difference between the value of vessel space
provided by each partner and the value of vessel space available
to that partner, at specified vessel costs per TEU per day. The
value of vessel space provided by the company to the alliances is
less than the value of the total capacity allocated to it through
the alliances, resulting in an annual net cash payment from the
company to its alliance partners. The amount paid to alliance
partners was $45 million in 1995, and currently is estimated to
be $32 million in 1996. Agreements covering terminal and
equipment sharing among the alliance partners have not been
finalized, and the commitment of the alliance partners, including
the company, for these services cannot be determined at this
time.

International container transportation operations are
seasonal and subject to economic cycles and the growth of local
economies in the markets served, fluctuations in the relative
values of the U.S. dollar and various foreign currencies and
resulting changes in demand for transportation of import and
export products. The second and third quarters of each year
generally have been the company's strongest in terms of volume,
primarily due to the export of seasonal refrigerated goods from
the U.S. in both of these quarters and increased imports of
consumer goods to the U.S. in the third quarter for the Christmas
buying season.

The following table sets forth the amount and source of the
company's ocean shipping revenues for the past five years, in
millions of dollars.

1995 1994 1993 1992 1991
U.S. Import (1) $ 843 $ 896 $ 880 $ 829 $ 775
U.S. Export (1) 560 494 498 500 498
Intra-Asia (2) 369 352 329 296 280
Asia-Europe 49
Desert Storm 103
Total $1,821 $1,742 $1,707 $1,625 $1,656

(1) Includes Asia-Latin America revenues in 1995.
(2) Includes Desert Storm revenues in 1991, which were not
segregated from normal operations in this market.

The company transports imports into North America that
include higher value goods such as clothing, electronics,
automotive and manufacturing components and other consumer items.
Generally, higher value cargo is transported at higher rates due
to its value, time sensitivity or need for specialized services.

U.S. export cargoes transported by the company include
refrigerated goods, military shipments and lower value, semi-
processed and raw materials, as well as auto parts, oil field
supplies and other higher value finished products.

In the intra-Asia market, the industrialized economies
import food, raw materials and semi-processed goods from
developing Asian nations and export auto parts, electronics and
other technological and capital-intensive finished products.

The Asia-Europe trade is similar in cargo mix to the trades
between North America and Asia. Shipments from Asia to Northern
Europe include higher value goods such as electronic goods.
Trade from Europe to Asia includes many lower value, semi-
processed and raw materials, as well as carpet and floor
coverings and chemicals.

Exports from Asia to Latin America and the Caribbean include
consumer products, auto parts, motorcycles and other high value
goods. Cargoes moving from Latin America to Asia include raw
materials such as coffee and cocoa, resins, chemicals, and
processed goods including foods and beverages.

The single largest customer of the company's international
transportation operations is the U.S. government, which ships
military and other cargo and accounted for approximately 2%, 3%
and 3% of consolidated revenues in 1995, 1994 and 1993,
respectively. Historically, the company has bid competitively
for contracts to transport military and other cargo for the U.S.
government. In recent years, the U.S. military has been closing
bases and reducing the number of U.S. military personnel
overseas. The extent to which future U.S. military base closures
and rollback of personnel may impact shipments of U.S. military
cargo by the company cannot be estimated.

In 1991, the company transported military cargo related to
Operation Desert Storm. Export shipments of Desert Storm cargo
began in the fourth quarter of 1990 and continued through the
first quarter of 1991 during the build-up of U.S. military
equipment and supplies. The company also returned military
equipment from this region to the U.S. during the second and
third quarters of 1991. In addition to military freight
revenues, the company collected detention charges from the U.S.
government for containers transported for Operation Desert Storm
and held beyond an allowed time, which contributed $10 million,
$6 million and $41 million to operating income in 1994, 1993 and
1992, respectively. All detention claims were settled during
1994.

The following table shows the company's total international
transportation volumes in forty-foot equivalent units ("FEU") for
the past five years:

Year Volumes
1995 570,000
1994 558,000
1993 543,000
1992 501,000
1991 513,000

The company is a participant in freight conferences, which
are groups of carriers that may jointly establish common tariffs
and common rate levels in certain markets. Conferences in trades
from and to the U.S. are exempt from U.S. anti-trust laws under
the Shipping Act of 1984 (the "Shipping Act"). Conferences have
historically been effective in establishing and maintaining a
stable rate environment for their members. Recently, however,
carriers which are members of freight conferences, including the
company, have been losing market share to carriers which are not
members of the conferences. The company's share of the trans-
Pacific market was approximately 8%, 9% and 11% in 1995, 1994 and
1993, respectively. Non-conference carriers have been increasing
their capacity, improving their services and charging rates for
transporting cargo at increasingly lower levels than conference
carriers. In the fourth quarter of 1995, independent pricing
actions which reduced shipping rates were taken by conference
carriers, including the company, as a means to recapture market
share in the U.S. import market. These actions have resulted in
rate instability in this market. The company is unable to
predict the extent to which this rate instability will continue
or its magnitude; however, such instability could have a material
adverse impact on carriers in the U.S. import market, including
the company.

Since 1989, the company and 13 other shipping companies,
representing approximately 83% of total trans-Pacific U.S. import
capacity, have been parties to the Trans-Pacific Stabilization
Agreement. Among other things, the agreement limits import
capacity of participating companies by amounts mutually
determined from time to time in an attempt to improve the balance
of supply and demand in the U.S. import market. The agreement
may be terminated upon the unanimous written consent of the
companies. The company's ability to be a party to this agreement
is based upon the Shipping Act.

During 1995, legislation was introduced in the U.S. House of
Representatives that would have substantially modified the
Shipping Act, which, in its present form, among other things,
provides the company with certain immunity from anti-trust laws
and requires the company and other carriers in the U.S. foreign
commerce to file tariffs. Changes proposed in the legislation as
originally drafted, if enacted, would have eliminated government
tariff filing and enforcement, allowed confidential and
independent contracts between shippers and ocean carriers and
strengthened provisions that prohibit predatory activities by
foreign carriers. While the legislation was not enacted, it
would not have affected the anti-trust immunity provided by the
Shipping Act.

The company is unable to predict whether this or other
proposed legislation will be introduced in 1996 or enacted or
whether, if enacted, it will contain terms similar to those
originally proposed. Depending on its terms, enactment of such
legislation modifying the Shipping Act could have a material
adverse impact on the competitive environment in which the
company operates and on the company's results of operations.

The following table shows the company's utilization of its
containership capacity during the past five years, which for 1991
includes the effects of shipments related to Operation Desert
Storm:

1995 1994 1993 1992 1991
U.S. Import 80% 89% 89% 89% 93%
U.S. Export 93% 94% 92% 90% 95%

The company provides cargo distribution and warehousing
services in the U.S. and freight consolidation services in Asia,
the Middle East, Europe, Mexico and Africa through its
subsidiary, American Consolidation Services, Ltd. ("ACS"). ACS
also provides freight deconsolidation services in several U.S.
locations and acts as a non-vessel operating common carrier in
the intra-Asia market and from Asia to Europe and Australia.
Freight consolidators combine various shipments from multiple
vendors into a single container load for delivery to a single
destination. The company also serves shippers of less-than-
containerload cargoes by combining their shipments with others
bound for the same or proximate geographic locations.

The company has port terminal facilities in Oakland and Los
Angeles, California, Seattle, Washington and Dutch Harbor, Alaska
and major inland terminal facilities at Chicago, Illinois,
Atlanta, Georgia and South Kearny, New Jersey. Each port
terminal facility is operated under a long-term use agreement
providing for preferential, although non-exclusive, use of the
facility by the company. The company also operates major port
terminal facilities in Asia under long-term lease agreements in
Kobe and Yokohama, Japan and Kaohsiung, Taiwan.

The company incurred incremental operating expenses and a
loss of ocean freight revenues during the first half of 1995
resulting from the earthquake in Kobe, Japan, in January 1995, in
which the ocean terminal leased by the company was extensively
damaged. The company expects substantially all of these expenses
and lost revenues to be recovered through its business
interruption insurance and is in the process of finalizing its
claim. Management has recorded its best estimate of the
recovery. The company and OOCL have resumed service to Kobe and
have adjusted their shared trans-Pacific schedule to and from
Japan.

In 1993, the company entered into a contract with the Port
of Los Angeles to lease a new 226-acre terminal facility for 30
years. Occupancy of the new facility is scheduled for 1997 upon
completion of construction. Additionally, in 1994, the company
and the Port of Seattle signed a lease amendment for the
improvement and expansion of its existing terminal facility.
Under the amended lease, the facility will be expanded from 83
acres to approximately 160 acres. The expansion is expected to
be completed during 1997, and the lease term will be 30 years
from completion. In addition, the company has the option to
expand the terminal by an additional 30 acres.

In March 1995, the company and a Philippine terminal
developer and operator entered into a letter of intent with an
agency of the Republic of Pakistan regarding the possible
construction and operation of a container terminal at the Port of
Karachi. The parties are negotiating the terms for the
implementation of the project. In January 1996, the company,
together with a major U.S. engineering and construction firm and
MOL and NLL, entered into a memorandum of understanding with an
agency of the Republic of Indonesia to cooperate in exploring the
feasibility of developing an international container terminal to
be located in Kabil, Batam Island, Indonesia, for operations by
the company and its partners under a long-term concession. The
company is unable to predict whether negotiations on the Port of
Karachi project will be successful or such project will be
completed, or whether the proposed Batam project is feasible or
will be completed.

In addition to performing stevedoring and terminal services
for the company's own operations, Eagle Marine Services, Ltd., a
subsidiary of the company, provides these services to third
parties at the company's U.S. port facilities.

On December 29, 1995, the company operated 19 U.S.-flag
containerships and five foreign-flag containerships. Of the U.S.-
flag containerships, six were chartered under operating lease
agreements and the remainder were owned by the company. In
addition, the company owned three U.S.-flag vessels that were
chartered to another carrier. The following table sets forth the
vessels deployed by the company in its trans-Pacific and intra-
Asia services at December 29, 1995:

Maximum
Type of Number of Date Placed Capacity Service Speed
Vessel Vessels in Service (in TEUs)
(in knots)
C-11 5 1995 4,800 24.6
C-10 5 1988 4,300 24.0
C-9* 3 1982-1983 2,900 23.5
L-9 4 1987 2,800 21.0
J-9 2 1984 2,700 22.5
C-8* 4 1979 & 1986 2,000 22.0
Pacesetter 1 1973 1,400 23.5

* In December 1995, one C-8 was sold to Matson and chartered
back through the end of 1995. In January 1996, the three C-9s
and two C-8s were sold to Matson.

The company has the authority from the United States
Maritime Administration ("MarAd") to operate up to 28 foreign-
flag-feeder vessels in its intra-Asia service. At December 29,
1995, the company operated 21 such vessels, which are leased by
it for terms of up to three years.

The company took delivery of and made final payments on five
C11-class vessels in 1995 and one C11-class vessel in 1996, built
pursuant to construction contracts with Howaldtswerke-Deutsche
Werft AG, of Germany and Daewoo Shipbuilding and Heavy Machinery,
Ltd. of Korea. The total cost of the six C11-class vessels was
$529 million, including total payments to the shipyards of $503
million, of which $62 million was paid in January 1996.

OOCL has placed orders to purchase six vessels similar in
size and speed to the company's C11-class vessels. Four of
OOCLOs vessels have been delivered, and the final two vessels are
scheduled to be delivered in March 1996. The company and OOCL
have agreed to operate six and five of their C11-class vessels,
respectively, under their Asia-U.S. West Coast alliance agreement
with MOL. The deployment of the 11 new C11-class vessels by the
company and OOCL, replacing 14 older vessels, will increase the
combined trans-Pacific capacity of the company and OOCL by
approximately 15%. The company currently expects growth in
demand in the trans-Pacific market in the foreseeable future but
believes that, because a number of other competing ocean carriers
are also constructing significant numbers of new vessels, growth
in capacity in that market will be significantly greater than
growth in demand. No assurances can be given with respect to
anticipated growth in demand, utilization of the company's
increased capacity or the potential negative impact of the
increased capacity on rates or the company's market share. Such
growth and utilization will depend upon demand for U.S. import
and U.S. export cargo in this market, economic conditions in the
U.S. and other Pacific Basin countries, the effects of
implementation of the company's alliances, and whether and when
additional new vessels are delivered to competing carriers, among
other factors. Additionally, modification of the Shipping Act,
which is under consideration as referred to above, could have a
material adverse impact on the company's rates and volumes.

In September 1995, the company sold its construction
contract for three K10-class vessels, which it had entered into
in 1993, and recognized a pre-tax gain of $1.6 million. In
conjunction with the sale, the company, MOL, OOCL and NLL formed
a joint venture company, in which their respective shares are
each 25%, and agreed to charter back these vessels, when
delivered, for seven years for use in the Asia-Europe trade.
Prior to the sale of the construction contract, the company made
progress payments of $30 million for these vessels, including
payments of $12 million in 1995, for which it received
reimbursement.

At December 29, 1995, the company operated 129,200 dry
containers consisting of 20-, 40-, 45-, 48-, and 53-foot
containers, 43,700 of which were owned and 85,500 leased under
operating lease agreements. At that date, the company also
operated 8,900 refrigerated containers, 3,700 of which were owned
and 5,200 leased under operating leases. In addition, the
company operated 54,500 chassis for the carriage of containers,
35,100 of which were owned and 19,400 leased under capital and
operating leases.

North America

The company provides intermodal transportation and freight
brokerage services to North American and international shippers,
as well as time-critical cargo transportation and just-in-time
delivery (principally to the automotive manufacturing industry).
These services are provided through an integrated system of
contracted rail and truck transportation, the primary element of
which is a train system utilizing double-stack rail cars.

The company's double-stack train system principally serves
the North American long-haul truck and piggyback rail freight
markets, and the international (export-import) intermodal market,
through more than 30 U.S., Canadian and Mexican inland terminal
facilities. The company has agreements with certain railroads
under which those railroads serve as the company's rail carriers,
providing locomotive power, rail cars, trackage, terminal
services and labor to transport the company's containers on
individual double-stack rail cars and on dedicated unit trains.

The following table shows the company's total North America
stacktrain volumes (in FEUs):
Year Volumes
1995 599,000
1994 594,000
1993 538,000
1992 508,000
1991 509,000

A stacktrain comprises up to 28 double-stack rail cars and
has a capacity of up to 280 FEUs. At December 29, 1995, the
company controlled 390 such rail cars, 220 of which were owned
and 170 of which were leased. In addition, as part of agreements
with certain railroads, the company utilizes additional rail cars
owned or leased and operated by the railroads. The company
controlled 930 and 1,100 double-stack rail cars in 1994 and 1993,
respectively. The significant reduction in the number of rail
cars under direct company control in 1995 was made pursuant to
the companyOs agreement with the railroads.

Information Systems

The company manages its fleet of containers and chassis
using its computer systems and specialized software, linked
through a telecommunications network with the company's ships and
offices. The company's cargo and container management system
processes cargo bookings, generates bills of lading, expedites
U.S. customs clearance and facilitates the management of rail
cars, containers and other equipment. The company has also
developed computer systems designed to optimize the loading of
containers onto ships and to facilitate the planning of ship,
rail and truck moves. The company's communications system
permits its customers to access information regarding the
location and status of their cargo via touch-tone telephone,
personal computer or computer-facsimile link.

Real Estate

In 1994, the company sold its remaining 86 acres of land.

COMPETITION AND REGULATION

International Transportation

The company is a U.S.-flag and foreign-flag carrier. It
faces vigorous competition, principally on the basis of price and
service, on all of its trade routes from approximately 19 major
U.S.-flag and foreign-flag operators, some of which are owned by
foreign governments. Foreign-flag competitors generally have
cost and operating advantages over U.S.-flag carriers. The
timing of increases in capacity in the ocean transportation
industry can result in imbalances in industry-wide supply and
demand, which causes volatility in rates.

The carriage of U.S. military cargo is reserved for U.S.-
flag shipping companies, and this trade is also subject to
vigorous competition among such carriers. The carriage of this
cargo is awarded in accordance with competitive bidding
procedures under which the low bidder wins the right to carry a
substantial portion of such cargo for a period of up to 12
months. The process by which military cargo is awarded to
shippers is in the process of being revised. Under a new proposed
program, the company would share equally in military cargo
volumes with one competitor. No assurances can be given that
this program will become effective.

In July 1995, legislation was introduced in the U.S. House
of Representatives that would substantially modify the Shipping
Act, which, among other things, provides the company with certain
immunity from antitrust laws and requires the company and other
carriers in U.S. foreign commerce to file tariffs. The
legislation, which was not enacted in 1995, would have been
phased in during 1997 and 1998 and would have eliminated
government tariff filing and enforcement, allowed confidential
and independent contracts between shippers and ocean carriers and
strengthened provisions that prohibit predatory activities by
foreign carriers. The company is unable to predict whether this
or other proposed legislation will be introduced in 1996 or
enacted or, whether, if enacted, it will contain terms similar to
those proposed. Enactment of legislation modifying the Shipping
Act, depending upon its terms, could have a material adverse
impact on the competitive environment in which the company
operates and on the company's results of operations.

