-----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, Pf5FsCRUq+l9hygoxurEhkJLDJgKQV/ra9tKYrT/uqcTtvq73t1L9dEcOqOLMbFl vB8gUEkzNSZmsAurBd/YqQ== 0001157523-03-001512.txt : 20030430 0001157523-03-001512.hdr.sgml : 20030430 20030430121351 ACCESSION NUMBER: 0001157523-03-001512 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030430 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030430 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: 1934 Act SEC FILE NUMBER: 001-03473 FILM NUMBER: 03671551 BUSINESS ADDRESS: STREET 1: 300 CONCORD PLAZA DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78216-6999 BUSINESS PHONE: 2108288484 MAIL ADDRESS: STREET 1: 300 CONCORD PLAZA DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78216-6999 8-K 1 a4386656.txt TESORO PETROLEUM 8-K - -------------------------------------------------------------------------------- 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): April 30, 2003 Tesoro Petroleum Corporation (Exact name of registrant as specified in its charter) Delaware 1-3473 95-0862768 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 300 Concord Plaza Drive 78216-6999 San Antonio, Texas (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (210) 828-8484 - -------------------------------------------------------------------------------- 1 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. 99.1 Press Release issued on April 30, 2003 by Tesoro Petroleum Corporation Item 9. Regulation FD Disclosure The following information, which is intended to be furnished under Item 12 "Results of Operations and Financial Condition," is being furnished under this Item 9 in accordance with SEC Release No. 34-47583. This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. On April 30, 2003 Tesoro issued a press release (the "Press Release") announcing financial results for its first quarter ended March 31, 2003. The foregoing is qualified by reference to the Press Release which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 30, 2003 TESORO PETROLEUM CORPORATION By: /s/ Gregory A. Wright ------------------------------ Gregory A. Wright Senior Vice President and Chief Financial Officer 3 Index to Exhibits Exhibit Number Description 99.1 Press Release issued on April 30, 2003 by Tesoro Petroleum Corporation. 4 EX-99 3 a4386656_ex991.txt TESORO PETROLEUM EXHIBIT 99.1 Exhibit 99.1 Tesoro Reports First Quarter Earnings SAN ANTONIO--(BUSINESS WIRE)--April 30, 2003--Tesoro Petroleum Corporation (NYSE:TSO) today reported net income of $20.4 million or $0.32 per share for the first quarter of 2003 compared to a net loss of $55.6 million or $1.15 per share for the first quarter of 2002. The first quarter of 2003 results include $8.8 million in pre-tax charges, or $0.08 per share, which are primarily related to the company's early retirement program and severance costs. "Our first quarter operating income of $79.5 million demonstrates the earnings potential of our assets, which last year did not include our California refinery," said Bruce A. Smith, Chairman, President and CEO of Tesoro. "In addition to the benefit of that refinery, the results were better due to stronger industry margins and the continued progress of our operating income initiatives," Smith said. "Compared to the average of the third and fourth quarters of last year, which is our baseline period for measuring improvements, we made good progress toward our $65 million goal. First quarter operating income improved by $15 million, as we reduced costs by $10 million and captured non-capital refining improvements totaling $5 million. A component of these initiatives was a company-wide workforce reduction that included a voluntary early retirement program. Overall, we estimate that our workforce reduction program will realize annual savings of nearly $20 million from the elimination of 214 full-time and contract positions. We also believe that costs in the second quarter will continue to decline and that we will achieve our goal by the end of 2003," added Smith. On April 17 Tesoro completed its previously announced refinancing of its senior secured credit facility. "With this refinancing, we reduced our annual cash interest expense, improved our overall financial flexibility and positioned ourselves to expedite our debt