<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K/A

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

[X]    For the fiscal year ended DECEMBER 31, 1999 OR

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

       For the transition period from _________________ to __________________

                             COMMISSION FILE NUMBER
                                     0-25821

                           STATIA TERMINALS GROUP N.V.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

     NETHERLANDS ANTILLES                                       52-2003016
-------------------------------                              ----------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                             Identification No.)

                              C/O COVENANT MANAGERS
                                L.B. SMITHPLEIN 3
                          CURACAO, NETHERLANDS ANTILLES
                                (011) 5993-82300
          -------------------------------------------------------------
          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive offices)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:   None

           TITLE OF CLASS                 NAME OF EXCHANGE ON WHICH REGISTERED
           --------------                 ------------------------------------

SECURITIES REGISTERED PURSUANT TO
    SECTION 12(g) OF THE ACT:                    Class A common shares

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

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation 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 this Form 10-K/A or any
amendment to this Form 10-K/A. __________

         The aggregate market value of registrant's Class A common shares held
by nonaffiliates was approximately $41.1 million as of March 16, 2000.

         As of March 16, 2000 7,000,400 Class A common shares of the registrant
were outstanding.


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                           STATIA TERMINALS GROUP N.V.

                          ANNUAL REPORT ON FORM 10-K/A

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
PART I.      .....................................................................................................1

Item 1.  Business.................................................................................................1
Item 2.  Properties..............................................................................................12
Item 3.  Legal Proceedings.......................................................................................15
Item 4.  Submission of Matters To a Vote of Security Holders.....................................................15

PART II.     ....................................................................................................16

Item 5.  Market For Registrant's Common Equity and Related Security Matters......................................16
Item 6.  Selected Financial Data.................................................................................18
Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations...................22
Item 7A. Quantitative and Qualitative Disclosures About Market Risk..............................................40
Item 8.  Financial Statements and Supplementary Data.............................................................40
Item 9.  Changes In and Disagreements With Accountants On Accounting and Financial Disclosure....................40

PART III.    ....................................................................................................41

Item 10. Directors and Executive Officers of the Registrant......................................................41
Item 11. Executive Compensation..................................................................................46
Item 12. Security Ownership of Certain Beneficial Owners and Management..........................................52
Item 13. Certain Relationships and Related Transactions..........................................................53

PART IV.     ....................................................................................................55

Item 14. Exhibits, Financial Statement Schedules and Reports On Form 8-K.........................................55


</TABLE>


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         THIS ANNUAL REPORT ON FORM 10-K/A (THE "REPORT") CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF 27A OF THE SECURITIES ACT OF
1933, AS AMENDED. DISCUSSIONS CONTAINING SUCH FORWARD-LOOKING STATEMENTS MAY BE
FOUND IN ITEMS 1, 2, 3 AND 7 HEREOF, AS WELL AS WITHIN THIS REPORT GENERALLY. IN
ADDITION, WHEN USED IN THIS REPORT, THE WORDS "BELIEVES," "ANTICIPATES,"
"EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES.
ACTUAL RESULTS IN THE FUTURE COULD DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE
FORWARD-LOOKING STATEMENTS AS A RESULT OF FLUCTUATIONS IN THE SUPPLY OF AND
DEMAND FOR CRUDE OIL AND OTHER PETROLEUM PRODUCTS, CHANGES IN THE PETROLEUM
TERMINALING INDUSTRY, ADDED COSTS DUE TO CHANGES IN GOVERNMENT REGULATIONS
AFFECTING THE PETROLEUM INDUSTRY, THE LOSS OF A MAJOR CUSTOMER OR CUSTOMERS, THE
FINANCIAL CONDITION OF OUR CUSTOMERS, INTERRUPTION OF OUR OPERATIONS CAUSED BY
ADVERSE WEATHER CONDITIONS, THE CONDITION OF THE U.S. AND CERTAIN FOREIGN
ECONOMIES, AND OTHER MATTERS INCLUDED IN THIS REPORT. WE DO NOT UNDERTAKE ANY
OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO THESE
FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT ANY FUTURE EVENTS OR
CIRCUMSTANCES.

         FREQUENTLY IN THIS REPORT, ESPECIALLY WHEN DISCUSSING OUR OPERATIONS,
WE REFER TO OURSELVES, STATIA TERMINALS GROUP N.V. AND OUR SUBSIDIARIES, AS "WE"
OR "US".

                                     PART I.

                                ITEM 1. BUSINESS

                            INTRODUCTION AND HISTORY

         We believe we are one of the five largest independent marine
terminaling companies in the world as measured in terms of storage capacity. At
the end of 1999, our tank capacity was 18.7 million barrels. We believe we are
the largest independent marine terminal operator handling crude oil imported
into the Eastern United States and Canada. Our two terminals are strategically
located at points of minimal deviation from major shipping routes. We provide
terminaling services for crude oil and refined products to many of the world's
largest producers of crude oil, integrated oil companies, oil traders, refiners,
petrochemical companies and ship owners. Our customers include Saudi Aramco and
Tosco. Our customers transship their products through our facilities to the
Americas and Europe. We own and operate one storage and transshipment facility
located on the island of St. Eustatius, Netherlands Antilles, and one located at
Point Tupper, Nova Scotia, Canada. In connection with our terminaling business,
we provide related value-added services, including crude oil and petroleum
product blending and processing, berthing of vessels at our marine facilities,
and emergency and spill response. In addition to our terminaling services, we
sell bunkers, which is the fuel marine vessels consume, and bulk product to
various commercial interests.

         Our operations began in 1982 as Statia Terminals N.V., with an oil
products terminal located on the island of St. Eustatius, Netherlands Antilles.
In 1984, CBI Industries, Inc., an industrial gases and contracting services
company, acquired a controlling interest in Statia Terminals N.V. We purchased
Statia Terminals Southwest, Inc. with its facility at Brownsville, Texas, in
1986. In 1990, CBI Industries became the sole owner of Statia Terminals N.V. and
Statia Terminals Southwest. In 1993, we acquired the remaining shares not then
owned by us of Statia Terminals Point Tupper, Incorporated, located at Point
Tupper, Nova Scotia, Canada. In 1996, Praxair, Inc. acquired CBI Industries. In
November 1996, Castle Harlan Partners II L.P., members of our management and
others acquired from Praxair all of the outstanding capital stock of Statia
Terminals N.V., Statia Terminals, Inc., their subsidiaries and certain of their
affiliates. Castle Harlan Partners II L.P. is a private equity investment fund
managed by Castle Harlan, Inc., a private merchant bank. At the same time,




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Statia Terminals Point Tupper, Incorporated was amalgamated into Statia
Terminals Canada, Incorporated. Statia Terminals Group N.V. and certain of its
subsidiaries were organized for purposes of facilitating the acquisition. In
July 1998, we sold Statia Terminals Southwest to an unaffiliated third party
purchaser.

         On April 28, 1999, we completed our initial public equity offering of
7.6 million Class A common shares. The offering price was $20 per share raising
gross proceeds of $152 million. The gross proceeds of the offering were used
primarily to redeem all of our outstanding Series A, B, C, D and E preferred
stock and pay accrued dividends, underwriters' discounts, fees, and other costs
directly associated with the offering. In addition, proceeds from the offering
were invested and used during May 1999, along with existing cash, to repurchase
in the open market a principal amount of $34 million of the 11 3/4% First
Mortgage Notes previously issued by two of our subsidiaries. In connection with
the repurchase of the mortgage notes, we incurred a $4.7 million loss on the
early extinguishment of debt. Subsequent to the offering, during 1999, we
declared distributions on our Class A common and Class B subordinated shares
aggregating $0.7665 per share. Only the declared distributions on our Class A
common shares were paid during 1999.

         Our day-to-day operations are managed at the respective terminal
locations. Our management team and employee base possess a diverse range of
experience and skills in the terminaling industry. This experience has permitted
us to better understand the objectives of our customers and to forge alliances
with those customers at our terminals to meet those objectives. Thus, we believe
that our operations extend beyond the traditional approach to terminaling. We
are a premier provider of the core services offered by other terminal operators.
In addition, unlike many of our competitors, we refrain from competing with our
customers and provide ancillary, value-added services tailored to support the
particular needs of our customers.

                                    INDUSTRY

         TERMINALING

         The petroleum terminaling industry consists of two market segments. One
segment is characterized by the ownership and management of terminals inland
along major crude oil or petroleum product pipelines. This segment is primarily
engaged in the distribution of crude oil to inland refineries or of petroleum
products via pipeline, rail or truck. The second segment of the industry is
marine terminaling. This segment is primarily engaged in bulk storage and
transshipment of crude oil and petroleum products of domestic and overseas
producers, integrated oil companies, traders, refiners and distributors.
"Transshipment" is the process whereby customers transfer their products either
from a vessel to storage tanks for subsequent transfer to other vessels for
delivery to other destinations or from one ship to another ship across the dock.
We are primarily engaged in marine terminaling.

         A substantial portion of crude oil and petroleum products storage
terminals are "captive," in other words, they are owned by producers, refiners
and pipeline operators and used almost exclusively for their own operations. The
independent terminaling operator segment of the marine terminaling industry
which is described in this Report excludes these captive terminals. Captive
terminal storage is only occasionally made available to the general market and
lacks some of the competitive advantages of independent operations, the most
important of which is confidentiality.

         Companies generally use marine liquids terminals for various reasons
including:



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         o  to take advantage of economies of scale by transporting crude oil or
            petroleum products in bulk to a terminal as near to the ultimate
            destination as economically possible;

         o  to blend crude oil or petroleum products to meet market
            specifications;

         o  to process products stored by their customers to add value for a
            specific downstream market;

         o  to temporarily store crude oil or petroleum product; and

         o  to access fuel, in a process known as "bunkering," and supplies for
            consumption by marine vessels.

         BULK CARGO MOVEMENT

         Due to significant economies of scale, petroleum companies ship crude
oil from locations such as the Middle East, North Sea and West Africa in
very-large or ultra-large crude carriers to a transshipment point such as one of
our terminals. These very-large and ultra-large crude carriers, however, are too
large to deliver their cargo directly to many ports, including virtually all
U.S. ports. Therefore, most petroleum companies are forced to either partially
or completely "lighter" their cargo, which is the process by which liquid cargo
is transferred to smaller vessels, usually while at sea, or transship their
cargo through a terminal to smaller vessels that can enter U.S., Canadian and
Caribbean ports. Both of our facilities can handle substantially all of the
world's largest fully-laden very-large and ultra-large crude carriers.

         We believe that terminaling offers several advantages over lightering.
Terminaling generally provides more flexibility in the scheduling of deliveries
and allows our customers to deliver their products to multiple locations.
Terminaling is also generally safer and more environmentally sound than
lightering which is conducted at sea and may be impacted by vessel movement,
adverse weather and sea conditions. Lightering in U.S. territorial waters also
creates a risk of liability for owners and shippers of oil. Under the U.S. Oil
Pollution Act of 1990 and other state and federal legislation, significant
liability is imposed for spills in U.S. territorial waters. In Canada, similar
liability exists under the Canadian Shipping Act. Terminaling also provides
customers with the ability to access value-added terminal services.

         Lightering generally takes significantly longer than discharging at a
terminal. For example, a fully laden ultra-large crude carrier may require four
or more days to fully discharge by lightering, but only 24 to 48 hours to fully
discharge at our terminals. In addition, terminals allow oil producers to store
oil and benefit from value-added services. The advantages of terminaling may be
offset in market conditions where the direct costs of terminaling are higher
than those of lightering. The direct cost differential of lightering versus
terminaling changes as charter rates change for ships of various sizes. Under
current market conditions, lightering in most instances costs less than
terminaling, primarily by allowing very-large and ultra-large crude carriers to
cover the longest portion of the total journey.

         BLENDING

         Increasingly stringent environmental regulations create additional
demand for facilities that can blend a variety of components into finished
products that meet such regulations as well as meet customer specific
requirements. Precise blending requires specialized equipment, expertise, and
availability of a full range of blendstocks. The evolving reformulated gasoline
market in the U.S., resulting primarily from emission-reduction regulations,
including the U.S. CLEAN AIR ACT, as amended, tightening specifications for
distillates and the increasing need for blended residual fuel are expected to




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enhance the growth of the product blending segment of the terminaling industry.
We regularly blend components to make finished gasolines and various grades of
residual fuel. Fuel oils are also blended for utilities and other commercial
users, and crude oils are blended for refiners.

         STRATEGIC STORAGE

         Some crude oil producers, integrated oil companies, refiners and others
have a continuing need to store crude oil and petroleum products to supply a
specific downstream demand, such as to supply feedstock to a refinery. The need
for strategic storage is generally not as sensitive to changes in market
conditions as is seasonal and opportunity storage and usually results in our
being able to negotiate longer term contracts. We have several customers who use
our facilities for strategic purposes. In Canada, a large independent U.S.
refiner leases and utilizes eight tanks aggregating 3.6 million barrels for
gathering crude oil from various locations to feed two of its refineries on the
U.S. East coast. A second customer, consisting of a consortium of major oil
companies, sends natural gas liquids via pipeline to certain processing
facilities on land leased from us. After processing, certain products are stored
with us under a long-term contract. At St. Eustatius, an oil producer leases 5.0
million barrels of storage from us and uses these tanks to supply its customers.
Contracts with our most significant strategic storage customers are discussed
below under the heading "CUSTOMERS."

         SEASONAL AND OPPORTUNITY STORAGE

         Refiners, traders and others use storage facilities to take advantage
of seasonal movements and anomalies in the crude oil and petroleum products
markets. When the forward prices for crude oil and petroleum products that we
store fall below spot prices for any length of time, this market condition is
called "backwardation." When forward prices exceed spot prices for any length of
time the market is said to be in "contango." When crude oil and petroleum
product markets are in contango by an amount exceeding storage costs, the time
value of money, the cost of a second vessel plus the cost of loading and
unloading at a terminal, the demand for storage capacity at terminals usually
increases. When crude oil and petroleum products markets are in backwardation
for any length of time, the traditional users of terminal storage facilities are
less likely to store product, thereby reducing storage utilization levels.
Historically, heating oil has been in contango during the summer months and
gasoline has been in contango during the winter months. As a result, demand for
heating oil storage is typically strongest during the summer, fall and winter
months and demand for gasoline storage is typically strongest in the winter,
spring and summer months. However, during the summer of 1999 and winter of
1999/2000, the heating oil and gasoline markets have not followed this
historical pattern, and we can give no assurance that the crude oil and
petroleum products markets will follow these patterns in the future.

         From the beginning of 1995 to late 1997, all segments of the crude oil
and petroleum products markets were in a period of backwardation which we
believe adversely impacted our business. Several factors contributed to this
backwardation period, including anticipation of incremental crude oil supplies
entering the market from Iraq and elsewhere, a shift to "just in time inventory"
positions by many oil companies, and strong demand for petroleum products.

         Beginning in late 1997 and until the current period of backwardation
started during the spring of 1999, all segments of the crude oil and petroleum
products markets were generally in contango. As a result, previously available
storage tank capacity began to diminish, and storage tank lease rates began to
rise during 1998. The shift toward contango was due in part to the worldwide
excess supply of crude oil which existed at that time, which resulted in a sharp
decrease in spot prices for most petroleum products.



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         Members of the Organization of Petroleum Exporting Countries ("OPEC"),
in conjunction with certain non-OPEC members, signed an agreement in March 1999
to reduce worldwide crude oil production with the intent of supporting market
prices for crude oil and petroleum products. In accordance with the one year
agreement which became effective April 1, 1999, the signatories have
significantly reduced their production of crude oil which has resulted in a
significant increase in spot prices and a reduction of crude oil and petroleum
products inventories. The signatories are scheduled to meet in late March 2000
to discuss the status of the agreement. Since shortly after the agreement was
reached in March 1999, generally all segments of the crude oil and petroleum
products markets have been in particularly severe backwardation. We believe that
our business has been adversely impacted during the current backwardation
period.

         BUNKER SALES

         "Bunkering" is the sale and delivery of fuels to marine vessels to be
used for their own engines. The customer base and suppliers of bunker fuel are
located worldwide. Sales of bunker fuel, which includes diesel oil, gas oil and
intermediate fuel oil, are driven primarily by the proximity of the supply
location to major shipping routes and ports of call; the amount of cargo carried
by marine vessels; and the price, quantity and quality of bunker fuel.

         Bunker fuel is sold under international standards of quality that are
recognized by both fuel suppliers and ship operators. Raw materials for bunker
fuels are purchased in bulk lots of various grades and then blended to meet
customer specifications. Each supplier is responsible for quality control and
other merchantability aspects of the fuel they sell.

         Traditionally, the bunker fuel business was concentrated in those ports
with high ship traffic and near primary sources of refined marine fuels. In
recent years, the number of refiner/suppliers in many ports has diminished and
stricter environmental laws have been enacted, primarily in the U.S., Canada and
Europe. As a result, the sale of bunker fuel has increased at locations outside
the U.S., Canada and Europe.

         PROCESSING

         Atmospheric distillation is a process that applies heat to separate the
hydrocarbons in crude oil into certain petroleum products. Most simple
distillation units, including ours, produce at least three product streams:
naphtha, distillate (heating oil) and residual fuel. The profitability of
atmospheric distillation is dependent on feedstock, operating and other costs
compared to the value of the resulting products. From time to time, we process
petroleum products with our atmospheric distillation unit.

                              SERVICES AND PRODUCTS

         We provide storage services which are designed to meet our customers'
specifications and a full range of terminaling-related services, including
product blending, heating, mixing, separation, and removal of water and other
impurities. Our facilities can handle a variety of petroleum materials,
including light, medium and heavy crude oils, residual fuel oil, gasoline,
gasoline blending components, diesel, marine gas oil, marine diesel oil,
aviation fuel, bunker fuel, and butane. Residual fuel oil is comprised of the
residue from the distillation of crude oil after the light oils, gasoline,
naphtha, kerosene and distillate oils are extracted. We also handle petroleum
diluents, lubricating oils, and various other petroleum products.



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         We own seven berthing locations where vessels may load and discharge
crude oil and petroleum products at our St. Eustatius facility and two berthing
locations at our Point Tupper facility. With these berthing locations and our
uniquely designed mooring facilities and piping configurations, we can handle
oil tankers of various sizes, from relatively small to some of the largest in
the world and provide services such as simultaneous discharging and loading of
vessels and "across the dock" transfers. We charter tugboats and own other
marine equipment to assist with docking operations and provide port services.

         We specialize in "in-tank" or "in-line" blending with computer-assisted
blending technology that assures product integrity and homogeneity. Our
facilities can blend and mix a full range of petroleum products including
gasoline, residual fuel oils, bunker fuel, and crude oil. We believe our
blending capability has attracted certain customers who have leased capacity
primarily for blending purposes and who have contributed to our bunker fuel and
bulk product sales. We have worked closely with residual fuel oil market
participants to assist them with their blending operations.

         We own storage spheres for butane at both of our facilities that
enhance our gasoline blending capabilities. We also own an atmospheric
distillation unit for refining at St. Eustatius. We use the storage spheres and
the distillation unit to improve product quality and add value to our customers'
products.

         Notwithstanding periods of unusually adverse market conditions,
including the current period of backwardation and the backwardation period which
persisted from the first quarter of 1995 to the fourth quarter of 1997, the
average percentage of our available capacity that we leased at the St. Eustatius
facility for each of the years ended 1997, 1998, and 1999 was 76%, 92% and 90%,
respectively. The average capacity leased at the Point Tupper facility over each
of the last three years ended 1997, 1998, and 1999 was 70%, 93% and 79%,
respectively. We believe that cost advantages associated with the location of
our facility, shipping economies of scale, product blending capabilities, and
the availability of a full range of ancillary services at the facility have
driven the demand for our storage services.

         As part of our petroleum product marketing, we supply bunker fuel in
the Caribbean and in Nova Scotia, Canada. At and around St. Eustatius, our
bunkering business has evolved from offering bunker fuel to ships at the
terminal berths to a delivery system utilizing specially modified barges which
provide fuel to vessels at anchor. During this period, we concentrated our
marketing efforts on finding additional customers, particularly those with
regular routes through the Caribbean, and on customers requiring larger volumes
of fuel per vessel call. As a result, the total number of vessels bunkering at
our St. Eustatius facility has increased, as well as the average volume of
bunker fuel delivered per vessel, producing an increased total volume delivered.

         In the first quarter of 1996, we initiated bunker fuel service
operations at Point Tupper with deliveries via pipeline at the terminal berths
and by truck in the surrounding Strait of Canso area. During this period, we
were generally unable to secure an adequate source of supply; therefore, we
periodically leased the storage capacity that we had previously allocated to
storage of bunker fuel.

         We purchase small quantities of petroleum products primarily to
maintain an inventory of certain blendstocks and bunker fuel. The blendstocks
allow us to assist our customers with meeting their quality requirements. From
time to time we purchase and sell products to accommodate customers who wish to
source or dispose of small quantities of product, and to assist customers' sales
activities. Further, we sell to a customer that utilizes the product to supply
its distribution network in the northeastern Caribbean. Other relatively small
product sales are made to Caribbean wholesalers.



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         Netherlands Antilles and Canadian environmental laws and regulations
require ship owners, vessel charterers, refiners and terminals to have access to
spill response capabilities. At St. Eustatius, we own and operate the M/V STATIA
RESPONDER (formerly known as the M/V MEGAN D. GAMBARELLA), a 194 foot
multi-function emergency response and maintenance vessel with spill response,
firefighting, and underwater diving support capabilities. The STATIA ALERT, a
barge that is capable of recovering 200 gallons per minute of oil/water mixture,
and two response boats that can deploy booms to contain a spill within a certain
area and release absorbent materials, support our emergency and spill response
capability at St. Eustatius. The St. Eustatius facility also has three tugs on
time charter and owns two mooring launches, all of which are available for safe
berthing of vessels calling at the terminal and for emergency and spill
response.

         In Canada, we own and operate two fully-equipped spill response vessels
on Cape Breton Island, one located at Point Tupper and the other located in
Sydney, Nova Scotia. In the event of an oil spill, these vessels can deploy
containment and clean-up equipment including skimmers to retrieve product from
the surface of the water, booms to contain spills, and absorbents to absorb
spilled product. We charter tugs, mooring launches and other vessels to assist
with the movement of vessels through the Strait of Canso and the safe berthing
of vessels at Point Tupper and to provide other services to vessels.

         We believe that the presence of fully equipped spill response vessels
in port is important in attracting customers to our facilities. Our customers
benefit by ready access to this equipment, and we charge each vessel that calls
at our facilities a fee for this capability.

         In 1998, we entered into a 25 year agreement to lease approximately 65
acres of our land at Point Tupper and a 12 year product storage agreement for
over 500,000 barrels of our existing storage tank capacity with Sable Offshore
Energy, Inc. The land lease provides Sable options to extend for two additional
25 year periods. Sable has built a natural gas liquids fractionation plant,
storage, and rail handling facilities on the land. The fractionation plant has
the ability to process an average of 20,000 barrels per day of natural gas
liquids extracted from the Sable Island region of Nova Scotia, Canada, and
delivered via pipeline to the fractionation plant from Sable's Goldboro Gas
Processing Plant in Guysborough County, Nova Scotia.

                                     PRICING

         Storage and throughput pricing in the marine terminaling industry is
subject to a number of factors, including variations in petroleum product
production and consumption, economic conditions, political developments,
seasonality of demand for certain products and the geographic sector of the
world being serviced. At the customer level, terminal selection focuses
primarily on:

         o  location;

         o  quality of service; and

         o  range of services offered.

         Although price is always an issue, price differentials among competing
terminals are frequently less important to the customer because terminaling
costs represent only a small portion of the customer's total distribution costs.

         In developing our pricing strategy, we consider petroleum market
conditions and oil price trends. We also take into consideration the quality and
range of our services compared to those of competing terminals, prices
prevailing at the time in the terminaling market in which we operate, cost




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savings from shipping to our terminal locations, and the cost of other options
available to the customer. In situations requiring special accommodations for
the customer (e.g. unique tank modification or construction of new tanks), we
may price on a rate-of-return basis.

         We enter into written storage and throughput contracts with customers.
During 1999, approximately 60% of our storage and throughput revenues, excluding
related ancillary services, were attributable to long-term storage and
throughput agreements of one year or more. Our long-term storage and throughput
agreements are individually negotiated with each customer. The typical agreement
specifies tank storage volume, the commodities to be stored, a minimum monthly
charge, an excess throughput charge for throughput volume in excess of the
volume specified in the storage contract, and a price escalator. In addition,
there may be charges for certain additional services such as the transfer,
blending, mixing, heating, decanting and other processing of stored commodities.
The minimum monthly charge is due and payable without regard to the volume of
storage capacity, if any, actually utilized. For the minimum monthly charge, the
user is generally allowed to deliver, store for one month and remove the
specified tank storage volume of commodities. As an incentive for the user to
throughput additional barrels, the excess throughput charge is typically a lower
rate per barrel than the rate per barrel utilized in establishing the minimum
monthly charge. Year-to-year escalation of charges is typical in long-term
contracts.

         The pricing of bunker fuels is subject to a number of factors,
including general economic conditions and the geographic sector of the world
being serviced. Substantially all bunker sales are negotiated on an individual
vessel basis as the vessel has a specific requirement for fuel. As many vessels
have sufficient fuel capacity that allows them to travel long distances between
refueling stops, worldwide market conditions and the specific ports along the
vessel's intended route dictate individual sale prices. Factors such as cost of
supply, type and quality of fuel, quantity, method and location of delivery, and
other factors determine our pricing.

                                   COMPETITION

         The main competition to crude oil storage at our facilities is from
lightering. Under current market conditions, lightering in most instances costs
less than terminaling. The price differential between lightering and terminaling
is primarily driven by the charter rates for vessels of various sizes.
Terminaling generally occupies a very-large or ultra-large crude carrier for a
shorter period of time than lightering. A very-large crude carrier can be
lightered in approximately four days if lightering vessels are available for
continuous back-to-back operations and the weather is good. If not, a longer
period is required. Depending on charter rates, the longer charter period
associated with lightering is generally offset by various costs associated with
terminaling including storage costs, dock charges and spill response fees.
However, terminaling reduces the risk of environmental damage associated with
lightering.

         The independent terminaling industry is fragmented and includes both
large, well-financed companies that own many terminal locations and smaller
companies that may own a single terminal location. We are a member of the
Independent Liquid Terminals Association ("ILTA") which, among other functions,
publishes a directory of terminal locations of its members throughout the world.
Customers with specific geographic and other logistical requirements may use the
ILTA directory to identify the terminals in the region available for specific
needs and to select the preferred providers on the basis of service, specific
terminal capabilities and environmental compliance.



                                       8
<PAGE>   11


         In addition to the terminals owned by independent terminal operators,
many state-owned oil producers and major energy and chemical companies also own
extensive terminal facilities, and these terminals often have the same
capabilities as terminals owned by independent operators. While the purpose of
such terminals is to serve the operations of their owners, and they do not
customarily offer terminaling services to third parties, these terminals
occasionally are made available to the market when they have unused capacity on
a short-term and irregular basis. Such terminals lack certain competitive
advantages of independent operators, the most important of which is
confidentiality.

         In many instances, major energy and chemical companies that own storage
and terminaling facilities are also significant customers of independent
terminal operators. Such companies typically have strong demand for terminals
owned by independent operators when independent terminals have more
cost-effective locations near key transportation links such as deep-water ports.
Major energy and chemical companies also need independent terminal storage when
their captive storage facilities are inadequate, either because of size
constraints, the nature of the stored material or specialized handling
requirements.

         Terminal owners and operators compete based on the location and
versatility of their terminals, service and price. A favorably located terminal
will have access to cost-effective transportation both to and from the terminal.
Possible transportation modes include waterways, railroads, roadways and
pipelines.

         Terminal versatility is a function of the operator's ability to offer
safe handling for a diverse group of products with potentially complicated
handling requirements. The primary service function provided by the terminal is
the safe storage and return of all of the customer's product while maintaining
product integrity. Terminals may also provide additional services, such as
heating, blending, water removal and processing with assurance of proper
environmental handling procedures or vapor control to reduce evaporation.

         In our bunkering business, we compete with ports offering bunker fuels
to which, or from which, each vessel travels or are along the route of travel of
the vessel. We also compete with bunker delivery locations around the world. In
the Western Hemisphere, there are significant alternative bunker locations,
including ports on the U.S. East coast and Gulf coast and in Panama, Puerto
Rico, the Bahamas, Aruba, Curacao and Halifax. In addition, we compete with
Rotterdam and various North Sea locations.

                                    CUSTOMERS

         Our customers include many of the world's largest producers of crude
oil, integrated oil companies, oil traders, refiners, petrochemical companies
and ship owners and operators.

         We presently have significant long-term contracts at St. Eustatius,
including a storage and throughput agreement with Bolanter Corporation N.V., a
subsidiary of Saudi Aramco, for an initial five-year term which was recently
renewed and amended to extend the agreement, among other changes, for a
three-year term beginning January 31, 2000. The terminal enables Bolanter to
transport various grades of crude oil closer to market at competitive
transportation rates. This contract commits all of the St. Eustatius facility's
current crude oil storage capacity to Bolanter, which represents approximately
44% of the terminal's total capacity and 6.1% of our 1999 revenues, including
revenues derived from affiliates of Bolanter as an indirect result of this
contract. An additional 6.4% of our 1999 revenues were derived from parties




                                       9
<PAGE>   12


unaffiliated with Bolanter but generated by the movement of Bolanter's products
through the St. Eustatius terminal. In addition, revenues from an affiliate of
Saudi Aramco, which received bunker fuels at our St. Eustatius facility,
accounted for 2.3% of our total 1999 revenues.

         We presently have significant long-term contracts at Point Tupper,
including an agreement with a large independent refiner, a subsidiary of Tosco
Corporation, for an initial five-year term which was renewed in March 1999 for
an additional five-year term through July 31, 2004. At the end of this current
five-year term, the contract may be renewed for another five-year term at the
customer's discretion. This contract became effective in August 1994 and commits
approximately 49% of the present tank capacity at Point Tupper. It represented
approximately 5.1% of our 1999 revenues, including revenues derived from an
affiliate of Tosco as an indirect result of this contract. An additional 0.9% of
our 1999 revenues were derived from parties unaffiliated with Tosco, but
generated by the movement of Tosco's products through the Point Tupper terminal.