A substantial portion of the company's transportation
operations is subject to regulation by agencies of the U.S.
government that have jurisdiction over shipping practices,
maintenance and safety standards and other matters. The
company's wholly-owned subsidiary, American President Lines, Ltd.
("APL") and MarAd are parties to a 20-year Operating-Differential
Subsidy Agreement ("ODS Agreement") expiring December 31, 1997.
This agreement provides for payments by the U.S. government to
partially compensate APL for the greater expense of operating
vessels under U.S. rather than foreign registry. Under APL's ODS
Agreement, APL must be controlled by U.S. citizens and its
vessels must be registered and built in the U.S. (except as noted
below) and manned by U.S. crews. Under its ODS Agreement, APL
also is required, among other things, to operate vessels on
designated trade routes in the foreign commerce of the U.S. and
to replace the capacity of its existing vessels as they reach the
end of their statutory lives (generally 25 years) if construction
differential subsidy, provided by the U.S. government, is made
available. This subsidy has not been made available since 1981.
In addition, APL is required to serve such trade routes within
designated minimum and maximum numbers of annual sailings, and,
except for over-age vessels, APL may not, without prior
government approval, remove any of its vessels from operation
under its ODS agreement.

Since 1981, Congress has twice passed legislation permitting
U.S.-flag carriers to acquire a limited number of foreign-built
vessels and thereafter to operate such vessels under existing
subsidy agreements under U.S. flag. Under such laws, APL had
five C10-class vessels constructed in Germany which are currently
operated under this legislation.

In June 1993, MarAd awarded APL contracts to manage 12 Ready
Reserve Force vessels for a period of five years. APL receives a
per diem fee based upon the operating status of each vessel.

In June 1992, the Bush Administration announced that no new
ODS agreements would be entered into and existing ODS agreements
would be allowed to expire. The Clinton Administration and
Congress have been reviewing U.S. maritime policy. Proposed
maritime support legislation introduced in 1994, referred to as
the Maritime Security Program, was not enacted. The
Administration's proposal included a 10-year subsidy program with
up to $100 million in annual payments to be requested and
appropriated on a year-to-year basis. Congress has appropriated
$46 million for fiscal 1996, or $2.3 million per vessel. This
compares with subsidy of approximately $3.1 million per vessel
under ODS. Maritime support legislation incorporating the
Administration's program has recently passed the U.S. House of
Representatives and is currently awaiting consideration before
the U.S. Senate, but has not yet been approved. The company is
not able to predict whether or when maritime support legislation
will be enacted or what terms such legislation may have, if
enacted.

While the company continues to encourage efforts to enact
maritime support legislation, prospects for passage of a program
acceptable to the company are unclear. Accordingly, in July
1993, the company filed applications with MarAd to operate under
foreign flag its six C11-class containerships, delivered to the
company in 1995 and January 1996, and to transfer to foreign flag
seven additional U.S.-flag containerships in its trans-Pacific
fleet. In 1994, MarAd issued a waiver to allow the company to
operate its six C11-class vessels under foreign registry on the
condition that the vessels be returned to U.S.-flag in the event
acceptable maritime reform legislation is enacted. The remaining
application is still pending and no assurances can be given as to
whether, or when, the authority will be granted.

Management of the company believes that, in the absence of
ODS or an equivalent government support program, it will be
generally no longer commercially viable to own or operate
containerships in foreign trade under the U.S. flag because of
the higher labor costs and the more restrictive design,
maintenance and operating standards applicable to U.S.-flag liner
vessels. The company continues to evaluate its strategic
alternatives in light of the pending expiration of its ODS
agreement and the uncertainties as to whether an acceptable new
U.S. government maritime support program will be enacted, whether
sufficient labor efficiencies can be achieved through the
collective bargaining process, and whether the company's
remaining application to flag its vessels under foreign registry
will be approved. While no assurances can be given, management
of the company believes that it will be able to structure its
operations to enable it to continue to operate on a competitive
basis without direct U.S. government support.

In January 1995, the company and Columbia Shipmanagement
Ltd., a Cyprus company ("Columbia"), entered into an agreement
under which Columbia has agreed to provide crewing, maintenance,
operations and insurance for the company's six C11-class vessels
for a per diem fee per vessel. The agreement may be terminated
at any time by either party with notice.

North America Transportation

The company's stacktrain operations compete with eight trans-
Pacific containership companies and three West Coast railroads
offering double-stack train service. In addition, the company's
stacktrain operations, together with its contracted trucking
services, compete with long-haul trucking companies for truckload
shipments. The company's brokerage operations compete for
available business with over 150 shippers' agents. Competition
among shippers' agents is based principally on the types and
timeliness of services provided.

EMPLOYEES

At December 29, 1995, the company and its subsidiaries
employed 464 seagoing and 4,710 shoreside personnel. The
seagoing personnel and 274 of the shoreside personnel were
employed under collective bargaining agreements with several
unions. Certain of the company's collective bargaining
agreements covering seagoing and shoreside unions in the U.S.
expire in June and July 1996. The company currently expects that
new agreements will be negotiated with the respective unions
prior to the expiration of the current contracts, although no
assurances can be given to that effect. Failure to reach
agreement with a union on an acceptable labor contract could
result in a strike or other labor difficulties, which could have
a material adverse effect on the company's operating results.

ITEM 3. LEGAL PROCEEDINGS

The company is a party to various pending legal proceedings,
claims and assessments arising in the course of its business
activities, including actions relating to trade practices,
personal injury or property damage, alleged breaches of
contracts, torts, labor matters, employment practices, tax
matters and miscellaneous other matters. Some of these
proceedings involve claims for punitive damages, in addition to
other specific relief.

Among these actions are approximately 2,290 cases pending
against the company, together with numerous other ship owners and
equipment manufacturers, involving injuries or illnesses
allegedly caused by exposure to asbestos or other toxic
substances on ships.

The company insures its potential liability for bodily
injury to seamen through mutual insurance associations. Industry-
wide resolution of asbestos-related claims and resolutions of
claims against bankrupt shipping companies at higher than
expected amounts could result in additional contributions to
those associations by the company and other association members.

In December 1989, the government of Guam filed a complaint
with the Federal Maritime Commission ("FMC") alleging that
American President Lines, Ltd. and an unrelated company charged
excessive rates for carrying cargo between the U.S. and Guam, in
violation of the Shipping Act and the Intercoastal Shipping Act
of 1933, and seeking an undetermined amount of reparations.
Three private shippers are also complainants in this proceeding.
Evidentiary hearings have been concluded and an initial decision
by the FMC administrative law judge is expected in June 1996.

In April 1994, a lawsuit, Hockert Pressman & Flohr Money
Purchase Plan, et. al. vs. American President Companies, Ltd.,
et. al., was filed against the company and certain of its
officers in United States District Court for the Northern
District of California. The suit alleged that the company and
certain officers made false and misleading statements about the
company's operating and financial performance in violation of
federal securities laws, and sought unspecified damages on behalf
of a purported class of stockholders who purchased shares of the
company's common stock during the period October 7, 1993 through
March 30, 1994. The action was voluntarily dismissed without
prejudice to the purported class and without payment of
consideration, and the dismissal was approved by the Court on
November 22, 1995.

In October 1991, the California Department of Motor Vehicles
(the "DMV") assessed the company approximately $4.2 million in
additional chassis registration fees. The company was required
to pay the assessment and, in 1993, filed a mandamus action, as
well as a suit for refund. The company prevailed in the mandamus
action, but was denied a summary judgment motion in the refund
action. The parties appealed both decisions to the California
Court of Appeals. In October 1995, the California Court of
Appeals ordered the DMV to repay $4.2 million plus interest to
the company, and payment has been received.

In 1995, lawsuits were filed against the company and the
U.S. Department of Transportation by certain of the company's
unions and union members challenging MarAd's November 15, 1994
action granting the company the waiver allowing it to operate the
C11-class vessels under foreign flag. On June 29, 1995, the U.S.
District Court granted summary judgment in favor of MarAd and the
company, which the unions have appealed. While no assurances can
be given, management believes the unions' appeal will not be
successful.

Based upon information presently available, and in light of
legal and other defenses and insurance coverage and other
potential sources of payment available to the company, management
does not expect the legal proceedings described, individually or
in the aggregate, to have a material adverse impact on the
company's consolidated financial position or operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the company's security
holders during the fourth quarter of 1995.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

The company's Common Stock is listed on the New York and
Pacific Stock Exchanges using the symbol APS. The reported high
and low closing sales prices per share of the company's Common
Stock and cash dividends declared for the preceding eight fiscal
quarters are set forth in Note 13 to the consolidated financial
statements, Part II, Item 8, on page 51 and are incorporated
herein by reference.

On March 1, 1996, the company had 3,409 common stockholders
of record.

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial data for the ten years
ending December 29, 1995 are derived from the consolidated
financial statements of the company, which have been examined and
reported upon by the company's independent public accountants as
set forth in their report included elsewhere herein. This
information should be read in conjunction with the Consolidated
Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations.

TEN-YEAR FINANCIAL REVIEW

(Dollars in millions, except per share amounts) 1995 1994 1993 1992 1991
Results of Operations (1)
Revenues
Transportation

International $2,133 $2,017 $1,930 $1,878 $1,791
North America 763 761 660 632 645
Real Estate 16 16 6 17
Total Revenues 2,896 2,794 2,606 2,516 2,453
Operating Income (Loss)
Transportation 68 114 123 137 131
Real Estate 9 10 3 12
Total Operating Income (Loss) 68 123 133 140 143
Income (Loss) Before Taxes 53 110 131 122 107
Income (Loss) Before Cumulative Effect
of Accounting Changes 30 74 80 78 66
Net Income (Loss) 30 74 80 56 56
Earnings (Loss) Per Common Share, Fully Diluted Before
Cumulative Effect of Accounting Changes (2) 0.99 2.30 2.50 2.34 1.85
Earnings (Loss) Per Common Share,
Fully Diluted (2) 0.99 2.30 2.50 1.69 1.56
Cash Dividends Per Common Share (2) 0.40 0.40 0.30 0.30 0.30
Financial Position
Cash, Cash Equivalents
& Short-Term Investments $ 136 $ 255 $ 84 $ 132 $179
Working Capital 65 206 51 (16) 159
Total Assets 1,879 1,664 1,454 1,436 1,541
Net Capital Expenditures 456 128 156 66 20
Long-Term Debt 686 373 250 222 251
Capital Lease Obligations 1 13 17 20 193
Redeemable Preferred Stock 75 75 75 75
Stockholders' Equity 469 541 475 397 426
Capital 1,168 1,007 822 829 955
Book Value Per Common Share (2) 18.28 19.82 17.72 15.25 14.48
Financial Ratios
Return on Equity (3) 5.6% 12.7% 15.7% 11.6% 10.7%
Cash Flow to Average Total Debt (4) 30.1% 53.3% 53.7% 43.4% 44.0%
Return on Average Assets 1.7% 4.8% 5.5% 3.8% 3.5%
Total Debt to Equity (3) 149.0% 63.4% 49.4% 75.5% 90.4%
Total Debt to Capital (3) 59.8% 38.8% 33.0% 43.0% 47.5%
Current Ratio 1.1 1.5 1.1 1.0 1.5

TEN-YEAR FINANCIAL REVIEW

(Dollars in millions, except per share amounts) 1990 1989 1988 1987 1986
Results of Operations (1)
Revenues
Transportation

International $1,590 $1,579 $1,436 $1,271 $ 945
North America 669 637 650 540 469
Real Estate 15 21 45 14 26
Total Revenues 2,274 2,237 2,131 1,825 1,440
Operating Income (Loss)
Transportation (64) 51 129 162 50
Real Estate 8 9 33 7 13
Total Operating Income (Loss) (56) 60 162 169 63
Income (Loss) Before Taxes (93) 22 136 149 41
Income (Loss) Before Cumulative Effect
of Accounting Changes (62) 13 81 79 18
Net Income (Loss) (62) (16) 81 79 18
Earnings (Loss) Per Common Share, Fully Diluted Before
Cumulative Effect of Accounting Changes (2) (1.78) 0.16 1.63 1.62 0.35
Earnings (Loss) Per Common Share,
Fully Diluted (2) (1.78) (0.57) 1.63 1.62 0.35
Cash Dividends Per Common Share (2) 0.30 0.29 0.25 0.25 0.25
Financial Position
Cash, Cash Equivalents
& Short-Term Investments $ 118 $ 127 $ 186 $ 287 $276
Working Capital 112 128 178 261 237
Total Assets 1,608 1,683 1,711 1,599 1,343
Net Capital Expenditures 39 111 379 155 75
Long-Term Debt 279 303 317 138 151
Capital Lease Obligations 202 208 224 234 244
Redeemable Preferred Stock 75 75 75
Stockholders' Equity 459 567 617 705 641
Capital 1,022 1,169 1,254 1,089 1,049
Book Value Per Common Share (2) 12.44 14.18 15.26 14.44 12.98
Financial Ratios
Return on Equity (3) (10.5%) (2.4%) 11.6% 11.8% 3.0%
Cash Flow to Average Total Debt (4) 21.0% 20.3% 38.6% 50.9% 36.0%
Return on Average Assets (3.7%) (1.0%) 4.9% 5.4% 1.5%
Total Debt to Equity (3) 91.3% 82.2% 81.2% 54.5% 63.8%
Total Debt to Capital (3) 47.7% 45.1% 44.8% 35.3% 38.9%
Current Ratio 1.3 1.4 1.6 2.0 2.0

(1) The company's fiscal year ends on the last Friday
in December. All years presented above were 52 weeks,
except for 1993 and 1988 which were 53-week years.
(2)Earnings Per Common Share, Cash Dividends Per Common
Share and Book Value Per Common Share have been
computed for all periods retroactively reflecting the
effect of a 3-for-2 stock split effected on May 30,
1985, and a 2-for-1 stock split effected on December
31, 1993. Earnings Per Common Share also reflect the
1995 conversion of the Redeemable Preferred Stock into
4.0 million shares of Common Stock and the repurchase
of 6.0 million, 3.7 million, 7.8 million, 2.9 million,
1.0 million and 8.8 million shares of the company's
common stock during 1995, 1992, 1991, 1990, 1989 and
1988, respectively, on a post-split basis. In 1989,
2.0 million shares of the company's Series B Preferred
Stock were converted into common stock.
(3)Redeemable Preferred Stock, which was converted into
Common Stock in 1995, is included in Equity for the
purpose of calculating these ratios.
(4)Cash Flow represents Cash Flows from Operating
Activities.

ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

(In millions) 1995 Change 1994 Change 1993
Revenues
International Transportation $ 2,133 6% $ 2,017 4% $ 1,930
North America Transportation 763 0% 761 15% 660
Real Estate (100%) 16 1% 16
Operating Income $ 68 (44%) $ 123 (7%) $ 133
Pretax Income $ 53 (52%) $ 110 (15%) $ 131

In 1995, the company recorded a pretax restructuring charge
of $48 million related to the accelerated completion of its
reengineering program and other organizational changes.
Operating income for 1995 was $105 million, excluding the
restructuring charge, $6 million in gains from vessel sales and
$5 million in liquidated damages from delayed vessel deliveries.
This compares with operating income of $98 million in 1994,
excluding $10 million related to the collection of Desert Storm
detention charges, $9 million in gains from the sale of the
company's remaining real estate holdings and $6 million in gains
from crane and container sales. In 1993, operating income was
$107 million, excluding $6 million of Desert Storm detention
collections, $11 million in gains from real estate sales and $9
million in gains from the sales of vessels and containers.

In 1995, the company's earnings were impacted by a decline
in volumes in the company's U.S. import market, which resulted
from continuing competitive pressure and a significant reduction
in demand for U.S. imports compared with 1994. This decline was
offset by growth in volumes in the companyOs U.S. export market
and an improvement in average revenue per forty-foot equivalent
unit ("FEU") in the company's U.S. import, U.S. export and intra-
Asia markets, and lower land transportation costs per FEU in 1995
compared with 1994.

In 1994, the company benefited from improvements in its
North America stacktrain volumes and increased volumes of the
company's U.S. import and intra-Asia cargo, all as compared with
1993. Additionally, the company's 1993 income and volumes were
positively impacted by the 1993 fiscal year having 53 weeks,
compared with 52 weeks in 1994 and 1995. These improvements were
partially offset by higher transportation operating expenses per
FEU in 1994 compared with 1993, primarily due to higher
stevedoring and fuel costs and an unfavorable currency exchange
rate in Japan.

INTERNATIONAL TRANSPORTATION (1) 1995 Change 1994 Change 1993
(Volumes in thousands of FEUs)
Import
Volumes 200.8 (8%) 217.8 2% 214.3
Average Revenue per FEU $4,198 2% $4,112 0% $4,107
Export
Volumes 169.2 9% 155.5 0% 155.5
Average Revenue per FEU $3,310 4% $3,174(1%) $3,200
Intra-Asia
Volumes 179.7 (3%) 184.6 6% 173.3
Average Revenue per FEU $2,054 8% $1,909 1% $1,899
Asia-Europe
Volumes 19.9
Average Revenue per FEU $2,467
(1) Volumes and average revenue per FEU data are based upon
shipments originating during the period, which differs from
the percentage-of-completion method used for financial
reporting purposes.

The company's U.S. import volumes declined in 1995 compared
with last year due to increased competitive pressure from non-
conference carriers and lower demand in this market. Volumes of
the company's U.S. export cargo increased in 1995 compared with
1994, primarily due to increased shipments of commercial dry and
refrigerated cargo. Partially offsetting the increase in U.S.
export volume was a 33% decrease in the company's military
volumes in this market. The company carried approximately 75% of
the military cargo in the Pacific from January to June 1994, and
approximately 25% for the remainder of 1994 and throughout 1995.
The overall amount of military cargo has declined in recent
years, which has also contributed to the decline in military
cargo volumes carried by the company. The company's intra-Asia
volumes declined in 1995 compared with 1994 because of fewer
shipments to and from Kobe, Japan as a result of the earthquake
in January 1995, poor cotton harvests in India and Pakistan, and
efforts by the company to reduce its shipments of lower-margin
cargo in this market. Volumes of refrigerated cargo carried by
the company in its intra-Asia market increased, which partially
offset the decline in commercial dry cargo.

