##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 Commission file number: 001-32567
 
 Alon USA Energy, Inc.
 (Exact name of Registrant as specified in its charter)
 
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    74-2966572(I.R.S. Employer
Identification No.)
 (Address of principal executive offices) (Zip Code)
 (Registrants telephone number, including area code)
 
 þ o
  o o þ
 o þ




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##### 



PART I. FINANCIAL INFORMATION
    
    
    1ITEM 1. FINANCIAL STATEMENTS
    
    
    1CONSOLIDATED BALANCE SHEETS
    
    
    1CONSOLIDATED STATEMENTS OF OPERATIONS
    
    
    2CONSOLIDATED STATEMENTS OF CASH FLOWS
    
    
    3NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    4ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    19FORWARD-LOOKING STATEMENTS
    
    
    19ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    46ITEM 4. CONTROLS AND PROCEDURES
    
    
    47PART II. OTHER INFORMATION
    
    
    48ITEM 6. EXHIBITS
    
    
    48SIGNATURESEXHIBITSFirst Amendment to Stock Purchase AgreementSecond Amendment to Stock Purchase AgreementCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO & CFO Pursuant to Section 906




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (dollars in thousands except per share data)
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    43,913
    
    
    $
    136,820Short-term investments
    
    
    
    
    
    
    185,320Accounts and other receivables, net
    
    
    243,834
    
    
    
    89,529Inventories
    
    
    276,772
    
    
    
    79,181Prepaid expenses and other current assets
    
    
    13,305
    
    
    
    6,264Total current assets
    
    
    577,824
    
    
    
    497,114Investment in subsidiaries
    
    
    38,869
    
    
    
    22,754Property, plant and equipment, net
    
    
    762,677
    
    
    
    211,410Other assets
    
    
    96,358
    
    
    
    27,502Total assets
    
    $
    1,475,728
    
    
    $
    758,780LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    250,069
    
    
    $
    157,076Accrued liabilities
    
    
    56,254
    
    
    
    48,128Current portion of deferred gain on disposition of assets
    
    
    10,400
    
    
    
    11,427Current portion of long-term debt
    
    
    14,929
    
    
    
    4,487Total current liabilities
    
    
    331,652
    
    
    
    221,118Other non-current liabilities
    
    
    50,110
    
    
    
    18,345Deferred gain on disposition of assets
    
    
    45,061
    
    
    
    52,433Long-term debt
    
    
    494,364
    
    
    
    127,903Deferred income tax liability
    
    
    270,789
    
    
    
    52,422Total liabilities
    
    
    1,191,976
    
    
    
    472,221Commitments and contingencies (note 15)Minority interest in subsidiaries
    
    
    8,428
    
    
    
    7,066Stockholders equity:Preferred stock, par value $0.01, 10,000,000 shares authorized; no
shares issued and outstanding
    
    
    
    
    
    
    Common stock, par value $0.01, 100,000,000 shares authorized; 46,806,443
and 46,809,857 shares issued and outstanding at September 30, 2006 and
December 31, 2005, respectively
    
    
    468
    
    
    
    468Additional paid-in capital
    
    
    181,494
    
    
    
    181,108Accumulated other comprehensive loss, net of income tax
    
    
    (2,596
    )
    
    
    (2,596
    )Retained earnings
    
    
    95,958
    
    
    
    100,513Total stockholders equity
    
    
    275,324
    
    
    
    279,493Total liabilities and stockholders equity
    
    $
    1,475,728
    
    
    $
    758,780
  1




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited, dollars in thousands except earnings and cash dividends per share)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net sales
    
    $
    1,020,887
    
    
    $
    648,135
    
    
    $
    2,277,850
    
    
    $
    1,646,475Operating costs and expenses:Cost of sales
    
    
    881,998
    
    
    
    565,820
    
    
    
    1,936,514
    
    
    
    1,415,421Direct operating expenses
    
    
    35,579
    
    
    
    24,550
    
    
    
    81,014
    
    
    
    63,259Selling, general and administrative
expenses
    
    
    24,298
    
    
    
    16,083
    
    
    
    62,105
    
    
    
    51,731Depreciation and amortization
    
    
    9,551
    
    
    
    5,470
    
    
    
    20,482
    
    
    
    15,322Total operating costs and expenses
    
    
    951,426
    
    
    
    611,923
    
    
    
    2,100,115
    
    
    
    1,545,733Gain on disposition of assets
    
    
    2,304
    
    
    
    8,020
    
    
    
    59,969
    
    
    
    37,243Operating income
    
    
    71,765
    
    
    
    44,232
    
    
    
    237,704
    
    
    
    137,985Interest expense
    
    
    (9,755
    )
    
    
    (4,827
    )
    
    
    (20,151
    )
    
    
    (14,579
    )Equity earnings in subsidiaries
    
    
    1,422
    
    
    
    321
    
    
    
    2,175
    
    
    
    733Other income, net
    
    
    2,147
    
    
    
    1,269
    
    
    
    6,248
    
    
    
    2,349Income before income tax expense and
minority interest in income of subsidiaries
    
    
    65,579
    
    
    
    40,995
    
    
    
    225,976
    
    
    
    126,488Income tax expense
    
    
    25,219
    
    
    
    16,225
    
    
    
    83,352
    
    
    
    48,234Income before minority interest in income of
subsidiaries
    
    
    40,360
    
    
    
    24,770
    
    
    
    142,624
    
    
    
    78,254Minority interest in income of subsidiaries
    
    
    2,217
    
    
    
    382
    
    
    
    7,226
    
    
    
    3,948Net income
    
    $
    38,143
    
    
    $
    24,388
    
    
    $
    135,398
    
    
    $
    74,306Earnings per share
    
    $
    0.82
    
    
    $
    0.57
    
    
    $
    2.90
    
    
    $
    1.98Weighted average shares outstanding
    
    
    46,736,967
    
    
    
    42,821,120
    
    
    
    46,733,699
    
    
    
    37,607,787Cash dividends per share
    
    $
    2.54
    
    
    $
    1.96
    
    
    $
    2.99
    
    
    $
    1.96
  2




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited, dollars in thousands)
 For the Nine Months EndedSeptember 30,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    135,398
    
    
    $
    74,306Adjustments to reconcile net income to cash provided by operating activities:Depreciation and amortization
    
    
    20,482
    
    
    
    15,322Stock compensation
    
    
    2,123
    
    
    
    1,693Deferred income tax expense
    
    
    22,658
    
    
    
    14,599Minority interest in income of subsidiaries
    
    
    7,226
    
    
    
    3,948Equity earnings in subsidiaries (net of dividends)
    
    
    (375
    )
    
    
    Gain on disposition of assets
    
    
    (59,969
    )
    
    
    (37,243
    )Changes in operating assets and liabilities, net of acquisition effects:Accounts and other receivables, net
    
    
    (48,300
    )
    
    
    (43,355
    )Inventories
    
    
    7,576
    
    
    
    (18,414
    )Prepaid expenses and other current assets
    
    
    12,559
    
    
    
    (5,069
    )Other assets
    
    
    14,984
    
    
    
    2,331Accounts payable
    
    
    (14,042
    )
    
    
    35,704Accrued liabilities
    
    
    (21,334
    )
    
    
    (7,889
    )Other non-current liabilities
    
    
    9,442
    
    
    
    (3,451
    )Net cash provided by operating activities
    
    
    88,428
    
    
    
    32,482Cash flows from investing activities:Capital expenditures
    
    
    (27,378
    )
    
    
    (17,568
    )Turnaround and chemical catalyst expenditures
    
    
    (2,990
    )
    
    
    (11,371
    )Proceeds from disposition of assets, net
    
    
    68,000
    
    
    
    118,000Acquisition of assets from Good Time Stores
    
    
    (27,024
    )
    
    
    Acquisition of Paramount Petroleum stock
    
    
    (504,381
    )
    
    
    Acquisition of assets from Edgington Oil Company
    
    
    (92,976
    )
    
    
    Sale (purchase) of short-term investments, net
    
    
    185,320
    
    
    
    (29,675
    )Dividends from investment in HEP (net of equity earnings)
    
    
    
    
    
    
    322Minority interest shares purchased
    
    
    (186
    )
    
    
    (5,098
    )Net cash (used in) provided by investing activities
    
    
    (401,615
    )
    
