<PAGE>   1
  
                                   
                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION 
                        Washington, D.C. 20549
                                   
                                   
                               FORM 10-Q
                                   
                                    
  
  
  
  
  /X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
       SECURITIES EXCHANGE ACT OF 1934 
               For the quarterly period ended September 30, 1995
                                   
                                  OR
                                    
       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
       SECURITIES EXCHANGE ACT OF 1934
               For the transition period from  __________ to __________
                                   
                    Commission file number 1-11392
                                   
                   CLARK REFINING & MARKETING, INC.
        (Exact name of registrant as specified in its charter)
                                   
                                   
          Delaware                          43-1491230
  (State or other jurisdiction          (I.R.S. Employer
  of incorporation or organization)    Identification No.)
  
   8182 Maryland Avenue                    63105-3721
    St. Louis, Missouri                    (Zip Code)
  (Address of principal executive offices)
  
   Registrant's telephone number, including area code (314) 854-9696
                                    
  
     Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
  1934 during the preceding 12 months (or for such shorter period that the
  registrant was required to file such reports), and (2) has been subject to
  such filing requirements for the past 90 days.  Yes (X) No (  )
  
     Number of shares of registrant's common stock, $.01 par value,
  outstanding as of November 10, 1995:  100, all of which are owned by Clark
  USA, Inc.
  
  
  
  
  
  
 <PAGE>   2
                  REPORT OF INDEPENDENT ACCOUNTANTS
                                  
                                  
                                   
  To the Board of Directors of 
  Clark Refining & Marketing, Inc.:
  
  
     We have reviewed the accompanying consolidated balance sheet of Clark
  Refining & Marketing, Inc. (a Delaware corporation) and subsidiary as of
  September 30, 1995, and the related consolidated statements of earnings for
  the three and nine month periods ended September 30, 1995 and 1994 and cash
  flows for the nine month period ended September 30, 1995 and 1994.  These
  financial statements are the responsibility of the Company's management.
  
     We conducted our review in accordance with standards established by the
  American Institute of Certified Public Accountants.  A review of interim
  financial information consists principally of obtaining an understanding of
  the system for the preparation of interim financial information, applying
  analytical review procedures to the financial data and making inquiries of
  persons responsible for financial and accounting matters.  It is substantially
  less in scope than an audit in accordance with generally accepted auditing
  standards, the objective of which is the expression of an opinion regarding
  the financial statements taken as a whole.  Accordingly, we do not express
  such an opinion.
  
     Based on our review, we are not aware of any material modifications that
  should be made to the financial statements referred to above for them to be
  in conformity with generally accepted accounting principles.
  
     We have previously audited, in accordance with generally accepted
  auditing standards, the balance sheet of Clark Refining & Marketing, Inc. as
  of December 31, 1994, and the related statements of earnings, stockholder's
  equity, and cash flows for the year then ended (not presented herein); and in
  our report dated February 3, 1995, we expressed an unqualified opinion on
  those statements.
  
     In our opinion, the information set forth in the accompanying balance
  sheet as of December 31, 1994 is fairly stated, in all material respects, in
  relation to the financial statements from which it has been derived.
  
  
                                        Coopers & Lybrand L.L.P.
  
  St. Louis, Missouri,
   October 23, 1995, except for
   Note 10 for which the date is
   November 3, 1995
  
 <PAGE>   3
CLARK REFINING & MARKETING, INC. AND SUBSIDIARY                             
 CONSOLIDATED BALANCE SHEETS                                 
(Dollars in thousands except per share data)                                 
<TABLE>
<CAPTION>                                 
                            
                     
                                     Reference         September 30,        December 31,    
             ASSETS                     Note               1995                 1994
                                     ---------         -------------        -------------
                                                        (Unaudited)       
<S>                                  <C>               <C>                  <C>
CURRENT ASSETS:                     
   Cash and cash equivalents              2            $      76,842        $     105,450
   Short-term investments                 3                   29,917               28,658  
   Accounts receivable                                       153,344               77,794
   Inventories                            4                  301,350              151,466 
   Prepaid expenses and other                                 15,851               15,659     
                                                       -------------        -------------
     Total current assets                                    577,304              379,027
                     
PROPERTY, PLANT AND EQUIPMENT             7                  518,962              429,805
                     
OTHER ASSETS                              5                   42,413               50,717
                                                       -------------        ------------- 
                                                       $   1,138,679        $     859,549     
                                                       =============        =============
                     
                     
    LIABILITIES AND STOCKHOLDER'S EQUITY                  
                     
CURRENT LIABILITIES:                     
   Accounts payable                       2            $     288,750        $     165,610
   Accrued expenses and other             6                   47,967               41,639     
   Accrued taxes other than income                            41,438               41,407     
                                                       -------------        -------------
     Total current liabilities                               378,155              248,656
                 
LONG-TERM DEBT                                               400,615              400,734     
DEFERRED INCOME TAXES                                         21,101               29,178     
OTHER LONG-TERM LIABILITIES                                   39,137               18,129     
CONTINGENCIES                             9                       --                   --      
                     
STOCKHOLDER'S EQUITY:                     
   Common stock ($.01 par value per share;                      
      1,000 shares authorized and 100 shares                     
      issued and outstanding)                                     --                   --
   Paid-in capital                        8                  180,000               30,000
   Retained earnings                                         119,671              132,852
                                                       -------------        -------------
     Total stockholder's equity                              299,671              162,852
                                                       -------------        -------------
                                                       $   1,138,679        $     859,549     
                                                       =============        =============
</TABLE>                     
                     
The accompanying notes are an integral part of these statements. 

<PAGE>   4
CLARK REFINING & MARKETING, INC. AND SUBSIDIARY                 
CONSOLIDATED STATEMENTS OF EARNINGS                 
(Unaudited)                 
(Dollars in thousands)                 
<TABLE>                
<CAPTION>              

                                     Reference                For the three months 
                                       Note                    ended September 30,        
                                     ---------            -----------------------------
                                                             1995               1994
                                                          ----------         ----------
<S>                                  <C>               <C>                  <C>                 

NET SALES AND OPERATING REVENUES                       $      1,211,760     $       689,265

EXPENSES:                 
    Cost of sales                                            (1,062,982)           (597,442)
    Operating expenses                                         (107,760)            (58,611)
    General and administrative expenses                          (7,556)             (7,742)
    Depreciation                                                 (8,004)             (6,726)
    Amortization                                                 (3,021)             (2,354)
    Recovery of inventory write-down 
      to market value                     5                          --                  -- 
                                                       ----------------     ---------------
                                                             (1,189,323)           (672,875)
                 
OPERATING INCOME                                                 22,437              16,390 
                 
    Interest and financing costs, net    5,6                     (9,915)             (8,772)
                                                       ----------------     --------------- 
EARNINGS BEFORE INCOME TAXES                                     12,522               7,618 
                 
    Income tax provision                                         (4,758)             (2,568)
                                                       ----------------     ---------------
NET EARNINGS                                           $          7,764     $         5,050 
                                                       ================     ===============
</TABLE>
                 
                 
The accompanying notes are an integral part of these statements.  


