-----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, ASviBkwFYucKTG9+c85feVUwy4ENQEm6dfVoEuC6cQ382sE0ePhaNUFo1bDRul8/ b/gXaffv/CmXoaZa6LpXAQ== 0000950128-01-500330.txt : 20010723 0000950128-01-500330.hdr.sgml : 20010723 ACCESSION NUMBER: 0000950128-01-500330 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010531 FILED AS OF DATE: 20010720 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: 1685256 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: 1685257 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: 1685258 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: 1685259 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: 1685260 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: 1685261 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: 1685262 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: 1685263 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: 1685264 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: 1685265 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: 1685266 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: 1685267 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 j8938001e10-q.txt FOR THE QUARTER ENDED MAY 31, 2001 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 May 31, 2001 [ ] 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 July 20, 2001: 100. 2
- ------------------------------------------------------------------------------------------------------------------------------ TABLE OF ADDITIONAL REGISTRANTS - ------------------------------------------------------------------------------------------------------------------------------ State of Other Primary Standard IRS Employer Jurisdiction of Industrial Identification Commission File Name Incorporation Classification Number Number 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 - May 31, 2001 and August 31, 2000 4 Consolidated Statements of Operations - Nine Months and Quarters Ended May 31, 2001 and 2000 5 Consolidated Statements of Cash Flows - Nine Months Ended May 31, 2001 and 2000 6 Notes to Consolidated Financial Statements 7-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-17 PART II. OTHER INFORMATION 18 - ----------------------------- 3 4 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
- ----------------------------------------------------------------------------------------------------- MAY 31, 2001 AUGUST 31, (UNAUDITED) 2000 - ----------------------------------------------------------------------------------------------------- ASSETS CURRENT: Cash and cash equivalents $ 33,943 $ 7,430 Accounts receivable, net 40,821 44,304 Inventories 97,786 61,894 Prepaid expenses and other assets 6,351 8,877 - ----------------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 178,901 122,505 PROPERTY, PLANT AND EQUIPMENT, NET 191,224 207,746 DEFERRED FINANCING COSTS 4,548 5,497 OTHER ASSETS 6,163 4,620 - ----------------------------------------------------------------------------------------------------- $380,836 $340,368 - ----------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT: Current installments of long-term debt $ 148 $ 150 Accounts payable 37,783 18,434 Income taxes payable 5,041 538 Accrued liabilities 15,875 12,810 Sales, use and fuel taxes payable 15,527 15,809 Deferred income taxes 5,571 5,571 - ----------------------------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 79,945 53,312 LONG TERM DEBT: LESS CURRENT INSTALLMENTS 190,704 200,961 DEFERRED INCOME TAXES 14,655 13,103 DEFERRED GAIN ON SETTLEMENT OF PENSION PLAN OBLIGATIONS 1,614 1,775 DEFERRED RETIREMENT BENEFITS 18,778 15,738 OTHER NONCURRENT LIABILITIES 264 373 - ----------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 305,960 285,262 - ----------------------------------------------------------------------------------------------------- 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 58,228 47,956 - ----------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY 74,876 55,106 - ----------------------------------------------------------------------------------------------------- $380,836 $340,368 - -----------------------------------------------------------------------------------------------------
4 5 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) (IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED NINE MONTHS ENDED MAY 31, MAY 31, ----------------------------------------------------------- 2001 2000 2001 2000 - --------------------------------------------------------------------------------------------------------------------------------- NET SALES $272,383 $276,143 $814,784 $770,762 COSTS OF GOODS SOLD 232,200 244,817 717,788 683,384 - -------------------------------------------------------------------------------------------------------------------------------- GROSS PROFIT 40,183 31,326 96,996 87,378 - -------------------------------------------------------------------------------------------------------------------------------- EXPENSES: Selling, general and administrative expenses 18,086 18,794 54,697 57,074 Depreciation and amortization expenses 2,732 2,550 8,197 7,726 - -------------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 20,818 21,344 62,894 64,800 - -------------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME 19,365 9,982 34,102 22,578 - -------------------------------------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE): Interest income 335 49 1,251 163 Interest expense (5,142) (5,907) (16,094) (17,178) Other, net (219) (901) (739) (1,753) Costs associated with acquisition -- -- (1,300) -- - -------------------------------------------------------------------------------------------------------------------------------- (5,026) (6,759) (16,882) (18,768) - -------------------------------------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAX EXPENSE 14,339 3,223 17,220 3,810 INCOME TAX EXPENSE 6,020 1,372 7,230 1,688 - -------------------------------------------------------------------------------------------------------------------------------- INCOME BEFORE EXTRAORDINARY ITEM 8,319 1,851 9,990 2,122 EXTRAORDINARY ITEM, NET OF TAXES OF $22 AND $1,389 RESPECTIVELY 31 -- 1,919 -- - -------------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 8,350 $ 1,851 $ 11,909 $ 2,122 - --------------------------------------------------------------------------------------------------------------------------------
5 6 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) (IN THOUSANDS)
- ----------------------------------------------------------------------------------------------------- NINE MONTHS ENDED MAY 31, ---------------------------- 2001 2000 - ----------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 11,909 $ 2,122 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 10,991 10,076 Post-retirement benefits 3,040 2,145 Change in deferred income taxes 3,635 1,488 Gain on extinguishment of debt (3,308) -- (Gain) loss on asset dispositions 231 (38) Cash used in working capital items (3,632) (42,224) Other, net (3,691) (766) - ------------------------------------------------------------------------------------------------------ TOTAL ADJUSTMENTS 7,266 (29,319) - ------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 19,175 (27,197) - ------------------------------------------------------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investment securities (3,714) -- Sale of investment securities 3,497 -- Additions to property, plant and equipment (7,640) (4,610) Proceeds from asset dispositions 23,533 104 - ------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 15,676 (4,506) - ------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Dividends (1,637) -- Net borrowings on revolving credit facility -- 30,000 Proceeds from issuance of long term debt -- 152 Deferred financing costs -- (50) Principal reductions of long term debt (6,701) (191) - ------------------------------------------------------------------------------------------------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (8,338) 29,911 - ------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 26,513 (1,792) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,430 8,925 - ------------------------------------------------------------------------------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 33,943 $ 7,133 - ------------------------------------------------------------------------------------------------------ CASH PROVIDED BY (USED IN) WORKING CAPITAL ITEMS: Accounts receivable, net $ 3,483 $ (9,852) Inventories (35,892) (26,121) Prepaid expenses and other assets 2,526 (3,054) Accounts payable 19,349 (8,243) Income taxes payable 4,119 -- Accrued liabilities 3,065 7,215 Sales, use and fuel taxes payable (282) (2,169) - ------------------------------------------------------------------------------------------------------ TOTAL CHANGE $ (3,632) $(42,224) - ------------------------------------------------------------------------------------------------------
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 accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America 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 and nine month periods ended May 31, 2001 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 has adopted SAB 101 which had no impact on its consolidated financial statements. 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:
MAY 31, 2001 (UNAUDITED) AUGUST 31, 2000 - -------------------------------------------------- ----------------------------- Crude Oil $29,609 $16,975 Petroleum Products 43,960 22,819 -------------------------------------- Total @ LIFO 73,569 39,794 -------------------------------------- Merchandise 10,650 9,020 Supplies 13,567 13,080 -------------------------------------- Total @ FIFO 24,217 22,100 -------------------------------------- Total Inventory $97,786 $61,894 - --------------------------------------------------------------------------------
For the three and nine month periods ended May 31, 2001, the LIFO reserve was reduced by $1,300,000 and $4,800,000 respectively. 6. CREDIT FACILITY 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 1/4% for base rate borrowings and the LIBOR rate for Euro-Rate borrowings, which was 5.81% as of May 31, 2001. 7. SUBSIDIARY GUARANTORS Summarized financial information for the Company's wholly owned subsidiary guarantors is as follows (in thousands):
MAY 31, 2001 (UNAUDITED) AUGUST 31, 2000 - -------------------------------------------------------------------------------- Current Assets $ 50,967 $ 45,304 Noncurrent Assets 69,436 85,443 Current Liabilities 113,284 127,180 Noncurrent Liabilities 6,030 9,300 - --------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED MAY 31, MAY 31, (UNAUDITED) (UNAUDITED) ------------------------------------------------------------------- 2001 2000 2001 2000 - -------------------------------------------------------------------------------------------------- Net Sales $131,420 $153,910 $389,637 $422,141 Gross Profit 15,831 17,548 45,892 52,382 Operating Income 584 1,331 685 3,562 Net Loss (551) (917) (2,676) (2,259) - --------------------------------------------------------------------------------------------------
