-----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, CPzXPxXTlMhGDBeyXNBAog8hgzW5HgajrpfydsJ9U15jZkB2x5R6zkEKC7AQD+u4 A1FUrC/TD58kul8AF/EboA== 0000716039-03-000119.txt : 20031030 0000716039-03-000119.hdr.sgml : 20031030 20031030090642 ACCESSION NUMBER: 0000716039-03-000119 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031030 ITEM INFORMATION: FILED AS OF DATE: 20031030 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNOCAL CORP CENTRAL INDEX KEY: 0000716039 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 953825062 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08483 FILM NUMBER: 03965204 BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 MAIL ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 8-K 1 u8k103003.txt FURNISHED EARNINGS RELEASE - 3Q03 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) October 30, 2003 ------------------------ 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) Item 12. Disclosure of Results of Operations and Financial Condition. On October 30, 2003, Unocal Corporation issued a news release announcing the Company's earnings for the third quarter and nine months ended September 30, 2003. A copy of the news release is furnished with this report as Exhibit 99.1. The information in Exhibit 99.1 and Exhibit 99.2 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933. The news release includes information regarding adjusted after-tax earnings, which is defined as net earnings excluding special items, earnings from discontinued operations and cumulative effects of accounting changes. Special items represent certain significant matters which positively or negatively impact net earnings that management determines to be not representative of the Company's ongoing operations. Examples of such events which have generally been excluded in determining adjusted after-tax earnings include: gain/loss from major asset sales; environmental remediation costs primarily related to inactive, closed or previously owned company facilities and third party sites; costs or settlements associated with major restructuring plans; litigation settlement costs primarily associated with former company operations or closed/inactive facilities; significant asset impairments due to changes in commodity prices; material damage to company facilities or operations due to fire, explosion, earthquakes, storms or other `acts of god' not covered by insurance; certain costs associated with major acquisitions including litigation and significant trading derivatives; insurance recoveries associated with former company operations or for costs incurred in prior years. Adjusted after-tax earnings is a non-GAAP measure and is used because the Company's management believes it to be useful to investors and analysts as it facilitates a focus on the Company's ongoing operations. The measure also allows for convenient comparisons to the Company's prior reporting periods, as well as the results of ongoing operations of other companies in the exploration and production industry that utilize the successful efforts method of accounting. Adjusted after-tax earnings is not a substitute for net income determined in accordance with GAAP as a measure of profitability, because the special items excluded from adjusted after-tax earnings do in fact positively or negatively impact net earnings. Other companies may define special items differently; hence, we cannot assure that adjusted after-tax earnings are comparable with similarly titled amounts reported by other companies. The news release also includes information regarding EBITDAX, which is a measure defined as net earnings before interest, taxes, depreciation, depletion and amortization, asset impairments, exploration expenses, dry hole costs, special items, earnings from discontinued operations and cumulative effects of accounting changes. The Company's management believes this measure is helpful to investors and analysts because it facilitates a comparison with companies in the exploration and production industry that utilize the full cost method of accounting. Exhibit 99.2 is provided to analysts that cover the Company's stock, as additional information, for reference during the Company's earnings conference call. The exhibit summarizes the significant variances in adjusted after-tax earnings by business segment between the third and second quarters of 2003. 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: October 30, 2003 By: /s/ JOE D. CECIL ------------------ ------------------------------- Joe D. Cecil Vice President and Comptroller EX-99 3 exh99-1.txt NEWS RELEASE 3Q03 Exhibit 99.1 Unocal Corporation 2141 Rosecrans Avenue, Suite 4000 El Segundo, California 90245 [UNOCAL 76 LOGO] NEWS RELEASE Contact: Barry Lane (Media) 310-726-7731 Robert Wright (Investors) 310-726-7665 Unocal 3Q 2003 net earnings up 54% from year earlier; 9-months up 97% over 2002 - -------------------------------------------------------------------------------- El Segundo, Calif. Oct. 30, 2003 - Unocal Corporation (NYSE: UCL) today reported net earnings in the third quarter of $152 million, or 58 cents per share (diluted). This compares with net earnings of $99 million, or 41 cents per share (diluted), in the same period a year ago and $177 million, or 68 cents per share (diluted), in the second quarter 2003. Unocal's adjusted after-tax earnings for the third quarter 2003 were $190 million, or 72 cents per share (diluted). This compares with the Thomson/First Call consensus (published Oct. 26, 2003) of 68 cents per share. Unocal's adjusted after-tax earnings were $126 million, or 52 cents per share (diluted), in the third quarter 2002, and $191 million, or 73 cents per share (diluted), in the second quarter 2003. Adjusted after-tax earnings are net earnings excluding special items, earnings from discontinued operations and cumulative effects of accounting changes.
