EX-13.1

Management's Discussion and Analysis of Financial Condition and Results of
Operations

RESULTS OF OPERATIONS

Consolidated Results 1995 vs 1994

   
     Sales and operating revenues for 1995 were $3,683.1 million compared
to $3,297.3 million in 1994. Sales and operating revenues increased
primarily due to a 5.5% and a 4.8% increase in refined product sales
volumes and prices, respectively, and a 9.9% and a 3.2% increase in retail
gasoline sales volumes and prices, respectively. This increase also
reflected the contribution from a 7.0% increase in the average number of
retail outlets during 1995. Per store retail merchandise sales and retail
gasoline sales volumes increased 5.1% and 2.7%, respectively, during 1995
when compared to 1994. Also contributing to the increase in consolidated
sales and operating revenues was a 20.6% increase in sales in the Company's
Allied Businesses segment, primarily due to the strong demand for polymer
grade propylene and ammonia fertilizer. In addition, the acquisition of
National Convenience Stores Incorporated ("NCS") in mid-December 1995,
contributed $42.1 million in sales and operating revenues.    

     During 1995, the Company had net income of $47.3 million compared with
$75.8 million in 1994. The Company's 1995 results were negatively impacted
by weak refining margins in the inland markets where the Company sells most
of its products. Refining margins improved somewhat later in the fourth
quarter of 1995 due largely to heating oil price increases driven by cold
weather; however, increases in the cost of gasoline could not be recovered
at the retail level. Partially offsetting weak refining margins were strong
results for polymer grade propylene and ammonia fertilizer due to improved
demand.

     A major portion of the Company's inventory is valued at the lower of
last-in, first-out (LIFO) cost or market. At December 31, 1995, inventories
of crude oil and refined products of the Refining and Wholesale segment and
propylene products in the Allied Businesses segment were valued at market
(lower than LIFO cost). Motor fuel products of the Retail segment were
recorded at their LIFO costs. Estimating the financial impact of changes in
the valuation of refinery inventories due to such inventories being valued
at market is difficult because of the number of variables that must be
considered. For operating purposes, management attempts to estimate the
impact of changes in valuation of refinery inventories on net income. The
estimated after tax change in inventory values was a positive $5.2 million
and $7.3 million in 1995 and 1994, respectively.

Consolidated Results 1994 vs 1993

   
     Sales and operating revenues for 1994 were $3,297.3 million compared
to $3,100.0 million in 1993. Sales and operating revenues increased
primarily due to a 6.4% increase in refined product sales volumes, a 6.4%
increase in retail merchandise sales and an improvement in revenues in the
Allied Businesses segment.    

     During 1994, the Company had net income of $75.8 million compared with
income before cumulative effect of accounting changes of $32.6 million and
net income of $18.4 million in 1993. The Company's integrated business
approach contributed significantly to the Company's profitability during
1994. The Refining and Wholesale segment was supported by strong refining
margins in the first half of 1994. Then, as refining margins narrowed, the
Company had excellent results from the Retail segment, reflecting improved
retail margins in the second half of 1994. The Allied Businesses segment
provided significant operating profit improvements throughout 1994,
reflecting a general improvement in the petrochemical business and strong
demand for ammonia fertilizer. The estimated after tax change in inventory
values was a positive $7.3 million in 1994 and a negative $16.5 million in
1993.

Segment Results 1995 vs 1994
   
     Sales and operating revenues from the Refining and Wholesale segment
were $1,796.0 million compared to $1,661.3 million in 1994. The increase is
primarily due to a 5.5% and a 4.8% increase in refined product sales
volumes and prices, respectively. Operating profit decreased by 41.6%
primarily due to a 20.5% decrease in refinery margins from the same period
a year ago.  Last year, refinery margins in the Company's inland markets,
where most of its products are sold, were strong, relative to the Gulf
Coast market, primarily because supply to the inland markets were
constrained by distribution system problems. While refinery margins in the
Company's inland markets remain higher than those in the Gulf Coast market,
they have declined versus last year while Gulf Coast margins have improved.
The 1995 operating profit was positively impacted by an increase in the
value of crude oil and refined product inventories.    

