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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549







FORM 10-Q



(Mark One)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended
February 28, 2011



or



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



For the transition period from
                     to



Commission File No.
001-06198







|     |  |                                                                               
|---- |  | ------------------------------------------------------------------------------
|LOGO |  | UNITED REFINING COMPANY (Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Pennsylvania                                                   |  | 25-1411751                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|15 Bradley Street Warren, Pennsylvania                         |  | 16365                               
|(Address of principal executive office)                        |  | (Zip Code)                          



814-723-1500

(Registrants telephone number, including area code)







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



Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).    Yes   ̈    No   ̈



Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of accelerated filer large accelerated filer and smaller reporting company in
Rule 12b-2 of the Exchange Act.



|                                                                        |  |                             
|----------------------------------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈                                              |  | Accelerated filer   ̈        
|Non-accelerated filer  x  (Do not check if a smaller reporting company) |  | Smaller reporting company   ̈



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).    Yes   ̈    No  x



As of April 14, 2011, there were 100
shares of common stock, par value $.10 per share, of the Registrant outstanding.









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##### Table of Contents

TABLE OF ADDITIONAL REGISTRANTS



|                                                   |  |                                            |  |                                  |            |  |                       |  |              | 
|-------------------------------------------------- |  | ------------------------------------------ |  | -------------------------------- | ---------- |  | --------------------- |  | ------------ | 
|Name                                               |  | State of OtherJurisdiction ofIncorporation |  | IRS EmployerIdentificationNumber |            |  | CommissionFile Number | 
|Kiantone Pipeline Corporation                      |  | New York                                   |  |                                  | 25-1211902 |  |                       |  | 333-35083-01 | 
|Kiantone Pipeline Company                          |  | Pennsylvania                               |  |                                  | 25-1416278 |  |                       |  | 333-35083-03 | 
|United Refining Company of Pennsylvania            |  | Pennsylvania                               |  |                                  | 25-0850960 |  |                       |  | 333-35083-02 | 
|United Jet Center, Inc.                            |  | Delaware                                   |  |                                  | 52-1623169 |  |                       |  | 333-35083-06 | 
|Kwik-Fill Corporation                              |  | Pennsylvania                               |  |                                  | 25-1525543 |  |                       |  | 333-35083-05 | 
|Independent Gas and Oil Company of Rochester, Inc. |  | New York                                   |  |                                  | 06-1217388 |  |                       |  | 333-35083-11 | 
|Bell Oil Corp.                                     |  | Michigan                                   |  |                                  | 38-1884781 |  |                       |  | 333-35083-07 | 
|PPC, Inc.                                          |  | Ohio                                       |  |                                  | 31-0821706 |  |                       |  | 333-35083-08 | 
|Super Test Petroleum, Inc.                         |  | Michigan                                   |  |                                  | 38-1901439 |  |                       |  | 333-35083-09 | 
|Kwik-Fil, Inc.                                     |  | New York                                   |  |                                  | 25-1525615 |  |                       |  | 333-35083-04 | 
|Vulcan Asphalt Refining Corporation                |  | Delaware                                   |  |                                  | 23-2486891 |  |                       |  | 333-35083-10 | 
|Country Fair, Inc.                                 |  | Pennsylvania                               |  |                                  | 25-1149799 |  |                       |  | 333-35083-12 | 



2



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##### Table of Contents

FORM 10-Q  CONTENTS



|            |  |                                                                                                              |    |         |    | 
|----------- |  | ------------------------------------------------------------------------------------------------------------ | -- | ------- | -- | 
|            |  |                                                                                                              |    | PAGE(S) |   
|PART I.     |  | FINANCIAL INFORMATION                                                                                        |    |         | 4  | 
|            |  |                                                                                                             
|Item 1.     |  | Financial Statements.                                                                                        |    |         | 4  | 
|            |  |                                                                                                             
|            |  | Consolidated Balance Sheets  February 28, 2011 (unaudited) and August 31, 2010                              |    |         | 4  | 
|            |  |                                                                                                             
|            |  | Consolidated Statements of Operations  Quarter and Six Months Ended February 
28, 2011 and 2010 (unaudited) |    |         | 5  | 
|            |  |                                                                                                             
|            |  | Consolidated Statements of Cash Flows  Six Months Ended February 28, 2011 and 2010 (unaudited)              |    |         | 6  | 
|            |  |                                                                                                             
|            |  | Notes to Consolidated Financial Statements (unaudited)                                                       |    |         | 7  | 
|            |  |                                                                                                             
|Item 2.     |  | Managements Discussion and Analysis of Financial Condition and Results ofOperations.                        |    |         | 18 | 
|            |  |                                                                                                             
|Item 3.     |  | Quantitative and Qualitative Disclosures about Market Risk.                                                  |    |         | 28 | 
|            |  |                                                                                                             
|Item 4.     |  | Controls and Procedures.                                                                                     |    |         | 28 | 
|            |  |                                                                                                             
|PART II.    |  | OTHER INFORMATION                                                                                            |    |         | 30 | 
|            |  |                                                                                                             
|Item 1.     |  | Legal Proceedings.                                                                                           |    |         | 30 | 
|            |  |                                                                                                             
|Item 1A.    |  | Risk Factors.                                                                                                |    |         | 30 | 
|            |  |                                                                                                             
|Item 2.     |  | Unregistered Sales of Equity Securities and Use of Proceeds.                                                 |    |         | 30 | 
|            |  |                                                                                                             
|Item 3.     |  | Defaults Upon Senior Securities.                                                                             |    |         | 30 | 
|            |  |                                                                                                             
|Item 4.     |  | (Removed and Reserved).                                                                                      |    |         | 30 | 
|            |  |                                                                                                             
|Item 5.     |  | Other Information.                                                                                           |    |         | 30 | 
|            |  |                                                                                                             
|Item 6.     |  | Exhibits.                                                                                                    |    |         | 31 | 
|            | 
|Signatures. |  |                                                                                                              | 32 |        



3



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##### Table of Contents

|PART I. | FINANCIAL INFORMATION
|------- | ---------------------



|Item 1. | Financial Statements.
|------- | ---------------------



UNITED REFINING COMPANY AND SUBSIDIARIES



Consolidated Balance Sheets

(in thousands, except share amounts)



|                                                                                           |  |                             |         |   |                |   |         |  
|------------------------------------------------------------------------------------------ |  | --------------------------- | ------- | - | -------------- | - | ------- | -
|                                                                                           |  | February 28,2011(Unaudited) |         |   | August 31,2010 |  
|Assets                                                                                     |  |                             |         |   |                |   |         |  
|Current:                                                                                   |  |                             |         |   |                |   |         |  
|Cash and cash equivalents                                                                  |  | $                           | 24,587  |   |                | $ | 17,170  |  
|Accounts receivable, net                                                                   |  |                             | 80,232  |   |                |   | 64,192  |  
|Refundable income taxes                                                                    |  |                             |        |   |                |   | 36,390  |  
|Inventories                                                                                |  |                             | 181,052 |   |                |   | 206,838 |  
|Prepaid expenses and other assets                                                          |  |                             | 35,270  |   |                |   | 27,941  |  
|Amounts due from affiliated companies, net                                                 |  |                             | 3,614   |   |                |   | 2,972   |  
|                                                                                           |  |                             |         |   |                |   |         |  
|Total current assets                                                                       |  |                             | 324,755 |   |                |   | 355,503 |  
|Property, plant and equipment, net                                                         |  |                             | 270,920 |   |                |   | 261,775 |  
|Deferred financing costs, net                                                              |  |                             | 1,889   |   |                |   | 2,114   |  
|Goodwill                                                                                   |  |                             | 1,349   |   |                |   | 1,349   |  
|Tradename                                                                                  |  |                             | 10,500  |   |                |   | 10,500  |  
|Amortizable intangible assets, net                                                         |  |                             | 1,323   |   |                |   | 1,376   |  
|Deferred turnaround costs and other assets, net                                            |  |                             | 7,767   |   |                |   | 3,894   |  
|Deferred income taxes                                                                      |  |                             |        |   |                |   | 592     |  
|                                                                                           |  |                             |         |   |                |   |         |  
|                                                                                           |  | $                           | 618,503 |   |                | $ | 637,103 |  
|                                                                                           |  |                             |         |   |                |   |         |  
|                                                                                           |  |                            
|Liabilities and Stockholders Equity                                                       |  |                             |         |   |                |   |         |  
|Current:                                                                                   |  |                             |         |   |                |   |         |  
|Revolving credit facility                                                                  |  | $                           | 75,300  |   |                | $ | 83,000  |  
|Current installments of long-term debt                                                     |  |                             | 1,756   |   |                |   | 1,888   |  
|Accounts payable                                                                           |  |                             | 56,963  |   |                |   | 65,620  |  
|Accrued liabilities                                                                        |  |                             | 14,277  |   |                |   | 15,569  |  
|Income taxes payable                                                                       |  |                             | 64      |   |                |   | 552     |  
|Sales, use and fuel taxes payable                                                          |  |                             | 12,663  |   |                |   | 18,455  |  
|Deferred income taxes                                                                      |  |                             | 5,997   |   |                |   | 5,997   |  
|                                                                                           |  |                             |         |   |                |   |         |  
|Total current liabilities                                                                  |  |                             | 167,020 |   |                |   | 191,081 |  
|Long term debt: less current installments                                                  |  |                             | 327,322 |   |                |   | 328,165 |  
|Deferred income taxes                                                                      |  |                             | 875     |   |                |   |        |  
|Deferred retirement benefits                                                               |  |                             | 89,517  |   |                |   | 91,620  |  
|                                                                                           |  |                             |         |   |                |   |         |  
|Total liabilities                                                                          |  |                             | 584,734 |   |                |   | 610,866 |  
|                                                                                           |  |                             |         |   |                |   |         |  
|                                                                                           |  |                            
|Commitments and contingencies                                                              |  |                             |         |   |                |   |         |  
|Stockholders equity:                                                                      |  |                             |         |   |                |   |         |  
|Common stock; $.10 par value per share  shares authorized 100; issued and
outstanding 100 |  |                             |        |   |                |   |        |  
|Additional paid-in capital                                                                 |  |                             | 22,500  |   |                |   | 22,500  |  
|Retained earnings                                                                          |  |                             | 10,403  |   |                |   | 18,231  |  
|Accumulated other comprehensive loss                                                       |  |                             | (14,227 | ) |                |   | (14,494 | )
|                                                                                           |  |                             |         |   |                |   |         |  
|Controlling interest equity                                                                |  |                             | 18,676  |   |                |   | 26,237  |  
|Non-controlling interest                                                                   |  |                             | 15,093  |   |                |   |        |  
|                                                                                           |  |                             |         |   |                |   |         |  
|Total stockholders equity                                                                 |  |                             | 33,769  |   |                |   | 26,237  |  
|                                                                                           |  |                             |         |   |                |   |         |  
|                                                                                           |  | $                           | 618,503 |   |                | $ | 637,103 |  
|                                                                                           |  |                             |         |   |                |   |         |  



See accompanying notes to
consolidated financial statements.



4



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UNITED REFINING COMPANY AND SUBSIDIARIES



Consolidated Statements of
Operations  (Unaudited)

(in thousands)



|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|----------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---------------------------- | - | ------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                        |  | Three Months EndedFebruary, 28 |         |   | Six Months EndedFebruary 28, |  
|                                                                        |  | 2011                           |         |   | 2010                         |   |         | 2011 |  |   | 2010      |  
|Net sales                                                               |  | $                              | 692,279 |   |                              | $ | 594,748 |      |  | $ | 1,311,426 |   |  | $ | 1,215,674 |  
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Costs and expenses:                                                     |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Costs of goods sold (exclusive of depreciation and amortization)        |  |                                | 639,841 |   |                              |   | 585,622 |      |  |   | 1,220,678 |   |  |   | 1,187,962 |  
|Selling, general and administrative expenses                            |  |                                | 36,819  |   |                              |   | 37,684  |      |  |   | 72,605    |   |  |   | 74,443    |  
|Depreciation and amortization expenses                                  |  |                                | 5,351   |   |                              |   | 5,487   |      |  |   | 10,987    |   |  |   | 10,968    |  
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|                                                                        |  |                                | 682,011 |   |                              |   | 628,793 |      |  |   | 1,304,270 |   |  |   | 1,273,373 |  
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Operating income (loss)                                                 |  |                                | 10,268  |   |                              |   | (34,045 | )    |  |   | 7,156     |   |  |   | (57,699   | )
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Other income (expense):                                                 |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Interest expense, net                                                   |  |                                | (8,895  | ) |                              |   | (8,712  | )    |  |   | (17,809   | ) |  |   | (17,179   | )
|Other, net                                                              |  |                                | (810    | ) |                              |   | (206    | )    |  |   | (1,391    | ) |  |   | (812      | )
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|                                                                        |  |                                | (9,705  | ) |                              |   | (8,918  | )    |  |   | (19,200   | ) |  |   | (17,991   | )
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Income (loss) before income tax expense (benefit)                       |  |                                | 563     |   |                              |   | (42,963 | )    |  |   | (12,044   | ) |  |   | (75,690   | )
|Income tax expense (benefit)                                            |  |                                | 209     |   |                              |   | (17,618 | )    |  |   | (4,309    | ) |  |   | (31,035   | )
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Net income (loss)                                                       |  |                                | 354     |   |                              |   | (25,345 | )    |  |   | (7,735    | ) |  |   | (44,655   | )
|Less net income attributable to non-controlling interest                |  |                                | 93      |   |                              |   |        |      |  |   | 93        |   |  |   |          |  
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Net income (loss) attributable to United Refining Companys Stockholder |  | $                              | 261     |   |                              | $ | (25,345 | )    |  | $ | (7,828    | ) |  | $ | (44,655   | )
|                                                                        |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  





See accompanying notes to consolidated financial statements.



