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) January 28, 1998
-----------------
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 January 28, 1998 the following news release was issued:
UNOCAL POSTS 4Q 1997 EARNINGS; COMPANY
EXPECTS FURTHER OIL AND GAS PRODUCTION INCREASES
------------------------------------------------
El Segundo, Calif., Jan. 28, 1998 - Unocal Corporation today reported
preliminary fourth-quarter 1997 earnings from continuing operations, excluding
special items, of $134 million, or 55 cents per share. These results are on the
same basis as the latest First Call consensus for basic earnings. In the fourth
quarter 1996, Unocal's earnings from continuing operations, excluding special
items, were $160 million, or 64 cents per share.
"Our international oil and gas operations reported a 4 percent increase
in net production on an oil-equivalent basis to more than 265,000 barrels per
day," said Roger C. Beach, Unocal chairman and chief executive officer. "Net gas
production in Thailand was up 2 percent over a year ago, and net oil production
in Indonesia (including host country share) was up 9 percent."
Beach added that the company expects to see further international
production increases in 1998 with new output from Azerbaijan, Myanmar, and
Bangladesh, as well as full-year production in Yemen.
Beach noted that the company's Lower 48 U.S. production declined
considerably in the last half of 1997. "We expect to reverse this decline in
1998 so that the full-year average will be on par with 1997," Beach said.
Beach added that the company's fourth quarter operating results also
reflected lower prices for crude oil and export urea and higher domestic and
international
<PAGE>
exploration expenses. These negative factors were offset partially by
significantly reduced foreign taxes due principally to the effects of currency
devaluation in Asia. The higher exploration expenses reflect Unocal's increased
emphasis on increasing production and reserves through an aggressive exploration
program.
Beach commented on the impact on Unocal of the current financial
turmoil in Asia. "Unocal's earnings and cash flow are mostly protected from a
foreign exchange perspective," Beach said, "and we remain optimistic about our
long-term prospects in Asia."
Beach went on to say that the carbon and minerals segment recorded
higher-than-anticipated earnings because of an increased contribution from
Unocal's equity interest in a Brazilian niobium operation. Earlier, Unocal had
indicated that the segment's earnings in the quarter would be lower because of a
two-month production shutdown at the Molycorp, Inc., molybdenum mine in New
Mexico.
Unocal's interest expense dropped $18 million in the quarter,
reflecting a reduction in the company's total debt to $2,170 million. This
compares with total debt of $3,058 million at the end of 1996.
Unocal completed its $400 million share repurchase program earlier this
month, with a total of 10.3 million shares purchased over the past year. Beach
said the board of directors has authorized extending the program and the company
may repurchase up to $200 million in Unocal common stock.
Net cash provided from operating activities, excluding working capital
changes, was $347 million, compared with $381 million in the fourth quarter
1996.
Unocal's preliminary reported net earnings for the fourth quarter,
including special items and discontinued operations, were $142 million, compared
with a loss of $497 million in the fourth quarter 1996. Reported basic net
earnings were 58 cents per share, compared with a loss of $1.99 per share a year
ago. Reported diluted net earnings per share were 57 cents, compared with a loss
of $1.97 per share in 1996. The 1996 results reflected a loss on the disposal of
the company's West Coast refining, marketing and transportation assets.
FULL-YEAR 1997 RESULTS
Preliminary full-year 1997 earnings from continuing operations,
excluding special items, were $515 million, or $2.08 per share, compared with
$562 million, or $1.97 per
2
<PAGE>
share, the year before.
Reported full-year 1997 net earnings (including special items,
discontinued operations, and an extraordinary charge for the early retirement of
debt) were $581 million, compared with earnings of $36 million in 1996. Reported
basic net earnings per share were $2.34, compared with a loss of 15 cents a year
ago. Reported diluted net earnings per share were $2.31, compared with a loss of
7 cents per share in 1996.
