-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cp4HZCH1MHEx524Mg0FHsWYOdduGO1Cqjyj0Is/g8mKbYIWSHCl31uQ9e4oEhSdt H/9NGKO2TVICwi7HE9CQLg== /in/edgar/work/20000628/0000716039-00-000026/0000716039-00-000026.txt : 20000920 0000716039-00-000026.hdr.sgml : 20000920 ACCESSION NUMBER: 0000716039-00-000026 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNOCAL CORP CENTRAL INDEX KEY: 0000716039 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 953825062 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-08483 FILM NUMBER: 662390 BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 11-K 1 0001.txt UNOCAL SAVINGS PLAN 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, 1999 Or [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------ -------------- Commission file number 1-8483 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: UNOCAL 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 INDEX TO FINANCIAL STATEMENTS OF THE UNOCAL SAVINGS PLAN The following financial statements reflect the status of the Unocal Savings Plan as of December 31, 1999 and 1998, and the results of its transactions for each of the years then ended. Page Number Report of Independent Accountants 2 Financial Statements: Statements of Net Assets Available for Benefits 3 Statements of Changes in Net Assets Available for Benefits 4 Notes to Financial Statements 5-10 Supplemental Schedules*: Schedule of Assets Held for Investment Purposes at End of Year 12 Schedule of Reportable Transactions 13 Exhibit Index 14 * Supplemental schedules required by the Employee Retirement Income Security Act of 1974 that are omitted are not applicable to the Unocal Savings Plan. REPORT OF INDEPENDENT ACCOUNTANTS The Unocal Savings Plan Committee: In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Unocal Savings Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets available for benefits for the years ended December 31, 1999 and 1998 in conformity with accounting principles generally accepted in the United States. 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 of these statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted 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 at end of year 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 supplemental schedules 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. PricewaterhouseCoopers LLP Los Angeles, California June 23, 2000
Unocal Savings Plan Statements of Net Assets Available for Benefits December 31, 1999 1998 ------------ ------------ Assets: Investments at fair value ................... $586,664,187 $522,090,803 Cash ........................................ 517,038 37,427 ------------ ------------ Total assets ....................... 587,181,225 522,128,230 Liabilities: Amounts due to plan sponsor ................. -- 516,250 ------------ ------------ Total liabilities .................. -- 516,250 ------------ ------------ Net assets available for benefits ................ $587,181,225 $521,611,980 ============ ============ See accompanying notes to financial statements.
3
Unocal Savings Plan Statements of Changes in Net Assets Available for Benefits Year Ended December 31, 1999 1998 ------------- ------------- Additions: Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments ...................... $ 106,667,069 $ (54,361,941) Interest ........................................... 2,826,155 2,026,372 Dividends .......................................... 21,546,976 15,051,327 ------------- ------------- Total investment income / (loss) .............. 131,040,200 (37,284,242) Contributions: Participant ........................................... 25,025,641 34,375,425 Company ............................................... 14,812,757 15,285,419 ------------- ------------- Total contributions ........................... 39,838,398 49,660,844 ------------- ------------- Total additions ....................................... 170,878,598 12,376,602 ------------- ------------- Deductions: Deductions from net assets attributed to: Participants withdrawals & distributions .............. 105,292,032 67,435,472 Trustee fees and other expenses ....................... 17,321 19,058 ------------- ------------- Total deductions ............................ 105,309,353 67,454,530 ------------- ------------- Net increase (decrease) ............................... 65,569,245 (55,077,928) Net assets available for benefits: Beginning of year ................................... 521,611,980 576,689,908 ------------- ------------- End of year ......................................... $ 587,181,225 $ 521,611,980 ============= ============= See accompanying notes to financial statements.
