UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-13514
PREMCOR USA INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1495734
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8182 Maryland Avenue 63105-3721
St. Louis, Missouri (Zip Code)
(Address of principal executive offices)
CLARK USA, INC.
(Former name of registrant)
Registrant's telephone number, including area code (314) 854-9696
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes (X) No ( )
Number of shares of registrant's common stock, $.01 par value,
outstanding as of May 8, 2000, 100, all of which were owned by Premcor Inc.
<PAGE>1
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors of
Premcor USA Inc.:
We have reviewed the accompanying consolidated balance sheet of Premcor USA
Inc. and Subsidiaries (the "Company") as of March 31, 2000 and the related
consolidated statements of operations and cash flows for the three-month period
ended March 31, 1999 and 2000. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with auditing standards generally accepted in the
United States of America, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of the
Company as of December 31, 1999, and the related consolidated statements of
operations, stockholder's equity, and cash flows for the year then ended (not
presented herein); and in our report dated February 16, 2000, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying consolidated balance
sheet as of December 31, 1999 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
Deloitte & Touche LLP
St. Louis, Missouri
May 8, 2000
<PAGE>2
PREMCOR USA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share data)
<TABLE>
Reference December 31, March 31,
Note 1999 2000
--------- ------------ ----------
<S> <C> <C> <C>
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 306.2 $ 253.1
Short-term investments 1.4 1.4
Accounts receivable 197.6 208.6
Inventories 3 252.2 317.1
Prepaid expenses and other 37.2 35.7
------------ -----------
Total current assets 794.6 815.9
PROPERTY, PLANT, AND EQUIPMENT, NET 616.8 629.9
OTHER ASSETS 4, 5 121.6 116.3
------------ -----------
$ 1,533.0 $ 1,562.1
============ ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 335.0 $ 380.2
Accrued expenses and other 5 75.8 74.5
Accrued taxes other than income 39.5 40.0
------------ -----------
Total current liabilities 450.3 494.7
LONG-TERM DEBT 969.9 970.0
OTHER LONG-TERM LIABILITIES 64.8 64.8
COMMITMENTS AND CONTINGENCIES 8 -- --
EXCHANGEABLE PREFERRED STOCK
($.01 par value per share; 250,000 shares
authorized; 78,789 shares issued) 81.1 83.3
COMMON STOCKHOLDER'S EQUITY:
Common stock ($.01 par value per share;
100 shares authorized and 100 shares
issued and outstanding) -- --
Paid-in capital 206.4 206.4
Retained earnings (deficit) (239.5) (257.1)
------------ ----------
Total common stockholder's equity (33.1) (50.7)
(deficit) ------------ ----------
$ 1,533.0 $ 1,562.1
============ ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>3
<TABLE>
PREMCOR USA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, dollars in millions)
For the Three Months
Reference Ended March 31,
--------------------
Note 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
NET SALES AND OPERATING REVENUES $ 897.2 $ 1,559.4
EXPENSES:
Cost of sales (819.6) (1,424.1)
Operating expenses (97.1) (104.2)
General and administrative expenses (13.2) (10.4)
Depreciation (8.8) (8.7)
Amortization 4 (5.1) (7.5)
Inventory recovery to market 3 96.2 --
---------- ---------
(847.6) (1,554.9)
---------- ---------
OPERATING INCOME 49.6 4.5
Interest and finance costs, net 4, 5 (21.1) (19.6)
---------- ---------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 28.5 (15.1)
Income tax benefit (provision) 6 1.1 (0.2)
---------- ---------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 29.6 (15.3)
Discontinued operations, net of income tax provision
of $1.1 1.9 --
---------- ---------
NET EARNINGS (LOSS) 31.5 (15.3)
Preferred stock dividends (2.0) (2.3)
---------- ---------
NET EARNINGS (LOSS) AVAILABLE TO COMMON STOCK $ 29.5 $ (17.6)
========== =========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>4
<TABLE>
PREMCOR USA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, dollars in millions)
For the Three Months
Ended March 31,
--------------------
1999 2000
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 31.5 $ (15.3)
Discontinued operations (1.9) --
Adjustments:
Depreciation 8.8 8.7
Amortization 6.6 9.6
Inventory recovery to market (96.2) --
Other, net (0.2) (0.4)
Cash provided by (reinvested in) working capital -
Accounts receivable, prepaid expenses and
other (7.7) (9.1)
Inventories 86.4 (64.9)
Accounts payable, accrued expenses, taxes other
than income and other (5.8) 44.9
--------- ---------
Net cash provided by (used in) operating
activities of continuing operations 21.5 (26.5)
