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: January 31, 1994
UNOCAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-8483 95-3825062
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1201 West Fifth Street, Los Angeles, California 90017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 977-7600
Item 5. Other Events
On January 31, 1994, the following news release was issued:
UNOCAL OPERATING EARNINGS UP BY 48 PERCENT FOR YEAR;
AT $70 MILLION FOR FOURTH QUARTER
Los Angeles, January 31 -- Unocal Corporation today said that preliminary
1993 operating earnings, excluding the effects of accounting changes and other
special items (detailed in attached table), were $347 million, or $1.29 per
common share.
This compares with full-year 1992 operating earnings, excluding special
items, of $234 million, or 91 cents per common share.
Including accounting changes and other special items, net earnings for
1993 were $213 million, or 73 cents per common share. Net earnings for 1992
were $220 million, or 85 cents per common share.
Cash flow from operations, before working capital changes, was $1.42
billion in 1993, up 28 percent from $1.11 billion in 1992.
Richard J. Stegemeier, Unocal chairman and chief executive officer, said
that increased operating earnings for full-year 1993 reflected higher domestic
natural gas prices and production, improved West Coast refining and marketing
margins, lower exploration expenses, continued cost reductions, and lower
interest expense.
"For the fourth quarter, Unocal's higher U.S. natural gas volumes -- up
10 percent over fourth quarter 1992 -- indicate that our three-year
accelerated development program is beginning to yield results," Stegemeier
said. "However," he added, "the fourth quarter 1993 was particularly
difficult with the fall in crude oil and domestic natural gas prices and lower
petroleum product margins. These factors offset the production gains and
depressed earnings."
In the fourth quarter 1993, Unocal's earnings from operations, excluding
special items, were $70 million, or 25 cents per common share. This compares
with
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$91 million, or 34 cents per common share, a year earlier.
Including special items, 1993 fourth quarter net earnings were $44
million, or 14 cents per common share. Net earnings for 1992 fourth quarter
were $103 million, or 39 cents per common share.
The fourth quarter 1993 special items included a $12 million writeoff of
refining projects, primarily the cancellation of a portion of the work
associated with the reformulated fuels program at the company's Los Angeles
Refinery. Reformulated fuels programs are continuing, but with lower capital
costs. The results for the quarter also reflected a $10 million charge for
unusual litigation and environmental costs and a $4 million provision for the
closure of the company's credit card processing facility. Credit card
processing was outsourced.
Fourth quarter 1993 cash flow from operations, before working capital
changes, was $356 million, up from $334 million a year ago.
Stegemeier noted that Unocal's worldwide average crude oil sales price
was $12.47 per barrel in the fourth quarter, down from $16.23 per barrel for
the same period in 1992. The average domestic natural gas sales price in the
fourth quarter 1993 was $1.98 per thousand cubic feet (mcf), down from $2.07
per mcf in the fourth quarter a year ago.
Stegemeier said the company is now 80 percent of the way toward meeting
its goal of generating $700 million in after-tax proceeds from asset sales.
At year-end 1993, the company had realized proceeds of $560 million (after-
tax) from asset sales under the initiative announced in April 1992.
In 1993, the company pared its total debt by $176 million to $3.5
billion. In April 1992 Unocal said it planned to reduce total debt by $1.5
billion by 1997. To date, total debt has been reduced by $1.2 billion under
this initiative.
Fourth quarter revenues were $1.97 billion, down from $2.46 billion in
1992. The full-year 1993 revenues were $8.34 billion, down from $10.06
billion a year ago. The company had lower operating revenues because it sold
several businesses in 1992 and 1993.
Fourth quarter capital expenditures rose to $436 million, up from $253
million a year ago. For the full-year 1993, capital expenditures were $1.25
billion, up from $959 million the previous year. The increases reflect the
company's accelerated domestic development drilling program.
Exploration expense for the fourth quarter totaled $31 million, down from
$43 million a year ago. For the full-year, exploration expense was $119
million, compared with $170 million the previous year.
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PETROLEUM EXPLORATION AND PRODUCTION
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Fourth quarter 1993 operating earnings (excluding special items) from
petroleum exploration and production totaled $89 million, compared with $116
million in 1992. Full-year operating earnings were $432 million for 1993,
versus $415 million in 1992.
The quarter and full-year results reflect lower worldwide crude oil
prices, higher domestic natural gas production, lower exploration costs and
other cost reductions.
Net worldwide crude oil and condensate production for the fourth quarter
averaged 245,800 barrels per day, down from 251,200 barrels per day a year
ago.
Fourth quarter daily worldwide natural gas production averaged 1,626
million cubic feet in 1993, compared with 1,609 million cubic feet in 1992.
The average natural gas sales price was $2.02 per mcf, down slightly from
$2.05 per mcf the previous year. Increases in domestic natural gas production
more than offset the decline in foreign production. This decline reflected
continued curtailments in pipeline allocations for Unocal's Gulf of Thailand
operations. A new pipeline, slated for start-up in February 1994, will allow
Unocal to increase its Thai gas volumes.
