SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 23, 1997
------------------
UNOCAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
- --------------------------------------------------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
<PAGE>
Item 5. OTHER EVENTS.
On July 23, 1997 the following news release was issued:
UNOCAL EARNINGS FROM CONTINUING OPERATIONS DOWN
ON LOWER COMMODITY PRICES, HIGHER EXPLORATION COSTS
---------------------------------------------------
El Segundo, Calif., July 23, 1997 -- Unocal Corporation today reported
second quarter 1997 earnings from continuing operations of $156 million, or 63
cents per common share, compared with earnings from continuing operations of
$188 million, or 72 cents per common share, for the same period a year ago.
Earnings from continuing operations, excluding special items (detailed in
the attached tables), were $97 million, or 39 cents per common share, compared
with $157 million, or 60 cents per common share, in the second quarter of 1996.
The 1997 second quarter operating results reflected primarily lower
worldwide crude oil prices and domestic natural gas prices, and increased
international exploration expenses.
Second quarter special items included an after-tax gain of $41 million from
the sale of Illinois-based Unocal Hydrocarbon Sales to a U.S. affiliate of
Petroleos de Venezuela, S.A. (PDVSA), and an after-tax gain of $39 million
resulting from the May restructuring of The UNO-VEN Company, a former Midwest
refining and marketing partnership with PDVSA. Last year's second quarter
special items included an after-tax gain of $68 million from the sale of the
company's California oil and gas assets.
Second quarter 1997 net earnings, after an extraordinary charge for the
early extinguishment of debt, were $118 million, or 48 cents per common share,
compared with $238 million, or 92 cents per common share, for the same period a
year ago.
<PAGE>
Second quarter 1996 results, however, included after-tax earnings of $50
million, or 20 cents per common share, from the discontinued operations of 76
Products Company, which was sold in March 1997.
"Higher Far East production and reduced interest expense partially offset
higher dry hole costs and lower oil and gas prices," said Roger C. Beach, Unocal
chairman and chief executive officer.
Natural gas production in the Far East was up 26 percent, or 161 million
cubic feet (mmcf) per day, over the second quarter 1996.
In Thailand, net natural gas production averaged 610 mmcf per day in the
second quarter, up 30 percent from a year ago, following the late 1996 start-up
of a new pipeline system. In Indonesia, net natural gas production (including
host country share) rose 21 mmcf per day to 163 mmcf per day.
Unocal also reported a 13 percent increase in crude oil and condensate
production from its Thailand and Indonesia operations.
Domestic natural gas production averaged 1,001 mmcf per day, down 52 mmcf
compared with the second quarter 1996. Crude oil and condensate production
decreased to 77,300 barrels per day compared with 88,500 barrels for the second
quarter last year. These decreases were attributed to natural production
declines and maintenance-related platform shut-ins in the U.S. Gulf of Mexico.
Worldwide, Unocal's average sales price for crude and condensate was $17.28
per barrel, compared with $18.71 in the second quarter 1996, while the sales
price for natural gas averaged $2.06 per thousand cubic feet, compared with
$2.15 for the same period last year.
The company recorded an after-tax charge of $11 million relating to dry
hole expenses incurred with the Perdana Deep-1 well offshore Brunei. To help
earn a 27-percent interest in the petroleum exploration project on Blocks A and
C/D, the company underwrote the entire cost of the well.
"While we had hoped for more encouraging results from Perdana Deep-1, we
remain excited about oil and gas prospects in this historically prolific
resource area," said Beach. "We've only just begun to explore Blocks A and C/D.
Perdana Deep-1,
2
<PAGE>
which was spudded before we farmed in to the project, was only
the first well drilled in this 600,000-acre area."
He added that, as stipulated in the farm-in agreement, Unocal will assume
an active role in the 3-D seismic survey that will be conducted later this year
as well as in the design, drilling, testing and evaluation of future wells.
The company also recorded a special after-tax charge of $7 million relating
to a June blow-out of the Moulavi Bazar No. 1 exploration well in northeast
Bangladesh. Unocal has 50-percent equity interest in production-sharing
contracts covering 3 million acres in the area, including a partially delineated
portion of the Jalalabad field.