5



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UNITED REFINING COMPANY AND SUBSIDIARIES



Consolidated Statements of Cash
Flows  (Unaudited)

(in thousands)



|                                                                                          |  |                              |         |   |      |   |         |  
|----------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                          |  | Six Months EndedFebruary 28, |        
|                                                                                          |  | 2011                         |         |   | 2010 |  
|Cash flows from operating activities:                                                     |  |                              |         |   |      |   |         |  
|Net loss                                                                                  |  | $                            | (7,828  | ) |      | $ | (44,655 | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                              |         |   |      |   |         |  
|Depreciation and amortization                                                             |  |                              | 11,227  |   |      |   | 11,135  |  
|Deferred income taxes                                                                     |  |                              | 1,282   |   |      |   | (7,303  | )
|Loss on asset dispositions                                                                |  |                              | 238     |   |      |   | 265     |  
|Cash provided by (used in) working capital items                                          |  |                              | 21,936  |   |      |   | (61,547 | )
|Net income attributable to non-controlling interest                                       |  |                              | 93      |   |      |   |        |  
|Other, net                                                                                |  |                              | (4      | ) |      |   | (1      | )
|Change in operating assets and liabilities:                                               |  |                              |         |   |      |   |         |  
|Deferred retirement benefits                                                              |  |                              | (1,649  | ) |      |   | 6,721   |  
|Other noncurrent liabilities                                                              |  |                              |        |   |      |   | (4      | )
|                                                                                          |  |                              |         |   |      |   |         |  
|Total adjustments                                                                         |  |                              | 33,123  |   |      |   | (50,734 | )
|                                                                                          |  |                              |         |   |      |   |         |  
|Net cash provided by (used in) operating activities                                       |  |                              | 25,295  |   |      |   | (95,389 | )
|                                                                                          |  |                              |         |   |      |   |         |  
|Cash flows from investing activities:                                                     |  |                              |         |   |      |   |         |  
|Additions to property, plant and equipment                                                |  |                              | (18,183 | ) |      |   | (13,026 | )
|Additions to deferred turnaround costs                                                    |  |                              | (6,029  | ) |      |   | (275    | )
|Proceeds from asset dispositions                                                          |  |                              | 57      |   |      |   | 5       |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Net cash used in investing activities                                                     |  |                              | (24,155 | ) |      |   | (13,296 | )
|                                                                                          |  |                              |         |   |      |   |         |  
|Cash flows from financing activities:                                                     |  |                              |         |   |      |   |         |  
|Net (reductions) borrowings on revolving credit facilities                                |  |                              | (7,700  | ) |      |   | 98,000  |  
|Proceeds from issuance of common stock of non-controlling interest                        |  |                              | 15,000  |   |      |   |        |  
|Principal reductions of long term debt                                                    |  |                              | (599    | ) |      |   | (900    | )
|Deferred financing costs                                                                  |  |                              | (424    | ) |      |   |        |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Net cash provided by financing activities                                                 |  |                              | 6,277   |   |      |   | 97,100  |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Net increase (decrease) in cash and cash equivalents                                      |  |                              | 7,417   |   |      |   | (11,585 | )
|Cash and cash equivalents, beginning of year                                              |  |                              | 17,170  |   |      |   | 31,062  |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Cash and cash equivalents, end of period                                                  |  | $                            | 24,587  |   |      | $ | 19,477  |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Cash provided by (used in) working capital items:                                         |  |                              |         |   |      |   |         |  
|Accounts receivable, net                                                                  |  | $                            | (16,040 | ) |      | $ | 12      |  
|Refundable income taxes                                                                   |  |                              | 36,390  |   |      |   |        |  
|Inventories                                                                               |  |                              | 25,786  |   |      |   | 38,516  |  
|Prepaid expenses and other assets                                                         |  |                              | (7,329  | ) |      |   | (48,288 | )
|Amounts due from affiliated companies, net                                                |  |                              | (642    | ) |      |   | 964     |  
|Accounts payable                                                                          |  |                              | (8,657  | ) |      |   | (38,326 | )
|Accrued liabilities                                                                       |  |                              | (1,292  | ) |      |   | (2,907  | )
|Income taxes payable                                                                      |  |                              | (488    | ) |      |   | (5,149  | )
|Sales, use and fuel taxes payable                                                         |  |                              | (5,792  | ) |      |   | (6,369  | )
|                                                                                          |  |                              |         |   |      |   |         |  
|Total change                                                                              |  | $                            | 21,936  |   |      | $ | (61,547 | )
|                                                                                          |  |                              |         |   |      |   |         |  
|Cash paid during the period for:                                                          |  |                              |         |   |      |   |         |  
|Interest                                                                                  |  | $                            | 18,225  |   |      | $ | 17,488  |  
|Income taxes                                                                              |  | $                            | 995     |   |      | $ | 5,531   |  
|                                                                                          |  |                              |         |   |      |   |         |  
|Non-cash investing activities:                                                            |  |                              |         |   |      |   |         |  
|Property additions & capital leases                                                       |  | $                            | 34      |   |      | $ | 805     |  
|                                                                                          |  |                              |         |   |      |   |         |  



See accompanying notes to
consolidated financial statements.



6



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##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(Unaudited)



|1. | Description of Business and Basis of Presentation
|-- | -------------------------------------------------



The consolidated financial statements
include the accounts of United Refining Company and its subsidiaries, United Refining Company of Pennsylvania and its subsidiaries, Kiantone Pipeline Corporation (collectively, the Company), and United Refining Asphalt, Inc.
(URA) a variable interest entity that was created in January 2011 for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation.



A variable interest entity (VIE)
is defined as an entity that either has investor voting rights that are not proportional to their economic interests or has equity investors that do not provide sufficient financial resources for the entity to support its activities. A VIE is
required to be consolidated by a company if that company is the primary beneficiary. The primary beneficiary of the VIE is the company that controls the VIEs activities and is subject to a majority of the risk of loss from the VIEs
activities or, if no company is subject to a majority of such risk, the company that is entitled to receive a majority of the VIEs residual returns.



The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern
Pennsylvania. Operations are organized into two business segments: wholesale and retail.



The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying
petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers. The retail segment sells petroleum products under the Kwik Fill®, Citgo® and Keystone® brand names at a network of Company-operated retail units and convenience and grocery items through Company-owned
gasoline stations and convenience stores under the Red Apple Food Mart® and Country Fair® brand names.



The Company is a wholly-owned subsidiary of United Refining, Inc., a wholly-owned subsidiary of United Acquisition Corp.,
which in turn is a wholly-owned subsidiary of Red Apple Group, Inc. (the Parent).



The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by
accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three and six months ended February 28, 2011 are not necessarily indicative of the results that may be expected for the year ending August 31, 2011. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Companys Form 10-K for the fiscal year ended August 31, 2010.



Certain items have been reclassified to conform to current period presentation.



|2. | Inventories
|-- | -----------



Inventories are stated at the lower of cost or market, with cost being determined under the Last-in, First-out (LIFO)
method for crude oil and petroleum product inventories and the First-in, First-out (FIFO) method for merchandise. Supply inventories are stated at either lower of cost or market or replacement cost and include various parts for the refinery
operations.



7



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##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



Inventories consist of the following:



|                                |  |                  |         |   |                |   |         | 
|------------------------------- |  | ---------------- | ------- | - | -------------- | - | ------- | 
|                                |  | February 28,2011 |         |   | August 31,2010 |  
|                                |  | (in thousands)   |        
|Crude Oil                       |  | $                | 37,040  |   |                | $ | 78,165  | 
|Petroleum Products              |  |                  | 76,135  |   |                |   | 86,993  | 
|Lower of cost or market reserve |  |                  | (1,000  | ) |                |   |        | 
|                                |  |                  |         |   |                |   |         | 
|Total @ LIFO                    |  |                  | 112,175 |   |                |   | 165,158 | 
|                                |  |                  |         |   |                |   |         | 
|Asphalt - URA                   |  |                  | 29,849  |   |                |   |        | 
|Merchandise                     |  |                  | 18,449  |   |                |   | 20,403  | 
|Supplies                        |  |                  | 20,579  |   |                |   | 21,277  | 
|                                |  |                  |         |   |                |   |         | 
|Total @ FIFO                    |  |                  | 68,877  |   |                |   | 41,680  | 
|                                |  |                  |         |   |                |   |         | 
|Total Inventory                 |  | $                | 181,052 |   |                | $ | 206,838 | 
|                                |  |                  |         |   |                |   |         | 



Inventories at
the lower of last-in, first-out (LIFO) cost or market reflect a market valuation reserve of $1,000,000 and $0 at February 28, 2011 and August 31, 2010, respectively. As of February 28, 2011 and August 31, 2010, the
replacement cost of LIFO inventories exceeded their LIFO carrying values by approximately $64,830,000 and $50,265,000, respectively.



8



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##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



|3. | Subsidiary Guarantors
|-- | ---------------------



All the Companys wholly-owned subsidiaries fully and unconditionally guarantee, on a joint and several basis, the
Companys $350,000,000 Senior Note Indenture due. There are no restrictions within the consolidated group on the ability of the Company or any of its subsidiaries to obtain loans from or pay dividends to other members of the consolidated group.
See also Footnote 7, Subsequent Events, for information on the Companys tender offer, consent solicitation and subsequent redemption of these Senior Notes due 2012. Financial information of the Companys wholly-owned subsidiary guarantors
is as follows:



Condensed Consolidating Balance
Sheets

(in thousands)



|                                          |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|----------------------------------------- |  | --------------------- | ------- | - | ---------- | - | ------- | ------------ |  | - | ------------------------------------ | - |  | -------------------------- | ------- |  | ------------ | - | ------ | --------------------------------- |  | - | ------- | - |  | - | ------- | 
|                                          |  | February 28, 2011     |        
|                                          |  | UnitedRefiningCompany |         |   | Guarantors |   |         | Eliminations |  |   | United RefiningCompany &Subsidiaries |   |  | UnitedRefiningAsphalt, Inc |         |  | Eliminations |   |        | UnitedRefiningCompanyConsolidated | 
|Assets                                    |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Current:                                  |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Cash and cash equivalents                 |  | $                     | 13,350  |   |            | $ | 11,006  |              |  | $ |                                     |   |  | $                          | 24,356  |  |              | $ | 231    |                                   |  | $ |        |   |  | $ | 24,587  | 
|Accounts receivable, net                  |  |                       | 44,302  |   |            |   | 35,930  |              |  |   |                                     |   |  |                            | 80,232  |  |              |   |       |                                   |  |   |        |   |  |   | 80,232  | 
|Inventories                               |  |                       | 122,936 |   |            |   | 28,267  |              |  |   |                                     |   |  |                            | 151,203 |  |              |   | 29,849 |                                   |  |   |        |   |  |   | 181,052 | 
|Prepaid expenses and other assets         |  |                       | 54,889  |   |            |   | 10,177  |              |  |   |                                     |   |  |                            | 65,066  |  |              |   | 53     |                                   |  |   | (29,849 | ) |  |   | 35,270  | 
|Amounts due from affiliated companies     |  |                       | 3,455   |   |            |   | 159     |              |  |   |                                     |   |  |                            | 3,614   |  |              |   |       |                                   |  |   |        |   |  |   | 3,614   | 
|Intercompany                              |  |                       | 135,057 |   |            |   | 16,488  |              |  |   | (151,545                             | ) |  |                            |        |  |              |   |       |                                   |  |   |        |   |  |   |        | 
|                                          |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Total current assets                      |  |                       | 373,989 |   |            |   | 102,027 |              |  |   | (151,545                             | ) |  |                            | 324,471 |  |              |   | 30,133 |                                   |  |   | (29,849 | ) |  |   | 324,755 | 
|Property, plant and equipment, net        |  |                       | 195,496 |   |            |   | 75,424  |              |  |   |                                     |   |  |                            | 270,920 |  |              |   |       |                                   |  |   |        |   |  |   | 270,920 | 
|Deferred financing costs, net             |  |                       | 1,548   |   |            |   |        |              |  |   |                                     |   |  |                            | 1,548   |  |              |   | 341    |                                   |  |   |        |   |  |   | 1,889   | 
|Goodwill and other non-amortizable assets |  |                       |        |   |            |   | 11,849  |              |  |   |                                     |   |  |                            | 11,849  |  |              |   |       |                                   |  |   |        |   |  |   | 11,849  | 
|Amortizable intangible assets, net        |  |                       |        |   |            |   | 1,323   |              |  |   |                                     |   |  |                            | 1,323   |  |              |   |       |                                   |  |   |        |   |  |   | 1,323   | 
|Deferred turnaround costs & other assets  |  |                       | 7,229   |   |            |   | 538     |              |  |   |                                     |   |  |                            | 7,767   |  |              |   |       |                                   |  |   |        |   |  |   | 7,767   | 
|Investment in subsidiaries                |  |                       | 2,811   |   |            |   |        |              |  |   | (2,811                               | ) |  |                            |        |  |              |   |       |                                   |  |   |        |   |  |   |        | 
|                                          |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|                                          |  | $                     | 581,073 |   |            | $ | 191,161 |              |  | $ | (154,356                             | ) |  | $                          | 617,878 |  |              | $ | 30,474 |                                   |  | $ | (29,849 | ) |  | $ | 618,503 | 
|                                          |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Liabilities and Stockholders Equity      |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Current:                                  |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Revolving credit facility                 |  | $                     | 60,000  |   |            | $ |        |              |  | $ |                                     |   |  | $                          | 60,000  |  |              | $ | 15,300 |                                   |  | $ |        |   |  | $ | 75,300  | 
|Current installments of long-term debt    |  |                       | 1,360   |   |            |   | 396     |              |  |   |                                     |   |  |                            | 1,756   |  |              |   |       |                                   |  |   |        |   |  |   | 1,756   | 
|Accounts payable                          |  |                       | 39,475  |   |            |   | 17,488  |              |  |   |                                     |   |  |                            | 56,963  |  |              |   |       |                                   |  |   |        |   |  |   | 56,963  | 
|Accrued liabilities                       |  |                       | 8,801   |   |            |   | 5,459   |              |  |   |                                     |   |  |                            | 14,260  |  |              |   | 17     |                                   |  |   |        |   |  |   | 14,277  | 
|Income taxes payable                      |  |                       |        |   |            |   |        |              |  |   |                                     |   |  |                            |        |  |              |   | 64     |                                   |  |   |        |   |  |   | 64      | 
|Sales, use and fuel taxes payable         |  |                       | 9,265   |   |            |   | 3,398   |              |  |   |                                     |   |  |                            | 12,663  |  |              |   |       |                                   |  |   |        |   |  |   | 12,663  | 
|Deferred income taxes                     |  |                       | 7,049   |   |            |   | (1,052  | )            |  |   |                                     |   |  |                            | 5,997   |  |              |   |       |                                   |  |   |        |   |  |   | 5,997   | 
|Deferred revenue                          |  |                       | 29,849  |   |            |   |        |              |  |   |                                     |   |  |                            | 29,849  |  |              |   |       |                                   |  |   | (29,849 | ) |  |   |        | 
|Intercompany                              |  |                       |        |   |            |   | 151,545 |              |  |   | (151,545                             | ) |  |                            |        |  |              |   |       |                                   |  |   |        |   |  |   |        | 
|                                          |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Total current liabilities                 |  |                       | 155,799 |   |            |   | 177,234 |              |  |   | (151,545                             | ) |  |                            | 181,488 |  |              |   | 15,381 |                                   |  |   | (29,849 | ) |  |   | 167,020 | 
|Long term debt: less current installments |  |                       | 325,587 |   |            |   | 1,735   |              |  |   |                                     |   |  |                            | 327,322 |  |              |   |       |                                   |  |   |        |   |  |   | 327,322 | 
|Deferred retirement benefits              |  |                       | 86,930  |   |            |   | 2,587   |              |  |   |                                     |   |  |                            | 89,517  |  |              |   |       |                                   |  |   |        |   |  |   | 89,517  | 
|Deferred income taxes                     |  |                       | (5,919  | ) |            |   | 6,794   |              |  |   |                                     |   |  |                            | 875     |  |              |   |       |                                   |  |   |        |   |  |   | 875     | 
|                                          |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 
|Total liabilities                         |  |                       | 562,397 |   |            |   | 188,350 |              |  |   | (151,545                             | ) |  |                            | 599,202 |  |              |   | 15,381 |                                   |  |   | (29,849 | ) |  |   | 584,734 | 
|                                          |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |  |              |   |        |                                   |  |   |         |   |  |   |         | 



