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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 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):
January 23, 1995
_____________________________
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 January 23, 1995, the Registrant issued an Earnings Press
Release entitled "Texaco Reports Results For The Fourth Quarter
and Year 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 January 23,
1995, entitled "Texaco Reports Results For The Fourth
Quarter and Year 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: January 24, 1995
----------------
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 January 23, 1995, entitled "Texaco Reports Results
For The Fourth Quarter and Year 1994" filed as Exhibit 99.1 to this Form 8-K:
1. The first graph is located within the eighth 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 years 1993 and 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
years 1993 and 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
Fourth Quarter 1994 - $14.45 per barrel
The following summary information is also depicted at the bottom of
the graph:
Year 1993 - $14.26 per barrel
Year 1994 - $13.43 per barrel
2. The second graph is also located within the eighth 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 years 1993 and 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 years 1993 and
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
Fourth Quarter 1994 - $1.80 per MCF
The following summary information is also depicted at the bottom of
the graph:
Year 1993 - $2.19 per MCF
Year 1994 - $1.99 per MCF
FDeb:ddw
(23JAN1)
EXHIBIT 99.1
TEXACO REPORTS RESULTS
----------------------
FOR THE FOURTH QUARTER AND YEAR 1994
------------------------------------
FOR IMMEDIATE RELEASE: MONDAY, JANUARY 23, 1995.
- ------------------------------------------------
WHITE PLAINS, N.Y., Jan. 23 - Texaco announced today that consolidated
worldwide net income from continuing operations for the fourth quarter of
1994 was $381 million, or $1.42 per share, as compared with $349 million,
or $1.25 per share, for the fourth quarter of 1993. Net income from
continuing operations for the year 1994 was $979 million, or $3.43 per share,
as compared with $1,259 million, or $4.47 per share, for the year 1993.
Fourth Quarter Year
-------------- ----------------
Texaco Inc. (Millions): 1994 1993 1994 1993
______________________________________________________________________________________
Net income from continuing operations before
special items $ 288 $ 284 $ 915 $1,132
Net special charges (9) - (125) (83)
Tax benefits on asset sales 102 65 189 210
----- ----- ----- ------
Net income from continuing operations 381 349 979 1,259
Discontinued chemical operations:
(Loss) from operations - - - (17)
Gain (loss) on disposal of business 18 (10) (69) (174)
----- ----- ----- ------
Net income $ 399 $ 339 $ 910 $1,068
_______________________________________________________________________________________
In commenting on 1994's results Alfred C. DeCrane, Jr., Texaco's Chairman
of the Board and Chief Executive Officer stated, "Fourth quarter earnings
reflect some early results of the company's focused programs to emphasize
core activities and business growth opportunities together with the sales
of non-core assets, the reduction of overhead and the delayering of the
organization. The increases in crude oil and natural gas production,
particularly in the North Sea, combined with overall higher crude oil prices
and particularly strong sales and margins in Latin America made strong
contributions to our enhanced performance. However, these benefits were
partially offset by depressed downstream margins in the U.S., Europe and the
Far East, and lower U.S. natural gas prices."
- more -
- 2 -
Net income from continuing operations for the fourth quarter of 1994 of
$381 million included a special charge of $9 million related to property
damage from a fire at the Panama refinery.
Net income from continuing operations for the full year 1994 of $979
million also included a special gain of $23 million from the sale of an
interest in a downstream joint venture in Sweden, as well as special charges
of $20 million related to property damage from a fire at the Pembroke, Wales,
refinery and $119 million relating to staff reductions and write-downs of
certain assets being offered for sale as part of the company's business plan
for worldwide growth. Net income from continuing operations for the year
1993 of $1,259 million included special charges of $235 million related to
staff reductions, write-downs of assets and provisions for financial reserves,
partly offset by $152 million of net deferred tax benefits principally
arising from tax law and rate changes in the United Kingdom.
Results from continuing operations also included tax benefits of $102
million for the fourth quarter and $189 million for the full year 1994,
realizable through the sales of interests in a subsidiary. Similar tax
benefits for the year 1993 were $210 million. These benefits are realizable
due to taxable gains on completed and announced sales of non-core assets,
including the sale of discontinued chemical operations.
A net loss of $69 million, which included a fourth quarter benefit of
$18 million for a change in tax estimates, was reflected in 1994 for
discontinued operations relating to the sale of substantially all of Texaco's
worldwide chemical business. Comparatively, a net loss of $174 million on
this disposal was recorded in 1993 reflecting the initial projected effects
of these sales. The first phase of the chemical sales has been completed,
while negotiations for the sale of the lubricant additives business are
continuing.
