10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

FOR THE FISCAL YEAR ENDED AUGUST 31, 2015

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

For the transition period from              to             

Commission File No. 001-06198

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

Pennsylvania	25-1411751
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

See Table of Additional Subsidiary Guarantor Registrants

15 Bradley Street, Warren, PA	16365-3299
(Address of principal executive offices)	(Zip Code)

(814) 723-1500

(Registrant’s telephone number, including area code)

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

None

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes   ¨    No  x

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

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

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

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

As of November 23, 2015, 100 shares of the Registrant’s common stock, $0.10 par value per share, were outstanding. All shares of common stock of the Registrant’s are held by an affiliate. Therefore, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant is zero.

DOCUMENTS INCORPORATED BY REFERENCE:    None

TABLE OF ADDITIONAL REGISTRANTS

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

2

FORM 10-K CONTENTS

		PAGE(S)
Item 1.	Business		4
Item 1A.	Risk Factors		15
Item 1B.	Unresolved Staff Comments		20
Item 2.	Properties		20
Item 3.	Legal Proceedings		20
Item 4.	Mine Safety Disclosures		21
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		21
Item 6.	Selected Financial Data		21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		38
Item 8.	Financial Statements and Supplementary Data		39
	Report of Independent Registered Public Accounting Firm		40
	Consolidated Financial Statements:
	Balance Sheets		41
	Statements of Income		42
	Statements of Comprehensive Income		43
	Statements of Stockholder’s Equity		44
	Statements of Cash Flows		45
	Notes to Consolidated Financial Statements		46
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		80
Item 9A.	Controls and Procedures		80
Item 9B.	Other Information		81
Item 10.	Directors, Executive Officers and Corporate Governance		81
Item 11.	Executive Compensation		84
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		88
Item 13.	Certain Relationships and Related Transactions, Director Independence		88
Item 14.	Principal Accounting Fees and Services		89
Item 15.	Exhibits, Financial Statement Schedules		90
	Signatures		95

3

ITEM 1. BUSINESS.

Introduction

United Refining Company (“URC” and, together with its subsidiaries, the “Company,” “we,” “us” and “our”) is a Pennsylvania corporation that began business operations in 1902. We are the leading integrated refiner and marketer of petroleum products in western New York and northwestern Pennsylvania, which is located within the Petroleum Administration for Defense Districts I (“PADD I”). We own and operate a medium complexity 70,000 barrel per day (“bpd”) petroleum refinery in Warren, Pennsylvania where we refine crude oil into a variety of finished products, including various grades of gasoline, ultra-low sulfur diesel fuel, kerosene, No. 2 heating oil and asphalt. We have a long history of service within our market area. Our first retail service station was established in 1927 near the Warren, Pennsylvania refinery, and we have steadily expanded our distribution network over the years.

Our operations are organized into two major business segments: refining/wholesale and retail. The refining division operates the refinery in Warren and offsite terminals. The wholesale division sells finished products produced at the Warren refinery, primarily in western New York and northwestern Pennsylvania, to both our retail network and to third-party customers. The retail business segment sells petroleum products under the Kwik Fill^®, Citgo^®, Keystone^® and Country Fair^® brand names at a network of Company operated retail units and convenience and grocery items through convenience stores under the Red Apple Food Mart^® and Country Fair^® brand names.

For fiscal 2015, we had total net sales of $2.7 billion. Of total sales, petroleum based sales were approximately 51% gasoline, 20% distillate, 18% asphalt and the remaining 11% were from sales of merchandise and other revenue.

Our Operations

Refining Operations

Our refinery, located on a 107-acre site in Warren, Pennsylvania, has a nominal capacity of 70,000 bpd of crude oil processing and averaged saleable production of approximately 63,400 bpd during fiscal 2015. We believe our location in the product-short PADD I, in an area that is geographically distant from the majority of PADD I refining capacity, is a significant marketing advantage. The nearest fuels refinery is over 160 miles from Warren, Pennsylvania and we believe that no significant production from such refinery is currently shipped into our primary market area.

A scheduled nine day reformer catalyst regeneration was performed in September 2014. Intermediate product inventory management during September 2014 resulted in crude throughput being reduced to 61,480 bpd for the month of September.

In April 2015, crude rates were temporarily reduced to 56,200 bpd to manage intermediate products due to a planned shutdown of the Fluid Catalytic Cracking (“FCC”) unit for minor modifications to the reactor cyclones.

Our Products

We produce three primary petroleum products: gasoline, middle distillates and asphalt. We presently produce two grades of unleaded gasoline, 87-octane regular and 93-octane premium, and also blend these to produce a mid-grade 89-octane. Middle distillates include kerosene, ultra-low sulfur diesel fuel and No. 2 heating oil. We optimize our bottom-of-the-barrel processing by producing asphalt, a higher value alternative to residual fuel oil. Our refining configuration allows the processing of a wide variety of crude oil inputs and our ability to market asphalt on a year-round basis enables us to purchase selected heavier crude oils at higher differentials and lower costs.

4

Refining Process

Our production of petroleum products from crude oil involves many complex steps, which are briefly summarized below.

We seek to maximize refinery profitability by selecting crude oil and other feedstocks taking into account factors including product demand and pricing in our market areas as well as price, quality and availability of various grades of crude oil. We also consider product inventory levels and any planned turnarounds of refinery units for maintenance. The combination of these factors is optimized by a sophisticated proprietary linear programming computer model, which selects the most profitable feedstock and product mix. The linear programming model is continuously updated and improved to reflect changes in the product marketplace and in the refinery’s processing capability.

Blended crude is stored in a tank farm near the refinery, which has a capacity of approximately 512,000 barrels. The blended crude is then brought into the refinery where it is first distilled at low pressure into its component streams in the crude and preflash unit. This yields the following intermediate products: light products consisting of fuel gas components (methane and ethane) and LPG (propane and butane), naphtha or gasoline, kerosene, diesel or heating oil, heavy atmospheric distillate, and crude tower bottoms which are further distilled under vacuum conditions to yield light and heavy vacuum distillates and asphalt.

The intermediate products are then processed in downstream units and blended to produce finished products. A naphtha hydrotreater treats naphtha and FCC light catalytic naphtha with hydrogen across a fixed bed catalyst to remove sulfur before further treatment. The treated naphtha is then distilled into light and heavy naphtha at a prefractionator. Light naphtha is then sent to an isomerization unit and heavy naphtha is sent to a reformer, in each case for octane enhancement. The isomerization unit converts the light naphtha catalytically into a gasoline component with 83 octane. The reformer unit converts the heavy naphtha into another gasoline component with up to 94 octane depending upon the desired octane requirement for the grade of gasoline to be produced. The reformer also produces as a co-product, hydrogen needed to operate hydrotreating units in the refinery.

Raw kerosene is treated with hydrogen at a distillate hydrotreater to remove sulfur to make finished kerosene. A distillate hydrotreater built in 1993 and modified in 2012 with the addition of a second reactor also treats raw distillates to produce ultra-low sulfur diesel fuel.

The long molecular chains of the heavy atmospheric and vacuum distillates are broken or “cracked” in the FCC unit and separated and recovered in the gas concentration unit to produce fuel gas, propylene, butylene, LPG, light and heavy catalytic naphtha gasoline, light cycle oil and clarified oil. Fuel gas is burned within the refinery, propylene is fed to a polymerization unit which polymerizes its molecules into a larger chain to produce an 87 octane gasoline component, butylene is fed into an alkylation unit to produce a gasoline component and LPG is treated to remove trace quantities of water and then sold. Clarified oil is burned in the refinery or sold. Various refinery gasoline components are blended together in refinery tankage to produce 87 octane and 93 octane finished gasoline. Likewise, light cycle oil is blended with other distillates to produce No. 2 heating oil. FCC light and heavy catalytic naphtha are hydrotreated in order to meet new more stringent legally mandated limits on gasoline sulfur content which took effect January 1, 2008, and a portion of the light cycle oil is hydrotreated in order to meet new more stringent legally mandated limits on diesel fuel sulfur content which took effect June 1, 2006.

Our refining configuration allows the processing of a wide variety of crude oil inputs. During the past five years our inputs have been predominantly of Canadian origin and range from light low sulfur (38 degrees API, 0.5% sulfur) to high sulfur heavy asphaltic (21 degrees API, 3.5% sulfur). Our ability to market asphalt on a year round basis enables us to purchase selected heavier crude oils at higher differentials and thus at a lower cost.

5

Supply of Crude Oil

Substantially all of our crude supply is sourced from Canada and the northern plain states through the Enbridge Pipeline system. We are however not dependent on this source alone. We could within 90 days shift up to 70% of our crude oil requirements to some combination of domestic and offshore crude. With additional time, 100% of our crude requirements could be obtained from non-Canadian sources. This change in crude supply could result in a different crude slate and alter product yields and product mix and could affect refinery profitability. Forty-seven percent of our term contracts with our crude suppliers are on a month-to-month evergreen basis, with 60-to-90 day cancellation provisions; 53% of our term crude contracts are on an annual basis (with month to month pricing provisions). As of August 31, 2015, we had supply contracts with 12 major suppliers for an aggregate of 65,365 bpd of crude oil. We have contracts with four suppliers amounting to approximately 68% of daily crude oil supply. None of the remaining suppliers accounted for more than 10% of our crude oil supply.

We access crude through the Kiantone Pipeline, a 78-mile Company-owned and operated pipeline, which connects with the Enbridge Pipeline system in West Seneca, New York, which is near Buffalo. The Enbridge Pipeline system provides access to most North American and foreign crude oils through three primary routes: (i) Canadian and US domestic crude from both Western Canada and North Dakota (Bakken) are transported eastward through the Enbridge mainline system (ii) foreign crude oils unloaded at the Louisiana Offshore Oil Port can be transported north via the Capline and Chicap pipelines and into the Enbridge (Lakehead) mainline system at Mokena, near Chicago, IL (iii) US domestic crude grades can be transported north via the Capline System and/or the Enbridge Mid-Continent (Ozark/Woodpat) system to Patoka, Illinois where they can be moved via the Chicap Pipeline into the Enbridge (Lakehead) Mainline system at Mokena, near Chicago, Illinois. We also receive US domestic crude (Bakken) and western Canadian crudes via rail deliveries into Hamburg, NY where these volumes are trans-loaded and moved by truck to West Seneca, NY and into the Kiantone Pipeline.

The Kiantone Pipeline connects our West Seneca, New York terminal at the pipeline’s northern terminus to the refinery’s tank farm at its southern terminus. We completed construction of the Kiantone Pipeline in 1971 and have operated it continuously since then. We are the sole shipper on the Kiantone Pipeline, and can currently transport up to 70,000 bpd along the pipeline. Our right to maintain the pipeline is derived from approximately 265 separate easements, right-of-way agreements, licenses, permits, leases and similar agreements.

The pipeline operation is monitored by operators using a recently upgraded Supervisory Control and Data Acquisition (“SCADA”) system. Shipments of crude arriving at the West Seneca terminal are separated and stored in one of the terminal’s three storage tanks, which have an aggregate storage capacity of 418,700 barrels. The refinery tank farm has three additional crude storage tanks with a total capacity of 483,000 barrels. An additional 35,000 barrels of crude can be stored at the refinery.

Refinery Turnarounds

Turnaround cycles vary for different refinery units. A planned turnaround of each of the two major refinery units (the crude unit and the FCC) is conducted approximately every three to five years, during which time such units are shut down for internal inspection and repair. The next turnaround cycle is planned for 2017.

We defer the cost of turnarounds when incurred and amortize them on a straight-line basis over the period of benefit, which ranges from 3 to 10 years (for tank turnarounds). Thus, we charge costs to production over the period most clearly benefited by the turnarounds.

The scheduled maintenance turnarounds result in an inventory build of petroleum products to meet minimum sales demand during the maintenance shutdown period.

6

Wholesale Marketing and Distribution

On a wholesale basis, our wholesale division sells gasoline, distillate and asphalt products to distributor, commercial and government accounts and we sell propane to liquefied petroleum gas marketers. Our wholesale gasoline customer base includes branded dealer/distributor units operating under our proprietary Keystone^® and Kwik Fill^® brand names and units operating under the Citgo^® brand pursuant to a license agreement granting us the right to use Citgo’s applicable brand names, trademarks and other forms of Citgo’s identification. Approximately 20% of the gasoline stations within this network are branded Citgo^®.

In fiscal 2015, we sold on a wholesale basis approximately 43,700 bpd of gasoline, distillate and asphalt products to distributor, commercial, and government accounts. In addition, we sell approximately 1,000 bpd of propane to liquefied petroleum gas marketers. In fiscal year 2015, our production of gasoline, distillate, and asphalt sold at wholesale was 34%, 84%, and 100%, respectively. We sell approximately 98% of our wholesale gasoline and distillate products from our refinery in Warren, Pennsylvania, and our Company-owned and operated product terminals. The remaining 2% are sold through third-party exchange terminals.

We use a network of six terminals to store and distribute refined products. This network provides distillate and asphalt storage capacities of approximately 1,225,000 barrels as of August 31, 2015. During fiscal 2015, approximately 85% of our refined products were transported from the refinery via truck transports, with the remaining 15% transported by rail. All gasoline product is stored at the refinery. The majority of our wholesale and retail gasoline distribution is handled by common carrier trucking companies at competitive rates. We also operate a fleet of eight tank trucks that supply approximately 22% of our Kwik Fill^® retail stations.

In fiscal 2015, our retail network sold approximately 66% of our gasoline production and approximately 16% of our distillate production. The remaining 34% of gasoline production and 84% of distillate production was sold to wholesale customers.

Long-term dealer/distributor contracts accounted for approximately 14% of our wholesale gasoline sales in fiscal 2015. Supply contracts generally range from three to five years in length, with branded prices based on our prevailing wholesale rack price in Warren. Our wholesale gasoline customer base includes 46 branded dealer/distributor units operating under our proprietary “Keystone^®” and “Kwik Fill^®” brand names.

We distribute asphalt from the refinery by railcar or truck transport to end user contractors, in addition to re-supplying our asphalt terminals. We own or lease terminals in Springdale and Dravosburg, Pennsylvania; Tonawanda and Oswego, New York; and Cordova, Alabama.

We believe that the location of our refinery provides us with a transportation cost advantage over our competitors, which is significant within an approximately 100-mile radius of our refinery. For example, in Buffalo, New York over our last five fiscal years, including fiscal 2015, we have experienced an approximately 3.11 cents per gallon transportation cost advantage over those competitors who are required to ship gasoline by pipeline and truck from New York Harbor sources to Buffalo.

Our ability to market asphalt is critical to the performance of our refinery. Crude oil scheduling and a consistent marketing effort enables the refinery to process lower cost higher sulfur content crude oils, which in turn affords us higher refining margins. Sales of paving asphalt generally occur during the period May 1 through October 31 based on weather conditions. In order to maximize our in season asphalt sales, we increase our asphalt storage capacity through the lease of outside terminals. Partially mitigating the seasonality of the asphalt paving business is our ability to sell asphalt year-round to roofing shingle manufacturers. In fiscal year 2015, we sold 7.1 million barrels of asphalt.

We have a significant share of the asphalt market in southwestern New York and western and central Pennsylvania as well as in the greater metro areas of Pittsburgh, Pennsylvania and Rochester and Buffalo,

7

New York. We distribute asphalt from the refinery by railcar and truck transport to our owned and leased asphalt terminals in such cities or their suburbs. Asphalt can be purchased or exchanged in the Gulf Coast area and delivered by barge to third party or Company-owned terminals near Pittsburgh.

Product distribution costs to both retail and wholesale accounts are minimized through product exchanges. Through these exchanges and purchasing third party barrels, we have access to product supplies at 17 sources located throughout our marketing area. We seek to minimize retail distribution costs through the use of a system wide distribution model.

Retail Operations

As of August 31, 2015, 167 of our retail units were located in New York, 175 in Pennsylvania and 12 in Ohio. The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names and grocery items under the Red Apple Food Mart^® and Country Fair^® brand names. We believe that Red Apple Food Mart^®, Kwik Fill^®, Country Fair^®, Keystone^® and Citgo^® are well-recognized names in our marketing areas. Approximately 20% of the gasoline stations within this network are branded Citgo^® pursuant to a license agreement granting us the right to use Citgo’s applicable brand names, trademarks and other forms of Citgo’s identification. In fiscal year 2015, approximately 66% of the refinery’s gasoline production was sold through our retail network. In addition to gasoline, many retail units sell diesel fuel and all units sell convenience and grocery items through convenience stores under the Red Apple Food Mart^® and Country Fair^® brand names. As of August 31, 2015, we operated 354 units, of which 190 units are owned, 104 units are leased, and the remaining stores are operated under a management agreement. 102 are Quick Serve Restaurants (“QSRs”) including franchise operations and eight of the units are full-service truck stops. Customers may pay for purchases with credit cards including our own Kwik Fill^® credit card. In addition to this credit card, we maintain a fleet credit card catering to regional truck and automobile fleets. Sales of convenience products, which tend to have constant margins throughout the year, have served to reduce the effects of the seasonality inherent in gasoline retail margins. We maintain a 58% / 42% split between sales at our rural and urban units, balancing the higher volumes and lower gross margins in urban areas. We believe that the Company’s operation of our retail units provides us with a significant advantage over competitors that operate wholly or partly through dealer arrangements because we have greater control over pricing and operating expenses.

Retail Marketing and Distribution

We classify our retail stores into four categories: convenience stores, limited gasoline stations, truck stop facilities, and other stores. Convenience stores sell a wide variety of foods, snacks, cigarettes and beverages and also provide self-service gasoline. 102 of our 354 retail outlets include QSRs where food is prepared on the premises for retail sales and also distribution to our other nearby units that do not have in-store delicatessens. Limited gasoline stations sell gasoline, cigarettes, oil and related car care products and provide full service for gasoline customers. Truckstop facilities sell gasoline and diesel fuel on a self-service and full-service basis. All truckstops include either a full or mini convenience store.

Total merchandise sales for fiscal year 2015 were $276.8 million, with a gross profit of approximately $71.4 million. Gross margins on the sale of convenience merchandise averaged 25.8% for fiscal 2015 and have been relatively constant at 25.4% for the last three years.

Merchandise Supply

Tripifoods, Buffalo, New York is our primary wholesale grocery supplier for our entire chain. During fiscal year 2015, we purchased approximately 79.1% of our convenience merchandise from this vendor. Tripifoods supplies us with products including tobacco, candy, deli, grocery, health and beauty products, and sundry items. We also purchase coffee, dairy products, beer, soda, snacks, and novelty goods from direct store vendors for resale. We annually review our suppliers’ costs and services versus those of alternate suppliers. We believe that alternative sources of merchandise supply at competitive prices are readily available.

8

Location Performance Tracking

We maintain a store tracking mechanism to collect operating data including sales and inventory levels for our retail network. Data transmissions are made using personal computers, which are available at each location. Once verified, the data interfaces with a variety of retail accounting systems, which support daily, weekly, and monthly performance reports. These different reports are then provided to both the field management and administrative personnel. Upon completion of a capital project, management tracks “before and after” performance, to evaluate the return on investment which has resulted from the improvements.

Environmental Regulations

General

We are subject to extensive federal, state and local laws and regulations relating to fuel quality, pollution control and protection of the environment, such as those governing releases of certain materials to the air and water and the storage, treatment, transportation, disposal and clean-up of wastes located on land. As with the industry in general, compliance with existing and anticipated environmental laws and regulations increases the overall cost of business, including capital costs to construct, maintain and upgrade equipment and facilities.

Gasoline, Diesel Fuel, and Heating Oil Manufacturing Standards

Mandatory fuel regulations will continue to affect our operations including renewable fuel obligations, and future sulfur reductions.

Starting January 1, 2013 the Company became an “obligated party” under the USEPA’s Renewable Fuel Standard (RFS) and is required to satisfy its Renewable Volume Obligation (“RVO”) on an annual basis. To meet the RVO, the Company’s fuels must either contain the approved renewable fuel components, or credits must be purchased to cover any shortfall. The Company has met it’s RVO for 2014 and expects to also satisfy the requirements for the calendar year 2015 without the purchase of credits, known as “RINs” (Renewable Identification Numbers). As the RFS program is currently structured, the RVO of all obligated parties will increase annually, while the ability to incorporate increasing volumes of renewable fuel components into fuel products remains limited. This phenomenon, better known as the “blend wall”, will be experienced throughout the industry and is expected to present challenges in future years. We will also continue to monitor proposals to amend the RFS to address the blend wall issue and evaluate its effect on future operations.

Effective July 1, 2012 the State of New York mandated that all heating oil sold in the state contain no more than 15 parts per million (ppm) sulfur. Pennsylvania has also lowered the sulfur content maximum starting July 1, 2016 from 5,000 ppm to 500 ppm. We are complying with the New York mandate and will comply with the Pennsylvania mandate starting next summer.

The USEPA has finalized the Tier 3 gasoline regulation which calls for a further reduction in the average yearly sulfur content below the existing Tier 2 sulfur standard. The regulations consist of reducing the refinery annual average maximum sulfur content from 30 ppm to 10 ppm. In the “Final Rule” there is a three year exemption for Small Volume Refineries, which would include the Company, giving us a 2020 effective date rather than 2017. A preliminary estimate to modify the refinery process to meet this new requirement is approximately $20 million.

Over the past four years we have maintained compliance with the benzene standard that is part of the Mobile Source Air Toxics Rule No. 2 (MSAT II). We expect to use previously purchased 2013 vintage benzene credits for the 2015 compliance year. Benzene credits are valid for five years.

We are also monitoring closely all climate change and Greenhouse Gas (“GHG”) legislation. We believe, however, that implementation of reasonable, incremental changes over time will not have a material adverse

9

effect on the Company’s consolidated financial position or operations. GHG reduction mandates and their effect on our business are, however, unknown until all aspects of the programs are final and implementing regulations are available.

Retail Gasoline Stations

We currently operate gasoline stations in three states with underground petroleum product storage tanks and in the past have operated gasoline stations that are now closed. Federal and state statutes and regulations govern the installation, operation and removal from service of these underground storage tanks and associated piping and product dispensing systems. The operation of underground storage tanks and systems carries the risk of contamination to soil and groundwater with petroleum products. We manage this risk by promptly responding to actual and suspected leaks and spills and implementing remedial action plans meeting regulatory requirements. In addition to prompt response and remediation, we receive reimbursement for response costs associated with leaks and spills in the Commonwealth of Pennsylvania through the Underground Storage Tank Indemnification Fund.

Competition

Our primary market area is western New York and northwestern Pennsylvania and our core market area encompasses our Warren County base and the eight contiguous counties in New York and Pennsylvania. The principal competitive factors affecting our wholesale marketing business are the price and quality of our products, as well as the reliability and availability of supply and the location of multiple distribution points.

Petroleum refining is highly competitive. With respect to wholesale gasoline and distillate sales, we compete with P.E.S., P.B.F., Valero, Exxon-Mobil, and other refiners and marketers via the pipeline system. We primarily compete with Marathon Petroleum in the asphalt market, both in New York and Pennsylvania. Many of our principal competitors are integrated multinational oil companies that are substantially larger and better known than us. Because of their diversity, integration of operations, larger capitalization and greater resources, these major oil companies may be better able to withstand volatile market conditions, compete on the basis of price and more readily obtain crude oil in times of shortages.

The principal competitive factors affecting our refining operations are crude oil and other feedstock costs, refinery efficiency, refinery product mix and product distribution and transportation costs. Certain of our larger competitors have refineries, which are larger and more complex and, as a result, could have lower per barrel costs or higher margins per barrel of throughput. We have no crude oil reserves and are not engaged in exploration. We believe that we will continue to be able to obtain adequate crude oil and other feedstocks at generally competitive prices for the foreseeable future.

It is our view that the high construction costs and the stringent regulatory requirements inherent in petroleum refinery operations make it uneconomical for new competing refineries to be constructed in our primary market area. The nearest fuels refinery is over 160 miles from Warren, Pennsylvania and we believe that no significant production from such refinery is currently shipped into our primary market area. In addition, four refineries in PADD I were forced to shut down during the recent economic downturn. We believe this capacity rationalization should improve overall utilization by remaining refineries in PADD I, including us, and result in improved margins as demand improves.

The principal competitive factors affecting our retail marketing network are location, product price, overall appearance and cleanliness of stores and brand identification. Competition from large, integrated oil companies, supermarkets, and “big box” convenience store chains such as Wal-Mart and Sam’s Club, is expected to be ongoing. The principal competitive factors affecting our wholesale marketing business are the price and quality of our products, as well as the reliability and availability of supply and the location of multiple distribution points.

10

Employees

As of August 31, 2015, we had approximately 4,089 employees; 1,905 full-time and 2,184 part-time employees. Approximately 3,526 persons were employed at our retail units, 355 persons at our refinery, Kiantone Pipeline and at terminals operated by us, with the remainder at our office in Warren, Pennsylvania. We have entered into collective bargaining agreements with International Union of Operating Engineers Local No. 95, United Steel Workers of America Local No. 2122-A and General Teamsters Local Union No. 397 covering 248, 6, and 22 employees, respectively. The agreements expire on February 1, 2017, January 31, 2017 and July 31, 2018, respectively. We believe that our relationship with our employees is good.

Intellectual Property

We own various federal and state service and trademarks used by us, including Kwik Fill^®, United^®, Country Fair^®, SuperKwik^®, Keystone^®, SubFare^® and PizzaFare^®. Our subsidiary, Country Fair, and we have licensing agreements with Citgo Petroleum Corporation (“Citgo”) for the right to use Citgo’s applicable brand names, trademarks and other forms of Citgo’s identification for petroleum products purchased under a distributor franchise agreement.

We have obtained the right to use the Red Apple Food Mart^® service mark to identify our retail units under a royalty-free, nonexclusive, nontransferable license from Red Apple Supermarkets, Inc., a corporation which is indirectly wholly owned by John A. Catsimatidis, the indirect sole stockholder, Chairman of the Board and Chief Executive Officer of the Company. The license is for an indefinite term. The licensor has the right to terminate this license in the event that we fail to maintain quality acceptable to the licensor. We license the right to use the Keystone^® trademark to approximately 38 independent distributors on a non-exclusive royalty-free basis.

We currently do not own any material patents. Management believes that the Company does not infringe upon the patent rights of others, nor does our lack of patent ownership impact our business in any material manner.

Governmental Approvals

We believe we have obtained all necessary governmental approvals, licenses, and permits to operate the refinery and convenience stores.

Enbridge Agreements

On July 31, 2014, URC and Kiantone Pipeline Corporation (together the “Company Parties”), on the one hand, and Enbridge Energy Limited Partnership (“EEPL”) and Enbridge Pipelines Inc. (“EPI” and, together with EEPL, the “Carriers”), on the other hand, entered into a letter agreement (the “Letter Agreement”) with respect to approximately 88.85 miles of pipeline owned by the Carriers, which transports crude oil from Canada to the Company’s Kiantone Pipeline in West Seneca, New York and serves the Company’s refinery in Warren, Pennsylvania (“Line 10”).

Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10 (the “Integrity Costs”), which aggregate $36 million for the calendar year 2014, which was paid August 14, 2014. Pursuant to the Letter Agreement the Carriers agreed to reconcile their actual expenses for the integrity maintenance and refund any excess payments made by the Company. The parties agreed to apply any credit to the Company as a result of such reconciliation to amounts owed by the Company for Subsequent Year Pipe Replacement Costs (as defined below). For each subsequent calendar year through the earlier of the expiration or closing of the purchase rights granted to the Company pursuant to the Put and Call Agreement, the Carriers will provide the Company with an invoice for the Integrity Costs for such calendar year (“Subsequent Year Integrity Costs”). The Carriers’ actual expenses with respect to the integrity maintenance and pipe replacement will be reconciled against the Subsequent Year Integrity and Pipe Replacement Costs similarly to the reconciliation for calendar year 2014.

11

In addition, the Company agreed to pay for half the cost of replacing certain portions of Line 10 in accordance with a plan agreed to between the Company Parties and the Carriers. The Company will pay 50% of the estimated expenses of the replacement project for each segment of Line 10 to be replaced (the “Replacement Costs”) within 30 days of its receipt of an invoice for the same, along with a project management fee of 2 ¹/₄%. Each Carrier will initially fund the remaining 50% of the Replacement Costs during construction, provided that the Company will reimburse the Carriers for their actual cost of funds during the construction process. Once construction is complete and each replaced segment of Line 10 is put into service, and assuming the Company has not exercised its rights to purchase Line 10 pursuant to the Put and Call Agreement (as defined and discussed below), the Company will repay the Carriers the 50% of the Replacement Costs they funded over a 10 year period.

On November 12, 2015, pursuant to the Letter Agreement, the Company made a payment to the Carriers in the amount of $60,700,000 for Subsequent Year Pipe Replacement Costs, which amount reflects credits received by the Company upon reconciliation of the Integrity Costs funded in fiscal 2014. Kiantone, as the owner of the Kiantone Pipeline, has agreed to guaranty any and all payments due by the Company pursuant to the Letter Agreement.

Pursuant to the Letter Agreement, the Company and the Carriers agreed to negotiate the terms and conditions of a put and call option agreement for Line 10 (the “Put and Call Option Agreement” and, together with the Letter Agreement, the “Enbridge Agreement”). On April 8, 2015 (the “Execution Date”), the Company entered into the Put and Call Option Agreement with the Carriers as called for in the Letter Agreement. The Put and Call Option Agreement entered into with Enbridge LP (the “U.S. Agreement”) is substantially similar to the Put and Call Option Agreement entered into with Enbridge Inc. (the “Canadian Agreement” and, together with the U.S. Agreement, the “Put and Call Agreement”). The Carriers own Line 10, including real property interests through and under which Line 10 passes, the Carriers’ assignable permits related to the ownership and operation of Line 10, as well as personal property, contract rights, records and incidental rights held solely in connection with Line 10 (collectively, the “Assets”). Pursuant to the Put and Call Agreement, the Carriers granted the Company a right (the “Call Option”) to purchase all of the Assets and the Company granted the Carriers the right to put all the Assets to the Company (the “Put Option” and, together with the Call Option, the “Purchase Options”) subject to the terms and conditions of the Put and Call Agreement.

The Carrier’s Put Option is exercisable beginning on the date that is the earlier of (a) January 1, 2026 and (b) the date that is 30 days after the latest of (i) the date on which the Carriers give notice that the Line 10 replacement work performed pursuant to the Letter Agreement is sufficiently completed (as contemplated in the Call and Put Agreement) and (ii) the ninth (9th) anniversary of the Execution Date (the “Put Option Commencement Date”). The Put Option terminates on the date that is 24 months after either (a) the Put Option Commencement Date if such date is the first of a month or (b) the first day of the calendar month immediately following the Put Option Commencement Date if it is not the first day of the month (the “Put/Call Option Expiry Date”). The Company’s Call Option is exercisable at any time beginning on the Execution Date and ending on the Put/Call Option Expiry Date.

The purchase price of the Assets (the “Purchase Price”) shall be calculated as follows: the sum of (a) 70% of the book value of the Assets as of July 31, 2014 minus annual depreciation, (b) 100% of total replacement costs for any segment replacements on the Pipeline commenced by the Carrier, whether completed or ongoing on the date of Asset sale is consummated (the “Closing Date”), minus any of such expenses paid by the Company and (c) 100% of the total regulatory requirements costs for any regulatory work commenced by the Carrier, whether completed or ongoing at the Closing Date, minus any of such expenses paid by the Company. The Purchase Price shall be subject to adjustment pursuant to the Put and Call Agreement with respect to certain work ongoing at the Closing Date.

12

Among other customary conditions to closing, Carrier’s obligation to close the sale of the Assets is conditioned on the Company’s payment of all obligations outstanding pursuant to the Put and Call Agreement and the Letter Agreement. In addition, the sale of Assets pursuant to the U.S. Agreement shall close concurrently with the sale of the Assets pursuant to the Canadian Agreement.

The Company and the Carrier agreed that certain work must be undertaken in order to carve out portions of Line 10 in Canada from the Enbridge mainline system and allow it to operate independently. In the event any work is required to similarly separate the U.S. portion of Line 10 from the Enbridge mainline system (the “Carve-Out Work”), a plan to perform such Carve-Out Work that would result in expenses greater than $38.5 million will require the approval of the Company.

In the event any of the maintenance, regulatory requirement, or replacement work contemplated in the Letter Agreement or the Put and Call Agreement (collectively, the “Work”) is outstanding at the Closing Date, concurrently with the closing of the Asset sale, the Company and the Carriers will enter into an operating agreement (the “Operating Agreement”) pursuant to which the Carriers will provide certain operational and administrative services (the “Services”) while the Work is ongoing and complete such Work. As payment for the Services and completion of the Work, the Carriers shall be: (i) reimbursed for all expenses of providing the Services, (ii) paid a fixed fee of on an annual basis, which shall be subject to a 2% increase for each successive year following the first year of the Operating Agreement, and (ii) paid for all expenses of the Work not previously paid, as well as a 2.25% construction management fee.

The Put and Call Agreement may be terminated by the mutual consent of the Company and the Carriers and shall automatically terminate if neither Purchase Option is exercised prior to the Put/Call Option Expiry Date. Moreover, either the Company or a Carrier may terminate the Put and Call Agreement if a closing of the Asset sale shall not have occurred on or before December 31, 2028 assuming the terminating party is not then in breach of the Put and Call Agreement and if a party has breached a representation, such breach has not been cured within the time periods allotted by the Put and Call Agreement. Finally, the Company may terminate the Put and Call Agreement by notifying the Carriers to cease the replacement work contemplated in the Letter Agreement. The Company has assessed the accounting impact of the Put and Call Agreement and determined there is no impact until the time when it becomes probable that the Put or Call will be exercised.

Financing

On October 20, 2015 (the “Closing Date”), URC, United Refining Company of Pennsylvania, Kiantone Pipeline Corporation (“Kiantone”), United Refining Company of New York Inc., United Biofuels, Inc., Country Fair, Inc. and Kwik-Fill Corporation (collectively, the “Borrowers”) entered into an Amended, Restated and Consolidated Revolving Credit, Term Loan and Security Agreement (“Credit Agreement”) with a group of lenders led by PNC Bank, National Association, as Administrative Agent (the “Agent”), and PNC Capital Markets LLC, as Sole Lead Arranger and Bookrunner. The Credit Agreement amends and restates the Amended and Restated Credit Agreement, dated May 18, 2011 and last amended June 18, 2013, by and between the Company and certain subsidiaries and PNC Bank, National Association, as Administrative Agent (the “Existing Credit Facility”). The Credit Agreement will terminate on October 19, 2020 (the “Expiration Date”). Until the Expiration Date, the Company may borrow on the New Revolving Credit Facility (as defined below) on a borrowing base formula set forth in the Credit Agreement.

Pursuant to the Credit Agreement, the Company increased its existing senior secured revolving credit facility from $175,000,000 to $225,000,000 (the “New Revolving Credit Facility”). The New Revolving Credit Facility may be increased by an amount not to exceed $50,000,000 without additional approval from the lenders named in the Credit Agreement if existing lenders agree to increase their commitments or additional lenders commit to fund such increase. In addition, pursuant to the Credit Agreement, the Company entered into a term loan in the amount of $250,000,000, which was made in a single drawing on the Closing Date (“Term Loan” and, together with the New Revolving Credit Facility, the “Credit Obligations”). The Term Loan shall be paid in full

13

on or prior to the Expiration Date and shall be paid in equal quarterly amounts based on a ten-year straight line amortization schedule. Prepayment of the Term Loan in whole or in part may be made at any time without premium or penalty.

The Credit Obligations are secured by a first priority security interest in certain cash accounts, accounts receivable, inventory, the refinery, including a related tank farm, and the capital stock of Kiantone. At such time as the Term Loan is repaid in full, and provided no event of default exists, the security interest in the refinery and the equity interests in Kiantone shall be released.

The Credit Agreement requires minimum undrawn availability of $15,000,000 at all times prior to the repayment of the Term Loan and the greater of 12.5% of the maximum New Revolving Credit Facility or $25,000,000 after the repayment of the Term Loan. Upon the repayment of the Term Loan, the Company is required to maintain a consolidated net worth of no less than $100,000,000. The Credit Agreement includes customary mandatory prepayment provisions, including in connection with non-ordinary course asset sales, equity issuances and the incurrence of additional debt. Unless assets sold in non-ordinary course transactions were included in the borrowing base for the New Revolving Credit Facility, mandatory prepayments shall be applied first to the repayment of the Term Loan and then the New Revolving Credit Facility. The Credit Agreement also includes customary affirmative and negative covenants, including, among other things, covenants related to the fixed charge coverage ratio, payment of fees, conduct of business, maintenance of existence and assets, payment of indebtedness and the incurrence of additional indebtedness, intercompany obligations, affiliate transactions, amendments to organizational documents, and financial statements.

The proceeds of the Credit Agreement will be used to (i) refinance the Company’s existing senior debt under the Existing Credit Facility (ii) repay and satisfy in full those certain 10.500% senior secured notes due 2018 (the “Senior Secured Notes due 2018”), (iii) provide for the Company’s general corporate needs, including working capital requirements and capital expenditures and (iv) pay the fees and expenses associated with the Credit Agreement.

On October 6, 2015, the Company announced the commencement of a tender offer (the “Tender Offer”) to purchase for cash any and all of the outstanding $237.25 million aggregate principal amount outstanding of the Senior Secured Notes due 2018 and a solicitation of consents for proposed amendments to the related indenture (the “Consent Solicitation”). The Tender Offer and Consent Solicitation was made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated October 6, 2015 and related consent and letter of transmittal. The Tender Offer was set to expire on November 2, 2015 (the “Expiration Date”). Holders of Senior Secured Notes due 2018 that validly tendered prior to 5:00 p.m., New York City time, on October 19, 2015 (the “consent deadline”), would receive total consideration of $1,057.50 per $1,000.00 principal amount of Senior Secured Notes due 2018, plus accrued and unpaid interest, which included a consent payment of $30.00. Holders that tender after the consent deadline and prior to the Expiration Date would receive total consideration of $1,027.50 per $1,000.00 principal amount, plus accrued and unpaid interest.

On October 20, 2015, the Company announced that $217,871,000 aggregate principal amount, or 91.83% of the Senior Secured Notes due 2018, were validly tendered prior to the consent deadline. The Company also received the requisite consents for the proposed amendments to eliminate most of the covenants applicable to the Senior Secured Notes due 2018, including the release of the collateral securing the Notes. The remaining 8.17% of the Senior Secured Notes due 2018 or $19,379,000, were fully redeemed at a redemption price of 105.25% of par value plus accrued interest of $452,177 on November 19, 2015.

14

ITEM 1A. RISK FACTORS.

Risks Relating to the Business

The price volatility of crude oil, other feedstocks, refined petroleum products and fuel and utility services may have a material adverse effect on our earnings, cash flows and liquidity.

Our refining earnings, cash flows and liquidity from operations depend primarily on the margin above operating expenses (including the cost of refinery feedstocks, such as crude oil and natural gas liquids that are processed and blended into refined products) at which we are able to sell refined products. Refining is primarily a margin-based business and, to increase earnings, it is important to maximize the yields of high value finished products while minimizing the costs of feedstock and operating expenses. When the margin between refined product prices and crude oil and other feedstock costs contracts, our earnings, and cash flows are negatively affected. Refining margins historically have been volatile, and are likely to continue to be volatile, as a result of a variety of factors, including fluctuations in the prices of crude oil, other feedstocks, refined products and fuel and utility services. While an increase or decrease in the price of crude oil may result in a similar increase or decrease in prices for refined products, there may be a time lag in the realization of the similar increase or decrease in prices for refined products. The effect of changes in crude oil prices on our refining margins therefore depends in part on how quickly and how fully refined product prices adjust to reflect these changes.

In addition, the nature of our business requires us to maintain substantial refined product inventories. Because refined products are commodities, we have no control over the changing market value of these inventories. Our refined product inventory is valued at the lower of cost or market value under the last-in, first-out (“LIFO”), inventory valuation methodology. If the market value of our refined product inventory were to decline to an amount less than our LIFO cost, we would record a write-down of inventory and a non-cash charge to cost of sales.

Prices of crude oil, other feedstocks and refined products depend on numerous factors beyond our control, including the supply of and demand for crude oil, other feedstocks, gasoline, diesel, asphalt and other refined products. Such supply and demand are affected by, among other things:

• changes in global and local economic conditions;

• domestic and foreign demand for fuel products, especially in the United States, China and India;

• worldwide political conditions, particularly in significant oil producing regions such as the Middle East, West Africa and Latin America;

• the level of foreign and domestic production of crude oil and refined products and the volume of crude oil, feedstock and refined products imported into the United States;

• availability of and access to transportation infrastructure;

• utilization rates of U.S. refineries;

• the ability of the members of the Organization of Petroleum Exporting Countries (“OPEC”) to affect oil prices and maintain production controls;

• development and marketing of alternative and competing fuels;

• commodities speculation;

• natural disasters (such as hurricanes and tornadoes), accidents, interruptions in transportation, inclement weather or other events that can cause unscheduled shutdowns or otherwise adversely affect our refinery;

• federal and state government regulations and taxes; and

• local factors, including market conditions, weather conditions and the level of operations of other refineries and pipelines in our markets.

15

Our direct operating expense structure also impacts our earnings. Our major direct operating expenses include employee and contract labor, maintenance and energy costs. Our predominant variable direct operating cost is energy, which is comprised primarily of fuel and other utility services. The volatility in costs of fuel, principally natural gas, and other utility services, principally electricity, used by our refinery and other operations affect our operating costs. Fuel and utility prices have been, and will continue to be, affected by factors outside our control, such as supply and demand for fuel and utility services in both local and regional markets. Natural gas prices have historically been volatile and, typically, electricity prices fluctuate with natural gas prices. Future increases in fuel and utility prices may have a negative effect on our earnings and cash flows.

Volatility in refined product prices also affects our borrowing base under our revolving credit facility. A decline in prices of our refined products reduces the value of our refined product inventory collateral, which, in turn, may reduce the amount available for us to borrow under our revolving credit facility.

Our results of operations are affected by crude oil differentials, which may fluctuate substantially.

Our results of operations are affected by crude oil differentials, which may fluctuate substantially. Since 2010, refined product prices have been more correlated to prices of Brent crude oil (“Brent”) than to NYMEX WTI, the traditional U.S. crude oil benchmark, as the discount to which a barrel of NYMEX WTI traded relative to a barrel of Brent has widened significantly relative to historical levels. This differential has also been very volatile as a result of various continuing geopolitical events.

We are subject to interruptions of supply and distribution as a result of our reliance on pipelines for our supply of crude oil. Prolonged disruption to the Enbridge Pipeline or the Kiantone Pipeline may have a material adverse effect on our business, results of operations or financial condition.

Our refinery receives substantially all of its crude oil through pipelines. We could experience an interruption of supply, or an increased cost of receiving crude oil, if the ability of these pipelines to transport crude oil or blendstocks is disrupted because of accidents, weather interruptions, governmental regulation, terrorism, other third party action or any of the types of events described in the preceding risk factor.

We obtain substantially all of our crude oil supply through pipelines owned and operated by Enbridge Energy Partners (“Enbridge Pipeline”), and the Kiantone Pipeline, which we own and operate. Any prolonged disruption to the operations of our refinery, the Enbridge Pipeline or the Kiantone Pipeline, whether due to labor difficulties, destruction of or damage to such facilities, severe weather conditions, interruption of utilities service or other reasons, or our default under the Enbridge Agreement, would have a material adverse effect on our business, results of operations or financial condition. Further, our property and business interruption insurance may not compensate us adequately for any losses that occur.

In addition, due to the common carrier regulatory obligation applicable to interstate oil pipelines, capacity must be prorated among shippers in an equitable manner in accordance with the tariff then in effect in the event there are nominations in excess of capacity. Therefore, nominations by new shippers or increased nominations by existing shippers may reduce the capacity available to us with respect to the Enbridge Pipeline system. Any prolonged interruption in the operation or curtailment of available capacity of the pipelines that we rely upon for transportation of crude oil could have a material adverse effect on our business, financial condition, results of operations and cash flows and, as a result, our ability to make distributions (See Item 7, Recent Developments).

The dangers inherent in our operations could cause disruptions and could expose us to potentially significant losses, costs or liabilities and reduce our liquidity. We are particularly vulnerable to disruptions in our operations because all of our refining operations are conducted at a single facility.

Our operations are subject to significant hazards and risks inherent in refining operations and in transporting and storing crude oil, intermediate products and refined products. These hazards and risks include, but are not

16

limited to, natural disasters, fires, explosions, pipeline ruptures and spills, third party interference and mechanical failure of equipment at our facilities, any of which could result in production and distribution difficulties and disruptions, pollution (such as oil spills, etc.), personal injury or wrongful death claims and other damage to our properties and the property of others.

There is also risk of mechanical failure and equipment shutdowns both in the normal course of operations and following unforeseen events. In such situations, undamaged refinery processing units may be dependent on, or interact with, damaged process units and, accordingly, are also subject to being shut down.

Because all of our refining operations are conducted at a single refinery, any of such events at our refinery could significantly disrupt our production and distribution of refined products. Any sustained disruption would have a material adverse effect on our business, financial condition, results of operations and cash flows and, as a result, our ability to make distributions.

Our suppliers source substantially all of our crude oil from Canada and the northern plain states and may experience interruptions of supply from those regions.

Our suppliers source substantially all of our crude oil from Canada and the northern plain states. As a result, we may be disproportionately exposed to the impact of delays or interruptions of supply from those regions caused by transportation capacity constraints, curtailment of production, unavailability of equipment, facilities, personnel or services, significant governmental regulation, natural disasters, adverse weather conditions, plant closures for scheduled maintenance or interruption of transportation of oil or natural gas produced from the wells in those areas.

Competition from companies having greater financial and other resources than we do could materially and adversely affect our business and results of operations.

Our refining operations compete with domestic refiners and marketers in the PADD I region of the United States, as well as with domestic refiners in other PADD regions and foreign refiners that import products into the United States. In addition, we compete with producers and marketers in other industries that supply alternative forms of energy and fuels to satisfy the requirements of our industrial, commercial and individual customers. Certain of our competitors have larger, more complex refineries, and may be able to realize lower per-barrel costs or higher margins per barrel of throughput. Several of our principal competitors are integrated national or international oil companies that are larger and have substantially greater resources than we do and have access to proprietary sources of controlled crude oil production. Unlike these competitors, we obtain substantially all of our feedstocks from unaffiliated sources. Because of their integrated operations and larger capitalization, these companies may be more flexible in responding to volatile industry or market conditions, such as shortages of crude oil supply and other feedstocks or intense price fluctuations.

Newer or upgraded refineries will often be more efficient than our refinery, which may put us at a competitive disadvantage. While we have taken significant measures to maintain and upgrade units in our refinery by installing new equipment and repairing equipment to improve our operations, these actions involve significant uncertainties, since upgraded equipment may not perform at expected throughput levels, the yield and product quality of new equipment may differ from design specifications and modifications may be needed to correct equipment that does not perform as expected. Any of these risks associated with new equipment, redesigned older equipment or repaired equipment could lead to lower revenues or higher costs or otherwise have an adverse effect on future results of operations and financial condition and our ability to make distributions. Over time, our refinery may become obsolete, or be unable to compete, because of the construction of new, more efficient facilities by our competitors.

17

We may incur significant liability under, or costs and capital expenditures to comply with, environmental, health and safety regulations, which are complex and change frequently.

Our refinery and pipelines operations are subject to federal, state and local laws regulating, among other things, the generation, storage, handling, use, treatment and transportation of petroleum and hazardous substances, the emission and discharge of materials into the environment, waste management, characteristics and composition of gasoline and diesel and other matters otherwise relating to the protection of the environment. Our operations are also subject to various laws and regulations relating to occupational health and safety. Compliance with the complex array of federal, state and local laws relating to the protection of the environment, health and safety is difficult and likely will require us to make significant expenditures. Moreover, our business is inherently subject to accidental spills, discharges or other releases of petroleum or hazardous substances into the environment including at neighboring areas or third party storage, treatment or disposal facilities. Certain environmental laws impose joint and several liabilities without regard to fault or the legality of the original conduct in connection with the investigation and cleanup of such spills, discharges or releases. As such, we may be required to pay more than our fair share of such investigation or cleanup. We may not be able to operate in compliance with all applicable environmental, health and safety laws, regulations and permits at all times. Violations of applicable legal or regulatory requirements could result in substantial fines, criminal sanctions, permit revocations, injunctions and/or facility shutdowns. We may also be required to make significant capital expenditures or incur increased operating costs or change operations to achieve compliance with applicable standards.

