UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1994 Commission File Number 1-10091
HUNTWAY PARTNERS, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-3601653
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
25129 The Old Road, #322
Newhall, California 91381
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number Including Area Code: (805) 286-1582
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common Units New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(b) 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 .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be considered, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to
this Form 10-K. [ ]
At March 14, 1995, the aggregate market value of the Partnership Units held by
non-affiliates of the registrant was approximately $4,000,000 based upon the
closing price of its units on the New York Stock Exchange Composite tape. At
March 14, 1995, there were 11,556,250 Units outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Document Form 10-K Part
Specified portions of Registrant's
Registration Statement on Form S-1 as amended by
Amendment No. 3, filed November 9, 1988 Part II
PART I
Item 1. Business of the Partnership
INTRODUCTION
Huntway Partners, L.P., a Delaware limited partnership (the "Partnership"),
owns three crude oil refineries located in California and Arizona. The
Partnership is currently operating the two California refineries and in August
1993 shut down the Arizona refinery due to adverse market conditions.
The managing general partner of the Partnership is Huntway Managing Partner,
L.P. (the "Managing General Partner"), a Delaware limited partnership. The
Managing General Partner owns a 0.9% general partner interest in the
Partnership. See "Cash Distribution Policy" and "Management". The Managing
General Partner and Huntway Holdings, L.P. ("Huntway Holdings"), the special
general partner of the Partnership (the "Special General Partner"), are
collectively referred to herein as the "General Partners". The General
Partners are under common ownership.
The principal executive offices of the Partnership and General Partners are
located at 25129 The Old Road, Suite 322, Newhall, California 91381 and their
telephone number is (805) 286-1582.
General:
The three refineries owned by Huntway are located in Wilmington, California,
near Los Angeles Harbor, in Benicia, California, near San Francisco Bay and in
Coolidge, Arizona, which is midway between Phoenix and Tucson. The
Wilmington, Benicia and Coolidge refineries have refining capacities of 6,000
barrels per day ("bpd"), 9,000 bpd and 8,500 bpd, respectively.
The two California refineries produce liquid asphalt products and other light-
end products such as gas oil, diesel fuel, naphtha and kerosene distillate,
from crude oil obtained from onshore and offshore California production
sources. The Arizona refinery, which was shut down in August 1993, also
produced jet fuel and diesel fuel. The California refineries supply liquid
asphalt to hot mix asphalt producers, material supply companies, contractors
and government agencies principally for use in road paving in California, and
to a lesser extent Arizona, Nevada, Utah, Oregon and Mexico. The Arizona
refinery is owned by a subsidiary of the Partnership, Sunbelt Refining
Company, L.P. ("Sunbelt"). The refining business conducted by the
Partnership, its subsidiary and its predecessors since 1979 is referred to
herein as "Huntway".
Most competing refineries typically produce liquid asphalt as a residual by-
product from the refining of higher cost and higher quality, light crude oil
into products such as gasoline. In contrast, Huntway's California refineries
were designed specifically for the production of liquid asphalt from lower
cost, lower quality, heavy crude oil produced in California.
Products and Markets:
Market Area
Huntway markets liquid asphalt primarily in California and, to a lesser
extent, in Nevada, Utah, Arizona and Oregon. The market area served by the
Wilmington refinery includes the southern portion of California from
Bakersfield to San Diego, into Baja, California in Mexico, and east into
southern Nevada (the "Southern Market"). The market area covered by the
Benicia refinery includes most of northern California from Monterey and
Modesto north to southern Oregon and east to northern Nevada and Utah (the
"Northern Market"). The Arizona refinery market area, which Huntway no longer
services through its Sunbelt refinery, consisted of Arizona (the "Arizona
Market").
Liquid Asphalt
Liquid asphalt is Huntway's principal product and accounted for approximately
51% of its revenues in 1994 and 48% 1993. The percentage of total revenue
attributed to asphalt increased in 1994 due to the August 1993 closure of
Sunbelt which produced more light-end products than the two California
refineries. The principal uses of liquid asphalt are in road paving and, to a
lesser extent, in the manufacture of roofing products. About 88% of Huntway's
liquid asphalt sales consist of paving grade liquid asphalt. The remaining
12% of Huntway's liquid asphalt is sold for use in the production of roofing
products such as tar paper and roofing shingles, and other specialty products.
Paving grade liquid asphalt is sold by Huntway to hot mix asphalt producers,
material supply companies, contractors and government agencies. These
customers, in turn, mix liquid asphalt with sand and gravel to produce "hot
mix asphalt" which is used for road paving.
Demand for liquid asphalt is generally lowest in the first quarter of the
calendar year, slightly higher in the second and fourth quarters and
significantly higher in the third calendar quarter. In particular, liquid
asphalt sales in the Northern Market are somewhat more seasonal than sales in
the Southern Market (including Arizona) due to the rain and cold weather
usually experienced in the Northern Market during the winter months, which
affects road paving activities.
Gas Oil
Gas oil accounted for about 29% of Huntway's revenues during 1994 and 25%
during 1993. This product is used either as a blending stock with diesel fuel
to make marine diesel fuel or by other refiners as a feedstock for the
production of gasoline and other light petroleum products.
Kerosene Distillate and Naphtha
Kerosene distillate is primarily sold to customers to be used as a refinery
feedstock or diesel blendstock.
Huntway also produces a gasoline range naphtha which is sold to gasoline
blenders or to other refiners for blending or production of finished gasoline
products. Sales of kerosene distillate and naphtha accounted for
approximately 19% and 17% of revenues in 1994 and 1993, respectively.
Jet Fuel
Jet fuel, formerly produced in Arizona, was sold to the Defense Fuels Supply
Command - a branch of the U.S. government - and was used as a military
aviation fuel. Due to the closure of the Sunbelt Refinery, Huntway did not
sell jet fuel in 1994 and it accounted for less than 10% of revenues in 1993.
Diesel Fuel
Diesel fuel, formerly produced in Arizona, was sold to distributors as well as
end users for use as a motor vehicle fuel. Sales of diesel fuel accounted for
less than 10% of revenues in 1993. With the closure of the Sunbelt refinery,
Huntway is no longer producing diesel fuel and sold none in 1994.
Bunker Fuel
This product is used as a fuel by ocean going ships and barges and is sold
primarily to ship bunkering companies. Huntway did not sell bunker fuel in
1994. It accounted for less than 1% of revenues in 1993.
Major Customers
One customer accounted for 16% of revenues in 1994 and 14% of revenues in
1993. In the event that one or more customers significantly reduces the level
of their purchases from Huntway, Huntway's management believes that it could
find alternative purchasers for the affected output and that such reduction
would not have a long-term material adverse effect upon the results of
Huntway's operations.
Factors Affecting Demand for Liquid Asphalt
General
Demand for liquid paving asphalt products is primarily affected by federal,
state and local highway spending, commercial construction and the level of
housing starts, all of which are beyond the control of the Partnership.
Government highway spending provides a source of demand which is relatively
unaffected by normal business cycles but is dependent upon appropriations.
During 1994, approximately 85% of liquid asphalt sales were ultimately funded
by the public sector. However, the January 17, 1994 earthquake diverted
substantial public funds designated for road transportation to freeway and
bridge repair. This repair effort primarily utilized concrete and steel,
thereby depressing 1994 public funding of conventional asphalt paving.
Historically, approximately 70% of Huntway's liquid asphalt sales have been
made to purchasers whose business is directly tied to these various
governmental expenditures. Over the long term the demand for liquid asphalt
will also tend to be influenced by changes in population, the level of
commercial construction, and housing activity.
The depressed business environment in California in recent years has adversely
impacted demand for asphalt by the private sector. Increased public sector
demand has partially mitigated lower private demand. However, in 1994, public
funding was diverted to freeway and bridge repair resulting from the January
1994 earthquake. Private asphalt demand remained depressed in 1994 but is
expected to increase in future years commensurate with the expected growth in
the California economy.
Government Funding
General. With the closure of the Sunbelt refinery in 1993, Huntway's two
remaining refineries are in California, therefore the following discussion
focuses on government highway funds available in California.
Federal Funding. Federal funding of highway projects is accomplished through
the Federal Aid Highway Program. The Federal Aid Highway Program is a
federally assisted, state administered program that distributes federal funds
to the states to construct and improve urban and rural highway systems. The
program is administered by the Federal Highway Administration ("FHWA"), an
agency of the Department of Transportation. Substantially all federal highway
funds are derived from gasoline user taxes assessed at the pump.
State and Local Funding. In addition to federal funding for highway projects,
states individually fund transportation improvements with the proceeds of a
variety of gasoline and other taxes. In California, the California Department
of Transportation ("CALTRANS") administers state expenditures for highway
projects.
In June, 1990 voters in the state of California passed a measure which
increased state gasoline taxes from 9 cents per gallon to 14 cents per gallon
effective August 1, 1990, and by an additional 1 cent per gallon on each
January 1 thereafter through 1994. The additional revenues available to the
state are now estimated to be about $14 billion over the decade. However, in
June 1994, voters in the State of California rejected a measure that would
have provided an additional $2.0 billion to pay for damage to freeways and
bridges resulting from the January 17, 1994 earthquake. Accordingly, State
funding for earthquake repair projects was achieved by utilizing funds from
the existing California transportation budget.
Local governmental units (such as cities, counties and townships) provide
additional funding for road and highway projects through various taxes and
bond issues.
However, it should be noted that these increases in governmental funding and
expenditures to date have not been sufficient to entirely offset the decline
in private sector demand as previously outlined.
Crude Oil Supply
Huntway's California refineries require approximately 15,000 bpd of crude oil
when operating at their rated capacities. Total refinery capacity in
California is approximately 1.95 million bpd according to the 1994 Refining
Survey published by the Oil & Gas Journal. California refineries are supplied
primarily by onshore and offshore California production and by crude oil
transported from Alaskan North Slope production. Current production of crude
oil from these sources totals approximately 2.5 million bpd, which is in
excess of the refining capacity of California refineries.
Huntway's California refineries are located near substantial crude oil
reserves, particularly the offshore Santa Maria Basin. A significant portion
of this crude oil is heavy, high sulfur crude oil, which is well-suited for
liquid asphalt production due to the higher percentage yield of liquid asphalt
per barrel. Current production of heavy crude oil from offshore California
sources is approximately 160,000 bpd and is expected to gradually increase in
the coming years.
The Arizona refinery is located adjacent to the All-American Pipeline, a
common carrier pipeline which transports crude oil from California to Texas.
Huntway coordinates its purchases of crude oil to meet the supply needs of all
of its existing refineries. Huntway purchases a substantial portion of its
crude oil requirements under contracts with a variety of crude oil producers
for terms varying from 30 days to 90 days. In addition, Huntway supplements
its contract purchases with purchases of crude oil on the "spot" market.
Competition
The markets for refined petroleum products are highly competitive and pricing
is a primary competitive factor. With respect to liquid asphalt, Huntway's
management believes that Huntway's reputation for consistently high product
quality, its ability to provide high levels of service and its long-standing
relationships with its major customers are important to its continued success.
Huntway's five-state market area is served by numerous refineries, including
refineries operated by major integrated oil companies and by other independent
refiners. Almost all of these refiners are located in California and many
have larger refining capacity and greater financial resources than does
Huntway. In 1994, Huntway's management believes that Shell Oil Company
accounted for a majority of the volume of liquid asphalt sales in the Northern
Market and that Huntway and three other competing refineries each accounted
for similar portions of the remaining volume of liquid asphalt sales in this
market area. Effective January 1, 1994, Chevron ceased producing asphalt in
Northern California. Due to the completion of rail offloading facilities in
1993 at Benicia, Huntway was able to increase asphalt sales from its
California refineries in 1994 over 1993 by 12%. However, asphalt pricing was
adversely impacted in 1994 due to the entry of a new asphalt producer in the
Northern California market. Huntway's management believes that Enron accounts
for approximately 65% of the liquid asphalt sales in the Southern market and
that Huntway and three other competing refineries account for the remainder of
liquid asphalt sales. Huntway (through its Arizona-based subsidiary, Sunbelt)
ceased production in August 1993 due to adverse market conditions.
Employees
Huntway currently has 73 full-time and 10 part-time employees. The closure of
the Arizona refinery in August 1993 reduced employment by 34 employees. None
of Huntway's employees is represented by a union, and management believes that
labor relations have been excellent.
