-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, P0NuYBW8hqZB9HZZB204YT01xkiaFpejQQ1DsXJAxngKkbzWuhG5f858LDY7rsps lGVRhT64AEhlX1FkRl5vCw== 0000093397-95-000005.txt : 19950414 0000093397-95-000005.hdr.sgml : 19950406 ACCESSION NUMBER: 0000093397-95-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950405 ITEM INFORMATION: Other events FILED AS OF DATE: 19950405 SROS: MSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMOCO CORP CENTRAL INDEX KEY: 0000093397 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 361812780 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00170 FILM NUMBER: 95527101 BUSINESS ADDRESS: STREET 1: 200 E RANDOLPH DR STREET 2: MAIL CODE 3107A CITY: CHICAGO STATE: IL ZIP: 60601 BUSINESS PHONE: 3128566111 FORMER COMPANY: FORMER CONFORMED NAME: STANDARD OIL CO /IN/ DATE OF NAME CHANGE: 19850425 8-K 1 AMOCO CORPORATION 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) April 5, 1995 AMOCO CORPORATION (Exact name of registrant as specified in its charter) Indiana 1-170-2 36-1812780 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) 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 (No Change) (Former name or former address, if changed since last report). 1 INFORMATION TO BE INCLUDED IN THE REPORT Item 5. Other Events Shown below are the Financial Statements and Supplemental Information (Item 8) of Amoco Corporation's ("Amoco") Annual Report on Form 10-K for the year ended December 31, 1994, including summarized financial data for Amoco Argentina Oil Company (the "Company") in Note 22. The Company is a wholly-owned subsidiary of Amoco International Petroleum Company, which is an indirect wholly-owned subsidiary of Amoco. Item 7. Financial Statements and Exhibits Sequentially Exhibit Numbered Number Page 23 Consent of Independent Accountants 2 Financial Statements and Supplemental Information Index to Financial Statements and Supplemental Information Page Report of Independent Accountants . . . . . . . . . . . . . . . . . . 4 Consolidated Financial Statements: Consolidated Statement of Income . . . . . . . . . . . . . . . . . 5 Consolidated Statement of Financial Position . . . . . . . . . . . 6 Consolidated Statement of Shareholders' Equity . . . . . . . . . . 7 Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . 8 Notes to Consolidated Financial Statements . . . . . . . . . . . . 9 Financial Statement Schedule: Valuation and Qualifying Accounts (Schedule VIII) . . . . . . . 47 Supplemental Information: Quarterly Results and Stock Market Data . . . . . . . . . . . . . 36 Oil and Gas Exploration and Production Activities . . . . . . . . 37 Separate financial statements of subsidiary companies not consolidated, and 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. 3 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Amoco Corporation In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Amoco Corporation and its subsidiaries at December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Amoco Corporation's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. In 1992, Amoco Corporation changed its method of accounting for income taxes and for postretirement benefits other than pensions, as discussed in Notes 15 and 19, respectively, to the financial statements. PRICE WATERHOUSE LLP Chicago, Illinois February 28, 1995 4 AMOCO CORPORATION AND SUBSIDIARIES _________________________ CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31 1994 1993 1992 (millions of dollars, except per-share amounts) Revenues: Sales and other operating revenues . . . . . . $ 26,048 $25,336 $25,280 Consumer excise taxes . . . . . . . . . . . . . 3,409 2,824 2,738 Other income . . . . . . . . . . . . . . . . . 905 457 201 Total revenues . . . . . . . . . . . . . . . 30,362 28,617 28,219 Costs and expenses: Purchased crude oil, natural gas, petroleum products and merchandise . . . . . . . . . . . 13,558 12,878 12,495 Operating expenses . . . . . . . . . . . . . . 4,743 4,688 5,309 Petroleum exploration expenses, including exploratory dry holes . . . . . . . . . . . . 633 529 662 Selling and administrative expenses . . . . . . 2,227 1,849 2,319 Taxes other than income taxes . . . . . . . . . 4,153 3,648 3,744 Depreciation, depletion, amortization, and retirements and abandonments . . . . . . . . . 2,239 2,193 2,440 Interest expense . . . . . . . . . . . . . . . 318 325 247 Total costs and expenses . . . . . . . . . . 27,871 26,110 27,216 Income before income taxes . . . . . . . . . . 2,491 2,507 1,003 Income taxes . . . . . . . . . . . . . . . . . 702 687 153 Income before the cumulative effects of accounting changes . . . . . . . . . . . . . . 1,789 1,820 850 Cumulative effects of accounting changes . . . -- -- (924) Net income (loss) . . . . . . . . . . . . . . $ 1,789 $ 1,820 $ (74) Income per share before the cumulative effects of accounting changes . . . . . . . . . . . . $ 3.60 $ 3.66 $ 1.71 Cumulative effects of accounting changes . . . -- -- (1.86) Net income (loss) per share . . . . . . . . . . $ 3.60 $ 3.66 $ (.15)
(The accompanying notes are an integral part of these statements.) 5 AMOCO CORPORATION AND SUBSIDIARIES _____________________ CONSOLIDATED STATEMENT OF FINANCIAL POSITION
December 31 1994 1993 (millions of dollars) ASSETS Current Assets: Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 166 $ 103 Marketable securities--at cost (all corporate, except $355 on December 31, 1994, and $221 on December 31, 1993, which represent state and municipal securities) . . . . . . . . . . . . . . . . . . . . 1,623 1,114 Accounts and notes receivable (less allowances of $23 on December 31, 1994, and $65 on December 31, 1993) . . . . . . . . . . . . . . . . . . . . . . . 3,180 3,196 Inventories . . . . . . . . . . . . . . . . . . . . 1,042 1,110 Prepaid expenses and income taxes . . . . . . . . . 631 571 6,642 6,094 Investments and other assets: Investments and related advances . . . . . . . . . . 470 318 Long-term receivables and other assets . . . . . . . 661 705 1,131 1,023 Properties--at cost, less accumulated depreciation, depletion and amortization of $24,906 on December 31, 1994, and $23,204 on December 31, 1993 . . . . . . . 21,543 21,369 $ 29,316 $28,486 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term obligations . . . . . . $ 24 $ 53 Short-term obligations . . . . . . . . . . . . . . . 224 1,007 Accounts payable . . . . . . . . . . . . . . . . . . 2,759 2,473 Accrued liabilities . . . . . . . . . . . . . . . . 1,162 974 Taxes payable (including income taxes) . . . . . . . 855 836 5,024 5,343 Long-term debt: Debt . . . . . . . . . . . . . . . . . . . . . . . . 4,387 4,037 Deferred credits and other non-current liabilities: Income taxes . . . . . . . . . . . . . . . . . . . . 2,961 2,995 Other . . . . . . . . . . . . . . . . . . . . . . . 2,547 2,425 5,508 5,420 Minority interest . . . . . . . . . . . . . . . . . . 15 21 Shareholders' equity: Common stock (authorized 800,000,000 shares; issued and outstanding as of December 31, 1994--496,393,067 shares; December 31, 1993--496,401,099 shares) . . 2,166 2,147 Earnings retained and invested in the business . . . 12,223 11,557 Foreign currency translation adjustment . . . . . . (7) (39) Total Shareholders' Equity . . . . . . . . . . . . . 14,382 13,665 $ 29,316 $28,486
(The successful efforts method of accounting is followed for costs incurred in oil and gas producing activities.) (The accompanying notes are an integral part of these statements.) 6 AMOCO CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Earnings Retained and Invested Foreign in Currency Common the Translation Stock Business Adjustment Total (millions of dollars, except per-share amounts) Balance on December 31, 1991 . . . $ 2,115 $ 12,035 $ 6 $14,156 Net loss . . . . . . . . . . (74) (74) Cash dividends of $2.20 per (1,091) (1,091) share . . . . . . . . . . . . Foreign currency translation adjustment . . . . . . . . . (27) (27) Issuances of common stock 11 (15) (4) (net) . . . . . . . . . . . . Balance on December 31, 1992 . . . 2,126 10,855 (21) 12,960 Net income . . . . . . . . . 1,820 1,820 Cash dividends of $2.20 per (1,092) (1,092) share . . . . . . . . . . . . Foreign currency translation adjustment . . . . . . . . . (18) (18) Issuances of common stock 21 (26) (5) (net) . . . . . . . . . . . . Balance on December 31, 1993 . . . 2,147 11,557 (39) 13,665 Net income . . . . . . . . . 1,789 1,789 Cash dividends of $2.20 per (1,092) (1,092) share . . . . . . . . . . . . Foreign currency translation adjustment . . . . . . . . . 32 32 Issuances of common stock 19 (31) (12) (net) . . . . . . . . . . . . Balance on December 31, 1994 . . . $ 2,166 $ 12,223 $ (7) $14,382
(The accompanying notes are an integral part of these statements.) 7 AMOCO CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31 1994 1993 1992 (millions of dollars) Cash flows from operating activities: Net income (loss) . . . . . . . . . . . . . $ 1,789 $ 1,820 $ (74) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion, amortization, and retirements and abandonments . . . . . . 2,239 2,193 2,440 (Increase) decrease in receivables . . . . (137) (18) 476 (Increase) decrease in inventories . . . . 68 (89) 130 Increase (decrease) in payables and accrued liabilities . . . . . . . . . . . 492 (371) (788) Deferred taxes and other items . . . . . . (122) (44) (88) Cumulative effects of accounting changes . -- -- 924 Net cash provided by operating activities 4,329 3,491 3,020 Cash flows from investing activities: Capital expenditures . . . . . . . . . . . (2,572) (2,817) (2,334) Proceeds from dispositions of property and other assets . . . . . . . . . . . . . . . 335 594 452 New investments, advances and business acquisitions . . . . . . . . . . . . . . . (91) (200) (126) Proceeds from sales of investments . . . . 176 256 8 Other . . . . . . . . . . . . . . . . . . . (18) (2) 18 Net cash used in investing activities . . . (2,170) (2,169) (1,982) Cash flows from financing activities: New long-term obligations . . . . . . . . . 438 1,313 3,061 Repayment of long-term obligations . . . . (138) (2,286) (3,147) Cash dividends paid . . . . . . . . . . . . (1,092) (1,092) (1,091) Issuances of common stock . . . . . . . . . 29 27 25 Acquisitions of common stock . . . . . . . (41) (32) (29) Increase (decrease) in short-term obligations . . . . . . . . . . . . . . . (783) 677 (152) Net cash used in financing activities . . . (1,587) (1,393) (1,333) Increase (decrease) in cash and marketable securities . . . . . . . . . . . . . . . . . 572 (71) (295) Cash and marketable securities-beginning of year . . . . . . . . . . . . . . . . . . . . 1,217 1,288 1,583 Cash and marketable securities-end of year . $ 1,789 $ 1,217 $ 1,288