         In addition, we have another customer which represented 9.0% of our
1999 revenues. We also supply bunker fuel to a customer which represented 7.0%
of our 1999 revenues. No other customer accounted for more than 5% of our total
1999 revenues.

                                    SUPPLIERS

          At St. Eustatius, we are currently purchasing a majority of the fuel
oil necessary to support our bunker sales requirements pursuant to a contract
with a major state-owned oil company. This contract became effective in 1993,
and has been renewed annually thereafter through February 29, 2000. We are
currently operating under a short-term oral extension to the contract pending
completion of discussions with the oil company. We anticipate renewal of the
supply contract in the near future under terms and conditions comparable to the
prior agreement. We believe that suitable alternate sources of supply are
available from which we can procure fuel oil should our current contract be
interrupted or not be renewed.

         At Point Tupper, we are attempting to secure a source of supply of
bunker fuel sufficient to support increased bunker fuel marketing to vessels
calling at this facility or operating in the Strait of Canso area.

                    ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

         Our subsidiaries are subject to comprehensive and periodically changing
environmental, health and safety laws and regulations within the jurisdictions
of our operations, including those governing oil spills, emissions of air
pollutants, discharges of wastewater and storm waters, and the disposal of
non-hazardous and hazardous waste. We believe we are presently in substantial
compliance with applicable laws and regulations governing environmental, health
and safety matters. We have taken measures to mitigate our exposure to
environmental risks including acquiring automated and monitoring equipment,
training employees, maintaining our own emergency and spill response equipment
at each terminal, and maintaining liability insurance for certain accidental
spills. Additional information regarding our environmental, health and safety
matters is presented under Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Environmental, Health and Safety
Matters."

         ST. EUSTATIUS

         Until recently, the St. Eustatius terminal has not been subject to
significant environmental, health and safety regulations, and health, safety and
environmental audits have not been required by law. No environmental or health



                                       10
<PAGE>   13

and safety permits are required for the St. Eustatius terminal except under the
St. Eustatius Nuisance Ordinance. A license under the St. Eustatius Nuisance
Ordinance was issued to us in February 1997 subject to compliance with certain
requirements. The requirements established by the license set forth
environmental standards for operation of the facility, including monitoring of
air emissions, limits on and monitoring of waste-water discharges, establishment
of a wastewater treatment system, standards for above-ground storage tanks and
tank pits, reporting and clean-up of any soil or water pollution and certain
site security measures. To date, we have complied with the license requirements,
and do not expect further compliance to have a material adverse effect on our
business and financial condition, results of operations or our ability to make
distributions. We will address future improvements to the facility that may be
necessary to comply with new environmental, health and safety laws and
regulations, if any, as they arise.

         At St. Eustatius, terminal management, with the advice of certain
consultants, supervises the on and off-site disposal and storage of hazardous
waste materials. The nature of our business is such that spills of crude oil or
petroleum products may occur at the terminal periodically. Over the past three
years ending December 31, 1999, there were no significant spills. All spills at
the St. Eustatius terminal were reported to the appropriate environmental
authorities and have not resulted in any citations by such authorities for
violations of law. We have remediated all such spills to the satisfaction of the
applicable authorities. In addition, two government inspections were performed
during each of 1997 and 1998 with no citations issued.

         POINT TUPPER

         The Point Tupper terminal is subject to a variety of environmental,
health and safety regulations administered by the Canadian federal government
and the Nova Scotia Department of Environment ("NSDOE"). While air emission
monitoring is not required by the NSDOE, surface water and groundwater
monitoring are required and are performed on a routine basis in accordance with
the requirements of Industrial Approval permit #92-IAE 013 which was issued by
NSDOE, in March 1999 and expires March 8, 2008. We believe we have all requisite
environmental permits. The nature of our business is such that spills of crude
oil or refined products may occur at the terminal periodically. The Point Tupper
facility, pursuant to the Canadian Shipping Act, has been designated as an Oil
Handling Facility. The facility is compliant with regulations respecting the
procedures, equipment and resources, including an arrangement with a certified
response organization, to mitigate any incidents with respect to oil pollution
which may occur out of the loading or unloading of crude oil and petroleum
products to or from a ship at the facility. Over the past three years ended
December 31, 1999, there were no significant spills. All spills at the Point
Tupper terminal were reported and remediated to the satisfaction of the
applicable agencies and have not resulted in any citations by such authorities.

         Past use of the facility by others, including its past operation by
others as an oil refinery, have resulted in certain on-site areas of known and
potential contamination, as described under Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Environmental, Health
and Safety Matters."

                                    EMPLOYEES

         As of February 29, 2000, excluding contract labor, we employed 203
people. Forty-one employees were located in the U.S., 104 on St. Eustatius, and
58 at Point Tupper. A majority of our employees at both the St. Eustatius and
Point Tupper facilities are unionized. We believe that our relationships with



                                       11
<PAGE>   14


our employees are good. We have never experienced a material labor related
business disruption.

         ST. EUSTATIUS

         The Windward Islands Federation of Labor ("WIFOL") represents the
majority of our hourly workers at St. Eustatius. We entered into an agreement
with WIFOL on June 1, 1993, which extended to May 31, 1996. The agreement
provided for automatic one year extensions if neither party requested an
amendment. We have not requested or received any requests for an extension. We
believe that the agreement no longer binds us, but we continue to provide pay
and benefits to the hourly workers as if the agreement were still in effect.

         POINT TUPPER

         The Communications, Energy and Paperworkers Union ("CEPU") represents a
majority of Point Tupper's hourly work force. During 1999, we signed a new
agreement with the union which expires on September 30, 2003. We have
experienced no operational work stoppages in the last five years.

                               ITEM 2. PROPERTIES

                       ST. EUSTATIUS, NETHERLANDS ANTILLES

         We own an 11.3 million barrel petroleum terminaling facility located on
the Netherlands Antilles island of St. Eustatius which is located at a point of
minimum deviation from major shipping routes. St. Eustatius is approximately
1,900 miles from Houston, 1,500 miles from Philadelphia, 550 miles from Amuay
Bay, Venezuela, and 1,100 miles from the Panama Canal. This facility is capable
of handling a wide range of petroleum products, including crude oil and refined
products. A three-berth jetty, a two-berth monopile with platform and buoy
systems, a floating hose station and an offshore single point mooring buoy with
loading and unloading capabilities serve the terminal's customers' vessels.

         This facility has 24 tanks with a total capacity of 5.1 million barrels
dedicated to fuel oil storage, 18 tanks with a total capacity of 1.2 million
barrels dedicated to petroleum products storage, and eight tanks totaling 5.0
million barrels dedicated to multigrade crude oil storage. The facility also has
a 15,000 barrel butane sphere. The fuel oil and petroleum product facilities
have in-tank and in-line blending capability. The crude storage is the newest
portion of the facility, construction of which was completed in early 1995 by a
subsidiary of Chicago Bridge & Iron Company. The storage tanks comply with
construction standards that meet or exceed American Petroleum Institute,
National Fire Prevention Association and other material industry standards.
Crude oil movements at the terminal are fully automated. In addition to the
storage and blending services at St. Eustatius, this facility has the
flexibility to utilize certain storage capacity for both feedstock and refined
products to support its atmospheric distillation unit, which is capable of
processing up to 15,000 barrels per day of feedstock, ranging from condensates
to heavy crude oil.

         The St. Eustatius facility can accommodate the world's largest vessels
for loading and discharging crude oil. The single point mooring system can
handle a single fully-laden vessel of up to 520,000 deadweight tons, which is a
marine vessel's cargo carrying capacity, with a draft of up to 120 feet. The
single point mooring system can discharge or load at rates in excess of 100,000
barrels of crude oil per hour. There are six pumps connected to the single point
mooring system, each of which can pump up to 18,000 barrels per hour from the
single point mooring system to the storage tanks. The jetty at St. Eustatius can



                                       12
<PAGE>   15

accommodate three vessels simultaneously. The south berth of the jetty can
handle vessels of up to 150,000 deadweight tons with a draft of up to 55 feet.
The north berth of the jetty can handle vessels of up to 80,000 deadweight tons
with a draft of up to 55 feet. There is also a barge loading station on the
jetty. At the south and north berths of the jetty, 25,000 barrels per hour of
fuel oil can be discharged or loaded. To accommodate the needs of our gasoline
and diesel oil customers, in July 1998, we completed installation of a monopile
with platform that can handle vessels of up to 40,000 deadweight tons with a
draft of up to 46 feet. The monopile with platform can handle two vessels
simultaneously and can discharge or load 12,000 barrels per hour of refined
products. In addition, this facility has a floating hose station that we use to
load bunker fuels onto our barges for delivery to customers. We believe that the
speed at which our facility at St. Eustatius can load crude oil and petroleum
products off of or onto vessels gives us a competitive advantage due to
reductions in the time ships spend in port.

         We own and operate all of the berthing facilities at our St. Eustatius
terminal for which we charge vessels a dock charge. Vessel owners or charterers
may incur separate charges for berthing facilities use and associated services
such as pilotage, tug assistance, line handling, launch service, emergency and
spill response and ship services.

         Recognizing the strategic advantage of its location in the Caribbean
near major shipping lanes, we deliver bunker fuel to vessels at our St.
Eustatius facility. The bunkering business has evolved from offering fuels to
ships at the berth to a delivery system utilizing specially modified barges that
provide fuel to vessels at anchorage. The location of the terminal on the
leeward side of the island, which provides natural protection for ships,
generally favorable year-round weather conditions, and deep navigable water at
an anchorage relatively close to shore, attracts ships to this facility for
their bunker fuel requirements. We own four barges and charter one barge, which
support the bunker fuel sales operation.

         During 1998, we commissioned an atmospheric distillation unit at St.
Eustatius. The unit is capable of processing up to 15,000 barrels per day of
feedstock ranging from condensates to heavy crude oil. This distillation unit
can produce naphtha, distillate (heating oil) and residual fuel oil. We believe
that the capability to process feedstock for third parties may create
opportunities for us.

                        POINT TUPPER, NOVA SCOTIA, CANADA

         We own a terminaling facility located at Point Tupper in the Strait of
Canso, near Port Hawkesbury, Nova Scotia, Canada, which is located at a point of
minimal deviation from major shipping routes. Point Tupper is approximately 700
miles from New York City, 850 miles from Philadelphia and 2,500 miles from
Mongstad, Norway. This facility operates the deepest independent ice-free marine
terminal on the North American Atlantic coast, with access to the U.S. East
coast, Canada, and the Midwestern U.S. via the St. Lawrence Seaway and the Great
Lakes system. The Point Tupper facility can accommodate substantially all of the
largest fully laden very-large and ultra-large crude carriers for loading and
discharging.

         We renovated our facilities at Point Tupper and converted a former oil
refinery site into an independent storage terminal. This work, performed
primarily by a subsidiary of Chicago Bridge & Iron Company, began in 1992 and
was completed in 1994. The tanks were renovated to comply with construction
standards that meet or exceed American Petroleum Institute, National Fire
Prevention Association and other material industry standards.




                                       13
<PAGE>   16


         We believe that our dock at Point Tupper is one of the premier dock
facilities in North America. The outer berth of the Point Tupper facility's
dock, Berth One, can handle fully laden vessels of up to 400,000 deadweight tons
with a draft of up to 84 feet. At Berth One, approximately 75,000 barrels per
hour of crude oil, approximately 17,000 barrels per hour of diesel or gasoline,
or 50,000 barrels per hour of fuel oil can be discharged or loaded. Berth Two
can accommodate vessels of up to 99,000 deadweight tons with drafts of up to 40
feet. At Berth Two, approximately 25,000 barrels per hour of crude oil,
approximately 12,000 barrels per hour of diesel or gasoline, or approximately
12,000 barrels per hour of fuel oil can be discharged or loaded. Liquid movement
at the terminal is fully automated. The Point Tupper facility can accommodate
two vessels simultaneously. We charge separately for the use of the dock
facility as well as associated services, including pilotage, tug assistance,
line handling, launch service, spill response and ship services.

         The berths at the dock of the Point Tupper facility connect to a 7.4
million barrel tank farm. The terminal has the capability of receiving and
loading crude oil, petroleum products and certain petrochemicals. This facility
has 22 tanks with a combined capacity of 5.7 million barrels dedicated to
multigrade crude oil storage, two tanks with a combined capacity of 0.5 million
barrels dedicated to fuel oil storage and 10 tanks with a combined capacity of
1.2 million barrels dedicated to petroleum products, including gasoline,
gasoline blend components, diesel and distillates. During 1997, approximately
two-thirds of the storage tanks dedicated to petroleum products were converted
to crude oil storage. The facility also has a 55,000 barrel butane storage
sphere. This sphere is one of the largest of its kind in North America, and we
expect it to enhance our petroleum products blending operations.

         In order to comply with our safe handling procedures and Canadian
environmental laws, we own and operate two fully equipped spill response vessels
on Cape Breton Island, one located at Point Tupper and the other located in
Sydney. In addition to these vessels, we have the capability to respond to
spills on land or water with a combined spill response capability of over 2,500
metric tons at this terminal location. An additional 7,500 metric ton spill
response capability is immediately available at Point Tupper by agreement with
another response organization. Our customers benefit by ready access to the
equipment. In 1995, one of our subsidiaries was granted Canadian Coast Guard
certification as a response organization with spill response capabilities.
Consequently, vessels calling in the Strait of Canso are required to pay us a
subscription fee for access to the services provided by the spill response
organization, even if they do not dock at our terminal.

         There are two truck racks at the Point Tupper facility. The north truck
rack has the capability to load up to 550 barrels per hour of fuel oil and the
south truck rack has the capability to load up to 550 barrels per hour of fuel
oil or diesel.

          We are continuing to negotiate a land exchange agreement with the
Province of Nova Scotia conveying certain land we own at the Point Tupper
terminal site to the Province of Nova Scotia in exchange for the conveyance by
the Province of Nova Scotia of certain unused rights-of-way on our remaining
property at Point Tupper. We presently own approximately 3,000 acres of land at
this location. However, we are prohibited by law from using the approximately
1,296 acres comprising Landrie Lake and adjacent watershed land. The land
anticipated to be transferred to the Province is principally the Landrie Lake
and adjacent watershed lands.


                                       14
<PAGE>   17


                            ITEM 3. LEGAL PROCEEDINGS

         Global Petroleum Corp. and one of its affiliates sued us in December of
1993 seeking the release of certain petroleum products we were holding to secure
the payment of invoices. The Supreme Court of Nova Scotia ordered the release of
the products once Global posted a $2.0 million bond. Global claimed damages of
$1.2 million for breach of contract, and we counterclaimed for breach of
contract and payment of approximately $2.0 million of overdue invoices. In April
1996, Global, Scotia Synfuels Limited and their related companies sued CBI
Industries and us in the Supreme Court of Nova Scotia alleging $100 million in
damages resulting from misrepresentation, fraud and breach of fiduciary duty.
The plaintiffs alleged these claims arose out of the level of costs and expenses
paid to subsidiaries of CBI Industries and others for the reactivation of the
Point Tupper facility and the subsequent sale of the plaintiff's diluted shares
in the entity owning the Point Tupper facility to one of our affiliates, which
was at that time a subsidiary of CBI Industries. During the fourth quarter of
1999, the parties settled these proceedings by Global making payment of an
agreed amount, all of which will go to Praxair, Inc. pursuant to the indemnity
agreement discussed below.

         In May 1994, the U.S. Department of Justice sued two of our
subsidiaries for pollution clean-up costs of $3.6 million in connection with the
discharge of oil into the territorial waters of the U.S. Virgin Islands and
Puerto Rico by a third party barge that had been loaded at our St. Eustatius
facility but was not affiliated with us. On April 16, 1998, the U.S. District
Court ruled that it lacked jurisdiction over the St. Eustatius subsidiary and
dismissed it from the case. On March 16, 2000, the U.S. Department of Justice
signed and filed with the court a stipulation and agreement that this action be
dismissed with prejudice. Therefore, this case is now closed.

         In connection with the Castle Harlan acquisition, Praxair agreed to
indemnify us against damages relating to the legal proceedings described above.
As part of the Castle Harlan acquisition agreement, all recovery from Global or
the other parties bringing the actions is to be retained by Praxair.

         We are involved in various other claims and litigation related to the
ordinary conduct of our business. Based upon our analysis of legal matters and
our discussions with legal counsel, we believe that these matters will not
materially impact our business and financial condition, results of operations or
ability to make distributions.

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

         Not applicable.



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<PAGE>   18


                                    PART II.

                ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
                            RELATED SECURITY MATTERS

                        MARKET FOR CLASS A COMMON SHARES

         Our Class A common shares are traded on the NASDAQ National Market
System under the symbol STNV. The following table sets forth the range of high
and low bid information for our Class A common shares as reported by the NASDAQ
National Market System for the indicated quarters during the period from the
date of completion of our initial public offering of equity on April 28, 1999
through December 31, 1999.

                                                      HIGH          LOW
                                                      ----          ---

         Quarter ended June 30, 1999               $  18.250     $  14.500
         Quarter ended September 30, 1999          $  15.625     $  12.250
         Quarter ended December 31, 1999           $  12.625     $   5.125

         As of February 29, 2000, there were 84 holders of record of our Class A
common shares.

                                  DISTRIBUTIONS

         On August 13, 1999, we paid a distribution of $0.3165 per Class A
common share representing the target quarterly distribution of $0.45 per share
prorated for the period from the date of closing of our initial public offering
of equity on April 28, 1999 through June 30, 1999. On November 12, 1999, we paid
a distribution of $0.45 per Class A common share representing the target
quarterly distribution for the third quarter of 1999.

         On February 14, 2000, we paid a distribution of $0.15 per Class A
common share. Pursuant to our articles of incorporation, the $0.30 per share
difference between the distribution paid and the target quarterly distribution
of $0.45 per share for the fourth quarter of 1999 represents an arrearage which
must be paid from future available cash prior to paying any future
distributions.

         We are continuing to be affected by the high market price of crude oil
and the uncertainty surrounding future crude oil production levels that result
from the current accord between the major oil producing countries. This accord
has resulted in significantly curtailed production, reduced movement of crude
oil and petroleum products, a worldwide reduction of inventory, and market
uncertainty regarding future production. We cannot predict when these producers
or others will increase production so as to bring the supply and demand into
balance and result in a more stable market.

         This market situation has negatively affected our revenues, available
cash and earnings. If the current trend continues, we believe it is unlikely
that a distribution per common share will be paid following the end of the first
quarter of 2000. Should this be the case, and as required by our articles of
incorporation, the difference between the target quarterly distribution of $0.45
per share and any lesser distribution per share will accrue and represents an
arrearage which must be paid from future available cash prior to paying any
future distributions.




                                       16
<PAGE>   19


         As required by our articles of incorporation, we will make
distributions to our shareholders for each of our fiscal quarters prior to
liquidation in an amount equal to 100% of our available cash, if any, for that
quarter. We expect to make distributions of all available cash within
approximately 45 days after the end of each quarter to holders of record on the
applicable record date. Available cash, as defined in our articles of
incorporation, generally means:

         o  all cash on hand at the end of any quarter; and

         o  borrowed after the end of any quarter for working capital purposes

         LESS:

         the amount of cash reserves that is necessary or appropriate in the
         reasonable discretion of our board of directors to:

         o  provide for the proper conduct of our business;

         o  comply with applicable law or any of our debt instruments or other
            agreements; or

         o  provide funds for distributions for any one or more of the next four
            fiscal quarters.

         The reserves our board of directors may establish are not limited to
reserves under generally accepted accounting principles.

         For each quarter during the subordination period (as defined in our
articles of incorporation), to the extent we have enough available cash, a
holder of Class A common shares will have the right to receive the target
quarterly distribution (as defined in our articles of incorporation), plus any
common share arrearages, prior to any distribution of available cash to the
holders of Class B subordinated shares. Upon expiration of the subordination
period, which generally will not occur prior to June 30, 2004, all Class B
subordinated shares will be converted on a one-for-one basis into Class A common
shares and will participate pro rata with all other Class A common shares in
future distributions of available cash. Under particular circumstances, up to
50% of the Class B subordinated shares may convert into Class A common shares
before the expiration of the subordination period. Class A common shares will
not accrue arrearages for distributions for any quarter after the end of the
subordination period.

         Statia Terminals Group is a holding company and depends entirely on
dividends from Statia Terminals International for its cash flow. Statia
Terminals International's ability to pay dividends to Statia Terminals Group is
subject to restrictions contained in the indenture relating to its mortgage
notes. Additional information regarding such restrictions is presented under
Item 7 of this Report - "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Reserves--CASH FLOW
FROM FINANCING ACTIVITIES."

         Under Netherlands Antilles law we may make one or more distributions to
our shareholders out of legally available funds. These distributions can be made
out of our profits or reserves. We establish profits at our annual general
meeting of shareholders after we prepare and submit the balance sheet and profit
and loss account to our shareholders. Upon adoption of these financial
statements at the annual general meeting of shareholders, the profit, if any, is
set as the positive balance of the profit and loss account after allocation of
amounts to reserves or creation of one or more provisions. Our articles of
incorporation provide that we may distribute such profit as we deem fit. In
addition, our articles of incorporation provide that we may allocate, in whole
or in part, any profit amounts to the profit reserves and make distributions
therefrom, as well as to distribute out of reserves.



                                       17
<PAGE>   20


         Notwithstanding the above, we may declare and distribute one or more
interim distributions in the form of interim dividends, as an advance payment of
expected profits. We may make this declaration only if we have, at the time of
such declaration, the reasonable expectation that we will make sufficient
profits for the relevant financial year to justify the interim distributions.
However, at the time of the declaration of the interim distribution, we may
further determine that any amounts not covered by the profits shall be qualified
as distribution out of freely distributable reserves, if any, such as the
capital surplus, being the aggregate amounts paid in excess of the par value per
share by each holder of Class A common shares, Class B subordinated shares or
Class C incentive rights.

         We may make the distribution out of profits and/or reserves generally
to shareholders insofar as our equity exceeds the nominal value of the issued
and outstanding capital. In addition, if the profits and loss account shows a
loss for any given year, and that loss cannot be covered by the reserves or
compensated in another manner, no profit can be distributed in any subsequent
year until that loss has been recovered or has been offset by reserves.

         Under the laws of the Netherlands Antilles as currently in effect, a
holder of Class A common shares who is not a resident or deemed a resident of,
and during the taxable year has not engaged in trade or business through a
permanent establishment in, or permanent representative or agent in, the
Netherlands Antilles will not be subject to Netherlands Antilles income tax on
distributions made with respect to the Class A common shares or on gains
realized during that year on sale or disposal of such shares. The Netherlands
Antilles do not impose a withholding tax on distributions made by Statia
Terminals Group. There are no gift or inheritance taxes levied by the
Netherlands Antilles when at the time of such gift, or at the time of death, the
relevant holder of Class A common shares was not domiciled or deemed domiciled
in the Netherlands Antilles. A person is not deemed a resident or deemed
domiciled in the Netherlands Antilles merely on the basis of being a holder of
Class A common shares. No reciprocal tax treaty presently exists between the
Netherlands Antilles and the United States.

         Although there are Netherlands Antilles laws which may impose foreign
exchange controls on us and may affect the payment of distributions to
non-resident holders of our Class A common shares, we have been granted an
exemption from such foreign exchange control regulations by the Central Bank of
the Netherlands Antilles. Other jurisdictions in which we conduct operations may
have various currency or exchange controls. As to our Class A common shares,
Netherlands Antilles law imposes no limitations on the right of non-resident or
foreign owners to hold or vote such securities.

                         ITEM 6. SELECTED FINANCIAL DATA

         The following table sets forth selected financial data for the periods
and as of the dates indicated. In January 1996, our former parent, CBI
Industries, was acquired by Praxair. The statement of operations data for each
of the years ended December 31, 1997, 1998 and 1999 have been derived from and
are qualified by reference to our audited consolidated financial statements
included elsewhere in this Report. The statement of operations data for each of:

         o  the period from January 1, 1996 through November 27, 1996; and

         o  the period from November 27, 1996 through December 31, 1996

have been derived from, and are qualified by reference to, our audited
consolidated financial statements not included in this Report. The statement of
operations data for the year ended December 31, 1995 have been derived from the
audited combined financial statements of Statia Terminals, Inc. and its




                                       18
<PAGE>   21

subsidiaries and affiliates not included in this Report. The summary of
historical consolidated financial data set forth below should be read in
conjunction with, and is qualified by reference to, "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and accompanying notes thereto and other financial
information included elsewhere in this Report.
<TABLE>
<CAPTION>

                                                      (Dollars in thousands except share amounts)
                                         ---------------------------------------------------------------------------------
                                         Pre-Castle Harlan Acquisition           Post-Castle Harlan Acquisition
                                         ----------------------------- ---------------------------------------------------
                                         Pre-Praxair
                                         Acquisition
                                         -----------
                                                        January 1,      November 17,
                                                           1996           1996
                                          Year Ended      Through        Through           Years Ended December 31,
                                         December 31,   November 27,   December 31,  -------------------------------------
                                            1995 (7)       1996 (7)       1996 (7)     1997           1998 (8)     1999
                                         ------------  -------------  -------------  ---------      ---------    ---------
<S>                                       <C>            <C>            <C>          <C>            <C>          <C>
STATEMENT OF OPERATIONS DATA:
Revenues ...............................  $ 135,541      $ 140,998      $  14,956    $ 142,499      $ 136,762    $ 168,343
Costs of revenues ......................    117,722        129,915         12,803      122,939        105,888      137,665
Gross profit ...........................     17,819         11,083          2,153       19,560         30,874       30,678
Administrative expenses ................      6,957          8,282            664        7,735          9,500        8,745
Operating income .......................     10,862          2,801          1,489       11,825         20,574       16,084
Loss (gain) on disposition of property
  and equipment ........................         59            (68)            --         (109)         1,652           --
Interest expense .......................      4,478          4,187          1,613       16,874         16,851       14,286
Provision for income taxes .............        390            629            132          780            320          780
Net income (loss) available to common
  stock.................................      4,569         (2,682)          (522)      (8,361)        (1,503)      (5,136)
Diluted loss per Class A common share(1)         --             --             --           --             --        (0.17)
Cash distributions declared per common
  share(1)...............................        --             --             --           --             --       0.7665

BALANCE SHEET DATA:
Total assets (2) .......................    230,283            N/M        260,797      246,479        245,610      236,297
Long-term debt (1) .....................     51,600            N/M        135,000      135,000        135,000      101,000
Redeemable preferred stock Series
  A through C(1)........................         --            N/M         40,000       40,000         40,000           --
Preferred stock Series D and E (1) (3)..         --            N/M         61,000       61,000         54,824           --
Preferred stock ........................     18,589            N/M             --           --             --           --
Total stockholders' equity (1) .........     91,001            N/M         58,982       50,621         43,331      109,698

NET CASH FLOW FROM (USED IN):
Operating activities ...................     11,476          9,108          2,235        9,770         18,190       13,665
Investing activities ...................    (36,908)      (102,890)      (178,033)     (12,935)        (4,092)      (8,578)
Financing activities (1) ...............     26,477         92,998        185,076           --         (6,150)      13,490

OPERATING DATA:
EBITDA (4) .............................     28,720         17,882          2,452       22,489         30,116       27,729
Adjusted EBITDA (5) ....................     28,720         20,822          2,452       22,489         32,568       33,578
Consolidated fixed charge coverage
  ratio under the indenture (6) ........         --             --          1.69x        1.45x           2.0x         2.0x
Operations sustaining capital
  expenditures..........................      9,975         12,887          1,203        4,401          9,000        7,219
Total capital expenditures .............     37,138        103,001          1,203        5,344         10,714        8,593
Capacity (in thousands of barrels) .....     20,387         20,387         20,387       20,387         19,566       18,738
Percentage capacity leased .............         76%            68%            74%          70%            91%          86%
Throughput (in thousands of barrels) ...    109,805         81,994         13,223      118,275        119,502       99,230
Vessel calls ...........................        973            922            108        1,030          1,027        1,028

</TABLE>



                                       19
<PAGE>   22


NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA

N/M      Not meaningful--various transactions occurred prior to and in
         contemplation of the Castle Harlan acquisition which cause the balance
         sheet data as of November 27, 1996 to be not meaningful in comparison
         to the other period end dates presented. Therefore, the information is
         not presented.

(1)       On April 28, 1999, Statia Terminals Group completed its initial public
          equity offering of 7.6 million Class A common shares. The offering
          price was $20 per share raising gross proceeds of $152,000. The gross
          proceeds of the offering were used primarily to redeem all of Statia
          Terminals Group's outstanding Series A, B, C, D and E preferred stock
          and pay accrued dividends, underwriters' discounts and fees, and
          certain other costs directly associated with the offering. The
          remaining proceeds were invested and used during May 1999, along with
          existing cash, to repurchase in the open market a principal amount of
          $34,000 of Statia Terminals International's 11 3/4% First Mortgage
          Notes for $39,522, including acquisition costs and accrued interest of
          $3,681 and $1,841, respectively. The acquisition costs and the
          unamortized deferred financing costs related to the repurchased debt
          ($1,062) were recorded as an extraordinary charge.

(2)       On November 17, 1993, Statia Terminals N.V. and a subsidiary entered
          into an agreement with a third-party financier (First Salute) pursuant
          to which a portion of its land on St. Eustatius was leased to this
          third party for the purpose of construction and operation of five
          million barrels of crude oil storage tanks and a single point mooring
          system. Statia Terminals N.V. leased the facility from the third party
          for a minimum period of five years beginning February 1, 1995. The
          aggregate construction cost incurred for these leased assets totaled
          $88,513. In connection with the Castle Harlan acquisition, Praxair
          terminated the First Salute, off-balance-sheet financing arrangement
          and paid in full all obligations related to this lease. The fair
          market value of these leased assets was recorded as property and
          equipment.

          The decrease in total assets between December 31, 1996 and 1997 is
          primarily the result of lower cash, accounts receivable, inventory,
          and net property and equipment balances.