We cannot predict what additional environmental, health and safety legislation or regulations will be enacted or become effective in the future or how existing or future laws or regulations will be administered or interpreted with respect to our operations. Many of these laws and regulations are becoming increasingly stringent, and the cost of compliance with these requirements can be expected to increase over time. For example, on June 1, 2012, the U.S. Environmental Protection Agency (“EPA”) issued final amendments to the New Source Performance Standards (“NSPS”) for petroleum refineries, including standards for emissions of nitrogen oxides from process heaters and work practice standards and monitoring requirements for flares. We are evaluating the regulation and amended standards, as may be applicable to the flare, process heaters and operations at our refinery. We cannot currently predict the costs that we may have to incur, if any, to comply with the amended NSPS, but costs could be material. In addition, the EPA has announced new “Tier 3” motor vehicle emission and fuel standards. These regulations lower the maximum average sulfur content of gasoline from 30 parts per million to 10 parts per million. We may at some point in the future be required to make significant capital expenditures and/or incur materially increased operating costs to comply with the new standards. Expenditures or costs for environmental, health and safety compliance could have a material adverse effect on our results of operations, financial condition and profitability and, as a result, our ability to make distributions.

Compliance with and changes in tax laws could adversely affect our performance.

We are subject to extensive tax liabilities, including federal, state and transactional taxes such as excise, sales/use, payroll, franchise, withholding and ad valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted or proposed that could result in increased expenditures for tax liabilities in the future. There can be no certainty of the effect that increases in taxes, or imposition of new taxes, could have on us, or whether such taxes would be passed on to our customers. Certain of these liabilities are subject to periodic audits by the respective taxing authority, which could increase our tax liabilities. Subsequent changes to our tax liabilities as a result of these audits may also subject us to interest and penalties.

18

A decrease in government funding for paving activity could lead to a decrease in demand for asphalt, which could materially adversely affect refining margins.

In fiscal 2015, asphalt sales represented 18% of our total revenues. Over the same period, approximately 90% of our asphalt was produced for use in paving or repaving roads and highways. The level of paving activity is, in turn, dependent upon funding available from federal, state and local governments. Funding for paving has been affected in the past, and may be affected in the future, by budget difficulties at the federal, state or local levels. A decrease in demand for asphalt could cause us to sell asphalt at significantly lower prices or to curtail production of asphalt by processing more costly lower sulfur content crude oil which would adversely affect refining margins.

We have an indirect controlling stockholder.

John A. Catsimatidis indirectly owns all of our outstanding voting stock. By virtue of such stock ownership, Mr. Catsimatidis has the power to control all matters submitted to our stockholder and to elect all of our directors.

Our pension plans are currently underfunded.

Substantially all of our employees are covered by three noncontributory defined benefit pension plans. As of August 31, 2015, as measured under ASC 715 (which is not the same as the measure used for purposes of calculating required contributions and potential liability to the Pension Benefit Guaranty Corporation, or PBGC), the aggregate accumulated benefit obligation under our pension plans was approximately $124.5 million and the value of the assets of the plans was approximately $88.6 million. In fiscal 2015, we contributed $4.4 million to the three plans, and we have made additional contributions to our pension plans of $.7 million in fiscal year 2016. If the performance of the assets in our pension plans does not meet our expectations or if other actuarial assumptions are modified, our contributions for future years could be higher than we expect.

Our pension plans are subject to the Employee Retirement Income Security Act of 1974, or ERISA. Under ERISA, the PBGC generally has the authority to terminate an underfunded pension plan if the possible long-run loss of the PBGC with respect to the plan may reasonably be expected to increase unreasonably if the plan is not terminated. In the event our pension plans are terminated for any reason while the plans are underfunded, we will incur a liability to the PBGC that may be equal to the entire amount of the underfunding.

The Credit Agreement contains certain covenants that may inhibit our ability to make certain investments, incur certain additional indebtedness and engage in certain other transactions, which could adversely affect our ability to pursue our business strategies.

The Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability, among other things, to:

• incur, assume or guarantee additional debt or issue redeemable stock or preferred stock;

• make distributions or prepay, redeem, or repurchase certain debt;

• enter into agreements that restrict distributions from restricted subsidiaries;

• incur liens;

• sell or otherwise dispose of assets, including capital stock of subsidiaries;

• enter into new lines of business;

• enter into transactions with affiliates; and

• merge, consolidate or sell substantially all of our assets.

19

A breach of the covenants under the Credit Agreement could result in an event of default under the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the Credit Agreement would permit the lenders under our revolving credit facility to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under our Credit Agreement, those creditors could proceed against the collateral granted to them to secure that indebtedness, including the refinery.

In the event our lenders or noteholders accelerate the repayment of our borrowings, we may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:

• limited in how we conduct our business;

• unable to raise additional debt or equity financing to operate during general economic or business downturns; or

• unable to compete effectively or to take advantage of new business opportunities.

The Credit Agreement is secured by certain assets of the Company, including the Refinery, and a foreclosure on such liens could adversely affect our business.

The Credit Agreement is secured by substantially all of our assets, including a pledge of the stock of our subsidiary Kiantone Pipeline Corporation and a mortgage lien on and a security interest in the assets comprising the refinery. In case of a continuing event of default by the Company, the collateral agent may exercise all rights of a mortgagee and/or secured party under applicable law, including, without limitation, transferring to itself or a nominee title to such collateral, which could adversely affect our business.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not Applicable.

ITEM 2. PROPERTIES.

We own a 107-acre site in Warren, Pennsylvania upon which we operate our refinery. The site also contains an office building housing our principal executive office.

We own various real property in the states of Pennsylvania, New York, Ohio, and Alabama, upon which, as of August 31, 2015, we operated 190 retail units and two crude oil and six refined product storage terminals. We also own the 78-mile long Kiantone Pipeline, a pipeline which connects our crude oil storage terminal to the refinery’s tank farm. Our right to maintain the pipeline is derived from approximately 265 separate easements, right-of-way agreements, leases, permits, and similar agreements. We also have easements, right-of-way agreements, leases, permits, and similar agreements that would enable us to build a second pipeline on property contiguous to the Kiantone Pipeline. We also own a partially completed 50 million gallon per year biodiesel facility in Brooklyn, New York.

As of August 31, 2015, we also lease an aggregate of 163 sites in Pennsylvania, New York, and Ohio upon which we operate retail units.

ITEM 3. LEGAL PROCEEDINGS.

The Company and its subsidiaries are from time to time parties to various legal proceedings that arise in the ordinary course of their respective business operations. These proceedings include various administrative actions relating to federal, state and local environmental laws and regulations as well as civil matters before various courts seeking money damages. The Company believes that if the legal proceedings in which it is currently

20

involved were determined against the Company, there would be no material adverse effect on the Company’s operations or its consolidated financial condition. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated operations or financial position of the Company.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

None.

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth certain historical financial and operating data (the “Selected Information”) as of the end of and for each of the years in the five-year period ended August 31, 2015. The selected income statement, balance sheet, financial and ratio data as of and for each of the five-years ended August 31, 2015 has been derived from our audited consolidated financial statements. The operating information for all periods presented has been derived from our accounting and financial records. The Selected Information set forth below should be read in conjunction with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our Consolidated Financial Statements and Notes thereto in Item 8 and other financial information included elsewhere herein.

	Year Ended August 31,
	2015			2014			2013			2012			2011
	(in thousands)
Income Statement Data:
Net sales	$	2,716,719		$	3,439,218		$	3,681,253		$	3,730,925		$	3,166,876
Refining operating expenses (1)		113,569			117,104			119,549			103,001			106,715
Selling, general and administrative expenses		165,089			162,764			163,874			157,581			149,456
Operating income		158,045			144,177			328,608			358,350			33,332
Interest expense		26,802			26,677			39,530			40,913			40,567
Interest income		154			336			495			44			17
Other, net		(3,869	)		(2,897	)		(3,819	)		(4,711	)		(2,564	)
Loss on early extinguishment of debt		—			—			(18,727	)		—			(1,245	)
Income (Loss) before income tax expense (benefit)		127,528			114,939			267,027			312,770			(11,027	)
Income tax expense (benefit)		45,477			43,826			98,344			121,954			(3,619	)
Net income (loss)		82,051			71,113			168,683			190,816			(7,408	)
Less net income attributable to non-controlling interest		—			—			—			—			711
Net income (loss) attributable to United Refining Company’s stockholder		82,051			71,113			168,683			190,816			(8,119	)
Balance Sheet Data (at end of period):
Total assets		885,466			870,464			796,295			728,330			670,611
Total debt		240,667			239,525			238,706			359,996			381,087
Total stockholder’s equity		417,742			384,225			357,203			141,276			20,753

(1) Refinery operating expenses include refinery fuel produced and consumed in refinery operations.

21

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

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

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

Although we believe our expectations are based on reasonable assumptions within the bounds of its knowledge, investors and prospective investors are cautioned that such statements are only projections and that actual events or results may differ materially depending on a variety of factors described in greater detail in the Company’s filings with the SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, etc. In addition to the factors discussed elsewhere in this Annual Report 10-K, the Company’s actual consolidated quarterly or annual operating results have been affected in the past, or could be affected in the future, by additional factors, including, without limitation:

• general economic, business and market conditions;

• repayment of debt;

• the effect of the current banking and credit crisis on the Company and our customers and suppliers;

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

• the demand for and supply of crude oil and refined products;

• the spread between market prices for refined products and market prices for crude oil;

• the possibility of inefficiencies or shutdowns in refinery operations or pipelines;

• the availability and cost of financing to us;

• environmental, tax and tobacco legislation or regulation;

• volatility of gasoline prices, margins and supplies;

• merchandising margins;

• labor costs;

• level of capital expenditures;

• customer traffic;

• weather conditions;

• acts of terrorism and war;

• business strategies;

22

• expansion and growth of operations;

• future projects and investments;

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

• future operating results and financial condition; and

• the effectiveness of our disclosure controls and procedures and internal control over financial reporting.

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

Business Strategy and Overview

Our primary business objective is to strengthen our position as a leading producer and marketer of high quality refined petroleum products within our market area. We plan to accomplish this strategy through continued attention to optimizing our operations, resulting in the lowest possible operating costs, and continuing to improve and enhance our retail and wholesale positions. More specifically, we intend to:

• Maximize the favorable economic impact of our transportation cost advantage by increasing our retail and wholesale market shares within our market area.

• Optimize profitability by managing feedstock costs, product yields, and inventories through our refinery feedstock management program and our system-wide distribution model. We seek to maximize refinery profitability by selecting crude oil and other feedstocks taking into account product demand and pricing in our market areas, price, quality and availability of various grades of crude oil, product inventory levels and planned turnarounds of refinery units for maintenance. The combination of these factors is optimized by a sophisticated proprietary linear programming computer model, which selects the most profitable feedstock and product mix. The linear programming model is continuously updated and improved to reflect changes in the product market place and in our refinery’s processing capability

• Continue to investigate strategic acquisitions.

• Develop high payback discretionary capital improvements to our existing facilities.

Critical Accounting Policies

The accompanying consolidated financial statements and supplementary information were prepared in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are discussed in Note 1 to the Consolidated Financial Statements, Item 8. Inherent in the application of many of these accounting policies is the need for management to make estimates and judgments in the determination of certain revenues, expenses, assets and liabilities. As such, materially different financial results can occur as circumstances change and additional information becomes known. The policies with the greatest potential effect on our results of operation and financial position include:

Revenue Recognition

Revenues for products sold by the wholesale segment are recorded upon delivery of the products to our customers, at which time title to those products is transferred and when payment has either been received or collection is reasonably assured. At no point do we recognize revenue from the sale of product prior to transfer of

23

its title. Title to product is transferred to the customer at the shipping point, under predetermined contracts for sale at agreement upon or posted prices to customers of which collectability is reasonably assured.

Revenues for products sold by the retail segment are recognized immediately upon sale to the customer. Revenue derived from other sources including freight charges are recognized when the related product revenue is recognized.

Collectability of Accounts Receivable

For accounts receivable we estimate the net collectability considering both historical and anticipated trends relating to our customers and the possibility of non-collection due to their financial position. While such non-collections have been historically within our expectations and the allowances the Company has established, the Company cannot guarantee that it will continue to experience non-collection rates that it has experienced in the past. A significant change in the financial position of our customers could have a material impact on the quality of our accounts receivable and our future operating results.

Goodwill and Other Non-Amortizable Assets

In accordance with ACS 350, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests. We assess the impairment of goodwill and other indefinite-lived intangible assets annually.

The Company performed separate impairment tests on June 1, 2015 for its tradename and other intangible assets using discounted and undiscounted cash flow methods, respectively. The fair value of the tradename and other intangible assets exceeded their respective carrying values. The Company has noted no subsequent indication that would require testing the tradename and intangible assets for impairment.

There were no material changes in the gross carrying amounts of goodwill, tradename, or other intangible assets for fiscal 2015.

Long-Lived Assets

Whenever events or changes in circumstances indicate that the carrying value of any of these assets may not be recoverable, the Company will assess the recoverability of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written down to fair value.

Value of Pension Assets

The Company maintains three noncontributory defined benefit retirement plans for substantially all its employees. The assets of the plans are invested with a financial institution that follows an investment policy drafted by the Company. The investment guidelines provide a percentage range for each class of assets to be managed by the financial institution. The historic performance of these asset classes supports the Company’s expected return on the assets. The asset classes are rebalanced periodically should they fall outside the range allocations.

The percentage of total asset allocation range is as follows:

Asset Class	Minimum			Maximum
Equity		50	%		75	%
Fixed Income		20	%		50	%
Alternative Investments		0	%		15	%
Cash or Cash Equivalents		0	%		10	%

24

The discount rate utilized in valuing the benefit obligations of the plans was derived from the rate of return on high quality bonds as of August 31, 2015. Similarly, the rate of compensation utilizes historic increases granted by the Company and the industry as well as future compensation policies. See Note 10 to “Consolidated Financial Statements, Item 8”.

Environmental Remediation and Litigation Reserve Estimations

Management also makes judgments and estimates in recording liabilities for environmental cleanup and litigation. Liabilities for environmental remediation are subject to change because of matters such as changes in laws, regulations and their interpretation; the effect of additional information on the extent and nature of site contamination; and improvements in technology. Likewise, actual litigation costs can vary from estimates based on the facts and circumstance and application of laws in individual cases.

The above assessment of critical accounting policies is not meant to be an all-inclusive discussion of the uncertainties to financial results that occur from the application of the full range of the Company’s accounting policies. Materially different financial results could occur in the application of other accounting policies as well. Likewise, materially different results can occur upon the adoption of new accounting standards promulgated by the various rule-making bodies.

General

The Company is engaged in the refining and marketing of petroleum products. In fiscal 2015, approximately 66% and 16% of the Company’s gasoline and distillate production, respectively, was sold through the Company’s network of service stations and truck stops. The balances of the Company’s refined products were sold to wholesale customers. In addition to transportation and heating fuels, primarily gasoline and distillate, the Company is a major regional wholesale marketer of asphalt. The Company also sells convenience merchandise at convenience stores located at most of its service stations. The Company’s profitability is influenced by fluctuations in the market prices of crude oils and refined products. Although the Company’s product sales mix helps to reduce the impact of large short-term variations in crude oil price, net sales and costs of goods sold can fluctuate widely based upon fluctuations in crude oil prices. Specifically, the margins on wholesale gasoline and distillate tend to decline in periods of rapidly declining crude oil prices, while margins on asphalt, retail gasoline and distillate tend to improve. During periods of rapidly rising crude oil prices, margins on wholesale gasoline and distillate tend to improve, while margins on asphalt and retail gasoline and distillate tend to decline. Gross margins on the sale of convenience merchandise averaged 25.8% for fiscal 2015 and have been between 25.2% and 25.8% for the last five years and are essentially unaffected by variations in crude oil and petroleum products prices.

On March 6, 2013, the Company, through its subsidiary United Biofuels, Inc. (“UBI”), acquired a partially completed 50 million gallon per year biodiesel facility in Brooklyn, New York as part of the acquisition by its parent company, United Refining, Inc., of certain assets of Metro Fuel Oil Corp, and its affiliates. UBI has initiated the project to complete and modify the biodiesel plant. Commissioning the modified biodiesel plant is expected by the end of fiscal 2016. The remaining cost of the project is expected to be about $30 million.

The Company includes in costs of goods sold operating expenses incurred in the refining process. Therefore, operating expenses reflect only selling, general and administrative expenses, including all expenses of the retail network, and depreciation and amortization.

Recent Developments

The Company continues to be impacted by the volatility in petroleum markets in fiscal year 2015. From August 31, 2015 prices for NYMEX WTI crude have fallen $8.46, from $49.20 on August 31, 2015 to $40.74 on November 13, 2015. The lagged 3-2-1 crackspread as measured by the difference between the price of crude

25

oil contracts traded on the NYMEX for the preceding month to the prices of NYMEX gasoline and heating oil contracts in the current trading month, have been negatively affected through October. The Company uses a lagged crackspread as a margin indicator as it reflects the time period between the purchase of crude oil and its delivery to the refinery for processing. Through November 13, 2015 the indicated lagged crackspread for the first quarter of fiscal 2016 was $12.69, a $6.51 or 33.9% decrease from the average for the fourth quarter of fiscal 2015. The indicated lagged crackspread for our second quarter ending February 28, 2016, calculated as of November 13, 2015 was $13.10.

Financing

On October 20, 2015 (the “Closing Date”), URC, United Refining Company of Pennsylvania, Kiantone Pipeline Corporation (“Kiantone”), United Refining Company of New York Inc., United Biofuels, Inc., Country Fair, Inc. and Kwik- Fill Corporation (collectively, the “Borrowers”) entered into an Amended, Restated and Consolidated Revolving Credit, Term Loan and Security Agreement (“Credit Agreement”) with a group of lenders led by PNC Bank, National Association, as Administrative Agent (the “Agent”), and PNC Capital Markets LLC, as Sole Lead Arranger and Bookrunner. The Credit Agreement amends and restates the Amended and Restated Credit Agreement, dated May 18, 2011 and last amended June 18, 2013, by and between the Company and certain subsidiaries and PNC Bank, National Association, as Administrative Agent (the “Existing Credit Facility”). The Credit Agreement will terminate on October 19, 2020 (the “Expiration Date”). Until the Expiration Date, the Company may borrow on the New Revolving Credit Facility (as defined below) on a borrowing base formula set forth in the Credit Agreement.

Pursuant to the Credit Agreement, the Company increased its existing senior secured revolving credit facility from $175,000,000 to $225,000,000 (the “New Revolving Credit Facility”). The New Revolving Credit Facility may be increased by an amount not to exceed $50,000,000 without additional approval from the lenders named in the Credit Agreement if existing lenders agree to increase their commitments or additional lenders commit to fund such increase. In addition, pursuant to the Credit Agreement, the Company entered into a term loan in the amount of $250,000,000, which was made in a single drawing on the Closing Date (“Term Loan” and, together with the New Revolving Credit Facility, the “Credit Obligations”). The Term Loan shall be paid in full on or prior to the Expiration Date and shall be paid in equal quarterly amounts based on a ten-year straight line amortization schedule. Prepayment of the Term Loan in whole or in part may be made at any time without premium or penalty.

The Credit Obligations are secured by a first priority security interest in certain cash accounts, accounts receivable, inventory, the Refinery, including a related tank farm, and the capital stock of Kiantone. At such time as the Term Loan is repaid in full, and provided no event of default exists, the security interest in the refinery and the equity interests in Kiantone shall be released.

The Credit Agreement requires minimum undrawn availability of $15,000,000 at all times prior to the repayment of the Term Loan and the greater of 12.5% of the maximum New Revolving Credit Facility or $25,000,000 after the repayment of the Term Loan. Upon the repayment of the Term Loan, the Company is required to maintain a consolidated net worth of no less than $100,000,000. The Credit Agreement includes customary mandatory prepayment provisions, including in connection with non-ordinary course asset sales, equity issuances and the incurrence of additional debt. Unless assets sold in non-ordinary course transactions were included in the borrowing base for the New Revolving Credit Facility, mandatory prepayments shall be applied first to the repayment of the Term Loan and then the New Revolving Credit Facility. The Credit Agreement also includes customary affirmative and negative covenants, including, among other things, covenants related to the fixed charge coverage ratio, payment of fees, conduct of business, maintenance of existence and assets, payment of indebtedness and the incurrence of additional indebtedness, intercompany obligations, affiliate transactions, amendments to organizational documents, and financial statements.

The proceeds of the Credit Agreement will be used to (i) refinance the Company’s existing senior debt under the Existing Credit Facility (ii) provide for the Company’s general corporate needs, including working

26

capital requirements and capital expenditures, (iii) repay and satisfy in full those certain 10.500% senior secured notes due 2018 (the “Senior Secured Notes due 2018”) and (iv) pay the fees and expenses associated with the Credit Agreement.

On October 6, 2015, the Company announced the commencement of a tender offer (the “Tender Offer”) to purchase for cash any and all of the outstanding $237.25 million aggregate principal amount outstanding of the Senior Secured Notes due 2018 and a solicitation of consents for proposed amendments to the related indenture (the “Consent Solicitation”). The Tender Offer and Consent Solicitation was made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated October 6, 2015 and related consent and letter of transmittal. The Tender Offer was set to expire on November 2, 2015 (the “Expiration Date”). Holders of Senior Secured Notes due 2018 that validly tendered prior to 5:00 p.m., New York City time, on October 19, 2015 (the “consent deadline”), would receive total consideration of $1,057.50 per $1,000.00 principal amount of Senior Secured Notes due 2018, plus accrued and unpaid interest, which included a consent payment of $30.00. Holders that tender after the consent deadline and prior to the Expiration Date would receive total consideration of $1,027.50 per $1,000.00 principal amount, plus accrued and unpaid interest.

On October 20, 2015, the Company announced that $217,871,000 aggregate principal amount, or 91.83% of the Senior Secured Notes due 2018, were validly tendered prior to the consent deadline. The Company also received the requisite consents for the proposed amendments to eliminate most of the covenants applicable to the Senior Secured Notes due 2018, including the release of the collateral securing the Notes. The remaining 8.17% of the Senior Secured Notes due 2018 or $19,379,000, will be fully redeemed at a redemption price of 105.25% of par value plus accrued interest of $452,177 on November 19, 2015.

Enbridge Agreements

On July 31, 2014, URC and Kiantone Pipeline Corporation (together the “Company Parties”), on the one hand, and Enbridge Energy Limited Partnership (“EEPL”) and Enbridge Pipelines Inc. (“EPI” and, together with EEPL, the “Carriers”), on the other hand, entered into a letter agreement (the “Letter Agreement”) with respect to approximately 88.85 miles of pipeline owned by the Carriers, which transports crude oil from Canada to the Company’s Kiantone Pipeline in West Seneca, New York and serves the Company’s refinery in Warren, Pennsylvania (“Line 10”).

Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10 (the “Integrity Costs”), which aggregate $36 million for the calendar year 2014, which was paid August 14, 2014. Pursuant to the Letter Agreement the Carriers agreed to reconcile their actual expenses for the integrity maintenance and refund any excess payments made by the Company. The parties agreed to apply any credit to the Company as a result of such reconciliation to amounts owed by the Company for Subsequent Year Pipe Replacement Costs (as defined below). For each subsequent calendar year through the earlier of the expiration or closing of the purchase rights granted to the Company pursuant to the Put and Call Agreement, the Carriers will provide the Company with an invoice for the Integrity Costs for such calendar year (“Subsequent Year Integrity Costs”). The Carriers’ actual expenses with respect to the integrity maintenance and pipe replacement will be reconciled against the Subsequent Year Integrity and Pipe Replacement Costs similarly to the reconciliation for calendar year 2014.

In addition, the Company agreed to pay for half the cost of replacing certain portions of Line 10 in accordance with a plan agreed to between the Company Parties and the Carriers. The Company will pay 50% of the estimated expenses of the replacement project for each segment of Line 10 to be replaced (the “Replacement Costs”) within 30 days of its receipt of an invoice for the same, along with a project management fee of 2 ¹/₄%. Each Carrier will initially fund the remaining 50% of the Replacement Costs during construction, provided that the Company will reimburse the Carriers for their actual cost of funds during the construction process. Once construction is complete and each replaced segment of Line 10 is put into service, and assuming the Company

27

has not exercised its rights to purchase Line 10 pursuant to the Put and Call Agreement (as defined and discussed below), the Company will repay the Carriers the 50% of the Replacement Costs they funded over a 10 year period.

On November 12, 2015, pursuant to the Letter Agreement, the Company made a payment to the Carriers in the amount of $60,700,000 for Subsequent Year Pipe Replacement Costs, which amount reflects credits received by the Company upon reconciliation of the Integrity Costs funded in fiscal 2014. Kiantone, as the owner of the Kiantone Pipeline, has agreed to guaranty any and all payments due by the Company pursuant to the Letter Agreement.

Pursuant to the Letter Agreement, the Company and the Carriers agreed to negotiate the terms and conditions of a put and call option agreement for Line 10 (the “Put and Call Option Agreement” and, together with the Letter Agreement, the “Enbridge Agreement”). On April 8, 2015 (the “Execution Date”), the Company entered into the Put and Call Option Agreement with the Carriers as called for in the Letter Agreement. The Put and Call Option Agreement entered into with Enbridge LP (the “U.S. Agreement”) is substantially similar to the Put and Call Option Agreement entered into with Enbridge Inc. (the “Canadian Agreement” and, together with the U.S. Agreement, the “Put and Call Agreement”). The Carriers own Line 10, including real property interests through and under which Line 10 passes, the Carriers’ assignable permits related to the ownership and operation of Line 10, as well as personal property, contract rights, records and incidental rights held solely in connection with Line 10 (collectively, the “Assets”). Pursuant to the Put and Call Agreement, the Carriers granted the Company a right (the “Call Option”) to purchase all of the Assets and the Company granted the Carriers the right to put all the Assets to the Company (the “Put Option” and, together with the Call Option, the “Purchase Options”) subject to the terms and conditions of the Put and Call Agreement.

The Carrier’s Put Option is exercisable beginning on the date that is the earlier of (a) January 1, 2026 and (b) the date that is 30 days after the latest of (i) the date on which the Carriers give notice that the Line 10 replacement work performed pursuant to the Letter Agreement is sufficiently completed (as contemplated in the Call and Put Agreement) and (ii) the ninth (9^th) anniversary of the Execution Date (the “Put Option Commencement Date”). The Put Option terminates on the date that is 24 months after either (a) the Put Option Commencement Date if such date is the first of a month or (b) the first day of the calendar month immediately following the Put Option Commencement Date if it is not the first day of the month (the “Put/Call Option Expiry Date”). The Company’s Call Option is exercisable at any time beginning on the Execution Date and ending on the Put/Call Option Expiry Date.

The purchase price of the Assets (the “Purchase Price”) shall be calculated as follows: the sum of (a) 70% of the book value of the Assets as of July 31, 2014 minus annual depreciation, (b) 100% of total replacement costs for any segment replacements on the Pipeline commenced by the Carrier, whether completed or ongoing on the date of Asset sale is consummated (the “Closing Date”), minus any of such expenses paid by the Company and (c) 100% of the total regulatory requirements costs for any regulatory work commenced by the Carrier, whether completed or ongoing at the Closing Date, minus any of such expenses paid by the Company. The Purchase Price shall be subject to adjustment pursuant to the Put and Call Agreement with respect to certain work ongoing at the Closing Date.

Among other customary conditions to closing, Carrier’s obligation to close the sale of the Assets is conditioned on the Company’s payment of all obligations outstanding pursuant to the Put and Call Agreement and the Letter Agreement. In addition, the sale of Assets pursuant to the U.S. Agreement shall close concurrently with the sale of the Assets pursuant to the Canadian Agreement.

The Company and the Carrier agreed that certain work must be undertaken in order to carve out portions of Line 10 in Canada from the Enbridge mainline system and allow it to operate independently. In the event any

28

work is required to similarly separate the U.S. portion of Line 10 from the Enbridge mainline system (the “Carve-Out Work”), a plan to perform such Carve-Out Work that would result in expenses greater than $38.5 million will require the approval of the Company.

In the event any of the maintenance, regulatory requirement, or replacement work contemplated in the Letter Agreement or the Put and Call Agreement (collectively, the “Work”) is outstanding at the Closing Date, concurrently with the closing of the Asset sale, the Company and the Carriers will enter into an operating agreement (the “Operating Agreement”) pursuant to which the Carriers will provide certain operational and administrative services (the “Services”) while the Work is ongoing and complete such Work. As payment for the Services and completion of the Work, the Carriers shall be: (i) reimbursed for all expenses of providing the Services, (ii) paid a fixed fee of on an annual basis, which shall be subject to a 2% increase for each successive year following the first year of the Operating Agreement, and (ii) paid for all expenses of the Work not previously paid, as well as a 2.25% construction management fee.

The Put and Call Agreement may be terminated by the mutual consent of the Company and the Carriers and shall automatically terminate if neither Purchase Option is exercised prior to the Put/Call Option Expiry Date. Moreover, either the Company or a Carrier may terminate the Put and Call Agreement if a closing of the Asset sale shall not have occurred on or before December 31, 2028 assuming the terminating party is not then in breach of the Put and Call Agreement and if a party has breached a representation, such breach has not been cured within the time periods allotted by the Put and Call Agreement. Finally, the Company may terminate the Put and Call Agreement by notifying the Carriers to cease the replacement work contemplated in the Letter Agreement. The Company has assessed the accounting impact of the Put and Call Agreement and determined there is no impact until the time when it becomes probable that the Put or Call will be exercised.

Results of Operations

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

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

29

A discussion and analysis of the factors contributing to the Company’s results of operations are presented below. The accompanying Consolidated Financial Statements and related Notes (See Item 8), together with the following information, are intended to supply investors with a reasonable basis for evaluating the Company’s operations, but should not serve as the only criteria for predicting the Company’s future performance.

Retail Operations

	Fiscal Year Ended August 31,
	2015			2014			2013
	(in thousands)
Net Sales
Petroleum	$	1,070,530		$	1,415,157		$	1,446,453
Merchandise and other		276,761			273,310			275,172
Total Net Sales	$	1,347,291		$	1,688,467		$	1,721,625
Costs of Goods Sold	$	1,168,158		$	1,529,463		$	1,569,040
Selling, general and administrative expenses		139,483			137,936			138,912
Depreciation and amortization expenses		7,288			6,566			6,153
Segment Operating Income	$	32,362		$	14,502		$	7,520
Retail Operating Data:
Petroleum Sales (thousands of gallons)		372,426			385,460			388,903
Petroleum margin (a)	$	107,725		$	89,950		$	83,298
Petroleum margin ($/gallon) (b)		.2893			.2334			.2142
Merchandise and other margins	$	71,408		$	69,052		$	69,291
Merchandise margin (percent of sales)		25.8	%		25.3	%		25.2	%

(a) Includes the effect of intersegment purchases from our wholesale segment at prices which approximate market.

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

Net Sales

2015 vs. 2014

Retail sales decreased during fiscal 2015 by $341.2 million or 20.2% for the comparable period in fiscal 2014 from $1,688.5 million to $1,347.3 million. The decrease was primarily due to a decrease of $344.6 million in petroleum sales offset by an increase of $3.4 million in merchandise sales. The petroleum sales decrease resulted from a 13.0 million gallon or 3.3% decrease in retail petroleum volume and a 21.7% decrease in retail selling prices per gallon.

2014 vs. 2013

Retail sales decreased during fiscal 2014 by $33.1 million or 1.9% for the comparable period in fiscal 2013 from $1,721.6 million to $1,688.5 million. The decrease was primarily due to a decrease of $31.3 million in petroleum sales and $1.6 million in merchandise sales. The petroleum sales decrease resulted from a 3.4 million gallon or .9% decrease in retail petroleum volume and a 1.3% decrease in retail selling prices per gallon.

30

Costs of Goods Sold

2015 vs. 2014

Retail costs of goods sold decreased during fiscal 2015 by $361.3 million or 23.6% for the comparable period in fiscal 2014 from $1,529.4 million to $1,168.1 million. The decrease was primarily due to $370.1 million in petroleum volume and prices, and $.6 of freight costs, offset by an increase in merchandise cost of $1.1 million and $8.3 million in fuel tax. This tax increase was due primarily to the increase in Pennsylvania fuels tax.

2014 vs. 2013

Retail costs of goods sold decreased during fiscal 2014 by $39.6 million or 2.5% for the comparable period in fiscal 2013 from $1,569.0 million to $1,529.4 million. The decrease was primarily due to $51.2 million in petroleum volume and prices, and merchandise cost of $1.6 million offset by an increase of $13.2 million in fuel tax. This tax increase was due primarily to the increase in Pennsylvania fuels tax.

Selling, General and Administrative Expenses

2015 vs. 2014

Retail Selling, General and Administrative (“SG&A”) expenses increased during fiscal 2015 by $1.5 million or 1.1% for the comparable period in fiscal 2014 from $137.9 million to $139.4 million. The increase was due in part to an increase in payroll costs of $2.9 million, environmental costs of $1.1 million and maintenance costs of $1.2 million offset by a reduction in credit costs of $1.7 million, pension costs of $.8 million and other costs of $1.2 million.

2014 vs. 2013

Retail Selling, General and Administrative (“SG&A”) expenses decreased during fiscal 2014 by $1.0 million or .7% for the comparable period in fiscal 2013 from $138.9 million to $137.9 million. The decrease was due in part to a reduction in pension costs of $.5 million, environmental costs of $.6 million, credit costs of $.4 million and payroll costs of $.5 million offset by an increase in maintenance costs of $1.0 million.

Wholesale Operations

	Fiscal Year Ended August 31,
	2015		2014		2013
	(in thousands)
Net Sales (a)	$	1,369,428	$	1,750,751	$	1,959,628
Costs of Goods Sold (exclusive of depreciation, amortization and (gains) losses on derivative contracts)		1,183,873		1,571,010		1,590,535
(Gains) losses on derivative contracts		—		—		2,319
Selling, general and administrative expenses		25,606		24,828		24,962
Depreciation, amortization and asset impairments		34,266		25,238		20,724
Segment Operating Income	$	125,683	$	129,675	$	321,088

31

Key Wholesale Operating Statistics

	Fiscal Year Ended August 31,
	2015			2014			2013
Refinery Product Yield (thousands of barrels)
Gasoline and gasoline blendstock		10,213			8,864			9,748
Distillates		5,291			4,898			5,451
Asphalt		7,201			6,644			7,138
Butane, propane, residual products, internally produced fuel and other		2,576			2,594			2,534
Total Product Yield		25,281			23,000			24,871
% Heavy Crude Oil of Total Refinery Throughput (a)		61	%		61	%		60	%
Crude throughput (thousand barrels per day) (b)		63.4			57.8			63.1
Product Sales (thousands of barrels) (c)
Gasoline and gasoline blendstock		6,147			5,457			6,152
Distillates		4,339			3,868			4,390
Asphalt		7,109			6,892			7,418
Other		658			772			844
Total Product Sales Volume		18,253			16,989			18,804
Product Sales (dollars in thousands) (c)
Gasoline and gasoline blendstock	$	479,175		$	631,746		$	740,233
Distillates		377,104			500,337			576,570
Asphalt		491,955			573,605			595,267
Other		21,194			45,063			47,558
Total Product Sales	$	1,369,428		$	1,750,751		$	1,959,628

(a) The Company defines “heavy” crude oil as crude oil with an American Petroleum Institute specific gravity of 26 or less.

(b) See also Item 1, Refining Operations.

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

Net Sales

2015 vs. 2014

Wholesale sales decreased during fiscal 2015 by $381.3 million or 21.8% for the comparable period in fiscal 2014 from $1,750.7 million to $1,369.4 million. The decrease was due to a 27.2% decrease in wholesale prices offset by an increase of 7.4% in wholesale volume.

2014 vs. 2013

Wholesale sales decreased during fiscal 2014 by $208.9 million or 10.7% for the comparable period in fiscal 2013 from $1,959.6 million to $1,750.7 million. The decrease was due to a 1.1% decrease in wholesale prices and a 9.6% decrease in wholesale volume, primarily resulting from a planned refinery turnaround during the third fiscal quarter. See also Item 1, Refining Operations.

32

Costs of Goods Sold (exclusive of depreciation and amortization)

2015 vs. 2014

Wholesale costs of goods sold decreased during fiscal 2015 by $387.1 million or 24.6% for the comparable period in fiscal 2014 from $1,571.0 million to $1,183.9 million. The decrease in wholesale costs of goods sold during this period was primarily due to a decrease in cost of raw materials.

2014 vs. 2013

Wholesale costs of goods sold decreased during fiscal 2014 by $19.5 million or 1.2% for the comparable period in fiscal 2013 from $1,590.5 million to $1,571.0 million. The decrease in wholesale costs of goods sold during this period was primarily due to a decrease in cost of raw materials.

Selling, General and Administrative Expenses

2015 vs. 2014

Wholesale SG&A expenses remained relatively constant during fiscal 2015 to the comparable period in fiscal 2014.

2014 vs. 2013

Wholesale SG&A expenses remained relatively constant during fiscal 2014 to the comparable period in fiscal 2013.

Depreciation, Amortization and Asset Impairments

2015 vs. 2014

Depreciation, amortization and asset impairments increased during fiscal 2015 by $9.0 million for the comparable period for fiscal 2014 from $25.2 million to $34.2 million. This increase was due primarily to an increase in turnaround amortization and integrity and replacement costs amortization.

2014 vs. 2013

Depreciation, amortization and asset impairments increased during fiscal 2014 by $4.5 million for the comparable period for fiscal 2013 from $20.7 million to $25.2 million. This increase was due primarily to an increase in turnaround amortization.

Interest Expense, Net

2015 vs. 2014

Net interest expense (interest expense less interest income) remained relatively constant during fiscal 2015 to the comparable periods in fiscal 2014.

2014 vs. 2013

Net interest expense (interest expense less interest income) decreased during fiscal 2014 by $12.8 million for the comparable period for fiscal 2013 from $39.1 million to $26.3 million. The decrease was due to the redemption of $127.8 million aggregate principal amount of Senior Notes due 2018 on August 30, 2013.

Income Tax Expense / (Benefit)

Our fiscal 2015 and 2014 effective tax rates were approximately 37% and 38%, respectively.

33

Liquidity and Capital Resources

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

The following table summarizes selected measures of liquidity and capital sources:

	August 31, 2015		August 31, 2014
	(in thousands)
Cash and cash equivalents	$	117,028	$	99,037
Working capital	$	332,162	$	292,738
Current ratio		4.3		3.1
Debt	$	240,667	$	239,525

Primary sources of liquidity have been cash and cash equivalents, cash flows from operations and borrowing availability under a revolving line of credit, which was amended and restated on October 20, 2015 pursuant to the Credit Agreement discussed below. We believe available capital resources will be adequate to meet our working capital, debt service, and capital expenditure requirements for existing operations. We continuously evaluate our capital budget; however, management does not foresee any significant increase in maintenance and non-discretionary capital expenditures during fiscal 2016 that would impact future liquidity or capital resources. Maintenance and non-discretionary capital expenditures have averaged approximately $6 million annually over the last three years for the refining and marketing operations and management currently projects this capital expenditure to be approximately $8 - $10 million for fiscal 2016.

On October 20, 2015, URC, United Refining Company of Pennsylvania, Kiantone, United Refining Company of New York Inc., United Biofuels, Inc., Country Fair, Inc. and Kwik-Fill Corporation (collectively, the “Borrowers”) entered into the Credit Agreement with a group of lenders led by PNC Bank, National Association, and PNC Capital Markets LLC, as Sole Lead Arranger and Bookrunner. The Credit Agreement amends and restates the Existing Credit Facility. The Credit Agreement will terminate on October 19, 2020. Until the Expiration Date, the Company may borrow on the New Revolving Credit Facility (as defined below) on a borrowing base formula set forth in the Credit Agreement.

Pursuant to the Credit Agreement, the Company increased its existing senior secured revolving credit facility from $175,000,000 to $225,000,000. The New Revolving Credit Facility may be increased by an amount not to exceed $50,000,000 without additional approval from the lenders named in the Credit Agreement if existing lenders agree to increase their commitments or additional lenders commit to fund such increase. Interest under the New Revolving Credit Facility is calculated as follows: (a) for domestic rate borrowings, at (i) the greater of the Agent’s prime rate, federal funds rate plus .5% or the daily LIBOR rate plus 1%, plus (ii) an applicable margin of 1.25% to 1.75%, and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.25% to 2.75%. The applicable margin will vary depending on a formula calculating the Company’s average unused availability under the facility. In addition, pursuant to the Credit Agreement, the Company entered into a term loan in the amount of $250,000,000, which was made in a single drawing on the Closing Date (“Term Loan” and, together with the New Revolving Credit Facility, the “Credit Obligations”). Under the Term Loan, interest is calculated as follows: (a) for domestic rate borrowings, at (i) the greater of the Agent’s prime rate, federal funds rate plus .5% or the daily LIBOR rate plus 1%, plus (ii) an applicable margin of 1.75% to 2.25%, and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.75% to 3.25%. The applicable margin will vary depending on a formula calculating the Company’s average unused availability under the facility. The Term Loan is prepayable in whole or in part at any time without premium or penalty. The Term Loan shall be paid in full on or prior to the Expiration Date and shall be paid in equal quarterly amounts based on a ten-year straight line amortization schedule. Prepayment of the Term Loan in whole or in part may be made at any time without premium or penalty.

34

The Credit Obligations are secured by a first priority security interest in certain cash accounts, accounts receivable, inventory, the refinery, including a related tank farm, and the capital stock of Kiantone. At such time as the Term Loan is repaid in full, and provided no event of default exists, the security interest in the refinery and the equity interests in Kiantone shall be released.

The proceeds of the Credit Agreement will be used to (i) refinance the Company’s existing senior debt under the Existing Credit Facility (ii) provide for the Company’s general corporate needs, including working capital requirements and capital expenditures, (iii) repay and satisfy in full those certain 10.500% senior secured notes due 2018 (the “Senior Secured Notes due 2018”) and (iv) pay the fees and expenses associated with the Credit Agreement.

On October 6, 2015, the Company announced the commencement of the Tender Offer to purchase for cash any and all of the outstanding $237.25 million aggregate principal amount outstanding of the Senior Secured Notes due 2018 and the Consent Solicitation. The Tender Offer and Consent Solicitation was made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated October 6, 2015 and related consent and letter of transmittal. The Tender Offer was set to expire on November 2, 2015. Holders of Senior Secured Notes due 2018 that validly tendered prior to the consent deadline would receive total consideration of $1,057.50 per $1,000.00 principal amount of Senior Secured Notes due 2018, plus accrued and unpaid interest, which included a consent payment of $30.00. Holders that tender after the consent deadline and prior to the Expiration Date would receive total consideration of $1,027.50 per $1,000.00 principal amount, plus accrued and unpaid interest.

On October 20, 2015, the Company announced that $217,871,000 aggregate principal amount, or 91.83% of the Senior Secured Notes due 2018, were validly tendered prior to the consent deadline. The Company also received the requisite consents for the proposed amendments to eliminate most of the covenants applicable to the Senior Secured Notes due 2018, including the release of the collateral securing the Notes. The remaining 8.17% of the Senior Secured Notes due 2018 or $19,379,000, were fully redeemed at a redemption price of 105.25% of par value plus accrued interest of $452,177 on November 19, 2015.

Our cash and cash equivalents consist of bank balances and investments in money market funds. These investments have staggered maturity dates, none of which exceed three months. They have a high degree of liquidity since the securities are traded in public markets. During fiscal 2015, significant uses of cash are summarized in the table below under “Significant Uses of Cash”:

Significant Uses of Cash

The changes in cash for the fiscal year ended August 31, 2015 are described below.

The cash provided by working capital is shown below:

	Fiscal Year Ended August 31, 2015
	(in millions)
Cash provided by working capital items:
Prepaid expense decrease	$	39.2
Prepaid income taxes decrease		13.7
Accounts receivable decrease		10.8
Income taxes payable increase		7.4
Refundable income tax decrease		6.0
Sales, use and fuel taxes payable increase		2.8
Inventory increase		(54.6	)
Accounts payable decrease		(18.4	)
Amounts due from affiliated companies, net		(1.9	)
Accrued liabilities decrease		(.8	)
Total change	$	4.2

35

Available cash on hand increased by $18.0 million. Other cash uses included:

• Fund operating activities provided by working capital items of $4.2 million

• Fund capital expenditures and deferred turnaround costs of $53.9 million

• Fund deferred integrity and replacement cost of $28.6 million

• Dividends to preferred stockholder and common stockholder of $41.1 million

• Scheduled long-term debt repayments of $2.0 million

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

Future liquidity, both short and long-term, will continue to be primarily dependent on realizing a refinery margin sufficient to cover fixed and variable expenses, including planned capital expenditures. We expect to be able to meet our working capital, capital expenditure, contractual obligations, letter of credit and debt service requirements out of cash flow from operations, cash on hand and available borrowings under our Credit Agreement. This provides the Company with flexibility relative to its cash flow requirements in light of market fluctuations, particularly involving crude oil prices and seasonal business cycles and will assist the Company in meeting its working capital, ongoing capital expenditure needs and for general corporate purposes. See Note 21 to “Consolidated Financial Statements, Item 8”.

We had outstanding letters of credit of $8,752,000 as of August 31, 2015. As of August 31, 2015, we had no outstanding borrowings under the Existing Credit Facility resulting in net availability of $166,248,000.

The following is a summary of our significant contractual cash obligations for the periods indicated that existed as of August 31, 2015 and is based on information appearing in the Notes to the Consolidated Financial Statements in Item 8:

	Payments due by period
Contractual Obligations (a) (b)	Total		Less Than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
	(in thousands)
Long-term debt	$	244,458	$	1,556	$	238,747	$	624	$	3,531
Operating leases		60,666		13,409		21,536		14,672		11,049
Interest on 10.5% Senior Notes due 2/28/2018 (c) (d) (e)		3,629		3,629		—		—		—
Total contractual cash obligations (f)	$	308,753	$	18,594	$	260,283	$	15,296	$	14,580

(a) Subsequent to August 31, 2015, the Existing Credit Facility was amended and restated pursuant to the Credit Agreement and the Senior Secured Notes due 2018 were redeemed in full. See Note 21 to “Consolidated Financial Statements, Item 8”.

(b) Subsequent to August 31, 2015 the company entered into a five year term loan for $250,000,000. Concurrently the 10.5% senior note obligation was paid. Under the term loan the company is making principal payments of $6,250,000 for 19 consecutive quarters and a final principal payment of $131,250,000 upon maturity of the loan. Under the Term Loan, interest is calculated as follows: (a) for domestic rate borrowings, at (i) the greater of the Agent’s prime rate, federal funds rate plus .5% or the daily LIBOR rate plus 1%, plus (ii) an applicable margin of 1.75% to 2.25%, and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.75% to 3.25%. The applicable margin will vary depending on a formula calculating the Company’s average unused availability under the facility. At the current rate of 3.5% the interest for the next fiscal year would be $5,934,293.

36

(c) On March 8, 2011, the Company sold $365,000,000 of the Senior Secured Notes due 2018 for $352,020,600, resulting in original issue discount of $12,979,400, which will be amortized over the life of the Senior Secured Notes due 2018 using the interest method and is not reflected in this table. The net proceeds of the offering of $344,249,000 were used to fund the tender offer for all of its outstanding Senior Notes due 2012, pay accrued interest of $3,400,000 there on and a redemption premium related thereto. See Notes 9 and 21 to “Consolidated Financial Statements, Item 8”.

