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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
 OR
 o
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM TO  .
 Commission file number: 333-163942
 ALON REFINING KROTZ SPRINGS, INC.
  Delaware
(State of incorporation)
    
    74-2849682
(I.R.S. Employer Identification No.)7616 LBJ Freeway, Suite 300, Dallas, Texas
(Address of principal executive offices)
    
    75251
(Zip Code)
    o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   The registrant meets the conditions set forth in General Instruction I (1) (a) and (b) of Form
10-K and is therefore filing this Form with the reduced disclosure format permitted by General
Instruction I(2).




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##### 



TABLE OF CONTENTS
 PagePART IITEMS 1. AND 2. BUSINESS AND PROPERTIES
    
    1ITEM 1A. RISK FACTORS
    
    7ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    14ITEM 3. LEGAL PROCEEDINGS
    
    14ITEM 4. RESERVED
    
    14PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    15ITEM 6. SELECTED FINANCIAL DATA
    
    15ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
    
    18ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    31ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    32ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
    
    32ITEM 9A. CONTROLS AND PROCEDURES
    
    32ITEM 9B. OTHER INFORMATION
    
    33PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    34ITEM 11. EXECUTIVE COMPENSATION
    
    36ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    38ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
    
    38ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    39PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    40EX-12.1EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1
  i




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##### Table of Contents



PART I
 
 ITEMS 1. AND 2. BUSINESS AND PROPERTIES.
 Statements in this Annual Report on Form 10-K, including those in Items 1 and 2, Business and
Properties, and Item 3, Legal Proceedings, that are not historical in nature should be deemed
forward-looking statements that are inherently uncertain. See Forward-Looking Statements in
Managements Discussion and Analysis of Financial Condition and Results of Operations in Item 7
for a discussion of forward-looking statements and of factors that could cause actual outcomes and
results to differ materially from those projected.
  COMPANY OVERVIEW
   www.sec.gov www.alonusa.com
 BUSINESS
 Our Refinery
   1




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Parent Company
    History
  2




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Refinery Throughput and Production
  Year Ended December 31,2010
    
    
    2009
    
    
    2008 (1)bpd
    
    
    %
    
    
    bpd
    
    
    %
    
    
    bpd
    
    
    %Refinery throughput:Light sweet crude
    
    
    23,810
    
    
    
    60.7
    
    
    
    22,942
    
    
    
    47.5
    
    
    
    43,361
    
    
    
    74.5Heavy sweet crude
    
    
    14,535
    
    
    
    37.0
    
    
    
    22,258
    
    
    
    46.0
    
    
    
    11,979
    
    
    
    20.6Blendstocks
    
    
    899
    
    
    
    2.3
    
    
    
    3,137
    
    
    
    6.5
    
    
    
    2,844
    
    
    
    4.9Total refinery throughput (2)
    
    
    39,244
    
    
    
    100.0
    
    
    
    48,337
    
    
    
    100.0
    
    
    
    58,184
    
    
    
    100.0Refinery production:Gasoline
    
    
    15,812
    
    
    
    40.1
    
    
    
    22,264
    
    
    
    45.4
    
    
    
    25,195
    
    
    
    42.8Diesel/jet
    
    
    18,986
    
    
    
    48.2
    
    
    
    21,318
    
    
    
    43.4
    
    
    
    26,982
    
    
    
    45.9Heavy oils
    
    
    1,515
    
    
    
    3.8
    
    
    
    1,238
    
    
    
    2.5
    
    
    
    1,402
    
    
    
    2.4Other
    
    
    3,107
    
    
    
    7.9
    
    
    
    4,258
    
    
    
    8.7
    
    
    
    5,258
    
    
    
    8.9Total refinery production (3)
    
    
    39,420
    
    
    
    100.0
    
    
    
    49,078
    
    
    
    100.0
    
    
    
    58,837
    
    
    
    100.0Refinery utilization (4)
    
    
    
    
    
    
    46.1
    %
    
    
    
    
    
    
    65.3
    %
    
    
    
    
    
    
    66.6
    %
 
 (1)
    
    2008 data includes  the period from July 1, 2008 through December 31, 2008.(2)
    
    Total refinery throughput represents the total barrels per day of crude oil and blendstock
inputs in the refinery production process.(3)
    
    Total refinery production represents the barrels per day of various products resulting from
the refining production process.(4)
    
    Refinery utilization represents average daily crude oil throughput divided by crude oil
capacity, excluding planned periods of downtime for maintenance and turnarounds. Refinery
throughput and production for 2010 and 2009 reflects the effects of downtime associated with a
shutdown that began in November 2009 and continued into the second quarter of 2010. Refinery
throughput and production for 2008 reflects the effects of shutdowns during
hurricanes Gustav and Ike and limited crude supply due to widespread electrical outages
following the hurricanes. Production
 Gasoline
 Distillates
 3




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Heavy
Oils and Other
 Raw Material Supply
    Sales
 Transportation Fuel Marketing.
 Product Pipelines
 Barge
 Railcar and Truck
  4




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Competition
     Government Regulation and Legislation
 Environmental Controls and Expenditures
    5




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Regulation.
 Compliance.
  Known Environmental Liabilities
 Employees
  Properties
  6




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Insurance
  Litigation
  
 ITEM 1A. RISK FACTORS.
  Risk Factors Relating to Our Business
 The price volatility of crude oil, other feedstocks, refined products and fuel and utility
services may have a material adverse effect on our earnings, profitability, cash flows and
liquidity.
  
    
    changes in global and local economic conditions;
    
    domestic and foreign demand for fuel products;
    
    worldwide political conditions, particularly in significant oil producing regions such as
the Middle East, North and West Africa and Venezuela;
    
    the level of foreign and domestic production of crude oil and refined products and the
level of crude oil, feedstock and refined products imported into the United States;
    
    utilization rates of U.S. refineries;
    
    development and marketing of alternative and competing fuels;
    
    commodities speculation;
 7




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
    
    accidents, interruptions in transportation, inclement weather or other events that can
cause unscheduled shutdowns or otherwise adversely affect our refinery, our machinery or
equipment, or those of our suppliers or customers;
    
    federal and state government regulations; and
    
    local factors, including market conditions, weather conditions and the level of
operations of other refineries and pipelines in our markets.
    The recent recession and credit crisis and related turmoil in the global financial system has had
and may continue to have an adverse impact on our business, results of operations and cash flows.
   The dangers inherent in our operations could cause disruptions and could expose us to potentially
significant losses, costs or liabilities. We are particularly vulnerable to disruptions in our
operations because all of our refining operations are conducted at a single facility.
  8




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We are subject to interruptions of supply and distribution as a result of our reliance on
pipelines for transportation of crude oil and refined products.
  Our hedging activities may limit our potential gains and involve other risks.
  
    
    the volumes of our actual use of crude oil and/or production of the applicable refined
products are less than the volumes subject to the hedging arrangement;
    
    accidents, interruptions in feedstock transportation, inclement weather or other events
cause unscheduled shutdowns or otherwise adversely affect our refinery, or those of our
suppliers or customers;
    
    there is a change in the historic correlation between crude oil and heating oil prices;
    
    the counterparties to our futures contracts fail to perform under the contracts; or
    
    a sudden, unexpected event materially impacts the commodity or crack spread subject to
the hedging arrangement.
  9




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Changes in our credit profile could affect our relationships with our suppliers, which could
have a material adverse effect on our liquidity and our ability to operate our refinery at full
capacity.
  Competition in the refining and marketing industry is intense, and an increase in competition in
the markets in which we sell our products could adversely affect our earnings and profitability.
   We may incur significant costs to comply with new or changing environmental laws and regulations.
     10




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We could incur substantial costs or disruptions in our business if we cannot obtain or maintain
necessary permits and authorizations or otherwise comply with health, safety, environmental and
other laws and regulations.
  We are located in an area that has a history of hurricanes, the occurrence of which could
materially affect our operations.
  Terrorist attacks, threats of war or actual war may negatively affect our operations, financial
condition, results of operations and prospects.
  11




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Our insurance policies do not cover all losses, costs or liabilities that we may experience.
  If we lose any of our key personnel, our ability to manage our business and continue our growth
could be negatively affected.
   Risk Factors Relating to Outstanding Indebtedness and Debt Agreements
 Our substantial level of indebtedness could adversely affect our financial condition and prevent
us from fulfilling our obligations under our senior secured notes.
  
    
    it may be more difficult for us to satisfy our financial obligations, including with
respect to our Senior Secured Notes;
    
    our ability to obtain additional financing for working capital, capital expenditures or
general corporate purposes may be impaired;
    
    we must use a substantial portion of our cash flow from operations to pay interest on our
Senior Secured Notes as well as to fund excess cash flow offers on our Senior Secured Notes,
which will reduce the funds available to use for operations and other purposes;
    
    our ability to fund a change of control offer may be limited;
    
    our ability to borrow additional funds may be limited;
 12




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
    
    our indebtedness could place us at a competitive disadvantage compared to those of our
competitors that may have proportionately less debt;
    
    our flexibility in planning for, or reacting to, changes in our business and the industry
in which we operate may be limited;
    
    we may be restricted from making strategic acquisitions or exploiting other business
opportunities; and
    
    our level of indebtedness makes us more vulnerable to economic downturns and adverse
developments in our business.
  Despite our current indebtedness level, we may still be able to incur substantially more debt,
which could exacerbate the risks associated with our substantial leverage.
  Our Indenture governing our Senior Secured Notes imposes significant operating and financial
restrictions, which may prevent us from pursuing certain business opportunities and taking certain
actions.
  
    
    incur additional indebtedness;
    
    repay our Senior Secured Notes prior to stated maturities;
    
    make acquisitions or investments;
    
    create or incur liens;
    
    transfer or sell certain assets or merge or consolidate with or into other companies;
    
    enter into certain transactions with affiliates; and
    
    otherwise conduct certain corporate activities.
 13




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ITEM 1B. UNRESOLVED STAFF COMMENTS.
  
