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Western Refining Announces Fourth Quarter and Full Year 2010 Results
2010 Initiatives Position Company to Capitalize on Strong 2011 Inland Refining Margins

EL PASO, Texas, Mar 3, 2011 (GlobeNewswire via COMTEX) --

Western Refining, Inc. (NYSE:WNR) today reported for the fourth quarter of 2010 a net loss, excluding special items, of $3.5 million, or $0.04 per diluted share. This compares to a fourth quarter 2009 net loss, excluding special items, of $51.1 million, or $0.58 per diluted share. On a GAAP basis, the Company reported a fourth quarter 2010 net loss of $7.6 million, or $0.09 per diluted share, compared to the fourth quarter 2009 net loss of $97.5 million, or $1.11 per diluted share. The quarter-over-quarter improvement was due in large part to higher refining margins and continued benefits generated from the Company's cost savings initiatives. A reconciliation of reported earnings excluding special items, for all periods shown, is included in the accompanying financial tables.

For the year ended December 31, 2010, the Company reported a net loss, excluding special items, of $10.1 million, or $0.11 per diluted share. This compares to full-year 2009 net loss, excluding special items, of $44.5 million, or $0.56 per diluted share. The Company reported on a GAAP basis a net loss of $17.0 million, or $0.19 per diluted share, for the full-year 2010, compared to a net loss of $350.6 million, or $4.43 per diluted share, for the full-year 2009.

The Company reported a fourth quarter Adjusted EBITDA, as defined and calculated in the accompanying financial tables, of $63.5 million compared to ($24.7) million for the same quarter in 2009. Adjusted EBITDA for the full-year 2010 was $288.1 million compared to $191.4 million for 2009.

Jeff Stevens, Western's President and Chief Executive Officer, said, "Throughout 2010, we took a number of steps to improve our financial and operating performance. We believe the actions we took, coupled with the strength of refining margins in our markets, position Western well for 2011."

During 2010, the Company pursued several initiatives to enhance and streamline operations, strengthen its balance sheet, and improve liquidity, including:

  --  Completing the consolidation of its two Four Corners refineries into its
      Gallup, New Mexico refinery.
  --  Achieving its goal of $50 million in annual cost savings through a
      number of successful initiatives which management believes are
      sustainable going forward.
  --  Temporarily suspending refining operations at its Yorktown refinery
      while continuing to successfully operate the products terminal and
      storage facility and supplying the region with finished products.
  --  Amending and extending its revolving credit facility to eliminate
      financial maintenance covenants under the revolver, lower the interest
      rate, increase borrowing capacity, and extend the maturity.
  --  Reducing total debt by $47.1 million.


Commenting on current market conditions, Stevens said, "We are currently seeing an extraordinary refining margin environment during a time of year when we traditionally experience seasonally weaker margins. As an inland refiner, the widening Brent/West Texas Intermediate (WTI) spreads, strengthening crude oil contango, and expanding sweet/sour differentials are all contributing to historically high margins. We are encouraged by the very strong refining margins as we start 2011 and are optimistic that Western is well positioned as we move into the higher demand driving season."

Conference Call Information

A conference call is scheduled for March 3, 2011, at 10:00 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 (866) 566-8590, passcode: 25992210. The audio replay will be available through March 10, 2011, and can be accessed by dialing (800) 642-1687, passcode: 25992210.

A copy of this press release can be accessed on the Investor Relations section on Western's website, www.wnr.com.

Non-GAAP Financial Measures

In a number of places in the press release and related tables, we have excluded the impact of the non-cash goodwill and other impairment losses from our results of operations for the fourth quarters of 2010 and 2009 and years ended December 31, 2010 and 2009. We have also excluded fourth quarter and full year 2010 charges related to the temporary suspension of our refining operations at the Yorktown facility. Additionally, we have excluded certain fourth quarter and full year 2009 litigation charges. We have excluded these amounts to better analyze changes in our business from period-to-period as these are non-recurring charges.

About Western Refining

Western Refining, Inc. is an independent refining and marketing company headquartered in El Paso, Texas. Western operates refineries in El Paso, and Gallup, New Mexico. Western's asset portfolio also includes refined products terminals in Albuquerque and Bloomfield, New Mexico and Yorktown, Virginia; asphalt terminals in Phoenix and Tucson, Arizona, 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.

