Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

(Mark One)

 

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended November 30, 2010

 

or

 

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     

 

Commission File No. 001-06198

 

 

 

		UNITED REFINING COMPANY (Exact name of registrant as specified in its charter)

 

Pennsylvania		25-1411751
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
15 Bradley Street Warren, Pennsylvania		16365
(Address of principal executive office)		(Zip Code)

 

814-723-1500

(Registrant’s telephone number, including area code)

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  ¨		Accelerated filer  ¨
Non-accelerated filer  x  (Do not check if a smaller reporting company)		Smaller reporting company  ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

 

As of January 14, 2011, there were 100 shares of common stock, par value $.10 per share, of the Registrant outstanding.

 

 

 

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TABLE OF ADDITIONAL REGISTRANTS

 

Name		State of Other Jurisdiction of Incorporation		IRS Employer Identification Number				Commission File Number
Kiantone Pipeline Corporation		New York			25-1211902				333-35083-01
Kiantone Pipeline Company		Pennsylvania			25-1416278				333-35083-03
United Refining Company of Pennsylvania		Pennsylvania			25-0850960				333-35083-02
United Jet Center, Inc.		Delaware			52-1623169				333-35083-06
Kwik-Fill Corporation		Pennsylvania			25-1525543				333-35083-05
Independent Gas and Oil Company of Rochester, Inc.		New York			06-1217388				333-35083-11
Bell Oil Corp.		Michigan			38-1884781				333-35083-07
PPC, Inc.		Ohio			31-0821706				333-35083-08
Super Test Petroleum, Inc.		Michigan			38-1901439				333-35083-09
Kwik-Fil, Inc.		New York			25-1525615				333-35083-04
Vulcan Asphalt Refining Corporation		Delaware			23-2486891				333-35083-10
Country Fair, Inc.		Pennsylvania			25-1149799				333-35083-12

 

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Table of Contents

FORM 10-Q – CONTENTS

 

				PAGE(S)
PART I.		FINANCIAL INFORMATION			4
Item 1.		Financial Statements.			4
		Consolidated Balance Sheets – November 30, 2010 (unaudited) and August 31, 2010			4
		Consolidated Statements of Operations – Three Months Ended November 30, 2010 and 2009 (unaudited)			5
		Consolidated Statements of Cash Flows – Three Months Ended November 30, 2010 and 2009 (unaudited)			6
		Notes to Consolidated Financial Statements (unaudited)			7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations .			14
Item 3.		Quantitative and Qualitative Disclosures about Market Risk.			21
Item 4.		Controls and Procedures.			22
PART II.		OTHER INFORMATION			23
Item 1.		Legal Proceedings.			23
Item 1A.		Risk Factors.			23
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds.			23
Item 3.		Defaults Upon Senior Securities.			23
Item 4.		(Removed and Reserved).			23
Item 5.		Other Information.			23
Item 6.		Exhibits.			23
Signatures.					24

 

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PART I.

FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

UNITED REFINING COMPANY AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

 

		November 30, 2010 (Unaudited)				August 31, 2010
Assets
Current:
Cash and cash equivalents		$	19,479			$	17,170
Accounts receivable, net			71,975				64,192
Refundable income taxes			36,390				36,390
Inventories			143,830				206,838
Prepaid expenses and other assets			38,586				27,941
Amounts due from affiliated companies, net			3,284				2,972
Total current assets			313,544				355,503
Property, plant and equipment, net			268,305				261,775
Deferred financing costs, net			1,826				2,114
Goodwill			1,349				1,349
Tradename			10,500				10,500
Amortizable intangible assets, net			1,349				1,376
Deferred turnaround costs and other assets, net			6,316				3,894
Deferred income taxes			—				592
		$	603,189			$	637,103
Liabilities and Stockholder’s Equity
Current:
Revolving credit facility		$	74,000			$	83,000
Current installments of long-term debt			1,796				1,888
Accounts payable			42,653				65,620
Accrued liabilities			25,035				15,569
Income taxes payable			—				552
Sales, use and fuel taxes payable			16,664				18,455
Deferred income taxes			5,997				5,997
Total current liabilities			166,145				191,081
Long term debt: less current installments			327,760				328,165
Deferred retirement benefits			90,108				91,620
Deferred income taxes			894				—
Total liabilities			584,907				610,866
Commitments and contingencies
Stockholder’s equity:
Common stock; $.10 par value per share – shares authorized 100; issued and outstanding 100			—				—
Additional paid-in capital			22,500				22,500
Retained earnings			10,142				18,231
Accumulated other comprehensive loss			(14,360	)			(14,494	)
Total stockholder’s equity			18,282				26,237
		$	603,189			$	637,103

 

See accompanying notes to consolidated financial statements.

