SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 9, 2001
(Date of earliest event reported)
ChevronTexaco Corporation
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-368-2 94-0890210
---------------------------- --------------------------- -----------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
575 Market Street, San Francisco, CA 94105
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(Address of principal executive offices including Zip Code)
Registrant's telephone number, including area code: (415) 894-7700
NONE
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(Former name or former address, if changed since last report)
PORTIONS AMENDED
The registrant hereby amends Item 7 of its Current Report on Form 8-K filed on
October 9, 2001, in its entirety, as set forth below.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
------------------------------------------------------------------
(a) Financial statements of businesses acquired.
-------------------------------------------
The audited financial statements of Texaco Inc. and subsidiary
companies as of December 31, 2000 and 1999 and for each of the three
years in the period ended December 31, 2000, found on pages 44 to 70 of
the Annual Report to Stockholders of Texaco Inc. for the fiscal year
ended December 31, 2000, filed as Exhibit 13 to Texaco's Annual Report
on Form 10-K for the year ended December 31, 2000 (filed with the SEC
on March 26, 2001), are incorporated herein by reference.
The unaudited financial statements of Texaco Inc. and subsidiary
companies for the quarterly period ended June 30, 2001, included in
Texaco Inc.'s Quarterly Report on Form 10-Q for the quarter ended June
30, 2001, filed on August 9, 2001, are incorporated herein by
reference.
(b) Pro forma financial information.
-------------------------------
The following required pro forma financial information is attached
hereto as Exhibit 99.4 and incorporated herein by reference:
Introduction to unaudited pro forma condensed combined financial
statements.
Unaudited Pro Forma Condensed Combined Financial Statements.
Unaudited pro forma condensed combined balance sheet of Chevron
and Texaco as of June 30, 2001.
Unaudited pro forma condensed combined statements of income of
Chevron and Texaco for the six months ended June 30, 2001 and 2000
and for the years ended December 31, 2000, 1999 and 1998.
Notes to unaudited pro forma condensed combined financial
statements.
(c) Exhibits.
--------
2.1 Agreement and Plan of Merger, dated as of October 15, 2000,
among Chevron Corporation, Texaco Inc. and Keepep Inc.
(incorporated by reference to Annex A to the joint proxy
statement/prospectus, dated August 27, 2001, that forms a part
of Chevron Corporation's Registration Statement on Form S-4/A
filed August 27, 2001 (File No. 333-54240)).
2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of
March 30, 2001, among Chevron Corporation, Texaco Inc. and Keepep
Inc. (incorporated by reference to Annex A-1 to the joint proxy
statement/prospectus, dated August 27, 2001, that forms a part of
Chevron Corporation's Registration Statement on Form S-4/A filed
August 27, 2001 (File No. 333-54240)).
23.1* Consent of Arthur Andersen LLP.
99.1 Press Release dated October 9, 2001 (previously filed as
Exhibit 99.1 to the registrant's Current Report on Form 8-K filed
on October 9, 2001).
99.2 The audited financial statements of Texaco and subsidiary
companies as of December 31, 2000 and 1999 and for each of the
three years in the period ended December 31, 2000 (incorporated by
reference to pages 44 to 70 of the Annual Report to Stockholders
of Texaco for the fiscal year ended December 31, 2000, filed as
Exhibit 13 to Texaco's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000 filed on March 26, 2001, SEC File
No. 1-27).
99.3 The unaudited financial statements of Texaco and subsidiary
companies for the quarterly period ended June 30, 2001
(incorporated by reference to Texaco's Quarterly Report on Form
10-Q for the quarter ended June 30, 2001 filed on August 9, 2001,
SEC File No. 1-27).
99.4* Introduction to unaudited pro forma condensed combined
financial statements.
Unaudited Pro Forma Condensed Combined Financial Statements.
Unaudited pro forma condensed combined balance sheet of Chevron
and Texaco as of June 30, 2001.
Unaudited pro forma condensed combined statements of income of
Chevron and Texaco for the six months ended June 30, 2001 and
2000 and for the years ended December 31, 2000, 1999 and 1998.
Notes to unaudited pro forma condensed combined financial
statements.
* Filed herewith
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
ChevronTexaco has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 19, 2001
CHEVRONTEXACO CORPORATION
By /s/ S.J. Crowe
------------------------------------------
S. J. Crowe, Vice President and
Comptroller
(Principal Accounting Officer and
Duly Authorized Officer)
Exhibit Index
2.1 Agreement and Plan of Merger, dated as of October 15, 2000,
among Chevron Corporation, Texaco Inc. and Keepep Inc.
(incorporated by reference to Annex A to the joint proxy
statement/prospectus, dated August 27, 2001, that forms a
part of Chevron Corporation's Registration Statement on
Form S-4/A filed August 27, 2001 (File No. 333-54240)).