Net cash provided by operating activities
of discontinued operations 1.2 --
--------- ---------
Net cash provided by (used in) operating
activities 22.7 (26.5)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property, plant and equipment (40.4) (22.1)
Expenditures for turnaround (24.3) (2.2)
Proceeds from sale of assets -- 0.3
Purchases of short-term investments (3.2) (1.5)
Sales and maturities of short-term investments 2.9 1.5
Discontinued operations (0.7) --
--------- ---------
Net cash used in investing activities (65.7) (24.0)
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt payments (0.8) (0.8)
Deferred financing costs -- (1.8)
--------- ---------
Net cash used in financing activities (0.8) (2.6)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (43.8) (53.1)
CASH AND CASH EQUIVALENTS, beginning of period 148.1 306.2
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 104.3 $ 253.1
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>5
FORM 10-Q - PART I
ITEM 1 Financial Statements (continued)
Premcor USA Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 2000
(tabular dollar amounts in millions of U.S. dollars)
1. Basis of Preparation
The consolidated interim financial statements of Premcor USA Inc. and
subsidiaries (formerly Clark USA, Inc. and subsidiaries, the "Company")
have been reviewed by independent accountants. In the opinion of the
management of the Company, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the
financial statements have been included therein. The financial
statements are presented in accordance with the disclosure requirements
for Form 10-Q. These unaudited financial statements should be read in
conjunction with the audited financial statements and notes thereto
included in the Company's 1999 Annual Report on Form 10-K/A.
The Company changed its name effective May 10, 2000 due to a 1999
transaction with Apollo Management L.C. in which the Company sold the retail
marketing division as well as the Clark trade name.
The Company has made certain reclassifications to the prior period to
conform to current period presentation.
2. New Accounting Standard
In June 1998, the Financial Accounting Standards Board adopted Statement
of Financial Accounting Standards No. 133, ''Accounting for Derivative
Instruments and Hedging Activities''. This statement establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. This
statement, as amended, becomes effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. The Company is currently evaluating this
new standard and the impact it may have on the Company's accounting and
reporting.
3. Inventories
The carrying value of inventories consisted of the following:
December 31, March 31,
1999 2000
------------ ------------
Crude oil............................. $ 95.1 $ 76.7
Refined products and blendstocks...... 134.6 217.8
Warehouse stock and other............. 22.5 22.6
------------ ------------
$ 252.2 $ 317.1
============ ============
The market value of the crude oil and refined product inventories at
March 31, 2000 was approximately $104.6 million above carrying value. In the
first quarter of 1999 there was a $96.2 million recovery of the prior year
write-down of inventory costs to market.
4. Other Assets
Amortization of deferred financing costs for the three-month period
ended March 31, 2000 was $2.1 million (1999 - $1.4 million) and was included in
"Interest and finance costs, net."
<PAGE>6
Amortization of refinery maintenance turnaround costs for the three-
month period ended March 31, 2000 was $7.5 million (1999 - $5.1 million).
5. Interest and Finance Costs, net
Interest and finance costs, net, consisted of the following:
For the Three Months
Ended March 31,
--------------------
1999 2000
--------- ---------
Interest expense................................. $ 23.3 $ 23.1
Financing costs ................................. 1.5 2.1
Interest and finance income...................... (1.7) (3.9)
--------- ---------
23.1 21.3
Capitalized interest............................. (2.0) (1.7)
--------- ---------
$ 21.1 $ 19.6
========= =========
Cash paid for interest expense for the three-month period ended
March 31, 2000 was $18.8 million (1999 - $19.0 million). Accrued interest
payable as of March 31, 2000 of $19.4 million (December 31, 1999 - $15.2
million) was included in "Accrued expenses and other."
6. Income Taxes
The Company received net cash income tax refunds of $2.2 million during
the first quarter of 2000 (1999 - no net cash income tax payments). The income
tax provision related to discontinued operations for the three-month period
ended March 31, 1999 was $1.1 million. The income tax benefit on earnings
from continuing operations for the same period was $1.1 million, which reflects
the intraperiod utilization of net operating losses.
