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SHELL OIL ANNOUNCES INCREASED THIRD QUARTER AND NINE MONTHS EARNINGS

 HOUSTON, Oct. 29 /PRNewswire/ -- Shell Oil Company earned $187 million in the third quarter of 1993, an increase of $169 million over the third quarter of 1992. Earnings for the nine months of 1993 totaled $628 million, compared with a $260 million loss in the 1992 period, which included charges of $635 million from accounting changes, President Philip J. Carroll announced today.
 "The third quarter's results continue the recent encouraging trend in earnings improvement for Shell Oil. We remain strongly committed to further improvements in the months ahead," Carroll said.
 Operationally, third-quarter earnings benefited from lower costs reflecting continued progress from performance improvement programs in all three principal businesses and improved margins in oil and chemical products. However, these benefits were partially offset by lower crude oil prices, which averaged almost $4.00 per barrel less than in the third quarter of 1992.
 The quarter included charges impacting all three segments of $102 million associated with Financial Accounting Standard 109 related to the 1993 federal income tax rate increase and $26 million for work-force reduction. Other special items, primarily a prior-year tax adjustment, benefited earnings a net $76 million.
 For the nine months of 1993, operating earnings benefited from lower costs, higher natural gas prices and improved refined products margins. Overall, special items had minimal net impact in 1993, while they benefited 1992 by $144 million.
 Operating cash flows totaled $1,513 million in the third quarter of 1993, compared with $1,153 million last year. For the nine-month period, operating cash flows were $2,162 million, compared with $1,903 million in 1992. Cash flows in both 1993 periods increased mainly because of improved earnings.
 Capital expenditures were $1,285 million in the nine months of 1993, a decrease of $172 million from last year, reflecting reduced spending primarily in oil products.
 "We now expect total capital and exploratory expenditures for all of 1993 to amount to $2.3 billion, down about $300 million from our mid- year estimate. This reduction reflects our sustained efforts throughout the year in achieving more cost-effective ways to complete our projects and meet environmental compliance objectives," Carroll said.
 Revenues were $5.4 billion for the current quarter, compared with $5.7 billion in 1992, and $15.9 billion for the nine months of 1993, compared with $16.1 billion last year. Total debt during the nine months of 1993 declined $400 million to $3.3 billion, bringing Shell's debt-to-total-capital ratio to 18 percent.
 OIL AND GAS EXPLORATION AND PRODUCTION
 Oil and gas exploration and production earnings in the third quarter of 1993 were $112 million, an increase of $9 million over the same 1992 period. Special items in the third quarter of 1993 benefited earnings $11 million, as a favorable prior-year tax adjustment offset the combined effects of the tax-rate increase, the work-force reduction charge and other restructuring items. In the 1992 quarter, special items reduced earnings $62 million.
 Operating earnings in the 1993 quarter were $64 million less than in the same 1992 period primarily due to significantly lower crude oil prices. This factor more than offset continued benefits from lower costs achieved from performance improvement programs.
 For the nine months of 1993, oil and gas exploration and production earnings were $363 million, compared with $322 million last year. Lower producing expenses have continued to be a major improvement factor for operational earnings. The benefit of higher natural gas prices was offset by lower crude oil production volumes and prices. Special items, which benefited both nine months periods, were $11 million for 1993 and $34 million for 1992.
 Domestic crude oil production in the third quarter and nine months of 1993 decreased due to natural declines and property sales. In spite of property sales, natural gas production in both periods increased.
 OIL PRODUCTS
 Oil products earnings were $77 million in the third quarter of 1993, an increase of $58 million over the same 1992 period. On an operating basis, earnings improved $77 million. For the nine months of 1993, oil products earnings were $248 million, an increase of $253 million. Both 1993 periods reflected improvements from continuing cost-management activities and stronger refined product margins.
 Special items decreased earnings $33 million in the third quarter of 1993. They included effects from the tax-rate increase and work-force reduction charge. Special items reduced earnings in the third quarter of 1992 by $14 million.
 Refined product sales volumes were up 69,000 and 79,000 barrels per day over the respective 1992 periods, due primarily to higher inter- refiner sales of gasolines.
 CHEMICAL PRODUCTS
 Chemical products earnings for the third quarter of 1993 were $46 million, up $32 million over the same 1992 period. For the nine months of 1993, earnings were $154 million, up $89 million. For both periods, the improvement reflected increased sales volumes of polymers, including our new polyester resins, and lower feedstock costs for commodity chemicals. Aside from capacity additions, total costs were down for both the third quarter and nine months of 1993.
