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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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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 FEBRUARY 29,
2004



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



For the transition period fromto



Commission File No. 333-35083



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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)                          



814-726-4674

Registrants telephone number, including area code



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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 is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



Number of shares outstanding of Registrants Common Stock as of April 14, 2004: 100.



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TABLE OF ADDITIONAL REGISTRANTS



|                                                   |  |                                            |  |                                  |  |                      
|-------------------------------------------------- |  | ------------------------------------------ |  | -------------------------------- |  | ---------------------
|Name                                               |  | State of OtherJurisdiction ofIncorporation |  | IRS EmployerIdentificationNumber |  | CommissionFile 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         



2



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|         |  |                                                                                                                           |  |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | 
|-------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | ------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
|         |  |                                                                                                                           |  | PAGE(S)      
|PART I.  |  | FINANCIAL INFORMATION                                                                                                     |  |              
|         |  |                                                                                                                          
|Item 1.  |  | Financial Statements                                                                                                      |  |              
|         |  |                                                                                                                          
|         |  | Consolidated Balance Sheets  February 29, 2004 (unaudited) and August 31, 2003                                           |  | 5            
|         |  |                                                                                                                          
|         |  | Consolidated Statements of Operations  Six Months and Quarters Ended February 29, 2004 and February 28, 2003 (unaudited) |  | 6            
|         |  |                                                                                                                          
|         |  | Consolidated Statements of Cash Flows  Six Months Ended February 29, 2004 and February 28, 2003 (unaudited)              |  | 7            
|         |  |                                                                                                                          
|         |  | Notes to Consolidated Financial Statements (unaudited)                                                                    |  | 8-13         
|         |  |                                                                                                                          
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                     |  | 14-21        
|         |  |                                                                                                                          
|Item 3.  |  | Quantitative and Qualitative Disclosures about Market Risk                                                                |  | 22           
|         |  |                                                                                                                          
|Item 4.  |  | Controls and Procedures                                                                                                   |  | 22           
|         |  |                                                                                                                          
|PART II. |  | OTHER INFORMATION                                                                                                         |  | 23           
|         |  |                                                                                                                          
|Item 1.  |  | Legal Proceedings(None)                                                                                                   |  | 23           
|         |  |                                                                                                                          
|Item 2.  |  | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities(None)                                    |  | 23           
|         |  |                                                                                                                          
|Item 3.  |  | Defaults Upon Senior Securities(None)                                                                                     |  | 23           
|         |  |                                                                                                                          
|Item 4.  |  | Submission of Matters to a Vote of Security Holders(N/A)                                                                  |  | 23           
|         |  |                                                                                                                          
|Item 5.  |  | Other Information(None)                                                                                                   |  | 23           
|         |  |                                                                                                                          
|Item 6.  |  | Exhibits and Reports on Form 8-K                                                                                          |  | 23           
|         |  |                                                                                                                           | 
|         |  |                                                                                                                           |  | Signatures    |  | 24-35                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|         |  |                                                                                                                           | 
|         |  | (a)                                                                                                                       |  | Exhibit Index |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |  |                                                                                                                           |  |              
|         |  |                                                                                                                           |  | Exhibit 10.9  |  | Amendment No. Four to Credit Agreement dated as of January 27, 2004 by and among UNITED REFINING COMPANY, a Pennsylvania corporation
(United Refining), UNITED REFINING COMPANY OF PENNSYLVANIA, a Pennsylvania corporation (United Refining of PA), KIANTONE PIPELINE CORPORATION, a New York corporation (Kiantone), COUNTRY FAIR, INC., a Pennsylvania
corporation (Country Fair) (United Refining, United Refining of PA, Kiantone and Country Fair are each referred to herein as a Borrower and collectively as the Borrowers), KWIK-FILL CORPORATION, a
Pennsylvania corporation (Guarantor), the Banks that are parties hereto and PNC Bank, National Association, as Agent (Agent). |  | 
|         |  |                                                                                                                           |  |              
|         |  |                                                                                                                           |  | Exhibit 31.1  |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | 



3



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| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                             |  | 
| |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                       
| |  |     |  | 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 |  | 
| |  |     | 
| |  | (b) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                            
| |  |     | 
| |  |     |  | On January 30, 2004, a Current Report on Form 8-K was filed reporting under Item 5, Other Events, and Required FD Disclosure,
that the Company issued a press release announcing an amendment to its secured credit facility increasing the facility commitment from $50,000,000 to $75,000,000 effective January 27, 2004. The press release was filed as an Exhibit under Item 7(c)
of the Form 8-K. |  |                                                                                                                                            



4



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UNITED REFINING COMPANY AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)



|                                                                                           |  |                             |         |   |                 |   |         |  
|------------------------------------------------------------------------------------------ |  | --------------------------- | ------- | - | --------------- | - | ------- | -
|                                                                                           |  | February 29,2004(Unaudited) |         |   | August 31, 2003 |  
|Assets                                                                                     |  |                             |         |   |                 |   |         |  
|Current:                                                                                   |  |                             |         |   |                 |   |         |  
|Cash and cash equivalents                                                                  |  | $                           | 14,392  |   |                 | $ | 13,819  |  
|Accounts receivable, net                                                                   |  |                             | 40,222  |   |                 |   | 42,732  |  
|Inventories                                                                                |  |                             | 99,775  |   |                 |   | 76,123  |  
|Prepaid expenses and other assets                                                          |  |                             | 16,227  |   |                 |   | 10,336  |  
|Amounts due from affiliated companies, net                                                 |  |                             |        |   |                 |   | 639     |  
|                                                                                           |  |                             |         |   |                 |   |         |  
|Total current assets                                                                       |  |                             | 170,616 |   |                 |   | 143,649 |  
|Property, plant and equipment, net                                                         |  |                             | 184,393 |   |                 |   | 186,879 |  
|Investment in affiliated company                                                           |  |                             | 1,085   |   |                 |   | 574     |  
|Deferred financing costs, net                                                              |  |                             | 3,029   |   |                 |   | 2,963   |  
|Goodwill                                                                                   |  |                             | 1,349   |   |                 |   | 1,349   |  
|Tradename                                                                                  |  |                             | 10,500  |   |                 |   | 10,500  |  
|Amortizable intangible assets, net                                                         |  |                             | 3,415   |   |                 |   | 3,588   |  
|Deferred turnaround costs and other assets, net                                            |  |                             | 7,886   |   |                 |   | 8,217   |  
|Deferred income taxes                                                                      |  |                             | 611     |   |                 |   | 3,709   |  
|                                                                                           |  |                             |         |   |                 |   |         |  
|                                                                                           |  | $                           | 382,884 |   |                 | $ | 361,428 |  
|                                                                                           |  |                             |         |   |                 |   |         |  
|Liabilities and Stockholders Equity                                                       |  |                             |         |   |                 |   |         |  
|Current:                                                                                   |  |                             |         |   |                 |   |         |  
|Revolving credit facility                                                                  |  | $                           | 50,000  |   |                 | $ | 31,500  |  
|Current installments of long-term debt                                                     |  |                             | 630     |   |                 |   | 683     |  
|Accounts payable                                                                           |  |                             | 33,193  |   |                 |   | 35,111  |  
|Accrued liabilities                                                                        |  |                             | 16,795  |   |                 |   | 15,707  |  
|Sales, use and fuel taxes payable                                                          |  |                             | 16,171  |   |                 |   | 17,853  |  
|Deferred income taxes                                                                      |  |                             | 5,157   |   |                 |   | 5,157   |  
|Amounts due to affiliated companies, net                                                   |  |                             | 1,381   |   |                 |   |        |  
|                                                                                           |  |                             |         |   |                 |   |         |  
|Total current liabilities                                                                  |  |                             | 123,327 |   |                 |   | 106,011 |  
|Long term debt: less current installments                                                  |  |                             | 182,005 |   |                 |   | 182,227 |  
|Deferred gain on settlement of pension plan obligations                                    |  |                             | 1,022   |   |                 |   | 1,130   |  
|Deferred retirement benefits                                                               |  |                             | 27,584  |   |                 |   | 28,398  |  
|Other noncurrent liabilities                                                               |  |                             | 1,987   |   |                 |   | 1,687   |  
|                                                                                           |  |                             |         |   |                 |   |         |  
|Total liabilities                                                                          |  |                             | 335,925 |   |                 |   | 319,453 |  
|                                                                                           |  |                             |         |   |                 |   |         |  
|Commitments and contingencies                                                              |  |                             |         |   |                 |   |         |  
|Stockholders equity:                                                                      |  |                             |         |   |                 |   |         |  
|Common stock; $.10 par value per share  shares authorized 100; issued and outstanding 100 |  |                             |        |   |                 |   |        |  
|Additional paid-in capital                                                                 |  |                             | 16,648  |   |                 |   | 16,648  |  
|Retained earnings                                                                          |  |                             | 31,351  |   |                 |   | 26,367  |  
|Accumulated other comprehensive loss                                                       |  |                             | (1,040  | ) |                 |   | (1,040  | )
|                                                                                           |  |                             |         |   |                 |   |         |  
|Total stockholders equity                                                                 |  |                             | 46,959  |   |                 |   | 41,975  |  
|                                                                                           |  |                             |         |   |                 |   |         |  
|                                                                                           |  | $                           | 382,884 |   |                 | $ | 361,428 |  
|                                                                                           |  |                             |         |   |                 |   |         |  



