United Refining Company Reports Record Year of Net Income



    WARREN, Pa., Nov. 29 /CNW/ -- United Refining Company, a leading regional
refiner and marketer of petroleum products today reported results for the
Company's fiscal year ended August 31, 2007.
    Net sales for the year ended August 31, 2007 and August 31, 2006 were
$2,405.1 million and $2,437.1 million, respectively, which was a decrease of
$32.0 million or 1.3% from the prior year. Decreases in net sales for the year
ended August 31, 2007 were due primarily to a decrease in wholesale sales
volume primarily as a result of scheduled refinery maintenance turnaround
projects and resulting lower crude throughputs. This decrease in wholesale
sales was partially offset by increased retail sales of $54.5 million.
    Operating income for the year ended August 31, 2007 was $170.3 million,
an increase of $38.2 million or 28.9% from the $132.1 million in operating
income for the year ended August 31, 2006.
    Net income for the year ended August 31, 2007 was $85.7 million, an
increase of $21.7 million or 33.9% from net income of $64.0 million for the
year ended August 31, 2006.
    Earnings before interest, taxes, depreciation, and amortization (EBITDA)
for the fiscal year ended August 31, 2007 increased $41.4 million to $191.7
million from $150.3 million for the fiscal year ended August 31, 2006.
    EBITDA before Last in First Out (LIFO) inventory adjustment for the
fiscal year ended August 31, 2007 decreased $3.3 million to $181.8 million
from $185.1 million for the fiscal year ended August 31, 2006.
    United Refining Company (http://www.urc.com) uses the term EBITDA or
earnings before interest, income taxes, depreciation, amortization and
prepayment premium on debt refinancing, and EBITDA before LIFO inventory
adjustment, which are terms not defined under United States Generally Accepted
Accounting Principles. The Company uses the term EBITDA because it is a widely
accepted financial indicator utilized to analyze and compare companies on the
basis of operating performance and is used to calculate certain debt coverage
ratios included in several of the Company's debt agreements. EBITDA before
LIFO inventory adjustment is used because the inventory adjustment represents
a significant component in calculating EBITDA, especially during a period of
rapidly rising crude oil and product prices. EBITDA before LIFO inventory
adjustment is important because it provides information on the financial
performance of the Company within the control of management. See
reconciliation of EBITDA to Net Income in Footnote (1) in table set forth
below. The Company's method of computation of EBITDA may or may not be
comparable to other similarly titled measures used by other companies.



    
                                                     Year Ended August 31,
                                                   2007                2006
                                                    (dollars in thousands)
    

    
    Net Sales                                   $2,405,063        $2,437,052
    Operating Income                               170,293           132,066
    Net Income                                      85,706            64,014
    Income Tax Expense                              59,680            44,449
    EBITDA (1)                                    $191,703          $150,339
    

    (1) EBITDA Reconciliation


    EBITDA Reconciliation

    
                                                      Year Ended August 31,
                                                     2007              2006
                                                     (dollars in thousands)
    

    
    Net Income                                     $85,706           $64,014
    Interest Expense                                28,273            24,414
    Income Tax Expense                              59,680            44,449
    Depreciation                                    14,419            13,190
    Amortization                                     3,625             4,272
    

    EBITDA                                        $191,703          $150,339

    
    EBITDA -- before LIFO inventory adjustment    $181,793          $185,062
    LIFO Inventory adjustment                        9,910           (34,723)
    EBITDA -- after LIFO inventory adjustment     $191,703          $150,339
    
    United operates a 70,000 bpd refinery in Warren, Pennsylvania. In
addition to its wholesale markets, the Company also operates 371 Kwik Fill(R)
/ Red Apple(R) and Country Fair(R) retail gasoline and convenience stores
located primarily in western New York and western Pennsylvania.
    Certain statements contained in this release are forward looking, such as
statements regarding the Company's plans and strategies or future financial
performance. Although the Company believes that its expectations are based on
reasonable assumptions within the bounds of its knowledge, investors and
prospective investors are cautioned that such statements are only projections
and that actual events or results may differ materially from those expressed
in any such forward-looking statements. In addition, the Company's actual
consolidated quarterly or annual operating results have been affected in the
past, or could be affected in the future, by additional factors, including,
without limitation, general economic, business and market conditions;
environmental, tax and tobacco legislation or regulation; volatility of
gasoline prices, margins and supplies; merchandising margins; customer
traffic, weather conditions; labor costs and the level of capital
expenditures.




For further information:

For further information: James E. Murphy, Chief Financial Officer of 
United Refining Company, +1-814-723-1500 Web Site: http://www.urc.com/

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United Refining Company

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