8 9 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 8. 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 NINE MONTHS ENDED MAY 31, MAY 31, (UNAUDITED) (UNAUDITED) ------------------------------------------------------------------ 2001 2000 2001 2000 - --------------------------------------------------------------------------------------------------------- Net Sales Retail $130,209 $152,621 $386,117 $418,289 Wholesale 142,174 123,522 428,667 352,473 -------------------------------------------------------------------- $272,383 $276,143 $814,784 $770,762 -------------------------------------------------------------------- Intersegment Sales Wholesale $ 61,378 $ 70,950 $183,894 $184,177 -------------------------------------------------------------------- Operating Income (Loss) Retail $ 300 $ 684 $ (270) $ 1,378 Wholesale 19,065 9,298 34,372 21,200 -------------------------------------------------------------------- $ 19,365 $ 9,982 $ 34,102 $ 22,578 -------------------------------------------------------------------- Depreciation and Amortization Retail $ 765 $ 716 $ 2,295 $ 2,145 Wholesale 1,967 1,834 5,902 5,581 -------------------------------------------------------------------- $ 2,732 $ 2,550 $ 8,197 $ 7,726 --------------------------------------------------------------------
9 10 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - --------------------------------------------------------------------------------
MAY 31, 2001 (UNAUDITED) AUGUST 31, 2000 - ------------------------------------------------------------------------- Total Assets Retail $ 97,701 $108,925 Wholesale 283,135 231,443 ---------------------------------------- $380,836 $340,368 ---------------------------------------- Capital Expenditures Retail $ 2,445 $ 1,455 Wholesale 5,195 4,445 ---------------------------------------- $ 7,640 $ 5,900 ----------------------------------------
9. 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 used $6,607,000 as of May 31, 2001 and an additional $5,543,000 subsequent thereafter of the proceeds to repurchase the 10.75% Senior Unsecured Notes (Notes 11 & 12). The balance has been used for capital expenditures. For the nine months ended May 31, 2001, net sales to the affiliate amounted to $30,897,000. 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 nine months ended May 31, 2001, the Company billed the affiliate $843,000 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 May 31, 2001 the Company was indebted to the affiliate for $645,000 under the terms of the agreement, which is included in accounts payable. 10. COSTS ASSOCIATED WITH ACQUISITION 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 May 31, 2001 for the estimated expenses associated with the unsuccessful acquisition. 10 11 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 11. EXTRAORDINARY ITEM During February and March 2001, the Company repurchased $10,165,000 of 10.75% Senior Unsecured Notes due June 9, 2007 for $6,607,000 in cash. An extraordinary net gain of $1,919,000 was recorded as a result of the early retirement of debt, consisting of $3,558,000 of retirement discount less $250,000 of associated debt issuance costs, net of a tax charge of $1,389,000. 12. DIVIDEND During April 2001, the Company declared and paid a dividend in the amount of $1,637,000. 13. SUBSEQUENT EVENTS During June 2001, the Company repurchased an additional $7,000,000 of 10.75% Senior Unsecured Notes due June 9, 2007 for $5,543,000 in cash. An extraordinary gain of $751,000 will be recorded as a result of this early retirement of debt, consisting of $1,457,000 of retirement discount less $162,000 of debt issuance costs, net of a tax charge of $544,000. Effective June 1, 2001, the Company sold certain intangible assets to an unrelated entity and realized a $3,000,000 gain on the transaction. Concurrent with the sale, the Company entered into a 50% joint venture with the entity for the marketing of asphalt products. This joint venture will be accounted for using the equity method of accounting. 11 12 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- Recent Developments During the fiscal quarter ended May 31, 2001, industry-wide margins on gasoline and distillate, as indicated by the difference between the prices of crude oil contracts traded on the New York Mercantile Exchange (NYMEX) and the prices of NYMEX gasoline and heating oil contracts, improved significantly, primarily for the months of April and May. This contributed to improved gross profit, operating income and net income for the Company, as was the case for many petroleum refiners. The improved margins have been attributed to a perceived intermediate to long term shortage of refining capacity, particularly in the United States, as well as to shorter term factors including low levels of product inventories and operating problems at several U.S. refineries during this period. For June, industry margins as indicated by NYMEX contracts remained at the strong levels of April and May, but in NYMEX trading for July and August, the indicated margins have decreased significantly as product inventories have risen to more typical levels and U.S. refinery operating problems have been corrected. However, a number of industry analysts and government officials continue to express the