SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]
For the fiscal year ended 1997
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to _________.
Commission file number 333-27701
A. ULTRAMAR DIAMOND SHAMROCK CORPORATION
401(k) RETIREMENT PLAN
B. Ultramar Diamond Shamrock Corporation
6000 N Loop 1604 W
San Antonio TX 78249-1112
<PAGE>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997 and 1996
<PAGE>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
DECEMBER 31, 1997 and 1996
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES PAGE
Reports of Independent Public Accountants 3
Financial Statements:
Statement of Net Assets Available for Benefits With Fund
Information as of December 31, 1997 5
Statement of Net Assets Available for Benefits With Fund
Information as of December 31, 1996 7
Statement of Changes in Net Assets Available for Benefits With
Fund Information for the year ended December 31, 1997 9
Statement of Changes in Net Assets Available for Benefits With
Fund Information for the year ended December 31, 1996 11
Notes to Financial Statements 13
ADDITIONAL INFORMATION - SUPPLEMENTAL SCHEDULES:
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes 19
Schedule II - Item 27b - Schedule of Loans or Fixed Income Obligations 20
Schedule III - Item 27d - Schedule of Reportable Transactions 21
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Ultramar Diamond Shamrock Corporation
401(k) Retirement Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of the Ultramar Diamond Shamrock Corporation 401(k) Retirement Savings Plan (the
Plan) as of December 31, 1997, and the related statement of changes in net
assets available for benefits for the year then ended. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and the changes in net assets available for benefits for the
year then ended, in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes as of December 31, 1997, Loans or Fixed Income
Obligations for the year ended December 31, 1997, and Reportable Transactions
for the year ended December 31, 1997 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statement of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
San Antonio, Texas
June 25, 1998
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Participants, Plan Administrator and Trustees
of the Ultramar Diamond Shamrock Corporation 401(k)
Retirement Savings Plan
In our opinion, the accompanying Statement of Net Assets Available for Benefits
With Fund Information and Statement of Changes in Net Assets Available for
Benefits With Fund Information, present fairly, in all material respects, the
net assets available for benefits of the Ultramar Diamond Shamrock Corporation
401(k) Retirement Savings Plan (the Plan) as of December 31, 1996 and the
changes in net assets available for benefits for the year then ended in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Plan Administrator; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by the Plan
Administrator, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The fund information in the Statement of Net Assets
Available for Benefits and the Statement of Changes in Net Assets Available for
Benefits is presented for additional analysis rather than to present the net
assets available for benefits and the changes in net assets available for
benefits for each fund. The fund information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
San Antonio, Texas
June 24, 1997
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
CIGNA CIGNA CIGNA CIGNA CIGNA FIDELITY
FIXED LIFETIME LIFETIME LIFETIME LIFETIME CIGNA ADVISOR
INCOME 20 30 40 60 BALANCED INCOME AND
ACCOUNT FUND FUND FUND FUND ACCOUNT GROWTH
ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Common stock $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Common and commingled trust funds 0 219,134 305,507 298,093 155,588 29,014 139,393
Loans to participants 0 0 0 0 0 0 0
0 219,134 305,507 298,093 155,588 29,014 139,393
Investment contract with insurance
company, at contract value 11,662,332 0 0 0 0 0 0
Total investments 11,662,332 219,134 305,507 298,093 155,588 29,014 139,393
Receivables:
Employer contributions 67,478 3,277 3,911 2,953 1,464 333 3,215
Employee contributions 236,090 9,558 11,838 9,433 5,681 892 11,445
Total receivables 303,568 12,835 15,749 12,386 7,145 1,225 14,660
Net assets available for benefits $11,965,900 $ 231,969 $ 321,256 $ 310,479 $ 162,733 $ 30,239 $ 154,053
FIDELITY FIDELITY FIDELITY
ADVISOR ADVISOR ADVISOR
INCOME AND GROWTH STRATEGIC
GROWTH OPPORTUNITIES OPPOTRUNITIES
ACCOUNT ACCOUNT ACCOUNT
ASSETS
Investments, at fair value:
Common stock $ 0 $ 0 $ 0
Common and commingled trust funds 5,826,443 4,222,270 3,266,740
Loans to participants 0 0 0
5,826,443 4,222,270 3,266,740
Investment contract with insurance
company, at contract value 0 0 0
Total investments 5,826,443 4,222,270 3,266,740
Receivables:
Employer contributions 35,757 53,373 23,399
Employee contributions 107,916 190,007 72,499
Total receivables 143,673 243,380 95,898
Net assets available for benefits $ 5,970,116 $ 4,465,650 $ 3,362,638
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
AS OF DECEMBER 31, 1997
ULTRAMAR
WARBURG WARBURG CIGNA DIAMOND
INVESCO TWENTIETH PINCUS PINCUS STOCK SHAMROCK
INDUSTRIAL CENTURY EMERGING INTERNATIONAL MARKET CORPORATION
INCOME ULTRA GROWTH EQUITY INDEX STOCK EMPLOYEE
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT FUND LOANS
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Common stock $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,228,212 $ 0
Common and commingled trust funds 337,543 1,286,194 2,247,883 217,651 984,688 0 0
Loans to participants 0 0 0 0 0 0 1,635,749
337,543 1,286,194 2,247,883 217,651 984,688 1,228,212 1,635,749
Investment contract with insurance
company, at contract value 0 0 0 0 0 0 0
Total investments 337,543 1,286,194 2,247,883 217,651 984,688 1,228,212 1,635,749
