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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 1, 2003
TESORO PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 1-3473 95-0862768
(State or other jurisdiction (Commission File Number) (IRS Employer Identification No.)
of incorporation)
300 CONCORD PLAZA DRIVE 78216-6999
SAN ANTONIO, TEXAS (Zip Code)
(Address of principal executive offices)
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Registrant's telephone number, including area code: (210) 828-8484
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ITEM 5. OTHER EVENTS
On April 1, 2003, Tesoro Petroleum Corporation ("Tesoro") issued a
press release announcing completion of the CARB III project at its California
refinery. 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.
On April 2, 2003, Tesoro issued a press release announcing a private
offering of $400 million of senior secured notes. The foregoing is qualified by
reference to the press release which is filed as Exhibit 99.2 to this Current
Report on Form 8-K and is incorporated herein by reference.
As previously disclosed in our Annual Report on Form 10-K, Tesoro is
also negotiating a new senior secured credit facility and a term loan agreement
with terms designed to (1) increase Tesoro's capacity to borrow for working
capital needs, (2) allow Tesoro to issue letters of credit instead of making
early payments and prepayments to certain suppliers (which have ranged from
approximately $80 million to $160 million at month-end for the last nine months)
and apply the funds that would otherwise have been used for those payments and
prepayments to repay debt and (3) substantially modify the financial covenants
Tesoro has under its existing senior secured credit facility.
Tesoro previously reported its acquisition of the 168,000
barrel-per-day Golden Eagle refinery located in Martinez, California in the San
Francisco Bay area along with 70 associated retail sites throughout northern
California (collectively the "California Business") from Ultramar Inc., a
subsidiary of Valero Energy Corporation. A pro forma statement of operations for
the year ended December 31, 2002 as if Tesoro had completed the acquisition of
the California Business on January 1, 2002 is attached as Appendix A to this
Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
The following pro forma financial information is included in
Appendix A hereto and incorporated herein by reference.
Pro Forma Combined Condensed Statement of Operations of Tesoro
Petroleum Corporation for the year ended December 31, 2002
(c) Exhibits.
99.1 Press release issued on April 1, 2003 by Tesoro
Petroleum Corporation.
99.2 Press release issued on April 2, 2003, by Tesoro
Petroleum Corporation.
99.3 Second press release issued on April 1, 2003 by
Tesoro Petroleum Corporation.
ITEM 9. REGULATION FD DISCLOSURE
On April 1, 2003, Tesoro issued a press release announcing that it
expects to report a profit for the quarter ended March 31, 2003. The foregoing
is qualified by reference to the press release which is filed as Exhibit 99.3 to
this Current Report on Form 8-K and is incorporated herein by reference. The
information provided in this Item 9 is being provided under Item 12, and shall
specifically be considered "filed" and incorporated into all documents filed by
Tesoro pursuant to the Securities Act of 1933.
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The information presented in this Current Report on Form 8-K may
contain forward-looking statements and certain assumptions upon which such
forward-looking statements are in part based. Numerous important factors,
including those factors identified as Risk Factors in Tesoro's Annual Report on
Form 10-K and other of the Company's filings with the Securities and Exchange
Commission, and the fact that the assumptions set forth in this Current Report
on Form 8-K could prove incorrect, could cause actual results to differ
materially from those contained in such forward-looking statements.
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 2, 2003
TESORO PETROLEUM CORPORATION
By: /s/ Gregory A. Wright
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Gregory A. Wright
Senior Vice President
and Chief Financial Officer
APPENDIX A
PRO FORMA STATEMENT OF OPERATIONS
The term "California Assets" refers to the 168,000 barrels per day
("bpd") refinery located in Martinez, California in the San Francisco Bay area
along with 70 associated retail sites throughout northern California that we
acquired in May 2002. The acquisition of the California Assets and the related
debt and equity financings closed during the first and second quarters of 2002
and are included in Tesoro's historical balance sheet as of December 31, 2002 as
reported in our Annual Report on Form 10-K for the year ended December 31, 2002.
The following unaudited pro forma combined condensed statement of
operations give effect to the following events as if each had occurred on
January 1, 2002:
-- the acquisition of the California Assets;
-- the April 2002 offering of the outstanding 9-5/8% senior
subordinated notes due 2012;
-- the March 2002 underwritten public offering of 23 million
shares of our common stock; and
-- additional borrowings under our amended and restated senior
secured credit facility necessary to consummate the
acquisition of the California Assets.
