<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
-------------------------------------------------
Commission file number 1-5254
-----------------------
MAPCO INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 73-0705739
- ------------------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 South Baltimore Avenue, Tulsa, Oklahoma 74119
- -------------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
(918) 581-1800
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
No Changes
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and has been subject to such filing requirements for the past 90 days.
Yes X . No .
--- ---
On May 8, 1995, 29,882,502 shares of MAPCO Inc. Common Stock, $1 par
value, were outstanding.
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<PAGE> 2
MAPCO Inc.
Index
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
PART I. Financial Information:
Condensed Consolidated Statements of Income
for the three months ended March 31, 1995
and 1994 3
Condensed Consolidated Balance Sheets,
March 31, 1995 and December 31, 1994 4
Condensed Consolidated Statements of Cash
Flows for the three months ended March 31,
1995 and 1994 5
Notes to Condensed Consolidated Financial
Statements 6 - 9
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 13
PART II. Other Information: 14
Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
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<PAGE> 3
PART I
FINANCIAL INFORMATION
MAPCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Dollars and Shares in Millions
except per share amounts
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------------------
1995 1994
---------- ----------
<S> <C> <C>
Sales and Operating Revenues (1) $ 777.2 $ 692.1
---------- ----------
Expenses:
Outside purchases and operating
expenses (1) 672.3 575.5
Selling, general and administrative 18.5 16.9
Depreciation, depletion and amortization 27.2 24.4
Interest and debt expense 14.6 12.3
Other income - net (.5) (.4)
---------- ----------
732.1 628.7
---------- ----------
Income before Provision for
Income Taxes 45.1 63.4
---------- ----------
Provision for Income Taxes:
Current 8.7 19.3
Deferred 6.9 2.4
---------- ----------
15.6 21.7
---------- ----------
Income before Minority Interest 29.5 41.7
Minority Interest in Earnings of Subsidiary (.5) (.3)
---------- ----------
Net Income $ 29.0 $ 41.4
========== ==========
Earnings per Common Share $ .97 $ 1.38
Average Common Shares Outstanding 29.9 30.0
Cash Dividends per Common Share $ .25 $ .25
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
(1) Includes consumer excise taxes of $31.2 million and $39.0 million for the
three months ended March 31, 1995 and 1994, respectively.
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<PAGE> 4
MAPCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Dollars in Millions
<TABLE>
<CAPTION>
March 31, 1995 December 31,
(Unaudited) 1994
-------------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 36.0 $ 30.6
Receivables 227.0 263.3
Inventories (Note 3) 123.9 111.0
Prepaid expenses 43.2 44.1
Other current assets 29.1 29.9
------------- ------------
Total current assets 459.2 478.9
------------- ------------
Property, Plant and Equipment, at cost 2,543.5 2,501.5
Less - accumulated depreciation
and depletion (1,051.1) (1,027.3)
------------- ------------
1,492.4 1,474.2
------------- ------------
Other Assets 209.6 213.0
------------- ------------
$ 2,161.2 $ 2,166.1
============= ============
Current Liabilities:
Current maturities of long-term debt $ 29.2 $ 32.2
Accounts payable 247.0 270.0
Accrued taxes 51.6 37.8
Accrued payroll and related expenses 16.8 14.0
Other current liabilities 76.6 72.4
------------- ------------
Total current liabilities 421.2 426.4
------------- ------------
Long-Term Debt (Note 4) 694.2 720.9
------------- ------------
Other Liabilities 77.3 77.8
------------- ------------
Deferred Income Taxes 300.7 293.8
------------- ------------
Minority Interest 25.2 24.6
------------- ------------
Contingencies (Note 6)
------------- ------------
Stockholders' Equity (Note 5):
Common stock 62.8 62.8
Capital in excess of par value 202.8 202.6
Retained earnings 1,377.9 1,356.4
------------- ------------
1,643.5 1,621.8
Treasury stock, at cost (937.3) (935.6)
Loan to ESOP (63.6) (63.6)
------------- ------------
642.6 622.6
------------- ------------
$ 2,161.2 $ 2,166.1
============= ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<PAGE> 5
MAPCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Note 2)
Dollars in Millions
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
--------------------------------
1995 1994
-------- ---------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 29.0 $ 41.4
Reconciliation of net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 27.2 24.4
Provision for deferred income taxes 6.9 2.4
Other items not requiring cash (Note 2) 1.3 2.8
-------- --------
Funds provided by operations 64.4 71.0
Changes in operating assets and
liabilities (Note 2) 23.9 25.3
-------- --------
Net cash provided by operating activities 88.3 96.3
-------- --------
Cash Flows from Investing Activities:
Capital expenditures and acquisitions, net of
liabilities assumed (44.6) (22.3)
Proceeds from sales of property, plant and
equipment .6 4.2
Other - .1
-------- --------
Net cash used in investing activities (44.0) (18.0)
-------- --------
Cash Flows from Financing Activities:
Purchase of common stock (1.7) (2.0)
Decrease in borrowings (26.6) (20.0)
Dividends (7.5) (7.5)
Payments on long-term debt (3.1) -
Other - (.2)
-------- --------
Net cash used in financing activities (38.9) (29.7)
-------- --------
Increase in Cash and Cash Equivalents 5.4 48.6
Cash and Cash Equivalents, January 1 30.6 69.8
-------- --------
Cash and Cash Equivalents, March 31 $ 36.0 $ 118.4
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<PAGE> 6
MAPCO INC.