Asia-Europe service by the company began in March 1995 with
shipments to Denmark, the United Kingdom and the Netherlands
primarily from Hong Kong, the People's Republic of China and
Taiwan. Shipments from the Netherlands, Belgium and Germany to
Asia began in April 1995.

The company's U.S. import volumes increased in 1994 compared
with 1993 primarily due to service enhancements in the People's
Republic of China that resulted in higher volumes from that
country, and higher volumes of refrigerated and military cargo.
Volumes of U.S. export cargo were unchanged in 1994 from 1993.
Volumes of refrigerated cargo in the company's U.S. export market
improved, but were offset by a decline in military dry volumes.
Intra-Asia volumes in 1994 increased compared with 1993 as a
result of the company's expanded service to and from China and
the growing economies in Southeast and West Asia and the Middle
East. Additionally, volumes of refrigerated cargo in this market
grew substantially from 1993 to 1994.

Utilization of the company's containership capacity in 1995
was 80% and 93% for import and export shipments, respectively,
compared with 89% and 94% in 1994, and 89% and 92% in 1993.
Changes in utilization rates in 1995 as compared to 1994 are
related to changes in volumes carried by the company in these
markets due to competitive and market factors. Import capacity
was increased in 1994 by additional vessel space purchased by the
company from Orient Overseas Container Line ("OOCL"), a Hong Kong
shipping company.

Average revenue per FEU for the company's U.S. import
shipments increased in 1995 compared with 1994 primarily due to a
general rate increase established by conference carriers that
became effective May 1, 1995, and currency adjustments in Japan
and Singapore. In late 1995, the company initiated pricing
actions for specific commodities in specific trade lanes in
response to competitive conditions and loss of market share in
its U.S. import market. Subsequently, competitors and the
company have lowered rates, and considerable rate instability in
the U.S. import market continues to exist. The company cannot
predict whether additional pricing actions may be taken by the
company or its competitors. Destabilization of rates, if
extensive, could have a material adverse impact on carriers,
including the company.

Average revenue per FEU in the company's U.S. export market
increased in 1995 from last year due to rate increases and an
increase in the proportion of higher-rated refrigerated cargo
carried by the company. Average revenue per FEU in the company's
intra-Asia market increased in 1995 compared with 1994,
attributable to a general rate increase and an increase in the
proportion of higher-rated refrigerated cargo carried by the
company.

Average revenue per FEU for the company's U.S. import
shipments was relatively unchanged in 1994 compared with 1993,
reflecting competitive pressures. In 1994, average revenue per
FEU in the company's U.S. export market was lower than 1993 due
to reduced rates in the first half of the year resulting from
weak market conditions and increased competition. Average
revenue per FEU in the company's intra-Asia market increased
slightly in 1994 compared with 1993, primarily attributable to an
increase in higher-rated refrigerated cargo, partially offset by
competitive rate pressures in this market.

Other international transportation revenues, which include
cargo handling, freight consolidation, logistics services and
charter hire revenues, totaled $319 million, $281 million and
$254 million in 1995, 1994 and 1993, respectively. Included in
the amounts for 1994 and 1993 were collections of Desert Storm
detention charges of $10 million and $6 million, respectively.
The increase in other transportation revenues in 1995 compared
with 1994 resulted from increased cargo handling revenues in Asia
and increased charter hire revenues. In addition, freight
consolidation and logistics services revenues increased due to
higher volumes. The increase in other international
transportation revenues in 1994 compared with 1993 was primarily
due to increases in Asia cargo handling related to the OOCL and
Transportacion Maritima Mexicana ("TMM") alliance agreements and
an increase in feeder services in Asia provided to other
carriers.

In October 1995, Lykes Steamship Company, Inc. ("Lykes")
filed a petition seeking protection from its creditors under
Chapter 11 of the U.S. Bankruptcy laws. At present, the company
charters its four L9-class vessels from Lykes under charters that
expire in early 1996. The L9-class vessels are used in the
company's West Asia/Middle East service. In addition, the
company charters to Lykes three of its Pacesetter vessels under
charters that also expire in early 1996. The potential
consequences of Lykes' petition on the company's operations and
financial condition, and possible steps the company may take to
mitigate any resulting adverse effects, are being evaluated by
management. The company is currently unable to predict the
extent of such consequences.

Since 1991, the company and OOCL have been parties to
agreements enabling them to exchange vessel space and coordinate
vessel sailings through 2005. These agreements permit both
companies to offer faster transit times and more frequent
sailings between key markets in Asia and the U.S. West Coast, and
to share terminals and several feeder operations within Asia. In
September 1994, the company, Mitsui OSK Lines, Ltd. ("MOL"), and
OOCL signed an agreement to exchange vessel space, coordinate
vessel sailings and cooperate in the use of port terminals and
equipment for ocean transportation services in the Asia-U.S. West
Coast trade through 2005. The carriers commenced service under
this agreement in January 1996. The agreement between the
company and OOCL is suspended so long as the agreement between
the company, OOCL and MOL is in effect.

Additionally, the four carriers and Malaysian International
Shipping Corporation BHD have an agreement to exchange vessel
space, coordinate vessel sailings and cooperate in the use of
port terminals and equipment for ocean transportation services in
the Asia-Europe trade through 2001, with early termination rights
upon six months notice to the other parties beginning January 1,
1998. The carriers commenced service under the agreement in
January 1996. The company entered the Asia-Europe trade in March
1995 by chartering vessel space through MOL.

Under the alliance agreements, alliance partners contribute
and are allocated vessel space, which may be adjusted from time
to time. The agreements provide for, among other things,
settlement of the difference between the value of vessel space
provided by each partner and the value of vessel space available
to that partner, at specified vessel costs per TEU per day. The
value of vessel space provided by the company to the alliances is
less than the value of the total capacity allocated to it through
the alliances, resulting in an annual net cash payment from the
company to its alliance partners. The amount paid to alliance
partners was $45 million in 1995, and is currently estimated to
be $32 million in 1996. Agreements covering terminal and
equipment sharing among the alliance partners have not been
finalized, and the commitment of the alliance partners, including
the company, for these services cannot be determined at this
time.

In 1994, the company and TMM entered into an agreement
enabling them to reciprocally charter vessel space for a period
of three years between major Asian ports and certain ports on the
Pacific Coast of the U.S. and Mexico. This agreement was
terminated in September 1995, and the company and TMM have
entered into a memorandum of understanding with respect to the
negotiation of a new three-year agreement for reciprocal charters
of lesser amounts of vessel space beginning in March or April
1996 and a possible joint service. However, no assurances can be
given as to whether those negotiations will be successful. The
company and TMM have agreed to continue to exchange vessel space
pending finalization of a new agreement.

In October 1995, the company and Matson Navigation Company,
Inc. ("Matson") signed an agreement for a 10-year alliance, which
commenced in February 1996. Pursuant to the terms of this
alliance, the company sold Matson six of its ships (three C9-
class vessels and three C8-class vessels) and certain of its
assets in Guam for approximately $163 million in cash. One of
the ships was sold in December 1995 and resulted in a gain of $2
million. The remaining five vessels were sold in January 1996.
Four of these vessels, together with a fifth Matson vessel, are
being used in the alliance. The net gain on the sale of the four
vessels used in the alliance and the assets in Guam, after
deducting costs associated with the agreement, is estimated to be
$6 million, and will be deferred and amortized over the 10-year
term of the alliance. Matson is operating the vessels in the
alliance, which serves the U.S. West Coast, Hawaii, Guam, Korea
and Japan, and has the use of substantially all the westbound
capacity. The company has the use of substantially all the
vessels' eastbound capacity. The gain on the sale of the fifth
vessel was $2 million.

The company is party to an Operating-Differential Subsidy
("ODS") agreement with the U.S. government, expiring on December
31, 1997, which provides for payment by the U.S. government to
partially compensate the company for the relatively greater
expense of vessel operation under U.S. registry. ODS payments to
the company were approximately $62 million, $61

million and $65 million in 1995, 1994 and 1993, respectively.
The company expects ODS payments in 1996 to be between $30
million and $35 million as a result of its sale of six vessels to
Matson.

In June 1992, the Bush Administration announced that no new
ODS agreements would be entered into and existing ODS agreements
would be allowed to expire. The Clinton Administration and
Congress have been reviewing U.S. maritime policy. Proposed
maritime support legislation introduced in 1994, referred to as
the Maritime Security Program, was not enacted. The
Administration's proposal included a 10-year subsidy program with
up to $100 million in annual payments to be requested and
appropriated on a year-to-year basis. Congress has appropriated
$46 million in fiscal 1996, or $2.3 million per vessel. This
compares with subsidy of approximately $3.1 million per vessel
under ODS. Maritime support legislation incorporating the
Administration's program has recently passed the U.S. House of
Representatives and is currently awaiting consideration before
the U.S. Senate, but has not yet been approved. The company is
not able to predict whether or when maritime support legislation
will be enacted or what terms such legislation may have, if
enacted.

While the company continues to encourage efforts to enact
maritime support legislation, prospects for passage of a program
acceptable to the company are unclear. Accordingly, in July
1993, the company filed applications with the United States
Maritime Administration ("MarAd") to operate under foreign flag
its six C11-class containerships, delivered to the company in
1995 and January 1996, and to transfer to foreign flag seven
additional U.S.-flag containerships in its trans-Pacific fleet.
In 1994, MarAd issued a waiver to allow the company to operate
its six C11-class vessels under foreign registry on the condition
that the vessels be returned to U.S.-flag in the event acceptable
maritime reform legislation is enacted. The remaining
application is still pending and no assurances can be given as to
whether, or when, the authority will be granted.

The company currently expects challenging conditions for the
company and the shipping industry in 1996. Whether these
conditions materialize, and the severity of the challenge the
company faces, depends upon developments such as, but not limited
to, the timing and extent of industry deregulation, the changes
in market growth rates, the amount and timing of the anticipated
significant increase in industry capacity, the extent of rate
cutting in its markets and successful implementation of the
company's alliances.

NORTH AMERICA TRANSPORTATION (1)
(Volumes in
thousands of FEUs) 1995 Change 1994 Change 1993
Revenues (2) (In millions)
Stacktrain $ 525 0% $ 523 15% $ 455
Non-Stacktrain 238 0% 238 16% 205
Stacktrain Volumes
North America 413.2 4% 398.5 15% 345.6
International 186.2 (5%) 195.5 2% 192.6
Stacktrain Average
Revenue per FEU (2) $1,271 (3%) $1,313 (0%) $1,315
(1)Volumes and revenue per FEU data are based upon shipments
originating during the period, which differs from the
percentage-of-completion method used for financial reporting
purposes.
(2)In addition to third party business, which is referred to
above as North America Volumes, the transportation of
containers for the company's international customers is a
significant component of its stacktrain operations. These
shipments are referred to above as International Stacktrain
Volumes and, since they are eliminated in consolidation, are
excluded from Revenues and Stacktrain Average Revenue per
FEU.

North America transportation revenues were relatively
unchanged in 1995 compared with 1994, primarily as a result of
higher stacktrain volumes from increased automotive shipments
between the U.S. and Mexico, offset by a decline in stacktrain
average revenue per FEU due primarily to lower rates as a result
of increased competition. The company's North America non-
stacktrain revenues were unchanged in 1995 compared with last
year, primarily due to an increase in automotive volumes and
rates from lanes added to this market since 1994, offset by lower
volumes in the company's other non-stacktrain markets as a result
of increased competition from trucking companies and the loss of
several major customers.

Revenues from the company's North America transportation
operations increased in 1994, compared with 1993, as a result of
higher North America stacktrain volumes. The increase in
stacktrain volumes in 1994 was due to the improvement in the U.S.
economy, increases in Mexican and Canadian shipments,
particularly automotive shipments between the U.S. and Mexico,
and competitor equipment shortages. The company added 1,800
containers to its fleet during 1994, which enabled it to meet
increasing demand. The company's North America non-stacktrain
revenues also improved in 1994 compared with 1993, primarily due
to increased volumes resulting from an improved U.S. economy.

In June 1995, the company and Burlington Motor Carriers,
Inc. ("BMC") signed an agreement whereby the company's U.S.
trucking operations, including related employees and leased
equipment and facilities, were transferred to BMC in
consideration of the sublease by BMC (and, in certain instances,
a third party) of such equipment and facilities. In connection
with the transfer, the company entered into a service agreement
with BMC, expiring in December 1997, whereby BMC agreed to
provide trucking services to the company and the company agreed
to provide certain minimum cargo volumes to BMC through October
1, 1997. The transaction did not have a material effect on the
company's other operations or operating results. In December
1995, Burlington Motor Holdings, Inc., the parent company of BMC,
filed a petition seeking protection from its

creditors under Chapter 11 of the U.S. Bankruptcy laws. The
company currently cannot assess the impact of this filing, if
any, on its operations, but does not expect the impact to be
material.

In 1996, the company expects modest growth in demand in the
North America stacktrain market. Demand for automotive shipments
is expected to remain strong but is dependent upon conditions in
the U.S. and Mexican economies and the extent to which U.S.
automakers continue to operate in Mexico, among other factors.
No assurances can be given that growth in these markets will
materialize.

TRANSPORTATION OPERATING EXPENSES
(In millions, except
Operating Cost per FEU) 1995 Change 1994 Change 1993
Land Transportation $1,010 0% $1,010 8% $ 934
Cargo Handling 602 9% 552 7% 516
Vessel, Net 390 16% 335 9% 308
Transportation Equipment 214 6% 202 9% 184
Information Systems 49 1% 48 (2%) 49
Other 325 (2%) 332 10% 303
Total $2,590 4% $2,479 8% $2,294
Operating Cost Per FEU (1) $2,635 2 $2,592 0% $2,581
Percentage of Transportation Revenues 89% 89% 89%
(1)Operating expenses used in this calculation include costs
associated with certain International and North America
revenues that are not volume related.

Land transportation expenses were unchanged in 1995 from
1994. North America conventional rail expenses declined in 1995,
due to the company's lower volumes in these markets. This
decline was offset by higher third party intermodal, rail and
truck costs in the company's international business. Cargo
handling expenses increased in 1995 compared with 1994 due to
higher stevedoring labor rates in Asia, increased cargo handling
volumes in Asia, and the start-up of the Europe and Latin America
services in 1995. In 1995, cargo handling expenses were also
impacted by the weakness of the U.S. dollar relative to the
Japanese yen in the first half of the year. Vessel expenses
increased in 1995 compared with last year primarily due to
increased charter hire costs in the Asia-Latin America and Asia-
Europe markets, in which the company purchases vessel space
through alliance partners. Additionally, vessel fuel costs
increased in 1995 compared with 1994 due to the five C11-class
vessels placed in service during 1995 and an increase in the
average fuel price per barrel from $13.75 in 1994 to $15.63 in
1995. Transportation equipment costs increased in 1995 compared
with 1994 due to increased container leasing and repair and
maintenance costs. The increase in information systems costs for
1995 compared with 1994 was due to increased telecommunications
costs. Other operating expenses are net of $6 million of gains
from sales of vessels and $5 million in liquidated damages from
delayed vessel deliveries in 1995, and gains of $6 million from
sales of a crane and certain containers in 1994. Partially
offsetting these gains in 1995, was a 23% increase in agency fees
incurred by the company from 1994, primarily as a result of the
company's entrance into the Asia-Europe market.

Land transportation expenses increased in 1994 from 1993,
due to higher North America stacktrain volumes in 1994. The
increase in cargo handling expenses in 1994 compared with 1993 is
attributable to increased stevedoring costs, which were impacted
by higher labor rates in Asia and the U.S. and handling of
increased cargo to and from China, West Asia and Southeast Asia.
The weakening of the U.S. dollar relative to Asian currencies,
particularly the Japanese yen, also resulted in higher cargo
handling expenses in 1994. These increases were partially offset
by a favorable land rent reduction in Taiwan. Vessel expenses
increased in 1994 compared with 1993 due to increased

charter hire activity resulting from expanded service to China,
an increase in Latin American activity and additional vessel
space purchased from OOCL and TMM in 1994. Vessel expenses were
also impacted by a 6% increase in fuel cost in 1994 and the
collision of one of the company's vessels during 1994, the self-
insured portion of the cost of which was approximately $2
million. Transportation equipment costs increased in 1994
compared with 1993 due to the addition of 1,800 leased containers
during 1994 for use in North America stacktrain operations, and
increased repair and maintenance costs. Other operating expenses
increased in 1994 compared with 1993 due to an increase of $9
million in the provision for potentially uncollectible accounts
receivable, primarily in the People's Republic of China. Also
contributing to the increase in other operating expenses were
higher employee and telecommunications costs, particularly in
Asia. Other operating expenses for 1994 are net of gains of $6
million from sales of a crane and certain containers, and for
1993, are net of gains of $9 million from sales of three vessels
and certain containers.

Certain of the company's collective bargaining agreements
covering seagoing and shoreside unions in the U.S. expire in June
and July 1996. The company currently expects that new agreements
will be negotiated with the respective unions prior to the
expiration of the current contracts, although no assurances can
be given to that effect. Failure to reach agreement with a union
on an acceptable labor contract could result in a strike or other
labor difficulties, which could have a material adverse effect on
the company's operating results.

General and administrative expenses decreased 1% in 1995
compared with 1994. The decrease was due primarily to lower
spending on corporate initiatives to improve the company's
processes in 1995 compared with 1994. Expenditures for corporate
initiatives were approximately $25 million for 1995 and $31
million for 1994. The decline in initiative spending in 1995
compared with 1994 was partially offset by higher employee
relocation expenses and ongoing support costs related to new
financial systems. General and administrative expenses increased
21% in 1994 compared with 1993, primarily due to expenditures of
$31 million in 1994 on corporate initiatives.