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. RESERVED.
  14




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
  
 ITEM 6. SELECTED FINANCIAL DATA.
   15




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Successor
    
    
    Combined(1)
    
    
    PredecessorYear Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Unaudited(dollars in thousands)Statement of Operations Data:Net sales
    
    $
    1,254,663
    
    
    $
    1,156,883
    
    
    $
    2,594,026
    
    
    $
    2,293,486
    
    
    $
    2,450,200Operating costs and expenses:Cost of sales
    
    
    1,222,647
    
    
    
    1,031,368
    
    
    
    2,531,201
    
    
    
    2,143,920
    
    
    
    2,245,070Direct operating expenses
    
    
    62,321
    
    
    
    74,007
    
    
    
    89,096
    
    
    
    84,388
    
    
    
    72,754Selling, general and administrative
expenses
    
    
    6,890
    
    
    
    7,328
    
    
    
    2,812
    
    
    
    4,632
    
    
    
    4,921Unrealized loss associated with
consignment inventory
    
    
    3,537
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
expenses
    
    
    21,844
    
    
    
    20,485
    
    
    
    13,333
    
    
    
    9,677
    
    
    
    8,259Total operating costs and expenses
    
    
    1,317,239
    
    
    
    1,133,188
    
    
    
    2,636,442
    
    
    
    2,242,617
    
    
    
    2,331,004Operating income (loss)
    
    
    (62,576
    )
    
    
    23,695
    
    
    
    (42,416
    )
    
    
    50,869
    
    
    
    119,196Other income (expense), net
    
    
    (4,105
    )
    
    
    17
    
    
    
    258
    
    
    
    1
    
    
    
    34Interest expense
    
    
    (47,695
    )
    
    
    (69,090
    )
    
    
    (24,382
    )
    
    
    
    
    
    
    Income (loss) before income tax
expense (benefit)
    
    
    (114,376
    )
    
    
    (45,378
    )
    
    
    (66,540
    )
    
    
    50,870
    
    
    
    119,230Income tax expense (benefit)
    
    
    
    
    
    
    
    
    
    
    (19,680
    )
    
    
    17,276
    
    
    
    43,510Net income (loss)
    
    $
    (114,376
    )
    
    $
    (45,378
    )
    
    $
    (46,860
    )
    
    $
    33,594
    
    
    $
    75,720Statement of Cash Flow Data:Net cash provided by (used in)
operating activities
    
    $
    29,700
    
    
    $
    153,237
    
    
    $
    (8,400
    )
    
    $
    26,678
    
    
    $
    77,724Net cash used in investing activities
    
    
    (18,483
    )
    
    
    (45,381
    )
    
    
    (492,540
    )
    
    
    (9,992
    )
    
    
    (41,876
    )Net cash provided by (used in)
financing activities
    
    
    (37,101
    )
    
    
    (81,694
    )
    
    
    500,927
    
    
    
    (16,684
    )
    
    
    (35,843
    )Capital expenditures
    
    
    7,350
    
    
    
    12,404
    
    
    
    9,948
    
    
    
    9,001
    
    
    
    38,106Capital expenditures for turnaround
and catalyst
    
    
    2,383
    
    
    
    13,290
    
    
    
    1,858
    
    
    
    995
    
    
    
    3,773Balance Sheet Data (end of period):Cash and cash equivalents
    
    $
    277
    
    
    $
    26,161
    
    
    $
    
    
    
    $
    13
    
    
    $
    11Property, plant and equipment, net
    
    
    350,072
    
    
    
    362,265
    
    
    
    335,555
    
    
    
    142,845
    
    
    
    141,622Total assets
    
    
    406,245
    
    
    
    482,837
    
    
    
    633,903
    
    
    
    229,152
    
    
    
    207,452Total debt
    
    
    207,378
    
    
    
    288,980
    
    
    
    449,105
    
    
    
    
    
    
    
    Stockholders equity
    
    
    (4,133
    )
    
    
    62,003
    
    
    
    87,790
    
    
    
    186,520
    
    
    
    169,610
 
 (1)
    
    The statements of operations data and cash flow data for the year
ended December 31, 2008 is presented on an unaudited combined basis
comprised of two periods: predecessor and successor. We are required
under GAAP to present our operating results separately for predecessor
periods preceding the acquisition and the successor periods following
the acquisition. However, we believe that presentation on a combined
basis is more meaningful as it allows the financial and operating data
to be analyzed to comparable periods in 2006, 2007, 2009 and 2010.
See Selected Financial Data included on the previous page of this
Annual Report on Form 10-K for details on the predecessor and
successor periods. The predecessor, successor and combined financial
data is as follows: 16




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Predecessor
    
    
    Successor
    
    
    CombinedPeriod from
    
    
    Period fromJanuary 1,
    
    
    July 1, Through
    
    
    Year EndedThrough June 30,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2008
    
    
    2008(Unaudited)(Dollars in thousand)Statement of Operations Data:Net sales
    
    $
    1,539,629
    
    
    $
    1,054,397
    
    
    $
    2,594,026Cost of sales
    
    
    1,543,665
    
    
    
    987,536
    
    
    
    2,531,201Direct operating expenses
    
    
    43,721
    
    
    
    45,375
    
    
    
    89,096Selling, general and administrative expenses
    
    
    1,909
    
    
    
    903
    
    
    
    2,812Depreciation and amortization expenses
    
    
    4,841
    
    
    
    8,492
    
    
    
    13,333Operating income (loss)
    
    
    (54,507
    )
    
    
    12,091
    
    
    
    (42,416
    )Other income, net
    
    
    2
    
    
    
    256
    
    
    
    258Interest expense
    
    
    
    
    
    
    (24,382
    )
    
    
    (24,382
    )Loss before income tax benefit
    
    
    (54,505
    )
    
    
    (12,035
    )
    
    
    (66,540
    )Income tax benefit
    
    
    (19,680
    )
    
    
    
    
    
    
    (19,680
    )Net loss
    
    $
    (34,825
    )
    
    $
    (12,035
    )
    
    $
    (46,860
    )Statement of Cash Flow Data:Net cash provided by (used in) operating activities
    
    $
    (20,208
    )
    
    $
    11,808
    
    
    $
    (8,400
    )Net cash used in investing activities
    
    
    (8,076
    )
    
    
    (484,464
    )
    
    
    (492,540
    )Net cash provided by financing activities
    
    
    28,271
    
    
    
    472,656
    
    
    
    500,927Capital expenditures
    
    
    6,495
    
    
    
    3,453
    
    
    
    9,948Capital expenditures for turnaround and catalyst
    
    
    1,858
    
    
    
    
    
    
    
    1,858
 17




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 The following discussion of our financial condition and results of operations is provided as a
supplement to, and should be read in conjunction with, our financial statements and the notes
thereto included elsewhere in this Annual Report on Form 10-K and the other sections of this Annual
Report on Form 10-K , including Items 1 and 2 Business and Properties, and Item 6 Selected
Financial Data.
 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 spread between West Texas Intermediate crude oil and Light Louisiana and
Heavy Louisiana Sweet crude oil;
    
    the effects of transactions involving forward contracts and derivative instruments;
    
    actions of customers and competitors;
    
    changes in fuel and utility costs incurred by our refinery;
    
    disruptions due to equipment interruption, pipeline disruptions or failure at
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;
    
    the global financial crisis impact on our business and financial condition in ways
that we currently cannot predict; and
    
    the other factors discussed in our Annual Report on Form 10-K for the year ended
December 31, 2010 under the caption Risk Factors.
 18




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Format of Presentation
    
    
    The year ended December 31, 2010 compared to the year ended December 31, 2009. The year
ended December 31, 2010 and 2009, respectively, represent the audited financial and other
operating data of Alon Refining Krotz Springs, Inc.
    
    The year ended December 31, 2009 compared to the year ended December 31, 2008. The year
ended December 31, 2008 is presented on an unaudited combined basis for the predecessor and
successor periods discussed above.
 Refinery Overview
    19




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Refinery History
   Major Influences on Results of Operations
     Factors Affecting Comparability
  20




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Senior Secured Notes
  Refinery Acquisition
  Throughput
  2008 Hedging Agreement
  Hurricane Activity
  21




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ALON REFINING KROTZ SPRINGS INC.
 Predecessor
    
    
    Successor
    
    
    CombinedSix Months
    
    
    Six Months
    
    
    Twelve MonthsYear Ended
    
    
    Year Ended
    
    
    Ended
    
    
    Ended
    
    
    EndedDecember 31,
    
    
    December 31,
    
    
    June 30,
    
    
    December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2008
    
    
    2008
    
    
    2008(Unaudited)(Dollars in thousands, except per barrel data and pricing statistics)Statement of Operations Data:Net sales
    
    $
    1,254,663
    
    
    $
    1,156,883
    
    
    $
    1,539,629
    
    
    $
    1,054,397
    
    
    $
    2,594,026Operating costs and expenses:Cost of sales
    
    
    1,222,647
    
    
    
    1,031,368
    
    
    
    1,543,665
    
    
    
    987,536
    
    
    
    2,531,201Direct operating expenses
    
    
    62,321
    
    
    
    74,007
    
    
    
    43,721
    
    
    
    45,375
    
    
    
    89,096Selling, general and
administrative expenses
    
    
    6,890
    
    
    
    7,328
    
    
    
    1,909
    
    
    
    903
    
    
    
    2,812Unrealized loss associated with
consignment inventory (1)
    
    
    3,537
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
expenses
    
    
    21,844
    
    
    
    20,485
    
    
    
    4,841
    
    
    
    8,492
    
    
    
    13,333Total operating costs and
expenses
    
    
    1,317,239
    
    
    
    1,133,188
    
    
    
    1,594,136
    
    
    
