FORM 10-Q/A-1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[*] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to_____________
Commission file number 1-7910
TOSCO CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 95-1865716
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
72 Cummings Point Road
Stamford, Connecticut 06902
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (203) 977-1000
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 (2) has been subject to such filing
requirements for the past 90 days.
* Yes No
Registrant's Common Stock outstanding at April 30, 1995 was 37,049,859 shares.
<PAGE>
TOSCO CORPORATION AND SUBSIDIARIES
Index to Financial Statements and Exhibits
Filed with the Quarterly Report of the Company on Form 10-Q
For the Three Months Ended March 31, 1995
Page(s)
Part I. Financial Information
Consolidated Balance Sheets ....................................... 3
Consolidated Statements of Income ................................. 4
Consolidated Statements of Cash Flows ............................. 5
Notes to Consolidated Financial Statements ........................ 6 - 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................ 9 - 11
Exhibit I - Computation of Earnings Per Share ..................... 12
Part II. Other Information
The financial statements listed in Part I above reflect all adjustments
(consisting only of normal recurring accruals) which are, in the opinion of
Management, necessary to a fair presentation of financial position and results
of operations. Such financial statements are presented in accordance with the
Securities and Exchange Commission's disclosure requirements for Form 10-Q.
These unaudited interim consolidated financial statements should be read in
conjunction with the audited Consolidated Financial Statements (from which the
year-end balance sheet presented herein was derived) and the Notes to
Consolidated Financial Statements filed with the Commission in Tosco's 1994
Annual Report on Form 10-K.
<PAGE>
<TABLE>
<CAPTION>
TOSCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Thousands of Dollars
March 31, December 31,
ASSETS 1995 1994
---------- ------------
(Unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents .......................... $ 33,810 $ 23,793
Short-term investments and deposits ................ 62,446 30,829
Trade accounts receivable, less allowance
for uncollectibles of $8,622,000 (1995)
and $8,392,000 (1994) ............................. 261,224 291,772
Inventories ........................................ 457,492 463,637
Prepaid expenses and other current assets .......... 39,901 43,258
Deferred income taxes .............................. 6,160 6,160
Total current assets ............................... 861,033 859,449
Property, plant and equipment, net ................ 855,779 822,057
Deferred turnarounds and charges ................... 128,628 94,223
Deferred income taxes .............................. 6,998 6,998
Other assets ....................................... 15,708 14,479
Net assets of discontinued operations .............. 4,120
Total assets ................................. $1,872,266 $1,797,206
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable ................................ $ 391,826 $ 328,572
Accrued expenses and other liabilities .......... 135,616 151,561
Total current liabilities ..................... 527,442 480,133
Revolver debt ...................................... 273,000 233,000
Long-term debt ..................................... 454,519 454,429
Other liabilities .................................. 14,964 14,338
Environmental cost liability ....................... 35,373 35,382
Net liabilities of discontinued operations ......... 2,526
Deferred income taxes .............................. 1,934 1,934
Shareholders' equity:
Common shareholders' equity:
Common Stock - $.75 par value,
50,000,000 shares authorized,
39,598,900 shares issued (1995
and 1994) ..................................... 29,702 29,702
Capital in excess of par value .................. 639,853 640,078
Retained earnings (deficit) ..................... (35,641) (25,436)
Reductions from capital ......................... (68,880) (68,880)
Total common shareholders' equity ............ 565,034 575,464
Total liabilities and shareholders' equity ........ $1,872,266 $1,797,206
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
TOSCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Thousands of Dollars Except Per Share Data
Three Months Ended March 31,
-----------------------------
1995 1994
------------ -----------
<S> <C> <C>
Sales ........................................ $ 1,696,319 $ 1,495,688
Cost of sales ................................ 1,666,373 1,390,191
Selling, general and
administrative expense ....................... 22,602 27,098
Interest expense ............................. 15,398 13,491
Interest income .............................. (899) (985)
1,703,474 1,429,795
