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 28, 1998
-------------
UNOCAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
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(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
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(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
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(Registrant's Telephone Number, Including Area Code)
<PAGE>
ITEM 5. OTHER EVENTS.
Unocal Corporation today said that lower crude oil prices led to lower
second quarter 1998 net earnings of $105 million, or 43 cents per share
(diluted). In the second quarter 1997, Unocal had net earnings of $118 million,
or 47 cents per share (diluted).
Earnings from continuing operations, excluding special items (detailed
in the attached tables), were $62 million, or 26 cents per common share
(diluted). This compares with $97 million, or 39 cents per common share
(diluted), in the second quarter last year.
Net earnings for the first six months of 1998 were $123 million, or 50
cents per share (diluted). This compares with $262 million, or $1.04 per share
(diluted) in the same period of 1997.
Year-to-date earnings from continuing operations, excluding special
items (detailed in the attached tables) were $134 million (55 cents per share
diluted), down from $287 million ($1.13 per share diluted) last year.
COMMODITY PRICE IMPACTS
"This year has been particularly challenging as lower worldwide
commodity prices continue to impact earnings," said Roger C. Beach, Unocal
chairman and chief executive officer. "If you compare our results with 1997,
lower oil prices reduced earnings by nearly 20 cents per share in the second
quarter, while lower oil and natural gas prices reduced earnings by about 65
cents per share for first six months of the year."
Beach also noted that lower prices for agricultural products reduced
earnings by more than 5 cents per share in the second quarter and about 15 cents
per share in the year-to-date results, when compared with the comparable periods
a year ago.
"Our balance sheet remains strong, however," Beach said, "giving us the
strength to weather this period of lower prices and the flexibility to take
advantage of new opportunities if they present themselves."
COST CONTROLS
Beach said the company continues to focus on reducing costs to help
offset the impact of lower prices.
"We have cut production costs for Spirit Energy 76, our domestic E&P
unit," Beach said. "Spirit Energy aims to reduce production costs for the full
year 1998 by 10 to 15 cents per BOE, compared with last year."
OIL AND GAS EXPLORATION AND PRODUCTION
"We are particularly encouraged by our operations in Thailand where we
recorded our best quarter ever for natural gas production," Beach said. "Gross
natural gas production averaged 1.02 billion cubic feet (bcf) per day (Unocal,
65% working interest) as Thailand has increased use of indigenous gas supplies
for power generation. For the full-year 1998, we expect that gross natural gas
production from Thailand will average above 1 bcf per day."
<PAGE>
The company is continuing its aggressive worldwide exploration program.
Unocal's Spirit Energy 76 unit participated in a natural gas discovery on the
Cotton Valley Reef trend in East Texas. The well was placed on production within
30 days of the discovery. Since stepping up its exploration program in October
1997, Spirit Energy 76 has recorded 28 oil and gas discoveries (success rate of
more than 50%) both onshore and in the continental shelf area of the Gulf of
Mexico.
Spirit Energy's net production increased in the second quarter,
compared with the first three months of the year, reversing declines recorded
during 1997. The company expects Spirit Energy's full-year 1998 production to
average about 178,000 BOE per day.
By the end of this week, Unocal expects to have three new deepwater
exploration wells under way. In the Gulf of Mexico, we expect to spud a well on
the Mirage prospect (Unocal, 25% working interest) and the Calypso prospect
(Unocal, 50% working interest). The Calypso well is an offset to a successful
exploration well on the adjacent Leo prospect.
In the Makassar Strait production sharing contract area offshore East
Kalimantan in Indonesia, Unocal last week spudded an exploration well on the
deepwater Seno prospect (Unocal, 50% working interest).
OTHER FINANCIAL RESULTS
Total revenues for the second quarter were $1.4 billion, down from
$1.65 billion a year ago. Total revenues for the six months were $2.6 billion,
compared with $3.11 billion for the first half of 1997.
Unocal is a leading global oil and gas exploration and production
company with significant pipeline and power plant project developments
worldwide.