<PAGE>   5
CLARK REFINING & MARKETING, INC. AND SUBSIDIARY                 
CONSOLIDATED STATEMENTS OF EARNINGS                 
(Unaudited)                 
(Dollars in thousands)                 
<TABLE>                
<CAPTION>              

                                     Reference                For the nine months 
                                       Note                    ended September 30,        
                                     ---------            -----------------------------
                                                             1995               1994
                                                          ----------         ----------
<S>                                  <C>               <C>                  <C>                 

                 
NET SALES AND OPERATING REVENUES                       $   3,376,857        $  1,842,209 
                 
EXPENSES:                     
    Cost of sales                                         (3,027,788)         (1,574,837)
    Operating expenses                                      (288,656)           (174,392)
    General and administrative expenses                      (23,286)            (23,103)
    Depreciation                                             (22,613)            (19,853)
    Amortization                          5                   (8,848)             (8,087)
    Recovery of inventory write-down 
      to market value                     4                       --              26,500 
                                                       -------------        ------------
                                                          (3,371,191)         (1,773,772)
                                                       -------------        ------------

OPERATING INCOME                                               5,666              68,437 
                 
    Interest and financing costs, net    5,6                 (28,424)            (25,738)
    Other income                                                  --                  -- 
                                                       -------------        ------------
EARNINGS (LOSS) BEFORE INCOME TAXES                          (22,758)             42,699 
                 
    Income tax benefit (provision)                             8,648             (15,691)
                                                       -------------        ------------
NET EARNINGS (LOSS)                                    $     (14,110)       $     27,008 
                                                       =============        =============
</TABLE>
                 
The accompanying notes are an integral part of these statements.  


<PAGE>   6
CLARK REFINING & MARKETING, INC. AND SUBSIDIARY              
CONSOLIDATED STATEMENTS OF CASH FLOWS              
(Unaudited)              
(Dollars in thousands)              

<TABLE>              
<CAPTION>              

                                                              For the nine months 
                                                               ended September 30,        
                                                          -----------------------------
                                                             1995               1994
                                                          ----------         ----------    
<S>                                                    <C>                  <C>                 
              
CASH FLOWS FROM OPERATING ACTIVITIES:              
  Net earnings (loss)                                  $       (14,110)     $         27,008     
              
  Adjustments:              
       Depreciation                                             22,613                19,853     
       Amortization                                             12,623                 8,969     
       Realized loss on sales of investments                        --                 1,774     
       Share of earnings of affiliates, net of 
         dividends                                                (741)                 (610)    
       Deferred income taxes                                    (8,648)               17,133     
       Recovery of inventory write-down to market value             --               (26,500)    
       Other                                                     1,008                   953     
              
  Cash provided by (reinvested in) working capital -              
       Accounts receivable, prepaid expenses and other         (80,899)              (38,971)    
       Inventories                                            (149,884)               23,244     
       Accounts payable, accrued expenses, taxes other 
         than income, and other                                132,290               (10,200)
                                                       ---------------      ----------------
       Net cash provided by (used in) operating 
         activities                                            (85,748)               22,653     
                                                       ===============      ================
CASH FLOWS FROM INVESTING ACTIVITIES:              
  Purchases of short-term investments                          (25,701)              (94,498)    
  Sales of short-term investments                               25,942                99,101     
  Expenditures for property, plant and equipment               (24,187)              (56,846)    
  Expenditures for refinery turnaround                          (2,764)               (5,873)    
  Refinery acquisition expenditures                            (69,746)                   --     
  Proceeds from disposals of property, plant and 
    equipment                                                   15,934                 5,268 
                                                       ---------------       ---------------
      Net cash used in investing activities                    (80,522)              (52,848)
                                                       ---------------       ---------------
              
CASH FLOWS FROM FINANCING ACTIVITIES:              
  Long-term debt payments                                         (119)                 (587)    
  Capital contribution                                         150,000                    --     
  Deferred financing costs                                     (12,219)                 (892)
                                                       ---------------       ---------------
      Net cash provided by (used in) financing 
        activities                                             137,662                (1,479)
                                                       ---------------       ---------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                      (28,608)              (31,674)    
CASH AND CASH EQUIVALENTS, beginning of period                 105,450                78,344
                                                       ---------------       ---------------
CASH AND CASH EQUIVALENTS, end of period               $        76,842       $        46,670
                                                       ===============       ===============
</TABLE>
              
The accompanying notes are an integral part of these statements.              

 <PAGE>   7
 FORM 10-Q - PART I
 ITEM 1 Financial Statements (continued)
 
 Clark Refining & Marketing, Inc. and Subsidiary
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 September 30, 1995
 (tabular dollar amounts in thousands of US dollars)
 
 
 1. Basis of Preparation 
 
      The unaudited consolidated balance sheet of Clark Refining & Marketing,
 Inc. and Subsidiary (the "Company"), a Delaware corporation, as of September
 30, 1995, and the related consolidated statements of earnings for the three
 month and nine month periods ended September 30, 1995 and 1994, and statements
 of cash flows for the nine month period ended September 30, 1995 and 1994,
 have been reviewed by independent accountants.  Clark Port Arthur Pipeline
 Company, a Delaware corporation, the new wholly-owned subsidiary of The
 Company, is included in the consolidated results of the Company.  In the
 opinion of the management of the Company, all adjustments (consisting only of
 normal recurring adjustments) necessary for a fair presentation of the
 financial statements have been included therein.  The results of this interim
 period are not necessarily indicative of results for the entire year.
 
      The financial statements have been prepared in accordance with the
 instructions to Form 10-Q.  Accordingly, certain information and disclosures
 normally included in financial statements prepared in accordance with
 generally accepted accounting principles have been condensed or omitted. 
 These unaudited financial statements should be read in conjunction with the
 audited financial statements and notes thereto for the year ended December 31,
 1994.
 
 
 2. Cash and Cash Equivalents
 
      As a result of the Company's cash management system, checks issued but
 not yet presented to the banks for payment may create negative book cash
 balances.  Historically, such negative balances were reflected as an
 adjustment to cash.  At September 30, 1995 the Company included these negative
 balances in accounts payable and has restated prior periods to reflect this
 presentation.  Such negative balances included in accounts payable were $12.4
 million and $10.2 million at September 30, 1995 and December 31, 1994,
 respectively.
 
 
 3. Short-term Investments
 
      The Company's short-term investments are all considered "Available-for-
 Sale" and are carried at fair value with the resulting unrealized gain or loss
 (net of applicable taxes) shown as a component of retained earnings.
 
      Short-term investments consisted of the following:
<TABLE>
<CAPTION>
                                September 30, 1995                          December 31, 1994      
                        ___________________________________        ___________________________________
                        Amortized   Unrealized    Aggregate        Amortized  Unrealized    Aggregate
 Major Security Type      Cost      Gain/(Loss)   Fair Value         Cost     Gain/(Loss)   Fair Value 
 -------------------    ---------   -----------   ----------       ---------  -----------   ----------
 <S>                    <C>         <C>           <C>              <C>        <C>           <C>

 U.S. Debt Securities    $ 30,317    $    (400)    $  29,917        $ 30,558   $   (1,900)   $  28,658
 
</TABLE>
 
 <PAGE>   8
      The contractual maturities of the short-term investments at 
 September 30, 1995 were:
<TABLE> 
<CAPTION>                                         
                                                Amortized      Aggregate
                                                  Cost         Fair Value        
                                               ----------      ----------
<S>                                            <C>             <C>
      Due in one year or less                   $   6,013       $   5,984
      Due after one year through five years        24,304          23,933
                                                ---------       ---------
                                                $  30,317       $  29,917                       
                                                =========       =========
</TABLE>
      Although some of the contractual maturities of these short-term
 investments are over one year, management's intent is to use the funds for
 current operations and not hold the investments to maturity.
 