REFINING, MARKETING AND TRANSPORTATION
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Excluding special items, fourth quarter earnings for Unocal's refining,
marketing and transportation segment totaled $39 million, compared with $43
million in 1992. Full-year 1993 earnings for the segment were $175 million,
up from $127 million in 1992.
For the fourth quarter, margins on refined product sales were lower. The
full-year results reflected higher West Coast margins and lower losses from
the company's Southeast U.S. marketing operations, which are being phased out.
In the fourth quarter, sales of petroleum products averaged 341,600
barrels per day, down from 406,000 barrels per day the previous year. The
sale of the company's Auto/TruckStop system and the continuing phase out of
Southeast U.S. marketing contributed to the lower product sales.
CHEMICALS
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Unocal's chemicals segment recorded earnings (excluding special items) of
$9 million in the fourth quarter and $44 million for the full-year 1993. For
1992, the chemicals segment broke even in the fourth quarter and had earnings
of $24 million for the full year. The improved earnings performance was due
principally to losses incurred in 1992 by businesses that have been sold, as
well as improved petroleum coke operations.
GEOTHERMAL
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Fourth quarter 1993 geothermal earnings, excluding special items, were $6
million, compared with $20 million a year ago. Full-year earnings were $22
million in
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1993, down from $45 million the previous year. Earnings for the quarter and
full-year in the previous year had included the company's Imperial Valley
operations, which were sold in 1993. Also affecting the quarterly and full-
year comparison were higher expenses in Indonesia, where the company is
actively developing new geothermal resources. In Indonesia, a 110-megawatt
power plant is expected to start up in the first quarter 1994.
Corporate and Other
Net expense for corporate and other, excluding special items, were $73
million in the fourth quarter 1993. This compares with $88 million in the
same period in 1992. The 1993 fourth quarter results included a year-to-date
income tax adjustment that was not allocated to the business segments.
The adjusted full-year 1993 expenses were $326 million, versus $377
million in 1992.
The results reflect lower interest expense and improved mineral
operations. Ongoing environmental costs were higher for the full year, but
lower for the quarter.
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<TABLE>
<CAPTION>
UNOCAL CORPORATION
1993 EARNINGS PRESS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS - CONSOLIDATED
(UNAUDITED)
For the Three Months Ended For the Twelve Months Ended
Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1992
Dollars in millions except per share amounts
<S> <C> <C> <C> <C>
Reported Earnings $44 $103 $213 $220
Less special items:
Cumulative effect of accounting changes
- for postretirement health care costs (SFAS 106) - - (121) -
- for postemployment benefits (SFAS 112) - - (9) -
- for income taxes (SFAS 109) - - - 24
Major asset sales - 30 66 29
Unusual environmental/litigation costs (10) (11) (40) (57)
Effect of Federal tax rate change on deferred taxes - - (14) -
Write-down of assets (12) (20) (12) (20)
Provision for closing the Credit Card Center (4) - (4) -
Restructuring costs - - - (34)
Tax benefit on foreign exploration expense - 13 - 44
Total Special Items (26) 12 (134) (14)
Adjusted Earnings 70 91 347 234
Less: Dividends on Preferred Stock 9 9 36 17
Adjusted Earnings applicable
to Common Shares $61 $82 $311 $217
Adjusted Earnings per Common Share $0.25 $0.34 $1.29 $0.91
</TABLE>
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<TABLE>
<CAPTION>
UNOCAL CORPORATION
1993 EARNINGS PRESS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS ALLOCATED BY BUSINESS SEGMENTS
(UNAUDITED)
For the Three Months Ended For the Twelve Months Ended
Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1993 Dec. 31, 1992
Dollars in millions except per share amounts
<S> <C> <C> <C> <C>
U.S. PETROLEUM EXPLORATION AND PRODUCTION
Reported Earnings $26 $86 $235 $219
Less special items:
Major asset sales 1 - 18 -
Unusual environmental/litigation costs (4) - (4) -
Effect of Federal tax rate change on deferred taxes - - (5) -
Restructuring costs - - - (6)
Adjusted U.S. E&P Earnings $29 $86 $226 $225
FOREIGN PETROLEUM EXPLORATION AND PRODUCTION
Reported Earnings $60 $64 $212 $243
Less special items:
Major asset sales - 30 5 30
Unusual environmental/litigation costs - - - (9)
Effect of Federal tax rate change on deferred taxes - - 1 -
Write-down of assets - (9) - (9)
Restructuring costs - - - (3)
Tax benefit on foreign exploration expense - 13 - 44
Adjusted Foreign E&P Earnings $60 $30 $206 $190
REFINING, MARKETING AND TRANSPORTATION
Reported Earnings $23 $38 $166 $102
Less special items:
Write-down of assets (12) (5) (12) (5)
Provision for closing the Credit Card Center (4) - (4) -
Major asset sales - - 15 (1)
Unusual environmental/litigation costs - - (1) (1)
Effect of Federal tax rate change on deferred taxes - - (7) -
Restructuring costs - - - (18)
Adjusted RM&T Earnings $39 $43 $175 $127
CHEMICALS
Reported Earnings $9 $0 $42 $23
Less special items:
Major asset sales - - (1) -
Effect of Federal tax rate change on deferred taxes - - (1) -
Restructuring costs - - - (1)
Adjusted Chemicals Earnings $9 $0 $44 $24
GEOTHERMAL
Reported Earnings $5 $20 $46 $38
Less special items:
Major asset sales (1) - 25 -
Unusual environmental/litigation costs - - - (6)
Effect of Federal tax rate change on deferred taxes - - (1) -
Restructuring costs - - - (1)
Adjusted Geothermal Earnings $6 $20 $22 $45
CORPORATE AND OTHER
Reported Earnings ($79) ($105) ($358) ($429)
Less special items:
Major asset sales - - 4 -
Unusual environmental/litigation costs (6) (11) (35) (41)
Effect of Federal tax rate change on deferred taxes - - (1) -
Write-down of assets - (6) - (6)
Restructuring costs - - - (5)
Adjusted Corporate and Other ($73) ($88) ($326) ($377)
Total Adjusted Earnings $70 $91 $347 $234
Less: Dividends on preferred stock 9 9 36 17
Adjusted Earnings Applicable to Common Shares $61 $82 $311 $217
Adjusted Earnings per Common Share $0.25 $0.34 $1.29 $0.91
</TABLE>
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<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
FINANCIAL DATA
(UNAUDITED)
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
Dollars in millions except per share amounts 1993 1992 1993 1992
<S> <C> <C> <C> <C>
Total revenues (a) $1,965 $2,461 $8,344 $10,061
Costs and other deductions (a) 1,908 2,303 7,733 9,712
Earnings before income taxes 57 158 611 349
Income taxes 13 55 268 153
Earnings before cumulative effect of accounting changes 44 103 343 196
Cumulative effect of accounting changes - - (130) 24
Net earnings $44 $103 $213 $220
Dividends on preferred stock 9 9 36 17
Net earnings applicable to common shares $35 $94 $177 $203
Earnings per common share: (b)
Before cumulative effect of accounting changes $0.14 $0.39 $1.27 $0.75
Cumulative effect of accounting changes - - (0.54) 0.10
Net earnings $0.14 $0.39 $0.73 $0.85
(a) Includes consumer excise taxes of $208 $238 $816 $992
(b) Based on weighted average common
shares outstanding (in millions) 241 241 241 238
NET EARNINGS BY BUSINESS SEGMENT
(UNAUDITED)
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
Millions of dollars 1993 1992 1993 1992
Petroleum
Exploration and Production
United States $26 $86 $235 $219
Foreign 60 64 212 243
Refining, Marketing and Transportation (a) 23 38 166 102
Chemicals 9 0 42 23
Geothermal 5 20 46 38
Corporate and Other (b) (c) (79) (105) (358) (429)
Sub-total 44 103 343 196
Cumulative effect of accounting changes - - (130) 24
Total $44 $103 $213 $220
(a) Includes equity in earnings of affiliates (after-tax) of $15 $18 $55 $63
(b) Includes minerals and real estate operations.
(c) Includes net interest expense (after-tax) of ($47) ($54) ($193) ($246)
</TABLE>
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<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED)
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Net daily production (a)
Crude oil and condensate (thousand barrels):
United States 144.8 152.2 147.5 151.3
Foreign 101.0 99.0 98.4 100.2
Total 245.8 251.2 245.9 251.5
Natural gas (million cubic feet):
United States 1,016 921 952 933
Foreign 610 688 647 647
Total 1,626 1,609 1,599 1,580
Natural gas liquids (thousand barrels) 20.1 17.6 19.7 18.0
Geothermal (million kilowatt-hours) 19.2 22.4 20.1 22.7
Input to crude oil processing units (thousand barrels daily) (b) 285.9 290.7 287.6 286.3
Sales of petroleum products (thousand barrels daily) (b) 341.6 406.0 344.9 417.0
Capital expenditures (millions of dollars) 436 253 1,249 959
Exploration expense (millions of dollars) 31 43 119 170
Dry hole costs (millions of dollars) 17 20 45 68
Cash flows from operating activities (millions of dollars)
Excluding working capital changes 356 334 1,416 1,114
Including working capital changes 409 562 1,088 1,157
Proceeds from asset sales (millions of dollars) 7 115 586 469
Average sales prices
Crude oil and condensate (per barrel):
United States $11.69 $15.51 $13.68 $15.34
Foreign $13.80 $17.69 $15.26 $17.33
Worldwide $12.47 $16.23 $14.21 $15.99
Natural gas (per mcf):
United States $1.98 $2.07 $1.97 $1.74
Foreign $2.10 $2.02 $2.07 $2.17
Worldwide $2.02 $2.05 $2.01 $1.92
(a) Includes net profits type agreements on a gross basis.
(b) Includes the company's 50% equity portion of The UNO-VEN Company.
</TABLE>
[TEXT]
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SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNOCAL CORPORATION
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(Registrant)
by: CHARLES S. MCDOWELL
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(Charles S. McDowell, Vice
President and Comptroller)
Dated: January 31, 1994
