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, 1994 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, 1995, was 100 shares.
DOCUMENTS INCORPORATED BY REFERENCE
1994 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 substantially 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, and natural gas
liquids; and marketing of 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 1994 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 1994 Annual Report on Form 10-K.
Item 4. Submission of Matters to a Vote of Security Holders
Not required.
2
_________________
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
1994 Compared With 1993
The Company earned $1,878 million in 1994 compared with $1,803
million in 1993. Results for 1994 benefited from settlements of crude
oil excise taxes ("COET") of $270 million, a gain of $45 million related
to the disposition of certain European oil and gas properties and tax
adjustments relating to prior years totaling $63 million. Adversely
affecting 1994 earnings were after-tax charges of $60 million pertaining
to provisions for future environmental remediation expenditures relating
to past operations, and restructuring charges of $149 million. Of this
latter amount, $51 million related to costs directly associated with
severances of employees expected to occur by year-end 1995. The
remaining $98 million was attributable to various facility closings and
asset dispositions. 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.
Adjusting both years for special items and accounting changes, 1994
earnings were $1,709 million compared with 1993 earnings of $1,869
million. The decline in earnings primarily reflects the transferring of
95 percent ownership of certain European chemical operations to Amoco
Corporation, lower refined product margins in refining, marketing and
transportation operations, and lower exploration and production earnings
mainly as a result of lower energy prices. Partly offsetting were
improved chemical results, attributable to higher margins and volumes in
major product lines.
Sales and other operating revenues totaled $23.6 billion for 1994,
slightly higher than $22.9 billion for 1993. Chemical revenues improved
23 percent reflecting higher sales for major product lines. Natural gas
revenues were 16 percent higher as a result of increased worldwide sales
volumes. Partly offsetting were decreased crude oil revenues reflecting
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lower prices worldwide. Other income was higher in 1994 compared with
last year primarily as a result of the favorable COET settlement.
Purchases of crude oil, petroleum products and merchandise of $12.3
billion for 1994 were 5 percent above the 1993 level of $11.8 billion.
Operating expenses were 3 percent higher in 1994. Increased
chemical manufacturing costs reflecting the fourth-quarter 1993
acquisition of Phillips Fibers Corporation, and second-quarter 1994
restructuring charges of $150 million, were partly offset by the absence
of charges in 1993 associated with the writedown of Congo exploration and
production operations to current recoverable value. Exploration expenses
for 1994 were 7 percent above 1993, due to higher dry hole expenses of
$23 million and higher geological and geophysical costs overseas of $12
million. Selling and administrative expenses were up 16 percent compared
with the prior year, mainly due to $79 million in 1994 restructuring
charges and $46 million of unfavorable foreign currency effects.
Interest expense increased 36 percent primarily related to interest on
intercompany notes from affiliates.
Liquidity and Capital Resources
Cash flows from operating activities generated $4 billion in 1994,
compared with $3.5 billion in 1993.
The debt to debt-plus-equity ratio on outstanding public obligations
increased to 18.8 percent in 1994, compared with 16.8 percent in 1993.
The Company believes its strong financial position will permit the
financing of business needs and opportunities in an orderly manner.
Working capital totaled $1,257 million at December 31, 1994, up from
$407 million at December 31, 1993. The Company's current ratio increased
to 1.30 to 1 at year-end 1994 from 1.10 to 1 at year-end 1993. 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 the Company guarantee the outstanding public
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:
1994 1993 1992
Debt as a percent of debt-plus-equity . . 18.8 16.8 18.1
Current ratio . . . . . . . . . . . . . . 1.30 1.10 1.18
Ratio of earnings to fixed charges* . . . 20.4 13.2 8.3
_____________
* 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.
