Western Refining Inc. (NYSE:WNR) filed Annual Report for the period ended 2010-12-31.
Western Refining Inc. has a market cap of $1.39 billion; its shares were traded at around $15.7 with and P/S ratio of 0.2.
Highlight of Business Operations:On May 31, 2007, we completed the acquisition of Giant. Under the terms of the merger agreement, we acquired 100% of Giants 14,639,312 outstanding shares for $77.00 per share in cash for a total purchase price of $1,149.2 million, funded primarily through a $1,125.0 million secured term loan. In connection with the acquisition, we borrowed an additional $275.0 million in July 2007, when we paid off and retired Giants 8% and 11% Senior Subordinated Notes. Prior to the acquisition of Giant, we generated substantially all of our revenues from our refining operations in El Paso. With the acquisition of Giant, we also gained a diverse mix of complementary retail and wholesale businesses.
Until November 2009, our operations in Bloomfield included both crude oil refining and product distribution. During the fourth quarter of 2009, we decided to consolidate the refining operations of the Gallup and Bloomfield refineries into a single operation at the Gallup refinery to eliminate certain operating costs while maintaining the capability to process approximately the same volumes of crude that we had previously processed through the two refineries. We continue to supply refined products to the Four Corners area through ongoing operations at the Bloomfield product distribution terminal, and by utilizing a recent pipeline connection and long-term exchange supply agreement. Through the long-term exchange agreement, we supply barrels to the Bloomfield product distribution terminal in exchange for barrels produced at the El Paso refinery. In the latter part of the fourth quarter of 2009, as a result of the indefinite suspension of refining activities at the Bloomfield refinery, we recorded a non-cash asset impairment charge of $52.8 million and incurred approximately $2.2 million in other costs primarily related to employee severance programs for the Bloomfield refinery. During the fourth quarter of 2010, we performed an analysis of specific assets that we had previously planned to relocate from our Bloomfield facility to our Gallup refinery. As a result of this analysis, we recorded an additional non-cash impairment charge of $9.1 million. See Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations Major Influences on Results of Operations Long-lived Asset Impairment Loss.
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