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 24, 1994
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
- --------------------
1. On January 24, 1994, the Registrant issued an Earnings Press
Release entitled "Texaco Reports Results for the Fourth
Quarter and Year 1993," a copy of which is attached hereto
as Exhibit 99 and made a part hereof.
Item 7. Financial Statement, Pro Forma Financial Information and Exhibits
- -------------------------------------------------------------------------
(c) Exhibit
99. Press Release issued by Texaco Inc. dated January 24,
1994, entitled "Texaco Reports Results for the Fourth
Quarter and Year 1993."
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: /s/R. E. KOCH
--------------------
R. E. Koch
(Assistant Secretary)
Date: January 24, 1994
----------------
APPENDIX
Description of graphic material included in Exhibit 99.
The following information is depicted in graphic form in the
Press Release issued by Texaco Inc. dated January 24, 1994,
entitled "Texaco Reports Results for the Fourth Quarter and Year
1993" filed as Exhibit 99 to this Form 8-K:
1. The first graph is located within the second paragraph of
Exhibit 99. Graph is entitled "Texaco Average U.S. Crude
Price Per Quarter" and is shown in dollars per barrel by
quarter for the years 1992 and 1993. The Y axis depicts
dollars per barrel from $10.00 to $20.00 with $2.00
increments. The X axisdepicts the calendar quarters for
1992 and 1993. The plot points are as follows:
First Quarter 1992 - $14.48 per barrel
Second Quarter 1992 - $16.70 per barrel
Third Quarter 1992 - $17.81 per barrel
Fourth Quarter 1992 - $16.50 per barrel
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
The following summary information is also depicted at the bottom
of the graph:
Year 1992 - $16.36 per barrel
Year 1993 - $14.26 per barrel
2. The second graph is located within the fifth paragraph of
Exhibit 99. Graph is entitled "Texaco Average U.S. Natural
Gas Price Per Quarter" and is shown in dollars per MCF by
quarters for the years 1992 and 1993. The Y axis depicts
dollars per MCF from $0.00 to $3.00 with $.50 increments.
The X axis depicts the calendar quarters for 1992 and 1993.
The plot points are as follows:
First Quarter 1992 - $1.72/MCF
Second Quarter 1992 - $1.51/MCF
Third Quarter 1992 - $1.83/MCF
Fourth Quarter 1992 - $2.40/MCF
First Quarter 1993 - $1.99/MCF
Second Quarter 1993 - $2.26/MCF
Third Quarter 1993 - $2.17/MCF
Fourth Quarter 1993 - $2.34/MCF
The following summary information is also depicted at the bottom
of the graph:
Year 1992 - $1.84/MCF
Year 1993 - $2.19/MCF
EXHIBIT 99
TEXACO REPORTS RESULTS
FOR THE FOURTH QUARTER AND YEAR 1993
FOR IMMEDIATE RELEASE: MONDAY, JANUARY 24, 1994.
WHITE PLAINS, N.Y., Jan. 24 - Texaco Inc. announced
today that consolidated worldwide net income from continuing
operations (including special gains and charges) for the fourth
quarter of 1993 was $349 million, or $1.25 per share, as compared
with $341 million, or $1.22 per share, for the fourth quarter of
1992. Comparable net income (including special gains and
charges) for the year 1993 was $1,259 million, or $4.47 per
share, as compared with $1,038 million, or $3.63 per share, for
the year 1992. Net income from continuing operations is before
the cumulative effect of changes in accounting principles and
discontinued chemical operations.
Fourth Quarter Year
-------------- ------------
Texaco Inc. (Millions): 1993 1992 1993 1992
- -----------------------------------------------------------------------------
Net income from continuing operations before
special items $ 284 $ 428 $1,132 $1,138
Tax law changes - - 152 -
Net special charges - (117) (235) (130)
Net tax benefits relating to asset sales 65 30 210 30
----- ----- ------ ------
Total net income from continuing operations 349 341 1,259 1,038
Discontinued chemical operations:
Loss from operations - (28) (17) (26)
Loss on disposal of business (10) - (174) -
Cumulative effect of changes in accounting
principles as of January 1, 1992 - - - (300)
----- ----- ------ ------
Total net income $ 339 $ 313 $1,068 $ 712
- -----------------------------------------------------------------------------
In commenting on 1993's performance Alfred C. DeCrane, Jr.,
Texaco's Chairman of the Board and Chief Executive Officer
stated, "Results for the fourth quarter and year reflect strong
operational performance in the face of crude oil prices which
weakened significantly in the third and fourth quarters, and
which remain depressed. Redesigned business processes and
restructured operations contributed to a 4 percent reduction in
1993 operating and overhead expenses. The ability to cut cash
operating expenses for the third year running confirms the
importance of the quality process as a key ingredient of Texaco's
business strategy."
