##### 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 SECURITIESEXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIESEXCHANGE 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 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 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
    
    
    25FORWARD-LOOKING STATEMENTS
    
    
    25ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    49ITEM 4. CONTROLS AND PROCEDURES
    
    
    50PART II. OTHER INFORMATION
    
    
    51ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    
    51ITEM 6. EXHIBITS
    
    
    51SIGNATURESEXHIBITSCERTIFICATION OF CEO PURSUANT TO SECTION 302CERTIFICATION OF CFO PURSUANT TO SECTION 302CERTIFICATION OF CEO AND 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)
 March 31,
    
    
    December 31,2009
    
    
    2008(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    18,293
    
    
    $
    18,454Accounts and other receivables, net
    
    
    155,572
    
    
    
    204,576Income tax receivable
    
    
    
    
    
    
    116,564Inventories
    
    
    337,732
    
    
    
    232,320Current portion of heating oil crack hedge
    
    
    138,819
    
    
    
    75,405Prepaid expenses and other current assets
    
    
    6,420
    
    
    
    6,353Total current assets
    
    
    656,836
    
    
    
    653,672Equity method investments
    
    
    36,940
    
    
    
    37,661Property, plant, and equipment, net
    
    
    1,482,358
    
    
    
    1,448,959Goodwill
    
    
    105,943
    
    
    
    105,943Non-current portion of heating oil crack hedge
    
    
    
    
    
    
    42,080Other assets
    
    
    125,717
    
    
    
    125,118Total assets
    
    $
    2,407,794
    
    
    $
    2,413,433LIABILITIES AND EQUITYCurrent liabilities:Accounts payable
    
    $
    286,818
    
    
    $
    233,004Accrued liabilities
    
    
    106,711
    
    
    
    111,317Current portion of long-term debt
    
    
    31,564
    
    
    
    28,397Deferred income tax liability
    
    
    44,874
    
    
    
    30,570Total current liabilities
    
    
    469,967
    
    
    
    403,288Other non-current liabilities
    
    
    134,451
    
    
    
    104,190Long-term debt
    
    
    970,779
    
    
    
    1,075,172Deferred income tax liability
    
    
    277,014
    
    
    
    293,916Total liabilities
    
    
    1,852,211
    
    
    
    1,876,566Commitments and contingencies (Note 17)Stockholders 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; 46,814,021 and 46,814,021 shares issued and
outstanding at March 31, 2009 and December 31, 2008,
respectively
    
    
    468
    
    
    
    468Additional paid-in capital
    
    
    183,953
    
    
    
    183,642Accumulated other comprehensive loss, net of income tax
    
    
    (37,606
    )
    
    
    (37,354
    )Retained earnings
    
    
    303,373
    
    
    
    287,895Total stockholders equity
    
    
    450,188
    
    
    
    434,651Non-controlling interest in subsidiaries
    
    
    18,945
    
    
    
    17,916Preferred stock of subsidiary including accumulated dividends
    
    
    86,450
    
    
    
    84,300Total equity
    
    
    555,583
    
    
    
    536,867Total liabilities and equity
    
    $
    2,407,794
    
    
    $
    2,413,433
  1




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited, dollars in thousands except per share data)
 For the Three Months EndedMarch 31,2009
    
    
    2008Net sales (1)
    
    $
    722,180
    
    
    $
    1,020,763Operating costs and expenses:Cost of sales
    
    
    539,730
    
    
    
    968,997Direct operating expenses
    
    
    68,864
    
    
    
    42,289Selling, general and administrative expenses
    
    
    31,915
    
    
    
    28,854Net costs associated with fire
    
    
    
    
    
    
    16,462Depreciation and amortization
    
    
    22,090
    
    
    
    13,745Total operating costs and expenses
    
    
    662,599
    
    
    
    1,070,347Gain on disposition of assets
    
    
    
    
    
    
    2,311Operating income (loss)
    
    
    59,581
    
    
    
    (47,273
    )Interest expense
    
    
    (28,256
    )
    
    
    (10,656
    )Equity earnings (loss) of investees
    
    
    (3
    )
    
    
    316Other income, net
    
    
    257
    
    
    
    745Income (loss) before income tax expense (benefit),
non-controlling interest in income of subsidiaries and
accumulated dividends on preferred stock of subsidiary
    
    
    31,579
    
    
    
    (56,868
    )Income tax expense (benefit)
    
    
    10,995
    
    
    
    (21,093
    )Income (loss) before non-controlling interest in income
of subsidiaries and accumulated dividends on preferred
stock of subsidiary
    
    
    20,584
    
    
    
    (35,775
    )Non-controlling interest in income (loss) of subsidiaries
    
    
    1,083
    
    
    
    (2,197
    )Accumulated dividends on preferred stock of subsidiary
    
    
    2,150
    
    
    
    Net income (loss) available to common stockholders
    
    $
    17,351
    
    
    $
    (33,578
    )Earnings (loss) per share, basic and diluted
    
    $
    0.37
    
    
    $
    (0.72
    )Weighted average shares outstanding, basic (in thousands)
    
    
    46,806
    
    
    
    46,782Cash dividends per share
    
    $
    0.04
    
    
    $
    0.04
 
 (1)
    
    Includes excise taxes on sales by the retail and branded marketing segment of $11,044 and
$9,654 for the three months ended March 31, 2009 and 2008, respectively.  2




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited, dollars in thousands)
 For the Three Months EndedMarch 31,2009
    
    
    2008Cash flows from operating activities:Net income (loss)
    
    $
    17,351
    
    
    $
    (33,578
    )Adjustments to reconcile net income (loss) to cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    22,090
    
    
    
    13,745Stock compensation
    
    
    421
    
    
    
    505Deferred income tax expense
    
    
    (26
    )
    
    
    407Non-controlling interest in income (loss) of subsidiaries
    
    
    1,083
    
    
    
    (2,197
    )Accumulated dividends on preferred stock of subsidiary
    
    
    2,150
    
    
    
    Mark-to-market of heating oil crack spread hedge
    
    
    (21,334
    )
    
    
    Gain on disposition of assets
    
    
    
    
    
    
    (2,311
    )Changes in operating assets and liabilities:Accounts and other receivables, net
    
    
    14,879
    
    
    
    12,761Income tax receivable
    
    
    112,952
    
    
    
    (21,768
    )Insurance receivable
    
    
    
    
    
    
    (15,692
    )Inventories
    
    
    (105,412
    )
    
    
    65,139Prepaid expenses and other current assets
    
    
    (10,225
    )
    
    
    (710
    )Other assets
    
    
    15,113
    
    
    
    (664
    )Accounts payable
    
    
    73,062
    
    
    
    (57,429
    )Accrued liabilities
    
    
    (1,624
    )
    
    
    (25,146
    )Other non-current liabilities
    
    
    (953
    )
    
    
    17,314Net cash provided by (used in) operating activities
    
    
    119,527
    
    
    
    (49,624
    )Cash flows from investing activities:Capital expenditures
    
    
    (10,357
    )
    
    
    (9,182
    )Capital expenditures to rebuild the Big Spring refinery
    
    
    (32,135
    )
    
    
    Capital expenditures for turnarounds and catalysts
    
    
    (7,363
    )
    
    
    (1,609
    )Proceeds
from insurance to rebuild the Big Spring refinery
    
    
    34,125
    
    
    
    Sale of short-term investments, net
    
    
    
    
    
    
    27,296Dividends from investment in investees (net of equity earnings)
    
    
    721
    
    
    
    363Net cash (used in) provided by investing activities
    
    
    (15,009
    )
    
