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 26, 1995
UNOCAL CORPORATION
------------------
(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
<PAGE>
ITEM 5. OTHER EVENTS
On October 26, 1995, the following news release was issued:
UNOCAL REPORTS $59 MILLION EARNINGS FOR THIRD QUARTER
Unocal Corporation today reported third-quarter 1995 net earnings of $59
million, or 20 cents per common share, down 16 percent from $70 million, or 25
cents per common share for the third quarter 1994. Total revenues were nearly
$2.01 billion, down slightly from $2.02 billion for the same quarter last year.
Earnings from operations for the three months ended September 30, 1995,
excluding special items (detailed in the attached tables) were $50 million or 17
cents per common share. This compares with $69 million, or 25 cents per common
share, for the third quarter 1994.
"We've focused on controlling and reducing costs to help counter the effect
of lower natural gas prices and crude oil production and very low refined
product margins," said Roger C. Beach, Unocal chairman and chief executive
officer.
Beach added that Unocal's natural gas production from the Gulf of Mexico,
one of the company's key operating areas, increased by 5 percent over the level
of a year ago in spite of storm related curtailments late in the third quarter.
"This increase was offset by lower crude oil production that reflected the sale
of various domestic producing properties and the natural production decline of
fields in California and the central U.S."
Beach noted 76 Products Company had its first positive quarter for the
year, helped in part by an increase in product sales volumes and lower operating
and selling expenses. "We've nearly completed the refinery modifications needed
to manufacture California reformulated gasoline, and our capital costs are going
to total less than $400 million, compared with earlier estimates of $450
million," he said.
The company's third quarter earnings from agricultural products
reflected a seasonal downturn and costs associated with the start up of the
Kennewick, Wash., fertilizer manufacturing plant, which will begin operations in
the first quarter 1996. "The start-up of this plant will give us additional
capacity to meet demand in the Pacific Rim at the beginning of the growing
season next year," Beach said. Prices for ammonia and urea products remain high,
compared with a year ago.
The company's reported earnings for the third quarter included a
one-time benefit resulting from a $34 million lawsuit settlement to recover
lease bonus and rentals relating to Outer Continental Shelf leases offshore
Florida and Alaska.
1
<PAGE>
For the nine months ended September 30, 1995, net earnings were $211
million or 75 cents per common share. This compares with a loss of $85 million,
or 46 cents per common share, for the same period 1994. Year-to-date revenues
were $6.2 billion, up from $5.98 billion last year.
Earnings from operations for the nine months, excluding special items
(detailed in the attached tables), were $205 million, down 4 percent from $214
million last year. Adjusted earnings per common share for the nine months were
72 cents, down from 77 cents last year.
2
<PAGE>
NEWS RELEASE UNOCAL CORPORATION
CONDENSED CONSOLIDATED EARNINGS STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30 Ended September 30
----------------------------------------------------
Dollars in millions except per share amounts 1995 1994 (c) 1995 1994 (c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues (a) .................................................... $ 2,005 $ 2,020 $ 6,201 $ 5,981
Costs and other deductions (a) ........................................ 1,899 1,883 5,839 5,614
---------------------------------------------------
Earnings before income taxes .......................................... 106 137 362 367
Income taxes .......................................................... 47 67 151 175
--------------------------------------------------
Earnings before cumulative effect of accounting change ................ 59 70 211 192
Cumulative effect of accounting change ................................ -- -- -- (277)
---------------------------------------------------
Net earnings (loss) ................................................... $ 59 $ 70 $ 211 $ (85)
Dividends on preferred stock .......................................... 9 9 27 27
---------------------------------------------------
Net earnings (loss) applicable to common shares ....................... $ 50 $ 61 $ 184 $ (112)
Earnings (loss) per common share: (b)
Before cumulative effect of accounting change ................. $ 0.20 $ 0.25 $ 0.75 $ 0.68
Cumulative effect of accounting change ........................ -- -- -- (1.14)
---------------------------------------------------
Net earnings (loss) ................................................... $ 0.20 $ 0.25 $ 0.75 $ (0.46)
(a) Includes consumer excise taxes of $ 228 $ 229 $ 665 $ 686
(b) Based on weighted average common shares outstanding
(in millions) 247 243 246 242
(c) Restated for the effect of the accounting policy change
recorded in the fourth quarter of 1994.
