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Western Refining Reports Record Third Quarter 2008 Financial Results
EL PASO, Texas, Nov 05, 2008 (BUSINESS WIRE) -- Western Refining, Inc. (NYSE:WNR) today reported third quarter 2008 net income of $109.2 million, or $1.61 per diluted share. The Company's net income was $46.6 million, or $0.69 per diluted share, for the same period in 2007. For the first nine months of 2008, the Company reported net earnings of $77.0 million, or $1.14 per diluted share, versus net earnings of $264.1 million, or $3.91 per diluted share, for the first nine months of 2007.

The improvement in operating income in the 2008 third quarter was due to higher refined product margins. The increase in margins was primarily the result of an increase in the amount of lower-cost crude oil processed at the Company's refineries during the 2008 quarter. Margins also improved in the quarter as the cost of crude oil declined faster than the prices of finished products.

Total refinery throughput for the third quarter of 2008 was 230,814 barrels per day, which included 212,032 barrels per day of crude oil. Total refinery throughput for the third quarter of 2007 was 227,052 barrels per day, including 212,213 barrels per day of crude oil. Refinery gross margin per throughput barrel was $15.03 for the quarter ended September 30, 2008, compared to $10.45 for the same period in 2007.

"We are pleased with our third quarter financial results. Although Hurricanes Gustav and Ike had a positive impact on margins in the quarter, the actions we have taken to improve and enhance our Four Corners and Yorktown refineries contributed significantly to earnings in the quarter and should continue to do so in future quarters," said Paul Foster, Western's President and Chief Executive Officer.

"In the third quarter at Yorktown, we averaged 84% heavy crude oil processed. We increased the amount of heavy crude oil processed from approximately 66% at the beginning of the quarter, to a sustainable level in excess of 95% throughout the entire month of September. This increased processing of lower cost, heavy crude oil reduced Yorktown's feedstock costs by approximately $16.5 million in the month of September compared to the same period in 2007. At the Four Corners refineries, we renegotiated several crude oil supply agreements and reduced our average cost by approximately $5.75 per barrel, for a savings of approximately $3.6 million per month compared to the same period in 2007. We have also made great strides in the areas of safety and reliability of our refining operations. To date, our total recordable incident rate is approximately one-half what it was last year. As we look ahead, this progress gives us confidence in our ability to sustain the improved level of performance that we are achieving."

Commenting on the fourth quarter, Foster said, "Despite the ongoing economic uncertainty, refining margins remained strong at our four refineries throughout the month of October. In fact, our combined refining gross margin for the month exceeded the third quarter level of $15.03 per barrel. Our Retail and Wholesale operations also posted strong financial results for the month. Looking at the remainder of the quarter, distillate margins look good as a result of steady demand and continued tight supply. While gasoline demand has declined the last couple of months, we believe the significantly lower prices at the pump today could stimulate demand and improve gasoline margins."

As previously announced, Western is working with its financial advisors to evaluate a number of options to further strengthen the Company's balance sheet, including strategic alternatives for specific assets. That process is ongoing, and the Company is pleased with how the process is progressing.

Conference Call Information

A conference call is scheduled for November 6, 2008, at 9:00 a.m. ET to discuss Western's financial results. The call can be accessed at Western's website, www.wnr.com. The call can also be heard by dialing (888) 713-4216, passcode: 29502291. The audio replay will be available through November 20, 2008, by dialing (888) 286-8010, passcode: 17920818.

A copy of this press release, together with the reconciliations of certain non-GAAP financial measures contained herein, can be accessed on the investor relations menu on Western's website, www.wnr.com.

