<PAGE>
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 25, 1996
UNOCAL CORPORATION
------------------
(Exact name of registrant as specified in its charter)
Delaware 1-8483 95-3825062
- -----------------------------------------------------------------------------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
2145 Rosecrans Avenue, Suite 4000, El Segundo, California 91245
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 726-7718
<PAGE>
ITEM 5. OTHER EVENTS
On January 25, 1996, the following news release was issued:
UNOCAL REPORTS $49 MILLION EARNINGS FOR FOURTH QUARTER
El Segundo, Calif., Jan. 25 -- Unocal Corporation today reported
fourth-quarter 1995 net earnings of $49 million, or 16 cents per common share,
compared with a loss of $68 million, or 32 cents per common share, in the same
period a year ago. Fourth quarter revenues were $2.22 billion, compared with
$1.98 billion a year ago.
Earnings from operations for the fourth quarter 1995, excluding special
items (detailed in the attached tables), were $92 million, or 34 cents per
common share. This compares with operating earnings of $86 million, or 32 cents
per common share, for the fourth quarter 1994.
"Our fourth quarter earnings benefited from a 5 percent increase in
domestic natural gas production, record natural gas production levels in
Thailand in late November and early December, and higher refinery production of
light oil products," said Roger C. Beach, Unocal's chairman and chief executive
officer. "The effect of the increased gas production was magnified by stronger
worldwide natural gas prices."
The gain in natural gas prices in the quarter had the greatest impact
in the U.S. Gulf Coast, a strategic focus area for Unocal. Approximately 40
percent of Unocal's worldwide natural gas production comes from this area.
Beach added that the gains in natural gas production were more than
offset by continuing declines in U.S. and foreign crude oil production. "In the
U.S., the decline in crude oil production reflects the sale of non-strategic
domestic properties and natural production declines in California and the
Central U.S.," he said.
1
<PAGE>
For 1996, the company expects domestic natural gas production to be
lower, reflecting the expected sale of its California upstream operations.
Increases in Unocal's foreign gas production, principally in Thailand, should
more than offset the decline in domestic natural gas production.
Unocal's 76 Products Company continued to show improvements in earnings
and cash flow in the quarter. The earnings performance was helped in part by
higher production of gasoline, jet fuel and diesel at the company's refineries.
The company's agricultural products business unit continued its strong
performance in the fourth quarter with higher earnings from nitrogen-based
fertilizers sales in the U.S. West Coast and Pacific Rim. Higher commodity
prices significantly enhanced margins for the company's agricultural products.
The company's reported earnings for the fourth quarter included a
non-cash, after-tax charge of $53 million (detailed in special adjustments
table) for adoption of Statement of Financial Accounting Standards No. 121. This
new accounting standard, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of," requires that long-lived assets with
book values that cannot be recovered by estimated future undiscounted cash flows
be written down to fair value. The impairment provision in the fourth quarter
was related principally to 1995 reserve write-downs for oil and gas properties
in the U.S., Canada and The Netherlands.
The reported fourth quarter earnings also included one-time cash
benefits from a bankruptcy settlement with Columbia Gas Transmission Corp. and
the sale of oil and gas properties in Wyoming.
For the full year 1995, net earnings were $260 million, or 91 cents per
common share. This compares with a loss of $153 million, or 78 cents per common
share, for 1994. Full-year revenues were $8.43 billion, up from $7.97 billion
last year.
Earnings from operations for 1995, excluding special items (detailed in
the attached tables), were $297 million, or $1.06 per common share. This
compares with adjusted earnings of $300 million, or $1.09 per common share, in
1994.