    1,042,306
    
    
    
    2,636,442Operating income (loss)
    
    
    (62,576
    )
    
    
    23,695
    
    
    
    (54,507
    )
    
    
    12,091
    
    
    
    (42,416
    )Other income (expense), net
    
    
    (4,105
    )
    
    
    17
    
    
    
    2
    
    
    
    256
    
    
    
    258Interest expense
    
    
    (47,695
    )
    
    
    (69,090
    )
    
    
    
    
    
    
    (24,382
    )
    
    
    (24,382
    )Loss before income tax
 benefit
    
    
    (114,376
    )
    
    
    (45,378
    )
    
    
    (54,505
    )
    
    
    (12,035
    )
    
    
    (66,540
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    (19,680
    )
    
    
    
    
    
    
    (19,680
    )Net loss
    
    $
    (114,376
    )
    
    $
    (45,378
    )
    
    $
    (34,825
    )
    
    $
    (12,035
    )
    
    $
    (46,860
    )Operating Data:Refinery Throughput (bpd):Light sweet crude
    
    
    23,810
    
    
    
    22,942
    
    
    
    
    
    
    
    
    
    
    
    35,785Heavy sweet crude
    
    
    14,535
    
    
    
    22,258
    
    
    
    
    
    
    
    
    
    
    
    24,421Blendstocks
    
    
    899
    
    
    
    3,137
    
    
    
    
    
    
    
    
    
    
    
    2,323Total refinery throughput (2)
    
    
    39,244
    
    
    
    48,337
    
    
    
    
    
    
    
    
    
    
    
    62,529Refinery Production (bpd):Gasoline
    
    
    15,812
    
    
    
    22,264
    
    
    
    
    
    
    
    
    
    
    
    26,403Diesel/Jet
    
    
    18,986
    
    
    
    21,318
    
    
    
    
    
    
    
    
    
    
    
    29,624Heavy oils
    
    
    1,515
    
    
    
    1,238
    
    
    
    
    
    
    
    
    
    
    
    1,484Others
    
    
    3,107
    
    
    
    4,258
    
    
    
    
    
    
    
    
    
    
    
    5,892Total refinery production (3)
    
    
    39,420
    
    
    
    49,078
    
    
    
    
    
    
    
    
    
    
    
    63,403Key Operating Statistics:Refinery utilization (4)
    
    
    46.1
    %
    
    
    65.3
    %
    
    
    
    
    
    
    
    
    
    
    72.5
    %Per barrel of throughput:Refinery operating margin (5)
    
    $
    2.24
    
    
    $
    5.66
    
    
    
    
    
    
    
    
    
    
    $
    3.21Refinery direct operating expense
(6)
    
    
    4.36
    
    
    
    4.22
    
    
    
    
    
    
    
    
    
    
    
    3.89Capital expenditures
    
    
    7,350
    
    
    
    12,404
    
    
    
    
    
    
    
    
    
    
    
    9,948Capital expenditures for
turnaround and catalyst
    
    
    2,383
    
    
    
    13,290
    
    
    
    
    
    
    
    
    
    
    
    1,858Pricing Statistics:WTI crude oil (per barrel)
    
    $
    79.41
    
    
    $
    61.82
    
    
    
    
    
    
    
    
    
    
    $
    99.56LLS crude oil (per barrel)
    
    
    82.76
    
    
    
    64.39
    
    
    
    
    
    
    
    
    
    
    
    102.24LLS less WTI spread
    
    
    3.35
    
    
    
    2.57
    
    
    
    
    
    
    
    
    
    
    
    2.682/1/1 Gulf Coast high sulfur
diesel crack spread (per barrel)
    
    
    7.75
    
    
    
    6.50
    
    
    
    
    
    
    
    
    
    
    
    11.28Gulf Coast unleaded gasoline(cpg)
    
    
    205.2
    
    
    
    163.5
    
    
    
    
    
    
    
    
    
    
    
    247.1Gulf Coast high sulfur diesel (cpg)
    
    
    209.9
    
    
    
    161.9
    
    
    
    
    
    
    
    
    
    
    
    280.8Natural gas (per mmbtu)
    
    $
    4.38
    
    
    $
    4.16
    
    
    
    
    
    
    
    
    
    
    $
    8.90
 22




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##### Table of Contents



(1)
    
    Unrealized loss associated with consignment inventory for the year ended December 31, 2010,
is a mark-to-market adjustment for the associated consigned inventory liabilities. Crude oil
consignment inventory represents inventory located at storage facilities that was sold to
third parties with an obligation by us to repurchase the inventory at then prevailing market
prices when the respective agreements end. At December 31, 2010, we had 0.3 million barrels
of crude oil inventory consigned to others with a market value of $23.1 million.(2)
    
    Total refinery throughput represents the total barrels per day of crude oil and blendstock
inputs in the refinery production process.(3)
    
    Total refinery production represents the barrels per day of various products produced from
processing crude oil and other feedstocks through the crude unit and other conversion units at
our refinery.(4)
    
    Refinery utilization represents average daily crude oil throughput divided by crude oil
capacity, excluding planned periods of downtime for maintenance and turnarounds. See
previous discussion in Factors Affecting Comparability for more information regarding
throughput.(5)
    
    Refinery operating margin is a per barrel measurement calculated by dividing the margin
between net sales and cost of sales (exclusive of substantial hedging transactions and
inventory adjustments related to the acquisition of our refinery) attributable to our refinery
by its 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 $25.6 million for the year ended December 31, 2009, and unrealized hedging
gains of $117.5 million for the six months ended December 31, 2008. The 2008 refinery
operating margin also excludes a charge of $127.4 million to cost of sales for inventory
adjustments related to the acquisition. Additionally, the refinery margin for 2009 excludes
realized gains related to the unwind of the heating oil crack spread hedge of $139.3 million.(6)
    
    Refinery direct operating expense is a per barrel measurement calculated by dividing direct
operating expenses, exclusive of depreciation and amortization, by the total throughput
volumes. 23




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##### Table of Contents



Year ended December 31, 2010 compared to year ended December 31, 2009
 Net
Sales.
 Cost of Sales.
 Direct Operating Expenses.
 Selling, General and Administrative Expenses.
 Depreciation and Amortization Expenses.
 Operating income (loss).
 Interest expense.
 Income tax benefit.
 Net loss.
 24




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##### Table of Contents



Year ended December 31, 2009 compared to year ended December 31, 2008
 Net Sales.
 Cost of Sales.
 Direct Operating Expenses.
 Selling, General and Administrative Expenses.
 Depreciation and Amortization Expenses.
 Operating income (loss).
 Interest expense.
 Income tax expense (benefit).
 Net income (loss).
 25




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##### Table of Contents



Liquidity and Capital Resources
     Cash Flows
  Successor
    
    
    Successor
    
    
    CombinedYear Ended December 31,2010
    
    
    2009
    
    
    2008(Unaudited)Net cash provided by (used in):Operating activities
    
    $
    29,700
    
    
    $
    153,237
    
    
    $
    (8,400
    )Investing activities
    
    
    (18,483
    )
    
    
    (45,382
    )
    
    
    (492,540
    )Financing activities
    
    
    (37,101
    )
    
    
    (81,694
    )
    
    
    500,927Net increase (decrease) in cash and cash equivalents
    
    $
    (25,884
    )
    
    $
    26,161
    
    
    $
    (13
    )
 Cash Flows Provided By (Used In) Operating Activities
   26




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##### Table of Contents



Cash Flows Used In Investing Activities
  Cash Flows Provided By (Used In) Financing Activities
   Summary of Indebtedness
 Senior Secured Notes.
   27




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##### Table of Contents



Short-Term
Credit Facility.
 Revolving
Credit Facility.
  Capital Spending
 Capital Spending
   2011
    
    
    2012(dollars in thousands)Sustaining maintenance
    
    $
    8,587
    
    
    $
    12,335Growth/profit improvement/other
    
    
    1,600
    
    
    
    11,200Chemical catalyst and turnaround
    
    
    350
    
    
    
    4,500Total Capital Expenditures
    
    $
    10,537
    
    
    $
    28,035
 28




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##### Table of Contents



Turnaround and Chemical Catalyst Costs
  2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015(dollars in thousands)Scheduled turnaround costs
    
    $
    
    
    
    $
    4,500
    
    
    $
    7,500
    
    
    $
    4,300
    
    
    $
    15,400Chemical catalyst costs
    
    
    350
    
    
    
    
    
    
    
    350
    
    
    
    7,000
    
    
    
    350Total
    
    $
    350
    
    
    $
    4,500
    
    
    $
    7,850
    
    
    $
    11,300
    
    
    $
    15,750
 Contractual Obligations
  Payment Due by PeriodLess Than
    
    
    1-3
    
    
    3-5
    
    
    More ThanTotal
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(dollars in thousands)Contractual Cash Obligations:Long-term debt obligations
    
    $
    207,378
    
    
    $
    
    
    
    $
    
    
    
    $
    207,378
    
    
    $
    Operating lease obligations
    
    
    3,276
    
    
    
    535
    
    
    
    815
    
    
    
    725
    
    
    
    1,201Earnout agreement with Valero
    
    
    6,562
    
    
    
    6,562
    
    
    
    
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    217,216
    
    
    $
    7,097
    
    
    $
    815
    
    
    $
    208,103
    
    
    $
    1,201
 Off-Balance Sheet Arrangements
  Earnout Agreement with Valero
  Critical Accounting Policies
  Inventory
 29




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##### Table of Contents



Environmental and Other Loss Contingencies
 Turnarounds and Chemical Catalyst Costs
 Impairment of Long-Lived Assets Property, Plant, and Equipment
 Deferred Income Taxes
 Asset
Retirement Obligations Asset Retirement
Obligations
  30




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##### Table of Contents



Intangible Assets
 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 Quantitative and Qualitative Disclosure About Market Risk
  Commodity Price Risk
     31




