10-Q 1 j9378301e10-q.txt UNITED REFINING 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 February 28, 2002 [ ] 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 April 15, 2002: 100.
------------------------------------------------------------------------------------------------------------------------------ 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 Corporation 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 ------------------------------------------------------------------------------------------------------------------------------ Country Fair, Inc. Pennsylvania 5541 25-1149799 333-35083-12 ------------------------------------------------------------------------------------------------------------------------------
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PART I. FINANCIAL INFORMATION PAGE(S) -------------------------------- Item 1. Financial Statements Consolidated Balance Sheets - February 28, 2002 and August 31, 2001 4 Consolidated Statements of Operations - Six Months and Quarters Ended February 28, 2002 and 2001 5 Consolidated Statements of Cash Flows - Six Months Ended February 28, 2002 and 2001 6 Notes to Consolidated Financial Statements 7-14 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 15-19 PART II. OTHER INFORMATION 20 -----------------------------
3 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
================================================================================================================================= FEBRUARY 28, 2002 AUGUST 31, (UNAUDITED) 2001 ------------------------------------------------------------------------------------------------------------------------ ASSETS CURRENT: Cash and cash equivalents $ 8,219 $ 35,224 Accounts receivable, net 29,053 41,937 Inventories 85,482 62,554 Prepaid expenses and other assets 16,863 13,312 ------------------------------------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 139,617 153,027 PROPERTY, PLANT AND EQUIPMENT, NET 189,699 190,951 INVESTMENT IN AFFILIATED COMPANY 2,119 1,529 DEFERRED FINANCING COSTS 3,770 4,102 OTHER ASSETS 21,838 5,948 ------------------------------------------------------------------------------------------------------------------------ $ 357,043 $ 355,557 ======================================================================================================================== LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT: Revolving credit facility $ 20,000 $ - Current installments of long-term debt 106 121 Accounts payable 32,695 22,206 Income taxes payable - 2,373 Accrued liabilities 12,887 12,411 Sales, use and fuel taxes payable 14,577 16,686 Deferred income taxes 4,157 4,157 Amounts due affiliated companies 226 1,905 ------------------------------------------------------------------------------------------------------------------------ TOTAL CURRENT LIABILITIES 84,648 59,859 LONG TERM DEBT: LESS CURRENT INSTALLMENTS 180,931 180,979 DEFERRED INCOME TAXES 9,738 17,573 DEFERRED GAIN ON SETTLEMENT OF PENSION PLAN OBLIGATIONS 1,452 1,560 DEFERRED RETIREMENT BENEFITS 20,529 19,356 OTHER NONCURRENT LIABILITIES 2,381 264 ------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 299,679 279,591 ------------------------------------------------------------------------------------------------------------------------ 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 16,648 Retained earnings 40,716 59,318 ------------------------------------------------------------------------------------------------------------------------ TOTAL STOCKHOLDER'S EQUITY 57,364 75,966 ------------------------------------------------------------------------------------------------------------------------ $ 357,043 $ 355,557 ========================================================================================================================
4 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED) (IN THOUSANDS)
=================================================================================================================================== THREE MONTHS ENDED SIX MONTHS ENDED FEBRUARY, FEBRUARY, ----------------------------- ------------------------------ 2002 2001 2002 2001 ---------------------------------------------------------------------------------------------------------------------------- NET SALES $ 214,728 $ 246,218 $ 443,232 $ 542,401 COSTS OF GOODS SOLD 189,310 220,052 412,694 485,588 ---------------------------------------------------------------------------------------------------------------------------- GROSS PROFIT 25,418 26,166 30,538 56,813 ---------------------------------------------------------------------------------------------------------------------------- EXPENSES: Selling, general and administrative expenses 23,923 17,716 42,312 36,611 Depreciation and amortization expenses 2,998 2,733 5,958 5,465 ---------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 26,921 20,449 48,270 42,076 ---------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) (1,503) 5,717 (17,732) 14,737 ---------------------------------------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSE): Interest income 48 385 288 916 Interest expense (4,925) (5,512) (9,804) (10,952) Other, net (317) (173) (794) (520) Costs associated with acquisition - - - (1,300) Equity in net earnings of affiliate 235 - 590 - ---------------------------------------------------------------------------------------------------------------------------- (4,959) (5,300) (9,720) (11,856) ---------------------------------------------------------------------------------------------------------------------------- INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) (6,462) 417 (27,452) 2,881 INCOME TAX EXPENSE (BENEFIT) (2,610) 175 (10,980) 1,210 ---------------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (3,852) 242 (16,472) 1,671 EXTRAORDINARY ITEM, NET OF TAX OF $1,367 - 1,888 - 1,888 ---------------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) $ (3,852) $ 2,130 $ (16,472) $ 3,559 ============================================================================================================================
