===============================================================================
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):
July 25, 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 July 25, 1995, the Registrant issued an Earnings Press
Release entitled "Texaco Reports Results for the Second Quarter
and First Half 1995," 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 July 25, 1995,
entitled "Texaco Reports Results for the Second Quarter
and First Half 1995."
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: July 25,1995
------------
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 July 25, 1995, entitled "Texaco
Reports Results for the Second Quarter and First Half 1995" 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. Crude
Price Per Quarter" and is shown in dollars per barrel by
quarter for the year 1994 and first two quarters of 1995. 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 1994 and first two quarters of 1995. The plot
points are as follows:
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
First Quarter 1995 - $14.85 per barrel
Second Quarter 1995 - $15.85 per barrel
The following summary information is also depicted at the bottom of
the graph:
First Half 1994 - $12.24 per barrel
First Half 1995 - $15.35 per barrel
2. The second graph is located within the ninth 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 1994 and first two quarters of 1995. 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 1994 and first two quarters of 1995. The plot points are
as follows:
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
First Quarter 1995 - $1.68 per MCF
Second Quarter 1995 - $1.70 per MCF
The following summary information is also depicted at the bottom of
the graph:
First Half 1994 - $2.16 per MCF
First Half 1995 - $1.69 per MCF
FDeb:bbm
(8kjul25
EXHIBIT 99.1
TEXACO REPORTS RESULTS
----------------------
FOR THE SECOND QUARTER AND THE FIRST HALF 1995
----------------------------------------------
FOR IMMEDIATE RELEASE: TUESDAY, JULY 25, 1995.
- ------------------------------------------
WHITE PLAINS, N.Y., July 25 - Texaco announced today that
consolidated worldwide net income from continuing operations for the
second quarter of 1995 was $262 million, or $0.95 per share, as compared
with $115 million, or $0.35 per share, for the second quarter of 1994.
For the first half of 1995, net income from continuing operations was $563
million, or $2.05 per share, as compared with $317 million, or $1.04 per
share, for the first half of 1994. Net income for both years includes
special items.
Second Quarter First Half
---------------- ----------------
Texaco Inc. (Millions): 1995 1994 1995 1994
_______________________________________________________________________
Net income from continuing
operations before
special items $262 $155 $475 $357
Gains from asset sales - - 88 -
Tax benefits on asset sale - 79 - 79
Special charges - (119) - (119)
---- ---- ---- ----
Total net income from
continuing operations 262 115 563 317
Loss on disposal of
discontinued chemical
operations - (87) - (87)
---- ---- ---- ----
Total net income $262 $ 28 $563 $230
________________________________________________________________________
In commenting on 1995's performance, Alfred C. DeCrane, Jr., Texaco's
Chairman of the Board and Chief Executive Officer, stated, "Improved
operating performance, resulting from continued progress on key
initiatives of our plan for growth, supplemented by increased worldwide
crude oil prices were the main contributors to higher second quarter and
first half 1995 earnings.
"International production of oil and gas grew from both existing and
new fields and continued improvements in our Latin American marketing
businesses added to profits. In addition, operating and overhead expenses
were reduced, especially in the U.S., as a result of sales of non-core
producing assets, expense containment programs and focused technology
applications.
- more -
- 2 -
"These benefits, however, were dampened by lower U.S. natural gas
prices. Also, while refining margins in the U.S. and Europe improved
somewhat in the second quarter, margins were still weaker on a six-month
comparative basis."
First half net income from continuing operations for 1995 included
first quarter gains of $88 million, principally relating to the sale of
land by a Caltex Petroleum Corporation affiliate in Japan and to sales of
non-core U.S. producing properties. The 1994 six months results from
continuing operations included $79 million in tax benefits realizable
through the sale of an interest in a subsidiary, as well as special
charges of $119 million related to staff reductions and write-downs of
assets being offered for sale.
Net income for 1994 also reflected a second quarter charge of $87
million, or $0.34 per share, for discontinued operations relating to the
sale of substantially all of Texaco's chemical business.
