<PAGE>
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, 1997
-----------------
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
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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, 1997 and 1996, and the results
of its transactions for each of the years then ended.
<TABLE>
<CAPTION>
Page Number
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<S> <C>
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
</TABLE>
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, 1997 and 1996, 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, 1997 and 1996, 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. These supplemental
schedules are the responsibility of the Plan's management. The fund information
in the statement of net assets available for benefits and the statements 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 26, 1998
Los Angeles, California
2
<PAGE>
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-----------------------------------------------
1997
---------------------------------------------------------
UNOCAL
FIDELITY COMMON GIC
FUND STOCK FUND TOTAL
------------- ------------ --------- ---------
ASSETS
<S> <C> <C> <C> <C>
Investments at fair value (Note 2)
Shares of registered investment companies
Fidelity Puritan Mutual Fund $ 3,362 $ -- $ -- $ 3,362
Unocal Common Stock -- 47,003 -- 47,003
--------- ---------- --------- ----------
3,362 47,003 -- 50,365
Investments at contract value (Note 3)
Union Bank of California Employee Benefit
Investment Contract Fund -- -- 6,622 6,622
--------- ---------- --------- ----------
Total Investments 3,362 47,003 6,622 56,987
Cash -- 1 1 2
--------- ---------- --------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $ 3,362 $ 47,004 $ 6,623 $ 56,989
========= ========== ========= ==========
PARTICIPANT DIRECTED
-----------------------------------------------
1996
---------------------------------------------------------
UNOCAL
FIDELITY COMMON GIC
FUND STOCK FUND TOTAL
------------- ------------ --------- ---------
ASSETS
Investments at fair value (Note 2)
Shares of registered investment companies
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)
Union 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>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
Participant Directed
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1997
----------------------------------------------------------------
Unocal
Fidelity Common GIC
Fund Stock Fund Total
---------- ----------- -------- ----------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net appreciation/(depreciation) in fair value
of investments $ 1,114 $ (2,341) $ - $ (1,227)
Interest 359 17 201 577
Dividends - 870 - 870
--------- --------- -------- ---------
Total investment income 1,473 (1,454) 201 220
Participant contributions - 6,538 5,084 11,622
--------- --------- -------- ---------
1,473 5,084 5,285 11,842
TOTAL ADDITIONS
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Participants withdrawals and distributions 25,527 1,738 - 27,265
--------- --------- -------- ---------
NET (DECREASE) INCREASE (24,054) 3,346 5,285 (15,423)
NET ASSETS AVAILABLE FOR BENEFITS:
BEGINNING OF YEAR 27,416 43,658 1,338 72,412
========= ========= ======== =========
END OF YEAR $ 3,362 $ 47,004 $ 6,623 $ 56,989
========= ========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
-----------------------------------------------
1996
----------------------------------------------------------------
Unocal
Fidelity Common GIC
Fund Stock Fund Total
---------- ----------- -------- ----------
<S> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Net appreciation in fair value
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) 0
--------- --------- --------- ---------
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>
The accompanying notes are an integral part of these financial statements
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 Union 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) Retirement Savings Plan booklet dated December 1, 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 1, 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 participants withdrawals and distributions in
the statement of changes in net assets available for benefits for the year ended
December 31, 1996.
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 that 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, 1997 and 1996.
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. The crediting interest rate for all outstanding
fixed-rate investment contracts was .4881 percent and .5100 percent as of
December 31, 1997 and 1996, respectively, and the average yield rate for such
contracts was 6.08 percent and 6.49 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 Union Bank of California. Union Bank of California is the Trustee as
defined by the Plan and, therefore, these transactions qualify for an exemption
from the party-in-interest rules.
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:
<TABLE>
<CAPTION>
December 31, 1997
---------------------------
<S> <C>
Net assets available for benefits per the financial statements $56,989
Participant contributions receivable 1,220
---------------------------
Net assets available for benefits per the Form 5500 58,209
</TABLE>
The following is a reconciliation of participant contributions per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
For the Year Ended
December 31, 1997
---------------------------
<S> <C>
Participant contributions per the financial statements $11,622
Participant contributions receivable 1,220
---------------------------
Participant contributions per the Form 5500 $12,842
</TABLE>
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)
Date: June 26, 1998
By: /s/ JOE D. CECIL
-----------------
Joe D. Cecil
Vice President and Comptroller
9
<PAGE>
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of Issue, Borrower, Description of Investment Including Maturity Date, Current
Lessor or Similar Party Rate of Interest, Collateral, Par or Maturity Value Cost Value
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity Investments Fidelity Puritan Mutual Fund $ 2,910 $ 3,362
(173.449 shares)
Unocal Corporation Unocal Corporation Common Stock 36,569 47,003
(1,211.000 shares)
* Union Bank of California Short-Term Money Market Fund 2 2
* Union Bank of California Employee Benefit Investment Contract Fund 6,623 6,622
(6622.66 shares)
------- -------
$46,104 $56,989
======= =======
</TABLE>
* Trustee for the Plan and, therefore, a party-in-interest for which an
statutory exemption exists
10
<PAGE>
Molycorp, Inc. 401(k) Retirement Savings Plan
Item 27(d) - Schedule of Reportable Transactions (1)
For Year Ended December 31, 1997
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f)
Description of Assets Expense
(including Interest Rate And Maturity Purchase Selling Lease Incurred With
Identity of Party Involved in case of loan) Price Price Rental Transaction
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Union Bank of California Employee Benefit Investment Contract Fund (2)
Purchased 5,279 shares (21 transactions) $ 5,280
Fidelity Investments Puritan Fund
Sold 1,059,220 shares (2 transactions) 18,884
Unocal Corporation Unocal Corporation Common Stock
Purchased 202 shares (11 transactions) 8,210
Union Bank of California Employee Benefit Investment Contract Fund (2)
Purchased 29,831 shares (32 transactions) 29,831
Sold 36,882 shares (21 transactions) 36,882
<CAPTION>
(a) (b) (g) (h) (i)
Description of Assets Current Value
(Including Interest Rate And Maturity of Asset on Net Gain
Identity of Party Involved in case of loan) Cost of Asset Transaction Date or (Loss)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Union Bank of California Employee Benefit Investment Contract Fund
Purchased 5,279 shares (21 transactions) $ 5,280 $ 5,280
Fidelity Investments Puritan Fund
Sold 1,059,220 shares (2 transactions) 17,530 18,884 1,354
Unocal Corporation Unocal Corporation Common Stock
Purchased 202 shares (11 transactions) 8,210 8,210
Union Bank of California Employee Benefit Investment Contract Fund
Purchased 29,831 shares (32 transactions) 29,831 29,831
Sold 36,882 shares (21 transactions) 36,882 36,882
</TABLE>
(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 an
statutory exemption exists.
11
<PAGE>
UNOCAL CORPORATION
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- --------------------------------------------------------------------------------
<S> <C>
23 Consent of Coopers & Lybrand L.L.P.
</TABLE>
12
<PAGE>
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 26,
1998, on our audits of the financial statements and supplemental schedules of
the Molycorp, Inc. 401(k) Retirement Savings Plan as of December 31, 1997 and
1996 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 26, 1998