5 UNITED REFINING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED) (IN THOUSANDS)
======================================================================================================================= SIX MONTHS ENDED FEBRUARY 28, ------------------------------------- 2002 2001 --------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (16,472) $ 3,559 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 7,628 7,413 Post-retirement benefits 718 1,686 Change in deferred income taxes (4,474) 860 Gain on extinguishment of debt - (3,255) Equity in net earnings of affiliate (590) - Gain (loss) on asset dispositions 210 44 Cash used in working capital items (9,233) (8,227) Other, net (1,160) (3,094) --------------------------------------------------------------------------------------------------------------- TOTAL ADJUSTMENTS (6,901) (4,573) --------------------------------------------------------------------------------------------------------------- NET CASH USED IN OPERATING ACTIVITIES (23,373) (1,014) --------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of business, net of cash acquired (16,900) - Purchase of investment securities - (3,714) Sale of investment securities - 3,497 Additions to property, plant and equipment (4,499) (5,612) Proceeds from asset dispositions 2 23,531 --------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (21,397) 17,702 --------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on revolving credit facility 20,000 - Dividends (2,130) - Deferred financing costs (42) - Principal reductions of long-term debt (63) (6,563) --------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 17,765 (6,563) --------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (27,005) 10,125 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 35,224 7,430 --------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,219 $ 17,555 =============================================================================================================== CASH PROVIDED BY (USED IN) WORKING CAPITAL ITEMS: Accounts receivable, net $ 13,689 $ 12,167 Inventories (16,928) (23,839) Prepaid expenses and other assets (1,888) (1,660) Accounts payable 3,863 9,557 Accrued liabilities (378) (2,152) Amounts due affiliated companies (1,679) - Income taxes payable (2,533) 917 Sales, use and fuel taxes payable (3,379) (3,217) --------------------------------------------------------------------------------------------------------------- TOTAL CHANGE $ (9,233) $ (8,227) ===============================================================================================================
6 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 six month periods ended February 28, 2002 are not necessarily indicative of the results that may be expected for the year ending August 31, 2002. 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, 2001. 2. RECENT ACCOUNTING STANDARDS In June 2001, the Financial Accounting Standards Board ("FASB") finalized Statements No. 141, "Business Combinations," ("Statement 141") and No. 142, "Goodwill and Other Intangible Assets" ("Statement 142"). Statement 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. Statement 141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. Statement 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001. It also requires, upon adoption of Statement 142 that the Company reclassify the carrying amounts of intangible assets and goodwill based on the criteria in Statement 141. Statement 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, Statement 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in Statement 142. Statement 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized at that date, regardless of when those assets were initially recognized. Statement 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. The Company
7 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ================================================================================================================== is also required to reassess the useful lives of other intangible assets within the first interim quarter after adoption of Statement 142. The Company anticipates that the adoption of Statements 141 and 142 will not have a material effect on the Company's financial position or results of operations. In October 2001, the FASB issued Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("Statement 144"). Statement 144 supersedes Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("Statement 121") and retains the basic requirements of Statement 121 regarding when and how to measure an impairment loss. Statement 144 provides additional implementation guidance on accounting for an impairment loss. Statement 144 is effective for all fiscal years beginning after December 15, 2001. The Company anticipates that the adoption of Statement 144 will not have a material effect on the Company's financial position or results of operations. 3. RECLASSIFICATION Certain amounts in the prior year's consolidated financial statements have been reclassified to conform with the presentation in the current year. 4. INVENTORIES Inventories consist of the following:
FEBRUARY 28, 2002 (UNAUDITED) AUGUST 31, 2001 --------------------------------------------------------------------------------------------- Crude Oil $ 17,927 $ 15,236 Petroleum Products 39,014 24,412 ----------------------------------------------- Total @ LIFO 56,941 39,648 ----------------------------------------------- Merchandise 15,218 10,099 Supplies 13,323 12,807 ----------------------------------------------- Total @ FIFO 28,541 22,906 ----------------------------------------------- Total Inventory $ 85,482 $ 62,554 =============================================================================================
5. SUBSIDIARY GUARANTORS Certain of United Refining Company's (the "issuer") subsidiaries function as guarantors under the terms of the $200,000,000 Senior Unsecured Note Indenture due June 9, 2007. Financial information for the Company's wholly owned subsidiary guarantors is as follows:
8 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
=================================================================================================================================== Condensed Consolidating Balance Sheets (in thousands) February 28, 2002 August 31, 2001 ----------------------------------------------- ----------------------------------------------- Issuer Guarantors Eliminations Consolidated Issuer Guarantors Eliminations Consolidated ----------------------------------------------- ----------------------------------------------- Assets Current: Cash and cash equivalents $ 3,195 $ 5,024 $ - $ 8,219 $ 29,197 $ 6,027 $ - $ 35,224 Accounts receivable, net 20,624 8,429 - 29,053 32,669 9,268 - 41,937 Inventories 64,204 21,278 - 85,482 47,177 15,377 - 62,554 Prepaid expenses and other assets 12,221 4,642 - 16,863 11,154 2,158 - 13,312 Intercompany 97,771 17,833 (115,604) - 81,308 18,345 (99,653) - ---------------------------------------------- ----------------------------------------------- Total current assets 198,015 57,206 (115,604) 139,617 201,505 51,175 (99,653) 153,027 Property, plant and equipment, net 119,563 70,136 - 189,699 121,074 69,877 - 190,951 Investment in affiliated company 2,119 - - 2,119 1,529 - - 1,529 Deferred financing costs, net 3,770 - - 3,770 4,102 - - 4,102 Other assets 5,959 17,050 (1,171) 21,838 6,665 454 (1,171) 5,948 ---------------------------------------------- ----------------------------------------------- $329,426 $144,392 $(116,775) $357,043 $334,875 $121,506 $(100,824) $355,557 ============================================== =============================================== Liabilities and Stockholder's Equity Current: Revolving credit facility $ 20,000 $ - $ - $ 20,000 $ - $ - $ - $ - Current installments of long-term debt - 106 - 106 - 121 - 121 Accounts payable 19,772 12,923 - 32,695 16,857 5,349 - 22,206 Income taxes payable - - - - 2,413 (40) - 2,373 Accrued liabilities 9,482 3,405 - 12,887 9,739 2,672 - 12,411 Sales, use and fuel taxes payable 12,711 1,866 - 14,577 16,542 144 - 16,686 Deferred income taxes 4,507 (350) - 4,157 4,507 (350) - 4,157 Amounts due affiliated companies 141 85 - 226 1,495 410 - 1,905 Intercompany - 115,604 (115,604) - - 99,653 (99,653) - ---------------------------------------------- ----------------------------------------------- Total current liabilities 66,613 133,639 (115,604) 84,648 51,553 107,959 (99,653) 59,859 Long term debt: less current 180,135 796 - 180,931 180,135 844 - 180,979 installments Deferred income taxes 7,085 2,653 - 9,738 11,009 6,564 - 17,573 Deferred gain on settlement of pension plan obligations 1,452 - - 1,452 1,560 - - 1,560 Deferred retirement benefits 19,315 1,214 - 20,529 18,610 746 - 19,356 Other noncurrent liabilities - 2,381 - 2,381 - 264 - 264 ---------------------------------------------- ----------------------------------------------- Total liabilities 274,600 140,683 (115,604) 299,679 262,867 116,377 (99,653) 279,591 ---------------------------------------------- ----------------------------------------------- Commitment and contingencies Stockholder's equity Common stock, $.10 par value per share - shares authorized 100; issued and outstanding, 100 - 18 (18) - - 18 (18) - Additional paid-in capital 7,150 10,651 (1,153) 16,648 7,150 10,651 (1,153) 16,648 Retained earnings 47,676 (6,960) - 40,716 64,858 (5,540) - 59,318 ---------------------------------------------- ----------------------------------------------- Total stockholder's equity 54,826 3,709 (1,171) 57,364 72,008 5,129 (1,171) 75,966 ---------------------------------------------- ----------------------------------------------- $329,426 $ 144,392 $(116,775) $357,043 $334,875 $121,506 $(100,824) $355,557 ============================================== ===============================================
9 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