4 UNOCAL SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS NOTE 1 - Description of the Plan General - ------- Unocal Corporation (Unocal) was incorporated in Delaware on March 18, 1983, to operate as the parent of Union Oil Company of California. The Unocal Savings Plan (the "Plan") provides for Union Oil Company of California (d.b.a. Unocal) (the "company") matching contributions and for participants' voluntary pre-tax and/or after-tax contributions. Putnam Fiduciary Trust Company is the trustee ("Trustee") of the Plan and invests funds contributed by the company and participants to the Plan. During 1999 and 1998, all company contributions were invested in common stock of Unocal Corporation and participant contributions were invested at the discretion of the participants in a range of investment fund options and Unocal Corporation common stock. Effective March 3, 1997, participants could transfer company contributions into one or more of the Plan investment options. The company will continue to match contributions in Unocal common stock only; however, participants may thereafter transfer these balances into any of the Plan investment options once they are fully vested. Most balances remain with the Trustee until withdrawn by participants following 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 Savings Plan booklet dated January 1998 constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933. This Savings Plan booklet is a Summary Plan Description of the Plan as of January 1, 1998. The Savings Plan booklet dated January 1998 was superseded in May 2000; see note 6 for further detail. Participation - ------------- Regular, full-time employees are eligible to participate in the Plan immediately upon employment by the company. Part-time and temporary employees are eligible to participate beginning the first service year in which they complete at least 1,000 hours of service. Contributions - ------------- Participant Contributions -- Participant contributions are voluntary and can be all pre-tax, all after-tax, or a combination of both. However, a participant's total annual contribution must not exceed 15 percent of the participant's annual base pay. The pre-tax contributions are also known as 401(k) contributions. A participant's contributions shall not exceed the maximum amount allowed by law. Company Matching Contributions -- The company matches employee pre-tax 401(k) contributions on a dollar for dollar basis, up to six percent of the contributing participant's base pay. At its discretion, the company directs the Trustee to purchase shares attributable to company matching contributions either on the open market or by private purchases directly from the company. Participant Accounts - -------------------- Each participant's account is credited with the contributions and the respective net investment earnings or losses of the individual funds as governed by the participant's investment selection. 5 Vesting - ------- Participants are always 100 percent vested in participant contributions and the dividends on those contributions. Vesting in the company contributions portion of participants' accounts and the dividends thereon is based on years of vesting service. Effective January 1, 1998, a participant is 100 percent vested in company contributions and dividends thereon after two years of vesting service. Special vesting rules also apply to certain participants depending on the date and reason for termination of employment. Payment of Benefits - ------------------- Following termination of employment, participants may elect to receive their account balance or defer their distribution until a later date, but not beyond April 1 of the year following attainment of age 70-1/2. Rollovers into the Plan - ----------------------- The Plan will accept rollovers from other employers' qualified plans, subject to certain restrictions. Loans - ----- All employees who are participants of the Plan and have a sufficient balance in their employee pre-tax contributions account are eligible to apply for a loan. Members borrow against their own pre-tax account balance and all payments of principal and interest are credited back to their account. Loan types available are "any reason" (except investment in registered securities); "home purchase" (for purchase of a primary residence only); and loans "forced" by a hardship withdrawal request. Repayment periods range from 1 to 15 years depending on the type of loan. The Unocal Savings Plan Loan and Hardship Withdrawal Committee determines the interest rate for loans based on appropriate market rates and applicable federal regulations. Federal Income Tax Status - ------------------------- The company obtained its latest determination letter on February 15, 2000, from the Internal Revenue Service, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (the "Code"). The Plan has been amended since receiving the determination letter. However, the plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. Under Federal regulations effective January 1, 1998, the maximum employee pay eligible for benefit purposes under a qualified plan is $160,000 per year. If an employee's pay exceeded $160,000, only the first $160,000 of base pay was eligible for calculating employee and company contributions. Federal regulations place an annual dollar limit on the amount of employee pre-tax contributions. The limit was $10,000 for both 1999 and 1998. If pre-tax contributions reach the annual limit before year-end, they are suspended for the balance of the year. The company matching contributions are also suspended if the annual limit is reached before year-end. 