Capital and exploratory expenditures for continuing operations, including
equity in such expenditures of affiliates, were $2,741 million for the year
1994, as compared to $2,892 million for the prior year. Expenditures for the
fourth quarter of 1994 amounted to $953 million versus $1,005 million for the
same quarter in 1993.
- more -
- 3 -
ANALYSIS OF FUNCTIONAL NET INCOME
OPERATING EARNINGS FROM CONTINUING OPERATIONS
PETROLEUM AND NATURAL GAS
UNITED STATES
Fourth Quarter Year
-------------- ----------------
Exploration & Production (Millions): 1994 1993 1994 1993
______________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 115 $ 114 $ 438 $ 548
Special charges - - (24) (38)
----- ----- ----- -----
Total operating earnings $ 115 $ 114 $ 414 $ 510
______________________________________________________________________________________
Comparative fourth quarter results reflect the impact of crude oil prices
that averaged $2.09 per barrel higher than the 1993 levels. This improvement
was offset by the downward slide in natural gas prices which were $.54 per
MCF, or 23 percent lower than the same quarter in 1993. The fourth quarter
and year benefitted from lower operating and overhead expenses, partly offset
by higher exploratory expenses in the fourth quarter. Results for the year 1994
declined from year 1993 due to the combined impact of lower prices for natural
gas, as well as generally lower crude oil prices prevailing during the first
half of the year.
Fourth quarter results include a net gain of $8 million resulting from
various asset sales less certain asset write-downs.
The company's results in 1994 benefitted from its exploration and
development program that has successfully added production which is largely
offsetting the impact of normal production declines from maturing fields.
- more -
- 4 -
Special charges for 1994 provide for the estimated cost of employee
separations. Special charges in 1993 included a deferred tax charge of
$32 million due to the U.S. tax rate increase, coupled with charges relating
to staff reductions.
Fourth Quarter Year
-------------- ----------------
Manufacturing & Marketing (Millions): 1994 1993 1994 1993
______________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 72 $ 100 $ 281 $ 306
Special charges - - (24) (91)
----- ----- ----- -----
Total operating earnings $ 72 $ 100 $ 257 $ 215
______________________________________________________________________________________
Earnings for both the fourth quarter and year 1994 reflect the impact of
lower product margins particularly in the fourth quarter. For the year,
margins were especially soft on the East and Gulf coasts. These adverse
factors more than offset the fourth quarter benefits from improved refinery
performance. Also, results for the year benefitted from increased sales of
Texaco-branded gasolines.
Special charges for 1994 relate to the adjustment to fair market value
of certain facilities offered for sale and the estimated cost of employee
separations. Special charges for 1993 included charges for staff reductions,
environmental reserves and the U.S. tax rate increase.
INTERNATIONAL
Fourth Quarter Year
-------------- ----------------
Exploration & Production (Millions): 1994 1993 1994 1993
______________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 107 $ 36 $ 269 $ 212
Net special (charges) credits - - (16) 110
----- ----- ----- -----
Total operating earnings $ 107 $ 36 $ 253 $ 322
______________________________________________________________________________________
Results for the fourth quarter and year 1994 reflect increased production
of both crude oil and natural gas particularly in the North Sea, Australia,
Indonesia and the Partitioned Neutral Zone between Kuwait and Saudi Arabia.
Lower crude oil prices prevailing earlier in the year partly offset the
benefits of increased production throughout 1994. For the fourth quarter,
earnings also reflected higher crude oil prices as well as a $10 million gain
on the sale of an interest in a field in the U.K. North Sea.
The year 1994 included non-cash charges of $15 million, as compared to
$8 million of 1993 benefits, relating to the currency exchange impacts of the
Pound Sterling on deferred income taxes.
- more -
- 5 -
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. Special charges for the year 1993 included a third
quarter benefit of $169 million related to changes in the U.K. Petroleum
Revenue Tax associated with the taxability of certain items, as well as a tax
rate reduction. Also, included in 1993 were special charges 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.
Fourth Quarter Year
-------------- ----------------
Manufacturing & Marketing (Millions): 1994 1993 1994 1993
______________________________________________________________________________________
Operating earnings from continuing
operations before special items $ 108 $ 120 $ 375 $ 464
Net special charges - - (15) (30)
----- ----- ----- -----
Total operating earnings $ 108 $ 120 $ 360 $ 434
______________________________________________________________________________________
The fourth quarter and year 1994 results reflect lower product margins
in Europe and in the Caltex operating areas, as well as lower earnings
resulting from downtime caused by the Pembroke and Panama fires. Also,
unfavorable currency exchange effects occurring earlier in 1994 in the Caltex
operating areas impacted earnings for the year. These impacts were partially
offset by higher margins and product volumes in Latin America.