- more -
Net income for the year 1993 included $210 million of net
tax benefits realizable through sales of interests in a
subsidiary, as well as $152 million of net deferred tax benefits
arising from tax law changes in the third quarter. These tax law
changes include the effect of changes in the U.K. Petroleum
Revenue Tax relating to the taxability of certain items and
a tax rate reduction from 75 percent to 50 percent, which were
partially offset by charges related to the increase in the U.S.
tax rate to 35 percent retroactive to January 1, 1993. Net
income for the fourth quarter of 1992 included tax benefits of
$30 million from the sale of a partial stock interest in a
subsidiary.
Results for 1993 and 1992 also included special charges of
$235 and $130 million, respectively. These charges related to
staff reductions, writedowns of certain assets, and financial
reserves related to environmental remediation and the expected
resolution of oil and gas issues.
OPERATING EARNINGS FROM CONTINUING OPERATIONS
PETROLEUM AND NATURAL GAS
UNITED STATES
Fourth Quarter Year
-------------- -------------
Exploration & Production (Millions): 1993 1992 1993 1992
- ----------------------------------------------------------------------------
Operating earnings from continuing
operations before special items $ 114 $ 184 $ 548 $ 576
Tax law change - - (32) -
Special charges - (26) (6) (33)
----- ----- ----- -----
Total operating earnings $ 114 $ 158 $ 510 $ 543
- -----------------------------------------------------------------------------
The fourth quarter 1993 results benefitted from reduced
operating expenses; however, these benefits were more than offset
by lower crude oil prices of approximately $4 per barrel.
Results for the year 1993 reflect higher natural gas prices and
lower expenses, and a $2 per barrel decline in crude oil and
condensate prices as well as slightly lower crude oil and natural
gas production. However, the successful drilling program in the
latter part of the year has slowed the decline rate in natural
gas production.
Special charges for the year 1993 included third quarter
charges related to staff reductions as well as the impact of the
U.S. tax rate increase to 35 percent effective January 1, 1993.
Special charges in 1992 related to the property damage caused by
Hurricane Andrew, staff reductions and financial reserves.
- more -
Fourth Quarter Year
-------------- -------------
Manufacturing & Marketing (Millions): 1993 1992 1993 1992
- -----------------------------------------------------------------------------
Operating earnings from continuing
operations before special items $ 100 $ 53 $ 306 $ 288
Tax law change - - (4) -
Special charges - (21) (87) (21)
----- ----- ----- -----
Total operating earnings $ 100 $ 32 $ 215 $ 267
- ------------------------------------------------------------------------------
Earnings for both the fourth quarter and year 1993
benefitted from higher marketing margins on the East and Gulf
Coasts of the U.S. during the latter part of the year. Branded
gasoline sales grew during the fourth quarter and year 1993 as
compared to the 1992 periods. Increased sales volumes in this
preferred class of trade contributed to the improved results, as
did lower refinery feedstock prices. Refinery downtime
partially offset these improvements.
Special items for the year 1993 included third quarter
charges for staff reductions, environmental reserves and the U.S.
tax rate increase. The fourth quarter of 1992 included special
charges related to staff reductions and property damage due to a
fire at the Los Angeles refinery.