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##### Table of Contents



ContractVolume
    
    
    Wtd Avg
    
    
    Wtd Avg
    
    
    ContractDescription of Activity
    
    (in barrels)
    
    
    Price
    
    
    Price
    
    
    Value
    
    
    Fair Value
    
    
    Gain (Loss)(in thousands)Forwards  long (Crude)
    
    
    101,475
    
    
    
    91.93
    
    
    
    
    
    
    $
    9,329
    
    
    $
    9,552
    
    
    $
    223Forwards  short (Crude)
    
    
    (143,466
    )
    
    
    
    
    
    
    91.93
    
    
    
    (13,189
    )
    
    
    (13,505
    )
    
    
    (316
    )Forwards  long (Gasoline)
    
    
    168,731
    
    
    
    94.00
    
    
    
    
    
    
    
    15,861
    
    
    
    16,535
    
    
    
    674Forwards  short (Slurry)
    
    
    (36,999
    )
    
    
    
    
    
    
    69.71
    
    
    
    (2,579
    )
    
    
    (2,628
    )
    
    
    (49
    )Forwards  long (Catfeed)
    
    
    9,641
    
    
    
    91.54
    
    
    
    
    
    
    
    883
    
    
    
    919
    
    
    
    36Forwards  short (Slop)
    
    
    (10,976
    )
    
    
    
    
    
    
    79.23
    
    
    
    (870
    )
    
    
    (893
    )
    
    
    (23
    )Forwards  long (Diesel)
    
    
    226,067
    
    
    
    101.44
    
    
    
    
    
    
    
    22,932
    
    
    
    23,533
    
    
    
    601Forwards  short (Diesel)
    
    
    (50,012
    )
    
    
    
    
    
    
    101.03
    
    
    
    (5,053
    )
    
    
    (5,218
    )
    
    
    (165
    )
 Contract
    
    
    Wtd Avg
    
    
    Wtd AvgVolume
    
    
    Contract
    
    
    Market
    
    
    ContractDescription of Activity
    
    (in barrels)
    
    
    Spread
    
    
    Spread
    
    
    Value
    
    
    Fair Value
    
    
    Gain (Loss)(in thousands)Futures  swaps (Heating Oil)
    
    
    218,800
    
    
    
    11.38
    
    
    
    8.26
    
    
    $
    2,489
    
    
    $
    1,808
    
    
    $
    (681
    )Futures  calls (Heating oil)
    
    
    (3,008,500
    )
    
    
    13.43
    
    
    
    14.49
    
    
    
    (40,394
    )
    
    
    (43,581
    )
    
    
    (3,187
    )
 Interest Rate Risk
  
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
 Disclosure Controls and Procedures
  32




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##### Table of Contents



Managements Report on Internal Control over Financial Reporting
  Changes in Internal Control Over Financial Reporting
  Certifications
  
 ITEM 9B. OTHER INFORMATION.
  33




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##### Table of Contents



PART III
  
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 Management
  Name
    
    Age
    
    PositionDavid Wiessman
    
    
    56
    
    
    Executive Chairman of the Board of DirectorsJeff D. Morris
    
    
    59
    
    
    Director and Chief Executive OfficerPaul Eisman
    
    
    55
    
    
    Director and PresidentShai Even
    
    
    42
    
    
    Director, Senior Vice President and Chief
Financial OfficerJoseph Israel
    
    
    39
    
    
    Director, Chief Operating OfficerJoseph A. Concienne, III
    
    
    60
    
    
    DirectorClaire A. Hart
    
    
    55
    
    
    Senior Vice PresidentAlan Moret
    
    
    56
    
    
    Vice President of SupplyMichael Oster
    
    
    39
    
    
    Vice President of Mergers and AcquisitionsWilliam Wuensche
    
    
    50
    
    
    Vice President of Refining
 David Wiessman
 Jeff D. Morris
 Paul Eisman
 34




---



##### Table of Contents



Shai Even
 Joseph Israel
 Joseph A. Concienne, III
 Claire A. Hart
 Alan Moret
 Michael Oster
 William Wuensche
 35




---



##### Table of Contents



Corporate Governance
 www.alonusa.com
 
 ITEM 11. EXECUTIVE COMPENSATION.
  Name
    
    TitleJeff D. Morris
    
    Chief Executive OfficerShai Even
    
    Senior Vice President and Chief Financial OfficerJoseph Israel
    
    Chief Operating OfficerMichael Oster
    
    Vice President of Mergers and AcquisitionsAlan Moret
    
    Vice President of Supply
    Employment Agreements and Change of Control Arrangements
 Jeff D. Morris.
 36




---



##### Table of Contents



Shai Even.
 Joseph Israel.
 Michael Oster.
 Alan Moret.
 37




---



##### Table of Contents



Compensation of Directors
  Compensation Committee Interlocks and Insider Participation
    
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
      38




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
      39




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 (a)
    
    The following documents are filed as part of this report:(1)
    
    Financial Statements and Schedule, see Index to Financial Statements and Schedule on
page F-1.(a)
    
    Schedule II  Valuation and Qualifying accounts is included in the Notes to Financial
Statements.(2)
    
    Exhibits: Reference is made to the Index of Exhibits immediately preceding the exhibits
hereto, which index is incorporated herein by reference.
 40




---



##### Table of Contents



Exhibit Index
 ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of
Alon Refining Krotz Springs, Inc.,
as amended by the Certificate of
Amendment to Certificate of
Incorporation of Alon Refining
Krotz Springs, Inc. (incorporated
by reference to Exhibit 3.1 to Form
S-4, filed by Alon Refining Krotz
Springs, Inc. on December 22, 2009,
SEC File No. 333-163942).3.2
    
    Amended and Restated Bylaws of Alon
Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 3.2 to Form S-4, filed by
Alon Refining Krotz Springs, Inc.
on December 22, 2009, SEC File No.
333-163942).4.1
    
    Indenture, dated as of October 22,
2009, by and among Alon Refining
Krotz Springs, Inc. and Wilmington
Trust FSB, as Trustee (incorporated
by reference to Exhibit 4.1 to Form
8-K, filed by Alon USA Energy, Inc.
on October 23, 2009, SEC File No.
001-32567).10.1
    
    Stock Purchase Agreement, dated May
7, 2008, between Valero Refining
and Marketing Company and Alon
Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on May 13,
2008, SEC File No. 001-32567).10.2
    
    First Amendment to Stock Purchase
Agreement, dated as of July 3,
2008, by and among Valero Refining
and Marketing Company, Alon
Refining Krotz Springs, Inc. and
Valero Refining Company-Louisiana
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on July 10,
2008, SEC File No. 001-32567).10.3
    
    Registration Rights Agreement,
dated October 22, 2009, between
Alon Refining Krotz Springs, Inc.
and Jefferies & Company, Inc.
(incorporated by reference to
Exhibit 10.2 to Form 8-K, filed by
Alon USA Energy, Inc. on October
23, 2009, SEC File No. 001-32567).10.4
    
    Purchase Agreement, dated October
13, 2009, between Alon Refining
Krotz Springs, Inc. and Jefferies &
Co. (incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on October
19, 2009, SEC File No. 001-32567).10.5
    
    Offtake Agreement, dated as of July
3, 2008, by and between Valero
Marketing and Supply Company and
Alon Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.5 to Form S-4/A, filed
by Alon Refining Krotz Springs,
Inc. on January 12, 2010, SEC File
No. 333-163942).10.6
    
    Earnout Agreement, dated as of July
3, 2008, by and between Valero
Refining and Marketing Company and
Alon Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.6 to Form S-4/A, filed
by Alon Refining Krotz Springs,
Inc. on January 12, 2010, SEC File
No. 333-163942).10.7
    
    First Amendment to Earnout
Agreement, dated as of August 27,
2009, by and between Valero
Refining and Marketing Company and
Alon Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.7 to Form S-4/A, filed
by Alon Refining Krotz Springs,
Inc. on January 12, 2010, SEC File
No. 333-163942).10.8
    
    Loan and Security Agreement, dated
as of July 3, 2008, by and among
Alon Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., the
lenders party thereto and Bank of
America, N.A., as administrative
agent (incorporated by reference to
Exhibit 10.3 to Form 8-K, filed by
Alon USA Energy, Inc. on July 10,
2008, SEC File No. 001-32567).10.9
    
    First Amendment to Loan and
Security Agreement, dated as of
December 18, 2008, by and among
Alon Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., the
lenders party thereto and Bank of
America, N.A. (incorporated by
reference to Exhibit 10.28 to Form
10-K, filed by Alon USA Energy,
Inc. on April 10, 2009, SEC File
No. 001-32567).10.10
    
    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 Alon USA Energy, Inc.
on April 27, 2009, SEC File No.
001-32567).
 41




---



##### Table of Contents



ExhibitNumber
    
    Description10.11
    
    Amended and Restated Loan and
Security Agreement, dated as of
October 22, 2009 (as amended,
supplemented or otherwise modified
from time to time), among Alon
Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., each
other party joined as a borrower
thereunder from time to time, the
Lenders party thereto, and Bank of
America, N.A., as Agent
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on October
23, 2009, SEC File No. 001-32567).10.12
    
    Term Loan Agreement, dated as of
July 3, 2008, by and among Alon
Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., the
lenders party thereto and Credit
Suisse, as administrative agent and
collateral agent (incorporated by
reference to Exhibit 10.2 to Form
8-K, filed by Alon USA Energy, Inc.
on July 10, 2008, SEC File No.
001-32567).10.13
    
    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
10-Q, filed by Alon USA Energy,
Inc. on August 6, 2009, SEC File
No. 001-32567).10.14*
    