(The accompanying notes are an integral part of these statements.) 8 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Accounting Policies Principles of consolidation The operations of all significant subsidiaries in which the Corporation directly or indirectly owns more than 50 percent of the voting stock are included in the consolidated financial statements. The Corporation also consolidates its proportionate share of assets, liabilities and results of operations of oil and gas joint ventures and undivided interest pipeline companies. Investments in other companies in which less than a majority interest is held are generally accounted for by the equity method. Inventories Inventories are carried at the lower of current market value or cost. Cost is determined under the last-in, first-out ("LIFO") method for the majority of inventories of crude oil, petroleum products and chemical products. The costs of remaining inventories are determined on the first-in, first-out ("FIFO") or average cost methods. Costs incurred in oil and gas producing activities The Corporation follows the successful efforts method of accounting. Costs of property acquisitions, successful exploratory wells, all development costs (including CO2 and certain other injected materials in enhanced recovery projects) and support equipment and facilities are capitalized. Unsuccessful exploratory wells are expensed when determined to be non-productive. Production costs, overhead and all exploration costs other than exploratory drilling are charged against income as incurred. Depreciation, depletion and amortization Generally, depreciation of plant and equipment, other than oil and gas facilities, is computed on a straight-line basis over the estimated economic lives of the facilities. Depletion of the cost of producing oil and gas properties, amortization of related intangible drilling and development costs and depreciation of tangible lease and well equipment are recognized using the unit-of-production method. The portion of costs of unproved oil and gas properties estimated to be non-productive is amortized over projected holding periods. The estimated costs to dismantle, restore and abandon oil and gas 9 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) properties are recognized over the properties' productive lives on the unit-of-production method. Retirements Upon normal retirement or replacement of facilities, the gross book value less salvage is charged to accumulated depreciation. Gains or losses from abnormal retirements or sales are credited or charged to income. Maintenance and repairs All maintenance and repair costs are charged against income, while significant improvements are capitalized. Derivative contracts The Corporation periodically enters into futures, swaps, forwards and option contracts to manage its exposure to price fluctuations on hydrocarbon transactions and its exposure to exchange rate fluctuations on its debt denominated in foreign currencies. Recognized gains, losses and cash flows from hedge contracts are reported as components of the related transactions. Translation of foreign currencies The U.S. dollar has been determined to be the appropriate functional currency for essentially all operations except foreign chemical operations. Environmental liabilities The Corporation has provided in its accounts for the reasonably estimable future costs of probable environmental remediation obligations relating to current and past activities, including obligations for previously disposed assets or businesses. In the case of long-lived cleanup projects, the effects of inflation and other factors, such as improved application of known technologies and methodologies, are considered in determining the amount of estimated liabilities. The liability is undiscounted and primarily consists of costs such as site assessment, monitoring, equipment, utilities and soil and ground water treatment and disposal. The estimated environmental remediation obligation has not been reduced for probable recoveries from third parties, which are recorded as assets. 10 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Net Income Per Share Net income per share of common stock is based on the monthly weighted average number of shares outstanding during the year. Note 2. Acquisitions, Dispositions and Special Items In 1994, earnings included benefits of $270 million related to final settlements with the Internal Revenue Service involving crude oil excise taxes ("COET") assessed in the 1980s. Of this amount, $180 million represented interest on the settlements. Earnings also included a gain of $45 million on the sale of certain European oil and gas properties. As a result of the organizational restructuring, a charge of $394 million ($256 million after-tax) was accrued in the second quarter of 1994. Included in selling and administrative expenses were charges of $225 million ($146 million after-tax) related to employee-termination costs directly associated with the severance of approximately 3,800 employees expected to occur by year-end 1995. Of the 3,800 employees, approximately 2,000 represent personnel in accounting, information technology and other related support staff; the remainder are employees associated with business group operations. Approximately 75 percent of the total terminations are professionals, managers and supervisors. In 1994, charges against the accrual relating to the elimination of about 2,000 positions totaled $64 million after tax. As of December 31, 1994, the accrual balance associated with restructuring was $82 million after tax ($126 million before tax), which was considered adequate for all future severances to which the company has committed. Included in operating expenses were charges of $169 million ($110 million after-tax) related to a reduction in carrying value of assets that will be divested. Disposition of these assets, including a hazardous-waste incineration facility that is not yet in commercial production, will not have a material effect on revenues, depreciation or income. In 1993, new investments, advances and business acquisitions totaled $200 million, including the purchase of Phillips Fibers Corporation. Proceeds from dispositions of property and other assets and from sales of investments totaled $850 million, including certain non-strategic properties and investments in Canada for approximately $471 million. Earnings in 1993 included gains of $120 million relating to the Corporation's disposition of 65 percent of the equity investment in a Canadian company, Crestar Energy Inc., in connection with its initial public offering. Also included were gains of $70 million associated with the disposition of certain Canadian properties. Earnings in 1993 included after-tax charges of $170 million associated with the writedown 11 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) of Congo exploration and production operations to current recoverable value. Earnings in 1992 were reduced by after-tax charges of $805 million, as part of a strategic reassessment of business operations. These charges included $473 million for costs of restructuring business units and related charges, including anticipated losses on the disposition of oil and gas properties and other non-strategic assets and investments; $181 million for charges related to work force reductions; and $151 million for other reserves and adjustments. Substantially all of these restructuring efforts have been completed. Earnings were favorably affected by $90 million related to the settlement of natural gas contracts in Sharjah. Also favorably affecting earnings were benefits of $90 million associated with revised estimates of tax obligations and retirement of debt. Note 3. Cash Flow Information The Consolidated Statement of Cash Flows provides information about changes in cash and cash equivalents, including cash in excess of daily requirements that is invested in marketable securities, substantially all of which have a maturity of three months or less when acquired. The effect of foreign currency exchange rate fluctuations on total cash and marketable securities balances was not significant. Net cash provided by operating activities reflects cash payments for interest and income taxes as follows: 1994 1993 1992 (millions of dollars) Interest paid . . . . . . . . . . $ 297 $ 367 $ 550 Income taxes paid . . . . . . . . $ 903 $ 632 $ 974 Note 4. Financial Instruments and Hedging Activities All financial instruments held by the Corporation are for purposes other than trading. All derivatives are either exchange traded or with major financial institutions, and the risk of credit loss is considered remote. A significant portion of Amoco's receivables are from other oil and gas and chemical companies. Although collection of these receivables could be influenced by economic factors affecting these industries, the risk of significant loss is considered remote. The carrying values of receivables, payables, marketable securities 12 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) and short-term obligations approximate their fair value. The estimated fair value of long-term debt outstanding as of December 31, 1994 and 1993 was $4,342 million and $4,264 million, respectively. The estimated fair value of marketable securities and debt were based on quoted market prices for the same or similar issues, or the current rates offered to the Corporation for issues with the same remaining maturities. The Corporation conducts its business primarily in U.S. dollars. Significant exposures to foreign currency exchange risk are reduced through the use of financial instruments, primarily by hedging of foreign currency borrowings. The following table shows the amount of long-term debt, including current portions, denominated in foreign currencies as of December 31, 1994 and 1993, and the face amounts of foreign currency forward and option contracts that have been designated as hedges of that debt: 1994 1993 Long-Term Long-Term Debt Hedge* Debt Hedge* (millions of U.S. dollars) British pound sterling . . . . . . $ 596 $ 909 $ 565 $ 873 Canadian dollar . . . . . . . . . . $ 231 $ 348 $ 77 $ 45 * Includes tax effects. The hedge contracts generally have the same maturities as the related debt. The carrying value and fair value of the forward and option contracts were not material at December 31, 1994 and 1993. The Corporation also enters into futures contracts and forward swaps to manage its exposure to price fluctuation on hydrocarbon transactions. The crude oil futures contracts generally match the pricing of specific purchase transactions to market prices at delivery dates. The net effect of natural gas futures and swaps is to convert specific sales contracts from fixed prices to market prices. Natural gas swap contracts outstanding at December 31, 1994 and 1993 totaled 151 and 24 trillion British thermal units ("Btus"), respectively. Most contracts are for a remaining term of less than one year, while contracts representing 43 trillion Btus of natural gas have terms that extend from one to five years. While these contracts have no carrying value, their fair value, representing the estimated amount that would have been required to terminate the swaps at year-end 1994, was an unfavorable $28 million. 