-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LGrpNmGrXe1LYTPsQbUlI7wijm8KoTwGAnQAlyZ8h68vRRCVXeZdf4JkNDOIv/um 2v3+jRsp6ter/2zDcnUVkQ== 0000950129-98-003348.txt : 19980813 0000950129-98-003348.hdr.sgml : 19980813 ACCESSION NUMBER: 0000950129-98-003348 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980810 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980812 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TESORO PETROLEUM CORP /NEW/ CENTRAL INDEX KEY: 0000050104 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 950862768 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-03473 FILM NUMBER: 98682850 BUSINESS ADDRESS: STREET 1: 8700 TESORO DR CITY: SAN ANTONIO STATE: TX ZIP: 78217 BUSINESS PHONE: 2108288484 8-K 1 TESORO PETROLEUM CORPORATION - DATED 8/10/98 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 10, 1998 TESORO PETROLEUM CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-3473 95-0862768 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File Number) Identification No.)
8700 TESORO DRIVE, SAN ANTONIO, TEXAS 78217-6218 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 210-828-8484 ================================================================================ 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On August 10, 1998, Tesoro Petroleum Corporation ("Tesoro" or the "Company") completed the acquisition (the "Washington Acquisition"), effective August 1, 1998, of all of the outstanding capital stock of Shell Anacortes Refining Company, an affiliate of Shell Oil Company. The acquisition includes a 108,000 barrel per day refinery located in Anacortes, Washington (on the Puget Sound, approximately 60 miles north of Seattle) and related assets. The refinery will operate under the name Tesoro Northwest Company. Tesoro paid $237 million in cash for the acquisition plus $39.6 million for estimated working capital, which is subject to post-closing adjustments to reflect actual net working capital at closing. To finance the cash consideration paid in the Washington Acquisition and the acquisition of the Company's Hawaii operations, the Company, among other things, issued $300 million aggregate principal amount of its 9% Senior Subordinated Notes due 2008 (the "Notes Offering") in July 1998 through a private offering eligible for Rule 144A. On August 7, 1998, a Registration Statement was declared effective by the Securities and Exchange Commission whereby the Company is offering, upon the terms and subject to the conditions set forth in the related Prospectus, to exchange $1,000 principal amount of its registered 9% Senior Subordinated Notes due 2008, Series B (the "Exchange Notes"), for each $1,000 principal amount of its unregistered and outstanding 9% Senior Subordinated Notes due 2008 (the "Old Notes"). The terms of the Exchange Notes are identical in all material respects to the terms of the Old Notes, except as described in the Prospectus. Concurrent with the Notes Offering, the Company entered into a new senior credit facility (the "Senior Credit Facility") in the amount of $500 million. The Senior Credit Facility is comprised of term loan facilities aggregating $200 million (two $100 million tranches, the "Tranche A Term Loans" and the "Tranche B Term Loan") and a $300 million revolving credit facility. The Senior Credit Facility is guaranteed by substantially all of the Company's active direct and indirect subsidiaries (the "Guarantors") and is secured by substantially all of the domestic assets of the Company and each of the Guarantors. 2 3 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The Audited Financial Statements of Shell Anacortes Refining Company as of December 31, 1996 and 1997 and Unaudited Financial Statements of Shell Anacortes Refining Company as of March 31, 1998 have been previously filed in the Registrant's Current Report on Form 8-K dated May 29, 1998 and filed on June 5, 1998. (b) PRO FORMA FINANCIAL INFORMATION. Included as Exhibit 99.1 of this Form 8-K are the unaudited pro forma combined condensed financial statements of the Company, BHP Petroleum Americas Refining Inc. and BHP Petroleum South Pacific Inc. and Shell Anacortes Refining Company as of March 31, 1998 and for the year ended December 31, 1997 and three months ended March 31, 1998. (c) EXHIBITS +99.1 Unaudited Pro Forma Combined Condensed Financial Statements of the Company, BHP Petroleum Americas Refining Inc. and BHP Petroleum South Pacific Inc. and Shell Anacortes Refining Company as of March 31, 1998 and for the year ended December 31, 1997 and three months ended March 31, 1998. - --------------------------- + Filed herewith. 3 4 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 hereunto duly authorized. TESORO PETROLEUM CORPORATION REGISTRANT Date: August 11, 1998 By: /s/ JAMES C. REED, JR. ----------------------------------- James C. Reed, Jr. Executive Vice President, General Counsel and Secretary 4 5 EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- +99.1 Unaudited Pro Forma Combined Condensed Financial Statements of the Company, BHP Petroleum Americas Refining Inc. and BHP Petroleum South Pacific Inc. and Shell Anacortes Refining Company as of March 31, 1998 and for the year ended December 31, 1997 and three months ended March 31, 1998. - --------------------------- + Filed herewith. 5 EX-99.1 2 UNAUDITED PRO FORMA COMBINED COND. FIN. STMTS. 1 EXHIBIT 99.1 PRO FORMA COMBINED FINANCIAL STATEMENTS The unaudited pro forma combined condensed financial statements give effect to the following transactions (collectively, the "Transactions"): (i) On May 29, 1998, Tesoro Petroleum Corporation (the "Company" or "Tesoro") completed the acquisition (the "Hawaii Acquisition") of all of the outstanding capital stock of BHP Petroleum Americas Refining Inc. and BHP Petroleum South Pacific Inc. (together, "BHP Hawaii"), both of which were affiliates of The Broken Hill Proprietary Company Limited ("BHP"). Tesoro paid $243.5 million in cash at closing for the acquisition, including $68.5 million for estimated working capital, which is subject to post-closing adjustments. In addition, Tesoro issued an unsecured, non-interest bearing promissory note (the "BHP Note") in the amount of $50 million for the Hawaii Acquisition, which is payable in five equal annual installments, beginning on the eleventh anniversary date of the closing. (ii) On August 10, 1998, Tesoro completed the acquisition (the "Washington Acquisition", effective August 1, 1998, and together with the Hawaii Acquisition, the "Acquisitions") of all of the outstanding capital stock of Shell Anacortes Refining Company ("Shell Washington"), an affiliate of Shell Oil Company. Tesoro paid $237 million in cash for the acquisition plus $39.6 million for estimated working capital, which is subject to post-closing adjustments to reflect actual net working capital at closing. (iii) In conjunction with the Hawaii Acquisition, Tesoro borrowed funds to finance the cash consideration for the Hawaii Acquisition and refinance substantially all of its then-existing indebtedness. These borrowings were financed through term loans and a revolving credit facility ("Interim Credit Facility") which was fully underwritten by Lehman Commercial Paper Inc., an affiliate of Lehman Brothers Inc. In July 1998, the Company refinanced all borrowings under the Interim Credit Facility with net proceeds from the Offerings (as defined below) and borrowings under the Senior Credit Facility (as defined below). (iv) On July 2, 1998, and in connection with the Notes Offering (as defined below) and the Washington Acquisition, the Company entered into a new senior credit facility (the "Senior Credit Facility") in the amount of $500 million. The Senior Credit Facility is comprised of term loan facilities aggregating $200 million (two $100 million tranches, the "Tranche A Term Loans" and the "Tranche B Term Loan", collectively the "Term Loans") and a $300 million revolving credit facility (the "Revolver"). (v) On July 2, 1998, concurrently with the syndication of the Senior Credit Facility, the Company issued $300 million aggregate principal amount of 9% Senior Subordinated Notes (the "Notes Offering"). On July 1, 1998, the Company issued 9,000,000 Premium Income Equity Securities ("PIES"), representing interests in the Company's Mandatorily Convertible Preferred Stock, with gross proceeds of $143.4 million (the "PIES Offering"), and 5,000,000 shares of Common Stock, with gross proceeds of $79.7 million (the "Common Stock Offering," and together with the Notes Offering and the PIES Offering, the "Offerings"). Upon exercise of the over-allotment options granted to the underwriters of the Common Stock Offering and PIES Offering, the Company issued 1,350,000 PIES with gross proceeds of $21.5 million and 750,000 shares of Common Stock with gross proceeds of $11.9 million. Borrowings under the Senior Credit Facility, together with the net proceeds from the Offerings, were used to fund the cash purchase price of the Washington Acquisition, to refinance the Interim Credit Facility (a portion of which was used to finance the Hawaii Acquisition), to pay certain fees and expenses related to the Transactions and for general corporate purposes (including working capital requirements and capital expenditures). The Acquisitions are being accounted for using the purchase method