<PAGE>

                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

                                      FORM 10-K

                       ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended June 30, 1997          Commission File Number 33-88526

                              GRIFFITH CONSUMERS COMPANY
                                   CARL KING, INC.
                              FREDERICK TERMINALS, INC.

              (Exact name of registrants as specified in their charters)

              Delaware                                52-1887726
              Delaware                                04-2941998
              Maryland                                52-1863759

         (State or other jurisdiction of              (I.R.S. Employer No.)
         incorporation or organization)

         Griffith Consumers Company              Carl King, Inc.
         Frederick Terminals, Inc.               2336 Goddard Parkway
         2510 Schuster Drive                     Salisbury, Maryland 21801
         Cheverly, Maryland 20781                (410)860-0400
         (301) 322-3111

            (Address, including zip code, and telephone number, including
               area code, of registrants' principal executive offices)


                                           
             Securities registered pursuant to Section 12(b) of the Act:

                                         None

             Securities registered pursuant to Section 12(g) of the Act:

                                         None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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.     X  Yes       No

Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulations S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment of this
Form 10-K [   ].

As of September 29, 1997, the Issuers had the following number of shares of
common stock outstanding (all of which are held by affiliates):

              Griffith Consumers Company :  1,000 shares
              Carl King, Inc.:              1,000 shares
              Frederick Terminals, Inc.:      500 shares

<PAGE>

The fiscal year of Griffith Consumers Company ends June 30 and unless 
otherwise indicated, references to particular years are references to fiscal 
years ending June 30 of the year indicated.

                                        PART I

Item 1.  Business

Griffith Consumers Company ("Griffith" and together with its wholly owned 
subsidiaries, the "Company"), a Delaware corporation, is one of the leading 
full service, independent retail, petroleum products distributors operating 
in the Baltimore/Washington Metropolitan area as well as in portions of 
Northern Virginia, Maryland, West Virginia, Delaware, New Jersey, and 
Pennsylvania.  The Company and its subsidiaries, Carl King, Inc. ("King") and 
Frederick Terminals, Inc., distribute heating oil, gasoline, diesel fuel, 
kerosene and heavy oils and sell products and services related to their 
business.

In December 1994, Griffith Holdings, Inc. ("GHI"), a corporation previously 
unrelated to the Company, acquired all of the 2,360,000 outstanding shares of 
common stock of Griffith Consumers Company, a Maryland corporation ("Griffith 
Maryland"), the predecessor to the Company.  Pursuant to a merger agreement, 
ABC Acquisition Corp., a Maryland corporation ("ABC") and a wholly-owned 
subsidiary of GHI, merged with and into Griffith Maryland.  As a result of 
the merger, the Company became a wholly-owned subsidiary of GHI (the "1994 
Acquisition").

On July 11, 1996, the Company, through its wholly-owned subsidiary, Shore 
Stop Corporation, acquired certain assets (the "Acquisition") used in the 
operations of a chain of 49 convenience stores and retail gasoline stations 
within the states of Maryland, Delaware, and Virginia, under the "Shore Stop" 
trade name and a dealer petroleum sales business supplying 31 dealers from 
two facilities located in Virginia and Maryland from Regent Investments, 
Inc., Delaware Investments, Inc. and Mid-Atlantic Investments, Inc., each a 
Virginia corporation (collectively, the "Sellers").  The Company paid the 
Sellers $17,000,000 (plus the purchase price of certain inventory), subject 
to certain adjustments, of which $1,500,000 was in the form of a promissory 
note (the "Regent Note") secured by first priority mortgages or deeds of 
trust on certain assets of the Company for 1996.  

Since 1898, the Company and its predecessors have been in the fuel 
distribution business.  The Company acquired the assets and certain 
liabilities of its predecessor from ARCO on July 1, 1985.  Since then, 
management has followed a program of selective acquisitions of heating oil 
distributors and motor fuel marketers to increase the market share in its 
present market area and to expand geographically in the mid-Atlantic states.  
The purchase price of the 43 acquisitions made between July 1, 1985 and June 
30, 1997 was $67 million.  The five largest acquisitions made since July 1, 
1985 were Hessick, Inc. ($5 million), Carl King, Inc. ($14 million),

<PAGE>

Calotex Delaware, Inc. ($5 million), Steuart Heating ($15 million), and Shore 
Stop Corp. ($17 million).

Griffith and Frederick Terminals, Inc.  have its principal offices at 2510 
Schuster Drive, Cheverly, Maryland; its telephone number is (301) 322-3111.

Carl King has its primary headquarters at 2336 Goddard Parkway, Salisbury, 
Maryland 21801; its telephone number is (410) 860-0400.  

                                     MOTOR FUELS

Sales.  During 1997, the Company sold 168 million gallons of gasoline and 
diesel, representing 77% of the petroleum gallons sold by the Company and 
accounting for 63% of the Company's total revenue for the year.  During 1997, 
the existing operations of Griffith and Carl King (excluding Shore Stop 
Corporation ("Shore Stop"))sold 127 million gallons of gasoline and diesel, 
representing 72% of the petroleum gallons sold by the existing operations of 
Griffith and Carl King.  In 1996 and 1995, the Company sold 124 million 
gallons and 128 million gallons, respectively, of gasoline and diesel, 
accounting for 58% and 63% of the revenue for the respective years.

Gasoline and diesel sales were made primarily through 91 Company owned and 
Company operated gasoline stations and 112 dealer operated gasoline stations. 
The Company operates convenience stores or sells sundries at all of its 
Company owned and operated gasoline stations.  Sundry sales accounted for 
approximately 15% of total revenues.  

Company Operated Stations.  The Company operates 91 gasoline stations under 
market brand gasoline. The Company operates convenience stores sales areas 
that range from 1,000 to 2,500 square feet of selling space and carry a wide 
variety of groceries, hot and cold snacks, food items, coffee, soda, and 
other beverages at 84 stations. There are also small sundry booths at seven 
stations.  The Company's facilities are generally open 16 to 24 hours a day 
and primarily operate on a self-service basis.

Dealer Supply Arrangements.  The Company sells motor fuel to dealers, the 
majority of which are supplied pursuant to dealer supply arrangements.  These 
arrangements, which have a typical term of 5 to 10 years, generally require 
the dealer to purchase all of its motor fuel from the Company, at the 
Company's dealer price at the time of purchase.  In return, the Company 
generally provides the dealer with equipment either by advancing funds to the 
dealer for the purchase of the equipment by the dealer and/or by leasing 
equipment to the dealer.  Such equipment is used to upgrade station 
operations and may include dispensers, signage and canopies.  The

                                       2

<PAGE>

dealer supply arrangements generally do not have specified monthly or yearly 
maximums or minimums; however, the arrangements pursuant to which the 
equipment is provided to the dealer usually require the dealer to purchase a 
minimum amount in order to reduce its obligation for the equipment so 
provided.  

In approximately 20% of the dealer supply arrangements, the Company delivers 
motor fuel to the dealer's station on a consignment basis.  In these cases, 
the Company pays the dealer a fixed commission for each gallon of motor fuel 
sold and the dealer generally does not participate in the profit generated 
from motor fuel sales.  The Company sets the selling price, owns the 
inventory in the tanks at the dealer's station, and receives the revenue for 
all gallons sold less the commission.

Delivered Motor Fuel.  The Company also supplies motor fuel to customers who 
have their own on-site storage facilities, such as construction sites and 
fleet operators.

Transportation.  The Company's supply of motor fuel is transported by common 
carrier to the Company operated stations and dealer stations.  In addition, 
the Company operates four tractor trailers for deliveries to stations.  
Delivered motor fuel is transported by common carriers and Company operated 
vehicles.

                                    HEATING FUELS

Residential Sales.  During 1997, residential heating oil and kerosene sales 
accounted for 13% of total Company revenue.  During 1997, residential heating 
oil and kerosene sales accounted for 18% of the revenue from the existing 
operations (excluding Shore Stop) of Griffith and Carl King.  The Company 
sold 29 million gallons of residential heating oil and kerosene representing 
13% of total petroleum gallons sold by the Company and 16% of total petroleum 
gallons sold by the existing operations (excluding Shore Stop) of Griffith 
and Carl King.  In 1996 and 1995, the Company sold 35 million gallons and 30 
million gallons, respectively, of residential heating oil and kerosene, 
accounting for 18% and 17% of the revenue for the respective years.

The Company has two types of residential customers; automatic delivery 
service and delivery on demand.  Fuel deliveries to approximately 70% of the 
Company's total residential customers are made under its automatic delivery 
service program.  This system is a computerized program which analyzes 
prevailing weather conditions and the individual customer's consumption 
patterns to determine when each customer needs a delivery.  Approximately 
one-half of the Company's residential customers also have heating equipment 
maintenance contracts with the Company which provide an annual tune-up and 
cleaning of equipment, free parts replacements for normal wear and tear, and 
up to 24 hour radio dispatched service 

                                      3

<PAGE>

for routine and emergency calls.  During 1997, maintenance contracts and 
repair services accounted for approximately 2% of total revenue.  In 
addition, the Company sells and services heating and air conditioning 
equipment and water heaters, which accounted for another approximately 1% of 
1997 revenue.

Approximately 60% of the Company's residential customers use the "Level 
Payment Plan", making payments in eleven equal monthly installments starting 
in August. Since the heating season begins in October, customers usually have 
a credit balance until midwinter.  These advance payments also provide a 
source of cash that improves the Company's cash flow in the summer and early 
fall.

Operating Structure.  Heating oil operations are conducted through seven 
divisions, which serve as distribution and service centers.  Each division 
provides heating oil delivery service, heating equipment sales, and during 
winter months, up to 24 hour repair service.  Each division operates on an 
autonomous basis with respect to customer service.  Marketing, credit, 
purchasing and pricing are centralized at the corporate offices in Cheverly, 
Maryland. 

Commercial Sales.  During 1997, the Company's commercial heating oil revenue 
was 6% of the total Company revenue, from the sale of 21 million gallons of 
commercial heating oil, accounting for 10% of total petroleum gallons sold by 
the Company and 12% of total petroleum gallons sold by the existing 
operations of Griffith and Carl King.  For 1996 and 1995, the Company sold 38 
million gallons and 26 million gallons, respectively, of commercial heating 
oil, accounting for 14% and 10% of the revenue for the respective years.

The Company maintains its commercial accounts through its recognition in the 
industry as a provider of quality commercial burner service, timely 
deliveries, and personalized technical support.  Many commercial customers 
have dual fuel systems that allow them to switch between oil and gas to the 
lowest cost fuel. Also, natural gas suppliers have made arrangements with 
certain of their commercial customers that allow the supplier to interrupt 
the supply of natural gas to these customers during extended cold periods.  
Gas interruptions generated significantly less revenue during 1997 as 
compared to 1996, due to the warmer than normal weather.

Transportation.  The Company utilizes a fleet of approximately 267 tank 
trucks, service vans and other vehicles to deliver heating oil and to provide 
service to commercial and residential customers.  Approximately 90% of these 
vehicles are owned by the Company with the remainder under operating leases.  
In addition, the Company  utilizes independent tank truck operators to 
deliver heating oil.

                                       4

<PAGE>

                                OPERATING ENVIRONMENT

Seasonality and Weather.  The weather patterns during the winter months can 
have a material effect on the Company's sale of heating oil.  Although 
temperature levels for the heating season have been relatively stable over 
time, variations can occur from year to year, and warmer than normal winter 
weather will adversely affect the Company's annual results.  The seasonal 
nature of the Company's heating oil results in most of the heating oil 
operation's revenue being generated in the second and third quarters of each 
year.  During 1997, the temperature level was 16.3% warmer than 1996 and 5.1% 
warmer than normal based on the number of degree days. The warmer heating 
season negatively affected the number of heating oil gallons sold during 1997.

When weather conditions are favorable, particularly during the summer 
vacation season, customers are more likely to purchase more gasoline.  As a 
result, the motor fuel operations typically generate slightly higher revenues 
during warmer weather months, which fall within the Company's first and 
fourth quarters.  If weather conditions are not favorable during these 
periods, the Company's operating results and cash flow from operations would 
be affected negatively.

Insurance.  The Company maintains a comprehensive package of insurance 
policies including pollution or environmental impairment liability coverage.  
Further, state underground storage tank reimbursement programs in Delaware 
and Virginia currently provide additional risk transfer mechanisms.

Competition.  The heating oil business is highly competitive.  The Company 
competes with heating oil distributors offering a broad range of services and 
prices, from full service distributors, like the Company, to those offering 
delivery only.  Competition with other companies in the heating oil industry 
is based primarily on customer service and price.  The Company believes that 
commercial customers are somewhat more sensitive to price than residential 
customers, but also expect professional and timely service.  Long-standing 
customer relationships are typical in the retail home heating oil industry.  
As a result, it is difficult to acquire new retail customers due to existing 
relationships between potential customers and other home heating oil 
distributors.  Therefore, the Company continues to maintain aggressive and 
creative marketing plans to attract new customers.  Many companies in the 
industry, including the Company, deliver home heating oil to a majority of 
their customers based upon weather conditions and historical consumption 
patterns without the customer having to make an affirmative purchase decision 
each time heating oil is needed.  In addition, most companies, including the 
Company, provide home heating equipment repair service up to 24 hours per 
day, which tends to build customer loyalty.

                                     5

<PAGE>

In all of its heating oil geographic markets, the Company competes for 
customers with suppliers of alternate energy products, principally natural 
gas and electricity.  Over the past five years, the conversion of the 
Company's customers from heating oil to other sources, primarily natural gas, 
has averaged approximately 1% per annum of the homes served by the Company.  
This rate of conversion is largely a function of the cost of replacing an 
oil-fired heating system with one that uses natural gas and the relative 
retail prices of heating oil and natural gas.  

In the vast majority of cases involving commercial accounts, the customer has 
the capability of using oil or gas with their dual-fuel burners.  Therefore, 
competition with gas companies exist, and combined with environmental 
concerns related to underground storage tanks, commercial heating oil sales 
are highly competitive.

The retail motor fuel industry is highly competitive.  The number and type of 
competitors vary by location.  The Company operated stations presently 
compete with dealers supplied by major refiners and marketers, independent 
gasoline service stations operators and convenience stores with gasoline 
operations.

The Company's wholesale/commercial motor fuel operations compete with 
refiners and other motor fuel distributors.  Key competitive factors include, 
among others, location, pricing, brand image, ease of access, hours of 
operation, cleanliness, product promotions and marketing.

Suppliers.  The Company's petroleum products are available from numerous 
sources, including integrated international oil companies, independent 
refiners and independent wholesalers.  

The Company generally purchases a majority of its heating oil requirements 
under contracts with major oil companies and independent suppliers.  These 
supply contracts do not fix the purchase price; rather, the price is 
determined daily. The Company seeks to minimize its exposure to oil price 
decreases by maintaining very low inventories of heating oil and motor fuel, 
and through buying most heating oil and motor fuel at current market prices.  
The Company purchases the remainder of its requirements from other major oil 
companies and independent suppliers on the spot market at current market 
prices.  The Company believes its policy of contracting supply needs is 
sufficient to meet sales volume requirements.

The Company has entered into distributor franchise agreements with Mobil, 
Texaco, Citgo, Conoco and Chevron, and has a supply agreement with an Exxon 
franchise distributor for one station.  The distributor franchise agreements 
with Mobil, Texaco, Citgo, Conoco and Chevron also permit the Company to 
resell motor fuel to dealers under the refiner's brand name.  The Company 
purchases most of its motor fuel under these contracts with major refiners.  
These 

                                       6

<PAGE>

contracts do not fix the purchase price; rather, the price is determined 
daily. The contracts generally specify minimum and maximum purchase 
requirements. Although the Company is not required to purchase the minimum 
amounts, if the minimum requirements are not met, the suppliers generally may 
terminate the contracts. Motor fuel is purchased on the spot market for the 
11 unbranded dealer stations and the  delivered motor fuel business.  There 
are no supply agreements for these stations or delivered motor fuel customers.

Employees.  As of June 30, 1997, the Company employed 1,047 persons, of whom 
272 were employed directly by the Company, 321 by King, and 454 by Shore 
Stop. Approximately 40 additional employees are hired by the Company during 
the heating season.  The Company's employees are not represented by any 
union. Management believes its relationship with its employees is excellent.

Regulation; Environmental.  The industry is subject to extensive 
environmental regulations, particularly laws regulating underground petroleum 
storage tanks ("USTs").  Federal, state and local regulatory authorities 
adopted regulations governing USTs, a portion of which are being phased in 
over a period extending to December 1998.  Approximately 70% of the Company 
operated stations are already in compliance.  The Clean Air Act dictates that 
gasoline sold in the nation's nine smoggiest cities have been blended, or 
reformulated to reduce pollutants by January 1995.  Kent, New Castle and 
Sussex Counties in Delaware, Maryland and Northern Virginia are required or 
have elected to adhere to these new standards. 

1988 Underground Storage Tank Regulations.  The U.S. Environmental Protection 
Agency's ("EPA") underground storage tank ("UST") regulations (40 C.F.R. Part 
280) established standards for new and existing UST systems to prevent, 
detect and clean up releases from these systems.