Income (loss) before provision
for income taxes ............................. (7,155) 65,893
Provision (credit) for income taxes .......... (2,882) 27,026
Net income (loss) ............................ (4,273) 38,867
Preferred stock dividend
requirements ................................. (2,516)
Income (loss) attributable
to common shareholders ..................... ($ 4,273) $ 36,351
Income (loss) per common and
common equivalent share:
Primary .................................. ($ . 12) $ 1.11
Fully diluted ............................ ($ . 12) $ 1.04
Dividends per common share ................... $ .16 $ .15
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
TOSCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Thousands of Dollars
Three Months Ended March 31,
----------------------------
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ............................. ($ 4,273) $ 38,867
Adjustments to arrive at net cash
provided by operating activities:
Depreciation ................................ 14,160 12,615
Amortization of deferred items ................ 9,768 8,544
Deferred income taxes ......................... 19,871
Restructuring charge .......................... 2,200
(Increase) decrease:
Trade accounts receivable ..................... 30,548 (71,893)
Inventories ................................... 6,145 (58,441)
Prepaid expenses and other current assets ..... 3,357 1,834
Increase (decrease):
Accounts payable and accrued liabilities ...... 57,109 108,089
Other liabilities and deferred gains .......... 941 1,411
Other ......................................... (2,210) (170)
Net cash provided by operating activities ..... 117,745 60,727
Cash flows from investing activities:
Purchase of property, plant and equipment ..... (47,882) (14,593)
Increase in deferred turnarounds,
charges and other assets ...................... (43,426) (5,129)
Net change in short-term
investments and deposits ...................... (31,617) (8,756)
Proceeds from termination of
Continental-Tosco Limited Partnership ......... 4,848
Transfers to discontinued operations .......... (6,646) (22,671)
Net cash used in investing activities .... (129,571) (46,301)
Cash flows from financing activities:
Borrowings (repayments) under
revolver, net ............................. 40,000 (30,000)
Short-term bank repayments ................. (12,000)
Principal payments under debt agreements ... (4)
Dividends on Preferred and Common Stock .... (5,932) (7,106)
Other ...................................... (225) (1,046)
Net cash provided by (used in)
financing activities .......................... 21,843 (38,156)
Net increase (decrease) in cash and
cash equivalents ............................. 10,017 (23,730)
Cash and cash equivalents at beginning
of period .................................... 23,793 55,091
Cash and cash equivalents at end of period .... $ 33,810 $ 31,361
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Information with respect to the three months ended
March 31, 1995 and 1994 is unaudited.
1. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
Tosco Corporation and its wholly owned subsidiaries (Tosco), including Seminole
Fertilizer Corporation (Seminole), a discontinued operation whose principal
operating assets were sold in 1993.
All significant intercompany accounts and transactions have been
eliminated.
Nature of Business
Tosco is an independent oil refiner and marketer of petroleum products with
related distribution facilities and domestic and international commercial
activities.
Reclassifications
Certain previously reported amounts have been reclassified to conform to
classifications adopted in 1995.
Cash, Cash Equivalents, Short-term Investments and Deposits
Cash in excess of operating requirements is invested in certificates of
deposit, government securities, commercial paper and other highly liquid
investments. Investments with original maturities of more than three months and
less than 12 months are classified as short-term investments and carried at cost
which approximates market.
Tosco purchased director and officer liability insurance coverage from its
wholly owned subsidiary Loil Group Ltd. (Loil), with limits of liability
coverage of $14,000,000 at March 31, 1995 (an amount approximately equal to the
amount of cash and investments of Loil). The assets of Loil are restricted to
payment of defense costs and claims made against the directors and officers of
Tosco. At March 31, 1995 the portfolio's carrying value of marketable
investments, considered "available for sale" in accordance with SFAS No. 115 -
"Accounting for Certain Investments in Debt and Equity Securities" approximated
fair value.
<PAGE>
Margin Deposits
Pursuant to the requirements of the commodity exchanges, margin deposits
based on a percentage of the value of the futures contracts have been placed
with commodity brokers. The margin deposits are classified as short-term
deposits on the balance sheet.