9



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##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |        |                                   |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------------------------ |  | --------------------- | ------- | - | ---------- | - | ------- | ------------ |  | - | ------------------------------------ | - |  | -------------------------- | ------- | - | ------------ | - | ------ | --------------------------------- |  | - | ------- | - |  | - | ------- | -
|                                                                                           |  | February 28, 2011     |        
|                                                                                           |  | UnitedRefiningCompany |         |   | Guarantors |   |         | Eliminations |  |   | United RefiningCompany &Subsidiaries |   |  | UnitedRefiningAsphalt, Inc |         |   | Eliminations |   |        | UnitedRefiningCompanyConsolidated | 
|Commitment and contingencies                                                               |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |        |                                   |  |   |         |   |  |   |         |  
|Stockholders equity                                                                       |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |        |                                   |  |   |         |   |  |   |         |  
|Common stock, $.10 par value per share  shares authorized 100; issued and outstanding 100 |  |                       |        |   |            |   | 18      |              |  |   | (18                                  | ) |  |                            |        |   |              |   |       |                                   |  |   |        |   |  |   |        |  
|Additional paid-in capital                                                                 |  |                       | 22,500  |   |            |   | 10,651  |              |  |   | (10,651                              | ) |  |                            | 22,500  |   |              |   | 15,000 |                                   |  |   | (15,000 | ) |  |   | 22,500  |  
|Retained earnings                                                                          |  |                       | 10,403  |   |            |   | (6,663  | )            |  |   | 6,663                                |   |  |                            | 10,403  |   |              |   | 93     |                                   |  |   | (93     | ) |  |   | 10,403  |  
|Accumulated other comprehensive loss                                                       |  |                       | (14,227 | ) |            |   | (1,195  | )            |  |   | 1,195                                |   |  |                            | (14,227 | ) |              |   |       |                                   |  |   |        |   |  |   | (14,227 | )
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |        |                                   |  |   |         |   |  |   |         |  
|Controlling interest equity                                                                |  |                       | 18,676  |   |            |   | 2,811   |              |  |   | (2,811                               | ) |  |                            | 18,676  |   |              |   | 15,093 |                                   |  |   | (15,093 | ) |  |   | 18,676  |  
|Non-controlling interest                                                                   |  |                       |        |   |            |   |        |              |  |   |                                     |   |  |                            |        |   |              |   |       |                                   |  |   | 15,093  |   |  |   | 15,093  |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |        |                                   |  |   |         |   |  |   |         |  
|Total stockholders equity                                                                 |  |                       | 18,676  |   |            |   | 2,811   |              |  |   | (2,811                               | ) |  |                            | 18,676  |   |              |   | 15,093 |                                   |  |   |        |   |  |   | 33,769  |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |        |                                   |  |   |         |   |  |   |         |  
|                                                                                           |  | $                     | 581,073 |   |            | $ | 191,161 |              |  | $ | (154,356                             | ) |  | $                          | 617,878 |   |              | $ | 30,474 |                                   |  | $ | (29,849 | ) |  | $ | 618,503 |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |        |                                   |  |   |         |   |  |   |         |  



10



---

##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



Condensed Consolidating Balance Sheets

(in thousands)



|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|------------------------------------------------------------------------------------------ |  | --------------------- | ------- | - | ---------- | - | ------- | ------------ |  | - | ------------------------------------ | - |  | -------------------------- | ------- | - | ------------ | - | - | --------------------------------- |  | - | - |  |  | - | ------- | -
|                                                                                           |  | August 31, 2010       |        
|                                                                                           |  | UnitedRefiningCompany |         |   | Guarantors |   |         | Eliminations |  |   | United RefiningCompany &Subsidiaries |   |  | UnitedRefiningAsphalt, Inc |         |   | Eliminations |   |   | UnitedRefiningCompanyConsolidated | 
|Assets                                                                                     |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Current:                                                                                   |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Cash and cash equivalents                                                                  |  | $                     | 7,765   |   |            | $ | 9,405   |              |  | $ |                                     |   |  | $                          | 17,170  |   |              | $ |  |                                   |  | $ |  |  |  | $ | 17,170  |  
|Accounts receivable, net                                                                   |  |                       | 30,266  |   |            |   | 33,926  |              |  |   |                                     |   |  |                            | 64,192  |   |              |   |  |                                   |  |   |  |  |  |   | 64,192  |  
|Refundable income taxes                                                                    |  |                       | 37,921  |   |            |   | (1,531  | )            |  |   |                                     |   |  |                            | 36,390  |   |              |   |  |                                   |  |   |  |  |  |   | 36,390  |  
|Inventories                                                                                |  |                       | 176,748 |   |            |   | 30,090  |              |  |   |                                     |   |  |                            | 206,838 |   |              |   |  |                                   |  |   |  |  |  |   | 206,838 |  
|Prepaid expenses and other assets                                                          |  |                       | 22,461  |   |            |   | 5,480   |              |  |   |                                     |   |  |                            | 27,941  |   |              |   |  |                                   |  |   |  |  |  |   | 27,941  |  
|Amounts due from affiliated companies                                                      |  |                       | 3,455   |   |            |   | (483    | )            |  |   |                                     |   |  |                            | 2,972   |   |              |   |  |                                   |  |   |  |  |  |   | 2,972   |  
|Intercompany                                                                               |  |                       | 111,228 |   |            |   | 16,374  |              |  |   | (127,602                             | ) |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Total current assets                                                                       |  |                       | 389,844 |   |            |   | 93,261  |              |  |   | (127,602                             | ) |  |                            | 355,503 |   |              |   |  |                                   |  |   |  |  |  |   | 355,503 |  
|Property, plant and equipment, net                                                         |  |                       | 185,349 |   |            |   | 76,426  |              |  |   |                                     |   |  |                            | 261,775 |   |              |   |  |                                   |  |   |  |  |  |   | 261,775 |  
|Deferred financing costs, net                                                              |  |                       | 2,114   |   |            |   |        |              |  |   |                                     |   |  |                            | 2,114   |   |              |   |  |                                   |  |   |  |  |  |   | 2,114   |  
|Goodwill and other non-amortizable assets                                                  |  |                       |        |   |            |   | 11,849  |              |  |   |                                     |   |  |                            | 11,849  |   |              |   |  |                                   |  |   |  |  |  |   | 11,849  |  
|Amortizable intangible assets, net                                                         |  |                       |        |   |            |   | 1,376   |              |  |   |                                     |   |  |                            | 1,376   |   |              |   |  |                                   |  |   |  |  |  |   | 1,376   |  
|Deferred turnaround costs & other assets                                                   |  |                       | 3,233   |   |            |   | 661     |              |  |   |                                     |   |  |                            | 3,894   |   |              |   |  |                                   |  |   |  |  |  |   | 3,894   |  
|Deferred income taxes                                                                      |  |                       | 7,909   |   |            |   | (7,317  | )            |  |   |                                     |   |  |                            | 592     |   |              |   |  |                                   |  |   |  |  |  |   | 592     |  
|Investment in subsidiaries                                                                 |  |                       | 9,263   |   |            |   |        |              |  |   | (9,263                               | ) |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|                                                                                           |  | $                     | 597,712 |   |            | $ | 176,256 |              |  | $ | (136,865                             | ) |  | $                          | 637,103 |   |              | $ |  |                                   |  | $ |  |  |  | $ | 637,103 |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Liabilities and Stockholders Equity                                                       |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Current:                                                                                   |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Revolving credit facility                                                                  |  | $                     | 83,000  |   |            | $ |        |              |  | $ |                                     |   |  | $                          | 83,000  |   |              | $ |  |                                   |  | $ |  |  |  | $ | 83,000  |  
|Current installments of long-term debt                                                     |  |                       | 1,390   |   |            |   | 498     |              |  |   |                                     |   |  |                            | 1,888   |   |              |   |  |                                   |  |   |  |  |  |   | 1,888   |  
|Accounts payable                                                                           |  |                       | 40,689  |   |            |   | 24,931  |              |  |   |                                     |   |  |                            | 65,620  |   |              |   |  |                                   |  |   |  |  |  |   | 65,620  |  
|Accrued liabilities                                                                        |  |                       | 9,457   |   |            |   | 6,112   |              |  |   |                                     |   |  |                            | 15,569  |   |              |   |  |                                   |  |   |  |  |  |   | 15,569  |  
|Income taxes payable                                                                       |  |                       | 196     |   |            |   | 356     |              |  |   |                                     |   |  |                            | 552     |   |              |   |  |                                   |  |   |  |  |  |   | 552     |  
|Sales, use and fuel taxes payable                                                          |  |                       | 14,461  |   |            |   | 3,994   |              |  |   |                                     |   |  |                            | 18,455  |   |              |   |  |                                   |  |   |  |  |  |   | 18,455  |  
|Deferred income taxes                                                                      |  |                       | 7,049   |   |            |   | (1,052  | )            |  |   |                                     |   |  |                            | 5,997   |   |              |   |  |                                   |  |   |  |  |  |   | 5,997   |  
|Intercompany                                                                               |  |                       |        |   |            |   | 127,602 |              |  |   | (127,602                             | ) |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Total current liabilities                                                                  |  |                       | 156,242 |   |            |   | 162,441 |              |  |   | (127,602                             | ) |  |                            | 191,081 |   |              |   |  |                                   |  |   |  |  |  |   | 191,081 |  
|Long term debt: less current installments                                                  |  |                       | 326,239 |   |            |   | 1,926   |              |  |   |                                     |   |  |                            | 328,165 |   |              |   |  |                                   |  |   |  |  |  |   | 328,165 |  
|Deferred retirement benefits                                                               |  |                       | 88,994  |   |            |   | 2,626   |              |  |   |                                     |   |  |                            | 91,620  |   |              |   |  |                                   |  |   |  |  |  |   | 91,620  |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Total liabilities                                                                          |  |                       | 571,475 |   |            |   | 166,993 |              |  |   | (127,602                             | ) |  |                            | 610,866 |   |              |   |  |                                   |  |   |  |  |  |   | 610,866 |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Commitment and contingencies                                                               |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Stockholders equity                                                                       |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Common stock, $.10 par value per share  shares authorized 100; issued and outstanding 100 |  |                       |        |   |            |   | 18      |              |  |   | (18                                  | ) |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|Additional paid-in capital                                                                 |  |                       | 22,500  |   |            |   | 10,651  |              |  |   | (10,651                              | ) |  |                            | 22,500  |   |              |   |  |                                   |  |   |  |  |  |   | 22,500  |  
|Retained earnings                                                                          |  |                       | 18,231  |   |            |   | (140    | )            |  |   | 140                                  |   |  |                            | 18,231  |   |              |   |  |                                   |  |   |  |  |  |   | 18,231  |  
|Accumulated other comprehensive loss                                                       |  |                       | (14,494 | ) |            |   | (1,266  | )            |  |   | 1,266                                |   |  |                            | (14,494 | ) |              |   |  |                                   |  |   |  |  |  |   | (14,494 | )
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Controlling interest equity                                                                |  |                       | 26,237  |   |            |   | 9,263   |              |  |   | (9,263                               | ) |  |                            | 26,237  |   |              |   |  |                                   |  |   |  |  |  |   | 26,237  |  
|Non-controlling interest                                                                   |  |                       |        |   |            |   |        |              |  |   |                                     |   |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Total stockholders equity                                                                 |  |                       | 26,237  |   |            |   | 9,263   |              |  |   | (9,263                               | ) |  |                            | 26,237  |   |              |   |  |                                   |  |   |  |  |  |   | 26,237  |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|                                                                                           |  | $                     | 597,712 |   |            | $ | 176,256 |              |  | $ | (136,865                             | ) |  | $                          | 637,103 |   |              | $ |  |                                   |  | $ |  |  |  | $ | 637,103 |  
|                                                                                           |  |                       |         |   |            |   |         |              |  |   |                                      |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  



11



---

##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



Condensed Consolidating Statements of Operations

(in thousands)



|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|----------------------------------------------------------------------- |  | ------------------------------------ | ------- | - | ---------- | - | ------- | ------------ |  | - | ----------------------------------- | - |  | -------------------------- | ------- | - | ------------ | - | --- | --------------------------------- |  | - | --- | - |  | - | ------- | -
|                                                                        |  | Three Months Ended February 28, 2011 |        
|                                                                        |  | UnitedRefiningCompany                |         |   | Guarantors |   |         | Eliminations |  |   | UnitedRefiningCompany &Subsidiaries |   |  | UnitedRefiningAsphalt, Inc |         |   | Eliminations |   |     | UnitedRefiningCompanyConsolidated | 
|Net sales                                                               |  | $                                    | 519,256 |   |            | $ | 365,825 |              |  | $ | (193,057                            | ) |  | $                          | 692,024 |   |              | $ | 255 |                                   |  | $ |    |   |  | $ | 692,279 |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Costs and expenses:                                                     |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Costs of goods sold (exclusive of depreciation and amortization)        |  |                                      | 492,399 |   |            |   | 340,499 |              |  |   | (193,057                            | ) |  |                            | 639,841 |   |              |   |    |                                   |  |   |    |   |  |   | 639,841 |  
|Selling, general and administrative expenses                            |  |                                      | 4,348   |   |            |   | 32,469  |              |  |   |                                    |   |  |                            | 36,817  |   |              |   | 2   |                                   |  |   |    |   |  |   | 36,819  |  
|Depreciation and amortization expenses                                  |  |                                      | 3,764   |   |            |   | 1,587   |              |  |   |                                    |   |  |                            | 5,351   |   |              |   |    |                                   |  |   |    |   |  |   | 5,351   |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|                                                                        |  |                                      | 500,511 |   |            |   | 374,555 |              |  |   | (193,057                            | ) |  |                            | 682,009 |   |              |   | 2   |                                   |  |   |    |   |  |   | 682,011 |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Operating income (loss)                                                 |  |                                      | 18,745  |   |            |   | (8,730  | )            |  |   |                                    |   |  |                            | 10,015  |   |              |   | 253 |                                   |  |   |    |   |  |   | 10,268  |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Other income (expense):                                                 |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Interest expense, net                                                   |  |                                      | (8,659  | ) |            |   | (214    | )            |  |   |                                    |   |  |                            | (8,873  | ) |              |   | (22 | )                                 |  |   |    |   |  |   | (8,895  | )
|Other, net                                                              |  |                                      | (913    | ) |            |   | 177     |              |  |   |                                    |   |  |                            | (736    | ) |              |   | (74 | )                                 |  |   |    |   |  |   | (810    | )
|Equity in net (loss) income of subsidiaries                             |  |                                      | (5,528  | ) |            |   |        |              |  |   | 5,528                               |   |  |                            |        |   |              |   |    |                                   |  |   |    |   |  |   |        |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|                                                                        |  |                                      | (15,100 | ) |            |   | (37     | )            |  |   | 5,528                               |   |  |                            | (9,609  | ) |              |   | (96 | )                                 |  |   |    |   |  |   | (9,705  | )
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Income (loss) before income tax expense (benefit)                       |  |                                      | 3,645   |   |            |   | (8,767  | )            |  |   | 5,528                               |   |  |                            | 406     |   |              |   | 157 |                                   |  |   |    |   |  |   | 563     |  
|Income tax expense (benefit)                                            |  |                                      | 3,384   |   |            |   | (3,239  | )            |  |   |                                    |   |  |                            | 145     |   |              |   | 64  |                                   |  |   |    |   |  |   | 209     |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Net income (loss)                                                       |  |                                      | 261     |   |            |   | (5,528  | )            |  |   | 5,528                               |   |  |                            | 261     |   |              |   | 93  |                                   |  |   |    |   |  |   | 354     |  
|Less net income attributable to non-controlling interest                |  |                                      |        |   |            |   |        |              |  |   |                                    |   |  |                            |        |   |              |   |    |                                   |  |   | 93  |   |  |   | 93      |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  
|Net income (loss) attributable to United Refining Companys Stockholder |  | $                                    | 261     |   |            | $ | (5,528  | )            |  | $ | 5,528                               |   |  | $                          | 261     |   |              | $ | 93  |                                   |  | $ | (93 | ) |  | $ | 261     |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |     |                                   |  |   |     |   |  |   |         |  