    Executive Employment Agreement,
dated as of July 31, 2000, between
Jeff D. Morris and Alon USA GP,
Inc., as amended by the Amendment
to Executive/Management Employment
Agreement, dated May 1, 2005
(incorporated by reference to
Exhibit 10.23 to Form S-1, filed by
Alon USA Energy, Inc. on May 11,
2005, SEC File No. 333-124797).10.15*
    
    Second Amendment to Executive
Employment Agreement, dated as of
November 4, 2008, between Jeff D.
Morris and Alon USA GP, LLC
(incorporated by reference to
Exhibit 10.9 to Form 10-Q, filed by
Alon USA Energy, Inc. on November
7, 2008, SEC File No. 001-32567).10.16*
    
    Executive Employment Agreement,
dated as of August 1, 2003, between
Shai Even and Alon USA GP, LLC
(incorporated by reference to
Exhibit 10.49 to Form 10-K, filed
by Alon USA Energy, Inc. on March
15, 2007, SEC File No. 001-32567).10.17*
    
    Amendment to Executive Employment
Agreement, dated as of November 4,
2008, between Shai Even and Alon
USA GP, LLC. (incorporated by
reference to Exhibit 10.14 to Form
10-Q, filed by Alon USA Energy,
Inc. on November 7, 2008, SEC File
No. 001-32567).10.18*
    
    Management Employment Agreement,
dated as of October 30, 2008,
between Michael Oster and Alon USA
GP, LLC (incorporated by reference
to Exhibit 10.71 to Form 10-K,
filed by Alon USA Energy, Inc. on
April 10, 2009, SEC File No.
001-32567).10.19*
    
    Management Employment Agreement,
dated as of September 1, 2000,
between Yosef Israel and Alon USA
GP, LLC (incorporated by reference
to Exhibit 10.33 to Form 10-K,
filed by Alon USA Energy, Inc. on
March 15, 2006, SEC File No.
001-32567).10.20*
    
    Amendment to Executive/Management
Employment Agreement, dated as of
May 1, 2005 between Yosef Israel
and Alon USA GP, LLC (incorporated
by reference to Exhibit 10.34 to
Form 10-K, filed by Alon USA
Energy, Inc. on March 15, 2006, SEC
File No. 001-32567).10.21*
    
    Second Amendment to
Executive/Management Employment
Agreement, dated as of November 4,
2008, between Yosef Israel and Alon
USA GP, LLC (incorporated by
reference to Exhibit 10.13 to Form
10-Q, filed by Alon USA Energy,
Inc. on November 7, 2008, SEC File
No. 001-32567).10.22*
    
    Description of Annual Bonus Plans
(incorporated by reference to
Exhibit 10.2 to Form 10-Q, filed by
Alon USA Energy, Inc. on May 6,
2008, SEC File No. 001-32567).10.23*
    
    Change of Control Incentive Bonus
Program (incorporated by reference
to Exhibit 10.29 to Form S-1, filed
by Alon USA Energy, Inc. on May 11,
2005, SEC File No. 333-124797).10.24*
    
    Form of Officer Indemnification
Agreement (incorporated by
reference to Exhibit 10.32 to Form
S-1, filed by Alon USA Energy, Inc.
on May 11, 2005, SEC File No.
333-124797).10.25*
    
    Form of Director and Officer
Indemnification Agreement
(incorporated by reference to
Exhibit 10.33 to Form S-1, filed by
Alon USA Energy, Inc. on May 11,
2005, SEC File No. 333-124797).
 42




---



##### Table of Contents



ExhibitNumber
    
    Description10.26*
    
    Alon USA Energy, Inc. 2005
Incentive Compensation Plan, as
amended on November 7, 2005
(incorporated by reference to
Exhibit 10.2 to Form 8-K, filed by
Alon USA Energy, Inc. on November
8, 2005, SEC File No. 001-32567).10.27*
    
    Form of Restricted Stock Award
Agreement relating to Director
Grants pursuant to Section 12 of
the Alon USA Energy, Inc. 2005
Incentive Compensation Plan
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on August 5,
2005, SEC File No. 001-32567).10.28*
    
    Form of Restricted Stock Award
Agreement relating to Participant
Grants pursuant to Section 8 of the
Alon USA Energy, Inc. 2005
Incentive Compensation Plan
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on August 23,
2005, SEC File No. 001-32567).10.29*
    
    Form II of Restricted Stock Award
Agreement relating to Participant
Grants pursuant to Section 8 of the
Alon USA Energy, Inc. 2005
Incentive Compensation Plan
(incorporated by reference to
Exhibit 10.3 to Form 8-K, filed by
Alon USA Energy, Inc. on November
8, 2005, SEC File No. 001-32567).10.30*
    
    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
Alon USA Energy, Inc. on March 12,
2007, SEC File No. 001-32567).10.31*
    
    Form of Amendment to 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 10.2 to Form 8-K, filed by
Alon USA Energy, Inc. on January
27, 2010, SEC File No. 001-32567).10.32*
    
    Form II 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
Alon USA Energy, Inc. on January
27, 2010, SEC File No. 001-32567).10.33
    
    Credit Agreement dated as of March
15, 2010 (as amended, supplemented
or otherwise modified from time to
time), among the Company, each
other party joined as a borrower
thereunder from time to time, the
Lenders party thereto, and Bank
Hapoalim B.M., as Administrative
Agent (incorporated by reference to
Exhibit 10.35 to Form 10-K, filed
by Alon Refining Krotz Springs,
Inc. on March 16, 2006, SEC File
No. 333-163942).10.34
    
    Amendment No. 1 to Credit
Agreement, dated May 28, 2010,
among Alon Refining Krotz Springs,
Inc., each other party joined as a
borrower thereunder from time to
time, the Lenders party thereto,
and Bank Hapoalim B.M., as
Administrative Agent (incorporated
by reference to Exhibit 10.3 to
Form 10-Q, filed by Alon USA
Energy, Inc. on August 9, 2010, SEC
File No. 333-124797).10.35
    
    Amendment No. 2 to Credit
Agreement, dated June 15, 2010,
among Alon Refining Krotz Springs,
Inc., each other party joined as a
borrower thereunder from time to
time, the Lenders party thereto,
and Bank Hapoalim B.M., as
Administrative Agent (incorporated
by reference to Exhibit 10.4 to
Form 10-Q, filed by Alon USA
Energy, Inc. on August 9, 2010, SEC
File No. 333-124797).10.36
    
    Amendment No. 3 to Credit
Agreement, dated August 11, 2010
(as amended, supplemented or
otherwise modified from time to
time), among Alon Refining Krotz
Springs, Inc., each other party
joined as a borrower thereunder
from time to time, the Lenders
party thereto, and Bank Hapoalim
B.M., as Administrative Agent
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on August 13,
2010, 2010, SEC File No.
001-32567).10.37
    
    Credit Agreement, dated May 28,
2010, by and between Alon Refining
Krotz Springs, Inc. and Goldman
Sachs Bank USA, as Issuing Bank
(incorporated by reference to
Exhibit 10.5 to Form 10-Q, filed by
Alon USA Energy, Inc. on August 9,
2010, SEC File No. 333-124797).10.38
    
    Amended and Restated Supply and
Offtake Agreement, dated May 26,
2010 by and between Alon Refining
Krotz Springs, Inc. and J. Aron &
Company (incorporated by reference
to Exhibit 10.6 to Form 10-Q, filed
by Alon USA Energy, Inc. on August
9, 2010, SEC File No. 333-124797).12.1

    
    Statement Regarding Computation of
Ratio of Earnings to Fixed Charges.
 43




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##### Table of Contents



ExhibitNumber
    
    Description23.1
    
    Consent of KPMG LLP23.2
    
    Consent of KPMG LLP31.1
    
    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.
 
 *
    
    Identifies management contracts and compensatory plans or arrangements.
    
    Portions of the exhibit have been omitted pursuant to a request for
confidential treatment. The confidential portions have been furnished to the
SEC. 44




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
 PageAudited Financial Statements:Independent Auditors Report
    
    F-2Balance Sheets as of December 31, 2010 and 2009
    
    F-3Statements
of Operations for the years ended December 31, 2010, 2009, and
the period from July 1, 2008 (inception) through December 31, 2008
    
    F-4Statements of Stockholders Equity for years ended December 31, 2010, 2009
and the period from July 1, 2008 (inception) through December 31, 2008
    
    F-5Statements of Cash Flows for the years ended December 31, 2010, 2009 and the
period from July 1, 2008 (inception) through December 31, 2008
    
    F-6Notes to Financial Statements
    
    F-7Krotz Springs Refining Business of Valero Energy CorporationAudited Financial Statements:Independent Auditors Report
    
    F-22Balance Sheets as of June 30, 2008 and December 31, 2007 and December 31, 2006
    
    F-23Statements of Operations for the six months ended June 30, 2008 and each of
the years in the two-year period ended December 31, 2007
    
    F-24Statements of Changes in Net Parent Investment for the six months ended June
30, 2008 and each of the years in the two-year period ended December 31, 2007.
    