The Western Refining, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7615

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the strengthening refining market, the Company's position therein, the sustainability of certain cost savings, our expectations regarding margins and spreads, and our outlook for 2011. These statements are subject to the general risks inherent in our business. 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 its 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
                                               December 31,         Year Ended December 31,
                                         ------------------------  ------------------------

                                            2010         2009         2010         2009
                                         -----------  -----------  -----------  -----------
                                                (In thousands, except per share data)
  Statement of Operations Data:
  Net sales (1)                          $ 1,866,025  $ 1,959,352  $ 7,965,053  $ 6,807,368
  Operating costs and expenses:
  Cost of products sold (exclusive of
   depreciation and amortization) (1)      1,676,154    1,828,518    7,155,967    5,944,128
  Direct operating expenses (exclusive
   of depreciation and amortization)
   (1)                                       106,601      111,969      444,531      486,164
  Selling, general, and administrative
   expenses                                   22,571       23,794       84,175      109,697
  Goodwill and other impairment losses         9,075       52,788       13,038      352,340
  Maintenance turnaround expense                  --        3,735       23,286        8,088

  Depreciation and amortization               34,327       36,599      138,621      145,981
                                         -----------  -----------  -----------  -----------

  Total operating costs and expenses       1,848,728    2,057,403    7,859,618    7,046,398
                                         -----------  -----------  -----------  -----------
  Other income (expense):
  Operating income (loss)                     17,297     (98,051)      105,435    (239,030)
  Interest income                                124           51          441          248
  Interest expense                          (35,381)     (33,274)    (146,549)    (121,321)
  Amortization of loan fees                  (2,452)      (2,038)     ( 9,739)      (6,870)
  Write-off of unamortized loan fees              --           --           --      (9,047)

  Other income (expense), net                  2,655     (19,778)        7,286     (15,184)
                                         -----------  -----------  -----------  -----------
  Income (loss) before income taxes         (17,757)    (153,090)     (43,126)    (391,204)

  Provision for income taxes                  10,185       55,640       26,077       40,583
                                         -----------  -----------  -----------  -----------

  Net loss                                 $ (7,572)   $ (97,450)   $ (17,049)  $ (350,621)
                                         ===========  ===========  ===========  ===========

  Basic loss per share                      $ (0.09)     $ (1.11)     $ (0.19)     $ (4.43)
  Diluted loss per share                    $ (0.09)     $ (1.11)     $ (0.19)     $ (4.43)
  Dividends declared per common share           $ --         $ --         $ --         $ --
  Weighted average basic shares
   outstanding                                88,305       87,983       88,204       79,163
  Weighted average dilutive shares
   outstanding                                88,305       87,983       88,204       79,163
  Cash Flow Data:
  Net cash provided by (used in):
  Operating activities                      $ 40,975    $ (7,712)    $ 134,456    $ 140,841
  Investing activities                      (17,678)     (21,994)     (73,777)    (115,361)
  Financing activities                      (40,907)       39,557     (75,657)     (30,407)
  Other Data:
  Adjusted EBITDA (2)                       $ 63,478   $ (24,656)    $ 288,107    $ 191,438
  Capital expenditures                        21,354       22,092       78,095      115,854
  Balance Sheet Data (at end of
   period):
  Cash and cash equivalents                                           $ 59,912     $ 74,890
  Working capital                                                      272,750      311,254
  Total assets                                                       2,628,146    2,824,654
  Total debt                                                         1,069,531    1,116,664
  Stockholders' equity                                                 675,593      688,452

(1) Excludes $977.0 million, $644.4 million, $3,294.0 million, and $2,095.0 million of intercompany sales, $974.9 million, $642.4 million, $3,287.5 million, and $2,088.8 million of intercompany cost of products sold, and $2.1 million, $2.0 million, $6.5 million, and $6.2 million of intercompany direct operating expenses for the three and twelve months ended December 31, 2010 and 2009, respectively.