New UST systems are those that are installed after December 1988.  These 
systems must meet specified performance standards relating to:  (i) proper 
installation and certification thereof; (ii) spill and overfill protection 
devices; and (iii) protection of tanks and piping from corrosion.  In 
addition, new UST systems must use an approved method of release detection 
for tanks and piping.  

Existing UST systems are those installed before December 1988.  These systems 
must  have had release detection devices installed by December 1993.  By 
December 1998 (10 years after the UST regulations became effective), all 
existing UST systems must either:  (i) meet new UST performance standards; 
(ii) be upgraded in accordance with specified requirements for corrosion 
protection and spill and overflow protection devices; or (iii) cease 
operations and be closed using specified procedures.

                                        7

<PAGE>

The Company already meets the 1998 standards for corrosion protection and 
requirements for the installation of spill and overfill devices at 63 of the 
91 Company operated stations. The per location cost of upgrades is between 
$75,000 and $175,000, while closure costs typically range from $25,000 to 
$75,000 per location.  Management, therefore, does not believe that these 
capital expenditures will materially affect the Company's Operations.

In addition, the Company is subject to regulatory requirements to clean up 
releases when they occur, properly close USTs to prevent future releases, 
maintain evidence of financial responsibility for taking corrective action 
and for compensating third parties for bodily injury and property damage 
resulting from releases, and maintain appropriate records.  The states in 
which the Company operates also have adopted UST regulatory programs.  EPA 
has approved Maryland's tank program and has proposed approval of Delaware's 
program.  Once approved, the State's UST rules substitute for the federal 
program.

In the ordinary course of business, the Company maintains a program to 
routinely detect releases of gasoline or other regulated substances from USTs 
it owns or operates.  The Company employs groundwater monitoring wells and/or 
sophisticated in-tank monitoring devices at a majority of its Company 
operated stations and this information is available on-line at the Company's  
headquarters.  

As part of its UST management program, the Company is involved in 
environmental assessment and remediation activities with respect to releases 
of regulated substances from its existing and previously owned UST systems.  
Due to the nature of UST releases, the actual payments for assessment and 
remediation activities may vary significantly from year to year.

Stage II Vapor Recovery.  The Clean Air Act of 1990 requires the Company to 
comply with the regulations promulgated by the EPA and state governments for 
Stage II.  The Company has a program to install the equipment necessary to 
comply with these regulations, which is designed to capture emissions that 
escape from a vehicle's fuel tank during refueling.  Delaware and Maryland 
are phasing in compliance under their Stage II regulations based on average 
throughput, with the higher volume locations complying first.  As of June 30, 
1997 the Company is in compliance with the state of Delaware and the state of 
Maryland regulations.

Environmental Assessment.  The Company is subject to extensive and changing 
federal, state and local environmental laws and regulations, including those 
relating to the use, handling, storage, discharge and disposal of hazardous 
substances and the remediation of environmental contamination and, as a 
result, is from time to time involved in administrative and judicial 
proceedings and inquiries relating to environmental matters.

                                     8

<PAGE>

During 1996, expenditures in connection with the Company's compliance with 
federal, state and local environmental laws and regulations did not have a 
material adverse effect on the Company's earnings or competitive position.

Management believes that the environmental reserve is sufficient to cover all 
known liabilities under which it is probable that the Company will be 
obligated to undertake remediation.  Management's assessment of the 
environmental liability is based, in part, on two comprehensive environmental 
studies conducted on different segments of the Company's business by 
independent environmental consultants that were completed during fiscal year 
1995 and fiscal year 1996.  Management is not aware of any additional 
significant environmental exposures since the completion of these studies.

The Company maintains a program to routinely detect releases of gasoline or 
other regulated substances from underground storage tanks it owns or 
operates. The Company employs groundwater monitoring wells and/or 
sophisticated in-tank monitoring devices at a majority of its Company 
operated stations and this information is available on-line through the 
computer at the Company's headquarters.  Management believes that contingent 
liabilities other than those recorded in the financial statements will not 
have a material adverse effect on the Company's financial position or results 
of operations. 

Reformulated Gasoline.  On December 15, 1993, the EPA finalized regulations 
to implement the reformulated gasoline ("RFG") program mandated by Section 
211 (k) of the Clean Air Act.  RFG is a gasoline that is manufactured to 
reduce ozone-forming emissions when burned in motor vehicles.

Under the RFG program, which began on January 1, 1995, only RFG may be sold 
at retail gasoline outlets in the nation's worst ozone non-attainment areas 
and in ozone non-attainment areas of states that choose to comply with the 
provisions of the RFG program.  The parts of the country in which RFG must be 
sold are called "covered areas."  Kent, New Castle and Sussex Counties in 
Delaware, Maryland and Northern Virginia are covered areas.  The RFG program 
also requires that the gasoline produced by a refiner to be sold in areas 
that are not covered areas ("conventional areas") must not result in higher 
emissions than the refiner's 1990 gasoline.

The RFG program has a strong enforcement component and establishes a 
presumption of liability for all parties in the gasoline distribution system 
"upstream" from a location at which a violation of the mandates of the 
program occurred.  Thus, if a violation is found at a retail outlet, the 
owner of the retail outlet as well as all suppliers of that retail outlet are 
presumed liable for the violation.  This presumption is rebuttable under the 
RFG program.  For gasoline retailers, this presumption may be overcome by 
showing that the retailer or its employees or agents did not cause the

                                      9

<PAGE>

violation, that gasoline product transfer documents certifying all of the 
gasoline found at the outlet are in the possession of the owner, and that the 
owner has conducted a quality assurance sampling and testing program.  A 
violation of the mandates of the RFG program is punishable by a fine of up to 
$25,000 per day of violation.

Company operated stations and dealer stations are located in both covered and 
conventional areas.  As a result, the Company has implemented quality 
assurance and record-keeping programs to assure that it will be able to rebut 
the presumption of liability if a violation is found at one of its outlets or 
at a dealer outlet.  These programs require a modest amount of capital 
expenditure and must be continued for as long as the RFG program is in 
effect.  Management believes that the Company's potential liability for 
violations of the RFG program is not material in the aggregate to the 
Company's consolidated financial position or results of operations.

The Petroleum Marketing Practices Act.  The Petroleum Marketing Practices Act 
("PMPA"), as amended, is a federal law that prohibits a franchiser engaged in 
the sale, consignment or distribution of refiner-branded motor fuel from 
terminating or failing to renew a "franchise" or "franchise relationship," 
except on specified grounds and only after compliance with the statute's 
notification provisions.  PMPA expressly pre-preempts state law concerning 
the termination, nonrenewal and notice thereof with respect to gasoline 
marketing franchises.  PMPA is enforced judicially through cases interpreting 
the statute.

The Company is a franchiser under the PMPA because it distributes and sells 
motor fuel under refiners' trademarks, including pursuant to licensing 
arrangements.  Thus, the Company is subject to PMPA's termination, nonrenewal 
and notice requirements in each of its individual contracts with its retail 
dealers.  At the same time, the Company is entitled to PMPA's protections in 
each of its agreements with its branded suppliers.

Item 2.  Properties and Facilities

Griffith's and Frederick Terminal Inc.'s principal office is located at 2510 
Schuster Drive, Cheverly, Maryland 20781, and includes corporate offices and 
a garage.  The building has approximately 17,138 square feet.  The lease for 
this facility expires on June 30, 2001, with two 5-year options to renew.

On June 2, 1997, the Company entered into a lease to rent an additional 4,632 
square feet of office space. The lease for this facility expires on July 31, 
2001, with one 5-year option to renew.

                                     10

<PAGE>

King's principal office is located at 2336 Goddard Parkway, Salisbury, MD. 
The building has approximately 9,000 square feet. The lease for this facility 
expires on July 31, 2002, with an option to renew in 3 years, and another 2 
year option after that.  

At June 30, 1997, the Company occupied six additional office facilities.  The 
Company also owns and/or operates 53 gasoline stations in Delaware, 3  
stations in West Virginia, 26 stations in Maryland, and 9 stations in 
Virginia, of which 84 include convenience stores.  The stations' convenience 
stores have a standard square footage sales area ranging from 1,000 to 2,500 
square feet and storage sales areas capacity of 30,000 to 50,000 gallons.

The Company has eight bulk storage facilities serving all operating 
locations; some are at office locations.  Three of the bulk storage plants 
are leased and the remaining five are owned.  The Company feels that the 
storage capacity is adequate for serving customers.

Item 3.  Legal Proceedings

The Company from time to time is involved in various legal proceedings 
arising from the ordinary course of its business operations, such as personal 
injury claims, employment matters and contractual disputes.  Management 
believes that the Company's potential liability with respect to proceedings 
currently pending is either covered by insurance or is not material in the 
aggregate to the Company's consolidated financial position or results of 
operations.

Item 4.  Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during the 
fourth quarter of 1997.

                                  11

<PAGE>

                                       PART II

Item 5.  Market for Common Stock

Not applicable.

Item 6.  Selected Financial Data

The following selected financial data as of, and for the years ended June 30, 
1997 and 1996 and for the periods December 16, 1994 through June 30, 1995 and 
July 1, 1994 through December 15, 1994 and the years ended June 30, 1994, and 
1993 is derived from the audited financial statements of the Company. Because 
of certain purchase price allocation in connection with the Acquisition, the 
selected financial data after December 16, 1994 is not directly comparable to 
the selected financial data prior to December 16, 1994. The data should be 
read in connection with the Company's financial statements and related notes 
and other financial information included elsewhere in this Form 10-K report.

                    GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
                                RESULTS OF OPERATIONS
                                    (in thousands)

<TABLE>
<CAPTION>

                                                       12/16/94-     7/1/94-
                               1997          1996       6/30/95     12/15/94      1994            1993
                               ----          ----      ---------    ---------     ----            ----
<S>                            <C>           <C>       <C>          <C>           <C>             <C>
Net sales                    $277,117      $198,017     $104,115     $74,376     $176,938      $146,711
Cost of sales                 222,278       154,158       80,505      59,739      134,223       118,971
                             --------      --------     --------     -------     --------      --------
Gross profit                   54,839        43,859       23,610      14,637       42,715        27,740

Selling, general & 
 administrative expenses       42,385        29,033       15,359      12,867       28,385        19,693
Amortization &
  depreciation                 13,761        11,189        6,108       3,318        7,315         5,014
Interest                       10,711         9,398        5,054       1,239        2,526         1,795
Other income                    1,920           668          851         200          565           410
                             --------      --------     --------     -------     --------      --------
Income (loss) before
  income taxes                (10,098)       (5,093)      (2,060)     (2,587)       5,054         1,648

Income tax (expense)
  benefit                       3,650         1,428          592       1,004       (1,971)         (647)
                             --------      --------     --------     -------     --------      --------
Net Income (loss)             ($6,448)      ($3,665)     ($1,468)    ($1,583)      $3,083        $1,001
                             --------      --------     --------     -------     --------      --------
                             --------      --------     --------     -------     --------      --------
Earnings (Loss) per Share(1)     (2)           (2)          (2)         (2)         $1.31         $0.43
</TABLE>

                                             12

<PAGE>

(1) Per share calculations have been made with the following for each period.

                        Average Shares of
                        Outstanding Common
Fiscal                        Stock
------                  ------------------
1997                          1000
1996                          1000
12/16/94-6/30/95              1000
7/1/94- 12/15/94           2,360,000
1994                       2,360,000
1993                       2,355,000

(2) The earnings(loss) per share for 1997, 1996 and for the period 
    12/16/94-6/30/95 are not comparable to the earlier years and period due to
    the 1994 Acquisition. In addition, the earnings (loss) per share for the
    period 12/16/94-6/30/95 is not comparable to the earlier years and to the
    period 7/1/94-12/15/94 due to the seasonality of the Company's business The
    earnings (loss) per share for 1997, 1996, and the period 12/16/94-6/30/95, 
    and 7/1/94-12/15/94  is  $(6,448), $(3,665), $(1,468), and $(.67), 
    respectively.

                        GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
                                       BALANCE SHEET
                                       (in thousands)

<TABLE>
<CAPTION>

                                1997       1996        1995     1994       1993
                                ----       ----        ----     ----       ----
<S>                             <C>        <C>         <C>      <C>        <C>

Current assets                  $23,132    $17,711     $15,287   $14,753   $12,820

Current liabilities              22,563     18,126      15,895    18,263    16,809
                               --------   --------    --------   -------  --------
Working capital (deficit)           569       (415)       (608)   (3,510)   (3,989)
Total assets                    125,277    108,570     115,176    51,676    51,700

Long-term debt and capital 
lease obligations                85,107     65,351      68,614    24,740    29,813

Total liabilities               116,166     93,012      95,952    43,841    46,948

Shareholders' equity              9,111     15,558      19,224     7,835     4,752
</TABLE>

Item 7.  Management's Discussion and Analysis

Overview

Except for historical information, statements in this Management's Discussion 
and Analysis of Financial Condition and Results of Operations are 
forward-looking. In analyzing the results of the Company's operations, 
consideration should be given to the seasonal nature of the heating oil 
business and prevailing weather conditions, growth by acquisition, world oil 
market conditions and the ability to pass on variations in wholesale 
petroleum costs to customers.  Financial results may vary from year-to-year 
as a result of these factors. The Company undertakes no obligation and

                                     13

<PAGE>

does not intend to update, revise or otherwise publicly release the result of 
any revisions to these forward-looking statements that may be made to reflect 
future events or circumstances.

The Company's heating oil business is highly seasonal with approximately 83% 
of current fiscal year sales made in the quarters ending December and March.  
Sales from the Company's motor fuel operations are more evenly spread 
throughout the year with some seasonal increases in the summer months.  Also, 
the Company's heating oil sales fluctuate depending upon weather conditions.  
In 1997, warmer than normal winter temperatures significantly decreased 
heating oil volume from the previous year.

The Company will attempt to increase its sales volume in both heating oil and 
motor fuels.  Although the customer base for heating oil is declining 
industry-wide, the Company is working to increase sales by attracting new 
customers to offset the customers lost through attrition and seeking to 
acquire other petroleum distributors.

In a market of declining wholesale product costs, retail selling prices tend 
to decline, but not as quickly as wholesale product costs, thereby allowing 
the Company to increase gross margins during this type of market.  In a 
market of increasing wholesale product costs, the Company raises its selling 
prices to protect profit margins, but may have lower margins in this market 
condition because retail selling prices tend to increase at a slower rate 
than wholesale product costs.

The Company's motor fuel sales are subject to greater profit margin 
fluctuations due to changes in wholesale prices and competition with major 
oil companies. Because the major oil companies have their own refineries and 
deal in very substantial volumes, the product cost of their direct station 
may be lower than the Company's, resulting in a correspondingly lower sales 
price with which the Company must compete.  This, in turn, causes a 
fluctuation in the Company's gross profit on gasoline and diesel sales.

The Company's operations generate substantial amounts of cash flow relative 
to net income, principally because of depreciation of fixed assets and 
amortization of customer and service accounts, and goodwill.


                                   14

<PAGE>

The following discussion and analysis of the Company's financial condition 
and results of operations covers the period ending June 30, 1997.

Results of Operations.
    Fiscal 1997 vs. Fiscal 1996

The following discussion and analysis of the Company's financial condition 
and results of operations covers the year ended June 30, 1997.

Net loss for 1997 was $6,448,000 compared to net loss of $3,665,000 for 1996. 
Net loss from the existing operations of Griffith and Carl King, Inc. ("Carl 
King") was $5,446,000, an increased loss of $1,781,000.  The 1997 net loss 
from Shore Stop was $1,002,000.

Total sales was $277,117,000 for 1997, compared to $198,017,000 for 1996.  
Total sales from the existing operations of Griffith and Carl King decreased 
$2,755,000, or 1%, to $195,262,000 from 1996.  Total gallons of all petroleum 
products increased by 11%.  Total gallons of all petroleum products from the 
existing operations of Griffith and Carl King decreased by 10%.  Heating fuel 
volume decreased by 30% as a result of two factors. One factor was the warm 
weather  which was 16.3% warmer than last year and 5.1% warmer than normal.  
The second reason was that during several weeks in fiscal 1996, commercial 
natural gas customers switched to oil because of interruptions in their 
natural gas supply, while during 1997 the gas interruptions were minimal.  
Motor fuel volume increased by 34%.  Motor fuel volume from the existing 
operations of Griffith and Carl King increased by 1%. 

Cost of sales for 1997 was $222,278,000 compared to $154,158,000 for 1996.  
Cost of sales from the existing operations of Griffith and Carl King 
increased to $155,737,000, or 1%, from 1996.  This increase is primarily 
attributable to a 13% increase in the average wholesale cost of all petroleum 
products purchased. The cost of sales from Shore Stop Operations was 
$66,541,000.
  
Gross profit for 1997 was $54,839,000 compared to $43,860,000 for 1996.  
Gross profit from the existing operations of Griffith and Carl King was 
$39,525,000, a decrease of $4,335,000, or 10% from 1996.  The gross profit 
decrease was primarily due to the decrease in gallons of heating fuel sold.  
Gross profit from Shore Stop Operations was $15,314,000.