    
    16,868Cash flows from financing activities:Dividends paid to shareholders
    
    
    (1,873
    )
    
    
    (1,872
    )Dividends paid to non-controlling interest
    
    
    (144
    )
    
    
    (121
    )Deferred debt issuance costs
    
    
    (1,436
    )
    
    
    Revolving credit facilities, net
    
    
    (94,833
    )
    
    
    Payments on long-term debt
    
    
    (6,393
    )
    
    
    (2,731
    )Net cash used in financing activities
    
    
    (104,679
    )
    
    
    (4,724
    )Net decrease in cash and cash equivalents
    
    
    (161
    )
    
    
    (37,480
    )Cash and cash equivalents, beginning of period
    
    
    18,454
    
    
    
    68,615Cash and cash equivalents, end of period
    
    $
    18,293
    
    
    $
    31,135Supplemental cash flow information:Cash paid for interest
    
    $
    23,583
    
    
    $
    10,115Cash paid (refunds received) for income tax
    
    $
    (113,474
    )
    
    $
    (101
    )
  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
   (c) New Accounting Standards
 Employers Disclosures about Postretirement Benefit Plans Employers Disclosures about Pensions and Other
Postretirement Benefits
 Equity Method
Investment Accounting Considerations
 Accounting by Lessees
for Maintenance Deposits
 4




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
  Determination of the Useful Life
of Intangible Assets Goodwill and Other
Intangible Assets.
 Disclosure about Derivative Instruments and
Hedging Activities
 Fair Value
Measurements
 Partial Deferral of the
Effective Date of Statement 157
 Non-controlling Interests in Consolidated
Financial Statements, an Amendment of ARB 51
 December 31,
    
    
    
    
    
    December 31,2008
    
    Adjustments
    
    2008(as reported)
    
    
    
    
    
    (restated)Total stockholders equity
    
    $
    431,919
    
    
    $
    2,732
    
    
    $
    434,651Non-controlling interest in subsidiaries (1)
    
    
    
    
    
    
    17,916
    
    
    
    17,916Preferred
stock of subsidiary including accumulated dividends (1)
    
    
    
    
    
    
    84,300
    
    
    
    84,300Total equity
    
    $
    431,919
    
    
    $
    104,948
    
    
    $
    536,867
 
  5




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
  Business Combinations
 (d)
Reclassifications
  (2) Big Spring Refinery Fire
      (3) Krotz Springs Refinery Acquisition
    6




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
   Cash paid
    
    $
    474,494Transaction costs
    
    
    6,517Total purchase price
    
    $
    481,011
  Current assets
    
    $
    145,859Property, plant and equipment
    
    
    376,702Current liabilities
    
    
    (22,809
    )Other non-current liabilities
    
    
    (18,741
    )Total purchase price
    
    $
    481,011
   Unaudited Pro Forma Financial Information
  
    
    The acquisition of the Krotz Springs refining business occurred on January 1, 2008;
    
    $302,000 of term debt and $141,494 of borrowings under the revolver was incurred on
January 1, 2008 to fund the acquisition and buy initial inventories; and
    
    Depreciation expense was higher beginning January 1, 2008 based upon the revaluation of
estimated asset values as of that date.
 7




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
 
 Three Months EndedMarch 31,2009
    
    
    2008(unaudited)
    
    (pro forma)Net sales
    
    $
    722,180
    
    
    $
    1,652,785Operating income (loss)
    
    
    59,581
    
    
    
    (71,902
    )Net income (loss)
    
    
    17,351
    
    
    
    (57,017
    )Earnings
(loss) per share, basic
    
    $
    0.37
    
    
    $
    (1.22
    )
 (4) Segment Data
  (a) Refining and Unbranded Marketing Segment
  (b) Asphalt Segment
  (c) Retail and Branded Marketing Segment
  (d) Corporate
  8




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
  Refining and
    
    
    
    
    
    Retail andUnbranded
    
    
    
    
    
    Branded
    
    
    
    
    
    ConsolidatedThree Months ended March 31, 2009
    
    Marketing
    
    Asphalt
    
    Marketing
    
    Corporate
    
    TotalNet sales to external customers
    
    $
    503,950
    
    
    $
    50,760
    
    
    $
    167,470
    
    
    $
    
    
    
    $
    722,180Intersegment sales/purchases
    
    
    82,978
    
    
    
    (44,528
    )
    
    
    (38,450
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    18,037
    
    
    
    538
    
    
    
    3,368
    
    
    
    147
    
    
    
    22,090Operating income (loss)
    
    
    80,199
    
    
    
    (21,658
    )
    
    
    1,377
    
    
    
    (337
    )
    
    
    59,581Total assets
    
    
    1,965,849
    
    
    
    237,401
    
    
    
    190,320
    
    
    
    14,224
    
    
    
    2,407,794Turnaround, chemical catalyst and
capital expenditures
    
    
    48,896
    
    
    
    162
    
    
    
    219
    
    
    
    578
    
    
    
    49,855
 Refining and
    
    
    
    
    
    Retail andUnbranded
    
    
    
    
    
    Branded
    
    
    
    
    
    ConsolidatedThree Months ended March 31, 2008
    
    Marketing
    
    Asphalt
    
    Marketing
    
    Corporate
    
    TotalNet sales to external customers
    
    $
    607,569
    
    
    $
    103,940
    
    
    $
    309,254
    
    
    $
    
    
    
    $
    1,020,763Intersegment sales/purchases
    
    
    164,470
    
    
    
    (101,919
    )
    
    
    (62,551
    )
    
    
    
    
    
    
    Depreciation and amortization
    
    
    9,630
    
    
    
    532
    
    
    
    3,360
    
    
    
    223
    
    
    
    13,745Operating income (loss)
    
    
    (42,561
    )
    
    
    (1,929
    )
    
    
    (2,409
    )
    
    
    (374
    )
    
    
    (47,273
    )Total assets
    
    
    923,477
    
    
    
    305,604
    
    
    
    228,465
    
    
    
    10,864
    
    
    
    1,468,410Turnaround, chemical catalyst
and capital expenditures
    
    
    9,311
    
    
    
    213
    
    
    
    1,127
    
    
    
    140
    
    
    
    10,791
   (5) Cash and Cash Equivalents
  (6) Fair Value
   9




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
  Quoted PricesinActive Markets
    
    Significantfor Identical
    
    Other
    
    SignificantAssets or
    
    Observable
    
    UnobservableLiabilities
    
    Inputs
    
    Inputs
    
    Consolidated(Level 1)
    
    (Level 2)
    
    (Level 3)
    
    TotalAs of March 31, 2009Assets:Commodity swaps
    
    $
    
    
    
    $
    138,819
    
    
    $
    
    
    $
    138,819Futures and forwards
    
    
    383
    
    
    
    
    
    
    
    
    
    
    383Liabilities:Commodity swaps
    
    
    
    
    
    
    26,373
    
    
    
    
    
    
    26,373Interest rate swaps
    
    
    
    
    
    
    25,063
    
    
    
    
    
    
    25,063As of December 31, 2008Assets:Commodity swaps
    
    $
    
    
    
    $
    117,485
    
    
    $
    
    
    $
    117,485Liabilities:Futures and forwards
    
    
    1,197
    
    
    
    
    
    
    
    
    
    
    1,197Commodity swaps
    
    
    
    
    
    
    25,473
    
    
    
    
    
    
    25,473Interest rate swaps
    
    
    
    
    
    
    26,100
    
    
    
    
    
    
    26,100
 (7) Derivative Financial Instruments
 Commodity Derivatives  Mark to Market
    10




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
  Cash Flow Hedges
  Interest Rate Derivatives.
   Commodity Derivatives.
  11