    
    54,610Cash flows from financing activities:Payments received for shares issued, net
    
    
    
    
    
    
    172,287Dividends paid to minority interest stockholders
    
    
    (7,863
    )
    
    
    (6,134
    )Dividends paid to stockholders
    
    
    (139,953
    )
    
    
    (68,479
    )Deferred debt issuance costs
    
    
    (8,807
    )
    
    
    Revolving credit facility, net
    
    
    8,134
    
    
    
    Additions to long-term debt
    
    
    500,000
    
    
    
    2,936Payments on long-term debt
    
    
    (131,231
    )
    
    
    (57,765
    )Net cash provided by financing activities
    
    
    220,280
    
    
    
    42,845Net change in cash and cash equivalents
    
    
    (92,907
    )
    
    
    129,937Cash and cash equivalents, beginning of period
    
    
    136,820
    
    
    
    63,357Cash and cash equivalents, end of period
    
    $
    43,913
    
    
    $
    193,294Supplemental cash flow information:Cash paid for interest
    
    $
    12,096
    
    
    $
    13,283Cash paid for income tax
    
    $
    51,172
    
    
    $
    21,467Non-cash activities:Investing activity  receipt of Class B HEP subordinated units as proceeds
from disposition of assets
    
    $
    
    
    
    $
    30,000
  3




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
 (1) Basis of Presentation and Certain Significant Accounting Policies
 (a) Basis of Presentation
   (b) Revenue Recognition
 Accounting for
Purchases and Sales of Inventory with the Same Counterparty
   (c) New Accounting Standards
 Share-Based Payment
 4




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ALON USA ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands except as noted)
    Application of FASB
Statement No. 109, Accounting for Income Taxes, for the Tax Deduction Provided to U.S. Based
Manufacturers by the American Jobs Creation Act of 2004 Accounting for Income
Taxes
 Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109
 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans
 SEC Staff Guidance  Qualifying Financial Statement Misstatements
 5




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ALON USA ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands except as noted)
 (2) Acquisitions
 Good Time Stores Acquisition
    Cash paid
    
    $
    26,043Transaction costs
    
    
    981Total Purchase Price
    
    $
    27,024
  Inventories
    
    $
    2,349Property, plant and equipment
    
    
    5,014Intangible assets
    
    
    4,000Goodwill
    
    
    15,661Total Purchase Price
    
    $
    27,024
  Paramount Acquisition
   Cash paid, less unrestricted cash acquired
    
    $
    501,056Transaction costs
    
    
    3,325Total Purchase Price
    
    $
    504,381
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ALON USA ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands except as noted)
  Current assets, net of unrestricted cash acquired
    
    $
    301,537Property, plant and equipment
    
    
    495,064Deferred charges and other assets
    
    
    11,203Equity investment in subsidiaries
    
    
    15,836Goodwill
    
    
    33,333Current liabilities, excluding debt
    
    
    (135,817
    )Deferred income tax liability
    
    
    (194,138
    )Other liabilities
    
    
    (22,637
    )Total Purchase Price
    
    $
    504,381
  Unaudited Pro Forma Financial Information
  
    
    The acquisition of Paramount occurred on January 1, 2005;
    
    $400,000 of term debt was incurred to fund the Paramount
acquisition on January 1, 2005 and existing Paramount debt was
repaid on this date; and
    
    Depreciation expense was higher beginning January 1, 2005 for the
higher estimated asset values as of that date.
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005Net sales
    
    $
    1,149,819
    
    
    $
    949,218
    
    
    $
    3,138,100
    
    
    $
    2,420,375Operating income
    
    
    60,853
    
    
    
    42,533
    
    
    
    247,256
    
    
    
    138,134Net income
    
    
    30,026
    
    
    
    19,030
    
    
    
    131,422
    
    
    
    61,578Earnings per share
    
    $
    0.64
    
    
    $
    0.44
    
    
    $
    2.81
    
    
    $
    1.64
 Edgington Acquisition
  7




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ALON USA ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands except as noted)
  Cash paid
    
    $
    92,405Transaction costs
    
    
    571Total Purchase Price
    
    $
    92,976
  Current assets, net of unrestricted cash acquired
    
    $
    1,000Inventories
    
    
    34,405Property, plant and equipment
    
    
    57,571Total Purchase Price
    
    $
    92,976
  (3) Sale of Amdel and White Oil Pipelines
  (4) Segment Data
  (a) Refining and Marketing Segment
  8




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ALON USA ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands except as noted)
  (b) Asphalt Segment
  (c) Retail Segment
  (d) Corporate
   Refining and
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConsolidatedThree Months ended September 30, 2006
    
    Marketing
    
    Asphalt
    
    Retail
    
    Corporate
    
    TotalNet sales to external customers
    
    $
    753,834
    
    
    $
    162,187
    
    
    $
    104,866
    
    
    $
    
    
    
    $
    1,020,887Intersegment sales/purchases
    
    
    51,329
    
    
    
    (8,711
    )
    
    
    (42,618
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    6,954
    
    
    
    334
    
    
    
    1,927
    
    
    
    336
    
    
    
    9,551Operating income (loss)
    
    
    66,328
    
    
    
    5,097
    
    
    
    798
    
    
    
    (458
    )
    
    
    71,765Total assets
    
    
    1,105,564
    
    
    
    260,825
    
    
    
    96,116
    
    
    
    13,223
    
    
    
    1,475,728Turnaround, chemical catalyst and
capital expenditures
    
    
    2,208
    
    
    
    1,032
    
    
    
    953
    
    
    
    85
    
    
    
    4,278
 Refining and
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConsolidatedThree Months ended September 30, 2005
    
    Marketing
    
    Asphalt
    
    Retail
    
    Corporate
    
    TotalNet sales to external customers
    
    $
    522,013
    
    
    $
    36,658
    
    
    $
    89,464
    
    
    $
    
    
    
    $
    648,135Intersegment sales/purchases
    
    
    41,816
    
    
    
    
    
    
    
    (41,816
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    3,850
    
    
    
    56
    
    
    
    1,087
    
    
    
    477
    
    
    
    5,470Operating income (loss)
    
    
    48,681
    
    
    
    (6,036
    )
    
    
    2,191
    
    
    
    (604
    )
    
    
    44,232Total assets
    
    
    597,303
    
    
    
    22,155
    
    
    
    72,188
    
    
    
    12,137
    
    
    
    703,783Turnaround, chemical catalyst and capital expenditures
    
    
    740
    
    
    
    44
    
    
    
    873
    
    
    
    42
    
    
    
    1,699
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ALON USA ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands except as noted)
 Refining and
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConsolidatedNine Months ended September 30, 2006
    
    Marketing
    
    Asphalt
    
    Retail
    
    Corporate
    
    TotalNet sales to external customers
    
    $
    1,790,686
    
    
    $
    222,868
    
    
    $
    264,296
    
    
    $
    
    
    
    $
    2,277,850Intersegment sales/purchases
    
    
    121,803
    
    
    
    (8,711
    )
    
    
    (113,092
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    14,478
    
    
    
    456
    
    
    
    4,191
    
    
    
    1,357
    
    
    
    20,482Operating income (loss)
    
    
    234,635
    
    
    
    2,709
    
    
    
    2,061
    
    
    
    (1,701
    )
    
    
    237,704Total assets
    
    
    1,105,564
    
    
    
    260,825
    
    
    
    96,116
    
    
    
    13,223
    
    
    
    1,475,728Turnaround, chemical catalyst and
capital expenditures
    
    
    25,680
    
    
    
    1,400
    
    
    
    3,127
    
    
    
    161
    
    
    
    30,368
 Refining and
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConsolidatedNine Months ended September 30, 2005
    
    Marketing
    
    Asphalt
    
    Retail
    
    Corporate
    
    TotalNet sales to external customers
    
    $
    1,319,595
    
    
    $
    76,336
    
    
    $
    250,544
    
    
    $
    
    
    
    $
    1,646,475Intersegment sales/purchases
    
    
    114,307
    
    
    
    (43
    )
    
    
    (114,264
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    10,629
    
    
    
    77
    
    
    
    3,190
    
    
    
    1,426
    
    
    
    15,322Operating income (loss)
    
    
    144,829
    
    
    