Notes to Condensed Consolidated Financial Statements
Note 1 - In the opinion of Management, the accompanying condensed consolidated
financial statements of MAPCO Inc. and its subsidiaries ("MAPCO" or the
"Company") contain all adjustments necessary to present fairly the financial
position as of March 31, 1995 (unaudited) and December 31, 1994, the results of
operations for the three months ended March 31, 1995 and 1994 (both unaudited)
and the cash flows for the three months ended March 31, 1995 and 1994 (both
unaudited). Certain reclassifications have been made to prior year amounts to
conform to current year presentations. All significant intercompany accounts
and transactions have been eliminated.
Note 2 - Statements of Cash Flows
Other items not requiring (providing) cash reported in cash flows from
operating activities consist of (in millions):
<TABLE>
<CAPTION>
Three Months
Ended March 31,
------------------------------------
1995 1994
-------- --------
<S> <C> <C>
Net periodic pension (income) expense $ (.4) $ .1
Gain on sales of property, plant and equipment (.2) (.3)
Minority interest in earnings of subsidiary .5 .3
Refinery turnaround accrual - .8
Recovery of advance royalties .9 1.0
Other non-cash income and expense items - net .5 .9
-------- --------
$ 1.3 $ 2.8
======== ========
</TABLE>
Changes in operating assets and liabilities consist of (in millions):
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------------------------
1995 1994
-------- --------
<S> <C> <C>
Decrease (increase) in:
Receivables $ 36.5 $ 19.1
Inventories (11.7) 34.1
Prepaid expenses .9 (9.0)
Other current assets .8 1.5
Other assets .1 (6.9)
Increase (decrease) in:
Accounts payable (23.0) (42.2)
Accrued taxes 14.0 19.3
Accrued payroll and related expenses 2.8 (5.0)
Other current liabilities 4.2 17.9
Other liabilities (.7) (3.5)
-------- --------
$ 23.9 $ 25.3
======== ========
</TABLE>
Income taxes refunded were $11.6 million and $.3 million for the three months
ended March 31, 1995 and 1994, respectively.
Interest paid, net of amounts capitalized, was $4.9 million and $1.6 million
for the three months ended March 31, 1995 and 1994, respectively.
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<PAGE> 7
Note 3 - Inventories
Inventories consist of (in millions):
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- -----------
<S> <C> <C>
Raw materials - crude oil $ 20.3 $ 21.8
-------- --------
Finished products:
Refined petroleum products 43.4 26.1
Fertilizer and natural gas liquids 22.5 31.5
Retail merchandise 23.0 23.7
Coal 14.7 7.9
-------- --------
103.6 89.2
-------- --------
Inventories $ 123.9 $ 111.0
======== ========
</TABLE>
The cost to replace the Petroleum segment's crude oil, refined petroleum
products and retail merchandise inventories in excess of their last-in,
first-out (LIFO) carrying values was approximately $14.6 million at March 31,
1995 and $11.6 million at December 31, 1994.
Note 4 - Long-Term Debt
Long-term debt consists of (in millions):
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
<S> <C> <C>
MAPCO Inc.