</TABLE>
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CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
Sep. 30 Dec. 31
--------------------------------
Millions of dollars 1995 (a) 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
<S> <C> <C>
Cash and cash equivalents .............................................................. $ 168 $ 148
Other current assets ................................................................... 1,373 1,380
Investments and long-term receivables .................................................. 1,083 895
Properties - net ....................................................................... 6,967 6,823
Other assets ........................................................................... 142 91
----------------------------
Total assets ................................................................ $9,733 $9,337
Liabilities
Current Liabilities .................................................................... $1,129 $1,257
Long-term debt and capital lease obligations ........................................... 3,895 3,461
Deferred Income taxes .................................................................. 586 643
Other deferred credits and liabilities ................................................. 1,190 1,161
----------------------------
Total liabilities ........................................................... 6,800 6,522
Stockholders' Equity ................................................................... 2,933 2,815
----------------------------
Total liabilities and stockholders' equity .................................. $9,733 $9,337
</TABLE>
(a) Certain amounts have been reclassified to conform to requirements of SFAS
No. 119, "Disclosure about Derivative Financial Instruments and Fair Value
of Financial Instruments".
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
CONDENSED CONSOLIDATED CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30 Ended September 30
----------------------------------------------------------
Millions of dollars 1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
<S> <C> <C> <C> <C>
Cash flow from operations ......................................... $ 309 $ 331 $ 862 $ 1,034
Working capital and other changes related to operations ........... 9 (4) (186) (179)
-------------------------------------------------
Net cash provided by operating activities ................. 318 327 676 855
Cash flows from investing activities
Capital expenditures (includes dry hole costs) ................... (371) (321) (967) (839)
Proceeds from asset sales ......................................... 2 81 130 136
-------------------------------------------------
Net cash used in investing activities ..................... (369) (240) (837) (703)
Cash flows from financing activities
Net increase (decrease) in long-term debt
and capital lease obligations .................................... 129 -- 305 (23)
Dividends paid .................................................... (57) (57) (174) (172)
Other ............................................................. 17 13 50 31
-------------------------------------------------
Net cash provided by (used in) financing activities ....... 89 (44) 181 (164)
Increase (decrease) in cash and cash equivalents ........................... 38 43 20 (12)
Cash and cash equivalents at beginning of period ........................... 130 150 148 205
-------------------------------------------------
Cash and cash equivalents at end of period ................................. $ 168 $ 193 $ 168 $ 193
</TABLE>
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SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30 Ended September 30
----------------------------------------------------------
1995 1994 1995 1994
----------------------------------------------------------
Exploration expense
Oil & Gas
<S> <C> <C> <C> <C>
United States ................................. $ 6 $ 6 $ 26 $ 15
Foreign ....................................... 24 18 57 62
Geothermal ............................................ 0 1 2 2
------------------------------------------------------
Total ......................................... $ 30 $ 25 $ 85 $ 79
Dry hole costs
Oil & Gas
United States ................................. $ 23 $ 16 $ 27 $ 37
Foreign ....................................... 6 11 19 24
Geothermal ............................................ 2 3 4 3
-------------------------------------------------------
Total ......................................... $ 31 $ 30 $ 50 $ 64
Depreciation, Depletion & Amortization ......................... $237 $220 $704 $729
</TABLE>
4
<PAGE>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30 Ended September 30
---------------------------------------------------
1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Net daily production (a)
Crude oil and condensate (thousand barrels):
<S> <C> <C> <C> <C>
United States ............................................. 123.6 135.8 126.4 139.1
Foreign:
Far East ............................................. 81.9 92.2 84.6 85.3
Other ................................................ 29.6 33.8 30.3 36.4
---------------------------------------------------
