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) April 28, 1999
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UNOCAL CORPORATION
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(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)
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Item 5. Other Events.
First Quarter 1999 Earnings
Unocal Corporation stated that lower worldwide crude oil and natural gas prices
coupled with lower production led to reduced 1999 first quarter earnings of $7
million, or 3 cents per share (diluted). This compares with reported earnings of
$18 million, or 7 cents per share (diluted), in the first quarter of 1998.
Adjusted earnings for the quarter, excluding special items, were $20 million, or
8 cents per share (diluted), compared with $72 million, or 30 cents per share
(diluted), in the same quarter last year.
Worldwide crude oil and natural gas prices were down approximately $2.81 per
barrel, or 21 percent, and $0.21 per thousand cubic feet, or 10 percent,
respectively, from the same period last year. The lower crude oil and natural
gas prices reduced after-tax earnings by approximately $45 million, or 19 cents
per share, compared with the same period a year ago. Worldwide crude oil
production volumes were down 14 percent versus the same period in 1998. This
decrease reflected production declines in Indonesia and the United States along
with the effects of the sale of the company's Alberta, Canada, exploration and
production assets in the third quarter of 1998.
Capital expenditures for the first quarter of 1999 totaled $225 million. Total
capital expenditures are expected to be approximately $1 billion for 1999. The
company will continue to focus on high-potential deepwater exploration programs
in Indonesia and the Gulf of Mexico. The company may adjust its capital spending
estimate later depending on the timing of acquisitions and changes in commodity
prices.
In the first quarter, Unocal recorded special item after-tax losses of $10
million from the sale of its interest in The Geysers, a geothermal production
venture in Northern California, and $3 million for various litigation matters.
Forward-looking statements and estimates regarding exploration and production
activities, oil and gas prices and their related earnings effects, and capital
expenditures in this filing are based on assumptions concerning market,
competitive, regulatory, environmental, operational and other conditions and
considerations. Actual results could differ materially as a result of factors
discussed in Unocal's 1998 Form 10-K report filed with the Securities and
Exchange Commission.
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<CAPTION>
CONSOLIDATED RESULTS UNOCAL CORPORATION
(UNAUDITED)
For the Three Months
Ended March 31
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Millions of dollars except per share amounts 1999 1998
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<S> <C> <C>
Reported after-tax earnings ...................... $ 7 $ 18
Special items .................................... (13) (54)
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Adjusted after-tax earnings ...................... $ 20 $ 72
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Diluted reported earnings per share .............. $0.03 $0.07
Diluted adjusted earnings per share .............. $0.08 $0.30
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EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ITEMS
(UNAUDITED)
For the Three Months
Ended March 31
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Millions of dollars 1999 1998
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Exploration & Production
United States
Spirit Energy 76 (a) ....................... $ 2 $ 9
Alaska ..................................... 1 12
International
Far East ................................... 48 42
Other ...................................... (15) (8)
Global Trade & Transport
Global Trade ............................... 2 6
Pipelines .................................. 17 15
Geothermal and Power Operations .................. 11 14
Diversified Business Group
Agricultural Products ........................ 3 9
Carbon & Minerals (a) ......................... 9 14
Corporate and Unallocated
New Ventures .................................. (1) (7)
Administrative & General ...................... (21) (18)
Interest Expense - Net ........................ (31) (26)
Environmental & Litigation .................... (2) (1)
Other ......................................... (3) 11
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Total ............................................ $ 20 $ 72
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(a) Includes minority interest expense of:
Spirit Energy 76 .......................... $ 1 $ (1)
Carbon & Minerals ......................... (1) (2)
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<TABLE>
<CAPTION>
CONSOLIDATED EARNINGS STATEMENT UNOCAL CORPORATION
(UNAUDITED)
For the Three Months
Ended March 31
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Millions of dollars 1999 1998
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Revenues
<S> <C> <C>
Sales and operating revenues .................................... $ 1,189 $ 1,171
Interest, dividends and miscellaneous income .................... 28 11
Equity in earnings of affiliated companies ...................... 27 25
Gain/(loss) on sales of assets .................................. (13) --
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Total Revenues ..................................... $ 1,231 $ 1,207
Costs and Other Deductions
Crude oil, natural gas and product purchases .................... 616 416
Operating expense ............................................... 235 324
Selling, administrative and general expense ..................... 32 24
Depreciation, depletion and amortization ........................ 200 181
Dry hole costs .................................................. 27 50
Exploration expense ............................................. 38 47
Interest expense ................................................ 45 41
Property and other operating taxes .............................. 13 16
Distributions on convertible preferred
securities of subsidiary trust ............................... 8 8
Minority interests .............................................. -- 3
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Total costs and other deductions ................... 1,214 1,110
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Earnings before income taxes .................................... 17 97
Income taxes .................................................... 10 79
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Net earnings applicable to common stock ......................... $ 7 $ 18
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Basic earnings per share of common stock (a) .................... $ 0.03 $ 0.07
Diluted earnings per share of common stock (b) .................. $ 0.03 $ 0.07
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(a) Basic weighted average shares outstanding (in thousands)..... 241,426 241,430