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
  March 31,Counterparty Credit Quality (1)
    
    2009AAA
    
    $
    AA
    
    
    100,316A
    
    
    (12,777
    )Lower than A
    
    
    227Total
    
    $
    87,766
 
 (1)
    
    As determined by nationally recognized statistical ratings organizations.  March 31, 2009Asset Derivatives
    
    
    Liability DerivativesBalance Sheet
    
    Fair
    
    
    Balance Sheet
    
    FairLocation
    
    Value
    
    
    Location
    
    ValueDerivatives not designated as hedging
instruments under FAS 133:Commodity contracts (futures & forwards)
    
    Accounts receivable
    
    $
    139
    
    
    Accrued liabilities
    
    $
    (244
    )Commodity contracts (heating oil swaps)
    
    Current portion of heating oil crack spread
    
    
    138,819
    
    
    
    
    
    Commodity contracts (SPR swaps)
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    11,891Commodity contracts (SPR swaps)
    
    
    
    
    
    
    
    Other non-current liabilities
    
    
    14,482Total derivatives not designated as
hedging instruments under FAS 133
    
    
    
    $
    138,958
    
    
    
    
    $
    26,129Derivatives designated as hedging
instruments under FAS 133:Other non-currentInterest rate swaps
    
    
    
    $
    
    
    
    liabilities
    
    $
    25,063Total derivatives designated as hedging
instruments under FAS 133
    
    
    
    
    
    
    
    
    
    
    25,063Total derivatives
    
    
    
    $
    138,958
    
    
    
    
    $
    51,192
 12




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
  For the Three Months EndedMarch 31, 2009Gain (Loss) Reclassified fromAccumulated OCI intoGain (Loss)
    
    
    Gain (Loss) Reclassified from
    
    
    Income (Ineffective PortionCash Flow Hedging
    
    Recognized
    
    
    Accumulated OCI into Income
    
    
    and Amount Excluded fromRelationships
    
    in OCI
    
    
    (Effective Portion)
    
    
    Effectiveness Testing)Location
    
    Amount
    
    
    Location
    
    AmountCommodity
contracts (heating oil
swaps)
    
    $
    
    
    
    Cost of sales
    
    $
    946
    
    
    
    
    $
    Interest rate swaps
    
    
    1,037
    
    
    Interest expense
    
    
    (3,446
    )
    
    
    
    
    Total derivatives
    
    $
    1,037
    
    
    
    
    $
    (2,500
    )
    
    
    
    $
    
 For the Three Months EndedMarch 31, 2009Derivatives not designated as hedging instruments
    
    Gain (Loss) Recognized in Incomeunder FAS 133:
    
    Location

    
    AmountCommodity contracts  (futures & forwards)
    
    Cost of sales
    
    $
    1,580Commodity contracts (heating oil swaps)
    
    Cost of sales
    
    
    21,334Commodity contracts (SPR swaps)
    
    Cost of sales
    
    
    (900
    )Total derivatives
    
    
    
    
    
    $
    22,014
 (8) Inventories
   March 31,
    
    
    December 31,2009
    
    
    2008Crude oil, refined products, asphalt and blendstocks
    
    $
    297,517
    
    
    $
    192,997Materials and supplies
    
    
    17,280
    
    
    
    16,456Store merchandise
    
    
    19,162
    
    
    
    19,875Store fuel
    
    
    3,773
    
    
    
    2,992Total inventories
    
    $
    337,732
    
    
    $
    232,320
   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)
 (9) Property, Plant and Equipment, Net
  March 31,
    
    
    December 31,2009
    
    
    2008Refining facilities
    
    $
    1,483,275
    
    
    $
    1,430,896Pipelines and terminals
    
    
    39,269
    
    
    
    39,161Retail
    
    
    134,606
    
    
    
    134,263Other
    
    
    13,630
    
    
    
    13,052Property, plant and equipment, gross
    
    
    1,670,780
    
    
    
    1,617,372Less accumulated depreciation
    
    
    (188,422
    )
    
    
    (168,413
    )Property, plant and equipment, net
    
    $
    1,482,358
    
    
    $
    1,448,959
 (10) Additional Financial Information
  (a) Other Assets
 March 31,
    
    
    December 31,2009
    
    
    2008Deferred turnaround and chemical catalyst cost
    
    $
    17,390
    
    
    $
    11,684Environmental receivables
    
    
    5,625
    
    
    
    8,524Deferred debt issuance costs
    
    
    35,426
    
    
    
    35,648Intangible assets
    
    
    6,921
    
    
    
    7,055Deposit for hedge related activities for Krotz Springs refinery acquisition
    
    
    50,000
    
    
    
    50,000Other
    
    
    10,355
    
    
    
    12,207Total other assets
    
    $
    125,717
    
    
    $
    125,118
 (b) Accrued Liabilities and Other Non-Current Liabilities
 March 31,
    
    
    December 31,2009
    
    
    2008Accrued Liabilities:Taxes other than income taxes, primarily excise taxes
    
    $
    20,303
    
    
    $
    27,789Employee costs
    
    
    6,015
    
    
    
    4,884Commodity swaps
    
    
    11,647
    
    
    
    26,670Contingent
liability
    
    
    17,500
    
    
    
    Other
    
    
    51,246
    
    
    
    51,974Total accrued liabilities
    
    $
    106,711
    
    
    $
    111,317Other Non-Current Liabilities:Pension and other postemployment benefit liabilities, net (Note 11)
    
    $
    36,559
    
    
    $
    35,989Environmental accrual
    
    
    31,815
    
    
    
    33,181Interest rate swap valuations
    
    
    25,063
    
    
    
    26,100Commodity swaps
    
    
    14,482
    
    
    
    Contingent
liability
    
    
    17,500
    
    
    
    Other
    
    
    9,032
    
    
    
    8,920Total other non-current liabilities
    
    $
    134,451
    
    
    $
    104,190
 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)
 (c) Comprehensive Income
  Three Months EndedMarch 31,2009
    
    
    2008Income (loss) before non-controlling interest in income (loss)
of subsidiaries and accumulated dividends on preferred stock of
subsidiary
    
    $
    20,584
    
    
    $
    (35,775
    )Other comprehensive gain (loss), net of tax:Unrealized gain (loss) on cash flow hedges, net of tax
    
    
    (272
    )
    
    
    (9,199
    )Total other comprehensive income (loss), net of tax
    
    
    (272
    )
    
    
    (9,199
    )Comprehensive income (loss)
    
    
    20,312
    
    
    
    (44,974
    )Comprehensive
income (loss)  attributable to non-controlling
interest (including accumulated dividends on preferred
shares of subsidiary)
    
    
    3,214
    
    
    
    (2,754
    )Comprehensive income (loss)  attributable to common shareholders
    
    $
    17,098
    
    
    $
    (42,220
    )
  March 31,
    
    
    December 31,2009
    
    
    2008Unrealized losses on cash flow hedges, net of tax
    
    $
    (18,257
    )
    
    $
    (18,005
    )Pension and post-employment benefits, net of tax
    
    
    (19,349
    )
    
    
    (19,349
    )Accumulated other comprehensive loss, net of tax
    
    $
    (37,606
    )
    
    $
    (37,354
    )
 (11) Employee and Postretirement Benefits
   For the Three Months EndedMarch 31,2009
    
    
    2008Components of net periodic benefit cost:Service cost
    
    $
    837
    
    
    $
    457Interest cost
    
    
    841
    
    
    
    748Expected return on plan assets
    
    
    (840
    )
    
    
    (822
    )Amortization of net loss
    
    
    263
    
    
    