2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as
of March 30, 2001, among Chevron Corporation, Texaco Inc.
and Keepep Inc. (incorporated by reference to Annex A-1 to
the joint proxy statement/prospectus, dated
August 27, 2001, that forms a part of Chevron Corporation's
Registration Statement on Form S-4/A filed August 27, 2001
(File No. 333-54240)).
23.1* Consent of Arthur Andersen LLP.
99.1 Press Release dated October 9, 2001 (previously filed as
Exhibit 99.1 to the registrant's Current Report on Form 8-K
filed on October 9, 2001).
99.2 The audited financial statements of Texaco and subsidiary
companies as of December 31, 2000 and 1999 and for each of
the three years in the period ended December 31, 2000
(incorporated by reference to pages 44 to 70 of the
Annual Report to Stockholders of Texaco for the fiscal year
ended December 31, 2000, filed as Exhibit 13 to Texaco's
Annual Report on Form 10-K for the fiscal year ended
December 31, 2000 filed on March 26, 2001,
SEC File No. 1-27).
99.3 The unaudited financial statements of Texaco and subsidiary
companies for the quarterly period ended June 30, 2001
(incorporated by reference to Texaco's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2001 filed on
August 9, 2001, SEC File No. 1-27).
99.4* Introduction to unaudited pro forma condensed combined
financial statements. Unaudited Pro Forma Condensed
Combined Financial Statements. Unaudited pro forma
condensed combined balance sheet of Chevron and Texaco as
of June 30, 2001. Unaudited pro forma condensed combined
statements of income of Chevron and Texaco for the six
months ended June 30, 2001 and 2000 and for the years ended
December 31, 2000, 1999 and 1998. Notes to unaudited pro
forma condensed combined financial statements.
* Filed herewith.
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 8-K/A of our report dated February 22, 2001 included in
Texaco Inc.'s Form 10-K for the year ended December 31, 2000. We also consent to
the incorporation of that report into the following previously filed
Registration Statements:
Form File Number
Chevron Corporation: S-3 33-58463
S-3 333-90977
S-8 333-02011
S-8 333-21805
S-8 333-21807
S-8 333-21809
S-8 333-26731
S-8 333-46261
S-8 33-3899
S-8 33-34039
S-8 33-35283
Chevron Capital Corporation
and Chevron Corporation: S-3 333-90977-01
Chevron Canada Capital Company
and Chevron Corporation: S-3 333-90977-02
Chevron Capital USA Inc.
and Chevron Corporation: S-3 33-14307
Caltex Petroleum Company: S-8 2-90907
ARTHUR ANDERSEN LLP
New York, New York
October 19, 2001
Exhibit 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements
combine the historical consolidated balance sheet and statements of income of
Chevron and Texaco, giving effect to the merger using the pooling-of-interests
method of accounting for a business combination. The financial statements also
reflect the consolidation of entities jointly owned by Chevron and Texaco,
primarily the Caltex Group (Caltex) of equity affiliates.
We are providing the following information to aid in the analysis of the
financial aspects of the merger. We derived this information from the audited
financial statements of Chevron, Texaco and Caltex for the years 2000, 1999 and
1998. The income statement information for the six-month periods ended June 30,
2001 and 2000, and the balance sheet information at June 30, 2001, were derived
from the unaudited financial information of the companies. The information is
only a summary. It should be read together with the historical financial
statements and related notes contained in the annual reports and other
information filed with the SEC and incorporated by reference.
The unaudited pro forma condensed combined statements of income assume the
merger was effected on January 1, 1998. The unaudited pro forma condensed
combined balance sheet gives effect to the merger as if it had occurred on June
30, 2001. Since accounting policies of the combining companies are substantially
comparable, we did not make any conforming accounting policy adjustments to the
unaudited pro forma condensed combined financial statements.
As described in note 6 to these unaudited pro forma condensed combined
financial statements, we have made pro forma adjustments for the disposition of
assets required by order of the U.S. Federal Trade Commission (FTC). These are
Texaco's investments in Equilon and Motiva, two joint ventures engaged in U.S.
refining, marketing and transportation businesses, as well as other Texaco
interests in U.S. natural gas processing and transportation facilities and
general aviation fuel marketing. On October 8, 2001, Texaco executed a
non-binding Memorandum of Understanding (MOU) with Shell Oil Company and Saudi
Refining Inc. regarding the sale of its investments in Equilon and Motiva. On
October 9, 2001, immediately before the Chevron-Texaco merger closed, the stock
of the Texaco subsidiaries that owned Texaco's interests in Equilon and Motiva
was placed in an irrevocable trust for purposes of divestiture, as required by
the FTC consent order. The pro forma adjustments reflect the financial terms of
the MOU, which may or may not result in definitive agreements. The disposition
of a portion of Texaco's general aviation fuel marketing business was completed
on October 10, 2001 and the pro forma adjustments reflect the terms of the sales
agreement. Additional pro forma adjustments reflect the expected disposition of
other Texaco interests in U.S. natural gas processing and transportation
facilities.