CONSOLIDATED RESULTS (UNAUDITED) 3rd Q 2nd Q 3rd Q ------------------------------------- Millions of dollars except per share amounts 2003 2003 2002 - -------------------------------------------------------------------------------- Earnings from continuing operations $ 152 $ 169 $ 99 Earnings from discontinued operations - 8 - Cumulative effects of accounting changes - - - - -------------------------------------------------------------------------------- Net earnings 152 177 99 - -------------------------------------------------------------------------------- Less: Earnings from discontinued operations - 8 - Less: Cumulative effects of accounting changes - - - Less: Special items (38) (22) (27) - -------------------------------------------------------------------------------- Adjusted after-tax earnings $ 190 $ 191 $ 126 ================================================================================ DILUTED EARNINGS PER SHARE DATA (UNAUDITED) Net earnings per share: Continuing operations $ 0.58 $ 0.65 $ 0.41 Discontinued operations - 0.03 - Cumulative effects of accounting changes - - - - -------------------------------------------------------------------------------- Total net earnings per share $ 0.58 $ 0.68 $ 0.41 - -------------------------------------------------------------------------------- Adjusted after-tax earnings per share $ 0.72 $ 0.73 $ 0.52 - -------------------------------------------------------------------------------- REVENUES FROM CONTINUING OPERATIONS (UNAUDITED) $ 1,541 $ 1,620 $ 1,297 ================================================================================
-2- In the third quarter 2003, special items included $23 million in net after-tax gains on asset sales (due to the sale of Tom Brown, Inc., common stock), a net after-tax charge of $32 million for impairments on assets held for sale and an additional $6 million after-tax charge associated with the company's 2003 restructuring plan. In addition, the current quarter included $23 million in net after-tax provisions for environmental and litigation matters related primarily to formerly operated sites or sites previously sold with retained liabilities. All of the special items are detailed in the Adjusted After-tax Earnings table. Unocal's third quarter 2003 earnings (compared with 3Q 2002) reflected higher natural gas and liquids prices, increased earnings from geothermal and power operations, and lower exploration expenses (including dry hole costs). The positive factors were offset partially by lower North America natural gas and liquids production, reduced earnings from the company's minerals operations, increased administrative and general expense due principally to higher pension-related costs, and higher outside litigation support costs. The lower North America production in the third quarter was due principally to natural reservoir declines and the impact of asset dispositions during the first nine months of 2003. Third-quarter total revenues were $1.54 billion, up from $1.30 billion in the third quarter 2002, primarily due to higher commodity prices for natural gas and liquids. Unocal's EBITDAX for the third quarter 2003 was $711 million, or $2.61 per share (diluted). This compares with $602 million, or $2.46 per share (diluted), for the same period in 2002. EBITDAX is net earnings before interest, taxes, depreciation, depletion and amortization, asset impairments, exploration expenses, dry hole costs, special items, earnings from discontinued operations and cumulative effects of accounting changes. EBITDAX is commonly used by investors and analysts to facilitate comparison of companies like Unocal that use the "successful efforts" accounting method with other exploration and production companies that use the "full-cost" method. Worldwide, Unocal's consolidated net daily production in the third quarter 2003 averaged 441,000 barrels of oil equivalent (BOE) per day, compared with 466,000 BOE per day a year ago. The decline in North America production was partially offset by increases in International natural gas and liquids production. Unocal's worldwide average liquids price, including hedging, was $27.28 per barrel, up from $24.81 in the third quarter 2002. The company's average worldwide realized price for natural gas, including hedging, was $3.60 per thousand cubic feet (mcf), compared with $2.79 per mcf a year ago. Hedging activities in the third quarter lowered worldwide liquids realizations by 6 cents per barrel, while hedging activities had no impact on natural gas realizations. -3- Nine-months results - ------------------- Net earnings for the first nine months of 2003 were $463 million, or $1.78 per share (diluted). This compares with $235 million, or 96 cents per share (diluted) for the same period a year ago. Unocal's adjusted after-tax earnings for the first nine months were $610 million, or $2.32 per share (diluted). This compares with $303 million, or $1.24 per share (diluted), for the first nine months of 2002. The special items are detailed in the Adjusted After-tax Earnings table included with this news release. Total revenues for the year-to-date were $4.95 billion, up from $3.71 billion last year.
