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: October 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
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ITEM 5. OTHER EVENTS
On October 31, 1994, the following news release was issued:
UNOCAL REPORTS $60 MILLION EARNINGS FOR THIRD QUARTER
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Los Angeles, October 31 -- Unocal Corporation today reported third
quarter 1994 net earnings of $60 million, or 21 cents per common share,
compared with $70 million, or 25 cents per common share, for the same
period a year ago. Total revenues were $2.02 billion, up slightly from
$1.96 billion a year ago.
Excluding the effects of special items (detailed in attached table),
Unocal's earnings from operations for the third quarter were $59 million,
or 21 cents per common share. This compares with operating earnings of $91
million, or 34 cents per common share, for the same period last year.
For the first nine months of 1994, Unocal's reported net earnings were
$164 million, or 57 cents per common share. This compares with $169
million, or 59 cents per common share, for the same period a year ago.
Nine-months revenues were $5.98 billion, down from $6.38 billion last year.
Adjusting for special items, earnings from operations for the nine
months were $186 million, down from $277 million last year. Adjusted
earnings per common share were 66 cents, down from $1.04.
Roger C. Beach, Unocal chief executive officer, said the company's
third quarter operating earnings were adversely affected by significantly
lower natural gas prices and reduced margins from petroleum refining and
marketing operations.
"On the plus side," Beach said, "our worldwide crude oil and
condensate production is up nearly 10 percent, while natural gas production
is about 17 percent above the third quarter a year ago."
Beach noted, however, that domestic oil production in the third
quarter declined 6 percent from the same period a year ago. He said that
he expects the company's U.S. oil production will continue to decline,
reflecting the company's capital spending focus on natural gas projects
worldwide and the possible sales of various U.S. producing properties.
Unocal's average worldwide crude oil sales price was $14.95 per barrel
in the third quarter, up from $13.76 per barrel last year. The company's
worldwide average natural gas sales price was $1.76 per thousand cubic feet
(mcf), down from $2.04 per mcf in the third quarter 1993.
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"The higher crude oil prices, while contributing to improved upstream
earnings, put additional pressures on margins for our West Coast refining
and marketing business," Beach said. "We're taking steps to increase the
cash flow and earnings from our downstream business by improving efficiency
and adding ancillary businesses to our marketing network."
Beach also noted that margins on export sales of urea and ammonia
products were significantly higher in the third quarter.
Cash flow from operations in the third quarter, before working capital
changes, was $331 million, down from $346 million.
Capital expenditures for the third quarter were $321 million, down
slightly from $324 million in the same period a year ago.
THIRD QUARTER OPERATIONS
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Petroleum exploration and production earnings were $111 million, up
from $106 million a year ago. The higher earnings were due principally to
increased worldwide crude oil and natural gas production. This was offset
partially by lower domestic natural gas prices. The company's foreign
exploration and production operations recorded significant gains due to
higher crude oil production in Indonesia and the Netherlands and increased
natural gas sales in Thailand due to increased pipeline allocations.
Adjusted for special items, earnings from petroleum exploration and
production operations were $105 million, up from $101 million in the same
period a year ago.
Earnings from refining, marketing and transportation were $18 million,
down from $49 million in the third quarter 1993. Adjusting for special
items, operating earnings from the downstream segment were $21 million,
down from $56 million a year ago.
Chemicals earnings were $12 million, up from $5 million in the third
quarter 1994. This increase reflected higher margins on export sales of
ammonia-based agricultural products.
Geothermal earnings were $11 million, up from $3 million a year ago.
The improved earnings reflected lower domestic expense and the beginning of
commercial operations at the Salak field in Indonesia.
Net expense for corporate and other was $92 million in the third
quarter 1994. This compares with an expense of $93 million in the same
period of 1993. Adjusted for special items, net expense for corporate and
other was $89 million, compared with $76 million last year. The third
quarter 1993 reflected favorable adjustments for California state income
tax provisions.