Total Foreign 111.5 126.0 114.9 121.7
---------------------------------------------------
Worldwide ....................................................... 235.0 261.8 241.3 260.8
Natural gas (million cubic feet):
United States ............................................. 1,077 1,115 1,109 1,117
Foreign:
Far East ............................................. 577 653 597 605
Other ................................................ 55 35 48 55
---------------------------------------------------
Total Foreign 632 688 645 660
---------------------------------------------------
Worldwide ....................................................... 1,709 1,803 1,754 1,777
Natural gas liquids (thousand barrels) .............................. 20.2 23.0 21.4 21.4
Geothermal (million kilowatt-hours) ................................. 17.7 21.6 16.0 20.6
Input to crude oil processing units (thousand barrels daily) (b) ............... 220 235 207 230
Sales of petroleum products (thousand barrels daily) (b) ....................... 269 247 251 243
</TABLE>
<TABLE>
Average sales prices
Crude oil and condensate (per barrel):
<S> <C> <C> <C> <C>
United States .................................................... $ 14.83 $ 14.48 $ 15.17 $ 12.83
Foreign:
Far East .................................................... $ 15.26 $ 15.61 $ 16.11 $ 14.46
Other ....................................................... $ 15.12 $ 15.73 $ 15.84 $ 14.05
Total Foreign $ 15.21 $ 15.66 $ 16.01 $ 14.30
---------------------------------------------------
Worldwide .............................................................. $ 14.98 $ 14.95 $ 15.51 $ 13.41
Natural gas (per mcf):
United States .................................................... $ 1.43 $ 1.64 $ 1.49 $ 1.85
Foreign:
Far East .................................................... $ 2.05 $ 1.97 $ 2.00 $ 1.99
Other ....................................................... $ 1.21 $ 1.65 $ 1.14 $ 1.77
Total Foreign $ 1.97 $ 1.96 $ 1.94 $ 1.97
--------------------------------------------------
Worldwide .............................................................. $ 1.64 $ 1.76 $ 1.66 $ 1.89
</TABLE>
(a) Includes production sharing agreements on a gross basis.
(b) Restated 1994 to exclude 50% of the volumes of The UNO-VEN Company.
5
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
<TABLE>
<CAPTION>
3rd Quarter of 1995 3rd Quarter of 1994
---------------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- -----------------------------------------------------------------------------------------------------------------------------------
Petroleum
Exploration & Production:
<S> <C> <C> <C> <C>
United States .................................................... $ 85 $ 52 $ 76 $ 48
Foreign .......................................................... 88 46 139 74
Refining & Marketing:
76 Products Company .............................................. 11 6 10 6
Other ............................................................ -- -- 2 1
Geothermal & Power Operations .......................................... 13 7 18 11
Diversified Businesses:
Agricultural Products ............................................ 5 4 10 6
Carbon & Minerals ................................................ 14 12 20 14
Pipelines ........................................................ 19 14 14 12
Other ............................................................ 3 2 (2) (1)
Corporate & Unallocated
Administrative & General ......................................... (33) (21) (45) (28)
Interest expense - net ........................................... (68) (47) (59) (40)
Environmental & Litigation expense ............................... (15) (10) (22) (15)
Other ............................................................ (16) (6) (25) (18)
--------------------------------------------------
Earnings before cumulative effect of accounting change ................. 106 59 136 70
Cumulative effect of accounting change ................................. -- -- -- --
--------------------------------------------------
Total ...................................................... $ 106 $ 59 $ 136 $ 70
</TABLE>
The Exploration & Production segment is engaged in the exploration for, and the
production of crude oil, condensate, natural gas liquids and natural gas.
This segment is also responsible for the marketing of natural gas.
Refining & Marketing:
76 Products Company - principally is responsible for the company's West
Coast petroleum refining operations, marketing and transportation of
refined petroleum products and petroleum coke.
Other - primarily includes marketing of crude oil and natural gas liquids.
The Geothermal & Power segment is involved in the exploration for, and the
production and sale of geothermal resources.
Diversified Businesses:
Agricultural Products - manufactures and markets nitrogen-based fertilizers
for wholesale markets.
Carbon and Minerals - produces and markets petroleum cokes and specialty
minerals.
Pipelines - principally includes equity interests in affiliated pipeline
companies outside California.
Other- includes the development and sale of real estate assets and an equity
interest in refining and marketing joint venture.