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS – (Unaudited)

(in thousands)

 

		Three Months Ended November 30,
		2010				2009
Net sales		$	619,147			$	620,926
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)			580,837				602,340
Selling, general and administrative expenses			35,786				36,759
Depreciation and amortization expenses			5,636				5,481
			622,259				644,580
Operating loss			(3,112	)			(23,654	)
Other expense:
Interest expense, net			(8,914	)			(8,467	)
Other, net			(581	)			(606	)
			(9,495	)			(9,073	)
Loss before income tax benefit			(12,607	)			(32,727	)
Income tax benefit			(4,518	)			(13,417	)
Net loss		$	(8,089	)		$	(19,310	)

 

 

 

See accompanying notes to consolidated financial statements.

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS – (Unaudited)

(in thousands)

 

		Three Months Ended November 30,
		2010				2009
Cash flows from operating activities:
Net loss		$	(8,089	)		$	(19,310	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			5,718				5,565
Deferred income taxes			1,392				(3,238	)
Loss on asset dispositions			2				266
Cash provided by (used in) working capital items			28,423				(1,677	)
Other, net			1				(1	)
Change in operating assets and liabilities:
Deferred retirement benefits			(1,285	)			3,645
Other noncurrent liabilities			—				(3	)
Total adjustments			34,251				4,557
Net cash provided by (used in) operating activities			26,162				(14,753	)
Cash flows from investing activities:
Additions to property, plant and equipment			(10,886	)			(6,546	)
Additions to deferred turnaround costs			(3,642	)			(29	)
Proceeds from asset dispositions			1				5
Net cash used in investing activities			(14,527	)			(6,570	)
Cash flows from financing activities:
Net (reductions) borrowings on revolving credit facility			(9,000	)			12,000
Principal reductions of long term debt			(326	)			(463	)
Net cash (used in) provided by financing activities			(9,326	)			11,537
Net increase (decrease) in cash and cash equivalents			2,309				(9,786	)
Cash and cash equivalents, beginning of year			17,170				31,062
Cash and cash equivalents, end of period		$	19,479			$	21,276
Cash provided by (used in) working capital items:
Accounts receivable, net		$	(7,784	)		$	7,784
Inventories			63,008				61,067
Prepaid expenses and other assets			(10,645	)			(31,938	)
Amounts due from affiliated companies, net			(312	)			(4,055	)
Accounts payable			(22,967	)			(33,808	)
Accrued liabilities			9,466				7,769
Income taxes payable			(552	)			(5,149	)
Sales, use and fuel taxes payable			(1,791	)			(3,347	)
Total change		$	28,423			$	(1,677	)
Cash paid during the period for:
Interest		$	662			$	162
Income taxes		$	291			$	3,538
Non-cash investing activities:
Property additions & capital leases		$	34			$	715

 

See accompanying notes to consolidated financial statements.

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1.	Description of Business and Basis of Presentation

 

The consolidated financial statements include the accounts of United Refining Company and its subsidiaries, United Refining Company of Pennsylvania and its subsidiaries, and Kiantone Pipeline Corporation (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

 

The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations are organized into two business segments: wholesale and retail.

 

The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers. The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names at a network of Company-operated retail units and convenience and grocery items through Company-owned gasoline stations and convenience stores under the Red Apple Food Mart^® and Country Fair^® brand names.

 

The Company is a wholly-owned subsidiary of United Refining, Inc., a wholly-owned subsidiary of United Acquisition Corp., which in turn is a wholly-owned subsidiary of Red Apple Group, Inc. (the “Parent”).

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended November 30, 2010 are not necessarily indicative of the results that may be expected for the year ending August 31, 2011. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Form 10-K for the fiscal year ended August 31, 2010.

 

Certain items have been reclassified to conform to current period presentation.

 

2.	Recent Accounting Pronouncements

 

In June 2009, the FASB issued a standard that amends previous guidance on variable interest entities. The standard modifies the criteria for determining the primary beneficiary of a variable interest entity and requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. This standard is effective as of September 1, 2010 and will not impact our financial position or results of operations.

 

3.	Inventories

 

Inventories are stated at the lower of cost or market, with cost being determined under the Last-in, First-out (LIFO) method for crude oil and petroleum product inventories and the First-in, First-out (FIFO) method for merchandise. Supply inventories are stated at either lower of cost or market or replacement cost and include various parts for the refinery operations. If the cost of inventories exceeds this market value, provisions are made currently for the difference between the cost and market value.

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

 

Inventories consist of the following:

 

		November 30, 2010				August 31, 2010
		(in thousands)
Crude Oil		$	34,749			$	78,165
Petroleum Products			69,314				86,993
Lower of cost or market reserve			(786	)			—
Total @ LIFO			103,277				165,158
Merchandise			20,498				20,403
Supplies			20,055				21,277
Total @ FIFO			40,553				41,680
Total Inventory		$	143,830			$	206,838

 

Inventories at the lower of last-in, first-out (“LIFO”) cost or market reflect a market valuation reserve of $786,000 and $0 at November 30, 2010 and August 31, 2010, respectively. As of November 30, 2010 and August 31, 2010, the replacement cost of LIFO inventories exceeded their LIFO carrying values by approximately $51,083,000 and $50,265,000, respectively.

