-----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, Hj6s4mMN6bqmf7PyFNCZyScoxPDemwuTg/RK1tgtBbNeHrmwcP6fITbMOBL/Cujz NW4rKO04/JDOpsfJA0IMzg== 0000716039-99-000025.txt : 19990701 0000716039-99-000025.hdr.sgml : 19990701 ACCESSION NUMBER: 0000716039-99-000025 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990630 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: 11-K SEC ACT: SEC FILE NUMBER: 001-08483 FILM NUMBER: 99656476 BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 11-K 1 1998 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, 1998 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, 1998 and 1997, 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 with Fund Information 3-4 Statements of Changes in Net Assets Available for Benefits with Fund Information 5-6 Notes to Financial Statements 7-11 Supplemental Schedules*: Item 27(a) - Schedule of Assets Held for Investment Purposes 13 Item 27(d) - Schedule of Reportable Transactions 14 Exhibit Index 15 * 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/ESOP 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, 1998 and 1997, and the changes in net assets available for benefits for the years ended December 31, 1998 and 1997 in conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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 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 Fund Information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. 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 18, 1999 2
Unocal Savings Plan Statement of Net Assets Available for Benefits with Fund Information December 31, 1998 Non Participant Participant Directed Directed ------------ --------------------------------------------------------- Unocal Low Common S&P 500 George Putnam Volatility Money Stock Index Fund Fund of Boston Fund Market Fund ------------ ------------ ------------ ------------ ------------ Assets Investments at fair value (Note 2) Unocal Common Stock ............... $159,766,160 $ -- $ -- $ -- $ -- Shares of registered investment companies: S&P 500 Index Fund ................ -- 100,025,611 -- -- -- George Putnam Fund of Boston ...... -- -- 52,411,607 -- -- Low Volatility Fund ............... -- -- -- 10,708,881 -- Money Market Fund ................. -- -- -- -- 25,469,955 New Opportunities Fund ............ -- -- -- -- -- Voyager Fund ...................... -- -- -- -- -- Participant notes receivable(loans) -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total investments............. 159,766,160 100,025,611 52,411,607 10,708,881 25,469,955 Cash ..................................... -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total Assets ................. 159,766,160 100,025,611 52,411,607 10,708,881 25,469,955 Liabilities Amounts due to Plan Sponsor.......... 516,250 -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total Liabilities ............ 516,250 -- -- -- -- Net assets available for benefits......... $159,249,910 $100,025,611 $ 52,411,607 $ 10,708,881 $ 25,469,955 ============ ============ ============ ============ ============
Participant Directed --------------------------------------------------------- New Unocal Opportunities Voyager Common Fund Fund Stock Other Total ------------ ------------ ------------ ------------ ------------ Assets Investments at fair value (Note 2) ....................................... Unocal Common Stock ................ $ -- $ -- $ 98,872,048 $ -- $258,638,208 Shares of registered investment companies: S&P 500 Index Fund ................. -- -- -- -- 100,025,611 George Putnam Fund of Boston ....... -- -- -- -- 52,411,607 Low Volatility Fund ................ -- -- -- -- 10,708,881 Money Market Fund .................. -- -- -- -- 25,469,955 New Opportunities Fund ............. 37,952,648 -- -- -- 37,952,648 Voyager Fund ....................... -- 23,697,333 -- -- 23,697,333 Participant notes receivable (loans) -- -- -- 13,186,560 13,186,560 ------------ ------------ ------------ ------------ ------------ Total investments ............. 37,952,648 23,697,333 98,872,048 13,186,560 522,090,803 Cash ...................................... -- -- 37,427 -- 37,427 ------------ ------------ ------------ ------------ ------------ Total Assets .................. 37,952,648 23,697,333 98,909,475 13,186,560 522,128,230 Liabilities Amounts due to Plan Sponsor .......... -- -- -- -- 516,250 ------------ ------------ ------------ ------------ ------------ Total Liabilities ............. -- -- -- -- 516,250 Net assets available for benefits ......... $ 37,952,648 $ 23,697,333 $ 98,909,475 $ 13,186,560 $521,611,980 ============ ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements. 3