During the fourth quarter of 1995, the company recorded a
pretax restructuring charge of $48 million for the accelerated
completion of its reegineering program and other organizational
changes. The charge includes $36 million in costs associated
with the elimination of approximately 950 positions in company
operations which are being reorganized or reduced in size. The
remainder of the charge represents costs associated with office
closures and projects that were eliminated as a result of the
acceleration of the reengineering program. The company estimates
that it will realize savings in operating expenses of
approximately $48 million in 1996 as a result of its reegineering
program and organizational changes. The company also expects
significant incremental savings in future years and anticipates
that the savings it realizes will offset the total costs of the
reengineering program and organizational changes of $58 million
by mid-1997. Whether and to what extent the company realizes
such savings in 1996 and beyond, and the timing of such savings,
will depend upon the actual timing of position eliminations and
office closures, among other factors. No assurances can be given
as to the timing or amount of these savings or as to whether they
will be realized in 1996 or thereafter.

Depreciation and amortization expense increased 6% in 1995
compared with 1994 primarily as a result of the delivery of five
of the six C11-class vessels during the year, and other capital
spending. Depreciation and amortization expense decreased 3% in
1994 from 1993 as certain assets reached the end of their
depreciable lives in 1994.

Net interest expense increased to $15 million in 1995 from
$13 million in 1994, primarily due to interest expense on the
debt related to the C11-class vessels purchased during 1995,
which was partially offset by higher interest income resulting
from higher interest rates in 1995. Net interest expense
increased to $13 million in 1994 from $11 million in 1993, due to
interest expense on two public debt offerings totaling $300
million in November 1993 and January 1994, which was partially
offset by increased interest income on higher cash balances and
higher interest rates in 1994.

The effective tax rates applicable to the company were 43%,
33% and 39% in 1995, 1994 and 1993, respectively. The 1995
effective tax rate includes the increased effect of nondeductible
items on lower income. The 1994 effective tax rate includes the
effect of revisions of prior years' estimated tax liabilities.
The 1993 effective tax rate includes an adjustment of $2.7
million to reflect the effect of an increase in the maximum
corporate federal income tax rate to 35%. The effective tax rate
for 1996 is expected to be approximately 38%, depending upon the
level of actual earnings and changes, if any, in the tax laws,
among other factors.

LIQUIDITY AND CAPITAL RESOURCES

(In millions) 1995 1994 1993
Cash, Cash Equivalents and
Short-term Investments $ 136 $ 255 $ 84
Working Capital 65 206 51
Total Assets 1,879 1,664 1,454
Long-term Debt and Capital
Lease Obligations (1) 699 391 272
Cash Provided by Operations 164 177 169
Net Capital Expenditures
Ships $ 392 $ 38 $ 93
Containers, Chassis and Rail Cars 23 57 41
Leasehold Improvements and Other 41 33 22
Total $ 456 $ 128 $ 156
Financing Activities
Borrowings $ 340 $ 147 $ 664
Repayment of Debt and Capital Leases (32) (28) (748)
Common Stock Repurchases (170)
Dividend Payments (14) (18) (15)
(1) Includes current and long-term portions.

To finance a portion of the purchase of the five vessels
delivered in 1995, the company borrowed approximately $340
million in the form of vessel mortgage notes under a loan
agreement with European banks. The company borrowed $62 million
under this agreement to finance a portion of the vessel delivered
in January 1996. During 1995, the company entered into three
interest rate swap agreements to exchange the variable interest
rates on certain vessel mortgage notes for fixed rates for
periods of 10 and 12 years.

In September 1995, the company sold its construction
contract for three K10-class vessels, which it had entered into
in 1993, and recognized a pretax gain of $1.6 million. In
conjunction with the sale, the company, MOL, OOCL and NLL formed
a joint venture company, in which their respective shares are
each 25%, and agreed to charter back these vessels, when
delivered, for seven years for use in the Asia-Europe trade.
Prior to the sale of the construction contract, the company made
progress payments of $30 million for these vessels, including
payments of $12 million in 1995, for which it received
reimbursement.

In addition to vessel expenditures of $392 million, the
company made capital expenditures in 1995 of $64 million
primarily for purchases of chassis, containers and terminal and
leasehold improvements. In 1994, in addition to vessel progress
payments of $31 million, the company's capital expenditures
totaled $97 million and were primarily for purchases of chassis
and terminal and leasehold improvements. In 1993, the company
made $70 million in progress payments on the C11s and K10s.
Additionally, the company purchased the remaining two vessels
previously leased under leveraged leases and retired the related
debt guaranteed by MarAd, eliminating MarAd's restrictions on the
payment of dividends to the company by its wholly-owned
subsidiary, American President Lines, Ltd. The purchase price of
these vessels was $131 million, $110 million of which retired the
related capital lease obligations.

Capital expenditures in 1996 are expected to be
approximately $235 million, including $62 million related to the
final payment for the last C11-class vessel which was delivered
in January 1996. The balance will be spent primarily on terminal
equipment in North America and Asia, terminal improvements in
North America and chassis and computer systems. The company has
outstanding purchase commitments to acquire cranes, facilities,
equipment and services totaling $72.9 million.

In July 1995, the company issued a notice of redemption for
all $75 million of its 9% Series C Cumulative Convertible
Preferred Stock ("Series C Preferred Stock"). At the election of
the holders, the 1.5 million shares of Series C Preferred Stock
were converted into approximately 4 million shares of common
stock.

Also in July 1995, the Board of Directors authorized the
repurchase of up to 6 million shares of the company's common
stock. In August 1995, the company repurchased 2 million shares
from the former holders of the Series C Preferred Stock at a
purchase price of $27 per share. In addition, in September 1995,
the company repurchased 2.8 million shares through a Dutch
Auction self-tender offer at a purchase price of $30 per share,
plus expenses. The company repurchased an additional 1.2 million
shares of its common stock through open market transactions at an
average price of $25.81 per share, plus expenses, which completed
the repurchase of the 6 million shares authorized. All
repurchased shares were retired.

In November 1993, the company issued $150 million of 10-year
Senior Notes and, in January 1994, issued $150 million of 30-year
Senior Debentures. A portion of the proceeds from the issuance
of this debt was used to repay $72 million of bank borrowings
from 1993, and the remainder was used to finance vessel
purchases, other capital expenditures and for general corporate
purposes. Also, in January 1993, the company retired $95 million
of 11% Notes.

The company has a credit agreement with a group of banks
which provides for an aggregate commitment of $200 million
through March 1999. As an alternative to borrowing under its
credit agreement, the company has an option under that agreement
to sell up to $150 million of certain of its accounts receivable
to the banks.

The company believes its existing resources, cash flows from
operations and borrowing capacity under its existing credit
facilities will be adequate to meet its liquidity needs for the
foreseeable future.

Certain Factors That May Affect Operating Results

Statements prefaced with "expects", "anticipates",
"estimates", "believes" and similar words are forward looking
statements based on the company's current expectations as to
prospective events, circumstances and conditions over which it
may have little or no control and as to which it can give no
assurances. All forward looking statements, by their nature,
involve risks and uncertainties that could cause actual results
to differ materially from those projected.

The severity of the challenging conditions expected for the
company and the shipping industry generally, and the impact of
those conditions on the company's operating results, will depend
on factors such as the timing and extent of an anticipated
slowing of market growth in certain markets served by the
company, the amount and timing of an anticipated significant
increase in industry capacity due to new vessel deliveries to
competing carriers, rate cutting in some market segments due to
this additional capacity and other factors, successful
implementation and continuation of the company's alliances, which
comprise a significant factor in the company's long-term strategy
to remain competitive, and the pace and degree of industry
deregulation, including whether an acceptable maritime support
program and proposed amendments to the Shipping Act of 1984 are
enacted.

Demand in the trans-Pacific market is dependent on factors
such as the quantity of available import and export cargo in this
market and economic conditions in the U.S. and other Pacific
Basin countries. The magnitude of the impact on the company of
any growth or contraction in the trans-Pacific market will depend
on whether and when new vessels ordered by competing carriers are
delivered and where they are ultimately deployed and further
vessel orders, if any, by competing carriers. Because a number
of competing ocean carriers have placed orders for the
construction of a significant number of new vessels, growth in
capacity in the trans-Pacific market is expected to be
significantly greater than growth in demand.

Growth in demand in the North America stacktrain market and
demand for automotive shipments will depend on conditions in the
U.S. and Mexican economies, including the relative values of the
U.S. Dollar and the Mexican Peso, and the extent to which U.S.
automakers continue to operate in Mexico, among other factors.

Savings in operating expenses, if any, in connection with
the company's reengineering program and organizational changes
will depend on the ultimate future effectiveness and results of
those efforts. There can be no assurance that the company will
be able to realize these savings, and changes in the timing of
any anticipated savings by the company, or the failure to realize
some or all of these savings, could materially and adversely
affect the company's operating results.

Other risks and uncertainties include the degree and rate of
market growth or contraction in other markets served by the
company and the company's ability to respond in mitigation of any
contraction or to take advantage of such growth, changes in the
cost of fuel, the status of labor relations, the amplitude of
recurring seasonal business fluctuations and the continuation and
effectiveness of the Trans-Pacific Stabilization Agreement and
the various shipping conferences to which the company belongs.
The inability of the company to negotiate acceptable labor
agreements could result in work stoppages, strikes or other labor
difficulties or in higher labor costs, which could have a
material adverse affect on the company's operating results. The
company has in the past experienced such difficulties and there
can be no assurance that any such difficulties will not occur in
the future.

Also, the company is subject to inherent risks of conducting
business internationally, including unexpected changes in, or
imposition of, legislative or regulatory requirements,
fluctuations in the relative values of the U.S. Dollar and the
various foreign currencies with which the company is paid and
funds its local operations, tariffs and other trade barriers and
restrictions affecting its customers, potentially longer payment
cycles, potentially greater difficulty in accounts receivable
collection, potentially adverse taxes and the burden of complying
with a variety of foreign laws. In addition, in connection with
its international operations, the company is subject to general
geopolitical risks, such as political and economic instability
and changes in diplomatic and trade relationships affecting it or
its customers.

The company expressly disclaims any obligation or
undertaking to update any forward looking statements contained
herein in the event of any change in the company's expectations
with regard thereto or with regard to current or prospective
conditions or circumstances on which any such statement is based.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

INDEX TO FINANCIAL STATEMENTS

Report of Management 29
Report of Independent Public Accountants 30
Consolidated Financial Statements
Statement of Income 31
Balance Sheet 32
Statement of Cash Flows 33
Statement of Changes in Stockholders' Equity 34
Notes to Consolidated Financial Statements 35-51
Financial Statement Schedule
Schedule II 52

REPORT OF MANAGEMENT

To the Stockholders of American President Companies, Ltd.:

The financial statements have been prepared by the company,
and we are responsible for their content. They are prepared in
accordance with generally accepted accounting principles, and in
this regard we have undertaken to make informed judgments and
estimates, where necessary, of the expected effect of future
events and transactions. The other financial information in the
annual report is consistent with that in the consolidated
financial statements.

The company maintains and depends upon a system of internal
controls designed to provide reasonable assurance that our assets
are safeguarded, that transactions are executed in accordance
with management's intent and the law, and that the accounting
records fairly and accurately reflect the transactions of the
company. The company has an internal audit program which reviews
the adequacy of the internal controls and compliance with them.

The company engaged Arthur Andersen LLP as independent
public accountants to provide an objective, independent audit of
our financial statements.

There is an Audit Committee of the Board of Directors which
is composed solely of outside directors. The committee meets
whenever necessary to monitor and review with management, the
internal auditors and the independent public accountants, the
company's financial statements and accounting controls. Both the
independent public accountants and the internal auditors have
access to the Audit Committee, without management being present,
to discuss internal controls, auditing and financial reporting
matters.

To help assure that its affairs are properly conducted,
management has established policies regarding standards of
corporate behavior. The company regularly reminds its key
employees of significant policies and requires them to confirm
their compliance.

/s/ Timothy J. Rhein
Timothy J. Rhein
President and Chief Executive Officer

/s/ L. Dale Crandall
L. Dale Crandall
Executive Vice President and
Chief Financial Officer

/s/ William J. Stuebgen
William J. Stuebgen
Vice President, Controller and
Chief Accounting Officer

Oakland, California
February 9, 1996

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of American President Companies, Ltd.:

We have audited the accompanying consolidated balance sheet
of American President Companies, Ltd. (a Delaware corporation)
and subsidiaries as of December 29, 1995 and December 30, 1994,
and the related consolidated statements of income, cash flows and
changes in stockholders' equity for each of the three years in
the period ended December 29, 1995. These consolidated financial
statements and the schedule referred to below are the
responsibility of the company's management. Our responsibility
is to express an opinion on these consolidated financial
statements and the schedule based on our audits.

We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of American President Companies, Ltd. and subsidiaries as of
December 29, 1995 and December 30, 1994, and the results of their
operations and their cash flows for each of the three years in
the period ended December 29, 1995, in conformity with generally
accepted accounting principles.

Our audit was made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The schedule
listed in the index to financial statements is presented for
purposes of complying with the Securities and Exchange
Commission's rules and is not a required part of the basic
financial statements. This information has been subjected to the
auditing procedures applied in our audit of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.

/s/ Arthur Andersen LLP
Arthur Andersen LLP

San Francisco, California
February 9, 1996

American President Companies, Ltd.

CONSOLIDATED STATEMENT OF INCOME
Year Ended December 29 December 30 December 31
(In thousands, except 1995 1994 1993
per share amounts)
Revenues $2,895,982 $2,793,468 $2,606,220
Expenses
Operating, Net of Operating-
Differential Subsidy 2,589,924 2,486,360 2,299,872
General and Administrative 76,895 77,686 64,281
Depreciation and Amortization 112,418 106,274 109,127
Restructuring Charge 48,372
Total Expenses 2,827,609 2,670,320 2,473,280
Operating Income 68,373 123,148 132,940

Interest Income 23,098 16,150 6,290
Interest Expense (38,318) (28,994) (17,663)
Gain on Sale of Investment 8,934
Income Before Taxes 53,153 110,304 130,501
Federal, State and Foreign
Tax Expense 22,856 36,106 50,392
Net Income $ 30,297 $ 74,198 $ 80,109
Less Dividends on
Preferred Stock 3,375 6,750 6,750
Net Income Applicable to
Common Stock $ 26,922 $ 67,448 $ 73,359

Earnings Per Common Share
Primary $ 0.95 $ 2.38 $ 2.65
Fully Diluted $ 0.99 $ 2.30 $ 2.50
Dividends Per Common Share $ 0.40 $ 0.40 $ 0.30
See notes to consolidated financial statements.

American President Companies, Ltd.

CONSOLIDATED BALANCE SHEET
December 29 December 30
(In thousands, except share amounts) 1995 1994
ASSETS
Current Assets
Cash and Cash Equivalents $ 76,564 $ 39,754
Short-Term Investments 59,086 214,898
Trade and Other Receivables, Net 245,490 280,736
Fuel and Operating Supplies 40,358 36,549
Prepaid Expenses and Other Current Assets 80,840 37,135
Total Current Assets 502,338 609,072
Property and Equipment
Ships 1,091,991 678,453
Containers, Chassis and Rail Cars 801,274 781,100
Leasehold Improvements and Other 284,850 260,699
Construction in Progress 25,333 116,845
2,203,448 1,837,097

Accumulated Depreciation and Amortization (961,971) (896,802)
Property and Equipment, Net 1,241,477 940,295
Investments and Other Assets 134,968 114,590

Total Assets $1,878,783 $1,663,957

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current Liabilities
Current Portion of Long-Term Debt
and Capital Leases $ 11,810 $ 4,797
Accounts Payable and Accrued Liabilities 425,378 397,969
Total Current Liabilities 437,188 402,766
Deferred Income Taxes 157,480 139,955
Other Liabilities 127,858 118,603
Long-Term Debt 685,954 373,142
Capital Lease Obligations 1,133 13,108
Total Long-Term Debt and
Capital Lease Obligations 687,087 386,250

Commitments and Contingencies
Redeemable Preferred Stock, $.01 Par Value,
Stated at $50.00, Authorized-2,000,000
Shares Series C, Shares Issued and
Outstanding-1,500,000 in 1994 75,000
Stockholders' Equity
Common Stock $.01 Par Value, Stated at $1.00
Authorized-60,000,000 Shares
Shares Issued and Outstanding-25,669,000 in
1995 and 27,318,000 in 1994 25,669 27,318
Additional Paid-In Capital 1,943 70,853
Retained Earnings 441,558 443,212
Total Stockholders' Equity 469,170 541,383

Total Liabilities, Redeemable Preferred
Stock and Stockholders' Equity $1,878,783 $1,663,957
See notes to consolidated financial statements.

American President Companies, Ltd.