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

 

4.	Subsidiary Guarantors

 

All the Company’s wholly-owned subsidiaries fully and unconditionally guarantee, on a joint and several basis, the Company’s $350,000,000 Senior Unsecured Note Indenture due August 15, 2012. There are no restrictions within the consolidated group on the ability of the Company or any of its subsidiaries to obtain loans from or pay dividends to other members of the consolidated group. Financial information of the Company’s wholly-owned subsidiary guarantors is as follows:

 

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

 

		November 30, 2010																August 31, 2010
		Issuer				Guarantors				Eliminations				Consolidated				Issuer				Guarantors				Eliminations				Consolidated
Assets
Current:
Cash and cash equivalents		$	8,152			$	11,327			$	—			$	19,479			$	7,765			$	9,405			$	—			$	17,170
Accounts receivable, net			37,945				34,030				—				71,975				30,266				33,926				—				64,192
Refundable income taxes			37,921				(1,531	)			—				36,390				37,921				(1,531	)			—				36,390
Inventories			113,202				30,628				—				143,830				176,748				30,090				—				206,838
Prepaid expenses and other assets			32,288				6,298				—				38,586				22,461				5,480				—				27,941
Amounts due from affiliated companies			3,455				(171	)			—				3,284				3,455				(483	)			—				2,972
Intercompany			121,821				16,026				(137,847	)			—				111,228				16,374				(127,602	)			—
Total current assets			354,784				96,607				(137,847	)			313,544				389,844				93,261				(127,602	)			355,503
Property, plant and equipment, net			192,090				76,215				—				268,305				185,349				76,426				—				261,775
Deferred financing costs, net			1,826				—				—				1,826				2,114				—				—				2,114
Goodwill and other non-amortizable assets			—				11,849				—				11,849				—				11,849				—				11,849
Amortizable intangible assets, net			—				1,349				—				1,349				—				1,376				—				1,376
Deferred turnaround costs & other assets			5,716				600				—				6,316				3,233				661				—				3,894
Deferred income taxes			—				—				—				—				7,909				(7,317	)			—				592
Investment in subsidiaries			8,303				—				(8,303	)			—				9,263				—				(9,263	)			—
		$	562,719			$	186,620			$	(146,150	)		$	603,189			$	597,712			$	176,256			$	(136,865	)		$	637,103
Liabilities and Stockholder’s Equity
Current:
Revolving credit facility		$	74,000			$	—			$	—			$	74,000			$	83,000			$	—			$	—			$	83,000
Current installments of long-term debt			1,371				425				—				1,796				1,390				498				—				1,888
Accounts payable			22,970				19,683				—				42,653				40,689				24,931				—				65,620
Accrued liabilities			18,826				6,209				—				25,035				9,457				6,112				—				15,569
Income taxes payable			—				—				—				—				196				356				—				552
Sales, use and fuel taxes payable			12,888				3,776				—				16,664				14,461				3,994				—				18,455
Deferred income taxes			7,049				(1,052	)			—				5,997				7,049				(1,052	)			—				5,997
Intercompany			—				137,847				(137,847	)			—				—				127,602				(127,602	)			—
Total current liabilities			137,104				166,888				(137,847	)			166,145				156,242				162,441				(127,602	)			191,081
Long term debt: less current installments			325,933				1,827				—				327,760				326,239				1,926				—				328,165
Deferred retirement benefits			87,490				2,618				—				90,108				88,994				2,626				—				91,620
Deferred income taxes			(6,090	)			6,984				—				894				—				—				—				—
Total liabilities			544,437				178,317				(137,847	)			584,907				571,475				166,993				(127,602	)			610,866
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share – shares authorized 100; issued and outstanding 100			—				18				(18	)			—				—				18				(18	)			—
Additional paid-in capital			22,500				10,651				(10,651	)			22,500				22,500				10,651				(10,651	)			22,500
Retained earnings			10,142				(1,136	)			1,136				10,142				18,231				(140	)			140				18,231
Accumulated other comprehensive loss			(14,360	)			(1,230	)			1,230				(14,360	)			(14,494	)			(1,266	)			1,266				(14,494	)
Total stockholder’s equity			18,282				8,303				(8,303	)			18,282				26,237				9,263				(9,263	)			26,237
		$	562,719			$	186,620			$	(146,150	)		$	603,189			$	597,712			$	176,256			$	(136,865	)		$	637,103

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

 

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

 