The Agricultural Products Group's earnings for the quarter decreased
by $11 million from the prior year due to lower ammonia and urea prices.
Beach also noted that the company has purchased approximately 4.5 million
common shares for $172 million -- including more than 2 million shares acquired
since June 30 -- under the company's $400 million stock repurchase program.
As part of a plan to reduce total debt by $800 million, the company
purchased $507 million of outstanding debt securities, pursuant to a May 1997
tender offer, during the quarter. The transaction -- which is expected to result
in after-tax interest expense savings of approximately $34 million annually --
resulted in an after-tax extraordinary charge of $38 million, which reflects the
premium paid over book value.
Since year-end 1996, the company has reduced total debt by $737 million to
$2,321 million.
Unocal Corporation is the world's leading independent energy resource and
project development company, with reserves of more than 9.8 trillion cubic feet
of natural gas equivalent (1.6 billion barrels of oil equivalent) and major oil
and gas production activities in Asia and the U.S. Gulf of Mexico.
News releases and other company information are available at Unocal's
website, http://www.unocal.com.
3
<PAGE>
NEWS RELEASE
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED EARNINGS STATEMENT UNOCAL CORPORATION
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30 Ended June 30
------------------ ------------------
Dollars in millions except per share amounts 1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues .......................................................................... $ 1,654 $ 1,405 $ 3,110 $ 2,606
Costs and other deductions .............................................................. 1,405 1,085 2,524 2,061
---------------------------------------
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ................................. 249 320 586 545
Income taxes ............................................................................ 93 132 242 226
---------------------------------------
EARNINGS FROM CONTINUING OPERATIONS ..................................................... 156 188 344 319
Earnings from discontinued operations (net of tax) ..................................... -- 50 -- 43
Loss on disposal (net of tax) .......................................................... -- -- (44) --
Extraordinary charge - extinguishment of debt (net of tax) .............................. (38) -- (38) --
---------------------------------------
NET EARNINGS ............................................................................ $ 118 $ 238 $ 262 $ 362
Dividends on preferred stock ............................................................ -- 9 -- 18
---------------------------------------
NET EARNINGS APPLICABLE TO COMMON SHARES ................................................ $ 118 $ 229 $ 262 $ 344
Earnings/(loss) per common share assuming no dilution (a)
Continuing operations ............................................................. $ 0.63 $ 0.72 $ 1.38 $ 1.22
Discontinued operations ........................................................... -- 0.20 (0.18) 0.17
Extraordinary charge - extinguishment of debt (net of tax) ........................ (0.15) -- (0.15) --
---------------------------------------
NET EARNINGS PER SHARE .................................................................. $ 0.48 $ 0.92 $1.05 $1.39
<FN>
(a) Based on weighted average common shares outstanding (in millions) .................. 250 248 250 248
</FN>
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30 Dec. 31
Millions of dollars 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Cash and cash equivalents .................................................................. $ 884 $ 217
Net assets of discontinued operations (b) ................................................. -- 1,774
Other current assets ....................................................................... 1,054 1,237
Investments and long-term receivables ...................................................... 1,060 1,206
Properties - net ........................................................................... 4,712 4,590
Other assets ............................................................................... 111 99
---------------------------
Total assets ....................................................................... $7,821 $9,123
LIABILITIES AND EQUITY
Current portion of long-term debt and capital lease obligations ............................ $ 1 $ 118
Other current liabilities .................................................................. 979 1,504
Long-term debt and capital lease obligations ............................................... 2,320 2,940
Deferred income taxes ...................................................................... 305 348
Other deferred credits and liabilities ..................................................... 1,340 1,416
Convertible preferred securities ........................................................... 522 522
Stockholders' equity ....................................................................... 2,354 2,275
---------------------------
Total liabilities and equity ....................................................... $7,821 $9,123
<FN>
(b) Excludes retained working capital
</FN>
</TABLE>
Table 1
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
CONDENSED CONSOLIDATED CASH FLOWS
(INCLUDES DISCONTINUED OPERATIONS)
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30 Ended June 30
-------------------------------------------
Millions of dollars 1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Cash flow from operations ............................................. $ 226 $ 464 $ 641 $ 850