INTERNATIONAL
Fourth Quarter Year
-------------- -------------
Exploration & Production (Millions): 1993 1992 1993 1992
- ----------------------------------------------------------------------------
Operating earnings from continuing
operations before special items $ 36 $ 168 $ 212 $ 414
Tax law changes - - 169 -
Net special charges/gains - 2 (59) 2
----- ----- ----- -----
Total operating earnings $ 36 $ 170 $ 322 $ 416
- -----------------------------------------------------------------------------
Lower fourth quarter and year 1993 earnings reflect the
decline in worldwide crude oil prices, which was partially offset
by new production. Production during the fourth quarter was up
18 percent as compared to 1992, mainly in Indonesia from the
Belida field, in the North Sea and the Partitioned Neutral Zone
between Kuwait and Saudi Arabia. Operating results for the
fourth quarter and year 1992 included benefits of $76 million and
$99 million, respectively, relating to the currency exchange
impact of the Pound Sterling on deferred income taxes. In 1993
there were no such benefits.
- more -
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 from 75 percent to 50 percent. Special charges in
1993 related to staff reductions and the writedown of the
carrying value of certain assets, principally in the North
Sea, brought about by a change in the Petroleum Revenue Tax laws.
The year 1992 included a gain related to the favorable
settlement of a Danish tax issue and special charges for staff
reductions.
Fourth Quarter Year
-------------- -------------
Manufacturing & Marketing (Millions): 1993 1992 1993 1992
- ----------------------------------------------------------------------------
Operating earnings from continuing
operations before special items $ 120 $ 86 $ 464 $ 335
Special charges - (35) (30) (35)
----- ----- ----- -----
Total operating earnings $ 120 $ 51 $ 434 $ 300
- -----------------------------------------------------------------------------
Earnings for both the fourth quarter and year 1993 reflect
strong margins and higher refined product sales volumes in the
Caltex operating areas as well as improved margins in Latin
America, particularly Brazil. Caltex recorded non-cash charges
which reduced Texaco's operating results by $36 million and $51
million in the fourth quarter and year 1993, respectively, to
recognize that the market value of inventories is lower than
their LIFO carrying value. The 1992 fourth quarter and year
included benefits of $18 million and $23 million, respectively,
relating to the currency exchange impact of the Pound Sterling on
deferred income taxes. In 1993 there were no such benefits.
Special charges for both years include charges related to
staff reductions and writedowns in the carrying values of certain
assets. The fourth quarter of 1992 also included financial
reserves for the expected resolution of environmental and other
issues.
CORPORATE/NONOPERATING RESULTS FROM CONTINUING OPERATIONS
Fourth Quarter Year
-------------- -------------
(Millions): 1993 1992 1993 1992
- ----------------------------------------------------------------------------
Results from continuing operations
before special items $ (84) $ (65) $(389) $(474)
Tax law change - - 23 -
Net special charges - (25) (53) (25)
Net tax benefits relating to asset sales 65 30 210 30
----- ----- ----- -----
Total corporate/nonoperating $ (19) $ (60) $(209) $(469)
- ----------------------------------------------------------------------------
- more -
Lower overall interest costs coupled with the company's
continued expense reduction efforts improved 1993 results. The
fourth quarter of 1992 included the receipt of interest income on
U.K. and Danish tax refunds.
The year 1993 included net tax benefits realizable through
sales of interests in a subsidiary. The fourth quarter of 1993
included a refund of windfall profit taxes with interest, which
was offset by financial reserves primarily relating to oil and
gas issues. The net special charge for the year 1993 related to
staff reductions. The year 1992 included a gain related to the
sale of an interest in a subsidiary and special charges related
to staff reductions and the reduction in the carrying value of
certain assets.
DISCONTINUED CHEMICAL OPERATIONS
On September 13, 1993, Texaco announced its intent to sell
substantially all of its worldwide chemical operations to an
affiliate of the Jon M. Huntsman Group of Companies. The
memorandum of understanding is being modified and Texaco is
working in cooperation with Huntsman to sell the company's
additives business to a third party. The sale of the
nonadditives portion of the chemical operations is now expected
to close in the first quarter of 1994, and the sale of the
additives business is expected to take place by September 30,
1994.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures for continuing
operations, including equity in such expenditures of affiliates,
were $2,863 million for the year 1993 as compared with $3,004
million for the prior year. Expenditures for continuing
operations for the fourth quarter of 1993 amounted to $998
million versus $1,000 million for the same quarter in 1992.
