UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number 333-27701
A. UDS 401(k) Retirement Savings Plan
B. Ultramar Diamond Shamrock Corporation
6000 North Loop 1604
San Antonio, TX 78249-1112
<PAGE>
UDS 401(k) RETIREMENT SAVINGS PLAN
Index to Financial Statements and Supplemental Schedules
December 31, 1998 and 1997
Page
Report of Independent Public Accountants.................................. 3
Financial Statements:
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1998................................... 4
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1997................................... 7
Statement of Changes in Net Assets Available for Plan Benefits with
Fund Information for the Year Ended December 31, 1998................. 9
Notes to Financial Statements........................................... 15
Supplemental Schedules:
Schedule I - Line 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998...................................... 23
Schedule II - Line 27b - Schedule of Loans or Fixed Income
Obligations as of December 31, 1998.................................... 24
Schedule III - Line 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1998.................................. 25
Schedule IV - Line 27e - Schedule of Nonexempt Transactions
for the Year Ended December 31, 1998.................................. 29
Signature................................................................. 30
Consent of Independent Public Accountants................................. 31
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employee Benefits Committee of the
UDS 401(k) Retirement Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits with fund information of the UDS 401(k) Retirement Savings Plan (the
Plan) as of December 31, 1998 and 1997, and the related statement of changes in
net assets available for plan benefits with fund information for the year ended
December 31, 1998. 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
audits.
We conducted our audits 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 audits provide 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 plan benefits of the Plan as
of December 31, 1998 and 1997, and the changes in net assets available for plan
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were 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, 1998 included as Schedule I, loans or
fixed income obligations as of December 31, 1998 included as Schedule II,
reportable transactions for the year ended December 31, 1998 included as
Schedule III, and nonexempt transactions for the year ended December 31, 1998
included as Schedule IV 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 Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information in the statements of net assets available for plan
benefits and the statements of changes in net assets available for plan benefits
is presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits 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.
San Antonio, Texas
June 25, 1999
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1998
Vanguard Vanguard Vanguard Vanguard Vanguard
500 Index International International Long Term PRIMECAP
Fund Growth Fund Value Fund Corporate Fund Fund
--------- ------------- ------------- -------------- --------
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value:
Registered investment companies $20,240,168 $1,632,828 $781,985 $2,629,504 $23,299,306
Collective trust -- -- -- -- --
Self-directed investments -- -- -- -- --
Ultramar Diamond Shamrock Corporation
Common Stock -- -- -- -- --
Participant loans -- -- -- -- --
20,240,168 1,632,828 781,985 2,629,504 23,299,306
----------- ---------- ------- ---------- -----------
Contributions receivable:
Employer 91,427 6,842 4,465 10,592 102,335
Employee 310,675 19,175 21,467 40,298 354,201
----------- ---------- -------- ---------- -----------
402,102 26,017 25,932 50,890 456,536
----------- ---------- -------- ---------- -----------
Net assets available for plan benefits $20,642,270 $1,658,845 $807,917 $2,680,394 $23,755,842
=========== ========== ======== ========== ===========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
DECEMBER 31, 1998
Vanguard Vanguard Vanguard Vanguard Vanguard
Total Bond Market U.S. Growth Wellington Windsor II Money Market
Index Fund Fund Fund Fund Reserves
----------------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value:
Registered investment companies $3,752,337 $8,827,344 $30,377,371 $ 9,964,561 $ --
Collective trust -- -- -- -- --
Self-directed investments -- -- -- -- --
Ultramar Diamond Shamrock Corporation
Common Stock -- -- -- -- --
Participant loans -- -- -- -- --
3,752,337 8,827,344 30,377,371 9,964,561 --
---------- ---------- ----------- ---------- ------
Contributions receivable:
Employer 11,157 48,331 115,824 41,016 --
Employee 35,449 172,582 365,311 118,990 --
---------- ---------- ----------- ---------- ------
46,606 220,913 481,135 160,006 --
---------- ---------- ----------- ---------- ------
Net assets available for plan benefits $3,798,943 $9,048,257 $30,858,506 $10,124,567 $ --
========== ========== =========== ========== ======
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
DECEMBER 31, 1998
Ultramar
Diamond
Shamrock
Vanguard Self- Corporation
Retirement Participant Directed Common Stock
Savings Trust Loans Investments Fund Total
------------- ----------- ----------- ------------ ------
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value:
Registered investment companies $ -- $ -- $ -- $101,505,404
Collective trust 26,074,686 -- -- -- 26,074,686
Self-directed investments -- -- $64,831 -- 64,831
Ultramar Diamond Shamrock Corporation
Common Stock -- -- -- 8,460,398 8,460,398
Participant loans -- 5,055,048 -- -- 5,055,048