5



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UNITED REFINING COMPANY AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

(in thousands)



|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|------------------------------------------------- |  | ------------------ | ------- | - | ----------------- | - | ------- | ----------------- |  | - | ----------------- | - |  | - | ------- | -
|                                                  |  | Three Months Ended |         |   | Six Months Ended  |  
|                                                  |  | February 29, 2004  |         |   | February 28, 2003 |   |         | February 29, 2004 |  |   | February 28, 2003 |  
|Net sales                                         |  | $                  | 326,965 |   |                   | $ | 311,429 |                   |  | $ | 657,780           |   |  | $ | 604,734 |  
|Costs of goods sold                               |  |                    | 290,088 |   |                   |   | 269,887 |                   |  |   | 577,092           |   |  |   | 535,206 |  
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Gross profit                                      |  |                    | 36,877  |   |                   |   | 41,542  |                   |  |   | 80,688            |   |  |   | 69,528  |  
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Expenses:                                         |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Selling, general and administrative expenses      |  |                    | 27,431  |   |                   |   | 27,016  |                   |  |   | 54,934            |   |  |   | 53,344  |  
|Depreciation and amortization expenses            |  |                    | 3,203   |   |                   |   | 3,303   |                   |  |   | 6,407             |   |  |   | 6,606   |  
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Total operating expenses                          |  |                    | 30,634  |   |                   |   | 30,319  |                   |  |   | 61,341            |   |  |   | 59,950  |  
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Operating income                                  |  |                    | 6,243   |   |                   |   | 11,223  |                   |  |   | 19,347            |   |  |   | 9,578   |  
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Other income (expense):                           |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Interest expense, net                             |  |                    | (5,299  | ) |                   |   | (5,262  | )                 |  |   | (10,469           | ) |  |   | (10,463 | )
|Other, net                                        |  |                    | (510    | ) |                   |   | (220    | )                 |  |   | (1,042            | ) |  |   | (288    | )
|Equity in net earnings of affiliate               |  |                    | 445     |   |                   |   | 217     |                   |  |   | 511               |   |  |   | 268     |  
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|                                                  |  |                    | (5,364  | ) |                   |   | (5,265  | )                 |  |   | (11,000           | ) |  |   | (10,483 | )
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Income (loss) before income tax expense (benefit) |  |                    | 879     |   |                   |   | 5,958   |                   |  |   | 8,347             |   |  |   | (905    | )
|Income tax expense (benefit)                      |  |                    | 352     |   |                   |   | 2,296   |                   |  |   | 3,363             |   |  |   | (349    | )
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Net income (loss)                                 |  | $                  | 527     |   |                   | $ | 3,662   |                   |  | $ | 4,984             |   |  | $ | (556    | )
|                                                  |  |                    |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  



6



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UNITED REFINING COMPANY AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

(in thousands)



|                                                                                                   |  |                   |         |   |                   |   |         |  
|-------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                   |  | Six Months Ended  |        
|                                                                                                   |  | February 29, 2004 |         |   | February 28, 2003 |  
|Cash flows from operating activities:                                                              |  |                   |         |   |                   |   |         |  
|Net income (loss)                                                                                  |  | $                 | 4,984   |   |                   | $ | (556    | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                   |         |   |                   |   |         |  
|Depreciation and amortization                                                                      |  |                   | 8,293   |   |                   |   | 8,429   |  
|Equity in net earnings of affiliate                                                                |  |                   | (511    | ) |                   |   | (268    | )
|Deferred income taxes                                                                              |  |                   | 3,098   |   |                   |   | (865    | )
|Loss on asset dispositions                                                                         |  |                   | 94      |   |                   |   | 39      |  
|Cash used in working capital items                                                                 |  |                   | (27,525 | ) |                   |   | (23,244 | )
|Change in operating assets and liabilities:                                                        |  |                   |         |   |                   |   |         |  
|Deferred retirement benefits                                                                       |  |                   | (814    | ) |                   |   | 732     |  
|Other noncurrent liabilities                                                                       |  |                   | 179     |   |                   |   | (450    | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Total adjustments                                                                                  |  |                   | (17,186 | ) |                   |   | (15,627 | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Net cash used in operating activities                                                              |  |                   | (12,202 | ) |                   |   | (16,183 | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Cash flows from investing activities:                                                              |  |                   |         |   |                   |   |         |  
|Additions to property, plant and equipment                                                         |  |                   | (3,604  | ) |                   |   | (3,659  | )
|Additions to turnaround costs                                                                      |  |                   | (1,231  | ) |                   |   | (5,277  | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Net cash used in investing activities                                                              |  |                   | (4,835  | ) |                   |   | (8,936  | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Cash flows from financing activities:                                                              |  |                   |         |   |                   |   |         |  
|Net borrowings on revolving credit facility                                                        |  |                   | 18,500  |   |                   |   | 21,686  |  
|Deferred financing costs                                                                           |  |                   | (498    | ) |                   |   |        |  
|Principal reductions of long-term debt                                                             |  |                   | (392    | ) |                   |   | (113    | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Net cash provided by financing activities                                                          |  |                   | 17,610  |   |                   |   | 21,573  |  
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Net increase (decrease) in cash and cash equivalents                                               |  |                   | 573     |   |                   |   | (3,546  | )
|Cash and cash equivalents, beginning of year                                                       |  |                   | 13,819  |   |                   |   | 13,515  |  
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Cash and cash equivalents, end of period                                                           |  | $                 | 14,392  |   |                   | $ | 9,969   |  
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Cash used in working capital items:                                                                |  |                   |         |   |                   |   |         |  
|Accounts receivable, net                                                                           |  | $                 | 2,510   |   |                   | $ | (1,984  | )
|Refundable income taxes                                                                            |  |                   |        |   |                   |   | 3,300   |  
|Inventories                                                                                        |  |                   | (23,652 | ) |                   |   | (9,657  | )
|Prepaid expenses and other assets                                                                  |  |                   | (5,891  | ) |                   |   | (1,283  | )
|Accounts payable                                                                                   |  |                   | (1,918  | ) |                   |   | (12,037 | )
|Accrued liabilities                                                                                |  |                   | 1,088   |   |                   |   | 2,002   |  
|Amounts due to affiliated companies, net                                                           |  |                   | 2,020   |   |                   |   | 685     |  
|Sales, use and fuel taxes payable                                                                  |  |                   | (1,682  | ) |                   |   | (4,270  | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Total change                                                                                       |  | $                 | (27,525 | ) |                   | $ | (23,244 | )
|                                                                                                   |  |                   |         |   |                   |   |         |  
|Cash paid (received) during the period for:                                                        |  |                   |         |   |                   |   |         |  
|Interest                                                                                           |  | $                 | 10,604  |   |                   | $ | 10,604  |  
|Income taxes                                                                                       |  | $                 | 512     |   |                   | $ | (3,133  | )
|                                                                                                   |  |                   |         |   |                   |   |         |  



7



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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 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.



The Company is a wholly-owned subsidiary of United Refining, Inc., a wholly-owned subsidiary of United Acquisition
Corporation, 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 six month periods ended February 29, 2004 are not necessarily indicative of the results that may be expected for the year ending August 31, 2004. For further information, refer to the consolidated financial statements and footnotes
thereto included in the Companys Form 10-K filing dated December 1, 2003.



2.    Recent Accounting Pronouncements



In January 2003, the FASB issued Interpretation (FIN) No. 46, Consolidation of Variable Interest Entities and in December 2003, a revised interpretation was issued (FIN No. 46(R)). In general,
a variable interest entity (VIE) is a corporation, partnership, trust, or any other legal structure used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide
sufficient financial resources for the entity to support its activities. FIN 46 requires a VIE to be consolidated by a company if that company is designated as the primary beneficiary. The interpretation applies to VIEs created after January 31,
2003, and for all financial statements issued after December 15, 2003 for VIEs in which an enterprise held a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 did not have a material effect on the Companys
financial position or results of operations.