Selling, general and administrative ("SG&A") expenses for 1997 were 
$42,385,000, compared to $29,033,000 for 1996. The increase was due primarily 
to operating costs of $13,646,000 related to the Shore Stop Operations. SG&A  
expenses from the existing operations of Griffith and Carl King were 
$28,739,000, a decrease of $294,000, or 1%, from 1996. The decease is 
attributable to lower operating costs

                                     15

<PAGE>

associated with the decease in heating oil volume in 1997 from 1996.

Depreciation and amortization expenses for 1997 were $13,761,000, compared to 
$11,189,000 for 1996. The increase was due primarily to depreciation and 
amortization related to the Shore Stop Acquisition. Depreciation and 
amortization expenses from the existing operations of Griffith and Carl King 
were $11,242,000, an increase of $53,000, or .5%, from 1996.    

Interest expense for 1997 was $10,711,000, compared to $9,398,000 for 1996. 
Interest expense from the existing operations of Griffith and Carl King was 
$8,676,000, a decrease of $722,000, or 8%, from 1996. The decrease in 
interest expense was primarily due to the decrease in outstanding debt 
because of principal payments. Interest expense related to additional debt 
incurred in connection with the Shore Stop Acquisition was $2,035,000.

Other income for 1997 was $1,920,000, compared to $668,000 for 1996.  This 
increase is primarily related to other income of $1,064,000 from Shore Stop 
operations as well as an increase in customer finance charges and interest 
income from the existing operations of Griffith and Carl King. 

    Fiscal 1996 vs. Fiscal 1995

The following discussion and analysis of the Company's financial condition 
and results of operations covers the year ending June 30,1996.

Net loss for 1996 was $3,665,000 compared to net income of $3,051,000 for 
1995.

Total sales increased $19,526,000, or 11%, to $198,017,000 from 1995.  Total 
gallons of all petroleum products decreased by 8% primarily as a result of 
heating oil volume increasing by 30%, which increase was caused by two 
factors. One was the cold weather which was 26.3% colder than last year and 
13.4% colder than normal.  The second reason was that for several weeks in 
fiscal 1996, commercial natural gas customers switched to oil because of 
interruptions in their natural gas supply, while during 1995 the gas 
interruptions were minimal. Motor fuel volume decreased by 1%.  

Cost of sales increased to $154,158,000, an increase of $13,914,000, or 10% 
from 1995.  This can be attributed to the increase in the number of gallons 
of heating fuel sold and a 1% increase in the average wholesale cost of all 
petroleum products purchased.

                                       16

<PAGE>

Gross profit for 1996 was $43,860,000; an increase of $5,612,000, or 15%, 
from 1995.  The gross profit increase was primarily due to the increase in 
gallons of heating fuel sold.

Selling, general and administrative expenses for 1996 were $29,033,000, an 
increase of $807,000, or 3%, from 1995.  This increase was primarily 
attributable to the higher expenses as a result of increased petroleum sales 
due to colder weather offset, in part, by reductions of administrative 
expenses attributable to continued consolidations of operations and general 
cost savings.

Depreciation and amortization expenses were $11,189,000, an increase of 
$1,763,000, or 19%, from 1995.  The increase was primarily attributable to 
the additional depreciation and amortization on the fixed assets and 
intangible assets resulting from purchase accounting adjustments in 
connection with the Acquisition.

Interest expense increased by $3,104,000, or 49%, to $9,398,000 from 1995.  
This increase resulted primarily from additional indebtedness incurred in 
connection with the Acquisition.

Other income for 1996 was $668,000, a decrease of $382,000, or 36%, from 
1995. The decrease results from decreased interest income, partially offset 
by an increase in the gain on the sale of fixed assets.

    Fiscal 1995 vs. Fiscal 1994

Net loss for 1995 was $3,051,000 compared to net income of $3,083,000 for 
1994.

Total sales increased $1,553,000, or 1%, to $178,491,000 from 1994.  Total 
gallons of all petroleum products decreased by 5%.  Heating fuel volume 
decreased by 25% as a result of two factors.  One was the warm weather, which 
was 16% warmer than last year and 10.2% warmer than normal.  The second 
reason was that for several weeks in fiscal 1994, commercial natural gas 
customers switched to oil because of interruptions in their natural gas 
supply, while during 1995 the gas interruptions were minimal.  Motor fuel 
volume rose by 7% primarily due to aggressive marketing used to acquire 
additional contracts to supply independent gasoline stations.

Cost of sales increased to $140,244,000, an increase of $6,022,000, or 4% 
from 1994.  This can be attributed to the fact that on a per gallon basis, 
the average wholesale cost of all petroleum products purchased increased by 6 
cents per gallon, or 9%.  The cost per gallon increase was offset partially 
by a 5% decrease in the number of gallons sold.

                                    17

<PAGE>

Gross profit for 1995 was $38,248,000, a decrease of $4,468,000, or 10%, from 
1994.  The gross profit decrease was primarily due to the decrease in gallons 
of petroleum products sold and the higher average wholesale cost of sales per 
gallon.

Selling, general and administrative expenses for 1995 were $28,225,000, a 
decrease of $160,000, or less than 1%, from 1994.  This decrease was 
primarily attributable to the lower operating expenses as a result of 
decreased petroleum sales due to warmer weather offset, in part, by 
additional operating expenses related to new company operated stations and 
increases in insurance expenses.

Depreciation and amortization expenses were $9,426,000, an increase of 
$2,111,000, or 29%, from 1994.  Most of the increase is related to the 
additional amortization on the intangible assets resulting from purchase 
accounting adjustments in connection with the Acquisition.

Interest expense increased by $3,768,000, or 149%, to $6,294,000 from 1994. 
This increase resulted primarily from additional indebtedness incurred in 
connection with the Acquisition and higher interest rates.

Other income for 1995 was $1,050,000, an increase of $486,000, or 86%, from 
1994.  The increase results from increased interest income and gains on the 
sale of fixed assets.

Financial Condition.
    Fiscal 1997 vs. Fiscal 1996

Substantially all of the line items of the financial statements have 
increased from June 30, 1996 because of the Shore Stop Acquisition.  The 
following discussion will focus on increases or decreases in balance sheet 
line items unrelated to the Shore Stop Acquisition and items which require 
additional explanation.

Accounts and notes receivable were $11,183,000 in 1997, compared to 
$11,813,000 in 1996.  Accounts and notes receivable from Griffith and Carl 
King decreased by 11%, or $1,246,000, to $10,567,000.  The decrease was 
primarily due to the decreased sales volume in 1997.

Refundable income taxes increased $169,000 from a payable of $73,000 to a 
refund due of $96,000 due to the income tax benefit related to the loss for 
1997.

                                    18

<PAGE>

Other taxes receivable increased $906,000 primarily due to a change in state 
motor vehicle licenses which requires the company to pay Maryland motor fuel 
taxes when importing fuel into the state and apply for refunds, which take 
two to three  months to receive, when exporting fuel out of the State and 
also an increase in federal excise taxes receivable. Short term deferred tax 
asset increased due certain temporary tax differences for warranty accrual, 
deferred revenue, and other balance sheet items. 

Property, plant and equipment before depreciation increased by $11,104,000, 
or 47%. The Company acquired $6,238,000 of fixed assets through acquisitions, 
including the acquisition of Shore Stop. The additional increase was due to 
capital expenditures made to comply with Stage II Vapor Recovery regulations 
at some of the company-operated stations, investments in new dealer supply 
contracts, and the purchase of, and major repairs to tank trucks, service 
vans and other vehicles to provide service to customers. 

Net intangibles was $73,962,000 in 1997, compared to $68,533,000 in 1996.  
Net intangibles from Griffith and Carl King decreased 9%, or $5,878,000, to 
$62,655,000.  The decrease is primarily due to the amortization of the 
intangibles. Net intangibles for Shore Stop was  $11,307,000.

Deferred debt costs and other increased $320,000 from $3,760,000 to 
$4,080,000 as a result of the capitalization of the finance costs and other 
costs incurred in connection with financing the Shore Stop Acquisition.  Such 
increase was partially offset by the amortization of such finance costs and 
other finance costs capitalized in connection with the 1994 Acquisition.

Accounts payable increased $1,128,000 to $8,709,000 in 1997.  Accounts 
payable from Griffith and Carl King decreased by $2,312,000, or 31%, to 
$5,270,000.  The decrease was primarily due to the  timing of vendor payments 
at the end of 1997. 

Deferred revenue increased primarily as a result of payments received from 
major oil companies in exchange for rebranding some of the company-operated 
stations.
 
Long term debt increased $19,756,000 to $85,107,000, primarily as a result of 
the debt incurred in connection with the Shore Stop Acquisition, partially 
offset by principal repayments.

Deferred income taxes decreased $2,111,000, or 26%, from $7,994,000 to 
$5,883,000 because of the amortization of intangible assets relating to the 
Acquisition and changes in other temporary differences. 

Liquidity and Capital Resources.

                                     19

<PAGE>

The Company's cash requirements consist principally of working capital, 
payments of principal and interest on its outstanding indebtedness, capital 
expenditures and expenditures for acquisitions.  

The Company believes that cash flow from operating activities, cash on hand 
and periodic borrowings, if necessary, will be adequate to meet its operating 
cash requirements for the foreseeable future.  In addition to its existing 
working capital facilities, the Company may enter into additional financing 
facilities to fund future acquisitions and for other purposes, to the extent 
such facilities are permitted under the terms of the Indenture (the 
"Indenture") governing the Company's 14 1/2% Senior Subordinated Notes due 
December 15, 2004 (the "Notes") and the Company's existing credit agreement. 

The Company's operations generate substantial amounts of cash flow relative 
to net income, principally because of depreciation of fixed assets and 
amortization of customer and service accounts, and other intangibles obtained 
in acquisitions.  During 1997, 1996, and 1995, net cash provided by operating 
activities was $6.6 million, $5.6 million, and $.4 million, respectively.  
Cash flow from operating activities in 1997 increased by $.8 million. Net 
cash provided by operating activities from existing operations of Griffith 
and Carl King decreased by $2.6 million . Such decrease was primarily the 
result of a decrease in net income, after adjusting for non-cash expenses, 
from the existing operations of Griffith and Carl King plus a net increase in 
 operating assets and liabilities, in 1997 from 1996. Net cash provided by 
operating activities from Shore Stop was $3.2 million.  Cash flow from 
operating activities in 1996 increased by $5.2 million as compared to 1995 
due to colder winter weather.   

During 1997, 1996, and 1995, net cash used in investing activities was $26 
million, $1.6 million, and $62.3 million,  respectively.  Net cash used in 
investing activities increased by $24.4 million in 1997  primarily as a 
result of the Shore Stop Acquisition. Net cash used in investing activities 
decreased $60.7 million in 1996 from 1995 primarily as a result of the 1994 
Acquisition.   

During 1997, 1996, and 1995, net cash provided by(used in) financing 
activities $20.8 million, $(3.1) million, and $60 million,  respectively.  
Net cash provided by financing activities increased by $23.9 million in 1997  
primarily as a result of the increased debt incurred in connection with the 
Shore Stop Acquisition. Net cash provided by financing activities decreased 
$63.1 million in 1996 from 1995 primarily as a result of the additional debt 
incurred in connection with the 1994 Acquisition.

                                      20

<PAGE>

As of July 8, 1996, in connection with the Shore Stop Acquisition, the Company
amended and restated its then existing credit agreement (the "Prior Credit
Agreement"; and as amended and restated, the "Credit Agreement") to, among other
things, increase the amount of revolving credit facility borrowings (including
the maximum drawing amount under outstanding Letters of Credit (as defined)
available thereunder) from $12,000,000 to $13,000,000 and the term loan
thereunder from $34,450,000 to $54,450,000.  The Credit Agreement was
subsequently amended by an amendment dated as of December 31, 1996 to, among
other things, increase the amount of the revolving credit facility provided
thereunder from $13,000,000 to $16,000,000 during the period from February 12,
1997 through March 31, 1997 and to revise certain financial covenants contained
therein.  In addition, the Credit Agreement and the Indenture were amended as of
March 15, 1997 to revise certain financial covenants contained therein.  The
Company is currently in compliance with the covenants contained in the Credit
Agreement and Indenture, as amended.

On August 29, 1997, The Company amended and restated the Credit Agreement to
increase the amount of term borrowings outstanding thereunder from $49,850,000
to $50,100,000. The amendment modified the term loan's repayment schedule and
revised certain financial covenants contained therein. The Company believes 
that it will be able to comply with all covenants in place during fiscal year 
1998. Due to the seasonal nature of the heating oil business, the potential 
impact of warmer than normal winter temperatures and prevailing market 
conditions, actual financial results could differ from those originally 
anticipated.

Under the Credit Agreement, at the Company's request, the agent for the lenders
from time to time issues letters of credit (the "Letters of Credit").  During
the period from July 1, 1996 through June 30, 1997, the Company's peak total
usage of the revolving credit facility was approximately $8.0 million in
outstanding borrowings and $4.9 million in maximum drawing amount under Letters
of Credit.  At June 30, 1997, there was $6.4 million in borrowings and $3.6
million in Letters of Credit outstanding with respect to the revolving credit
facility, leaving, subject to meeting certain borrowing base tests, $3,000,000
available for use thereunder.  The revolving portion of the Credit Agreement
expires in 1999 and the Company may be required to replace the revolving portion
at such time. At September 26, 1997, there was $2.2 million in borrowings and 
$3.2 million in letters of credit outstanding.

The Company believes that cash flow provided by operations, supplemented by
external long-term borrowings, will provide sufficient funds to meet the
Company's liquidity needs for current operations and internal growth and to
finance expansion through acquisitions. 

The Company purchases petroleum as necessary to meet the delivery demands of its
customers on a short-term basis.  Thus, the Company carries relatively small
amounts of petroleum in inventory.

Certain sections of this form 10-K, including "Notes to Consolidated Financial
Statements" and Management's Discussion and Analysis of Financial Condition and
Results of Operations," contain forward looking statements within the meaning of
Section 21E of the  

                                       21

<PAGE>

Securities Exchange Act of 1934, as amended, with respect to the Company's
expectations or beliefs concerning future events. The Company cautions that
these statements are further qualified by important factors that could cause
actual results to differ materially from those in the forward looking
statements. The forward looking statements include, without limitation, the
effects of seasonality on revenue and cost of goods sold, the amount of
reserves, the effect of contingent liabilities and the ability to meet the
Company's future operating cash requirements.

Item 8.  Financial Statements and Supplementary Data

See Page F-1.

Item 9.  Change in and Disagreements with Accountants on Accounting  
         and Financial Disclosure

None                                       
                             
                             PART III

Item 10. Directors and Executive Officers of the Company

The following table sets forth certain information regarding the Company's
Executive Officers and Directors of Griffith as of September 27, 1996:

         Name                Age       Position with the Company
         ----                ---       --------------------------

Howard B. Schlosberg          53       President, Director
Raymond R. McKenzie, Jr.      42       Chief Financial Officer,
                                       Vice President, Treasurer and Secretary
W. Randy Groft                36       Operations General Manager and Assistant
                                       Secretary
Todd R. Berman                40       Chairman of the Board
Barry Lassman                 56       Director, Consultant
Neil H. McLaurin, III         53       Director  
Walter J. Meighan             72       Director, Consultant
Michael S. Shein              33       Director, Vice President

Howard B. Schlosberg has served as President of the Company since October 1992
and a director since 1991.  He joined the Company in September 1990 and served
as Vice President responsible for retail marketing until August 1991 when he
became the Chief Operating Officer and Director in Charge of Operations.  From
1983 to 1989, he served as Vice President and General Manager for Acme Oil
Corporation in New Jersey.  He has 23 years of experience in retail petroleum
distribution and marketing.
 
                                       22

<PAGE>

Raymond R. McKenzie, Jr. has served as Chief Financial Officer, Treasurer and
Secretary of the  Company since March 1991 and as Vice President of the Company
since September 1996.  Mr. McKenzie joined the Company in November 1990 as the
Corporate Controller.  He has over 20 years of financial experience in both
public accounting with the big six and in the private corporate sector.  Most
recently, he served as Controller for The Milton Company in Tysons Corner,
Virginia from 1989 to 1990 and prior to that as a Senior Manager with Price
Waterhouse, Washington, D.C.

W. Randy Groft has served as Assistant Secretary of the Company since April
1990.  Mr. Groft joined the Company in September 1986 when the Company acquired
John R. Brown, Inc. where he served as Operations Manager.  Mr. Groft started
with John R. Brown in 1983, giving him a total of eleven years experience in the
industry.  He has served the Company in various capacities, most recently
appointed to Operations General Manager in March 1994.

