SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 Fee Required
For the fiscal year ended December 31, 1993 or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 No Fee Required
For the transition period from to .
Commission file number: 1-8888
AMOCO COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-3353184
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Randolph Drive, Chicago, Illinois 60601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (312) 856-6111
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
8 5/8% Debentures Due 2016 New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days. Yes X No.
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K: X
Number of shares outstanding as of March 22, 1994, was 100 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1993 Annual Report on Form 10-K of Amoco Corporation
Registrant meets the conditions set forth in General Instructions
J(1)(a) and (b) of Form 10-K and is therefore filing this form with
reduced disclosure format.
AMOCO COMPANY
PART I
Items 1. and 2. Business and Properties
Amoco Company, a Delaware corporation (the "Company"), the principal
wholly owned subsidiary of Amoco Corporation, an Indiana corporation
("Amoco"), functions as the holding company for all of Amoco's petroleum
and chemical operations, except Canadian petroleum operations. Amoco has
guaranteed all presently outstanding public debt obligations of Amoco
Company. The principal wholly owned subsidiaries of the Company and the
businesses in which they are engaged are summarized below:
Amoco Production Company . . . Exploration, development and production
of crude oil and natural gas.
Amoco Oil Company . . . . . . Refining, marketing and transporting of
petroleum and related products.
Amoco Chemical Company . . . . Manufacture and sale of chemical
products.
Since the Company's operations are similar to those of Amoco, except
for Canadian petroleum operations and selected other activities, the
information contained in Items 1. and 2. "Business and Properties" of
Amoco Corporation's 1993 Annual Report on Form 10-K is incorporated
herein by reference. Information related to Canadian petroleum
operations is identified separately therein and is not incorporated
herein.
Item 3. Legal Proceedings
The information required by this item is incorporated by reference to
Item 3 of Amoco Corporation's 1993 Annual Report on Form 10-K.
Item 4. Submission of Matters to a Vote of Security Holders
Not required.
2
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PART II
Item 5. Market for Registrant's Common Stock and Related Stockholder
Matters
All of the common stock of the registrant is owned by its parent
company; therefore, there is no market for such stock.
Item 6. Selected Financial Data
Not required.
Item 7. Management's Narrative Analysis of Results of Operations
Results of Operations
1993 Compared With 1992
The Company earned $1,803 million in 1993 compared with $524 million
in 1992. Excluding the cumulative effects of adoption in 1992 of
Statement of Financial Accounting Standards ("SFAS") No. 106, "Accounting
for Postretirement Benefits Other Than Pensions," and SFAS No. 109,
"Accounting for Income Taxes," 1992 earnings were $1,226 million.
Earnings in 1993 were adversely affected by charges of $170 million
associated with the writedown of Congo exploration and production
operations to current recoverable value and additional deferred taxes of
$53 million due to the effect of a tax rate change resulting from
enactment of the Omnibus Budget Reconciliation Act of 1993. Partly
offsetting were prior-year tax benefits of $107 million and gains from
drawdown of inventories valued under the last-in, first-out ("LIFO")
method of approximately $50 million. Included in 1992 results were
charges of $546 million as part of a strategic reassessment of business
operations. Favorably impacting 1992 earnings were $90 million related
to natural gas contract settlements in Sharjah and $62 million primarily
associated with revised estimates of tax obligations.
Adjusting both years for special items and accounting changes, 1993
earnings were $1,869 million compared with 1992 earnings of $1,620
million. The increase resulted from higher refined product margins in
refining, marketing and transportation operations and improved chemical
results. Also contributing to the improvement were higher U.S. natural
gas prices and volumes and lower worldwide exploration and operating
expenses. Partly offsetting were lower crude oil prices and volumes.