3.    Subsidiary Guarantors



Certain of United Refining Companys (the issuer) subsidiaries function as guarantors under the terms of the $200,000,000 Senior Unsecured Note Indenture due June 9, 2007. Financial information for the issuer and its wholly
owned subsidiary guarantors is as follows:



8



---

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)



|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|---------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | --------------- | - | ------- | ------------ |  | - | ------------ | - |  | ------ | ------- | - | ---------- | - | ------- | ------------ |  | - | ------------ | - |  | - | -------- | - |  | - | ------- | -
|                                                                                         |  | February 29, 2004 |         |   | August 31, 2003 |  
|                                                                                         |  | Issuer            |         |   | Guarantors      |   |         | Eliminations |  |   | Consolidated |   |  | Issuer |         |   | Guarantors |   |         | Eliminations |  |   | Consolidated |  
|Assets                                                                                   |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Current:                                                                                 |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Cash and cash equivalents                                                                |  | $                 | 2,644   |   |                 | $ | 11,748  |              |  | $ |             |   |  | $      | 14,392  |   |            | $ | 3,383   |              |  | $ | 10,436       |   |  | $ |         |   |  | $ | 13,819  |  
|Accounts receivable, net                                                                 |  |                   | 30,597  |   |                 |   | 9,625   |              |  |   |             |   |  |        | 40,222  |   |            |   | 31,780  |              |  |   | 10,952       |   |  |   |         |   |  |   | 42,732  |  
|Inventories                                                                              |  |                   | 80,189  |   |                 |   | 19,586  |              |  |   |             |   |  |        | 99,775  |   |            |   | 55,435  |              |  |   | 20,688       |   |  |   |         |   |  |   | 76,123  |  
|Prepaid expenses and other assets                                                        |  |                   | 11,284  |   |                 |   | 4,943   |              |  |   |             |   |  |        | 16,227  |   |            |   | 9,453   |              |  |   | 883          |   |  |   |         |   |  |   | 10,336  |  
|Amounts due from affiliated companies, net                                               |  |                   |        |   |                 |   |        |              |  |   |             |   |  |        |        |   |            |   | 1,186   |              |  |   | (547         | ) |  |   |         |   |  |   | 639     |  
|Intercompany                                                                             |  |                   | 96,025  |   |                 |   | 18,823  |              |  |   | (114,848     | ) |  |        |        |   |            |   | 88,123  |              |  |   | 19,467       |   |  |   | (107,590 | ) |  |   |        |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Total current assets                                                                     |  |                   | 220,739 |   |                 |   | 64,725  |              |  |   | (114,848     | ) |  |        | 170,616 |   |            |   | 189,360 |              |  |   | 61,879       |   |  |   | (107,590 | ) |  |   | 143,649 |  
|Property, plant and equipment, net                                                       |  |                   | 115,175 |   |                 |   | 69,218  |              |  |   |             |   |  |        | 184,393 |   |            |   | 117,149 |              |  |   | 69,730       |   |  |   |         |   |  |   | 186,879 |  
|Investment in affiliated company                                                         |  |                   | 1,085   |   |                 |   |        |              |  |   |             |   |  |        | 1,085   |   |            |   | 574     |              |  |   |             |   |  |   |         |   |  |   | 574     |  
|Deferred financing costs, net                                                            |  |                   | 3,029   |   |                 |   |        |              |  |   |             |   |  |        | 3,029   |   |            |   | 2,963   |              |  |   |             |   |  |   |         |   |  |   | 2,963   |  
|Goodwill and other non-amortizable assets                                                |  |                   |        |   |                 |   | 11,849  |              |  |   |             |   |  |        | 11,849  |   |            |   |        |              |  |   | 11,849       |   |  |   |         |   |  |   | 11,849  |  
|Amortizable intangible assets, net                                                       |  |                   |        |   |                 |   | 3,415   |              |  |   |             |   |  |        | 3,415   |   |            |   |        |              |  |   | 3,588        |   |  |   |         |   |  |   | 3,588   |  
|Deferred turnaround costs & other assets, net                                            |  |                   | 7,157   |   |                 |   | 1,900   |              |  |   | (1,171       | ) |  |        | 7,886   |   |            |   | 8,204   |              |  |   | 1,184        |   |  |   | (1,171   | ) |  |   | 8,217   |  
|Deferred income taxes                                                                    |  |                   |        |   |                 |   | 611     |              |  |   |             |   |  |        | 611     |   |            |   | 7,455   |              |  |   | (3,746       | ) |  |   |         |   |  |   | 3,709   |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|                                                                                         |  | $                 | 347,185 |   |                 | $ | 151,718 |              |  | $ | (116,019     | ) |  | $      | 382,884 |   |            | $ | 325,705 |              |  | $ | 144,484      |   |  | $ | (108,761 | ) |  | $ | 361,428 |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Liabilities and Stockholders Equity                                                     |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Current:                                                                                 |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Revolving credit facility                                                                |  | $                 | 50,000  |   |                 | $ |        |              |  | $ |             |   |  | $      | 50,000  |   |            | $ | 31,500  |              |  | $ |             |   |  | $ |         |   |  | $ | 31,500  |  
|Current installments of long-term debt                                                   |  |                   | 90      |   |                 |   | 540     |              |  |   |             |   |  |        | 630     |   |            |   | 89      |              |  |   | 594          |   |  |   |         |   |  |   | 683     |  
|Accounts payable                                                                         |  |                   | 21,570  |   |                 |   | 11,623  |              |  |   |             |   |  |        | 33,193  |   |            |   | 19,906  |              |  |   | 15,205       |   |  |   |         |   |  |   | 35,111  |  
|Accrued liabilities                                                                      |  |                   | 13,225  |   |                 |   | 3,570   |              |  |   |             |   |  |        | 16,795  |   |            |   | 11,708  |              |  |   | 3,999        |   |  |   |         |   |  |   | 15,707  |  
|Sales, use and fuel taxes payable                                                        |  |                   | 13,724  |   |                 |   | 2,447   |              |  |   |             |   |  |        | 16,171  |   |            |   | 14,891  |              |  |   | 2,962        |   |  |   |         |   |  |   | 17,853  |  
|Deferred income taxes                                                                    |  |                   | 5,123   |   |                 |   | 34      |              |  |   |             |   |  |        | 5,157   |   |            |   | 5,123   |              |  |   | 34           |   |  |   |         |   |  |   | 5,157   |  
|Amounts due to affiliated companies, net                                                 |  |                   | 1,260   |   |                 |   | 121     |              |  |   |             |   |  |        | 1,381   |   |            |   |        |              |  |   |             |   |  |   |         |   |  |   |        |  
|Intercompany                                                                             |  |                   |        |   |                 |   | 114,848 |              |  |   | (114,848     | ) |  |        |        |   |            |   |        |              |  |   | 107,590      |   |  |   | (107,590 | ) |  |   |        |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Total current liabilities                                                                |  |                   | 104,992 |   |                 |   | 133,183 |              |  |   | (114,848     | ) |  |        | 123,327 |   |            |   | 83,217  |              |  |   | 130,384      |   |  |   | (107,590 | ) |  |   | 106,011 |  
|Long term debt: less current installments                                                |  |                   | 180,329 |   |                 |   | 1,676   |              |  |   |             |   |  |        | 182,005 |   |            |   | 180,375 |              |  |   | 1,852        |   |  |   |         |   |  |   | 182,227 |  
|Deferred income taxes                                                                    |  |                   | (3,315  | ) |                 |   | 3,315   |              |  |   |             |   |  |        |        |   |            |   | 1,037   |              |  |   | (1,037       | ) |  |   |         |   |  |   |        |  
|Deferred gain on settlement of pension plan obligations                                  |  |                   | 1,022   |   |                 |   |        |              |  |   |             |   |  |        | 1,022   |   |            |   | 1,130   |              |  |   |             |   |  |   |         |   |  |   | 1,130   |  
|Deferred retirement benefits                                                             |  |                   | 26,508  |   |                 |   | 1,076   |              |  |   |             |   |  |        | 27,584  |   |            |   | 27,174  |              |  |   | 1,224        |   |  |   |         |   |  |   | 28,398  |  
|Other noncurrent liabilities                                                             |  |                   |        |   |                 |   | 1,987   |              |  |   |             |   |  |        | 1,987   |   |            |   |        |              |  |   | 1,687        |   |  |   |         |   |  |   | 1,687   |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Total liabilities                                                                        |  |                   | 309,536 |   |                 |   | 141,237 |              |  |   | (114,848     | ) |  |        | 335,925 |   |            |   | 292,933 |              |  |   | 134,110      |   |  |   | (107,590 | ) |  |   | 319,453 |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|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                                                               |  |                   | 7,150   |   |                 |   | 10,651  |              |  |   | (1,153       | ) |  |        | 16,648  |   |            |   | 7,150   |              |  |   | 10,651       |   |  |   | (1,153   | ) |  |   | 16,648  |  
|Retained earnings                                                                        |  |                   | 31,539  |   |                 |   | (188    | )            |  |   |             |   |  |        | 31,351  |   |            |   | 26,662  |              |  |   | (295         | ) |  |   |         |   |  |   | 26,367  |  
|Accumulated other comprehensive loss                                                     |  |                   | (1,040  | ) |                 |   |        |              |  |   |             |   |  |        | (1,040  | ) |            |   | (1,040  | )            |  |   |             |   |  |   |         |   |  |   | (1,040  | )
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Total stockholders equity                                                               |  |                   | 37,649  |   |                 |   | 10,481  |              |  |   | (1,171       | ) |  |        | 46,959  |   |            |   | 32,772  |              |  |   | 10,374       |   |  |   | (1,171   | ) |  |   | 41,975  |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|                                                                                         |  | $                 | 347,185 |   |                 | $ | 151,718 |              |  | $ | (116,019     | ) |  | $      | 382,884 |   |            | $ | 325,705 |              |  | $ | 144,484      |   |  | $ | (108,761 | ) |  | $ | 361,428 |  
|                                                                                         |  |                   |         |   |                 |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  



