===============================================================================
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):
October 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 October 23, 1995, the Registrant issued an Earnings Press
Release entitled "Texaco Reports Results for Third Quarter
and Nine Months 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 October 23, 1995,
entitled "Texaco Reports Results for the Third Quarter
and Nine Months 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: October 23,1995
---------------
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 October 23, 1995, entitled "Texaco
Reports Results for the Third Quarter and Nine Months 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 three 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 three 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
Third Quarter 1995 - $14.88 per barrel
The following summary information is also depicted at the bottom of
the graph:
Nine months 1994 - $13.10 per barrel
Nine months 1995 - $15.17 per barrel
2. The second graph is 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 year 1994 and first three 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 three 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
Third Quarter 1995 - $1.56 per MCF
The following summary information is also depicted at the bottom of
the graph:
Nine months 1994 - $2.05 per MCF
Nine months 1995 - $1.64 per MCF
3. The third graph is located within the twelfth paragraph of
Exhibit 99.1. Graph is entitled "Texaco Average Int'l. U.S.
Crude Price Per Quarter" and is shown in dollars per barrel by
quarter for the year 1994 and first three 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 three quarters of 1995. The plot points
are as follows:
First Quarter 1994 - $13.12 per barrel
Second Quarter 1994 - $14.57 per barrel
Third Quarter 1994 - $16.02 per barrel
Fourth Quarter 1994 - $15.58 per barrel
First Quarter 1995 - $16.38 per barrel
Second Quarter 1995 - $17.30 per barrel
Third Quarter 1995 - $15.45 per barrel
The following summary information is also depicted at the bottom of
the graph:
Nine months 1994 - $14.61 per barrel
Nine months 1995 - $16.32 per barrel
FDeb:bbm
(8koct23)
EXHIBIT 99.1
TEXACO REPORTS RESULTS
----------------------
FOR THE THIRD QUARTER AND NINE MONTHS 1995
------------------------------------------
FOR IMMEDIATE RELEASE: MONDAY, OCTOBER 23, 1995.
- -----------------------------------------------
WHITE PLAINS, N.Y., Oct. 23 - Texaco announced today that
consolidated worldwide net income from continuing operations for the
third quarter of 1995 was $288 million, or $1.05 per share, as
compared with $281 million, or $.98 per share, for the third quarter
of 1994. Net income from continuing operations for the first nine
months of 1995 was $851 million, or $3.10 per share, as compared
with $598 million, or $2.02 per share, for the first nine months
1994. Net income for both years included special items.
Third Quarter Nine Months
------------- -----------
Texaco Inc. (Millions): 1995 1994 1995 1994
- ------------------------------------------------------------------
Net income from continuing
operations before
special items $ 286 $ 270 $ 761 $ 627
Tax benefits on asset sale 44 8 44 87
Net special (charges)
credits (42) 3 46 (116)
---- ----- ----- -----
Total net income
from continuing
operations 288 281 851 598
Loss on disposal
of discontinued
chemical operations - - - (87)
---- ----- ----- -----
Total net income $ 288 $ 281 $ 851 $ 511
- ------------------------------------------------------------------
In commenting on 1995's performance, Alfred C. DeCrane, Jr.,
Texaco's Chairman of the Board and Chief Executive Officer, stated,
"Third quarter operating results reflect continued positive progress
on our plan for growth, with normalized earnings up six percent from
last year and up nine percent from the second quarter, despite the
impact of lower prices for both U.S. natural gas and worldwide crude
oil. Improved earnings in the face of these factors reflect our
focus on maximizing core oil and gas results and divesting non-core
assets, including substantially all chemical activities.
"Nine-month earnings were boosted by worldwide crude oil prices
earlier in the year, and continued significant operational
improvements and cost reductions, helping offset the $.41 per MCF
decrease in U.S. natural gas prices and poor manufacturing margins
which dampened our solid U.S. marketing performance."
- more -
- 2 -
Net income from continuing operations for the third quarter
1995 includes $44 million in tax benefits realizable through the
sale of an interest in a subsidiary. Similar tax benefits of $8
million and $87 million were recognized in the third quarter and
nine months of 1994, respectively. Results for the third quarter of
1995 also include a net special charge of $42 million comprised of
$56 million for the cost of employee separations, $13 million for
restructuring of certain Caltex Petroleum Corporation operations and
a net gain of $27 million from the sale of the company's interest in
Pekin Energy Company. Additionally, nine-month results for 1995
include special gains of $88 million, principally relating to the
sale of land by a Caltex affiliate in Japan and to sales of non-core
U.S. producing properties.
