##### 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 MARCH 31, 2007
 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
    
    74-2966572(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 (Address of principal executive offices) (Zip Code)
 (Registrants telephone number, including area code)
 
 þ o
  o þ o
 o þ




---



##### 



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
    
    
    18FORWARD-LOOKING STATEMENTS
    
    
    18ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    40ITEM 4. CONTROLS AND PROCEDURES
    
    
    41PART II. OTHER INFORMATION
    
    
    42ITEM 5. OTHER INFORMATION
    
    
    42ITEM 6. EXHIBITS
    
    
    43SIGNATURESEXHIBITSCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO and CFO Pursuant to Section 906




---



##### 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)
 March 31,
    
    
    December 31,2007
    
    
    2006(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    88,496
    
    
    $
    64,166Accounts and other receivables, net
    
    
    163,323
    
    
    
    126,634Inventories
    
    
    338,045
    
    
    
    311,464Prepaid expenses and other current assets
    
    
    10,524
    
    
    
    12,909Total current assets
    
    
    600,388
    
    
    
    515,173Equity method investments
    
    
    37,908
    
    
    
    38,298Property, plant and equipment, net
    
    
    766,818
    
    
    
    775,836Other assets
    
    
    85,265
    
    
    
    79,478Total assets
    
    $
    1,490,379
    
    
    $
    1,408,785LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    242,772
    
    
    $
    202,447Accrued liabilities
    
    
    77,830
    
    
    
    66,808Current portion of deferred gain on disposition of assets
    
    
    9,747
    
    
    
    10,400Current portion of long-term debt
    
    
    6,665
    
    
    
    6,739Total current liabilities
    
    
    337,014
    
    
    
    286,394Other non-current liabilities
    
    
    65,390
    
    
    
    65,885Deferred gain on disposition of assets
    
    
    40,351
    
    
    
    42,299Long-term debt
    
    
    490,305
    
    
    
    491,930Deferred income tax liability
    
    
    221,207
    
    
    
    222,415Total liabilities
    
    
    1,154,267
    
    
    
    1,108,923Commitments and contingencies (note 15)Minority interest in subsidiaries
    
    
    12,027
    
    
    
    9,532Stockholders 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
shares issued and outstanding at March 31, 2007 and December 31, 2006
    
    
    468
    
    
    
    468Additional paid-in capital
    
    
    181,685
    
    
    
    181,622Accumulated other comprehensive loss, net of income tax
    
    
    (7,816
    )
    
    
    (7,816
    )Retained earnings
    
    
    149,748
    
    
    
    116,056Total stockholders equity
    
    
    324,085
    
    
    
    290,330Total liabilities and stockholders equity
    
    $
    1,490,379
    
    
    $
    1,408,785
  1




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited, dollars in thousands except per share data)
 For the Three Months EndedMarch 31,2007
    
    
    2006Net sales
    
    $
    965,532
    
    
    $
    584,701Operating costs and expenses:Cost of sales
    
    
    811,261
    
    
    
    497,827Direct operating expenses
    
    
    49,283
    
    
    
    23,271Selling, general and administrative expenses
    
    
    22,165
    
    
    
    17,453Depreciation and amortization
    
    
    14,442
    
    
    
    5,523Total operating costs and expenses
    
    
    897,151
    
    
    
    544,074Gain on disposition of assets
    
    
    955
    
    
    
    55,386Operating income
    
    
    69,336
    
    
    
    96,013Interest expense
    
    
    (11,418
    )
    
    
    (9,047
    )Equity earnings of investees
    
    
    604
    
    
    
    577Other income, net
    
    
    890
    
    
    
    1,927Income before income tax expense and
minority interest in income of subsidiaries
    
    
    59,412
    
    
    
    89,470Income tax expense
    
    
    21,971
    
    
    
    32,526Income before minority interest in income of subsidiaries
    
    
    37,441
    
    
    
    56,944Minority interest in income of subsidiaries
    
    
    1,876
    
    
    
    2,780Net income
    
    $
    35,565
    
    
    $
    54,164Earnings per share
    
    $
    0.76
    
    
    $
    1.16Weighted average shares outstanding (in thousands)
    
    
    46,757
    
    
    
    46,731Cash dividends per share
    
    $
    0.04
    
    
    $
    0.41
  2




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited, dollars in thousands)
 For the Three Months EndedMarch 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    35,565
    
    
    $
    54,164Adjustments to reconcile net income to cash provided by (used
in) operating activities:Depreciation and amortization
    
    
    14,442
    
    
    
    5,523Stock compensation
    
    
    682
    
    
    
    510Deferred income tax expense
    
    
    (417
    )
    
    
    21,990Minority interest in income of subsidiaries
    
    
    1,876
    
    
    
    2,780Gain on disposition of assets
    
    
    (955
    )
    
    
    (55,386
    )Changes in operating assets and liabilities:Accounts and other receivables, net
    
    
    (36,689
    )
    
    
    4,502Inventories
    
    
    (26,581
    )
    
    
    (33,518
    )Prepaid expenses and other current assets
    
    
    2,385
    
    
    
    (3,606
    )Other assets
    
    
    76
    
    
    
    (1,415
    )Accounts payable
    
    
    40,325
    
    
    
    (8,275
    )Accrued liabilities
    
    
    9,577
    
    
    
