##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2005                                                 
|          
|OR        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to           .                                 

Commission File Number: 1-10398


Giant Industries, Inc.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|DELAWARE                                                           |  | 86-0642718                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|23733 North Scottsdale Road,scottsdale,
    arizona                |  | 85255                                   
|(Address of principal executive offices)                           |  | (Zip Code)                              

Registrants telephone number, including area code:


(480) 585-8888


Securities registered pursuant to Section 12(b) of the
Act:


|                             |  |                                          
|---------------------------- |  | -----------------------------------------
|Title of Each Class          |  | Name of Each Exchange on Which Registered
|                             |  |                                          
|Common Stock, $.01 par value |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the
Act:


None


o þ


o þ


þ o


S-K 10-K 10-K. þ


12b-2). þ o


12b-2


|                          |  |                     |  |                        
|------------------------- |  | ------------------- |  | -----------------------
|Large accelerated filer o |  | Accelerated filer þ |  | Non-accelerated filer o

12b-2 o þ






DOCUMENTS INCORPORATED BY REFERENCE


10-K










---

TABLE OF CONTENTS



|              |                                                                                               |  |  |  |  |  |  | 
|------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | Items 1. and 2. Business and Properties.                                                     
|              | Item 1A. Risk Factors.                                                                       
|              | Item 3. Legal Proceedings.                                                                   
|              | Item 4. Submission of Matters to a Vote of Security Holders.                                 
|PART II      
|              | Item 5. Market For the Registrants Common Equity and Related Stockholder Matters            
|              | Item 6. Selected Financial Data.                                                             
|              | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|              | Item 7A. Quantitative and Qualitative Disclosures about Market Risk                          
|              | Item 8. Financial Statements and Supplementary Data                                          
|              | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III     
|              | Item 10. Directors and Executive Officers of the Registrant                                  
|              | Item 11. Executive Compensation                                                              
|              | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|              | Item 13. Certain Relationships and Related Transactions                                      
|              | Item 14. Principal Accountant Fees and Services                                              
|PART IV      
|              | Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|SIGNATURES   
|Exhibit 3.23 
|Exhibit 10.11
|Exhibit 10.12
|Exhibit 10.20
|Exhibit 21.1 
|Exhibit 23.1 
|Exhibit 31.1 
|Exhibit 31.2 
|Exhibit 32.1 
|Exhibit 32.2 



---



##### Table of Contents






PART I







|                |                         
|--------------- | ------------------------
|Items 1. and 2. | Business and Properties.

General






| |   |                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | on the East Coast  primarily in Virginia, Maryland,
    and North Carolina; and                                                                 
|
| |  | in the Southwest  primarily in New Mexico, Arizona,
    and Colorado, with a concentration in the Four Corners area
    where these states meet.







| |   |                      
| | - | ---------------------
| |  | our refining group;  
|
| |  | our retail group; and
|
| |  | our wholesale group. 

Refining Group




Retail Group




Wholesale Group




2



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##### Table of Contents



Refining Group




| |                      
| | ---------------------
| | Our Yorktown Refinery



| |         
| | --------
| | Refining







|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |        |        |   |      |        |        |  
|-------------------------------------- | ------------------------------------- | ----------------------- | ---- | ------ | ------ | - | ---- | ------ | ------ | - | ------- | ------ | ------ | - | ---- | ------ | ------ | -
|                                       |                                       | Year Ended December 31, |     
|                                       |                                       |                         |     
|                                       |                                       | 2005                    |      |        | 2004   |   |      | 2003   |        |   | 2002(1) |       
|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |       
|Feedstock throughput(2):               |                                       |                         |      |        |        |   |      |        |        |   |         |        |        |   |      |       
|                                       | Crude oil                             |                         |      | 54,500 |        |   |      | 52,000 |        |   |         | 51,600 |        |   |      | 53,300 |       
|                                       | Residual feedstocks and intermediates |                         |      | 6,500  |        |   |      | 6,900  |        |   |         | 6,100  |        |   |      | 4,000  |       
|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |       
|                                       |                                       | Total                   |      |        | 61,000 |   |      |        | 58,900 |   |         |        | 57,700 |   |      |        | 57,300 |  
|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |       
|Crude oil throughput (as a % of total) |                                       |                         | 89   | %      |        |   | 88   | %      |        |   | 89      | %      |        |   | 93   | %     
|Rated crude oil capacity utilized      |                                       |                         | 88   | %      |        |   | 84   | %      |        |   | 83      | %      |        |   | 86   | %     
|Refinery margin ($ per barrel)         |                                       | $                       | 8.72 |        |        | $ | 5.60 |        |        | $ | 4.07    |        |        | $ | 2.32 |       
|Products(2):                           |                                       |                         |      |        |        |   |      |        |        |   |         |        |        |   |      |       
|                                       | Gasoline                              |                         |      | 29,000 |        |   |      | 29,600 |        |   |         | 30,200 |        |   |      | 30,400 |       
|                                       | Diesel fuel and No. 2 fuel oil        |                         |      | 23,900 |        |   |      | 20,900 |        |   |         | 20,500 |        |   |      | 19,100 |       
|                                       | Other(3)                              |                         |      | 8,100  |        |   |      | 8,400  |        |   |         | 7,000  |        |   |      | 7,800  |       
|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |       
|                                       |                                       | Total                   |      |        | 61,000 |   |      |        | 58,900 |   |         |        | 57,700 |   |      |        | 57,300 |  
|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |       
|High-value products (as a % of total): |                                       |                         |      |        |        |   |      |        |        |   |         |        |        |   |      |       
|                                       | Gasoline                              |                         |      | 47     | %      |   |      | 50     | %      |   |         | 52     | %      |   |      | 53     | %     
|                                       | Diesel fuel and No. 2 fuel oil        |                         |      | 39     | %      |   |      | 35     | %      |   |         | 35     | %      |   |      | 33     | %     
|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |       
|                                       |                                       | Total                   |      |        | 86     | % |      |        | 85     | % |         |        | 87     | % |      |        | 86     | %
|                                       |                                       |                         |      |        |        |   |      |        |        |   |         |       






|    |                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Since our acquisition of the refinery on May 14, 2002.                                                                                                                                     
|   
|(2) | Average barrels per day.                                                                                                                                                                   
|   
|(3) | Other products include LPGs, fuel oil, and anode grade
    petroleum coke. The quantities of anode grade petroleum coke
    have been converted to the equivalent average barrels per day.



| |                                
| | -------------------------------
| | Yorktown Refinery Fire Incident



3



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##### Table of Contents







45-day






| |            
| | -----------
| | Turnarounds





30-day




| |                    
| | -------------------
| | Raw Material Supply



4



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##### Table of Contents







| |                           
| | --------------------------
| | Marketing and Distribution

The Yorktown Markets.




Dock System and Storage.




| |                       
| | ----------------------
| | Refined Product Sales.



|                                                                |  |      |    |   |      |  |    |  
|--------------------------------------------------------------- |  | ---- | -- | - | ---- |  | -- | -
|                                                                |  | 2005 |    |   | 2004 | 
|                                                                |  |      |    |   |      | 
|Direct sales to wholesalers, retailers and commercial customers |  |      | 69 | % |      |  | 71 | %
|Sales and exchanges with large oil companies                    |  |      | 31 | % |      |  | 29 | %



| |               
| | --------------
| | Transportation





| |                                     
| | ------------------------------------
| | Our Ciniza and Bloomfield Refineries



| |         
| | --------
| | Refining



5



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##### Table of Contents











|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |      |        |        |   |      |        |        |  
|-------------------------------------- | ---------------------------------- | ----------------------- | ----- | ------ | ------ | - | ---- | ------ | ------ | - | ---- | ------ | ------ | ---- | ---- | ------ | ------ | - | ---- | ------ | ------ | -
|                                       |                                    | Year Ended December 31, |      
|                                       |                                    |                         |      
|                                       |                                    | 2005                    |       |        | 2004   |   |      | 2003   |        |   | 2002 |        |        | 2001 |     
|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |     
|Feedstock throughput:(1)               |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |      |        |        |   |      |       
|                                       | Crude oil                          |                         |       | 23,200 |        |   |      | 22,900 |        |   |      | 24,500 |        |      |      | 26,600 |        |   |      | 27,000 |       
|                                       | Natural gas liquids and oxygenates |                         |       | 6,200  |        |   |      | 5,400  |        |   |      | 6,100  |        |      |      | 5,900  |        |   |      | 6,200  |       
|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |     
|                                       |                                    | Total                   |       |        | 29,400 |   |      |        | 28,300 |   |      |        | 30,600 |      |      |        | 32,500 |   |      |        | 33,200 |  
|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |     
|Crude oil throughput (as a % of total) |                                    |                         | 79    | %      |        |   | 81   | %      |        |   | 80   | %      |        |      | 82   | %      |        |   | 82   | %     
|Rated crude oil capacity utilized      |                                    |                         | 62    | %      |        |   | 61   | %      |        |   | 67   | %      |        |      | 72   | %      |        |   | 73   | %     
|Refinery margin ($ per barrel)         |                                    | $                       | 14.03 |        |        | $ | 8.96 |        |        | $ | 8.81 |        |        | $    | 6.84 |        |        | $ | 9.69 |       
|Products:(1)                           |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |      |        |        |   |      |       
|                                       | Gasoline                           |                         |       | 20,100 |        |   |      | 18,600 |        |   |      | 20,900 |        |      |      | 21,400 |        |   |      | 21,400 |       
|                                       | Diesel fuel                        |                         |       | 6,500  |        |   |      | 6,600  |        |   |      | 6,900  |        |      |      | 8,100  |        |   |      | 8,600  |       
|                                       | Other                              |                         |       | 2,800  |        |   |      | 3,100  |        |   |      | 2,800  |        |      |      | 3,000  |        |   |      | 3,200  |       
|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |     
|                                       |                                    | Total                   |       |        | 29,400 |   |      |        | 28,300 |   |      |        | 30,600 |      |      |        | 32,500 |   |      |        | 33,200 |  
|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |     
|High Value Products (as a % of total): |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |      |        |        |   |      |       
|                                       | Gasoline                           |                         |       | 71     | %      |   |      | 67     | %      |   |      | 68     | %      |      |      | 66     | %      |   |      | 65     | %     
|                                       | Diesel fuel                        |                         |       | 22     | %      |   |      | 23     | %      |   |      | 23     | %      |      |      | 25     | %      |   |      | 26     | %     
|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |     
|                                       |                                    | Total                   |       |        | 93     | % |      |        | 90     | % |      |        | 91     | %    |      |        | 91     | % |      |        | 91     | %
|                                       |                                    |                         |       |        |        |   |      |        |        |   |      |        |        |      |     






|    |                         
|--- | ------------------------
|(1) | Average barrels per day.



| |            
| | -----------
| | Turnarounds





| |                    
| | -------------------
| | Raw Material Supply



6



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##### Table of Contents













| |                           
| | --------------------------
| | Marketing and Distribution

The Four Corners Market.


Terminal Operations.






| |                       
| | ----------------------
| | Refined Product Sales.



|                                                                |  |      |    |   |      |  |    |  
|--------------------------------------------------------------- |  | ---- | -- | - | ---- |  | -- | -
|                                                                |  | 2005 |    |   | 2004 | 
|                                                                |  |      |    |   |      | 
|Direct sales to wholesalers, retailers and commercial customers |  |      | 57 | % |      |  | 60 | %
|Direct sales to our own retail units                            |  |      | 23 | % |      |  | 19 | %
|Sales and exchanges with large oil companies                    |  |      | 17 | % |      |  | 18 | %
|Other                                                           |  |      | 3  | % |      |  | 3  | %



| |               
| | --------------
| | Transportation



7



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##### Table of Contents



13-mile






Retail Group












|             |                                          |                                   |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|------------ | ---------------------------------------- | --------------------------------- |  | - | ------- | - |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|             |                                          | Year Ended December 31,           | 
|             |                                          |                                   | 
|             |                                          | 2005                              |  |   | 2004    |   |  | 2003 |         |   | 2002 |   |         | 2001 | 
|             |                                          |                                   |  |   |         |   |  |      |         |   |      |   |         |      | 
|Retail Group |                                          |                                   |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |  
|             | Service Stations (Continuing operations) |                                   |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |        
|             |                                          | Fuel gallons sold (in thousands)  |  |   | 162,637 |   |  |      | 156,917 |   |      |   | 148,605 |      |  |   | 148,469 |   |  |   | 156,167 |  
|             |                                          | Fuel margin ($/gallon)            |  | $ | 0.19    |   |  | $    | 0.18    |   |      | $ | 0.20    |      |  | $ | 0.15    |   |  | $ | 0.17    |  
|             |                                          | Merchandise sold ($ in thousands) |  | $ | 140,422 |   |  | $    | 134,013 |   |      | $ | 127,009 |      |  | $ | 123,630 |   |  | $ | 123,515 |  
|             |                                          | Merchandise margin                |  |   | 27      | % |  |      | 24      | % |      |   | 29      | %    |  |   | 27      | % |  |   | 28      | %
|             |                                          | Number of outlets at year end     |  |   | 123     |   |  |      | 123     |   |      |   | 123     |      |  |   | 123     |   |  |   | 123     |  
|             | Travel Center(1)                         |                                   |  |   |         |   |  |      |         |   |      |   |         |      |  |   |         |   |  |   |        
|             |                                          | Fuel gallons sold (in thousands)  |  |   |        |   |  |      |        |   |      |   | 10,227  |      |  |   | 24,906  |   |  |   | 24,964  |  
|             |                                          | Fuel margin ($/gallon)            |  |   |        |   |  |      |        |   |      | $ | 0.07    |      |  | $ | 0.09    |   |  | $ | 0.10    |  
|             |                                          | Merchandise sold ($ in thousands) |  |   |        |   |  |      |        |   |      | $ | 2,703   |      |  | $ | 6,103   |   |  | $ | 6,128   |  
|             |                                          | Merchandise margin                |  |   |        |   |  |      |        |   |      |   | 42      | %    |  |   | 44      | % |  |   | 44      | %
|             |                                          | Number of outlets at year end     |  |   |        |   |  |      |        |   |      |   |        |      |  |   | 1       |   |  |   | 1       |  






|    |                                                                                
|--- | -------------------------------------------------------------------------------
|(1) | 2003 figures are from January 1 to June 19 when the Travel
    Center was sold.

8



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##### Table of Contents



Wholesale Group






|                                       |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|-------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                       |  | Year Ended December 31, |        
|                                       |  |                         |        
|                                       |  | 2005                    |         |   | 2004 |   |         | 2003 |  |   | 2002    |   |  | 2001 |        
|                                       |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |        
|Phoenix Fuel                           |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Fuel gallons sold (in thousands)(1)    |  |                         | 479,083 |   |      |   | 473,009 |      |  |   | 429,198 |   |  |      | 376,711 |   |  |   | 394,158 |  
|Fuel margin ($/gallon)(2)              |  | $                       | 0.07    |   |      | $ | 0.05    |      |  | $ | 0.05    |   |  | $    | 0.05    |   |  | $ | 0.05    |  
|Lubricant sales ($ in thousands)       |  | $                       | 33,981  |   |      | $ | 30,597  |      |  | $ | 24,475  |   |  | $    | 21,544  |   |  | $ | 22,347  |  
|Lubricant margin                       |  |                         | 16      | % |      |   | 13      | %    |  |   | 15      | % |  |      | 17      | % |  |   | 17      | %
|Dial Oil(3)                            |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Fuel gallons sold (in thousands)       |  |                         | 53,453  |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Fuel margins ($/gallon)                |  | $                       | 0.15    |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Lubricant sales ($ in thousands)       |  | $                       | 12,327  |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Lubricant margins                      |  |                         | 15      | % |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Merchandise sales ($ in thousands)     |  | $                       | 4,542   |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Merchandise margins(4)                 |  |                         | 28      | % |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  
|Operating retail outlets at period end |  |                         | 12      |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |        |  






|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes fuel gallons supplied to our retail group at no margin.                                                                                      
|   
|(2) | Calculated as fuel revenues, including delivery charges billed
    to the customer, less cost of fuel products sold, divided by
    fuel gallons sold.
|   
|(3) | Acquired on July 12, 2005.                                                                                                                            
|   
|(4) | Includes only retail store merchandise sales.                                                                                                         

Employees






9



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##### Table of Contents



Other Matters




| |                       
| | ----------------------
| | Competitive Conditions

We operate in a highly competitive industry.






| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | the quality, quantity and delivered costs of crude oil, natural
    gas liquids, and other refinery feedstocks and blendstocks;
|
| |  | refinery throughput and processing efficiencies;                                                                               
|
| |  | refined product mix;                                                                                                           
|
| |  | refined product selling prices;                                                                                                
|
| |  | refinery processing costs per barrel;                                                                                          
|
| |  | the cost of delivering refined products to markets; and                                                                        
|
| |  | the ability of competitors to deliver refined products into our
    market areas by pipeline or other means.                   





| |   |                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the level of customer service provided;                                                                                                                 
|
| |  | the location of our service stations;                                                                                                                   
|
| |  | product selling prices;                                                                                                                                 
|
| |  | product availability and cost, including prices being offered
    for refined products by major oil companies to our competitors
    in certain markets;
|
| |  | the appearance and cleanliness of our service stations;                                                                                                 
|
| |  | brand acceptance; and                                                                                                                                   
|
| |  | the development of gasoline retail operations by non-traditional
    marketers, such as supermarkets and club membership warehouses.                    





| |   |                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | product availability and cost, including prices being offered
    for refined products by major oil companies to our competitors
    in certain markets;
|
| |  | the level of customer service provided;                                                                                                                 
|
| |  | product selling prices; and                                                                                                                             
|
| |  | business integration of new technology.                                                                                                                 



| |                                              
| | ---------------------------------------------
| | Competitors in the Yorktown Refinerys Market



10



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##### Table of Contents





| |                                                   
| | --------------------------------------------------
| | Competitors in the Four Corners Refineries Market







| |                                     
| | ------------------------------------
| | Regulatory and Environmental Matters





| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | the discharge of pollutants into the soil, air and water;                                              
|
| |  | product specifications;                                                                                
|
| |  | the generation, treatment, storage, transportation, and disposal
    of solid and hazardous wastes; and
|
| |  | employee health and safety.                                                                            





| |                         
| | ------------------------
| | Environmental Compliance







Motor Fuel Programs.




| |   |                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Low Sulfur Fuels. Rules issued by the federal
    Environmental Protection Agency (EPA) require
    refiners to reduce the sulfur content in gasoline and diesel
    fuels. Some refiners began producing gasoline that satisfies low
    sulfur gasoline standards in 2004, with most refiners required
    to be in full

11



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##### Table of Contents



| |  |                                                                                                                                                                                                                                                                                                                   
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | compliance for all production in 2006. Most refiners also must
    begin producing highway diesel fuel that satisfies low sulfur
    diesel standards by June 2006. All refiners and importers must
    be in full compliance with the new gasoline and diesel standards
    by the end of 2010 without exception.



| |                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For a discussion of how these low sulfur fuels rules affect our
    operations, see the discussion in our Risk Factors section in
    Item 1A regarding compliance with various regulatory and
    environmental laws and regulations, and the discussion in our
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations in Item 7 captioned Capital
    Expenditures.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Reformulated Gasoline. Federal law requires the sale of
    specially formulated gasoline in designated areas of the
    country, including some market areas serviced by the Yorktown
    refinery. The Yorktown refinery manufactures gasoline that
    satisfies the requirements of its markets. Motor fuels produced
    by our Four Corners refineries are not sold in any areas where
    the applicable law requires specially formulated gasoline.
    Arizona, however, has adopted a cleaner burning gasoline program
    that is applicable to gasolines sold or used in Maricopa County,
    Arizona, which includes the Phoenix metropolitan area. We do not
    presently manufacture gasolines that satisfy the Maricopa
    County, Arizona specifications, but we do produce gasolines that
    meet the specifications applicable to other areas of Arizona. We
    are able to purchase or exchange for cleaner burning gasolines
    to supply our needs in the Maricopa County area.
|
| |  | MTBE. Methyl tertiary butyl ether (MTBE) is a
    gasoline blending component used by many refiners in producing
    specially formulated gasoline. Some refiners have said they plan
    to discontinue the use of MTBE as a blending component in 2006,
    and we also anticipate discontinuing the use of MTBE at our
    refineries in 2006. We do not expect that discontinuing the use
    of MTBE will have a material impact on our results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Oxygenates. The use of gasoline containing oxygenates has
    been government-mandated in some areas in which we sell motor
    vehicle fuel. Oxygenates are oxygen-containing compounds that
    can be used as a supplement to reduce carbon monoxide emissions.
    Beginning in May 2006, federal law no longer requires a minimum
    oxygen content in reformulated fuels. Some states and localities
    may continue to require that gasoline contain oxygenates. We
    anticipate that we will be able to purchase sufficient
    quantities of oxygenates at acceptable prices for the
    foreseeable future.                                                                                                                                                                                                                                                                                                                                                                                 

MTBE Litigation.


Alleged Regulatory Violations.




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Discharges, Releases and Cleanup Activities.








| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | new accidental discharges;                                                                                               
|
| |  | we may fail to adequately remedy past discharges;                                                                        
|
| |  | governmental agencies may impose fines for past or future
    contamination;                                             
|
| |  | we may not receive anticipated levels of reimbursement from
    third parties, including state environmental agencies; or
|
| |  | third parties may assert claims against us for damages allegedly
    arising out of past or future contamination.        



| |                  
| | -----------------
| | Health and Safety





| |                                                 
| | ------------------------------------------------
| | Changes in Environmental, Health and Safety Laws





| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | the installation and operation of refinery equipment, pollution
    control systems, and equipment we currently do not possess;
|
| |  | the acquisition or modification of permits applicable to our
    activities; and                                               
|
| |  | the initiation or modification of cleanup activities.                                                                          



| |              
| | -------------
| | Rights-Of-Way

rights-of rights-of


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right-of right-of


rights-of rights-of rights-of


rights-of




| |               
| | --------------
| | Jet Fuel Claim





| |             
| | ------------
| | NYSE Matters

10-K




| |                       
| | ----------------------
| | Additional Information

10-K, 10-Q, 8-K, www.Giant.com www.sec.gov







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





| |                                                             
| | ------------------------------------------------------------
| | We have debt that could adversely affect our
    operations.





| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | limit our ability to use our cash flow, or obtain additional
    financing, for future working capital, capital expenditures,
    acquisitions or other general corporate purposes;

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| |   |                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | restrict our ability to pay dividends;                                                                                                                                                                                         
|
| |  | require a substantial portion of our cash flow from operations
    to make debt service payments;                                                                                                                              
|
| |  | limit our flexibility to plan for, or react to, changes in our
    business and industry conditions;                                                                                                                           
|
| |  | place us at a competitive disadvantage compared to our less
    leveraged competitors; and                                                                                                                                     
|
| |  | increase our vulnerability to the impact of adverse economic and
    industry conditions and, to the extent of our outstanding debt
    under our floating rate debt facilities, the impact of increases
    in interest rates.





| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | Our debt instruments impose restrictions on us that may
    adversely affect our ability to operate our business.





| |   |                                                   
| | - | --------------------------------------------------
| |  | create liens;                                     
|
| |  | incur or guarantee debt;                          
|
| |  | pay dividends;                                    
|
| |  | repurchase shares of our common stock;            
|
| |  | sell certain assets or subsidiary stock;          
|
| |  | engage in certain mergers;                        
|
| |  | engage in certain transactions with affiliates; or
|
| |  | alter our current line of business.               





| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | We assumed liabilities in connection with the acquisition
    of our Yorktown refinery.



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on-site






clean-up clean-up


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| |                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we cannot maintain an adequate supply of feedstocks at
    our Ciniza and Bloomfield refineries, our operating results may
    be adversely affected.













| |   |                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | evaluating potentially economic sources of crude oil produced
    outside the Four Corners area, including ways to reduce raw
    material transportation costs to our refineries;
|
| |  | evaluating ways to encourage further production in the Four
    Corners area;                                                                                                     
|
| |  | changes in operation/configuration of equipment at one or both
    refineries to further the integration of the two refineries, and
    reduce fixed costs; and                   
|
| |  | with sufficient further decline in raw material supply, the
    temporary, partial or permanent discontinuance of operations at
    one or both refineries.                       



rights-of rights-of


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rights-of




| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | The volatility of crude oil prices and refined product
    prices may adversely affect our business, financial condition
    and operating results.





| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | the supply of and demand for crude oil, gasoline and other
    refined products;                                                  
|
| |  | changes in the economy;                                                                                                           
|
| |  | changes in the level of foreign and domestic production of crude
    oil and refined products;                                    
|
| |  | worldwide political conditions;                                                                                                   
|
| |  | the extent of government regulations; and                                                                                         
|
| |  | local factors, including market conditions, pipeline capacity,
    and the level of operations of other refineries in our markets.







| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | Our industry is highly competitive, and we may not be able
    to compete effectively against larger competitors with greater
    resources.



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| |                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The completion of certain pipeline projects could result
    in increased competition by increasing the amount of refined
    products available in the Albuquerque, El Paso, Tucson, and
    Phoenix market areas and other market areas.





| |                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------
| | The completion of certain projects and refinery
    improvements could result in increased competition in the Four
    Corners area.





| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Any significant interruptions in the operations of any of
    our refineries could materially and adversely affect our
    business, financial condition and operating results.







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45-day




| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | Our operations are subject to various hazards that are not
    fully insured, and our insurance premiums could increase.







| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | Compliance with various regulatory and environmental laws
    and regulations will increase the cost of operating our
    business.







20



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clean-up




| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our operations are inherently subject to discharges or
    other releases of petroleum or hazardous substances for which we
    may face significant liabilities.










|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.



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|        |                                                         
|------- | --------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders.



Executive Officers of the Registrant




|                  |  |     |    |  |          |                                                                                           |                         |  |               | 
|----------------- |  | --- | -- |  | -------- | ----------------------------------------------------------------------------------------- | ----------------------- |  | ------------- | 
|Name              |  | Age |    |  | Position |                                                                                           | Executive Officer Since | 
|                  |  |     |    |  |          |                                                                                           |                         | 
|Fred L. Holliger  |  |     | 58 |  |          | Director, Chairman and Chief Executive Officer                                            |                         |  | October 1989  | 
|Morgan Gust       |  |     | 58 |  |          | President                                                                                 |                         |  | August 1990   | 
|Mark B. Cox       |  |     | 47 |  |          | Executive Vice President, Treasurer, Chief Financial Officer,
    and Assistant Secretary |                         |  | February 1999 | 
|C. Leroy Crow     |  |     | 55 |  |          | Executive Vice President of our Refining Group Strategic
    Business Unit                |                         |  | February 2000 | 
|Jack W. Keller    |  |     | 61 |  |          | President of Phoenix Fuel Strategic Business Unit                                         |                         |  | February 1999 | 
|Robert C. Sprouse |  |     | 49 |  |          | Executive Vice President of our Retail Group Strategic Business
    Unit                  |                         |  | April 2003    | 
|S. Leland Gould   |  |     | 49 |  |          | Executive Vice President, Governmental Affairs and Real Estate                            |                         |  | March 2002    | 
|Kim H. Bullerdick |  |     | 52 |  |          | Senior Vice President, General Counsel, and Secretary                                     |                         |  | February 1999 | 
|Gregory A. Barber |  |     | 48 |  |          | Vice President, Chief Accounting Officer, and Assistant Secretary                         |                         |  | April 2004    | 
|Natalie R. Dopp   |  |     | 34 |  |          | Vice President, Human Resources                                                           |                         |  | April 2004    | 











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PART II







|        |                                                                              
|------- | -----------------------------------------------------------------------------
|Item 5. | Market For the Registrants Common Equity and Related
    Stockholder Matters



|                   |  |      |       |  |     |   |       | 
|------------------ |  | ---- | ----- |  | --- | - | ----- | 
|Quarter Ended      |  | High |       |  | Low |  
|                   |  |      |       |  |     |  
|December 31, 2005  |  | $    | 60.50 |  |     | $ | 47.80 | 
|September 30, 2005 |  |      | 59.74 |  |     |   | 35.90 | 
|June 30, 2005      |  |      | 36.49 |  |     |   | 25.52 | 
|March 31, 2005     |  |      | 31.81 |  |     |   | 23.54 | 
|December 31, 2004  |  | $    | 28.98 |  |     | $ | 22.00 | 
|September 30, 2004 |  |      | 27.25 |  |     |   | 20.29 | 
|June 30, 2004      |  |      | 22.16 |  |     |   | 15.37 | 
|March 31, 2004     |  |      | 25.44 |  |     |   | 11.71 | 



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|        |                         
|------- | ------------------------
|Item 6. | Selected Financial Data.