The unaudited pro forma combined financial information is for illustrative
purposes only. The financial results may have been different had the companies
actually been combined.
You should not rely on the unaudited pro forma combined financial
information as being indicative of the historical results that would have been
achieved had the companies been combined during the periods or the future
results that the combined company will experience after the merger.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
At June 30, 2001
(Millions of dollars)
Historical Pro Forma Adjustments
----------------------- ---------------------------------------
Asset Pro Forma
Chevron Texaco Caltex(7A) Other Dispositions Combined
------------------------------------------------------------------------------
Assets
Cash and cash equivalents............... $ 2,895 $ 166 $ 219 $ 21 (7B) $ 2,150 (6A) $ 5,470
19 (6B)
Marketable securities................... 1,521 46 16 -- -- 1,583
Accounts and notes receivable, net...... 3,553 6,258 1,629 (454)(4) -- 11,006
20 (7B)
Inventories
Crude oil and petroleum products........ 582 1,213 615 -- (15)(6B) 2,395
Chemicals............................... 205 -- -- -- -- 205
Materials, supplies and other........... 255 227 24 4 (7B) -- 510
-------- -------- -------- -------- ------- --------
1,042 1,440 639 4 (15) 3,110
Prepaid expenses and other current assets 646 466 52 -- -- 1,164
Assets Held for Disposal................ -- -- -- -- 62 (6B) 62
-------- -------- -------- -------- ------- --------
Total Current Assets.................... 9,657 8,376 2,555 (409) 2,216 22,395
Long-term receivables................... 733 1,219 49 -- -- 2,001
Investments and advances................ 9,368 6,507 2,324 (418)(4) (2,612)(6A) 10,559
(4,306)(7A) (57)(6B)
(185)(7B)
(62)(7C)
Properties, plant and equipment, at cost 53,154 33,813 9,863 167 (7B) (22)(6B) 96,975
Less: accumulated depreciation, depletion
and 30,134 17,641 4,797 5 (7B) (15)(6B) 52,562
-------- -------- -------- -------- ------- --------
Amortization..........................
Properties, plant and equipment, net.... 23,020 16,172 5,066 162 (7) 44,413
Deferred charges and other assets....... 1,277 1,336 230 10 (7B) -- 2,853
-------- -------- -------- -------- ------- --------
Total Assets............................ $ 44,055 $ 33,610 $ 10,224 $ (5,208) $ (460) $ 82,221
======== ======== ======== ======== ======= ========
Liabilities
Short-term debt......................... $ 2,074 $ 598 $ 1,467 $ -- $ -- $ 4,139
Accounts payable........................ 3,124 4,686 1,350 (454)(4) -- 8,787
1 (7B)
80 (5)
Accrued liabilities..................... 1,322 1,169 189 31 (7B) -- 2,711
Federal and other taxes on income....... 1,850 370 69 -- 139 (6A) 2,429
1 (6B)
Other taxes payable..................... 464 638 91 -- -- 1,193
-------- -------- -------- -------- ------- --------
Total Current Liabilities............... 8,834 7,461 3,166 (342) 140 19,259
Long-term debt.......................... 4,371 6,714 1,072 (418)(4) -- 11,739
Capital lease obligations............... 264 34 6 -- -- 304
Deferred credits and other noncurrent
Obligations........................... 1,597 1,495 1,339 -- 175 (6A) 4,606
Minority Interests...................... 63 713 26 (62)(7C) -- 740
Noncurrent deferred income taxes........ 4,866 1,754 221 -- (341)(6A) 6,500
Reserves for employee benefit plans..... 1,836 1,109 88 -- -- 3,033
-------- -------- -------- -------- ------- --------
Total Liabilities....................... 21,831 19,280 5,918 (822) (26) 46,181
-------- -------- -------- -------- ------- --------
Stockholders' Equity
Common stock............................ 534 1,774 355 (355)(7A) -- 852
(1,456)(7D)
Capital in excess of par value.......... 2,784 1,305 2 (2)(7A) -- 4,798
709 (7D)
Deferred compensation and benefit plan
Trust................................. (511) (293) -- -- -- (804)
Accumulated other comprehensive loss.... (170) (130) (221) 221 (7A) -- (300)
Retained earnings....................... 23,004 12,421 4,170 (4,170)(7A) (435)(6A) 34,911
(80)(5) 1 (6B)
Treasury stock, at cost................. (3,417) (747) -- 747 (7D) -- (3,417)
-------- -------- -------- -------- ------- --------
Total Stockholders' Equity.............. 22,224 14,330 4,306 (4,386) (434) 36,040
-------- -------- -------- -------- ------- --------
Total Liabilities and Stockholders'
Equity................................ $ 44,055 $ 33,610 $ 10,224 $ (5,208) $ (460) $ 82,221
======== ======== ======== ======== ======= ========
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