As reported in our Annual Report on Form 10-K for the year ended
December 31, 2002, Tesoro's historical results of operations for the year ended
December 31, 2002 included results of the California Assets for the period
from May 17, 2002 (the closing date for the acquisition) through
December 31, 2002.
The acquisition of the California Assets was accounted for using the
purchase method of accounting. The estimates of the fair value of the California
Assets and related liabilities are based on preliminary estimates. These
estimates are subject to change pending completion of independent appraisals and
other evaluations.
The unaudited pro forma combined condensed statement of operations is
based on assumptions that we believe are reasonable under the circumstances and
is intended for informational purposes only. We believe it is not indicative of
the future results of the combined companies or of the results of operations
that would have actually occurred had the acquisition of the California Assets
taken place for the period presented. A major turnaround at our California
refinery, including the refinery's fluid coker, was completed in March 2002, and
a turnaround of the larger crude unit was completed in the second quarter of
2002. The unaudited pro forma combined condensed statement of operations does
not reflect any benefits from potential cost savings or revenue enhancements
resulting from the integration of the operations of the California Assets.
The unaudited pro forma combined condensed statement of operations
should be read in conjunction with "Management's Discussions and Analysis of
Financial Condition and Results of Operations" and the historical Consolidated
Financial Statements of Tesoro Petroleum Corporation in our Annual Report on
Form 10-K for the year ended December 31, 2002 and the Financial Statements of
Golden Eagle Refining and Marketing Assets Business (the "California Business")
included in our Current Report on Form 8-K filed on February 25, 2002, as
amended by Amendment No. 1 to the Current Report on Form 8-K filed on April 22,
2002.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
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HISTORICAL PRO FORMA
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CALIFORNIA
TESORO BUSINESS ADJUSTMENTS COMBINED
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(in millions, except per share amounts)
Revenues $ 7,119.3 $ 704.3 $ (30.5)(a) $ 7,793.1
Costs and Expenses
Costs of sales and operating expenses 6,865.7 739.6 (30.5)(a) 7,574.8
Selling, general and administrative expenses 133.2 4.0 -- 137.2
Depreciation and amortization 130.7 21.9 (11.0)(b) 142.8
1.2(c)
Loss on asset sales and impairment 8.4 -- -- 8.4
------------ ------------ ------------ ------------
Operating Income (Loss) (18.7) (61.2) 9.8 (70.1)
Interest and Financing Costs, Net of Capitalized
Interest (166.1) -- (25.9)(d) (192.0)
Interest Income 3.5 -- -- 3.5
------------ ------------ ------------ ------------
Earnings (Loss) Before Income Taxes (181.3) (61.2) (16.1) (258.6)
Income Tax Provision (Benefit) (64.3) (24.9) (6.1)(e) (95.3)
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Net Earnings (Loss) $ (117.0) $ (36.3) $ (10.0) $ (163.3)
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Weighted Average Common Shares:
Basic 60.5 4.0(f) 64.5
Diluted 60.5 4.0(f) 64.5
Net Earnings (Loss) Per Share:
Basic $ (1.93) $ (2.53)
Diluted $ (1.93) $ (2.53)
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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENT OF OPERATIONS
(a) Represents an adjustment to eliminate excise taxes on wholesale sales
collected on behalf of governmental agencies associated with the
seller's operations from both revenues and costs of sales and operating
expenses to conform to our accounting policy.
(b) Represents an adjustment to record depreciation expense based on our
preliminary allocation of fair values to property, plant and equipment.
Pro forma depreciation is calculated on the straight-line method over
estimated useful lives of primarily 28 years for refinery assets and 16
to 20 years for retail assets.
(c) Represents an adjustment to record amortization of acquired intangible
assets assuming a weighted average life of 27 years.
(d) Represents additional interest expense and amortization of deferred
financing costs related to the junior subordinated notes issued to the
seller, our 9-5/8% senior subordinated notes due 2012 and our amended
and restated senior secured credit facility.
(e) Represents the income tax effect of the adjustments above at a combined
statutory tax rate of 38%.
(f) Represents the underwritten public offering of 23 million shares of our
common stock. This offering was completed on March 6, 2002.
EXHIBIT INDEX
Exhibit
No. Description
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99.1 Press release issued on April 1, 2003 by Tesoro
Petroleum Corporation.
99.2 Press release issued on April 2, 2003, by Tesoro
Petroleum Corporation.
99.3 Second press release issued on April 1, 2003 by
Tesoro Petroleum Corporation.