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):
April 21, 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)
Item 5. Other Events
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1. On April 21, 1994, the Registrant announced that it had completed the
previously announced sale of substantially all of its worldwide chemical
operations, other than its lubricant additives business, to Huntsman
Corporation, an affiliate of the Jon M. Huntsman Group of Companies.
The Registrant is working in cooperation with Huntsman Financial Corporation
("HFC") to sell the lubricant additives business to a third party, and in
the absence of such a third-party sale, HFC will acquire such business by
September 30, 1994. The Registrant issued a Press Release entitled "Texaco
Inc. Closes Sale of Texaco Chemical Company to Huntsman Corporation," a
copy of which is attached hereto as Exhibit 99.1 and made a part hereof.
2. On April 25, 1994, the Registrant issued an Earnings Press Release
entitled "Texaco Reports Results for the First Quarter 1994," a copy of
which is attached hereto as Exhibit 99.2 and made a part hereof.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
99.1 Press Release issued by Texaco Inc. dated April 21, 1994, entitled
"Texaco Inc. Closes Sale of Texaco Chemical Company to Huntsman
Corporation."
99.2 Press Release issued by Texaco Inc. dated April 25, 1994, entitled
"Texaco Reports Results for the First Quarter 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.
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(Registrant)
By: R. E. Koch
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(Assistant Secretary)
Date: April 25, 1994
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APPENDIX
Description of graphic material included in Exhibit 99.2.
The following information is depicted in graphic form in the Press
Release issued by Texaco Inc. dated April 25, 1994, entitled
"Texaco Reports Results for the First Quarter 1994" filed as
Exhibit 99.2 to this Form 8-K:
1. The first graph is located within the third paragraph of
Exhibit 99.2. 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 quarter 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 quarter 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
2. The second graph is located within the fourth paragraph
of Exhibit 99.2. Graph is entitled "Texaco Average U.S.
Natural Gas Price Per Quarter" and is shown in dollars
per MCF by quarters for the year 1993 and first quarter
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 quarter of
1994. The plot points are as follows:
First Quarter 1993 - $1.99/MCF
Second Quarter 1993 - $2.26/MCF
Third Quarter 1993 - $2.17/MCF
Fourth Quarter 1993 - $2.34/MCF
First Quarter 1994 - $2.32/MCF
EXHIBIT 99.1
TEXACO INC. CLOSES SALE OF TEXACO CHEMICAL COMPANY
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TO HUNTSMAN CORPORATION
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FOR RELEASE: THURSDAY, APRIL 21, 1994.
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WHITE PLAINS, N.Y., April 21 - Texaco Inc. announced today that it has
received $850 million as part of the previously announced sale of its wholly
owned subsidiary, Texaco Chemical Company, and substantially all of its
worldwide chemical operations, other than Texaco's lubricant additives
business, to Huntsman Corporation, an affiliate of the Jon M. Huntsman Group
of Companies.
The $850 million consists of $650 million in cash and $200 million in
11-year subordinated notes. Not included in today's transaction is Texaco's
worldwide lubricant additives business, which Texaco is working in cooperation
with Huntsman Financial Corporation to sell to a third party. In the absence
of such a third-party sale, Huntsman Financial Corporation will acquire
Texaco's lubricant additives business by September 30, 1994.
Texaco also granted today to Huntsman, for an additional $10 million in
cash, a two-year option to purchase either 50 percent or 100 percent of a
Texaco facility currently under construction in Port Neches, Texas, which will
produce 400 million pounds per year of propylene oxide and 14,000 barrels per
day of methyl tertiary butyl ether (MTBE).
Texaco is retaining its fuel additives business, which is key to the
production of the company's advanced New CleanSystem3 gasolines. Texaco also
is retaining its solvent and intermediate chemicals operations at its El
Dorado, Kan., refinery and Star Enterprise's Delaware City refinery.
Commenting on the sale, Texaco Chairman and Chief Executive Officer
Alfred C. DeCrane, Jr., stated, "Texaco has improved its financial strength
by monetizing assets which no longer fit the company's current business
strategies. The sale of these assets to Huntsman further enhances Texaco's
ability to provide greater value and return to its shareholders and under-
scores the company's program to focus on its core oil, gas and related
businesses."