Six Months Ended June 30, 2001
(Millions of dollars except per-share amounts)
Pro Forma Adjustments
---------------------
Historical Sub-total: Adjusted
---------- Pro Forma Asset Pro Forma
Chevron Texaco Caltex(7A) Other Combined Dispositions(6) Combined
--------------------------------------------------------------------------------------------
Revenues and Other Income
Sales and other operating revenues* $ 24,682 $ 27,479 $8,275 $(2,893)(4) $ 57,584 $ (71)(6B) $ 57,513
41 (7B)
Income from equity affiliates..... 463 648 60 (3)(4) 860 (400)(6A) 464
(279)(7A) 4 (6B)
(25)(7B)
(4)(7C)
Other income...................... 159 44 32 (2)(7B) 233 -- 233
-------- -------- ------ ------- -------- ------ --------
Total Revenues and Other
Income.................. 25,304 28,171 8,367 (3,165) 58,677 (467) 58,210
-------- -------- ------ ------- -------- ------ --------
Costs and Other Deductions
Purchased crude oil and products.. 12,589 17,693 6,159 (2,855)(4) 33,586 (63)(6B) 33,523
Minority interests................ 3 76 (1) (4)(7C) 74 -- 74
Operating expenses................ 2,443 1,098 388 (38)(4) 3,894 (7)(6B) 3,887
3 (7B)
Selling, general and administrative
Expenses........................ 903 682 265 -- 1,850 -- 1,850
Exploration expenses.............. 285 112 14 -- 411 -- 411
Depreciation, depletion and
Amortization.................... 1,372 639 264 4 (7B) 2,279 -- 2,279
Taxes other than on income*....... 2,460 4,805 633 -- 7,898 -- 7,898
Interest and debt expense......... 162 218 95 (3)(4) 472 -- 472
-------- -------- ------ ------- -------- ------ --------
Total Costs and Other
Deductions.............. 20,217 25,323 7,817 (2,893) 50,464 (70) 50,394
-------- -------- ------ ------- -------- ------ --------
Income Before Income Tax Expense.. 5,087 2,848 550 (272) 8,213 (397) 7,816
Income Tax Expense................ 2,163 1,231 271 7 (7B) 3,672 (143)(6A) 3,531
2 (6B)
-------- -------- ------ ------- -------- ------ --------
Net Income........................ $ 2,924 $ 1,617 $ 279 $ (279) $ 4,541 $ (256) $ 4,285
======== ======== ====== ======= ======== ====== ========
Per Share of Common Stock:
Net Income
--Basic......................... $ 4.55 $ 2.98 $ 4.28(3) $ (0.24) $ 4.04(3)
--Diluted....................... $ 4.54 $ 2.97 $ 4.27(3) $ (0.24) $ 4.03(3)
Dividends......................... $ 1.30 $ .90 $ 1.25(3) -- $ 1.25(3)
Weighted Average Number of Shares
Outstanding (thousands)
--Basic......................... 642,457 541,396 1,059,332(3) 1,059,332(3) 1,059,332(3)
--Diluted....................... 643,914 543,559 1,062,454(3) 1,062,454(3) 1,062,454(3)
* Includes consumer excise taxes.. $ 2,067 $ 1,157 $ 8 $ 3,232 -- $ 3,232
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
Six Months Ended June 30, 2000
(Millions of dollars except per-share amounts)
Pro Forma Adjustments
-----------------------
Historical Sub-total: Adjusted
---------- Pro Forma Asset Pro Forma
Chevron Texaco Caltex(7A) Other Combined Dispositions (6) Combined
----------------------------------------------------------------------------------------------
Revenues and Other
Income
Sales and other operating
revenues*................ $ 24,367 $ 24,145 $9,360 $(3,133)(4) $ 54,739 $ (77)(6B) $ 54,662
Income from equity
affiliates............... 371 341 36 (230)(7A) 511 (115)(6A) 396
2 (7B)
(9)(7C)
Other income............... 213 69 57 (3)(7B) 336 -- 336
-------- -------- ------ ------- --------- --------- -----------
Total Revenues and
Other Income..... 24,951 24,555 9,453 (3,373) 55,586 (192) 55,394
-------- -------- ------ ------- --------- --------- -----------
Costs and Other Deductions
Purchased crude oil and
products................. 13,507 14,548 7,264 (3,085)(4) 32,234 (68)(6B) 32,166
Minority interests......... 3 57 -- (9)(7C) 51 -- 51
Operating expenses......... 2,539 1,109 350 (48)(4) 3,954 (7)(6B) 3,947
4 (7B)
Selling, general and
administrative expenses.. 763 581 262 -- 1,606 -- 1,606
Exploration expenses....... 219 113 14 -- 346 -- 346
Depreciation, depletion and
amortization............. 1,350 875 245 -- 2,470 -- 2,470
Taxes other than on income* 2,332 5,075 741 -- 8,148 -- 8,148
Interest and debt expense.. 255 231 94 -- 580 -- 580
-------- -------- ------ ------- --------- --------- -----------
Total Costs and Other
Deductions....... 20,968 22,589 8,970 (3,138) 49,389 (75) 49,314
-------- -------- ------ ------- --------- --------- -----------
Income Before Income Tax
Expense.................. 3,983 1,966 483 (235) 6,197 (117) 6,080
Income Tax Expense......... 1,823 767 253 (5)(7B) 2,838 (28)(6A) 2,809
(1)(6B)