    (8,017
    )
    
    
    2,982
    
    
    
    (1,809
    )
    
    
    137,985Total assets
    
    
    597,303
    
    
    
    22,155
    
    
    
    72,188
    
    
    
    12,137
    
    
    
    703,783Turnaround, chemical catalyst and
capital expenditures
    
    
    25,664
    
    
    
    170
    
    
    
    2,903
    
    
    
    202
    
    
    
    28,939
   (5) Cash, Cash Equivalents and Short-Term Investments
    (6) Derivatives and Hedging Activities
 (a) Fair Value of Financial Instruments
  10




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ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  (b) Derivative Financial Instruments
      (7) Inventories
  11




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ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  September 30,
    
    
    December 31,2006
    
    
    2005Crude oil, refined products, asphalt and blendstocks
    
    $
    251,185
    
    
    $
    57,822Materials and supplies
    
    
    6,232
    
    
    
    5,880Store merchandise
    
    
    15,444
    
    
    
    12,977Store fuel
    
    
    3,911
    
    
    
    2,502Total inventories
    
    $
    276,772
    
    
    $
    79,181
   (8) Property, Plant and Equipment, net
  September 30,
    
    
    December 31,2006
    
    
    2005Refining facilities
    
    $
    713,884
    
    
    $
    171,346Pipelines and terminals
    
    
    40,000
    
    
    
    27,237Retail
    
    
    72,231
    
    
    
    63,486Other
    
    
    10,674
    
    
    
    10,691Property, plant and equipment, gross
    
    
    836,789
    
    
    
    272,760Less accumulated depreciation
    
    
    (74,112
    )
    
    
    (61,350
    )Property, plant and equipment, net
    
    $
    762,677
    
    
    $
    211,410
   12




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ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
 (9) Other Assets
  September 30,
    
    
    December 31,2006
    
    
    2005Deferred turnaround and chemical catalyst expenditures
    
    $
    16,706
    
    
    $
    9,865Environmental receivables
    
    
    12,476
    
    
    
    3,257Deferred debt issuance costs
    
    
    8,722
    
    
    
    6,529Goodwill
    
    
    48,994
    
    
    
    Intangible assets
    
    
    4,000
    
    
    
    Other
    
    
    5,460
    
    
    
    7,851Total other assets
    
    $
    96,358
    
    
    $
    27,502
 (10) Employee and Postretirement Benefits
   For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Components of net periodic benefit cost:Service cost
    
    $
    478
    
    
    $
    382
    
    
    $
    1,434
    
    
    $
    1,075Interest cost
    
    
    608
    
    
    
    535
    
    
    
    1,824
    
    
    
    1,492Expected return on plan assets
    
    
    (592
    )
    
    
    (414
    )
    
    
    (1,778
    )
    
    
    (1,241
    )Amortization of net loss
    
    
    82
    
    
    
    181
    
    
    
    248
    
    
    
    513Net periodic benefit cost
    
    $
    576
    
    
    $
    684
    
    
    $
    1,728
    
    
    $
    1,839
 (11) Long-Term Debt
 (a) Revolving Credit Facility
   13




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##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
    (b) Debt Repayments
   (c) Wachovia
     14




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##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  (d) Credit Suisse
      (e) Revolving Credit Facility  Paramount
   (12) Stock Based Compensation
  15




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##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
 (a) 2005 Incentive Compensation Plan (share value in dollars)
    Weighted AverageNonvested Shares
    
    Shares
    
    
    Grant Date Fair ValuesNonvested at January 1, 2006
    
    
    78,737
    
    
    $
    19.73Granted
    
    
    2,253
    
    
    
    33.29Vested
    
    
    (2,833
    )
    
    
    20.42Forfeited
    
    
    (5,667
    )
    
    
    20.42Nonvested at September 30, 2006
    
    
    72,490
    
    
    $
    20.07
  (b) 2000 Incentive Stock Compensation Plan
  16




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##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  Alon Assets
    
    
    Alon OperatingWeighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    Average
    
    
    Number of
    
    
    AverageOptions
    
    
    Exercise
    
    
    Options
    
    
    ExerciseOutstanding
    
    
    Price
    
    
    Outstanding
    
    
    PriceOutstanding at January 1, 2004
    
    
    12,217
    
    
    $
    100
    
    
    
    4,587
    
    
    $
    100Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (1,212
    )
    
    
    100
    
    
    
    (455
    )
    
    
    100Forfeited and expired
    
    
    (1,733
    )
    
    
    100
    
    
    
    (650
    )
    
    
    100Outstanding at December 31, 2004
    
    
    9,272
    
    
    
    100
    
    
    
    3,482
    
    
    
    100Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (1,212
    )
    
    
    100
    
    
    
    (455
    )
    
    
    100Outstanding at December 31, 2005
    
    
    8,060
    
    
    
    100
    
    
    
    3,027
    
    
    
    100Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (1,212
    )
    
    
    100
    
    
    
    (455
    )
    
    
    100Outstanding at September 30, 2006
    
    
    6,848
    
    
    $
    100
    
    
    
    2,572
    
    
    $
    100
 (13) Stockholders Equity (per share in dollars)
 Common Stock Dividends
  (14) Earnings Per Share (earnings per share in dollars)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income
    
    $
    38,143
    
    
    $
    24,388
    
    
    $
    135,398
    
    
    $
    74,306Average number of shares of common stock outstanding
    
    
    46,737
    
    
    
    42,821
    
    
    
    46,734
    
    
    
    37,608Effect of dilutive restricted shares
    
    
    52
    
    
    
    
    
    
    
    42
    
    
    
    Average number of shares of common stock
outstanding assuming dilution
    
    
    46,789
    
    
    
    42,821
    
    
    
    46,776
    
    
    
    37,608Earnings per share  basic
    
    $
    0.82
    
    
    $
    0.57
    
    
    $
    2.90
    
    
    $
    1.98Earnings per share  diluted
    
    $
    0.82
    
    
    $
    0.57
    
    
    $
    2.89
    
    
    $
    1.98
 17




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ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
 (15) Commitments and Contingencies
 (a) Other Commitments
  (b) Other Contingencies
  (c) Environmental
   (16) Subsequent Event
  
 18




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 The following discussion of our financial condition and results of operations should be read
in conjunction with the audited consolidated financial statements and notes thereto included in
Alons Annual Report on Form 10-K for the year ended December 31, 2005. In this document, the
words Alon, the Company, we and our refer to Alon USA Energy, Inc. and its subsidiaries.
 
 FORWARD-LOOKING STATEMENTS
    
    
    the synergies and accretion to reported earnings estimated to result from our acquisitions of Paramount Petroleum
Corporation (Paramount) and Edgington Oil Company (Edgington) may not be realized;
 
    
    our ability to successfully integrate the operations and employees of Paramount and Edgington and the timing of such
integration;
 
    
    expected cost savings from the Paramount and Edgington acquisitions may not be fully realized or recognized within the
expected time frame, and costs or expenses relating to the acquisitions may be higher than expected;
 
    
    revenues or margins following the Paramount and Edgington acquisitions may be lower than expected;
 
    
    changes in general economic conditions and capital markets;
 
    
    changes in the underlying demand for our products;
 
    
    the availability, costs and price volatility of crude oil, other refinery feedstocks and refined products;
 
    
    changes in the sweet/sour and light/heavy crude oil spreads;
 
    
    actions of customers and competitors;
 
    
    changes in fuel and utility costs incurred by our facilities;
 
    
    disruptions due to equipment interruption, pipeline disruptions or failure at our or third-party facilities;
 
    
    the execution of planned capital projects;
 
    
    adverse changes in the credit ratings assigned to our trade credit and debt instruments;
 19




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##### Table of Contents




    
    the effects of and cost of compliance with current and future state and federal environmental, economic, safety and
other laws, policies and regulations;
 
    
    operating hazards, natural disasters, casualty losses and other matters beyond our control; and
 
    
    the other factors discussed in our annual report on Form 10-K for the year ended December 31, 2005 under the caption
Risk Factors.
  Company Overview
  Refining and Marketing Segment
   Asphalt Segment.
 Retail Segment
 20




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##### Table of Contents



Third Quarter Overview
 Operational Highlights
  
    
    Our average refinery operating margin for the Big Spring refinery
increased by $1.73 per barrel to $14.78 per barrel for the three
months ended September 30, 2006, compared to the three months
ended September 30, 2005. Our average refinery operating margin
increased $3.04 per barrel to $14.93 per barrel for the first nine
months of 2006, compared to the first nine months of 2005.
 