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<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
<TABLE>
<CAPTION>
First Nine Months of 1995 First Nine Months of 1994
-------------------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- -----------------------------------------------------------------------------------------------------------------------------------
Petroleum
Exploration & Production:
<S> <C> <C> <C> <C>
United States .................................................... $ 249 $ 154 $ 222 $ 138
Foreign .......................................................... 305 158 304 154
Refining & Marketing:
76 Products Company .............................................. (27) (17) 44 27
Other ............................................................ 1 1 11 9
Geothermal & Power Operations .......................................... 40 22 44 25
Diversified Businesses:
Agricultural Products ............................................ 90 57 30 19
Carbon & Minerals ................................................ 55 40 50 34
Pipelines ........................................................ 63 50 56 45
Other ............................................................ 14 9 9 6
Corporate & Unallocated
Administrative & General ......................................... (111) (69) (129) (80)
Interest expense - net ........................................... (199) (134) (194) (130)
Environmental & Litigation expense ............................... (91) (57) (76) (50)
Other ............................................................ (27) (3) (5) (5)
--------------------------------------------------
Earnings before cumulative effect of accounting change ................. 362 211 366 192
Cumulative effect of accounting change ................................. -- -- (447) (277)
--------------------------------------------------
Total ...................................................... $ 362 $ 211 $ (81) $ (85)
==================================================
</TABLE>
7
<PAGE>
UNOCAL CORPORATION
1995 EARNINGS NEWS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
3rd Quarter of 1995 3rd Quarter of 1994
--------------------------------------------------------
Dollars in millions except per share amounts Before-tax After-tax Before-tax After-tax
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings (loss) ................................................... $ 106 $ 59 $ 136 $ 70
Less: Special items
Exploration & Production
United States
Asset Sales ............................................... (1) (1) (11) (6)
Write-down of investment and provision
for abandonment and remediation of the
Guadalupe oil field .................................... -- -- (7) (4)
Write-down of assets ...................................... -- -- -- --
Florida and Alaska OCS settlement ......................... 29 18 -- --
Foreign
Asset Sales ............................................... 1 -- 23 16
76 Products
Asset Sales ............................................... -- -- -- --
Litigation ................................................ -- -- -- --
Environmental ............................................. -- -- (4) (2)
Write-down of assets ...................................... -- -- (3) (2)
Geothermal
Asset Sales ............................................... 2 2 -- --
Diversified Businesses
Agricultural Products
Asset Sales ............................................... -- -- 3 2
Other
Asset Sales ............................................... -- -- -- --
Corporate & Unallocated
Asset Sales ............................................... -- -- (2) (1)
Environmental provision ................................... (2) (1) (3) (2)
Litigation provision ...................................... (7) (5) (1) --
UOC lease termination ..................................... -- -- -- --
Restructuring ............................................. -- -- -- --
Asset write-downs ......................................... -- -- -- --
Other ..................................................... -- (4) -- --
Mesa settlement ........................................... -- -- -- --
Cumulative effect of accounting change .......................... -- -- -- --
-----------------------------------------------
Total special items ................................................... 22 9 (5) 1
-----------------------------------------------
Adjusted earnings .......................................................... $ 84 $ 50 $ 141 $ 69
Less: Dividends on preferred stock ......................................... 9 9
-----------------------------------------------
Adjusted net earnings applicable to common shares .......................... 41 60
===============================================
Adjusted net earnings per common share ..................................... $0.17 $0.25
</TABLE>
8
<PAGE>
UNOCAL CORPORATION
1995 EARNINGS NEWS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
First Nine Months of 1995 First Nine Months of 1994
------------------------------------------------------
Dollars in millions except per share amounts Before-tax After-tax Before-tax After-tax
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings (loss) ................................................... $ 362 $ 211 $ (81) $ (85)
Less: Special items
Exploration & Production
United States
Asset Sales ............................................... 8 5 (13) (8)
Write-down of investment and provision
for abandonment and remediation of the
Guadalupe oil field .................................... -- -- (50) (31)
Write-down of assets ...................................... (13) (8) -- --
Florida and Alaska OCS settlement ......................... 29 18 -- --