Inventories
Inventories of raw materials and products are valued at the lower of cost,
determined on the last-in, first-out (LIFO) basis, or market. The net realizable
value of LIFO inventories is measured by aggregating similar pools on a
consolidated basis.
Turnarounds
Refinery processing units are periodically shut down for major maintenance
(turnarounds). The cost of turnarounds is deferred and amortized on a
straight-line basis over the expected period of benefit (the period to the next
scheduled shutdown of the unit, which generally ranges from 24 to 48 months.)
2 Inventories
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
(Thousands of Dollars)
<S> <C> <C>
Raw materials ................................. $ 214,843 $ 163,866
Intermediates ................................. 43,248 24,603
Finished products ............................. 196,477 272,462
Retail ........................................ 2,924 2,706
$ 457,492 $ 463,637
</TABLE>
The excess of replacement cost over the value of inventories based upon the
LIFO method was $22,705,000 and $5,821,000 at March 31, 1995 and December 31,
1994, respectively.
3. Accrued Expenses and Other Liabilities
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---------- ------------
(Thousands of Dollars)
<S> <C> <C>
Accrued taxes other than
taxes on income ................................. $ 71,349 $ 71,964
Accrued compensation
and related benefits ............................ 11,718 11,570
Accrued interest ................................ 7,447 11,958
Income taxes receivable ......................... (8,682) (9,546)
Acquisition related liabilities ................. 15,334 15,856
Other accrued costs ............................. 5,967 7,476
Restructuring charge (a) ........................ 2,200
Short term borrowings ........................... 29,500 41,500
Current installments of
long-term debt .................................. 783 783
$ 135,616 $ 151,561
- -----------------
(a) During the first quarter of 1995, Tosco announced a restructuring program
designed to reduce costs and improve operating efficiencies in response to
continuing poor refining margins. The total estimated cost of $5.2 million,
of which $2.2 million was recorded in the first quarter of 1995, is
primarily for the severance cost of approximately 175 people at the Avon
Refinery and related support locations.
</TABLE>
<PAGE>
4. Long-Term Debt
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- -----------
(Thousands of Dollars)
<S> <C> <C>
Revolving Credit Facilities
Cash borrowings .............................. $ 273,000 $ 233,000
Letters of credit ............................ 111,554 58,517
Total utilization ............................ 384,554 291,517
Availability ................................. 65,446 158,483
Total credit line ........................... $ 450,000 $ 450,000
Interest paid was $19,194,000 and $16,819,000 for the first three months of
1995 and 1994, respectively.
</TABLE>
5. Capital Stock
During the first quarter of 1995, options to purchase 168,333 shares of
common stock of Tosco (Common Stock) were granted at $29.25. Quarterly dividends
of $.16 per share of Common Stock were paid on March 31, 1995 to shareholders of
record on March 21, 1995.
6. Income Taxes
<TABLE>
<CAPTION>
The provision (credit) for income taxes is summarized
below:
Three Months Ended March 31,
-----------------------------
1995 1994
----------- ---------
(Thousands of Dollars)
<S> <C> <C>
Federal ............................. ($ 2,487) $ 21,096
State ............................. (530) 5,930
Foreign ........................... 135
Provision (credit)
for income taxes ................... ($ 2,882) $ 27,026
Cash payments (refunds)
of income taxes, net .................. ($ 3,746) $ 833
</TABLE>
7. Contingencies
Environmental exposures are difficult to assess and estimate for numerous
reasons including the complexity and differing interpretations of governmental
regulations, the lack of reliable data, the number of potentially responsible
parties and their financial capabilities, the multiplicity of possible
solutions, the years of remedial and monitoring activity required, and the
identification of new sites. Tosco continues to evaluate, on a quarterly basis,
its liability for environmental costs, net of liabilities transferred pursuant
to the settlement of outstanding litigation concerning environmental issues with
the predecessor owners of the Avon Refinery. While Tosco believes that its
environmental cost accrual is adequate, should these matters be resolved
unfavorably to Tosco, they could have a material adverse effect on its long-term
consolidated financial position and results of operations.