    
    Refinery production at our Big Spring refinery increased to 68,023
barrels per day (bpd) in the third quarter of 2006 compared to
66,747 bpd for the third quarter of 2005. Refinery production at
our Big Spring refinery for the nine month period ended September
30, 2006 averaged 64,443 bpd compared to 61,875 bpd for the nine
month period ended September 30, 2005.
 
    
    The average sweet/sour spread for the three months ended September
30, 2006 was $4.44 per barrel compared to $4.09 per barrel for the
three months ended September 30, 2005. The average sweet/sour
spread for the first nine months of 2006 was $5.23 per barrel
compared to $4.30 per barrel for the first nine months of 2005.
The average light/heavy spread for the three months ended
September 30, 2006 was $14.80 per barrel compared to $15.46 per
barrel for the three months ended September 30, 2005. The average
light/heavy spread for the first nine months of 2006 was $15.33
per barrel compared to $15.16 per barrel for the first nine months
of 2005.
 
    
    Our capital expenditures and turnaround spending for the three
months ended September 30, 2006 totaled approximately $4.3
million. Our capital expenditures and turnaround spending for the
nine months ended September 30, 2006 totaled approximately $30.4
million, of which approximately $12.0 million related to the ultra
low sulfur diesel turnaround and $3.0 million was spent on a
chemical catalyst.
 
    
    On September 14, 2006, we paid a regular quarterly cash dividend
of $0.04 per share and a special cash dividend of $2.50 per share
on our common stock to stockholders of record at the close of
business on September 1, 2006. In conjunction with our special
cash dividend payment to stockholders on September 14, 2006, the
minority interest owners of Alon Assets and Alon Operating
received an aggregate cash dividend of approximately $6.7 million.
 Retail Convenience Stores Acquisition
   21




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##### Table of Contents



Refinery Acquisitions
 Paramount Acquisition.
 Edgington Acquisition.
 Fourth Quarter 2006 Developments
 Crude Pipeline Arrangement
  Major Influences on Results of Operations
 Refining and Marketing
 Refining and Marketing Margins
 3/2/1 Crack Spread
 Sweet/Sour Spread
 Light/Heavy Spread
 22




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##### Table of Contents



Operating Costs.
 Seasonality.
 Safety and Reliability.
 Inventory
 Retail
  Factors Affecting Comparability
  Refinery Acquisitions
 Refinery Turnaround
 Increased Crude Oil Throughput Capacity
 23




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##### Table of Contents



Amdel and White Oil Pipeline Transaction
 Unscheduled Turnaround
 Hurricane Activity
 Results of Operations
 Net Sales
 Cost of Sales
 Direct Operating Expenses.
 Selling, General and Administrative Expenses
 24




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ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
 Summary Financial Tables
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands, except earnings andcash dividends per share data)STATEMENT OF OPERATIONS DATA:Net sales
    
    $
    1,020,887
    
    
    $
    648,135
    
    
    $
    2,277,850
    
    
    $
    1,646,475Operating costs and expenses:Cost of sales
    
    
    881,998
    
    
    
    565,820
    
    
    
    1,936,514
    
    
    
    1,415,421Direct operating expenses
    
    
    35,579
    
    
    
    24,550
    
    
    
    81,014
    
    
    
    63,259Selling, general and administrative expenses (1)
    
    
    24,298
    
    
    
    16,083
    
    
    
    62,105
    
    
    
    51,731Depreciation and amortization (2)
    
    
    9,551
    
    
    
    5,470
    
    
    
    20,482
    
    
    
    15,322Total operating costs and expenses
    
    
    951,426
    
    
    
    611,923
    
    
    
    2,100,115
    
    
    
    1,545,733Gain on disposition of assets (3)
    
    
    2,304
    
    
    
    8,020
    
    
    
    59,969
    
    
    
    37,243Operating income
    
    
    71,765
    
    
    
    44,232
    
    
    
    237,704
    
    
    
    137,985Interest expense (4)
    
    
    (9,755
    )
    
    
    (4,827
    )
    
    
    (20,151
    )
    
    
    (14,579
    )Equity earnings in subsidiaries
    
    
    1,422
    
    
    
    321
    
    
    
    2,175
    
    
    
    733Other income, net
    
    
    2,147
    
    
    
    1,269
    
    
    
    6,248
    
    
    
    2,349Income before income tax expense and minority interest
in income of subsidiaries
    
    
    65,579
    
    
    
    40,995
    
    
    
    225,976
    
    
    
    126,488Income tax expense
    
    
    25,219
    
    
    
    16,225
    
    
    
    83,352
    
    
    
    48,234Income before minority interest in income of subsidiaries
    
    
    40,360
    
    
    
    24,770
    
    
    
    142,624
    
    
    
    78,254Minority interest in income of subsidiaries
    
    
    2,217
    
    
    
    382
    
    
    
    7,226
    
    
    
    3,948Net income
    
    $
    38,143
    
    
    $
    24,388
    
    
    $
    135,398
    
    
    $
    74,306Earnings per share (5)
    
    $
    0.82
    
    
    $
    0.57
    
    
    $
    2.90
    
    
    $
    1.98Weighted average shares outstanding (5)
    
    
    46,736,967
    
    
    
    42,821,120
    
    
    
    46,733,699
    
    
    
    37,607,787Cash dividends per share
    
    $
    2.54
    
    
    $
    1.96
    
    
    $
    2.99
    
    
    $
    1.96CASH FLOW DATA:Net cash provided by (used in):Operating activities
    
    $
    93,138
    
    
    $
    (16,906
    )
    
    $
    88,428
    
    
    $
    32,482Investing activities
    
    
    (597,223
    )
    
    
    (33,537
    )
    
    
    (401,615
    )
    
    
    54,610Financing activities
    
    
    343,650
    
    
    
    75,191
    
    
    
    220,280
    
    
    
    42,845OTHER DATA:Adjusted EBITDA (6)
    
    $
    82,581
    
    
    $
    43,272
    
    
    $
    206,640
    
    
    $
    119,146Capital expenditures (7)
    
    
    4,213
    
    
    
    1,109
    
    
    
    27,378
    
    
    
    17,568Capital expenditures for turnaround and chemical catalyst
    
    
    65
    
    
    
    590
    
    
    
    2,990
    
    
    
    11,371
 25




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##### Table of Contents



September 30,
    
    December 31,2006
    
    2005BALANCE SHEET DATA (end of period):Cash, cash equivalents and short-term investments
    
    $
    43,913
    
    
    $
    322,140Working capital
    
    
    246,172
    
    
    
    275,996Total assets
    
    
    1,475,728
    
    
    
    758,780Total debt
    
    
    509,293
    
    
    
    132,390Total stockholders equity (8)
    
    
    275,324
    
    
    
    279,493
 
 (1)
    
    Includes corporate headquarters selling, general and administrative expenses of
$122 and $127 for the three months ended September 30, 2006 and 2005, respectively, and
$344 and $383 for the nine months ended September 30, 2006 and 2005, respectively,
which are not allocated to our three operating segments.(2)
    
    Includes corporate depreciation and amortization of $336 and $477 for the three
months ended September 30, 2006 and 2005, respectively, and $1,357 and $1,426 for the
nine months ended September 30, 2006 and 2005, respectively, which are not allocated to
our three operating segments.(3)
    
    Gain on disposition of assets reported in the nine months ended September 30,
2006, reflects the $52.5 million pre-tax gain on disposition of assets, recorded in
connection with the Amdel and White Oil transaction and the recognition of $7.5 million
deferred gain recorded in connection with the HEP transaction. Gain on disposition of
assets reported in the nine months ended September 30, 2005, reflects the $26.7 million
initial pre-tax gain and $10.5 million deferred gain recorded in connection with the
HEP transaction. Gain on disposition of assets reported in the third quarter ended
September 30, 2006 and 2005, reflects $2.3 million and $8.1 million, respectively, of
deferred gain recorded in connection with the HEP transaction.(4)
    
