UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1996
-----------------
Or
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
----------------- --------------
Commission file number 1-8483
--------------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
Unocal Corporation
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
<PAGE>
INDEX TO FINANCIAL STATEMENTS OF
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
The following financial statements reflect the status of the Molycorp,
Inc. 401(k) Retirement Savings Plan as of December 31, 1996 and 1995, and the
results of its transactions for each of the years then ended.
Page Number
Statements included herein:
Report of Independent Accountants...................................... 2
Statements of Net Assets Available for Benefits
with Fund Information .................................................3
Statements of Changes in Net Assets Available
for Benefits with Fund Information................................... 4
Notes to Financial Statements........................................ 5-8
Item 27(a) - Schedule of Assets Held for Investment Purposes...........10
Item 27(d) - Schedule of Reportable Transactions.......................11
Exhibit Index .........................................................12
Schedules I, II and III are omitted because the subject matter did not
exist or the required information is given in the financial statements or notes
to financial statements.
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Administrative Committee of the Molycorp, Inc. 401(k) Retirement Savings
Plan:
We have audited the accompanying statements of net assets available for
benefits of the Molycorp, Inc. 401(k) Retirement Savings Plan (the "Plan") as of
December 31, 1996 and 1995, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 1996 and 1995, and the changes in net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes and reportable transactions are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statement of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
COOPERS & LYBRAND L. L. P.
June 23, 1997
Los Angeles, California
2
<PAGE>
<TABLE>
<CAPTION>
MOLYCORP, INC. 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1996 AND 1995
Participant Directed
---------------------------------------------------------------
1996
---------------------------------------------------------------
Unocal
Fidelity Common GIC
Fund Stock Fund Total
----------- --------- -------- ---------
ASSETS
Investments at fair value (Note 2)
Shares of registered investment companies
<S> <C> <C> <C> <C>
Fidelity Puritan Mutual Fund .................... $ 20,829 $ -- $ -- $ 20,829
Unocal Common Stock ................................ -- 43,195 -- 43,195
-------- -------- -------- --------
20,829 43,195 -- 64,024
Investments at contract value (Note 3)
Bank of California Employee Benefit
Investment Contract Fund ......................... -- -- 1,336 1,336
-------- -------- -------- --------
Total investments ............................ 20,829 43,195 1,336 65,360
Cash ..................................................... 6,587 463 2 7,052
-------- -------- -------- --------
NET ASSETS AVAILABLE FOR BENEFITS ........................ $ 27,416 $ 43,658 $ 1,338 $ 72,412
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------
1995
---------------------------------------------------------------
Unocal
Fidelity Common GIC
Fund Stock Fund Total
----------------- --------------- ------------ ----------
ASSETS
Investments at fair value (Note 2)
Shares of registered investment companies
<S> <C> <C> <C> <C>
Fidelity Puritan Mutual Fund ...................... $234,242 $ -- $ -- $234,242
Unocal Common Stock .................................. -- 180,895 -- 180,895
-------- -------- -------- --------
234,242 180,895 -- 415,137
Investments at contract value (Note 3)
Bank of California Employee Benefit
Investment Contract Fund ........................... -- -- 44,814 44,814
------- -------- -------- --------
Total investments .............................. 234,242 180,895 44,814 459,951
Cash ....................................................... 2 86 5 93
Accrued income ............................................. -- -- 225 225
Participants contributions receivable ...................... 6,899 8,269 4,155 19,323
-------- -------- -------- --------
NET ASSETS AVAILABLE FOR BENEFITS .......................... $241,143 $189,250 $ 49,199 $479,592
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
MOLYCORP, INC. 401(K) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR YEARS ENDED DECEMBER 31, 1996 AND 1995
Participant Directed
----------------------------------------------------------------
1996
----------------------------------------------------------------
Unocal
Fidelity Common GIC
Fund Stock Fund Total
-------------- --------------- ------------- -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net appreciation in fair value
<S> <C> <C> <C> <C>
of investments ................................... $ 13,326 $ 80,131 $ -- $ 93,457
Interest ........................................... 623 471 4 1,098
Dividends .......................................... 32,870 5,528 3,204 41,602
--------- --------- --------- ----------
Total investment income .......................... 46,819 86,130 3,208 136,157
Participant contributions ............................... 45,091 30,761 12,597 88,449
--------- --------- --------- ---------
Total additions .................................. 91,910 116,891 15,805 224,606
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Participants withdrawals and distributions .............. 315,947 252,915 62,924 631,786
--------- --------- --------- ---------
NET DECREASE PRIOR TO INTERFUND TRANSFERS .................. (224,037) (136,024) (47,119) (407,180)
INTERFUND TRANSFERS ........................................ 10,310 (9,568) (742) --
--------- --------- --------- ---------
NET DECREASE ...................................... (213,727) (145,592) (47,861) (407,180)
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR ....................................... 241,143 189,250 49,199 479,592
--------- --------- --------- ---------
END OF YEAR ............................................. $ 27,416 $ 43,658 $ 1,338 $ 72,412
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
-------------------------------------------------------------
1995
-------------------------------------------------------------
Unocal
Fidelity Common GIC
Fund Stock Fund Total
--------- --------- ---------- ----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net appreciation in fair value
<S> <C> <C> <C> <C>
of investments ...................................... $ 21,870 $ 9,306 $ -- $ 31,176
Interest .............................................. 14 70 38 122
Dividends ............................................. 10,657 4,475 2,861 17,993
-------- --------- --------- ---------
Total investment income ............................. 32,541 13,851 2,899 49,291
Participant contributions .................................. 67,521 58,874 20,417 146,812
-------- --------- --------- ---------
TOTAL ADDITIONS ..................................... 100,062 72,725 23,316 196,103
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Participants withdrawals and distributions ................. -- -- 15,079 15,079
-------- --------- --------- ---------
NET INCREASE PRIOR TO INTERFUND TRANSFERS ..................... 100,062 72,725 8,237 181,024
INTERFUND TRANSFERS ........................................... 18,653 (19,647) 994 --
-------- --------- --------- ---------
NET INCREASE ......................................... 118,715 53,078 9,231 181,024
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR .......................................... 122,428 136,172 39,968 298,568
-------- --------- --------- ---------
END OF YEAR ................................................ $ 241,143 $ 189,250 $ 49,199 $ 479,592
========= ========= ========= =========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
4
<PAGE>
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN
GENERAL
- -------
The Molycorp, Inc. 401(k) Retirement Savings Plan (the "Plan") is
sponsored by Molycorp, Inc. (the "company"), an indirect wholly owned subsidiary
of Unocal Corporation. The Plan provides for voluntary contributions by
participants. Each individual participant is allowed to choose how their funds
are invested from among three investment options. All funds remain with The Bank
of California (the "Trustee") for the exclusive benefit of Plan participants
until distributed after termination of employment. The Plan is subject to
certain provisions of the Employee Retirement Income Security Act of 1974
("ERISA") as a defined contribution plan.
The Molycorp 401(k) Savings Plan Summary Plan Description booklet dated
December 31, 1996 replaces the April 1, 1991 booklet and constitutes part of a
prospectus covering securities that have been registered under the Securities
Act of 1933. The December 31, 1996 booklet can be referenced for other
information about the Plan.
CONTRIBUTIONS
- -------------
Voluntary participant contributions to the Plan are made on a pre-tax
basis and cannot exceed 15 percent of a participant's base pay. The pre-tax
contributions are also known as 401(k) contributions. Contributions cannot
exceed the amount prescribed by law and cannot be calculated on a base pay in
excess of the amount allowed by law.
PARTICIPATION
- -------------
Collective bargaining unit employees at the Questa or York facilities are
eligible to participate in the Plan as of January 1, 1991 if at least six months
of service was completed prior to January 1, 1991. Otherwise, participants are
eligible to participate in the Plan beginning the first of the calendar quarter
that next follows the date the participant completed six months of service.
As a result of labor contract negotiations, employees at the Mountain Pass
facility were no longer eligible to commence participation in the Plan or make
contributions to the Plan after June 30, 1996. In October 1996, employees at
Mountain Pass were extended a special election period to rollover account
balances existing prior to June 30, 1996 into the Unocal Savings Plan. Account
balances totaling $614,739 were transferred in December 1996 to the Unocal
Savings Plan and are included in participant withdrawals and distributions in
the statement of changes in net assets available for benefits.
PARTICIPANT ACCOUNTS
- --------------------
Each participant's account is credited with the participant's
contributions and the respective investment earnings of the individual funds as
governed by the participant's investment selection.
VESTING
- -------
Participants are always 100 percent vested in participant contributions
and the investment earnings on those contributions.
PAYMENT OF BENEFITS
- -------------------
On termination of employment or at such time participants become eligible
to receive benefits, participants may elect to receive their account balance or
defer their distribution until a later date, but no later than 60 days after the
end of the plan year in which the latest of the following occurs: the
participant attains age 65, or two years after the participant's employment
terminates. If a participant continues to
5
<PAGE>
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
work after age 70-1/2, distribution of a portion of the participant's account
balance is required by April 1 of the calendar year following the calendar year
in which the participant attains age 70-1/2.