(d) On August 30, 2013 the Company redeemed $127,750,000 aggregate principal amount of its outstanding $365,000,000 Senior Secured Notes due 2018. The Senior Secured Notes due 2018 were redeemed at a redemption price of 110.50% of the principal amount thereof, plus accrued and unpaid interest to August 30, 2013. In connection with the redemption, a loss of $18,727,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $13,414,000, a write-off of deferred financing costs of $1,998,000 and a write-off of unamortized debt discount of $3,315,000. See Note 21 to “Consolidated Financial Statements, Item 8”.

(e) The above does not reflect the Existing Credit Facility, which had a balance of $0 as of August 31, 2015. The applicable margin varies with our facility’s average unused availability calculation See Notes 8 and 9 to “Consolidated Financial Statements, Item 8”.

(f) Pension obligations are not included since payments are not known.

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

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

Related Party Transactions

See Item 13, Certain Relationships and Related Transactions.

Seasonal Factors

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

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

Inflation

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

37

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASU No. 2014-09 supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 is effective for interim and annual periods beginning after December 15, 2016, with early application prohibited. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2014-09.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We use our Amended and Restated Revolving Credit Facility to finance a portion of our operations. These on-balance sheet financial instruments, to the extent they provide for variable rates, expose us to interest rate risk resulting from changes in the PNC Prime rate, the Federal Funds rate or the LIBOR rate.

We have exposure to price fluctuations of crude oil and refined products. We do not manage the price risk related to all of our inventories of crude oil and refined products with a permanent formal hedging program, but we do manage our risk exposure by managing inventory levels and by selectively applying hedging activities. At August 31, 2015, the Company had no future positions hedging crude or product inventories.

From time to time the Company uses derivatives to reduce its exposure to fluctuations in crude oil purchase costs and refining margins. Derivative products, historically crude oil option contracts (puts) and crackspread option contracts have been used to hedge the volatility of these items. The Company does not enter such contracts for speculative purposes. The Company accounts for changes in the fair value of its contracts by marking them to market and recognizing any resulting gains or losses in its statement of operations. The Company includes the carrying amounts of the contracts in prepaid expenses and other assets or accounts payable in its Consolidated Balance Sheet.

At August 31, 2015, we were exposed to the risk of market price declines with respect to a substantial portion of our crude oil and refined product inventories.

38

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		40
Consolidated Financial Statements:
Balance Sheets		41
Statements of Income		42
Statements of Comprehensive Income		43
Statements of Stockholder’s Equity		44
Statements of Cash Flows		45
Notes to Consolidated Financial Statements		46

39

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholder

United Refining Company

Warren, Pennsylvania

We have audited the accompanying consolidated balance sheets of United Refining Company and subsidiaries as of August 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, stockholder’s equity and cash flows for each of the three years in the period ended August 31, 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of United Refining Company and subsidiaries as of August 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO USA, LLP

New York, New York

November 23, 2015

40

UNITED REFINING COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share amounts)

	August 31,
	2015			2014
Assets
Current:
Cash and cash equivalents	$	117,028		$	99,037
Accounts receivable, net		81,567			92,391
Refundable income taxes		—			6,000
Inventories, net		206,066			151,472
Prepaid income taxes		—			13,674
Prepaid expenses and other assets		28,000			67,168
Amounts due from affiliated companies, net		393			—
Total current assets		433,054			429,742
Property, plant and equipment, net		347,757			317,519
Deferred financing costs, net		2,667			3,575
Goodwill		1,349			1,349
Tradename		10,500			10,500
Amortizable intangible assets, net		869			951
Deferred integrity and replacement costs, net		58,634			64,916
Deferred turnaround costs and other assets, net		30,636			41,912
	$	885,466		$	870,464
Liabilities and Stockholder’s Equity
Current:
Current installments of long-term debt	$	1,556		$	1,551
Accounts payable		44,833			91,881
Accrued liabilities		17,911			18,691
Income tax payable		7,397			—
Sales, use and fuel taxes payable		23,373			20,550
Deferred income taxes		5,822			2,810
Amounts due to affiliated companies, net		—			1,521
Total current liabilities		100,892			137,004
Long term debt: less current installments		239,111			237,974
Deferred income taxes		55,921			44,140
Deferred retirement benefits		71,800			67,121
Total liabilities		467,724			486,239
Commitments and Contingencies
Stockholder’s equity:
Common stock; $.10 par value per share—shares authorized 100; issued and outstanding 100		—			—
Series A Preferred stock; $1,000 par value per share—shares authorized 25,000; issued and outstanding 14,116		14,116			14,116
Additional paid-in capital		156,846			156,810
Retained earnings		263,464			222,495
Accumulated other comprehensive loss		(16,684	)		(9,196	)
Total stockholder’s equity		417,742			384,225
	$	885,466		$	870,464

See accompanying notes to consolidated financial statements.

41

UNITED REFINING COMPANY AND SUBSIDIARIES

Consolidated Statements of Income

(in thousands)

	Year Ended August 31,
	2015			2014			2013
Net sales	$	2,716,719		$	3,439,218		$	3,681,253
Costs and expenses:
Costs of goods sold (exclusive of depreciation, amortization and losses on derivative contracts)		2,352,031			3,100,473			3,159,575
Losses on derivative contracts		—			—			2,319
Selling, general and administrative expenses		165,089			162,764			163,874
Depreciation, amortization and asset impairments		41,554			31,804			26,877
		2,558,674			3,295,041			3,352,645
Operating income		158,045			144,177			328,608
Other expense:
Interest expense, net		(26,648	)		(26,341	)		(39,035	)
Other, net		(3,869	)		(2,897	)		(3,819	)
Loss on early extinguishment of debt		—			—			(18,727	)
		(30,517	)		(29,238	)		(61,581	)
Income before income tax expense		127,528			114,939			267,027
Income tax expense:
Current		25,897			25,050			95,723
Deferred		19,580			18,776			2,621
		45,477			43,826			98,344
Net income	$	82,051		$	71,113		$	168,683

See accompanying notes to consolidated financial statements.

42

UNITED REFINING COMPANY AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(in thousands)

	Year Ended August 31,
	2015			2014			2013
Net income	$	82,051		$	71,113		$	168,683
Other comprehensive (loss) income, net of taxes:
Unrecognized post-retirement (loss) income, net of taxes of $(4,787), $(1,384) and $8,003 for the years ended August 31, 2015, 2014 and 2013, respectively		(7,488	)		(2,106	)		12,447
Other comprehensive (loss) income		(7,488	)		(2,106	)		12,447
Total comprehensive income	$	74,563		$	69,007		$	181,130

See accompanying notes to consolidated financial statements.

43

UNITED REFINING COMPANY AND SUBSIDIARIES

Consolidated Statements of Stockholder’s Equity

(in thousands, except share data)

	Common Stock				Preferred Stock				Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total Stockholder’s Equity
	Shares		Amount		Shares		Amount
Balance at August 31, 2012		100	$	—		—	$	—	$	24,825		$	135,988		$	(19,537	)	$	141,276
Other comprehensive income		—		—		—		—		—			—			12,447			12,447
Issuance of preferred stock		—		—		14,116		14,116		127,048			—			—			141,164
Contribution from Parent under the Tax Sharing Agreement		—		—		—		—		1,996			—			—			1,996
Capital contribution related to purchase of assets		—		—		—		—		5,975			—			—			5,975
Net income		—		—		—		—		—			168,683			—			168,683
Dividends		—		—		—		—		—			(114,338	)		—			(114,338	)
Balance at August 31, 2013		100		—		14,116		14,116		159,844			190,333			(7,090	)		357,203
Other comprehensive loss		—		—		—		—		—			—			(2,106	)		(2,106	)
Distribution to Parent under the Tax Sharing Agreement		—		—		—		—		(3,034	)		—			—			(3,034	)
Net income		—		—		—		—		—			71,113			—			71,113
Dividends		—		—		—		—		—			(38,951	)		—			(38,951	)
Balance at August 31, 2014		100		—		14,116		14,116		156,810			222,495			(9,196	)		384,225
Other comprehensive loss		—		—		—		—		—			—			(7,488	)		(7,488	)
Contribution from Parent under the Tax Sharing Agreement		—		—		—		—		36			—			—			36
Net income		—		—		—		—		—			82,051			—			82,051
Dividends		—		—		—		—		—			(41,082	)		—			(41,082	)
Balance at August 31, 2015		100	$	—		14,116	$	14,116	$	156,846		$	263,464		$	(16,684	)	$	417,742

See accompanying notes to consolidated financial statements.

44

UNITED REFINING COMPANY AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended August 31,
	2015			2014			2013
Cash flows from operating activities:
Net income	$	82,051		$	71,113		$	168,683
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and asset impairments		44,027			34,147			29,279
Non cash portion of loss on early extinguishment of debt		—			—			5,313
Deferred income taxes		19,580			18,776			2,621
Loss on asset dispositions		928			1,205			1,119
Cash provided by (used in) working capital items		4,180			(8,700	)		(40,311	)
Change in operating assets and liabilities:
Other assets, net		480			736			538
Deferred retirement benefits		(7,596	)		(6,044	)		(2,871	)
Total adjustments		61,599			40,120			(4,312	)
Net cash provided by operating activities		143,650			111,233			164,371
Cash flows from investing activities:
Additions to property, plant and equipment		(50,249	)		(49,264	)		(41,597	)
Additions to amortizable intangible assets		(100	)		—			—
Additions to deferred turnaround costs		(3,616	)		(42,195	)		(1,241	)
Additions to deferred integrity and replacement costs		(28,630	)		(36,810	)		—
Proceeds from asset dispositions		10			58			81
Net cash used in investing activities		(82,585	)		(128,211	)		(42,757	)
Cash flows from financing activities:
Distribution from (to) Parent under the Tax Sharing Agreement		36			(3,034	)		1,996
Proceeds from sale of preferred stock		—			—			141,164
Dividends to preferred shareholder and stockholder		(41,082	)		(38,951	)		(114,338	)
Proceeds from issuance of long-term debt		—			1,426			—
Principal reductions of long-term debt		(1,708	)		(1,963	)		(129,439	)
Deferred financing costs		(320	)		—			—
Net cash used in financing activities		(43,074	)		(42,522	)		(100,617	)
Net increase (decrease) in cash and cash equivalents		17,991			(59,500	)		20,997
Cash and cash equivalents, beginning of year		99,037			158,537			137,540
Cash and cash equivalents, end of year	$	117,028		$	99,037		$	158,537
Cash provided by (used in) working capital items:
Accounts receivable, net	$	10,824		$	32,805		$	(4,597	)
Refundable income taxes		6,000			14,890			(20,890	)
Inventories		(54,594	)		(20,506	)		25,254
Prepaid income taxes		13,674			(13,674	)		—
Prepaid expenses and other assets		39,168			(25,075	)		(22,280	)
Amounts due from/to affiliated companies, net		(1,914	)		1,087			523
Accounts payable		(18,418	)		9,081			11,967
Derivative liability		—			—			(9,098	)
Accrued liabilities		(780	)		(24	)		1,799
Income taxes payable		7,397			(8,587	)		(20,344	)
Sales, use and fuel taxes payable		2,823			1,303			(2,645	)
Total Change	$	4,180		$	(8,700	)	$	(40,311	)
Cash paid during the period for:
Interest	$	25,543		$	25,561		$	38,806
Income taxes	$	17,871		$	49,366		$	135,412
Non-cash investing and financing activities:
Deferred integrity and replacement costs	$	—		$	28,630		$	—
Property additions and capital leases	$	1,605		$	241		$	15,037

See accompanying notes to consolidated financial statements.

45

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

The consolidated financial statements include the accounts of United Refining Company and its subsidiaries, United Refining Company of Pennsylvania and its subsidiaries, United Biofuels, Inc. and Kiantone Pipeline Corporation (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

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

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

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

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investment securities with maturities of three months or less at date of acquisition to be cash equivalents.

Derivative Instruments

From time to time the Company uses derivatives to reduce its exposure to fluctuations in crude oil purchase costs and refining margins. Derivative products, historically crude oil option contracts (puts) and crackspread option contracts have been used to hedge the volatility of these items. The Company does not enter such contracts for speculative purposes. The Company accounts for changes in the fair value of its contracts by marking them to market and recognizing any resulting gains or losses in its Statement of Operations. The Company includes the carrying amounts of the contracts in derivative liability in its Consolidated Balance Sheet.

At August 31, 2015, the Company had no derivative instruments outstanding as part of its risk management strategy.

For the fiscal years ended August 31, 2015, 2014 and 2013 the Company recognized $0, $0 and $2,319,000 of losses in costs and expenses in its Consolidated Statements of Operations.

Inventories and Exchanges

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

Property, Plant and Equipment

Property, plant and equipment is stated at cost and depreciated by the straight-line method over the respective estimated useful lives. Routine current maintenance, repairs and replacement costs are charged against

46

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

income. Expenditures which materially increase values, expand capacities or extend useful lives are capitalized. A summary of the principal useful lives used in computing depreciation expense is as follows:

	Estimated Useful Lives (Years)
Refining		20-30
Marketing		15-30
Transportation		20-30

Leases

The Company leases land, buildings, and equipment under long-term operating and capital leases and accounts for the leases in accordance with ASC 360-10-30-8. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term. The lease term begins on the date the Company has the right to control the use of the leased property pursuant to the terms of the lease.

Deferred Integrity and Replacement Costs

The Company and Kiantone Pipeline Corporation, a subsidiary of the Company, and Enbridge Energy Limited Partnership (“EELP”) and Enbridge Pipelines, Inc. (“EPI” and, together with EELP, the “Carriers”), entered into a letter agreement dated July 31, 2014, as amended, (the “Letter Agreement”) with respect to a pipeline (“Line 10”) owned by the Carriers, which transports crude oil from Canada to the Company’s Kiantone Pipeline. Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10, and agreed to pay for half the cost of replacing certain portions of Line 10.

The integrity and replacement costs, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which is approximately 11 years. As of August 31, 2015 and 2014, net deferred integrity and replacement costs amounted to $58,634,000 and $64,916,000, respectively. Amortization expense of $6,282,000, $524,000 and $0 is included in depreciation and amortization for the fiscal years ended August 31, 2015, 2014 and 2013, respectively.

Deferred Maintenance Turnarounds

The cost of maintenance turnarounds, which consist of complete shutdown and inspection of significant units of the refinery at intervals of two or more years for necessary repairs and replacements, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which ranges from 2 to 10 years. As of August 31, 2015 and 2014, deferred turnaround costs included in Deferred Turnaround Costs and Other Assets, amounted to $28,489,000 and $39,352,000, which are net of accumulated amortization of $20,888,000 and $10,616,000, respectively. Amortization expense included in Costs of Goods Sold for the fiscal years ended August 31, 2015, 2014 and 2013 amounted to $14,479,000, $11,319,000 and $7,082,000, respectively.

Amortizable Intangible Assets

The Company amortizes identifiable intangible assets such as brand names, non-compete agreements, leasehold covenants and deed restrictions on a straight line basis over their estimated useful lives which range from 5 to 25 years.

Revenue Recognition

Revenues for products sold by the wholesale segment are recorded upon delivery of the products to our customers, at which time title to those products is transferred and when payment has either been received or

47

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

collection is reasonably assured. At no point do we recognize revenue from the sale of products prior to the transfer of its title. Title to product is transferred to the customer at the shipping point, under pre-determined contracts for sale at agreed upon or posted prices to customers of which collectability is reasonably assured. Revenues for products sold by the retail segment are recognized immediately upon sale to the customer. Included in Net Sales and Costs of Goods Sold are consumer excise taxes of $246,636,000, $238,332,000 and $225,125,000 for the years ended August 31, 2015, 2014 and 2013, respectively.

Cost Classifications

Our Costs of Goods Sold (which excludes depreciation and amortization on property, plant and equipment and losses on derivative contracts) include Refining Cost of Products Sold and related Refining Operating expenses.

Refining Cost of Products Sold includes cost of crude oil, other feedstocks, blendstocks, the cost of purchased finished products, amortization of turnaround costs, transportation costs and distribution costs. Retail Cost of Products Sold include cost for motor fuels and for merchandise. Motor fuel cost of products sold represents net cost for purchased fuel. Merchandise cost of products sold includes merchandise purchases, net of merchandise rebates and inventory shrinkage. Wholesale cost of products sold includes the cost of fuel and lubricants, transportation and distribution costs and labor.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company’s results of operations are included in the consolidated Federal income tax return of the Parent and separately in various state jurisdictions. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. With few exceptions, the Company is no longer subject to income tax examinations by U.S. federal, state or local tax authorities for years before fiscal 2012. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of interest expense, net and other, net, respectively. No amounts of such expenses are currently accrued.

Post-Retirement Healthcare and Pension Benefits

The Company provides post-retirement healthcare benefits to salaried and certain hourly employees that retired prior to September 1, 2010. The benefits provided are hospitalization and medical coverage for the employee and spouse until age 65. Benefits continue until the death of the retiree, which results in the termination of benefits for all dependent coverage. If an employee leaves the Company as a terminated vested member of a pension plan prior to normal retirement age, the person is not entitled to any post-retirement healthcare benefits. Benefits payable under this program are secondary to any benefits provided by Medicare or any other governmental programs.

48

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In June 2010, the Company announced changes to the healthcare and pension plans provided to salaried employees. Effective September 1, 2010, postretirement medical benefits for new hires and active salaried employees retiring after September 1, 2010 were eliminated. Additionally, effective January 1, 2011, deductibles and co-payments were added to the medical benefits plan for all active and retired employees. For salaried employees meeting certain age and service requirements, the Company contributes a defined dollar amount towards the cost of retiree healthcare based upon the employee’s length of service. Similarly, effective August 31, 2010, benefits under the Company’s defined benefit pension plan were frozen for all salaried employees, including the Company’s Chief Executive Officer and Chief Financial Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan as well as a transition contribution for older employees. The changes made for the salary group described above were also incorporated into the collective bargaining agreement reached with the International Union of Operating Engineers, Local No.95 effective February 1, 2012.

The Company accrues post-retirement benefits other than pensions, during the years that the employee renders the necessary service, of the expected cost of providing those benefits to an employee and the employee’s beneficiaries and covered dependents.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts based on specifically identified amounts that we believe to be uncollectible. The Company also recorded additional allowances based on historical collection experience and its assessment of the general financial conditions affecting the customer base. Senior management reviews accounts receivable on a weekly basis to determine if any receivables will potentially be uncollectible. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Concentration Risks

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments.

The Company places its temporary cash investments with quality financial institutions. At times, such investments were in excess of FDIC insurance limits. The Company has not experienced any losses in such accounts.

The Company purchased approximately 15% and 14% of its cost of goods sold from one vendor during the fiscal years ended August 31, 2015 and 2014, respectively. The Company is not obligated to purchase from this vendor, and, if necessary, there are other vendors from which the Company can purchase crude oil and other petroleum based products. The Company had $0 and $0 in accounts payable for the years ended August 31, 2015 and 2014 to this vendor.

49

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Environmental Matters

The Company expenses environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures, which extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. The Company determines its liability on a site by site basis and records a liability at the time when it is probable and can be reasonably estimated. The Company’s estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. The estimated liability of the Company is not reduced for possible recoveries from insurance carriers and is recorded in accrued liabilities.

Goodwill and Other Non-Amortizable Assets

In accordance with ASC 350, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with ASC 350. Other definite lived intangible assets continue to be amortized over their estimated useful lives.

The Company performed separate impairment tests for its goodwill and tradename using the discounted cash flow method. The fair value of the Company’s reporting units exceeded their carrying values. The fair value of the tradename exceeded its carrying value. The Company has noted no subsequent indication that would require testing its goodwill and tradename for impairment.

Long-Lived Assets

Whenever events or changes in circumstances indicate that the carrying value of any of these assets (other than goodwill and tradename) may not be recoverable, the Company will assess the recoverability of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written down to fair value.

Other Comprehensive (Loss) Income

The Company reports comprehensive (loss) income in accordance with ASC 220-10. ASC 220-10 establishes guidelines for the reporting and display of comprehensive (loss) income and its components in financial statements. Comprehensive (loss) income includes charges and credits to equity that is not the result of transactions with the shareholder. Included in other comprehensive loss for the Company is a charge for unrecognized post-retirement costs, which is net of taxes in accordance with ASC 715. The accumulated other comprehensive loss balance is made up entirely of unrecognized post-retirement costs.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASU No. 2014-09 supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and

50

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 is effective for interim and annual periods beginning after December 15, 2017, with early application permitted only as of annual reporting periods beginning after December 31, 2016. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2014-09.

Reclassification

Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform with the presentation in the current year.

2. Accounts Receivable, Net

As of August 31, 2015 and 2014, accounts receivable were net of allowance for doubtful accounts of $850,000 and $1,070,000, respectively.

3. Inventories

Inventories consist of the following:

	August 31,
	2015		2014
	(in thousands)
Crude Oil	$	60,209	$	36,667
Petroleum Products		92,452		63,252
Total @ LIFO		152,661		99,919
Merchandise		24,277		23,983
Supplies		29,128		27,570
Total @ FIFO		53,405		51,553
Total Inventory	$	206,066	$	151,472

Included in petroleum product inventories are exchange balances either held for or due from other petroleum marketers. These balances are not significant.

The Company does not own sources of crude oil and depends on outside vendors for its needs.

As of August 31, 2015 and 2014, the replacement cost of LIFO inventories exceeded their LIFO carrying values by approximately $6,201,000 and $109,711,000, respectively. For the fiscal years ended August 31, 2015 and 2014, the Company recorded a charge to Costs of Goods Sold from a LIFO layer liquidation of $0 and $1,095,000, respectively.

51

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. Property, Plant and Equipment

Property, plant and equipment is summarized as follows:

	August 31,
	2015		2014
	(in thousands)
Refinery equipment	$	378,877	$	361,822
Marketing (i.e. retail outlets)		141,726		131,870
Transportation		12,951		12,477
Construction-in-progress		65,970		44,914
		599,524		551,083
Less: Accumulated depreciation		251,767		233,564
	$	347,757	$	317,519

On March 6, 2013, the Company, through its subsidiary United Biofuels, Inc. (“UBI”), acquired a partially completed 50 million gallon per year biodiesel facility in Brooklyn, New York as part of the acquisition by its parent company, United Refining, Inc., and United Metro Energy Corp. (“UMEC”), a subsidiary of the Company’s parent company of certain assets of Metro Fuel Oil Corp, and its affiliates. UBI has initiated the project to complete and modify the biodiesel plant. The Company paid $9,800,000 for such biodiesel facility. Due to the Company and UMEC having a common owner, the Company recorded the acquisition of the biodiesel facility based on the carrying value of all assets acquired by its parent and UMEC from Metro Fuel Oil Corp., or $20,735,000. The difference between the carrying value of the biodiesel facility and the amount paid by the Company has been recorded as a capital contribution net of the tax effect of $4,960,000. Commissioning the modified biodiesel plant is expected at the end of fiscal 2016. As of August 31, 2015 the remaining cost of the project is expected to be about $30,000,000.

5. Goodwill and Intangible Assets

As of August 31, 2015 and 2014, the Company’s trade name, goodwill and amortizable intangible assets, included in the Company’s retail segment, were as follows:

	Weighted Average Remaining Life		August 31, 2015				August 31, 2014
			Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in thousands)
Amortizable intangible assets:
Deed restrictions		11 yrs.	$	800	$	437	$	800	$	405
Leasehold covenants		7 yrs.		1,590		1,084		1,490		934
			$	2,390	$	1,521	$	2,290	$	1,339
Non-amortizable assets:
Tradename			$	10,500	$	—	$	10,500	$	—
Goodwill			$	1,349	$	—	$	1,349	$	—

Amortization expense for the fiscal years ended August 31, 2015, 2014 and 2013 amounted to $115,000, $106,000 and $107,000, respectively.

Amortization expense for intangible assets subject to amortization for each of the years in the five-year period ending August 31, 2020 is estimated to be $126,000, $127,000, $126,000, $127,000 and $67,000.

52

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Accrued Liabilities

Accrued liabilities include the following:

	August 31,
	2015		2014
	(in thousands)
Interest	$	119	$	104
Payrolls and benefits		15,974		16,972
Other		1,818		1,615
	$	17,911	$	18,691

7. Leases

The Company occupies premises, primarily retail gas stations and convenience stores and office facilities under long-term leases which require minimum annual rents plus, in certain instances, the payment of additional rents based upon sales. The leases generally are renewable for one to three five-year periods.

As of August 31, 2015 and 2014, capitalized lease obligations, included in long-term debt, amounted to $4,212,000 and $3,021,000, respectively, inclusive of current portion of $124,000 and $109,000, respectively. The related assets (retail gas stations and convenience stores) as of August 31, 2015 and 2014 amounted to $3,732,000 and $2,620,000, net of accumulated amortization of $956,000 and $869,000, respectively. Lease amortization amounting to $207,000, $185,000 and $145,000 for the years ended August 31, 2015, 2014 and 2013, respectively is included in depreciation and amortization expense.

Future minimum lease payments as of August 31, 2015 are summarized as follows:

Year ended August 31,	Capital Leases		Operating Leases
	(in thousands)
2016	$	713	$	13,409
2017		713		11,898
2018		713		9,638
2019		677		8,509
2020		641		6,163
Thereafter		7,667		11,049
Total minimum lease payments		11,124		60,666
Less: Minimum sublease rents		—		—
Net minimum lease payments		11,124	$	60,666
Less: Amount representing interest		6,912
Present value of net minimum lease payments	$	4,212

Net rent expense for operating leases amounted to $13,728,000, $13,243,000 and $13,135,000 for the years ended August 31, 2015, 2014 and 2013, respectively.

8. Credit Facility

On June 18, 2013, the Company amended its Revolving Credit Facility (“Amended and Restated Revolving Credit Facility”) with PNC Bank, National Association as Administrator (the “Agent”). The expiration date of

53

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

the Amended and Restated Revolving Credit Facility was extended to November 29, 2017 and the commitment fee on the unused balance of the facility was reduced to 0.25%. The maximum facility commitment remains at $175,000,000 and interest will now be calculated as follows: a) for base rate borrowings, at the greater of the Agent’s prime rate, federal funds open rate plus 0.5% or the daily LIBOR rate plus 1.0% plus the applicable margin of .75% to 1.75% and b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.25% to 3.25%. The applicable margin will vary depending on a formula calculating the Company’s unused availability under the facility.

The Amended and Restated Revolving Credit Facility continues to be secured primarily by certain cash accounts, accounts receivable and inventory which amounted to $268,914,000 as of August 31, 2015. Until maturity, the Company may borrow on a borrowing base formula as set forth in the facility. The participating banks in the Amended and Restated Revolving Credit Facility are PNC Bank, National Association, Bank of America, N.A., Manufacturers and Traders Trust Company, and Bank Leumi USA.

As of August 31, 2015 and 2014, there were no Base-Rate borrowings nor Euro-Rate borrowings outstanding under the agreement. $8,753,000 of letters of credit were outstanding under the agreement as of August 31, 2015 and 2014, respectively. The weighted average interest rate for Base-Rate borrowing for the years ended August 31, 2015 and 2014 was 4.00%, respectively. The weighted average interest rate for Euro-Rate borrowings for the years ended August 31, 2015 and 2014 was 0%. The Company pays a commitment fee of .25% per annum on the unused balance of the facility. All bank related charges are included in Other, net in its Consolidated Statements of Operations. See Note 21 to “Consolidated Financial Statements”.

9. Long-Term Debt

On August 30, 2013 the Company redeemed $127,750,000 aggregate principal amount of its outstanding $365,000,000 Senior Secured Notes due 2018. Funding for the redemption was provided by the Company’s sale of $141,163,750 aggregate principal amount of 6.00% Fixed Rate Cumulative Perpetual Preferred Stock Series A to URI, its parent (see Note 14). In accordance with the indenture governing the Senior Secured Notes due 2018, the Company obtained an opinion concerning the fairness from a financial point of view with the issuance of the Preferred Stock to URI.

The Senior Secured Notes due 2018 were redeemed at a redemption price of 110.50% of the principal amount thereof, plus accrued and unpaid interest to August 30, 2013. In connection with the redemption, a loss of $18,727,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $13,413,000, a write-off of deferred financing costs of $1,999,000 and a write-off of unamortized debt discount of $3,315,000.

On March 8, 2011, the Company sold $365,000,000 of Senior Secured Notes due 2018 for $352,020,600, resulting in original issue discount of $12,979,400, which is being amortized over the life of the Senior Secured Notes due 2018 using the interest method. The net proceeds of the offering of $344,249,000 were used to retire all of its outstanding 10 ¹/₂% Senior Notes due 2012, pay accrued interest of $3,400,000 and a redemption premium related thereto. A loss of $1,245,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $915,000, a write-off of unamortized net debt premium of $1,153,000 and a write-off of deferred financing costs of $1,483,000. The Senior Secured Notes due 2018 are guaranteed on an unsecured basis by all of the Company’s domestic subsidiaries existing at March 8, 2011. The Senior Secured Notes due 2018 are secured on a first-priority basis by the Company’s assets comprising its refinery located in Warren, Pennsylvania and the capital stock of its pipeline subsidiary, subject to permitted liens. The Senior Secured Notes due 2018 will rank equally with all of the Company’s existing and future senior indebtedness that is not subordinate in right of payment to the Senior Secured Notes due 2018.

Both the Indenture of the Senior Secured Notes and the facility (See Note 8 to “Consolidated Financial Statements”) require that the Company maintain certain financial covenants. The facility requires the Company

54

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

to meet certain financial covenants, as defined in the facility, a minimum Fixed Charge Coverage Ratio and a minimum Consolidated Net Worth. In addition, the facility limits the amount the Company can distribute for capital and operating leases. Both the facility and the Indenture of the Senior Secured Notes restrict the amount of dividends payable and the incurrence of additional Indebtedness. As of August 31, 2015 the Company is in compliance with covenants under the facility and the Indenture. Subsequent to August 31, 2015, the Company refinanced the Senior Secured Notes due 2018. See Note 21 to “Consolidated Financial Statements”.

A summary of long-term debt is as follows:

	August 31,
	2015		2014
	(in thousands)
Long-term debt:
10.50% Senior Secured Notes due February 28, 2018, net of unamortized discount of $3,791 and $5,036, respectively	$	233,459	$	232,214
Other long-term debt		7,208		7,311
		240,667		239,525
Less: Current installments of long-term debt		1,556		1,551
Total long-term debt, less current installments	$	239,111	$	237,974

The principal amount of long-term debt matures as follows:

	Year ended August 31,
	(in thousands)
2016	$	1,556
2017		1,071
2018		237,676
2019		345
2020		279
Thereafter		3,531
		244,458
Unamortized discount		3,791
Total	$	240,667

The following financing costs have been deferred and are being amortized to expense over the term of the related debt:

	August 31,
	2015		2014
	(in thousands)
Beginning balance	$	8,881	$	8,881
Current year additions		320		—
Total financing costs		9,201		8,881
Less:
Accumulated amortization		6,534		5,306
	$	2,667	$	3,575

Amortization expense for the fiscal years ended August 31, 2015, 2014 and 2013 amounted to $1,228,000, $1,228,000 and $1,669,000, respectively.

55

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. Employee Benefit Plans

The Company sponsors three defined benefit plans and seven defined contribution plans covering substantially all its full time employees. The benefits under the defined benefit plans are based on each employee’s years of service and compensation. Effective February 1, 2012 benefits under the Company’s defined benefit pension plan for hourly employees were frozen. Additionally, effective August 31, 2010 benefits under the Company’s defined benefit pension plan were frozen for all salaried employees, including the Company’s Chief Executive Officer and Chief Financial Officer. The Company will provide enhanced contributions under its defined contribution 401(k) plan as well as a transition contribution for older employees. The Company’s policy is to contribute the minimum amounts required by the Employee Retirement Income Security Act of 1974 (ERISA), as amended and any additional amounts for strategic financial purposes or to meet other goals relating to plan funded status. The assets of the plans are invested in an investment trust fund and consist of interest-bearing cash, separately managed accounts and bank common/collective trust funds.

In addition to the above, the Company provides certain post-retirement healthcare benefits to salaried and certain hourly employees that retired prior to September 1, 2010. These post-retirement benefit plans are unfunded and the costs are paid by the Company from general assets.

Net periodic pension cost and post-retirement healthcare benefit cost consist of the following components for the years ended August 31, 2015, 2014 and 2013:

	Pension Benefits									Other Post-Retirement Benefits
	2015			2014			2013			2015			2014			2013
	(in thousands)
Service cost	$	626		$	597		$	652		$	608		$	774		$	940
Interest cost on benefit obligation		4,850			5,204			4,511			1,656			2,072			1,884
Expected return on plan assets		(6,351	)		(5,569	)		(5,160	)		—			—			—
Amortization and deferrals		724			697			1,210			(3,152	)		(1,860	)		123
Net periodic benefit (income) cost	$	(151	)	$	929		$	1,213		$	(888	)	$	986		$	2,947

The Company adopted ASC 715-30-25 effective August 31, 2007. ASC 715-30-25 requires an employer to recognize the funded status of each of its defined pension and postretirement benefit plans as a net asset or liability in its statement of financial position with an offsetting amount in accumulated other comprehensive income, and to recognize changes in that funded status in the year in which changes occur through comprehensive income.

Other changes in plan assets and benefit obligation recognized in Other Comprehensive Income consist of the following for the fiscal years ended August 31, 2015 and 2014 (in thousands):

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
Current year actuarial (gain) / loss	$	15,160		$	4,702		$	(5,313	)	$	162
Amortization of actuarial gain / (loss)		(724	)		(697	)		(4,199	)		(5,073	)
Current year prior service (credit) / cost		—			—			—			(2,537	)
Amortization of prior service credit / (cost)		—			—			7,351			6,933
Total recognized in other comprehensive (income) / loss	$	14,436		$	4,005		$	(2,161	)	$	(515	)
Total recognized in net periodic benefit cost and other comprehensive (income)/loss	$	14,285		$	4,934		$	(3,049	)	$	471

56

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the change in benefit obligations and fair values of plan assets for the years ended August 31, 2015 and 2014:

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
	(in thousands)
Change in benefit obligation:
Benefit obligation @ beginning of year	$	119,209		$	107,141		$	43,713		$	45,700
Service cost		626			597			608			774
Interest cost		4,850			5,204			1,656			2,073
Plan amendments		—			—			—			(2,538	)
Curtailment		—			(69	)		—			—
Medicare part D subsidy on benefits paid		—			—			148			—
Actuarial (gains) / losses		5,299			10,816			(5,313	)		162
Benefits paid		(5,494	)		(4,480	)		(2,599	)		(2,458	)
Projected benefit obligation @ end of year		124,490			119,209			38,213			43,713
Change in plan assets:
Fair values of plan assets @ beginning of year		93,245			80,224			—			—
Actual return on plan assets		(3,509	)		11,613			—			—
Company contributions		4,372			5,888			2,599			2,458
Benefits paid		(5,494	)		(4,480	)		(2,599	)		(2,458	)
Fair values of plan assets @ end of year		88,614			93,245			—			—
Unfunded status	$	35,876		$	25,964		$	38,213		$	43,713
Amounts recognized in the balance sheet consist of:
Current liability	$	—		$	—		$	2,520		$	2,839
Noncurrent liability		35,876			25,964			35,693			40,874
Net amount recognized	$	35,876		$	25,964		$	38,213		$	43,713
Note: For plans with assets less than the accumulated benefit obligation (ABO), the aggregate ABO is $124,490,000 and $119,209,000, while the aggregate asset value is $88,614,000 and $93,245,000 for the years ended August 31, 2015 and 2014, respectively.

Amounts recognized in Accumulated Other Comprehensive Income:

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
	(in thousands)
Accumulated net actuarial loss	$	(43,848	)	$	(29,411	)	$	(19,953	)	$	(29,465	)
Accumulated prior service cost		—			—			35,371			42,722
Net amount recognized, before tax effect	$	(43,848	)	$	(29,411	)	$	15,418		$	13,257

The preceding table presents two measures of benefit obligations for the pension plans. Accumulated benefit obligation (ABO) generally measures the value of benefits earned to date. Projected benefit obligation (PBO)

57

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

also includes the effect of assumed future compensation increases for plans in which benefits for prior service are affected by compensation changes. Each of the three pension plans, whose information is aggregated above, have asset values less than these measures. Plan funding amounts are calculated pursuant to ERISA and Internal Revenue Code rules. The postretirement benefits are not funded.

Weighted average assumptions used to determine year end benefit obligations:

	Pension Benefits				Other Post-Retirement Benefits
	2015		2014		2015		2014
Discount rate		4.40% - 4.50%		4.00% - 4.20%		4.15%		3.85%
Rate of compensation increase		3.00%		3.00%		N/A		N/A
Health care cost trend
Initial trend		N/A		N/A		7.00%		7.00%
Ultimate trend		N/A		N/A		5.00%		5.00%
Year ultimate reached		N/A		N/A		2025		2025

The discount rate assumptions at August 31, 2015 and 2014 were determined independently for each plan. A yield curve was produced for a universe containing the majority of U.S.-issued Aa-graded corporate bonds, all of which were non-callable (or callable with make-whole provisions). For each plan, the discount rate was developed as the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments.

Weighted average assumptions used to determine net periodic costs:

	Pension Benefits				Other Post-Retirement Benefits
	2015		2014		2015		2014
Discount rate		4.00% - 4.20%		4.80% - 5.00%		3.85%		4.60%
Expected return on plan assets		5.00% - 7.00%		5.00% - 7.00%		N/A		N/A
Rate of compensation increase		3.00%		3.00%		N/A		N/A
Health care cost trend
Initial trend		N/A		N/A		7.00%		7.00%
Ultimate trend		N/A		N/A		5.00%		5.00%
Year ultimate reached		N/A		N/A		2025		2022

For measurement purposes, the assumed annual rate of increase in the per capita cost of covered medical and dental benefits was 7.00% and 7.00% for 2015 and 2014, respectively. The rates were assumed to decrease gradually to 5% for medical benefits until 2025 and remain at that level thereafter. The healthcare cost trend rate assumption has a significant effect on the amounts reported. To illustrate, a 1 percentage point change in the assumed healthcare cost trend rate would have the following effects:

	1% Point Increase		1% Point Decrease
	(in thousands)
Effect on total of service and interest cost components	$	51	$	(49	)
Effect on post-retirement benefit obligation	$	1,419	$	(1,332	)

The expected return on plan assets is a long-term assumption established by considering historical and anticipated returns of the asset classes invested in by the pension plans and the allocation strategy currently in place among those classes.

58

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A reconciliation of the above accrued benefit costs to the consolidated amounts reported on the Company’s Consolidated Balance Sheets follows:

	August 31,
	2015			2014
	(in thousands)
Accrued pension benefits	$	35,876		$	25,964
Accrued other post-retirement benefits		38,213			43,713
		74,089			69,677
Current portion of above benefits, included in payrolls and benefits in accrued liabilities		(2,520	)		(2,839	)
Supplemental pension and other deferred compensation benefits		231			283
Deferred retirement benefits	$	71,800		$	67,121

Fair Value of Plan Assets

Our Defined Benefit plans’ assets fall into any of three fair value classifications as defined in ASC 820-10. Level 1 assets are valued based on observable prices for identical assets in active markets such as national security exchanges. Level 2 assets are valued based on a) quoted prices of similar assets in active markets, b) quoted prices for similar assets in inactive markets, c) other than quoted prices that are observable for the asset, or d) values that are derived principally from or corroborated by observable market data by correlation or other means. There are no Level 3 assets held by the plans as defined by ASC 820-10. The fair value of our plan assets as of August 31, 2015 and 2014 is as follows (in thousands):

Asset Category	August 31, 2015		Level 1		Level 2		Level 3
Cash Equivalents	$	222	$	222	$	—	$	—
Mutual Funds		57,364		57,364		—		—
Equities		31,028		31,028		—		—
Fixed Income		—		—		—		—
Total	$	88,614	$	88,614	$	—	$	—

Asset Category	August 31, 2014		Level 1		Level 2		Level 3
Cash Equivalents	$	180	$	180	$	—	$	—
Mutual Funds		45,634		45,634		—		—
Equities		47,431		47,431		—		—
Fixed Income		—		—		—		—
Total	$	93,245	$	93,245	$	—	$	—

59

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The pension plans weighted-average target allocation for the year ended August 31, 2015 and strategic asset allocation matrix as of August 31, 2015 and 2014 are as follows:

	Target Allocation			Plan Assets @ 8/31
Asset Category	2015			2015			2014
Equity Securities		50 - 75	%		67	%		51	%
Debt Securities		20 - 50	%		25	%		49	%
Alternative Investments		0 - 15	%		7	%		0	%
Cash/Cash Equivalents		0 - 10	%		1	%		0	%
					100	%		100	%

The investment policy for the plans is formulated by the Company’s Pension Plan Committee (the “Committee”). The Committee is responsible for adopting and maintaining the investment policy, managing the investment of plan assets and ensuring that the plans’ investment program is in compliance with all provisions of ERISA, as well as the appointment of any investment manager who is responsible for implementing the plans’ investment process.

In drafting a strategic asset allocation policy, the primary objective is to invest assets in a prudent manner to meet the obligations of the plans to the Company’s employees, their spouses and other beneficiaries, when the obligations come due. The stability and improvement of the plans’ funded status is based on the various reasons for which money is funded. Other factors that are considered include the characteristics of the plans’ liabilities and risk-taking preferences.

The asset classes used by the plan are the United States equity market, the international equity market, the United States fixed income or bond market and cash or cash equivalents. Plan assets are diversified to minimize the risk of large losses. Cash flow requirements are coordinated with the custodian trustees and the investment manager to minimize market timing effects. The asset allocation guidelines call for a maximum and minimum range for each broad asset class as noted above.

The target strategic asset allocation and ranges established under the asset allocation represents a long-term perspective. The Committee will rebalance assets to ensure that divergences outside of the permissible allocation ranges are minimal and brief as possible.

The net of investment manager fee asset return objective is to achieve a return earned by passively managed market index funds, weighted in the proportions identified in the strategic asset allocation matrix. Each investment manager is expected to perform in the top one-third of funds having similar objectives over a full market cycle.

The investment policy is reviewed by the Committee at least annually and confirmed or amended as needed.

Under ASC 715-30-25, the transition obligation, prior service costs, and actuarial (gains)/losses are recognized in Accumulated Other Comprehensive Income each August 31 or any interim measurement date, while amortization of these amounts through net periodic benefit cost will occur in accordance with ASC 715-30 and ASC 715-60. The estimated amounts that will be amortized in 2016 are as follow:

Estimated 2016 Amortization	Pension Benefits		Other Post-Retirement Benefits
	(in thousands)
Prior service cost (credit) amortization	$	—	$	(7,351	)
Net loss amortization		1,270		2,789
Total	$	1,270	$	(4,562	)

60

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following contributions and benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Pension Benefits		Other Post-Retirement Benefits
Employer Contributions			Gross		(Subsidy receipts)
	(in thousands)
FYE 8/31/2016 (expected)	$	4,922	$	2,481	$	(261	)
Expected Benefit Payments for FYE 8/31
2016	$	5,820	$	2,572	$	(261	)
2017		6,190		2,712		(294	)
2018		6,450		2,933		(326	)
2019		6,823		3,252		(361	)
2020		7,205		3,629		(395	)
2021 - 2025		39,369		22,135		(429	)

The pension plan contributions are deposited into a trust, and the pension plan benefit payments are made from trust assets. For the postretirement benefit plan, the contributions and the benefit payments are the same and represent expected benefit amounts, which are paid from general assets.

The Company’s postretirement benefit plan is affected by The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”). Beginning in 2006, the Act provides a Federal subsidy payment to companies providing benefit plans that meet certain criteria regarding their generosity. The Company expects to receive those subsidy payments. The Company has accounted for the Act in accordance with ASC 715-60-05-8, which requires, in the Company’s case, recognition on August 31, 2004. The benefit obligation as of that date reflects the effect of the federal subsidy, and this amount is identified in the table reconciling the change in benefit obligation above. The estimated effect of the subsidy on cash flow is shown in the accompanying table of expected benefit payments above. The expected subsidy reduced net periodic postretirement benefit cost by $4,185,000, as compared with the amount calculated without considering the effects of the subsidy.

The Company also contributes to voluntary employee savings plans through regular monthly contributions equal to various percentages of the amounts invested by the participants. The Company’s contributions to these plans amounted to $2,767,000, $2,752,000 and $2,604,000 for the years ended August 31, 2015, 2014 and 2013, respectively.

61

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

11. Income Taxes

Income tax expense consists of:

	Year Ended August 31,
	2015		2014		2013
	(in thousands)
Federal:
Current	$	25,298	$	20,431	$	78,569
Deferred		16,671		14,453		4,154
		41,969		34,884		82,723
State:
Current		599		4,619		17,154
Deferred		2,909		4,323		(1,533	)
		3,508		8,942		15,621
	$	45,477	$	43,826	$	98,344

Reconciliation of the differences between income taxes computed at the Federal statutory rate and the provision for income taxes attributable to income before income tax expense is as follows:

	Year Ended August 31,
	2015			2014			2013
	(in thousands)
U. S. federal income taxes at the statutory rate	$	44,649		$	40,243		$	93,465
State income taxes, net of Federal benefit		2,245			5,758			10,113
Domestic production activity deduction		(1,225	)		(2,068	)		(5,391	)
Permanent items		538			405			863
Employment credits		(703	)		(845	)		(722	)
Other		(27	)		333			16
Income tax expense	$	45,477		$	43,826		$	98,344

62

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Deferred income tax liabilities (assets) are comprised of the following:

	August 31,
	2015			2014
	(in thousands)
Current deferred income tax liabilities (assets):
Inventory valuation	$	6,911		$	5,901
Accounts receivable allowance		(348	)		(442	)
Accrued liabilities		(3,312	)		(3,863	)
Other		2,571			1,214
		5,822			2,810
Deferred income tax liabilities (assets):
Property, plant and equipment		87,765			71,540
Accrued liabilities		(28,740	)		(26,924	)
State net operating loss carryforwards		(7,695	)		(7,927	)
Valuation allowance		2,577			2,837
Other		2,014			4,614
		55,921			44,140
Net deferred income tax liability	$	61,743		$	46,950

The Company’s results of operations are included in the consolidated Federal tax return of the Parent, See Note 13 to “Consolidated Financial Statements”. The Company has no Federal net operating loss carryforwards for regular tax purposes. For state purposes, two entities have Pennsylvania net operating loss carry forwards of $78,000,000 and $40,000,000, respectively, which will expire between fiscal year 2022 and 2031. Pennsylvania limits the amount of net operating loss carry forwards which can be used to offset Pennsylvania taxable income to the greater of $4,000,000 or 25% of Pennsylvania taxable income prior to the net operating loss deduction. Due to these limitations, the Company has recognized valuation allowances, net of a federal benefit, of $2,577,000 and $2,837,000 at August 31, 2015 and 2014, respectively, for Pennsylvania net operating loss carry forwards not anticipated to be realized before expiration.

12. Disclosures About Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

The carrying amount of cash and cash equivalents, trade accounts receivable, the revolving credit facility and current liabilities approximate fair value because of the short maturity of these instruments. Derivative financial instruments are recorded at fair value using significant other observable inputs (Level 2).

The fair value of long-term debt (See Note 9 to “Consolidated Financial Statements”) was determined using the fair market value of the individual debt instruments. As of August 31, 2015, the carrying amount and estimated fair value of these debt instruments approximated $240,667,000 and $257,303,000, respectively.

13. Stockholder’s Equity

On July 26, 2013, the Board of Directors of the Company and the Company’s sole stockholder, URI, approved, and the Company filed with the Secretary of State of the Commonwealth of Pennsylvania, an Amended and Restated Articles of Incorporation of the Company (the “Amendment”). Pursuant to the

63

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amendment, the capital stock of the Company was increased from 100 to 50,100, of which 50,000 were designated as preferred stock.

