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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 25, 1994
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TEXACO INC.
(Exact name of registrant as specified in its charter)
Delaware 1-27 74-1383447
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation) Number) Identification Number)
2000 Westchester Avenue, 10650
White Plains, New York (Zip Code)
(Address of principal executive offices)
(914) 253-4000
(Registrant's telephone number, including area code)
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Item 5. Other Events
- --------------------
1. On October 25, 1994, the Registrant issued an Earnings Press
Release entitled "Texaco Reports Results for Third Quarter and
Nine Months 1994," a copy of which is attached hereto as
Exhibit 99.1 and made a part hereof.
Item 7. Financial Statements, Pro Forma Financial Information and
- -----------------------------------------------------------------
Exhibits
- --------
(c) Exhibits
99.1 Press Release issued by Texaco Inc. dated October 25,
1994, entitled "Texaco Reports Results for the Third
Quarter and Nine Months 1994."
SIGNATURES
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 hereunto duly authorized.
TEXACO INC.
---------------------
(Registrant)
By: R. E. KOCH
---------------------
(Assistant Secretary)
Date: October 25, 1994
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APPENDIX
Description of graphic material included in Exhibit 99.1.
The following information is depicted in graphic form in a Press
Release issued by Texaco Inc. dated October 25, 1994, entitled
"Texaco Reports Results for the Third Quarter and Nine Months 1994"
filed as Exhibit 99.1 to this Form 8-K:
1. The first graph is located within the seventh paragraph of
Exhibit 99.1. Graph is entitled "Texaco Average U.S. Natural
Gas Price Per Quarter" and is shown in dollars per MCF by
quarter for the year 1993 and first three quarters of 1994.
The Y axis depicts dollars per MCF from $0.00 to $3.00 with
$.50 increments. The X axis depicts the calendar quarters for
the year 1993 and first three quarters of 1994. The plot
points are as follows:
First Quarter 1993 - $1.99 per MCF
Second Quarter 1993 - $2.26 per MCF
Third Quarter 1993 - $2.17 per MCF
Fourth Quarter 1993 - $2.34 per MCF
First Quarter 1994 - $2.32 per MCF
Second Quarter 1994 - $2.02 per MCF
Third Quarter 1994 - $1.84 per MCF
The following summary information is also depicted at the bottom of the
graph:
Nine Months 1993 - $2.14 per MCF
Nine Months 1994 - $2.05 per MCF
2. The second graph is also located within the seventh paragraph of
Exhibit 99.1. Graph is entitled "Texaco Average U.S. Crude
Price Per Quarter" and is shown in dollars per barrel by
quarter for the year 1993 and first three quarters of 1994.
The Y axis depicts dollars per barrel from $10.00 to $18.00
with $2.00 increments. The X axis depicts the calendar
quarters for the year 1993 and first three quarters of 1994.
The plot points are as follows:
First Quarter 1993 - $15.46 per barrel
Second Quarter 1993 - $15.70 per barrel
Third Quarter 1993 - $13.55 per barrel
Fourth Quarter 1993 - $12.36 per barrel
First Quarter 1994 - $11.02 per barrel
Second Quarter 1994 - $13.45 per barrel
Third Quarter 1994 - $14.82 per barrel
The following summary information is also depicted at the bottom of the
graph:
Nine Months 1993 - $14.90 per barrel
Nine Months 1994 - $13.10 per barrel
FDeb:bm
(8KOCT24)
EXHIBIT 99.1
TEXACO REPORTS RESULTS
----------------------
FOR THE THIRD QUARTER AND NINE MONTHS 1994
------------------------------------------
FOR IMMEDIATE RELEASE: TUESDAY, OCTOBER 25, 1994.
- -------------------------------------------------
WHITE PLAINS, N.Y., Oct. 25 - Texaco announced today that consolidated
worldwide net income from continuing operations for the third quarter of 1994
was $281 million, or $.98 per share, compared with $317 million, or $1.13 per
share, for the third quarter of 1993. Net income from continuing operations
for the first nine months of 1994 was $598 million, or $2.02 per share,
compared with $910 million, or $3.22 per share, for the first nine months
of 1993.