Todd R. Berman has served as Chairman of the Board of Directors of the Company
since December 1994.  Mr. Berman is the President and founder of Chartwell
Investments Inc. ("Chartwell"), a merchant banking firm.  Prior to forming the
predecessor to Chartwell in 1992, Mr. Berman served as a Managing Director of
E.S. Jacobs & Company, an investment firm, from 1984 to 1992.  Previously, Mr.
Berman was a Vice President at Oppenheimer & Co., Inc. and an Associate at Allen
& Company Incorporated.  Mr. Berman is also a director, President and CEO of
GHI. Mr. Berman has served as a director of Petro Stopping Centers, L.P. since 
January 1997.

Barry Lassman has served as a Director of and consultant to the Company since
December 1994.  Mr. Lassman has been the Chief Operating Officer of Benzoline
Energy Company, a full service residential and commercial heating oil
distributor in Connecticut, since 1984.  Mr. Lassman is also the President of
BJL Holdings, L.L.C. ("BJL Holdings").  Prior to his employment with Benzoline,
Mr. Lassman was the Chief Operating Officer of MacArthur Petroleum, a New Jersey
based distributor of heating oil and gasoline, and Assistant to the President
and Vice President -- Finance of Consolidated Edison of New York, a major gas
and electric utility in New York.

Neil H. McLaurin, III has been a Director of the Company since December 1995. 
 Mr. McLaurin has been Chairman of the Board of Directors, and Chief 
Executive Officer of E-Z Serve Corporation (E-Z Serve), since October 1990. 
Mr. McLaurin was also president of E-Z Serve from October 1990 to March 1997. 
 E-Z Serve operates 706 convenience stores, 11 franchises, and distributes 
motor fuels through 189 non-company operated retail outlets in 20 states, 
predominantly in the Sunbelt.  From 1989 to 1990, Mr. McLaurin served as a 
consultant for L.B. Consulting Co., an investment company in Houston, Texas.
 
                                       23

<PAGE>

Walter J. Meighan has served as a Director of the Company and as a consultant to
the Company since December 1994.  Mr. Meighan has served as Chairman and a
Director of the Board of Directors of the Company since 1985, as President of
the Company from April 1988 to July 1990 and as Director of Acquisitions of the
Company from 1985-1988.  From 1979 until June 1985, Mr. Meighan served as
President of the predecessor of Griffith Consumers Company.  Mr. Meighan joined
such predecessor in 1962 serving in the following capacities:  Executive Vice
President, Vice President of Sales, General Sales Manager and Baltimore Division
Manager.

Michael S. Shein has served as a Director of the Company and Vice President of
the Company since December 1994.  Mr. Shein is a Managing Director and
co-founder of Chartwell.  Prior to joining the predecessor to Chartwell in 1992,
Mr. Shein served as a Senior Vice President, Vice President and Associate of
E.S. Jacobs & Company from 1988 to 1992.  Previously, Mr. Shein was employed by
Goldman, Sachs & Co., an investment banking firm, in the Mergers & Acquisition
Department.  Mr. Shein is also a director and Vice President, Treasurer and
Secretary of GHI. Mr. Shein has served as director of Petro Stopping Centers, 
L.P. since January 1997.

The directors of the Company are elected each year by the shareholder to serve
for a one or two year term and until their successors are elected and qualified.
GHI has agreed to vote all shares of Common Stock of the Company owned by it for
the election of Mr. Meighan to the Board of Directors of the Company.  See
"Certain Transactions."  The executive officers of the Company are elected by
the Board of Directors to serve at the discretion of the Board.

Members of the Board of Directors, other than Mr. Meighan and Mr. McLaurin, III,
do not receive directors fees, but are reimbursed by the Company for their
out-of-pocket expenses incurred in attending Board of Directors and committee
meetings.  Mr. Meighan and Mr. McLaurin,III receive an annual retainer of
$10,000 plus an additional $1,500 fee for each director's meeting attended.

Directors and Executive Officers of Carl King

The following table sets forth certain information regarding Carl King's
Executive Officers and Directors as of September 27, 1996:

         Name                Age       Position with Carl King
         ----                ---       -----------------------

Todd R. Berman                40       Chairman of the Board, Director
Gregory A. Stutzman           42       President
Howard B. Schlosberg          53       Vice President, Director
Michael S. Shein              33       Vice President, Director
Raymond R. McKenzie, Jr.      42       Vice President
Terrence P. Sullivan          39       Vice President
 
                                       24

<PAGE>

William L. Sanner             44       Vice President, Secretary
                                       and Treasurer
W. Randy Groft                36       Assistant Secretary

For information with respect to directors and officers of Carl King who serve as
directors or officers of the Company, see "Directors and Executive Officers of
the Company."  The following is a brief description of the business experience
for at least the past five years of the directors and officers of Carl King who
do not have a position with the Company:

Gregory A. Stutzman was named President of Shore Stop Corp. And Carl King, Inc.
in September 1996.  Prior to the Company's purchase of Shore Stop, he served as
Executive Vice President of Regent Investments, Inc. dba Shore Stop Food Stores.
He has been continuously employed with Shore Stop since June 1987.  Prior to
being named Executive Vice President in 1995, he served as Director of
Operations, Marketing Manager, and District Manager for Shore Stop.  Prior to
his employment with Shore Stop, he was employed with the Southland Corporation
in Hampton, Virginia. 

Terrence P. Sullivan has served as Vice President of Carl King, Inc. since
October 1995.  He joined the Company in October 1989.  Mr. Sullivan is
responsible for the contract dealer class of trade, commercial sales, supply and
distribution.  Prior to joining The Company, Mr. Sullivan held several marketing
and financial analyst positions for Mobil Oil Corporation.

William L. Sanner has served as Controller and Treasurer of Carl King since June
1987.  He has sixteen years of accounting, finance and budgeting experience with
Carl King, USAir Inc. and MCI Telecommunications Inc.

The directors of Carl King are elected each year by the shareholder of Carl King
to serve for a one-year term and until their successors are elected and
qualified.  The executive officers of Carl King are elected by the Board of
Directors of Carl King to serve at the discretion of the Board of Carl King.


Directors and Executive Directors of Frederick Terminals

     
                                       Position with            
Name                         Age       Frederick Terminals
----                         ---       -------------------

Todd R. Berman               40        Chairman of the Board, Director  
Howard B. Schlosberg         53        Director, President
 
                                       25

<PAGE>

Raymond R. McKenzie, Jr.     42        Director, Treasurer and Secretary
Michael S. Shein             33        Director, Vice President

See "Directors and Executive Officers of the Company" for a description of the
business experience of the executive officers and directors of Frederick
Terminals for the past five years.

The directors of Frederick Terminals are elected each year by the shareholder of
Frederick Terminals to serve for a one-year term and until their successors are
elected and qualified.  The executive officers of Frederick Terminals are
elected by the Board of Directors of Frederick Terminals to serve at the
discretion of the Board of Frederick Terminals.


Item 11.  Executive Compensation

Set forth below is the applicable compensation information for the Company's
President and the other most highly compensated executive officers whose annual
paid or payable aggregate cash and non-cash compensation exceeded $100,000 (the
"Named Executives") with respect to the fiscal year ended June 30, 1997.

                                       26

<PAGE>

<TABLE>
<CAPTION>
                                      Summary Compensation Table
                                                                          Long-Term Compensation
                                                                                  Awards
                      Fiscal Year   Annual Compensation(1)    All Other   Shares of GHI Underlying
Name                    June 30,    Salary       Bonus        Comp.(2)           Options (#)       
----                  -----------   ------       -----        ---------   ------------------------
<S>                   <C>          <C>          <C>           <C>         <C>

Howard B. Schlosberg      1997     $200,000     $ 5,000       $15,200       
President & Chief         1996      158,875      58,000        15,200            
Executive Officer         1995      155,000      47,500         9,500              20,400

Bruce W. King             1997      158,875       -0-           7,000
President -               1996      158,875      58,000        11,000         
    Carl King (3)         1995      155,000      47,500        10,500              20,400       
                                                                                              
Gregory A. Stutzman       1997     120,000       5,000         9,500               6,000
President - Shore Stop/   1996        N/A         N/A           N/A                 N/A
    Carl King             1995        N/A         N/A           N/A                 N/A

Raymond R.
    McKenzie, Jr.         1997      140,000       5,000        10,800       
Chief Financial           1996      128,125      52,000        10,800            
Officer, Vice President,  1995      125,000      43,750         8,500              10,200
Treasurer and Secretary

W.  Randy Groft           1997       95,000      5,000          8,300     
Assistant Secretary       1996       85,000     25,000          6,400               5,000     
                          1995        N/A         N/A            N/A   

Terrence P. Sullivan      1997       75,000     20,000          8,700                           
Vice President -          1996       75,000     45,000          6,400               5,000                    
Carl King (Only)          1995         N/A        N/A            N/A   

William L.  Sanner        1997       85,000      5,000          9,000  
Treasurer and Secretary   1996       75,000     25,000          6,400               5,000    
Carl King (Only)          1995         N/A        N/A            N/A   


(1) Compensation deferred at the election of executive includable in category and year earned.

(2) Other compensation consists of employer matching contribution to the 401(K) plan that are 100% 
    vested and automobile allowances.

(3)  Bruce King was no longer employed by the Company at June 30, 1997 
</TABLE>

                                       27

<PAGE>

The following table sets forth the "In-the-money" options for GHI common stock
at fiscal year-end with respect to each of the executive officers named in the
summary compensation table:

                                                 Fiscal Year-end Option Values

                                                      Number of Securities
                                                 Underlying Unexercised Option
                                                       at Fiscal Year-end
Name                                             (#) Exercisable/Unexercisable  
--------------------------------------------------------------------------------

Howard B. Schlosberg                                       13,600/6,800
--------------------------------------------------------------------------------

Gregory A. Stutzman                                           0/6,000
--------------------------------------------------------------------------------

Raymond R. McKenzie, Jr.                                    6,800/3,400
--------------------------------------------------------------------------------

W. Randolph Groft                                           1,666/3,334
--------------------------------------------------------------------------------

Terrence P. Sullivan                                        1,666/3,334
--------------------------------------------------------------------------------

William L. Sanner                                           1,666/3,334
--------------------------------------------------------------------------------

Neil H. McLaurin, III                                       2,000/2,000
--------------------------------------------------------------------------------

The following table sets forth option grants made with respect to shares of GHI,
the Company's parent, in 1997 with respect to each of the Executive Officers
named in the Summary Compensation Table.     
                                             
<TABLE>
<CAPTION>
                             OPTION GRANTS OF SHARES OF GHI IN 1997

                                                                                                Potential Realizable
                                                                                                Value at Assumed
                                                                                                Annual Rates of Stock
                                                                                                Price Appreciation for
                                Individual Grants                                               Option Term
----------------------------------------------------------------------------------------------------------------------

                                               Percent of total   Exercise
                        No. of shares          option granted     of Base
                        underlying             to employees in    Price  
Name                    option granted         fiscal year        ($/sh)     Expiration Date    5% ($)       10% ($)
----------------------------------------------------------------------------------------------------------------------
<S>                     <C>                    <C>                <C>        <C>                <C>          <C>
Gregory A. Stutzman     6,000                  100%               $30.00     September 14,      $113,201     $286,873
                                                                             2006
----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       28

<PAGE>

Employment Agreements

The Company has entered into employment agreements with Messrs. Schlosberg 
and McKenzie for a period of three and two years ending on December 15, 2000 
and December 15, 1999, respectively. Under the employment agreements the 
annual base salaries of Messrs. Schlosberg and McKenzie initially are 
$200,000, and $140,000, respectively, subject to an annual cost of living 
adjustment. They are also entitled to participate in any bonus plan approved 
by the Board of Directors of the Company. They are also entitled to any 
other benefits generally available to the senior management of the Company 
and the use of a company car. In addition, as described under "Incentive 
Equity Plan," GHI has established an incentive equity plan for senior 
management of the Company. Pursuant to their employment agreements, Messrs. 
Schlosberg and McKenzie received under the incentive equity plan options to 
purchase (at an exercise price per share of $16.4905) 1.5% and .75%, 
respectively, of GHI's common stock, on a fully diluted basis, as of the 
closing of the Acquisition. The Company has also entered into employment 
agreements with  Messrs. W. Randolph Groft, William Sanner, Terrence 
Sullivan, and Gregory Stutzman with annual base salaries of  $95,000, 
$85,000, $75,000, and $120,000, respectively, for three year periods ending 
between October 1998 and December 2000. If the Company terminates any of the 
employment agreements without cause or because the officer has been 
incapacitated for three consecutive months, then the terminated officer will 
be entitled to continue to receive his salary, plus certain benefits, for 
twelve months from the date of the notice of termination. The employment 
agreements contain certain customary non-solicitation and non-competition 
provisions upon termination of such agreements. The Company had entered into 
an employment contract with Bruce King which has been terminated.

The Company has also entered into employment agreements with Messrs. Berman 
and Shein for a period of five years commencing on December 15, 1994.  Under 
the employment agreements, Messrs. Berman and Shein will receive salaries of 
$50,000 each year during the term of the agreements plus any other benefits 
generally available to senior management of the Company.  If the Company 
terminates either of their employment agreements, then the terminated officer 
will be entitled to continue to receive his salary, plus certain benefits, 
for the balance of the term.

Incentive Equity Plans.

GHI has established nonqualified stock option plans to attract and retain key 
personnel, including senior management, and to enhance their interest in the 
Company's continued success.  

                                       29

<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and
         Management

The table below sets forth as of September 29, 1997 the number and percentage 
of outstanding shares of the Company's common stock, par value $.01 per share 
(the "Common Stock") beneficially owned by (i) each of the named executive 
officers of the Company; (ii) each director of the Company, Carl King and 
Frederick Terminals who owns Common Stock; (iii) all directors and executive 
officers of the Company, Carl King and Frederick Terminals as a group; and 
(iv) each person known by the Company to own beneficially more than five 
percent of the Common Stock.  The Company believes that each individual or 
entity named has sole investment and voting power with respect to shares of 
Common Stock indicated as beneficially owned by them, except as otherwise 
noted.

                   Name                    Shares Owned            % 
                   ----                    ------------           ---

    Griffith Holdings, Inc.............         1000              100
    2510 Schuster Drive
    Cheverly, MD 20781

King and Frederick Terminals are wholly owned Subsidiaries of the Company.

The following table sets forth as of June 30, 1997, the number and percentage 
of outstanding shares of the GHI common stock, par value $.01 per share, 
beneficially owned by (I) each of the named executive officers of the 
Company; (ii) each director of the Company, King, and Frederick Terminals; 
and (iii) all directors and executive officers of the Company, King, and 
Frederick Terminals as a group.  The Company believes that each individual or 
entity named has sole investment and voting power with respect to shares of 
GHI Common Stock indicated as beneficially owned by them, except as otherwise 
noted.

Name                                         Shares Owned             %
----                                         ------------             ---

Todd R. Berman(1).........................              -             -
Michael S. Shein(1).......................              -             -
Barry J. Lassman(2).......................         47,458             3.63
Howard B. Schlosberg(3)...................          3,032             *
Neil H. McLaurin, III (3).................          4,000             *
Raymond R. McKenzie, Jr.(3)...............          1,516             *
Walter J. Meighan.........................              -             -
All Directors and Officers as a Group(10)
                                                   56,006             4.28

------------

*        Less than one percent.
(1) Messrs. Berman and Shein are limited partners of Chartwell, L.P.,
    a Cayman Islands limited partnership, which is the general
    partner and a limited partner of Griffith Partners L.P. and holds
    approximately 63% of the partnership interests of Griffith
    Partners L.P. and, consequently, may be deemed to beneficially
    own all of the shares of GHI beneficially owned by Chartwell
    Partners L.P.  Griffith Partners L.P. beneficially holds 77.03%
    of the outstanding shares of GHI.
(2) BJL Holdings holds options to purchase 47,458 shares of the
    Common Stock of GHI, which options are immediately exercisable at
    a price per share equal to $16.4905.  Mr. Lassman, President of
    BJL Holdings,  may be deemed beneficially to own the shares owned
    by BJL Holdings.
(3) Messrs. Schlosberg, McLaurin, III and McKenzie hold options to
    purchase 20,400 shares, 4,000 shares and 10,200 shares,
    respectively, of GHI Common Stock exercisable within 60 days at a
    price per share equal to $16.4905.

                                       30

<PAGE>

Item 13.  Certain Relationships and Related Transactions


GHI, the Company and Carl King entered into a management consulting
agreement with Chartwell pursuant to which Chartwell will provide the
Company with certain management, advisory and consulting services for
a fee of $200,000 for each fiscal year of the Company during the term
of the agreement, with up to an additional $200,000 payable for each
of fiscal years 1996 through 2000, provided that certain financial
goals are achieved, plus reimbursement of certain expenses.  The term
of the management consulting agreement is five years commencing on
December 15, 1994, with one additional five year renewal term.  Mr.
Berman and Mr. Shein are founders and officers of Chartwell.