13 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In the normal course of business, the Corporation has entered into contracts for the purchase of transportation capacity, materials and services over terms of up to 20 years. The remaining minimum payments required under these contracts at December 31, 1994, totaled $709 million. At December 31, 1994, contingent liabilities of the Corporation included guarantees of $54 million on outstanding loans of others. The Corporation also has entered into various pipeline throughput and deficiency contracts with affiliated companies. These agreements supported an estimated $7 million of affiliated company borrowings at December 31, 1994. The fair value of these commitments is immaterial. Note 5. Inventories Inventories at December 31, 1994 and 1993, are shown in the following table: December 31 1994 1993 (millions of dollars) Crude oil and petroleum products . . . . . . . $ 349 $ 415 Chemical products . . . . . . . . . . . . . . . 375 377 Other products and merchandise . . . . . . . . 24 21 Materials and supplies . . . . . . . . . . . . 294 297 Total . . . . . . . . . . . . . . . . . . $ 1,042 $ 1,110 During the year ended December 31, 1993, the Corporation reduced certain inventory quantities which were valued at lower LIFO costs prevailing in prior years. The effect of this reduction was to increase net income by approximately $50 million. The similar effect in 1994 was not material. Inventories carried under the LIFO method represented approximately 51 percent of total year-end inventory carrying values in 1994 and 47 percent in 1993. It is estimated that inventories would have been approximately $1,100 million higher than reported on December 31, 1994, and approximately $900 million higher on December 31, 1993, if the quantities valued on the LIFO basis were instead valued on the FIFO basis. 14 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Note 6. Property, Plant and Equipment Investment in properties at December 31, 1994 and 1993, detailed by industry segment, was as follows: December 31 1994 1993 Gross Net Net (millions of dollars) Exploration and production: United States . . . . . . . . $ 15,559 $ 6,957 $ 6,935 Non-U.S. . . . . . . . . . . 13,771 5,037 5,008 Refining, marketing and transportation . . . . . . . . . . 9,940 5,654 5,797 Chemicals . . . . . . . . . . . . . 5,727 2,956 2,668 Other operations . . . . . . . . . 752 534 546 Corporate . . . . . . . . . . . . . 700 405 415 Total . . . . . . . . . $ 46,449 $ 21,543 $ 21,369 Note 7. Short-Term Obligations Amoco's short-term obligations consist of notes payable and commercial paper. Notes payable as of December 31, 1994, totaled $7 million at an average annual interest rate of 5.7 percent, compared with $71 million at an average annual interest rate of 3.2 percent at year-end 1993. Commercial paper borrowings at December 31, 1994, were $217 million at an average annual interest rate of 5.9 percent compared with $936 million at an average annual interest rate of 3.4 percent as of December 31, 1993. Bank lines of credit available to support commercial paper borrowings of the Corporation amounted to $490 million at both December 31, 1994 and 1993. All of these were supported by commitment fees. The Corporation also maintains compensating balances with a number of banks for various purposes. Such arrangements do not legally restrict withdrawal or usage of available cash funds. In the aggregate, they are not material in relation to total liquid assets. Note 8. Accounts Payable Accounts payable at December 31, 1994 and 1993, included liabilities in the amount of $306 million and $304 million, respectively, for checks 15 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) issued in excess of related bank balances but not yet presented for collection. Note 9. Long-Term Debt Amoco's long-term debt resides principally with two Amoco subsidiaries--Amoco Company and Amoco Canada. Amoco Company functions as the principal holding company for substantially all of Amoco's petroleum and chemical operations, except Canadian petroleum operations and selected other activities. 16 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The components of long-term debt and year-end rates are summarized as follows: December 31 1994 1993 (millions of dollars) Amoco Company 8 5/8% Debentures due 2016 . . . . . . . . . $ 52 $ 102 9 3/4% Debentures due 2016 . . . . . . . . . 58 78 9 7/8% Debentures due 2016 . . . . . . . . . 25 25 Environmental and other industrial development obligations . . . . . . . . . . . . . . . . . 649 619 U.K. Loans-6.7% Sterling(1) . . . . . . . . . 596 565 -5.6% U.S. dollar(1) . . . . . . . 195 195 Other indebtedness . . . . . . . . . . . . . 535 435 Subtotal . . . . . . . . . . . . . . . 2,110 2,019 Less current maturities . . . . . . . . . . . 24 52 Total Amoco Company . . . . . . . . . . 2,086 1,967 Amoco Canada 6 3/4% Debentures due 2005 . . . . . . . . . 299 299 7 1/4% Notes due 2002 . . . . . . . . . . . . 299 299 6 3/4% Debentures due 2023 . . . . . . . . . 296 296 7.95% Debentures due 2022 . . . . . . . . . . 296 296 7 1/4% Notes due 2002 . . . . . . . . . . . . 254 254 7 3/8% Subordinated Exchangeable Debentures (SEDs) due 2013(2) . . . . . . . . . . . . . 458 457 Other . . . . . . . . . . . . . . . . . . . . 35 36 Subtotal . . . . . . . . . . . . . . . 1,937 1,937 Less current maturities . . . . . . . . . . . -- -- Total Amoco Canada . . . . . . . . . . 1,937 1,937 Other subsidiaries (less current maturities) . . . 364 133 Total long-term debt . . . . . . . . . . . . . . . $ 4,387 $ 4,037 (1)Weighted average interest rate at December 31, 1994. (2)The SEDs are exchangeable for Amoco common stock at $52.50 per share. Amoco Corporation guarantees the outstanding public debt obligations of Amoco Company. Amoco Corporation and Amoco Company guarantee the notes and debentures of Amoco Canada, except for the SEDs. AmProp Inc., a real estate subsidiary, had long-term debt secured by real estate assets, totaling $61 million at year-end 1994, and $88 million at year-end 1993, which is not guaranteed by Amoco Corporation or Amoco Company. 17 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Annual maturities of total long-term debt during the next five years, including the portion classified as current, are $24 million in 1995, $720 million in 1996, $211 million in 1997, $247 million in 1998 and $134 million in 1999. Note 10. Capital Stock There were 800,000,000 shares of common stock without par value authorized at December 31, 1994. Details concerning share transactions are shown below:
1994 1993 1992 Shares Amount Shares Amount Shares Amount (thous) (mil) (thous) (mil) (thous) (mil) Net shares on Jan. 1 . . . . . 496,401 $ 2,147 496,303 $ 2,126 496,335 $ 2,115 Stock repurchases (771) (10) (686) (6) (733) (14) Sales and distributions under employee benefit plans, etc. . . . . . . 763 29 784 27 701 25 Net shares outstanding on December 31 . . . 496,393 $ 2,166 496,401 $ 2,147 496,303 $ 2,126
In addition, there are 50 million shares of voting preferred stock and 50 million shares of non-voting preferred stock authorized. As of December 31, 1994, none of the preferred stock had been issued. Note 11. Leases The Corporation leases various types of properties, including service stations, tankers, buildings, railcars and other facilities, some of which are subleased to others, through operating leases. Some of the leases and subleases provide for contingent rentals based on refined product throughput. 18 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Summarized below as of December 31, 1994, are future minimum rentals payable and related sublease rental income for operating leases. Rentals Rental Payable Income (millions of dollars) 1995 . . . . . . . . . . . . . . . . $ 191 $ 167 1996 . . . . . . . . . . . . . . . . 163 100 1997 . . . . . . . . . . . . . . . . 146 45 1998 . . . . . . . . . . . . . . . . 135 7 1999 . . . . . . . . . . . . . . . . 126 4 After 1999 . . . . . . . . . . . . . 487 28 Total minimum rentals . . . . . $ 1,248 $ 351 Rental expense and related rental income applicable to operating leases for the three years ended December 31, 1994, are summarized below: 1994 1993 1992 (millions of dollars) Minimum rental expense . . . . . . . . . . $ 252 $ 229 $ 253 Contingent rental expense . . . . . . . . . 19 16 23 Total . . . . . . . . . . . . . . . . 271 245 276 Less--Related rental income . . . . . . . . 172 84 85 Net rental expense . . . . . . . . . $ 99 $ 161 $ 191 Note 12. Foreign Currency A foreign currency gain of $24 million was reflected in income in 1994, compared with gains of $47 million and $129 million for 1993 and 1992, respectively. In addition, a net translation gain of $32 million in 1994, and net translation losses of $18 million and $27 million for 1993 and 1992, respectively, were reflected in the foreign currency translation adjustment account in shareholders' equity. 