(3)       On July 29, 1998, a subsidiary of Statia Terminals International sold
          the Brownsville, Texas, facility, and a payment of $6,150 was made
          from Statia Terminals International to Statia Terminals Group for
          redemption of a portion of the Series D Preferred Stock.

(4)       EBITDA is defined as the sum of (a) income before provision for income
          taxes, (b) interest expense, (c) depreciation and amortization of
          certain intangible assets, and (d) the portion of the First Salute
          lease payments that represents interest expense for the periods prior
          to the Castle Harlan acquisition. The amount of the First Salute
          related interest expense excluded from EBITDA was $5,741 for the year
          ended December 31, 1995 and $5,600 for the period ended November 27,
          1996. EBITDA includes $3,000 of non-cash, stock-based compensation
          recognized on November 27, 1996 immediately prior to consummation of
          the Castle Harlan acquisition. 1998 EBITDA includes the loss
          recognized on the sale of Statia Terminals Southwest, Inc. and a
          hurricane charge of $1,652 and $800, respectively. 1999 EBITDA
          includes the special compensation expense and a hurricane charge of
          $4,099 and $1,750, respectively. EBITDA is presented not as an
          alternative measure of operating results or cash flow from operations
          (as determined in accordance with generally accepted accounting
          principles), but rather to provide additional information related to
          our debt servicing ability.

(5)       Adjusted EBITDA is defined as EBITDA adjusted for the effects of
          certain non-recurring transactions and represents the primary measure
          of profit and loss utilized by our management to make decisions about
          resources to be allocated to our operating segments. Adjusted EBITDA
          excludes $3,000 of non-cash, stock-based compensation recognized on
          November 27, 1996 immediately prior to the consummation of the Castle
          Harlan acquisition. 1998 Adjusted EBITDA excludes the loss recognized
          on the sale of Statia Terminals Southwest, Inc. and a hurricane charge
          of $1,652 and $800, respectively. 1999 Adjusted EBITDA excludes the
          special compensation expense and a hurricane charge of $4,099 and
          $1,750, respectively.


                                       20
<PAGE>   23


(6)       The consolidated fixed charge coverage ratio is the ratio of Statia
          Terminals International's adjusted EBITDA to fixed charges, both
          computed as set forth in the indenture to the mortgage notes. Statia
          Terminals International's ability to pay dividends is restricted by
          the indenture to the mortgage notes which generally requires, among
          other things, that it pay dividends only when its consolidated fixed
          charge coverage ratio is at least 2.0 to 1. A fixed charge coverage
          ratio of less than 2.0 to 1 also limits the amount of indebtedness
          Statia Terminals International may incur.

(7)       Prior to January 12, 1996, we were a wholly owned subsidiary of CBI
          Industries. On January 12, 1996, pursuant to the merger agreement
          dated December 22, 1995, CBI Industries became a wholly owned
          subsidiary of Praxair. This transaction was reflected in our
          consolidated financial statements as a purchase, effective January 1,
          1996. On November 27, 1996, Castle Harlan, members of our management
          and others acquired us from Praxair. This transaction is reflected in
          our consolidated financial statements, effective November 27, 1996, as
          a purchase. The application of purchase accounting at each acquisition
          date resulted in changes to the historical cost basis of accounting
          for certain assets. Accordingly, the information provided for periods
          before and after each of these transactions is not comparable.

(8)      Includes the operations of Statia Terminals Southwest, Inc. through
         June 30, 1998.

         The selected quarterly financial data required by this item is included
in note 18 of the notes to consolidated financial statements included under Item
8 of this Report.



                                       21
<PAGE>   24



            ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

         For purposes of the discussion below, reference is made to our
consolidated balance sheets as of December 31, 1998 and 1999. Reference is also
made to our consolidated statements of income (loss), stockholders' equity and
cash flows for the years ended December 31, 1997, 1998 and 1999. Substantially
all of our transactions are denominated in U.S. dollars and all figures are in
U.S. dollars unless otherwise indicated. We prepare our financial statements in
accordance with U.S. generally accepted accounting principles.

OVERVIEW OF OPERATIONS

         We began our operations in 1982 as Statia Terminals N.V., a Netherlands
Antilles corporation, operating an oil products terminal located on the island
of St. Eustatius. In 1984, CBI Industries, an industrial gases and contracting
services company, acquired a controlling interest in Statia Terminals N.V. In
1986, Statia Terminals N.V. purchased Statia Terminals Southwest, with its
facility at Brownsville, Texas. In 1990, CBI Industries became the sole owner of
Statia Terminals N.V. and Statia Terminals Southwest. In 1993, we acquired full
control of Statia Terminals Point Tupper, Incorporated, located at Point Tupper,
Nova Scotia.

         In January 1996, Praxair acquired CBI Industries. In November 1996,
Castle Harlan Partners II L.P., our management and others acquired from Praxair
all of the outstanding capital stock of Statia Terminals N.V., Statia Terminals,
Inc., their subsidiaries and certain of their affiliates. Castle Harlan Partners
II L.P. is a private equity investment fund managed by Castle Harlan, Inc., a
private merchant bank. At the same time, Statia Terminals Point Tupper was
amalgamated into Statia Terminals Canada, Inc. Statia Terminals Canada, Statia
Terminals International N.V. and Statia Terminals Group N.V. were organized for
purposes of facilitating the Castle Harlan acquisition. To assist with the
financing of the Castle Harlan acquisition, we sold $135 million of 11 3/4%
First Mortgage Notes. In July 1998, we sold Statia Terminals Southwest to an
unaffiliated third party purchaser.

         On April 28, 1999, we completed our initial public equity offering of
7.6 million Class A common shares. The offering price was $20 per share raising
gross proceeds of $152 million.

         During September 1998, Hurricane Georges caused $8.5 million in damage
to components of the St. Eustatius facility. Insulation on certain storage
tanks, electrical transmission systems and roofs of several buildings sustained
damage. During the third quarter of 1998, we recorded a charge of $0.8 million
consisting of an insurance deductible of $0.5 million related to the hurricane
damage and other expenses. Insurance proceeds related to this storm are expected
to total $7.7 million, of which $3.1 million was collected through December 31,
1999, and the remaining $4.6 million is anticipated to be collected in April
2000. Hurricane Georges did not significantly impact operations of the facility
which returned to normal within days of the storm.

         As a result of damages sustained to our St. Eustatius facility from
Hurricane Lenny in late November 1999, we incurred a one-time non-cash charge of
$1.5 million to partially reduce the carrying value of our shoreline protection
system and a one-time cash charge of $0.25 million to cover other hurricane
related expenses. The damaged shoreline protection system was not covered by
insurance and, together with other civil work, is expected to be replaced during
the first half of 2000 at a cost of $2.8 million.



                                       22
<PAGE>   25


         The following table sets forth for the periods indicated total
capacity, capacity leased, throughput and vessel calls for each of our operating
locations. "Total capacity" represents the average storage capacity available
for lease for a period. "Capacity leased" represents the storage capacity leased
to third parties weighted for the number of days leased in the month divided by
the capacity available for lease. "Throughput" volume is the total number of
inbound barrels discharged from a vessel, tank, rail car or tanker truck, not
including across-the-dock or tank-to-tank transfers. A "vessel call" occurs when
a vessel docks or anchors at one of our terminal locations in order to load
and/or discharge cargo and/or to take on bunker fuel. Such dockage or anchorage
is counted as one vessel call regardless of the number of activities carried on
by the vessel. A vessel call also occurs when we sell and deliver bunker fuel to
a vessel not calling at our terminals for the above purposes. Each of these
statistics is a measure of the utilization of our facilities and equipment.

       CAPACITY, CAPACITY LEASED, THROUGHPUT AND VESSEL CALLS BY LOCATION
                (Capacity and throughput in thousands of barrels)

<TABLE>
<CAPTION>
                                                                       For the years ended
                                                                           December 31,
                                                             -----------------------------------------
                                                                 1997          1998          1999
                                                             -----------   -----------   -----------
<S>                                                              <C>           <C>           <C>
             Netherlands Antilles and the Caribbean:
                 Total capacity                                  11,334        11,334        11,334
                 Capacity leased                                    76%           92%           90%
                 Throughput                                      62,944        74,158        61,737
                 Vessel calls                                       792           864           936

             Canada:
                 Total capacity                                   7,404         7,404         7,404
                 Capacity leased                                    70%           93%           79%
                 Throughput                                      53,011        43,468        37,493
                 Vessel calls                                       125           104            92

             All locations (1):
                 Total capacity                                  18,738        18,738        18,738
                 Capacity leased                                    74%           92%           86%
                 Throughput                                     115,955       117,626        99,230
                 Vessel calls                                       917           968         1,028
</TABLE>


---------------
(1)  The Brownsville, Texas, facility was sold on July 29, 1998. The statistics
     above exclude the operations of the Brownsville facility.

         A majority of our revenues are generated by product sales which
fluctuate with global oil prices. As a result, we experience volatility in our
revenue stream, which is not necessarily indicative of our profitability.

         Gross profit from terminaling services is generally higher than gross
profit from product sales. Our operating costs for terminaling services are
relatively fixed and generally do not change significantly with changes in
storage capacity leased. In addition, our operating costs are impacted by
inflationary cost increases, changes in storage capacity and changes in




                                       23
<PAGE>   26



ancillary services offered by us. Additions or reductions in storage, throughput
and ancillary service revenues directly impact our gross profit. Costs for the
procurement of petroleum products for sale are variable and linked to global oil
prices. Our product costs are also impacted by market supply conditions, types
of products sold and volumes delivered.

RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, the
percentage of revenues represented by some items in our consolidated income
statements.

                              RESULTS OF OPERATIONS
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                              For the years ended December 31,
                                           -------------------------------------------------------------------
                                                   1997                   1998                1999
                                           --------------------    --------------------   --------------------
                                                         % of                   % of                   % of
                                           Dollars     Revenues    Dollars     Revenues   Dollars     Revenues
                                           -------     --------    -------     --------   -------     --------
<S>                                         <C>           <C>      <C>           <C>      <C>           <C>
Revenues:
   Terminaling services .................   $  53,165     37.3%    $  66,625     48.7%    $  61,665     36.6%
   Product sales ........................      89,334     62.7%       70,137     51.3%      106,678     63.4%
                                            ---------    -----     ---------    -----     ---------    -----
     Total revenues .....................     142,499    100.0%      136,762    100.0%      168,343    100.0%
                                            ---------    -----     ---------    -----     ---------    -----
 Costs of revenues:
   Terminaling services .................      38,351     26.9%       40,739     29.8%       38,064     22.6%
   Product sales ........................      84,588     59.4%       65,149     47.6%       99,601     59.2%
                                            ---------    -----     ---------    -----     ---------    -----
     Total costs of revenues ............     122,939     86.3%      105,888     77.4%      137,665     81.8%
                                            ---------    -----     ---------    -----     ---------    -----
   Gross profit .........................      19,560     13.7%       30,874     22.6%       30,678     18.2%
 Administrative expenses ................       7,735      5.4%        9,500      6.9%        8,745      5.2%
 Special compensation expense ...........          --       --            --       --         4,099      2.4%
 Hurricane charges ......................          --       --           800      0.6%        1,750      1.0%
                                            ---------    -----     ---------    -----     ---------    -----
   Operating income .....................      11,825      8.3%       20,574     15.1%       16,084      9.6%
 Loss (gain) on disposition of
  property and equipment ................        (109)    (0.1)%       1,652      1.2%           --       --
 Interest expense .......................      16,874     11.8%       16,851     12.3%       14,286      8.5%
 Interest income ........................         555      0.4%          684      0.5%          846      0.5%
                                            ---------    -----     ---------    -----     ---------    -----
Income (loss) before provision for income
  taxes, preferred stock dividends and
  extraordinary charge ..................      (4,385)    (3.0)%       2,755      2.1%        2,644      1.6%

 Provision for income taxes .............         780      0.5%          320      0.2%          780      0.5%
 Preferred stock dividends ..............       3,196      2.2%        3,938      2.9%        2,257      1.4%
 Extraordinary charge related to early
   extinguishment of debt ...............          --       --            --       --         4,743      2.8%
                                            ---------    -----     ---------    -----     ---------    -----
   Net loss to common stockholders ......   $  (8,361)    (5.7%)   $  (1,503)    (1.0%)   $  (5,136)    (3.1%)
                                            =========    =====     =========    =====     =========    =====

</TABLE>



                                       24
<PAGE>   27



         The following tables set forth, for the periods indicated (a) the total
revenues and total operating income (loss), after allocation of administrative
expenses, at each of our operating locations and (b) the percentage such revenue
and operating income (loss) relate to our total revenue and operating income.
You should note that we sold our Brownsville, Texas, facility on July 29, 1998,
and the figures above and below and our consolidated financial statements
include the Brownsville facility through June 30, 1998.

                              REVENUES BY LOCATION
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                            For the years ended December 31,
                                          ------------------------------------------------------------------
                                                  1997                    1998                 1999
                                          ------------------      ------------------      ------------------
                                                       % of                    % of                    % of
                                          Dollars      Total      Dollars      Total      Dollars      Total
                                          -------      -----      -------      -----      -------      -----
<S>                                      <C>            <C>      <C>            <C>      <C>            <C>
Netherlands Antilles and the Caribbean   $ 122,042      85.6%    $ 114,091      83.4%    $ 149,852      89.0%
Canada                                      18,586      13.0%       21,058      15.4%       18,491      11.0%
Brownsville, Texas, facility                 1,871       1.4%        1,613       1.2%           --       --
                                         ---------    -------    ---------    -------    ---------   ------
    Total                                $ 142,499     100.0%    $ 136,762     100.0%    $ 168,343     100.0%
                                         =========    =======    =========    =======    =========   ======
</TABLE>

                       OPERATING INCOME (LOSS) BY LOCATION
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                            For the years ended December 31,
                                          ------------------------------------------------------------------
                                                  1997                    1998                  1999
                                          ------------------      ------------------      ------------------
                                                       % of                    % of                    % of
                                          Dollars      Total      Dollars      Total      Dollars      Total
                                          -------      -----      -------      -----      -------      -----
<S>                                       <C>           <C>       <C>           <C>       <C>           <C>
Netherlands Antilles and the Caribbean    $10,301       87.1%     $ 14,442      70.2%     $ 12,981      80.7%
Canada                                      3,539       29.9%        6,625      32.2%        3,103      19.3%
Brownsville, Texas, facility               (2,015)     (17.0)%        (493)     (2.4)%          --       --
                                          -------     --------    --------    --------   ---------   ------
    Total                                 $11,825      100.0%     $ 20,574     100.0%     $ 16,084     100.0%
                                          =======     =======     ========    =======     ========   ======
</TABLE>

YEAR ENDED DECEMBER 31, 1999 COMPARED WITH YEAR ENDED DECEMBER 31, 1998

         COMPARABILITY

         On July 29, 1998, we sold Statia Terminals Southwest to an unrelated
third party. Our consolidated financial statements include the operations of
Statia Terminals Southwest through June 30, 1998. Therefore, the year ended
December 31, 1998 includes the operations of Statia Terminals Southwest for six
months, and the year ended December 31, 1999 includes no operations of Statia
Terminals Southwest. Additionally, our initial public offering of equity which
was completed on April 28, 1999 has impacted our 1999 financial condition and
results of operations and, therefore, comparability to prior years.

         REVENUES

         Total revenues for the year ended December 31, 1999 were $168.3 million
compared to $136.8 million for the year ended December 31, 1998, an increase of
$31.5 million, or 23.1%. Revenues from terminaling services (resulting from
revenue from storage, throughput, dock usage, emergency response and other




                                       25
<PAGE>   28


terminal services), for the year ended December 31, 1999 were $61.7 million
compared to $66.6 million for the previous year, a decrease of $4.9 million, or
7.4%.

         The decrease in terminaling services revenue for the year ended
December 31, 1999 compared to the previous year was principally due to the
adverse effects of the accord established between many of the oil producing
nations, some of whom we do business with, to raise crude oil prices by reducing
supply. Members of the accord have reduced their production of crude oil which,
in turn, has reduced the worldwide quantity of crude oil and petroleum products
in storage. The accord was signed in March 1999 and became effective April 1,
1999 for a one-year term. The accord has primarily impacted our terminaling
services revenues beginning with the second half of 1999 and continuing to date
as certain customers chose not to renew their storage contracts. The signatories
are scheduled to meet in late March 2000 to discuss the status of the agreement.
However, we cannot predict when or if these producers or others will increase
production so as to bring the supply and demand into balance and result in a
more stable market.

         For the year ended December 31, 1999, approximately 69% of our tank
capacity was leased pursuant to long-term contracts at our St. Eustatius and
Point Tupper locations together. Approximately 60% of our storage and throughput
revenues, excluding related ancillary services, were derived from long-term
contracts during the same period.

         Revenues from terminaling services at St. Eustatius decreased
approximately $1.4 million, or 3.2%, during the year ended December 31, 1999 as
compared to the year ended December 31, 1998, due to decreased throughput and a
lower percentage of capacity leased. Total throughput decreased from 74.2
million barrels during the year ended December 31, 1998 to 61.7 million barrels
during 1999 due primarily to decreased throughput of crude oil and petroleum
products. Twelve fewer cargo vessels called at the St. Eustatius facility during
the year ended December 31, 1999 than during the same period of 1998, resulting
in lower revenues from port charges, which consist of dock charges, emergency
response fees and other terminal charges. For the year ended December 31, 1999,
the overall percentage of capacity leased at this facility was 90% compared to
92% for the same period of 1998, reflecting a decrease in the percentage of
capacity leased for residual fuel oil tankage, which was partially offset by an
increase in the percentage of capacity leased for clean products.

         Revenues from terminaling services at Point Tupper decreased $2.3
million, or 11.3% during the year ended December 31, 1999 as compared to the
year ended December 31, 1998. The decrease is due to a lower percentage capacity
leased and fewer vessel calls during the year ended December 31, 1999. The
percentage of tank capacity leased at Point Tupper decreased from 93% for the
year ended December 31, 1998 to 79% for the same period of 1999. This decrease
is primarily the result of the decision by a customer of this facility, which is
a participant in the accord, not to renew its crude oil storage contract at the
end of the second quarter of 1999. Fewer vessels called during the year ended
December 31, 1999 as compared to the same period of 1998 which led to lower
revenues from port charges at this facility.

         Revenues from product sales were $106.7 million for the year ended
December 31, 1999 compared to $70.1 million for the same period in 1998, an
increase of $36.6 million, or 52.1%. This increase was primarily due to
increases in the volume of products delivered and increases in average selling
prices. Metric tons of product sold increased 19.2% during the year ended
December 31, 1999 as compared to the same period of 1998. Average selling prices




                                       26
<PAGE>   29


increased 27.7% when comparing the year ended December 31, 1999 with the same
period of 1998. These changes in average selling prices were primarily the
result of changes in the world oil markets which have been significantly
influenced by the accord.

         GROSS PROFIT

         Gross profit for the year ended December 31, 1999 was $30.7 million
compared to $30.9 million for the same period of 1998, representing a decrease
of $0.2 million, or 0.6%. The decrease in gross profit is primarily the result
of lower gross profits realized on terminaling services, which were partially
offset by higher dollar gross margins realized on product sales. Gross profit
from terminaling services decreased primarily as a result of certain customers
choosing not to renew their storage and throughput contracts due, in part, to
reduced supply resulting from the accord established among many of the oil
exporting nations.

         ADMINISTRATIVE EXPENSES

         Administrative expenses were $8.7 million for the year ended December
31, 1999 as compared to $9.5 million for the same period of 1998, representing a
decrease of $0.8 million, or 7.9%. The decrease during the year ended December
31, 1999, as compared to the same period of 1998, is primarily the result of the
termination of the Castle Harlan management fee subsequent to our initial public
offering of equity which was partly offset by higher personnel and related
costs.

         SPECIAL COMPENSATION EXPENSES

         As more fully discussed in notes 3 and 11 of the notes to consolidated
financial statements, we recorded special compensation expense during the year
ended December 31, 1999 of $4.1 million of which $2.2 million was a non-cash
charge.

         HURRICANE CHARGES

         As a result of damages sustained to our St. Eustatius facility from
Hurricane Lenny in late November 1999, we incurred a one-time non-cash charge of
$1.5 million to partially reduce the carrying value of our shoreline protection
system and a one-time cash charge of $0.25 million to cover other hurricane
related expenses. The damaged shoreline protection system was not covered by
insurance and, together with certain other civil work, is expected to be
replaced during the first half of 2000 at a cost of $2.8 million.

         During September 1998, Hurricane Georges damaged components of our St.
Eustatius facility. However, operations were not significantly impacted by the
hurricane and returned to normal within days of the storm. During 1998, we
recorded a charge of $0.8 million representing an insurance deductible of $0.5
million related to the hurricane damage and certain other costs resulting from
the hurricane which will not be recovered through our insurance policies.

         LOSS ON SALE OF ASSETS

         As more fully discussed in note 15 of the notes to consolidated
financial statements, we recognized a loss on the sale of Statia Terminals
Southwest, Inc. during the year ended December 31, 1998 of $1.7 million.




                                       27
<PAGE>   30

         INTEREST EXPENSE

         During the years ended December 31, 1998 and 1999, we incurred $16.9
million and $14.3 million, respectively, of interest expense from interest
accrued on our mortgage notes due in 2003, interest expense and commitment fees
on our revolving credit facility, amortization expense related to deferred
financing costs and bank charges. In May 1999, we repurchased $34.0 million of
the mortgage notes which resulted in lower interest and amortization expense
related to this debt. Interest expense and commitment fees on our revolving
credit facility were not significant for 1999 and 1998.

         PROVISION FOR INCOME TAXES

         Provision for income taxes was $0.8 million for the year ended December
31, 1999, as compared to $0.3 million for the same period of 1998. The provision
for income taxes has been increased in 1999 in contemplation of potential
additional income tax assessments from jurisdictions in which we operate.

         PREFERRED STOCK DIVIDENDS

         Preferred stock dividends accrued were $2.3 million for the year ended
December 31, 1999, as compared to $3.9 million for the same period of 1998. The
decrease during 1999 is primarily the result of the redemption of all
outstanding preferred stock in connection with our initial public offering of
equity.

         EXTRAORDINARY CHARGE RELATED TO EARLY EXTINGUISHMENT OF DEBT

         As more fully discussed in note 3 of the notes to consolidated
financial statements, we recognized an extraordinary charge of $4.7 million
during the year ended December 31, 1999 in connection with the repurchase of
$34.0 million of our 11 3/4% mortgage notes. There was no income tax effect
associated with this extraordinary charge.

         NET LOSS

         Net loss to common stockholders was $5.1 million for the year ended
December 31, 1999, as compared to a net loss of $1.5 million for the same period
of 1998, an increase of $3.6 million. The increase in the net loss is
attributable to the net effect of the factors discussed above.

         During 2000, we will continue to pursue our business strategy of:

         o  developing strategic relationships with existing and potential
            customers,

         o  generating stable cash flow through long term contracts,

         o  offering customers a wide range of value added services, and

         o  developing terminaling opportunities in Canada.

         Should this strategy and other business development initiatives prove
successful, and with the reduction of our interest expense and preferred stock
dividends resulting from the IPO-related transactions discussed above, we expect
to reverse the recent trend of producing annual net losses. Although we intend
to pursue strategies which we expect to reverse the recent trend of annual net
losses, our ability to do so will be subject to future economic conditions and
to commercial, financial, and other factors, many of which are beyond our
control. There can be no assurances that we will be able to meet our objectives
in whole or in part, or at all.



                                       28
<PAGE>   31


YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER 31, 1997

         COMPARABILITY

         On July 29, 1998, we sold Statia Terminals Southwest, Inc. to an
unrelated third-party. Our consolidated financial statements include the
operations of Statia Terminals Southwest through June 30, 1998. Therefore, the
year ended December 31, 1997 includes the operations of Statia Terminals
Southwest for six months more than the same period in 1998.

         REVENUES

         Total revenues for the year ended December 31, 1998 were $136.8 million
compared to $142.5 million for the year ended December 31, 1997, a decrease of
$5.7 million, or 4.0%.

         Revenues from terminaling services, for the year ended December 31,
1998 were $66.6 million compared to $53.2 million for the previous year, an
increase of $13.4 million, or 25.3%. The improvement in terminaling services
revenue for the year ended December 31, 1998 compared to the previous year was
principally due to:

         o  our ability to attract additional long-term customers who use our
            facilities as part of their strategic distribution networks;

         o  additional vessel calls at St. Eustatius resulting in higher dock
            charges and emergency response fees; and

         o  contango conditions in the international petroleum markets.

         Revenues from terminaling services at St. Eustatius increased
approximately $8.7 million, or 24.2%, during the year ended December 31, 1998 as
compared to the year ended December 31, 1997. Total throughput increased from
62.9 million barrels during the year ended December 31, 1997 to 74.2 million
barrels during the same period of 1998 due primarily to higher throughput of
fuel oil and petroleum products, and was partially offset by reduced throughput
of crude oil. Seventy-two more vessels called at the St. Eustatius facility
during the year ended December 31, 1998 than during the same period of 1997,
resulting in higher revenues from dock charges and stand-by emergency response
fees. For the year ended December 31, 1998, the overall percentage of capacity
leased at this facility was 92% compared to 76% for the same period of 1997,
reflecting increases in the percentage of capacity leased for fuel oil tankage
and petroleum products.

         Revenues from terminaling services at Point Tupper increased $5.1
million, or 32.6% during the year ended December 31, 1998 as compared to the
year ended December 31, 1997. The percentage of tank capacity leased at Point
Tupper increased from 70% for the year ended December 31, 1997 to 93% for the
same period of 1998. This increase was primarily the result of additional crude
oil and clean petroleum products tankage leased during the year ended December
31, 1998, as compared to the same period of 1997. Fewer vessel calls led to
lower port charge revenues at this facility during the year ended December 31,
1998, as compared to the same period of 1997.

         Revenues from product sales were $70.1 million for the year ended
December 31, 1998 compared to $89.3 million for the same period in 1997, a
decrease of $19.2 million, or 21.5%. The decrease was primarily due to lower
comparative selling prices for bunker fuels reflecting market conditions.




                                       29
<PAGE>   32


Average selling prices decreased 30.2% when comparing the year ended December
31, 1998 with the same period of 1997. However, metric tons of product sold
increased 13.6% during the year ended December 31, 1998, as compared to the same
period of 1997.

         GROSS PROFIT

         Gross profit for the year ended December 31, 1998 was $30.9 million
compared to $19.6 million for the same period of 1997, representing an increase
of $11.3 million, or 57.8%. The increase in gross profit is primarily the result
of the increased terminaling services revenue produced at a small incremental
cost. Additionally, we realized higher dollar gross margins on bunker sales
during the year ended December 31, 1998, as compared to the same period of 1997
due to higher volumes of bunker fuels delivered.

         ADMINISTRATIVE EXPENSES

         Administrative expenses were $9.5 million for the year ended December
31, 1998, as compared to $7.7 million for the same period of 1997, representing
an increase of $1.8 million, or 22.8%. The increase during the year ended
December 31, 1998, as compared to the same period of 1997, is primarily the
result of higher personnel costs and some professional fees.

         HURRICANE CHARGES

         During September 1998, Hurricane Georges damaged components of our St.
Eustatius facility. However, operations were not significantly impacted by the
hurricane and returned to normal within days of the storm. During 1998, we
recorded a charge of $0.8 million representing an insurance deductible of $0.5
million related to the hurricane damage and certain other costs resulting from
the hurricane which will not be recovered through our insurance policies.

         LOSS ON SALE OF ASSETS

         As more fully discussed in note 15 of the notes to consolidated
financial statements, we recognized a loss on the sale of Statia Terminals
Southwest, Inc. during the year ended December 31, 1998 of $1.7 million.

         INTEREST EXPENSE

         During the years ended December 31, 1997 and 1998, we incurred $16.9
million of interest expense from interest accrued on our mortgage notes due in
2003, amortization expense related to deferred financing costs and bank charges.

         PREFERRED STOCK DIVIDENDS

         Preferred stock dividends were $3.9 million for the year ended December
31, 1998 as compared to $3.2 million for the same period of 1997, representing
an increase of $0.7 million, or 23.2%. Preferred stock dividends had been
computed and accrued but not paid on Statia Terminals Group's Series A, B and C
Preferred Stock through December 31, 1998. The increase during the year ended
December 31, 1998 as compared to the same period of 1997 is the result of the
increasing balance of dividends payable and a rate increase.


                                       30
<PAGE>   33


         NET LOSS

         Net loss to common stockholders was $1.5 million for the year ended
December 31, 1998 as compared to a net loss of $8.4 million for the same period
of 1997, an improvement of $6.9 million. The decrease in the net loss is
attributable to the net effect of the factors discussed above.

SELECTED QUARTERLY FINANCIAL INFORMATION

         The following table sets forth selected unaudited quarterly operating
results for each of our last eight quarters. This information was prepared by us
on a basis consistent with our audited financial statements and includes all
adjustments, consisting of normal and recurring adjustments, that we consider
necessary for a fair presentation of the data. These quarterly results are not
necessarily indicative of future results of operations. This information should
be read in conjunction with our consolidated financial statements and notes
thereto included elsewhere in this Report and our quarterly reports on Form
10-Q.
<TABLE>
<CAPTION>

                                                          Quarters Ended
                                  ---------------------------------------------------------------
                                    MARCH 31        JUNE 30      SEPTEMBER 30     DECEMBER 31        TOTAL
                                    --------        -------      ------------     -----------        -----
<S>                                <C>             <C>            <C>               <C>            <C>
                 1998
      Total revenues               $  30,364       $  36,472      $  32,699         $ 37,227       $  136,762
      Operating income                 2,999           5,231          5,635            6,709           20,574
      EBITDA                           5,804           4,082          8,373           11,857           30,116

                 1999
      Total revenues               $  37,415       $  42,267      $  43,310         $ 45,351       $  168,343
      Operating income                 4,333           4,369          4,113            3,269           16,084
      EBITDA                           7,251           7,455          6,817            6,206           27,729
</TABLE>


LIQUIDITY AND CAPITAL RESOURCES

         CASH FLOW FROM OPERATING ACTIVITIES

         Net cash provided by operating activities was $9.8 million, $18.2
million and $13.7 million for the years ended December 31, 1997, 1998 and 1999,
respectively. Cash flow from operations has been our primary source of liquidity
during these periods. Differences between net losses and positive operating cash
flow have resulted primarily from depreciation and amortization burdens,
non-cash charges and changes in various asset and liability accounts.