of accounting. These unaudited pro forma combined condensed statements have been prepared from, and should be read in conjunction with, the historical consolidated financial statements and notes thereto, which have been previously filed with the Securities and Exchange Commission. The Unaudited Pro Forma Combined Condensed Balance Sheet gives effect to the Transactions as if each had occurred on March 31, 1998. The Unaudited Pro Forma Condensed Statements of Operations for the year ended December 31, 1997, and the three months ended March 31, 1998, give effect to the Transactions as if each had occurred on January 1, 1997. BHP Hawaii's results of operations, which are reported on a fiscal year ending May 31, have been adjusted to Tesoro's reporting periods. The estimates of the fair value of BHP Hawaii's and Shell Washington's assets and liabilities are based on valuations that are preliminary. Such valuations may be updated with respect to the Hawaii Acquisition and the Washington Acquisition, and may change from the amounts shown herein; however, the Company does not expect such changes to be material. The unaudited pro forma combined condensed financial statements are intended for informational purposes and are not necessarily indicative of the future financial position or future results of the combined companies or of the financial position or the results of operations that would have actually occurred had the Acquisitions been in effect as of the date or for the periods presented. 2 UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET MARCH 31, 1998
HISTORICAL -------------------------------- BHP SHELL PRO FORMA PRO FORMA TESORO HAWAII WASHINGTON ADJUSTMENTS COMBINED -------- -------- ---------- ----------- ----------- (IN THOUSANDS) ASSETS Current Assets: Cash and cash equivalents............................. $ 2,274 $ 2,519 $ 25 $ (2,544)(a) $ 4,975 2,701(b) Receivables........................................... 64,518 84,304 12,600 (42,372)(a) 119,050 Inventories........................................... 97,793 71,050 41,305 10,891(c) 221,039 Prepayments and other................................. 7,984 3,919 4,349 (688)(d) 15,564 -------- -------- -------- --------- ---------- Total Current Assets........................... 172,569 161,792 58,279 (32,012) 360,628 -------- -------- -------- --------- ---------- Property, Plant and Equipment: Refining and marketing................................ 368,183 209,804 372,768 (82,572)(e) 868,183 Exploration and production............................ 311,872 -- -- 311,872 Marine services....................................... 48,201 -- -- 48,201 Corporate............................................. 13,802 -- -- 13,802 -------- -------- -------- --------- ---------- 742,058 209,804 372,768 (82,572) 1,242,058 Less accumulated depreciation, depletion and amortization...................................... 317,645 -- 188,127 (188,127)(e) 317,645 -------- -------- -------- --------- ---------- Net Property, Plant and Equipment................... 424,413 209,804 184,641 105,555(e) 924,413 -------- -------- -------- --------- ---------- Other Assets............................................ 38,447 3,295 8,774 47,271(f) 113,871 17,819(g) (1,735)(d) -------- -------- -------- --------- ---------- Total Assets................................... $635,429 $374,891 $251,694 $ 136,898 $1,398,912 ======== ======== ======== ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable...................................... $ 44,275 $ 46,831 $ 9,819 $ (3,553)(a) $ 97,372 Accrued liabilities and current income taxes payable............................................. 30,253 12,901 4,833 9,886(h) 57,873 Current maturities of long-term debt and other obligations......................................... 11,428 1,003 -- (9,731)(g) 2,700 -------- -------- -------- --------- ---------- Total Current Liabilities...................... 85,956 60,735 14,652 (3,398) 157,945 -------- -------- -------- --------- ---------- Deferred Income Taxes................................... 31,003 -- 25,523 55,065(j) 111,591 -------- -------- -------- --------- ---------- Other Liabilities....................................... 42,821 29,460 14,412 (18,372)(h) 68,321 -------- -------- -------- --------- ---------- Long-Term Debt and Other Obligations, Less Current Maturities............................................ 136,290 8,433 -- 336,082(g) 480,805 -------- -------- -------- --------- ---------- Notes Payable to Affiliate.............................. -- 145,000 -- (145,000)(a) -- -------- -------- -------- --------- ---------- Stockholders' Equity: Preferred Stock....................................... -- -- -- 164,954(b) 164,954 Common Stock.......................................... 