(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, goodwill and other impairment losses, maintenance turnaround expense, and Lower of Cost or Market, or LCM, inventory reserve adjustments. Adjusted EBITDA is not, however, a recognized measurement under United States generally accepted accounting principles, or 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, the accounting effects of significant turnaround activities (that many of our competitors capitalize and thereby exclude from their measures of EBITDA), acquisitions, and other 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, 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. The
      following table reconciles net income (loss) to Adjusted EBITDA for the
      periods presented:



                                            Three Months Ended
                                               December 31,       Year Ended December 31,
                                          ----------------------  -----------------------

                                             2010        2009        2010        2009
                                          ----------  ----------  ----------  -----------
                                                           (In thousands)

  Net loss                                 $ (7,572)  $ (97,450)  $ (17,049)  $ (350,621)
  Interest expense                            35,381      33,274     146,549      121,321
  Provision for income taxes                (10,185)    (55,640)    (26,077)     (40,583)
  Amortization of loan fees                    2,452       2,038       9,739        6,870
  Write-off of unamortized loan fees              --          --          --        9,047
  Depreciation and amortization               34,327      36,599     138,621      145,981
  Maintenance turnaround expense                  --       3,735      23,286        8,088
  Goodwill and other impairment losses         9,075      52,788      13,038      352,340

  Net change in LCM reserve                       --          --          --     (61,005)
                                          ----------  ----------  ----------  -----------

  Adjusted EBITDA                           $ 63,478  $ (24,656)   $ 288,107    $ 191,438
                                          ==========  ==========  ==========  ===========


Refining Segment


                                             Three Months Ended
                                                December 31,         Year Ended December 31,
                                          ------------------------  ------------------------

                                             2010         2009         2010         2009
                                          -----------  -----------  -----------  -----------
                                                (In thousands, except per barrel data)
  Statement of Operations Data:
  Net sales (including intersegment
   sales)                                 $ 1,974,235  $ 1,962,366  $ 8,070,119  $ 6,608,075
  Operating costs and expenses:
  Cost of products sold (exclusive of
   depreciation and amortization) (1)       1,827,958    1,872,567    7,439,826    5,919,499
  Direct operating expenses (exclusive
   of depreciation and amortization)           78,820       87,013      335,869      375,690
  Selling, general, and administrative
   expenses                                     5,947        7,774       20,155       36,021
  Goodwill and other impairment losses          9,075       52,788       12,832      283,500
  Maintenance turnaround expense                   --        3,735       23,286        8,088

  Depreciation and amortization                29,450       31,375      118,661      125,537
                                          -----------  -----------  -----------  -----------

  Total operating costs and expenses        1,951,250    2,055,252    7,950,629    6,748,335
                                          -----------  -----------  -----------  -----------

  Operating income (loss)                    $ 22,985   $ (92,886)    $ 119,490  $ (140,260)
                                          ===========  ===========  ===========  ===========

  Key Operating Statistics:
  Total sales volume (bpd) (2) (7)            224,005      262,498      248,785      258,259
  Total refinery production (bpd) (7)         155,334      197,210      192,997      213,833
  Total refinery throughput (bpd) (3)
   (7)                                        157,044      199,739      194,492      215,815
  Per barrel of throughput:
  Refinery gross margin (1) (4)               $ 10.12       $ 4.89       $ 8.88       $ 8.74
  Gross profit (4)                               8.09         3.18         7.21         7.15
  Direct operating expenses (5)                  5.46         4.74         4.73         4.77

The following table reconciles gross profit to refinery gross margin for the periods presented:



                                                    Three Months Ended
                                                       December 31,         Year Ended December 31,
                                                 ------------------------  ------------------------

                                                    2010         2009         2010         2009
                                                 -----------  -----------  -----------  -----------
                                                       (In thousands, except per barrel data)

  Net sales (including intersegment sales)       $ 1,974,235  $ 1,962,366  $ 8,070,119  $ 6,608,075
  Cost of products sold (exclusive of
   depreciation and amortization)                  1,827,958    1,872,567    7,439,826    5,919,499

  Depreciation and amortization                       29,450       31,375      118,661      125,537
                                                 -----------  -----------  -----------  -----------
  Gross profit                                       116,827       58,424      511,632      563,039