Third Quarter Nine Months
--------------------- --------------------
Texaco Inc. (Millions): 1994 1993 1994 1993
______________________________________________________________________________________________
Net income from continuing operations before
special items $ 270 $ 255 $ 627 $ 848
Special charges and credits 3 (83) (116) (83)
Tax benefits on asset sale 8 145 87 145
----- ----- ----- -----
Total net income from continuing operations 281 317 598 910
Discontinued chemical operations:
Loss from operations - (11) - (17)
Loss on disposal of business - (164) (87) (164)
----- ----- ----- -----
Total net income $ 281 $ 142 $ 511 $ 729
_______________________________________________________________________________________________
In commenting on 1994's results Alfred C. DeCrane, Jr., Texaco's Chairman
of the Board and Chief Executive Officer stated, "The third quarter results
reflect solid benefits over last year from improved operating performance and
expense containment efforts. Higher international crude oil production, higher
natural gas production in the U.S. and the North Sea, coupled with higher
worldwide crude prices were sufficient to offset the decline in natural gas
prices, depressed downstream margins in the eastern half of the U.S. and in
Europe, and refinery downtime in Pembroke, Wales, due to a July fire."
- more -
- 2 -
Net income from continuing operations for the third quarter of 1994
included a special charge of $20 million by an insurance subsidiary related
to property damage from the fire at the Pembroke refinery, as well as a
special gain of $23 million from the sale of an interest in a downstream joint
venture in Sweden. Results for the nine months of 1994 also included net
special charges of $119 million relating to staff reductions and write-down
of certain assets being offered for sale in the company's program to
consolidate activities and sell non-core assets. Nine months and third quarter
of 1993 included special charges of $235 million related to staff reductions,
write-down of assets and provisions for financial reserves, partly offset by
$152 million of net deferred tax benefits principally arising from reduced tax
rates in the United Kingdom. Net income from continuing operations for the
third quarter and nine months of 1994 included $8 million and $87 million,
respectively, of net tax benefits realizable through the sale of an interest
in a subsidiary. Similar benefits of $145 million were recognized in 1993.
Net income for the nine months of 1994 included a second quarter charge
of $87 million for discontinued operations relating to the completion of the
first phase of a transaction to sell substantially all of Texaco's worldwide
chemical business. Comparatively, a charge of $164 million was recorded in
the third quarter of 1993, reflecting the initial projected effects of
these sales. Of the previously mentioned tax benefits on the sale of an
interest in a subsidiary, $29 million and $145 million for the first nine
months 1994 and 1993, respectively, were realizable due to the taxable gain
on the sale of the chemical operations. Negotiations for the second phase
of this sale, consisting of the lubricant additives business, are continuing.
Capital and exploratory expenditures for continuing operations, including
equity in such expenditures of affiliates, were $1,788 million for the first
nine months of 1994, as compared to $1,887 million for the same period in 1993.
Expenditures for the third quarter of 1994 amounted to $557 million versus
$732 million for the same quarter in 1993.
"Third quarter operating performance and financial results reflect the
program for value growth and competitive improvement," DeCrane added. "Solid
increases in international production, the initial benefits of reduced layers
of supervision and a more focused exploration and development program all
contributed to the improvement."
- more -
- 3 -
ANALYSIS OF FUNCTIONAL NET INCOME
OPERATING EARNINGS FROM CONTINUING OPERATIONS
PETROLEUM AND NATURAL GAS
UNITED STATES
Third Quarter Nine Months
------------- ---------------
Exploration & Production (Millions): 1994 1993 1994 1993
___________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 127 $ 138 $ 323 $ 434
Special charges - (38) (24) (38)
----- ----- ----- -----
Total operating earnings $ 127 $ 100 $ 299 $ 396
___________________________________________________________________________________
Lower natural gas prices of $.33 per MCF in the 1994 third quarter
adversely impacted comparative earnings. These lower natural gas prices more
than offset the benefits from higher crude oil prices of $1.27 per barrel for
the quarter. In spite of the gradually improving crude oil prices during 1994,
nine months earnings were adversely impacted by the depressed prices early in
this year, which resulted in comparatively lower crude oil prices of $1.80
per barrel.