Unocal is a leading global energy resource and project development
company, with major oil and gas exploration and production activities in Asia
and the U.S. Gulf of Mexico. The company maintains twin headquarters in
California and Malaysia, with major offices in Singapore, Jakarta, Bangkok and
Sugar Land, Texas.
Forward-looking statements, including estimates of future exploration
and production activities and other business plans and outlook in this news
release are based on assumptions concerning market, competitive, regulatory,
environmental, operational and other considerations. Actual results could differ
materially.
For more information about Unocal and its activities, visit Unocal's
website at www.unocal.com.
3
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
CONDENSED CONSOLIDATED EARNINGS STATEMENT
(UNAUDITED)
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
-----------------------------------------
Dollars in millions except per share amounts 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues ............................................. $ 1,557 $ 1,385 $ 6,064 $ 5,328
Costs and other deductions ................................. 1,375 1,364 5,293 4,570
-----------------------------------------
Earnings from continuing operations before income taxes .... 182 21 771 758
Income taxes ............................................... 34 18 102 302
-----------------------------------------
Earnings from continuing operations ........................ 148 3 669 456
Earnings from discontinued operations (net of tax) ........ -- (9) -- 71
Loss on disposal (net of tax) ............................. (6) (491) (50) (491)
Extraordinary charge - extinguishment of debt (net of tax) . -- -- (38) --
-----------------------------------------
Net earnings ............................................... $ 142 $ (497) $ 581 $ 36
Dividends on preferred stock ............................... -- -- -- 18
Non-cash charge related to exchange of preferred stock ..... -- -- -- 54
-----------------------------------------
Net earnings applicable to common stock .................... $ 142 $ (497) $ 581 $ (36)
Basic earnings/(loss) per common share (a)
Continuing operations ................................ $ 0.60 $ 0.01 $ 2.69 $ 1.54
Discontinued operations .............................. (0.02) (2.00) (0.20) (1.69)
Extraordinary item - extinguishment of debt (net of tax) -- -- (0.15) --
-----------------------------------------
Basic net earnings/(loss) per share ........................ $ 0.58 $ (1.99) $ 2.34 $ (0.15)
Diluted earnings per common share (b) (c)
Continuing operations ................................ $ 0.59 $ 0.01 $ 2.65 $ 1.53
Discontinued operations .............................. (0.02) (1.98) (0.19) (1.60)
Extraordinary item - extinguishment of debt (net of tax) -- -- (0.15) --
-----------------------------------------
Diluted net earnings/(loss) per share ...................... $ 0.57 $ (1.97) $ 2.31 $ (0.07)
<FN>
(a) Weighted average shares - basic (millions)............. 245 250 248 249
(b) Weighted average shares - diluted (millions).......... 259 252 262 263
(c) Distributions on preferred securities excluded in numerator $ 6 $ -- $ 24 $ --
</FN>
- -------------------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
Dec. 31 Dec. 31
Millions of dollars 1997 1996
- ---------------------------------------------------------------------------------------
Assets
Cash and cash equivalents .................................. $ 338 $ 217
Net assets of discontinued operations (d) ................. -- 1,774
Other current assets ....................................... 1,163 1,237
Investments and long-term receivables ...................... 1,113 1,206
Properties - net ........................................... 4,816 4,590
Other assets ............................................... 100 99
-------------------
Total assets ....................................... $ 7,530 $ 9,123
Liabilities and Equity
Current portion of long-term debt and capital leases ...... $ 1 $ 118
Other current liabilities .................................. 1,159 1,504
Long-term debt and capital lease obligations ............... 2,169 2,940
Deferred income taxes ...................................... 137 348
Other deferred credits and liabilities ..................... 1,228 1,416
Convertible preferred securities ........................... 522 522
Stockholders' equity ....................................... 2,314 2,275
-------------------
Total liabilities and equity ....................... $ 7,530 $ 9,123
<FN>
(d) 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 Twelve Months
Ended December 31 Ended December 31
---------------------------------------------
Millions of dollars 1997 1996(a) 1997 1996(a)
- ---------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities
<S> <C> <C> <C> <C>
Net earnings ................................................ $ 142 $ (497) $ 581 $ 36
Adjustments to reconcile net earnings to
net cash provided by operating activities
Loss on disposal of discontinued operations (before-tax) 10 743 81 743
Depreciation, depletion and amortization .............. 207 335 962 1,059
Dry hole costs ........................................ 59 67 110 139
Deferred income taxes ................................. (23) (380) (249) (332)
Gain on sales of assets (before-tax) .................. (21) 96 (80) (77)
Other ................................................. (27) 17 (110) 113
Working capital and other changes related to operations ..... 50 104 (162) 3
---------------------------------------------
Net cash provided by operating activities ............. 397 485 1,133 1,684
Cash flows from investing activities
Capital expenditures (includes dry hole costs) ............. (474) (458) (1,427) (1,398)
Proceeds from sale of discontinued operations ............... -- -- 1,789 --
Proceeds from asset sales ................................... 45 24 100 609
---------------------------------------------
Net cash provided by/(used in) investing activities ... (429) (434) 462 (789)
Cash flows from financing activities
Net increase/(decrease) in long-term debt ................... 93 (8) (866) (568)
Dividends paid .............................................. (49) (50) (199) (226)
Repurchase of common stock .................................. (189) -- (362) --
Other ....................................................... (1) (1) (47) 22
---------------------------------------------
Net cash used in financing activities ................. (146) (59) (1,474) (772)
Increase/(decrease) in cash and cash equivalents .......................... (178) (8) 121 123
Cash and cash equivalents at beginning of period .......................... 516 225 217 94
---------------------------------------------
Cash and cash equivalents at end of period ................................ $ 338 $ 217 $ 338 $ 217
<FN>
(a) Cash flows related to discontinued operations have not been segregated for the 1997 and 1996 periods.
</FN>
- ---------------------------------------------------------------------------------------------------------------------------
CONDENSED CAPITAL EXPENDITURES
(UNAUDITED)
Millions of dollars
- ---------------------------------------------------------------------------------------------------------------------------
United States Exploration & Production .................................... $ 167 $ 89 $ 367 $ 416
International Exploration & Production .................................... 227 195 801 507
Geothermal Operations ..................................................... 26 23 102 114
Diversified Business Group ................................................ 19 56 59 82
New Ventures (Non E & P) ................................................. -- -- 5 5
Corporate & Unallocated ................................................... 35 28 44 50
Discontinued Operations ................................................... -- 67 49 224
---------------------------------------------
Total (b) ................................................... $ 474 $ 458 $ 1,427 $ 1,398
<FN>
(b) Includes capitalized interest of: .................................... $ 9 $ 4 $ 35 $ 13
</FN>
</TABLE>
Table 2
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
DISCRETIONARY CASH FLOW
(INCLUDES DISCONTINUED OPERATIONS)
(UNAUDITED) For the Three Months For the Twelve Months
Ended December 31 Ended December 31
-----------------------------------------------------------
Millions of dollars 1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net earnings ........................................................... $ 142 $ (497) $ 581 $ 36
Adjustments to net earnings
Depletion, depreciation & amortization .................. 200 260 893 984
Impairment .............................................. 7 75 69 75
Dry hole costs .......................................... 59 67 110 139
Deferred income taxes ................................... (23) (380) (249) (332)
(Gain) Loss on sales of assets .......................... (21) 96 (80) (77)
Exploration expenses .................................... 79 34 193 117
Proceeds from asset sales ............................... 45 24 1,889 609
Environmental and litigation provision .................. 14 106 134 219
Environmental and litigation payments ................... (29) (32) (162) (85)
Loss on disposal of discontinued operations ............. 10 743 81 743
Other ................................................... (12) (57) (82) (21)
- ------------------------------------------------------------------------------------------------------------------------------------
Total discretionary cash flow ..................... $ 471 $ 439 $ 3,377 $ 2,407
<FN>
The preceding table of discretionary cash flow is provided for analysts and
others in the investment community as a supplement to conventional financial
data prepared in accordance with generally accepted accounting principles.