    3,160Other non-current liabilities
    
    
    (1,418
    )
    
    
    (152
    )Net cash provided by (used in) operating activities
    
    
    38,868
    
    
    
    (9,723
    )Cash flows from investing activities:Capital expenditures
    
    
    (4,592
    )
    
    
    (4,638
    )Turnaround and chemical catalyst expenditures
    
    
    (4,674
    )
    
    
    (1,303
    )Proceeds from disposition of assets, net
    
    
    
    
    
    
    68,000Sale of short-term investments, net
    
    
    
    
    
    
    67,320Dividends from investment in investees (net of equity earnings)
    
    
    390
    
    
    
    8Net cash provided by (used in) investing activities
    
    
    (8,876
    )
    
    
    129,387Cash flows from financing activities:Dividends paid to stockholders
    
    
    (1,873
    )
    
    
    (19,192
    )Deferred debt issuance costs
    
    
    (2,090
    )
    
    
    Payments on long-term debt
    
    
    (1,699
    )
    
    
    (100,468
    )Net cash used in financing activities
    
    
    (5,662
    )
    
    
    (119,660
    )Net change in cash and cash equivalents
    
    
    24,330
    
    
    
    4Cash and cash equivalents, beginning of period
    
    
    64,166
    
    
    
    136,820Cash and cash equivalents, end of period
    
    $
    88,496
    
    
    $
    136,824Supplemental cash flow information:Cash paid for interest
    
    $
    14,452
    
    
    $
    5,506Cash paid for income tax
    
    $
    6,098
    
    
    $
    255
  3




---



##### Table of Contents



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
   (c) New Accounting Standards
 Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109
 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans
 The Fair Value Option for Financial Assets and Financial Liabilities.
 4




---



##### Table of Contents



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 and other current assets
    
    $
    2,693Property, plant and equipment
    
    
    5,014Intangible assets
    
    
    4,000Goodwill
    
    
    15,317Total Purchase Price
    
    $
    27,024
  Paramount Acquisition
   Cash paid, less unrestricted cash acquired
    
    $
    501,056Transaction costs
    
    
    3,599Total Purchase Price
    
    $
    504,655
 5




---



##### Table of Contents



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
    
    $
    308,135Property, plant and equipment
    
    
    499,179Deferred charges and other assets
    
    
    23,503Equity method investments
    
    
    15,836Intangibles
    
    
    16,098Current liabilities, excluding debt
    
    
    (165,824
    )Deferred income tax liability
    
    
    (166,535
    )Other liabilities
    
    
    (25,737
    )Total Purchase Price
    
    $
    504,655
  Unaudited Pro Forma Financial Information
  
    
    The acquisition of Paramount Petroleum Corporation occurred on January 1, 2006;
 
    
    $400,000 of term debt was incurred on January 1, 2006 to
fund the acquisition and to repay the existing Paramount Petroleum
Corporation debt; and
 
    
    Depreciation expense was higher beginning January 1, 2006 based upon the revaluation of estimated asset values as of
that date.
  Three Months EndedMarch 31,2007
    
    
    2006(unaudited)
    
    
    (pro forma)Net sales
    
    $
    965,532
    
    
    $
    896,118Operating income
    
    
    69,336
    
    
    
    93,524Net income
    
    
    35,565
    
    
    
    43,744Earnings per share
    
    $
    0.76
    
    
    $
    0.94
 Edgington Acquisition
  6




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  Cash paid
    
    $
    92,405Transaction costs
    
    
    1,163Total Purchase Price
    
    $
    93,568The purchase price was allocated as follows:Current assets, net of unrestricted cash acquired
    
    $
    1,000Inventories
    
    
    34,405Property, plant and equipment
    
    
    63,951Other non-current liabilities
    
    
    (5,788
    )Total Purchase Price
    
    $
    93,568
  Skinnys Acquisition
  (3) Sale of Amdel and White Oil Pipelines
  7




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
 (4) Segment Data
  (a) Refining and Marketing Segment
  (b) Asphalt Segment
  (c) Retail Segment
  (d) Corporate
   Refining and
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConsolidatedThree Months ended March 31, 2007
    
    Marketing
    
    Asphalt
    
    Retail
    
    Corporate
    
    TotalNet sales to external customers
    
    $
    765,747
    
    
    $
    113,946
    
    
    $
    85,839
    
    
    $
    
    
    
    $
    965,532Intersegment sales/purchases
    
    
    128,222
    
    
    
    (94,044
    )
    
    
    (34,178
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    12,719
    
    
    
    497
    
    
    
    992
    
    
    
    234
    
    
    
    14,442Operating income (loss)
    
    
    63,237
    
    
    
    6,261
    
    
    
    159
    
    
    
    (321
    )
    
    
    69,336Total assets
    
    
    1,022,899
    
    
    
    357,652
    
    
    
    100,312
    
    
    
    9,516
    
    
    
    1,490,379Turnaround, chemical catalyst and
capital expenditures
    
    
    8,529
    
    
    
    136
    
    
    
    479
    
    
    
    122
    
    
    
    9,266
 8




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
 Refining and
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConsolidatedThree Months ended March 31, 2006
    