Expenditures for 1993 declined as compared to 1992,
reflecting the completion of several refinery upgrade projects in
the U.S. which were underway in 1992, mainly by Star Enterprise.
In addition, international upstream expenditures decreased,
principally in the U.K. sector of the North Sea where new
production was placed onstream.
Offsetting these decreases were increased drilling
activities in the United States, and higher international
refining and marketing investments in the Caltex area.
- xxx -
NOTE: Tables for the fourth quarter and year are attached.
CONTACTS: Dave Dickson (914) 253-4128
Jim Swords (914) 253-4103
Cynthia Michener (914) 253-4743
Fourth Quarter Year
-------------- -----------
1993 1992 (b) 1993 1992 (b)
---- ---- ---- ----
FUNCTIONAL NET INCOME ($000,000)
Operating Earnings (Losses) from
Continuing Operations (a)
Petroleum and natural gas
Exploration and production
United States $ 114 $ 158 $ 510 $ 543
International 36 170 322 416
----- ----- ----- ------
Total 150 328 832 959
----- ----- ----- ------
Manufacturing, marketing and
distribution
United States 100 32 215 267
International 120 51 434 300
----- ----- ------ ------
Total 220 83 649 567
----- ----- ------ ------
Total petroleum and natural gas 370 411 1,481 1,526
Nonpetroleum (2) (10) (13) (19)
----- ----- ------ ------
Total operating earnings 368 401 1,468 1,507
Corporate/Nonoperating (a) (19) (60) (209) (469)
----- ----- ------ ------
Net Income from continuing operations 349 341 1,259 1,038
Discontinued chemical operations
Net income (loss) from operations - (28) (17) (26)
Net loss on disposal (10) - (174) -
Cumulative effect of adoption of SFAS 106
and 109 as of January 1, 1992 - - - (300)
------ ------ ------ ------
Total net income $ 339 $ 313 $1,068 $ 712
====== ====== ====== ======
Per common share (dollars):
Net income (loss) before cumulative
effect of accounting changes:
Continuing operations $ 1.25 $ 1.22 $ 4.47 $ 3.63
Discontinued operations (.04) (.11) (.73) (.10)
Cumulative effect of accounting changes - - - (1.16)
------ ------ ------ ------
Total net income $ 1.21 $ 1.11 $ 3.74 $ 2.37
====== ====== ====== ======
Average number of common shares
outstanding (000,000) 259.1 258.7 258.9 258.7
(a) Includes special gains and charges; see page 10 for detailed analysis.
(b) Restated to reflect the separate identification of discontinued chemical operations.
Fourth Quarter Year
-------------- -----------
1993 1992 (b) 1993 1992 (b)
---- ---- ---- ----
OTHER FINANCIAL DATA ($000,000)
Revenues from continuing operations $ 8,575 $ 9,480 $34,071 $36,549
Total assets as of Dec. 31 (c) $26,300 $25,992
Stockholders' equity as of Dec. 31 $10,279 $ 9,973
Total debt as of Dec. 31 (c) $ 6,800 $ 6,581
Capital and exploratory expenditures
Texaco Inc. and subsidiary companies
Exploration and production
United States $ 280 $ 273 $ 796 $ 735
International 161 255 751 861
------- ------- ------- -------
Total 441 528 1,547 1,596
------- ------- ------- -------
Manufacturing, marketing and
distribution
United States 116 124 348 362
International 158 113 291 319
------- ------- ------- -------
Total 274 237 639 681
------- ------- ------- -------
Other 17 29 43 76
------- ------- ------- -------
Total Texaco Inc. and
subsidiaries 732 794 2,229 2,353
------- ------- ------- -------
Equity in affiliates
United States 46 70 157 266
International 220 136 477 385
------- ------- ------- -------
Total equity in affiliates 266 206 634 651
------- ------- ------- -------
Total continuing
operations 998 1,000 2,863 3,004
Discontinued chemical operations 30 45 84 160
------- ------- ------- -------
Total $ 1,028 $ 1,045 $ 2,947 $ 3,164
Dividends paid to common
stockholders $ 207 $ 207 $ 828 $ 828
Dividends per common share (dollars) $ .80 $ .80 $ 3.20 $ 3.20
Dividend requirements for preferred
stockholders $ 24 $ 24 $ 101 $ 99
(b) Restated to reflect the separate identification of discontinued chemical operations.