   
     Sales and operating revenues in the Retail segment increased by 14.1%
in 1995, primarily due to a 9.9% and a 3.2% increase in retail gasoline
sales volumes and prices, respectively, and a 9.7% increase in retail
merchandise sales.  This increase reflected the contribution from a 7.0%
increase in the average number of retail outlets during 1995. Per store
retail merchandise sales increased 5.1% and per store retail gasoline sales
volumes increased 2.7% during 1995 compared to 1994. In addition, the
acquisition of NCS in mid-December 1995, contributed $42.1 million in sales
and operating revenues. Retail segment operating profit decreased by $3.3
million to $55.6 million in 1995 from $58.9 million in 1994, primarily due to
a 6.7% decrease in retail gasoline margins. Gross profit from lottery sales
in 1995 was $9.2 million compared to $8.2 million in 1994.    

     Allied Businesses sales and operating revenues increased 20.6% to
$375.4 million in 1995, primarily due to an increase in revenues in the
Company's propylene business, reflecting increased sales volumes and prices
attributable to continued strong demand for polymer grade propylene. Also
contributing to the increase in revenues was an 8.8% increase in natural
gas liquids sales volumes. Operating profits in the Allied Businesses
segment increased by 84.8% in 1995 to $48.1 million primarily due to a
$13.7 million and a $4.0 million increase in operating profit from the
Company's propylene and ammonia fertilizer businesses, respectively,
reflecting a general improvement in the petrochemical business and demand
for ammonia fertilizer.

Segment Results 1994 vs 1993

   
     Sales and operating revenues from the Refining and Wholesale segment
increased $138.7 million from $1,522.6 million in 1993 to $1,661.3 million
in 1994, primarily due to a 6.4% increase in refined product sales volumes
as the Company's expansion of its Three Rivers Refinery came on-line. This
increase was partially offset by a 5.1% decrease in refined products sales
prices. Refining and Wholesale operating profit increased by 98.6% to
$146.8 million compared to $73.9 million in 1993. This increase in
operating profit was primarily due to a 17.0% increase in refinery margins
compared to 1993.  The 1994 operating profit was positively impacted by an
increase in the value of crude oil and refined products inventories. The
Company also benefited from a full year of the projects brought on line in
1993, namely, the Three Rivers expansion and the diesel desulfurizer at
McKee.    

   
     Sales and operating revenues in the Retail segment increased 3.9% in
1994, primarily due to a 6.4% increase in retail merchandise sales, a 2.0%
increase in gasoline sales volumes, and a 15.8% increase in lottery sales,
partially offset by a 2.9% decrease in retail gasoline sales prices.
Per-store merchandise sales increased by 5.1%. Retail operating profit
decreased by 6.1% to $58.9 million in 1994 from $62.7 million in 1993,
primarily due to increased operating costs, reflecting the costs associated
with the installation of the Company's computerized retail information
inventory management and customer service system ("IRIS"). IRIS has the
capability of tracking merchandise sales by item and interfacing with
computerized controls for underground storage tank monitoring that allows
the Company increased environmental protection. Also contributing to the
decrease in operating profit was a 0.6% decrease in retail merchandise
margins. Gross profit from lottery sales in 1994 was $8.2 million compared
to $7.3 million in 1993.    