opinion that there is an intermediate term shortage of U.S. refining capacity which could cause product prices and refinery margins to increase sharply again in the near future. Results of Operations Comparison of Fiscal Quarters ended May 31, 2001 and May 31, 2000 Net Sales. Net sales decreased $3.7 million or 1.3% from $276.1 million for the fiscal quarter ended May 31, 2000 to $272.4 million for the fiscal quarter ended May 31, 2001. Retail sales decreased $22.4 million, or 14.7% from $152.6 million to $130.2 million, while wholesale sales increased $18.7 million or 15.1% from $123.5 million to $142.2 million. The retail sales decrease was due to a 15.9% decrease in retail petroleum volume and a 17.8% decrease in retail merchandise sales, partially offset by a 2.4% increase in retail petroleum prices. The wholesale sales increase was due to a 24.8% increase in wholesale sales volume, partially offset by a 7.9% decrease in wholesale prices. The retail sales volume was reduced and the wholesale sales volume correspondingly increased by the transfer of 50 retail locations to a non-subsidiary affiliate by sale or lease terminations on September 29, 2000. 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, consolidated net sales increased approximately 4.4%. Same-store retail petroleum volume increased 0.3%, retail petroleum prices increased 3.0%, and retail merchandise sales increased 4.0%. On the same comparable basis, wholesale petroleum volume increased 15.0% and wholesale prices decreased 8.5%. The increased wholesale volume on a comparable basis was due to higher crude processing rates at the Company's refinery and to a smaller increase in product inventory during the quarter ended May 31, 2001 than was the case in the prior year quarter. The decrease in wholesale prices was due primarily to lower asphalt prices, as large discounts for heavy sour crude oils with high yields of asphalt induced refiners to maximize processing of such crude oil grades, thus increasing the supply of asphalt. The decrease in the total dollar amount of consolidated sales was due to the lower price realized by selling fuel to the 50 affiliate locations on a wholesale basis in the quarter ended May 31, 2001, as compared to realizing the full retail pump price at those same locations in the prior year quarter, when those locations were owned or leased by the Company. 12 13 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- Costs of Goods Sold. Costs of goods sold decreased $12.6 million or 5.1% from $244.8 million for the fiscal quarter ended May 31, 2000 to $232.2 million for the fiscal quarter ended May 31, 2001. Retail costs of goods sold decreased $20.8 million or 15.3% from $135.6 million to $114.8 million, while wholesale costs of goods sold increased $8.2 million or 7.5% from $109.2 million to $117.4 million. The decrease in consolidated costs of goods sold was primarily due to strong price discounts received by the Company on heavy high sulfur crude oil grades. The increase in wholesale costs of goods sold was primarily due to the previously discussed sale or lease terminations involving 50 retail locations now owned by a non-subsidiary affiliate, since these locations were supplied on a retail basis in the prior year quarter, but are now supplied on a wholesale basis. Costs of goods sold for the quarter ended May 31, 2001 was slightly positively impacted by an approximate $0.3 million increase in the value of the Company's working inventories on a market valuation basis, which decreased costs of goods sold. This was reinforced by a $1.3 million reduction in the LIFO reserve, which had the effect of further increasing the value of the Company's inventories and reducing costs of goods sold. In the quarter ended May 31, 2000, costs of goods sold had benefited significantly from a $4.1 million increase in the value of working inventories. No LIFO inventory adjustment was made in that quarter. Gross Profit. Gross Profit increased $8.9 million from $31.3 million for the fiscal quarter ended May 31, 2000 to $40.2 million for the fiscal quarter ended May 31, 2001. This increase was primarily due to improved industry-wide margins on gasoline and distillate and to increased price discounts on heavy sour crude oil grades processed by the Company. Operating Expenses. Operating expenses decreased $0.5 million or 2.3% from $21.3 million for the fiscal quarter ended May 31, 2000 to $20.8 million for the fiscal quarter ended May 31, 2001. 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 more than offset increased depreciation, increased expenses for employee health benefits and increased same-station retail operating expenses for wages and for credit card processing. Increased depreciation was primarily due to capital equipment installed under the Company's Capital Improvement Plan. Increased same-store retail wages were primarily due to higher average hourly wages. 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 increased per-transaction fees. Operating Income. As a result of the above, operating income increased $9.4 million from $10.0 million for the fiscal quarter ended May 31, 2000 to $19.4 million for the fiscal quarter ended May 31, 2001. Interest Expense. Net interest expense (interest expense less interest income) decreased $1.1 million from $5.9 million for the fiscal quarter ended May 31, 2000 to $4.8 million for the fiscal quarter ended May 31, 2001. The decreased net interest expense was primarily due to lower balances on the Company's Revolving Credit Facility and Senior Unsecured Notes and to interest income earned on cash deposits. Income Taxes. The Company's effective tax rate for the fiscal quarter ended May 31, 2001 was approximately 42.0% compared to a rate of 42.6% for the fiscal quarter ended May 31, 2000. 