FINANCIAL AND OPERATING HIGHLIGHTS


|                                                          |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |         |           |       |   |         |         |        |  
|--------------------------------------------------------- | ------------------------------------------ | ---------------------------------------------------------------- | ------- | --------- | ---- | - | ------- | --------- | ---- | - | ------- | --------- | ---- | ---- | ------- | --------- | ----- | - | ------- | ------- | ------ | -
|                                                          |                                            | Year Ended December 31,                                          |        
|                                                          |                                            |                                                                  |        
|                                                          |                                            | 2005                                                             |         |           | 2004 |   |         | 2003      |      |   | 2002    |           |      | 2001 |        
|                                                          |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |        
|                                                          |                                            | (In thousands, except percentages, per share and operating data) |        
|Financial Statement Data                                  |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |         |           |       |   |         |        
|Continuing Operations:                                    |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |         |           |       |   |         |        
|                                                          | Net Revenues                               |                                                                  | $       | 3,581,246 |      |   | $       | 2,511,589 |      |   | $       | 1,808,818 |      |      | $       | 1,251,335 |       |   | $       | 910,657 |       
|                                                          | Operating Income                           |                                                                  |         | 199,642   |      |   |         | 78,480    |      |   |         | 63,859    |      |      |         | 20,014    |       |   |         | 45,433  |       
|                                                          | Earnings (Loss)                            |                                                                  |         | 103,931   |      |   |         | 16,338    |      |   |         | 12,364    |      |      |         | (11,486   | )     |   |         | 13,656  |       
|                                                          | Earnings (Loss) Per Common Share  Basic   |                                                                  | $       | 7.71      |      |   | $       | 1.47      |      |   | $       | 1.41      |      |      | $       | (1.34     | )     |   | $       | 1.54    |       
|                                                          | Earnings (Loss) Per Common Share  Diluted |                                                                  | $       | 7.63      |      |   | $       | 1.43      |      |   | $       | 1.40      |      |      | $       | (1.34     | )     |   | $       | 1.53    |       
|Discontinued Operations:                                  |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |         |           |       |   |         |        
|                                                          | Net Revenues                               |                                                                  | $       |          |      |   | $       | 1,269     |      |   | $       | 27,620    |      |      | $       | 61,727    |       |   | $       | 81,022  |       
|                                                          | Operating Earnings (Loss)                  |                                                                  |         | 24        |      |   |         | (190      | )    |   |         | (715      | )    |      |         | 3,596     |       |   |         | (2,134  | )     
|                                                          |                                            | Earnings (Loss)                                                  |         |           | 15   |   |         |           | (117 | ) |         |           | (441 | )    |         |           | 2,219 |   |         |         | (1,274 | )
|                                                          | (Loss) Earnings Per Common Share  Basic   |                                                                  | $       |          |      |   | $       | (0.01     | )    |   | $       | (0.05     | )    |      | $       | 0.26      |       |   | $       | (0.14   | )     
|                                                          | (Loss) Earnings Per Common Share  Diluted |                                                                  |         |          |      |   | $       | (0.01     | )    |   | $       | (0.05     | )    |      | $       | 0.26      |       |   | $       | (0.14   | )     
|Cumulative Effect of Change in Accounting Principle       |                                            | $                                                                | (68     | )         |      |   |        |           |      | $ | (704    | )         |      |      |        |           |       |   |        |        
|                                                          | Loss Per Common Share  Basic              |                                                                  | $       | (0.01     | )    |   |         |          |      |   | $       | (0.08     | )    |      |         |          |       |   |         |        |       
|                                                          | Loss Per Common Share  Diluted            |                                                                  | $       | (0.01     | )    |   |         |          |      |   | $       | (0.08     | )    |      |         |          |       |   |         |        |       
|Weighted Average Common Shares Outstanding  Basic        |                                            |                                                                  | 13,486  |           |      |   | 11,105  |           |      |   | 8,732   |           |      |      | 8,566   |           |       |   | 8,871   |        
|Weighted Average Common Shares Outstanding  Diluted      |                                            |                                                                  | 13,629  |           |      |   | 11,358  |           |      |   | 8,830   |           |      |      | 8,566   |           |       |   | 8,885   |        
|Working Capital                                           |                                            | $                                                                | 233,847 |           |      | $ | 103,172 |           |      | $ | 97,294  |           |      | $    | 91,333  |           |       | $ | 56,228  |        
|Total Assets                                              |                                            |                                                                  | 984,472 |           |      |   | 702,406 |           |      |   | 699,654 |           |      |      | 702,286 |           |       |   | 507,174 |        
|Long-Term Debt                                            |                                            |                                                                  | 274,864 |           |      |   | 292,759 |           |      |   | 355,601 |           |      |      | 398,069 |           |       |   | 256,749 |        
|Stockholders Equity                                      |                                            |                                                                  | 399,836 |           |      |   | 216,439 |           |      |   | 139,436 |           |      |      | 127,317 |           |       |   | 136,410 |        
|Long-Term Debt as a Percentage of Total Capitalization(a) |                                            |                                                                  | 40.7    | %         |      |   | 57.5    | %         |      |   | 71.8    | %         |      |      | 75.8    | %         |       |   | 65.3    | %      
|Book Value Per Common Share Outstanding(b)                |                                            | $                                                                | 27.36   |           |      | $ | 17.55   |           |      | $ | 15.87   |           |      | $    | 14.85   |           |       | $ | 15.95   |        
|Return on Average Stockholders Equity(c)                 |                                            |                                                                  | 33.7    | %         |      |   | 9.1     | %         |      |   | 8.4     | %         |      |      |        |           |       |   | 9.4     | %      
|Operating Data                                            |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |         |           |       |   |         |        
|Refining Group:                                           |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |         |           |       |   |         |        
|Four Corners Operations:                                  |                                            |                                                                  |         |           |      |   |         |           |      |   |         |           |      |      |         |           |       |   |         |        
|                                                          | Rated Crude Oil Capacity Utilized          |                                                                  |         | 62        | %    |   |         | 61        | %    |   |         | 67        | %    |      |         | 72        | %     |   |         | 73      | %     
|                                                          | Refinery Sourced Sales Barrels (Bbls/Day)  |                                                                  |         | 28,516    |      |   |         | 27,355    |      |   |         | 29,900    |      |      |         | 31,907    |       |   |         | 32,025  |       
|                                                          | Average Crude Oil Costs ($/Bbl)            |                                                                  | $       | 55.01     |      |   | $       | 39.31     |      |   | $       | 29.32     |      |      | $       | 23.62     |       |   | $       | 25.00   |       
|                                                          | Refinery Margin ($/Bbl)                    |                                                                  | $       | 14.03     |      |   | $       | 8.96      |      |   | $       | 8.81      |      |      | $       | 6.84      |       |   | $       | 9.69    |       






|    |  |                                                                                                                                                                                                           
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Total Capitalization is defined as Long-Term Debt, net of
    current portion plus Total Stockholders Equity.                                                                                            
|   
|(b) |  | Book value per common share is defined as Total
    Stockholders Equity at December 31, 2005 divided by
    number of common shares outstanding, net of treasury shares, at
    December 31, 2005.       
|   
|(c) |  | Return on Average Stockholders Equity is defined as Net
    Earnings divided by the average of Total Stockholders
    Equity at January 1, 2005 and Total Stockholders
    Equity at December 31, 2005.

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|                        |                                           |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |   |         |  
|----------------------- | ----------------------------------------- | -------------------------------------- | - | ------ | ------- | - | - | ------ | ------- | - | ---- | ------ | ------- | ---- | - | ------ | ------- | - |  | - | ------- | -
|                        |                                           | Year Ended December 31,                |  
|                        |                                           |                                        |  
|                        |                                           | 2005                                   |   |        | 2004    |   |   | 2003   |         |   | 2002 |        |         | 2001 |  
|                        |                                           |                                        |   |        |         |   |   |        |         |   |      |        |         |      |  
|                        |                                           | (In thousands, except percentages,     |  
|                        |                                           | per share and operating data)          |  
|Yorktown Operations:(1) |                                           |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |  
|                        | Rated Crude Oil Capacity Utilized         |                                        |   | 88     | %       |   |   | 84     | %       |   |      | 83     | %       |      |   | 86     | %       |   |  |   |        
|                        | Refinery Sourced Sales Barrels (Bbls/Day) |                                        |   | 62,667 |         |   |   | 60,999 |         |   |      | 58,931 |         |      |   | 58,771 |         |   |  |   |        
|                        | Average Crude Oil Costs ($/Bbl)           |                                        | $ | 51.95  |         |   | $ | 37.39  |         |   | $    | 29.79  |         |      | $ | 27.01  |         |   |  |   |        
|                        | Refinery Margin ($/Bbl)                   |                                        | $ | 8.72   |         |   | $ | 5.60   |         |   | $    | 4.07   |         |      | $ | 2.32   |         |   |  |   |        
|Retail Group:           |                                           |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |  
|                        | Service Stations: (Continuing Operations) |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |   |        
|                        |                                           | Fuel Gallons Sold (In Thousands)       |   |        | 162,637 |   |   |        | 156,917 |   |      |        | 148,605 |      |   |        | 148,469 |   |  |   | 156,167 |  
|                        |                                           | Fuel Margin ($/Gallon)                 |   | $      | 0.19    |   |   | $      | 0.18    |   |      | $      | 0.20    |      |   | $      | 0.15    |   |  | $ | 0.17    |  
|                        |                                           | Merchandise Sold ($ In Thousands)      |   | $      | 140,422 |   |   | $      | 134,013 |   |      | $      | 127,009 |      |   | $      | 123,630 |   |  | $ | 123,515 |  
|                        |                                           | Merchandise Margin                     |   |        | 27      | % |   |        | 24      | % |      |        | 29      | %    |   |        | 27      | % |  |   | 28      | %
|                        | Operating Retail Outlets at Year End:     |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |   |        
|                        |                                           | Continuing Operations                  |   |        | 123     |   |   |        | 123     |   |      |        | 123     |      |   |        | 123     |   |  |   | 123     |  
|                        | Travel Center:(2)                         |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |   |        
|                        |                                           | Fuel Gallons Sold (In Thousands)       |   |        |        |   |   |        |        |   |      |        | 10,227  |      |   |        | 24,906  |   |  |   | 24,964  |  
|                        |                                           | Fuel Margin ($/Gallon)                 |   | $      |        |   |   | $      |        |   |      | $      | 0.07    |      |   | $      | 0.09    |   |  | $ | 0.10    |  
|                        |                                           | Merchandise Sold ($ In Thousands)      |   | $      |        |   |   | $      |        |   |      | $      | 2,703   |      |   | $      | 6,103   |   |  | $ | 6,128   |  
|                        |                                           | Merchandise Margin                     |   |        |        |   |   |        |        |   |      |        | 42      | %    |   |        | 44      | % |  |   | 44      | %
|                        |                                           | Number of Outlets at Year End          |   |        |        |   |   |        |        |   |      |        |        |      |   |        | 1       |   |  |   | 1       |  
|Wholesale Group:        |                                           |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |  
|                        | Phoenix Fuel:                             |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |   |        
|                        |                                           | Fuel Gallons Sold (In Thousands)       |   |        | 479,083 |   |   |        | 473,009 |   |      |        | 429,198 |      |   |        | 376,711 |   |  |   | 394,158 |  
|                        |                                           | Fuel Margin ($/Gallon)                 |   | $      | 0.07    |   |   | $      | 0.05    |   |      | $      | 0.05    |      |   | $      | 0.05    |   |  | $ | 0.05    |  
|                        |                                           | Lubricant Sales ($ In Thousands)       |   | $      | 33,981  |   |   | $      | 30,597  |   |      | $      | 24,475  |      |   | $      | 21,544  |   |  | $ | 22,347  |  
|                        |                                           | Lubricant Margin                       |   |        | 16      | % |   |        | 13      | % |      |        | 15      | %    |   |        | 17      | % |  |   | 17      | %
|                        | Dial Oil:(3)                              |                                        |   |        |         |   |   |        |         |   |      |        |         |      |   |        |         |   |  |   |        
|                        |                                           | Fuel Gallons Sold (In Thousands)       |   |        | 53,453  |   |   |        |        |   |      |        |        |      |   |        |        |   |  |   |        |  
|                        |                                           | Fuel Margin ($/Gallon)                 |   | $      | 0.15    |   |   |        |        |   |      |        |        |      |   |        |        |   |  |   |        |  
|                        |                                           | Lubricant Sales ($ In Thousands)       |   | $      | 12,327  |   |   |        |        |   |      |        |        |      |   |        |        |   |  |   |        |  
|                        |                                           | Lubricants Margin                      |   |        | 15      | % |   |        |        |   |      |        |        |      |   |        |        |   |  |   |        |  
|                        |                                           | Merchandise Sales ($ in Thousands)     |   | $      | 4,542   |   |   |        |        |   |      |        |        |      |   |        |        |   |  |   |        |  
|                        |                                           | Merchandise Margin(4)                  |   |        | 28      | % |   |        |        |   |      |        |        |      |   |        |        |   |  |   |        |  
|                        |                                           | Operating Retail Outlets at Period End |   |        | 12      |   |   |        |        |   |      |        |        |      |   |        |        |   |  |   |        |  






|    |                                              
|--- | ---------------------------------------------
|(1) | Acquired on May 14, 2002.                    
|   
|(2) | Sold June 19, 2003.                          
|   
|(3) | Acquired on July 12, 2005.                   
|   
|(4) | Includes only retail store merchandise sales.

27



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##### Table of Contents



RECONCILIATIONS TO AMOUNTS REPORTED


UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES


Refining Group




| |                
| | ---------------
| | Refining Margin



|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |         | 
|--------------------------------------------------------------------------------------------------- | --------------------------------------------------------- | ------------ | - | --------- | ---- |  | - | --------- |  |  | ---- | ------- |  | ---- | - | ------- |  |  | - | ------- | 
|                                                                                                    |                                                           | December 31, |  
|                                                                                                    |                                                           |              |  
|                                                                                                    |                                                           | 2005         |   |           | 2004 |  |   | 2003      |  |  | 2002 |         |  | 2001 |  
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|Average Per Barrel                                                                                  |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |        
|Four Corners Operations                                                                             |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |        
|                                                                                                    | Net sales                                                 |              | $ | 72.42     |      |  | $ | 52.15     |  |  | $    | 40.43   |  |      | $ | 32.60   |  |  | $ | 36.10   | 
|                                                                                                    | Less cost of products                                     |              |   | 58.39     |      |  |   | 43.19     |  |  |      | 31.62   |  |      |   | 25.76   |  |  |   | 26.41   | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|                                                                                                    | Refining margin                                           |              | $ | 14.03     |      |  | $ | 8.96      |  |  | $    | 8.81    |  |      | $ | 6.84    |  |  | $ | 9.69    | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|Yorktown Operations*                                                                                |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |        
|                                                                                                    | Net sales                                                 |              | $ | 62.66     |      |  | $ | 45.11     |  |  | $    | 34.69   |  |      | $ | 29.99   |  |  | $ |        | 
|                                                                                                    | Less cost of products                                     |              |   | 53.94     |      |  |   | 39.51     |  |  |      | 30.62   |  |      |   | 27.67   |  |  |   |        | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|                                                                                                    | Refining margin                                           |              | $ | 8.72      |      |  | $ | 5.60      |  |  | $    | 4.07    |  |      | $ | 2.32    |  |  | $ |        | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|Consolidated                                                                                        |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |        
|                                                                                                    | Net sales                                                 |              | $ | 65.71     |      |  | $ | 47.29     |  |  | $    | 36.62   |  |      | $ | 31.19   |  |  | $ | 36.10   | 
|                                                                                                    | Less cost of products                                     |              |   | 55.33     |      |  |   | 40.65     |  |  |      | 30.96   |  |      |   | 26.79   |  |  |   | 26.41   | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|                                                                                                    | Refining margin                                           |              | $ | 10.38     |      |  | $ | 6.64      |  |  | $    | 5.66    |  |      | $ | 4.40    |  |  | $ | 9.69    | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|Reconciliations of refined product sales from produced
    products sold per barrel to net revenues |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |        
|Four Corners Operations                                                                             |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |        
|                                                                                                    | Average sales price per produced barrel sold              |              | $ | 72.42     |      |  | $ | 52.15     |  |  | $    | 40.43   |  |      | $ | 32.60   |  |  | $ | 36.10   | 
|                                                                                                    | Times refinery sourced sales barrels per day              |              |   | 28,516    |      |  |   | 27,355    |  |  |      | 29,900  |  |      |   | 31,907  |  |  |   | 32,025  | 
|                                                                                                    | Times number of days in period                            |              |   | 365       |      |  |   | 366       |  |  |      | 365     |  |      |   | 365     |  |  |   | 365     | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|                                                                                                    | Refined product sales from produced products sold (000s) |              | $ | 753,772   |      |  | $ | 522,122   |  |  | $    | 441,233 |  |      | $ | 379,661 |  |  | $ | 421,977 | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|Yorktown Operations                                                                                 |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |   |         |  |  |   |        
|                                                                                                    | Average sales price per produced barrel sold              |              | $ | 62.66     |      |  | $ | 45.11     |  |  | $    | 34.69   |  |      | $ | 29.99   |  |  | $ |        | 
|                                                                                                    | Times refinery sourced sales barrels per day              |              |   | 62,667    |      |  |   | 60,999    |  |  |      | 58,931  |  |      |   | 58,771  |  |  |   |        | 
|                                                                                                    | Times number of days in period                            |              |   | 365       |      |  |   | 366       |  |  |      | 365     |  |      |   | 232     |  |  |   |        | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  
|                                                                                                    | Refined product sales from produced products sold (000s) |              | $ | 1,433,251 |      |  | $ | 1,007,109 |  |  | $    | 746,175 |  |      | $ | 408,910 |  |  | $ |        | 
|                                                                                                    |                                                           |              |   |           |      |  |   |           |  |  |      |         |  |      |  

28



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##### Table of Contents



|                     |                                                            |              |   |           |      |  |   |           |  |  |      |           |  |      |   |         |  |  |   |         | 
|-------------------- | ---------------------------------------------------------- | ------------ | - | --------- | ---- |  | - | --------- |  |  | ---- | --------- |  | ---- | - | ------- |  |  | - | ------- | 
|                     |                                                            | December 31, |  
|                     |                                                            |              |  
|                     |                                                            | 2005         |   |           | 2004 |  |   | 2003      |  |  | 2002 |           |  | 2001 |  
|                     |                                                            |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|Consolidated (000s) |                                                            |              |   |           |      |  |   |           |  |  |      |           |  |      |   |         |  |  |   |        
|                     | Sum of refined product sales from produced products sold** |              | $ | 2,187,023 |      |  | $ | 1,529,231 |  |  | $    | 1,187,408 |  |      | $ | 788,571 |  |  | $ | 421,977 | 
|                     | Purchased product, transportation and other revenues       |              |   | 266,484   |      |  |   | 202,039   |  |  |      | 64,552    |  |      |   | 49,958  |  |  |   | 51,249  | 
|                     |                                                            |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|                     | Net revenues                                               |              | $ | 2,453,507 |      |  | $ | 1,731,270 |  |  | $    | 1,251,960 |  |      | $ | 838,529 |  |  | $ | 473,226 | 
|                     |                                                            |              |   |           |      |  |   |           |  |  |      |           |  |      |  






|  |                       
|- | ----------------------
|* | Acquired in May, 2002.



|   |                                     
|-- | ------------------------------------
|** | Includes inter-segment net revenues.

|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |   |         |  |  |   |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ------------ | - | --------- | ---- |  | - | --------- |  |  | ---- | --------- |  | ---- | - | ------- |  |  | - | ------- | 
|                                                                                                                                                     |                                                                           | December 31, |  
|                                                                                                                                                     |                                                                           |              |  
|                                                                                                                                                     |                                                                           | 2005         |   |           | 2004 |  |   | 2003      |  |  | 2002 |           |  | 2001 |  
|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|Reconciliation of average cost of products per produced
    barrel sold to total cost of products sold (excluding
    depreciation and amortization) |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |   |         |  |  |   |        
|Four Corners Operation                                                                                                                               |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |   |         |  |  |   |        
|                                                                                                                                                     | Average cost of products per produced barrel sold                         |              | $ | 58.39     |      |  | $ | 43.19     |  |  | $    | 31.62     |  |      | $ | 25.76   |  |  | $ | 26.41   | 
|                                                                                                                                                     | Times refinery sourced sales barrels per day                              |              |   | 28,516    |      |  |   | 27,355    |  |  |      | 29,900    |  |      |   | 31,907  |  |  |   | 32,025  | 
|                                                                                                                                                     | Times number of days in period                                            |              |   | 365       |      |  |   | 366       |  |  |      | 365       |  |      |   | 365     |  |  |   | 365     | 
|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|                                                                                                                                                     | Cost of products for produced products sold (000s)                       |              | $ | 607,743   |      |  | $ | 432,415   |  |  | $    | 345,085   |  |      | $ | 300,002 |  |  | $ | 308,710 | 
|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|Yorktown Operations                                                                                                                                  |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |   |         |  |  |   |        
|                                                                                                                                                     | Average cost of products per produced barrel sold                         |              | $ | 53.94     |      |  | $ | 39.51     |  |  | $    | 30.62     |  |      | $ | 27.67   |  |  | $ |        | 
|                                                                                                                                                     | Times refinery sourced sales barrels per day                              |              |   | 62,667    |      |  |   | 60,999    |  |  |      | 58,931    |  |      |   | 58,771  |  |  |   |        | 
|                                                                                                                                                     | Times number of days in period*                                           |              |   | 365       |      |  |   | 366       |  |  |      | 365       |  |      |   | 232     |  |  |   |        | 
|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|                                                                                                                                                     | Cost of products for produced products sold (000s)                       |              | $ | 1,233,794 |      |  | $ | 882,086   |  |  | $    | 658,631   |  |      | $ | 377,277 |  |  | $ |        | 
|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|Consolidated (000s)                                                                                                                                 |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |   |         |  |  |   |        
|                                                                                                                                                     | Sum of refined cost of produced products sold                             |              | $ | 1,841,537 |      |  | $ | 1,314,501 |  |  | $    | 1,003,716 |  |      | $ | 677,279 |  |  | $ | 308,710 | 
|                                                                                                                                                     | Purchased product, transportation and other cost of products sold         |              |   | 236,363   |      |  |   | 175,706   |  |  |      | 38,663    |  |      |   | 24,185  |  |  |   | 23,800  | 
|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |  
|                                                                                                                                                     | Total cost of products sold (excluding depreciation and
    amortization) |              | $ | 2,077,900 |      |  | $ | 1,490,207 |  |  | $    | 1,042,379 |  |      | $ | 701,464 |  |  | $ | 332,510 | 
|                                                                                                                                                     |                                                                           |              |   |           |      |  |   |           |  |  |      |           |  |      |  






|  |                       
|- | ----------------------
|* | Acquired in May, 2002.

29



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##### Table of Contents



Retail Group




| |            
| | -----------
| | Fuel Margin



|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                                                                                                      |  | December 31, |        
|                                                                                                                                      |  |              |        
|                                                                                                                                      |  | 2005         |         |   | 2004 |   |         | 2003 |  |   | 2002    |   |  | 2001 |        
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        
|(in 000s except fuel margin per gallon)                                                                                              |  |              |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Fuel sales                                                                                                                            |  | $            | 381,166 |   |      | $ | 291,923 |      |  | $ | 242,451 |   |  | $    | 219,662 |   |  | $ | 249,204 |  
|Less cost of fuel sold                                                                                                                |  |              | 349,467 |   |      |   | 263,484 |      |  |   | 213,312 |   |  |      | 196,693 |   |  |   | 222,320 |  
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        
|Fuel margin                                                                                                                           |  | $            | 31,699  |   |      | $ | 28,439  |      |  | $ | 29,139  |   |  | $    | 22,969  |   |  | $ | 26,884  |  
|Number of gallons sold                                                                                                                |  |              | 162,637 |   |      |   | 156,917 |      |  |   | 148,605 |   |  |      | 148,469 |   |  |   | 156,167 |  
|Fuel margin per gallon                                                                                                                |  | $            | 0.19    |   |      | $ | 0.18    |      |  | $ | 0.20    |   |  | $    | 0.15    |   |  | $ | 0.17    |  
|Reconciliation of fuel sales to net revenues
    (000s)                                                                              |  |              |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Fuel sales                                                                                                                            |  | $            | 381,166 |   |      | $ | 291,923 |      |  | $ | 242,451 |   |  | $    | 219,662 |   |  | $ | 249,204 |  
|Excise taxes included in sales                                                                                                        |  |              | (62,671 | ) |      |   | (58,867 | )    |  |   | (62,296 | ) |  |      | (73,146 | ) |  |   | (79,500 | )
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        
|Fuel sales, net of excise taxes                                                                                                       |  |              | 318,495 |   |      |   | 233,056 |      |  |   | 180,155 |   |  |      | 146,516 |   |  |   | 169,704 |  
|Merchandise sales                                                                                                                     |  |              | 140,422 |   |      |   | 134,012 |      |  |   | 127,009 |   |  |      | 123,630 |   |  |   | 123,515 |  
|Other sales                                                                                                                           |  |              | 16,824  |   |      |   | 15,119  |      |  |   | 15,717  |   |  |      | 14,795  |   |  |   | 16,138  |  
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        
|Net revenues                                                                                                                          |  | $            | 475,741 |   |      | $ | 382,187 |      |  | $ | 322,881 |   |  | $    | 284,941 |   |  | $ | 309,357 |  
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        
|Reconciliation of fuel cost of products sold to total cost
    of products sold (excluding depreciation and amortization)
    (000s) |  |              |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Fuel cost of products sold                                                                                                            |  | $            | 349,467 |   |      | $ | 263,484 |      |  | $ | 213,312 |   |  | $    | 196,693 |   |  | $ | 222,320 |  
|Excise taxes included in cost of products sold                                                                                        |  |              | (62,671 | ) |      |   | (58,867 | )    |  |   | (62,296 | ) |  |      | (73,146 | ) |  |   | (79,500 | )
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        
|Fuel cost of products sold, net of excise taxes                                                                                       |  |              | 286,796 |   |      |   | 204,617 |      |  |   | 151,016 |   |  |      | 123,547 |   |  |   | 142,820 |  
|Merchandise cost of products sold                                                                                                     |  |              | 102,079 |   |      |   | 101,891 |      |  |   | 90,161  |   |  |      | 90,149  |   |  |   | 88,832  |  
|Other cost of products sold                                                                                                           |  |              | 13,466  |   |      |   | 12,044  |      |  |   | 12,385  |   |  |      | 12,065  |   |  |   | 12,673  |  
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        
|Total cost of products sold (excluding depreciation and
    amortization)                                                             |  | $            | 402,341 |   |      | $ | 318,552 |      |  | $ | 253,562 |   |  | $    | 225,761 |   |  | $ | 244,325 |  
|                                                                                                                                      |  |              |         |   |      |   |         |      |  |   |         |   |  |      |        

Wholesale Group




| |            
| | -----------
| | Fuel Margin





| |             
| | ------------
| | Phoenix Fuel

|                                         |  |              |           |  |      |   |         |      |  |   |         |  |  |      |         |  |  |   |         | 
|---------------------------------------- |  | ------------ | --------- |  | ---- | - | ------- | ---- |  | - | ------- |  |  | ---- | ------- |  |  | - | ------- | 
|                                         |  | December 31, |          
|                                         |  |              |          
|                                         |  | 2005         |           |  | 2004 |   |         | 2003 |  |   | 2002    |  |  | 2001 |        
|                                         |  |              |           |  |      |   |         |      |  |   |         |  |  |      |        
|(in 000s except fuel margin per gallon) |  |              |           |  |      |   |         |      |  |   |         |  |  |      |         |  |  |   |         | 
|Fuel sales                               |  | $            | 1,033,660 |  |      | $ | 807,158 |      |  | $ | 585,091 |  |  | $    | 444,621 |  |  | $ | 483,130 | 
|Less cost of fuel sold                   |  |              | 1,000,488 |  |      |   | 781,223 |      |  |   | 562,557 |  |  |      | 424,318 |  |  |   | 463,513 | 
|                                         |  |              |           |  |      |   |         |      |  |   |         |  |  |      |        
|Fuel margin                              |  | $            | 33,172    |  |      | $ | 25,935  |      |  | $ | 22,534  |  |  | $    | 20,303  |  |  | $ | 19,617  | 
|Number of gallons sold                   |  |              | 479,083   |  |      |   | 473,009 |      |  |   | 429,198 |  |  |      | 376,711 |  |  |   | 394,158 | 
|Fuel margin per gallon                   |  | $            | 0.07      |  |      | $ | 0.05    |      |  | $ | 0.05    |  |  | $    | 0.05    |  |  | $ | 0.05    | 

30



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##### Table of Contents



|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |          |   |  |   |          |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---- | - | -------- | ---- |  | - | -------- | - |  | ---- | -------- | - |  | - | -------- | -
|                                                                                                                                      |  | December 31, |          
|                                                                                                                                      |  |              |          
|                                                                                                                                      |  | 2005         |           |   | 2004 |   |          | 2003 |  |   | 2002     |   |  | 2001 |         
|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |         
|Reconciliation of fuel sales to net revenues
    (000s)                                                                              |  |              |           |   |      |   |          |      |  |   |          |   |  |      |          |   |  |   |          |  
|Fuel sales                                                                                                                            |  | $            | 1,033,660 |   |      | $ | 807,158  |      |  | $ | 585,091  |   |  | $    | 444,621  |   |  | $ | 483,130  |  
|Excise taxes included in sales                                                                                                        |  |              | (162,780  | ) |      |   | (160,776 | )    |  |   | (140,625 | ) |  |      | (120,596 | ) |  |   | (118,575 | )
|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |         
|Fuel sales, net of excise taxes                                                                                                       |  |              | 870,880   |   |      |   | 646,382  |      |  |   | 444,466  |   |  |      | 324,025  |   |  |   | 364,555  |  
|Lubricant sales                                                                                                                       |  |              | 33,981    |   |      |   | 30,597   |      |  |   | 24,475   |   |  |      | 21,544   |   |  |   | 22,347   |  
|Other sales                                                                                                                           |  |              | 3,937     |   |      |   | 3,596    |      |  |   | 3,563    |   |  |      | 4,365    |   |  |   | 4,270    |  
|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |         
|Net revenues                                                                                                                          |  | $            | 908,798   |   |      | $ | 680,575  |      |  | $ | 472,504  |   |  | $    | 349,934  |   |  | $ | 391,172  |  
|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |         
|Reconciliation of fuel cost of products sold to total cost
    of products sold excluding (depreciation and amortization)
    (000s) |  |              |           |   |      |   |          |      |  |   |          |   |  |      |          |   |  |   |          |  
|Fuel cost of products sold                                                                                                            |  | $            | 1,000,488 |   |      | $ | 781,223  |      |  | $ | 562,557  |   |  | $    | 424,318  |   |  | $ | 463,513  |  
|Excise taxes included in cost of products sold                                                                                        |  |              | (162,780  | ) |      |   | (160,776 | )    |  |   | (140,625 | ) |  |      | (120,596 | ) |  |   | (118,575 | )
|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |         
|Fuel cost of products sold, net of excise taxes                                                                                       |  |              | 837,708   |   |      |   | 620,447  |      |  |   | 421,932  |   |  |      | 303,722  |   |  |   | 344,938  |  
|Lubricant cost of products sold                                                                                                       |  |              | 28,427    |   |      |   | 26,633   |      |  |   | 20,716   |   |  |      | 17,940   |   |  |   | 18,647   |  
|Other cost of products sold                                                                                                           |  |              | 992       |   |      |   | 605      |      |  |   | 603      |   |  |      | 1,864    |   |  |   | 2,041    |  
|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |         
|Total cost of products sold (excluding depreciation and
    amortization)                                                             |  | $            | 867,127   |   |      | $ | 647,685  |      |  | $ | 443,251  |   |  | $    | 323,526  |   |  | $ | 365,626  |  
|                                                                                                                                      |  |              |           |   |      |   |          |      |  |   |          |   |  |      |         



| |                
| | ---------------
| | Dial Oil(1),(2)

|                                                         |  |              |         |  |      |   |      |  |      |   |      |  |  |   |   |  |  |   |   | 
|-------------------------------------------------------- |  | ------------ | ------- |  | ---- | - | ---- |  | ---- | - | ---- |  |  | - | - |  |  | - | - | 
|                                                         |  | December 31,
|                                                         |  |             
|                                                         |  | 2005         |         |  | 2004 |   | 2003 |  | 2002 |   | 2001
|                                                         |  |              |         |  |      |   |      |  |      |   |     
|(in 000s except fuel margin per gallon)                 |  |              |         |  |      |   |      |  |      |   |      |  |  |   |   |  |  |   |   | 
|Fuel sales                                               |  | $            | 112,656 |  |      | $ |     |  |      | $ |     |  |  | $ |  |  |  | $ |  | 
|Less cost of fuel sold                                   |  |              | 104,733 |  |      |   |     |  |      |   |     |  |  |   |  |  |  |   |  | 
|                                                         |  |              |         |  |      |   |      |  |      |   |      |  |  |   |  
|Fuel margin                                              |  | $            | 7,923   |  |      | $ |     |  |      | $ |     |  |  | $ |  |  |  | $ |  | 
|Number of gallons sold                                   |  |              | 53,453  |  |      |   |     |  |      |   |     |  |  |   |  |  |  |   |  | 
|Fuel margin per gallon                                   |  | $            | 0.15    |  |      | $ |     |  |      | $ |     |  |  | $ |  |  |  | $ |  | 
|                                                        
|Reconciliation of fuel sales to net revenues
    (000s) |  |              |         |  |      |   |      |  |      |   |      |  |  |   |   |  |  |   |   | 
|Fuel sales                                               |  | $            | 112,656 |  |      | $ |     |  |      | $ |     |  |  | $ |  |  |  | $ |  | 
|Lubricant and merchandise sales                          |  |              | 16,869  |  |      |   |     |  |      |   |     |  |  |   |  |  |  |   |  | 
|Other sales                                              |  |              | 1,465   |  |      |   |     |  |      |   |     |  |  |   |  |  |  |   |  | 
|                                                         |  |              |         |  |      |   |      |  |      |   |      |  |  |   |  
|Net revenues                                             |  | $            | 130,990 |  |      | $ |     |  |      | $ |     |  |  | $ |  |  |  | $ |  | 
|                                                         |  |              |         |  |      |   |      |  |      |   |      |  |  |   |  