Receivables:
Employer contributions 3,631 22,326 13,260 28,197 20,688 14,587 0
Employee contributions 12,391 79,553 35,906 110,316 76,037 43,501 0
Total receivables 16,022 101,879 49,166 138,513 96,725 58,088 0
Net assets available for benefits $ 353,565 $ 1,388,073 $ 2,297,049 $ 356,164 $ 1,081,413 $ 1,286,300 $ 1,635,749
TOTAL
ASSETS
Investments, at fair value:
Common stock $ 2,212,900
Common and commingled trust funds 18,551,453
Loans to participants 1,635,749
22,400,102
Investment contract with insurance
company, at contract value 11,662,332
Total investments 34,062,434
Receivables:
Employer contributions 297,849
Employee contributions 1,013,063
Total receivables 1,310,912
Net assets available for benefits $35,373,346
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
CIGNA CIGNA CIGNA CIGNA CIGNA CIGNA
FIXED LIFETIME LIFETIME LIFETIME LIFETIME LIFETIME CIGNA
INCOME 20 30 40 50 60 BALANCED
ACCOUNT FUND FUND FUND FUND FUND ACCOUNT
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Common stock $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Common and commingled trust funds 0 125,057 185,945 195,241 90,286 15,251 68,379
Loans to participants 0 0 0 0 0 0 0
----------- -------- -------- -------- ------- ------- ----------
0 125,057 185,945 195,241 90,286 15,251 68,379
----------- -------- -------- -------- ------- ------- ----------
Investment contract with insurance
company, at contract value 9,858,486 0 0 0 0 0 0
----------- -------- -------- -------- ------- ------- ----------
Total investments 9,858,486 125,057 185,945 195,241 90,286 15,251 68,379
----------- -------- -------- -------- ------- ------- ----------
Receivables
Employer contributions 54,137 1,878 2,781 2,184 1,064 261 1,078
Employee contributions 152,196 5,557 7,844 6,904 4,010 740 3,018
----------- -------- -------- -------- ------- ------- ----------
Total receivables 206,333 7,435 10,625 9,088 5,074 1,001 4,096
----------- -------- -------- -------- ------- ------- ----------
Net assets available for benefits $10,064,819 $132,492 $196,570 $204,329 $95,360 $16,252 $ 72,475
=========== ======== ======== ======== ======= ======= ==========
FIDELITY FIDELITY FIDELITY
ADVISOR ADVISOR ADVISOR
INCOME AND GROWTH STRATEGIC
GROWTH OPPORTUNITIES OPPORTUNITIES
ACCOUNT ACCOUNT ACCOUNT
ASSETS
Investments, at fair value:
Common stock $ 0 $ 0 $ 0
Common and commingled trust funds 5,041,033 2,708,103 2,601,141
Loans to participants 0 0 0
---------- ---------- ----------
5,041,033 2,708,103 2,601,141
---------- ---------- ----------
Investment contract with insurance
company, at contract value 0 0 0
---------- ---------- ----------
Total investments 5,041,033 2,708,103 2,601,141
---------- ---------- ----------
Receivables
Employer contributions 26,810 23,460 17,110
Employee contributions 57,549 62,515 38,423
---------- ---------- ----------
Total receivables 84,359 85,975 55,533
---------- ---------- ----------
Net assets available for benefits $5,125,392 $2,794,078 $2,656,674
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
AS OF DECEMBER 31, 1996
WARBURG ULTRAMAR
WARBURG PINCUS CIGNA WARBURG
INVESCO TWENTIETH PINCUS INTERNA- STOCK SHAMROCK
INDUSTRIAL CENTURY EMERGING TIONAL MARKET CORPORATION
INCOME ULTRA GROWTH EQUITY INDEX STOCK EMPLOYEE
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT FUND LOANS TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Common stock $ 0 $ 0 $ 0 $ 0 $329,425 $820,876 $ 0 $ 1,150,301
Common and commingled trust funds 142,502 780,605 1,830,078 166,896 0 0 0 13,950,517
Loans to participants 0 0 0 0 0 0 922,370 922,370
-------- ---------- ---------- -------- -------- -------- ----------- -----------
142,502 780,605 1,830,078 166,896 329,425 820,876 922,370 16,023,188
-------- ---------- ---------- -------- -------- -------- ----------- -----------
Investment contract with insurance
company, at contract value 0 0 0 0 0 0 0 9,858,486
-------- ---------- ---------- -------- -------- -------- ----------- -----------
Total investments 142,502 780,605 1,830,078 166,896 329,425 820,876 922,370 25,881,674
-------- ---------- ---------- -------- -------- -------- ----------- -----------
Receivables
Employer contributions 1,569 9,497 14,107 1,865 3,561 9,965 0 171,327
Employee contributions 4,156 24,989 30,304 4,777 9,887 24,960 0 437,829
-------- ---------- ---------- -------- -------- -------- ----------- -----------
Total receivables 5,725 34,486 44,411 6,642 13,448 34,925 0 609,156
-------- ---------- ---------- -------- -------- -------- ----------- -----------
Net assets available for benefits $148,227 $ 815,091 $1,874,489 $173,538 $342,873 $855,801 $ 922,370 $26,490,830
======== ========== ========== ======== ======== ======== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
CIGNA CIGNA CIGNA CIGNA CIGNA
FIXED LIFETIME LIFETIME LIFETIME LIFETIME
INCOME 20 30 40 50
ACCOUNT FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends $ 0 $ 0 $ 0 $ 0 $ 0
Interest 756,406 419 642 1,105 77
Net appreciation (depreciation) in
fair value of investments 0 23,281 36,389 34,865 18,114
756,406 23,700 37,031 35,970 18,191
Contributions:
Employer contributions 595,204 24,067 33,581 26,408 12,638
Employee contributions 1,930,039 80,533 98,579 89,872 51,988
2,525,243 104,600 132,160 116,280 64,626
TOTAL ADDITIONS 3,281,649 128,300 169,191 152,250 82,817
Deductions from net assets attributed to:
Benefits paid to participants 1,181,905 19,805 13,541 12,792 13,796
Administrative expenses 12,384 127 242 132 56
Loan notes distributed 0 0 0 0 0
TOTAL DEDUCTIONS 1,194,289 19,932 13,783 12,924 13,852
Interfund transfers (186,279) (8,891) (30,722) (33,176) (1,592)
Net increase 1,901,081 99,477 124,686 106,150 67,373
Net assets available for benefits:
Beginning of year 10,064,819 132,492 196,570 204,329 95,360
End of year $ 11,965,900 $ 231,969 $ 321,256 $ 310,479 $ 162,733