    Marketing
    
    
    Asphalt
    
    
    Retail
    
    
    Corporate
    
    
    TotalNet sales to external customers
    
    $
    489,794
    
    
    $
    22,292
    
    
    $
    72,615
    
    
    $
    
    
    
    $
    584,701Intersegment sales/purchases
    
    
    50,193
    
    
    
    (18,803
    )
    
    
    (31,390
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    3,786
    
    
    
    59
    
    
    
    1,154
    
    
    
    524
    
    
    
    5,523Operating income (loss)
    
    
    103,862
    
    
    
    (7,242
    )
    
    
    44
    
    
    
    (651
    )
    
    
    96,013Total assets
    
    
    602,799
    
    
    
    18,914
    
    
    
    68,822
    
    
    
    22,042
    
    
    
    712,577Turnaround, chemical catalyst and
capital expenditures
    
    
    5,628
    
    
    
    71
    
    
    
    223
    
    
    
    19
    
    
    
    5,941
   (5) Cash and Cash Equivalents
  (6) Derivatives and Hedging Activities
 (a) Fair Value of Financial Instruments
  (b) Derivative Financial Instruments
    9




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  Accounting for Derivative Instruments and Hedging Activities
 (7) Inventories
   March 31,
    
    
    December 31,2007
    
    
    2006Crude oil, refined products, asphalt and blendstocks
    
    $
    305,717
    
    
    $
    280,212Materials and supplies
    
    
    12,059
    
    
    
    12,161Store merchandise
    
    
    15,836
    
    
    
    15,905Store fuel
    
    
    4,433
    
    
    
    3,186Total inventories
    
    $
    338,045
    
    
    $
    311,464
   (8) Property, Plant and Equipment, net
  March 31,
    
    
    December 31,2007
    
    
    2006Refining facilities
    
    $
    729,879
    
    
    $
    730,036Pipelines and terminals
    
    
    40,125
    
    
    
    40,108Retail
    
    
    79,123
    
    
    
    78,722Other
    
    
    10,822
    
    
    
    10,700Property, plant and equipment, gross
    
    
    859,949
    
    
    
    859,566Less accumulated depreciation
    
    
    (93,131
    )
    
    
    (83,730
    )Property, plant and equipment, net
    
    $
    766,818
    
    
    $
    775,836
 10




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
 (9) Other Assets
  March 31,
    
    
    December 31,2007
    
    
    2006Deferred turnaround, chemical catalyst expenditures
    
    $
    16,441
    
    
    $
    12,797Environmental receivables
    
    
    11,615
    
    
    
    11,853Deferred debt issuance costs
    
    
    12,473
    
    
    
    10,769Goodwill
    
    
    15,317
    
    
    
    15,317Intangible assets
    
    
    20,491
    
    
    
    20,696Other
    
    
    8,928
    
    
    
    8,046Total other assets
    
    $
    85,265
    
    
    $
    79,478
 (10) Employee and Postretirement Benefits
   For the Three Months EndedMarch 31,2007
    
    
    2006Components of net periodic benefit cost:Service cost
    
    $
    507
    
    
    $
    478Interest cost
    
    
    665
    
    
    
    608Expected return on plan assets
    
    
    (704
    )
    
    
    (593
    )Amortization of net loss
    
    
    134
    
    
    
    83Net periodic benefit cost
    
    $
    602
    
    
    $
    576
 (11) Long-Term Debt
  March 31,
    
    
    December 31,2007
    
    
    2006Term loan credit facility
    
    $
    446,625
    
    
    $
    447,750Revolving credit facilities
    
    
    
    
    
    
    Retail credit facilities
    
    
    50,345
    
    
    
    50,919Total debt
    
    
    496,970
    
    
    
    498,669Less current portion
    
    
    (6,665
    )
    
    
    (6,739
    )Total long-term debt
    
    $
    490,305
    
    
    $
    491,930
 (a) Term Loan Credit Facility
  11




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
      (b) Revolving Credit Facilities
 Israel Discount Bank Credit Facility
   Bank of America Credit Facility.
 12




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  (c) Retail Credit Facilities
       (d) Secured Term Loan
  13




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands except as noted)
   (12) Stock Based Compensation
  (a) 2005 Incentive Compensation Plan (share value in dollars)
  Restricted Stock
   Weighted AverageNonvested Shares
    
    Shares
    
    
    Grant Date Fair ValuesNonvested at January 1, 2006
    
    
    78,737
    
    
    $
    19.73Granted
    
    
    2,253
    
    
    
    33.29Vested
    
    
    (26,244
    )
    
    
    19.73Forfeited
    
    
    (5,667
    )
    
    
    20.42Nonvested at December 31, 2006
    
    
    49,079
    
    
    $
    20.27Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Nonvested at March 31, 2007
    
    
    49,079
    
    
    $
    20.27
 14




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
  Stock Appreciation Rights
  (b) 2000 Incentive Stock Compensation Plan
  15




---



##### 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, 2006
    
    
    8,060
    
    
    $
    100
    
    
    
    3,027
    
    
    $
    100Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (1,212
    )
    
    
    100
    
    
    
    (455
    )
    
    
    100Outstanding at December 31, 2006
    
    
    6,848
    
    
    
    100
    
    
    
    2,572
    
    
    
    100Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2007
    
    
    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 EndedMarch 31,2007
    
    
    2006Net income
    
    $
    35,565
    
    
    $
    54,164Average number of shares of common stock outstanding
    
    
    46,757
    
    
    
