-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, edPEzgU6Xti2x9IVbbp/CyXG6zD0whF0IMfxCOkFS0jFGXPfgdxUKhGZVssyYTBM 3ZZ2khflA/I5K4UY3uH5rQ== 0000810316-94-000019.txt : 19941117 0000810316-94-000019.hdr.sgml : 19941117 ACCESSION NUMBER: 0000810316-94-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIAMOND SHAMROCK INC CENTRAL INDEX KEY: 0000810316 STANDARD INDUSTRIAL CLASSIFICATION: 2911 IRS NUMBER: 742456753 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09409 FILM NUMBER: 94559084 BUSINESS ADDRESS: STREET 1: 9830 COLONNADE BLVD CITY: SAN ANTONIO STATE: TX ZIP: 78230 BUSINESS PHONE: 2106416800 FORMER COMPANY: FORMER CONFORMED NAME: DIAMOND SHAMROCK R&M INC DATE OF NAME CHANGE: 19900207 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the quarterly period ended September 30, 1994 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the transition period from _____________________to____________________ Commission file number: 1-9409 DIAMOND SHAMROCK, INC. (Exact name of registrant as specified in its charter) DELAWARE 74-2456753 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9830 Colonnade Boulevard, San Antonio, Texas 78230 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code:(210) 641-6800) ____________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) 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. (X)YES ( )NO APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ( )YES ( )NO APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Shares of Common Stock outstanding at October 31, 1994: 29,013,673 PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements DIAMOND SHAMROCK, INC. CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (dollars in millions, except per share data) Three Months Nine Months Ended Ended September 30, September 30, 1994 1993 1994 1993 REVENUES Sales and operating revenues $ 700.4 $ 650.5 $ 1,930.7 $ 1,928.2 Other revenues, net 3.8 3.1 10.9 7.8 704.2 653.6 1,941.6 1,936.0 COSTS AND EXPENSES Cost of products sold and operating expenses 613.8 582.2 1,675.2 1,730.6 Depreciation 17.9 17.4 52.5 47.4 Selling and administrative 18.2 15.0 52.2 44.4 Taxes other than income taxes 10.6 9.3 30.4 29.5 Interest 10.8 11.0 32.1 29.6 671.3 634.9 1,842.4 1,881.5 Income Before Tax Provision and Cumulative Effect of Accounting Changes 32.9 18.7 99.2 54.5 Provision for Income Taxes 12.3 9.4 38.9 23.7 Income Before Cumulative Effect of Accounting Changes 20.6 9.3 60.3 30.8 Cumulative Effect of Accounting Changes - - - (14.2) Net Income 20.6 9.3 60.3 16.6 Dividend Requirement on Preferred Stock 1.1 1.1 3.2 1.3 Earnings Applicable to Common Shares $ 19.5 $ 8.2 $ 57.1 $ 15.3 Primary Earnings (Loss) Per Share Before Accounting Changes $ 0.67 $ 0.28 $ 1.96 $ 1.02 Cumulative Effect of Accounting Changes - - - (0.49) Total $ 0.67 $ 0.28 $ 1.96 $ 0.53 Fully Diluted Earnings (Loss) Per Share Before Accounting Changes $ 0.64 $ 0.28 $ 1.86 $ 1.02 Cumulative Effect of Accounting Changes - - - (0.49) Total $ 0.64 $ 0.28 $ 1.86 $ 0.53 Cash Dividends Per Share Common $ 0.13 $ 0.13 $ 0.39 $ 0.39 Preferred $ 0.625 $ 0.655 $ 1.875 $ - Weighted Average Common Shares Outstanding (thousands of shares) Primary 29,142 28,893 29,135 28,845 Fully Diluted 32,397 32,233 32,391 30,289 See accompanying Notes to Consolidated Financial Statements. DIAMOND SHAMROCK, INC. CONSOLIDATED BALANCE SHEET (dollars in millions, except per share data) September 30, December 31, 1994 1993 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 14.8 $ 12.8 Receivables, less doubtful receivables of $5.5; $5.5 in 1993 194.9 148.8 Inventories Finished products 128.3 114.0 Raw materials 71.1 47.9 Supplies 32.5 24.1 231.9 186.0 Prepaid expenses 10.5 8.6 Total Current Assets 452.1 356.2 Properties and Equipment, less accumulated depreciation of $598.6; $550.9 in 1993 980.9 941.1 Deferred Charges and Other Assets 48.7 51.9 $1,481.7 $1,349.2 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Long-term debt payable within one year $ 3.7 $ 3.5 Accounts payable 104.4 88.5 Accrued taxes 62.1 56.9 Accrued royalties 7.2 7.1 Current portion of Long-term Liability 8.0 8.0 Other accrued liabilities 86.0 56.4 Total Current Liabilities 271.4 220.4 Long-term Debt 501.6 486.2 Deferred Income Taxes 65.3 48.7 Other Liabilities and Deferred Credits 65.0 66.2 Stockholders' Equity Preferred Stock, $.01 par value Authorized shares - 25,000,000 Issued and Outstanding shares 1,725,000; 1,725,000 in 1993 0.0 0.0 Common Stock, $.01 par value Authorized shares - 75,000,000 Issued shares - 29,014,706; 28,927,217 in 1993 Outstanding shares - 29,013,163; 28,903,468 in 1993 0.3 0.3 Paid-in Capital 447.2 444.8 ESOP Stock and Stock Held in Treasury (44.8) (47.9) Retained Earnings 175.7 130.5 Total Stockholders' Equity 578.4 527.7 $1,481.7 $1,349.2 See accompanying Notes to Consolidated Financial Statements. DIAMOND SHAMROCK, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (dollars in millions) Nine Months Ended September 30, 1994 1993 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 60.3 $ 16.6 Adjustments to arrive at net cash provided by operating activities: Depreciation 52.5 47.4 Deferred income taxes 16.8 (6.4) Loss on sale of properties and equipment 2.0 1.6 Cumulative Effect of Accounting Changes - 23.6 Cash flow from futures activity 8.9 1.9 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable (46.1) (15.5) Decrease (increase) in inventories (45.9) (61.6) Decrease (increase) in prepaid expenses (1.9) (4.2) Increase (decrease) in accounts payable 15.9 28.5 Increase (decrease) in taxes payable 5.2 8.7 Increase (decrease) in accrued liabilities 29.7 1.0 Other, net 11.9 12.8 NET CASH PROVIDED BY OPERATING ACTIVITIES 109.3 54.4 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of futures contracts (115.9) (113.5) Settlement of futures contracts 107.0 111.6 Proceeds from sales of facilities 4.1 1.5 Purchase of properties and equipment (95.8) (92.6) Expenditures for investments (3.8) (1.0) NET CASH (USED IN) INVESTING ACTIVITIES (104.4) (94.0) CASH FLOWS FROM FINANCING ACTIVITIES: Net (decrease) in commercial paper - (108.6) Increases in long-term debt 162.3 316.8 Repayments of long-term debt (146.7) (228.7) Payments of long-term liability (7.8) (8.4) Funds received from ESOP 2.5 2.1 Issuance of Common Stock 0.9 1.5 Sale of Preferred Stock - 84.3 Sale of Common Stock held in treasury 0.4 0.2 Dividends paid (14.5) (12.4) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (2.9) 46.8 