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|                                                                                                                             |  |              |         |  |      |   |      |  |      |   |      |  |  |   |   |  |  |   |   | 
|---------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- |  | ---- | - | ---- |  | ---- | - | ---- |  |  | - | - |  |  | - | - | 
|                                                                                                                             |  | December 31,
|                                                                                                                             |  |             
|                                                                                                                             |  | 2005         |         |  | 2004 |   | 2003 |  | 2002 |   | 2001
|                                                                                                                             |  |              |         |  |      |   |      |  |      |   |     
|Reconciliation of cost of fuel sold to total cost of
    products sold (excluding depreciation and amortization)
    (000s) |  |              |         |  |      |   |      |  |      |   |      |  |  |   |   |  |  |   |   | 
|Fuel cost of products sold                                                                                                   |  | $            | 104,733 |  |      | $ |     |  |      | $ |     |  |  | $ |  |  |  | $ |  | 
|Lubricant and merchandise cost of products sold                                                                              |  |              | 13,803  |  |      |   |     |  |      |   |     |  |  |   |  |  |  |   |  | 
|Other cost of products sold                                                                                                  |  |              | 361     |  |      |   |     |  |      |   |     |  |  |   |  |  |  |   |  | 
|                                                                                                                             |  |              |         |  |      |   |      |  |      |   |      |  |  |   |  
|Total cost of products sold (excluding depreciation and
    amortization)                                                    |  | $            | 118,897 |  |      | $ |     |  |      | $ |     |  |  | $ |  |  |  | $ |  | 
|                                                                                                                             |  |              |         |  |      |   |      |  |      |   |      |  |  |   |  






|    |                                                                            
|--- | ---------------------------------------------------------------------------
|(1) | Statistics presented are from July 13, 2005 to
    December 31, 2005.      
|   
|(2) | Dial Oil presents sales and cost of products sold, net of excise
    taxes.

|                                                                                                    |                             |              |           |         |      |   |           |         |  |   |           |         |  |      |           |         |  |   |          |         | 
|--------------------------------------------------------------------------------------------------- | --------------------------- | ------------ | --------- | ------- | ---- | - | --------- | ------- |  | - | --------- | ------- |  | ---- | --------- | ------- |  | - | -------- | ------- | 
|                                                                                                    |                             | December 31, |          
|                                                                                                    |                             |              |          
|                                                                                                    |                             | 2005         |           |         | 2004 |   |           | 2003    |  |   | 2002      |         |  | 2001 |          
|                                                                                                    |                             |              |           |         |      |   |           |         |  |   |           |         |  |      |          
|Consolidated                                                                                        |                             |              |           |         |      |   |           |         |  |   |           |         |  |      |           |         |  |   |          |        
|Reconciliation to net revenues reported in Condensed
    Consolidated Statement of Earnings (000s) |                             |              |           |         |      |   |           |         |  |   |           |         |  |      |           |         |  |   |          |        
|Net revenues  Refinery Group                                                                       |                             | $            | 2,453,507 |         |      | $ | 1,731,270 |         |  | $ | 1,251,960 |         |  | $    | 838,529   |         |  | $ | 473,226  |        
|Net revenues  Retail Group                                                                         |                             |              | 475,741   |         |      |   | 382,187   |         |  |   | 322,881   |         |  |      | 284,941   |         |  |   | 309,357  |        
|Net revenues  Wholesale Group:                                                                     |                             |              |           |         |      |   |           |         |  |   |           |         |  |      |           |         |  |   |          |        
|                                                                                                    | Net revenues  Phoenix Fuel |              |           | 908,798 |      |   |           | 680,575 |  |   |           | 472,504 |  |      |           | 349,934 |  |   |          | 391,172 | 
|                                                                                                    | Net revenues  Dial Oil     |              |           | 130,990 |      |   |           |        |  |   |           |        |  |      |           |        |  |   |          |        | 
|Net revenues  Other                                                                                |                             |              | 455       |         |      |   | 529       |         |  |   | 537       |         |  |      | 181       |         |  |   | 244      |        
|Eliminations                                                                                        |                             |              | (388,245  | )       |      |   | (282,972  | )       |  |   | (239,064  | )       |  |      | (222,250  | )       |  |   | (263,342 | )      
|                                                                                                    |                             |              |           |         |      |   |           |         |  |   |           |         |  |      |          
|Total net revenues reported in Condensed Consolidated Statement
    of Earnings                     |                             | $            | 3,581,246 |         |      | $ | 2,511,589 |         |  | $ | 1,808,818 |         |  | $    | 1,251,335 |         |  | $ | 910,657  |        
|                                                                                                    |                             |              |           |         |      |   |           |         |  |   |           |         |  |      |          

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|                                                                                                                                                  |                                                                                    |              |           |         |      |   |           |         |  |   |           |         |  |      |           |         |  |   |          |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------ | --------- | ------- | ---- | - | --------- | ------- |  | - | --------- | ------- |  | ---- | --------- | ------- |  | - | -------- | ------- | 
|                                                                                                                                                  |                                                                                    | December 31, |          
|                                                                                                                                                  |                                                                                    |              |          
|                                                                                                                                                  |                                                                                    | 2005         |           |         | 2004 |   |           | 2003    |  |   | 2002      |         |  | 2001 |          
|                                                                                                                                                  |                                                                                    |              |           |         |      |   |           |         |  |   |           |         |  |      |          
|Reconciliation to cost of products sold (excluding
    depreciation and amortization) in Condensed Consolidated
    Statement of Earnings (000s) |                                                                                    |              |           |         |      |   |           |         |  |   |           |         |  |      |           |         |  |   |          |        
|Cost of products sold  Refinery Group (excluding
    depreciation and amortization)                                                              |                                                                                    | $            | 2,077,900 |         |      | $ | 1,490,207 |         |  | $ | 1,042,379 |         |  | $    | 701,464   |         |  | $ | 332,510  |        
|Cost of products sold  Retail Group (excluding
    depreciation and amortization)                                                                |                                                                                    |              | 402,341   |         |      |   | 318,552   |         |  |   | 253,562   |         |  |      | 225,761   |         |  |   | 244,325  |        
|Cost of products sold  Wholesale Group:                                                                                                          |                                                                                    |              |           |         |      |   |           |         |  |   |           |         |  |      |           |         |  |   |          |        
|                                                                                                                                                  | Cost of products sold  Phoenix Fuel (excluding
    depreciation and amortization) |              |           | 867,127 |      |   |           | 647,685 |  |   |           | 443,251 |  |      |           | 323,526 |  |   |          | 365,626 | 
|                                                                                                                                                  | Cost of products sold  Dial Oil (excluding
    depreciation and amortization)     |              |           | 118,897 |      |   |           |        |  |   |           |        |  |      |           |        |  |   |          |        | 
|Eliminations                                                                                                                                      |                                                                                    |              | (388,245  | )       |      |   | (282,972  | )       |  |   | (239,064  | )       |  |      | (222,250  | )       |  |   | (263,342 | )      
|Other                                                                                                                                             |                                                                                    |              | 15,171    |         |      |   | 12,598    |         |  |   | 11,482    |         |  |      | 16,076    |         |  |   | 16,815   |        
|                                                                                                                                                  |                                                                                    |              |           |         |      |   |           |         |  |   |           |         |  |      |          
|Total cost of products sold (excluding depreciation and
    amortization) reported in Condensed Consolidated Statement of
    Earnings            |                                                                                    | $            | 3,093,191 |         |      | $ | 2,186,070 |         |  | $ | 1,511,610 |         |  | $    | 1,044,577 |         |  | $ | 695,934  |        
|                                                                                                                                                  |                                                                                    |              |           |         |      |   |           |         |  |   |           |         |  |      |          








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Company Overview




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| |   |                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increasing margins through management of inventories and taking
    advantage of sales and purchasing opportunities;                                                                                                                     
|
| |  | minimizing operating expenses and capital expenditures;                                                                                                                                                                                  
|
| |  | increasing the available crude oil supply for our Four Corners
    refineries;                                                                                                                                                           
|
| |  | cost effectively complying with current environmental
    regulations as they apply to our refineries, including future
    clean air standards;                                                                                         
|
| |  | improving our overall financial health and flexibility by, among
    other things, reducing our debt and overall costs of capital,
    including our interest and financing costs, and maximizing our
    return on capital employed; and
|
| |  | evaluating opportunities for internal growth and growth by
    acquisition.                                                                                                                                                              

Critical Accounting Policies








| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | accounting for contingencies, including environmental
    remediation and litigation liabilities (see Note 17);
|
| |  | assessing the possible impairment of long-lived assets (see
    Notes 4 and 5);                                
|
| |  | accounting for asset retirement obligations (see Note 7);                                                      
|
| |  | accounting for our pension and post-retirement benefit plans
    (see Note 13); and                            
|
| |  | accounting for inventories (see Note 2).                                                                       

Contingencies, Including Environmental Remediation and
Litigation Liabilities






| |   |                                                                                             
| | - | --------------------------------------------------------------------------------------------
| |  | past operations, including liabilities arising out of changes in
    environmental laws; and
|
| |  | liabilities assumed in connection with acquired assets.                                     



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##### Table of Contents







Impairment of Long-Lived Assets




Asset Retirement Obligations






| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | some of our solid waste management facilities;                                                
|
| |  | some of our crude pipeline
    right-of-way agreements;                                       
|
| |  | some of our underground and above-ground storage tanks; and                                   
|
| |  | some of our refinery piping and heaters, that are wrapped in
    material containing asbestos.





| |   |                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | settlement date occurs at the end of the economic useful
    life; and                                                                                                                                                        
|
| |  | settlement prices are estimated using consultant proposals and
    third-party contractor invoices for substantially equivalent
    work and a market risk premium to cover uncertainties and
    unforeseeable circumstances.





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Pension and Post-Retirement Plans








| |   |                                             
| | - | --------------------------------------------
| |  | discount rate;                              
|
| |  | long-term rate of return on plan assets; and
|
| |  | healthcare cost trend rates.                





|                                                  |             |                     |   |            |                   |  |   |                 |   |  |   |          |  
|------------------------------------------------- | ----------- | ------------------- | - | ---------- | ----------------- |  | - | --------------- | - |  | - | -------- | -
|                                                  |             | Increase/(Decrease) |  
|                                                  |             |                     |  
|                                                  |             | Impact on Projected |   |            | Impact on         |  |   | Impact on       |  
|Actuarial Assumption(a)                           |             | Benefit Obligation  |   |            | Pension Liability |  |   | Pension Expense |  
|                                                  |             |                     |   |            |                   |  |   |                 |  
|Discount rate:                                    |             |                     |   |            |                   |  |   |                 |   |  |   |         
|                                                  | Increase 1% |                     | $ | (2,855,000 | )                 |  | $ | (323,000        | ) |  | $ | (323,000 | )
|                                                  | Decrease 1% |                     |   | 2,762,000  |                   |  |   | 390,000         |   |  |   | 390,000  |  
|Expected long-term rate of return on plan assets: |             |                     |   |            |                   |  |   |                 |   |  |   |         
|                                                  | Increase 1% |                     |   |           |                   |  |   | (32,000         | ) |  |   | (32,000  | )
|                                                  | Decrease 1% |                     |   |           |                   |  |   | 32,000          |   |  |   | 32,000   |  






|    |  |                                                                                             
|--- |  | --------------------------------------------------------------------------------------------
|(a) |  | Each fluctuation assumes that the other components of the
    calculation are held constant.



|                                |             |                     |   |          |                 |  |   |         |  
|------------------------------- | ----------- | ------------------- | - | -------- | --------------- |  | - | ------- | -
|                                |             | Increase/(Decrease) |  
|                                |             |                     |  
|                                |             | Impact on           |   |          | Impact on       | 
|                                |             | Accumulated         |   |          | Other           | 
|                                |             | Postretirement      |   |          | Postretirement  | 
|Actuarial Assumption(a)         |             | Benefit Obligation  |   |          | Benefit Expense | 
|                                |             |                     |   |          |                 | 
|Discount rate:                  |             |                     |   |          |                 |  |   |        
|                                | Increase 1% |                     | $ | (594,000 | )               |  | $ | (50,000 | )
|                                | Decrease 1% |                     |   | 737,000  |                 |  |   | 90,000  |  
|Health care cost trend rate(b): |             |                     |   |          |                 |  |   |        
|                                | Increase 1% |                     |   | 38,000   |                 |  |   | 6,000   |  
|                                | Decrease 1% |                     |   | (38,000  | )               |  |   | (7,000  | )






|    |  |                                                                                             
|--- |  | --------------------------------------------------------------------------------------------
|(a) |  | Each fluctuation assumes that the other components of the
    calculation are held constant.
|   
|(b) |  | This assumes a 1% change in the initial and ultimate health care
    cost trend rate.       

36



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Inventories


last-in, first-in,


04-13,






Results of Operations




37



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|                                |                                       |                                        |   |         |         |   |   |         |         |   |   |         |         |  
|------------------------------- | ------------------------------------- | -------------------------------------- | - | ------- | ------- | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                |                                       | Year Ended December 31,                |  
|                                |                                       |                                        |  
|                                |                                       | 2005                                   |   |         | 2004    |   |   | 2003    |        
|                                |                                       |                                        |   |         |         |   |   |         |        
|Refining Group Operating Data:  |                                       |                                        |   |         |         |   |   |         |         |   |   |        
|                                | Four Corners Operations:              |                                        |   |         |         |   |   |         |         |   |   |         |        
|                                |                                       | Crude Oil/ NGL Throughput (BPD)        |   |         | 29,382  |   |   |         | 28,281  |   |   |         | 30,552  |  
|                                |                                       | Refinery Sourced Sales Barrels (BPD)   |   |         | 28,516  |   |   |         | 27,355  |   |   |         | 29,900  |  
|                                |                                       | Average Crude Oil Costs ($/Bbl)        |   | $       | 55.01   |   |   | $       | 39.31   |   |   | $       | 29.32   |  
|                                |                                       | Refining Margin ($/Bbl)                |   | $       | 14.03   |   |   | $       | 8.96    |   |   | $       | 8.81    |  
|                                | Yorktown Operations:                  |                                        |   |         |         |   |   |         |         |   |   |         |        
|                                |                                       | Crude Oil Throughput (BPD)             |   |         | 60,973  |   |   |         | 58,913  |   |   |         | 57,672  |  
|                                |                                       | Refinery Sourced Sales Barrels (BPD)   |   |         | 62,667  |   |   |         | 60,999  |   |   |         | 58,931  |  
|                                |                                       | Average Crude Oil Costs ($/Bbl)        |   | $       | 51.95   |   |   | $       | 37.39   |   |   | $       | 29.79   |  
|                                |                                       | Refining Margin ($/Bbl)                |   | $       | 8.72    |   |   | $       | 5.60    |   |   | $       | 4.07    |  
|Retail Group Operating Data:    |                                       |                                        |   |         |         |   |   |         |         |   |   |        
|(Continuing operations only)    |                                       |                                        |   |         |         |   |   |         |         |   |   |        
|                                | Fuel Gallons Sold (000s)             |                                        |   | 162,637 |         |   |   | 156,917 |         |   |   | 148,605 |        
|                                | Fuel Margin ($/gal)                   |                                        | $ | 0.19    |         |   | $ | 0.18    |         |   | $ | 0.20    |        
|                                | Merchandise Sales ($ in 000s)        |                                        | $ | 140,422 |         |   | $ | 134,013 |         |   | $ | 127,009 |        
|                                | Merchandise Margin                    |                                        |   | 27      | %       |   |   | 24      | %       |   |   | 29      | %      
|                                | Operating Retail Outlets at Year End: |                                        |   | 123     |         |   |   | 123     |         |   |   | 123     |        
|Wholesale Group Operating Data: |                                       |                                        |   |         |         |   |   |         |         |   |   |        
|                                | Phoenix Fuel:                         |                                        |   |         |         |   |   |         |         |   |   |         |        
|                                |                                       | Fuel Gallons Sold (000s)              |   |         | 479,083 |   |   |         | 473,009 |   |   |         | 429,198 |  
|                                |                                       | Fuel Margin ($/gal)                    |   | $       | 0.07    |   |   | $       | 0.05    |   |   | $       | 0.05    |  
|                                |                                       | Lubricant Sales ($ in 000s)           |   | $       | 33,981  |   |   | $       | 30,957  |   |   | $       | 24,475  |  
|                                |                                       | Lubricant Margin                       |   |         | 16      | % |   |         | 13      | % |   |         | 15      | %
|                                | Dial Oil:(1)                          |                                        |   |         |         |   |   |         |         |   |   |         |        
|                                |                                       | Fuel Gallons Sold ($ in 000s)         |   |         | 53,453  |   |   |         |        |   |   |         |        |  
|                                |                                       | Fuel Margin ($/Gallon)                 |   | $       | 0.15    |   |   |         |        |   |   |         |        |  
|                                |                                       | Lubricant Sales ($ in 000s)           |   | $       | 12,327  |   |   |         |        |   |   |         |        |  
|                                |                                       | Lubricant Margin                       |   |         | 15      | % |   |         |        |   |   |         |        |  
|                                |                                       | Merchandise Sales ($ in 000s)         |   | $       | 4,542   |   |   |         |        |   |   |         |        |  
|                                |                                       | Merchandise Margin(2)                  |   |         | 28      | % |   |         |        |   |   |         |        |  
|                                |                                       | Operating Retail Outlets at Period End |   |         | 12      |   |   |         |        |   |   |         |        |  






|    |                                              
|--- | ---------------------------------------------
|(1) | Acquired on July 12, 2005.                   
|   
|(2) | Includes only retail store merchandise sales.





| |   |                                                                                                   
| | - | --------------------------------------------------------------------------------------------------
| |  | stronger combined net refining margins for our refineries in
    2005, due to, among other things:



| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | increased finished product demand;                                                    
|
| |  | increased sales in our Tier 1 markets;                                                
|
| |  | reduced imports of foreign gasoline, due to a reduction in
    gasoline sulfur limits;

38



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| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | elimination of MTBE in Connecticut, New York, and
    California; and                                                                                                                                    
|
| |  | tight finished product supply in certain of our market areas.                                                                                                                                            
|
| |  | the processing of lower priced acidic crude oils at our Yorktown
    refinery, including crude oil purchased under our supply
    agreement with Statoil that began deliveries in late February
    2004;



| |   |                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------
| |  | stronger finished product margins for our Phoenix Fuel
    operations in 2005, due to, among other things:



| |   |                                                       
| | - | ------------------------------------------------------
| |  | increased finished product demand; and                
|
| |  | tight finished product supplies in our Phoenix market.



| |   |                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the acquisition of Dial Oil in July 2005;                                                                                                                                                                                                                                                                       
|
| |  | the shutdown of the alkylation unit at our Ciniza refinery as a
    result of the fire that occurred on April 8, 2004, which
    resulted in the alkylation unit being out of operation from
    April 8, 2004 to September 1, 2004;                                                                            
|
| |  | a scheduled turnaround, which started early as a result of the
    fire discussed above, at the Ciniza refinery, which resulted in
    the refinery being out of operation from April 8, 2004 to
    May 9, 2004 (except the alkylation unit, which was not
    repaired and restarted until September 1, 2004);
|
| |  | an unplanned shutdown at the Yorktown refinery as a result of a
    fire that occurred at the plant in November 2005; and                                                                                                                                                                                       
|
| |  | higher throughput volumes at the Yorktown refinery due to the
    delayed completion of refinery upgrades toward the end of 2004
    to process additional higher-acid crude oil and unrelated
    operating problems with two units that were resolved by early
    January 2005.                              

Comparison of the Years Ended December 31, 2005 and
December 31, 2004




| |                                                                   
| | ------------------------------------------------------------------
| | Earnings (Loss) From Continuing Operations Before Income
    Taxes





| |   |                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an increase in operating earnings before corporate allocations
    from our refinery operations of $111,634,000 primarily due to
    higher margins;
|
| |  | a $8,422,000 decrease in interest expense due to our refinancing
    transactions in 2005;                                                          
|
| |  | a decrease of $8,482,000 in costs associated with early debt
    extinguishment; and                                                                
|
| |  | an increase in our retail and wholesale operations fuel volumes
    and margin as a result of improved market conditions.                           





| |   |                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a $29,793,000 increase in operating expenses primarily due to
    higher purchased fuel costs and increased repairs and
    maintenance expenditures at our refineries.



| |                  
| | -----------------
| | Yorktown Refinery







39



---



##### Table of Contents









| |   |                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increased maintenance costs primarily related to tank
    inspections and repairs and coker unit repairs;                                              
|
| |  | increased operating costs due to higher volumes, higher
    electrical costs, and higher purchased costs of natural
    gas; and                       
|
| |  | increased chemical and catalyst costs, primarily related to
    higher cost catalyst required to meet more stringent sulfur
    reduction requirements.







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













| |             
| | ------------
| | Retail Group











40



---



##### Table of Contents





| |                
| | ---------------
| | Wholesale Group



| |             
| | ------------
| | Phoenix Fuel











| |         
| | --------
| | Dial Oil





| |                                                        
| | -------------------------------------------------------
| | Selling, General and Administrative Expenses
    (SG&A)





| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | higher management incentive bonuses associated with improved
    company financial performance; and
|
| |  | additional expenses incurred in relation to our 401(k) plan.                                       





| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | a reduction in costs related to our self-insured health plan due
    to improved claims experience; and
|
| |  | lower legal costs as a result of legal expense reimbursements
    from our insurance carriers.         



| |                 
| | ----------------
| | Interest Expense





| |                                               
| | ----------------------------------------------
| | Net Loss on the Disposal/ Write-Down of Assets





| |                                        
| | ---------------------------------------
| | Income Taxes from Continuing Operations



41



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##### Table of Contents



Discontinued Operations




Outlook










Comparison of the Years Ended December 31, 2004 and
December 31, 2003




| |                                                                   
| | ------------------------------------------------------------------
| | Earnings (Loss) From Continuing Operations Before Income
    Taxes





| |   |                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an increase in operating earnings before corporate allocations
    from our refinery operations of $19,695,000 primarily due to
    higher margins;
|
| |  | a 10% increase in fuel volumes sold by Phoenix Fuel and slightly
    higher margins;                                                               
|
| |  | a $6,086,000 decrease in interest expense due to our refinancing
    transactions in 2004; and,                                                    
|
| |  | a $3,907,000 gain from an insurance settlement due to a fire
    incident.                                                                         





| |   |                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an $11,811,000 increase in operating expenses;                                                                                                                                                                                                                                
|
| |  | a 8.5% decline in fuel volumes sold from our Four Corners
    refineries;                                                                                                                                                                                                     
|
| |  | $10,564,000 of costs incurred and write-offs of $4,885,000 of
    previously deferred financing costs and original issue discount
    that were related to early extinguishment of part of our
    long-term debt as a result of the refinancing transactions in
    2004; and
|
| |  | a 17% decline in our retail groups merchandise margin due
    to, among other things, an inventory reduction and lower rebates.                                                                                                                                              



| |                  
| | -----------------
| | Yorktown Refinery





42



---



##### Table of Contents









| |   |                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | higher maintenance costs primarily related to tank inspections
    and repairs and coker unit repairs;                                                                                                                                           
|
| |  | higher operating costs due to higher volumes, higher electrical
    costs and higher purchased costs of natural gas;                                                                                                                             
|
| |  | higher chemical and catalyst costs, primarily related to higher
    cost catalyst required to meet more stringent sulfur reduction
    requirements; and                                                                                         
|
| |  | higher payroll and related costs, due in part to the
    capitalization of certain wages in the first half of 2003
    (primarily due to turnaround activity) and increased group
    medical insurance premiums and workers compensation costs.







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













| |             
| | ------------
| | Retail Group





43



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##### Table of Contents











| |             
| | ------------
| | Phoenix Fuel











| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Selling, General and Administrative Expenses (SG&A)
    from Continuing Operations





| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | higher management incentive bonuses associated with improved
    company financial performance;
|
| |  | higher litigation reserves; and                                                                
|
| |  | increased costs associated with complying with the
    Sarbanes-Oxley Act.                     





| |                 
| | ----------------
| | Interest Expense





| |                                                          
| | ---------------------------------------------------------
| | Net (Gain) Loss on the Disposal/ Write-Down of
    Assets



44



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##### Table of Contents





| |                                        
| | ---------------------------------------
| | Income Taxes from Continuing Operations



Discontinued Operations




Liquidity and Capital Resources




| |                  
| | -----------------
| | Capital Structure







| |   |                                                                                
| | - | -------------------------------------------------------------------------------
| |  | $150,000,000 before discount, of 8% Senior Subordinated
    Notes due 2014; and
|
| |  | $130,001,000 before discount, of 11% Senior Subordinated
    Notes due 2012.   





| |   |                                                                                
| | - | -------------------------------------------------------------------------------
| |  | $150,000,000 before discount, of 8% Senior Subordinated
    Notes due 2014; and
|
| |  | $148,829,000 before discount, of 11% Senior Subordinated
    Notes due 2012.   





| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| |  | the sale of 1,000,000 shares of our common stock; and                              
|
| |  | a redemption of approximately $18,828,000 of our 11% senior
    subordinated notes.







45



---



##### Table of Contents











| |   |                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | limit our ability to use cash flow, or obtain additional
    financing, for future working capital needs, capital
    expenditures, acquisitions or other general corporate purposes;                                          
|
| |  | restrict our ability to pay dividends or purchase shares of our
    common stock;                                                                                                                                              
|
| |  | require a substantial portion of our cash flow from operations
    to make interest payments;                                                                                                                                  
|
| |  | limit our flexibility to plan for, or react to, changes in
    business and industry conditions;                                                                                                                               
|
| |  | place us at a competitive disadvantage compared to less
    leveraged competitors; and                                                                                                                                         
|
| |  | increase our vulnerability to the impact of adverse economic and
    industry conditions and, to the extent of our outstanding debt
    under our floating rate debt facilities, the impact of increases
    in interest rates.





| |   |                                                               
| | - | --------------------------------------------------------------
| |  | generate sufficient cash flow from operations;                
|
| |  | borrow sufficient funds to service our debt; or               
|
| |  | meet our working capital and capital expenditure requirements,





| |   |                                                    
| | - | ---------------------------------------------------
| |  | sell additional assets;                            
|
| |  | reduce capital expenditures;                       
|
| |  | refinance all or a portion of our existing debt; or
|
| |  | obtain additional financing.                       





46



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##### Table of Contents





| |                          
| | -------------------------
| | Cash Flow From Operations





| |   |                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------
| |  | the supply of and demand for crude oil, gasoline and other
    refined products;                                                  
|
| |  | changes in the U.S. economy;                                                                                                      
|
| |  | changes in the level of foreign and domestic production of crude
    oil and refined products;                                    
|
| |  | worldwide political conditions;                                                                                                   
|
| |  | the extent of government laws; and                                                                                                
|
| |  | local factors, including market conditions, pipeline capacity,
    and the level of operations of other refineries in our markets.