- ----------
Commercial paper and bank money market lines $ 158.5 $ 185.1
8.43% ESOP Notes, payable in mortgage type
principal reductions annually through 2003 63.6 63.6
Medium Term Notes, various maturities through 2022 331.8 334.8
-------- --------
553.9 583.5
-------- --------
Subsidiaries
- ------------
Senior Notes:
8.51% Notes, payable 2007 15.0 15.0
8.95% Notes, payable 2012 35.5 35.5
8.20% Notes, payable $2.5 annually 2007 through 2012 15.0 15.0
8.59% Notes, payable 2017 14.5 14.5
8.70% Notes, payable $2.0 annually 2018 through 2022 10.0 10.0
6.67% Notes, payable $15.0 annually 2001 through 2005 75.0 75.0
Other 4.5 4.6
-------- --------
169.5 169.6
-------- --------
723.4 753.1
Less - current maturities (29.2) (32.2)
-------- --------
Long-term debt $ 694.2 $ 720.9
======== ========
</TABLE>
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<PAGE> 8
Note 4 - Long-Term Debt (continued)
Interest rates on commercial paper and bank money market lines ranged from
5.83% to 6.25% during the first quarter of 1995 and were 3.49% during the first
quarter of 1994. Commercial paper and bank money market lines outstanding at
March 31, 1995 and December 31, 1994 were classified as long-term debt. MAPCO
has the ability and intent, if necessary, under a bank credit agreement to
refinance commercial paper and bank money market lines with long-term debt
having maturities in excess of one year.
MAPCO has a bank credit agreement for a line of credit of $300 million. The
bank credit agreement provides for reduction of the total commitment in
quarterly increments of $25 million commencing June 30, 1998. Interest on
borrowings under the bank credit agreement would be at rates generally less
than the prime interest rate. MAPCO must pay a commitment fee to maintain the
bank credit agreement. This agreement serves as a back-up for MAPCO's
outstanding commercial paper and bank money market lines. As of March 31,
1995, no borrowings were outstanding under the bank credit agreement.
As of March 31, 1995, MAPCO had $331.8 million of Medium Term Notes
outstanding. These notes mature at various times through 2022 and bear
interest at rates ranging from 7.60% to 8.87%.
Various loan agreements contain restrictive covenants which, among other
things, limit the payment of advances or dividends by two of Natural Gas
Liquids' subsidiaries to MAPCO. At March 31, 1995, $177 million of net assets
were restricted by such provisions.
Note 5 - Employee Benefit Plans
With respect to its Employee Stock Ownership Plan ("ESOP"), MAPCO recognized
compensation expense of $.7 million and $.6 million for the three months ended
March 31, 1995 and 1994, respectively. Interest expense on ESOP related debt
was $1.3 million and $1.4 million for the three months ended March 31, 1995 and
1994, respectively. Dividends on the allocated and unallocated MAPCO common
stock held by the ESOP were $.6 million for the three months ended March 31,
1995 and 1994, respectively, and will be used for ESOP debt service.
Note 6 - Contingencies
Texas Explosion Litigation
On April 7, 1992, a liquefied petroleum gas explosion occurred near an
underground salt dome storage facility located near Brenham, Texas and owned by
an affiliate of the Company, Seminole Pipeline Company ("Seminole"). The
National Transportation Safety Board and the Texas Railroad Commission
essentially determined that the probable cause of the explosion was the result
of overfilling the storage facility.
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<PAGE> 9
Note 6 - Contingencies (continued)
The Company, as well as Seminole, Mid-America Pipeline Company and other
non-MAPCO entities have been named as defendants in civil actions filed in
state district courts in Texas. During 1993, the Company received
reimbursements from its insurers for settlements which disposed of all the
death claims and substantially all of the serious injury claims resulting from
the incident. Generally, the types of remaining claims consist primarily of
personal injury and property damage claims, coupled with theories of nuisance
and diminished property value.
Although plaintiffs seek actual and punitive damages, the Company believes that
complete resolution of the remaining Texas explosion actions by litigation or
settlement, after reimbursement of insurance coverage, will not have a material
adverse effect on the Company's business, results of operations or financial
position.