Working capital and other changes related to operations ............... (123) (29) (204) (157)
-------------------------------------------
Net cash provided by operating activities ....................... 103 435 437 693
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (includes dry hole costs) ....................... (359) (400) (645) (622)
Proceeds from sale of discontinued operations ......................... 396 -- 1,786 --
Proceeds from asset sales ............................................. 32 488 48 539
-------------------------------------------
Net cash provided by/(used in) investing activities ............. 69 88 1,189 (83)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in long-term debt
and capital lease obligations ................................... (893) (541) (718) (389)
Dividends paid ........................................................ (50) (58) (100) (117)
Repurchase of common stock ............................................ (46) -- (92) --
Other ................................................................. (48) (1) (49) 11
-------------------------------------------
Net cash used in financing activities ........................... (1,037) (600) (959) (495)
Increase/(decrease) in cash and cash equivalents ............................... (865) (77) 667 115
Cash and cash equivalents at beginning of period ............................... 1,749 286 217 94
-------------------------------------------
Cash and cash equivalents at end of period ..................................... $ 884 $ 209 $ 884 $ 209
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CAPITAL EXPENDITURES
(UNAUDITED)
Millions of dollars
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
United States Exploration & Production ......................................... $ 79 $ 156 $ 112 $ 235
International Exploration & Production ......................................... 240 130 403 216
Geothermal Operations .......................................................... 27 38 47 52
Diversified Business Group ..................................................... 13 8 22 14
New Ventures (Non E & P) ...................................................... (2) -- 3 --
Corporate & Unallocated ........................................................ 2 11 9 16
Discontinued Operations ........................................................ -- 57 49 89
-------------------------------------------
Total ................................................................. $ 359 $ 400 $ 645 $ 622
</TABLE>
<TABLE>
<CAPTION>
DEPRECIATION, DEPLETION & AMORTIZATION
(UNAUDITED)
Millions of dollars
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Depreciation, depletion & amortization from continuing operations .............. $ 244 $ 214 $ 455 $ 425
</TABLE>
Table 2
<PAGE>
NEWS RELEASE
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
<TABLE>
<CAPTION>
UNOCAL CORPORATION
For the Six Months
Ended June 30, 1997
--------------------------------------------------------------------
Spirit Other Other
Millions of dollars Energy 76 U.S. Far East International Total
- ---------------------------------------------------------------------------------------------------------------------
Sales (includes intercompany sales) ...(a)
<S> <C> <C> <C> <C> <C>
Crude oil and condensate ................. $ 178 $ 96 $ 230 $ 85 $ 589
Natural gas .............................. 375 32 317 24 748
Natural gas liquids ...................... 29 3 14 2 48
Other .................................... 1 -- -- -- 1
-----------------------------------------------------------------
Total ............................. 583 131 561 111 1,386
Other revenue ................................... 6 1 6 13 26
Gain/(loss) on asset sales ...................... 4 -- -- (16) (12)
-----------------------------------------------------------------
Total revenues .................... 593 132 567 108 1,400
Production costs ................................ 98 46 63 36 243
Exploration expenses ............................ 24 -- 18 18 60
Dry hole costs .................................. 7 -- 35 1 43
Depreciation, depletion & amortization .......... 205 29 154 36 424
Other operating expenses ........................ 38 6 22 24 90
-----------------------------------------------------------------
Results of operations before income tax .. $ 221 $ 51 $ 275 $ (7) $ 540
For the Six Months
Ended June 30, 1996
------------------------------------------------------------------
Spirit Other Other
Energy 76 U.S. Far East International Total
------------------------------------------------------------------
Sales (includes intercompany sales) ... (a)
<S> <C> <C> <C> <C> <C>
Crude oil and condensate ................. $ 183 $ 152 $ 183 $ 90 $ 608
Natural gas .............................. 384 43 230 25 682
Natural gas liquids ...................... 30 3 9 2 44
Other .................................... 2 -- -- -- 2
----------------------------------------------------------------
Total ............................. 599 198 422 117 1,336
Other revenue ................................... 3 2 (1) 11 15
Gain on asset sales ............................. 5 110 -- 6 121
----------------------------------------------------------------
Total revenues .................... 607 310 421 134 1,472
Production costs ................................ 88 77 63 37 265
Exploration expenses ............................ 11 -- 17 20 48
Dry hole costs .................................. 11 -- 2 4 17
Depreciation, depletion & amortization .......... 174 56 116 30 376
Other operating expenses ........................ 66 9 17 4 96
----------------------------------------------------------------
Results of operations before income tax .. $ 257 $ 168 $ 206 $ 39 $ 670
<FN>
(a) Sales revenues are net of royalty payments, net profits interests and marketing related purchases.