12-month


47



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##### Table of Contents





| |                
| | ---------------
| | Working Capital





| |                                   
| | ----------------------------------
| | Capital Expenditures and Resources

















48



---



##### Table of Contents















| |                      
| | ---------------------
| | Long-Term Commitments



|                             |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |         |   |        |        |        |   |         |        |         | 
|---------------------------- | ---------------------------------- | -------------- | --------- | ------------- | --------- | - | --------- | --------- | --------- | - | ------- | ------- | ------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------ | ------ | ------ | - | ------- | ------ | ------- | 
|                             |                                    | Payments Due   |          
|                             |                                    |                |          
|                             |                                    |                |           | All Remaining |          
|                             |                                    | Total          |           |               | 2006      |   |           | 2007      |           |   | 2008    |         |         | 2009 |         |         | 2010    |   |         | Years   |        
|                             |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |        
|                             |                                    | (In thousands) |          
|Long-Term Debt*              |                                    | $              | 280,001   |               |           | $ |          |           |           | $ |        |         |         | $    |        |         |         | $ |        |         |         | $ |       |        |        | $ | 280,001 |       
|Operating Leases             |                                    |                | 55,991    |               |           |   | 8,633     |           |           |   | 7,641   |         |         |      | 6,715   |         |         |   | 5,374   |         |         |   | 4,148  |        |        |   | 23,480  |       
|Purchase Obligations:        |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |         |   |        |        |        |   |         |       
|                             | Raw material purchases             |                |           | 2,937,129     |           |   |           | 1,044,042 |           |   |         | 887,842 |         |      |         | 841,474 |         |   |         | 163,771 |         |   |        |       |        |   |         |       |        
|                             | Services                           |                |           | 25,916        |           |   |           | 25,591    |           |   |         | 75      |         |      |         | 75      |         |   |         | 75      |         |   |        | 75     |        |   |         | 25     |        
|                             |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |        
|                             |                                    | Total          |           |               | 3,299,037 |   |           |           | 1,078,266 |   |         |         | 895,558 |      |         |         | 848,264 |   |         |         | 169,220 |   |        |        | 4,223  |   |         |        | 303,506 | 
|                             |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |        
|Other Long-Term Obligations: |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |         |   |        |        |        |   |         |       
|                             | Aggregate environmental reserves** |                |           | 4,941         |           |   |           | 2,907     |           |   |         | 888     |         |      |         | 48      |         |   |         | 48      |         |   |        | 38     |        |   |         | 1,012  |        
|                             | Pension obligations                |                |           | 3,375         |           |   |           | 3,375     |           |   |         |        |         |      |         |        |         |   |         |        |         |   |        |       |        |   |         |       |        
|                             | Aggregate litigation reserves      |                |           | 990           |           |   |           | 990       |           |   |         |        |         |      |         |        |         |   |         |        |         |   |        |       |        |   |         |       |        
|                             | Interest obligations               |                |           | 194,950       |           |   |           | 26,300    |           |   |         | 26,300  |         |      |         | 26,300  |         |   |         | 26,300  |         |   |        | 26,300 |        |   |         | 63,450 |        
|                             |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |        
|                             |                                    | Total          |           |               | 204,256   |   |           |           | 33,572    |   |         |         | 27,188  |      |         |         | 26,348  |   |         |         | 26,348  |   |        |        | 26,338 |   |         |        | 64,462  | 
|                             |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |        
|Total Obligations            |                                    | $              | 3,503,293 |               |           | $ | 1,111,838 |           |           | $ | 922,746 |         |         | $    | 874,612 |         |         | $ | 195,568 |         |         | $ | 30,561 |        |        | $ | 367,968 |       
|                             |                                    |                |           |               |           |   |           |           |           |   |         |         |         |      |         |         |         |   |         |         |        






| |   |                                   
| | - | ----------------------------------
| | * | Excluding original issue discount.

|   |                                                                                  
|-- | ---------------------------------------------------------------------------------
|** | Takes into account amounts that others are contractually
    obligated to pay us.

49



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|                                                      |  |                                 |        |               |      |   |        |      |  |      |   |      |  |      |   |       |  |   |   |  |  |   |   |  |  |   |   | 
|----------------------------------------------------- |  | ------------------------------- | ------ | ------------- | ---- | - | ------ | ---- |  | ---- | - | ---- |  | ---- | - | ----- |  | - | - |  |  | - | - |  |  | - | - | 
|                                                      |  | Amount of Commitment Expiration
|                                                      |  |                                
|                                                      |  |                                 |        | All Remaining
|Other Commercial Commitments                          |  | Total                           |        |               | 2005 |   |        | 2006 |  | 2007 |   | 2008 |  | 2009 |   | Years
|                                                      |  |                                 |        |               |      |   |        |      |  |      |   |      |  |      |   |      
|                                                      |  | (In thousands)                 
|Line of Credit* (including Standby Letters of Credit) |  | $                               |       |               |      | $ |       |      |  | $    |  |      |  | $    |  |       |  | $ |  |  |  | $ |  |  |  | $ |  | 
|Standby Letters of Credit                             |  |                                 | 66,771 |               |      |   | 66,771 |      |  |      |  |      |  |      |  |       |  |   |  |  |  |   |  |  |  |   |  | 






|  |                                                                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Standby letters of credit reduce the availability of funds for
    direct borrowings under the line of credit. At December 31,
    2005 there were no direct borrowings under the line of credit.





| |                                                   
| | --------------------------------------------------
| | Clean Fuels and Settlement Agreements Expenditures



50



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##### Table of Contents





|                                   |  |                |         |         |              |           |           |              |  |   |         | 
|---------------------------------- |  | -------------- | ------- | ------- | ------------ | --------- | --------- | ------------ |  | - | ------- | 
|                                   |  |                |         |         |              | Remaining |          
|                                   |  |                |         | 2005    |              |           | Projected |             
|                                   |  |                |         | Capital |              |           | Capital   |             
|Projected Capital Expenditures(1)  |  | Amount         |         |         | Expenditures |           |           | Expenditures | 
|                                   |  |                |         |         |              |           |           |              | 
|                                   |  | (In thousands) |        
|Yorktown  Clean Fuels             |  | $              | 130,000 |         |              | $         | 35,100    |              |  | $ | 94,900  | 
|Four Corners  Clean Fuels         |  |                | 40,000  |         |              |           | 8,100     |              |  |   | 31,900  | 
|Yorktown  Sewer System            |  |                | 3,500   |         |              |           |          |              |  |   | 3,500   | 
|Yorktown Consent Decree            |  |                | 27,000  |         |              |           | 8,500     |              |  |   | 18,500  | 
|Four Corners Settlement Agreements |  |                | 18,000  |         |              |           |          |              |  |   | 18,000  | 
|                                   |  |                |         |         |              |           |           |              | 
|Total Anticipated Cash Obligations |  | $              | 218,500 |         |              | $         | 51,700    |              |  | $ | 166,800 | 
|                                   |  |                |         |         |              |           |           |              | 






|    |                           
|--- | --------------------------
|(1) | Excluding accrued amounts.





| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | Yorktown  Clean Fuels  $115,000,000 to
    $130,000,000 of which $35,100,000 was spent in 2005;     
|
| |  | Four Corners  Clean Fuels  $30,000,000 to
    $40,000,000 of which $8,100,000 was spent in 2005;    
|
| |  | Yorktown  Sewer System  $1,500,000 to
    $3,500,000, none of which has been spent yet;             
|
| |  | Yorktown Consent Decree  $20,000,000 to $27,000,000
    of which $8,500,000 was spent in 2005; and   
|
| |  | Four Corners Settlement Agreements  $10,000,000 to
    $18,000,000, none of which has been spent yet.





| |   |                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | increased costs for contractors and manufactured products as a
    result of increased demand arising from, among other things, the
    fact that the clean fuels regulations apply to the entire
    industry, and the need to repair damage in the Gulf Coast caused
    by Hurricanes Katrina and Rita;
|
| |  | the scope of the projects at each of the refineries increasing,
    including the decision to use a higher capacity gasoline
    treating unit with a higher sulfur removal capability at our
    Yorktown refinery; and                                                                                  
|
| |  | an increase in the cost of steel and concrete.                                                                                                                                                                                                                                                            





| |                  
| | -----------------
| | Cash Requirements

12-month




| |   |                                                             
| | - | ------------------------------------------------------------
| |  | the current operating environment for all of our operations;
|
| |  | current cash balances; and                                  
|
| |  | availability of funds under our revolving credit facility.  

51



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| |          
| | ---------
| | Dividends





| |                
| | ---------------
| | Risk Management













| |                                 
| | --------------------------------
| | Environmental, Health and Safety









| |   |                                                                                         
| | - | ----------------------------------------------------------------------------------------
| |  | the uncertain nature of remediation and cleanup cost estimates
    and methods;         
|
| |  | imprecise and conflicting data regarding the hazardous nature of
    various substances;

52



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| |   |                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------
| |  | the number of other potentially responsible parties involved;                                        
|
| |  | defenses that may be available to us; and                                                            
|
| |  | changing environmental, health and safety laws, including
    changing interpretations of these laws.







| |   |                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------
| |  | the installation and operation of refinery equipment, pollution
    control systems and other equipment not currently possessed by
    us;
|
| |  | the acquisition or modification of permits applicable to our
    activities; and                                                          
|
| |  | the initiation or modification of cleanup activities.                                                                                     



Summary of Accrued Environmental Contingencies


|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          |  |   |        |        |   |   |       |       | 
|----------------------------------- | ------ | -------------- | ----- | ----- | -------- | - | --- | -------- | ----- | - | -------- | ------ | - | -------- | ----- | ----- | -------- | - | --- | -------- |  | - | ------ | ------ | - | - | ----- | ----- | 
|                                    |        | As of          |       |       |          |   |     |          | As of |   |          |        |   |          |       | As of |         
|                                    |        | 12/31/03       |       |       | Increase |   |     | Payments |       |   | 12/31/04 |        |   | Increase |       |       | Payments |   |     | 12/31/05 | 
|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          | 
|                                    |        | (In thousands) |      
|Yorktown Refinery                   |        | $              | 5,916 |       |          | $ |    |          |       | $ | (1,385   | )      |   | $        | 4,531 |       |          | $ | 57  |          |  | $ | (1,048 | )      |   | $ | 3,540 |      
|Farmington Refinery                 |        |                | 570   |       |          |   |    |          |       |   |         |        |   |          | 570   |       |          |   |    |          |  |   |       |        |   |   | 570   |      
|Bloomfield Refinery                 |        |                | 267   |       |          |   |    |          |       |   | (16      | )      |   |          | 251   |       |          |   |    |          |  |   | (22    | )      |   |   | 229   |      
|Bloomfield  River Terrace          |        |                |      |       |          |   |    |          |       |   |         |        |   |          |      |       |          |   | 259 |          |  |   | (213   | )      |   |   | 46    |      
|West Outfall  Bloomfield           |        |                |      |       |          |   | 150 |          |       |   | (106     | )      |   |          | 44    |       |          |   |    |          |  |   | (44    | )      |   |   |      |      
|Bloomfield Tank Farm (Old Terminal) |        |                | 67    |       |          |   |    |          |       |   | (14      | )      |   |          | 53    |       |          |   |    |          |  |   | (11    | )      |   |   | 42    |      
|Other Projects                      |        |                | 772   |       |          |   | 3   |          |       |   | (68      | )      |   |          | 707   |       |          |   | 306 |          |  |   | (499   | )      |   |   | 514   |      
|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          | 
|                                    | Totals |                | $     | 7,592 |          |   | $   | 153      |       |   | $        | (1,589 | ) |          | $     | 6,156 |          |   | $   | 622      |  |   | $      | (1,837 | ) |   | $     | 4,941 | 
|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          | 



| |      
| | -----
| | Other



53



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| |                           
| | --------------------------
| | Forward-Looking Statements









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the availability of crude oil and the adequacy and costs of raw
    material supplies generally;                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | our ability to negotiate new crude oil supply contracts;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | our ability to successfully manage the liabilities, including
    environmental liabilities, that we assumed in the Yorktown, Dial
    Oil and Tex-New Mexico pipeline acquisitions;                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | our ability to obtain anticipated levels of indemnification
    associated with prior acquisitions and sales of assets;                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | competitive pressures from existing competitors and new
    entrants, including the potential effects of various pipeline
    projects, competitors plans, as well as plans of our own,
    for expansion projects and refinery improvements that could
    increase the production of refined products in New Mexico,
    refinery improvements made, or being made, by competitors that
    will enable them to process lower quality crude oils which are
    typically less expensive to acquire, and other actions that may
    impact our markets;
|
| |  | volatility in the difference, or spread, between market prices
    for refined products and crude oil and other feedstocks;                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | the risk that our operations will not remain competitive and
    realize acceptable sales volumes and margins in those markets
    where they currently do so;                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | our ability to adequately control capital and operating expenses;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the risk that we will be unable to draw on our lines of credit,
    secure additional financing, access the public debt or equity
    markets or sell sufficient assets if we are unable to fund
    anticipated capital expenditures from cash flow generated by
    operations;                                                                                                                                                                                                                                                                                                   
|
| |  | the risk of increased costs resulting from employee matters,
    including increased employee benefit costs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | the risk that our insurance costs will increase as a result of
    claims we have submitted, market conditions, or other factors;                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | the adoption of new state, federal or tribal legislation or
    regulations; changes to existing legislation (including the
    scheduled elimination of the Arizona underground storage tank
    fund in 2005) or regulations or their interpretation by
    regulators or the courts; regulatory or judicial findings,
    including penalties; as well as other future governmental
    actions that may affect our operations, including the impact of
    any further changes to government-mandated specifications for
    gasoline, diesel fuel and other petroleum products;
|
| |  | the risk that disagreements will arise between regulatory
    agencies and us regarding our obligations under settlements,
    consent decrees and other agreements;                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | the risk that we will not be able to be able to reach an
    agreement with EPA regarding financial assurance in connection
    with the administrative consent order being developed by EPA
    under the Resource Conservation and Recovery Act for our
    Yorktown refinery;                                                                                                                                                                                                                                                                                                    
|
| |  | the risk that we will not continue to qualify for an extension
    of the low sulfur gasoline standards applicable to our Ciniza
    and Bloomfield refineries if we are unable to produce the
    necessary quantity of low sulfur diesel at the required time as
    a result of, among other things, demands placed on engineering
    firms and other consultants as a result of hurricane damage to
    Gulf Coast refineries;                                                                                                                                                 
|
| |  | unplanned or extended shutdowns in refinery operations;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | the risk that future changes in operations to address issues
    raised by threatened or pending litigation, customer
    preferences, or other factors, including those related to our
    discontinuing the use of MTBE as a motor fuel additive, may have
    an adverse impact on our results of operations;                                                                                                                                                                                                                                                                    
|
| |  | the risk that we will not remain in compliance with covenants,
    and other terms and conditions, contained in our notes and
    credit facility;                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | the risk that we will not be able to post satisfactory letters
    of credit;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | general economic factors affecting our operations, markets,
    products, services and prices, including the potential impact of
    additional quantities of Canadian crude oil that may enter the
    U.S. market in the near future;                                                                                                                                                                                                                                                                                                                                             
|
| |  | unexpected environmental remediation costs;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | weather conditions affecting our operations or the areas in
    which our products are refined or marketed;                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | that risk that we will not be able to complete regulatory
    compliance projects, including motor fuel sulfur reduction
    projects, by applicable deadlines as a result of, among other
    things, demands placed on engineering firms and other
    consultants as a result of hurricane damage to Gulf Coast
    refineries, and the time and commitment required for us to
    address the November fire at our Yorktown refinery;                                                                                                                                           
|
| |  | the risk that the repairs to our Yorktown refinery could take
    longer or cost more than we expect;                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | the risk that insurance coverage will not be available as we
    expect in connection with the November 2005 at our Yorktown
    refinery;                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | the risk that the Yorktown refinery will not be able to continue
    to operate at approximately 40,000 barrels per day while
    repairs are being completed                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | the risk that additional turnaround time will be required in
    2006 at the Yorktown refinery in spite of the work currently
    being undertaken;                                                                                                                                                                                                                                                                                                                                                                                                                                 

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the risk that the high return project on the fluid catalytic
    cracker at the Yorktown refinery that we are currently
    undertaking will cost more than we anticipate or not be as
    successful in increasing our yield of higher value finished
    products as we anticipate;                                                                                                                                                   
|
| |  | the risk that the capital project in progress at our Ciniza
    refinery will not enhance the operations of the refinery;                                                                                                                                                                                                                                                                                                               
|
| |  | the risk we will be found to have substantial liability in
    connection with existing or pending litigation;                                                                                                                                                                                                                                                                                                                          
|
| |  | the occurrence of events that cause losses for which we are not
    fully insured;                                                                                                                                                                                                                                                                                                                                                      
|
| |  | the risk that costs associated with environmental projects will
    be higher than currently estimated (including costs associated
    with the resolution of outstanding environmental matters and
    costs associated with reducing the sulfur content of motor fuel)
    or that we will be unable to complete such projects (including
    motor fuel sulfur reduction projects) by applicable regulatory
    compliance deadlines;
|
| |  | the risk that we will be added as a defendant in additional MTBE
    lawsuits, and that we will incur substantial liabilities and
    substantial defense costs in connection with these suits;                                                                                                                                                                                                                                         
|
| |  | the risk that tax authorities will challenge the positions we
    have taken in preparing our tax returns;                                                                                                                                                                                                                                                                                                                              
|
| |  | the risk that changes in manufacturer promotional programs may
    adversely impact our retail operations;                                                                                                                                                                                                                                                                                                                              
|
| |  | the risk that the cost of testing the crude oil pipeline that we
    purchased from Texas-New Mexico Pipe Line Company during the
    third quarter of 2005, and the cost of placing it in service,
    will be considerably more than our current estimates;                                                                                                                                                                           
|
| |  | the risk that the timetable for placing the crude oil pipeline
    that we purchased in the third quarter of 2005 will be different
    than anticipated, or that it will not be possible to place the
    pipeline in service at all;                                                                                                                                                                                                  
|
| |  | the risk that it will not be possible to obtain additional crude
    oil at cost effective prices to either fill the crude oil
    pipeline that we purchased in the third quarter of 2005 or
    transport through the pipeline for processing at our Bloomfield
    and Ciniza refineries; and                                                                                                                                        
|
| |  | other risks described elsewhere in this report or described from
    time to time in our other filings with the Securities and
    Exchange Commission.                                                                                                                                                                                                                                                                                 








|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures about Market
    Risk



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|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















Internal Control-Integrated Framework








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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                     |                                                                                                                       |                                                              |                            |          |         |         |         |          |         |         | 
|---------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | -------------------------- | -------- | ------- | ------- | ------- | -------- | ------- | ------- | 
|                                                     |                                                                                                                       | December 31,                                                 |                           
|                                                     |                                                                                                                       |                                                              |                           
|                                                     |                                                                                                                       | 2005                                                         |                            |          | 2004    |        
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       | (In thousands, except share                                  |                           
|                                                     |                                                                                                                       | and per share data)                                          |                           
|ASSETS                                              
|Current assets:                                      |                                                                                                                       |                                                              |                            |          |         |         |         |         
|                                                     | Cash and cash equivalents                                                                                             |                                                              | $                          | 164,280  |         |         | $       | 23,714   |        
|                                                     | Receivables:                                                                                                          |                                                              |                            |          |         |         |         |          |        
|                                                     |                                                                                                                       | Trade, less allowance for doubtful accounts of $611 and $329 |                            |          | 129,283 |         |         |          | 90,518  |        
|                                                     |                                                                                                                       | Income tax refunds                                           |                            |          | 774     |         |         |          | 3,185   |        
|                                                     |                                                                                                                       | Other                                                        |                            |          | 12,068  |         |         |          | 7,989   |        
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       |                                                              | 142,125                    |          |         |         | 101,692 |         
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     | Inventories                                                                                                           |                                                              |                            | 124,105  |         |         |         | 93,500   |        
|                                                     | Prepaid expenses and other                                                                                            |                                                              |                            | 10,449   |         |         |         | 11,265   |        
|                                                     | Deferred income taxes                                                                                                 |                                                              |                            | 1,396    |         |         |         | 1,834    |        
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       | Total current assets                                         |                            |          | 442,355 |         |         |          | 232,005 |        
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|Property, plant and equipment                        |                                                                                                                       |                                                              | 764,788                    |          |         |         | 671,851 |         
|                                                     | Less accumulated depreciation and amortization                                                                        |                                                              |                            | (297,962 | )       |         |         | (265,475 | )      
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       |                                                              | 466,826                    |          |         |         | 406,376 |         
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|Goodwill                                             |                                                                                                                       |                                                              | 50,607                     |          |         |         | 40,303  |         
|Other assets                                         |                                                                                                                       |                                                              | 24,684                     |          |         |         | 23,722  |         
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       | $                                                            | 984,472                    |          |         | $       | 702,406 |         
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                    
|LIABILITIES AND STOCKHOLDERS EQUITY                
|Current liabilities:                                 |                                                                                                                       |                                                              |                            |          |         |         |         |         
|                                                     | Accounts payable                                                                                                      |                                                              | $                          | 139,710  |         |         | $       | 75,554   |        
|                                                     | Accrued expenses                                                                                                      |                                                              |                            | 68,798   |         |         |         | 53,279   |        
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       | Total current liabilities                                    |                            |          | 208,508 |         |         |          | 128,833 |        
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|Long-term debt                                       |                                                                                                                       |                                                              | 274,864                    |          |         |         | 292,759 |         
|Deferred income taxes                                |                                                                                                                       |                                                              | 76,834                     |          |         |         | 41,039  |         
|Other liabilities                                    |                                                                                                                       |                                                              | 24,430                     |          |         |         | 23,336  |         
|Commitments and contingencies (Notes 11, 12, 13, 17) |                                                                                                                       |                                                              |                            |          |         |         |         |         
|Stockholders equity:                                |                                                                                                                       |                                                              |                            |          |         |         |         |         
|                                                     | Preferred stock, par value $.01 per share,
    10,000,000 shares authorized, none issued                              |                                                              |                            |          |         |         |         |          |        
|                                                     | Common stock, par value $.01 per share,
    50,000,000 shares authorized, 18,366,077 and
    16,085,631 shares issued |                                                              |                            | 184      |         |         |         | 161      |        
|                                                     | Additional paid-in capital                                                                                            |                                                              |                            | 216,917  |         |         |         | 135,407  |        
|                                                     | Retained earnings                                                                                                     |                                                              |                            | 221,203  |         |         |         | 117,325  |        
|                                                     | Unearned compensation related to restricted stock                                                                     |                                                              |                            | (2,014   | )       |         |         |         |        
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       |                                                              | 436,290                    |          |         |         | 252,893 |         
|                                                     | Less common stock in treasury  at cost,
    3,751,980 shares                                                         |                                                              |                            | (36,454  | )       |         |         | (36,454  | )      
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       |                                                              | Total stockholders equity |          |         | 399,836 |         |          |         | 216,439 | 
|                                                     |                                                                                                                       |                                                              |                            |          |         |        
|                                                     |                                                                                                                       | $                                                            | 984,472                    |          |         | $       | 702,406 |         
|                                                     |                                                                                                                       |                                                              |                            |          |         |        



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |       |   |           |      |       |  
|-------------------------------------------------------------------------------------------------- | ---------------------------------------------------------- | --------------------------------------------------- | --------- | -- | ----- | - | --------- | ---- | ----- | - | --------- | ---- | ----- | -
|                                                                                                   |                                                            | Year Ended December 31,                             |          
|                                                                                                   |                                                            |                                                     |          
|                                                                                                   |                                                            | 2005                                                |           |    | 2004  |   |           | 2003 |      
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|                                                                                                   |                                                            | (In thousands, except per share data)               |          
|Net revenues                                                                                       |                                                            | $                                                   | 3,581,246 |    |       | $ | 2,511,589 |      |       | $ | 1,808,818 |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Cost of products sold (excluding depreciation and amortization)                                    |                                                            |                                                     | 3,093,191 |    |       |   | 2,186,070 |      |       |   | 1,511,610 |     
|Operating expenses                                                                                 |                                                            |                                                     | 205,639   |    |       |   | 175,846   |      |       |   | 164,035   |     
|Depreciation and amortization                                                                      |                                                            |                                                     | 40,280    |    |       |   | 37,105    |      |       |   | 36,860    |     
|Selling, general and administrative expenses                                                       |                                                            |                                                     | 45,173    |    |       |   | 37,834    |      |       |   | 30,617    |     
|Net loss on the disposal/write-down of assets, including assets
    held for sale                  |                                                            |                                                     | 1,009     |    |       |   | 161       |      |       |   | 1,837     |     
|Gain from insurance settlement due to Ciniza fire                                                  |                                                            |                                                     | (3,688    | )  |       |   | (3,907    | )    |       |   |          |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Operating income                                                                                   |                                                            |                                                     | 199,642   |    |       |   | 78,480    |      |       |   | 63,859    |     
|Interest expense                                                                                   |                                                            |                                                     | (24,485   | )  |       |   | (32,907   | )    |       |   | (38,993   | )   
|Costs associated with early debt extinguishment                                                    |                                                            |                                                     | (2,082    | )  |       |   | (10,564   | )    |       |   |          |     
|Amortization/write-off of financing costs                                                          |                                                            |                                                     | (2,797    | )  |       |   | (8,341    | )    |       |   | (4,696    | )   
|Investment and other income                                                                        |                                                            |                                                     | 2,799     |    |       |   | 354       |      |       |   | 162       |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Earnings from continuing operations before income taxes                                            |                                                            |                                                     | 173,077   |    |       |   | 27,022    |      |       |   | 20,332    |     
|Provision for income taxes                                                                         |                                                            |                                                     | 69,146    |    |       |   | 10,684    |      |       |   | 7,968     |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Earnings from continuing operations                                                                |                                                            |                                                     | 103,931   |    |       |   | 16,338    |      |       |   | 12,364    |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Discontinued operations                                                                            |                                                            |                                                     |           |    |       |   |           |      |       |   |           |     
|                                                                                                   | Income (loss) from operations of discontinued retail units |                                                     |           | 2  |       |   |           | (218 | )     |   |           | (761 | )    
|                                                                                                   | Gain on disposal                                           |                                                     |           | 22 |       |   |           | 525  |       |   |           | 279  |      
|                                                                                                   | Net loss on asset sales/write-downs                        |                                                     |           |   |       |   |           | (497 | )     |   |           | (233 | )    
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|                                                                                                   |                                                            |                                                     | 24        |    |       |   | (190      | )    |       |   | (715      | )   
|                                                                                                   |                                                            | Provision (benefit) for income taxes                |           |    | 9     |   |           |      | (73   | ) |           |      | (274  | )
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|                                                                                                   |                                                            | Net earnings (loss) from discontinued operations    |           |    | 15    |   |           |      | (117  | ) |           |      | (441  | )
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Cumulative effect of change in accounting principle, net of
    income tax benefit of $46 and $468 |                                                            |                                                     | (68       | )  |       |   |          |      |       |   | (704      | )   
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Net earnings                                                                                       |                                                            | $                                                   | 103,878   |    |       | $ | 16,221    |      |       | $ | 11,219    |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|Earnings (loss) per common share:                                                                  |                                                            |                                                     |           |    |       |   |           |      |       |   |           |     
|                                                                                                   | Basic                                                      |                                                     |           |    |       |   |           |      |       |   |           |      |      
|                                                                                                   |                                                            | Continuing operations                               |           | $  | 7.71  |   |           | $    | 1.47  |   |           | $    | 1.41  |  
|                                                                                                   |                                                            | Discontinued operations                             |           |    |      |   |           |      | (0.01 | ) |           |      | (0.05 | )
|                                                                                                   |                                                            | Cumulative effect of change in accounting principle |           |    | (0.01 | ) |           |      |      |   |           |      | (0.08 | )
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|                                                                                                   |                                                            | $                                                   | 7.70      |    |       | $ | 1.46      |      |       | $ | 1.28      |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|                                                                                                   | Diluted                                                    |                                                     |           |    |       |   |           |      |       |   |           |      |      
|                                                                                                   |                                                            | Continuing operations                               |           | $  | 7.63  |   |           | $    | 1.43  |   |           | $    | 1.40  |  
|                                                                                                   |                                                            | Discontinued operations                             |           |    |      |   |           |      | (0.01 | ) |           |      | (0.05 | )
|                                                                                                   |                                                            | Cumulative effect of change in accounting principle |           |    | (0.01 | ) |           |      |      |   |           |      | (0.08 | )
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      
|                                                                                                   |                                                            | $                                                   | 7.62      |    |       | $ | 1.42      |      |       | $ | 1.27      |     
|                                                                                                   |                                                            |                                                     |           |    |       |   |           |      |      



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                                                           |  |                                         |            |            |       |   |     |         |              |   |          |                |  |            |         |  |        |   |        |               |  |  |           |  |  |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | --------------------------------------- | ---------- | ---------- | ----- | - | --- | ------- | ------------ | - | -------- | -------------- |  | ---------- | ------- |  | ------ | - | ------ | ------------- |  |  | --------- |  |  | - | ------- | - |  | - | ------- | -
|                                                           |  | Common Stock                            |            |            |       |   |     |         | Unearned     |   |          |                |  |            |         | 
|                                                           |  |                                         |            |            |       |   |     |         | Compensation |   |          |                |  |           
|                                                           |  |                                         |            | Additional |       |   |     |         | Related to   |   |          | Treasury Stock |  |            | Total   | 
|                                                           |  | Shares                                  |            |            | Par   |   |     | Paid-In |              |   | Retained |                |  | Restricted |         |  |        |   |        | Stockholders | 
|                                                           |  | Issued                                  |            |            | Value |   |     | Capital |              |   | Earnings |                |  | Stock      |         |  | Shares |   |        | Cost          |  |  | Equity    | 
|                                                           |  |                                         |            |            |       |   |     |         |              |   |          |                |  |            |         |  |        |   |        |               |  |  |           | 
|                                                           |  | (In thousands, except number of shares) |           
|Balances, January 1, 2003                                  |  |                                         | 12,323,759 |            |       | $ | 123 |         |              | $ | 73,763   |                |  | $          | 89,885  |  |        | $ |       |               |  |  | 3,751,980 |  |  | $ | (36,454 | ) |  | $ | 127,317 |  
|401(k) plan contribution                                   |  |                                         | 213,776    |            |       |   | 3   |         |              |   | 897      |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 900     |  
|Net earnings                                               |  |                                         |           |            |       |   |    |         |              |   |         |                |  |            | 11,219  |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 11,219  |  
|                                                           |  |                                         |            |            |       |   |     |         |              |   |          |                |  |            |         |  |        |   |        |               |  |  |           | 
|Balances, December 31, 2003                                |  |                                         | 12,537,535 |            |       |   | 126 |         |              |   | 74,660   |                |  |            | 101,104 |  |        |   |       |               |  |  | 3,751,980 |  |  |   | (36,454 | ) |  |   | 139,436 |  
|401(k) plan contribution                                   |  |                                         | 49,046     |            |       |   | 1   |         |              |   | 899      |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 900     |  
|Stock options exercised                                    |  |                                         | 215,750    |            |       |   | 2   |         |              |   | 1,447    |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 1,449   |  
|Tax benefit of stock options exercised                     |  |                                         |           |            |       |   |    |         |              |   | 1,059    |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 1,059   |  
|Stock issued                                               |  |                                         | 3,283,300  |            |       |   | 32  |         |              |   | 57,342   |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 57,374  |  
|Net earnings                                               |  |                                         |           |            |       |   |    |         |              |   |         |                |  |            | 16,221  |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 16,221  |  
|                                                           |  |                                         |            |            |       |   |     |         |              |   |          |                |  |            |         |  |        |   |        |               |  |  |           | 
|Balances, December 31, 2004                                |  |                                         | 16,085,631 |            |       |   | 161 |         |              |   | 135,407  |                |  |            | 117,325 |  |        |   |       |               |  |  | 3,751,980 |  |  |   | (36,454 | ) |  |   | 216,439 |  
|401(k) plan contribution                                   |  |                                         | 34,196     |            |       |   |    |         |              |   | 971      |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 971     |  
|Stock options exercised                                    |  |                                         | 205,250    |            |       |   | 2   |         |              |   | 1,927    |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 1,929   |  
|Tax benefit of stock options exercised                     |  |                                         |           |            |       |   |    |         |              |   | 2,167    |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 2,167   |  
|Stock issued                                               |  |                                         | 2,000,000  |            |       |   | 20  |         |              |   | 74,402   |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 74,422  |  
|Restricted shares granted                                  |  |                                         | 41,000     |            |       |   | 1   |         |              |   | 2,043    |                |  |            |        |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 2,044   |  
|Unearned compensation related to restricted shares granted |  |                                         |           |            |       |   |    |         |              |   |         |                |  |            |        |  |        |   | (2,014 | )             |  |  |          |  |  |   |        |   |  |   | (2,014  | )
|Net earnings                                               |  |                                         |           |            |       |   |    |         |              |   |         |                |  |            | 103,878 |  |        |   |       |               |  |  |          |  |  |   |        |   |  |   | 103,878 |  
|                                                           |  |                                         |            |            |       |   |     |         |              |   |          |                |  |            |         |  |        |   |        |               |  |  |           | 
|Balances, December 31, 2005                                |  |                                         | 18,366,077 |            |       | $ | 184 |         |              | $ | 216,917  |                |  | $          | 221,203 |  |        | $ | (2,014 | )             |  |  | 3,751,980 |  |  | $ | (36,454 | ) |  | $ | 399,836 |  
|                                                           |  |                                         |            |            |       |   |     |         |              |   |          |                |  |            |         |  |        |   |        |               |  |  |           | 