    F-25Statements of Cash Flows for the six months ended June 30, 2008 and each of
the years in the two-year period ended December 31, 2007
    
    F-26Notes to Financial Statements
    
    F-27
 F-1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    /s/ KPMG LLP 
 F-2




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
 
 BALANCE SHEETS
 (in thousands, except share data)
 As of December 31,2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    277
    
    
    $
    26,161Accounts receivable
    
    
    5,805
    
    
    
    8,344Inventories
    
    
    18,561
    
    
    
    54,623Prepaid expenses
    
    
    1,958
    
    
    
    615Total current assets
    
    
    26,601
    
    
    
    89,743Property, plant and equipment, net
    
    
    350,072
    
    
    
    362,265Other assets
    
    
    29,572
    
    
    
    30,829Total assets
    
    $
    406,245
    
    
    $
    482,837LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    152,741
    
    
    $
    92,682Accrued liabilities
    
    
    22,662
    
    
    
    31,299Total current liabilities
    
    
    175,403
    
    
    
    123,981Other non-current liabilities
    
    
    27,597
    
    
    
    7,873Long-term debt
    
    
    207,378
    
    
    
    288,980Total liabilities
    
    
    410,378
    
    
    
    420,834Stockholders equity:Class A Common stock, par value $0.01, 75,000 shares
authorized; 50,110 and 36,219 shares issued and
outstanding at December 31, 2010 and 2009,
respectively
    
    
    
    
    
    
    Class B Common stock, par value $0.01, 1,000 shares
authorized; 315 and 405 shares issued and outstanding
at December 31, 2010 and 2009, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    167,656
    
    
    
    126,656Accumulated other comprehensive loss, net of income tax
    
    
    
    
    
    
    (7,240
    )Retained deficit
    
    
    (171,789
    )
    
    
    (57,413
    )Total stockholders equity
    
    
    (4,133
    )
    
    
    62,003Total liabilities and stockholders equity
    
    $
    406,245
    
    
    $
    482,837
  F-3




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
 
 STATEMENTS OF OPERATIONS
 (dollars in thousands)
 Period fromJuly 1, 2008For the Year
    
    
    For the Year
    
    
    (inception)Ended
    
    
    Ended
    
    
    throughDecember 31,
    
    
    December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2008Net sales
    
    $
    1,254,663
    
    
    $
    1,156,883
    
    
    $
    1,054,397Operating costs and expenses:Cost of sales
    
    
    1,222,647
    
    
    
    1,031,368
    
    
    
    987,536Direct operating expenses
    
    
    62,321
    
    
    
    74,007
    
    
    
    45,375Selling, general and administrative expenses
    
    
    6,890
    
    
    
    7,328
    
    
    
    903Unrealized loss associated with consignment inventory
    
    
    3,537
    
    
    
    
    
    
    
    Depreciation and amortization expense
    
    
    21,844
    
    
    
    20,485
    
    
    
    8,492Total operating costs and expenses
    
    
    1,317,239
    
    
    
    1,133,188
    
    
    
    1,042,306Operating income (loss)
    
    
    (62,576
    )
    
    
    23,695
    
    
    
    12,091Interest expense
    
    
    (47,695
    )
    
    
    (69,090
    )
    
    
    (24,382
    )Other income
(expense), net
    
    
    (4,105
    )
    
    
    17
    
    
    
    256Loss before income tax benefit
    
    
    (114,376
    )
    
    
    (45,378
    )
    
    
    (12,035
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (114,376
    )
    
    $
    (45,378
    )
    
    $
    (12,035
    )
  F-4




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
 
 STATEMENT OF STOCKHOLDERS EQUITY
 For the Period from July 1, 2008 (Inception) through December 31, 2010
 (dollars in thousands)
 AccumulatedAdditional
    
    
    OtherCommon
    
    
    Paid-In
    
    
    Comprehensive
    
    
    RetainedStock
    
    
    Capital
    
    
    Loss
    
    
    Deficit
    
    
    TotalBalance at July 1, 2008
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital contribution from parent
    
    
    
    
    
    
    101,656
    
    
    
    
    
    
    
    
    
    
    
    101,656Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,035
    )
    
    
    (12,035
    )Other
comprehensive loss:Fair value of commodity
derivative contracts, net of
tax of $0
    
    
    
    
    
    
    
    
    
    
    (1,831
    )
    
    
    
    
    
    
    (1,831
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,866
    )Balance at December 31, 2008
    
    
    
    
    
    
    101,656
    
    
    
    (1,831
    )
    
    
    (12,035
    )
    
    
    87,790Capital contribution from parent
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    25,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,378
    )
    
    
    (45,378
    )Other comprehensive loss:Fair value of commodity
derivative contracts, net of
tax of $0
    
    
    
    
    
    
    
    
    
    
    (5,409
    )
    
    
    
    
    
    
    (5,409
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50,787
    )Balance at December 31, 2009
    
    
    
    
    
    
    126,656
    
    
    
    (7,240
    )
    
    
    (57,413
    )
    
    
    62,003Capital contribution from parent
    
    
    
    
    
    
    41,000
    
    
    
    
    
    
    
    
    
    
    
    41,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (114,376
    )
    
    
    (114,376
    )Other
comprehensive  income:Fair value of commodity derivative
contracts, net of tax of $0
    
    
    
    
    
    
    
    
    
    
    7,240
    
    
    
    
    
    
    
    7,240Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66,136
    )Balance at December 31, 2010
    
    $
    
    
    
    $
    167,656
    
    
    $
    
    
    
    $
    (171,789
    )
    
    $
    (4,133
    )
  F-5




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
 
 STATEMENTS OF CASH FLOWS
 (dollars in thousands)
 Period fromJuly 1, 2008For the Year
    
    
    For the Year
    
    
    (inception)Ended
    
    
    Ended
    
    
    throughDecember 31,
    
    
    December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (114,376
    )
    
    $
    (45,378
    )
    
    $
    (12,035
    )Adjustments to reconcile net loss to net cash provided by
operating activities:Depreciation and amortization expense
    
    
    21,844
    
    
    
    20,485
    
    
    
    8,492Unrealized gain on heating oil crack spread hedge
    
    
    
    
    
    
    
    
    
    
    (116,701
    )Amortization of debt issuance costs
    
    
    2,512
    
    
    
    4,770
    
    
    
    2,265Amortization of original issuance discount
    
    
    1,685
    
    
    
    328
    
    
    
    Write-off of unamortized debt issuance costs
    
    
    6,659
    
    
    
    20,482
    
    
    
    Changes in operating assets and liabilities, net of
acquisition effects:Accounts receivable
    
    
    2,539
    
    
    
    36,165
    
    
    
    (43,709
    )Heating oil crack spread hedge
    
    
    
    
    
    
    116,701
    
    
    
    Inventories
    
    
    23,924
    
    
    
    (14,305
    )
    
    
    104,686Prepaid expenses
    
    
    (1,343
    )
    
    
    20,365
    
    
    
    (20,925
    )Other assets
    
    
    (885
    )
    
    
    (52
    )
    
    
    Accounts payable
    
    
    60,059
    
    
    
    14,540
    
    
    
    56,071Accrued liabilities
    
    
    7,358
    
    
    
    (20,907
    )
    
    
    34,630Other long-term liabilities
    
    
    19,724
    
    
    
    43
    
    
    
    (966
    )Net cash provided by operating activities
    
    
    29,700
    
    
    
    153,237
    
    
    
    11,808Cash flows from investing activities:Capital expenditures
    
    
    (7,350
    )
    
    
    (12,404
    )
    
    
    (3,453
    )Capital expenditures for turnarounds and catalysts
    
    
    (2,383
    )
    
    
    (13,290
    )
    
    
    Acquisition of refinery
    
    
    
    
    
    
    
    
    
    
    (481,011
    )Earnout payments related to refinery acquisition
    
    
    (8,750
    )
    
    
    (19,688
    )
    
    
    Net cash used in investing activities
    
    
    (18,483
    )
    
    
    (45,382
    )
    
    
    (484,464
    )Cash flows from financing activities:Deferred debt issuance costs
    
    
    (1,147
    )
    
    
    (16,478
    )
    
    
    (28,105
    )Proceeds from senior secured notes
    
    
    
    
    
    
    205,365
    
    
    
    Cash received from inventory supply agreement
    
    
    6,333
    
    
    
    20,237
    
    
    
    Additions to long-term debt
    
    
    
    
    
    
    
    
    
    
    252,000Payments on long-term debt
    
    
    
    
    
    
    (252,000
    )
    
    
    Revolving credit facility, net
    
    
    (83,287
    )
    
    
    (63,818
    )
    
    
    147,105Proceeds from parent
    
    
    41,000
    
    
    
    25,000
    
    
    
    101,656Net cash provided by (used in) financing activities
    
    
    (37,101
    )
    
    
    (81,694
    )
    
    
    472,656Net increase (decrease) in cash and cash equivalents
    
    
    (25,884
    )
    
    
    26,161
    
    
    
    Cash and cash equivalents at beginning of period
    
    
    26,161
    
    
    
    
    
    
    
    Cash and cash equivalents at end of period
    
    $
    277
    
    
    $
    26,161
    
    
    $
    Supplemental cash flow information:Cash paid for interest
    
    $
    43,165
    
    
    $
    43,247
    
    
    $
    16,269Non-cash activities:Financing activity  payments on
long-term debt from deposit held to
secure heating oil crack spread hedge
    
    $
    
    
    
    $
    (50,000
    )
    
    $
    Financing activity  proceeds from
borrowings retained by bank as deposit
for hedge related activities for
refinery acquisition
    
    $
    
    
    
    $
    
    
    
    $
    50,000
  F-6




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
 
 NOTES TO FINANCIAL STATEMENTS
  1. DESCRIPTION AND NATURE OF BUSINESS
  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 (a) Basis of Presentation
  (b) Use of Estimates
  (c) Revenue Recognition
     F-7




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 (d) Cost Classifications
     (e) Cash and Cash Equivalents
  (f) Accounts Receivable
  (g) Inventories
  (h) Hedging Activity
   F-8




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 (i) Property, Plant and Equipment
    (j) Impairment and Disposal of Long-Lived Assets
  (k) Asset Retirement Obligations
  (l) Turnarounds and Chemical Catalyst Costs
  (m) Income Taxes
   F-9




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  (n) Environmental Expenditures
   (o) Other Comprehensive Income (Loss)
  (p) Commitments and Contingencies
  (q) Intangible Assets
  (r) Reclassifications
  3. SUPPLY AND OFFTAKE AGREEMENT
 Supply and Offtake Agreement with J. Aron & Company
  F-10




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  Standby LC Facility
   4. KROTZ SPRINGS REFINERY ACQUISITION
   Cash paid
    