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 . . . . . . . . 7
Condensed Consolidated Statement of Financial Position . . 8
Condensed Consolidated Statement of Cash Flows . . . . . . 9
Supplemental Information:
Supplemental Oil and Gas Exploration and Production
Activities . . . . . . . . . . . . . . . . . . . . . . . 10
Quarterly Financial Data . . . . . . . . . . . . . . . . . 10
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
5
Securities and Exchange Commission Staff Accounting Bulletin No. 53,
summarized financial data of the Company appear in a note to Amoco's 1994
audited consolidated financial statements. Such financial statements,
together with the Report of Independent Accountants thereon of Amoco's
1994 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.
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 effect on
1993 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.
6
AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31,
1994 1993 1992
(millions of dollars)
Revenues:
Sales and other operating revenues . . . . $23,619 $22,885 $22,818
Consumer excise taxes. . . . . . . . . . . 3,409 2,812 2,722
Other income . . . . . . . . . . . . . . . 813 233 158
Total revenues . . . . . . . . . . . . . 27,841 25,930 25,698
Costs and Expenses:
Purchased crude oil, natural gas,
petroleum products and merchandise . . . 12,330 11,761 11,407
Operating expenses . . . . . . . . . . . . 4,190 4,075 4,117
Petroleum exploration expenses, including
exploratory dry holes. . . . . . . . . . 514 482 590
Selling and administrative expenses. . . . 1,901 1,632 2,002
Taxes other than income taxes. . . . . . . 4,087 3,566 3,663
Depreciation, depletion, amortization, and
retirements and abandonments . . . . . . 1,894 1,813 1,968
Interest expense . . . . . . . . . . . . . 237 174 128
Total costs and expenses . . . . . . . . 25,153 23,503 23,875
Income before income taxes . . . . . . . . . 2,688 2,427 1,823
Income taxes . . . . . . . . . . . . . . . . 810 624 597
Income before the cumulative effects of
accounting changes . . . . . . . . . . . . 1,878 1,803 1,226
Cumulative effects of accounting changes . . -- -- (702)
Net income . . . . . . . . . . . . . . . . . $ 1,878 $ 1,803 $ 524
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AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
December 31,
1994 1993
(millions of
ASSETS dollars)
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 134 $ 100
Marketable securities--at cost
which approximates fair value. . . . . . . . . . . 1,104 482
Accounts and notes receivable (less
allowance of $19 at December 31, 1994,
and $62 at December 31, 1993). . . . . . . . . . . 2,763 2,443
Inventories. . . . . . . . . . . . . . . . . . . . . 836 947
Prepaid expenses and income taxes. . . . . . . . . . 562 411
Total current assets . . . . . . . . . . . . . . . 5,399 4,383
Investments And Other Assets . . . . . . . . . . . . . 1,085 1,027
Properties --at cost, less accumulated depreciation
depletion and amortization of $21,882 at
December 31, 1994, and $20,589 at December 31, 1993
(The successful efforts method of accounting is
followed for costs incurred in oil and gas producing
activities). . . . . . . . . . . . . . . . . . . . . 18,065 18,103
Total assets . . . . . . . . . . . . . . . . . . . . $24,549 $23,513
8
December 31,
1994 1993
(millions of
dollars)
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current portion of long-term obligations . . . . . . $ 24 $ 51
Short-term obligations . . . . . . . . . . . . . . . 112 652
Accounts payable . . . . . . . . . . . . . . . . . . 2,217 2,056
Accrued liabilities. . . . . . . . . . . . . . . . . 1,124 722
Taxes payable (including income taxes) . . . . . . . 665 495
Total current liabilities. . . . . . . . . . . . . 4,142 3,976
Long-Term Debt:
Affiliates . . . . . . . . . . . . . . . . . . . . . 4,104 --
Other debt . . . . . . . . . . . . . . . . . . . . . 2,086 1,967
6,190 1,967
Deferred Credits and Other Non-Current Liabilities:
Income taxes . . . . . . . . . . . . . . . . . . . . 2,413 2,372
Other. . . . . . . . . . . . . . . . . . . . . . . . 2,171 2,069
4,584 4,441
Minority interest. . . . . . . . . . . . . . . . . . . 5 --
Shareholder's Equity . . . . . . . . . . . . . . . . . 9,628 13,129
Total liabilities and shareholder's equity . . . . . $24,549 $23,513
Annual maturities of long-term debt during the next five years, including
the portion classified as current, are $24 million in 1995, $658 million
in 1996, $187 million in 1997, $247 million in 1998 and $134 million in
1999.