Forward-looking statements and estimates regarding drilling activity,
production and business results set forth above are based on assumptions
concerning market, competitive, regulatory, environmental, operational and other
considerations. Actual results could differ materially.
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
CONDENSED CONSOLIDATED EARNINGS STATEMENT
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30 Ended June 30
-----------------------------------------
Millions of dollars except per share amounts 1998 1997 1998 1997
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues ...................................................................... $ 1,397 $ 1,654 $ 2,604 $ 3,110
Costs and other deductions .......................................................... 1,233 1,405 2,343 2,524
---------------------------------------
Earnings from continuing operations before income taxes ............................. 164 249 261 586
Income taxes ........................................................................ 59 93 138 242
---------------------------------------
Earnings from continuing operations ................................................. 105 156 123 344
Loss from discontinued operations (net of tax) ..................................... -- -- -- (44)
Extraordinary charge - extinguishment of debt (net of tax) .......................... -- (38) -- (38)
---------------------------------------
Net earnings ........................................................................ $ 105 $ 118 $ 123 $ 262
Basic earnings/(loss) per common share (a)
Continuing operations ......................................................... $ 0.43 $ 0.62 $ 0.51 $ 1.38
Discontinued operations ....................................................... -- -- -- (0.18)
Extraordinary item - extinguishment of debt (net of tax) ...................... -- (0.15) -- (0.15)
---------------------------------------
Basic net earnings per share ........................................................ $ 0.43 $ 0.47 $ 0.51 $ 1.05
Diluted earnings/(loss) per common share (b) (c)
Continuing operations ......................................................... $ 0.43 $ 0.61 $ 0.50 $ 1.35
Discontinued operations ....................................................... -- -- -- (0.17)
Extraordinary item - extinguishment of debt (net of tax) ...................... -- (0.14) -- (0.14)
---------------------------------------
Diluted net earnings per share ...................................................... $ 0.43 $ 0.47 $ 0.50 $ 1.04
<FN>
(a) Weighted average shares - basic (millions) ...................................... 241 250 241 250
(b) Weighted average shares - diluted (millions) .................................... 243 264 243 264
(c) Distribution on preferred securities (net of taxes) excluded in numerator ....... $ -- $ 6 $ -- $ 12
In 1998, the effect of assumed conversion of preferred securities on
earnings per share is antidilutive
</FN>
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CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
Jun. 30 Dec. 31
Millions of dollars 1998 1997
- ----------------------------------------------------------------------------------------------------------
Assets
Cash and cash equivalents ........................................................... $ 193 $ 338
Other current assets ................................................................ 1,067 1,163
Investments and long-term receivables ............................................... 1,340 1,113
Properties - net .................................................................... 4,952 4,816
Other assets ........................................................................ 198 100
------------------
Total assets ................................................................ $ 7,750 $ 7,530
Liabilities and Equity
Current liabilities ................................................................. $ 974 $ 1,160
Long-term debt ...................................................................... 2,480 2,169
Deferred income taxes ............................................................... 172 137
Other deferred credits and liabilities .............................................. 1,302 1,228
Convertible preferred securities .................................................... 522 522
Stockholders' equity ................................................................ 2,300 2,314
------------------
Total liabilities and equity ................................................ $ 7,750 $ 7,530
</TABLE>
Table 1
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
CONDENSED CONSOLIDATED CASH FLOWS
(UNAUDITED) For the Three Months For the Six Months
Ended June 30 Ended June 30 (a)
-----------------------------------------
Millions of dollars 1998 1997(a) 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net earnings ............................................... $ 105 $ 118 $ 123 $ 262
Adjustments to reconcile net earnings to
net cash provided by operating activities