4,419 8,208 3 958(b) 5,377 (8,211)(k) Additional paid-in capital............................ 191,000 52,362 181,011 80,540(b) 271,540 (233,373)(k) Retained earnings..................................... 147,039 70,693 16,093 (86,786)(k) 141,478 (8,178)(g) 2,617(i) Treasury stock........................................ (3,099) -- -- (3,099) -------- -------- -------- --------- ---------- Total Stockholders' Equity..................... 339,359 131,263 197,107 (87,479) 580,250 -------- -------- -------- --------- ---------- Total Liabilities and Stockholders' Equity..... $635,429 $374,891 $251,694 $ 136,898 $1,398,912 ======== ======== ======== ========= ==========
3 NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET MARCH 31, 1998 (a) Represents an adjustment to exclude assets and liabilities of BHP Hawaii and Shell Washington that were not acquired by Tesoro. (b) Represents an adjustment for the issuance of Mandatorily Convertible Preferred Stock and Common Stock, the proceeds of which were used to finance the Transactions. (c) Represents an adjustment of finished goods inventories to net realizable value, less an allowance for a normal profit margin, and of raw materials inventories to replacement cost. (d) Represents an adjustment to conform the accounting policy for refinery maintenance costs to that of Tesoro. (e) Represents an adjustment of property, plant and equipment to fair value. (f) Represents the excess purchase price over the book value of net assets acquired. (g) Represents an adjustment to reflect the $50 million non-interest bearing BHP Note (discounted at 10%) plus aggregate borrowings of $448 million to finance the Acquisitions, to refinance existing indebtedness of Tesoro and to pay related fees, expenses and debt issue costs. (h) Represents an adjustment to liabilities for certain employee benefits and for environmental matters taking into effect environmental agreements which provide for certain environmental indemnifications. (i) Represents an adjustment to reduce income taxes payable for the tax effect resulting from charges to earnings related to the refinancing of existing indebtedness. (j) Represents an adjustment to record the deferred tax obligations for differences in book and tax basis for the Washington Acquisition. (k) Represents the elimination of historical equity of BHP Hawaii and Shell Washington. 4 UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
HISTORICAL ------------------------------------ BHP SHELL PRO FORMA PRO FORMA TESORO HAWAII WASHINGTON ADJUSTMENTS COMBINED -------- ---------- ---------- -------------- ----------- (IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS) Revenues: Refining and marketing....... $720,868 $ 946,727 $1,089,918 $ $2,757,513 Exploration and production... 84,798 -- -- 84,798 Marine services.............. 132,251 -- -- 132,251 Other income................. 5,543 211 52 5,806 -------- ---------- ---------- --------- ---------- Total Revenues....... 943,460 946,938 1,089,970 2,980,368 -------- ---------- ---------- --------- ---------- Operating Costs and Expenses: Refining and marketing....... 687,036 882,104 1,038,085 1,500(a) 2,608,725 Exploration and production... 13,230 -- -- 13,230 Marine services.............. 124,725 -- -- 124,725 Depreciation, depletion and amortization.............. 45,729 13,762 12,715 (3,543)(b) 70,554 1,891 (c) Refinery assets writedown.... 88,813 -- (88,813)(d) -- Goodwill write-off........... -- 30,351 -- (30,351)(d) -- -------- ---------- ---------- --------- ---------- Total Operating Costs and Expenses....... 870,720 1,015,030 1,050,800 (119,316) 2,817,234 -------- ---------- ---------- --------- ---------- Operating Profit (Loss)........ 72,740 (68,092) 39,170 119,316 163,134 General and Administrative..... (13,588) (25,054)(e) (14,277) (52,919) Interest Expense, Net of Capitalized Interest......... (6,699) (8,227) (252) 14,291 (f) (52,579) (51,692)(g) Interest Income................ 1,597 -- -- 1,597 Other Expense, Net............. (4,930) -- -- (2,894)(h) (7,824) -------- ---------- ---------- --------- ---------- Earnings Before Income Taxes... 49,120 (101,373) 24,641 79,021 51,409 Income Tax Provision........... 18,435 (27,032) 8,902 19,230(i) 19,535 -------- ---------- ---------- --------- ---------- Earnings Before Extraordinary Items........................ 30,685 (74,341) 15,739 59,791 31,874 Preferred Dividend............. -- -- -- (11,959)(j) (11,959) -------- ---------- ---------- --------- ---------- Earnings Before Extraordinary Items Available for Common Shares....................... $ 30,685 $ (74,341) $ 15,739 $ 47,832 $ 19,915 ======== ========== ========== ========= ========== Weighted Average Common Shares -- Basic.............. 26,410 5,750 32,160 ======== ========= ========== Weighted Average Common Shares and Potentially Dilutive Common Shares -- Diluted..... 26,868 5,750 32,618 ======== ========= ========== Earnings Before Extraordinary Items: Per Share -- Basic........... $ 1.16 $ 0.62 ======== ========== Per Share -- Diluted......... $ 1.14 $ 0.61 ======== ==========