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |         |   |         |          |         |  
|--------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | --------------------------------------- | -------- | ------- | ------- | - | ------- | -------- | ------- | - | ------- | -------- | ------- | -
|                                                                                                    |                                                                                                                  | Year Ended December 31,                 |         
|                                                                                                    |                                                                                                                  |                                         |         
|                                                                                                    |                                                                                                                  | 2005                                    |          |         | 2004    |   |         | 2003     |        
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|                                                                                                    |                                                                                                                  | (In thousands)                          |         
|Cash flows from operating activities:                                                               |                                                                                                                  |                                         |          |         |         |   |         |          |         |   |         |         
|                                                                                                    | Net earnings (loss)                                                                                              |                                         | $        | 103,878 |         |   | $       | 16,221   |         |   | $       | 11,219   |        
|Adjustments to reconcile net earnings (loss) from to net cash
    provided by operating activities: |                                                                                                                  |                                         |          |         |         |   |         |          |         |   |         |         
|                                                                                                    | Cumulative effect of change in accounting principle, net                                                         |                                         |          | 68      |         |   |         |         |         |   |         | 704      |        
|                                                                                                    | Depreciation and amortization from continuing operations                                                         |                                         |          | 40,280  |         |   |         | 37,105   |         |   |         | 36,860   |        
|                                                                                                    | Depreciation and amortization from discontinued operations                                                       |                                         |          |        |         |   |         | 93       |         |   |         | 657      |        
|                                                                                                    | Amortization/write-off of financing costs                                                                        |                                         |          | 2,797   |         |   |         | 8,341    |         |   |         | 4,696    |        
|                                                                                                    | Compensation expense related to restricted stock award                                                           |                                         |          | 30      |         |   |         |         |         |   |         |         |        
|                                                                                                    | Deferred income taxes                                                                                            |                                         |          | 32,541  |         |   |         | 8,565    |         |   |         | 7,971    |        
|                                                                                                    | Deferred crude oil purchase discounts                                                                            |                                         |          | 1,120   |         |   |         | 2,296    |         |   |         |         |        
|                                                                                                    | Net loss on the disposal/write-down of assets from continuing
    operations, including assets held for sale     |                                         |          | 1,009   |         |   |         | 161      |         |   |         | 1,837    |        
|                                                                                                    | Net (gain) on the disposal/write-down of assets from
    discontinued operations, including assets held for sale |                                         |          | (22     | )       |   |         | (28      | )       |   |         | (46      | )      
|                                                                                                    | (Gain) from insurance settlement of fire incident                                                                |                                         |          | (3,688  | )       |   |         | (4,538   | )       |   |         |         |        
|                                                                                                    | Income tax benefit from exercise of stock options                                                                |                                         |          | 2,167   |         |   |         | 1,059    |         |   |         |         |        
|                                                                                                    | Defined benefit retirement plan contribution                                                                     |                                         |          | (2,039  | )       |   |         | (1,828   | )       |   |         | (1,086   | )      
|                                                                                                    | Long-term retiree medical plan contribution                                                                      |                                         |          | (7      | )       |   |         |         |         |   |         |         |        
|                                                                                                    | Deferred compensation plan contribution                                                                          |                                         |          | (357    | )       |   |         |         |         |   |         |         |        
|                                                                                                    | Changes in operating assets and liabilities                                                                      |                                         |          |         |         |   |         |          |         |   |         |          |        
|                                                                                                    |                                                                                                                  | (Increase) in receivables               |          |         | (26,085 | ) |         |          | (18,830 | ) |         |          | (6,700  | )
|                                                                                                    |                                                                                                                  | (Increase) decrease in inventories      |          |         | (25,562 | ) |         |          | 39,859  |   |         |          | (25,386 | )
|                                                                                                    |                                                                                                                  | Decrease (increase) in prepaid expenses |          |         | 1,360   |   |         |          | (3,823  | ) |         |          | 335     |  
|                                                                                                    |                                                                                                                  | (Increase) in other assets              |          |         | (809    | ) |         |          | (45     | ) |         |          | (1,095  | )
|                                                                                                    |                                                                                                                  | Increase (decrease) in accounts payable |          |         | 59,173  |   |         |          | (11,096 | ) |         |          | 19,369  |  
|                                                                                                    |                                                                                                                  | Increase in accrued expenses            |          |         | 615     |   |         |          | 451     |   |         |          | 11,371  |  
|                                                                                                    |                                                                                                                  | Increase in other liabilities           |          |         | 2,339   |   |         |          | 2,551   |   |         |          | 1,643   |  
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Net cash provided by operating activities                                                           |                                                                                                                  |                                         | 188,808  |         |         |   | 76,514  |          |         |   | 62,349  |         
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Cash flows from investing activities:                                                               |                                                                                                                  |                                         |          |         |         |   |         |          |         |   |         |         
|                                                                                                    | Purchase of property, plant and equipment                                                                        |                                         |          | (70,659 | )       |   |         | (58,671  | )       |   |         | (17,879  | )      
|                                                                                                    | Acquisition activities                                                                                           |                                         |          | (39,405 | )       |   |         |         |         |   |         |         |        
|                                                                                                    | Proceeds from assets held for sale                                                                               |                                         |          | 1,948   |         |   |         | 9,977    |         |   |         | 9,653    |        
|                                                                                                    | Yorktown refinery acquisition contingent payment                                                                 |                                         |          |        |         |   |         | (16,146  | )       |   |         | (8,854   | )      
|                                                                                                    | Funding of restricted cash escrow funds                                                                          |                                         |          | (21,902 | )       |   |         |         |         |   |         |         |        
|                                                                                                    | Release of restricted cash escrow funds                                                                          |                                         |          | 21,883  |         |   |         |         |         |   |         |         |        
|                                                                                                    | Net proceeds from insurance settlement of fire incident                                                          |                                         |          | 3,688   |         |   |         | 6,612    |         |   |         |         |        
|                                                                                                    | Proceeds from sale of property, plant and equipment and other
    assets                                         |                                         |          | 2,578   |         |   |         | 1,846    |         |   |         | 11,780   |        
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Net cash used in investing activities                                                               |                                                                                                                  |                                         | (101,869 | )       |         |   | (56,382 | )        |         |   | (5,300  | )       
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Cash flows from financing activities:                                                               |                                                                                                                  |                                         |          |         |         |   |         |          |         |   |         |         
|                                                                                                    | Payments of long-term debt                                                                                       |                                         |          | (18,828 | )       |   |         | (212,060 | )       |   |         | (14,954  | )      
|                                                                                                    | Payments on short term debt                                                                                      |                                         |          |        |         |   |         | (11,128  | )       |   |         |         |        
|                                                                                                    | Proceeds from line of credit                                                                                     |                                         |          | 51,245  |         |   |         |         |         |   |         | 96,000   |        
|                                                                                                    | Payments on line of credit                                                                                       |                                         |          | (53,959 | )       |   |         |         |         |   |         | (121,000 | )      
|                                                                                                    | Proceeds from issuance of long-term debt                                                                         |                                         |          |        |         |   |         | 147,467  |         |   |         |         |        
|                                                                                                    | Net proceeds from issuance of common stock                                                                       |                                         |          | 74,422  |         |   |         | 57,374   |         |   |         |         |        
|                                                                                                    | Proceeds from exercise of stock options                                                                          |                                         |          | 1,929   |         |   |         | 1,449    |         |   |         |         |        
|                                                                                                    | Long-term debt issuance costs                                                                                    |                                         |          |        |         |   |         | (3,000   | )       |   |         |         |        
|                                                                                                    | Deferred financing costs                                                                                         |                                         |          | (1,182  | )       |   |         | (3,783   | )       |   |         |         |        
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Net cash used in financing activities                                                               |                                                                                                                  |                                         | 53,627   |         |         |   | (23,681 | )        |         |   | (39,954 | )       
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Net increase (decrease) in cash and cash equivalents                                                |                                                                                                                  |                                         | 140,566  |         |         |   | (3,549  | )        |         |   | 17,095  |         
|                                                                                                    | Cash and cash equivalents:                                                                                       |                                         |          |         |         |   |         |          |         |   |         |          |        
|                                                                                                    |                                                                                                                  | Beginning of year                       |          |         | 23,714  |   |         |          | 27,263  |   |         |          | 10,168  |  
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|                                                                                                    |                                                                                                                  | End of year                             |          | $       | 164,280 |   |         | $        | 23,714  |   |         | $        | 27,263  |  
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Income taxes paid/(refunded)                                                                        |                                                                                                                  | $                                       | 30,180   |         |         | $ | 1,797   |          |         | $ | (2,960  | )       
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        
|Interest paid                                                                                       |                                                                                                                  | $                                       | 27,278   |         |         | $ | 35,285  |          |         | $ | 38,645  |         
|                                                                                                    |                                                                                                                  |                                         |          |         |         |   |         |          |        



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Significant Noncash Investing and Financing Activities by
year.








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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1  Organization and Significant
Accounting Policies:




| |             
| | ------------
| | Organization





| |   |                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | on the East Coast  primarily in Virginia, Maryland,
    and North Carolina; and                                                                 
|
| |  | in the Southwest  primarily in New Mexico, Arizona,
    and Colorado, with a concentration in the Four Corners area
    where these states meet.







| |   |                      
| | - | ---------------------
| |  | our refining group;  
|
| |  | our retail group; and
|
| |  | our wholesale group. 





| |                            
| | ---------------------------
| | Principles of Consolidation





| |                                                                
| | ---------------------------------------------------------------
| | Use of Estimates in the Preparation of Financial
    Statements





| |             
| | ------------
| | Net Revenues





| |   |                                                                  
| | - | -----------------------------------------------------------------
| |  | persuasive evidence of an arrangement exists;                    
|
| |  | delivery has occurred or services have been rendered;            
|
| |  | the sellers price to the buyer is fixed or
    determinable; and
|
| |  | collectibility is reasonably assured.                            





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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                         
| | ------------------------
| | Statements of Cash Flows





| |            
| | -----------
| | Derivatives













| |                             
| | ----------------------------
| | Concentration of Credit Risk





| |                  
| | -----------------
| | Trade Receivables





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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|             |  |                |         |  |      |   |        | 
|------------ |  | -------------- | ------- |  | ---- | - | ------ | 
|             |  | December 31,   |        
|             |  |                |        
|             |  | 2005           |         |  | 2004 |  
|             |  |                |         |  |      |  
|             |  | (In thousands) |        
|Trade        |  | $              | 125,229 |  |      | $ | 88,232 | 
|Credit cards |  |                | 4,054   |  |      |   | 2,286  | 
|             |  |                |         |  |      |  
|             |  | $              | 129,283 |  |      | $ | 90,518 | 
|             |  |                |         |  |      |  



| |            
| | -----------
| | Inventories

last-in, first-in,




| |                              
| | -----------------------------
| | Property, Plant and Equipment



|                           |  |  |             | 
|-------------------------- |  |  | ----------- | 
|Buildings and improvements |  |  | 7-30  years | 
|Machinery and equipment    |  |  | 3-24  years | 
|Pipelines                  |  |  | 30 years    | 
|Furniture and fixtures     |  |  | 2-15  years | 
|Vehicles                   |  |  | 3-7 years   | 





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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |         
| | --------
| | Goodwill







| |                  
| | -----------------
| | Long-Lived Assets





| |                             
| | ----------------------------
| | Asset Retirement Obligations





| |               
| | --------------
| | Treasury Stock





| |                           
| | --------------------------
| | Environmental Expenditures



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |             
| | ------------
| | Income Taxes





| |                          
| | -------------------------
| | Earnings Per Common Share





| |                           
| | --------------------------
| | Other Comprehensive Income





| |           
| | ----------
| | Guarantees





| |                                  
| | ---------------------------------
| | Stock-based Employee Compensation



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      |  |   |        |      | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------- | ------------------------------------- | ------- | ---- | ---- | - | ------ | ---- |  | - | ------ | ---- | 
|                                                                                                                                                       |                       | Year Ended December 31,               |        
|                                                                                                                                                       |                       |                                       |        
|                                                                                                                                                       |                       | 2005                                  |         |      | 2004 |   |        | 2003 | 
|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      | 
|                                                                                                                                                       |                       | (In thousands, except per share data) |        
|Net earnings, as reported                                                                                                                              |                       | $                                     | 103,878 |      |      | $ | 16,221 |      |  | $ | 11,219 |     
|Add: Stock-based employee compensation expense included in
    reported net income, net of related tax effect                                          |                       |                                       |        |      |      |   |       |      |  |   |       |     
|Deduct: Total stock-based employee compensation expense
    determined under the fair value based method for all awards, net
    of related tax effect |                       |                                       | (24     | )    |      |   | (143   | )    |  |   | (241   | )   
|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      | 
|Pro forma net earnings                                                                                                                                 |                       | $                                     | 103,854 |      |      | $ | 16,078 |      |  | $ | 10,978 |     
|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      | 
|Net earnings per share:                                                                                                                                |                       |                                       |         |      |      |   |        |      |  |   |        |     
|                                                                                                                                                       | Basic  as reported   |                                       | $       | 7.70 |      |   | $      | 1.46 |  |   | $      | 1.28 | 
|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      | 
|                                                                                                                                                       | Basic  pro forma     |                                       | $       | 7.70 |      |   | $      | 1.45 |  |   | $      | 1.26 | 
|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      | 
|                                                                                                                                                       | Diluted  as reported |                                       | $       | 7.62 |      |   | $      | 1.42 |  |   | $      | 1.27 | 
|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      | 
|                                                                                                                                                       | Diluted  pro forma   |                                       | $       | 7.62 |      |   | $      | 1.41 |  |   | $      | 1.24 | 
|                                                                                                                                                       |                       |                                       |         |      |      |   |        |      | 







| |                              
| | -----------------------------
| | New Accounting Pronouncements





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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                  
| | -----------------
| | Reclassifications



Note 2  Inventories:




|                                                  |                            |                |         |        |         |  |         |        |         | 
|------------------------------------------------- | -------------------------- | -------------- | ------- | ------ | ------- |  | ------- | ------ | ------- | 
|                                                  |                            | December 31,   |        
|                                                  |                            |                |        
|                                                  |                            | 2005           |         |        | 2004    | 
|                                                  |                            |                |         |        |         | 
|                                                  |                            | (In thousands) |        
|First-in, first-out (FIFO) method:              |                            |                |         |        |         |  |         |       
|                                                  | Crude oil                  |                | $       | 77,188 |         |  | $       | 44,435 |        
|                                                  | Refined products           |                |         | 97,150 |         |  |         | 68,863 |        
|                                                  | Refinery and shop supplies |                |         | 13,790 |         |  |         | 12,330 |        
|                                                  | Merchandise                |                |         | 7,259  |         |  |         | 3,092  |        
|Retail method:                                    |                            |                |         |        |         |  |         |       
|                                                  | Merchandise                |                |         | 8,982  |         |  |         | 9,419  |        
|                                                  |                            |                |         |        |         | 
|                                                  |                            | Subtotal       |         |        | 204,369 |  |         |        | 138,139 | 
|Adjustment for last-in, first-out (LIFO) method |                            |                | (80,264 | )      |         |  | (44,639 | )     
|                                                  |                            |                |         |        |         | 
|                                                  |                            | Total          |         | $      | 124,105 |  |         | $      | 93,500  | 
|                                                  |                            |                |         |        |         | 





|                           |  |                         |            |  |      |   |            |      |  |   |           | 
|-------------------------- |  | ----------------------- | ---------- |  | ---- | - | ---------- | ---- |  | - | --------- | 
|                           |  | Year Ended December 31, |           
|                           |  |                         |           
|                           |  | 2005                    |            |  | 2004 |   |            | 2003 | 
|                           |  |                         |            |  |      |   |            |      | 
|Net earnings               |  | $                       | 21,393,000 |  |      | $ | 17,619,000 |      |  | $ | 3,514,000 | 
|Diluted earnings per share |  | $                       | 1.57       |  |      | $ | 1.55       |      |  | $ | 0.40      | 



|                           |  |                         |           |  |      |   |           |      |  |   |           | 
|-------------------------- |  | ----------------------- | --------- |  | ---- | - | --------- | ---- |  | - | --------- | 
|                           |  | Year Ended December 31, |          
|                           |  |                         |          
|                           |  | 2005                    |           |  | 2004 |   |           | 2003 | 
|                           |  |                         |           |  |      |   |           |      | 
|Net earnings               |  | $                       | 2,468,000 |  |      | $ | 9,505,000 |      |  | $ | 1,156,000 | 
|Diluted earnings per share |  | $                       | 0.18      |  |      | $ | 0.84      |      |  | $ | 0.22      | 

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 3  Property, Plant and Equipment:




|                                                |          |                |          |         |      |   |          |         | 
|----------------------------------------------- | -------- | -------------- | -------- | ------- | ---- | - | -------- | ------- | 
|                                                |          | December 31,   |         
|                                                |          |                |         
|                                                |          | 2005           |          |         | 2004 |  
|                                                |          |                |          |         |      |  
|                                                |          | (In thousands) |         
|Land and improvements                           |          | $              | 42,058   |         |      | $ | 40,307   |        
|Buildings and improvements                      |          |                | 115,955  |         |      |   | 105,429  |        
|Machinery and equipment (including turnarounds) |          |                | 475,385  |         |      |   | 469,571  |        
|Pipelines                                       |          |                | 10,894   |         |      |   | 10,582   |        
|Furniture and fixtures                          |          |                | 23,325   |         |      |   | 25,128   |        
|Vehicles                                        |          |                | 13,535   |         |      |   | 8,158    |        
|Construction in progress                        |          |                | 83,636   |         |      |   | 12,676   |        
|                                                |          |                |          |         |      |  
|                                                | Subtotal |                |          | 764,788 |      |   |          | 671,851 | 
|Accumulated depreciation and amortization       |          |                | (297,962 | )       |      |   | (265,475 | )      
|                                                |          |                |          |         |      |  
|                                                | Total    |                | $        | 466,826 |      |   | $        | 406,376 | 
|                                                |          |                |          |         |      |  

Note 4  Goodwill and Other Intangible
Assets:








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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                 |  |                |        |        |         |   |     |                 |         |      |       |   |      |   |        |  |  |   |        |  |  |   |        |  
|---------------------------------------------------------------- |  | -------------- | ------ | ------ | ------- | - | --- | --------------- | ------- | ---- | ----- | - | ---- | - | ------ |  |  | - | ------ |  |  | - | ------ | -
|                                                                 |  |                |        | Retail |         |   |     |                 |        
|                                                                 |  | Refining Group |        |        | Group   |   |     | Wholesale Group |         |      | Total |  
|                                                                 |  |                |        |        |         |   |     |                 |         |      |       |  
|                                                                 |  |                |        | Four   |         |   |     |                 | Phoenix |      |       |   |      |  
|                                                                 |  | Yorktown       |        |        | Corners |   |     |                 |         | Fuel |       |   | Dial |   |        | 
|                                                                 |  |                |        |        |         |   |     |                 |         |      |       |   |      |   |        | 
|                                                                 |  | (In thousands) |       
|Balance as of January 1, 2004                                    |  | $              | 5,254  |        |         | $ | 125 |                 |         | $    | 4,477 |   |      | $ | 14,722 |  |  | $ |       |  |  | $ | 24,578 |  
|Reclassification between Retail Group and Wholesale Group        |  |                |       |        |         |   |    |                 |         |      | (14   | ) |      |   | 14     |  |  |   |       |  |  |   |       |  
|Yorktown refinery acquisition contingent consideration           |  |                | 15,774 |        |         |   |    |                 |         |      |      |   |      |   |       |  |  |   |       |  |  |   | 15,774 |  
|Goodwill written off related to the sale of certain retail units |  |                |       |        |         |   |    |                 |         |      | (38   | ) |      |   |       |  |  |   |       |  |  |   | (38    | )
|Impairment losses related to the closure of certain retail units |  |                |       |        |         |   |    |                 |         |      | (11   | ) |      |   |       |  |  |   |       |  |  |   | (11    | )
|                                                                 |  |                |        |        |         |   |     |                 |         |      |       |   |      |   |        |  |  |  
|Balance as of December 31, 2004                                  |  | $              | 21,028 |        |         | $ | 125 |                 |         | $    | 4,414 |   |      | $ | 14,736 |  |  | $ |       |  |  | $ | 40,303 |  
|Goodwill related to acquisition activity                         |  |                |       |        |         |   |    |                 |         |      |      |   |      |   |       |  |  |   | 10,304 |  |  |   | 10,304 |  
|                                                                 |  |                |        |        |         |   |     |                 |         |      |       |   |      |   |        |  |  |  
|Balance as of December 31, 2005                                  |  | $              | 21,028 |        |         | $ | 125 |                 |         | $    | 4,414 |   |      | $ | 14,736 |  |  | $ | 10,304 |  |  | $ | 50,607 |  
|                                                                 |  |                |        |        |         |   |     |                 |         |      |       |   |      |   |        |  |  |  







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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                               |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              |  |   |       |       |  |  |  |    | 
|---------------------------------------------- | -------------------- | ----------------- | ------ | ---------- | ----------------- | - | ----- | -------- |  | ----- | -------- | ----- |  | ------------ | ------ | ----- | -------- | ------- | ----- | ------------ |  | - | ----- | ----- |  |  |  | -- | 
|                                               |                      | December 31, 2005 |        |            | December 31, 2004 |   |       |         
|                                               |                      |                   |        |            |                   |   |       | Weighted | 
|                                               |                      | Gross             |        |            |                   |   | Net   |          |  | Gross |          |       |  |              | Net    |       |          | Average |      
|                                               |                      | Carrying          |        |            | Amortization      |   |       | Carrying |  |       | Carrying |       |  | Accumulated  |        |       | Carrying |         |       | Amortization | 
|                                               |                      | Value             |        |            | Accumulated       |   |       | Value    |  |       | Value    |       |  | Amortization |        |       | Value    |         |       | Period       | 
|                                               |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              | 
|                                               |                      |                   |        | (In years) |                  
|                                               |                      | (In thousands)    |        |            |                  
|Amortized intangible assets:                   |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              |  |   |       |       |  |  |  |   
|                                               | Rights-of-way        |                   | $      | 3,729      |                   |   | $     | 2,870    |  |       | $        | 859   |  |              | $      | 3,630 |          |         | $     | 2,708        |  |   | $     | 922   |  |  |  | 21 | 
|                                               | Contracts            |                   |        | 1,376      |                   |   |       | 1,227    |  |       |          | 149   |  |              |        | 1,367 |          |         |       | 1,109        |  |   |       | 258   |  |  |  | 12 | 
|                                               | Licenses and permits |                   |        | 1,096      |                   |   |       | 503      |  |       |          | 593   |  |              |        | 1,096 |          |         |       | 379          |  |   |       | 717   |  |  |  | 13 | 
|                                               |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              | 
|                                               |                      |                   | 6,201  |            |                   |   | 4,600 |          |  |       | 1,601    |       |  |              | 6,093  |       |          |         | 4,196 |              |  |   | 1,897 |       |  |  |  |   
|                                               |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              | 
|Intangible assets not subject to amortization: |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              |  |   |       |       |  |  |  |   
|                                               | Liquor licenses      |                   |        | 8,335      |                   |   |       |         |  |       |          | 8,335 |  |              |        | 7,315 |          |         |       |             |  |   |       | 7,315 |  |  |  |    | 
|                                               |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              | 
|Total intangible assets                        |                      | $                 | 14,536 |            |                   | $ | 4,600 |          |  | $     | 9,936    |       |  | $            | 13,408 |       |          | $       | 4,196 |              |  | $ | 9,212 |       |  |  |  |   
|                                               |                      |                   |        |            |                   |   |       |          |  |       |          |       |  |              |        |       |          |         |       |              | 



|     |  |                |     | 
|---- |  | -------------- | --- | 
|     |  | (In thousands) |    
|2006 |  | $              | 412 | 
|2007 |  |                | 263 | 
|2008 |  |                | 221 | 
|2009 |  |                | 219 | 
|2010 |  |                | 94  | 

Note 5  Assets Held For Sale, Discontinued
Operations, and Asset Disposals:




|                                                 |  |                         |    |  |      |   |       |      |  |   |        |  
|------------------------------------------------ |  | ----------------------- | -- |  | ---- | - | ----- | ---- |  | - | ------ | -
|                                                 |  | Year Ended December 31, |   
|                                                 |  |                         |   
|                                                 |  | 2005                    |    |  | 2004 |   |       | 2003 | 
|                                                 |  |                         |    |  |      |   |       |      | 
|                                                 |  | (In thousands)          |   
|Net revenues                                     |  | $                       |   |  |      | $ | 1,269 |      |  | $ | 27,620 |  
|                                                 |  |                         |    |  |      |   |       |      | 
|Net operating loss on retail units               |  | $                       | 2  |  |      | $ | (218  | )    |  | $ | (761   | )
|Gain on disposal of retail units                 |  |                         | 22 |  |      |   | 525   |      |  |   | 279    |  
|Impairment and other write-downs on retail units |  |                         |   |  |      |   | (497  | )    |  |   | (233   | )
|                                                 |  |                         |    |  |      |   |       |      | 
|Earnings (loss) before income taxes              |  | $                       | 24 |  |      | $ | (190  | )    |  | $ | (715   | )
|                                                 |  |                         |    |  |      |   |       |      | 
|Net (loss) earnings                              |  | $                       | 15 |  |      | $ | (117  | )    |  | $ | (441   | )
|Allocated goodwill included in gain on disposal  |  | $                       |   |  |      | $ | 38    |      |  | $ | 113    |  



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Note 6  Accrued Expenses:




|                                                        |       |                |        |        |      |   |        |        | 
|------------------------------------------------------- | ----- | -------------- | ------ | ------ | ---- | - | ------ | ------ | 
|                                                        |       | December 31,   |       
|                                                        |       |                |       
|                                                        |       | 2005           |        |        | 2004 |  
|                                                        |       |                |        |        |      |  
|                                                        |       | (In thousands) |       
|Excise taxes                                            |       | $              | 23,330 |        |      | $ | 24,667 |       
|Payroll and related costs                               |       |                | 11,231 |        |      |   | 8,327  |       
|Bonus, profit sharing and retirement plan contributions |       |                | 14,608 |        |      |   | 6,489  |       
|Interest                                                |       |                | 3,321  |        |      |   | 3,633  |       
|Other taxes                                             |       |                | 5,901  |        |      |   | 3,092  |       
|Other                                                   |       |                | 10,407 |        |      |   | 7,071  |       
|                                                        |       |                |        |        |      |  
|                                                        | Total |                | $      | 68,798 |      |   | $      | 53,279 | 
|                                                        |       |                |        |        |      |  

Note 7  Asset Retirement Obligations:








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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. Landfills  pursuant to Virginia law, the two
    solid waste management facilities at our Yorktown refinery must
    satisfy closure and post-closure care and financial
    responsibility requirements.                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | 2. Crude Pipelines  our
    right-of-way agreements
    generally require that pipeline properties be returned to their
    original condition when the agreements are no longer in effect.
    This means that the pipeline surface facilities must be
    dismantled and removed and certain site reclamation performed.
    We do not believe these
    right-of-way agreements
    will require us to remove the underground pipe upon taking the
    pipeline permanently out of service. Regulatory requirements,
    however, may mandate that such
    out-of-service
    underground pipe be purged.
|
| | 3. Storage Tanks  we have a legal obligation
    under applicable law to remove or close in place certain
    underground and aboveground storage tanks, both on owned
    property and leased property, once they are taken out of
    service. Under some lease arrangements, we also have committed
    to restore the leased property to its original condition.                                                                                                                                                                                                                                         





| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. Refinery Piping and Heaters  we have a legal
    obligation to properly remove or dispose of materials that
    contain asbestos which surround certain refinery piping and
    heaters.



|                            |  |                |       |   |      |   |       |  
|--------------------------- |  | -------------- | ----- | - | ---- | - | ----- | -
|                            |  | December 31,   |      
|                            |  |                |      
|                            |  | 2005           |       |   | 2004 |  
|                            |  |                |       |   |      |  
|                            |  | (In thousands) |      
|Liability beginning of year |  | $              | 2,272 |   |      | $ | 2,223 |  
|Liabilities incurred        |  |                | 322   |   |      |   | 57    |  
|Liabilities settled         |  |                | (150  | ) |      |   | (259  | )
|Accretion expense           |  |                | 181   |   |      |   | 251   |  
|                            |  |                |       |   |      |  
|Liability end of period     |  | $              | 2,625 |   |      | $ | 2,272 |  
|                            |  |                |       |   |      |  



Note 8  Long-Term Debt:




|                                                                                                                              |       |                |         |         |      |   |         |         | 
|----------------------------------------------------------------------------------------------------------------------------- | ----- | -------------- | ------- | ------- | ---- | - | ------- | ------- | 
|                                                                                                                              |       | December 31,   |        
|                                                                                                                              |       |                |        
|                                                                                                                              |       | 2005           |         |         | 2004 |  
|                                                                                                                              |       |                |         |         |      |  
|                                                                                                                              |       | (In thousands) |        
|11% senior subordinated notes, due 2012, net of unamortized
    discount of $2,882 and $3,635, interest payable semi-annually |       | $              | 127,119 |         |      | $ | 145,194 |        
|8% senior subordinated notes, due 2014, net of unamortized
    discount of $2,255 and $2,435, interest payable semi-annually  |       |                | 147,745 |         |      |   | 147,565 |        
|                                                                                                                              |       |                |         |         |      |  
|                                                                                                                              | Total |                | $       | 274,864 |      |   | $       | 292,759 | 
|                                                                                                                              |       |                |         |         |      |  

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










| |   |                                                   
| | - | --------------------------------------------------
| |  | create liens;                                     
|
| |  | incur or guarantee debt;                          
|
| |  | pay dividends;                                    
|
| |  | repurchase shares of our common stock;            
|
| |  | sell certain assets or subsidiary stock;          
|
| |  | engage in certain mergers;                        
|
| |  | engage in certain transactions with affiliates; or
|
| |  | alter our current line of business.               