Results included inventory valuation benefits for the Caltex operating
areas of $20 million for the fourth quarter and $16 million for the year 1994,
which resulted primarily from higher crude oil prices in the latter part of
1994. In 1993, market values of inventories were lower than their carrying
values which resulted in charges of $36 million and $51 million for the fourth
quarter and the year, respectively.
The year 1994 included non-cash charges of $16 million, as compared to
$4 million in 1993 benefits, relating to the currency exchange impacts of the
Pound Sterling on deferred income taxes.
The year 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, partly offset by a special gain of $23
million related to the sale of an interest in a downstream joint venture in
Sweden. The year 1993 included special charges related to staff reductions
and write-downs of the carrying values of certain assets.
- more -
- 6 -
NONPETROLEUM
Fourth Quarter Year
-------------- ----------------
(Millions): 1994 1993 1994 1993
______________________________________________________________________________________
Results from continuing operations
before special items $ 10 $ (1) $ (3) $ (9)
Special charges (9) - (29) (4)
----- ----- ----- -----
Total operating earnings $ 1 $ (1) $ (32) $ (13)
______________________________________________________________________________________
Fourth quarter 1994 earnings included increased gasification licensing
revenues. Results for 1994 included special charges of $29 million by an
insurance subsidiary related to property damage from the fires occurring at
the Pembroke, Wales, refinery in the third quarter and the Panama refinery
in the fourth quarter.
CORPORATE/NONOPERATING RESULTS FROM CONTINUING OPERATIONS
Fourth Quarter Year
-------------- ----------------
(Millions): 1994 1993 1994 1993
______________________________________________________________________________________
Results from continuing operations
before special items $(124) $ (85) $(445) $(389)
Net special charges - - (17) (30)
Tax benefits on asset sales 102 65 189 210
----- ----- ----- -----
Total corporate/nonoperating $ (22) $ (20) $(273) $(209)
______________________________________________________________________________________
Results for the fourth quarter and year 1994 were principally impacted
by the effect of reduced capitalization of interest expense due to project
completions, lower gains on sales of securities, and unfavorable U.S. tax
effects on interest expense. Partially offsetting these impacts was lower
corporate overhead for 1994, flowing from the company's continuing expense
reduction efforts.
Special charges for 1994 and 1993 were principally related to staff
reductions.
Results for the fourth quarter and year 1994 included $102 million and
$189 million, respectively, of tax benefits realizable through sales of
interests in a subsidiary. Similar benefits of $65 million and $210 million
were recognized for the 1993 fourth quarter and year, respectively.
- more -
- 7 -
CAPITAL AND EXPLORATORY EXPENDITURES
International upstream expenditures of $795 million for 1994 were
somewhat reduced from the prior year reflecting successful project completions
in the U.K. North Sea which have increased production of liquids and natural
gas. These decreases were partially offset by increased expenditures,
principally in the fourth quarter, on new projects in the North Sea and
offshore Nigeria, as well as ongoing development in China and Australia. In
the United States, expenditures for the year were $790 million, essentially
unchanged from the prior year, as a result of strong drilling activity during
the first half of 1994 with particular emphasis on developmental gas projects.
Worldwide downstream expenditures of $1,116 million in 1994 also declined
as compared to 1993 due to project completions. Lower expenditures for
refinery upgrade projects in the United States were partially offset by higher
international expenditures for the full year. Texaco's affiliate, Caltex,
reflected higher investments for refinery construction and upgrade projects
earlier this year, as well as higher marketing expenditures. Ongoing refinery
upgrading construction in Panama which began late in 1993, was largely offset
by lower marketing expenditures for service station construction and
rehabilitation in the U.K., principally during the fourth quarter.
- xxx -
NOTE TO EDITORS: Tables for the fourth quarter and year are attached.