    46,731Dilutive restricted shares
    
    
    37
    
    
    
    29Average number of shares of common stock outstanding assuming dilution
    
    
    46,794
    
    
    
    46,760Earnings per share  basic and diluted
    
    $
    0.76
    
    
    $
    1.16
 (15) Commitments and Contingencies
 (a) Commitments
  16




---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (unaudited, dollars in thousands except as noted)
 (b) Contingencies
  (c) Environmental
    (16) Subsequent Event
 Dividend Declared
  17




---



##### 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 our
Annual Report on Form 10-K for the year ended December 31, 2006. 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 and Edgington Oil Company may not be
realized;
    
    our ability to successfully integrate the operations and employees of Paramount
Petroleum Corporation and Edgington Oil Company and the timing of such integration;
    
    expected cost savings from the Paramount Petroleum Corporation and Edgington Oil
Company 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 Petroleum Corporation and Edgington Oil
Company 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 spread;
    
    changes in the light/heavy spread;
    
    the effects of transactions involving forward contracts and derivative instruments;
    
    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;
 18




---



##### Table of Contents




    
    the execution of planned capital projects;
    
    adverse changes in the credit ratings assigned to our trade credit and debt instruments;
    
    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, 2006 under the caption Risk Factors.
  Company Overview
  Refining and Marketing Segment
  Asphalt Segment.
  19




---



##### Table of Contents



Retail Segment
 First Quarter Overview
 Operational and Financial Highlights
  
    
    Our average refinery operating margin for the Big Spring refinery increased by $2.01 per
barrel to $14.36 per barrel for the three months ended March 31, 2007, compared to $12.35
per barrel for the three months ended March 31, 2006. The increase in refinery operating
margin for the Big Spring refinery was comparable to the increase in the Gulf Coast 3/2/1
crack spreads which increased by $3.05 per barrel to $12.75 per barrel for the three months
ended March 31, 2007 compared to $9.70 per barrel for the three months ended March 31,
2006.
    
    The increased margin environment for the first quarter of 2007 was partially offset by
lower sweet/sour and light/heavy crude oil differentials. The average sweet/sour spread for
the three months ended March 31, 2007 was $3.98 per barrel compared to $6.57 per barrel for
the three months ended March 31, 2006.
    
    The average light/heavy spread for the three months ended March 31, 2007 was $12.53 per
barrel compared to $15.61 per barrel for the three months ended March 31, 2006.
    
    Our California refineries and asphalt assets acquired during the third quarter of 2006
generated operating income for the three months ended March 31, 2007 of $21.2 million. The
California refineries operating margins were $6.59 per barrel and total refinery
throughput averaged 59,164 barrels per day for the first quarter of 2007. Asphalt sales
relating to these acquired assets were 307,915 tons for the first quarter of 2007 at an
average price of approximately $308 per ton.
    
    Our capital expenditures and turnaround spending for the three months ended March 31,
2007 totaled approximately $9.3 million.
    
    On March 14, 2007, we paid a regular quarterly cash dividend of $0.04 per share on our
common stock to stockholders of record at the close of business on March 1, 2007.
 Acquisition of Retail Convenience Stores
  20




---



##### Table of Contents



Major Influences on Results of Operations
 Refining and Marketing
       21




---



##### Table of Contents



Asphalt
  Retail
  Factors Affecting Comparability
  California Refineries and Asphalt Assets
 Market Considerations
 Amdel and White Oil Pipeline Transaction
 Results of Operations
 Net Sales
 22




---



##### Table of Contents







Cost of Sales


Direct Operating Expenses.


Selling, General and Administrative Expenses


23



---



##### Table of Contents



ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
 Summary Financial Tables
 For the Three Months EndedMarch 31,2007
    
    
    2006(dollars in thousands, except pershare data)STATEMENT OF OPERATIONS DATA:Net sales
    
    $
    965,532
    
    
    $
    584,701Operating costs and expenses:Cost of sales
    
    
    811,261
    
    
    
    497,827Direct operating expenses
    
    
    49,283
    
    
    
    23,271Selling, general and administrative expenses (1)
    
    
    22,165
    
    
    
    17,453Depreciation and amortization (2)
    
    
    14,442
    
    
    
    5,523Total operating costs and expenses
    
    
    897,151
    
    
    
    544,074Gain on disposition of assets (3)
    
    
    955
    
    
    
    55,386Operating income
    
    
    69,336
    
    
    
    96,013Interest expense (4)
    
    
    (11,418
    )
    
    
    (9,047
    )Equity earnings of investees
    
    
    604
    
    
    
    577Other income, net
    
    
    890
    
    
    
    1,927Income before income tax expense and minority interest in income of subsidiaries
    
    
    59,412
    
    
    
    89,470Income tax expense
    
    
    21,971
    
    
    
    32,526Income before minority interest in income of subsidiaries
    
    
    37,441
    
    
    
    56,944Minority interest in income of subsidiaries
    
    
    1,876
    
    
    
    2,780Net income
    
    $
    35,565
    
    
    $
    54,164Earnings per share
    
    $
    0.76
    
    
    $
    1.16Weighted average shares outstanding (in thousands)
    
    
    46,757
    
    
    