Seminole Loop/Aquila-LaGrange Line Litigation
In May 1993, Seminole completed its Seminole loop project and in January 1994,
Seminole completed its Aquila-LaGrange line project. Seminole is the defendant
in over 70 lawsuits claiming additional compensation for and/or damages to
tracts of land traversed by these projects in 15 counties in the state of
Texas. Many of the lawsuits claim punitive damages for alleged fraud, illegal
entry and other wrongful conduct. Claims in this litigation are not covered by
the Company's insurance.
The Company believes that complete resolution of the Seminole
loop/Aquila-LaGrange line litigation will not have a material adverse effect on
the Company's business, results of operations or financial position.
General Litigation
The Company and its subsidiaries are involved in various other lawsuits, claims
and regulatory proceedings incidental to their businesses. In the opinion of
management, the outcome of such matters will not have a material adverse effect
on the Company's business, results of operations or financial position.
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<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales and operating revenues were as follows (in millions):
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------------------------
1995 1994 Variance
------ ------ --------
<S> <C> <C> <C>
Natural Gas Liquids $170.9 $130.4 $ 40.5
Petroleum 523.0 476.6 46.4
Coal 102.3 102.3 -
Eliminations (19.0) (17.2) (1.8)
------ ------ ------
$777.2 $692.1 $ 85.1
====== ====== ======
</TABLE>
The $40.5 million increase in Natural Gas Liquids' sales and operating revenues
was due to higher transportation revenues and retail propane sales.
Transportation revenues increased principally because of additional volumes
from new plant connections, a new contract with a major customer, increased
ethane shipments and higher tariffs. Retail propane sales improved over last
year because of the Emro Propane Company ("Emro") acquisition in September
1994. Petroleum's sales and operating revenues increased $46.4 million
primarily due to a change in trading strategies implemented in the second
quarter of 1994. The Coal segment's sales and operating revenues matched last
year as higher brokerage sales were offset by lower sales at the Retiki Mine,
which was closed in late January 1995. The increased brokerage sales were
primarily attributable to supplying a portion of the Big Rivers Electric
Corporation's contract tons from brokerage sources rather than from the Retiki
Mine.
Outside purchases and operating expenses increased $96.8 million in the first
quarter of 1995 as compared to the first quarter of 1994. Details by segment
are as follows (in millions):
<TABLE>
<CAPTION>
Three Months Ended, March 31,
---------------------------------------------------------------------------------------------------
1995 1994 Variance
------------------------------- ------------------------------- -------------------------------
Outside Operating Outside Operating Outside Operating
Purchases Expenses Total Purchases Expenses Total Purchases Expenses Total
--------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NGL $ 46.3 $ 46.9 $ 93.2 $ 32.9 $ 47.2 $ 80.1 $ (13.4) $ .3 $ (13.1)
Petroleum 455.8 41.9 497.7 374.5 40.5 415.0 (81.3) (1.4) (82.7)
Coal 16.6 64.8 81.4 8.9 71.5 80.4 (7.7) 6.7 (1.0)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
$ 518.7 $ 153.6 $ 672.3 $ 416.3 $ 159.2 $ 575.5 $(102.4) $ 5.6 $ (96.8)
========= ========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
Natural Gas Liquids' outside purchases increased $13.4 million primarily as a
result of additional propane purchases to supply the plants acquired from Emro
in September 1994. Operating expenses in the Natural Gas Liquids' segment
decreased $.3 million as retail propane plant expenses were higher due to the
acquired Emro retail propane plants, but pipeline maintenance costs were
considerably lower.
Petroleum's outside purchases increased $81.3 million over the same period in
1994 reflecting higher crude costs and the new trading
10 of 24
<PAGE> 11
strategies previously mentioned. Operating expenses increased $1.4 million
principally because of higher-than-normal maintenance costs at the Memphis
Refinery. Lower maintenance costs are anticipated in the third quarter due to
the scheduled turnaround of the Memphis Refinery in July 1995.
Coal's outside purchases exceeded last year's purchases by $7.7 million
primarily due to increased coal brokerage activities. A large portion of the
increased activity was due to brokerage tons supplied to Big Rivers Electric
Corporation that were previously mined from the Retiki Coal facility, which was
closed during the first quarter of 1995. Operating expenses decreased $6.7
million principally due to the closing of the Retiki Mine.