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. 6 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 part. In the event of such discontinuance of the Plan, participants become fully vested in their individual accounts, and the net assets of the Plan must be allocated among the participants and beneficiaries of the Plan in the order provided by ERISA. An amendment may affect present as well as future participants, but may not diminish the account balance of any participant existing on the effective date of such amendment. The company has no present intent to discontinue the company matching contributions or 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 accounting principles generally accepted in the United States. In addition, the following accounting policies are applied: a. Purchases and sales of Unocal Corporation common stock: During normal trading by participants, the Trustee will collect all participant directed stock trades throughout the day and will execute and complete one or more buy and sell trades per day. During abnormal conditions or heavy trading by participants, the Trustee may not be able to execute and complete participant directed trades on the same day without affecting the share price. The Trustee is authorized, at its discretion, to buy or sell a portion of the trades during the next day or days. Prices received from each day's trading will be averaged to ensure that all participants requesting trades will be treated equitably. b. Dividend income is recorded on the ex-dividend date. c. Interest income is recorded as earned on the accrual basis. d. Benefits are recorded when paid. The Plan presents in the statement of changes in net assets available for benefits 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. Certain items in prior year financial statements have been reclassified to conform to the 1999 presentation. 7 Valuation of Investments - ------------------------ The Plan's investments are stated at fair value. Shares of registered investment companies are valued at the net asset value of shares held by the Plan at year-end. The Unocal Corporation common stock is valued at the closing price as reported for the New York Stock Exchange Composite Transactions at December 31, 1999 and 1998, respectively. Investments in common trust funds are valued based on information provided by the Plan's investment custodian. The financial statements of the common trust funds are audited annually by independent accountants. As a result, the value of the assets of the Plan are subject to the variations in the market. The fair value of the investments and net assets available for benefits could be materially affected by a change in market conditions. Use of Estimates in Preparation of the Financial Statements - ----------------------------------------------------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 The following table presents investments that represent 5 percent or more of the Plan's net assets: December 31, 1999 1998 - -------------------------------------------------------------------------------- Unocal Common Stock (a) 6,714 and 8,861 thousand shares, respectively .... $225,327,484 $258,638,208 Putnam S&P 500 Index Fund 3,502 and 3,458 thousand shares, respectively .... 122,349,845 100,025,611 Putnam New Opportunities Fund 785 and 650 thousand shares, respectively ........ 72,559,112 37,952,648 Putnam Money Market Fund 45,345 and 25,470 thousand shares, respectively .. 45,345,046 25,469,955 George Putnam Fund of Boston 2,675 and 2,905 thousand shares, respectively .... 43,633,627 52,411,607 Putnam Voyager Fund 1,358 and 1,081 thousand shares, respectively .... 42,921,726 23,697,333 (a) Includes both participant and nonparticipant-directed amounts.
8 During 1999, the Plan's investments appreciated in value as follows: Mutual funds $ 31,852,362 Common or collective trusts 21,518,949 Common stock 53,295,758 -------------- $ 106,667,069 ==============
Nonparticipant-Directed Investments - ----------------------------------- The nonparticipant-directed investments and the significant components of the changes in those net assets are as follows:
December 31, 1999 1998 - -------------------------------------------------------------------------------- Assets: .............................................. Unocal common stock ......................... $139,452,514 $159,766,160 ------------ ------------ Total assets ........................... 139,452,514 159,766,160 Liabilities Amounts due to plan sponsor ................. -- 516,250 ------------ ------------ Total liabilities ...................... -- 516,250 ------------ ------------ Total nonparticipant-directed net assets $139,452,514 $159,249,910 ============ ============
Year Ended December 31, 1999 1998 - ------------------------------------------------------------------------------------ Changes in net assets: ................................................ Contributions ................................. $ 14,812,757 $ 15,285,419 Dividends ..................................... 3,857,896 4,559,695 Net appreciation (depreciation) ............... 32,868,125 (51,525,716) Benefits paid to participants ................. (21,380,032) (18,849,142) Transfers to participant - directed investments (49,956,142) (26,136,443) ------------- ------------- Net decrease ............................. $(19,797,396) $(76,666,187) ============= =============