      For the three month and nine month periods ended September 30, 1995, the
 proceeds from sales of Available-for-Sale securities was $18.0 million and
 $25.9 million, respectively, with no realized gain or loss in either period. 
 For the three month and nine month periods ended September 30, 1994, the
 proceeds from the sale of Available-for-Sale securities were $50.8 million and
 $99.1 million, respectively, with $1.0 million and $1.8 million, respectively,
 of realized losses recorded for the three month and nine month periods. 
 Realized gains and losses are computed using the specific identification
 method.
 
      The change in the unrealized holding gains or losses on Available-for-
 Sale securities for the three month and nine month periods ended September 30,
 1995, was a gain of $0.1 million ($0.1 million after taxes) and a gain of $1.5
 million ($0.9 million after taxes), respectively.  The net unrealized gain or
 loss is included as a component of retained earnings.
 
 
 4. Inventories
 
      The carrying value of inventories consisted of the following:
<TABLE> 
<CAPTION>
                                               September 30,    December 31,
                                                   1995             1994  
                                               -------------    ------------
<S>                                          <C>              <C>
       Crude oil  . . . . . . . . . . . . .  $     86,933     $     42,760
       Refined products and blendstocks . .       178,129           87,957
       Convenience products . . . . . . . .        21,116           14,904
       Warehouse stock and other. . . . . .        15,172            5,845
                                             ------------     ------------
                                             $    301,350     $    151,466
                                             ============     ============
</TABLE> 
      The market value of these inventories at September 30, 1995 was
 approximately $5.3 million above the carrying value (December 31, 1994 - $1.9
 million above the carrying value).  At September 30, 1995, the Company had
 $0.6 million of unrealized losses (December 31, 1994 - $2.0 million) from its
 hedging activities which limit risk related to price fluctuations in crude oil
 and refined products.
 
      In connection with the Port Arthur refinery acquisition (see Note 7,
 "Acquisition of Port Arthur Refinery"), the Company purchased crude oil and
 product inventory and also entered into a new three year revolving credit
 facility used primarily for the issuance of letters of credit to secure
 purchases of crude oil.  The amount of the new facility is the lesser of $400
 million or the amount available under a defined borrowing base, representing
 specified percentages of cash, investments, accounts receivable, inventory and
 other working capital items.  The amount available under the facility at
 September 30, 1995 was $400 million.  This credit facility is collateralized
 by substantially all of the Company s current assets and certain intangibles.
 
 <PAGE>   9
 
 5. Other Assets
 
      Amortization of deferred financing costs for the three month and nine
 month periods ended September 30, 1995, was $1.5 million (1994 - $0.3
 million) and $3.7 million (1994 - $0.9 million), respectively, and is included
 in "Interest and financing costs, net".
 
      Amortization of turnaround costs for the three month and nine month
 periods ended September 30, 1995, was $3.0 million (1994 - $2.4 million) and
 $8.8 million (1994 - $8.1 million), respectively.
 
 
 6. Interest and Financing Costs, Net
 
      Interest and financing costs, net, consisted of the following:
<TABLE> 
<CAPTIVE>
                                  For the three months          For the nine months
                                   ended September 30,          ended September 30,
                                 ----------------------        ---------------------
                                  1995            1994          1995           1994   
                                 ------          ------        ------         ------
<S>                              <C>             <C>           <C>            <C>

      Interest expense. .  . .    $  10,155       $ 10,118      $ 30,730       $ 30,466
      Financing costs . .  . .        1,454            352         3,749          1,025
      Interest income . .  . .       (1,570)          (918)       (4,780)        (4,268)
                                  ---------       --------      --------       --------
                                     10,039          9,552        29,699         27,223
      Capitalized interest             (124)          (780)       (1,275)        (1,485)
                                  ---------       --------      --------       --------
                                  $   9,915       $  8,772      $ 28,424       $ 25,738
                                  =========       ========      ========       ========
</TABLE>
      Accrued interest payable at September 30, 1995 of $8.7 million (December
 31, 1994 - $6.9 million) is included in "Accrued expenses and other".
 
 
 7. Acquisition of Port Arthur Refinery
 
    On February 27, 1995, the Company purchased Chevron U.S.A. Inc. s
 ("Chevron") Port Arthur, Texas refinery, acquiring the refinery assets and
 certain related terminals, pipelines, and other assets for a purchase price
 of approximately $70 million.  The purchase price of the assets, including all
 acquisition costs and assumed liabilities will be allocated over all of the
 refinery and related assets using the purchase method of accounting.  In
 addition, the Company purchased the related petroleum inventory in storage and
 pipelines, and various spare parts and supplies for approximately $136
 million, as revised in the second quarter.  A final allocation of the purchase
 price will be determined in the fourth quarter of 1995 when appraisals and
 other studies are completed.
 
    The Company has agreements to sell to Chevron, at market prices, 40,000
 barrels per day of gasoline and 6,500 barrels per day of low-sulfur diesel and
 jet fuel for one year from the date of the Acquisition.  In addition, the
 Company has entered into supply agreements with Chevron and Chevron Chemical
 Company providing for the purchase and sale by the Company of various
 quantities of products and commodities at market prices.
 
    The purchase agreement also provides for contingent payments to Chevron
 of up to $125 million over a five year period from the closing date of the
 acquisition in the event refining industry margin indicators exceed certain
 escalating levels.  These contingent payments will be calculated annually and
 the appropriate liability, if any, will be recorded at that time.  While
 Chevron retained primary responsibility for required remediation of most pre-
 closing environmental contamination, The Company assumed responsibility for
 environmental contamination beneath and within 25 to 100 feet of the
 facility's active processing units.
 <PAGE>   10
 
 8. Certain Financings
 
    On February 27, 1995, Clark USA, Inc. ("Clark USA"), Clark's parent company,
 obtained a portion of the funds necessary to finance the Port Arthur
 acquisition from a subsidiary of its parent company, The Horsham Corporation,
 a Quebec corporation ("Horsham"), by selling to the subsidiary shares of new
 classes of common stock ("New Common Stock") of Clark USA for $135 million. 
 Subsequently, the Horsham subsidiary resold $120 million of such New Common
 Stock, representing an interest of from 35.6% to 40.0% in Clark USA, to an
 institutional money manager. Clark USA subsequently contributed $150 million
 to the Company for the purchase of the refinery.
 
    In connection with the financing and closing of the Port Arthur
 acquisition, the Company sought consents from the holders of its 9 1/2% Senior
 Notes and its 10 1/2% Senior Notes to waive or amend the terms of certain
 covenants under the indentures governing these securities.  On February 17,
 1995, the Company received the requisite consents from its note holders.
 
