1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-4014
FINA, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-1820692
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Fina Plaza, Dallas, Texas 75206
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214)750-2400
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements over the past 90 days.
Yes X No
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
29,205,372 Class A as of October 31, 1995
2,000,000 Class B as of October 31, 1995
2
PART I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Net earnings were $45.0 million for the quarter ended September 30, 1995
compared to $28.0 million during the same period last year. Sales and other
operating revenues were $916.0 million compared to $918.0 million for third
quarter 1994. Earnings per share were $1.44 compared to $.90 per share for the
third quarter of last year.
For the nine months of 1995, net earnings were $120.2 million,
compared to $66.3 million for the same period in 1994. Earnings for 1994
included $16 million after-tax inventory gains related to crude and product
price improvement from the end of 1993. However, the gain was largely offset
by accruals for various contingencies, including a provision of $9.2 million
for future environmental remediation projects. Sales and other operating
revenues for the first nine months of 1995 were $2.7 billion compared to $2.5
billion in the first nine months of 1994.
Upstream - Earnings in the third quarter were below third quarter last
year because of lower natural gas prices and reduced production volumes due to
sales of nonstrategic assets. Geographic consolidation contributed to
operating cost reductions. Increased exploration drilling continues on the
Company's promising prospects. Through the first nine months, earnings were
below the same period last year due to lower natural gas prices, lower oil
volumes and higher dry hole and seismic costs, only partially offset by higher
oil prices, lower production expenses and higher natural gas marketing
earnings.
Downstream - Third quarter downstream earnings were below the same
period last year. Excellent operations, including record throughput at the
Port Arthur, Texas, Refinery, partially offset poor Gulf Coast fuels refining
margins in the third quarter. For the nine months, earnings were below the
same period of last year primarily due to 1994 inventory gains, lower current
year refining margins, and higher maintenance costs which were only partially
offset by better operations.
3
Chemicals - Chemical earnings were up from 1994. For the three and nine
month periods ended September 30, 1995 compared to the same periods in 1994,
lower sales volumes due primarily to supply limitations caused mainly by low
inventories were more than offset by improved margins. Construction of the
expansions at the La Porte, Texas, polypropylene plant and the Carville,
Louisiana, polystyrene plant continued in the third quarter. The La Porte
expansion, which will make it the largest single site polypropylene plant in
the world, will be completed during the fourth quarter. At Carville,
construction is projected to be completed in the second quarter of 1996, which
will make it the largest single site polystyrene plant in the world. The
styrene monomer plant located at Carville, Louisiana, already the largest in
the world, is also being expanded in the fourth quarter.
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of", was
issued by the Financial Accounting Standards Board in March 1995. The Company
is required to adopt the Statement no later than the first quarter of 1996.
The Company is currently assessing the effects of the provisions of Statement
No. 121 which is expected to result in an impairment of the Company's oil and
gas properties.
The Company's regular quarterly dividend of $.60 per share was paid on
September 18, 1995 to shareholders of record on September 6, 1995.
The Board of Directors declared the Company's regular quarterly
dividend of $.60 per share which will be paid on December 13, 1995 to
shareholders of record on December 1, 1995.
4
FINA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1995 1994
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ASSETS
Current assets:
Cash and cash equivalents $4,156 $3,533
Accounts and notes receivable 368,725 365,614
Inventories 318,990 286,538
Prepaid expenses and other current assets 34,012 30,394
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Total current assets 725,883 686,079
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Property, plant, and equipment; net of $1,313,717 accumulated
depreciation at 9/30/95 1,685,583 1,691,062
Other assets 123,688 116,721
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$2,535,154 $2,493,862
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LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Short term obligations $50,000 $57,000
Current installments of long term debt and lease obligations 84,583 61,014
Accounts payable and accrued liabilities 441,190 452,387
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Total current liabilities 575,773 570,401
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Long term debt, excluding current installments 473,888 531,162
Other deferred credits and liabilities 272,985 247,492
Stockholders' equity: (note 2)
Preferred stock of $1 par value. Authorized 4,000,000 shares;
none issued - -
Class A common stock of 50 cents par value. Authorized
38,000,000 shares; issued and outstanding 29,204,772 and
29,189,404 shares in 1995 and 1994 14,602 14,595
Class B common stock of 50 cents par value. Authorized
and issued 2,000,000 shares 1,000 1,000
Additional paid-in capital 450,506 450,029
Retained earnings 746,400 679,183
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Total stockholders' equity 1,212,508 1,144,807
Commitments and contingencies (note 3) - -
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$2,535,154 $2,493,862
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See accompanying notes to consolidated financial statements.