    53Net periodic benefit cost
    
    $
    1,101
    
    
    $
    436
 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)
 (12) Long-Term Debt
  March 31,
    
    
    December 31,2009
    
    
    2008Term loan credit facilities
    
    $
    735,025
    
    
    $
    739,810Revolving credit facilities
    
    
    181,985
    
    
    
    276,818Retail credit facilities
    
    
    85,333
    
    
    
    86,941Total debt
    
    
    1,002,343
    
    
    
    1,103,569Less current portion
    
    
    (31,564
    )
    
    
    (28,397
    )Total long-term debt
    
    $
    970,779
    
    
    $
    1,075,172
 (a) Alon USA Energy, Inc. Credit Facilities
 Term Loan Credit Facility
   Letters of Credit Facility.
 (b) Alon USA, LP Credit Facilities
 Revolving
Credit Facility.
 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)
    (c) Paramount Petroleum Corporation Credit Facility
 Revolving Credit Facility.
  (d) Alon Refining Krotz Springs, Inc. Credit Facilities
 Term Loan Credit Facility
   17




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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)
   Revolving Credit Facility.
       (e) Retail Credit Facilities
    18




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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)
  (f) Other Retail Related Credit Facilities
   (13) Stock-Based Compensation
  (a) 2005 Incentive Compensation Plan (share value in dollars)
  Restricted Stock.
  19




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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)
  Weighted AverageNonvested Shares
    
    Shares
    
    
    Grant Date Fair ValuesNonvested at January 1, 2008
    
    
    26,918
    
    
    $
    21.74Granted
    
    
    5,577
    
    
    
    13.45Vested
    
    
    (24,833
    )
    
    
    20.54Forfeited
    
    
    
    
    
    
    Nonvested at December 31, 2008
    
    
    7,662
    
    
    $
    19.58Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Nonvested at March 31, 2009
    
    
    7,662
    
    
    $
    19.58
  Stock Appreciation Rights
   (b) 2000 Incentive Stock Compensation Plan
  20




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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, 2008
    
    
    5,216
    
    
    $
    100
    
    
    
    1,959
    
    
    $
    100Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (2,423
    )
    
    
    100
    
    
    
    (910
    )
    
    
    100Forfeited and expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at December 31, 2008
    
    
    2,793
    
    
    $
    100
    
    
    
    1,049
    
    
    $
    100Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited and expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2009
    
    
    2,793
    
    
    $
    100
    
    
    
    1,049
    
    
    $
    100
  (14) Stockholders Equity (per share in dollars)
 Common Stock Dividends
  (15) Earnings (Loss) Per Share (earnings per share in dollars)
   Three Months EndedMarch 31,2009
    
    
    2008Net income (loss)
    
    $
    17,351
    
    
    $
    (33,578
    )Average number of shares of common stock outstanding
    
    
    46,806
    
    
    
    46,782Dilutive restricted shares, SARs and conversion of preferred shares
    
    
    5,562
    
    
    
    Average number of shares of common stock outstanding assuming dilution
    
    
    52,368
    
    
    
    46,782Earnings (loss) per share  basic
    
    $
    0.37
    
    
    $
    (0.72
    )Earnings (loss) per share  diluted *
    
    $
    0.37
    
    
    $
    (0.72
    )
 
 *
    
    For the purpose of adjusting net income (loss) in the calculation of diluted earnings (loss)
per share issued by Alons subsidiaries, the effect for the three months ended March 31, 2009
was $193, but for the three months ended March 31, 2008 the effect is anti-dilutive and
therefore excluded from the calculation. Additionally, net income for the three months ended
March 31, 2009 was adjusted $1,996 for preferred stock dividends
that would no longer be accrued
if the preferred stock was converted to shares of common stock. 21




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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)
 (16) Related Party Transactions
 Sale of Preferred Shares
      22




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ALON USA ENERGY, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited, dollars in thousands except as noted)
 (17) Commitments and Contingencies
 (a) Commitments
  Offtake Agreement with Valero
  (b) Contingencies
  (c) Environmental
     23




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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)
  (18) Subsequent Event
 Dividend Declared
  Krotz Term Loan Amendment
  24




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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 our
Annual Report on Form 10-K for the year ended December 31, 2008. In this document, the words
Alon, the Company, we and our refer to Alon USA Energy, Inc. and its subsidiaries.
 
 Forward-Looking Statements
    
    
    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;
    
    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;
    
    our planned project of the design and construction of a hydrocracker unit at our
California refineries may not be completed within the expected time frame or within the
budgeted costs for such project due to factors outside of our control;
 25




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##### Table of Contents




    
    the global financial crisis impact on our business and financial condition in ways
that we currently cannot predict. We may face significant challenges if conditions in the
financial markets do not improve or continue to worsen, such as adversely impacting our
ability to refinance existing credit facilities or extend their terms; and
    
    the other factors discussed in our Annual Report on Form 10-K for the year ended
December 31, 2008 under the caption Risk Factors.
  Company Overview
  Refining and Unbranded Marketing Segment
    Asphalt Segment
 Retail and Branded Marketing Segment
 26




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##### Table of Contents



First Quarter Operational and Financial Highlights
  
    
    The combined refineries throughput for the first quarter of 2009 averaged 146,890
barrels per day (bpd), consisting of an average of 64,417 bpd at the Big Spring refinery,
an average of 28,761 bpd at the California refineries and an average of 53,712 bpd at the
Krotz Springs refinery compared to a combined average of 66,682 bpd in the first quarter of
2008, consisting of an average of 29,270 bpd at the Big Spring refinery and an average of
37,412 bpd at the California refineries.
    
    Our average refinery operating margin for the Big Spring refinery increased $7.09 per
barrel to $13.63 per barrel for the three months ended March 31, 2009, compared to $6.54
per barrel for the three months ended March 31, 2008. This increase was attributable mainly
to the 2008 fire at the Big Spring refinery.
    
    Our California refineries operating margin for the three months ended March 31, 2009
increased $2.96 per barrel to $1.16 per barrel, compared to ($1.80) per barrel for the
three months ended March 31, 2008. This increase was primarily from a 56% decrease in WTI
prices from $98.00 per barrel in the first quarter of 2008 to $43.10 per barrel in the
first quarter of 2009.
    
    The increased margin environment for the first quarter of 2009 was partially offset by
contraction of sweet/sour and light/heavy crude oil differentials. The average sweet/sour
spread for the three months ended March 31, 2009 was $0.94 per barrel compared to $4.67 per
barrel for the three months ended March 31, 2008. The average light/heavy spread for the
three months ended March 31, 2009 was $4.52 per barrel compared to $16.85 per barrel for
the three months ended March 31, 2008.
    
    We received insurance proceeds of $34.1 million related to the rebuild of the Big Spring
refinery and received cash of approximately $113 million from income tax receivables.
    
