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) December 28,
1993.
Tosco Corporation
(Exact name of registrant as specified in charter)
Nevada 1-7910 95-1865716
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
72 Cummings Point Road, Stamford, CT 06902
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-977-1000
(Former name or former address, if changed since last report.)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 28, 1993, Tosco Corporation ("Tosco"),
pursuant to an Agreement for the Purchase and Sale of Assets
dated as of November 9, 1993 (the "Agreement") with BP
Exploration & Oil, Inc. ("BP"), completed the acquisition of BP's
retail marketing and refining assets located in the states of
Washington and Oregon (the "Assets"). The purchase price for the
Assets was approximately $124 million, plus the value of
inventory, and a profit participation of up to $150 million in
the aggregate over the five years following the acquisition. The
profit participation will be based upon performance from the
refining and retail marketing segments. Profit participation
payments relating to the refining segment's performance will be
limited to a cumulative total of $50 million, while such payments
relating to the retail marketing segment's performance will be
limited to a cumulative total of $100 million. The retail
marketing and refining assets include the Ferndale Refinery
(located in Ferndale, Washington), approximately 129 company-
owned or leased gasoline service stations, five undeveloped
service station sites, two product distribution terminals
located in Tacoma and Renton, Washington and the right to market
under the BP brand in Oregon and Washington for five years.
The Ferndale Refinery, originally built by Mobil
Corporation in 1954, has a current capacity of approximately
84,000 barrels per day of crude oil and other feedstocks. It has
modern, deep-water marine facilities and is connected to the
Olympic Pipeline for product shipments to the Seattle and
Portland metropolitan areas. BP has agreed to supply the
Ferndale Refinery, at Tosco's option, with crude oil for a period
of five years on terms Tosco considers to be favorable.
The retail marketing system is comprised of
approximately 129 company-owned or leased stations and 377 dealer
owned and operated stations. Of the approximately 41,200 barrels
per day of gasoline and diesel fuel sold by the retail marketing
system, more than one-third is accounted for by the company-owned
or leased stations. Many of the stations include convenience
stores. In 1992, the retail marketing system had an approximate
15% market share of retail gasoline sales in Washington and
Oregon (as measured by government statistics).
The funds for the acquisition were received from a
combination of sources, including approximately $88.5 million net
proceeds received from a public offering of Common Stock of Tosco
(2,990,000 shares of Common Stock sold at a price of $30.75 per
share), Tosco's available cash and funds available under Tosco's
revolving credit agreement.
The purchase price and all negotiations relating to the
transaction were on an arm's length basis. The assets acquired
by Tosco will continue to be used for the refining, marketing and
terminalling of petroleum products.
The foregoing description of the acquisition is
qualified in its entirety by reference to the complete text of
the Agreement which was filed as an exhibit to Tosco's Current
Report on Form 8-K dated November 9, 1993.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a), (b) In response to a request from Tosco to the
effect that the acquisition of the Assets did not constitute the
acquisition of a business as contemplated by Article 11 of
Regulation S-X under the Securities Exchange Act of 1934, the
Division of Corporation Finance of the Securities and Exchange
Commission agreed not to object to the omission of historical
financial statements of the Assets in this Form 8-K.
Tosco believes that historical financial statements
covering BP's ownership of the Assets will not be meaningful to
Tosco or its stockholders since there will be many fundamental
differences in regard to refinery operations, personnel,
marketing, management and commercial activities. It is Tosco's
view that it acquired assets and not a continuing business
enterprise. The more significant of these differences include
the following:
(a) BP is an integrated, worldwide oil company with
crude oil exploration production, marine and pipeline
transportation, refinery and retail marketing capabilities.
Tosco only acquired certain of BP's West Coast refining and
marketing assets and did not acquire BP's California retail
operations, truck stops, pipeline or certain terminals.
(b) Tosco will operate the Assets as a stand alone
business entity with its own locally headquartered management,
rather than as part of a larger horizontally and vertically
integrated entity.
(c) The Assets acquired do not include supply and
distribution, computer and control systems, marine operations,
general and administrative functions and accounting.
(d) BP's practice was to make intercorporate charges
to each of its West Coast refining and marketing operations.
Those historical charges will not have any relationship to the
costs that Tosco will incur after the acquisition.
(e) Tosco will build entire accounting, finance,
credit and treasury functions for the Assets, which functions had
previously been handled by BP's corporate offices.
(f) Tosco will have to develop its own outlet and
customer base for 35% of the output of the Ferndale Refinery.
Tosco will use different crude sources and a different crude mix
at the Ferndale Refinery in order to modify the product output in
response to market conditions.
(g) Feedstock and product prices will be based on
market price rather than the cost based transfer prices used by
BP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned thereunto duly
authorized.
TOSCO CORPORATION
Dated: January 10, 1994 By:/S/ Jefferson F. Allen
Jefferson F. Allen,
Executive Vice President and
Chief Financial Officer