reduction program. It is our belief that these changes will permit us to withstand lower industry margins," said Smith. The company also repaid $76 million in term debt during the quarter. "Our plan has targeted $500 million in debt reduction by the end of 2003. As of March 31 we had $300 million remaining on our goal. With the benefit of the new credit facility and with reasonable margins, we expect to continue to generate strong cash flow. Debt reduction is our top financial priority and I am committed to achieving the targeted debt reduction I set last June," added Smith. Public Invited to Listen to Analyst Conference Call via Internet At 2 p.m., CDT, today Tesoro will broadcast, live, its conference call with analysts regarding first quarter 2003 results. Interested parties may listen to the live conference call over the Internet by logging on to Tesoro's Internet site at http://www.tesoropetroleum.com and clicking on the "What's New" section. Tesoro Petroleum Corporation, a Fortune 500 Company, is an independent refiner and marketer of petroleum products and provider of marine logistics services. Tesoro operates six refineries in the western United States with a combined capacity of nearly 560,000 barrels per day. Tesoro's retail-marketing system includes approximately 600 branded retail stations, of which over 200 are company operated under the Tesoro(R) and Mirastar(R) brands. This news release contains certain statements that are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements contain expectations with respect to the company's future cash interest expense, working capital requirements and debt and cost reduction initiatives. Factors which may cause actual results to differ from those forward-looking statements include: changes in general economic conditions, the timing and extent of changes in demand for refined products, availability and cost of crude oil, other feedstock's, or of refined products, the price differentials between light and heavy crude oils and light and heavy refined products, throughput and yield levels, disruptions due to equipment interruptions or failure at Company or third-party facilities, and other factors beyond the Company's control. For more information concerning factors that could cause such a difference, see the company's annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances that occur, or which the Company becomes aware of, after the date hereof. TESORO PETROLEUM CORPORATION STATEMENT OF CONSOLIDATED OPERATIONS (Unaudited) (In millions except per share amounts) Three Months Ended March 31, ------------------ 2003(a) 2002(b) -------- -------- Revenues $2,286.1 $1,232.6 Costs and Expenses Costs of sales and operating expenses 2,131.1 1,231.9 Selling, general and administrative expenses 38.3 38.5 Depreciation and amortization 37.0 25.2 Loss on asset sales 0.2 0.2 -------- -------- Operating Income (Loss) 79.5 (63.2) Interest and Financing Costs, Net of Capitalized Interest (47.2) (30.3) Interest Income 0.2 0.7 -------- -------- Earnings (Loss) Before Income Taxes 32.5 (92.8) Income Tax Provision (Benefit) 12.1 (37.2) -------- -------- Net Earnings (Loss) $ 20.4 $ (55.6) ======== ======== Net Earnings (Loss) Per Share Basic $ 0.32 $ (1.15) ======== ======== Diluted $ 0.32 $ (1.15) ======== ======== Weighted Average Common Shares Basic 64.6 48.2 ======== ======== Diluted 64.7 48.2 ======== ======== ------------------------------ (a) Results for 2003 include the California refinery operations acquired in May 2002 and interest expense for the related financing. (b) Certain reclassifications were made to prior period amounts to conform to current presentation, principally to reclassify amortization of major maintenance turnaround costs from operating expenses to depreciation and amortization and to net purchases and sales considered to be energy trading contracts. TESORO PETROLEUM CORPORATION SELECTED OPERATING SEGMENT DATA (Unaudited) (In millions) Three Months Ended March 31, ------------------ 2003(a) 2002(b) -------- -------- Operating Income (Loss) Refining $ 109.2 $ (35.8) Retail (8.1) (9.6) Other 1.1 0.5 -------- -------- Total Segment Operating Income 102.2 (44.9) Corporate and Unallocated Costs(c) (22.5) (18.1) Loss on asset sales (0.2) (0.2) -------- -------- Operating Income (Loss) 79.5 (63.2) Interest and Financing Costs, Net of Capitalized Interest (47.2) (30.3) Interest Income 0.2 0.7 -------- -------- Earnings (Loss) Before Income Taxes $ 32.5 $ (92.8) ======== ======== Depreciation and Amortization Refining 29.8 $ 20.4 Retail 5.0 3.4 Other 0.7 0.7 Corporate 1.5 0.7 -------- -------- Depreciation and Amortization $ 37.0 $ 25.2 ======== ======== Capital Expenditures Refining $ 27.0 $ 36.3 Retail 0.2 10.1 Other 0.3 1.2 Corporate 0.2 5.0 -------- -------- Capital Expenditures $ 27.7 $ 52.6 ======== ======== ------------------------------ (c) Corporate and unallocated costs in 2003 include $4.6 million in reorganization costs, primarily a non-cash charge for voluntary early retirement benefits and severance payments. An additional $4.2 million of reorganization costs were charged to the operating segments, including $2.6 million in Refining, $1.2 million in Retail and $0.4 million in Other. Unallocated costs also include a $1.1 million non-cash charge for the cumulative effect of a required accounting change for asset retirement obligations. BALANCE SHEET DATA (Unaudited) (Dollars in millions) March 31, Dec. 31, 2003 2002 --------- --------- Total Assets $ 3,664.0 $ 3,758.8 Total Debt $ 1,906.0 $ 1,976.7 Total Stockholders' Equity $ 908.0 $ 887.6 Total Debt to Capitalization Ratio 68% 69% TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended March 31, ------------------ 2003(a) 2002(b) -------- -------- REFINING SEGMENT Total Refining Segment Throughput (thousand barrels per day) Heavy crude 282.9 113.3 Light crude 167.5 195.1 Other feedstocks 14.1 5.3 -------- -------- Total Throughput 464.5 313.7 ======== ======== Yield (thousand barrels per day) Gasoline and gasoline blendstocks 229.8 118.1 Jet fuel 56.5 62.0 Diesel fuel 97.7 52.9 Heavy oils, residual products, internally produced fuel and other 100.0 85.7 -------- -------- Total Yield 484.0 318.7 ======== ======== Refining Margin ($/throughput bbl)(d) Gross $ 6.92 $ 2.52 Manufacturing cost before depreciation and amortization(e) $ 2.90 $ 2.21 Segment Operating Income ($ millions) Gross refining margin (after inventory changes)(f) $ 294.8 $ 80.1 Expenses(g) Manufacturing costs 121.3 62.3 Other operating expenses 26.4 23.8 Selling, general and administrative 8.1 9.4 Depreciation and amortization(h) 29.8 20.4 -------- -------- Segment Operating Income (Loss) $ 109.2 $ (35.8) ======== ======== Product Sales (thousand barrels per day)(i) Gasoline and gasoline blendstocks 270.0 208.0 Jet fuel 87.3 88.0 Diesel fuel 123.5 95.5 Heavy oils, residual products and other 62.7 59.4 -------- -------- Total Product Sales 543.5 450.9 ======== ======== Product Sales Margin ($/barrel) Average sales price $ 42.59 $ 26.15 Average costs of sales 36.60 24.18 -------- -------- Product Sales Margin $ 5.99 $ 1.97 ======== ======== ------------------------------ (d) Management uses gross refining margin per barrel to compare profitability to other companies in the industry. Gross refining margin per barrel is calculated by dividing gross refining margin by total refining throughput. Gross refining margin per barrel may not be comparable to similarly titled measures used by other entities. (e) Management uses manufacturing costs per barrel to evaluate the efficiency of refinery operations. Manufacturing costs per barrel may not be comparable to similarly titled measures used by other entities. (f) Gross refining margin is revenues less cost of refining feedstock and purchased products. Approximates total Refining segment throughput times gross refining margin per barrel, adjusted for changes in refined product inventory due to selling a volume and mix of product that is different than actual volumes manufactured. Also includes the effect of intersegment sales to the Retail segment at prices which approximate market. (g) Includes $2.6 million for voluntary early retirement benefits and severance payments in 2003. (h) Includes manufacturing depreciation and amortization per throughput barrel of approximately $0.62 and $0.55 for the three months ended March 31, 2003 and 2002, respectively. (i) Sources of total product sales include products manufactured at the refineries, products drawn from inventory balances and products purchased from third