    Asphalt margins in the first quarter of 2009 were ($51.48) per ton compared to $42.31
per ton in the first quarter of 2008. The lower asphalt margins were a result of a charge
to cost of goods sold in the first quarter of 2009 due to a build-up of winter fill
inventories that will be sold primarily during the second and third quarters, while asphalt
prices were declining. Also, the average asphalt sales price decreased 20.7% from $396.07
per ton in the first quarter of 2008 to $314.16 per ton in the first quarter of 2009 for
blended asphalt and the average asphalt sales price decreased 30.2% from $177.30 per ton in
the first quarter of 2008 to $123.73 per ton in the first quarter of 2009 for non-blended
asphalt. The percentage decrease in asphalt sales price for both blended and non-blended
asphalt was less than the 56% decrease in WTI prices for the same periods.
 27




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##### Table of Contents




    
    On April 2, 2009, 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 16, 2009.
 Major Influences on Results of Operations
 Refining and Unbranded Marketing
       28




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##### Table of Contents



Asphalt
  Retail and Branded Marketing
  Factors Affecting Comparability
    29




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##### Table of Contents



Results of Operations
 Net Sales
  Cost of Sales
 Direct Operating Expenses
 Selling, General and Administrative Expenses
 Summary Financial Tables
 30




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ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
 Summary Financial Tables
 For the Three Months EndedMarch 31,2009
    
    
    2008(dollars in thousands, except per share data)STATEMENT OF OPERATIONS DATA:Net sales (1)
    
    $
    722,180
    
    
    $
    1,020,763Operating costs and expenses:Cost of sales
    
    
    539,730
    
    
    
    968,997Direct operating expenses
    
    
    68,864
    
    
    
    42,289Selling, general and administrative expenses (2)
    
    
    31,915
    
    
    
    28,854Net costs associated with fire (3)
    
    
    
    
    
    
    16,462Depreciation and amortization (4)
    
    
    22,090
    
    
    
    13,745Total operating costs and expenses
    
    
    662,599
    
    
    
    1,070,347Gain on disposition of assets
    
    
    
    
    
    
    2,311Operating income (loss)
    
    
    59,581
    
    
    
    (47,273
    )Interest expense (5)
    
    
    (28,256
    )
    
    
    (10,656
    )Equity earnings (loss) of investees
    
    
    (3
    )
    
    
    316Other income, net
    
    
    257
    
    
    
    745Income (loss) before income tax expense (benefit),
non-controlling interest in income (loss) of
subsidiaries and accumulated dividends on preferred
stock of subsidiary
    
    
    31,579
    
    
    
    (56,868
    )Income tax expense (benefit)
    
    
    10,995
    
    
    
    (21,093
    )Income (loss) before non-controlling interest in income
(loss) of subsidiaries and accumulated dividends on
preferred stock of subsidiary
    
    
    20,584
    
    
    
    (35,775
    )Non-controlling interest in income (loss) of subsidiaries
    
    
    1,083
    
    
    
    (2,197
    )Accumulated dividends on preferred stock of subsidiary
    
    
    2,150
    
    
    
    Net income (loss)
    
    $
    17,351
    
    
    $
    (33,578
    )Earnings (loss) per share, basic and diluted
    
    $
    0.37
    
    
    $
    (0.72
    )Weighted average shares outstanding, basic (in thousands)
    
    
    46,806
    
    
    
    46,782Cash dividends per share
    
    $
    0.04
    
    
    $
    0.04CASH FLOW DATA:Net cash provided by (used in):Operating activities
    
    $
    119,527
    
    
    $
    (49,624
    )Investing activities
    
    
    (15,009
    )
    
    
    16,868Financing activities
    
    
    (104,679
    )
    
    
    (4,724
    )OTHER DATA:Adjusted EBITDA (6)
    
    $
    81,925
    
    
    $
    (34,778
    )Capital expenditures (7)
    
    
    10,357
    
    
    
    9,182Capital expenditures to rebuild the Big Spring refinery
    
    
    32,135
    
    
    
    Capital expenditures for turnaround and chemical catalyst
    
    
    7,363
    
    
    
    1,609
 31




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March 31,
    
    December 31,2009
    
    2008BALANCE SHEET DATA (end of period):Cash and cash equivalents
    
    $
    18,293
    
    
    $
    18,454Working capital
    
    
    186,869
    
    
    
    250,384Total assets
    
    
    2,407,794
    
    
    
    2,413,433Total debt
    
    
    1,002,343
    
    
    
    1,103,569Total equity
    
    
    555,583
    
    
    
    536,867
 
 (1)
    
    Includes excise taxes on sales by the retail and branded marketing segment of $11,044 and
$9,654 for the three months ended March 31, 2009 and 2008, respectively.(2)
    
    Includes corporate headquarters selling, general and administrative expenses of $190 and $151
for the three months ended March 31, 2009 and 2008, respectively, which are not allocated to
our three operating segments.(3)
    
    Net costs associated with fire for the three months ended March 31, 2008 includes $11,672 of
expenses incurred from pipeline commitment deficiencies, crude sale losses and other
incremental costs; $4,000 for our insurance deductibles under the insurance policies; and $790
for depreciation for the temporarily idled facilities.(4)
    
    Includes corporate depreciation and amortization of $147 and $223 for the three months ended
March 31, 2009 and 2008, respectively, which are not allocated to our three operating
segments.(5)
    
    Interest expense of $28,256 for the three months ended March 31, 2009 includes $5,715 related
to the unwind of the heating oil hedge. The remaining increase compared to interest expense
of $10,656 for the three months ended March 31, 2008 is primarily due to interest on
borrowings related to the Krotz Springs refinery acquisition and operations.(6)
    
    Adjusted EBITDA represents earnings before non-controlling interest in income of
subsidiaries, income tax expense, interest expense, depreciation and amortization and gain on
disposition of assets. Adjusted EBITDA is not a recognized measurement under GAAP; however,
the amounts included in 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 during periods of normal operations 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 non-controlling
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 that may
vary for different companies for reasons unrelated to overall operating performance.Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in
isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these
limitations are: 
    
    Adjusted EBITDA does not reflect our cash expenditures or future requirements for
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 non-controlling interest
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
 32




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##### Table of Contents




    
    Our calculation of Adjusted EBITDA may differ from EBITDA calculations of other
companies in our industry, limiting its usefulness as a comparative measure.
 
 Because of these limitations, Adjusted EBITDA should not be considered a measure of
discretionary cash available to us to invest in the growth of our business. We compensate
for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA
only supplementally.The following table reconciles net income (loss) to Adjusted EBITDA for the three months
ended March 31, 2009 and 2008, respectively: For the Three Months EndedMarch 31,2009
    
    
    2008(dollars in thousands)Net income (loss)
    
    $
    17,351
    
    
    $
    (33,578
    )Non-controlling interest in income of
subsidiaries (including accumulated
dividends on preferred stock of
subsidiary)
    
    
    3,233
    
    
    
    (2,197
    )Income tax expense (benefit)
    
    
    10,995
    
    
    
    (21,093
    )Interest expense
    
    
    28,256
    
    
    
    10,656Depreciation and amortization
    
    
    22,090
    
    
    
    13,745Gain on disposition of assets
    
    
    
    
    
    
    (2,311
    )Adjusted EBITDA
    
    $
    81,925
    
    
    $
    (34,778
    )
 
 Adjusted EBITDA for the three months ended  March 31, 2008 includes net costs associated with fire
at the Big Spring refinery of $16,462.(7)
    
    Includes corporate capital expenditures of $578 and
$140 for the three months ended March 31, 2009 and 2008,
respectively, which are not allocated to our three
operating segments. 33




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##### Table of Contents



REFINING AND UNBRANDED MARKETING SEGMENT
 For the Three Months EndedMarch 31,2009
    
    
    2008(dollars in thousands, except perbarrel data and pricing statistics)STATEMENTS OF OPERATIONS DATA:Net sales (1)
    
    $
    586,928
    
    
    $
    772,039Operating costs and expenses:Cost of sales
    
    
    422,994
    
    
    
    755,957Direct operating expenses
    
    
    58,371
    
    
    
    30,473Selling, general and administrative expenses
    
    
    7,327
    
    
    
    4,389Net costs associated with fire (2)
    
    
    
    
    
    
    16,462Depreciation and amortization
    
    
    18,037
    
    
    
    9,630Total operating costs and expenses
    
    
    506,729
    
    
    