Environmental Matters
Huntway's refinery activities involve the transportation, storage, handling
and processing of crude oil and petroleum products which contain substances
regulated under various federal and state environmental laws and regulations.
Huntway is also subject to federal, state and local laws and regulations
relating to air emissions and disposal of wastewater and hazardous waste, as
well as other environmental laws and regulations, including those governing
the handling, treatment, release and cleanup of hazardous materials and
wastes.
Huntway has from time to time expended significant resources, both financial
and management, to comply with environmental regulations and permitting
requirements and anticipates that it will continue to be required to expend
financial and management resources for this purpose in the future. Stringent
new environmental regulations have been adopted recently which will require
most refiners in Huntway's market area to expend substantial sums in order to
comply. However, these regulations principally impact refiners which produce
motor vehicle fuels which Huntway generally does not produce. Compliance with
such regulations and requirements has not had a material adverse effect on the
assets, financial position or results of operations of Huntway. Huntway
estimates that its environmentally-related remediation expenditures in 1995
will total approximately $150,000 with such expenditures totaling $60,000 in
1994 and $60,000 in 1993. Environmentally-related remediation expenditures in
1994 were less than anticipated due to permitting delays resulting from
regulatory agencies. This anticipated increase in costs in 1995 is primarily
associated with the closure of a hazardous waste surface impoundment at its
Wilmington refinery.
Item 2. Properties of the Partnership
Wilmington Refinery
The Wilmington refinery and its related facilities are located on a seven-acre
site under a lease expiring on December 31, 2003. This ground lease covers
three contiguous parcels: (a) land owned by and leased directly from
Industrial Asphalt on which Huntway's tank farm is located; (b) land owned by
the Southern Pacific Railroad leased to Industrial Asphalt for a term ending
June 1, 2032 on which the processing facility is located; and (c) two strip
parcels bordering the facility owned by Southern Pacific and leased to
Industrial Asphalt under a lease cancelable upon 30 days notice which are used
for access to the refinery. In addition, the ground lease grants Huntway a
non-exclusive license in Industrial Asphalt's rights of access to the
properties under an agreement with Southern Pacific. The Partnership has the
right to (i) purchase from Industrial Asphalt an undivided interest in the
land under the tank farm at fair market value and (ii) assume the two Southern
Pacific leases from Industrial Asphalt. Wilmington has 108,000 barrels of
crude oil storage on site. Huntway also owns refined product tankage for
storage of liquid asphalt and other refined products which Huntway's
management believes is adequate for its needs.
Benicia Refinery
The Benicia refinery is located adjacent to the Carquinez Strait, near the San
Francisco Bay. The refinery and related facilities are located on nineteen
acres of land owned by Huntway. Crude oil tankage at Benicia totals 216,000
barrels, while refined product tankage for storage of liquid asphalt and light
oils totals 326,000 barrels. To enhance Benicia's ability to receive crude
oil by water and to ship finished products by ship and barge, in 1984 Huntway
leased dock and loading facilities for a term expiring February 2031. The
dock facilities are connected to the refinery by two two-mile pipelines.
Arizona Refinery
The Arizona refinery and its related facilities are located on a thirty-seven
acre parcel leased from the City of Mesa under a lease expiring on April 12,
2008 (with options to renew for up to an additional twenty years until 2028).
The Arizona refinery has 100,000 barrels of crude oil storage capacity, and
195,000 barrels of storage capacity for liquid asphalt and other refined
products.
Item 3. Legal Proceedings
In December 1992, the Partnership uncovered certain irregularities in its
financial accounts. These irregularities extended to the accounting records
utilized in the preparation of the Partnership's quarterly reports on Form 10-
Q for 1992, as filed with the Securities and Exchange Commission (SEC). As a
result, the quarterly financial information was restated and presented as a
part of the Partnership's Annual Report on Form 10-K which was filed with the
SEC on March 30, 1993. The Company has reported all of these irregularities
to appropriate governmental authorities, including the Securities and Exchange
Commission and the U.S. Attorneys office. The Partnership was notified in
early December 1992 that the SEC was commencing an informal investigation into
these financial irregularities and was further notified in late April 1993
that a formal investigation had begun. The Partnership has cooperated fully
with the SEC in its investigation. In July of 1994, the Partnership was
notified that the SEC had concluded its investigation and issued an order
specifying that the Partnership permanently cease and desist from committing
or causing any violations or future violations of Section 13(a), 13(b)(2)(A)
and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-13 and 13b2-1
thereunder. The SEC did not order a monetary penalty as a result of the
investigations. The Partnership has consented to the order without admitting
or denying any factual allegations contained in the order.
As a result of the Companys disclosures to the U.S. Attorneys office, the
Company has received a federal grand jury subpoena seeking documents. The
Company is responding to the subpoena and cooperating with the U.S. Attorneys
office in the course of this investigation.
In December 1992, two lawsuits were filed against the Partnership and certain
of its present and former officers. The lawsuits sought an unspecified amount
of damages and alleged that certain statements made by the Partnership failed
to adequately disclose material facts that would have impacted the trading
value of the Partnership's units. These lawsuits were settled in August 1993
pursuant to which the plaintiffs would receive a combination of $1,200,000 in
insurance proceeds and a $150,000 unsecured 7% note payable by the Partnership
in installments over a period ending December 15, 1995. The first and second
installment payments of $50,000 each plus interest were made on August 15,
1994 and January 15, 1995; the remaining installment of $50,000 plus interest
is due on December 15, 1995. The Court granted final approval of the
settlement on January 10, 1994.
Also in 1992, the Partnership and its subsidiary, Sunbelt Refining Company,
L.P., were charged by the State of Arizona with violations of certain
environmental regulations and provisions of the Arizona refinery's
installation permit. Sunbelt acknowledged that it had certain environmental
compliance problems in the past, but believed that none of these resulted in
any harm to public health or to the environment. While Huntway and Sunbelt
have consistently denied that any criminal activity occurred, the parties
agreed on December 21, 1993 to settle both the State's civil and criminal
charges. As part of the settlement, Sunbelt has agreed to pay a penalty of
$700,000 over a period of seven years without interest and to undertake
certain environmental improvements at the Arizona refinery. The penalty was
fully accrued for at June 30, 1994. On December 21, 1993 and January 7, 1994,
the Partnership made payments against the penalty of $150,000 and $100,000,
respectively. The next installment payment of $100,000 is due on January 7,
1996. The settlement, which consists of a civil consent judgment and a plea
agreement, has been reviewed and approved by the court, the U.S. Attorney's
Office and the U.S. Environmental Protection Agency. Under the terms of the
settlement, Huntway is released from any further liability for the alleged
violations and considers the matter closed. Huntway has instituted new
programs and procedures to ensure that it is operating in compliance with all
environmental laws and regulations.
The Partnership is party to a number of additional lawsuits and other
proceedings arising out of the ordinary course of its business. While the
results of such lawsuits and proceedings cannot be predicted with certainty,
management does not expect that the ultimate liability, if any, will have a
material adverse effect on the consolidated financial position or results of
operations of the Partnership.
Item 4. Submission of Matters to a Vote of Unitholders
No matters were submitted to a vote of Unitholders during calendar year 1994.
PART II
Item 5. Market for Registrant's Units
and Related Unitholder Matters
Market
As of March 1, 1995 there were approximately 2,000 holders of record of
Huntway Partners, L.P. Units. The Units are traded on the New York Stock
Exchange under the ticker symbol "HWY". The following table indicates the
high and low sale prices of the Huntway Partners, L.P. Preference Units, (see
Note 7, Expiration of Preference Period) as reported by the Composite
Transactions listing in the Wall Street Journal for the periods indicated:
Year Ended Distribution
1993 High Low Close Paid
1st Quarter 2 1 1/4 1 3/8 --
2nd Quarter 1 1/2 5/8 1 --
3rd Quarter 1 1/4 3/4 7/8 --
4th Quarter 1 5/8 3/4 1 3/8 --
Year Ended Distribution
1994 Paid
1st Quarter 3 1 3/8 2 3/4 --
2nd Quarter 2 5/8 1 5/8 1 3/4 --
3rd Quarter 1 3/4 1 1/8 1 1/8 --
4th Quarter 1 1/4 5/8 1 --
Cash Distribution Policy
No cash distributions were paid to holders of Preference Units or Common Units
during 1994.
Cash distributions to holders of Preference Units were suspended effective
November, 1990 due to Huntway's operating and working capital needs for the
fourth quarter, coupled with its bank principal and capital expenditure
requirements.
Under the Partnership's June 23, 1993 restructuring agreement with its
principal lenders, cash distributions to unitholders are prohibited until the
earlier of payment in full on all obligations to the lenders or December 31,
2008.
"Cash Distribution Policy" is incorporated by reference herein to pages 17
through 20 of the Partnership's Registration Statement on Form S-1 dated
November 9, 1988, Registration No. 33-24445.
Item 6. Selected Financial Data
(In thousands except per unit and per barrel data)
The following historical selected financial data as of and for each of the
years in the five-year period ended December 31, 1994, are derived from the
financial statements of Huntway Partners, L.P., which have been audited by
Deloitte & Touche LLP, independent auditors, which financial statements and
reports thereon (except for 1990 and 1991 and as to the balance sheet, 1992)
are included elsewhere herein. All of the selected information should be
read in conjunction with the financial statements and notes thereto.
Huntway Partners, L.P. Historical
Year Ended
December 31,
1990 1991 1992 1993 1994
OPERATING DATA
Revenues $119,559 $115,843 $104,943 $100,947 $ 75,394
Crude Oil, Processing,
Selling and Administrative
Cost and Expenses 121,986 101,116 106,057 92,518(d) 71,058
Interest Expense 7,871 8,706 8,632 7,280 4,984
Provision for Plant
Closure -- -- -- 16,013(c) --
Depreciation and
Amortization 4,239 2,999 4,567 3,806(e) 2,356
Net Income (Loss) $ (14,537) $3,022 $(14,313) $(18,670)(c)(d)(e) $(3,004)
Net Income (Loss)
Per Unit (a) $ (1.27) $ 0.26 $ (1.24) $ (1.60) $ (0.26)
Barrels Sold 5,765 6,101 5,807 5,414 4,406
Revenues Per Barrel $ 20.74 $ 18.99 $ 18.07 $ 18.65 $ 17.11
BALANCE SHEET DATA
Working Capital $(26,339)(b) $(19,981)(b) $(83,482)(b) $2,289(b) $2,725(b)
Total Assets 106,890(b) 110,891(b) 107,232(b) 90,745(b) 85,796 (b)
Long-term Obligations 43,600 51,667 742 89,570 91,312
Partners' Capital 16,912(b) 19,934(b) 5,621(b) (13,049)(b)(c)(d)(e) (16,053)(b)
a) Assumes that a weighted average of 11,319,949 units were outstanding in
1990 and that 11,556,250 units were outstanding in 1991 through 1994. The
allocation to the general partners of their interest in net income (loss)
has been deducted before computing net income (loss) per unit.
b) After the cumulative LIFO reserve of $641, $1,220, $36 and $1,203 in 1990,
1991, 1992, 1993 and 1994, respectively - see Note 2.
c) Non-recurring charges recorded in June 1993 relating to the Sunbelt
refinery which was shut down in August 1993.
d) Includes $2,078 of non-recurring charges relating to professional fees
incurred relating to the restructuring of indebtedness completed in 1993.
e) Includes $778 of non-recurring charges relating to amortization of loan
acquisition costs.
Item 7. Management's Discussion and Analysis of Results of
Operations and Financial Condition
Throughout the following discussion, the business operated by Huntway
Partners, L.P. is referred to as "Huntway".
The following should be read in conjunction with the foregoing "Selected
Financial Data" and the historical financial statements and notes included
elsewhere in this report.
RESULTS OF OPERATIONS
Huntway is principally engaged in the processing and sale of liquid asphalt
products, as well as the production of other refined petroleum products such
as jet fuel, diesel fuel, gas oil, naphtha, kerosene distillate and bunker
fuel.
Huntway's ability to generate income depends principally upon the margins
between the prices for its refined petroleum products and the cost of crude
oil, as well as upon demand for liquid asphalt, which affects both price and
sales volume.
Historically, refined petroleum product prices (including prices for liquid
asphalt although to a lesser degree than Huntways other refined petroleum
products) generally fluctuate with crude oil price levels. Accordingly, there
has not been a relationship between total revenues and income due to the
volatile commodity character of crude oil prices.