FIDELITY FIDELITY FIDELITY
CIGNA ADVISOR ADVISOR ADVISOR
LIFETIME CIGNA INCOME AND GROWTH STRATEGIC
60 BALANCED GROWTH OPPORTUNITIES OPPORTUNITIES
FUND ACCOUNT ACCOUNT ACCOUNT ACCOUNT
Additions to net assets attributed to:
Investment income:
Dividends $ 0 $ 0 $ 0 $ 0 $ 0
Interest 87 289 14,151 6,968 10,838
Net appreciation (depreciation) in
fair value of investments 2,928 16,887 1,067,789 838,217 629,294
3,015 17,176 1,081,940 845,185 640,132
Contributions:
Employer contributions 3,289 15,129 282,993 293,138 182,225
Employee contributions 8,662 57,601 719,308 905,910 470,222
11,951 72,730 1,002,301 1,199,048 652,447
TOTAL ADDITIONS 14,966 89,906 2,084,241 2,044,233 1,292,579
Deductions from net assets attributed to:
Benefits paid to participants 1,044 14,390 742,847 329,645 330,259
Administrative expenses 15 24 4,076 1,834 2,039
Loan notes distributed 0 0 0 0 0
TOTAL DEDUCTIONS 1,059 14,414 746,923 331,479 332,298
Interfund transfers 80 6,086 (492,594) (41,182) (254,317)
Net increase 13,987 81,578 844,724 1,671,572 705,964
Net assets available for benefits:
Beginning of year 16,252 72,475 5,125,392 2,794,078 2,656,674
End of year $ 30,239 $ 154,053 $ 5,970,116 $ 4,465,650 $ 3,362,638
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1997
WARBURG WARBURG CIGNA
INVESCO TWENTIETH PINCUS PINCUS STOCK
INDUSTRIAL CENTURY EMERGING INTERNATIONAL MARKET
INCOME ULTRA GROWTH EQUITY INDEX
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends $ 0 $ 0 $ 0 $ 0 $ 0
Interest 1,042 4,043 6,725 319 1,447
Net appreciation (depreciation) in
fair value of investments 49,617 182,620 360,003 (17,000) 162,063
50,659 186,663 366,728 (16,681) 163,510
Contributions:
Employer contributions 24,923 118,776 133,323 48,106 72,560
Employee contributions 81,139 372,291 324,442 168,856 248,606
106,062 491,067 457,765 216,962 321,166
TOTAL ADDITIONS 156,721 677,730 824,493 200,281 484,676
Deductions from net assets attributed to:
Benefits paid to participants 10,117 113,840 228,649 22,071 46,598
Administrative expenses 239 752 1,281 57 407
Loan notes distributed 0 0 0 0 0
TOTAL DEDUCTIONS 10,356 114,592 229,930 22,128 47,005
Interfund transfers 58,973 9,844 (172,003) 4,473 300,869
Net increase 205,338 572,982 422,560 182,626 738,540
Net assets available for benefits:
Beginning of year 148,227 815,091 1,874,489 173,538 342,873
End of year $ 353,565 $ 1,388,073 $ 2,297,049 $ 356,164 $ 1,081,413
ULTRAMAR
DIAMOND
SHAMROCK
STOCK EMPLOYEE
FUND LOANS TOTAL
Additions to net assets attributed to:
Investment income:
Dividends $ 37,121 $ 0 $ 37,121
Interest 2,845 0 807,403
Net appreciation (depreciation) in
fair value of investments 15,684 0 3,420,751
55,650 0 4,265,275
Contributions:
Employer contributions 120,096 0 1,986,456
Employee contributions 381,038 0 5,989,086
501,134 0 7,975,542
TOTAL ADDITIONS 556,784 0 12,240,817
Deductions from net assets attributed to:
Benefits paid to participants 164,072 0 3,245,371
Administrative expenses 3,080 0 26,745
Loan notes distributed 0 86,185 86,185
TOTAL DEDUCTIONS 167,152 86,185 3,358,301
Interfund transfers 40,867 799,564 0
Net increase 430,499 713,379 8,882,516
Net assets available for benefits:
Beginning of year 855,801 922,370 26,490,830
End of year $ 1,286,300 $ 1,635,749 $35,373,346
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
CIGNA CIGNA CIGNA CIGNA CIGNA CIGNA
FIXED LIFETIME LIFETIME LIFETIME LIFETIME LIFETIME
INCOME 20 30 40 50 60
ACCOUNT FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Interest 359,757 0 0 0 0 0
Net assets transferred from NCS Plan 6,992,106 0 0 0 0 0
Net appreciation (depreciation) in
fair value of investments 0 8,993 13,229 11,819 5,876 802
------------ ------------ ------------ ------------ ------------ ------------
7,351,863 8,993 13,229 11,819 5,876 802
------------ ------------ ------------ ------------ ------------ ------------
Contributions:
Employer contributions 611,235 19,880 27,271 21,859 13,545 2,565
Employee contributions 1,760,044 64,982 81,246 92,820 47,370 9,235
------------ ------------ ------------ ------------ ------------ ------------
2,371,279 84,862 108,517 114,679 60,915 11,800
------------ ------------ ------------ ------------ ------------ ------------
TOTAL ADDITIONS 9,723,142 93,855 121,746 126,498 66,791 12,602
------------ ------------ ------------ ------------ ------------ ------------
Deductions from net assets attributed to:
Benefits paid to participants 809,634 2,383 6,012 3,075 13,827 283
Administrative expenses 10,031 79 92 96 15 14
Loan notes distributed 0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
TOTAL DEDUCTIONS 819,665 2,462 6,104 3,171 13,842 297
------------ ------------ ------------ ------------ ------------ ------------
Interfund transfers (482,220) 6,776 11,056 30,229 4,324 (368)
------------ ------------ ------------ ------------ ------------ ------------
Net increase 8,421,257 98,169 126,698 153,556 57,273 11,937
Net assets available for benefits:
Beginning of year 1,643,562 34,323 69,872 50,773 38,087 4,315
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 10,064,819 $ 132,492 $ 196,570 $ 204,329 $ 95,360 $ 16,252
============ ============ ============ ============ ============ ============
FIDELITY FIDELITY FIDELITY
ADVISOR ADVISOR ADVISOR
CIGNA INCOME AND GROWTH STRATEGIC
BALANCED GROWTH OPPORTUNITIES OPPORTUNITIES
ACCOUNT ACCOUNT ACCOUNT ACCOUNT
Additions to net assets attributed to:
Investment income:
Dividends $ 0 $ 0 $ 0 $ 0
Interest 0 0 0 0
Net assets transferred from NCS Plan 0 3,373,294 0 1,688,584
Net appreciation (depreciation) in
fair value of investments 5,113 485,530 347,290 163,167
------------ ------------ ------------ ------------
5,113 3,858,824 347,290 1,851,751
------------ ------------ ------------ ------------
Contributions:
Employer contributions 11,210 259,643 306,639 164,460
Employee contributions 36,646 634,088 833,089 415,109