19 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Note 13. Interest Expense The Corporation capitalizes interest cost related to the financing of major projects under development. All other interest is expensed as incurred. The components of interest expense are summarized in the following table: 1994 1993 1992 (millions of dollars) Short-term obligations . . . . . . . . $ 19 $ 14 $ 13 Long-term obligations . . . . . . . . . 269 285 320 Total external financing . . . . 288 299 333 Other interest expense . . . . . . . . 30 39 (67) 318 338 266 Less--capitalized interest . . . . . . -- 13 19 Net interest expense . . . . . . $ 318 $ 325 $ 247 Note 14. Research and Development Expenses Research and development costs are expensed as incurred and amounted to $255 million in 1994, $292 million in 1993 and $300 million in 1992. 20 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Note 15. Taxes Effective January 1, 1992, the Corporation adopted SFAS No. 109. The cumulative effect was to increase deferred income tax liabilities as of January 1, 1992, and reduce net income by $68 million ($.14 per share). Also, 1992 net income before the cumulative effect was $215 million ($.43 per share) greater than it would have been under the previous method. The aggregate federal and foreign deferred income tax balance represents the tax effect of the following items at December 31: 1994 1993 (millions of dollars) Tax credit and loss carryforwards . . . . . . $ 912 $ 630 Exploration costs . . . . . . . . . . . . . . 304 286 Postretirement benefits . . . . . . . . . . . 516 503 Environmental costs . . . . . . . . . . . . . 387 380 Other . . . . . . . . . . . . . . . . . . . . 578 507 Gross deferred tax assets . . . . . . . . . . 2,697 2,306 Deferred tax asset valuation allowance . . . (720) (573) Net deferred tax assets . . . . . . . . . . . $ 1,977 $ 1,733 Accelerated depreciation . . . . . . . . . . $ 3,403 $ 3,367 Intangible drilling costs . . . . . . . . . . 707 679 Other . . . . . . . . . . . . . . . . . . . . 340 289 Deferred tax liabilities . . . . . . . . . . $ 4,450 $ 4,335 The increase in the deferred tax asset valuation allowance primarily reflects an increase in foreign tax credit carryforwards for which realization is considered unlikely. 21 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The provision for income taxes is composed of: 1994 1993 1992 (millions of dollars) Federal--current . . . . . . . . . . . $ 392 $ 104 $ 326 --deferred . . . . . . . . . . . (74) 162 (366) Foreign--current . . . . . . . . . . . 422 479 533 --deferred . . . . . . . . . . . (47) (77) (370) State and local . . . . . . . . . . . . 9 19 30 $ 702 $ 687 $ 153 The following is a reconciliation between the provision for income taxes and income taxes determined by applying the federal statutory rate to income before income taxes:
1994 1993 1992 Percent Percent Percent of of of Amount Pre-Tax Amount Pre-Tax Amount Pre-Tax (millions) Income (millions) Income (millions) Income Pretax income: U.S. source . . . . . $ 1,738 $ 1,553 $ 613 Foreign source . . . 753 954 390 $ 2,491 $ 2,507 $ 1,003 Theoretical U.S. income tax . . . . . . . . . . $ 872 35.0 $ 878 35.0 $ 341 34.0 Increase (reduction) due to: Foreign taxes at rates in excess of U.S. rate 120 4.8 92 3.7 125 12.4 Effect of foreign currency gains/losses . (9) (.3) (24) (1.0) (133) (13.2) Tax credits . . . . . (174) (7.0) (185) (7.4) (127) (12.7) Tax-rate changes . . . -- -- 53 2.1 39 3.9 Prior-year adjustments (68) (2.7) (125) (5.0) (119) (11.9) All other (net) . . . . (39) (1.6) (2) -- 27 2.7 $ 702 28.2 $ 687 27.4 $ 153 15.2
22 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Taxes other than income taxes include: 1994 1993 1992 (millions of dollars) Consumer excise taxes . . . . . . . . . . . . . $ 3,409 $ 2,824 $ 2,738 Production and severance taxes United States . . . . . . . . . . . . . . . . 112 128 121 Foreign . . . . . . . . . . . . . . . . . . . 73 110 363 Property taxes . . . . . . . . . . . . . . . . 289 315 287 Social Security, corporation and other taxes . 270 271 235 $ 4,153 $ 3,648 $ 3,744 Undistributed earnings of certain foreign subsidiaries and joint-venture companies aggregated $499 million on December 31, 1994, which, under existing law, will not be subject to U.S. tax until distributed as dividends. Since the earnings have been or are intended to be indefinitely reinvested in foreign operations, no provision has been made for any U.S. taxes that may be applicable thereto. Furthermore, any taxes paid to foreign governments on those earnings may be used in whole or in part, as credits against the U.S. tax on any dividends distributed from such earnings. It is not practicable to estimate the amount of unrecognized deferred U.S. taxes on these undistributed earnings. Note 16. Stock Option Plans The Corporation's stock option plans approved by shareholders provide for the granting of options with or without stock appreciation rights ("SARs") to key, managerial and other eligible employees to buy Corporation common stock at not less than 100 percent of the fair market value at the date of grant. Such options may be incentive stock options to the extent provided in the Internal Revenue Code. Options granted under the plans prior to 1994 normally extend for 10 years and generally become exercisable two years after the date of the grant. Options granted in 1994 become exercisable 50 percent one year after the date of grant and 100 percent two years after the date of grant. Options with SARs permit holders to surrender exercisable options in exchange for payment determined by the amount by which the market value of the shares on the dates the rights are exercised exceeds the grant price. No options were granted with SARs in 1994. Such payments can be made in shares, cash or a combination at the discretion of the administering committee. 23 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Option plan transactions in 1993 and 1994 are summarized in the following table: Thousands Price Range of Shares Per Share Options outstanding on Jan. 1, 1993 . . . . 9,259 $25.03 - 54.88 Granted . . . . . . . . . . . . . . 2,199 $53.69 - 57.44 Exercised . . . . . . . . . . . . . (615) $25.03 - 54.13 Surrendered or terminated . . . . . (172) $44.06 - 57.44 Canceled upon exercise of SARs . . (112) $25.03 - 52.44 Options outstanding on Dec. 31, 1993 . . . 10,559 $28.25 - 57.44 Granted . . . . . . . . . . . . . . 2,295 $55.06 - 57.88 Exercised . . . . . . . . . . . . . (684) $28.25 - 54.13 Surrendered or terminated . . . . . (454) $44.06 - 57.44 Canceled upon exercise of SARs . . (121) $28.25 - 42.50 Options outstanding on Dec. 31, 1994 . . . 11,595 $29.81 - 57.88 Of the total options outstanding on December 31, 1994, 499,140 were with SARs. Stock options for 7,537,234 shares were exercisable at year-end 1994. No options may be granted under the current plan after December 31, 2001. The Corporation's restricted stock grant plans provide for the awarding of shares of Corporation common stock to selected employees of Amoco and its participating subsidiaries, including officers and directors. Shares issued under the plans may not be sold or otherwise transferred for a minimum period as established at the time of the grant. The shares generally are subject to forfeiture if the recipient's employment terminates during the specified period unless such termination is due to death, total disability or involuntary retirement. Shares issued have dividend and voting rights identical to other outstanding shares of the Corporation's common stock. During 1994, 57,735 shares were issued under the current plans. No restricted shares may be issued under the current plan after December 31, 2001. Note 17. Employee Compensation Programs Management incentive compensation plans approved by shareholders provide for the granting of awards to key, managerial and other eligible executives of the Corporation and certain subsidiaries. Amounts charged against earnings in anticipation of awards to be made later were $15 million in 1994, $10 million in 1993 and $8 million in 1992. Awards made in 1994, 1993 and 1992 amounted to $21 million, $13 million and $16 million, respectively. 24 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The Amoco Performance Share Plan, which became effective in 1992, allocates Amoco stock to eligible employees when the Corporation's total return to shareholders meets or exceeds the average return achieved by a select group of competitors. In 1994, the return on Amoco stock, based on the average return for the past three years, was above the competitor three-year average. As a result, employees earned stock equal to 3.5 percent of compensation. No contributions were made on behalf of employees in 1993 as the return on Amoco common stock was below the competitor average. In 1992 the return on Amoco stock was above the competitor average, resulting in employees earning stock equal to 4.4 percent of compensation. The amounts charged to expense in 1994 and 1992 were $59 million and $77 million, respectively. Note 18. Retirement Plans The Corporation and its subsidiaries have a number of defined benefit pension plans covering most employees. Plan benefits are generally based on employees' years of service and average final compensation. Essentially all of the cost of these plans is borne by the Corporation. The Corporation makes contributions to the plans in amounts that are intended to provide for the cost of pension benefits over the service lives of employees. 25 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The funded status of the plans as of December 31 for 1994 and 1993 was as follows:
Plans for which Assets Benefits Exceed Exceeds Benefits Assets (millions of dollars) 1994 Fair value of plan assets, principally equity and fixed-income securities . . . . . . . . . . . . . . . . . . $ 2,253 $ 73 Actuarial present value of benefit obligations: Accumulated benefit obligation* . . . . . . . . . . . 2,191 186 Additional benefits based on estimated future salary levels . . . . . . . . . . . . . . . . . . . . . . . 390 57 Projected benefit obligation ("PBO") . . . . . . . . 2,581 243 Plan assets under PBO . . . . . . . . . . . . . . . . . . . (328) (170) Unrecognized net (gains) losses at transition . . . . . . . (58) 8 Other unrecognized net losses . . . . . . . . . . . . . . . 351 53 Unrecognized prior service cost . . . . . . . . . . . . . . 57 8 Net pension cost prepaid (accrued) . . . . . . . . . . . . $ 22 $ (101) 1993 Fair value of plan assets, principally equity and fixed-income securities . . . . . . . . . . . . . . . . . . $ 2,432 $ 216 Actuarial present value of benefit obligations: Accumulated benefit obligation* . . . . . . . . . . . 2,213 347 Additional benefits based on estimated future salary levels . . . . . . . . . . . . . . . . . . . . . . . 479 111 Projected benefit obligation ("PBO") . . . . . . . . 2,692 458 Plan assets under PBO . . . . . . . . . . . . . . . . . . . (260) (242) Unrecognized net gains at transition . . . . . . . . . . . (57) (1) Other unrecognized net losses . . . . . . . . . . . . . . . 301 144 Unrecognized prior service cost . . . . . . . . . . . . . . 79 13 Net pension cost prepaid (accrued) . . . . . . . . . . . . $ 63 $ (86)
* Accumulated benefits totaling $266 million and $192 million were non- vested at December 31, 1994 and 1993, respectively. 26 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The actuarial assumptions used for the Corporation's principal pension plans for 1994 and 1993 were as follows: 1994 1993 Discount rate for service and interest cost . . . . . . 7.0% 7.5% Discount rate for the projected benefit obligation . . 8.5% 7.0% Rate of compensation increase for the projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . 5.0% 5.0% Long-term rate of return on assets . . . . . . . . . . 10.0% 10.0% The components of net pension cost for the past three years were as follows: 1994 1993 1992 (millions of dollars) Service cost--benefits earned during the period . . . . . . . . . . . . . . . . . $ 113 $ 102 $ 114 Interest cost on projected benefit obligation . . . . . . . . . . . . . . . 221 204 221 Actual loss (gain) on assets . . . . . . 53 (302) (141) Less--unrecognized (loss) gain . . . . . (311) 50 (124) Recognized gain on assets . . . . . . . . (258) (252) (265) Curtailment loss (gain) . . . . . . . . . 21 -- (51) Amortization of unrecognized amounts . . 22 1 11 Net pension cost . . . . . . . . . . . . $ 119 $ 55 $ 30 Most employees are also eligible to participate in defined contribution plans by contributing a portion of their compensation. The Corporation matches contributions up to specified percentages of each employee's compensation. Matching contributions charged to income were $99 million in 1994, $96 million in 1993 and $100 million in 1992. Note 19. Other Postretirement Benefits The Corporation and its subsidiaries provide certain health care and life insurance benefits for retired employees. Substantially all of the Corporation's domestic employees and employees in certain foreign countries are provided these benefits through insurance companies whose premiums are based on benefits paid during the year. Effective January 1, 1992, the Corporation adopted SFAS No. 106, which requires that the cost of such benefits be recognized during employees' years of active service. The cumulative effect of the accounting change relating to benefits attributable to years of service prior to 1992 was to reduce 27 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 1992 net income by $856 million ($1.72 per share). In addition, the effect of adopting SFAS No. 106 in 1992 was to reduce netincome by $64 million ($.13 per share). During 1992, the Corporation approved plan amendments which reduced the accumulated obligation by $270 million, which is being amortized prospectively. The status of the Corporation's unfunded plans as of December 31 for 1994 and 1993 was as follows: 1994 1993 (millions of dollars) Accumulated benefit obligation Retirees . . . . . . . . . . . . . . . . . . . . . $ 603 $ 668 Fully eligible active plan participants . . . . . 156 116 Other active plan participants . . . . . . . . . . 281 475 Total . . . . . . . . . . . . . . . . . . . . . . 1,040 1,259 Unrecognized net gains (losses) . . . . . . . . . . . 240 (56) Unrecognized prior service gains . . . . . . . . . . 215 247 Accrued postretirement benefit cost . . . . . . . . . $ 1,495 $ 1,450 The actuarial assumptions used for the Corporation's principal postretirement benefit plans for 1994 and 1993 were as follows: 1994 1993 Discount rate for service and interest cost . . . . . 7.0% 8.0% Discount rate for the accumulated benefit obligation 8.5% 7.0% Rate of compensation increase for the accumulated benefit obligation . . . . . . . . . . . . . . . . . 5.0% 5.0% Assumed current year health care cost trend rate --retirees under 65 . . . . . . . . . . . . . . . 11.1% 12.0% --Medicare eligible retirees . . . . . . . . . . . 8.5% 9.0% Assumed ultimate trend rate . . . . . . . . . . . . . 5.0% 5.0% Year ultimate health care cost rate will be achieved 2002 2002 Effect of 1% increase in health care cost trend rates (millions) --annual aggregate service and interest costs . . $ 18 $ 17 --accumulated postretirement benefit obligation . $ 93 $144 28 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The components of net postretirement benefit costs for the past three years were as follows: 1994 1993 1992 (millions of dollars) Service cost--benefits earned during the period . . . . . . . . . . . . . . . . . $ 34 $ 32 $ 44 Interest cost on accumulated benefit obligation . . . . . . . . . . . . . . . 89 97 105 Amortization and other . . . . . . . . . (33) (22) (10) Net postretirement benefit cost . . . . . $ 90 $ 107 $ 139 Note 20. Litigation The Internal Revenue Service ("IRS") has challenged the application of certain foreign income taxes as credits against the Corporation's U.S. taxes that otherwise would have been payable for the years 1980 through 1989. On June 18, 1992, the IRS issued a statutory Notice of Deficiency for additional taxes in the amount of $466 million, plus interest, relating to 1980 through 1982. The Corporation has filed a petition in the U.S. Tax Court contesting the IRS statutory Notice of Deficiency. Trial on the matter is scheduled to commence in April 1995. A comparable adjustment of foreign tax credits for each year has been proposed for the years 1983 through 1989 based upon subsequent IRS audits. Similar challenges could arise relating to years subsequent to 1989. The Corporation believes that the foreign income taxes have been reflected properly in its U.S. federal tax returns. The Corporation is confident that it will prevail in the litigation. Consequently, this dispute is not expected to have a material adverse effect on liquidity, results of operations, or the consolidated financial position of the Corporation. Note 21. Other Contingencies Amoco is subject to federal, state and local environmental laws and regulations. Amoco is currently participating in the cleanup of numerous sites pursuant to such laws and regulations. The reasonably estimable future costs of probable environmental obligations, including Amoco's probable costs for obligations for which Amoco is jointly and severally liable, and for assets or businesses that were previously disposed, have been provided for in the Corporation's results of operations. These estimated costs represent the amount of expenditures expected to be incurred in the future to remediate sites with known environmental obligations. The accrued liability represents a reasonable best estimate of Amoco's remediation liability. As the scope of the obligations 29 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) becomes better defined, there may be changes in the estimated future costs, which could result in charges against the company's future results of operations. The ultimate amount of any such future costs, and the range within which such costs can be expected to fall, cannot be determined. Although the costs could be significant, they are not expected to have a material effect on Amoco's liquidity or consolidated financial position. Note 22. Summarized Financial Data The Corporation's principal subsidiary, Amoco Company, is the holding company for substantially all petroleum and chemical operating subsidiaries except Amoco Canada. Amoco guarantees the outstanding public debt obligations of Amoco Company. Summarized financial data for Amoco Company are presented as follows: 1994 1993 1992 (millions of dollars) For the years ended December 31: Revenues (including excise taxes) . . . $27,841 $25,930 $25,698 Operating profit. . . . . . . . . . . . $ 2,470 $ 2,595 $ 1,760 Net income(1) . . . . . . . . . . . . . $ 1,878 $ 1,803 $ 1,226 At December 31: Current assets. . . . . . . . . . . . . $ 5,399 $ 4,383 $ 4,644 Total assets. . . . . . . . . . . . . . $24,549 $23,513 $23,645 Current liabilities . . . . . . . . . . $ 4,142 $ 3,976 $ 3,949 Long-term obligations(2). . . . . . . . $ 6,190 $ 1,967 $ 2,811 Deferred credits. . . . . . . . . . . . $ 4,584 $ 4,441 $ 4,257 Minority interest . . . . . . . . . . . $ 5 $ -- $ -- Shareholder's equity(2) . . . . . . . . $ 9,628 $13,129 $12,628 (1) Excludes cumulative effects of accounting changes of $(702) million in 1992. (2) Change reflects dividends in 1994 to Amoco Corporation of intercompany notes receivable from subsidiaries. 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. 