</FN>
</TABLE>
Table 3
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Three Months
Ended June 30, 1997
-------------------------------------------------------------
Spirit Other Other
Millions of dollars Energy 76 U.S. Far East International Total
- -----------------------------------------------------------------------------------------------------------------
Sales (includes intercompany sales) ...(a)
<S> <C> <C> <C> <C> <C>
Crude oil and condensate ................. $ 80 $ 40 $ 113 $ 40 $ 273
Natural gas .............................. 147 14 152 10 323
Natural gas liquids ...................... 13 2 5 1 21
Other .................................... 1 -- -- -- 1
-------------------------------------------------------------
Total ............................. 241 56 270 51 618
Other revenue ................................... 3 1 3 3 10
Gain/(loss) on asset sales ...................... 1 -- -- (17) (16)
-------------------------------------------------------------
Total revenues .................... 245 57 273 37 612
Production costs ................................ 50 22 33 17 122
Exploration expenses ............................ 14 -- 10 9 33
Dry hole costs .................................. 1 -- 26 -- 27
Depreciation, depletion & amortization .......... 103 14 93 19 229
Other operating expenses ........................ 17 4 11 16 48
-------------------------------------------------------------
Results of operations before income tax .. $ 60 $ 17 $ 100 $ (24) $ 153
- -----------------------------------------------------------------------------------------------------------------
For the Three Months
Ended June 30, 1996
-------------------------------------------------------------
Spirit Other Other
Energy 76 U.S. Far East International Total
-------------------------------------------------------------
Sales (includes intercompany sales) ...(a)
<S> <C> <C> <C> <C> <C>
Crude oil and condensate ................. $ 96 $ 58 $ 104 $ 46 $ 304
Natural gas .............................. 184 17 117 11 329
Natural gas liquids ...................... 17 1 4 1 23
Other .................................... 1 -- -- -- 1
-------------------------------------------------------------
Total ............................. 298 76 225 58 657
Other revenue ................................... 1 1 (1) 5 6
Gain on asset sales ............................. 1 110 -- -- 111
-------------------------------------------------------------
Total revenues .................... 300 187 224 63 774
Production costs ................................ 43 29 33 16 121
Exploration expenses ............................ 7 -- 11 9 27
Dry hole costs .................................. 1 -- 2 1 4
Depreciation, depletion & amortization .......... 84 19 69 15 187
Other operating expenses ........................ 30 4 10 3 47
-------------------------------------------------------------
Results of operations before income tax .. $ 135 $ 135 $ 99 $ 19 $ 388
<FN>
(a) Sales revenues are net of royalty payments, net profits interests and marketing related purchases.
