-----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, HGiCjPzVCgyt2d755f407zJtDPpbo+6E4ux7PprIhFUsNs2Utyr4L86oNSWMlmJ3 XyN37/DSvM+c/rrOB/W0/w== 0000716039-98-000014.txt : 19980430 0000716039-98-000014.hdr.sgml : 19980430 ACCESSION NUMBER: 0000716039-98-000014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980428 ITEM INFORMATION: FILED AS OF DATE: 19980429 SROS: CSX SROS: NYSE 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: SEC FILE NUMBER: 001-08483 FILM NUMBER: 98603344 BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 8-K 1 UNOCAL'S 1ST QUARTER 1998 EARNINGS NEWS RELEASE 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, 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) Item 5. Other Events. On April 28, 1998 the following new release was issued: Unocal reports 1Q 1998 earnings; higher oil and gas production levels forecast --------------------------------------------- El Segundo, Calif., April 28, 1998 - Unocal Corporation today reported first quarter 1998 earnings from continuing operations, excluding special items (detailed in attached tables), of $72 million, or 30 cents per share (basic and diluted). This compares with first quarter 1997 earnings from continuing operations, excluding special items, of $190 million, or 76 cents per basic share (74 cents diluted). "In this quarter, the company's worldwide oil and gas operations were impacted significantly by lower crude oil and natural gas prices, lower U.S. natural gas production, and higher dry hole costs and exploration expenses," said Roger C. Beach, Unocal chairman and chief executive officer. "At the end of the quarter we saw natural gas prices start to rise again," Beach said. "In addition, net production of our Spirit Energy 76 unit averaged 182,000 barrels-of-oil-equivalent (BOE) per day in March. This compares with an average of 173,000 BOE per day in January and February when we had production curtailments arising from pipeline and mechanical well problems." For the full-year 1998, Spirit Energy 76 net production should average about 178,000 BOE per day. "We are well on our way toward meeting our goal of replacing production with new reserves in the U.S. Lower 48," Beach said. He noted that Spirit Energy's capital expenditures totaled $120 million in the first quarter, up from only $30 million last year. "The higher capital expenditures reflect our increased exploration program in the Gulf Coast region that has already begun to yield success," he said. In the second quarter 1998 and beyond Unocal expects to begin new international production. The AIOC consortium has started crude oil sales from the Caspian Sea (Unocal, 10% working interest), and Unocal expects to begin new gas production from Myanmar and Bangladesh beginning in the third quarter. In Thailand, the company's gross natural gas production is currently running at a record level of more than 1.1 billion cubic feet per day (Unocal, 65% average net working interest) as the government there moves ahead with its plan to increase use of indigenous natural gas while reducing imports of fuel oil for electrical generation. Beach noted that Unocal had higher earnings from geothermal operations, which reflected the new power plants that came on line in Indonesia in 1997. In addition, the company had lower corporate and unallocated expenses. Unocal's reported net earnings for the first quarter, including special items (see attached tables) and discontinued operations, were $18 million, down from $144 million a year ago. Reported basic earnings per share were 7 cents, compared with 57 cents in the first quarter 1997. Reported diluted earnings per share were also 7 cents, compared with 56 cents last year. Net cash provided from operating activities, excluding working capital changes, was $282 million, off from $415 million in 1997. The lower cash flow was primarily the result of lower commodity prices and reduced domestic production levels. Unocal is a leading global oil and gas exploration and production company with significant pipeline and power plant project developments worldwide. Forward-looking statements, including estimates of future exploration and production activities other business plans and forecasts in this news release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other considerations. Actual results could differ materially. Unocal will hold a conference call on first quarter earnings at 1 p.m. PDT today. To hear a broadcast of the conference call, or read a transcript of the prepared remarks, visit Unocal's web site, www.unocal.com. Replays of the audio broadcast will be available on the web site through May 3. 2