    Interest expense for the nine months ended September 30, 2006, includes $3.0
million prepayment premium and $3.9 million of unamortized debt issuance costs written
off as a result of the prepayment of the $100 million term loan in January 2006.
Additionally, we prepaid $30.2 million of retail debt in July 2006. This resulted in
the write-off of $2.2 million of unamortized debt issuance costs and $0.6 million in
prepayment premiums both of which were recorded to interest expense in the third
quarter of 2006.(5)
    
    Weighted average common shares outstanding and earnings per common share
amounts for the three and nine months ended September 30, 2005 have been restated to
reflect the effect of the 33,600-for-one split of our common stock which was effective
on July 6, 2005. 26




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##### Table of Contents



(6)
    
    EBITDA represents earnings before minority interest in income of subsidiaries, income
tax expense, interest expense, depreciation and amortization. Adjusted EBITDA
represents EBITDA, exclusive of gain on disposition of assets. EBITDA and Adjusted
EBITDA are not recognized measurements under GAAP; however, the amounts included in
EBITDA and Adjusted EBITDA are derived from amounts included in our consolidated
financial statements. Our management believes that the presentation of Adjusted EBITDA
is useful to investors because it is frequently used by securities analysts, investors
and other interested parties in the evaluation of companies in our industry. In
addition, our management believes that Adjusted EBITDA is useful in evaluating our
operating performance compared to that of other companies in our industry because the
calculation of Adjusted EBITDA generally eliminates the effects of minority interest in
income of subsidiaries, income tax expense, interest expense, gain on disposition of
assets and the accounting effects of capital expenditures and acquisitions, items which
may vary for different companies for reasons unrelated to overall operating performance.
EBITDA is the basis for calculating selected financial ratios as required in the debt
covenants in our revolving credit agreement. See Liquidity and Capital ResourcesCash
Position and Indebtedness.Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in
isolation, or as a substitute for analysis of our results as reported under GAAP. Some
of these limitations are: 
    
    Adjusted EBITDA does not reflect our cash expenditures or future requirements
for capital expenditures or contractual commitments;
    
    Adjusted EBITDA does not reflect the interest expense or the cash requirements
necessary to service interest or principal payments on our debt;
    
    Adjusted EBITDA does not reflect the prior claim that minority stockholders have
on the income generated by non-wholly-owned subsidiaries;
    
    Adjusted EBITDA does not reflect changes in or cash requirements for our working
capital needs; and
    
    Our calculation of Adjusted EBITDA may differ from the EBITDA calculations of
other companies in our industry, limiting its usefulness as a comparative measure.
  27




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For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,(dollars in thousands)2006
    
    
    2005
    
    
    2006
    
    
    2005Net income
    
    $
    38,143
    
    
    $
    24,388
    
    
    $
    135,398
    
    
    $
    74,306Minority interest in income of subsidiaries
    
    
    2,217
    
    
    
    382
    
    
    
    7,226
    
    
    
    3,948Income tax expense
    
    
    25,219
    
    
    
    16,225
    
    
    
    83,352
    
    
    
    48,234Interest expense
    
    
    9,755
    
    
    
    4,827
    
    
    
    20,151
    
    
    
    14,579Depreciation and amortization
    
    
    9,551
    
    
    
    5,470
    
    
    
    20,482
    
    
    
    15,322EBITDA
    
    
    84,885
    
    
    
    51,292
    
    
    
    266,609
    
    
    
    156,389Gain on disposition of assets
    
    
    (2,304
    )
    
    
    (8,020
    )
    
    
    (59,969
    )
    
    
    (37,243
    )Adjusted EBITDA
    
    $
    82,581
    
    
    $
    43,272
    
    
    $
    206,640
    
    
    $
    119,146
 (7)
    
    Includes corporate capital expenditures of $85 and $42 for the three months
ended September 30, 2006 and 2005, respectively, and $161 and $202 for the nine months
ended September 30, 2006 and 2005, respectively, which are not allocated to our other
three operating segments.(8)
    
    The stockholders equity as of September 30, 2006 includes the effect of
dividend distributions of approximately $140 million during the nine months ended
September 30, 2006. 28




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REFINING AND MARKETING SEGMENT
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands, except per barrel data and pricing statistics)STATEMENTS OF OPERATIONS DATA:Net sales (1) (2)
    
    $
    805,163
    
    
    $
    563,829
    
    
    $
    1,912,489
    
    
    $
    1,433,859Operating costs and expenses:Cost of sales (2)
    
    
    702,914
    
    
    
    493,398
    
    
    
    1,640,141
    
    
    
    1,243,050Direct operating expenses
    
    
    27,074
    
    
    
    22,989
    
    
    
    69,334
    
    
    
    59,392Selling, general and administrative expenses
    
    
    4,197
    
    
    
    2,968
    
    
    
    13,870
    
    
    
    13,239Depreciation and amortization
    
    
    6,954
    
    
    
    3,850
    
    
    
    14,478
    
    
    
    10,629Total operating costs and expenses
    
    
    741,139
    
    
    
    523,205
    
    
    
    1,737,823
    
    
    
    1,326,310Gain on disposition of assets (3)
    
    
    2,304
    
    
    
    8,057
    
    
    
    59,969
    
    
    
    37,280Operating income
    
    $
    66,328
    
    
    $
    48,681
    
    
    $
    234,635
    
    
    $
    144,829KEY OPERATING STATISTICS:Total sales volume (bpd)
    
    
    112,114
    
    
    
    87,313
    
    
    
    92,733
    
    
    
    84,983Non-integrated marketing sales volume (bpd) (4)
    
    
    17,651
    
    
    
    21,154
    
    
    
    18,797
    
    
    
    20,590Non-integrated marketing margin (per barrel sales
volume) (4)
    
    $
    0.75
    
    
    $
    (4.98
    )
    
    $
    (0.18
    )
    
    $
    (1.94
    )Per barrel of throughput:Refinery operating margin  Big Spring (5)
    
    $
    14.78
    
    
    $
    13.05
    
    
    $
    14.93
    
    
    $
    11.89Refinery operating margin  Paramount (5)
    
    
    2.67
    
    
    
    
    
    
    
    2.67
    
    
    
    Refinery direct operating expenses  Big Spring
    
    
    2.98
    
    
    
    3.75
    
    
    
    3.43
    
    
    
    3.50Refinery direct operating expenses  Paramount
    
    
    2.94
    
    
    
    
    
    
    
    2.94
    
    
    
    Capital expenditures
    
    
    2,142
    
    
    
    150
    
    
    
    22,689
    
    
    
    14,293Capital expenditures for turnaround and chemical
catalyst
    
    
    66
    
    
    
    590
    
    
    
    2,991
    
    
    
    11,371PRICING STATISTICS:WTI crude oil (per barrel)
    
    $
    70.45
    
    
    $
    63.03
    
    
    $
    68.09
    
    
    $
    55.31WTS crude oil (per barrel)
    
    
    66.01
    
    
    
    58.94
    
    
    
    62.86
    
    
    
    51.01Crack spreads (3/2/1) (per barrel):Gulf Coast
    
    $
    13.38
    
    
    $
    17.13
    
    
    $
    13.78
    
    
    $
    11.37Group III
    
    
    18.30
    
    
    
    16.66
    
    
    
    15.83
    
    
    
    12.12West Coast
    
    
    24.60
    
    
    
    28.56
    
    
    
    26.45
    
    
    
    23.23Crude oil differentials (per barrel):WTI less WTS
    
    $
    4.44
    
    
    $
    4.09
    
    
    $
    5.23
    
    
    $
    4.30WTI less MAYA
    
    $
    14.80
    
    
    $
    15.46
    
    
    $
    15.33
    
    
    $
    15.16Product price (per gallon):Gulf Coast unleaded gasoline
    
    
    195.2
    ¢
    
    
    192.8
    ¢
    
    
    192.1
    ¢
    
    
    157.9
    ¢Gulf Coast low-sulfur diesel
    
    
    208.4
    
    
    
    187.0
    
    
    
    200.5
    
    
    
    160.5Group III unleaded gasoline
    
    
    205.1
    
    
    
    190.7
    
    
    
    196.3
    
    
    
    159.5Group III low-sulfur diesel
    
    
    223.7
    
    
    
    187.8
    
    
    
    206.9
    
    
    
    162.6West Coast LA Carbob (unleaded gasoline)
    