Unocal Savings Plan Statement of Net Assets Available for Benefits with Fund Information December 31, 1997 Non Participant Participant Directed Directed ------------ --------------------------------------------------------- Unocal Low Common S&P 500 George Putnam Volatility Money Stock Index Fund Fund of Boston Fund Market Fund ------------ ------------ ------------ ------------ ------------ Assets Investments at fair value (Note 2) Unocal Common Stock ............... $236,345,347 $ -- $ -- $ -- $ -- Shares of registered investment companies: S&P 500 Index Fund ................ -- 69,606,728 -- -- -- George Putnam Fund of Boston ...... -- -- 47,367,931 -- -- Low Volatility Fund ............... -- -- -- 7,282,078 -- Money Market Fund ................. -- -- -- -- 21,152,142 New Opportunities Fund ............ -- -- -- -- -- Voyager Fund ...................... -- -- -- -- -- Participant notes receivable(loans) -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total investments............. 236,345,347 69,606,728 47,367,931 7,282,078 21,152,142 Cash ..................................... -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total Assets ................. 236,345,347 69,606,728 47,367,931 7,282,078 21,152,142 Liabilities Amounts due to Plan Sponsor.......... 429,250 -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total Liabilities ............ 429,250 -- -- -- -- Net assets available for benefits......... $235,916,097 $ 69,606,728 $ 47,367,931 $ 7,282,078 $ 21,152,142 ============ ============ ============ ============ ============
Participant Directed --------------------------------------------------------- New Unocal Opportunities Voyager Common Fund Fund Stock Other Total ------------ ------------ ------------ ------------ ------------ Assets Investments at fair value (Note 2) Unocal Common Stock ................ $ -- $ -- $142,161,246 $ -- $378,506,593 Shares of registered investment companies: S&P 500 Index Fund ................. -- -- -- -- 69,606,728 George Putnam Fund of Boston ....... -- -- -- -- 47,367,931 Low Volatility Fund ................ -- -- -- -- 7,282,078 Money Market Fund .................. -- -- -- -- 21,152,142 New Opportunities Fund ....... ..... 23,616,128 -- -- -- 23,616,128 Voyager Fund ....................... -- 14,934,256 -- -- 14,934,256 Participant notes receivable (loans) -- -- -- 14,009,883 14,009,883 ------------ ------------ ------------ ------------ ------------ Total investments ............. 23,616,128 14,934,256 142,161,246 14,009,883 576,475,739 Cash ...................................... -- -- 643,419 -- 643,419 ------------ ------------ ------------ ------------ ------------ Total Assets .................. 23,616,128 14,934,256 142,804,665 14,009,883 577,119,158 Liabilities Amounts due to Plan Sponsor .......... -- -- -- -- 429,250 ------------ ------------ ------------ ------------ ------------ Total Liabilities ............. -- -- -- -- 429,250 Net assets available for benefits ......... $ 23,616,128 $ 14,934,256 $142,804,665 $ 14,009,883 $576,689,908 ============ ============ ============ ============ ============ The accompanying notes are an integral part of these financial statements. 4
Unocal Savings Plan Statement of Changes in Net Assets Available for Benefits with Fund Information For the Year Ended December 31, 1998 Non- Participant Directed Participant Directed ---------- ---------------------------------------------------------------- Unocal Low Common S&P 500 George Putnam Volatility Money Stock Index Fund Fund of Boston Trust Fund Market Fund ---------- ---------------------------------------------------------------- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments.............. $(51,525,716) $ 20,644,488 $ 24,626 $ 521,742 $ -- Interest .................................... -- 227,713 141,438 21,816 35,080 Dividends ................................... 4,559,695 -- 4,887,237 -- 1,161,596 ------------ ------------ ------------ ------------ ------------ Total investment income/(loss)............. (46,966,021) 20,872,201 5,053,301 543,558 1,196,676 Contributions Participant ..................................... -- 7,633,768 4,794,267 962,326 3,106,877 Company ......................................... 15,285,419 -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total contributions .......................... 15,285,419 7,633,768 4,794,267 962,326 3,106,877 Total additions ........................... (31,680,602) 28,505,969 9,847,568 1,505,884 4,303,553 Deductions from net assets attributed to: Participant withdrawals & distributions ......... 18,849,142 9,446,369 7,144,729 1,391,798 9,305,528 Trustee fees and other expenses ................. -- 4,802 2,706 442 1,140 ------------ ------------ ------------ ------------ ------------ Total deductions ............................. 18,849,142 9,451,171 7,147,435 1,392,240 9,306,668 Net increase/(decrease) prior to interfund transfers (50,529,744) 19,054,798 2,700,133 113,644 (5,003,115) Interfund transfers ................................ (26,136,443) 11,364,085 2,343,543 3,313,159 9,320,928 ------------ ------------ ------------ ------------ ------------ Net increase/(decrease).................... (76,666,187) 30,418,883 5,043,676 3,426,803 4,317,813 Net assets available for benefits: Beginning of year ............................... 235,916,097 69,606,728 47,367,931 7,282,078 21,152,142 ------------ ------------ ------------ ------------ ------------ End of year ..................................... $159,249,910 $100,025,611 $ 52,411,607 $ 10,708,881 $25,469,955 ============ ============ ============ ============ ============