Texaco Chemical Company markets a wide range of chemical commodities,
including ethylene, propylene and ethylene glycol. The company also produces
derivative specialty chemicals, particularly surfactants.
- xxx -
CONTACTS: David J. Dickson (914) 253-4128
Cynthia B. Michener (914) 253-4743
EXHIBIT 99.2
TEXACO REPORTS RESULTS
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FOR THE FIRST QUARTER 1994
--------------------------
FOR IMMEDIATE RELEASE: MONDAY, APRIL 25, 1994.
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WHITE PLAINS, N.Y., April 25 - Texaco Inc. announced today that
consolidated worldwide net income from continuing operations for the first
quarter of 1994 was $202 million, or $0.69 per share, as compared with $281
million, or $0.98 per share, for the first quarter of 1993.
Prior to the restatement for the now discontinued chemical operations,
results for the first quarter 1993 were $278 million, or $0.97 per share.
In commenting on 1994's first quarter performance Alfred C. DeCrane,
Jr., Texaco's Chairman of the Board and Chief Executive Officer, stated,
"Continued benefits from business process improvements, cost containment
programs and increased international crude oil production levels were not
enough to offset the impact of significantly reduced crude oil prices, which
prevailed throughout the quarter. These prices were more than $4 per barrel
below the U.S. prices of last year, and more than $3 per barrel lower inter-
nationally. The downstream business experienced strong operational perform-
ance, which included improved U.S. results on the East and Gulf Coasts.
Natural gas prices in the U.S. were $0.33 per thousand cubic feet higher than
in the first quarter 1993."
- more -
- 2 -
OPERATING EARNINGS FROM CONTINUING OPERATIONS
PETROLEUM AND NATURAL GAS
UNITED STATES
Exploration and production earnings for the first quarter of 1994 were
$75 million, as compared to $133 million for the first quarter 1993. The
results for 1994 reflect crude oil prices that have declined sharply since
last summer. Crude oil prices realized in the first quarter 1994 were $4.44
per barrel lower than in the first quarter of 1993. However, upstream
earnings benefitted somewhat from an increase in natural gas prices over the
first quarter of last year. U.S. production for the 1994 quarter decreased,
in part, as a result of sales and joint venturing of selected gas properties
in late 1993.
Manufacturing and marketing results were $78 million for the first
quarter of 1994, as compared to $49 million for the first quarter of 1993.
Earnings for 1994 benefitted from higher margins, mainly on the East and Gulf
Coasts, as a result of lower refinery feedstock costs. Partially offsetting
the improved margins was scheduled maintenance in 1994, principally at the
Puget Sound refinery in Washington state. Sales of branded gasoline showed a
strong increase in March of 1994, reflecting the successful introduction of
Texaco's New CleanSystem3 gasoline throughout the United States.
- more -
- 3 -
INTERNATIONAL
Exploration and production earnings were $45 million for the first
quarter of 1994, as compared to $79 million for the first quarter of 1993.
The decline in the comparative first quarter results is due to the substan-
tial drop in crude oil prices, partly offset by enhanced and new production.
Production was up 28 percent mainly as a result of increases in the U.K. and
Danish sectors of the North Sea, Indonesia and Partitioned Neutral Zone
between Kuwait and Saudi Arabia.
Manufacturing and marketing results were $125 million for the first
quarter of 1994, as compared to $122 million for the first quarter of 1993.
Increased sales in Latin America benefitted the comparative first quarter
earnings, as did slightly higher margins in Brazil. Higher margins in the
U.K. were offset by lower margins in the remainder of Europe and West Africa.
CORPORATE/NONOPERATING RESULTS FROM CONTINUING OPERATIONS
Corporate/nonoperating expenses for the first quarter of 1994 were $120
million, as compared to expenses of $99 million for the first quarter of 1993.
This increase was mainly due to higher after tax interest expense, partly
offset by lower corporate overhead.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures for continuing operations,
including equity in such expenditures of affiliates, were $624 million for
the first quarter of 1994, as compared with $534 million for the same period
in 1993.
- more -
- 4 -
Upstream expenditures increased in the United States, reflecting
additional drilling activities, with particular emphasis on developmental gas
projects. Internationally, increased upstream activities in Indonesia and
Australia were more than offset by lower expenditures in the U.K. North Sea
where successful project completions continue to result in higher production
volumes.
