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SHELL OIL ANNOUNCES FOURTH-QUARTER, FULL-YEAR EARNINGS

 HOUSTON, Jan. 29 /PRNewswire/ -- Shell Oil Company's earnings for the fourth quarter of 1992 were $71 million, an increase of $94 million over the loss incurred in the fourth quarter of 1991. Net income from operations for 1992 was $445 million, compared with $20 million in 1991, President Frank H. Richardson announced today.
 "I am encouraged that the numerous actions taken over the past 18 months to reduce costs, improve operations and redeploy assets have resulted in substantial improvement in earnings from operations," Richardson said. "While important progress has been made, we will relentlessly pursue further improvements toward our earnings objectives.
 "We reduced our pretax cost structure by $650 million relative to 1991, and I am particularly pleased that both cash flow from operating activities and debt improved by about $600 million, further strengthening Shell's already strong debt-to-total-capital ratio.
 "The fourth quarter was a very active one in repositioning and strengthening our asset base. During the quarter, we finalized the purchase of a polyester resins business, the sales of our coal subsidiary and credit card center, and disposition of several producing properties. In mid-December, the new catalytic cracking unit at the Norco Manufacturing Complex started up smoothly, significantly increasing gasoline manufacturing capacity. During the year, we strengthened our marketing assets through acquisitions and sales.
 "As a result of both operating improvements and asset redeployment, the company's work force at year end was slightly more than 25,000, compared with nearly 32,000 at the beginning of 1991."
 The company adopted Statement of Financial Accounting Standards (SFAS) No. 106 in 1992, which deals with retiree health care benefits, and SFAS No. 109, the new income tax accounting standard. The cumulative effect of adopting these standards as of Jan. 1, 1992, decreased first-quarter and full-year earnings by $635 million after tax, although cash flows were not affected. Including these accounting changes, the company incurred a net loss of $190 million for the year. As a result of adopting SFAS No. 106, the first three quarters of 1992 were restated to recognize higher ongoing costs of about $40 million on a full-year basis.
 Special items in the 1992 quarter impaired after-tax earnings by $88 million, as compared with $60 million in 1991. For the full year, net special items excluding accounting changes benefited earnings $56 million, while in 1991, they reduced earnings by $157 million.
 Cash flows for the fourth quarter totaled $543 million from operating activities and $592 million from property sales, the largest of which was the sale of Shell's mining subsidiary. In the 1991 quarter, cash flows from operating activities totaled $720 million, while asset sales totaled $323 million. For all of 1992, cash flows from operating activities improved to $2,446 million from $1,878 million in 1991.
 Revenues were $5.6 billion for the fourth quarter and $21.7 billion for 1992, compared with $5.9 billion and $22.4 billion in the respective 1991 periods, reflecting lower refined product sales.
 These preliminary results are subject to audit.
 OIL AND GAS EXPLORATION AND PRODUCTION
 Oil and gas exploration and production earnings in the fourth quarter of 1992 amounted to $148 million, up $7 million over 1991. Earnings from operations improved $59 million, due primarily to successful implementation of cost-management programs in producing operations. Net special items in the 1992 quarter impaired earnings by $23 million, compared with a positive $29 million in 1991.
 For the year 1992, oil and gas exploration and production earnings were $469 million, up $228 million over 1991. Almost all of the improvement reflected cost reductions in exploration and production activities. Higher natural gas prices and production also contributed to the improvement.
 Domestic crude oil production declined in the fourth quarter and full-year 1992 from year-ago levels due to property sales. International production was lower in both 1992 periods, reflecting the disposition of Canadian tar sands and Malaysian operations, effective the first of 1992. These reductions were partially offset by performance of the Bullwinkle field, which exceeded expectations.
 Natural gas production increased in both the quarter and year, due primarily to new production from the Fairway field in Mobile Bay. Natural gas prices averaged 22 percent higher than the same 1991 quarter and 6 percent above full-year 1991.
 OIL PRODUCTS
 Oil products earnings in the fourth quarter of 1992 were $11 million, compared with a loss of $127 million in the 1991 period which included an environmental charge of $97 million. Margins were somewhat higher in the 1992 quarter.
 For the year 1992, oil products earned $6 million, compared with a loss of $164 million in 1991. Special items reduced earnings $4 million in 1992 and $133 million in 1991. Depressed refining margins characterized 1992. For 1993, the return of the Norco catalytic cracking unit significantly enhances Shell's capability to produce higher margin products. The impact of lower refined products sales volumes in 1992 from market withdrawals was more than offset by reductions in fixed operating costs.