30 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Amoco Argentina Oil Company ("the Company") is a wholly-owned subsidiary of Amoco International Petroleum Company, which is an indirect wholly-owned subsidiary of Amoco. Summarized financial data for the Company are presented as follows: 1994 1993 1992 (millions of dollars) For the years ended December 31: Revenues. . . . . . . . . . . . . . . . $ 189 $ 208 $ 179 Net income. . . . . . . . . . . . . . . $ 76 $ 74 $ 95 At December 31: Current assets. . . . . . . . . . . . . $ 97 $ 103 $ 27 Total assets. . . . . . . . . . . . . . $ 349 $ 337 $ 260 Current liabilities . . . . . . . . . . $ 58 $ 100 $ 8 Non-current liabilities . . . . . . . . $ 100 $ 20 $ 18 Shareholder's equity. . . . . . . . . . $ 191 $ 217 $ 234 Note 23. Segment and Geographic Data The Corporation operates in several industry segments. Petroleum operations include exploration and production ("E&P") and refining, marketing and transportation ("RM&T") segments. The E&P segment is engaged in exploring for, developing and producing crude oil and natural gas and extraction of natural gas liquids ("NGL"). The RM&T segment is responsible for petroleum refining operations, the marketing of all refined petroleum products and the transportation and wholesale marketing of NGL and domestic natural gas. This segment also encompasses transportation of crude oil to refineries via marine vessels and pipelines and associated supply and trading activities. The chemical segment manufactures and sells various petroleum-based chemical products. Other operations include investments in technology companies, offshore contract drilling, real estate interests, and other activities. Intersegment and intergeographic sales are accounted for at prices that approximate arm's-length market prices. Operating profits include all revenues and expenses of the reportable segment, except for income taxes and equity in earnings of unconsolidated companies. Income taxes are generally assigned to the operations that give rise to the tax effects. Identifiable assets are those used in the operations of each segment or area, including intersegment or intergeographic receivables. Corporate assets consist primarily of cash, marketable securities and the unamortized cost of purchased tax benefits. Intersegment and intergeographic sales and receivables are eliminated in determining consolidated revenue and identifiable asset totals. Information by 31 AMOCO CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Industry Segment and Geographic Area is summarized in the tables on pages 32 to 35. 31 Statement of Information by Industry Segment (millions of dollars) Petroleum Operations Exploration Refining, and Marketing and Chemical Production Transportation Operations Year 1994 Revenues other than intersegment sales . . . . . . . . . . . . . $ 2,568 $ 22,555 $ 4,593 Intersegment sales . . . . . . 3,892 976 69 Total revenues . . . . . $ 6,460 $ 23,531 $ 4,662 Operating profit . . . . . . . $ 1,585 $ 591 $ 684 Equity in earnings of others . 4 31 98 General corporate amounts . . . Interest expense . . . . . . . Income taxes . . . . . . . . . (602) (204) (244) Net income . . . . . . . $ 987 $ 418 $ 538 Depreciation and related charges $ 1,531 $ 444 $ 195 Capital expenditures . . . . . $ 1,561 $ 451 $ 467 Identifiable assets . . . . . . $ 13,390 $ 7,881 $ 4,375 Equity investments and related advances . . . . . . . . . . . $ 34 $ 32 $ 351 Other Consol- Operations Corporate idated* Year 1994 Revenues other than intersegment sales . . . . . . . . . . . . . $ 144 $ 30,362 Intersegment sales . . . . . . -- -- Total revenues . . . . . $ 144 $ 30,362 Operating profit . . . . . . . $ (248) $ 2,612 Equity in earnings of others . -- 133 General corporate amounts . . . $ 64 64 Interest expense . . . . . . . (318) (318) Income taxes . . . . . . . . . 93 255 (702) Net income . . . . . . . $ (155)$ 1 $ 1,789 Depreciation and related charges $ 32 $ 37 $ 2,239 Capital expenditures . . . . . $ 48 $ 45 $ 2,572 Identifiable assets . . . . . . $ 586 $ 2,678 $ 28,896 Equity investments and related advances . . . . . . . . . . . $ 3 420 Total assets . . . . . . $ 29,316 * After elimination of intersegment transactions. 32 Statement of Information by Industry Segment (millions of dollars) Petroleum Operations Exploration Refining, and Marketing and Chemical Production Transportation Operations Year 1993 Revenues other than intersegment sales . . . . . . . . . . . . . $ 2,631 $ 22,021 $ 3,699 Intersegment sales . . . . . . 4,057 893 74 Total revenues . . . . . $ 6,688 $ 22,914 $ 3,773 Operating profit . . . . . . . $ 1,563 $ 1,237 $ 321 Equity in earnings of others . -- 30 60 General corporate amounts . . . Interest expense . . . . . . . Income taxes . . . . . . . . . (568) (441) (141) Net income . . . . . . . $ 995 $ 826 $ 240 Depreciation and related charges $ 1,518 $ 419 $ 182 Capital expenditures . . . . . $ 1,590 $ 685 $ 370 Identifiable assets . . . . . . $ 13,822 $ 8,108 $ 3,938 Equity investments and related advances . . . . . . . . . . . $ 31 $ 32 $ 234 Other Consol- Operations Corporate idated* Year 1993 Revenues other than intersegment sales . . . . . . . . . . . . . $ 166 $ 28,617 Intersegment sales . . . . . . 24 -- Total revenues . . . . . $ 190 $ 28,617 Operating profit . . . . . . . $ (75) $ 3,046 Equity in earnings of others . (1) 89 General corporate amounts . . . $ (303) (303) Interest expense . . . . . . . (325) (325) Income taxes . . . . . . . . . 31 432 (687) Net income . . . . . . . $ (45)$ (196)$ 1,820 Depreciation and related charges $ 30 $ 44 $ 2,193 Capital expenditures . . . . . $ 126 $ 46 $ 2,817 Identifiable assets . . . . . . $ 633 $ 2,051 $ 28,185 Equity investments and related advances . . . . . . . . . . . $ 4 301 Total assets . . . . . . $ 28,486 * After elimination of intersegment transactions. 33 Statement of Information by Industry Segment (millions of dollars) Petroleum Operations Exploration Refining, and Marketing and Chemcical Production Transportation Operations Year 1992 Revenues other than intersegment sales . . . . . . . . . . . . . $ 2,812 $ 21,282 $ 3,807 Intersegment sales . . . . . . 4,165 981 113 Total revenues . . . . . $ 6,977 $ 22,263 $ 3,920 Operating profit . . . . . . . $ 1,149 $ 664 $ (174) Equity in earnings of others . (2) 25 31 General corporate amounts . . . Interest expense . . . . . . . Income taxes . . . . . . . . . (276) (227) 49 Net income (loss) . . . . $ 871 $ 462 $ (94) Depreciation and related charges $ 1,751 $ 390 $ 189 Capital expenditures . . . . . $ 1,092 806 $ 320 Identifiable assets . . . . . . $ 13,909 $ 8,135 $ 3,592 Equity investments and related advances . . . . . . . . . . . $ 85 $ 26 $ 188 Other Consol- Operations Corporate idated* Year 1992 Revenues other than intersegment sales . . . . . . . . . . . . . $ 155 $ 28,219 Intersegment sales . . . . . . 48 -- Total revenues . . . . . $ 203 $ 28,219 Operating profit . . . . . . . $ (225) $ 1,414 Equity in earnings of others . (9) 45 General corporate amounts . . . $ (209) (209) Interest expense . . . . . . . (247) (247) Income taxes . . . . . . . . . 55 246 (153) Cumulative effects of accounting changes . . . . . . . . . (924) Net income (loss) . . . . $ (179) $ (210)$ (74) Depreciation and related charges $ 61 $ 49 $ 2,440 Capital expenditures . . . . . $ 60 $ 56 $ 2,334 Identifiable assets . . . . . . $ 633 $ 2,199 $ 27,951 Equity investments and related advances . . . . . . . . . . . $ 203 502 Total assets . . . . . . $ 28,453 *After elimination of intersegment transactions. 34 Statement of Information by Geographic Area
Consol- United idated (millions of dollars) States Canada Europe Other Corporate (1) Year 1994 Revenues other than intergeographic sales . $24,003 $ 2,555 $ 1,403 $ 1,899 $ 30,362 Intergeographic sales . 711 706 24 473 -- Total revenues . $24,714 $ 3,261 $ 1,427 $ 2,372 $ 30,362 Operating profit . . . $ 1,836 $ 349 $ 47 $ 380 $ 2,612 Net income . . . . . . $ 1,393 $ 203 $ 4 $ 188 $ 1 $ 1,789 Capital expenditures . $ 1,537 $ 340 $ 126 $ 524 $ 45 $ 2,572 Identifiable assets . . $18,074 $ 3,566 $ 2,469 $ 2,123 $ 2,678 $ 28,896 Equity investments and related advances . $ 36 $ 33 $ 4 $ 347 420 Total assets . . $ 29,316 Equity in earnings of others . . . . . . . $ 30 $ 4 $ -- $ 99 $ 133 Year 1993 Revenues other than intergeographic sales . $22,777 $ 2,664 $ 1,051 $ 2,025 $ 28,617 Intergeographic sales . 562 749 38 462 -- Total revenues . $ 23,339 $ 3,413 $ 1,089 $ 2,487 $ 28,617 Operating profit . . . $ 2,200 $ 607 $ (80) $ 319 $ 3,046 Net income . . . . . . $ 1,589 $ 451 $ (104) $ 80 $ (196) $ 1,820 Capital expenditures . $ 1,624 $ 294 $ 362 $ 491 $ 46 $ 2,817 Identifiable assets . . $18,226 $ 3,703 $ 2,371 $ 2,118 $ 2,051 $ 28,185 Equity investments and related advances . $ 39 $ 28 $ 3 $ 231 301 Total assets . . $ 28,486 Equity in earnings of others . . . . . . . $ 26 $ 1 $ (2) $ 64 $ 89 Year 1992 Revenues other than intergeographic sales . $22,051 $ 2,442 $ 1,180 $ 2,383 $ 28,219 Intergeographic sales . 586 $ 780 $ 15 $ 698 $ -- Total revenues . . . $22,637 $ 3,222 $ 1,195 $ 3,081 $ 28,219 Operating profit . . . $ 1,144 $ (225)$ 12 $ 483 $ 1,414 Net income (loss) . . . $ 909 $ 33 $ (107) $ 225 $ (210) $ (74)(2) Capital expenditures . $ 1,399 $ 128 $ 469 $ 282 $ 56 $ 2,334 Identifiable assets . . $17,768 $ 3,811 $ 2,340 $ 2,252 $ 2,199 $ 27,951 Equity investments and related advances . . . $ 36 $ 82 $ 3 $ 381 502 Total assets . . . . $ 28,453 Equity in earnings of others . . . . . . . . $ 23 $ (2)$ (10) $ 34 $ 45
(1) After elimination of intergeographic transactions. (2) Includes cumulative effects of accounting changes of $(924) million in 1992. 35 AMOCO CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
1. Quarterly Results and Stock Market Data Net Common Stock Income Cash Price Ranges(2) Operating Net (Loss) Dividends Profit Income Per Per High Low Revenues (Loss) (Loss)(1) Share Share (millions of dollars, except per-share amounts) 1994 First quarter . $ 6,765 $ 634 $ 398 $ .80 $ .55 $ 56 1/8 $ 50 7/8 Second quarter 8,035 558 410 .83 .55 60 51 1/8 Third quarter . 7,780 751 445 .89 .55 61 1/4 56 3/4 Fourth quarter 7,782 669 536 1.08 .55 64 1/8 57 1/2 1993 First quarter . 6,943 509 229 .46 .55 58 1/2 48 1/8 Second quarter 7,225 811 487 .98 .55 59 1/4 53 5/8 Third quarter . 7,072 817 520 1.05 .55 58 3/8 52 3/8 Fourth quarter 7,377 909 584 1.17 .55 59 51 1/2 (1) Fourth-quarter 1994 earnings included a $45 million gain associated with the disposition of certain European oil and gas properties, and tax adjustments benefiting corporate operations of $33 million. Results for the third quarter of 1994 included environmental charges of $32 million. Net income for the second quarter of 1994 included restructuring charges of $256 million. Second-quarter 1994 results also included benefits of $270 million relating to final settlements with the IRS involving crude oil excise taxes in the 1980s. Results for the fourth quarter of 1993 included a gain of $120 million associated with the disposition of a portion of an equity investment in a Canadian company. Net income in the third quarter of 1993 included a gain of $70 million associated with the disposition of certain non-strategic Canadian properties. First-quarter results 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. (2) The common stock price range is that on the New York Stock Exchange. Amoco's common stock is also traded on the Chicago, Pacific, Toronto and four Swiss stock exchanges.