---------- --------- ------- --------- ------------
26,074,686 5,055,048 64,831 8,460,398 141,160,367
---------- --------- ------- ---------- ------------
Contributions receivable:
Employer 114,702 -- -- 39,083 585,774
Employee 320,559 -- -- 60,231 1,818,938
----------- ---------- ------- ---------- ------------
435,261 -- -- 99,314 2,404,712
----------- ---------- ------- ---------- ------------
Net assets available for plan benefits $26,509,947 $5,055,048 $64,831 $8,559,712 $143,565,079
=========== ========== ======= ========== ============
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1997
Participant Directed
-----------------------------------------------------------------------------------------
Vanguard
Vanguard Vanguard Long Term Vanguard Vanguard Vanguard
500 Index International Corporate U.S. Growth Wellington Money Market
Fund Value Fund Fund Fund Fund Reserves
---------- ------------- --------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments, at fair value:
Registered investment companies $13,773,480 $793,823 $1,509,450 $3,146,825 $10,737,932 $5,347,974
Collective trust -- -- -- -- -- --
Self-directed investments
Ultramar Diamond Shamrock Corporation
Common Stock -- -- -- -- -- --
Participant loans -- -- -- -- -- --
----------- -------- ---------- ---------- ----------- ----------
13,773,480 793,823 1,509,450 3,146,825 10,737,932 5,347,974
----------- -------- ---------- ---------- ----------- ----------
Contributions receivable:
Employer 26,097 2,281 3,063 7,945 19,021 16,365
Employee 95,946 9,740 11,474 30,399 70,521 47,321
----------- -------- ---------- ---------- ----------- ----------
122,043 12,021 14,537 38,344 89,542 63,686
----------- -------- ---------- ---------- ----------- -----------
Net assets available for plan benefits $13,895,523 $805,844 $1,523,987 $3,185,169 $10,827,474 $5,411,660
=========== ======== ========== ========== =========== ==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
DECEMBER 31, 1997
Participant Directed Non-Participant Directed
--------------------------- ------------------------
Vanguard Ultramar Diamond
Retirement Participant Self-Directed Shamrock Corporation
Savings Trust Loans Investments Common Stock Fund Total
------------- ----------- ------------- -------------------- -----
<S> <C> <C> <C> <C> <C>
Assets
Investments, at fair value:
Registered investment companies $ -- $ -- $ -- $ -- $35,309,484
Collective trust 2,133,200 -- -- -- 2,133,200
Self-directed investments -- -- 351,808 -- 351,808
Ultramar Diamond Shamrock Corporation
Common Stock -- -- -- 366,669 366,669
Participant loans -- 2,625,887 -- -- 2,625,887
---------- --------- -------- -------- -----------
2,133,200 2,625,887 351,808 366,669 40,787,048
---------- --------- -------- -------- ----------
Contributions receivable:
Employer 2,004 -- -- 7,889 84,665
Employee 6,830 -- -- -- 272,231
---------- ---------- -------- -------- ------------
8,834 -- -- 7,889 356,896
---------- ---------- -------- -------- -----------
Net assets available for plan benefits $2,142,034 $2,625,887 $351,808 $374,558 $41,143,944
========== ========== ======== ======== ==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
Vanguard Vanguard Vanguard Vanguard Vanguard
500 Index International International Long Term PRIMECAP
Fund Growth Fund Value Fund Corporate Fund Fund
----------- ------------- ------------- -------------- --------
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income:
Interest and dividend income $ 293,579 $ 32,746 $ 56,838 $ 158,133 $ 754,378
Net realized gain (loss) on sale of investments 1,756,669 (33,250) 113,649 (18,723) (289,605)
Net unrealized appreciation (depreciation)
in fair value of investments 1,962,415 28,130 (31,831) 14,094 2,043,013
----------- ---------- ------- ---------- -----------
4,012,663 27,626 138,656 153,504 2,507,786
----------- ---------- ------- ---------- -----------
Contributions:
Employer 555,245 53,966 24,445 56,234 619,303
Employee 1,703,628 150,947 111,269 197,090 1,657,127
----------- ---------- ------- ---------- -----------
2,258,873 204,913 135,714 253,324 2,276,430
----------- ---------- ------- ---------- -----------
Asset transfers in from other plans 318,974 1,589,056 51,422 34,622 17,681,820
----------- ---------- -------- ---------- -----------
Total additions 6,590,510 1,821,595 325,792 441,450 22,466,036
----------- ---------- ------- ---------- -----------
Deductions from net assets:
Benefits paid to participants 1,615,997 309,537 66,549 439,008 4,442,507
----------- ---------- -------- ---------- ----------
Interfund transfers 1,772,234 146,787 (257,170) 1,153,965 5,732,313
----------- ---------- ------- ---------- ----------
Net increase (decrease) in net assets
available for plan benefits 6,746,747 1,658,845 2,073 1,156,407 23,755,842
Net assets available for plan benefits:
Beginning of year 13,895,523 -- 805,844 1,523,987 --
----------- ---------- ------- ---------- -----------
End of year $20,642,270 $1,658,845 $807,917 $2,680,394 $23,755,842
=========== ========== ======== ========== ==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
Vanguard
Total Bond Vanguard Vanguard Vanguard Vanguard
Market U.S. Growth Wellington Windsor II Money Market
Index Fund Fund Fund Fund Reserves
---------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income:
Interest and dividend income $ 163,282 $ 528,568 $ 3,242,277 $ 1,016,205 $ 77,622
Net realized gain (loss) on sale of investments 20,650 506,042 570,746 (220,620) --
Net unrealized appreciation (depreciation)
in fair value of investments 40,050 797,597 (1,937,414) (656,596) --
---------- ---------- ----------- ----------- ----------
223,982 1,832,207 1,875,609 138,989 77,622
---------- ---------- ----------- ----------- ----------
Contributions:
Employer 56,232 280,062 847,372 291,680 34,779
Employee 164,224 892,690 2,221,758 860,588 86,922
---------- ---------- ----------- ----------- ----------
220,456 1,172,752 3,069,130 1,152,268 121,701
---------- ---------- ----------- ----------- ----------
Asset transfers in from other plans 3,129,317 303,666 12,450,981 7,099,578
---------- ---------- ----------- ----------- ----------
Total additions 3,573,755 3,308,625 17,395,720 8,390,835 199,323
---------- ---------- ----------- ----------- ----------
Deductions from net assets:
Benefits paid to participants 959,625 442,335 3,758,625 1,358,024 401,173
---------- ---------- ----------- ----------- ----------
Interfund transfers 1,184,813 2,996,798 6,393,937 3,091,756 (5,209,810)
---------- --------- ----------- ----------- ----------
Net increase (decrease) in net assets
available for plan benefits 3,798,943 5,863,088 20,031,032 10,124,567 (5,411,660)
Net assets available for plan benefits:
Beginning of year -- 3,185,169 10,827,474 -- 5,411,660
---------- ---------- ----------- ----------- ----------
End of year $3,798,943 $9,048,257 $30,858,506 $10,124,567 $ --
========== ========== =========== =========== ==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
CIGNA CIGNA CIGNA CIGNA CIGNA
Fixed Income Lifetime 20 Lifetime 30 Lifetime 40 Lifetime 50
Account Fund Fund Fund Fund
------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income:
Interest and dividend income $ 191,363 $ -- $ -- $ -- $ --
Net realized gain (loss) on sale of investments -- 24,112 30,431 27,165 12,942
Net unrealized appreciation (depreciation)
in fair value of investments -- -- -- -- --
----------- --------- --------- -------- --------
191,363 24,112 30,431 27,165 12,942
----------- --------- --------- -------- --------
Contributions:
Employer 153,651 7,802 9,990 8,277 3,737
Employee 356,805 15,573 22,087 20,058 10,948
----------- --------- --------- -------- --------
510,456 23,375 32,077 28,335 14,685
----------- --------- --------- -------- --------
Asset transfers in from other plans 11,965,900 231,968 321,255 310,479 162,733
----------- --------- --------- -------- --------
Total additions 12,667,719 279,455 383,763 365,979 190,360
----------- --------- --------- -------- --------
Deductions from net assets:
Benefits paid to participants 477,113 4,913 4,990 5,287 115
----------- --------- --------- -------- --------
Interfund transfers (12,190,606) (274,542) (378,773) (360,692) (190,245)
----------- --------- --------- -------- --------
Net increase (decrease) in net assets
available for plan benefits -- -- -- -- --
Net assets available for plan benefits:
Beginning of year -- -- -- -- --
----------- --------- --------- -------- --------
End of year $ -- $ -- $ -- $ -- $ --
=========== ========= ========= ======== ========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
Fidelity Fidelity Fidelity
Advisor Advisor Advisor
CIGNA CIGNA Income and Growth Strategic
Lifetime 60 Balanced Growth Opportunities Opportunities
Fund Account Account Account Account
----------- -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income:
Interest and dividend income $ -- $ -- $ -- $ -- $ --
Net realized gain (loss) on sale of investments 1,638 13,401 486,726 446,491 447,708
Net unrealized appreciation (depreciation)
in fair value of investments -- -- -- -- --
------- -------- ---------- ---------- ----------
1,638 13,401 486,726 446,491 447,708
------- -------- ---------- ---------- ----------
Contributions:
Employer 1,481 6,558 73,819 69,575 47,644
Employee 3,743 7,752 130,558 154,841 86,950
------- -------- ---------- ---------- ----------
5,224 14,310 204,377 224,416 134,594
------- -------- ---------- ---------- ----------
Asset transfers in from other plans 30,239 154,052 5,970,116 4,465,650 3,362,638
------- -------- ---------- ---------- ----------
Total additions 37,101 181,763 6,661,219 5,136,557 3,944,940
------- -------- ---------- ---------- ----------
Deductions from net assets:
Benefits paid to participants 71 1,626 163,375 49,812 79,490
------- -------- ---------- ---------- ----------
Interfund transfers (37,030) (180,137) (6,497,844) (5,086,745) (3,865,450)
------- -------- ---------- ---------- ----------
Net increase (decrease) in net assets
available for plan benefits -- -- -- -- --
Net assets available for plan benefits:
Beginning of year -- -- -- -- --
------- -------- ---------- ---------- ----------
End of year $ -- $ -- $ -- $ -- $ --
======= ======== ========== ========== ==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
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:
Investment income:
Interest and dividend income $ - $ - $ - $ - $ -
Net realized gain (loss) on sale of investments 33,057 217,680 280,040 32,175 152,344
Net unrealized appreciation (depreciation)
in fair value of investments -- -- -- -- --
-------- ---------- ---------- -------- ----------
33,057 217,680 280,040 32,175 152,344
-------- ---------- ---------- -------- ----------
Contributions:
Employer 7,112 29,092 31,110 6,046 21,611
Employee 17,235 66,047 59,163 14,049 54,099
-------- ---------- ---------- -------- ----------
24,347 95,139 90,273 20,095 75,710
-------- ---------- ---------- -------- ----------
Asset transfers in from other plans 353,566 1,388,073 2,297,049 356,165 1,081,413
-------- ---------- ---------- -------- ----------
Total additions 410,970 1,700,892 2,667,362 408,435 1,309,467
-------- ---------- ---------- -------- ----------
Deductions from net assets:
Benefits paid to participants 1,042 6,335 58,090 847 (250)
-------- ---------- ---------- -------- ----------
Interfund transfers (409,928) (1,694,557) (2,609,272) (407,588) (1,309,717)
-------- ---------- ---------- -------- ----------
Net increase (decrease) in net assets
available for plan benefits -- -- -- -- --