</FN>
Table 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30 Ended June 30
---------------------------------------
1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
NET DAILY PRODUCTION
Crude oil and condensate (thousand barrels daily):
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ........................................... 46.1 51.4 47.2 51.8
Other (a) ................................................. 31.2 37.1 32.4 53.4
-------------------------------------
Total United States .................................. 77.3 88.5 79.6 105.2
International
Far East (b) .............................................. 95.1 84.1 94.2 82.4
Other ...................................................... 26.2 27.9 26.4 28.2
-------------------------------------
Total International .................................. 121.3 112.0 120.6 110.6
-------------------------------------
Worldwide ............................................................. 198.6 200.5 200.2 215.8
Natural gas (million cubic feet daily):
United States
Spirit Energy 76 ........................................... 873.7 918.6 891.6 911.3
Other (a) ................................................. 127.4 134.5 141.6 173.8
--------------------------------------
Total United States .................................. 1,001.1 1,053.1 1,033.2 1,085.1
International
Far East (b) .............................................. 773.6 612.5 789.3 605.6
Other ...................................................... 63.0 63.2 65.3 75.3
-------------------------------------
Total International .................................. 836.6 675.7 854.6 680.9
--------------------------------------
Worldwide ............................................................. 1,837.7 1,728.8 1,887.8 1,766.0
Natural gas liquids (thousand barrels daily) (a) ......................... 19.0 18.8 19.3 19.6
Geothermal (million kilowatt-hours daily) ................................. 17.1 16.8 16.5 15.4
</TABLE>
<TABLE>
<CAPTION>
AVERAGE SALES PRICES
Crude oil and condensate (per barrel):
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ........................................... $ 18.97 $ 20.59 $ 20.77 $ 19.59
Other ...................................................... 14.23 16.85 16.45 15.95
Total United States .................................. 17.08 19.03 19.02 17.60
International
Far East ................................................... $ 17.97 $ 18.17 $ 19.41 $ 18.03
Other ...................................................... 16.11 18.93 18.01 17.90
Total International .................................. 17.44 18.40 19.01 17.99
Worldwide ............................................................. $ 17.28 $ 18.71 $ 19.02 $ 17.77
Natural gas (per mcf):
United States
Spirit Energy 76 ........................................... $ 1.99 $ 2.25 $ 2.42 $ 2.40
Other ...................................................... 1.35 1.44 1.35 1.43
Total United States .................................. 1.91 2.14 2.28 2.25
International
Far East ................................................... $ 2.25 $ 2.21 $ 2.33 $ 2.20
Other ...................................................... 2.08 1.70 2.16 1.73
Total International .................................. 2.24 2.16 2.31 2.14
Worldwide ............................................................. $ 2.06 $ 2.15 $ 2.29 $ 2.21
<FN>
(a) Includes production from California upstream properties of:
Crude oil and condensate ................................................ -- 1.0 -- 16.0
Natural gas ............................................................. -- -- -- 25.5
Natural gas liquids ..................................................... -- -- -- 0.3
(b) Includes host country share in Indonesia of:
Crude oil and condensate ................................................ 29.8 24.0 29.8 26.9
Natural gas ............................................................. 25.3 23.8 28.9 24.8
</FN>
</TABLE>
Table 5
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS (continued)
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30 Ended June 30
------------------------------------------------
1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Agricultural products production volumes (thousand tons)
<S> <C> <C> <C> <C>
Ammonia ....................................................................... 367 378 758 729
Urea ................................................................... 233 277 508 570
Other products ......................................................... 171 182 348 345
------------------------------------------------
Total ...................................................... 771 837 1,614 1,644
Agricultural products sales volumes (thousand tons)
Ammonia ................................................................ 247 274 403 368
Urea ................................................................... 289 336 499 581
Other products ......................................................... 455 438 707 669
------------------------------------------------
Total ...................................................... 991 1,048 1,609 1,618
</TABLE>
Table 6
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
2nd Quarter of 1997 2nd Quarter of 1996
---------------------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- ------------------------------------------------------------------------------------------------------------------------------------
EXPLORATION AND PRODUCTION
UNITED STATES
<S> <C> <C> <C> <C>
Spirit Energy 76 ........................................ $ 60 $ 38 $ 135 $ 84
Other ................................................... 17 11 135 84
INTERNATIONAL .............................................. 76 28 118 68
GEOTHERMAL OPERATIONS .......................................... 11 13 9 4
DIVERSIFIED BUSINESS GROUP
Agricultural Products .................................... 40 26 57 37
Carbon and Minerals ...................................... 85 56 11 9
Pipelines ................................................ 18 16 17 14
Other .................................................... 42 36 9 5
CORPORATE AND UNALLOCATED
Administrative and general expense ....................... (22) (14) (25) (16)
Net interest expense ..................................... (29) (23) (63) (48)
Environmental and litigation expense ..................... (16) (10) (53) (33)
New Ventures ............................................. (20) (15) (6) (4)
Other .................................................... (13) (6) (24) (16)
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations
before discontinued operations
and extraordinary item ...................................... 249 156 320 188
Earnings from discontinued operations .......................... -- -- 80 50
Extraordinary item ............................................. (52) (38) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL .............................................. $ 197 $ 118 $ 400 $ 238
====================================================================================================================================
<FN>
EXPLORATION AND PRODUCTION - this segment explores for, produces and markets
crude oil, condensate, natural gas and natural gas liquids.