NEWS RELEASE UNOCAL CORPORATION CONDENSED CONSOLIDATED EARNINGS STATEMENT (UNAUDITED) For the Three Months Ended March 31 --------------------- Millions of dollars except per share amounts 1998 1997 - -------------------------------------------------------------------------------- Total revenues ........................................... $ 1,207 $ 1,456 Costs and other deductions ............................... 1,110 1,119 ------------------- Earnings from continuing operations before income taxes .. 97 337 Income taxes ............................................. 79 149 ------------------- Earnings from continuing operations ...................... 18 188 Earnings/(loss) from discontinued operations (net of tax) -- (44) ------------------- Net earnings ............................................. $ 18 $ 144 Basic earnings/(loss) per common share (a) Continuing operations ............................. $ 0.07 $ 0.75 Discontinued operations ........................... -- (0.18) ------------------- Basic net earnings per share ............................. $ 0.07 $ 0.57 Diluted earnings/(loss) per common share (b) (c) Continuing operations ............................. $ 0.07 $ 0.73 Discontinued operations ........................... -- (0.17) ------------------- Diluted net earnings per share ........................... $ 0.07 $ 0.56 (a) Weighted average shares - basic (millions) 241 251 (b) Weighted average shares - diluted (millions) 243 265 (c) Distribution on preferred securities (net of taxes) -- $ 6 excluded in numerator. In 1988, the effect of assumed conversion of preferred securities on earnings per share is antidilutive - -------------------------------------------------------------------------------- CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) Dec. 31 Dec. 31 Millions of dollars 1998 1997 - -------------------------------------------------------------------------------- Assets Cash and cash equivalents ................................ $ 275 $ 338 Other current assets ..................................... 1,098 1,163 Investments and long-term receivables .................... 1,128 1,113 Properties - net ......................................... 4,882 4,816 Other assets ............................................. 195 100 ------------------- Total assets .................................... $ 7,578 $ 7,530 Liabilities and Equity Current liabilities ...................................... $ 982 $ 1,160 Long-term debt ........................................... 2,427 2,169 Deferred income taxes .................................... 132 137 Other deferred credits and liabilities ................... 1,269 1,228 Convertible preferred securities ......................... 522 522 Stockholders' equity ..................................... 2,246 2,314 ------------------- Total liabilities and equity .................... $ 7,578 $ 7,530
Table 1
NEWS RELEASE UNOCAL CORPORATION CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED) For the Three Months Ended March 31 (a) --------------------- Millions of dollars 1998 1997 - --------------------------------------------------------------------------------------------------- Cash flows from operating activities Net earnings ............................................... $ 18 $ 144 Adjustments to reconcile net earnings to net cash provided by operating activities Loss on disposal of discontinued operations (before-tax) -- 71 Depreciation, depletion and amortization ............. 181 211 Dry hole costs ....................................... 50 16 Deferred income taxes ................................ 13 10 Gain on sales of assets (before-tax) ................. -- (10) Other ................................................ 20 (27) Working capital and other changes related to operations .... (188) (81) --------------------- Net cash provided by operating activities ............ 94 334 Cash flows from investing activities Capital expenditures (includes dry hole costs) ............ (326) (286) Proceeds from sale of discontinued operations .............. -- 1,390 Proceeds from asset sales .................................. 4 16 --------------------- Net cash (used in)/provided by investing activities .. (322) 1,120 Cash flows from financing activities Net increase in long-term debt ............................. 262 175 Dividends paid ............................................. (48) (50) Repurchase of common stock ................................. (48) (46) Other ...................................................... (1) (1) --------------------- Net cash provided by financing activities ............ 165 78 Increase/(decrease) in cash and cash equivalents .......................... (63) 1,532 Cash and cash equivalents at beginning of period .......................... 338 217 --------------------- Cash and cash equivalents at end of period ................................ $ 275 $ 1,749 (a) Cash flows related to discontinued operations have not been segregated - --------------------------------------------------------------------------------------------------- CONDENSED CAPITAL EXPENDITURES (UNAUDITED) Millions of dollars - --------------------------------------------------------------------------------------------------- United States Exploration & Production .................................... $ 136 $ 33 International Exploration & Production .................................... 168 163 Geothermal Operations ..................................................... 6 20 Diversified Business Group ................................................ 10 9 New Ventures (Non-E & P) ................................................. -- 5 Corporate & Unallocated ................................................... 6 7 Discontinued Operations ................................................... -- 49 --------------------- Total (b) .................................................. $ 326 $ 286 (b) Includes capitalized interest of: .................................... $ 8 $ 5
Table 2