    46,731Cash dividends per share
    
    $
    0.04
    
    
    $
    0.41CASH FLOW DATA:Net cash provided by (used in):Operating activities
    
    $
    38,868
    
    
    $
    (9,723
    )Investing activities
    
    
    (8,876
    )
    
    
    129,387Financing activities
    
    
    (5,662
    )
    
    
    (119,660
    )OTHER DATA:Adjusted EBITDA (5)
    
    $
    84,317
    
    
    $
    48,654Capital expenditures (6)
    
    
    4,592
    
    
    
    4,638Capital expenditures for turnaround and chemical catalyst
    
    
    4,674
    
    
    
    1,303
 24




---



##### Table of Contents



March 31,
    
    December 31,2007
    
    2006BALANCE SHEET DATA (end of
period):Cash and cash equivalents
    
    $
    88,496
    
    
    $
    64,166Working capital
    
    
    263,374
    
    
    
    228,779Total assets
    
    
    1,490,379
    
    
    
    1,408,785Total debt
    
    
    496,970
    
    
    
    498,669Total stockholders equity
    
    
    324,085
    
    
    
    290,330
 
 (1)
    
    Includes corporate headquarters selling, general and administrative expenses of $87 and $127
for the three months ended March 31, 2007 and 2006, respectively, which are not allocated to
our three operating segments.(2)
    
    Includes corporate depreciation and amortization of $234 and $524 for the three months ended
March 31, 2007 and 2006, respectively, which are not allocated to our three operating
segments.(3)
    
    Gain on disposition of assets reported in the three months ended March 31, 2007, includes
the recognition of $955 deferred gain recorded primarily in connection with the Holly Energy
Partners, LP (HEP) transaction. Gain on disposition of assets reported in the three months ended March
31, 2006, reflects the $52,500 pre-tax gain on disposition of assets, recorded in connection
with the Amdel and White Oil crude oil pipelines transaction and the recognition of $2,886
deferred gain recorded in connection with the HEP transaction.(4)
    
    Includes $3,000 prepayment premium and $3,894 of unamortized debt issuance costs written off
as a result of the prepayment of the $100,000 term loan in January 2006.(5)
    
    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 per
our credit facilities. 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.
 25




---



##### Table of Contents



For the Three Months EndedMarch 31,2007
    
    
    2006(dollars in thousands)Net income
    
    $
    35,565
    
    
    $
    54,164Minority interest in income of subsidiaries
    
    
    1,876
    
    
    
    2,780Income tax expense
    
    
    21,971
    
    
    
    32,526Interest expense
    
    
    11,418
    
    
    
    9,047Depreciation and amortization
    
    
    14,442
    
    
    
    5,523EBITDA
    
    
    85,272
    
    
    
    104,040Gain on disposition of assets
    
    
    (955
    )
    
    
    (55,386
    )Adjusted EBITDA
    
    $
    84,317
    
    
    $
    48,654
 (6)
    
    Includes corporate capital expenditures of $122 and $19 for the three months ended March 31,
2007 and 2006, respectively, which are not allocated to our three operating segments.
 26




---



##### Table of Contents



REFINING AND MARKETING SEGMENT
 For the Three Months EndedMarch 31,2007
    
    
    2006(dollars in thousands, except perbarrel data and pricing statistics)STATEMENTS OF OPERATIONS DATA:Net sales (1)
    
    $
    893,969
    
    
    $
    539,987Operating costs and expenses:Cost of sales
    
    
    774,391
    
    
    
    462,572Direct operating expenses
    
    
    38,447
    
    
    
    21,599Selling, general and administrative expenses
    
    
    6,199
    
    
    
    3,554Depreciation and amortization
    
    
    12,719
    
    
    
    3,786Total operating costs and expenses
    
    
    831,756
    
    
    
    491,511Gain on disposition of assets (2)
    
    
    1,024
    
    
    
    55,386Operating income
    
    $
    63,237
    
    
    $
    103,862KEY OPERATING STATISTICS:Total sales volume (bpd)
    
    
    133,337
    
    
    
    85,370Non-integrated marketing sales volume (bpd) (3)
    
    
    13,878
    
    
    
    19,347Non-integrated marketing margin (per barrel sales volume) (3)
    
    $
    (0.07
    )
    
    $
    (0.56
    )Per barrel of throughput:Refinery operating margin  Big Spring (4)
    
    $
    14.36
    
    
    $
    12.35Refinery operating margin  CA Refineries (4)
    
    
    6.59
    
    
    
    N/ARefinery direct operating expenses  Big Spring (5)
    
    
    3.89
    
    
    
    3.40Refinery direct operating expenses  CA Refineries (5)
    
    
    2.91
    
    
    
    N/ACapital expenditures
    
    
    3,855
    
    
    
    4,325Capital expenditures for turnaround and chemical catalyst
    
    
    4,674
    
    
    
    1,303PRICING STATISTICS:WTI crude oil (per barrel)
    
    $
    57.95
    
    
    $
    63.34WTS crude oil (per barrel)
    
    
    53.97
    
    
    
    56.77MAYA crude oil (per barrel)
    
    
    45.42
    
    
    
    47.73Crack spreads (3/2/1) (per barrel):Gulf Coast
    
    $
    12.75
    
    
    $
    9.70Group III
    
    
    15.00
    
    
    