Out of the preferred stock, the Board of Directors created the 6% Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) and the Amendment included the designations of the rights and preferences of such series. Among other things, the Series A Preferred Stock, of which the Company is authorized to issue a maximum of 25,000, carry the following rights:

• The Series A Preferred Stock rank: (i) senior to the Company’s common stock; (ii) senior to all other classes of equity securities other than preferred stock which by their terms do not rank senior to the Series A Preferred Stock; and (iii) on parity with any other series of the Company’s preferred stock that does not provide it ranks junior to the Series A Preferred Stock;

• The Series A Preferred Stock shall receive dividends at a rate of 6.00% of the Stated Value (which is $10,000) per share per annum;

• The Series A Preferred Stock shall have no voting rights unless otherwise required by law except in limited circumstances relating to amendments to URC’s certificate of incorporation or amendments to the rights and preferences of the Series A Preferred Stock;

• In the event dividends have not been paid in the aggregate amount payable for six or more Dividends Periods, holders of the Series A Preferred Stock shall be entitled to elect two directors to the Board of Directors, who shall remain directors until all accumulated and unpaid dividends on the Series A Preferred Stock have been paid in full or set aside for payment. Upon the payment or set aside of such dividends, the term of office of the directors appointed by the holders of the Series A Preferred Stock shall terminate and the size of the Board of Directors shall automatically decrease by two; and

• The Series A Preferred Stock are perpetual and have no maturity date. However, the Company may, at its option, redeem shares of the Series A Preferred Stock, in whole or in part, on any Dividend Repayment Date on or after July 26, 2023 at a price of $10,000 per share plus accrued and unpaid dividends.

On July 26, 2013, the Company issued 14,116.375 shares of Series A $1,000 par value per share to United Refining, Inc., its parent. The proceeds from the issuance in the amount of $141,163,750 were used to redeem $127,750,000 of the Company’s Senior Secured Notes due 2018, which redemption occurred on August 30, 2013. In accordance with the Indenture governing the Senior Secured Notes due 2018, the Company obtained an opinion concerning the fairness from a financial point of view of the issuance of the Series A Preferred Stock to URI.

14. Transactions with Affiliated Companies

On December 21, 2001, the Company acquired the operations and working capital assets of Country Fair. The fixed assets of Country Fair were acquired by related entities controlled by John A. Catsimatidis, the indirect sole shareholder of the Company. These assets are being leased to the Company at an annual aggregate rental fee which management, based on an independent third party valuation believes is fair, over a period ranging from 10 to 20 years. During the fiscal years ended August 31, 2015, 2014 and 2013, $5,360,000, $5,360,000 and $5,319,000 of rent payments were made to these related entities. The Company is not a guarantor on the underlying mortgages on the properties.

Concurrent with the above acquisition of Country Fair, the Company entered into a management agreement with a non-subsidiary affiliate to operate and manage 10 of the retail units owned by the non-subsidiary affiliate on a turn-key basis. For the years ended August 31, 2015, 2014 and 2013, the Company billed the affiliate $1,301,000, $1,207,000 and $1,229,000 for management fees and overhead expenses incurred in the management

64

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

and operation of the retail units which amount was deducted from expenses. As of August 31, 2015 and 2014, the Company had a payable to the affiliate of $296,000 and $151,000, respectively, under the terms of the agreement, which is included in Amounts Due To/From Affiliated Companies, Net.

On September 29, 2000, the Company sold 42 retail units to an affiliate for $23,870,000. Concurrent with this asset sale, the Company terminated the leases on 8 additional retail locations which it had previously leased from a non-subsidiary affiliate. The Company has entered into a management agreement with the non-subsidiary affiliate to operate and manage the retail units owned by the non-subsidiary affiliate on a turnkey basis. For the years ended August 31, 2015, 2014 and 2013, the Company billed the affiliate $2,325,000, $2,165,000 and $2,219,000, respectively, for management fees and overhead expenses incurred in the management and operation of the 51 retail units, which amount was deducted from expenses. For the fiscal years ended August 31, 2015, 2014 and 2013, net sales to the affiliate amounted to $131,326,000, $191,828,000 and $207,104,000, respectively. As of August 31, 2015 and 2014, the Company had a payable to the affiliate of $1,106,000 and $1,355,000, respectively, under the terms of the agreement, which is included in Amounts Due To/From Affiliated Companies, net.

The Company paid a service fee relating to certain costs incurred by its Parent for the Company’s New York office. During the years ended August 31, 2015, 2014 and 2013, such fees amounted to approximately $2,000,000, $2,000,000, and $2,000,000, respectively, which is included in Selling, General and Administrative Expenses.

The Company joins with the Parent and the Parent’s other subsidiaries in filing a Federal income tax return on a consolidated basis. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. Amounts related to the Tax Sharing Agreement for the utilization by the Company of certain tax attributes of the Parent and other subsidiaries related to the tax years ended August 31, 2015, 2014 and 2013 amounted to $36,000, $(3,034,000) and $1,996,000, respectively and have been recorded as a capital contribution (distribution). As of August 31, 2015 and 2014, the Company had a receivable from the Parent of $2,500,000 and $0, respectively, under the terms of the Tax Sharing Agreement.

During the years ended August 31, 2015, 2014 and 2013, the Company incurred $420,000, $420,000 and $420,000, respectively, as its share of occupancy expenses for its offices in New York that it shares with affiliates of the Company. Such offices are located in a building owned by John A. Catsimatidis.

On July 26, 2013, the Company issued and sold to URI, its sole stockholder and parent, 14,116.375 shares of the Series A Preferred Stock for an aggregate purchase price of $141,163,750 in accordance with the terms and provisions of a Subscription Agreement by and between the Company and URI. The Subscription Agreement contained customary representations and warranties concerning the acquisition of the Series A Preferred Stock by URI and restrictions on the transfer of the Series A Preferred Stock. See Note 13, Stockholders’ Equity, for a description of the terms of the Series A Preferred Stock.

During the years ended August 31, 2015, 2014 and 2013 the Company made $200,000, $200,000 and $152,000, respectively, of rent payments to a related entity for the lease of a convenience store.

During the years ended August 31, 2015, 2014 and 2013, the Company paid $4,774,000, $4,399,000 and $0, respectively, to a related captive insurance company (“Captive”). The Captive was established in fiscal 2014 and will provide the Company with “stop-loss” protection in the area of worker’s compensation, general liability and automobile liability.

During the year ended August 31, 2015, the Company made payments to an insurance company for two of its affiliates totaling $283,000, which is included as a receivable in Amounts Due From Affiliated Companies, net.

65

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During the year ended August 31, 2015, the Parent made payments to an insurance company on behalf of the Company totaling $900,000, which is included as a payable in Amounts Due From Affiliated Companies, net.

The Company receives engineering services from a subsidiary of our Parent company to assist with the construction of its biodiesel facility in Brooklyn, New York. During the fiscal years ended August 31, 2015 and 2014 the Company paid $349,000 and $475,000 to this entity for such services. At August 31, 2015, the Company had a payable to the Parent subsidiary of $88,000.

15. Environmental Matters and Other Contingencies

The Company is subject to federal, state and local laws and regulations relating to pollution and protection of the environment such as those governing releases of certain materials into the environment and the storage, treatment, transportation, disposal and clean-up of wastes, including, but not limited to, the Federal Clean Water Act, as amended, the Clean Air Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and analogous state and local laws and regulations.

Due to the nature of the Company’s business, the Company is and will continue to be subject to various environmental claims, legal actions and actions by regulatory authorities. In the opinion of management, all current matters are without merit or are of such kind or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated financial condition or operations of the Company.

The management of the Company believes that remediation and related environmental response costs incurred during the normal course of business, including contractual obligations as well as activities required under applicable law and regulation, will not have a material adverse effect on its consolidated financial condition or operations.

In addition to the foregoing proceedings, the Company and its subsidiaries are parties to various legal proceedings that arise in the ordinary course of their respective business operations. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that unfavorable dispositions would not have a material adverse effect on the consolidated financial position or results of operations of the Company.

The Company also closely monitors all climate change and Greenhouse Gas (“GHG”) legislation, better known as Cap and Trade as well as fuels mandates requiring the increased use of renewable resources in motor fuel. The Company believes, however, that implementation of reasonable, incremental changes over time will not have a material adverse effect on the Company’s consolidated financial position or operations. The ultimate cost of GHG reduction mandates and their effect on our business are, however, unknown until implementing regulations are available. Similarly, the costs of compliance with renewable fuels mandates in the future remains unknown until a final regulatory structure has been adopted.

16. Segments of Business

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

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

66

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The accounting policies of the reportable segments are the same as those described in Footnote 1 to Consolidated Financial Statements. Intersegment revenues are calculated using market prices and are eliminated upon consolidation. Summarized financial information regarding the Company’s reportable segments is presented in the following table.

	Year Ended August 31,
	2015		2014		2013
	(in thousands)
Net Sales
Retail	$	1,347,291	$	1,688,467	$	1,721,625
Wholesale		1,369,428		1,750,751		1,959,628
	$	2,716,719	$	3,439,218	$	3,681,253
Intersegment Sales
Wholesale	$	566,853	$	875,264	$	904,526
Operating Income
Retail	$	32,362	$	14,502	$	7,520
Wholesale		125,683		129,675		321,088
	$	158,045	$	144,177	$	328,608
Depreciation, Amortization and Asset Impairments
Retail	$	7,288	$	6,566	$	6,153
Wholesale		34,266		25,238		20,724
	$	41,554	$	31,804	$	26,877
Capital Expenditures (including non-cash portion)
Retail	$	13,635	$	11,271	$	17,065
Wholesale		38,219		38,234		39,569
	$	51,854	$	49,505	$	56,634
	August 31,
	2015		2014
Total Assets
Retail	$	178,200	$	186,277
Wholesale		707,266		684,187
	$	885,466	$	870,464

17. Subsidiary Guarantors

All the Company’s wholly-owned subsidiaries fully and unconditionally guarantee on an unsecured basis, on a joint and several basis, the Company’s 10.50% Senior Secured Notes due 2018. There are no restrictions within the consolidated group on the ability of the Company or any of its subsidiaries to obtain loans from or pay dividends to other members of the consolidated group. Financial information of the Company’s wholly-owned subsidiary guarantors is as follows:

67

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2015
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Assets
Current:
Cash and cash equivalents	$	106,237		$	10,791		$	—		$	117,028
Accounts receivable, net		51,196			30,371			—			81,567
Inventories, net		176,320			29,746			—			206,066
Prepaid expenses and other assets		20,785			7,215			—			28,000
Amounts due from affiliated companies, net		1,883			(1,490	)		—			393
Intercompany		18,008			77,563			(95,571	)		—
Total current assets		374,429			154,196			(95,571	)		433,054
Property, plant and equipment, net		217,375			130,382			—			347,757
Deferred financing costs, net		2,667			—			—			2,667
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets, net		—			869			—			869
Deferred integrity and replacement costs, net		58,634			—			—			58,634
Deferred turnaround costs & other assets		25,410			5,226			—			30,636
Investment in subsidiaries		108,972			—			(108,972	)		—
	$	787,487		$	302,522		$	(204,543	)	$	885,466
Liabilities and Stockholder’s Equity
Current:
Current installments of long-term debt	$	447		$	1,109		$	—		$	1,556
Accounts payable		24,244			20,589			—			44,833
Accrued liabilities		10,856			7,055			—			17,911
Income taxes payable		(33,092	)		40,489			—			7,397
Sales, use and fuel taxes payable		18,366			5,007			—			23,373
Deferred income taxes		6,560			(738	)		—			5,822
Intercompany		—			95,571			(95,571	)		—
Total current liabilities		27,381			169,082			(95,571	)		100,892
Long term debt: less current installments		233,911			5,200			—			239,111
Deferred income taxes		39,179			16,742			—			55,921
Deferred retirement benefits		69,274			2,526			—			71,800
Total liabilities		369,745			193,550			(95,571	)		467,724
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share-shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Preferred stock; $1,000 par value per share—shares authorized 25,000; issued and outstanding 14,116		14,116			—			—			14,116
Additional paid-in capital		156,846			16,626			(16,626	)		156,846
Retained earnings		263,464			93,978			(93,978	)		263,464
Accumulated other comprehensive loss		(16,684	)		(1,650	)		1,650			(16,684	)
Total stockholder’s equity		417,742			108,972			(108,972	)		417,742
	$	787,487		$	302,522		$	(204,543	)	$	885,466

68

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2014
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Assets
Current:
Cash and cash equivalents	$	79,356		$	19,681		$	—		$	99,037
Accounts receivable, net		51,452			40,939			—			92,391
Refundable income taxes		6,000			—			—			6,000
Inventories, net		122,161			29,311			—			151,472
Prepaid income taxes		16,918			(3,244	)		—			13,674
Prepaid expenses and other assets		62,889			4,279			—			67,168
Intercompany		127,105			1,116			(128,221	)		—
Total current assets		465,881			92,082			(128,221	)		429,742
Property, plant and equipment, net		199,703			117,816			—			317,519
Deferred financing costs, net		3,575			—			—			3,575
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets, net		—			951			—			951
Deferred integrity and replacement costs, net		64,916			—			—			64,916
Deferred turnaround costs & other assets		39,302			2,610			—			41,912
Investment in subsidiaries		35,811			—			(35,811	)		—
	$	809,188		$	225,308		$	(164,032	)	$	870,464
Liabilities and Stockholder’s Equity
Current:
Current installments of long-term debt	$	519		$	1,032		$	—		$	1,551
Accounts payable		64,965			26,916			—			91,881
Accrued liabilities		12,315			6,376			—			18,691
Sales, use and fuel taxes payable		16,037			4,513			—			20,550
Deferred income taxes		3,770			(960	)		—			2,810
Amounts due to affiliated companies, net		—			1,521			—			1,521
Intercompany		—			128,221			(128,221	)		—
Total current liabilities		97,606			167,619			(128,221	)		137,004
Long term debt: less current installments		232,946			5,028			—			237,974
Deferred income taxes		28,816			15,324			—			44,140
Deferred retirement benefits		65,595			1,526			—			67,121
Total liabilities		424,963			189,497			(128,221	)		486,239
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share—shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Preferred stock; $1,000 par value per share—shares authorized 25,000; issued and outstanding 14,116		14,116			—			—			14,116
Additional paid-in capital		156,810			16,626			(16,626	)		156,810
Retained earnings		222,495			20,143			(20,143	)		222,495
Accumulated other comprehensive loss		(9,196	)		(976	)		976			(9,196	)
Total stockholder’s equity		384,225			35,811			(35,811	)		384,225
	$	809,188		$	225,308		$	(164,032	)	$	870,464

69

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2015
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	1,936,281		$	1,439,016		$	(658,578	)	$	2,716,719
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)		1,837,318			1,173,291			(658,578	)		2,352,031
Selling, general and administrative expenses		25,182			139,907			—			165,089
Depreciation and amortization expense		33,191			8,363			—			41,554
		1,895,691			1,321,561			(658,578	)		2,558,674
Operating income		40,590			117,455			—			158,045
Other expense:
Interest expense, net		(25,621	)		(1,027	)		—			(26,648	)
Other, net		(4,087	)		218			—			(3,869	)
Equity in net income of subsidiaries		73,834			—			(73,834	)		—
		44,126			(809	)		(73,834	)		(30,517	)
Income before income tax expense		84,716			116,646			(73,834	)		127,528
Income tax (benefit) expense
Current		(14,845	)		40,742			—			25,897
Deferred		17,510			2,070			—			19,580
		2,665			42,812			—			45,477
Net income	$	82,051		$	73,834		$	(73,834	)	$	82,051

70

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2014
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	2,626,015		$	1,692,936		$	(879,733	)	$	3,439,218
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)		2,445,839			1,534,367			(879,733	)		3,100,473
Selling, general and administrative expenses		24,441			138,323			—			162,764
Depreciation and amortization expense		24,182			7,622			—			31,804
		2,494,462			1,680,312			(879,733	)		3,295,041
Operating income		131,553			12,624			—			144,177
Other expense:
Interest expense, net		(25,368	)		(973	)		—			(26,341	)
Other, net		(3,298	)		401			—			(2,897	)
Equity in net income of subsidiaries		7,890			—			(7,890	)		—
		(20,776	)		(572	)		(7,890	)		(29,238	)
Income before income tax expense		110,777			12,052			(7,890	)		114,939
Income tax expense
Current		21,478			3,572			—			25,050
Deferred		18,186			590			—			18,776
		39,664			4,162			—			43,826
Net income	$	71,113		$	7,890		$	(7,890	)	$	71,113

71

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2013
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	2,864,154		$	1,726,422		$	(909,323	)	$	3,681,253
Costs and expenses:
Costs of goods sold (exclusive of depreciation, amortization and losses on derivative contracts)		2,495,478			1,573,420			(909,323	)		3,159,575
Losses on derivative contracts		2,319			—			—			2,319
Selling, general and administrative expenses		24,562			139,312			—			163,874
Depreciation and amortization expense		19,883			6,994			—			26,877
		2,542,242			1,719,726			(909,323	)		3,352,645
Operating income		321,912			6,696			—			328,608
Other expense:
Interest expense, net		(38,292	)		(743	)		—			(39,035	)
Other, net		(3,743	)		(76	)		—			(3,819	)
Loss on early extinguishment of debt		(18,727	)		—			—			(18,727	)
Equity in net income of subsidiaries		4,130			—			(4,130	)		—
		(56,632	)		(819	)		(4,130	)		(61,581	)
Income before income tax expense		265,280			5,877			(4,130	)		267,027
Income tax expense
Current		94,154			1,569			—			95,723
Deferred		2,443			178			—			2,621
		96,597			1,747			—			98,344
Net income	$	168,683		$	4,130		$	(4,130	)	$	168,683

72

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2015
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	128,665		$	14,985		$	—	$	143,650
Cash flows from investing activities:
Additions to property, plant and equipment		(30,451	)		(19,798	)		—		(50,249	)
Additions to amortizable intangible assets		—			(100	)		—		(100	)
Additions to deferred turnaround costs		(705	)		(2,911	)		—		(3,616	)
Additions to deferred integrity and replacement costs		(28,630	)		—			—		(28,630	)
Proceeds from asset dispositions		5			5			—		10
Net cash used in investing activities		(59,781	)		(22,804	)		—		(82,585	)
Cash flows from financing activities:
Distribution from Parent under the Tax Sharing Agreement		36			—			—		36
Dividends to preferred shareholder and stockholder		(41,082	)		—			—		(41,082	)
Principal reductions of long-term debt		(637	)		(1,071	)		—		(1,708	)
Deferred financing costs		(320	)		—			—		(320	)
Net cash used in financing activities		(42,003	)		(1,071	)		—		(43,074	)
Net increase (decrease) in cash and cash equivalents		26,881			(8,890	)		—		17,991
Cash and cash equivalents, beginning of year		79,356			19,681			—		99,037
Cash and cash equivalents, end of period	$	106,237		$	10,791		$	—	$	117,028

73

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2014
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	92,535		$	18,698		$	—	$	111,233
Cash flows from investing activities:
Additions to property, plant and equipment		(33,069	)		(16,195	)		—		(49,264	)
Additions to deferred turnaround costs		(41,850	)		(345	)		—		(42,195	)
Additions to deferred integrity and replacement costs		(36,810	)		—			—		(36,810	)
Proceeds from asset dispositions		56			2			—		58
Net cash used in investing activities		(111,673	)		(16,538	)		—		(128,211	)
Cash flows from financing activities:
Distribution to Parent under the Tax Sharing Agreement		(3,034	)		—			—		(3,034	)
Dividends to preferred shareholder and stockholder		(38,951	)		—			—		(38,951	)
Proceeds from issuance of long term debt		—			1,426			—		1,426
Principal reductions of long-term debt		(907	)		(1,056	)		—		(1,963	)
Net cash (used in) provided by financing activities		(42,892	)		370			—		(42,522	)
Net (decrease) increase in cash and cash equivalents		(62,030	)		2,530			—		(59,500	)
Cash and cash equivalents, beginning of year		141,386			17,151			—		158,537
Cash and cash equivalents, end of period	$	79,356		$	19,681		$	—	$	99,037

74

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2013
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	136,168		$	28,203		$	—	$	164,371
Cash flows from investing activities:
Additions to property, plant and equipment		(15,921	)		(25,676	)		—		(41,597	)
Additions to deferred turnaround costs		(1,170	)		(71	)		—		(1,241	)
Proceeds from asset dispositions		70			11			—		81
Net cash used in investing activities		(17,021	)		(25,736	)		—		(42,757	)
Cash flows from financing activities:
Distribution from Parent under the Tax Sharing Agreement		1,996			—			—		1,996
Proceeds from sale of preferred stock		141,164			—			—		141,164
Dividends to stockholder		(114,338	)		—			—		(114,338	)
Principal reductions of long-term debt		(128,802	)		(637	)		—		(129,439	)
Net cash used in financing activities		(99,980	)		(637	)		—		(100,617	)
Net increase in cash and cash equivalents		19,167			1,830			—		20,997
Cash and cash equivalents, beginning of year		122,219			15,321			—		137,540
Cash and cash equivalents, end of period	$	141,386		$	17,151		$	—	$	158,537

18. Quarterly Financial Data (unaudited)

	Net Sales		Operating Profit		Net Income (Loss)
	(in thousands)
2015
First Quarter	$	824,697	$	36,139	$	17,614
Second Quarter		580,904		10,792		1,603
Third Quarter		602,877		64,454		34,707
Fourth Quarter		708,241		46,660		28,127
2014
First Quarter	$	891,715	$	5,414	$	(1,087	)
Second Quarter		773,719		101,837		57,670
Third Quarter		784,269		12,801		3,232
Fourth Quarter		989,515		24,125		11,298

19. Put and Call Option Agreement

On April 8, 2015 (the “Execution Date”), the Company entered into a Put and Call Option Agreement with each of Enbridge Energy Limited Partnership (“Enbridge LP”) and Enbridge Pipelines Inc. (“Enbridge Inc.” and, together with Enbridge LP, the “Carriers”). The Put and Call Option Agreement entered into with Enbridge LP (the “U.S. Agreement”) is substantially similar to the Put and Call Option Agreement entered into with Enbridge Inc. (the “Canadian Agreement” and, together with the U.S. Agreement, the “Put and Call Agreement”). The Put

75

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

and Call Agreement was contemplated in that certain Letter Agreement, originally executed on July 31, 2014 and last amended on April 8, 2015 (the “Letter Agreement”), between the Company and the Carriers relating to approximately 88.85 miles of pipeline owned by the Carriers, which transports crude oil from Canada to the Company’s Kiantone Pipeline in West Seneca, New York, and serves the Company’s refinery in Warren, Pennsylvania (“Line 10”). The Letter Agreement related to the parties’ agreement concerning funding certain integrity and replacement costs for Line 10.

The Carriers own the pipeline facilities generally identified as Line 10, including real property interests through and under which Line 10 passes, the Carriers’ assignable permits related to the ownership and operation of Line 10, as well as personal property, contract rights, records and incidental rights held solely in connection with Line 10 (collectively, the “Assets”).

Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10 (the “Integrity Costs”), which was paid August 14, 2014, which aggregated $36 million for the calendar year 2014. Pursuant to the Letter Agreement, the Carriers agreed to reconcile their actual expenses for the integrity maintenance and refund any excess payments made by the Company. The parties agreed to apply any credit to the Company as a result of such reconciliation to amounts owed by the Company for Subsequent Year Pipe Replacement Costs (as defined below). For each subsequent calendar year through the earlier of the expiration or closing of the purchase rights granted to the Company pursuant to the Put and Call Agreement, the Carriers will provide the Company with an invoice for the Integrity Costs for such calendar year (“Subsequent Year Integrity Costs”). The Carriers’ actual expenses with respect to the integrity maintenance and pipe replacement will be reconciled against the Subsequent Year Integrity and Pipe Replacement Costs similarly to the reconciliation for calendar year 2014.

In addition, the Company agreed to pay for half the cost of replacing certain portions of Line 10 in accordance with a plan agreed to between the Company Parties and the Carriers. The Company will pay 50% of the estimated expenses of the replacement project for each segment of Line 10 to be replaced (the “Replacement Costs”) within 30 days of its receipt of an invoice for the same, along with a project management fee of 2 ¹/₄%. Each Carrier will initially fund the remaining 50% of the Replacement Costs during construction, provided that the Company will reimburse the Carriers for their actual cost of funds during the construction process. Once construction is complete and each replaced segment of Line 10 is put into service, and assuming the Company has not exercised its rights to purchase Line 10 pursuant to the Put and Call Agreement, the Company will repay the Carriers the 50% of the Replacement Costs they funded over a 10 year period.

On November 12, 2015, pursuant to the Letter Agreement, the Company made a payment to the Carriers in the amount of $60,700,000 for Subsequent Year Pipe Replacement Costs, which amount reflects credits received by the Company upon reconciliation of the Integrity Costs funded in fiscal 2014. Kiantone, as the owner of the Kiantone Pipeline, has agreed to guaranty any and all payments due by the Company pursuant to the Letter Agreement.

Pursuant to the Put and Call Agreement, the Carriers granted the Company a right (the “Call Option”) to purchase all of the Assets and the Company granted the Carriers the right to put all the Assets to the Company (the “Put Option” and, together with the Call Option, the “Purchase Options”) subject to the terms and conditions of the Put and Call Agreement.

The Carrier’s Put Option is exercisable beginning on the date that is the earlier of (a) January 1, 2026 and (b) the date that is 30 days after the latest of (i) the date on which the Carriers give notice that the Line 10

76

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

replacement work performed pursuant to the Letter Agreement is sufficiently completed (as contemplated in the Call and Put Agreement) and (ii) the ninth (9^th) anniversary of the Execution Date (the “Put Option Commencement Date”). The Put Option terminates on the date that is 24 months after either (a) the Put Option Commencement Date if such date is the first of a month or (b) the first day of the calendar month immediately following the Put Option Commencement Date if it is not the first day of the month (the “Put/Call Option Expiry Date”). The Company’s Call Option is exercisable at any time beginning on the Execution Date and ending on the Put/Call Option Expiry Date.

The purchase price of the Assets (the “Purchase Price”) shall be calculated as follows: the sum of (a) 70% of the book value of the Assets as of July 31, 2014 minus annual depreciation, (b) 100% of total replacement costs for any segment replacements on the Pipeline commenced by the Carrier, whether completed or ongoing on the date of Asset sale is consummated (the “Closing Date”), minus any of such expenses paid by the Company and (c) 100% of the total regulatory requirements costs for any regulatory work commenced by the Carrier, whether completed or ongoing at the Closing Date, minus any of such expenses paid by the Company. The Purchase Price shall be subject to adjustment pursuant to the Put and Call Agreement with respect to certain work ongoing at the Closing Date.

Among other customary conditions to closing, Carrier’s obligation to close the sale of the Assets is conditioned on the Company’s payment of all obligations outstanding pursuant to the Put and Call Agreement and the Letter Agreement. In addition, the sale of Assets pursuant to the U.S. Agreement shall close concurrently with the sale of the Assets pursuant to the Canadian Agreement.

The Company and the Carrier agreed that certain work must be undertaken in order to carve out portions of Line 10 in Canada from the Enbridge mainline system and allow it to operate independently. In the event any work is required to similarly separate the U.S. portion of Line 10 from the Enbridge mainline system (the “Carve-Out Work”), a plan to perform such Carve-Out Work that would result in expenses greater than $38.5 million will require the approval of the Company.

In the event any of the maintenance, regulatory requirement, or replacement work contemplated in the Letter Agreement or the Put and Call Agreement (collectively, the “Work”) is outstanding at the Closing Date, concurrently with the closing of the Asset sale, the Company and the Carriers will enter into an operating agreement (the “Operating Agreement”) pursuant to which the Carriers will provide certain operational and administrative services (the “Services”) while the Work is ongoing and complete such Work. As payment for the Services and completion of the Work, the Carriers shall be: (i) reimbursed for all expenses of providing the Services, (ii) paid a fixed fee of on an annual basis, which shall be subject to a 2% increase for each successive year following the first year of the Operating Agreement, and (ii) paid for all expenses of the Work not previously paid, as well as a 2.25% construction management fee.

The Put and Call Agreement may be terminated by the mutual consent of the Company and the Carriers and shall automatically terminate if neither Purchase Option is exercised prior to the Put/Call Option Expiry Date. Moreover, either the Company or a Carrier may terminate the Put and Call Agreement if a closing of the Asset sale shall not have occurred on or before December 31, 2028 assuming the terminating party is not then in breach of the Put and Call Agreement and if a party has breached a representation, such breach has not been cured within the time periods allotted by the Put and Call Agreement. Finally, the Company may terminate the Put and Call Agreement by notifying the Carriers to cease the replacement work contemplated in the Letter Agreement. The Company has assessed the accounting impact of the Put and Call Agreement and determined there is no impact until the time when it becomes probable that the Put or Call will be exercised.

77

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20. Legal Proceedings

The Company and its subsidiaries are from time to time parties to various legal proceedings that arise in the ordinary course of their respective business operations. These proceedings include various administrative actions relating to federal, state and local environmental laws and regulations as well as civil matters before various courts seeking money damages. The Company believes that if the legal proceedings in which it is currently involved were determined against the Company, there would be no material adverse effect on the Company’s operations or its consolidated financial condition. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated operations or financial position of the Company.

21. Subsequent Events

On October 20, 2015 (the “Closing Date”), URC, United Refining Company of Pennsylvania, Kiantone Pipeline Corporation (“Kiantone”), United Refining Company of New York Inc., United Biofuels, Inc., Country Fair, Inc. and Kwik-Fill Corporation (collectively, the “Borrowers”) entered into an Amended, Restated and Consolidated Revolving Credit, Term Loan and Security Agreement (“Credit Agreement”) with a group of lenders led by PNC Bank, National Association, as Administrative Agent (the “Agent”), and PNC Capital Markets LLC, as Sole Lead Arranger and Bookrunner. The Credit Agreement amends and restates the Amended and Restated Credit Agreement, dated May 18, 2011 and last amended June 18, 2013, by and between the Company and certain subsidiaries and PNC Bank, National Association, as Administrative Agent (the “Existing Credit Facility”). The Credit Agreement will terminate on October 19, 2020 (the “Expiration Date”). Until the Expiration Date, the Company may borrow on the New Revolving Credit Facility (as defined below) on a borrowing base formula set forth in the Credit Agreement.

Pursuant to the Credit Agreement, the Company increased its existing senior secured revolving credit facility from $175,000,000 to $225,000,000. The New Revolving Credit Facility may be increased by an amount not to exceed $50,000,000 without additional approval from the lenders named in the Credit Agreement if existing lenders agree to increase their commitments or additional lenders commit to fund such increase. Interest under the New Revolving Credit Facility is calculated as follows: (a) for domestic rate borrowings, at (i) the greater of the Agent’s prime rate, federal funds rate plus .5% or the daily LIBOR rate plus 1%, plus (ii) an applicable margin of 1.25% to 1.75%, and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.25% to 2.75%. The applicable margin will vary depending on a formula calculating the Company’s average unused availability under the facility. In addition, pursuant to the Credit Agreement, the Company entered into a term loan in the amount of $250,000,000, which was made in a single drawing on the Closing Date (“Term Loan” and, together with the New Revolving Credit Facility, the “Credit Obligations”). Under the Term Loan, interest is calculated as follows: (a) for domestic rate borrowings, at (i) the greater of the Agent’s prime rate, federal funds rate plus .5% or the daily LIBOR rate plus 1%, plus (ii) an applicable margin of 1.75% to 2.25%, and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.75% to 3.25%. The applicable margin will vary depending on a formula calculating the Company’s average unused availability under the facility. The Term Loan is prepayable in whole or in part at any time without premium or penalty. The Term Loan shall be paid in full on or prior to the Expiration Date and shall be paid in equal quarterly amounts based on a ten-year straight line amortization schedule. Prepayment of the Term Loan in whole or in part may be made at any time without premium or penalty.

The Credit Obligations are secured by a first priority security interest in certain cash accounts, accounts receivable, inventory, the refinery, including a related tank farm, and the capital stock of Kiantone. At such time as the Term Loan is repaid in full, and provided no event of default exists, the security interest in the refinery and the equity interests in Kiantone shall be released.

78

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Credit Agreement requires minimum undrawn availability of $15,000,000 at all times prior to the repayment of the Term Loan and the greater of 12.5% of the maximum New Revolving Credit Facility or $25,000,000 after the repayment of the Term Loan. Upon the repayment of the Term Loan, the Company is required to maintain a consolidated net worth of no less than $100,000,000. The Credit Agreement includes customary mandatory prepayment provisions, including in connection with non-ordinary course asset sales, equity issuances and the incurrence of additional debt. Unless assets sold in non-ordinary course transactions were included in the borrowing base for the New Revolving Credit Facility, mandatory prepayments shall be applied first to the repayment of the Term Loan and then the New Revolving Credit Facility. The Credit Agreement also includes customary affirmative and negative covenants, including, among other things, covenants related to the fixed charge coverage ratio, payment of fees, conduct of business, maintenance of existence and assets, payment of indebtedness and the incurrence of additional indebtedness, intercompany obligations, affiliate transactions, amendments to organizational documents, and financial statements.

The proceeds of the Credit Agreement will be used to (i) refinance the Company’s existing senior debt under the Existing Credit Facility (ii) provide for the Company’s general corporate needs, including working capital requirements and capital expenditures, (iii) repay and satisfy in full those certain 10.500% senior secured notes due 2018 (the “Senior Secured Notes due 2018”) and (iv) pay the fees and expenses associated with the Credit Agreement.

On October 6, 2015, the Company announced the commencement of a tender offer (the “Tender Offer”) to purchase for cash any and all of the outstanding $237.25 million aggregate principal amount outstanding of the Senior Secured Notes due 2018 and a solicitation of consents for proposed amendments to the related indenture (the “Consent Solicitation”). The Tender Offer and Consent Solicitation was made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated October 6, 2015 and related consent and letter of transmittal. The Tender Offer was set to expire on November 2, 2015 (the “Expiration Date”). Holders of Senior Secured Notes due 2018 that validly tendered prior to 5:00 p.m., New York City time, on October 19, 2015 (the “consent deadline”), would receive total consideration of $1,057.50 per $1,000.00 principal amount of Senior Secured Notes due 2018, plus accrued and unpaid interest, which included a consent payment of $30.00. Holders that tender after the consent deadline and prior to the Expiration Date would receive total consideration of $1,027.50 per $1,000.00 principal amount, plus accrued and unpaid interest.

On October 20, 2015, the Company announced that $217,871,000 aggregate principal amount, or 91.83% of the Senior Secured Notes due 2018, were validly tendered prior to the consent deadline. The Company also received the requisite consents for the proposed amendments to eliminate most of the covenants applicable to the Senior Secured Notes due 2018, including the release of the collateral securing the Notes. The remaining 8.17% of the Senior Secured Notes due 2018 or $19,379,000, will be fully redeemed at a redemption price of 105.25% of par value plus accrued interest of $452,177 on November 19, 2015.

On November 12, 2015, pursuant to the Letter Agreement, the Company made a payment to the Carriers in the amount of $60,700,000 for Subsequent Year Pipe Replacement Costs, which amount reflects credits received by the Company upon reconciliation of the Integrity Costs funded in fiscal 2014.

79

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not Applicable.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a—15(e) and 15d—15(e) of the Securities Exchange Act of 1934, as amended), as of August 31, 2014, the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial and accounting officer, respectively) have concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level.

Limitations on the Effectiveness of Controls

A control system, no matter how well conceived an operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Internal control over financial reporting includes policies and procedure that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP; that our receipts and expenditures are being made only in accordance with the authorization of the Company’s board of directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

Management evaluates the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO Framework) in Internal Control Integrated Framework. Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of August 31, 2015 and concluded that it is effective.

An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, the risk.

80

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended August 31, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Set forth below is certain information as of November 23, 2015 with respect to all directors and executive officers of the Company.

Name	Age		Position
John A. Catsimatidis		67	Chairman of the Board, Chief Executive Officer, Director
Myron L. Turfitt		63	President, Chief Operating Officer, Director
Ashton L. Ditka		74	Senior Vice President—Marketing
Michael E. Toole		60	Vice President—Refining
Frederick J. Martin, Jr.		61	Vice President—Supply and Transportation
James E. Murphy		70	Vice President, Chief Financial Officer and Treasurer
John R. Wagner		56	Vice President, General Counsel and Secretary
Martin R. Bring		72	Director
Jacob Feinstein		72	Director
Kishore Lall		68	Director
Douglas Lemmonds		66	Director
Andrew Maloney		84	Director
Dennis Mehiel		73	Director

John A. Catsimatidis has been Chairman of the Board and Chief Executive Officer since February 1986, when his wholly-owned company, United Acquisition Corp., purchased our parent. He also served as President from February 1986 until September 1996. He also is Chairman of the Board, Chief Executive Officer, President, and the founder of Red Apple Group, Inc. (a holding company for certain businesses, including the Company and corporations which operate supermarkets in New York). Mr. Catsimatidis’s broad experience as a senior executive and owner of other operating businesses, his experience as a successful investor in real estate, and his 27 year tenure as Chief Executive Officer of the Company lead us to conclude that he will make significant contributions as a director.

Myron L. Turfitt has been President and Chief Operating Officer since September 1996. From June 1987 to September 1996 he was Chief Financial Officer and Executive Vice President. From August 1983 until June 1987 he was Senior Vice President-Finance and from July 1981 to August 1983, Mr. Turfitt held the position of Vice President, Accounting and Administration. Mr. Turfitt is a CPA with over 40 years of financial and operations experience in all phases of the petroleum business including exploration and production, refining and retail marketing. His experience covers both fully-integrated major oil companies and large independents. Mr. Turfitt’s experience and training as a certified public accountant, his prior experience in other aspects of the petroleum business and his over 32 of financial and operational experience with the Company lead us to conclude that he will make significant contributions as a director.

Ashton L. Ditka has been Senior Vice President-Marketing since July 1990. From December 1989 to July 1990 he was Vice President-Wholesale & Retail Marketing and from August 1976 until December 1989 he was Vice President-Wholesale Marketing. Mr. Ditka has over 49 years of experience in the petroleum industry, including 11 years in retail marketing with Atlantic Richfield Company.

81

Michael E. Toole has been with United Refining Company for 31 years with over 37 years of experience in the petroleum refining industry. Prior to his employment with United in 1984, Mike worked for UOP LLC for over 6 years. From November of 1984 to August 1991 he held the position of Process Engineer. In September of 1991 he was promoted to Refining Engineer until May 1994 when he became Senior Refining Engineer. In January 2013, he was promoted to Vice President-Refining. He obtained his Bachelor of Science in Chemical Engineering from Cornell University.

Frederick J. Martin, Jr. has been Vice President-Supply and Transportation since February 1993. From 1980 to January 1993 he held other positions with us involving transportation, product supply, crude supply and pipeline and terminal administration.

James E. Murphy has been Chief Financial Officer since January 1997 and in January 2009 also became Treasurer. He was Vice President-Finance from April 1995 to December 1996 and since May 1982 has held other accounting and internal auditing positions with us. Mr. Murphy is a CPA and prior to joining us he had over 15 years of experience in accounting and auditing with banking, public accounting and manufacturing companies.

John R. Wagner has been Vice President, General Counsel and Secretary since August 1997. Prior to joining us, Mr. Wagner served as Counsel to Dollar Bank, F.S.B. from 1988 to August 1997.

Martin R. Bring has served as a Director since 1988. Since November 2004, he has been a partner at the law firm of Ellenoff, Grossman & Schole LLP. Previously he was a stockholder in Anderson, Kill & Olick, P.C., a New York law firm, from February 2002 to November 2004. Prior thereto Mr. Bring was a partner in the law firm of Wolf, Block, Schorr and Solis-Cohen LLP, a Philadelphia, Pennsylvania law firm and its predecessor law firm for more than 5 years. Mr. Bring’s 48 years of experience as a corporate attorney and 29 years of involvement as a legal advisor to the Company lead us to conclude that he will make significant contributions as a director.

Jacob Feinstein has served as a Director since 2006. Since 1999, he has been employed as a Consultant to the electric power industry in disciplines such as management, transmission, generation interconnection and power system operation and control. From 1998 to 1999, he was employed by Cogen Technologies, Inc. as a Vice President. From 1991 to 1998, he was employed by Consolidated Edison Company of New York, Inc. as a Vice President. Mr. Feinsten’s management expertise and long involvement in the energy industry lead us to conclude that he will make significant contributions as a director.

Kishore Lall has served as a Director since 1997. He is currently Managing Director & Global Head/ Diamonds & Jewelry with Standard Chartered Bank, London. He was Global Head, Business Development, International Diamond and Jewelry Group of ABN AMRO Bank in New York from September 2005 to September 2008. He served as Chief Financial Officer of Gristede’s Foods, Inc. an affiliate of the Company from August 2003 to August 2005 and Executive Vice President-Finance and Administration and Secretary of Gristede’s Foods, Inc. from May 2002 to August 2005. From October 1997 to May 2002 he held the position of Executive Assistant to the Chairman of the board, Red Apple Group, Inc. From January 1997 to October 1997 he served as a consultant to Red Apple Group, Inc. From June 1994 to December 1996 was a private investor. From January 1991 to May 1994 he was Senior Vice President and Head of Commercial Banking of ABN AMRO Bank (New York branch). Mr. Lall’s experience in commercial and investment banking lead us to conclude that he will make significant contributions as a director.

Douglas Lemmonds has served as a Director since 1997. He is currently the owner of MDL Partners Virginia, LLC. Previously he served as Vice President and International Business Manager of Mercuri Urval, a Swedish based global management consultancy and as Executive Vice President at SunTrust Bank. From May 1996 to 2002 he served as Managing Director and Chief Operating Officer, Private Banking-Americas of the Deutsche Bank Group and President of Deutsche Bank Trust Company. Private Banking-Americas operated

82

across four separate legal entities, including a registered investment advisor, a broker-dealer, a trust company and a commercial bank. From June 1991 to May 1996 Mr. Lemmonds was the Regional Director of Private Banking of the Northeast Regional Office of the Bank of America and from August 1973 to June 1991 he held various other positions with Bank of America. Mr. Lemmond’s experience in senior management positions with various banking institutions as well as his consulting experience lead us to conclude that he will continue to make significant contributions as a director.

Andrew Maloney has served as a Director since 1997. He has also been counsel to De Feis O’Connell & Rose, a New York law firm since January 2003. From April 1998 to December 2002, Mr. Maloney was counsel to Kramer Levin Naftalis & Frankel LLP, a New York law firm. From December 1992 to April 1998 was a partner at Brown & Wood LLP, a New York law firm. From June 1986 to December 1992 he was the United States Attorney for the Eastern District of New York. Mr. Maloney’s training and experience as an attorney in private practice and his experience with both government and law enforcement as a United States Attorney lead us to conclude that he will make significant contributions as a director.

Dennis Mehiel has served as a Director since July 2012. Mr. Mehiel previously served as a director from 2004 to 2011 and from 1997 to 2002. He has been the Chairman and Chief Executive Officer of U.S. Corrugated, Inc since 2006. Mr. Mehiel is the former Chairman and Chief Executive Officer of Sweetheart Cup Company, the nation’s largest manufacturer of institutional food service disposables, until it merged with its competitor Solo Cup Company in 2004.

Board Independence

Although the Company’s securities are not listed on any national securities exchange and we are therefore not required to have a majority of independent directors, we apply the NYSE MKT standard for independent directors to determine which, if any, of our directors are independent pursuant to such definition. The NYSE MKT defines an independent director generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

The Company has determined that Messrs. Feinstein, Lall, Lemmonds, Maloney and Mehiel are independent directors as defined under the NYSE MKT Rule 803.

Audit Committee

The Company does not have a class of securities listed on a national securities exchange or national securities association subject to the requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended. Consequently, the Company does not have an audit committee at this time, and has not designated an audit committee financial expert. However, the Company is reviewing whether it would be appropriate to appoint an audit committee consisting of independent members of its board of directors.

Nominating Committee

The Company does not have a nominating committee at this time and believe this is appropriate for our Company as we have one indirect stockholder, our Chairman and Chief Executive Officer, John A. Catsimatidis. The Board of Directors, as a whole, participates in the consideration of director nominees. The Board of Directors does not have a policy with regard to the consideration of any director candidates recommended by security holders and the Board believes this is appropriate as the Company has one indirect stockholder. There are no specific minimum qualifications that the Board believes must be met by a board nominee.

83

Code Of Ethics

The Company has adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 which is filed as Exhibit 14.1 in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2003. A copy of the Code of Ethics is available for review on the Company’s website at www.urc.com. In the event we determine to amend or waive certain provisions of this code of ethics, we will disclose such amendments or waivers on our website at http://www.urc.com under the heading “Code of Ethics”. Any person may request, and the Company will provide without charge, a copy of such code of ethics by writing to John R. Wagner, General Counsel, 15 Bradley Street, Warren, Pennsylvania 16365.

Section 16(a) Beneficial Ownership Reporting Compliance

Not Applicable.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

The Summary Compensation Table and supplementary tables that follow describe the compensation paid to our Chairman of the Board and Chief Executive Officer (“CEO”), Vice President and Chief Financial Officer (“CFO”), President and Chief Operating Officer (“COO”), Senior Vice President Marketing and Vice President Refining for 2015.

Compensation Objectives and Components

The objective of the Company’s compensation program is to motivate, retain and attract management, linking incentives to financial and personal performance and enhanced shareholder value. The compensation program for the named executive officers consists of the following components:

• Salary;

• Annual performance-based cash awards; and

• Other fringe benefits and perquisites.

There is no Compensation Committee of the Board of Directors; however, the CEO and COO review and approve any proposed changes in salary, as well as discretionary bonuses for the other named executive officers.

Salary

Salaries for the named executive officers have been established by the CEO and COO. There is no policy to provide any scheduled increase to these individuals and increases may be awarded at the discretion of the CEO. There is no deferred compensation program for the named individuals or any other executives of the Company. The salaries of the CEO and COO are set by the CEO after reviewing comparable salaries for similar positions within the industry.

Annual Cash Bonus Awards

While there is no formal bonus program for the named executives, bonuses have been paid to them on an annual basis. The amount of the bonus is determined by the CEO and may vary based on the performance of the Company.

84

Other Fringe Benefits and Perquisites

The Company provides several fringe benefit plans including the United Refining Company Pension Plan for Salaried Employees (the “Pension Plan”) and the United Refining Company Employees’ 401(k) Plan (the “401(k) Plan”) to its named executive officers. Additionally, the Company provides other benefits, including medical and dental plans, life and accidental death insurance, short-term and long-term disability insurance, paid sick leave and vacation and paid holidays.

Potential Payments upon Termination or Change in Control

The Company does not have any change in control agreements with any of the named executive officers.

Estimated Benefits upon Termination Related to Other Than a Change in Control

The Company does not have a severance policy for benefits paid upon termination of employment.

Indemnification of Directors and Officers

The Company’s By-laws provide an open-ended indemnity of all officers and directors to the fullest extent permitted by law.

The following table sets forth the compensation paid by the Company to its principal executive officer and principal financial officer and each of the three other most highly compensated executive officers of the Company whose salary and bonus exceeded $100,000 for the fiscal year ended August 31, 2015.

SUMMARY COMPENSATION TABLE

Name & Principal Position							Change  in Pension Value ($)		Other Compensation  ($) (1)		Total ($)
			Annual Compensation
	Year		Salary ($)		Bonus ($)
John A. Catsimatidis		2015		650,000		1,600,000		—		20,560		2,270,560
Chairman of the Board &		2014		650,000		1,600,000		35,112		20,210		2,305,322
Chief Executive Officer		2013		650,000		1,600,000		—		21,103		2,271,103
James E. Murphy		2015		170,000		75,000		—		25,843		270,843
Vice President &		2014		170,000		75,000		19,295		24,959		289,254
Chief Financial Officer		2013		157,500		70,000		—		23,690		251,190
Myron L. Turfitt		2015		420,000		1,200,000		—		37,895		1,657,895
President &		2014		420,000		1,200,000		62,845		40,272		1,723,117
Chief Operating Officer		2013		420,000		1,200,000		—		36,667		1,656,667
Ashton L. Ditka		2015		240,000		100,000		—		31,245		371,245
Senior Vice President		2014		240,000		100,000		12,235		30,443		382,678
Marketing		2013		231,667		100,000		—		30,790		362,457
Frederick J. Martin		2015		175,000		100,000		—		25,820		300,820
Vice President		2014		175,000		100,000		92,961		24,909		392,870
Supply & Transportation		2013		162,550		100,000		—		23,000		285,550

(1) Amounts in this column represent the total of all perquisites (non-cash benefits and perquisites such as the use of employer-owned automobiles, membership dues and other personal benefits), employee benefits (employer cost of life insurance), and employer contributions to defined contribution plans (the 401(K) Plan). Amounts are reported separately under the “All Other Compensations” table below.