|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|----------------------------------------------------------------------- |  | ------------------------------------ | ------- | - | ---------- | - | ------- | ------------ |  | - | ----------------------------------- | - |  | -------------------------- | ------- | - | ------------ | - | - | --------------------------------- |  | - | - |  |  | - | ------- | -
|                                                                        |  | Three Months Ended February 28, 2010 |        
|                                                                        |  | UnitedRefiningCompany                |         |   | Guarantors |   |         | Eliminations |  |   | UnitedRefiningCompany &Subsidiaries |   |  | UnitedRefiningAsphalt, Inc |         |   | Eliminations |   |   | UnitedRefiningCompanyConsolidated | 
|Net sales                                                               |  | $                                    | 426,301 |   |            | $ | 319,746 |              |  | $ | (151,299                            | ) |  | $                          | 594,748 |   |              | $ |  |                                   |  | $ |  |  |  | $ | 594,748 |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Costs and expenses:                                                     |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Costs of goods sold (exclusive of depreciation and amortization)        |  |                                      | 446,158 |   |            |   | 290,763 |              |  |   | (151,299                            | ) |  |                            | 585,622 |   |              |   |  |                                   |  |   |  |  |  |   | 585,622 |  
|Selling, general and administrative expenses                            |  |                                      | 5,864   |   |            |   | 31,820  |              |  |   |                                    |   |  |                            | 37,684  |   |              |   |  |                                   |  |   |  |  |  |   | 37,684  |  
|Depreciation and amortization expenses                                  |  |                                      | 3,972   |   |            |   | 1,515   |              |  |   |                                    |   |  |                            | 5,487   |   |              |   |  |                                   |  |   |  |  |  |   | 5,487   |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|                                                                        |  |                                      | 455,994 |   |            |   | 324,098 |              |  |   | (151,299                            | ) |  |                            | 628,793 |   |              |   |  |                                   |  |   |  |  |  |   | 628,793 |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Operating income (loss)                                                 |  |                                      | (29,693 | ) |            |   | (4,352  | )            |  |   |                                    |   |  |                            | (34,045 | ) |              |   |  |                                   |  |   |  |  |  |   | (34,045 | )
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Other income (expense):                                                 |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Interest expense, net                                                   |  |                                      | (8,392  | ) |            |   | (320    | )            |  |   |                                    |   |  |                            | (8,712  | ) |              |   |  |                                   |  |   |  |  |  |   | (8,712  | )
|Other, net                                                              |  |                                      | (668    | ) |            |   | 462     |              |  |   |                                    |   |  |                            | (206    | ) |              |   |  |                                   |  |   |  |  |  |   | (206    | )
|Equity in net (loss) income of subsidiaries                             |  |                                      | (2,510  | ) |            |   |        |              |  |   | 2,510                               |   |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|                                                                        |  |                                      | (11,570 | ) |            |   | 142     |              |  |   | 2,510                               |   |  |                            | (8,918  | ) |              |   |  |                                   |  |   |  |  |  |   | (8,918  | )
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Income (loss) before income tax expense (benefit)                       |  |                                      | (41,263 | ) |            |   | (4,210  | )            |  |   | 2,510                               |   |  |                            | (42,963 | ) |              |   |  |                                   |  |   |  |  |  |   | (42,963 | )
|Income tax expense (benefit)                                            |  |                                      | (15,918 | ) |            |   | (1,700  | )            |  |   |                                    |   |  |                            | (17,618 | ) |              |   |  |                                   |  |   |  |  |  |   | (17,618 | )
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Net income (loss)                                                       |  |                                      | (25,345 | ) |            |   | (2,510  | )            |  |   | 2,510                               |   |  |                            | (25,345 | ) |              |   |  |                                   |  |   |  |  |  |   | (25,345 | )
|Less net income attributable to non-controlling interest                |  |                                      |        |   |            |   |        |              |  |   |                                    |   |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Net income (loss) attributable to United Refining Companys Stockholder |  | $                                    | (25,345 | ) |            | $ | (2,510  | )            |  | $ | 2,510                               |   |  | $                          | (25,345 | ) |              | $ |  |                                   |  | $ |  |  |  | $ | (25,345 | )
|                                                                        |  |                                      |         |   |            |   |         |              |  |   |                                     |   |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  



12



---

##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



Condensed Consolidating Statements of Operations

(in thousands)



|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|----------------------------------------------------------------------- |  | ---------------------------------- | ------- | - | ---------- | - | ------- | ------------ |  | - | ----------------------------------- | - |  | -------------------------- | --------- | - | ------------ | - | --- | --------------------------------- |  | - | --- | - |  | - | --------- | -
|                                                                        |  | Six Months Ended February 28, 2011 |        
|                                                                        |  | UnitedRefiningCompany              |         |   | Guarantors |   |         | Eliminations |  |   | UnitedRefiningCompany &Subsidiaries |   |  | UnitedRefiningAsphalt, Inc |           |   | Eliminations |   |     | UnitedRefiningCompanyConsolidated | 
|Net sales                                                               |  | $                                  | 964,400 |   |            | $ | 717,806 |              |  | $ | (371,035                            | ) |  | $                          | 1,311,171 |   |              | $ | 255 |                                   |  | $ |    |   |  | $ | 1,311,426 |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Costs and expenses:                                                     |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Costs of goods sold (exclusive of depreciation and amortization)        |  |                                    | 930,882 |   |            |   | 660,831 |              |  |   | (371,035                            | ) |  |                            | 1,220,678 |   |              |   |    |                                   |  |   |    |   |  |   | 1,220,678 |  
|Selling, general and administrative expenses                            |  |                                    | 8,572   |   |            |   | 64,031  |              |  |   |                                    |   |  |                            | 72,603    |   |              |   | 2   |                                   |  |   |    |   |  |   | 72,605    |  
|Depreciation and amortization expenses                                  |  |                                    | 7,815   |   |            |   | 3,172   |              |  |   |                                    |   |  |                            | 10,987    |   |              |   |    |                                   |  |   |    |   |  |   | 10,987    |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|                                                                        |  |                                    | 947,269 |   |            |   | 728,034 |              |  |   | (371,035                            | ) |  |                            | 1,304,268 |   |              |   | 2   |                                   |  |   |    |   |  |   | 1,304,270 |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Operating income (loss)                                                 |  |                                    | 17,131  |   |            |   | (10,228 | )            |  |   |                                    |   |  |                            | 6,903     |   |              |   | 253 |                                   |  |   |    |   |  |   | 7,156     |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Other income (expense):                                                 |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Interest expense, net                                                   |  |                                    | (17,374 | ) |            |   | (413    | )            |  |   |                                    |   |  |                            | (17,787   | ) |              |   | (22 | )                                 |  |   |    |   |  |   | (17,809   | )
|Other, net                                                              |  |                                    | (1,720  | ) |            |   | 403     |              |  |   |                                    |   |  |                            | (1,317    | ) |              |   | (74 | )                                 |  |   |    |   |  |   | (1,391    | )
|Equity in net (loss) income of subsidiaries                             |  |                                    | (6,524  | ) |            |   |        |              |  |   | 6,524                               |   |  |                            |          |   |              |   |    |                                   |  |   |    |   |  |   |          |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|                                                                        |  |                                    | (25,618 | ) |            |   | (10     | )            |  |   | 6,524                               |   |  |                            | (19,104   | ) |              |   | (96 | )                                 |  |   |    |   |  |   | (19,200   | )
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Income (loss) before income tax expense (benefit)                       |  |                                    | (8,487  | ) |            |   | (10,238 | )            |  |   | 6,524                               |   |  |                            | (12,201   | ) |              |   | 157 |                                   |  |   |    |   |  |   | (12,044   | )
|Income tax expense (benefit)                                            |  |                                    | (659    | ) |            |   | (3,714  | )            |  |   |                                    |   |  |                            | (4,373    | ) |              |   | 64  |                                   |  |   |    |   |  |   | (4,309    | )
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Net income (loss)                                                       |  |                                    | (7,828  | ) |            |   | (6,524  | )            |  |   | 6,524                               |   |  |                            | (7,828    | ) |              |   | 93  |                                   |  |   |    |   |  |   | (7,735    | )
|Less net income attributable to non-controlling interest                |  |                                    |        |   |            |   |        |              |  |   |                                    |   |  |                            |          |   |              |   |    |                                   |  |   | 93  |   |  |   | 93        |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  
|Net income (loss) attributable to United Refining Companys Stockholder |  | $                                  | (7,828  | ) |            | $ | (6,524  | )            |  | $ | 6,524                               |   |  | $                          | (7,828    | ) |              | $ | 93  |                                   |  | $ | (93 | ) |  | $ | (7,828    | )
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |     |                                   |  |   |     |   |  |   |           |  



|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|----------------------------------------------------------------------- |  | ---------------------------------- | ------- | - | ---------- | - | ------- | ------------ |  | - | ----------------------------------- | - |  | -------------------------- | --------- | - | ------------ | - | - | --------------------------------- |  | - | - |  |  | - | --------- | -
|                                                                        |  | Six Months Ended February 28, 2010 |        
|                                                                        |  | UnitedRefiningCompany              |         |   | Guarantors |   |         | Eliminations |  |   | UnitedRefiningCompany &Subsidiaries |   |  | UnitedRefiningAsphalt, Inc |           |   | Eliminations |   |   | UnitedRefiningCompanyConsolidated | 
|Net sales                                                               |  | $                                  | 870,275 |   |            | $ | 644,441 |              |  | $ | (299,042                            | ) |  | $                          | 1,215,674 |   |              | $ |  |                                   |  | $ |  |  |  | $ | 1,215,674 |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Costs and expenses:                                                     |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Costs of goods sold (exclusive of depreciation and amortization)        |  |                                    | 906,138 |   |            |   | 580,866 |              |  |   | (299,042                            | ) |  |                            | 1,187,962 |   |              |   |  |                                   |  |   |  |  |  |   | 1,187,962 |  
|Selling, general and administrative expenses                            |  |                                    | 11,705  |   |            |   | 62,738  |              |  |   |                                    |   |  |                            | 74,443    |   |              |   |  |                                   |  |   |  |  |  |   | 74,443    |  
|Depreciation and amortization expenses                                  |  |                                    | 7,945   |   |            |   | 3,023   |              |  |   |                                    |   |  |                            | 10,968    |   |              |   |  |                                   |  |   |  |  |  |   | 10,968    |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|                                                                        |  |                                    | 925,788 |   |            |   | 646,627 |              |  |   | (299,042                            | ) |  |                            | 1,273,373 |   |              |   |  |                                   |  |   |  |  |  |   | 1,273,373 |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Operating income (loss)                                                 |  |                                    | (55,513 | ) |            |   | (2,186  | )            |  |   |                                    |   |  |                            | (57,699   | ) |              |   |  |                                   |  |   |  |  |  |   | (57,699   | )
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Other income (expense):                                                 |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Interest expense, net                                                   |  |                                    | (16,524 | ) |            |   | (655    | )            |  |   |                                    |   |  |                            | (17,179   | ) |              |   |  |                                   |  |   |  |  |  |   | (17,179   | )
|Other, net                                                              |  |                                    | (1,484  | ) |            |   | 672     |              |  |   |                                    |   |  |                            | (812      | ) |              |   |  |                                   |  |   |  |  |  |   | (812      | )
|Equity in net (loss) income of subsidiaries                             |  |                                    | (1,300  | ) |            |   |        |              |  |   | 1,300                               |   |  |                            |          |   |              |   |  |                                   |  |   |  |  |  |   |          |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|                                                                        |  |                                    | (19,308 | ) |            |   | 17      |              |  |   | 1,300                               |   |  |                            | (17,991   | ) |              |   |  |                                   |  |   |  |  |  |   | (17,991   | )
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Income (loss) before income tax expense (benefit)                       |  |                                    | (74,821 | ) |            |   | (2,169  | )            |  |   | 1,300                               |   |  |                            | (75,690   | ) |              |   |  |                                   |  |   |  |  |  |   | (75,690   | )
|Income tax expense (benefit)                                            |  |                                    | (30,166 | ) |            |   | (869    | )            |  |   |                                    |   |  |                            | (31,035   | ) |              |   |  |                                   |  |   |  |  |  |   | (31,035   | )
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Net income (loss)                                                       |  |                                    | (44,655 | ) |            |   | (1,300  | )            |  |   | 1,300                               |   |  |                            | (44,655   | ) |              |   |  |                                   |  |   |  |  |  |   | (44,655   | )
|Less net income attributable to non-controlling interest                |  |                                    |        |   |            |   |        |              |  |   |                                    |   |  |                            |          |   |              |   |  |                                   |  |   |  |  |  |   |          |  
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  
|Net income (loss) attributable to United Refining Companys Stockholder |  | $                                  | (44,655 | ) |            | $ | (1,300  | )            |  | $ | 1,300                               |   |  | $                          | (44,655   | ) |              | $ |  |                                   |  | $ |  |  |  | $ | (44,655   | )
|                                                                        |  |                                    |         |   |            |   |         |              |  |   |                                     |   |  |                            |           |   |              |   |   |                                   |  |   |   |  |  |   |           |  



