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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
April 29, 1999
(Date of Report - Date of earliest event reported)
KERR-MCGEE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-3939 73-0311467
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
Kerr-McGee Center
Oklahoma City, Oklahoma 73125
(Address of principal executive offices) (Zip Code)
(405) 270-1313
(Registrant's telephone number)
Item 5. Other Events
On April 29, 1999, Kerr-McGee Corporation issued a press release to
report the 1999 first quarter earnings. A copy of such press release is attached
as Exhibit 99.1 hereto and incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Press Release dated April 29, 1999, reporting Kerr-McGee
Corporation's 1999 first quarter earnings.
SIGNATURES
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.
KERR-MCGEE CORPORATION
By: (Deborah A. Kitchens)
Deborah A. Kitchens
Vice President and Controller
Dated: April 30, 1999
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated April 29, 1999, reporting Kerr-McGee
Corporation's 1999 first quarter earnings.
Kerr-McGee Reports First-Quarter Earnings
OKLAHOMA CITY (April 29, 1999) -- Kerr-McGee Corp. (NYSE: KMG) reports
income from continuing operations of $8 million (9 cents per diluted share) in
the 1999 first quarter, compared with $16 million (18 cents per diluted share)
in the 1998 first quarter, before recognition of special charges. Financial
results for both periods have been restated to reflect completion of the
company's merger with Oryx Energy Company on Feb. 26, 1999. The merger was
accounted for as a pooling of interests.
Including special charges, the first-quarter net loss was $111 million
($1.28 per share), compared with net income of $24 million (27 cents per share)
in the year-earlier period. The 1999 first-quarter results include special
after-tax charges of $114 million ($1.32 per share) to provide for
merger-related expenses.
"Severely depressed oil and gas prices experienced during the first two
months of 1999 were somewhat mitigated by increased oil production volumes,
price improvements in March and substantially improved results for titanium
dioxide pigment," said Luke R. Corbett, Kerr-McGee chief executive officer.
"While the recent improvement in oil and gas prices is encouraging, we remain
diligent in our efforts to cut costs. We are also confident in our ability to
achieve the synergies created by the merger with Oryx Energy."
Operating profit for the quarter was $54 million, compared with $55
million in the 1998 first quarter.
Exploration and production operating profit was $25 million, a decline
of $8 million from the year-earlier quarter. The decrease resulted primarily
from oil and natural gas price declines of 22% and 14%, respectively, and a
decrease in proprietary gas sales of 3%, compared with the 1998 quarter. These
price and gas volume declines were partially offset by lower exploration
expenses and higher oil production, primarily in the North Sea and the Gulf of
Mexico.
Chemical operations recorded strong results with an increase in
operating profit of 32% to $29 million. The improvement was due to higher
European sales volumes associated with the acquisition of Bayer's European
titanium dioxide business in 1998, lower per-unit costs, principally at the
company's Hamilton, Miss., plant, and higher overall average prices.
Kerr-McGee's proprietary oil production averaged 179,900 barrels per
day, up from 161,400 barrels per day in the 1998 first quarter. The average
price of oil sold was $10.89 per barrel, compared with $14.05 a year earlier.
Proprietary natural gas sales were 570 million cubic feet per day, down
from 585 million cubic feet per day a year earlier. Natural gas sales prices
averaged $1.91 per thousand cubic feet, a 31-cent decline compared with the
prior-year quarter.
First-quarter sales were $486 million, compared with $507 million in
the 1998 first quarter. Cash capital expenditures in the 1999 first quarter
were $180 million, compared with $288 million a year earlier. The 1998 amount
excludes the European pigment acquisition.
Kerr-McGee is an Oklahoma City-based energy and chemical company with
worldwide operations and assets of $5.5 billion.
(Forward-looking statements in this news release depend on certain
events, risks and uncertainties that may be outside the company's control, such
as the success of the oil and gas exploration and production program, acceptance
of consumer products for which Kerr-McGee's chemical business supplies raw
materials, general economic conditions and other risks discussed in the
company's Form 10-K and Form 10-Q, filed with the Securities and Exchange
Commission. Actual results and developments may differ from those expressed or
implied in this news release.)