Foreign
Asset Sales ............................................... 6 3 23 16
76 Products
Asset Sales ............................................... -- -- 1 1
Litigation ................................................ -- -- -- --
Environmental ............................................. -- -- (4) (2)
Write-down of assets ...................................... -- -- (9) (6)
Geothermal
Asset Sales ............................................... 9 7 -- --
Diversified Businesses
Agricultural Products
Asset Sales ............................................... 6 4 3 2
Other
Asset Sales ............................................... 2 1 -- --
Corporate & Unallocated
Asset Sales ............................................... 29 18 3 2
Environmental provision ................................... (31) (19) (4) (3)
Litigation provision ...................................... (27) (17) (27) (17)
UOC lease termination ..................................... -- -- -- --
Restructuring ............................................. -- -- -- --
Asset write-downs ......................................... (3) (2) -- --
Other ..................................................... -- (4) -- --
Mesa settlement ........................................... -- -- 38 24
Cumulative effect of accounting change .......................... -- -- (447) (277)
-----------------------------------------------
Total special items ................................................... 15 6 (486) (299)
-----------------------------------------------
Adjusted earnings .......................................................... $ 347 $ 205 $ 405 $ 214
Less: Dividends on preferred stock ......................................... 27 27
-----------------------------------------------
Adjusted net earnings applicable to common shares .......................... 178 187
===============================================
Adjusted net earnings per common share ..................................... $0.72 $0.77
</TABLE>
9
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
EARNINGS BY BUSINESS SEGMENT EXCLUDING SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
3rd Quarter of 1995 3rd Quarter of 1994
--------------------------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- -----------------------------------------------------------------------------------------------------------------------------------
Petroleum
Exploration & Production:
<S> <C> <C> <C> <C>
United States ............................................ $ 57 $ 35 $ 94 $ 58
Foreign .................................................. 87 46 116 58
Refining & Marketing:
76 Products Company ...................................... 11 6 17 10
Other .................................................... -- -- 2 1
Geothermal & Power Operations .................................. 11 5 18 11
Diversified Businesses:
Agricultural Products .................................... 5 4 7 4
Carbon & Minerals ........................................ 14 12 20 14
Pipelines ................................................ 19 14 14 12
Other .................................................... 3 2 (2) (1)
Corporate & Unallocated
Administrative & General ................................. (33) (21) (45) (28)
Interest expense - net ................................... (68) (47) (59) (40)
Environmental & Litigation expense ....................... (6) (4) (18) (13)
Other .................................................... (16) (2) (23) (17)
---------------------------------------------------------
Total .............................................. $ 84 $ 50 $ 141 $ 69
=========================================================
</TABLE>
10
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
EARNINGS BY BUSINESS SEGMENT EXCLUDING SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
First Nine Months of 1995 First Nine Months of 1994
----------------------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- -----------------------------------------------------------------------------------------------------------------------------------
Petroleum
Exploration & Production:
<S> <C> <C> <C> <C>
United States ............................................ $ 225 $ 139 $ 285 $ 177
Foreign .................................................. 299 155 281 138
Refining & Marketing:
76 Products Company ...................................... (27) (17) 56 34
Other .................................................... 1 1 11 9
Geothermal & Power Operations .................................. 31 15 44 25
Diversified Businesses:
Agricultural Products .................................... 84 53 27 17
Carbon & Minerals ........................................ 55 40 50 34
Pipelines ................................................ 63 50 56 45
Other .................................................... 12 8 9 6
Corporate & Unallocated
Administrative & General ................................. (111) (69) (129) (80)
Interest expense - net ................................... (199) (134) (194) (130)
Environmental & Litigation expense ....................... (33) (21) (45) (30)
Other .................................................... (53) (15) (46) (31)
--------------------------------------------------------
Total .............................................. $ 347 $ 205 $ 405 $ 214
========================================================
</TABLE>
11
<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
------------------
(Registrant)
Dated: October 26, 1995 By: /s/ CHARLES S. MCDOWELL
- ------------------------ ------------------------------
Charles S. McDowell,
Vice President and Comptroller
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<PAGE>