36 2. Oil and Gas Exploration and Production Activities Supplemental information about oil and gas exploration and production activities is reported in compliance with SFAS No. 69, "Disclosures about Oil and Gas Producing Activities." Results of Operations for Oil and Gas Producing Activities
United (millions of dollars) States Canada Europe Other Worldwide 1994 Oil and gas production revenues: From consolidated subsidiaries . . . . . . . $ 2,497 $ 323 $ 2 $ 877 $ 3,699 From unaffiliated entities 460 412 668 603 2,143 Other revenues . . . . . . . 263 186 100 69 618 Total revenues . . . . . . 3,220 921 770 1,549 6,460 Production costs: Taxes other than income . 242 17 21 65 345 Other production costs . . 788 265 278 401 1,732 Exploration expenses . . . . 113 117 178 225 633 Depreciation, depletion and amortization expense . . . 629 261 215 340 1,445 Other related costs . . . . . 412 27 130 151 720 Total costs . . . . . . . . 2,184 687 822 1,182 4,875 Operating profit . . . . . . 1,036 234 (52) 367 1,585 Income tax expense . . . . . 188 113 11 290 602 Results of operations . . . $ 848 $ 121 $ (63) $ 77 $ 983 1993 Oil and gas production revenues: From consolidated subsidiaries . . . . . . . $ 2,572 $ 385 $ 12 $ 1,078 $ 4,047 From unaffiliated entities 742 411 492 442 2,087 Other revenues . . . . . . . 137 322 42 53 554 Total revenues . . . . . . 3,451 1,118 546 1,573 6,688 Production costs: Taxes other than income . . 297 13 17 102 429 Other production costs . . 875 276 209 380 1,740 Exploration expenses . . . . 90 47 151 241 529 Depreciation, depletion and amortization expense . . . . 693 293 165 327 1,478 Other related costs . . . . . 495 61 95 298 949 Total costs . . . . . . . . 2,450 690 637 1,348 5,125 Operating profit . . . . . . 1,001 428 (91) 225 1,563 Income tax expense . . . . . 189 91 9 279 568 Results of operations . . . $ 812 $ 337 $ (100) $ (54) $ 995
Certain data for 1993 have been reclassified. 37
United (millions of dollars) States Canada Europe Other Worldwide Year 1992 Oil and gas production revenues: From consolidated subsidiaries . . . . . . . $ 2,366 $ 476 $ -- $ 1,259 $ 4,101 From unaffiliated entities 904 348 586 822 2,660 Other revenues . . . . . . . 65 71 26 54 216 Total revenues . . . . . . 3,335 895 612 2,135 6,977 Production costs: Taxes other than income . . 271 15 21 351 658 Other production costs . . 934 358 225 382 1,899 Exploration expenses . . . . 140 72 150 300 662 Depreciation, depletion and amortization expense . . . . 703 347 206 401 1,657 Other related costs . . . . . 286 506 18 142 952 Total costs . . . . . . . . 2,334 1,298 620 1,576 5,828 Operating profit . . . . . . 1,001 (403) (8) 559 1,149 Income tax expense . . . . . 223 (324) 95 282 276 Results of operations . . . $ 778 $ (79) $ (103) $ 277 $ 873
Oil and gas production revenues reflect the market prices of net production sold or transferred, with appropriate adjustments for royalties, net profits interest and other contractual provisions. Other revenues in 1994 include the U.S. COET settlement; other revenues in 1993 include Canadian gains on dispositions of properties and investments. Taxes other than income include production and severance taxes and property taxes. Other production costs are lifting costs incurred to operate and maintain productive wells and related equipment, including such costs as operating labor, repairs and maintenance, materials, supplies and fuel consumed. Also included are operating costs of field natural gas liquids plants, because the Corporation includes the operations of these plants in the exploration and production segment. Production costs include related administrative expenses and depreciation applicable to support equipment associated with production activities. Exploration expenses include the costs of geological and geophysical activity, carrying and retaining undeveloped properties and drilling exploratory wells determined to be non-productive. Depreciation, depletion and amortization expense relates to capitalized costs incurred in acquisition, exploration and development activities and does not include depreciation applicable to support equipment. Included in other related costs are significant, non-recurring items and purchases of natural gas for field natural gas liquids plants. Significant, non- recurring items include $102 million for restructuring in 1994; $210 million for the writedown of Congo operations to current recoverable value and U.S. environmental charges of $96 million in 1993; and restructuring charges of $566 million in 1992. Income taxes are generally assigned to the operations that give rise to the tax effects. Results of operations do not include interest expense and general corporate amounts nor their associated tax effects. 38 Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves The standardized measure of discounted future net cash flows relating to proved oil and gas reserves is prescribed by SFAS No. 69. The statement requires measurement of future net cash flows through assignment of a monetary value to proved reserve quantities and changes therein using a standardized formula. The amounts shown are based on prices and costs at the end of each period, legislated tax rates and a 10 percent annual discount factor. Because the calculation assumes static economic and political conditions and requires extensive judgment in estimating the timing of production, the resultant future net cash flows are not necessarily indicative of the fair market value of estimated proved reserves, but provide a reference point that may assist the user in projecting future cash flows. Summarized below is the standardized measure of discounted future net cash flows relating to proved oil and gas reserves at December 31, 1994, 1993 and 1992.
United (millions of dollars) States Canada Europe Other Worldwide December 31, 1994 Future cash inflows . . . . . $ 33,605 $ 8,135 $ 6,736 $ 10,951 $ 59,427 Future development and production costs . . . . . . 16,922 3,686 3,939 4,207 28,754 Future income taxes . . . . . 3,999 1,471 950 2,776 9,196 Future net cash flows . . . . 12,684 2,978 1,847 3,968 21,477 Ten percent annual discount . 7,189 1,324 538 1,435 10,486 Discounted net cash flows . . $ 5,495 $ 1,654 $ 1,309 $ 2,533 $ 10,991 December 31, 1993 Future cash inflows . . . . . $ 35,403 $ 7,948 $ 5,826 $ 8,242 $ 57,419 Future development and production costs . . . . . . 17,639 3,605 3,091 4,084 28,419 Future income taxes . . . . . 4,235 1,566 1,012 1,620 8,433 Future net cash flows . . . . 13,529 2,777 1,723 2,538 20,567 Ten percent annual discount . 7,714 1,259 589 961 10,523 Discounted net cash flows . . $ 5,815 $ 1,518 $ 1,134 $ 1,577 $ 10,044 December 31, 1992 Future cash inflows . . . . . $ 43,134 $ 9,786 $ 6,574 $ 9,109 $ 68,603 Future development and production costs . . . . . . 17,541 4,872 3,442 3,751 29,606 Future income taxes . . . . . 6,837 1,828 1,371 2,217 12,253 Future net cash flows . . . . 18,756 3,086 1,761 3,141 26,744 Ten percent annual discount . 10,829 1,459 695 1,091 14,074 Discounted net cash flows . . $ 7,927 $ 1,627 $ 1,066 $ 2,050 $ 12,670 Future cash inflows are computed by applying the year-end prices of oil and gas to proved reserve quantities as reported in the tables under 39 the heading "Estimated Proved Reserves." Future price changes are considered only to the extent provided by contractual arrangements. Future development and production costs are estimated expenditures to develop and produce the proved reserves based on year-end costs and assuming continuation of existing economic conditions. Future income taxes are calculated by applying appropriate statutory tax rates to future pre-tax net cash flows from proved oil and gas reserves less recovery of the tax basis of proved properties, and adjustments for permanent differences. Statement of Changes in Standardized Measure of Discounted Future Net Cash Flows The following table details the changes in the standardized measure of discounted future net cash flows for the three years ended December 31, 1994: 1994 1993 1992 (millions of dollars) Balance at January 1 . . . . . . . . . . . . . . $10,044 $12,670 $11,830 Changes resulting from: Sales and transfers of oil and gas produced, net of production costs . . . . . . . . . . (3,765) (3,965) (4,204) Net changes in prices, and development and production costs . . . . . . . . . . . . . 1,059 (3,966) 1,872 Current-year expenditures for development . 1,499 1,594 1,318 Extensions, discoveries, and improved recovery, less related costs . . . . . . . 1,128 758 593 Sales of reserves in place . . . . . . . . (45) (235) (332) Revisions of previous quantity estimates . 303 488 (182) Accretion of discount . . . . . . . . . . . 1,331 1,798 1,702 Net change in income taxes . . . . . . . . (253) 1,861 (178) Other . . . . . . . . . . . . . . . . . . . (310) (959) 251 Balance at December 31 . . . . . . . . . . . . . $10,991 10,044 12,670 Certain data for 1993 have been reclassified. The price of crude oil has fluctuated over the past several years, and price changes have had significant effects on the computed future cash flows over the period shown. Because the price of crude oil is likely to remain volatile in the future, price changes can be expected to continue to significantly affect the standardized measure of future net cash flows. 40 Estimated Proved Reserves Net proved reserves of crude oil (including condensate), natural gas liquids ("NGL") and natural gas at the beginning and end of 1994, 1993 and 1992, with the detail of changes during those years, are presented below. Reported quantities include reserves in which the Corporation holds an economic interest under production-sharing and other types of operating agreements with foreign governments. The estimates were prepared by Corporation engineers and are based on current technology and economic conditions. The Corporation considers such estimates to be reasonable and consistent with current knowledge of the characteristics and extent of proved production. These estimates include only those amounts considered to be proved reserves and do not include additional amounts that may result from extensions of currently proved areas, or amounts that may result from new discoveries in the future, or from application of secondary or tertiary recovery processes not yet determined to be commercial. Proved developed reserves are those reserves that are expected to be recovered through existing wells with existing equipment and operating methods. 41