7. Related Party Transactions
At March 31, 2000, the Company had a net outstanding receivable balance
of $0.5 million from Port Arthur Coker Company L.P. ("PACC"), consisting
of a receivable of $0.6 million for services provided under the services
and supply agreement and fees paid by the Company on PACC's behalf and a
$0.1 million payable for the overpayment of such services in a prior
period. These amounts may be offset.
8. Commitments and Contingencies
Premcor USA Inc. is subject to various legal proceedings related to
governmental regulations and other actions arising out of the normal
course of business, including legal proceedings related to environmental
matters. While it is not possible at this time to establish the ultimate
amount of liability with respect to the Company's contingent liabilities, the
Company is of the opinion that the aggregate amount of any such liabilities, for
which a provision has not been made, will not have a material adverse effect on
its financial position. However, an adverse outcome of any one or more of
these matters could have a material effect on quarterly or annual operating
results or cash flows when resolved in a future period.
<PAGE>7
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Premcor USA Inc. (formerly Clark USA, Inc., the "Company") is a wholly-
owned subsidiary of Premcor Inc. (formerly Clark Refining Holdings Inc.,
the "Parent") and owns all of the outstanding capital stock of The Premcor
Refining Group Inc. (formerly Clark Refining & Marketing, Inc., the
"Refining Group"). The Company also owns all of the outstanding capital
stock of The Premcor Pipeline Co. (formerly Clark Pipe Line Company,
"Premcor Pipeline"). Because the Refining Group is the principal subsidiary
of the Company, a discussion of the Company's results of operations consists
principally of a discussion of the Refining Group's results of operations.
See Item 5 - Other Information for additional information related to the name
change of the Company and its affiliates.
Results of Operations
Financial Highlights
The following table reflects the Company's financial and operating
highlights for the three-month periods ended March 31, 1999 and 2000. All
amounts listed are dollars in millions, except per barrel information.
Certain information was restated to reflect current period presentation. The
table provides supplementary data and is not intended to represent an income
statement presented in accordance with generally accepted accounting principles.
Operating Income:
For the three months
ended March 31,
--------------------
1999 2000
--------- ---------
Port Arthur Refinery
Crude oil throughput (000 barrels per day) 213.0 203.7
Production (000 barrels per day) 204.6 210.4
Gross margin (per barrel of production) $ 2.19 $ 3.94
Gulf Coast 3/2/1 crack spread (per barrel) $ 1.21 $ 3.45
Operating expenses (40.2) (47.2)
Net margin $ 0.1 $ 28.2
Midwest Refineries and Other
Crude oil throughput (000 barrels per day) 242.4 236.3
Production (000 barrels per day) 248.0 242.8
Gross margin (per barrel of production) $ 1.29 $ 3.44
Chicago 3/2/1 crack spread (per barrel) $ 1.79 $ 4.47
Operating expenses (56.9) (56.7)
Premcor Pipeline net margin 0.8 --
Net margin $ (27.3) $ 19.3
General and administrative expenses (13.2) (10.4)
--------- ---------
Operating Contribution (40.4) 37.1
Inventory timing adjustment gain (loss) (a) 7.7 (16.4)
Inventory recovery to market 96.2 --
Depreciation and amortization (13.9) (16.2)
--------- ---------
Operating income $ 49.6 $ 4.5
========= =========
(a) Includes adjustments to inventory costs caused by differences between
when and how crude oil is actually purchased, refined products are actually sold
and inventories are managed, and a daily "market in, market out" operations
measurement methodology.
The Company recorded a net loss from continuing operations of $15.3
million in the first quarter of 2000 as compared to net earnings from
continuing operations of $29.6 million in the same period a year ago. Net
<PAGE>8
earnings from continuing operations in the first quarter of 1999 included a
$96.2 million after-tax recovery of a previous writedown of inventory costs to
market value. Excluding this non-cash item, net earnings from continuing
operations improved $51.3 million in the first quarter of 2000 from the year-ago
period. Net sales and operating revenues and costs of sales increased
approximately 74% in the first quarter of 2000 as compared to the same period of
1999 principally due to higher petroleum prices. Petroleum prices increased an
average of $15 to $20 per barrel in the first quarter of 2000 from the first
quarter of 1999 due to lower world-wide petroleum inventories.