Third quarter 1994 results included a net special credit of $3
million resulting from a $23 million gain on the sale of an interest
in a downstream joint venture in Sweden and a charge of $20 million
by an insurance subsidiary related to property damage from a
refinery fire. Nine months results for 1994 also included
additional special charges of $119 million related to employee
separations and the write-down of certain non-core assets. Net
income for the first nine months of 1994 reflected a charge of $87
million, or $.34 per share, for discontinued operations relating to
the sale of a substantial component of Texaco's chemical business.
ANALYSIS OF FUNCTIONAL NET INCOME:
OPERATING EARNINGS FROM CONTINUING OPERATIONS
PETROLEUM AND NATURAL GAS
UNITED STATES
Third Quarter Nine Months
Exploration & Production ------------- -----------
(Millions): 1995 1994 1995 1994
- -------------------------------------------------------------------
Operating earnings
before special items $ 159 $ 127 $ 464 $ 323
Net special (charges)
credits - - 8 (24)
------ ----- ------ ------
Total operating earnings $ 159 $ 127 $ 472 $ 299
- -------------------------------------------------------------------
The improvement in comparative results for both the third
quarter and first nine months reflects lower operating expenses in
core producing properties, the effects of reduced overhead and
operating improvements from the application of new technologies.
These savings are in addition to expense reductions associated with
the sales of non-core producing properties.
- more -
- 3 -
Net income for the first nine months of 1995 also benefited
from crude oil prices that averaged some $2 per barrel higher than
last year, although third quarter 1995 prices were only $.06 per
barrel above the comparable 1994 levels. The 1995 prices for heavy
Californian crudes, approximately 35 percent of Texaco's U.S.
production, were higher than 1994 due to continuing strong regional
demand.
Results for both the third quarter and first nine months of
1995 were reduced by the significant deterioration of natural gas
prices from last year.
Excluding non-core producing properties which represented some
nine percent of U.S. production, crude oil and natural gas
production in 1995 was essentially equal to 1994 levels due to
enhanced production from core areas.
Results for 1995 include a gain of $120 million from the non-
core producing property sales, mostly offset by certain write-downs
of properties being held for sale and reserves for environmental
remediation on these properties which totaled $112 million,
resulting in a net gain of $8 million. Results for 1994 included
charges relating to the cost associated with employee separations.
Manufacturing, Marketing Third Quarter Nine Months
& Distribution -------------- -------------
(Millions): 1995 1994 1995 1994
- -----------------------------------------------------------------
Operating earnings
before special items $ 71 $ 92 $ 80 $ 209
Special (charges) (11) - (11) (24)
----- ----- ----- -----
Total operating
earnings $ 60 $ 92 $ 69 $ 185
- -----------------------------------------------------------------
Third quarter 1995 margins improved substantially over the
second quarter of the year, principally on the West Coast. However,
third quarter and nine months 1995 results were below the levels
experienced last year, reflecting continuing weak margins in many
areas and the effects of storm-related downtime and scheduled
maintenance at refineries, particularly on the East and Gulf coasts.
Expense containment programs partly offset these declines.
- more -
- 4 -
Third quarter 1995 results include special charges of $11
million relating to employee separations. Special charges for nine
months 1994 are related to the write-down of certain non-core assets
and employee separations.
INTERNATIONAL
Third Quarter Nine Months
Exploration & Production -------------- ------------
(Millions): 1995 1994 1995 1994
- -------------------------------------------------------------------
Operating earnings
before special items $ 89 $ 83 $ 253 $ 162
Special (charges) - - - (16)
Total operating ----- ----- ----- -----
earnings $ 89 $ 83 $ 253 $ 146
- -------------------------------------------------------------------
The increase in comparative operating results for the third
quarter reflects production from new fields in China, as well as
expanded production in Indonesia and in the Partitioned Neutral Zone
between Kuwait and Saudi Arabia. However, these benefits were
largely offset by the impact of temporary interruptions of some
crude oil production in the North Sea, as well as lower crude oil
prices largely in Far East markets.
Nine-month 1995 prices were $1.71 per barrel higher than in
1994. These higher prices, combined with increased crude oil and
natural gas production, contributed to the strong comparative
earnings improvement for the first nine months.
Results for the first nine months of 1994 included special
charges related to the write-down of certain non-core assets and
employee separations.