OPERATING EARNINGS FROM CONTINUING OPERATIONS
PETROLEUM AND NATURAL GAS
UNITED STATES
Second Quarter First Half
---------------- ----------------
Exploration & Production (Millions): 1995 1994 1995 1994
_____________________________________________________________________________
Operating earnings from
continuing operations
before special items $170 $121 $305 $196
Gains from asset sales - - 8 -
Special charges - (24) - (24)
---- ---- ---- ----
Total operating earnings $170 $ 97 $313 $172
_____________________________________________________________________________
The strong growth in earnings for both the comparative second quarter
and first half of 1995 resulted from increased crude oil prices, which
averaged $2.40 and $3.11 per barrel higher for the respective periods.
These prices reflect, in part, a strong regional demand for heavy
Californian crudes.
Net income in 1995 also benefited from lower operating expenses.
These expense reductions reflect the effects of technology applications
and reduced overhead, including reductions associated with the sales of
non-core producing properties.
- more -
- 3 -
Partly offsetting these benefits were comparatively lower natural gas
prices. Second quarter 1995 average natural gas prices were $.32 per MCF
lower than 1994, while prices for the first half of 1995 were $.47 per MCF
lower than 1994.
Excluding the divested non-core assets, crude oil and natural gas
production in 1995 was essentially equal to prior year production levels.
This reflects success in adding new production, most notably along the
Louisiana Gulf Coast.
Results for 1995 included a first quarter net gain of $8 million from
non-core producing property sales, after certain write-downs of properties
being held for sale and reserves for environmental remediation on these
properties which totaled $112 million. Second quarter 1994 results
included charges relating to the cost associated with employee
separations.
Second Quarter First Half
---------------- ----------------
Manufacturing & Marketing (Millions): 1995 1994 1995 1994
_________________________________________________________________________________
Operating earnings from
continuing operations
before special items $ 28 $ 39 $ 9 $117
Special charges - (24) - (24)
---- ---- ---- ----
Total operating earnings $ 28 $ 15 $ 9 $ 93
_________________________________________________________________________________
During the second quarter of 1995, earnings improved over the first
quarter, but were still below the level experienced in the second quarter
of 1994. Comparatively, second quarter 1995 versus 1994 margins on the
East and Gulf Coasts improved despite higher crude costs. These margins
reflect increased demand and temporary product supply tightening created
by the Brazilian Oil Workers strike, as well as lower industry-wide
refinery utilization rates during the latter part of the period. Margins
on the West Coast, however, were weaker due to higher crude oil costs and
a general oversupply of products caused partly by industry-wide refinery
utilization rates on the West Coast, which reached a five-year high in
1995.
Earnings for the first half of 1995 decreased as compared to the same
period in 1994. Continuing improvements in operating performance and
expenses did not overcome severely depressed industry-wide margins,
particularly through April. Compounding this situation were uncertainties
with regard to changing state requirements for reformulated gasolines
earlier in the year.
- more -
- 4 -
Results for the second quarter 1994 included charges relating to the
adjustment to fair market value of facilities being offered for sale and
the estimated cost of employee separations.
INTERNATIONAL
Second Quarter First Half
---------------- ----------------
Exploration & Production (Millions): 1995 1994 1995 1994
_________________________________________________________________________________
Operating earnings from
continuing operations
before special items $ 82 $ 34 $164 $ 79
Special charges - (16) - (16)
---- ---- ---- ----
Total operating earnings $ 82 $ 18 $164 $ 63
_________________________________________________________________________________
The profit improvements for the second quarter and first half 1995
reflect the growth in oil and gas production and increased crude oil
prices, which averaged nearly $3 per barrel higher than in 1994.
Production of crude oil and natural gas increased in the U.K. North
Sea, mainly from the Strathspey field. There also was higher crude oil
production in Australia from the offshore Roller and Skate fields, as well
as in the Partitioned Neutral Zone between Kuwait and Saudi Arabia
resulting from continuing field development programs. Production for the
second quarter 1995 was somewhat lessened by scheduled maintenance work on
facilities in the North Sea. Also, offshore China production was
suspended during most of the second quarter for scheduled maintenance and
to complete required work for the June 1995 start-up of two new fields,
which will nearly double current production rates.
Upstream results in 1995 include a second quarter non-cash benefit of
$7 million and a year-to-date non-cash charge of $6 million due to
currency exchange impacts associated with deferred income taxes in the
U.K. For 1994, these currency impacts resulted in a $11 million charge,
entirely in the second quarter.
Second quarter 1994 results included charges related to the
adjustment to fair market value of properties being offered for sale and
the estimated cost of employee separations.