9



---

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)



|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|------------------------------------------------- |  | ------------------------------------ | ------- | - | ------------------------------------ | - | ------- | ------------ |  | - | ------------ | - |  | ------ | ------- | - | ---------- | - | ------- | ------------ |  | - | ------------ | - |  | - | ------- | - |  | - | ------- | -
|                                                  |  | Three Months Ended February 29, 2004 |         |   | Three Months Ended February 28, 2003 |  
|                                                  |  | Issuer                               |         |   | Guarantors                           |   |         | Eliminations |  |   | Consolidated |   |  | Issuer |         |   | Guarantors |   |         | Eliminations |  |   | Consolidated |  
|Net sales                                         |  | $                                    | 215,170 |   |                                      | $ | 173,962 |              |  | $ | (62,167      | ) |  | $      | 326,965 |   |            | $ | 201,020 |              |  | $ | 171,409      |   |  | $ | (61,000 | ) |  | $ | 311,429 |  
|Costs of goods sold                               |  |                                      | 198,800 |   |                                      |   | 153,455 |              |  |   | (62,167      | ) |  |        | 290,088 |   |            |   | 181,596 |              |  |   | 149,291      |   |  |   | (61,000 | ) |  |   | 269,887 |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Gross profit                                      |  |                                      | 16,370  |   |                                      |   | 20,507  |              |  |   |             |   |  |        | 36,877  |   |            |   | 19,424  |              |  |   | 22,118       |   |  |   |        |   |  |   | 41,542  |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Expenses:                                         |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Selling, general and administrative expenses      |  |                                      | 4,201   |   |                                      |   | 23,230  |              |  |   |             |   |  |        | 27,431  |   |            |   | 4,082   |              |  |   | 22,934       |   |  |   |        |   |  |   | 27,016  |  
|Depreciation and amortization expenses            |  |                                      | 2,144   |   |                                      |   | 1,059   |              |  |   |             |   |  |        | 3,203   |   |            |   | 2,170   |              |  |   | 1,133        |   |  |   |        |   |  |   | 3,303   |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Total operating expenses                          |  |                                      | 6,345   |   |                                      |   | 24,289  |              |  |   |             |   |  |        | 30,634  |   |            |   | 6,252   |              |  |   | 24,067       |   |  |   |        |   |  |   | 30,319  |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Operating income (loss)                           |  |                                      | 10,025  |   |                                      |   | (3,782  | )            |  |   |             |   |  |        | 6,243   |   |            |   | 13,172  |              |  |   | (1,949       | ) |  |   |        |   |  |   | 11,223  |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Other income (expense):                           |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Interest expense, net                             |  |                                      | (4,323  | ) |                                      |   | (976    | )            |  |   |             |   |  |        | (5,299  | ) |            |   | (4,206  | )            |  |   | (1,056       | ) |  |   |        |   |  |   | (5,262  | )
|Other, net                                        |  |                                      | (604    | ) |                                      |   | 94      |              |  |   |             |   |  |        | (510    | ) |            |   | (335    | )            |  |   | 115          |   |  |   |        |   |  |   | (220    | )
|Equity in net earnings of affiliate               |  |                                      | 445     |   |                                      |   |        |              |  |   |             |   |  |        | 445     |   |            |   | 217     |              |  |   |             |   |  |   |        |   |  |   | 217     |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|                                                  |  |                                      | (4,482  | ) |                                      |   | (882    | )            |  |   |             |   |  |        | (5,364  | ) |            |   | (4,324  | )            |  |   | (941         | ) |  |   |        |   |  |   | (5,265  | )
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Income (loss) before income tax expense (benefit) |  |                                      | 5,543   |   |                                      |   | (4,664  | )            |  |   |             |   |  |        | 879     |   |            |   | 8,848   |              |  |   | (2,890       | ) |  |   |        |   |  |   | 5,958   |  
|Income tax expense (benefit)                      |  |                                      | 2,171   |   |                                      |   | (1,819  | )            |  |   |             |   |  |        | 352     |   |            |   | 3,413   |              |  |   | (1,117       | ) |  |   |        |   |  |   | 2,296   |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  
|Net income (loss)                                 |  | $                                    | 3,372   |   |                                      | $ | (2,845  | )            |  | $ |             |   |  | $      | 527     |   |            | $ | 5,435   |              |  | $ | (1,773       | ) |  | $ |        |   |  | $ | 3,662   |  
|                                                  |  |                                      |         |   |                                      |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |         |   |  |   |         |  



10



---

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)



|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|------------------------------------------------- |  | ---------------------------------- | ------- | - | ---------------------------------- | - | ------- | ------------ |  | - | ------------ | - |  | ------ | ------- | - | ---------- | - | ------- | ------------ |  | - | ------------ | - |  | - | -------- | - |  | - | ------- | -
|                                                  |  | Six Months Ended February 29, 2004 |         |   | Six Months Ended February 28, 2003 |  
|                                                  |  | Issuer                             |         |   | Guarantors                         |   |         | Eliminations |  |   | Consolidated |   |  | Issuer |         |   | Guarantors |   |         | Eliminations |  |   | Consolidated |  
|Net sales                                         |  | $                                  | 420,444 |   |                                    | $ | 357,051 |              |  | $ | (119,715     | ) |  | $      | 657,780 |   |            | $ | 374,280 |              |  | $ | 347,966      |   |  | $ | (117,512 | ) |  | $ | 604,734 |  
|Costs of goods sold                               |  |                                    | 390,024 |   |                                    |   | 306,783 |              |  |   | (119,715     | ) |  |        | 577,092 |   |            |   | 352,365 |              |  |   | 300,353      |   |  |   | (117,512 | ) |  |   | 535,206 |  
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Gross profit                                      |  |                                    | 30,420  |   |                                    |   | 50,268  |              |  |   |             |   |  |        | 80,688  |   |            |   | 21,915  |              |  |   | 47,613       |   |  |   |         |   |  |   | 69,528  |  
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Expenses:                                         |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Selling, general and administrative expenses      |  |                                    | 8,899   |   |                                    |   | 46,035  |              |  |   |             |   |  |        | 54,934  |   |            |   | 8,117   |              |  |   | 45,227       |   |  |   |         |   |  |   | 53,344  |  
|Depreciation and amortization expenses            |  |                                    | 4,288   |   |                                    |   | 2,119   |              |  |   |             |   |  |        | 6,407   |   |            |   | 4,340   |              |  |   | 2,266        |   |  |   |         |   |  |   | 6,606   |  
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Total operating expenses                          |  |                                    | 13,187  |   |                                    |   | 48,154  |              |  |   |             |   |  |        | 61,341  |   |            |   | 12,457  |              |  |   | 47,493       |   |  |   |         |   |  |   | 59,950  |  
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Operating income (loss)                           |  |                                    | 17,233  |   |                                    |   | 2,114   |              |  |   |             |   |  |        | 19,347  |   |            |   | 9,458   |              |  |   | 120          |   |  |   |         |   |  |   | 9,578   |  
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Other income (expense):                           |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Interest expense, net                             |  |                                    | (8,554  | ) |                                    |   | (1,915  | )            |  |   |             |   |  |        | (10,469 | ) |            |   | (8,331  | )            |  |   | (2,132       | ) |  |   |         |   |  |   | (10,463 | )
|Other, net                                        |  |                                    | (1,176  | ) |                                    |   | 134     |              |  |   |             |   |  |        | (1,042  | ) |            |   | (605    | )            |  |   | 317          |   |  |   |         |   |  |   | (288    | )
|Equity in net earnings of affiliate               |  |                                    | 511     |   |                                    |   |        |              |  |   |             |   |  |        | 511     |   |            |   | 268     |              |  |   |             |   |  |   |         |   |  |   | 268     |  
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|                                                  |  |                                    | (9,219  | ) |                                    |   | (1,781  | )            |  |   |             |   |  |        | (11,000 | ) |            |   | (8,668  | )            |  |   | (1,815       | ) |  |   |         |   |  |   | (10,483 | )
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Income (loss) before income tax expense (benefit) |  |                                    | 8,014   |   |                                    |   | 333     |              |  |   |             |   |  |        | 8,347   |   |            |   | 790     |              |  |   | (1,695       | ) |  |   |         |   |  |   | (905    | )
|Income tax expense (benefit)                      |  |                                    | 3,137   |   |                                    |   | 226     |              |  |   |             |   |  |        | 3,363   |   |            |   | 224     |              |  |   | (573         | ) |  |   |         |   |  |   | (349    | )
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  
|Net income (loss)                                 |  | $                                  | 4,877   |   |                                    | $ | 107     |              |  | $ |             |   |  | $      | 4,984   |   |            | $ | 566     |              |  | $ | (1,122       | ) |  | $ |         |   |  | $ | (556    | )
|                                                  |  |                                    |         |   |                                    |   |         |              |  |   |              |   |  |        |         |   |            |   |         |              |  |   |              |   |  |   |          |   |  |   |         |  