    These consents (i) permitted the Company to increase the amount of its
 authorized working capital and letter of credit facility to the greater of
 $400 million or the amount available under a defined borrowing base, (ii)
 permitted the incurrence of $75 million of additional tax-exempt indebtedness
 for qualifying projects, (iii) exempted the contingent payment obligation to
 Chevron of up to $125 million over a five year period from the definition of
  Indebtedness , (iv) amended provisions relating to the use of asset
 disposition proceeds.
 
    The Company has made payments to each holder whose duly executed consent
 was received and not revoked of $7.50 per $1,000 aggregate principal amount
 of the 9 1/2% Notes and 10 1/2% Notes.
 
    In connection with the Port Arthur acquisition and the above financing
 transactions, the Company entered into a new three year revolving credit
 facility, collateralized by substantially all of its current assets and
 certain intangibles (see Note 4 "Inventories").  With the acquisition, the
 amount of the amended facility is the lesser of $400 million or the amount
 available under a borrowing base, as defined, representing specified
 percentages of cash, investments, accounts receivable, inventory and other
 working capital items.
 
 
 9. Contingencies 
 
    The Company has been named as a defendant in forty civil lawsuits filed by
 residents of Hartford, Illinois, seeking unspecified damages for the presence
 of gasoline in the soil and groundwater beneath the plaintiffs' properties. 
 Shell Oil has been named as a co-defendant in six of the above-referenced
 lawsuits.  The plaintiffs in thirty-four of the lawsuits, which are pending
 solely against the Company, have all voluntarily dismissed their lawsuits
 without prejudice.  The plaintiffs have one year from such dismissal in which
 to refile their claims.
 
    The United States Equal Employment Opportunity Commission ("EEOC") has
 filed a class action lawsuit against the Company alleging that they had
 engaged in a pattern or practice of unlawful discrimination against certain
 employees over the age of forty.  The relief sought by the EEOC includes
 reinstatement or reassignment of the individuals allegedly affected, payment
 of back wages, an injunction prohibiting employment practices which
 discriminate on the basis of age and institution of policies to eradicate the
 effects of any past discriminatory practices.  The plaintiff class consists
 of 40 class members and is now tentatively closed.  Discovery is ongoing.  A
 scheduling order has been entered indicating that a trial will not be held
 before mid to late 1996, unless earlier dismissed.  The Company believes the
 allegations to be without merit and intends to vigorously defend this action.
 
    A class action lawsuit was filed against the Company and two of its
 employees on behalf of purported plaintiff classes including residents of Blue
 Island, Illinois and Eisenhower High School students arising out of 
 
 <PAGE>   11
 the Blue Island refinery spent catalyst release of October 7, 1994.  The
 complaint alleges claims based on common law nuisance, negligence, willful and
 wanton negligence and the Illinois Family Expenses Act.  Plaintiffs seek to
 recover damages in an unspecified amount for alleged medical expenses,
 diminished property values, pain and suffering and other damages.  Plaintiffs
 also seek punitive damages in an unspecified amount.  The Company believes the
 alleged claims to be without merit and intends to vigorously defend this
 action.
 
    The Company is subject to various other legal proceedings related to
 governmental regulations and other actions arising out of the normal course
 of business, including legal proceedings related to environmental matters.
 
    While it is not possible at this time to establish the ultimate amount of
 liability with respect to such contingent liabilities, the Company is of the
 opinion that the aggregate amount of any such liabilities, for which provision
 has not been made, will not have a material adverse effect on its financial
 position, however, an adverse outcome of any one or more of these matters
 could have a material effect on quarterly or annual operating results or cash
 flows when resolved in a future period.
 
 
 10.  Subsequent Events
 
    In early November 1995, Clark USA entered into a merger agreement with
 subsidiaries of Occidental Petroleum Corporation ("Occidental").  Pursuant to
 the merger agreement and a series of related agreements Clark USA will acquire
 the right to receive the equivalent of 17.661 million barrels of West Texas
 Intermediate crude oil to be delivered over the next six years according to
 a defined schedule.  In connection with the transaction, Clark USA will issue
 3,954,545 shares of common stock and 1,500,000 shares of non-voting class D
 common stock valued at approximately $120 million, or $22 per share, and pay
 $100 million in cash to Occidental. Clark USA's right to receive oil in
 accordance with the contract schedule is unconditional until $220 million
 (plus interest of 10% per year on any unrecovered portion of the first $100
 million) is received by Clark USA from the sale of such oil. Clark USA will
 contract to resell the oil delivered under the agreements to a subsidiary of
 Occidental immediately after delivery at then current market prices. 
 Occidental has guaranteed the obligations of its subsidiaries as described
 above.
 
    Clark USA also entered into a merger agreement and a series of related oil
 contract agreements with a newly formed subsidiary of Gulf Resources
 Corporation ("Gulf"), pursuant to which Clark USA will acquire the right to
 receive 3.164 million barrels of certain royalty oil to be received by Gulf
 pursuant to agreements among Gulf, an Occidental subsidiary and the Government
 of the Congo.  Provided certain underlying arrangements remain in effect,
 Clark USA will resell the Gulf oil to Gulf immediately after delivery at the
 then current selling price for Djeno crude oil, less an agreed transportation
 fee.  In connection with the Gulf transactions, Clark USA will issue 1,222,273
 shares of non-voting class D common stock valued at $26.9 million, or $22 per
 share.  The shares issued to Gulf will be pledged to Clark USA and will be
 released to Gulf as proceeds from the sales of the Gulf oil are received by
 Clark USA.  Clark USA will be entitled to foreclose on pledged shares under
 certain circumstances where the Gulf oil is not received as and when currently
 anticipated. Clark USA's recourse under such circumstances is limited to the
 value of such shares.
 
    In order to finance a portion of the above described transactions, Clark
 USA anticipates receiving proceeds from a $150 million private note offering. 
 In connection with this financing and the above transactions, Clark USA is
 seeking consents from the holders of its Zero Coupon Notes to waive or amend
 the terms of certain covenants under the indenture governing these securities
 and the Company is seeking approval from its bank group.  The offering is
 conditioned upon the closing of the Occidental transaction, the completion of
 the consent solicitation with respect to the Company's Zero Coupon Notes and
 the Company's bank group approval.
 
 <PAGE>   12
    In connection with the above-described transactions, Clark USA will pay
 upfront fees of $9.4 million and commission over the future delivery periods
 of up to approximately $7 million to an affiliate of Gulf which provided
 consulting and advisory services in the formulation of the terms and structure
 of these transactions and will continue to assist the Company in the delivery,
 acceptance and loading procedures of the oil.
 
 <PAGE>   13
 
 ITEM 2 Management's Discussion and Analysis of Financial Condition and Results
 of Operations
 
 General
 
      In 1995, Clark Refining & Marketing, Inc. (the "Company") changed its
 internal pricing methodology to better reflect external market prices for
 valuing product transferred between its retail and refining divisions.  This
 change was necessitated by new regulations and logistics associated with
 blended gasoline products.  Divisional results for 1994 have been restated to
 be consistent with this new methodology.  The restatement did not impact the
 Company s consolidated results of operations or financial position.  Results
 that were impacted include the refining and retail division contributions to
 operating income.  Related retail gasoline gross margins and refining margins
 per barrel were also adjusted.
 