8. Subsequent Events
In view of uncertain refining margins and the competitive refining
environment, Tosco has taken steps to reduce operating costs and increase
efficiencies. During the first quarter of 1995, Tosco announced a restructuring
program designed to reduce costs and improve operating efficiencies in response
to continuing poor refining margins. The estimated cost of approximately $5.2
million, $2.2 million of which was recorded in the first quarter with the $3.0
million balance to be recorded in the second quarter of 1995, is primarily for
the severance cost of approximately 175 people at the Avon Refinery and related
support locations.
<PAGE>
Amended Credit Agreement
Tosco amended its existing collateralized credit facility effective April
7, 1995 (Amended Revolving Credit Facilities). The amendment provides a one year
extension and reduces the cost of borrowings and credit availability. Cash
borrowings under the Amended Revolving Credit Facilities now bear interest at
the option of Tosco at either of three alternative rates (a federal funds rate,
a Eurodollar rate, or a base rate related to prime) plus an incremental margin
for each rate option. The incremental margin is dependent on the credit rating
of the First Mortgage Bonds. The Amended Revolving Credit Facilities now expires
in April 1998.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Introduction
Management's Discussion and Analysis should be read in conjunction with
Management's Discussion and Analysis included in Tosco's Annual Report on Form
10-K for 1994. Reference should also be made to the Financial Statements
included in this Form 10-Q for comparative Balance Sheet and Statement of Income
data.
Tosco's Annual Report sets forth Selected Financial Data which, in summary
form, reviewed Tosco's results of operations and capitalization over the
five-year period 1990-1994. This Management's Discussion and Analysis updates
that data.
Results of Operations - For the three months ended March 31, 1995
<TABLE>
<CAPTION>
Consolidated
Three Months Ended March 31,
-----------------------------
1995 1994
------------- ------------
(Thousands of Dollars)
<S> <C> <C>
Sales (a) .................................... $ 1,696,319 $ 1,495,688
Cost of sales ................................ 1,664,173 1,390,191
Operating contribution ....................... 32,146 105,497
Restructuring charge ......................... 2,200
Selling, general, and
administrative expense ...................... 22,602 27,098
Net interest expense ......................... 14,499 12,506
Pre-tax income (loss) ........................ ( 7,155) 65,893
Provision (credit) for
income taxes ................................. ( 2,882) 27,026
Net income (loss) ............................ ($ 4,273) $ 38,867
</TABLE>
(a) The increase in sales for the first quarter of 1995 is primarily due to
the acquisition of additional retail marketing assets and higher sales prices.
<TABLE>
<CAPTION>
Refining Data Summary
Three Months Ended March 31, 1995 and 1994
(In thousands of B/D except for refining margins)
Avon (a) Bayway (b) Ferndale (c) Consolidated
1995 1994 1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Crude and other
raw materials ........ 166.5 168.2 294.0 260.9 58.6 92.8 519.1 521.9
Petroleum products
produced:
Clean products ...... 107.5 132.3 245.8 211.3 36.3 60.7 389.6 404.3
Other finished
products ........... 54.1 33.4 54.4 56.3 13.4 30.2 121.9 119.9
Total finished
products produced .... 161.6 165.7 300.2 267.6 49.7 90.9 511.5 524.2
Refining margin
per charge
barrel (d) ........... $5.01 $7.39 $2.55 $3.77 $3.42 $4.99 $3.44 $5.15
(a) Avon's 1994 refining margin and raw materials processed were restated
to include the production costs of MTBE.
(b) Bayway's refining margins include the results of hedges on a varying
percentage of Bayway's production.
(c) Ferndale's decline in total charges and production for 1995 is due to
the refinery turnaround.
(d) As illustrated by the table, refining margins vary significantly by
refinery. This variance is due to a number of reasons including marketing
conditions in the principal areas served by the refineries, their configuration
and complexity (ability to convert raw materials into clean products), and
maintenance schedules.
</TABLE>
<PAGE>
Tosco incurred a net loss of $4.3 million, or ($.12) per fully diluted
share, on sales of $1.7 billion for the first quarter of 1995, compared to net
income of $38.9 million, or $1.04 per fully diluted share, on sales of $1.5
billion for the first quarter of 1994. Results of operation for the first
quarter of 1995 includes an after tax charge of $1.3 million ($.04 per share).
Tosco generated an operating contribution (income before the restructuring
charge, selling, general and administrative expense, net interest expense, and
income taxes) for the first quarter of 1995 of $32.1 million, a decrease of
$73.4 million from 1994. The decline was primarily due to extremely poor
refining margins and extensive scheduled turnaround maintenance. Avon's
catalytic cracker, the refinery's principal gasoline production unit, and the
processing units at the Ferndale Refinery were shutdown for 55 and 33 days,
respectively, during the first quarter of 1995. As a result, raw material
throughput at the Avon and Ferndale Refineries declined by 36,000 barrels per
day (B/D) (from 261,000 B/D for 1994 to 225,000 B/D in 1995) and production of
clean transportation fuels (gasoline and distillates) fell by 49,200 B/D (from
193,000 B/D to 143,800 B/D). The decrease in production at Tosco's West Coast
refineries was partially offset by increased production at the Bayway Refinery.
Bayway's raw material throughput increased by 33,100 B/D to 294,000 B/D while
clean product production increased by 34,500 B/D to 245,800 B/D, the highest
levels of production achieved under Tosco's ownership. While Bayway's strong
operating performance mitigated the production declines at Avon and Ferndale,
Tosco was not able to overcome weak refining margins on both coasts of the
United States. Consolidated refining margins declined by $1.71 (approximately
33%), to $3.44. Exceptionally weak market conditions resulted from the combined
impact of a surplus of heating oil due to the mild winter on the East Coast of
the United States and poor gasoline markets due to the industry's inability to
recover the higher production cost of reformulated gasolines in highly
competitive markets. The poor refining results were partially offset by the
strong performance of the retail operations. Retail marketing fuel margins
averaged $.09 per gallon during the first quarter of 1995 compared to $.08 for
the first quarter of 1994. Retail volumes sold also increased by 27,600 B/D to
66,300 B/D and operating costs increased by $5 million, over the first quarter
of 1994 primarily because of the August and December 1994 acquisitions of the
retail marketing operations in Northern California and Arizona from BP and
Exxon, respectively.
The decrease in selling, general, and administrative expense for the first
quarter of 1995 is due to significantly lower provisions for incentive
compensation and potential losses on trade receivables, partially offset by
increases in the costs of Tosco's expanded operations. The increase in net
interest expense was primarily due to higher levels of debt and higher interest
rates.
<PAGE>
Outlook
Results of operations continue to be determined by two factors: the
operating efficiency of the refineries and refining and retail marketing
margins. The turnarounds of Avon's cat cracker and the Ferndale Refinery were
completed in the first quarter and throughput volumes have returned to normal
levels. Significant turnaround activity is not planned for the balance of 1995
and assuming reasonable margins, Tosco expects to operate the refineries at high
production levels. Refining margins have also improved over the first quarter
levels but Tosco is not able to predict whether the improved level will
continue. At March 31, 1995, Bayway had locked in what it considered to be
acceptable refining margins on approximately 37% and 17% of its expected second
quarter and remaining 1995 production, respectively. In view of uncertain
refining margins and the competitive refining environment, steps have been taken
to reduce operating costs and increase efficiencies. During the first quarter of
1995, Tosco announced a restructuring program designed to reduce costs and
improve operating efficiencies in response to continuing poor refining margins.
The estimated cost of approximately $5.2 million is primarily for the severance
cost of approximately 175 people at the Avon Refinery and related support
locations. The $5.2 million restructuring charge, $2.2 million of which was
recorded in the first quarter with the $3.0 million balance to be recorded in
the second quarter of 1995, will be paid over the next 12 months from cash
provided from operations and will be more than offset by the anticipated annual
savings of approximately $10 million. Tosco's objective is to be the low-cost
refiner in each of its markets to enable Tosco to better withstand difficult
times and ensure increasing profitability in improved markets. Tosco's expansion
into retail marketing has been successful in providing earnings in a period of
poor refining margins and Tosco continues to seek opportunities to acquire
additional retail marketing assets that allow an attractive rate of return and
complement its existing refining and retail systems.
