-----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, VKwQmsfvP9wC1b//ggFWpL9Wx/XSkW2zMxDai7OWUEV6aLSdz1JDU7LIJbXa/Sfu vj0ovPxMvomhKWRO64fqPg== 0000716039-99-000030.txt : 19990802 0000716039-99-000030.hdr.sgml : 19990802 ACCESSION NUMBER: 0000716039-99-000030 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990727 ITEM INFORMATION: FILED AS OF DATE: 19990730 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: 99673851 BUSINESS ADDRESS: STREET 1: 2141 ROSECRANS AVE STREET 2: STE 4000 CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107267600 8-K 1 2ND QUARTER EARNINGS 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) July 27, 1999 ------------------------ 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. Unocal Corporation reported preliminary net earnings of $9 million, or 4 cents per share diluted, for the second quarter 1999. This compared to $105 million, or 43 cents per share diluted, for the second quarter 1998. The lower second quarter 1999 results were primarily due to lower worldwide crude oil volumes, lower agricultural products prices and higher corporate expense, including interest. This was partially offset by higher worldwide crude oil prices. In the second quarter of 1999, special items included an $11 million after-tax restructuring charge. The restructuring charge reflected the cost of terminating about 250 employees. In the second quarter 1998, special items included a $53 million after-tax gain on the sale of assets partially offset by environmental and litigation provisions. The adjusted after-tax earnings for the second quarter of 1999, excluding special items, were $19 million, or 8 cents per share diluted. This compared with $62 million, or 26 cents per share diluted, for the second quarter of 1998. For the first six months of 1999, the company reported preliminary net earnings of $16 million, or 7 cents per share diluted. This compared with net earnings of $123 million, or 50 cents per share diluted, for the first six months of 1998. The lower six months 1999 results were primarily due to lower worldwide crude oil and natural gas volumes and prices, lower agricultural products prices and higher corporate net interest expense. This was partially offset by lower domestic dry holes. In the first six months of 1999, special items included the $11 million after-tax restructuring charge and a $10 million after-tax loss related to the sale of assets. In the first six months of 1998, special items included the $53 million after-tax gain on the sale of assets which was offset by environmental and litigation provisions. The adjusted after-tax earnings for the first six months of 1999, excluding special items, were $39 million, or 16 cents per share diluted. This compared with $134 million, or 55 cents per share diluted, for the first six months of 1998. The company, at times, employs a commodity price option program that establishes a price floor, while retaining most of the benefits of higher price movements. This program is designed to protect cash flow and the capital spending program against the effects of severe commodity price deterioration. In the first quarter of 1999, the program increased the company's price realizations by more than $11 million after-tax, or 5 cents per share, while commodity prices declined. Prices recovered significantly and quickly in the second quarter. The price protection program resulted in lower realizations for crude oil and natural gas totaling about $5 million after-tax, or 2 cents per share, in the second quarter of 1999. For the full-year 1999, based on six-month actual and the NYMEX futures prices as of July 21st, the company anticipates this program will lower earnings by approximately $22 million after-tax. Most of the company's existing price protection positions close out in the fourth quarter, with no significant positions in 2000. The program results exclude activities by Northrock Resources Ltd. (Northrock). Total revenues for the second quarter of 1999 were $1.6 billion, compared with $1.4 billion for the second quarter of 1998. Total revenues for the first six months of 1999 were $2.8 billion, compared with $2.6 billion for the first six months of 1998. Capital expenditures for the second quarter of 1999 were $243 million, compared with $440 million for the second quarter of 1998. Capital expenditures for the first six months of 1999 were $468 million, compared with $766 million for the first six months of 1998. The 1999 capital expenditures excluded the acquisition of Northrock in the second quarter. The company expects that capital expenditures for the full-year will total $1.1 billion, compared with $1.7 billion for the full year 1998. If commodity prices rise as indicated by the futures market, the company will consider funding previously deferred near-term gas production projects, which could boost capital spending above the current expectation of $1.1 billion. Total debt at the end of the second quarter of 1999 was $2.80 billion, compared with $2.56 billion at the end of 1998. Most of this increase reflected the consolidation of the company's investment in Northrock. Forward-looking statements and estimates regarding exploration and production activities, oil and gas prices and their related earnings effects, and capital expenditures in this filing are based on assumptions concerning market, competitive, regulatory, environmental, operational and other conditions and considerations. Actual results could differ materially as a result of factors discussed in Unocal 's 1998 Annual Report on Form 10-K. 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: July 29, 1999 By: /s/ JOE D. CECIL - -------------------- ------------------------------- Joe D. Cecil Vice President and Comptroller