13



---

##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



Condensed Consolidating Statements of Cash Flows

(in thousands)



|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|------------------------------------------------------------------ |  | ---------------------------------- | ------- | - | ---------- | - | ------ | ------------ |  | - | ----------------------------------- |  |  | -------------------------- | ------- | - | ------------ | - | ------- | --------------------------------- |  | - | - |  |  | - | ------- | -
|                                                                   |  | Six Months Ended February 28, 2011 |        
|                                                                   |  | UnitedRefiningCompany              |         |   | Guarantors |   |        | Eliminations |  |   | UnitedRefiningCompany &Subsidiaries |  |  | UnitedRefiningAsphalt, Inc |         |   | Eliminations |   |         | UnitedRefiningCompanyConsolidated | 
|Net cash provided by (used in) by operating activities             |  | $                                  | 50,962  |   |            | $ | 3,987  |              |  | $ |                                    |  |  | $                          | 54,949  |   |              | $ | (29,654 | )                                 |  | $ |  |  |  | $ | 25,295  |  
|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Cash flows from investing activities:                              |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Additions to property, plant and equipment                         |  |                                    | (16,089 | ) |            |   | (2,094 | )            |  |   |                                    |  |  |                            | (18,183 | ) |              |   |        |                                   |  |   |  |  |  |   | (18,183 | )
|Additions to deferred turnaround costs                             |  |                                    | (6,029  | ) |            |   |       |              |  |   |                                    |  |  |                            | (6,029  | ) |              |   |        |                                   |  |   |  |  |  |   | (6,029  | )
|Proceeds from asset dispositions                                   |  |                                    | 56      |   |            |   | 1      |              |  |   |                                    |  |  |                            | 57      |   |              |   |        |                                   |  |   |  |  |  |   | 57      |  
|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Net cash used in investing activities                              |  |                                    | (22,062 | ) |            |   | (2,093 | )            |  |   |                                    |  |  |                            | (24,155 | ) |              |   |        |                                   |  |   |  |  |  |   | (24,155 | )
|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Cash flows from financing activities:                              |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Net (reductions) borrowings on revolving credit facilities         |  |                                    | (23,000 | ) |            |   |       |              |  |   |                                    |  |  |                            | (23,000 | ) |              |   | 15,300  |                                   |  |   |  |  |  |   | (7,700  | )
|Proceeds from issuance of common stock of non-controlling interest |  |                                    |        |   |            |   |       |              |  |   |                                    |  |  |                            |        |   |              |   | 15,000  |                                   |  |   |  |  |  |   | 15,000  |  
|Principal reductions of long-term debt                             |  |                                    | (306    | ) |            |   | (293   | )            |  |   |                                    |  |  |                            | (599    | ) |              |   |        |                                   |  |   |  |  |  |   | (599    | )
|Deferred financing costs                                           |  |                                    | (9      | ) |            |   |       |              |  |   |                                    |  |  |                            | (9      | ) |              |   | (415    | )                                 |  |   |  |  |  |   | (424    | )
|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Net cash (used in) provided by financing activities                |  |                                    | (23,315 | ) |            |   | (293   | )            |  |   |                                    |  |  |                            | (23,608 | ) |              |   | 29,885  |                                   |  |   |  |  |  |   | 6,277   |  
|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Net increase (decrease) in cash and cash equivalents               |  |                                    | 5,585   |   |            |   | 1,601  |              |  |   |                                    |  |  |                            | 7,186   |   |              |   | 231     |                                   |  |   |  |  |  |   | 7,417   |  
|Cash and cash equivalents, beginning of year                       |  |                                    | 7,765   |   |            |   | 9,405  |              |  |   |                                    |  |  |                            | 17,170  |   |              |   |        |                                   |  |   |  |  |  |   | 17,170  |  
|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  
|Cash and cash equivalents, end of period                           |  | $                                  | 13,350  |   |            | $ | 11,006 |              |  | $ |                                    |  |  | $                          | 24,356  |   |              | $ | 231     |                                   |  | $ |  |  |  | $ | 24,587  |  
|                                                                   |  |                                    |         |   |            |   |        |              |  |   |                                     |  |  |                            |         |   |              |   |         |                                   |  |   |   |  |  |   |         |  



|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|-------------------------------------------------------- |  | ---------------------------------- | -------- | - | ---------- | - | ------ | ------------ |  | - | ---------------------------------- |  |  | -------------------------- | ------- | - | ------------ | - | - | --------------------------------- |  | - | - |  |  | - | ------- | -
|                                                         |  | Six Months Ended February 28, 2010 |         
|                                                         |  | UnitedRefiningCompany              |          |   | Guarantors |   |        | Eliminations |  |   | UnitedRefiningCompany&Subsidiaries |  |  | UnitedRefiningAsphalt, Inc |         |   | Eliminations |   |   | UnitedRefiningCompanyConsolidated | 
|Net cash provided by (used in) by operating activities   |  | $                                  | (103,660 | ) |            | $ | 8,271  |              |  | $ |                                   |  |  | $                          | (95,389 | ) |              | $ |  |                                   |  | $ |  |  |  | $ | (95,389 | )
|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Cash flows from investing activities:                    |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Additions to property, plant and equipment               |  |                                    | (9,651   | ) |            |   | (3,375 | )            |  |   |                                   |  |  |                            | (13,026 | ) |              |   |  |                                   |  |   |  |  |  |   | (13,026 | )
|Additions to deferred turnaround costs                   |  |                                    | (224     | ) |            |   | (51    | )            |  |   |                                   |  |  |                            | (275    | ) |              |   |  |                                   |  |   |  |  |  |   | (275    | )
|Proceeds from asset dispositions                         |  |                                    | 5        |   |            |   |       |              |  |   |                                   |  |  |                            | 5       |   |              |   |  |                                   |  |   |  |  |  |   | 5       |  
|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Net cash used in investing activities                    |  |                                    | (9,870   | ) |            |   | (3,426 | )            |  |   |                                   |  |  |                            | (13,296 | ) |              |   |  |                                   |  |   |  |  |  |   | (13,296 | )
|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Cash flows from financing activities:                    |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Net (reductions) borrowings on revolving credit facility |  |                                    | 98,000   |   |            |   |       |              |  |   |                                   |  |  |                            | 98,000  |   |              |   |  |                                   |  |   |  |  |  |   | (98,000 | )
|Principal reductions of long-term debt                   |  |                                    | (359     | ) |            |   | (541   | )            |  |   |                                   |  |  |                            | (900    | ) |              |   |  |                                   |  |   |  |  |  |   | (900    | )
|Deferred financing costs                                 |  |                                    |         |   |            |   |       |              |  |   |                                   |  |  |                            |        |   |              |   |  |                                   |  |   |  |  |  |   |        |  
|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Net cash (used in) provided by financing activities      |  |                                    | 97,641   |   |            |   | (541   | )            |  |   |                                   |  |  |                            | 97,100  |   |              |   |  |                                   |  |   |  |  |  |   | 97,100  |  
|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Net increase (decrease) in cash and cash equivalents     |  |                                    | (15,889  | ) |            |   | 4,304  |              |  |   |                                   |  |  |                            | (11,585 | ) |              |   |  |                                   |  |   |  |  |  |   | (11,585 | )
|Cash and cash equivalents, beginning of year             |  |                                    | 21,265   |   |            |   | 9,797  |              |  |   |                                   |  |  |                            | 31,062  |   |              |   |  |                                   |  |   |  |  |  |   | 31,062  |  
|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  
|Cash and cash equivalents, end of period                 |  | $                                  | 5,376    |   |            | $ | 14,101 |              |  | $ |                                   |  |  | $                          | 19,477  |   |              | $ |  |                                   |  | $ |  |  |  | $ | 19,477  |  
|                                                         |  |                                    |          |   |            |   |        |              |  |   |                                    |  |  |                            |         |   |              |   |   |                                   |  |   |   |  |  |   |         |  



14



---

##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



|4. | Segments of Business
|-- | --------------------



Intersegment revenues are calculated using market prices and are eliminated upon consolidation. Summarized financial
information regarding the Companys reportable segments is presented in the following tables (in thousands):



|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|----------------------------- |  | ------------------------------ | ------- | - | ---------------------------- | - | ------- | ---- |  | - | --------- | - |  | - | --------- | -
|                              |  | Three Months EndedFebruary 28, |         |   | Six Months EndedFebruary 28, |  
|                              |  | 2011                           |         |   | 2010                         |   |         | 2011 |  |   | 2010      |  
|Net Sales                     |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Retail                        |  | $                              | 364,781 |   |                              | $ | 318,689 |      |  | $ | 716,000   |   |  | $ | 642,318   |  
|Wholesale                     |  |                                | 327,498 |   |                              |   | 276,059 |      |  |   | 595,426   |   |  |   | 573,356   |  
|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|                              |  | $                              | 692,279 |   |                              | $ | 594,748 |      |  | $ | 1,311,426 |   |  | $ | 1,215,674 |  
|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Intersegment Sales            |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Wholesale                     |  | $                              | 192,013 |   |                              | $ | 150,242 |      |  | $ | 369,229   |   |  | $ | 296,919   |  
|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Operating Income (Loss)       |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Retail                        |  | $                              | (9,079  | ) |                              | $ | (4,250  | )    |  | $ | (10,352   | ) |  | $ | (2,321    | )
|Wholesale                     |  |                                | 19,347  |   |                              |   | (29,795 | )    |  |   | 17,508    |   |  |   | (55,378   | )
|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|                              |  | $                              | 10,268  |   |                              | $ | (34,045 | )    |  | $ | 7,156     |   |  | $ | (57,699   | )
|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Depreciation and Amortization |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|Retail                        |  | $                              | 1,414   |   |                              | $ | 1,334   |      |  | $ | 2,827     |   |  | $ | 2,662     |  
|Wholesale                     |  |                                | 3,937   |   |                              |   | 4,153   |      |  |   | 8,160     |   |  |   | 8,306     |  
|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  
|                              |  | $                              | 5,351   |   |                              | $ | 5,487   |      |  | $ | 10,987    |   |  | $ | 10,968    |  
|                              |  |                                |         |   |                              |   |         |      |  |   |           |   |  |   |           |  



|                                          |  |                   |         |  |                 |   |         | 
|----------------------------------------- |  | ----------------- | ------- |  | --------------- | - | ------- | 
|                                          |  | February 28, 2011 |         |  | August 31, 2010 |  
|Total Assets                              |  |                   |         |  |                 |   |         | 
|Retail                                    |  | $                 | 161,753 |  |                 | $ | 146,932 | 
|Wholesale                                 |  |                   | 456,750 |  |                 |   | 490,171 | 
|                                          |  |                   |         |  |                 |   |         | 
|                                          |  | $                 | 618,503 |  |                 | $ | 637,103 | 
|                                          |  |                   |         |  |                 |   |         | 
|Capital Expenditures (including non-cash) |  |                   |         |  |                 |   |         | 
|Retail                                    |  | $                 | 1,933   |  |                 | $ | 5,180   | 
|Wholesale                                 |  |                   | 16,284  |  |                 |   | 22,233  | 
|                                          |  |                   |         |  |                 |   |         | 
|                                          |  | $                 | 18,217  |  |                 | $ | 27,413  | 
|                                          |  |                   |         |  |                 |   |         | 



15



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##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



|5. | Employee Benefit Plans
|-- | ----------------------



For the periods ended February 28, 2011 and 2010, net pension and other postretirement benefit costs were comprised
of the following:



|                                      |  |                                |        |   |                              |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------- |  | ------------------------------ | ------ | - | ---------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                      |  | Pension Benefits               |       
|                                      |  | Three Months EndedFebruary 28, |        |   | Six Months EndedFebruary 28, |  
|                                      |  | 2011                           |        |   | 2010                         |   |        | 2011 |  |   | 2010   |  
|                                      |  | (in thousands)                 |       
|Service cost                          |  | $                              | 448    |   |                              | $ | 918    |      |  | $ | 895    |   |  | $ | 1,806  |  
|Interest cost on benefit obligation   |  |                                | 1,245  |   |                              |   | 1,482  |      |  |   | 2,489  |   |  |   | 2,916  |  
|Expected return on plan assets        |  |                                | (1,135 | ) |                              |   | (1,016 | )    |  |   | (2,270 | ) |  |   | (2,000 | )
|Amortization and deferral of net loss |  |                                | 506    |   |                              |   | 849    |      |  |   | 1,015  |   |  |   | 1,744  |  
|                                      |  |                                |        |   |                              |   |        |      |  |   |        |   |  |   |        |  
|Net periodic benefit cost             |  | $                              | 1,064  |   |                              | $ | 2,233  |      |  | $ | 2,129  |   |  | $ | 4,466  |  
|                                      |  |                                |        |   |                              |   |        |      |  |   |        |   |  |   |        |  



|                                      |  |                                |      |   |                              |   |       |      |  |   |       |   |  |   |       | 
|------------------------------------- |  | ------------------------------ | ---- | - | ---------------------------- | - | ----- | ---- |  | - | ----- | - |  | - | ----- | 
|                                      |  | Other Post-Retirement Benefits |     
|                                      |  | Three Months EndedFebruary 28, |      |   | Six Months EndedFebruary 28, |  
|                                      |  | 2011                           |      |   | 2010                         |   |       | 2011 |  |   | 2010  |  
|                                      |  | (in thousands)                 |     
|Service cost                          |  | $                              | 377  |   |                              | $ | 891   |      |  | $ | 754   |   |  | $ | 1,732 | 
|Interest cost on benefit obligation   |  |                                | 629  |   |                              |   | 1,258 |      |  |   | 1,259 |   |  |   | 2,445 | 
|Amortization of transition obligation |  |                                |     |   |                              |   |      |      |  |   |      |   |  |   | 149   | 
|Amortization and deferral of net loss |  |                                | (282 | ) |                              |   | 488   |      |  |   | (564  | ) |  |   | 948   | 
|                                      |  |                                |      |   |                              |   |       |      |  |   |       |   |  |   |       | 
|Net periodic benefit cost             |  | $                              | 724  |   |                              | $ | 2,637 |      |  | $ | 1,449 |   |  | $ | 5,274 | 
|                                      |  |                                |      |   |                              |   |       |      |  |   |       |   |  |   |       | 



As of
February 28, 2011, $3,414,000 of contributions have been made to the Company pension plans for the fiscal year ending August 31, 2011.



|6. | Fair Value Measurements
|-- | -----------------------



The carrying values of all financial instruments classified as a current asset or current liability approximate fair value
because of the short maturity of these instruments. The fair value of marketable securities is determined by available market prices. The carrying value (was less than) exceeded the fair value of the senior notes at February 28, 2011 and
August 31, 2010 by $(1,081,000) and $29,846,000, respectively.



|7. | Subsequent Events
|-- | -----------------



a) Refinancing of Senior Notes



During March 2011, the Company sold $365,000,000 of 10.500% First Priority Senior Secured Notes due
2018 (the Senior Secured Notes due 2018) for $352,020,600, resulting in original issue discount of $12,979,400, which will be amortized over the life of the Senior Secured Notes due 2018 using the interest method. The net proceeds of the
offering of $344,249,000 were used to retire all of its outstanding 101/2% Senior Notes due 2012, pay accrued interest of $3,400,000 and a redemption premium related thereto and for general corporate purposes. A loss of $1,205,000 on the early extinguishment of debt was
recorded consisting of a redemption premium of $915,000, a write-off of unamortized net debt premium of ($1,153,000) and a write-off of deferred financing costs of $1,443,000. Such Senior Secured Notes due 2018 are guaranteed by



16



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##### Table of Contents

UNITED REFINING COMPANY AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)

(Unaudited)



all of our domestic subsidiaries existing at March 8, 2011. The notes will be secured on a first-priority basis by our assets comprising our refinery located in Warren, Pennsylvania and the
capital stock of our pipeline subsidiary, subject to exception and permitted liens. The Senior Secured Notes due 2018 will rank equally with all of our existing and future senior indebtedness that is not subordinate in right of payment to the notes.