------------ ------------ ------------ ------------
47,856 893,731 1,139,728 579,569
------------ ------------ ------------ ------------
TOTAL ADDITIONS 52,969 4,752,555 1,487,018 2,431,320
------------ ------------ ------------ ------------
Deductions from net assets attributed to:
Benefits paid to participants 994 271,676 106,923 106,661
Administrative expenses 17 3,124 1,225 1,818
Loan notes distributed 0 0 0 0
------------ ------------ ------------ ------------
TOTAL DEDUCTIONS 1,011 274,800 108,148 108,479
------------ ------------ ------------ ------------
Interfund transfers 3,533 (407,906) (80,687) (270,021)
------------ ------------ ------------ ------------
Net increase 55,491 4,069,849 1,298,183 2,052,820
Net assets available for benefits:
Beginning of year 16,984 1,055,543 1,495,895 603,854
------------ ------------ ------------ ------------
End of year $ 72,475 $ 5,125,392 $ 2,794,078 $ 2,656,674
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1996
ULTRAMAR
WARBURG WARBURG CIGNA DIAMOND
INVESCO TWENTIETH PINCUS PINCUS STOCK SHAMROCK
INDUSTRIAL CENTURY EMERGING INTERNATIONAL MARKET CORPORATION
INCOME ULTRA GROWTH EQUITY INDEX STOCK
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT FUND
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends $ 0 $ 0 $ 0 $ 0 $ 0 $ 3,359
Interest 0 0 0 0 0 0
Net assets transferred from NCS Plan 0 0 1,174,071 0 0 0
Net appreciation (depreciation) in
fair value of investments 13,291 54,875 140,496 7,185 27,826 (14,885)
----------- ----------- ----------- ----------- ----------- -----------
13,291 54,875 1,314,567 7,185 27,826 (11,526)
----------- ----------- ----------- ----------- ----------- -----------
Contributions:
Employer contributions 14,400 102,330 138,428 22,940 31,821 20,804
Employee contributions 41,069 303,914 342,752 90,185 99,189 52,731
----------- ----------- ----------- ----------- ----------- -----------
55,469 406,244 481,180 113,125 131,010 73,535
----------- ----------- ----------- ----------- ----------- -----------
TOTAL ADDITIONS 68,760 461,119 1,795,747 120,310 158,836 62,009
----------- ----------- ----------- ----------- ----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants 1,541 12,966 86,182 1,470 3,586 0
Administrative expenses 37 352 1,125 134 20 91
Loan notes distributed 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- -----------
TOTAL DEDUCTIONS 1,578 13,318 87,307 1,604 3,606 91
----------- ----------- ----------- ----------- ----------- -----------
Interfund transfers 26,926 142,034 (67,588) 18,567 187,643 793,883
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) 94,108 589,835 1,640,852 137,273 342,873 855,801
Net assets available for benefits:
Beginning of year 54,119 225,256 233,637 36,265 0 0
----------- ----------- ----------- ----------- ----------- -----------
End of year $ 148,227 $ 815,091 $ 1,874,489 $ 173,538 $ 342,873 $ 855,801
=========== =========== =========== =========== =========== ===========
DIAMOND
SHAMROCK
STOCK EMPLOYEE
FUND LOANS TOTAL
Additions to net assets attributed to:
Investment income:
Dividends $ 6,120 $ 0 $ 9,479
Interest 0 15,311 375,068
Net assets transferred from NCS Plan 0 0 13,228,055
Net appreciation (depreciation) in
fair value of investments 115,399 0 1,386,006
----------- ----------- -----------
121,519 15,311 14,998,608
----------- ----------- -----------
Contributions:
Employer contributions 91,335 0 1,860,365
Employee contributions 247,069 0 5,151,538
----------- ----------- -----------
338,404 0 7,011,903
----------- ----------- -----------
TOTAL ADDITIONS 459,923 15,311 22,010,511
----------- ----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants 54,864 0 1,482,077
Administrative expenses 2,002 0 20,272
Loan notes distributed 0 9,604 9,604
----------- ----------- -----------
TOTAL DEDUCTIONS 56,866 9,604 1,511,953
----------- ----------- -----------
Interfund transfers (736,313) 820,132 0
----------- ----------- -----------
Net increase (decrease) (333,256) 825,839 20,498,558
Net assets available for benefits:
Beginning of year 333,256 96,531 5,992,272
----------- ----------- -----------
End of year $ 0 $ 922,370 $26,490,830
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
Note 1 - Description of Plan:
The following description of the Ultramar Diamond Shamrock Corporation 401(k)
Retirement Savings Plan (the Plan), formerly the Diamond Shamrock, Inc. 401(k)
Retirement Savings Plan, provides only general information. Participants should
refer to the Plan document, effective January 1, 1994, for a more complete
description of the Plan's provisions. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
Company Merger
Diamond Shamrock, Inc. acquired National Convenience Stores, Incorporated (NCS)
in December 1995. Effective July 1, 1996 the National Convenience Stores,
Incorporated Profit Sharing Plan (NCS Plan) was merged into the Plan. On
December 3, 1996, Diamond Shamrock, Inc. was merged with Ultramar Corporation to
form Ultramar Diamond Shamrock Corporation ("the Merger"). Thus on that date,
Diamond Shamrock, Inc. ceased to exist as a legal entity and the Plan's name
changed to the Ultramar Diamond Shamrock Corporation 401(k) Retirement Savings
Plan.
On September 25, 1997, Ultramar Diamond Shamrock acquired Total Petroleum (North
America) Ltd.
On April 1, 1998, the Ultramar Diamond Shamrock 401(k) Retirement Savings Plan,
the Total Petroleum Tax Reduction Thrift Plan, and the Total Petroleum, Inc.
Retail Thrift Plan were merged into the Ultramar Corporation U.S. Savings
Incentive Plan. In conjunction with the merger, the Ultramar Corporation U.S.
Savings Incentive Plan was renamed the Ultramar Diamond Shamrock Corporation
401(k) Retirement Savings Plan (the New Plan). Unless otherwise noted herein,
the provisions of the New Plan will be substantially the same as those in effect
for the Plan as of December 31, 1997.