2
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
CONDENSED CONSOLIDATED EARNINGS STATEMENT
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
-----------------------------------------------------------
Dollars in millions except per share amounts 1995 1994 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues (a) $ 2,224 $ 1,984 $ 8,425 $ 7,965
Costs and other deductions (a) 2,123 2,057 7,962 7,671
------------------------------------------------------------
Earnings before income taxes 101 (73) 463 294
Income taxes 52 (5) 203 170
------------------------------------------------------------
Earnings (loss) before cumulative effect of accounting change 49 (68) 260 124
Cumulative effect of accounting change - - - (277)
------------------------------------------------------------
Net earnings (loss) $ 49 $ (68) $ 260 $ (153)
Dividends on preferred stock 9 9 36 36
-----------------------------------------------------------
Net earnings (loss) applicable to common shares $ 40 $ (77) $ 224 $ (189)
Earnings (loss) per common share: (b)
Before cumulative effect of accounting change $ 0.16 $ (0.32) $ 0.91 $ 0.36
Cumulative effect of accounting change - - - (1.14)
-------------------------------------------------------------
Net earnings (loss) $ 0.16 $ (0.32) $ 0.91 $ (0.78)
(a) Includes consumer excise taxes of $ 233 $ 207 $ 898 $ 893
(b) Based on weighted average common shares
outstanding (in millions) 247 244 246 243
</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
Dec. 31 Dec. 31
---------------------------
Millions of dollars 1995 (a) 1994
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 94 $ 148
Other current assets 1,482 1,380
Investments and long-term receivables 1,101 895
Properties - net 7,109 6,823
Other assets 105 91
---------------------------
Total assets $ 9,891 $ 9,337
LIABILITIES
Current Liabilities $ 1,316 $ 1,257
Long-term debt and capital lease obligations 3,698 3,461
Deferred Income taxes 722 643
Other deferred credits and liabilities 1,225 1,161
---------------------------
Total liabilities 6,961 6,522
STOCKHOLDERS' EQUITY 2,930 2,815
---------------------------
Total liabilities and stockholders' equity $ 9,891 $ 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".
3
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
CONDENSED CONSOLIDATED CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
-------------------------------------------------------------
Millions of dollars 1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Cash flow from operations ......................................... $ 373 $ 222 $ 1,235 $ 1,256
Working capital and other changes related to operations ........... 228 222 42 43
--------------------------------------------------
Net cash provided by operating activities ................. 601 444 1,277 1,299
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (includes dry hole costs) ................... (492) (433) (1,459) (1,272)
Proceeds from asset sales ......................................... 74 20 204 156
--------------------------------------------------
Net cash used in investing activities ..................... (418) (413) (1,255) (1,116)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in long-term debt
and capital lease obligations .................................. (194) (33) 111 (56)
Dividends paid .................................................... (58) (57) (232) (229)
Other ............................................................. (5) 14 45 45
--------------------------------------------------
Net cash used in financing activities ..................... (257) (76) (76) (240)
Decrease in cash and cash equivalents ...................................... (74) (45) (54) (57)
Cash and cash equivalents at beginning of period ........................... 168 193 148 205
--------------------------------------------------
Cash and cash equivalents at end of period ................................. $ 94 $ 148 $ 94 $ 148
</TABLE>
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
------------------------------------------------------------
1995 1994 1995 1994
------------------------------------------------------------
Exploration expense
Oil & Gas
<S> <C> <C> <C> <C>
United States ................................. $ 13 $ 9 $ 39 $ 24
Foreign ....................................... 39 27 96 89
Geothermal ............................................ 2 1 4 3
---------------------------------------------------------
Total ......................................... $ 54 $ 37 $ 139 $ 116
Dry hole costs
Oil & Gas
United States ................................. $ 8 $ 8 $ 36 $ 45
Foreign ....................................... 2 10 21 34
Geothermal ............................................ 0 2 4 5
---------------------------------------------------------
Total ......................................... $ 10 $ 20 $ 61 $ 84
Depreciation, Depletion & Amortization ......................... $ 318 $ 218 $1,022 $ 947
</TABLE>
4
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
OPERATING HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
-------------------------------------------------------------------------