The $2.8 million increase in depreciation, depletion and amortization expense
is primarily due to additional depreciation and amortization charges resulting
from the Emro acquisition.
Interest expense increased $2.3 million because of increased debt and higher
interest rates.
The effective income tax rate for the first quarter of 1995 was 34.6% compared
to 34.2% in the first quarter of 1994. The difference between the statutory
Federal income tax rate of 35% and the effective income tax rate is primarily
due to statutory depletion, partially offset by state taxes.
Operating profit for the three months ended March 31, 1995 and 1994 is detailed
below (in millions):
<TABLE>
<CAPTION>
1995 1994 Variance
------ ------ --------
<S> <C> <C> <C>
Natural Gas Liquids $ 55.0 $ 33.2 $ 21.8
Petroleum 1.0 36.4 (35.4)
Coal 9.2 11.4 (2.2)
------ ------ ------
$ 65.2 $ 81.0 $(15.8)
====== ====== ======
</TABLE>
Natural Gas Liquids' operating profit increased $21.8 million because of higher
transportation revenues and retail propane profits. Strong revenues in the
current quarter and lower pipeline maintenance expense resulted in a 74%
increase in transportation operating profit. Retail propane operating profit
increased 54% as a result of the Emro acquisition.
Petroleum's operating profit decreased $35.4 million because of lower margins
at both the Memphis and North Pole Refineries. Significantly higher crude
costs negatively impacted both margins and operating profit in the current
quarter. Refined product margins at both refineries increased significantly in
the latter part of the first quarter and into the second quarter of 1995.
Coal's operating profit decreased $2.2 million principally due to lower profits
at the Mettiki Mine. Sales of high cost year-end coal inventory, attributable
to the December 1994 longwall move, was the primary reason for the profit
decline at Mettiki.
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<PAGE> 12
MAPCO's consolidated first quarter 1995 net income was $29.0 million or $0.97
per share compared to $41.4 million or $1.38 per share in 1994. Average common
shares outstanding were 29.9 million in 1995 and 30.0 million in 1994.
FINANCIAL CONDITION
Cash Generation
Cash generation was as follows (in millions):
<TABLE>
<CAPTION>
Three Months Ended, March 31, 1995 1994
- ----------------------------- -------- --------
<S> <C> <C>
Funds provided by operations $ 64.4 $ 71.0
Changes in operating assets and liabilities 23.9 25.3
-------- --------
Net cash provided by operating activities 88.3 96.3
Net cash used in investing activities (44.0) (18.0)
Net cash used in financing activities (38.9) (29.7)
-------- --------
Cash generation $ 5.4 $ 48.6
======== ========
</TABLE>
Funds provided by operations in 1995 as compared to 1994 decreased primarily
due to unfavorable refining margins in the Petroleum segment which more than
offset the strong operating results in the Natural Gas Liquids' segment.
Capital expenditures in 1995 were $44.6 million, of which $17.2 million was for
capital items necessary to maintain existing operations, compared to capital
expenditures of $22.3 million in 1994, of which $14.4 million was for capital
items necessary to maintain existing operations. Capital expenditures in 1995
included $10.3 million for the acquisition of 27 retail gasoline/convenience
stores in the Nashville, Tennessee market area.
Financing activities for the first three months of 1995 included: (a) reduction
of short-term borrowings by $26.6 million, (b) dividend payments of $7.5
million and (c) repayment of $3.1 million of fixed-rate debt. Financing
activities for the first three months of 1994 included the reduction of
short-term borrowings by $20.0 million and the payment of $7.5 million of
dividends.
Capitalization
Capitalization, which includes long-term debt (excluding current maturities)
and stockholders' equity, decreased from $1,344 million at December 31, 1994 to
$1,337 million at March 31, 1995. The decrease in 1995 represents the
utilization of cash from operations to reduce borrowings and pay dividends,
partially offset by the favorable impact of 1995 operating results. MAPCO's
long-term debt as a percent of capitalization was 52% at March 31, 1995
compared to 54% at December 31, 1994.
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<PAGE> 13
Various loan agreements contain restrictive covenants which, among other
things, limit the payment of advances or dividends by two of Natural Gas
Liquids subsidiaries to MAPCO. At March 31, 1995, $177 million of net assets
were restricted by such provisions.