On
February 22, 2011 the Company announced the launch of a cash tender offer (the Tender Offer) for any and all of its outstanding
101/2% Senior Notes due 2012 issued under an
indenture dated as of August 6, 2004 (the Indenture) and consent solicitation (the Solicitation) for certain proposed amendments to the Indenture (the Proposed Amendments). Each holder who validly tendered
its Senior Notes due 2012 and delivered consents to the proposed Amendments prior to 5:00 pm, New York City time, on March 7, 2011, (the Consent Dates), received the total consideration of $1,005.00, which included $975.00 as the
tender offer consideration and $30.00 as a consent payment. In addition, accrued but unpaid interest up to, but not including, the applicable payment date of the Senior Notes due 2012 was paid in cash on all validly tendered and accepted Senior
Notes due 2012. The Company paid a total of $188,607,725.92 on March 8, 2011 for $181,764,375 principal amount of Notes, $5,592,750 for consent payment, and $1,250,600.92 for accrued interest on those Senior Notes due 2012 tendered.



The Tender Offer expired
at 12:00 midnight, New York City time, on March 21, 2011. Holders who validly tendered their Senior Notes due 2012 after the Consent Date received only the tender offer consideration and were not entitled to receive a consent payment pursuant
to the Tender Offer. The Company paid the total consideration or tender offer consideration, as the case may be, plus accrued but unpaid interest, for the Senior Notes due 2012 accepted for purchase promptly following the date of such acceptance
(such date, the Final Payment Date). On March 22, 2011, the Company paid a total of $678,224.68 for $670,800.00 principal amount of Senior Notes due 2012 and $7,424.68 for accrued interest on those Senior Notes due 2012 tendered
between the Consent Date (March 7, 2011) and the Final Payment Date (March 21, 2011).



On March 9, 2011, the Company issued a Notice of Redemption to all existing Noteholders of its 101/2% Senior Notes due 2012 redeeming these Senior Notes
due 2012 at 100% par value plus accrued but unpaid interest on the redemption date of April 8, 2011. On April 8, 2011, $138,962,426.54 was paid in total of which $136,847,000 was for principal amount of Senior Notes due 2012 and
$2,115,426.54 was for accrued interest.



b) Derivative Contracts



During March and April, the Company sold 3,375,000 barrels of heating oil crackspread swaps as part of its risk management strategy. The crackspread swaps expire sequentially beginning April 2011 through
December 2012. These derivative instruments are being used by the Company to fix margins on future sales of heating oil. The accounting treatment for the fair value of these derivative instruments will be recorded as assets or liabilities in its
Consolidated Balance Sheets, with the periodic change in fair value recognized in its Statements of Operations as the change occurs.



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------



Forward Looking Statements



This Quarterly Report on Form 10-Q contains
certain statements that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may include, among other things, United Refining Company and its
subsidiaries current expectations with respect to future operating results, future performance of its refinery and retail operations, capital expenditures and other financial items. Words such as expects, intends,
plans, projects, believes, estimates, may, will, should, shall, anticipates, predicts, and similar expressions typically identify
such forward looking statements in this Quarterly Report on Form 10-Q.



By their nature, all forward looking statements involve risk and uncertainties. All phases of the Companys operations involve risks and uncertainties, many of which are outside of the Companys
control, and any one of which, or a combination of which, could materially affect the Companys results of operations and whether the forward looking statements ultimately prove to be correct. Actual results may differ materially from those
contemplated by the forward looking statements for a number of reasons.



Although we believe our 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 depending on a variety of factors described in greater detail in the Companys filings with the SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, reports on Form 8-K,
etc. In addition to the factors discussed elsewhere in this Quarterly Report on Form 10-Q, 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:



| |  |  | the demand for and supply of crude oil and refined products;
| | - |  | ------------------------------------------------------------



| |  |  | the spread between market prices for refined products and market prices for crude oil;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | repayment of debt;
| | - |  | ------------------



| |  |  | general economic, business and market conditions;
| | - |  | -------------------------------------------------



| |  |  | risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the possibility of inefficiencies or shutdowns in refinery operations or pipelines;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | the availability and cost of financing to us;
| | - |  | ---------------------------------------------



| |  |  | environmental, tax and tobacco legislation or regulation;
| | - |  | ---------------------------------------------------------



| |  |  | volatility of gasoline prices, margins and supplies;
| | - |  | ----------------------------------------------------



| |  |  | merchandising margins;
| | - |  | ----------------------



| |  |  | labor costs;
| | - |  | ------------



| |  |  | level of capital expenditures;
| | - |  | ------------------------------



| |  |  | customer traffic;
| | - |  | -----------------



| |  |  | weather conditions;
| | - |  | -------------------



| |  |  | acts of terrorism and war;
| | - |  | --------------------------



| |  |  | business strategies;
| | - |  | --------------------



| |  |  | expansion and growth of operations;
| | - |  | -----------------------------------



| |  |  | future projects and investments;
| | - |  | --------------------------------



18



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##### Table of Contents

| |  |  | future exposure to currency devaluations or exchange rate fluctuations;
| | - |  | -----------------------------------------------------------------------



| |  |  | expected outcomes of legal and administrative proceedings and their expected effects on our financial position, results of operations and cash
flows; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | future operating results and financial condition.
| | - |  | -------------------------------------------------



All subsequent written and oral forward
looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to update any information contained herein or to publicly release the results of
any revisions to any such forward looking statements that may be made to reflect events or circumstances that occur, or which we become aware of, after the date of this Quarterly Report on Form 10-Q.



Recent Developments



The Company continues to be impacted by the
volatility of the petroleum market in fiscal year 2011. Average crude prices for the third quarter of fiscal year 2011 have risen as compared to the second quarter of fiscal year 2011. The average NYMEX price for crude oil for the third quarter of
fiscal year 2011 averaged $100.22 per barrel as measured on April 1, 2011, a $12.51 increase over the second quarter average of $87.71 per barrel.



The lagged 3-2-1 crackspread for the third fiscal quarter of 2011, as measured by the difference between the price of
crude oil contracts traded on the NYMEX for the proceeding month to the prices for NYMEX gasoline and heating oil contracts in the current trading month, is improving over the second quarter of fiscal year 2011. The lagged 3-2-1 crackspread for the
third quarter of fiscal 2011 as measured on April 1, 2011, was $28.13 as compared to $17.66 for the second fiscal quarter of 2011, a $10.47 or 59% improvement.



On January 14, 2011, the Company entered
into an Asphalt Purchase and Sale Agreement and Asphalt Product Throughput and Terminal Services Agreement (together, the Asphalt Agreements) with United Refining Asphalt, Inc. (URA), a special purpose entity formed by United
Refining, Inc. (our Parent). See Managements Discussion and Analyses of Financial Condition and Results of OperationLiquidity and Capital Resources.



During March 2011, the Company sold $365,000,000 of 10.500% First Priority
Senior Secured Notes due 2018. The net proceeds of the offering of $344,249,000 were used to retire all of its outstanding 10.500% Senior Unsecured Notes due 2012, pay accrued interest of $3,400,000 and a redemption premium related thereto and for
general corporate purposes. See Footnote 7 Subsequent Event.



On February 22, 2011 the Company announced the launch of a cash tender offer (the Tender Offer) for any and all of its outstanding 10 1⁄2 % Senior Notes due 2012 issued under an indenture
dated as of August 6, 2004 (the Indenture) and consent solicitation (the Solicitation) for certain proposed amendments to the Indenture (the Proposed Amendments). Each holder who validly tendered its Senior Notes
due 2012 and delivered consents to the proposed Amendments prior to 5:00 pm, New York City time, on March 7, 2011, (the Consent Dates), received the total consideration of $1,005.00, which included $975.00 as the tender offer
consideration and $30.00 as a consent payment. In addition, accrued but unpaid interest up to, but not including, the applicable payment date of the Senior Notes due 2012 was paid in cash on all validly tendered and accepted the Senior Notes due
2012. The Company paid a total of $188,607,725.92 on March 8, 2011 for $181,764,375 principal amount of the Senior Notes due 2012, $5,592,750 for consent payment, and $1,250,600.92 for accrued interest on those Senior Notes due 2012 tendered.



The Tender Offer expired at 12:00
midnight, New York City time, on March 21, 2011. Holders who validly tendered their Senior Notes due 2012 after the Consent Date received only the tender offer consideration and were not entitled to receive a consent payment pursuant to the Tender
Offer. The Company paid the total



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##### Table of Contents

consideration or tender offer consideration, as the case may be, plus accrued but unpaid interest, for the Senior Notes due 2012 accepted for purchase promptly following the date of such
acceptance (such date, the Final Payment Date). On March 22, 2011, the Company paid a total of $678,224.68 for $670,800.00 principal amount of the Senior Notes due 2012 and $7,424.68 for accrued interest on those Senior Notes due 2012
tendered between the Consent Date (March 7, 2011) and the Final Payment Date (March 21, 2011).



On March 9, 2011, the Company issued a Notice of Redemption to all existing Noteholders of its 10 1⁄2 % Senior Notes
due 2012 redeeming these Senior Notes due 2012 at 100% par value plus accrued but unpaid interest on the redemption date of April 8, 2011. On April 8, 2011, $138,962,426.54 was paid in total of which $136,847,000 was for principal amount of Senior
Notes due 2012 and $2,115,426.54 was for accrued interest.



In March 2011, the Company entered into a 21 month futures contracts for heating oil crackspreads. This is in response to the current margin environment and to manage our exposure to commodity price
volatility. During March and April, the Company sold 2,475,000 barrels of heating oil crackspread swaps as part of its risk management strategy. The crackspread swaps expire sequentially beginning April 2011 through December 2012 and include
approximately 165,000 barrels per month or approximately 37% of the Companys annual projected diesel fuel production for fiscal 2011. These derivative instruments are being used by the Company to fix margins on future sales of ultra low
sulphur diesel fuel. These derivatives will be recorded as assets or liabilities in its Consolidated Balance Sheets, with the periodic change in fair value recognized in its Statements of Operations as the change occurs.



The Company has received a written proposal
from PNC Bank, N.A. for the syndication of an amended $175,000,000 revolving credit facility, which contemplates PNC Bank, N.A., underwriting up to $75,000,000 of such new facility subject to definitive documentation, due diligence, and other
customary conditions.



On July 26,
2010, a rupture occurred in Line 6B pipeline on Enbridges Lakehead system in Michigan. The Companys heavy crude oil purchases are shipped on Line 6B from western Canada. As a result, the Company was forced to reduce production in its
crude processing unit until such time as the Enbridge Line 6B could be repaired and returned to normal service. As a result of the pipeline rupture, the Company filed a claim with its insurance carriers under its property insurance coverage which
contains a provision for contingent business interruption in the maximum amount of $15 million plus up to $5 million towards expenses. The Company is currently in discussions with its insurance carriers to settle the claim. The Company intends to
seek restitution from Enbridge for all of the losses that the Company incurred above any payments it receives from its insurance carriers.



Results of Operations



The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern
Pennsylvania. Operations are organized into two business segments: wholesale and retail.



The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying
petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers. The retail segment sells petroleum products under the Kwik Fill®, Citgo® and Keystone® brand names through a network of Company-operated retail units and convenience and grocery items through gasoline
stations and convenience stores under the Red Apple Food Mart® and Country Fair® brand names.



A discussion and analysis of the factors contributing to the Companys results of operations are presented below. The
accompanying Consolidated Financial Statements and related Notes, together with the following information, are intended to supply investors with a reasonable basis for evaluating the Companys operations, but should not serve as the only
criteria for predicting the Companys future performance.



20



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##### Table of Contents

Retail Operations:



|                                             |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------------- |  | ------------------------------ | ------- | - | ---------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                             |  | Three Months EndedFebruary 28, |         |   | Six Months EndedFebruary 28, |  
|                                             |  | 2011                           |         |   | 2010                         |   |         | 2011 |  |   | 2010    |  
|                                             |  | (dollars in thousands)         |        
|Net Sales                                    |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Petroleum                                    |  | $                              | 305,221 |   |                              | $ | 260,100 |      |  | $ | 591,702 |   |  | $ | 521,442 |  
|Merchandise and other                        |  |                                | 59,560  |   |                              |   | 58,589  |      |  |   | 124,298 |   |  |   | 120,876 |  
|                                             |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Total Net Sales                              |  | $                              | 364,781 |   |                              | $ | 318,689 |      |  | $ | 716,000 |   |  | $ | 642,318 |  
|Costs of goods sold                          |  | $                              | 340,102 |   |                              | $ | 289,983 |      |  | $ | 659,727 |   |  | $ | 579,619 |  
|Selling, general and administrative expenses |  |                                | 32,344  |   |                              |   | 31,622  |      |  |   | 63,798  |   |  |   | 62,358  |  
|Depreciation and amortization expenses       |  |                                | 1,414   |   |                              |   | 1,334   |      |  |   | 2,827   |   |  |   | 2,662   |  
|                                             |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Segment Operating (Loss) Income              |  | $                              | (9,079  | ) |                              | $ | (4,250  | )    |  | $ | (10,352 | ) |  | $ | (2,321  | )
|                                             |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Retail Operating Data:                       |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Petroleum sales (thousands of gallons)       |  |                                | 94,390  |   |                              |   | 93,972  |      |  |   | 193,502 |   |  |   | 191,426 |  
|Petroleum margin (a)                         |  | $                              | 9,670   |   |                              | $ | 14,176  |      |  | $ | 24,775  |   |  | $ | 32,208  |  
|Petroleum margin ($/gallon) (b)              |  |                                | .1024   |   |                              |   | .1509   |      |  |   | .1280   |   |  |   | .1683   |  
|Merchandise and other margins                |  | $                              | 15,009  |   |                              | $ | 14,530  |      |  | $ | 31,498  |   |  | $ | 30,491  |  
|Merchandise margin (percent of sales)        |  |                                | 25.2    | % |                              |   | 24.8    | %    |  |   | 25.3    | % |  |   | 25.2    | %



|(a) | Includes the effect of intersegment purchases from the Companys wholesale segment at prices which approximate market.
|--- | ----------------------------------------------------------------------------------------------------------------------

|(b) | Company management calculates petroleum margin per gallon by dividing petroleum gross margin by petroleum sales volumes. Management uses fuel margin
per gallon calculations to compare profitability to other companies in the industry. Petroleum margin per gallon may not be comparable to similarly titled measures used by other companies in the industry.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Comparison of Fiscal Quarters Ended February 28, 2011
and 2010



Net Sales



Retail sales increased during the
fiscal quarter ended February 28, 2011 by $46.1 million or 14.5% for the comparable period in fiscal 2010 from $318.7 million to $364.8 million. The increase was primarily due to $45.1 million in petroleum sales and $1.0 million in merchandise
sales. The petroleum sales increase resulted from a 16.8% increase in retail selling prices per gallon, and a .4 million gallon or .4% increase in retail petroleum volume. The merchandise sales increase is primarily due to increased prepared
food, beverages and cigarette sales due to promotional campaigns and increased selling prices.