         At December 31, 1999, we had cash and cash equivalents on hand of $5.7
million, compared to $14.1 million at December 31, 1998. Accounts receivable and
accounts payable were $16.7 million and $14.1 million, respectively, at December
31, 1999, as compared to $9.9 million and $9.3 million, respectively, at
December 31, 1998. The increase in accounts receivable and accounts payable is
primarily due to changes in the world oil markets which have increased both our
selling prices and related costs of product sales.

         We periodically purchase refined petroleum products for resale as
product sales, and our inventory balances change based on these activities. As
of December 31, 1999 and 1998, our inventory balances were $3.2 million and $4.5
million, respectively.



                                       31
<PAGE>   34


         CASH FLOW FROM INVESTING ACTIVITIES

         Net cash used in investing activities was $12.9 million, $4.1 million
and $8.6 million for the years ended December 31, 1997, 1998 and 1999,
respectively. Investing activities during 1997, 1998 and 1999 included purchases
of property and equipment of $5.3 million, $10.7 million and $8.6 million,
respectively. See "Capital Expenditures" below. Additionally, as more fully
discussed in note 15 of the notes to consolidated financial statements, on July
29, 1998, we received $6.5 million of cash proceeds from the sale of our
Brownsville, Texas, facility.

         During the year ended December 31, 1997, we spent $7.7 million related
to the Castle Harlan acquisition. This amount includes:

         o  $5.1 million paid in February 1997 to satisfy the remaining cash
            portion of the purchase price, and

         o  $2.6 million of commissions, fees and expenses.

         CASH FLOW FROM FINANCING ACTIVITIES

         Our cash flows from financing activities for the year ended December
31, 1999 were impacted by our initial public offering of equity which is more
fully discussed in note 3 of the notes to consolidated financial statements. The
gross proceeds of the offering were used primarily to redeem all of our
outstanding Series A, B, C, D and E preferred stock ($94.8 million) and pay
accrued dividends ($9.7 million), underwriters' discounts, fees, and other costs
directly associated with the offering ($15.2 million). In addition, proceeds
from the offering were invested and used during May 1999, along with existing
cash, to repurchase in the open market a principal amount of $34 million of the
11 3/4% First Mortgage Notes previously issued by two of our subsidiaries ($37.7
million). In connection with the repurchase of the mortgage notes, we incurred a
$4.7 million loss on the early extinguishment of debt.

         On August 13, 1999, we paid a distribution of $0.3165 per Class A
common share representing our target quarterly distribution of $0.45 per share
prorated from the date of closing of our initial public offering of equity on
April 28, 1999 through June 30, 1999. On November 12, 1999, we paid a
distribution of $0.45 per Class A common share representing the target quarterly
distribution for the third quarter of 1999. During 1999, aggregate distributions
paid on the Class A common shares of $0.7665 per share amounted to $5.8 million.
In addition, during 1999 distributions on the Class B subordinated shares
totaling $0.7665 per share were declared after the end of the second and third
quarters, aggregating $2.9 million. Distributions on the Class B subordinated
shares were deferred and will remain deferred until expiration of the deferral
period as defined in our articles of incorporation.

         On January 19, 2000, our board of directors declared a distribution of
$0.15 per share on the Class A common shares, payable on February 14, 2000, for
the benefit of shareholders of record at the close of business on January 31,
2000. Pursuant to our articles of incorporation, the $0.30 per share difference
between the declared distribution and the target quarterly distribution of $0.45
per share represents an arrearage which must be paid from future available cash.
No distribution was declared on the Class B subordinated shares.

         The current petroleum market situation has negatively affected our
revenues, available cash, and earnings. If the current market trend continues,
we believe that it is unlikely that a distribution per common share will be paid
following the end of the first quarter of 2000. Should this be the case, as




                                       32
<PAGE>   35


required by our articles of incorporation, the difference between the target
quarterly distribution of $0.45 and any lesser distribution per share will
accrue for payment from our future available cash. See "Distributions" under
Item 5 for further discussion.

         In December 1999, our board of directors authorized the open market
purchase of up to one million shares of our Class A common shares. As of
December 31, 1999, and March 16, 2000, we had acquired 372,300 and 599,600 Class
A common shares, respectively, at an aggregate cost of $2.3 million and $3.7
million, respectively. As conditions warrant, we intend to continue periodic
open market purchases of our Class A common shares under the stock purchase
program.

         During the year ended December 31, 1998, we utilized the net proceeds
from the sale of the Brownsville, Texas, facility to retire $6.15 million of
Statia Terminals Group's Series D Preferred Stock.

         We have a $17.5 million revolving credit facility secured by our
accounts receivable and oil inventory. The revolving credit facility is
available for working capital needs and letter of credit financing, and it
permits us to borrow in accordance with our available borrowing base, which was
estimated at $10.6 million at December 31, 1999. The revolving credit facility
bears interest at the prime rate plus 0.5% per annum (9.0% at December 31, 1999)
and will expire on November 27, 2000. During December 1999, we borrowed $3.4
million on this facility, all of which was repaid by December 31, 1999.

         The debt service costs associated with the borrowings under the
mortgage notes impose a significant burden on our liquidity. The mortgage notes
accrue interest at 11 3/4% per annum payable semi-annually on May 15 and
November 15. The mortgage notes will mature on November 15, 2003. As further
discussed in note 5 of the notes to consolidated financial statements, the
mortgage notes are redeemable in whole or in part at our option at any time on
or after November 15, 2000 at redemption prices set forth in the indenture
relating to the mortgage notes. Under the terms of the indenture, we may also
forego the redemption process and repurchase the mortgage notes in the open
market after November 15, 2000. Any time on or prior to November 15, 1999, we
were allowed to redeem or repurchase up to 35% of the aggregate principal amount
of the mortgage notes with the proceeds of one or more equity offerings. As
further discussed above and in note 3 of the notes to consolidated financial
statements, during May 1999, and in connection with our initial public offering
of equity, we repurchased in the open market a principal amount of $34 million
of the mortgage notes.

         The indenture generally limits the incurrence of additional debt by
Statia Terminals International, limits the ability of Statia Terminals
International to pay Statia Terminals Group dividends or make any other
distribution to Statia Terminals Group, and limits the ability of Statia
Terminals International to sell its assets. We may incur additional indebtedness
as long as our fixed charge coverage ratio is at least 2.0 to 1. The fixed
charge coverage ratio is the ratio of adjusted EBITDA to fixed charges, each
computed as set forth in the indenture with respect to the mortgage notes. The
indenture requires EBITDA for Statia Terminals International to be adjusted for
specified non-cash income and expense items to compute adjusted EBITDA. Adjusted
EBITDA for Statia Terminals International also excludes administrative expenses,
and prior to the termination of the Castle Harlan management fee, excluded that
fee incurred by Statia Terminals Group. Under the terms of the indenture, Statia
Terminals International may not pay Statia Terminals Group any dividend if at
the time of declaration:

         o  a default or event of default under the indenture shall have
            occurred and be continuing or shall occur as a consequence thereof;



                                       33
<PAGE>   36


         o  Statia Terminals International's consolidated fixed charge coverage
            ratio (as defined in the indenture) for the prior four full quarters
            is less than 2.0 to 1; or

         o  the amount of such dividend, when added to the aggregate amount of
            all other dividends and specific other restricted payments made by
            Statia Terminals International after November 27, 1996 and not
            covered by other exceptions in the indenture, exceeds the sum
            specified below.

         Such sum is:

         50% of Statia Terminals International's consolidated net income, as
         defined in the indenture and taken as one accounting period, from
         November 27, 1996 to the end of Statia Terminals International's most
         recently ended fiscal quarter for which internal financial statements
         are available at the time of such dividend or, if such aggregate
         consolidated net income is a deficit, minus 100% of such aggregate
         deficit,

         PLUS

         the net cash proceeds from the issuance and sale after November 27,
         1996 of Statia Terminals International capital stock to Statia
         Terminals Group and/or third parties.

         Some other dividends, generally unrelated to operating cash flow, are
permitted notwithstanding the second and third items above.

         As of March 16, 2000, no event of default existed and was continuing.
The consolidated fixed charge coverage ratio as defined in the indenture was 2.0
to 1 at December 31, 1999. Additionally, at December 31, 1999, the sum of Statia
Terminals International's dividends, restricted payments, aggregate consolidated
net income (deficit) and capital stock proceeds was approximately $19.5 million.

         We believe that cash flow generated by operations and amounts available
under the revolving credit facility will be sufficient, until the maturity of
the mortgage notes, to fund working capital needs, capital expenditures and
other operating requirements, including any expenditures required by applicable
environmental laws and regulations, and to service debt. It is unlikely that we
will be able to repay the mortgage notes at maturity through projected operating
cash flow, and it will be necessary to refinance all or a portion of the
mortgage notes, or redeem the mortgage notes from additional equity funds, on or
after November 15, 2000, and before their maturity on November 15, 2003. We
continuously monitor financial market conditions and our financial position to
determine when and whether we will refinance or redeem, all or a portion of the
mortgage notes prior to their maturity. Although we intend to refinance and
believe that we will be able to refinance the mortgage notes during the November
15, 2000, to November 15, 2003, time period, our operating performance and
ability to service or refinance the mortgage notes and to extend or refinance
the revolving credit facility will be subject to future economic conditions and
to commercial, financial, and other factors, many of which are beyond our
control. There can be no assurances that we will be able to repay at maturity or
refinance our indebtedness in whole or in part, or at all, on terms acceptable
to us. If we are unable to repay or refinance the mortgage notes at or prior to
maturity, we will be forced to adopt alternative strategies that may include
seeking additional equity capital.

         It is anticipated that any common share arrearages will not adversely
impact our ability to repay or refinance the mortgage notes since the mortgage
notes are obligations of two of our subsidiaries, not of Statia Terminals Group.




                                       34
<PAGE>   37


Depending on the terms and conditions of any refinancing of the mortgage notes,
our ability to pay the target quarterly distributions and common share
arrearages may be impacted.

CAPITAL EXPENDITURES

         We spent $5.3 million, $10.7 million and $8.6 million during the years
ended December 31, 1997, 1998 and 1999, respectively. These amounts include $0.9
million, $1.7 million and $1.0 million, respectively, which was spent to enhance
our ability to generate incremental revenues. During 1997, capital expenditures
were made primarily for various piping and tank enhancements at each location
and a new warehouse at St. Eustatius. During 1998 and 1999, a majority of
capital expenditures were related to sustaining our existing operations,
including our terminal and marine maintenance programs.

         Our initial capital expenditure budget for 2000 was $12.0 million
primarily for items to sustain our existing operations. We subsequently revised
our capital expenditure budget to $8.0 million by deferring certain previously
anticipated expenditures. Our capital expenditure forecast includes
approximately $2.8 million to repair damage caused by Hurricane Lenny, most of
which will be spent to replace damage to the shoreline protection systems and
other civil infrastructure at St. Eustatius. Spending for producing incremental
revenues is contingent upon the securing of additional business. Our 2000
capital expenditure forecast includes certain expenditures originally budgeted
for prior periods but which were not completed in those prior periods.

         The following table sets forth capital expenditures by location and
separates such expenditures into those which produce, or have the potential to
produce, incremental revenue, and those which sustain existing operations.

                   SUMMARY OF CAPITAL EXPENDITURES BY LOCATION
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                    PRODUCE           SUSTAIN
                                                  INCREMENTAL         EXISTING
                                                    REVENUES         OPERATIONS            TOTAL          % OF TOTAL
                                                  -----------         --------             -----          ----------

<S>                                                 <C>             <C>               <C>                     <C>
YEAR ENDED DECEMBER 31, 1997
   Netherlands Antilles                             $    696        $   2,860         $    3,556              66.5%
   Canada                                                120              834                954              17.9%
   Brownsville, Texas, facility (1)                      125              100                225               4.2%
   All other United States (2)                            --              609                609              11.4%
                                                    --------        ---------         ----------           --------
     Total                                          $    941        $   4,403         $    5,344             100.0%
                                                    ========        =========         ==========           ========

YEAR ENDED DECEMBER 31, 1998
   Netherlands Antilles                             $    667        $   5,990         $    6,657              62.1%
   Canada                                                829              476              1,305              12.2%
   Brownsville, Texas, facility (1)                      218               94                312               2.9%
   All other United States (2)                            --            2,440              2,440              22.8%
                                                    --------        ---------         ----------           --------
     Total                                          $  1,714        $   9,000         $   10,714             100.0%
                                                    ========        =========         ==========           ========

YEAR ENDED DECEMBER 31, 1999
   Netherlands Antilles                             $    586        $   4,613         $    5,199              60.5%
   Canada                                                416            1,602              2,018              23.5%
   United States (2)                                      --            1,376              1,376              16.0%
                                                    --------        ---------         ----------           --------
     Total                                          $  1,002        $   7,591         $    8,593             100.0%
                                                    ========        =========         ==========           ========
</TABLE>

                                       35
<PAGE>   38

------------------
(1)  We sold our Brownsville, Texas, facility on July 29, 1998.

(2)  Includes expenditures for U.S. flagged marine equipment utilized primarily
     in the Netherlands Antilles.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

         We are subject to comprehensive and periodically changing
environmental, health and safety laws and regulations within the jurisdictions
of our operations, including those governing oil spills, emissions of air
pollutants, discharges of wastewater and storm water, and the disposal of
non-hazardous and hazardous waste. In 1997, 1998 and 1999, our capital
expenditures for compliance with environmental, health and safety laws and
regulations were approximately $1.3 million, $2.7 million and $2.5 million,
respectively. These figures do not include routine operational compliance costs,
such as the costs for the disposal of hazardous and non-hazardous solid waste,
which were approximately $0.2 million, $0.9 million and $1.2 million in 1997,
1998 and 1999, respectively. We believe we are presently in substantial
compliance with applicable laws and regulations governing environmental, health
and safety matters.

         The Castle Harlan acquisition agreement includes a covenant whereby
Praxair shall assume financial responsibility for some environmental
investigation, remediation and upgrade costs at Point Tupper. With respect to
seven identified items of environmental investigation and remediation, this
covenant is subject to dollar limitations aggregating $4.2 million. With respect
to all other costs covered by the Praxair covenant there are no dollar
limitations. However, we cannot guarantee that Praxair will pay all of the
indemnified amounts without dispute or delay.

         Past use of the Point Tupper facility, including its past operation by
others as an oil refinery, have resulted in particular on-site areas of known
and potential contamination, as described below. Under Canadian environmental,
health and safety laws, we, as the owner and operator of the facility, can be
held liable for mitigation or remediation of, and damages arising from, these or
other as yet unknown environmental, health and safety conditions at the
facility.

         In connection with the Castle Harlan acquisition in 1996, Phase I and
limited Phase II environmental site assessments were conducted at the Point
Tupper terminal to identify potential environmental, health and safety matters.
Particular environmental matters and conditions that were likely to require the
incurrence of costs were identified, and Praxair agreed to pay the costs of
addressing some of these matters, subject in some cases to monetary limitations
as discussed above. Since then we have undertaken, in accordance with
environmental, health and safety laws, investigation, remediation and upgrade
actions to address these and other more recently identified matters.

         With respect to the foregoing environmental liabilities and costs,
Praxair, in connection with the Castle Harlan acquisition, has paid
approximately $3.9 million through December 31, 1999. We anticipate incurring
additional costs of $0.5 million which are not likely to be reimbursable from
Praxair. Based on the investigation conducted and information available to date,
the potential cost of additional remediation and compliance related to the
foregoing matters is currently estimated to be approximately $13 million.
Praxair is required under the Castle Harlan acquisition agreement to pay the
costs of this additional remediation and compliance, and has not disputed this
obligation.

         We accrued a total of $1.5 million during 1996 to cover environmental,
health and safety costs we have identified as not being covered by the Praxair
agreement as well as the $0.5 million identified above. Through December 31,
1999, $42,000 of this amount had been expended. We periodically review the
adequacy of this accrual and during 1999 determined $0.25 million originally




                                       36
<PAGE>   39


provided for environmental contingencies at our St. Eustatius facility were no
longer necessary. Accordingly, this portion of the accrual was eliminated and
credited to costs of revenues. We believe that environmental, health and safety
costs will not have a material adverse effect on the Company's financial
position, cash flows or results of operations, subject to reimbursements from
Praxair.

         We can give no assurance that additional liabilities discovered in the
future, under existing or future environmental, health and safety laws and
outside the scope of the Praxair agreement will not be material. In addition, we
can give no assurance that we will not have to incur material expenses before
Praxair pays amounts for which Praxair ultimately would be responsible.

         We anticipate that we will incur additional capital and operating costs
in the future to comply with currently existing laws and regulations, amendments
to such laws and regulations, new regulatory requirements arising from recently
enacted statutes, and possibly new statutory enactments. As government
regulatory agencies have not yet promulgated the final standards for proposed
environmental, health and safety programs, we cannot at this time reasonably
estimate the cost for compliance with these additional requirements, some of
which will not take effect for several years, or the timing of any such costs.
However, we believe any such costs will not have a material adverse effect on
our business and financial condition or results of operations.

INFORMATION TECHNOLOGY AND THE YEAR 2000

         Some computer software and hardware applications and embedded
microprocessor, microcontroller or other processing technology applications and
systems have historically used only two digits to refer to a year rather than
four digits. As a result, these applications could fail or create erroneous
results in dealing with particular dates and especially if the applications
recognize "00" as the year 1900 rather than the year 2000. During 1997, we
developed a Year 2000 plan to upgrade our key information systems and
simultaneously address the potential disruption to both operating and accounting
systems that might be caused by the Year 2000 problem. The Year 2000 plan also
provided for the evaluations of the systems of customers, vendors, and other
third-party service providers and evaluations of our non-information technology
systems.

         We have implemented new Year 2000 compliant terminal operations
software at our facilities and have implemented a fully integrated Year 2000
compliant finance, accounting, and human resources system. In addition to being
Year 2000 compliant, it is anticipated that this system and the terminal
operations software will significantly enhance systems functionality.

         We previously identified some components of our control systems at our
two terminals as not being Year 2000 compliant. We have installed and tested
replacements of non-compliant components. These systems measure, regulate,
control, and maintain crude oil and petroleum product flow and fire protection
equipment at the terminals.

         Through December 31, 1999, we spent $2.1 million in connection with our
Year 2000 remediation efforts and related enhancements of systems functionality.
Of this total, we have capitalized $1.9 million and expensed $0.2 million. In
2000, we anticipate spending an additional $0.25 million to complete
enhancements to systems functionality which is unrelated to the Year 2000
problem. We anticipate capitalizing substantially all of this $0.25 million.
Such amounts are included in our revised 2000 capital expenditure forecast.
However, we cannot guarantee that these estimates will be met, and actual
expenditures could differ materially from these estimates.




                                       37
<PAGE>   40


         We suffered no adverse effects from the Year 2000 problem either as a
result of our own systems or those of any third party. However, due to the
pervasive nature of the Year 2000 problem, we can give no assurance that third
parties did not experience problems not currently known to us which could impact
our business, financial condition or results of operations in the future.

POLITICAL, INFLATION, CURRENCY AND INTEREST RATE RISKS

         We periodically evaluate the political stability and economic
environment in the countries in which we operate. As a result of these
evaluations, we are not presently aware of any matters that may adversely impact
our business, results of operations or financial condition. The general rate of
inflation in the countries where we operate has been relatively low in recent
years causing a modest impact on operating costs. Typically, inflationary cost
increases result in adjustments to storage and throughput charges because
long-term contracts generally contain price escalation provisions. Product sales
prices are based on active markets, and we are generally able to pass any cost
increases to customers. Except for minor local operating expenses in Canadian
dollars and Netherlands Antilles guilders, all of our transactions are in U.S.
dollars. Therefore, we believe we are not significantly exposed to exchange rate
fluctuations.

         As all of our present debt obligations carry a fixed rate of interest,
except for the revolving credit facility which varies with changes in the
lender's prime lending rate, we believe our exposure to interest rate
fluctuations is minimal.

TAX MATTERS

         Our St. Eustatius facility has qualified for designation as a free
trade zone and our Point Tupper facility has qualified for designation as a
customs bonded warehouse. Such status allows customers and us to transship
commodities to other destinations with minimal Netherlands Antilles or Canadian
tax effects.

         Pursuant to a Free Zone and Profit Tax Agreement with the island
government of St. Eustatius which is scheduled to expire on December 31, 2000,
we are subject to a minimum annual tax of 500,000 Netherlands Antilles guilders
or approximately $282,000. This agreement further provides that any amounts paid
to meet the minimum annual payment will be available to offset future tax
liabilities under such agreement to the extent that the minimum annual payment
is greater than 2% of taxable income. Discussions regarding modification and
extension of this agreement are in progress, and we believe that, although some
terms and conditions could be modified and that the amounts payable to these
governments may increase or decrease, extension of this agreement is likely.
However, it is possible that such amounts may change more than anticipated.

         Tax rates in the jurisdictions in which we operate did not change
significantly between 1997 and 1999, other than the enactment of a Nova Scotia
provincial capital tax effective April 1, 1997.

         The net operating tax loss carryforwards available to offset Canadian
taxable income at December 31, 1999 were $50.9 million and expire in various
amounts through 2005. The investment tax credit carryforward available to reduce
Canadian income taxes was $7.2 million at December 31, 1999 and expires in
various amounts through 2003. We have provided a full valuation allowance
against these deferred tax assets because it is not certain that any deferred
tax assets will be utilized in the future.




                                       38
<PAGE>   41


INSURANCE

         We maintain insurance policies on insurable risks at levels we consider
appropriate. At the present time, we do not carry business interruption
insurance due to, what we believe, are excessive premium costs for the coverage
provided. However, we do carry business interruption insurance for our offshore
single point mooring system. While we believe we are adequately insured, future
losses could exceed insurance policy limits, or under adverse interpretations,
be excluded from coverage. Future liability or costs, if any, incurred under
such circumstances could adversely impact cash flow.

         Our property insurance covers damage to the real and personal property
located at our two terminals and administrative offices. The property loss limit
is $150 million with a $0.1 million deductible, except for a $0.5 million
deductible for certain losses (wind, flood, earthquake, etc.) at St. Eustatius.
We carry various layers of liability coverage of up to $200 million with a
deductible of approximately $0.3 million (including coverage for liabilities
associated with certain accidental spills). We carry $30 million of coverage on
the offshore single point mooring system at St. Eustatius with a deductible of
approximately $0.3 million. We have coverage up to scheduled values for damage
to our marine vessels with a $50,000 deductible. We also carry other insurance
customary in the industry.

         Our current insurance program commenced December 31, 1998 and generally
extends 15 months. We are currently in negotiations to extend our insurance
agreements upon their expiration and are exploring alternatives that may lead to
changes in the scope of coverage and premium costs.

ACCOUNTING STANDARDS AND POLICIES

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 133--"Accounting for Derivative
Instruments and Hedging Activities" which establishes standards of accounting
for derivative instruments including specific hedge accounting criteria. SFAS
No. 133, as amended by SFAS No. 137, is effective for fiscal years beginning
after June 15, 2000 although earlier adoption is allowed. We have not yet
quantified the impacts of adopting SFAS No. 133 and have not determined when we
will adopt SFAS No. 133. However, as we do not presently have derivative
instruments, we do not expect SFAS No. 133 to have a material impact on us.

         In December 1999, the U.S. Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin 101, "Revenue Recognition" ("SAB 101"), which
provides guidance on the recognition, presentation, and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosure
related to revenue recognition policies. We believe our revenue recognition
practices are in conformity with the guidelines prescribed in SAB 101.



                                       39
<PAGE>   42


       ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We periodically purchase refined petroleum products from our customers
and others for resale as bunker fuel, for small volume sales to commercial
interests, and to maintain an inventory of blend stocks for our customers.
Petroleum product inventories are held for short periods, generally not
exceeding 90 days. We do not presently have any derivative positions to hedge
our inventory of petroleum products. The following table indicates the aggregate
carrying value of our petroleum products on hand at December 31, 1999, computed
at average costs, net of any lower of cost or market valuation provisions, and
the estimated fair value of such products.

                       ON BALANCE SHEET COMMODITY POSITION
                             (Dollars in thousands)

                                        AS OF DECEMBER 31, 1999
                                   ---------------------------------
                                   CARRYING AMOUNT        FAIR VALUE
                                   ---------------        ----------

Petroleum Inventory:
  Statia Terminals N.V.                $   3,158           $  3,531
  Statia Terminals Canada                     81                170
                                       ---------           --------

Total                                  $   3,239           $  3,701
                                       =========           ========


               ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The financial statements and supplementary data are included herein
beginning on Page F-1.

            ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                      ACCOUNTING AND FINANCIAL DISCLOSURE

         None.




                                       40
<PAGE>   43


                                    PART III.

           ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Our board of directors is divided into three classes. The directors
serve six year terms which are staggered such that approximately one-third of
the directors are elected every two years. Our board of directors duly elects
the executive officers to serve until their respective successors are elected
and qualified.

         The following table sets forth certain information with respect to the
directors and executive officers of Statia Terminals Group as of March 10, 2000:

                                                                        TERM
          NAME                      AGE    POSITION                    EXPIRES
          ----                      ---    --------                    -------

James G. Cameron(1)                  53    Director                     2005
John K. Castle(1)(2)                 59    Director                     2005
Admiral James L. Holloway, III(3)    78    Director                     2003
Francis Jungers(2)                   73    Director                     2003
David B. Pittaway(1)(2)(3)           48    Director                     2005
Jonathan R. Spicehandler, M.D.(3)    51    Director                     2001
Ernest "Jackie" Voges                68    Director                     2001
Justin B. Wender(3)                  30    Director                     2003
Thomas M. Thompson, Jr.              55    Vice President
Robert R. Russo                      44    Vice President
James F. Brenner                     41    Vice President and Treasurer
Jack R. Pine                         60    Secretary


--------------
(1)      Member of Executive Committee.
(2)      Member of Compensation Committee.
(3)      Member of Audit Committee.

         Pursuant to a shareholders agreement among all of the shareholders of
Statia Terminals Holdings, the board of directors of Statia Terminals Holdings
determines how the Class B subordinated shares and any Class A common shares
held by Statia Terminals Holdings are voted, including voting for directors of
Statia Terminals Group. Under the agreement, these shares must be voted in favor
of one nominee of our executive officers, who must be one of our employees.
Castle Harlan Partners II L.P. and its affiliates control Statia Terminals
Holdings.

         The directors of Statia Terminals, Inc., an indirect subsidiary of
Statia Terminals Group, are currently elected annually by its shareholder to
serve during the ensuing year or until their successors are duly elected and
qualified. The board of directors of Statia Terminals, Inc. duly elects the
executive officers to serve until their respective successors are elected and
qualified.



                                       41
<PAGE>   44


         The following table sets forth certain information with respect to
certain directors and executive officers of Statia Terminals, Inc. as of March
10, 2000:

      NAME                AGE                POSITION
      ----                ---                --------

James G. Cameron           53  Director, Chairman of the Board and President
Thomas M. Thompson, Jr.    55  Director and Executive Vice President
Robert R. Russo            44  Director and Senior Vice President
Jack R. Pine               60  Senior Vice President, General Counsel and
                               Secretary
John D. Franklin           43  Vice President--Marine Fuel Marketing
James F. Brenner           41  Vice President--Finance, Treasurer and Assistant
                               Secretary

         JAMES F. BRENNER. Mr. Brenner has been Vice President and Treasurer of
Statia Terminals Group since December 23, 1996, and serves as our principal
financial and accounting officer. Mr. Brenner joined us in 1992, as our
Controller, and was appointed to his present position in May 1996. Immediately
prior to joining us, he served three years as Vice President, Finance and Chief
Financial Officer of Margo Nursery Farms Inc., a publicly traded agribusiness
firm with European and Latin American operations. From 1986 to 1990, Mr. Brenner
was Treasurer of Latin American Agribusiness Development Corp., a company
providing debt and equity financing to agribusinesses throughout Latin America.
From 1981 to 1986, Mr. Brenner held various positions with the international
accounting firm of PricewaterhouseCoopers (formerly Price Waterhouse LLP).

         JAMES G. CAMERON. Mr. Cameron has been a director of Statia Terminals
Group since February 6, 1997. Mr. Cameron has been with us since 1981. From 1981
to 1984, Mr. Cameron served as the Project Manager spearheading the design and
construction of the St. Eustatius terminal facility. Mr. Cameron was promoted in
1984 to Executive Vice President of Statia Terminals, Inc. Since being named
President and Chairman of the Board of Statia Terminals, Inc. in 1993, Mr.
Cameron has served on the board of directors of Tankstore (a joint venture
company of CBI Industries, GATX Corporation and Paktank International B.V.). Mr.
Cameron has also served on the board of directors of Petroterminal de Panama,
where he represented CBI Industries' ownership in the pipeline traversing the
isthmus of Panama. His prior experience in the petroleum industry dates back to
1969 when he joined Cities Service Company as a marine engineer. Mr. Cameron
subsequently joined Pakhoed USA, Inc., where he served in a variety of positions
including Project Engineer, Manager of Engineering & Construction, Maintenance
Manager and Terminal Manager, which included the management of Paktank's largest
facility in Deer Park, Texas.

         JOHN K. CASTLE. Mr. Castle has been a director of Statia Terminals
Group since February 6, 1997. Mr. Castle is Chairman and Chief Executive Officer
of Branford Castle, Inc., an investment company formed in 1986. Since 1987, Mr.
Castle has been Chairman of Castle Harlan, Inc., a private merchant bank in New
York City. Mr. Castle is Chief Executive Officer of Castle Harlan Partners II,
G.P. Inc., the general partner of the general partner of Castle Harlan Partners
II L.P., which is our controlling stockholder. Immediately prior to forming
Branford Castle, Inc. in 1986, Mr. Castle was President and Chief Executive
Officer and a director of Donaldson Lufkin & Jenrette, Inc., which he joined in
1965. Mr. Castle is a director of Sealed Air Corporation, Morton's Restaurant
Group, Inc., Commemorative Brands, Inc. and Universal Compression, Inc. He is a
member of The New York Presbyterian Hospital's Board of Trustees, a member of
the board of the Whitehead Institute for Biomedical Research and is a member of
the Corporation of the Massachusetts Institute of Technology. Mr. Castle has
also served as a director of The Equitable Life Assurance Society of the United
States.