    $
    474,494Transaction costs
    
    
    6,517Total Purchase Price
    
    $
    481,011
  Current assets
    
    $
    145,859Property, plant and equipment
    
    
    376,702Current liabilities
    
    
    (29,309
    )Other non-current liabilities
    
    
    (12,241
    )Total Purchase Price
    
    $
    481,011
  F-11




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  5. FAIR VALUE AND DERIVATIVE INSTRUMENTS
 (a) Fair Value of Financial Instruments
    Quoted Pricesin ActiveMarkets
    
    
    Significantfor Identical
    
    
    Other
    
    
    SignificantAssets or
    
    
    Observable
    
    
    UnobservableLiabilities
    
    
    Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalYear ended December 31, 2010Assets:Commodity contracts (futures & forwards)
    
    $
    981
    
    
    $
    
    
    
    $
    
    
    
    $
    981Liabilities:Commodity contracts (heating oil swaps)
    
    
    
    
    
    
    681
    
    
    
    
    
    
    
    681Commodity contracts (call options)
    
    
    
    
    
    
    8,876
    
    
    
    
    
    
    
    8,876Year ended December 31, 2009Assets:Commodity contracts (heating oil swaps)
    
    $
    
    
    
    $
    89
    
    
    $
    
    
    
    $
    89Liabilities:Commodity contracts (crude swaps)
    
    
    
    
    
    
    9,983
    
    
    
    
    
    
    
    9,983
 (b) Derivative Financial Instruments
 Commodity Derivatives  Mark to Market
  F-12




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
       Commodity Derivatives  Cash Flow Hedges
    F-13




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  As of December 31, 2010Asset Derivatives
    
    
    Liability DerivativesBalance Sheet
    
    
    
    
    
    
    Balance SheetLocation
    
    
    Fair Value
    
    
    Location
    
    
    Fair ValueDerivatives not designated as hedging instruments:Commodity contracts (swaps)
    
    
    
    
    
    $
    
    
    
    Accounts Payable
    
    
    $
    (681
    )Commodity contracts (futures, forwards, swaps and call options)
    
    
    
    
    
    
    
    
    
    Accrued liabilities
    
    
    
    (5,840
    )Commodity contracts (futures, forwards, swaps and call options)
    
    Accounts Receivable
    
    
    $
    1,073
    
    
    Other non-current 
liabilities
    
    
    $
    (3,128
    )Total derivatives not designated as hedging instruments
    
    
    
    
    
    $
    1,073
    
    
    
    
    
    
    $
    (9,649
    )
 As of December 31, 2009Asset Derivatives
    
    
    Liability DerivativesBalance Sheet
    
    
    
    
    
    
    Balance SheetLocation
    
    
    Fair Value
    
    
    Location
    
    
    Fair ValueDerivatives not designated as hedging
instruments:Commodity contracts (futures, forwards and swaps)
    
    Accounts receivable
    
    
    $
    89
    
    
    Accrued liabilities
    
    
    $
    9,983Total derivatives not designated as
hedging instruments
    
    
    
    
    
    $
    89
    
    
    
    
    
    
    $
    9,983
  Gain (Loss) Reclassified fromAccumulated OCI into IncomeGain (Loss) Reclassified from
    
    
    (Ineffective Portion andGain (Loss)
    
    
    Accumulated OCI into Income
    
    
    Amount Excluded fromRecognized in
    
    
    (Effective Portion)
    
    
    Effectiveness Testing)Cash Flow Hedging Relationships
    
    OCI
    
    
    Location
    
    
    Amount
    
    
    Location
    
    
    AmountFor the Year Ended December 31, 2010Commodity contracts (heating oil swaps)
    
    $
    
    
    
    Cost of sales
    
    
    $
    (7,240
    )
    
    
    
    
    
    $
    Total derivatives
    
    $
    
    
    
    
    
    
    
    $
    (7,240
    )
    
    
    
    
    
    $
    
 Gain (Loss) Reclassified fromAccumulated OCI into IncomeGain (Loss) Reclassified from
    
    
    (Ineffective Portion andGain (Loss)
    
    
    Accumulated OCI into Income
    
    
    Amount Excluded fromRecognized in
    
    
    (Effective Portion)
    
    
    Effectiveness Testing)Cash Flow Hedging Relationships
    
    OCI
    
    
    Location
    
    
    Amount
    
    
    Location
    
    
    AmountFor the Year Ended December 31, 2009Commodity contracts (heating oil swaps)
    
    $
    
    
    
    Cost of sales
    
    
    $
    5,409
    
    
    
    
    
    
    $
    Total derivatives
    
    $
    
    
    
    
    
    
    
    $
    5,409
    
    
    
    
    
    
    $
    
 Gain (Loss) Recognized in IncomeDerivatives not designated as hedging instruments:
    
    Location
    
    
    AmountFor the Year Ended December 31, 2010Commodity contracts (futures & forwards)
    
    Cost of sales
    
    $
    4,246Commodity contracts (heating oil swaps)
    
    Cost of sales
    
    
    (597
    )Commodity
contracts (call options)
    
    Other income 
(expense), net
    
    
    (4,119
    )Total derivatives
    
    
    
    
    
    $
    (470
    )For the Year Ended December 31, 2009Commodity contracts (futures & forwards)
    
    Cost of sales
    
    $
    (4,370
    )Commodity contracts (heating oil swaps)
    
    Cost of sales
    
    
    48,956Commodity contracts (crude swaps)
    
    Cost of sales
    
    
    (11,058
    )Total derivatives
    
    
    
    
    
    $
    33,528
 F-14




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 6. ACCOUNTS RECEIVABLE
   7. INVENTORIES
      8. PROPERTY, PLANT AND EQUIPMENT
  December 31,2010
    
    
    2009Refining facilities
    
    $
    396,787
    
    
    $
    389,441Less accumulated depreciation
    
    
    (46,715
    )
    
    
    (27,176
    )Property, plant and equipment, net
    
    $
    350,072
    
    
    $
    362,265
  F-15




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 9. OTHER ASSETS
  December 31,2010
    
    
    2009Deferred turnaround and chemical catalyst cost, net
    
    $
    11,720
    
    
    $
    11,540Deferred debt issuance costs
    
    
    9,049
    
    
    
    17,118Intangibles
    
    
    2,112
    
    
    
    2,171Long-term
receivables
    
    
    6,691
    
    
    
    Total other assets
    
    $
    29,572
    
    
    $
    30,829
  10. ACCRUED LIABILITIES
  December 31,2010
    
    
    2009Taxes other than income taxes
    
    $
    1,746
    
    
    $
    1,365Employee costs
    
    
    1,337
    
    
    
    1,678Commodity contracts
    
    
    5,840
    
    
    
    9,983Accrued finance charges
    
    
    6,239
    
    
    
    8,137Valero earnout liability
    
    
    6,562
    
    
    
    8,750Other
    
    
    938
    
    
    
    1,386Total accrued liabilities
    
    $
    22,662
    
    
    $
    31,299
 11. OTHER NON-CURRENT LIABILITIES
  December 31,2010
    
    
    2009Environmental liability
    
    $
    385
    
    
    $
    412Asset retirement obligations
    
    
    962
    
    
    
    899Valero earnout liability
    
    
    
    
    
    
    6,562Commodity contracts
    
    
    3,128
    
    
    
    Consignment inventory
    
    
    23,122
    
    
    
    Total other non-current liabilities
    
    $
    27,597
    
    
    $
    7,873
  12. INCOME TAXES
  F-16




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  December 31,2010
    
    
    2009Computed tax benefit
    
    $
    (40,032
    )
    
    $
    (15,882
    )State and local income taxes, net of federal benefit
    
    
    (3,260
    )
    
    
    (1,299
    )Other, net
    
    
    (307
    )
    
    
    (352
    )Change in valuation allowance
    
    
    43,599
    
    
    
    17,533Income tax benefit
    
    $
    
    
    
    $
    
  December 31,2010
    
    
    2009Deferred income tax assets:Accrued liabilities and other
    
    $
    783
    
    
    $
    894Non-current accrued liabilities and other
    
    
    871
    
    
    
    3,565Net operating loss carryover
    
    
    124,459
    
    
    
    58,200Less valuation allowance
    
    
    (64,959
    )
    
    
    (24,101
    )Net deferred income tax assets
    
    $
    61,154
    
    
    $
    38,558Deferred income tax liabilities:Unrealized gains
    
    $
    (3,795
    )
    
    $
    (2,936
    )Property, plant, and equipment
    
    
    (51,884
    )
    
    
    (30,369
    )Other non-current liabilities
    
    
    (4,605
    )
    
    
    (4,373
    )Intangibles
    
    
    (870
    )
    
    
    (880
    )Deferred income tax liabilities
    
    $
    (61,154
    )
    
    $
    (38,558
    )Net deferred income tax after valuation allowance
    
    $
    
    
    
    $
    
  Income Taxes
 13. RELATED-PARTY TRANSACTIONS
 A portion of the purchase price for the acquisition of our refinery from Valero was provided through an $80,000
equity investment in our direct parent company, Alon Refining Louisiana (ARL), by Alon Israel Oil Company,
Ltd. (Alon Israel), the majority stockholder of Alon USA, together with a $21,656 equity investment by Alon
USA and its affiliates. Also in connection with the acquisition, Alon Israel, together with Alon USA and its
affiliates, arranged for the issuance of $66,000 of standby letters of credit, without recourse to us, to support
increased borrowing capacity under our revolving credit facility.In connection with the loan amendments in April 2009, Alon Israel, together with Alon USA and its affiliates,
invested an additional $25,000 in the equity of ARL, which was contributed by ARL to our company, and arranged
for the issuance of an additional $25,000 of standby letters of credit without recourse to us.In 2010, Alon USA invested an additional $41,000 in the equity of ARL, which was contributed by ARL to our
company. Also in 2010, in connection with the termination of our revolving credit facility, $76,000 of letters of
credit support was returned to Alon Israel and Alon USA and its affiliates.These contributions, together with the equity and letters of credit support provided at the time of the acquisition,
resulted in approximately $167,656 of equity and $15,000 of letters of credit support provided to our company from
Alon Israel and Alon USA and its affiliates.
 F-17