11



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UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)



|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|---------------------------------------------------- |  | ---------------------------------- | ------- | - | ---------------------------------- | - | ------ | ------------ |  | ------------ | - |  | ------ | ------- | - | ---------- | - | ------- | ------------ |  | ------------ | ------ | - |  | - | - |  | - | ------- | -
|                                                     |  | Six Months Ended February 29, 2004 |         |   | Six Months Ended February 28, 2003 |  
|                                                     |  | Issuer                             |         |   | Guarantors                         |   |        | Eliminations |  | Consolidated |   |  | Issuer |         |   | Guarantors |   |         | Eliminations |  | Consolidated |       
|Net cash (used in) provided by operating activities  |  | $                                  | (15,932 | ) |                                    | $ | 3,730  |              |  | $            |  |  | $      | (12,202 | ) |            | $ | (14,727 | )            |  | $            | (1,456 | ) |  | $ |  |  | $ | (16,183 | )
|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Cash flows from investing activities:                |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Additions to property, plant and equipment           |  |                                    | (2,318  | ) |                                    |   | (1,286 | )            |  |              |  |  |        | (3,604  | ) |            |   | (3,042  | )            |  |              | (617   | ) |  |   |  |  |   | (3,659  | )
|Additions to deferred turnaround costs               |  |                                    | (446    | ) |                                    |   | (785   | )            |  |              |  |  |        | (1,231  | ) |            |   | (5,277  | )            |  |              |       |   |  |   |  |  |   | (5,277  | )
|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Net cash used in investing activities                |  |                                    | (2,764  | ) |                                    |   | (2,071 | )            |  |              |  |  |        | (4,835  | ) |            |   | (8,319  | )            |  |              | (617   | ) |  |   |  |  |   | (8,936  | )
|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Cash flows from financing activities:                |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Net borrowings on revolving credit facility          |  |                                    | 18,500  |   |                                    |   |       |              |  |              |  |  |        | 18,500  |   |            |   | 21,686  |              |  |              |       |   |  |   |  |  |   | 21,686  |  
|Deferred financing costs                             |  |                                    | (498    | ) |                                    |   |       |              |  |              |  |  |        | (498    | ) |            |   |        |              |  |              |       |   |  |   |  |  |   |        |  
|Principal reductions of long-term debt               |  |                                    | (45     | ) |                                    |   | (347   | )            |  |              |  |  |        | (392    | ) |            |   | (37     | )            |  |              | (76    | ) |  |   |  |  |   | (113    | )
|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Net cash provided by (used in) financing activities  |  |                                    | 17,957  |   |                                    |   | (347   | )            |  |              |  |  |        | 17,610  |   |            |   | 21,649  |              |  |              | (76    | ) |  |   |  |  |   | 21,573  |  
|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Net increase (decrease) in cash and cash equivalents |  |                                    | (739    | ) |                                    |   | 1,312  |              |  |              |  |  |        | 573     |   |            |   | (1,397  | )            |  |              | (2,149 | ) |  |   |  |  |   | (3,546  | )
|Cash and cash equivalents, beginning of year         |  |                                    | 3,383   |   |                                    |   | 10,436 |              |  |              |  |  |        | 13,819  |   |            |   | 4,254   |              |  |              | 9,261  |   |  |   |  |  |   | 13,515  |  
|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  
|Cash and cash equivalents, end of period             |  | $                                  | 2,644   |   |                                    | $ | 11,748 |              |  | $            |  |  | $      | 14,392  |   |            | $ | 2,857   |              |  | $            | 7,112  |   |  | $ |  |  | $ | 9,969   |  
|                                                     |  |                                    |         |   |                                    |   |        |              |  |              |   |  |        |         |   |            |   |         |              |  |              |        |   |  |   |   |  |   |         |  



12



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UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



4.    Segments of Business



Intersegment revenues are calculated using estimated 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 |         |   | Six Months Ended  |  
|                              |  | February 29, 2004  |         |   | February 28, 2003 |   |         | February 29, 2004 |  | February 28, 2003 |        
|Net Sales                     |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|Retail                        |  | $                  | 172,781 |   |                   | $ | 170,255 |                   |  | $                 | 354,644 |  | $ | 345,914 |  
|Wholesale                     |  |                    | 154,184 |   |                   |   | 141,174 |                   |  |                   | 303,136 |  |   | 258,820 |  
|                              |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|                              |  | $                  | 326,965 |   |                   | $ | 311,429 |                   |  | $                 | 657,780 |  | $ | 604,734 |  
|                              |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|Intersegment Sales            |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|Wholesale                     |  | $                  | 60,986  |   |                   | $ | 59,846  |                   |  | $                 | 117,308 |  | $ | 115,460 |  
|                              |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|Operating Income (Loss)       |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|Retail                        |  | $                  | (3,961  | ) |                   | $ | (2,482  | )                 |  | $                 | 1,828   |  | $ | (328    | )
|Wholesale                     |  |                    | 10,204  |   |                   |   | 13,705  |                   |  |                   | 17,519  |  |   | 9,906   |  
|                              |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|                              |  | $                  | 6,243   |   |                   | $ | 11,223  |                   |  | $                 | 19,347  |  | $ | 9,578   |  
|                              |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|Depreciation and Amortization |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|Retail                        |  | $                  | 1,010   |   |                   | $ | 1,071   |                   |  | $                 | 2,022   |  | $ | 2,142   |  
|Wholesale                     |  |                    | 2,193   |   |                   |   | 2,232   |                   |  |                   | 4,385   |  |   | 4,464   |  
|                              |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  
|                              |  | $                  | 3,203   |   |                   | $ | 3,303   |                   |  | $                 | 6,407   |  | $ | 6,606   |  
|                              |  |                    |         |   |                   |   |         |                   |  |                   |         |  |   |         |  



|                                          |  |                   |         |                 |   |        
|----------------------------------------- |  | ----------------- | ------- | --------------- | - | -------
|                                          |  | February 29, 2004 |         | August 31, 2003
|Total Assets                              |  |                   |         |                 |   |        
|Retail                                    |  | $                 | 125,824 |                 | $ | 119,709
|Wholesale                                 |  |                   | 257,060 |                 |   | 241,719
|                                          |  |                   |         |                 |   |        
|                                          |  | $                 | 382,884 |                 | $ | 361,428
|                                          |  |                   |         |                 |   |        
|Capital Expenditures (including non-cash) |  |                   |         |                 |   |        
|Retail                                    |  | $                 | 1,320   |                 | $ | 2,456  
|Wholesale                                 |  |                   | 2,401   |                 |   | 6,768  
|                                          |  |                   |         |                 |   |        
|                                          |  | $                 | 3,721   |                 | $ | 9,224  
|                                          |  |                   |         |                 |   |        



5.    Secured
Credit Facility



Effective January 27, 2004, the Company
amended its secured credit facility to increase the maximum facility commitment from $50,000,000 to $75,000,000 on a permanent basis. The facility expires on May 9, 2007, and is secured by certain cash accounts, accounts receivable, and inventory.
The interest rate on borrowings varies with the Companys earnings and is based on the higher of the banks prime rate or Federal funds rate for base rate borrowings and the LIBOR rate for Euro-Rate borrowings.



The Company had outstanding letters of credit of $615,000 and approximately
$24,385,000 unused and available on the facility as of February 29, 2004.



13



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UNITED REFINING COMPANY AND SUBSIDIARIES



|ITEM 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- |  | -------------------------------------------------------------------------------------



Forward Looking Statements



This Quarterly Report on Form 10Q includes statements that constitute forward looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and that are intended to come within the safe harbor protection provided by those sections. By their nature, all forward looking statements involve risk and uncertainties.
Actual results may differ materially from those contemplated by the forward looking statements for a number of reasons.



Although the Company believes that its 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 from those expressed in any such forward-looking statements. In addition to the factors discussed elsewhere in this report, 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, 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 the Companys markets, 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, the possibility of inefficiencies or shutdowns in refinery operations or pipelines, the availability and cost of financing to the Company, 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 .