                                  PART IV

Item 14.  Exhibits, Financial Statements, Schedules and Reports on
Form 8-K

(a)  Documents filed as part of this report:

    1.  Financial Statements

                                                               Page 
                                                               -----

         Reports of Independent Auditors..................     F-2-3
         Consolidated Balance Sheets......................     F-4
         Consolidated Statements of Operations............     F-5
         Consolidated Statements of Changes in
           Shareholders' Equity...........................     F-6
         Consolidated Statements of Cash Flows............     F-7
         Notes to Consolidated Financial Statements.......     F-8-23

    2. All other schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable, and therefore have been omitted.

    3.  Exhibits

    [c]2.1    Asset Purchase Agreement dated as of November 30, 1989
              between Griffith Consumers Company, a Maryland
              corporation and predecessor to the Company ("Griffith
              Maryland"), and Hessick, Inc.

    [e]2.2    Asset Purchase Agreement dated October 3, 1991 between
              Carl King and Calotex Delaware, Inc.

    [g]2.3    Asset Purchase Agreement dated April 23, 1993 between
              Griffith Maryland and Steuart Petroleum Company and
              Steuart Investment Company.

    [i]2.4    Agreement for Merger dated as of August 26, 1994 among
              Griffith Maryland, Griffith Holdings, Inc. ("GHI") and
              ABC Acquisition Corp. ("ABC") (the "Merger Agreement").

    [i]2.5    First Amendment, dated as of October 28, 1994, to
              Merger Agreement.

    [i]2.6    Second Amendment, dated as of November 18, 1994, to
              Merger Agreement.

    [i]2.7    Third Amendment, dated as of December 12, 1994, to
              Merger Agreement.

    [i]2.8    Agreement and Plan of Merger dated as of December 15,
              1994 among Griffith Maryland and Andrew One Corp.

    [i]3.1    Certificate of Incorporation of Griffith Holdings, Inc.

    [i]3.2    Certificate of Amendment to the Certificate of
              Incorporation of Griffith Holdings, Inc., changing its
              name to Andrew One Corp., dated August 23, 1994.

    [i]3.3    Certificate of Merger of Griffith Maryland with and
              into Andrew One Corp. and changing the name of Andrew
              One Corp. to Griffith Consumers Company, dated December
              15, 1994.

    [i]3.4    Certificate of Incorporation of CKC Corporation.
 
                                       31

<PAGE>

    [i]3.5    Certificate of Amendment to Certificate of
              Incorporation of CKC Corporation, changing its name to
              Carl King, Inc., dated January 5, 1987.

    [i]3.6    Articles of Incorporation of Frederick Terminals, Inc.

    [i]3.7    By-laws of the Company.

    [i]3.8    By-laws of Carl King, Inc.

    [i]3.9    By-laws of Frederick Terminals, Inc.

    [i]4.1    Indenture dated as of December 15, 1994 among the
              Company, Carl King, Frederick Terminals and NationsBank
              Trust Company of New York, as Trustee (including form
              of 141/2% Senior Subordinated Notes due 2004).

    [i]4.2    Purchase Agreement dated as of December 12, 1994 among
              GHI, Andrew One Corp. and Donaldson, Lufkin & Jenrette
              Securities Corporation ("DLJ").

    [i]4.3    A/B Exchange Registration Rights Agreement dated as of
              December 15, 1994 among the Company, Carl King,
              Frederick Terminals and DLJ.

    [j]4.4    Form of Letter Agreement dated December 15, 1994 among
              the Company, Sun Life Insurance Company of America,
              John Hancock Mutual Life Insurance Co., The Lincoln
              National Life Insurance Company and Pecks Management
              Partners.

    [i]4.5    Third Amended and Restated Revolving Credit and Term
              Loan Agreement dated as of December 15, 1994 among the
              Company, Carl King, and certain lending institutions,
              with The First National Bank of Boston, as Agent (the
              "Credit Agreement").

    [i]4.6    Fourth Amended and Restated Revolving Credit Note, in
              the original principal amount of $9,500,000, dated as
              of December 15, 1994, made by the Company  and Carl
              King in favor of The First National Bank of Boston.

    [i]4.7    Fourth Amended and Restated Revolving Credit Note, in
              the original principal amount of $2,500,000, dated as
              of December 15, 1994, made by the Company  and Carl
              King in favor of The Riggs National Bank of Washington,
              D.C.

    [i]4.8    Term Note A dated as of December 15, 1994 made by the
              Company and Carl King in favor of each of Term Loan A
              lenders under the Credit Agreement.

    [i]4.9    Term Note B dated as of December 15, 1994 made by the
              Company and Carl King in favor of each of the Term Loan
              B lenders under the Credit Agreement.

    [i]4.10   Guaranty dated as of December 15, 1994 by Frederick
              Terminals in favor of the lending institutions party to
              the Credit Agreement and The First National Bank of
              Boston, as Agent.

    [i]4.11   Security Agreement dated as of December 15, 1994 among
              the Company, Carl King and The First National Bank of
              Boston, as Agent for the lending institutions party to
              the Credit Agreement.

    [i]4.12   Security Agreement dated as of December 15, 1994 among
              Frederick Terminals and The First National Bank of
              Boston, as Agent for the lending institutions party to
              the Credit Agreement.

    [i]4.13   Second Amended and Restated Stock Pledge Agreement
              dated as of December 15, 1994 among the Company and The
              First National Bank of Boston, as Agent for the lending
              institutions party to the Credit Agreement.

    [k]4.14   Amendment No. 1 dated as of March 15, 1995, to the
              Third Amended and Restated Revolving Credit and Loan
              Agreement dated as of December 15, 1994 among the
              Company, King, and certain lending institutions, with
              The First National Bank of Boston as Agent.

    [k]4.15   Amendment No. 1 dated as of March 15, 1995, to
              Indenture dated December 15, 1994, among the Company,
              King, Frederick Terminals and NationsBank Trust Company
              of New York, as Trustee.
 
                                       32

<PAGE>

     [n]4.16  Amendment No. 2 dated as of August 11, 1995, to the
              Third Amended and Restated Revolving Credit and Loan
              Agreement dated as of December 15, 1994, among the
              Company, King, and certain lending institutions, with
              The First National Bank of Boston as Agent.

    [p]4.17   Amendment No. 3 dated as of January 5, 1996 to the
              Third Amended and Restated Revolving Credit and
              Agreement dated as of December 15, 1994 among Griffith,
              Carl King, Inc. Shore Stop Corporation and certain
              lending institutions, with the First National Bank of
              Boston as Agent.                     
    [p]4.18   Fourth Amendedand Restated Revolving Credit and Term
              Loan Agreement dated as of July 8, 1996 among Griffith,
              Carl King, Inc. And certain lending institutions, with
              the First National Bank of Boston as Agent.

    [p]4.19   Second Supplemental Indenture, dated as of June 30,
              1996 to Indenture dated as of December 15, 1994 among
              the Company, King, Frederick Terminals and the Bank of
              New York as Successor Trustee.

    [q]4.20   First Amendment to Fourth Amended and Restated
              Revolving Credit and Term Loan Agreement dated as of 
              December 31, 1996 among the Company, King, Frederick
              Terminals and the Bank of New York as Successor      
              Trustees 

    4.21*     Second Amendment to Fourth Amended and Restated
              Revolving Credit and Term Loan Agreement dated as of 
              March  31, 1997 among the Company, King, Frederick
              Terminals and the Bank of New York as Successor
              Trustees. 

    4.22*     Third Amendment to Fourth Amended and Restated
              Revolving Credit and Term Loan Agreement dated as of
              August 29, 1997 among the Company, King, Frederick
              Terminals and the Bank of New York as Successor
              Trustees. 

    [j]5.1    Legal Opinion of Akin, Gump, Strauss, Hauer & Feld,
              L.L.P. concerning the legality of the New Notes.

    [a]10.1   Purchase Agreement dated June 30, 1986 between Griffith
              Maryland and Griffith Consumers Leasing Partnership.

    [b]10.2   Lease dated December 30, 1986 between Carl King and
              CKC.

    [d]10.3   Product Sales Agreement between Mobil Oil Company and
              Carl King, Inc. dated April 15, 1988.

    [d]10.4   Product Sales Agreement between Mobil Oil Company and
              Griffith Maryland dated May 29, 1990.

    [f]10.5   Product Sales Agreement between Star Enterprise and
              Carl King, Inc. dated December 6, 1991.

    [f]10.6   Non-compete Agreement dated January 2, 1992 between
              Griffith Maryland and Walter J. Meighan.

    [g]10.7   Lease dated June 9, 1993 between Griffith Maryland and
              Steuart Petroleum Company.


    [g]10.8   Non-compete Agreement dated June 9, 1993 between
              Griffith Maryland and Steuart Investment Company.

    [g]10.9   Non-compete Agreement dated June 9, 1993 between
              Griffith Maryland and Steuart Petroleum Company.

    [g]10.10  Non-compete Agreement dated June 9, 1993 between
              Griffith Maryland and Leonard P. Steuart, II and Guy T.
              Steuart, II.

    [h]10.11  Non-compete Agreement dated July 1, 1993 between
              Griffith Maryland and Rockville Fuel and Feed Company.

    [h]10.12  Non-compete Agreement dated July 1, 1993 between
              Griffith Maryland and James D. Ward.

    [h]10.13  Non-compete Agreement dated August 2, 1993 between
              Griffith Maryland and Frederick Petroleum Company.

    [h]10.14  Non-compete Agreement dated August 2, 1993 between
              Griffith Maryland and DeWalt J. Willard, Jr.
 
                                       33

<PAGE>

    [h]10.15  Non-compete Agreement dated March 21, 1994 between
              Griffith Maryland and George G. Brown.

    [i]10.16  Agreement with Shareholders dated as of August 26, 1994
              among Certain Shareholders of Griffith Maryland, GHI
              and ABC.

    [i]10.17  Consulting, Noncompetition and Indemnity Agreement
              dated as of August 26, 1994 among Richard Slifka,
              Alfred A. Slifka, GHI and ABC.

    [i]10.18  Letter Agreement dated as of October 28, 1994 among
              Richard Slifka, Alfred A. Slifka, GHI and ABC regarding
              Consulting, Noncompetition and Indemnity Agreement
              dated as of August 26, 1994.

    [i]10.19  Consulting and Noncompetition Agreement dated as of
              August 26, 1994 among Thomas A. McManmon, GHI and ABC.

    [i]10.20  Noncompetition Agreement dated as of August 26, 1994
              among Global Petroleum Co., GHI and ABC.

    [i]10.21  License Agreement dated as of December 15, 1994 among
              Global Petroleum Corp., the Company and Carl King.

    [i]10.22  Advisory Agreement dated as of December 15, 1994 among
              First Chartwell Investments Inc., the Company, GHI, ABC
              and Carl King.

    [i]10.23  Management Agreement dated as of December 15, 1994
              among Chartwell Investments Inc., the Company and Carl
              King.

    [i]10.24  Consulting Agreement dated as of June 15, 1994 among
              BJL Holdings, LLC, GHI and ABC.

    [i]10.25  Consulting Agreement dated as of December 15, 1994
              among Walter J. Meighan, GHI and the Company.

    [i]10.26  Employment Agreement dated as of December 15, 1994
              among the Company and Todd R. Berman.

    [i]10.27  Employment Agreement dated as of December 15, 1994
              among the Company and Michael S. Shein.

    [i]10.28  Employment Agreement dated as of December 15, 1994
              among the Company and Howard B. Schlosberg.

    [i]10.29  Employment Agreement dated as of December 15, 1994
              among the Company and Bruce W. King.

    [i]10.30  Employment Agreement dated as of December 15, 1994
              among the Company and Raymond R. McKenzie, Jr..

    [i]10.31  Executive Nonqualified Stock Option Plan dated as of
              December 15, 1994.

    [i]10.32  Grant and Stock Option Agreements dated as of December
              15, 1994 among GHI and each of Howard B. Schlosberg,
              Bruce W. King and Raymond R. McKenzie, Jr., granting
              1/3 of the options to which they are entitled under the
              Executive Nonqualified Stock Option Plan.

    [i]10.33  Grant and Stock Option Agreements dated as of December
              15, 1994 among GHI and each of Howard B. Schlosberg,
              Raymond R. McKenzie, Jr. and Bruce W. King, granting
              2/3 of the options to which they are entitled under the
              Executive Nonqualified Stock Option Plan.

    [i]10.34  Amended and Restated Master Lease Agreement dated as of
              December 15, 1994 among Griffith Consumers Leasing
              Partnership and the Company.

    [i]10.35  Letter Agreement dated as of December 14, 1994 among
              the Company, The Travelers Insurance Company, The
              Travelers Indemnity Company, The Travelers Life and
              Annuity Company and The Phoenix Insurance Company.

    [i]10.36  Indemnification Agreements between the Company and each
              of the directors and officers of the Company, Carl King
              and Frederick Terminals.

    [i]10.37  Guaranty dated as of September 15, 1994 by Duncan O.
              Thomas in favor of Griffith Maryland.
 
                                       34

<PAGE>

    [j]10.38  Independent Contractors Nonqualified Stock Option Plan.

    [j]10.39  Form of Grant and Stock Option Agreements among GHI and
              each of Simon Ramo, Robert Lindsay and William Spencer.

    [n]10.40  Non-compete Agreement dated July 26, 1994 between the
              Company and Reed Oil.

    [l]10.41  Indemnity Agreement dated December 20, 1995 by and
              between Griffith and Neil H. McLaurin III

    [m]10.42  Asset Purchase and Sale Agreement, dated as of April
              23, 1996, by and among Griffith, Regent Investments,
              Inc., Delaware Investments, Inc. And Mid-Atlantic
              Investments, Inc.

    [p]10.43  Employment Agreement, dated October 18, 1995 between
              Griffith and Terrence P. Sullivan

    [p]10.44  Consulting Agreement, dated December 15, 1995 among
              Griffith, GHI and Walter J. Meighan.
         
    [j]12     Computation of Ratio of Earnings to Fixed Charges.

    [n]16     Letter from Ernst & Young LLP with respect to
              disclosure in Annual Report on Form 10-K (1995)
              relating to change in accountants.

    [i]21     Subsidiaries of the Company.

    [i]25     Form T-1 Statement of Eligibility and Qualification
              under the Trust Indenture Act of 1939 of NationsBank
              Trust Company of New York relating to the New Notes
              (bound separately).

    27*       Financial Data Schedule

    [i]99.1   Letter of Transmittal.

    [i]99.2   Notice of Guaranteed Delivery.
_______________________

    *    Filed herewith.

    [a]  Incorporated by reference to Exhibits to Registration
         Statement No. 0-16359 filed by Griffith Maryland.

    [b]  Incorporated by reference to Exhibits to Griffith
         Maryland's Report of Form 10-K for the year ended June
         30, 1987.

    [c]  Incorporated by reference to Exhibits to Griffith
         Maryland's Report on form 8-K dated December 22, 1989
         and Form 8-K, Amended dated February 24, 1990.

    [d]  Incorporated by reference to Exhibits to Griffith
         Maryland's Report on Form 10-K for the year ended June
         30, 1990. 

    [e]  Incorporated by reference to Exhibits to Griffith
         Maryland's Report on Form 8-K dated December 18, 1991
         and filed December 19, 1991.

    [f]  Incorporated by reference to Exhibits to Griffith
         Maryland's Report on Form 10-K for the year ended June
         30, 1992.

    [g]  Incorporated by reference to Exhibits to Griffith
         Maryland's Report on Form 8-K dated June 9, 1993 and
         filed June 24, 1993.

    [h]  Incorporated by reference to Exhibits to Griffith
         Maryland's Report on Form 10-K for the year ended June
         30, 1994.
 
                                       35

<PAGE>

    [i]  Incorporated by reference to Exhibits to the Company's
         Registration Statement No. 33-88526 on Form S-4 dated
         January 13, 1995.

    [j]  Incorporated by reference to Exhibits to the Company's
         Amendment No. 1 to the Registration Statement No. 33-88526
         on Form S-4 dated March 31, 1995.

    [k]  Incorporated by reference to Exhibits to the Company's
         Report on Form 10-Q for the Quarter Ended March 31, 1995.

    [l]  Incorporated by reference to Exhibits to the Company's
         Report on Form 10-Q for the Quarter Ended December 31, 1995.
        
    [m]  Incorpoated by reference to Exhibits to the Company's Report
         on Form 8-K dated May 3, 1996.

    [n]  Incorporated by reference to Exhibits to the Company's
         Annual Report on Form 10-K for the Fiscal Year Ended June
         30, 1995.

    [o]  Incorporated by reference to Exhibits to the Company's
         Current Report on Form 8-K dated May 3, 1996.

    [p]  Incorporated by reference to Exhibits to the Company's
         Annual Report on Form 10-K for the Fiscal Year Ended June 
         30, 1996.
       
    [q]  Incorporated by reference to Exhibits to the Company's
         Report on Form 10-Q for the Quarter Ended Decemberr 31,
         1996.

(b) Reports on Form 8-K
         
         No reports on Form 8-K were filed by the Company in the
         fourth quarter of 1997.
 
                                       36

<PAGE>
    
                                 SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, each registrant has duly caused this report to
be signed on its behalf by the undersigned, each thereunto duly
authorized on the 29th day of September, 1997.