Costs of Goods Sold



Retail costs of goods sold increased during the fiscal quarter ended February 28, 2011 by $50.1 million or 17.3% for
the comparable period in fiscal 2010 from $290.0 million to $340.1 million. The increase was primarily due to $47.5 million in petroleum purchase prices, fuel tax of $1.1 million, freight cost of $1.0 million and merchandise cost of $.5 million.
This increase in petroleum purchase prices resulted in lower petroleum retail margins, which is typical in a rising market when retail pricing does not keep pace with the rising market.



Selling, General and Administrative Expenses



Retail Selling, General and Administrative (SG&A) expenses increased during the
fiscal quarter ended February 28, 2011 by $.7 million or 2.3% for the comparable period in fiscal 2010 from $31.6 million to $32.3 million. The increase was primarily due to payroll costs of $.3 million, credit/customer service costs of $.5
million and legal/professional fees of $.3 million, offset by a reduction in pension/post retirement costs of $.4 million. The decrease was primarily due to changes made in pension/post retirement benefits. Effective September 1, 2010,
postretirement medical benefits for new hires and active salaried employees retiring after



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September 1, 2010 were eliminated. Additionally, effective January 1, 2011, deductibles and co-payments were added to the medical benefits plan for all plan
participants. For salaried employees meeting certain age and service requirements, the Company will contribute a defined dollar amount towards the cost of retiree healthcare based upon the employees length of service. Similarly,
effective September 1, 2010, benefits under the Companys defined benefit pension plan were frozen for all salaried employees, including the Companys Chief Executive Officer and Chief Financial Officer. The Company will
provide an enhanced contribution under its defined contribution 401(k) plan for all eligible employees as well as a transition contribution for older employees.



Comparison of Six Months Ended February 28, 2011 and
2010



Net Sales



Retail sales increased during the six months
ended February 28, 2011 by $73.7 million or 11.5% for the comparable period in fiscal 2010 from $642.3 million to $716.0 million. The increase was primarily due to $70.3 million in petroleum sales, and $3.4 million in merchandise sales. The
petroleum sales increase resulted from a 12.3% increase in retail selling prices per gallon and a 2.1 million gallon or 1.1% increase in sales volume. The merchandise sales increase is primarily due to increased prepared food, beverages and
cigarette sales due to promotional campaigns and increased selling prices.



Costs of Goods Sold



Retail costs of goods sold increased during the six months ended February 28, 2011 by $80.1 million or 13.8% for the comparable period in fiscal 2010 from $579.6 million to $659.7 million. The
increase was primarily due to $74.6 million in petroleum purchase prices, merchandise costs of $2.4 million, fuel taxes of $2.1 million and freight costs of $1.0 million. This increase in petroleum purchase prices resulted in lower petroleum retail
margins, which is typical in a rising market when retail pricing does not keep pace with the rising market.



Selling, General and Administrative Expenses



Retail SG&A expenses increased during
the six months ended February 28, 2011 by $1.4 million or 2.3% for the comparable period in fiscal 2010 from $62.4 million to $63.8 million. The increase was due to payroll costs of $.9 million, credit/customer service costs of $.8 million,
insurance/utilities/taxes of $.3 million and maintenance costs of $.2 million offset by a reduction in pension/post retirement costs of $.8 million. The decrease was primarily due to changes made in pension/post retirement benefits. Effective
September 1, 2010, postretirement medical benefits for new hires and active salaried employees retiring after September 1, 2010 were eliminated. Additionally, effective January 1, 2011, deductibles and co-payments were added
to the medical benefits plan for all plan participants. For salaried employees meeting certain age and service requirements, the Company will contribute a defined dollar amount towards the cost of retiree healthcare based upon the
employees length of service. Similarly, effective September 1, 2010, benefits under the Companys defined benefit pension plan were frozen for all salaried employees, including the Companys Chief Executive Officer
and Chief Financial Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan for all eligible employees as well as a transition contribution for older employees.



Wholesale Operations:



|                                                                 |  |                                |         |  |                              |   |         |      |  |   |         |  |  |   |         |  
|---------------------------------------------------------------- |  | ------------------------------ | ------- |  | ---------------------------- | - | ------- | ---- |  | - | ------- |  |  | - | ------- | -
|                                                                 |  | Three Months EndedFebruary 28, |         |  | Six Months EndedFebruary 28, |  
|                                                                 |  | 2011                           |         |  | 2010                         |   |         | 2011 |  |   | 2010    | 
|                                                                 |  | (dollars in thousands)         |        
|Net Sales (a)                                                    |  | $                              | 327,498 |  |                              | $ | 276,059 |      |  | $ | 595,426 |  |  | $ | 573,356 |  
|Costs of goods sold (exclusive of depreciation and amortization) |  |                                | 299,739 |  |                              |   | 295,639 |      |  |   | 560,951 |  |  |   | 608,343 |  
|Selling, general and administrative expenses                     |  |                                | 4,475   |  |                              |   | 6,062   |      |  |   | 8,807   |  |  |   | 12,085  |  
|Depreciation and amortization expenses                           |  |                                | 3,937   |  |                              |   | 4,153   |      |  |   | 8,160   |  |  |   | 8,306   |  
|                                                                 |  |                                |         |  |                              |   |         |      |  |   |         |  |  |   |         |  
|Segment Operating (Loss) Income                                  |  | $                              | 19,347  |  |                              | $ | (29,795 | )    |  | $ | 17,508  |  |  | $ | (55,378 | )
|                                                                 |  |                                |         |  |                              |   |         |      |  |   |         |  |  |   |         |  



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Key Wholesale Operating Statistics:



|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                 |  | Three Months EndedFebruary 28, |         |   | Six Months EndedFebruary 28, |  
|                                                                                 |  | 2011                           |         |   | 2010                         |   |         | 2011 |  |   | 2010    |  
|Refinery Product Yield (thousands of barrels)                                    |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Gasoline and gasoline blendstock                                                 |  |                                | 2,321   |   |                              |   | 2,228   |      |  |   | 3,950   |   |  |   | 4,509   |  
|Distillates                                                                      |  |                                | 1,216   |   |                              |   | 1,105   |      |  |   | 2,347   |   |  |   | 2,244   |  
|Asphalt                                                                          |  |                                | 1,488   |   |                              |   | 1,525   |      |  |   | 2,120   |   |  |   | 3,081   |  
|Butane, propane, residual products, internally produced fuel and other (Other) |  |                                | 538     |   |                              |   | 554     |      |  |   | 1,307   |   |  |   | 1,080   |  
|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Total Product Yield                                                              |  |                                | 5,563   |   |                              |   | 5,412   |      |  |   | 9,724   |   |  |   | 10,914  |  
|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|% Heavy Crude Oil of Total Refinery Throughout (b)                               |  |                                | 60      | % |                              |   | 60      | %    |  |   | 44      | % |  |   | 61      | %
|Crude throughput (thousand barrels per day)                                      |  |                                | 55.9    |   |                              |   | 56.5    |      |  |   | 48.2    |   |  |   | 56.5    |  
|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Product Sales (thousand of barrels) (a)                                          |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Gasoline and gasoline blendstock                                                 |  |                                | 1,342   |   |                              |   | 1,269   |      |  |   | 2,434   |   |  |   | 2,532   |  
|Distillates                                                                      |  |                                | 984     |   |                              |   | 841     |      |  |   | 1,892   |   |  |   | 1,692   |  
|Asphalt                                                                          |  |                                | 995     |   |                              |   | 1,291   |      |  |   | 2,070   |   |  |   | 3,231   |  
|Other                                                                            |  |                                | 193     |   |                              |   | 294     |      |  |   | 317     |   |  |   | 545     |  
|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Total Product Sales Volume                                                       |  |                                | 3,514   |   |                              |   | 3,695   |      |  |   | 6,713   |   |  |   | 8,000   |  
|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Product Sales (dollars in thousands) (a)                                         |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Gasoline and gasoline blendstock                                                 |  | $                              | 139,992 |   |                              | $ | 107,782 |      |  | $ | 238,384 |   |  | $ | 210,311 |  
|Distillates                                                                      |  |                                | 113,587 |   |                              |   | 73,318  |      |  |   | 202,551 |   |  |   | 143,631 |  
|Asphalt                                                                          |  |                                | 63,073  |   |                              |   | 78,629  |      |  |   | 137,435 |   |  |   | 191,875 |  
|Other                                                                            |  |                                | 10,846  |   |                              |   | 16,330  |      |  |   | 17,056  |   |  |   | 27,539  |  
|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  
|Total Product Sales                                                              |  | $                              | 327,498 |   |                              | $ | 276,059 |      |  | $ | 595,426 |   |  | $ | 573,356 |  
|                                                                                 |  |                                |         |   |                              |   |         |      |  |   |         |   |  |   |         |  



|(a) | Sources of total product sales include products manufactured at the refinery located in Warren, Pennsylvania and products purchased from third
parties.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | The Company defines heavy crude oil as crude oil with an American Petroleum Institute specific gravity of 26 or less.
|--- | -----------------------------------------------------------------------------------------------------------------------



Comparison of Fiscal
Quarters Ended February 28, 2011 and 2010



Net Sales



Wholesale sales increased during the three months ended February 28, 2011 by $51.4 million or 18.6% for the
comparable period in fiscal 2010 from $276.1 million to $327.5 million. The increase was due to a 24.7% increase in wholesale prices offset by a 4.9% decrease in wholesale volume.



Costs of Goods Sold (exclusive of depreciation and
amortization)



Wholesale
costs of goods sold increased during the three months ended February 28, 2011 by $4.1 million or 1.4% for the comparable period in fiscal 2010 from $295.6 million to $299.7 million. The increase in wholesale costs of goods sold during this
period was primarily due to an increase in cost of raw materials.



Selling, General and Administrative Expenses



Wholesale SG&A expenses decreased during the three months ended February 28, 2011 by $1.6 million or 2.2% for the
comparable period in fiscal 2010 from $6.1 million or 2.2% of net wholesale sales to $4.5 million or 1.4% of net wholesale sales. The decrease was primarily due to changes made in pension/post retirement benefits. Effective September 1, 2010,
postretirement medical benefits for new hires and active salaried



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employees retiring after September 1, 2010 were eliminated. Additionally, effective January 1, 2011, deductibles and co-payments were added to the medical benefits plan for
all plan participants. For salaried employees meeting certain age and service requirements, the Company will contribute a defined dollar amount towards the cost of retiree healthcare based upon the employees length of
service. Similarly, effective September 1, 2010, benefits under the Companys defined benefit pension plan were frozen for all salaried employees, including the Companys Chief Executive Officer and Chief Financial
Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan for all eligible employees as well as a transition contribution for older employees.



Comparison of Six Months Ended February 28, 2011 and
2010



During the six months
ended February 28, 2011, wholesale sales were negatively affected by the Enbridge Pipeline disruption and the 30-day scheduled refinery maintenance turnaround in October 2010. These two events resulted in the Company running an average crude
throughput of 40,500 bbl per day for the first fiscal quarter 2011 versus 56,500 bbl per day for the comparable period in fiscal 2010. The Enbridge Pipeline disruption also resulted in the Company running 22% of heavy crude oil for the first fiscal
quarter 2011 versus 61% for the comparable period in fiscal 2010.



Net Sales



Wholesale sales increased during the six months ended February 28, 2011 by $22.0 million or 3.8% for the comparable period in fiscal 2010 from $573.4 million to $595.4 million. The increase was due
to a 23.8% increase in wholesale prices offset by a 16.1% decrease in wholesale volume.



Costs of Goods Sold (exclusive of depreciation and amortization)



Wholesale costs of goods sold decreased during the six months ended February 28, 2011 by $47.4 million or 7.8% for
the comparable period in fiscal 2010 from $608.3 million to $560.9 million. The decrease in wholesale costs of goods sold was primarily due to a decrease in the costs of product purchased and refinery expenses.



Selling, General and Administrative Expenses



Wholesale SG&A expenses
decreased during the six months ended February 28, 2011 by $3.3 million or 27.1% for the comparable period in fiscal 2010 from $12.1 million or 2.1% of net wholesale sales to $8.8 million or 1.5% of net wholesale sales. The decrease was
primarily due to changes made in pension/post retirement benefits. Effective September 1, 2010, postretirement medical benefits for new hires and active salaried employees retiring after September 1, 2010 were
eliminated. Additionally, effective January 1, 2011, deductibles and co-payments were added to the medical benefits plan for all plan participants. For salaried employees meeting certain age and service requirements, the
Company will contribute a defined dollar amount towards the cost of retiree healthcare based upon the employees length of service. Similarly, effective September 1, 2010, benefits under the Companys defined benefit pension plan
were frozen for all salaried employees, including the Companys Chief Executive Officer and Chief Financial Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan for all eligible
employees as well as a transition contribution for older employees.



24



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Consolidated Expenses:



Interest Expense, net



Net interest expense (interest expense less
interest income) for the three months ended February 28, 2011 increased $.2 million or 2.3% for the comparable period in fiscal 2010 from $8.7 million to $8.9 million. The increase was principally due to increased Revolving Credit Facility
usage.



Net interest expense
(interest expense less interest income) for the six months ended February 28, 2011 increased $.4 million or 2.3% for the comparable period in fiscal 2010 from $17.2 million to $17.8 million. The increase was principally due to increased
Revolving Credit Facility usage.



Income Tax
Expense / (Benefit)



The
Companys effective tax rate for the three and six months ended February 28, 2011 and 2010 was approximately 36% and 41% respectively. This reduction in the effective tax rate was due to the Company recording a valuation allowance for
Pennsylvania Net Operating tax losses in the February 2011 period.



Liquidity and Capital Resources



We operate in an environment where our liquidity and capital resources are impacted by changes in the price of crude oil
and refined petroleum products, availability of credit, market uncertainty and a variety of additional factors beyond our control. Included in such factors are, among others, the level of customer product demand, weather conditions, governmental
regulations, worldwide political conditions and overall market and economic conditions.



The following table summarizes selected measures of liquidity and capital sources (in thousands):



|                          |  |                   |         | 
|------------------------- |  | ----------------- | ------- | 
|                          |  | February 28, 2011 |        
|Cash and cash equivalents |  | $                 | 24,587  | 
|Working capital           |  | $                 | 157,735 | 
|Current ratio             |  |                   | 1.90    | 
|Debt                      |  | $                 | 404,378 | 



Primary sources of liquidity have been cash and cash equivalents, cash flows from operations and borrowing availability
under a revolving line of credit. We believe available capital resources will be adequate to meet our working capital, debt service, and capital expenditure requirements for existing operations.