    816,911Gain on disposition of assets
    
    
    
    
    
    
    2,311Operating income (loss)
    
    $
    80,199
    
    
    $
    (42,561
    )KEY OPERATING STATISTICS:Total unbranded sales volume (bpd)
    
    
    122,459
    
    
    
    63,707Per barrel of throughput:Refinery operating margin  Big Spring (3)
    
    $
    13.63
    
    
    $
    6.54Refinery operating margin  CA Refineries (3)
    
    
    1.16
    
    
    
    (1.80
    )Refinery operating margin  Krotz Springs (3)
    
    
    13.19
    
    
    
    N/ARefinery direct operating expenses  Big Spring (4)
    
    
    3.60
    
    
    
    5.93Refinery direct operating expenses  CA Refineries (4)
    
    
    5.84
    
    
    
    4.31Refinery direct operating expenses  Krotz Springs (4)
    
    
    4.63
    
    
    
    N/ACapital expenditures
    
    
    9,398
    
    
    
    7,702Capital expenditures to rebuild Big Spring refinery
    
    
    32,135
    
    
    
    Capital expenditures for turnaround and chemical catalyst
    
    
    7,363
    
    
    
    1,609PRICING STATISTICS:WTI crude oil (per barrel)
    
    $
    43.10
    
    
    $
    98.00WTS crude oil (per barrel)
    
    
    42.16
    
    
    
    93.33MAYA crude oil (per barrel)
    
    
    38.58
    
    
    
    81.15Crack spreads (3/2/1) (per barrel):Gulf Coast
    
    $
    9.65
    
    
    $
    9.42Group III
    
    
    9.72
    
    
    
    10.10West Coast
    
    
    17.92
    
    
    
    16.53Crack spreads (6/1/2/3) (per barrel):West Coast
    
    $
    6.21
    
    
    $
    (0.86
    )Crack spreads (2/1/1) (per barrel):Gulf Coast high sulfur diesel
    
    $
    9.48
    
    
    $
    9.52Crude oil differentials (per barrel):WTI less WTS
    
    $
    0.94
    
    
    $
    4.67WTI less MAYA
    
    
    4.52
    
    
    
    16.85Product price (dollars per gallon):Gulf Coast unleaded gasoline
    
    $
    1.218
    
    
    $
    2.431Gulf Coast ultra low-sulfur diesel
    
    
    1.331
    
    
    
    2.811Group III unleaded gasoline
    
    
    1.232
    
    
    
    2.449Group III ultra low-sulfur diesel
    
    
    1.309
    
    
    
    2.823West Coast LA CARBOB (unleaded gasoline)
    
    
    1.505
    
    
    
    2.690West Coast LA ultra low-sulfur diesel
    
    
    1.349
    
    
    
    2.799Natural gas (per MMBTU)
    
    $
    4.47
    
    
    $
    8.74
 34




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##### Table of Contents



THROUGHPUT AND YIELD DATA: 
BIG SPRING
 For the Three Months EndedMarch 31,2009
    
    
    2008bpd
    
    
    %
    
    
    bpd
    
    
    %Refinery throughput:Sour crude
    
    
    55,452
    
    
    
    86.1
    
    
    
    25,034
    
    
    
    85.6Sweet crude
    
    
    7,864
    
    
    
    12.2
    
    
    
    2,378
    
    
    
    8.1Blendstocks
    
    
    1,101
    
    
    
    1.7
    
    
    
    1,858
    
    
    
    6.3Total refinery throughput (5)
    
    
    64,417
    
    
    
    100.0
    
    
    
    29,270
    
    
    
    100.0Refinery production:Gasoline
    
    
    28,265
    
    
    
    44.9
    
    
    
    13,976
    
    
    
    48.0Diesel/jet
    
    
    21,737
    
    
    
    34.5
    
    
    
    7,640
    
    
    
    26.2Asphalt
    
    
    5,228
    
    
    
    8.3
    
    
    
    3,098
    
    
    
    10.6Petrochemicals
    
    
    3,026
    
    
    
    4.8
    
    
    
    1,402
    
    
    
    4.8Other
    
    
    4,672
    
    
    
    7.5
    
    
    
    3,046
    
    
    
    10.4Total refinery production (6)
    
    
    62,928
    
    
    
    100.0
    
    
    
    29,162
    
    
    
    100.0Refinery utilization (7)
    
    
    
    
    
    
    90.5
    %
    
    
    
    
    
    
    40.8
    %
 THROUGHPUT AND YIELD DATA:
CALIFORNIA REFINERIES
 For the Three Months EndedMarch 31,2009
    
    
    2008bpd
    
    
    %
    
    
    bpd
    
    
    %Refinery throughput:Sour crude
    
    
    12,225
    
    
    
    42.5
    
    
    
    10,702
    
    
    
    28.6Heavy crude
    
    
    16,498
    
    
    
    57.4
    
    
    
    25,551
    
    
    
    68.3Blendstocks
    
    
    38
    
    
    
    0.1
    
    
    
    1,159
    
    
    
    3.1Total refinery throughput (5)
    
    
    28,761
    
    
    
    100.0
    
    
    
    37,412
    
    
    
    100.0Refinery production:Gasoline
    
    
    3,266
    
    
    
    11.5
    
    
    
    5,505
    
    
    
    15.3Diesel/jet
    
    
    6,215
    
    
    
    22.0
    
    
    
    8,622
    
    
    
    23.9Asphalt
    
    
    8,735
    
    
    
    30.9
    
    
    
    10,398
    
    
    
    28.9Light unfinished
    
    
    1,909
    
    
    
    6.7
    
    
    
    0
    
    
    
    0.0Heavy unfinished
    
    
    7,796
    
    
    
    27.6
    
    
    
    11,282
    
    
    
    31.4Other
    
    
    370
    
    
    
    1.3
    
    
    
    197
    
    
    
    0.5Total refinery production (6)
    
    
    28,291
    
    
    
    100.0
    
    
    
    36,004
    
    
    
    100.0Refinery utilization (7)
    
    
    
    
    
    
    58.5
    %
    
    
    
    
    
    
    50.0
    %
 THROUGHPUT AND YIELD DATA:
KROTZ SPRINGS
 For the Three Months 
EndedMarch 31,2009bpd
    
    
    %Refinery throughput:Light sweet crude
    
    
    27,423
    
    
    
    51.1Heavy sweet crude
    
    
    20,083
    
    
    
    37.4Blendstocks
    
    
    6,206
    
    
    
    11.5Total refinery throughput (5)
    
    
    53,712
    
    
    
    100.0Refinery production:Gasoline
    
    
    24,449
    
    
    
    44.7Diesel/jet
    
    
    24,468
    
    
    
    44.7Heavy oils
    
    
    887
    
    
    
    1.6Other
    
    
    4,885
    
    
    
    9.0Total refinery production (6)
    
    
    54,689
    
    
    
    100.0Refinery utilization (7)
    
    
    
    
    
    
    57.2
    %
 35




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##### Table of Contents



(1)
    
    Net sales include intersegment sales to our asphalt and retail and branded marketing segments
at prices which approximate wholesale market price. These intersegment sales are eliminated
through consolidation of our financial statements.(2)
    
    Net costs associated with fire for the three months ended March 31, 2008 includes $11,672 of
expenses incurred from pipeline commitment deficiencies, crude sale losses and other
incremental costs; $4,000 for our insurance deductibles under the insurance policies; and $790
for depreciation for the temporarily idled facilities.(3)
    