Accordingly, income before selling and administration, interest and
depreciation expense provides the most meaningful basis for comparing
historical results of operations discussed below.
1994 COMPARED WITH 1993
Net loss for the year ended December 31, 1994 was $3,004,000, or $.26 per
unit, compared with a net loss of $18,670,000, or $1.60 per unit during 1993.
The decrease in the net loss is principally attributable to costs related to
the closure and revaluation of the Sunbelt refinery in 1993. In 1993, the
Partnership wrote down the carrying value of the Sunbelt refinery and related
assets to their estimated fair values by recording a provision of $16,013,000
including a provision for net estimated closure and maintenance costs during
the shut- down period. Additionally, net operating losses at Sunbelt in 1993
were $630,000. Absent these charges, the Partnership would have incurred a
loss of $2,027,000 in 1993 versus a loss of $3,003,000 in 1994. The decrease
in California results between years is primarily due to reduced operating
margin partially offset by lower selling, general and administrative and lower
interest and depreciation and amortization expense as explained below.
The following table sets forth the effects of changes in price and volume on
sales and crude oil processing costs on the year ended December 31, 1994 as
compared to the year ended December 31, 1993:
Crude & Net Barrels
Sales Processing Margin Sold
Year Ended
December 31, 1993 $ 100,947,000 $ 84,634,000 $ 16,313,000 5,414,000
Less Sunbelt
Contribution (18,522,000) (19,152,000) 630,000 (979,000)
Subtotal 82,425,000 65,482,000 16,943,000 4,435,000
Effect of Changes
in Price (6,492,000) 1,822,000 (8,314,000)
Effect of Changes
in Volume (539,000) (428,000) (111,000) (29,000)
Year Ended
December 31, 1994 $ 75,394,000 $ 66,876,000 $ 8,518,000 4,406,000
As reflected in the table above, the net margin fell $8,425,000, or 50%,
between periods. Volume in terms of barrels sold fell less than 1% versus
1993 while crude and processing costs rose 3% versus prior year. However,
product prices fell 9% between periods. In 1993, average product prices were
$18.59 a barrel versus $17.11 in 1994. Meanwhile, crude and processing costs
averaged $14.76 a barrel in 1993 versus $15.18 a barrel in 1994.
Huntways 1994 operating results (and specifically asphalt prices) were
adversely impacted by the January 17, 1994 earthquake in Southern California.
The earthquake reduced demand for asphalt in Southern California due to lack
of funding and a lack of equipment and personnel. Transportation dollars
(both State and Federal) were diverted from conventional asphalt road repair
work to concrete, steel and engineering expenditures which are all necessary
to repair freeways and bridges. In addition, road construction equipment and
CALTRANS personnel were diverted to earthquake repair projects. This lack of
demand for asphalt caused lower asphalt prices in Southern California. In
Northern California, additional competition beginning in the summer of 1994
caused asphalt prices to decline in the second half of the year.
Huntways other refined petroleum products such as gas oil, naphtha and
kerosene distillate also fell in price in 1994. The fall in price for these
products reflect a number of factors including weak worldwide wholesale
refinery margins as well as the effects of excess diesel and gasoline
inventories on the west coast of the United States coupled with the impact of
clean fuel requirements mandated to begin January 1, 1995. Cleaner,
reformulated fuels were mandated by the Environmental Protection Agency (EPA)
and the California Air Resources Board. The production of the clean fuels in
1994 for sale in 1995 caused inventories to increase on the West Coast as
demand remained flat and production increased. Inventories of fuels that did
not meet clean fuel specifications and that could not be sold at retail
effective January 1, 1995 were sold at reduced prices which, in turn, caused
Huntways light oil prices to decline.
Major U.S. and European refineries experienced weak wholesale margins in 1994
due to a myriad of market factors (most notably, excess supply due to excess
production); but for many of these refineries, their proprietary retail
outlets were achieving strong margins which tended to mitigate their weak
wholesale margins. Huntway does not operate any retail outlets and,
accordingly, its margins for its other refined petroleum products were hurt by
weak wholesale refinery margins.
Despite the fact that average crude and processing costs in 1994 approximated
1993, crude costs rose throughout 1994 due to the January 1994 earthquake
which destroyed one of the two pipelines which carried the heavy, lower-priced
crudes that Huntway purchases for its Southern California refinery. As a
result, crude oil that could be delivered into the Los Angeles area was able
to command higher premiums which also contributed to higher relative posted
prices for all California crude oil.
Selling, general and administrative expenses fell sharply in 1994 to
$4,182,000 versus $7,884,000 in 1993, or a decline of 47%. This decline
primarily reflects lower professional fees as 1993 results included
significant professional fees relating to the debt restructuring. In
addition, insurance expenses were reduced due to efforts installed to reduce
costs and bad debt expense was reduced due to better collection experience.
Interest expense declined $2,296,000, or 32%, due to the restructuring of the
Partnerships indebtedness in 1993.
Depreciation and amortization declined $1,450,000, or 38%, due to write down
of certain Sunbelt-related assets in 1993 as well as write off in 1993 of
previously recorded loan origination fees.
OUTLOOK AND FACTORS THAT AFFECT FUTURE RESULTS
A number of uncertainties exist that may affect Huntways future operations
including the possibility of further increases in crude costs that may not be
able to be passed on to customers in the form of higher prices. Additionally,
crude costs could rise to such an extent that Huntway may not have sufficient
letter of credit availability to purchase all the crude it needs to sustain
operations to capacity, especially during the summer season. If this
occurred, Huntway would be forced to reduce crude purchases which could
adversely impact results of operations. The Partnerships primary product is
liquid asphalt. Most of Huntways competitors produce liquid asphalt as a by-
product and are of much greater size and have much larger financial resources
than the Partnership. Accordingly, the Partnership has in the past, and may
in the future, have difficulty raising prices in the face of increasing crude
costs. As for many of Huntways competitors, the margins they receive on
asphalt is not as important to their operations as asphalt margins are to
Huntway.
Crude costs increased in 1994 due to the effects of the January 17, 1994
earthquake which destroyed one of the primary pipelines bringing crude to its
Wilmington refinery. Both of Huntways California refineries are vulnerable
to disruption in operations and reduced operating results due to the
possibility of additional earthquakes in California.
In 1994, the Partnership increased its exports to Mexico and is optimistic
that additional exports to Mexico will occur in 1995. However, uncertainty
exists due to the dramatic fall in the Mexican peso in late 1994 and early
1995. The fall in the peso makes Huntways refined petroleum products more
expensive in Mexico. However, the Partnership cannot presently determine what
effect the recent drop in the peso will have on its future exports to Mexico.
In 1994, significant public expenditures were required to repair freeways and
bridges that were damaged as a result of the January 17, 1994 earthquake.
Absent the earthquake, some of these funds would have been expended on
conventional asphalt road construction and repair. Additionally, in June
1994, the voters of California rejected a measure that would have provided an
additional $2.0 billion to pay for this damage to freeways and bridges that
occurred due to the earthquake. Accordingly, uncertainty exists regarding the
level of public road construction that will occur in 1995 due to the diversion
of significant funding in 1994 away from conventional asphalt road
construction and repair. If public funding for this conventional road
construction and repair were significantly reduced, operating results would be
adversely affected.
Uncertainty also exists due to the weather, as cold, wet weather is not
conducive to asphalt road construction and repair. Accordingly late 1994
results and early 1995 results were adversely impacted by unseasonably wet
weather in California. As a result, the Partnership expects to report a 1995
first quarter loss substantially in excess of the 1994 first quarter loss of
$949,000.
As a result of the factors described above, the outlook for the balance of the
year is uncertain, as results will depend to a large extent on crude prices
and public funding availability. The Partnership remains optimistic about
export growth potential and growth in the sale of higher margin polymer based
asphalt products. However, growth in these areas are also influenced by
funding uncertainties. Recent heavy rainfall in California has damaged
asphalt roads throughout the State which will eventually lead to increased
repair activity. Additionally, projected population growth in California and
an improving economy bodes well for future public and private road
construction activity.
Because of the foregoing, as well as other factors affecting the Partnerships
operating results, past financial performance should not be considered to be a
reliable indicator of future performance and investors should not use
historical trends to anticipate results or trends in future periods.
1993 COMPARED WITH 1992
Net loss for the year ended December 31, 1993 was $18,670,000, or $1.60 per
unit, compared with a net loss of $14,313,000, or $1.24 per unit, during 1992.
The increase in the net loss is principally attributable to costs related to
the closure and revaluation of the Sunbelt refinery. The Sunbelt refinery was
closed in August 1993 due to poor margins at the refinery resulting from an
excess supply versus demand condition for asphalt in the State, limited
working capital availability which restricted the ability of the Partnership
to purchase crude oil for the Sunbelt refinery and, to a lesser extent, the
impact of ongoing environmental investigations by the State of Arizona which
was settled in December 1993. Accordingly, the Partnership wrote down the
carrying value of the refinery and related assets to their estimated fair
value at June 30, 1993. The provision for plant closure totaled $16,013,000
and consisted of the write off of various intangible assets totaling
$4,037,000, the write down of the physical plant and related assets of
$9,376,000 as well as a provision for net estimated closure and maintenance
costs to be incurred during the shut down period of $2,600,000. The
improvement in California results between years is primarily attributable to
improved margins offset by significantly higher selling and administrative
expenses as discussed below.
The following table sets forth the effects of changes in price and volume on
sales and crude oil processing costs on the year ended December 31, 1993 as
compared to the year ended December 31, 1992:
Crude & Net Barrels
Sales Processing Margin Sold
Year Ended
December 31, 1992 $ 104,943,000 $ 99,828,000 $ 5,115,000 5,807,000
Effect of Changes
in Price 3,106,000 (8,438,000) 11,544,000
Effect of Changes
in Volume (7,102,000) (6,756,000) (346,000) (393,000)
Year Ended
December 31, 1993 $ 100,947,000 $ 84,634,000 $ 16,313,000 5,414,000
As reflected in the table, the net margin between sales and crude and
processing costs improved 242% from $.88 per barrel for 1992 to $3.01 per
barrel for 1993. Over all, net margin improved by $11,198,000, or 219%, while
sales volume in terms of barrels sold declined 7% for the year due to the
wind-down of operations at the Arizona refinery. Sales prices averaged $18.65
per barrel for 1993 as compared to $18.07 per barrel for 1992, an increase of
3% as a result of higher asphalt prices, especially in Northern California as
a major competitor announced in September that it would be withdrawing from
the Northern California asphalt market effective January 1, 1994. Increased
sales of higher value polymer modified asphalt also contributed to higher
overall product prices as demand for the rubberized asphalt product is
increasing. In addition, during 1993, uncertainties over the availability of
California Air Resources Board (CARB) specification diesel fuel which began to
be required in certain market areas effective October 1, 1993 caused middle
distillate refining margins to rise for much of the year. As the requirements
to use CARB diesel statewide were relaxed from prior directives, middle
distillate prices fell in the fourth quarter 17% from the average of the first
nine months of 1993. Crude and processing costs averaged $15.63 and $17.19
for the year ended December 31, 1993 and 1992, respectively, a decrease of
$1.56, or 9%. The decline in crude oil prices are difficult to explain with
any degree of reliance but generally crude prices declined in 1993 reflective
of an excess supply versus demand position worldwide. Worldwide market
conditions dictate minor to moderate swings in crude prices such as occurred
in 1993 and 1992.
Selling, general and administrative costs increased to $7,884,000 compared to
$6,229,000 in 1992, primarily as a result of a $1,515,000 increase in
professional fees. These increased fees resulted from financial
restructuring, litigation and ongoing investigations by Federal and State
agencies. Interest expense decreased $1,352,000, or 16%, in 1993 over 1992
due to the impact of the financial restructuring. Depreciation expense
decreased $761,000, or 17%, in 1993 due to write down of the Sunbelt refinery
partially offset by write-off to amortization expense of $778,000 in loan
origination fees at June 30, 1993.
CAPITAL RESOURCES AND LIQUIDITY
The pricing factors that affect the Partnerships cash requirements and
liquidity position are fluctuations in the selling prices for its refined
products caused by local market supply and demand factors including public and
private demand for road construction and improvement. Secondly, demand for
diesel fuel and gasoline, as well as fluctuations in the cost of crude oil
which is impacted by a myriad of market factors, both foreign and domestic,
influence the Partnerships cash requirements and liquidity positions. In
addition, capital expenditure requirements, including costs to maintain
compliance with environmental regulations as well as debt service
requirements, impact the Partnerships cash needs.