Net assets available for plan benefits:
Beginning of year -- -- -- -- --
-------- ---------- ---------- -------- ----------
End of year $ -- $ -- $ -- $ -- $ --
======== ========== ========== ======== ==========
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UDS 401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
Ultramar
Diamond
Shamrock
Corporation
Vanguard Common
Retirement Participant Self-Directed Stock
Savings Trust Loans Investments Fund Total
------------- ----------- ------------- ----------- ------
<S> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income:
Interest and dividend income $ 1,293,376 $ 382,915 $ 4,074 $ 316,037 8,511,393
Net realized gain (loss) on sale of investments -- -- (1,259) (637,920) 3,972,289
Net unrealized appreciation (depreciation)
in fair value of investments -- -- 6,905 (3,087,739) (821,376)
----------- ---------- -------- ---------- ------------
1,293,376 382,915 9,720 (3,409,622) 11,662,306
----------- ---------- -------- ---------- ------------
Contributions:
Employer 824,660 -- -- 297,171 4,418,654
Employee 1,994,088 -- -- 506,867 11,567,106
----------- ---------- -------- ---------- ------------
2,818,748 -- -- 804,038 15,985,760
----------- ---------- -------- ---------- ------------
Asset transfers in from other plans 8,816,490 2,710,659 -- 12,081,038 98,718,919
----------- ---------- -------- ---------- ------------
Total additions 12,928,614 3,093,574 9,720 9,475,454 126,366,985
----------- ---------- -------- ----------- ------------
Deductions from net assets:
Benefits paid to participants 6,857,098 664,413 296,697 1,481,406 23,945,850
----------- ---------- -------- ----------- ------------
Interfund transfers 18,296,397 -- -- 191,106 --
----------- ---------- -------- ----------- ------------
Net increase (decrease) in net assets
available for plan benefits 24,367,913 2,429,161 (286,977) 8,185,154 102,421,135
Net assets available for plan benefits:
Beginning of year 2,142,034 2,625,887 351,808 374,558 41,143,944
----------- ---------- -------- ----------- ------------
End of year $26,509,947 $5,055,048 $ 64,831 $ 8,559,712 $143,565,079
=========== ========== ======== =========== ============
The accompanying notes are an integral part of this financial statement.
</TABLE>
<PAGE>
UDS 401(k) RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE 1: DESCRIPTION OF PLAN
The following description of the UDS 401(k) Retirement Savings Plan (the Plan),
formerly the Ultramar Diamond Shamrock Corporation U.S. Savings Incentive Plan,
provides only general information. Participants should refer to the Plan
agreement, effective January 1, 1998, for a more complete description of the
Plan's provisions.
Plan Merger
Effective January 1, 1998, the Ultramar Diamond Shamrock 401(k) Retirement
Savings Plan was merged into the Ultramar Diamond Shamrock Corporation U.S.
Savings Incentive Plan. Effective April 1, 1998, the Total Petroleum, Inc. Tax
Reduction Thrift Plan and the Total Petroleum, Inc. Retail Thrift Plan were also
merged into the Ultramar Diamond Shamrock Corporation U.S. Savings Incentive
Plan. Effective January 1, 1998, the Ultramar Diamond Shamrock Corporation U.S.
Savings Incentive Plan was renamed the UDS 401(k)
Retirement Savings Plan.
Effective December 31, 1998, Ultramar Energy Inc. U.S. Savings Incentive Plan
merged with the Plan.
From January 1, 1998 through March 31, 1998, participants' accounts included in
the Ultramar Diamond Shamrock 401(k) Retirement Savings Plan continued to be
processed by CG Trust Company. Participant account balances were transferred
from CG Trust Company and Fidelity Management Trust Company to Vanguard
Fiduciary Trust Company's investment funds with similar investment objectives on
March 31, 1998. These transfers into the Plan are included in Asset transfers in
from other plans in the accompanying Statement of Changes in Net Assets
Available for Plan Benefits with Fund Information for the year ended December
31, 1998. Participants were allowed to transfer their account balances to other
funds within the Plan subsequent to the merger of the plans.
General
The Plan is a defined contribution plan covering all eligible employees of
Ultramar Diamond Shamrock Corporation (the Company). Eligible employees include
all non-union employees and certain union employees who have completed one year
of service and who are at least 21 years old (18 years old after December 31,
1998). The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA), as amended.
The Company is the Sponsor of the Plan. The Plan is administered by the Employee
Benefits Committee (the Administrator) which consists of at least three members
appointed by the Chief Executive Officer of the Company. The trustee and
recordkeeper of the Plan is Vanguard Fiduciary Trust Company.
<PAGE>
Contributions
Participants can contribute from 1% to 15% of their compensation, as defined in
the Plan. In addition, rollover contributions may be made by any employee,
including any employee who is not yet eligible to participate in the Plan.
Effective January 1, 1998, the Company will contribute $0.60 for every $1.00 of
the participant's contribution up to 6% of compensation. The Company matching
contributions are invested in the same investment fund(s) and in the same
proportion as the participant's current investment options.
The Company may make discretionary Company contributions to the Plan for a Plan
year, subject to certain limitations. For the years ended December 31, 1998 and
1997, the Company did not make additional discretionary Company contributions to
the Plan.
The Internal Revenue Code (IRC) establishes an annual limitation on the amount
of individual pre-tax salary deferral contributions. For 1998 and 1997, this
limit was $10,000 and $9,500, respectively.