  Plus depreciation and amortization                  29,450       31,375      118,661      125,537
                                                 -----------  -----------  -----------  -----------

  Refinery gross margin                            $ 146,277     $ 89,799    $ 630,293    $ 688,576
                                                 ===========  ===========  ===========  ===========

  Refinery gross margin per refinery throughput
   barrel                                            $ 10.12       $ 4.89       $ 8.88       $ 8.74
                                                 ===========  ===========  ===========  ===========

  Gross profit per refinery throughput barrel         $ 8.09       $ 3.18       $ 7.21       $ 7.15
                                                 ===========  ===========  ===========  ===========

The following tables set forth our summary refining throughput and production data for the periods presented below:



  All Refineries
  -------------------------

                                Three Months
                              Ended December       Year Ended
                                    31,            December 31,
                             -----------------  -----------------

                               2010     2009      2010     2009
                             --------  -------  --------  -------
  Refinery product yields
   (bpd)
  Gasoline                     85,639  109,190   102,927  113,364
  Diesel and jet fuel          60,405   73,090    73,774   80,157
  Residuum                      5,077    5,007     4,899    5,504

  Other                         4,213    7,547     7,174    9,349
                             --------  -------  --------  -------
  Liquid products             155,334  194,834   188,774  208,374

  By-products                      --    2,376     4,223    5,459
                             --------  -------  --------  -------

  Total                       155,334  197,210   192,997  213,833
                             ========  =======  ========  =======

  Refinery throughput (bpd)
  Sweet crude oil             122,664  121,531   131,028  126,328
  Sour or heavy crude oil      20,090   52,475    44,129   65,260
  Other
   feedstocks/blendstocks      14,290   25,733    19,335   24,227
                             --------  -------  --------  -------

  Total                       157,044  199,739   194,492  215,815
                             ========  =======  ========  =======



  Southwest Refining
  -------------------------

                                Three Months
                              Ended December       Year Ended
                                    31,            December 31,
                             -----------------  -----------------

                               2010     2009      2010     2009
                             --------  -------  --------  -------
  Key Operating Statistics:
  Refinery product yields
   (bpd)
  Gasoline                     85,639   79,976    81,953   82,540
  Diesel and jet fuel          60,405   56,256    58,122   57,976
  Residuum                      5,077    5,007     4,899    5,504

  Other                         4,213    4,170     4,033    4,391
                             --------  -------  --------  -------
  Total refinery production
   (bpd)                      155,334  145,409   149,007  150,411
                             ========  =======  ========  =======

  Refinery throughput (bpd)
  Sweet crude oil             122,664  114,081   125,259  124,443
  Sour crude oil               20,090   22,396    14,007   17,601
  Other
   feedstocks/blendstocks      14,290   10,773    12,022   11,038
                             --------  -------  --------  -------
  Total refinery throughput
   (bpd)                      157,044  147,250   151,288  153,082
                             ========  =======  ========  =======

  Total sales volume (bpd)
   (2)                        191,512  193,976   189,613  184,108
  Per barrel of throughput:
  Refinery gross margin (4)    $ 9.41   $ 6.29   $ 10.42   $ 9.88
  Direct operating expenses
   (5)                           4.54     4.99      4.39     4.69




  El Paso Refinery
  ------------------------------

                                     Three Months
                                   Ended December       Year Ended
                                         31,            December 31,
                                  -----------------  -----------------

                                    2010     2009      2010     2009
                                  --------  -------  --------  -------
  Key Operating Statistics:
  Refinery product yields (bpd)
  Gasoline                          69,131   63,450    65,740   65,160
  Diesel and jet fuel               53,072   49,548    51,571   50,524
  Residuum                           5,077    5,007     4,899    5,504

  Other                              3,400    3,222     3,245    3,341
                                  --------  -------  --------  -------
  Total refinery production
   (bpd)                           130,680  121,227   125,455  124,529
                                  ========  =======  ========  =======

  Refinery throughput (bpd)
  Sweet crude oil                  100,708   91,691   104,119   99,680
  Sour crude oil                    20,090   22,396    14,007   17,601