Recent Developments



Fiscal second quarter 2004 worldwide crude oil prices, as indicated by prices of crude oil contracts on the New York
Mercantile Exchange (NYMEX), increased steadily from December 2003 at $31.06/BBL to February 2004 at $34.22/BBL or by about 10%. For the recent quarter compared to the prior year quarter, average crude prices have increased about 10% from $29.43/BBL
to $32.47/BBL. NYMEX Crude oil prices have continued to increase with prices in late March for May crude delivery hovering just under $36/BBL. March 2004 will likely record the highest average calendar month NYMEX crude price (about $36.50/BBL)
since futures trading began in 1983. The current record average price is $35.92/BBL set in October 1990, two months after Iraqs invasion of Kuwait.



For second quarter of fiscal 2004 compared to the prior year quarter, the Companys average crude run cost per barrel increased 5.2% reflecting the
10% market trend mentioned above. When comparing the second quarter fiscal 2004 to the first quarter fiscal 2004, the Companys average crude run cost per barrel increased 4.5%.



Recent crude oil prices remain volatile as shown by prompt futures on the New York Mercantile Exchange (NYMEX) falling from
a high of $38.50/BBL on March 19 to a low of $34.75/BBL on March 26 in reaction to the fifth crude stock build in the US during the past six weeks. Increased demand stemming from robust economic activity in the US and the developing economies of
Asia (particularly China) has contributed to crudes recent rise to nearly $40/BBL.



The higher crude prices are keeping gasoline and diesel prices high. Oil prices have remained high partly due to demand (led by China) and to the markets impression that OPEC will keep its commitment to cut
supply starting April 1, plus ongoing civil unrest in Venezuela that intensified supply concerns given expectations of a tight market, and the relatively low gasoline inventory and perceived tightness in gasoline supply heading into the summer
driving season. Freezing temperatures across much of the US East Coast in January and February



14



---

boosted winter fuel consumption and depleted regional heating oil stocks. Unseasonably strong gasoline demand and attempts by refiners to cut winter-grade
stocks ahead of the summer driving season hurt already low gasoline stocks and drove gasoline prices to record high recently.



Compared to the prior year quarter, retail distillate margins per gallon increased 22.7%, but were offset by a 16.1% decrease in retail gasoline margins
on a per gallon basis that unfavorably impacted gross profit. Additionally, when comparing the second quarter fiscal 2004 to the first quarter fiscal 2004, the Company realized a 48.9% decrease in retail gasoline margins per gallon and a 31.4%
decrease in retail distillate margins per gallon.



Also, for
the quarter ended February 29, 2004 compared to the prior year quarter price increases in the wholesale sector were realized for wholesale gasoline and distillate while asphalt prices decreased.



The Company has completed Phase 1 of the USEPA approved Tier 2 Sulfur in
Gasoline Compliance Plan which has resulted in reducing the total gasoline pool sulfur to the required level starting January 1, 2004. Phase 2 of the Gasoline Sulfur Plan does not require further reductions until June 2006. The Company is
investigating several options to meet these low sulfur gasoline requirements.



Another factor creating upward price and margin volatility in calendar 2004 is the introduction of new gasoline specifications. More stringent requirements on fuel sulfur content mandated by the EPA will result in a
tighter supply of refined products. Some experts predict a continuing tight market for gasoline, which will probably set a record for demand in calendar 2004. As of late March, US gasoline demand is more than 4% higher than last year. Although US
production in 2004 is higher by about 2.4% compared to 2003, imports have decreased since fewer foreign refiners can produce the Tier 2 low sulfur gasoline now required by law.



Given the variety of different gasoline types (about 18) now produced in the US and the state bans on MTBE in New York and
Connecticut, the division within the gasoline market continues, making it more difficult to supply the growing market and reducing the flexibility to deal with crises like the recent Venezuelan strike, or even the effect of extreme weather. The
upcoming anticipated gasoline supply imbalance is not expected to be eased by talks that the government might relax the clean-air requirements in certain states. Industry experts indicate that the waivers would not have much of a short-term impact
since refineries and distributors have already made their configurations to meet summer gasoline specifications.



The Companys results continued to be influenced by the price discounts on heavy sour crude oils. Since the Companys crude supply is comprised
of approximately equal proportions of sour and sweet crude, the difference between their prices (sweet-sour differential) impacts the costs of goods sold and hence gross profit.



For the recent quarter compared to the prior year quarter and compared to the
first quarter of 2004, the Company realized a favorable 41.7% increase and a 12.8% increase, respectively in the light/heavy crude price differential. This differential was $10.64/BBL for the second quarter of fiscal 2004 and is the highest
differential since the third quarter of 2001 ($12.48/BBL).



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.



15



---

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     |         |   | Six Months Ended  |  
|                                       |  | February 29, 2004      |         |   | February 28, 2003 |   |         | February 29, 2004 |  |   | February 28, 2003 |  
|                                       |  | (dollars in thousands) |        
|Net Sales                              |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Petroleum                              |  | $                      | 131,157 |   |                   | $ | 128,174 |                   |  | $ | 268,426           |   |  | $ | 258,405 |  
|Merchandise and other                  |  |                        | 41,624  |   |                   |   | 42,081  |                   |  |   | 86,218            |   |  |   | 87,509  |  
|                                       |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Total Net Sales                        |  | $                      | 172,781 |   |                   | $ | 170,255 |                   |  | $ | 354,644           |   |  | $ | 345,914 |  
|Costs of Goods Sold                    |  | $                      | 152,608 |   |                   | $ | 148,824 |                   |  | $ | 304,973           |   |  | $ | 299,061 |  
|                                       |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Gross Profit                           |  | $                      | 20,173  |   |                   | $ | 21,431  |                   |  | $ | 49,671            |   |  | $ | 46,853  |  
|Operating Expenses                     |  | $                      | 24,134  |   |                   | $ | 23,913  |                   |  | $ | 47,843            |   |  | $ | 47,181  |  
|                                       |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Segment Operating Income / (Loss)      |  | $                      | (3,961  | ) |                   | $ | (2,482  | )                 |  | $ | 1,828             |   |  | $ | (328    | )
|                                       |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Petroleum Sales (thousands of gallons) |  |                        | 81,502  |   |                   |   | 83,297  |                   |  |   | 167,515           |   |  |   | 173,067 |  
|                                       |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Gross Profit                           |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Petroleum (a)                          |  | $                      | 8,333   |   |                   | $ | 9,731   |                   |  | $ | 25,001            |   |  | $ | 22,168  |  
|Merchandise and other                  |  |                        | 11,840  |   |                   |   | 11,700  |                   |  |   | 24,670            |   |  |   | 24,685  |  
|                                       |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|                                       |  | $                      | 20,173  |   |                   | $ | 21,431  |                   |  | $ | 49,671            |   |  | $ | 46,853  |  
|                                       |  |                        |         |   |                   |   |         |                   |  |   |                   |   |  |   |         |  
|Petroleum margin ($/gallon) (b)        |  |                        | .1022   |   |                   |   | .1168   |                   |  |   | .1492             |   |  |   | .1281   |  
|Merchandise margin (percent of sales)  |  |                        | 28.4    | % |                   |   | 27.8    | %                 |  |   | 28.6              | % |  |   | 28.2    | %

---

|(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.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Comparison of Fiscal Quarters Ended February 29, 2004 and February 28, 2003



Net Sales



Retail sales increased during 2004 by $2.5 million, or 1.5% from $170.3
million to $172.8 million. The retail sales increase was primarily due to a $3.0 million increase in petroleum sales, offset by a $.5 million decrease in merchandise sales. The petroleum sales increase results from a 4.6% increase in retail selling
prices per gallon, offset by a 1.8 million gallon or 2.2% decrease in retail petroleum volume.



Costs of Goods Sold



Retail costs of goods sold increased during the fiscal quarter ended February 29, 2004 by $3.8 million or 2.5% from $148.8 million to $152.6 million. The cost of gasoline increased 10.4%, on a per gallon basis, over fiscal quarter ended
February 28, 2003. The cost of distillates increased .9%, on a per gallon basis, over the prior year fiscal quarter. As a result, costs of goods sold for petroleum purchases increased $5.0 million. Offsetting these increases were decreased fuel
taxes of $.4 million and decreased merchandise costs of $.6 million.



16



---

Gross Profit/(Loss)



Retail gross profit decreased during 2004 by $1.3 million or 5.9%. The Company decreased its petroleum margins by $1.4 million offset by a merchandise
margin increase of $.1 million.



Operating Expenses



Retail operating expenses increased during 2004 by $.2 million or 1.0%.
Primarily contributing to the increases were increased payroll and payroll costs of $.1 million and increased credit/customer service costs of $.1 million.