                                       42
<PAGE>   45


         JOHN D. FRANKLIN. Mr. Franklin joined us in March 1992 as Manager,
Marine Sales and became the Vice President-Marine Fuel Sales in 1996 and Vice
President-Marine Fuel Marketing in March, 2000. He also serves as a director of
Petroterminal de Panama. Immediately prior to joining us, he was employed for 14
years with The Coastal Corporation, and its former subsidiary, Belcher Oil Co.
Inc. His duties with Coastal included management of the company's marine sales
division; Manager, National Accounts, and Terminal Manager at Coastal's New
Orleans facility. He has extensive experience in marketing, terminal operations,
and technical sales support.

         ADMIRAL JAMES L. HOLLOWAY III, U.S.N. (RET.). Adm. Holloway has been a
director of Statia Terminals Group since April 29, 1997. Adm. Holloway is a
retired Naval Officer who served as Chief of Naval Operations and a member of
the Joint Chiefs of Staff from 1974 to 1978. After his retirement, from 1981 to
1989 he was President of the Council of American Flag Ship Operators, a national
trade association representing the owners and operators of U.S. flag vessels in
foreign trade. From 1985 to 1989 he was a member of the President's Blue Ribbon
Commission on Merchant Marine and Defense, and the Commission for a Long-Term
Integrated Defense Strategy. In 1986, Adm. Holloway was appointed Special Envoy
of the Vice President to the Middle East and from 1990 to 1992 he served in a
presidential appointment as U.S. Representative to the South Pacific Commission.
Adm. Holloway is currently Chairman of the Naval Historical Foundation, Chairman
of the Naval Academy Foundation, and chairman emeritus of the Board of Trustees
of Saint James School.

         FRANCIS JUNGERS. Mr. Jungers has been a director of Statia Terminals
Group since April 29, 1997. Mr. Jungers is a private investor and business
consultant in Portland, Oregon. Mr. Jungers has been a consultant since January
1, 1978. From 1973 to 1978, he was Chairman and Chief Executive Officer of
Arabian American Oil Company which is the largest producer of crude and
liquefied gas in the world and holds the concession for all of Saudi Arabia's
oil production. Mr. Jungers is a director of Thermo Electron Corporation,
Donaldson, Lufkin & Jenrette, Inc., The AES Corporation and ESCO Corporation.
Mr. Jungers is Chairman of the Advisory Board of Common Sense Partners, L.P., a
hedge fund. Mr. Jungers is a member of the Visiting Committee, The University of
Washington. Mr. Jungers is Advisory Trustee of the Board of Trustees, The
American University in Cairo and Trustee of the Oregon Health Sciences
University Foundation.

         JACK R. PINE. Mr. Pine has been Statia Terminals Group's Secretary
since December 23, 1996. Mr. Pine has been involved with our legal affairs since
1978 and was formally transferred to Statia Terminals, Inc. from CBI Industries
in May 1996 as Senior Vice President, General Counsel and Secretary. Mr. Pine
also serves as a director of Petroterminal de Panama. He has over 30 years of
combined experience with Liquid Carbonic Industries Corporation, CBI Industries,
and us. Mr. Pine joined the legal staff of CBI Industries in 1974 as Assistant
Counsel and was appointed Associate General Counsel in 1984. Prior to joining
CBI Industries, Mr. Pine practiced law in the private sector.

         DAVID B. PITTAWAY. Mr. Pittaway has been a director of Statia Terminals
Group since September 3, 1996. Mr. Pittaway is Senior Managing Director and has
been Vice President and Secretary of Castle Harlan, Inc. a private merchant bank
in New York City, since February 1987. Mr. Pittaway is an executive officer of
Castle Harlan Partners II, G.P. Inc., the general partner of the general partner
of Castle Harlan Partners II L.P., our controlling stockholder. Mr. Pittaway has
been Vice President and Secretary of Branford Castle, Inc., an investment
company, since October 1986. From 1987 to 1998 he was Vice President and Chief
Financial Officer and a director of Branford Chain, Inc., a marine wholesale
company where he is now a director and Vice Chairman. Mr. Pittaway is also a



                                       43
<PAGE>   46


director of Morton's Restaurant Group, Inc., Charlie Brown's Holdings, Inc.,
Equipment Support Services, Inc., and Commemorative Brands, Inc. Prior to 1987,
Mr. Pittaway was Vice President of Strategic Planning and Assistant to the
President of Donaldson Lufkin & Jenrette, Inc.

         ROBERT R. RUSSO. Mr. Russo has been a Vice President of Statia
Terminals Group since December 23, 1996. Mr. Russo joined us in 1990 as Manager,
Sales, and was promoted to his present position in May 1996. His prior
experience in the petroleum industry dates back to 1979 when he joined Belcher
Oil Co. Inc., a subsidiary of The Coastal Corporation. Mr. Russo was Coastal's
Vice President, Heavy Products Trading, from 1987 until his departure to join us
in 1990.

         JONATHAN R. SPICEHANDLER, M.D. Dr. Spicehandler has been a director of
Statia Terminals Group since April 29, 1997. Since 1993, Dr. Spicehandler has
been President of Schering-Plough Research Institute, the pharmaceutical
research arm of Schering-Plough Corporation, a research based company engaged in
the discovery, development, manufacturing and marketing of pharmaceutical and
health care products worldwide. Dr. Spicehandler is a diplomat of the American
Board of Internal Medicine. He was also elected to the Alpha Omega Alpha Honor
Society. He serves as president emeritus, board of managers, of the New Jersey
division of Cancer Care, Inc. Dr. Spicehandler is a member of the boards of
trustees of the Kessler Institute for Rehabilitation, Inc., Montclair State
University, and the Liberty Science Center. He also serves on the board of
directors of the National Foundation of Infectious Diseases. Dr. Spicehandler is
a member of the board of associates of the Whitehead Institute for Biomedical
Research.

         THOMAS M. THOMPSON, JR. Mr. Thompson has been a Vice President of
Statia Terminals Group since December 23, 1996. Mr. Thompson has been with us
since 1985 when he joined as Vice President, Sales & Marketing. He has also held
the position of Senior Vice President, with full responsibility for our Houston,
Texas, sales and operations and President of JASTATIA, Inc., a marine vessel
operating joint venture between Jahre Ship Services A/S and us. Mr. Thompson
became Executive Vice President in May 1996. His prior experience in the
petroleum and chemical industry dates back to 1968 when he joined GATX
Corporation as a sales representative. He subsequently worked as both a sales
manager and General Manager with Pakhoed USA, Inc.

         ERNEST "JACKIE" VOGES. Mr. Voges has been a director of Statia
Terminals Group since February 2, 1998. From 1982 to 1996, Mr. Voges was General
Managing Director of the Curacao Ports Authority. From 1977 to 1982, Mr. Voges
held various positions including Dean of the Law School of the University of the
Netherlands Antilles, permanent lecturer for the history of law and a member of
the International Advisory Council of Florida International University. From
1973 to 1977, he served in various positions within the government for Land
Territory of the Netherlands Antilles including Vice Prime Minister, Minister of
Justice and Minister of Transport and Communications. From 1967 to 1969 Mr.
Voges served as Minister of Public Health. From 1959 to 1967, he was a member of
the Island Council of the Island Territory of Curacao and from 1966 to 1967 he
was Commissioner of the Island Territory of Curacao. Mr. Voges is Managing
Director of Leeward News Holding N.V., Chairman of the Foundation Stichting
Monumentenzorg Curacao and Supervisory Director of Stadsherstel Corporation N.V.
He is also Chairman of the Foundation Stichting JEKA, Supervisory Director of
Smit International Corporation N.V., and Managing Director of Voges Inc.
Corporation N.V. In 1979, Mr. Voges was Knighted in the Order of the Dutch Lion.

         JUSTIN B. WENDER. Mr. Wender has been a director of Statia Terminals
Group since September 3, 1996. Since 1993, he has been employed by Castle
Harlan, Inc. He currently serves as Managing Director. From 1991 to 1993, Mr.
Wender worked in the Investment Banking Group of Merrill Lynch & Co. He is a
board member of Charlie Brown's Holdings, Inc.



                                       44
<PAGE>   47


                       OWNERSHIP AND TRANSACTIONS REPORTS

         Section 16 (a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the directors, officers, and persons who own more than
10% of any registered class of the Company's securities (the "10% Stockholders")
to file reports of ownership on a Form 3 and reports of changes in ownership on
a Form 4 with the U.S. Securities and Exchange Commission (the "SEC") and The
Nasdaq Stock Market. These persons are also required under the Exchange Act to
file an annual statement of beneficial ownership (Form 5). The directors,
officers, and 10% Stockholders are also required by SEC regulation to furnish
the Company with copies of all such forms that they file.

         Based solely on a review of the copies of such forms furnished to the
Company and written representations from the directors, officers and 10%
Stockholders, each of Messrs. Pittaway, Wender, Holloway, Spicehandler, Voges,
Jungers, Thompson, Russo, Pine, Franklin, and Brenner inadvertently filed their
respective Form 3 with the SEC nine days late. Messrs. Castle and Cameron
inadvertently filed their respective Form 3 with the SEC 16 days and 14 days
late, respectively, and Mr. Jungers inadvertently filed a Form 4 with the SEC
reporting certain April 1999 transactions nine days late.

         The Company is not aware of any other late report filed with the SEC or
any transaction that was not reported on a timely basis that was required to be
so reported. The Company believes that its directors, officers and 10%
Stockholders complied with all other applicable Section 16(a) filing
requirements.



                                       45
<PAGE>   48


                         ITEM 11. EXECUTIVE COMPENSATION

         The following table sets forth information concerning the compensation
paid or accrued for the three years ended December 31, 1999 for our chief
executive officer and each of our five other most highly compensated executive
officers (the "named executive officers").
<TABLE>
<CAPTION>

                                                                                   Long-Term
                                                                                 Compensation
                                                                                    Awards
                                                                                --------------
                                                                                    Shares
                                            Annual                                Underlying
         Name and                        Compensation         Other Annual       Options/SARs         All Other
  Principal Position (1)      Year   Salary($)  Bonus($)    Compensation($)(2)   (#Shares)(3)     Compensation($)(4)
  ----------------------      ----   ---------  --------    ------------------   ------------     ------------------
<S>                           <C>     <C>       <C>             <C>                 <C>               <C>
James G. Cameron              1999    $292,596  $187,514        $ 576,959              --             $ 69,476
                              1998    275,482    211,875               --             615               69,525
                              1997    248,655     97,050               --             630               68,077

Thomas M. Thompson, Jr.       1999    253,269    158,417          449,857              --               16,696
                              1998    241,549    173,750               --             490               16,677
                              1997    208,434     79,000               --             500               15,449

Robert R. Russo               1999    228,846    148,718          395,589              --               14,897
                              1998    199,232    145,000               --             425               13,816
                              1997    178,883     68,400               --             430               12,680

Jack R. Pine                  1999    163,010     77,592          196,604              --               12,098
                              1998    161,929     97,500               --             185               11,410
                              1997    129,450     51,550               --             190               10,648

John D. Franklin              1999    149,616     77,592          173,278              --               11,162
                              1998    139,616     97,500               --             185               10,784
                              1997    128,653     49,250               --             190               10,059

James F. Brenner              1999    154,731     77,592          154,713              --               11,462
                              1998    130,289     91,250           57,587             175               10,941
                              1997    108,895     43,400               --             165                9,033
</TABLE>

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

(1)  James G. Cameron became President and Chairman of the Board of Statia
     Terminals, Inc. on July 27, 1993. Mr. Cameron has held various positions
     with the Statia Terminals group of companies since 1981. Thomas M.
     Thompson, Jr. joined us in 1985 and became Executive Vice President and
     Director of Statia Terminals, Inc. on May 6, 1996. Robert R. Russo joined
     us in 1990 and became Senior Vice President of Statia Terminals, Inc. on
     May 6, 1996. Jack R. Pine became Senior Vice President, General Counsel and
     Secretary of Statia Terminals, Inc. on May 6, 1996. Mr. Pine joined us in
     1996 after holding various positions with CBI since 1974. John D. Franklin
     joined us in 1992 and became Vice President - Marine Fuel Sales of Statia
     Terminals, Inc. on May 6, 1996 and Vice President-Marine Fuel Marketing on
     March 10, 2000. James F. Brenner joined us in 1992 and became Vice
     President Finance, Treasurer and Assistant Secretary of Statia Terminals,
     Inc. on May 6, 1996.

(2)  The compensation reported for 1999 represents a bonus of $1,947,000 paid to
     the named executive officers. The purpose of this special management bonus
     was to partially reimburse these individuals with respect to adverse tax
     consequences that resulted from our initial public offering of equity and
     other past compensation arrangements. The compensation reported for 1998
     represents $35,923 of relocation expenses and $21,664 of related tax
     reimbursements paid to Mr. Brenner.

(3)  Represents options to purchase Statia Terminals Group common stock awarded
     under the 1997 Stock Option Plan. The fair values at the dates of grant,
     November 21, 1997 and December 3, 1998, were determined by the compensation
     committee of Statia Terminals Group's board of directors to be $0.10 per
     share for each of the 1997 and 1998 grants. The award agreement specified




                                       46
<PAGE>   49


     that after two years of employment after the date of grant and after each
     of the following three years, 25% of the option would become exercisable
     unless a liquidation event occurred (as defined in the award agreement). If
     a liquidation event occurred, the option would become fully exercisable.
     The option would terminate upon the employee's termination of employment
     except in the event of death, permanent disability or termination by us
     other than for substantial cause. Each option would expire ten years after
     the date of grant.

     Our initial public offering of equity, which was completed on April 28,
     1999, qualified as a liquidation event under the award agreement. Each
     outstanding option on April 28, 1999 was exercised and converted to
     approximately 80.6469 of our Class B subordinated shares and approximately
     0.806469 of our Class C incentive rights. The holders then transferred all
     of the Class B subordinated shares and Class C incentive rights to Statia
     Terminals Holdings in exchange for common shares of Statia Terminals
     Holdings. Statia Terminals Holdings now owns all of our outstanding Class B
     subordinated shares and Class C incentive rights. These transactions are
     further discussed in our Registration Statement on Form S-1 (File No.
     333-72317) related to our initial public offering of equity.

(4)  The compensation reported for 1999 represents: (a) the dollar value of
     split dollar life insurance benefits paid by us, (b) matching and
     discretionary contributions made to our 401(k) plan, and (c) the cost of
     life insurance in excess of limits prescribed by the Internal Revenue Code.
     These benefits, expressed in the same order as listed in the preceding
     sentence, amounted to $50,789, $16,600 and $2,087 for Mr. Cameron; $0,
     $14,800 and $1,896 for Mr. Thompson; $0, $14,200 and $697 for Mr. Russo;
     $0, $11,000 and $1,098 for Mr. Pine; $0, $11,000 and $162 for Mr. Franklin;
     and $0, $11,000 and $462 for Mr. Brenner.

     We are committed to pay the premiums of a split dollar life insurance
     policy for Mr. Cameron until the earlier of Mr. Cameron reaching age 65 or
     the termination of Mr. Cameron's employment at which time either Mr.
     Cameron or his designated beneficiaries will receive the cash surrender
     value of the policy. Assuming premium payments are made until age 65, the
     full cost to us of remaining payments as of December 31, 1999 is $609,468.

                OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 1999

         We did not grant any stock options during 1999, nor have we granted
stock appreciation rights.

         AGGREGATED OPTION EXERCISES IN THE YEAR ENDED DECEMBER 31, 1999
                           AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>

                                                         Number of Shares Underlying          Value of Unexercised
                              Shares                        Unexercised Options at           In-the-Money Options at
                             Acquired                         December 31, 1999                 December 31, 1999
                                On          Value       -----------------------------     ----------------------------
           Name            Exercise(1)    Realized(1)   Exercisable     Unexercisable     Exercisable    Unexercisable
           ----            -----------    -----------   -----------     -------------     -----------    -------------
<S>                           <C>          <C>               <C>             <C>                <C>            <C>
James G. Cameron              1,245        $1,104,315        0               0                  0              0
Thomas M. Thompson, Jr.         990           878,130        0               0                  0              0
Robert R. Russo                 855           758,385        0               0                  0              0
Jack R. Pine                    375           332,625        0               0                  0              0
John D. Franklin                375           332,625        0               0                  0              0
James F. Brenner                340           301,580        0               0                  0              0

</TABLE>


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

(1)    Represents options to purchase Statia Terminals Group common stock
       awarded under the 1997 Stock Option Plan. Our initial public offering of
       equity, which was completed on April 28, 1999, qualified as a liquidation
       event under the option award agreement. Each outstanding option on April
       28, 1999 was exercised and converted to approximately 80.6469 of our
       Class B subordinated shares and approximately 0.806469 of our Class C
       incentive rights. Each option also received an incremental distribution
       of the ownership interest in Petroterminal de Panama ("PTP") upon
       exercise of the option. The holders then transferred all of the Class B
       subordinated shares and Class C incentive rights to Statia Terminals
       Holdings in exchange for common shares of Statia Terminals Holdings. The
       holders also transferred all of the ownership interest in PTP to Statia




                                       47
<PAGE>   50


       Terminals Cayman in exchange for ownership interest in Statia Terminals
       Cayman. Statia Terminals Holdings now owns all of our outstanding Class B
       subordinated shares and Class C incentive rights, and Statia Terminals
       Cayman owns all of the ownership interest in PTP. These transactions are
       further discussed in our Registration Statement on Form S-1 (File No.
       333-72317) related to our initial public offering of equity.

       On April 28, 1999, there was no public trading market for our Class B
       subordinated shares, Class C incentive rights or the ownership interest
       in PTP. The value realized for each option was determined based on
       valuations performed as of April 28, 1999 at our request by an
       independent consulting firm which determined the underlying value of each
       option to be approximately $887.

                                SHARE OPTION PLAN

         In April 1999, we adopted our 1999 Share Option Plan. The option plan
is intended to further our success by increasing the proprietary interest of our
key employees, directors and consultants and to enhance our ability to attract
and retain employees, directors and consultants of outstanding ability. Under
the option plan, which is administered by the compensation committee of our
board of directors, we may deliver up to 1,140,000 Class A common shares,
subject to adjustment under certain conditions. To date, no options have been
granted under this plan. The entire text of this option plan has been
incorporated by reference as an exhibit to this Report.

                                STOCKHOLDER LOANS

         On November 27, 1996, Messrs. Cameron, Thompson, Russo, Pine, Franklin,
Brenner and certain other of our officers and managers were granted loans by
Statia Terminals Group to purchase shares of its common stock and Series E
Preferred Stock. The loans totaled $1.5 million and were secured by pledges of
such stock. The loans bore interest at 6.49% annually and were due on the
earlier of (1) November 26, 2003, (2) the sale of the pledged stock, or (3) a
"change in control," as defined in the loan agreement. In April 1999 and in
conjunction with our initial public offering of equity, these loans were
replaced with new loans aggregating $1.5 million and bearing interest at 5.17%.
The maturity of the new loans is the earlier of (1) April 28, 2009, or (2) the
sale of the pledged stock.

                            COMPENSATION OF DIRECTORS

         We pay four of our directors, Adm. James L. Holloway III, Francis
Jungers, Jonathan R. Spicehandler, M.D. and Ernest Voges, $1,000, plus
reimbursement of out-of-pocket expenses, per meeting attended of the board of
directors or any committee of the board of directors. Each of the foregoing
directors has entered into consulting agreements with Statia Terminals
International for advisory and consulting services related to investment and
strategic planning, financial and other matters. In consideration of services
provided to Statia Terminals International, each consultant receives a
consulting fee of $6,250 per quarter plus reimbursement of out-of-pocket
expenses.

                              EMPLOYMENT AGREEMENTS

         We have entered into employment agreements with James G. Cameron,
Thomas M. Thompson, Jr., Robert R. Russo, Jack R. Pine, John D. Franklin and
James F. Brenner. These agreements provide for an annual base salary which is
subject to review at least annually by the board of directors or a committee
thereof, increasing at least at the growth rate of the consumer price index. The
respective annual base salaries in effect for 2000 are $300,000 for Mr. Cameron;
$255,000 for Mr. Thompson; $240,000 for Mr. Russo; $157,000 for Mr. Pine;
$157,000 for Mr. Franklin; and $157,000 for Mr. Brenner. These agreements also
provide for an annual cash incentive bonus to be awarded based on the difference
between a target EBITDA and actual EBITDA. The employment agreements continue to


                                       48
<PAGE>   51


March 31, 2002 and automatically renew for an additional year on March 31 of
every year unless either party gives notice of non-renewal. Additional benefits
include participation in an executive life insurance plan for Mr. Cameron. In
the event that we terminate any of these employment agreements without
substantial cause or the employee terminates for good reason, as such terms are
defined in each such employment agreement, the employee shall be entitled to his
current medical and dental benefits and his current compensation. Such
entitlements will last to the later of twelve months or the remaining portion of
the term of the relevant employment agreement. Such entitlements will be payable
in monthly installments for such period with the addition of a pro rated portion
of the employee's bonus compensation for the year of termination. The bonus is
only payable as and when ordinarily determined for such year.

               COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS -
                        REPORT ON EXECUTIVE COMPENSATION

         Statia Terminals Group's executive officer compensation program is
administered and reviewed by the compensation committee of our board of
directors.

 OVERALL OBJECTIVES OF THE EXECUTIVE COMPENSATION PROGRAM

         Our compensation philosophy and program objectives are guided by two
primary objectives. First, the program is intended to provide competitive levels
of compensation, at expected levels of performance, in order to attract,
motivate and retain talented executives. Second, the program is intended to
create an alignment of interests between our executives and stockholders such
that a significant portion of each executive's compensation is directly linked
to maximizing shareholder value.

         In support of this philosophy, the executive compensation program is
designed to reward performance that is directly relevant to our short-term and
long-term success. As such, we attempt to provide both short-term and long-term
incentive pay that varies based on corporate and individual performance.

         To accomplish these objectives, the compensation committee has
structured the executive compensation program with three primary underlying
components: base salary, annual incentives, and long-term incentives. Certain
other executive benefits are also provided. Additionally, during 1999 we paid a
special management bonus of $1,947,000 to our named executive officers. The
purpose of this special management bonus was to partially reimburse these
individuals with respect to adverse tax consequences that resulted from our
initial public offering of equity and other past compensation arrangements. The
following sections describe our plans by element of compensation and discuss how
each component relates to our overall compensation philosophy.

         In reviewing this information, reference is often made to the use of
competitive market data as criteria for establishing targeted compensation
levels. Several market data sources are used by us, including gas and oil
industry norms for selected publicly traded peer companies, as reflected in
these companies' proxy statements. In addition, we use published survey data and
data obtained from independent consultants that are for general industry
companies similar to us in size. However, there is no effort to assess how our
executive pay levels compare to the levels of pay provided by the other
companies used in our total shareholders return graph since these companies vary
significantly in size and scope of operations.



                                       49
<PAGE>   52


BASE SALARY PROGRAM

         Our base salary philosophy is to provide base pay levels that are
competitive in the oil and gas industry and local geographic areas where we
operate. We periodically review our executive pay levels to assure consistency
with the external market. We believe it is crucial to provide strongly
competitive salaries over time in order to attract and retain executives who are
highly talented and capable of creating added shareholder value.

         Annual salary adjustments for our executive officers are based on
several factors including: changes in the U.S. Department of Labor Consumer
Price Index for All Urban Consumers, general levels of market salary increases,
individual performance, competitive base salary levels, and our overall
financial results. We review performance qualitatively considering total
shareholder returns, the level of earnings, return on equity, return on total
capital and individual performance. These criteria are assessed qualitatively
and are not weighted. All base salary increases are based on a philosophy of
pay-for-performance and perceptions of an individual's long-term value to us. As
a result, employees with higher levels of performance sustained over time will
be paid correspondingly higher salaries.

ANNUAL CASH INCENTIVE BONUS

         Each of our executive officers has an employment agreement that
specifies he be paid an annual cash incentive bonus based on our attaining
certain levels of earnings before interest expense, taxes, depreciation,
amortization and other specified non-cash items as compared to an annual goal
set by our board of directors and the president of Statia Terminals, Inc. Under
the plan, target award opportunities vary by individual position and are
typically expressed as a percent of base salary. In addition, the president of
Statia Terminals, Inc. and the compensation committee may award discretionary
bonuses for meeting specific objectives and outstanding performance. Our annual
cash incentive bonus program is intended to (1) reward key employees based on
company performance; (2) motivate key employees; and (3) provide competitive
cash compensation opportunities to plan participants.

LONG-TERM INCENTIVE PROGRAM

         Our long-term incentive program is designed to focus executive efforts
on our long-term goals and to maximize total return to shareholders. While our
long-term incentive program allows the compensation committee to use a variety
of long-term incentive devices, the compensation committee has relied primarily
on stock option awards to provide long-term incentive opportunities in recent
years.

         Stock options align the interests of employees and shareholders by
providing value to the executive through stock price appreciation only. All
stock options have a ten year term before expiration and the most recent grants
were fully exercisable within five years of the grant date.

         No stock options were granted during 1999, but it is anticipated that
stock option grants will be made periodically in the future at the discretion of
the compensation committee. The number of shares actually granted to a
particular participant is based on our financial success, our future business
plans, and the individual's position and level of responsibility. All of these
factors are assessed subjectively and are not weighted.

         The compensation committee believes stock options are an important part
of our total executive pay program, since employees only receive income from the
options if our share price rises.



                                       50
<PAGE>   53

1999 COMPENSATION FOR MR. CAMERON

         As previously described, the compensation committee considers several
factors in developing an executive's compensation package. For Mr. Cameron,
these factors include competitive market practices consistent with the
philosophy described for other executives, experience, achievement of strategic
goals, and our financial success considering the factors described under the
annual cash incentive bonus program above.

         Mr. Cameron's salary for 1999 was increased primarily as a result of
competitive market factors. Mr. Cameron's bonus for 1999 was $187,514, payable
in 2000. This award was below targeted levels since our aggregate performance on
the measures described in the annual cash incentive bonus program section of
this report was below our aggressive targets. Mr. Cameron also received a
special management bonus aggregating $576,959 to partially reimburse him with
respect to adverse tax consequences that resulted from our initial public
offering of equity and other past compensation arrangements. We granted no stock
options during 1999, and consequently, Mr. Cameron received no stock options
from us. As detailed in note 4 of our executive compensation table, Mr. Cameron
received $69,476 of other compensation in 1999.

                                                      Compensation Committee:
                                                           John K. Castle
                                                           Francis Jungers
                                                           David B. Pittaway


                                PERFORMANCE GRAPH

         The SEC requires that we present a line graph comparing cumulative
returns, from April 28, 1999 (the date our initial public offering of equity
closed) through December 31, 1999, on an indexed basis with the Nasdaq US &
Foreign Stock Index (or another broad-based index) and either a
nationally-recognized industry standard or a group of peer companies selected by
us. We have selected, for purposes of this performance comparison, four public
companies believed to offer services or products similar to those offered by us,
and the provision of which products or services represents a significant portion
of their respective businesses. A list of these companies follows the graph
below. The graph assumes that $100 was invested on April 28, 1999, in each of
our Class A common stock, the Nasdaq US & Foreign Stock Index and the
self-constructed peer group (weighted on the basis of capitalization), and that
all dividends were reinvested.
<TABLE>
<CAPTION>

                                                         4/28/99         6/30/99          9/30/99         12/31/99
                                                         -------         -------          -------         --------
<S>                                                      <C>              <C>             <C>              <C>
The Company                                              $100.00          $ 87.02         $ 70.30          $ 32.20
The Nasdaq US & Foreign Stock Index                       100.00           106.03          108.38           158.70
The Peer Group                                            100.00            97.84           99.66            74.30
</TABLE>

         Our self-constructed peer group consists of the following companies:
Kaneb Pipeline Partners L.P., TransMontaigne, Inc., El Paso Energy Partners
L.P., and Plains All American Pipeline. Cumulative total shareholder return for
each investment may be calculated from the values presented in the table above.


                                       51
<PAGE>   54

     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of February 29, 2000, the ownership
of the presently issued and outstanding Class A common shares, Class B
subordinated shares and Class C incentive rights by (1) each person known by us
to be a beneficial owner of more than 5% of any class of our voting securities,
(2) each of our directors and executive officers, and (3) all of our directors
and executive officers as a group. The address of each owner is our principal
office unless otherwise indicated.
<TABLE>
<CAPTION>

                                             COMMON SHARES              SUBORDINATED SHARES (1)           INCENTIVE RIGHTS(1)
                                     --------------------------      --------------------------      --------------------------
         NAME & ADDRESS OF                           PERCENT OF                       PERCENT OF                     PERCENT OF
      BENEFICIAL OWNER(2)(3)         # OF SHARES    OUTSTANDING      # OF SHARES     OUTSTANDING     # OF SHARES     OUTSTANDING
      ----------------------         -----------    -----------      -----------     -----------     -----------     -----------
<S>                                  <C>             <C>              <C>                   <C>          <C>               <C>
James G. Cameron ..............             --           --           195,488               5.1          1,954.88          5.1
Thomas M. Thompson, Jr ........            110            *           152,424               4.0          1,542.24          4.0
Robert R. Russo ...............             --           --           134,035               3.5          1,340.35          3.5
Jack R. Pine ..................             --           --            66,615               1.8            666.15          1.8
John D. Franklin ..............             --           --            58,711               1.5            587.11          1.5
James F. Brenner ..............             --           --            52,420               1.4            524.20          1.4
John K. Castle(4)
  c/o Castle Harlan, Inc.
  150 East 58th Street
  New York, NY 10155 ..........             --           --         3,800,000             100.0            38,000        100.0
David B. Pittaway .............             --           --            16,129                 *            161.29            *
Justin B. Wender ..............             --           --               806                 *              8.06            *
James L. Holloway III .........             --           --            12,097                 *            120.97            *
Francis Jungers ...............         21,050            *            16,129                 *            161.29            *
Jonathan R. Spicehandler ......             --           --            16,129                 *            161.29            *
Ernest Voges ..................             --           --             8,065                 *             80.65            *
All directors and executive
  officers as a group (13 in
  number) .....................         21,160            *         3,800,000             100.0            38,000        100.0
Castle Harlan Partners II L.P.,
  affiliates and Castle Harlan
  employees(4)
  c/o Castle Harlan, Inc.
  150 East 58th Street
  New York, NY 10155 ..........             --           --         3,800,000             100.0            38,000        100.0
Statia Terminals Holdings N.V .             --           --         3,800,000             100.0            38,000        100.0
</TABLE>

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

*    Beneficially owns less than one percent of such class of stock.