NEWS RELEASE UNOCAL CORPORATION DISCRETIONARY CASH FLOW (UNAUDITED) For the Three Months Ended March 31 (a) -------------------- Millions of dollars 1998 1997 - ------------------------------------------------------------------------------ Net earnings ........................................... $ 18 $ 144 Adjustments to net earnings Depletion, depreciation & amortization .... 181 211 Dry hole costs ............................ 50 16 Deferred income taxes ..................... 13 10 (Gain) on sales of assets ................. -- (10) Exploration expenses ...................... 47 28 Proceeds from asset sales ................. 4 1,406 Environmental and litigation provision .... 52 18 Environmental and litigation payments ..... (20) (18) Loss on disposal of discontinued operations -- 71 Other ..................................... (12) (27) -------------------- Total discretionary cash flow ....... $ 333 $ 1,849 (a) Cash flows related to discontinued operations have not been segregated 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.
Table 2a
NEWS RELEASE UNOCAL CORPORATION RESULTS OF OPERATIONS FOR EXPLORATION AND PRODUCTION ACTIVITIES (UNAUDITED) For the Three Months Ended March 31, 1998 -------------------------------------------------- Spirit Other Other Millions of dollars Energy 76 U.S. Far East International Total - -------------------------------------------------------------------------------------------------------------------------------- Sales (includes intercompany sales) Crude oil and condensate .......................................... $ 55 $ 28 $ 93 $ 30 $ 206 Natural gas ....................................................... 143 18 141 9 311 Natural gas liquids ............................................... 11 1 3 1 16 Other ............................................................. 1 -- -- -- 1 -------------------------------------------------- Total ....................................................... 210 47 237 40 534 Other revenue ............................................................. 3 2 (8) 5 2 -------------------------------------------------- Total revenues .............................................. 213 49 229 45 536 Production costs .......................................................... 44 19 26 21 110 Exploration expenses ...................................................... 14 -- 20 11 45 Dry hole costs ............................................................ 39 -- 3 5 47 Depreciation, depletion & amortization .................................... 84 8 54 18 164 Other operating expenses .................................................. 16 3 13 9 41 -------------------------------------------------- Results of operations before income tax ........................... $ 16 $ 19 $ 113 $ (19) $ 129 - -------------------------------------------------------------------------------------------------------------------------------- For the Three Months Ended March 31, 1997 -------------------------------------------------- Spirit Other Other Energy 76 U.S. Far East International Total -------------------------------------------------- Sales (includes intercompany sales) Crude oil and condensate .......................................... $ 91 $ 56 $ 117 $ 45 $ 309 Natural gas ....................................................... 224 18 165 14 421 Natural gas liquids ............................................... 16 1 9 1 27 -------------------------------------------------- Total ....................................................... 331 75 291 60 757 Other revenue ............................................................. 3 -- 1 10 14 Gain on asset sales ....................................................... 3 -- -- 1 4 -------------------------------------------------- Total revenues .............................................. 337 75 292 71 775 Production costs .......................................................... 48 24 30 19 121 Exploration expenses ...................................................... 10 -- 8 9 27 Dry hole costs ............................................................ 6 -- 9 1 16 Depreciation, depletion & amortization .................................... 102 15 61 17 195 Other operating expenses .................................................. 19 2 11 8 40 -------------------------------------------------- Results of operations before income tax ........................... $ 152 $ 34 $ 173 $ 17 $ 376
Table 3
NEWS RELEASE UNOCAL CORPORATION OPERATING HIGHLIGHTS (UNAUDITED) For the Three Months Ended March 31 --------------------- 1998 1997 --------------------- Net daily production Crude oil and condensate (thousand barrels daily): United States Spirit Energy 76 ..................... 44 48 Alaska ............................... 30 34 --------------------- Total United States ............ 74 82 International Far East (a) ........................ 89 93 Other ................................ 31 27 --------------------- Total International ............ 120 120 - -------------------------------------------------------------------------------- Total Worldwide ................ 194 202 Natural gas (million cubic feet daily): United States Spirit Energy 76 ..................... 788 910 Alaska ............................... 138 156 --------------------- Total United States ............ 926 1,066 International Far East (a) ........................ 