The Partnerships 1994 results were adversely impacted by the January 17, 1994
earthquake. The earthquake damaged a key pipeline which supplies Southern
California with the heavy California crude oil that Huntway refines into its
asphalt and other products. This damage caused prorations on the remaining
pipeline as the demand for crude through the pipeline exceeded supply.
Accordingly, this caused crude prices for the Partnership to rise.
Additionally, repair work to Southern California freeways and bridges damaged
by the earthquake were funded with State and Federal transportation dollars.
This diverted public funding from conventional asphalt road repair projects.
This diversion reduced demand for asphalt in Southern California causing
prices to decline. In Northern California, additional competition caused
asphalt prices to decline in the second half of 1994. Meanwhile, gas oil,
naphtha and kerosene distillate prices fell in 1994 in response to weak
wholesale refinery margins.
The combination of reduced prices and higher crude costs squeezed margins in
1994. Another factor contributing to higher crude costs was the increase in
world crude prices in 1994. World crude prices increased in 1994 in response
to increased demand as world economies improved. In addition, stable
production by OPEC producing countries (caused in part by the lack of Iraqian
production due to the continued boycott of its crude oil) prevented an
oversupply of crude, which in turn supported world crude prices. Finally
demand for lower-priced heavy California crude increased because other
refineries began to realize that they could use these lower-priced crudes in
their refinery process.
The combination of these factors caused margins to fall which adversely
impacted the Partnerships 1994 cash flow.
Cash declined $1,761,000 to $5,984,000 at December 31, 1994 from $7,745,000 a
year earlier. Capital expenditures totaled only $669,000 in 1994 while
principal payments on debt totaled $4,478,000. Over the three-year period
1991 to 1994, cash and cash equivalents increased by $5,863,000.
Operating cash flow in 1994 totaled $3,386,000. The net loss in 1994 of
$3,004,000 was partially offset by depreciation and amortization of
$2,356,000. Cash flow was generated in 1994 through the conversion of
$3,899,000 in accrued interest to debt and from reductions in accounts
receivable of $1,644,000 due to reduced sales levels in the fourth quarter of
1994 versus the fourth quarter of 1993 due to reduced asphalt prices and
reduced volume due to heavy rainfall in December 1994 in California. Asphalt
is not usually sold in wet, cold weather. Cash was also provided by the
$927,000 increase in accounts payable due to the impact of higher crude costs
in late 1994. Inventory remained essentially flat decreasing only $132,000 in
1994 thereby contributing modestly to operating cash flow. Offsetting these
increases were increases in prepaid expenses of $275,000 due to unamortized
turnaround expenses and the timing of insurance expenditures. Accrued
liabilities decreased $1,261,000 in 1994 primarily due to payments made
against property tax accruals. Finally, the Sunbelt closure reserve was
decreased $1,032,000 to provide for closure and maintenance costs during the
shut-down period.
Operating cash flow determinants in 1993 include the net loss of $18,670,000
inclusive of non-cash charges of $13,413,000 relating to the write down of the
Sunbelt refinery assets as well as depreciation and amortization of
$3,806,000. Additionally, new debt of $6,538,000 was recorded due to
conversion of accrued interest. Other components of cash flow from operating
activities, which totaled $2,726,000 in 1993, include decreases in inventory
of $3,184,000 and decreases in accounts receivable of $3,634,000 primarily due
to the shutdown of the Partnerships Sunbelt refinery; increases in accrued
liabilities of $852,000 primarily relating to provisions for property taxes,
decreases in accounts payable of $6,352,000 relating to the shutdown of the
Arizona refinery and decreases of $4,193,000 in accounts payable relating to
Huntway as $3,871,000 of overdue crude obligations were paid off with new
borrowings in early 1993.
Operating activities in 1992 used 5,527,000 in cash and reflected losses (net
of depreciation and amortization) of $9,746,000 due to low product prices.
Operating cash was generated in 1992 from the reduction in accounts receivable
of $2,158,000 due to reduced sales levels resulting from lower product prices
and lower volume stemming from reduced business activity in the markets that
Huntway serves due to the lingering recession in the Western United States.
Cash of $1,967,000 was generated in 1992 from deferred revenue prepayments on
future deliveries of products. Accrued liabilities increased $3,342,000
primarily due to accrual of unpaid interest and the fact that a scheduled
interest payment of $2,154,000 was unpaid at December 31, 1992 due to cash
liquidity problems. Accounts payable declined $2,745,000 in 1992 due to lower
crude purchases stemming from the cash liquidity problems that became apparent
in the fourth quarter of 1992.
Investing activities, as defined for the Statement of Cash Flows, have
primarily related to expenditures for required environmental compliance in
1992, 1993 and 1994. Investing activities in 1994 totaled $669,000 and were
less than anticipated as certain expenditures scheduled for 1994 were
postponed to 1995. The Partnership anticipates in 1995 that its capital
expenditures will total approximately $1,300,000, substantially all of which
will be required to maintain compliance with environmental regulations.
Capital expenditures in 1995 will be financed through a combination of cash on
hand and expected operating cash flow.
Cash flow from financing activities used $4,478,000 in cash in 1994 as the
Partnership paid its scheduled indebtedness under its restructuring agreement
with its lenders. In 1993, cash flow from financing activities provided
$6,031,000 in cash, while in 1992 cash flow provided by financing activities
totaled $8,090,000. These borrowings were necessary as a result of reduced
sales prices and reduced volume in the second half of 1992 and early 1993 and
were used to finance operations and to reduce accounts payable obligations.
On June 23, 1993, the Partnership reached agreement with its principal
lenders, restructuring approximately $75,300,000 of indebtedness including
accrued interest. The restructuring involves all of the Partnerships long-
term debt with the exception of its capital lease obligation and its senior
1993 variable rate demand industrial development revenue bonds and extends the
maturity of the borrowings as well as reducing the overall interest rates
charged. The agreement also restructured $7,000,000 of indebtedness to an
affiliate of its General Partner of which $2,000,000 was received by the
Partnership on December 11, 1992. On April 13, 1993, the Partnerships bank
exercised a guarantee in the amount of $5,000,000 issued by the affiliate of
the General Partner.
Under the agreement, the Partnership made payments in 1994 of principal and
interest aggregating $4,500,000. In 1995 and thereafter through 2008, the
Partnership must make annual payments of at least $5,000,000; except that
annual payments may not be less than the number of years subsequent to 1994
times $5,000,000 less $1,000,000. These payments will be made on a quarterly
basis. In addition to these minimum payments, the Partnership is also
obligated to pay its principal lenders, under certain conditions, 75% of
excess cash flow (under a defined formula) on a quarterly basis.
The agreement also provided the principal lenders with warrants to purchase
3,886,816 of the Partnerships common units at an exercise price of $.875 per
unit. The warrants expire on December 31, 2008 and contain certain anti-
dilution provisions that, among other things, would become effective if the
Partnership were to issue units at less than market value. The agreement
contains certain covenants including certain financial and working capital
covenants. The agreement prohibits distributions to unitholders until all
debt covered by the restructure agreement is paid in full excluding the
$7,000,000 Junior Subordinated Debenture.
The agreement provides for a $17,500,000 letter of credit facility through
December 31, 2000. This facility, which increased to $18,500,000 from June 1,
1994 through October 31, 1994, provides for crude purchase, hedging and other
activities. Fees for this facility are 2% on the face amount of any letter of
credit issued up to an aggregate of $14,500,000 and 3% on the face amount of
any letter of credit issued above that amount.
The Partnership is currently in discussions with its lenders regarding a
possible refinancing of its indebtedness. The Partnership has engaged an
advisor to assist it in this process. Presently, the Partnership cannot
determine if it will be successful in refinancing its current indebtedness nor
can it presently determine what impact a possible refinancing would have on
its current financial position. It is possible, however, that a refinancing
could result in substantial dilution to existing unitholders.
Management is addressing all areas of the Partnerships operations in an
effort to reduce costs, improve profitability and to provide a sound basis for
future operations. This evaluation resulted in the decision in 1993 to
temporarily suspend operations at its Sunbelt refinery located in Coolidge,
Arizona, until such time as there is a sustained improvement in market
conditions and to pursue a processing arrangement or sale of the refinery.
The primary factors involved in the Partnerships decision were poor margins
at the facility, a limitation on working capital availability and, to a lesser
extent, the impact of an environmental lawsuit and investigations filed by the
State of Arizona which was settled in 1993. The Partnership currently
believes it may eventually reopen the refinery as a terminal when market
conditions improve, which is not expected until late 1996 or 1997 due to
continued slow road construction activity in Arizona. Additionally, the
Partnership has temporarily frozen wages for all employees effective
January 1, 1995 and has made modifications to its employee benefit package to
conserve cash and reduce costs.
In 1993, the Partnership settled two significant lawsuits. As part of these
settlements, the Partnership paid $250,000 in 1993 towards a $700,000
settlement with the State of Arizona. The next $100,000 installment on this
penalty is due on January 15, 1996. Additionally, the Partnership settled a
lawsuit stemming from certain statements made by the Partnership that
allegedly failed to adequately disclose material facts that would have
impacted the trading value of the Partnerships units. As part of the
settlement, Huntway made a $50,000 payment plus interest at 7% in 1994 and
will make payments of $100,000 plus interest at 7% in 1995.
The Partnership currently believes it will be able to meet its obligations in
1995 through a combination of cash on hand and anticipated future operating
cash flows. However, due to the volatility of the business in which Huntway
operates, there can be no assurance that such cash flow will be adequate to
sustain operations and service indebtedness in future periods.
The Partnership believes its current level of letter of credit facilities are
sufficient to guarantee expected near-term requirements for crude oil
purchases, collateralization of other obligations and for hedging activities.
However, due to the volatility in the price of crude oil, there can be no
assurance that these facilities will be adequate in future periods.
INDEPENDENT AUDITORS' REPORT
Operating Committee and Partners
Huntway Partners, L.P.
(A Limited Partnership)
We have audited the accompanying consolidated balance sheets of Huntway
Partners, L.P. (a limited partnership) and subsidiary as of December 31, 1994
and 1993 and the related consolidated statements of operations, partners'
capital (deficiency) and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility of
the management of the Partnership. Our responsibility is to express an
opinion on these financial statements 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 our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Huntway
Partners, L.P. and its subsidiary as of December 31, 1994 and 1993 and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1994 in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Woodland Hills, California
February 2, 1995
HUNTWAY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
December 31, 1994 and 1993
(in thousands)
ASSETS
Notes 1994 1993
Current Assets:
Cash $ 5,984 $ 7,745
Accounts Receivable 2, 3 2,485 4,129
Inventories 2, 3 4,044 4,165
Prepaid Expenses 749 474
Total Current Assets 13,262 16,513
Property - Net 2, 3 69,857 71,230
Other Assets -- Net 2 805 1,072
Goodwill 2 1,872 1,930
Total $ 85,796 $ 90,745
LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY)
Current Liabilities:
Accounts Payable $ 5,984 $ 5,057
Current Portion of Long-term
Obligations 3 2,418 4,737
Reserve for Plant Closure 5 242 1,274
Accrued Interest 241 232
Other Accrued Liabilities 2 1,652 2,924
Total Current Liabilities 10,537 14,224
Long-term Debt 3 90,862 89,020
Other Long-term Obligations 4 450 550
Commitments & Contingencies 4, 8, 9
Partners' Capital (Deficiency): 3, 6, 7, 10
General Partners (160) (130)
Limited Partners (15,893) (12,919)
Total Partners' Capital (Deficiency) (16,053) (13,049)
Total $ 85,796 $ 90,745
See accompanying notes to consolidated financial statements.