     Allied Businesses sales and operating revenues increased 2.9% to
$311.2 million in 1994, primarily due to an increase in revenues from the
Company's ammonia fertilizer and propylene businesses. The propylene
increases reflected strong demand for polymer grade propylene during the
last half of the year. The ammonia fertilizer business benefited from
strong demand for ammonia fertilizer and depressed natural gas prices.
These revenue increases were partially offset by a 9.1% decrease in natural
gas liquids sales volumes and a 6.9% decrease in natural gas liquids sales
prices. Allied Businesses operating profits increased by 73.3% in 1994 to
$26.0 million, primarily due to an $8.2 million and a $6.7 million increase
in operating profits from the Company's propylene and ammonia fertilizer
businesses, respectively. Also contributing to the increase in operating
profits was a $3.0 million improvement from Trans Texas Pipeline,
reflecting a full year of higher operating rates and tariffs. Partially
offsetting the increase in operating profits was a $5.7 million increase in
operating expense from international operations, and a $2.9 million
decrease in natural gas processing operating profit, reflecting the
cancellation of the Company's contract to process natural gas.

Acquisition of National Convenience Stores

     In December 1995, the Company completed the acquisition of all the
outstanding common shares of NCS for $27 per share in cash. The total value
of the transaction is approximately $280.0 million, which includes the
purchase of outstanding warrants for the spread between $27 per share and
the exercise price of the warrants, transaction costs, and the assumption
of NCS's debt. The purchase price exceeded the estimated fair value of net
assets acquired by approximately $160.5 million, which is included in the
accompanying consolidated balance sheet as excess of cost over acquired net
assets, net of amortization. This asset is being amortized over its
estimated useful life of 20 years. Financing for the transaction has been
arranged through Bank of America National Trust and Savings Association.

   
     NCS operates 661 "Stop N Go" convenience stores located in Texas
cities where the Company currently operates retail outlets. Nearly 600 of
the NCS outlets sell gasoline. Based on historical results, it is estimated
that total annual revenues for the combined companies will be approximately
$4.1 billion. In addition, total merchandise sales are expected to more
than double and the Company's sales of gasoline through branded outlets
will increase approximately 21.0% to an estimated 123,000 barrels per day.
Additionally, the acquisition increases the contribution of the Company's
Retail segment to operating profit which lessens the impact of more
volatile refining margins on profitability.    

Outlook

     1995 was a difficult year for the refining and marketing industry due
to industry-wide weak refining margins. Refining margins were negatively
impacted by industry overcapacity, high utilization rates, regulatory
changes relating to reformulated gasoline, and an unseasonably warm first
quarter.  Retail fuel margins, which usually widen when refining margins
narrow, did not fully offset the downturn in refining.

     The outlook for the refining and marketing industry in 1996 is
positive as most analysts agree that profit-ability in 1995 hit the bottom
of a cycle that is expected to swing upward this year. Underlying these
expectations is the assumed continued growth in gasoline demand which is
expected to absorb the overcapacity that plagued the industry in 1995.
Currently, however, although the industry is experiencing better demand and
higher prices for heating oil driven by the recent cold winter weather,
gasoline margins until recently were depressed.

     The Company has established earnings per share improvement goals of
$0.75 per share in 1996 and another $0.75 per share the following year for
a total of $1.50 by 1997. These earnings targets do not reflect the
potential impact of changes in refining and marketing margins, the economy
and inflation on operating expenses, or other factors outside the Company's
control. As such, there necessarily can be no assurance that these goals
will be realized.

     Underlying the Company's earnings improvement goals are several
significant items. The primary contributor to improved earnings is the
combined impact of the completion of capital projects currently underway or
recently completed. The most significant of these projects are the El Paso
pipeline and terminal, the Three Rivers expansion, and the second propylene
splitter at Mont Belvieu. Project economics are based on historical product
prices and raw material costs that represent two to five year averages.

     Also of significance is the recently completed migration of all
Company information systems from a mainframe system to a client/server
system which will result in significant cost savings over the next several
years.

     The balance of the anticipated earnings improvement comes from a
combination of administrative expense control measures and the optimization
of operations.