CONTACT: Debbie Schramm
(405) 270-2877
99-14
<PAGE>
<TABLE>
KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
(Unaudited)
<CAPTION>
Three Months Ended
March 31, % Inc
----------------------
(Millions of dollars, except per-share amounts) 1999 1998 (*) (Dec)
--------- --------- -------
<S> <C> <C> <C>
Consolidated Statement of Income
Sales $ 485.9 $ 506.7 (4)
-------- --------
Costs and Expenses
Costs and operating expenses 225.1 216.8 4
Selling, general and administrative expenses 52.7 40.6 30
Depreciation and depletion 131.2 129.7 1
Exploration, including dry holes and
amortization of undeveloped leases 28.8 70.3 (59)
Taxes, other than income taxes 15.3 8.7 76
Merger costs 155.1 - NM
Interest and debt expense 44.7 34.8 28
-------- --------
Total Costs and Expenses 652.9 500.9 30
-------- --------
(167.0) 5.8 NM
Other Income 16.4 22.5 (27)
-------- --------
Income (Loss) from Continuing Operations
before Income Taxes (150.6) 28.3 NM
Provision (Benefit) for Income Taxes (44.1) 12.5 NM
-------- --------
Income (Loss) from Continuing Operations (106.5) 15.8 NM
Income from Discontinued Operations,
Net of Income Taxes - 8.0 NM
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes (4.1) - NM
-------- --------
Net Income (Loss) $ (110.6) $ 23.8 NM
======== ========
Earnings (Loss) per Common Share
Diluted
Continuing operations excluding special items $ 0.09 $ 0.18 (50)
Continuing operations (1.23) 0.18 NM
Cumulative effect of a change in accounting principle (0.05) - NM
Net income (1.28) 0.27 NM
Basic
Continuing operations excluding special items 0.09 0.18 (50)
Continuing operations (1.23) 0.18 NM
Cumulative effect of a change in accounting principle (0.05) - NM
Net income $ (1.28) $ 0.27 NM
Average Shares Outstanding (thousands) 86,372 86,843 (1)
Shares Outstanding at End of Period (thousands) 86,373 86,903 (1)
Foreign Currency Gains (Losses) $ 8.4 $ (1.5) NM
Selected Balance Sheet Information
Cash 208.5 222.2 (6)
Current Assets 1,002.8 1,012.0 (1)
Total Assets 5,513.8 5,586.1 (1)
Current Liabilities 965.2 971.0 (1)
Short-Term Debt 229.4 47.7 NM
Long-Term Debt 2,269.5 1,921.6 18
Stockholders' Equity 1,211.1 1,598.2 (24)
Selected Cash Flow Information
Cash Provided by Operating Activities 62.1 186.8 (67)
Depreciation, Depletion and Amortization 141.5 143.3 (1)
Dividends Paid 21.2 21.5 (1)
Cash Capital Expenditures
Exploration and production 156.0 269.7 (42)
Chemicals 22.4 12.0 87
-------- --------
178.4 281.7 (37)
All other 1.4 5.0 (72)
Discontinued operations - 1.2 NM
-------- --------
Total $ 179.8 $ 287.9 (38)
======== ========
(*) Certain prior year amounts have been reclassified to conform with
the current year's presentation.
</TABLE>
<PAGE>
<TABLE>
KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
(Unaudited)
<CAPTION>
Three Months Ended
March 31, % Inc
-------------------
(Millions of dollars) 1999 1998(*) (Dec)
-------- ------- -----
<S> <C> <C> <C>
Segment Information
Sales
Exploration and production $ 283.1 $328.4 (14)
Chemicals 202.7 178.2 14
-------- -------
485.8 506.6 (4)
All other 0.1 0.1 -
-------- -------
Total $ 485.9 $506.7 (4)
======== =======
Operating Profit
Exploration and production
Domestic $ 27.6 $ 56.7 (51)
North Sea 24.6 43.4 (43)
Other International 1.6 3.2 (50)
-------- -------
Total Production Operations 53.8 103.3 (48)
Exploration Expense (29.0) (70.0) (59)
Restructuring Reserve - (0.5) NM
-------- -------
24.8 32.8 (24)
Chemicals 28.1 21.9 28
-------- -------
Total 52.9 54.7 (3)
Net Interest Expense (42.0) (31.0) 35
Income from Equity Affiliates 2.3 6.5 (65)
Other Expense (4.0) (1.9) 111
Merger and Transition Costs (159.8) - NM
Taxes on Income 44.1 (12.5) NM
-------- -------
Income (Loss) from Continuing Operations (106.5) 15.8 NM
Income from Discontinued Operations,
Net of Income Taxes - 8.0 NM
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes (4.1) - NM
-------- -------
Net Income (Loss) $(110.6) $ 23.8 NM
======== =======
Net Operating Profit
Exploration and production $ 10.3 $ 18.2 (43)
Chemicals 17.6 13.1 34
-------- -------
Total 27.9 31.3 (11)
Net Interest Expense (24.7) (19.9) 24
Income from Equity Affiliates 1.5 6.5 (77)
Other Income (Expense) 2.4 (2.1) NM
Merger and Transition Costs (113.6) - NM
Income from Discontinued Operations,
Net of Income Taxes - 8.0 NM
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes (4.1) - NM
-------- -------
Net Income (Loss) $(110.6) $ 23.8 NM
======== =======
Special Items, Net of Income Taxes
Merger costs $(110.5) $ - NM
Transition costs and other (3.7) - NM
-------- -------
Total $(114.2) $ - NM
======== =======
(*) Certain prior year amounts have been reclassified to conform
with the current year's presentation.