HUNTWAY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 1994, 1993 and 1992
(in thousands, except per unit data)
NOTES 1994 1993 1992
Sales 11 $ 75,394 $ 100,947 $ 104,943
Costs & Expenses:
Crude Oil &
Processing Costs 2 66,876 84,634 99,828
Selling and
Administration Expenses 4,182 7,884 6,229
Provision for Plant
Closure 5 -- 16,013 ---
Interest Expense 3 4,984 7,280 8,632
Depreciation and
Amortization 2 2,356 3,806 4,567
Total Costs and Expenses 78,398 119,617 119,256
Net Income (Loss) 2 (3,004) (18,670) (14,313)
Net Income (Loss) Per Unit 2, 6 $ (0.26) $ (1.60) $ (1.24)
HUNTWAY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)
For the years ended December 31, 1994, 1993 and 1992
(in thousands)
General Limited
Partners Partners Totals
Balance at December 31, 1991 $ -- $ 19,934 $ 19,934
Net Loss for the Year Ended
December 31, 1992 -- (14,313) (14,313)
Balance at December 31, 1992 -- 5,621 5,621
Net Loss for the Year Ended
December 31, 1993 (130) (18,540) (18,670)
Balance at December 31, 1993 (130) (12,919) (13,049)
Net Loss for the Year Ended
December 31, 1994 (30) (2,974) (3,004)
Balance at December 31, 1994 $ (160) $ (15,893) $(16,053)
See accompanying notes to consolidated financial statements.
HUNTWAY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1994, 1993 and 1992
(in thousands)
1994 1993 1992
Cash Flows From Operating Activities:
Net Income (Loss) $ (3,004) $ (18,670) $ (14,313)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by Operations:
Amortization of Loan Fees -- 1,026 445
Other Depreciation and Amortization 2,356 2,780 4,122
Interest Expense Paid by the 3,899 6,538
Issuance of Notes
Write Down of Assets -- 13,413 --
Changes in Operating Assets and Liabilities:
Decrease (Increase) in Accts.
Receivable 1,644 3,634 2,158
Decrease (Increase) in Inventories 132 3,184 584
Decrease (Increase) in Prepaid
Expenses (275) 1,207 (1,087)
Increase (Decrease) in
Deferred Revenues -- (1,967) 1,967
Change in Plant Closure Reserve (1,032) 1,274 ---
Increase (Decrease) in Accounts
Payable 927 (10,545) (2,745)
Increase (Decrease) in Accrued
Liabilities (1,261) 852 3,342
Net Cash Provided By (Used By)
Operating Activities 3,386 2,726 (5,527)
Cash Flows From Investing Activities:
Additions to Property (745) (1,000) (2,210)
Additions to Other Assets 76 (156) (330)
Net Cash Used By Investing Activities (669) (1,156) (2,540)
Cash Flows From Financing Activities:
Proceeds of Bank Notes Payable -- 5,872 9,516
Proceeds of Other Notes Payable -- 571 3,257
Repayments of Long-term Obligations (4,478) (412) (4,683)
Net Cash Provided by (Used by)
Financing Activities (4,478) 6,031 8,090
Net Increase (Decrease) In Cash (1,761) 7,601 23
Cash Balance Beginning of Year 7,745 144 121
Cash Balance End of Year $ 5,984 $ 7,745 $ 144
Supplemental Disclosures:
Interest Paid During the Period $ 1,074 $ 1,127 $ 6,467
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
On June 23, 1993, Huntway Partners, L.P. restructured $82,300,000 of
indebtedness. The restructuring resulted in a reduction of the interest rate
on the indebtedness as well as reducing the required minimum annual debt
service obligation. In 1994, in accordance with its agreement with its
lenders (see Note 3. Financing Arrangement), Huntway paid $4,500,000 in
combined principal and interest payments against this indebtedness.
At December 31, 1994, the cash position of the Partnership was $6.0 million.
In the opinion of management, cash on hand together with anticipated cash flow
in 1995 will be sufficient to meet Huntways minimum debt service and other
obligations in the current year.
NOTE 2. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General. Huntway Partners is engaged primarily in the operation of a 6,000
barrel-per-day oil refinery located in Southern California, a 9,000 barrel-
per-day oil refinery located in Northern California and an 8,500 barrel-per-
day refinery in Arizona (see Note 5, Plant Closure), which produce and sell
refined petroleum products. Huntway Partners has adopted a calendar year
fiscal period.
The Partnership is subject to various environmental laws and regulations of
the United States and the states of California and Arizona. As is the case
with other companies engaged in similar industries, the Partnership faces
exposure from potential claims and lawsuits involving environmental matters.
These matters may involve alleged soil and water contamination and air
pollution. The Partnership's policy is to accrue environmental and clean-up
costs when it is probable that a liability has been incurred and the amount of
the liability is reasonably estimable.
Total limited partnership units outstanding at December 31, 1994, 1993 and
1992 were 11,556,250. In addition, 3,886,816 warrants to purchase limited
partnership units at $.875 per unit through December 31, 2008 were issued as
part of the Partnership's June 23, 1993 restructuring.
Principles of Consolidation. The consolidated financial statements include
the accounts of Huntway Partners and its subsidiary, Sunbelt Refining Company,
L.P. ("Sunbelt"). All significant inter-company items have been eliminated in
consolidation.
Exchange Transactions. In connection with its refinery activities, Huntway
Partners engages from time to time in exchange transactions common to the
industry where crude oil or refined product is exchanged with other unrelated
entities for similar commodities.
The accounting of such exchanges is based on the recorded value of the
commodities relinquished. Net exchange balances included in accounts
receivable at December 31, 1994 and 1993 were comprised of receivables of
$3,403 and $17,964, respectively, offset by payables of $28,332 in 1994 and
$21,666 in 1993. The gain or loss from such transactions has not been
significant to Huntway Partners' consolidated financial statements.
Environmental Costs. The Partnership expenses or capitalizes costs associated
with environmental clean-up and other repairs and maintenance at its
refineries in accordance with Emerging Issues Task Force Topic 90-8 and
exhibits thereto.
Turnaround Costs. Cost of turnarounds, which consist of complete shutdown and
inspection of a refinery unit for repair and maintenance, are deferred and
amortized over the estimated period of benefit which generally ranges from two
to five years.
Income Taxes. No provision has been made for income taxes in the accompanying
consolidated financial statements. The taxable income or loss of Huntway
Partners is allocated to each partner in accordance with the provisions of the
Partnership agreement.
The taxable income or loss allocated to the partners in any one year may vary
from the amount of income or loss reported for financial statement purposes,
due to differences between the time that certain income and expense items are
recognized and the time when they are reported for financial statement
purposes.
The partnership agreement of Huntway Partners provides generally that income,
loss and cash distributions be allocated 1 percent to the general partner and
99 percent to the limited partners.
In turn, each partner's tax status will determine the appropriate income tax
for that partner's allocated share of Huntway Partners' taxable income or
loss.
Inventories. Crude oil and finished product inventories are stated at cost
determined by the last-in, first-out method (LIFO) , which is not in excess of
market.
Management believes the LIFO method of accounting for inventories is
preferable because it more closely matches revenues and expenses and reflects
the prevailing practice in the petroleum industry.
The effect of LIFO was to increase the net loss and net loss per limited
partners in 1994 by approximately $1,167,000 and 10 cents and to decrease the
net loss and net loss per limited partner unit in 1993 by approximately
$1,184,000 and 10 cents. In 1992, the effect of LIFO was to increase the net
loss and net loss per limited partner unit by $579,000 and 5 cents.
Inventories at December 31, 1994 and 1993 were as follows:
1994 1993
Finished Products $2,792,000 $1,912,000
Crude Oil and Supplies 2,455,000 2,289,000
5,247,000 4,201,000
Less LIFO Reserve (1,203,000) (36,000)
Total $4,044,000 $4,165,000
Property and Depreciation. Property is stated at cost and depreciated using
the straight-line method over the estimated useful lives of the assets.
Facilities which are temporarily closed are retained in the property accounts
as idle facilities and are depreciated.
Property at December 31, 1994 and 1993 consisted of:
Depreciable
Life 1994 1993
Land $ 2,176,000 $ 2,176,000
Buildings 40 yrs. 810,000 799,000
Refineries and Related
Equipment 40 yrs. 66,510,000 65,653,000
Other 5 - 10 yrs. 1,032,000 730,000
Construction in Progress 261,000 686,000
Idle Facilities, Less Accumulated
Depreciation of $1,938,000 and
$1,617,000 as of December 31,
1994 and 1993, respectively 11,041,000 11,361,000
81,830,000 81,405,000
Less Accumulated Depreciation
and Amortization (11,973,000) (10,175,000)
Property - Net $ 69,857,000 $71,230,000
Other Assets. Other assets are stated at cost and amortized, where
appropriate, using various methods over the useful lives of the assets.
Other assets at December 31, 1994 and 1993 consisted of:
1994 1993
Computer Software $ 564,000 $ 555,000
Deposits 361,000 472,000
Other 434,000 408,000
1,359,000 1,435,000
Less Accumulated Amortization (554,000) (363,000)
Other Assets - Net $ 805,000 $1,072,000
Goodwill. Goodwill is stated at cost and amortized using the straight-line
method over a period of 40 years and relate to the Partnerships California
refineries. Huntway Partners refineries are designed to produce asphalt and
unfinished light-end products, and accordingly, are not prone to obsolescence
to the same degree as more sophisticated refineries. The Partnership
continually evaluates the existence of goodwill impairment on the basis of
whether the goodwill is fully recoverable from projected, undiscounted net
cash flows of the two refineries. The related accumulated amortization at
December 31, 1994 and 1993 was $415,000 and $357,000, respectively.
Interest Capitalization. Huntway Partners and Sunbelt capitalize interest
incurred in connection with the construction of refinery facilities. The
amount of interest cost capitalized during the year ended December 31, 1992
was $155,000. No interest was capitalized in 1994 or 1993.
Deferred Revenues. Deferred revenues are recorded as cash is collected on
sales agreements which provide for future delivery of refined products.
Revenues are recognized as the refined products are delivered.
Other Accrued Liabilities. Included in other accrued liabilities are accrued
property taxes of $497,000 and $2,059,000 at December 31, 1994 and 1993,
respectively.
Reclassifications. Certain items in the prior years financial statements
have been reclassified to conform to the 1994 presentation.
NOTE 3. FINANCING ARRANGEMENTS
On June 23, 1993, the Partnership reached agreement with its principal
lenders, restructuring approximately $75,300,000 of indebtedness including
accrued interest through December 31, 2008. The restructuring involves all of
the Partnership's long-term debt with the exception of its capital lease
obligation and its series 1988 variable rate demand industrial development
revenue bonds and extends the maturity of the borrowings as well as reducing
the overall interest rates charged. The agreement also restructured
$7,000,000 of indebtedness to an affiliate of its General Partner of which
$2,000,000 was received by the Partnership on December 11, 1992. On April 13,
1994, the Partnership's bank exercised a guarantee in the amount of $5,000,000
issued by the affiliate of the General Partner.
Under the agreement, the Partnership was obligated to and did make minimum
payments beginning March 31, 1994 of principal and interest aggregating
$4,500,000 in 1994. In 1995 and thereafter, the Partnership is generally
obligated to make minimum annual payments, principal and interest of at least
$5,000,000, except that all annual payments made subsequent to 1994 must not
aggregate to less than the number of years subsequent to 1994 times $5,000,000
less $1,000,000. Payments under the agreement are made on a quarterly basis.
In addition to these minimum payments, the Partnership is also obligated to
pay its principal lenders, under certain conditions, 75% of excess cash flow
(under a defined formula) on a quarterly basis.
The agreement also provided the principal lenders with warrants to purchase
3,886,816 of the Partnership's common units at an exercise price of $.875 per
unit. The warrants expire on December 31, 2008 and contain certain anti-
dilution provisions that, among other things, would become effective if the
Partnership were to issue units at less than market value. The agreement
contains certain covenants including certain financial and working capital
covenants the most restrictive of which provides that the Partnership must
earn EBITDA (earnings before interest, taxes and depreciation and
amortization) of at least $3,000,000 for any four consecutive quarters. The
partnership anticipates that it will be in default of this covenant at
March 31, 1995 and possibly June 30, 1995, and, accordingly, has received a
waiver from its lenders of this EBITDA-related covenant for the four quarter
period ended March 31, 1995 and June 30, 1995. The partnership believes that
it will be in compliance with this covenant for the four quarter period ended
September 30, 1995 and December 31, 1995.
The agreement prohibits distributions to unitholders until all debt covered by
the restructure agreement is paid in full excluding the $7,000,000 Junior
Subordinated Debenture.
The agreement provides for a $17,500,000 letter of credit facility through
December 31, 2000. This facility increased to $18,500,000 from June 1, 1994
through October 31, 1994 and provides for crude purchase, hedging and other
activities. Fees for this facility are 2% on the face amount of any letter of
credit issued up to an aggregate of $14,500,000 and 3% on any letter of credit
issued above that amount.