85

2015 ALL OTHER COMPENSATION

Name	Automobile Usage		Company Contribution To 401(k) Plan		Life  Insurance Premium		Total All  Other
John A. Catsimatidis	$	—	$	18,350	$	2,210	$	20,560
James E. Murphy	$	6,706	$	17,000	$	2,137	$	25,843
Myron L. Turfitt	$	9,615	$	26,300	$	1,980	$	37,895
Ashton L. Ditka	$	5,144	$	24,000	$	2,101	$	31,245
Frederick J. Martin	$	6,340	$	17,500	$	1,980	$	25,820

PENSION BENEFITS

Name	Plan Name	Number of Years of Credited Service		Present Value of Accumulated Benefits (1)		Payments During Last Fiscal Year
John A. Catsimatidis	United Refining Company Pension Plan for Salaried Employees		24.50	$	856,215	$	—
James E. Murphy	United Refining Company Pension Plan for Salaried Employees		28.25	$	612,551	$	—
Myron L. Turfitt	United Refining Company Pension Plan for Salaried Employees		32.17	$	1,228,225	$	—
Ashton L. Ditka	United Refining Company Pension Plan for Salaried Employees		34.08	$	904,014	$	—
Frederick J. Martin	United Refining Company Pension Plan for Salaried Employees		30.42	$	1,092,318	$	—

(1) The present value of accumulated benefits decreased for all executives during fiscal 2015 due to a combination of benefits being frozen, the discount rate change and executives’ change in age. These values for fiscal 2015 are $(13,358), $(7,951), $(25,104), $(4,381) and $(27,779) for Messrs.’ Catsimatidis, Murphy, Turfitt, Ditka and Martin, respectively.

The Pension Plan is a tax-qualified, non-contributory defined benefit plan established to provide pension benefits to employees of the Company, including the named executive officers, meeting Pension Plan eligibility criteria. The criteria states that employees are eligible to participate in, and will be enrolled in, the Pension Plan on the first day of the month coincident with or next following the later of the completion of one Year of Service and attainment of age twenty-one years. Years of service for benefits purposes are measured based on the number of years in which at least 1,000 hours are worked.

A participant’s normal retirement date is the first of the month coinciding with or following the attainment of age 65. Participants who are actively employed may also elect an unreduced option at age 59  ¹/₂. In addition to a single life annuity, benefits can be paid as other actuarially equivalent annuities.

The United Refining Company’s Pension Plan for Salaried Employees was frozen effective August 31, 2010 and participants will no longer accrue a benefit under the Plan. The Plan has been replaced by a new 3% 401(k) contribution.

The benefit formula is based on the average earnings of the participant for the three years in which such participant’s earnings were the highest. Earnings include salary and bonus up to a maximum of the IRC 401(a)(17) limit, which in the year benefits were frozen was $245,000. Benefits are calculated by multiplying the

86

sum of (a) 1.1% of average earnings up to the Social Security compensation base, plus (b) 1.25% of average earnings in excess of the Social Security compensation base, by (c) the number of years of service. Payments of retirement benefits are not reduced by any Social Security benefits received by the participant. Effective May 2001, for purposes of calculating retirement benefits, the Company has fixed the earnings subject to tax under the Federal Insurance Contribution Act at $76,200.00 for years after 2001 for purposes of calculating Social Security compensation base.

In connection with a transaction in 1984, a portion of the benefits from the plan are provided through an annuity contract with an insurance company. The benefits shown in the table are gross amounts before offsetting the insured benefit and thereby represent the total benefit earned with the Company.

Vested benefits are those amounts to which participants are entitled regardless of future services to the Company. A participant is credited with a year of service for vesting purposes for each Pension Plan year during which at least 1,000 hours of service are completed, commencing with year of hire. Each executive is currently vested in his accumulated benefit.

In addition to vested benefits, the Pension Plan provides certain death benefits. Upon death of a participant, the beneficiary is entitled to receive a portion of the vested interest of the participant’s accrued benefit in the form of a monthly annuity amount, subject to eligibility requirements stipulated in the Pension Plan.

The present value of accumulated benefits in the table above has been determined by an independent actuary. These assumptions for August 31, 2015 include a 3.90% discount rate and the RP 2000 mortality table projected to 2016 with a 15-year phase-in and no collar adjustment, each of which is consistent with the assumptions used for FYE 2011 financial reporting. Further, it was assumed that benefits will commence at the earliest age in which an unreduced benefit is available (age 59.5 or current age if later) and there will be no turnover or death prior to retirement.

DIRECTOR COMPENSATION

The Company pays its non-officer Directors an annual retainer of $15,000 per year and $1,000 for meetings attended. Directors are reimbursed for reasonable travel, meals, lodging and other expenses incidental to attendance at meetings.

2015 Director Compensation

Name	Fees Earned or Paid in Cash ($)		Option Awards ($)		Total ($)
Martin R. Bring (1)	$	—	$	—	$	—
John A. Catsimatidis (2)	$	—	$	—	$	—
Jacob Feinstein	$	15,000	$	—	$	15,000
Douglas Lemmonds	$	15,000	$	—	$	15,000
Kishore Lall	$	15,000	$	—	$	15,000
Andrew Maloney	$	15,000	$	—	$	15,000
Dennis Mehiel	$	—	$	—	$	—
Myron L. Turfitt (3)	$	—	$	—	$	—

Fees and expenses paid to Directors are recorded as expense in the period in which the meetings are held, and deducted for income tax purposes in the year incurred.

(1) Martin R. Bring is a partner in the firm of Ellenoff, Grossman and Schole LLP. Mr. Bring was paid $204,000 on a retainer basis for legal and consulting services during fiscal 2015.

(2) Chairman of the Board and Chief Executive Officer of the Company.

(3) President and Chief Operating Officer of the Company.

87

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information regarding ownership of Equity Securities on November 23, 2015 by: (i) each stockholder known to the Company to own beneficially, directly or indirectly, more than 5% of the outstanding shares of Common Stock; (ii) each of the Company’s directors; and (iii) all officers and directors of the Company as a group. The Company believes that ownership of the shares by the persons named below is both of record and beneficial and such persons have sole voting and investing power with respect to the shares indicated.

Name and Address of Beneficial Owner	Number of Shares		Percent of Class
John A. Catsimatidis 823 Eleventh Avenue New York, NY 10019		100		100	%
All officers and directors as a group (13 persons)		100		100	%

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE.

On December 21, 2001, the Company acquired the operations and working capital assets of Country Fair. The fixed assets of Country Fair were acquired by related entities controlled by John A. Catsimatidis, the indirect sole shareholder of the Company. These assets are being leased to the Company at an annual aggregate rental fee which management, based on an independent third party valuation believes is fair, over a period ranging from 10 to 20 years. During the fiscal years ended August 31, 2015, 2014 and 2013, $5,360,000, $5,360,000 and $5,319,000 of rent payments were made to these related entities. The Company is not a guarantor on the underlying mortgages on the properties.

Concurrent with the above acquisition of Country Fair, the Company entered into a management agreement with a non-subsidiary affiliate to operate and manage 10 of the retail units owned by the non-subsidiary affiliate on a turn-key basis. For the years ended August 31, 2015, 2014 and 2013, the Company billed the affiliate $1,301,000, $1,207,000 and $1,229,000 for management fees and overhead expenses incurred in the management and operation of the retail units which amount was deducted from expenses. As of August 31, 2015 and 2014, the Company had a payable to the affiliate of $296,000 and $151,000, respectively, under the terms of the agreement, which is included in Amounts Due from Affiliated Companies, net.

On September 29, 2000, the Company sold 42 retail units to an affiliate for $23,870,000. Concurrent with this asset sale, the Company terminated the leases on 8 additional retail locations which it had previously leased from a non-subsidiary affiliate. The Company has entered into a management agreement with the non-subsidiary affiliate to operate and manage the retail units owned by the non-subsidiary affiliate on a turnkey basis. For the years ended August 31, 2015, 2014 and 2013, the Company billed the affiliate $2,325,000, $2,165,000 and $2,219,000, respectively, for management fees and overhead expenses incurred in the management and operation of the 51 retail units, which amount was deducted from expenses. For the fiscal years ended August 31, 2015, 2014 and 2013, net sales to the affiliate amounted to $131,326,000, $191,828,000 and $207,104,000, respectively. As of August 31, 2015 and 2014, the Company had a payable to the affiliate of $1,106,000 and $1,355,000, respectively, under the terms of the agreement, which is included in Amounts Due To/From Affiliated Companies, net.

The Company paid a service fee relating to certain costs incurred by its Parent for the Company’s New York office. During the years ended August 31, 2015, 2014 and 2013, such fees amounted to approximately $2,000,000, $2,000,000, and $2,000,000, respectively, which is included in Selling, General and Administrative Expenses.

88

The Company joins with the Parent and the Parent’s other subsidiaries in filing a Federal income tax return on a consolidated basis. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. Amounts related to the Tax Sharing Agreement for the utilization by the Company of certain tax attributes of the Parent and other subsidiaries related to the tax years ended August 31, 2015, 2014 and 2013 amounted to $36,000, $(3,034,000) and $1,996,000, respectively and have been recorded as a capital contribution (distribution). As of August 31, 2015 and 2014, the Company had a receivable from the Parent of $2,500,000 and $0, respectively, under the terms of the Tax Sharing Agreement.

During the years ended August 31, 2015, 2014 and 2013, the Company incurred $420,000, $420,000 and $420,000, respectively, as its share of occupancy expenses for its offices in New York that it shares with affiliates of the Company. Such offices are located in a building owned by John A. Catsimatidis.

On July 26, 2013, the Company issued and sold to URI, its sole stockholder and parent, 14,116.375 shares of the Series A Preferred Stock for an aggregate purchase price of $141,163,750 in accordance with the terms and provisions of a Subscription Agreement by and between the Company and URI. The Subscription Agreement contained customary representations and warranties concerning the acquisition of the Series A Preferred Stock by URI and restrictions on the transfer of the Series A Preferred Stock. See Note 13, Stockholders’ Equity, for a description of the terms of the Series A Preferred Stock.

During the years ended August 31, 2015, 2014 and 2013 the Company made $200,000, $200,000 and $152,000 of rent payments to a related entity for the lease of a convenience store, respectively.

During the years ended August 31, 2015, 2014 and 2013, the Company paid $4,774,000, $4,399,000 and $0, respectively, to a related captive insurance company (“Captive”). The Captive was established in fiscal 2014 and will provide the Company with “stop-loss” protection in the area of worker’s compensation, general liability and automobile liability.

During the year ended August 31, 2015, the Company made payments to an insurance company for two of its affiliates totaling $283,000, which is included as a receivable in Amounts Due From Affiliated Companies, net.

During the year ended August 31, 2015, the Parent made payments to an insurance company on behalf of the Company totaling $900,000, which is included as a payable in Amounts Due From Affiliated Companies, net.

The Company receives engineering services from a subsidiary of our Parent company to assist with the construction of its biodiesel facility in Brooklyn, New York. During the fiscal years ended August 31, 2015 and 2014 the Company paid $349,000 and $475,000 to this entity for such services.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The following represents amounts billed and amounts expected to be billed to the Company for the professional services of BDO USA, LLP rendered during fiscal years 2015 and 2014:

	2015		2014
Audit Fees	$	598,000	$	582,000
Audit—Related Fees (1)		—		—
Tax Fees		—		—
All Other Fees		—		—
Total	$	598,000	$	582,000

(1) Represents fees for professional services in connection with accounting consultations.

89

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) (1) Financial Statements

A list of all financial statements filed as part of this report is contained in the index to Item 8, which index is incorporated herein by reference.

     (2) Financial Statement Schedules

Report of Independent Registered Public Accounting Firm

Schedule II – Valuation and Qualifying Accounts

     (3) Exhibits

Number		Description
	3.1	Amended and Restated Certificate of Incorporation of United Refining Company (“URC”). Incorporated by reference to Exhibit 3.1 to URC’s Annual Report on Form 10-K for the fiscal year ended August 31, 2013.
	3.2	Bylaws of URC. Incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-4 (File No. 333-35083) (the “Registration Statement”).
	3.3	Certificate of Incorporation of United Refining Company of Pennsylvania (“URCP”). Incorporated by reference to Exhibit 3.3 to the Registration Statement.
	3.4	Bylaws of URCP. Incorporated by reference to Exhibit 3.4 to the Registration Statement.
	3.5	Certificate of Incorporation of Kiantone Pipeline Corporation (“KPC”). Incorporated by reference to Exhibit 3.5 to the Registration Statement.
	3.6	Bylaws of KPC. Incorporated by reference to Exhibit 3.6 to the Registration Statement.
	3.7	Certificate of Incorporation of Kiantone Pipeline Company (“KPCY”). Incorporated by reference to Exhibit 3.7 to the Registration Statement.
	3.8	Bylaws of KPCY. Incorporated by reference to Exhibit 3.8 to the registration Statement.
	3.9	Certificate of Incorporation of Kwik Fill Corporation. (“K-FC”). Incorporated by reference to Exhibit 3.9 to the Registration Statement.
	3.10	Bylaws of K-FC. Incorporated by reference to Exhibit 3.10 to the Registration Statement.
	3.11	Certificate of Incorporation of Independent Gasoline & Oil Company of Rochester, Inc. (“IGOCRI”). Incorporated by reference to Exhibit 3.11 to the Registration Statement.
	3.12	Bylaws of IGOCRI. Incorporated by reference to Exhibit 3.12 to the Registration Statement.
	3.13	Certificate of Incorporation of Bell Oil Corp. (“BOC”). Incorporated by reference to Exhibit 3.13 to the Registration Statement.
	3.14	Bylaws of BOC. Incorporated by reference to Exhibit 3.14 to the Registration Statement.
	3.15	Certificate of Incorporation of PPC, Inc. (“PPCI”). Incorporated by reference to Exhibit 3.15 to the Registration Statement.
	3.16	Bylaws of PPCI. Incorporated by reference to Exhibit 3.16 to the Registration Statement.
	3.17	Certificate of Incorporation of Super Test Petroleum, Inc. (“STPI”). Incorporated by reference to Exhibit 3.17 to the Registration Statement.
	3.18	Bylaws of STPI. Incorporated by reference to Exhibit 3.18 to the Registration Statement.
	3.19	Certificate of Incorporation of Kwik-Fil, Inc. (“K-FI”). Incorporated by reference to Exhibit 3.19 to the Registration Statement.
	3.20	Bylaws of K-FI. Incorporated by reference to Exhibit 3.20 to the Registration Statement.
	3.21	Certificate of Incorporation of Vulcan Asphalt Refining Corporation (“VARC”). Incorporated by reference to Exhibit 3.21 to the Registration Statement.
	3.22	Bylaws of VARC. Incorporated by reference to Exhibit 3.22 to the Registration Statement.
	3.23	Certificate of Incorporation of United Jet Center, Inc. (“UJCI”). Incorporated by reference to Exhibit 3.23 to the Registration Statement.
	3.24	Bylaws of UJCI. Incorporated by reference to Exhibit 3.24 to the Registration Statement.

90

Number		Description
	4.1	First Supplemental Indenture, dated March 8, 2011, by and among URC, CFI, KPC, KPCY, UJCI, URCP, KFC, IGOCRI, BOC, PPCI, STPI, K-FI, VARC and The Bank of New York Mellon, as trustee relating to the 10 1/2% Senior Notes due 2012. Incorporated by reference to Exhibit 4.1 to URC’s Current Report on Form 8-K filed on March 11, 2011.
	4.2	Indenture dated as of March 8, 2011, among URC, CFI, KPC, KPCY, UJCI, URCP, KFC, IGOCRI, BOC, PPCI, STPI, K-FI, VARC and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, relating to the 10.500% First Priority Senior Secured Notes due 2018. Incorporated by reference to Exhibit 4.2 to URC’s amended Current Report on Form 8-K filed on March 22, 2011.
	4.3	Form of Note (included in Exhibit 4.2).
	10.1	Servicing Agreement dated June 9, 1997 between URC and Red Apple Group, Inc. Incorporated by reference to Exhibit 10.4 to the Registration Statement.
	10.2	Amended and Restated Credit Agreement, dated May 18, 2011, by and among United Refining Company, United Refining Company of Pennsylvania, Kiantone Pipeline Corporation, Country Fair, Inc., the lenders party thereto, PNC Capital Markets LLC and Merrill Lynch, Pierce, Fenner & Smith Inc., as Co-Lead Arrangers and Joint Bookrunners, PNC Bank, National Association, as Administrative Agent and Bank of America, N.A., as Documentation Agent. Incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-4 (File No. 333-173809).
	10.3	Purchase Agreement dated February 25, 2011, by and between United Refining Company and Credit Suisse Securities (USA) LLC relating to the purchase of $365,000,000 of 10.500% First Priority Senior Secured Notes due 2018. Incorporated by reference to Exhibit 10.1 to URC’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2011.
	10.4	Registration Rights Agreement dated March 8, 2011, between URC, CFI, KPC, KPCY, UJCI, URCP, KFC, IGOCRI, BOC, STPI, K-FI, VARC and Credit Suisse Securities (USA) LLC, as representative for the several initial purchasers named therein. Incorporated by reference to Exhibit 4.4 to URC’s Current Report on Form 8-K filed on March 11, 2011.
	10.5	Security Agreement, dated March 8, 2011, between URC and The Bank of New York Mellon Trust Company, N.A., as Collateral Agent. Incorporated by reference to Exhibit 4.3 to URC’s Current Report on Form 8-K filed on March 11, 2011.
	10.6	Intercreditor Agreement dated as of March 8, 2011, by and among The Bank of New York Mellon Trust Company, N.A., as Collateral Agent, PNC Bank, National Association, as Agent for itself and the Bank Lenders, URC, URCP, KPC, CFI and K-FI. Incorporated by reference to Exhibit 10.1 to URC’s Current Report on Form 8-K filed on March 11, 2011.
	10.7	Open-End Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing, dated as of March 8, 2011, between the Company and The Bank of New York Mellon Trust Company, N.A., as Collateral Agent. Incorporated by reference to Exhibit 10.2 to URC’s Current Report on Form 8-K filed on March 11, 2011.
	10.8	Amended and Restated Credit Agreement, dated June 18, 2013, by and among United Refining Company, United Refining Company of Pennsylvania, Kiantone Pipeline Corporation, Country Fair, Inc., the lenders party thereto, PNC Bank, National Association, as Administrative Agent, Bank of America, N.A., as Documentation Agent, Manufacturers and Traders Trust Company and Bank Leumi, USA. Incorporated by reference to Exhibit 10.8 to URC’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2013.
	10.9	Letter Agreement between Enbridge Energy Limited Partnership in the United States and Enbridge Pipeline, Inc. in Canada collectively and United Refining Company and Kiantone Corporation dated July 31, 2014.
	14.1	Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. Incorporated by reference to Exhibit 14.1 in Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2003.

91

Number		Description
	21.1	Subsidiaries of the Registrants. A) Incorporated by reference to Exhibit 21.1 to the Registration Statement. B) Country Fair, Inc. Incorporated in the Commonwealth of Pennsylvania in 1965, doing business as “Country Fair”.
	*31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	*31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	*32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	*101	Interactive XBRL Data

* Filed herewith.

92

Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholder of United Refining Company

Warren, Pennsylvania

The audits referred to in our report dated November 23, 2015 relating to the consolidated financial statements of United Refining Company, which is contained in Item 8 of this Form 10-K also included the audits of the financial statement schedule listed in the accompanying index. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion such financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ BDO USA, LLP

New York, New York

November 23, 2015

93

UNITED REFINING COMPANY AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Description	Balance at Beginning  of Period		Charged to Costs and Expenses		Deductions			Balance at End Of Period
Year ended August 31, 2013:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible Accounts	$	1,800	$	1,680	$	(1,680	)	$	1,800
Year ended August 31, 2014:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible Accounts	$	1,800	$	1,050	$	(1,780	)	$	1,070
Year ended August 31, 2015:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible Accounts	$	1,070	$	750	$	(970	)	$	850

94

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNITED REFINING COMPANY
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt President and Chief Operating Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer and Director	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015
/s/ Martin R. Bring Martin R. Bring	Director	November 23, 2015
/s/ Jacob Feinstein Jacob Feinstein	Director	November 23, 2015
/s/ Kishore Lall Kishore Lall	Director	November 23, 2015
/s/ Douglas Lemmonds Douglas Lemmonds	Director	November 23, 2015
Andrew Maloney	Director	November 23, 2015
/s/ Dennis Mehiel Dennis Mehiel	Director	November 23, 2015

95

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNITED REFINING COMPANY OF PENNSYLVANIA
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt President and Chief Operating Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

96

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KIANTONE PIPELINE CORPORATION
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt President and Chief Operating Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer and Director	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

97

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KIANTONE PIPELINE COMPANY
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

98

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	UNITED JET CENTER, INC.
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

99

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VULCAN ASPHALT REFINING CORPORATION
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

100

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KWIK-FIL, INC.
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

101

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KWIK-FILLCORPORATION
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

102

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INDEPENDENT GASOLINE & OIL COMPANY OF ROCHESTER, INC.
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

103

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BELL OIL CORP.
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

104

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PPC, INC.
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

105

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SUPER TEST PETROLEUM, INC.
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 23, 2015

106

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COUNTRY FAIR, INC.
Dated: November 23, 2015	By:	/s/ Myron L. Turfitt
		Myron L. Turfitt President and Chief Operating Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board	November 23, 2015
/s/ Myron L. Turfitt Myron L. Turfitt	President and Chief Operating Officer	November 23, 2015
/s/ James E. Murphy James E. Murphy	Vice President - Finance	November 23, 2015

107

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

No annual report or proxy material was sent to security holders by the Corporation during the fiscal year ended August 31, 2015.

108

EX-31.1

Exhibit 31.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350,

As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John A. Catsimatidis, certify that:

1. I have reviewed this annual report on Form 10-K of United Refining Company (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 23, 2015	Signature:	/s/ John A. Catsimatidis
			John A. Catsimatidis
			Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350,

As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James E. Murphy, certify that:

1. I have reviewed this annual report on Form 10-K of United Refining Company (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 23, 2015	Signature:	/s/ James. E. Murphy
			James E. Murphy
			Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of United Refining Company, a Pennsylvania corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Annual Report on Form 10-K for the year ended August 31, 2015 (the “Form 10-K”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	November 23, 2015	By:	/s/ John A. Catsimatidis
			John A. Catsimatidis Principal Executive Officer
Dated:	November 23, 2015	By:	/s/ James E. Murphy
			James E. Murphy Principal Financial Officer

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of Form 10-K or as a separate disclosure document.

A signed original of this written statement required by Section 906 has been provided to United Refining Company and will be retained by United Refining Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Employee Benefit Plans (Tables)

12 Months Ended

Aug. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Components of Net Periodic Pension Cost and Post-Retirement Healthcare Benefit Cost

Net periodic pension cost and post-retirement healthcare benefit cost consist of the following components for the years ended August 31, 2015, 2014 and 2013:

	Pension Benefits									Other Post-Retirement Benefits
	2015			2014			2013			2015			2014			2013
	(in thousands)
Service cost	$	626		$	597		$	652		$	608		$	774		$	940
Interest cost on benefit obligation		4,850			5,204			4,511			1,656			2,072			1,884
Expected return on plan assets		(6,351	)		(5,569	)		(5,160	)		—			—			—
Amortization and deferrals		724			697			1,210			(3,152	)		(1,860	)		123
Net periodic benefit (income) cost	$	(151	)	$	929		$	1,213		$	(888	)	$	986		$	2,947

Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Income

Other changes in plan assets and benefit obligation recognized in Other Comprehensive Income consist of the following for the fiscal years ended August 31, 2015 and 2014 (in thousands):

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
Current year actuarial (gain) / loss	$	15,160		$	4,702		$	(5,313	)	$	162
Amortization of actuarial gain / (loss)		(724	)		(697	)		(4,199	)		(5,073	)
Current year prior service (credit) / cost		—			—			—			(2,537	)
Amortization of prior service credit / (cost)		—			—			7,351			6,933
Total recognized in other comprehensive (income) / loss	$	14,436		$	4,005		$	(2,161	)	$	(515	)
Total recognized in net periodic benefit cost and other comprehensive (income)/loss	$	14,285		$	4,934		$	(3,049	)	$	471

Summary of Change in Benefit Obligations and Fair Values of Plan Assets

The following table summarizes the change in benefit obligations and fair values of plan assets for the years ended August 31, 2015 and 2014:

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
	(in thousands)
Change in benefit obligation:
Benefit obligation @ beginning of year	$	119,209		$	107,141		$	43,713		$	45,700
Service cost		626			597			608			774
Interest cost		4,850			5,204			1,656			2,073
Plan amendments		—			—			—			(2,538	)
Curtailment		—			(69	)		—			—
Medicare part D subsidy on benefits paid		—			—			148			—
Actuarial (gains) / losses		5,299			10,816			(5,313	)		162
Benefits paid		(5,494	)		(4,480	)		(2,599	)		(2,458	)
Projected benefit obligation @ end of year		124,490			119,209			38,213			43,713
Change in plan assets:
Fair values of plan assets @ beginning of year		93,245			80,224			—			—
Actual return on plan assets		(3,509	)		11,613			—			—
Company contributions		4,372			5,888			2,599			2,458
Benefits paid		(5,494	)		(4,480	)		(2,599	)		(2,458	)
Fair values of plan assets @ end of year		88,614			93,245			—			—
Unfunded status	$	35,876		$	25,964		$	38,213		$	43,713
Amounts recognized in the balance sheet consist of:
Current liability	$	—		$	—		$	2,520		$	2,839
Noncurrent liability		35,876			25,964			35,693			40,874
Net amount recognized	$	35,876		$	25,964		$	38,213		$	43,713

Amounts Recognized in Accumulated Other Comprehensive Income

Amounts recognized in Accumulated Other Comprehensive Income:

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
	(in thousands)
Accumulated net actuarial loss	$	(43,848	)	$	(29,411	)	$	(19,953	)	$	(29,465	)
Accumulated prior service cost		—			—			35,371			42,722
Net amount recognized, before tax effect	$	(43,848	)	$	(29,411	)	$	15,418		$	13,257

Weighted Average Assumptions Used to Determine Year End Benefit Obligations

Weighted average assumptions used to determine year end benefit obligations:

	Pension Benefits				Other Post-Retirement Benefits
	2015		2014		2015		2014
Discount rate		4.40% - 4.50%		4.00% - 4.20%		4.15%		3.85%
Rate of compensation increase		3.00%		3.00%		N/A		N/A
Health care cost trend
Initial trend		N/A		N/A		7.00%		7.00%
Ultimate trend		N/A		N/A		5.00%		5.00%
Year ultimate reached		N/A		N/A		2025		2025

Weighted Average Assumptions Used to Determine Net Periodic Costs

Weighted average assumptions used to determine net periodic costs:

	Pension Benefits				Other Post-Retirement Benefits
	2015		2014		2015		2014
Discount rate		4.00% - 4.20%		4.80% - 5.00%		3.85%		4.60%
Expected return on plan assets		5.00% - 7.00%		5.00% - 7.00%		N/A		N/A
Rate of compensation increase		3.00%		3.00%		N/A		N/A
Health care cost trend
Initial trend		N/A		N/A		7.00%		7.00%
Ultimate trend		N/A		N/A		5.00%		5.00%
Year ultimate reached		N/A		N/A		2025		2022

One Percentage Point Changes in Assumed Healthcare Cost Trend Rate

The healthcare cost trend rate assumption has a significant effect on the amounts reported. To illustrate, a 1 percentage point change in the assumed healthcare cost trend rate would have the following effects:

	1% Point Increase		1% Point Decrease
	(in thousands)
Effect on total of service and interest cost components	$	51	$	(49	)
Effect on post-retirement benefit obligation	$	1,419	$	(1,332	)

Reconciliation of Above Accrued Benefit Costs to Consolidated Amounts Reported on Balance Sheets

A reconciliation of the above accrued benefit costs to the consolidated amounts reported on the Company’s Consolidated Balance Sheets follows:

	August 31,
	2015			2014
	(in thousands)
Accrued pension benefits	$	35,876		$	25,964
Accrued other post-retirement benefits		38,213			43,713
		74,089			69,677
Current portion of above benefits, included in payrolls and benefits in accrued liabilities		(2,520	)		(2,839	)
Supplemental pension and other deferred compensation benefits		231			283
Deferred retirement benefits	$	71,800		$	67,121

Fair Value of Plan Assets

The fair value of our plan assets as of August 31, 2015 and 2014 is as follows (in thousands):

Asset Category	August 31, 2015		Level 1		Level 2		Level 3
Cash Equivalents	$	222	$	222	$	—	$	—
Mutual Funds		57,364		57,364		—		—
Equities		31,028		31,028		—		—
Fixed Income		—		—		—		—
Total	$	88,614	$	88,614	$	—	$	—

Asset Category	August 31, 2014		Level 1		Level 2		Level 3
Cash Equivalents	$	180	$	180	$	—	$	—
Mutual Funds		45,634		45,634		—		—
Equities		47,431		47,431		—		—
Fixed Income		—		—		—		—
Total	$	93,245	$	93,245	$	—	$	—

Weighted Average Target and Strategic Assets Allocation of Pension Plans

The pension plans weighted-average target allocation for the year ended August 31, 2015 and strategic asset allocation matrix as of August 31, 2015 and 2014 are as follows:

	Target Allocation			Plan Assets @ 8/31
Asset Category	2015			2015			2014
Equity Securities		50 - 75	%		67	%		51	%
Debt Securities		20 - 50	%		25	%		49	%
Alternative Investments		0 - 15	%		7	%		0	%
Cash/Cash Equivalents		0 - 10	%		1	%		0	%
					100	%		100	%

Estimated 2016 Amortization

The estimated amounts that will be amortized in 2016 are as follow:

Estimated 2016 Amortization	Pension Benefits		Other Post-Retirement Benefits
	(in thousands)
Prior service cost (credit) amortization	$	—	$	(7,351	)
Net loss amortization		1,270		2,789
Total	$	1,270	$	(4,562	)

Employer Contributions and Benefit Payments which Reflect in Future Service

The following contributions and benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Pension Benefits		Other Post-Retirement Benefits
Employer Contributions			Gross		(Subsidy receipts)
	(in thousands)
FYE 8/31/2016 (expected)	$	4,922	$	2,481	$	(261	)
Expected Benefit Payments for FYE 8/31
2016	$	5,820	$	2,572	$	(261	)
2017		6,190		2,712		(294	)
2018		6,450		2,933		(326	)
2019		6,823		3,252		(361	)
2020		7,205		3,629		(395	)
2021 - 2025		39,369		22,135		(429	)

XML

Leases - Additional Information (Detail) - USD ($)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Leases [Abstract]
Amount of long-term capital lease obligation	$ 4,212,000	$ 3,021,000
Current portion of long-term capital lease	124,000	109,000
Accumulated amortization of assets under capital leases	3,732,000	2,620,000
Net amount of accumulated amortization	956,000	869,000
Lease amortization amount including depreciation and amortization expenses	207,000	185,000	$ 145,000
Net rental expense for operating leases	$ 13,728,000	$ 13,243,000	$ 13,135,000

XML

Inventories - Additional Information (Detail) - USD ($)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Inventory Disclosure [Abstract]
Replacement cost of LIFO, over LIFO carrying values	$ 6,201,000	$ 109,711,000
LIFO layer liquidation, charge to cost of sales	$ 0	$ 1,095,000

XML

Employee Benefit Plans - Reconciliation of Above Accrued Benefit Costs to Consolidated Amounts Reported on Balance Sheets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Defined benefit plan accrued benefit cost	$ 74,089	$ 69,677
Current portion of above benefits, included in payrolls and benefits in accrued liabilities	(2,520)	(2,839)
Supplemental pension and other deferred compensation benefits	231	283
Deferred retirement benefits	71,800	67,121
Pension Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accrued benefits	35,876	25,964
Deferred retirement benefits	35,876	25,964
Other Post-Retirement Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accrued benefits	38,213	43,713
Deferred retirement benefits	$ 35,693	$ 40,874

XML

Leases - Future Minimum Lease Payments (Detail) $ in Thousands	Aug. 31, 2015 USD ($)
Leases [Abstract]
2016	$ 713
2017	713
2018	713
2019	677
2020	641
Thereafter	7,667
Total minimum lease payments	11,124
Less: Minimum sublease rents	0
Net minimum lease payments	11,124
Less: Amount representing interest	6,912
Present value of net minimum lease payments	4,212
2016	13,409
2017	11,898
2018	9,638
2019	8,509
2020	6,163
Thereafter	11,049
Total minimum lease payments	60,666
Less: Minimum sublease rents	0
Net minimum lease payments	$ 60,666

XML

Income Taxes - Additional Information (Detail) - USD ($)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Taxable income prior to net operating loss deduction	$ 4,000,000
Percentage of taxable income prior to net operating loss deduction	25.00%
Recognized valuation allowance, net of federal benefit	$ 2,577,000	$ 2,837,000
Pennsylvania [Member] | Minimum [Member]
Net operating loss carry forwards expiration year	2022
Pennsylvania [Member] | Maximum [Member]
Net operating loss carry forwards expiration year	2031
Pennsylvania [Member] | Entity One [Member]
Net operating loss carry forwards	$ 78,000,000
Pennsylvania [Member] | Entity Two [Member]
Net operating loss carry forwards	$ 40,000,000

XML

Accounts Receivable, Net - Additional Information (Detail) - USD ($)	Aug. 31, 2015	Aug. 31, 2014
Receivables [Abstract]
Allowance for doubtful accounts	$ 850,000	$ 1,070,000

XML

Inventories (Tables)

12 Months Ended

Aug. 31, 2015

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following:

	August 31,
	2015		2014
	(in thousands)
Crude Oil	$	60,209	$	36,667
Petroleum Products		92,452		63,252
Total @ LIFO		152,661		99,919
Merchandise		24,277		23,983
Supplies		29,128		27,570
Total @ FIFO		53,405		51,553
Total Inventory	$	206,066	$	151,472

XML

Disclosures About Fair Value of Financial Instruments - Additional Information (Detail) - USD ($)	Aug. 31, 2015	Aug. 31, 2014
Debt Disclosure [Abstract]
Carrying amount of debt instruments	$ 240,667,000	$ 239,525,000
Estimated fair value of debt instruments	$ 257,303,000

XML

Employee Benefit Plans - Estimated 2016 Amortization (Detail) $ in Thousands	12 Months Ended
	Aug. 31, 2015 USD ($)
Pension Benefits [Member]
Estimated Amortization Expense [Line Items]
Net loss amortization	$ 1,270
Total	1,270
Other Post-Retirement Benefits [Member]
Estimated Amortization Expense [Line Items]
Prior service cost (credit) amortization	(7,351)
Net loss amortization	2,789
Total	$ (4,562)

XML

Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2015	May. 31, 2015	Feb. 28, 2015	Nov. 30, 2014	Aug. 31, 2014	May. 31, 2014	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Text Block [Abstract]
Net sales	$ 708,241	$ 602,877	$ 580,904	$ 824,697	$ 989,515	$ 784,269	$ 773,719	$ 891,715	$ 2,716,719	$ 3,439,218	$ 3,681,253
Operating Profit	46,660	64,454	10,792	36,139	24,125	12,801	101,837	5,414	$ 158,045	$ 144,177	$ 328,608
Net Income (Loss)	$ 28,127	$ 34,707	$ 1,603	$ 17,614	$ 11,298	$ 3,232	$ 57,670	$ (1,087)

XML

Long-Term Debt - Additional Information (Detail) - USD ($)				12 Months Ended
	Aug. 30, 2013	Jul. 26, 2013	Mar. 08, 2011	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013	Aug. 30, 2013
Debt Instrument [Line Items]
Proceeds from sale of preferred stock						$ 141,164,000
Loss on early extinguishment of debt			$ 1,245,000			(18,727,000)
Unamortized discount				$ 3,791,000	$ 5,036,000
Redemption premium			915,000
Unamortized debt premium net			1,153,000
Deferred financing costs write off			$ 1,483,000
Amortization expense				$ 1,228,000	$ 1,228,000	$ 1,669,000
Series A Preferred Stock [Member]
Debt Instrument [Line Items]
Proceeds from sale of preferred stock	$ 141,163,750						$ 141,163,750
Dividend rate on preferred stock	6.00%	6.00%
10 1/2% Senior Notes Due 2012 [Member]
Debt Instrument [Line Items]
Senior Secured Notes , maturity period			2012
Net proceeds from sale of Senior Secured Notes			$ 344,249,000
Interest rate of Senior Secured Notes			10.50%
Accrued interest paid			$ 3,400,000
Senior Secured Notes Due 2018 [Member]
Debt Instrument [Line Items]
Redemption of senior notes	$ 127,750,000						127,750,000
Principal amount of notes outstanding	$ 365,000,000						365,000,000
Redemption price of Senior Secured Notes	110.50%
Loss on early extinguishment of debt							$ 18,727,000
Redemption premium on note	$ 13,413,000
Deferred financing costs of Senior Secured Notes	1,999,000
Unamortized debt discount of Senior Secured Notes	$ 3,315,000
Value of Senior Secured Notes sold			365,000,000
Senior Secured Notes sold for consideration			352,020,600
Unamortized discount			$ 12,979,400
Senior Secured Notes , maturity period			2018

XML

Income Taxes - Reconciliation of Income Tax Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Income Tax Disclosure [Abstract]
U. S. federal income taxes at the statutory rate	$ 44,649	$ 40,243	$ 93,465
State income taxes, net of Federal benefit	2,245	5,758	10,113
Domestic production activity deduction	(1,225)	(2,068)	(5,391)
Permanent items	538	405	863
Employment credits	(703)	(845)	(722)
Other	(27)	333	16
Income tax expense	$ 45,477	$ 43,826	$ 98,344

XML

Subsidiary Guarantors - Schedule of Condensed Consolidating Balance Sheets (Parenthetical) (Detail) - $ / shares	Aug. 31, 2015	Aug. 31, 2014	Jul. 26, 2013
Condensed Financial Statements, Captions [Line Items]
Common stock, par value per share	$ 0.10	$ 0.10
Common stock, shares authorized	100	100
Common stock, shares issued	100	100
Common stock, shares outstanding	100	100
Preferred stock, shares authorized			50,000
Series A Preferred Stock [Member]
Condensed Financial Statements, Captions [Line Items]
Preferred stock, par value per share	$ 1,000	$ 1,000	$ 1,000
Preferred stock, shares authorized	25,000	25,000	25,000
Preferred stock, shares issued	14,116	14,116
Preferred stock, shares outstanding	14,116	14,116

XML

Transactions with Affiliated Companies - Additional Information (Detail)		12 Months Ended
	Jul. 26, 2013 USD ($) shares	Aug. 31, 2015 USD ($) Store	Aug. 31, 2014 USD ($) Store	Aug. 31, 2013 USD ($) Store	Sep. 29, 2000 USD ($) Store
Related Party Transaction [Line Items]
Rent payments made to related entities		$ 5,360,000	$ 5,360,000	$ 5,319,000
Minimum annual aggregate rental period		10 years
Maximum annual aggregate rental period		20 years
Net sales		$ 131,326,000	191,828,000	207,104,000
Aggregate purchase price				141,164,000
Rent paid		200,000	200,000	152,000
Payments by Parent to insurance company		900,000
Series A Preferred Stock [Member]
Related Party Transaction [Line Items]
Shares issued by the company | shares	14,116.375
Aggregate purchase price	$ 141,163,750
Affiliate [Member]
Related Party Transaction [Line Items]
Management fees and overhead expenses incurred in the management and operation of the retail units		1,301,000	1,207,000	1,229,000
Payables to affiliate		1,106,000	1,355,000
Related party transaction, share of occupancy expenses with affiliates		420,000	420,000	420,000
Payment related to transaction with related party		283,000
Captive Insurance Company [Member]
Related Party Transaction [Line Items]
Payment related to transaction with related party		4,774,000	4,399,000	0
Related Party Transaction Engineering Services Agreement [Member]
Related Party Transaction [Line Items]
Payment related to transaction with related party		349,000	475,000
Affiliated Companies [Member]
Related Party Transaction [Line Items]
Payables to affiliate		296,000	151,000
Related Party Transaction Service Fees [Member]
Related Party Transaction [Line Items]
Service fee paid		$ 2,000,000	2,000,000	2,000,000
Retail Units [Member]
Related Party Transaction [Line Items]
Number of retail units owned by the non-subsidiary | Store		10
Number of additional retail units terminated | Store		8
Retail Units [Member] | 42 Retail Units [Member]
Related Party Transaction [Line Items]
Number of retails units sold | Store					42
Retail units sold to affiliate					$ 23,870,000
Retail Units [Member] | Fifty One Retail Units [Member]
Related Party Transaction [Line Items]
Management fees and overhead expenses incurred in the management and operation of the retail units		$ 2,325,000	$ 2,165,000	$ 2,219,000
Number of retail units for which company billed affiliates for management fees and overhead expenses | Store		51	51	51
Tax Sharing Agreement [Member]
Related Party Transaction [Line Items]
Capital contribution (distribution)		$ 36,000	$ (3,034,000)	$ 1,996,000
Receivables from parent under tax sharing agreement		$ 2,500,000	$ 0

XML

Subsidiary Guarantors - Schedule of Condensed Consolidating Statements of Operation (Detail) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
	Mar. 08, 2011	Aug. 31, 2015	May. 31, 2015	Feb. 28, 2015	Nov. 30, 2014	Aug. 31, 2014	May. 31, 2014	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Net sales		$ 708,241	$ 602,877	$ 580,904	$ 824,697	$ 989,515	$ 784,269	$ 773,719	$ 891,715	$ 2,716,719	$ 3,439,218	$ 3,681,253
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)										2,352,031	3,100,473	3,159,575
Losses on derivative contracts										0	0	2,319
Selling, general and administrative expenses										165,089	162,764	163,874
Depreciation and amortization expense										41,554	31,804	26,877
Total costs and expenses										2,558,674	3,295,041	3,352,645
Operating income		$ 46,660	$ 64,454	$ 10,792	$ 36,139	$ 24,125	$ 12,801	$ 101,837	$ 5,414	158,045	144,177	328,608
Other expense:
Interest expense, net										(26,648)	(26,341)	(39,035)
Other, net										(3,869)	(2,897)	(3,819)
Loss on early extinguishment of debt	$ 1,245											(18,727)
Total other income (expense)										(30,517)	(29,238)	(61,581)
Income before income tax expense										127,528	114,939	267,027
Income tax (benefit) expense
Current										25,897	25,050	95,723
Deferred										19,580	18,776	2,621
Total income tax expense										45,477	43,826	98,344
Net income										82,051	71,113	168,683
United Refining Company [Member]
Condensed Financial Statements, Captions [Line Items]
Net sales										1,936,281	2,626,015	2,864,154
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)										1,837,318	2,445,839	2,495,478
Losses on derivative contracts												2,319
Selling, general and administrative expenses										25,182	24,441	24,562
Depreciation and amortization expense										33,191	24,182	19,883
Total costs and expenses										1,895,691	2,494,462	2,542,242
Operating income										40,590	131,553	321,912
Other expense:
Interest expense, net										(25,621)	(25,368)	(38,292)
Other, net										(4,087)	(3,298)	(3,743)
Loss on early extinguishment of debt												(18,727)
Equity in net income of subsidiaries										73,834	7,890	4,130
Total other income (expense)										44,126	(20,776)	(56,632)
Income before income tax expense										84,716	110,777	265,280
Income tax (benefit) expense
Current										(14,845)	21,478	94,154
Deferred										17,510	18,186	2,443
Total income tax expense										2,665	39,664	96,597
Net income										82,051	71,113	168,683
Guarantors [Member]
Condensed Financial Statements, Captions [Line Items]
Net sales										1,439,016	1,692,936	1,726,422
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)										1,173,291	1,534,367	1,573,420
Selling, general and administrative expenses										139,907	138,323	139,312
Depreciation and amortization expense										8,363	7,622	6,994
Total costs and expenses										1,321,561	1,680,312	1,719,726
Operating income										117,455	12,624	6,696
Other expense:
Interest expense, net										(1,027)	(973)	(743)
Other, net										218	401	(76)
Total other income (expense)										(809)	(572)	(819)
Income before income tax expense										116,646	12,052	5,877
Income tax (benefit) expense
Current										40,742	3,572	1,569
Deferred										2,070	590	178
Total income tax expense										42,812	4,162	1,747
Net income										73,834	7,890	4,130
Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Net sales										(658,578)	(879,733)	(909,323)
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)										(658,578)	(879,733)	(909,323)
Total costs and expenses										(658,578)	(879,733)	(909,323)
Other expense:
Equity in net income of subsidiaries										(73,834)	(7,890)	(4,130)
Total other income (expense)										(73,834)	(7,890)	(4,130)
Income before income tax expense										(73,834)	(7,890)	(4,130)
Income tax (benefit) expense
Net income										$ (73,834)	$ (7,890)	$ (4,130)

XML

Income Taxes - Summary of Deferred Income Tax Liabilities (Assets) (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Income Tax Disclosure [Abstract]
Inventory valuation	$ 6,911	$ 5,901
Accounts receivable allowance	(348)	(442)
Accrued liabilities	(3,312)	(3,863)
Other	2,571	1,214
Current deferred income tax liabilities (assets)	5,822	2,810
Property, plant and equipment	87,765	71,540
Accrued liabilities	(28,740)	(26,924)
State net operating loss carryforwards	(7,695)	(7,927)
Valuation allowance	2,577	2,837
Other	2,014	4,614
Deferred income tax liabilities (assets)	55,921	44,140
Net deferred income tax liability	$ 61,743	$ 46,950

XML

Employee Benefit Plans - Fair Value of Plan Assets (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	$ 88,614	$ 93,245
Cash Equivalents [Member]
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	222	180
Mutual Funds [Member]
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	57,364	45,634
Equities [Member]
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	31,028	47,431
Level 1 [Member]
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	88,614	93,245
Level 1 [Member] | Cash Equivalents [Member]
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	222	180
Level 1 [Member] | Mutual Funds [Member]
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	57,364	45,634
Level 1 [Member] | Equities [Member]
Defined Benefit Plan Change In Fair Value Of Plan Assets [Line Items]
Total Fair Value of Plan Assets	$ 31,028	$ 47,431

XML

Subsidiary Guarantors

12 Months Ended

Aug. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Subsidiary Guarantors

17. Subsidiary Guarantors

All the Company’s wholly-owned subsidiaries fully and unconditionally guarantee on an unsecured basis, on a joint and several basis, the Company’s 10.50% Senior Secured Notes due 2018. There are no restrictions within the consolidated group on the ability of the Company or any of its subsidiaries to obtain loans from or pay dividends to other members of the consolidated group. Financial information of the Company’s wholly-owned subsidiary guarantors is as follows:

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2015
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Assets
Current:
Cash and cash equivalents	$	106,237		$	10,791		$	—		$	117,028
Accounts receivable, net		51,196			30,371			—			81,567
Inventories, net		176,320			29,746			—			206,066
Prepaid expenses and other assets		20,785			7,215			—			28,000
Amounts due from affiliated companies, net		1,883			(1,490	)		—			393
Intercompany		18,008			77,563			(95,571	)		—
Total current assets		374,429			154,196			(95,571	)		433,054
Property, plant and equipment, net		217,375			130,382			—			347,757
Deferred financing costs, net		2,667			—			—			2,667
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets, net		—			869			—			869
Deferred integrity and replacement costs, net		58,634			—			—			58,634
Deferred turnaround costs & other assets		25,410			5,226			—			30,636
Investment in subsidiaries		108,972			—			(108,972	)		—
	$	787,487		$	302,522		$	(204,543	)	$	885,466
Liabilities and Stockholder’s Equity
Current:
Current installments of long-term debt	$	447		$	1,109		$	—		$	1,556
Accounts payable		24,244			20,589			—			44,833
Accrued liabilities		10,856			7,055			—			17,911
Income taxes payable		(33,092	)		40,489			—			7,397
Sales, use and fuel taxes payable		18,366			5,007			—			23,373
Deferred income taxes		6,560			(738	)		—			5,822
Intercompany		—			95,571			(95,571	)		—
Total current liabilities		27,381			169,082			(95,571	)		100,892
Long term debt: less current installments		233,911			5,200			—			239,111
Deferred income taxes		39,179			16,742			—			55,921
Deferred retirement benefits		69,274			2,526			—			71,800
Total liabilities		369,745			193,550			(95,571	)		467,724
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share-shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Preferred stock; $1,000 par value per share—shares authorized 25,000; issued and outstanding 14,116		14,116			—			—			14,116
Additional paid-in capital		156,846			16,626			(16,626	)		156,846
Retained earnings		263,464			93,978			(93,978	)		263,464
Accumulated other comprehensive loss		(16,684	)		(1,650	)		1,650			(16,684	)
Total stockholder’s equity		417,742			108,972			(108,972	)		417,742
	$	787,487		$	302,522		$	(204,543	)	$	885,466

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2014
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Assets
Current:
Cash and cash equivalents	$	79,356		$	19,681		$	—		$	99,037
Accounts receivable, net		51,452			40,939			—			92,391
Refundable income taxes		6,000			—			—			6,000
Inventories, net		122,161			29,311			—			151,472
Prepaid income taxes		16,918			(3,244	)		—			13,674
Prepaid expenses and other assets		62,889			4,279			—			67,168
Intercompany		127,105			1,116			(128,221	)		—
Total current assets		465,881			92,082			(128,221	)		429,742
Property, plant and equipment, net		199,703			117,816			—			317,519
Deferred financing costs, net		3,575			—			—			3,575
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets, net		—			951			—			951
Deferred integrity and replacement costs, net		64,916			—			—			64,916
Deferred turnaround costs & other assets		39,302			2,610			—			41,912
Investment in subsidiaries		35,811			—			(35,811	)		—
	$	809,188		$	225,308		$	(164,032	)	$	870,464
Liabilities and Stockholder’s Equity
Current:
Current installments of long-term debt	$	519		$	1,032		$	—		$	1,551
Accounts payable		64,965			26,916			—			91,881
Accrued liabilities		12,315			6,376			—			18,691
Sales, use and fuel taxes payable		16,037			4,513			—			20,550
Deferred income taxes		3,770			(960	)		—			2,810
Amounts due to affiliated companies, net		—			1,521			—			1,521
Intercompany		—			128,221			(128,221	)		—
Total current liabilities		97,606			167,619			(128,221	)		137,004
Long term debt: less current installments		232,946			5,028			—			237,974
Deferred income taxes		28,816			15,324			—			44,140
Deferred retirement benefits		65,595			1,526			—			67,121
Total liabilities		424,963			189,497			(128,221	)		486,239
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share—shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Preferred stock; $1,000 par value per share—shares authorized 25,000; issued and outstanding 14,116		14,116			—			—			14,116
Additional paid-in capital		156,810			16,626			(16,626	)		156,810
Retained earnings		222,495			20,143			(20,143	)		222,495
Accumulated other comprehensive loss		(9,196	)		(976	)		976			(9,196	)
Total stockholder’s equity		384,225			35,811			(35,811	)		384,225
	$	809,188		$	225,308		$	(164,032	)	$	870,464

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2015
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	1,936,281		$	1,439,016		$	(658,578	)	$	2,716,719
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)		1,837,318			1,173,291			(658,578	)		2,352,031
Selling, general and administrative expenses		25,182			139,907			—			165,089
Depreciation and amortization expense		33,191			8,363			—			41,554
		1,895,691			1,321,561			(658,578	)		2,558,674
Operating income		40,590			117,455			—			158,045
Other expense:
Interest expense, net		(25,621	)		(1,027	)		—			(26,648	)
Other, net		(4,087	)		218			—			(3,869	)
Equity in net income of subsidiaries		73,834			—			(73,834	)		—
		44,126			(809	)		(73,834	)		(30,517	)
Income before income tax expense		84,716			116,646			(73,834	)		127,528
Income tax (benefit) expense
Current		(14,845	)		40,742			—			25,897
Deferred		17,510			2,070			—			19,580
		2,665			42,812			—			45,477
Net income	$	82,051		$	73,834		$	(73,834	)	$	82,051

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2014
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	2,626,015		$	1,692,936		$	(879,733	)	$	3,439,218
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)		2,445,839			1,534,367			(879,733	)		3,100,473
Selling, general and administrative expenses		24,441			138,323			—			162,764
Depreciation and amortization expense		24,182			7,622			—			31,804
		2,494,462			1,680,312			(879,733	)		3,295,041
Operating income		131,553			12,624			—			144,177
Other expense:
Interest expense, net		(25,368	)		(973	)		—			(26,341	)
Other, net		(3,298	)		401			—			(2,897	)
Equity in net income of subsidiaries		7,890			—			(7,890	)		—
		(20,776	)		(572	)		(7,890	)		(29,238	)
Income before income tax expense		110,777			12,052			(7,890	)		114,939
Income tax expense
Current		21,478			3,572			—			25,050
Deferred		18,186			590			—			18,776
		39,664			4,162			—			43,826
Net income	$	71,113		$	7,890		$	(7,890	)	$	71,113

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2013
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	2,864,154		$	1,726,422		$	(909,323	)	$	3,681,253
Costs and expenses:
Costs of goods sold (exclusive of depreciation, amortization and losses on derivative contracts)		2,495,478			1,573,420			(909,323	)		3,159,575
Losses on derivative contracts		2,319			—			—			2,319
Selling, general and administrative expenses		24,562			139,312			—			163,874
Depreciation and amortization expense		19,883			6,994			—			26,877
		2,542,242			1,719,726			(909,323	)		3,352,645
Operating income		321,912			6,696			—			328,608
Other expense:
Interest expense, net		(38,292	)		(743	)		—			(39,035	)
Other, net		(3,743	)		(76	)		—			(3,819	)
Loss on early extinguishment of debt		(18,727	)		—			—			(18,727	)
Equity in net income of subsidiaries		4,130			—			(4,130	)		—
		(56,632	)		(819	)		(4,130	)		(61,581	)
Income before income tax expense		265,280			5,877			(4,130	)		267,027
Income tax expense
Current		94,154			1,569			—			95,723
Deferred		2,443			178			—			2,621
		96,597			1,747			—			98,344
Net income	$	168,683		$	4,130		$	(4,130	)	$	168,683

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2015
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	128,665		$	14,985		$	—	$	143,650
Cash flows from investing activities:
Additions to property, plant and equipment		(30,451	)		(19,798	)		—		(50,249	)
Additions to amortizable intangible assets		—			(100	)		—		(100	)
Additions to deferred turnaround costs		(705	)		(2,911	)		—		(3,616	)
Additions to deferred integrity and replacement costs		(28,630	)		—			—		(28,630	)
Proceeds from asset dispositions		5			5			—		10
Net cash used in investing activities		(59,781	)		(22,804	)		—		(82,585	)
Cash flows from financing activities:
Distribution from Parent under the Tax Sharing Agreement		36			—			—		36
Dividends to preferred shareholder and stockholder		(41,082	)		—			—		(41,082	)
Principal reductions of long-term debt		(637	)		(1,071	)		—		(1,708	)
Deferred financing costs		(320	)		—			—		(320	)
Net cash used in financing activities		(42,003	)		(1,071	)		—		(43,074	)
Net increase (decrease) in cash and cash equivalents		26,881			(8,890	)		—		17,991
Cash and cash equivalents, beginning of year		79,356			19,681			—		99,037
Cash and cash equivalents, end of period	$	106,237		$	10,791		$	—	$	117,028

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2014
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	92,535		$	18,698		$	—	$	111,233
Cash flows from investing activities:
Additions to property, plant and equipment		(33,069	)		(16,195	)		—		(49,264	)
Additions to deferred turnaround costs		(41,850	)		(345	)		—		(42,195	)
Additions to deferred integrity and replacement costs		(36,810	)		—			—		(36,810	)
Proceeds from asset dispositions		56			2			—		58
Net cash used in investing activities		(111,673	)		(16,538	)		—		(128,211	)
Cash flows from financing activities:
Distribution to Parent under the Tax Sharing Agreement		(3,034	)		—			—		(3,034	)
Dividends to preferred shareholder and stockholder		(38,951	)		—			—		(38,951	)
Proceeds from issuance of long term debt		—			1,426			—		1,426
Principal reductions of long-term debt		(907	)		(1,056	)		—		(1,963	)
Net cash (used in) provided by financing activities		(42,892	)		370			—		(42,522	)
Net (decrease) increase in cash and cash equivalents		(62,030	)		2,530			—		(59,500	)
Cash and cash equivalents, beginning of year		141,386			17,151			—		158,537
Cash and cash equivalents, end of period	$	79,356		$	19,681		$	—	$	99,037

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2013
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	136,168		$	28,203		$	—	$	164,371
Cash flows from investing activities:
Additions to property, plant and equipment		(15,921	)		(25,676	)		—		(41,597	)
Additions to deferred turnaround costs		(1,170	)		(71	)		—		(1,241	)
Proceeds from asset dispositions		70			11			—		81
Net cash used in investing activities		(17,021	)		(25,736	)		—		(42,757	)
Cash flows from financing activities:
Distribution from Parent under the Tax Sharing Agreement		1,996			—			—		1,996
Proceeds from sale of preferred stock		141,164			—			—		141,164
Dividends to stockholder		(114,338	)		—			—		(114,338	)
Principal reductions of long-term debt		(128,802	)		(637	)		—		(129,439	)
Net cash used in financing activities		(99,980	)		(637	)		—		(100,617	)
Net increase in cash and cash equivalents		19,167			1,830			—		20,997
Cash and cash equivalents, beginning of year		122,219			15,321			—		137,540
Cash and cash equivalents, end of period	$	141,386		$	17,151		$	—	$	158,537

XML

Property, Plant and Equipment - Additional Information (Detail) - Bio-diesel [Member] gal in Millions	Mar. 06, 2013 USD ($) gal	Aug. 31, 2015 USD ($)
Property, Plant and Equipment [Line Items]
Annual capacity of facility acquired | gal	50
Acquisition of assets for cash	$ 9,800,000
Fair value of assets acquired	20,735,000
Deferred taxes related to acquisition	$ 4,960,000
Remaining cost of project for facility acquired		$ 30,000,000

XML

Subsidiary Guarantors (Tables)

12 Months Ended

Aug. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2015
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Assets
Current:
Cash and cash equivalents	$	106,237		$	10,791		$	—		$	117,028
Accounts receivable, net		51,196			30,371			—			81,567
Inventories, net		176,320			29,746			—			206,066
Prepaid expenses and other assets		20,785			7,215			—			28,000
Amounts due from affiliated companies, net		1,883			(1,490	)		—			393
Intercompany		18,008			77,563			(95,571	)		—
Total current assets		374,429			154,196			(95,571	)		433,054
Property, plant and equipment, net		217,375			130,382			—			347,757
Deferred financing costs, net		2,667			—			—			2,667
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets, net		—			869			—			869
Deferred integrity and replacement costs, net		58,634			—			—			58,634
Deferred turnaround costs & other assets		25,410			5,226			—			30,636
Investment in subsidiaries		108,972			—			(108,972	)		—
	$	787,487		$	302,522		$	(204,543	)	$	885,466
Liabilities and Stockholder’s Equity
Current:
Current installments of long-term debt	$	447		$	1,109		$	—		$	1,556
Accounts payable		24,244			20,589			—			44,833
Accrued liabilities		10,856			7,055			—			17,911
Income taxes payable		(33,092	)		40,489			—			7,397
Sales, use and fuel taxes payable		18,366			5,007			—			23,373
Deferred income taxes		6,560			(738	)		—			5,822
Intercompany		—			95,571			(95,571	)		—
Total current liabilities		27,381			169,082			(95,571	)		100,892
Long term debt: less current installments		233,911			5,200			—			239,111
Deferred income taxes		39,179			16,742			—			55,921
Deferred retirement benefits		69,274			2,526			—			71,800
Total liabilities		369,745			193,550			(95,571	)		467,724
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share-shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Preferred stock; $1,000 par value per share—shares authorized 25,000; issued and outstanding 14,116		14,116			—			—			14,116
Additional paid-in capital		156,846			16,626			(16,626	)		156,846
Retained earnings		263,464			93,978			(93,978	)		263,464
Accumulated other comprehensive loss		(16,684	)		(1,650	)		1,650			(16,684	)
Total stockholder’s equity		417,742			108,972			(108,972	)		417,742
	$	787,487		$	302,522		$	(204,543	)	$	885,466

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2014
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Assets
Current:
Cash and cash equivalents	$	79,356		$	19,681		$	—		$	99,037
Accounts receivable, net		51,452			40,939			—			92,391
Refundable income taxes		6,000			—			—			6,000
Inventories, net		122,161			29,311			—			151,472
Prepaid income taxes		16,918			(3,244	)		—			13,674
Prepaid expenses and other assets		62,889			4,279			—			67,168
Intercompany		127,105			1,116			(128,221	)		—
Total current assets		465,881			92,082			(128,221	)		429,742
Property, plant and equipment, net		199,703			117,816			—			317,519
Deferred financing costs, net		3,575			—			—			3,575
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets, net		—			951			—			951
Deferred integrity and replacement costs, net		64,916			—			—			64,916
Deferred turnaround costs & other assets		39,302			2,610			—			41,912
Investment in subsidiaries		35,811			—			(35,811	)		—
	$	809,188		$	225,308		$	(164,032	)	$	870,464
Liabilities and Stockholder’s Equity
Current:
Current installments of long-term debt	$	519		$	1,032		$	—		$	1,551
Accounts payable		64,965			26,916			—			91,881
Accrued liabilities		12,315			6,376			—			18,691
Sales, use and fuel taxes payable		16,037			4,513			—			20,550
Deferred income taxes		3,770			(960	)		—			2,810
Amounts due to affiliated companies, net		—			1,521			—			1,521
Intercompany		—			128,221			(128,221	)		—
Total current liabilities		97,606			167,619			(128,221	)		137,004
Long term debt: less current installments		232,946			5,028			—			237,974
Deferred income taxes		28,816			15,324			—			44,140
Deferred retirement benefits		65,595			1,526			—			67,121
Total liabilities		424,963			189,497			(128,221	)		486,239
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share—shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Preferred stock; $1,000 par value per share—shares authorized 25,000; issued and outstanding 14,116		14,116			—			—			14,116
Additional paid-in capital		156,810			16,626			(16,626	)		156,810
Retained earnings		222,495			20,143			(20,143	)		222,495
Accumulated other comprehensive loss		(9,196	)		(976	)		976			(9,196	)
Total stockholder’s equity		384,225			35,811			(35,811	)		384,225
	$	809,188		$	225,308		$	(164,032	)	$	870,464

Schedule of Condensed Consolidating Statements of Operations

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2015
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	1,936,281		$	1,439,016		$	(658,578	)	$	2,716,719
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)		1,837,318			1,173,291			(658,578	)		2,352,031
Selling, general and administrative expenses		25,182			139,907			—			165,089
Depreciation and amortization expense		33,191			8,363			—			41,554
		1,895,691			1,321,561			(658,578	)		2,558,674
Operating income		40,590			117,455			—			158,045
Other expense:
Interest expense, net		(25,621	)		(1,027	)		—			(26,648	)
Other, net		(4,087	)		218			—			(3,869	)
Equity in net income of subsidiaries		73,834			—			(73,834	)		—
		44,126			(809	)		(73,834	)		(30,517	)
Income before income tax expense		84,716			116,646			(73,834	)		127,528
Income tax (benefit) expense
Current		(14,845	)		40,742			—			25,897
Deferred		17,510			2,070			—			19,580
		2,665			42,812			—			45,477
Net income	$	82,051		$	73,834		$	(73,834	)	$	82,051

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2014
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	2,626,015		$	1,692,936		$	(879,733	)	$	3,439,218
Costs and expenses:
Costs of goods sold (exclusive of depreciation and amortization)		2,445,839			1,534,367			(879,733	)		3,100,473
Selling, general and administrative expenses		24,441			138,323			—			162,764
Depreciation and amortization expense		24,182			7,622			—			31,804
		2,494,462			1,680,312			(879,733	)		3,295,041
Operating income		131,553			12,624			—			144,177
Other expense:
Interest expense, net		(25,368	)		(973	)		—			(26,341	)
Other, net		(3,298	)		401			—			(2,897	)
Equity in net income of subsidiaries		7,890			—			(7,890	)		—
		(20,776	)		(572	)		(7,890	)		(29,238	)
Income before income tax expense		110,777			12,052			(7,890	)		114,939
Income tax expense
Current		21,478			3,572			—			25,050
Deferred		18,186			590			—			18,776
		39,664			4,162			—			43,826
Net income	$	71,113		$	7,890		$	(7,890	)	$	71,113

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2013
	United Refining Company			Guarantors			Eliminations			United Refining Company & Subsidiaries
Net sales	$	2,864,154		$	1,726,422		$	(909,323	)	$	3,681,253
Costs and expenses:
Costs of goods sold (exclusive of depreciation, amortization and losses on derivative contracts)		2,495,478			1,573,420			(909,323	)		3,159,575
Losses on derivative contracts		2,319			—			—			2,319
Selling, general and administrative expenses		24,562			139,312			—			163,874
Depreciation and amortization expense		19,883			6,994			—			26,877
		2,542,242			1,719,726			(909,323	)		3,352,645
Operating income		321,912			6,696			—			328,608
Other expense:
Interest expense, net		(38,292	)		(743	)		—			(39,035	)
Other, net		(3,743	)		(76	)		—			(3,819	)
Loss on early extinguishment of debt		(18,727	)		—			—			(18,727	)
Equity in net income of subsidiaries		4,130			—			(4,130	)		—
		(56,632	)		(819	)		(4,130	)		(61,581	)
Income before income tax expense		265,280			5,877			(4,130	)		267,027
Income tax expense
Current		94,154			1,569			—			95,723
Deferred		2,443			178			—			2,621
		96,597			1,747			—			98,344
Net income	$	168,683		$	4,130		$	(4,130	)	$	168,683

Schedule of Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2015
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	128,665		$	14,985		$	—	$	143,650
Cash flows from investing activities:
Additions to property, plant and equipment		(30,451	)		(19,798	)		—		(50,249	)
Additions to amortizable intangible assets		—			(100	)		—		(100	)
Additions to deferred turnaround costs		(705	)		(2,911	)		—		(3,616	)
Additions to deferred integrity and replacement costs		(28,630	)		—			—		(28,630	)
Proceeds from asset dispositions		5			5			—		10
Net cash used in investing activities		(59,781	)		(22,804	)		—		(82,585	)
Cash flows from financing activities:
Distribution from Parent under the Tax Sharing Agreement		36			—			—		36
Dividends to preferred shareholder and stockholder		(41,082	)		—			—		(41,082	)
Principal reductions of long-term debt		(637	)		(1,071	)		—		(1,708	)
Deferred financing costs		(320	)		—			—		(320	)
Net cash used in financing activities		(42,003	)		(1,071	)		—		(43,074	)
Net increase (decrease) in cash and cash equivalents		26,881			(8,890	)		—		17,991
Cash and cash equivalents, beginning of year		79,356			19,681			—		99,037
Cash and cash equivalents, end of period	$	106,237		$	10,791		$	—	$	117,028

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2014
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	92,535		$	18,698		$	—	$	111,233
Cash flows from investing activities:
Additions to property, plant and equipment		(33,069	)		(16,195	)		—		(49,264	)
Additions to deferred turnaround costs		(41,850	)		(345	)		—		(42,195	)
Additions to deferred integrity and replacement costs		(36,810	)		—			—		(36,810	)
Proceeds from asset dispositions		56			2			—		58
Net cash used in investing activities		(111,673	)		(16,538	)		—		(128,211	)
Cash flows from financing activities:
Distribution to Parent under the Tax Sharing Agreement		(3,034	)		—			—		(3,034	)
Dividends to preferred shareholder and stockholder		(38,951	)		—			—		(38,951	)
Proceeds from issuance of long term debt		—			1,426			—		1,426
Principal reductions of long-term debt		(907	)		(1,056	)		—		(1,963	)
Net cash (used in) provided by financing activities		(42,892	)		370			—		(42,522	)
Net (decrease) increase in cash and cash equivalents		(62,030	)		2,530			—		(59,500	)
Cash and cash equivalents, beginning of year		141,386			17,151			—		158,537
Cash and cash equivalents, end of period	$	79,356		$	19,681		$	—	$	99,037

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2013
	United Refining Company			Guarantors			Eliminations		United Refining Company & Subsidiaries
Net cash provided by operating activities	$	136,168		$	28,203		$	—	$	164,371
Cash flows from investing activities:
Additions to property, plant and equipment		(15,921	)		(25,676	)		—		(41,597	)
Additions to deferred turnaround costs		(1,170	)		(71	)		—		(1,241	)
Proceeds from asset dispositions		70			11			—		81
Net cash used in investing activities		(17,021	)		(25,736	)		—		(42,757	)
Cash flows from financing activities:
Distribution from Parent under the Tax Sharing Agreement		1,996			—			—		1,996
Proceeds from sale of preferred stock		141,164			—			—		141,164
Dividends to stockholder		(114,338	)		—			—		(114,338	)
Principal reductions of long-term debt		(128,802	)		(637	)		—		(129,439	)
Net cash used in financing activities		(99,980	)		(637	)		—		(100,617	)
Net increase in cash and cash equivalents		19,167			1,830			—		20,997
Cash and cash equivalents, beginning of year		122,219			15,321			—		137,540
Cash and cash equivalents, end of period	$	141,386		$	17,151		$	—	$	158,537

XML

Income Taxes - Summary of Income Tax Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Income Tax Disclosure [Abstract]
Current	$ 25,298	$ 20,431	$ 78,569
Deferred	16,671	14,453	4,154
Federal Income tax expense	41,969	34,884	82,723
Current	599	4,619	17,154
Deferred	2,909	4,323	(1,533)
State Income tax expense	3,508	8,942	15,621
Income tax expense	$ 45,477	$ 43,826	$ 98,344

XML

Leases (Tables)

12 Months Ended

Aug. 31, 2015

Leases [Abstract]

Future Minimum Lease Payments

Future minimum lease payments as of August 31, 2015 are summarized as follows:

Year ended August 31,	Capital Leases		Operating Leases
	(in thousands)
2016	$	713	$	13,409
2017		713		11,898
2018		713		9,638
2019		677		8,509
2020		641		6,163
Thereafter		7,667		11,049
Total minimum lease payments		11,124		60,666
Less: Minimum sublease rents		—		—
Net minimum lease payments		11,124	$	60,666
Less: Amount representing interest		6,912
Present value of net minimum lease payments	$	4,212

XML

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 115,000	$ 106,000	$ 107,000
2016	126,000
2017	127,000
2018	126,000
2019	127,000
2020	$ 67,000

XML

Employee Benefit Plans - Weighted Average Assumptions Used to Determine Year End Benefit Obligations (Detail)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Rate of compensation increase	3.00%	3.00%
Pension Benefits [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.40%	4.00%
Pension Benefits [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.50%	4.20%
Other Post-Retirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.15%	3.85%
Health care cost trend
Initial trend	7.00%	7.00%
Ultimate trend	5.00%	5.00%
Year ultimate reached	2025	2025

XML

Long-Term Debt - Schedule of Deferred Financing Costs Amortized to Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Debt Disclosure [Abstract]
Beginning balance	$ 8,881	$ 8,881
Current year additions	320	0
Total financing costs	9,201	8,881
Total financing costs	9,201	8,881
Less: Accumulated amortization	6,534	5,306
Deferred financing costs, net	$ 2,667	$ 3,575

XML

Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Inventory Disclosure [Abstract]
Crude Oil	$ 60,209	$ 36,667
Petroleum Products	92,452	63,252
Total @ LIFO	152,661	99,919
Merchandise	24,277	23,983
Supplies	29,128	27,570
Total @ FIFO	53,405	51,553
Total Inventory	$ 206,066	$ 151,472

XML

Description of Business and Summary of Significant Accounting Policies

12 Months Ended

Aug. 31, 2015

Accounting Policies [Abstract]

Description of Business and Summary of Significant Accounting Policies

1. Description of Business and Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

The consolidated financial statements include the accounts of United Refining Company and its subsidiaries, United Refining Company of Pennsylvania and its subsidiaries, United Biofuels, Inc. and Kiantone Pipeline Corporation (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

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

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

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

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investment securities with maturities of three months or less at date of acquisition to be cash equivalents.

Derivative Instruments

From time to time the Company uses derivatives to reduce its exposure to fluctuations in crude oil purchase costs and refining margins. Derivative products, historically crude oil option contracts (puts) and crackspread option contracts have been used to hedge the volatility of these items. The Company does not enter such contracts for speculative purposes. The Company accounts for changes in the fair value of its contracts by marking them to market and recognizing any resulting gains or losses in its Statement of Operations. The Company includes the carrying amounts of the contracts in derivative liability in its Consolidated Balance Sheet.

At August 31, 2015, the Company had no derivative instruments outstanding as part of its risk management strategy.

For the fiscal years ended August 31, 2015, 2014 and 2013 the Company recognized $0, $0 and $2,319,000 of losses in costs and expenses in its Consolidated Statements of Operations.

Inventories and Exchanges

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

Property, Plant and Equipment

Property, plant and equipment is stated at cost and depreciated by the straight-line method over the respective estimated useful lives. Routine current maintenance, repairs and replacement costs are charged against income. Expenditures which materially increase values, expand capacities or extend useful lives are capitalized. A summary of the principal useful lives used in computing depreciation expense is as follows:

	Estimated Useful Lives (Years)
Refining		20-30
Marketing		15-30
Transportation		20-30

Leases

The Company leases land, buildings, and equipment under long-term operating and capital leases and accounts for the leases in accordance with ASC 360-10-30-8. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term. The lease term begins on the date the Company has the right to control the use of the leased property pursuant to the terms of the lease.

Deferred Integrity and Replacement Costs

The Company and Kiantone Pipeline Corporation, a subsidiary of the Company, and Enbridge Energy Limited Partnership (“EELP”) and Enbridge Pipelines, Inc. (“EPI” and, together with EELP, the “Carriers”), entered into a letter agreement dated July 31, 2014, as amended, (the “Letter Agreement”) with respect to a pipeline (“Line 10”) owned by the Carriers, which transports crude oil from Canada to the Company’s Kiantone Pipeline. Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10, and agreed to pay for half the cost of replacing certain portions of Line 10.

The integrity and replacement costs, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which is approximately 11 years. As of August 31, 2015 and 2014, net deferred integrity and replacement costs amounted to $58,634,000 and $64,916,000, respectively. Amortization expense of $6,282,000, $524,000 and $0 is included in depreciation and amortization for the fiscal years ended August 31, 2015, 2014 and 2013, respectively.

Deferred Maintenance Turnarounds

The cost of maintenance turnarounds, which consist of complete shutdown and inspection of significant units of the refinery at intervals of two or more years for necessary repairs and replacements, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which ranges from 2 to 10 years. As of August 31, 2015 and 2014, deferred turnaround costs included in Deferred Turnaround Costs and Other Assets, amounted to $28,489,000 and $39,352,000, which are net of accumulated amortization of $20,888,000 and $10,616,000, respectively. Amortization expense included in Costs of Goods Sold for the fiscal years ended August 31, 2015, 2014 and 2013 amounted to $14,479,000, $11,319,000 and $7,082,000, respectively.

Amortizable Intangible Assets

The Company amortizes identifiable intangible assets such as brand names, non-compete agreements, leasehold covenants and deed restrictions on a straight line basis over their estimated useful lives which range from 5 to 25 years.

Revenue Recognition

Revenues for products sold by the wholesale segment are recorded upon delivery of the products to our customers, at which time title to those products is transferred and when payment has either been received or collection is reasonably assured. At no point do we recognize revenue from the sale of products prior to the transfer of its title. Title to product is transferred to the customer at the shipping point, under pre-determined contracts for sale at agreed upon or posted prices to customers of which collectability is reasonably assured. Revenues for products sold by the retail segment are recognized immediately upon sale to the customer. Included in Net Sales and Costs of Goods Sold are consumer excise taxes of $246,636,000, $238,332,000 and $225,125,000 for the years ended August 31, 2015, 2014 and 2013, respectively.

Cost Classifications

Our Costs of Goods Sold (which excludes depreciation and amortization on property, plant and equipment and losses on derivative contracts) include Refining Cost of Products Sold and related Refining Operating expenses.

Refining Cost of Products Sold includes cost of crude oil, other feedstocks, blendstocks, the cost of purchased finished products, amortization of turnaround costs, transportation costs and distribution costs. Retail Cost of Products Sold include cost for motor fuels and for merchandise. Motor fuel cost of products sold represents net cost for purchased fuel. Merchandise cost of products sold includes merchandise purchases, net of merchandise rebates and inventory shrinkage. Wholesale cost of products sold includes the cost of fuel and lubricants, transportation and distribution costs and labor.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company’s results of operations are included in the consolidated Federal income tax return of the Parent and separately in various state jurisdictions. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. With few exceptions, the Company is no longer subject to income tax examinations by U.S. federal, state or local tax authorities for years before fiscal 2012. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of interest expense, net and other, net, respectively. No amounts of such expenses are currently accrued.

Post-Retirement Healthcare and Pension Benefits

The Company provides post-retirement healthcare benefits to salaried and certain hourly employees that retired prior to September 1, 2010. The benefits provided are hospitalization and medical coverage for the employee and spouse until age 65. Benefits continue until the death of the retiree, which results in the termination of benefits for all dependent coverage. If an employee leaves the Company as a terminated vested member of a pension plan prior to normal retirement age, the person is not entitled to any post-retirement healthcare benefits. Benefits payable under this program are secondary to any benefits provided by Medicare or any other governmental programs.

In June 2010, the Company announced changes to the healthcare and pension plans provided to salaried employees. Effective September 1, 2010, postretirement medical benefits for new hires and active salaried employees retiring after September 1, 2010 were eliminated. Additionally, effective January 1, 2011, deductibles and co-payments were added to the medical benefits plan for all active and retired employees. For salaried employees meeting certain age and service requirements, the Company contributes a defined dollar amount towards the cost of retiree healthcare based upon the employee’s length of service. Similarly, effective August 31, 2010, benefits under the Company’s defined benefit pension plan were frozen for all salaried employees, including the Company’s Chief Executive Officer and Chief Financial Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan as well as a transition contribution for older employees. The changes made for the salary group described above were also incorporated into the collective bargaining agreement reached with the International Union of Operating Engineers, Local No.95 effective February 1, 2012.

The Company accrues post-retirement benefits other than pensions, during the years that the employee renders the necessary service, of the expected cost of providing those benefits to an employee and the employee’s beneficiaries and covered dependents.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts based on specifically identified amounts that we believe to be uncollectible. The Company also recorded additional allowances based on historical collection experience and its assessment of the general financial conditions affecting the customer base. Senior management reviews accounts receivable on a weekly basis to determine if any receivables will potentially be uncollectible. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Concentration Risks

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments.

The Company places its temporary cash investments with quality financial institutions. At times, such investments were in excess of FDIC insurance limits. The Company has not experienced any losses in such accounts.

The Company purchased approximately 15% and 14% of its cost of goods sold from one vendor during the fiscal years ended August 31, 2015 and 2014, respectively. The Company is not obligated to purchase from this vendor, and, if necessary, there are other vendors from which the Company can purchase crude oil and other petroleum based products. The Company had $0 and $0 in accounts payable for the years ended August 31, 2015 and 2014 to this vendor.

Environmental Matters

The Company expenses environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures, which extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. The Company determines its liability on a site by site basis and records a liability at the time when it is probable and can be reasonably estimated. The Company’s estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. The estimated liability of the Company is not reduced for possible recoveries from insurance carriers and is recorded in accrued liabilities.

Goodwill and Other Non-Amortizable Assets

In accordance with ASC 350, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with ASC 350. Other definite lived intangible assets continue to be amortized over their estimated useful lives.

The Company performed separate impairment tests for its goodwill and tradename using the discounted cash flow method. The fair value of the Company’s reporting units exceeded their carrying values. The fair value of the tradename exceeded its carrying value. The Company has noted no subsequent indication that would require testing its goodwill and tradename for impairment.

Long-Lived Assets

Whenever events or changes in circumstances indicate that the carrying value of any of these assets (other than goodwill and tradename) may not be recoverable, the Company will assess the recoverability of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written down to fair value.

Other Comprehensive (Loss) Income

The Company reports comprehensive (loss) income in accordance with ASC 220-10. ASC 220-10 establishes guidelines for the reporting and display of comprehensive (loss) income and its components in financial statements. Comprehensive (loss) income includes charges and credits to equity that is not the result of transactions with the shareholder. Included in other comprehensive loss for the Company is a charge for unrecognized post-retirement costs, which is net of taxes in accordance with ASC 715. The accumulated other comprehensive loss balance is made up entirely of unrecognized post-retirement costs.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASU No. 2014-09 supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 is effective for interim and annual periods beginning after December 15, 2017, with early application permitted only as of annual reporting periods beginning after December 31, 2016. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2014-09.

Reclassification

Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform with the presentation in the current year.

XML

Employee Benefit Plans - Components of Net Periodic Pension Cost and Post-Retirement Healthcare Benefit Cost (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 626	$ 597	$ 652
Interest cost on benefit obligation	4,850	5,204	4,511
Expected return on plan assets	(6,351)	(5,569)	(5,160)
Amortization and deferrals	724	697	1,210
Net periodic benefit (income) cost	(151)	929	1,213
Other Post-Retirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	608	774
Service cost	608	774	940
Interest cost on benefit obligation	1,656	2,073
Interest cost on benefit obligation	1,656	2,072	1,884
Expected return on plan assets	0	0	0
Amortization and deferrals	(3,152)	(1,860)	123
Net periodic benefit (income) cost	$ (888)	$ 986	$ 2,947

XML

Quarterly Financial Data (unaudited) (Tables)

12 Months Ended

Aug. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Data

	Net Sales		Operating Profit		Net Income (Loss)
	(in thousands)
2015
First Quarter	$	824,697	$	36,139	$	17,614
Second Quarter		580,904		10,792		1,603
Third Quarter		602,877		64,454		34,707
Fourth Quarter		708,241		46,660		28,127
2014
First Quarter	$	891,715	$	5,414	$	(1,087	)
Second Quarter		773,719		101,837		57,670
Third Quarter		784,269		12,801		3,232
Fourth Quarter		989,515		24,125		11,298

XML

Subsequent Events

12 Months Ended

Aug. 31, 2015

Subsequent Events [Abstract]

Subsequent Events

21. Subsequent Events

On October 20, 2015 (the “Closing Date”), URC, United Refining Company of Pennsylvania, Kiantone Pipeline Corporation (“Kiantone”), United Refining Company of New York Inc., United Biofuels, Inc., Country Fair, Inc. and Kwik-Fill Corporation (collectively, the “Borrowers”) entered into an Amended, Restated and Consolidated Revolving Credit, Term Loan and Security Agreement (“Credit Agreement”) with a group of lenders led by PNC Bank, National Association, as Administrative Agent (the “Agent”), and PNC Capital Markets LLC, as Sole Lead Arranger and Bookrunner. The Credit Agreement amends and restates the Amended and Restated Credit Agreement, dated May 18, 2011 and last amended June 18, 2013, by and between the Company and certain subsidiaries and PNC Bank, National Association, as Administrative Agent (the “Existing Credit Facility”). The Credit Agreement will terminate on October 19, 2020 (the “Expiration Date”). Until the Expiration Date, the Company may borrow on the New Revolving Credit Facility (as defined below) on a borrowing base formula set forth in the Credit Agreement.

Pursuant to the Credit Agreement, the Company increased its existing senior secured revolving credit facility from $175,000,000 to $225,000,000. The New Revolving Credit Facility may be increased by an amount not to exceed $50,000,000 without additional approval from the lenders named in the Credit Agreement if existing lenders agree to increase their commitments or additional lenders commit to fund such increase. Interest under the New Revolving Credit Facility is calculated as follows: (a) for domestic rate borrowings, at (i) the greater of the Agent’s prime rate, federal funds rate plus .5% or the daily LIBOR rate plus 1%, plus (ii) an applicable margin of 1.25% to 1.75%, and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.25% to 2.75%. The applicable margin will vary depending on a formula calculating the Company’s average unused availability under the facility. In addition, pursuant to the Credit Agreement, the Company entered into a term loan in the amount of $250,000,000, which was made in a single drawing on the Closing Date (“Term Loan” and, together with the New Revolving Credit Facility, the “Credit Obligations”). Under the Term Loan, interest is calculated as follows: (a) for domestic rate borrowings, at (i) the greater of the Agent’s prime rate, federal funds rate plus .5% or the daily LIBOR rate plus 1%, plus (ii) an applicable margin of 1.75% to 2.25%, and (b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.75% to 3.25%. The applicable margin will vary depending on a formula calculating the Company’s average unused availability under the facility. The Term Loan is prepayable in whole or in part at any time without premium or penalty. The Term Loan shall be paid in full on or prior to the Expiration Date and shall be paid in equal quarterly amounts based on a ten-year straight line amortization schedule. Prepayment of the Term Loan in whole or in part may be made at any time without premium or penalty.

The Credit Obligations are secured by a first priority security interest in certain cash accounts, accounts receivable, inventory, the refinery, including a related tank farm, and the capital stock of Kiantone. At such time as the Term Loan is repaid in full, and provided no event of default exists, the security interest in the refinery and the equity interests in Kiantone shall be released.

The Credit Agreement requires minimum undrawn availability of $15,000,000 at all times prior to the repayment of the Term Loan and the greater of 12.5% of the maximum New Revolving Credit Facility or $25,000,000 after the repayment of the Term Loan. Upon the repayment of the Term Loan, the Company is required to maintain a consolidated net worth of no less than $100,000,000. The Credit Agreement includes customary mandatory prepayment provisions, including in connection with non-ordinary course asset sales, equity issuances and the incurrence of additional debt. Unless assets sold in non-ordinary course transactions were included in the borrowing base for the New Revolving Credit Facility, mandatory prepayments shall be applied first to the repayment of the Term Loan and then the New Revolving Credit Facility. The Credit Agreement also includes customary affirmative and negative covenants, including, among other things, covenants related to the fixed charge coverage ratio, payment of fees, conduct of business, maintenance of existence and assets, payment of indebtedness and the incurrence of additional indebtedness, intercompany obligations, affiliate transactions, amendments to organizational documents, and financial statements.

The proceeds of the Credit Agreement will be used to (i) refinance the Company’s existing senior debt under the Existing Credit Facility (ii) provide for the Company’s general corporate needs, including working capital requirements and capital expenditures, (iii) repay and satisfy in full those certain 10.500% senior secured notes due 2018 (the “Senior Secured Notes due 2018”) and (iv) pay the fees and expenses associated with the Credit Agreement.

On October 6, 2015, the Company announced the commencement of a tender offer (the “Tender Offer”) to purchase for cash any and all of the outstanding $237.25 million aggregate principal amount outstanding of the Senior Secured Notes due 2018 and a solicitation of consents for proposed amendments to the related indenture (the “Consent Solicitation”). The Tender Offer and Consent Solicitation was made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated October 6, 2015 and related consent and letter of transmittal. The Tender Offer was set to expire on November 2, 2015 (the “Expiration Date”). Holders of Senior Secured Notes due 2018 that validly tendered prior to 5:00 p.m., New York City time, on October 19, 2015 (the “consent deadline”), would receive total consideration of $1,057.50 per $1,000.00 principal amount of Senior Secured Notes due 2018, plus accrued and unpaid interest, which included a consent payment of $30.00. Holders that tender after the consent deadline and prior to the Expiration Date would receive total consideration of $1,027.50 per $1,000.00 principal amount, plus accrued and unpaid interest.

On October 20, 2015, the Company announced that $217,871,000 aggregate principal amount, or 91.83% of the Senior Secured Notes due 2018, were validly tendered prior to the consent deadline. The Company also received the requisite consents for the proposed amendments to eliminate most of the covenants applicable to the Senior Secured Notes due 2018, including the release of the collateral securing the Notes. The remaining 8.17% of the Senior Secured Notes due 2018 or $19,379,000, will be fully redeemed at a redemption price of 105.25% of par value plus accrued interest of $452,177 on November 19, 2015.

On November 12, 2015, pursuant to the Letter Agreement, the Company made a payment to the Carriers in the amount of $60,700,000 for Subsequent Year Pipe Replacement Costs, which amount reflects credits received by the Company upon reconciliation of the Integrity Costs funded in fiscal 2014.

XML

Legal Proceedings

12 Months Ended

Aug. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

20. Legal Proceedings

The Company and its subsidiaries are from time to time parties to various legal proceedings that arise in the ordinary course of their respective business operations. These proceedings include various administrative actions relating to federal, state and local environmental laws and regulations as well as civil matters before various courts seeking money damages. The Company believes that if the legal proceedings in which it is currently involved were determined against the Company, there would be no material adverse effect on the Company’s operations or its consolidated financial condition. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated operations or financial position of the Company.

XML

Credit Facility - Additional Information (Detail) - USD ($)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Line of Credit Facility [Line Items]
Credit Facility extended date	Nov. 29, 2017
Letter of credit outstanding under credit facility agreement	$ 8,753,000	$ 8,753,000
Cash Accounts, Accounts Receivable and Inventory [Member]
Line of Credit Facility [Line Items]
Secured credit facility	$ 268,914,000
Minimum [Member]
Line of Credit Facility [Line Items]
Percentage of applicable margin of credit facility	0.75%
Maximum [Member]
Line of Credit Facility [Line Items]
Percentage of applicable margin of credit facility	1.75%
Federal Funds Open Rate [Member]
Line of Credit Facility [Line Items]
Revolving credit facility base rate borrowings	0.50%
Libor Plus Rate [Member]
Line of Credit Facility [Line Items]
Revolving credit facility base rate borrowings	1.00%
Libor Plus Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Revolving credit facility Euro-rate borrowings	2.25%
Libor Plus Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Revolving credit facility Euro-rate borrowings	3.25%
Base-Rate Borrowings [Member]
Line of Credit Facility [Line Items]
Credit borrowings outstanding under the agreement	$ 0	$ 0
Weighted average interest rate	4.00%	4.00%
Euro-Rate Borrowings [Member]
Line of Credit Facility [Line Items]
Credit borrowings outstanding under the agreement	$ 0	$ 0
Weighted average interest rate	0.00%	0.00%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Payment of commitment fee	0.25%
Credit facility commitment amount	$ 175,000,000

XML

Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail)	12 Months Ended
	Aug. 31, 2015 USD ($) Segment	Aug. 31, 2014 USD ($)	Aug. 31, 2013 USD ($)
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Number of business segments | Segment	2
Derivatives outstanding	$ 0
Losses on derivative contracts	0	$ 0	$ 2,319,000
Amortization expense	41,554,000	31,804,000	26,877,000
Deferred turnaround costs	28,489,000	39,352,000
Deferred turnaround costs and other assets, net of accumulated amortization	20,888,000	10,616,000
Amortization expense included in costs of goods sold	14,479,000	11,319,000	7,082,000
Consumer excise tax included in net sales and costs of goods sold	$ 246,636,000	238,332,000	225,125,000
Pipelines [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Deferred Integrity and Replacement Costs period	11 years
Net deferred integrity and replacement costs	$ 58,634,000	64,916,000
Amortization expense	$ 6,282,000	$ 524,000	$ 0
One Vendor [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Percentage of cost of good sold purchased from vendor	15.00%	14.00%
One Vendor [Member] | Accounts Payable [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Concentration of risks amount	$ 0	$ 0
Minimum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Deferred Integrity and Replacement Costs period	2 years
Estimated useful lives of identifiable intangible assets	5 years
Maximum [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Deferred Integrity and Replacement Costs period	10 years
Estimated useful lives of identifiable intangible assets	25 years
Maximum [Member] | Hospitalization and Medical Coverage for Employee and Spouse [Member]
Description Of Business And Summary Of Significant Accounting Policies [Line Items]
Maximum age of limitation to utilize post-retirement healthcare and pension benefits	65 years

XML

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Aug. 31, 2015

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

UNITED REFINING COMPANY AND SUBSIDIARIES

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Description	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions			Balance at End Of Period
Year ended August 31, 2013:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible Accounts	$	1,800	$	1,680	$	(1,680	)	$	1,800
Year ended August 31, 2014:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible Accounts	$	1,800	$	1,050	$	(1,780	)	$	1,070
Year ended August 31, 2015:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible Accounts	$	1,070	$	750	$	(970	)	$	850

XML

Description of Business and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Aug. 31, 2015

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

The consolidated financial statements include the accounts of United Refining Company and its subsidiaries, United Refining Company of Pennsylvania and its subsidiaries, United Biofuels, Inc. and Kiantone Pipeline Corporation (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

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

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

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

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investment securities with maturities of three months or less at date of acquisition to be cash equivalents.

Derivative Instruments

Derivative Instruments

From time to time the Company uses derivatives to reduce its exposure to fluctuations in crude oil purchase costs and refining margins. Derivative products, historically crude oil option contracts (puts) and crackspread option contracts have been used to hedge the volatility of these items. The Company does not enter such contracts for speculative purposes. The Company accounts for changes in the fair value of its contracts by marking them to market and recognizing any resulting gains or losses in its Statement of Operations. The Company includes the carrying amounts of the contracts in derivative liability in its Consolidated Balance Sheet.

At August 31, 2015, the Company had no derivative instruments outstanding as part of its risk management strategy.

For the fiscal years ended August 31, 2015, 2014 and 2013 the Company recognized $0, $0 and $2,319,000 of losses in costs and expenses in its Consolidated Statements of Operations.

Inventories and Exchanges

Inventories and Exchanges

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

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment is stated at cost and depreciated by the straight-line method over the respective estimated useful lives. Routine current maintenance, repairs and replacement costs are charged against income. Expenditures which materially increase values, expand capacities or extend useful lives are capitalized. A summary of the principal useful lives used in computing depreciation expense is as follows:

	Estimated Useful Lives (Years)
Refining		20-30
Marketing		15-30
Transportation		20-30

Leases

Leases

The Company leases land, buildings, and equipment under long-term operating and capital leases and accounts for the leases in accordance with ASC 360-10-30-8. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term. The lease term begins on the date the Company has the right to control the use of the leased property pursuant to the terms of the lease.

Deferred Integrity and Replacement Costs

Deferred Integrity and Replacement Costs

The Company and Kiantone Pipeline Corporation, a subsidiary of the Company, and Enbridge Energy Limited Partnership (“EELP”) and Enbridge Pipelines, Inc. (“EPI” and, together with EELP, the “Carriers”), entered into a letter agreement dated July 31, 2014, as amended, (the “Letter Agreement”) with respect to a pipeline (“Line 10”) owned by the Carriers, which transports crude oil from Canada to the Company’s Kiantone Pipeline. Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10, and agreed to pay for half the cost of replacing certain portions of Line 10.

The integrity and replacement costs, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which is approximately 11 years. As of August 31, 2015 and 2014, net deferred integrity and replacement costs amounted to $58,634,000 and $64,916,000, respectively. Amortization expense of $6,282,000, $524,000 and $0 is included in depreciation and amortization for the fiscal years ended August 31, 2015, 2014 and 2013, respectively.

Deferred Maintenance Turnarounds

Deferred Maintenance Turnarounds

The cost of maintenance turnarounds, which consist of complete shutdown and inspection of significant units of the refinery at intervals of two or more years for necessary repairs and replacements, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which ranges from 2 to 10 years. As of August 31, 2015 and 2014, deferred turnaround costs included in Deferred Turnaround Costs and Other Assets, amounted to $28,489,000 and $39,352,000, which are net of accumulated amortization of $20,888,000 and $10,616,000, respectively. Amortization expense included in Costs of Goods Sold for the fiscal years ended August 31, 2015, 2014 and 2013 amounted to $14,479,000, $11,319,000 and $7,082,000, respectively.