About Western Refining

Western Refining, Inc. is an independent refining and marketing company headquartered in El Paso, Texas. Western has a refinery in El Paso, two refineries in the Four Corners region of northern New Mexico and a refinery in Yorktown, Virginia. Western's asset portfolio also includes refined products terminals in Albuquerque, New Mexico and Flagstaff, Arizona, asphalt terminals in Phoenix, Tucson, Albuquerque and El Paso, retail service stations and convenience stores in Arizona, Colorado and New Mexico, a fleet of crude oil and finished product truck transports, and wholesale petroleum products operations in Arizona, California, Colorado, Nevada, New Mexico, Texas and Utah. More information about the Company is available at www.wnr.com.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements. The forward-looking statements contained herein include statements about our ability to sustain improved refinery performance levels, our ability to process heavy crude oil at Yorktown at 95% of our crude slate, and our expectations for the supply, demand and corresponding margins of distillate and gasoline. These statements are subject to the general risks inherent in our business and reflect our current expectations regarding these matters. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Western's business and operations involve numerous risks and uncertainties, many of which are beyond Western's control, which could result in Western's expectations not being realized or otherwise materially affect Western's financial condition, results of operations and cash flows. Additional information relating to the uncertainties affecting Western's business is contained in our filings with the Securities and Exchange Commission. The forward-looking statements are only as of the date made, and Western does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events.

Consolidated Financial Data
The following tables set forth our summary historical financial
and operating data for the periods indicated below:
                                                                             Three Months Ended                                              Nine Months Ended
                                                                             September 30,                                                   September 30,
                                                                             2008                               2007                         2008                               2007 (1)
                                                                             (In thousands, except per share data)                           (In thousands, except per share data)
Statement of Operations Data:
Net sales                                                                    $       3,165,308                  $       2,232,890            $       9,068,842                  $       4,886,063
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)                   2,790,475                          1,977,070                    8,297,385                          4,133,327
Direct operating expenses (exclusive of depreciation and                             133,206                            125,381                      399,503                            247,129
amortization)
Selling, general and administrative expenses                                         32,449                             27,783                       90,000                             55,589
Maintenance turnaround expense                                                       528                                13,665                       1,738                              13,665
Depreciation and amortization                                                        29,218                             21,896                       82,567                             38,805
Total operating costs and expenses                                                   2,985,876                          2,165,795                    8,871,193                          4,488,515
Operating income                                                                     179,432                            67,095                       197,649                            397,548
Interest income                                                                      478                                6,599                        1,430                              16,774
Interest expense                                                                     (31,153    )                       (22,476    )                 (69,838    )                       (31,974     )
Amortization of loan fees                                                            (1,553     )                       (750       )                 (3,234     )                       (1,164      )
Write-off of unamortized loan fees                                                   --                                 --                           (10,890    )                       --
Loss on early extinguishment of debt                                                 --                                 (774       )                 --                                 (774        )
Gain (loss) from derivative activities                                               6,022                              9,106                        (7,826     )                       (1,453      )
Other income (expense)                                                               422                                193                          1,356                              (778        )
Income before income taxes                                                           153,648                            58,993                       108,647                            378,179
Provision for income taxes                                                           (44,411    )                       (12,371    )                 (31,621    )                       (114,040    )
Net income                                                                   $       109,237                    $       46,622               $       77,026                     $       264,139
Basic earnings per share                                                     $       1.61                       $       0.69                 $       1.14                       $       3.94
Dilutive earnings per share                                                  $       1.61                       $       0.69                 $       1.14                       $       3.91
Weighted average basic shares outstanding                                            67,760                             67,246                       67,696                             67,095
Weighted average dilutive shares outstanding                                         67,760                             67,683                       67,752                             67,566
Cash dividends declared per share                                            $       --                         $       0.06                 $       0.06                       $       0.16
Cash Flow Data:
Net cash provided by (used in):
Operating activities                                                         $       133,859                    $       28,724               $       170,110                    $       256,715
Investing activities                                                                 (39,135    )                       (96,031    )                 (155,702   )                       (1,222,711  )
Financing activities                                                                 (41,118    )                       (130,555   )                 (131,478   )                       969,003
Other Data:
Adjusted EBITDA(2)                                                           $       216,100                    $       118,554              $       276,914                    $       464,561
Capital expenditures                                                                 39,368                             95,665                       156,160                            165,776
Balance Sheet Data (end of period):
Cash and cash equivalents                                                                                                                    $       172,495                    $       266,172
Working capital                                                                                                                                      511,159                            439,760
Total assets                                                                                                                                         3,474,801                          3,316,910
Total debt                                                                                                                                           1,483,750                          1,300,000
Stockholders' equity                                                                                                                                 834,539                            783,149
(1)                                             Includes the results of operations for Giant beginning June1,
                                                2007, the date of the acquisition.
(2)                                             Adjusted EBITDA represents earnings before interest expense,
                                                income tax expense, amortization of loan fees, write-off of
                                                unamortized loan fees, loss on early extinguishment of debt,
                                                depreciation, amortization and maintenance turnaround
                                                expense.However, Adjusted EBITDA is not a recognized measurement
                                                under GAAP. Our management believes that the presentation of
                                                Adjusted EBITDA is useful to investors because it is frequently
                                                used by securities analysts, investors and other interested
                                                parties in the evaluation of companies in our industry.In
                                                addition, our management believes that Adjusted EBITDA is useful
                                                in evaluating our operating performance compared to that of other
                                                companies in our industry because the calculation of Adjusted
                                                EBITDA generally eliminates the effects of financings, income
                                                taxes and the accounting effects of significant turnaround
                                                activities (which many of our competitors capitalize and thereby
                                                exclude from their measures of EBITDA) and acquisitions, items
                                                that may vary for different companies for reasons unrelated to
                                                overall operating performance.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