Participant Accounts
Each participant's account is valued on a daily basis and is equal to the
participant's and the Company's contributions plus investment income less
benefits paid to the participant, loans, and administrative expenses of the
Plan.
Vesting
Participants vest immediately in their contributions, rollover contributions and
actual earnings thereon. Participants become 100% vested in Company matching and
discretionary contributions and related earnings after five years of service.
However, a participant will be vested in 100% of his account balance upon his
death, disability, attainment of Normal Retirement Age, as defined in the Plan,
termination or partial termination of the Plan or a change in control, as
defined in the Plan.
A participant who as of December 31, 1997 participated in the Ultramar Diamond
Shamrock Corporation U.S. Savings Incentive Plan is 100% vested in his account
balance under the Plan. A participant who as of March 31, 1998 participated in
the Total Petroleum, Inc. Tax Reduction Thrift Plan or the Total Petroleum, Inc.
Retail Thrift Plan is 100% vested in his account balance under the Plan. A
participant who as of December 31, 1997 participated in the Ultramar Diamond
Shamrock Corporation 401(k) Retirement Savings Plan and in the National
Convenience Stores, Incorporated Profit Sharing Plan immediately before the
merger of these two plans, with three or more years of vesting service as of
July 1, 1996, is 100% vested in his account balance. A participant who as of
December 31, 1998 participated in the Ultramar Energy Inc. U.S. Savings Plan is
vested 100% in his account balance.
<PAGE>
Investment Options
During the year ended December 31, 1998, participants were able to allocate
their contributions and transfer existing account balances among the following
investment options:
-- Vanguard 500 Index Fund seeks to provide long-term growth of capital and
income from dividends by holding all of the 500 stocks that make up the
unmanaged Standard & Poor's 500 Composite Stock Price Index, a widely
recognized benchmark of U.S. stock market performance.
-- Vanguard International Growth Fund seeks to provide long-term growth of
capital by investing in stocks of high-quality, seasoned companies based
outside the United States. Stocks are selected from more than 15
countries.
-- Vanguard International Value Fund seeks to provide long-term growth of
capital and income by investing in a diversified group of large and
medium-sized companies based outside of the United States.
-- Vanguard Long-Term Corporate Fund seeks to provide a high and sustainable
level of interest income by investing primarily in a diversified group of
long-term bonds issued by corporations with strong credit ratings.
-- Vanguard PRIMECAP Fund seeks long-term growth of capital by investing in
stocks of companies with above-average prospects for continued earnings
growth, strong industry positions, and skilled management teams.
-- Vanguard Total Bond Market Index Fund seeks to provide a high level of
interest income by attempting to match the performance of the unmanaged
Lehman Brothers Aggregate Bond Index, which is a widely recognized
measure of the entire taxable U.S. bond market.
-- Vanguard U.S. Growth Fund seeks to provide long-term growth of capital by
investing in large, high-quality, seasoned U.S. companies with records of
exceptional growth and above-average prospects for future growth.
-- Vanguard Wellington Fund seeks to provide income and long-term growth of
capital without undue risk to capital by investing about 65% of its
assets in stocks and the remaining 35% in bonds.
-- Vanguard Windsor II Fund seeks to provide long-term growth of capital and
income from dividends by investing in a diversified group of out-of-favor
stocks of large-capitalization companies. The stocks generally sell at
prices below the overall market average compared to their dividend income
and future return potential.
-- Vanguard Money Market Reserves seeks to provide high income and a stable
share price of $1 by investing in short-term, high-quality money market
instruments issued by financial institutions, non-financial corporations,
the U.S.
government, and federal agencies.
-- Vanguard Retirement Savings Trust seeks stability of principal and a high
level of current income consistent with a two- to three-year average
maturity. The trust is a tax-exempt collective trust invested primarily
in investment contracts issued by insurance companies and commercial
banks, and similar types of fixed-principal investments. The trust
intends to maintain a constant net asset value of $1.00 per share. The
contracts are fully benefit responsive and are recorded at fair value.
The average yield for the year ended December 31, 1998 was 6.15%. The
crediting interest rate as of December 31, 1998 and 1997 was 5.93% and
6.23%, respectively.
-- Self-Directed Investments are used to account for participants'
self-directed investments attributable to rollover contributions from
designated prior plans. Current participants, excluding those
participants from the prior plan with this provision, are not able to
contribute to self-directed investments as an investment election.
-- Ultramar Diamond Shamrock Corporation Common Stock Fund seeks to provide
the potential for long-term growth through increases in the value of the
stock and reinvestment of its dividends. This fund is a unitized fund
that includes stock and cash. The fund had 883,378 units and 12,230 units
at December 31, 1998 and 1997, respectively. Net asset value at December
31, 1998 and 1997 was $9.58 and $12.65, respectively.
From January 1, 1998 through March 31, 1998, participants previously in the
Ultramar Diamond Shamrock 401(k) Retirement Savings Plan allocated their
contributions among the Ultramar Diamond Shamrock Corporation Common Stock Fund
and the following investment options:
-- CIGNA Fixed Income Account invests 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 invests in pooled income (bonds), equity (common
stock), and cash equivalent (money market) accounts.
-- Fidelity Advisor Income & Growth Account invests in a diversified
portfolio of equity and fixed-income securities.
-- Fidelity Advisor Growth Opportunities Account invests in common stocks
and securities convertible into common stocks.
-- Fidelity Advisor Strategic Opportunities Account invests in stocks of
domestic and foreign companies believed to be involved in special
situations, such as technological advances or discoveries.