1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Net daily production(a)
Crude oil and condensate (thousand barrels daily):
<S> <C> <C> <C> <C>
United States ............................................ 121.0 131.6 125.1 137.3
Foreign:
Far East ............................................ 86.4 92.5 85.1 87.1
Other ............................................... 28.2 32.6 30.2 35.4
--------------------------------------------------------------
Total Foreign ............................... 114.6 125.1 115.3 122.5
--------------------------------------------------------------
Worldwide ...................................................... 235.6 256.7 240.4 259.8
Natural gas (million cubic feet daily):
United States ............................................ 1,078 1,029 1,103 1,095
Foreign:
Far East ............................................ 643 675 609 623
Other ............................................... 67 29 53 48
--------------------------------------------------------------
Total Foreign ............................... 710 704 662 671
--------------------------------------------------------------
Worldwide ...................................................... 1,788 1,733 1,765 1,766
Natural gas liquids (thousand barrels daily) ...................... 20.4 23.2 21.0 21.9
Geothermal (million kilowatt-hours daily) ......................... 16.7 19.2 16.1 20.5
Input to crude oil processing units (thousand barrels daily)(b) 233 233 213 231
Sales of Petroleum products (thousand barrels daily)(b) 287 247 259 238
Average sales prices
Crude oil and condensate (per barrel):
United States ............................................ $ 14.59 $ 13.80 $ 15.03 $ 13.06
Foreign:
Far East ............................................ $ 16.02 $ 14.78 $ 16.09 $ 14.55
Other ............................................... $ 15.23 $ 15.35 $ 15.69 $ 14.36
Total Foreign ............................... $ 15.75 $ 14.97 $ 15.95 $ 14.48
--------------------------------------------------------------
Worldwide ...................................................... $ 15.07 $ 14.32 $ 15.40 $ 13.63
Natural gas (per mcf):
United States ............................................ $ 1.75 $ 1.57 $ 1.56 $ 1.78
Foreign:
Far East ............................................ $ 2.13 $ 1.94 $ 2.04 $ 2.01
Other ............................................... $ 1.82 $ 1.72 $ 1.39 $ 1.76
Total Foreign ............................... $ 2.10 $ 1.93 $ 1.98 $ 1.99
--------------------------------------------------------------
Worldwide ...................................................... $ 1.89 $ 1.71 $ 1.72 $ 1.86
</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>
4th Quarter of 1995 4th Quarter of 1994
--------------------------------------------------------
Millions of dollars Before-tax After -tax Before-tax After -tax
- ------------------------------------------------------------------------------------------------------------------------------------
PETROLEUM
Exploration & Production:
<S> <C> <C> <C> <C>
United States .................................................... $ 153 $ 95 $ 84 $ 52
Foreign .......................................................... 29 18 112 51
Refining & Marketing:
76 Products Company .............................................. 23 16 (8) (5)
GEOTHERMAL & POWER OPERATIONS .......................................... 8 5 14 8
DIVERSIFIED BUSINESSES:
Agricultural Products ............................................ 25 19 16 12
Carbon & Minerals ................................................ 17 12 14 9
Pipelines ........................................................ 19 16 15 12
Other ............................................................ (2) (2) 9 6
CORPORATE & UNALLOCATED
Administrative & General ......................................... (36) (27) (53) (33)
Interest expense - net ........................................... (58) (38) (60) (44)
Environmental & Litigation expense ............................... (56) (35) (218) (137)
Other ............................................................ (21) (30) 2 1
---------------------------------------------------
Earnings before cumulative effect of accounting change ................. 101 49 (73) (68)
Cumulative effect of accounting change ................................. - - - -
--------------------------------------------------
Total ...................................................... $ 101 $ 49 $ (73) $ (68)
===================================================
</TABLE>
The Exploration & Production segment is engaged in the exploration for, the
production and marketing of crude oil, condensate, natural gas liquids and
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.
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
earnings from affiliated pipeline companies.
Other - includes the development
and sale of real estate assets and equity earnings from a refining and
marketing joint venture.
* Effective in the fourth quarter 1995, certain expenses previously reported
under Corporate and Unallocated have been allocated to the operating segments.
Prior Year segment earnings were restated to conform to the 1995 allocation.