-- Adjusted EBITDA does not reflect our cash expenditures or future requirements for significant turnaround activities, capital expenditures, or contractual commitments;

-- Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;

-- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and

-- Our calculation of Adjusted EBITDA may differ from the Adjusted EBITDA calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

                                        Three Months Ended                  Nine Months Ended
                                        September 30,                       September 30,
                                        2008               2007             2008               2007
                                        (In thousands)
Net income                              $    109,237       $    46,622      $    77,026        $    264,139
Interest expense                             31,153             22,476           69,838             31,974
Provision for income taxes                   44,411             12,371           31,621             114,040
Amortization of loan fees                    1,553              750              3,234              1,164
Write-off of unamortized loan fees           --                 --               10,890             --
Loss on early extinguishment of debt         --                 774              --                 774
Depreciation and amortization                29,218             21,896           82,567             38,805
Maintenance turnaround expense               528                13,665           1,738              13,665
Adjusted EBITDA                         $    216,100       $    118,554     $    276,914       $    464,561
Refining Segment
                                                                       Three Months Ended September 30,
                                                                       2008                                                              2007
                                                                                                                                                                Legacy
                                                                                              Legacy                                                            Giant
                                                                       El Paso                Giant (2)              Total               El Paso                (1)(2)(3)                  Total
                                                                       (In thousands, except per barrel data)                            (In thousands, except per barrel data)
Net sales (including intersegment sales)                               $     1,708,622        $     1,381,101        $     3,089,723     $     1,233,768        $     868,362              $     2,102,130
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)           1,549,705              1,220,835              2,770,540           1,092,090              791,702                    1,883,792
Direct operating expenses (exclusive of depreciation and                     46,626                 55,652                 102,278             45,176                 61,333                     106,509
amortization)
Selling, general and administrative expenses                                 5,894                  5,372                  11,266              3,101                  2,289                      5,390
Maintenance turnaround expense                                               528                    ----                   528                 820                    12,845                     13,665
Depreciation and amortization                                                6,093                  18,237                 24,330              4,963                  13,774                     18,737
Total operating costs and expenses                                           1,608,846              1,300,096              2,908,942           1,146,150              881,943                    2,028,093
Operating income (loss)                                                $     99,776           $     81,005           $     180,781       $     87,618           $     (13,581  )           $     74,037
Key Operating Statistics:
Total sales volume (bpd) (4)                                                 137,632                118,856                256,488             148,482                108,502                    256,984
Total refinery production (bpd)                                              130,114                99,298                 229,412             130,599                94,626                     225,225
Total refinery throughput (bpd) (5)                                          132,567                98,247                 230,814             132,536                94,516                     227,052
Per barrel of throughput:
Refinery gross margin (6)                                              $     13.03            $     17.73            $     15.03         $     11.62            $     8.82                 $     10.45
Gross profit (6)                                                             12.53                  15.71                  13.89               11.21                  7.23                       9.56
Direct operating expenses (7)                                                3.82                   6.16                   4.82                3.70                   7.05                       5.10
                                                                             Nine Months Ended September 30,
                                                                             2008                                                                2007
                                                                                                                                                                        Legacy
                                                                                                    Legacy                                                              Giant
                                                                             El Paso                Giant (2)              Total                 El Paso                (1)(2)(3)                    Total
                                                                             (In thousands, except per barrel data)                              (In thousands, except per barrel data)
Net sales (including intersegment sales)                                     $     4,919,004        $     3,985,713        $     8,904,717       $     3,539,719        $     1,168,482              $     4,708,201
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)                 4,566,221              3,704,486              8,270,707             2,950,145              1,055,476                    4,005,621
Direct operating expenses (exclusive of depreciation and                           141,965                172,197                314,162               143,524                78,645                       222,169
amortization)
Selling, general and administrative expenses                                       15,367                 13,652                 29,019                9,716                  3,256                        12,972