Our cash and cash equivalents consist of bank
balances and investments in money market funds. These investments have staggered maturity dates, none of which exceed three months. They have a high degree of liquidity since the securities are traded in public markets.



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On February 18, 2011, our Parent received a federal income tax refund
for fiscal 2010 in the amount of $38.5 million, which was transferred to us and used to pay down our Revolving Credit Facility.



|                                                                   |  |                                   |       |  
|------------------------------------------------------------------ |  | --------------------------------- | ----- | -
|                                                                   |  | Six Months EndedFebruary 28, 2011 |      
|                                                                   |  | (in millions)                     |      
|Significant uses of cash                                           |  |                                   |       |  
|Investing activities:                                              |  |                                   |       |  
|Additions to deferred turnaround costs                             |  |                                   | (6.0  | )
|Property, plant and equipment                                      |  |                                   |       |  
|Other general capital items (tank repairs, refinery piping, etc)   |  |                                   | (8.8  | )
|Environmental                                                      |  |                                   | (1.4  | )
|Retail maintenance (blacktop, roof, HVAC, rehab)                   |  |                                   | (1.2  | )
|Computers and equipment upgrade                                    |  |                                   | (.7   | )
|Retail petroleum upgrade                                           |  |                                   | (.1   | )
|State and federal mandates:                                        |  |                                   |       |  
|Renewable fuels                                                    |  |                                   | (3.2  | )
|Reduction of benzene and gasoline                                  |  |                                   | (2.8  | )
|                                                                   |  |                                   |       |  
|Total property, plant and equipment                                |  |                                   | (18.2 | )
|                                                                   |  |                                   |       |  
|Net cash used in investing activities                              |  |                                   | (24.2 | )
|                                                                   |  |                                   |       |  
|Financing activities:                                              |  |                                   |       |  
|Proceeds from issuance of common stock of non-controlling interest |  |                                   | 15.0  |  
|Net (reductions) borrowings on revolving credit facility           |  |                                   | (7.7  | )
|Principal reductions of long term debt                             |  |                                   | (.6   | )
|Deferred financing costs                                           |  |                                   | (.4   | )
|                                                                   |  |                                   |       |  
|Net cash provided by financing activities                          |  |                                   | 6.3   |  
|                                                                   |  |                                   |       |  
|Working capital items:                                             |  |                                   |       |  
|Refundable income taxes                                            |  |                                   | 36.4  |  
|Decrease in inventory                                              |  |                                   | 25.8  |  
|Accounts receivable increase                                       |  |                                   | (16.1 | )
|Accounts payable decrease                                          |  |                                   | (8.7  | )
|Prepaid expense increase                                           |  |                                   | (7.3  | )
|Sales, use and fuel taxes payable decrease                         |  |                                   | (5.8  | )
|Accrued liabilities decrease                                       |  |                                   | (1.3  | )
|Amounts due from affiliated companies, net increase                |  |                                   | (.6   | )
|Income taxes payable decrease                                      |  |                                   | (.5   | )
|                                                                   |  |                                   |       |  
|Cash provided by working capital items                             |  |                                   | 21.9  |  
|                                                                   |  |                                   |       |  



We require a
substantial investment in working capital which is susceptible to large variations during the year resulting from purchases of inventory and seasonal demands. Inventory purchasing activity is a function of sales activity and turnaround cycles for
the different refinery units.



Maintenance and non-discretionary capital expenditures have averaged approximately $6.0 million annually over the last
three years for the refining and marketing operations. Management does not foresee any increase in these maintenance and non-discretionary capital expenditures during fiscal year 2011.



Future liquidity, both short and long-term, will continue to be primarily dependent on
realizing a refinery margin sufficient to cover fixed and variable expenses, including planned capital expenditures. We expect to be able to meet our working capital, capital expenditure, contractual obligations, letter of credit and debt service
requirements out of cash flow from operations, cash on hand and borrowings under our Revolving Credit Facility



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with PNC Bank, N.A. as Agent Bank. Our revolving credit facility with PNC Bank, N.A., as Agent Bank (the Revolving Credit Facility) is $130,000,000. This provides the Company with
flexibility relative to its cash flow requirements in light of market fluctuations, particularly involving crude oil prices and seasonal business cycles and will assist the Company in meeting its working capital, ongoing capital expenditure needs
and for general corporate purposes. The agreement expires on November 27, 2011. Under the Revolving Credit Facility, the applicable margin is calculated on the average unused availability as follows: (a) for base rate borrowing, at the
greater of the Agent Banks prime rate the Federal Funds Open Rate plus .5%; or the Daily LIBOR rate plus 1%; plus an applicable margin of 0% to .5%; (b) for euro-rate based borrowings, at the LIBOR Rate plus an applicable margin of 1.75%
to 2.25%. The Agent Banks prime rate at February 28, 2011 was 3.25%.



The Revolving Credit Facility is secured primarily by certain cash accounts, accounts receivable and inventory. Until maturity, we may borrow on a borrowing base formula as set forth in the facility. We
had standby letters of credit of $4.4 million as of February 28, 2011 and there were outstanding borrowings under the Revolving Credit Facility in the amount of $60.0 million resulting in net availability of $65.6 million. As of April 14,
2011 there was $29.0 million outstanding on the $130 million Revolving Credit Facility and standby letters of credit in the amount of $4.4 million, resulting in a net availability of $96.6 million and the Company had full access to it. The
Companys working capital ratio was 1.9 as of February 28, 2011.



The Company has received a written proposal from PNC Bank, N.A. for the syndication of an amended $175,000,000 revolving credit facility, which contemplates PNC Bank, N.A., underwriting up to $75,000,000
of such new facility subject to definitive documentation, due diligence, and other customary conditions.



On January 14, 2011, we entered into an Asphalt Purchase and Sale Agreement and Asphalt Product Throughput and
Terminal Services Agreement (together, the Asphalt Agreements) with United Refining Asphalt, Inc. (URA), a special purpose entity formed by United Refining, Inc. (our Parent) in connection with the Asphalt
Agreements, under the terms of which, we may sell asphalt to URA during the winter months at such times and in such amounts as may be mutually agreed by the parties, and are required to provide storage and related services until such asphalt is
resold and delivered to third parties during the summer months. URA has received financing for up to $30 million in purchases under the agreements, and was capitalized with $15 million in cash by our Parent.



The winter months are typically a time of
depressed asphalt pricing. This agreement provides us with incremental liquidity to allow us to continue to produce asphalt during the winter months in anticipation of an improved pricing environment during the summer months. Under the Asphalt
Agreements terms, if we sell asphalt to URA during the winter and after URA has made all outstanding payments under a loan agreement to a third party lender, including interest, URA would pay us 90% of the profits from summertime asphalt sales
to third parties, less an accommodation fee of $3.00 per ton of asphalt sold.



We have determined that URA meets the definition of a variable interest entity and, in connection with the Asphalt Agreements, the Company is the primary beneficiary. Therefore we are required to treat
URA similar to a consolidated subsidiary for financial reporting purposes. As a result, we will consolidate the financial results of URA, including its entire balance sheet with the shareholders equity of URA displayed as a component of equity
(noncontrolling interest) and its entire income statement (after intercompany eliminations). The net income (loss) of URA will not increase (or decrease) our net income, but rather will be included in our equity section as an increase (or decrease)
to noncontrolling interest.



The
URA credit facility is secured by URAs cash accounts, accounts receivable and inventory. The applicable margin under this facility is; (a) for base rate borrowings the Agent Banks prime rate plus an applicable margin of 2.75%;
(b) for euro-rate based borrowings, at the LIBOR Rate plus an applicable margin of 3.75%. The Agent Banks prime rate at February 28, 2011 was 3.25%. The $30 million facility will expire September 30, 2011. As of
February 28, 2011, URA had borrowed $15.3 million under this facility. As of April 14, 2011, URA had borrowings of $13.8 million under the facility.



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Although we are not aware of any pending circumstances which would change
our expectation, changes in the tax laws, the imposition of and changes in federal and state clean air and clean fuel requirements and other changes in environmental laws and regulations may also increase future capital expenditure levels. Future
capital expenditures are also subject to business conditions affecting the industry. We continue to investigate strategic acquisitions and capital improvements to our existing facilities.



Federal, state and local laws and regulations relating to the environment affect nearly all of
our operations. As is the case with all the companies engaged in similar industries, we face significant exposure from actual or potential claims and lawsuits involving environmental matters. Future expenditures related to environmental matters
cannot be reasonably quantified in many circumstances due to the uncertainties as to required remediation methods and related clean-up cost estimates. We cannot predict what additional environmental legislation or regulations will be enacted or
become effective in the future or how existing or future laws or regulations will be administered or interpreted with respect to products or activities to which they have not been previously applied.



Seasonal Factors



Seasonal factors affecting the
Companys business may cause variation in the prices and margins of some of the Companys products. For example, demand for gasoline tends to be highest in spring and summer months, while demand for home heating oil and kerosene tends to
be highest in winter months.



As a
result, the margin on gasoline prices versus crude oil costs generally tends to increase in the spring and summer, while margins on home heating oil and kerosene tend to increase in winter.



Inflation



The effect of inflation on the Company has not been significant during the last five fiscal years.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk.
|------- | -----------------------------------------------------------



The Company uses its revolving credit facility to finance a portion of its operations. As of
April 14, 2011, there was $29.0 million outstanding under the revolving line of credit. These on-balance sheet financial instruments, to the extent they provide for variable rates, expose the Company to interest rate risk resulting from changes
in the PNC Prime rate, the Federal Funds or LIBOR rate.



The Company has exposure to price fluctuations of crude oil and refined products. The Company does not manage the price risk related to all of its inventories of crude oil and refined products with a
permanent formal hedging program, but does manage its risk exposures by managing inventory levels.The Company had no open future positions at February 28, 2011.



See also Recent Developments section of
Item 2Managements Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the Companys hedging activities.



|Item 4. | Controls and Procedures.
|------- | ------------------------



Our management, with the participation of our chief executive officer and chief financial officer, evaluated the
effectiveness of our disclosure controls and procedures as of February 28, 2011. The term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of
a company that are designed to ensure that information required to be disclosed by a company in the reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the companys management, including its
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls



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and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of February 28, 2011, our chief executive officer and chief financial officer concluded that, as of such date,
our disclosure controls and procedures were effective at the reasonable assurance level.



There have not been any changes in the Companys internal controls over financial reporting that occurred during the
Companys fiscal quarter ended February 28, 2011 that has materially affected, or is reasonably likely to materially affect, the Companys internal controls over financial reporting.



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|Part II | OTHER INFORMATION
|------- | -----------------



|Item 1. | Legal Proceedings.
|------- | ------------------



None.



|Item 1A. | Risk Factors.
|-------- | -------------



The First Priority Senior Secured Notes due 2018 are secured by certain assets of the Company and a foreclosure on
such liens could adversely affect our business.



The First Priority Senior Secured Notes due 2018 are secured by a pledge of the stock of our subsidiary Kiantone Pipeline Corporation and, subject to certain exceptions, by a mortgage lien on and a
security interest in the assets comprising the refinery. In case of a continuing event of default by the Company, the collateral agent may exercise all rights of a mortgagee and/or secured party under applicable law, including, without limitation,
transferring to itself or a nominee title to such collateral, which could adversely affect our business.



We may issue additional notes and enter into hedging activities that would be secured by the same collateral
securing the First Priority Senior Secured Notes due 2018.



Subject to the covenants and conditions contained in the indenture, we are permitted to issue additional notes and enter into hedging obligations secured by a lien that ranks equally with the First
Priority Senior Secured Notes due 2018. In addition, the estimated net book value of the collateral is substantially less than the outstanding aggregate principal amount of the First Priority Senior Secured Notes due 2018 and the mortgage on the
refinery is limited to a stated maximum principal amount of $450 million. To the extent that the Senior Secured Notes due 2018, any obligations in respect of hedging arrangements and any other obligations secured by the mortgagee exceed $450
million, the principal amount of such obligations in excess of such capped amount is not secured by the mortgage. Moreover, by its nature, some or all of the collateral may be illiquid and may have no readily ascertainable market value. Any
additional obligations, and the limited net book value and potential illiquidity of the collateral, may limit the recovery from the realization of the value of such collateral available to satisfy the holders of the First Priority Senior Secured
Notes due 2018.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------



None.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------



None.



|Item 4. | (Removed and Reserved).
|------- | -----------------------



None.



|Item 5. | Other Information.
|------- | ------------------



None.



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|Item 6. | Exhibits.
|------- | ---------



|             |  |                                                                                                                                                                                                                                                                                  
|------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             | 
|Exhibit 10.1 |  | Purchase Agreement, dated February 25, 2011, by and between United Refining Company and Credit Suisse Securities (USA) LLC relating to the purchase of
$365,000,000 of 10.500% First Priority Senior Secured Notes Due 2018                                                      
|             | 
|Exhibit 10.2 |  | Amendment No. 9 to Credit Agreement, dated January 14, 2011, by and among URC, URCP, KPC, CFI, K-FC and the Banks party thereto and PNC Bank, National
Association, as Agent. RC, URCP, KPC, CFI, K-FC and the Banks party thereto and PNC Bank, National Association, as Agent. 
|             | 
|Exhibit 10.3 |  | Amendment No. 10 to Credit Agreement, dated February 3, 2011, by and among URC, URCP, KPC, CFI, K-FC and the Banks party thereto and PNC Bank, National
Association, as Agent. RC, URCP, KPC, CFI, K-FC and the Banks party thereto and PNC Bank, National Association, as Agent.
|             | 
|Exhibit 31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                               
|             | 
|Exhibit 31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                               
|             | 
|Exhibit 32.1 |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002                                                                                                    



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



UNITED REFINING COMPANY
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



KIANTONE PIPELINE CORPORATION
(Registrant)/s/ Myron L. Turfitt
Myron L. Turfitt
President/s/ James E. MurphyJames E. Murphy Chief Financial Officer




33



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



UNITED REFINING COMPANY OF
PENNSYLVANIA
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




34



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



KIANTONE PIPELINE COMPANY
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




35



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



UNITED JET CENTER, INC.
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




36



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



KWIK-FILL CORPORATION
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




37



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



INDEPENDENT GASOLINE AND OIL COMPANY OF ROCHESTER, INC.
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




38



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



BELL OIL CORP.
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




39



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



PPC, INC.
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




40



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



SUPER TEST PETROLEUM, INC.
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




41



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



KWIK-FIL, INC.
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




42



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



VULCAN ASPHALT REFINING CORPORATION
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President/s/ James E.
MurphyJames E. Murphy
Chief Financial Officer




43



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SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: April 14, 2011



COUNTRY FAIR, INC.
(Registrant)/s/ Myron L. TurfittMyron L. Turfitt
President and Chief Operating Officer/s/ James E.
MurphyJames E. Murphy
Vice President Finance




44