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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |   |                                             
| | - | --------------------------------------------
| |  | accounts receivable;                        
|
| |  | inventory;                                  
|
| |  | contracts;                                  
|
| |  | chattel paper;                              
|
| |  | trademarks;                                 
|
| |  | copyrights;                                 
|
| |  | patents;                                    
|
| |  | license rights;                             
|
| |  | deposits; and                               
|
| |  | investment accounts and general intangibles.





| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | incur additional indebtedness;                                                           
|
| |  | create liens;                                                                            
|
| |  | dispose of assets;                                                                       
|
| |  | consolidate or merge;                                                                    
|
| |  | make loans and investments;                                                              
|
| |  | enter into transactions with affiliates;                                                 
|
| |  | use loan proceeds for certain purposes;                                                  
|
| |  | guarantee obligations and incur contingent obligations;                                  
|
| |  | enter into agreements restricting the ability of subsidiaries to
    pay dividends to us;
|
| |  | make distributions or stock repurchases;                                                 
|
| |  | make significant changes in accounting practices or change our
    fiscal year; and      
|
| |  | prepay or modify subordinated indebtedness.                                              





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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Note 9  Financial Instruments and Hedging
Activity:






|                                       |                           |                |   |         |            |  |   |          |  |  |            |         |  |  |   |         | 
|-------------------------------------- | ------------------------- | -------------- | - | ------- | ---------- |  | - | -------- |  |  | ---------- | ------- |  |  | - | ------- | 
|                                       |                           | December 31,   |  
|                                       |                           |                |  
|                                       |                           | 2005           |   |         | 2004       | 
|                                       |                           |                |   |         |            | 
|                                       |                           | Carrying       |   |         | Estimated  |  |   | Carrying |  |  | Estimated  |        
|                                       |                           | Amount         |   |         | Fair Value |  |   | Amount   |  |  | Fair Value |        
|                                       |                           |                |   |         |            |  |   |          |  |  |            |        
|                                       |                           | (In thousands) |  
|Balance Sheet  Financial Instruments: |                           |                |   |         |            |  |   |          |  |  |            |         |  |  |   |        
|                                       | Fixed rate long-term debt |                | $ | 274,864 |            |  | $ | 299,695  |  |  | $          | 292,759 |  |  | $ | 329,392 | 







| |                   
| | ------------------
| | Hedging Activities







Note 10  Stock Incentive Plans:




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NOTES TO CONSOLIDATED FINANCIAL
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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                    |           |        |         |                  |                |   |      |       | 
|----------------------------------- | --------- | ------ | ------- | ---------------- | -------------- | - | ---- | ----- | 
|                                    |           |        |         | Weighted Average |               
|Options Outstanding At              |           | Shares |         |                  | Exercise Price |  
|                                    |           |        |         |                  |                |  
|January 1, 2003                     |           |        | 552,050 |                  |                | $ | 8.41 |      
|                                    | Granted   |        |         | 140,500          |                |   |      | 5.24  | 
|                                    | Expired   |        |         | (103,550         | )              |   |      | 8.36  | 
|                                    | Forfeited |        |         | (65,000          | )              |   |      | 6.35  | 
|                                    |           |        |         |                  |                |  
|December 31, 2003                   |           |        | 524,000 |                  |                |   | 7.83 |      
|                                    | Exercised |        |         | (215,750         | )              |   |      | 6.72  | 
|                                    | Forfeited |        |         | (2,500           | )              |   |      | 2.85  | 
|                                    |           |        |         |                  |                |  
|December 31, 2004                   |           |        | 305,750 |                  |                |   | 8.65 |      
|                                    | Exercised |        |         | (205,250         | )              |   |      | 9.40  | 
|                                    |           |        |         |                  |                |  
|December 31, 2005                   |           |        | 100,500 |                  |                | $ | 7.12 |      
|                                    |           |        |         |                  |                |  
|Options exercisable at December 31: |           |        |         |                  |                |   |      |      
|                                    | 2005      |        |         | 100,500          |                |   | $    | 7.12  | 
|                                    | 2004      |        |         | 235,500          |                |   |      | 9.67  | 
|                                    | 2003      |        |         | 314,500          |                |   |      | 10.08 | 



|                    |  |             |                     |  |                  |  |          |             |  |  |                |  |  |   |      | 
|------------------- |  | ----------- | ------------------- |  | ---------------- |  | -------- | ----------- |  |  | -------------- |  |  | - | ---- | 
|Options Outstanding |  |             |                    
|                    |  |             | Options Exercisable | 
|                    |  | Weighted    |                     |  |                  | 
|                    |  | Average     |                     |  |                  |  | Weighted |            
|                    |  | Number      |                     |  | Remaining        |  |          | Number      |  |  | Average        | 
|Exercise Prices     |  | Outstanding |                     |  | Contractual Life |  |          | Exercisable |  |  | Exercise Price | 
|                    |  |             |                     |  |                  |  |          |             |  |  |                | 
|$9.95               |  |             | 44,000              |  |                  |  | 5.4      |             |  |  | 44,000         |  |  | $ | 9.95 | 
|$2.85               |  |             | 7,500               |  |                  |  | 6.9      |             |  |  | 7,500          |  |  | $ | 2.85 | 
|$5.24               |  |             | 49,000              |  |                  |  | 7.4      |             |  |  | 49,000         |  |  | $ | 5.24 | 



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |      |     |  
|----------------------- |  | ---- | --- | -
|                        |  | 2003 |    
|                        |  |      |    
|Expected life in years  |  |      | 7   |  
|Risk-free interest rate |  |      | 3.6 | %
|Volatility              |  |      | 60  | %
|Dividend Yield          |  |      |    |  



Note 11  Interest, Operating Leases and Rent
Expense:




8.5-acres




|                                |  |                  |        | 
|------------------------------- |  | ---------------- | ------ | 
|                                |  | Land, Building,  |       
|                                |  | Machinery and    |       
|                                |  | Equipment Leases |       
|                                |  |                  |       
|                                |  | (In thousands)   |       
|2006                            |  | $                | 8,633  | 
|2007                            |  |                  | 7,641  | 
|2008                            |  |                  | 6,715  | 
|2009                            |  |                  | 5,374  | 
|2010                            |  |                  | 4,148  | 
|2011  2026                     |  |                  | 23,480 | 
|                                |  |                  |       
|Total minimum payments required |  | $                | 55,991 | 
|                                |  |                  |       







|          |                                        
|--------- | ---------------------------------------
|Note 12  | 401(k) and Deferred Compensation Plans:



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






















|          |                                      
|--------- | -------------------------------------
|Note 13  | Pension and Post-Retirement Benefits:



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


12-month






| |   |                               
| | - | ------------------------------
| |  | equity securities: 50-70%; and
|
| |  | debt securities: 30-50%       









|                                      |                                                |                   |   |            |                      |  |   |            |   |  |      |           |   |  |   |           |  
|------------------------------------- | ---------------------------------------------- | ----------------- | - | ---------- | -------------------- |  | - | ---------- | - |  | ---- | --------- | - |  | - | --------- | -
|                                      |                                                | Cash Balance Plan |   |            | Retiree Medical Plan | 
|                                      |                                                |                   |   |            |                      | 
|                                      |                                                | 2005              |   |            | 2004                 |  |   | 2005       |   |  | 2004 |          
|                                      |                                                |                   |   |            |                      |  |   |            |   |  |      |          
|Reconciliation of benefit obligation: |                                                |                   |   |            |                      |  |   |            |   |  |      |           |   |  |   |          
|                                      | Benefit obligation at beginning of year        |                   | $ | 11,740,888 |                      |  | $ | 10,811,793 |   |  | $    | 3,653,595 |   |  | $ | 3,363,229 |  
|                                      | Service cost                                   |                   |   | 1,356,525  |                      |  |   | 1,380,020  |   |  |      | 219,695   |   |  |   | 207,573   |  
|                                      | Interest cost                                  |                   |   | 671,121    |                      |  |   | 537,174    |   |  |      | 220,665   |   |  |   | 194,693   |  
|                                      | Benefit paid                                   |                   |   | (307,018   | )                    |  |   | (68,729    | ) |  |      | (6,580    | ) |  |   |          |  
|                                      | Actuarial loss (gain)                          |                   |   | 1,365,943  |                      |  |   | (919,370   | ) |  |      | 193,178   |   |  |   | (111,900  | )
|                                      | Plan amendments                                |                   |   | 254,417    |                      |  |   |           |   |  |      |          |   |  |   |          |  
|                                      |                                                |                   |   |            |                      |  |   |            |   |  |      |          
|                                      | Benefit obligation at year end                 |                   | $ | 15,081,876 |                      |  | $ | 11,740,888 |   |  | $    | 4,280,553 |   |  | $ | 3,653,595 |  
|                                      |                                                |                   |   |            |                      |  |   |            |   |  |      |          
|Reconciliation of plan assets:        |                                                |                   |   |            |                      |  |   |            |   |  |      |           |   |  |   |          
|                                      | Fair value of plan assets at beginning of year |                   | $ | 3,083,403  |                      |  | $ | 1,087,345  |   |  | $    |          |   |  | $ |          |  
|                                      | Actual return on plan assets                   |                   |   | 210,356    |                      |  |   | 236,532    |   |  |      |          |   |  |   |          |  
|                                      | Employer contributions                         |                   |   | 2,039,000  |                      |  |   | 1,828,255  |   |  |      | 6,580     |   |  |   |          |  
|                                      | Benefits paid                                  |                   |   | (307,018   | )                    |  |   | (68,729    | ) |  |      | (6,580    | ) |  |   |          |  
|                                      |                                                |                   |   |            |                      |  |   |            |   |  |      |          
|                                      | Fair value of plan assets at end of year       |                   | $ | 5,025,741  |                      |  | $ | 3,083,403  |   |  | $    |          |   |  | $ |          |  
|                                      |                                                |                   |   |            |                      |  |   |            |   |  |      |          

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                                                                         |                                      |                   |             |           |                      |   |            |           |   |   |            |         |  |   |            |         | 
|-------------------------------------------------------------------------------------------------------- | ------------------------------------ | ----------------- | ----------- | --------- | -------------------- | - | ---------- | --------- | - | - | ---------- | ------- |  | - | ---------- | ------- | 
|                                                                                                         |                                      | Cash Balance Plan |             |           | Retiree Medical Plan |  
|                                                                                                         |                                      |                   |             |           |                      |  
|                                                                                                         |                                      | 2005              |             |           | 2004                 |   |            | 2005      |   |   | 2004       |        
|                                                                                                         |                                      |                   |             |           |                      |   |            |           |   |   |            |        
|Unfunded status                                                                                          |                                      | $                 | (10,056,135 | )         |                      | $ | (8,657,485 | )         |   | $ | (4,280,553 | )       |  | $ | (3,653,595 | )      
|Unrecognized net prior service cost                                                                      |                                      |                   | 360,889     |           |                      |   |           |           |   |   |           |         |  |   |           |        
|Unrecognized net loss (gain)                                                                             |                                      |                   | 1,340,249   |           |                      |   | (32,750    | )         |   |   | 694,893    |         |  |   | 517,720    |        
|                                                                                                         |                                      |                   |             |           |                      |   |            |           |   |   |            |        
|Accrued benefit cost(a)                                                                                  |                                      | $                 | (8,354,997  | )         |                      | $ | (8,690,235 | )         |   | $ | (3,585,660 | )       |  | $ | (3,135,875 | )      
|                                                                                                         |                                      |                   |             |           |                      |   |            |           |   |   |            |        
|(a) The amounts are reflected in Other
    Liabilities in the accompanying Consolidated Balance Sheets |                                      |                   |             |           |                      |   |            |           |   |   |            |         |  |   |            |        
|Net periodic benefit cost included the following:                                                        |                                      |                   |             |           |                      |   |            |           |   |   |            |         |  |   |            |        
|                                                                                                         | Service cost                         |                   | $           | 1,356,525 |                      |   | $          | 1,380,020 |   |   | $          | 219,695 |  |   | $          | 207,573 | 
|                                                                                                         | Interest cost                        |                   |             | 671,121   |                      |   |            | 537,174   |   |   |            | 220,665 |  |   |            | 194,693 | 
|                                                                                                         | Expected return on assets            |                   |             | (277,380  | )                    |   |            | (121,299  | ) |   |            |        |  |   |            |        | 
|                                                                                                         | Amortization of prior service cost   |                   |             | (106,472  | )                    |   |            |          |   |   |            |        |  |   |            |        | 
|                                                                                                         | Recognized net actuarial loss (gain) |                   |             | 59,968    |                      |   |            |          |   |   |            | 16,005  |  |   |            | 17,494  | 
|                                                                                                         |                                      |                   |             |           |                      |   |            |           |   |   |            |        
|                                                                                                         | Net periodic benefit cost            |                   | $           | 1,703,762 |                      |   | $          | 1,795,895 |   |   | $          | 456,365 |  |   | $          | 419,760 | 
|                                                                                                         |                                      |                   |             |           |                      |   |            |           |   |   |            |        





| |                                  
| | ---------------------------------
| | Weighted Average Plan Assumptions

|                                                                                                          |                                |                   |  |            |                      |  |  |            |   |  |      |            |   |  |  |            |  
|--------------------------------------------------------------------------------------------------------- | ------------------------------ | ----------------- |  | ---------- | -------------------- |  |  | ---------- | - |  | ---- | ---------- | - |  |  | ---------- | -
|                                                                                                          |                                | Cash Balance Plan |  |            | Retiree Medical Plan | 
|                                                                                                          |                                |                   |  |            |                      | 
|                                                                                                          |                                | 2005              |  |            | 2004                 |  |  | 2005       |   |  | 2004 |           
|                                                                                                          |                                |                   |  |            |                      |  |  |            |   |  |      |           
|Weighted average assumptions used to determine benefit
    obligations at December 31:                    |                                |                   |  |            |                      |  |  |            |   |  |      |            |   |  |  |           
|                                                                                                          | Measurement date               |                   |  | 12/31/2005 |                      |  |  | 12/31/2004 |   |  |      | 12/31/2005 |   |  |  | 12/31/2004 |  
|                                                                                                          | Discount rate                  |                   |  | 5.50       | %                    |  |  | 5.50       | % |  |      | 5.75       | % |  |  | 6.00       | %
|                                                                                                          | Rate of compensation increase* |                   |  | 3.70       | %                    |  |  | 4.00       | % |  |      |           |   |  |  |           |  
|Weighted average assumptions used to determine net periodic
    benefit cost for years ended December 31: |                                |                   |  |            |                      |  |  |            |   |  |      |            |   |  |  |           
|                                                                                                          | Discount rate                  |                   |  | 5.50       | %                    |  |  | 6.00       | % |  |      | 6.00       | % |  |  | 6.00       | %
|                                                                                                          | Expected return on assets      |                   |  | 8.50       | %                    |  |  | 8.50       | % |  |      |           |   |  |  |           |  
|                                                                                                          | Rate of compensation increase* |                   |  | 4.00       | %                    |  |  | 4.00       | % |  |      |           |   |  |  |           |  






|  |                                                                                                                                                                                                                                                                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Salary increases are assumed to increase at a rate of 3.7% for
    determining benefit obligations at December 31, 2005 and 4%
    for determining net periodic benefit cost for 2005. An
    additional 5% increase is added to the ultimate rate for those
    with less than one year of service grading down to 0% once a
    participant has five years of service.



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |            
| | -----------
| | Plan Assets



|                  |       |                |    |     |      |  |    |     |  
|----------------- | ----- | -------------- | -- | --- | ---- |  | -- | --- | -
|                  |       | Percentage of  |   
|                  |       | Plan Assets at |   
|                  |       | December 31,   |   
|                  |       |                |   
|Asset Category    |       | 2005           |    |     | 2004 | 
|                  |       |                |    |     |      | 
|Equity securities |       |                | 70 | %   |      |  | 70 | %  
|Debt securities   |       |                | 27 | %   |      |  | 27 | %  
|Real estate       |       |                | 0  | %   |      |  | 0  | %  
|Other             |       |                | 3  | %   |      |  | 3  | %  
|                  |       |                |    |     |      | 
|                  | Total |                |    | 100 | %    |  |    | 100 | %
|                  |       |                |    |     |      | 



| |                                     
| | ------------------------------------
| | Assumed Health Care Cost Trend Rates

|                                                     |                                                                                       |                 |  |      |       |   |  |      |       |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------- | --------------- |  | ---- | ----- | - |  | ---- | ----- | -
|                                                     |                                                                                       | Retiree Medical | 
|                                                     |                                                                                       | Plan            | 
|                                                     |                                                                                       |                 | 
|                                                     |                                                                                       | 2005            |  |      | 2004  |  
|                                                     |                                                                                       |                 |  |      |       |  
|Assumed health care cost trend rates at December 31: |                                                                                       |                 |  |      |       |   |  |     
|                                                     | Health care cost trend rate assumed for next year:                                    |                 |  |      |       |   |  |      |      
|                                                     |                                                                                       | HMO             |  |      | 8.50  | % |  |      | 9.50  | %
|                                                     |                                                                                       | Pre-65 Non-HMO  |  |      | 10.50 | % |  |      | 11.50 | %
|                                                     |                                                                                       | Post-65 Non-HMO |  |      | 11.50 | % |  |      | 13.00 | %
|                                                     | Rate to which the cost trend rate is assumed to decline (the
    ultimate trend rate) |                 |  | 4.50 | %     |   |  | 4.50 | %    
|                                                     | Year that the rate reaches the ultimate trend rate                                    |                 |  | 2012 |       |   |  | 2012 |      



|                                                        |  |          |        |  |          |   |         |  
|------------------------------------------------------- |  | -------- | ------ |  | -------- | - | ------- | -
|                                                        |  | 1%-Point |       
|                                                        |  |          |       
|                                                        |  | Increase |        |  | Decrease |  
|                                                        |  |          |        |  |          |  
|Effect on total of service and interest cost components |  | $        | 3,860  |  |          | $ | (3,949  | )
|Effect on postretirement benefit obligation             |  |          | 37,698 |  |          |   | (38,358 | )

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |              
|--------- | -------------
|Note 14  | Income Taxes:



|                                           |         |                         |        |        |      |   |        |        |   |   |       |       |  
|------------------------------------------ | ------- | ----------------------- | ------ | ------ | ---- | - | ------ | ------ | - | - | ----- | ----- | -
|                                           |         | Year Ended December 31, |       
|                                           |         |                         |       
|                                           |         | 2005                    |        |        | 2004 |   |        | 2003   |  
|                                           |         |                         |        |        |      |   |        |        |  
|                                           |         | (In thousands)          |       
|Current:                                   |         |                         |        |        |      |   |        |        |   |   |       |      
|                                           | Federal |                         | $      | 31,423 |      |   | $      | 3,198  |   |   | $     | (4    | )
|                                           | State   |                         |        | 5,182  |      |   |        | (1,079 | ) |   |       | 1     |  
|                                           |         |                         |        |        |      |   |        |        |  
|                                           |         |                         | 36,605 |        |      |   | 2,119  |        |   |   | (3    | )    
|                                           |         |                         |        |        |      |   |        |        |  
|Deferred:                                  |         |                         |        |        |      |   |        |        |   |   |       |      
|                                           | Federal |                         |        | 24,274 |      |   |        | 6,001  |   |   |       | 8,391 |  
|                                           | State   |                         |        | 8,267  |      |   |        | 2,564  |   |   |       | (420  | )
|                                           |         |                         |        |        |      |   |        |        |  
|                                           |         |                         | 32,541 |        |      |   | 8,565  |        |   |   | 7,971 |      
|                                           |         |                         |        |        |      |   |        |        |  
|Total provision from continuing operations |         | $                       | 69,146 |        |      | $ | 10,684 |        |   | $ | 7,968 |      
|                                           |         |                         |        |        |      |   |        |        |  





|                                                                      |                                     |                         |        |       |      |   |        |      |  |   |       |      |  
|--------------------------------------------------------------------- | ----------------------------------- | ----------------------- | ------ | ----- | ---- | - | ------ | ---- |  | - | ----- | ---- | -
|                                                                      |                                     | Year Ended December 31, |       
|                                                                      |                                     |                         |       
|                                                                      |                                     | 2005                    |        |       | 2004 |   |        | 2003 | 
|                                                                      |                                     |                         |        |       |      |   |        |      | 
|                                                                      |                                     | (In thousands)          |       
|Income taxes at the statutory U.S. federal income tax rate
    of 35% |                                     | $                       | 60,577 |       |      | $ | 9,458  |      |  | $ | 7,116 |     
|Increase (decrease) in taxes resulting from:                          |                                     |                         |        |       |      |   |        |      |  |   |       |     
|                                                                      | State taxes, net                    |                         |        | 8,742 |      |   |        | 965  |  |   |       | (272 | )
|                                                                      | Loss of nonconventional fuel credit |                         |        |      |      |   |        |     |  |   |       | 581  |  
|                                                                      | Other, net                          |                         |        | (173  | )    |   |        | 261  |  |   |       | 543  |  
|                                                                      |                                     |                         |        |       |      |   |        |      | 
|Total provision from continuing operations                            |                                     | $                       | 69,146 |       |      | $ | 10,684 |      |  | $ | 7,968 |     
|                                                                      |                                     |                         |        |       |      |   |        |      | 

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                     |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |        |   |   |         |         |        |   |         |         |  
|------------------------------------ | ---------------------------------- | ------------------------ | --------------------- | - | ----------------- | ------ | - | ----- | ------- | ------- | ------ | - | ------- | ----------- | ------ | - | ----- | ------ | - | - | ------- | ------- | ------ | - | ------- | ------- | -
|                                     |                                    | December 31, 2005        |                       |   | December 31, 2004 |       
|                                     |                                    |                          |                       |   |                   |       
|                                     |                                    | Assets                   |                       |   | Liabilities       |        |   | Total |         |         | Assets |   |         | Liabilities |        |   | Total |       
|                                     |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |       
|                                     |                                    | (In thousands)           |                      
|Deferred Tax Assets and Liabilities: |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |        |   |   |         |         |        |  
|                                     | Current Assets and Liabilities:    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |        |   |   |         |         |        |   |        
|                                     |                                    | Accounts receivable      |                       | $ | 175               |        |   | $     |        |         |        | $ | 175     |             |        | $ | 67    |        |   | $ |        |         |        | $ | 67      |        
|                                     |                                    | Insurance accruals       |                       |   | 1,534             |        |   |       |        |         |        |   | 1,534   |             |        |   | 801   |        |   |   |        |         |        |   | 801     |        
|                                     |                                    | Vacation accruals        |                       |   | 1,635             |        |   |       |        |         |        |   | 1,635   |             |        |   | 1,429 |        |   |   |        |         |        |   | 1,429   |        
|                                     |                                    | Other reserves           |                       |   | 456               |        |   |       |        |         |        |   | 456     |             |        |   | 559   |        |   |   |        |         |        |   | 559     |        
|                                     |                                    | Other accruals           |                       |   | 39                |        |   |       | (3,445  | )       |        |   | (3,406  | )           |        |   |      |        |   |   | (3,174  | )       |        |   | (3,174  | )      
|                                     |                                    |                          | Inventory adjustments |   |                   | 1,002  |   |       |         |        |        |   |         | 1,002       |        |   |       | 2,152  |   |   |         |        |        |   |         | 2,152   |  
|                                     |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |       
|                                     |                                    |                          | Total current         |   |                   | 4,841  |   |       |         | (3,445  | )      |   |         | 1,396       |        |   |       | 5,008  |   |   |         | (3,174  | )      |   |         | 1,834   |  
|                                     |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |       
|                                     | Noncurrent Assets and Liabilities: |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |        |   |   |         |         |        |   |        
|                                     |                                    | Other accruals           |                       |   | 1,090             |        |   |       | (135    | )       |        |   | 955     |             |        |   | 831   |        |   |   | (192    | )       |        |   | 639     |        
|                                     |                                    | Accrued retirement       |                       |   | 4,453             |        |   |       |        |         |        |   | 4,453   |             |        |   | 4,310 |        |   |   |        |         |        |   | 4,310   |        
|                                     |                                    | Deductible repairs       |                       |   |                  |        |   |       | (1,868  | )       |        |   | (1,868  | )           |        |   |      |        |   |   | (3,150  | )       |        |   | (3,150  | )      
|                                     |                                    | Accelerated depreciation |                       |   |                  |        |   |       | (86,549 | )       |        |   | (86,549 | )           |        |   |      |        |   |   | (64,701 | )       |        |   | (64,701 | )      
|Net operating loss carryforward      |                                    |                          | 162                   |   |                   |        |  |       |         |         | 162    |   |         |             | 5,821  |   |       |        |  |   |         |         | 5,821  |  
|Tax credit carryforwards             |                                    |                          | 6,013                 |   |                   |        |  |       |         |         | 6,013  |   |         |             | 16,042 |   |       |        |  |   |         |         | 16,042 |  
|                                     |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |       
|                                     |                                    |                          | Total noncurrent      |   |                   | 11,718 |   |       |         | (88,552 | )      |   |         | (76,834     | )      |   |       | 27,004 |   |   |         | (68,043 | )      |   |         | (41,039 | )
|                                     |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |       
|                                     |                                    |                          | Total                 |   | $                 | 16,559 |   |       | $       | (91,997 | )      |   | $       | (75,438     | )      |   | $     | 32,012 |   |   | $       | (71,217 | )      |   | $       | (39,205 | )
|                                     |                                    |                          |                       |   |                   |        |   |       |         |         |        |   |         |             |        |   |       |       









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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|          |                    
|--------- | -------------------
|Note 15  | Earnings Per Share:



|                                                    |  |                         |         |   |      |   |        |      |  |   |        |  
|--------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                    |  | Year Ended December 31, |        
|                                                    |  |                         |        
|Numerator                                           |  | 2005                    |         |   | 2004 |   |        | 2003 | 
|                                                    |  |                         |         |   |      |   |        |      | 
|                                                    |  | (In thousands)          |        
|Earnings from continuing operations                 |  | $                       | 103,931 |   |      | $ | 16,338 |      |  | $ | 12,364 |  
|Earnings (loss) from discontinued operations        |  |                         | 15      |   |      |   | (117   | )    |  |   | (441   | )
|Cumulative effect of change in accounting principle |  |                         | (68     | ) |      |   |       |      |  |   | (704   | )
|                                                    |  |                         |         |   |      |   |        |      | 
|Net earnings                                        |  | $                       | 103,878 |   |      | $ | 16,221 |      |  | $ | 11,219 |  
|                                                    |  |                         |         |   |      |   |        |      | 

|                                              |  |                         |            |  |      |  |            |      |  |  |           | 
|--------------------------------------------- |  | ----------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | --------- | 
|                                              |  | Year Ended December 31, |           
|                                              |  |                         |           
|Denominator                                   |  | 2005                    |            |  | 2004 |  |            | 2003 | 
|                                              |  |                         |            |  |      |  |            |      | 
|Basic  weighted average shares outstanding   |  |                         | 13,485,702 |  |      |  | 11,104,938 |      |  |  | 8,731,672 | 
|Effective of dilutive stock options           |  |                         | 143,271    |  |      |  | 253,360    |      |  |  | 98,692    | 
|Effective of dilutive restricted stock grants |  |                         | 159        |  |      |  |           |      |  |  |          | 
|                                              |  |                         |            |  |      |  |            |      | 
|Diluted  weighted average shares outstanding |  |                         | 13,629,132 |  |      |  | 11,358,298 |      |  |  | 8,830,364 | 
|                                              |  |                         |            |  |      |  |            |      | 

|                                                    |  |                         |       |   |      |   |       |      |  |   |       |  
|--------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                    |  | Year Ended December 31, |      
|                                                    |  |                         |      
|Basic Earnings Per Share                            |  | 2005                    |       |   | 2004 |   |       | 2003 | 
|                                                    |  |                         |       |   |      |   |       |      | 
|Earnings from continuing operations                 |  | $                       | 7.71  |   |      | $ | 1.47  |      |  | $ | 1.41  |  
|Earnings (loss) from discontinued operations        |  |                         |      |   |      |   | (0.01 | )    |  |   | (0.05 | )
|Cumulative effect of change in accounting principle |  |                         | (0.01 | ) |      |   |      |      |  |   | (0.08 | )
|                                                    |  |                         |       |   |      |   |       |      | 
|Net earnings                                        |  | $                       | 7.70  |   |      | $ | 1.46  |      |  | $ | 1.28  |  
|                                                    |  |                         |       |   |      |   |       |      | 

|                                                    |  |                         |       |   |      |   |       |      |  |   |       |  
|--------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                    |  | Year Ended December 31, |      
|                                                    |  |                         |      
|Diluted Earnings Per Share                          |  | 2005                    |       |   | 2004 |   |       | 2003 | 
|                                                    |  |                         |       |   |      |   |       |      | 
|Earnings from continuing operations                 |  | $                       | 7.63  |   |      | $ | 1.43  |      |  | $ | 1.40  |  
|Earnings (loss) from discontinued operations        |  |                         |      |   |      |   | (0.01 | )    |  |   | (0.05 | )
|Cumulative effect of change in accounting principle |  |                         | (0.01 | ) |      |   |      |      |  |   | (0.08 | )
|                                                    |  |                         |       |   |      |   |       |      | 
|Net earnings                                        |  | $                       | 7.62  |   |      | $ | 1.42  |      |  | $ | 1.27  |  
|                                                    |  |                         |       |   |      |   |       |      | 