Maintenance turnaround expense                                                     1,738                  ----                   1,738                 820                    12,845                       13,665
Depreciation and amortization                                                      16,857                 53,056                 69,913                14,506                 20,383                       34,889
Total operating costs and expenses                                                 4,742,148              3,943,391              8,685,539             3,118,711              1,170,605                    4,289,316
Operating income (loss)                                                      $     176,856          $     42,322           $     219,178         $     421,008          $     (2,123     )           $     418,885
Key Operating Statistics:
Total sales volume (bpd) (4)                                                       141,988                121,533                263,521               150,269                48,770                       199,039
Total refinery production (bpd)                                                    129,798                102,810                232,608               132,830                42,141                       174,971
Total refinery throughput (bpd) (5)                                                131,795                102,412                234,207               134,647                42,088                       176,735
Per barrel of throughput:
Refinery gross margin (6)                                                    $     9.77             $     10.02            $     9.88            $     16.04            $     9.84                   $     14.56
Gross profit (6)                                                                   9.30                   8.13                   8.79                  15.64                  8.06                         13.84
Direct operating expenses (7)                                                      3.93                   6.14                   4.90                  3.90                   6.84                         4.60
(1)                                             Includes the results of operations for Giant beginning June1,
                                                2007, the date of the acquisition.
(2)                                             Includes transportation and other related revenues and expenses
                                                not specific to a particular refinery.
(3)                                             Total sales volume, refinery production and refinery throughput
                                                related to the refineries acquired from Giant for the nine months
                                                ended September30, 2007, was calculated by dividing September
                                                2007 volumes by 273days.
(4)                                             Includes sales of refined products sourced from our refinery
                                                production as well as refined products purchased from third
                                                parties.
(5)                                             Total refinery throughput includes crude oil, other feedstocks,
                                                and blendstocks.
(6)                                             Refinery gross margin is a per barrel measurement calculated by
                                                dividing the difference between net sales and cost of products
                                                sold by our refineries' total
                                                throughput volumes for the respective periods presented.We have
                                                experienced gains or losses from derivative activities that are
                                                not taken into account in calculating refinery gross margin.Cost
                                                of products sold does not include any depreciation or
                                                amortization.Refinery gross margin is a non-GAAP performance
                                                measure that we believe is important to investors in evaluating
                                                our refinery performance as a general indication of the amount
                                                above our cost of products that we are able to sell refined
                                                products.Each of the components used in this calculation (net
                                                sales and cost of products sold) can be reconciled directly to our
                                                statement of operations.Our calculation of refinery gross margin
                                                may differ from similar calculations of other companies in our
                                                industry, thereby limiting its usefulness as a comparative measure.
The following tables reconcile gross profit to refinery gross
margin for the periods presented:
                                                                         Three Months Ended September 30,
                                                                         2008                                                                2007
                                                                                                Legacy                                                              Legacy
                                                                         El Paso                Giant                  Total                 El Paso                Giant                Total
                                                                         (In thousands, except per barrel data)                              (In thousands, except per barrel data)
Net sales                                                                $     1,708,622        $     1,381,101        $     3,089,723       $     1,233,768        $     868,362        $     2,102,130
Cost of products sold (exclusive of depreciation and amortization)             1,549,705              1,220,835              2,770,540             1,092,090              791,702              1,883,792
Depreciation and amortization                                                  6,093                  18,237                 24,330                4,963                  13,774               18,737
Gross profit                                                                   152,824                142,029                294,853               136,715                62,886               199,601
Plus depreciation and amortization                                             6,093                  18,237                 24,330                4,963                  13,774               18,737
Refinery gross margin                                                    $     158,917          $     160,266          $     319,183         $     141,678          $     76,660         $     218,338