Loss on disposal of discontinued operations (before-tax) -- -- -- 71
Depreciation, depletion and amortization ............. 199 244 380 455
Dry hole costs ....................................... 42 27 92 43
Deferred income taxes ................................ 17 19 30 29
Gain on sales of assets (before-tax) ................. (92) (51) (92) (61)
Other ................................................ 7 (131) 27 (158)
Working capital and other changes related to operations .... 25 (123) (163) (204)
-----------------------------------------
Net cash provided by operating activities ............ 303 103 397 437
Cash flows from investing activities
Capital expenditures (includes dry hole costs) ............ (440) (359) (766) (645)
Proceeds from sale of discontinued operations .............. -- 396 -- 1,786
Proceeds from asset sales .................................. 30 32 34 48
-----------------------------------------
Net cash (used in)/provided by investing activities .. (410) 69 (732) 1,189
Cash flows from financing activities
Net increase/(decrease) in long-term debt .................. 79 (893) 341 (718)
Dividends paid ............................................. (49) (50) (97) (100)
Repurchase of common stock ................................. -- (46) (48) (92)
Other ...................................................... (5) (48) (6) (49)
-----------------------------------------
Net cash provided by/(used in) financing activities .. 25 (1,037) 190 (959)
Increase/(decrease) in cash and cash equivalents .......................... (82) (865) (145) 667
Cash and cash equivalents at beginning of period .......................... 275 1,749 338 217
-----------------------------------------
Cash and cash equivalents at end of period ................................ $ 193 $ 884 $ 193 $ 884
<FN>
(a) Cash flows related to discontinued operations have not been segregated
</FN>
- -----------------------------------------------------------------------------------------------------------------------
CONDENSED CAPITAL EXPENDITURES
(UNAUDITED)
Millions of dollars
- -----------------------------------------------------------------------------------------------------------------------
United States Exploration & Production .................................... $ 216 $ 79 $ 352 $ 112
International Exploration & Production .................................... 196 240 364 403
Geothermal and Power Operations ........................................... 4 27 10 47
Diversified Business Group ................................................ 18 13 28 22
New Ventures (Non-E & P) ................................................. 1 (2) 1 3
Corporate & Unallocated ................................................... 5 2 11 9
Discontinued Operations ................................................... -- -- -- 49
-----------------------------------------
Total (b) .................................................. $ 440 $ 359 $ 766 $ 645
<FN>
(b) Includes capitalized interest of: .................................... $ 8 $ 11 $ 16 $ 16
</FN>
</TABLE>
Table 2
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Three Months
Ended June 30, 1998
--------------------------------------------------
Spirit Other
Millions of dollars Energy 76 Alaska Far East International Total
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales (includes intercompany sales)
Crude oil and condensate ........................... $ 51 $ 24 $ 83 $ 23 $ 181
Natural gas ........................................ 148 16 149 7 320
Natural gas liquids ................................ 14 -- 3 -- 17
Other .............................................. 1 -- -- -- 1
--------------------------------------------------
Total ........................................ 214 40 235 30 519
Other revenue/(loss) ....................................... 1 2 (4) 3 2
Gain on asset sales ........................................ -- -- 3 87 90
--------------------------------------------------
Total revenues ............................... 215 42 234 120 611
Production costs ........................................... 39 23 30 15 107
Exploration expenses ....................................... 12 1 19 4 36
Dry hole costs ............................................. 27 -- 12 3 42
Depreciation, depletion & amortization ..................... 92 13 59 17 181
Other operating expenses ................................... 21 3 15 16 55
--------------------------------------------------
Results of operations before income tax ............ $ 24 $ 2 $ 99 $ 65 $ 190
- -----------------------------------------------------------------------------------------------------------------
For the Three Months
Ended June 30, 1997
- -----------------------------------------------------------------------------------------------------------------
Spirit Other
Energy 76 Alaska Far East International Total
--------------------------------------------------
Sales (includes intercompany sales)
Crude oil and condensate ........................... $ 75 $ 40 $ 113 $ 40 $ 268