=================================================================================================================================== Condensed Consolidating Statements of Operations (in thousands) Three Months Ended February 28, 2002 Three Months Ended February 28, 2001 ----------------------------------------------- --------------------------------------------- Issuer Guarantors Eliminations Consolidated Issuer Guarantors Elimination Consolidated ------------------------------------------------------------------------------------------------ Net sales $125,198 $126,348 $(36,818) $214,728 $182,485 $117,187 $(53,454) $246,218 Costs of goods sold 118,067 108,061 (36,818) 189,310 171,611 101,895 (53,454) 220,052 ------------------------------------------------------------------------------------------------ Gross profit 7,131 18,287 - 25,418 10,874 15,292 - 26,166 ------------------------------------------------------------------------------------------------ Expenses: Selling, general and administrative expenses 4,279 19,644 - 23,923 3,757 13,959 - 17,716 Depreciation and amortization expenses 2,060 938 - 2,998 1,923 810 - 2,733 ------------------------------------------------------------------------------------------------- Total operating expenses 6,339 20,582 - 26,921 5,680 14,769 - 20,449 ------------------------------------------------------------------------------------------------- Operating income (loss) 792 (2,295) - (1,503) 5,194 523 - 5,717 ------------------------------------------------------------------------------------------------- Other income (expense): Interest income 1,135 239 (1,326) 48 2,466 423 (2,504) 385 Interest expense (5,128) (1,123) 1,326 (4,925) (5,881) (2,135) 2,504 (5,512) Other, net (443) 126 - (317) (251) 78 - (173) Equity in net earnings of affiliate 235 - - 235 - - - - ------------------------------------------------------------------------------------------------- (4,201) (758) - (4,959) (3,666) (1,634) - (5,300) ------------------------------------------------------------------------------------------------- Income (loss) before income tax expense (benefit) (3,409) (3,053) - (6,462) 1,528 (1,111) - 417 Income tax expense (benefit) (1,412) (1,198) - (2,610) 604 (429) - 175 ------------------------------------------------------------------------------------------------- Net income (loss) before extraordinary item (1,997) (1,855) - (3,852) 924 (682) - 242 Extraordinary item - - - - 1,888 - - 1,888 ------------------------------------------------------------------------------------------------- Net income (loss) $ (1,997) $ (1,855) $ - $ (3,852) $ 2,812 $ (682) $ - $ 2,130 =================================================================================================
10 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
=================================================================================================================================== Condensed Consolidating Statements of Operations (in thousands) Six Months Ended February 28, 2002 Six Months Ended February 28, 2001 -------------------------------------------------- --------------------------------------------- Issuer Guarantors Eliminations Consolidated Issuer Guarantors Elimination Consolidated -------------------------------------------------- --------------------------------------------- Net sales $283,354 $241,493 $(81,615) $443,232 $409,009 $258,217 $(124,825) $ 542,401 Costs of goods sold 287,758 206,551 (81,615) 412,694 382,257 228,156 (124,825) 485,588 -------------------------------------------------- --------------------------------------------- Gross profit (4,404) 34,942 - 30,538 26,752 30,061 - 56,813 -------------------------------------------------- --------------------------------------------- Expenses: Selling, general and administrative expenses 8,609 33,703 - 42,312 8,273 28,338 - 36,611 Depreciation and amortization expenses 4,120 1,838 - 5,958 3,844 1,621 - 5,465 -------------------------------------------------- --------------------------------------------- Total operating expenses 12,729 35,541 - 48,270 12,117 29,959 - 42,076 -------------------------------------------------- --------------------------------------------- Operating income (loss) (17,133) (599) - (17,732) 14,635 102 - 14,737 -------------------------------------------------- --------------------------------------------- Other income (expense): Interest income 2,653 521 (2,886) 288 5,408 880 (5,372) 916 Interest expense (10,252) (2,438) 2,886 (9,804) (11,733) (4,591) 5,372 (10,952) Other, net (967) 173 - (794) (632) 112 - (520) Costs associated with acquisition - - - - (1,300) - - (1,300) Equity in net earnings of affiliate 590 - - 590 - - - - -------------------------------------------------- --------------------------------------------- (7,976) (1,744) - (9,720) (8,257) (3,599) - (11,856) -------------------------------------------------- --------------------------------------------- Income (loss) before income tax expense (benefit) (25,109) (2,343) - (27,452) 6,378 (3,497) - 2,881 Income tax expense (benefit) (10,057) (923) - (10,980) 2,583 (1,373) - 1,210 -------------------------------------------------- --------------------------------------------- Net income (loss) before extraordinary item (15,052) (1,420) - (16,472) 3,795 (2,124) - 1,671 Extraordinary item - - - - 1,888 - - 1,888 -------------------------------------------------- --------------------------------------------- Net income (loss) $(15,052) $ (1,420) $ - $(16,472) $ 5,683 $(2,124) $ - $ 3,559 ================================================== =============================================