Discretionary cash flow does not give effect to significant uses of cash,
including those for capital projects, debt reduction and regular dividends, some
of which result from previous commitments, and should only be considered in
conjunction with the full presentation of condensed consolidated cash flows on
the preceding page.
</FN>
</TABLE>
Table 2a
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Three Months
Ended December 31, 1997
----------------------------------------------------
Spirit Other Other
Millions of dollars Energy 76 U.S. Far East International Total
- -------------------------------------------------------------------------------------------------------------------
Sales (includes intercompany sales)
<S> <C> <C> <C> <C> <C>
Crude oil and condensate ........................... $ 63 $ 44 $ 111 $ 42 $ 260
Natural gas ........................................ 197 18 157 11 383
Natural gas liquids ................................ 15 1 7 1 24
Other .............................................. 1 -- -- -- 1
----------------------------------------------------
Total ........................................ 276 63 275 54 668
Other revenue .............................................. 23 2 7 7 39
Gain(loss) on asset sales .................................. 9 -- -- 1 10
----------------------------------------------------
Total revenues ............................... 308 65 282 62 717
Production costs ........................................... 54 20 37 21 132
Exploration expenses ....................................... 22 1 33 20 76
Dry hole costs ............................................. 19 -- 30 -- 49
Depreciation, depletion & amortization ..................... 94 11 68 16 189
Other operating expenses ................................... 21 4 13 12 50
----------------------------------------------------
Results of operations before income tax ............ $ 98 $ 29 $ 101 $ (7) $ 221
- -------------------------------------------------------------------------------------------------------------------
For the Three Months
Ended December 31, 1996
----------------------------------------------------
Spirit Other Other
Energy 76 U.S. Far East International Total
----------------------------------------------------
Sales (includes intercompany sales)
Crude oil and condensate ........................... $ 113 $ 63 $ 117 $ 45 $ 338
Natural gas ........................................ 212 23 167 13 415
Natural gas liquids ................................ 23 2 7 1 33
Other .............................................. 1 -- -- -- 1
----------------------------------------------------
Total ........................................ 349 88 291 59 787
Other revenue .............................................. 15 1 1 10 27
Gain(loss) on asset sales .................................. (7) (4) (1) 1 (11)
----------------------------------------------------
Total revenues ............................... 357 85 291 70 803
Production costs ........................................... 44 26 33 24 127
Exploration expenses ....................................... 7 -- 10 16 33
Dry hole costs ............................................. 13 5 37 9 64
Depreciation, depletion & amortization ..................... 130 54 45 25 254
Other operating expenses ................................... 36 6 16 (1) 57
----------------------------------------------------
Results of operations before income tax ............ $ 127 $ (6) $ 150 $ (3) $ 268
</TABLE>
Table 3
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Twelve Months
Ended December 31, 1997
-------------------------------------------------
Spirit Other Other
Millions of dollars Energy 76 U.S. Far East International Total
- ---------------------------------------------------------------------------------------------------
Sales (includes intercompany sales)
<S> <C> <C> <C> <C> <C>
Crude oil and condensate .................$ 308 $ 180 $ 453 $ 161 $ 1,102
Natural gas .............................. 743 65 642 46 1,496
Natural gas liquids ...................... 56 4 25 4 89
Other .................................... 3 -- -- -- 3
-------------------------------------------------
Total .............................. 1,110 249 1,120 211 2,690
Other revenue .................................... 33 6 9 23 71
Gain/(loss) on asset sales ....................... 11 -- -- (15) (4)
-------------------------------------------------