Natural gas ........................................ 146 14 152 10 322
Natural gas liquids ................................ 13 2 5 1 21
Other .............................................. 1 -- -- -- 1
--------------------------------------------------
Total ........................................ 235 56 270 51 612
Other revenue .............................................. 3 1 3 3 10
Gain/(loss) on asset sales ................................. 1 -- -- (17) (16)
--------------------------------------------------
Total revenues ............................... 239 57 273 37 606
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 ................................... 19 4 11 16 50
--------------------------------------------------
Results of operations before income tax ............ $ 52 $ 17 $ 100 $ (24) $ 145
</TABLE>
Table 3
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Six Months
Ended June 30, 1998
-----------------------------------------------------------
Spirit Other
Millions of dollars Energy 76 Alaska Far East International Total
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sales (includes intercompany sales)
Crude oil and condensate ........................... $ 106 $ 52 $ 176 $ 53 $ 387
Natural gas ........................................ 291 34 290 16 631
Natural gas liquids ................................ 25 1 6 1 33
Other .............................................. 2 -- -- -- 2
------------------------------------------------------------
Total ........................................ 424 87 472 70 1,053
Other revenue/(loss) ....................................... 4 4 (12) 8 4
Gain on asset sales ........................................ -- -- 3 87 90
------------------------------------------------------------
Total revenues ............................... 428 91 463 165 1,147
Production costs ........................................... 83 42 56 36 217
Exploration expenses ....................................... 26 1 39 15 81
Dry hole costs ............................................. 66 -- 15 8 89
Depreciation, depletion & amortization ..................... 176 21 113 35 345
Other operating expenses ................................... 37 6 28 25 96
------------------------------------------------------------
Results of operations before income tax ............ $ 40 $ 21 $ 212 $ 46 $ 319
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months
Ended June 30, 1997
------------------------------------------------------------
Spirit Other
Energy 76 Alaska Far East International Total
------------------------------------------------------------
Sales (includes intercompany sales)
Crude oil and condensate ........................... $ 166 $ 96 $ 230 $ 85 $ 577
Natural gas ........................................ 370 32 317 24 743
Natural gas liquids ................................ 29 3 14 2 48
Other .............................................. 1 -- -- -- 1
------------------------------------------------------------
Total ........................................ 566 131 561 111 1,369
Other revenue .............................................. 6 1 4 13 24
Gain/(loss) on asset sales ................................. 4 -- -- (16) (12)
------------------------------------------------------------
Total revenues ............................... 576 132 565 108 1,381
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 ............ $ 204 $ 51 $ 273 $ (7) $ 521
</TABLE>
Table 4
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED) For the Three Months For the Six Months
Ended June 30 Ended June 30
----------------------------------------------
1998 1997 1998 1997
- -------------------------------------------------------------------------------------------------------------
Net daily production
Crude oil and condensate (thousand barrels daily):
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ...................... 44 46 44 47
Alaska ................................ 29 31 30 32
----------------------------------------------
Total United States ............. 73 77 74 79
International
Far East (a) ......................... 80 95 84 94
Other ................................. 32 27 32 27
----------------------------------------------
Total International ............. 112 122 116 121
- -------------------------------------------------------------------------------------------------------------
Total Worldwide ................. 185 199 190 200
Natural gas (million cubic feet daily):
United States
Spirit Energy 76 ...................... 795 874 784 892
Alaska ................................ 121 127 130 141
----------------------------------------------
Total United States ............. 916 1,001 914 1,033
International
Far East (a) ......................... 830 774 828 789
Other ................................. 67 63 60 66
----------------------------------------------
Total International ............. 897 837 888 855
- -------------------------------------------------------------------------------------------------------------