CONTACTS: David Dickson 914-253-4128
J. Michael Trevino 914-253-4175
Jim Reisler 914-253-4389
Cynthia Michener 914-253-4743
- 8 -
Fourth Quarter Year
-------------- ----------------
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 $ 115 $ 114 $ 414 $ 510
International 107 36 253 322
----- ----- ------ ------
Total 222 150 667 832
----- ----- ------ ------
Manufacturing, marketing and
distribution
United States 72 100 257 215
International 108 120 360 434
----- ----- ------ ------
Total 180 220 617 649
----- ----- ------ ------
Total petroleum and natural gas 402 370 1,284 1,481
Nonpetroleum 1 (1) (32) (13)
----- ----- ------ ------
Total operating earnings 403 369 1,252 1,468
Corporate/Nonoperating (a) (22) (20) (273) (209)
----- ----- ------ ------
Net Income from continuing operations 381 349 979 1,259
Discontinued chemical operations
(Loss) from operations - - - (17)
Gain (loss) on disposal of business 18 (10) (69) (174)
----- ----- ------ ------
Total net income $ 399 $ 339 $ 910 $1,068
===== ===== ====== ======
Per common share (dollars):
Net income (loss):
Continuing operations $1.42 $1.25 $ 3.43 $ 4.47
Discontinued operations .07 (.04) (.26) (.73)
----- ----- ------ ------
Total net income $1.49 $1.21 $ 3.17 $ 3.74
===== ===== ====== ======
Average number of common shares
outstanding (000,000) 257.7 259.1 258.8 258.9
(a) Results include special items
- 9 -
Fourth Quarter Year
-------------- ----------------
1994 1993 1994 1993
---- ---- ---- ----
OTHER FINANCIAL DATA ($000,000)
Revenues from continuing operations $ 8,959 $ 8,575 $33,353 $34,071
Total assets as of December 31 (b) $25,600 $26,626
Stockholders' equity as of December 31 (b) $ 9,750 $10,279
Total debt as of December 31 (b) $ 6,500 $ 6,826
Capital and exploratory expenditures
Texaco Inc. and subsidiary companies
Exploration and production
United States $ 191 $ 280 $ 789 $ 796
International 269 165 645 755
------- ------- ------- -------
Total 460 445 1,434 1,551
------- ------- ------- -------
Manufacturing, marketing and
distribution
United States 105 115 271 347
International 111 158 292 291
------- ------- ------- -------
Total 216 273 563 638
------- ------- ------- -------
Other 17 17 37 43
------- ------- ------- -------
Total Texaco Inc. and
subsidiaries 693 735 2,034 2,232
------- ------- ------- -------
Equity in affiliates
United States 61 46 157 157
International 199 224 550 503
------- ------- ------- -------
Total equity in affiliates 260 270 707 660
------- ------- ------- -------
Total continuing
operations 953 1,005 2,741 2,892
Discontinued chemical operations 1 30 22 84
------- ------- ------- -------
Total $ 954 $ 1,035 $ 2,763 $ 2,976
======= ======= ======= =======
Dividends paid to common
stockholders $ 208 $ 207 $ 830 $ 828
Dividends per common share (dollars) $ .80 $ .80 $ 3.20 $ 3.20
Dividend requirements for preferred
stockholders $ 15 $ 24 $ 91 $ 101
(b) Preliminary
- 10 -
Fourth Quarter Year
-------------- ----------------
1994 1993 1994 1993
____ ____ ____ ____
OPERATING DATA - INCLUDING INTERESTS
IN AFFILIATES
Net production of crude oil and
natural gas liquids (000 BPD)
United States 404 417 407 423
Other Western Hemisphere 20 18 20 20
Europe 135 94 120 81
Other Eastern Hemisphere 241 217 236 204
----- ----- ----- -----
Total 800 746 783 728
Net production of natural gas -
available for sale (000 MCFPD)
United States 1,680 1,726 1,716 1,729
International 371 287 319 238
----- ----- ----- -----
Total 2,051 2,013 2,035 1,967
Natural gas sales (000 MCFPD)
United States 3,120 2,677 3,092 2,735
International 388 315 337 255
----- ----- ----- -----
Total 3,508 2,992 3,429 2,990
Natural gas liquids sales
(including purchased LPGs) (000 BPD)
United States 241 194 218 190
International 81 52 73 51
----- ----- ----- -----
Total 322 246 291 241
Refinery input (000 BPD)
United States 707 652 673 658
Other Western Hemisphere 18 45 40 50
Europe 303 335 285 330
Other Eastern Hemisphere 454 440 455 432
----- ----- ----- -----
Total 1,482 1,472 1,453 1,470
Refined product sales (000 BPD)
United States 903 859 882 830
Other Western Hemisphere 322 307 312 291
Europe 455 510 447 489
Other Eastern Hemisphere 734 764 711 724
----- ----- ----- -----
Total 2,414 2,440 2,352 2,334
