EXHIBIT 99.1
TEXACO REPORTS FOURTH QUARTER AND YEAR 2000 RESULTS
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FOR IMMEDIATE RELEASE: WEDNESDAY, JANUARY 24, 2001.
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WHITE PLAINS, N.Y., January 24 -- Texaco reported today fourth quarter
2000 income before special items of $840 million ($1.55 per share). Net
income for the period was $545 million ($1.00 per share).
EARNINGS SUMMARY
Fourth Quarter Year
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2000 1999 2000 1999
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Income before special
items (millions) $ 840 $ 370 $2,898 $1,214
Per share $ 1.55 $ .67 $ 5.31 $ 2.21
Net income (millions) $ 545 $ 318 $2,542 $1,177
Per share $ 1.00 $ .58 $ 4.65 $ 2.14
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Chairman and Chief Executive Officer Peter I. Bijur commented, "We had an
outstanding quarter and an outstanding year as we achieved record earnings.
Strong worldwide crude oil and U.S. natural gas prices contributed greatly to
our upstream results. Operationally, we met our production targets in the fourth
quarter and ended the year with new production from the Captain B field
development and the return to full production at the Erskine field, both in the
U.K. North Sea. We also continued to improve our upstream portfolio by
concluding the sales of non-strategic assets and by acquiring coalbed methane
gas assets through our recent acquisition of EnerVest San Juan.
"Downstream performance worldwide continued to be adversely affected by high
and volatile crude oil prices. Although refining margins were generally strong
due to tight supply and demand balances, marketing margins throughout the world
remained under intense pressure as high product acquisition costs could not be
fully recovered in the marketplace.
"We ended the year in excellent financial shape and are confident we can
continue to deliver solid results."
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Commenting on Texaco's proposed merger with Chevron, Bijur added, "The
integration teams continue to make good progress toward the goal of completing
the merger in the mid-year time frame and positioning the new company,
ChevronTexaco, as one of the world's largest and most competitive energy
companies."
Fourth Quarter Year
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Texaco Inc. (Millions of dollars): 2000 1999 2000 1999
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Income before special items $ 840 $ 370 $2,898 $1,214
----- ----- ------ ------
Net losses on major asset sales (17) (3) (94) (62)
Tax issues 50 41 96 106
Tax benefits on asset sales 70 40 70 40
Inventory valuation adjustments - - - 152
Write-downs of assets (272) (81) (272) (157)
Environmental, litigation and
royalty issues (116) (42) (138) (42)
Reorganization, restructuring,
employee related and other costs - (7) (8) (74)
Merger costs (10) - (10) -
----- ----- ------ ------
Special items (295) (52) (356) (37)
----- ----- ------ ------
Net income $ 545 $ 318 $2,542 $1,177
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Details on special items are included in the following segment information.
OPERATING RESULTS
EXPLORATION AND PRODUCTION
Fourth Quarter Year
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United States (Millions of dollars): 2000 1999 2000 1999
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Operating income before
special items $ 547 $ 243 $1,788 $ 666
Special items (155) (35) (270) (14)
----- ----- ------ ------
Total operating income $ 392 $ 208 $1,518 $ 652
===== ===== ====== ======
U.S. Exploration and Production earnings for this year's fourth quarter and
full year were significantly higher than last year due to higher crude oil and
natural gas prices. During the fourth quarter the spot price of WTI averaged
$31.96 per barrel, peaking at $36.22 per barrel in November. Prices declined
toward year-end amid signs of accumulating oil inventories and uncertainty
regarding
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the future course of OPEC production. Texaco's realized crude oil prices for the
fourth quarter and year 2000 were $27.24 and $26.00 per barrel, 33 percent and
77 percent higher than last year.
Continuing concerns over low U.S. natural gas storage levels and strong
weather-driven demand helped push U.S. natural gas prices to record levels with
the spot price of gas at the Henry Hub peaking at $10.53 per thousand cubic feet
(MCF) in December. For the fourth quarter and year 2000, Texaco's average
realized natural gas prices were $5.18 and $3.69 per MCF, 113 percent and 69
percent above last year.
Daily production decreased 12 percent for the fourth quarter and ten percent
for the year. Half of this expected reduction was due to the sale of non-core
producing properties and the balance of the decrease was due to natural field
declines partly offset by new production.