    
    231.5
    
    
    
    224.1
    
    
    
    230.6
    
    
    
    192.5West Coast LA ultra low-sulfur diesel
    
    
    216.0
    
    
    
    206.0
    
    
    
    214.2
    
    
    
    176.0Natural gas (per MMBTU)
    
    $
    6.18
    
    
    $
    9.73
    
    
    $
    6.89
    
    
    $
    7.75
 29




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##### Table of Contents



THROUGHPUT AND YIELD DATA: BIG SPRING
 For the Three Months Ended
    
    For the Nine Months EndedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005bpd
    
    %
    
    bpd
    
    %
    
    bpd
    
    %
    
    bpd
    
    %Refinery crude throughput:Sour crude
    
    
    62,961
    
    
    
    95.8
    
    
    
    55,757
    
    
    
    88.4
    
    
    
    58,241
    
    
    
    95.1
    
    
    
    52,862
    
    
    
    90.2Sweet crude
    
    
    2,728
    
    
    
    4.2
    
    
    
    7,286
    
    
    
    11.6
    
    
    
    3,033
    
    
    
    4.9
    
    
    
    5,732
    
    
    
    9.8Total crude throughput
    
    
    65,689
    
    
    
    100.0
    
    
    
    63,043
    
    
    
    100.0
    
    
    
    61,274
    
    
    
    100.0
    
    
    
    58,594
    
    
    
    100.0Blendstocks
    
    
    3,181
    
    
    
    
    
    
    
    3,669
    
    
    
    
    
    
    
    3,964
    
    
    
    
    
    
    
    3,565Total
refinery throughput (6)
    
    
    68,870
    
    
    
    
    
    
    
    66,712
    
    
    
    
    
    
    
    65,238
    
    
    
    
    
    
    
    62,159Refinery production (7):Gasoline
    
    
    30,347
    
    
    
    44.6
    
    
    
    29,934
    
    
    
    44.8
    
    
    
    29,139
    
    
    
    45.2
    
    
    
    27,643
    
    
    
    44.7Diesel/jet
    
    
    22,775
    
    
    
    33.5
    
    
    
    22,974
    
    
    
    34.4
    
    
    
    20,942
    
    
    
    32.5
    
    
    
    21,386
    
    
    
    34.6Asphalt
    
    
    6,740
    
    
    
    9.9
    
    
    
    6,976
    
    
    
    10.5
    
    
    
    6,301
    
    
    
    9.8
    
    
    
    5,892
    
    
    
    9.5Petrochemicals
    
    
    4,990
    
    
    
    7.3
    
    
    
    3,975
    
    
    
    6.0
    
    
    
    4,341
    
    
    
    6.7
    
    
    
    4,247
    
    
    
    6.9Other
    
    
    3,171
    
    
    
    4.7
    
    
    
    2,888
    
    
    
    4.3
    
    
    
    3,720
    
    
    
    5.8
    
    
    
    2,707
    
    
    
    4.4Total refinery production
    
    
    68,023
    
    
    
    100.0
    
    
    
    66,747
    
    
    
    100.0
    
    
    
    64,443
    
    
    
    100.0
    
    
    
    61,875
    
    
    
    100.0Refinery Utilization (8)
    
    
    
    
    
    
    93.8
    %
    
    
    
    
    
    
    92.9
    %
    
    
    
    
    
    
    91.5
    %
    
    
    
    
    
    
    93.8
    %
 THROUGHPUT AND YIELD DATA: PARAMOUNT
 For the Two Months EndedSeptember 30,2006bpd
    
    %Refinery crude throughput:Sour crude
    
    
    23,847
    
    
    
    52.0Heavy crude
    
    
    21,969
    
    
    
    48.0Total crude throughput
    
    
    45,816
    
    
    
    100.0Blendstocks
    
    
    (231
    )Total refinery throughput (6)
    
    
    45,585Refinery production (7):Gasoline
    
    
    5,677
    
    
    
    12.7Diesel/jet
    
    
    11,182
    
    
    
    25.0Asphalt
    
    
    15,130
    
    
    
    33.8Other
    
    
    12,748
    
    
    
    28.5Total refinery production
    
    
    44,737
    
    
    
    100.0Refinery Utilization (8)
    
    
    
    
    
    
    84.8
    %
 
 (1)
    
    Net sales include intersegment sales to our asphalt and retail segments at
prices which approximate wholesale market price. These intersegment sales are
eliminated through consolidation of our financial statements. Net sales for the nine
months ended September 30, 2006 includes $3.3 million for the sale of sulfur credits.
Following the acquisition of Paramount and Edgington, we notified the Environmental
Protection Agency that we no longer qualify as a small refiner which will limit our
ability to generate sulfur credits.(2)
    
    Our buy/sell arrangements involve linked purchases and sales related to refined
product contracts entered into to address location or grade requirements. As of
January 1, 2006, such buy/sell transactions are included on a net basis in sales in the
consolidated statements of operations and profits are recognized when the exchanged
product is sold. Prior to January 1, 2006, the results of buy/sell transactions were
recorded separately in sales and cost of sales in the consolidated statements of
operations. 30




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##### Table of Contents



(3)
    
    Gain on disposition of assets reported in the nine months ended September 30,
2006 reflects the $52.5 million pre-tax gain on disposition of assets, recorded in
connection with the Amdel and White Oil transaction and the recognition of $7.5
million deferred gain recorded in connection with the HEP transaction. Gain on
disposition of assets reported in the nine months ended September 30, 2005 reflects the
$26.7 million initial pre-tax gain and $10.5 million of deferred gain recorded in
connection with the HEP transaction.(4)
    
    The non-integrated marketing sales volume represents refined products sales to
our wholesale marketing customers located in our non-integrated region. The refined
products we sell in this region are obtained from third-party suppliers. The
non-integrated marketing margin represents the margin between the net sales and cost of
sales attributable to our non-integrated refined products sales volume, expressed on a
per barrel basis.(5)
    
    Refinery operating margin for Big Spring is a per barrel measurement calculated
by dividing the margin between net sales and cost of sales attributable to our refining
and marketing segment, exclusive of net sales and cost of sales relating to our
non-integrated system, by our Big Spring refinerys throughput volumes. Industry-wide
refining results are driven and measured by the margins between refined product prices
and the prices for crude oil, which are referred to as crack spreads. We compare our
refinery operating margins to these crack spreads to assess our operating performance
relative to other participants in our industry. The refinery operating margin for
Paramount is calculated by dividing the margin between the net sales and cost of sales
by the throughput volumes at the Paramount refinery. The refinery operating margin for
Paramount includes a non-cash charge of $10.6 million to cost of sales related to the
difference between the fair market value of inventories acquired from Paramount and our
recorded amounts under LIFO accounting attributable to those inventories. The refinery
operating margin for Paramount excluding this non-cash charge would have been $6.48.(6)
    
    Total refinery throughput represents the total barrels per day of crude oil and
blendstock inputs in the refinery production process.(7)
    
    Total refinery production represents the barrels per day of various finished
products produced from processing crude and other refinery feedstocks through the crude
units and other conversion units at the refinery.(8)
    
    Refinery utilization represents average daily crude oil throughput divided by
crude oil capacity, excluding planned periods of downtime for maintenance and
turnarounds. 31




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##### Table of Contents



ASPHALT SEGMENT
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    

Ended September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands, except per ton data)STATEMENTS OF OPERATIONS DATA:Net sales
    
    $
    162,187
    
    
    $
    36,658
    
    
    $
    222,868
    
    
    $
    76,336Operating costs and expensesCost of sales (1)
    
    
    143,131
    
    
    
    40,955
    
    
    
    200,471
    
    
    
    79,473Direct operating expenses
    
    
    8,505
    
    
    
    1,561
    
    
    
    11,680
    
    
    
    3,867Selling, general and administrative expenses
    
    
    5,120
    
    
    
    122
    
    
    
    7,552
    
    
    
    936Depreciation and amortization
    
    
    334
    
    
    
    56
    
    
    
    456
    
    
    
    77Total operating costs and expenses
    
    
    157,090
    
    
    
    42,694
    
    
    
    220,159
    
    
    
    84,353Gain on disposition of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income (loss)
    
    $
    5,097
    
    
    $
    (6,036
    )
    