  Other feedstocks/blendstocks      11,108    8,450     9,051    9,184
                                  --------  -------  --------  -------
  Total refinery throughput
   (bpd)                           131,906  122,537   127,177  126,465
                                  ========  =======  ========  =======

  Total sales volume (bpd) (2)     155,834  159,570   153,398  147,854
  Per barrel of throughput:
  Refinery gross margin (4)         $ 8.83   $ 5.82    $ 9.37   $ 9.20
  Direct operating expenses (5)       3.57     3.85      3.50     3.60



  Four Corners Refineries
  ------------------------------

                                     Three Months
                                   Ended December       Year Ended
                                         31,            December 31,
                                  -----------------  -----------------

                                                                2009
                                    2010     2009    2010 (6)    (6)
                                  --------  -------  --------  -------
  Key Operating Statistics:
  Refinery product yields (bpd)
  Gasoline                          16,508   16,526    16,213   17,380
  Diesel and jet fuel                7,333    6,708     6,551    7,452

  Other                                813      948       788    1,050
                                  --------  -------  --------  -------
  Total refinery production
   (bpd)                            24,654   24,182    23,552   25,882
                                  ========  =======  ========  =======

  Refinery throughput (bpd)
  Sweet crude oil                   21,956   22,390    21,140   24,763

  Other feedstocks/blendstocks       3,182    2,323     2,971    1,854
                                  --------  -------  --------  -------
  Total refinery throughput
   (bpd)                            25,138   24,713    24,111   26,617
                                  ========  =======  ========  =======

  Total sales volume (bpd) (2)      35,678   34,406    36,215   36,254
  Per barrel of throughput:
  Refinery gross margin (4)        $ 14.13  $ 12.09   $ 16.82  $ 15.17
  Direct operating expenses (5)       6.91     9.55      6.68     8.79



  Yorktown Refinery
  ------------------------------

                                     Three Months
                                   Ended December       Year Ended
                                         31,            December 31,
                                  -----------------  -----------------

                                    2010     2009      2010     2009
                                  --------  -------  --------  -------
  Key Operating Statistics:
  Refinery product yields (bpd)
  Gasoline                              --   29,214    28,043   30,824
  Diesel and jet fuel                   --   16,834    20,926   22,181

  Other                                 --    3,377     4,199    4,958
                                  --------  -------  --------  -------
  Liquid products                       --   49,425    53,168   57,963

  By-products                           --    2,376     5,647    5,459
                                  --------  -------  --------  -------
  Total refinery production
   (bpd)                                --   51,801    58,815   63,422
                                  ========  =======  ========  =======

  Refinery throughput (bpd)
  Sweet crude oil                       --    7,450     7,713    1,885
  Heavy crude oil                       --   30,079    40,274   47,659

  Other feedstocks/blendstocks          --   14,960     9,777   13,189
                                  --------  -------  --------  -------
  Total refinery throughput
   (bpd)                                --   52,489    57,764   62,733
                                  ========  =======  ========  =======

  Total sales volume (bpd) (2)
   (7)                                  --   68,521    79,112   74,151
  Per barrel of throughput:
  Refinery gross margin (1) (4)       $ --   $ 0.94    $ 3.49   $ 5.97
  Direct operating expenses (5)         --     4.03      5.93     4.95

(1) Cost of products sold includes non-cash LCM recoveries of $61.0 million for 2009 related to valuation of our Yorktown inventories to net realizable market values in 2008. The non-cash adjustment resulted in a corresponding increase of $0.78 in combined refinery gross margins for the year ended December 31, 2009. The non-cash adjustment resulted in a corresponding increase of $2.66 in Yorktown's refinery gross margins for the year ended December 31, 2009.

(2) Includes sales of refined products sourced from our refinery production as well as refined products purchased from third parties.

(3) Total refinery throughput includes crude oil, other feedstocks, and blendstocks.

(4) 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. Economic hedging gains and losses included in the combined refining segment gross margin are not allocated to the individual refineries. 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.

(5) 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, and combined refinery direct operating expenses include transportation and other related expenses not specific to a particular refinery.