                             GRIFFITH CONSUMERS COMPANY


                             By:  /s/ Raymond R. McKenzie    
                                  ----------------------------
                                  Name: Raymond R. McKenzie
                                  Title: Vice President, Secretary, and
                                         Treasurer

                             CARL KING, INC.


                             By:  /s/ Raymond R. McKenzie     
                                  ----------------------------
                                  : Raymond R. McKenzie
                                  Title: Vice President

                             FREDERICK TERMINALS, INC.


                             By:  /s/ Raymond R. McKenzie       
                                  -----------------------------
                                  : Raymond R. McKenzie
                                  Title: Secretary and Treasurer

                                       37

<PAGE>

                                     SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrants and in the capacities and on the dates indicated.

                             GRIFFITH CONSUMERS COMPANY

Name                          Title                           Date
 
/s/ Todd R. Berman            Chairman of the Board of        September 29, 1997
----------------------------  Directors
Todd R. Berman 

/s/ Howard B. Schlosberg      President and Director          September 29, 1997
----------------------------  (Principal Executive Officer)
Howard B. Schlosberg 

/s/ Michael S. Shein          Vice President and Director     September 29, 1997
----------------------------
Michael S. Shein  

/s/ Raymond R. McKenzie, Jr.  Vice President, Secretary and   September 29, 1997
----------------------------  Treasurer (Principal Financial
Raymond R. McKenzie, Jr.      and Accounting Officer)

/s/ Barry J. Lassman          Director                        September 29, 1997
----------------------------
Barry J. Lassman 

/s/Walter J. Meighan          Director                        September 29, 1997
----------------------------
Walter J. Meighan

/s/Neil H. McLaurin           Director                        September 29, 1997
----------------------------
Neil H. McLaurin     

                                       38

<PAGE>

                                   CARL KING, INC.

Name                          Title                           Date

/s/ Todd R. Berman            Chairman of the Board           September 29, 1997
----------------------------  of Directors
Todd R. Berman 

/s/ Gregory A. Stutxman       President                       September 29, 1997
----------------------------
Gregory A. Stutzman 

/s/ Raymond R. McKenzie, Jr.  Vice President(Principal        September 29, 1997
----------------------------  Financial and Accounting
Raymond R. McKenzie, Jr.      Officer) 

/s/ Michael S. Shein          Vice President and Director     September 29, 1997
----------------------------
Michael S. Shein  

/s/Howard B. Schlosberg       Vice President and Director     September 29, 1997
----------------------------
Howard B. Schlosberg 


                              FREDERICK TERMINALS, INC.

Name                          Title                           Date

/s/ Todd R. Berman            Chairman of the Board of        September 29, 1997
----------------------------  Directors
Todd R. Berman 

/s/ Howard B. Schlosberg      President and Director          September 29, 1997
----------------------------  (Principal Executive Officer)
Howard B. Schlosberg 

/s/ Michael S. Shein          Vice President and Director     September 29, 1997
----------------------------
Michael S. Shein  

/s/ Raymond R. McKenzie, Jr.  Secretary, and Director         September 29, 1997
----------------------------  (Principal Financial and
Raymond R. McKenzie, Jr.      Accounting Officer)

                                       39

<PAGE>

Exhibit #  Description

  4.21     Second Amendment   to the Fourth Amended and Restated Revolving
           Credit and Loan Agreement dated as of March 31,  1997, among the
           Company, King, and certain lending institutions, with The First
           National Bank of Boston as Agent.

  4.22     Third Amendment   to the Fourth Amended and Restated Revolving
           Credit and Loan Agreement dated as of August 29,  1997, among the
           Company, King, and certain lending institutions, with The First
           National Bank of Boston as Agent. .

                                       40

<PAGE>






                       REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To the Shareholder of 
  Griffith Consumers Company:

We have audited the accompanying consolidated balance sheets of Griffith
Consumers Company (a Delaware corporation) and subsidiaries ("Successor") as of
June 30, 1997, and 1996, and the related consolidated statements of operations,
changes in shareholder's equity and cash flows for the years ended June 30, 1997
and 1996, and for the period from December 16, 1994 through June 30, 1995. 
These financial statements are the responsibility of the Company's management. 
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Griffith Consumers Company and
subsidiaries as of June 30, 1997 and 1996, and the results of their operations
and their cash flows for the years ended June 30, 1997 and 1996, and for the
period from December 16, 1994 through June 30, 1995, in conformity with
generally accepted accounting principles.



/S/ ARTHUR ANDERSEN LLP


Washington, DC
September 10, 1997

                                       F-1

<PAGE>







                        REPORT OF INDEPENDENT PUBLIC ACCOUNTS



To the Shareholders of
  Griffith Consumers Company:



We have audited the accompanying consolidated statements of operations, 
changers in shareholder's equity and cash flows of Griffith Consumers Company 
and subsidiaries ("Predecessor") for the period July 1, 1994 through December 
15, 1994.  These financial statements are the responsibility of the Company's 
management.  Our responsibility is to express an opinion on these financial 
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.  
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audit provides a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the results of operations and cash flows of Griffith 
Consumers Company and subsidiaries for the period July 1, 1994 through 
December 15, 1994, in conformity with generally accepted accounting 
principles.

/S/ ARTHUR ANDERSEN LLP




New York, New York
September 18, 1996

                                       F-2

<PAGE>
                  GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                                                                       
                                                                                       JUNE 30,        JUNE 30,
ASSETS:                                                                                 1997            1996
---------------------------------------------------------------------------------  --------------  --------------
<S>                                                                                <C>             <C>
CURRENT ASSETS
CASH.............................................................................  $    3,212,107  $    1,687,443
ACCOUNTS AND NOTES RECEIVABLE, LESS ALLOWANCE FOR BAD DEBTS......................      11,182,949      11,813,211
PETROLEUM PRODUCTS INVENTORY.....................................................       1,704,747       1,228,347
REPAIR PARTS AND SUNDRY INVENTORY................................................       3,294,711       1,662,048
PREPAID EXPENSES AND OTHER.......................................................       1,336,380       1,320,055
INCOME TAXES RECEIVABLE..........................................................          95,603        --
OTHER TAXES RECEIVABLE...........................................................         906,050        --
DEFERRED TAX ASSET...............................................................       1,399,424        --
                                                                                   --------------  --------------
TOTAL CURRENT ASSETS.............................................................      23,131,971      17,711,104
PROPERTY, PLANT AND EQUIPMENT
LAND.............................................................................  $    5,622,871  $    5,533,870
BUILDINGS........................................................................       3,979,731       1,844,358
MACHINERY AND EQUIPMENT..........................................................      25,032,748      16,152,930
                                                                                   --------------  --------------
                                                                                       34,635,350      23,531,158
LESS: ACCUMULATED DEPRECIATION...................................................      11,523,797       6,019,263
                                                                                   --------------  --------------
                                                                                       23,111,553      17,511,895
INTANGIBLES--NOTE C
CUSTOMER AND SERVICE ACCOUNTS....................................................      39,842,186      37,063,186
COVENANTS NOT TO COMPETE.........................................................       3,821,001       2,936,824
GOODWILL.........................................................................      48,294,314      39,000,867
OTHER INTANGIBLES................................................................         868,869         836,344
                                                                                   --------------  --------------
                                                                                       92,826,370      79,837,221
LESS: ACCUMULATED AMORTIZATION...................................................      18,863,920      11,304,362
                                                                                   --------------  --------------
                                                                                       73,962,450      68,532,859
LONG-TERM NOTES RECEIVABLE.......................................................         990,694       1,054,816
DEFERRED DEBT COSTS & OTHER......................................................       4,080,416       3,759,756
                                                                                   --------------  --------------
TOTAL ASSETS.....................................................................  $  125,277,084  $  108,570,430
                                                                                   --------------  --------------
                                                                                   --------------  --------------
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                      F-3
<PAGE>
 
                  GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>

                                                                                      JUNE 30,        JUNE 30,
LIABILITIES AND SHAREHOLDER'S EQUITY:                                                   1997            1996
---------------------------------------------------------------------------------  --------------  --------------
<S>                                                                                <C>             <C>
CURRENT LIABILITIES:
ACCOUNTS PAYABLE.................................................................  $    8,708,702  $    7,581,065
ACCRUED EXPENSES.................................................................       3,680,181       3,560,374
DEFERRED REVENUE.................................................................       3,189,405       2,471,880
INCOME TAXES PAYABLE.............................................................        --                73,103
OTHER TAXES PAYABLE..............................................................       1,536,084         198,517
CURRENT PORTION OF LONG-TERM DEBT-
NOTE F...........................................................................       5,448,956       4,240,893
                                                                                   --------------  --------------
TOTAL CURRENT LIABILITIES........................................................      22,563,328      18,125,832
LONG-TERM DEBT, LESS CURRENT PORTION-NOTE F......................................      85,107,114      65,350,995
DEFERRED REVENUE.................................................................       1,089,414        --
DEFERRED INCOME TAXES............................................................       5,882,534       7,993,849
POST-RETIREMENT EMPLOYEE BENEFITS AND OTHER......................................       1,523,830       1,541,330
                                                                                   --------------  --------------
TOTAL LIABILITIES................................................................     116,166,220      93,012,006
SHAREHOLDER'S EQUITY
COMMON STOCK, par value $.01 per share, 1,000 shares, authorized, issued and
  outstanding....................................................................              10              10
ADDITIONAL PAID-IN CAPITAL.......................................................      20,691,314      20,691,314
RETAINED DEFICIT.................................................................     (11,580,460)     (5,132,900)
                                                                                   --------------  --------------
TOTAL SHAREHOLDER'S EQUITY.......................................................       9,110,864      15,558,424
                                                                                   --------------  --------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.......................................  $  125,277,084  $  108,570,430
                                                                                   --------------  --------------
                                                                                   --------------  --------------
</TABLE>
 
                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                                       F-4
<PAGE>


                  GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                                                     SUCCESSOR                       PREDECESSOR
                                                    ----------------------------------------------  -------------
                                                    JUL 1, 1996 -   JUL 1, 1995 -   DEC 16, 1994 -  JUL 1, 1994 -
                                                    JUN 30, 1997    JUNE 30, 1996   JUNE 30, 1995   DEC 15, 1994
                                                    --------------  --------------  -------------   -------------
<S>                                                 <C>             <C>             <C>            <C>
SALES FROM PETROLEUM PRODUCTS.....................  $  228,848,461  $  178,834,396  $  94,579,313  $  65,437,258
SERVICE, EQUIPMENT, AND OTHER SALES...............      48,268,872      19,182,816      9,535,569      8,939,201
                                                    --------------  --------------  -------------  -------------
  TOTAL SALES.....................................     277,117,333     198,017,212    104,114,882     74,376,459
COST OF SALES.....................................     222,278,093     154,157,555     80,504,645     59,739,106
                                                    --------------  --------------  -------------  -------------
  GROSS PROFIT....................................      54,839,240      43,859,657     23,610,237     14,637,353
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES.....      42,384,649      29,032,933     15,358,839     12,866,611
DEPRECIATION EXPENSE..............................       5,671,562       4,124,316      2,136,576      1,304,698
AMORTIZATION EXPENSE..............................       8,089,904       7,065,138      3,970,889      2,013,836
                                                    --------------  --------------  -------------  -------------
  OPERATING (LOSS)INCOME..........................      (1,306,875)      3,637,270      2,143,933     (1,547,792)
INTEREST EXPENSE..................................      10,711,022       9,398,476      5,054,455      1,239,657
OTHER INCOME......................................       1,920,241         668,001        850,722        199,747
                                                    --------------  --------------  -------------  -------------
  LOSS BEFORE INCOME TAX..........................     (10,097,656)     (5,093,205)    (2,059,800)    (2,587,702)
INCOME TAX BENEFIT................................      (3,650,096)     (1,428,073)      (592,032)    (1,004,455)
                                                    --------------  --------------  -------------  -------------
  NET LOSS........................................  $   (6,447,560) $   (3,665,132) $  (1,467,768)    (1,583,247)
                                                    --------------  --------------  -------------  -------------
                                                    --------------  --------------  -------------  -------------
</TABLE>
 
                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                                       F-5

<PAGE>

                  GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
 
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
 
<TABLE>
<CAPTION>
                                                                      ADDITIONAL      RETAINED         TOTAL
                                                          COMMON       PAID-IN        EARNINGS     SHAREHOLDER'S
PREDECESSOR                                   SHARES       STOCK       CAPITAL       (DEFICIT)        EQUITY
------------------------------------------  -----------  ---------  -------------  --------------  -------------
<S>                                         <C>          <C>        <C>            <C>             <C>
Balance June 30, 1994.....................    2,355,000  $  23,550  $   2,849,407  $    4,962,499  $   7,835,456
Issuance Of Stock.........................        5,000         50         24,950        --               25,000
Net Loss..................................      --          --           --            (1,583,247)    (1,583,247)
                                            -----------  ---------  -------------  --------------  -------------
Balance December 15, 1994.................    2,360,000     23,600      2,874,357       3,379,252      6,277,209
Stock Redemption..........................   (2,360,000)   (23,600)    (2,874,357)     (3,379,252)    (6,277,209)
                                            -----------  ---------  -------------  --------------  -------------
Balance December 16, 1994.................      --       $  --      $    --        $     --        $    --
                                            -----------  ---------  -------------  --------------  -------------
                                            -----------  ---------  -------------  --------------  -------------

SUCCESSOR
Capital Contributions from Parent.........        1,000  $      10  $  20,691,314  $     --        $  20,691,324
Net Loss..................................      --          --           --            (1,467,768)    (1,467,768)
                                            -----------  ---------  -------------  --------------  -------------
Balance June 30, 1995.....................        1,000         10     20,691,314      (1,467,768)    19,223,556
Net Loss..................................      --          --           --            (3,665,132)    (3,665,132)
                                            -----------  ---------  -------------  --------------  -------------
Balance June 30, 1996.....................        1,000         10     20,691,314      (5,132,900)    15,558,424
Net Loss..................................      --          --           --            (6,447,560)    (6,447,560)
                                            -----------  ---------  -------------  --------------  -------------
Balance June 30, 1997.....................        1,000  $      10  $  20,691,314  ($  11,580,460) $   9,110,864
                                            -----------  ---------  -------------  --------------  -------------
                                            -----------  ---------  -------------  --------------  -------------
</TABLE>
 
                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                                      F-6

<PAGE>
 
                  GRIFFITH CONSUMERS COMPANY AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                            SUCCESSOR                             PREDECESSOR
                                    ---------------------------------------------------------  -----------------
                                          YEAR ENDED          YEAR ENDED    DECEMBER 16, 1994    JULY 1, 1994
                                           JUNE 30,            JUNE 30,          THROUGH            THROUGH
                                             1997                1996         JUNE 30, 1995    DECEMBER 15, 1994
                                    -----------------------  -------------  -----------------  -----------------
<S>                                 <C>                      <C>            <C>                <C>
Operating activities
  Net loss..........................    ($ 6,447,560)        ($  3,665,132)  ($  1,467,768)      ($  1,583,247)
  Adjustments to reconcile net loss
   to net cash provided by (used
   in) operating activities:
    Depreciation....................       5,671,562             4,124,316       2,136,576           1,304,698 
    Amortization....................       8,089,904             7,065,138       3,970,889           2,013,836
    Provision for bad debts.........         322,118               336,000          96,000              92,000
    Amortization of bond discount...         182,107               182,108          72,264                --
    Gain on sale of property, plant,
     equipment, and intangibles.....         (88,507)             (137,772)         (6,498)            (24,087)
    Changes in operating assets and
     liabilities
      Accounts and notes 
       receivable...................         372,266            (3,555,567)       1,439,016         (1,571,994)
      Inventory.....................      (2,109,063)             (131,640)          43,919           (175,887)
      Prepaid expenses and other....         197,675               366,271          951,694         (1,841,787)
      Refundable Income taxes, net..      (2,474,180)            1,257,483           55,411         (1,234,890)
      Other assets..................         664,022              (151,688)      (1,990,701)          (771,997)
      Accounts payable..............       1,127,637             1,530,219       (2,770,914)         1,319,125
      Accrued expenses..............         119,807             1,415,755          254,306           (283,208)
      Deferred revenue..............       1,806,939              (779,158)      (1,615,715)         1,822,452
      Other liabilities.............        (791,248)           (2,233,090)        (238,900)           392,473
                                         ------------         ------------   ---------------     -------------
  Net cash provided by (used in)
   operating activities............        6,643,479             5,623,243          929,579           (542,513)

Investing activities
  Purchases of property, plant, and 
   equipment.......................       (5,309,677)           (2,376,852)      (2,061,981)        (1,497,243)
  Purchases of intangible assets...            --                   --                --              (750,000)
  Proceeds from sale of property,
   plant, and equipment, and
   intangible assets...............          364,944               767,283           89,431            125,545
  Acquisition of business..........      (18,906,157)               --              (76,650)          (142,000)
  Purchase of predecessor's stock
   per Merger......................            --                   --          (54,280,000)             --
  Acquisition costs................       (2,050,000)               --           (3,674,391)             --
                                        ------------         -------------   ---------------     -------------
  Net cash used in investing
   activities......................      (25,900,890)           (1,609,569)     (60,003,591)        (2,263,698)

Financing activities
  Proceeds from (payment of)
   line of credit..................        3,800,000               800,000       (1,850,000)         1,850,000
  Proceeds from bond debentures
   issuance........................           --                    --            31,196,612             --
  Bond issue costs.................           --                    --            (1,473,000)            --
  Proceeds from term loans.........       21,850,000                --            40,275,853             --
  Prepaid interest.................           --                    --            (1,170,000)            --
  Payments on long-term debt.......       (4,867,925)           (3,929,316)      (27,793,692)       (1,760,875)
  Capital Contributions from
   Parents.........................           --                    --            20,691,314             --
  Issuance of capital stock........            --                   --                    10            25,000
                                        ------------         -------------   ---------------     -------------
  Net cash provided by (used in)
   financing activities............       20,782,075            (3,129,316)       59,877,097           114,125
                                        ------------         -------------   ---------------     -------------
  Increase (Decrease) in cash......        1,524,664               884,358           803,085        (2,692,086)
  Cash at beginning of period......        1,687,443               803,085                 0         2,692,086
                                        ------------         -------------   ---------------     -------------
  Cash at end of period.............     $ 3,212,107         $   1,687,443    $      803,085      $          0
                                         -----------         -------------   ---------------     -------------
                                         -----------         -------------   ---------------     -------------

</TABLE>
 
                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                                      F-7
<PAGE>



                      Griffith Consumers Company And Subsidiaries
                                    June 30, 1997

Notes to Consolidated Financial Statements

Note A--Introduction

On December 15, 1994, the transaction contemplated by the merger agreement
("Merger Agreement") dated August 26, 1994 between Griffith Consumers Company
("Griffith" and together with its wholly-owned subsidiaries, the "Company") and
Griffith Holdings, Inc. ("GHI"), a corporation previously unrelated to the
Company, closed, whereby GHI acquired all of the Company's 2,360,000 outstanding
shares of common stock (the "Common Stock") for $23.00 cash per share. Pursuant
to the Merger Agreement, ABC Acquisition Corp. ("ABC"), a wholly owned
subsidiary of GHI, merged with and into the Company, and each share of the
Company's common stock was converted into the right to receive $23.00 in cash
(the "1994 Acquisition"). As a result of the Acquisition, the Company became a
wholly owned subsidiary of GHI.  