(b) Diluted weighted average shares outstanding (in thousands)... 242,153 242,861
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<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEET UNOCAL CORPORATION
(UNAUDITED)
March 31 December 31
Millions of dollars 1999 1998
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Assets
<S> <C> <C>
Cash and cash equivalents ................................................. $ 182 $ 238
Other current assets ...................................................... 1,077 1,150
Investments and long-term receivables ..................................... 1,177 1,143
Properties - net .......................................................... 5,172 5,276
Other assets .............................................................. 201 145
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Total assets ........................................... $ 7,809 $ 7,952
Liabilities and Equity
Current liabilities ....................................................... $ 1,175 $ 1,376
Long-term debt ............................................................ 2,568 2,558
Deferred income taxes ..................................................... 122 132
Other deferred credits and liabilities .................................... 1,253 1,162
Company-obligated mandatorily redeemable convertible preferred
securities of a subsidiary trust holding solely parent debentures ......... 522 522
Stockholders' equity
Common stock ........................................................... 721 712
Retained earnings ...................................................... 1,893 1,935
Accumulated other comprehensive loss ................................... (34) (34)
Less treasury stock at cost (10,623 thousand shares).................... (411) (411)
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Total liabilities and equity ........................... $ 7,809 $ 7,952
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<TABLE>
<CAPTION>
CONSOLIDATED CASH FLOWS
(UNAUDITED) For the Three Months
Ended March 31
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Millions of dollars 1999 1998
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Cash flows from operating activities
<S> <C> <C>
Net earnings (loss) .............................................. $ 7 $ 18
Adjustments to reconcile net earnings to
net cash provided by operating activities
Depreciation, depletion and amortization .................... 200 181
Dry hole costs .............................................. 27 50
Deferred income taxes ....................................... (32) 13
(Gain)/loss on sales of assets (before-tax) ................. 13 --
Other ....................................................... (13) 20
Working capital and other changes related to operations........... (103) (188)
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Net cash provided by operating activities ................... 99 94
Cash flows from investing activities
Capital expenditures (includes dry hole costs) ................... (225) (326)
Proceeds from asset sales ........................................ 106 4
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Net cash (used in) provided by investing activities.......... (119) (322)
Cash flows from financing activities
Net increase (decrease) in long-term debt ........................ 10 262
Dividends paid ................................................... (48) (48)
Repurchase of common stock ....................................... -- (48)
Other ............................................................ 2 (1)
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Net cash provided by (used in) financing activities.......... (36) 165
Increase (decrease) in cash and cash equivalents ............................... (56) (63)
Cash and cash equivalents at beginning of period ............................... 238 338
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Cash and cash equivalents at end of period ..................................... $ 182 $ 275
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<TABLE>
<CAPTION>
OPERATING HIGHLIGHTS UNOCAL CORPORATION
(UNAUDITED)
For the Three Months
Ended March 31
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1999 1998
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United States Net Daily Production
Crude oil (thousand barrels daily)
<S> <C> <C>
Spirit Energy 76 ............................................................ 39 44
Alaska ...................................................................... 27 30
Natural gas - wet basis (million cubic feet daily)
Spirit Energy 76 ............................................................ 775 788
Alaska ...................................................................... 153 138
United States Average Sales Prices (a)
Crude oil (per barrel)
Spirit Energy 76 ............................................................$11.85 $13.94
Alaska ...................................................................... $7.86 $10.84
Natural gas (per mcf)
Spirit Energy 76 ............................................................ $1.92 $2.14
Alaska ...................................................................... $1.20 $1.47
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International Net Daily Production (b)
Crude oil (thousand barrels daily)
Far East .................................................................... 70 89
Other ....................................................................... 31 31
Natural gas (million cubic feet daily)
Far East .................................................................... 848 861
Other ....................................................................... 39 52
International Average Sales Prices (a)
Crude oil (per barrel)
Far East ....................................................................$10.65 $13.97
Other .......................................................................$10.22 $12.30
Natural gas (per mcf)
Far East .................................................................... $1.88 $2.03
Other ....................................................................... $1.76 $2.09
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Worldwide Net Daily Production (b)
Crude oil (thousand barrels daily) ............................................. 167 194
Natural gas (per mcf) .......................................................... 1,815 1,839
Worldwide Average Sales Prices (a)
Crude oil (per barrel) .........................................................$10.34 $13.15
Natural gas (per mcf) .......................................................... $1.83 $2.04
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(a) Prices exclude Global Trade margins
(b) Production includes certain host countries' shares of:Crude oil 12 19
Natural gas 73 50
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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: April 28, 1999 By: /s/ JOE D. CECIL
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Joe D. Cecil
Vice President and Comptroller