Crude Oil and NGL Reserves United States Canada Europe Other Worldwide Crude Crude Crude Crude Oil, Crude (millions of barrels) Oil NGL Oil NGL Oil NGL NGL Oil NGL Proved reserves: December 31, 1991 . . 960 471 267 55 171 14 508 1,898 548 Revisions of previous estimates (15) 11 14 (1) 23 (1) (6) 16 9 Improved recovery applications . . . 2 -- 3 -- 8 1 2 15 1 Extensions, discoveries and other additions . . 2 2 1 -- 3 -- 22 26 4 Purchases of reserves in place . 3 -- 43 6 -- -- -- 46 6 Sales of reserves in place . . . . . . . (3) -- (53) (9) (1) -- (2) (59) (9) Production . . . . (84) (23)(*) (29) (4) (19) (1) (91) (221) (30) December 31, 1992 . . 865 461 246 47 185 13 433 1,721 529 Revisions of previous estimates 14 3 8 1 6 1 35 63 5 Improved recovery applications . . . 6 2 1 -- 14 1 34 55 3 Extensions, discoveries and other additions . . 5 2 19 1 4 -- 77 103 5 Purchases of reserves in place . 1 1 12 2 -- -- 2 14 4 Sales of reserves in place . . . . . . . (3) (1) (35) (4) -- -- -- (38) (5) Production . . . . (75) (25)(*) (26) (5) (18) -- (87) (204) (32) December 31, 1993 . . 813 443 225 42 191 15 494 1,714 509 Revisions of previous estimates (20) 18 (2) 2 7 (1) 27 13 18 Improved recovery applications . . . 16 3 6 -- 4 -- 30 56 3 Extensions, discoveries and other additions . . 48 6 36 2 6 2 49 139 10 Purchases of reserves in place . 5 -- 4 -- -- -- -- 9 -- Sales of reserves in place . . . . . . . (5) (1) (3) -- (7) (1) (22) (37) (2) Production . . . . (71) (22)(*) (21) (5) (24) (1) (83) (198) (29) December 31, 1994 . . 786 447 245 41 177 14 495 1,696 509 Proved developed reserves: December 31, 1991 . . 930 423 252 50 114 11 434 1,723 491 December 31, 1992 . . 839 413 236 43 123 9 384 1,574 473 December 31, 1993 . . 789 396 205 39 154 12 381 1,521 455 December 31, 1994 . . 727 404 198 38 150 10 387 1,455 459
42 Natural Gas Reserves
United (billions of cubic feet) States Canada Europe Other Worldwide Proved reserves: December 31, 1991 . . . . . . . . . . 11,649 4,269 1,156 1,626 18,700 Revisions of previous estimates 506 (8) 77 (15) 560 Improved recovery applications -- -- 6 -- 6 Extensions, discoveries and other additions . . . . . . . . 354 134 7 46 541 Purchases of reserves in place 2 377 131 -- 510 Sales of reserves in place . . (50) (965) (36) -- (1,051) Production . . . . . . . . . . (845) (288) (98) (183) (1,414) December 31, 1992 . . . . . . . . . . 11,616 3,519 1,243 1,474 17,852 Revisions of previous estimates 812 (25) 81 68 936 Improved recovery applications 1 -- 6 -- 7 Extensions, discoveries and other additions . . . . . . . . 160 112 22 247 541 Purchases of reserves in place 76 86 9 52 223 Sales of reserves in place . . (31) (391) -- -- (422) Production . . . . . . . . . . (867) (332) (95) (193) (1,487) December 31, 1993 . . . . . . . . . . 11,767 2,969 1,266 1,648 17,650 Revisions of previous estimates 220 91 14 159 484 Improved recovery applications 1 1 2 -- 4 Extensions, discoveries and other additions . . . . . . . . 555 288 236 778 1,857 Purchases of reserves in place 117 7 -- -- 124 Sales of reserves in place . . (39) (45) (9) -- (93) Production . . . . . . . . . . (893) (289) (121) (202) (1,505) December 31, 1994 . . . . . . . . . . 11,728 3,022 1,388 2,383 18,521 Proved developed reserves: December 31, 1991 . . . . . . . . . . 10,892 3,507 621 606 15,626 December 31, 1992 . . . . . . . . . . 10,876 2,916 645 454 14,891 December 31, 1993 . . . . . . . . . . 11,019 2,556 1,062 618 15,255 December 31, 1994 . . . . . . . . . . 10,829 2,643 1,028 1,038 15,538
*Excludes non-leasehold NGL production attributable to processing plant ownership of approximately 10 million barrels for each of 1992, 1993 and 1994. 43 Capitalized Costs The following table summarizes capitalized costs for oil and gas exploration and production activities, and the related accumulated depreciation, depletion and amortization.
United (millions of dollars) States Canada Europe Other Worldwide December 31, 1994 Unproved properties: Gross assets . . . . . . . . . $ 365$ 224$ 114$ 170$ 873 Accumulated amortization . . . 113 91 12 -- 216 Net assets . . . . . . . . . 252 133 102 170 657 Proved properties: Gross assets . . . . . . . . . 14,574 3,906 2,804 6,029 27,313 Accumulated depreciation, depletion, etc. . . . . . . . . 8,168 2,076 1,443 4,781 16,468 Net assets . . . . . . . . . 6,406 1,830 1,361 1,248 10,845 Support equipment and facilities: Gross assets . . . . . . . . . 620 75 106 343 1,144 Accumulated depreciation . . . 321 32 64 235 652 Net assets . . . . . . . . . 299 43 42 108 492 Net capitalized costs . . . . . . $ 6,957$ 2,006$ 1,505$ 1,526$ 11,994 December 31, 1993 Unproved properties: Gross assets . . . . . . . . . $ 320$ 120$ 163$ 96$ 699 Accumulated amortization . . . 133 61 -- -- 194 Net assets . . . . . . . . . 187 59 163 96 505 Proved properties: Gross assets . . . . . . . . . 14,099 3,736 2,515 5,796 26,146 Accumulated depreciation, depletion, etc. . . . . . . . . 7,699 1,896 1,230 4,463 15,288 Net assets . . . . . . . . . 6,400 1,840 1,285 1,333 10,858 Support equipment and facilities: Gross assets . . . . . . . . . 638 74 118 364 1,194 Accumulated depreciation . . . 290 28 63 233 614 Net assets . . . . . . . . . 348 46 55 131 580 Net capitalized costs . . . . . . $ 6,935$ 1,945$ 1,503$ 1,560$ 11,943
44 Costs Incurred Property acquisition costs include costs incurred to purchase, lease or otherwise acquire oil and gas properties. Exploration costs include the costs of geological and geophysical activity, carrying and retaining undeveloped properties and drilling and equipping exploratory wells. Development costs include the costs of drilling and equipping development wells, CO2 and certain other injected materials for enhanced recovery projects and facilities to extract, treat and gather and store oil and gas. Exploration and development costs include administrative expenses and depreciation applicable to support equipment associated with these activities. Costs incurred summarized below include both amounts expensed and capitalized.
United (millions of dollars) States Canada Europe Other Worldwide 1994 Property acquisition: Proved . . . . . . . . $ 52 $ 11 $ 9 $ 1 $ 73 Unproved . . . . . . . 50 51 3 2 106 Exploration . . . . . . . 245 116 185 291 837 Development . . . . . . . 614 246 193 446 1,499 Total . . . . . . . $ 961 $ 424 $ 390 $ 740 $ 2,515 1993 Property acquisition: Proved . . . . . . . . $ 11 $ 11 $ 36 $ 23 $ 81 Unproved . . . . . . . 4 23 54 20 101 Exploration . . . . . . . 133 64 149 229 575 Development . . . . . . . 657 234 276 427 1,594 Total . . . . . . . $ 805 $ 332 $ 515 $ 699 $ 2,351 1992 Property acquisition: Proved . . . . . . . . $ 2 $ 2 $ -- $ -- $ 4 Unproved . . . . . . . 14 8 3 5 30 Exploration . . . . . . . 151 35 139 311 636 Development . . . . . . . 479 116 381 342 1,318 Total . . . . . . . $ 646 $ 161 $ 523 $ 658 $ 1,988
45 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMOCO CORPORATION (Registrant) Date April 5, 1995 J. R. Reid J. R. Reid Vice President and Controller (Duly Authorized and Chief Accounting Officer) 46 SCHEDULE VIII AMOCO CORPORATION
VALUATION AND QUALIFYING ACCOUNTS(1) For the Year Ended December 31, (millions of dollars) Additions Balance Charged at to costs Charged Balance Description beginning and to other Deductions at end of year expenses accounts (2) of year 1994 Allowance for doubtful notes and accounts receivable . . . . . $ 65 $ 27 $ -- $ 69 $ 23 1993 Allowance for doubtful notes and accounts receivable . . . . . 87 26 -- 48 65 1992 Allowance for doubtful notes and accounts receivable . . . . . 101 70 -- 84 87 (1) Reserves were deducted from the assets to which they apply in the Consolidated Statement of Financial Position. (2) Accounts written off less recoveries and other adjustments.
47 EX-23 2 EXHIBIT 23 Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (No. 33-58063, 33-52575, 33-66170, 33-51475, 33-55748, 33-42950, 33-52579, 33-40099, and 33-5332) and in the Prospectuses constituting part of the Registration Statements on Forms S-3 (No. 33-11635 and 33-22897) of Amoco Corporation of our report dated February 28, 1995 appearing on page 4 of this Current Report on Form 8-K. PRICE WATERHOUSE LLP Chicago, Illinois April 5, 1995 -----END PRIVACY-ENHANCED MESSAGE-----