13 14 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- Comparison of the Nine Months ended May 31, 2001 and May 31, 2000 Net Sales. Net sales increased $44.0 million or 5.7% from $770.8 million for the nine months ended May 31, 2000 to $814.8 million for the nine months ended May 31, 2001. Retail sales decreased $32.2 million, or 7.7% from $418.3 million to $386.1 million, while wholesale sales increased $76.2 million or 21.6% from $352.5 million to $428.7 million. The retail sales decrease was due to a 14.6% decrease in retail petroleum volume and a 14.8% decrease in retail merchandise sales, partially offset by a 10.2% increase in retail petroleum prices. The wholesale sales increase was due to a 7.8% increase in wholesale volume and a 12.6% increase in wholesale prices. However, retail sales volume was reduced and wholesale sales volume correspondingly increased by the transfer of 50 retail locations to a non-subsidiary affiliate by sale or lease termination on September 29, 2000. 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, same-store retail petroleum volume increased 0.3%, retail petroleum prices increased 10.8%, and retail merchandise sales increased 5.4%. On the same comparable basis, wholesale volume increased 0.8% and wholesale prices increased 11.8%. The slight increase in same-store retail petroleum volume and the increase in same-store 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 increase in retail and wholesale prices was primarily due to an increase in worldwide crude oil and petroleum product prices as reflected by an increase of approximately 19.1% in prices of NYMEX crude oil contracts for the nine months ended May 31, 2001, as compared to the nine months ended May 31, 2000. Costs of Goods Sold. Costs of goods sold increased $34.4 million or 5.0% from $683.4 million for the nine months ended May 31, 2000 to $717.8 million for the nine months ended May 31, 2001. Retail costs of goods sold decreased $26.4 million or 7.2% from $368.0 million to $341.6 million, while wholesale costs of goods sold increased $60.8 million or 19.3% from $315.4 million to $376.2 million. The increase in consolidated costs of goods sold was primarily due to a 19.1% increase in worldwide crude oil prices, as indicated by NYMEX crude oil contract prices for the nine months ended May 31, 2001 as compared to the prior year period. This was partially offset by strong price discounts on heavy high sulfur crude oil grades versus the light low sulfur crude oil traded on the NYMEX. The decrease in retail costs of goods sold was due to the previously discussed sale or lease terminations involving 50 retail locations now owned by a non-subsidiary affiliate, since these locations were supplied on a retail basis in the prior year period, but are now supplied on a wholesale basis. Costs of goods sold for the nine months ended May 31, 2001 were negatively impacted by an approximate $4.8 million decrease in the value of the Company's working inventories on a market valuation basis, which increased costs of goods sold. However, this was offset by a reduction in the LIFO reserve, which increased the value of the Company's total inventories by $4.8 million. In the nine months ended May 31, 2000, costs of goods sold had benefited from a $14.4 million increase in the value of working inventories. In the prior year period, LIFO exceeded market; thus, inventories were valued at net realizable value. Gross Profit. Gross profit increased $9.6 million from $87.4 million for the nine months ended May 31, 2000 to $97.0 million for the nine months ended May 31, 2001. This increase was primarily due to better industry-wide gasoline and distillate margins and larger price discounts on heavy high sulfur crude oil grades processed by the Company. 14 15 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- Operating Expenses. Operating expenses decreased $1.9 million or 2.9% from $64.8 million for the nine months ended May 31, 2000 to $62.9 million for the nine months ended May 31, 2001. 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 more than offset increased depreciation, increased expenses for employee health benefits and increased same-station retail operating expenses for wages and for credit card processing. Increased depreciation was primarily due to capital equipment installed under the Company's Capital Improvement Plan. Increased same-store retail wages were primarily due to higher average hourly wages. 