Liquidity and Capital Resources
MAPCO's primary sources of liquidity are its cash and cash equivalents,
internal cash generation, and external financing. At March 31, 1995, MAPCO had
$36.0 million of cash and cash equivalents.
MAPCO's external financing sources include its bank credit agreement, its
uncommitted bank credit lines and its ability to issue public or private debt,
including commercial paper. MAPCO's bank credit agreement is for a committed
line of credit of $300 million. The total commitment under the bank credit
agreement reduces in quarterly amounts of $25 million beginning June 30, 1998.
This agreement serves as a back-up for outstanding commercial paper and for
borrowings against bank money market lines. As of March 31, 1995, no
borrowings were outstanding under the bank credit agreement.
In 1990, MAPCO filed a shelf registration statement with the Securities and
Exchange Commission providing for the issuance of up to $400 million of debt
securities. As of March 31, 1995, MAPCO had outstanding $332 million of Medium
Term Notes under this registration. MAPCO has the authorization to issue up to
an additional $47 million of Medium Term Notes. The proceeds from any debt
issued under the shelf registration statement have been and will continue to be
used for general corporate purposes, including working capital, capital
expenditures, reduction of other debt and acquisitions.
MAPCO's existing debt and credit agreements contain covenants which limit the
amount of additional indebtedness the Company can incur. Management believes,
however, that MAPCO has sufficient capacity to fund its anticipated needs.
Capital expenditures in 1995 are expected to be approximately $250 million, of
which $184 million will be for acquisitions and expansion projects. MAPCO
expects to utilize cash from operations and short-term funding sources as
needed to meet anticipated 1995 capital expenditures; however, MAPCO's
long-term liquidity is expected to increase since cash from operations is
anticipated to exceed currently projected capital expenditures, environmental
projects, debt service and dividends. MAPCO anticipates that future excess
internal cash generation will be used primarily for debt reduction and capital
expenditures.
13 of 24
<PAGE> 14
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
Exhibit 10 - Amendment No. 1 dated as of March 28, 1995, to the
Competitive Advance and Revolving Credit Facility dated as of
April 29, 1994, among MAPCO Inc., the Lenders named therein and
Chemical Bank, as Agent for the Lenders.
Exhibit 11 - Statement Regarding Computation of per Share
Earnings.
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges.
Exhibit 27 - Financial Data Schedule.
(b). Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
quarter ended March 31, 1995.
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<PAGE> 15
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 thereunto duly authorized.
MAPCO Inc.
Date: May 10, 1995 /s/ FRANK S. DICKERSON, III
----------------- ------------------------------
Frank S. Dickerson, III
Senior Vice President,
Chief Financial Officer,
and Treasurer
Date: May 10, 1995 /s/ DONALD R. WELLENDORF
----------------- -----------------------------
Donald R. Wellendorf
Vice President and Controller
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<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
Exhibit 10 Amendment No. 1 dated as of March 28, 1995,
to the Competitive Advance and Revolving Credit
Facility dated as of April 29, 1994, among
MAPCO Inc., the Lenders named therein and
Chemical Bank, as Agent for the Lenders. 17-20
Exhibit 11 Statement Regarding Computation of per
Share Earnings. 21-22
Exhibit 12 Computation of Ratio of Earnings to Fixed
Charges. 23
Exhibit 27 Financial Data Schedule. 24
</TABLE>
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<PAGE> 1
EXHIBIT 10
AMENDMENT NO. 1 dated as of March 28, 1995 to
the Competitive Advance and Revolving Credit Facility
dated as of April 29, 1994 (the "Credit Agreement")
among MAPCO Inc., a Delaware corporation (the
"Borrower"), the Lenders named therein and CHEMICAL
BANK, as Agent for the Lenders (in such capacity, the
"Agent").
INTRODUCTORY STATEMENT
All capitalized terms not otherwise defined in this
Amendment are as defined in the Credit Agreement.
Pursuant to the Credit Agreement, the Lenders have
agreed to make Loans to the Borrower.
The Borrower has requested that the Credit Agreement
be amended as set forth herein.
Accordingly, the parties hereby agree as follows:
SECTION 1. Amendment to the Credit Agreement.
