SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8 - K/A (AMENDMENT NO. 1) CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): FEBRUARY 24, 1995 KANEB SERVICES, INC. ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE ----------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 1-5083 74-1191271 (Commission File Number) (IRS Employer Identification No.) 2435 N. Central Expressway, Seventh Floor, Richardson, Texas 75080 ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (214) 699-4000 ------------------------- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (b) Pro forma financial information. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. KANEB SERVICES, INC. -------------------- (Registrant) Date: August 28, 1995 /s/ Tony M. Regan ------------------- Tony M. Regan Controller KANEB SERVICES, INC. PRO FORMA FINANCIAL STATEMENTS (Unaudited) In February 1995, Kaneb Services, Inc. ("Kaneb") acquired, through its interest in Kaneb Pipe Line Partners, L.P., the refined petroleum product pipeline assets (the "West Pipeline") of Wyco Pipe Line Company for $27.1 million. The West Pipeline was owned 60% by a subsidiary of GATX Terminals Corporation and 40% by a subsidiary of Amoco Pipe Line Company. The acquisition was financed by the sale of $27 million of first mortgage notes to three insurance companies. The assets acquired from Wyco Pipe Line Company did not include certain assets that were leased to Amoco Pipe Line Company, and the purchase agreement did not provide for either (i) the continuation of an arrangement with Amoco Pipe Line Company for the monitoring and control of pipeline flows or (ii) the extension or assumption of certain credit agreements that Wyco Pipe Line Company had with its shareholders. The following unaudited pro forma financial statements for Kaneb have been derived from the audited historical financial statements of Kaneb and Wyco Pipe Line Company for the year ended December 31, 1993 and the unaudited financial statements for the nine month period ended September 30, 1994. The following unaudited pro forma financial statements have been compiled as if Kaneb acquired the pipeline assets of the West Pipeline on the date of the balance sheet or as of the beginning of the period for income statement purposes. The unaudited pro forma financial statements should be read in conjunction with the notes accompanying such unaudited pro forma financial statements and with the audited historical financial statements and related notes of Kaneb and Wyco Pipe Line Company. The unaudited pro forma financial statements may not be indicative of the results that would have occurred if Kaneb had acquired the pipeline assets of the West Pipeline on the dates indicated or which will be obtained in the future. KANEB SERVICES, INC. PRO FORMA STATEMENTS OF INCOME YEAR ENDED DECEMBER 31, 1993 (In Thousands, except per unit amounts) (Unaudited) Kaneb West Pipeline Acquisition Pro Historical Historical Adjustments Forma -------------- ------------- ------------- -------------- Revenues $ 198,549 $ 16,602 $ ( 5,006) (a) $ 210,145 -------------- ------------- ------------- -------------- Costs and expenses: Operating costs 153,231 5,839 - 159,070 Depreciation 11,655 841 (137) (b) 12,359 General and administrative 4,133 664 - 4,797 -------------- ------------- ------------- -------------- Total costs and expenses 169,019 7,344 (137) 176,226 -------------- ------------- ------------- -------------- Operating income 29,530 9,258 (4,869) 33,919 Interest income 307 43 - 350 Other income (expense) (514) 129 - (385) Interest expense (13,559) (13) (2,247) (c) (15,819) Amortization of excess of cost over fair value of net assets of acquired business (1,845) - - (1,845) -------------- ------------- ------------- -------------- Income before minority interest, income taxes and gain on issuance of units by partnership 13,919 9,417 (7,116) 16,220 Minority interest in net income (10,989) - - (10,989) Income taxes (1,898) (3,335) 3,222 (d) (2,011) Gain on issuance of units by partnership 15,122 - - 15,122 -------------- ------------- ------------- -------------- Net income $ 16,154 $ 6,082 $ (3,894) $ 18,342 ============== ============= ============= ============== Earnings per common share - primary and fully diluted $ 0.46 $ 0.53 ============== ============== KANEB SERVICES, INC. PRO FORMA STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1994 (In Thousands, except per unit amounts) (Unaudited) Kaneb West Pipeline Acquistion Pro Historical Historical Adjustments Forma ------------ ------------ ------------- ------------ Revenues $ 156,460 $ 9,461 $ - $ 165,921 ------------ ------------ ------------ ------------ Costs and expenses: Operating costs 119,549 3,438 - 122,987 Depreciation 9,352 629 (101) (b) 9,880 General and administative 3,061 909 - 3,970 ------------ ------------ ------------ ------------ Total costs and expenses 131,962 4,976 (101) 136,837 ------------ ------------ ------------ ------------ Operating income 24,498 4,485 101 29,084 Other income (expense) 78 583 - 661 Interest expense (10,033) - (1,695) (c) (11,728) Amortization of excess of cost over fair value of net assets of acquired business (1,386) - - (1,386) ------------ ------------ ------------ ------------ Income before minority interest and income taxes 13,157 5,068 (1,594) 16,631 Minority interest in net income (9,400) - - (9,400) Income taxes (1,835) (1,965) (1,808) (d) (1,992) ------------ ------------ ------------ ------------ Net income $ 1,922 $ 3,103 $ 214 $ 5,239 ============ ============ ============ ============ Earnings per common share - primary and fully diluted $ 0.03 $ 0.13 ============ ============ KANEB SERVICES, INC. PRO FORMA BALANCE SHEETS SEPTEMBER 30, 1994 (In Thousands) (Unaudited) Kaneb Acquistion Pro Historical Adjustments Forma ------------- ------------- ---------------- ASSETS Current assets: Cash and cash equivalents $ 13,472 $ 2,047 (e) $ 15,519 Accounts receivable, trade 31,597 31,597 Inventories 5,775 - 5,775 Prepaid expenses and other current assets 6,631 - 6,631 ------------- ------------- ---------------- Total current asstes 57,475 2,047 59,522 ------------- ------------- ---------------- Property and equipment, net 162,930 28,161 (a) 191,091 ------------- ------------- ---------------- Excess of cost over fair value of net assets of acquired business 67,338 - 67,338 ------------- ------------- ---------------- Other assets 4,953 - 4,953 ------------- ------------- ---------------- $ 292,696 $ 30,208 $ 322,904 ============= ============= ================ LIABILITIES AND EQUITY Current Liabilities: Current portion of long-term debt $ 14,847 $ - $ 14,847 Accounts payable 11,608 - 11,608 Accrued expenses 24,607 $ 1,296 (f) 25,903 Accrued distribution payable 4,021 - 4,021 ------------- ------------- ---------------- Total current liabilities 55,083 1,296 56,379 ------------- ------------- ---------------- Long-term debt, less current portion 146,265 27,000 (g) 173,265 ------------- ------------- ---------------- Net liabilities of discontinued operations 4,342 - 4,342 ------------- ------------- ---------------- Deferred income taxes and other liabilities 5,730 1,912 (h) 7,642 ------------- ------------- ---------------- Minority interest 62,633 - 62,633 ------------- ------------- ---------------- Commitments and contingencies Stockholders' equity 18,643 - 18,643 ------------- -------------- ---------------- $ 292,696 $ 30,208 $ 322,904 ============= ============== ================ Kaneb Services, Inc. Notes to Pro Forma Financial Statements (a) Represents the preliminary allocation of the estimated fair market value of the acquired assets and elimination of the historical gain on an asset sale in 1993, however, the internal valuation of the assets is not complete as of the date of this filing. (b) Represents adjustments to the depreciation and amortization of the acquired assets. (c) Represents interest expense on $27 million of acquisition debt at 8.37% per annum. (d) Federal income tax expense has been eliminated. (e) Represents cash received from seller to settle liabilities acquired. (f) Represents liabilities assumed and accrued acquisition costs (g) Represents the issuance of $27 million of long-tern debt, incurred in connection with the acquisition of the West Pipeline. (h) Represents liabilities assumed in connection with the acquisition.