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<TABLE>
<CAPTION>
UNOCAL CORPORATION
1994 EARNINGS NEWS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS - CONSOLIDATED
(UNAUDITED)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
1994 1993 1994 1993
---- ---- ---- ----
Dollars in millions except per share amounts
<S> <C> <C> <C> <C>
Reported earnings $60 $70 $164 $169
Less: Special items
Cumulative effect of accounting changes
- for postretirement health care costs (SFAS 106) - - - (121)
- for postemployment benefits (SFAS 112) - - - (9)
Write-down of investment and provision for abandonment
and remediation of the Guadalupe oil field (4) - (31) -
Litigation - (15) (17) (24)
Mesa settlement - - 24 -
Asset sales 10 9 12 66
Effect of federal tax rate change on deferred taxes - (14) - (14)
Other (5) (1) (10) (6)
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Total special items 1 (21) (22) (108)
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Adjusted earnings 59 91 186 277
Less: Dividends on preferred stock 9 9 27 27
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Adjusted earnings applicable to common shares $50 $82 $159 $250
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Adjusted earnings per common share $0.21 $0.34 $0.66 $1.04
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
1994 EARNINGS NEWS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS ALLOCATED BY BUSINESS SEGMENTS
(UNAUDITED)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
1994 1993 1994 1993
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Dollars in millions except per share amounts
<S> <C> <C> <C> <C>
U.S. PETROLEUM EXPLORATION AND PRODUCTION
Reported earnings $37 $56 $107 $209
Less special items:
Write-down of investment and provision for abandonment
and remediation of the Guadalupe oil field (4) - (31) -
Asset sales (6) (1) (8) 17
Effect of federal tax rate change on deferred taxes - (5) - (5)
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Adjusted U.S. E&P earnings $47 $62 $146 $197
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FOREIGN PETROLEUM EXPLORATION AND PRODUCTION
Reported earnings $74 $50 $154 $152
Less special items:
Asset sales 16 10 16 5
Effect of federal tax rate change on deferred taxes - 1 - 1
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Adjusted Foreign E&P earnings $58 $39 $138 $146
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REFINING, MARKETING AND TRANSPORTATION
Reported earnings $18 $49 $97 $143
Less special items:
Asset sales (1) - - 15
Litigation - - - (1)
Effect of federal tax rate change on deferred taxes - (7) - (7)
Other (2) - (2) -
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Adjusted R,M&T earnings $21 $56 $99 $136
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CHEMICALS
Reported earnings $12 $5 $34 $33
Less special items:
Asset sales 1 - 1 (1)
Effect of federal tax rate change on deferred taxes - (1) - (1)
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Adjusted Chemicals earnings $11 $6 $33 $35
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GEOTHERMAL
Reported earnings $11 $3 $25 $41
Less special items:
Asset sales - - - 26
Effect of federal tax rate change on deferred taxes - (1) - (1)
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Adjusted Geothermal earnings $11 $4 $25 $16
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CORPORATE AND OTHER
Reported earnings ($92) ($93) ($253) ($279)
Less special items:
Mesa settlement - - 24 -
Litigation - (15) (17) (23)
Asset sales - - 3 4
Effect of federal tax rate change on deferred taxes - (1) - (1)
Other (3) (1) (8) (6)
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Adjusted Corporate and Other ($89) ($76) ($255) ($253)
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Total adjusted earnings $59 $91 $186 $277
Less: Dividends on preferred stock 9 9 27 27
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Adjusted earnings applicable to common shares $50 $82 $159 $250
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Adjusted earnings per common share $0.21 $0.34 $0.66 $1.04
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
FINANCIAL DATA
(UNAUDITED)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
Dollars in millions except per share amounts ------------------ -------------------
1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Total revenues (a) $ 2,020 $ 1,963 $ 5,981 $ 6,379
Costs and other deductions (a) 1,900 1,819 5,660 5,825
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Earnings before income taxes 120 144 321 554
Income taxes 60 74 157 255
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Earnings before cumulative effect of accounting changes 60 70 164 299
Cumulative effect of accounting changes - - - (130)
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Net earnings $ 60 $ 70 $ 164 $ 169
Dividends on preferred stock 9 9 27 27
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Net earnings applicable to common shares $ 51 $ 61 $ 137 $ 142
Earnings per common share: (b)
Before cumulative effect of accounting changes $ 0.21 $ 0.25 $ 0.57 $ 1.13
Cumulative effect of accounting changes - - - (0.54)
Net earnings $ 0.21 $ 0.25 $ 0.57 $ 0.59
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(a) Includes consumer excise taxes of $ 229 $ 194 $ 686 $ 608
(b) Based on weighted average common shares outstanding 243 241 242 241
(in millions)
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</TABLE>
<TABLE>
<CAPTION>
NET EARNINGS BY BUSINESS SEGMENT
(UNAUDITED)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
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Millions of dollars 1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Petroleum
Exploration and Production
United States $ 37 $ 56 $ 107 $ 209
Foreign 74 50 154 152
Refining, Marketing and Transportation (a) 18 49 97 143
Chemicals 12 5 34 33
Geothermal 11 3 25 41
Corporate and Other (b) (c) (92) (93) (253) (279)
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Sub-total 60 70 164 299
Cumulative effect of accounting changes - - - (130)
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Total $ 60 $ 70 $ 164 $ 169
(a) Includes equity in earnings of affiliates (after-tax) of $ 8 $ 11 $ 41 $ 40
(b) Includes minerals and real estate operations.