parties. TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended March 31, ------------------- 2003 2002 -------- -------- Refining By Region Pacific Northwest (Alaska & Washington) Throughput (thousand barrels per day) Heavy crude 79.6 53.6 Light crude 62.9 79.8 Other feedstocks 7.4 1.7 -------- -------- Total Throughput 149.9 135.1 ======== ======== Yield (thousand barrels per day) Gasoline and gasoline blendstocks 66.3 46.2 Jet fuel 25.0 26.9 Diesel fuel 23.0 16.6 Heavy oils, residual products, internally produced fuel and other 40.9 47.0 -------- -------- Total Yield 155.2 136.7 ======== ======== Refining Margin ($/throughput bbl) Gross $ 6.19 $ 2.48 Manufacturing cost before depreciation and amortization $ 2.45 $ 2.59 Mid-Pacific (Hawaii) Throughput (thousand barrels per day) Heavy crude 53.5 59.7 Light crude 21.9 22.3 -------- -------- Total Throughput 75.4 82.0 ======== ======== Yield (thousand barrels per day) Gasoline and gasoline blendstocks 17.7 20.3 Jet fuel 23.4 25.2 Diesel fuel 12.7 11.2 Heavy oils, residual products, internally produced fuel and other 22.8 26.5 -------- -------- Total Yield 76.6 83.2 ======== ======== Refining Margin ($/throughput bbl) Gross $ 3.15 $ 2.93 Manufacturing cost before depreciation and amortization $ 1.40 $ 1.43 Mid-Continent (North Dakota & Utah) Throughput (thousand barrels per day) Light crude 78.9 93.0 Other feedstocks 2.5 3.6 -------- -------- Total Throughput 81.4 96.6 ======== ======== Yield (thousand barrels per day) Gasoline and gasoline blendstocks 44.9 51.6 Jet fuel 8.1 9.9 Diesel fuel 22.4 25.1 Heavy oils, residual products, internally produced fuel and other 8.9 12.2 -------- -------- Total Yield 84.3 98.8 ======== ======== Refining Margin ($/throughput bbl) Gross $ 4.71 $ 2.27 Manufacturing cost before depreciation and amortization $ 2.47 $ 2.34 TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended March 31, ------------------- 2003 2002 -------- -------- California Throughput (thousand barrels per day) Heavy crude 149.8 -- Light crude 3.8 -- Other feedstocks 4.2 -- -------- -------- Total Throughput 157.8 -- ======== ======== Yield (thousand barrels per day) Gasoline and gasoline blendstocks 100.9 -- Diesel fuel 39.6 -- Heavy oils, residual products, internally produced fuel and other 27.4 -- -------- -------- Total Yield 167.9 -- ======== ======== Refining Margin ($/throughput bbl) Gross $ 10.56 $ -- Manufacturing cost before depreciation and amortization $ 4.27 $ -- TESORO PETROLEUM CORPORATION OPERATING DATA (Unaudited) Three Months Ended March 31, ------------------ 2003 2002 -------- -------- RETAIL SEGMENT Number of Stations (end of period) Company-operated 230 218 Branded jobber/dealer 354 461 -------- -------- Total Stations 584 679 ======== ======== Average Stations (during period) Company-operated 231 215 Branded jobber/dealer 360 464 -------- -------- Total Average Retail Stations 591 679 ======== ======== Fuel Sales (millions of gallons) Company-operated 77.1 78.3 Branded jobber/dealer 66.6 94.2 -------- -------- Total Fuel Sales 143.7 172.5 ======== ======== Fuel Margin ($/gallon)(j) $ 0.11 $ 0.09 Merchandise Sales ($ millions) $ 24.9 $ 22.2 Merchandise Margin ($ millions) $ 6.2 $ 5.7 Merchandise Margin % 25% 26% Segment Operating Income (Loss) ($ millions) Gross Margins Fuel(k) $ 16.4 $ 16.3 Merchandise and other non-fuel margin 7.3 7.0 -------- -------- Total gross margins 23.7 23.3 Expenses(l) Operating expenses 18.4 18.4 Selling, general and administrative 8.4 11.1 Depreciation and amortization 5.0 3.4 -------- -------- Segment Operating Income (Loss) $ (8.1) $ (9.6) ======== ======== ------------------------------ (j) Fuel margin per gallon is calculated by dividing fuel gross margin by fuel sales volumes. Fuel margin per gallon may not be comparable to similarly titled measures used by other entities. Management uses fuel margin per gallon calculations to compare profitability to other companies in the industry. (k) Includes the effect of intersegment purchases from the Refining segment at prices which approximate market. (l) Includes $1.2 million for voluntary early retirement benefits and severance payments in 2003. CONTACT: Tesoro Petroleum Corp., San Antonio Investors: Susan Lerette, 210/283-2631 or Media: Tara Ford, 210/283-2676 -----END PRIVACY-ENHANCED MESSAGE-----