Participant Directed --------------------------------------------------------------- New Unocal Opportunities Voyager Common Other Total Fund Fund Stock --------------- ------------- ----------------- ------------- ------------- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments .......... $ 5,360,000 $ 2,480,170 $ (31,867,251) $ $(54,361,941) Interest ................................. 81,361 50,945 306,153 -- 864,776 Dividends ................................ 1,190,440 1,608,188 2,805,767 -- 16,212,923 ------------- ------------- ------------- ------------- ------------- Total investment income/(loss)......... 6,632,071 4,139,303 (28,755,331) -- (37,284,242) Contributions Participant .................................. 3,875,442 2,516,870 11,485,875 -- 34,375,425 Company ...................................... -- -- -- -- 15,285,419 ------------- ------------- ------------- ------------- ------------- Total contributions ....................... 3,875,442 2,516,870 11,485,875 -- 49,660,844 Total additions ........................ 10,507,513 6,656,173 (17,269,456) -- 12,376,602 Deductions from net assets attributed to: Participant withdrawals & distributions ...... 3,303,158 2,740,226 13,700,556 1,553,966 67,435,472 Trustee fees and other expenses .............. 1,984 1,520 6,464 -- 19,058 ------------- ------------- ------------- ------------- ------------- Total deductions .......................... 3,305,142 2,741,746 13,707,020 1,553,966 67,454,530 Net increase (decrease) prior to interfund transfers ....................... 7,202,371 3,914,427 (30,976,476) (1,553,966) (55,077,928) Interfund transfers ............................. 7,134,149 4,848,650 (12,918,714) 730,643 -- ------------- ------------- ------------- ------------- ------------- Net increase/(decrease) ................ 14,336,520 8,763,077 (43,895,190) (823,323) (55,077,928) Net assets available for benefits: Beginning of year ............................ 23,616,128 14,934,256 142,804,665 14,009,883 576,689,908 ------------- ------------- ------------- ------------- ------------- End of year .................................. $ 37,952,648 $ 23,697,333 $ 98,909,475 $13,186,560 $521,611,980 ============= ============= ============= ============= ============= The accompanying notes are an integral part of these financial statements. 5
Unocal Savings Plan Statement of Changes in Net Assets Available for Benefits with Fund Information For the Year Ended December 31, 1997 Non- Participant Directed Participant Directed ---------- ---------------------------------------------------------------- Unocal Low Common S&P 500 George Putnam Volatility Money Stock Index Fund Fund of Boston Trust Fund Market Fund ---------- ---------------------------------------------------------------- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments.............. $ (9,906,045) $ 14,857,874 $ 2,983,768 $ 367,418 $ -- Interest .................................... -- 223,420 156,562 21,843 30,722 Dividends ................................... 5,889,452 -- 4,243,774 -- 927,878 ------------ ------------ ------------ ------------ ------------ Total investment income/(loss)............. (4,016,593) 15,081,294 7,384,104 389,261 958,600 Contributions Participant ..................................... -- 8,764,900 6,446,088 1,125,325 2,423,537 Company ......................................... 17,714,653 -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total contributions .......................... 17,714,653 8,764,900 6,446,088 1,125,325 2,423,537 Total additions ........................... 13,698,060 23,846,194 13,830,192 1,514,586 3,382,137 Deductions from net assets attributed to: Participant withdrawals & distributions ......... 59,246,666 10,580,917 8,539,430 1,705,331 11,753,101 Trustee fees and other expenses ................. -- 5,835 3,209 502 736 ------------ ------------ ------------ ------------ ------------ Total deductions ............................. 59,246,666 10,586,752 8,542,639 1,705,833 11,753,837 Net increase/(decrease) prior to interfund transfers (45,548,606) 13,259,442 5,287,553 (191,247) (8,371,700) Interfund transfers ................................ (47,898,573) 16,687,297 13,139,999 3,232,389 17,516,464 ------------ ------------ ------------ ------------ ------------ Net increase/(decrease).................... (93,447,179) 29,946,739 18,427,552 3,041,142 9,144,764 Net assets available for benefits: Beginning of year ............................... 329,363,276 39,659,989 28,940,379 4,240,936 12,007,378 ------------ ------------ ------------ ------------ ------------ End of year ..................................... $235,916,097 $ 69,606,728 $ 47,367,931 $ 7,282,078 $21,152,142 ============ ============ ============ ============ ============