The company's results in 1994 benefitted from further reductions in
operating expenses and added production from successful exploration and
development programs.
Special charges for 1994 provide for the estimated cost of announced
employee separations. Special charges in 1993 included a deferred tax charge
of $32 million due to the U.S. tax rate increase to 35 percent effective
January 1, 1993, coupled with charges relating to staff reductions.
- more -
- 4 -
Third Quarter Nine Months
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Manufacturing & Marketing (Millions): 1994 1993 1994 1993
___________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 92 $ 97 $ 209 $ 206
Special charges - (91) (24) (91)
----- ----- ----- -----
Total operating earnings $ 92 $ 6 $ 185 $ 115
___________________________________________________________________________________
Results for the comparative third quarter and nine month periods were
essentially unchanged. Both periods benefitted from higher gasoline sales
following the March 1994 successful introduction of Texaco's CleanSystem3
gasolines. In the western half of the U.S., third quarter 1994 earnings
reflect improved performance at refineries partly offset by higher refinery
feedstock costs. For the nine months, earnings in the western U.S. benefitted
from both improved refinery performance plus lower average feedstock costs
occurring in the first half of the year. These improvements were generally
offset by decreased refinery margins in the East and Gulf coasts, particularly
in the third quarter, reflecting feedstock costs that could not be fully
recovered in the marketplace.
Special charges for 1994 relate to the adjustment to fair market value of
certain facilities to be offered for sale and the estimated cost of employee
separations. Results for 1993 included special charges for staff reductions,
environmental reserves and the U.S. tax rate increase.
INTERNATIONAL
Third Quarter Nine Months
------------- ---------------
Exploration & Production (Millions): 1994 1993 1994 1993
___________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 83 $ 15 $ 162 $ 176
Special charges and credits - 110 (16) 110
----- ----- ----- -----
Total operating earnings $ 83 $ 125 $ 146 $ 286
___________________________________________________________________________________
Results for the third quarter 1994 improved substantially over 1993
reflecting a combination of increased international production of both crude
oil and natural gas mainly in the U.K. sector of the North Sea, lower
exploratory expenses, and somewhat higher crude prices. For the comparative
first nine months, earnings benefitted also from higher production, mainly in
the North Sea and in Indonesia. However, generally lower crude oil prices
prevailing in the first half of 1994 more than offset the benefit of
increased production.
- more -
- 5 -
The 1994 third quarter and nine months included non-cash charges of $7
million and $18 million, respectively, relating to the currency exchange
impacts of the Pound Sterling on deferred income taxes. For 1993, such
currency exchange impacts resulted in a charge of $2 million for the third
quarter and a $4 million benefit for the nine months.
Special charges for 1994 related to the adjustment to fair market value
of certain facilities being offered for sale and the estimated cost of employee
separations. The third quarter of 1993 included a benefit of $169 million
relating to changes in the U.K. Petroleum Revenue Tax associated with the
taxability of certain items, as well as a tax rate reduction from 75 percent
to 50 percent. Special charges in 1993 related to staff reductions and the
write-down of the carrying value of certain assets, principally in the North
Sea, brought about by changes in the Petroleum Revenue Tax laws.
Third Quarter Nine Months
------------- ---------------
Manufacturing & Marketing (Millions): 1994 1993 1994 1993
___________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 75 $ 103 $ 267 $ 344
Special charges and credits 23 (30) (15) (30)
----- ----- ----- -----
Total operating earnings $ 98 $ 73 $ 252 $ 314
___________________________________________________________________________________
Results for both the third quarter and nine months of 1994 versus 1993
reflect the decline in marketing margins in Europe, as well as lower refining
margins and unfavorable currency exchange effects in the Caltex operating
areas. Also, earnings were comparatively lower due to downtime resulting from
a fire at the Pembroke refinery. Partly offsetting these decreases were higher
marketing margins and sales volumes in Latin America, mainly Brazil.