Downstream expenditures increased in 1994, principally as a result of a
refinery upgrade project in Panama. In the United States, expenditures
declined somewhat due to the completion of refinery upgrade projects underway
in 1993 by Texaco's affiliate, Star Enterprise.
DISCONTINUED CHEMICAL OPERATIONS
The sale of Texaco Chemical Company (other than Texaco's lubricant
additives business) was consummated with Huntsman Corporation on April 21,
1994. Final events related to the closing will result in further net charges
projected at less than $50 million. Texaco continues to cooperate with
Huntsman Financial Corporation to explore the sale of the lubricant additives
business to a third party. In the absence of such a third party sale,
Huntsman Financial Corporation is scheduled to acquire this business by
September 30, 1994.
- xxx -
NOTE TO EDITORS: Tables for the first quarter are attached.
CONTACTS: Dave Dickson 914-253-4128
Jim Swords 914-253-4103
Cynthia Michener 914-253-4743
Jim Reisler 914-253-4389
- 5 -
First Quarter
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1994 1993 (a)
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FUNCTIONAL NET INCOME ($000,000)
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Operating Earnings (Losses) from
Continuing Operations
Petroleum and natural gas
Exploration and production
United States $ 75 $ 133
International 45 79
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Total 120 212
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Manufacturing, marketing and
distribution
United States 78 49
International 125 122
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Total 203 171
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Total petroleum and natural gas 323 383
Nonpetroleum (1) (3)
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Total operating earnings 322 380
Corporate/Nonoperating (120) (99)
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Net income from continuing operations 202 281
Discontinued chemical operations - (3)
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Total net income $ 202 $ 278
===== =====
Per common share (dollars):
Net income (loss):
Continuing operations $ .69 $ .98
Discontinued operations - (.01)
----- -----
Total net income $ .69 $ .97
===== =====
Average number of common shares
outstanding (000,000) 259.2 258.8
(a) Restated to reflect the separate identification of discontinued chemical
operations.
- 6 -
First Quarter
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1994 1993 (a)
---- ----
OTHER FINANCIAL DATA ($000,000)
- ------------------------------
Revenues from continuing operations $ 7,434 $ 8,233
Total assets as of Mar. 31 (b) $26,300 $26,021
Stockholders' equity as of Mar. 31 (b) $10,300 $10,060
Total debt as of Mar. 31 (b) $ 7,000 $ 6,654
Capital and exploratory expenditures
Texaco Inc. and subsidiary companies
Exploration and production
United States $ 270 $ 140
International 123 176
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Total 393 316
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Manufacturing, marketing and
distribution
United States 50 53
International 53 26
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Total 103 79
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Other 6 7
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Total Texaco Inc. and
subsidiaries 502 402
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Equity in affiliates
United States 25 37
International 97 95
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Total equity in affiliates 122 132
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Total continuing
operations 624 534
Discontinued chemical operations 19 23
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Total $ 643 $ 557
======= =======
Dividends paid to common
stockholders $ 207 $ 207
Dividends per common share (dollars) $ .80 $ .80
Dividend requirements for preferred
stockholders $ 24 $ 27
(a) Restated to reflect the separate identification of discontinued chemical
operations.
(b) Preliminary
- 7 -
First Quarter
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1994 1993
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OPERATING DATA - INCLUDING INTERESTS
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IN AFFILIATES
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Net production of crude oil and
natural gas liquids (000 BPD)
United States 408 428
Other Western Hemisphere 20 20
Europe 117 77
Other Eastern Hemisphere 239 200
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Total 784 725
Net production of natural gas -
available for sale (000 MCFPD)
United States 1,675 1,762
International 330 242
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Total 2,005 2,004
Natural gas sales (000 MCFPD)
United States 2,914 2,780
International 349 260
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Total 3,263 3,040
Natural gas liquids sales
(including purchased LPGs) (000 BPD)
United States 196 210
International 61 38
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Total 257 248
Refinery input (000 BPD)
United States 613 668
Other Western Hemisphere 51 54
Europe 329 329
Other Eastern Hemisphere 478 451
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Total 1,471 1,502
Refined product sales (000 BPD)
United States 816 812
Other Western Hemisphere 310 290
Europe 462 479
Other Eastern Hemisphere 723 761
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Total 2,311 2,342