CONSOLIDATED EARNINGS UNOCAL CORPORATION (Unaudited) For the Three Months For the Six Months Ended June 30 Ended June 30 ---------------------------------------------- Millions of dollars except per share amounts 1999 1998 1999 1998 - ----------------------------------------------------------------------------------------------------------------------- Revenues Sales and operating revenues ......................................... $ 1,495 $ 1,226 $ 2,684 $ 2,397 Interest, dividends and miscellaneous income ......................... 28 51 56 62 Equity in earnings of affiliated companies ........................... 21 27 48 52 Gain/(loss) on sales of assets ....................................... 11 93 (2) 93 ---------------------------------------------- Total revenues ................................................. 1,555 1,397 2,786 2,604 Costs and other deductions Crude oil, natural gas and product purchases ......................... 838 515 1,438 931 Operating expense .................................................... 286 356 537 680 Selling, administrative and general expense .......................... 52 15 84 39 Depreciation, depletion and amortization ............................. 183 199 383 380 Dry hole costs ....................................................... 47 42 74 92 Exploration expense .................................................. 35 39 73 86 Interest expense ..................................................... 48 42 93 83 Property and other operating taxes ................................... 14 15 27 31 Distributions on convertible preferred securities of subsidiary trust .................................... 8 8 16 16 Minority interests.................................................... 4 2 4 5 ---------------------------------------------- Total costs and other deductions ............................... 1,515 1,233 2,729 2,343 ---------------------------------------------- Earnings (loss) from operations before income taxes .................. 40 164 57 261 Income taxes ......................................................... 31 59 41 138 ---------------------------------------------- Net earnings (loss)........................... ................. $ 9 $ 105 $ 16 $ 123 ---------------------------------------------- Basic earnings (loss) per share of common stock (a) .................. $ 0.04 $ 0.43 $ 0.07 $ 0.51 Diluted earnings (loss) per share of common stock (b) ................ $ 0.04 $ 0.43 $ 0.07 $ 0.50 Cash dividends declared per share of common stock .................... $ 0.20 $ 0.20 $ 0.40 $ 0.40 - ----------------------------------------------------------------------------------------------------------------------- (a) Basic weighted average shares outstanding (in thousands) ....... 242,270 241,362 241,649 241,396 (b) Diluted weighted average shares outstanding (in thousands) ...... 244,001 242,707 242,717 242,610
CONSOLIDATED BALANCE SHEET UNOCAL CORPORATION June 30 December 31 -------------------- Millions of dollars 1999 (a) 1998 - --------------------------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents ......................................... $ 206 $ 238 Accounts and notes receivable ..................................... 841 807 Inventories ....................................................... 158 179 Deferred income taxes ............................................. 96 142 Other current assets .............................................. 26 22 -------------------- Total current assets ........................................... 1,327 1,388 Investments and long-term receivables ................................ 1,194 1,143 Properties (b) ....................................................... 5,840 5,276 Deferred income taxes ................................................ 71 23 Other assets ......................................................... 140 122 -------------------- Total assets ................................................... $ 8,572 $ 7,952 - --------------------------------------------------------------------------------------------- Liabilities and Stockholders' Equity Current liabilities Accounts payable .................................................. $ 738 $ 709 Taxes payable ..................................................... 92 260 Interest payable .................................................. 59 52 Current portion of environmental liabilities ...................... 140 142 Other current liabilities ......................................... 150 213 -------------------- Total current liabilities ...................................... 1,179 1,376 Long-term debt ....................................................... 2,802 2,558 Deferred income taxes ................................................ 