    Refinery operating margin is a per barrel measurement calculated by dividing the margin
between net sales and cost of sales (exclusive of unrealized hedging gains and losses)
attributable to each refinery by the 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. There were unrealized hedging gains of $133 and $4,788 for the
three months ended March 31, 2009 and 2008, respectively, for the California refineries. There
were unrealized hedging gains of $18,026 for the Krotz Springs refinery for the three months
ended March 31, 2009. The Big Spring refinery had no unrealized hedge gains or losses for the
three months ended March 31, 2009 or 2008.(4)
    
    Refinery direct operating expense is a per barrel measurement calculated by dividing direct
operating expenses at our Big Spring, California, and Krotz Springs refineries, exclusive of
depreciation and amortization, by the applicable refinerys total throughput volumes.(5)
    
    Total refinery throughput represents the total barrels per day of crude oil and blendstock
inputs in the refinery production process.(6)
    
    Total refinery production represents the barrels per day of various products produced from
processing crude and other refinery feedstocks through the crude units and other conversion
units at the refineries. Total refinery production at the Big Spring refinery for the three
months ended March 31, 2008 was reduced due to the fire on February 18, 2008.(7)
    
    Refinery utilization represents average daily crude
oil throughput divided by crude oil capacity, excluding
planned periods of downtime for maintenance and
turnarounds. The 2008 refinery utilization at our Big
Spring refinery was affected by the fire on February
18, 2008 which ceased production at the refinery until
limited operations were resumed on April 5, 2008. 36




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##### Table of Contents



ASPHALT SEGMENT
 For the Three Months EndedMarch 31,2009
    
    
    2008(dollars in thousands,except per ton data)STATEMENTS OF OPERATIONS DATA:Net sales
    
    $
    50,760
    
    
    $
    103,940Operating costs and expenses:Cost of sales (1)
    
    
    60,233
    
    
    
    92,135Direct operating expenses
    
    
    10,493
    
    
    
    11,816Selling, general and administrative expenses
    
    
    1,154
    
    
    
    1,386Depreciation and amortization
    
    
    538
    
    
    
    532Total operating costs and expenses
    
    
    72,418
    
    
    
    105,869Operating income (loss)
    
    $
    (21,658
    )
    
    $
    (1,929
    )KEY OPERATING STATISTICS:Blended asphalt sales volume (tons in thousands) (2)
    
    
    147
    
    
    
    249Non-blended asphalt sales volume (tons in thousands) (3)
    
    
    37
    
    
    
    30Blended asphalt sales price per ton (2)
    
    
    314.16
    
    
    
    396.67Non-blended asphalt sales price per ton (3)
    
    
    123.73
    
    
    
    177.30Asphalt margin per ton (4)
    
    $
    (51.48
    )
    
    $
    42.31Capital expenditures
    
    $
    162
    
    
    $
    213
 
 (1)
    
    Cost of sales includes intersegment purchases of asphalt blends from our refining and
unbranded marketing segment at prices which approximate wholesale market prices. These
intersegment purchases are eliminated through consolidation of our financial statements.(2)
    
    Blended asphalt represents base asphalt that has been blended with other materials necessary
to sell the asphalt as a finished product.(3)
    
    Non-blended asphalt represents base material asphalt and other components that require
additional blending before being sold as a finished product.(4)
    
    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
asphalt sales. 37




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##### Table of Contents



RETAIL AND BRANDED MARKETING SEGMENT
 For the Three Months EndedMarch 31,2009
    
    
    2008(dollars in thousands,except per gallon data)STATEMENTS OF OPERATIONS DATA:Net sales (1)
    
    $
    167,470
    
    
    $
    309,254Operating costs and expenses:Cost of sales (2)
    
    
    139,481
    
    
    
    285,375Selling, general and administrative expenses
    
    
    23,244
    
    
    
    22,928Depreciation and amortization
    
    
    3,368
    
    
    
    3,360Total operating costs and expenses
    
    
    166,093
    
    
    
    311,663Operating income (loss)
    
    $
    1,377
    
    
    $
    (2,409
    )KEY OPERATING STATISTICS:Integrated branded fuel sales (thousands of gallons) (3)
    
    
    63,646
    
    
    
    54,158Integrated branded fuel margin (cents per gallon) (3)
    
    
    4.7
    ¢
    
    
    1.8
    ¢Non-Integrated branded fuel sales (thousands of gallons) (3)
    
    
    3,146
    
    
    
    38,269Non-Integrated branded fuel margin (cents per gallon) (3)
    
    
    10.1
    ¢
    
    
    (0.2
    )¢Number of stores (end of period)
    
    
    306
    
    
    
    307Retail fuel sales (thousands of gallons)
    
    
    28,183
    
    
    
    24,871Retail fuel sales (thousands of gallons per site per month)
    
    
    31
    
    
    
    27Retail fuel margin (cents per gallon) (4)
    
    
    16.8
    ¢
    
    
    18.4
    ¢Retail fuel sales price (dollars per gallon) (5)
    
    $
    1.88
    
    
    $
    3.10Merchandise sales
    
    $
    63,053
    
    
    $
    58,455Merchandise sales (per site per month)
    
    
    67
    
    
    
    63Merchandise margin (6)
    
    
    31.7
    %
    
    
    31.4
    %Capital expenditures
    
    $
    219
    
    
    $
    1,127
 
 (1)
    
    Includes excise taxes on sales by the retail and branded marketing segment of $11,044 and
$9,654 for the three months ended March 31, 2009 and 2008, respectively.(2)
    
    Cost of sales includes inter-segment purchases of motor fuels from our refining and unbranded
marketing segment at prices which approximate wholesale market prices. These inter-segment
purchases are eliminated through consolidation of our financial statements.(3)
    
    Marketing sales volume represents branded fuel sales to our wholesale marketing customers
located in both our integrated and non-integrated regions. The branded fuels we sell in our
integrated region are primarily supplied by the Big Spring refinery. Due to the fire on
February 18, 2008 at the Big Spring refinery, more fuel was obtained from third-party
suppliers during the three months ended March 31, 2008. The branded fuels we sell in the
non-integrated region are obtained from third-party suppliers. The marketing margin represents
the margin between the net sales and cost of sales attributable to our branded fuel sales
volume, expressed on a cents-per-gallon basis.(4)
    
    Retail 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.(5)
    
    Retail fuel sales price per gallon represents the average sales price for motor fuels sold
through our retail convenience stores.(6)
    
    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 38




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##### Table of Contents



revenues. Merchandise margins, also referred to as in-store margins, are commonly used in the
retail convenience store industry to measure in-store, or non-fuel, operating results. Three Months Ended March 31, 2009 Compared to the Three Months Ended March 31, 2008
 Net Sales
 Consolidated
 Refining and Unbranded Marketing Segment
 Asphalt Segment
 Retail and Branded Marketing Segment
 Cost of Sales
 Consolidated
 39




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##### Table of Contents



Refining and Unbranded Marketing Segment.
 Asphalt Segment
 Retail and Branded Marketing Segment.
 Direct Operating Expenses
 Consolidated
 Refining and Unbranded Marketing Segment.
 Asphalt Segment.
 Selling, General and Administrative Expenses
 Consolidated
 Refining and Unbranded Marketing Segment
 Asphalt Segment
 40




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##### Table of Contents



Retail and Branded Marketing Segment
 Depreciation and Amortization
  Operating Income
 Consolidated
 Refining and Unbranded Marketing Segment
 Asphalt Segment.
 Retail and Branded Marketing Segment.
 Interest Expense
  41




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##### Table of Contents



Income Tax Expense (Benefit)
  Non-Controlling Interest In Income (Loss) Of Subsidiaries
  Net Income (Loss)
  Liquidity and Capital Resources
     42