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FINA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED SEPT. 30, NINE MONTHS ENDED SEPT. 30,
---------------------------- ----------------------------
1995 1994 1995 1994
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Revenues:
Sales and other operating revenues $916,287 $918,237 $2,744,827 $2,533,768
Interest and other, net (2,957) 4,760 (13,696) 11,183
------------ ------------ ------------ ------------
913,330 922,997 2,731,131 2,544,951
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Costs and expenses:
Cost of raw materials and products purchased 669,855 704,071 2,022,066 1,885,306
Direct operating expenses 89,554 92,240 268,308 294,196
Selling, general, and administrative expenses 21,674 20,157 63,790 62,363
Taxes, other than on income 10,714 10,879 33,847 34,711
Dry holes and abandonments 955 1,706 7,178 4,095
Depreciation, depletion, amortization,
and lease impairment 41,152 41,921 115,897 132,156
Interest charges, net 10,221 10,834 33,711 32,888
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844,125 881,808 2,544,797 2,445,715
------------ ------------ ------------ ------------
Earnings before income taxes 69,205 41,189 186,334 99,236
Income taxes 24,232 13,216 66,085 32,889
------------ ------------ ------------ ------------
Net earnings (note 4) $44,973 $27,973 $120,249 $66,347
============ ============ ============ ============
Earnings per common share (note 2) $1.44 $0.90 $3.85 $2.13
============ ============ ============ ============
See accompanying notes to consolidated financial statements.
6
FINA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(IN THOUSANDS)
(UNAUDITED)
1995 1994
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Cash flows provided by operating activities $214,821 $176,627
Cash flows from investing activities:
Capital Expenditures (131,821) (66,143)
Proceeds from disposal of assets 13,162 48,834
Investments in and advances to affiliates (1,975) (1,760)
----------- ------------
Net cash used in investing activities (120,634) (19,069)
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Cash flows from financing activities:
Additions to long term debt and lease obligations 0 26,033
Payments of long term debt and lease obligations (34,015) (159,402)
Net change in short term obligations (7,000) 16,000
Issuance of common stock 484 78
Dividends paid (53,033) (40,544)
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Net cash used in financing activities (93,564) (157,835)
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Net decrease in cash and cash equivalents 623 (277)
Cash and cash equivalents at beginning of period 3,533 3,276
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Cash and cash equivalents at end of period $4,156 $2,999
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See accompanying notes to consolidated financial statements.
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FINA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
(1) The information furnished reflects all adjustments which are, in the
opinion of management, necessary to a fair presentation of the results
of the interim periods presented.
(2) Earnings per common share is based on the weighted average number of
oustanding shares. Shares issuable upon the exercise of stock options are
excluded from the computation since their effect is insignificant. The
Company declared a two-for-one stock split with record date of May 2,
1995, at close of business. The par value is 50 cents per share of both
Class A and Class B stock. Share and per share amounts in the
accompanying financial statements have been adjusted retroactively to
reflect the stock split. The weighted average number of outstanding
shares was 31,202,172 and 31,188,604 for the three months ended September
30, 1995 and 1994, respectively. The weighted average number of
outstanding shares was 31,195,051 and 31,187,644 for the nine months
ended September 30, 1995 and 1994, respectively.
(3) The Company is contingently liable under pending lawsuits and other
claims, some of which involve substantial sums. Considering certain
liabilities which have been set up for the lawsuits and claims, and the
difficulty in determining the ultimate liability in some of these
matters, internal counsel is of the opinion that the amounts, if any,
which ultimately might be due in connection with such lawsuits and claims
would not have a material adverse effect upon the Company's
consolidated financial condition.
(4) Earnings for the nine-month period ended September 30, 1994 include $16
million after-tax inventory gains related to crude and product price
improvement since the end of 1993. The earnings effect of the gain was
largely offset by accruals for various contingencies. Accruals include a
provision of $9.2 million for future environmental remediation projects.
(5) The notes to the consolidated financial statements on pages 20 through 32
of the Company's 1994 Form 10-K are an integral part of these
consolidated financial statements.
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Part II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2. Changes in Securities.
(a) Not Applicable
(b) Not Applicable
Item 3. Defaults upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not Required
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
No Form 8-K's were filed during the period July 1
through September 30, 1995.
Exhibits: (incorporated herein by reference)
(27) Financial Data Schedule
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.
FINA, Inc.
(REGISTRANT)
Date: November 14, 1995
BY:/S/ YVES BERCY
------------------------------------
Yves Bercy
Vice President, Chief
Financial Officer and
Treasurer
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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27 Financial Data Schedule