The Partnership's debt as of December 31, 1994 and December 31, 1993 consisted
of the following:
1994 1993
8% Priority Secured Notes due December 31, 1994 $ -- $ 3,995,000
8% Senior Secured Notes due December 31, 2000 24,680,000 23,106,000
Subordinated Secured Notes due December 31, 2008 52,205,000 50,167,000
Bearing Interest at 4% Per Annum Until the
Earliest of December 31, 2000 or the Retirement
of the 8% Senior Secured Notes and Thereafter
at 12-1/4% Per Annum
Junior Subordinated Secured Debentures due 7,437,000 7,147,000
December 31, 2020 and Bearing Interest at 4%
Per Annum until the Retirement of the Senior
Secured Notes and Thereafter at 12% Per Annum
Series 1988 Variable Rate Demand Industrial 8,600,000 8,600,000
Development Bonds due September 1, 2008,
Interest Payable Monthly at Rates Determined
Weekly Based on Market Rates for Comparable
Interest (5.75% and 3.5% at December 31, 1994
and 1993, respectively) and Collateralized by a
Standby Letter of Credit Issued by a Bank
Capital Lease Obligations 358,000 742,000
Total 93,280,000 93,757,000
Less Amount Classified as Current 2,418,000 4,737,000
Net Long-Term Debt $90,862,000 $89,020,000
All of the Partnership's assets serve as collateral for these issues.
Minimum required principal payments, as of December 31, 1994, under the
Partnership's debt agreements are as follows:
1995 $ 2,418,000
1996 3,198,000
1997 3,297,000
1998 3,432,000
1999 and Thereafter 80,935,000
Total $93,280,000
NOTE 4. CONTINGENCIES
In December 1992, the Partnership uncovered certain irregularities in its
financial accounts. These irregularities extended to the accounting records
utilized in the preparation of the Partnership's quarterly reports on Form 10-
Q for 1992, as filed with the Securities and Exchange Commission (SEC). As a
result, the quarterly financial information was restated and presented as a
part of the Partnership's Annual Report on Form 10-K which was filed with the
SEC on March 30, 1993. The Company has reported all of these irregularities
to appropriate governmental authorities, including the Securities and Exchange
Commission and the U.S. Attorneys office. The Partnership was notified in
early December 1992 that the SEC was commencing an informal investigation into
these financial irregularities and was further notified in late April 1994
that a formal investigation had begun. The Partnership has cooperated fully
with the SEC in its investigation. In July of 1994, the Partnership was
notified that the SEC had concluded its investigation and issued an order
specifying that the Partnership permanently cease and desist from committing
or causing any violations or future violations of Section 13(a), 13(b)(2)(A)
and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-13 and 13b2-1
thereunder. The SEC did not order a monetary penalty as a result of the
investigations. The Partnership has consented to the order without admitting
or denying any factual allegations contained in the order.
As a result of the Companys disclosures to the U.S. Attorneys office, the
Company has received a federal grand jury subpoena seeking documents. The
Company is responding to the subpoena and cooperating with the U.S. Attorneys
office in the course of this investigation.
In December 1992, two lawsuits were filed against the Partnership and certain
of its present and former officers. The lawsuits sought an unspecified amount
of damages and alleged that certain statements made by the Partnership failed
to adequately disclose material facts that would have impacted the trading
value of the Partnership's units. These lawsuits were settled in August 1994
pursuant to which the plaintiffs would receive a combination of $1,200,000 in
insurance proceeds and a $150,000 unsecured 7% note payable by the Partnership
in installments over a period ending December 15, 1995. The Court granted
final approval of the settlement on January 10, 1994.
The Partnership and its subsidiary, Sunbelt Refining Company, L.P., were
charged by the State of Arizona with violations of certain environmental
regulations and provisions of the Arizona refinery's installation permit.
Sunbelt acknowledged that it had certain environmental compliance problems in
the past, but believed that none of these resulted in any harm to public
health or to the environment. While Huntway and Sunbelt have consistently
denied that any criminal activity occurred, the parties agreed on December 21,
1993 to settle both the State's civil and criminal charges. As part of the
settlement, Sunbelt has agreed to pay a penalty of $700,000 over a period of
seven years without interest and to undertake certain environmental
improvements at the Arizona refinery. Huntway has instituted new programs and
procedures to ensure that it is operating in compliance with all environmental
laws and regulations.
The Partnership is party to a number of additional lawsuits and other
proceedings arising out of the ordinary course of its business. While the
results of such lawsuits and proceedings cannot be predicted with certainty,
management does not expect that the ultimate liability, if any, will have a
material adverse effect on the consolidated financial position or results of
operations of the Partnership.
NOTE 5. PLANT CLOSURE
In August 1993, the Partnership suspended operations at its Sunbelt refinery
located in Coolidge, Arizona. The primary factors involved in this decision
were poor margins at the facility, limited working capital availability and,
to a lesser extent, the impact of an environmental lawsuit and investigation
filed by the State of Arizona which was settled in 1993. The Partnership has
taken steps in 1994 to reduce the holding costs of the refinery and is
considering operating the refinery as a terminal when market conditions
improve, which is not expected to occur in the current year. The Partnership
would also consider a sale of the entire refinery or a processing arrangement
for part of the refinery.
Accordingly, at June 30, 1993, the Partnership wrote down the carrying value
of the refinery and related assets to their estimated fair values.
The provision for plant closure consisted of the following:
Provision for Closure and Maintenance Costs During
the Shut-down Period Beginning July 1, 1993 $ 2,600,000
Write Off of Intangible Assets Associated with
Ongoing Refining Operations 4,037,000
Write Down of Refining Assets to Estimated Fair 9,376,000
Value
Total $16,013,000
Subsequently, through December 31, 1994, approximately $2,358,000 of closure
and maintenance costs have been charged against the reserve.
The Sunbelt refinery assets are classified as a non-current asset as Huntway
currently believes it is probable that the refinery assets will not be sold in
the current year.
NOTE 6. EARNINGS PER UNIT AND ALLOCATION OF INCOME AND LOSS
Earnings per unit is calculated based upon the weighted average number of
limited partner equivalent units outstanding. Limited partner equivalent units
for the year ended December 31, 1994 and 1993 is calculated by adding to the
11,556,250 actual limited partnership units outstanding 116,730 additional
units representing the general partners overall 1% interest.
Weighted average limited partner equivalent units outstanding was 13,240,875
for the quarter ended December 31, 1993. Limited partner equivalent units
outstanding for the fourth quarter of 1993 was calculated by adding to the
11,556,250 actual limited partnership units outstanding 1,552,216 equivalent
units related to warrants issued as part of the Partnership's recent
restructuring, as more fully described in Note 3, Financing Agreements, and
132,409 additional units representing the general partners' overall 1%
interest. For the year ended December 31, 1994 and 1993, the effect of
outstanding options and warrants is anti-dilutive and, accordingly, has been
excluded from the calculation.
Generally, partnership income and loss is allocated 1% to the general partners
and 99% to the limited partners. In 1993 and 1992, because the general
partners combined general and limited capital accounts had been fully
depleted, 100% of the losses were allocated to the limited partners until
their capital accounts had also been reduced to zero. Thereafter, losses were
allocated 1% to the general partners and 99% to the limited partners. The
Partnership reclassified in 1993 to general partners capital $979,000 of
equity attributable to the general partners limited partnership interest
previously classified as limited partners capital.
NOTE 7. EXPIRATION OF PREFERENCE PERIOD
On December 31, 1993 the preference period for Huntway's Preference units
terminated pursuant to Huntway's amended and restated agreement of limited
partnership. Upon this termination, all preference units were automatically
converted into common units pursuant to the terms of the partnership
agreement. Effective January 1, 1994, common units replaced preference units
and traded in the form of depository receipts. Holders of depository receipts
were required to take no action as a result of this expiration. All future
transfers will be affected by the issuance to the transferee of new depository
receipts representing common units.
NOTE 8. LEASE COMMITMENTS
Huntway Partners has entered into certain ground leases for its refinery
facilities. Such leases range from five to 41 years in duration. All such
leases are classified as operating leases.
Future minimum annual rental payments required under operating leases, which
have non-cancelable lease terms in excess of one year, as of December 31, 1994
are:
1995 $ 300,000
1996 300,000
1997 300,000
1998 300,000
1999 and Beyond 1,313,000
Total $2,513,000
Huntway Partners also leases a deep water terminal facility in Benicia,
California. Under terms of the lease agreement, Huntway Partners pay minimum
annual lease payments of approximately $539,000 through the year 2031, subject
to an escalation clause. This lease is cancelable upon one year's notice and
accounted for as an operating lease.
Rental expense for all operating leases (some of which have terms of less than
a year) was $1,259,000, $1,524,000, and $1,576,000 for the years ended
December 31, 1994, 1993 and 1992, respectively.
NOTE 9. PROFIT SHARING AND TAX DEFERRED SAVINGS (401K) PLAN AND PENSION PLAN
Huntway Partners has a profit sharing and tax deferred savings (401K) plan and
a defined contribution pension plan. Huntway Partners' contributions to the
plans generally vest to participants on the basis of length of employment.
Beginning in 1994, Huntway Partners matches up to 2% of participants pre-tax
contributions to the tax deferred savings (401K) plan.
Profit sharing contributions by Huntway Partners will be made from profits in
an amount up to 10 percent of the aggregate base compensation of all
participants in the plan, not to exceed Huntway Partners' current net income.
In 1992 contributions to the Plan totaled $83,000. In 1993 and 1994, no
contributions were made to the plan.
In addition, a minimum pension contribution equal to 4% (5% prior to December
31, 1994) of participants' base compensation must be made each year regardless
of current profits or losses. The amount of Huntway Partners contributions
charged to income for the years ended December 31, 1994, 1993 and 1992 were
$205,000, $281,000 and $290,000, respectively.
NOTE 10. UNIT OPTION PLAN
The Partnership maintains a 1989 Salaried Employee Partnership Unit Option
Plan (the "Plan") adopted by the Operating Committee. The Plan is administered
by a sub-committee (the "sub-committee") of the Operating Committee. The Plan
authorizes the Partnership to grant to salaried officers and employees of the
Partnership non qualified options to purchase Common Units. The Partnership
has reserved 1,022,000 Common Units to be issued pursuant to the exercise of
options granted under the Plan. The Plan will terminate on March 6, 1999. No
person serving on the Operating Committee or the Plan Committee, who is not an
employee of Huntway, is eligible to participate in the Plan.
On September 15, 1993, the sub-committee repriced 39,600 options previously
issued at prices from $3.50 per unit to $6.00 per unit to an exercise price of
$1 per unit. Under the repricing agreement, 79,200 previously issued options
were converted to 39,600 options (or 50%) at a new exercise price of $1 per
unit. Additionally, 25,000 previously issued options were canceled. These
newly priced options vest 50% on the second anniversary of the option grant
date and 50% on the third anniversary of the option grant date, except in the
case of (i) the optionees' death or disability; (ii) retirement in the event
the employee has three years of service with the Partnership; or (iii) change
in control of the Managing General Partner.
The sub-committee granted 400,000 new options on October 15, 1993 at an
exercise price of $1 per unit. These options were granted to salaried
officers and employees of the Partnership. These options generally do not
vest until the third anniversary of the option grant date, except in the case
of (i) the optionees' death or disability; (ii) retirement in the event the
employee has three years of service with the Partnership; or (iii) change in
control of the Managing General Partner.
All options granted or repriced were at prices not less than fair market value
at dates of grant.
NOTE 11. SIGNIFICANT CUSTOMERS
One customer accounted for approximately 16% of revenues in 1994 and 14% in
1993.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Huntway Operating Committee
The Partnership's business and affairs are managed by Huntway Managing
Partner, L.P. (the "Managing General Partner") rather than a board of
directors. Similarly, the Managing General Partner is itself a partnership and
its business and affairs are managed by its general partner, Reprise Holdings,
rather than a board of directors. However, Reprise Holdings, as sole general
partner of the Managing General Partner, has established an operating
committee (the "Operating Committee") to consult with Reprise Holdings with
respect to the management of the Managing General Partner and the Partnership,
and has elected the following individuals as members of the Operating
Committee:
Juan Y. Forster, age 58, has been principally employed as the President and
Chief Executive Officer of Huntway for the past five years.