The Credit Agreement is hereby amended effective as
of April 29, 1994 (subject to the terms and conditions set forth in Section 2
hereof) as follows:
(A) Section 6.07 of the Credit Agreement is
hereby amended as follows:
SECTION 6.07. Earnings Before Interest and
Taxes Coverage Ratio. Permit the ratio, determined
as of the last day of each fiscal quarter of the
Borrower for the Rolling Period ending on such date,
of Consolidated EBIT during such period to
Consolidated Interest Expense during such period to
be less than 3.0:1; provided, however, that for
purposes of calculating this ratio, the Borrower may
exclude the net (after tax) effect, not to exceed $70
million, of the 1994 settlement by a Subsidiary of
the Company of litigation with the State of Alaska in
connection with royalty oil contracts.
SECTION 2. Conditions to Effectiveness.
This Amendment is subject to the satisfaction of the
following conditions precedent:
(A) the Agent shall have received executed
counterparts of this Amendment, which, when taken together, bear the signatures
of the Borrower and the Required Lenders; and
(B) all legal matters incident to this Agreement
shall be satisfactory to Morgan, Lewis & Bockius, counsel for the Agent.
17 of 24
<PAGE> 2
SECTION 3. Representations and Warranties.
(A) the representations and warranties contained
in Section 3 of the Credit Agreement are true and correct in all material
respects on and as of the date hereof as if such representations and warranties
had been made on and as of the date hereof; and
(B) the Borrower is in compliance with all the
terms and provisions set forth in the Credit Agreement and no Event of Default
or event which with notice or lapse of time or both would constitute an Event
of Default has occurred.
SECTION 4. Full Force and Effect.
Except as expressly amended hereby, the Credit
Agreement shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. As used in the Credit Agreement, the
terms "Agreements", "this Agreement", this Credit Agreement", "herein",
"hereinafter", "hereto", "hereof", and words of similar import, shall, unless
the context otherwise requires, mean the Credit Agreement as amended by this
Amendment.
SECTION 5. APPLICABLE LAW.
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Counterparts.
This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
SECTION 7. Expenses.
The Borrower agrees to pay all reasonable
out-of-pocket expenses incurred by the Agent in connection with the execution
and delivery of this Amendment, including, but not limited to, the reasonable
fees and disbursements of Morgan, Lewis & Bockius, counsel for the Agent.
SECTION 8. Headings.
The headings of this Amendment are for the purposes
of reference only and shall not affect the construction of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed by their duly authorized officers, all of
the date and year first above written.
18 of 24
<PAGE> 3
[SEAL] MAPCO Inc.
/s/ James N. Cundiff /s/ Frank S. Dickerson, III
- ------------------------------ ------------------------------
James N. Cundiff Frank S. Dickerson, III
Assistant Secretary Senior Vice President, Chief
Financial Officer and Treasurer
CHEMICAL BANK, for itself and
as Agent
By s/s R. Potter
-------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ John Robinson
-------------------------------
Title: Managing Director
THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Helen A. Carr
-------------------------------
Title: Attorney in Fact
MORGAN GUARANTY TRUST COMPANY
By /s/ James S. Finch
-------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
/s/ A. S. Norsworthy
- -------------------------------
Title: Assistant Agent
19 of 24
<PAGE> 4
NATIONAL WESTMINSTER BANK Plc
By C. Johnson
-------------------------------
Title: Vice President
ABN AMRO BANK N.V.
By /s/ David P. Orr
-------------------------------
Title: Vice President
By /s/ Lila Jordan
-------------------------------
Title: Vice President
BANK OF OKLAHOMA, N.A.