 Special items reduced both quarters by $17 million. In 1993, they consisted primarily of the tax-rate increase and work-force reduction charge. Nine-months 1993 earnings were reduced $2 million compared with $19 million a year ago.
 CORPORATE/OTHER
 Corporate/Other costs totaled $48 million for the third quarter of 1993, a decrease of $70 million from the 1992 period. For the nine months of 1993, these costs totaled $137 million, an increase of $130 million. Exclusive of special items, costs declined in both 1993 periods primarily due to lower financing costs.
 Special items increased third-quarter 1993 costs $13 million, as environmental provisions, primarily a charge of $140 million for future remediation at the Rocky Mountain Arsenal in Colorado, were substantially offset by a prior period tax adjustment. Special items in the third quarter of 1992 reduced earnings $60 million, while benefiting the nine months $133 million.
 SHELL OIL COMPANY
 FINANCIAL AND OPERATING HIGHLIGHTS
 FINANCIAL HIGHLIGHTS
 (Millions of Dollars)
 THIRD QUARTER NINE MONTHS
 1993 1992 1993 1992
 Total Revenues $ 5,369 $ 5,665 $15,937 $16,111
 Cash Provided by Operating
 Activities $ 1,513 $ 1,153 $ 2,162 $ 1,903
 Net Income $ 187 $ 18(X)$ 628 $ (260)(X)
 Capital and Exploratory
 Expenditures $ 529 $ 552 $ 1,526 $ 1,695
 OPERATING SEGMENTS INFORMATION(X)
 (Millions of Dollars)
 Segment Net Income
 Oil and Gas Exploration
 and Production $ 112 $ 103 $ 363 $ 322
 Oil Products 77 19 248 (5)
 Chemical Products 46 14 154 65
 Corporate/Other (48) (118) (137) (7)
 Income from Operations 187 18 628 375
 Cumulative effect of
 Accounting Changes - - - (635)
 NET INCOME $ 187 $ 18 $ 628 $ (260)
 CAPITAL AND EXPLORATORY EXPENDITURES
 (Millions of Dollars)
 Capital Expenditures
 Exploration and Production
 Oil and Gas $ 209 $ 206 $ 580 $ 626
 Other Energy - 38 1 71
 Oil Products 171 160 439 579
 Chemical Products 72 43 208 126
 Other 14 22 57 55
 Total 466 469 1,285 1,457
 Exploratory Expenditures 63 83 241 238
 Total Capital and
 Exploratory Expenditures $ 529 $ 552 $ 1,526 $ 1,695 (X) Restated for effect of accounting changes implemented in 1992 as discussed in Note 2 of the Notes to Consolidated Financial Statements in the 1992 Annual Report on Form 10-K filed with the Securities and Exchange Commission.
 OPERATING HIGHLIGHTS
 (Millions of Dollars)
 THIRD QUARTER NINE MONTHS
 1993 1992 1993 1992
 REVENUES
 Refined Products $ 2,775 $ 2,904 $ 8,186 $ 7,815
 Chemical Products 930 850 2,703 2,474
 Crude Oil 1,096 1,228 3,361 3,510
 Natural Gas 353 292 981 770
 Coal - 165 - 472
 Other 215 226 706 1,070
 Total $ 5,369 $ 5,665 $15,937 $16,111
 CHEMICAL PRODUCTS REVENUES
 Primaries
 (olefins, aromatics) $ 217 $ 255 $ 655 $ 729
 Intermediates and solvents 325 299 905 884
 Polymers 372 264 1,069 771
 Other 16 32 74 90
 Total $ 930 $ 850 $ 2,703 $ 2,474
 VOLUMES (Thousands of barrels daily, except natural gas)
 Refined Products Sales
 Automotive gasoline 669 611 632 594
 Jet fuel 150 137 147 125
 Kerosene, heating and
 diesel oils 38 39 44 36
 Heavy fuel oils 93 85 106 107
 All other products 282 291 255 243
 Total 1,232 1,163 1,184 1,105
 Refinery Processing Intakes 889(Y) 1,020 932(Y) 954
 Net Production
 Crude oil and condensate
 United States 348 377 347 390
 International 70 63(Z) 68 63(Z)
 Natural gas liquids 58 62 56 59
 Natural gas (millions of
 cubic feet daily) 1,556 1,477 1,513 1,480
 WEIGHTED AVERAGE PRICES OF NET PRODUCTION ($/BBL)
 Crude oil and condensate
 United States $ 13.43 $ 17.38 $ 14.73 $ 15.68
 International $ 15.34 $ 19.37(Z)$ 16.70 $ 18.56(Z)
 Natural gas liquids $ 12.28 $ 14.35 $ 13.33 $ 12.80
 (Y) Includes the company's 50 percent equity portion of the Deer Park Refinery, effective April 1, 1993.
 (Z) 1992 data excludes Malaysian and Canadian operations, which were disposed of effective January 1992.
 CONSOLIDATED STATEMENT OF INCOME
 (Millions of Dollars)
 THIRD QUARTER NINE MONTHS
 1993 1992(X) 1993 1992(X)
 ---- ---- ---- ----
 REVENUES
 Sales and Other Operating
 Revenue $ 6,001 $ 6,275 $17,678 $17,554
 Less: Consumer Excise
 and Sales Taxes 687 654 1,960 1,893
 Total 5,314 5,621 15,718 15,661
 Equity Earnings, Interest
 and Other Income 55 44 219 450
 Total 5,369 5,665 15,937 16,111
 COSTS AND EXPENSES
 Purchases and Operating
 Expenses 4,311 4,327 12,301 12,143
 Selling, General and
 Administrative Expenses 244 453 657 908
 Exploration, Including
 Exploratory Dry Holes 62 80 233 229
 Research Expenses 38 39 111 117
 Depreciation, Depletion,
 Amortization and
 Retirements 455 452 1,307 1,458
 Interest and Discount
 Amortization 50 61 155 192
 Income and Operating Taxes
 Operating Taxes 119 167 412 505
 Federal and Other Income
 Taxes (97) 68 133 184
 Total 5,182 5,647 15,309 15,736
 INCOME FROM OPERATIONS 187 18 628 375
 Cumulative effect of
 accounting changes - - - (635)
 NET INCOME $ 187 $ 18 $ 628 $ (260)
 Net Income Change 939 Percent Increase
 -0- 10/29/93
 /CONTACT: Kitty Borah, 713-241-4544, or Dee Dee Taylor, 713-241-4544 & 713/241-4544, or Mike Sternesky, 212-632-4888 & 212-632-4888, all of Shell Oil/
 (SC RD)


CO: Shell Oil Company ST: Texas IN: OIL SU: ERN

LG -- NY012 -- 8366 10/29/93 09:13 EDT
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