(c) Includes net interest expense (after-tax) of $ (40) $ (48) $ (130) $ (146)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Net daily production (a)
Crude oil and condensate (thousand barrels):
United States 135.8 143.9 139.1 148.3
Foreign:
Far East 92.2 65.2 85.3 67.5
Other 33.8 29.7 36.4 30.0
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Total Foreign 126.0 94.9 121.7 97.5
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Worldwide 261.8 238.8 260.8 245.8
Natural gas (million cubic feet):
United States 1,115 956 1,117 936
Foreign:
Far East 653 551 605 612
Other 35 38 55 48
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Total Foreign 688 589 660 660
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Worldwide 1,803 1,545 1,777 1,596
Natural gas liquids (thousand barrels) 23.0 19.2 21.4 19.4
Geothermal (million kilowatt-hours) 21.6 19.6 20.6 20.4
Average sales prices
Crude oil and condensate (per barrel):
United States $ 14.48 $ 13.28 $ 12.83 $ 14.39
Foreign:
Far East $ 15.61 $ 14.96 $ 14.46 $ 16.08
Other $ 15.73 $ 14.43 $ 14.05 $ 15.46
Total Foreign $ 15.66 $ 14.74 $ 14.30 $ 15.83
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Worldwide $ 14.95 $ 13.76 $ 13.41 $ 14.86
Natural gas (per mcf):
United States $ 1.64 $ 1.96 $ 1.85 $ 1.95
Foreign:
Far East $ 1.97 $ 2.16 $ 1.99 $ 2.12
Other $ 1.65 $ 2.11 $ 1.77 $ 1.63
Total Foreign $ 1.96 $ 2.16 $ 1.97 $ 2.07
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Worldwide $ 1.76 $ 2.04 $ 1.89 $ 1.99
(a) Includes net profits type agreements on a gross basis.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED)
For the Three Months For the Nine Months
Ended September 30 Ended September 30
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1994 1993 1994 1993
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<S> <C> <C> <C> <C>
Input to crude oil processing units (thousand barrels daily) (a) 273 293 291 288
Sales of petroleum products (thousand barrels daily) (a) 319 327 311 346
Exploration expense (millions of dollars) 25 33 79 88
Dry hole costs (millions of dollars)
United States 16 3 37 19
Foreign 14 7 27 9
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Total 30 10 64 28
Depreciation, Depletion & Amortization 236 230 775 702
Cash flows from operating activities (millions of dollars)
Excluding working capital changes 331 346 1,034 1,060
Including working capital changes 327 186 855 679
Cash flows used in investing activities (millions of dollars)
Pretax proceeds from asset sales 81 33 136 579
Less: capital expenditures 321 324 839 813
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Total (240) (291) (703) (234)
Cash flows from (used in) financing activities (millions of dollars) (44) 91 (164) (429)
(a) Includes the company's 50% equity portion of The UNO-VEN Company.
</TABLE>
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<PAGE>
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)
Dated: October 31, 1994 By: CHARLES S. MCDOWELL
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Charles S. McDowell,
Vice President and Comptroller
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