Total revenues ..................... 1,154 255 1,129 219 2,757
Production costs ................................. 193 93 130 74 490
Exploration expenses ............................. 59 1 73 51 184
Dry hole costs ................................... 29 -- 69 1 99
Depreciation, depletion & amortization ........... 468 53 303 69 893
Other operating expenses ......................... 77 12 47 57 193
-------------------------------------------------
Results of operations before income tax ..$ 328 $ 96 $ 507 $ (33) $ 898
- ---------------------------------------------------------------------------------------------------
For the Twelve Months
Ended December 31, 1996
-------------------------------------------------
Spirit Other Other
Energy 76 U.S. Far East International Total
-------------------------------------------------
Sales (includes intercompany sales)
Crude oil and condensate .................$ 400 $ 272 $ 395 $ 182 $ 1,249
Natural gas .............................. 774 84 529 48 1,435
Natural gas liquids ...................... 70 6 19 4 99
Other .................................... 4 -- -- -- 4
-------------------------------------------------
Total .............................. 1,248 362 943 234 2,787
Other revenue .................................... 23 3 1 27 54
Gain/(loss) on asset sales ....................... 1 106 -- 24 131
-------------------------------------------------
Total revenues ..................... 1,272 471 944 285 2,972
Production costs ................................. 178 122 127 81 508
Exploration expenses ............................. 26 -- 41 44 111
Dry hole costs ................................... 62 5 50 14 131
Depreciation, depletion & amortization ........... 398 128 208 69 803
Other operating expenses ......................... 136 19 46 3 204
-------------------------------------------------
Results of operations before income tax ..$ 472 $ 197 $ 472 $ 74 $ 1,215
</TABLE>
Table 4
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED) For the Threee Months For the Twelve Months
Ended December 31 Ended December 31
------------------------------------------------
1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------------------
Net daily production
Crude oil and condensate (thousand barrels daily):
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ................................. 42.9 51.0 44.5 51.7
Other (a) ....................................... 34.1 35.7 32.2 44.1
------------------------------------------------
Total United States ....................... 77.0 86.7 76.7 95.8
International
Far East (b) .................................... 96.1 87.6 95.2 83.7
Other ............................................ 25.2 25.3 25.7 27.1
------------------------------------------------
Total International ....................... 121.3 112.9 120.9 110.8
- --------------------------------------------------------------------------------------------------------------------------
Total Worldwide ........................... 198.3 199.6 197.6 206.6
Natural gas (million cubic feet daily):
United States
Spirit Energy 76 ................................. 813.4 895.6 860.0 911.6
Other (a) ....................................... 137.8 157.8 132.6 162.9
------------------------------------------------
Total United States ....................... 951.2 1,053.4 992.6 1,074.5
International
Far East (b) .................................... 809.3 797.2 794.5 668.8
Other ............................................ 56.9 58.4 60.5 67.9
------------------------------------------------
Total International ....................... 866.2 855.6 855.0 736.7
- --------------------------------------------------------------------------------------------------------------------------
Total Worldwide ........................... 1,817.4 1,909.0 1,847.6 1,811.2
Natural gas liquids (thousand barrels daily) (a) ............... 16.8 20.2 18.3 19.5
Geothermal (million kilowatt-hours daily) ....................... 20.3 19.9 18.0 17.9
Average sales prices
Crude oil and condensate (per barrel):
United States
Spirit Energy 76 ................................. $ 20.13 $ 24.09 $ 19.96 $ 21.27
Other ............................................ 14.83 19.29 15.25 16.83
Total United States ....................... 17.88 22.10 18.00 19.21
International
Far East ......................................... $ 17.95 $ 21.62 $ 18.52 $ 19.17
Other ............................................ 16.90 21.48 17.39 19.20