Second Quarter First Half
---------------- ----------------
Manufacturing & Marketing (Millions): 1995 1994 1995 1994
_________________________________________________________________________________
Operating earnings from
continuing operations
before special items $ 79 $ 67 $180 $192
Gain from asset sale - - 80 -
Special charges - (38) - (38)
---- ---- ---- ----
Total operating earnings $ 79 $ 29 $260 $154
_________________________________________________________________________________
- more -
- 5 -
Comparative operating earnings reflect weak European refined product
margins, particularly in the U.K. Margins which began to decline in 1994,
due to the oversupply in the marketplace, have remained depressed in 1995.
Higher refined product sales volumes and margins in Latin America partly
offset the general weakness in European operations. Earnings in the
Caltex operating areas of the Pacific Rim benefited from improved margins
and higher sales volumes.
Downstream results in 1995 include a second quarter non-cash benefit
of $8 million and a year-to-date non-cash charge of $5 million due to
currency exchange impacts associated with deferred income taxes in the
U.K. For 1994, these currency impacts resulted in a $12 million charge,
entirely in the second quarter.
Results for the first half of 1995 included a first quarter net gain
principally relating to the sale of land by a Caltex affiliate in Japan.
In 1994, second quarter results included charges related to the estimated
cost of employee separations and the adjustment to fair market value of
certain properties being offered for sale.
NONPETROLEUM
Second Quarter First Half
---------------- ----------------
(Millions): 1995 1994 1995 1994
_________________________________________________________________________________
Total operating
earnings/(losses) $ 7 $(6) $11 $(7)
_________________________________________________________________________________
The 1995 nonpetroleum earnings reflect improved loss experience of
Heddington Insurance Limited, a subsidiary.
CORPORATE/NONOPERATING RESULTS FROM CONTINUING OPERATIONS
Second Quarter First Half
---------------- ----------------
(Millions): 1995 1994 1995 1994
_________________________________________________________________________________
Results from continuing
operations before
special items $(104) $(100) $(194) $(220)
Tax benefits on
asset sale - 79 - 79
Special charges - (17) - (17)
----- ----- ----- -----
Total corporate/nonoperating $(104) $ (38) $(194) $(158)
_________________________________________________________________________________
- more -
- 6 -
Results for 1995 include first quarter gains of $25 million,
principally from sales of equity securities held for investment by an
insurance subsidiary. Comparatively, results for the second quarter and
first half of 1995 benefited from higher interest income and reduced
overhead stemming from expense containment programs. Also, the second
quarter of 1994 results included a $7 million gain from the receipt of a
cash option payment relative to the sale of a manufacturing facility.
The second quarter 1994 results included tax benefits realizable
through the sale of an interest in a subsidiary, partly offset by charges
relating to the cost of employee separations.
CAPITAL AND EXPLORATORY EXPENDITURES
- ------------------------------------
Capital and exploratory expenditures for continuing operations,
including equity in such expenditures of affiliates, were $1,272 million
for the first half of 1995, as compared to $1,231 million for the same
period of 1994. Expenditures for the second quarter of 1995 amounted to
$759 million, versus $607 million for the second quarter of 1994.
Increased exploration and production expenditures in 1995 reflect the
development of the Captain field in the U.K. sector of the North Sea, as
well as the acquisition of the outstanding minority ownership in a
Canadian subsidiary. Partially offsetting these increases were lower
scheduled U.S. upstream expenditures in 1995, as compared to the higher
level of developmental gas drilling during the first quarter of 1994, and
also reflect efficiency improvements in the company's 1995 drilling
program.
Downstream expenditures by Texaco's affiliates decreased due to
completions of refinery upgrades in the Far East, partially offset by
selected investments in Europe.
- xxx -
CONTACTS: Dave Dickson 914-253-4128
Cynthia Michener 914-253-4743
Yorick Fonseca 914-253-7034
NOTE TO EDITORS: Tables for the second quarter and first half are
attached.
