Printer Friendly

TOSCO REPORTS RESULTS

 STAMFORD, Conn., Aug. 3 /PRNewswire/ -- Tosco Corporation (NYSE: TOS) reported today net income of $22.1 million, or $0.65 per fully diluted share, on sales of $956.3 million for the second quarter ended June 30, 1993. This compares to net income of $31.5 million, or $0.90 per fully diluted share, on revenues of $477.1 million, during the same period of 1992. For the first half of 1993, Tosco earned $36.9 million, or $1.08 per fully diluted share, on sales of $1,372.4 million compared to $44.8 million, or $1.28 per fully diluted share, on sales of $809.1 million in the same period of 1992.
 Thomas D. O'Malley, Tosco Corporation's Chairman, Chief Executive Officer and President, stated, "We are pleased to report the operating contribution (income before selling, general and administrative expense, net interest expense and income taxes) from our refineries totaled some $64 million. Of this amount, two-thirds was generated by our Avon refinery in California and one-third from our Bayway refinery located in Linden, New Jersey. We are particularly pleased with Bayway's profitable results, which represent the first eighty-four days of operation under Tosco's ownership. Despite generally lackluster refining margins during the period, Bayway's results were achieved by both efficient operation of the plant at over 250,000 barrels per day of raw material input (both crude oil and other feedstocks) and careful attention to operating costs.
 We are encouraged by the Company's performance as we believe it shows Tosco can be profitable even during difficult periods for our industry. Overall results were less favorable than the previous year's periods due to the generally lower refinery margins available throughout the U.S."
 Mr. O'Malley further stated, "In addition, results for our Avon refinery were negatively impacted towards the end of the second quarter by the requirement to take some of its hydrodesulfurization capacity off-line for connection to new hydrogen capacity that will come on-line at the end of this year. Some additional work of this nature will continue in the third quarter. We will complete several projects during the third and fourth quarters, the most important of which are additional hydrogen capacity, new MTBE production capacity, and production facilities for diesel fuel that meets California's new stringent standards. These changes at the Avon refinery should enhance future profitability."
 The Company also announced that it has favorably resolved a lawsuit involving environmental remediation of its Avon refinery. The settlement provides that the previous owners of the refinery will, for the next four years, pay up to $18 million for one-half of the costs that may be incurred for compliance with certain environmental orders and will also provide Tosco a $6 million credit for past expenses. After the initial four year term of the agreement, the parties would be free to reinstate the suit. Tosco, however, would not have to reimburse any amounts received under the agreement and has not relinquished any of its rights to make claim for reimbursement of future costs. Mr. O'Malley said "We're very pleased with this settlement, which avoids the expense of continuing litigation and provides an efficient resolution of this matter within a cooperative framework."
 Tosco's 9% Series A and 9 5/8% Series B First Mortgage Bonds, due March 15, 1997 and March 15, 2002, respectively, were officially listed on the New York Stock Exchange on Monday, July 26, 1993.
 Tosco Corporation is an independent refiner that processes and markets over 400,000 barrels per day of petroleum products, with operations on both the East and West Coasts of the United States.
 TOSCO CORPORATION AND SUBSIDIARIES
 FINANCIAL SUMMARY
 (In thousands, except per share data)
 (Unaudited)
 For the Three For the Six
 Months Ended Months Ended
 June 30, June 30,
 1993 1992 1993 1992
 Sales (A, B) $956,254 $ 477,132 $1,372,390 $ 809,146
 Oper. contribution (B) $ 64,321 $ 72,031 $ 105,909 $ 82,498
 Selling, general and
 administrative exp. (C) 14,859 10,315 23,685 17,352
 Interest expense, net (D 12,242 3,977 20,215 9,405
 Income from continuing
 operations before income
 taxes and cumulative
 effect of accounting
 changes 37,220 57,739 62,009 55,741
 Provision for income
 taxes 15,079 23,206 25,066 22,488
 Income from continuing
 operations bef. cumulative
 effect of accounting
 changes 22,141 34,533 36,943 33,253
 Loss from discontinued
 operations (E) (3,037) (4,657)
 Cumulative effect of
 changes in accounting for
 income taxes and
 turnarounds (F) 16,203
 Net income 22,141 31,496 36,943 44,799
 Preferred stock
 dividend requirement (2,516) (2,516) (5,032) (5,032)
 Income attributable to
 common shareholders $ 19,625 $ 28,980 $ 31,911 $ 39,767
 Earnings per common and
 common equivalent share:
 Primary $.67 $.96 $1.09 $1.32
 Fully diluted $.65 $.90 $1.08 $1.28
 Shares used in the
 computation of earnings
 per common and common
 equivalent share (G):
 Primary 29,407 30,107 29,340 30,129
 Fully diluted 34,198 34,898 34,132 34,921
 (A) On April 8, 1993, Bayway Refining Company (Bayway), a wholly- owned subsidiary of Tosco, completed its acquisition of the Bayway Refinery and related facilities for approximately $327 million (including inventory). The funds for the acquisition were received from a combination of sources, including cash available to Tosco, the sale by Tosco in a private placement of $150 million of 8-1/4% First Mortgage Bonds due 2003, and borrowings under an amended and restated revolving credit agreement (Note D). The financial results of Bayway are included in Tosco's consolidated results of operations beginning April 8, 1993.