INVESTMENT PROGRAM
- ------------------
All contributions are held in trust and invested by the Trustee in
accordance with the option or options elected by the participant. A
participant's account may be invested in one or any combination of the following
funds administered by the Trustee:
Fidelity Puritan Mutual Fund - Funds are invested in shares of a mutual
fund maintained by a registered investment company that invests in common
and preferred stocks, as well as bonds, of various U.S. corporations.
Unocal Corporation Common Stock Fund ("Unocal Common Stock") - Funds are
invested in common stock of Unocal Corporation, the company's ultimate
parent.
Employee Benefit Guaranteed Investment Contract Fund ("GIC") - Funds are
invested in a bank commingled trust fund which holds fixed-rate investment
contracts with various insurance companies.
FEDERAL INCOME TAX STATUS
- -------------------------
The company obtained a ruling dated December 26, 1996, from the Los
Angeles District Director of the Internal Revenue Service that the Plan meets
the requirements of Section 401(a) of the Internal Revenue Code of 1986, as
amended, and that the Trustee established thereunder is entitled to exemption
under the provisions of such Code; therefore, the Plan is not required to pay
any federal income taxes. Earnings on Plan accounts will not be taxable to
participants prior to withdrawal from the Plan.
Withdrawals from the Plan are generally subject to federal income tax. Also,
in-service withdrawals and withdrawals following termination of employment prior
to retirement may be subject to a 10 percent federal income tax penalty.
PLAN TERMINATION
- ----------------
The company expects to continue the Plan indefinitely, but, as future
conditions cannot be foreseen, the company may at any time or from time to time
amend or terminate the Plan in whole or in part, subject to the requirements of
ERISA and other applicable laws. An amendment may affect present, as well as
future participants, but may not diminish the account of any participant
existing on the effective date of such amendment. The company has no present
intent to terminate the Plan.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
- -------------------
The accompanying financial statements are prepared on the accrual basis
of accounting in conformity with generally accepted accounting principles. In
addition, the following accounting policies are applied:
a. Purchases and sales of securities are recorded on a trade-date basis.
b. Dividends are recorded on an ex-dividend basis.
c. Interest income is recorded on the accrual basis.
d. Benefits are recorded when paid.
6
<PAGE>
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
The Plan presents in the statement of changes in net assets available
for benefits with fund information the net appreciation (depreciation) in the
fair value of its investments which consists of the realized gains or losses and
the unrealized appreciation (depreciation) on those investments.
Substantially all of the administrative and other costs of the Plan are
paid by the company.
VALUATION OF INVESTMENTS
- ------------------------
The Plan's investments are stated at fair value except for its investment
contract fund which is valued at contract value (Note 3). Shares of registered
investment companies are valued at quoted market prices from national exchanges
which represent the net asset value of shares held by the Plan at year-end. The
Unocal common stock is valued at the closing price as reported for the New York
Stock Exchange Composite Transactions at December 31, 1996 and 1995.
USE OF ESTIMATES IN PREPARATION OF THE FINANCIAL STATEMENTS
- -----------------------------------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan's management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of additions to and deductions from net
assets during the reporting periods. Actual results could differ from those
estimates.
NOTE 3 - INVESTMENTS AT CONTRACT VALUE
Funds invested in the GIC fund, which holds fixed-rate investment
contracts with various insurance companies, are valued at contract value. The
Plan's ownership interest in this bank commingled trust fund is based upon units
of equal value referred to as units of participation. Each unit of participation
represents a proportionate undivided beneficial interest in the total value of
all investment contracts which are held by the bank commingled trust fund. The
number of units of participation allocated to the Plan are determined by the
Trustee on a monthly basis.
As a result of the adoption of Statement of Position (SOP) 94-4,
"Reporting for Investment Contracts Held by Health and Welfare Benefit Plans and
Defined-Contribution Benefit Plans", effective January 1, 1995, the Plan
reported all investments in fixed-rate investment contracts at contract value.
The contract value of such investment contracts approximate fair value;
therefore, the adoption of SOP 94-4 had an immaterial impact on the Plan's net
assets available for benefits. The crediting interest rate for all outstanding
fixed-rate investment contracts was .4881 percent and .5100 percent as of
December 31, 1996 and 1995, respectively, and the average yield rate for such
contracts was 6.49 percent and 6.76 percent for the years then ended,
respectively.