Participant Directed --------------------------------------------------------------- New Unocal Opportunities Voyager Common Other Total Fund Fund Stock --------------- ------------- -------------- -------------- ------------- Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments .......... $ 3,238,592 $ 1,465,635 $ ( 4,541,225) $ $ 8,466,017 Interest ................................. 81,505 46,613 380,673 -- 941,338 Dividends ................................ 514,928 884,227 2,740,252 -- 15,200,511 ------------- ------------- ------------- ------------- ------------- Total investment income/(loss)......... 3,835,025 2,396,475 ( 1,420,300) -- 24,607,866 Contributions Participant .................................. 3,355,612 2,180,352 35,157,981 -- 59,453,795 Company ...................................... -- -- -- -- 17,714,653 ------------- ------------- ------------- ------------- ------------- Total contributions ....................... 3,355,612 2,180,352 35,157,981 -- 77,168,448 Total additions ........................ 7,190,637 4,576,827 33,737,681 -- 101,776,314 Deductions from net assets attributed to: Participant withdrawals & distributions ...... 2,913,046 1,667,146 30,854,321 3,656,143 130,916,101 Trustee fees and other expenses .............. 2,022 1,459 11,559 -- 25,322 ------------- ------------- ------------- ------------- ------------- Total deductions .......................... 2,915,068 1,668,605 30,865,880 3,656,143 130,941,423 Net increase (decrease) prior to interfund transfers ....................... 4,275,569 2,908,222 2,871,801 (3,656,143) (29,165,109) Interfund transfers ............................. 5,572,371 4,817,883 (14,097,680) 1,029,850 -- ------------- ------------- ------------- ------------- ------------- Net increase/(decrease) ................ 9,847,940 7,726,105 (11,225,879) (2,626,293) (29,165,109) Net assets available for benefits: Beginning of year ............................ 13,768,188 7,208,151 154,030,544 16,636,176 605,855,017 ------------- ------------- ------------- ------------- ------------- End of year .................................. $ 23,616,128 $ 14,934,256 $ 142,804,665 $ 14,009,883 $ 576,689,908 ============= ============= ============= ============= ============= The accompanying notes are an integral part of these financial statements. 5
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") contributions and for participants' voluntary 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 1998 and 1997, 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 only Unocal common stock, however, participants may thereafter transfer these balances into any of the Plan investment options. All shares remain with the Trustee until delivered to participants upon request for withdrawal or after 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 booklet is a Summary Plan Description of the Unocal Savings Plan as of January 1, 1998 and supercedes the Plan booklet dated July 1, 1990 and all subsequent amendments. Other information about the Plan can be found in the Summary Plan Description booklet. Participation - ------------- Employees become participants in the Plan after the completion of one year of continuous service in which the employee has worked at least 1,000 hours. 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. 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. Prior to this date, a participant was vested in company contributions and dividends thereon after five years of vesting service. 7 UNOCAL SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) In 1997, special vesting provisions of the Plan pertaining to the sale of 76 Products Company were enacted to waive the five year vesting period for certain plan members whose employment terminated due to the sale. The affected plan members included those employees whose employment terminated due to a work force reduction or job elimination beginning on the sale announcement date of November 18, 1996 through December 31, 1997. Subsequently, the special vesting provisions were amended to include 76 Products Company "transition team" members who remained employed by Unocal after December 31, 1997, but whose "transition team" assignment ended on or before March 31, 1998 and whose employment with Unocal ended on or before July 31, 1998. Payment of Benefits - ------------------- On termination of employment or at such time as participants become eligible to receive benefits, 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. If a participant continues to work past age 70-1/2, federal regulations require distribution of a portion of the participant's account balance by April 1 of the calendar year following the participant's attainment of age 70-1/2. Rollovers into the Plan - ----------------------- Effective March 3, 1997, the Plan accepted rollovers of qualified amounts from the Unocal Retirement Plan and the Unocal Employee Stock Ownership Plan that are distributed following termination of employment. Effective July 1, 1998, the Plan accepted rollovers of qualified amounts from the Puregro Company 401(k) Retirement Savings Plan. The Purego Company is a former subsidiary of Union Oil Company of California, which is a subsidiary of Unocal. Additionally, 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. Investment Program - ------------------ All contributions are held in trust and invested by the Trustee in accordance with the option or options elected by the participant. A participant's account may be invested in any one or more or all of the following funds administrated by the Trustee: Unocal Corporation Common Stock - Monies are used to purchase shares of Unocal Corporation common stock. Company contributions are invested only in Unocal Corporation common stock. Putnam S&P 500 - This fund invests in a large variety of publicly traded common stock. The fund is designed to mirror the performance and composition of the Standard & Poor's 500 index. 