UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 2002
Or
[ ] Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission file number 1-8483
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
MOLYCORP, INC. 401(K) RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and the address of
its principal executive office:
Unocal Corporation,
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
The following financial statements reflect the status of the Molycorp, Inc.
401(k) Retirement Savings Plan as of December 31, 2002 and 2001, and the results
of its transactions for each of the years then ended.
Page Number
Report of Independent Auditors 1
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2002 and 2001 2
Notes to Financial Statements 3-6
Signature 7
Supplemental Schedules*:
Schedule of Assets Held for Investment Purposes
at December 31, 2002 8
Exhibit Index 9
* Supplemental schedules required by the Employee Retirement Income Security Act
of 1974 that are omitted are not applicable to the Molycorp, Inc. 401(k)
Retirement Savings Plan.
REPORT OF INDEPENDENT AUDITORS
To the Administrative Committee of the Molycorp, Inc. 401(k)
Retirement Savings Plan:
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of the Molycorp, Inc. 401(k) Retirement Savings Plan (the "Plan") at
December 31, 2002 and 2001, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America which require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at December 31, 2002 is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Los Angeles, California
June 6, 2003
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Molycorp, Inc. 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31,
2002 2001
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Investments at fair value $173,721 $142,670
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Net assets available for benefits $173,721 $142,670
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Molycorp, Inc. 401(k) Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31,
2002 2001
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Additions:
Additions to (deductions from) net assets attributed to:
Investment income (loss)
Net depreciation in fair value of investments (11,982) $(10,505)
Interest 1,464 3,604
Dividends 159 230
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Total investment loss (10,359) (6,671)
Participant contributions 42,608 37,347
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Total additions 32,249 30,676
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Deductions:
Participant withdrawals & distributions 1,198 16,309
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Total deductions 1,198 16,309
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Net increase 31,051 14,367
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Net assets available for benefits:
Beginning of year 142,670 128,303
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End of year $173,721 $142,670
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See accompanying notes to financial statements.
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NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN
General
The Molycorp, Inc. 401(k) Retirement Savings Plan (the "Plan") is
sponsored by Molycorp, Inc. (the "Company"), an indirect wholly owned subsidiary
of Unocal Corporation. The Plan provides for voluntary pre-tax contributions by
participants, who are employees represented by collective bargaining agents at
certain facilities operated by the Company. The Plan's trustee and administrator
is Putnam Fiduciary Trust Company (the "Trustee"). Each participant is allowed
to choose how funds are invested from a range of investment fund options made
available through Putnam investments and Unocal Corporation common stock. The
Plan is subject to certain provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA") as a defined contribution plan.
The Plan booklet dated December 1, 1996 constitutes part of a prospectus
covering securities that have been registered under the Securities Act of 1933.
The December 1, 1996 booklet can be referenced for other information about the
Plan.
A restated Plan document dated August 1, 2002, was adopted to document
modifications subsequent to the September 1, 2001 Plan document.
Participation
Collective bargaining unit employees at the Company's Questa and York
facilities became eligible to participate in the Plan as of January 1, 1991 if
at least six months of service were completed prior to January 1, 1991.
Otherwise, participants become eligible to participate in the Plan upon
completion of six months of service.
Contributions
Voluntary participant contributions to the Plan are made on a pre-tax
basis and cannot exceed 15 percent of a participant's base pay. The pre-tax
contributions are also known as 401(k) contributions. Contributions cannot
exceed the amount prescribed by law and cannot be calculated on an amount of
base pay in excess of the amount allowed by law.
Effective September 1, 2002, the Company matches employee contributions
at the rate of 25 cents per dollar up to 6 percent of the employee's total
annual wage (base pay plus overtime pay).
Participant Accounts
Each participant's account is credited with the participant's
contributions and increased or decreased by the respective investment earnings
or losses of the individual investments as governed by the participant's
investment selections.
Vesting
Participants are always 100 percent vested in participant contributions
and in the dividends and interest on those contributions. Participants are
vested in Company contributions upon completion of two years of vesting service.
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Payment of Benefits
On termination of employment or at such time that participants become
eligible to receive benefits, participants may elect to receive their account
balances or defer their distributions until a later date, but no later than 60
days after the end of the plan year in which the latest of the following occurs:
April 1 after the close of the calendar year in which the participant attains
age 70 1/2, or two years after the participant's employment terminates. If a
participant continues to work after age 70 1/2, distribution of a portion of the
participant's account balance is required by April 1 of the calendar year
following the calendar year in which the participant attains age 70 1/2.
Federal Income Tax Status
On May 30, 2002, the Company received a ruling, from the Internal
Revenue Service that the Plan meets the requirements of Section 401(a) of the
Internal Revenue Code (the "Code") of 1986, as amended, and that the Trust
established thereunder is entitled to exemption under the provisions of the
Code; therefore, the Plan is not required to pay any federal income taxes.