281 132 Accrued abandonment, restoration and environmental liabilities ....... 598 622 Other deferred credits and liabilities ............................... 613 514 Minority interests.................................................... 424 26 Company-obligated mandatorily redeemable convertible preferred securities of a subsidiary trust holding solely parent debentures . 522 522 Common stock ($1 par value) .......................................... 253 252 Capital in excess of par value ....................................... 489 460 Unearned portion of restricted stock issued .......................... (23) (24) Retained earnings .................................................... 1,878 1,959 Accumulated other comprehensive income (loss) ........................ (33) (34) Treasury stock - at cost (c) ........................................ (411) (411) -------------------- Total stockholders' equity ..................................... 2,153 2,202 -------------------- Total liabilities and stockholders' equity .................. $ 8,572 $ 7,952 - --------------------------------------------------------------------------------------------- (a) Unaudited (b) Net of accumulated depreciation ................................. $ 10,269 $ 10,193 (c) Number of shares (in thousands) ................................. 10,623 10,623
CONSOLIDATED CASH FLOWS UNOCAL CORPORATION (Unaudited) For the Six Months Ended June 30 -------------------- Millions of dollars 1999 1998 - --------------------------------------------------------------------------------------------- Cash Flows from Operating Activities Net earnings (loss) .................................................. $ 16 $ 123 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, depletion and amortization ....................... 383 380 Dry hole costs ................................................. 74 92 Deferred income taxes .......................................... (9) 30 (Gain) loss on sales of assets (before-tax) .................... 2 (93) Other .......................................................... (21) 28 Working capital and other changes related to operations Accounts and notes receivable ............................... (56) 61 Inventories ................................................. 21 24 Accounts payable ............................................ (7) (139) Taxes payable ............................................... (168) (37) Other ....................................................... (61) (72) -------------------- Net cash provided by (used in) operating activities ...... 174 397 Cash Flows from Investing Activities Capital expenditures (includes dry hole costs) .................... (468) (766) Acquisition of Northrock Resources Ltd., net of $34MM cash acquired (150) -- Proceeds from sales of assets ..................................... 154 34 -------------------- Net cash provided by (used in) investing activities ...... (464) (732) Cash Flows from Financing Activities Long-term borrowings .............................................. 798 657 Reduction of long-term debt ....................................... (705) (316) Dividends paid on common stock .................................... (97) (97) Repurchases of common stock ....................................... -- (48) Minority interests................................................. 242 (7) Other ............................................................. 20 1 -------------------- Net cash provided by (used in) financing activities ......... 258 190 Increase (decrease) in cash and cash equivalents ..................... (32) (145) Cash and cash equivalents at beginning of year ....................... 238 338 - --------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period ........................... $ 206 $ 193 - ---------------------------------------------------------------------------------------------
CONSOLIDATED RESULTS UNOCAL CORPORATION (Unaudited) For the Three Months For the Six Months Ended June 30 Ended June 30 -------------------------------------------- Millions of dollars except per share amounts 1999 1998 1999 1998 - --------------------------------------------------------------------------------------------------------------------- Reported after-tax earnings .......................................... $ 9 $ 105 $ 16 $ 123 Special items ........................................................ (10) 43 (23) (11) -------------------------------------------- Adjusted after-tax earnings .......................................... $ 19 $ 62 $ 39 $ 134 Diluted reported earnings per share .................................. $ 0.04 $ 0.43 $ 0.07 $ 0.50 Diluted adjusted earnings per share .................................. $ 0.08 $ 0.26 $ 0.16 $ 0.55 - --------------------------------------------------------------------------------------------------------------------- ADJUSTED EARNINGS BY BUSINESS SEGMENT (After-tax)(Unaudited) For the Three Months For the Six Months Ended June 30 Ended June 30 -------------------------------------------- Millions of dollars 1999 1998 1999 1998 - --------------------------------------------------------------------------------------------------------------------- Exploration & Production United States Spirit Energy 76 (a) ........................................... $ 6 $ 15 $ 7 $ 24 Alaska ......................................................... 