For the Nine Months CONSOLIDATED RESULTS (UNAUDITED) Ended September 30, -------------------------- Millions of dollars except per share amounts 2003 2002 - -------------------------------------------------------------------------------- Earnings from continuing operations $ 538 $ 234 Earnings from discontinued operations 8 1 Cumulative effects of accounting changes (83) - - -------------------------------------------------------------------------------- Net earnings 463 235 - -------------------------------------------------------------------------------- Less: Earnings from discontinued operations 8 1 Less: Cumulative effects of accounting changes (83) - Less: Special items (72) (69) - -------------------------------------------------------------------------------- Adjusted after-tax earnings $ 610 $ 303 ================================================================================ DILUTED EARNINGS PER SHARE DATA (UNAUDITED) Net earnings per share: Continuing operations $ 2.05 $ 0.96 Discontinued operations 0.03 - Cumulative effects of accounting changes (0.30) - - -------------------------------------------------------------------------------- Total net earnings per share $ 1.78 $ 0.96 - -------------------------------------------------------------------------------- Adjusted after-tax earnings per share $ 2.32 $ 1.24 - -------------------------------------------------------------------------------- REVENUES FROM CONTINUING OPERATIONS (UNAUDITED) $ 4,950 $ 3,714 ================================================================================
Unocal's EBITDAX for the nine months of 2003 was $2.26 billion, or $8.30 per share (diluted), compared with $1.69 billion, or $6.90 per share (diluted), for the same period in 2002. Financial condition - ------------------- Cash flow from operating activities for the nine months ended Sept. 30, 2003, was $1.65 billion, compared with $1.23 billion for the comparable period of 2002. Capital spending was $1.30 billion for the nine months 2003, versus $1.25 billion in the same period a year ago. Pretax proceeds from asset sales were $152 million in the third quarter, bringing the total for the year to date to $343 million. Third quarter dispositions included the sale of the majority of the company's common stock holding in Tom Brown, Inc. Proceeds from the sale of assets in 2003 will be used mainly to reduce debt and other financings. The company's total consolidated long-term debt (including current maturities) was $3.12 billion at Sept. 30, 2003, compared with $3.0 billion at year-end 2002. Cash and cash-equivalents were $485 million at Sept. 30, 2003, compared with $168 million at December 31, 2002. During the third quarter, as a result of the Financial Accounting Standards Board's -4- Interpretation No. 46 dealing with "Variable Interest Entities," the company consolidated $78 million in long-term debt of an affiliate that operates geothermal steam-fired power plants in Indonesia. In the first nine months of 2003, the company retired more than $400 million in debt and other long-term financings. In addition, the company purchased more than $280 million of its outstanding debt securities through a tender offer and open market purchases in October. Fourth quarter 2003 outlook - --------------------------- For the fourth quarter 2003, Unocal is forecasting adjusted after-tax earnings of 55 to 65 cents per share (diluted). This forecast compares with the Thomson/First Call consensus (published Oct. 26, 2003) of 58 cents per share for the quarter. The fourth quarter forecast assumes average NYMEX benchmark prices of $30.00 per barrel of crude oil and $5.00 per million British thermal units (mmBtu) for North America natural gas for the period. Unocal's fourth quarter adjusted after-tax earnings are expected to change $8 million for every $1 change in its average worldwide realized price for crude oil and $3.5 million for every 10-cent change in its average realized North America natural gas price, excluding the effect of hedging activities. The forecast also assumes pretax dry hole costs in the fourth quarter of $50 to $65 million. The company's current estimate for fourth quarter 2003 production is between 430,000 and 440,000 BOE per day. Unocal's total actual production could also be impacted by cost recovery volume fluctuations under its various foreign production-sharing contracts due to changes in commodity prices, the rate of ramp-up of production at the West Seno field offshore Indonesia, changes in demand for gas in Thailand, and production and exploration performance in the Gulf of Mexico. The fourth-quarter adjusted after-tax earnings forecast excludes special items. Because of the inherent uncertainty related to special items, determining whether or when they will occur and quantifying their dollar impact, Unocal does not forecast net earnings. About Unocal Corporation - ------------------------ Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal oil and gas activities are in North America and Asia. Conference call/financial database - ---------------------------------- Unocal will webcast its quarterly earnings conference call today at 1 p.m.PST (4 p.m. EST) over the Internet. To listen to the live webcast, go to the Investor Presentations section of the Unocal web site, www.unocal.com. Replays of the conference call, including questions and answers, will be available. -5- Complete detailed financial tables for the third quarter 2003 and the comparable prior periods are available in the "Quarterly Fact Book," which is posted in the Data Warehouse in the Investor Information section of the company's web site. The Quarterly Fact Book is also available upon request from Unocal Investor Relations. * * * * * This news release contains certain forward-looking statements about expected adjusted after-tax earnings, production rates, commodity prices, and dry hole costs. These statements are not guarantees of future performance. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Actual results could differ materially as a result of changes in commodity prices; the levels of the company's oil and gas production; the extent of the company's operating cash flow and other capital resources available to fund its capital expenditures; regulatory, geological, operating and economic considerations; and other factors discussed in Unocal's 2002 Annual Report on Form 10-K and subsequent reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release. Investors are urged to consider closely the disclosure in Unocal's 2002 Annual Report on Form 10-K and other reports filed with the SEC (SEC File No. 1-8483). Copies of the company's SEC filings are available from the company by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site, www.unocal.com. * * * * * -6-
CONSOLIDATED EARNINGS (UNAUDITED) UNOCAL CORPORATION For the Three Months For the Nine Months Ended September 30, Ended September 30, ------------------------------------------------- Millions of dollars except per share amounts 2003 2002 2003 2002 - -------------------------------------------------------------------------------- Revenues Sales and operating revenues $ 1,478 $ 1,299 $ 4,817 $ 3,695 Interest, dividends and miscellaneous income (loss) (2) (3) 18 17 Gain on sales of assets 65 1 115 2 - -------------------------------------------------------------------------------- Total revenues 1,541 1,297 4,950 3,714 Costs and other deductions Crude oil, natural gas and product purchases 447 401 1,629 1,124 Operating expense 346 326 965 949 Administrative and general expense 61 34 199 114 Depreciation, depletion and amortization 231 245 746 724 Asset impairments 83 6 86 27 Dry hole costs 14 40 95 81 Exploration expense 39 60 182 180 Interest expense 45 40 119 134 Property and other operating taxes 18 7 61 41 Distributions on convertible preferred securities of subsidiary trust 8 8 24 24 - -------------------------------------------------------------------------------- Total costs and other deductions 1,292 1,167 4,106 3,398 Earnings from equity investments 54 35 150 123 - -------------------------------------------------------------------------------- Earnings from continuing operations before income taxes and minority interests 303 165 994 439 - -------------------------------------------------------------------------------- Income taxes 147 68 448 203 Minority interests 4 (2) 8 2 - -------------------------------------------------------------------------------- Earnings from continuing operations 152 99 538 234 - -------------------------------------------------------------------------------- Earnings from discontinued operations - - 8 1 Cumulative effects of accounting changes (a) - - (83) - - -------------------------------------------------------------------------------- Net earnings $ 152 $ 99 $ 463 $ 235 ================================================================================ Basic earnings per share of common stock (b) Continuing operations $ 0.59 $ 0.41 $ 2.08 $ 0.96 Net earnings $ 0.59 $ 0.41 $ 1.79 $ 0.96 Diluted earnings per share of common stock (c) Continuing operations $ 0.58 $ 0.41 $ 2.05 $ 0.96 Net earnings $ 0.58 $ 0.41 $ 1.78 $ 0.96 Cash dividends declared per share of common stock $ 0.20 $ 0.20 $ 0.60 $ 0.60 - -------------------------------------------------------------------------------- (a) Net of tax (benefit) $ - $ - $ (48) $ - (b) Basic weighted average shares outstanding (in thousands) 258,525 244,664 258,244 244,503 (c) Diluted weighted average shares outstanding (in thousands) 272,691 245,226 272,172 245,378