Manufacturing, Marketing Third Quarter Nine Months
& Distribution ------------- ------------
(Millions): 1995 1994 1995 1994
- -------------------------------------------------------------------
Operating earnings before
special items $ 57 $ 75 $ 237 $ 267
Net special (charges)
credits (42) 23 38 (15)
------ ----- ------ -----
Total operating earnings $ 15 $ 98 $ 275 $ 252
- -------------------------------------------------------------------
- more -
- 5 -
Comparative third quarter international downstream operating
earnings declined as improved results in United Kingdom operations
were more than offset by weakened margins in Latin America and lower
volumes as a result of the continuing refinery upgrade project in
Panama, and lower results in the Caltex operating areas.
The decrease in normalized earnings for the first nine months
of 1995 mainly reflects overall weak European margins during the
first half of the year, particularly in the U.K., partly offset by
solid first-half margins and volumes in Latin America and higher
margins in the Caltex operating areas.
Net income for first nine months of 1995 included a $42 million
third quarter special charge relating to employee separations in
subsidiary operations and Caltex restructuring charges, and a net
gain of $80 million principally relating to the sale of land by a
Caltex affiliate in Japan during the first quarter. Nine months
1994 results included a $23 million third quarter gain related to
the sale of an interest in a downstream joint venture in Sweden and
special charges of $38 million related to employee separations and
to the write-down of certain non-core assets.
NONPETROLEUM
Third Quarter Nine Months
--------------- -------------
(Millions): 1995 1994 1995 1994
- -----------------------------------------------------------------
Operating earnings
(losses) before
special items $ 9 $ (6) $ 20 $ (13)
Special (charges)
credits 27 (20) 27 (20)
----- ----- ----- -----
Total operating
earnings (losses) $ 36 $ (26) $ 47 $ (33)
- ------------------------------------------------------------------
Higher 1995 nonpetroleum earnings mainly reflect the improved
loss experience of insurance operations.
Results for the third quarter 1995 included a $27 million gain
from the sale of the company's interest in Pekin Energy Company.
The third quarter 1994 included a $20 million special charge in the
insurance operations related to property fire damage at the
Pembroke, Wales, refinery.
- more -
- 6 -
-
CORPORATE/NONOPERATING RESULTS FROM CONTINUING OPERATIONS
Third Quarter Nine Months
-------------- --------------
(Millions): 1995 1994 1995 1994
- -------------------------------------------------------------------
Results before special
items $ (99) $ (101) $ (293) $ (321)
Tax benefits on
asset sale 44 8 44 87
Special (charges) (16) - (16) (17)
------ ------ ------ ------
Total
corporate/nonoperating $ (71) $ (93) $ (265) $ (251)
- -------------------------------------------------------------------
Results for nine months 1995 include first quarter gains of $25
million, principally from sales of equity securities held for
investment by the insurance operations.
The third quarter 1995 results include $44 million of tax
benefits realizable through the sale of an interest in a subsidiary.
Similar tax benefits of $8 million and $87 million were recognized
in the third quarter and nine months of 1994, respectively.
Special charges for employee separations totaled $16 million
for the third quarter of 1995. The results for the first nine
months of 1994 included similar special charges of $17 million for
employee separations.
CAPITAL AND EXPLORATORY EXPENDITURES
- ------------------------------------
Capital and exploratory expenditures for continuing operations,
including equity in such expenditures by affiliates, were $2,058
million for the first nine months of 1995, as compared to $1,788
million for the same period of 1994. Consistent with the intent to
reinvest the proceeds of non-core asset sales, expenditures for the
third quarter of 1995 amounted to $786 million versus $557 million
for the third quarter of 1994.
Increased worldwide exploration and production expenditures in
1995 reflect the continued development of the Captain field in the
U.K. sector of the North Sea as well as higher U.S. expenditures,
both onshore and offshore, during the third quarter of 1995.
Downstream expenditures remained relatively stable as compared
to the prior year as 1995's higher worldwide marketing investments
were balanced out by the completion of several refinery upgrade
projects.
-xxx-
NOTE TO EDITORS: Tables for the third quarter and nine months are
attached.