11 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
=================================================================================================================================== Condensed Consolidating Statement of Cash Flows (in thousands) Six Months Ended February 28, 2002 Six Months Ended February 28, 2001 -------------------------------------------------- --------------------------------------------- Issuer Guarantors Eliminations Consolidated Issuer Guarantors Eliminations Consolidated -------------------------------------------------- --------------------------------------------- Net cash provided by (used in) operating activities $(23,940) $ 567 $ - $(23,373) $20,528 $(21,542) $ - $(1,014) -------------------------------------------------- --------------------------------------------- Cash flows from investing activities: Purchase of business, net of cash acquired (17,281) 381 - (16,900) - - - - Purchase of investment securities - - - - (3,714) - - (3,714) Sale of investment securities - - - - 3,497 - - 3,497 Additions to property, plant and equipment (2,609) (1,890) - (4,499) (3,839) (1,773) - (5,612) Proceeds from asset dispositions - 2 - 2 - 23,531 - 23,531 -------------------------------------------------- --------------------------------------------- Net cash provided by (used in) investing activities (19,890) (1,507) - (21,397) (4,056) 21,758 - 17,702 -------------------------------------------------- --------------------------------------------- Cash flows from financing activities: Net borrowings on revolving credit facility 20,000 - - 20,000 - - - - Dividends (2,130) - - (2,130) - - - - Deferred financing costs (42) - - (42) - - - - Principal reductions of long-term debt - (63) - (63) (6,500) (63) - (6,563) -------------------------------------------------- --------------------------------------------- Net cash provided by (used in) financing activities 17,828 (63) - 17,765 (6,500) (63) - (6,563) -------------------------------------------------- --------------------------------------------- Net increase (decrease) in cash and cash equivalents (26,002) (1,003) - (27,005) 9,972 153 - 10,125 Cash and cash equivalents, beginning of period 29,197 6,027 - 35,224 4,107 3,323 - 7,430 -------------------------------------------------- --------------------------------------------- Cash and cash equivalents, end of period $ 3,195 $ 5,024 $ - $ 8,219 $14,079 $ 3,476 $ - $ 17,555 ================================================== =============================================
12 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ================================================================================ 6. 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), Red Apple Food Mart(R) and Country Fair(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 SIX MONTHS ENDED FEBRUARY 28, FEBRUARY 28, (UNAUDITED) (UNAUDITED) ------------------------------------------------------------------------- 2002 2001 2002 2001 ---------------------------------------------------------------------------------------------------------------- Net Sales Retail $ 125,171 $ 116,048 $ 239,208 $ 255,908 Wholesale 89,557 130,170 204,024 286,493 ------------------------------------------------------------------------- $ 214,728 $ 246,218 $ 443,232 $ 542,401 ========================================================================= Intersegment Sales Wholesale $ 35,641 $ 52,315 $ 79,330 $ 122,516 ========================================================================= Operating Income (Loss) Retail $ (2,603) $ 309 $ (687) $ (570) Wholesale 1,100 5,408 (17,045) 15,307 ------------------------------------------------------------------------- $ (1,503) $ 5,717 $ (17,732) $ 14,737 ========================================================================= Depreciation and Amortization Retail $ 888 $ 765 $ 1,738 $ 1,530 Wholesale 2,110 1,968 4,220 3,935 ------------------------------------------------------------------------- $ 2,998 $ 2,733 $ 5,958 $ 5,465 =========================================================================
13 UNITED REFINING COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ============================================================================== FEBRUARY 28, 2002 (UNAUDITED) AUGUST 31, 2001 ------------------------------------------------------------------------------ Total Assets Retail $ 119,648 $ 103,161 Wholesale 237,395 252,396 ---------------------------------------------- $ 357,043 $ 355,557 ============================================== Capital Expenditures Retail $ 1,890 $ 3,704 Wholesale 2,609 6,348 ---------------------------------------------- $ 4,499 $ 10,052 ============================================== 7. ACQUISITION The Company completed the acquisition of Country Fair, Inc. on December 21, 2001. United Refining Company acquired the operations and working capital assets of Country Fair, Inc., for approximately $16.9 million. The fixed assets of Country Fair, Inc., which consist of 69 convenience stores throughout northwestern Pennsylvania, southwestern New York and eastern Ohio, were acquired by related entities controlled by John Catsimatidis, the principle shareholder of United Refining Company. The assets are being leased to United Refining Company at an annual aggregate rental of approximately $5.2 million over a period ranging from 10 to 20 years. United Refining Company is not a guarantor of the underlying mortgages on the properties. The acquisition was accounted for by the purchase method of accounting and, accordingly, the results of operations for the period subsequent to the acquisition are included in the consolidated financial statements. The excess of purchase price over the net assets acquired, in the amount of approximately $1.3 million has been recorded as goodwill. The pro forma effect assuming the acquisition of Country Fair at the beginning of fiscal 2002 and 2001 is not material. 