-- INVESCO Industrial Income Account invests in shares of the INVESCO
Industrial Income Fund, a mutual fund of INVESCO Funds Group, Inc.
-- Twentieth Century Ultra Account invests in common stocks of medium sized
companies.
-- Warburg Pincus Emerging Growth Account invests in a portfolio of equity
securities of domestic emerging growth companies.
-- Warburg Pincus International Equity Account invests 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 invests 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.
Effective January 1, 1999, the following investment option will be available to
participants:
-- Vanguard Extended Market Index Fund seeks long-term growth of capital.
Funds are invested in a large sample of stocks that matches certain
characteristics of the Wilshire 4500 Equity Index.
Transfers
Plan participants can transfer the balances in any of the investment options on
a daily basis.
Participant Loans
Participants may borrow from their vested account balance a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50% of their vested account
balance. The participant may elect a repayment term of up to five years for
general purpose loans or up to 10 years for the purchase of a primary residence.
The loan is secured by a lien on the participant's vested account balance and
bears interest at a reasonable rate as determined by the Administrator.
Principal and interest is repaid through payroll deductions. A participant can
have only one loan outstanding at any time and must wait three months after
paying off a loan before initiating a new loan.
Payment of Benefits
On termination of service, a participant can choose a lump-sum distribution
equal to the vested interest of his or her account or can defer receipt of such
distribution, depending on the terminated participant's vested account balance.
If the vested account balance is less than $5,000, the distribution can not be
deferred. If the vested account balance is more than $5,000, the participant can
consent to the distribution, or can defer to a later date, not later than the
normal retirement date. If the participant takes no action, the distribution is
made at normal retirement date. Optional forms of payments are available to
certain participants as described in the Plan agreement.
In the event of hardship, participants can 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 a participant terminates before becoming 100% vested in the
employer contributions, the nonvested employer contribution amounts held in the
participant's account will be forfeited. If the terminated participant receives
a distribution from the vested portion of his account, the nonvested amounts
remaining in the participant's account are treated as a forfeiture. Forfeited
amounts are used to reduce future employer contributions or defray Plan
administrative costs. During 1998, employer contributions were reduced by
approximately $82,000 from forfeited nonvested accounts. At December 31, 1998
and 1997, approximately $159,000 and $62,000, respectively, in unused
forfeitures were available for future use under the Plan.
NOTE 2: SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting.
Benefits paid to participants are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, and changes therein, and
disclosure of contingent assets and liabilities. Actual results could differ
from those estimates.
Investment Valuation and Income Recognition
Investments in registered investment companies are valued at quoted market
prices which represent the net asset value of shares held by the Plan as of the
balance sheet date. The Plan's investment in the collective trust is valued at
fair value. Self-directed investments are valued at quoted market prices as of
the balance sheet date. Participant loans are valued at cost which approximates
fair value. The Company's common stock is valued at its quoted market price as
of the balance sheet date.
Purchases and sales of investments are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. Capital gain distributions are included in interest and
dividend income.
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 sale of investments 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. 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.
Plan Expenses
The Company pays the administrative expenses of the Plan and provides certain
other services at no cost to the Plan.
Risks and Uncertainties
The Plan's investments, in general, are 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 value of investment securities will occur in the near term
and that such changes could materially affect participants' account balances and
amounts presented in the statements of net assets available for plan benefits.
NOTE 3: PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue or reduce its contributions and to terminate the
Plan at any time subject to the provisions of ERISA.
NOTE 4: TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated September 22, 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 Company believes that the Plan
continues to qualify and to operate as designated.
<PAGE>
NOTE 5: PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of registered investment companies and a
trust managed by an affiliate of the Trustee and shares of common stock of the
Company. Transactions in these investments qualify as party-in-interest
transactions.
NOTE 6: RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1998 1997
---- ----
<S> <C> <C>
Net assets available for plan benefits per the financial statements $143,565,079 $41,143,944
Amounts allocated to withdrawing participants (1,151,538) (75,207)
------------ ------------
Net assets available for plan benefits per the Form 5500 $142,413,541 $41,068,737
============ ===========
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
<S> <C>
Benefits paid to participants per the financial statements $23,945,850
Add: Amounts allocated to withdrawing participants at end of year 1,151,538
Less: Amounts allocated to withdrawing participants at beginning of period (75,207)
------------
Benefits paid to participants per the Form 5500 $25,022,181
===========
</TABLE>
<PAGE>
NOTE 7: NONEXEMPT TRANSACTION
For the year ended December 31, 1998, the Company failed to remit participant
contributions totaling $1,117,220 to the Plan within the required period as
specified by applicable Department of Labor regulations. This resulted in a
prohibited extension of credit to the Company. This transaction represents a
nonexempt transaction.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
UDS 401(k) RETIREMENT SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
Current
Identity of Issue Description of Issue Cost Value
----------------- -------------------- ---- --------
<S> <C> <C> <C>
* The Vanguard Group Vanguard 500 Index Fund $ 18,277,752 $ 20,240,168
* The Vanguard Group Vanguard International Growth Fund 1,604,698 1,632,828
* The Vanguard Group Vanguard International Value Fund 813,817 781,985
* The Vanguard Group Vanguard Long Term Corporate Fund 2,615,410 2,629,504
* The Vanguard Group Vanguard PRIMECAP Fund 21,256,293 23,299,306
* The Vanguard Group Vanguard Total Bond Market Index Fund 3,712,287 3,752,337
* The Vanguard Group Vanguard U.S. Growth Fund 8,029,758 8,827,344
* The Vanguard Group Vanguard Wellington Fund 32,314,785 30,377,371
* The Vanguard Group Vanguard Windsor II Fund 10,621,157 9,964,561
* The Vanguard Group Vanguard Retirement Savings Trust 26,074,686 26,074,686
* Ultramar Diamond Ultramar Diamond Shamrock Corporation
Shamrock Corporation Common Stock Fund 11,608,847 8,460,398
* UDS 401(k) Retirement Participant loans -
Savings Plan Interest rates range from 7% - 11% - 5,055,048
Self-directed investments:
Salomon Smith Barney Inc. Concert Social Awareness Fund Class A ** 17,651
Salomon Smith Barney Inc. Smith Barney Money Funds 6,924 6,924
Salomon Smith Barney Inc. Smith Barney Appreciation Fund ** 16,078
Salomon Smith Barney Inc. Government Backed Trust CL T-1 ** 8,065
Salomon Smith Barney Inc. Government Backed Trust CTF ** 7,134
Salomon Smith Barney Inc. Government Trust CTF CL 3-C-REG 8,979
---------------- ----------------
**
6,924 64,831
---------------- ---------------
$136,936,414 $141,160,367
================ ============
* Parties-in-interest to the Plan.