    $
    2,709
    
    
    $
    (8,017
    )KEY OPERATING STATISTICS:Total sales volume (tons in thousands)
    
    
    472
    
    
    
    164
    
    
    
    693
    
    
    
    360Price per ton
    
    $
    343.92
    
    
    $
    223.62
    
    
    $
    322.07
    
    
    $
    239.31Asphalt margin per ton
    
    $
    40.37
    
    
    $
    (26.20
    )
    
    $
    32.32
    
    
    $
    (8.71
    )Capital expenditures
    
    $
    1,032
    
    
    $
    44
    
    
    $
    1,400
    
    
    $
    170
 
 (1)
    
    Cost of sales includes intersegment purchases of asphalt blends from our
refining and marketing segment at prices which approximate wholesale market price.
These intersegment purchases are eliminated through consolidation of our financial
statements. 32




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##### Table of Contents



RETAIL SEGMENT
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands, except per gallon data)STATEMENTS OF OPERATIONS DATA:Net sales
    
    $
    104,866
    
    
    $
    89,464
    
    
    $
    264,296
    
    
    $
    250,544Operating costs and expenses:Cost of sales (1)
    
    
    87,282
    
    
    
    73,283
    
    
    
    217,705
    
    
    
    207,162Selling, general and administrative expenses
    
    
    14,859
    
    
    
    12,866
    
    
    
    40,339
    
    
    
    37,173Depreciation and amortization
    
    
    1,927
    
    
    
    1,087
    
    
    
    4,191
    
    
    
    3,190Total operating costs and expenses
    
    
    104,068
    
    
    
    87,236
    
    
    
    262,235
    
    
    
    247,525Gain (loss) on disposition of assets
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (37
    )Operating income
    
    $
    798
    
    
    $
    2,191
    
    
    $
    2,061
    
    
    $
    2,982KEY OPERATING STATISTICS:Number of stores (end of period)
    
    
    207
    
    
    
    167
    
    
    
    207
    
    
    
    167Fuel sales (thousands of gallons)
    
    
    21,265
    
    
    
    21,706
    
    
    
    55,848
    
    
    
    69,772Fuel sales (thousands of gallons per site per month) (2)
    
    
    34
    
    
    
    44
    
    
    
    34
    
    
    
    47Fuel margin (cents per gallon) (3)
    
    
    15.0
    ¢
    
    
    20.4
    ¢
    
    
    16.3
    ¢
    
    
    14.3
    ¢Fuel sales price (dollars per gallon) (4)
    
    $
    2.83
    
    
    $
    2.49
    
    
    $
    2.67
    
    
    $
    2.15Merchandise sales
    
    $
    44,692
    
    
    $
    35,391
    
    
    $
    115,296
    
    
    $
    100,246Merchandise sales (per site per month) (2)
    
    
    72
    
    
    
    71
    
    
    
    62
    
    
    
    67Merchandise margin (5)
    
    
    32.2
    %
    
    
    33.2
    %
    
    
    32.5
    %
    
    
    33.3
    %Capital expenditures
    
    $
    953
    
    
    $
    873
    
    
    $
    3,127
    
    
    $
    2,903
 
 (1)
    
    Cost of sales includes intersegment purchases of motor fuels from our refining
and marketing segment at prices which approximate wholesale market price. These
intersegment purchases are eliminated through consolidation of our financial
statements.(2)
    
    Fuel and merchandise sales per site were adjusted to include 167 stores for six
months and 207 stores for nine months as a result of the 40 stores purchased on July 3,
2006.(3)
    
    Fuel margin represents the difference between motor fuel sales revenue and the
net cost of purchased motor fuel, including transportation costs and associated motor
fuel taxes, expressed on a cents per gallon basis. Motor fuel margins are frequently
used in the retail industry to measure operating results related to motor fuel sales.(4)
    
    Fuel sales price per gallon represents the average sales price for motor fuels
sold through our retail segment.(5)
    
    Merchandise margin represents the difference between merchandise sales revenue
and the delivered cost of merchandise purchases, net of rebates and commissions,
expressed as a percentage of merchandise sales revenues. Merchandise margins, also
referred to as in-store margins, are commonly used in the retail industry to measure
in-store, or non-fuel, operating results. 33




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##### Table of Contents



Three Months Ended September 30, 2006 Compared to the Three Months Ended September 30, 2005
 Net Sales
 Consolidated
 Refining and Marketing Segment
 Asphalt Segment
 Retail Segment
 Cost of Sales
 Consolidated
 Refining and Marketing Segment.
 Asphalt Segment
 Retail Segment.
 34




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##### Table of Contents



Direct Operating Expenses
 Consolidated
 Refining and Marketing Segment.
 Asphalt Segment.
 Selling, General and Administrative Expenses
 Consolidated
 Refining and Marketing Segment
 Asphalt Segment
 Retail Segment
 Depreciation and Amortization
  Operating Income
 Consolidated
 35




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##### Table of Contents



Refining and Marketing Segment
 Asphalt Segment.
 Retail Segment.
 Interest Expense
  Income Tax Expense
  Minority Interest In Income Of Subsidiaries
  Net Income
  Nine Months Ended September 30, 2006 Compared to the Nine Months Ended September 30, 2005
 Net Sales
 Consolidated
 36




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##### Table of Contents



Refining and Marketing Segment
 Asphalt Segment
 Retail Segment.
 Cost of Sales
 Consolidated
 Refining and Marketing Segment.
 Asphalt Segment
 Retail Segment.
 Direct Operating Expenses
 Consolidated
 37




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##### Table of Contents



Refining and Marketing Segment.
 Asphalt Segment.
 Selling, General and Administrative Expenses
 Consolidated
 Refining and Marketing Segment.
 Asphalt Segment.
 Retail Segment
 Depreciation and Amortization
  Operating Income
 Consolidated
 38




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##### Table of Contents



Refining and Marketing Segment.
 Asphalt Segment.
 Retail Segment.
 Interest Expense
  Income Tax Expe se
  Minority Interest In Income Of Subsidiaries
  39




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##### Table of Contents



Net Income
  Liquidity and Capital Resources
   Cash Flows
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(dollars in thousands)
    
    
    (dollars in thousands)Cash provided by (used in):Operating activities
    
    $
    93,138
    
    
    $
    (16,906
    )
    
    $
    88,428
    
    
    $
    32,482Investing activities
    
    
    (597,223
    )
    
    
    (33,537
    )
    
    
    (401,615
    )
    
    
    54,610Financing activities
    
    
    343,650
    
    
    
    75,191
    
    
    
    220,280
    
    
    
    42,845Net (decrease) increase in cash and cash equivalents
    
    $
    (160,435
    )
    
    $
    24,748
    
    
    $
    (92,907
    )
    
    $
    129,937
 Cash Flows Provided by (Used In) Operating Activities
   40




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##### Table of Contents



Cash Flows (Used In) Provided By Investing Activities
   Cash Flows Provided By Financing Activities
   Cash Position and Indebtedness
  Summary of Indebtedness
 As of September 30, 2006(dollars in thousands)Amount Outstanding
    
    
    Total Facilities
    
    
    Total AvailabilityDebt, including current portion:Term loan credit facility
    
    $
    450,000
    
    
    $
    550,000
    
    
    $
    Revolving credit facilities
    
    
    8,134
    
    
    
    455,000
    
    
    
    245,735Retail credit facility
    
    
    51,159
    
    
    
    51,159
    
    
    
    Totals
    
    $
    509,293
    
    
    $
    1,056,159
    
    
    $
    245,735
 Revolving Credit Facility.
 41




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##### Table of Contents



Credit Suisse Credit Facility
    42




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##### Table of Contents



Wachovia Credit Facility
     Revolving Credit Facility  Paramount.
  Capital Spending
  43