Operating expenses increased three percent for the fourth quarter and seven
percent for the year as higher crude oil and natural gas prices led to
significantly higher utilities expenses and production taxes. Exploratory
expenses for the fourth quarter were $50 million before tax, $80 million lower
than last year. Exploratory expenses for the year 2000 were $120 million before
tax, $114 million below last year.
Special charges for 2000 of $270 million included $129 million of net losses
on the sale of non-core producing properties, including $14 million in the
fourth quarter. The fourth quarter also included special charges of $126 million
for write-downs of assets and $15 million for crude oil and gas royalty
settlements.
The year 1999 included net special charges of $14 million comprised of an $11
million charge for employee separation costs, a $30 million charge for a crude
oil royalty settlement, an $18 million gain on asset sales in California and a
$9 million production tax refund. Special charges of $35 million in the fourth
quarter included the above referenced crude oil royalty settlement.
Fourth Quarter Year
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International (Millions of dollars): 2000 1999 2000 1999
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Operating income before
special items $ 271 $ 195 $1,058 $ 386
Special items (43) (24) 19 (26)
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Total operating income $ 228 $ 171 $1,077 $ 360
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International Exploration and Production operating results for the fourth
quarter and year 2000 were considerably higher than last year due mostly to
higher crude oil prices and lower expenses.
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Market conditions kept crude oil prices strong throughout the fourth quarter and
year 2000. Our realized crude oil prices for the fourth quarter and year 2000
were $25.51 and $24.83 per barrel, 24 percent and 63 percent higher than last
year. Average natural gas prices were $1.81 per MCF for the fourth quarter and
$1.58 per MCF for the year, 39 percent and 18 percent above last year.
Daily production decreased 12 percent for the fourth quarter and seven
percent for the year. The sale of non-core producing properties caused 70
percent of this decrease in the fourth quarter and 40 percent of the decrease
for the year. Other factors contributing to the production decrease were
maintenance and repairs in our U.K. North Sea operations and lower lifting
entitlements for cost recovery in Indonesia as a result of higher crude oil
prices. Partly offsetting these decreases were production in the Partitioned
Neutral Zone and the Karachaganak field in the Republic of Kazakhstan which
continue to be above last year's levels. Also, first production from the second
phase (Area B) of the Captain field in the U.K. North Sea began late in
December. Our share of total production is expected to rise to a rate of 72,000
barrels per day during 2001. Additionally, the Erskine field in the U. K.
resumed production in December after being shut in for most of the year to
replace a pipeline.
Operating expenses decreased 15 percent for the fourth quarter and seven
percent for the year 2000 in line with production declines. Exploratory expenses
for the fourth quarter were $89 million before tax, comparable with last year's
level. Exploratory expenses for the year 2000 were $238 million before tax, $29
million lower than last year.
Special benefits in 2000 of $19 million included $76 million for net gains on
the sale of non-core producing properties and $14 million for net losses
resulting from the Erskine pipeline interruption in the U.K. North Sea recorded
earlier in the year. In addition to these, in the fourth quarter we recorded
gains of $14 million for asset sales, charges of $37 million for prior years'
tax adjustments and a $20 million charge for an asset write-down.
Results for 1999 included special charges of $26 million, including $24
million in the fourth quarter for prior years' tax issues in the U.K.
REFINING, MARKETING AND DISTRIBUTION
Fourth Quarter Year
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United States (Millions of dollars): 2000 1999 2000 1999
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Operating income before
special items $ 68 $ 4 $ 243 $ 287
Special items (50) - (85) (79)
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Total operating income $ 18 $ 4 $ 158 $ 208
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U.S. Refining, Marketing and Distribution earnings before special items were
higher than last year for the fourth quarter, but lower for the year.
Fourth quarter earnings for Equilon improved due to substantially higher
refining margins. However, results for the year declined due to depressed
marketing margins as pump prices lagged increases in supply costs in a very
competitive market. Weak lubricant margins as a result of higher base oil costs
also negatively impacted earnings. Maintenance activity at the Puget Sound,
Martinez and Wood River refineries adversely impacted results for both years.
