SAN ANTONIO -- Tesoro Corp. has reported record 2005 fourth-quarter net earnings of $69 million, or 97 cents per share compared to breakeven results for fourth-quarter 2004.
Results for the 2005 fourth quarter included special after-tax charges of $57 million, or $0.81 per share, for tender and call premiums and the writeoff of unamortized debt issuance costs associated with the company's refinancing of almost $1 billion of debt. Excluding these special items, fourth quarter earnings were $126 million, or $1.78 per share.
Fourth-quarter [image-nocss] results also included other aftertax charges of $18 million, or 25 cents per share, which included a charge of $7 million related to obsolete refining assets and a $3 million impairment charge for certain retail assets. Also included is an $8 million charge for the accelerated depreciation primarily relating to the modification of the fluid coker unit at the company's Golden Eagle refinery. As previously announced, the existing fluid coker is being modified to a delayed coker with significant operational and environmental benefits.
For full-year 2005, the company reported record net earnings of $507 million, or $7.20 per share, versus net earnings for full-year 2004 of $328 million, or $4.76 per share. Excluding special items, full-year 2005 net earnings were $571 million, or $8.11 per share, compared to net earnings of $343 million, or $4.97 per share, for full-year 2004.
Results for full-year 2005 included special aftertax charges of $64 million, or 91 cents per share, for tender and call premiums and the writeoff of unamortized debt issuance costs associated with the company's debt refinancing and prepayments along with expenses related to the termination and retirement of certain executive officers. Full-year 2004 results included aftertax charges of $15 million, or 21 cents per share, primarily for debt prepayment and financing costs along with executive retirement expenses.
We continued to run our assets very well during the quarter and achieved record fourth quarter throughput rates of 541,000 barrels per day, allowing us to capture strong margins and post record fourth quarter results, said Bruce A. Smith, chairman, president and CEO of Tesoro.
The absence of any major turnaround activity during the quarter also contributed to the record run rates, when compared to last year's quarter. Improved marketing margins further contributed to record results.
The past year marked a major turning point for Tesoro, said Smith. We further optimized our business model, made significant organizational changes including centralizing our decision-making process and strengthened the talent and expertise of our management team. With record annual throughput of 530,000 barrels per day, strong margins and significant free cash flow, we initiated and then doubled a quarterly dividend, announced a $200 million stock buyback program, reduced debt by nearly $200 million and refinanced the majority of our remaining high-coupon, secured debt with lower-coupon, unsecured debt.
The refinancing and delevering will contribute over $40 million annually to future cash flows and pretax earnings.
As we look ahead to 2006. industry fundamentals appear poised to deliver another year of strong refining margins, Smith concluded.
San Antonio-based 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 nearly 500 branded retail stations, of which more than 200 are company owned and operated under the Tesoro and Mirastar brands.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.