** Historical cost information is not available.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
UDS 401(k) RETIREMENT SAVINGS PLAN
Line 27b - Schedule of Loans or Fixed Income Obligations
December 31, 1998
Amount Received During Unpaid
Original Reporting Year Balance at Amount Overdue
Identity and Amount -------------- End of --------------
Address of Obligor of Loan Principal Interest Year Description of Loan Principal Interest
------------------ ------- --------- -------- ---- ------------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
David J. Biederstadt Loan made 4/8/93
354 E. 32nd St. bears interest at
Loveland, CO 80538 $ 3,300.00 $ 0.00 $ 0.00 $ 101.49 7.00% per year. $ 101.49 $ 0.59
Charlotte I. Looper Loan made 7/21/95
8728 Rambling Road bears interest at
Oklahoma City, OK 73132 8,000.00 0.00 0.00 5,872.68 10.00% per year. 1,126.40 403.42
Patricia Hutchinson Loan made 9/25/98
207 Morningside bears interest at
League City, TX 77573 2,156.97 0.00 0.00 2,156.97 10.50% per year. 76.66 51.50
Charles R. Sayles Loan made 12/12/96
PO Box 288 bears interest at
Azle, TX 76098 12,556.00 0.00 0.00 10,212.80 9.25% per year. 1,906.45 711.35
James Satterfield Loan made 9/9/94
RR19 Box 2675 bears interest at
Texarkana, AR 71854 8,000.00 766.43 18.57 194.55 8.25% per year. 194.55 1.34
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III
UDS 401(k) RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions **
Year Ended December 31, 1998
Current Value
Historical of Asset on Net
Identity of Purchase Selling Cost of Transaction Gain
Party Involved Description of Asset Price Price Asset Date (Loss)
-------------- -------------------- ----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Single Transactions:
The Vanguard Group * Vanguard PRIMECAP
Fund $25,455,178 N/A $25,455,178 $25,455,178 N/A
The Vanguard Group * Vanguard Total Bond
Market Index Fund 3,129,316 N/A 3,129,316 3,129,316 N/A
The Vanguard Group * Vanguard Wellington
Fund 20,342,847 N/A 20,342,847 20,342,847 N/A
The Vanguard Group * Vanguard Wellington
Fund 2,726,483 N/A 2,726,483 2,726,483 N/A
The Vanguard Group * Vanguard Windsor II
Fund 10,958,769 N/A 10,958,769 10,958,769 N/A
The Vanguard Group * Vanguard Retirement
Savings Trust 20,991,610 N/A 20,991,610 20,991,610 N/A
Connecticut General Fidelity Advisor Income
Life Insurance And Growth Account N/A $6,485,360 4,721,887 6,485,360 $1,763,473
Company *
Connecticut General Fidelity Advisor Growth
Life Insurance Opportunities Account N/A 5,150,389 3,532,036 5,150,389 1,618,353
Company *
Connecticut General Fidelity Advisor
Life Insurance Strategic N/A 3,859,191 2,710,482 3,859,191 1,148,709
Company * Opportunities Account
Connecticut General Warburg Pincus
Life Insurance Emerging Growth
Company * Account N/A 2,622,969 1,954,765 2,622,969 668,204
Ultramar Diamond Ultramar Diamond
Shamrock Shamrock Corporation
Corporation* Stock Fund 12,208,652 N/A 12,208,652 12,208,652 N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III (Continued)
UDS 401(k) RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions **
Year Ended December 31, 1998
Current Value
Historical of Asset on Net
Identify of Purchase Selling Cost of Transaction Gain
Party Involved Description of Asset Price Price Asset Date (Loss)
-------------- -------------------- ----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions:
The Vanguard Group * Vanguard 500 Index Fund $14,024,669 N/A $14,024,669 $14,024,669 N/A
The Vanguard Group * Vanguard 500 Index Fund N/A $11,277,065 10,826,270 11,277,065 $450,795
The Vanguard Group * Vanguard International
Growth Fund 2,236,731 N/A 2,236,731 2,236,731 N/A
The Vanguard Group * Vanguard International
Growth Fund N/A 598,783 631,949 598,783 (33,166)
The Vanguard Group * Vanguard Long-Term
Corporate Fund 3,279,245 N/A 3,279,245 3,279,245 N/A
The Vanguard Group * Vanguard Long-Term
Corporate Fund N/A 2,154,562 2,148,682 2,154,562 5,880
The Vanguard Group * Vanguard PRIMECAP
Fund 29,147,914 N/A 29,147,914 29,147,914 N/A
The Vanguard Group * Vanguard PRIMECAP
Fund N/A 7,602,016 7,888,937 7,602,016 (286,921)
The Vanguard Group * Vanguard Total Bond
Market Index Fund 6,342,300 N/A 6,342,300 6,342,300 N/A
The Vanguard Group * Vanguard Total Bond
Market Index Fund N/A 2,650,663 2,630,528 2,650,663 20,135
The Vanguard Group * Vanguard U.S. Growth
Fund 7,284,159 N/A 7,284,159 7,284,159 N/A
The Vanguard Group * Vanguard U.S. Growth