8
AMOCO COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31,
1994 1993 1992
(millions of dollars)
Cash Flows from Operating Activities:
Net income . . . . . . . . . . . . . . . . . $ 1,878 $ 1,803 $ 524
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, amortization, and
retirements and abandonments. . . . . . . 1,894 1,813 1,968
(Increase) decrease in receivables. . . . . (361) (131) 402
Increase (decrease) in payables and accrued
liabilities . . . . . . . . . . . . . . . 553 (573) (957)
Other . . . . . . . . . . . . . . . . . . . 44 555 152
Cumulative effects of accounting changes. . -- -- 702
Net cash provided by operating activities. . 4,008 3,467 2,791
Cash Flows from Investing Activities:
Capital expenditures . . . . . . . . . . . . (2,131) (2,472) (2,113)
Proceeds from dispositions of property and
other assets . . . . . . . . . . . . . . . 316 217 248
Other. . . . . . . . . . . . . . . . . . . . (145) (87) (2)
Net cash used in investing activities . . . (1,960) (2,342) (1,867)
Cash Flows from Financing Activities:
New long-term obligations. . . . . . . . . . 118 473 438
Repayment of long-term obligations . . . . . (133) (1,358) (359)
Distributions to Amoco Corporation . . . . . (837) (1,284) (1,258)
Increase (decrease) in short-term
obligations . . . . . . . . . . . . . . . (540) 651 (52)
Net cash used in financing activities . . . (1,392) (1,518) (1,231)
Increase (decrease) in Cash and Marketable
Securities. . . . . . . . . . . . . . . . . 656 (393) (307)
Cash and Marketable Securities--Beginning of
Year. . . . . . . . . . . . . . . . . . . . 582 975 1,282
Cash and Marketable Securities--End of Year . $ 1,238 $ 582 $ 975
9
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 1994 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, 1994 and 1993 are as follows:
Revenues Operating Profit Net Income*
1994 1993 1994 1993 1994 1993
First . . . . . . . . . . $6,136 $6,296 $ 509 $ 430 $ 377 $ 277
Second. . . . . . . . . . 7,397 6,578 596 738 561 509
Third . . . . . . . . . . 7,204 6,413 711 659 488 486
Fourth. . . . . . . . . . 7,104 6,643 654 768 452 531
* Earnings for the second quarter of 1994 included benefits attributable
to the COET settlement of $270 million, and charges related to
restructuring of $149 million. 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.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
10
________________
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 schedule, together
with the report thereon of Price Waterhouse dated
February 28, 1995, appearing in Amoco Corporation's 1994
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 1994 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.
No reports on Form 8-K were filed during the quarter ended December
31, 1994.
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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 21st
day of March, 1995.
Amoco Company
(Registrant)
John L Carl
John L. Carl
(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 21, 1995.
Signatures Titles
John L. Carl President and Director
John L. Carl (Principal Executive Officer)
W. R. Hutchinson Vice President, Treasurer, and
W. R. Hutchinson Director
(Principal Financial Officer)
J. R. Reid Vice President and Controller
J. R. Reid (Principal Accounting Officer)
Daniel B. Pinkert Vice President, Secretary, and Director
Daniel B. Pinkert
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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, 1994.
13 Amoco Corporation's 1994 Annual Report on Form 10-K
is incorporated herein by reference as described
in this 1994 Form 10-K. --
16 None. --
18 None. --
19 None. --
21 None required. --
23 None required. --
24 None. --
27 Financial Data Schedule for the year ended
December 31, 1994.
28 None. --
13