- 7 -
Second Quarter First Half
---------------- ----------------
1995 1994 1995 1994
FUNCTIONAL NET INCOME ($000,000)
Operating Earnings (Losses) from
Continuing Operations (a)
Petroleum and natural gas
Exploration and production
United States $170 $ 97 $313 $172
International 82 18 164 63
---- ---- ---- ----
Total 252 115 477 235
---- ---- ---- ----
Manufacturing, marketing and
distribution
United States 28 15 9 93
International 79 29 260 154
---- ---- ---- ----
Total 107 44 269 247
---- ---- ---- ----
Total petroleum
and natural gas 359 159 746 482
Nonpetroleum 7 (6) 11 (7)
---- ---- ---- ----
Total operating earnings 366 153 757 475
Corporate/Nonoperating (a) (104) (38) (194) (158)
---- ---- ---- ----
Net income from continuing operations 262 115 563 317
Loss on disposal of
discontinued chemical
operations - (87) - (87)
---- ---- ---- ----
Total net income $262 $ 28 $563 $230
==== ==== ==== ====
Per common share (dollars):
Net income (loss):
Continuing operations $.95 $.35 $2.05 $1.04
Discontinued operations - (.34) - (.34)
---- ---- ---- ----
Total net income $.95 $.01 $2.05 $ .70
==== ==== ==== ====
Average number of common
shares outstanding (000,000) 259.9 259.3 259.7 259.2
(a) Includes special gains and charges.
- 8 -
Second Quarter First Half
---------------- ----------------
1995 1994 1995 1994
OTHER FINANCIAL DATA ($000,000)
Revenues from continuing
operations $9,252 $8,000 $18,311 $15,434
Total assets as of June 30 (b) $25,100 $25,898
Stockholders' equity as of June 30 (b) $10,040 $10,159
Total debt as of June 30 (b) $ 6,200 $ 6,315
Capital and exploratory
expenditures
Texaco Inc. and subsidiary
companies
Exploration and production
United States $ 215 $ 180 $ 387 $ 450
International 269 142 384 265
------ ------ ------- -------
Total 484 322 771 715
------ ------ ------- -------
Manufacturing, marketing
and distribution
United States 59 52 102 102
International 76 68 118 121
------ ------ ------- -------
Total 135 120 220 223
------ ------ ------- -------
Other 7 8 12 14
------ ------ ------- -------
Total Texaco Inc. and
subsidiaries 626 450 1,003 952
------ ------ ------- -------
Equity in affiliates
United States 33 26 65 51
International 100 131 204 228
------ ------ ------- -------
Total equity in affiliates 133 157 269 279
------ ------ ------- -------
Total continuing
operations 759 607 1,272 1,231
Discontinued chemical operations - 1 1 20
------ ------ ------- -------
Total $ 759 $ 608 $ 1,273 $ 1,251
====== ====== ======= =======
Dividends paid to common
stockholders $ 208 $ 208 $ 416 $ 415
Dividends per common
share (dollars) $ .80 $ .80 $ 1.60 $ 1.60
Dividend requirements for
preferred stockholders $ 15 $ 25 $ 31 $ 49
b) Preliminary
- 9 -
Second Quarter First Half
---------------- ----------------
1995 1994 1995 1994
OPERATING DATA - INCLUDING INTERESTS
IN AFFILIATES
Net production of crude oil
and natural gas liquids
(000 BPD)
United States 382 408 385 408
Other Western Hemisphere 17 20 17 20
Europe 98 104 116 110
Other Eastern Hemisphere 236 231 237 235
----- ----- ----- -----
Total 733 763 755 773
Net production of natural
gas - available for
sale (000 MCFPD)
United States 1,604 1,777 1,632 1,732
International 374 281 403 306
----- ----- ----- -----
Total 1,978 2,058 2,035 2,038
Natural gas sales
(000 MCFPD)
United States 3,166 3,175 3,221 3,045
International 390 295 419 322
----- ----- ----- -----
Total 3,556 3,470 3,640 3,367
Natural gas liquids
sales (including
purchased LPGs)
(000 BPD)
United States 199 196 218 196
International 61 56 75 58
----- ----- ----- -----
Total 260 252 293 254
Refinery input (000 BPD)
United States 686 665 685 640
Other Western Hemisphere 41 37 32 44
Europe 226 322 270 325
Other Eastern Hemisphere 409 443 437 460
----- ----- ----- -----
Total 1,362 1,467 1,424 1,469
Refined product
sales (000 BPD)
United States 904 872 896 843
Other Western Hemisphere 342 297 345 304
Europe 424 461 436 462
Other Eastern Hemisphere 731 676 756 700
----- ----- ----- -----
Total 2,401 2,306 2,433 2,309