Contributions to and earnings on Plan accounts will not be taxable to
participants prior to withdrawal from the Plan.
Withdrawals from the Plan are generally subject to federal income tax. Also,
withdrawals following termination of employment prior to age 55 may be subject
to an additional 10 percent federal penalty tax.
Plan Termination
The Company expects to continue the Plan indefinitely, but, as future
conditions cannot be foreseen, the Company may at any time or from time to time
amend or terminate the Plan in whole or in part, subject to the requirements of
ERISA and other applicable laws. An amendment may affect present, as well as
future participants, but may not diminish the account of any participant
existing on the effective date of such amendment. The Company has no present
intent to terminate the Plan.
NOTE 2 - Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis
of accounting in conformity with accounting principles generally accepted in the
United States of America. In addition, the following accounting policies are
applied:
a. Purchases and sales of securities are recorded on a trade-date basis.
b. Dividends are recorded on an ex-dividend date basis.
c. Interest income is recorded on the accrual basis.
d. Benefits are recorded when paid.
The Plan presents in the statements of changes in net assets available
for benefits the net appreciation (depreciation) in the fair value of its
investments which consist of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
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Valuation of Investments
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at the net asset value of shares held by the
Plan at year-end. Shares of Unocal common stock are valued at the closing price
as reported for the New York Stock Exchange Composite Transactions at December
31, 2002 and 2001. Investments in common trust funds are valued based on
information provided by the Plan's investment custodian. The financial
statements of the common trust funds are audited annually by independent
auditors.
Use of Estimates in Preparation of the Financial Statements
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Plan's management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the reported amounts of
additions to and deductions from net assets during the reporting periods. Actual
results could differ from those estimates.
NOTE 3 - Investments
The following investments represent 5 percent or more of the Plan's net
assets:
December 31,
2002 2001
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Putnam Money Market Fund
111,455 and 97,114 shares, respectively $ 111,455 $ 97,114
Putnam New Opportunities Fund
794 and 418 shares, respectively 23,170 17,528
Putnam S&P 500 Index Fund
549 and 363 shares, respectively 11,889 10,109
Putnam International Growth Fund
655 and 487 shares, respectively 10,829 9,718
The Plan's investments depreciated in value as follows:
December 31,
2002 2001
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Mutual funds ($9,675) ($8,804)
Common or collective trust (2,202) (902)
Common stock (105) (799)
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($11,982) ($10,505)
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NOTE 4 - Parties-in-interest
Certain of the Plan's investments are shares of mutual funds managed by the
Trustee, as defined by the Plan Agreement. Therefore, these transactions qualify
as party-in-interest transactions for which a statutory exemption exists.
Unocal Corporation, which also qualifies as a party-in-interest, absorbs
substantially all of the administrative expenses of the Plan, which were nominal
for the years ended December 31, 2002 and 2001. Such transactions with the
Company qualify for a statutory exemption.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee appointed by the Board of Directors of the Company to administer the
Plan has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOLYCORP, INC. 401(k) RETIREMENT SAVINGS PLAN
Date: June 27, 2003 By: /s/ Roger T. Inabu
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Roger T. Inabu
Comptroller, Molycorp, Inc.
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Molycorp, Inc. 401(k) Retirement Savings Plan
Schedule of Assets Held for Investment Purposes ***
At December 31, 2002
(a) (b) (c) (d) (e)
Identity of Issuer, Description of Investment,
Borrower, Lessor Including Maturity Date, Rate of
or Similar Party Interest, Collateral, Par, or Maturity Value Cost Current Value
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* Unocal Corporation Unocal Corporation Common Stock $ 4,032
132 shares
** Putnam Investments Putnam Money Market Fund 111,455
111,455 shares
** Putnam Investments Putnam New Opportunities Mutual Fund 23,170
794 shares
** Putnam Investments Putnam S&P 500 Index Fund 11,889
549 shares
** Putnam Investments Putnam International Growth Fund 10,828
655 shares
** Putnam Investments The Putnam Bond Index Fund 7,155
548 shares
** Putnam Investments Putnam Voyager Fund 2,290
175 shares
** Vanguard Group The Vanguard Windsor II Fund 758
36 shares
** Putnam Investments George Putnam Fund of Boston 2,144
145 shares
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Total assets held for investment purposes $ 173,721
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* Parent of the Sponsor and employer and, therefore, a party-in-interest for which a statutory exemption exists.
** Trustee for the Plan and, therefore, a party-in-interest for which a statutory exemption exists.
The Vanguard Windsor II Fund is also available through Putnam Investments.
*** Under ERISA, an asset held for investment purposes is any asset held by the Plan on the last day of the Plan's
fiscal year or acquired at any time during the Plan's fiscal year and disposed of at any time before the last day
of the Plan's fiscal year, with certain exceptions.
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EXHIBIT INDEX
Exhibit 23 Consent of PricewaterhouseCoopers LLP
Exhibit 99 Certification Pursuant to 18 U.S.C. Section 1350
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