Total International ....................... 17.65 21.58 18.21 19.18
Total Worldwide ........................... $ 17.75 $ 21.85 $ 18.11 $ 19.20
Natural gas (per mcf):
United States
Spirit Energy 76 ................................. $ 2.88 $ 2.83 $ 2.53 $ 2.46
Other ............................................ 1.47 1.51 1.41 1.40
Total United States ....................... 2.67 2.59 2.38 2.30
International
Far East ......................................... $ 2.16 $ 2.39 $ 2.30 $ 2.28
Other ............................................ 2.34 1.95 2.25 1.85
Total International ....................... 2.17 2.36 2.30 2.23
Total Worldwide ........................... $ 2.43 $ 2.49 $ 2.34 $ 2.27
- --------------------------------------------------------------------------------------------------------------------------
<FN>
(a) Includes production from California upstream properties of:
Crude oil and condensate ..................................... -- 0.9 -- 7.4
Natural gas .................................................. -- -- -- 12.9
Natural gas liquids .......................................... -- -- -- 0.1
(b) Includes host country share in Indonesia of:
Crude oil and condensate ..................................... 26.2 29.9 28.4 27.5
Natural gas .................................................. 33.5 27.9 28.3 26.6
</FN>
</TABLE>
Table 5
<PAGE>
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS (continued)
(UNAUDITED)
For the Three Months For the Twelve Months
Ended December 31 Ended December 31
------------------------------------------
1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------
Agricultural products production volumes (thousand tons)
<S> <C> <C> <C> <C>
Ammonia ............................................ 383 379 1,455 1,468
Urea ............................................... 223 286 919 1,131
Other products ..................................... 207 164 701 658
Agricultural products sales volumes (thousand tons)
Ammonia ............................................ 179 134 769 708
Urea ............................................... 285 343 975 1,122
Other products ..................................... 175 269 1,082 1,240
</TABLE>
Table 6
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
4th Quarter of 1997 4th 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 ........................................ $ 98 $ 61 $ 127 $ 74
Other ................................................... 29 18 (6) (3)
International .............................................. 94 116 147 71
Geothermal Operations .......................................... 3 1 (109) (70)
Diversified Business Group
Agricultural Products .................................... 8 4 39 25
Carbon and Minerals ...................................... (1) -- 7 7
Pipelines ................................................ 16 13 22 18
Other .................................................... 2 1 7 5
Corporate and Unallocated
Administrative and general expense ....................... (20) (16) (39) (24)
Net interest expense ..................................... (24) (22) (59) (40)
Environmental and litigation expense ..................... (8) (5) (94) (59)
New Ventures ............................................. (15) (10) (16) (10)
Other .................................................... -- (13) (5) 9
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations
before discontinued operations
and extraordinary item ...................................... 182 148 21 3
Loss from discontinued operations .............................. (10) (6) (805) (500)
- ------------------------------------------------------------------------------------------------------------------------------------
Total .......................................................... $ 172 $ 142 $(784) $(497)
===================================================================================================================================
<FN>
EXPLORATION AND PRODUCTION - this segment explores for, produces, purchases and
markets crude oil, condensate, natural gas and natural gas liquids.
GEOTHERMAL OPERATIONS - this segment explores for, produces and sells geothermal
resources and constructs and operates electrical generating plants served by
the resources.
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 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 prior to the May 1, 1997 restructuring.