GEOTHERMAL OPERATIONS - this segment explores for, produces and sells geothermal
resources used to generate electricity.
DIVERSIFIED BUSINESS GROUP:
AGRICULTURAL PRODUCTS - this business unit manufactures and markets
nitrogen-based products for wholesale agricultural and industrial markets
supplying the western United States and the Pacific Rim.
CARBON AND MINERALS - this business unit produces and markets petroleum coke,
graphites, solvents and specialty minerals.
PIPELINES - this business unit principally includes the company's equity
interests in affiliated pipeline companies.
OTHER - principally includes the company's equity interest in The UNO-VEN
Company.
</FN>
</TABLE>
Table 7
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
SPECIAL ADJUSTMENTS
(Unaudited)
2nd Quarter of 1997 2nd Quarter of 1996
------------------------------------------------------
Dollars in millions except per share amounts Before-tax After-tax Before-tax After-tax
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings .................................................. $ 197 $ 118 $ 400 $ 238
Less: Special items
Exploration and Production
United States
Spirit Energy 76
Other
Asset sales ....................................... -- -- 110 68
International
Asset sales ....................................... (17) (17) -- --
Bangladesh well blowout ........................... (10) (7) -- --
Geothermal Operations
Deferred tax adjustment - Sarulla ................. -- 7 -- --
Diversified Business Group
Carbon and Minerals
Asset Sales ....................................... 67 41 -- --
Other
UNO-VEN restructuring ............................. 46 39 -- --
Corporate and Unallocated
Asset sales ....................................... 1 1 -- --
Environmental provision ........................... (1) -- (32) (20)
Litigation provision .............................. (8) (5) (14) (8)
Other ............................................. -- -- (11) (9)
Discontinued Operations
Asset sales ....................................... -- -- 4 2
Extraordinary item ......................................... (52) (38)
- -----------------------------------------------------------------------------------------------------------------------------------
Total special items ........................................... 26 21 57 33
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings ......................................... $ 171 $ 97 $ 343 $ 205
====================================================================================================================================
</TABLE>
Table 8
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ADJUSTMENTS
(Unaudited)
2nd Quarter of 1997 2nd Quarter of 1996
----------------------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- ------------------------------------------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ........................................ $ 60 $ 38 $ 135 $ 84
Other ................................................... 17 11 25 16
International .............................................. 103 52 118 68
Geothermal Operations .......................................... 11 6 9 4
Diversified Business Group
Agricultural Products .................................... 40 26 57 37
Carbon and Minerals ...................................... 18 15 11 9
Pipelines ................................................ 18 16 17 14
Other .................................................... (4) (3) 9 5
Corporate and Unallocated
Administrative and general expense ....................... (22) (14) (25) (16)
Net interest expense ..................................... (29) (23) (63) (48)
Environmental and litigation expense ..................... (7) (5) (7) (5)
New Ventures ............................................. (20) (15) (6) (4)
Other .................................................... (14) (7) (13) (7)
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations ............................ 171 97 267 157
Earnings from discontinued operations .......................... -- -- 76 48
- ------------------------------------------------------------------------------------------------------------------------------------
Total .............................................. $ 171 $ 97 $ 343 $ 205
Less: Dividends on preferred stock ............................. -- 9
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted net earnings applicable
to common shares ............................................ $ 97 $ 196
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted net earnings
per common share ............................................ $0.39 $0.79
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted net earnings from continuing
operations per common share ................................. $0.39 $0.60
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Table 9
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
First Six Months of 1997 First Six Months of 1996
------------------------------------------------------------
Millions of dollars Before-tax After-tax Before After-tax
- ------------------------------------------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ........................................ $ 221 $ 138 $ 257 $ 160
Other ................................................... 51 32 168 104
International .............................................. 268 131 245 138
Geothermal Operations .......................................... 21 19 18 9
Diversified Business Group
Agricultural Products .................................... 70 46 82 53
Carbon and Minerals ...................................... 97 66 37 27
Pipelines ................................................ 35 30 47 37
Other .................................................... 44 37 10 6
Corporate and Unallocated
Administrative and general expense ....................... (42) (27) (54) (34)