(1)  Share amounts for directors and named executive officers and all directors
     and officers as a group are beneficially held as shareholders of Statia
     Terminals Holdings N.V., which holds 3,800,000 Subordinated Shares and
     38,000 Incentive Rights.

(2)  Share amounts for directors and named executive officers and all directors
     and officers as a group include shares held by immediate family members.

(3)  The following is a list of directors and officers of Statia Terminals Group
     N.V. ("STGNV") and Statia Terminals, Inc. ("STI"). Mr. Cameron is a
     director of STGNV and a director and Chairman of the Board and President of
     STI. Messrs. Castle, Holloway, Jungers, Pittaway, Spicehandler, Voges, and
     Wender are each directors of STGNV. Mr. Thompson is the Vice President of
     STGNV and a director and Executive Vice President of STI. Mr. Russo is the
     Vice President of STGNV and a director and Senior Vice President of STI.
     Mr. Brenner is the Vice President and Treasurer of STGNV and the Vice
     President--Finance, Treasurer and Assistant Secretary of STI. Mr. Pine is
     the Secretary of STGNV and Senior Vice President, General Counsel and
     Secretary of STI. Mr. Franklin is the Vice President--Marine Fuel Marketing
     of STI.

(4)  A majority of the voting securities of Statia Terminals Holdings N.V. is
     owned by Castle Harlan Partners II L.P. and certain of its affiliates. Mr.
     Castle is the controlling stockholder of the general partner of the general
     partner of Castle Harlan Partners II L.P. He may, therefore, be deemed to
     be the beneficial owner of shares beneficially owned by Castle Harlan
     Partners II L.P. or its affiliates and Castle Harlan employees. Mr. Castle
     disclaims beneficial ownership of the shares owned by Castle Harlan
     Partners II L.P., its affiliates and Castle Harlan employees other than
     such shares that represent his pro rata partnership interests in Castle
     Harlan Partners II L.P. and its affiliates.




                                       52
<PAGE>   55



             ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                              MANAGEMENT AGREEMENT

         As part of the acquisition by Castle Harlan Partners II L.P., Statia
Terminals Group entered into a management agreement with Castle Harlan, Inc.
providing for the payment to Castle Harlan, Inc., subject to certain conditions,
of an annual management fee of $1.35 million, plus expenses, for advisory and
strategic planning services in relation to the day-to-day affairs of Statia
Terminals Group. Such services were performed at the discretion of Castle
Harlan, Inc. The management agreement also entitled Castle Harlan, Inc. to
additional compensation should it perform services for Statia Terminals Group
related to certain financing activities, including initial public offerings.
Statia Terminals Group compensated Castle Harlan, Inc. $0.78 million for
services performed in relation to our initial public offering of equity. In the
event the net proceeds from any sale of the M/V STATIA RESPONDER exceeded a
specified threshold, Castle Harlan, Inc. would have been entitled to an
additional payment of up to $1 million. Under the indenture relating to the
mortgage notes, dividends from Statia Terminals International to Statia
Terminals Group permitting Statia Terminals Group to pay Castle Harlan's annual
management fee and expenses are excepted from the limitation on restricted
payments so long as no default or event of default exists. During the years
ended December 31, 1997 and 1998, Statia Terminals International paid dividends
to Statia Terminals Group of $2.7 million and $1.5 million, respectively,
related to this agreement. This management agreement was amended and restated at
the closing of our initial public offering of equity on April 28, 1999, to
eliminate the $1.35 million management fee and require that any such services be
provided only at the request of Statia Terminals Group. Statia Terminals Group
has not requested any such services subsequent to April 28, 1999, nor has Castle
Harlan, Inc. provided any such services. Accordingly, no management fee expense
has been recorded subsequent to April 28, 1999. The amended and restated
management agreement continues to provide for reimbursement of ordinary and
necessary expenses and a continuing indemnity for the period up to the
termination date of November 27, 2006, and any extension thereto.

                        EFFECT OF INITIAL PUBLIC OFFERING

         Prior to our initial public offering of equity and the capital
restructuring associated with the offering:

         o  Castle Harlan or its affiliates held 13,850 shares of Series D
            preferred stock, 33,750 shares of Series E preferred stock and
            33,750 shares of the then outstanding common stock; and

         o  individual directors and members of our management held 4,724 shares
            of Series E preferred stock and 4,724 shares of the then outstanding
            common stock and options to acquire an additional 6,145 shares of
            common stock.

         Pursuant to the capital restructuring associated with the offering:

         o  Statia Terminals Group's Series D preferred stock and Series E
            preferred stock were redeemed at their liquidation preference;

         o  all shares of outstanding common stock consisting of 47,119 shares,
            which included an additional 6,145 shares of common stock issued
            upon exercise of options by the closing of the offering, were
            reclassified as 471,190 Class B subordinated shares;

         o  Statia Terminals Group issued an additional 3,328,810 Class B
            subordinated shares plus 38,000 Class C incentive rights to the
            holders of the remaining common stock;




                                       53
<PAGE>   56


         o  all of the Class B subordinated shares and Class C incentive rights
            were transferred at the closing to Statia Terminals Holdings N.V. in
            exchange for common shares of Statia Terminals Holdings; and

         o  all of the shares of Petroterminal de Panama, S.A. then owned by
            Statia Terminals Group which were transferred at the closing to
            Castle Harlan, its affiliates, certain directors, and members of
            management were subsequently transferred to Statia Terminals Cayman,
            Inc.

                               BOARD OF DIRECTORS

         Some employees of Castle Harlan and a member of our management are
directors of Statia Terminals Group. Some of the actions taken by the board of
directors may affect the amount of cash available for distribution to holders of
Class A common shares and Class B subordinated shares or accelerate the
conversion of Class B subordinated shares. Decisions of the board of directors
with respect to the amount and timing of asset purchases and sales, cash
expenditures, borrowings, issuances of additional Class A common shares and the
creation, reduction, cancellation or increase of reserves in any quarter will
affect whether, or the extent to which, there is sufficient available cash from
our operating surplus to meet the target quarterly distribution and additional
distribution levels on all shares in a given quarter or in subsequent quarters.

                               LOANS TO MANAGEMENT

         On November 27, 1996, Messrs. Cameron, Thompson, Russo, Pine, Franklin,
Brenner and certain other of our officers and managers were granted loans by
Statia Terminals Group to purchase shares of its common stock and Series E
preferred stock. The loans totaled $1.5 million and were secured by pledges of
such stock. The loans bore interest at 6.49% annually and were due on the
earlier of (1) November 26, 2003, (2) the sale of the pledged stock, or (3) a
"change in control," as defined in the loan agreement. In April 1999 and in
conjunction with our initial public offering of equity, these loans were
replaced with new loans aggregating $1.5 million and bearing interest at 5.17%.
The maturity of the new loans is the earlier of (1) April 28, 2009, or (2) the
sale of the pledged stock.



                                       54
<PAGE>   57


                                    PART IV.

    ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


 (a)     1.       Financial Statements Index

                  The following consolidated financial statements of Statia
                  Terminals Group N.V. and its subsidiaries are filed in
                  response to Item 8 of this Report:
<TABLE>
<CAPTION>

                                                                                        PAGE
                                                                                        ----
<S>                                                                                       <C>
                  Report of Independent Certified Public Accountants                    F-1
                  Consolidated Balance Sheets
                           as of December 31, 1998 and 1999                             F-2
                  Consolidated Statements of Income (Loss)
                           for the years ended December 31, 1997, 1998 and 1999         F-4
                  Consolidated Statements Stockholders' Equity
                           for the years ended December 31, 1997, 1998 and 1999         F-5
                  Consolidated Statements of Cash Flows
                           for the years ended December 31, 1997, 1998 and 1999         F-6
                  Notes to consolidated financial statements                            F-7
</TABLE>

         2.       Financial Statement Schedules

                  See note 17 to our consolidated financial statements for
                  required financial statement schedules.

         3.       Exhibits Index

                  See the Exhibits Index on Pages E - 1 through E - 4 following
                  the signature pages.

(b)      Reports on Form 8-K

                  During the quarter ended December 31, 1999, we filed a Form
                  8-K dated December 10, 1999. Such Form 8-K contained two of
                  our previously issued press releases entitled STATIA TERMINALS
                  PROVIDES ADDITIONAL INFORMATION ON EFFECTS OF HURRICANE LENNY
                  and STATIA TERMINALS ANNOUNCES STOCK PURCHASE PROGRAM AND
                  COMMENTS ON ANTICIPATED FOURTH QUARTER AVAILABLE CASH AND
                  FUTURE DISTRIBUTIONS.



                                       55
<PAGE>   58



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors of
    Statia Terminals Group N.V. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Statia Terminals
Group N.V. (a Netherlands Antilles corporation) and Subsidiaries (the "Company")
as of December 31, 1998 and 1999, and the related consolidated statements of
income (loss), stockholders' equity and cash flows for the years ended December
31, 1997, 1998 and 1999. 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 consolidated financial position of the Company as of
December 31, 1998 and 1999, and the results of its consolidated operations and
its cash flows for the years ended December 31, 1997, 1998 and 1999, in
conformity with generally accepted accounting principles.

Arthur Andersen LLP

West Palm Beach, Florida,
    January 26, 2000.




                                      F-1
<PAGE>   59

                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>

                                                                                              December 31,
                                                                                       ------------------------
                                                                                         1998             1999
                                                                                       --------         --------
<S>                                                                                    <C>              <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                                           $ 14,061         $  5,658
   Accounts receivable-
     Trade, less allowance for doubtful accounts of $785 and $804 in 1998
       and 1999, respectively                                                             7,562           12,957
     Other                                                                                2,328            3,704
   Inventory, net                                                                         4,528            3,239
   Prepaid expenses                                                                       1,417            1,723
                                                                                       --------         --------
           Total current assets                                                          29,896           27,281

PROPERTY AND EQUIPMENT, net                                                             209,970          206,031

OTHER NONCURRENT ASSETS, net                                                              5,744            2,985
                                                                                       --------         --------

       Total assets                                                                    $245,610         $236,297
                                                                                       ========         ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                                    $  9,306         $ 14,086
   Accrued interest payable                                                               2,027            1,516
   Dividends payable                                                                      7,440               --
   Other accrued expenses                                                                 8,506            7,084
                                                                                       --------         --------
     Total current liabilities                                                           27,279           22,686

DISTRIBUTIONS PAYABLE                                                                        --            2,913
LONG-TERM DEBT- 11-3/4% FIRST MORTGAGE NOTES                                            135,000          101,000
                                                                                       --------         --------

     Total liabilities                                                                  162,279          126,599

REDEEMABLE PREFERRED STOCK:
   Series A, $0.10 par value, 20,000 shares authorized, issued and outstanding
     at December 31, 1998. No shares authorized, issued or outstanding at
     December 31, 1999                                                                   20,000               --
   Series B, $0.10 par value, 10,000 shares authorized, issued and outstanding
     at December 31, 1998. No shares authorized, issued or outstanding at
     December 31, 1999                                                                   10,000               --
   Series C, $0.10 par value, 10,000 shares authorized, issued and outstanding
     at December 31, 1998. No shares authorized, issued or outstanding at
     December 31, 1999                                                                   10,000               --

</TABLE>



                            (continued on next page)


   The accompanying notes are an integral part of these financial statements.


                                      F-2
<PAGE>   60


                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)
<TABLE>
<CAPTION>

                                                                                                 December 31,
                                                                                         ----------------------------
                                                                                            1998              1999
                                                                                         ---------          ---------
<S>                                                                                         <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (CONTINUED)

STOCKHOLDERS' EQUITY:
   Preferred stock:
     Series D, $0.10 par value, 20,000 shares authorized and issued, 13,850
       shares outstanding at December 31, 1998. No shares authorized,
       issued or outstanding at December 31, 1999                                           13,850                 --
     Series E, $0.10 par value, 209,500 shares authorized, 41,000 shares issued,
       40,974 shares outstanding at December 31, 1998. No shares
       authorized, issued or outstanding at December 31, 1999                               40,974                 --
                                                                                         ---------          ---------
              Total preferred stock                                                         54,824                 --

   Common stock, $0.10 par value, 100,500 shares authorized, 40,974 shares
     issued and outstanding at December 31, 1998. No shares authorized,
     issued or outstanding at December 31, 1999                                                  4                 --
   Class A common shares, $0.01 par value, 20,000,000 shares authorized,
     7,600,000 shares issued and 7,227,700 shares outstanding at December 31,
     1999.  No shares authorized, issued or outstanding at December 31, 1998                    --                 76
   Class B subordinated shares, $0.01 par value, 7,800,000 shares authorized,
     3,800,000 shares issued and outstanding at December 31, 1999. No shares
     authorized, issued or outstanding at December 31, 1998                                     --                 38
   Class C incentive rights, $0.01 par value, 2,200,000 shares authorized,
     38,000 shares issued and outstanding at December 31, 1999. No shares
     authorized, issued or outstanding at December 31, 1998                                     --                 --
   Additional paid-in-capital                                                                  363            129,834
   Notes receivable from stockholders                                                       (1,474)            (1,474)
   Accumulated deficit                                                                     (10,386)           (16,522)
   Class A common shares in treasury, at cost, 372,300 shares
     at December 31, 1999                                                                       --             (2,254)
                                                                                         ---------          ---------
              Total stockholders' equity                                                    43,331            109,698
                                                                                         ---------          ---------

              Total liabilities and stockholders' equity                                 $ 245,610          $ 236,297
                                                                                         =========          =========


</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                      F-3
<PAGE>   61


                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)

                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>

                                                                                                  December 31,
                                                                                -----------------------------------------
                                                                                   1997            1998            1999
                                                                                ---------       ---------       ---------
<S>                                                                             <C>             <C>             <C>
REVENUES:
   Terminaling services                                                         $  53,165       $  66,625       $  61,665
   Product sales                                                                   89,334          70,137         106,678
                                                                                ---------       ---------       ---------
     Total revenues                                                               142,499         136,762         168,343
                                                                                ---------       ---------       ---------

COSTS OF REVENUES:
   Terminaling services                                                            38,351          40,739          38,064
   Product sales                                                                   84,588          65,149          99,601
                                                                                ---------       ---------       ---------
     Total costs of revenues                                                      122,939         105,888         137,665
                                                                                ---------       ---------       ---------
   Gross profit                                                                    19,560          30,874          30,678

ADMINISTRATIVE EXPENSES                                                             7,735           9,500           8,745
SPECIAL COMPENSATION EXPENSE                                                           --              --           4,099
HURRICANE CHARGES                                                                      --             800           1,750
                                                                                ---------       ---------       ---------
   Operating income                                                                11,825          20,574          16,084

LOSS (GAIN) ON DISPOSITION OF PROPERTY AND EQUIPMENT                                 (109)          1,652              --
INTEREST EXPENSE                                                                   16,874          16,851          14,286
INTEREST INCOME                                                                       555             684             846
                                                                                ---------       ---------       ---------
   Income (loss) before provision for income taxes, preferred stock
     dividends and extraordinary charge                                            (4,385)          2,755           2,644

PROVISION FOR INCOME TAXES                                                            780             320             780
                                                                                ---------       ---------       ---------
   Income (loss) before preferred stock dividends and extraordinary charge         (5,165)          2,435           1,864

PREFERRED STOCK DIVIDENDS                                                           3,196           3,938           2,257
                                                                                ---------       ---------       ---------
   Loss before extraordinary charge                                                (8,361)         (1,503)           (393)

EXTRAORDINARY CHARGE RELATED TO EARLY
   EXTINGUISHMENT OF DEBT                                                              --              --           4,743
                                                                                ---------       ---------       ---------
     Net loss to common stockholders                                            $  (8,361)      $  (1,503)      $  (5,136)
                                                                                =========       =========       =========

BASIC EARNINGS PER COMMON SHARE:
  Income before extraordinary charge                                            $      --       $      --       $    0.66
  Extraordinary charge                                                                 --              --           (0.92)
                                                                                ---------       ---------       ---------
     Net loss to common stockholders                                            $      --       $      --       $   (0.26)
                                                                                =========       =========       =========

DILUTED EARNINGS PER COMMON SHARE:
  Income before extraordinary charge                                            $      --       $      --       $    0.44
  Extraordinary charge                                                                 --              --           (0.61)
                                                                                ---------       ---------       ---------
     Net loss to common stockholders                                            $      --       $      --       $   (0.17)
                                                                                =========       =========       =========

BASIC EARNINGS PER SUBORDINATED SHARE:
     Loss before extraordinary charge                                           $   (2.53)      $   (0.45)      $   (1.04)
     Extraordinary charge                                                              --              --              --
                                                                                ---------       ---------       ---------
       Net loss to common stockholders                                          $   (2.53)      $   (0.45)      $   (1.04)
                                                                                =========       =========       =========

DILUTED EARNINGS PER SUBORDINATED SHARE:
     Loss before extraordinary charge                                           $   (2.53)      $   (0.45)      $   (1.04)
     Extraordinary charge                                                              --              --              --
                                                                                ---------       ---------       ---------
       Net loss to common stockholders                                          $   (2.53)      $   (0.45)      $   (1.04)
                                                                                =========       =========       =========

</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                      F-4
<PAGE>   62



                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                PREFERRED STOCK -                                       NOTES
                                                                  SERIES D AND E          COMMON STOCK    ADDITIONAL  RECEIVABLE
                                                              -------------------    --------------------  PAID-IN       FROM
                                                               SHARES     AMOUNT       SHARES      AMOUNT   CAPITAL   STOCKHOLDERS
                                                              -------    --------    -----------   ------  ---------  ------------

<S>               <C> <C>                                      <C>       <C>              <C>       <C>    <C>          <C>
BALANCE, December 31, 1996                                     61,000    $ 61,000         41,000    $  4   $      --    $(1,500)

Net loss to common stockholders                                    --          --             --      --          --         --
                                                              -------    --------    -----------    ----   ---------    -------

BALANCE, December 31, 1997                                     61,000      61,000         41,000       4          --     (1,500)

Net loss to common stockholders                                    --          --             --      --          --         --
Amortization expense related to issuance of stock options          --          --             --      --         363         --
Retirement of Series D preferred stock                         (6,150)     (6,150)            --      --          --         --
Other                                                             (26)        (26)           (26)     --          --         26
                                                              -------    --------    -----------    ----   ---------    -------

BALANCE, December 31, 1998                                     54,824      54,824         40,974       4         363     (1,474)

Net loss to common stockholders                                    --          --             --      --          --         --
Net proceeds from initial public offering of Class A common        --          --      7,600,000      76     136,681         --
shares

Exercise of stock options, reclassification of subordinated
  shares and issuance of additional subordinated shares
  and incentive rights                                             --          --      3,797,026      34          --         --

Redemption of preferred stock                                 (54,824)    (54,824)            --      --          --         --
Compensation to Castle Harlan for services performed in
  relation to initial public offering of Class A
  common shares                                                    --          --             --      --        (778)        --
Dividend of Petroterminal de Panama                                --          --             --      --          --         --
Vesting of compensatory stock options                              --          --             --      --       2,152         --
Amortization expense related to common stock options               --          --             --      --         154         --
Class A common shares and Class B subordinated shares
  distributions declared                                           --          --             --      --      (8,738)        --
Purchase of Class A common shares as treasury stock                --          --             --      --          --         --
                                                              -------    --------    -----------    ----   ---------    -------

BALANCE, December 31, 1999                                         --    $     --     11,438,000    $114   $ 129,834    $(1,474)
                                                              =======    ========    ===========    ====   =========    =======
</TABLE>




<TABLE>
<CAPTION>

                                                                          CLASS A
                                                                           COMMON
                                                             ACCUMULATED  SHARES IN
                                                              DEFICIT     TREASURY     TOTAL
                                                              --------    --------   ---------

<S>               <C> <C>                                     <C>         <C>        <C>
BALANCE, December 31, 1996                                    $   (522)   $    --    $  58,982

Net loss to common stockholders                                 (8,361)        --       (8,361)
                                                              --------    -------    ---------

BALANCE, December 31, 1997                                      (8,883)        --       50,621

Net loss to common stockholders                                 (1,503)        --       (1,503)
Amortization expense related to issuance of stock options           --         --          363
Retirement of Series D preferred stock                              --         --       (6,150)
Other                                                               --         --           --
                                                              --------    -------    ---------

BALANCE, December 31, 1998                                     (10,386)        --       43,331

Net loss to common stockholders                                 (5,136)        --       (5,136)
Net proceeds from initial public offering of Class A common         --         --      136,757
shares

Exercise of stock options, reclassification of subordinated
  shares and issuance of additional subordinated shares
  and incentive rights                                              --         --           34

Redemption of preferred stock                                       --         --      (54,824)
Compensation to Castle Harlan for services performed in
  relation to initial public offering of Class A
  common shares                                                     --         --         (778)
Dividend of Petroterminal de Panama                             (1,000)        --       (1,000)
Vesting of compensatory stock options                               --         --        2,152
Amortization expense related to common stock options                --         --          154
Class A common shares and Class B subordinated shares
  distributions declared                                            --         --       (8,738)
Purchase of Class A common shares as treasury stock                 --     (2,254)      (2,254)
                                                              --------    -------    ---------

BALANCE, December 31, 1999                                    $(16,522)   $(2,254)   $ 109,698
                                                              ========    =======    =========
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                      F-5
<PAGE>   63

                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                 December 31,
                                                                        ---------------------------------
                                                                           1997        1998        1999
                                                                        --------    --------    ---------
<S>                                                                     <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss to common stockholders                                      $ (8,361)   $ (1,503)   $  (5,136)
     Adjustments to reconcile net loss to common stockholders to
       net cash provided by operating activities:
     Depreciation, amortization, and certain non-cash charges             10,911      12,383       11,686
     Preferred stock dividends accrued                                     3,196       3,938        2,257
     Provision for bad debts                                                  11          72           20
     Extraordinary charge on early extinguishment of debt                     --          --        4,743
     Hurricane charges                                                        --         800        1,750
     Non-cash special compensation expense                                    --          --        2,152
     Loss (gain) on disposition of property and equipment                   (109)      1,652           --
     (Increase) decrease in accounts receivable - trade                    2,060       2,458       (5,415)
     (Increase) decrease in other accounts receivables                       747          20       (1,376)
     (Increase) decrease in inventory                                      3,722      (3,281)       1,289
     (Increase) decrease in prepaid expense                                 (453)         72       (1,084)
     (Increase) decrease in other noncurrent assets                         (123)          6          (70)
     Increase (decrease) in accounts payable                              (2,202)      1,574        4,780
     Increase (decrease) in accrued expenses                                 371          (1)      (1,931)
                                                                        --------    --------    ---------
       Net cash provided by operating activities                           9,770      18,190       13,665
                                                                        --------    --------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                     (5,344)    (10,714)      (8,593)
   Proceeds from sale of property and equipment                              112         122           15
   Proceeds from sale of Statia Terminals Southwest, Inc.                     --       6,500           --
   Accrued transaction costs and purchase price adjustments               (7,703)         --           --
                                                                        --------    --------    ---------
     Net cash used in investing activities                               (12,935)     (4,092)      (8,578)
                                                                        --------    --------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from initial public offering of Class A common shares         --          --      136,757
   Redemption of preferred stock                                              --      (6,150)     (94,824)
   Repurchase of First Mortgage Notes                                         --          --      (37,681)
   Payment of preferred stock dividends                                       --          --       (9,697)
   Payment of Class A common share distributions                              --          --       (5,825)
   Borrowings under revolving credit facility                                 --          --        3,403
   Repayments of revolving credit facility                                    --          --       (3,403)
   Purchase of Class A common shares as treasury stock                        --          --       (2,254)
   Issuance of additional Class B subordinated shares and Class C
     incentive rights                                                         --          --           34
                                                                        --------    --------    ---------
     Net cash used in financing activities                                    --      (6,150)     (13,490)
                                                                        --------    --------    ---------

     Increase (decrease) in cash and cash equivalents                     (3,165)      7,948       (8,403)

CASH AND CASH EQUIVALENTS, at beginning of year                            9,278       6,113       14,061
                                                                        --------    --------    ---------

CASH AND CASH EQUIVALENTS, at end of year                               $  6,113    $ 14,061    $   5,658
                                                                        ========    ========    =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid for taxes                                                  $    513    $    369    $     677
                                                                        ========    ========    =========
   Cash paid for interest                                               $ 15,334    $ 15,940    $  14,012
                                                                        ========    ========    =========
</TABLE>



                                      F-6
<PAGE>   64


                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)



1.       ORGANIZATION AND OPERATIONS

         Statia Terminals Group N.V. was formed on September 4, 1996 by Castle
Harlan Partners II L.P. ("Castle Harlan"), a private equity investment fund
managed by Castle Harlan, Inc., a private merchant bank, certain members of
management and others and commenced operations on November 27, 1996
("Inception"). Statia Terminals Group N.V. and Subsidiaries (the "Company") own
and operate petroleum blending, transshipment and storage facilities located on
the island of St. Eustatius, Netherlands Antilles and near Point Tupper, Nova
Scotia, Canada. The Company's terminaling services are furnished to many of the
world's largest producers of crude oil, integrated oil companies, oil traders,
refiners and petrochemical companies. In addition to storage, the Company
provides a variety of related terminal services including the supplying of
bunkering, crude oil and petroleum product blending and processing, emergency
and spill response, brokering of product trades and ship services. A subsidiary
of the Company provides administrative services for the Company from its office
in Deerfield Beach, Florida.

         The Company includes the following primary entities (collectively, the
"Statia Operations"): Statia Terminals Group N.V. ("Group"), Statia Terminals
International N.V. ("Statia"), Statia Terminals N.V. (each incorporated in the
Netherlands Antilles), Statia Terminals Canada, Inc. (incorporated in Nova
Scotia, Canada) and Statia Terminals Southwest, Inc. (incorporated in Texas, the
"Brownsville Facility") which was sold in July 1998 (see Note 15). Significant
intercompany balances and transactions have been eliminated.

         The Company was formed during 1996 to acquire the capital stock of
Statia Terminals, Inc. and its subsidiaries and affiliates (the "Predecessor
Company") from Praxair, Inc. ("Praxair"). On November 27, 1996, the Company
acquired from Praxair all of the outstanding capital stock of Statia Terminals
N.V., Statia Terminals, Inc., their subsidiaries and certain affiliates (the
"Castle Harlan Acquisition"). The adjusted purchase price of the Castle Harlan
Acquisition totaled approximately $218,146. The Castle Harlan Acquisition was
paid, in part, by funds received by the Company from the issuance of $135,000 of
11 3/4% First Mortgage Notes (the "Notes") described in Note 5 and from the sale
of the Company's preferred and common stock.

         The Castle Harlan Acquisition has been accounted for under the purchase
method of accounting. Accordingly, the purchase price was allocated to the
assets and liabilities of the Company based on their respective fair values as
of the date of the Castle Harlan Acquisition. No portion of the purchase price
of the Company was allocated to intangible assets since the fair value of the
tangible assets exceeded the purchase price.

         Prior to January 12, 1996, the Predecessor Company was a wholly owned
subsidiary of CBI Industries, Inc. ("CBI"). On January 12, 1996, pursuant to the
Merger Agreement dated December 22, 1995, CBI became a wholly owned subsidiary
of Praxair.

         As further discussed in Note 3, on April 28, 1999, the Company
completed its initial public offering of equity.




                                      F-7
<PAGE>   65
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     USE OF ESTIMATES

         These consolidated financial statements have been prepared in
conformity with generally accepted accounting principles as promulgated in the
United States which require management to make estimates and assumptions that
affect the reported amounts of assets and liabilities. Management is also
required to make judgments regarding disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates.

     REVENUE RECOGNITION

         Revenues from terminaling operations are recognized ratably as the
services are provided. Revenues and commissions from bunkering services,
terminaling-related services and bulk product sales are recognized at the time
of delivery of the service or product.

         In December 1999, the U.S. Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin 101, "Revenue Recognition" ("SAB 101"), which
provides guidance on the recognition, presentation, and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosure
related to revenue recognition policies. The Company believes its revenue
recognition practices are in conformity with the guidelines prescribed in SAB
101.

     FOREIGN CURRENCY TRANSLATION AND EXCHANGE

         The consolidated financial statements include the financial statements
of foreign subsidiaries and affiliates translated in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 52 "Foreign Currency
Translation." The assets and liabilities are translated into U.S. dollars at
year end exchange rates. Income and expense items are converted into U.S.
dollars at average rates of exchange prevailing during the year. Substantially
all of the Company's transactions are denominated in U.S. dollars.

     STOCK-BASED COMPENSATION PLANS

         SFAS No. 123, "Accounting for Stock-Based Compensation," allows for
either the adoption of a fair value method for accounting for stock-based
compensation plans or for the continuation of accounting under Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations with supplemental disclosures.

         The Company has chosen to account for its stock options using the
intrinsic value based method prescribed in APB Opinion No. 25 and, accordingly,
does not recognize compensation expense for stock option grants made at an
exercise price equal to or in excess of the fair market value of the stock at
the date of grant to employees. SFAS No. 123 does not impact the Company's
results of operations, financial position or cash flows.