Total Worldwide ................. 1,813 1,838 1,802 1,888
Natural gas liquids (thousand barrels daily) ......... 20 19 19 19
Geothermal (million kilowatt-hours daily) ............ 18 17 20 17
Average sales prices (b) Crude oil and condensate (per barrel):
United States
Spirit Energy 76 ...................... $ 13.04 $ 17.77 $ 13.50 $ 19.30
Alaska ................................ 8.83 14.23 9.84 16.45
Total United States ............. $ 11.35 $ 16.36 $ 12.01 $ 18.15
International
Far East .............................. $ 12.85 $ 17.97 $ 13.42 $ 19.41
Other ................................. 10.31 16.11 11.34 18.01
Total International ............. $ 12.14 $ 17.44 $ 12.84 $ 19.01
Total Worldwide ................. $ 11.80 $ 16.96 $ 12.49 $ 18.61
Natural gas (per mcf):
United States
Spirit Energy 76 ...................... $ 2.15 $ 1.98 $ 2.15 $ 2.39
Alaska ................................ 1.48 1.35 1.47 1.35
Total United States ............. $ 2.06 $ 1.89 $ 2.05 $ 2.25
International
Far East .............................. $ 2.04 $ 2.25 $ 2.03 $ 2.33
Other ................................. 2.46 2.08 2.24 2.16
Total International ............. $ 2.05 $ 2.24 $ 2.04 $ 2.31
Total Worldwide ................. $ 2.05 $ 2.05 $ 2.05 $ 2.28
- -------------------------------------------------------------------------------------------------------------
<FN>
(a) Includes host country share of:
Crude oil and condensate ........................... 8 30 13 30
Natural gas ........................................ 22 25 27 29
(b) Excludes Global Trade margins and Canada equity affiliate sales </FN>
</TABLE>
Table 5
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
OPERATING HIGHLIGHTS (continued)
(UNAUDITED)
For the Three Months For the Six Months
Ended June 30 Ended June 30
----------------------------------------
1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------
Agricultural products production volumes (thousand tons)
<S> <C> <C> <C> <C>
Ammonia ............................................. 390 367 764 758
Urea ................................................ 245 233 505 508
Agricultural products sales volumes (thousand tons)
Ammonia ............................................. 243 247 463 403
Urea ................................................ 270 289 595 499
</TABLE>
Table 6
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
2nd Quarter of 1998 2nd Quarter of 1997
---------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- ------------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ............................... $ 24 $ 15 $ 52 $ 33
Alaska ......................................... 2 1 17 11
International ..................................... 164 103 76 28
Global Trade .......................................... 7 4 8 5
Geothermal and Power Operations ....................... 22 14 11 13
Diversified Business Group
Agricultural Products ........................... 18 12 40 26
Carbon and Minerals ............................. 9 9 85 56
Pipelines ....................................... 19 15 18 16
Other ........................................... -- -- 42 36
Corporate and Unallocated
Administrative and general expense .............. (16) (12) (22) (14)
Net interest expense ............................ (33) (24) (29) (23)
Environmental and litigation expense ............ (48) (30) (16) (10)
New Ventures (non-E&P)........................... (8) (5) (20) (15)
Other ........................................... 4 3 (13) (6)
- -------------------------------------------------------------------------------------------------------
Earnings from continuing operations
before discontinued operations
and extraordinary item ............................. 164 105 249 156
Extraordinary item .................................... -- -- (52) (38)
- -------------------------------------------------------------------------------------------------------
Total ..................................... $ 164 $ 105 $ 197 $ 118
=======================================================================================================
</TABLE>
Exploration and Production - involves the exploration for, and the production of
crude oil and natural gas.
Global Trade - handles the company's worldwide crude oil, condensate and natural
gas trading and marketing activities. Global Trade also purchases crude oil,
condensate and natural gas from the company's joint venture partners, royalty
owners and other unaffiliated oil and gas producers for resale.
Geothermal and Power Operations - involves the exploration for, and the
production and sale of, geothermal resources, and the construction and
operation of electrical power plants.
Diversified Business Group:
Agricultural Products - involves the manufacture, transportation and
marketing of nitrogen-based products for agricultural and industrial use.
Carbon and Minerals - involves the production and marketing of petroleum
coke, graphites and specialty minerals.
Pipelines - principally includes the company's equity interests in affiliated
pipeline companies.