-------- -------- ------ ------- --------- --------- -----------
Net Income................. $ 2,160 $ 1,199 $ 230 $ (230) $ 3,359 $ (88) $ 3,271
======== ======== ====== ======= ========= ========= ===========
Per Share of Common Stock:
Net Income
-- Basic.................. $ 3.30 $ 2.19 $ 3.12(3) $ (0.08) $ 3.04(3)
-- Diluted................ $ 3.30 $ 2.19 $ 3.12(3) $ (0.08) $ 3.04(3)
Dividends.................. $ 1.30 $ .90 $ 1.25(3) -- $ 1.25(3)
Weighted Average Number of
Shares Outstanding
(thousands)
-- Basic.................. 654,724 543,334 1,073,091(3) 1,073,091(3) 1,073,091(3)
-- Diluted................ 655,976 544,945 1,075,583(3) 1,075,583(3) 1,075,583(3)
* Includes consumer excise
taxes.................... $ 1,962 $ 1,274 $ 11 $ 3,247 -- $ 3,247
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
Year Ended December 31, 2000
(Millions of dollars except per-share amounts)
Pro Forma Adjustments
----------------------
Historical Sub-total: Adjusted
---------- Pro-Forma Asset Pro Forma
Chevron Texaco Caltex(7A) Other Combined Dispositions (6) Combined
-------------------------------------------------------------------------------------------------------------------------------
Revenues and Other Income
Sales and other operating
Revenues*................ $ 50,592 $ 52,638 $ 20,267 $ (6,403)(4) $ 117,102 $ (154)(6B) $ 116,948
8 (7B)
Income from equity
Affiliates............... 750 785 85 (519)(7A) 1,076 (308)(6A) 768
(5)(7B)
(20)(7C)
Other income............... 787 97 80 (4)(7B) 960 -- 960
-------- -------- -------- -------- ----------- ---------- ----------
Total Revenues and
Other Income..... 52,129 53,520 20,432 (6,943) 119,138 (462) 118,676
-------- -------- -------- -------- ----------- ---------- ----------
Costs and Other Deductions
Purchased crude oil and
Products................. 27,292 32,843 15,928 (6,334) (4) 69,729 (136)(6B) 69,593
Minority interests......... 6 125 -- (20) (7C) 111 111
Operating expenses......... 5,171 2,419 733 (69) (4) 8,260 (12)(6B) 8,248
6 (7B)
Selling, general and
Administrative expenses.. 1,725 1,291 565 -- 3,581 3,581
Exploration expenses....... 564 358 27 -- 949 949
Depreciation, depletion and
Amortization............. 2,848 1,917 494 1 (7B) 5,260 5,260
Taxes other than on income* 4,793 9,891 1,405 16,089 -- 16,089
Interest and debt expense.. 460 458 192 -- 1,110 1,110
-------- -------- -------- -------- ----------- ---------- ----------
Total Costs and Other
Deductions....... 42,859 49,302 19,344 (6,416) 105,089 (148) 104,941
-------- -------- -------- -------- ----------- ---------- ----------
Income Before Income Tax
Expense.................. 9,270 4,218 1,088 (527) 14,049 (314) 13,735
Income Tax Expense......... 4,085 1,676 569 (8)(7B) 6,322 (98)(6A) 6,224
-------- -------- -------- -------- ----------- ---------- ----------
Net Income................. $ 5,185 $ 2,542 $ 519 $ (519) $ 7,727 $ (216) $ 7,511
======== ======== ======== ======== =========== ========== ==========
Per Share of Common Stock:
Net Income
-- Basic.................. $ 7.98 $ 4.66 $ 7.22(3) $ (0.20) $ 7.02(3)
-- Diluted................ $ 7.97 $ 4.65 $ 7.21(3) $ (0.20) $ 7.01(3)
Dividends.................. $ 2.60 $ 1.80 $ 2.50(3) -- $ 2.50(3)
Weighted Average Number of
Shares Outstanding
(thousands)
-- Basic.................. 649,948 542,322 1,067,536(3) 1,067,536(3) 1,067,536(3)
-- Diluted................ 651,085 543,952 1,069,928(3) 1,069,928(3) 1,069,928(3)
* Includes consumer excise
taxes.................... $ 4,060 $ 2,519 $ 22 $ 6,601 -- $ 6,601
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
Year Ended December 31, 1999
(Millions of dollars except per-share amounts)
Pro Forma
Historical Adjustments
------------------- --------------------- Pro Forma
Chevron Texaco Caltex(7A) Other Combined
-------------------------------------------------------------
Revenues and Other Income
Sales and other operating revenues*.................. $ 35,448 $ 37,112 $ 14,970 $ (4,071)(4) $ 83,459
Income from equity affiliates........................ 526 483 260 (390)(7A) 851
(10)(7B)
(18)(7C)
Other income......................................... 612 184 61 1 (7B) 858
--------- -------- -------- -------- ---------
Total Revenues and Other Income.............. 36,586 37,779 15,291 (4,488) 85,168
--------- -------- -------- -------- ---------
Costs and Other Deductions
Purchased crude oil and products..................... 17,982 20,895 11,631 (4,014)(4) 46,494
Minority interests................................... 4 83 2 (18)(7C) 71
Operating expenses................................... 5,086 2,050 694 (57)(4) 7,765