Refinery gross margin per refinery throughput barrel                     $     13.03            $     17.73            $     15.03           $     11.62            $     8.82           $     10.45
Gross profit per refinery throughput barrel                              $     12.53            $     15.71            $     13.89           $     11.21            $     7.23           $     9.56
                                                                             Nine Months Ended September 30,
                                                                             2008                                                                2007
                                                                                                    Legacy                                                              Legacy
                                                                             El Paso                Giant                  Total                 El Paso                Giant                  Total
                                                                             (In thousands, except per barrel data)                              (In thousands, except per barrel data)
Net sales                                                                    $     4,919,004        $     3,985,713        $     8,904,717       $     3,539,719        $     1,168,482        $     4,708,201
Cost of products sold (exclusive of depreciation and amortization)                 4,566,221              3,704,486              8,270,707             2,950,145              1,055,476              4,005,621
Depreciation and amortization                                                      16,857                 53,056                 69,913                14,506                 20,383                 34,889
Gross profit                                                                       335,926                228,171                564,097               575,068                92,623                 667,691
Plus depreciation and amortization                                                 16,857                 53,056                 69,913                14,506                 20,383                 34,889
Refinery gross margin                                                        $     352,783          $     281,227          $     634,010         $     589,574          $     113,006          $     702,580
Refinery gross margin per refinery throughput barrel                         $     9.77             $     10.02            $     9.88            $     16.04            $     9.84             $     14.56
Gross profit per refinery throughput barrel                                  $     9.30             $     8.13             $     8.79            $     15.64            $     8.06             $     13.84
(7)                                             Refinery direct operating expenses per throughput barrel is
                                                calculated by dividing direct operating expenses by total
                                                throughput volumes for the respective periods presented.Direct
                                                operating expenses do not include any depreciation or amortization.
The following tables set forth our summary refining throughput and
production data for the periods presented below:
All Refineries
                                          Three Months Ended                  Nine Months Ended
                                          September 30,                       September 30,
                                          2008              2007              2008              2007
Key Operating Statistics:
Refinery product yields (bpd)
Gasoline                                  112,733           116,180           117,522           91,957
Diesel and jet fuel                       93,420            88,179            92,268            68,605
Residuum                                  6,255             6,085             5,887             5,974
Other                                     9,579             9,622             10,139            6,255
Liquid products                           221,987           220,066           225,816           172,791
By-products (coke and sulfur)             7,425             5,159             6,792             2,180
Total refinery production (bpd)           229,412           225,225           232,608           174,971
Refinery throughput (bpd)
Sweet crude oil                           142,822           162,810           152,668           131,877
Sour or heavy crude oil                   69,210            49,403            62,016            28,261
Other feedstocks/blendstocks              18,782            14,839            19,523            16,597
Total refinery throughput (bpd)           230,814           227,052           234,207           176,735
El Paso Refinery
                                   Three Months Ended                 Nine Months Ended
                                   September 30,                      September 30,
                                   2008               2007            2008               2007
Key Operating Statistics:
Refinery product yields (bpd)
Gasoline                                64,018             66,235          65,189             69,441
Diesel and jet fuel                     56,226             54,596          54,894             53,797
Residuum                                6,255              6,085           5,887              5,974
Other                                   3,615              3,683           3,828              3,618
Total refinery production (bpd)         130,114            130,599         129,798            132,830
Refinery throughput (bpd)
Sweet crude oil                         104,845            108,230         103,768            108,218
Sour crude oil                          18,487             13,235          17,497             12,344
Other feedstocks/blendstocks            9,235              11,071          10,530             14,085
Total refinery throughput (bpd)         132,567            132,536         131,795            134,647
Total sales volume (bpd)                137,632            148,482         141,988            150,269
Per barrel of throughput:
Refinery gross margin              $    13.03         $    11.62      $    9.77          $    16.04
Direct operating expenses               3.82               3.70            3.93               3.90
Yorktown Refinery
                                                                    Nine Months       Four Months
                                   Three Months Ended               Ended             Ended
                                   September 30,                    September 30,     September 30,
                                   2008              2007           2008              2007 (1)
Key Operating Statistics:
Refinery product yields (bpd)
Gasoline                                29,919            31,717            31,893            31,997
Diesel and jet fuel                     28,525            26,526            28,266            25,925
Residuum                                ----              ----              ----              ----
Other                                   4,940             4,930             5,134             4,895
Liquid products                         63,384            63,173            65,293            62,817