Operating Contribution (earnings before interest, depreciation,
amortization, inventory-related items and taxes) of $37.1 million in the first
quarter of 2000 was improved versus an Operating Contribution loss of $40.4
million in the same period of 1999 as margins for light products (gasoline and
distillates) improved dramatically from 1999 lows. Operating income was
reduced by $16.4 million in the first three months of 2000 due to the negative
impact of inventory timing adjustments. Included in inventory timing
adjustments was a loss of $38.4 million that reflected the increased cost of
crude oil acquisition and inventory management in a volatile and backwardated
hydrocarbon market. This loss was partially offset by a $22 million non-cash
benefit resulting from the difference between the Company's market in, market
out approach of measuring Operating Contribution and inventory cost
determinations under generally accepted accounting principles.
Operating Contribution improved in the first quarter of 2000 as
compared to the year-ago period as light product margins benefited from reduced
industry inventories resulting from solid demand and lower industry production
of refined products. However, high and volatile feedstock costs did put
pressure on margins offsetting some of this benefit. This pressure was
particularly evident in margins for heavy products, such as petroleum coke and
residual fuel that did not track the increase in crude oil prices in the
period. In addition, the Company also experienced higher relative costs for
foreign sour crude oil in the first quarter of 2000.
The improvement in light product margins was reflected by improvements
in 3/2/1 crack spreads, which are indicators of refining margins based on
quoted market prices. The 3/2/1 crack spread is calculated by subtracting
the price for three barrels of WTI crude oil from the price of two barrels of
regular unleaded gasoline and one barrel of high sulfur diesel fuel, and
dividing the total by three. In the first quarter of 2000, 3/2/1 crack
spreads in the Gulf Coast market averaged $3.45 per barrel versus only $1.21
per barrel for the same period in 1999.
Crude oil throughput rates in the first quarter of 2000 averaged
approximately 100,000 barrels per day below capacity in total for all
refineries. Approximately half of this reduction was due to economic reasons
and half was due to unplanned downtime. The Company planned lower operating
rates at its four facilities due to weak margin conditions in the fourth
quarter 1999 and early in the first quarter of 2000. Early in 2000, the Lima
refinery had unplanned downtime due to two electrical outages and a failed
compressor. The total impact at the Lima refinery averaged approximately 30,000
barrels per day in the first three months of 2000. The other principal
unplanned downtime was at the Blue Island refinery, which required unplanned
maintenance on its vacuum and crude unit early in the first quarter of 2000.
The impact at the Blue Island refinery averaged approximately 10,000 barrels
per day in the first quarter of 2000. The total impact of unplanned downtime
versus the optimum was estimated at $15 to $20 million on Operating Contribution
in the first quarter of 2000. In addition, costs that were included in
Inventory Timing Adjustments were incurred associated with management of excess
inventories. In the first quarter of 1999, the Company had reduced throughput
due to weak margins and planned maintenance turnarounds. The Company conducted
a 33 day turnaround at its Port Arthur refinery in April and early May 2000 that
reduced crude oil throughput to zero during the turnaround.
Operating expenses at the Port Arthur refinery increased during the
first quarter of 2000 due to higher energy and repair and maintenance expenses,
while operating expenses for the Midwest refineries were flat year over year.
General and administrative expenses in the first quarter of 2000 were lower than
1999 due to costs eliminated by the sale of the Company's refined product
terminals and Y2K remediation costs incurred in 1999, and lower incentive bonus
accruals.
<PAGE>9
Other Financial Highlights
Depreciation and amortization expenses increased in the three months
ended March 31, 2000 over the comparable period in 1999 principally because of
higher amortization of turnaround costs associated with Lima refinery
turnarounds performed in 1999. Interest and finance costs, net for the three
months ended March 31, 2000 decreased over the comparable period in 1999
principally because of increased interest income resulting from higher invested
balances and interest rates. The increased interest income was partially offset
by higher interest expense on the Company's floating rate term debt and higher
working capital facility costs.
Liquidity and Capital Resources
Net cash provided by operating activities, excluding working capital
changes, for the three months ended March 31, 2000 was $2.6 million compared
to cash used of $51.4 million in the year-earlier period. Working capital as
of March 31, 2000 was $321.2 million, a 1.65-to-1 current ratio, versus $344.3
million as of December 31, 1999, a 1.77-to-1 current ratio. The improvement
in net cash provided by operating activities, excluding working capital changes,
principally resulted from the improved industry market conditions.