     Finally, these profit improvement goals were established prior to our
acquisition of NCS. While management is confident the NCS acquisition will
contribute to the Company's operating profit in 1996, the Company will also
incur one-time consolidation expenses during 1996 which will affect net
income for the year.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow and Working Capital

     For the year ended December 31, 1995, cash provided by operations was
$117.6 million, compared with $176.2 million provided in 1994. Working
capital at December 31, 1995 consisted of current assets of $654.9 million
and current liabilities of $489.5 million, or a current ratio of 1.3. At
December 31, 1994, the current ratio was 1.4, with current assets of $540.4
million and current liabilities of $374.1 million. Cash provided by
operations decreased primarily due to a $28.5 million decrease in net
income and a decrease in deferred taxes provided. An increase in working
capital (excluding the impact of the NCS acquisition) primarily due to an
increase in inventory prices and volumes, negatively impacted cash provided
by operations. This increase was partially offset by an increase in
accounts payable, primarily attributable to an 8.8% increase in crude oil
purchase prices in 1995 compared to 1994.

     The increase in cash provided by operations during 1994 over 1993 was
primarily due to a $57.4 million increase in net income and an increase in
deferred taxes provided. Deferred taxes increased primarily because of the
difference between book and tax inventory valuation at the Company's two
refineries and because of the increase in the difference between the book
and tax basis for properties and equipment, offset in part by an increase
in the alternative minimum tax credit carryforward. The Company was in an
alternative minimum tax position for the 1994 taxable year. Increased
working capital negatively impacted cash provided by operations during
1994.  The increase in working capital in 1994 was primarily due to a 56.5%
increase in inventories, attributable to high crude oil inventory at
year-end. The increase in current liabilities was primarily due to a 125.2%
increase in accounts payable. The increase in inventories and accounts
payable was affected by the Company's decision to purchase additional crude
oil in December 1994 in order to overcome potential supply disruptions
caused by the implementation of Oil Pollution Act 1990 ("OPA 90"). Under
OPA 90, all vessels trading in U.S. waters must have had a Certificate Of
Financial Responsibility, approved by the Coast Guard, in place by December
28, 1994. Vessel owners were slow to comply, setting the stage for a
possible shortage of foreign shipments to the U.S.

     The Company acquires a major portion of its crude oil requirements
through the purchase of futures contracts on the New York Mercantile
Exchange. The Company also uses the futures market to manage the price risk
inherent in purchasing the crude oil in advance of the delivery date, and
in maintaining the inventories contained within its refinery and pipeline
systems. The Company defers the impact of changes in the market value of
these contracts until such time as the hedged transaction is completed.

     The Company has not entered into any form of interest rate caps or
swaps on any of its fixed or variable rate debt in recent periods.

Capital Expenditures

     In recent years capital expenditures have represented a variety of
projects designed to expand and maintain up-to-date refinery facilities,
improve terminal and distribution systems, modernize and expand retail
outlets, comply with environmental regulatory requirements, and pursue new
ventures in related businesses. The Company's capital expenditures during
1995 were $556.6 million compared with $162.1 million in 1994, and $131.8
million in 1993.

     Included in the Company's 1995 capital expenditures is approximately
$280.0 million for the acquisition of NCS on December 14, 1995. Also
included in the Company's capital expenditures during 1995 is the
completion of the McKee to El Paso refined products pipeline and terminal
and the Three Rivers refinery hydrogen plant. The Company also recently
completed drilling a brine production well at the East Terminal at Mont
Belvieu and purchased four underground storage wells at the facility's West
Terminal. In addition a non-cash investment of $12.0 million for a portion
of a crude oil import and storage terminal acquired under an installment
purchase arrangement is included in the 1995 capital expenditures.

     The acquisition of NCS and other capital expenditures, expenditures
for debt service, lease obligations, working capital, and dividend
requirements exceeded cash generated by operations. As a result, in
addition to borrowing under the Bank of America term loan to finance the
NCS acquisition, the Company on February 13, 1995 issued $75.0 million of
8.75% debentures due June 15, 2015 and on June 8, 1995 issued $25.0 million
in non-callable 7.25% debentures due June 15, 2010. Also from time to time
throughout 1995, the Company accessed the commercial paper and bank money
markets.