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CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) UNOCAL CORPORATION At September 30, At December 31, Millions of dollars 2003 2002 - -------------------------------------------------------------------------------- Assets Cash and cash equivalents $ 485 $ 168 Other current assets - net 1,252 1,207 Investments and long-term receivables - net 903 1,044 Properties - net 8,492 7,879 Goodwill 129 122 Other assets 407 340 - -------------------------------------------------------------------------------- Total assets $ 11,668 $ 10,760 ================================================================================ Liabilities and Stockholders' Equity Current liabilities (a) $ 1,900 $ 1,632 Long-term debt and capital leases 2,868 3,002 Deferred income taxes 709 593 Accrued abandonment, restoration and environmental liabilities 912 622 Other deferred credits and liabilities 915 816 Minority interests 28 275 Convertible preferred securities of a subsidiary trust 522 522 Stockholders' equity 3,814 3,298 - -------------------------------------------------------------------------------- Total liabilities and stockholders' equity $ 11,668 $ 10,760 ================================================================================ (a) Includes current portion of LTD of: 249 6
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CONSOLIDATED CASH FLOWS (UNAUDITED) UNOCAL CORPORATION For the Nine Months Ended September 30, ---------------------- Millions of dollars 2003 2002 - -------------------------------------------------------------------------------- Cash Flows from Operating Activities Net earnings $ 463 $ 235 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, depletion and amortization 746 724 Asset impairments 86 27 Dry hole costs 95 81 Amortization of exploratory leasehold costs 88 74 Deferred income taxes 102 25 Gain on sales of assets (115) (2) Gain on disposal of discontinued operations (13) (2) Pension expense 65 17 Restructuring provisions net of payments 22 14 Cumulative effect of accounting changes 83 - Other 5 (85) Working capital and other changes related to operations 20 124 - -------------------------------------------------------------------------------- Net cash provided by operating activities 1,647 1,232 - -------------------------------------------------------------------------------- Cash Flows from Investing Activities Capital expenditures (includes dry hole costs) (1,296) (1,248) Proceeds from sales of assets 343 61 Proceeds from sale of discontinued operations 11 3 - -------------------------------------------------------------------------------- Net cash used in investing activities (942) (1,184) - -------------------------------------------------------------------------------- Cash Flows from Financing Activities Long-term borrowings 154 437 Reduction of long-term debt and capital lease obligations (156) (267) Minority interests (257) (6) Proceeds from issuance of common stock 21 19 Dividends paid on common stock (155) (147) Other 5 1 - -------------------------------------------------------------------------------- Net cash provided by (used in) financing activities (388) 37 - -------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 317 85 - -------------------------------------------------------------------------------- Cash and cash equivalents at beginning of year 168 190 - -------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 485 $ 275 ================================================================================
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NET EARNINGS AND ADJUSTED AFTER-TAX EARNINGS BY BUSINESS SEGMENT (UNAUDITED) 3rd Q 2003 2nd Q 2003 ------------------------------------------------- Adjusted Adjusted Net After-Tax Net After-Tax Millions of dollars Earnings Earnings (a) Earnings Earnings (a) - -------------------------------------------------------------------------------- Exploration & Production North America U.S. Lower 48 (b) $ 77 $ 85 $ 89 $ 70 Alaska 12 12 14 14 Canada 15 15 8 6 International Far East 115 115 116 116 Other 21 21 29 29 Trade 3 3 4 4 Midstream 16 17 18 18 Geothermal and Power Operations 19 19 7 7 Corporate and Other Administrative and General (21) (21) (22) (22) Interest Expense - Net (32) (32) (28) (28) Environmental and Litigation (33) (15) (28) (2) Other (a) (40) (29) (38) (21) - -------------------------------------------------------------------------------- After-tax earnings (loss) from continuing operations 152 190 169 191 After-tax earnings from discontinued operations - - 8 - Cumulative effects of accounting changes - - - - - -------------------------------------------------------------------------------- After-tax earnings (loss) $ 152 $ 190 $ 177 $ 191 ================================================================================ (a) For a reconciliation to net earnings, see the Adjusted After-Tax Earnings table. (b) Includes earnings (loss) from: Onshore / Shelf 85 93 118 99 Deep water (8) (8) (29) (29)