		Three Months Ended November 30, 2010																Three Months Ended November 30, 2009
		Issuer				Guarantors				Eliminations				Consolidated				Issuer				Guarantors				Eliminations				Consolidated
Net sales		$	445,144			$	351,981			$	(177,978	)		$	619,147			$	443,974			$	324,695			$	(147,743	)		$	620,926
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)			438,483				320,332				(177,978	)			580,837				459,910				290,173				(147,743	)			602,340
Selling, general and administrative expenses			4,224				31,562				—				35,786				5,841				30,918				—				36,759
Depreciation and amortization expenses			4,051				1,585				—				5,636				4,043				1,438				—				5,481
			446,758				353,479				(177,978	)			622,259				469,794				322,529				(147,743	)			644,580
Operating (loss) income			(1,614	)			(1,498	)			—				(3,112	)			(25,820	)			2,166				—				(23,654	)
Other income (expense):
Interest expense, net			(8,715	)			(199	)			—				(8,914	)			(8,132	)			(335	)			—				(8,467	)
Other, net			(807	)			226				—				(581	)			(816	)			210				—				(606
Equity in net (loss) income of subsidiaries			(996	)			—				996				—				1,210				—				(1,210	)			—
			(10,518	)			27				996				(9,495	)			(7,738	)			(125	)			(1,210	)			(9,073	)
(Loss) income before income tax (benefit) expense			(12,132	)			(1,471	)			996				(12,607	)			(33,558	)			2,041				(1,210	)			(32,727	)
Income tax (benefit) expense			(4,043	)			(475	)			—				(4,518	)			(14,248	)			831				—				(13,417	)
Net (loss) income		$	(8,089	)		$	(996	)		$	996			$	(8,089	)		$	(19,310	)		$	1,210			$	(1,210	)		$	(19,310	)

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

 

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

 

		Three Months Ended November 30, 2010																Three Months Ended November 30, 2009
		Issuer				Guarantors				Eliminations				Consolidated				Issuer				Guarantors				Eliminations				Consolidated
Net cash provided by (used in) operating activities		$	22,781			$	3,381			$	—			$	26,162			$	(20,574	)		$	5,821			$	—			$	(14,753	)
Cash flows from investing activities:
Additions to property, plant and equipment			(9,598	)			(1,288	)			—				(10,886	)			(4,225	)			(2,321	)			—				(6,546	)
Additions to deferred turnaround costs			(3,642	)			—				—				(3,642	)			(16	)			(13	)			—				(29	)
Proceeds from asset dispositions			—				1				—				1				5				—				—				5
Net cash used in investing activities			(13,240	)			(1,287	)			—				(14,527	)			(4,236	)			(2,334	)			—				(6,570	)
Cash flows from financing activities:
Net (reductions) borrowings on revolving credit facility			(9,000	)			—				—				(9,000	)			12,000				—				—				12,000
Principal reductions of long-term debt			(154	)			(172	)			—				(326	)			(193	)			(270	)			—				(463	)
Net cash (used in) provided by financing activities			(9,154	)			(172	)			—				(9,326	)			11,807				(270	)			—				11,537
Net increase (decrease) in cash and cash equivalents			387				1,922				—				2,309				(13,003	)			3,217				—				(9,786	)
Cash and cash equivalents, beginning of year			7,765				9,405				—				17,170				21,265				9,797				—				31,062
Cash and cash equivalents, end of period		$	8,152			$	11,327			$	—			$	19,479			$	8,262			$	13,014			$	—			$	21,276

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

 

5.	Segments of Business

 

Intersegment revenues are calculated using market prices and are eliminated upon consolidation. Summarized financial information regarding the Company’s reportable segments is presented in the following tables (in thousands):

 

		Three Months Ended November 30,
		2010				2009
Net Sales
Retail		$	351,219			$	323,629
Wholesale			267,928				297,297
		$	619,147			$	620,926
Intersegment Sales
Wholesale		$	177,216			$	146,677
Operating (Loss) Income
Retail		$	(1,273	)		$	1,929
Wholesale			(1,839	)			(25,583	)
		$	(3,112	)		$	(23,654	)
Depreciation and Amortization
Retail		$	1,413			$	1,328
Wholesale			4,223				4,153
		$	5,636			$	5,481
		November 30, 2010				August 31, 2010
Total Assets
Retail		$	157,342			$	146,932
Wholesale			445,847				490,171
		$	603,189			$	637,103
Capital Expenditures (including non-cash)
Retail		$	1,142			$	5,180
Wholesale			9,778				22,233
		$	10,920			$	27,413

 

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UNITED REFINING COMPANY AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

 

6.	Employee Benefit Plans

 

For the periods ended November 30, 2010 and 2009, net pension and other postretirement benefit costs were comprised of the following:

 

		Pension Benefits								Other Post-Retirement Benefits
		Three Months Ended November 30,								Three Months Ended November 30,
		2010				2009				2010				2009
		(in thousands)
Service cost		$	447			$	888			$	377			$	841
Interest cost on benefit obligation			1,244				1,434				630				1,187
Expected return on plan assets			(1,135	)			(984	)			—				—
Amortization of transition obligation			—				—				—				149
Amortization and deferral of net loss			509				895				(282	)			460
Net periodic benefit cost		$	1,065			$	2,233			$	725			$	2,637

 

As of November 30, 2010, $2,157,000 of contributions have been made to the Company pension plans for the fiscal year ending August 31, 2011.

 

7.	Fair Value Measurements

 

The carrying values of all financial instruments classified as a current asset or current liability approximate fair value because of the short maturity of these instruments. The fair value of marketable securities is determined by available market prices. The carrying value exceeded the fair value of the senior notes at November 30, 2010 and August 31, 2010 by $33,102,000 and $29,846,000, respectively.