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended December 29 December 30 December 31
(In thousands) 1995 1994 1993
Cash Flows from Operating Activities

Net Income $30,297 $ 74,198 $ 80,109
Adjustments to Reconcile Net Income to Net
Cash Provided by (Used in) Operating Activities:
Depreciation and Amortization 112,418 106,274 109,127
Noncash Restructuring Charge 43,510
Deferred Income Taxes (13,134) 14,865 6,633
Change in Receivables 4,118 (42,216) (37,915)
Issuance of Notes Receivable on Sales
of Real Estate (7,470) (4,170)
Change in Fuel and Operating Supplies (3,809) (1,195) (469)
Change in Prepaid Expenses and Other
Current Assets (4,116) 8,335 3,055
Gain on Sale of Assets (5,660) (5,583) (17,577)
Change in Accounts Payable and
Accrued Liabilities (11,456) 18,844 18,543
Other 11,941 10,519 11,285
Net Cash Provided by Operating Activities 164,109 176,571 168,621
Cash Flows from Investing Activities
Capital Expenditures (455,721) (127,757) (156,270)
Proceeds from Sale of Long-Term Investment 11,310
Proceeds from Sales of Property and Equipment 44,937 9,297 8,955
Purchase of Short-Term Investments (99,975) (453,870)
Proceeds from Sales of Short-Term Investments 255,787 238,972 38,846
Transfer from Capital Construction Fund 8,843
Deposits to Capital Construction Fund (6,140)
Other 2,261 1,649 5,036
Net Cash Used in Investing Activities (252,711) (331,709) (89,420)
Cash Flows from Financing Activities
Repurchase of Common Stock (170,364)
Issuance of Debt 339,897 147,348 663,571
Repayments of Capital Lease Obligations (3,877) (3,278) (113,465)
Repayments of Debt (28,357) (24,897) (634,932)
Dividends Paid (14,359) (17,651) (14,725)
Debt Issue Costs (4,980)
Other 7,213 9,383 12,841
Net Cash Provided by (Used in)
Financing Activities 125,173 110,905 (86,710)
Effect of Exchange Rate Changes on Cash 239 (66) (1,273)
Net Increase (Decrease) in Cash
and Cash Equivalents 36,810 (44,299) (8,782)
Cash and Cash Equivalents at Beginning of Year 39,754 84,053 92,835
Cash and Cash Equivalents at End of Year $76,564 $ 39,754 $ 84,053
SUPPLEMENTAL DATA:
Cash Paid for:
Interest, Net of Capitalized Interest $34,570 $ 24,158 $ 26,232
Income Taxes, Net of Refunds $31,459 $ 15,848 $ 32,370
Noncash Investing Activities:
Change in Trade Receivables Invested in the
Capital Construction Fund $27,178 $ 37,773
Noncash Financing Activities:
Conversion of Redeemable Preferred Stock $75,000

See notes to consolidated financial statements.

American President Companies, Ltd.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Year Ended December 29 December 30 December 31
(In thousands, except share amounts) 1995 1994 1993
Common Stock
Beginning Balance $27,318 $ 26,837 $ 13,022
Stock Awards and Options Exercised, Net 390 481 397
Stock Split 13,418
Conversion of Redeemable Preferred Stock 3,962
Repurchase and Retirement of Common Stock (6,001)
Ending Balance 25,669 27,318 26,837
Additional Paid-In Capital
Beginning Balance 70,853 61,656 62,023
Stock Awards and Options Exercised, Net 6,837 9,197 13,051
Stock Split (13,418)
Conversion of Redeemable Preferred Stock 71,038
Repurchase and Retirement of Common Stock (146,785)
Ending Balance 1,943 70,853 61,656
Retained Earnings
Beginning Balance 443,212 386,960 322,183
Net Income 30,297 74,198 80,109
Cash Dividends
Common (10,984) (10,901) (7,975)
Series C Redeemable Preferred (3,375) (6,750) (6,750)
Repurchase and Retirement of Common Stock (17,578)
Other (14) (295) (607)
Ending Balance 441,558 443,212 386,960
Total Stockholders' Equity $469,170 $541,383 $475,453
See notes to consolidated financial statements.

American President Companies, Ltd.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Fiscal Year
The consolidated financial statements include the accounts
of American President Companies, Ltd. and its majority-owned
subsidiaries (the "company"), after eliminating intercompany
accounts and transactions. The company's fiscal year ends on the
last Friday in December. The company's 1995 and 1994 fiscal
years were 52 weeks, and the 1993 fiscal year was 53 weeks.

Nature of Operations
The company provides transportation services for
containerized cargo in the trans-Pacific, intra-Asia, Asia-
Europe, Asia-Latin America and North American markets. Certain
of the services are provided through alliances with other
transportation companies. In addition, the company provides
cargo distribution and warehousing services in the U.S. and
freight consolidation services in Mexico, Asia, the Middle East,
Europe and Africa. The company also provides freight
deconsolidation services in several U.S. locations and acts as a
non-vessel operating common carrier in the intra-Asia market and
from Asia to Europe and Australia. The company provides
intermodal transportation and freight brokerage services to North
American and international shippers as well as time-critical
cargo transportation and just-in-time delivery (principally to
the automotive manufacturing industry). These services are
provided through an integrated system of rail and truck
transportation, the primary element of which is a train system
utilizing double-stack rail cars. The operations of the company
in any one country, type of cargo or customer are not significant
in relation to the companyOs overall operations.

In late 1995, the company initiated pricing actions for
specific commodities in specific trade lanes in response to
competitive conditions and loss of market share in its U.S.
import market. Subsequently, competitors and the company have
lowered rates, and considerable rate instability in the U.S.
import market continues to exist. The company cannot predict
whether additional pricing actions may be taken by the company or
its competitors. Destabilization of rates, if extensive, could
have a material adverse impact on carriers, including the
company.

Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.

Revenues and Expenses
The company recognizes revenues on a percentage-of-
completion basis and expenses as incurred. Detention revenue is
recognized when cash is received.

Foreign Currency Transactions
The company's primary functional currency is the U.S.
dollar. Foreign entities translate monetary assets and
liabilities at period-end exchange rates while nonmonetary items
are translated at historical rates. Income and expense accounts
are translated at the average rates in effect during the year.
Net gains or (losses) from changes in exchange rates are included
in Operating Income on the accompanying Consolidated Statement of
Income and for 1995, 1994 and 1993 were $(1.7) million, $0.5
million and $(1.1) million, respectively.

Cash, Cash Equivalents and Short-Term Investments
Cash and Cash Equivalents comprise cash balances and
investments with maturities of three months or less at the time
of purchase. Short-Term Investments consist of commercial paper,
auction rate preferred stock and other cash instruments and are
carried at cost, which approximates fair value.

Allowance for Doubtful Accounts
The provision for doubtful accounts, included in Operating
Expenses on the accompanying Consolidated Statement of Income,
for 1995, 1994 and 1993 was $14.9 million, $13.2 million and $4.3
million, respectively. At December 29, 1995 and December 30,
1994 the allowance for doubtful accounts, included in Trade and
Other Receivables on the accompanying Consolidated Balance Sheet,
was $22.5 million and $21.9 million, respectively.

Property and Equipment
Property and Equipment are recorded at historical cost. For
assets financed under capital leases, the present value of the
future minimum lease payments is recorded at the date of
acquisition as Property and Equipment with a corresponding amount
recorded as a capital lease obligation. Depreciation and
amortization are computed using the straight-line method based
upon the following estimated useful lives:

Classification Estimated Useful Life
Ships 15 to 25 Years
Containers, Chassis and Accessories 5 to 15 Years
Rail Cars 5 to 10 Years
Other Property and Equipment Various
Assets Under Capital Lease Arrangements Term of Lease

Maintenance and repair expenditures of $126.3 million,
$117.3 million and $110.3 million have been charged to expense in
1995, 1994 and 1993, respectively, as they were incurred. At
December 29, 1995 and December 30, 1994, the balance of deferred
costs for major periodic dry dockings and rail car overhauls,
which are amortized over two to five years, was $6.3 million and
$12.6 million, respectively.

Long-Term Investments
The company has certain investments, long-term deposits and
receivables, which are included in Investments and Other Assets
on the accompanying Consolidated Balance Sheet. The fair value
of these assets approximates their carrying value at December 29,
1995.

Software Costs
Costs related to internally developed software are charged
to expense as incurred. Purchases of major integrated software
systems are capitalized and amortized using the straight-line
method over five years.

Capitalized Interest
Interest costs of $8.4 million, $6.3 million and $1.5
million relating primarily to cash paid for the construction of
vessels were capitalized in 1995, 1994 and 1993, respectively.

Insurance Reserves
The company is self-insured for a significant portion of its
cargo, vessel, and personal injury exposures. Insurance reserves
are determined using actuarial estimates. These estimates are
based on historical information along with certain assumptions
about future events.

NOTE 2. UNITED STATES MARITIME AGREEMENTS AND LEGISLATION

Operating-Differential Subsidy Agreement
The company and the United States Maritime Administration
("MarAd") are parties to an Operating-Differential Subsidy
("ODS") agreement expiring December 31, 1997, which provides for
payment by the U.S. government to partially compensate the
company for the relatively greater expense of vessel operation
under United States registry. The ODS amounts for 1995, 1994 and
1993 were $61.5 million, $60.8 million and $64.7 million,
respectively, and have been included as a reduction of operating
expenses.

In June 1992, the Bush Administration announced that no new
ODS agreements would be entered into and existing ODS agreements
would be allowed to expire. The Clinton Administration and
Congress have been reviewing U.S. maritime policy. Proposed
maritime support legislation introduced in 1994, referred to as
the Maritime Security Program, was not enacted. The
Administration's proposal included a 10-year subsidy program with
up to $100 million in annual payments to be requested and
appropriated on a year-to-year basis. Congress has appropriated
$46 million in fiscal 1996, or $2.3 million per vessel. This
compares with subsidy of approximately $3.1 million per vessel
under ODS. Maritime support legislation incorporating the
Administration's program has recently passed the U.S. House of
Representatives and is currently awaiting consideration before
the U.S. Senate, but has not yet been approved. The company is
not able to predict whether or when maritime support legislation
will be enacted or what terms such legislation may have, if
enacted.

Capital Construction Fund
The company also has an agreement with MarAd pursuant to
which the company has established a Capital Construction Fund
("CCF") to which the company makes contributions to provide
funding for certain U.S.-built assets and for the repayment of
certain vessel acquisition debt. In 1995 and 1994, the company
made deposits, which were concurrently invested in the company's
trade accounts receivable, of $23.3 million and $36.9 million,
respectively, to its CCF. At December 29, 1995 and December 30,
1994, the CCF, consisted of an investment of $71.1 million and
$40.0 million, respectively, in the company's trade accounts
receivable and is included in Investments and Other Assets on the
accompanying Consolidated Balance Sheet.

The company receives a federal income tax deduction for
deposits made to the CCF, subject to certain restrictions.
Withdrawals from the CCF for investment in vessels or related
assets do not give rise to a tax liability, but reduce the
depreciable bases of the assets for income tax purposes. At
December 29, 1995, the total tax basis of assets purchased with
CCF funds was approximately $44.7 million less than net book
value. Deferred income taxes have been provided for CCF amounts
on deposit or invested in vessels or related equipment.

Shipping Act of 1984
In July 1995, legislation was introduced in the U.S. House
of Representatives that would substantially modify the Shipping,
which, among other things, provides the company with certain
immunity from antitrust laws and requires the company and other
carriers in U.S. foreign commerce to file tariffs. The
legislation, which was not enacted in 1995, would have been
phased in during 1997 and 1998 and would have eliminated
government tariff filing and enforcement, allowed confidential
and independent contracts between shippers and ocean carriers and
strengthened provisions that prohibit predatory activities by
foreign carriers. The company is unable to predict whether this
or other proposed legislation will be introduced in 1996 or
enacted or, whether, if enacted, it will contain terms similar to
those proposed. Enactment of legislation modifying the Shipping
Act, depending upon its terms, could have a material adverse
impact on the competitive environment in which the company
operates and on the company's results of operations.

NOTE 3. RESTRUCTURING CHARGE

During the fourth quarter of 1995, the company recorded a
one-time charge of $48.4 million related to the accelerated
completion of its reengineering program and other organizational
changes. The charge includes $36.4 million related to the
elimination of approximately 950 positions in company operations
that are being reorganized or reduced in size. Of this amount,
$4.9 million related to payments to approximately 147 employees
terminated in the fourth quarter of 1995, when the acceleration
of the company's reengineering program began. Additionally,
equipment and leasehold improvements totaling $4.6 million were
written off in the fourth quarter of 1995 for closed offices and
projects that were eliminated as a result of the acceleration of
the reengineering program.

NOTE 4. INCOME TAXES

The company records income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes", which requires the company to compute deferred
taxes based upon the amount of taxes payable in future years,
after considering known changes in tax rates and other statutory
provisions that will be in effect in those years.

The reconciliation of the company's effective tax rate to
the federal statutory tax rate is as follows:

1995 1994 1993
U.S. Federal Statutory Rate 35% 35% 35%
Increases (Decreases) in Rate Resulting from:
State Taxes, Net of Federal Benefit 3% 3% 3%
Effect of Federal Tax Rate Change on
Prior Years 2%
Revisions of Prior Years' Tax Estimate s (6%)
Permanent Book/Tax Differences and Other 5% 1% (1%)
Net Effective Tax Rate 43% 33% 39%

The following is a summary of the company's provision for
income taxes:

(In thousands) 1995 1994 1993
Current
Federal $24,798 $20,441 $30,164
State 2,455 2,865 3,291
Foreign 8,008 6,746 6,684
35,261 30,052 40,139
Deferred
Federal (11,108) 5,358 7,664
State (1,297) 696 (160)
Change in Federal Tax Rate 2,749
(12,405) 6,054 10,253
Total Provision $22,856 $36,106 $50,392

The following table shows the tax effect of the company's
cumulative temporary differences and carryforwards included on
the company's Consolidated Balance Sheet at December 29, 1995 and
December 30, 1994:

(In thousands) 1995 1994
Excess of Tax Over Book Depreciation $(128,147) $(111,613)
Tax Deductions for CCF Deposits in Excess of
Book Depreciation of CCF Assets (39,734) (48,756)
Net Tax Deduction for Rent Differential
on Capital Leases (28,190) (26,879)
Pension and Postretirement Benefits 23,297 20,692
Excess Insurance Reserves Over Claims Paid 18,566 20,340
Restructuring Charge Accrual 16,379
Allowance for Doubtful Accounts 8,998 8,664
Accrued Liabilities 6,024 6,440
Other 6,700 1,871
Total Net Deferred Tax Liability $(116,107) $(129,241)

The amount of deferred tax assets and liabilities at
December 29, 1995 and December 30, 1994 were as follows:

(In thousands) 1995 1994
Deferred Tax Assets $ 85,032 $ 67,339
Deferred Tax Liabilities (201,139) (196,580)
Total Net Deferred Tax Liability (116,107) (129,241)
Less Net Current Deferred Tax Asset (41,373) (10,714)
Deferred Income Taxes $(157,480) $(139,955)

The net current deferred tax asset is included in Prepaid
Expenses and Other Current Assets on the accompanying
Consolidated Balance Sheet.

NOTE 5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts Payable and Accrued Liabilities at December 29,
1995 and December 30, 1994 were as follows:

(In thousands) 1995 1994
Accounts Payable $ 58,144 $ 54,009
Accrued Liabilities 243,228 259,933
Current Portion of Insurance Claims 19,564 24,468
Income Taxes 5,855 2,883
Unearned Revenue 59,722 56,676
Restructuring Charge 38,865
Total Accounts Payable and Accrued Liabilities $ 425,378 $397,969

NOTE 6. LONG-TERM DEBT

Long-term debt at December 29, 1995 and December 30, 1994
consisted of the following:

(In thousands) 1995 1994
Vessel Mortgage Notes Due Through 2007 (1) $ 338,044
8% Senior Debentures $150 Million Face Amount,
Due on January 15, 2024 (2) 147,169 $147,144
7 1/8% Senior Notes $150 Million Face Amount,
Due on November 15, 2003 (2) 148,227 148,065
Series I 8% Vessel Mortgage Bonds, Due Through 1997 (3) 33,353 57,176
8% Refunding Revenue Bonds, Due on November 1, 2009 (4) 12,000 12,000
Other 7,161 9,842
Total Debt 685,954 374,227
Current Portion (1,085)
Long-Term Debt $ 685,954 $373,142

(1)In 1995, the company took delivery of five of the six new C11-
class vessels. To finance a portion of the purchase of these
vessels, the company borrowed approximately $340 million
under a loan agreement with European banks pursuant to vessel
mortgage notes due through 2007. Principal payments are due
in semiannual installments over a 12-year period commencing
six months after the delivery of the respective vessels. The
interest rates on the notes are based upon various margins
over LIBOR or the banks' cost of funds, as elected by the
company. Until the sixth anniversary of the delivery date,
the company may defer up to four principal payments.
Aggregate deferred payments are due at the end of the term of
the notes. Principal payments on this debt are classified as
long-term on the basis that the company has the ability to
defer at least two payments. The notes issued under this
loan agreement are collateralized by the C11-class vessels,
which had a net book value of $437.2 million at December 29,
1995.

In 1995, the company entered into interest rate swap
agreements on three of the vessel mortgage notes with a
notional amount of $213.7 million to exchange the variable
interest rates on certain of the vessel mortgage notes for
fixed rates for periods of 10 and 12 years. The current
variable interest rates for all the vessel mortgage notes
range between 6.615% and 6.84%. As a result of the swaps,
the effective interest rates range between 6.81% and 7.531%
for the first five years after inception, and 6.935% and
7.656% for the remaining terms of the swaps. Net payments or
receipts under the agreements will be included in interest
expense. The company is exposed to credit losses in the
event of counterparty nonperformance, but does not anticipate
any such losses. Based on quoted dealer prices, immediate
termination of the interest rate swaps would result in a loss
of approximately $6.0 million.