Net increase in cash and cash equivalents 2.0 7.2 Cash and cash equivalents at beginning of period 12.8 17.5 Cash and cash equivalents at end of period $ 14.8 $ 24.7 See accompanying Notes to Consolidated Financial Statements. DIAMOND SHAMROCK, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Financial Statements The consolidated financial statements as of September 30, 1994 and for the three months and nine months ended September 30, 1994 and 1993 are unaudited, but in the opinion of Diamond Shamrock, Inc. (the "Company"), all adjustments (consisting only of normal accruals) necessary for a fair presentation of consolidated results of operations, consolidated financial position, and consolidated cash flows at the date and for the periods indicated have been included. The consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 1993 Annual Report to Stockholders and incorporated by reference into the Company's Annual Report on Form 10-K for the year ended December 31, 1993 (the "1993 Form 10-K"). With respect to the unaudited consolidated financial information of the Company as of September 30, 1994, and for the three months and nine months ended September 30, 1994 and 1993, Price Waterhouse LLP has made a review (based on procedures adopted by the American Institute of Certified Public Accountants) and not an audit, as set forth in their separate report appearing herein. Such a report is not a "report" or "part of a Registration Statement" within the meaning of Sections 7 and 11 of the Securities Act of 1933 and the liability provisions of Section 11 of such Act do not apply. 2. Significant Accounting Policies The Company includes purchased items in inventory when the product has been delivered and/or when title has passed to the Company. Imbalances in product exchanges are also reflected in the inventory account balance. Products owed to the Company are included in inventory and products owed to exchange partners are excluded from inventory. 3. Inventories Inventories are valued at the lower of cost or market with cost determined primarily under the Last-in, First-out (LIFO) method. At September 30, 1994, inventories of crude oil and refined products of the Refining and Wholesale segment were valued at market values (lower than LIFO cost). Motor fuel products of the Retail segment and propylene products in the Allied Businesses segment were recorded at their LIFO costs. 4. Long-term Debt The Company currently has outstanding $150.0 million of debt which is designated as the 10.75% Senior Notes. As of May 1, 1994, $30.0 million of the long-term debt became payable within one year. Since the Company intends to refinance the $30.0 million repayment by the use of commercial paper or other credit facilities which would be classified as long-term, and the Company has the capacity to do so, the current portion of the long-term debt payable on April 30, 1995 has been classified as long-term debt. 5. Commitments and Contingencies In connection with the 1987 Spin-off from Maxus Energy Corporation ("Maxus"), the Company agreed to assume a share of certain liabilities of Maxus' businesses discontinued or disposed of prior to the Spin-off date (see Note 16 of the 1993 Form 10-K). The Company's total liability for such shared costs is limited to $85.0 million. The Company has reimbursed Maxus for a total of $61.2 million as of September 30, 1994, including $3.0 million and $7.8 million paid during the three months and nine months ended September 30, 1994, respectively (see Note 3 of the 1993 Form 10-K for a discussion of the change in the method of accounting for the liability). REVIEW BY INDEPENDENT ACCOUNTANTS With respect to the unaudited consolidated financial information of the Company as of September 30, 1994 and for the quarters and nine months ended September 30, 1994 and 1993, Price Waterhouse LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated November 11, 1994 appearing below, states that they did not audit and they do not express an opinion on that unaudited consolidated financial information. Price Waterhouse LLP has not carried out any significant or additional audit tests beyond those which would have been necessary if their report had not been included. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. Price Waterhouse LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited consolidated financial information because that report is not a "report" or "part of a Registration Statement" prepared or certified by Price Waterhouse LLP within the meaning of Sections 7 and 11 of the Act. REPORT ON REVIEW BY INDEPENDENT ACCOUNTANTS To the Stockholders and Board of Directors of Diamond Shamrock, Inc. We have reviewed the consolidated interim financial information included in the Report on Form 10-Q of Diamond Shamrock, Inc. and its subsidiaries as of September 30, 1994 and for the quarters and nine months ended September 30, 1994 and 1993. This financial information is the responsibility of the management of Diamond Shamrock, Inc. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial information for it to be in conformity with generally accepted accounting principles. We previously audited in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1993, and the related consolidated statements of operations and of cash flows for the year then ended (not presented herein), and in our report dated February 25, 1994, which included an explanatory paragraph regarding the Company's changes in accounting for its long-term shared cost liability, income taxes and post- retirement benefits other than pensions, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 1993, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. PRICE WATERHOUSE LLP San Antonio, Texas November 11, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following are the Company's sales and operating revenues and operating profit for the three months and nine months ended September 30, 1994 and 1993. Business segment operating profit is sales and operating revenues less applicable segment operating expense. In determining the operating profit of the three business segments, neither interest expense nor administrative expenses are included. Three Months Nine Months Ended Ended September 30, September 30, 1994 1993 1994 1993 Sales and Operating Revenues: Refining and Wholesale $ 357.5 $ 336.0 $ 996.7 $ 975.1 Retail 267.1 253.5 721.6 732.9 Allied Businesses 75.8 61.0 212.4 220.2 Total Sales and