(8)(7B)
Selling, general and administrative expenses......... 1,404 1,186 632 -- 3,222
Exploration expenses................................. 538 501 33 -- 1,072
Depreciation, depletion and amortization............. 2,866 1,543 459 -- 4,868
Taxes other than on income*.......................... 4,586 9,238 908 -- 14,732
Interest and debt expense............................ 472 504 152 4(7B) 1,132
--------- -------- -------- -------- ---------
Total Costs and Other Deductions............. 32,938 36,000 14,511 (4,093) 79,356
--------- -------- -------- -------- ---------
Income Before Income Tax Expense..................... 3,648 1,779 780 (395) 5,812
Income Tax Expense................................... 1,578 602 390 (5)(7B) 2,565
--------- -------- -------- -------- ---------
Net Income........................................... $ 2,070 $ 1,177 $ 390 $ (390) $ 3,247
========= ======== ======== ======== =========
Per Share of Common Stock:
Net Income
-- Basic............................................ $ 3.16 $ 2.14 $ 3.01(3)
-- Diluted.......................................... $ 3.14 $ 2.14 $ 3.00(3)
Dividends............................................ $ 2.48 $ 1.80 $ 2.43(3)
Weighted Average Number of Shares Outstanding
(thousands)
-- Basic............................................ 656,537 525,369 1,068,771(3)
-- Diluted.......................................... 659,457 537,869 1,073,616(3)
* Includes consumer excise taxes..................... $ 3,910 $ 2,097 $ 22 $ 6,029
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
Year Ended December 31, 1998
(Millions of dollars except per-share amounts)
Pro Forma
Historical Adjustments
-------------------- -------------------- Pro Forma
Chevron Texaco Caltex(7A) Other Combined
-------------------------------------------------------------
Revenues and Other Income
Sales and other operating revenues*.................. $ 29,943 $ 33,088 $ 11,550 $ (3,208)(4) $ 71,373
Income from equity affiliates........................ 228 485 65 (143)(7A) 634
3 (7B)
(4)(7C)
Other income......................................... 386 227 74 -- 687
--------- --------- -------- -------- -----------
Total Revenues and Other Income.............. 30,557 33,800 11,689 (3,352) 72,694
--------- --------- -------- -------- -----------
Costs and Other Deductions
Purchased crude oil and products..................... 14,036 17,672 8,310 (3,208)(4) 36,810
Minority interests................................... 7 56 3 (4)(7C) 62
Operating expenses................................... 4,827 2,262 573 3 (7B) 7,665
Selling, general and administrative expenses......... 2,239 1,224 720 -- 4,183
Exploration expenses................................. 478 461 31 -- 970
Depreciation, depletion and amortization............. 2,320 1,675 431 -- 4,426
Taxes other than on income*.......................... 4,411 9,294 980 -- 14,685
Interest and debt expense............................ 405 480 172 -- 1,057
--------- --------- -------- -------- -----------
Total Costs and Other Deductions............. 28,723 33,124 11,220 (3,209) 69,858
--------- --------- -------- -------- -----------
Income Before Income Tax Expense..................... 1,834 676 469 (143) 2,836
Income Tax Expense................................... 495 98 326 -- 919
--------- --------- -------- -------- -----------
Net Income........................................... $ 1,339 $ 578 $ 143 $ (143) $ 1,917
========= ========= ======== ======== ===========
Per Share of Common Stock:
Net Income
-- Basic............................................ $ 2.05 $ .99 $ 1.76(3)
-- Diluted.......................................... $ 2.04 $ .99 $ 1.75(3)
Dividends............................................ $ 2.44 $ 1.80 $ 2.40(3)
Weighted Average Number of Shares Outstanding
(thousands)
-- Basic............................................ 654,858 528,416 1,061,739(3)
-- Diluted.......................................... 657,076 529,016 1,064,418(3)
* Includes consumer excise taxes..................... $ 3,756 $ 2,148 $ 26 $ 5,930
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The unaudited pro forma condensed combined statements of income are based on
the audited consolidated financial statements of Chevron and Texaco for the
years ended December 31, 2000, 1999 and 1998 and the unaudited financial
statements of Chevron and Texaco for the six months ended June 30, 2001 and
2000. The unaudited pro forma condensed combined balance sheet is based on the
unaudited consolidated financial statements of Chevron and Texaco at June 30,