 

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Forward Looking Statements

 

This Quarterly Report on Form 10-Q contains certain statements that constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may include, among other things, United Refining Company and its subsidiaries current expectations with respect to future operating results, future performance of its refinery and retail operations, capital expenditures and other financial items. Words such as “expects”, “intends”, “plans”, “projects”, “believes”, “estimates”, “may”, “will”, “should”, “shall”, “anticipates”, “predicts”, and similar expressions typically identify such forward looking statements in this Quarterly Report on Form 10-Q.

 

By their nature, all forward looking statements involve risk and uncertainties. All phases of the Company’s operations involve risks and uncertainties, many of which are outside of the Company’s control, and any one of which, or a combination of which, could materially affect the Company’s results of operations and whether the forward looking statements ultimately prove to be correct. Actual results may differ materially from those contemplated by the forward looking statements for a number of reasons.

 

Although we believe our expectations are based on reasonable assumptions within the bounds of its knowledge, investors and prospective investors are cautioned that such statements are only projections and that actual events or results may differ materially depending on a variety of factors described in greater detail in the Company’s filings with the SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, reports on Form 8-K, etc. In addition to the factors discussed elsewhere in this Quarterly Report on Form 10-Q, the Company’s actual consolidated quarterly or annual operating results have been affected in the past, or could be affected in the future, by additional factors, including, without limitation:

 

•

the demand for and supply of crude oil and refined products;

 

•

the spread between market prices for refined products and market prices for crude oil;

 

•

repayment of debt;

 

•

general economic, business and market conditions;

 

•

risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets;

 

•

the possibility of inefficiencies or shutdowns in refinery operations or pipelines;

 

•

the availability and cost of financing to us;

 

•

environmental, tax and tobacco legislation or regulation;

 

•

volatility of gasoline prices, margins and supplies;

 

•

merchandising margins;

 

•

labor costs;

 

•

level of capital expenditures;

 

•

customer traffic;

 

•

weather conditions;

 

•

acts of terrorism and war;

 

•

business strategies;

 

•

expansion and growth of operations;

 

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•

future projects and investments;

 

•

future exposure to currency devaluations or exchange rate fluctuations;

 

•

expected outcomes of legal and administrative proceedings and their expected effects on our financial position, results of operations and cash flows;

 

•

future operating results and financial condition; and

 

•

the effectiveness of our disclosure controls and procedures and internal control over financial reporting.

 

All subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any such forward looking statements that may be made to reflect events or circumstances that occur, or which we become aware of, after the date of this Quarterly Report on Form 10-Q.

 

Recent Developments

 

The Company continues to be impacted by the volatility of the petroleum market in fiscal year 2011. Average crude prices for the first quarter of fiscal year 2011 has risen as compared to the fourth quarter of fiscal year 2010. The average NYMEX crude price for the second fiscal quarter based on values published on January 7, 2011 was $87.19/bbl, a $9.13/bbl or a 11.7% increase from the average price for the first fiscal quarter of 2011 which was $78.06/bbl.

 

The lagged 3-2-1 crackspread, as measured by the difference between the price of crude oil contracts traded on the NYMEX for the proceeding month to the prices of NYMEX gasoline and heating oil contracts in the current trading month, benefited from the rising crude market. The Company uses a lagged crackspread as a margin indicator as it reflects the time period between the purchase of crude oil and its delivery to the refinery for processing. The lagged crackspread for the second quarter of fiscal year 2011 based on values as of January 7, 2011, was $14.74/bbl, a $3.24/bbl or a 28.2% increase from the lagged crackspread for the first quarter of fiscal year 2011 which was $11.50/bbl.

 

The Company conducted a scheduled maintenance turnaround of the west end of the refinery consisting of the FCC Unit and related units. The turnaround began on October 4, 2010 and was completed on November 4, 2010. The major activity in addition to normal shutdown maintenance was upgrading of the regenerator, flue gas line and electrostatic precipitator at the FCC Unit.

 

On July 26, 2010, a rupture occurred in Line 6B pipeline on Enbridge’s Lakehead system in Michigan. The Company’s heavy crude oil purchases are shipped on Line 6B from western Canada. As a result, on August 5, 2010, the Company was forced to reduce production in its crude processing unit until such time as the Enbridge Line 6B could be repaired. Crude runs for the first quarter of fiscal 2011 were 40,533 bpd versus crude runs of 56,500 bpd for the first quarter of fiscal 2010. The interruption of heavy crude deliveries via Line 6B also negatively affected asphalt production during the asphalt selling season. The Company’s supply group maintained crude sourcing at a reduced rate for the refinery during the disruption to Line 6B through other Enbridge pipelines. On September 28, 2010, Enbridge began a phased restart and return to service of Line 6B.

 

The Company’s property insurance covering the refinery operation contains a provision for contingent business interruption in the maximum amount of $15 million plus up to $5 million towards expenses. As such, the limits of coverage are separate from the general limits applying to direct damage to the refinery. The Company has placed the insurers on notice of the Enbridge loss and, in connection therewith, is preparing its claim.

 

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The Company is in the process of determining the losses it suffered as a result of the pipeline rupture, and intends to seek restitution from Enbridge for all of the losses it has incurred. The Company believes that the estimated losses due to this disruption, based on the most current information available to it, is between $50 and $60 million dollars.