</TABLE>
<PAGE>
<TABLE>
KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
(Unaudited)
<CAPTION>
Three Months Ended
March 31, % Inc
-------------------
(Millions of dollars) 1999 1998(*) (Dec)
------- ------- -----
<S> <C> <C> <C>
Segment Information Excluding Special Items
Operating Profit
Exploration and production
Domestic $ 27.6 $ 56.7 (51)
North Sea 24.6 43.4 (43)
Other International 1.6 3.2 (50)
-------- -------
Total Production Operations 53.8 103.3 (48)
Exploration Expense (29.0) (70.0) (59)
Restructuring Reserve - (0.5) NM
-------- -------
24.8 32.8 (24)
Chemicals 28.9 21.9 32
-------- -------
Total 53.7 54.7 (2)
Net Interest Expense (42.0) (31.0) 35
Income from Equity Affiliates 2.3 6.5 (65)
Other Expense (3.7) (1.9) 95
Taxes on Income (2.6) (12.5) (79)
-------- -------
Income from Continuing Operations
Excluding Special Items 7.7 15.8 (51)
Special Items, Net of Income Taxes (114.2) - NM
Income from Discontinued Operations,
Net of Income Taxes - 8.0 NM
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes (4.1) - NM
-------- -------
Net Income (Loss) $(110.6) $ 23.8 NM
======== =======
Net Operating Profit
Exploration and production $ 10.3 $ 18.2 (43)
Chemicals 18.1 13.1 38
-------- -------
Total 28.4 31.3 (9)
Net Interest Expense (24.7) (19.9) 24
Income from Equity Affiliates 1.5 6.5 (77)
Other Income (Expense) 2.5 (2.1) NM
Special Items, Net of Income Taxes (114.2) - NM
Income from Discontinued Operations,
Net of Income Taxes - 8.0 NM
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes (4.1) - NM
-------- -------
Net Income (Loss) $(110.6) $ 23.8 NM
======== =======
Selected Exploration and Production Segment Information
Depreciation and depletion $ 114.0 $113.4 1
Dry hole expense 4.8 37.4 (87)
Production (lifting) cost (**) 84.5 93.4 (10)
(*) Certain prior year amounts have been reclassified to conform
with the current year's presentation. (**) Includes operating
expenses, abandonment provision and production taxes.
</TABLE>
<PAGE>
<TABLE>
KERR-McGEE CORPORATION AND SUBSIDIARY COMPANIES
(Unaudited)
<CAPTION>
Three Months Ended
March 31, % Inc
---------------------
1999 1998(*) (Dec)
--------- -------- ------
<S> <C> <C> <C>
Crude oil & condensate production
(thousands of bbls/day)
Domestic
Offshore 50.2 44.9 12
Onshore 19.1 26.1 (27)
North Sea 94.3 72.7 30
Other International 16.3 17.7 (8)
--------- --------
Total proprietary production 179.9 161.4 11
Proportionate interest in equity
affiliate's production 6.9 7.3 (5)
--------- --------
Total 186.8 168.7 11
========= ========
Average price of crude oil sold (per bbl.)
Domestic
Offshore $ 9.73 $13.80 (29)
Onshore 11.23 14.29 (21)
North Sea 11.60 13.85 (16)
Other International 8.83 11.41 (23)
Average $10.89 $14.05 (22)
Natural gas sold (MMCF/day)
Domestic
Offshore 347 313 11
Onshore 165 223 (26)
North Sea 58 49 18
--------- --------
Total proprietary sales 570 585 (3)
Proportionate interest in equity
affiliate's sales 80 62 29
--------- --------
Total 650 647 -
========= ========
Average price of natural gas sold (per MCF)
Domestic
Offshore $ 1.67 $ 2.15 (22)
Onshore 1.61 2.13 (24)
North Sea 2.52 2.74 (8)
Average $ 1.91 $ 2.22 (14)
Industrial and specialty chemical sales
(thousands of metric tons) 105 93 13
Heavy minerals sales
(thousands of metric tons) 10 11 (9)
Treated forest product sales
(millions of board feet) 47 53 (11)
(*) Certain prior year amounts have been reclassified to conform
with the current year's presentation.
</TABLE>
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