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##### Table of Contents



Cash Flows
  For the Three Months EndedMarch 31,2009
    
    
    2008(dollars in thousands)Cash provided by (used in):Operating activities
    
    $
    119,527
    
    
    $
    (49,624
    )Investing activities
    
    
    (15,009
    )
    
    
    16,868Financing activities
    
    
    (104,679
    )
    
    
    (4,724
    )Net decrease in cash and cash equivalents
    
    $
    (161
    )
    
    $
    (37,480
    )
 Cash Flows Provided By (Used In) Operating Activities
  Cash Flows Provided By (Used In) Investing Activities
  Cash Flows Used In Financing Activities
  Cash Position and Indebtedness
  43




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##### Table of Contents



Summary of Indebtedness
 As of March 31, 2009(dollars in thousands)Amount Outstanding
    
    
    Total Facility
    
    
    Total Availability (1)Debt, including current portion:Term loan credit facilities
    
    $
    735,025
    
    
    $
    735,025
    
    
    $
    Revolving credit facilities
    
    
    181,985
    
    
    
    900,000
    (2)(3)
    
    
    222,479Retail credit facilities
    
    
    85,333
    
    
    
    85,333
    
    
    
    Totals
    
    $
    1,002,343
    
    
    $
    1,720,358
    
    
    $
    222,479
 
 (1)
    
    Total availability was calculated as the lesser of (a) the total size of the facilities
less outstanding borrowings and applicable letters of credit as of March 31, 2009 which was $473.8
million or (b) total borrowing base less outstanding borrowings
and applicable letters of credit as of
March 31, 2009 which was $222.5 million.(2)
    
    On April 9, 2009, the Alon Refining Krotz Springs, Inc. Revolving Credit Facility
commitment was decreased from $300.0 million to $250.0 million, which decrease is not
reflected above.(3)
    
    On May 7, 2009, Alon terminated a $60.0 million Letter of Credit Facility, which
termination is not reflected above. Alon USA Energy, Inc. Credit Facilities
 Term Loan Credit Facility
   Letters
of Credit Facility.
 44




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##### Table of Contents



Alon USA, LP Credit Facilities
 Revolving Credit Facility.
   Paramount Petroleum Corporation Credit Facility
 Revolving Credit Facility.
  Alon Refining Krotz Springs, Inc. Credit Facilities
 Term Loan Credit Facility
 45




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##### Table of Contents



Revolving Credit Facility.
       Retail Credit Facilities
  46




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##### Table of Contents



Other Retail Related Credit Facilities
   Capital Spending
  Clean Air Capital Expenditures
 Turnaround and Chemical Catalyst Costs
 Contractual Obligations and Commercial Commitments
  Off-Balance Sheet Arrangements
  47




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##### Table of Contents



Critical Accounting Policies
   New Accounting Standards and Disclosures
  48




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Commodity Price Risk
     49




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##### Table of Contents



Wtd Avg
    
    Wtd AvgDescription
    
    Contract
    
    Purchase
    
    Sales
    
    Contract
    
    Market
    
    Gainof Activity
    
    Volume
    
    Price/BBL
    
    Price/BBL
    
    Value
    
    Value
    
    (Loss)(in thousands)Forwards-long (Crude)
    
    
    81,000
    
    
    $
    43.91
    
    
    $
    
    
    
    $
    3,557
    
    
    $
    3,787
    
    
    $
    230Forwards-short (Crude)
    
    
    (90,000
    )
    
    
    
    
    
    
    47.51
    
    
    
    (4,276
    )
    
    
    (4,333
    )
    
    
    (57
    )Forwards-short (Gasoline)
    
    
    (200,000
    )
    
    
    
    
    
    
    57.19
    
    
    
    (11,438
    )
    
    
    (11,192
    )
    
    
    246Forwards-short (Diesel)
    
    
    (25,000
    )
    
    
    
    
    
    
    50.05
    
    
    
    (1,251
    )
    
    
    (1,426
    )
    
    
    (175
    )Futures-long (Crude Calls
 Asphalt)
    
    
    140,000
    
    
    
    4.68
    
    
    
    
    
    
    
    655
    
    
    
    708
    
    
    
    53Futures-short (Crude)
    
    
    (320,000
    )
    
    
    
    
    
    
    50.24
    
    
    
    (16,078
    )
    
    
    (15,891
    )
    
    
    187Futures-long (Heating Oil)
    
    
    25,000
    
    
    
    61.95
    
    
    
    
    
    
    
    1,549
    
    
    
    1,436
    
    
    
    (113
    )Futures-short (Heating Oil)
    
    
    (15,000
    )
    
    
    
    
    
    
    58.23
    
    
    
    (874
    )
    
    
    (862
    )
    
    
    12
 Wtd Avg
    
    Wtd AvgDescription
    
    Contract
    
    Contract
    
    Market
    
    Contract
    
    Market
    
    Gainof Activity
    
    Volume
    
    Spread
    
    Spread
    
    Value
    
    Value
    
    (Loss)Futures-crack spread
(Heating Oil)
    
    
    10,323,875
    
    
    $
    21.47
    
    
    $
    8.02
    
    
    $
    221,649
    
    
    $
    82,829
    
    
    $
    138,819Futures-long (SPR swaps)
    
    
    672,000
    
    
    $
    100.21
    
    
    $
    60.96
    
    
    $
    67,340
    
    
    $
    40,967
    
    
    $
    (26,373
    )
 Interest Rate Risk
  
 ITEM 4. CONTROLS AND PROCEDURES
 (1) Evaluation of disclosure controls and procedures.
  (2) Changes in internal control over financial reporting.
  50




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 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 Agreement dated as of April 9, 2009 by and among Alon Refining Louisiana,
Inc., Alon Krotz Springs, Inc., the lenders party thereto and Wells Fargo Bank, National
Association, as successor to Credit Suisse, Cayman Islands Branch, as agent (incorporated by
reference to Exhibit 10.1 to Form 8-K, filed by the Company on April 27, 2009, SEC File No.
001-32567).10.2
    
    Second Amendment to Loan and Security Agreement dated as of April 9, 2009 by and among Alon
Refining Louisiana, Inc., Alon Krotz Springs, Inc., the lenders party thereto and Bank of
America, N.A., as agent (incorporated by reference to Exhibit 10.2 to Form 8-K, filed by the
Company on April 27, 2009, 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.
 
 
    
    Filed under confidential treatment request. 51




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##### Table of Contents



SIGNATURES
  Alon USA Energy, Inc.Date: May 8, 2009
    By:
    /s/ David WiessmanDavid WiessmanExecutive ChairmanDate: May 8, 2009
    By:
    /s/ Jeff D. MorrisJeff D. MorrisChief Executive OfficerDate: May 8, 2009
    By:
    /s/ Shai EvenShai EvenChief Financial Officer




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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 Agreement dated as of April 9, 2009 by and among Alon Refining Louisiana,
Inc., Alon Krotz Springs, Inc., the lenders party thereto and Wells Fargo Bank, National
Association, as successor to Credit Suisse, Cayman Islands Branch, as agent (incorporated by
reference to Exhibit 10.1 to Form 8-K, filed by the Company on April 27, 2009, SEC File No.
001-32567).10.2
    
    Second Amendment to Loan and Security Agreement dated as of April 9, 2009 by and among Alon
Refining Louisiana, Inc., Alon Krotz Springs, Inc., the lenders party thereto and Bank of
America, N.A., as agent (incorporated by reference to Exhibit 10.2 to Form 8-K, filed by the
Company on April 27, 2009, 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.
 
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    Filed under confidential treatment request.