By-products (coke and sulfur)           7,425             5,159             6,792             4,878
Total refinery production (bpd)         70,809            68,332            72,085            67,695
Refinery throughput (bpd)
Sweet crude oil                         9,813             27,504            19,603            26,396
Sour or heavy crude oil                 50,723            36,168            44,519            35,618
Other feedstocks / blendstocks          7,946             3,021             6,353             4,040
Total refinery throughput (bpd)         68,482            66,693            70,475            66,054
Total sales volume (bpd)                79,501            69,281            77,444            70,320
Per barrel of throughput:
Refinery gross margin              $    14.91        $    5.69      $       7.95      $       5.86
Direct operating expenses               4.72              4.49              4.64              4.52
Four Corners Refineries
                                                                                         Nine Months                 Four Months
                                           Three Months Ended                            Ended                       Ended
                                           September 30,                                 September 30,               September 30,
                                           2008                      2007                2008                        2007 (1)
Key Operating Statistics:
Refinery product yields (bpd)
Gasoline                                         18,796                    18,228        20,440                      18,386
Diesel and jet fuel                              8,669                     7,057         9,108                       7,212
Residuum                                         ----                      ----          ----                        ----
Other                                            1,024                     1,009         1,177                       1,012
Total refinery production (bpd)                  28,489                    26,294        30,725                      26,610
Refinery throughput (bpd)
Sweet crude oil                                  28,164                    27,076        29,297                      26,547
Sour crude oil                                   ----                      --            ----                        --
Other feedstocks / blendstocks                   1,601                     747           2,640                       1,578
Total refinery throughput (bpd)                  29,765                    27,823        31,937                      28,125
Total sales volume (bpd)                         39,355                    39,221        44,089                      38,812
Per barrel of throughput:
Refinery gross margin                      $     23.02               $     13.81   $     12.68                 $     16.36
Direct operating expenses                        7.84                      9.39          8.15                        8.76
(1)                     Total sales volume, refinery production and refinery throughput
                        related to the refineries acquired from Giant was calculated by
                        dividing the four months ended September 30, 2007 volumes by 122
                        days.
Retail Segment
                                                                                                                     Nine                     Four
                                                                                                                     Months                   Months
                                                                       Three Months Ended                            Ended                    Ended
                                                                       September 30,                                 September 30,            September 30,
                                                                       2008                    2007                  2008                     2007 (1)
                                                                       (In thousands, except per gallon data)
Statement of Operations Data:
Net sales (including intersegment sales)                               $    245,951            $    197,974          $       674,805          $       266,500
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)          219,047                 172,106                  606,163                  232,158
Direct operating expenses (exclusive of depreciation and                    17,146                  16,239                   49,687                   21,412
amortization)
Selling, general and administrative expenses                                1,271                   1,318                    3,962                    1,823
Depreciation and amortization                                               2,172                   1,537                    6,182                    2,023
Total operating costs and expenses                                          239,636                 191,200                  665,994                  257,416
Operating income                                                       $    6,315              $    6,774            $       8,811            $       9,084
Operating Data:
Fuel gallons sold (in thousands)                                            53,606                  56,203                   158,079                  74,453
Fuel margin per gallon (2)                                             $    0.22               $    0.20             $       0.16             $       0.20
Merchandise sales                                                      $    50,141             $    48,463           $       140,176          $       64,417
Merchandise margin                                                          27.4     %              28.1     %               27.6     %               27.7     %
Operating retail outlets at period end                                                                                       154                      156
                                                                                                              Nine                       Four
                                                                                                              Months                     Months
                                                              Three Months Ended                              Ended                      Ended
                                                              September 30,                                   September 30,              September 30,
                                                              2008                    2007                    2008                       2007 (1)
                                                              (In thousands, except per gallon data)
Net sales:
Fuel sales                                                    $    207,519            $    164,576            $       566,862            $       221,976
Excise taxes included in fuel revenues                             (17,567  )              (21,128  )                 (50,901  )                 (27,901  )