(2)Pursuant to a shelf registration statement the company issued
7 1/8% Senior Notes and 8% Senior Debentures in November 1993
and January 1994, respectively. Interest payments are due
semiannually. The Senior Notes had an effective interest
rate of 7.325%, and an unamortized discount of $1.8 million
and $1.9 million at December 29, 1995 and December 30, 1994,
respectively. The Senior Debentures had an effective
interest rate of 8.172%, and an unamortized discount of $2.8
million and $2.9 million at December 29, 1995 and December
30, 1994, respectively. Fair value of the Senior Notes and
Senior Debentures was approximately $152 million and $151
million, respectively, at December 29, 1995 based on quoted
dealer prices for similar issues.

(3)Principal payments are due in equal semiannual installments
totaling $23.8 million per year. The company has the option
to issue Series II Bonds due sequentially in semiannual
payments at the end of the term of the Series I Bonds in lieu
of up to three of the remaining cash payments, which it has
not yet exercised. Principal amounts are classified as long-
term debt based on the company's ability to issue Series II
Bonds in lieu of the remaining semiannual cash payments. The
bonds issued under this loan agreement are collateralized by
the five C10-class vessels, which had a net book value of
$168 million at December 29, 1995. Fair value of this debt
is approximately $48 million at December 29, 1995 assuming a
current interest rate of 6.15%.

(4)The Bonds are redeemable on or after November 1, 1999 at a
redemption price of 102% of the principal amount, reducing to
100% of the principal amount on or after November 1, 2001.

Carrying value of significant issues of long-term debt,
other than the Series I Bonds, Senior Notes and Senior
Debentures, approximates fair value because the interest rates on
outstanding debt approximate current interest rates that would be
offered to the company for similar debt.

Principal payments scheduled on long-term debt during the
next five years, assuming the company exercises its options to
defer payments on the Vessel Mortgage Notes and Series I Bonds,
are as follows:

(In thousands)
1996 $ 0
1997 26,243
1998 35,234
1999 22,672
2000 24,488

The company has a credit agreement with a group of banks
which provides for an aggregate commitment of $200 million
through March 1999. The credit agreement, as amended in 1995,
contains, among other things, various financial covenants that
require the company to meet certain levels of interest and fixed
charge coverage, leverage and net worth. The borrowings bear
interest at rates based upon various indices as elected by the
company. There have been no borrowings under this agreement.

As an alternative to borrowing under its credit agreement,
the company has an option under that agreement to sell up to $150
million of certain of its accounts receivable to the banks. This
alternative is subject to less restrictive financial covenants
than the borrowing option.

NOTE 7. LEASES

The company leases equipment under capital leases expiring
in one to five years. Assets under capital lease included in
Property and Equipment on the accompanying Consolidated Balance
Sheet at December 29, 1995 and December 30, 1994 are as follows:

(In thousands) 1995 1994
Containers, Chassis and Rail Cars $ 37,982 $ 38,003
Other Property and Equipment 938 938
38,920 38,941
Accumulated Depreciation (36,578) (32,955)
Total $ 2,342 $ 5,986

The following is a schedule of future minimum lease payments
required under the company's leases that have initial
noncancelable terms in excess of one year at December 29, 1995:

Capital Operating
(In thousands) Leases Leases
1996 $ 12,543 $222,427
1997 414 124,072
1998 414 113,149
1999 414 100,915
2000 45 91,918
Later Years 1,468,278
Total Minimum Payments Required $ 13,830 $2,120,759
Amount Representing Interest (887)
Present Value of Minimum Lease Payments 12,943
Current Portion (11,810)
Long-Term Portion $ 1,133

The above schedule of operating leases includes minimum
payments under 30 year leases for terminal facilities in Los
Angeles and Seattle, which are scheduled for occupancy upon
completion of construction in 1997.

Total rental expense for operating leases and short-term
rentals was $328.2 million, $334.3 million and $289.5 million in
1995, 1994 and 1993, respectively.

NOTE 8. EMPLOYEE BENEFIT PLANS

Pension Plans
The company has defined benefit pension plans covering most
of its employees, which generally call for benefits to be paid to
eligible employees at retirement based on years of credited
service and average monthly compensation during the five years of
employment with the highest rate of pay. The company's general
policy is to fund pension costs at no less than the statutory
requirement. Certain non-qualified plans are secured through a
grantor trust. The investment in this trust at December 29, 1995
was $16.6 million and is included in Investments and Other Assets
on the accompanying Consolidated Balance Sheet. The investments
in the trust consist of life insurance policies and other cash
instruments, which are carried at fair value.

The following table sets forth the pension plans' funded
status and amounts recognized in the accompanying Consolidated
Balance Sheet at December 29, 1995 and December 30, 1994:

1995 1994
Assets in Accumulated Assets in Accumulated
Excess of Benefits Excess of Benefits
Accumulated in Excess Accumulated in Excess
(In thousands) Benefits of Assets Benefits of Assets
Actuarial Present Value of:
Vested Benefit Obligation $(108,061) $ (10,149) $ (94,408) $ (8,082)
Accumulated Benefit Obligation (116,458) (10,932) (103,079) (8,837)
Actuarial Present Value of
Projected Benefit Obligation $(161,224) $ (17,922) $(139,993) $ (13,252)
Plan Assets at Fair Value 152,169 765 131,590
Funded Status (9,055) (17,157) (8,403) (13,252)
Unrecognized Net Loss (Gain) 10,438 330 15,422 (1,631)
Unrecognized Prior Service
(Credit) Cost (14,998) 3,528 (16,049) 3,915
Unrecognized Transition
(Asset) Obligation (8,850) 829 (9,940) 829
Net Pension Liability $ (22,465) $ (12,470) $ (18,970) $ (10,139)

The following assumptions were made in determining the
company's net pension liability:

(Weighted Average of All Plans) 1995 1994 1993
Discount Rate 7.5% 7.9% 7.1%
Rate of Increase in Compensation Levels 5.2% 5.2% 5.2%
Expected Long-Term Rate of Return
on Plan Assets 8.2% 8.2% 8.2%

Net pension cost related to the company's pension plans
included the following components:

(In thousands) 1995 1994 1993
Service Cost $ 8,333 $ 9,144 $ 7,858
Interest Cost on Projected
Benefit Obligation 12,357 11,228 10,138
Actual Return on Plan Assets (25,019) 414 (14,354)
Net Amortization and Deferral 12,648 (12,971) 2,453
Net Pension Cost $ 8,319 $ 7,815 $ 6,095

The company also participates in collectively bargained,
multi-employer plans that provide pension and other benefits to
certain union employees. The company contributed $5.8 million in
1995, $5.3 million in 1994, and $5.2 million in 1993 to such
plans. These contributions are determined in accordance with the
provisions of negotiated labor contracts and generally are based
on the number of hours worked and are expensed as incurred.
Under certain of the multi-employer pension plans in which the
company participates, the company has withdrawal liabilities of
$12.5 million for unfunded vested benefits at December 31, 1994,
the latest valuation date. However, the company has no present
intention of withdrawing from the plans, nor has the company been
informed that there is any intention to terminate the plans.
There are no other significant withdrawal liabilities
attributable to the company for multi-employer pension plans.

Postretirement Benefits Other than Pensions
The company shares the cost of its health care benefits with
the majority of its domestic shoreside retired employees and
recognizes the cost of providing health care and other benefits
to retirees over the term of employee service.

Postretirement benefit costs in the accompanying
Consolidated Statement of Income were as follows:
(In thousands) 1995 1994 1993
Interest Cost $ 1,266 $ 1,380 $ 1,573
Service Cost 795 1,117 1,033
Amortization of Gains (477) (117) (117)
Total Postretirement Benefit Cost $ 1,584 $ 2,380 $ 2,489

The following table sets forth the postretirement benefit
obligation recognized in the accompanying Consolidated Balance
Sheet at December 29, 1995 and December 30, 1994:

(In thousands) 1995 1994
Accumulated Postretirement Benefit Obligation
Retirees $ 7,489 $6,975
Active Employees - Fully Eligible 604 462
Active Employees - Not Fully Eligible 8,483 7,925
Unrecognized Net Gain 7,505 7,671
Unamortized Prior Service Cost 1,834 1,952
Total $25,915 $24,985

The expected cost of the company's postretirement benefits
is assumed to increase at an annual rate of 9.3% in 1996. This
rate is assumed to decline approximately 1% per year to 5% in the
year 1999 and remain level thereafter. The health care cost
trend rate assumption has a significant impact on the amounts
reported. An increase in the rate of 1% in each year would
increase the accumulated postretirement benefit obligation at
December 29, 1995 by $2.7 million and the aggregate of the
service and interest cost for 1995 by $0.5 million. The weighted
average discount rate used to determine the accumulated
postretirement benefit obligation was 7.5%. The company has not
funded the liability for these benefits.

Profit-Sharing Plans
The company has defined contribution profit-sharing plans
covering certain non-union employees. Under the terms of these
plans, the company has agreed to make matching contributions
equal to those made by the participating employees up to a
maximum of 6% of each employee's base salary. The company's
total contributions to the plans amount to $6.3 million for 1995
and 1994, and $6.0 million for 1993.

NOTE 9. REDEEMABLE PREFERRED STOCK

On July 14, 1995, the company issued a notice of redemption
for all $75 million of its 9% Series C Cumulative Convertible
Preferred Stock ("Series C Preferred Stock"). On July 28, 1995,
at the election of the holders, the 1,500,000 shares of Series C
Preferred Stock were converted into 3,961,498 shares of common
stock, or 2.641 shares of common stock for each share of Series C
Preferred Stock (a conversion price of $18.93 per share of common
stock).

NOTE 10. STOCKHOLDERS' EQUITY

Common Stock Repurchase
On July 21, 1995, the Board of Directors authorized the
repurchase of up to 6 million shares of the company's common
stock. On August 8, 1995, the company repurchased 2 million
shares from the former holders of the Series C Preferred Stock at
a purchase price of $27 per share. In addition, on September 18,
1995, the company repurchased 2,820,499 shares through a Dutch
Auction self-tender offer at a purchase price of $30 per share,
plus expenses. The company repurchased an additional 1,180,000
shares of its common stock through open market transactions at an
average price of $25.81 per share, plus expenses, which on
October 25, 1995, completed the repurchase of the 6 million
shares authorized. All repurchased shares were retired. The
excess of the purchase price of the common stock over its stated
value has been reflected as a decrease in Additional Paid-In
Capital and Retained Earnings on the accompanying Consolidated
Balance Sheet.

Earnings Per Common Share
For the years presented, primary earnings per common share
were computed by dividing net income, reduced by the amount of
preferred stock dividends, by the weighted average number of
common shares and common equivalent shares outstanding during the
year. Common equivalent shares consist of stock options granted.
Fully diluted earnings per common share were computed based on
the assumption that the Series C Preferred Stock was converted at
the beginning of the year. The number of shares used in these
computations was as follows:

Weighted Average Number of Common and Common Equivalent Shares
(In millions) 1995 1994 1993
Primary 28.2 28.3 27.7
Fully Diluted 30.6 32.3 32.1

Supplementary Earnings Per Common Share Data
On July 28, 1995, the Series C Preferred Stock was converted
into 3,961,498 shares of common stock. The effect of the
conversion of the Series C Preferred Stock on primary and fully
diluted earnings per share, assuming the conversion occurred at
the beginning of each year, is as follows:

1995 1994 1993
Primary Earnings per Common Share
As Stated $0.95 $ 2.38 $2.65
Assuming Shares Converted at
the Beginning of the Period $0.99 $ 2.30 $2.53
Fully Diluted Earnings per Common Share
As Stated (1) $0.99 $ 2.30 $2.50
Assuming Shares Converted at
the Beginning of the Period $0.99 $ 2.30 $2.50

(1)Fully diluted earnings per share "As Stated" reflects the
conversion of the Series C Preferred Stock as though such
conversion occurred at the beginning of each period.

Stockholder Rights Plan
The company's stockholder rights agreement provides that
rights become exercisable when a person acquires 20% or more of
the companyOs common stock or announces a tender offer which
would result in the ownership of 20% or more of the companyOs
common stock, or if a person who has been declared "adverse" by
the independent directors of the company exceeds a threshold
stock ownership established by the Board, which may not be less
than 10%. The rights will be attached to all common stock. Once
exercisable, each right entitles its holder to purchase two one-
hundredths of a share ("unit") of Series A Junior Participating
Preferred Stock at a purchase price of $130 per unit, subject to
adjustment.

Upon the occurrence of certain other events related to
changes in the ownership of the company's outstanding common
stock, each holder of a right would be entitled to purchase
shares of the company's common stock or an acquiring
corporation's common stock having a market value of two times the
exercise value of the right. Rights that are, or were,
beneficially owned by an acquiring or adverse person will be null
and void. In addition, the Board of Directors may, in certain
circumstances, require the exchange of each outstanding right for
common stock or other consideration with a value equal to the
exercise price of the rights. The company has reserved 500,000
shares of preferred stock for issuance pursuant to the exercise
of the rights in the future. The rights expire November 29, 1998
and, subject to certain conditions, may be redeemed by the Board
of Directors at any time at a price of $0.025 per right.

Stock Incentive Plans
The Compensation Committee of the Board of Directors
approved stock option grants under the company's 1989 Stock
Incentive Plan (the "Plan") for shares of the company's common
stock beginning in July 1993 to key employees of the company.
The options have an exercise price of the greater of the fair
market value on the date of grant or $22.38 per share, a term
expiring July 26, 2003 and vest between 1996 and 2002 based upon
the achievement of stock price appreciation targets. The
percentage of the options that vest during specified time periods
will depend on the amount of stock price appreciation in those
time periods. In 1998, the options will vest as to 60% of the
covered shares if not otherwise vested, and in 2002, the options
will vest as to the remaining 40% if not otherwise vested.

Previous stock option grants under the Plan become
exercisable in three to four equal annual installments commencing
one year after grant. The Plan also provides for awards of
restricted shares of common stock to officers and other key
employees. All restricted shares were vested at December 29,
1995.

The 1992 Directors Stock Option Plan provides for the
granting of options to purchase shares of common stock to non-
employee members of the company's Board of Directors. The
aggregate number of options which may be granted under this plan
is 200,000. Options become exercisable in three equal
installments on the first three anniversaries of the date of
grant.

In 1995, the Board of Directors adopted the companyOs 1995
Stock Bonus Plan ("Stock Bonus Plan"). The Stock Bonus Plan
permits executives and key employees, as selected by the
Compensation Committee of the Board of Directors, to receive all
or part of their bonuses in the form of shares of common stock or
phantom shares. In addition, non-employee directors may elect to
receive all or part of their annual retainers and/or meeting fees
in the form of shares of common stock or phantom shares.
Participants receive a premium in the form of additional shares
equal to 17.6% which vest over a two year period. The Stock
Bonus Plan is effective for amounts payable in 1996.

The following is a summary of the transactions in the plans
during 1995:

Stock Options Restricted Shares
Average
Shares Price
Outstanding at December 30, 1994 4,920,871 $ 19.63 3,000
Granted 292,447 23.32
Exercised (390,932) 13.68
Vested (3,000)
Canceled (373,373) 22.29
Outstanding at December 29, 1995 4,449,013 $ 20.17 0
Exercisable at December 29, 1995 1,219,624 $ 14.29
Exercised in 1994 516,614 $ 12.07
Exercised in 1993 833,834 $ 11.54

At December 29, 1995, a total of 983,862 shares were
available for future grants of stock options, restricted shares
and stock units under these plans.

NOTE 11. COMMITMENTS AND CONTINGENCIES

Commitments

Ship Purchases and Ship Management
The company took delivery of and made final payments on five
C11-class vessels in 1995 and one C11-class vessel in 1996, built
pursuant to construction contracts with Howaldtswerke-Deutsche
Werft AG, of Germany and Daewoo Shipbuilding and Heavy Machinery,
Ltd., of Korea. The total cost of the six C11-class vessels was
$529 million, including total payments to the shipyards of $503
million, of which $62 million was paid in January 1996. In
connection with the construction and purchase of the ships from
HDW, the company entered into foreign currency contracts to buy
Deutsche marks to lock in the U.S. dollar cost of the Deutsche-
mark denominated price of the vessels. Gains or losses on these
contracts were recognized as adjustments to the cost basis of the
ships when the related payments were made. At December 29, 1995,
all contracts were settled.

On January 5, 1995, the company and Columbia Shipmanagement
Ltd., a Cyprus company ("Columbia"), entered into an agreement
under which Columbia would provide crewing, maintenance,
operations and insurance for the company's six C11-class vessels
for a per diem fee per vessel. The agreement may be terminated
at any time by either party with notice.

Alliances
Since 1991, the company and Orient Overseas Container Line
("OOCL") have been parties to agreements enabling them to
exchange vessel space and coordinate vessel sailings through
2005. These agreements permit both companies to offer faster
transit times and more frequent sailings between key markets in
Asia and the U.S. West Coast, and to share terminals and several
feeder operations within Asia. In September 1994, the company,
Mitsui OSK Lines, Ltd.("MOL"), and OOCL signed an agreement to
exchange vessel space, coordinate vessel sailings and cooperate
in the use of port terminals and equipment for ocean
transportation services in the Asia-U.S. West Coast trade through
2005. The carriers commenced service under this agreement in
January 1996. The agreement between the company and OOCL is
suspended so long as the agreement between the company, OOCL and
MOL is in effect.

The three carriers and Nedlloyd Lines B.V. ("NLL") are
parties to a separate agreement to exchange vessel space,
coordinate vessel sailings and cooperate in the use of port
terminals and equipment in an all-water service in the Asia-Latin
America trade for a minimum of three years. The four carriers
initiated service under this agreement in March 1995.