2001. The financial statements also reflect the consolidation of entities
commonly owned by Chevron and Texaco, primarily the Caltex Group (Caltex) of
equity affiliates. We have presented the consolidating financial data of Caltex
separately from other pro forma adjustments to aid the analysis of all pro forma
adjustments.
Chevron and Texaco consolidated financial statements are prepared in
conformity with accounting principles generally accepted in the United States
and require estimates that affect the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities.
In the opinion of Chevron and Texaco, the unaudited pro forma condensed combined
financial statements include all adjustments necessary to present fairly the
results of the periods presented.
The unaudited pro forma combined financial information is for illustrative
purposes only. The financial results may have been different had the companies
always been combined. The unaudited pro forma combined financial information
should not be relied upon as being indicative of the historic results that would
have been achieved had the companies actually been combined or the future
results that the combined company will experience after the merger.
Note 2. Accounting Policies and Financial Statement Classifications
Since the accounting policies of the combining companies are substantially
comparable, we did not make any accounting policy conformance adjustments to the
unaudited pro forma condensed combined financial statements.
Certain revenues, costs and other deductions in the consolidated statements
of income for Texaco and Caltex have been reclassified to conform to the
line-item presentation in the unaudited pro forma condensed combined statements
of income. Certain assets and liabilities in the consolidated balance sheets for
Texaco and Caltex have been reclassified to conform to the line-item
presentation in the unaudited pro forma condensed combined balance sheet.
Note 3.Unaudited Pro Forma Combined Net Income Per Share and Dividends Per Share
The unaudited pro forma combined net income per common share is based on net
income less preferred stock dividends and the weighted average number of
outstanding common shares. Diluted net income per common share includes the
effect of dilutive securities, including stock options. The historical weighted
average number of outstanding common shares has been adjusted to reflect the
exchange ratio of 0.77 shares of ChevronTexaco common stock for each share of
Texaco common stock.
The pro forma combined dividends per share reflect the sum of the dividends
paid by Chevron and Texaco divided by the number of shares that would have been
outstanding for the periods, after adjusting the Texaco shares for the exchange
ratio of 0.77 shares of ChevronTexaco common stock.
Note 4. Intercompany Transactions
Intercompany sales and purchase transactions among Chevron, Texaco and
Caltex have been eliminated in the unaudited pro forma condensed combined
statements of income. Intercompany amounts receivable and payable have been
eliminated in the unaudited pro forma condensed combined balance sheet. Interest
income and expense on loans during the first half of 2001 between Chevron and
Caltex and associated balance sheet accounts have also been eliminated.
Note 5. Merger-Related and Integration-Related Expenses
Merger-related fees and expenses, consisting primarily of SEC filing fees;
fees and expenses of investment bankers, attorneys and accountants; and
financial printing and other related charges, are estimated to be approximately
$150 million. Through June 30, 2001, approximately $70 million had been incurred
since the merger announcement and is included in the pro forma financial results
for 2000 and the six months ended June 30, 2001. The remaining fees and expenses
of $80 million have been reflected in the unaudited pro forma condensed combined
balance sheet as of June 30, 2001.
Though not yet fully quantified, significant costs will be incurred for
integration-related expenses, including the elimination of duplicate facilities,
operational realignment and workforce reductions. These expenditures are
necessary to reduce the costs of ongoing operations and to operate more
effectively. These amounts will be charged to operations in the appropriate
periods and, therefore, are not reflected in the unaudited pro forma condensed
combined financial statements. The unaudited pro forma condensed combined
financial statements reflect neither the impact of these charges nor the
benefits from the expected synergies.