     The Company announced in January 1996, the goal of strengthening the
Company's balance sheet and, within two years, bringing its debt to total
capital and interest coverage ratios back to the levels prior to the
acquisition of NCS. The Company's capital expenditures budgets for the next
two years have been reduced so that revised capital expenditure plans are
approximately $160.0 million in 1996 and $140.0 million in 1997. The
Company's goal is to pay down over $200.0 million of debt in the next two
years through cash flow generated from operations, capital spending
reductions, and the sale of some assets. The capital spending cuts include
eliminating retail store construction in most of Texas, while integrating
the NCS stores into the Company's system. The Company currently intends to
continue to construct additional retail stores in Arizona. Many refinery
projects have been deferred from 1996; however, expansion and upgrading
projects begun in 1995 at the Company's Three Rivers refinery will be
completed in 1996. These projects will increase the capacity of the
refinery from 75,000 barrels per day to 85,000 barrels per day and allow
heavy oils to be upgraded to more profitable products. The projects are
scheduled for completion in the third quarter of 1996. In addition,
expenditures continue at Three Rivers on the previously announced benzene
toluene xylene ("BTX") extraction unit, which will produce high value
petrochemical feedstocks.  Once completed in 1997, the BTX project gives
the Company the flexibility to shift certain components out of the gasoline
pool into more attractive petrochemical markets. Finally, the 1996 capital
budget also includes construction of a second 730 million pound per year
propylene splitter at Mont Belvieu with completion scheduled for the third
quarter of 1996.

     Although, it is presently the Company's goal to reduce debt in 1996,
if its assumptions regarding operating results or capital requirements
change, the Company can access its bank credit, bank money market, and
commercial paper facilities. In addition, depending upon developments in
the capital markets, the Company can access such markets to refinance
existing debt or to meet its capital and operating requirements.

     In addition to the NCS acquisition, the Company continued to increase
its retail marketing business in 1995 with the acquisition of 21 outlets in
New Mexico. In addition, the Company opened 30 outlets and closed 16
marginal outlets in 1995. The Company opened 17 and nine new outlets, in
1994 and 1993, respectively. Approximately 21 of the newly opened outlets
in 1995 were leased by the Company under a pre-existing long-term lease
arrangement (the "Brazos Lease"). The Brazos Lease has an initial lease
term which will expire in April 1999. Rent payable under the Brazos Lease
is based upon the amounts spent to acquire or construct the outlets and the
lessor's cost of funds from time to time. At December 31, 1995,
approximately $15.3 million of the $190.0 million commitment remained
available under the Brazos Lease to construct retail outlets. After the
non-cancelable lease term, the Brazos Lease may be extended by agreement of
the parties, or the Company may purchase or arrange for the sale of the
retail outlets. If the Company were unable to extend the lease or arrange
for the sale of the properties to a third party in 1999, the amount
necessary to purchase properties under the lease as of December 31, 1995
would be approximately $175.0 million.

Environmental Matters

     Environmental laws and regulations affect the Company in many areas.
Starting on January 1, 1995, reformulated gasoline was mandated by the 1990
Clean Air Act amendments for the nine worst ozone polluting cities in the
United States. Houston, which is in the Company's market area, is included
among these nine cities. Other cities, including Dallas, which is also in
the Company's market area, have chosen to "opt in" to the program. The
Company currently supplies its Houston market through third party purchases
and exchange agreements and anticipates it will continue such supply
arrangements for its reformulated gasoline requirements in Houston. The
Company currently makes reformulated gasoline for its Dallas market, which
historically has absorbed approximately 25 percent of the McKee refinery's
total gasoline pool.

     The 1990 Clean Air Act amendments also affect the Company by requiring
more stringent refinery and petrochemical permitting requirements and Stage
II vapor recovery nozzles on gas pumps in ozone non-attainment areas,
including Beaumont, Dallas, El Paso, Fort Worth and Houston, which are
located within the Company's market area.