The 1994 Acquisition has been accounted for under the purchase method of
accounting as of December 16, 1994.  Accordingly, GHI has allocated its total
purchase cost of approximately $54,280,000 to the assets and liabilities of the
Company based upon the fair value of these assets and liabilities.  The fair
values assigned on the December 16, 1994 balance sheet were adjusted when
valuation studies were completed.  Because of this purchase price allocation,
the accompanying consolidated financial statements of the Company for the
periods July 1,1996 through June 30, 1997, July 1, 1995 through June 30, 1996
and December 16, 1994 through June 30, 1995 ("the Successor") are not directly
comparable to the consolidated financial statements of the Company prior to
December 16, 1994 ("the Predecessor").

On July 11, 1996, the Company acquired certain assets used in the operations of
a chain of convenience stores and retail gasoline stations within the states of
Maryland, Delaware, and Virginia under the "Shore Stop" trade name and a dealer
petroleum sales business at two facilities located in Virginia and Maryland 
("the Acquisition") from Regent Investments, Inc., Delaware  Inc., and
Mid-Atlantic Investments, Inc. each a Virginia corporation (collectively, the
"Sellers"). The Company paid the Sellers $17,000,000 (plus the purchase price of
certain inventory), subject to certain adjustments, of which $1,500,000 was in
the form of a promissory note (the "Regent Note") secured by first priority
mortgages or deeds of trust on certain stores. In addition, the Company also
assumed $350,000 of debt. The acquisition was financed  through an amendment and
restatement of the Company's prior credit  agreement ("Prior Credit Agreement",
and as amended and restated, "Credit Agreement"). See Note F -- Debt

                                         F-8
<PAGE>


Note B--Business

The Company is engaged principally in the retail sale of home heating oil, the
retail sale of gasoline through Company-owned gas stations, the sale of gasoline
to independent dealer gas stations and the sale of other petroleum products. 
The Company is also engaged in the sale and service of oil heating and
air-conditioning equipment.

Note C--Significant Accounting Policies

Principles of Consolidation:  The subsidiaries' accounts have been included in
the consolidated financial statements. All significant intercompany accounts and
transactions have been eliminated.

Revenue Recognition:  Sales are recognized as deliveries are made or services
are performed.  Deferred revenue represents collections from customers who are
on a periodic payment plan and who have made payments in excess of deliveries or
services received and payments received from major petroleum suppliers in
exchange for rebranding some of the company owned stations. Deferred revenue
related to the station rebranding agreements is being amortized over the life of
the related contracts. 

Cash: Outstanding checks in excess of the cash balance of $972,000 and $763,000
are included in accounts payable balance at at June 30, 1997 and 1996,
respectively. 

Allowance for Bad Debts:  A provision for bad debts is provided when the
collection of the account is doubtful.

Inventories:  Inventories are valued at the lower of average cost or market.

Property, Plant and Equipment:  Property, plant and equipment are recorded at
cost.  Depreciation is recorded using the straight-line method over the
following useful lives:

    Buildings                                       20 years
    Dealer equipment and station improvements     5-10 years
    Machinery and equipment                       3- 5 years

As of December 16, 1994, the remaining useful lives were used to depreciate
property, plant and equipment revalued under purchase accounting.

Maintenance and repairs are expensed as incurred; significant renewals and
betterments are capitalized.  Maintenance and repair expense for the years ended
June 30, 1997 and June 30, 1996, and the periods December 16, 1994 through June
30, 1995 and July 1, 1994 through December 15, 1994  was $1,958,417, $1,159,137,

                                         F-9
<PAGE>

$650,118, and $643,655, respectively.

Intangible Assets:  Customer and service accounts obtained through acquisitions
are amortized over their estimated useful lives of eight years.  Other
identified intangibles are amortized over periods not exceeding ten years. 
Covenants not to compete are amortized over the period stated in the agreements.
Goodwill is being amortized over a thirty year period except the goodwill
related to the Acquisition which is amortized over 15 years.  All intangible
assets are amortized using the straight-line method.  The Company adopted
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
(SFAS No.121). This statement establishes accounting standards for the
impairment of long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used and for long-lived assets and
certain identifiable intangibles to be disposed of. SFAS No. 121 requires these
assets to be reviewed for possible impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. The
Company evaluates the potential impairment of intangibles and other long-lived
assets by comparing the related undiscounted cash flow from operations to the
net book value of such assets. Any impairment would be the excess of net book
value over discounted future cash flow from operations. For these purposes, the
related cash flow is the earnings before taxes, depreciation, amortization, and
interest attributable to the intangibles and other long-lived assets whose
impairment is being assessed. 

Burner Service Contracts:  A contingent liability is provided for labor and
parts given free to customers during the years in which no revenue is received
from the customer.

Fair Value of Financial Instruments: Statement of Financial Accounting Standards
("SFAS") No. 107, "Disclosures About Fair Value of Financial Instruments,"
requires disclosures of fair value information about financial instruments,
whether or not recognized  in the balance sheet, for which it is practicable to
estimate that value. In cases where quoted market prices are not available, fair
values are based on estimates using present values or other valuation
techniques. Those techniques are significantly affected by the assumptions made
by management, including discount rate  and estimates of future cash flows. In
that regard, the derived fair value estimates cannot be substantiated by
comparison to independent markets and, in many cases , could not be realized in
immediate settlement of the instrument.

The carrying amount reported in the June 30, 1997 balance sheet approximates the
fair value for cash, accounts receivable and accounts payable. The fair value of
the Company's fixed rate notes payable are estimated using a discounted cash
flow analysis based  on rates of 15%-16% which would generate fair market values
ranging 

                                         F-10
<PAGE>

between $29,565,000 and $29,185,000. 

Reclassifications:  Certain amounts in the consolidated balance sheet for the
year ended June 30, 1996 have been reclassified to conform to the June 30, 1997
presentations. Additionally, certain amounts in the consolidated statements of
operations, changes in shareholder's equity and statements of cash flows for the
periods July 1, 1994 through December 15, 1994 and December 16, 1994 through
June 30, 1995, and the year ended June 30, 1996 have been reclassified to
conform with the June 30, 1997 presentation.  

Debt  Issuance Costs: The costs associated with the issuance of debt are
amortized utilizing the effective interest method over the term of the
underlying debt instrument. The terms of the Company's existing debt, incurred
in December 1994 and July 1996,  range from six to ten years.

Income Taxes: Deferred income taxes are provided for the temporary differences
between the financial statements and the tax basis of assets and liabilities,
except for goodwill in connection with  the Acquisition, which is not deductible
for tax purposes. Deferred income taxes relate primarily to depreciation
associated with property, plant, and equipment, allowances for bad debt and
various accruals of salaries and related benefits.           

Use of Estimates : The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.  

                                         F-11
<PAGE>


Note D--1997 Acquisitions--Allocation of Purchase Price

In addition to the Shore Stop Acquisition, the Company consummated another 10
acquisitions which involved the purchase of  certain assets of various retail
heating oil companies and gasoline stations during fiscal year 1997. These
acquisitions and the Shore Stop Acquisition were accounted for using the
purchase method of accounting and, therefore, the financial statements include
the results of operations of each acquired company from its acquisition date.
There were no acquisitions during fiscal year 1996. The cost of the acquisitions
in the current fiscal year was allocated as follows:
                                 
                                      Year Ended    
                                     June 30, 1997   
                              Shore Stop        Other  
                             ----------------------------
Customer and service 
  accounts                   $ 2,400,000    $     404,000   
Covenants not to compete         200,000          150,000   
Other Intangibles,                                                    
primarily Goodwill             8,980,000          534,000            
Property, Plant and Equipment  5,770,000          468,000  
                             -----------    -------------       
                             $17,350,000       $1,556,000  
                             -----------    -------------
                             -----------    -------------
                            

Note E--Shore Stop Acquisition

The following condensed presentation of unaudited pro forma
information was prepared to illustrate the estimated effects of the
Shore Stop Acquisition on the Company with the assumption that the
Shore Stop Acquisition occurred at July 1,1995:


                                            (000's)
                                     Twelve Months Ended
                                            June 30,         
                                    -----------------------
                                       1997         1996         
                                    -----------------------
    Pro forma total sales           $279,986     $ 281,846      
    Pro forma net loss                (6,444)       (1,352)


Note F--Debt

In connection with the 1994 Acquisition, the Company retired the
Predecessor's existing operating line of credit and primary bank term
loan and negotiated a new term loan and operating line of credit with
the Company's primary bank lender (the "Mortgage

                                    F-12
<PAGE>


Notes") on several properties located in Delaware, Maryland and West
Virginia were assumed by the Successor.  As of July 8, 1996, in
connection with funding of the Shore Stop Acquisition, the Company
amended and restated the Prior Credit Agreement (as amended and
restated, the "Credit Agreement") to increase the amount of term loan
borrowings outstanding thereunder from $34,450,000 to $54,450,000 and
the amount of revolving credit facility borrowings (including the
maximum drawing amount under outstanding letters of credit) available
from $12,000,000 to $13,000,000.  Borrowings under the Credit
Agreement are secured by a first lien on substantially all the assets
of the Company, except those properties located in Delaware, Maryland
and West Virginia securing the Mortgage Notes and those properties
located in Delaware, Maryland, and Virginia securing the Regent Note. 
Borrowings under the Credit Agreement are subordinated to the Mortgage
Notes and Regent Note on these properties.  As of June 30, 1997, the
amount of the revolving credit facility borrowings outstanding was
$6,400,000 and the maximum drawing amount under outstanding letters of
credit was $3,631,000.  During fiscal year 1997, the Company has paid
$4,486,000 of interest and $4,600,000 of principal on the term loan
under the Credit Agreement.

The Credit Agreement contains various provisions regarding events of
default and restrictive covenants, including, among others,
restrictions on new liens and indebtedness, restrictions on the sale
of assets, restrictions on mergers and consolidations, and a
prohibition on the payment of dividends.  In addition, at the end of
each quarter and/or fiscal year-end, the Company is required to
maintain a certain cumulative cash flow coverage ratio, minimum
tangible net worth, minimum working capital, specified maximum ratio
of funded debt to earnings before interest, taxes, depreciation and
amortization ("EBITDA") and debt service coverage ratio. 

In addition to borrowings under the Prior Credit Agreement, the
Company financed the 1994 Acquisition with $34 million of 14 1/2%
Senior Subordinated Notes due December 15, 2004 (the "Notes"). 
Interest on the Notes is payable semiannually on June 15 and December
15 of each year.  The Notes are subordinated to all existing and
future senior indebtedness of the Company.  The Indenture governing
the Notes (the "Indenture") contains certain restrictive covenants and
financial covenants similar to the Credit Agreement.

The Company has amended the Credit Agreement and Indenture on several
occasions, (including its amendment and restatement in connection with
the Shore Stop Acquisition), which among other things, revised certain
financial covenants contained therein. The Company is currently in
compliance with the Credit Agreement and the Indenture, as amended.
Subsequent to year end, the Company amended the agreement. See 
Note N -- Subsequent Events.

                                    F-13
<PAGE>


The outstanding balances, due dates and interest rates of debt at June
30, 1997 and 1996 were as follows:

                                    June 30,       June 30,          
                                      1997           1996           Rate    
                                  ------------------------------------------
Term loan due December 31, 2000   $16,100,000     $17,200,000   Prime + 1.5%
                                                               or Eurodollar
                                                                Rate + 2.75%
  
Term loan due December 31, 2002   $19,000,000     $17,250,000   Prime + 2%
                                                               or Eurodollar
                                                                Rate + 3.25% 

Term loan due December 31, 2003   $14,750,000          ---     Prime + 2.25% 
                                                              or Eurodollar 
                                                                Rate + 3.5%

Mortgage note due April 5, 2001      $259,351        $324,905   7.75%       
                                                      
Promissory Note due July 11, 2005  $1,500,000          ---      8.0% 

Senior Subordinated Notes due
  December 15, 2004, net of
  unamortized bond discount
  of $2,366,312                   $31,633,688     $31,451,581   14.5%

Line of Credit due December        $6,400,000     $2,600,000    Prime + 1.5%
  31, 1998                                                     or Eurodollar
                                                                Rate + 2.75% 
   
Other long-term debt due                                        7.0% through 
  through 2006                      $ 913,031       $765,402    9.5%
                                  -----------     ----------

Total debt                         $90,556,070   $69,591,888

Current portion of
  long-term debt                   ($5,448,956)  ($4,240,893)

Long-term debt, less
  current portion                 $ 85,107,114    $65,350,995
                                  ------------   ------------
                                  ------------   ------------

The term loan interest is payable either quarterly or based on the
maturity of the Eurodollar Rate Loans.  The Senior Subordinated Notes
interest is paid semi-annually.  All other interest payments are made
monthly.

                                    F-14
<PAGE>


As noted above, the Company's term loan and line of credit are based
on either the Prime rate or Eurodollar rate.  The Company decides
whether to use the Eurodollar or Prime rate based on the current
market interest rates during the year.

The prime rate was 8.50% and 8.25% at June 30, 1997 and 1996,
respectively.  The average Eurodollar rate at June 30, 1997 and 1996
was 5.63% and 5.5%, respectively.

The Company entered into a interest rate swap covering the term loans
outstanding at January 17, 1996.  The amount of the swap coverage is
reduced as payments of principle on the term loan are made.  The
interest rate provides a fixed Eurodollar rate of 5.22% for the term.
The fair market value of this swap at June 30, 1997  was $134,527. On
November 5, 1996, the Company entered into  another interest rate swap
agreement covering the additional term loan amounts outstanding on
that date. The interest rate provides a fixed Eurodollar rate of 6.2% 
for the term of the agreement which expires on December 31, 1999. The
fair market value of this swap  at June 30, 1997 was $43,809.  

The Company has available lines of credit.  The maximum and average
amounts outstanding (including the maximum drawing amount under
Outstanding Letters of Credit)and the maximum available for the fiscal
years are as follows:
                            Year Ended June 30
                             1997        1996    
                         -------------------------
Maximum Outstanding      $8,000,000   $ 10,800,000
Average Outstanding      $2,659,000   $  2,850,000   
Maximum Available       $16,000,000   $ 16,000,000


The operating line of credit has a commitment fee of 1/2% per annum on
the unused portion of the available amount. The Company paid $36,012,
$44,281, $15,385, and $13,015 for the years ended  June 30, 1997 and
1996 and during the periods December 16, 1994 through June 30, 1995
and during the periods July 1, 1994 through December 15, 1994,
respectively. 