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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Note 16  Business Segments:






| |               
| | --------------
| | Refining Group





| |             
| | ------------
| | Retail Group





| |                
| | ---------------
| | Wholesale Group



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##### Table of Contents



GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




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| | -----
| | Other









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##### Table of Contents



GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |        |           | 
|-------------------------------------------------------- | ----------------------------------- | ---------------------------------------------- | --------------------------------------------------------- | --------------- | --------- | --------- | ------- | ------- | ----- | ------- | ------- | ------ | ----- | ------- | ------- | ----------- | ----- | ------- | ------- | ------------ | --- | ------- | -------- | -------- | - | -------- | --------- | ------- | ------ | --------- | 
|                                                         |                                     | As of and For the Year Ended December 31, 2005 |                                                          
|                                                         |                                     |                                                |                                                          
|                                                         |                                     |                                                |                                                           | Wholesale Group |           |           |        
|                                                         |                                     |                                                |                                                           |                 |           |           |        
|                                                         |                                     | Refining                                       |                                                           |                 | Retail    |           |         | Phoenix |       |         | Dial    |        |       |         |         | Reconciling |       |         |        
|                                                         |                                     | Group                                          |                                                           |                 | Group     |           |         | Fuel    |       |         | Oil     |        |       | Other   |         |             | Items |         |         | Consolidated |    
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|                                                         |                                     | (In thousands)                                 |                                                          
|Customer net revenues:                                   |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |        
|                                                         | Finished products:                  |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |       
|                                                         |                                     | Four Corners operations                        |                                                           | $               | 559,765   |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |        |          
|                                                         |                                     | Yorktown operations                            |                                                           |                 | 1,569,057 |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |        |          
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|                                                         |                                     |                                                | Total                                                     |                 |           | 2,128,822 |         |         | $     | 318,495 |         |        | $     | 795,339 |         |             | $     | 112,656 |         |              | $   |        |          |          | $ |         |           |         | $      | 3,355,312 | 
|                                                         | Merchandise and lubricants          |                                                |                                                           |                |           |           |         | 140,422 |       |         |         | 36,501 |       |         |         | 16,850      |       |         |         |             |     |         |          |         |   |          |           | 193,773 |       
|                                                         | Other                               |                                                |                                                           | 12,578          |           |           |         | 16,824  |       |         |         | 1,075  |       |         |         | 1,229       |       |         |         | 455          |     |         |          |         |   |          |           | 32,161  |       
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|                                                         |                                     |                                                | Total                                                     |                 |           | 2,141,400 |         |         |       | 475,741 |         |        |       | 832,915 |         |             |       | 130,735 |         |              |     | 455     |          |          |   |         |           |         |        | 3,581,246 | 
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Intersegment net revenues:                               |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |        
|                                                         | Finished products                   |                                                |                                                           | 292,706         |           |           |         |        |       |         |         | 75,541 |       |         |         |            |       |         |         |             |     |         |          | (368,247 | ) |          |           |        |       
|                                                         | Merchandise and lubricants          |                                                |                                                           |                |           |           |         |        |       |         |         |       |       |         |         | 19          |       |         |         |             |     |         |          | (19      | ) |          |           |        |       
|                                                         | Other                               |                                                |                                                           | 19,401          |           |           |         |        |       |         |         | 342    |       |         |         | 236         |       |         |         |             |     |         |          | (19,979  | ) |          |           |        |       
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|                                                         |                                     |                                                | Total                                                     |                 |           | 312,107   |         |         |       |        |         |        |       | 75,883  |         |             |       | 255     |         |              |     |        |          |          |   | (388,245 | )         |         |        |          | 
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Net revenues of continuing operations                    |                                     | $                                              | 2,453,507                                                 |                 |           | $         | 475,741 |         |       | $       | 908,798 |        |       | $       | 130,990 |             |       | $       | 455     |              |     | $       | (388,245 | )        |   | $        | 3,581,246 |        
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Operating income (loss):                                 |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |        
|                                                         | Four Corners operations             |                                                | $                                                         | 81,517          |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |       
|                                                         | Yorktown operations                 |                                                |                                                           | 113,783         |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |       
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|                                                         |                                     |                                                | Total operating income (loss) before corporate allocation |                 |           | 195,300   |         |         | $     | 11,408  |         |        | $     | 17,265  |         |             | $     | 4,090   |         |              | $   | (31,098 | )        |          | $ | 2,701    |           |         | $      | 199,666   | 
|Corporate allocation                                     |                                     |                                                | (14,941                                                   | )               |           |           | (9,807  | )       |       |         | (3,562  | )      |       |         | (595    | )           |       |         | 28,905  |              |     |         |         |          |   |          |          |        
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Total operating income (loss) after corporate allocation |                                     |                                                | 180,359                                                   |                 |           |           | 1,601   |         |       |         | 13,703  |        |       |         | 3,495   |             |       |         | (2,193  | )            |     |         | 2,701    |          |   |          | 199,666   |        
|                                                         | Discontinued operations loss/(gain) |                                                |                                                           |                |           |           |         | (2      | )     |         |         |       |       |         |         |            |       |         |         |             |     |         |          | (22      | ) |          |           | (24     | )     
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Operating income (loss) from continuing operations       |                                     | $                                              | 180,359                                                   |                 |           | $         | 1,599   |         |       | $       | 13,703  |        |       | $       | 3,495   |             |       | $       | (2,193  | )            |     | $       | 2,679    |          |   |          | 199,642   |        
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Interest expense                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          | (24,485   | )      
|Costs associated with early debt extinguishment          |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          | (2,082    | )      
|Amortization and write-offs of financing costs           |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          | (2,797    | )      
|Investment and other income                              |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          | 2,799     |        
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Earnings from continuing operations before income taxes  |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   | $        | 173,077   |        
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Depreciation and amortization:                           |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |        
|                                                         | Four Corners operations             |                                                | $                                                         | 16,534          |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |       
|                                                         | Yorktown operations                 |                                                |                                                           | 10,513          |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |     |         |          |          |   |          |           |         |       
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|                                                         |                                     | Total from continuing operations               |                                                           | $               | 27,047    |           |         | $       | 9,973 |         |         | $      | 1,666 |         |         | $           | 797   |         |         | $            | 797 |         |          | $        |  |          |           | $       | 40,280 |          
|                                                         |                                     |                                                |                                                           |                 |           |           |         |         |       |         |         |        |       |         |         |             |       |         |         |              |    
|Total assets                                             |                                     | $                                              | 553,051                                                   |                 |           | $         | 103,297 |         |       | $       | 96,545  |        |       | $       | 54,000  |             |       | $       | 177,579 |              |     | $       |         |          |   | $        | 984,472   |        
|Capital expenditures                                     |                                     | $                                              | 62,293                                                    |                 |           | $         | 4,719   |         |       | $       | 1,870   |        |       | $       | 221     |             |       | $       | 1,556   |              |     | $       |         |          |   | $        | 70,659    |        

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##### Table of Contents



GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |        |           | 
|-------------------------------------------------------- | ---------------------------- | -------------------------------------------------- | --------------------------------------------------------- | ------- | --------- | --------- | ------- | ------- | ---- | ------- | ------- | ------ | ----------- | ------- | ------ | --- | ------------ | ------- | -------- | -------- | ----- | -------- | --------- | ------- | ------ | --------- | 
|                                                         |                              | As of and For the Year Ended December 31, 2004     |                                                          
|                                                         |                              |                                                    |                                                          
|                                                         |                              | Refining                                           |                                                           |         | Retail    |           |         | Phoenix |      |         |         |        | Reconciling |         |        |    
|                                                         |                              | Group                                              |                                                           |         | Group     |           |         | Fuel    |      |         | Other   |        |             | Items   |        |     | Consolidated |        
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         |                              | (In thousands)                                     |                                                          
|Customer net revenues:                                   |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |        
|                                                         | Finished products:           |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |       
|                                                         |                              | Four Corners operations                            |                                                           | $       | 423,397   |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |        |          
|                                                         |                              | Yorktown operations                                |                                                           |         | 1,074,536 |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |        |          
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         |                              |                                                    | Total                                                     |         | $         | 1,497,933 |         |         | $    | 233,056 |         |        | $           | 584,903 |        |     | $            |        |          |          | $     |         |           |         | $      | 2,315,892 | 
|                                                         | Merchandise and lubricants   |                                                    |                                                           |        |           |           |         | 134,012 |      |         |         | 32,510 |             |         |        |    |              |         |          |         |       |          |           | 166,522 |       
|                                                         | Other                        |                                                    |                                                           | 11,843  |           |           |         | 15,119  |      |         |         | 1,684  |             |         |        | 529 |              |         |          |         |       |          |           | 29,175  |       
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         |                              |                                                    | Total                                                     |         |           | 1,509,776 |         |         |      | 382,187 |         |        |             | 619,097 |        |     |              | 529     |          |          |       |         |           |         |        | 2,511,589 | 
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|Intersegment net revenues:                               |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |        
|                                                         | Finished products            |                                                    |                                                           | 205,842 |           |           |         |        |      |         |         | 61,478 |             |         |        |    |              |         |          | (267,320 | )     |          |           |        |       
|                                                         | Other                        |                                                    |                                                           | 15,652  |           |           |         |        |      |         |         |       |             |         |        |    |              |         |          | (15,652  | )     |          |           |        |       
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         |                              |                                                    | Total                                                     |         |           | 221,494   |         |         |      |        |         |        |             | 61,478  |        |     |              |        |          |          |       | (282,972 | )         |         |        |          | 
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|Net revenues of continuing operations                    |                              | $                                                  | 1,731,270                                                 |         |           | $         | 382,187 |         |      | $       | 680,575 |        |             | $       | 529    |     |              | $       | (282,972 | )        |       | $        | 2,511,589 |        
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|Operating income (loss):                                 |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |        
|                                                         |                              | Four Corners operations                            |                                                           | $       | 30,914    |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |        |          
|                                                         |                              | Yorktown operations                                |                                                           |         | 52,752    |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |        |          
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         |                              |                                                    | Total operating income (loss) before corporate allocation |         | $         | 83,666    |         |         | $    | 6,688   |         |        | $           | 10,486  |        |     | $            | (26,325 | )        |          | $     | 3,775    |           |         | $      | 78,290    | 
|Corporate allocation                                     |                              |                                                    | (13,069                                                   | )       |           |           | (7,804  | )       |      |         | (2,388  | )      |             |         | 23,261 |     |              |         |         |          |       |          |          |        
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|Total operating income (loss) after corporate allocation |                              |                                                    | 70,597                                                    |         |           |           | (1,116  | )       |      |         | 8,098   |        |             |         | (3,064 | )   |              |         | 3,775    |          |       |          | 78,290    |        
|Discontinued operations loss/(gain)                      |                              |                                                    |                                                          |         |           |           | 218     |         |      |         |        |        |             |         |       |     |              |         | (28      | )        |       |          | 190       |        
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         |                              | Operating income (loss) from continuing operations |                                                           | $       | 70,597    |           |         | $       | (898 | )       |         | $      | 8,098       |         |        | $   | (3,064       | )       |          | $        | 3,747 |          |           | $       | 78,480 |          
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|Interest expense                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          | (32,907   | )      
|Costs associated with early debt extinguishment          |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          | (10,564   | )      
|Amortization and write-offs of financing costs           |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          | (8,341    | )      
|Interest and investment income                           |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          | 354       |        
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|Earnings from continuing operations before income taxes  |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       | $        | 27,022    |        
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|Depreciation and amortization:                           |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |        
|                                                         | Four Corners operations      |                                                    | $                                                         | 16,191  |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |       
|                                                         | Yorktown operations          |                                                    |                                                           | 9,328   |           |           |         |         |      |         |         |        |             |         |        |     |              |         |          |          |       |          |           |         |       
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         |                              |                                                    | Total                                                     |         | $         | 25,519    |         |         | $    | 9,186   |         |        | $           | 1,614   |        |     | $            | 879     |          |          | $     |         |           |         | $      | 37,198    | 
|                                                         | Less discontinued operations |                                                    |                                                           |        |           |           |         | (93     | )    |         |         |       |             |         |        |    |              |         |          |         |       |          |           | (93     | )     
|                                                         |                              |                                                    |                                                           |         |           |           |         |         |      |         |         |        |             |         |        |     |              |        
|                                                         | Continuing operations        |                                                    | $                                                         | 25,519  |           |           | $       | 9,093   |      |         | $       | 1,614  |             |         | $      | 879 |              |         | $        |         |       |          | $         | 37,105  |       
|Total assets                                             |                              | $                                                  | 474,984                                                   |         |           | $         | 103,786 |         |      | $       | 73,467  |        |             | $       | 50,169 |     |              | $       |         |          |       | $        | 702,406   |        
|Capital expenditures                                     |                              | $                                                  | 50,609                                                    |         |           | $         | 5,835   |         |      | $       | 1,707   |        |             | $       | 520    |     |              | $       |         |          |       | $        | 58,671    |        
|Yorktown refinery acquisition contingent payment         |                              | $                                                  | 16,146                                                    |         |           | $         |        |         |      | $       |        |        |             | $       |       |     |              | $       |         |          |       | $        | 16,146    |        

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##### Table of Contents



GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |        |           |        | 
|------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------------- | --------- | ------- | ------- | --------- | ------- | ------- | ------ | ------- | ------- | ------ | ----------- | ------- | ------ | ------ | ------------ | --- | -------- | -------- | ------ | -------- | --------- | ------- | ------ | --------- | ------ | 
|                                                        |                                                          | As of and For the Year Ended December 31, 2003            |          
|                                                        |                                                          |                                                           |          
|                                                        |                                                          | Refining                                                  |           |         | Retail  |           |         | Phoenix |        |         |         |        | Reconciling |         |        |       
|                                                        |                                                          | Group                                                     |           |         | Group   |           |         | Fuel    |        |         | Other   |        |             | Items   |        |        | Consolidated |    
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        |                                                          | (In thousands)                                            |          
|Customer net revenues:                                  |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |        
|                                                        | Finished products:                                       |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |       
|                                                        |                                                          | Four Corners operations                                   |           | $       | 287,288 |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |        |          
|                                                        |                                                          | Yorktown operations                                       |           |         | 768,618 |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |        |          
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        |                                                          |                                                           | Total     |         | $       | 1,055,906 |         |         | $      | 180,155 |         |        | $           | 397,163 |        |        | $            |    |          |          | $      |         |           |         | $      | 1,633,224 |       
|                                                        | Merchandise and lubricants                               |                                                           |           |        |         |           |         | 127,009 |        |         |         | 26,262 |             |         |        |       |              |     |          |         |        |          |           | 153,271 |       
|                                                        | Other                                                    |                                                           |           | 4,294   |         |           |         | 15,717  |        |         |         | 1,775  |             |         |        | 537    |              |     |          |         |        |          |           | 22,323  |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        |                                                          |                                                           | Total     |         |         | 1,060,200 |         |         |        | 322,881 |         |        |             | 425,200 |        |        |              | 537 |          |          |        |         |           |         |        | 1,808,818 |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|Intersegment net revenues:                              |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |        
|                                                        | Finished products                                        |                                                           |           | 175,898 |         |           |         |        |        |         |         | 47,304 |             |         |        |       |              |     |          | (223,202 | )      |          |           |        |       
|                                                        | Other                                                    |                                                           |           | 15,862  |         |           |         |        |        |         |         |       |             |         |        |       |              |     |          | (15,862  | )      |          |           |        |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        |                                                          |                                                           | Total     |         |         | 191,760   |         |         |        |        |         |        |             | 47,304  |        |        |              |    |          |          |        | (239,064 | )         |         |        |          |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|Net revenues of continuing operations                   |                                                          | $                                                         | 1,251,960 |         |         | $         | 322,881 |         |        | $       | 472,504 |        |             | $       | 537    |        |              | $   | (239,064 | )        |        | $        | 1,808,818 |        
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|Operating income (loss):                                |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |        
|                                                        | Four Corners operations                                  |                                                           | $         | 41,932  |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |       
|                                                        | Yorktown operations                                      |                                                           |           | 22,039  |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        |                                                          | Total operating income (loss) before corporate allocation |           | $       | 63,971  |           |         | $       | 13,476 |         |         | $      | 8,483       |         |        | $      | (20,995      | )   |          | $        | (1,791 | )        |           | $       | 63,144 |          
|                                                        | Corporate allocation                                     |                                                           |           | (10,423 | )       |           |         | (6,224  | )      |         |         | (1,904 | )           |         |        | 18,551 |              |     |          |         |        |          |           |        |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        | Total operating income (loss) after corporate allocation |                                                           |           | 53,548  |         |           |         | 7,252   |        |         |         | 6,579  |             |         |        | (2,444 | )            |     |          | (1,791   | )      |          |           | 63,144  |       
|Discontinued operations loss/(gain)                     |                                                          |                                                           |          |         |         |           | 761     |         |        |         |        |        |             |         |       |        |              |     | (46      | )        |        |          | 715       |        
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        | Operating income (loss) from continuing operations       |                                                           | $         | 53,548  |         |           | $       | 8,013   |        |         | $       | 6,579  |             |         | $      | (2,444 | )            |     | $        | (1,837   | )      |          | $         | 63,859  |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|Interest expense                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          | (38,993   | )      
|Amortization and write-offs of financing costs          |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          | (4,696    | )      
|Interest and investment income                          |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          | 162       |        
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|Earnings from continuing operations before income taxes |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        | $        | 20,332    |        
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|Depreciation and amortization:                          |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |        
|                                                        | Four Corners operations                                  |                                                           | $         | 15,846  |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |       
|                                                        | Yorktown operations                                      |                                                           |           | 7,951   |         |           |         |         |        |         |         |        |             |         |        |        |              |     |          |          |        |          |           |         |       
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        |                                                          |                                                           |           | Total   |         | $         | 23,797  |         |        | $       | 10,656  |        |             | $       | 1,763  |        |              | $   | 1,301    |          |        | $        |          |         |        | $         | 37,517 | 
|                                                        | Less discontinued operations                             |                                                           |           |        |         |           |         | (657    | )      |         |         |       |             |         |        |       |              |     |          |         |        |          |           | (657    | )     
|                                                        |                                                          |                                                           |           |         |         |           |         |         |        |         |         |        |             |         |        |        |              |    
|                                                        | Continuing operations                                    |                                                           | $         | 23,797  |         |           | $       | 9,999   |        |         | $       | 1,763  |             |         | $      | 1,301  |              |     | $        |         |        |          | $         | 36,860  |       
|Total assets                                            |                                                          | $                                                         | 459,253   |         |         | $         | 116,083 |         |        | $       | 72,188  |        |             | $       | 52,130 |        |              | $   |         |          |        | $        | 699,654   |        
|Capital expenditures                                    |                                                          | $                                                         | 14,428    |         |         | $         | 2,322   |         |        | $       | 295     |        |             | $       | 834    |        |              | $   |         |          |        | $        | 17,879    |        
|Yorktown refinery acquisition contingent payment        |                                                          | $                                                         | 8,854     |         |         | $         |        |         |        | $       |        |        |             | $       |       |        |              | $   |         |          |        | $        | 8,854     |        






|    |                                   
|--- | ----------------------------------
|(1) | Since acquisition on May 14, 2002.

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 17  Commitments and Contingencies:










| |                                      
| | -------------------------------------
| | Environmental and Litigation Accruals





| |   |                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Expenditures that relate to an existing environmental condition
    caused by past operations, and which do not result in an asset
    with an economic life greater than one year, are expensed.                                                              
|
| |  | Expenditures that relate to an existing environmental condition
    caused by past operations, and which result in an asset with an
    economic life greater than one year, are capitalized in the
    period incurred and depreciated over their useful life.







| |   |                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our compliance with clean air, clean water, and similar
    regulatory programs, including programs relating to the
    composition of motor fuels, that do not require us to undertake
    soil removal or similar clean up activities;
|
| |  | our compliance with settlements, consent decrees, and other
    agreements with governmental authorities that do not require us
    to undertake soil removal or similar cleanup activities;                                            
|
| |  | groundwater monitoring; or                                                                                                                                                                                                              
|
| |  | capital projects.                                                                                                                                                                                                                       



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






Summary of Accrued Environmental Contingencies


|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          |  |   |        |        |   |   |       |       | 
|----------------------------------- | ------ | -------------- | ----- | ----- | -------- | - | --- | -------- | ----- | - | -------- | ------ | - | -------- | ----- | ----- | -------- | - | --- | -------- |  | - | ------ | ------ | - | - | ----- | ----- | 
|                                    |        | As of          |       |       |          |   |     |          | As of |   |          |        |   |          |       | As of |         
|                                    |        | 12/31/03       |       |       | Increase |   |     | Payments |       |   | 12/31/04 |        |   | Increase |       |       | Payments |   |     | 12/31/05 | 
|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          | 
|                                    |        | (In thousands) |      
|Yorktown Refinery                   |        | $              | 5,916 |       |          | $ |    |          |       | $ | (1,385   | )      |   | $        | 4,531 |       |          | $ | 57  |          |  | $ | (1,048 | )      |   | $ | 3,540 |      
|Bloomfield Refinery                 |        |                | 267   |       |          |   |    |          |       |   | (16      | )      |   |          | 251   |       |          |   |    |          |  |   | (22    | )      |   |   | 229   |      
|Farmington Refinery                 |        |                | 570   |       |          |   |    |          |       |   |         |        |   |          | 570   |       |          |   |    |          |  |   |       |        |   |   | 570   |      
|Bloomfield  River Terrace          |        |                |      |       |          |   |    |          |       |   |         |        |   |          |      |       |          |   | 259 |          |  |   | (213   | )      |   |   | 46    |      
|West Outfall  Bloomfield           |        |                |      |       |          |   | 150 |          |       |   | (106     | )      |   |          | 44    |       |          |   |    |          |  |   | (44    | )      |   |   |      |      
|Bloomfield Tank Farm (Old Terminal) |        |                | 67    |       |          |   |    |          |       |   | (14      | )      |   |          | 53    |       |          |   |    |          |  |   | (11    | )      |   |   | 42    |      
|Other Projects                      |        |                | 772   |       |          |   | 3   |          |       |   | (68      | )      |   |          | 707   |       |          |   | 306 |          |  |   | (499   | )      |   |   | 514   |      
|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          | 
|                                    | Totals |                | $     | 7,592 |          |   | $   | 153      |       |   | $        | (1,589 | ) |          | $     | 6,156 |          |   | $   | 622      |  |   | $      | (1,837 | ) |   | $     | 4,941 | 
|                                    |        |                |       |       |          |   |     |          |       |   |          |        |   |          |       |       |          |   |     |          | 





| |   |                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $3,540,000 and $229,000, respectively, for environmental
    obligations assumed in connection with our acquisitions of the
    Yorktown refinery and the Bloomfield refinery;
|
| |  | $570,000 for the remediation of the hydrocarbon plume that
    appears to extend no more than 1,800 feet south of our
    inactive Farmington refinery;                       
|
| |  | $46,000 for remediation in the river terrace area of the
    Bloomfield refinery; and                                                                                         
|
| |  | $42,000 for remediation of hydrocarbon contamination on and
    adjacent to the 5.5 acres that we own in Bloomfield, New
    Mexico.                                          





| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | the closure of certain solid waste management units at the
    Ciniza refinery;                
|
| |  | closure of the Ciniza refinery land treatment facility including
    post-closure expenses; and
|
| |  | amounts for smaller remediation projects.                                                      



| |                                   
| | ----------------------------------
| | Yorktown Environmental Liabilities



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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                    
| | -------------------
| | Yorktown 1991 Order

on-site






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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


clean-up clean-up




| |                                              
| | ---------------------------------------------
| | Bloomfield Refinery Environmental Obligations





| |                            
| | ---------------------------
| | Farmington Refinery Matters





| |                                                         
| | --------------------------------------------------------
| | Bloomfield Refinery  West Outfall and River
    Terrace





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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                    
| | -----------------------------------
| | Bloomfield Tank Farm (Old Terminal)





| |                        
| | -----------------------
| | Yorktown Consent Decree





| |                                               
| | ----------------------------------------------
| | Bloomfield Refinery  OCD Compliance
    Order



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                    
| | ---------------------------------------------------
| | Four Corners Refineries  Settlement
    Agreements













| |   |                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | implement controls to reduce emissions of nitrogen oxide, sulfur
    dioxide, and particulate matter from the largest emitting
    process units;
|
| |  | upgrade leak detection and repair practices;                                                                                                     
|
| |  | minimize the number and severity of flaring events; and                                                                                          
|
| |  | adopt strategies to ensure compliance with benzene waste
    requirements.                                                                       





| |                                               
| | ----------------------------------------------
| | Bloomfield Refinery  EPA Compliance
    Order

follow-up


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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                
| | ---------------
| | MTBE Litigation





| |               
| | --------------
| | Jet Fuel Claim





| |                           
| | --------------------------
| | Yorktown Refinery Incident



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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




45-day


Note 18  Related Party Matter






Note 19  Acquisitions:






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GIANT INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Note 20  Quarterly Financial Information
(Unaudited)


|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |           |  |  |   |         |  
|---------------------------------------------------- | --------------------------------------------------------------- | ------------------------------------- | - | ------- | ------ |  | - | ------- | - |  | ------ | --------- |  |  | - | ------- | -
|                                                     |                                                                 | Year Ended December 31, 2005          |  
|                                                     |                                                                 |                                       |  
|                                                     |                                                                 | Quarter                               |  
|                                                     |                                                                 |                                       |  
|                                                     |                                                                 | First                                 |   |         | Second |  |   | Third   |   |  | Fourth |          
|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |          
|                                                     |                                                                 | (In thousands, except per share data) |  
|Continuing Operations:                               |                                                                 |                                       |   |         |        |  |   |         |   |  |        |           |  |  |   |        
|                                                     | Net revenues                                                    |                                       | $ | 711,726 |        |  | $ | 863,357 |   |  | $      | 1,085,225 |  |  | $ | 920,938 |  
|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |          
|                                                     | Cost of products sold (excluding depreciation and amortization) |                                       |   | 625,790 |        |  |   | 748,883 |   |  |        | 920,408   |  |  |   | 798,110 |  
|                                                     | Operating expenses                                              |                                       |   | 46,244  |        |  |   | 48,744  |   |  |        | 53,901    |  |  |   | 56,750  |  
|                                                     | Depreciation and amortization                                   |                                       |   | 10,970  |        |  |   | 9,492   |   |  |        | 9,973     |  |  |   | 9,845   |  
|                                                     | Selling, general and administrative expenses                    |                                       |   | 7,799   |        |  |   | 11,843  |   |  |        | 15,431    |  |  |   | 10,100  |  
|                                                     | (Gain) loss on the disposal/write-down of assets                |                                       |   | (13     | )      |  |   | (207    | ) |  |        | 1,055     |  |  |   | 174     |  
|                                                     | Gain from insurance settlement of fire incident                 |                                       |   | (3,492  | )      |  |   | (196    | ) |  |        |          |  |  |   |        |  
|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |          
|                                                     | Operating income                                                |                                       | $ | 24,428  |        |  | $ | 44,798  |   |  | $      | 84,457    |  |  | $ | 45,959  |  
|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |          
|                                                     | Net earnings                                                    |                                       | $ | 10,058  |        |  | $ | 20,538  |   |  | $      | 46,640    |  |  | $ | 26,695  |  
|                                                     | Net earnings per common share  basic                           |                                       | $ | 0.81    |        |  | $ | 1.53    |   |  | $      | 3.43      |  |  | $ | 1.84    |  
|                                                     | Net earnings per common share  assuming dilution               |                                       | $ | 0.80    |        |  | $ | 1.51    |   |  | $      | 3.38      |  |  | $ | 1.83    |  
|Discontinued Operations:                             |                                                                 |                                       |   |         |        |  |   |         |   |  |        |           |  |  |   |        
|                                                     | Net revenues                                                    |                                       | $ |        |        |  | $ |        |   |  | $      |          |  |  | $ |        |  
|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |          
|                                                     | (Loss) income from operations                                   |                                       | $ | (11     | )      |  | $ | 13      |   |  | $      |          |  |  | $ |        |  
|                                                     | Gain (loss) on disposal                                         |                                       |   |        |        |  |   | 22      |   |  |        |          |  |  |   |        |  
|                                                     | Loss on asset write-downs                                       |                                       |   |        |        |  |   |        |   |  |        |          |  |  |   |        |  
|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |          
|                                                     | Operating earnings (loss)                                       |                                       | $ | (11     | )      |  | $ | 35      |   |  | $      |          |  |  | $ |        |  
|                                                     |                                                                 |                                       |   |         |        |  |   |         |   |  |        |          
|                                                     | Net (loss) earnings                                             |                                       | $ | (7      | )      |  | $ | 22      |   |  | $      |          |  |  | $ |        |  
|                                                     | Net earnings (loss) per common share  basic                    |                                       | $ |        |        |  | $ |        |   |  | $      |          |  |  | $ |        |  
|                                                     | Net earnings (loss) per common share  assuming
    dilution    |                                       | $ |        |        |  | $ |        |   |  | $      |          |  |  | $ |        |  
|Cumulative effect of change in accounting principle: |                                                                 |                                       |   |         |        |  |   |         |   |  |        |           |  |  |   |        
|                                                     | Net loss                                                        |                                       | $ |        |        |  | $ |        |   |  | $      |          |  |  | $ | (68     | )
|                                                     | Net loss per common share  basic                               |                                       | $ |        |        |  | $ |        |   |  | $      |          |  |  | $ | (0.01   | )
|                                                     | Net loss per common share  assuming dilution                   |                                       | $ |        |        |  | $ |        |   |  | $      |          |  |  | $ | (0.01   | )

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NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |         |   |  |   |         |  
|------------------------ | --------------------------------------------------------------- | ------------------------------------- | - | ------- | ------ |  | - | ------- | - |  | ------ | ------- | - |  | - | ------- | -
|                         |                                                                 | Year Ended December 31, 2004(1)       |  
|                         |                                                                 |                                       |  
|                         |                                                                 | Quarter                               |  
|                         |                                                                 |                                       |  
|                         |                                                                 | First                                 |   |         | Second |  |   | Third   |   |  | Fourth |        
|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |        
|                         |                                                                 | (In thousands, except per share data) |  
|Continuing Operations:   |                                                                 |                                       |   |         |        |  |   |         |   |  |        |         |   |  |   |        
|                         | Net revenues                                                    |                                       | $ | 540,807 |        |  | $ | 654,035 |   |  | $      | 642,439 |   |  | $ | 674,308 |  
|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |        
|                         | Cost of products sold (excluding depreciation and amortization) |                                       |   | 460,767 |        |  |   | 557,326 |   |  |        | 564,563 |   |  |   | 603,414 |  
|                         | Operating expenses                                              |                                       |   | 44,196  |        |  |   | 43,540  |   |  |        | 42,158  |   |  |   | 45,952  |  
|                         | Depreciation and amortization                                   |                                       |   | 9,098   |        |  |   | 9,220   |   |  |        | 9,024   |   |  |   | 9,763   |  
|                         | Selling, general and administrative expenses                    |                                       |   | 8,200   |        |  |   | 10,052  |   |  |        | 10,110  |   |  |   | 9,472   |  
|                         | (Gain) loss on the disposal/write-down of assets                |                                       |   | (4      | )      |  |   | 566     |   |  |        | (889    | ) |  |   | 488     |  
|                         | Gain from insurance settlement of fire incident                 |                                       |   |        |        |  |   |        |   |  |        | (958    | ) |  |   | (2,949  | )
|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |        
|                         | Operating income                                                |                                       | $ | 18,550  |        |  | $ | 33,331  |   |  | $      | 18,431  |   |  | $ | 8,168   |  
|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |        
|                         | Net earnings                                                    |                                       | $ | 4,601   |        |  | $ | 5,015   |   |  | $      | 5,975   |   |  | $ | 747     |  
|                         | Net earnings per common share  basic                           |                                       | $ | 0.52    |        |  | $ | 0.45    |   |  | $      | 0.49    |   |  | $ | 0.06    |  
|                         | Net earnings per common share  assuming dilution               |                                       | $ | 0.51    |        |  | $ | 0.44    |   |  | $      | 0.48    |   |  | $ | 0.06    |  
|Discontinued Operations: |                                                                 |                                       |   |         |        |  |   |         |   |  |        |         |   |  |   |        
|                         | Net revenues                                                    |                                       | $ | 789     |        |  | $ | 490     |   |  | $      | (10     | ) |  | $ |        |  
|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |        
|                         | Loss from operations                                            |                                       | $ | (118    | )      |  | $ | (61     | ) |  | $      | (17     | ) |  | $ | (22     | )
|                         | (Loss) gain on disposal                                         |                                       |   | (18     | )      |  |   | 389     |   |  |        | 161     |   |  |   | (7      | )
|                         | Loss on asset write-downs                                       |                                       |   |        |        |  |   | (372    | ) |  |        | (125    | ) |  |   |        |  
|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |        
|                         | Operating (loss) earnings                                       |                                       | $ | (136    | )      |  | $ | (44     | ) |  | $      | 19      |   |  | $ | (29     | )
|                         |                                                                 |                                       |   |         |        |  |   |         |   |  |        |        
|                         | Net (loss) earnings                                             |                                       | $ | (84     | )      |  | $ | (27     | ) |  | $      | 12      |   |  | $ | (18     | )
|                         | Net (loss) earnings per common share  basic                    |                                       | $ | (0.01   | )      |  | $ |        |   |  | $      |        |   |  | $ |        |  
|                         | Net (loss) earnings per common share  assuming
    dilution    |                                       | $ | (0.01   | )      |  | $ |        |   |  | $      |        |   |  | $ |        |  






|    |                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Subsequent to the previously filed Form 10Qs, certain
    reclassifications have been made to present continuing and
    discontinued operations in accordance with
    SFAS No. 144.