The 1994 third quarter and nine months included non-cash charges of $8
million and $20 million, respectively, relating to the currency exchange
impacts of the Pound Sterling on deferred income taxes.
The third quarter of 1994 included a special gain of $23 million related
to the sale of an interest in a downstream joint venture in Sweden. In
addition to the gain in Sweden, the nine months of 1994 included special
charges related to the estimated cost of employee separations, and the
adjustment to fair market value of certain properties being offered for sale.
The third quarter and nine months of 1993 included special charges related
to staff reductions and the write-down in the carrying values of certain assets.
- more -
- 6 -
NONPETROLEUM
Third Quarter Nine Months
------------- ---------------
(Millions): 1994 1993 1994 1993
___________________________________________________________________________________
Results from continuing operations
before special items $ (6) $ (3) $ (13) $ (8)
Special charges (20) (4) (20) (4)
----- ----- ----- -----
Total operating earnings $ (26) $ (7) $ (33) $ (12)
____________________________________________________________________________________
Net income from continuing operations for the third quarter of 1994
included a special charge of $20 million by an insurance subsidiary related to
property damage from the fire at the Pembroke refinery.
CORPORATE/NONOPERATING RESULTS FROM CONTINUING OPERATIONS
Third Quarter Nine Months
------------- ---------------
(Millions): 1994 1993 1994 1993
___________________________________________________________________________________
Results from continuing operations
before special items $(101) $ (95) $(321) $(304)
Special charges and credits - (30) (17) (30)
Tax benefits on asset sale 8 145 87 145
----- ----- ----- -----
Total corporate/nonoperating $ (93) $ 20 $(251) $(189)
__________________________________________________________________________________
Results for the third quarter and nine months were principally impacted by
reduced capitalization of interest expense due to project completions, which
was partially offset by lower corporate overhead due to the company's ongoing
expense reduction efforts.
The 1994 results included $87 million of tax benefits realizable through
the sale of an interest in a subsidiary of which $8 million was realized in
the third quarter. In addition, $17 million of charges related to the
estimated cost of employee separations were included in the nine month results.
The third quarter and nine months 1993 included net tax benefits realizable
through the sale of an interest in a subsidiary of $145 million. Special
charges and credits in 1993 related mainly to staff reductions.
CAPITAL AND EXPLORATORY EXPENDITURES
International upstream capital and exploratory expenditures declined for
the comparative nine months and third quarter periods reflecting lower
expenditures in the U.K. North Sea, where successful project completions have
increased production of liquids and natural gas. Partly offsetting this decline
for the comparative nine months were higher drilling and development activities
in the United States, which began in the third quarter of 1993.
- more -
- 7 -
Downstream international expenditures for the first nine months of 1994
increased as compared to the same period of 1993 reflecting investments by
Texaco's affiliate, Caltex, in refinery construction and upgrade projects in
Thailand and Singapore and increased marketing expenditures, as well as ongoing
refinery upgrades in Panama and increased marketing expenditures in selected
European and Latin American countries. These increases were partially offset
by lower expenditures in the U.S. due to completion of refinery upgrade
projects underway in 1993 by both Texaco and its affiliate, Star Enterprise,
and lower marketing investments.
- xxx -
NOTE TO EDITORS: Tables for the third quarter and nine months are attached.