14 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ------------------------------------------------------------------------------- Recent Developments Following the events of September 11, 2001, the NYMEX 3/2/1 crack spread suffered a significant decline that continued throughout the second fiscal quarter ended February 28, 2002. The 3/2/1 crack spread has increased from about $3.50 per barrel to approximately $6 per barrel indicating the beginning of a recovery in refining margins has started. The current NYMEX crude pricing is in the $24 per barrel range and most analysts expect NYMEX crude oil prices to level out around $26 per barrel for the last half of 2002. The Company's results continued to be negatively influenced by the weaker discounts on heavy sour crude oils that comprise a significant part of the refinery crude supply. For the recent quarter compared to the prior year quarter, the Company realized a 40.0% decrease in the light/heavy crude price differential. The Company completed the acquisition of Country Fair, Inc. on December 21, 2001. United Refining Company acquired the operations and working capital assets of Country Fair, Inc., for approximately $16.9 million. The fixed assets of Country Fair, Inc., which consist of 69 convenience stores throughout northwestern Pennsylvania, southwestern New York and eastern Ohio, were acquired by related entities controlled by John Catsimatidis, the principle shareholder of United Refining Company. The assets are being leased to United Refining Company at an annual aggregate rental of approximately $5.2 million over a period ranging from 10 to 20 years. United Refining Company is not a guarantor of the underlying mortgages on the properties. Results of Operations Comparison of Fiscal Quarters Ended February 28, 2002 and February 28, 2001 Net Sales. Net sales decreased $31.5 million or 12.8% from $246.2 million for the fiscal quarter ended February 28, 2001 to $214.7 million for the fiscal quarter ended February 28, 2002. Retail sales increased $9.2 million, or 7.9% from $116.0 million to $125.2 million, while wholesale sales decreased $40.7 million or 31.2% from $130.2 million to $89.5 million. The retail sales increase was due to a retail sales volume increase of 13.1 million gallons or 19.0% (including Country Fair), offset by a significant decline in retail selling prices of 17% (on a same store basis excluding Country Fair). The wholesale sales decrease was due to a 28.5% decrease in wholesale prices offset by a 1.5% increase in wholesale volume. Retail sales were increased by the acquisition of 69 locations operated under the Country Fair name. Country Fair retail sales totaled $27.8 million for the quarter ended February 28, 2002. Country Fair sales volume contributed 12.9 million gallons to the total retail sales volume of 82.0 million gallons for the quarter ended February 28, 2002. Costs of Goods Sold. Costs of goods sold decreased $30.7 million or 14.0% from $220.0 million for the fiscal quarter ended February 28, 2001 to $189.3 million for the fiscal quarter ended February 28, 2002. Retail costs of goods sold increased $6.2 million or 6.1% from $101.1 million to $107.3 million, while wholesale costs of goods sold decreased $36.9 million or 31.0% from $118.9 million to $82.0 million. The significant decrease in consolidated costs of goods sold was consistent with the decrease of approximately 36.0% in worldwide crude oil prices, as indicated by NYMEX crude oil contract prices for 15 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ------------------------------------------------------------------------------- the quarter ended February 28, 2002 as compared to the prior year quarter. The Company's average crude oil purchase price decreased 32.2% compared to the prior year quarter consistent with the previously mentioned 36.0% decline in world crude oil prices as indicated by NYMEX. The increase in retail costs of goods sold is largely attributed to the acquisition of Country Fair. Country Fair's costs of goods sold for the quarter ended February 28, 2002 was $22.7 million. The decrease in wholesale costs of goods sold was primarily due to the previously discussed decrease in the Company's average crude oil purchase price. Costs of goods sold for the quarter ended February 28, 2002 was positively impacted by an approximate $6.2 million increase in the value of the Company's working inventories on a market valuation basis, which decreased costs of goods sold. In the quarter ended February 28, 2001, costs of goods sold was negatively impacted by an approximately $2.9 million decrease in the value of the Company's working inventories on a market valuation basis, which increased costs of goods sold. Gross Profit. Gross Profit decreased $.8 million from $26.2 million for the fiscal quarter ended February 28, 2001 to $25.4 million for the fiscal quarter ended February 28, 2002. This decrease was primarily due to lower industry