Comparison of Six Months Ended February 29, 2004 and February 28, 2003



Net Sales



Retail sales increased during 2004 by $8.7 million, or 2.5% from $345.9 million to $354.6 million. The retail sales increase was primarily due to a $10.0
million increase in petroleum sales, offset by a $1.3 million decrease in merchandise sales. The petroleum sales increase results from a 7.3% increase in retail selling prices per gallon, offset by a 5.6 million gallon or 3.2% decrease in retail
petroleum volume.



Costs of Goods Sold



Retail costs of goods sold increased during the six months ended February
29, 2004 by $5.9 million or 2.0% from $299.1 million to $305.0 million. The cost of gasoline increased 11.0%, on a per gallon basis, over the six months ended February 28, 2003. The cost of distillates increased 2.2%, on a per gallon basis, over the
prior six months. As a result, costs of goods sold for petroleum purchases increased $9.2 million. Another increase to costs of goods sold was increased freight costs of $.1 million. Offsetting these increases were decreased fuel taxes of $2.0
million and decreased merchandise costs of $1.3 million.



Gross
Profit/(Loss)



Retail gross profit increased during 2004
by $2.8 million or 6%. The Company increased its petroleum margins by $2.8 million or 16.5% while merchandise margin remained relatively constant.



Operating Expenses



Retail operating expenses increased during 2004 by $.7 million or 1.4%. Primarily contributing to the increases were increased payroll and payroll costs
of $.1 million, increased credit/customer service costs of $.1 million, increased rent expense of $.2 million and insurance, utilities and taxes of $.1 million.



Wholesale Operations:



|                                            |  |                        |         |                   |   |                   |  |                   |         |  |   |        
|------------------------------------------- |  | ---------------------- | ------- | ----------------- | - | ----------------- |  | ----------------- | ------- |  | - | -------
|                                            |  | Three Months Ended     |         | Six Months Ended 
|                                            |  | February 29, 2004      |         | February 28, 2003 |   | February 29, 2004 |  | February 28, 2003
|                                            |  | (dollars in thousands)
|Net Sales (a)                               |  | $                      | 154,184 |                   | $ | 141,174           |  | $                 | 303,136 |  | $ | 258,820
|Costs of Goods Sold                         |  |                        | 137,480 |                   |   | 121,063           |  |                   | 272,119 |  |   | 236,145
|                                            |  |                        |         |                   |   |                   |  |                   |         |  |   |        
|Gross Profit                                |  | $                      | 16,704  |                   | $ | 20,111            |  | $                 | 31,017  |  | $ | 22,675 
|                                            |  |                        |         |                   |   |                   |  |                   |         |  |   |        
|Operating Expenses                          |  |                        | 6,500   |                   |   | 6,406             |  |                   | 13,498  |  |   | 12,769 
|                                            |  |                        |         |                   |   |                   |  |                   |         |  |   |        
|Segment Operating Income                    |  | $                      | 10,204  |                   | $ | 13,705            |  | $                 | 17,519  |  | $ | 9,906  
|                                            |  |                        |         |                   |   |                   |  |                   |         |  |   |        
|Crude throughput (thousand barrels per day) |  |                        | 62.8    |                   |   | 61.1              |  |                   | 63.6    |  |   | 54.3   
|                                            |  |                        |         |                   |   |                   |  |                   |         |  |   |        



17



---

Refinery Product Yield

(thousands of barrels)



|                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|------------------------------------------------------- |  | ------------------ | - |  | ----------------- | - |  | ----------------- | - |  | ----------------- | -
|                                                        |  | Three Months Ended |   |  | Six Months Ended  |  
|                                                        |  | February 29, 2004  |   |  | February 28, 2003 |   |  | February 29, 2004 |   |  | February 28, 2003 |  
|Gasoline and gasoline blendstock                        |  | 2,631              |   |  | 2,429             |   |  | 5,299             |   |  | 4,659             |  
|Distillates                                             |  | 1,525              |   |  | 1,565             |   |  | 2,983             |   |  | 2,517             |  
|Asphalt                                                 |  | 1,585              |   |  | 1,529             |   |  | 3,171             |   |  | 2,697             |  
|Butane, propane, residual products, internally produced |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|fuel and other (Other)                                |  | 525                |   |  | 516               |   |  | 1,155             |   |  | 1,075             |  
|                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|Total Product Yield                                     |  | 6,266              |   |  | 6,039             |   |  | 12,608            |   |  | 10,948            |  
|                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |  
|% Heavy Crude Oil of Total Refinery Throughput (b)      |  | 59                 | % |  | 59                | % |  | 56                | % |  | 57                | %
|                                                        |  |                    |   |  |                   |   |  |                   |   |  |                   |  



Product Sales

(dollars in thousands) (a)



|                                 |  |                    |         |                   |   |                   |  |                   |         |  |   |        
|-------------------------------- |  | ------------------ | ------- | ----------------- | - | ----------------- |  | ----------------- | ------- |  | - | -------
|                                 |  | Three Months Ended |         | Six Months Ended 
|                                 |  | February 29, 2004  |         | February 28, 2003 |   | February 29, 2004 |  | February 28, 2003
|Gasoline and gasoline blendstock |  | $                  | 65,274  |                   | $ | 51,685            |  | $                 | 121,893 |  | $ | 95,564 
|Distillates                      |  |                    | 57,709  |                   |   | 59,035            |  |                   | 97,353  |  |   | 90,556 
|Asphalt                          |  |                    | 26,502  |                   |   | 26,117            |  |                   | 76,180  |  |   | 65,633 
|Other                            |  |                    | 4,699   |                   |   | 4,337             |  |                   | 7,710   |  |   | 7,067  
|                                 |  |                    |         |                   |   |                   |  |                   |         |  |   |        
|                                 |  | $                  | 154,184 |                   | $ | 141,174           |  | $                 | 303,136 |  | $ | 258,820
|                                 |  |                    |         |                   |   |                   |  |                   |         |  |   |        



Product Sales

(thousand of barrels) (a)



|                                 |  |                    |  |                   |  |                   |  |                  
|-------------------------------- |  | ------------------ |  | ----------------- |  | ----------------- |  | -----------------
|                                 |  | Three Months Ended |  | Six Months Ended 
|                                 |  | February 29, 2004  |  | February 28, 2003 |  | February 29, 2004 |  | February 28, 2003
|Gasoline and gasoline blendstock |  | 1,524              |  | 1,332             |  | 2,959             |  | 2,567            
|Distillates                      |  | 1,363              |  | 1,436             |  | 2,447             |  | 2,327            
|Asphalt                          |  | 1,400              |  | 1,312             |  | 3,410             |  | 2,909            
|Other                            |  | 165                |  | 184               |  | 309               |  | 328              
|                                 |  |                    |  |                   |  |                   |  |                  
|                                 |  | 4,452              |  | 4,264             |  | 9,125             |  | 8,131            
|                                 |  |                    |  |                   |  |                   |  |                  

---

|(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 February 29, 2004 and February 28, 2003



Net Sales



Wholesale sales increased during 2004 by $13.0 million or 9.2% from $141.2
million to $154.2 million. The wholesale sales increase was due to a 4.6% increase in wholesale prices and a 4.4% increase in wholesale volume. Contributing to the increased sales volume was a 3.9% increase in crude runs for the three months ended
February 29, 2004 as compared to the prior year period.



18



---

Costs of Goods Sold



Wholesale costs of goods sold increased during 2004 by $16.4 million or 13.6% from $121.1 million to $137.5 million. The increase in wholesale costs of
goods was primarily due to a 3.9% increase in crude throughput volume and a 5.2% increase in the Companys average crude oil purchase price for the fiscal quarter ended February 29, 2004 as compared to the prior year period. Worldwide crude oil
prices, as indicated by NYMEX crude oil contract prices, increased 10.4% as compared to the prior year period.



Gross Profit



Wholesale
gross profit decreased $3.4 million from $20.1 million for fiscal quarter ended February 28, 2003 to $16.7 million for the fiscal quarter ended February 29, 2004. This decrease was primarily due to crude costs increasing more than product selling
prices during this period.



Operating Expenses



Operating expenses increased during 2004 by $.1 million over such expenses
for 2003. For 2004 operating expenses were $6.5 million, or 4.2% of net wholesale sales, compared to $6.4 million, or 4.5% of net wholesale sales for 2003.



Comparison of Six Months Ended February 29, 2004 and February 28, 2003



Net Sales



Wholesale sales increased during 2004 by $44.3 million or 17.1% from $258.8 million to $303.1 million. The wholesale sales increase was due to a 4.4%
increase in wholesale prices and a 12.2% increase in wholesale volume. Contributing to the increased sales volume was a 17.7% increase in crude runs for the six months ended February 29, 2004 as compared to the prior year period.