NOTE 4 - Forfeitures by Members Company basic and matching contributions and dividends thereon under the Plan are forfeited by employees whose employment is terminated before vesting is attained. However, if an employee is re-employed by the company and performs an hour of service within five years after the date of termination of employment, the forfeited account balance shares will be restored to the employee's Plan account. Amounts forfeited will be used to restore previously forfeited accounts when necessary. Remaining amounts forfeited will then be used to offset future company contributions to participant accounts. At December 31, 1999 and 1998, forfeited nonvested accounts totaled $170,782 and $87,262, respectively. 9 NOTE 5 - Parties-in-interest Certain of the Plan's investments are shares of mutual funds managed by the Trustee, as defined by the Plan Agreement. Therefore, these transactions qualify as party-in-interest transactions for which a statutory exemption exists. Fees paid by the Plan for investment management services are disclosed on the face of the statement of changes in net assets available for benefits at December 31, 1999 and 1998, respectively. The company, who also qualifies as a party-in-interest, absorbs certain administrative expenses of the Plan. Such transactions with the company qualify for a statutory exemption. Total expenses paid by the company were $169,268 and $162,326 for the years ended December 31, 1999 and 1998, respectively. NOTE 6 - Subsequent Events In May 2000, the company updated and replaced the Savings Plan booklet dated January 1998. The new Savings Plan booklet is a Summary Plan Description of the Plan and incorporates amendments to certain sections of the Plan, which took effect in 2000. Some of these changes pertained to the Plan's entry date for new hires, contribution election changes, investment election changes, distribution availability, hardship withdrawals, withdrawals by beneficiaries of deceased plan members, mandated commencement of benefits, loan availability, and Internal Revenue Service (IRS) requirements for obtaining an IRS Determination Letter. 10 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 have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. UNOCAL SAVINGS PLAN Date: June 28, 2000 By: /s/ Joe D. Cecil ---------------------- Joe D. Cecil Plan Committee Member 11
Unocal Savings Plan Schedule of Assets Held for Investment Purposes at End of Year As of December 31, 1999 (a) (b) (c) (d) (e) Identity of Issuer, Borrower, Description of Investment Cost Current Value Lessor or Similar Party - -------------------------------------------------------------------------------------------------------------- * Unocal Corporation Unocal Corporation Common Stock $188,764,936 $225,327,484 6,713,668 shares ** Putnam Investments Putnam S&P 500 Index Fund 78,912,212 122,349,845 3,501,713 shares ** Putnam Investments George Putnam Fund of Boston 50,934,745 43,633,627 2,675,268 shares ** Putnam Investments The Putnam Bond Index Fund 3,130,959 3,105,299 314,939 shares ** Vanguard Group The Vanguard Windsor II Fund 9,041,416 7,268,445 291,087 shares ** Putnam Investments Putnam International Growth Fund 8,843,853 11,028,344 370,203 shares ** Putnam Investments Putnam Money Market Fund 45,345,046 45,345,046 45,345,046 shares ** Putnam Investments Putnam New Opportunities Mutual Fund 51,944,932 72,559,112 785,187 shares ** Putnam Investments Putnam Voyager Fund 33,944,175 42,921,726 1,358,282 shares ** Putnam Investments Participant Loans 13,125,259 ---------------------------- Total assets held for investment purpose $470,862,274 $586,664,187 ============================
[FN] * Sponsor and employer and, therfore, a party-in-interest for which a statuory exemption exists. ** Trustee for the Plan and, therefore, a party-in-interest for which a statuory exemption exists. The Vanguard Windsor II Fund is also available through Putnam Investments. 12
UNOCAL SAVINGS PLAN Schedule of Reportable Transactions (1) December 31, 1999 (a) (b) (c) (d) (e) (f) (g) (h) (i) Description of Assets Expense Current Value of Identity of (including Interest Rate Purchase Selling Lease Incurred With Cost Asset on Party And Maturity in Case of Price Price Rental Transaction of Asset Transaction Date Net Gain - ------------------------------------------------------------------------------------------------------------------------------------ Unocal Corrporation (2) Common Stock $54,894,244 $ 54,894,244 $ 54,894,244 (456 transactions) Unocal Corporation (2) Common Stock $140,249,889 103,664,063 140,249,88 $ 36,585,826 (860 transactions)
[FN] (1) Under ERISA, a reportable transaction is a transaction or series of transactions during the Plan year that involves more than 5 percent of the fair value of the Plan's net assets at the beginning of the Plan year, with certain exceptions. (2) Sponsor and employer and, therefore, a party-in-interest for which a statutory exemption exists. 13 UNOCAL CORPORATION EXHIBIT INDEX Exhibit 23 Consent of PricewaterhouseCoopers LLP 14 EX-23 2 0002.txt CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-93225) of Unocal Corporation of our report, dated June 23, 2000, relating to the financial statements of the Unocal Savings Plan, which appears in this Form 11-K. PricewaterhouseCoopers LLP Los Angeles, California June 28, 2000 -----END PRIVACY-ENHANCED MESSAGE-----