 

Results of Operations

 

The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations are organized into two business segments: wholesale and retail.

 

The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers. The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names through a network of Company-operated retail units and convenience and grocery items through gasoline stations and convenience stores under the Red Apple Food Mart^® and Country Fair^® brand names.

 

A discussion and analysis of the factors contributing to the Company’s results of operations are presented below. The accompanying Consolidated Financial Statements and related Notes, together with the following information, are intended to supply investors with a reasonable basis for evaluating the Company’s operations, but should not serve as the only criteria for predicting the Company’s future performance.

 

Retail Operations:

 

		Three Months Ended November 30,
		2010				2009
		(dollars in thousands)
Net Sales
Petroleum		$	286,481			$	261,343
Merchandise and other			64,738				62,286
Total Net Sales			351,219				323,629
Costs of goods sold			319,625				289,636
Selling, general and administrative expenses			31,454				30,736
Depreciation and amortization expenses			1,413				1,328
Segment Operating (Loss) Income		$	(1,273	)		$	1,929
Retail Operating Data:
Petroleum sales (thousands of gallons)			99,111				97,454
Petroleum margin (a)		$	15,105			$	18,032
Petroleum margin ($/gallon) (b)			.1524				.1850
Merchandise and other margins		$	16,489			$	15,961
Merchandise margin (percent of sales)			25.5	%			25.6	%

 

(a)	Includes the effect of intersegment purchases from the Company’s wholesale segment at prices which approximate market.

(b)

Company management calculates petroleum margin per gallon by dividing petroleum gross margin by petroleum sales volumes. Management uses fuel margin per gallon calculations to compare profitability to other companies in the industry. Petroleum margin per gallon may not be comparable to similarly titled measures used by other companies in the industry.

 

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Comparison of Fiscal Quarters Ended November 30, 2010 and 2009

 

Net Sales

 

Retail sales increased during the fiscal quarter ended November 30, 2010 by $27.6 million or 8.5% for the comparable period in fiscal 2010 from $323.6 million to $351.2 million. The increase was primarily due to $25.1 million in petroleum sales and $2.5 million in merchandise sales. The petroleum sales increase resulted from a 7.8% increase in retail selling prices per gallon, and a 1.7 million gallon or 1.7% increase in retail petroleum volume. The merchandise sales increase is primarily due to increased prepared food, beverages and cigarette sales due to promotional campaigns and increased selling prices.

 

Costs of Goods Sold

 

Retail costs of goods sold increased during the fiscal quarter ended November 30, 2010 by $30.0 million or 10.4% for the comparable period in fiscal 2010 from $289.6 million to $319.6 million. The increase was primarily due to $26.0 million in petroleum purchase prices, merchandise cost of $1.9 million, fuel tax of $1.0 million, and inventory costs of $1.1 million.

 

Selling, General and Administrative Expenses

 

Retail Selling, General and Administrative (“SG&A”) expenses increased during the fiscal quarter ended November 30, 2010 by $.8 million or 2.0% for the comparable period in fiscal 2010 from $30.7 million to $31.5 million. The increase was primarily due to payroll costs of $.6 million, credit/customer service costs of $.4 million, maintenance costs of $.1 million, and insurance/utilities/taxes of $.1 million offset by a decrease in pension/post retirement costs of $.4 million.

 

Wholesale Operations:

 

		Three Months Ended November 30,
		2010				2009
		(dollars in thousands)
Net Sales (a)		$	267,928			$	297,297
Costs of goods sold (exclusive of depreciation and amortization)			261,212				312,704
Selling, general and administrative expenses			4,332				6,023
Depreciation and amortization expenses			4,223				4,153
Segment Operating Loss		$	(1,839	)		$	(25,583	)

 

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Key Wholesale Operating Statistics:

 

		Three Months Ended November 31,
		2010				2009
Refinery Product Yield (thousands of barrels)
Gasoline and gasoline blendstock			1,629				2,281
Distillates			1,131				1,139
Asphalt			632				1,556
Butane, propane, residual products, internally produced fuel and other (“Other”)			768				527
Total Product Yield			4,160				5,503
% Heavy Crude Oil of Total Refinery Throughout (b)			22	%			61	%
Crude throughput (thousand barrels per day)			40.5				56.5
Product Sales (thousand of barrels) (a)
Gasoline and gasoline blendstock			1,092				1,263
Distillates			908				852
Asphalt			1,075				1,940
Other			124				251
Total Product Sales Volume			3,199				4,306
Product Sales (dollars in thousands) (a)
Gasoline and gasoline blendstock		$	98,392			$	102,529
Distillates			88,964				70,313
Asphalt			74,362				113,247
Other			6,210				11,208
Total Product Sales		$	267,928			$	297,297

 

(a)	Sources of total product sales include products manufactured at the refinery located in Warren, Pennsylvania and products purchased from third parties.

(b)	The Company defines “heavy” crude oil as crude oil with an American Petroleum Institute specific gravity of 26 or less.