Sales and other operating revenues totaled $22.9 billion for 1993
compared with $22.8 billion for 1992. Crude oil revenues increased 6
percent reflecting higher U.S. sales volumes, partly offset by lower
prices worldwide. Natural gas revenues were higher as a result of
increased U.S. prices and volumes. Included in 1992 were revenues
associated with natural gas contract settlements. Refined product
revenues declined 2 percent primarily due to lower prices. Other income
was higher in 1993 compared with last year as a result of gains on asset
dispositions.
3
Purchases of crude oil, petroleum products and merchandise of $11.8
billion for 1993 were 3 percent above the 1992 level of $11.4 billion,
resulting from higher crude oil purchase volumes in the United States.
Partly offsetting were lower crude oil prices. Exploration expenses for
1993 were 18 percent below 1992, due to lower dry hole costs worldwide.
Selling and administrative expenses also declined 18 percent compared
with prior year, mainly due to the absence of 1992 restructuring charges.
Depreciation, depletion, amortization, and retirements and abandonments
for 1993 were 8 percent below 1992 reflecting property dispositions.
Interest expense increased in 1993 over the prior year, primarily
reflecting the absence of benefits associated with revised estimates of
tax obligations.
Liquidity and Capital Resources
Cash flows from operating activities generated $3.5 billion in 1993,
compared with $2.8 billion in 1992.
The debt to debt-plus-equity ratio decreased to 16.8 percent in
1993, compared with 18.1 percent in 1992. The Company believes its
strong financial position will permit the financing of business needs and
opportunities in an orderly manner.
Working capital totaled $407 million at December 31, 1993, down from
$695 million at December 31, 1992. The Company's current ratio decreased
to 1.10 to 1 at year-end 1993 from 1.18 to 1 at year-end 1992. As a
matter of policy, Amoco Company practices asset and liability management
techniques that are designed to minimize its investment in non-cash
working capital. This does not impair operational capability or
flexibility since the Company has ready access to both short-term and
long-term debt markets.
Amoco Company's short-term liquidity position is better than the
reported figures indicate since the inventory component of working
capital is valued in part under the LIFO method, whereas other elements
of working capital are reported at amounts more indicative of their
current values. If inventories were valued at current replacement
costs, the level of working capital would rise and an increase in the
current ratio would result.
Amoco Corporation and Amoco Company guarantee the notes and
debentures of Amoco Canada Petroleum Company Ltd., except for the 7 3/8%
Subordinated Exchangeable Debentures due 2013.
4
The following table summarizes selected liquidity information for
the last three years as of December 31:
1993 1992 1993
Debt as a percent of debt-plus-equity . . 16.8 18.1 17.4
Current ratio . . . . . . . . . . . . . . 1.10 1.18 1.05
Ratio of earnings to fixed charges* . . . 13.2 8.3 9.2
* Earnings consist of income before income taxes and fixed charges; fixed
charges include interest on indebtedness, rental expense representative
of an interest factor, and adjustments for certain companies accounted
for by the equity method.
4
Item 8. Financial Statements and Supplemental Information
Index to Financial Statements and Supplemental Information
Page
Financial Statements:
Basis of Financial Statement Preparation . . . . . . . . 5
Condensed Consolidated Statement of Income . . . . . . . 6
Condensed Consolidated Statement of Financial Position . 7
Condensed Consolidated Statement of Cash Flows . . . . . 8
Supplemental Information:
Supplemental Oil and Gas Exploration and Production
Activities . . . . . . . . . . . . . . . . . . . . . . 9
Quarterly Financial Data . . . . . . . . . . . . . . . . 9
Separate financial statements of 50 percent or less owned companies
accounted for by the equity method have been omitted since, if considered
in the aggregate, they would not constitute a significant subsidiary.