Compared to last year, Motiva's results benefited from improved East and Gulf
Coast refining margins stemming from tight supplies due to increased demand,
industry refinery downtime and unusually cold weather. Maintenance activities
this year at the Delaware City and Port Arthur refineries adversely impacted
results.
Results for 2000 included special charges of $85 million, of which $50
million were recorded in the fourth quarter. In the fourth quarter, $17 million
in additional losses were recorded for the Wood River refinery and marketing
asset sales along with charges of $10 million for asset write-downs and $23
million for environmental and litigation issues. Recorded earlier in the year
were special charges of $31 million for the sale of the Wood River refinery, as
well as charges of $22 million for environmental and litigation issues and
benefits of $18 million for an employee benefit revision.
The year 1999 included special charges of $76 million for losses on refinery
asset sales and $11 million for reorganization, restructuring and employee
separation costs and a special benefit of $8 million for inventory valuation
adjustments.
Fourth Quarter Year
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International (Millions of dollars): 2000 1999 2000 1999
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Operating income before
special items $ 58 $ 45 $ 272 $ 338
Special items (117) (52) (129) 32
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Total operating income (loss) $ (59) $ (7) $ 143 $ 370
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International Refining and Marketing earnings before special items for the
fourth quarter of 2000 increased from last year. Refining results improved
dramatically in Europe and in the Caltex area from higher margins in the U.K.,
Netherlands and Asia, but decreased in Latin America due to increased crude
costs. Rising utility expenses negatively impacted refining results in all
areas. Marketing results declined from lower margins in the Caltex area, Europe
and Latin America.
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Results for the year 2000 declined due to weak marketing margins from
increased costs and highly competitive market conditions in the Caltex region,
Latin America, and Europe. Lower volumes impacted results in most areas with the
exception of Europe where market share in the U.K. increased. Refining results
were mixed as European and Asian margins improved, while the inability to fully
recover increased crude costs negatively impacted refining margins in Latin
America. Rising utility costs negatively impacted refining results in all areas.
For the fourth quarter of 2000, special charges of $117 million included $112
million for the write-down of assets, mainly at the Panama Refinery and $5
million for environmental issues. Results for 2000 also included a first quarter
charge of $12 million for employee separation costs.
Results for the fourth quarter of 1999 included special charges of $23
million for asset write-downs in Caltex and Europe, $22 million in prior year
tax charges and $7 million for Caltex restructuring. Results for 1999 also
included special benefits of $144 million for inventory valuation adjustments
and $54 million for a Korean tax revaluation. Additionally, 1999 included $80
million for our share of Caltex's loss on the sale of its equity interest in Koa
Oil, plus restructuring, reorganization and employee separation costs of $34
million.
GLOBAL GAS AND POWER
Fourth Quarter Year
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(Millions of dollars): 2000 1999 2000 1999
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Operating income before
special items $ 17 $ 5 $ 50 $ 21
Special items - (32) - (35)
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Total operating income (loss) $ 17 $ (27) $ 50 $ (14)
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Operating results for 2000 benefited from improved natural gas liquids and
natural gas margins. Results for 1999 included gains from several asset sales,
including a gas gathering pipeline in the U.S. and our 50 percent interest in a
U.K. retail gas-marketing venture.
Results for 1999 included a special charge of $32 million in the fourth
quarter for gas plant write-downs and employee separation costs of $3 million
recorded earlier in the year.
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CORPORATE/NON-OPERATING RESULTS
Fourth Quarter Year
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(Millions of dollars): 2000 1999 2000 1999
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Results before special items $ (116) $ (122) $ (502) $ (481)
Special items 70 91 109 85
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Total corporate/non-operating $ (46) $ (31) $ (393) $ (396)
===== ===== ====== ======
Corporate and non-operating results for the fourth quarter and year 2000
included lower net interest and tax expenses and higher corporate expenses. The
increase in corporate expenses included spending for our Olympic sponsorship
program and increased incentive compensation for employees associated with the
higher level of earnings. Results for 1999 benefited from a gain on the sale of
marketable securities earlier in the year.
Results for the fourth quarter of 2000 included net special benefits of $70
million. These included $87 million of favorable prior years' income tax
adjustments and tax benefits of $70 million on the sale of an interest in a
subsidiary. Also, recorded in the fourth quarter were charges of $73 million for
environmental and litigation issues, $4 million for asset write-downs and $10
million for costs associated with the proposed merger with Chevron. Results for
the full year also included a special benefit of $46 million for favorable
income tax settlements and a special charge of $7 million for early
extinguishment of debt associated with the sale of a U.K. North Sea offshore
producing facility.