</FN>
</TABLE>
Table 7
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
SPECIAL ITEMS
(Unaudited)
4th Quarter of 1997 4th Quarter of 1996
------------------------------------------------------------------------
Millions of dollars Before- After-tax Before-tax After-tax
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings .................................................. $ 172 $ 142 $ (784) $ (497)
Less: Special items
Exploration and Production
United States
Spirit Energy
Asset sales .......................................... 9 5 (7) (5)
Impairment ........................................... (4) (2) (19) (11)
Settlement of federal leases ......................... -- -- 12 7
Restructuring provision .............................. -- -- (7) (4)
Other
Asset sales .......................................... -- -- (4) (2)
Impairment ........................................... -- -- (33) (21)
International
Asset sales .......................................... 2 1 -- --
Impairment ........................................... (3) (2) -- --
Uninsured loss - Bangladesh .......................... (2) (1) -- --
Deferred tax adjustment .............................. -- 26 -- --
Geothermal Operations
Asset sales .......................................... -- -- (92) (57)
Impairment ........................................... -- -- (23) (14)
Other ................................................ -- -- 3 2
Diversified Business Group
Carbon and Minerals
Environmental and litigation provision ............... (10) (6) (2) (1)
Restructuring costs .................................. (2) (1) -- --
Pipeline
Asset sales .......................................... -- -- 3 2
Other
UNO-VEN restructuring ................................ 2 1 -- --
Corporate and Unallocated
Asset sales .......................................... 11 7 3 2
Environmental and litigation provision ............... (5) (3) (83) (52)
Deferred tax adjustment .............................. -- (11) -- --
Other ................................................ -- -- (4) (3)
Discontinued Operations
Other ............................................... -- -- 1 1
Net loss on disposal ................................. (10) (6) (792) (491)
Extraordinary item ............................................ -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total special items ........................................... (12) 8 (1,044) (647)
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings .................................................. $ 184 $ 134 $ 260 $ 150
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Table 8
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ITEMS
(Unaudited)
4th Quarter of 1997 4th Quarter of 1996
----------------------------------------------------------------
Millions of dollars except per share amounts Before-tax After-tax Before-ta After-tax
- -----------------------------------------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 ........................................ $ 93 $ 58 $ 148 $ 87
Other ................................................... 29 18 31 20
International .............................................. 97 92 147 71
Geothermal Operations .......................................... 3 1 3 (1)
Diversified Business Group
Agricultural Products .................................... 8 4 39 25
Carbon and Minerals ...................................... 11 7 9 8
Pipelines ................................................ 16 13 19 16
Other .................................................... -- -- 7 5
Corporate and Unallocated
Administrative and general expense ....................... (20) (16) (39) (24)
Net interest expense ..................................... (24) (22) (59) (40)
Environmental and litigation expense ..................... (3) (2) (11) (7)
New Ventures ............................................. (15) (10) (16) (10)
Other .................................................... (11) (9) (4) 10
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations ............................ 184 134 274 160
Loss from discontinued operations .............................. -- -- (14) (10)
- ------------------------------------------------------------------------------------------------------------------------------------
Total .............................................. $ 184 $ 134 $ 260 $ 150
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings applicable to common stock ................... $ 134 $ 150
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings per common share ............................. $0.55 $0.60
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings from continuing
operations per common share ................................. $0.55 $0.64
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Table 9
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
Twelve Months Ended Twelve Months Ended
December 31, 1997 December 31, 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 ........................................ $ 328 $ 205 $ 472 $ 293
Other ................................................... 96 60 197 119
International .............................................. 474 375 546 316
Geothermal Operations .......................................... 31 26 (76) (55)
Diversified Business Group
Agricultural Products .................................... 83 54 152 98
Carbon and Minerals ...................................... 109 76 59 47
Pipelines ................................................ 70 59 86 69
Other .................................................... 45 38 22 14
Corporate and Unallocated
Administrative and general expense ....................... (82) (56) (126) (79)
Net interest expense ..................................... (133) (106) (256) (175)
Environmental and litigation expense ..................... (146) (91) (230) (143)
New Ventures ............................................. (49) (33) (36) (23)
Other .................................................... (55) 62 (52) (25)
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations
before discontinued operations
and extraordinary item ...................................... 771 669 758 456
Loss from discontinued operations .............................. (81) (50) (677) (420)