wholesale margins and significantly lower discounts on heavy high-sulfur crude oil grades processed by the Company, and by lower retail petroleum margins, as industry retail prices did not keep pace with rapidly falling wholesale prices. This decrease was also partially offset by the positive impact on costs of goods sold due to an increase in the value of the Company's working inventories on a market valuation basis, versus an unfavorable impact in the prior year quarter. Operating Expenses. Operating expenses increased $6.5 million or 31.9% from $20.4 million for the fiscal quarter ended February 28, 2001 to $26.9 million for the fiscal quarter ended February 28, 2002. This increase was primarily due to the acquisition of 69 retail locations operated under the Country Fair name. Country Fair's operating expenses for the period ending February 28, 2002 were $5.5 million. The remaining increases to operating expenses were due to increased depreciation, increased advertising costs and increased payroll and payroll costs. Increased depreciation was primarily due to capital equipment installed as part of the Company's on-going maintenance and project upgrades. Operating Income. As a result of the above, operating income decreased $7.2 million from $5.7 million for the fiscal quarter ended February 28, 2001 to ($1.5) million for the fiscal quarter ended February 28, 2002. Interest Expense. Net interest expense (interest expense less interest income) decreased $0.2 million from $5.1 million for the fiscal quarter ended February 28, 2001 to $4.9 million for the fiscal quarter ended February 28, 2002. The decreased net interest expense was due to a reduction of the Company's long term Senior Unsecured Notes offset by borrowings on the Company's revolving credit facility. In March 2001, the Company repurchased a total of $10.2 million face value of Senior Notes. Income Taxes. The Company's effective tax rate for the fiscal quarter ended February 28, 2002 was approximately 40.4% compared to a rate of 42.0% for the fiscal quarter ended February 28, 2001. 16 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ------------------------------------------------------------------------------- Comparison of the Six Months Ended February 28, 2002 and February 28, 2001 Net Sales. Net sales decreased $99.2 million or 18.3% from $542.4 million for the six months ended February 28, 2001 to $443.2 million for the six months ended February 28, 2002. Retail sales decreased $16.7 million, or 6.5% from $255.9 million to $239.2 million, while wholesale sales decreased $82.5 million or 28.8% from $286.5 million to $204.0 million. The retail sales decrease was primarily due to a significant decline in the retail selling prices of 20% (on a same store basis excluding Country Fair), offset by a retail sales volume increase of 10.5 million gallons or 7.7% (including Country Fair). The wholesale sales decrease was due to a 35.2% decrease in wholesale prices offset by a 2.1% increase in wholesale volume. Retail sales were increased by the acquisition of 69 locations operated under the Country Fair name. Country Fair retail sales totaled $27.8 million for the six months ended February 28, 2002. Country Fair sales volume contributed 12.9 million gallons to the total retail sales volume of 82.0 million gallons for the six months ended February 28, 2002. Costs of Goods Sold. Costs of goods sold decreased $72.9 million or 15.0% from $485.6 million for the six months ended February 28, 2001 to $412.7 million for the six months ended February 28, 2002. Retail costs of goods sold decreased $22.2 million or 9.8% from $226.8 million to $204.6 million, while wholesale costs of goods sold decreased $50.7 million or 19.6% from $258.8 million to $208.1 million. The significant decrease in consolidated costs of goods sold was consistent with the decrease of approximately 29.4% in worldwide crude oil prices, as indicated by NYMEX crude oil contract prices for the six months ended February 28, 2002 as compared to the prior year period. The Company's average crude oil purchase price decreased 26.9% compared to the prior year period consistent with the previously mentioned 29.4% decline in world crude oil prices as indicated by NYMEX. The increase in retail costs of goods sold is largely attributed to the acquisition of Country Fair. Country Fair's costs of goods sold for the quarter ended February 28, 2002 was $22.7 million. The decrease in wholesale costs of goods sold was primarily due to the previously discussed decrease in the Company's average crude oil purchase price. Costs of goods sold for the six months ended February 28, 2002 was negatively impacted by an approximate $3.2 million decrease in the value of the Company's working inventories on a market valuation basis, which increased costs of goods sold. For the six months ended February 28, 2001, costs of goods sold was negatively impacted by an approximately $4.4 million decrease in the value of the Company's working inventories on a market valuation basis, which increased costs of goods sold. Gross Profit. Gross Profit decreased $26.3 million from $56.8 million for the six months ended February 28, 2001 to $30.5 million for the six months ended February 28, 2002. This decrease was primarily due to lower industry wholesale margins and lower discounts on heavy high-sulfur crude oil grades processed by the Company, and by lower retail petroleum