Cash flows and liquidity -- 1995
As summarized in the Statement of Cash Flows, cash increased by $10 million
during 1995 as cash provided by operating and financing activities of $118
million and $22 million, respectively, exceeded cash used in investing
activities of $130 million. Cash provided by operating activities of $118
million was from cash earnings of $22 million (net loss plus depreciation,
amortization and the restructuring charge) and a decrease in working capital of
$97 million, partially offset by a decrease from other sources of $1 million.
Net cash used in investing activities totaled $130 million, primarily for
capital additions and deferred turnaround expenditures of $48 million and $43
million, respectively, increases in short-term deposits of $32 million and a net
transfer to Tosco's former fertilizer operations for payment of liabilities of
$7 million. Cash generated from financing activities totaled $22 million as net
borrowings under the revolving credit facility of $40 million exceeded
short-term bank repayments of $12 million and dividend and other payments
totaling $6 million.
Liquidity (as measured by cash, short-term investments and deposits and
unused credit facilities) decreased by $51 million due to a decrease in credit
availability of $93 million partially offset by increases in cash and cash
equivalents of $10 million and short-term investments and deposits of $32
million. At March 31, 1995, liquidity totaled $162 million (an amount which
Tosco believes is adequate to meet its expected liquidity demands for at least
the next twelve months).
In April 1995, Tosco amended its working capital agreement to extend its
maturity date by one year to April 1998 and reduce costs. See Note 8 to the
March 31, 1995 Consolidated Financial Statements. Tosco is reviewing other
financing alternatives to improve its financial capacity and flexibility and
further reduce costs.
<PAGE>
Capital Expenditures and Capitalization
During the first three months of 1995, Tosco spent $48 million on budgeted
capital projects primarily at the Avon Refinery and the retail outlets. Capital
spending programs continued to address compliance with reformulated fuel
specifications, environmental regulations and permits, operating flexibility and
reliability, personnel/process safety, and retail expansion and modernization.
Tosco expects to fund its 1995 capital expenditures from cash provided by
operations and from available credit and other resources.
At March 31, 1995, total shareholders' equity was $565 million, a decrease
from December 31, 1994 of $10 million due to the loss of $4 million and dividend
and other payments totaling $6 million. Debt, including current maturities and
short-term bank borrowings, increased by $28 million to $758 million at March
31, 1995.
<TABLE>
<CAPTION>
TOSCO CORPORATION AND SUBSIDIARIES
PART 1 - EXHIBIT I
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
In Thousands Except Per Share Data
1995 1994
--------- ---------
<S> <C> <C>
Net income (loss) ............................... ($ 4,273) $ 38,867
Preferred stock dividends (a) (2,516)
Net income (loss) attributable to common
shareholders for primary earnings
per share computations ........................ (4,273) 36,351
Addback of dividends on preferred stock
for assumed conversion ........................ 2,516
Net income (loss) attributable to common
shareholders for fully diluted
earnings per share computations ................ ($ 4,273) $ 38,867
Weighted average number of
shares outstanding during the period ........... 37,050 32,262
Stock option equivalents ........................ 415
Shares and equivalents used for
computation of primary
earnings per share ............................. 37,050 32,677
Weighted average potentially
dilutive securities for the
assumed conversion of preferred stock .......... 4,792
Shares and equivalents used for
computation of fully diluted
earnings per share ............................. 37,050 37,469
Earnings (loss) per share:
Primary ......................................... ($ .12) $ 1.11
Fully diluted ................................... ($ .12)(b) $ 1.04
- ------------
(a) In September 1994, substantially all of the $4.375 Series F Cumulative
Convertible Preferred Stock was converted to Common Stock prior to the September
26, 1994 redemption date.
(b) Fully diluted earnings per share computations for 1995 do not assume
the conversion of stock options because the effect would be anti-dilutive.