Other - principally included the company's equity interest in The UNO-VEN
Company, prior to its restructuring in May 1997.
Table 7
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
SPECIAL ADJUSTMENTS
(Unaudited)
2nd Quarter of 1998 2nd Quarter of 1997
--------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings ..................................... $ 164 $ 105 $ 197 $ 118
Less: Special items
Exploration and Production
International
Asset sales ............................. 85 53 (17) (17)
Bangladesh well blowout ................. -- -- (10) (7)
Deferred tax adjustment ................. -- 7 -- --
Geothermal and Power Operations
Deferred tax adjustment - Sarulla ....... -- -- -- 7
Diversified Business Group
Carbon and Minerals
Asset sales ............................. -- -- 67 41
Environmental and litigation ............ (3) (1) -- --
Other
UNO-VEN restructuring ................... -- -- 46 39
Corporate and Unallocated
Asset sales ............................. -- -- 1 1
Environmental and litigation ............ (43) (27) (9) (5)
Insurance settlement .................... 17 11 -- --
Extraordinary item
Extinguishment of debt .................. -- -- (52) (38)
- -------------------------------------------------------------------------------------------------------
Total special items .............................. 56 43 26 21
- -------------------------------------------------------------------------------------------------------
Adjusted earnings ............................ $ 108 $ 62 $ 171 $ 97
=======================================================================================================
</TABLE>
Table 8
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ADJUSTMENTS
(Unaudited)
2nd Quarter of 1998 2nd Quarter of 1997
----------------------------------------------
Millions of dollars except share amounts Before-tax After-tax Before-tax After-tax
- -------------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ............................... $ 24 $ 15 $ 52 $ 33
Alaska ......................................... 2 1 17 11
International ..................................... 79 43 103 52
Global Trade .......................................... 7 4 8 5
Geothermal and Power Operations ....................... 22 14 11 6
Diversified Business Group
Agricultural Products ........................... 18 12 40 26
Carbon and Minerals ............................. 12 10 18 15
Pipelines ....................................... 19 15 18 16
Other ........................................... -- -- (4) (3)
Corporate and Unallocated
Administrative and general expense .............. (16) (12) (22) (14)
Net interest expense ............................ (33) (24) (29) (23)
Environmental and litigation expense ............ (5) (3) (7) (5)
New Ventures (non-E&P)........................... (8) (5) (20) (15)
Other ........................................... (13) (8) (14) (7)
- -------------------------------------------------------------------------------------------------------
Earnings from continuing operations ................... $ 108 $ 62 $ 171 $ 97
=======================================================================================================
Basic earnings from continuing operations
per share of common stock .......................... $ 0.26 $ 0.39
Diluted earnings from continuing operations
per share of common stock (a) ...................... $ 0.26 $ 0.39
Distributions on preferred securities (net of tax) excluded
in numerator for diluted earnings per share (a) .... $ -- $ 6
Basic weighted average shares ......................... 241 250
Diluted weighted average shares ....................... 243 264
<FN>
(a) In 1998, the effect of assumed conversion of preferred securities on
earnings per share is antidilutive.