 CHEMICAL PRODUCTS
 Chemical products incurred a loss of $53 million in the fourth quarter of 1992, compared with income of $7 million in 1991. The current quarter included net after-tax charges totaling $65 million, including an environmental provision for future remediation at the Rocky Mountain Arsenal in Colorado.
 Related to developments concerning the Rocky Mountain Arsenal, Richardson stated, "We are very pleased with the recent decision of the California Court of Appeals that reversed a lower court jury verdict covering 18 years of operations at the Arsenal. We look forward to a new trial of this matter, where we expect to establish coverage as to a significant portion of our liability at that location."
 Full-year 1992 earnings were $12 million, a decline of $145 million from 1991. However, before special items in both years, 1992 earnings of $96 million declined $40 million, as reduced prices for commodity chemicals, due to industry overcapacity, more than offset the impact of higher sales volumes.
 OTHER
 Other operations incurred losses of $4 million in the fourth quarter, and $70 million for the year primarily from the loss associated with the sale of the mining subsidiary.
 CORPORATE ITEMS
 Unallocated corporate costs were $31 million for the fourth quarter of 1992, an improvement of $25 million. For the year 1992, earnings benefited $28 million, a $266 million improvement over 1991. The key factors in the 1992 improvement were tax adjustments applicable to prior years, including related interest, which totaled about $200 million, while 1991 included a $30 million charge related to a litigation settlement. Financing costs for 1992 were slightly lower.
 INVESTMENT PROGRAM
 As previously announced, capital and exploratory expenditures for 1993 are projected to be $3.0 billion. This is up $400 million from 1992 levels. These expenditures include budgeted funds to begin the initial development of Shell's Prospect Mars discovery in the deep-water Gulf of Mexico.
 SHELL OIL COMPANY
 FINANCIAL AND OPERATING HIGHLIGHTS
 FINANCIAL HIGHLIGHTS
 (Millions of Dollars)
 FOURTH QUARTER YEAR
 1992 1991 1992 1991
 Total Revenues $ 5,591 $ 5,863 $21,702 $22,411
 Cash Flow Provided by
 Operating Activities $ 543 $ 720 $ 2,446 $ 1,878
 Net Income $ 71 $ (23) $ (190) $ 20
 Capital and Exploratory
 Expenditures $ 880 $ 796 $ 2,576 $ 3,038
 OPERATING SEGMENTS INFORMATION (Y)
 (Millions of Dollars)
 Segment Net Income
 Oil and Gas Exploration
 and Production $ 148 $ 141 $ 469 $ 241
 Oil Products 11 (127) 6 (164)
 Chemical Products (53) 7 12 157
 Other (4) 12 (70) 24
 Corporate Items (31) (56) 28 (238)
 NET INCOME FROM OPERATIONS $ 71 $ (23) $ 445 $ 20
 Cumulative effect of
 Accounting Changes (X) - - (635) -
 NET INCOME 71 (23) (190) 20
 CAPITAL AND EXPLORATORY EXPENDITURES
 (Millions of Dollars)
 Capital Expenditures
 Exploration and Production
 Oil and Gas $ 224 $ 384 $ 877 $ 1,421
 Other Energy 16 22 60 72
 Oil Products 212 201 790 805
 Chemical Products 297 44 424 199
 Other 33 33 88 118
 Total 782 684 2,239 2,615
 Exploratory Expenditures 98 112 337 423
 Total Capital and Explor-
 atory Expenditures $ 880 $ 796 $ 2,576 $ 3,038
 OPERATING HIGHLIGHTS
 (Millions of Dollars)
 FOURTH QUARTER YEAR
 1992 1991 1992 1991
 REVENUES
 Refined Products $ 2,828 $ 2,969 $10,643 $11,620
 Chemical Products 804 810 3,278 3,297
 Crude Oil 1,231 1,403 4,742 4,873
 Natural Gas 380 292 1,150 976
 Coal 94 163 567 634
 Other 254 226 1,322 1,011
 Total $ 5,591 $ 5,863 $21,702 $22,411
 CHEMICAL PRODUCTS REVENUES
 Primaries (olefins,aromatics)$ 251 $ 246 $ 980 $ 967
 Intermediates and solvents 268 304 1,152 1,290
 Polymers 242 233 1,013 942
 Other 43 27 133 98
 Total $ 804 $ 810 $ 3,278 $ 3,297
 VOLUMES (Thousands of barrels daily, except natural gas)
 Refined Products Sales
 Automotive gasoline 599 625 596 636
 Jet fuel 139 146 128 141
 Kerosene, heating and
 diesel oils 59 73 42 52
 Heavy fuel oils 111 116 108 113
 All other products 257 282 246 253
 Total 1,165 1,242 1,120 1,195
 Refinery Processing Intakes 1,026 1,041 972 1,002
 Net Production
 Crude oil and condensate
 United States 381 419 388 400
 International (A) 60 79 63 81
 Natural gas liquids 59 53 59 56
 Natural gas (millions of
 cubic feet daily) 1,486 1,398 1,482 1,399
 WEIGHTED AVERAGE PRICES OF NET PRODUCTION ($/BBL)
 Crude oil and condensate
 United States $ 16.11 $ 16.09 $ 15.78 $ 16.06
 International (A) $ 17.54 $ 19.41 $ 18.33 $ 18.54
 Natural gas liquids $ 14.02 $ 18.03 $ 13.11 $ 14.84
 (A) 1992 data excludes Malaysian operations, which were disposed of effective January 1992.
 CONSOLIDATED STATEMENT OF INCOME
 (Millions of Dollars)
 FOURTH QUARTER YEAR
 1992 1991 1992 1991
 REVENUES
 Sales and Other Operating
 Revenue $ 6,157 $ 6,427 $23,711 $24,700
 Less: Consumer Excise
 and Sales Taxes 658 570 2,551 2,499
 5,499 5,857 21,160 22,201
 Equity Earnings, Interest
 and Other Income 92 6 542 210
 Total 5,591 5,863 21,702 22,411
 COSTS AND EXPENSES
 Purchases and Operating
 Expenses 4,475 4,704 16,618 17,582
 Selling, General and
 Administrative Expenses 237 376 1,146 1,139
 Exploration, Including
 Exploratory Dry Holes 96 110 325 410
 Research Expenses 44 41 161 172
 Depreciation, Depletion,
 Amortization and
 Retirements 625 516 2,082 2,062
 Interest and Discount
 Amortization 57 72 250 276
 Income and Operating Taxes
 Operating Taxes 138 186 643 731
 Federal and Other Income
 Taxes (152) (119) 32 19
 Total 5,520 5,886 21,257 22,391
 NET INCOME FROM OPERATIONS $ 71 $ (23) $ 445 $ 20
 Cumulative effect of
 Accounting changes (X) - - (635) -
 NET INCOME 71 (23) (190) 20
 NOTE TO OPERATING SEGMENTS INFORMATION
 AND CONSOLIDATED STATEMENT OF INCOME
 (X) Cumulative effect of Accounting Changes consists of:
 $ Million
 Adoption of Statement of Financial
 Accounting Standards No. 106 "Other
 Postretirement Benefits" 627
 Adoption of Statement of Financial
 Accounting Standards No. 109 "Accounting
 for Income Taxes" 8
 ---
 Net cumulative effect of accounting
 changes 635
 (Y) Reported Net Income for the first three quarters of 1992
 has been restated to reflect the adoption of FAS
 106 & 109 effective Jan. 1, 1992.
 FIRST SECOND THIRD FOURTH FULL
 QUARTER QUARTER QUARTER QUARTER YEAR
 AS ORIGINALLY REPORTED
 SEGMENT NET INCOME
 Oil and Gas Exploration
 and Production $ 111 $ 113 $ 106 $ - $ -
 Oil Products (34) 18 23 - -
 Chemical Products 39 17 16 - -
 Other 7 2 (73) - -
 Corporate Items 71 33 (44) - -
 NET INCOME 194 183 28 - -
 RESTATED
 SEGMENT NET INCOME
 Oil and Gas Exploration
 and Production $ 108 $ 110 $ 103 $ 148 $ 469
 Oil Products (38) 14 19 11 6
 Chemical Products 37 15 14 (53) 12
 Other 5 1 (74) (4) (70)
 Corporate Items 71 33 (44) (31) 28
 INCOME FROM OPERATIONS 183 173 18 71 445
 Cumulative Effect of
 Accounting Changes (635) - - - (635)
 NET INCOME (452) 173 18 71 (190)
 -0- 1/29/93
 /CONTACT: H.R. Hutchins or K.L. Borah, 713/241-4544, or M. Sternesky, 212-632-4888, all of Shell Oil Company/


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

PS -- NY018 -- 0660 01/29/93 10:09 EST
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