</TABLE>
<PAGE>
PART II. Other Information
Item 1. Legal Proceedings
On January 19, 1995, the Bay Area Air Quality Management District issued an
Order terminating the Amended Conditional Order for Abatement (Air Pollution
Control Office of Bay Area Air Quality District v. Tosco.) With the termination
of the Amended Conditional Order, Tosco is no longer subject to certain
requirements with respect to odors at its Avon refinery.
In March, 1995, the Department of Toxic Substance Control of the State of
California notified numerous parties, including Tosco, that they may be
potentially responsible parties under federal law for the environmental clean up
of a landfill site known as the Eastside Landfill located near Bakersfield,
California. The source, extent and the nature of the contamination has not been
determined, but is the subject of investigation. The extent of Tosco's
liability, if any, is unknown.
On April 5, 1995, the court granted a motion of Sun Company, Inc. (R&M)'s
("Sun") to dismiss because of venue matters in the case of Tosco v. Sun Company,
Inc. (R&M) (United States District Court, Northern District of California, Case
No. 984 4190 FMS). On April 10, 1995, Tosco refiled a complaint in Oklahoma for
essentially the same relief in the case of Tosco v. Sun Company, Inc. (R&M)
(United States District Court, Western District of Oklahoma, Case No. Civ 95
556M). By letter dated April 13, 1995, Sun Company, Inc. notified Tosco and
federal and state environmental agencies of Sun's intent to file suit against
Tosco under the Resource, Conservation and Recovery Act.
On March 1, 1995, the court confirmed an agreed upon Consent Decree and
Final Judgment in the case of People of the State of California v. Tosco
(Superior Court, County of Contra Costa, California, Case No. C94-04239) which
resolved a complaint based upon an alleged release of oil onto a waterway
adjacent to the Avon refinery. On May 3, 1995, in a related matter based upon
the same incident, the United States Environmental Protection Agency entered an
agreed upon Consent Decree and Final Order.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
11. Computation of Earnings Per Share (See Part I, Exhibit I).
99. Condensed Consolidating Financial Information
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to this
report to be signed on its behalf by the undersigned thereunto duly authorized.
TOSCO CORPORATION
(Registrant)
Date: June 30, 1995
By: /s/ JEFFERSON F. ALLEN
--------------------------
Jefferson F. Allen
Executive Vice President
and Chief Financial Officer
Exhibit 99
Condensed Consolidating Financial Information
The following tables set forth the condensed consolidating
financial statements as of March 31, 1995 and for the three
months then ended of Tosco, Bayway and Tosco's other
subsidiaries. They are provided to meet the reporting and
informational requirements of Bayway as a guarantor of the 8-1/4
First Mortgage Bonds (Bayway Exchange Bonds).
<TABLE>
Condensed Consolidating Balance Sheet
(Thousands of Dollars)
March 31, 1995
Tosco Bayway Minor Subs
(Issuer) (Guarantor) (Non-guarantors) Eliminations Consolidated
---------- --------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents ................... $ 16,529 $ 15,820 $ 1,461 $ 33,810
Short-term investments and deposits ......... 3,578 35,685 23,183 62,446
Other current assets (a) .................... 295,977 435,932 32,868 764,777
Total current assets ..................... $ 316,084 $487,437 57,512 861,033
Other assets ................................ 731,406 241,713 42,480 ($ 4,366) 1,011,233
Investment in Bayway and other
subsidiaries .............................. 221,909 ( 221,909)
Intercompany receivables .................... 168,621 ( 168,621)
Total assets ............................. $1,438,020 729,150 99,992 ($ 394,896) 1,872,266
Liabilities and shareholders' equity
Current liabilities ......................... $ 256,967 236,416 34,059 527,442
Revolver and long-term debt ................. 548,940 174,000 4,579 727,519
Other liabilities ........................... 56,145 492 ($ 4,366) 52,271
Intercompany liabilities .................... 10,934 125,400 32,287 ( 168,621)
Shareholders' equity ........................ 565,034 193,334 28,575 ( 221,909) 565,034
Total liabilities and
shareholders' equity ................... $1,438,020 $729,150 $ 99,992 ($ 394,896) $1,872,266
Condensed Consolidating Statement of Income
(Thousands of Dollars)
For the Three Months Ended March 31, 1995
<S> <C> <C> <C> <C> <C>
Sales ....................................... $ 693,599 $817,488 $ 221,751 ($36,519) $1,696,319
Cost of sales ............................... 680,625 801,822 220,445 ( 36,519) 1,666,373
Operating contribution ...................... 12,974 15,666 1,306 29,946
Selling, general and administrative
expense (b) ............................... 16,075 6,231 296 22,602
Interest expense, net ....................... 8,831 5,713 (45) 14,499
Income (loss) before provision for
income taxes .............................. (11,932) 3,722 1,055 (7,155)
Provision for income taxes .................. (4,769) 1,470 417 ( 2,882)
Net income (loss) ........................... ($ 7,163) $ 2,252 $ 638 $ -- ($ 4,273)
(a) The lower of LIFO cost or market value of inventories is measured on a
consolidated basis.