margins, as industry retail prices did not keep pace with rapidly falling wholesale prices. Also contributing to the decrease was the negative impact on costs of goods sold due to a decrease in the value of the Company's working inventories on a market valuation basis. Operating Expenses. Operating expenses increased $6.2 million or 14.7% from $42.1 million for the six months ended February 28, 2001 to $48.3 million for the six months ended February 28, 2002. This increase was primarily due to the acquisition of 69 retail locations operated under the Country Fair 17 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ------------------------------------------------------------------------------- name. Country Fair's operating expenses for the period ending February 28, 2002 were $5.5 million. The remaining increases to operating expenses were due to increased depreciation, increased advertising costs and increased payroll and payroll costs. Increased depreciation was primarily due to capital equipment installed as part of the Company's on-going maintenance and project upgrades. Operating Income. As a result of the above, operating income decreased $32.4 million from $14.7 million for the six months ended February 28, 2001 to $(17.7) million for the six months ended February 28, 2002. Interest Expense. Net interest expense (interest expense less interest income) decreased $.5 million from $10.0 million for the six months ended February 28, 2001 to $9.5 million for the six months ended February 28, 2002. The decreased net interest expense was due to a reduction of the Company's long term Senior Unsecured Notes offset by borrowings on the Company's revolving credit facility. In March 2001, the Company repurchased a total of $10.2 million face value of Senior Notes. Income Taxes. The Company's effective tax rate for the six months ended February 28, 2002 was approximately 40.0% compared to a rate of 42.0% for the six months ended February 28, 2001. Liquidity and Capital Resources Working capital (current assets minus current liabilities) at February 28, 2002 was $55.0 million and at August 31, 2001 was $93.2 million. The Company's current ratio (current assets divided by current liabilities) was 1.7:1 at February 28, 2002 and 2.6:1 at August 31, 2001. Net cash used in operating activities totaled $23.4 million for the six months ended February 28, 2002 and $1.0 million for the six months ended February 28, 2001. Net cash used in investing activities for purchases of property, plant and equipment totaled $4.5 million and $5.6 million for the six months ended February 28, 2002 and 2001 respectively. Net cash used in investing activities during the six months ended February 28, 2002 included $16.9 million for the acquisition of all outstanding shares of stock of Country Fair, Inc. Net cash provided by investing activities was $23.5 million from the sale of assets for the six months ended February 28, 2001. Also, net cash used in investing activities for the purchase of stock of potential acquisition candidate totaled $3.7 million for the six months ended February 28, 2001. The Company reviews its capital expenditures on an ongoing basis. The Company currently has budgeted approximately $6.0 million for capital expenditures in fiscal 2002. 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 2002. 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 Facility 18 UNITED REFINING COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) ------------------------------------------------------------------------------- commitment is currently $50,000,000, and expires on June 9, 2002. The Facility 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 for base rate borrowings and the LIBOR rate for Euro-Rate borrowings, which was 4.13% as of February 28, 2002. 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. 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. 19 PART II - OTHER INFORMATION Item 1. Legal Proceedings 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. 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: April 15, 2002 UNITED REFINING COMPANY --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 KIANTONE PIPELINE CORPORATION --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 UNITED REFINING COMPANY OF PENNSYLVANIA --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 KIANTONE PIPELINE COMPANY --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 UNITED JET CENTER, INC. --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 KWIK FILL CORPORATION --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 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 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: April 15, 2002 BELL OIL CORP. --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 PPC, INC. --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 SUPER TEST PETROLEUM, INC. --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 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: April 15, 2002 KWIK-FIL, INC. --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 31 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: April 15, 2002 VULCAN ASPHALT REFINING CORPORATION --------------------------------------------- (Registrant) /s/ Myron L. Turfitt --------------------------------------------- Myron L. Turfitt President /s/ James E. Murphy --------------------------------------------- James E. Murphy Chief Financial Officer 32