Administration
The Plan is administered by the Ultramar Diamond Shamrock Corporation
Administrative Committee (the "Administrator") which is comprised of
representatives of the Ultramar Diamond Shamrock Corporation's (the Sponsor's)
management. The trustee of the Plan is the CG Trust Company. The Plan
recordkeeper is Connecticut General Life Insurance Company.
Eligibility
The Plan is a defined contribution plan established January 1, 1994, which
covers all employees of the Sponsor who were previously employed by Diamond
Shamrock, Inc. and its subsidiaries prior to the merger with Ultramar
Corporation, who have meet certain criteria. The employees are covered if they
have been credited with at least 1,000 hours of service within 12 consecutive
months from their hire date and are twenty one years of age or older, except
employees covered by any collective bargaining agreement with the Sponsor, or a
leased employee. Since the NCS Plan did not have an age requirement, NCS
employees employed on July 1, 1996 will be allowed to participate in the Plan
upon the completion of one year of service with the age requirement being
disregarded for these specific NCS employees.
Contributions
Participants may make elective deferral contributions from 1 to 15 percent of
their eligible compensation, as defined in the Plan. In addition, participants
may also contribute amounts representing distributions from other qualified
defined benefit or contribution plans (rollover contributions). The employer
matching contributions were $.50 for every $1.00 of the participant's
contribution in 1997 and 1996 up to 6% of eligible compensation. The
contribution will be $.60 for every $1.00 up to 6% of eligible compensation in
1998. The Internal Revenue Code (IRC) establishes an annual limitation on the
amount of individual pre-tax salary deferral contributions. For 1997 and 1996,
this limit was $9,500. Participant Accounts
Each participant's account is credited with the participant's elective deferral
contributions, allocations of the Sponsor's contributions, and Plan earnings
(Note 2) less an allocation of administrative expenses.
Vesting
Participants are immediately vested in their elective deferral contributions,
rollover contributions and actual earnings thereon. Participants will be 100%
vested in employer matching contributions after five years of service. For NCS
employees, years of service with NCS count toward vesting in the Plan. NCS Plan
participants with less than three years of service as of the merger date will
vest according to the Plan's vesting schedule (100% upon completion of 5 years
of service). NCS Plan participants with three or more years of service as of the
merger date will continue to vest in accordance with the NCS vesting schedule
until completion of 5 years of service (20% after completion of 3 years of
service, 40% after completion of 4 years of service). Upon completion of 5 years
of service, the Plans vesting schedule will be applicable (100% vesting on and
after completion of 5 years of service).
Investment Options
As of December 31, 1997, the Plan had 16 investment options into which a
participant could direct contributions in increments of 1%:
CIGNA Fixed Income Account - Funds are invested in long-term fixed income
securities, such as corporate bonds and commercial mortgages. The principal
and net credit interest are fully guaranteed by Connecticut General Life
Insurance Company (CIGNA). The contracts are included in the financial
statements at contract value, which approximates fair value, as reported to
the Plan by CIGNA. Contract value represents contributions made under the
contract, plus earnings, less Plan withdrawals and administration expenses.
CIGNA Lifetime Funds - These five groups of funds are established by age of
investor. They are invested primarily in common stocks or other equity
securities and various debt instruments. The allocation of investments between
fixed income and equity securities for the five groups is generally as follows:
CIGNA Lifetime 20 Fund - 20% Fixed, 80% Equity
CIGNA Lifetime 30 Fund - 30% Fixed, 70% Equity
CIGNA Lifetime 40 Fund - 35% Fixed, 65% Equity
CIGNA Lifetime 50 Fund - 45% Fixed, 55% Equity
CIGNA Lifetime 60 Fund - 65% Fixed, 35% Equity
CIGNA Balanced Account - Funds are invested in pooled income (bonds), equity
(common stock), and cash equivalent ("money market") accounts.
Fidelity Advisor Income & Growth Account - Funds are invested in a diversified
portfolio of equity and fixed-income securities.
Fidelity Advisor Growth Opportunities Account - Funds are invested in common
stocks and securities convertible into common stocks.
Fidelity Advisor Strategic Opportunities Account - Funds are invested in stocks
of domestic and foreign companies believed to be involved in special situations,
such as technological advances or discoveries.
INVESCO Industrial Income Account - Funds are invested in shares of the INVESCO
Industrial Income Fund, a mutual fund of INVESCO Funds Group, Inc.
Twentieth Century Ultra Account - Funds are invested in common stocks of medium
sized companies.
Warburg Pincus Emerging Growth Account - Funds are invested in a portfolio of
equity securities of domestic emerging growth companies. Warburg Pincus
International Equity Account - Funds are invested in marketable equity
securities of non-United States issues. Up to 35% of the Fund's assets may be
invested in the securities of companies having their principal business
activities in the United States.
CIGNA Stock Market Index Account - Funds are invested in various investments.
This fund's investment objective is to approximate the total return of the S & P
500 Index, thereby providing investors with long-term growth of capital and
income. From time to time, this account engages in limited futures transactions.
Such transactions are recorded at market value and do not have a material impact
on the financial statements of the Plan.
Ultramar Diamond Shamrock Corporation Stock Fund - Funds are invested in the
Sponsor's publicly traded common stock.
Diamond Shamrock Stock Fund - Funds were invested in Diamond Shamrock Inc.
common stock that was publicly traded and listed on the New York Stock Exchange
prior to the December 3, 1996 merger. As a result of the merger, this Fund
balance was transferred to the Ultramar Diamond Shamrock Stock Fund effective
December 3, 1996.
Under the New Plan effective April 1, 1998, the Plan recordkeeper, trustee, and
investment manager were changed to The Vanguard Group with 11 investment options
available to participants as follows:
Vanguard Retirement Savings Trust - Funds are invested in investment contracts
issued and backed by financial institutions. It also invests in contracts backed
by high quality bonds and bond mutual funds owned by the trust.
Vanguard Bond Index Fund - Total Bond Market Portfolio - Funds are invested in a
sample of bonds from the Lehman Brothers Aggregate Bond Index, an index of U.S.
Treasury, federal agency, mortgage-backed, and high quality corporate
securities.
Vanguard Fixed Income Securities Fund - Long-Term Corporate Portfolio - Funds
are invested in a diversified group of long-term bonds issued by corporations
with strong credit ratings.
Vanguard/Wellington Fund - Funds are invested in a combination of stocks and
bonds.