 Results of Operations
 
 Financial Highlights
 
      The following tables reflect the Company s financial and operating
 highlights for the three and nine month periods ended September 30, 1995 and
 1994.  All dollars listed are in millions except per barrel, per gallon and
 other statistical data.
 
 Financial Results: (a)
<TABLE>               
<CAPTIVE>
                                                    For the three months        For the nine months
                                                     ended September 30,         ended September 30,
                                                   ----------------------       ---------------------
                                                      1995         1994          1995           1994   
                                                     ------       ------        ------         ------
<S>                                               <C>          <C>             <C>            <C>


 Net sales and operating revenues                  $ 1,211.8    $    689.3      $  3,376.9     $  1,842.2 
 Cost of sales                                       1,063.0         597.4         3,027.8        1,574.8     
 Operating expenses                                    107.8          58.6           288.7          174.4     
 General and administrative expenses                     7.6           7.7            23.3           23.1     
 Depreciation and amortization                          11.0           9.1            31.5           27.9     
 Interest and financing costs, net                       9.9           7.1            28.4           24.0     
 --------------------------------------------------------------------------------------------------------------
 Earnings (loss) before income taxes (b)                12.5           9.4           (22.8)          18.0     
 Income tax (provision) benefit (b)                     (4.7)         (3.2)            8.7           (6.3)    
 --------------------------------------------------------------------------------------------------------------
 Earnings (loss) before unusual items (b)                7.8           6.2           (14.1)          11.7     
 Unusual items, after taxes (b)                           --          (1.1)             --           15.3     
 --------------------------------------------------------------------------------------------------------------
 Net earnings (loss)                               $     7.8     $     5.1      $    (14.1)    $     27.0 
 ==============================================================================================================
               
 Operating Income: (a)              
 Refining contribution to operating income (c)     $    21.0     $    10.5      $     13.1     $     52.2
 Retail contribution to operating income (c)            16.0          18.7            35.5           28.1 
 Corporate general and administrative                    3.6           3.7            11.4           10.5     
 Depreciation and amortization                          11.0           9.1            31.5           27.9     
 Unusual items, net (b)                                   --            --              --           26.5
 --------------------------------------------------------------------------------------------------------------
 Operating income (loss)                           $    22.4     $    16.4     $       5.7     $     68.4
 ==============================================================================================================
</TABLE>
  (a) This table provides supplementary data and is not intended to represent
      an income statement presented in accordance with generally accepted
      accounting principles.
  (b) The Company considers certain items in 1994 which are discussed below
      to be "unusual".
  (c) In 1995, the Company changed its internal pricing methodology to better
      reflect external market prices for valuing product transferred between
      its retail and refining divisions.  Divisional results for 1994 have been
      restated to be consistent with this new methodology.
 
 <PAGE>   14
      The Company has recorded an increase in net earnings in each quarter of
 1995 following a net loss of $21.9 million in the first quarter.  Results for
 the third quarter of 1995 improved over the comparable period in 1994 and the
 second quarter of 1995 because of improved refining operations, seasonal
 retail marketing strength (as compared to the second quarter) and a strong
 contribution from the recently acquired Port Arthur refinery.  Results for the
 nine months ended September 30, 1995 were negatively impacted by an extremely
 poor industry refining margin environment in the first quarter of 1995 and
 therefore were significantly lower than the same period a year ago.  Also net
 earnings in the first nine months of 1994 benefited from an unusual item that
 resulted principally from an increase in crude oil and product prices that
 allowed for the recovery of an inventory write-down originally taken in 1993. 
 Net sales and operating revenues reached record levels in the first nine
 months of 1995 because of the inclusion of incremental sales from production
 at the Port Arthur refinery.
 
 Refining
      
 Refining Division Operating Statistics:
<TABLE> 
<CAPTIVE>
                                                    For the three months          For the nine months
                                                     ended September 30,          ended September 30,
                                                   ----------------------        ---------------------
                                                    1995            1994          1995           1994   
                                                   ------          ------        ------         ------
<S>                                                <C>             <C>           <C>            <C>
                                     
 Crude oil throughput (m bbls/day)                  210.2              --          202.1             --      
 Production (m bbls/day)                            222.5              --          210.6             --      
               
 Gross margin  ($/barrel of production)             $2.60              --          $2.63             --      
 Operating expenses  ($/barrel of production)       $1.86              --          $1.96             --      
               
 Net margin (millions)                              $15.2              --          $30.6             --      
               
 Blue Island, Hartford and other refining(a)              
 Crude oil throughput (m bbls/day)                  141.1           143.0          133.3          139.9     
 Production (m bbls/day)                            139.1           135.8          133.1          140.0     
           
 Gross margin  ($/barrel of production) (b)         $3.36           $3.41          $2.52          $3.86     
 Operating expenses  ($/barrel of production)       $2.70           $2.35          $2.78          $2.28     
               
 Net margin (millions) (b)                           $8.4           $13.3          $(9.3)         $60.4     
               
 Divisional G & A expenses (millions)                $2.6            $2.8           $8.2           $8.2     
 Contribution to earnings (millions) (b)            $21.0           $10.5          $13.1          $52.2     
</TABLE>
   
  (a) Other refining includes results from all crude oil acquisition and
      inventory management activities.
  (b) In 1995, the Company changed its internal pricing methodology to better
      reflect external market prices for valuing product transferred between
      its retail and refining divisions.  Divisional results for 1994 have been
      restated to be consistent with this new methodology.
 
      The refining division contributed earnings of $21.0 million in the third
 quarter of 1995 (1994 - $10.5 million) and $13.1 million in the first nine
 months of 1995 (1994 - $52.2 million) to operating income.  Industry margin
 conditions in the first quarter of 1995 were at their lowest point since 1987
 and this was the primary reason for the Company s operating loss in the first
 nine months of 1995.  The principal factors that contributed to the poor
 industry margins were the unseasonably warm winter, which reduced demand for
 heating oil especially compared to the strong demand in the prior year, and
 the transition to reformulated gasoline.  Several geographical areas
 unexpectedly opted not to switch to reformulated gasoline which caused
 confusion and concern in the marketplace, and caused gasoline prices to fall
 relative to the price of crude oil.
 
 <PAGE>   15
      Second and third quarter 1995 results improved over the first quarter
 of 1995 with better industry gasoline margins and a strong contribution from
 the newly acquired Port Arthur refinery.  Industry gasoline margins improved
 following a weak first quarter, but the Company's results continued to be
 affected by weak distillate margins and substantially higher costs for heavy
 crude oil as compared to the prior year.  The price of heavy crude oil has
 risen substantially relative to more expensive light sweet crude oil such as
 West Texas Intermediate, eroding some of the cost advantages of more highly
 complex refiners such as Clark, which has the capability to process
 approximately 25% of its crude slate in heavy crude oil.  Results in 1995 were
 also adversely affected by downtime at two of the Blue Island refinery s
 gasoline producing units.  On a comparative basis, the first nine months of
 1994 included a significant contribution from crude oil and product
 acquisition activities because of a substantial rise in crude oil and product
 prices in that period, which was not repeated in the first nine months of
 1995.  Industry refining margins in October 1995 were weak and will be
 reflected in the Company's fourth quarter results of operations.
 