 (B) Operating contribution (income before selling, general and administrative expense, net interest expense and income taxes) by refinery for the second quarter is summarized below:
 For the Three Months Ended June 30, 1993
 Avon Bayway Consolidated
 Sales $443,049 $ 513,205 $ 956,254
 Cost of sales 400,583 491,350 891,933
 Operating contribution $ 42,466 $ 21,855 $ 64,321
 (C) The increase in selling, general, and administrative expense for 1993 from the comparable periods in 1992 is primarily attributable to the acquisition of the Bayway Refinery (including approximately $1.7 million of non-recurring costs for the second quarter of 1993 ($2.8 million year-to-date)).
 (D) The increase in net interest expense for 1993 is primarily due to higher levels of debt related to the acquisition of the Bayway Refinery (Note A). In addition, net interest expense for the three and six months ended June 30, 1992 includes intercompany interest income of $3.1 and $6.0 million, respectively, from Seminole Fertilizer Corporation (Seminole). Intercompany interest income for 1993 was not recorded due to the discontinued status of Seminole (Note E). Interest expense for the six months ended June 30, 1992 also includes the write- off of approximately $3.6 million of deferred financing costs related to previously outstanding Bank indebtedness retired in March 1992 from the proceeds of the public sale of $300 million of First Mortgage Bonds.
 (E) On May 4, 1993, Seminole completed the sale of its principal operating assets to Cargill Fertilizer Inc. (Cargill) for approximately $122,343,000, plus inventory of approximately $15,541,000, less a $10,000,000 credit for environmental liabilities that Cargill assumed. A portion of the cash proceeds, net of expenses and prorations, of approximately $127,000,000 were applied to reduce outstanding borrowings under Tosco's working capital facility. Prior year financial statements have accordingly been restated to reflect the operating results of the discontinued fertilizer operations separately from Tosco's continuing operations.
 (F) Effective January 1, 1992, Tosco adopted Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," (electing to prospectively amortize its post-retirement benefits liability) and SFAS No. 109, "Accounting for Income Taxes", and changed its accounting policy for turnaround costs. The cumulative effect of the change in accounting for income taxes and turnaround costs was $13 million or $.44 per share, and $3.2 million or $.11 per share, respectively.
 (G) The decrease in the number of shares used in the computation of earnings per share for 1993 from the comparable 1992 periods is primarily due to the purchase of common stock during the second half of 1992 pursuant to Tosco's common stock acquisition program.
 A quarterly dividend of $.15 per common share was paid on June 30, 1993 to shareholders of record on June 18, 1993.
 TOSCO CORPORATION AND SUBSIDIARIES
 SUMMARIZED BALANCE SHEET (A)
 JUNE 30, 1993
 Thousands of Dollars
 (Unaudited)
 Cash, cash equivalents and short-term
 investments $ 69,602
 Other current assets (B) 544,202
 Current liabilities 324,145
 Working capital 289,659
 Property, plant and equipment (net) 559,266
 Other long term assets 124,976
 Long-term debt (C) 506,865
 Long-term liabilities 62,990
 Total shareholders' equity $ 404,046
 (A) The summarized balance sheet reflects the preliminary allocation of the purchase price to the assets of Bayway based upon their estimated fair values as of the date of acquisition. A final allocation of the purchase price will be determined during 1993 when appraisals and other studies are completed.
 (B) Includes inventories valued on the last-in, first out (LIFO) basis. At June 30, 1993, the excess of current cost over the LIFO stated inventory amount was approximately $27 million.
 (C) At June 30, 1993 there were no cash borrowings under Tosco's $350 million revolving credit agreement.
REFINING DATA SUMMARY AVON REFINERY BAYWAY REFINERY
 (Thousands of (Thousands of
 Barrels Per Day) Barrels Per Day)
 3 Months 6 Months For the Period
 Ended Ended 4/8-6/8
 June 30, June 30,
 1993 1992 1993 1992 1993
 Crude oil refined 158.3 157.4 160.7 135.9 191.2
 Add'l refinery feed &
 blending stock 3.1 2.9 4.1 6.9 61.1
 Total input 161.4 160.3 164.8 142.8 252.3
 Petroleum products produced:
 Gasoline 104.5 102.3 105.5 88.2 129.1
 Distillates 33.7 36.1 33.1 28.2 78.2
 Jet fuel -- -- -- .7 5.9
 Residuals 11.6 9.9 12.5 13.6 22.1
 Petroleum coke 8.0 7.1 8.0 6.8 --
 Propane/Propylene 2.4 4.9 3.5 4.9 12.6
 Other -- 1.1 .8 .9 9.0
 Total petroleum products
 produced 160.2 161.4 163.4 143.3 256.9
 Purchased products 41.4 48.4 35.1 44.2 19.6
 Total petroleum products
 available for sale 201.6 209.8 198.5 187.5 276.5
 Total petroleum products
 sold 192.2 206.1 196.4 187.9 263.4
 Sales value of refined
 products produced for
 sale(A) $24.24 $24.46 $23.33 $22.53 $23.41
 Per barrel cost of crude
 oil and raw materials (A) 16.22 15.21 15.55 14.13 20.00
 Refining margin per barrel(A)$8.02 $ 9.25 $7.78 $8.40 $ 3.41(B)
 (A) Restated to include the sales value of intermediates and gasoline blendstocks and raw materials other than crude oil over total raw materials processed.
 (B) Includes net realized gains on hedges designed to lock in a predetermined level of refining margins on a percentage of the Bayway Refinery's production.
 -0- 8/3/93
 /CONTACT: Jefferson F. Allen or Daniel P. Mulderry of Tosco, 203-977-1000/
 (TOS)


CO: Tosco Corporation ST: Connecticut IN: OIL SU: ERN

PS -- NY001 -- 8753 08/03/93 09:14 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 3, 1993
Words:1907
Previous Article:US FACILITIES CORP. POSTS 25 PERCENT EARNINGS GAIN IN 1993 SECOND QUARTER
Next Article:KNOWLEDGE ADVENTURE INTRODUCES SPACE ADVENTURE FOR THE MACINTOSH
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters