-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I23eis2Z5t+OZDPqeJkBovbXE/sqLouM4JdANK7BIqIE2digpIuLNiGsED1dU54x UbX90ZBbovhCfn5r3NhEBg== 0000950128-01-000029.txt : 20010123 0000950128-01-000029.hdr.sgml : 20010123 ACCESSION NUMBER: 0000950128-01-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001130 FILED AS OF DATE: 20010116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED REFINING CO CENTRAL INDEX KEY: 0000101462 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 251411751 STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06198 FILM NUMBER: 1509460 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIANTONE PIPELINE CORP CENTRAL INDEX KEY: 0000830253 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 251211902 STATE OF INCORPORATION: NY FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-01 FILM NUMBER: 1509461 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED REFINING CO /PA/ CENTRAL INDEX KEY: 0001040270 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 250850960 STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-02 FILM NUMBER: 1509462 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIANTONE PIPELINE CO CENTRAL INDEX KEY: 0001045539 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-03 FILM NUMBER: 1509463 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KWIK FIL INC CENTRAL INDEX KEY: 0001045540 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-04 FILM NUMBER: 1509464 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KWIK FILL INC CENTRAL INDEX KEY: 0001045541 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-05 FILM NUMBER: 1509465 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED JET CENTER INC CENTRAL INDEX KEY: 0001045542 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-06 FILM NUMBER: 1509466 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELL OIL CORP CENTRAL INDEX KEY: 0001045543 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-07 FILM NUMBER: 1509467 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PPC INC CENTRAL INDEX KEY: 0001045544 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-08 FILM NUMBER: 1509468 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPER TEST PETROLEUM INC CENTRAL INDEX KEY: 0001045545 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-09 FILM NUMBER: 1509469 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VULCAN ASPHALT REFINING CORP CENTRAL INDEX KEY: 0001045546 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-10 FILM NUMBER: 1509470 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDEPENDENT GASOLINE & OIL CO OF ROCHESTER CENTRAL INDEX KEY: 0001045547 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-35083-11 FILM NUMBER: 1509471 BUSINESS ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 BUSINESS PHONE: 8147231500 MAIL ADDRESS: STREET 1: 15 BRADLEY ST CITY: WARREN STATE: PA ZIP: 16365 10-Q 1 j8594301e10-q.txt UNITED REFINING COMPANY 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Period Ended November 30, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------------- --------------------- Commission File No. 333-35083 UNITED REFINING COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 25-1411751 - ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 15 Bradley Street Warren, Pennsylvania 16365 - -------------------- ---------- (address of principal (Zip Code) executive office) Registrant's telephone number, including area code 814-726-4674 ------------ 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 for the past 90 days. Yes X No ---------- ---------- Number of shares outstanding of Registrant's Common Stock as of January 16, 2001: 100. 2 - -------------------------------------------------------------------------------- TABLE OF ADDITIONAL REGISTRANTS - --------------------------------------------------------------------------------
- -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Primary Standard State of Other Industrial IRS Employer Jurisdiction of Classification Identification Commission Name Incorporation Number Number File Number - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Kiantone Pipeline Corporation New York 4612 25-1211902 333-35083-01 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Kiantone Pipeline Company Pennsylvania 4600 25-1416278 333-35083-03 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- United Refining Company of Pennsylvania 5541 25-0850960 333-35083-02 Pennsylvania - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- United Jet Center, Inc. Delaware 4500 52-1623169 333-35083-06 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Kwik-Fill, Inc. Pennsylvania 5541 25-1525543 333-35083-05 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Independent Gas and Oil Company of New York 5170 06-1217388 333-35083-11 Rochester, Inc. - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Bell Oil Corp. Michigan 5541 38-1884781 333-35083-07 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- PPC, Inc. Ohio 5541 31-0821706 333-35083-08 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Super Test Petroleum, Inc. Michigan 5541 38-1901439 333-35083-09 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Kwik-Fil, Inc. New York 5541 25-1525615 333-35083-04 - -------------------------------------- ----------------------- ----------------------- ------------------- ------------------- Vulcan Asphalt Refining Corporation Delaware 2911 23-2486891 333-35083-10 - -------------------------------------- ----------------------- ----------------------- ------------------- -------------------
2 3
PART I. FINANCIAL INFORMATION PAGE(S) - -------------------------------- Item 1. Financial Statements Consolidated Balance Sheets - November 30, 2000 and August 31, 2000 4 Consolidated Statements of Operations - Quarters Ended November 30, 2000 and 1999 5 Consolidated Statements of Cash Flows - Quarters Ended November 30, 2000 and 1999 6 Notes to Consolidated Financial Statements 7-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-15 PART II. OTHER INFORMATION 16 - -----------------------------
3 4 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
======================================================================================================================= NOVEMBER 30, 2000 AUGUST 31, (UNAUDITED) 2000 - ----------------------------------------------------------------------------------------------------------------------- ASSETS CURRENT: Cash and cash equivalents $ 30,108 $ 7,430 Accounts receivable, net 40,442 44,304 Inventories 91,319 61,894 Prepaid expenses and other assets 13,052 8,877 - ----------------------------------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 174,921 122,505 PROPERTY, PLANT AND EQUIPMENT, NET 191,955 207,746 DEFERRED FINANCING COSTS 5,260 5,497 OTHER ASSETS 5,912 4,620 - ----------------------------------------------------------------------------------------------------------------------- $378,048 $340,368 ======================================================================================================================= LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT: Current installments of long-term debt 152 150 Accounts payable 40,910 18,434 Income taxes payable 1,264 538 Accrued liabilities 18,619 12,810 Sales, use and fuel taxes payable 14,355 15,809 Deferred income taxes 5,571 5,571 - ----------------------------------------------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 80,871 53,312 LONG TERM DEBT: LESS CURRENT INSTALLMENTS 200,927 200,961 DEFERRED INCOME TAXES 11,647 13,103 DEFERRED GAIN ON SETTLEMENT OF PENSION PLAN OBLIGATIONS 1,721 1,775 DEFERRED RETIREMENT BENEFITS 16,585 15,738 OTHER NONCURRENT LIABILITIES 264 373 - ----------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 312,015 285,262 - ----------------------------------------------------------------------------------------------------------------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDER'S EQUITY: Common stock, $.10 par value per share - shares authorized 100; issued and outstanding 100 -- -- Additional paid-in capital 16,648 7,150 Retained earnings 49,385 47,956 - ----------------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY 66,033 55,106 - ----------------------------------------------------------------------------------------------------------------------- $378,048 $340,368 =======================================================================================================================
4 5 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) (IN THOUSANDS)
==================================================================================================== THREE MONTHS ENDED NOVEMBER 30, ---------------------------------------- 2000 1999 - ---------------------------------------------------------------------------------------------------- NET SALES $295,461 $244,488 COSTS OF GOODS SOLD 264,814 216,995 - --------------------------------------------------------------------------------------------------- GROSS PROFIT 30,647 27,493 - --------------------------------------------------------------------------------------------------- EXPENSES: Selling, general and administrative expenses 18,895 19,156 Depreciation and amortization expenses 2,732 2,589 - --------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 21,627 21,745 - --------------------------------------------------------------------------------------------------- OPERATING INCOME 9,020 5,748 - --------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE): Interest income 531 64 Interest expense (5,440) (5,572) Other, net (347) (133) Costs associated with acquisition (1,300) -- - --------------------------------------------------------------------------------------------------- (6,556) (5,641) - --------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAX EXPENSE 2,464 107 INCOME TAX EXPENSE 1,035 42 - --------------------------------------------------------------------------------------------------- NET INCOME $ 1,429 $ 65 ===================================================================================================
5 6 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) (IN THOUSANDS)
======================================================================================================================= THREE MONTHS ENDED NOVEMBER 30, --------------------------------- 2000 1999 - ----------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,429 $ 65 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 3,731 3,350 Post-retirement benefits 847 735 Change in deferred income taxes 627 262 Gain on asset dispositions -- (70) Cash used in working capital items (557) (4,265) Other, net (2,216) (430) - ------------------------------------------------------------------------------------------------------------------------ TOTAL ADJUSTMENTS 2,432 (418) - ------------------------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 3,861 (353) - ----------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investment securities (2,008) -- Additions to property, plant and equipment (2,674) (2,148) Proceeds from asset dispositions 23,531 102 - ------------------------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 18,849 (2,046) - ------------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on revolving credit facility -- 4,000 Proceeds from issuance of long term debt -- 152 Principal reductions of long term debt (32) (59) - ------------------------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (32) 4,093 - ------------------------------------------------------------------------------------------------------------------------ NET INCREASE IN CASH AND CASH EQUIVALENTS 22,678 1,694 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,430 8,925 - ----------------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 30,108 $ 10,619 - ----------------------------------------------------------------------------------------------------------------------- CASH PROVIDED BY (USED IN) WORKING CAPITAL ITEMS: Accounts receivable, net $ 3,862 $ 957 Inventories (29,425) 330 Prepaid expenses and other assets (2,167) 1,272 Accounts payable 22,476 (10,038) Income taxes payable 342 -- Accrued liabilities 5,809 5,021 Sales, use and fuel taxes payable (1,454) (1,807) - ------------------------------------------------------------------------------------------------------------------------ TOTAL CHANGE $ (557) $ (4,265) ========================================================================================================================
6 7 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ================================================================================ 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended November 30, 2000 are not necessarily indicative of the results that may be expected for the year ending August 31, 2001. For further information, refer to the consolidated financial statements and footnotes thereto incorporated by reference in the Company's Form 10-K filing dated November 29, 2000. 2. DERIVATIVE INSTRUMENTS AND Effective September 1, 2000, the Company HEDGING ACTIVITIES adopted Statement of Financial Accounting Standards No. 133 ("Statement 133"), "Accounting for Derivative Instruments and Hedging Activities." Statement 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure these instruments at fair value. The accounting for changes in the fair value of a derivative, that is, gains and losses, depends on the intended use of the derivative and its resulting designation. The adoption of Statement 133 did not have a material effect on the Company's financial position or results of operations. 3. RECENT ACCOUNTING STANDARD In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB 101 provides guidance on applying generally accepted accounting principles to revenue recognition in financial statements. The Company is currently assessing the impact of SAB 101 on its consolidated financial statements, and believes that the effect, if any, will not be material to the Company's operating results. 4. RECLASSIFICATION Certain amounts in the prior year's consolidated financial statements have been reclassified to conform with the presentation in the current year. 7 8 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 5. INVENTORIES Inventories consist of the following:
NOVEMBER 30, 2000 (UNAUDITED) AUGUST 31, 2000 - --------------------------------------------------------------------------------- Crude Oil $36,897 $16,975 Petroleum Products 31,908 22,819 ------------------- ----------------- Total @ LIFO 68,805 39,794 ------------------- ----------------- Merchandise 9,444 9,020 Supplies 13,070 13,080 ------------------- ----------------- Total @ FIFO 22,514 22,100 ------------------- ----------------- Total Inventory $91,319 $61,894 - -------------------------------------------------------------------------------
6. SUBSIDIARY GUARANTORS Summarized financial information for the Company's wholly owned subsidiary guarantors is as follows (in thousands): ================================================================================
NOVEMBER 30, 2000 (UNAUDITED) AUGUST 31, 2000 - --------------------------------------------------------------------------------- Current Assets $ 47,457 $ 45,304 Noncurrent Assets 69,839 85,443 Current Liabilities 108,420 127,180 Noncurrent Liabilities 6,553 9,300 - ---------------------------------------------------------------------------------
THREE MONTHS ENDED NOVEMBER 30, (UNAUDITED) ------------------------------------------ 2000 1999 - --------------------------------------------------------------------------------- Net Sales $141,030 $134,650 Gross Profit 14,769 18,466 Operating Income (Loss) (421) 2,272 Net Income (Loss) (1,442) 183 - ---------------------------------------------------------------------------------
8 9 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 7. SEGMENTS OF BUSINESS The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations are organized into two business segments: wholesale and retail. The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, and the marketing of petroleum products to wholesale and industrial customers. The retail segment sells petroleum products and convenience and grocery items through company owned gasoline stations and convenience stores under the Kwik Fill(R) and Red Apple Food Mart(R) brand names. Intersegment revenues are calculated using estimated market prices and are eliminated upon consolidation. Summarized financial information regarding the Company's reportable segments is presented in the following tables (in thousands):
THREE MONTHS ENDED NOVEMBER 30, (UNAUDITED) -------------------------------------- 2000 1999 - ------------------------------------------------------------------------------- Net Sales Retail $139,860 $133,328 Wholesale 155,601 111,160 ------------------- ------------------ $295,461 $244,488 =================== ================== Intersegment Sales Wholesale $ 70,201 $ 55,578 =================== ================== Operating Income (Loss) Retail $ (879) $ 1,558 Wholesale 9,899 4,190 ------------------- ------------------ $ 9,020 $ 5,748 =================== ================== Depreciation and Amortization Retail $ 765 $ 716 Wholesale 1,967 1,873 ------------------- ------------------ $ 2,732 $ 2,589 =================== ==================
9 10 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ================================================================================
NOVEMBER 30, 2000 (UNAUDITED) AUGUST 31, 1999 - ------------------------------------------------------------------------------ Total Assets Retail $ 95,778 $108,925 Wholesale 282,270 231,443 ------------------------ --------------------- $378,048 $340,368 ======================== ===================== Capital Expenditures Retail $ 941 $ 1,455 Wholesale 1,733 4,445 ------------------------ --------------------- $ 2,674 $ 5,900 ======================== =====================
8. TRANSACTIONS WITH AFFILIATED COMPANIES On September 29, 2000, the Company sold 42 retail units to an affiliate for $23,870,000. The excess of the sales price over the net historic cost of the assets and liabilities of $9,497,000 (net of income taxes) was credited to additional paid-in capital during the quarter. The Company has invested the proceeds of this sale in short-term investments and has not made a final commitment on the use of the restricted proceeds. For the quarter ended November 30, 2000, net sales to the affiliate amounted to $8,762,000. Concurrent with the asset sale, the Company terminated the leases on 8 additional retail locations which it had previously leased from a non-subsidiary affiliate. The Company has entered into a management agreement with the non-subsidiary affiliate to operate and manage the retail units on a turnkey basis. For the quarter ended November 30, 2000, the Company billed the affiliate $202,000 for management fees and overhead expenses incurred in the management and operation of the 50 retail units. The management agreement further requires the Company to periodically reimburse the affiliate for the gross revenues less direct costs, overhead expenses and management fees incurred by the Company in the operation of the units. As of November 30, 2000 the Company was indebted to the affiliate for $218,000 under the terms of the agreement, which is included in accounts payable. 9. SUBSEQUENT EVENTS On November 9, 2000, a subsidiary of United Refining Company ("United") submitted a written proposal to the board of Getty Petroleum Marketing, Inc. ("Getty") for the purchase of its approximately 14 million outstanding shares of common stock. The proposal indicated that the United subsidiary would be willing and fully prepared to pay $5.75 per share for all of the outstanding shares. On December 7, 2000, the subsidiary increased its offer to $6.00 per share. The amended proposal was not accepted by Getty and expired on December 8, 2000. The Company has recorded a $1,300,000 charge at November 30, 2000 for the estimated expenses associated with the unsuccessful acquisition. 10 11 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ================================================================================ Effective January 8, 2001, the Company renegotiated its secured revolving credit facility to provide for an increase in its revolving credit commitment up to $50,000,000. The Facility expires on June 9, 2002 and is secured by certain qualifying cash accounts, accounts receivable, and inventory. The interest rate on borrowings varies with the Company's earnings and is based on the higher of the bank's prime rate or Federal funds rate plus 1/2% for base rate borrowings and the LIBOR rate for Euro-Rate borrowings, which was 8.62% as of November 30, 2000. 11 12 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ================================================================================ Recent Developments Worldwide crude oil prices, as indicated by prices of crude oil contracts on the New York Mercantile Exchange (NYMEX), which had risen rapidly in fiscal 2000 and in the 1st quarter of fiscal 2001, ended November 30, 2000, peaked at over $35 per barrel in trading of NYMEX contracts for delivery in December 2000. In early January 2001, NYMEX crude contracts were trading more than $5 per barrel below these peak prices. As is typically the case, the rising worldwide prices in the 1st fiscal quarter had increased the Company's wholesale margins but reduced the Company's retail margins, as retail prices did not keep pace with rapidly rising wholesale prices. The decrease in worldwide crude oil prices from the peak reached in trading of December 2000 contracts reduced December wholesale margins but increased December retail margins. In early January 2001, with worldwide crude oil prices appearing to have stabilized, at least temporarily, at lower levels, both the Company's wholesale gasoline and distillate margins and its retail margins were stronger than in January the prior year. On September 29, 2000, the Company sold 42 retail locations to a non-subsidiary affiliate for $23.9 million. Simultaneously with this transaction, the Company terminated the leases on 8 additional retail locations which it had previously leased from a non-subsidiary affiliate. However, the Company continues to manage these 50 locations under a management agreement entered into simultaneously with the transactions, and continues to supply petroleum products to these locations. Results of Operations Comparison of Fiscal Quarters ended November 30, 2000 and November 30, 1999 Net Sales. Net sales increased $51.0 million or 20.8% from $244.5 million for the fiscal quarter ended November 30, 1999 to $295.5 million for the fiscal quarter ended November 30, 2000. Retail sales increased $6.6 million, or 4.9% from $133.3 million to $139.9 million, while wholesale sales increased $44.4 million or 40.0% from $111.2 million to $155.6 million. The retail sales increase was due to a 20.2% increase in retail petroleum prices, which more than offset an 9.9% decrease in retail petroleum volume, and an 8.5% decrease in retail merchandise sales. The wholesale sales increase was due to a 48.9% increase in wholesale prices, which more than offset a 6.1% decrease in wholesale volume. Retail sales volumes were reduced and wholesale sales volumes correspondingly increased as a result of the September 29, 2000 sale and lease terminations as previously discussed. These transactions reduced the Company's retail sales, but increased wholesale sales, as the Company now supplies these affiliate locations on a wholesale basis. On a same-store basis, excluding prior period retail sales by these 50 locations and including as wholesale sales prior period petroleum products supplied to these locations, retail petroleum volume increased 2.2%, retail petroleum prices increased 20.7% and retail merchandise sales increased 6.8%. On that same-store basis, wholesale volume decreased 10.7% and wholesale prices increased 47.7%. The increase in same-store retail petroleum volume and merchandise sales was primarily due to the performance of the locations upgraded under the Company's Capital Improvement Plan completed at the end of fiscal 1999. The decrease in wholesale volume on a comparable basis was due primarily to lower gasoline production and to lower asphalt sales despite higher asphalt production. The lower gasoline production was due to slightly lower crude oil processing rates, to a heavier mix of crude oils which increased asphalt production at the expense of 12 13 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ================================================================================ gasoline, and to the shutdown of certain refinery gasoline-producing units for planned maintenance activities during the quarter ended November 30, 2000. These maintenance activities reduced gasoline production to a greater extent than did similar activities during the prior year quarter. Lower asphalt sales were primarily due to much less favorable weather for paving activities than was the case in the prior period. The less favorable weather caused less asphalt to be sold, while more asphalt was placed in inventory for the following spring paving season. The increase in retail and wholesale petroleum prices was primarily due to a 44.6% increase in worldwide crude oil prices as indicated by prices of NYMEX crude oil contracts for the fiscal quarter ended November 30, 2000 as compared to contracts for the prior year quarter. Costs of Goods Sold. Costs of goods sold increased $47.8 million or 22.0% from $217.0 million for the fiscal quarter ended November 30, 1999 to $264.8 million for the fiscal quarter ended November 30, 2000. Retail costs of goods sold increased $10.1 million or 8.7% from $115.6 million to $125.7 million, while wholesale costs of goods sold increased $37.7 million or 37.2% from $101.4 million to $139.1 million. The increase in consolidated costs of goods sold was primarily the result of the increase in worldwide crude oil prices, partially offset by increased discounts for heavy sour grades of crude oil. The previously discussed sale and lease terminations involving 50 retail locations now owned by a non-subsidiary affiliate had the effect of partly offsetting the increase in retail costs of goods sold due to higher worldwide petroleum prices, as the Company had fewer retail locations to supply. However, as the Company is now supplying these locations on a wholesale basis, this transaction correspondingly increased wholesale costs of goods sold, reinforcing the effect of higher worldwide petroleum prices. Costs of goods sold for the quarter ended November 30, 2000 was negatively impacted by an approximate $2.5 million decrease in the value of the Company's working inventories on a FIFO basis, which increased costs of goods sold. This was partially offset by a reduction in the LIFO reserve, which increased the value of the Company's total inventories by $2.0 million. In the quarter ended November 30, 1999, costs of goods sold had benefited from a $4.7 million increase in the value of working inventories. In the prior year quarter, LIFO exceeded market, thus inventories were valued at net realizable value. Gross Profit. Gross Profit increased $3.1 million from $27.5 million for the fiscal quarter ended November 1999 to $30.6 million for the fiscal quarter ended November 30, 2000. This increase was primarily due to improved industry wholesale margins and larger discounts on heavy high-sulfur crude oil grades processed by the Company, partially offset by lower retail petroleum margins, as industry retail prices did not keep pace with rapidly rising wholesale prices. The increase was also partially offset by the negative impact on costs of goods sold of changes in working inventory prices, versus a beneficial impact in the prior year quarter. Operating Expenses. Operating expenses decreased $0.1 million or 0.5% from $21.7 million for the fiscal quarter ended November 30, 1999 to $21.6 million for the fiscal quarter ended November 30, 2000. This decrease was primarily due to the elimination of station operating expenses associated with the 50 retail locations now owned by a non-subsidiary affiliate and to the reduction of retail overhead expenses by application of payments received from the non-subsidiary affiliate under an agreement by which the Company will manage those locations for the affiliate. These reductions slightly more than offset increased depreciation, increased same-station retail operating expenses for wages and benefits and for credit card processing, and increased corporate overhead expenses. Increased depreciation was primarily due to capital equipment installed under the Company's Capital Improvement Plan. Increased 13 14 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ================================================================================ same-store retail wages and benefits were due primarily to higher average hourly wages and to increased cost of providing employee health benefits. Increased same-store credit card processing fees were the result of increased customer use of "Pay at the Pump" facilities and to higher retail prices, which increase per-transaction fees. Operating Income. As a result of the above, operating income increased $3.3 million from $5.7 million for the fiscal quarter ended November 30, 1999 to $9.0 million for the fiscal quarter ended November 30, 2000. Interest Expense. Net interest expense (interest expense less interest income) decreased $0.6 million from $5.5 million for the fiscal quarter ended November 30, 1999 to $4.9 million for the fiscal quarter ended November 30, 2000. The decreased net interest expense was due to lower balances on the Company's revolving credit facility and to interest income earned on the proceeds from the sale of 42 retail locations to a non-subsidiary affiliate. Income Taxes. The Company's effective tax rate for the fiscal quarter ended November 30, 2000 was approximately 42.0% compared to a rate of 39.3% for the fiscal quarter ended November 30, 1999. Liquidity and Capital Resources Working capital (current assets minus current liabilities) at November 30, 2000 was $94.1 million and at August 31, 2000 was $69.2 million. The Company's current ratio (current assets divided by current liabilities) was 2.2:1 at November 30, 2000 and 2.3:1 at August 31, 2000. Net cash provided by operating activities totaled $3.9 million for the three months ended November 30, 2000 and net cash used by operating activities totaled $.4 million for the three months ended November 30, 1999. Net cash used in investing activities for the purchase of stock of potential acquisition candidate totaled $2.0 million for the three months ended November 30, 2000. Net cash used in investing activities for purchases of property, plant and equipment totaled $2.7 million and $2.1 million for the three months ended November 30, 2000 and 1999 respectively. Also, net cash provided by investing activities was $23.5 million and $.1 from the sale of assets for the three months ended November 30, 2000 and 1999 respectively. The Company reviews its capital expenditures on an ongoing basis. The Company currently has budgeted approximately $6.0 million for capital expenditures in fiscal 2001. Maintenance and non-discretionary capital expenditures have averaged approximately $4 million annually over the last three years for the refining and marketing operations. Management does not foresee any increase in maintenance and non-discretionary capital expenditures during fiscal 2001. Future liquidity, both short and long-term, will continue to be primarily dependent on realizing a refinery margin sufficient to cover fixed and variable expenses, including planned capital expenditures. The Company expects to be able to meet its working capital, capital expenditure and debt service 14 15 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ================================================================================ requirements out of cash flow from operations, cash on hand and borrowings under the Company's secured revolving credit facility (the "Facility") with PNC Bank, N.A. as Agent Bank. The Company has renegotiated its secured revolving credit facility to provide for an increase in its revolving credit commitment up to $50,000,000. The commitment increase became effective January 8, 2001. The Facility expires on June 9, 2002 and is secured by certain qualifying cash accounts, accounts receivable, and inventory. The interest rate on borrowings varies with the Company's earnings and is based on the higher of the bank's prime rate or Federal funds rate plus 1/2% for base rate borrowings and the LIBOR rate for Euro-Rate borrowings, which was 8.62% as of November 30, 2000. Although the Company is not aware of any pending circumstances which would change its expectation, changes in the tax laws, the imposition of and changes in federal and state clean air and clean fuel requirements and other changes in environmental laws and regulations may also increase future capital expenditure levels. Future capital expenditures are also subject to business conditions affecting the industry. The Company continues to investigate strategic acquisitions and capital improvements to its existing facilities. In February 2000, the United States Environmental Protection Agency (USEPA) issued a final rule requiring the reduction of the sulfur content of gasoline. The Company anticipates that a material investment of funds will be required before 2008 to comply with this rule. Federal, state and local laws and regulations relating to the environment affect nearly all the operations of the Company. As is the case with all the companies engaged in similar industries, the Company faces significant exposure from actual or potential claims and lawsuits involving environmental matters. Future expenditures related to environmental matters cannot be reasonably quantified in many circumstances due to the uncertainties as to required remediation methods and related clean-up cost estimates. The Company cannot predict what additional environmental legislation or regulations will be enacted or become effective in the future or how existing or future laws or regulations will be administered or interpreted with respect to products or activities to which they have not been previously applied. Seasonal Factors Seasonal factors affecting the Company's business may cause variation in the prices and margins of some of the Company's products. For example, demand for gasoline tends to be highest in spring and summer months, while demand for home heating oil and kerosene tends to be highest in winter months. As a result, the margin on gasoline prices versus crude oil costs generally tends to increase in the spring and summer, while margins on home heating oil and kerosene tend to increase in winter. Inflation The effect of inflation on the Company has not been significant during the last five fiscal years. 15 16 PART II - OTHER INFORMATION Item 1. None Item 2. Changes in Securities None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 10.20. Fifth Amendment to Credit Agreement. (b) No reports on Forms 8-K have been filed for the quarter for which this report is being filed. 16 17 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. Date: January 16, 2001 UNITED REFINING COMPANY ----------------------- (Registrant) /s/ Myron L. Turfitt ----------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------- James E. Murphy Chief Financial Officer 17 18 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. Date: January 16, 2001 KIANTONE PIPELINE CORPORATION ----------------------------- (Registrant) /s/ Myron L. Turfitt ----------------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------------- James E. Murphy Chief Financial Officer 18 19 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. Date: January 16, 2001 UNITED REFINING COMPANY OF PENNSYLVANIA --------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------- James E. Murphy Chief Financial Officer 19 20 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. Date: January 16, 2001 KIANTONE PIPELINE COMPANY ------------------------- (Registrant) /s/ Myron L. Turfitt ------------------------- Myron L. Turfitt President /s/ James E. Murphy ------------------------- James E. Murphy Chief Financial Officer 20 21 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. Date: January 16, 2001 UNITED JET CENTER, INC. ----------------------- (Registrant) /s/ Myron L. Turfitt ----------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------- James E. Murphy Chief Financial Officer 21 22 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. Date: January 16, 2001 KWIK-FILL, INC. ----------------------- (Registrant) /s/ Myron L. Turfitt ----------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------- James E. Murphy Chief Financial Officer 22 23 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. Date: January 16, 2001 INDEPENDENT GASOLINE AND OIL COMPANY OF ROCHESTER, INC. --------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------- James E. Murphy Chief Financial Officer 23 24 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. Date: January 16, 2001 BELL OIL CORP. ----------------------- (Registrant) /s/ Myron L. Turfitt ----------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------- James E. Murphy Chief Financial Officer 24 25 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. Date: January 16, 2001 PPC, INC. ----------------------- (Registrant) /s/ Myron L. Turfitt ----------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------- James E. Murphy Chief Financial Officer 25 26 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. Date: January 16, 2001 SUPER TEST PETROLEUM, INC. -------------------------- (Registrant) /s/ Myron L. Turfitt -------------------------- Myron L. Turfitt President /s/ James E. Murphy -------------------------- James E. Murphy Chief Financial Officer 26 27 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. Date: January 16, 2001 KWIK-FIL, INC. ----------------------- (Registrant) /s/ Myron L. Turfitt ----------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------- James E. Murphy Chief Financial Officer 27 28 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. Date: January 16, 2001 VULCAN ASPHALT REFINING CORPORATION ----------------------------------- (Registrant) /s/ Myron L. Turfitt ----------------------------------- Myron L. Turfitt President /s/ James E. Murphy ----------------------------------- James E. Murphy Chief Financial Officer 28 EX-10.20 2 j8594301ex10-20.txt FIFTH AMENDMENT TO CREDIT AGREEMENT 1 EXHIBIT 10.20 FIFTH AMENDMENT TO CREDIT AGREEMENT This Fifth Amendment to Credit Agreement (the "Fifth Amendment") is dated as of January 8, 2001 and is made by and among UNITED REFINING COMPANY, a Pennsylvania corporation ("United Refining"), UNITED REFINING COMPANY OF PENNSYLVANIA, a Pennsylvania Corporation ("United Refining PA"), KIANTONE PIPELINE CORPORATION, a New York corporation ("Kiantone, and hereinafter together with United Refining and United Refining PA sometimes collectively referred to as the "Borrowers" and individually as a "Borrower") the BANKS under the Credit Agreement (as hereinafter defined) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for the Banks under the Credit Agreement (hereinafter referred to in such capacity as the "Agent"). RECITALS: WHEREAS, the Borrowers, the Banks, and the Agent are parties to that certain Credit Agreement dated as of June 9, 1997 (as previously amended, restated, supplemented or modified, the "Credit Agreement"); and WHEREAS, unless otherwise defined herein, capitalized terms used herein shall have the meanings given to them in the Credit Agreement; and WHEREAS, the Borrowers, the Banks and the Agent desire to amend the Credit Agreement to provide, among other things, that the temporary $10,000,000 increase in the Revolving Credit Commitments presently in effect pursuant to the Fourth Amendment to Credit Agreement dated February 4, 2000 (the "Fourth Amendment") be made permanent and not expire on December 31, 2000 as provided in the Fourth Amendment, and that the Revolving Credit Commitments be further increased in the amount of $5,000,000. NOW, THEREFORE, in consideration of the foregoing and intending to be legally bound, the parties hereto agree as follows: 1. Amendment to Provisions Added to Credit Agreement Pursuant to the Fourth Amendment. The parties hereto hereby amend and restate the provisions added to the Credit Agreement pursuant to the Fourth Amendment, as set forth in Section 1 of the Fourth Amendment, to read as follows: 1. Amendment to Credit Agreement and Notes - Increase in Revolving Credit Commitments. The Borrowers and the Banks hereby agree that the Revolving Credit Commitments under the Credit Agreement be increased in the amount of $15,000,000 (the "Commitments Increase") so that the total amount of the Revolving Credit Commitments after giving effect to such increase shall be $50,000,000, subject to the following terms and conditions: 2 (a) Term of Increase. The Commitments Increase shall become effective as of the date hereof and shall remain in effect through the Expiration Date unless subsequently reduced pursuant to the terms of the Credit Agreement. (b) Sharing in Commitments Increase. Each Bank shall share in $10,000,000 of the Commitments Increase according to its Ratable Share in effect prior to this Fifth Amendment (the "Prior Ratable Share") and only National Bank of Canada and Manufacturers and Traders Trust Company shall share equally in the remaining $5,000,000 of the Commitments Increase. After giving effect to such sharing in the Commitments Increase, the new Amount of Commitment for Revolving Credit Loans (the "New Revolving Credit Commitment") and new Ratable Share (the "New Ratable Share") for each Bank shall be as follows:
- ---------------------------------------------------------------------------------------------------------------------- New Amount of Commitment for Revolving Bank Credit Loans New Ratable Share - ---------------------------------------------------- ------------------------------------ ---------------------------- - ---------------------------------------------------- ------------------------------------ ---------------------------- PNC Bank, National Association $19,285,714 38.571428% - ---------------------------------------------------- ------------------------------------ ---------------------------- - ---------------------------------------------------- ------------------------------------ ---------------------------- National Bank of Canada 15,357,143 30.714286% - ---------------------------------------------------- ------------------------------------ ---------------------------- - ---------------------------------------------------- ------------------------------------ ---------------------------- Manufacturers and Traders Trust Company 15,357,143 30.714286% ---------- ---------- - ---------------------------------------------------- ------------------------------------ ---------------------------- - ---------------------------------------------------- ------------------------------------ ---------------------------- Total: $50,000,000 100.000000% - ----------------------------------------------------------------------------------------------------------------------
(c) Commitment Fees. It is acknowledged that on and after the date hereof, the amount of the Commitment Fees shall be computed on the amount of the Revolving Credit Commitments as increased pursuant to this Section 1. (e) Amendment to Revolving Credit Notes. Exhibit 1.1(R) of the Credit Agreement [Form of Revolving Credit Note] is hereby amended and restated in its entirety as set forth on the exhibit titled as Exhibit 1.1(R) attached hereto. (f) Pricing Grid. Schedule 1.1(A) of the Credit Agreement [Pricing Grid - Variable Pricing and Fees Based on Leverage Ratio] as amended and restated in its entirety pursuant to the Fourth Amendment shall remain in full force and effect on and after the date hereof. 3 2. Conditions to Effectiveness. This Fifth Amendment shall become effective upon satisfaction of each of the following conditions: (a) Execution and Delivery of Documents. The Borrowers, the Banks and the Agent shall have executed this Fifth Amendment and the Borrowers shall have executed and delivered Amended and Restated Revolving Credit Notes in the form of Exhibit 1.1(R) to each Bank for such Bank's New Ratable Share of the Revolving Credit Commitments and the Banks shall have executed and delivered Assignment and Assumption Agreements substantially in the form of Exhibit 1.1 (A)(1) to the Credit Agreement whereby PNC Bank, National Association shall assign and each of National Bank of Canada and Manufacturers and Traders Trust Company shall assume such portions of the Revolving Credit Commitment and outstanding Revolving Credit Loans of PNC Bank, National Association as necessary for each Bank to hold the New Ratable Share of outstanding Revolving Credit Loans and New Revolving Credit Commitment set forth for such Bank in Section 1(b) above. (b) Secretary's Certificate. There shall be delivered to the Agent a certificate dated the date hereof and signed by the Secretary of each of the Loan Parties, certifying as appropriate as to: (i) all action taken by each Loan Party in connection with this Fifth Amendment and the documents related hereto; (ii) the names of the officer or officers authorized to sign this Fifth Amendment and the documents related hereto and the true signatures of such officer or officers and specifying the Authorized Officers permitted to act on behalf of each Loan Party for purposes of this Fifth Amendment and the true signatures of such officers, on which the Agent may conclusively rely. (c) Opinion of Counsel. Counsel for the Loan Parties shall deliver a written opinion dated as of the date hereof in form and substance satisfactory to the Agent with respect to (i) the due organization of the Borrowers, (ii) the corporate power and authority of Borrowers to enter into this Fifth Amendment (iii) the execution and delivery of this Fifth Amendment and the documents related hereto not violating the organizational documents of the Borrowers and (iv) the enforceability of the Credit Agreement and the other Loan Documents, as amended hereby. (d) Amendment Fees. The Borrowers shall pay to the Agent a fee in the amount of $18,750 to be shared equally by National Bank of Canada and Manufacturers and Traders Trust Company. 4 3. Full Force and Effect. All provisions of the Credit Agreement remain in full force and effect on and after the date hereof except as expressly amended hereby. The Banks do not amend any provisions of the Credit Agreement except as expressly amended hereby. 4. Counterparts; Effective Date . This Fifth Amendment may be signed in counterparts. This Fifth Amendment shall become effective as of the date first above written when the conditions set forth in Section 2 hereof have been satisfied. 5. No Novation. This Fifth Amendment amends the Credit Agreement and the Revolving Credit Notes, but is not intended to constitute, and does not constitute, a novation of the Obligations of the Loan Parties under the Credit Agreement and the other Loan Documents. [SIGNATURES BEGIN ON NEXT PAGE] 5 [SIGNATURE PAGE 1 OF 2 TO FIFTH AMENDMENT TO CREDIT AGREEMENT] The undersigned have executed this Fifth Amendment as of the date first above written. UNITED REFINING COMPANY, a Pennsylvania corporation By: /s/ Myron L. Turfitt ------------------------------------- Title: President ---------------------------------- UNITED REFINING COMPANY OF PENNSYLVANIA, a Pennsylvania corporation By: /s/ Myron L. Turfitt ------------------------------------- Title: President ---------------------------------- KIANTONE PIPELINE CORPORATION, a New York corporation By: /s/ Myron L. Turfitt ------------------------------------- Title: President ---------------------------------- 6 [SIGNATURE PAGE 2 OF 2 TO FIFTH AMENDMENT TO CREDIT AGREEMENT] NATIONAL BANK OF CANADA By: /s/ Eric L. Moore ------------------------------------- Title: Vice President ---------------------------------- By: /s/ Donald P. Haddad ------------------------------------- Title: Vice President ---------------------------------- PNC BANK, NATIONAL ASSOCIATION, individually and as Agent By: /s/ James M. Steffy ------------------------------------- Title: Vice President ---------------------------------- MANUFACTURERS AND TRADERS TRUST COMPANY By: /s/ C. Gregory Vogelsang ------------------------------------- Title: Assistant Vice President ---------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----