Samuel M. Mencoff, age 38, has been principally employed as a Vice President
of Madison Dearborn Partners, Inc. since January, 1993. Prior to January,
1993, Mr. Mencoff served as Vice President of First Capital Corporation of
Chicago (FCCC). Mr. Mencoff is sole director, President and Treasurer of
Reprise Holdings and is a general partner of Madison Dearborn Partners III.
Justin S. Huscher, age 41, has been principally employed as a Vice President
of Madison Dearborn Partners, Inc. since January, 1993. Prior to January,
1993, Mr. Huscher served as a Senior Investment Manager of First Chicago
Investment Corporation, an affiliate of FCCC. Mr. Huscher is Vice President
and Secretary of Reprise Holdings and is a general partner of Madison Dearborn
Partners III.
Raymond M. O'Keefe, age 69, has been principally employed for the last three
years as President and Chief Executive Officer of Rokmanage, Inc., a
management services firm. For that period and more than the last five years,
Mr. OKeefe has been employed as President and Chief Executive Officer of
A. J. Land Company and Harvard Gold Mining Company.
Steven W. Burge, age 38, has been principally employed as a senior vice
president of Wedbush Morgan Securities, Inc. since April, 1987 and became a
general partner of Wedbush Capital Partners in April, 1988. Mr. Burge was
principally employed with Wells Fargo Bank N.A. from 1986 through April, 1987,
serving as a vice-president.
Members of the Operating Committee currently receive no compensation from the
Partnership or the Managing General Partner for their services as members of
the Operating Committee. The Partnership reimburses the Operating Committee
members for expenses incurred in connection with such services.
Section 16 of the Securities and Exchange Act of 1934, as amended, requires
the Partnerships executive officers, members of the Operating Committee and
persons who beneficially own greater than 10% of the Units to file reports of
ownership and changes in ownership with the SEC. Based solely upon its review
of copies of the Section 16 reports the Partnership has received, the
Partnership believes that during its fiscal year ended December 31, 1994, all
of its executive officers, members of the Operating Committee and greater than
10% beneficial owners were in compliance with their filing requirements
Partnership Officers
The following list sets forth: (i) the name and age of each officer of the
Partnership; (ii) the year in which each such person first joined the
Partnership; and (iii) all positions with the Partnership presently held by
each person named.
Year Joined
Name Age Huntway Office
Juan Y. Forster 58 1979 President & Chief Executive Officer
Lucian A. Nawrocki 49 1982 Executive Vice President,
Asphalt Sales
Warren J. Nelson 44 1993 Executive Vice President & Chief
Financial Officer
Terrance L. Stringer 53 1992 Executive Vice President
Charles R. Bassett 59 1982 Manager of Operations/Benicia
William G. Darnell 58 1982 Vice President & General
Manager/Benicia
Earl G. Fleisher 44 1991 Controller and Tax Manager
Michael W. Miller 36 1979 Manager of Operations/Wilmington
Each of the persons named above has had the position with Huntway set forth
above for the past five years, except as follows:
Warren J. Nelson served as Executive Vice President and Chief Financial
Officer of Everest and Jennings International, Ltd, from 1990 to 1992, as
Acting Chief Financial Officer, Controller and Chief Accounting Officer of
Smith International, Inc. in 1990, and as Controller and Chief Accounting
Officer of Smith International, Inc. from 1988 through 1989.
Terrance L. Stringer served for three years as Vice President, Supply and
Marketing with Golden West Refining prior to joining Huntway in early 1992.
Prior to that he served in a variety of management positions with TOSCO
Corporation.
Earl G. Fleisher joined Huntway as Tax Manager in May of 1991 and was
appointed Controller in 1993. Prior to joining Huntway, Mr. Fleisher was
employed by Deloitte & Touche from 1979 to 1991.
Item 11. Officers' Compensation
Cash Compensation of Officers
For the year ended December 31, 1994, the Partnership paid or accrued an
aggregate of $1,098,821 cash compensation to its officers as a group.
Compensation Pursuant to Plans
Pension Plan. The Partnership currently has in effect a defined contribution
pension plan. Pursuant to the terms of the pension plan, each year Huntway
contributes to the plan an amount equal to 4% of each employee's annual "base
compensation", which includes base salary and overtime, but excludes any cash
bonuses. Each full-time employee of Huntway participates in the pension plan.
Contributions made to the pension plan vest in equal increments over a period
beginning upon completion of two years of service and ending upon completion
of seven years of service. For the year ended December 31, 1994, Huntway
contributed $55,888 to its pension plan on behalf of its officers as a group.
Item 12. Principal Unitholders
The following tables set forth information regarding the number of Limited
Partnership Units owned as of March 8, 1995 by each person known by the
Partnership to be the beneficial owner of more than five percent of all
Limited Partnership Units outstanding. Except as indicated below, each of the
persons named in the table has sole voting and investment power with respect
to the Units set forth opposite his or its name.
Beneficial Ownership
Beneficial Owner Units Interest
Common Units:
First Capital Corporation 3,640,121 (1) 31.5%
of Chicago
One First National Plaza
Chicago, IL 60670
Bankers Trust Company 1,975,552 (2) 14.6%
280 Park Avenue
New York, New York 10017
Goldman, Sachs Group, L.P. 1,324,500 11.5%
and Goldman, Sachs & Co.
85 Broad Street
New York, NY 10904
Massachusetts Mutual Life 1,092,156 (2) 8.6%
Insurance Company
1295 State Street
Springfield, MA 01111
Reprise Holdings, Inc. 653,286 5.7%
One First National Plaza
Chicago, IL 60670
All Officers and Operating 1,929,416 (3)(4)(5) 16.6%
Committee Members as a Group
(12 persons)
1) Includes 653,286 units held by Reprise Holdings, Inc. First Capital
Corporation of Chicago and Madison Dearborn Partners III own all of the
outstanding common stock of Reprise Holdings, Inc., First Capital
Corporation of Chicago and Madison Dearborn Partners III disclaim
beneficial ownership of Units beneficially owned by Reprise Holdings, Inc.
2) All reported beneficial ownership of Units represents warrants to purchase
Units at an exercise price of $.875 per Unit issued to the Partnerships
lenders under the June 23, 1994 restructuring agreement. See Note 3 to the
Consolidated Financial Statements.
3) Includes 129,489 Units held by Wedbush Capital Partners, L.P. (Wedbush).
Steven W. Burge, a member of the Operating Committee, is a general partner
of Wedbush. Mr. Burge disclaims beneficial ownership of the Units held by
Wedbush.
4) Includes 62,500 and 341,958 Units held by Madison Dearborn Partners VI and
Madison Dearborn Partners III, respectively. Samuel M. Mencoff and Justin
S. Huscher, member of the Operating Committee, serve as general partners of
such entities but disclaim beneficial ownership of Units held by such
entities. Also includes 653,286 Units held by Reprise Holdings, Inc. Mr.
Mencoff is the President and sole director of Reprise Holdings, Inc. See
also Note 1 above. Mr. Mencoff disclaims beneficial ownership of the Units
held by Reprise Holding, Inc.
5) Includes options to acquire 83,334 Units exerciseable at $1 a unit.
Item 13. Certain Transactions
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K
The financial statement schedules and exhibits listed below are filed as a
part of this annual report.
(a)(2) Financial Statements Schedules
None
The financial statements schedules of the Partnership are omitted because of
the absence of the conditions under which they are required or because the
required information is included in the financial statements or notes thereto.
(a)(3) Exhibits
Exhibit
Number Description of Exhibit
3.1 Amended and Restated Agreement of Limited Partnership of Huntway
Partners, L.P. (incorporated by reference herein to Exhibit A to
the Prospectus included in the Registration Statement on Form S-1,
filed September 26, 1988, Registration
No. 33-24445).
3.2 Huntway Partners, L.P. Bylaws (incorporated by reference
herein to Exhibit 3.2 of the Registration Statement on
Form S-1, as amended by Amendment No. 2, filed November 2,
1988, Registration No. 33-24445).
3.3 Amendment of Agreement of Limited Partnership of Huntway
Partners, L.P. dated as of December 20, 1989 (incorporated
by reference herein to Exhibit 3.3 of the Annual Report on
Form 10-K, filed March 30, 1990, Commission file No. 1-10091)
4 Deposit Agreement by and among Huntway Partners, L.P.,
Bankers Trust Company and Huntway Managing Partner, L.P.
(incorporated by reference herein to Exhibit 4 of the Annual
Report on Form 10-K, filed March 29, 1989, Commission file
No. 1-10091)
10.1 Amended and Restated Agreement of Limited Partnership of
Huntway Managing Partner, L.P. dated as of December 22,
1989 (incorporated by reference herein to Exhibit 10.1 of
the Annual Report on Form 10-K, filed March 30, 1990,
Commission file No. 1-10091)
10.2 Huntway Partners, L.P. Amended and Restated Profit Sharing
and Tax Deferred Savings Plan (incorporated by reference
herein to Exhibit 10.2 of the Annual Report on Form 10-K,
filed March 29, 1989, Commission file No. 1-10091)
Exhibit
Number Description of Exhibit
10.3 Huntway Partners, L.P. Money Purchase Pension Plan
(incorporated by reference herein to Exhibit 10.4 of the
Registration Statement on Form S-1, filed September 26,
1988, Registration No. 33-24445).
10.4 Third Amended and Restated Credit Agreement dated as of
May 18, 1990 by and among Huntway Partners, L.P., Sunbelt
Refining Company, L.P. and Bankers Trust Company
(incorporated by reference herein to Exhibit 10.1 of the
Quarterly Report on Form 10-Q, filed November 14,
1990, Commission file No. 1-10091)
10.5 First Amendment dated as of September 26, 1990 to the
Third Amended and Restated Credit Agreement dated as
of May 18, 1990 (incorporated by reference herein to
Exhibit 10.2 of the Quarterly Report on Form 10-Q,
filed November 14, 1990, Commission file No. 1-10091)
10.6 Second Amendment dated as of November 16, 1990 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to exhibit 10.6 of
the Annual Report on Form 10-K, filed March 28, 1991,
Commission file No. 1-10091)
10.7 Third Amendment dated as of November 20, 1990 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to exhibit 10.7 of
the Annual Report on Form 10-K, filed March 28, 1991,
Commission file No. 1-10091)
10.8 Fourth Amendment dated as of March 29, 1991 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to Exhibit 10.1 of
the Quarterly Report on Form 10-Q filed August 14, 1991,
Commission file No. 1-10091)
10.9 Fifth Amendment dated as of April 29, 1991 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to Exhibit 10.2 of
the Quarterly Report on Form 10-Q filed August 14, 1991,
Commission file No. 1-10091)
10.10 Sixth Amendment dated as of May 31, 1991 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to Exhibit 10.3 of
the Quarterly Report on Form 10-Q filed August 14, 1991,
Commission file No. 1-10091)
10.11 Seventh Amendment dated as of June 28, 1991 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to Exhibit 10.4 of
the Quarterly Report on Form 10-Q filed August 14, 1991,
Commission file No. 1-10091)
Exhibit
Number Description of Exhibit
10.12 Eighth Amendment dated as of July 30, 1991 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to Exhibit 10.5 of
the Quarterly Report on Form 10-Q filed August 14, 1991,
Commission file No. 1-10091)
10.13 Ninth Amendment dated as of August 30, 1991 to the Third
Amended and Restated Credit Agreement dated as of May 18,
1990 (incorporated by reference herein to Exhibit 10.1 of
the Quarterly Report on Form 10-Q filed November 14, 1991,
Commission file No. 1-0091)
10.14 Tenth Amendment and Limited Waiver dated as of October 28,
1991 to the Third Amended and Restated Credit Agreement
dated as of May 18, 1990 (incorporated by reference herein
to Exhibit 10.2 of the Quarterly Report on Form 10-Q filed
November 14, 1991, Commission file No. 1-10091)
10.15 Eleventh Amendment and Limited Waiver dated as of March 23,
1992 to the Third Amendment and Restated Credit Agreement
dated as of May 18, 1990 (incorporated by reference herein
to Exhibit 10.15 of the Annual Report on Form 10-K filed
March 30, 1992, Commission file No. 1-10091)
10.16 Indenture of Trust and Security Agreement dated as of
December 1, 1987 from Huntway Refining Company, L.P. to
Security Pacific National Bank as Trustee (incorporated
by reference herein to Exhibit 10.6 of the Registration
Statement on Form S-1, filed September 26, 1988,
Registration No. 33-24445).