Operating Revenues $ 700.4 $ 650.5 $1,930.7 $1,928.2 Operating Profit: Refining and Wholesale $ 37.9 $ 19.2 $ 130.4 $ 64.7 Retail 16.0 21.0 34.2 45.9 Allied Businesses 5.4 2.6 12.4 12.9 Total Operating Profit $ 59.3 $ 42.8 $ 177.0 $ 123.5 Consolidated Results Third Quarter 1994 vs Third Quarter 1993 Sales and operating revenues of $700.4 million for the third quarter of 1994 were 7.7% higher than for the same period of 1993, primarily due to a 4.8% increase in refined product sales prices, a 1.9% increase in refined product sales volumes, a 3.8% increase in retail gasoline prices, and a 5.8% increase in retail merchandise sales. In addition there was a 68.7% increase in sales from the propane/propylene splitter, primarily due to a 41.1% and a 32.1% increase in polymer grade propylene prices and volumes, respectively. During the third quarter of 1994, the Company had net income of $20.6 million compared to net income of $9.3 million in the 1993 third quarter. The Company's third quarter 1994 results were positively impacted by an increase in the value of refinery inventories due primarily to crude oil price increases during the period. This increase in net income was also attributable to increased operating profits from the Company's propane/propylene splitter and Nitromite anhydrous ammonia fertilizer businesses, primarily due to increased sales volumes and margins. These increases in net income were partially offset by a decrease in operating profit from the Company's Retail segment, primarily due to a 11.3% decrease in retail gasoline margins. Inventories are valued at the lower of cost or market with cost determined primarily under the Last-in, First-out (LIFO) method. At September 30, 1994, inventories of crude oil and refined products of the Refining and Wholesale segment were valued at market values (lower than LIFO cost). Motor fuel product inventories of the Retail segment and propylene products in the Allied Businesses segment were recorded at their LIFO costs. Estimating the financial impact of changes in the valuation of refinery inventories due to such inventories being valued at market is difficult because of the number of variables that must be considered. For operating purposes, management attempts to estimate the impact of changes in valuation of inventories on net income. The estimated after-tax effect on net income from changes in inventory values was a positive $2.9 million and a negative $5.6 million in the third quarters of 1994 and 1993, respectively. Consolidated Results First Nine Months 1994 vs First Nine Months 1993 Sales and operating revenues of $1.9 billion for the first nine months of 1994 were $2.5 million higher than for the same period of 1993. This increase was primarily due to a 10.6% increase in refined product sales volumes and a 4.1% increase in sales from the Company's Nitromite anhydrous ammonia fertilizer business, reflecting increased sales volumes and prices. Partially offsetting this increase was a 6.6% decrease in retail gasoline prices, a 13.8% and a 7.2% decrease in natural gas liquids sales prices and volumes, respectively, and a 7.7% decrease in refined product sales prices. During the first nine months of 1994, the Company had net income of $60.3 million compared to net income (before cumulative effect of accounting changes) of $30.8 million in the first nine months of 1993 reflecting higher refinery margins and an increase in the value of refinery inventories due primarily to crude oil price increases during the first nine months of 1994. The estimated after-tax effect on net income from changes in inventory values was a positive $8.1 million and a negative $7.8 million in the first nine months of 1994 and 1993, respectively. Segment Results Third Quarter 1994 vs Third Quarter 1993 During the third quarter of 1994, the Refining and Wholesale segment had sales and operating revenues of $357.5 million compared to $336.0 million during the third quarter of 1993. The increase in sales and operating revenues was primarily due to a 5.4% increase in refined product sales prices and a 1.5% increase in refined products sales volumes reflecting the completion of the expansion of the Three Rivers refinery. Operating profit in the third quarter of 1994 increased $18.7 million over that for the third quarter of 1993, primarily due to a 1.5% increase in refined product sales volumes over the same period a year ago, and an increase in the value of refinery inventories due primarily to crude oil price increases during the third quarter of 1994. The estimated after-tax effect on net income from changes in inventory values was a positive $2.9 million and a negative $5.6 million in the third quarter of 1994 and 1993, respectively. The Retail segment in the third quarter of 1994 experienced a 5.4% increase in sales and operating revenues compared to the third quarter of 1993. Such increase was primarily due to a 3.8% increase in retail gasoline prices and a 5.8% increase in retail merchandise sales. Operating profit in the third quarter of 1994 was $16.0 million compared to $21.0 million in the third quarter of 1993. The decrease was primarily due to an 11.3% decrease in retail gasoline margins. During the third quarter of 1994, the Allied Businesses segment results reflected an increase in sales and operating revenues of 24.3%, primarily due to a 68.7% increase in propane/propylene revenue, reflecting a 41.1% and a 32.1% increase in polymer grade propylene prices and volumes, respectively. Also contributing to the increase in sales and operating revenues was a 23.1% increase in telephone services revenue, and a 36.6% improvement in the Nitromite anhydrous ammonia fertilizer revenue reflecting increased sales volumes and prices during the period. Operating profits were $5.4 million for the third quarter of 1994 compared to $2.6 million in the third quarter of 1993. Operating profits for this segment increased primarily due to an increase of $2.4 million and $1.4 million in propane/propylene splitter and Nitromite anhydrous ammonia fertilizer businesses operating profits, respectively, reflecting improved sales volumes and margins. Segment Results First Nine Months 1994 vs First Nine Months 1993 Sales and operating revenues from the Refining and Wholesale segment were $996.7 million in the first nine months of 1994 compared to $975.1 million during the first nine months of 1993. A 10.6% increase in refined product sales volumes was partially offset by a 7.5% decrease in refined product sales prices. Operating profit in this segment for the period more than doubled that for the first nine months of 1993, primarily due to a 19.2% increase in refinery margins over the first nine months of 1993. The Retail segment results in the first nine months of 1994 reflected a 1.5% decrease in sales and operating revenues, primarily due to a 6.6% decrease in retail gasoline prices, partially offset by a 1.7% increase in retail gasoline sales volumes. Operating profit in the first nine months of 1994 was $34.2 million compared to $45.9 million in the first nine months of 1993. The decrease was primarily due to a 7.3% decrease in retail gasoline margins, partially offset by a 3.7% increase in gross merchandise margins and a $0.9 million increase in gross profit from lottery sales. The Allied Businesses segment results reflected a decrease in sales and operating revenues of 3.5% to $212.4 million in the first nine months of 1994 as compared to the same period in 1993. This decrease was primarily due to a 13.8% and a 7.2% decrease in natural gas liquids sales prices and volumes, respectively, reflecting the cancellation during the second quarter of 1993 of a contract to process natural gas. This decrease in sales and operating revenues was partially offset by a $12.2 million increase in the Nitromite anhydrous ammonia fertilizer sales and operating revenue and an improvement of $5.5 million in telephone services sales and operating revenue. Operating profit in the first nine months of 1994 was $12.4 million compared to $12.9 million in the first nine months of 1993. The decrease in operating profit was primarily due to an increase in international operations operating expenses and a decrease in natural gas processing operating profit, reflecting the shutdown of the Company's natural gas processing facility in the second quarter of 1993. This decrease was offset by a $4.2 million and a $2.2 million increase in operating profit in the Company s Nitromite anhydrous ammonia fertilizer and natural gas liquids pipeline businesses, respectively. Outlook Early in the third quarter, product prices strengthened and helped to improve industry-wide refining margins. With the end of the driving season and the effective reduction of inventories of regular gasoline by refiners in order to start reformulated fuel production, refining margins rapidly weakened in September. Refining margins have since improved somewhat. Partially offsetting the weakness in refining margins were strong marketing margins and volumes in the third quarter as compared to earlier periods. While marketing margins have decreased slightly since the end of the third quarter, they remain higher than all of the quarterly average margins for 1994. Longer term, although demand for gasoline is expected to grow only modestly as fuel efficiency improves and alternative fuels are introduced, industry refining capacity is expected to remain constrained due to the impact of regulatory restrictions. The current regulatory restrictions ultimately are expected to contribute to the shutdown of smaller, less efficient refineries and to discourage the construction of new refineries in the United States. Management continues to believe that the Company is well-positioned to benefit from these conditions due to its efficient and strategically located refining, distribution, and marketing system. Liquidity and Capital Resources Cash Flow and Working Capital For the nine months ended September 30, 1994, cash provided by operations was $109.3 million, compared with $54.4 million in the same period of 1993. Working capital at September 30, 1994 was up $44.9 million from December 31, 1993, and consisted of current assets of $452.1 million and current liabilities of $271.4 million, or a current ratio of 1.7. At December 31, 1993, current assets were $356.2 million and current liabilities were $220.4 million, or a current ratio of 1.6. Accounts Receivable at September 30, 1994 were up $46.1 million from December 31, 1993, primarily due to higher refined product sales volumes. Capital Expenditures The Company's capital and investment expenditures estimate for 1994 is approximately $140.0 million. The 1994 capital expenditures include approximately $88.0 million for the recently completed refined products pipeline from the McKee refinery to Colorado Springs, and for projects currently underway, namely the Colorado Springs to Denver products pipeline, a 400-mile pipeline to El Paso from McKee, and a crude oil storage terminal at Corpus Christi and pipeline to Three Rivers. The Company's capital and investment expenditures during 1993 were $131.8 million. The Company's 1994 capital expenditures were $95.8 million during the first nine months of the year, compared with $92.6 million for the same period of 1993. Included in the first nine months of 1993 capital expenditures was the major expansion of the Three Rivers refinery, completed in June 1993. The Company's 1995 capital budget is estimated to be $190.0 million and includes carryover spending from projects currently underway such as the pipeline to El Paso, the Colorado Springs to Denver pipeline, the Corpus Christi crude oil terminal and pipeline, and the TAME unit at the McKee refinery. The Company anticipates that its capital expenditures, as well as expenditures for debt service, lease obligations, working capital, and dividend requirements might at times exceed cash generated by operations. To the extent that the Company's requirements exceed cash generated by operations, the Company anticipates that it may access its commercial paper and bank money market facilities or issue medium- to long-term notes. The Company may also consider other alternatives depending upon various factors, including changes in its capital requirements, results of operations, and developments in the capital markets. The Company continued to enhance its retail marketing business in the first nine months of 1994 with the acquisition of 8 outlets in El Paso, Texas and the announcement in June that the Company had signed an agreement to acquire 18 outlets in Colorado. The acquisition of the 18 Colorado outlets was completed on November 10, 1994. In addition, the Company opened 10 new outlets and closed 4 marginal units through September 30, 1994. The newly opened outlets and some of the newly acquired outlets are or will be leased by the Company under a pre-existing long-term lease arrangement. The Company has leased approximately $154.0 million in retail outlets and related equipment under these arrangements. The Company has entered into agreements to extend the primary term applicable to the properties under the lease by two years, to April, 1999. At September 30, 1994, approximately $36.0 million remained available under the lease. The Company presently anticipates constructing or acquiring a total of approximately 45 to 50 outlets during 1994. Regulatory Matters It is expected that rules and regulations implementing the federal, state, and local laws relating to health, safety and environmental quality will continue to affect the operations of the Company. The Company cannot predict what health, safety or environmental legislation, rules or regulations will be enacted in the future or how existing or future laws, rules or regulations will be administered or enforced with respect to products or activities of the Company. However, compliance with more stringent laws or regulations, as well as more expansive interpretation of existing laws and their more vigorous enforcement by the regulatory agencies could have an adverse effect on the operations of the Company and could require substantial additional expenditures by the Company, such as for the installation and operation of pollution control systems and equipment and for the manufacture and distribution of reformulated fuel. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 First Amendment to Agreement for Ground Lease between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of June 1, 1994. 10.2 First Amendment to Ground Lease Agreement between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of June 1, 1994. 10.3 First Amendment to Agreement for Facilities Lease between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of June 1, 1994. 10.4 First Amendment to Facilities Lease Agreement between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of June 1, 1994. 10.5 Third Amendment to Agreement for Ground Lease between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of September 16, 1994. 10.6 Third Amendment to Ground Lease Agreement between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of September 16, 1994. 10.7 Third Amendment to Agreement for Facilities Lease between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of September 16, 1994. 10.8 Third Amendment to Facilities Lease Agreement between Brazos River Leasing L.P. and Diamond Shamrock Refining and Marketing Company, dated as of September 16, 1994. 15.1 Independent Accountants' Awareness Letter. (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company in the third quarter of 1994. SIGNATURE 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. DIAMOND SHAMROCK, INC. By /S/ GARY E. JOHNSON Vice President and Controller (Principal Accounting Officer) November 11, 1994 EX-10.1 2 FIRST AMENDMENT TO AGREEMENT FOR GROUND LEASE between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of June 1, 1994 This First Amendment to Agreement for Ground Lease has been manually executed in 12 counterparts, numbered consecutively from 1 through 12, of which this is No. 4. To the extent, if any, that this First Amendment to Agreement for Ground Lease constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in this First Amendment to Agreement for Ground Lease may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. FIRST AMENDMENT TO AGREEMENT FOR GROUND LEASE This First Amendment to Agreement for Ground Lease is made and entered into as of June 1, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into an Agreement for Ground Lease, dated as of October 30, 1992 (the "Agreement for Ground Lease"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Agreement for Ground Lease to extend the acquisition period, to increase the permitted expenditure amount for Facilities and to otherwise set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Property acquired by Brazos under the Agreement for Ground Lease. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Agreement for Ground Lease is hereby amended as follows: 1. Section 3.06 of the Agreement for Ground Lease is hereby amended by deleting in subsection (i) in Section 3.06, the reference to "two years" and inserting in lieu thereof "four years". 2. Section 2.02 of the Agreement for Ground Lease is hereby amended by deleting the reference to "$700,000" and inserting in lieu thereof "$900,000." 3. Brazos and Diamond Shamrock R & M agree that this First Amendment to Agreement for Ground Lease shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of the Third Amendment and Modification Agreement by the necessary parties under the Credit Agreement. 4. Defined terms used in this First Amendment to Agreement for Ground Lease and not otherwise defined herein have the meanings ascribed to those terms in the Agreement for Ground Lease. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this First Amendment to Agreement for Ground Lease to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING By: Headwater Investments L.P., its General Partner By: Headwater Holdings, Inc., its General Partner By: /S/ Gregory C. Greene, President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. Becker Vice President and Treasurer EX-10.2 3 FIRST AMENDMENT TO GROUND LEASE AGREEMENT between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of June 1, 1994 This First Amendment to Ground Lease Agreement has been manually executed in 12 counterparts, numbered consecutively from 1 through 12, of which this is No. 4. To the extent, if any, that this First Amendment to Ground Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in this First Amendment to Ground Lease Agreement may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. FIRST AMENDMENT TO GROUND LEASE AGREEMENT This First Amendment to Ground Lease Agreement is made and entered into as of June 1, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into a Ground Lease Agreement, dated as of October 30, 1992 (the "Ground Lease Agreement"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Ground Lease Agreement to extend the lease term and to otherwise set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Property leased by Brazos under the Ground Lease Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Ground Lease Agreement is hereby amended as follows: 1. Section 5.01 of the Ground Lease Agreement is hereby amended by deleting the reference to "April 30, 1997" and inserting in lieu thereof "April 30, 1999". 