Merchandise sales                                                  50,141                  48,463                     140,176                    64,417
Other sales                                                        5,858                   6,063                      18,668                     8,008
Net sales                                                     $    245,951            $    197,974            $       674,805            $       266,500
Cost of products sold:
Fuel cost of products sold                                    $    195,635            $    153,505            $       540,941            $       207,116
Excise taxes included in fuel cost of products sold                (17,567  )              (21,128  )                 (50,901  )                 (27,901  )
Merchandise cost of products sold                                  36,421                  34,866                     101,468                    46,553
Other cost of products sold                                        4,558                   4,863                      14,655                     6,390
Cost of products sold                                         $    219,047            $    172,106            $       606,163            $       232,158
Fuel margin per gallon (2)                                    $    0.22               $    0.20               $       0.16               $       0.20
(1)                                   Includes the results of operations for Giant beginning June1,
                                      2007, the date of the acquisition.
(2)                                   Fuel margin per gallon is a measurement calculated by dividing the
                                      difference between fuel sales and cost of fuel sales for our
                                      retail segment by the number of gallons sold.
Wholesale Segment
                                                                                                                     Nine                       Four
                                                                                                                     Months                     Months
                                                                       Three Months Ended                            Ended                      Ended
                                                                       September 30,                                 September 30,              September 30,
                                                                       2008                    2007                  2008                       2007 (1)
                                                                       (In thousands, except per gallon data)
Statement of Operations Data:
Net sales (including intersegment sales)                               $    702,755            $    418,189          $       1,892,176          $       563,940
Operating costs and expenses:
Cost of products sold (exclusive of depreciation and amortization)          670,971                 400,509                  1,808,869                  540,388
Direct operating expenses (exclusive of depreciation and                    16,840                  8,711                    50,156                     11,298
amortization)
Selling, general and administrative Expenses                                4,826                   4,111                    14,395                     5,362
Depreciation and amortization                                               1,310                   1,145                    4,074                      1,366
Total operating costs and Expenses                                          693,947                 414,476                  1,877,494                  558,414
Operating income                                                       $    8,808              $    3,713            $       14,682             $       5,526
Operating Data:
Fuel gallons sold (in thousands)                                            187,047                 166,665                  534,334                    222,187
Fuel margin per gallon (2)                                             $    0.09               $    0.07             $       0.08               $       0.08
Lubricant sales                                                        $    43,784             $    37,518           $       123,716            $       49,068
Lubricant margins                                                           15.0     %              9.8      %               12.8       %               9.6      %
                                                                                            Nine                        Four
                                                                                            Months                      Months
                                            Three Months Ended                              Ended                       Ended
                                            September 30,                                   September 30,               September 30,
                                            2008                    2007                    2008                        2007 (1)
                                            (In thousands, except per gallon data)
Net sales:
Fuel sales                                  $    698,226            $    422,960            $     1,883,601             $     571,350
Excise taxes included in fuel sales              (48,433  )              (46,153  )               (147,299   )                (61,213  )
Lubricant sales                                  43,784                  37,518                   123,716                     49,068
Other sales                                      9,178                   3,864                    32,158                      4,735
Net sales                                   $    702,755            $    418,189            $     1,892,176             $     563,940
Cost of products sold:
Fuel cost of products sold                  $    680,470            $    410,855            $     1,841,257             $     554,240
Excise taxes included in fuel sales              (48,433  )              (46,153  )               (147,299   )                (61,213  )
Lubricant cost of products sold                  37,197                  33,850                   107,860                     44,339
Other cost of products sold                      1,737                   1,957                    7,051                       3,022
Cost of products sold                       $    670,971            $    400,509            $     1,808,869             $     540,388
Fuel margin per gallon (2)                  $    0.09               $    0.07               $     0.08                  $     0.08
(1)                       Includes the results of operations for Giant beginning June1,
                          2007, the date of the acquisition.
(2)                       Fuel margin per gallon is a measurement calculated by dividing the
                          difference between fuel sales and cost of fuel sales for our
                          wholesale segment by the number of gallons sold.

SOURCE: Western Refining, Inc.

Western Refining, Inc.
Investor and Analyst Contact:
Mark Cox, 915-534-1400
Media Contact:
Gary Hanson, 915-534-1400