Extraordinary item ............................................. (52) (38) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total .............................................. $ 638 $ 581 $ 81 $ 36
====================================================================================================================================
</TABLE>
Table 10
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
SPECIAL ITEMS
(Unaudited)
Twelve Months Ended Twelve Months Ended
December 31, 1997 December 31, 1996
------------------------------------------------------
Dollars in millions except per share amounts Before After-tax Before-tax After-tax
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported earnings ...................................................... $ 638 $ 581 $ 81 $ 36
Less: Special items
Exploration and Production
United States
Spirit Energy
Asset sales ......................................... 11 7 1 --
Impairment .......................................... (66) (41) (19) (11)
Settlement of federal leases ........................ -- -- 12 7
Restructuring provision ............................. -- -- (7) (4)
Other
Asset sales ......................................... -- -- 106 66
Impairment .......................................... -- -- (33) (21)
International
Asset sales ......................................... (15) (16) 24 41
Impairment .......................................... (3) (2) -- --
Uninsured loss - Bangladesh ......................... (12) (8) -- --
Deferred tax adjustment ............................. -- 94 -- --
Geothermal Operations
Asset sales ......................................... -- -- (92) (57)
Deferred tax adjustment ............................. -- 10 -- --
Impairment .......................................... -- -- (23) (14)
Other ............................................... -- -- 3 2
Diversified Business Group
Carbon and Minerals
Asset sales ......................................... 67 41 -- --
Environmental and litigation provision .............. (10) (6) (2) (1)
Restructuring costs ................................. (2) (1) -- --
Pipeline
Asset Sales ......................................... -- -- 15 9
Other
UNO-VEN restructuring ............................... 48 40 -- --
Corporate and Unallocated
Asset Sales ......................................... 18 11 18 11
Environmental and litigation provision .............. (125) (78) (196) (122)
Deferred tax adjustment ............................. -- 103 -- --
Other ............................................... -- -- (15) (12)
Discontinued Operations
Asset Sales ......................................... -- -- 5 3
Other ................................................ -- -- 3 2
Net loss on disposal ................................ (81) (50) (792) (491)
Extraordinary item ........................................... (52) (38) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total special items ............................................... (222) 66 (992) (592)
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings ...................................................... $ 860 $ 515 $ 1,073 $ 628
====================================================================================================================================
</TABLE>
Table 11
<TABLE>
<CAPTION>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ITEMS
(Unaudited)
Twelve Months Ended Twelve Months Ended
December 31, 1997 December 31, 1996
--------------------------------------------------------------------
Millions of dollars except per share amounts Before-tax After-tax Before-tax After-tax
- ------------------------------------------------------------------------------------------------------------------------------------
Exploration and Production
United States
<S> <C> <C> <C> <C>
Spirit Energy 76 .................................... $ 383 $ 239 $ 485 $ 301
Other ............................................... 96 60 124 74
International .......................................... 504 307 522 275
Geothermal Operations ...................................... 31 16 36 14
Diversified Business Group
Agricultural Products ................................ 83 54 152 98
Carbon and Minerals .................................. 54 42 61 48
Pipelines ............................................ 70 59 71 60
Other ................................................ (3) (2) 22 14
Corporate and Unallocated
Administrative and general expense ................... (82) (56) (126) (79)
Net interest expense ................................. (133) (106) (256) (175)
Environmental and litigation expense ................. (21) (13) (34) (21)
New Ventures ......................................... (49) (33) (36) (23)
Other ................................................ (73) (52) (55) (24)
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations ........................ 860 515 966 562
Earnings from discontinued operations ...................... -- -- 107 66
- ------------------------------------------------------------------------------------------------------------------------------------
Total ................................................... $ 860 515 $ 1,073 $ 628
Dividends on preferred stock ............................... -- 18
Non-cash charge related to
exchange of preferred stock ............................. -- 54
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings applicable
to common stock ......................................... $ 515 $ 556
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings
per common share ........................................ $ 2.08 $ 2.23
- ------------------------------------------------------------------------------------------------------------------------------------
Adjusted earnings from continuing
operations per common share ............................. $ 2.08 $ 1.97
- ------------------------------------------------------------------------------------------------------------------------------------
</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: January 28, 1998 By: /s/ JOE D. CECIL
- ----------------------- ------------------------------
Joe D. Cecil
Vice President and Comptroller