(6) Until November 2009, Four Corners refining was comprised of two separate facilities; the Bloomfield refinery and the Gallup refinery. In late November 2009, we consolidated refining operations into the Gallup facility and indefinitely suspended refining operations at the Bloomfield refinery. We calculated total barrels per day sales volume, refinery production, and refinery throughput related to the Four Corners refineries by dividing the year ended December 31, 2009 by 365 days.

(7) In September 2010, we temporarily suspended refining operations at our Yorktown refinery. We calculated Yorktown total barrels per day refinery production and refinery throughput by dividing total volumes by 273 days. Total Yorktown sales volume includes refined product sales, following the temporary suspension through December 31, 2010. We calculated Yorktown's barrels per day sales volume by dividing total refinery sales volume by 365 days.

For our combined refining operating statistics, we calculated total barrels per day sales volume, refinery production, refinery throughput, and refinery products yields by dividing all refineries' operations by 365 days.

Wholesale Segment



                                        Three Months Ended
                                            December 31,       Year Ended December 31,
                                       ---------------------  ------------------------

                                          2010        2009       2010         2009
                                       ----------  ---------  -----------  -----------
                                            (In thousands, except per gallon data)
  Statement of Operations Data:
  Net sales (including intersegment
   sales)                               $ 688,397  $ 477,931  $ 2,470,586  $ 1,664,397
  Operating costs and expenses:
  Cost of products sold (exclusive of
   depreciation and amortization)         666,228    457,191    2,383,931    1,579,910
  Direct operating expenses
   (exclusive of depreciation and
   amortization)                           13,115     11,622       48,222       51,775
  Selling, general and administrative
   expenses                                 3,939      3,932       12,638       16,566
  Goodwill impairment losses                   --         --           --       41,230

  Depreciation and amortization             1,155      1,411        5,069        5,616
                                       ----------  ---------  -----------  -----------

  Total operating costs and expenses      684,437    474,156    2,449,860    1,695,097
                                       ----------  ---------  -----------  -----------

  Operating income (loss)                 $ 3,960    $ 3,775     $ 20,726   $ (30,700)
                                       ==========  =========  ===========  ===========

  Operating Data:
  Fuel gallons sold (in thousands)        274,276    211,693    1,009,786      823,207
  Fuel margin per gallon (1)               $ 0.06     $ 0.07       $ 0.07       $ 0.07
  Lubricant sales                        $ 24,723   $ 24,392    $ 102,200    $ 111,193
  Lubricant margins (2)                     10.7%      11.9%        11.5%         9.6%

The following table reconciles fuel sales and cost of fuel sales to net sales and cost of products sold:


                                     Three Months Ended
                                         December 31,       Year Ended December 31,
                                    ---------------------  ------------------------

                                       2010        2009       2010         2009
                                    ----------  ---------  -----------  -----------
                                         (In thousands, except per gallon data)
  Net sales:
  Fuel sales                         $ 724,946  $ 505,314  $ 2,588,628  $ 1,749,431
  Excise taxes included in fuel
   sales                              (69,172)   (59,192)    (250,550)    (224,771)
  Lubricant sales                       24,723     24,392      102,200      111,193

  Other sales                            7,900      7,417       30,308       28,544
                                    ----------  ---------  -----------  -----------

  Net sales                          $ 688,397  $ 477,931  $ 2,470,586  $ 1,664,397
                                    ==========  =========  ===========  ===========

  Cost of products sold:
  Fuel cost of products sold         $ 709,432  $ 491,321  $ 2,527,758  $ 1,692,177
  Excise taxes included in fuel
   sales                              (69,172)   (59,192)    (250,550)    (224,771)
  Lubricant cost of products sold       22,090     21,496       90,411      100,567

  Other cost of products sold            3,878      3,566       16,312       11,937
                                    ----------  ---------  -----------  -----------

  Cost of products sold              $ 666,228  $ 457,191  $ 2,383,931  $ 1,579,910
                                    ==========  =========  ===========  ===========


  Fuel margin per gallon (1)            $ 0.06     $ 0.07       $ 0.07       $ 0.07
                                    ==========  =========  ===========  ===========

(1) 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. Fuel margin per gallon is a measure frequently used in the petroleum products wholesale industry to measure operating results related to fuel sales.