(c) Preliminary
Fourth Quarter Year
-------------- --------------
1993 1992 1993 1992
---- ---- ---- ----
OPERATING DATA - INCLUDING INTERESTS
IN AFFILIATES
Net production of crude oil and
natural gas liquids (000 BPD)
United States 417 425 423 432
Other Western Hemisphere (d) 18 20 20 45
Europe 94 68 81 73
Other Eastern Hemisphere 217 190 204 186
----- ----- ----- -----
Total 746 703 728 736
Net production of natural gas -
available for sale (000 MCFPD)
United States 1,726 1,716 1,729 1,782
International 287 239 238 213
----- ----- ----- -----
Total 2,013 1,955 1,967 1,995
Natural gas sales (000 MCFPD)
United States 2,677 2,610 2,735 2,705
International 315 249 255 223
----- ----- ----- -----
Total 2,992 2,859 2,990 2,928
Natural gas liquids sales
(including purchased LPGs) (000 BPD)
United States 194 206 190 188
International 52 45 51 49
----- ----- ----- -----
Total 246 251 241 237
Refinery input (000 BPD)
United States 652 644 658 652
Other Western Hemisphere 45 51 50 59
Europe 335 330 330 317
Other Eastern Hemisphere 440 418 432 393
----- ----- ----- -----
Total 1,472 1,443 1,470 1,421
Refined product sales (000 BPD)
United States 859 863 830 880
Other Western Hemisphere 307 294 291 278
Europe 510 511 489 483
Other Eastern Hemisphere 764 736 724 693
----- ----- ----- -----
Total 2,440 2,404 2,334 2,334
(d) Texaco's concession to produce oil in Ecuador expired in June 1992. Accordingly,
1993 reflects no production. For the year 1992, Texaco's production in Ecuador
amounted to 23,000 BPD.
Impact of Special Items On Functional Net Income ($000,000)
Fourth Quarter Year
-------------- -----------
1993 1992 (b) 1993 1992 (b)
---- ---- ---- ----
Operating Earnings (Losses) from Continuing
Operations
Exploration and production
United States
Operating earnings before spec. items $ 114 $ 184 $ 548 $ 576
Tax law change and special charges - (26) (38) (33)
------ ------ ------ ------
Total operating earnings 114 158 510 543
------ ------ ------ ------
International
Operating earnings before spec. items 36 168 212 414
Tax law changes and net
special charges/gains - 2 110 2
------ ------ ------ ------
Total operating earnings 36 170 322 416
------ ------ ------ ------
Manufacturing, marketing and distribution
United States
Operating earnings before spec. items 100 53 306 288
Tax law change and special charges - (21) (91) (21)
------ ------ ------ ------
Total operating earnings 100 32 215 267
------ ------ ------ ------
International
Operating earnings before spec. items 120 86 464 335
Special charges - (35) (30) (35)
------ ------ ------ ------
Total operating earnings 120 51 434 300
------ ------ ------ ------
Nonpetroleum
Operating earnings before spec. items (2) 2 (9) (1)
Tax law change and special charges - (12) (4) (18)
------ ------ ------ ------
Total operating earnings (2) (10) (13) (19)
------ ------ ------ ------
Corporate/Nonoperating
Total before spec. items (84) (65) (389) (474)
Tax benefits, tax law change and
special charges 65 5 180 5
------ ------ ------ ------
Total Corporate/Nonoperating (19) (60) (209) (469)
------ ------ ------ ------
Net Income from continuing operations 349 341 1,259 1,038
------ ------ ------ ------
Discontinued chemical operations
Loss from operations - (28) (17) (26)
Loss on disposal (10) - (174) -
------ ------ ------ ------
Net Income (loss) from discontinued
operations (10) (28) (191) (26)
Cumulative effect of adoption of SFAS 106
and 109 as of January 1, 1992 - - - (300)
------ ------ ------ ------
Total Net Income, as reported $ 339 $ 313 $1,068 $ 712
====== ====== ====== ======
(b) Restated to reflect the separate identification of discontinued chemical operations.