In general, the Company's short-term working capital requirements
fluctuate with the price and payment terms of crude oil and refined petroleum
products. The Refining Group has in place a credit agreement (the "Credit
Agreement") which provides for the issuance of letters of credit up to the
lesser of $620 million or the amount of a borrowing base calculated with respect
to the Refining Group's cash and eligible cash equivalents, eligible
investments, eligible receivables, eligible petroleum inventories, paid but
unexpired letters of credit, and net obligations on swap contracts. The Credit
Agreement also provides for direct cash borrowings up to $50 million.
Borrowings under the Credit Agreement are secured by a lien on substantially all
of the Refining Group's cash and cash equivalents, receivables, crude oil and
refined product inventories and trademarks. The borrowing base associated with
such facility at March 31, 2000 was $757 million and approximately $494 million
of the facility was utilized for letters of credit. In addition, the Refining
Group had cash collateralized arrangements with certain lenders to issue up to
$70 million of letters of credit for the Refining Group's commitments associated
with a project at its Port Arthur refinery and for non-hydrocarbon items which
totaled $60.8 million as of March 31, 2000. As of March 31, 2000, there were
no direct borrowings under the Credit Agreement. The Credit Agreement expires
on June 30, 2001.
In 1998, the Refining Group began an upgrade project at its Port Arthur
refinery that includes the construction of new coking, hydrocracking, sulfur
removal capability, and the expansion of the existing crude unit capacity to
250,000 barrels per day (the "Coker Project"). The Coker Project will allow the
refinery to process primarily lower-cost, heavy sour crude oil. In the third
quarter of 1999, the Refining Group sold a portion of the work in progress and
certain other assets to Port Arthur Coker Company L.P. ("PACC"), a company that
is an affiliate of, but not controlled by, the Refining Group. PACC is
completing the construction of the new coking, hydrocracking, and sulfur removal
facilities. The Refining Group is expanding its crude unit capacity and making
certain other improvements that are part of the Coker Project. PACC and the
Refining Group have entered into certain agreements associated with the Coker
Project. The Coker Project is expected to begin operation in the first quarter
of 2001. Additional information regarding the Coker Project is included in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 1999.
Cash flows used in investing activities in the first quarter of 2000
were $24.0 million as compared to $65.7 million in the year-earlier period.
Cash flows used in investing activities were lower in the first quarter of 2000
than the year-ago period principally due to lower maintenance turnaround and
capital expenditures. In the first quarter of 1999, the Lima, Port Arthur, and
Blue Island refineries had maintenance turnaround activity totaling $24.3
million. Capital expenditures were $22.1 million in the first quarter of 2000
versus $40.4 million in the same period of 1999. Capital expenditures
<PAGE>10
associated with the Coker Project were $16.6 million in the first quarter of
2000 versus $33.3 million in the first quarter of 1999. As noted above, a
portion of the Coker Project expenditures incurred in 1999 were sold to PACC in
August 1999. The Company has invested $67.3 million, net in the Coker Project
since its inception.
Cash flows used in financing activities for the first quarter of 2000
were higher as compared to the same period in 1999 principally because of the
additional costs of expanding the Refining Group's Credit Agreement in 2000 to
$620 million from the $540 million originally put into place in November 1999.
Premcor USA Inc. relies on the Refining Group for substantially all of
its liquidity in order to meet its interest and other costs. Premcor USA Inc.
is required to make interest payments on its 10 7/8% Notes due 2005 of $9.5
million on June 1 and December 1 of each year and expects its other costs to
total less than $1 million per year. Premcor USA Inc. currently pays dividends
on its 11 1/2% Exchangeable Preferred Stock in-kind. As of March 31, 2000,
cash, cash equivalents, and short-term investments owned by Premcor USA Inc.
without restriction amounted to $21.4 million. However, Premcor USA Inc.'s
ability to access the Refining Group's cash flows from operating activities is
limited by covenants governing certain of the Refining Group's outstanding debt
securities. As of March 31, 2000, the Refining Group was unable under the terms
of such debt securities to pay dividends or otherwise distribute any additional
funds to Premcor USA Inc. Premcor USA Inc. believes it will have adequate
liquidity to meet its working capital needs for the next year, but unless such
Refining Group debt securities are amended or repaid or the Refining Group's net
earnings are sufficient to allow dividends under its covenants, it will require
additional liquidity to make its June 1, 2001 interest payment and to fund its
needs beyond June 2001. Such debt securities are currently redeemable at par by
the Refining Group.