826 805 Other ................................ 52 67 --------------------- Total International ............ 878 872 - -------------------------------------------------------------------------------- Total Worldwide ................ 1,804 1,938 Natural gas liquids (thousand barrels daily) ........ 18 20 Geothermal (million kilowatt-hours daily) ........... 21 16 Average sales prices (b) Crude oil and condensate (per barrel): United States Spirit Energy 76 ..................... $13.94 $20.79 Alaska ............................... 10.84 18.51 Total United States ............ 12.66 19.85 International Far East ............................. $13.97 $21.03 Other ................................ 12.30 20.07 Total International ............ 13.50 20.75 Total Worldwide ................ $13.15 $20.32 Natural gas (per mcf): United States Spirit Energy 76 ..................... $2.14 $2.78 Alaska ............................... 1.47 1.35 Total United States ............ 2.03 2.57 International Far East ............................. $2.03 $2.40 Other ................................ 2.09 2.22 Total International ............ 2.04 2.38 Total Worldwide ................ $2.04 $2.49 - -------------------------------------------------------------------------------- (a) Includes host country share in Indonesia of: Crude oil and condensate .......................... 18 30 Natural gas ....................................... 33 33 (b) Excludes Global Trade margins Table 4
NEWS RELEASE UNOCAL CORPORATION OPERATING HIGHLIGHTS (continued) (UNAUDITED) For the Three Months Ended March 31 -------------------- 1998 1997 - ------------------------------------------------------------------------------ Agricultural products production volumes (thousand tons) Ammonia ................................................ 374 391 Urea ................................................... 260 275 Other products ......................................... 175 207 Agricultural products sales volumes (thousand tons) Ammonia ................................................ 220 156 Urea ................................................... 325 210 Other products ......................................... 174 252
Table 5
NEWS RELEASE UNOCAL CORPORATION EARNINGS BY BUSINESS SEGMENT (UNAUDITED) 1st Quarter of 1998 1st Quarter of 1997 ----------------------------------------------------------- Millions of dollars Before-tax After-tax Before-tax After-tax - ------------------------------------------------------------------------------------------------------------------------------------ Exploration and Production United States Spirit Energy 76 ........................................ $ 16 $ 10 $ 152 $ 95 Alaska .................................................. 19 12 34 21 International .............................................. 94 13 190 102 Global Trade ................................................... 9 6 11 6 Geothermal and Power Operations ................................ 22 14 10 6 Diversified Business Group Agricultural Products .................................... 13 9 30 20 Carbon and Minerals ...................................... 18 15 12 10 Pipelines ................................................ 18 15 17 14 Other .................................................... -- -- 2 1 Corporate and Unallocated Administrative and general expense ....................... (16) (11) (20) (13) Net interest expense ..................................... (33) (26) (54) (42) Environmental and litigation expense ..................... (52) (33) (18) (11) New Ventures ............................................. (11) (7) (11) (7) Other .................................................... -- 1 (18) (14) ----------------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations ............................ 97 18 337 188 Loss from discontinued Operations .............................. -- -- (71) (44) - ------------------------------------------------------------------------------------------------------------------------------------ Total .............................................. $ 97 $ 18 $ 266 $ 144 ==================================================================================================================================== EXPLORATION AND PRODUCTION - involves the exploration for, and the production of crude oil and natural gas. GLOBAL TRADE - handles the company's worldwide crude oil, condensate and natural gas trading and marketing activities. Global Trade also purchases crude oil, condensate and natural gas from the company's joint venture partners, royalty owners and other unaffiliated oil and gas producers for resale. GEOTHERMAL AND POWER OPERATIONS - involves the exploration for, and the production and sale of, geothermal resources, and the construction and operation of electrical power plants. DIVERSIFIED BUSINESS GROUP: AGRICULTURAL PRODUCTS - involves the manufacture, transportation and marketing of nitrogen-based products for agricultural and industrial use. CARBON AND MINERALS - involves the production and marketing of petroleum coke, graphites and specialty minerals. PIPELINES -principally includes the company's equity interests in affiliated pipeline companies. OTHER- principally included the company's equity interest in The UNO-VEN Company, prior to its restructuring in May 1997.