2. Section 5.02 of the Ground Lease Agreement is hereby amended by deleting the reference to "April 30, 2007" and inserting in lieu thereof "April 30, 2009". 3. Section 3.02 of the Ground Lease Agreement is hereby amended to add in the first sentence of paragraph (a) of such Section 3.02 immediately after the words "if the terms of (b)" the additional reference to "or (c)" and to add to such Section 3.02, a paragraph (c) which shall read as follows: "(c) Upon the release or disposition of a Property or any portion thereof and the application of proceeds therefrom in accordance with Section 9.1(a)(viii) of the Credit Agreement, Brazos and Diamond Shamrock R & M shall execute a Revised Property Leasing Record to reflect the change in Acquisition Cost for such Property caused by such release or disposition." 4. Brazos and Diamond Shamrock R & M agree that this First Amendment to Ground Lease Agreement shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of the Third Amendment and Modification Agreement by the necessary parties under the Credit Agreement. 5. Defined terms used in this First Amendment to Ground Lease Agreement and not otherwise defined herein have the meanings ascribed to those terms in the Ground Lease Agreement. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this First Amendment to Ground Lease Agreement to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings Inc., its General Partner By: /S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer EX-10.3 4 FIRST AMENDMENT TO AGREEMENT FOR FACILITIES LEASE between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REPINING AND MARKETING COMPANY Dated as of June 1, 1994 This First Amendment to Agreement for Facilities Lease has been manually executed in 12 counterparts, numbered consecutively from 1 through 12, of which this is No. 4. To the extent, if any, that this First Amendment to Agreement for Facilities Lease constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in this First Amendment to Agreement for Facilities Lease may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. FIRST AMENDMENT TO AGREEMENT FOR FACILITIES LEASE This First Amendment to Agreement for Facilities Lease is made and entered into as of June 1, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into an Agreement for Facilities Lease, dated as of October 30, 1992 (the "Agreement for Facilities Lease"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Agreement for Facilities Lease to extend the acquisition period, to increase the permitted expenditure amount for Facilities and to otherwise set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Facility acquired by Brazos under the Agreement for Facilities Lease. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Agreement for Facilities Lease is hereby amended as follows: 1. Section 3.06 of the Agreement for Facilities Lease is hereby amended by deleting in subsection (i) in Section 3.06, the reference to "two years" and inserting in lieu thereof "four years". 2. Section 2.02 of the Agreement for Facilities Lease is hereby amended by deleting the reference to "$900,000" and inserting in lieu thereof "$1,200,000." 3. Brazos and Diamond Shamrock R & M agree that this First Amendment to Agreement for Facilities Lease shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of the Third Amendment and Modification Agreement by the necessary parties under the Credit Agreement. 4. Defined terms used in this First Amendment to Agreement for Facilities Lease and not otherwise defined herein have the meanings ascribed to those terms in the Agreement for Facilities Lease. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this First Amendment to Agreement for Facilities Lease to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings Inc., its General Partner By: /S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer EX-10.4 5 FIRST AMENDMENT TO FACILITIES LEASE AGREEMENT between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of June 1, 1994 This First Amendment to Facilities Lease Agreement has been manually executed in 12 counterparts, numbered consecutively from 1 through 12, of which this is No. 4. To the extent, if any, that this First Amendment to Facilities Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in this First Amendment to Facilities Lease Agreement may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. FIRST AMENDMENT TO FACILITIES LEASE AGREEMENT This First Amendment to Facilities Lease Agreement is made and entered into as of June 1, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into a Facilities Lease Agreement, dated as of October 30, 1992, the "Facilities Lease Agreement"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Facilities Lease Agreement to extend the lease term and to otherwise set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Facility leased by Brazos under the Facilities Lease Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Facilities Lease Agreement is hereby amended as follows: 1. Section 5.01 of the Facilities Lease Agreement is hereby amended by deleting the reference to "April 30, 1997" and inserting in lieu thereof "April 30, 1999". 2. Section 5.03 of the Facilities Lease Agreement is hereby amended by deleting the reference to "April 30, 2007" and inserting in lieu thereof "April 30, 2009". 3. Section 3.02 of the Facilities Lease Agreement is hereby amended to add in the first sentence of paragraph (a) of such Section 3.02 immediately after the words "if the terms of (b)" the additional reference to "or (c)" and to add to such Section 3.02, a paragraph (c) which shall read as follows: " (c) Upon the release or disposition of a Facility or any portion thereof and the application of proceeds therefrom in accordance with Section 9.1(a)(viii) of the Credit Agreement, Brazos and Diamond Shamrock R&M shall execute a Revised Facility Leasing Record to reflect the change in Acquisition Cost for such Facility caused by such release or disposition." 4. Brazos and Diamond Shamrock R & M agree that this First Amendment to Facilities Lease Agreement shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of the Third Amendment and Modification Agreement by the necessary parties under the Credit Agreement. 5. Defined terms used in this First Amendment to Facilities Lease Agreement and not otherwise defined herein have the meanings ascribed to those terms in the Facilities Lease Agreement. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this First Amendment to Facilities Lease Agreement to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings Inc., its General Partner By: /S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer EX-10.5 6 THIRD AMENDMENT TO AGREEMENT FOR GROUND LEASE between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of September 16, 1994 This Third Amendment to Agreement for Ground Lease has been manually executed in 8 counterparts, numbered consecutively from 1 through 8, of which this is No. ____. To the extent, if any, that this Third Amendment to Agreement for Ground Lease constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in this Third Amendment to Agreement for Ground Lease may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. THIRD AMENDMENT TO AGREEMENT FOR GROUND LEASE This Third Amendment to Agreement for Ground Lease is made and entered into as of September 16, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into an Agreement for Ground Lease, dated as of April 23, 1992 (the "Agreement for Ground Lease"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Agreement for Ground Lease to increase the permitted expenditure amount for Properties and to otherwise set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Property acquired by Brazos under the Agreement for Ground Lease. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Agreement for Ground Lease is hereby amended as follows: 1. Section 2.02 of the Agreement for Ground Lease is hereby amended by deleting the reference to "$700,000" and inserting in lieu thereof "$900,000." 2. Brazos and Diamond Shamrock R & M agree that this Third Amendment to Agreement for Ground Lease shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of the Amendment No. 3 to the Credit Agreement by the necessary parties under the Credit Agreement. 3. Defined terms used in this Third Amendment to Agreement for Ground Lease and not otherwise defined herein have the meanings ascribed to those terms in the Agreement for Ground Lease. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this Third Amendment to Agreement for Ground Lease to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings, Inc., its General Partner By:/S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer EX-10.6 7 THIRD AMENDMENT TO GROUND LEASE AGREEMENT between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of September 16, 1994 This Third Amendment to Ground Lease Agreement has been manually executed in 8 counterparts, numbered consecutively from 1 through 8, of which this is No. ____. To the extent, if any, that this Third Amendment to Ground Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial code as in effect in any jurisdiction), no security interest in this Third Amendment to Ground Lease Agreement may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. THIRD AMENDMENT TO GROUND LEASE AGREEMENT This Third Amendment to Ground Lease Agreement is made and entered into as of September 16, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into a Ground Lease Agreement, dated as of April 23, 1992 (the "Ground Lease Agreement"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Ground Lease Agreement to set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Property leased by Brazos under the Ground Lease Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Ground Lease Agreement is hereby amended as follows: 1. Section 3.02 of the Ground Lease Agreement is hereby amended to add in the first sentence of paragraph (a) of such Section 3.02 immediately after the words "if the terms of (b)" the additional reference to "or (c)" and to add to such Section 3.02, a paragraph (c) which shall read as follows: "(c) Upon the release or disposition of a Property or any portion thereof and the application of proceeds therefrom in accordance with Section 9.01(a)(viii) of the Credit Agreement, Brazos and Diamond Shamrock R&M shall execute a Revised Property Leasing Record to reflect the change in Acquisition Cost for such Property caused by such release or disposition." 2. Brazos and Diamond Shamrock R & M agree that this Third Amendment to Ground Lease Agreement shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of Amendment No. 3 to the Credit Agreement by the necessary parties under the Credit Agreement. 3. Defined terms used in this Third Amendment to Ground Lease Agreement and not otherwise defined herein have the meanings ascribed to those terms in the Ground Lease Agreement. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this Third Amendment to Ground Lease Agreement to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings, Inc., its General Partner By: /S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer EX-10.7 8 THIRD AMENDMENT TO AGREEMENT FOR FACILITIES LEASE between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of September 16, 1994 This Third Amendment to Agreement for Facilities Lease has been manually executed in 8 counterparts, numbered consecutively from 1 through 8, of which this is No. ____. To the extent, if any, that this Third Amendment to Agreement for Facilities Lease constitutes chattel paper (as such term is defined in the Uniform Commercial code as in effect in any jurisdiction), no security interest in this Third Amendment to Agreement for Facilities Lease may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. THIRD AMENDMENT TO AGREEMENT FOR FACILITIES LEASE This Third Amendment to Agreement for Facilities Lease is made and entered into as of September 16, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into an Agreement for Facilities Lease, dated as of April 23, 1992 (the "Agreement for Facilities Lease"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Agreement for Facilities Lease to increase the permitted expenditure amount for Facilities and to otherwise set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Facility acquired by Brazos under the Agreement for Facilities Lease. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Agreement for Facilities Lease is hereby amended as follows: 1. Section 2.02 of the Agreement for Facilities Lease is hereby amended by deleting the reference to "$1,000,000" andinserting in lieu thereof $1,200,000." 