Funds generated from operating activities together with existing cash,
cash equivalents and short- term investments and proceeds from asset sales are
expected to be adequate to fund existing requirements for working capital and
capital expenditure programs at the Refining Group for the next year. Due to
the commodity nature of its feedstocks and products, the Company's operating
results are subject to rapid and wide fluctuations. While the Company believes
the Refining Group's maintenance of large cash, cash equivalents and short-term
investment balances and its operating philosophies will be sufficient to provide
the Refining Group with adequate liquidity through the next year, there can be
no assurance that market conditions will not be worse than anticipated. Future
working capital, discretionary capital expenditures, environmentally mandated
spending and acquisitions may require additional debt or equity capital.
Forward-Looking Statements
Certain statements in this document are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. These statements are subject to the
safe harbor provisions of this legislation. Words such as ''expects,''
''intends,'' ''plans,'' ''projects,'' ''believes,'' ''estimates'' and similar
expressions typically identify such forward-looking statements.
Even though the Company believes its expectations regarding future
events are based on reasonable assumptions, forward-looking statements are
not guarantees of future performance. There are many reasons why actual results
could, and probably will, differ from those contemplated in the Company's
forward-looking statements. These include, among others, changes in:
~ Industry-wide refining margins
~ Crude oil and other raw material costs, embargoes, industry expenditures for
the discovery and production of crude oil, and military conflicts between, or
internal instability in, one or more oil-producing countries, and
governmental actions
~ Market volatility due to world and regional events
~ Availability and cost of debt and equity financing
~ Labor relations
~ U.S. and world economic conditions
<PAGE>11
~ Supply and demand for refined petroleum products
~ Reliability and efficiency of the Company's operating facilities. There are
many hazards common to operating oil refining and distribution facilities.
Such hazards include equipment malfunctions, plant construction/repair delays,
explosions, fires, oil spills and the impact of severe weather
~ Actions taken by competitors which may include both pricing and expansion or
retirement of refinery capacity
~ The enforceability of contracts
~ Civil, criminal, regulatory or administrative actions, claims or proceedings
and regulations dealing with protection of the environment, including refined
petroleum product composition and characteristics
~ Other unpredictable or unknown factors not discussed
Because of all of these uncertainties, and others, you should not place
undue reliance on the Company's forward-looking statements.
PART II - OTHER INFORMATION
ITEM 5 - Other Information
Company Name Change
Effective May 10, 2000 the Company has changed its name to Premcor USA
Inc. from Clark USA, Inc. In connection with this name change, the following
affiliated companies have also changed their names:
New Name Former Name
Parent Company:
Premcor Inc. Clark Refining Holdings Inc.
Subsidiaries:
The Premcor Pipeline Co. Clark Pipe Line Company
The Premcor Refining Group Inc. Clark Refining & Marketing, Inc.
Subsidiaries of The Premcor Refining Group Inc.
Premcor Investments Inc. Clark Investments, Inc.
Premcor P.A. Pipeline Company Clark Port Arthur Pipe Line Company
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PREMCOR USA INC.
(Registrant)
/s/ Dennis R. Eichholz
------------------------------------
Dennis R. Eichholz
Controller and Treasurer (Principal
Accounting Officer)
May 12, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 253,080
<SECURITIES> 1,429
<RECEIVABLES> 209,916
<ALLOWANCES> 1,368
<INVENTORY> 317,081
<CURRENT-ASSETS> 815,845
<PP&E> 823,107
<DEPRECIATION> 193,198
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<BONDS> 969,967
83,319
0
<COMMON> 0
<OTHER-SE> (50,714)
<TOTAL-LIABILITY-AND-EQUITY> 1,562,052
<SALES> 1,554,793
<TOTAL-REVENUES> 1,563,315
<CGS> 1,424,068
<TOTAL-COSTS> 1,528,322
<OTHER-EXPENSES> 16,580
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,144
<INCOME-PRETAX> (15,142)
<INCOME-TAX> (213)
<INCOME-CONTINUING> (15,355)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (15,355)
<EPS-BASIC> 0
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</TABLE>