NOTE 4 - CONCENTRATION OF CREDIT RISK
The GIC fund consists of a series of fixed-rate investment contracts with
various insurance companies. Although this fund contains a diversified portfolio
of investment contracts, the ultimate performance of the contract is dependent
upon the ability of the underlying companies to honor them.
NOTE 5 -PARTIES-IN-INTEREST
The Plan's investment in the Employee Benefit Investment Contracts Fund is
managed by the Bank of California. The Bank of California is the Trustee as
defined by the Plan and, therefore, these transactions qualify as
party-in-interest.
7
<PAGE>
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 6 -RECONCILIATION OF FINANCIAL STATEMENTS TO THE FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
December 31, 1996
------------------
Net assets available for benefits per the financial
statements $72,412
Amounts allocated to withdrawing participants 23,828
------------------
Net assets available for benefits per the Form 5500 $48,584
=======
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
For the Year Ended
December 31, 1996
------------------
Benefits paid to participants per the financial
statements $631,786
Add: Amounts allocated to withdrawing participants
at 12/31/96 23,828
------------------
Net assets available for benefits per the Form 5500 $655,614
==================
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee appointed by the Board of Directors of the company to administer the
Plan has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
---------------------------------------------
(Name of Plan)
June 30, 1997
By: /s/ JOSEPH A. HOUSEHOLDER
-----------------------------
Joseph A. Householder
Vice President, Tax and Comptroller
9
<PAGE>
Coopers & Lybrand L. L. P.
Los Angeles, California
June 25, 1997
<TABLE>
<CAPTION>
MOLYCORP, INC. 401(K) RETIREMENT SAVINGS PLAN
ITEM 27(A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
(c)
Description of Investment
(a) (b) Including Maturity Date, (d) (e)
Identity of Issue, Borrower, Rate of Interest, Collateral, Current
Lessor or Similar Party Par or Maturity Value Cost Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fidelity Investments Fidelity Puritan Mutual Fund $19,981 $20,829
(1208.167 shares)
Unocal Corporation Unocal Corporation Common Stock 29,792 43,195
(1060.000 shares)
* Bank of California Employee Benefit Investment Contract Fund 1,336 1,336
(1336.48 shares)
------- -------
$51,109 $65,360
======= =======
<FN>
* Trustee for the Plan and, therefore, a party-in-interest for which a statutory exemption exists.
</FN>
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
MOLY CORP, INC. 401(K) RETIREMENT SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS (1)
FOR THE YEAR ENDED DECEMBER 31, 1996
(b)Description (f)Expense (h)Current
of Assets Incurred Value of (i)Net
(Including Interest (c)Purchase (d)Selling (e)Lease With (g) Cost Asset on Gain
(a)Identity of Rate and Maturity Price Price Rental Transaction of Asset Transaction Or
Party Involved in Case of a loan) Date (loss)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bank of California Investment Contract 2,965 2,965 2,965
Employee Benefit Fund (2)
(1 Transaction)
Bank of California Investment Contract 68,979 68,979 68,799
Employee Benefit Fund (2)
(3 Transactions
Fidelity Investments Puritan Fund
(1 Transaction) 20,444 20,444 20,444
Fidelity Investments Puritan Fund
(2 Transactions) 319,310 293,685 319,310 25,625
Unocal Corporation Unocal Corporation 9,906 9,606 9,606
Common Stock
(1 Transaction)
Unocal Corporation ... Unocal Corporation 252,796 176,111 252,796 76,685
Common Stock
(1 Transactions)
<FN>
(1) Under ERISA, a reportable transaction is a transaction or series of
transactions during the Plan year that involves more than 5 percent of the
fair value of the Plan assets at the beginning of the Plan year.
(2) Trustee for the Plan and, therefore, a party-in-interest for which a
statutory exemption exists.
</FN>
</TABLE>
11
<PAGE>
UNOCAL CORPORATION
EXHIBIT INDEX
Exhibit Description
-----------------------------------------------------------------
23 Consent of Coopers & Lybrand L.L.P.
12
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Unocal Corporation on Form S-8 (No. 33-43232) of our report, dated June 23,
1997, on our audits of the financial statements and supplemental schedules of
the Molycorp, Inc. 401(k) Retirement Savings Plan as of December 31, 1996 and
1995 and for the years then ended which report appears in this annual report on
Form 11-K.
Coopers & Lybrand L. L. P.
Los Angeles, California
June 30, 1997