6 1 8 13 International Far East ....................................................... 39 58 87 100 Other .......................................................... 1 (15) (14) (23) Global Trade Global Trade ................................................... -- 4 2 10 Pipelines ...................................................... 16 15 33 30 Geothermal and Power Operations ...................................... 14 14 25 28 Diversified Business Group Agricultural Products ............................................ 3 12 6 21 Carbon & Minerals (a) ............................................. 7 8 16 22 Corporate and Unallocated New Ventures ...................................................... (4) (5) (5) (12) Administrative & General .......................................... (21) (16) (42) (34) Interest Expense - Net ............................................ (34) (24) (65) (50) Environmental & Litigation ........................................ (4) (3) (6) (4) Other ............................................................. (10) (2) (13) 9 -------------------------------------------- Total adjusted after-tax earnings .................................... $ 19 $ 62 $ 39 $ 134 - --------------------------------------------------------------------------------------------------------------------- (a) Includes minority interests income/ (expense) of: Spirit Energy 76 ........................................... $ (2) $ -- $ (2) $ (1) Carbon & Minerals .......................................... -- (1) -- (2)
OPERATING HIGHLIGHTS UNOCAL CORPORATION (Unaudited) For the Three Months For the Six Months Ended June Ended June 30 ---------------------------------------- 1999 1998 1999 1998 - ---------------------------------------------------------------------------------------------------------------------------- United States Net Daily Production Crude oil (thousand barrels daily) Spirit Energy 76 ............................................................ 40 44 40 44 Alaska ...................................................................... 28 29 28 30 Natural gas - wet basis (million cubic feet daily) Spirit Energy 76 ............................................................ 764 795 772 784 Alaska ...................................................................... 131 121 137 130 United States Average Sales Prices (a) Crude oil (per barrel) Spirit Energy 76 ............................................................ $ 14.98 $ 13.04 $ 13.15 $ 13.50 Alaska ...................................................................... $ 12.02 $ 8.83 $ 10.01 $ 9.84 Natural gas (per mcf) Spirit Energy 76 ............................................................ $ 2.05 $ 2.15 $ 2.01 $ 2.15 Alaska ...................................................................... $ 1.20 $ 1.48 $ 1.20 $ 1.47 - ---------------------------------------------------------------------------------------------------------------------------- International Net Daily Production (b) Crude oil (thousand barrels daily) Far East .................................................................... 72 79 71 84 Other (c) ................................................................... 35 33 33 32 Natural gas (million cubic feet daily) Far East .................................................................... 873 864 860 863 Other (c) ................................................................... 88 67 64 60 International Average Sales Prices (a) Crude oil (per barrel) Far East .................................................................... $ 14.76 $ 12.85 $ 12.59 $ 13.42 Other ....................................................................... $ 13.41 $ 10.31 $ 12.19 $ 11.34 Natural gas (per mcf) Far East .................................................................... $ 2.03 $ 2.04 $ 1.95 $ 2.03 Other ....................................................................... $ 1.90 $ 2.46 $ 1.86 $ 2.24 - ---------------------------------------------------------------------------------------------------------------------------- Worldwide Net Daily Production (b)(c) Crude oil (thousand barrels daily) ............................................. 175 185 172 190 Natural gas (per mcf) .......................................................... 1,856 1,847 1,833 1,837 Worldwide Average Sales Prices (a) Crude oil (per barrel) ......................................................... $ 13.99 $ 11.80 $ 12.16 $ 12.49 Natural gas (per mcf) .......................................................... $ 1.97 $ 2.05 $ 1.92 $ 2.05 - ---------------------------------------------------------------------------------------------------------------------------- (a) Realized prices include hedging gains and losses, but exclude other Global Trade margins (b) Production includes certain host countries' shares of: Crude oil 26 7 19 13 Natural gas 94 39 84 45 (c) Production includes 100% of Northrock Resources Ltd. in Canada of: Crude oil 5 -- 2 -- Natural gas 59 -- 30 --
-----END PRIVACY-ENHANCED MESSAGE-----