SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 14, 1995
DIAMOND SHAMROCK, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-9409 74-2456753
(State or other (Commission (IRS employer
Jurisdiction of file number) identification no.)
incorporation)
9830 Colonnade Boulevard, San Antonio, Texas 78230
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 210-641-6800
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ITEM 5. OTHER EVENTS
On November 8, 1995, Shamrock Acquisition Corp. ("SAC"), a wholly owned
subsidiary of the registrant, Diamond Shamrock, Inc. ("Diamond Shamrock")
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
National Convenience Stores Incorporated ("NCS"). Pursuant to that
agreement, SAC acquired control of NCS on December 14, 1995, and SAC was
merged with and into NCS on December 18, 1995 (the "Merger"). The pro
forma financial statements included in Item 7 are furnished to supplement
those included in Diamond Shamrock's Report on Form 8-K dated December 14,
1995, as amended by Diamond Shamrock's Report on Form 8-K/A dated February
14, 1996, filed in connection with the Merger.
ITEM 7. PRO FORMA FINANCIAL INFORMATION AND NOTES
(a) Pro Forma financial information in addition to that required pursuant
to Article 11 of Regulation S-X:
The following pro forma consolidated condensed statements of operations of
Diamond Shamrock for the year ended December 31, 1995 and the six months
ended June 30, 1995 give effect to the acquisition of NCS and the related
financing as if such events had occurred at the beginning of such periods.
Interest expense relating to the financing for such periods has been
calculated based on historical interest rate data, and the amortization of
the excess of cost over the fair value of acquired net assets created as a
result of the acquisition has been reflected as an expense for such
periods.
The pro forma consolidated condensed financial statements should be read in
conjunction with the historical financial statements of Diamond Shamrock,
including the notes thereto, as well as the historical financial statements
of NCS, including the notes thereto, from which the pro forma consolidated
condensed financial statements have been derived.
The pro forma consolidated condensed financial statements are presented for
informational purposes only and are not necessarily indicative of the
financial position or operating results that would have occurred if the
acquisition and the financing had been consummated as of the dates
indicated,nor are they necessarily indicative of the future financial
condition or operating results.
The acquisition was accounted for by the purchase method of accounting
for business combinations and, accordingly, the cost to acquire the assets of
NCS were allocated to the underlying net assets to the extent of their
respective fair values.
No pro forma consolidated balance sheet for the combined companies is
required as of December 31, 1995 inasmuch as the assets, liabilities, and
stockholders equity of NCS are included in the historical Consolidated
Balance Sheet of Diamond Shamrock as of that date.
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DIAMOND SHAMROCK, INC. AND NATIONAL CONVENIENCE STORES INCORPORATED
PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 1995
(amounts in millions, except per share)
Pro Forma
National Adjustments
Diamond Convenience Increase Pro Forma
Shamrock Stores (Decrease) Combined
REVENUES
Sales and operating
revenues $ 3,683.1 $ 862.6 $ 4,545.7
Other revenues, net 19.9 0.5 20.4
3,703.0 863.1 4,566.1
COSTS AND EXPENSES
Cost of products sold $ 2,233.5 516.1 2,749.6
Operating expenses 403.3 144.7 548.0
Selling and administrative 81.4 38.8 120.2
Taxes other than income taxes 786.0 136.8 922.8
Depreciation and amortization 77.7 4.9 $ 6.9(a) 89.5
3,581.9 841.3 6.9 4,430.1
Operating income 121.1 21.8 (6.9) 136.0
Interest expense (47.4) (7.9) (12.9)(b) (68.2)
Income (Loss) Before
Tax Provision 73.7 13.9 (19.8) 67.8
Provision (Benefit)
for Income Taxes 26.4 5.3 (4.5)(c) 27.2
Net Income 47.3 8.6 (15.3) 40.6
Dividend Requirement
on Preferred Stock 4.3 4.3
Earnings Applicable to
Common Shares $ 43.0 $ 8.6 $ (15.3) $ 36.3
Primary Earnings Per Share $ 1.48 $ 1.25
Fully Diluted Earnings
Per Share $ 1.46 $ 1.25
Weighted Average Common Shares
Outstanding
(thousands of shares)
Primary 29,102 29,102
Fully Diluted 32,375 32,375
(a) To reflect additional amortization as a result of the acquisition of NCS
exceeding the fair value of the net assets acquired. The amortization
amount of excess cost is based on a 20-year amortization period.
(b) To reflect additional interest expense for the debt incurred for the
acquisition of NCS, less the reduction in interest expense because of
the repayment of certain NCS debt.
(c) Income tax benefit is calculated as the deductible pro forma adjustments
multiplied by the federal income tax rate (35%).
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DIAMOND SHAMROCK, INC. AND NATIONAL CONVENIENCE STORES INCORPORATED
PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1995
(amounts in millions, except per share)
Pro Forma
National Adjustments
Diamond Convenience Increase Pro Forma
Shamrock Stores (Decrease) Combined
REVENUES
Sales and operating
revenues $ 1,827.6 $ 450.2 $ 2,277.8
Other revenues, net 8.4 0.9 9.3
1,836.0 451.1 2,287.1
COSTS AND EXPENSES
Cost of products sold $ 1,101.9 269.8 1,371.7
Operating expenses 198.3 78.6 276.9
Selling and administrative 39.7 19.2 58.9
Taxes other than income taxes 381.9 71.9 453.8
Depreciation and amortization 38.1 2.7 $ 3.5(a) 44.3
1,759.9 442.2 3.5 2,205.6
Operating income 76.1 8.9 (3.5) 81.5
Interest expense (22.8) (4.5) (6.5)(b) (33.8)
Income (Loss) Before
Tax Provision 53.3 4.4 (10.0) 47.7
Provision (Benefit)
for Income Taxes 19.9 1.9 (2.3)(c) 19.5
Net Income 33.4 2.5 (7.7) 28.2
Dividend Requirement
on Preferred Stock 2.2 2.2
Earnings Applicable to
Common Shares $ 31.2 $ 2.5 $ (7.7) $ 26.0
Primary Earnings Per Share $ 1.08 $ 0.89
Fully Diluted Earnings
Per Share $ 1.03 $ 0.87
Weighted Average Common Shares
Outstanding
(thousands of shares)
Primary 29,089 29,089
Fully Diluted 32,372 32,372
(a) To reflect additional amortization as a result of the acquisition of NCS
exceeding the fair value of the net assets acquired. The amortization
amount of excess cost is based on a 20-year amortization period.
(b) To reflect additional interest expense for the debt incurred for the
acquisition of NCS, less the reduction in interest expense because of
the repayment of certain NCS debt.
(c) Income tax benefit is calculated as the deductible pro forma adjustments
multiplied by the federal income tax rate (35%).
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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 hereunto duly authorized.
DIAMOND SHAMROCK, INC.
(Registrant)
Date: October 10, 1996
/s/ GARY E. JOHNSON
Gary E. Johnson
Vice President and Controller
(Principal Accounting Officer)
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