Investor Presentation September 2016 1
Cautionary Statements This presentation contains forward-looking statements which are protected by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements reflect Western Refining, Inc. s ( Western, Western Refining, or WNR as applicable or the context requires) current expectations regarding future events, results or outcomes. Words such as anticipate, assume, believe, budget, continue, could, estimate, expect, forecast, intend, may, plan, position, potential, predict, project, strategy, will, future and other similar terms and phrases are used to identify forward-looking statements. The forward-looking statements contained herein include, but are not limited to, statements about: WNR s attractive refinery locations that have access to advantaged crude oil production in the Permian, Four Corners, Bakken and western Canada and strong refined product regions; WNR s integrated distribution network, significant blending capabilities and corresponding reduced RIN exposure; WNR s growth opportunities including enhancements to refining profitability, and expansions of its logistics footprint in the Permian, Four Corners and Bakken regions; WNR s capital allocation discipline including its ability to reduce debt over the next three years, reinvest in its business to grow EBITDA/cash flow, and return cash to shareholders; WNR s pipeline access to advantaged crude oil basins and enhanced crude oil slates; WNR s ability to achieve a crude oil cost benefit due to its advantaged location; West coast product pricing influence on pricing in WNR s southwest product distribution regions; WNR s upper mid-west products ability to trade at premium to Group 3 pricing; the margin advantage achieved by WNR due to its strategic and advantaged location and corresponding advantage in operating income compared to its peers in the upper Mid-West/Mid-Continent and U.S. Gulf Coast/Southwest; WNR s significant earnings improvement opportunities, including unit expansions in El Paso, unit expansions, crude slate flexibility and increased product yields in St. Paul Park, integration opportunities with Norther Tier Energy LP, further development of its Midwest/Mid- Atlantic wholesale business, and expansion of the SuperAmerica footprint, and corresponding operating income improvements; WNR s capital allocation priorities including its ability to increase balance sheet flexibility, focus on shareholder return, and invest in capital projects; WNR s target debt to EBITDA ratio and liquidity levels; WNR s ability to opportunistically repurchase shares and maintain a regular dividend in the top quartile of is peer group; WNR s focus on logistics and refining capital projects and ability to achieve a high return on organic growth projects; and WNR s ability to divest logistics assets including pipelines, terminals, storage tanks, and wholesale and retail businesses. These statements are subject to the general risks inherent in WNR s business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, WNR s business and operations involve numerous risks and uncertainties, many of which are beyond its control, which could result in WNR s expectations not being realized or otherwise materially affect WNR s financial condition, results of operations, and cash flows. Additional information relating to the uncertainties affecting WNR s business is contained in its filings with the Securities and Exchange Commission to which you are referred. The forward-looking statements are only as of the date made. Except as required by law, WNR does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. 2
Investment Considerations Attractive Refinery Locations Pipeline access to advantaged crude oil production Permian, Four Corners, Bakken and western Canada Historically strong refined product regions Integrated Distribution Network Fully integrated crude oil pipeline system to serve refineries Refined product distribution to retail/wholesale end-user Significant blending capabilities reduce RINS exposure Growth Opportunities Two growth platforms: refining and logistics Enhance refining profitability Expand logistics footprint in Permian, Four Corners and Bakken Capital Allocation Discipline Debt reduction is priority over next three years Reinvest in business to grow EBITDA/ cash flow Return cash to shareholders 3
Western at a Glance Refining Capacity: 254,000 bpd Basin Exposure: Bakken, Western Canada, Permian, Four Corners Retail Stores: 543 Pipelines: 1,022 miles Tank Storage: 12 mm bbls 4
Pipeline Access to Advantaged Crude Oil Basins Enbridge Enbridge TexNew Mex Minnesota Pipeline Pipeline connectivity allows for enhanced crude oil slate optimization Location advantage provides for crude oil costs benefit 5
Attractive Refined Product Locations Southwest region influenced by West Coast product pricing Upper Midwest region trades at a premium to Group 3 pricing Note: Group 3 references the US Mid-Continent region 6
Strategic Location Advantage $/bbl Margin Advantage SPP vs Group 3 ELP/Gallup vs GC/Group 3 Crude Oil WCS + $1 - $2.00 - NDL + $2 - $3.00 - WTI - + $1 - $1.50 Refined Products + $2 - $2.50 + $1 - $1.50 Integrated Model $1 $1 Margin Adv 1 + $4.50 - $5.50 + $3.00 - $4.00 1 Weighted for SPP crude oil slate Note: Group 3 references the US Mid-Continent region Western s refineries have crude oil, location and integration advantages 7
Peer Group Benchmarking Gross Profit per Throughput Barrel Upper Midwest/Mid-Continent Refiners Q2 YTD 2016 FY 2015 SPP = $9.87 Peer Group Average $7.35 SPP = $18.87 Peer Group Average $13.38 $/bbl $/bbl Each $1.00/bbl advantage equals approximately $35 million in operating income Source: Company filings 8