Financial Statements
Basis of Financial Statement Preparation
The Company is a wholly owned subsidiary of Amoco and its presently
outstanding public debt securities are guaranteed by Amoco. Pursuant to
Securities and Exchange Commission Staff Accounting Bulletin No. 53,
summarized financial data of the Company appear in a note to Amoco's 1993
audited consolidated financial statements. Such financial statements,
together with the Report of Independent Accountants thereon of Amoco's
1993 Annual Report on Form 10-K and are incorporated herein by reference.
The unaudited condensed financial statements of the Company
contained herein do not include all information and footnotes necessary
for a complete presentation of results of operations and financial
position in conformity with generally accepted accounting principles and
should be read in conjunction with Amoco's audited consolidated financial
statements.
5
Effective January 1, 1992, the Company adopted SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
and SFAS No. 109, "Accounting for Income Taxes." The cumulative effect of
adoption relating to years prior to 1992, was a non-cash charge of $702
million. This represents after-tax charges of $749 million for the
adoption of SFAS No. 106 partially offset by an after-tax credit of $47
million for the adoption of SFAS No. 109. In addition, the current-year
effect on net income of adopting these standards was a charge of $51
million related to the adoption of SFAS No. 106 and a benefit of $62
million associated with the adoption of SFAS No. 109. The Company had
adopted SFAS No. 96, "Accounting for Income Taxes," effective January 1,
1991. The cumulative effect of that accounting change was to decrease
deferred tax liabilities and increase 1991 net income by $1,143 million.
5
AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31,
1993 1992 1991
(millions of dollars)
Revenues:
Sales and other operating revenues . . . $22,885 $22,818 $22,413
Consumer excise taxes . . . . . . . . . . 2,812 2,722 2,632
Other income . . . . . . . . . . . . . . 233 158 262
Total revenues . . . . . . . . . . . . 25,930 25,698 25,307
Costs and Expenses:
Purchased crude oil, petroleum products
and merchandise . . . . . . . . . . . 11,761 11,407 10,872
Operating expenses . . . . . . . . . . . 4,075 4,117 4,015
Petroleum exploration expenses, including
exploratory dry holes . . . . . . . . 482 590 717
Selling and administrative expenses . . . 1,632 2,002 1,972
Taxes other than income taxes . . . . . . 3,566 3,663 3,499
Depreciation, depletion, amortization, and
retirements and abandonments . . . . . 1,813 1,968 1,845
Interest expense . . . . . . . . . . . . 174 128 294
Total costs and expenses . . . . . . . 23,503 23,875 23,214
Income before income taxes . . . . . . . . 2,427 1,823 2,093
Income taxes . . . . . . . . . . . . . . . 624 597 866
Income before the cumulative effects of
accounting changes . . . . . . . . . . . 1,803 1,226 1,227
Cumulative effects of accounting changes . --- (702) 1,143
Net income . . . . . . . . . . . . . . . . $ 1,803 $ 524 $ 2,370
6
AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
December 31,
1993 1992
ASSETS (millions of dollars)
Current Assets:
Cash and marketable securities . . . . . . . . . . $ 582 $ 975
Accounts and notes receivable . . . . . . . . . . . 2,443 2,257
Inventories . . . . . . . . . . . . . . . . . . . . 947 867
Prepaid expenses and income taxes . . . . . . . . . 411 545
Total current assets . . . . . . . . . . . . . . 4,383 4,644
Investments And Other Assets . . . . . . . . . . . . 1,027 1,172
Properties - Net (The successful efforts method of
accounting is followed for costs incurred in oil and
gas producing activities) . . . . . . . . . . . . . . 18,103 17,829
Total assets . . . . . . . . . . . . . . . . . . . $23,513 $23,645
7
December 31,
1993 1992
(millions of dollars)
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current portion of long-term obligations . . . . . $ 51 $ 33
Short-term obligations . . . . . . . . . . . . . . 652 1
Accounts payable . . . . . . . . . . . . . . . . . 2,056 2,334
Accrued liabilities . . . . . . . . . . . . . . . . 722 797
Taxes payable (including income taxes) . . . . . . 495 784
Total current liabilities . . . . . . . . . . . . 3,976 3,949
Long-Term Obligations:
Debt . . . . . . . . . . . . . . . . . . . . . . . 1,964 2,773
Capitalized leases . . . . . . . . . . . . . . . . 3 38
1,967 2,811
Deferred Credits and Other Non-Current Liabilities:
Income taxes . . . . . . . . . . . . . . . . . . . 2,372 2,199
Other . . . . . . . . . . . . . . . . . . . . . . . 2,069 2,058
4,441 4,257
Shareholder's Equity . . . . . . . . . . . . . . . . 13,129 12,628
Total liabilities and shareholder's equity . . . . $23,513 $23,645
Annual maturities of long-term debt during the next five years, including
the portion classified as current, are $43 million in 1994, $135 million
in 1995, $246 million in 1996, $202 million in 1997 and $263 million in
1998.