Results for 1999 included net special benefits of $85 million. Recorded in
the fourth quarter were $89 million of favorable prior years' income tax
adjustments and tax benefits of $40 million attributable to the sale of an
interest in a subsidiary. Other fourth quarter items included charges of $26
million for asset write-downs and $12 million for environmental issues. A $6
million charge for employee separation costs was recorded earlier in the year.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures were $4,234 million for the year 2000,
compared with $3,893 million for 1999.
Total upstream expenditures increased by 12 percent as we continued to focus
on high impact projects. In the United States spending increased 21 percent.
Contributing to this increase was the fourth quarter acquisition of EnerVest San
Juan Acquisition Limited Partnership whose assets consist
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entirely of coalbed methane gas properties located in the San Juan Basin of
southwestern Colorado and northwestern New Mexico. In addition, drilling and
workover expenditures in 2000 were focused in the Central, Gulf and Permian
regions while 1999 spending was concentrated in the deepwater Gulf of Mexico.
Internationally, investment continued in the Malampaya natural gas project in
the Philippines and the Karachaganak field in Kazakhstan. In addition to these
projects, we completed spending on our development of the Captain B project in
the U.K. North Sea which began production in December and continued development
work in offshore Nigeria deepwater and China.
Expenditures for Global Gas and Power increased more than 19 percent in 2000.
Contributing to this increase was the purchase of a 20 percent investment in
Energy Conversion Devices, Inc. and the development of a power project in
Thailand.
In the United States downstream, expenditures were slightly higher due to
increased spending on marketing initiatives. In the international segment,
expenditures decreased due to the completion of a project at the Pembroke
refinery last year and lower spending in the U.K. marketing and Latin America
segments in 2000.
X X X
CONTACT: Andy Norman 914-253-4068
Paul Weeditz 914-253-7745
INVESTOR RELATIONS:
Elizabeth Smith 914-253-4478
Listen in live to Texaco's fourth quarter 2000 earnings discussion with
financial analysts on Wednesday, January 24th at 11:30 am EST at:
http://www.webevents.broadcast.com/texaco/q400earnings
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For technical assistance, call Sheila Lujan at 800-366-9831
Note: This press release contains a number of forward-looking statements
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. In particular, statements made concerning
Texaco's expected performance and financial results in future periods are based
upon Texaco's current expectations and beliefs and are subject to a number of
known and unknown risks and uncertainties that could cause actual results to
differ materially from those described in the forward-looking statements. The
following factors known to Texaco, among others, could cause Texaco's actual
results to differ materially from those described in the forward-looking
statements: decreased demand for motor fuels, natural gas and other products;
worldwide and industry economic conditions; inaccurate forecasts of crude oil,
natural gas and petroleum product prices and production; higher costs, expenses
and interest rates; etc. In addition, you are encouraged to review Texaco's
latest reports filed with the SEC, including Texaco's Annual Report on Form 10-K
filed with the SEC on March 24, 2000, which describes a number of additional
risks and uncertainties that could cause actual results to vary materially from
those listed in the forward-looking statements made in this press release.
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Income (loss) Fourth Quarter (a) Year (a)
(Millions of dollars) ------------------ ------------
2000 1999 2000 1999
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Exploration and production
United States $ 392 $ 208 $1,518 $ 652
International 228 171 1,077 360
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Total 620 379 2,595 1,012
Refining, marketing and distribution
United States 18 4 158 208
International (59) (7) 143 370
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Total (41) (3) 301 578
Global gas and power 17 (27) 50 (14)
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Total operating segments 596 349 2,946 1,576
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Other business units (5) - (11) (3)
Corporate/Non-operating (46) (31) (393) (396)
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Net income $ 545 $ 318 $2,542 $1,177
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Net income per common
share (dollars) - diluted $1.00 $ .58 $ 4.65 $ 2.14
Average number of common shares
outstanding for computation of
earnings per share (millions)
- diluted 542.6 546.4 544.0 537.9
Provision for income taxes
included in net income $ 287 $ 109 $1,676 $ 602
<FN>
(a) Includes special items indicated in this release.