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 increased per-transaction fees. Operating Income. As a result of the above, operating income increased $11.5 million from $22.6 million for the nine months ended May 31, 2000 to $34.1 million for the nine months ended May 31, 2001. Interest Expense. Net interest expense (interest expense less interest income) decreased $2.2 million from $17.0 million for the nine months ended May 31, 2000 to $14.8 million for the nine months ended May 31, 2001. The decreased net interest expense was due to lower balances on the Company's Revolving Credit Facility and Senior Unsecured Notes and to increased interest income earned on cash deposits. Income Taxes. The Company's effective tax rate for the nine months ended May 31, 2001 was approximately 42.0% compared to a rate of 44.3% for the nine months ended May 31, 2000. The decrease in the current period rate is primarily due to nondeductible permanent differences which applied to the prior year period but not to the nine months ended May 31, 2001. Extraordinary Item. During the nine months ended May 31, 2001, the Company repurchased $10.2 million of the 10.75% Senior Unsecured Notes due June 9, 2007, for $6.6 million in cash. An extraordinary gain net of taxes of $1.9 million was recorded as a result of the early retirement of debt. Liquidity and Capital Resources Working capital (current assets minus current liabilities) at May 31, 2001 was $99.0 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 May 31, 2001 and 2.3:1 at August 31, 2000. Net cash provided by operating activities totaled $19.2 million for the nine months ended May 31, 2001 and net cash used in operating activities was $27.2 million for the nine months ended May 31, 2000. Net cash used in investing activities for purchases of property, plant and equipment totaled $7.6 million and $4.6 million for the nine months ended May 31, 2001 and May 31, 2000 respectively. Also, net cash provided from asset dispositions was $23.3 million and $0.1 million for the nine months ended May 31, 2001 and May 31, 2000 respectively. 15 16 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- Net cash used in financing activities of $8.3 million for the nine months ended May 31, 2001 consisted primarily of the $6.7 million used to repurchase $10.2 million of 10.75% Senior Unsecured Notes due July 9, 2007. Net cash provided by financing activities of $29.9 million for the nine months ended May 31, 2000 resulted primarily from net borrowings on the Company's revolving credit facility. In April 2001, the Company declared and paid a dividend in the amount of $1,637,000. The Company reviews its capital expenditures on an ongoing basis. The Company currently has budgeted approximately $8.0 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 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 1/4% for base rate borrowings and the LIBOR rate for Euro-Rate borrowings, which was 5.81% as of May 31, 2001. In April 2001, the Company declared and paid a dividend in the amount of $1,637,000. During June 2001, the Company repurchased an additional $7,000,000 of 10.75% Senior Unsecured Notes due June 9, 2007 for $5,543,000 in cash. An extraordinary gain of $751,000 will be recorded as a result of this early retirement of debt, consisting of $1,457,000 of retirement discount less $162,000 of debt issuance costs, net of a tax charge of $544,000. Effective June 1, 2001, the Company sold certain intangible assets to an unrelated entity for $3,000,000 in cash. Concurrent with the sale, the Company entered into a 50% joint venture with the entity for the marketing of asphalt products. This joint venture will be accounted for using the equity method of accounting. 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 16 17 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- 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. 17 18 PART II - OTHER INFORMATION - --------------------------- Item 1. Legal Proceedings The judgment entered in the lawsuit between the Company and the Pennsylvania Environmental Defense Foundation ("PEDF") on March 21, 2000 was paid and fully satisfied of record in the United States District Court for the Western District of Pennsylvania on June 22, 2001. This judgment did not have a material effect on the Company's results of operations or financial position. 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 8K (a) No reports on Forms 8-K have been filed for the quarter for which this report is being filed. 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: July 20, 2001 UNITED REFINING COMPANY --------------------------------------- (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: July 20, 2001 KIANTONE PIPELINE CORPORATION --------------------------------------- (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: July 20, 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 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: July 20, 2001 KIANTONE PIPELINE COMPANY --------------------------------------- (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: July 20, 2001 UNITED JET CENTER, 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: July 20, 2001 KWIK-FILL, INC. --------------------------------------- (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: July 20, 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 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: July 20, 2001 BELL OIL CORP. --------------------------------------- (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: July 20, 2001 PPC, 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: July 20, 2001 SUPER TEST PETROLEUM, INC. --------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------- James E. Murphy Chief Financial Officer 28 29 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: July 20, 2001 KWIK-FIL, INC. --------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------- James E. Murphy Chief Financial Officer 29 30 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: July 20, 2001 VULCAN ASPHALT REFINING CORPORATION --------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------- James E. Murphy Chief Financial Officer 30 -----END PRIVACY-ENHANCED MESSAGE-----