Table 6
NEWS RELEASE UNOCAL CORPORATION SPECIAL ADJUSTMENTS (UNAUDITED) 1st Quarter of 1998 1st Quarter of 1997 ----------------------------------------------------------- Millions of dollars Before-tax After-tax Before-tax After-tax - ------------------------------------------------------------------------------------------------------------------------------------ Reported earnings .............................................. $ 97 $ 18 $ 266 $ 144 Less: Special items Exploration and Production United States Spirit Energy Asset sales ...................................... -- -- 3 2 International Asset sales ...................................... -- -- 1 1 Deferred tax adjustment .......................... -- (21) -- -- Diversified Business Group Carbon and Minerals Environmental and litigation ..................... (1) (1) -- -- Corporate and Unallocated Asset sales ...................................... -- -- 6 4 Environmental and litigation ..................... (51) (32) (14) (9) Discontinued Operations Net loss on disposal ............................. -- -- (71) (44) - ------------------------------------------------------------------------------------------------------------------------------------ Total special items ....................................... (52) (54) (75) (46) - ------------------------------------------------------------------------------------------------------------------------------------ Adjusted earnings from continuing operations ................... $ 149 $ 72 $ 341 $ 190 ====================================================================================================================================
Table 7
NEWS RELEASE UNOCAL CORPORATION EARNINGS BY BUSINESS SEGMENT EXCLUDING SPECIAL ADJUSTMENTS (UNAUDITED) 1st Quarter of 1998 1st Quarter of 1997 ----------------------------------------------------------- Millions of dollars except share amounts Before-tax After-tax Before-tax After-tax - ------------------------------------------------------------------------------------------------------------------------------------ Exploration and Production United States Spirit Energy 76 ........................................ $ 16 $ 10 $ 149 $ 93 Alaska .................................................. 19 12 34 21 International .............................................. 94 34 189 101 Global Trade ................................................... 9 6 11 6 Geothermal and Power Operations ................................ 22 14 10 6 Diversified Business Group Agricultural Products .................................... 13 9 30 20 Carbon and Minerals ...................................... 19 16 12 10 Pipelines ................................................ 18 15 17 14 Other .................................................... -- -- 2 1 Corporate and Unallocated Administrative and general expense ....................... (16) (11) (20) (13) Net interest expense ..................................... (33) (26) (54) (42) Environmental and litigation expense ..................... (1) (1) (4) (2) New Ventures ............................................. (11) (7) (11) (7) Other .................................................... -- 1 (24) (18) - ------------------------------------------------------------------------------------------------------------------------------------ Earnings from continuing operations ............................ 149 72 341 190 ==================================================================================================================================== Basic adjusted earnings from continuing operations per share of common stock $0.30 $0.76 Diluted adjusted earnings from continuing operations per share of common stock (a) $0.30 $0.74 Distributions on preferred securities (net of tax) excluded in numerator for diluted earnings per share (a) $ - $ 6 Basic weighted average shares 241 251 Diluted weighted average shares 243 265 (a) In 1998, the effect of assumed conversion of preferred securities on earnings per share is antidilutive.
Table 8 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, 1998 By: /s/ JOE D. CECIL - --------------------- -------------------------- Joe D. Cecil Vice President and Comptroller -----END PRIVACY-ENHANCED MESSAGE-----