Vanguard Index Trust - 500 Portfolio - Funds are invested in the 500 common
stocks that make up the Standard & Poor's 500 Composite Stock Price Index.
Vanguard/Windsor II - Funds are invested in a diversified group of undervalued
stocks of large companies. The stocks generally sell at prices below the overall
market average compared to their dividend income and future return potential.
Vanguard U.S. Growth Portfolio - Funds are invested in stocks of large, high
quality, seasoned U.S. companies with records of exceptional growth and above
average prospects for future growth.
Vanguard/PRIMECAP Fund - Funds are invested in stocks of companies with above
average prospects for continued earnings growth, strong industry positions, and
skilled management teams.
Vanguard International Growth Portfolio - Funds are invested in stocks of
seasoned companies based outside the United States.
Vanguard International Value Portfolio - Funds are invested in stocks of large
and medium-sized companies based outside of the United States.
UDSC Common Stock Fund - Funds are invested in the Sponsor's publicly traded
common stock.
Transfers
Plan participants may elect to transfer the balances in any of the investment
options on a daily basis.
Payment of Benefits
On termination of service, a participant may choose a lump-sum distribution
equal to the vested interest of his or her account or may defer receipt of such
distribution, depending on the terminated participant's vested account balance.
If the vested account balance is less than $3,500, the distribution may not be
deferred. If the vested account balance is more than $3,500, the participant may
consent to the distribution, or may defer to a later date, not later than the
normal retirement date. If the participant takes no action, the distribution
will be made at normal retirement date. The NCS Plan provided for the optional
form of payment to the participant or beneficiary of the nonforfeitable balance
of the participant's account in one hundred twenty equal monthly payments. This
optional form of payment shall be available with respect to the NCS Plan
participant account balances as of June 30, 1996.
Loans and Hardship Withdrawals
Participants may borrow up to a maximum of 50% of their total vested account
balance, not to exceed $50,000. The minimum loan amount is $1,000. Participants
are allowed one loan outstanding at any one time. The loans are secured by the
balance in the participant's account and bear interest at a rate commensurate
with local prevailing rates (i.e., the prime rate, as indicated by the Wall
Street Journal plus one percent). Principal and interest are paid ratably
through payroll deductions. With the exception of loans obtained for the
purchase of a primary residence, the maximum term for participant loans made
under the Plan is five years. The term for loans obtained for the purchase of a
primary residence is determined at the Plan Administrator's discretion.
In the event of hardship, participants may elect to withdraw a portion of their
vested account balance, subject to tax penalties and the cessation of elective
deferral contributions under certain circumstances.
Forfeitures
In the event that a participant terminates before becoming 100 percent vested in
his or her respective employer contributions, the non-vested employer
contribution amounts held in such participant's account are forfeited. If the
terminated employee does not take a distribution from the vested portion of his
or her account on the termination date, non-vested amounts remaining in the
participant's account are deemed forfeitures as of the date on which the
participant incurs five consecutive one-year breaks in service. If the
terminated employee does take a distribution from the vested portion of his or
her account at termination, the non-vested portion of his or her account is
determined to be a forfeiture immediately upon termination. Forfeited amounts
are used to reduce future employer contributions or defray Plan administrative
costs at the earliest opportunity after such amounts become available for use
under the Plan. For 1997 and 1996, forfeited amounts used to offset employer
contributions and/or administrative expenses were approximately $163,000 and
$2,900, respectively. As of December 31, 1997 and 1996, approximately $62,000
and $133,200, respectively, in unused forfeitures remained available for future
use.
Note 2 - Summary of Accounting Policies:
Method of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting.
Benefits paid to participants are recorded when actually paid.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements and disclosures. Actual
results could differ from those estimates.
<PAGE>
Risks and Uncertainties
The Plan provides for various investment options, investment securities, and, in
general, is exposed to various risks, such as interest rate, credit, and overall
market volatility risk. Due to the level of risk associated with certain
investment securities, it is reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could
materially affect participant's account balances and amounts presented in the
statement of net assets available for benefits.
Investments
Plan investments, other than the CIGNA Fixed Income Account, are stated at fair
value at year end as determined by the trustee. The CIGNA Fixed Income account
is valued at its contract value (which represents contributions made under the
contract, plus earnings, less withdrawals and administrative expenses), because
it is fully benefit responsive. The average yield and crediting interest rates
were approximately 6.8% for 1997 and 1996. The crediting interest rate is
determined semi-annually and is based upon an agreed-upon formula with the
issuer. Contract value approximates market value. The Sponsor stock held in the
Plan is valued at its quoted market price at year end.
Contributions
Employee contributions are recorded on an accrual basis and become Plan assets
at the time at which they can practicably be segregated from the general assets
of the Sponsor. In no event do such contributions become Plan assets later than
the fifteenth business day following the end of the month in which the amounts
are contributed by Plan participants or withheld from their paychecks.
Party-in-interest Transactions
The Plan invests in funds held by the trustee and the registered stock of the
Sponsor. With the exception of certain transaction fees paid directly from Plan
assets, all administrative expenses of the Plan are paid by the Plan Sponsor.
Allocation of Earnings, Gains and Losses
Earnings, gains and losses are allocated to the participant accounts daily. The
CIGNA Fixed Income Account is credited with interest daily and is guaranteed
against loss for both principal and credited interest. Plan investments other
than the CIGNA Fixed Income Account are assigned a daily unit value which
accounts for increases or decreases in market changes as well as dividends
received. Each participant's investment is valued by multiplying the daily unit
value by the number of units owned in a particular investment.
Net Appreciation (Depreciation) in Fair Value of Investments
The Plan's method of accounting for the classification of realized gains and
losses and unrealized appreciation (depreciation) of investments is in
accordance with the rules enacted by the Department of Labor. The computation of
realized gains and losses on the disposition of securities is based on the fair
value (rather than historical cost) of Plan assets at the beginning of the year
or at the time of purchase if purchased during the year, compared to the sale
price of the investment. In addition, the computation of unrealized appreciation
(depreciation) of investments is based on the difference, if any, between fair
value at the beginning of the year plus current year purchases compared to fair
value at the end of the year.
Note 3 - Plan Termination:
Although it has not expressed any intent to do so, except for the merger of the
Plan into the New Plan (as discussed in Note 1), the Sponsor has the right under
the Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of Plan termination,
participants would become 100 percent vested in their accounts.