2. Brazos and Diamond Shamrock R & M agree that this Third Amendment to Agreement for Facilities Lease shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of Amendment No. 3 to the Credit Agreement by the necessary parties under the Credit Agreement. 3. Defined terms used in this Third Amendment to Agreement for Facilities Lease and not otherwise defined herein have the meanings ascribed to those terms in the Agreement for Facilities Lease. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this Third Amendment to Agreement for Facilities Lease to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings, Inc., its General Partner By: /S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer w2497a.tw EX-10.8 9 THIRD AMENDMENT TO FACILITIES LEASE AGREEMENT between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of September 16, 1994 This Third Amendment to Facilities Lease Agreement has been manually executed in 8 counterparts, numbered consecutively from 1 through 8, of which this is No. ____. To the extent, if any, that this Third Amendment to Facilities Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any jurisdiction), no security interest in this Third Amendment to Facilities Lease Agreement may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. THIRD AMENDMENT TO FACILITIES LEASE AGREEMENT This Third Amendment to Facilities Lease Agreement is made and entered into as of September 16, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into a Facilities Lease Agreement, dated as of April 23, 1992, the "Facilities Lease Agreement"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Facilities Lease Agreement to set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Facility leased by Brazos under the Facilities Lease Agreement. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Facilities Lease Agreement is hereby amended as follows: 1. Section 3.02 of the Facilities Lease Agreement is hereby amended to add in the first sentence of paragraph (a) of such Section 3.02 immediately after the words "if the terms of (b)" the additional reference to "or (c)" and to add to such Section 3.02, a paragraph (c) which shall read as follows: "(c) Upon the release or disposition of a Facility or any portion thereof and the application of proceeds therefrom in accordance with Section 9.01(a)(viii) of the Credit Agreement, Brazos and Diamond Shamrock R&M shall execute a Revised Facility Leasing Record to reflect the change in Acquisition Cost for such Facility caused by such release or disposition." 2. Brazos and Diamond Shamrock R & M agree that this Third Amendment to Facilities Lease Agreement shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of Amendment No. 3 to the Credit Agreement by the necessary parties under the Credit Agreement. 3. Defined terms used in this Third Amendment to Facilities Lease Agreement and not otherwise defined herein have the meanings ascribed to those terms in the Facilities Lease Agreement. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this Third Amendment to Facilities Lease Agreement to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings, Inc., its General Partner By:/S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer EX-15.1 10 THIRD AMENDMENT TO AGREEMENT FOR FACILITIES LEASE between BRAZOS RIVER LEASING L.P. and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY Dated as of September 16, 1994 This Third Amendment to Agreement for Facilities Lease has been manually executed in 8 counterparts, numbered consecutively from 1 through 8, of which this is No.____. To the extent, if any, that this Third Amendment to Agreement for Facilities Lease constitutes chattel paper (as such term is defined in the Uniform Commercial code as in effect in any jurisdiction), no security interest in this Third Amendment to Agreement for Facilities Lease may be created or perfected through the transfer or possession of any counterpart other than the original counterpart which shall be the counterpart identified as counterpart No. 1. THIRD AMENDMENT TO AGREEMENT FOR FACILITIES LEASE This Third Amendment to Agreement for Facilities Lease is made and entered into as of September 16, 1994, by and between BRAZOS RIVER LEASING L.P. ("Brazos") and DIAMOND SHAMROCK REFINING AND MARKETING COMPANY ("Diamond Shamrock R & M"). W I T N E S S E T H: WHEREAS, Brazos and Diamond Shamrock R & M have heretofore entered into an Agreement for Facilities Lease, dated as of April 23, 1992 (the "Agreement for Facilities Lease"); and WHEREAS, Brazos and Diamond Shamrock R & M desire to amend the Agreement for Facilities Lease to increase the permitted expenditure amount for Facilities and to otherwise set forth their mutual agreement; and WHEREAS, Brazos and Diamond Shamrock R & M agree that the provisions of this amendment shall apply, to the extent provided by law, to each Facility acquired by Brazos under the Agreement for Facilities Lease. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Brazos and Diamond Shamrock R & M agree that the Agreement for Facilities Lease is hereby amended as follows: 1. Section 2.02 of the Agreement for Facilities Lease is hereby amended by deleting the reference to "$1,000,000" and inserting in lieu thereof $1,200,000." 2. Brazos and Diamond Shamrock R & M agree that this Third Amendment to Agreement for Facilities Lease shall not be effective until the approvals required by Section 9.01 of the Credit Agreement have been obtained as evidenced by the execution of Amendment No. 3 to the Credit Agreement by the necessary parties under the Credit Agreement. 3. Defined terms used in this Third Amendment to Agreement for Facilities Lease and not otherwise defined herein have the meanings ascribed to those terms in the Agreement for Facilities Lease. IN WITNESS WHEREOF, Brazos and Diamond Shamrock R & M have caused this Third Amendment to Agreement for Facilities Lease to be executed and delivered by their duly authorized officers as of the day and year first above written. BRAZOS RIVER LEASING L.P. By: Headwater Investments L.P., its General Partner By: Headwater Holdings, Inc., its General Partner By: /S/ GREGORY C. GREENE President DIAMOND SHAMROCK REFINING AND MARKETING COMPANY By: /S/ R.C. BECKER Vice President and Treasurer EX-27 11
5 1000 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 14800 0 200400 5500 231900 452100 1579500 598600 1481700 271400 0 300 0 0 578100 1481700 1930700 1941600 1675200 1675200 135100 0 32100 99200 38900 60300 0 0 0 60300 1.96 1.86
-----END PRIVACY-ENHANCED MESSAGE-----