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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 7, 1997
CLARK USA, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13514 43-1495734
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
8182 Maryland Avenue 63105-3721
St. Louis, Missouri (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including are code: (314) 854-9696
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Item 4. Changes in Registrant's Certifying Accountant
Effective April 7, 1997, Clark USA, Inc. (the "Company") dismissed
Coopers & Lybrand L.L.P ("C&L") as its independent accountant previously
engaged to audit its financial statements. On April 8, 1997, the
Company engaged Price Waterhouse LLP ("PW") as its independent
accountant to audit its financial statements. C&L's report on the
Company's financial statements for the years ended December 31, 1995 and
1996 did not contain an adverse opinion or a disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope, or
accounting principles. The decision to change independent accountants
was approved by the Company's Board of Directors.
The following disagreements as contemplated by Item 304 (a)(1)(iv)
of Regulation S-K occurred during the two most recent fiscal years and
subsequent interim periods preceding the dismissal of C&L:
a) In December 1995, the Company acquired an advance crude oil purchase
receivable from a subsidiary of Occidental Petroleum (the "Oxy
Receivable"). In connection with its audit for the year ended
December 31, 1995, C&L required the Company to obtain an independent
appraisal of the receivable. The Company believed such an
independent appraisal was unnecessary due to readily available
alternative valuation methods and the arms-length nature of the
transaction. However, the Company obtained the required independent
appraisal which confirmed the Company's original valuation. The Oxy
Receivable was sold in October 1996 for a gain of $10.9 million.
b) In December 1995, the Company filed a registration statement for its
10 7/8% Notes with the Securities and Exchange Commission. As a
result of a review of this registration statement by the Commission,
the Company was required to change the accounting treatment for the
Oxy Receivable from the pro forma accounting information presented in
a private placement offering circular. The economic substance of the
Oxy Receivable was not impacted by this change. However, C&L
required the Company to disclose the Company's evaluation of the
impact of this accounting change. The Company provided disclosure
which indicated the Company believed the different accounting
treatment would not have a material adverse effect on the Company's
financial position or results of operations.
c) During 1996, the Company accounted for fixed purchase and sale
commitments on a mark to market basis for interim reporting. C&L
assisted the Company in evaluating the use of this method in 1996,
but determined that it was not appropriate. The Company ultimately
agreed with this conclusion and as a result, did not utilize this
method in the financial statements of the Company for the year ended
December 31, 1996. The utilization of this method for interim
reporting did not result in a material impact on the consolidated
financial statements for any interim period.
d) During 1996, the Company evaluated its ability to realize its
alternative minimum tax ("AMT") credit carryforward. For the year
ended December 31, 1996, C&L concluded that a valuation reserve
against this AMT credit carryforward was required and the Company
ultimately concurred.
Neither the Board of Directors nor a subcommittee of the Board of
Directors discussed these disagreements with C&L. C&L has been
authorized to fully respond to any inquiries from PW regarding these
matters.
During the years ended December 31, 1995 and 1996 and subsequent
interim periods, there were no reportable events as defined under Item
304 (a)(1)(v) of Regulation S-K and the Company did not consult with PW
regarding the application of accounting principles to a specified
transaction, or regarding the type of audit opinion that might be
rendered on the Company's financial statements or any disagreements as
defined in Item 304 (a)(2)(i) and Item 304 (a)(2)(ii) of Regulation S-K,
except as noted below:
1. PW was not consulted regarding the need for an independent appraisal
of the Oxy Receivable as discussed in a) above. The Company
requested PW to gather information regarding industry practice for
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the accounting for transactions similar to the Oxy Receivable. The
Company did not request PW to express an opinion and PW was not
engaged to, and did not provide an opinion on the accounting for this
transaction. PW shared publicly available information with the
Company regarding certain significant factors considered by another
company in evaluating the accounting treatment for a transaction with
certain similar features.
2. The Company requested PW to gather information regarding industry
practice for the accounting for fixed commitments as discussed in c)
above. The Company did not request PW to express an opinion and PW
was not engaged to, and did not provide an opinion on the accounting
for fixed commitments. After conducting an industry survey, PW
advised the Company that no companies in the survey were utilizing
this accounting treatment.
PW was given the opportunity to review the disclosures in Item 4 of this
Form 8-K. The letter from C&L will be filed as an amendment to this
Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Dated: April 14, 1997 CLARK USA, INC.
By: /s/ Dennis R. Eichholz
Dennis R. Eichholz
Controller and Treasurer