                                      F-8
<PAGE>   66
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


     CASH AND CASH EQUIVALENTS

         The Company's excess cash is invested in short-term, highly liquid
investments with maturities of three months or less. Such short-term investments
are carried at cost, which approximates market, and are classified as cash and
cash equivalents.

     FINANCIAL INSTRUMENTS

         The Company uses various methods and assumptions to estimate the fair
value of each class of financial instrument. Due to their nature, the carrying
value of cash and cash equivalents, accounts receivable and accounts payable
approximates fair value. The Company's other financial instruments are not
significant.

     INVENTORY

         Inventory of oil products is valued at the lower of weighted average
cost or estimated market value.

     PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost less accumulated
depreciation. Depreciation expense is computed using the straight-line method
over the estimated useful lives of the respective assets. Additions to property
and equipment, replacements, betterments and major renewals are capitalized.
Repair and maintenance expenditures which do not materially increase asset
values or extend useful lives are expensed.

         SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of any asset may not be recoverable. SFAS No. 121 also requires
that long-lived assets and certain identifiable long-lived assets to be disposed
of be reported at the lower of carrying amount or fair value less cost to sell.
The Company continually evaluates factors, events and circumstances which
include, but are not limited to, its historical and projected operating
performance, specific industry trends and general economic conditions to assess
whether the remaining estimated useful lives of long-lived assets may warrant
revision or that the remaining balance of long-lived assets may not be
recoverable. When such factors, events or circumstances indicate that long-lived
assets should be evaluated for possible impairment, the Company uses an estimate
of undiscounted cash flow over the remaining lives of the long-lived assets in
measuring their recoverability. The Company measures an asset impairment loss as
the amount by which the carrying amount exceeds the fair market value of the
asset.

                                      F-9
<PAGE>   67
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


     OTHER NONCURRENT ASSETS

         Other noncurrent assets primarily consist of deferred financing costs
in the amounts of $4,521 and $2,701 as of December 31, 1998 and 1999,
respectively. The deferred financing costs related to establishing debt
obligations are amortized ratably over the life of the underlying obligation.
Debt cost amortization expense was $911 and $767 for the years ended December
31, 1998 and 1999, respectively. Other noncurrent assets as of December 31, 1998
also include an investment in Petroterminal de Panama carried at its cost of
$1,000.

     CLASS A COMMON SHARES IN TREASURY

         In December 1999, the Company's Board of Directors authorized the open
market purchase of up to one million shares of the Company's Class A common
shares. As of December 31, 1999, the Company had acquired 372,300 Class A common
shares at an aggregate cost of $2,254 pursuant to this program. The Company
accounts for these purchases under the cost method with the aggregate cost
recorded as a reduction of stockholders' equity.

     ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

         The Company is subject to comprehensive and periodically changing
environmental, health and safety laws and regulations within the jurisdictions
of its operations, including those governing oil spills, emissions of air
pollutants, discharges of wastewater and storm water, and the disposal of
non-hazardous and hazardous waste. Expenditures for environmental, health and
safety matters, which benefit future periods and qualify as property and
equipment, are capitalized and depreciated over the respective lives of the
assets. During the years ended December 31, 1997, 1998, and 1999, such
expenditures aggregated approximately $1,300, $2,700, and $2,500, respectively.
The Company expenses, on a current basis, routine operational compliance costs.
During the years ended December 31, 1997, 1998, and 1999, such costs aggregated
approximately $200, $900, and $1,200, respectively.

         The Company accrues for costs associated with environmental remediation
when it becomes probable that a liability has been incurred and the amount can
be reasonably estimated. The Company recognizes amounts recoverable from third
parties when the collection of such amounts is probable. Recoverable amounts and
accrued costs are included in Accounts receivable - Other and Other accrued
expenses, respectively. See Note 12 for a further discussion of such matters.

     INCOME TAXES

         The Company determines its tax provision and deferred tax balances in
compliance with SFAS No. 109, "Accounting for Income Taxes." Under this
approach, the provision for income taxes represents income taxes paid or payable
for the current year adjusted for the change in deferred taxes during the year.
Deferred income tax assets and liabilities reflect the net tax effects of
temporary differences between the financial statement bases and the tax bases of
assets and liabilities and are adjusted for changes in tax rates and tax laws
when changes are enacted.



                                      F-10
<PAGE>   68
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


     EARNINGS PER SHARE

         In connection with its initial public offering of equity discussed in
Note 3 below, the Company adopted Statement of Financial Accounting Standards
No. 128 "Earnings per Share" ("SFAS No. 128"). Earnings per share are computed
based upon the "Participating Securities and Two-Class Common Stock" methodology
as required by SFAS No. 128. Earnings and losses have been allocated to each
class of shares based upon changes in the historical basis liquidation values of
the classes of shares during the periods presented as determined in accordance
with the Company's articles of incorporation. Under this methodology, all of the
earnings and losses prior to the closing of the Company's initial public
offering of equity on April 28, 1999 have been allocated to the Class B
subordinated shareholders. All of the earnings and losses subsequent to April
28, 1999 have been allocated to the Class A common shareholders.

         Basic earnings (loss) per share is computed by dividing the earnings
and losses allocated to each class of common equity by the weighted average
number of shares outstanding for each class during the period. Diluted earnings
(loss) per share is computed the same as basic earnings (loss) per share except
the denominator is adjusted for the effect of Class A common share and Class B
subordinated share equivalents outstanding. For periods prior to April 28, 1999,
Class B subordinated share equivalents include, where appropriate, the assumed
exercise of previously outstanding stock options and the conversion of the
Company's previously outstanding Series B preferred stock.

         All earnings per share amounts presented have been adjusted to give
retroactive effect, as of the beginning of each period presented, to the
reclassification and issuance of additional Class B subordinated shares and
Class C incentive rights that occurred in connection with the initial public
offering of equity (see Note 3). The Company's previously outstanding preferred
stock with conversion features was antidilutive for all periods presented.

         The following additional information is presented with respect to the
Company's earnings per share amounts:
<TABLE>
<CAPTION>

                                                                    For the Years Ended December 31,
                                                                   -----------------------------------
                                                                      1997          1998          1999
                                                                   -------       -------       -------

<S>                                                                <C>           <C>           <C>
EARNINGS PER COMMON SHARE

Earnings and losses allocated to Class A common shares:
   Income before extraordinary charge                              $    --       $    --       $ 3,410
   Extraordinary charge                                                 --            --         4,743
                                                                   -------       -------       -------
   Net loss to common stockholders                                 $    --       $    --       $(1,333)
                                                                   =======       =======       =======

Weighted average Class A common shares outstanding                      --            --         5,156
Dilutive effect of weighted average Class B
  subordinated shares outstanding                                       --            --         2,572
                                                                   -------       -------       -------
Diluted common shares outstanding                                       --            --         7,728
                                                                   =======       =======       =======

EARNINGS PER SUBORDINATED SHARE

Earnings and losses allocated to Class B subordinated shares:
   Loss before extraordinary charge                                $(8,361)      $(1,503)      $(3,803)
   Extraordinary charge                                                 --            --            --
                                                                   -------       -------       -------
   Net loss to common stockholders                                 $(8,361)      $(1,503)      $(3,803)
                                                                   =======       =======       =======

Weighted average Class B subordinated shares outstanding             3,307         3,305         3,641
Dilutive effect of stock options and preferred stock
  with conversion features                                              --            --            --
                                                                   -------       -------       -------
Diluted subordinated shares outstanding                              3,307         3,305         3,641
                                                                   =======       =======       =======
</TABLE>



                                      F-11
<PAGE>   69
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


     COMPREHENSIVE INCOME

         In June 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No. 130
establishes standards for the reporting and display of comprehensive income and
its components in the financial statements. The following types of items are to
be considered in computing comprehensive income: foreign currency translation
adjustments, pension liability adjustments and unrealized gain/loss on
securities available for sale. For all periods presented herein, there were no
differences between net income and comprehensive income.

      SEGMENT INFORMATION

         The Company discloses information regarding its segments pursuant to
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"). SFAS No. 131 establishes standards for the way
that public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
product and services, geographic areas, and major customers.

     RECLASSIFICATIONS

         Certain reclassifications were made to the 1997 and 1998 financial
statements and notes thereto in order to conform to the 1999 presentation.

3.       INITIAL PUBLIC OFFERING OF EQUITY AND RELATED TRANSACTIONS

         On April 28, 1999, the Company completed its initial public equity
offering of 7.6 million Class A common shares. The offering price was $20 per
share raising gross proceeds of $152,000. The gross proceeds of the offering
were used primarily to redeem all of the Company's outstanding Series A, B, C,
D, and E preferred stock and pay accrued dividends, pay underwriters' discounts
and fees, and pay certain other costs directly associated with the offering. The
remaining proceeds were invested and used during May 1999, along with existing
cash, to repurchase in the open market a principal amount of $34,000 of the
Notes for $39,522, including acquisition costs and accrued interest of $3,681
and $1,841, respectively. During the second quarter of 1999, the acquisition
costs and the unamortized deferred financing costs related to the repurchased
Notes ($1,062) were recorded as an extraordinary charge. There was no income tax
effect associated with this extraordinary charge.

         Immediately prior to the initial public offering of equity, the Company
transferred its ownership interest in Petroterminal de Panama, valued at $1,000,
to its shareholders as a dividend. In connection with a restructuring effected
contemporaneously with the offering, all outstanding stock options were
exercised and converted along with all existing common stock into 3.8 million
Class B subordinated shares and 38,000 Class C incentive rights.

         During the three months ended March 31, 1999, the Company recorded as
special compensation expense a bonus in the amount of $1,947 for particular
members of the Company's management. The purpose of this special management
bonus was to partially reimburse these individuals with respect to adverse tax
consequences that resulted from the offering and other past compensation
arrangements.



                                      F-12
<PAGE>   70

                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


         The following unaudited pro forma consolidated results of operations
for the year ended December 31, 1999, were prepared to illustrate the estimated
effects of:

         o  the elimination of the Castle Harlan management fee discussed in
            Note 13, and

         o  the use of the net proceeds from the initial public offering of
            equity and the restructuring,

(collectively, the "pro forma transactions") as if the pro forma transactions
had occurred at the beginning of the period. This pro forma financial
information is provided for informational purposes only and does not purport to
be indicative of the results of operations which would have been obtained had
the pro forma transactions been completed on the dates indicated or results of
operations for any future date or period.

        Revenues                                                    $ 168,343

        Operating income                                               20,626

        Net income available to common stockholders                     7,873

        Diluted earnings per common share                                0.69

        Weighted average common shares outstanding                  7,593,000

        Diluted common shares outstanding                           11,393,000

4.       PROPERTY AND EQUIPMENT

         Property and equipment consisted of the following as of December 31:
<TABLE>
<CAPTION>

                                                                                      Useful Lives
                                                             1998          1999         In Years
                                                             ----          ----         --------
<S>                                                       <C>           <C>             <C>
Land                                                      $    1,291    $    1,291
Land and improvements                                          7,679         6,872       5 - 20
Buildings and improvements                                     3,303         3,446      20 - 40
Plant machinery and terminals                                156,261       159,822       4 - 40
Mooring facilities and marine equipment                       50,453        51,701       4 - 40
Field and office equipment                                     2,497         4,068       3 - 15
Spare parts and hoses                                          2,908         2,687
Capital projects in process                                    5,395         6,501
                                                          ----------    ----------
     Total property and equipment, at cost                $  229,787    $  236,388
     Less accumulated depreciation                            19,817        30,357
                                                          ----------   -----------
     Property and equipment, net                          $  209,970    $  206,031
                                                          ==========    ==========
</TABLE>




                                      F-13
<PAGE>   71


                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


5.       DEBT

         The 11 3/4% $135,000, First Mortgage Notes due November 15, 2003 (the
"Notes") were issued by subsidiaries of the Company (the "Issuers") on November
27, 1996 in connection with the Castle Harlan Acquisition and pay interest on
May 15 and November 15 of each year. The Notes are redeemable, in whole or, in
part, at the option of the Issuers at any time on or after November 15, 2000, at
the redemption prices listed below (expressed as percentages of principal
amount), together with accrued and unpaid interest, if any, thereon to the
redemption date, if redeemed during the 12-month period beginning November 15,
in the year indicated. The Company may also forego the redemption process and
repurchase Notes in the open market on or after November 15, 2000.

                                            Optional
                        Year            Redemption Price
                     ------------   -------------------------
                        2000                105.875%
                        2001                102.938%
                        2002                100.000%

         Notwithstanding the foregoing, any time on or prior to November 15,
1999, the Issuers were allowed to redeem or repurchase up to 35% of the
aggregate principal amount of the Notes with the proceeds of one or more equity
offerings, plus accrued and unpaid interest, if any, to the date of redemption
or repurchase, provided that after giving effect to such redemption or
repurchase, at least 65% of the aggregate principal amount of the Notes would
remain outstanding. As further discussed in Note 3, during May 1999 and in
connection with its initial public offering of equity, the Company repurchased
in the open market a principal amount of $34,000 of the Notes.

         The Notes are guaranteed on a full, unconditional, joint and several
basis by each of the indirect and direct active subsidiaries of Statia. The
Notes are also subject to certain financial covenants as set forth in the
Indenture, the most restrictive of which include, but are not limited to the
following: (i) a consolidated fixed charge coverage ratio for the prior four
full fiscal quarters of at least 2.0 to 1, which, if met, will permit the
Company to make additional borrowings above the Company's revolving credit
facility discussed below, (ii) other limitations on indebtedness, and (iii)
restrictions on certain payments. In addition, the Notes place restrictions on
the Company's ability to pay dividends other than distributions from the
proceeds of assets held for sale and certain management fees as discussed in
Note 13 below. Except with the occurrence of an event of default, subsidiaries
of Statia have no restrictions upon transfers of funds in the form of dividends,
loans or cash advances. The Company is in compliance with the financial
covenants set forth in the Indenture except that the Company has not met the
minimum consolidated fixed charge coverage ratio for certain periods which would
have prevented the Company from making additional borrowings above the revolving
credit facility discussed below.

         The Company has a revolving credit facility (the "Credit Facility")
which allows certain of the Company's subsidiaries to borrow up to $17,500 or
the limit of the borrowing base as defined in the Credit Facility. The Credit
Facility calls for a commitment fee of 0.375% per annum on a portion of the
unused funds. The Credit Facility bears interest at a rate of prime plus 0.5%
(9.0% at December 31, 1999). The Credit Facility constitutes senior indebtedness
of the Company and is secured by a first priority lien on certain of the
Company's accounts receivable and inventory. The Credit Facility is subject to
certain restrictive covenants; however, it is not subject to financial





                                      F-14
<PAGE>   72
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


covenants. The Credit Facility does not restrict the Company's subsidiaries from
transferring funds to the Company in the form of dividends, loans or cash
advances; however, the failure to pay interest when due constitutes an event of
default under the Credit Facility and such event of default, until cured,
prohibits upstream dividend payments to be made to the Company. The Credit
Facility expires on November 27, 2000. At December 31, 1998 and 1999, the
Company had approximately $7,982 and $10,603, respectively, available for
borrowing under the Credit Facility as limited by the borrowing base computation
and had no outstanding balance.

6.     CAPITAL STRUCTURE

         Each Class A common share and Class B subordinated share is entitled to
one vote on issues brought before the Company's shareholders. The Class C
incentive rights have no voting privileges.

         The Class A common shares are entitled, to the extent there is
sufficient available cash as defined in the Company's articles of incorporation,
to a target quarterly distribution of $0.45 per share, before the Company makes
any distributions on its Class B subordinated shares. In general, the Company
will make distributions of available cash, if any, first to the Class A common
shares until each has received $0.45 per quarter plus any arrearages from prior
quarters and second to the Class B subordinated shares until each has received
$0.45 per quarter. Class B subordinated shares do not accrue distribution
arrearages. If the Company makes quarterly distributions of available cash to
the Class A common shares and Class B subordinated shares above specified
additional distribution levels, the holders of Class C incentive rights will
receive distributions that represent an increasing percentage of the total
distributions made above those specified distribution levels. However, there are
no assurances that the Company will be able to pay distributions to any of its
classes of shares.

         The Company will defer making payment on the first $6,800 of
distributions that would otherwise have been made on the Class B subordinated
shares until the end of the deferral period, as defined in the Company's
articles of incorporation. The deferral period will generally end once the
Company meets certain financial tests, which are defined in the Company's
articles of incorporation, but it cannot end prior to June 30, 2001. After the
deferral period, the Company will pay to the Class B subordinated shares, until
the deferred distributions have been paid in full, all available cash from
operating surplus remaining after all common share arrearages are paid, and the
target quarterly distribution is paid on all Class A common shares and Class B
subordinated shares, prior to any further distribution.

         At the end of the subordination period as defined in the Company's
articles of incorporation, each Class B subordinated share will convert to one
Class A common share and will participate equally with the other Class A common
shares, subject to the distribution rights of the Class C incentive rights, in
future distributions of available cash. The Class A common shares will then no
longer accrue distribution arrearages. The subordination period will generally
end once the Company meets certain financial tests, which are defined in the
Company's articles of incorporation, but it cannot end prior to June 30, 2004.
If the Company satisfies the tests for ending the subordination period for any





                                      F-15
<PAGE>   73
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


quarter ending on or after June 30, 2002, one-quarter of the Class B
subordinated shares will convert into Class A common shares. If the Company
satisfies these tests for any quarter ending on or after June 30, 2003, an
additional one-quarter of the Class B subordinated shares will convert into
Class A common shares. The early conversion of this second one-quarter of the
Class B subordinated shares may not occur until at least one year following the
early conversion of the first one-quarter of the Class B subordinated shares.

         Should the Company undergo a dissolution and liquidation, its assets
will be sold or otherwise disposed of. The Company will apply the proceeds of
liquidation first to the payment of its creditors in order of their priority.
Then any remaining proceeds will be distributed to the holders of the Class A
common shares, Class B subordinated shares and Class C incentive rights in order
of their priority. In liquidation, the holders of Class A common shares will be
entitled to receive their unrecovered initial price and the target quarterly
distribution due on such common shares plus any unpaid common share arrearages
before any distribution is made to holders of the Class B subordinated shares.

7.       PREFERRED STOCK

         Prior to its initial public offering of equity, the Company had
authorized preferred stock of $26,950 divided into 269,500 shares with a par
value of $0.10 consisting of the following shares: (i) 20,000 shares of 8%
Series A Cumulative Preferred Stock (the "Series A Preferred Stock"); (ii)
10,000 shares of 8% Series B Cumulative Preferred Stock (the "Series B Preferred
Stock"); (iii) 10,000 shares of 8% Series C Cumulative Preferred Stock (the
"Series C Preferred Stock"); (iv) 20,000 shares of 2% Series D Preferred Stock
(the "Series D Preferred Stock"); and (v) 209,500 shares of 2% Series E
Preferred Stock (the "Series E Preferred Stock"). Under certain circumstances as
discussed below, the dividend rates on the Series A, B and C Preferred Stock
would increase from 8% to 14.75%. All such stock was non-voting and had a
liquidation preference of one thousand dollars per share. Dividends on the
Series D and E Preferred Stock were waived.

         The Series A, B and C Preferred Stock in the aggregate of $40,000 were
contributed from Praxair as non-cash equity and contained provisions for
redemption beyond the control of the Company. The terms of the Series B
Preferred Stock were such that if the Series B shares were not redeemed for cash
or exchanged for common equity of the Company prior to November 27, 1998, the
dividend rate on the Series A, B and C Preferred Stock would increase from 8% to
14.75% effective November 28, 1998. As the Series B Preferred Stock was not
redeemed by the Company prior to November 27, 1998, the dividend rate on the
Company's Series A, B and C Preferred Stock increased from 8% to 14.75%
effective November 28, 1998, in accordance with the Company's preferred stock
agreements and its prior articles of incorporation.

         The Indenture permitted the sale of the Brownsville facility and
permitted a restricted payment from Statia to Group equal to the net proceeds
from such sale. Such amounts were required to be applied to redeem the Series D
Preferred Stock. On July 29, 1998 the Company sold the Brownsville Facility and
a restricted payment of $6,150 was made from Statia to Group to redeem a portion
of the Series D Preferred Stock.

                                      F-16
<PAGE>   74
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


8.       NOTES RECEIVABLE FROM STOCKHOLDERS

         Notes receivable from stockholders represent nonrecourse loans made by
the Company to certain members of management and are secured by pledges of the
Company's common stock. The original loans bore interest at 6.49% and were due
on the earlier of (i) November 26, 2003, or (ii) sale of the Company's common
stock. In April 1999 and in conjunction with our initial public offering of
equity, these loans were replaced with new loans aggregating $1,474 and bearing
interest at 5.17%. The maturity of the new loans is the earlier of (1) April 28,
2009 or (2) sale of the pledged stock. These loans have been classified as a
reduction to stockholders' equity in the accompanying financial statements.

9.       LEASES

         The Company rents certain facilities and marine equipment under
cancelable and noncancelable operating leases. Rental expense on operating
leases was $3,763, $3,409 and $3,619 for the years ended December 31, 1997,
1998, and 1999, respectively. Future rental commitments during the years ending
2000 through 2004 are $4,151, $5,025, $5,011, $4,273 and $1,879, respectively.

10.      INCOME TAXES

         The sources of income (loss) by jurisdiction before the provision for
income taxes, preferred stock dividends and extraordinary charge are:

                               For the Years Ended December 31,
                           -----------------------------------------
                               1997          1998          1999
                           ------------  ------------  ------------

U.S.                        $  (1,823)    $    (362)    $      41
Non-U.S.                       (2,562)        3,117         2,603
                            ----------    ---------     ---------
                            $  (4,385)    $   2,755     $   2,644
                            ==========    =========     =========

         The provision for income taxes consisted of:

                               For the Years Ended December 31,
                           -----------------------------------------
                               1997          1998          1999
                           ------------  ------------  ------------
   Current:
      U.S.                    $    (128)    $     --      $     123
      State                         (42)          --           -
      Non-U.S.                     (610)         (320)         (903)
                              ----------    ----------    ----------
                              $    (780)    $    (320)    $    (780)
                              ----------    ----------    ----------

   Deferred:
      U.S.                           --            --            --
                              ----------    ----------    ----------
         Total provision      $    (780)    $    (320)    $    (780)
                              ==========    ==========    ==========

         The components of the deferred income tax provision relate to book
versus tax differences in computing depreciation expense.



                                      F-17
<PAGE>   75

                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


         A reconciliation of income taxes at the U.S. statutory rate of 35% to
the Company's provision for income taxes is as follows:
<TABLE>
<CAPTION>

                                                                              For the Years Ended December 31,
                                                                          ------------------------------------------
                                                                              1997           1998          1999
                                                                          ------------   ------------  ------------
<S>                                                                        <C>            <C>           <C>
Income (loss) before provision for income taxes, preferred stock
  dividends and extraordinary charge                                       $  (4,385)     $   2,755     $   2,644
                                                                           ----------     ----------    ---------

Tax (provision) benefit at U.S. statutory rate                                 1,535           (964)         (925)
State income taxes                                                               (14)            --            --
Non-U.S. tax rate differential and losses without tax benefit                 (2,301)           644           145
                                                                           ----------     ----------    ---------
                                                                           $    (780)     $    (320)    $    (780)
                                                                           ==========     ==========    ==========
</TABLE>

         The principal temporary differences included on the balance sheets, as
of December 31, are:

                                                1998           1999
                                              --------       --------

Net operating loss and ITC carryforwards      $ 28,080       $ 26,146
Valuation allowance                            (28,080)       (26,146)
                                              --------       --------
                                              $     --       $     --
                                              ========       ========

         The Company's net deferred tax assets primarily relate to Canadian
investment tax credits and net operating loss carryforwards. The Company has
provided a full valuation allowance against these tax assets, because it is not
certain that the deferred tax assets will be utilized in the future.

         The Company's Canadian subsidiaries are subject to a federal large
corporation tax based on 0.225% of the subsidiaries' total equity. As of April
1, 1997, Nova Scotia enacted a provincial capital tax based on 0.25% of the
subsidiaries' total equity (prorated to 0.1888% for the 1997 calendar year). The
Company has benefited from investment tax credit carryforwards and net operating
tax losses which expire in various amounts through 2003 and 2005, respectively.
The net operating tax loss carryforwards available to offset Canadian taxable
income at December 31, 1998 and 1999 were $55,097 and $50,891, respectively. The
investment tax credit carryforward available to reduce Canadian income taxes was
$7,302 and $7,211 at December 31, 1998 and 1999, respectively.

         On June 1, 1989, the governments of the Netherlands Antilles and St.
Eustatius approved a Free Zone and Profit Tax Agreement retroactive to January
1, 1989 and concluding on December 31, 2000. This agreement requires a
subsidiary of the Company to pay a 2% rate on taxable income, as defined, or a
minimum payment of 500 Netherlands Antilles guilders ($282). This agreement
further provides that any amounts paid in order to meet the minimum annual
payment will be available to offset future tax liabilities under the agreement
to the extent that the minimum annual payment is greater than 2% of taxable
income. Currently, the subsidiary is renegotiating a new agreement with the
governments of the Netherlands Antilles and St. Eustatius that is expected to be
effective retroactively from January 1, 1998, through December 31, 2010, with
extension provisions to 2015.

         Certain of the Company's Netherlands Antilles subsidiaries are not part
of the Free Zone and Profit Tax Agreement and, accordingly, pay Netherlands





                                      F-18
<PAGE>   76
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


Antilles federal income tax at an effective tax rate of up to 45%. Approximately
$67, $28 and $48 of Netherlands Antilles profit tax is included in the Non-U.S.
tax provision for the years ended December 31, 1997, 1998 and 1999,
respectively.

11.      STOCK OPTIONS

         During 1997, the stockholders of the Company approved the 1997 Stock
Option Plan (the "1997 Plan") which allowed up to 7,235 shares of $0.10 par
value common stock of the Company to be delivered pursuant to incentive stock
option award agreements or nonqualified stock option award agreements. The
incentive stock option award agreement specified that after two years of
employment from the date of grant and after each of the following three years,
25% of the option shares would become exercisable unless a Liquidation Event
occurred (as defined in the award agreement) at which time the option would
become fully exercisable. The options terminated upon termination of employment,
except in the event of death, permanent disability or involuntary termination
other than for substantial cause. Each option expired ten years after the date
of grant. The 1997 Plan was terminated in April 1999.

         During November 1997, 2,895 shares of common stock were granted to
certain employees of the Company pursuant to incentive stock options at an
exercise price of $0.10, which equaled the fair market value of the Company's
common stock on the grant date. The Company applies APB Opinion No. 25 and
related interpretations in accounting for options granted to employees and
directors. Accordingly, no compensation costs have been recognized related to
the stock options granted in 1997.

         During December 1998, 2,895 shares of common stock were granted to
certain employees of the Company pursuant to incentive stock options at an
exercise price of $0.10. The Company recorded the required compensation expense
under APB 25 on the date of grant representing the difference between the fair
value of the options and the exercise price of $0.10 per share amortized over
the vesting period of five years. The fair value of such options was determined
based on an independent appraisal of the Company's common stock on the date of
grant to be $810 per share. The total amount of compensation expense recognized
during 1998 and credited to additional paid-in capital related to such options
was $39 and is included in costs of revenues and administrative expense. During
the period from January 1, 1999 to April 28, 1999, $154 related to these options
was amortized as compensation expense and credited to additional paid-in
capital.

         In connection with the initial public offering of equity discussed in
Note 3, certain previously granted stock options became fully vested, were
exercised and became Class B subordinated shares. On April 28, 1999, the
remaining unamortized compensation expense associated with these options of
$2,152 was recorded as a non-cash special compensation expense and credited to
additional paid-in capital.

         During 1998, the Company also granted 400 options to purchase common
stock to non-employee directors of the Company. These options vested immediately
on the date of grant. The Company recorded $324 of compensation expense under
APB No. 25 on the date of grant. This amount represented the difference between
the fair value of $810 per share and the exercise price of $0.10 per share. The
compensation expense is included in administrative expenses and credited to
additional paid-in capital.

                                      F-19
<PAGE>   77
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


         Had compensation cost been recorded for the Company's awards based on
fair value at the grant dates consistent with the methodologies of SFAS No. 123,
the Company's reported net loss to common stockholders and earnings per share
would have been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>

                                                                      For the Years Ended December 31,
                                                                  ------------------------------------------
                                                                      1997          1998           1999
                                                                  ------------  ------------   ------------
<S>                                                                <C>           <C>            <C>
         Net loss to common stockholders:
              As reported                                          $  (8,361)    $  (1,503)     $  (5,136)
              Pro forma                                               (8,400)       (1,960)        (6,869)
         Basic earnings per share:
              Class A common share as reported and pro forma              --            --          (0.26)
              Class B subordinated share as reported                   (2.53)        (0.45)         (1.04)
              Class B subordinated share pro forma                     (2.54)        (0.59)         (1.52)
         Diluted earnings per share:
              Class A common share as reported and pro forma              --            --          (0.17)
              Class B subordinated share as reported                   (2.53)        (0.45)         (1.04)
              Class B subordinated share pro forma                     (2.54)        (0.59)         (1.52)
</TABLE>

         Under SFAS 123, the value of each option granted was estimated on the
date of grant using the Black Scholes model with the following assumptions:
Risk-free interest rate - 6.3%, dividend yield - 0%, and expected life of the
option - 10 years.

         In April 1999 and in conjunction with the initial public offering of
equity, the shareholders of the Company approved the 1999 Share Option Plan (the
"1999 Plan"). The 1999 Plan is intended to further the Company's success by
increasing the proprietary interest of its key employees, directors and
consultants and to enhance its ability to attract and retain employees,
directors and consultants of outstanding ability. Under the 1999 Plan, the
Company may deliver up to 1,140,000 Class A common shares, subject to adjustment
under certain conditions. Any such options must have an exercise price at least
equal to the fair market value of the Company's Class A common shares on the
date of grant and must be exercisable within ten years of the grant date. As of
December 31, 1999, no options had been granted pursuant to the 1999 Plan.