     Most of the capital spent by the Company for environmental compliance
is integrally related to projects that increase refinery capacity or
improve product mix, and the Company does not specifically identify capital
expenditures related to such economic projects as being environmental.
However, with respect to capital expenditures budgeted primarily to produce
federally-mandated fuels to comply with regulations related to air and
water toxic emission levels and for remediation and compliance costs
related to underground storage tanks, it is estimated that approximately
$11.4 million was spent in 1995, $11.6 million was spent in 1994, and $21.4
million in 1993. For 1996, the Company has budgeted approximately $11.1
million primarily related to environmental capital expenditures to comply
with underground storage tank regulations at retail sites and waste water
treatment at the refineries.

     Federal, state, and local laws and regulations relating to health and
environmental quality affect nearly all of the operations of the Company.
While the Company cannot predict what legislation, rules, or regulations
will be developed or how they will be administered, management believes
that compliance with the more stringent laws or regulations could require
substantial additional expenditures by the Company for installation and
operation of systems and equipment related to health and environmental
quality.

Capital Structure

Financing Activities During 1995

     On February 13, 1995, the Company issued $75.0 million in non-callable
8.75% debentures due June 15, 2015.

     In March and December 1995, the Company renegotiated its two separate
revolving credit facilities ("Agreement I" and "Agreement II"). Agreement I
has a face value of $200.0 million with a maturity date of March 31, 2000.
Agreement II matures on March 29, 1996, and has a value of $100.0 million.
Interest under Agreement I and Agreement II varies depending on specified
lending options available to the Company. Generally, the variable
conditions relate to the prime rate, certificates of deposit, and London
Interbank Offered Rates, as adjusted upward by specified percentages. As of
December 31, 1995, the Company had no borrowings outstanding under
Agreement I or Agreement II.

     Agreement I and Agreement II, the Senior Notes (as defined below) and
the B of A Credit Facility (as defined below) all contain various
restrictive covenants relating to the Company and its financial condition,
operations, and properties. Under these covenants, the Company is required
to maintain a minimum current ratio and net worth. These covenants also
include restrictions on the payment of dividends. However, it is not
anticipated that such limitations will affect the Company's present ability
to pay dividends.  At December 31, 1995, under the most restrictive of
these covenants, $205.7 million was available for the payment of dividends.

     Agreement I and Agreement II, the Senior Notes, and the B of A Credit
Facility are unsecured. Certain subsidiaries of the Company have
unconditionally guaranteed the repayment of all indebtedness and the
performance of all obligations incurred by the Company under Agreement I
and Agreement II, the Senior Notes, and the B of A Credit Facility.

     In May 1995, the Company registered $150.0 million of unallocated
securities in a Universal Shelf Registration. That registration, which was
declared effective by the Securities and Exchange Commission in June 1995,
allows the Company to issue up to $150.0 million of debt, equities or
warrants, or any combination thereof, to the public on terms to be set at
the time of issuance. The Company will issue the securities so registered
from time to time, based on the Company's capital requirements and market
conditions.

     On June 8, 1995, the Company issued $25.0 million in non-callable
7.25% debentures due June 15, 2010. The proceeds from the issuance of the
debentures were used for general corporate purposes.

     On October 17, 1995, $6.2 million (the "Shamrock P/L Note") was
assumed when the Company purchased the lessor's interest in the Southlake
Products Pipeline extending from the McKee Refinery to the Dallas/Fort
Worth area.  The Shamrock P/L Note is currently being amortized
semi-annually at 9.75% with a maturity date of January 15, 1999.

     During December 1995, the Company entered into a Revolving Credit
Agreement (the "B of A Credit Facility") with a syndication of banks to
finance the acquisition of NCS. The B of A Credit Facility is a revolving
facility under which up to $220.0 million may be advanced and readvanced
from time to time for general corporate purposes. Credit available under
the B of A Credit Facility is reduced by equal amounts on four reduction
dates:  June 11, 1999; December 11, 1999; June 11, 2000; and, at maturity,
on December 11, 2000. Interest under the B of A Credit Facility is
structured similar to Agreement I and Agreement II. As of December 31,
1995, the Company had $220.0 million outstanding under the B of A Credit
Facility.