Note 6. Anticipated Asset Dispositions Required by the U.S. Federal Trade
Commission(FTC)
To address competitive concerns, Chevron and Texaco reached an agreement
with the staff of the FTC that permitted the parties to close the merger without
FTC challenge. This agreement included a proposed consent order that required,
among other things, the divestiture of specified Texaco assets. On September 7,
2001, the FTC approved the consent order.
(A) Under the consent order, ChevronTexaco is required to divest its
investments in Texaco's U.S. refining, marketing and transportation affiliates,
Equilon and Motiva. On October 9, 2001, immediately before the Chevron-Texaco
merger closed, the stock of the Texaco subsidiaries that owned Texaco's
interests in Equilon and Motiva was placed in an irrevocable trust for purposes
of divestiture, as required by the FTC consent order. On the previous day,
Texaco had executed a Memorandum of Understanding (MOU) with Shell Oil Company
(Shell) and Saudi Refining, Inc. (SRI) for the sale of these investments. The
MOU is a non-binding agreement which provides that the parties will endeavor to
conclude definitive agreements by early November 2001. Further negotiations with
Shell and SRI towards such definitive agreements will be conducted by the
divestiture trustee, who may also pursue other potential purchasers, subject to
the terms of the consent order. The pro forma balance sheet at June 30, 2001,
reflects the financial terms of the MOU and shows before-tax cash proceeds of
$2,100 million and an after-tax loss on disposition of $435 million. The pro
forma adjustments also reflect cash proceeds of $50 million in respect of a
deferred dividend from Motiva, which will be paid to ChevronTexaco on the sale
of ChevronTexaco's interest in Motiva. While a loss on disposition of
ChevronTexaco's interests in Equilon and Motiva is expected, the ultimate impact
on net income arising from the sale is dependent upon the final terms of a
definitive sales agreement and the timing at which a sale transaction is
consummated.
(B) The FTC consent order requires additional assets to be divested. These
are Texaco's interests in an offshore U.S. natural gas pipeline system, a Texas
natural gas processing facility, and a portion of general aviation fuel
marketing. The general aviation fuel marketing assets were divested on October
10, 2001 for before-tax cash proceeds of approximately $16 million with an
immaterial gain. The sale is reflected in the pro forma balance sheet at June
30, 2001 at which time before-tax cash proceeds would have been $19 million
under the terms of the sales agreement. A pro forma balance sheet adjustment has
been made to classify as "Assets held for disposal" the remaining assets that
are required to be divested under the FTC consent order. No pro forma
adjustments have been made to reflect any anticipated gain or loss from the
disposition of these assets, as the method of disposition and sales proceeds are
not known, but any such effect is not expected to be material with respect to
earnings, financial position or liquidity in any given period.
The unaudited pro forma condensed combined statements of income for the
six-month periods ended June 30, 2001 and 2000 and for the year ended December
31, 2000, include adjustments to eliminate Texaco's net income attributable to
all assets that are required to be divested under the FTC agreement. The effect
on pro forma combined earnings per ChevronTexaco share, basic and diluted, for
these periods is a reduction of $0.24, $0.08 and $0.20, respectively. Pro forma
combined net income of ChevronTexaco does not include any after-tax income or
loss arising from the disposition of these assets. Additionally, no pro forma
adjustments have been made to reflect any earnings benefit from the reinvestment
of any proceeds which might be recovered, or reduction of debt which may arise
as a consequence of the asset dispositions required under the consent agreement.
Note 7. Other Pro Forma Adjustments
(A) Pro forma adjustments have been made to consolidate the accounts of
Caltex, which is owned 50 percent each by Chevron and Texaco. Both companies
accounted for their respective investments in Caltex using the equity method.
(B) Pro forma adjustments have been made to consolidate the accounts of P.T.
Mandau Cipta Tenaga Nusantara, an Indonesian company, which is owned jointly by
the combining companies and which was accounted for by Chevron and Texaco using
the equity method.
(C) Pro forma adjustments have been made for certain accounts relating to
Fuel and Marine Marketing LLC (FAMM), which is owned 69 percent by Texaco and 31
percent by Chevron. Texaco consolidated the results of FAMM and recorded entries
to reflect Chevron's minority interest. Chevron accounted for its share of FAMM
using the equity method.
(D) A pro forma adjustment has been made to reflect the cancellation of
approximately 17 million shares of Texaco common stock accounted for as treasury
stock and the assumed issuance of approximately 425 million shares of
ChevronTexaco common stock in exchange for all of the outstanding Texaco common
stock (based on the exchange ratio of 0.77).