Under the alliance agreements, alliance partners contribute
and are allocated vessel space, which may be adjusted from time
to time. The agreements provide for, among other things,
settlement of the difference between the value of vessel space
provided by each partner and the value of vessel space available
to that partner, at specified vessel costs per TEU per day. The
value of vessel space provided by the company to the alliances is
less than the value of the total capacity allocated to it through
the alliances, resulting in an annual net cash payment from the
company to its alliance partners. The amount paid to alliance
partners was $45 million in 1995, and is currently estimated to
be $32 million in 1996. Agreements covering terminal and
equipment sharing among the alliance partners have not been
finalized, and the commitment of the alliance partners, including
the company, for these services cannot be determined at this
time.

In September 1995, the company sold a construction contract
for three K10-class vessels, which it had entered into in 1993,
and recognized a pretax gain of $1.6 million. In conjunction
with the sale, the company, MOL, OOCL and NLL, formed a joint
venture company, in which their respective shares are each 25%,
and agreed to charter back these vessels, when delivered, for
seven years for use in the Asia-Europe trade. Prior to the sale
of the construction contract, the company made progress payments
of $30 million for these vessels, including payments of $12
million in 1995, for which it received reimbursement.

In October 1995, the company and Matson Navigation Company,
Inc. ("Matson") signed an agreement for a 10-year alliance, which
commenced in February 1996. Pursuant to the terms of this
alliance, the company sold Matson six of its ships (three C9-
class vessels and three C8-class vessels) and certain of its
assets in Guam for approximately $163 million in cash. One of
the ships was sold in December 1995 and resulted in a gain of
$2.4 million. The remaining five vessels were sold in January
1996. Four of these vessels, together with a fifth Matson
vessel, are being used in the alliance. The net gain on the sale
of the four vessels used in the alliance and the assets in Guam,
after deducting costs associated with the agreement, is estimated
to be $6 million, and will be deferred and amortized over the 10-
year term of the alliance. Matson is operating the vessels in
the alliance, which serves the U.S. West Coast, Hawaii, Guam,
Korea and Japan, and has the use of substantially all the
westbound capacity. The company has the use of substantially all
the vessels' eastbound capacity. The gain on the sale of the
fifth vessel was $1.6 million.

Facilities, Equipment and Services
The company had outstanding purchase commitments to acquire
cranes, facilities, equipment and services totaling $72.9 million
at December 29, 1995. In addition, the company has commitments
to purchase terminal services for its major Asian operations.
These commitments range from one to ten years, and the amounts of
the commitments under these contracts are based upon the actual
services performed. At December 29, 1995, the company had
outstanding letters of credit totaling $27.3 million, which
guarantee the company's performance under certain of its
commitments.

Employment Agreements
The company has entered into employment agreements with
certain of its executive officers. The agreements provide for
certain payments to each officer upon termination of employment,
other than as a result of death, disability in most cases, or
justified cause, as defined. The aggregate estimated commitment
under these agreements was $13.4 million at December 29, 1995.

Contingencies
In October 1995, Lykes Steamship Company, Inc. ("Lykes")
filed a petition seeking protection from its creditors under
Chapter 11 of the U.S. Bankruptcy laws. At present, the company
charters its four L9-class vessels from Lykes under charters that
expire in early 1996. The L9-class vessels are used in the
company's West Asia/Middle East service. In addition, the
company charters to Lykes three of its Pacesetter vessels under
charters that also expire in early 1996. The potential
consequences of Lykes' petition on the company's operations and
financial condition, and possible steps the company may take to
mitigate any resulting adverse effects, are being evaluated by
management. The company is currently unable to predict the
extent of such consequences.

The company is a party to various legal proceedings, claims
and assessments arising in the course of its business activities.
Based upon information presently available, and in light of legal
and other defenses and insurance coverage and other potential
sources of payment available to the company, management does not
expect these legal proceedings, claims and assessments,
individually or in the aggregate, to have a material adverse
impact on the company's consolidated financial position or
operations.

NOTE 12. BUSINESS SEGMENT INFORMATION

The company provides container transportation services in
North America, Asia and the Middle East through an intermodal
system combining ocean, rail and truck transportation. In
addition, the company was engaged in real estate operations until
1994, when its remaining real estate holdings were sold.

(In millions) 1995 1994 1993
Revenues
Transportation $ 2,896.0 $2,777.3 $ 2,590.2
Real Estate 16.2 16.0
Total $ 2,896.0 $2,793.5 $ 2,606.2
Operating Income
Transportation $ 68.4 $ 114.2 $ 122.9
Real Estate 9.0 10.0
Total $ 68.4 $ 123.2 $ 132.9

Identifiable Assets
Transportation $ 1,877.6 $1,658.0 $ 1,442.0
Real Estate 1.2 6.0 12.4
Total $ 1,878.8 $1,664.0 $ 1,454.4

Depreciation expense and capital expenditures were related
only to transportation operations in 1995, 1994 and 1993.

The following table shows the percentage of ocean
transportation revenues by country:

1995 1994 1993
Origin Destination Origin Destination Origin Destination
United States 27% 41% 26% 44% 27% 44%
Hong Kong 13 5 14 4 12 4
People's Republic
of China 10 3 10 3 8 1
Japan 8 10 9 11 10 12
Taiwan 8 3 9 3 9 4
India 5 3 5 2 5 3
Korea 4 3 4 3 5 2
Indonesia 4 2 4 1 4 1
Philippines 4 3 3 3 4 2
Other 17 27 16 26 16 27

Operating income, net income and identifiable assets cannot
be allocated on a geographic basis due to the nature of the
companyOs business.

NOTE 13. QUARTERLY RESULTS (Unaudited)

(In millions, except per share amounts)

1995 1994
Quarter December September June April December September July April
Ended 29 22 30 7 30 23 1 8

Revenues $ 769.9 $ 711.1 $ 674.3 $ 740.7 $ 764.7 $ 672.1 $ 653.6 $ 703.1
Operating Income (Loss)
Transportation (13.4) 53.5 24.7 3.6 34.3 37.2 26.1 16.6
Real Estate 6.4 2.6
Total Operating
Income (Loss) (1),(2) (13.4) 53.5 24.7 3.6 34.3 37.2 32.5 19.2
Income (Loss)Before Taxes (21.3) 49.8 23.0 1.7 32.2 34.0 28.8 15.3
Net Income (Loss) $ (15.9) $ 30.9 $ 14.2 $ 1.1 $ 22.5 $ 22.5 $ 19.0 $ 10.2
Earnings (Loss)
Per Common Share
Primary $(0.61) $ 1.02 $ 0.45 $(0.02) $ 0.74 $ 0.74 $ 0.62 $ 0.30
Fully Diluted $(0.61) $ 0.97 $ 0.44 $(0.02) $ 0.69 $ 0.70 $ 0.60 $ 0.30
Cash Dividends
Per Common Share $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10
Market Price
Per Common Share
High $29 3/4 $31 1/2 $24 3/8 $24 1/4 $26 7/8 $27 1/8 $23 1/8 $34
Low 22 1/4 23 1/2 22 1/4 21 1/8 21 1/4 20 7/8 19 22 1/8

(1)Collections of detention charges related to the company's
containers used to transport Operation Desert Storm cargo
contributed $0.7 million, $0.5 million, $0.7 million and $8.3
million to Operating Income for the fourth, third, second and
first quarters of 1994, respectively.

(2)In the fourth quarter of 1995, the company recorded a
restructuring charge of $48.4 million. Additionally, in the
fourth and third quarters of 1995, the company received
liquidated damages from the delayed delivery of two of its
C11-class vessels of $2 million and $3.5 million,
respectively, and sold ships for gains of $2.5 million and
$3.7 million, respectively.

SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

Description Balance at Charged To Charged To Deductions- Balance at
Beginning Cost and Other Describe (1) End of Year
of Year Expense Accounts-
Describe (2)

Allowance for Doubtful Accounts

December 29, 1995 $21,908 14,937 (14,314) $22,531

December 30, 1994 $10,359 13,217 2,295 (3,963) $21,908

December 31, 1993 $13,237 4,324 (764) (6,438) $10,359

(1)Uncollectible receivables written off, net of recoveries.
(2)Reclassifications from/(to) other Balance Sheet accounts.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information with respect to Directors and certain
executive officers of the company appearing under the caption
"Election of Directors - Information With Respect to Nominees and
Directors" and in footnote 2 on page 6 in the company's
definitive proxy statement for the annual meeting of stockholders
to be held on April 30, 1996 is hereby incorporated herein by
reference.

The following sets forth certain information with respect to the
remaining executive officers of the company:

John G. Burgess, age 51, was elected Executive Vice President of
the company in May 1995. He has also served as Executive Vice
President of American President Lines, Ltd. ("APL") since
December 1992. Prior to that, he served as Executive Vice
President and Chief Operating Officer APL from May 1990 to
November 1992.

Maryellen B. Cattani, age 52, was elected Executive Vice
President of the company in March 1995. She has also served as
General Counsel and Secretary of the company since July 1991 and
as a Senior Vice President from July 1991 to March 1995. Prior
to joining the company, she was a partner in the law firm of
Morrison & Foerster from 1989 to 1991.

L. Dale Crandall, age 54, was elected Executive Vice President
and Chief Financial Officer of the company in March 1995 and
Treasurer of the company in September 1995. Prior to that, Mr.
Crandall was managing partner of Price Waterhouse Los Angeles
office since 1990.

Michael Diaz, age 47, was elected Executive Vice President of the
company in May 1995. He has also served as Executive Vice
President of APL since December 1992. Prior to that, he served
as President, Asia Division of APL from August 1992 to November
1992, and Executive Vice President and Chief Operating Officer of
APL Land Transport Services, Inc. from July 1990 to July 1992.

Michael Goh, age 46, was elected Senior Vice President of the
company in March 1996. Prior to that, he served as Senior Vice
President of APL from January 1996 and in various capacities with
APL Land Transport Services, Inc., including Senior Vice
President from May 1992 to July 1994 and Vice President from May
1989 to April 1992.

James S. Marston, age 62, was elected Executive Vice President
and Chief Information Officer of the company in May 1995. He
served as Senior Vice President and Chief Information Officer of
the company from September 1987 to May 1995.

William J. Stuebgen, age 48, has served as Vice President,
Controller of the company since October 1990.

The executive officers of the company are elected by the Board of
Directors. Each officer holds office until his or her successor
has been duly elected and qualified, or until the earliest of his
or her death, resignation, retirement or removal by the Board.

ITEM 11. EXECUTIVE COMPENSATION

The information appearing under the caption "Compensation of
Executive Officers and Directors" and in the company's definitive
proxy statement for the annual meeting of stockholders to be held
on April 30, 1996, is hereby incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information appearing under the captions "Election of
Directors-Stock Ownership of Directors and Executive Officers"
and "Certain Beneficial Ownership of Securities" in the company's
definitive proxy statement for the annual meeting of stockholders
to be held on April 30, 1996, is hereby incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information appearing under the captions "Compensation
of Executive Officers and Directors -- Employment Agreements,
Termination of Employment and Change-in-Control Arrangements and
Certain Transactions" in the company's definitive proxy statement
for the annual meeting of stockholders to be held on April 30,
1996, is hereby incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:

1. Financial Statements and Schedules

The following report of independent public accountants,
consolidated financial statements and notes to the
consolidated financial statements of American President
Companies, Ltd. and subsidiaries are contained in Part II,
Item 8:

a. Report of Independent Public Accountants
b. Consolidated Statement of Income
c. Consolidated Balance Sheet
d. Consolidated Statement of Cash Flows
e. Consolidated Statement of Changes in Stockholders' Equity
f. Notes to Consolidated Financial Statements

2. The following schedules are contained in Part II, Item 8:

a. Schedule II - Valuation and Qualifying Accounts

3.Exhibits required by Item 601 of Regulation S-K

The following documents are exhibits to this Form 10-K

Exhibit No. Description of Document

3.1* Integrated copy of the amended Certificate of
Incorporation, filed as Exhibit 3.1 to the company's Form
10-Q (File No. 1-8544), dated November 1, 1995.

3.2 Integrated copy of the amended By-Laws, dated December 27, 1995.

4.1* Amended and Restated Rights Agreement dated October 22,
1991, between the company and The First National Bank of
Boston, as Rights Agent, filed as Exhibit 4.1 to the
company's Form SE (File No. 1-8544), dated October 22,
1991.

4.2* Trust Indenture between American President Lines, Ltd.,
Issuer, and Security Pacific National Bank, Trustee, dated
as of April 22, 1988, President Truman Issue, filed as
Exhibit 4.1 to the company's Form SE (File No. 1-8544),
dated July 26, 1988.

4.3* Forms of Series I and Series II Bonds, filed as part of
Exhibit 4.1 to the company's Form SE (File No. 1-8544),
dated July 26, 1988.

4.4* Registration Rights Agreement, among the company, Hellman
& Friedman Capital Partners, Hellman & Friedman Capital
Partners International (BVI), and APC Partners; dated as
of August 3, 1988, as amended (without exhibits), filed as
Exhibit 4.2 to the company's Form SE (File No. 1-8544),
dated February 17, 1989.

4.5* Indenture, dated as of November 1, 1993, between American
President Companies, Ltd. and The First National Bank of
Boston as Trustee, filed as Exhibit 4.1 to the company's
Form 8K (File No. 1-8544), dated November 29, 1993.

4.6* Form of 7-1/8% Senior Note Due 2003 of American President
Companies, Ltd., filed as Exhibit 4.2 to the company's
Form 8K (File No. 1-8544) dated November 29, 1993.

4.7* Form of 8% Senior Debentures Due 2024 of American
President Companies, Ltd., filed as Exhibit 4.20 to the
company's Form 10K (File No. 1-8544), dated March 9, 1994.

10.1* Operating-Differential Subsidy Agreement (No. MA/MSB-417),
effective as of January 1, 1978, between the United States
and American President Lines, Ltd., filed as Exhibit 10.1
to the company's Form SE (File No. 1-8544), dated March
17, 1992.

10.2* Lease Agreement, dated June 1, 1988, between Monsanto
Company and American President Intermodal Company, Ltd.,
filed as Exhibit 10.14 to the company's Form SE (File No.
1-8544), dated July 26, 1988.

10.3* Lease Agreement, dated June 1, 1988, between Consolidated
Rail Corporation and American President Intermodal
Company, Ltd., filed as Exhibit 10.2 to the company's Form
SE (File No. 1-8544), dated March 14, 1990.

10.4* Lease and Preferential Assignment Agreement dated January
6, 1971, and First Supplemental Agreement dated February
24, 1971, between the City of Oakland and Seatrain
Terminals of California, Inc., filed as Exhibit 10.32 to
the company's Registration Statement on Form S-l,
Registration No. 2-93718, which became effective on
November 1, 1984.

10.5* Second Supplemental Agreement to Lease and Preferential
Assignment Agreement, dated May 3, 1988, filed as Exhibit
10.3 to the company's Form SE (File No. 1-8544), dated
March 14, 1990.

10.6* Preferential Assignment dated February 23, 1972, between
the City of Oakland and Seatrain Terminals of California,
Inc., filed as Exhibit 10.33 to the company's Registration
Statement on Form S-l, Registration No. 2-93718, which
became effective on November 1, 1984.

10.7* Assignment, Designation of Secondary Use and Consent,
dated December 11, 1974, among Seatrain Terminals of
California, Inc., American President Lines, Ltd., the City
of Oakland and Seatrain Lines, Inc., filed as Exhibit
10.34 to the company's Registration Statement on Form S-l,
Registration No. 2-93718, which became effective on
November 1, 1984.

10.8* Acknowledgment of Termination of Consent to Secondary Use
and Sublease and Assumption of Entire Combined Premises
and Cranes dated December 18, 1981, between the City of
Oakland and American President Lines, Ltd., filed as
Exhibit 10.35 to the company's Registration Statement on
Form S-l, Registration No. 2-93718, which became effective
on November 1, 1984.

10.9* Supplemental Agreement dated July 6, 1982, between the
City of Oakland and American President Lines, Ltd., filed
as Exhibit 10.36 to the company's Registration Statement
on Form S-l, Registration No. 2-93718, which became
effective on November 1, 1984.

10.10*Permit No. 441, dated November 26, 1980, Second Amendment
to Permit No. 441, dated February 7, 1983, and Third
Amendment to Permit No. 441, dated May 10, 1984, between
the City of Los Angeles and American President Lines,
Ltd., filed as Exhibit 10.37 to the company's Registration
Statement on Form S-l, Registration No. 2-93718, which
became effective on November 1, 1984.

10.11*Fourth Amendment to Permit No. 441, dated as of October
29, 1986 between the City of Los Angeles and American
President Lines, Ltd., filed as Exhibit 10.4 to the
company's Form SE (File No. 1-8544), dated March 23, 1987.

10.12 Sixth Amendment to Permit No. 441, dated as of August 30,
1993, between the City of Los Angles and American
President Lines, Ltd.

10.13*Financing and Security Agreement, dated March 27, 1984,
between American President Lines, Ltd. and the City of Los
Angeles, California, filed as Exhibit 10.38 to the
company's Registration Statement on Form S-1, Registration
No. 2-93718, which became effective on November 1, 1984.

10.14*Lease, dated July 31, 1972, Lease Agreement, dated
September 1, 1980, Memorandum, dated September 1, 1980,
and two letters dated July 3, 1981 and July 14, 1981,
respectively, between Hanshin Port Development Authority
and American President Lines, Ltd., filed as Exhibit 10.39
to the company's Registration Statement on Form S-1,
Registration No. 2-93718, which became effective on
November 1, 1984.