</FN>
</TABLE>
Table 9
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
Six Months Ended Six Months Ended
June 30, 1998 June 30, 1997
---------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- --------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 .......................... $ 40 $ 25 $ 204 $ 128
Alaska .................................... 21 13 51 32
International ................................ 258 116 266 130
Global Trade ..................................... 16 10 19 11
Geothermal and Power Operations .................. 44 28 21 19
Diversified Business Group
Agricultural Products ...................... 31 21 70 46
Carbon and Minerals ........................ 27 24 97 66
Pipelines .................................. 37 30 35 30
Other ...................................... -- -- 44 37
Corporate and Unallocated
Administrative and general expense ......... (32) (23) (42) (27)
Net interest expense ....................... (66) (50) (83) (65)
Environmental and litigation expense ....... (100) (63) (34) (21)
New Ventures (non-E&P)...................... (19) (12) (31) (22)
Other ...................................... 4 4 (31) (20)
- --------------------------------------------------------------------------------------------------
Earnings from continuing operations
before discontinued operations
and extraordinary item ........................ 261 123 586 344
Loss from discontinued operations ................ -- -- (71) (44)
Extraordinary item ............................... -- -- (52) (38)
- --------------------------------------------------------------------------------------------------
Total ................................ $ 261 $ 123 $ 463 $ 262
==================================================================================================
</TABLE>
Table 10
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
SPECIAL ADJUSTMENTS
(Unaudited)
Six Months Ended Six Months Ended
June 30, 1998 June 30, 1997
---------------------------------------------
Millions of dollars Before-tax After-tax Before-tax After-tax
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings ................................ $ 261 $ 123 $ 463 $ 262
Less: Special items
Exploration and Production
United States
Spirit Energy
Asset sales ........................ -- -- 3 2
International
Asset sales ........................ 85 53 (16) (16)
Bangladesh well blowout ............ -- -- (10) (7)
Deferred tax adjustment ............ -- (14) -- --
Geothermal and Power Operations
Deferred tax adjustment - Sarulla .. -- -- -- 7
Diversified Business Group
Carbon and Minerals
Asset sales ........................ -- -- 67 41
Environmental and litigation ....... (4) (2) -- --
Other
UNO-VEN restructuring .............. -- -- 46 39
Corporate and Unallocated
Asset sales ........................ -- -- 7 5
Environmental and litigation ....... (94) (59) (23) (14)
Insurance settlement ............... 17 11 -- --
Discontinued Operations
Net loss on disposal ............... -- -- (71) (44)
Extraordinary item
Extinguishment of debt ............. -- -- (52) (38)
- --------------------------------------------------------------------------------------------------
Total special items ......................... 4 (11) (49) (25)
- --------------------------------------------------------------------------------------------------
Adjusted earnings ....................... $ 257 $ 134 $ 512 $ 287
==================================================================================================
</TABLE>
Table 11
<PAGE>
<TABLE>
<CAPTION>
UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ADJUSTMENTS
(Unaudited)
Six Months Ended Six Months Ended
June 30, 1998 June 30, 1997
---------------------------------------------
Millions of dollars except share amounts Before-tax After-tax Before-tax After-tax
- --------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> . <C> <C> <C> <C>
Spirit Energy 76 .......................... $ 40 $ 25 $ 201 $ 126
Alaska .................................... 21 13 51 32
International ................................ 173 77 292 153
Global Trade ..................................... 16 10 19 11
Geothermal and Power Operations .................. 44 28 21 12
Diversified Business Group
Agricultural Products ...................... 31 21 70 46
Carbon and Minerals ........................ 31 26 30 25
Pipelines .................................. 37 30 35 30
Other ...................................... -- -- (2) (2)
Corporate and Unallocated
Administrative and general expense ......... (32) (23) (42) (27)
Net interest expense ....................... (66) (50) (83) (65)
Environmental and litigation expense ....... (6) (4) (11) (7)
New Ventures (non-E&P) ..................... (19) (12) (31) (22)
Other ...................................... (13) (7) (38) (25)
- --------------------------------------------------------------------------------------------------
Earnings from continuing operations .............. $ 257 $ 134 $ 512 $ 287
==================================================================================================
Basic earnings from continuing operations
per share of common stock ..................... $ 0.56 $ 1.15
Diluted earnings from continuing operations
per share of common stock (a) ................. $ 0.55 $ 1.13
Distributions on preferred securities (net of tax) excluded
in numerator for diluted earnings per share (a) $ -- $ 12
Basic weighted average shares .................... 241 250
Diluted weighted average shares .................. 243 264
<FN>
(a) In 1998, the effect of assumed conversion of preferred securities on
earnings per share is antidilutive.
</FN>
</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 28, 1998 By: /s/ JOE D. CECIL
- --------------------- ---------------------------
Joe D. Cecil
Vice President and Comptroller