CONTACTS: Dave Dickson 914-253-4128
J. Michael Trevino 914-253-4175
Jim Reisler 914-253-4389
- 8 -
Third Quarter Nine Months
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
FUNCTIONAL NET INCOME ($000,000)
Operating Earnings (Losses) from
Continuing Operations (a)
Petroleum and natural gas
Exploration and production
United States $ 127 $ 100 $ 299 $ 396
International 83 125 146 286
----- ----- ----- -----
Total 210 225 445 682
----- ----- ----- -----
Manufacturing, marketing and
distribution
United States 92 6 185 115
International 98 73 252 314
----- ----- ----- -----
Total 190 79 437 429
----- ----- ----- -----
Total petroleum and natural gas 400 304 882 1,111
Nonpetroleum (26) (7) (33) (12)
----- ----- ----- -----
Total operating earnings 374 297 849 1,099
Corporate/Nonoperating (a) (93) 20 (251) (189)
----- ----- ----- -----
Net Income from continuing operations 281 317 598 910
Discontinued chemical operations
Loss from operations - (11) - (17)
Loss on disposal of business - (164) (87) (164)
----- ----- ----- -----
Total Net Income $ 281 $ 142 $ 511 $ 729
===== ===== ===== =====
Per common share (dollars):
Net income (loss):
Continuing operations $ .98 $1.13 $2.02 $3.22
Discontinued operations - (.68) (.34) (.70)
----- ----- ----- -----
Total net income $ .98 $ .45 $1.68 $2.52
===== ===== ===== =====
Average number of common shares
outstanding (000,000) 259.1 259.0 259.2 258.9
(a) Results include special charges and credits
- 9 -
Third Quarter Nine Months
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
OTHER FINANCIAL DATA ($000,000)
Revenues from continuing operations $8,960 $8,490 $24,394 $25,496
Total assets as of September 30 (b) $25,500 $26,131
Stockholders' equity as of September 30 (b) $ 9,839 $10,133
Total debt as of September 30 (b) $ 6,500 $ 6,672
Capital and exploratory expenditures
Texaco Inc. and subsidiary companies
Exploration and production
United States $ 148 $ 216 $ 598 $ 516
International 111 212 376 590
---- ---- ---- -----
Total 259 428 974 1,106
---- ---- ---- -----
Manufacturing, marketing and
distribution
United States 64 102 166 232
International 60 61 181 133
---- ---- ----- -----
Total 124 163 347 365
---- ---- ----- -----
Other 6 10 20 26
---- ---- ----- -----
Total Texaco Inc. and
subsidiaries 389 601 1,341 1,497
---- ---- ------ -----
Equity in affiliates
United States 45 34 96 111
International 123 97 351 279
---- ---- ----- -----
Total equity in affiliates 168 131 447 390
---- ---- ----- -----
Total continuing
operations 557 732 1,788 1,887
Discontinued chemical operations 1 6 21 54
---- ---- ----- -----
Total $ 558 $ 738 $ 1,809 $ 1,941
==== ==== ===== =====
Dividends paid to common
stockholders $ 207 $ 207 $ 622 $ 621
Dividends per common share (dollars) $ .80 $ .80 $ 2.40 $ 2.40
Dividend requirements for preferred
stockholders $ 27 $ 26 $ 76 $ 77
(b) Preliminary
- 10 -
Third Quarter Nine Months
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
OPERATING DATA - INCLUDING INTERESTS
IN AFFILIATES
Net production of crude oil and
natural gas liquids (000 BPD)
United States 407 427 408 426
Other Western Hemisphere 21 21 20 21
Europe 126 82 116 76
Other Eastern Hemisphere 232 198 234 199
----- ----- ----- -----
Total 786 728 778 722
Net production of natural gas -
available for sale (000 MCFPD)
United States 1,720 1,716 1,728 1,730
International 294 218 301 222
----- ----- ----- -----
Total 2,014 1,934 2,029 1,952
Natural gas sales (000 MCFPD)
United States 3,156 2,740 3,083 2,755
International 308 224 317 234
----- ----- ----- -----
Total 3,464 2,964 3,400 2,989
Natural gas liquids sales
(including purchased LPGs) (000 BPD)
United States 240 191 211 189
International 93 63 70 51
----- ----- ----- -----
Total 333 254 281 240
Refinery input (000 BPD)
United States 704 633 661 661
Other Western Hemisphere 53 45 47 52
Europe 188 341 279 328
Other Eastern Hemisphere 447 429 456 429
----- ----- ----- -----
Total 1,392 1,448 1,443 1,470
Refined product sales (000 BPD)
United States 908 828 876 821
Other Western Hemisphere 318 282 308 285
Europe 411 502 445 482
Other Eastern Hemisphere 707 671 702 711
----- ----- ----- -----
Total 2,344 2,283 2,331 2,299