8 UNOCAL SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) The George Putnam Fund of Boston - The monies in this fund are invested in a diversified group of stocks and bonds. Putnam Low Volatility Trust Fund - Monies are invested mainly in U.S. government debt securities. Putnam Money Market Fund - Investments are made in a diversified portfolio of high-quality money market instruments with an average maturity of less than 90 days. Putnam New Opportunities Fund - Investments are primarily in common stocks of companies within certain emerging industry groups that offer above average potential for growth and a risk for greater price fluctuations. Putnam Voyager Fund - Investments are in a combination of stocks of smaller companies expected to grow over time, as well as stocks of larger, more established companies. Federal Income Tax Status - ------------------------- The company obtained its latest determination letter on November 3, 1995, from the Los Angeles District Director of 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 Internal Revenue 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 exceeds $160,000, only the first $160,000 of base pay will be 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 and $9,500 in 1998 and 1997, respectively. 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. 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. 9 UNOCAL SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) 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 generally accepted accounting principles. 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 buy and sell trade 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. Valuation of Investments - ------------------------ The Plan's investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices from national exchanges which represent 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, 1998 and 1997, respectively. Investments in common trust funds are valued based on information provided by the Plan's investment custodions. 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 generally accepted accounting principles 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. 10 UNOCAL SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (continued) NOTE 3 - Forfeitures by Members Company basic and matching contributions and dividends thereon under the Plan are forfeited by employees whose employment is terminated before completing two years of service and whose termination is for any reason other than their total disability, death or retirement. 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 Plan member accounts. At December 31, 1998 and 1997, forfeited nonvested accounts totaled $516,520 and $429,250, respectively. NOTE 4 - Parties-in-interest Certain of the Plan's investments are shares of mutual funds managed by Putnam Fidicuary Trust Company, Trustee of the Plan, 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, 1998 and 1997, 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 $162,326 and $195,761 for the years ended December 31, 1998 and 1997, respectively. 11 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 29, 1999 By: /s/ Joe D. Cecil --------------------- Joe D. Cecil Vice President and Comptroller 12
UNOCAL SAVINGS PLAN ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES For the Year Ended DECEMBER 31, 1998 (c) Description of Investment Including Maturity Date, (b) Identity of Issue, Borrower, Rate of Interest, Collateral, (e)Current (a) Lessor or Similar Party Par or Maturity Value (d) Cost Value - ------------------------------------------------------------------------------------------------------------------------------------ ** Unocal Corporation Unocal Corporation Common Stock $238,058,671 $258,638,208 ( 8,861,267 shares) * Putnam Investments S & P 500 Index Fund 66,506,052 100,025,611 ( 3,457,505 shares) * Putnam Investments George Putnam Fund of Boston 50,046,073 52,411,607 ( 2,905,300 shares) * Putnam Investments Putnam Low Volatility Trust Fund 9,932,020 10,708,881 ( 833,376 shares) * Putnam Investments Putnam Money Market Fund 25,469,955 25,469,955 (25,469,956 shares) * Putnam Investments Putnam New Opportunities Fund 30,912,464 37,952,648 ( 649,540 shares) * Putnam Investments Putnam Voyager Fund 20,685,820 23,697,333 ( 1,081,083 shares) * Putnam Investments Participant Loans -- 13,186,560 ------------ ------------ $441,611,055 $522,090,803 ============ ============ * Trustee for the Plan and, therefore a party-in-interest for which a statutory exemption exists. ** Sponser and employer, and therefore, a party-in-interest for which a statutory exemption exists.