    9.66West Coast
    
    
    32.49
    
    
    
    19.35Crude oil differentials (per barrel):WTI less WTS
    
    $
    3.98
    
    
    $
    6.57WTI less MAYA
    
    
    12.53
    
    
    
    15.61Product
price (dollars per gallon):Gulf Coast unleaded gasoline
    
    $
    1.627
    
    
    $
    1.702Gulf Coast low-sulfur diesel
    
    
    1.796
    
    
    
    1.813Group III unleaded gasoline
    
    
    1.672
    
    
    
    1.707Group III low-sulfur diesel
    
    
    1.866
    
    
    
    1.801West Coast LA CARBOB (unleaded gasoline)
    
    
    2.260
    
    
    
    1.998West Coast LA ultra low-sulfur diesel
    
    
    1.939
    
    
    
    1.912Natural gas (per MMBTU)
    
    $
    7.18
    
    
    $
    7.84
 27




---



##### Table of Contents



THROUGHPUT
AND YIELD DATA:  BIG SPRING
 For the Three Months EndedMarch 31,2007
    
    
    2006bpd
    
    
    %
    
    
    bpd
    
    
    %Refinery crude throughput:Sour crude
    
    
    58,617
    
    
    
    89.6
    
    
    
    62,720
    
    
    
    88.9Sweet crude
    
    
    2,373
    
    
    
    3.6
    
    
    
    3,191
    
    
    
    4.5Blendstocks
    
    
    4,461
    
    
    
    6.8
    
    
    
    4,618
    
    
    
    6.6Total refinery throughput (6)
    
    
    65,451
    
    
    
    100.0
    
    
    
    70,529
    
    
    
    100.0Refinery
production:Gasoline
    
    
    30,517
    
    
    
    47.2
    
    
    
    32,846
    
    
    
    47.2Diesel/jet
    
    
    18,856
    
    
    
    29.1
    
    
    
    23,701
    
    
    
    34.1Asphalt
    
    
    6,956
    
    
    
    10.7
    
    
    
    6,444
    
    
    
    9.3Petrochemicals
    
    
    4,768
    
    
    
    7.4
    
    
    
    4,266
    
    
    
    6.0Other
    
    
    3,653
    
    
    
    5.6
    
    
    
    2,346
    
    
    
    3.4Total refinery production (7)
    
    
    64,750
    
    
    
    100.0
    
    
    
    69,603
    
    
    
    100.0Refinery Utilization (8)
    
    
    
    
    
    
    90.8
    %
    
    
    
    
    
    
    94.2
    %
 THROUGHPUT
AND YIELD DATA:  CALIFORNIA REFINERIES
 For the Three Months EndedMarch 31,2007bpd
    
    
    %Refinery crude throughput:Sour crude
    
    
    21,463
    
    
    
    36.3Heavy crude
    
    
    37,405
    
    
    
    63.2Blendstocks
    
    
    296
    
    
    
    0.5Total refinery throughput (6)
    
    
    59,164
    
    
    
    100.0Refinery
production:Gasoline
    
    
    6,873
    
    
    
    11.9Diesel/jet
    
    
    14,086
    
    
    
    24.4Asphalt
    
    
    18,753
    
    
    
    32.5Light unfinished
    
    
    2,503
    
    
    
    4.3Heavy unfinished
    
    
    14,566
    
    
    
    25.2Other
    
    
    997
    
    
    
    1.7Total refinery production (7)
    
    
    57,778
    
    
    
    100.0Refinery Utilization (8)
    
    
    
    
    
    
    83.9
    %
 
 (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.(2)
    
    Gain on disposition of assets reported in the three months ended March 31, 2007 reflects the
recognition of $1,024 deferred gain recorded in connection with the HEP transaction. Gain on
disposition of assets reported in the three months ended March 31, 2006 reflects the $52,500
pre-tax gain on disposition of assets, recorded in connection with the Amdel and White Oil
transaction and the recognition of $2,886 deferred gain recorded in connection with the HEP
transaction.(3)
    
    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.(4)
    
    Refinery operating margin is a per barrel measurement calculated by dividing the margin
between net sales and cost of sales attributable to each refinery by the refinerys throughput
volumes. Industry-wide refining results 28




---



##### Table of Contents



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.(5)
    
    Refinery direct operating expense is a per barrel measurement calculated by dividing direct
operating expenses at our Big Spring and California refineries, exclusive of depreciation and
amortization, by the applicable refinerys total throughput volumes.(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. 29




---



##### Table of Contents



ASPHALT SEGMENT
 For the Three Months EndedMarch 31,2007
    
    
    2006(dollars in thousands,except per ton data)STATEMENTS OF OPERATIONS DATA:Net sales
    
    $
    113,946
    
    
    $
    22,292Operating costs and expenses:Cost of sales (1)
    
    
    95,795
    
    
    
    26,481Direct operating expenses
    
    
    10,836
    
    
    
    1,672Selling, general and administrative expenses
    
    
    557
    
    
    
    1,322Depreciation and amortization
    
    
    497
    
    
    
    59Total operating costs and expenses
    
    
    107,685
    
    
    
    29,534Operating income (loss)
    
    $
    6,261
    
    
    $
    (7,242
    )KEY OPERATING STATISTICS:Total sales volume (tons in thousands)
    