12.      COMMITMENTS AND CONTINGENCIES

     ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

         In connection with the Castle Harlan Acquisition, studies were
undertaken by and for Praxair to identify potential environmental, health and
safety matters. Certain matters involving potential environmental costs were
identified at the Point Tupper, Nova Scotia, Canada facility. Praxair has agreed
to pay for certain of these environmental costs subject to certain limitations.
Praxair has paid approximately $3,906 during the period from November 27, 1996
to December 31, 1999 related to such costs. Based on investigations conducted




                                      F-20
<PAGE>   78
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


and information available to date, the potential cost of additional remediation
and compliance is estimated at $13,000, substantially all of which the Company
believes is the responsibility of Praxair per the Castle Harlan Acquisition
agreement. The Company believes that environmental, health and safety costs will
not have a material adverse effect on the Company's financial position, cash
flows or results of operations, subject to reimbursements from Praxair.

         The Company has also identified certain other environmental, health and
safety costs not covered by the agreement with Praxair for which $1,500 were
accrued in 1996 in conjunction with the Castle Harlan Acquisition. Through
December 31, 1999, $32 of this amount had been expended. Management periodically
reviews the adequacy of this accrual and during 1999 determined $250 originally
provided for environmental contingencies at the Company's St. Eustatius facility
were no longer necessary. Accordingly, this portion of the accrual was
eliminated and credited to costs of revenues.

     LITIGATION

         The Company is involved in various claims and litigation arising in the
normal course of its business. Based upon analysis of legal matters and
discussions with legal counsel, the Company believes that the ultimate outcome
of these matters will not have a material adverse effect on the Company's
business, financial condition or results of operations.

     ACCRUED EXPENSES

         A summary of other accrued expenses consists of the following as of
December 31:

                                      1998          1999
                                      ----          ----

Personnel and related costs       $   2,835     $   2,061
Professional fees                     1,175           928
Environmental expenses                1,490         1,208
Accrued taxes                         1,412         1,493
Other                                 1,594         1,394
                                  ---------    ----------
                                  $   8,506     $   7,084
                                  =========     =========

13.      CASTLE HARLAN MANAGEMENT AGREEMENT

         In November 1996, the Company entered into a ten-year management
agreement with Castle Harlan, Inc., to pay an annual management fee of $1,350,
plus out-of-pocket expenses, for advisory and strategic planning services in
relation to the day-to-day affairs of the Company. Such services were performed
at the discretion of Castle Harlan, Inc. The management agreement also entitled
Castle Harlan, Inc. to additional compensation should it perform services for
the Company related to certain financing activities, including initial public
offerings. The Company compensated Castle Harlan, Inc. $778 for services
performed in relation to the Company's initial public offering of equity and
such amount was charged to additional paid-in capital on April 28, 1999. This




                                      F-21
<PAGE>   79
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)


management agreement was amended and restated at the closing of the Company's
initial public offering of equity on April 28, 1999, to eliminate the $1,350
management fee and require that any such services be provided only at the
request of the Company. The Company has not requested any such services
subsequent to April 28, 1999, nor has Castle Harlan, Inc. provided any such
services. Accordingly, no management fee expense has been recorded subsequent to
April 28, 1999. The amended and restated management agreement continues to
provide for reimbursement of ordinary and necessary expenses and a continuing
indemnity for the period up to the termination date of November 27, 2006, and
any extension thereto.

14.      SEGMENT INFORMATION

         The Company is organized around several different factors, the two most
significant of which are services and products and geographic location. The
Company's primary services and products are terminaling services (resulting in
revenue from storage, throughput, dock usage, emergency response and other
terminal services) and product sales.

         The primary measures of profit and loss utilized by the Company's
management to make decisions about resources to be allocated to each segment are
earnings before interest expense, interest income, income taxes, depreciation,
amortization, and certain non-recurring income and expenses ("Adjusted EBITDA")
and earnings before interest expense, interest income, income taxes and certain
non-recurring income and expenses ("Adjusted EBIT").

         The following information is provided for the Company's terminaling
services and product sales segments:

<TABLE>
<CAPTION>
                                                                  For the Years Ended December 31,
                                                              -----------------------------------------
                                                                  1997          1998          1999
                                                              ------------  ------------  ------------
<S>                                                            <C>           <C>           <C>
REVENUES:
   Terminaling services                                        $   53,165    $   66,625    $   61,665
   Product sales                                                   89,334        70,137       106,678
                                                               ----------    ----------    ----------
     Total                                                     $  142,499    $  136,762    $  168,343
                                                               ==========    ==========    ==========

ADJUSTED EBITDA:
   Terminaling services                                        $   17,837    $   28,102    $   26,994
   Product sales                                                    4,652         4,466         6,584
                                                               ----------    ----------    ----------
     Total                                                     $   22,489    $   32,568    $   33,578
                                                               ==========    ==========    ==========

DEPRECIATION AND AMORTIZATION EXPENSE:
   Terminaling services                                        $   10,307    $   11,218    $   11,196
   Product sales                                                      604           203           371
                                                               ----------    ----------    ----------
     Total                                                     $   10,911    $   11,421    $   11,567
                                                               ==========    ==========    ==========

ADJUSTED EBIT:
   Terminaling services                                        $    7,530    $   16,884    $   15,798
   Product sales                                                    4,048         4,263         6,213
                                                               ----------    ----------    ----------
     Total                                                     $   11,578    $   21,147    $   22,011
                                                               ==========    ==========    ==========

CAPITAL EXPENDITURES:
   Terminaling services                                        $    4,735    $    8,274    $    7,572
   Product sales                                                       58         1,212           161
   Other unallocated                                                  551         1,228           860
                                                               ----------    ----------    ----------
     Total                                                     $    5,344    $   10,714    $    8,593
                                                               ==========    ==========    ==========
</TABLE>

                                      F-22
<PAGE>   80

                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)



                            As of December 31,
                          ----------------------
                            1998          1999
                          --------      --------
ASSETS:

Terminaling services      $208,642      $203,781
Product sales               12,058        16,618
Unallocated assets          24,910        15,898
                          --------      --------
   Total assets           $245,610      $236,297
                          ========      ========

         A reconciliation of Adjusted EBIT to the Company's income (loss) before
provision for income taxes, preferred stock dividends and extraordinary charge
is as follows:
<TABLE>
<CAPTION>

                                                                   For the Years Ended December 31,
                                                               --------------------------------------
                                                                   1997           1998           1999
                                                               --------       --------       --------
<S>                                                            <C>            <C>            <C>
Adjusted EBIT                                                  $ 11,578       $ 21,147       $ 22,011
Interest expense excluding debt cost amortization expense       (15,963)       (15,940)       (13,518)
Special compensation expense                                         --             --         (4,099)
Hurricane charges                                                    --           (800)        (1,750)
Loss on sale of Statia Terminals Southwest, Inc.                     --         (1,652)            --
                                                               --------       --------       --------
   Income (loss) before provision for income taxes,
     preferred stock dividends and extraordinary charge        $ (4,385)      $  2,755       $  2,644
                                                               ========       ========       ========
</TABLE>

         The following information is provided with respect to the geographic
operations of the Company:

                            For the Years Ended December
                         ------------------------------------
                           1997          1998          1999
                         --------      --------      --------
REVENUES:

   Caribbean             $122,042      $114,091      $149,852
   Canada                  18,586        21,058        18,491
   United States            1,871         1,613            --
                         --------      --------      --------
     Total revenues      $142,499      $136,762      $168,343
                         ========      ========      ========

                                        As of December 31,
                                       ---------------------
                                          1998          1999
                                       -----------  --------
LONG-TERM ASSETS:
   Caribbean                         $  183,872    $  176,895
   Canada                                29,170        29,522
   United States                          1,672         2,599
   Panama                                 1,000            --
                                       --------      --------
                                     $  215,714    $  209,016
                                       ========      ========

     SIGNIFICANT CUSTOMERS

         The Company presently has long-term storage and throughput contracts
with Bolanter Corporation N.V. (an affiliate of Saudi Aramco) and a subsidiary
of Tosco Corporation which expire in 2003 and 2004, respectively. The Company
also derives revenues from affiliates of Bolanter and Tosco as an indirect


                                      F-23
<PAGE>   81

                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)



result of these storage and throughput agreements. The Company derives revenues
from parties unaffiliated with either Saudi Aramco or Tosco, because of the
movement of Saudi Aramco and Tosco products through the Company's terminals.
Additionally, the Company sells bunker fuels to an affiliate of Saudi Aramco at
its St. Eustatius facility.

         The following table sets forth such revenues as a percentage of our
total revenue.
<TABLE>
<CAPTION>

                                                                       For the Years Ended December 31,
                                                                       ----------------------------------
                                                                          1997        1998        1999
                                                                       ----------  ----------  ----------
<S>                                                                        <C>         <C>         <C>
Saudi Aramco related revenues:
   Storage and throughput contract and related indirect revenues           7.0%        7.4%        6.1%
   Unaffiliated third parties                                              6.4%        7.7%        6.4%
   Bunker sales                                                            2.1%        1.5%        2.3%
                                                                       ----------  ----------  --------
     Total                                                                15.5%       16.6%       14.8%
                                                                       ==========  ==========  ========
Tosco related revenues:
   Storage and throughput contract and related indirect revenues           6.9%        7.1%        5.1%
   Unaffiliated third parties                                              3.9%        1.9%        0.9%
   Bunker sales                                                            0.1%        0.0%        0.0%
                                                                       ----------  ----------  --------
     Total                                                                10.9%        9.0%        6.0%
                                                                       ==========  ==========  ========
</TABLE>

         Although the Company has long-standing relationships and long-term
contracts with these customers, if such long-term contracts were not renewed or
replaced at the end of their terms, or if the Company otherwise lost any
significant portion of its revenues from these two customers, such
non-renewal/replacement or loss could have a material adverse effect on the
Company's business, financial condition and ability to pay distributions. The
Company also has long-term contracts with other key customers, and there can be
no assurance that these contracts will be renewed at the end of their terms or
that the Company will be able to enter into other long-term contracts on terms
favorable to it, or at all.

         No other customer accounted for more than 10% of the Company's total
revenues in 1997, 1998 or 1999.

15.      LOSS ON SALE OF STATIA TERMINALS SOUTHWEST, INC.

         On July 29, 1998, the Company sold Statia Terminals Southwest, Inc.
("Southwest") for $6,500 in cash resulting in net proceeds of approximately
$6,150. The Company retained certain of the pre-closing assets and liabilities
of Southwest consisting primarily of accounts receivable and accrued expenses
and agreed to indemnify the purchaser for certain contingent legal and
environmental matters up to a maximum of $500 through July 29, 1999. The
indemnification period lapsed with no liability to the Company. The net book
value of the assets and liabilities sold on July 29, 1998, was $7,802. The loss
on the sale of Southwest of $1,652 is included in gain (loss) on sale of
property and equipment since substantially all of the value of Southwest was
originally recorded in this account when the Company was acquired.



                                      F-24
<PAGE>   82

                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)



16.      HURRICANE CHARGES

         As a result of damages sustained to the Company's St. Eustatius
facility from Hurricane Lenny in late November 1999, the Company incurred a
one-time, non-cash charge of $1,500 to partially reduce the carrying value of
its shoreline protection system and a one-time cash charge of $250 to cover
other hurricane related expenses. The damaged shoreline protection system was
not covered by insurance and, together with certain other civil work, is
expected to be replaced during the first half of 2000.

         During September 1998, Hurricane Georges damaged components of the
Company's St. Eustatius facility. However, operations were not significantly
impacted by the hurricane and returned to normal within days of the storm.
During 1998, the Company recorded a charge of $800 representing an insurance
deductible of $500 related to the hurricane damage and certain other costs
resulting from the hurricane which will not be recovered through the Company's
insurance policies.

17.      VALUATION AND QUALIFYING ACCOUNTS

         The table below summarizes the activity in the valuation account,
allowance for possible uncollectible accounts receivable and the deferred tax
asset valuation allowance for the periods indicated.
<TABLE>
<CAPTION>

                                                          Balance,       Charges      Deductions,     Balance,
                                                          Beginning         to        Write-offs,      End of
                                                          Of Period      Expense          Net          Period
                                                          ---------      -------      ----------       ------
<S>                                                       <C>            <C>           <C>            <C>
Trade Accounts Receivable Valuation Account:
   For the year ended December 31, 1997                   $     769      $      11     $      50      $     830
   For the year ended December 31, 1998                         830             72          (117)           785
   For the year ended December 31, 1999                         785             20            (1)           804

Deferred Tax Asset Valuation Allowance:
   For the year ended December 31, 1997                   $  31,548      $      --     $  (1,866)     $  29,682
   For the year ended December 31, 1998                      29,682            371        (1,973)        28,080
   For the year ended December 31, 1999                      28,080             --        (1,934)        26,146

</TABLE>


                                      F-25
<PAGE>   83
                  STATIA TERMINALS GROUP N.V. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)
                                   (CONTINUED)




18.      UNAUDITED QUARTERLY FINANCIAL INFORMATION


         The following is a summary of the unaudited quarterly results of
operations for 1998 and 1999:

<TABLE>
<CAPTION>

                                                                              QUARTERS ENDED
                                                            --------------------------------------------------
                                                            MARCH 31     JUNE 30    SEPTEMBER 30    DECEMBER 31      TOTAL
                                                            --------     -------    ------------    -----------    -----------
<S>                                                        <C>           <C>          <C>            <C>           <C>
1998
Total revenues                                          $ 30,364       $    36,472       $32,699      $37,227      $   136,762
Gross profit                                               5,244             7,660         8,779        9,191           30,874
Net income (loss) available to common stockholders        (2,233)           (3,776)          685        3,821           (1,503)
BASIC EARNINGS PER SUBORDINATED SHARE:                     (0.68)            (1.14)         0.21         1.16            (0.45)
DILUTED EARNINGS PER SUBORDINATED SHARE:                   (0.68)            (1.14)         0.19         1.08            (0.45)

1999
Total revenues                                          $ 37,415       $    42,267       $43,310      $45,351      $   168,343
Gross profit                                               8,815             8,468         6,382        7,013           30,678
Income (loss) before extraordinary charge                 (1,655)              237           999           26             (393)
Net income (loss) available to common stockholders        (1,655)           (4,506)          999           26           (5,136)
BASIC EARNINGS PER COMMON SHARE:
Income before extraordinary charge                            --              0.45          0.13         0.01             0.66
Net income (loss) available to common stockholders            --             (0.44)         0.13         0.01            (0.26)
DILUTED EARNINGS PER COMMON SHARE:
Income before extraordinary charge                            --              0.30          0.09           --             0.44
Net income (loss) available to common stockholders            --             (0.29)         0.09           --            (0.17)
BASIC AND DILUTED EARNINGS PER SUBORDINATED SHARE:
Loss before extraordinary charge                           (0.50)            (0.59)           --           --            (1.04)
Net loss to common stockholders                            (0.50)            (0.59)           --           --            (1.04)
</TABLE>

         Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share in 1998 and
1999 does not equal the total computed for the year. In accordance with SFAS No.
128, all earnings per share amounts presented have been adjusted to give
retroactive effect, as of the beginning of each period presented, to the
reclassification and issuance of additional Class B subordinated shares and
Class C incentive rights that occurred in connection with the initial public
offering of equity (see Note 3).

         During the second quarter of 1998, the Company recorded a non-cash
charge of $4,000 related to the sale of Southwest, of which $2,348 was adjusted
during the fourth quarter of 1998.

         The Company's initial public offering of equity and related
transactions have affected the comparability of individual quarters. See Note 3.

19.      SUBSEQUENT EVENT

         On January 19, 2000, the Company's board of directors declared a
distribution of $0.15 per share on the Class A common shares, payable on
February 14, 2000, for the benefit of shareholders of record at the close of
business on January 31, 2000. Pursuant to the Company's articles of
incorporation, the $0.30 per share difference between the declared distribution
and the target quarterly distribution of $0.45 per share represents an arrearage
which must be paid from future available cash. No distribution was declared on
the Class B subordinated shares.



                                      F-26
<PAGE>   84




                           STATIA TERMINALS GROUP N.V.

                        EXPLANATORY STATEMENT AND REPORT
                         ON THE BUSINESS OF THE COMPANY

To the Annual General Meeting of Shareholders:

         Attached hereto and incorporated herein are pages F-1 through F-28,
which include, as required by Netherlands Antilles law, as pages F-2 through
F-4, the balance sheet and profit and loss account (the "Annual Accounts") of
Statia Terminals Group N.V. (the "Company") for the period January 1, 1999,
through December 31, 1999. The movable and immovable assets of the Company have
been evaluated in accordance with U.S. generally accepted accounting principles.

         For the period ending December 31, 1999, the Company had a net loss of
U.S. $5,136,000, as more fully explained in the attached Annual Accounts.

         This statement may be executed in one or more counterparts and shall
become effective when all Directors of the Company have signed a counterpart
hereof.

                                       /s/ JOHN K. CASTLE
                                       -----------------------------------------
                                       John K. Castle


                                        /s/ DAVID B. PITTAWAY
                                       -----------------------------------------
                                        David B. Pittaway


                                        /s/ JUSTIN B. WENDER
                                       -----------------------------------------
                                        Justin B. Wender


                                        /s/ JAMES G. CAMERON
                                       -----------------------------------------
                                        James G. Cameron


                                        /s/ FRANCIS JUNGERS
                                       -----------------------------------------
                                        Francis Jungers

                                        /s/ ADMIRAL JAMES L. HOLLOWAY III
                                       -----------------------------------------
                                        Admiral James L. Holloway III


                                        /s/ JONATHAN R. SPICEHANDLER, M.D.
                                       -----------------------------------------
                                        Jonathan R. Spicehandler, M.D.


                                        /s/ ERNEST VOGES
                                       -----------------------------------------
                                        Ernest Voges




<PAGE>   85



                                   SIGNATURES

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

                                        Statia Terminals Group N.V.


                                        By:      /s/ JAMES G. CAMERON
                                                 --------------------------
                                                 James G. Cameron
                                                 Director
                                                 November 14, 2000


                                        By:      /s/ JAMES F. BRENNER
                                                 --------------------------
                                                 James F. Brenner
                                                 Vice President and Treasurer
                                                 November 14, 2000

         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
registrant and in the capacities and on the dates indicated.

                                  By:     /s/ JOHN K. CASTLE
                                          ------------------------------------
                                          John K. Castle
                                          Director
                                          November 14, 2000


                                  By:      /s/ DAVID B. PITTAWAY
                                           -----------------------------------
                                           David B. Pittaway
                                           Director
                                           November 14, 2000


                                  By:      /s/ JUSTIN B. WENDER
                                           -----------------------------------
                                           Justin B. Wender
                                           Director
                                           November 14, 2000


                                  By:      /s/ JAMES G. CAMERON
                                           -----------------------------------
                                           James G. Cameron
                                           Director
                                           (As Principal Executive Officer)
                                           November 14, 2000



                                      S-1
<PAGE>   86


                                  By:      /s/ FRANCIS JUNGERS
                                           -----------------------------------
                                           Francis Jungers
                                           Director
                                           November 14, 2000


                                  By:      /s/ JAMES L. HOLLOWAY III
                                           --------------------------
                                           James L. Holloway III
                                           Director
                                           November 14, 2000


                                  By:      /s/ JONATHAN R. SPICEHANDLER, M.D.
                                           ----------------------------------
                                           Jonathan R. Spicehandler, M.D.
                                           Director
                                           November 14, 2000


                                  By:      /s/ ERNEST VOGES
                                           -----------------------------------
                                           Ernest Voges
                                           Director
                                           November 14, 2000


                                  By:      /s/ JAMES F. BRENNER
                                           -----------------------------------
                                           James F. Brenner
                                           Vice President and Treasurer
                                           (As Principal Financial Officer and
                                           Principal Accounting Officer)
                                           November 14, 2000



                                      S-2
<PAGE>   87



                                 EXHIBITS INDEX
<TABLE>
<CAPTION>

        EXHIBIT
        NUMBER                                                   DESCRIPTION
        ------                                                   -----------
<S>                     <C>

3.1*********              Articles of incorporation Statia Terminals Group N.V.

4.1**                     Indenture, dated as of November 27, 1996, among Statia Terminals International N.V., Statia
                          Terminals Canada, Incorporated, as Issuers, and Statia Terminals Corporation N.V., Statia
                          Terminals Delaware, Inc., Statia Terminals, Inc., Statia Terminals N.V., Statia Delaware
                          Holdco II, Inc., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Terminals
                          Southwest, Inc., W.P. Company, Inc., Seven Seas Steamship Company, Inc., Seven Seas Steamship
                          Company (Sint Eustatius) N.V., Point Tupper Marine Services Limited, Statia Laboratory
                          Services N.V., Statia Tugs N.V. (collectively, the "Subsidiary Guarantors") and Marine Midland
                          Bank.

4.1a******                First Amendment, dated as of August 14, 1997, to the Indenture, dated as of November 27, 1996,
                          among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia
                          Terminals Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada,
                          the Subsidiary Guarantors named therein and Marine Midland Bank.

4.1b****                  Second Amendment, dated as of February 25, 1998, to the Indenture, dated as of November 27,
                          1996, among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia
                          Terminals Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada,
                          the Subsidiary Guarantors named therein and Marine Midland Bank.

4.1c*                     Third Amendment, dated as of July 29, 1998, to the Indenture, dated as of November 27, 1996,
                          among Statia Terminals International N.V., a Netherlands Antilles corporation, Statia
                          Terminals Canada, Incorporated, a corporation organized under the laws of Nova Scotia, Canada,
                          the Subsidiary Guarantors named therein and Marine Midland Bank.

4.1d*******               Fourth Amendment of Indenture and Consent Under Securities Pledge Agreement, dated April 26,
                          1999.

4.2**                     Form of Guarantee of shares issued pursuant to the Indenture (included in Exhibit 4.1 hereto).

4.3********               Guarantee issued pursuant to the Indenture, dated as of June 28, 1999, made by Statia
                          Terminals Antilles N.V.

4.4**                     Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals
                          International N.V. and Marine Midland Bank.

4.5*                      Amendment, dated as of December 18, 1998, by and among Statia Terminals Delaware N.V., Marine
                          Midland Bank and Statia Terminals Delaware Inc. to Share Pledge Agreement, dated as of
                          November 27, 1996 by and between Statia Terminals International N.V. and Marine Midland Bank.

4.6**                     Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals N.V.
                          and Marine Midland Bank.

4.7**                     Share Pledge Agreement, dated as of November 27, 1996, by and between Statia Terminals
                          Corporation N.V. and Marine Midland Bank.

4.8**                     Share Pledge Agreement, dated as of November 27, 1996, by and between Seven Seas Steamship
                          Company, Inc. and Marine Midland Bank.

4.9********               Share Pledge Agreement, dated as of June 28, 1999, by and among Statia Terminals Antilles
                          N.V., Statia Terminals Delaware, Inc. and HSBC Bank USA (formerly known as Marine Midland
                          Bank).
</TABLE>



                                      E-1
<PAGE>   88
<TABLE>
<CAPTION>

        EXHIBIT
        NUMBER                                                   DESCRIPTION
        ------                                                   -----------
<S>                     <C>


4.10********              Amendment to Share Pledge Agreement, dated as of June 28, 1999, by and between Statia
                          Terminals International N.V. and HSBC Bank USA (formerly known as Marine Midland Bank).

4.11**                    Fiduciary Transfer of Tangible Assets Agreement, dated as of November 27, 1996, by and between
                          Statia Terminals N.V., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia
                          Laboratory Services N.V., Statia Tugs N.V., Seven Seas Steamship Company (Sint Eustatius) N.V.
                          and Marine Midland Bank.

4.12**                    Fiduciary Assignment of Intangible Assets Agreement, dated as of November 27, 1996, by and
                          between Statia Terminals International N.V., Statia Terminals Corporation N.V., Statia
                          Terminals N.V., Saba Trustcompany N.V., Bicen Development Corporation N.V., Statia Laboratory
                          Services N.V., Seven Seas Steamship Company (Sint Eustatius) N.V., Statia Tugs N.V. and Marine
                          Midland Bank.

4.13**                    Deed of Mortgage, dated as of November 27, 1996, by and among Statia Terminals N.V., Statia
                          Laboratory Services N.V., Saba Trustcompany N.V. and Bicen Development Corporation N.V. as
                          mortgagors and Marine Midland Bank as mortgagee.

4.14**                    Fixed and Floating Charge Debenture, made as of November 27, 1996, between Statia Terminals
                          Canada, Incorporated and Marine Midland Bank.

4.15**                    Debenture Delivery Agreement, dated as of November 27, 1996, between Statia Terminals Canada,
                          Incorporated and Marine Midland Bank.

4.16**                    Shares Pledge Agreement, made as of November 27, 1996, between Statia Terminals Canada,
                          Incorporated and Marine Midland Bank.

4.17**                    Shares Pledge Agreement, dated as of November 27, 1996, between Statia Terminals Corporation
                          N.V. and Marine Midland Bank.

4.18**                    Debt Allocation Agreement, dated as of November 27, 1996, between Statia Terminals
                          International N.V. and Statia Terminals Canada, Incorporated.

4.19**                    United States Shares Pledge and Security Agreement, dated as of November 27, 1996, by and
                          among Statia Terminals International N.V., Statia Delaware Holdco II, Statia Terminals
                          Delaware, Inc., Statia Terminals, Inc., W.P. Company, Inc. and Marine Midland Bank.

4.20*                     Form of Registration Rights Agreement between Statia Terminals Group N.V. and Statia Terminals
                          Holdings N.V.

10.1**                    Storage and Throughput Agreement, dated as of May 6, 1993 ("Storage and Throughput
                          Agreement").

10.2**                    Marine Fuel Agreement, dated as of May 6, 1993 ("Marine Fuel Agreement").

10.3**                    Amendment, dated as of January 1, 1996 to (i) the Storage and Throughput Agreement and (ii)
                          the Marine Fuel Agreement.

10.3a*                    Amendment, dated as of December 27, 1996 to (i) the Storage and Throughput Agreement and (ii)
                          the Marine Fuel Agreement for the year ended December 31, 1997.

10.3b*                    Amendment, dated as of December 28, 1997 to (i) the Storage and Throughput Agreement and (ii)
                          the Marine Fuel Agreement for the year ended December 31, 1998.

10.3c*                    Amendment, dated February 26, 1999 to (i) the Storage and Throughput Agreement and (ii) the
                          Marine Fuel Agreement for the years ended December 31, 2000.
</TABLE>

                                      E-2
<PAGE>   89
<TABLE>
<CAPTION>

        EXHIBIT
        NUMBER                                                   DESCRIPTION
        ------                                                   -----------
<S>                     <C>


10.4**                    Storage and Throughput Agreement, dated as of August 20, 1993.

10.4a+                    Amendment, dated as of October 1999 to the Storage and Throughput Agreement.

10.5**                    Storage and Throughput Agreement, dated as of August 1, 1994.

10.5a*****                Amendment, dated as of March 23, 1999 to the Storage and Throughput Agreement.

10.6*******               Amended and restated Employment Agreement, effective April 28, 1999, between Statia Terminals
                          Group N.V., Statia Terminals, Inc. and James G. Cameron.

10.7*******               Amended and restated Employment Agreement, effective April 28, 1999, between Statia Terminals
                          Group N.V., Statia Terminals, Inc. and Thomas M. Thompson, Jr.

10.8*******               Amended and restated Employment Agreement, effective April 28, 1999, between Statia Terminals
                          Group N.V., Statia Terminals, Inc. and Robert R. Russo.

10.9*******               Amended and restated Employment Agreement, effective April 28, 1999, between Statia Terminals
                          Group N.V., Statia Terminals, Inc. and John D. Franklin.

10.10*******              Amended and restated Employment Agreement, effective April 28, 1999, between Statia Terminals
                          Group N.V., Statia Terminals, Inc. and James F. Brenner.

10.11*******              Amended and restated Employment Agreement, effective April 28, 1999, between Statia Terminals
                          Group N.V., Statia Terminals, Inc. and Jack R. Pine.

10.12**                   Loan and Share Agreement, dated as of November 27, 1996 between Congress Financial Corporation
                          (Florida) and Statia Terminals N.V.

10.13**                   Loan Agreement, dated as of November 27, 1996, by and among Congress Financial Corporation
                          (Canada), Statia Terminals Canada, Incorporated and Point Tupper Marine Services Limited.

10.14****                 1997 Stock Option Plan with Award Agreements.

10.15*                    Form of 1999 Share Option Plan.

21.1+                     Subsidiaries of the Registrant.

27.1                      Financial Data Schedules (for electronic filing only).
</TABLE>

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

*           Incorporated by reference to our Registration Statement on Form
            S-1, dated February 12, 1999, and amendments thereto filed with the
            U.S. Securities and Exchange Commission (Registration Statement No.
            333-72317), which became effective on April 26, 1999.

**          Incorporated by reference to the Registration Statement of Statia
            Terminals International N.V. and Statia Terminals Canada,
            Incorporated on Form S-4, dated December 20, 1996, and amendments
            thereto filed with the U.S. Securities and Exchange Commission
            (Registration Statement No. 333-18455), which became effective on
            February 14, 1997.

***         Incorporated by reference to the December 31, 1996 Form 10-K of
            Statia Terminals International N.V. and Statia Terminals Canada,
            Incorporated, dated May 13, 1997.

****        Incorporated by reference to the December 31, 1997 Form 10-K of
            Statia Terminals International N.V. and Statia Terminals Canada,
            Incorporated, dated March 31, 1998.

*****       Incorporated by reference to the December 31, 1998 10-K of Statia
            Terminals International N.V. and Statia Terminals Canada,
            Incorporated, dated March 31, 1999.

******      Incorporated by reference to the September 30, 1997 Form 10-Q of
            Statia Terminals International N.V. and Statia Terminals Canada,
            Incorporated, dated November 14, 1997.

*******     Incorporated by reference to our March 31, 1999 Form 10-Q, dated
            May 13, 1999.



                                      E-3
<PAGE>   90


********    Incorporated by reference to our June 30, 1999 Form 10-Q, dated
            August 12, 1999.

*********   Incorporated by reference to our September 30, 1999 Form 10-Q,
            dated November 15, 1999.

+           Incorporated by reference to our December 31, 1999 Form 10-K, dated
            March 17, 2000.




                                      E-4