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NET EARNINGS AND ADJUSTED AFTER-TAX EARNINGS BY BUSINESS SEGMENT (UNAUDITED) 3rd Q 2003 3rd Q 2002 ------------------------------------------------- Adjusted Adjusted Net After-Tax Net After-Tax Millions of dollars Earnings Earnings (a) Earnings Earnings (a) - -------------------------------------------------------------------------------- Exploration & Production North America U.S. Lower 48 (b) $ 77 $ 85 $ 13 $ 13 Alaska 12 12 10 10 Canada 15 15 (2) 3 International Far East 115 115 120 120 Other 21 21 16 16 Trade 3 3 (1) (1) Midstream 16 17 17 17 Geothermal and Power Operations 19 19 5 5 Corporate and Other Administrative and General (21) (21) (21) (21) Interest Expense - Net (32) (32) (28) (28) Environmental and Litigation (33) (15) (14) (3) Other (a) (40) (29) (16) (5) - -------------------------------------------------------------------------------- After-tax earnings (loss) from continuing operations 152 190 99 126 After-tax earnings from discontinued operations - - - - Cumulative effects of accounting changes - - - - - -------------------------------------------------------------------------------- After-tax earnings (loss) $ 152 $ 190 $ 99 $ 126 ================================================================================ (a) For a reconciliation to net earnings, see the Adjusted After-Tax Earnings table. (b) Includes earnings (loss) from: Onshore / Shelf 85 93 23 23 Deep water (8) (8) (10) (10)
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NET EARNINGS AND ADJUSTED AFTER-TAX EARNINGS BY BUSINESS SEGMENT (UNAUDITED) For the Nine Months Ended September 30, ------------------------------------------------- 2003 2003 2002 2002 ------------------------------------------------- Adjusted Adjusted Net After-Tax Net After-Tax Millions of dollars Earnings Earnings (a) Earnings Earnings (a) - -------------------------------------------------------------------------------- Exploration & Production North America U.S. Lower 48 (b) $ 277 $ 266 $ 37 $ 46 Alaska 41 41 (1) (1) Canada 47 43 (5) - International Far East 352 352 323 323 Other 71 71 40 40 Trade (2) (2) 1 1 Midstream 52 53 59 59 Geothermal and Power Operations 38 38 25 25 Corporate and Other Administrative and General (66) (66) (64) (64) Interest Expense - Net (91) (91) (93) (93) Environmental and Litigation (78) (20) (50) (6) Other (a) (103) (75) (38) (27) - -------------------------------------------------------------------------------- After-tax earnings (loss) from continuing operations 538 610 234 303 After-tax earnings from discontinued operations 8 - 1 - Cumulative effects of accounting changes (83) - - - - -------------------------------------------------------------------------------- After-tax earnings (loss) $ 463 $ 610 $ 235 $ 303 ================================================================================ (a) For a reconciliation to net earnings, see the Adjusted After-Tax Earnings table. (b) Includes earnings (loss) from: Onshore / Shelf 345 334 65 74 Deep water (68) (68) (28) (28)
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OPERATING HIGHLIGHTS UNOCAL CORPORATION For the Three Months For the Nine Months Ended September 30, Ended September 30, ----------------------------------------- 2003 2002 2003 2002 - -------------------------------------------------------------------------------- North America Net Daily Production Liquids (thousand barrels) U.S. Lower 48 (a) (b) 42 52 45 54 Alaska 21 24 22 25 Canada 17 16 17 17 - -------------------------------------------------------------------------------- Total liquids 80 92 84 96 Natural gas - dry basis (million cubic feet) U.S. Lower 48 (a) (b) 595 716 650 740 Alaska 49 61 59 79 Canada 90 90 91 91 - -------------------------------------------------------------------------------- Total natural gas 734 867 800 910 North America Average Prices (excluding hedging activities) (c) Liquids (per barrel) U. S. Lower 48 $ 27.92 $ 24.85 $ 28.04 $ 22.24 Alaska $ 29.39 $ 26.10 $ 29.87 $ 23.36 Canada $ 24.02 $ 22.70 $ 25.37 $ 20.29 Average $ 27.47 $ 24.79 $ 27.96 $ 22.18 Natural gas (per mcf) U. S. Lower 48 $ 4.78 $ 2.95 $ 5.39 $ 2.78 Alaska $ 1.46 $ 1.20 $ 1.27 $ 1.48 Canada $ 4.96 $ 2.08 $ 5.24 $ 2.38 Average $ 4.57 $ 2.73 $ 5.05 $ 2.62 - -------------------------------------------------------------------------------- North America Average Prices (including hedging activities) (c) Liquids (per barrel) U. S. Lower 48 $ 27.71 $ 24.84 $ 27.37 $ 22.28 Alaska $ 29.39 $ 26.10 $ 29.87 $ 23.36 Canada $ 24.02 $ 22.70 $ 25.37 $ 20.29 Average $ 27.36 $ 24.78 $ 27.59 $ 22.20 Natural gas (per mcf) U. S. Lower 48 $ 4.82 $ 2.97 $ 5.11 $ 2.87 Alaska $ 1.46 $ 1.20 $ 1.27 $ 1.48 Canada $ 4.64 $ 2.10 $ 4.93 $ 2.44 Average $ 4.57 $ 2.75 $ 4.79 $ 2.69 - -------------------------------------------------------------------------------- (a)Includes proportional interests in production of equity investees. (b)Includes minority interests of : Liquids - 8 1 8 Natural gas - 94 7 96 Barrels oil equivalent - 24 2 24 (c)Excludes gains/losses on derivative positions not accounted for as hedges and ineffective portions of hedges.