<PAGE>
Note 4 - Reconciliation of Financial Statements to Form 5500:
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31,
1997 1996
Net assets available for benefits per the
financial statements $35,373,346 $26,490,830
Less amounts allocated to withdrawing participants 9,312 0
----------- -----------
Net assets available for benefits per the Form 5500 $35,364,034 $26,490,830
=========== ===========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31, 1997
Benefits paid to participants per the financial
statements $ 3,245,371
Add: Amounts allocated to withdrawing participants
at December 31, 1997 9,312
Less: Amounts allocated to withdrawing participants
at December 31, 1996 0
-----------
Benefits paid to participants per the Form 5500 $ 3,254,683
===========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
Note 5 - Tax Status:
The Internal Revenue Service has determined and informed the Sponsor by a letter
dated June 12, 1995, that the Plan and related trust are designed in accordance
with applicable sections of the IRC. The Plan has been amended since receiving
the determination letter. However, the Plan Administrator and the Plan's tax
counsel believe that the Plan is designed and is currently being operated in
compliance with applicable requirements of the IRC.
<PAGE>
<TABLE>
<CAPTION>
Schedule I
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
Number of
Identity of Issue Description of Investment Units/Shares Cost Current Value
----------------- ------------------------- ------------ ---- -------------
<S> <C> <C> <C>
* Connecticut General
Life Insurance Company CIGNA Fixed Income Account 361,328 units $11,662,332 $11,662,332
* Connecticut General
Life Insurance Company CIGNA Lifetime 20 Fund 13,039 units 190,679 219,134
* Connecticut General
Life Insurance Company CIGNA Lifetime 30 Fund 18,286 units 260,726 305,507
* Connecticut General
Life Insurance Company CIGNA Lifetime 40 Fund 18,405 units 254,855 298,093
* Connecticut General
Life Insurance Company CIGNA Lifetime 50 Fund 9,788 units 135,808 155,588
* Connecticut General
Life Insurance Company CIGNA Lifetime 60 Fund 1,988 units 25,705 29,014
* Connecticut General
Life Insurance Company CIGNA Balanced Account 5,432 units 118,650 139,393
* Connecticut General Fidelity Advisor Income
Life Insurance Company and Growth Account 212,054 units 4,482,953 5,826,443
* Connecticut General Fidelity Advisor Growth
Life Insurance Company Opportunities Account 68,201 units 3,011,508 4,222,270
* Connecticut General Fidelity Advisor Strategic
Life Insurance Company Opportunities Account 68,299 units 2,519,963 3,266,740
* Connecticut General INVESCO Industrial Income
Life Insurance Company Account 15,515 units 284,903 337,543
* Connecticut General Twentieth Century Ultra
Life Insurance Company Account 33,012 units 1,107,377 1,286,194
* Connecticut General Warburg Pincus Emerging
Life Insurance Company Growth Account 49,472 units 1,816,934 2,247,883
* Connecticut General Warburg Pincus International
Life Insurance Company Equity Account 9,791 units 229,358 217,651
* Connecticut General CIGNA Stock Market
Life Insurance Company Index Account 20,454 units 847,994 984,688
* Ultramar Diamond Shamrock
Corporation 401(k) Ultramar Diamond Shamrock
Retirement Savings Plan Corporation - Common Stock, 38,532 shares 1,226,954 1,228,212
$0.01 par value
* Ultramar Diamond Shamrock
Corporation 401(k) Participant Loans - Pooled
Retirement Savings Plan notes at interest rates - - 1,635,749
ranging from 7% to 10% --------- ----------
$28,176,699 $34,062,434
========== ============
* Party-in-interest to the Plan.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule II
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
December 31, 1997
Amount received
Original during reporting year
amount Unpaid
Identity and address of balance at
of obligor loan Principal Interest end of year Description of loan
- -------------------------- ---- --------- -------- ----------- --------------------
<S> <C> <C> <C> <C> <C>
Promissory note made 2/97, maturing 2/2000,
Arnitta K. Bridges, bearing interest at 9.25% per annum,
15216 N. Brentwood #7 collateralized by vested account balance
Channelview, TX 77530 $ 2,041.81 $ 458.67 $ 126.33 $ 1,583.14 under the Plan ($4,288.75 as of 12/31/97)
Promissory note made 2/97, maturing 2/2002,
James R. Brock bearing interest at 9.25% per annum,
606 Amaryllis collateralized by vested account balance under
Cedar Park, TX 78613 21,000.00 1,328.35 860.75 19,671.65 the Plan ($31,289.96 as of 12/31/97)
Promissory note made 10/96, maturing 11/2001,
Desiree R. Cole bearing interest at 9.25% per annum,
1110 Maple Creek collateralized by vested account balance under
Laporte, TX 77571 1,600.00 217.80 112.87 1,362.78 the Plan ($3,150.90 asof 12/31/97)
Promissory note made 12/96, maturing 2/98,
Andrea Espinoza bearing interest at 9.25% per annum,
323 Montrose collateralized by vested account balance under
San Antonio, TX 78223 1,200.00 801.66 53.96 398.34 the Plan ($7,179.17 as of 12/31/97)
Promissory note made 4/97, maturing 4/2002,
Pedro H. Gonzales bearing interest at 9.25% per annum,
2539 Quintana collateralized by vested account balance
San Antonio, TX 78211 5,300.00 477.28 261.64 4,822.72 under the Plan ($8,183.80 as of 12/31/97)
Promissory note made 12/96, maturing 12/97,
Bruce Hays bearing interest at 9.25% per annum,
30922 North Head Dr. collateralized by vested account balance under
Spring, TX 77386 2,467.00 2,219.61 116.76 247.39 the Plan ($8,879.08 as of 12/31/97)
Promissory note made 11/96, maturing 5/98,
Darryl E. Hopkins bearing interest at 9.25% per annum,
14721 Whitecap Blvd. #189 collateralized by vested account balance under
Corpus Christi, TX 78418 1,819.26 703.23 88.03 1,116.03 the Plan ($6,451.29 as of 12/31/97)