(b) The condensed consolidating statement of income does not reflect an
allocation of a portion of aggregate corporate selling, general and
administrative expense of $4,335,000 to Bayway and the Minor Subsidiaries. Tosco
may allocate such costs in the future.
</TABLE>
<PAGE>
Condensed Consolidating Financial Information (continued)
<TABLE>
Condensed Consolidating Statement of Cash Flows
(Thousands of Dollars)
For the Three Months Ended March 31, 1995
Tosco Bayway Minor Subs
(Issuer) (Guarantor) (Non-guarantors) Consolidated
-------- ----------- ---------------- -------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ......................... ($7,163) $ 2,252 $ 638 ($4,273)
Depreciation and amortization ............. 16,690 6,825 413 23,928
Changes in working capital ................ 48,867 71,410 (20,918) 99,359
Other ..................................... (935) (334) (1,269)
Net cash provided by (used in)
operating activities .................... 57,459 80,487 (20,201) 117,745
Cash flows from investing activities:
Increase in long-term assets .............. (86,667) (2,380) (2,261) (91,308)
Transfers to discontinued operations ...... (6,646) (6,646)
Intercompany transfers .................... 421 (23,607) 23,186
Intercompany dividend ..................... (297) 297
Net change in short-term investments
and deposits ............................ (2,108) (27,518) (1,991) (31,617)
Net cash used in investing activities ..... (95,297) (53,208) 18,934 (129,571)
Cash flows from financing activities:
Short-term bank repayments and borrowings
(repayments) under revolver, net ......... 59,000 (31,000) 28,000
Dividends on Common Stock ................. (5,932) (5,932)
Other ..................................... (225) (225)
Net cash provided by (used in) financing
activities ............................... 52,843 (31,000) 21,843
Net increase (decrease) in cash and cash
equivalents ............................... 15,005 ( 3,721) (1,267) 10,017
Cash and cash equivalents at beginning of
period .................................... 1,524 19,541 2,728 23,793
Cash and cash equivalents at end of period .. $16,529 $15,820 $1,461 $33,810
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 33,810
<SECURITIES> 24,882
<RECEIVABLES> 269,846
<ALLOWANCES> 8,622
<INVENTORY> 457,492
<CURRENT-ASSETS> 861,033
<PP&E> 855,779
<DEPRECIATION> 14,160
<TOTAL-ASSETS> 1,872,266
<CURRENT-LIABILITIES> 527,442
<BONDS> 450,000
<COMMON> 29,702
0
0
<OTHER-SE> 535,332
<TOTAL-LIABILITY-AND-EQUITY> 1,872,266
<SALES> 1,696,319
<TOTAL-REVENUES> 1,696,319
<CGS> 1,666,373
<TOTAL-COSTS> 1,666,373
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,398
<INCOME-PRETAX> (7,155)
<INCOME-TAX> (2,882)
<INCOME-CONTINUING> (4,273)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,273)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