10.15*Pre-engagement Agreement for Lease dated March 17, 1983,
Supplemental Agreement dated March 17, 1983 and form of
Wharf Lease Agreement between Yokohama Port Terminal
Corporation and American President Lines, Ltd., filed as
Exhibit 10.41 to the company's Registration Statement on
Form S-l, Registration No. 2-93718, which became effective
on November 1, 1984.

10.16*Lease Contract of Wharves Nos. 68 & 69 of Container
Terminal No. 3 Kaohsiung Harbor, Taiwan, Republic of
China, dated December 31, 1987 and Equipment Agreement
between the Kaohsiung Harbor Bureau and APL, dated
December 31, 1987, filed as Exhibit 10.4 to the company's
Form SE (File No. 1-8544), dated March 11, 1988.

10.17*Lease dated April 28, 1978, Memorandum of Understanding,
Addendum to Lease dated May 9, 1978, Addendum No. 2 to
Lease dated July 28, 1978, and Addendum No. 3 to Lease
dated March 27, 1984, between Sunset Cahuenga Building, a
Joint Venture, and American President Lines, Ltd., filed
as Exhibit 10.44 to the company's Registration Statement
on Form S-l, Registration No. 2-93718, which became
effective on November 1, 1984.

10.18*Addendum No. 4 dated April 19, 1985 to Lease dated April
28, 1978, between Sunset Cahuenga Building, a Joint
Venture, and American President Lines, Ltd., filed as
Exhibit 10.1 to the company's Form SE (File No. 1-8544),
dated December 12, 1985.

10.19*Addendum No. 5 dated July 25, 1986 to Lease dated April
28, 1978, between Sunset Cahuenga Building, a Joint
Venture, and American President Lines, Ltd., filed as
Exhibit 10.5 to the company's Form SE (File No. 1-8544),
dated March 11, 1988.

10.20*Addendum No. 6, dated May 1, 1988, to Lease dated April
28, 1978, between Sunset Cahuenga Building, a Joint
Venture, and American President Lines, Ltd., filed as
Exhibit 10.13 to the company's Form SE (File No. 1-8544),
dated July 26, 1988.

10.21*Lease Agreement between Port of Seattle and American
President Lines, Ltd. at Terminal 5 dated September 26,
1985, filed as Exhibit 10.5 to the company's Form SE (File
No. 1-8544), dated December 12, 1985.

10.22*Amendment No. 6 to the Lease Agreement between Port of
Seattle and American President Lines, Ltd. at Terminal 5,
and assignment of the lease from American President Lines,
Ltd. to Eagle Marine Services, Ltd. dated June 1, 1994,
excluding exhibits and other related agreements, filed as
Exhibit 10.1 to the company's Form 10-Q (File No. 1-8544),
dated August 12, 1994.

10.23*Lease Agreement between the company and Bramalea Pacific,
Inc. dated April 18, 1988, and Amendments 1 through 5,
filed as Exhibit 10.3 to the company's Form SE (File No. 1-
8544), dated March 27, 1991.

10.24*Grantor Trust Agreement with U.S. Trust Company of
California, N.A., effective April 10, 1989, filed as
Exhibit 10.1 to the company's Form SE (File No. 1-8544),
dated August 1, 1989.

10.25*Assignment Agreement from United States Lines, Inc. to
American President Lines, Ltd. with attached supplements,
dated September 16, 1987, filed as Exhibit 10.8 to the
company's Form SE (File No. 1- 8544), dated March 14,
1990.

10.26*Permit No. 733, dated September 10, 1993, between the City
of Los Angeles and Eagle Marine Services, Ltd., and the
Guaranty of Agreement made by American President Lines,
Ltd., excluding exhibits, filed as Exhibit 10.1 to the
company's Form 10-Q (File No. 1-8544), dated November 18,
1993.

10.27*Loan Agreement dated March 14, 1994 by and among
Kreditanstalt fur Wiederaufbau (as Agent and Lender);
Commerzbank AG, Hamburg (as Syndicate Agent); Commerzbank
AG (Kiel Branch), Dresdner Bank AG in Hamburg, Vereins-und
Westbank AG, Deutsche Schiffsbank AG, Norddeutsche
Landesbank-Girozentrale, Deutsche Verkehrs-Bank AG, Banque
Internationale a Luxembourg S.A. (as the Syndicate); and
American President Lines, Ltd. (as Borrower); including
Appendices and Schedules thereto, filed as Exhibit 10.4 to
the company's Form 10-Q (File No. 1-8544), dated May 20,
1994 and as Exhibit 10.4a to the company's Form 10-K/A
(file No. 1-8544), dated December 6, 1994.

10.28 Amendment No. 1 dated May 19, 1995 to the Loan Agreement
dated March 14, 1994 by and among Kreditanstalt fur
Wiederaufbau (as Agent and Lender); Commerzbank AG,
Hamburg (as Syndicate Agent); Commerzbank AG (Kiel
Branch), Dresdner Bank AG in Hamburg, Vereins-und Westbank
AG, Deutsche Schiffsbank AG, Norddeutsche Landesbank-
Girozentrale, Deutsche Verkehrs-Bank AG, Banque
Internationale a Luxembourg S.A. (as the Syndicate); and
American President Lines, Ltd. (as Borrower).***

10.29 Amendment No. 2 dated September 1, 1995 to the Loan
Agreement dated March 14, 1994, as amended by Amendment
No. 1 to the Loan Agreement dated May 19, 1995, by and
among Kreditanstalt fur Wiederaufbau (as Agent and
Lender); Commerzbank AG, Hamburg (as Syndicate Agent);
Commerzbank AG (Kiel Branch), Dresdner Bank AG in Hamburg,
Vereins-und Westbank AG, Deutsche Schiffsbank AG,
Norddeutsche Landesbank-Girozentrale, Deutsche Verkehrs-
Bank AG, Banque Internationale a Luxembourg S.A. (as the
Syndicate); and American President Lines, Ltd. (as
Borrower); including exhibits thereto or a description
thereof.***

10.30 Amended and Restated Guarantee dated as of May 19, 1995 by
American President Companies, Ltd. (as Guarantor); in
favor of Kreditanstalt fur Wiederaufbau (as Agent and
Lender); and Commerzbank AG Hamburg (as Syndicate Agent);
Commerzbank AG (Kiel Branch), Dresdner Bank AG in Hamburg,
Vereins-und Westbank AG, Deutsche Schiffsbank AG,
Norddeutsche Landesbank-Girozentrale, Deutsche Verkehrs-
Bank AG, Banque Internationale a Luxembourg S.A. (as the
Syndicate).

10.31 Acknowledgment and Consent of Guarantor dated September 1,
1995 by the company (as Guarantor) in favor of
Kreditanstalt fur Wiederaufbau (as Agent and Lender);
Commerzbank AG, Hamburg (as Syndicate Agent); Commerzbank
AG (Kiel Branch), Dresdner Bank AG in Hamburg, Vereins-und
Westbank AG, Deutsche Schiffsbank AG, Norddeutsche
Landesbank-Girozentrale, Deutsche Verkehrs-Bank AG, Banque
Internationale a Luxembourg S.A. (as the Syndicate).

10.32 Amendment No. 1 to the First Preferred Ship Mortgage dated
September 1, 1995 given by M.V. President Kennedy, Ltd.
(as Shipowner) to Kreditanstalt fur Wiederaufbau (as
Mortgagee).***

10.33 Amendment No. 1 to the Bareboat Charter Party dated
September 1, 1995 by M.V. President Kennedy, Ltd. (as
Shipowner) and American President Lines, Ltd. (as
Charterer).***

10.34 Second Amended and Restated Agreement to Acquire and
Charter dated September 1, 1995 by and among American
President Companies, Ltd. (as Transferor), of M.V.
President Kennedy, Ltd., of M.V. President Adams, Ltd., of
M.V. President Kennedy, Ltd., of M.V. President Kennedy,
Ltd. and of M.V. President Kennedy, Ltd. (Transferees),
Kreditanstalt fur Wiederaufbau (as Agent and Lender);
Commerzbank AG, Hamburg (as Syndicate Agent); Commerzbank
AG (Kiel Branch), Dresdner Bank AG in Hamburg, Vereins-und
Westbank AG, Deutsche Schiffsbank AG, Norddeutsche
Landesbank-Girozentrale, Deutsche Verkehrs-Bank AG, Banque
Internationale a Luxembourg S.A. (as the Syndicate);
including exhibits thereto or a description thereof.***

10.35 Charter Hire Guarantee dated as of May 19, 1995 by
American President Companies, Ltd. (as Guarantor); in
favor of M.V. President Kennedy, Ltd. (as the Obligee).

10.36*Credit Agreement, dated March 25, 1994 among American
President Companies, Ltd., borrower, and Morgan Guaranty
Trust Company of New York, J.P. Morgan Delaware, Bank of
America National Trust and Savings Association, The First
National Bank of Boston, Barclays Bank PLC, ABN AMRO Bank
N.V., The First National Bank of Chicago and Morgan
Guaranty Trust Company of New York, as agent, filed as
Exhibit 10.1 to the company's Form 10-Q (File No. 1-8544),
dated May 20, 1994.

10.37*Amendments Nos. 1 and 2 dated May 10, 1995 and July 12,
1995, respectively, to the Credit Agreement among American
President Companies, Ltd., borrower, and Morgan Guaranty
Trust Company of New York (as agent and participant), Bank
of America National Trust and Savings Association, The
First National Bank of Boston, The Industrial Bank of
Japan, Limited, ABN AMRO Bank N.V. and The First National
Bank of Chicago, filed as Exhibit 10.1 to the company's
Form 10-Q (File No. 1-8544), dated August 4, 1995.

10.38*Deferred Compensation Plan For Directors of the company,
filed as Exhibit 10.49 to the company's Registration
Statement on Form S-l, Registration No. 2-93718, which
became effective on November 1, 1984.**

10.39*Executive SurvivorsO Benefits Plan, dated November 29,
1988, filed as Exhibit 10.4 to the company's Form SE (File
No. 1-8544), dated March 17, 1992.**

10.40*Amendment No. 1 to the Executive SurvivorsO Benefits Plan,
effective December 4, 1992, filed as Exhibit 10.10 to the
company's Form SE (File No. 1-8544), dated March 24,
1993.**

10.41*1988 Deferred Compensation Plan dated November 29, 1988,
filed as Exhibit 10.5 to the company's Form SE (File No. 1-
8544), dated February 17, 1989.**

10.42*Amendment No. 1 to the 1988 Deferred Compensation Plan,
effective January 1, 1992, filed as Exhibit 10.3 to the
company's Form SE (File No. 1-8544), dated March 24,
1993.**

10.43*1992 DirectorsO Stock Option Plan, dated March 17, 1992,
filed as Exhibit 10.06 to the company's Form SE (File No.
1-8544), dated May 5, 1992.**

10.44*Amended and Restated Retirement Plan for the Directors of
American President Companies, Ltd., dated September 15,
1992, filed as Exhibit 10.01 to the company's Form SE
(File No. 1-8544), dated October 20, 1992.**

10.45*American President Companies, Ltd. Retirement Plan, second
amendment and restatement effective January 1, 1993, filed
as Exhibit 10.2 to the company's Form 10-Q (File No. 1-
8544), dated May 17, 1995.**

10.46*First Amendment to the American President Companies, Ltd.
Retirement Plan (Second Amendment and Restatement
Effective January 1, 1993), effective January 1, 1993,
filed as Exhibit 10.1 to the company's Form 10-Q (File No.
1-8544), dated November 1, 1995.**

10.47*1989 Stock Incentive Plan of the company, as amended and
restated effective April 28, 1994, filed with the
company's Proxy Statement (File No. 1-8544) for the Annual
Meeting of Shareholders held on April 28, 1994.**

10.48*American President Companies, Ltd. SMART Plan, second
amendment and restatement effective January 1, 1993, filed
as Exhibit 10.45 to the company's Form 10-K (File No. 1-
8544), dated March 10, 1995.**

10.49*Excess-Benefit Plan of the company, amended and restated
effective December 31, 1994, filed as Exhibit 10.46 to the
company's Form 10-K (File No. 1-8544), dated March 10,
1995.**

10.50*1995 Deferred Compensation Plan of the company, effective
January 1, 1995, filed as Exhibit 10.47 to the company's
Form 10-K (File No. 1-8544), dated March 10, 1995.**

10.51 1995 Supplemental Executive Retirement Plan of the
company, amended and restated effective January 1, 1996.**

10.52*1995 Stock Bonus Plan of the company, effective January 1,
1996, filed with the company's Proxy Statement (File No. 1-
8544) for the Annual Meeting of Shareholders held on May
2, 1995.**

10.53*Employment Agreement between the company and Maryellen B.
Cattani dated April 28, 1994, filed as Exhibit 10.10 to
the company's Form 10-Q (File No. 1-8544), dated May 20,
1994.**

10.54*Employment Agreement between the company and Timothy J.
Rhein dated July 28, 1992, filed as Exhibit 10.1 to the
company's Form 10-Q (File No. 1-8544), dated November 4,
1994.**

10.55*Employment Agreement between the company and Joji Hayashi
dated July 28, 1992, filed as Exhibit 10.2 to the
company's Form 10-Q (File No. 1-8544), dated November 4,
1994.**

10.56*Amendment No. 1 dated September 7, 1995 to the Employment
Agreement as amended, between the company and Joji
Hayashi, filed as Exhibit 10.2 to the company's Form 10-Q
(File No. 1-8544), November 1, 1995.**

10.57*Employment Agreement between the company and James S.
Marston dated July 28, 1992, filed as Exhibit 10.3 to the
company's Form 10-Q (File No. 1-8544), dated November 4,
1994.**

10.58*Employment Agreement between the company and John G.
Burgess dated July 28, 1992, filed as Exhibit 10.4 to the
company's Form 10-Q (File No. 1-8544), dated November 4,
1994.**

10.59*Employment Agreement between the company and Michael Diaz
dated July 28, 1992, filed as Exhibit 10.5 to the
company's Form 10-Q (File No. 1-8544), dated November 4,
1994.**

10.60*Employment Agreement between the company and L. Dale
Crandall dated February 1, 1995, filed as Exhibit 10.3 to
the company's Form 10-Q (File No. 1-8544), May 17, 1995.**

10.61 Agreement between the company and John M. Lillie dated
October 13, 1995.**

10.62*Form of Indemnity Agreements dated March 11, 1988 between
the company and Charles S. Arledge, John H. Barr, J.
Hayashi, Forrest N. Shumway and Barry L. Williams, filed
as Exhibit 10.3 to the company's Form SE (File No. 1-
8544), dated February 17, 1989.**

10.63*Form of Indemnity Agreements dated April 25, 1991 between
the company and F. Warren Hellman and Timothy J. Rhein,
filed as Exhibits 10.3 and 10.5 to the company's Form SE
(File No. 1-8544), dated May 8, 1991.**

10.64*Indemnity Agreement dated October 5, 1993 between the
company and Toni Rembe, filed as Exhibit 10.74 to the
company's Form 10K (File No. 1-8544), dated March 9,
1994.**

10.65*Form of Indemnity Agreement dated April 28, 1994 between
the company and G. Craig Sullivan, filed as Exhibit 10.62
to the company's Form 10-K (File No. 1-8544), dated March
10, 1995.**

10.66*Form of Indemnity Agreement dated June 20, 1994 between
the company and Tully M. Friedman, filed as Exhibit 10.63
to the company's Form 10-K (File No. 1-8544), dated March
10, 1995.**

11.1 Computation of Earnings Per Share.

21.1 Subsidiaries of the company.

23.1 Consent of Independent Public Accountants.

24.1 Powers of Attorney.

27 Financial Data Schedules filed under Article 5 of
Regulation S-X for the year ended December 29, 1995.

* Incorporated by Reference

** Denotes management contract or compensatory plan.

*** Application to be filed with the Securities and Exchange
Commission, pursuant to Exchange Act Rule 24b-2, for
confidential treatment of certain portions of this
exhibit.

Pursuant to Item 601 (b)(4)(iii)(A) of Regulation S-K,
certain instruments defining the rights of holders of the long-
term debt of the company and its consolidated subsidiaries have
not been filed because the amount of securities authorized under
each such instrument does not exceed ten percent of the total
assets of the company and its subsidiaries on a consolidated
basis. A copy of any such instrument will be furnished to the
Commission upon request.

(b) Reports on Form 8-K during the fourth quarter:

No current report on Form 8-K was filed during the quarter
for which this report on Form 10-K is filed.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the registrant has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

AMERICAN PRESIDENT COMPANIES, LTD.
(Registrant)

By /s/ William J. Stuebgen
William J. Stuebgen
Vice President,
Controller and
Chief Accounting Officer
March 14, 1996

Pursuant to the requirements of the Securities and Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.

/s/ Joji Hayashi* March 14, 1996
Joji Hayashi
Chairman of the Board

/s/ Timothy J. Rhein* March 14, 1996
Timothy J. Rhein
President, Chief Executive
Officer and Director

/s/ Charles S. Arledge* March 14, 1996
Charles S. Arledge
Director

/s/ John H. Barr* March 14, 1996
John H. Barr
Director

/s/ Tully M. Friedman* March 14, 1996
Tully M. Friedman
Director

/s/ F. Warren Hellman* March 14, 1996
F. Warren Hellman
Director

/s/ Toni Rembe* March 14, 1996
Toni Rembe
Director

/s/ Forrest N. Shumway* March 14, 1996
Forrest N. Shumway
Director

/s/ G. Craig Sullivan* March 14, 1996
G. Craig Sullivan
Director

/s/ Barry L. Williams* March 14, 1996
Barry L. Williams
Director

*By: /s/ Maryellen B. Cattani March 14, 1996
Maryellen B. Cattani
Attorney-in-fact