10.17 Amended and Restated Ground Lease dated as of July 31,
1987 by and between Industrial Asphalt and Huntway Refining
Company (incorporated by reference herein to Exhibit 10.7
of the Registration Statement on Form S-1, filed September 26,
1988, Registration No. 33-24445).
10.18 Asset Purchase Agreement dated August 23, 1987 between
Huntway Refining Company and Huntway Acquisition Limited
Partnership (incorporated by reference herein to Exhibit
10.8 of the Registration Statement on Form S-1, filed
September 26, 1988, Registration No. 33-24445).
10.19 Second Amended and Restated Agreement of Limited Partnership
of Sunbelt Refining Company, L.P. (incorporated by reference
herein to Exhibit 10.8 of the Annual Report on Form 10-K,
filed March 30, 1990, Commission file No. 1-10091)
10.20 First Supplemental Indenture dated as of November 1, 1988
from Huntway Holdings, L.P. to Security Pacific National Bank
(incorporated by reference herein to Exhibit 10.10 of the
Annual Report on Form 10-K, filed March 29, 1989, Commission
file No. 1-10091)
10.21 Huntway Partners, L.P. 1989 First Amendment to the Salaried
Employees Partnership Unit Option Plan dated as of May 1991
Exhibit
Number Description of Exhibit
10.22 Indemnification Agreement dated as of November 9, 1988
(incorporated by reference herein to Exhibit 10.12 of the
Annual Report on Form 10-K, filed March 29, 1989,
Commission file No. 1-10091)
10.23 Amended and Restated Agreement of Limited Partnership of
Huntway Holdings, L.P. dated as of December 22, 1989
(incorporated by reference herein to Exhibit 10.12 of
the Annual Report on Form 10-K, filed March 30, 1990,
Commission file No. 1-10091)
10.24 Agreement for Liquidation of Limited Partner Interest dated
as of October 30, 1989 by and among Sunbelt Refining Company,
L.P. and James R. Bagley, John M. Schwarz, Hector Monroy and
Fil Ventura (incorporated by reference herein to Exhibit
10.13 of the Annual Report on Form 10-K, filed March 30,
1990, Commission file No. 1-10091)
10.25 Definitive Agreement between Huntway Partners, L.P. and
Reprise Holdings, L.P. dated as of May 3, 1990
(incorporated by reference herein to Exhibit 10.14 of
the Quarterly Report on Form 10-Q, filed May 15, 1990,
Commission file No. 1-10091)
10.26 Funding and Forbearance Agreement dated as of December 31,
1992 among Bankers Trust Company, Huntway Partners, L.P.,
Massachusetts Mutual Life Insurance Company, Phoenix Home
Life Mutual Insurance Company, Crown Life Insurance Company,
Century Life Insurance Company and First Capital Corporation
of Chicago and acknowledged by Sunbelt Refining Company, L.P.,
Huntway Managing Partners, L.P. and Huntway Holdings, L.P.
(incorporated by reference herein to Exhibit 10.1 of the
Current Report on Form 8-K, filed March 1, 1994, Commission
file No. 1-10091)
10.27 Huntway Partners, L.P./Sunbelt Refining Company L.P. General
Restructuring Agreement Dated as of June 22, 1994
(incorporated by reference herein to Exhibit 10.27 of the
current report on Form 8-K, filed July 13, 1994, Commission
file No. 1-10091)
10.28 Huntway Partners, L.P., as Issuer to Shawmut Bank N.A., as
Trustee, Collateralized Note Indenture Dated as of June 22,
1994 (incorporated by reference herein to Exhibit 10.28 of
the Current Report on Form 8-K, filed July 13, 1994,
Commission file No. 1-10091)
10.29 Huntway Partners, L.P., as Issuer to Shawmut Bank Connecticut
National Association, as Trustee Subordinated Note Indenture
Dated as of June 22, 1994 (incorporated by reference herein
to Exhibit 10.29 of the Current Report on Form 8-K, filed
July 13, 1994, Commission file No. 1-10091)
Exhibit
Number Description of Exhibit
10.30 Huntway Partners, L.P., as Issuer to IBJ Schroder Bank &
Trust Company, as Trustee, Junior Subordinated Debenture
Indenture Dated as of June 22, 1994 (incorporated by
reference herein to Exhibit 10.30 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.31 Letter of Credit and Reimbursement Agreement Dated as of
June 22, 1994 between Huntway Partners, L.P., Sunbelt
Refining Company, L.P. and Bankers Trust Company
(incorporated by reference herein to Exhibit 10.31 of the
Current Report on Form 8-K, filed July 13, 1994, Commission
file No. 1-10091)
10.32 Intercreditor and Collateral Trust Agreement Dated as of
June 22, 1994 among Bankers Trust Company as LOC Bank and
Bankers Trust Company, Massachusetts Mutual Life Insurance
Company, Phoenix Home Life Mutual Insurance Company, Crown
Life Insurance Company, Century Life of America and Century
Life Insurance Company, as Holders of the Priority
Obligations, Senior Obligations and Subordinated
Obligations and United States Trust Company of New York,
as Collateral Agent (incorporated by reference herein to
Exhibit 10.32 of the Current Report on Form 8-K, filed
July 13, 1994, Commission file No. 1-10091)
10.33 Collateral Accounts Security Agreement (incorporated by
reference herein to Exhibit 10.33 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.34 Huntway Partners, L.P. 8% Priority Secured Note Due 1994
(incorporated by reference herein to Exhibit 10.34 of the
Current Report on Form 8-K, filed July 13, 1994, Commission
file No. 1-10091)
10.35 Huntway Partners, L.P., 8% Senior Secured Note Due 2000
(incorporated by reference herein to Exhibit 10.35 of the
Current Report on Form 8-K, filed July 13, 1994, Commission
file No. 1-10091)
10.36 Huntway Partners, L.P. Increasing Rate Subordinated Note
(Other) Due 2008 (incorporated by reference herein to
Exhibit 10.36 of the Current Report on Form 8-K, filed
July 13, 1994, Commission file No. 1-10091)
10.37 Huntway Partners, L.P. Increasing Rate Subordinated Note
(Sunbelt IDB) Due 2008 (incorporated by reference herein
to Exhibit 10.37 of the Current Report on Form 8-K, filed
July 13, 1994, Commission file No. 1-10091)
Exhibit
Number Description of Exhibit
10.38 Huntway Partners, L.P., Increasing Rate Junior Subordinated
Debentures Due 2020 (incorporated by reference herein to
Exhibit 10.38 of the Current Report on Form 8-K, filed
July 13, 1994, Commission file No. 1-10091)
10.39 Warrants to Purchase Common Units of Huntway Partners,
L.P., a Delaware Limited Partnership (incorporated by
reference herein to Exhibit 10.39 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.40 Assignment and Assumption Agreement (incorporated by
reference herein to Exhibit 10.40 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.41 Termination Agreement (incorporated by reference herein to
Exhibit 10.41 of the Current Report on Form 8-K, filed
July 13, 1994, Commission file No. 1-10091)
10.42 Modification of Huntway Pledge and Security Agreement
(incorporated by reference herein to Exhibit 10.42 of the
Current Report on Form 8-K, filed July 13, 1994, Commission
file No. 1-10091)
10.43 Modification of Huntway Current Assets Pledge and Security
Agreement (incorporated by reference herein to Exhibit
10.43 of the Current Report on Form 8-K, filed July 13, 1994,
Commission file No. 1-10091)
10.44 Modification of Sunbelt Pledge and Security Agreement
(incorporated by reference herein to Exhibit 10.44 of the
Current Report on Form 8-K, filed July 13, 1994,
Commission file No. 1-10091)
10.45 Modification of Huntway Managing General Partner
Pledge and Security Agreement (incorporated by
reference herein to Exhibit 10.45 of the Current
Report on Form 8-K, filed July 13, 1994,
Commission file No. 1-10091)
10.46 Modification of Huntway Special General Partner Pledge
and Security Agreement (incorporated by reference herein
to Exhibit 10.46 of the Current Report on Form 8-K, filed
July 13, 1994, Commission file No. 1-10091)
10.47 Amendment to Deed of Trust and Security Agreement
and Other Security Documents (California) (incorporated by
reference herein to Exhibit 10.47 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.48 Amendment to Deed of Trust with Assignment of Rents and
Other Security Documents (Arizona) (incorporated by
reference herein to Exhibit 10.48 of the Current Report
on Form 8-K, filed July 13, 1994, Commission file
No. 1-10091)
Exhibit
Number Description of Exhibit
10.49 Assignment of Notes and Deed of Trust (California)
(incorporated by reference herein to Exhibit 10.49 of the
Current Report on Form 8-K, filed July 13, 1994, Commission
file No. 1-10091)
10.50 Assignment of Notes and Deed of Trust (Arizona) (incorporated
by reference herein to Exhibit 10.50 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.51 Modification of Sunbelt Guaranty Agreement (incorporated by
reference herein to Exhibit 10.51 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.52 Modification of Huntway Special General Partner Guaranty
Agreement (incorporated by reference herein to Exhibit
10.52 of the Current Report on Form 8-K, filed July 13,
1994, Commission file No. 1-10091)
10.53 Modification of Huntway Guaranty Agreement (incorporated
by reference herein to Exhibit 10.53 of the Current Report
on Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.54 Modification of Huntway Managing General Partner Guaranty
Agreement (incorporated by reference herein to Exhibit 10.54
of the Current Report on Form 8-K, filed July 13, 1994,
Commission file No. 1-10091)
10.55 FCCC Acknowledgment and Agreement (incorporated by
reference herein to Exhibit 10.55 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
10.56 Amendment and Waiver of Registration Agreement (incorporated
by reference herein to Exhibit 10.56 of the Current Report on
Form 8-K, filed July 13, 1994, Commission file No. 1-10091)
18 Letter of concurrence from accountants relating to the change
to the last-in, first-out (LIFO) method of accounting for
inventories (incorporated by reference herein to Exhibit 18
of the Annual Report on Form 10-K, filed March 30, 1990,
Commission file No. 1-10091)
22 Schedule of Subsidiaries (incorporated by reference herein to
Exhibit 22 of the Registration Statement on Form S-1, as
amended by Amendment No. 2, filed November 2, 1988,
Registration No. 33-24445).
28.1 Press Release of the Company dated December 8, 1992
(incorporated by reference herein to Exhibit 28.1 of the
Current Report on Form 8-K, filed March 1, 1994, Commission
file No. 1-10091)
28.2 Press Release of the Company dated December 10, 1992
(incorporated by reference herein to Exhibit 28.2 of the
Current Report on Form 8-K, filed March 1, 1994, Commission
file No. 1-10091)
Exhibit
Number Description of Exhibit
28.3 Press Release of the Company dated December 16, 1992
(incorporated by reference herein to Exhibit 28.3 of the
Current Report on Form 8-K, filed March 1, 1994, Commission
file No. 1-10091)
28.4 Press Release of the Company dated December 31, 1992
(incorporated by reference herein to Exhibit 28.4 of
the Current Report on Form 8-K, filed March 1, 1994,
Commission file No. 1-10091)
28.5 Complaint in Neal v. Forster, et al., No. 92-7264 SVW
(C.D. Cal.) (incorporated by reference herein to Exhibit
28.5 of the Current Report on Form 8-K, filed March 1, 1994,
Commission file No. 1-10091)
28.6 Complaint in Van Elgort et al. v. Huntway Partners, L.P.,
et al., No. 92-7314R (C.D. Cal.) (incorporated by
reference herein to Exhibit \28.6 of the Current Report
on Form 8-K, filed March 1, 1994, Commission file
No. 1-10091)
(b) Reports on Form 8-K
No reports on Form 8-K were filed in 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Huntway Partners, L.P. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on the
27th day of March, 1994.
HUNTWAY PARTNERS, L.P.
By: /s/ Juan Y. Forster
Juan Y. Forster
Chairman of the Operating Committee
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 27th, 1994.
Signature Title
/s/ Juan Y. Forster
Juan Y. Forster Member of Operating Committee and
Chief Executive Officer
/s/ Warren J. Nelson, III
Warren J. Nelson, III Executive Vice President and
Chief Financial and Accounting Officer
/s/ Steven W. Burge
Steven W. Burge Member of Operating Committee
/s/ Justin S. Huscher
Justin S. Huscher Member of Operating Committee
/s/ Samuel M. Mencoff
Samuel M. Mencoff Member of Operating Committee
/s/ Raymond M. OKeefe
Raymond M. OKeefe Member of Operating Committee