Promissory note made 12/96, maturing 1/2002,
Linda L. Leddy bearing interest at 9.25% per annum,
7665 Dahlen collateralized by vested account balance under
Ft. Worth, TX 76116 1,978.00 5.99 3.52 1,972.01 the Plan ($2,389.57 as of 12/31/97)
Promissory note made 7/97, maturing 8/98,
Raymond S. Libby bearing interest at 9.5% per annum,
2109 Muroc #102 collateralized by vested account balance under
Austin, TX 78757 1,200.00 338.32 29.25 861.68 the Plan ($3,397.24 as of 12/31/97)
Promissory note made 4/96, maturing 5/98,
Cynthia Maneely bearing interest at 9.25% per annum,
Route 1 Box 1693 collateralized by vested account balance under
Centerville, TX 75833 2,203.00 822.86 82.72 765.56 the Plan ($8,416.83 as of 12/31/97)
Promissory note made 2/97, maturing 2/98,
Betty Ann Masterson bearing interest at 9.25% per annum,
201 Creekview Dr. #202 collateralized by vested account balance under
Garland, TX 75043 1,000.00 701.95 43.60 298.05 the Plan ($2,591.98 as of 12/31/97)
Promissory note made 3/97, maturing 3/2002,
O. C. Metheney bearing interest at 9.25% per annum,
318 Rock Port collateralized by vested account balance under
Canyon Lake, TX 78313 4,000.00 171.58 97.64 3,828.42 the Plan ($7,434.17 as of 12/31/97)
Promissory note made 10/96, maturing 10/98,
Patricia A. Nichols bearing interest at 9.25% per annum,
13522 Knottinghill Drive collateralized by vested account balance under
Sugarland, TX 77478 2,500.00 1,153.68 160.77 1,203.23 the Plan ($17,465.46 as of 12/31/97)
Promissory note made 11/96, maturing 11/2000,
Roy T. Zepeda bearing interest at 9.25% per annum,
1028 Merrill collateralized by vested account balance under
Houston, TX 77009 4,900.00 1,000.15 381.65 3,860.85 the Plan ($11,382.99 as of 12/31/97)
Identity and address Amount overdue
of obligor Principal Interest
- -------------------------- --------- --------
Arnitta K. Bridges
15216 N. Brentwood #7
Channelview, TX 77530 $ 1,583.14 $ 15.80
James R. Brock
606 Amaryllis
Cedar Park, TX 78613 19,671.65 800.04
Desiree R. Cole
1110 Maple Creek
Laporte, TX 77571 1,362.78 32.43
Andrea Espinoza
323 Montrose
San Antonio, TX 78223 398.34 6.94
Pedro H. Gonzales
2539 Quintana
San Antonio, TX 78211 4,822.72 81.9
Bruce Hays
30922 North Head Dr.
Spring, TX 77386 247.39 1.16
Darryl E. Hopkins
14721 Whitecap Blvd. #189
Corpus Christi, TX 78418 1,116.03 33.33
Linda L. Leddy
7665 Dahlen
Ft. Worth, TX 76116 1,972.01 137.35
Raymond S. Libby
2109 Muroc #102
Austin, TX 78757 61.68 9.68
Cynthia Maneely
Route 1 Box 1693
Centerville, TX 75833 765.56 18.30
Betty Ann Masterson
201 Creekview Dr. #202
Garland, TX 75043 298.05 3.19
O. C. Metheney
318 Rock Port
Canyon Lake, TX 78313 3,828.42 180.42
Patricia A. Nichols
13522 Knottinghill Drive
Sugarland, TX 77478 1,203.23 19.64
Roy T. Zepeda
1028 Merrill
Houston, TX 77009 3,860.85 75.75
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule III
ULTRAMAR DIAMOND SHAMROCK CORPORATION 401(k) RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1997
Current
Identity of party Description of Purchase Selling Cost of value
involved asset Price Price Asset of asset Net gain
- ----------------- ------------------ ---------- ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Connecticut
General Life CIGNA Fixed
Insurance Company Income Account $3,925,751 N/A $3,925,751 $3,925,751 $ 0
Connecticut
General Life CIGNA Fixed
Insurance Company Income Account N/A $2,820,410 2,820,410 2,820,410 0
Connecticut Fidelity Advisor
General Life Income and Growth
Insurance Company Account 1,093,222 N/A 1,093,222 1,093,222 0
Connecticut Fidelity Advisor
General Life Income and Growth
Insurance Company Account N/A 1,375,601 1,136,475 1,375,601 239,126
Connecticut Fidelity Advisor
General Life Growth Opportuni-
Insurance Company ties Account 1,391,634 N/A 1,391,634 1,391,634 0
Connecticut Fidelity Advisor
General Life Growth Opportuni-
Insurance Company ties Account N/A 715,684 543,771 715,684 171,913
Connecticut Fidelity Advisor
General Life Strategic Oppor-
Insurance Company tunities Account 819,784 N/A 819,784 819,784 0
Connecticut Fidelity Advisor
General Life Strategic Oppor-
Insurance Company tunities Account N/A 783,479 666,511 783,479 116,968
NOTE: This schedule is a listing of investment transactions in the same security
which exceeded 5% of market value of the Plan as of the beginning of the Plan
year. The purchase price and selling price are net of related transaction
expenses.
</TABLE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ULTRAMAR DIAMOND SHAMROCK CORPORATION
401(k) RETIREMENT SAVINGS PLAN
DATE: June 25, 1998 /S/Penelope Viteo
Member, Employee Benefits Committee
and Vice President, Ultramar Diamond
Shamrock Corporation
<PAGE>
INDEX EXHIBIT
The following documents are exhibits to this Form 11-K:
Exhibit Sequentially
Number Document Numbered Page
- ------- -------- -------------
23-1 Consent of Arthur Andersen LLP
23-2 Consent of Price Waterhouse LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement of Ultramar Diamond Shamrock Corporation on Form S-8 (No. 333-27701
and any existing amendments thereto) of our report dated June 25, 1998,
appearing on page 4 of this Form 11-K
for the year ended December 31, 1997.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
San Antonio, Texas
June 25, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement of Ultramar Diamond Shamrock Corporation on Form S-8 (No. 333-27701
and any existing amendments thereto) of our report dated June 24, 1997, as it
pertains to the financial statements as of and for the year ended December 31,
1996 of the Ultramar Diamond Shamrock Corporation 401(k) Retirement Savings
Plan, appearing on page 4 of this Form 11-K for the year ended December 31,
1997.
/s/ PRICE WATERHOUSE LLP
Houston, Texas
June 22, 1998