7
AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31,
1993 1992 1991
(millions of dollars)
Cash Flows from Operating Activities:
Net income . . . . . . . . . . . . . . . . $1,803 $ 524 $2,370
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, amortization, and
retirements and abandonments . . . . . 1,813 1,968 1,845
(Increase) decrease in receivables . . . (131) 402 536
Decrease in payables and accrued
liabilities . . . . . . . . . . . . . . (573) (957) (475)
Other . . . . . . . . . . . . . . . . . . 555 152 (207)
Cumulative effects of accounting changes --- 702 (1,143)
Net cash provided by operating activities 3,467 2,791 2,926
Cash Flows from Investing Activities:
Capital expenditures . . . . . . . . . . . (2,472) (2,113) (2,716)
Proceeds from dispositions of property and
other assets . . . . . . . . . . . . . . 217 248 671
Other . . . . . . . . . . . . . . . . . . (87) (2) (116)
Net cash used in investing activities . . (2,342) (1,867) (2,161)
Cash Flows from Financing Activities:
New long-term obligations . . . . . . . . 473 438 577
Repayment of long-term obligations . . . . (1,358) (359) (497)
Distributions to Amoco Corporation . . . . (1,284) (1,258) (1,620)
Increase (decrease) in short-term
obligations . . . . . . . . . . . . . . 651 (52) (98)
Net cash used in financing activities . . (1,518) (1,231) (1,638)
Decrease in Cash and Marketable Securities (393) (307) (873)
Cash and Marketable Securities--Beginning of
Year . . . . . . . . . . . . . . . . . 975 1,282 2,155
Cash and Marketable Securities--End of Year $ 582 $ 975 $1,282
8
Supplemental Information
1. Supplemental Oil and Gas Exploration and Production Activities
The supplemental information about oil and gas exploration and
production activities for the Company is essentially the same as reported
by Amoco, if Canadian exploration and production information is excluded.
Therefore, the information with respect to supplemental oil and gas
exploration and production activities is incorporated by reference to
Amoco Corporation's 1993 Annual Report on Form 10-K. Information related
to Canadian petroleum operations is identified separately therein and is
not incorporated herein.
2. Quarterly Financial Data
Summarized quarterly financial data for the years ended December
31, 1993 and 1992 are as follows:
Revenues Operating Profit Net Income*
1993 1992 1993 1992 1993 1992
First . . . . . $6,296 $5,697 $ 430 $ 357 $ 277 $ 205
Second . . . . 6,578 6,822 738 27 509 (169)
Third . . . . . 6,413 6,637 659 666 486 543
Fourth . . . . 6,643 6,542 768 710 531 647
* Net income in the first quarter of 1993 included charges of $170
million related to the writedown of Congo exploration and production
operations to current recoverable value and tax benefits of $56 million
resulting from disposition of certain operations. First-quarter 1992 net
income excluded charges of $702 million associated with the cumulative
effects of accounting changes. Results for the second quarter of 1992
included charges of $546 million representing anticipated losses on asset
dispositions and the cost of restructuring and work force reductions.
Also included was a $90 million benefit related to the settlement of
natural gas contracts in Sharjah.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
9
PART III
Item 10. Directors and Executive Officers of the Registrant
Not required.