6
<PAGE>
1995 EARNINGS NEWS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
4th Quarter of 1995 4th 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) ........................................... $ 101 $ 49 $ (73) $ (68)
Less: Special items
EXPLORATION & PRODUCTION
UNITED STATES
Asset Sales .............................................. 44 27 (7) (5)
FAS 121 Impairment ....................................... (44) (27) - -
Columbia Gas Settlement .................................. 55 34 - -
FOREIGN
FAS 121 Impairment ....................................... (43) (26) - -
76 PRODUCTS
Asset Sales .............................................. 1 1 - -
Litigation ............................................... - - (2) (2)
Write-down of assets ..................................... - - (23) (14)
DIVERSIFIED BUSINESSES
Other
Asset Sales .............................................. 4 2 - -
Write-down of assets ..................................... (3) (2) - -
CORPORATE & UNALLOCATED
Asset Sales .............................................. 5 3 - -
Environmental provision .................................. (10) (6) (152) (94)
Litigation provision ..................................... (33) (21) (38) (24)
Write-down of assets ..................................... - - (14) (9)
Deferred tax adjustment .................................. - - - -
Mesa settlement .......................................... - - - -
Other .................................................... (14) (28) (10) (6)
----------------------------------------------------
Total special items ........................................... (38) (43) (246) (154)
----------------------------------------------------
ADJUSTED EARNINGS .................................................. $ 139 $ 92 $ 173 $ 86
Less: Dividends on preferred stock ................................. 9 9
----------------------------------------------------
ADJUSTED NET EARNINGS APPLICABLE TO COMMON SHARES .................. 83 77
ADJUSTED NET EARNINGS PER COMMON SHARE ............................. $0.34 $0.32
</TABLE>
7
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
EARNINGS BY BUSINESS SEGMENT EXCLUDING SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
4th Quarter of 1995 4th Quarter of 1994
----------------------------------------------------------------
Millions of dollars Before-tax After -tax Before-tax After -tax
- ------------------------------------------------------------------------------------------------------------------------------------
PETROLEUM
Exploration & Production:
<S> <C> <C> <C> <C>
United States ............................................ $ 98 $ 61 $ 91 $ 57
Foreign .................................................. 72 44 112 51
Refining & Marketing:
76 Products Company ...................................... 22 15 17 11
GEOTHERMAL & POWER OPERATIONS .................................. 8 5 14 8
DIVERSIFIED BUSINESSES:
Agricultural Products .................................... 25 19 16 12
Carbon & Minerals ........................................ 17 12 14 9
Pipelines ................................................ 19 16 15 12
Other .................................................... (3) (2) 9 6
CORPORATE & UNALLOCATED
Administrative & General ................................. (36) (27) (28) (18)
Interest expense - net ................................... (58) (38) (60) (44)
Environmental & Litigation expense ....................... (13) (8) (28) (19)
Other .................................................... (12) (5) 1 1
---------------------------------------------------------
Total .............................................. $ 139 $ 92 $ 173 $ 86
=========================================================
</TABLE>
8
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
<TABLE>
<CAPTION>
For Twelve Months For Twelve Months
Ended December 31, 1995 Ended December 31, 1994
-----------------------------------------------------------
Millions of dollars Before-tax After -tax Before-tax After -tax
- ------------------------------------------------------------------------------------------------------------------------------------
PETROLEUM
Exploration & Production:
<S> <C> <C> <C> <C>
United States .................................................... $ 386 $ 240 $ 289 $ 180
Foreign .......................................................... 330 181 407 198
Refining & Marketing:
76 Products Company .............................................. (12) 11 23 14
GEOTHERMAL & POWER OPERATIONS .......................................... 47 26 57 32
DIVERSIFIED BUSINESSES:
Agricultural Products ............................................ 113 74 42 29
Carbon & Minerals ................................................ 72 52 62 42
Pipelines ........................................................ 82 66 70 56
Other ............................................................ 12 7 22 14
CORPORATE & UNALLOCATED
Administrative & General ......................................... (127) (84) (137) (85)
Interest expense - net ........................................... (257) (178) (255) (174)
Environmental & Litigation expense ............................... (148) (92) (293) (186)
Other ............................................................ (35) (43) 6 4