 

Comparison of Fiscal Quarters Ended November 30, 2010 and 2009

 

During the three months ended November 30, 2010, wholesale sales were negatively affected by the Enbridge Pipeline disruption and the 30-day scheduled refinery maintenance turnaround in October. These two events resulted in the Company running an average crude throughput of 40,500 bbl per day versus 56,500 bbl per day for the comparable period in fiscal 2010. The Enbridge Pipeline disruption also resulted in the Company running 22% of heavy crude oil versus 61% for the comparable period in fiscal 2010.

 

Net Sales

 

Wholesale sales decreased during the three months ended November 30, 2010 by $29.4 million or 9.9% for the comparable period in fiscal 2010 from $297.3 million to $267.9 million. This was due to a 25.7% decrease in wholesale volume offset by a 21.3% increase in wholesale prices.

 

Costs of Goods Sold (exclusive of depreciation and amortization)

 

Wholesale costs of goods sold decreased during the three months ended November 30, 2010 by $51.5 million or 16.5% for the comparable period in fiscal 2010 from $312.7 million to $261.2 million. The decrease in wholesale costs of goods sold during this period was primarily due to a decrease in cost of raw materials.

 

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Selling, General and Administrative Expenses

 

Wholesale SG&A expenses decreased during the three months ended November 30, 2010 by $1.7 million or 28.1% for the comparable period in fiscal 2010 from $6.0 million or 1.8% of net wholesale to $4.3 million or 1.6% of net wholesale sales. The decrease was primarily due to changes made in pension/post retirement benefits. Effective September 1, 2010, postretirement medical benefits for new hires and active salaried employees retiring after September 1, 2010 were eliminated. Additionally, effective January 1, 2011, deductibles and co-payments will be added to the medical benefits plan for all plan participants. For salaried employees meeting certain age and service requirements, the Company will contribute a defined dollar amount towards the cost of retiree healthcare based upon the employee’s length of service. Similarly, effective August 31, 2010, benefits under the Company’s defined benefit pension plan were frozen for all salaried employees, including the Company’s Chief Executive Officer and Chief Financial Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan for all eligible employees as well as a transition contribution for older employees.

 

Consolidated Expenses:

 

Interest Expense, net

 

Net interest expense (interest expense less interest income) for the three months ended November 30, 2010 increased $.4 million or 4.7% for the comparable period in fiscal 2010 from $8.5 million to $8.9 million. The increase was due in part to increased borrowings on the PNC Credit Facility during the period.

 

Income Tax Expense / (Benefit)

 

The Company’s effective tax rate for the three months ended November 30, 2010 and 2009 was approximately 36% and 41% respectively. This reduction in the effective tax rate was due to the Company recording a valuation allowance for Pennsylvania Net Operating tax losses in the November 2010 period.

 

Liquidity and Capital Resources

 

We operate in an environment where our liquidity and capital resources are impacted by changes in the price of crude oil and refined petroleum products, availability of credit, market uncertainty and a variety of additional factors beyond our control. Included in such factors are, among others, the level of customer product demand, weather conditions, governmental regulations, worldwide political conditions and overall market and economic conditions.

 

The following table summarizes selected measures of liquidity and capital sources (in thousands):

 

		November 30, 2010
Cash and cash equivalents		$	19,479
Working capital		$	147,399
Current ratio			1.9
Debt		$	403,556

 

Primary sources of liquidity have been cash and cash equivalents, cash flows from operations and borrowing availability under a revolving line of credit. We believe available capital resources will be adequate to meet our working capital, debt service, and capital expenditure requirements for existing operations.

 

Our cash and cash equivalents consist of bank balances and investments in money market funds. These investments have staggered maturity dates, none of which exceed three months. They have a high degree of liquidity since the securities are traded in public markets.

 

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		Three Months Ended November 30, 2010
		(in millions)
Significant uses of cash Investing activities:
Additions to deferred turnaround costs		$	(3.6	)
Property, plant and equipment
FCC feed hydrotreater		$	(4.1	)
Other general capital items (tank repairs, refinery piping, etc)			(1.9	)
Retail maintenance (blacktop, roof, HVAC, rehab)			(.6	)
Computers and equipment upgrade			(.3	)
Retail petroleum upgrade			(.2	)
Capital equipment			(.1	)
State and federal mandates:
Renewable fuels – cost estimates			(2.1	)
Reduction of benzene and gasoline			(1.6	)
Total property, plant and equipment		$	(10.9	)
Net cash used in investing activities		$	(14.5	)
Financing activities:
Net borrowings on revolving credit facility		$	(9.0	)
Principal reductions of long term debt			(.3	)
Net cash provided by financing activities		$	(9.3	)
Working capital items:
Decrease in inventory		$	63.0
Accrued liabilities increase			9.5
Accounts payable decrease			(23.0	)
Prepaid expense increase			(10.7	)
Accounts receivable increase			(7.8	)
Sales, use and fuel taxes payable decrease			(1.8	)
Income taxes payable decrease			(.5	)
Amounts due from affiliated companies, net increase			(.3	)
Cash provided by working capital items		$	28.4

 

We require a substantial investment in working capital which is susceptible to large variations during the year resulting from purchases of inventory and seasonal demands. Inventory purchasing activity is a function of sales activity and turnaround cycles for the different refinery units.