The Company paid $10,711,022, $9,398,476, $5,054,455 and $1,239,657 in
interest for the years ended June 30, 1997 and 1996 and during the
periods December 16, 1994 through June 30, 1995 and July 1, 1994
through December 15, 1994, respectively.  Principal payments due
during each fiscal year ended June 30 under all loan agreements are as
follows:
         1998                      $ 5,448,968
         1999                       11,768,176
         2000                        6,544,678
         2001                        8,143,626
         2002                        8,289,321
         Thereafter                 50,361,301
                                   -----------
                                   $90,556,070           
                                   -----------
                                   -----------

                                    F-15
<PAGE>

Seven letters of credit, totaling $3,631,299, were outstanding at June
30, 1997 which reduce the amounts available under the line of credit. 
These letters expire on or before July 31, 1998.  Management believes
none of these letters of credit will be called in the future.

Note G--Related Party Transactions

In connection with the change of control in December 1994, the Company
paid certain transaction-related fees and expense reimbursements to
entities owned by certain of the current directors and controlling
shareholders of the Company.  Such payments totaled $1,172,360.  A
quarterly management fee is also paid to entities owned by certain of
the current directors and controlling shareholders.  The Company paid
$300,000 for fiscal years 1997 and 1996.

NOTE H--Income Taxes

The components of income tax expense (benefit) are as follows:

                                SUCCESSOR                      PREDECESSOR 
                     -----------------------------------      -------------
   
                     YEAR ENDED    YEAR ENDED    DEC 16, 1994- JUL 1, 1994-
                     JUNE 30, 1997 JUNE 30,1996  JUN 30, 1995  DEC 15, 1994
                     ------------- ------------ -------------  ------------
Federal income taxes
    Current         $   (61,966)  $   159,438   $    11,469    $  (807,313)
    Deferred         (3,381,389)   (1,609,321)     (605,188)       (78,419)
State income taxes     (206,741)       21,810         1,687       (118,723)
                    -----------   -----------   -----------    -----------
                    $(3,650,096)  $(1,428,073)  $  (592,032)   $(1,004,455)
                    -----------   -----------   -----------    -----------
                    -----------   -----------   -----------    -----------

     A reconciliation of the difference between income tax (benefit)    
     expense at the statutory federal rate and the effective rate is as 
     follows:                                                           

                                   SUCCESSOR                       PREDECESSOR
                       ------------------------------------------ -------------
                       YEAR ENDED     YEAR ENDED     DEC 16, 1994-  JUL 1,1994-
                       JUNE 30,1997   JUN 30, 1996   JUN 30, 1995   DEC 15,1994
                       ------------   -----------    ------------   -----------
Statutory federal rate   
  (34%)                   $(3,433,203)  $(1,731,690)   $ (700,332)  $  (879,819)
State income taxes, net 
  of federal benefit         (504,883)     (254,660)     (102,990)    (140,400)
Goodwill-pre acquisition         -0-          -0-          12,480       12,963
Goodwill-post acquisition     499,980       500,073       193,419         -0- 
Other, n et                  (211,990)       58,204         5,391        2,801
                          -----------   -----------   -----------   -----------
Income tax (benefit) 
  expense                 $(3,650,096)   $(1,428,073) $  (592,032)  $(1,004,455)
                          -----------   -----------   -----------   -----------
                          -----------   -----------   -----------   -----------

                                      F-16
<PAGE>

The components of deferred taxes are as follows at June 30, 1997:

    Deferred tax liabilities:
         Depreciation - PP&E                $  443,012
         Step-up in assets,
           excluding goodwill                7,198,709
                                            ----------
          Total                             $7,641,721  
    Deferred tax assets:
         Allowance for bad debts               262,342
         Accrued Vacation                      109,807
         Alternative Minimum Tax               121,900
          Deferred Revenue                     508,950
          Reserve for Liabilities              417,000
          Net operating loss carryover         865,282
         Warranty reserves                     283,082
          Other                                460,898
                                            ----------
          Total                              3,029,261
                                            ----------
    Net deferred tax liabilities            $4,612,460
                                            ----------
                                            ----------

Deferred income taxes are provided for the temporary differences between
the financial statements and the tax basis of assets and liabilities,
except for goodwill in connection with the 1994 Acquisition, which is not
deductible for tax purposes.  The Company received income tax refunds of
$132,948, $880,366, $199,504  in the years ended June 30, 1997 and 1996 and
the periods December 16, 1994 through June 30, 1995, respectively.  The
Company made income tax payments of $165,467, $42,000, $107,189, and
$278,300 in the years ended June 30, 1997 and 1996, the periods December
16, 1994 through June 30, 1995 and July 1, 1994 through December 15, 1994,
respectively.  

The Company files a consolidated federal income tax return with GHI as its
parent corporation.  GHI is ultimately liable for future federal income tax
liabilities of the Company.  The Company's federal tax provision is
calculated on a separate return basis.  The Company files separate company
state income tax returns and is ultimately liable for its future state
income tax liabilities.

The Company has net operating losses of $2,218,671 that expire in the year
2012 and alternative minimum tax credits of $312,566 that expire beginning
in the year 2007.

Note I--Environmental Regulations

Management believes that the environmental reserve  recorded as of June 30,
1997 is sufficient to cover all known liabilities under which it is
probable that the Company will be obligated to undertake remediation.
Management's assessment of the environmental liability is based, in part,
on two comprehensive environmental studies conducted on different segments
of the Company's business by independent environmental consultants that
were completed during fiscal year 1995 and fiscal year 1996.   Management
is not aware of

                                      F-17
<PAGE>

any additional significant environmental exposures since the completion of 
these studies.

The Company maintains a program to routinely detect releases of gasoline or
other regulated substances from underground storage tanks it owns or
operates.  The Company employs groundwater monitoring wells and/or
sophisticated in-tank monitoring devices at a majority of its Company
operated stations and this information is available on-line through the
computer at the Company's headquarters. Management believes that contingent
liabilities other than those recorded in the financial statements will not
have a material adverse effect on the Company's financial position or
results of operations.

Note J--Pension and Other Benefit Plans

As part of an acquisition agreement, the Company agreed to provide
postretirement health and life benefits to certain retirees and spouses of
an entity acquired in 1987.  The net present value of these postretirement
benefits has been established as a liability for all periods presented. 
Under this agreement, the Company pays 100% of the health insurance
premiums for 33 retirees and spouses, 100% of the life insurance premiums
for 15 retirees and spouses.  There were 33 retirees and spouses at June
30, 1997 and the Company's portion of the retirees' premiums approximated
$36,000, $37,000, and $36,000 during the years ended June 30, 1997, 1996,
and 1995, respectively.

The actuarial present value of the accumulated post-retirement benefit
obligation ("APBO") was approximately $560,000 as of June 30, 1997.  Net
post-retirement benefit expense for the year ended June 30, 1996 was
$39,000.

Effective January 1, 1988, the Company adopted "The Griffith Consumers
Company 401(k) Plan and Trust" (the "Plan").  All full-time employees are
eligible to participate in the Plan after one year of employment.  Until
December 31, 1992, each eligible participant could elect to contribute 2%
to 15% of compensation, and the Company contributed an equal amount up to
2% of the participant's total compensation.  Effective January 1, 1993, the
Company contribution was increased to 3%.  Total contributions charged to
expense for the years  ended June 30, 1997 and 1996 and the periods
December 16, 1994 through June 30, 1995 and July 1, 1994 through December
15, 1994  were $334,000, $286,000, $141,000, and $119,000, respectively.

                                      F-18
<PAGE>

Note K--Allowance for Bad Debts

Activity in the allowance for bad debts is as follows:

                                       YEAR ENDED June 30
                            1997         1996            1995 
                        ---------      --------       ---------

Beginning Balance       $ 691,479      $ 463,398      $ 552,073
Provision for bad debts   322,118        336,000        188,000
Accounts written off,
  net of recoveries      (340,924)      (107,919)      (276,675)
                        ---------      ---------      ---------
Ending balance          $ 672,673      $ 691,479      $ 463,398 
                        ---------      ---------      ---------
                        ---------      ---------      ---------

Note L--Commitments and Contingencies

The Company leases office facilities, petroleum product storage facilities,
computer equipment and transportation equipment.  The Company's operating
leases range in length from one to six years.  Certain leases have options
for renewal.

Future minimum payments, by year and in the aggregate, under noncancelable
operating leases with terms of one year or more, consist of the following:

           YEAR ENDING           TOTAL OPERATING
            JUNE 30,                  LEASES    
           -----------           ---------------

           1998                     $ 2,454,389 
           1999                       1,605,988
           2000                       1,004,597
           2001                         764,144
           2002                         328,947
           Thereafter                     -0-  
                                    -----------
           Total minimum
           lease payments           $ 6,158,065
                                    -----------
                                    -----------

Rental expense for all operating leases for the years ended June 30, 1997
and 1996 and the periods December 16, 1994 through June 30, 1995 and July
1, 1994 through December 15, 1994 was $2,527,459, $1,147,110, $643,929, and
$544,863, respectively.  The Company derives rental income primarily from
real estate leases to dealers.  Rental income for the years ended June 30,
1997 and 1996 and the periods December 16, 1994 through June 30, 1995 and
July 1, 1994 through December 15, 1994  was $218,467, $212,216, $109,580,
and $88,395 respectively.

The Company purchases petroleum products pursuant to supply contracts or on
the spot market.  At June 30, 1997, the Company was a party to 14 supply
contracts which are effective for periods of up to three years.  These
contracts establish maximum amounts of

                                      F-19
<PAGE>


petroleum products which a supplier is required to provide but the Company
is not required to purchase.  The price approximates market at time of
purchase.  Historically, the Company has procured approximately one-half of
its petroleum products under these supply contracts and the balance on the
spot market.                 

The Company has 112 contracts with terms varying from two to twenty years
to supply nonaffiliated gasoline stations with petroleum products.  These
contracts establish minimum amounts of petroleum products which the Company
will supply.  The price approximates market at time of purchase.

Company management believes the probability is remote that the outcome of
litigation and other proceedings relating to Griffith Consumers Company and
its subsidiaries will have a material adverse impact on the results of the
Company's operations or its financial position.

Note M--Subsidiaries' Condensed Financial Statement Data

Griffith's wholly owned subsidiaries, Carl King, Inc. ("King"), Frederick
Terminals, Inc. ("Frederick"), and Shore Stop Corporation ("Shore Stop" and
, collectively with King and Frederick, the "Subsidiaries") are full,
unconditional joint and several guarantors  on the Notes. The only
subsidiaries of Griffith are King, Frederick, Shore Stop, and Regent
Transport, Inc.  This footnote sets forth the combined condensed balance
sheet of King, Frederick, and Shore Stop as of June 30, 1997 and June 30,
1996, the combined condensed statements of operations and cash flows for
the years ended June 30,1997 and June 30, 1996, and changes in
shareholder's equity for the period from June 30, 1994 through June 30,
1997.  

In accordance with Staff Accounting Bulletin No. 55, the separate financial
statement data reflects all of the expenses that the Company incurred on
each Subsidiary's behalf.  Except for certain general and administrative
expenses and income taxes, expenses are separately identifiable and,
therefore, charged directly to the respective Subsidiary.  Common general
and administrative expenses are allocated based on management's assessment
of the actual costs associated with the operations; and income tax expense
is provided in the financial data on a separate return basis.  Management
believes that the methods used to allocate expenses to each Subsidiary are
reasonable. 

                                      F-20

<PAGE>
     CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
                       COMBINED CONDENSED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                                     -------------  -------------
                                                                                        JUNE 30        JUNE 30
                                                                                         1997           1996
                                                                                     -------------  -------------
  <S>                                                                                <C>            <C>
  Current assets...................................................................  $   8,420,729  $   5,215,700
  Net property, plant and equipment................................................     19,322,128     13,500,023
  Net intangibles..................................................................     23,416,596     12,496,263
  Other............................................................................      2,372,638        566,783
                                                                                     -------------  -------------
                                                                                     $  53,532,091  $  31,778,769
                                                                                     -------------  -------------
                                                                                     -------------  -------------
Liabilities and Shareholder's Equity:
  Current liabilities..............................................................  $  12,303,935  $   5,940,506
  Due to Parents...................................................................      4,142,706      5,335,763
  Long-term debt, less current portion.............................................     34,681,538     15,143,539
  Other liabilities................................................................      1,117,377      1,555,511
  Shareholder's equity.............................................................      1,286,535      3,803,450
                                                                                     -------------  -------------
                                                                                     $  53,532,091  $  31,778,769
                                                                                     -------------  -------------
                                                                                     -------------  -------------
</TABLE>
 
     CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
                  COMBINED CONDENSED STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                                                                    --------------  -------------
                                                                                    JUL 1, 1996 -   JUL 1, 1995 -
                                                                                    JUNE 30, 1997   JUNE 30, 1996
                                                                                    --------------  -------------
<S>                                                                                 <C>             <C>
Total sales.......................................................................  $  182,587,779  $  96,811,737
Cost of sales.....................................................................     155,356,837     84,057,750
                                                                                    --------------  -------------
  Gross profit....................................................................      27,230,942     12,753,987
Selling, general, and administrative expenses.....................................      22,077,719      8,398,315
Depreciation expense..............................................................       4,206,072      2,800,950
Amortization expense..............................................................       2,222,540        875,467
                                                                                    --------------  -------------
  Operating (loss) income.........................................................      (1,275,389)       679,255
  Interest expense................................................................       4,160,745      2,304,060
  Other income....................................................................       1,302,505        238,749
                                                                                    --------------  -------------
  Loss before income tax benefit..................................................      (4,133,629)    (1,386,056)
  Income tax benefit..............................................................      (1,616,714)      (448,087)
                                                                                    --------------  -------------
  Net loss........................................................................  $   (2,516,915) $    (937,969)
                                                                                    --------------  -------------
                                                                                    --------------  -------------
</TABLE>
 
                                     F-21

<PAGE>
     CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
         COMBINED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
 
<TABLE>
<CAPTION>
                                                                          INVESTMENT     RETAINED       TOTAL
                                                                              BY         EARNINGS    SHAREHOLDER'S
                                                                            PARENT       (DEFICIT)      EQUITY
                                                                         ------------  ------------  ------------
<S>                                                                      <C>           <C>           <C>
PREDECESSOR
Balance June 30, 1994..................................................  $  5,792,610  $  2,031,209   $7,823,819
Net Income.............................................................       --            375,524      375,524
                                                                         ------------  ------------  ------------
Balance December 15, 1994..............................................     5,792,610     2,406,733    8,199,343
Stock Redemption.......................................................       --         (2,406,733)  (2,406,733)
                                                                         ------------  ------------  ------------
Balance December 16, 1994..............................................  $  5,792,610       --        $5,792,610
                                                                         ------------  ------------  ------------
                                                                         ------------  ------------  ------------
SUCCESSOR
Net Loss...............................................................       --         (1,051,191)  (1,051,191)
                                                                         ------------  ------------  ------------
Balance June 30, 1995..................................................       --         (1,051,191)   4,741,419
Net Loss...............................................................       --           (937,969)    (937,969)
                                                                         ------------  ------------  ------------
Balance June 30, 1996..................................................       --         (1,989,160)   3,803,450
Net Loss...............................................................       --         (2,516,915)  (2,516,915)
                                                                         ------------  ------------  ------------
Balance June 30, 1997..................................................       --         (4,506,075)   1,286,535
</TABLE>
 
     CARL KING, INC., FREDERICK TERMINALS, INC., AND SHORE STOP CORPORATION
                   COMBINED CONDENSED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                                                      JUL 1, 1995-
                                                                                       JUL 1, 1996-     JUNE 30,
                                                                                       JUNE 30, 1997      1996
                                                                                       -------------  ------------
<S>                                                                                    <C>            <C>
Operating activities.................................................................  $   4,300,832  $  1,994,347
Investment activities................................................................    (24,719,233)      (92,128)
Financing activities.................................................................     20,406,915      (948,985)
                                                                                       -------------  ------------
(Decrease) Increase in cash..........................................................        (11,486)      953,234
Cash at beginning of year............................................................        953,234       --
                                                                                       -------------  ------------
Cash at end of year..................................................................  $     941,748  $    953,234
                                                                                       -------------  ------------
                                                                                       -------------  ------------
</TABLE>
 
                                     F-22


<PAGE>

Note N--Subsequent Events

On August 29, 1997, the Company amended and restated the Credit Agreement to 
increase the amount of term borrowings outstanding thereunder from 
$49,850,000 to $50,100,000. The amendment modified the term loan's repayment 
schedule and revised certain financial covenants contained therein. The 
Company believes that it will be  able to comply with all covenants in place 
during fiscal year 1998. Due to the seasonal nature of the heating oil 
business, the potential impact of warmer than normal winter temperatures, 
and prevailing market conditions, actual financial results could differ from 
those originally anticipated.

The revised principal payments due  during each fiscal year ended June 30
under all loan agreements are as follows:

                   1998           $2,009,553
                   1999            8,578,761
                   2000            2,963,988
                   2001            7,103,146
                   2002            8,789,321
                   2003           12,312,184
                   Thereafter     49,049,117
                                  ----------
                                  $90,806,070
                                  ----------
                                  ----------

                                      F-23