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OPERATING HIGHLIGHTS (CONTINUED) UNOCAL CORPORATION For the Three Months For the Nine Months Ended September 30, Ended September 30, ----------------------------------------- 2003 2002 2003 2002 - -------------------------------------------------------------------------------- International Net Daily Production (d) Liquids (thousand barrels) Far East 59 52 58 53 Other (a) 20 20 20 20 - -------------------------------------------------------------------------------- Total liquids 79 72 78 73 Natural gas - dry basis (million cubic feet) Far East 883 859 888 855 Other (a) 74 83 91 79 - -------------------------------------------------------------------------------- Total natural gas 957 942 979 934 International Average Prices (d) (e) Liquids (per barrel) Far East $26.65 $23.99 $26.92 $21.95 Other $29.19 $26.94 $27.74 $24.62 Average $27.20 $24.84 $27.11 $22.62 Natural gas (per mcf) Far East $2.86 $2.84 $2.79 $2.74 Other $2.93 $2.80 $2.88 $2.70 Average $2.87 $2.83 $2.80 $2.74 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Worldwide Net Daily Production (a) (b) (d) Liquids (thousand barrels) 159 164 162 169 Natural gas - dry basis (million cubic feet) 1,691 1,809 1,779 1,844 Barrels oil equivalent (thousands) 441 466 458 476 Worldwide Average Prices (excluding hedging activities) (c) Liquids (per barrel) $27.34 $24.82 $27.55 $22.37 Natural gas (per mcf) $3.60 $2.78 $3.79 $2.68 Worldwide Average Prices (including hedging activities) (c) (e) Liquids (per barrel) $27.28 $24.81 $27.36 $22.38 Natural gas (per mcf) $3.60 $2.79 $3.68 $2.72 - -------------------------------------------------------------------------------- (a)Includes proportional interests in production of equity investees. (b)Includes minority interests of : Liquids - 8 1 8 Natural gas - 94 7 96 Barrels oil equivalent - 24 2 24 (c)Excludes gains/losses on derivative positions not accounted for as hedges and ineffective portions of hedges. (d)International production is presented utilizing the economic interest method. (e)International did not have any hedging activities.