Costs of Goods Sold



Wholesale costs of goods sold increased during 2004 by $36.0 million or 15.2% from $236.1 million to $272.1 million. The
increase in wholesale costs of goods was primarily due to a 17.7% increase in crude throughput volume and a 3.8% increase in the Companys average crude oil purchase price for the six months ended February 29, 2004 as compared to the prior year
period. The refinery throughput volume increase for the first six months of 2004 resulted from the fact that the Company had a 21 day shutdown of units at the refinery during the prior year period ending February 28, 2003. Worldwide crude oil
prices, as indicated by NYMEX crude oil contract prices, increased 7.2% as compared to the prior year period.



Gross Profit



Wholesale
gross profit increased $8.3 million from $22.7 million for the six months ended February 28, 2003 to $31.0 million for the six months ended February 29, 2004. This increase was primarily due to the increase in wholesale sales volume, increased
wholesale selling prices and to 33.9% higher discounts on heavy high-sulfur crude oil grades processed by the Company.



Operating Expenses



Operating expenses increased during 2004 by $.7 million over such expenses for 2003. For 2004 operating expenses were $13.5 million, or 4.5% of net
wholesale sales, compared to $12.8 million, or 4.9% of net wholesale sales for 2003.



19



---

Interest Expense, net



Net interest expense (interest expense less interest income) remained relatively consistent between the six months ended February 29, 2004 and the six
months ended February 28, 2003.



Income Tax Expense/(Benefit)



The Companys effective tax rate for the six months
ended February 29, 2004 was approximately 40.3% compared to a rate of 38.6% for the six months ended February 28, 2003. The increase is primarily due to an increase in various permanent differences.



Liquidity and Capital Resources



The Company operates in an environment where its 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 the Companys 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. For further information related to risks and other factors, see Forward-Looking
Statements in Item 2.



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



|                          |  |                   |         |                 |   |        
|------------------------- |  | ----------------- | ------- | --------------- | - | -------
|                          |  | February 29, 2004 |         | August 31, 2003
|Cash and cash equivalents |  | $                 | 14,392  |                 | $ | 13,819 
|Working capital           |  | $                 | 47,289  |                 | $ | 37,638 
|Current ratio             |  |                   | 1.4     |                 |   | 1.4    
|Debt                      |  | $                 | 232,635 |                 | $ | 214,410



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



The
Companys 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. During the six months ended February 29, 2004, significant uses of cash include $3.6 million for purchases of property, plant and equipment, $.4 million of reductions to debt and $1.2 million for additions to refinery
turnaround costs and $12.2 million used in operating activities principally for increased inventories. This use of cash was funded primarily from net borrowings of $18.5 million on the revolving credit facility.



The Company requires 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 $4 million annually over the last three years for the refining and marketing operations. Management does not foresee any increase in maintenance and non-discretionary capital
expenditures during fiscal 2004. The Company spent approximately $4 million as part of its Tier 2 Gasoline Sulfur Program under 40 CFR Part 80, Subpart H during fiscal year 2003, and expects to spend approximately $1 million during fiscal 2004,
primarily during activities requiring a shutdown of the FCC Unit, which is scheduled for April 2004.



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. The Company expects to be able to meet its working capital, capital expenditure, contractual obligations, letter of credit and



20



---

debt service requirements out of cash flow from operations, cash on hand and borrowings under the Companys secured revolving credit facility (the
facility) with PNC Bank, N.A. as Agent Bank. This is a $75,000,000 revolving facility, which was renewed for five years on July 12, 2002 and amended on November 27, 2002 and February 19, 2003, March 24, 2003 and January 27, 2004.



Effective January 27, 2004, the Company amended its secured
credit facility to increase the maximum facility commitment from $50,000,000 to $75,000,000 on a permanent basis. The facility expires on May 9, 2007, and is secured by certain cash accounts, accounts receivable, and inventory. The interest rate on
borrowings varies with the Companys earnings and is based on the higher of the banks prime rate or Federal funds rate for base rate borrowings and the LIBOR rate for Euro-Rate borrowings.



The Company had outstanding letters of credit of $615,000 and approximately
$24,385,000 unused and available on the facility as of February 29, 2004.



Although the Company is not aware of any pending circumstances which would change its 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. The Company continues to investigate strategic
acquisitions and capital improvements to its existing facilities.



Federal, state and local laws and regulations relating to the environment affect nearly all the operations of the Company. As is the case with all the companies engaged in similar industries, the Company faces 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. The Company 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.



Recent Accounting Pronouncements



In January 2003, the FASB issued Interpretation (FIN) No. 46,
Consolidation of Variable Interest Entities and in December 2003, a revised interpretation was issued (FIN No. 46(R)). In general, a variable interest entity (VIE) is a corporation, partnership, trust, or any other legal
structure used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 requires a VIE to be
consolidated by a company if that company is designated as the primary beneficiary. The interpretation applies to VIEs created after January 31, 2003, and for all financial statements issued after December 15, 2003 for VIEs in which an enterprise
held a variable interest that it acquired before February 1, 2003. The adoption of FIN 46 did not have a material effect on the Companys financial position or results of operations.



21



---

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The Company uses its revolving credit facility to finance a portion of its operations. 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. At February 29, 2004, the Company was exposed to the risk of market price declines with respect
to a substantial portion of its crude oil and refined product inventories.



ITEM 4.    CONTROLS AND PROCEDURES



|(a) |  | Based on an evaluation by management of the Companys disclosure controls and procedures (as defined in Rules 13(a)  15(e) and 15(d)  15(e) of the Securities
Exchange Act of 1934, as amended), as of the end of the Companys fiscal quarter ended February 29, 2004, (the Evaluation Date) the Companys Chief Executive Officer and Chief Financial Officer (its principal executive officer
and principal financial officer, respectively) have concluded that the Companys disclosure controls and procedures were effective as of the Evaluation Date .
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | There have not been any significant changes in the Companys internal controls over financial reporting that occurred during the Companys fiscal quarter ended February
29, 2004 that has materially affected, or is reasonably likely to materially affect, the Companys internal controls over financial reporting.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22



---

PART IIOTHER INFORMATION



ITEM 1.    LEGAL PROCEEDINGS



(None)



|ITEM 2. |  | CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- |  | --------------------------------------------------------------------------------



(None)



ITEM 3.    DEFAULTS UPON SENIOR SECURITIES



(None)



ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



(N/A)



ITEM 5.    OTHER INFORMATION



(None)



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                          
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                   
|    |  | Exhibit 10.9                                                                                                                                                                                                                                                                                                                                                                                       |  | Amendment No. Four to Credit Agreement dated as of January 27, 2004 by and among UNITED REFINING COMPANY, a Pennsylvania corporation (United Refining), UNITED REFINING COMPANY OF
PENNSYLVANIA, a Pennsylvania corporation (United Refining of PA), KIANTONE PIPELINE CORPORATION, a New York corporation (Kiantone), COUNTRY FAIR, INC., a Pennsylvania corporation (Country Fair) (United Refining,
United Refining of PA, Kiantone and Country Fair are each referred to herein as a Borrower and collectively as the Borrowers), KWIK-FILL CORPORATION, a Pennsylvania corporation (Guarantor), the Banks
that are parties hereto and PNC Bank, National Association, as Agent (Agent).
|    |  |                                                                                                                                                                                                                                                                                                                                                                                                   
|    |  | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | 
|(b) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                                                                               
|    | 
|    |  | On January 30, 2004, a Current Report on Form 8-K was filed reporting under Item 5, OtherEvents, and Required FD Disclosure, that the Company issued a press release announcing
anamendment to its secured credit facility increasing the facility commitment from $50,000,000 to$75,000,000 effective January 27, 2004. The press release was filed as an Exhibit under Item7(c) of the Form 8-K.



23



---

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: April 14, 2004



UNITED REFINING COMPANY(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




24



---

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:
April 14, 2004



KIANTONE PIPELINE CORPORATION(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




25



---

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:
April 14, 2004



UNITED REFINING COMPANY OF PENNSYLVANIA(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




26



---

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:
April 14, 2004



KIANTONE PIPELINE COMPANY(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




27



---

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:
April 14, 2004



UNITED JET CENTER, INC.(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




28



---

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:
April 14, 2004



KWIK FILL CORPORATION(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




29



---

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:
April 14, 2004



INDEPENDENT GASOLINE AND OIL COMPANY OF ROCHESTER, INC.(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




30



---

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:
April 14, 2004



BELL OIL CORP.(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




31



---

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:
April 14, 2004



PPC, INC.(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




32



---

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:
April 14, 2004



SUPER TEST PETROLEUM, INC.(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




33



---

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:
April 14, 2004



KWIK-FIL, INC.(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




34



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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:
April 14, 2004



VULCAN ASPHALT REFINING CORPORATION(Registrant)/s/  Myron L. TurfittMyron L. TurfittPresident/s/  James E. MurphyJames E. MurphyChief Financial Officer




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