     On December 14, 1995, the Company assumed $53.3 million in mortgages
(the "Mortgages") as part of the NCS acquisition. The Mortgages currently
carry an annual interest rate of 9.5% with average maturities of 7 years
and are recorded at their net present value. The mortgages are secured by
retail properties owned by the Company. The Company also assumed other NCS
debt of $34.5 million which was immediately repaid and cancelled.

     At December 31, 1995, the Company had outstanding $163.0 million of
borrowings under bank money market facilities provided by major money
center banks at a weighted average rate of 6.05%. The bank money market
facilities are uncommitted lines of credit under which banks extend
unsecured short-term credit to the Company from time to time at market
rates.

Financing Activities During 1994

     On January 6, 1994, the Company prepaid the $35.0 million balance on
its $65.0 million Term Loan Agreement (the "Term Loan").

Financing Activities Prior To 1994

     At December 31, 1995, the Company's long-term debt included the
following amounts incurred prior to 1994:

     $100.0 million of 8% Debentures due April 1, 2023.

     $120.0 million of 10.75% Senior Notes (the "Senior Notes") payable in
equal annual installments of $30.0 million beginning April 30, 1996.

     $5.3 million of 9% Senior Notes payable in semi-annual installments
ending May 15, 1997.

     $30.0 million of 8.77% Senior Notes payable in quarterly installments
consisting of interest only until the May, 1997 payment and thereafter of
both interest and principal for the remaining 48 quarterly payments.

     $1.2 million of 8.35% Senior Notes payable in semi-annual installments
ending May 15, 1997.

     $75.0 million of medium-term notes with an interest rate of 9-3/8% due
March 1, 2001.

     $24.0 million of medium-term notes with an average interest rate of
8.45% maturing in the year 2003.

     $46.0 million of medium-term notes with an average interest rate of
7.44% maturing in the year 2006.

Accounting Matters

     Effective January 1, 1993, the Company changed the accounting method
for recording the liability under an agreement with Maxus (the
"Distribution Agreement") (see Note 3 of the Notes to the Consolidated
Financial Statements on page 14 of this Annual Report).  Effective January
1, 1993, the Company adopted Statement of Financial Accounting Standards
No. 112 ("FAS 112"), "Employers' Accounting for Post-employment Benefits,
an Amendment of FASB Statements No. 5 and 43" (see Note 3 of the Notes to
the Consolidated Financial Statements on page 15 of this Annual Report).

     The Company plans to adopt Statement of Financial Accounting Standards
No. 121 ("FAS 121"), "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of," in 1996. While the Company
has not completed its calculations on the effects of FAS 121, it does not
expect adoption of FAS 121 will have a material impact on its results of
operations or financial position.

     The Company plans to adopt Statement of Financial Accounting Standards
No. 123 ("FAS 123), "Accounting for Stock-Based Compensation," in 1996, and
plans to elect to adopt FAS 123 by providing the disclosure information
regarding its stock-based compensation plans as allowed by FAS 123.
Accordingly, adoption of FAS 123 is not expected to have a significant
effect on the Company's results of operations or financial position.

   
     During the first quarter of 1996 the Company began classifying federal
excise taxes and state motor fuel taxes in Sales and operating revenues and
in Costs and expenses for financial reporting purposes.  The Company believes
this method of classification better reflects the nature of such taxes and is
consistent with current industry practice.  The results of operations for the
three years ended December 31, 1995, 1994 and 1993 have been reclassified to
conform to the 1996 presentation.  The amount of such taxes for the three
years ended December 31 is $746.3 million, $691.0 million and $544.7
million in 1995, 1994 and 1993, respectively.  Neither operating profits
nor net income are affected by this reclassification.
    

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