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ADJUSTED AFTER-TAX EARNINGS (UNAUDITED) For the Three Months For the Nine Months Ended September 30, Ended September 30, ------------------------------------------ Millions of dollars except per share amounts 2003 2002 2003 2002 - -------------------------------------------------------------------------------- Net earnings $ 152 $ 99 $ 463 $ 235 - -------------------------------------------------------------------------------- Less: Earnings from discontinued operations - - 8 1 Cumulative effects of accounting changes - - (83) - - -------------------------------------------------------------------------------- Earnings from continuing operations 152 99 538 234 - -------------------------------------------------------------------------------- Less: Special items E&P - North America - U.S. Lower 48 Asset sales 23 - 43 2 Assets held for sale-impairments (31) - (31) - Environmental and litigation provisions - - (1) 1 Restructuring - - - (12) E&P - North America - Canada Trading derivatives-non-hedging - (5) 4 (5) Midstream Assets held for sale-impairments (1) - (1) - Corporate & Other Environmental and litigation provisions (23) (22) (63) (57) Insurance settlements - - - 2 Restructuring (6) - (23) - Total special items (38) (27) (72) (69) - -------------------------------------------------------------------------------- Adjusted after-tax earnings $ 190 $ 126 $ 610 $ 303 ================================================================================ Adjusted after-tax diluted earnings per share $ 0.72 $ 0.52 $ 2.32 $ 1.24 ================================================================================
The preceding table reconciles adjusted after-tax earnings to net earnings. Special items represent certain significant matters which positively or negatively impact net earnings that management determines to be not representative of the company's ongoing operations. Examples of such items which have generally been excluded in determining adjusted after-tax earnings include: gain/loss from major asset sales; environmental remediation costs primarily related to inactive, closed or previously owned company facilities and third party sites; costs or settlements associated with major restructuring plans; litigation settlement costs primarily associated with former company operations or closed/inactive facilities; significant asset impairments due to changes in commodity prices; material damage to company facilities or operations due to fire, explosion, earthquakes, storms or other 'acts of god' not covered by insurance; certain costs associated with major acquisitions including litigation and significant trading derivatives; insurance recoveries associated with former company operations or for costs incurred in prior years. Other companies may define special items differently; hence, we cannot assure that adjusted after-tax earnings are comparable with similarly titled amounts reported by other companies.
EBITDAX (UNAUDITED) For the Three Months For the Nine Months Ended September 30, Ended September 30, - -------------------------------------------------------------------------------- Millions of dollars 2003 2002 2003 2002 - -------------------------------------------------------------------------------- Net Earnings $ 152 $ 99 $ 463 $ 235 Less: Earnings from discontinued operations - - 8 1 Cumulative effects of accounting changes - - (83) - Special items (38) (27) (72) (69) - -------------------------------------------------------------------------------- Adjusted after-tax earnings 190 126 610 303 Add-backs to adjusted after-tax earnings: Depreciation, depletion and amortization 231 245 746 724 Asset impairments 31 6 34 27 Dry hole costs 14 40 95 81 Exploration expenses (including amortization of undeveloped leasehold costs) 39 60 182 180 Current income taxes 64 27 302 179 Deferred income taxes 97 58 171 65 Interest expense (a) 45 40 119 134 - -------------------------------------------------------------------------------- EBITDAX $ 711 $ 602 $2,259 $1,693 ================================================================================ EBITDAX per share (diluted) $2.61 $2.46 $ 8.30 $ 6.90 (a) Net of capitalized interest of: 11 14 46 33
##### EX-99 4 exh99-2.txt ANALYST RECON - 3Q03 Exhibit 99.2 UNOCAL THIRD QUARTER 2003 SUMMARY For reconciliation refer to the Earnings Release and Table titled "Net Earnings and Adjusted After-Tax Earnings by Business Segment" Total Reported Third Quarter 2003 Net Earnings $ 152 $.58/ Share - -------------------------------------------------------------------------------- Special Items Gain on Sale of Tom Brown Stock (23) Impairment of Assets held for sale 32 Environmental & Litigation Provisions 23 Restructuring Charge 6 Third Quarter 2003 Adjusted Earnings $ 190 $.72/ Share - -------------------------------------------------------------------------------- First Call Consensus dated October 27, 2003 Per Share $.68/ Share - -------------------------------------------------------------------------------- $ Million ---------- Second Quarter 2003 Adjusted Earnings 191 $.73/ Share Variances Lower 48 United States 15 Higher Liquids Prices 6 Lower Expenses - Cash 11, Non Cash 4 Lower Prod. (1), All Other (5) Alaska - Higher Liq. Prices 2, (2) Timing of Liftings (3), Other (1) Canada - Gain on sale of Tar Sands +7 9 All Other +2 International E&P (9) Higher Prices; Liquids +9, Gas +6, Lower Production (7), Timing of Crude lifting (12) Higher Tax Rate (2), All Other (3) Oil & Gas Marketing (Trade) (1) Midstream (1) Geothermal - Improved Salak Results +10 12 Thai Power Results +3, Philippines results (1) Corporate & Other - (24) Higher Net Interest - (4) Minerals Results (7) Higher Environmental & Litigation Expense (13) Third Quarter 2003 Adjusted Earnings $ 190 $.72/ Share - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----