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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure





|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures



|    |                                                 
|--- | ------------------------------------------------
|(a) | Evaluation of Disclosure Controls and Procedures





|    |                                                    
|--- | ---------------------------------------------------
|(b) | Change in Internal Control Over Financial Reporting





|    |                                                                   
|--- | ------------------------------------------------------------------
|(c) | Management Report on Internal Control Over Financial
    Reporting





Internal Control-Integrated
Framework.






|    |                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------
|(d) | Independent auditors report on our assessment of our internal
    control over financial reporting.

Report Of Independent Registered Public Accounting Firm








Internal Control-Integrated Framework


103



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Internal
Control-Integrated Framework Internal Control-Integrated Framework


104



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105



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##### Table of Contents






PART III









|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant












|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management



|                                                           |  |                      |         |  |                      |                      |                         |                           |  |  |   | 
|---------------------------------------------------------- |  | -------------------- | ------- |  | -------------------- | -------------------- | ----------------------- | ------------------------- |  |  | - | 
|                                                           |  |                      |         |  |                      | Number of Securities |                        
|                                                           |  | Number of Securities |         |  |                      |                      | Remaining Available for |                          
|                                                           |  | to be Issued Upon    |         |  | Weighted-Average     |                      |                         | Future Issuance Under     | 
|                                                           |  | Exercise of          |         |  | Exercise Price of    |                      |                         | Equity Compensation Plans | 
|                                                           |  | Outstanding Options, |         |  | Outstanding Options, |                      |                         | (Excluding Securities     | 
|Plan Category                                              |  | Warrants and Rights  |         |  | Warrants and Rights  |                      |                         | Reflected in Column (a))  | 
|                                                           |  |                      |         |  |                      |                      |                         |                           | 
|                                                           |  | (a)                  |         |  | (b)                  |                      |                         | (c)                       | 
|Equity compensation plans approved by security holders     |  |                      | 100,500 |  |                      | $                    | 7.12                    |                           |  |  | * | 
|Equity compensation plans not approved by security holders |  |                      |        |  |                      |                      |                        |                           |  |  |  | 
|                                                           |  |                      |         |  |                      |                      |                         |                           | 
|Total                                                      |  |                      | 100,500 |  |                      | $                    | 7.12                    |                           |  |  | * | 
|                                                           |  |                      |         |  |                      |                      |                         |                           | 






|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The total number of shares available for grant is 2% of the
    total number of common shares outstanding as of the first day of
    each calendar year. Grants also are subject to a
    400,000 share annual limitation on the grant of options
    intended to qualify as incentive stock options under
    Section 422 of the Internal Revenue Code. Common shares
    available for grant in any particular calendar year that are
    not, in fact, granted in such year cannot be added to the common
    shares available for grant in any subsequent calendar year.





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|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services






PART IV







|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules and Reports on
    Form 8-K





| |                                                                                                            
| | -----------------------------------------------------------------------------------------------------------
| | (i) Report of Independent Registered Public Accounting Firm                                                
|
| | (ii) Consolidated Balance Sheets 
    December 31, 2005 and 2004                                          
|
| | (iii) Consolidated Statements of Operations 
    Years ended December 31, 2005, 2004 and 2003             
|
| | (iv) Consolidated Statements of Stockholders
    Equity  Years ended December 31, 2005, 2004 and
    2003
|
| | (v) Consolidated Statements of Cash Flows  Years
    ended December 31, 2005, 2004 and 2003               
|
| | (vi) Notes to Consolidated Financial Statements                                                            

Financial Statement Schedule.








Exhibits.




|            |    |             |  |                                                                                                                                                                                                                                                                                           
|----------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 10 | .13         |  | Giant Industries, Inc. and Affiliated Companies Deferred
    Compensation Plan. Incorporated by reference to
    Exhibit 10.2 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended September 30, 2005,
    File No. 1-10398.                                          
|            | 10 | .15         |  | Giant Industries, Inc. 1998 Stock Incentive Plan. Incorporated
    by reference to Appendix H to the Joint Proxy Statement/
    Prospectus included in the Companys Registration Statement
    on Form S-4 under the Securities Act of 1933 as filed
    May 4, 1998, File No. 333-51785.
|            | 10 | .16         |  | Amendment No. 1 to 1998 Stock Incentive Plan, dated
    September 13, 2000. Incorporated by reference to
    Exhibit 10.8 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2002,
    File No 1-10398.                                               
|            | 10 | .17         |  | Amendment No. 2 to 1998 Stock Incentive Plan, dated
    March 27, 2002. Incorporated by reference to
    Exhibit 10.9 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2002,
    File No 1-10398.                                                   

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|            |    |             |  |                                                                                                                                                                                                                                                                                
|----------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 10 | .18         |  | ESOP Substitute Excess Deferred Compensation Benefit Plan.
    Incorporated by reference to Exhibit 10.8 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 1992, File No. 1-10398.                                                    
|            | 10 | .19         |  | 2005 Management Discretionary Bonus Plan. Incorporated by
    reference to Exhibit 10.6 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2004, File No. 1-10398.                                                                     
|            | 10 | .20*        |  | 2006 Management Discretionary Bonus Plan.                                                                                                                                                                                                                                      
|            | 10 | .21         |  | Employment Agreement, dated as of December 12, 2003,
    between Fred L. Holliger and Giant Industries, Inc. Incorporated
    by reference to Exhibit 10.28 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003, File No. 1-10398. 
|            | 10 | .22         |  | Employment Agreement, dated as of December 12, 2003,
    between Morgan Gust and Giant Industries, Inc. Incorporated by
    reference to Exhibit 10.29 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003, File No. 1-10398.      
|            | 10 | .23         |  | Employment Agreement, dated as of December 12, 2003,
    between Mark B. Cox and Giant Industries, Inc. Incorporated by
    reference to Exhibit 10.30 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003, File No. 1-10398.      
|            | 10 | .24         |  | Employment Agreement, dated as of December 12, 2003,
    between Kim H. Bullerdick and Giant Industries, Inc.
    Incorporated by reference to Exhibit 10.31 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 2003, File No. 1-10398.






|  |                
|- | ---------------
|* | Filed herewith.

8-K. 8-K




| |                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) On October 3, 2005, we filed a
    Form 8-K, dated
    September 30, 2005, regarding the entry into an amendment
    to our 401(k) plan.                                                         
|
| | (ii) On November 4, 2005, we filed a
    Form 8-K, dated
    November 4, 2005, regarding the establishment of the Giant
    Industries, Inc. and Affiliated Companies Deferred Compensation
    Plan.
|
| | (iii) On November 8, 2005, we filed a
    Form 8-K, dated
    November 7, 2005, containing a press release detailing our
    earnings for the quarter ended September 30, 2005.                      
|
| | (iv) On December 21, 2005, we filed a
    Form 8-K, dated
    December 20, 2005, containing a press release providing an
    update on our Yorktown refinery.                                        
|
| | (v) On February 28, 2006, we filed a
    Form 8-K, dated
    February 28, 2006, containing a press release detailing our
    earnings for the quarter and year ended December 31, 2005.              

108



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SIGNATURES






| |                       
| | ----------------------
| | GIANT INDUSTRIES, INC.



| |     |                     
| | --- | --------------------
| | By: | /s/ FRED L. HOLLIGER

| |                            
| | ---------------------------
| |                            
| | Fred L. Holliger           
| | Chairman of the Board      
| | and Chief Executive Officer





|                                                 |  |                                                                                          |  |               |  | 
|------------------------------------------------ |  | ---------------------------------------------------------------------------------------- |  | ------------- |  | 
|                                                
|/s/ FRED L. HOLLIGERFred L. Holliger             |  | Chairman of the Board, Chief Executive Officer and Director                              |  | March 1, 2006
|                                                
|/s/ MARK B. COXMark B. Cox                       |  | Executive Vice President, Treasurer, Chief Financial Officer and
    Assistant Secretary |  | March 1, 2006
|                                                
|/s/ GREGORY A. BARBERGregory A. Barber           |  | Vice President, Chief Accounting Officer, and Assistant Secretary                        |  | March 1, 2006
|                                                
|/s/ ANTHONY J.
    BERNITSKYAnthony J. Bernitsky |  | Director                                                                                 |  | March 1, 2006
|                                                
|/s/ LARRY L. DEROINLarry L. DeRoin               |  | Director                                                                                 |  | March 1, 2006
|                                                
|/s/ BROOKS J. KLIMLEYBrooks J. Klimley           |  | Director                                                                                 |  | March 1, 2006
|                                                
|/s/ GEORGE M. RAPPORTGeorge M. Rapport           |  | Director                                                                                 |  | March 1, 2006
|                                                
|/s/ DONALD M. WILKINSONDonald M. Wilkinson       |  | Director                                                                                 |  | March 1, 2006

109



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








10-K.








110



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##### Table of Contents



SCHEDULE II


GIANT INDUSTRIES, INC. AND SUBSIDIARIES


Valuation and Qualifying Accounts


Three Years Ended December 31, 2005


Trade Receivables


|                                |  |                |     |  |            |   |     |              |  |            |        |   |  |   |     | 
|------------------------------- |  | -------------- | --- |  | ---------- | - | --- | ------------ |  | ---------- | ------ | - |  | - | --- | 
|                                |  | Balance at     |     |  | Charged to |   |     |              |  | Balance at |       
|                                |  | Beginning      |     |  | Costs and  |   |     |              |  | End of     |       
|                                |  | of Period      |     |  | Expenses   |   |     | Deduction(a) |  |            | Period |  
|                                |  |                |     |  |            |   |     |              |  |            |        |  
|                                |  | (In thousands) |    
|Year ended December 31, 2005:   |  |                |     |  |            |   |     |              |  |            |        |   |  |   |     | 
|Allowance for doubtful accounts |  | $              | 329 |  |            | $ | 483 |              |  | $          | (201   | ) |  | $ | 611 | 
|                                |  |                |     |  |            |   |     |              |  |            |        |  
|Year ended December 31, 2004:   |  |                |     |  |            |   |     |              |  |            |        |   |  |   |     | 
|Allowance for doubtful accounts |  | $              | 390 |  |            | $ | 167 |              |  | $          | (228   | ) |  | $ | 329 | 
|                                |  |                |     |  |            |   |     |              |  |            |        |  
|Year ended December 31, 2003:   |  |                |     |  |            |   |     |              |  |            |        |   |  |   |     | 
|Allowance for doubtful accounts |  | $              | 650 |  |            | $ | 0   |              |  | $          | (260   | ) |  | $ | 390 | 
|                                |  |                |     |  |            |   |     |              |  |            |        |  






|    |                                                                            
|--- | ---------------------------------------------------------------------------
|(a) | Deductions are primarily trade accounts determined to be
    uncollectible.

Related Party Note and Interest Receivable:


|                                |  |            |       |  |            |   |   |              |  |            |        |   |  |   |   | 
|------------------------------- |  | ---------- | ----- |  | ---------- | - | - | ------------ |  | ---------- | ------ | - |  | - | - | 
|                                |  | Balance at |       |  | Charged to |   |   |              |  | Balance at |       
|                                |  | Beginning  |       |  | Costs and  |   |   |              |  | End of     |       
|                                |  | of Period  |       |  | Expenses   |   |   | Deduction(b) |  |            | Period |  
|                                |  |            |       |  |            |   |   |              |  |            |        |  
|Year ended December 31, 2005:   |  |            |       |  |            |   |   |              |  |            |        |   |  |   |   | 
|Allowance for doubtful accounts |  | $          | 0     |  |            | $ | 0 |              |  | $          | 0      |   |  | $ | 0 | 
|                                |  |            |       |  |            |   |   |              |  |            |        |  
|Year ended December 31, 2004:   |  |            |       |  |            |   |   |              |  |            |        |   |  |   |   | 
|Allowance for doubtful accounts |  | $          | 0     |  |            | $ | 0 |              |  | $          | 0      |   |  | $ | 0 | 
|                                |  |            |       |  |            |   |   |              |  |            |        |  
|Year ended December 31, 2003:   |  |            |       |  |            |   |   |              |  |            |        |   |  |   |   | 
|Allowance for doubtful accounts |  | $          | 5,409 |  |            | $ | 0 |              |  | $          | (5,409 | ) |  | $ | 0 | 
|                                |  |            |       |  |            |   |   |              |  |            |        |  






|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(b) | The related party note and interest receivable were determined
    to be uncollectible in 2003.

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GIANT INDUSTRIES, INC.


ANNUAL REPORT ON
FORM 10-K


Year Ended December 31, 2005


INDEX TO EXHIBITS


Definitions:


S-1 S-1 33-31584.


S-1 33-31584.


S-3 S-3 33-69252.


|            |   |             |  |                                                                                                                                                                                                                                                                                                                                     
|----------- | - | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |   | Description
|            |   |            
|            | 2 | .1          |  | Asset Purchase Agreement dated February 8, 2002, by and
    among, BP Corporation North America Inc., BP Products North
    America Inc., and Giant Industries, Inc. Incorporated by
    reference to Exhibit 2.3 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2001, File No. 1-10398.
|            | 3 | .1          |  | Restated Certificate of Incorporation of Giant Industries, Inc.,
    a Delaware corporation. Incorporated by reference to
    Exhibit 3.1 to Amendment No. 3.                                                                                                                                                                       
|            | 3 | .2          |  | Bylaws of Giant Industries, Inc., a Delaware corporation, as
    amended September 9, 1999. Incorporated by reference to
    Exhibit 3.2 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 1999,
    File No. 1-10398.                                                                         
|            | 3 | .3          |  | Articles of Incorporation of Giant Industries Arizona, Inc., an
    Arizona corporation (Giant Arizona) formerly Giant
    Acquisition Corp. Incorporated by reference to Exhibit 2.1,
    Annex V to Form S-1.                                                                                                                   
|            | 3 | .4          |  | Bylaws of Giant Arizona. Incorporated by reference to
    Exhibit 2.1, Annex VI to Form S-1.                                                                                                                                                                                                                                        
|            | 3 | .5          |  | Articles of Incorporation of Ciniza Production Company.
    Incorporated by reference to Exhibit 3.7 to Form S-3.                                                                                                                                                                                                                   
|            | 3 | .6          |  | Bylaws of Ciniza Production Company. Incorporated by reference
    to Exhibit 3.8 to Form S-3.                                                                                                                                                                                                                                      
|            | 3 | .7          |  | Articles of Incorporation of Giant Stop-N-Go of New Mexico, Inc.
    Incorporated by reference to Exhibit 3.9 to Form S-3.                                                                                                                                                                                                          
|            | 3 | .8          |  | Bylaws of Giant Stop-N-Go of New Mexico, Inc. Incorporated by
    reference to Exhibit 3.10 to Form S-3.                                                                                                                                                                                                                            
|            | 3 | .9          |  | Articles of Incorporation of Giant Four Corners, Inc.
    Incorporated by reference to Exhibit 3.11 to Form S-3.                                                                                                                                                                                                                    
|            | 3 | .10         |  | Bylaws of Giant Four Corners, Inc. Incorporated by reference to
    Exhibit 3.12 to Form S-3.                                                                                                                                                                                                                                       
|            | 3 | .11         |  | Articles of Incorporation of Giant Mid-Continent, Inc.
    Incorporated by reference to Exhibit 3.13 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 1994, File No. 1-10398.                                                                                                             
|            | 3 | .12         |  | Bylaws of Giant Mid-Continent, Inc. Incorporated by reference to
    Exhibit 3.14 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 1994,
    File No. 1-10398.                                                                                                                                
|            | 3 | .13         |  | Articles of Incorporation of San Juan Refining Company.
    Incorporated by reference to Exhibit 3.15 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 1995, File No. 1-10398.                                                                                                            
|            | 3 | .14         |  | Bylaws of San Juan Refining Company. Incorporated by
    reference to Exhibit 3.16 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 1995, File No. 1-10398.                                                                                                                               

112



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|            |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                     
|----------- | -- | ----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 3  | .15         |  | Amended and Restated Articles of Incorporation of Phoenix Fuel
    Co., Inc. Incorporated by reference to Exhibit 3.15 to the
    Companys Registration Statement on Form S-4 under the
    Securities Act of 1933 as filed July 15, 2002, File
    No. 333-92386.                                                                                                                                                 
|            | 3  | .16         |  | Amended Bylaws of Phoenix Fuel Co., Inc. Incorporated by
    reference to Exhibit 3.18 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 1997, File No. 1-10398.                                                                                                                                                                                                           
|            | 3  | .17         |  | Articles of Incorporation of Giant Pipeline Company.
    Incorporated by reference to Exhibit 3.21 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 1999, File No. 1-10398.                                                                                                                                                                                               
|            | 3  | .18         |  | Bylaws of Giant Pipeline Company. Incorporated by reference to
    Exhibit 3.22 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 1999,
    File No. 1-10398.                                                                                                                                                                                                                  
|            | 3  | .19         |  | Certificate of Incorporation of Giant Yorktown, Inc.
    Incorporated by reference to Exhibit 3.21 to the
    Companys Annual Report on Form 10-K for the year
    ended December 31, 2001, File No. 1-10398.                                                                                                                                                                                                      
|            | 3  | .20         |  | Bylaws of Giant Yorktown, Inc. Incorporated by reference to
    Exhibit 3.22 to the Companys Annual Report on
    Form 10-K for the year ended December 31, 2001, File
    No. 1-10398.                                                                                                                                                                                                                            
|            | 3  | .21         |  | Certificate of Incorporation of Giant Yorktown Holding Company.
    Incorporated by reference to Exhibit 3.23 to the
    Companys Registration Statement on Form S-4 under the
    Securities Act of 1933 as filed July 15, 2002, File
    No. 333-92386.                                                                                                                                                          
|            | 3  | .22         |  | Bylaws of Giant Yorktown Holding Company. Incorporated by
    reference to Exhibit 3.24 to the Companys
    Registration Statement on Form S-4 under the Securities Act
    of 1933 as filed July 15, 2002, File No. 333-92386.                                                                                                                                                                                    
|            | 3  | .23*        |  | Articles of Incorporation of Dial Oil Co.                                                                                                                                                                                                                                                                                                                                                                           
|            | 3  | .24         |  | Amended and Restated Bylaws of Dial Oil Co. Incorporated by
    reference to Exhibit 3.1 to the Companys Quarterly
    Report on Form 10-Q for the quarter ended June 20,
    2005, File No. 1-10398.                                                                                                                                                                                                              
|            | 4  | .1          |  | Indenture, dated as of May 14, 2002, among the Company, as
    Issuer, the Subsidiary Guarantors, as guarantors, and The Bank
    of New York, as Trustee, relating to $200,000,000 of
    11% Senior Subordinated Notes 2012. Incorporated by
    reference to Exhibit 4.2 to the Companys Registration
    Statement on Form S-4 under the Securities Act of 1933 as
    filed July 15, 2002, File No. 333-92386.
|            | 4  | .2          |  | Indenture, dated as of May 3, 2004, among the Company, as
    Issuer, the Subsidiary Guarantors, as Guarantors, and The Bank
    of New York, as Trustee, providing for Issuance of Notes in
    Series. Incorporated by reference to Exhibit 4.6 to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended March 31, 2004, File No. 1-10398                                              
|            | 4  | .3          |  | Supplemental Indenture, dated as of May 3, 2004, among the
    Company, as Issuer, the Subsidiary Guarantors, as Guarantors,
    and The Bank of New York, as Trustee, relating to $150,000,000
    of 8% Senior Subordinated Notes due 2014. Incorporated by
    reference to Exhibit 4.7 to the Companys Quarterly
    Report on Form 10-Q for the fiscal quarter ended
    March 31, 2004, File No. 1-10398.    
|            | 10 | .1          |  | Giant Industries, Inc. & Affiliated Companies 401(k)
    Basic Plan Document, effective October 9, 2003.
    Incorporated by reference to Exhibit 4.3 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 2003, File No. 1-10398.                                                                                                                                            
|            | 10 | .2          |  | Addendum to Giant Industries, Inc. & Affiliated
    Companies 401(k) Basic Plan Document, effective March 28,
    2005. Incorporated by reference to Exhibit 4.1 to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2005, File No. 1-10398.                                                                                                                                     
|            | 10 | .3          |  | Giant Industries, Inc. & Affiliated Companies 401(k)
    Plan Adoption Agreement, effective June 24, 2003.
    Incorporated by reference to Exhibit 4.1 to the
    Companys Quarterly Report on Form 10-K for the
    quarter ended June 30, 2003, File No 1-10398.                                                                                                                                                
|            | 10 | .4          |  | First Amendment to Giant Industries, Inc. & Affiliated
    Companies 401(k) Plan Adoption Agreement, effective
    June 24, 2003. Incorporated by reference to
    Exhibit 4.2 to the Companys Quarterly Report on
    Form 10-K for the quarter ended June 30, 2003, File No
    1-10398.                                                                                                                         

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##### Table of Contents



|            |    |             |  |                                                                                                                                                                                                                                                                                                    
|----------- | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 10 | .5          |  | Second Amendment to Giant Industries, Inc. & Affiliated
    Companies 401(k) Plan Adoption Agreement, effective July 1,
    2003. Incorporated by reference to Exhibit 4.3 to the
    Companys Quarterly Report on Form 10-K for the
    quarter ended June 30, 2003, File No 1-10398.            
|            | 10 | .6          |  | Third Amendment to Giant Industries, Inc. & Affiliated
    Companies 401(k) Plan Adoption Agreement, effective
    January 1, 2004. Incorporated by reference to
    Exhibit 4.7 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2003,
    File No. 1-10398.
|            | 10 | .7          |  | Fourth Amendment to Giant Industries, Inc. & Affiliated
    Companies 401(k) Plan Adoption Agreement, effective
    March 1, 2004. Incorporated by reference to
    Exhibit 4.8 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2003,
    File No. 1-10398. 
|            | 10 | .8          |  | Fifth Amendment to the Giant Industries, Inc. &
    Affiliated Companies 401(k) Plan Adoption Agreement.
    Incorporated by reference to Exhibit 4.2 to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended March 31, 2005, File No. 1-10398.                               
|            | 10 | .9          |  | Sixth Amendment to the Giant Industries, Inc. &
    Affiliated Companies 401(k) Plan Adoption Agreement.
    Incorporated by reference to Exhibit 4.1 to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2005, File No. 1-10398.                                
|            | 10 | .10         |  | Seventh Amendment to the Giant Industries, Inc. &
    Affiliated Companies 401(k) Plan Adoption Agreement.
    Incorporated by reference to Exhibit 10.1 to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2005, File No. 1-10398.                        
|            | 10 | .11*        |  | Eighth Amendment to the Giant Industries, Inc. &
    Affiliated Companies 401(k) Plan Adoption Agreement.                                                                                                                                                                                          
|            | 10 | .12*        |  | Ninth Amendment to the Giant Industries, Inc. &
    Affiliated Companies 401(k) Plan Adoption Agreement.                                                                                                                                                                                           
|            | 10 | .13         |  | Giant Industries, Inc. and Affiliated Companies Deferred
    Compensation Plan. Incorporated by reference to
    Exhibit 10.2 to the Companys Quarterly Report on
    Form 10-Q for the quarter ended September 30, 2005,
    File No. 1-10398.                                                   
|            | 10 | .14         |  | Purchase and Sale Agreement, dated as of June 21, 2005,
    between Texas-New Mexico Pipe Line Company and Giant Pipeline
    Company. Incorporated by reference to Exhibit 10.3 to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2005, File No. 1-10398.     
|            | 10 | .15         |  | Giant Industries, Inc. 1998 Stock Incentive Plan. Incorporated
    by reference to Appendix H to the Joint Proxy Statement/
    Prospectus included in the Companys Registration Statement
    on Form S-4 under the Securities Act of 1933 as filed
    May 4, 1998, File No. 333-51785.         
|            | 10 | .16         |  | Amendment No. 1 to 1998 Stock Incentive Plan, dated
    September 13, 2000. Incorporated by reference to
    Exhibit 10.8 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2002,
    File No 1-10398.                                                        
|            | 10 | .17         |  | Amendment No. 2 to 1998 Stock Incentive Plan, dated
    March 27, 2002. Incorporated by reference to
    Exhibit 10.9 to the Companys Annual Report on
    Form 10-K for the fiscal year ended December 31, 2002,
    File No 1-10398.                                                            
|            | 10 | .18         |  | ESOP Substitute Excess Deferred Compensation Benefit Plan.
    Incorporated by reference to Exhibit 10.8 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 1992, File No. 1-10398.                                                                        
|            | 10 | .19         |  | 2005 Management Discretionary Bonus Plan. Incorporated by
    reference to Exhibit 10.6 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2004, File No. 1-10398.                                                                                         
|            | 10 | .20*        |  | 2006 Management Discretionary Bonus Plan.                                                                                                                                                                                                                                                          
|            | 10 | .21         |  | Employment Agreement, dated as of December 12, 2003,
    between Fred L. Holliger and Giant Industries, Inc. Incorporated
    by reference to Exhibit 10.28 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003, File No. 1-10398.                     
|            | 10 | .22         |  | Employment Agreement, dated as of December 12, 2003,
    between Morgan Gust and Giant Industries, Inc. Incorporated by
    reference to Exhibit 10.29 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003, File No. 1-10398.                          

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|            |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|----------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |    | Description
|            |    |            
|            | 10 | .23         |  | Employment Agreement, dated as of December 12, 2003,
    between Mark B. Cox and Giant Industries, Inc. Incorporated by
    reference to Exhibit 10.30 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003, File No. 1-10398.                                                                                                                                                               
|            | 10 | .24         |  | Employment Agreement, dated as of December 12, 2003,
    between Kim H. Bullerdick and Giant Industries, Inc.
    Incorporated by reference to Exhibit 10.31 to the
    Companys Annual Report on Form 10-K for the fiscal
    year ended December 31, 2003, File No. 1-10398.                                                                                                                                                         
|            | 10 | .25**       |  | Crude Oil Purchase/ Sale Agreement 2004-2008, effective as of
    February 9, 2004, between Giant Yorktown, Inc. and Statoil
    Marketing & Trading (US) Inc. Incorporated by
    reference to Exhibit 10.33 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003, File No. 1-10398.                                                                                                        
|            | 10 | .26         |  | Fourth Amended and Restated Credit Agreement, dated as of
    June 27, 2005, among Giant Industries, Inc., as Borrower,
    Bank of America, N.A., as Administrative Agent, Swing Line
    Lender, and as Issuing Bank, and the Lenders parties thereto.
    Incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on Form 8-K filed
    July 1, 2005, File No. 1-10398.                                        
|            | 10 | .27         |  | First Amendment to Fourth Amended and Restated Credit Agreement,
    dated as of August 4, 2005, among Giant Industries, Inc.,
    as Borrower, Bank of America, N.A., as Administrative Agent,
    Swing Line Lender, and as Issuing Bank, and the Lenders parties
    thereto. Incorporated by reference to Exhibit 10.2 to the
    Companys Quarterly Report on Form 10-Q for the
    quarter ended June 30, 2005, File No. 1-10398.
|            | 14 | .1          |  | Code of Ethics. Incorporated by reference to Exhibit 14.1
    to the Companys Annual Report on Form 10-K for the
    fiscal year ended December 31, 2003, File No. 1-10398.                                                                                                                                                                                                                                                            
|            | 18 | .1          |  | Letter regarding change in accounting principles. Incorporated
    by reference to Exhibit 18.1 to the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 1990, File No. 1-10398.                                                                                                                                                                                                                      
|            | 21 | .1*         |  | Subsidiaries of the Company.                                                                                                                                                                                                                                                                                                                                                                                                            
|            | 23 | .1*         |  | Consent of Deloitte & Touche LLP to incorporate report
    in previously filed Registration Statements.                                                                                                                                                                                                                                                                                                                                 
|            | 31 | .1*         |  | Certification of Principal Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                             
|            | 31 | .2*         |  | Certification of Principal Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                             
|            | 32 | .1*         |  | Certification of Principal Executive Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                          
|            | 32 | .2*         |  | Certification of Principal Financial Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                          






| |   |                
| | - | ---------------
| | * | Filed herewith.



|   |                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|** | Portions have been omitted pursuant to a request for
    confidential treatment filed by the Registrant with the
    Commission. The omitted portions have been filed separately with
    the Commission.

115