By /s/ Jeffrey R. Dunn
-------------------------------
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Xavier Ratouis
-------------------------------
Title:
By
-------------------------------
Title:
THE FUJI BANK, LIMITED
By /s/ Kenichi Tatara
-------------------------------
Title: Vice President & Manager
THE SUMITOMO BANK, LIMITED
By /s/ Tatsuo Ueda
-------------------------------
Title: General Manager
20 of 24
<PAGE> 1
EXHIBIT 11
MAPCO INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(Dollars and Shares in Millions
except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
<S> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE 1995 1994
-------- --------
Computation for Consolidated Statements of Income
- -------------------------------------------------
Net income (a) $ 29.0 $ 41.4
======== ========
Weighted average common shares outstanding 29.9 30.0
Common stock equivalents (stock options) - -
-------- --------
Weighted average common shares outstanding (a) 29.9 30.0
======== ========
Primary earnings per common share (a) (c) $ .97 $ 1.38
======== ========
Additional Primary Computation
- ------------------------------
Net income (a) $ 29.0 $ 41.4
======== ========
Weighted average common shares outstanding (a) 29.9 30.0
Dilutive effect of outstanding options .1 .2
-------- --------
Weighted average common shares outstanding,
as adjusted 30.0 30.2
======== ========
Primary earnings per common share, as adjusted (b) $ .97 $ 1.37
======== ========
FULLY DILUTED EARNINGS PER COMMON SHARE
Additional Fully Diluted Computation
- ------------------------------------
Net income (a) $ 29.0 $ 41.4
======== ========
Weighted average common shares outstanding (a) 29.9 30.0
Dilutive effect of outstanding options .1 .2
-------- --------
Weighted average common shares outstanding,
as adjusted 30.0 30.2
======== ========
Fully diluted earnings per common share (b) $ .97 $ 1.37
======== ========
</TABLE>
21 of 24
<PAGE> 2
EXHIBIT 11
(a) These figures agree with the related amounts in the Condensed
Consolidated Statements of Income.
(b) This calculation is submitted in accordance with Securities Exchange Act
of 1934 Release No. 9083, although not required by footnote 2 to
paragraph 14 of APB Opinion No. 15 because it results in dilution of
less than 3%.
(c) In 1995 and 1994, stock options are not included in the earnings per
share computation included in MAPCO's Condensed Consolidated Statements
of Income because the dilutive effect is less than 3%.
22 of 24
<PAGE> 1
EXHIBIT 12
MAPCO INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995 1994 1993 1992 1991 1990
------------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined:
Income before provision for income taxes ........ $ 45.1 $116.6 $202.9 $144.6 $182.6 $185.7
Fixed charges.................................... 16.1 60.1 55.3 60.1 63.9 67.3
Capitalized interest included in fixed charges... (2.8) (2.0) (1.2) (1.1)
Amortization of capitalized interest............. .9 3.4 3.5 3.5 3.3 3.6
Distributed income of affiliate accounted for by
the equity method.............................. 4.5
------- ------ ------ ------ ------ ------
Total................................. $ 62.1 $180.1 $258.9 $206.2 $248.6 $260.0
======= ====== ====== ====== ====== ======
Fixed charges as defined:
Interest and debt expense (includes amortization
of debt expense and discount).................. $ 14.7 $ 53.7 $ 46.9 $ 51.7 $ 55.5 $ 59.3
Capitalized interest............................. 2.8 2.0 1.2 1.1
Interest expense on guaranteed debt of affiliate
accounted for by the equity method............. .6
Portion of rentals representative of the interest
factor......................................... 1.4 6.4 5.6 6.4 7.2 6.3
------- ------ ------ ------ ------ ------
Total................................. $ 16.1 $ 60.1 $ 55.3 $ 60.1 $ 63.9 $ 67.3
======= ====== ====== ====== ====== ======
Ratio of earnings to fixed charges................. 3.9 3.0 4.7 3.4 3.9 3.9
======= ====== ====== ====== ====== ======
</TABLE>
23 of 24
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MAPCO INC'S
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1995, AND MAPCO INC'S
CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31,
1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 36,000
<SECURITIES> 0
<RECEIVABLES> 227,000
<ALLOWANCES> 0
<INVENTORY> 123,900
<CURRENT-ASSETS> 459,200
<PP&E> 2,543,500
<DEPRECIATION> 1,051,100
<TOTAL-ASSETS> 2,161,200
<CURRENT-LIABILITIES> 421,200
<BONDS> 694,200
<COMMON> 0
0
62,800
<OTHER-SE> 579,800
<TOTAL-LIABILITY-AND-EQUITY> 2,161,200
<SALES> 777,200
<TOTAL-REVENUES> 777,200
<CGS> 0
<TOTAL-COSTS> 672,300
<OTHER-EXPENSES> 45,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,600
<INCOME-PRETAX> 45,100
<INCOME-TAX> 15,600
<INCOME-CONTINUING> 29,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,000
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