      The Company's crude oil throughput and refinery production increased over
 the prior year due almost entirely to the acquisition of the Port Arthur
 refinery.  The poor industry margins in the first quarter of 1995 caused the
 Company to reduce refinery production by an average of approximately 10,000
 barrels per day in that quarter.  Additionally, a fire in the isomax unit and
 unscheduled downtime in the alkylation unit at the Blue Island refinery
 reduced yields and production by approximately 5,500 barrels per day for the
 first nine months of 1995.  The Blue Island refinery returned to full
 production in mid-August 1995.
 
      Refining division operating expenses for the third quarter and first
 nine months of 1995 increased over the comparable periods in 1994 due
 principally to the addition of the Port Arthur refinery and related terminal
 expenses in the current period and expenses associated with the Blue Island
 operating difficulties.  Reduced throughput at Clark's Illinois refineries due
 to poor first quarter market conditions and the previously mentioned operating
 difficulties also contributed to a higher per barrel operating cost.
 
 
 Retail
 
 Retail Division Operating Statistics:
<TABLE>
<CAPTIVE>
                                                    For the three months          For the nine months
                                                     ended September 30,          ended September 30,
                                                   ----------------------        ---------------------
                                                    1995            1994          1995           1994   
                                                   ------          ------        ------         ------
<S>                                               <C>             <C>           <C>            <C>

 Gasoline volume (mm gals.)                         278.4           261.8         807.2          771.7     
 Gasoline gross margin (c/gal) (a)                   12.9c           12.8c         11.1c           9.9c
 Gasoline gross margin (millions) (a)               $35.8           $33.5         $89.9          $76.3  
               
 Convenience product sales (millions)               $72.5           $61.4        $190.0         $174.8  
 Convenience product gross margin(millions)         $16.8           $15.7         $47.7          $43.4
                                                                               
                                                                               
 Operating expenses (millions)                      $35.2           $29.2         $98.4          $87.1     
 Divisional G & A expenses (millions)                $1.4            $1.3          $3.7           $4.5     
 Contribution to operating income (millions) (a)    $16.0           $18.7         $35.5          $28.1     
               
 Per Month Per Store              
 Company operated stores (average)                    863             822           852            835     
 Gasoline volume (m gals.)                          107.5           106.1         105.3          102.7     
 Convenience product sales (m)                      $28.0           $24.9         $24.7          $23.3     
 Convenience product gross margin (m)                $6.5            $6.4          $6.2           $5.8     
</TABLE>
  
 <PAGE>   16
  (a) In 1995, the Company changed its internal pricing methodology to better
      reflect external market prices for valuing product transferred between
      its retail and refining divisions.  Divisional results for 1994 have been
      restated to be consistent with this new methodology.
 
      Clark continued to expand its retail network in core markets during the
 first nine months of 1995, resulting in a net increase in store count over the
 third quarter of 1994.  The Company acquired 35 retail stores in April 1995
 in Peoria, Illinois, one of its core markets, and is continuing to seek
 expansion opportunities in other core markets.  Consistent with the Company's
 strategy to exit non-core markets, the Company expects to divest 41 stores in
 the Kansas, western Missouri and Minnesota markets in late 1995 or early 1996.
 
      The retail division contributed earnings of $16.0 million  to operating
 income in the third quarter of 1995 (1994 - $18.7 million) and $35.5 million
 in the first nine months of 1995 (1994 - $28.1 million). Retail contribution
 for the third quarter of 1995 was slightly lower than year ago levels
 principally because of competitive pressures in certain markets and weak
 results from non-reimaged markets.  For the first nine months of 1995,
 significant improvements in gasoline and convenience product gross margins
 more than offset higher store operating expenses.
 
      Gasoline gross margins improved in the first nine months of 1995
 compared to the first nine months of 1994 despite volatile unit margins,
 especially in the first half of 1995, caused by consumer resistance to paying
 for the higher cost of newly introduced reformulated gasoline and general
 increases in gasoline cost.  In response to these market conditions and
 supported by the positive impact from the Company's reimaging program, Clark
 implemented a pricing strategy to narrow the historical street gasoline
 pricing difference relative to its higher priced competitors, thus improving
 per gallon margin and overall gasoline gross margins.
 
      Convenience product gross margins increased in the third quarter and
 first nine months of 1995 over the same periods in 1994 due to an improvement
 in the mix of higher margin On The Go  products (42% of sales in the first
 nine months of 1995 versus 39% in the comparable period of 1994) and the
 favorable margin impact from the newly acquired stores, which more than offset
 lower cigarette margins.  In addition to incremental lease and operating
 expenses associated with the new stores added since the third quarter of 1994,
 expenses increased due to higher store labor costs and higher credit card
 processing expenses (due to a 44% increase in credit card sales), partially
 offset by lower administrative costs.
 
 
 Other Financial Highlights
 
      Corporate general and administrative expenses for the third quarter of
 1995 were flat as compared to the same period in 1994, but expenses for the
 first nine months of 1995 exceeded the same period a year ago due principally
 to adjustments of bad debt and other reserves in the prior year.
 
      Depreciation and amortization expenses for the third quarter and first
 nine months of 1995 exceeded the comparable periods a year ago principally
 because of the newly acquired Port Arthur refinery.
 
      Net interest and financing costs increased due principally to the higher
 financing cost amortization associated with Clark's larger working capital
 facility which was increased to support the crude oil supply needs of the Port
 Arthur refinery.
 
 
 Liquidity and Capital Resources
 
      On November 6, 1995, Clark USA, Inc. ("Clark USA") the Company"s parent
 announced two separate merger agreements (the "Transactions"), one with a
 subsidiary of Occidental Petroleum 
 
 <PAGE>   17
 Corporation and the other with Gulf Resources Corporation and one of its
 subsidiaries, which will result in Occidental and Gulf owning approximately
 19% and 4%, respectively of the shares of Clark USA.  Consequently, The
 Horsham Corporation's interest in Clark USA will drop to approximately 46% and
 Tiger Management Corporation s interest will drop to approximately 31%.  The
 agreements will result in Clark USA acquiring the right to receive
 approximately 21 million barrels of crude oil over the next six years in
 exchange for $100 million of cash and the issuance of 6,676,818 new common
 shares with a value of $146.9 million. Clark USA intends to finance the cash
 portion of the proposed transactions with the proceeds of a long-term $150
 million private financing.  The mergers and the financing will require the
 consent of Clark USA's existing zero coupon bondholders and certain other
 customary approvals.  Closing is expected by the end of 1995.
 
      Net cash from operating activities for the first nine months of 1995,
 excluding working capital changes, was a $12.7 million compared to a $48.6
 million in the year-earlier period.  The deterioration of cash flows was due
 principally to the Company's net loss in the first quarter of 1995.  Working
 capital at September 30, 1995 was $199.1 million, a 1.53 to 1 current ratio,
 versus $130.4 million at December 31, 1994, a 1.52 to 1 current ratio. 
 Working capital increased due to the acquisition and  partial financing with
 equity of the Port Arthur refinery working capital requirements.
 