 

Maintenance and non-discretionary capital expenditures have averaged approximately $6.0 million annually over the last three years for the refining and marketing operations. Management does not foresee any increase in these maintenance and non-discretionary capital expenditures during fiscal year 2011.

 

Future liquidity, both short and long-term, will continue to be primarily dependent on realizing a refinery margin sufficient to cover fixed and variable expenses, including planned capital expenditures. We expect to be able to meet our working capital, capital expenditure, contractual obligations, letter of credit and debt service requirements out of cash flow from operations, cash on hand and borrowings under our Revolving Credit Facility with PNC Bank, N.A. as Agent Bank. Our revolving credit facility with PNC Bank, N.A., as Agent Bank (the “Revolving Credit Facility”) is $130,000,000. This provides the Company with flexibility relative to its cash flow requirements in light of market fluctuations, particularly involving crude oil prices and seasonal business cycles and will assist the Company in meeting its working capital, ongoing capital expenditure needs and for general corporate purposes. The agreement expires on November 27, 2011. Under the Revolving Credit Facility, the applicable margin is calculated on the average unused availability as follows: (a) for base rate borrowing, at the

 

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greater of the Agent Bank’s prime rate plus an applicable margin of 0% to .5%; the Federal Funds Open Rate plus .5%; or the Daily LIBOR rate plus 1%; (b) for euro-rate based borrowings, at the LIBOR Rate plus an applicable margin of 2.35% to 1.75%. The Agent Bank’s prime rate at November 30, 2010 was 3.25%.

 

The Revolving Credit Facility is secured primarily by certain cash accounts, accounts receivable and inventory. Until maturity, we may borrow on a borrowing base formula as set forth in the facility. We had standby letters of credit of $4.4 million as of November 30, 2010 and there were outstanding borrowings under the Revolving Credit Facility in the amount of $74.0 million resulting in net availability of $51.6 million. As of January 14, 2011 there was $80.0 million outstanding on the $130 million Revolving Credit Facility and standby letters of credit in the amount of $4.4 million, resulting in a net availability of $45.6 million and the Company had full access to it. The Company’s working capital ratio was 1.9 as of November 30, 2010.

 

Although we are not aware of any pending circumstances which would change our expectation, changes in the tax laws, the imposition of and changes in federal and state clean air and clean fuel requirements and other changes in environmental laws and regulations may also increase future capital expenditure levels. Future capital expenditures are also subject to business conditions affecting the industry. We continue to investigate strategic acquisitions and capital improvements to our existing facilities.

 

Federal, state and local laws and regulations relating to the environment affect nearly all of our operations. As is the case with all the companies engaged in similar industries, we face significant exposure from actual or potential claims and lawsuits involving environmental matters. Future expenditures related to environmental matters cannot be reasonably quantified in many circumstances due to the uncertainties as to required remediation methods and related clean-up cost estimates. We cannot predict what additional environmental legislation or regulations will be enacted or become effective in the future or how existing or future laws or regulations will be administered or interpreted with respect to products or activities to which they have not been previously applied.

 

Seasonal Factors

 

Seasonal factors affecting the Company’s business may cause variation in the prices and margins of some of the Company’s products. For example, demand for gasoline tends to be highest in spring and summer months, while demand for home heating oil and kerosene tends to be highest in winter months.

 

As a result, the margin on gasoline prices versus crude oil costs generally tends to increase in the spring and summer, while margins on home heating oil and kerosene tend to increase in winter.

 

Inflation

 

The effect of inflation on the Company has not been significant during the last five fiscal years.

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

The Company uses its revolving credit facility to finance a portion of its operations. As of January 14, 2011, there was $80.0 million outstanding under the revolving line of credit. These on-balance sheet financial instruments, to the extent they provide for variable rates, expose the Company to interest rate risk resulting from changes in the PNC Prime rate, the Federal Funds or LIBOR rate.

 

The Company has exposure to price fluctuations of crude oil and refined products. The Company does not manage the price risk related to all of its inventories of crude oil and refined products with a permanent formal hedging program, but does manage its risk exposures by managing inventory levels. The Company had no open future positions at November 30, 2010.

 

See also Recent Developments section of Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

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ITEM 4.

CONTROLS AND PROCEDURES.

 

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of November 30, 2010. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of November 30, 2010, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

 

There have not been any changes in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended November 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

 

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PART II

OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS.

 

None.

 

ITEM 1A.

RISK FACTORS.

 

There have been no material changes in our Risk Factors disclosed in the Form 10-K for the year ended August 31, 2010.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4.

(REMOVED AND RESERVED).

 

ITEM 5.

OTHER INFORMATION.

 

None.

 

ITEM 6.

EXHIBITS.

 

Exhibit 31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

33

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Table of Contents

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

34

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Table of Contents

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

35

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Table of Contents

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 14, 2011

 

 

36