Amortizable Intangible Assets

Amortizable Intangible Assets

The Company amortizes identifiable intangible assets such as brand names, non-compete agreements, leasehold covenants and deed restrictions on a straight line basis over their estimated useful lives which range from 5 to 25 years.

Revenue Recognition

Revenue Recognition

Revenues for products sold by the wholesale segment are recorded upon delivery of the products to our customers, at which time title to those products is transferred and when payment has either been received or collection is reasonably assured. At no point do we recognize revenue from the sale of products prior to the transfer of its title. Title to product is transferred to the customer at the shipping point, under pre-determined contracts for sale at agreed upon or posted prices to customers of which collectability is reasonably assured. Revenues for products sold by the retail segment are recognized immediately upon sale to the customer. Included in Net Sales and Costs of Goods Sold are consumer excise taxes of $246,636,000, $238,332,000 and $225,125,000 for the years ended August 31, 2015, 2014 and 2013, respectively.

Cost Classifications

Cost Classifications

Our Costs of Goods Sold (which excludes depreciation and amortization on property, plant and equipment and losses on derivative contracts) include Refining Cost of Products Sold and related Refining Operating expenses.

Refining Cost of Products Sold includes cost of crude oil, other feedstocks, blendstocks, the cost of purchased finished products, amortization of turnaround costs, transportation costs and distribution costs. Retail Cost of Products Sold include cost for motor fuels and for merchandise. Motor fuel cost of products sold represents net cost for purchased fuel. Merchandise cost of products sold includes merchandise purchases, net of merchandise rebates and inventory shrinkage. Wholesale cost of products sold includes the cost of fuel and lubricants, transportation and distribution costs and labor.

Income Taxes

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company’s results of operations are included in the consolidated Federal income tax return of the Parent and separately in various state jurisdictions. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. With few exceptions, the Company is no longer subject to income tax examinations by U.S. federal, state or local tax authorities for years before fiscal 2012. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of interest expense, net and other, net, respectively. No amounts of such expenses are currently accrued.

Post-Retirement Healthcare and Pension Benefits

Post-Retirement Healthcare and Pension Benefits

The Company provides post-retirement healthcare benefits to salaried and certain hourly employees that retired prior to September 1, 2010. The benefits provided are hospitalization and medical coverage for the employee and spouse until age 65. Benefits continue until the death of the retiree, which results in the termination of benefits for all dependent coverage. If an employee leaves the Company as a terminated vested member of a pension plan prior to normal retirement age, the person is not entitled to any post-retirement healthcare benefits. Benefits payable under this program are secondary to any benefits provided by Medicare or any other governmental programs.

In June 2010, the Company announced changes to the healthcare and pension plans provided to salaried employees. Effective September 1, 2010, postretirement medical benefits for new hires and active salaried employees retiring after September 1, 2010 were eliminated. Additionally, effective January 1, 2011, deductibles and co-payments were added to the medical benefits plan for all active and retired employees. For salaried employees meeting certain age and service requirements, the Company contributes a defined dollar amount towards the cost of retiree healthcare based upon the employee’s length of service. Similarly, effective August 31, 2010, benefits under the Company’s defined benefit pension plan were frozen for all salaried employees, including the Company’s Chief Executive Officer and Chief Financial Officer. The Company will provide an enhanced contribution under its defined contribution 401(k) plan as well as a transition contribution for older employees. The changes made for the salary group described above were also incorporated into the collective bargaining agreement reached with the International Union of Operating Engineers, Local No.95 effective February 1, 2012.

The Company accrues post-retirement benefits other than pensions, during the years that the employee renders the necessary service, of the expected cost of providing those benefits to an employee and the employee’s beneficiaries and covered dependents.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts based on specifically identified amounts that we believe to be uncollectible. The Company also recorded additional allowances based on historical collection experience and its assessment of the general financial conditions affecting the customer base. Senior management reviews accounts receivable on a weekly basis to determine if any receivables will potentially be uncollectible. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Concentration Risks

Concentration Risks

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments.

The Company places its temporary cash investments with quality financial institutions. At times, such investments were in excess of FDIC insurance limits. The Company has not experienced any losses in such accounts.

The Company purchased approximately 15% and 14% of its cost of goods sold from one vendor during the fiscal years ended August 31, 2015 and 2014, respectively. The Company is not obligated to purchase from this vendor, and, if necessary, there are other vendors from which the Company can purchase crude oil and other petroleum based products. The Company had $0 and $0 in accounts payable for the years ended August 31, 2015 and 2014 to this vendor.

Environmental Matters

Environmental Matters

The Company expenses environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures, which extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. The Company determines its liability on a site by site basis and records a liability at the time when it is probable and can be reasonably estimated. The Company’s estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. The estimated liability of the Company is not reduced for possible recoveries from insurance carriers and is recorded in accrued liabilities.

Goodwill and Other Non-Amortizable Assets

Goodwill and Other Non-Amortizable Assets

In accordance with ASC 350, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with ASC 350. Other definite lived intangible assets continue to be amortized over their estimated useful lives.

The Company performed separate impairment tests for its goodwill and tradename using the discounted cash flow method. The fair value of the Company’s reporting units exceeded their carrying values. The fair value of the tradename exceeded its carrying value. The Company has noted no subsequent indication that would require testing its goodwill and tradename for impairment.

Long-Lived Assets

Long-Lived Assets

Whenever events or changes in circumstances indicate that the carrying value of any of these assets (other than goodwill and tradename) may not be recoverable, the Company will assess the recoverability of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written down to fair value.

Other Comprehensive (Loss) Income

Other Comprehensive (Loss) Income

The Company reports comprehensive (loss) income in accordance with ASC 220-10. ASC 220-10 establishes guidelines for the reporting and display of comprehensive (loss) income and its components in financial statements. Comprehensive (loss) income includes charges and credits to equity that is not the result of transactions with the shareholder. Included in other comprehensive loss for the Company is a charge for unrecognized post-retirement costs, which is net of taxes in accordance with ASC 715. The accumulated other comprehensive loss balance is made up entirely of unrecognized post-retirement costs.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, ASU No. 2014-09 supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. Under ASU No. 2014-09, an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 is effective for interim and annual periods beginning after December 15, 2017, with early application permitted only as of annual reporting periods beginning after December 31, 2016. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption. The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2014-09.

Reclassification

Reclassification

Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform with the presentation in the current year.

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Cash flows from operating activities:
Net income	$ 82,051	$ 71,113	$ 168,683
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and asset impairments	44,027	34,147	29,279
Non cash portion of loss on early extinguishment of debt			5,313
Deferred income taxes	19,580	18,776	2,621
Loss on asset dispositions	928	1,205	1,119
Cash provided by (used in) working capital items	4,180	(8,700)	(40,311)
Change in operating assets and liabilities:
Other assets, net	480	736	538
Deferred retirement benefits	(7,596)	(6,044)	(2,871)
Total adjustments	61,599	40,120	(4,312)
Net cash provided by operating activities	143,650	111,233	164,371
Cash flows from investing activities:
Additions to property, plant and equipment	(50,249)	(49,264)	(41,597)
Additions to amortizable intangible assets	(100)
Additions to deferred turnaround costs	(3,616)	(42,195)	(1,241)
Additions to deferred integrity and replacement costs	(28,630)	(36,810)
Proceeds from asset dispositions	10	58	81
Net cash used in investing activities	(82,585)	(128,211)	(42,757)
Cash flows from financing activities:
Distribution from (to) Parent under the Tax Sharing Agreement	36	(3,034)	1,996
Proceeds from sale of preferred stock			141,164
Dividends to preferred shareholder and stockholder	(41,082)	(38,951)	(114,338)
Proceeds from issuance of long-term debt		1,426
Principal reductions of long-term debt	(1,708)	(1,963)	(129,439)
Deferred financing costs	(320)
Net cash used in financing activities	(43,074)	(42,522)	(100,617)
Net increase (decrease) in cash and cash equivalents	17,991	(59,500)	20,997
Cash and cash equivalents, beginning of year	99,037	158,537	137,540
Cash and cash equivalents, end of period	117,028	99,037	158,537
Cash provided by (used in) working capital items:
Accounts receivable, net	10,824	32,805	(4,597)
Refundable income taxes	6,000	14,890	(20,890)
Inventories	(54,594)	(20,506)	25,254
Prepaid income taxes	13,674	(13,674)
Prepaid expenses and other assets	39,168	(25,075)	(22,280)
Amounts due from/to affiliated companies, net	(1,914)	1,087	523
Accounts payable	(18,418)	9,081	11,967
Derivative liability			(9,098)
Accrued liabilities	(780)	(24)	1,799
Income taxes payable	7,397	(8,587)	(20,344)
Sales, use and fuel taxes payable	2,823	1,303	(2,645)
Total Change	4,180	(8,700)	(40,311)
Cash paid during the period for:
Interest	25,543	25,561	38,806
Income taxes	17,871	49,366	135,412
Non-cash investing and financing activities:
Deferred integrity and replacement costs		28,630
Property additions and capital leases	$ 1,605	$ 241	$ 15,037

XML

Description of Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Aug. 31, 2015

Accounting Policies [Abstract]

Summary of Principal Useful Lives Used in Computing Depreciation Expense

A summary of the principal useful lives used in computing depreciation expense is as follows:

	Estimated Useful Lives (Years)
Refining		20-30
Marketing		15-30
Transportation		20-30

XML

Segments of Business - Summarized Financial Information of Company's Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Aug. 31, 2015	May. 31, 2015	Feb. 28, 2015	Nov. 30, 2014	Aug. 31, 2014	May. 31, 2014	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Net Sales
Sales, Net	$ 708,241	$ 602,877	$ 580,904	$ 824,697	$ 989,515	$ 784,269	$ 773,719	$ 891,715	$ 2,716,719	$ 3,439,218	$ 3,681,253
Operating Income
Operating income	46,660	$ 64,454	$ 10,792	$ 36,139	24,125	$ 12,801	$ 101,837	$ 5,414	158,045	144,177	328,608
Depreciation, Amortization and Asset Impairments
Depreciation, Amortization and Asset Impairments									41,554	31,804	26,877
Capital Expenditures (including non-cash portion)
Capital Expenditures									51,854	49,505	56,634
Total Assets
Assets, Total	885,466				870,464				885,466	870,464
Operating Segments [Member] | Retail [Member]
Net Sales
Sales, Net									1,347,291	1,688,467	1,721,625
Operating Income
Operating income									32,362	14,502	7,520
Depreciation, Amortization and Asset Impairments
Depreciation, Amortization and Asset Impairments									7,288	6,566	6,153
Capital Expenditures (including non-cash portion)
Capital Expenditures									13,635	11,271	17,065
Total Assets
Assets, Total	178,200				186,277				178,200	186,277
Operating Segments [Member] | Wholesale [Member]
Net Sales
Sales, Net									1,369,428	1,750,751	1,959,628
Operating Income
Operating income									125,683	129,675	321,088
Depreciation, Amortization and Asset Impairments
Depreciation, Amortization and Asset Impairments									34,266	25,238	20,724
Capital Expenditures (including non-cash portion)
Capital Expenditures									38,219	38,234	39,569
Total Assets
Assets, Total	$ 707,266				$ 684,187				707,266	684,187
Intersegment Eliminations [Member] | Wholesale [Member]
Intersegment Sales
Intersegment Sales									$ 566,853	$ 875,264	$ 904,526

XML

Income Taxes (Tables)

12 Months Ended

Aug. 31, 2015

Income Tax Disclosure [Abstract]

Summary of Income Tax Expense

Income tax expense consists of:

	Year Ended August 31,
	2015		2014		2013
	(in thousands)
Federal:
Current	$	25,298	$	20,431	$	78,569
Deferred		16,671		14,453		4,154
		41,969		34,884		82,723
State:
Current		599		4,619		17,154
Deferred		2,909		4,323		(1,533	)
		3,508		8,942		15,621
	$	45,477	$	43,826	$	98,344

Reconciliation of Income Tax Expense

Reconciliation of the differences between income taxes computed at the Federal statutory rate and the provision for income taxes attributable to income before income tax expense is as follows:

	Year Ended August 31,
	2015			2014			2013
	(in thousands)
U. S. federal income taxes at the statutory rate	$	44,649		$	40,243		$	93,465
State income taxes, net of Federal benefit		2,245			5,758			10,113
Domestic production activity deduction		(1,225	)		(2,068	)		(5,391	)
Permanent items		538			405			863
Employment credits		(703	)		(845	)		(722	)
Other		(27	)		333			16
Income tax expense	$	45,477		$	43,826		$	98,344

Summary of Deferred Income Tax Liabilities (Assets)

Deferred income tax liabilities (assets) are comprised of the following:

	August 31,
	2015			2014
	(in thousands)
Current deferred income tax liabilities (assets):
Inventory valuation	$	6,911		$	5,901
Accounts receivable allowance		(348	)		(442	)
Accrued liabilities		(3,312	)		(3,863	)
Other		2,571			1,214
		5,822			2,810
Deferred income tax liabilities (assets):
Property, plant and equipment		87,765			71,540
Accrued liabilities		(28,740	)		(26,924	)
State net operating loss carryforwards		(7,695	)		(7,927	)
Valuation allowance		2,577			2,837
Other		2,014			4,614
		55,921			44,140
Net deferred income tax liability	$	61,743		$	46,950

XML

Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Payables and Accruals [Abstract]
Interest	$ 119	$ 104
Payrolls and benefits	15,974	16,972
Other	1,818	1,615
Accrued liabilities	$ 17,911	$ 18,691

XML

Employee Benefit Plans - Weighted Average Target and Strategic Assets Allocation of Pension Plans (Detail)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Strategic asset allocation	100.00%	100.00%
Equity Securities [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Weighted average target allocation, minimum	50.00%
Weighted average target allocation, maximum	75.00%
Strategic asset allocation	67.00%	51.00%
Debt Securities [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Weighted average target allocation, minimum	20.00%
Weighted average target allocation, maximum	50.00%
Strategic asset allocation	25.00%	49.00%
Alternative Investments [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Weighted average target allocation, minimum	0.00%
Weighted average target allocation, maximum	15.00%
Strategic asset allocation	7.00%	0.00%
Cash/Cash Equivalents [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Weighted average target allocation, minimum	0.00%
Weighted average target allocation, maximum	10.00%
Strategic asset allocation	1.00%	0.00%

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2012
Current:
Cash and cash equivalents	$ 117,028	$ 99,037	$ 158,537	$ 137,540
Accounts receivable, net	81,567	92,391
Refundable income taxes		6,000
Inventories, net	206,066	151,472
Prepaid income taxes		13,674
Prepaid expenses and other assets	28,000	67,168
Amounts due from affiliated companies, net	393
Total current assets	433,054	429,742
Property, plant and equipment, net	347,757	317,519
Deferred financing costs, net	2,667	3,575
Goodwill	1,349	1,349
Trade name	10,500	10,500
Amortizable intangible assets, net	869	951
Deferred integrity and replacement costs, net	58,634	64,916
Deferred turnaround costs and other assets, net	30,636	41,912
Total assets	885,466	870,464
Current:
Current installments of long-term debt	1,556	1,551
Accounts payable	44,833	91,881
Accrued liabilities	17,911	$ 18,691
Income tax payable	7,397
Sales, use and fuel taxes payable	23,373	$ 20,550
Deferred income taxes	5,822	2,810
Amounts due to affiliated companies, net		1,521
Total current liabilities	100,892	137,004
Long term debt: less current installments	239,111	237,974
Deferred income taxes	55,921	44,140
Deferred retirement benefits	71,800	67,121
Total liabilities	$ 467,724	$ 486,239
Commitments and Contingencies
Stockholder's equity:
Common stock; $.10 par value per share-shares authorized 100; issued and outstanding 100	$ 0	$ 0
Additional paid-in capital	156,846	156,810
Retained earnings	263,464	222,495
Accumulated other comprehensive loss	(16,684)	(9,196)
Total stockholder's equity	417,742	384,225
Total liabilities and stockholder's equity	885,466	870,464
Series A Preferred Stock [Member]
Stockholder's equity:
Series A Preferred stock; $1,000 par value per share-shares authorized 25,000; issued and outstanding 14,116	$ 14,116	$ 14,116

XML

Description of Business and Summary of Significant Accounting Policies - Summary of Principal Useful Lives Used in Computing Depreciation Expense (Detail)	12 Months Ended
	Aug. 31, 2015
Minimum [Member] | Refining [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	20 years
Minimum [Member] | Marketing [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	15 years
Minimum [Member] | Transportation [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	20 years
Maximum [Member] | Refining [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	30 years
Maximum [Member] | Marketing [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	30 years
Maximum [Member] | Transportation [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives (Years)	30 years

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Statement of Comprehensive Income [Abstract]
Unrecognized post retirement loss, taxes	$ (4,787)	$ (1,384)	$ 8,003

XML

Long-Term Debt - Summary of Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Debt Disclosure [Abstract]
Unamortized discount	$ 3,791	$ 5,036

XML

Goodwill and Intangible Assets (Tables)

12 Months Ended

Aug. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

As of August 31, 2015 and 2014, the Company’s trade name, goodwill and amortizable intangible assets, included in the Company’s retail segment, were as follows:

	Weighted Average  Remaining Life		August 31, 2015				August 31, 2014
			Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in thousands)
Amortizable intangible assets:
Deed restrictions		11 yrs.	$	800	$	437	$	800	$	405
Leasehold covenants		7 yrs.		1,590		1,084		1,490		934
			$	2,390	$	1,521	$	2,290	$	1,339
Non-amortizable assets:
Tradename			$	10,500	$	—	$	10,500	$	—
Goodwill			$	1,349	$	—	$	1,349	$	—

XML

Employee Benefit Plans - Additional Information (Detail) - USD ($)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Compensation and Retirement Disclosure [Abstract]
Aggregate Accumulated benefit obligation	$ 124,490,000	$ 119,209,000
Aggregate asset value	$ 88,614,000	$ 93,245,000
Assumed annual rate of increase in the per capita cost of covered medical and dental benefits	7.00%	7.00%
Assumed annual rate decrease gradually for medical benefits until 2025	5.00%
Decrease in net periodic benefit cost	$ 4,185,000
Company's contribution to the voluntary employee savings plans	$ 2,767,000	$ 2,752,000	$ 2,604,000

XML

Transactions with Affiliated Companies

12 Months Ended

Aug. 31, 2015

Related Party Transactions [Abstract]

Transactions with Affiliated Companies

14. Transactions with Affiliated Companies

On December 21, 2001, the Company acquired the operations and working capital assets of Country Fair. The fixed assets of Country Fair were acquired by related entities controlled by John A. Catsimatidis, the indirect sole shareholder of the Company. These assets are being leased to the Company at an annual aggregate rental fee which management, based on an independent third party valuation believes is fair, over a period ranging from 10 to 20 years. During the fiscal years ended August 31, 2015, 2014 and 2013, $5,360,000, $5,360,000 and $5,319,000 of rent payments were made to these related entities. The Company is not a guarantor on the underlying mortgages on the properties.

Concurrent with the above acquisition of Country Fair, the Company entered into a management agreement with a non-subsidiary affiliate to operate and manage 10 of the retail units owned by the non-subsidiary affiliate on a turn-key basis. For the years ended August 31, 2015, 2014 and 2013, the Company billed the affiliate $1,301,000, $1,207,000 and $1,229,000 for management fees and overhead expenses incurred in the management and operation of the retail units which amount was deducted from expenses. As of August 31, 2015 and 2014, the Company had a payable to the affiliate of $296,000 and $151,000, respectively, under the terms of the agreement, which is included in Amounts Due To/From Affiliated Companies, Net.

On September 29, 2000, the Company sold 42 retail units to an affiliate for $23,870,000. Concurrent with this asset sale, the Company terminated the leases on 8 additional retail locations which it had previously leased from a non-subsidiary affiliate. The Company has entered into a management agreement with the non-subsidiary affiliate to operate and manage the retail units owned by the non-subsidiary affiliate on a turnkey basis. For the years ended August 31, 2015, 2014 and 2013, the Company billed the affiliate $2,325,000, $2,165,000 and $2,219,000, respectively, for management fees and overhead expenses incurred in the management and operation of the 51 retail units, which amount was deducted from expenses. For the fiscal years ended August 31, 2015, 2014 and 2013, net sales to the affiliate amounted to $131,326,000, $191,828,000 and $207,104,000, respectively. As of August 31, 2015 and 2014, the Company had a payable to the affiliate of $1,106,000 and $1,355,000, respectively, under the terms of the agreement, which is included in Amounts Due To/From Affiliated Companies, net.

The Company paid a service fee relating to certain costs incurred by its Parent for the Company’s New York office. During the years ended August 31, 2015, 2014 and 2013, such fees amounted to approximately $2,000,000, $2,000,000, and $2,000,000, respectively, which is included in Selling, General and Administrative Expenses.

The Company joins with the Parent and the Parent’s other subsidiaries in filing a Federal income tax return on a consolidated basis. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. Amounts related to the Tax Sharing Agreement for the utilization by the Company of certain tax attributes of the Parent and other subsidiaries related to the tax years ended August 31, 2015, 2014 and 2013 amounted to $36,000, $(3,034,000) and $1,996,000, respectively and have been recorded as a capital contribution (distribution). As of August 31, 2015 and 2014, the Company had a receivable from the Parent of $2,500,000 and $0, respectively, under the terms of the Tax Sharing Agreement.

During the years ended August 31, 2015, 2014 and 2013, the Company incurred $420,000, $420,000 and $420,000, respectively, as its share of occupancy expenses for its offices in New York that it shares with affiliates of the Company. Such offices are located in a building owned by John A. Catsimatidis.

On July 26, 2013, the Company issued and sold to URI, its sole stockholder and parent, 14,116.375 shares of the Series A Preferred Stock for an aggregate purchase price of $141,163,750 in accordance with the terms and provisions of a Subscription Agreement by and between the Company and URI. The Subscription Agreement contained customary representations and warranties concerning the acquisition of the Series A Preferred Stock by URI and restrictions on the transfer of the Series A Preferred Stock. See Note 13, Stockholders’ Equity, for a description of the terms of the Series A Preferred Stock.

During the years ended August 31, 2015, 2014 and 2013 the Company made $200,000, $200,000 and $152,000, respectively, of rent payments to a related entity for the lease of a convenience store.

During the years ended August 31, 2015, 2014 and 2013, the Company paid $4,774,000, $4,399,000 and $0, respectively, to a related captive insurance company (“Captive”). The Captive was established in fiscal 2014 and will provide the Company with “stop-loss” protection in the area of worker’s compensation, general liability and automobile liability.

During the year ended August 31, 2015, the Company made payments to an insurance company for two of its affiliates totaling $283,000, which is included as a receivable in Amounts Due From Affiliated Companies, net.

During the year ended August 31, 2015, the Parent made payments to an insurance company on behalf of the Company totaling $900,000, which is included as a payable in Amounts Due From Affiliated Companies, net.

The Company receives engineering services from a subsidiary of our Parent company to assist with the construction of its biodiesel facility in Brooklyn, New York. During the fiscal years ended August 31, 2015 and 2014 the Company paid $349,000 and $475,000 to this entity for such services. At August 31, 2015, the Company had a payable to the Parent subsidiary of $88,000.

XML

Accrued Liabilities (Tables)

12 Months Ended

Aug. 31, 2015

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities include the following:

	August 31,
	2015		2014
	(in thousands)
Interest	$	119	$	104
Payrolls and benefits		15,974		16,972
Other		1,818		1,615
	$	17,911	$	18,691

XML

Segments of Business

12 Months Ended

Aug. 31, 2015

Segment Reporting [Abstract]

Segments of Business

16. Segments of Business

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

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

The accounting policies of the reportable segments are the same as those described in Footnote 1 to Consolidated Financial Statements. Intersegment revenues are calculated using market prices and are eliminated upon consolidation. Summarized financial information regarding the Company’s reportable segments is presented in the following table.

	Year Ended August 31,
	2015		2014		2013
	(in thousands)
Net Sales
Retail	$	1,347,291	$	1,688,467	$	1,721,625
Wholesale		1,369,428		1,750,751		1,959,628
	$	2,716,719	$	3,439,218	$	3,681,253
Intersegment Sales
Wholesale	$	566,853	$	875,264	$	904,526
Operating Income
Retail	$	32,362	$	14,502	$	7,520
Wholesale		125,683		129,675		321,088
	$	158,045	$	144,177	$	328,608
Depreciation, Amortization and Asset Impairments
Retail	$	7,288	$	6,566	$	6,153
Wholesale		34,266		25,238		20,724
	$	41,554	$	31,804	$	26,877
Capital Expenditures (including non-cash portion)
Retail	$	13,635	$	11,271	$	17,065
Wholesale		38,219		38,234		39,569
	$	51,854	$	49,505	$	56,634
	August 31,
	2015		2014
Total Assets
Retail	$	178,200	$	186,277
Wholesale		707,266		684,187
	$	885,466	$	870,464

XML

Employee Benefit Plans - Weighted Average Assumptions Used to Determine Net Periodic Costs (Detail)	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Rate of compensation increase	3.00%	3.00%
Pension Benefits [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.00%	4.80%
Expected return on plan assets	5.00%	5.00%
Pension Benefits [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	4.20%	5.00%
Expected return on plan assets	7.00%	7.00%
Other Post-Retirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Discount rate	3.85%	4.60%
Health care cost trend
Initial trend	7.00%	7.00%
Ultimate trend	5.00%	5.00%
Year ultimate reached	2025	2022

XML

Consolidated Statements of Stockholder's Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Preferred Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) Income [Member]
Balance at Aug. 31, 2012	$ 141,276			$ 24,825	$ 135,988	$ (19,537)
Balance, Shares at Aug. 31, 2012		100
Other comprehensive income	12,447					12,447
Issuance of preferred stock	141,164		$ 14,116	127,048
Issuance of preferred stock, shares			14,116
Contribution from (distribution to) Parent under the Tax Sharing Agreement	1,996			1,996
Capital contribution related to purchase of assets	5,975			5,975
Net income	168,683				168,683
Dividends	(114,338)				(114,338)
Balance at Aug. 31, 2013	357,203		$ 14,116	159,844	190,333	(7,090)
Balance, Shares at Aug. 31, 2013		100	14,116
Other comprehensive income	(2,106)					(2,106)
Contribution from (distribution to) Parent under the Tax Sharing Agreement	(3,034)			(3,034)
Net income	71,113				71,113
Dividends	(38,951)				(38,951)
Balance at Aug. 31, 2014	384,225		$ 14,116	156,810	222,495	(9,196)
Balance, Shares at Aug. 31, 2014		100	14,116
Other comprehensive income	(7,488)					(7,488)
Contribution from (distribution to) Parent under the Tax Sharing Agreement	36			36
Net income	82,051				82,051
Dividends	(41,082)				(41,082)
Balance at Aug. 31, 2015	$ 417,742		$ 14,116	$ 156,846	$ 263,464	$ (16,684)
Balance, Shares at Aug. 31, 2015		100	14,116

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Aug. 31, 2015	Aug. 31, 2014	Jul. 26, 2013
Common stock, par value per share	$ 0.10	$ 0.10
Common stock, shares authorized	100	100
Common stock, shares issued	100	100
Common stock, shares outstanding	100	100
Preferred stock, shares authorized			50,000
Series A Preferred Stock [Member]
Preferred stock, par value per share	$ 1,000	$ 1,000	$ 1,000
Preferred stock, shares authorized	25,000	25,000	25,000
Preferred stock, shares issued	14,116	14,116
Preferred stock, shares outstanding	14,116	14,116

XML

Long-Term Debt

12 Months Ended

Aug. 31, 2015

Debt Disclosure [Abstract]

Long-Term Debt

9. Long-Term Debt

On August 30, 2013 the Company redeemed $127,750,000 aggregate principal amount of its outstanding $365,000,000 Senior Secured Notes due 2018. Funding for the redemption was provided by the Company’s sale of $141,163,750 aggregate principal amount of 6.00% Fixed Rate Cumulative Perpetual Preferred Stock Series A to URI, its parent (see Note 14). In accordance with the indenture governing the Senior Secured Notes due 2018, the Company obtained an opinion concerning the fairness from a financial point of view with the issuance of the Preferred Stock to URI.

The Senior Secured Notes due 2018 were redeemed at a redemption price of 110.50% of the principal amount thereof, plus accrued and unpaid interest to August 30, 2013. In connection with the redemption, a loss of $18,727,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $13,413,000, a write-off of deferred financing costs of $1,999,000 and a write-off of unamortized debt discount of $3,315,000.

On March 8, 2011, the Company sold $365,000,000 of Senior Secured Notes due 2018 for $352,020,600, resulting in original issue discount of $12,979,400, which is being amortized over the life of the Senior Secured Notes due 2018 using the interest method. The net proceeds of the offering of $344,249,000 were used to retire all of its outstanding 10 ¹/₂% Senior Notes due 2012, pay accrued interest of $3,400,000 and a redemption premium related thereto. A loss of $1,245,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $915,000, a write-off of unamortized net debt premium of $1,153,000 and a write-off of deferred financing costs of $1,483,000. The Senior Secured Notes due 2018 are guaranteed on an unsecured basis by all of the Company’s domestic subsidiaries existing at March 8, 2011. The Senior Secured Notes due 2018 are secured on a first-priority basis by the Company’s assets comprising its refinery located in Warren, Pennsylvania and the capital stock of its pipeline subsidiary, subject to permitted liens. The Senior Secured Notes due 2018 will rank equally with all of the Company’s existing and future senior indebtedness that is not subordinate in right of payment to the Senior Secured Notes due 2018.

Both the Indenture of the Senior Secured Notes and the facility (See Note 8 to “Consolidated Financial Statements”) require that the Company maintain certain financial covenants. The facility requires the Company to meet certain financial covenants, as defined in the facility, a minimum Fixed Charge Coverage Ratio and a minimum Consolidated Net Worth. In addition, the facility limits the amount the Company can distribute for capital and operating leases. Both the facility and the Indenture of the Senior Secured Notes restrict the amount of dividends payable and the incurrence of additional Indebtedness. As of August 31, 2015 the Company is in compliance with covenants under the facility and the Indenture. Subsequent to August 31, 2015, the Company refinanced the Senior Secured Notes due 2018. See Note 21 to “Consolidated Financial Statements”.

A summary of long-term debt is as follows:

	August 31,
	2015		2014
	(in thousands)
Long-term debt:
10.50% Senior Secured Notes due February 28, 2018, net of unamortized discount of $3,791 and $5,036, respectively	$	233,459	$	232,214
Other long-term debt		7,208		7,311
		240,667		239,525
Less: Current installments of long-term debt		1,556		1,551
Total long-term debt, less current installments	$	239,111	$	237,974

The principal amount of long-term debt matures as follows:

	Year ended August 31,
	(in thousands)
2016	$	1,556
2017		1,071
2018		237,676
2019		345
2020		279
Thereafter		3,531
		244,458
Unamortized discount		3,791
Total	$	240,667

The following financing costs have been deferred and are being amortized to expense over the term of the related debt:

	August 31,
	2015		2014
	(in thousands)
Beginning balance	$	8,881	$	8,881
Current year additions		320		—
Total financing costs		9,201		8,881
Less:
Accumulated amortization		6,534		5,306
	$	2,667	$	3,575

Amortization expense for the fiscal years ended August 31, 2015, 2014 and 2013 amounted to $1,228,000, $1,228,000 and $1,669,000, respectively.

XML

Subsequent Events - Additional Information (Detail) - USD ($)	Nov. 19, 2015	Nov. 12, 2015	Oct. 20, 2015	Oct. 06, 2015	Oct. 19, 2015	Mar. 08, 2011
Scenario, Forecast [Member] | Carriers [Member]
Subsequent Event [Line Items]
Payment on subsequent year pipe replacement costs		$ 60,700,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Value of senior secured notes				$ 1,000.00
Total consideration from tender offer				1,027.50
Senior Secured Notes Due 2018 [Member]
Subsequent Event [Line Items]
Value of senior secured notes						$ 365,000,000
Senior Secured Notes Due 2018 [Member] | Scenario, Forecast [Member]
Subsequent Event [Line Items]
Value of senior secured notes	$ 19,379,000
Senior notes issuance percentage	8.17%
Notes redemption percentage	105.25%
Notes accrued interest	$ 452,177
Senior Secured Notes Due 2018 [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Value of senior secured notes			$ 217,871,000	$ 237,250,000
Interest rate of Senior Secured Notes			10.50%
Tender offer expire date				Nov. 02, 2015
Total consideration from tender offer				$ 1,057.50
Tender offer consent payment				30.00
Senior notes issuance percentage			91.83%
Senior Secured Notes Due 2018 [Member] | Subsequent Event [Member] | Tender Offer [Member]
Subsequent Event [Line Items]
Value of senior secured notes				$ 1,000.00
Senior Secured Revolving Credit Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity under new credit agreement			$ 225,000,000		$ 175,000,000
Revolving Credit Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity under new credit agreement			$ 50,000,000
Revolving credit facility expiration date			Oct. 19, 2020
Line of credit undrawn availability required			$ 15,000,000
Line of credit borrowing capacity maximum percentage			12.50%
Line of credit facility maximum repayment amount			$ 25,000,000
Line of credit minimum amount required to be maintained			$ 100,000,000
Revolving Credit Facility [Member] | Subsequent Event [Member] | Minimum [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			1.25%
Revolving Credit Facility [Member] | Subsequent Event [Member] | Maximum [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			1.75%
Revolving Credit Facility [Member] | Subsequent Event [Member] | Federal Funds Rate [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			0.50%
Revolving Credit Facility [Member] | Subsequent Event [Member] | LIBOR [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			1.00%
Revolving Credit Facility [Member] | Subsequent Event [Member] | LIBOR [Member] | Minimum [Member] | Euro Currency Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			2.25%
Revolving Credit Facility [Member] | Subsequent Event [Member] | LIBOR [Member] | Maximum [Member] | Euro Currency Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			2.75%
Term Loan [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity under new credit agreement			$ 250,000,000
Debt instrument term			10 years
Term Loan [Member] | Subsequent Event [Member] | Minimum [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			1.75%
Term Loan [Member] | Subsequent Event [Member] | Maximum [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			2.25%
Term Loan [Member] | Subsequent Event [Member] | Federal Funds Rate [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			0.50%
Term Loan [Member] | Subsequent Event [Member] | LIBOR [Member] | Domestic Bank Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			1.00%
Term Loan [Member] | Subsequent Event [Member] | LIBOR [Member] | Minimum [Member] | Euro Currency Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			2.75%
Term Loan [Member] | Subsequent Event [Member] | LIBOR [Member] | Maximum [Member] | Euro Currency Rate [Member]
Subsequent Event [Line Items]
Debt instrument additional interest rates			3.25%

XML

Document and Entity Information - USD ($)	12 Months Ended
	Aug. 31, 2015	Nov. 23, 2015
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Aug. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Trading Symbol	UNRF
Entity Registrant Name	UNITED REFINING CO
Entity Central Index Key	0000101462
Current Fiscal Year End Date	--08-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		100
Entity Public Float		$ 0

XML

Employee Benefit Plans

12 Months Ended

Aug. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

10. Employee Benefit Plans

The Company sponsors three defined benefit plans and seven defined contribution plans covering substantially all its full time employees. The benefits under the defined benefit plans are based on each employee’s years of service and compensation. Effective February 1, 2012 benefits under the Company’s defined benefit pension plan for hourly employees were frozen. Additionally, effective August 31, 2010 benefits under the Company’s defined benefit pension plan were frozen for all salaried employees, including the Company’s Chief Executive Officer and Chief Financial Officer. The Company will provide enhanced contributions under its defined contribution 401(k) plan as well as a transition contribution for older employees. The Company’s policy is to contribute the minimum amounts required by the Employee Retirement Income Security Act of 1974 (ERISA), as amended and any additional amounts for strategic financial purposes or to meet other goals relating to plan funded status. The assets of the plans are invested in an investment trust fund and consist of interest-bearing cash, separately managed accounts and bank common/collective trust funds.

In addition to the above, the Company provides certain post-retirement healthcare benefits to salaried and certain hourly employees that retired prior to September 1, 2010. These post-retirement benefit plans are unfunded and the costs are paid by the Company from general assets.

Net periodic pension cost and post-retirement healthcare benefit cost consist of the following components for the years ended August 31, 2015, 2014 and 2013:

	Pension Benefits									Other Post-Retirement Benefits
	2015			2014			2013			2015			2014			2013
	(in thousands)
Service cost	$	626		$	597		$	652		$	608		$	774		$	940
Interest cost on benefit obligation		4,850			5,204			4,511			1,656			2,072			1,884
Expected return on plan assets		(6,351	)		(5,569	)		(5,160	)		—			—			—
Amortization and deferrals		724			697			1,210			(3,152	)		(1,860	)		123
Net periodic benefit (income) cost	$	(151	)	$	929		$	1,213		$	(888	)	$	986		$	2,947

The Company adopted ASC 715-30-25 effective August 31, 2007. ASC 715-30-25 requires an employer to recognize the funded status of each of its defined pension and postretirement benefit plans as a net asset or liability in its statement of financial position with an offsetting amount in accumulated other comprehensive income, and to recognize changes in that funded status in the year in which changes occur through comprehensive income.

Other changes in plan assets and benefit obligation recognized in Other Comprehensive Income consist of the following for the fiscal years ended August 31, 2015 and 2014 (in thousands):

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
Current year actuarial (gain) / loss	$	15,160		$	4,702		$	(5,313	)	$	162
Amortization of actuarial gain / (loss)		(724	)		(697	)		(4,199	)		(5,073	)
Current year prior service (credit) / cost		—			—			—			(2,537	)
Amortization of prior service credit / (cost)		—			—			7,351			6,933
Total recognized in other comprehensive (income) / loss	$	14,436		$	4,005		$	(2,161	)	$	(515	)
Total recognized in net periodic benefit cost and other comprehensive (income)/loss	$	14,285		$	4,934		$	(3,049	)	$	471

The following table summarizes the change in benefit obligations and fair values of plan assets for the years ended August 31, 2015 and 2014:

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
	(in thousands)
Change in benefit obligation:
Benefit obligation @ beginning of year	$	119,209		$	107,141		$	43,713		$	45,700
Service cost		626			597			608			774
Interest cost		4,850			5,204			1,656			2,073
Plan amendments		—			—			—			(2,538	)
Curtailment		—			(69	)		—			—
Medicare part D subsidy on benefits paid		—			—			148			—
Actuarial (gains) / losses		5,299			10,816			(5,313	)		162
Benefits paid		(5,494	)		(4,480	)		(2,599	)		(2,458	)
Projected benefit obligation @ end of year		124,490			119,209			38,213			43,713
Change in plan assets:
Fair values of plan assets @ beginning of year		93,245			80,224			—			—
Actual return on plan assets		(3,509	)		11,613			—			—
Company contributions		4,372			5,888			2,599			2,458
Benefits paid		(5,494	)		(4,480	)		(2,599	)		(2,458	)
Fair values of plan assets @ end of year		88,614			93,245			—			—
Unfunded status	$	35,876		$	25,964		$	38,213		$	43,713
Amounts recognized in the balance sheet consist of:
Current liability	$	—		$	—		$	2,520		$	2,839
Noncurrent liability		35,876			25,964			35,693			40,874
Net amount recognized	$	35,876		$	25,964		$	38,213		$	43,713
Note: For plans with assets less than the accumulated benefit obligation (ABO), the aggregate ABO is $124,490,000 and $119,209,000, while the aggregate asset value is $88,614,000 and $93,245,000 for the years ended August 31, 2015 and 2014, respectively.

Amounts recognized in Accumulated Other Comprehensive Income:

	Pension Benefits						Other Post-Retirement Benefits
	2015			2014			2015			2014
	(in thousands)
Accumulated net actuarial loss	$	(43,848	)	$	(29,411	)	$	(19,953	)	$	(29,465	)
Accumulated prior service cost		—			—			35,371			42,722
Net amount recognized, before tax effect	$	(43,848	)	$	(29,411	)	$	15,418		$	13,257

The preceding table presents two measures of benefit obligations for the pension plans. Accumulated benefit obligation (ABO) generally measures the value of benefits earned to date. Projected benefit obligation (PBO) also includes the effect of assumed future compensation increases for plans in which benefits for prior service are affected by compensation changes. Each of the three pension plans, whose information is aggregated above, have asset values less than these measures. Plan funding amounts are calculated pursuant to ERISA and Internal Revenue Code rules. The postretirement benefits are not funded.

Weighted average assumptions used to determine year end benefit obligations:

	Pension Benefits				Other Post-Retirement Benefits
	2015		2014		2015		2014
Discount rate		4.40% - 4.50%		4.00% - 4.20%		4.15%		3.85%
Rate of compensation increase		3.00%		3.00%		N/A		N/A
Health care cost trend
Initial trend		N/A		N/A		7.00%		7.00%
Ultimate trend		N/A		N/A		5.00%		5.00%
Year ultimate reached		N/A		N/A		2025		2025

The discount rate assumptions at August 31, 2015 and 2014 were determined independently for each plan. A yield curve was produced for a universe containing the majority of U.S.-issued Aa-graded corporate bonds, all of which were non-callable (or callable with make-whole provisions). For each plan, the discount rate was developed as the level equivalent rate that would produce the same present value as that using spot rates aligned with the projected benefit payments.

Weighted average assumptions used to determine net periodic costs:

	Pension Benefits				Other Post-Retirement Benefits
	2015		2014		2015		2014
Discount rate		4.00% - 4.20%		4.80% - 5.00%		3.85%		4.60%
Expected return on plan assets		5.00% - 7.00%		5.00% - 7.00%		N/A		N/A
Rate of compensation increase		3.00%		3.00%		N/A		N/A
Health care cost trend
Initial trend		N/A		N/A		7.00%		7.00%
Ultimate trend		N/A		N/A		5.00%		5.00%
Year ultimate reached		N/A		N/A		2025		2022

For measurement purposes, the assumed annual rate of increase in the per capita cost of covered medical and dental benefits was 7.00% and 7.00% for 2015 and 2014, respectively. The rates were assumed to decrease gradually to 5% for medical benefits until 2025 and remain at that level thereafter. The healthcare cost trend rate assumption has a significant effect on the amounts reported. To illustrate, a 1 percentage point change in the assumed healthcare cost trend rate would have the following effects:

	1% Point Increase		1% Point Decrease
	(in thousands)
Effect on total of service and interest cost components	$	51	$	(49	)
Effect on post-retirement benefit obligation	$	1,419	$	(1,332	)

The expected return on plan assets is a long-term assumption established by considering historical and anticipated returns of the asset classes invested in by the pension plans and the allocation strategy currently in place among those classes.

A reconciliation of the above accrued benefit costs to the consolidated amounts reported on the Company’s Consolidated Balance Sheets follows:

	August 31,
	2015			2014
	(in thousands)
Accrued pension benefits	$	35,876		$	25,964
Accrued other post-retirement benefits		38,213			43,713
		74,089			69,677
Current portion of above benefits, included in payrolls and benefits in accrued liabilities		(2,520	)		(2,839	)
Supplemental pension and other deferred compensation benefits		231			283
Deferred retirement benefits	$	71,800		$	67,121

Fair Value of Plan Assets

Our Defined Benefit plans’ assets fall into any of three fair value classifications as defined in ASC 820-10. Level 1 assets are valued based on observable prices for identical assets in active markets such as national security exchanges. Level 2 assets are valued based on a) quoted prices of similar assets in active markets, b) quoted prices for similar assets in inactive markets, c) other than quoted prices that are observable for the asset, or d) values that are derived principally from or corroborated by observable market data by correlation or other means. There are no Level 3 assets held by the plans as defined by ASC 820-10. The fair value of our plan assets as of August 31, 2015 and 2014 is as follows (in thousands):

Asset Category	August 31, 2015		Level 1		Level 2		Level 3
Cash Equivalents	$	222	$	222	$	—	$	—
Mutual Funds		57,364		57,364		—		—
Equities		31,028		31,028		—		—
Fixed Income		—		—		—		—
Total	$	88,614	$	88,614	$	—	$	—

Asset Category	August 31, 2014		Level 1		Level 2		Level 3
Cash Equivalents	$	180	$	180	$	—	$	—
Mutual Funds		45,634		45,634		—		—
Equities		47,431		47,431		—		—
Fixed Income		—		—		—		—
Total	$	93,245	$	93,245	$	—	$	—

The pension plans weighted-average target allocation for the year ended August 31, 2015 and strategic asset allocation matrix as of August 31, 2015 and 2014 are as follows:

	Target Allocation			Plan Assets @ 8/31
Asset Category	2015			2015			2014
Equity Securities		50 - 75	%		67	%		51	%
Debt Securities		20 - 50	%		25	%		49	%
Alternative Investments		0 - 15	%		7	%		0	%
Cash/Cash Equivalents		0 - 10	%		1	%		0	%
					100	%		100	%

The investment policy for the plans is formulated by the Company’s Pension Plan Committee (the “Committee”). The Committee is responsible for adopting and maintaining the investment policy, managing the investment of plan assets and ensuring that the plans’ investment program is in compliance with all provisions of ERISA, as well as the appointment of any investment manager who is responsible for implementing the plans’ investment process.

In drafting a strategic asset allocation policy, the primary objective is to invest assets in a prudent manner to meet the obligations of the plans to the Company’s employees, their spouses and other beneficiaries, when the obligations come due. The stability and improvement of the plans’ funded status is based on the various reasons for which money is funded. Other factors that are considered include the characteristics of the plans’ liabilities and risk-taking preferences.

The asset classes used by the plan are the United States equity market, the international equity market, the United States fixed income or bond market and cash or cash equivalents. Plan assets are diversified to minimize the risk of large losses. Cash flow requirements are coordinated with the custodian trustees and the investment manager to minimize market timing effects. The asset allocation guidelines call for a maximum and minimum range for each broad asset class as noted above.

The target strategic asset allocation and ranges established under the asset allocation represents a long-term perspective. The Committee will rebalance assets to ensure that divergences outside of the permissible allocation ranges are minimal and brief as possible.

The net of investment manager fee asset return objective is to achieve a return earned by passively managed market index funds, weighted in the proportions identified in the strategic asset allocation matrix. Each investment manager is expected to perform in the top one-third of funds having similar objectives over a full market cycle.

The investment policy is reviewed by the Committee at least annually and confirmed or amended as needed.

Under ASC 715-30-25, the transition obligation, prior service costs, and actuarial (gains)/losses are recognized in Accumulated Other Comprehensive Income each August 31 or any interim measurement date, while amortization of these amounts through net periodic benefit cost will occur in accordance with ASC 715-30 and ASC 715-60. The estimated amounts that will be amortized in 2016 are as follow:

Estimated 2016 Amortization	Pension Benefits		Other Post-Retirement Benefits
	(in thousands)
Prior service cost (credit) amortization	$	—	$	(7,351	)
Net loss amortization		1,270		2,789
Total	$	1,270	$	(4,562	)

The following contributions and benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Pension Benefits		Other Post-Retirement Benefits
Employer Contributions			Gross		(Subsidy receipts)
	(in thousands)
FYE 8/31/2016 (expected)	$	4,922	$	2,481	$	(261	)
Expected Benefit Payments for FYE 8/31
2016	$	5,820	$	2,572	$	(261	)
2017		6,190		2,712		(294	)
2018		6,450		2,933		(326	)
2019		6,823		3,252		(361	)
2020		7,205		3,629		(395	)
2021 - 2025		39,369		22,135		(429	)

The pension plan contributions are deposited into a trust, and the pension plan benefit payments are made from trust assets. For the postretirement benefit plan, the contributions and the benefit payments are the same and represent expected benefit amounts, which are paid from general assets.

The Company’s postretirement benefit plan is affected by The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”). Beginning in 2006, the Act provides a Federal subsidy payment to companies providing benefit plans that meet certain criteria regarding their generosity. The Company expects to receive those subsidy payments. The Company has accounted for the Act in accordance with ASC 715-60-05-8, which requires, in the Company’s case, recognition on August 31, 2004. The benefit obligation as of that date reflects the effect of the federal subsidy, and this amount is identified in the table reconciling the change in benefit obligation above. The estimated effect of the subsidy on cash flow is shown in the accompanying table of expected benefit payments above. The expected subsidy reduced net periodic postretirement benefit cost by $4,185,000, as compared with the amount calculated without considering the effects of the subsidy.