    
    358
    
    
    
    80Sales price per ton
    
    $
    318.28
    
    
    $
    278.65Asphalt margin per ton (2)
    
    $
    50.70
    
    
    $
    (52.36
    )Capital expenditures
    
    $
    136
    
    
    $
    71
 
 (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.(2)
    
    Asphalt margin is a per ton measurement
calculated by dividing the margin between net sales
and cost of sales by the total sales volume.
Asphalt margins are used in the asphalt industry to
measure operating results related to the asphalt
sales. 30




---



##### Table of Contents



RETAIL SEGMENT
 For the Three Months EndedMarch 31,2007
    
    
    2006(dollars in thousands,except per gallon data)STATEMENTS OF OPERATIONS DATA:Net sales
    
    $
    85,839
    
    
    $
    72,615Operating costs and expenses:Cost of sales (1)
    
    
    69,297
    
    
    
    58,967Selling, general and administrative expenses
    
    
    15,322
    
    
    
    12,450Depreciation and amortization
    
    
    992
    
    
    
    1,154Total operating costs and expenses
    
    
    85,611
    
    
    
    72,571Loss on disposition of assets
    
    
    (69
    )
    
    
    Operating income
    
    $
    159
    
    
    $
    44KEY OPERATING STATISTICS:Number of stores (end of period)
    
    
    206
    
    
    
    167Fuel sales (thousands of gallons)
    
    
    18,867
    
    
    
    17,133Fuel sales (thousands of gallons per site per month)
    
    
    31
    
    
    
    34Fuel margin (cents per gallon) (2)
    
    
    19.7
    ¢
    
    
    17.2
    ¢Fuel sales price (dollars per gallon) (3)
    
    $
    2.32
    
    
    $
    2.33Merchandise sales
    
    $
    42,040
    
    
    $
    32,414Merchandise sales (per site per month)
    
    
    67
    
    
    
    65Merchandise margin (4)
    
    
    30.5
    %
    
    
    33.2
    %Capital expenditures
    
    $
    479
    
    
    $
    223
 
 (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 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.(3)
    
    Fuel sales price per gallon represents the average sales price for motor fuels sold through
our retail segment.(4)
    
    Merchandise margin represents the difference between merchandise sales revenues 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. 31




---



##### Table of Contents



Three Months Ended March 31, 2007 Compared to the Three Months Ended March 31, 2006
 Net Sales
 Consolidated
 Refining and Marketing Segment
 Asphalt Segment
 Retail Segment
 Cost of Sales
 Consolidated
 Refining and Marketing Segment.
 Asphalt Segment
 Retail Segment.
 32




---



##### 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
 Refining and Marketing Segment
 33




---



##### Table of Contents



Asphalt Segment.
 Retail Segment.
 Interest Expense
  Income Tax Expense
  Minority Interest In Income Of Subsidiaries
  Net Income
  Liquidity and Capital Resources
  34




---



##### Table of Contents



Cash Flows
  For the Three Months EndedMarch 31,2007
    
    
    2006(dollars in thousands)Cash provided by (used in):Operating activities
    
    $
    38,868
    
    
    $
    (9,723
    )Investing activities
    
    
    (8,876
    )
    
    
    129,387Financing activities
    
    
    (5,662
    )
    
    
    (119,660
    )Net increase in cash and cash equivalents
    
    $
    24,330
    
    
    $
    4
 Cash Flows Provided by (Used In) Operating Activities
  Cash Flows (Used In) Provided By Investing Activities
  Cash Flows Used In Financing Activities
  35




---



##### Table of Contents



Cash Position and Indebtedness
  Summary of Indebtedness
 As of March 31, 2007(dollars in thousands)Amount Outstanding
    
    
    Total Facility
    
    
    Total Availability (1)Debt, including current portion:Term loan credit facility
    
    $
    446,625
    
    
    $
    446,625
    
    
    $
    Revolving credit facilities
    
    
    
    
    
    
    540,000
    
    
    
    300,352Retail credit facilities
    
    
    50,345
    
    
    
    50,345
    
    
    
    Totals
    
    $
    496,970
    
    
    $
    1,036,970
    
    
    $
    300,352
 
 (1)
    
    Total availability was calculated as the lesser of (a) the total size of the facilities
less outstanding borrowings and letters of credit as of March 31, 2007 which was $300.4 million or
(b) total borrowing base less outstanding borrowings and letters of credit as of March 31, 2007
which was $300.6 million. Term Loan Credit Facility
      36




---



##### Table of Contents



Revolving Credit Facilities .
 Israel Discount Bank Credit Facility
   Bank of America Credit Facility.
  Retail Credit Facilities.
  37




---



##### Table of Contents



Capital Spending
  Clean Air Capital Expenditures
 Turnaround and Chemical Catalyst Costs
 Contractual Obligations and Commercial Commitments
  Off-Balance Sheet Arrangements
  38




---



##### Table of Contents



Critical Accounting Policies
   New Accounting Standards and Disclosures
  39




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Commodity Price Risk
      Wtd Avg
    
    Wtd AvgDescription
    
    Contract
    
    Purchase
    
    Sales
    
    Contract
    
    Fair
    
    Gainof Activity
    
    Volume
    
    Price/BBL
    
    Price
    
    Value
    
    Value
    
    (Loss)(in thousands)Futures-short (crude)
    