      In general, the Company's short-term working capital requirements
 fluctuate with the price and payment terms of crude oil. Clark has in place
 a $400 million committed revolving line of credit expiring November 30, 1997
 for the issuance of letters of credit primarily to support purchases of crude
 oil, other feedstocks and refined products.  The amount available under the
 facility at September 30, 1995 was $400 million. At September 30, 1995,
 approximately $235 million of the facility was utilized for letters of credit. 
 There were no direct borrowings under Clark's line of credit at September 30,
 1995.
 
      In November 1994, Clark refinanced its previous working capital facility
 (the "Clark Credit Agreement") with a group of banks.  The working capital
 facility provides the Company with sufficient liquidity to support the
 expanded letter of credit needs related to the acquisition of the Port Arthur
 Refinery.  The Clark Credit Agreement contains covenants and conditions which,
 among other things, limit dividends, indebtedness, liens, investments,
 contingent obligations and capital expenditures, and require Clark to maintain
 its property and insurance, to pay all taxes and comply with all laws, and to
 provide periodic information and conduct periodic audits on behalf of the
 lenders.  Clark is also required to comply with certain financial covenants. 
 However, Clark is currently renegotiating the covenant package in the Clark
 Credit Agreement and seeking consent for the Transactions, the related $150
 million note offering and consent solicitation.  The proposed new financial
 covenants as approved by the lead banks include: (i) a reduction in the
 minimum required ratio of adjusted cash flow to debt service; (ii) a reduction
 in the minimum required tangible net worth; (iii) a reduction in minimum
 working capital requirements; (iv) a reduction in the minimum required level
 of Horsham ownership; (v) an increase in the length of certain cure periods;
 (vi) a revision in the provisions for payment of dividends from Clark to Clark
 USA; (vii) an increase in the maximum ratio of debt to tangible net worth, and
 (viii) a reduction in the portion of the credit facility available for cash
 borrowings.
 
      Cash flows used in investing activities in the first nine months of
 1995, excluding short-term investment activities for which management's intent
 is similar to cash and cash equivalents, increased to $80.8 million in 1995
 from $57.5 million in the year-earlier period.  The increase was due to the
 Port Arthur refinery acquisition which closed on February 27, 1995.  Capital
 expenditures for property, plant and equipment totaled $24.2 million (1994 -
 $56.8 million) during the first nine months of 1995.  Refinery capital
 expenditures totaled $4.8 million of this amount in the first nine months of
 1995 (1994 - $36.7 million) mostly directed towards miscellaneous regulatory
 projects.  Retail capital expenditures for the first nine months of 1995
 totaled $18.5 million (1994 - $18.5 million) and consisted of approximately
 one-half for regulatory compliance, principally related to Stage II vapor
 recovery that was required to be completed in the first half of the 1995, and
 approximately one-half for discretionary projects primarily related to the 
 
 <PAGE>   18
 Company's reimaging program as well as the purchase of the existing equipment
 for stores acquired in the second quarter.  Approximately $15.0 million was
 generated in 1995 from the sale and leaseback of certain Hartford refinery
 assets acquired in last year s maintenance turnaround.
 
      Cash flows from financing activities in the first nine months of 1995
 reflected the partial financing of the Port Arthur refinery acquisition with
 an equity contribution from Clark USA, and fees related to the larger working
 capital facility associated with the expanded working capital needs of the
 Company following the Port Arthur acquisition.
 
      Funds generated from operating activities together with the Company's
 existing cash, cash equivalents and short-term investments, are expected to
 be adequate to fund requirements for working capital and capital expenditure
 programs, including those relating to the Port Arthur refinery for the next
 year.  In response to the industry refining conditions during the latter part
 of 1994 and first quarter of 1995, the Company initiated a number of programs
 aimed at conserving liquidity.  These programs include inventory reductions
 (including inventory reductions at the Port Arthur refinery), reduced or
 delayed capital expenditures (other than mandatory and environmental capital
 expenditures and other routine maintenance activities) and certain additional
 strategies.  While the Company believes that these programs will be sufficient
 to provide the Company with adequate liquidity for the next year, there can
 be no assurance that the depressed industry conditions will not return and
 continue longer than anticipated.  Future working capital, discretionary
 capital expenditures, environmentally-mandated spending and acquisitions may
 require additional debt or equity financing.
 
 <PAGE>   19
 PART II - OTHER INFORMATION
 
 ITEM 1 - Legal Proceedings
 
      On March 13, 1995, a fire occurred in the isomax unit at the Blue Island
 refinery.  Two employees were fatally injured in the fire; three other
 employees were injured.  The isomax unit and two other units were out of
 service at the time of the incident.  Clark has now resumed operation of all
 units which had been out of service in connection with the incident.  The
 Occupational Safety and Health Administration ("OSHA") conducted an
 investigation of the incident and on September 13, 1995 Clark and OSHA entered
 into a settlement agreement pursuant to which Clark agreed to pay a $1.257
 million penalty, make certain safety improvements and perform a safety audit. 
 Property damage and related costs are expected to be covered by Clark's
 property, business interruption and workers' compensation insurance coverages
 in excess of aggregate deductibles of $1.4 million.
 
      On May 16, 1995, there was a minor (less than 15 pounds) release of
 hydrogen fluoride ("HF") from a catalyst regeneration portion of the HF
 alkylation unit at the Blue Island refinery.  At the request of the Illinois
 Attorney General, and with the Company's consent, the Circuit Court of Cook
 County, Illinois entered an order prohibiting the restart of the regeneration
 portion of the HF alkylation unit pending the outcome of an investigation of
 the cause of the release.  On August 8, 1995, an order was entered by the
 Court allowing Clark to resume operation of the HF regeneration unit.  The
 order also requires Clark, pursuant to an agreement between Clark and the
 Illinois Attorney General, to implement certain HF release mitigation and
 detection measures.  Clark has not yet ascertained the actual cost of these
 measures, although Clark has initially estimated that these measures may cost
 at least $1.8 million, and is still evaluating the feasibility of additional
 measures that the order requires Clark to consider.
 
      Case No. 95 CH 2311, People ex rel. Ryan vs. Clark Refining & Marketing,
 Inc., is currently pending in the Circuit Court of Cook County, Illinois. 
 This lawsuit, originally filed by the Illinois Attorney General following the
 isomax incident at the Blue Island refinery on March 13, 1995, was amended
 just after the HF release of May 16, 1995 to include all releases into the air
 or water that had occurred in the past three years at the Blue Island plant
 including the October 7, 1994 and March 13, and March 16, 1995 incidents. 
 Clark has filed an answer denying most of the material allegations.  No
 estimate can be made at this time of either the likelihood or the magnitude
 of any potential liability that may result from this litigation.
 