5 UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998
HISTORICAL --------------------------------- BHP SHELL PRO FORMA PRO FORMA TESORO HAWAII WASHINGTON ADJUSTMENTS COMBINED -------- --------- ---------- -------------- ----------- (IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS) Revenues: Refining and marketing.......... $140,213 $ 210,447 $201,431 $ $ 552,091 Exploration and production...... 22,222 -- 22,222 Marine services................. 32,818 -- 32,818 Other income.................... 786 (3) 30 813 -------- --------- -------- --------- --------- Total Revenues.......... 196,039 210,444 201,461 607,944 -------- --------- -------- --------- --------- Operating Costs and Expenses: Refining and marketing.......... 130,720 191,642 195,685 1,500 (a) 519,547 Exploration and production...... 3,925 -- -- 3,925 Marine services................. 30,597 -- -- 30,597 Depreciation, depletion and amortization................. 12,944 -- 3,703 2,030 (b) 19,150 473 (c) Refinery assets writedown....... -- 125,049 -- (125,049)(d) -- -------- --------- -------- --------- --------- Total Operating Costs and Expenses.......... 178,186 316,691 199,388 (121,046) 573,219 -------- --------- -------- --------- --------- Operating Profit (Loss)........... 17,853 (106,247) 2,073 121,046 34,725 General and Administrative........ (3,372) (5,139) (2,512) (11,023) Interest Expense, Net of Capitalized Interest............ (2,665) (2,436) (10) 4,708 (f) (13,326) (12,923)(g) Interest Income................... 108 -- -- 108 Other Expense, Net................ (1,034) -- -- (703)(h) (1,737) -------- --------- -------- --------- --------- Earnings Before Income Taxes...... 10,890 (113,822) (449) 112,128 8,747 Income Tax Provision.............. 4,831 (33,676) (80) 32,774 (i) 3,849 -------- --------- -------- --------- --------- Earnings Before Extraordinary Items........................... 6,059 (80,146) (369) 79,354 4,898 Preferred Dividend................ -- -- -- (2,990)(j) (2,990) -------- --------- -------- --------- --------- Earnings Before Extraordinary Items Available for Common Shares.......................... $ 6,059 $ (80,146) $ (369) $ 76,364 $ 1,908 ======== ========= ======== ========= ========= Weighted Average Common Shares - Basic........................... 26,309 5,750 32,059 ======== ========= ========= Weighted Average Common Shares and Potentially Dilutive Common Shares -- Diluted............... 26,789 5,750 32,539 ======== ========= ========= Earnings Before Extraordinary Items: Per Share -- Basic.............. $ 0.23 $ 0.06 ======== ========= Per Share -- Diluted............ $ 0.23 $ 0.06 ======== =========
6 NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 AND THREE MONTHS ENDED MARCH 31, 1998 (a) Represents an adjustment for a Tesoro contract termination. (b) Represents an adjustment in depreciation expense due to the change in property, plant and equipment to fair value. Pro forma depreciation is calculated on the straight-line method over estimated useful lives of 28 years for refineries and five to ten years for machinery, equipment and buildings. (c) Represents the amortization of goodwill over 25 years. (d) Represents elimination of the charge for asset and goodwill impairment recognized in the BHP Hawaii historical financial statements. (e) Includes BHP Hawaii employee bonuses of $4 million in the year ended December 31, 1997, which were awarded based upon the performance of BHP operations that are not to be acquired by Tesoro. (f) Represents elimination of interest on BHP Hawaii's obligations that were not assumed by Tesoro and the elimination of interest on Tesoro's obligations that were refinanced. (g) Represents additional interest under the Revolver, the Term Loans, the 9% Senior Subordinated Notes and accretion of the $50 million BHP Note. (h) Represents the amortization of debt issuance costs related to the Revolver, the Term Loans and the 9% Senior Subordinated Notes. (i) Represents the tax effect of the adjustments above, excluding amortization of goodwill for the Washington Acquisition. (j) Represents a 7.25% annual dividend rate on the Mandatorily Convertible Preferred Stock. -----END PRIVACY-ENHANCED MESSAGE-----