The Company also contributes to voluntary employee savings plans through regular monthly contributions equal to various percentages of the amounts invested by the participants. The Company’s contributions to these plans amounted to $2,767,000, $2,752,000 and $2,604,000 for the years ended August 31, 2015, 2014 and 2013, respectively.

XML

Stockholder's Equity - Additional Information (Detail) - USD ($)			12 Months Ended
	Aug. 30, 2013	Jul. 26, 2013	Aug. 31, 2013	Aug. 30, 2013	Aug. 31, 2015	Aug. 31, 2014
Equity Note [Line Items]
Capital stock of the company, before amendment		100
Capital stock of the company, after amendment		50,100
Preferred stock, shares authorized		50,000
Proceeds from sale of preferred stock			$ 141,164,000
First Priority Senior Secured Notes Due Two Thousand Eighteen [Member]
Equity Note [Line Items]
Redemption of senior notes	$ 127,750,000			$ 127,750,000
Series A Preferred Stock [Member]
Equity Note [Line Items]
Preferred stock, shares authorized		25,000			25,000	25,000
Dividend rate on preferred stock	6.00%	6.00%
Preferred stock, par value		$ 10,000
Shares issued by the company		14,116.375
Par Value of preferred stock		$ 1,000			$ 1,000	$ 1,000
Proceeds from sale of preferred stock	$ 141,163,750			$ 141,163,750

XML

Put and Call Option Agreement - Additional Information (Detail)			12 Months Ended
	Nov. 12, 2015 USD ($)	Apr. 08, 2015 USD ($) mi	Aug. 31, 2014 USD ($)
Open Option Contracts Written [Line Items]
Miles of pipeline | mi		88.85
Carrier's put option terms		The Carrier’s Put Option is exercisable beginning on the date that is the earlier of (a) January 1, 2026 and (b) the date that is 30 days after the latest of (i) the date on which the Carriers give notice that the Line 10 replacement work performed pursuant to the Letter Agreement is sufficiently completed (as contemplated in the Call and Put Agreement) and (ii) the ninth (9th) anniversary of the Execution Date (the “Put Option Commencement Date”).
Integrity costs			$ 36,000,000
Initial payment percentage of replacement cost		50.00%
Initial payment period of replacement cost		30 days
Percentage of construction management fees paid		2.25%
Remaining payment percentage of replacement cost		50.00%
Funding period of remaining replacement cost		10 years
Put Option termination terms		The Put Option terminates on the date that is 24 months after either (a) the Put Option Commencement Date if such date is the first of a month or (b) the first day of the calendar month immediately following the Put Option Commencement Date if it is not the first day of the month (the “Put/Call Option Expiry Date”).
Percentage increase in fixed annual fees		2.00%
Scenario, Forecast [Member] | Carriers [Member]
Open Option Contracts Written [Line Items]
Payment on subsequent year pipe replacement costs	$ 60,700,000
Maximum [Member]
Open Option Contracts Written [Line Items]
Construction expenses maximum limit not requiring approval		$ 38,500,000
Purchase Price [Member]
Open Option Contracts Written [Line Items]
Percentage book value of assets		70.00%
Percentage of replacement costs		100.00%
Percentage of regulatory costs		100.00%

XML

Consolidated Statements of Income - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
	Mar. 08, 2011	Aug. 31, 2015	May. 31, 2015	Feb. 28, 2015	Nov. 30, 2014	Aug. 31, 2014	May. 31, 2014	Feb. 28, 2014	Nov. 30, 2013	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Income Statement [Abstract]
Net sales		$ 708,241	$ 602,877	$ 580,904	$ 824,697	$ 989,515	$ 784,269	$ 773,719	$ 891,715	$ 2,716,719	$ 3,439,218	$ 3,681,253
Costs and expenses:
Costs of goods sold (exclusive of depreciation, amortization and losses on derivative contracts)										2,352,031	3,100,473	3,159,575
Losses on derivative contracts										0	0	2,319
Selling, general and administrative expenses										165,089	162,764	163,874
Depreciation, Amortization and Asset Impairments										41,554	31,804	26,877
Total costs and expenses										2,558,674	3,295,041	3,352,645
Operating income		$ 46,660	$ 64,454	$ 10,792	$ 36,139	$ 24,125	$ 12,801	$ 101,837	$ 5,414	158,045	144,177	328,608
Other expense:
Interest expense, net										(26,648)	(26,341)	(39,035)
Other, net										(3,869)	(2,897)	(3,819)
Loss on early extinguishment of debt	$ 1,245											(18,727)
Total other income (expense)										(30,517)	(29,238)	(61,581)
Income before income tax expense										127,528	114,939	267,027
Income tax expense:
Current										25,897	25,050	95,723
Deferred										19,580	18,776	2,621
Income tax expense										45,477	43,826	98,344
Net income										$ 82,051	$ 71,113	$ 168,683

XML

Property, Plant and Equipment

12 Months Ended

Aug. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

4. Property, Plant and Equipment

Property, plant and equipment is summarized as follows:

	August 31,
	2015		2014
	(in thousands)
Refinery equipment	$	378,877	$	361,822
Marketing (i.e. retail outlets)		141,726		131,870
Transportation		12,951		12,477
Construction-in-progress		65,970		44,914
		599,524		551,083
Less: Accumulated depreciation		251,767		233,564
	$	347,757	$	317,519

On March 6, 2013, the Company, through its subsidiary United Biofuels, Inc. (“UBI”), acquired a partially completed 50 million gallon per year biodiesel facility in Brooklyn, New York as part of the acquisition by its parent company, United Refining, Inc., and United Metro Energy Corp. (“UMEC”), a subsidiary of the Company’s parent company of certain assets of Metro Fuel Oil Corp, and its affiliates. UBI has initiated the project to complete and modify the biodiesel plant. The Company paid $9,800,000 for such biodiesel facility. Due to the Company and UMEC having a common owner, the Company recorded the acquisition of the biodiesel facility based on the carrying value of all assets acquired by its parent and UMEC from Metro Fuel Oil Corp., or $20,735,000. The difference between the carrying value of the biodiesel facility and the amount paid by the Company has been recorded as a capital contribution net of the tax effect of $4,960,000. Commissioning the modified biodiesel plant is expected at the end of fiscal 2016. As of August 31, 2015 the remaining cost of the project is expected to be about $30,000,000.

XML

Inventories

12 Months Ended

Aug. 31, 2015

Inventory Disclosure [Abstract]

Inventories

3. Inventories

Inventories consist of the following:

	August 31,
	2015		2014
	(in thousands)
Crude Oil	$	60,209	$	36,667
Petroleum Products		92,452		63,252
Total @ LIFO		152,661		99,919
Merchandise		24,277		23,983
Supplies		29,128		27,570
Total @ FIFO		53,405		51,553
Total Inventory	$	206,066	$	151,472

Included in petroleum product inventories are exchange balances either held for or due from other petroleum marketers. These balances are not significant.

The Company does not own sources of crude oil and depends on outside vendors for its needs.

As of August 31, 2015 and 2014, the replacement cost of LIFO inventories exceeded their LIFO carrying values by approximately $6,201,000 and $109,711,000, respectively. For the fiscal years ended August 31, 2015 and 2014, the Company recorded a charge to Costs of Goods Sold from a LIFO layer liquidation of $0 and $1,095,000, respectively.

XML

Environmental Matters and Other Contingencies

12 Months Ended

Aug. 31, 2015

Environmental Remediation Obligations [Abstract]

Environmental Matters and Other Contingencies

15. Environmental Matters and Other Contingencies

The Company is subject to federal, state and local laws and regulations relating to pollution and protection of the environment such as those governing releases of certain materials into the environment and the storage, treatment, transportation, disposal and clean-up of wastes, including, but not limited to, the Federal Clean Water Act, as amended, the Clean Air Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and analogous state and local laws and regulations.

Due to the nature of the Company’s business, the Company is and will continue to be subject to various environmental claims, legal actions and actions by regulatory authorities. In the opinion of management, all current matters are without merit or are of such kind or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated financial condition or operations of the Company.

The management of the Company believes that remediation and related environmental response costs incurred during the normal course of business, including contractual obligations as well as activities required under applicable law and regulation, will not have a material adverse effect on its consolidated financial condition or operations.

In addition to the foregoing proceedings, the Company and its subsidiaries are parties to various legal proceedings that arise in the ordinary course of their respective business operations. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that unfavorable dispositions would not have a material adverse effect on the consolidated financial position or results of operations of the Company.

The Company also closely monitors all climate change and Greenhouse Gas (“GHG”) legislation, better known as Cap and Trade as well as fuels mandates requiring the increased use of renewable resources in motor fuel. The Company believes, however, that implementation of reasonable, incremental changes over time will not have a material adverse effect on the Company’s consolidated financial position or operations. The ultimate cost of GHG reduction mandates and their effect on our business are, however, unknown until implementing regulations are available. Similarly, the costs of compliance with renewable fuels mandates in the future remains unknown until a final regulatory structure has been adopted.

XML

Income Taxes

12 Months Ended

Aug. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

Income tax expense consists of:

	Year Ended August 31,
	2015		2014		2013
	(in thousands)
Federal:
Current	$	25,298	$	20,431	$	78,569
Deferred		16,671		14,453		4,154
		41,969		34,884		82,723
State:
Current		599		4,619		17,154
Deferred		2,909		4,323		(1,533	)
		3,508		8,942		15,621
	$	45,477	$	43,826	$	98,344

Reconciliation of the differences between income taxes computed at the Federal statutory rate and the provision for income taxes attributable to income before income tax expense is as follows:

	Year Ended August 31,
	2015			2014			2013
	(in thousands)
U. S. federal income taxes at the statutory rate	$	44,649		$	40,243		$	93,465
State income taxes, net of Federal benefit		2,245			5,758			10,113
Domestic production activity deduction		(1,225	)		(2,068	)		(5,391	)
Permanent items		538			405			863
Employment credits		(703	)		(845	)		(722	)
Other		(27	)		333			16
Income tax expense	$	45,477		$	43,826		$	98,344

Deferred income tax liabilities (assets) are comprised of the following:

	August 31,
	2015			2014
	(in thousands)
Current deferred income tax liabilities (assets):
Inventory valuation	$	6,911		$	5,901
Accounts receivable allowance		(348	)		(442	)
Accrued liabilities		(3,312	)		(3,863	)
Other		2,571			1,214
		5,822			2,810
Deferred income tax liabilities (assets):
Property, plant and equipment		87,765			71,540
Accrued liabilities		(28,740	)		(26,924	)
State net operating loss carryforwards		(7,695	)		(7,927	)
Valuation allowance		2,577			2,837
Other		2,014			4,614
		55,921			44,140
Net deferred income tax liability	$	61,743		$	46,950

The Company’s results of operations are included in the consolidated Federal tax return of the Parent, See Note 13 to “Consolidated Financial Statements”. The Company has no Federal net operating loss carryforwards for regular tax purposes. For state purposes, two entities have Pennsylvania net operating loss carry forwards of $78,000,000 and $40,000,000, respectively, which will expire between fiscal year 2022 and 2031. Pennsylvania limits the amount of net operating loss carry forwards which can be used to offset Pennsylvania taxable income to the greater of $4,000,000 or 25% of Pennsylvania taxable income prior to the net operating loss deduction. Due to these limitations, the Company has recognized valuation allowances, net of a federal benefit, of $2,577,000 and $2,837,000 at August 31, 2015 and 2014, respectively, for Pennsylvania net operating loss carry forwards not anticipated to be realized before expiration.

XML

Subsidiary Guarantors - Additional Information (Detail)	Aug. 31, 2015
10.50% Senior Secured Notes [Member]
Guarantor Obligations [Line Items]
Interest rate of Senior Secured Notes	10.50%

XML

Leases

12 Months Ended

Aug. 31, 2015

Leases [Abstract]

Leases

7. Leases

The Company occupies premises, primarily retail gas stations and convenience stores and office facilities under long-term leases which require minimum annual rents plus, in certain instances, the payment of additional rents based upon sales. The leases generally are renewable for one to three five-year periods.

As of August 31, 2015 and 2014, capitalized lease obligations, included in long-term debt, amounted to $4,212,000 and $3,021,000, respectively, inclusive of current portion of $124,000 and $109,000, respectively. The related assets (retail gas stations and convenience stores) as of August 31, 2015 and 2014 amounted to $3,732,000 and $2,620,000, net of accumulated amortization of $956,000 and $869,000, respectively. Lease amortization amounting to $207,000, $185,000 and $145,000 for the years ended August 31, 2015, 2014 and 2013, respectively is included in depreciation and amortization expense.

Future minimum lease payments as of August 31, 2015 are summarized as follows:

Year ended August 31,	Capital Leases		Operating Leases
	(in thousands)
2016	$	713	$	13,409
2017		713		11,898
2018		713		9,638
2019		677		8,509
2020		641		6,163
Thereafter		7,667		11,049
Total minimum lease payments		11,124		60,666
Less: Minimum sublease rents		—		—
Net minimum lease payments		11,124	$	60,666
Less: Amount representing interest		6,912
Present value of net minimum lease payments	$	4,212

Net rent expense for operating leases amounted to $13,728,000, $13,243,000 and $13,135,000 for the years ended August 31, 2015, 2014 and 2013, respectively.

XML

Long-Term Debt - Principal Amount of Long-Term Debt Maturity (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Debt Disclosure [Abstract]
2016	$ 1,556
2017	1,071
2018	237,676
2019	345
2020	279
Thereafter	3,531
Long-term Debt, Gross, Total	244,458
Unamortized discount	3,791	$ 5,036
Long-term debt	$ 240,667	$ 239,525

XML

Goodwill and Intangible Assets

12 Months Ended

Aug. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

5. Goodwill and Intangible Assets

As of August 31, 2015 and 2014, the Company’s trade name, goodwill and amortizable intangible assets, included in the Company’s retail segment, were as follows:

	Weighted Average  Remaining Life		August 31, 2015				August 31, 2014
			Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in thousands)
Amortizable intangible assets:
Deed restrictions		11 yrs.	$	800	$	437	$	800	$	405
Leasehold covenants		7 yrs.		1,590		1,084		1,490		934
			$	2,390	$	1,521	$	2,290	$	1,339
Non-amortizable assets:
Tradename			$	10,500	$	—	$	10,500	$	—
Goodwill			$	1,349	$	—	$	1,349	$	—

Amortization expense for the fiscal years ended August 31, 2015, 2014 and 2013 amounted to $115,000, $106,000 and $107,000, respectively.

Amortization expense for intangible assets subject to amortization for each of the years in the five-year period ending August 31, 2020 is estimated to be $126,000, $127,000, $126,000, $127,000 and $67,000.

XML

Accrued Liabilities

12 Months Ended

Aug. 31, 2015

Payables and Accruals [Abstract]

Accrued Liabilities

6. Accrued Liabilities

Accrued liabilities include the following:

	August 31,
	2015		2014
	(in thousands)
Interest	$	119	$	104
Payrolls and benefits		15,974		16,972
Other		1,818		1,615
	$	17,911	$	18,691

XML

Credit Facility

12 Months Ended

Aug. 31, 2015

Text Block [Abstract]

Credit Facility

8. Credit Facility

On June 18, 2013, the Company amended its Revolving Credit Facility (“Amended and Restated Revolving Credit Facility”) with PNC Bank, National Association as Administrator (the “Agent”). The expiration date of the Amended and Restated Revolving Credit Facility was extended to November 29, 2017 and the commitment fee on the unused balance of the facility was reduced to 0.25%. The maximum facility commitment remains at $175,000,000 and interest will now be calculated as follows: a) for base rate borrowings, at the greater of the Agent’s prime rate, federal funds open rate plus 0.5% or the daily LIBOR rate plus 1.0% plus the applicable margin of .75% to 1.75% and b) for euro-rate borrowings, at the LIBOR rate plus an applicable margin of 2.25% to 3.25%. The applicable margin will vary depending on a formula calculating the Company’s unused availability under the facility.

The Amended and Restated Revolving Credit Facility continues to be secured primarily by certain cash accounts, accounts receivable and inventory which amounted to $268,914,000 as of August 31, 2015. Until maturity, the Company may borrow on a borrowing base formula as set forth in the facility. The participating banks in the Amended and Restated Revolving Credit Facility are PNC Bank, National Association, Bank of America, N.A., Manufacturers and Traders Trust Company, and Bank Leumi USA.

As of August 31, 2015 and 2014, there were no Base-Rate borrowings nor Euro-Rate borrowings outstanding under the agreement. $8,753,000 of letters of credit were outstanding under the agreement as of August 31, 2015 and 2014, respectively. The weighted average interest rate for Base-Rate borrowing for the years ended August 31, 2015 and 2014 was 4.00%, respectively. The weighted average interest rate for Euro-Rate borrowings for the years ended August 31, 2015 and 2014 was 0%. The Company pays a commitment fee of .25% per annum on the unused balance of the facility. All bank related charges are included in Other, net in its Consolidated Statements of Operations. See Note 21 to “Consolidated Financial Statements”.

XML

Employee Benefit Plans - Summary of Change in Benefit Obligations and Fair Values of Plan Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Change in plan assets:
Fair values of plan assets @ beginning of year	$ 93,245
Fair values of plan assets @ end of year	88,614	$ 93,245
Amounts recognized in the balance sheet consist of:
Noncurrent liability	71,800	67,121
Pension Benefits [Member]
Change in benefit obligation:
Benefit obligation @ beginning of year	119,209	107,141
Service cost	626	597	$ 652
Interest cost	4,850	5,204	4,511
Curtailment		(69)
Actuarial (gains) / losses	5,299	10,816
Benefits paid	(5,494)	(4,480)
Projected benefit obligation @ end of year	124,490	119,209	107,141
Change in plan assets:
Fair values of plan assets @ beginning of year	93,245	80,224
Actual return on plan assets	(3,509)	11,613
Company contributions	4,372	5,888
Benefits paid	(5,494)	(4,480)
Fair values of plan assets @ end of year	88,614	93,245	80,224
Unfunded status	35,876	25,964
Amounts recognized in the balance sheet consist of:
Noncurrent liability	35,876	25,964
Net amount recognized	35,876	25,964
Other Post-Retirement Benefits [Member]
Change in benefit obligation:
Benefit obligation @ beginning of year	43,713	45,700
Service cost	608	774
Interest cost	1,656	2,073
Plan amendments		(2,538)
Medicare part D subsidy on benefits paid	148
Actuarial (gains) / losses	(5,313)	162
Benefits paid	(2,599)	(2,458)
Projected benefit obligation @ end of year	38,213	43,713	$ 45,700
Change in plan assets:
Company contributions	2,599	2,458
Benefits paid	(2,599)	(2,458)
Unfunded status	38,213	43,713
Amounts recognized in the balance sheet consist of:
Current liability	2,520	2,839
Noncurrent liability	35,693	40,874
Net amount recognized	$ 38,213	$ 43,713

XML

Subsidiary Guarantors - Schedule of Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2012
Current:
Cash and cash equivalents	$ 117,028	$ 99,037	$ 158,537	$ 137,540
Accounts receivable, net	81,567	92,391
Refundable income taxes		6,000
Inventories, net	206,066	151,472
Prepaid income taxes		13,674
Prepaid expenses and other assets	28,000	67,168
Amounts due from affiliated companies, net	393
Total current assets	433,054	429,742
Property, plant and equipment, net	347,757	317,519
Deferred financing costs, net	2,667	3,575
Goodwill and other non-amortizable assets	11,849	11,849
Amortizable intangible assets, net	869	951
Deferred integrity and replacement costs, net	58,634	64,916
Deferred turnaround costs & other assets	30,636	41,912
Total assets	885,466	870,464
Current:
Current installments of long-term debt	1,556	1,551
Accounts payable	44,833	91,881
Accrued liabilities	17,911	$ 18,691
Income taxes payable	7,397
Sales, use and fuel taxes payable	23,373	$ 20,550
Deferred income taxes	5,822	2,810
Amounts due to affiliated companies, net		1,521
Total current liabilities	100,892	137,004
Long term debt: less current installments	239,111	237,974
Deferred income taxes	55,921	44,140
Deferred retirement benefits	71,800	67,121
Total liabilities	$ 467,724	$ 486,239
Commitment and contingencies
Stockholder's equity
Common stock, $.10 par value per share-shares authorized 100; issued and outstanding 100	$ 0	$ 0
Additional paid-in capital	156,846	156,810
Retained earnings	263,464	222,495
Accumulated other comprehensive loss	(16,684)	(9,196)
Total stockholder's equity	417,742	384,225
Total liabilities and stockholder's equity	885,466	870,464
United Refining Company [Member]
Current:
Cash and cash equivalents	106,237	79,356	141,386	122,219
Accounts receivable, net	51,196	51,452
Refundable income taxes		6,000
Inventories, net	176,320	122,161
Prepaid income taxes		16,918
Prepaid expenses and other assets	20,785	62,889
Amounts due from affiliated companies, net	1,883
Intercompany	18,008	127,105
Total current assets	374,429	465,881
Property, plant and equipment, net	217,375	199,703
Deferred financing costs, net	2,667	3,575
Deferred integrity and replacement costs, net	58,634	64,916
Deferred turnaround costs & other assets	25,410	39,302
Investment in subsidiaries	108,972	35,811
Total assets	787,487	809,188
Current:
Current installments of long-term debt	447	519
Accounts payable	24,244	64,965
Accrued liabilities	10,856	12,315
Income taxes payable	(33,092)
Sales, use and fuel taxes payable	18,366	16,037
Deferred income taxes	6,560	3,770
Total current liabilities	27,381	97,606
Long term debt: less current installments	233,911	232,946
Deferred income taxes	39,179	28,816
Deferred retirement benefits	69,274	65,595
Total liabilities	$ 369,745	$ 424,963
Commitment and contingencies
Stockholder's equity
Additional paid-in capital	$ 156,846	$ 156,810
Retained earnings	263,464	222,495
Accumulated other comprehensive loss	(16,684)	(9,196)
Total stockholder's equity	417,742	384,225
Total liabilities and stockholder's equity	787,487	809,188
Guarantors [Member]
Current:
Cash and cash equivalents	10,791	19,681	$ 17,151	$ 15,321
Accounts receivable, net	30,371	40,939
Inventories, net	29,746	29,311
Prepaid income taxes		(3,244)
Prepaid expenses and other assets	7,215	4,279
Amounts due from affiliated companies, net	(1,490)
Intercompany	77,563	1,116
Total current assets	154,196	92,082
Property, plant and equipment, net	130,382	117,816
Goodwill and other non-amortizable assets	11,849	11,849
Amortizable intangible assets, net	869	951
Deferred turnaround costs & other assets	5,226	2,610
Total assets	302,522	225,308
Current:
Current installments of long-term debt	1,109	1,032
Accounts payable	20,589	26,916
Accrued liabilities	7,055	6,376
Income taxes payable	40,489
Sales, use and fuel taxes payable	5,007	4,513
Deferred income taxes	(738)	(960)
Amounts due to affiliated companies, net		1,521
Intercompany	95,571	128,221
Total current liabilities	169,082	167,619
Long term debt: less current installments	5,200	5,028
Deferred income taxes	16,742	15,324
Deferred retirement benefits	2,526	1,526
Total liabilities	$ 193,550	$ 189,497
Commitment and contingencies
Stockholder's equity
Common stock, $.10 par value per share-shares authorized 100; issued and outstanding 100	$ 18	$ 18
Additional paid-in capital	16,626	16,626
Retained earnings	93,978	20,143
Accumulated other comprehensive loss	(1,650)	(976)
Total stockholder's equity	108,972	35,811
Total liabilities and stockholder's equity	302,522	225,308
Series A Preferred Stock [Member]
Stockholder's equity
Series A Preferred stock; $1,000 par value per share-shares authorized 25,000; issued and outstanding 14,116	14,116	14,116
Series A Preferred Stock [Member] | United Refining Company [Member]
Stockholder's equity
Series A Preferred stock; $1,000 par value per share-shares authorized 25,000; issued and outstanding 14,116	14,116	14,116
Eliminations [Member]
Current:
Intercompany	(95,571)	(128,221)
Total current assets	(95,571)	(128,221)
Investment in subsidiaries	(108,972)	(35,811)
Total assets	(204,543)	(164,032)
Current:
Intercompany	(95,571)	(128,221)
Total current liabilities	(95,571)	(128,221)
Total liabilities	$ (95,571)	$ (128,221)
Commitment and contingencies
Stockholder's equity
Common stock, $.10 par value per share-shares authorized 100; issued and outstanding 100	$ (18)	$ (18)
Additional paid-in capital	(16,626)	(16,626)
Retained earnings	(93,978)	(20,143)
Accumulated other comprehensive loss	1,650	976
Total stockholder's equity	(108,972)	(35,811)
Total liabilities and stockholder's equity	$ (204,543)	$ (164,032)

XML

Employee Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Accumulated net actuarial loss	$ (43,848)	$ (29,411)
Net amount recognized, before tax effect	(43,848)	(29,411)
Other Post-Retirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Accumulated net actuarial loss	(19,953)	(29,465)
Accumulated prior service cost	35,371	42,722
Net amount recognized, before tax effect	$ 15,418	$ 13,257

XML

Employee Benefit Plans - Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Income (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Current year actuarial (gain) / loss	$ 15,160	$ 4,702
Amortization of actuarial gain / (loss)	(724)	(697)
Total recognized in other comprehensive (income) / loss	14,436	4,005
Total recognized in net periodic benefit cost and other comprehensive (income)/loss	14,285	4,934
Other Post-Retirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Current year actuarial (gain) / loss	(5,313)	162
Amortization of actuarial gain / (loss)	(4,199)	(5,073)
Current year prior service (credit) / cost		(2,537)
Amortization of prior service credit / (cost)	7,351	6,933
Total recognized in other comprehensive (income) / loss	(2,161)	(515)
Total recognized in net periodic benefit cost and other comprehensive (income)/loss	$ (3,049)	$ 471

XML

Schedule - Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Text Block [Abstract]
Balance at Beginning of Period	$ 1,070	$ 1,800	$ 1,800
Charged to Costs and Expenses	750	1,050	1,680
Deductions	(970)	(1,780)	(1,680)
Balance at End Of Period	$ 850	$ 1,070	$ 1,800

XML

Property, Plant and Equipment (Tables)

12 Months Ended

Aug. 31, 2015

Property, Plant and Equipment [Abstract]

Summary of Property, Plant and Equipment

Property, plant and equipment is summarized as follows:

	August 31,
	2015		2014
	(in thousands)
Refinery equipment	$	378,877	$	361,822
Marketing (i.e. retail outlets)		141,726		131,870
Transportation		12,951		12,477
Construction-in-progress		65,970		44,914
		599,524		551,083
Less: Accumulated depreciation		251,767		233,564
	$	347,757	$	317,519

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets and Goodwill (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Goodwill And Intangible Assets [Line Items]
Amortizable intangible assets, Accumulated Amortization	$ 1,521	$ 1,339
Amortizable intangible assets, Gross Carrying Amount	2,390	2,290
Non-amortizable assets, Tradename, Gross Carrying Amount	10,500	10,500
Non-amortizable assets, Goodwill, Gross Carrying Amount	1,349	1,349
Deed Restrictions [Member]
Goodwill And Intangible Assets [Line Items]
Amortizable intangible assets, Accumulated Amortization	$ 437	405
Amortizable intangible assets, Weighted Average Remaining Life	11 years
Amortizable intangible assets, Gross Carrying Amount	$ 800	800
Leasehold Covenants [Member]
Goodwill And Intangible Assets [Line Items]
Amortizable intangible assets, Accumulated Amortization	$ 1,084	934
Amortizable intangible assets, Weighted Average Remaining Life	7 years
Amortizable intangible assets, Gross Carrying Amount	$ 1,590	$ 1,490

XML

Stockholder's Equity

12 Months Ended

Aug. 31, 2015

Equity [Abstract]

Stockholder's Equity

13. Stockholder’s Equity

On July 26, 2013, the Board of Directors of the Company and the Company’s sole stockholder, URI, approved, and the Company filed with the Secretary of State of the Commonwealth of Pennsylvania, an Amended and Restated Articles of Incorporation of the Company (the “Amendment”). Pursuant to the Amendment, the capital stock of the Company was increased from 100 to 50,100, of which 50,000 were designated as preferred stock.

Out of the preferred stock, the Board of Directors created the 6% Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) and the Amendment included the designations of the rights and preferences of such series. Among other things, the Series A Preferred Stock, of which the Company is authorized to issue a maximum of 25,000, carry the following rights:

• The Series A Preferred Stock rank: (i) senior to the Company’s common stock; (ii) senior to all other classes of equity securities other than preferred stock which by their terms do not rank senior to the Series A Preferred Stock; and (iii) on parity with any other series of the Company’s preferred stock that does not provide it ranks junior to the Series A Preferred Stock;

• The Series A Preferred Stock shall receive dividends at a rate of 6.00% of the Stated Value (which is $10,000) per share per annum;

• The Series A Preferred Stock shall have no voting rights unless otherwise required by law except in limited circumstances relating to amendments to URC’s certificate of incorporation or amendments to the rights and preferences of the Series A Preferred Stock;

• In the event dividends have not been paid in the aggregate amount payable for six or more Dividends Periods, holders of the Series A Preferred Stock shall be entitled to elect two directors to the Board of Directors, who shall remain directors until all accumulated and unpaid dividends on the Series A Preferred Stock have been paid in full or set aside for payment. Upon the payment or set aside of such dividends, the term of office of the directors appointed by the holders of the Series A Preferred Stock shall terminate and the size of the Board of Directors shall automatically decrease by two; and

• The Series A Preferred Stock are perpetual and have no maturity date. However, the Company may, at its option, redeem shares of the Series A Preferred Stock, in whole or in part, on any Dividend Repayment Date on or after July 26, 2023 at a price of $10,000 per share plus accrued and unpaid dividends.

On July 26, 2013, the Company issued 14,116.375 shares of Series A $1,000 par value per share to United Refining, Inc., its parent. The proceeds from the issuance in the amount of $141,163,750 were used to redeem $127,750,000 of the Company’s Senior Secured Notes due 2018, which redemption occurred on August 30, 2013. In accordance with the Indenture governing the Senior Secured Notes due 2018, the Company obtained an opinion concerning the fairness from a financial point of view of the issuance of the Series A Preferred Stock to URI.

XML

Quarterly Financial Data (unaudited)

12 Months Ended

Aug. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (unaudited)

18. Quarterly Financial Data (unaudited)

	Net Sales		Operating Profit		Net Income (Loss)
	(in thousands)
2015
First Quarter	$	824,697	$	36,139	$	17,614
Second Quarter		580,904		10,792		1,603
Third Quarter		602,877		64,454		34,707
Fourth Quarter		708,241		46,660		28,127
2014
First Quarter	$	891,715	$	5,414	$	(1,087	)
Second Quarter		773,719		101,837		57,670
Third Quarter		784,269		12,801		3,232
Fourth Quarter		989,515		24,125		11,298

XML

Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Property Plant and Equipment Useful Life and Values [Abstract]
Refinery equipment	$ 378,877	$ 361,822
Marketing (i.e. retail outlets)	141,726	131,870
Transportation	12,951	12,477
Construction-in-progress	65,970	44,914
Property, plant and equipment, gross	599,524	551,083
Less: Accumulated depreciation	251,767	233,564
Property, plant and equipment, net	$ 347,757	$ 317,519

XML

Segments of Business (Tables)

12 Months Ended

Aug. 31, 2015

Segment Reporting [Abstract]

Summarized Financial Information of Company's Reportable Segments

Summarized financial information regarding the Company’s reportable segments is presented in the following table.

	Year Ended August 31,
	2015		2014		2013
	(in thousands)
Net Sales
Retail	$	1,347,291	$	1,688,467	$	1,721,625
Wholesale		1,369,428		1,750,751		1,959,628
	$	2,716,719	$	3,439,218	$	3,681,253
Intersegment Sales
Wholesale	$	566,853	$	875,264	$	904,526
Operating Income
Retail	$	32,362	$	14,502	$	7,520
Wholesale		125,683		129,675		321,088
	$	158,045	$	144,177	$	328,608
Depreciation, Amortization and Asset Impairments
Retail	$	7,288	$	6,566	$	6,153
Wholesale		34,266		25,238		20,724
	$	41,554	$	31,804	$	26,877
Capital Expenditures (including non-cash portion)
Retail	$	13,635	$	11,271	$	17,065
Wholesale		38,219		38,234		39,569
	$	51,854	$	49,505	$	56,634
	August 31,
	2015		2014
Total Assets
Retail	$	178,200	$	186,277
Wholesale		707,266		684,187
	$	885,466	$	870,464

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 82,051	$ 71,113	$ 168,683
Other comprehensive (loss) income, net of taxes:
Unrecognized post-retirement (loss) income, net of taxes of $(4,787), $(1,384) and $8,003 for the years ended August 31, 2015, 2014 and 2013, respectively	(7,488)	(2,106)	12,447
Other comprehensive (loss) income	(7,488)	(2,106)	12,447
Total comprehensive income	$ 74,563	$ 69,007	$ 181,130

XML

Subsidiary Guarantors - Schedule of Condensed Consolidating Statements of Cash Flows (Detail) - USD ($) $ in Thousands	12 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Net cash provided by operating activities	$ 143,650	$ 111,233	$ 164,371
Cash flows from investing activities:
Additions to property, plant and equipment	(50,249)	(49,264)	(41,597)
Additions to amortizable intangible assets	(100)
Additions to deferred turnaround costs	(3,616)	(42,195)	(1,241)
Additions to deferred integrity and replacement costs	(28,630)	(36,810)
Proceeds from asset dispositions	10	58	81
Net cash used in investing activities	(82,585)	(128,211)	(42,757)
Cash flows from financing activities:
Distribution from (to) Parent under the Tax Sharing Agreement	36	(3,034)	1,996
Proceeds from sale of preferred stock			141,164
Dividends to preferred shareholder and stockholder	(41,082)	(38,951)	(114,338)
Proceeds from issuance of long term debt		1,426
Principal reductions of long-term debt	(1,708)	(1,963)	(129,439)
Deferred financing costs	(320)
Net cash (used in) provided by financing activities	(43,074)	(42,522)	(100,617)
Net (decrease) increase in cash and cash equivalents	17,991	(59,500)	20,997
Cash and cash equivalents, beginning of year	99,037	158,537	137,540
Cash and cash equivalents, end of period	117,028	99,037	158,537
United Refining Company [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by operating activities	128,665	92,535	136,168
Cash flows from investing activities:
Additions to property, plant and equipment	(30,451)	(33,069)	(15,921)
Additions to deferred turnaround costs	(705)	(41,850)	(1,170)
Additions to deferred integrity and replacement costs	(28,630)	(36,810)
Proceeds from asset dispositions	5	56	70
Net cash used in investing activities	(59,781)	(111,673)	(17,021)
Cash flows from financing activities:
Distribution from (to) Parent under the Tax Sharing Agreement	36	(3,034)	1,996
Proceeds from sale of preferred stock			141,164
Dividends to preferred shareholder and stockholder	(41,082)	(38,951)	(114,338)
Principal reductions of long-term debt	(637)	(907)	(128,802)
Deferred financing costs	(320)
Net cash (used in) provided by financing activities	(42,003)	(42,892)	(99,980)
Net (decrease) increase in cash and cash equivalents	26,881	(62,030)	19,167
Cash and cash equivalents, beginning of year	79,356	141,386	122,219
Cash and cash equivalents, end of period	106,237	79,356	141,386
Guarantors [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash provided by operating activities	14,985	18,698	28,203
Cash flows from investing activities:
Additions to property, plant and equipment	(19,798)	(16,195)	(25,676)
Additions to amortizable intangible assets	(100)
Additions to deferred turnaround costs	(2,911)	(345)	(71)
Proceeds from asset dispositions	5	2	11
Net cash used in investing activities	(22,804)	(16,538)	(25,736)
Cash flows from financing activities:
Proceeds from issuance of long term debt		1,426
Principal reductions of long-term debt	(1,071)	(1,056)	(637)
Net cash (used in) provided by financing activities	(1,071)	370	(637)
Net (decrease) increase in cash and cash equivalents	(8,890)	2,530	1,830
Cash and cash equivalents, beginning of year	19,681	17,151	15,321
Cash and cash equivalents, end of period	$ 10,791	$ 19,681	$ 17,151

XML

Accounts Receivable, Net

12 Months Ended

Aug. 31, 2015

Receivables [Abstract]

Accounts Receivable, Net

2. Accounts Receivable, Net

As of August 31, 2015 and 2014, accounts receivable were net of allowance for doubtful accounts of $850,000 and $1,070,000, respectively.

XML

Long-Term Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands	Aug. 31, 2015	Aug. 31, 2014
Long-term debt:
Long-term debt	$ 240,667	$ 239,525
Long-term debt	240,667	239,525
Less: Current installments of long-term debt	1,556	1,551
Total long-term debt, less current installments	239,111	237,974
10.50% Senior Secured Notes [Member]
Long-term debt:
Long-term debt	233,459	232,214
Long-term debt	233,459	232,214
Other Long Term Debt [Member]
Long-term debt:
Long-term debt	7,208	7,311
Long-term debt	$ 7,208	$ 7,311

XML

Segments of Business - Additional Information (Detail)	12 Months Ended
	Aug. 31, 2015 Segment
Segment Reporting [Abstract]
Number of business segments	2

XML

Employee Benefit Plans - One Percentage Point Changes in Assumed Healthcare Cost Trend Rate (Detail) $ in Thousands	12 Months Ended
	Aug. 31, 2015 USD ($)
Compensation and Retirement Disclosure [Abstract]
1% Point Increase, Effect on total of service and interest cost components	$ 51
1% Point Increase, Effect on post-retirement benefit obligation	1,419
1% Point Decrease, Effect on total of service and interest cost components	(49)
1% Point Decrease, Effect on post-retirement benefit obligation	$ (1,332)

XML

Put and Call Option Agreement

12 Months Ended

Aug. 31, 2015

Text Block [Abstract]

Put and Call Option Agreement

19. Put and Call Option Agreement

On April 8, 2015 (the “Execution Date”), the Company entered into a Put and Call Option Agreement with each of Enbridge Energy Limited Partnership (“Enbridge LP”) and Enbridge Pipelines Inc. (“Enbridge Inc.” and, together with Enbridge LP, the “Carriers”). The Put and Call Option Agreement entered into with Enbridge LP (the “U.S. Agreement”) is substantially similar to the Put and Call Option Agreement entered into with Enbridge Inc. (the “Canadian Agreement” and, together with the U.S. Agreement, the “Put and Call Agreement”). The Put and Call Agreement was contemplated in that certain Letter Agreement, originally executed on July 31, 2014 and last amended on April 8, 2015 (the “Letter Agreement”), between the Company and the Carriers relating to approximately 88.85 miles of pipeline owned by the Carriers, which transports crude oil from Canada to the Company’s Kiantone Pipeline in West Seneca, New York, and serves the Company’s refinery in Warren, Pennsylvania (“Line 10”). The Letter Agreement related to the parties’ agreement concerning funding certain integrity and replacement costs for Line 10.

The Carriers own the pipeline facilities generally identified as Line 10, including real property interests through and under which Line 10 passes, the Carriers’ assignable permits related to the ownership and operation of Line 10, as well as personal property, contract rights, records and incidental rights held solely in connection with Line 10 (collectively, the “Assets”).

Pursuant to the Letter Agreement, the Company agreed to fund certain integrity costs necessary to maintain Line 10 (the “Integrity Costs”), which was paid August 14, 2014, which aggregated $36 million for the calendar year 2014. Pursuant to the Letter Agreement, the Carriers agreed to reconcile their actual expenses for the integrity maintenance and refund any excess payments made by the Company. The parties agreed to apply any credit to the Company as a result of such reconciliation to amounts owed by the Company for Subsequent Year Pipe Replacement Costs (as defined below). For each subsequent calendar year through the earlier of the expiration or closing of the purchase rights granted to the Company pursuant to the Put and Call Agreement, the Carriers will provide the Company with an invoice for the Integrity Costs for such calendar year (“Subsequent Year Integrity Costs”). The Carriers’ actual expenses with respect to the integrity maintenance and pipe replacement will be reconciled against the Subsequent Year Integrity and Pipe Replacement Costs similarly to the reconciliation for calendar year 2014.

In addition, the Company agreed to pay for half the cost of replacing certain portions of Line 10 in accordance with a plan agreed to between the Company Parties and the Carriers. The Company will pay 50% of the estimated expenses of the replacement project for each segment of Line 10 to be replaced (the “Replacement Costs”) within 30 days of its receipt of an invoice for the same, along with a project management fee of 2 ¹/₄%. Each Carrier will initially fund the remaining 50% of the Replacement Costs during construction, provided that the Company will reimburse the Carriers for their actual cost of funds during the construction process. Once construction is complete and each replaced segment of Line 10 is put into service, and assuming the Company has not exercised its rights to purchase Line 10 pursuant to the Put and Call Agreement, the Company will repay the Carriers the 50% of the Replacement Costs they funded over a 10 year period.

On November 12, 2015, pursuant to the Letter Agreement, the Company made a payment to the Carriers in the amount of $60,700,000 for Subsequent Year Pipe Replacement Costs, which amount reflects credits received by the Company upon reconciliation of the Integrity Costs funded in fiscal 2014. Kiantone, as the owner of the Kiantone Pipeline, has agreed to guaranty any and all payments due by the Company pursuant to the Letter Agreement.

Pursuant to the Put and Call Agreement, the Carriers granted the Company a right (the “Call Option”) to purchase all of the Assets and the Company granted the Carriers the right to put all the Assets to the Company (the “Put Option” and, together with the Call Option, the “Purchase Options”) subject to the terms and conditions of the Put and Call Agreement.

The Carrier’s Put Option is exercisable beginning on the date that is the earlier of (a) January 1, 2026 and (b) the date that is 30 days after the latest of (i) the date on which the Carriers give notice that the Line 10 replacement work performed pursuant to the Letter Agreement is sufficiently completed (as contemplated in the Call and Put Agreement) and (ii) the ninth (9^th) anniversary of the Execution Date (the “Put Option Commencement Date”). The Put Option terminates on the date that is 24 months after either (a) the Put Option Commencement Date if such date is the first of a month or (b) the first day of the calendar month immediately following the Put Option Commencement Date if it is not the first day of the month (the “Put/Call Option Expiry Date”). The Company’s Call Option is exercisable at any time beginning on the Execution Date and ending on the Put/Call Option Expiry Date.

The purchase price of the Assets (the “Purchase Price”) shall be calculated as follows: the sum of (a) 70% of the book value of the Assets as of July 31, 2014 minus annual depreciation, (b) 100% of total replacement costs for any segment replacements on the Pipeline commenced by the Carrier, whether completed or ongoing on the date of Asset sale is consummated (the “Closing Date”), minus any of such expenses paid by the Company and (c) 100% of the total regulatory requirements costs for any regulatory work commenced by the Carrier, whether completed or ongoing at the Closing Date, minus any of such expenses paid by the Company. The Purchase Price shall be subject to adjustment pursuant to the Put and Call Agreement with respect to certain work ongoing at the Closing Date.

Among other customary conditions to closing, Carrier’s obligation to close the sale of the Assets is conditioned on the Company’s payment of all obligations outstanding pursuant to the Put and Call Agreement and the Letter Agreement. In addition, the sale of Assets pursuant to the U.S. Agreement shall close concurrently with the sale of the Assets pursuant to the Canadian Agreement.

The Company and the Carrier agreed that certain work must be undertaken in order to carve out portions of Line 10 in Canada from the Enbridge mainline system and allow it to operate independently. In the event any work is required to similarly separate the U.S. portion of Line 10 from the Enbridge mainline system (the “Carve-Out Work”), a plan to perform such Carve-Out Work that would result in expenses greater than $38.5 million will require the approval of the Company.

In the event any of the maintenance, regulatory requirement, or replacement work contemplated in the Letter Agreement or the Put and Call Agreement (collectively, the “Work”) is outstanding at the Closing Date, concurrently with the closing of the Asset sale, the Company and the Carriers will enter into an operating agreement (the “Operating Agreement”) pursuant to which the Carriers will provide certain operational and administrative services (the “Services”) while the Work is ongoing and complete such Work. As payment for the Services and completion of the Work, the Carriers shall be: (i) reimbursed for all expenses of providing the Services, (ii) paid a fixed fee of on an annual basis, which shall be subject to a 2% increase for each successive year following the first year of the Operating Agreement, and (ii) paid for all expenses of the Work not previously paid, as well as a 2.25% construction management fee.

The Put and Call Agreement may be terminated by the mutual consent of the Company and the Carriers and shall automatically terminate if neither Purchase Option is exercised prior to the Put/Call Option Expiry Date. Moreover, either the Company or a Carrier may terminate the Put and Call Agreement if a closing of the Asset sale shall not have occurred on or before December 31, 2028 assuming the terminating party is not then in breach of the Put and Call Agreement and if a party has breached a representation, such breach has not been cured within the time periods allotted by the Put and Call Agreement. Finally, the Company may terminate the Put and Call Agreement by notifying the Carriers to cease the replacement work contemplated in the Letter Agreement. The Company has assessed the accounting impact of the Put and Call Agreement and determined there is no impact until the time when it becomes probable that the Put or Call will be exercised.

XML

Employee Benefit Plans - Employer Contributions and Benefit Payments which Reflect in Future Service (Detail) $ in Thousands	12 Months Ended
	Aug. 31, 2015 USD ($)
Pension Benefits [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
FYE 8/31/2016 (expected)	$ 4,922
2016	5,820
2017	6,190
2018	6,450
2019	6,823
2020	7,205
2021 - 2025	39,369
Other Post-Retirement Benefits Gross [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
FYE 8/31/2016 (expected)	2,481
2016	2,572
2017	2,712
2018	2,933
2019	3,252
2020	3,629
2021 - 2025	22,135
Other Post-Retirement Benefits (Subsidy Receipts) [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
FYE 8/31/2016 (expected)	(261)
2016	(261)
2017	(294)
2018	(326)
2019	(361)
2020	(395)
2021 - 2025	$ (429)

XML

Long-Term Debt (Tables)

12 Months Ended

Aug. 31, 2015

Debt Disclosure [Abstract]

Summary of Long-Term Debt

A summary of long-term debt is as follows:

	August 31,
	2015		2014
	(in thousands)
Long-term debt:
10.50% Senior Secured Notes due February 28, 2018, net of unamortized discount of $3,791 and $5,036, respectively	$	233,459	$	232,214
Other long-term debt		7,208		7,311
		240,667		239,525
Less: Current installments of long-term debt		1,556		1,551
Total long-term debt, less current installments	$	239,111	$	237,974

Principal Amount of Long-Term Debt Maturity

The principal amount of long-term debt matures as follows:

	Year ended August 31,
	(in thousands)
2016	$	1,556
2017		1,071
2018		237,676
2019		345
2020		279
Thereafter		3,531
		244,458
Unamortized discount		3,791
Total	$	240,667

Schedule of Deferred Financing Costs Amortized to Expense

The following financing costs have been deferred and are being amortized to expense over the term of the related debt:

	August 31,
	2015		2014
	(in thousands)
Beginning balance	$	8,881	$	8,881
Current year additions		320		—
Total financing costs		9,201		8,881
Less:
Accumulated amortization		6,534		5,306
	$	2,667	$	3,575

XML

Disclosures About Fair Value of Financial Instruments

12 Months Ended

Aug. 31, 2015

Fair Value Disclosures [Abstract]

Disclosures About Fair Value of Financial Instruments

12. Disclosures About Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

The carrying amount of cash and cash equivalents, trade accounts receivable, the revolving credit facility and current liabilities approximate fair value because of the short maturity of these instruments. Derivative financial instruments are recorded at fair value using significant other observable inputs (Level 2).

The fair value of long-term debt (See Note 9 to “Consolidated Financial Statements”) was determined using the fair market value of the individual debt instruments. As of August 31, 2015, the carrying amount and estimated fair value of these debt instruments approximated $240,667,000 and $257,303,000, respectively.