Item 11. Executive Compensation
Not required.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Not required.
Item 13. Certain Relationships and Related Transactions
Not required.
______________
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1 and 2. The financial statements, supplemental financial
information and financial statement schedules, together
with the report thereon of Price Waterhouse dated
February 22, 1994, appearing in Amoco Corporation's
1993 Annual Report on Form-10-K are incorporated by
reference in Item 8 of this Form 10-K. Information
related to Canadian petroleum operations is identified
separately therein and is not incorporated herein.
With the exception of the aforementioned information
and the information incorporated in Items 1, 2, and 3
hereof, Amoco Corporation's 1993 Annual Report on Form
10-K is not deemed to be filed as part of this report.
3. Exhibits - See attached Index to Exhibits on page 13.
(b) Reports on Form 8-K.
A current report on Form 8-K dated December 1, 1993, was
filed related to a jury verdict against Amoco Production
Company, a subsidiary of Amoco Company and Amoco
Corporation, in RUBICON PETROLEUM INC. VS. AMOCO PRODUCTION
COMPANY & AMOCO CORPORATION. In that case Rubicon alleged
that in 1990 it entered into an oral contract with Amoco
Production to purchase two Wyoming oil properties for $18
million. Rubicon sued for breach of contract, violation of
10
the Texas Consumer Protection Statute and various other
torts. The Matagorda County jury entered two alternative
actual damage awards of $125 million and $45 million,
respectively, a punitive damage award of $250 million, and
attorneys' fees of one-third of Plaintiff's recovery. No
judgment has yet been entered. See Item 3. Legal Proceedings.
A current report on Form 8-K dated December 10, 1993,
was filed related to jury verdicts in favor of Amoco Chemical
Company, a subsidiary of Amoco Company and Amoco Corporation,
against certain underwriters at Lloyd's of London and various
other British and European insurance carriers, in AMOCO
CHEMICAL COMPANY et al, vs. CERTAIN UNDERWRITERS AT LLOYD'S
OF LONDON, et al. A current report on Form 8-K dated
February 8, 1994, was filed related to a judgment entered by
the Superior Court of the State of California, County of Los
Angeles, in favor of Amoco Chemical Company and Amoco
Reinforced Plastics Company, subsidiaries of Amoco Company
and Amoco Corporation. See Item 3. Legal Proceedings.
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, and State of Illinois, on the 22nd
day of March, 1994.
Amoco Company
(Registrant)
F. S. Addy
F. S. Addy
(President)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated on March 22, 1994.
Signatures Titles
F. S. Addy President and Director
F. S. Addy (Principal Executive Officer)
W. R. Hutchinson Vice President, Treasurer, and Director
W. R. Hutchinson (Principal Financial Officer)
John L. Carl Vice President and Controller
John L. Carl (Principal Accounting Officer)
Daniel B. Pinkert Vice President, Secretary, and Director
Daniel B. Pinkert
12
AMOCO COMPANY
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
3(a) The Certificate of Incorporation of the registrant
is incorporated herein by reference to Exhibit 3(a)
to the registrant's Annual Report on Form 10-K for
the year ended December 31, 1989. --
3(b) By-laws of the registrant are incorporated herein
by reference to Exhibit 3(b) to the registrant's
Annual Report on Form 10-K for the year ended
December 31, 1989. --
4 The registrant will provide to the Securities and
Exchange Commission upon request copies of
instruments defining the rights of holders of long-
term debt of the registrant and its consolidated
subsidiaries. --
9 None. --
10 None. --
11 None required. --
12 Statement Setting Forth Computation of Ratio of
Earnings to Fixed Charges for the five years ended
December 31, 1993.
13 Amoco Corporation's 1993 Annual Report on Form 10-K
is incorporated herein by reference. --
16 None. --
18 None. --
19 None. --
21 None required. --
23 None required. --
24 None. --
28 None. --
13