Net interest expense ..................................... (83) (65) (135) (98)
Environmental and litigation expense ..................... (34) (21) (76) (47)
New Ventures ............................................. (31) (22) (10) (6)
Other .................................................... (31) (20) (44) (30)
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations
before discontinued operations
and extraordinary item ...................................... 586 344 545 319
Earnings (loss) from discontinued operations ................... (71) (44) 69 43
Extraordinary item ............................................. (52) (38) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total .............................................. $ 463 $ 262 $ 614 $ 362
====================================================================================================================================
</TABLE>
Table 10
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
SPECIAL ADJUSTMENTS
(Unaudited)
First Six Months of 1997 First Six Months of 1996
------------------------------------------------------
Dollars in millions except per share amounts Before-tax After-tax Before-tax After-tax
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings .................................................. $ 463 $ 262 $ 614 $ 362
Less: Special items
Exploration and Production
United States
Spirit Energy
Asset sales ......................................... 3 2 4 2
Other
Asset Sales ......................................... -- -- 110 68
International
Asset sales ......................................... (16) (16) 6 4
Bangladesh well blowout ............................. (10) (7) -- --
Geothermal Operations
Deferred tax adjustment - Sarulla ................... -- 7 -- --
Diversified Business Group
Carbon and Minerals
Asset sales ......................................... 67 41 -- --
Pipeline
Asset sales ......................................... -- -- 12 7
Other
UNO-VEN restructuring ............................... 46 39 -- --
Corporate and Unallocated
Asset sales ......................................... 7 5 1 1
Environmental provision ............................. (15) (9) (42) (26)
Litigation provision ................................ (8) (5) (20) (12)
Other ............................................... -- -- (11) (9)
Discontinued Operations
Asset sales ......................................... -- -- 4 2
Net loss on disposal ................................ (71) (44) -- --
Extraordinary item ........................................... (52) (38) -- --
------------------------------------------------------------------------------------------------------------------------------
Total special items ........................................... (49) (25) 64 37
-------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings ......................................... $ 512 $ 287 $ 550 $ 325
===============================================================================================================================
</TABLE>
Table 11
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ADJUSTMENTS
(Unaudited)
First Six Months of 1997 First Six Months of 1996
------------------------------------------------------------
Millions of dollars Before-tax After-tax Before After-tax
- ------------------------------------------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ........................................ $ 218 $ 136 $ 253 $ 158
Other ................................................... 51 32 58 36
International .............................................. 294 154 239 134
Geothermal Operations .......................................... 21 12 18 9
Diversified Business Group
Agricultural Products .................................... 70 46 82 53
Carbon and Minerals ...................................... 30 25 37 27
Pipelines ................................................ 35 30 35 30
Other .................................................... (2) (2) 10 6
Corporate and Unallocated
Administrative and general expense ....................... (42) (27) (54) (34)
Net interest expense ..................................... (83) (65) (135) (98)
Environmental and litigation expense ..................... (11) (7) (14) (9)
New Ventures ............................................. (31) (22) (10) (6)
Other .................................................... (38) (25) (34) (22)
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations ............................ 512 287 485 284
Earnings from discontinued operations .......................... -- -- 65 41
- -----------------------------------------------------------------------------------------------------------------------------------
Total .............................................. $ 512 $ 287 $ 550 $ 325
Less: Dividends on preferred stock ............................. -- 18
- -----------------------------------------------------------------------------------------------------------------------------------
Adjusted net earnings applicable
to common shares ............................................ $ 287 $ 307
- -----------------------------------------------------------------------------------------------------------------------------------
Adjusted net earnings
per common share ............................................ $1.15 $1.24
- -----------------------------------------------------------------------------------------------------------------------------------
Adjusted net earnings from continuing
operations per common share ................................. $1.00 $1.07
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Table 12
<PAGE>
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, thereunto duly authorized.
UNOCAL CORPORATION
(Registrant)
Date: July 23, 1997 By /s/ JOSEPH A. HOUSEHOLDER
-----------------------------
Joseph A. Householder
Vice President, Tax and Comptroller