Peer Group Benchmarking Gross Profit per Throughput Barrel USGC/Southwest Refiners Q2 YTD 2016 FY 2015 WNR Average Peer Group WNR Average $11.13 Peer Group Average $17.41 Average $9.73 $15.69 $/bbl $/bbl Each $1.00/bbl advantage equals approximately $60 million in operating income Source: Company filings 9
Significant Earnings Improvement Opportunities El Paso Unit expansion Crude (3,300 bpd) Naphtha hydrotreater Reformer Alkylation $20 million in capital $22 million in annual operating income St. Paul Park Crude unit expansion Crude slate flexibility Increased product yields $110 million in capital $53 million in annual operating income Corporate/ Other Integrate Northern Tier Further develop Midwest/mid-Atlantic wholesale business Expand SuperAmerica footprint $25 million in capital $25 million in annual operating income $100 million 1 in operating income improvement 1 Includes depreciation of $6 million 10
Capital Allocation Priorities Increasing Balance Sheet Flexibility Total Debt to EBITDA target of 1x Operational cash flow Asset sales to WNRL Distributions from WNRL Maintain $500-$600 million in liquidity Focus on Shareholder Returns Regular dividend yield in top quartile of peer group Opportunistic share repurchase Investing in Capital Projects Focus on logistics and refining assets High return organic growth projects 11
Potential Logistics Asset Divestitures Pipelines Bobcat Pipeline 37 mile crude oil pipeline from Mason Station to Wink, TX TexNew Mex Pipeline (units) 80% of economics above 13,000 bpd Minnesota Pipeline 17% interest Wink to Crane pipeline (deferred) Terminals/ Storage Tanks Mason/ Wink/ Yucca/ Mesquite crude oil terminals 660,000 bbls storage; 70,000 bpd throughput Clearbrook crude oil tanks 600,000 bbls storage Jal tanks 550,000 bbls storage Wholesale/ Retail SuperAmerica/ Southwest Retail 543 c-stores; approximately 45,000 bpd throughput Upper Midwest/ Mid-Atlantic/ Southwest Wholesale 60,000 bpd sold to wholesale customers $100 - $125 million 1 in operating income over the next three years; $160 - $190 million 2 including to-be-developed projects 1 Includes depreciation of approximately $32 million 2 Includes depreciation of approximately $46 million 12
Investment Considerations Attractive Refinery Locations Pipeline access to advantaged crude oil production Permian, Four Corners, Bakken and western Canada Historically strong refined product regions Integrated Distribution Network Fully integrated crude oil pipeline system to serve refineries Refined product distribution to retail/wholesale end-user Significant blending capabilities reduce RINS exposure Growth Opportunities Two growth platforms: refining and logistics Enhance refining profitability Expand logistics footprint in Permian, Four Corners and Bakken Capital Allocation Discipline Debt reduction is priority over next three years Reinvest in business to grow EBITDA/ cash flow Return cash to shareholders 13
Investor Relations Contact For more information, please contact: Jeff Beyersdorfer SVP Corporate Development, Treasurer, Director of Investor Relations 602-286-1530 jeff.beyersdorfer@wnr.com 14
WNR Consolidated Adjusted EBITDA Reconciliation Three Month Period Ending (In thousands) Twelve Months Ended Consolidated Western Refining, Inc. Sep 2015 Dec 2015 Mar 2016 Jun 2016 Jun 2016 Net income attributable to Western Refining, Inc. $ 153,303 $ 13,545 $ 30,538 $ 65,415 $ 262,801 Net income attributable to non-controlling interests 64,795 (6,047) 9,047 37,449 105,244 Interest and debt expense 26,896 26,434 26,681 26,928 106,939 Provision for income taxes 92,117 (6,034) 18,629 38,152 142,864 Depreciation and amortization 51,377 52,845 52,651 54,359 211,232 Maintenance turnaround expense 490 836 125 400 1,851 Loss (gain) on disposal of assets, net (52) 208 (130) (772) (746) Net change in lower of cost or market inventory reserve 36,795 113,667 (51,734) (35,619) 63,109 Unrealized loss (gain) on commodity hedging transactions (271) 8,160 12,483 14,598 34,970 Adjusted EBITDA $ 425,450 $ 203,614 $ 98,290 $ 200,910 $ 928,264 15
Adjusted EBITDA Adjusted EBITDA represents earnings before interest and debt expense, provision for income taxes, depreciation, amortization, maintenance turnaround expense and certain other non-cash income and expense items. However, Adjusted EBITDA is not a recognized measurement under U.S. generally accepted accounting principles ("GAAP"). Our management believes that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. In addition, our management believes that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of financings, income taxes, the accounting effects of significant turnaround activities (that many of our competitors capitalize and thereby exclude from their measures of EBITDA) and certain non-cash charges that are items that may vary for different companies for reasons unrelated to overall operating performance. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: Adjusted EBITDA does not reflect our cash expenditures or future requirements for significant turnaround activities, capital expenditures or contractual commitments; Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt; Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and Adjusted EBITDA, as we calculate it, may differ from the Adjusted EBITDA calculations of other companies in our industry, thereby limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally. 16