Fund N/A 2,907,279 2,803,903 2,907,279 103,376
The Vanguard Group * Vanguard Wellington
Fund 28,852,823 N/A 28,852,823 28,852,823 N/A
The Vanguard Group * Vanguard Wellington
Fund N/A 7,846,716 7,883,926 7,846,716 (37,210)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III (Continued)
UDS 401(k) RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions **
Year Ended December 31, 1998
Current Value
Historical of Asset on Net
Identity of Purchase Selling Cost of Transaction Gain
Party Involved Description of Asset Price Price Asset Date (Loss)
-------------- -------------------- ----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions (continued):
The Vanguard Group * Vanguard Windsor II
Fund $14,037,242 N/A $14,037,242 $14,037,242 N/A
The Vanguard Group * Vanguard Windsor II
Fund N/A $3,195,465 3,414,388 3,195,465 $ (218,923)
The Vanguard Group * Vanguard Money
Market Reserves 1,889,564 N/A 1,889,564 1,889,564 N/A
The Vanguard Group * Vanguard Money
Market Reserves N/A 7,237,538 7,237,538 7,237,538 -
The Vanguard Group * Vanguard Retirement
Savings Trust 40,539,198 N/A 40,539,198 40,539,198 N/A
The Vanguard Group * Vanguard Retirement
Savings Trust N/A 16,597,712 16,597,712 16,597,712 -
Connecticut General Fidelity Advisor Income
Life Insurance and Growth Account 439,552 N/A 439,552 439,552 N/A
Company *
Connecticut General Fidelity Advisor Income
Life Insurance and Growth Account N/A 6,752,721 4,922,922 6,752,721 1,829,799
Company *
Connecticut General Fidelity Advisor Growth
Life Insurance Opportunities Account 618,840 N/A 618,840 618,840 N/A
Company *
Connecticut General Fidelity Advisor Growth
Life Insurance Opportunities Account N/A 5,287,601 3,630,478 5,287,601 1,657,123
Company *
Connecticut General Fidelity Advisor
Life Insurance Strategic 330,844 N/A 330,844 330,844 N/A
Company * Opportunities Account
Connecticut General Fidelity Advisor
Life Insurance Strategic N/A 4,045,292 2,851,598 4,045,292 1,193,694
Company * Opportunities Account
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE III (Continued)
UDS 401(k) RETIREMENT SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions **
Year Ended December 31, 1998
Current Value
Historical of Asset on Net
Identity of Purchase Selling Cost of Transaction Gain
Party Involved Description of Asset Price Price Asset Date (Loss)
-------------- -------------------- ----- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions (continued):
Connecticut General Warburg Pincus
Life Insurance Emerging Growth
Company * Account $ 321,463 N/A $ 321,463 $ 321,463 N/A
Connecticut General Warburg Pincus
Life Insurance Emerging Growth
Company * Account N/A $2,849,386 2,138,517 2,849,386 $710,869
Ultramar Diamond Ultramar Diamond
Shamrock Shamrock Corporation
Corporation * Stock Fund 2,506,905 N/A 2,506,905 2,506,905 N/A
Ultramar Diamond Ultramar Diamond
Shamrock Shamrock Corporation
Corporation * Stock Fund N/A 2,776,343 3,437,021 2,776,343 (660,678)
* Represents a party-in-interest.
** Single transaction or a series of transactions in excess of 5% of the
current value of the Plan's assets as of the beginning of the plan year as
defined in 29 CFR 2520.103-6 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under ERISA. The purchase price
and selling price are net of related transaction expense.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE IV
UDS 401(k) RETIREMENT SAVINGS PLAN
Line 27e - Schedule of Nonexempt Transactions
Year Ended December 31, 1998
Relationship to plan,
Identity of employer or other
party involved party-in-interest Description of transactions Amount Interest
-------------- --------------------- --------------------------- ------ --------
<S> <C> <C> <C> <C>
Ultramar Diamond Employer Participant contributions were
Shamrock Corporation not remitted to the Plan in a
timely manner:
Deemed loan: June 20, 1998
Remitted: June 23, 1998 $1,117,220 $979
</TABLE>
<PAGE>
SIGNATURE
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 as of June 25, 1999.
UDS 401(k) Retirement Savings Plan
By: /s/ Penelope Viteo
Penelope Viteo
Member, Employee Benefits Committee and
Vice President, Ultramar Diamond Shamrock Corporation
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports dated June 25, 1999 included in this Form 11-K, into the Company's
previously filed Registration Statement File No. 333-27701.
/s/ ARTHUR ANDERSEN LLP
San Antonio, Texas
June 25, 1999