    
    (195,000
    )
    
    $
    
    
    
    $
    63.20
    
    
    $
    (12,324
    )
    
    $
    (12,958
    )
    
    $
    (634
    )Futures-short (RBOB)
    
    
    (25,000
    )
    
    
    
    
    
    
    83.97
    
    
    
    (2,099
    )
    
    
    (2,161
    )
    
    
    (62
    )Futures-long (heating oil)
    
    
    50,000
    
    
    
    73.92
    
    
    
    
    
    
    
    3,696
    
    
    
    3,947
    
    
    
    251Futures-short (heating oil)
    
    
    (50,000
    )
    
    
    
    
    
    
    72.63
    
    
    
    (3,632
    )
    
    
    (3,947
    )
    
    
    (315
    )Forwards-long (refined products)
    
    
    25,000
    
    
    
    93.16
    
    
    
    
    
    
    
    2,329
    
    
    
    2,560
    
    
    
    231
 40




---



##### Table of Contents



Interest Rate Risk
  
 ITEM 4. CONTROLS AND PROCEDURES
 (1) Evaluation of disclosure controls and procedures.
  (2) Changes in internal control over financial reporting.
  41




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 5. OTHER INFORMATION
 Bonus Plans
  42




---



##### Table of Contents



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
    
    Second Amended and Restated Credit Agreement, dated as of February 28, 2007, by and among
Paramount Petroleum Corporation, Bank of America, N.A. and certain other guarantor companies
and financial institutions from time to time named therein (incorporated by reference to
Exhibit 10.1 to Form 8-K filed by the Company on March 5, 2007, SEC File No. 001-32567).10.2
    
    Waiver, Consent, Partial Release and Second Amendment, dated as of February 28, 2007, to the
Amended Revolving Credit Agreement, dated as of June 22, 2006, by and among Alon USA Energy,
Inc., Alon USA, LP, Edgington Oil Company, LLC, Israel Discount Bank of New York, Bank Leumi
USA and certain other guarantor companies and financial institutions from time to time named
therein (incorporated by reference to Exhibit 10.2 to Form 8-K filed by the Company on March
5, 2007, SEC File No. 001-32567).10.3
    
    Amendment No. 1 to the Credit Agreement, dated as of February 28, 2007, by and among Alon
USA Energy, Inc., the lenders party thereto and Credit Suisse (incorporated by reference to
Exhibit 10.3 to Form 8-K filed by the Company on March 5, 2007, SEC File No. 001-32567).10.4
    
    Agreement and Plan of Merger, dated March 2, 2007, by and among Alon USA Energy, Inc., Alon
USA Interests, LLC, ALOSKI, LLC, Skinnys, Inc. and the Davis Shareholders (as defined
therein) (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Company on
March 6, 2007, SEC File No. 001-32567).10.5
    
    Form of Appreciation Rights Award Agreement relating to Participant Grants pursuant to
Section 7 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by
reference to Exhibit 10.1 to Form 8-K filed by the Company on March 12, 2007, 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.
 43




---



##### Table of Contents



SIGNATURES
  Alon USA Energy, Inc.Date: May 10, 2007
    By:
    /s/ David WiessmanDavid WiessmanExecutive ChairmanDate: May 10, 2007
    By:
    /s/ Jeff D. MorrisJeff D. MorrisChief Executive OfficerDate: May 10, 2007
    By:
    /s/ Shai EvenShai EvenChief Financial Officer 44




---



##### 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
    
    Second Amended and Restated Credit Agreement, dated as of February 28, 2007, by and among
Paramount Petroleum Corporation, Bank of America, N.A. and certain other guarantor companies
and financial institutions from time to time named therein (incorporated by reference to
Exhibit 10.1 to Form 8-K filed by the Company on March 5, 2007, SEC File No. 001-32567).10.2
    
    Waiver, Consent, Partial Release and Second Amendment, dated as of February 28, 2007, to the
Amended Revolving Credit Agreement, dated as of June 22, 2006, by and among Alon USA Energy,
Inc., Alon USA, LP, Edgington Oil Company, LLC, Israel Discount Bank of New York, Bank Leumi
USA and certain other guarantor companies and financial institutions from time to time named
therein (incorporated by reference to Exhibit 10.2 to Form 8-K filed by the Company on March
5, 2007, SEC File No. 001-32567).10.3
    
    Amendment No. 1 to the Credit Agreement, dated as of February 28, 2007, by and among Alon
USA Energy, Inc., the lenders party thereto and Credit Suisse (incorporated by reference to
Exhibit 10.3 to Form 8-K filed by the Company on March 5, 2007, SEC File No. 001-32567).10.4
    
    Agreement and Plan of Merger, dated March 2, 2007, by and among Alon USA Energy, Inc., Alon
USA Interests, LLC, ALOSKI, LLC, Skinnys, Inc. and the Davis Shareholders (as defined
therein) (incorporated by reference to Exhibit 10.1 to Form 8-K filed by the Company on
March 6, 2007, SEC File No. 001-32567).10.5
    
    Form of Appreciation Rights Award Agreement relating to Participant Grants pursuant to
Section 7 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by
reference to Exhibit 10.1 to Form 8-K filed by the Company on March 12, 2007, 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.
 45