---------------------------------------------------
Earnings before cumulative effect of accounting change ................. 463 260 293 124
Cumulative effect of accounting change ................................. - - (447) (277)
---------------------------------------------------
Total ...................................................... $ 463 $ 260 $(154) $(153)
===================================================
</TABLE>
9
<PAGE>
1995 EARNINGS NEWS RELEASE SUPPLEMENT
SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Twelve Months For the Twelve Months
Ended December 31, 1995 Ended December 31, 1994
-----------------------------------------------------
Dollars in millions except per share amounts Before -tax After-tax Before -tax After-tax
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings (loss) ............................................... $ 463 $ 260 $(154) $(153)
Less: Special items
EXPLORATION & PRODUCTION
UNITED STATES
Asset Sales .................................................. 52 32 (20) (13)
Provision for abandonment and remediation of the
Guadalupe oil field ....................................... - - (26) (16)
Write-down of assets ......................................... (13) (8) (24) (15)
FAS 121 Impairment ........................................... (44) (27)
Florida and Alaska OCS settlement ............................ 29 18 - -
Columbia Gas settlement ...................................... 55 34 - -
FOREIGN
Asset Sales .................................................. 6 3 23 16
FAS 121 Impairment ........................................... (43) (26)
76 PRODUCTS
Asset Sales .................................................. 1 1 1 1
Litigation ................................................... - - (2) (2)
Environmental ................................................ - - (4) (2)
Write-down of assets ......................................... - - (32) (20)
GEOTHERMAL
Asset Sales .................................................. 9 7 - -
DIVERSIFIED BUSINESSES
AGRICULTURAL PRODUCTS
Asset Sales .................................................. 6 4 3 2
OTHER
Asset Sales .................................................. 6 3 - -
Write-down of assets ......................................... (3) (2) - -
CORPORATE & UNALLOCATED
Asset Sales .................................................. 34 21 3 2
Environmental provision ...................................... (41) (26) (156) (97)
Litigation provision ......................................... (60) (37) (65) (41)
Write-down of assets ......................................... (3) (2) (14) (9)
Mesa settlement .............................................. - - 38 24
Other ........................................................ (14) (32) (10) (6)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE ............................. - - (447) (277)
----------------------------------------------------
Total special items ............................................... (23) (37) (732) (453)
----------------------------------------------------
ADJUSTED EARNINGS ...................................................... $ 486 $ 297 $ 578 $ 300
Less: Dividends on preferred stock ..................................... 36 36
----------------------------------------------------
ADJUSTED NET EARNINGS APPLICABLE TO COMMON SHARES ...................... 261 264
----------------------------------------------------
ADJUSTED NET EARNINGS PER COMMON SHARE ................................. $1.06 $1.09
</TABLE>
10
<PAGE>
UNOCAL CORPORATION
NEWS RELEASE
EARNINGS BY BUSINESS SEGMENT EXCLUDING SPECIAL ADJUSTMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
For Twelve Months For Twelve Months
Ended December 31, 1995 Ended December 31, 1994
--------------------------------------------------------------------
Millions of dollars Before-tax After -tax Before-tax After -tax
- ------------------------------------------------------------------------------------------------------------------------------------
PETROLEUM
Exploration & Production:
<S> <C> <C> <C> <C>
United States ............................................ $ 307 $ 191 $ 359 $ 224
Foreign .................................................. 367 204 384 182
Refining & Marketing:
76 Products Company ...................................... (13) 10 60 37
GEOTHERMAL & POWER OPERATIONS .................................. 38 19 57 32
DIVERSIFIED BUSINESSES:
Agricultural Products .................................... 107 70 39 27
Carbon & Minerals ........................................ 72 52 62 42
Pipelines ................................................ 82 66 70 56
Other .................................................... 9 6 22 14
CORPORATE & UNALLOCATED
Administrative & General ................................. (127) (84) (112) (70)
Interest expense - net ................................... (257) (178) (255) (174)
Environmental & Litigation expense ....................... (47) (29) (72) (48)
Other .................................................... (52) (30) (36) (22)
--------------------------------------------------------
Total .............................................. $486 $297 $578 $300
========================================================
11
</TABLE>