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##### Table of Contents



Clean Air Capital Expenditures
 Turnaround and Chemical Catalyst Costs
 Contractual Obligations and Commercial Commitments
  
    
    the prepayment of our $100 million term loan due January 14, 2009
with available cash on hand on January 19, 2006;
    
    on March 1, 2006, we sold our Amdel and White Oil pipelines, which
had been inactive since December 2002, to an affiliate of Sunoco
Logistics Partners L.P. (Sunoco) for total consideration of
approximately $68 million. In conjunction with this transaction,
we entered into a 10-year pipeline Throughput and Deficiency
Agreement with Sunoco, with an option to extend the agreement by
four additional 30-month periods. The Throughput and Deficiency
Agreement will allow us to maintain our physically integrated
system by retaining crude oil transportation rights in the
pipelines from the Gulf Coast. Pursuant to the Throughput and
Deficiency Agreement, we have agreed to ship, starting June 1,
2006, a minimum of 15,000 bpd in the pipelines during the term of
the agreement;
    
    the draw down of $50 million under our credit facility with
Wachovia Bank in conjunction with the Good Time Stores
acquisition;
    
    the draw down of $450 million under our credit facility with
Credit Suisse in conjunction with the Paramount and Edgington
acquisitions; and
    
    our obligations under the Paramount Credit Facility assumed in
conjunction with the Paramount acquisition.
 Off-Balance Sheet Arrangements
 We have no off-balance sheet arrangements.
 Critical Accounting Policies
   44




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##### Table of Contents



New Accounting Standards and Disclosures
  45




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Commodity Price Risk
      Wtd AvgWtd Avg
    
    FairDescription
    
    Contract
    
    Purchase
    
    Market
    
    Contract
    
    Fair
    
    Gainof Activity
    
    Volume
    
    Price/BBL
    
    Price
    
    Value
    
    Value
    
    (Loss)(in thousands)Futures-long
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Forwards-long (crude)
    
    
    11,750
    
    
    
    62.44
    
    
    
    50.94
    
    
    
    734
    
    
    
    599
    
    
    
    135Forwards-long (refined products)
    
    
    25,000
    
    
    
    78.42
    
    
    
    76.01
    
    
    
    1,961
    
    
    
    1,901
    
    
    
    (60
    )Forwards-long (asphalt)
    
    
    35,600
    
    
    
    63.33
    
    
    
    65.39
    
    
    
    2,255
    
    
    
    2,328
    
    
    
    73
 Interest Rate Risk.
  46




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 (1) Evaluation of disclosure controls and procedures.
  (2) Changes in internal control over financial reporting.
  47




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description of Exhibit3.1
    
    Amended and Restated Certificate of Incorporation of Alon USA Energy, Inc. (incorporated by
reference to Exhibit 3.1 to Form S-1, filed by the Company on July 7, 2005, SEC File No.
333-124797).3.2
    
    Amended and Restated Bylaws of Alon USA Energy, Inc. (incorporated by reference to Exhibit
3.2 to Form S-1, filed by the Company on July 14, 2005, SEC File No. 333-124797).4.1
    
    Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Form S-1,
filed by the Company on June 17, 2005, SEC File No. 333-124797).10.1*
    
    First Amendment to Stock Purchase Agreement, dated
June 30, 2006, by and among Alon USA Energy, Inc., The Craig C.
Barto and Gisele M. Barto Living Trust, Dated April 5, 1991, The Jerrel C. Barto and Janice
D. Barto Living Trust, Dated March 18, 1991, W. Scott Lovejoy III and Mark R. Milano.10.2*
    
    Second Amendment to Stock Purchase Agreement, dated July 31, 2006, by and among Alon USA Energy, Inc., The Craig
C. Barto and Gisele M. Barto Living Trust, Dated April 5, 1991, The Jerrel C. Barto and
Janice D. Barto Living Trust, Dated March 18, 1991, W. Scott
Lovejoy III and Mark R. Milano.10.3
    
    Amended and Restated Credit Agreement, dated July 26, 2005, by and among Paramount Petroleum
Corporation, Bank of America, N.A. and Société Générale (incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by the Company on August 9, 2006, SEC File No. 001-32567).10.4
    
    First Amendment to Amended and Restated Credit Agreement, dated January 26, 2006, by and
among Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.2 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.5
    
    Second Amendment to Amended and Restated Credit Agreement, dated February 28, 2006, by and
among Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.3 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.6
    
    Third Amendment to Amended and Restated Credit Agreement, dated June 12, 2006, by and among
Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.4 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.7
    
    Fourth Amendment to Amended and Restated Credit Agreement, dated June 16, 2006, by and among
Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.5 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.8
    
    Fifth Amendment to Amended and Restated Credit Agreement, dated June 22, 2006, by and among
Paramount Petroleum Corporation, Bank of America, N.A., Banc of America Securities LLC and
the lenders party thereto (incorporated by reference to
Exhibit 10.6 to Form 8-K, filed by the
Company on August 9, 2006, SEC File No. 001-32567).
 48




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.9
    
    Amended and Restated Management Employment Agreement, dated as of August 9, 2006, between
Harlin R. Dean and Alon USA GP, LLC (incorporated by reference to Exhibit 10.1 to Form 8-K
filed by the Company on August 9, 2006, SEC File No. 001-32567).31.1*
    
    Certifications of Chief Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certifications of Chief Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
§1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Furnished herewith. 49




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##### Table of Contents



SIGNATURES
  Date: November 14, 2006
    By:
    /s/ David WiessmanDavid WiessmanExecutive Chairman Date: November 14, 2006
    By:
    /s/ Jeff D. MorrisJeff D. MorrisChief Executive Officer Date: November 14, 2006
    By:
    /s/ Shai EvenShai EvenChief Financial Officer 50




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##### Table of Contents



EXHIBITS
 ExhibitNumber
    
    Description of Exhibit3.1
    
    Amended and Restated Certificate of Incorporation of Alon USA Energy, Inc. (incorporated by
reference to Exhibit 3.1 to Form S-1, filed by the Company on July 7, 2005, SEC File No.
333-124797).3.2
    
    Amended and Restated Bylaws of Alon USA Energy, Inc. (incorporated by reference to Exhibit
3.2 to Form S-1, filed by the Company on July 14, 2005, SEC File No. 333-124797).4.1
    
    Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Form S-1,
filed by the Company on June 17, 2005, SEC File No. 333-124797).10.1*
    
    First Amendment to Stock Purchase Agreement, dated
June 30, 2006, by and among Alon USA Energy, Inc., The Craig C.
Barto and Gisele M. Barto Living Trust, Dated April 5, 1991, The Jerrel C. Barto and Janice
D. Barto Living Trust, Dated March 18, 1991, W. Scott Lovejoy III and Mark R. Milano.10.2*
    
    Second Amendment to Stock Purchase Agreement,
dated July 31, 2006, by and among Alon USA Energy, Inc., The Craig
C. Barto and Gisele M. Barto Living Trust, Dated April 5, 1991, The Jerrel C. Barto and
Janice D. Barto Living Trust, Dated March 18, 1991, W. Scott Lovejoy III and Mark R. Milano.10.3
    
    Amended and Restated Credit Agreement, dated July 26, 2005, by and among Paramount Petroleum
Corporation, Bank of America, N.A. and Société Générale (incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by the Company on August 9, 2006, SEC File No. 001-32567).10.4
    
    First Amendment to Amended and Restated Credit Agreement, dated January 26, 2006, by and
among Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.2 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.5
    
    Second Amendment to Amended and Restated Credit Agreement, dated February 28, 2006, by and
among Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.3 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.6
    
    Third Amendment to Amended and Restated Credit Agreement, dated June 12, 2006, by and among
Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.4 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.7
    
    Fourth Amendment to Amended and Restated Credit Agreement, dated June 16, 2006, by and among
Paramount Petroleum Corporation, Bank of America, N.A. and the lenders party
thereto (incorporated by reference to Exhibit 10.5 to
Form 8-K, filed by the Company on August
9, 2006, SEC File No. 001-32567).10.8
    
    Fifth Amendment to Amended and Restated Credit Agreement, dated June 22, 2006, by and among
Paramount Petroleum Corporation, Bank of America, N.A., Banc of America Securities LLC and
the lenders party thereto (incorporated by reference to
Exhibit 10.6 to Form 8-K, filed by the
Company on August 9, 2006, SEC File No. 001-32567).10.9
    
    Amended and Restated Management Employment Agreement, dated as of August 9, 2006, between
Harlin R. Dean and Alon USA GP, LLC (incorporated by reference to
Exhibit 10.1 to Form 8-K,
filed by the Company on August 9, 2006, SEC File No. 001-32567).
 51




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit31.1*
    
    Certifications of Chief Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certifications of Chief Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
§1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Furnished herewith. 52