CONTACTS: David J. Dickson 914-253-4128
J. Michael Trevino 914-253-4175
Cynthia B. Michener 914-253-4743
Yorick P. Fonseca 914-253-7034
- 7 -
Third Quarter Nine Months
--------------- --------------
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 $ 159 $ 127 $ 472 $ 299
International 89 83 253 146
------ ------ ------ ------
Total 248 210 725 445
------ ------ ------ ------
Manufacturing, marketing
and distribution
United States 60 92 69 185
International 15 98 275 252
------ ------ ------ ------
Total 75 190 344 437
------ ------ ------ ------
Total petroleum
and natural gas 323 400 1,069 882
Nonpetroleum 36 (26) 47 (33)
------ ------ ------ ------
Total operating
earnings 359 374 1,116 849
Corporate/Nonoperating (a) (71) (93) (265) (251)
------ ------ ------ ------
Net income from
continuing operations 288 281 851 598
Loss on disposal of
discontinued chemical
operations - - - (87)
------ ------ ------ ------
Total net income $ 288 $ 281 $ 851 $ 511
====== ====== ====== ======
EARNINGS PER COMMON SHARE
Net income (loss) in
dollars:
Continuing operations $ 1.05 $ .98 $ 3.10 $ 2.02
Discontinued operations - - - (.34)
------ ------ ------ ------
Total net income $ 1.05 $ .98 $ 3.10 $ 1.68
====== ====== ====== ======
Average number of
common shares
outstanding (000,000) 260.1 259.1 259.9 259.2
(a) Includes special charges and credits.
- 8 -
Third Quarter Nine Months
-------------- ------------
1995 1994 1995 1994
---- ---- ---- ----
OTHER FINANCIAL
DATA ($000,000)
Revenues from
continuing operations $ 8,815 $ 8,960 $ 27,126 $ 24,394
Total assets as of
September 30 (b)$ 25,000 $ 25,473
Stockholders' equity as
of September 30 (b)$ 9,990 $ 9,839
Total debt as of
September 30 (b)$ 5,950 $ 6,493
Capital and exploratory
expenditures
Texaco Inc. and
subsidiary companies
Exploration and
production
United States $ 246 $ 148 $ 633 $ 598
International 260 111 644 376
------- ------ ------- --------
Total 506 259 1,277 974
------- ------ ------- --------
Manufacturing,
marketing and
distribution
United States 66 64 168 166
International 69 60 187 181
------- ------ ------- --------
Total 135 124 355 347
------- ------ ------- --------
Other 6 6 18 20
------- ------ ------- --------
Total Texaco
Inc. and
subsidiaries 647 389 1,650 1,341
------- ------ ------- --------
Equity in affiliates
United States 32 45 97 96
International 107 123 311 351
------- ------ ------- --------
Total equity in
affiliates 139 168 408 447
Total continuing ------- ------ ------- --------
operations 786 557 2,058 1,788
Discontinued chemical
operations 1 1 2 21
------- ------ ------- --------
Total $ 787 $ 558 $ 2,060 $ 1,809
======= ====== ======= ========
Dividends paid to common
stockholders $ 208 $ 207 $ 624 $ 622
Dividends per common
share (dollars) $ .80 $ .80 $ 2.40 $ 2.40
Dividend requirements
for preferred
stockholders $ 15 $ 27 $ 46 $ 76
(b) Preliminary
- 9 -
Third Quarter Nine Months
------------- ------------
1995 1994 1995 1994
---- ---- ---- ----
OPERATING DATA -
INCLUDING INTERESTS
IN AFFILIATES
Net production of crude
oil and natural gas
liquids (000 BPD)
United States 373 407 381 408
Other Western
Hemisphere 15 21 17 20
Europe 118 126 117 116
Other Eastern
Hemisphere 257 232 243 234
------- ------ ------- --------
Total 763 786 758 778
Net production of
natural gas -
available for
sale (000 MCFPD)
United States 1,618 1,720 1,627 1,728
Europe 172 137 210 148
Other International 163 157 170 153
------- ------ ------- --------
Total 1,953 2,014 2,007 2,029
Natural gas
sales (000 MCFPD)
United States 3,046 3,156 3,162 3,083
Europe 227 141 254 153
Other International 171 167 180 164
------- ------ ------- --------
Total 3,444 3,464 3,596 3,400
Natural gas liquids
sales (including
purchased LPGs) (000 BPD)
United States 207 212 214 211
International 86 93 79 70
------- ------ ------- --------
Total 293 305 293 281
Refinery input (000 BPD)
United States 703 704 691 661
Other Western
Hemisphere 41 53 35 47
Europe 312 188 284 279
Other Eastern
Hemisphere 453 447 443 456
------- ------ ------- --------
Total 1,509 1,392 1,453 1,443
Refined product
sales (000 BPD)
United States 942 908 913 876
Other Western
Hemisphere 331 318 340 308
Europe 487 411 453 445
Other Eastern
Hemisphere 698 707 736 702
------- ------ ------- --------
Total 2,458 2,344 2,442 2,331