(2) Lubricant margin is a measurement calculated by dividing the difference between lubricant sales and lubricants cost of products sold by lubricant sales. Lubricant margin is a measure frequently used in the petroleum products wholesale industry to measure operating results related to lubricants sales.

Retail Segment



                                        Three Months Ended     Year Ended December
                                            December 31,               31,
                                       ---------------------  ---------------------

                                          2010        2009       2010       2009
                                       ----------  ---------  ---------  ----------
                                          (In thousands, except per gallon data)
  Statement of Operations Data:
  Net sales (including intersegment
   sales)                               $ 180,439  $ 163,493  $ 718,369   $ 629,938
  Operating costs and expenses:
  Cost of products sold (exclusive of
   depreciation and amortization)         156,860    141,151    619,674     533,481
  Direct operating expenses
   (exclusive of depreciation and
   amortization)                           16,820     15,381     66,997      64,979
  Selling, general and administrative
   expenses                                 1,670      1,454      5,095       6,216
  Goodwill impairment losses                   --         --         --      27,610

  Depreciation and amortization             2,614      2,522     10,245       9,820
                                       ----------  ---------  ---------  ----------

  Total operating costs and expenses      177,964    160,508    702,011     642,106
                                       ----------  ---------  ---------  ----------

  Operating income (loss)                 $ 2,475    $ 2,985   $ 16,358  $ (12,168)
                                       ==========  =========  =========  ==========

  Operating Data:
  Fuel gallons sold (in thousands)         51,472     50,316    207,303     205,532
  Fuel margin per gallon (1)               $ 0.17     $ 0.17     $ 0.19      $ 0.18
  Merchandise sales                      $ 46,884   $ 44,757  $ 191,324   $ 189,096
  Merchandise margin (2)                    28.4%      28.4%      28.5%       28.4%
  Operating retail outlets at period
   end                                                              150         149

The following table reconciles fuel sales and cost of fuel sales to net sales and cost of products sold:


                                     Three Months Ended     Year Ended December
                                         December 31,               31,
                                    ---------------------  --------------------

                                       2010        2009       2010       2009
                                    ----------  ---------  ---------  ---------
                                       (In thousands, except per gallon data)
  Net sales:
  Fuel sales                         $ 147,564  $ 131,491  $ 582,688  $ 489,033
  Excise taxes included in fuel
   revenues                           (19,942)   (18,349)   (79,639)   (71,998)
  Merchandise sales                     46,884     44,757    191,324    189,096

  Other sales                            5,933      5,594     23,996     23,807
                                    ----------  ---------  ---------  ---------

  Net sales                          $ 180,439  $ 163,493  $ 718,369  $ 629,938
                                    ==========  =========  =========  =========

  Cost of products sold:
  Fuel cost of products sold           138,583    123,101    543,916    451,485
  Excise taxes included in fuel
   cost of products sold              (19,942)   (18,349)   (79,639)   (71,998)
  Merchandise cost of products
   sold                                 33,569     32,059    136,855    135,459

  Other cost of products sold            4,650      4,340     18,542     18,535
                                    ----------  ---------  ---------  ---------

  Cost of products sold              $ 156,860  $ 141,151  $ 619,674  $ 533,481
                                    ==========  =========  =========  =========


  Fuel margin per gallon (1)            $ 0.17     $ 0.17     $ 0.19     $ 0.18
                                    ==========  =========  =========  =========

(1) 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. Fuel margin per gallon is a measure frequently used in the retail industry to measure operating results related to fuel sales.

(2) Merchandise margin is a measurement calculated by dividing the difference between merchandise sales and merchandise cost of products sold by merchandise sales. Merchandise margin is a measure frequently used in the convenience store industry to measure operating results related to merchandise sales.

Reconciliations of Special Items

We present below certain additional financial measures that are non-GAAP measures within the meaning of Regulation G under the Securities Exchange Act of 1934.

We present these non-GAAP measures to provide investors with additional information to analyze our performance from period to period. We believe that it is useful for investors to understand our financial performance excluding these special items so that investors can see the operating trends underlying our business. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, the financial information that we report in accordance with GAAP. These non-GAAP measures reflect subjective determinations by management, and may differ from similarly titled non-GAAP measures presented by other companies.