</FN>
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Other Financial Data Fourth Quarter Year
(Millions of dollars) -------------- -------------
2000 1999 2000 1999
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Revenues $14,431 $10,555 $51,130 $35,691
Total assets as of December 31 $30,900(b) $28,972
Stockholders' equity as
of December 31 $13,440(b) $12,042
Total debt as of December 31 $ 7,200(b) $ 7,647
Capital and exploratory
expenditures
Exploration and production
United States $ 427 $ 276 $ 1,088 $ 900
International 606 958 1,967 1,823
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Total 1,033 1,234 3,055 2,723
Refining, marketing and
distribution
United States 157 136 405 379
International 145 193 380 487
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Total 302 329 785 866
Global gas and power 81 150 333 279
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Total operating segments 1,416 1,713 4,173 3,868
Other business units 15 3 61 25
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Total $ 1,431 $ 1,716 $ 4,234 $ 3,893
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Exploratory expenses
included above
United States $ 50 $ 130 $ 120 $ 234
International 89 89 238 267
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Total $ 139 $ 219 $ 358 $ 501
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Dividends paid to
common stockholders $ 243 $ 245 $ 976 $ 964
Dividends per common
share (dollars) $ .45 $ .45 $ 1.80 $ 1.80
Dividend requirements for
preferred stockholders $ 4 $ 3 $ 15 $ 29
<FN>
b) Preliminary
</FN>
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Operating Data Fourth Quarter Year
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2000 1999 2000 1999
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Exploration and production
United States
Net production of crude oil and
natural gas liquids (MBPD) 342 381 356 395
Net production of natural gas
available for sale (MMCFPD) 1,259 1,468 1,310 1,462
----- ----- ----- -----
Total net production (MBOEPD) 552 626 574 639
Natural gas sales (MMCFPD) 4,142 3,635 3,854 3,373
Average U.S. crude (per bbl.) $27.24 $20.50 $26.00 $14.70
Average U.S. natural
gas (per mcf) $ 5.18 $ 2.43 $ 3.69 $ 2.18
Average WTI (Spot) (per bbl.) $31.96 $24.55 $30.37 $19.31
Average Kern (Spot) (per bbl.) $23.91 $18.98 $24.10 $13.35
International
Net production of crude oil and
natural gas liquids (MBPD)
Europe 112 161 120 147
Indonesia 122 138 122 152
Partitioned Neutral Zone 147 132 139 124
Other 55 72 63 67
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Total 436 503 444 490
Net production of natural
gas available for sale (MMCFPD)
Europe 206 269 217 263
Colombia 196 183 194 165
Other 153 126 146 109
------ ----- ------ ------
Total 555 578 557 537
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Total net production
(MBOEPD) 529 599 537 579
Natural gas sales (MMCFPD) 582 616 586 567
Average International
crude (per bbl.) $25.51 $20.57 $24.83 $15.23
Average International
natural gas (per mcf) $ 1.81 $ 1.30 $ 1.58 $ 1.34
Average U.K. natural
gas (per mcf) $ 3.31 $ 2.29 $ 2.59 $ 2.35
Average Colombia natural
gas (per mcf) $ 1.33 $ .74 $ 1.18 $ .67
Total worldwide net
production (MBOEPD) 1,081 1,225 1,111 1,218
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Operating Data Fourth Quarter Year
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2000 1999 2000 1999
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Refining, marketing and distribution
United States
Refinery input (MBPD)
Equilon area 204 367 246 374
Motiva area 289 267 278 297
--- --- --- ---
Total 493 634 524 671
Refined product sales (MBPD)
Equilon area 676 650 688 682
Motiva area 365 383 361 377
Other 378 263 324 288
--- --- --- ---
Total 1,419 1,296 1,373 1,347
International
Refinery input (MBPD)
Europe 393 346 374 353
Caltex area 369 355 356 397
Latin America/West Africa 72 69 64 70
----- ----- ----- -----
Total 834 770 794 820
Refined product sales (MBPD)
Europe 657 622 636 606
Caltex area 540 633 540 614
Latin America/West Africa 521 515 484 493
Other 99 32 92 76
----- ----- ----- -----
Total 1,817 1,802 1,752 1,789