      On June 7, 1995, Clark was served with a complaint in People of the
 State of Illinois v. Clark Refining & Marketing, Inc., PCB No. 95-163, which
 is presently pending before the Illinois Pollution Control Board.  The
 complaint alleges violations relating to "release incidents" at Clark's
 Hartford, Illinois refinery some of which were the subject of the "Pre-
 Enforcement Conference Letters" sent to Clark by the IEPA in October, 1994. 
 The complaint also alleges violations relating to the operation of certain
 process units at the Hartford refinery and a number of permit, recordkeeping
 and reporting violations.  Clark has filed an answer with the Illinois
 Pollution Control Board denying most of the material allegations and has also
 filed a motion to dismiss ten entire counts and portions of two other counts
 of the complaint on jurisdictional grounds.  No estimate of any liability with
 respect to this complaint can be made at this time.
 
      Clark received an administrative complaint from the EPA on January 5,
 1993 alleging recordkeeping and related violations of the Clean Air Act
 concerning the Hartford refinery and seeking civil penalties of $100,000.  On
 July 11, 1994, the EPA filed an amended complaint alleging additional
 violations and increasing the amount of the total penalty sought to $200,000. 
 The case was tried before an administrative law judge on August 23-24, 1994. 
 On March 21, 1995, Clark received the initial decision of the Administrative
 Law Judge, finding liability against Clark and assessing a civil penalty of
 $140,000.  Clark paid this penalty in May 1995.
 
      On April 13, 1995 Clark was served with two Grand Jury Records Subpoenas
 issued by the Office of the United States Attorney, Environmental Crimes
 Section, in St. Louis.  The Subpoenas seek documentary information primarily
 about the gasoline spill at the St. Louis Terminal which occurred in January,
 1994.  
 
 <PAGE>   20
 Clark is cooperating fully with the U.S. Attorney Office's investigation and
 on June 26, 1995 produced responsive documents to the Subpoenas. It is not
 possible to estimate at this time any potential exposure to Clark from this
 inquiry.
 
      On May 4, 1994, the United States Equal Employment Opportunity
 Commission (''EEOC'') filed a class action lawsuit, Case No. 94 C 2779, EEOC
 v. Clark Refining & Marketing, Inc., in the United States District Court for
 the Northern District of Illinois alleging that Clark had engaged in a pattern
 of practice of unlawful discrimination against certain employees over the age
 of forty.  The relief sought by the EEOC includes reinstatement or
 reassignment of the individuals allegedly affected, payment of back wages, an
 injunction prohibiting employment practices which discriminate on the basis
 of age and institution of policies to eradicate the effects of any past
 discriminatory practices.  Clark believes the allegations to be without merit
 and intends to vigorously defend this action.  The plaintiff class consists
 of 40 class members and is now tentatively closed.  It is premature to predict
 whether this case will go to trial, and, if so, what the level of exposure,
 if any, to Clark would be at trial.
 
      On May 23, 1995 the Company was served with a petition entitled
 Anderson, et al vs. Chevron and Clark, filed in Jefferson County, Texas by
 twenty-four individual plaintiffs who were Chevron employees who did not
 receive offers of employment from Clark at the time of the purchase of the
 Port Arthur Refinery.  Chevron is named as a co-defendant as well as the
 outplacement service retained by Chevron.  An amended petition has been filed
 increasing the number of plaintiffs to forty.  Clark has filed an answer
 denying all of the allegations.  Subsequent to the filing of the petition, the
 plaintiffs have each filed individual charges with the United States Equal
 Employment Opportunity Commission and the Texas Commission of Human Rights. 
 The Company believes the allegations in both the petition and the individual
 charges to be without merit and intends to vigorously defend these matters. 
 No estimate can be made at this time of either the likelihood or the magnitude
 of any potential liability that may result from this litigation or the
 individual charges filed.
 
      On August 25, 1995, the IEPA sent a pre-enforcement conference letter
 to Clark in which it alleged that certain wastewater flows at the Hartford
 refinery constituted a listed hazardous waste within the meaning of the
 Resource Conservation and Recovery Act ("RCRA").  Clark disputes the
 characterization of the wastewater as hazardous waste.  On September 22, 1995
 the IEPA sent a pre-enforcement conference letter to Clark in which it alleged
 that certain releases had occurred at Clark s Hartford refinery.  No estimate
 of any liability with respect to these matters can be made at this time.
 
      On October 11, 1995 a class action lawsuit entitled Rosolowski et al v.
 Clark Refining & Marketing, Inc., et al, was filed in the Circuit Court of
 Cook County, Illinois against Clark and two Clark employees on behalf of
 purported plaintiff classes including residents of Blue Island, Illinois and
 Eisenhower High School students arising out of the Blue Island refinery spent
 catalyst release of October 7, 1994.  The complaint alleges claims based on
 common law nuisance, negligence, willful and wanton negligence and the
 Illinois Family Expense Act.  Plaintiffs seek to recover damages in an
 unspecified amount for alleged medical expenses, diminished property values,
 pain and suffering and other damages.  Plaintiffs also seek punitive damages
 in an unspecified amount.  At this time no estimate can be made as to Clark s
 potential loss contingency, if any, with respect to this lawsuit.
 
      Clark has been named as a defendant in forty civil lawsuits filed by
 residents of Hartford, Illinois pending in the Circuit Court for the Third
 Judicial Circuit, Madison County, Illinois, seeking unspecified damages for
 the presence of gasoline in the soil and groundwater beneath the plaintiffs'
 properties.  Shell Oil has been named as a co-defendant in six of the above-
 referenced lawsuits.  The plaintiffs in thirty-four of the lawsuits, which are
 pending solely against Clark, have voluntarily dismiss their lawsuits without
 prejudice.  The plaintiffs have one year within which to refile their claims.
 
      While it is not possible at this time to establish the ultimate amount
 of liability with respect to the environmental and legal matters described
 above, the Company if of the opinion that the aggregate amount of any such
 liability will not have a material adverse effect on its financial position,
 cash flows or results of 
 
 <PAGE>   21
 operations, however, an adverse outcome of these matters could have a material
 effect on quarterly or annual operating results or cash flows when resolved
 in a future period.
 
 
 ITEM 5 - Other Information
 
 
      Effective August 1, 1995, Maura J. Clark, 36, was elected as Executive
 Vice President Corporate Development and Chief Financial Officer of the
 Company and Clark.  Ms. Clark is an employee of The Horsham Corporation
 serving under a consulting contract with Clark.  Ms. Clark previously served
 as Vice President-Finance at North American Life Assurance Company, a
 financial services company, from September 1993 through July 1995.  From May
 1990 to September 1993, Ms. Clark served as Vice President Corporate Finance
 and Corporate Development of North American Trust Company (formerly First City
 Trust Company), a subsidiary of North American Life Assurance Company.
 
 
 ITEM 6 - Exhibits and Reports on Form 8-K
 
      (a) Exhibits
 
          None
 
      (b) Reports on Form 8-K
 
          November 10, 1995 - Announcement of certain agreements with
          Occidental Petroleum  Corporation and Gulf Resources 
          Corporation and announcement of solicitation of bondholder consents

 <PAGE>   22
 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.
 
 
                                       CLARK REFINING & MARKETING, INC.
                                              (Registrant)
 
 
                                    /s/  Dennis R. Eichholz 
                                    -----------------------
                                    Dennis R. Eichholz
                                    Controller and Treasurer (Authorized
                                      Officer and Chief Accounting Officer)
 
 
 November 13, 1995