                                                     Three Months Ended
                                                       December 31,        Year Ended December 31,
                                                  -----------------------  -----------------------

                                                     2010        2009         2010        2009
                                                  ----------  -----------  ----------  -----------
                                                       (In thousands, except per share data)


  Reported earnings (losses) per share             $ ( 0.09)    $ ( 1.11)   $ ( 0.19)    $ ( 4.43)
                                                  ==========  ===========  ==========  ===========


  Earnings (loss) before income taxes             $ (17,757)  $ (153,090)  $ (43,126)  $ (391,204)
  Goodwill and other impairment losses (1) (2)         9,075       52,788      13,038      352,340
  Litigation charges (3)                                  --       20,000          --       20,000
  Non-cash LCM inventory adjustment (4)                   --           --          --     (61,005)

  Yorktown suspension costs (5)                          524           --       4,502           --
                                                  ----------  -----------  ----------  -----------
   Earnings (loss) before income taxes excluding
    special items                                    (8,158)     (80,302)    (25,586)     (79,869)

  Recomputed income taxes after special items          4,679       29,189      15,471       35,365
                                                  ----------  -----------  ----------  -----------

  Net income (loss) excluding special items        $ (3,479)   $ (51,113)  $ (10,115)   $ (44,504)
                                                  ==========  ===========  ==========  ===========

  Diluted earnings (loss) per share excluding
   special items                                    $ (0.04)     $ (0.58)    $ (0.11)     $ (0.56)
                                                  ==========  ===========  ==========  ===========

(1) During the second quarter of 2009, we determined that the goodwill in four of our six reporting units was impaired, which resulted in a pre-tax and after-tax goodwill impairment loss of $299.6 million in the quarter. The goodwill impairment loss is included in the refining, retail, and wholesale segments' operating income but is excluded from the operating results presented here in order to make information comparable between periods.

(2) During the fourth quarter of 2009, we indefinitely suspended the refining operations at our Bloomfield facility, which resulted in a pre-tax impairment loss of $52.8 million related to certain of the Bloomfield long-lived and intangible assets. The other impairment losses are included in the refining segment's operating income but are excluded from the operating results presented here in order to make information comparable between periods. During the fourth quarter of 2010, the Company recorded an additional impairment charge of $9.1 million resulting from its fourth quarter 2010 analysis of specific assets that the Company had previously planned to relocate from the Bloomfield facility to the Gallup refinery. Based on the current operations of the Gallup refinery, the Company has determined that one of the three assets set aside for relocation to Gallup was no longer required to attain the Company's desired levels of production. During the third quarter of 2010, the Company permanently closed its product distribution terminal in Flagstaff, Arizona and recorded an impairment charge of $3.8 million.

(3) During the fourth quarter of 2009, we recorded a $20.0 million pre-tax charge from the settlement of a lawsuit with Statoil Marketing & Trading (US) Inc. in which we were the defendant. We made a cash payment of $10.0 million in March 2010, with the remainder to be paid within the next two years. The settlement charge is excluded from the refining segment's operating income but is included in the operating results presented here in order to make information comparable between periods.

(4) During the fourth quarter of 2008, we recorded an adjustment to reduce the carrying value of our inventories to the lower of cost or market, which resulted in a pre-tax increase of cost of products sold of $61.0 million. During the first through the third quarters of 2009, reversing adjustments to value our inventories at the lower of cost or market were recorded, which resulted in a pre-tax decrease in cost of products sold for $61.0 million. This reversal is included in the refining segment's operating income but is excluded from the operating results presented here in order to make that information comparable between periods.

(5) During the third quarter of 2010, we temporarily suspended refining operations at our Yorktown facility. In connection with this change in operations, we recorded one-time termination benefits of $3.0 million and other refinery costs relating to the temporary suspension of operations at Yorktown of $1.5 million in the third and fourth quarters of 2010. These were non-recurring charges.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Western Refining, Inc.

CONTACT: Investor and Analyst Contact:
Jeffrey S. Beyersdorfer
(915) 534-1400
Media Contact:
Gary Hanson
(915) 534-1400