13
UNOCAL SAVINGS PLAN ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS (1) FOR THE YEAR ENDED DECEMBER 31, 1998 (b)Description (f)Expense (h)Current of Assets Incurred Value of (i)Net (Including Interest (c)Purchase (d)Selling (e)Lease With (g) Cost Asset on Gain (a)Identity of Rate and Maturity Price Price Rental Transaction of Asset Transaction Or Party Involved in Case of a loan) Date (loss) - ------------------------------------------------------------------------------------------------------------------------------------ Unocal Corporation Unocal Corporation 48,679,893 48,679,893 48,679,893 (2) Common Stock ( 369 Transactions) Unocal Corporation Unocal Corporation 90,740,555 68,106,169 90,740,555 22,634,386 (2) Common Stock (1,280 Transactions) Putnam Investments George Putnam Fund 19,802,931 19,802,931 19,802,931 (3) ( 308 Transactions) Putnam Investments George Putnam Fund 14,783,881 13,759,782 14,783,881 1,024,099 (3) ( 551 Transactions) Putnam Investments Putnam Voyager Fund 13,257,330 13,257,330 13,257,330 (3) ( 319 transactions) Putnam Investments Putnam Voyager Fund 6,974,423 6,547,452 6,974,423 426,971 (3) ( 443 transactions) Putnam Investments Putnam New 19,206,127 19,206,127 19,206,127 (3) Opportunity Fund ( 342 transactions) Putnam Investments Putnam New 10,229,607 9,429,209 10,229,607 800,398 (3) Opportunity Fund ( 482 transactions) Putnam Investments Putnam S&P 500 Fund 33,430,585 33,430,585 33,430,585 (3) ( 364 transactions) Putnam Investments Putnam S&P 500 Fund 23,656,586 18,707,897 23,656,586 4,948,689 (3) ( 588 transactions) Putnam Investments Putnam Low 7,891,452 7,891,452 7,891,452 (3) Volatility Fund ( 265 transactions) Putnam Investments Putnam Low 4,986,390 4,803,270 4,986,390 183,120 (3) Volatility Fund ( 349 transactions) Putnam Investments Putnam Money 30,118,256 30,118,256 30,118,256 (3) Market Fund ( 542 transactions) Putnam Investments Putnam Money 27,379,819 27,379,817 27,379,819 2 (3) Market Fund ( 523 transactions) (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. (3) Trustree for the Plan and, therefore a party-in-interest for which a statutory exemption exists.
14 UNOCAL CORPORATION EXHIBIT INDEX Exhibit 23 Consent of PricewaterhouseCoopers LLP 15 EX-23 2 CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement of Unocal Corporation on Form S-8 (No. 33-65461) of our report, dated June 18, 1999, on our audits of the financial statements and supplemental schedules of the Unocal Savings Plan as of December 31, 1998 and 1997 and for the years then ended which report is included in this annual report on Form 11-K. PricewaterhouseCoopers LLP Los Angeles, California June 29, 1999 -----END PRIVACY-ENHANCED MESSAGE-----