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
    14. LONG-TERM DEBT
  December 31,2010
    
    
    2009Senior secured notes, net of discount
    
    $
    207,378
    
    
    $
    205,693Revolving credit facility
    
    
    
    
    
    
    83,287Total long-term debt
    
    $
    207,378
    
    
    $
    288,980
 (a) Alon Refining Krotz Springs, Inc. Credit Facilities
 Senior Secured Notes
 F-18




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
    Short-Term Credit Facility
 Revolving Credit Facility
  (b) Maturity of Long-Term Debt
  (c) Interest and Financing Expense
  December 31,2010
    
    
    2009Interest expense
    
    $
    35,099
    
    
    $
    38,412Letters of credit and finance charges
    
    
    2,239
    
    
    
    5,426Capitalized interest
    
    
    (499
    )
    
    
    Amortization of debt issuance costs (includes
write-off of unamortized debt issuance costs in
2010 of $6,659 and in 2009 of $20,482)
    
    
    10,856
    
    
    
    25,252Total interest expense
    
    $
    47,695
    
    
    $
    69,090
 15. EMPLOYEE BENEFIT PLANS
    F-19




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 16. COMMITMENTS AND CONTINGENCIES
 (a) Leases
  Year ending December 31:2011
    
    $
    5352012
    
    
    4242013
    
    
    3912014
    
    
    3912015
    
    
    3342016 and thereafter
    
    
    1,201Total
    
    $
    3,276
  (b) Other Commitments
  Offtake Agreement with Valero
  Earnout Agreement with Valero
  F-20




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 (c) Environmental
    (d) Litigation Matters
  F-21




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##### Table of Contents



Independent Auditors Report
      
 F-22




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
 
 BALANCE SHEETS
 (dollars in thousands)
 June 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006ASSETSCurrent assets:Cash
    
    $
    
    
    
    $
    13
    
    
    $
    11Accounts receivable
    
    
    274
    
    
    
    70
    
    
    
    517Inventories
    
    
    16,445
    
    
    
    48,751
    
    
    
    43,171Deferred income taxes
    
    
    55,883
    
    
    
    34,209
    
    
    
    17,936Prepaid expenses
    
    
    139
    
    
    
    
    
    
    
    25Total current assets
    
    
    72,741
    
    
    
    83,043
    
    
    
    61,660Property, plant and equipment, at cost
    
    
    188,220
    
    
    
    181,319
    
    
    
    173,967Accumulated depreciation
    
    
    (42,314
    )
    
    
    (38,474
    )
    
    
    (32,345
    )Property, plant and equipment, net
    
    
    145,906
    
    
    
    142,845
    
    
    
    141,622Deferred charges and other assets, net
    
    
    4,072
    
    
    
    3,264
    
    
    
    4,170Total assets
    
    $
    222,719
    
    
    $
    229,152
    
    
    $
    207,452LIABILITIES AND NET PARENT INVESTMENTCurrent liabilities:Accounts payable
    
    $
    7,842
    
    
    $
    9,214
    
    
    $
    7,431Accrued expenses
    
    
    942
    
    
    
    1,130
    
    
    
    1,133Taxes other than income taxes
    
    
    1,731
    
    
    
    352
    
    
    
    185Income taxes payable
    
    
    2,340
    
    
    
    3,056
    
    
    
    4,345Total current liabilities
    
    
    12,855
    
    
    
    13,752
    
    
    
    13,094Deferred income taxes
    
    
    29,469
    
    
    
    28,649
    
    
    
    24,306Other long-term liabilities
    
    
    429
    
    
    
    231
    
    
    
    442Commitments and contingenciesNet parent investment
    
    
    179,966
    
    
    
    186,520
    
    
    
    169,610Total liabilities and net parent investment
    
    $
    222,719
    
    
    $
    229,152
    
    
    $
    207,452
  F-23




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
 
 STATEMENTS OF OPERATIONS

(dollars in thousands)
 Six Months EndedJune 30,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2006Operating revenues
    
    $
    1,539,629
    
    
    $
    2,293,486
    
    
    $
    2,450,200Costs and expenses:Cost of sales
    
    
    1,543,665
    
    
    
    2,143,920
    
    
    
    2,245,070Operating expenses
    
    
    43,721
    
    
    
    84,388
    
    
    
    72,754General and administrative expenses
    
    
    1,909
    
    
    
    4,632
    
    
    
    4,921Depreciation and amortization expense
    
    
    4,841
    
    
    
    9,677
    
    
    
    8,259Total costs and expenses
    
    
    1,594,136
    
    
    
    2,242,617
    
    
    
    2,331,004Operating income (loss)
    
    
    (54,507
    )
    
    
    50,869
    
    
    
    119,196Other income, net
    
    
    2
    
    
    
    1
    
    
    
    34Income (loss) before income tax expense
    
    
    (54,505
    )
    
    
    50,870
    
    
    
    119,230Income tax expense (benefit)
    
    
    (19,680
    )
    
    
    17,276
    
    
    
    43,510Net income (loss)
    
    $
    (34,825
    )
    
    $
    33,594
    
    
    $
    75,720
  F-24




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
 
 STATEMENTS OF CHANGES IN NET PARENT INVESTMENT
(dollars in thousands)
 Balance as of January 1, 2006
    
    $
    129,733Net income
    
    
    75,720Net cash repayments to parent
    
    
    (35,843
    )Balance as of December 31, 2006
    
    
    169,610Net income
    
    
    33,594Net cash repayments to parent
    
    
    (16,684
    )Balance as of December 31, 2007
    
    
    186,520Net loss
    
    
    (34,825
    )Net cash advances from parent
    
    
    28,271Balance as of June 30, 2008
    
    $
    179,966
  F-25




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
 
 STATEMENTS OF CASH FLOWS

(dollars in thousands)
 Six Months Ended
    
    
    Year EndedJune 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net income (loss)
    
    $
    (34,825
    )
    
    $
    33,594
    
    
    $
    75,720Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:Depreciation and amortization expense
    
    
    4,841
    
    
    
    9,677
    
    
    
    8,259Deferred income tax expense (benefit)
    
    
    (20,854
    )
    
    
    (11,930
    )
    
    
    2,375Changes in current assets and current liabilities
    
    
    30,432
    
    
    
    (4,452
    )
    
    
    (9,056
    )Changes in deferred charges and other, net
    
    
    198
    
    
    
    (211
    )
    
    
    426Net cash provided by (used in) operating activities
    
    
    (20,208
    )
    
    
    26,678
    
    
    
    77,724Cash flows from investing activities:Capital expenditures
    
    
    (6,495
    )
    
    
    (9,001
    )
    
    
    (38,106
    )Deferred turnaround and catalyst costs
    
    
    (1,858
    )
    
    
    (995
    )
    
    
    (3,773
    )Other investing activities, net
    
    
    277
    
    
    
    4
    
    
    
    3Net cash used in investing activities
    
    
    (8,076
    )
    
    
    (9,992
    )
    
    
    (41,876
    )Cash flows from financing activities:Net cash advances from (repayments to) parent
    
    
    28,271
    
    
    
    (16,684
    )
    
    
    (35,843
    )Net cash provided by (used in) financing activities
    
    
    28,271
    
    
    
    (16,684
    )
    
    
    (35,843
    )Net increase (decrease) in cash
    
    
    (13
    )
    
    
    2
    
    
    
    5Cash at beginning of period
    
    
    13
    
    
    
    11
    
    
    
    6Cash at end of period
    
    $
    
    
    
    $
    13
    
    
    $
    11
  F-26




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. BUSINESS DESCRIPTION
   2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
    Use of Estimates
  F-27




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Inventories
   Property, Plant and Equipment
    Deferred Charges and Other Assets
  
    
    refinery turnaround costs, which are incurred in connection with planned major
maintenance activities at the Krotz Springs Refinery and which are deferred when incurred
and amortized on a straight-line basis over the period of time estimated to lapse until the
next turnaround occurs, and
    
    fixed-bed catalyst costs, representing the cost of catalyst that is changed out at
periodic intervals when the quality of the catalyst has deteriorated beyond its prescribed
function, which are deferred when incurred and amortized on a straight-line basis over the
estimated useful life of the specific catalyst.
 Impairment and Disposal of Long-Lived Assets
  Taxes Other than Income Taxes
  F-28




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Income Taxes
     Asset Retirement Obligation
  Environmental Matters
  F-29




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Net Parent Investment
  Comprehensive Income
  Revenue Recognition
  Cost of Sales
  Operating Expenses
  Stock-Based Compensation
  Segment Disclosures
  Financial Instruments
  F-30




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 New Accounting Pronouncements
 FASB Statement No. 157
  FASB Statement No. 159
  3. INVENTORIES
  June 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Refinery feedstocks
    
    $
    7,205
    
    
    $
    14,711
    
    
    $
    11,526Refined products and blendstocks
    
    
    7,185
    
    
    
    31,959
    
    
    
    29,765Materials and supplies
    
    
    2,055
    
    
    
    2,081
    
    
    
    1,880Inventories
    
    $
    16,445
    
    
    $
    48,751
    
    
    $
    43,171
   F-31




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 4. PROPERTY, PLANT AND EQUIPMENT
  EstimatedUseful Lives
    
    
    June 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Land
    
    
    
    
    
    $
    3,102
    
    
    $
    3,102
    
    
    $
    3,102Crude oil processing facilities
    
    25 years
    
    
    
    143,638
    
    
    
    143,165
    
    
    
    142,585Buildings
    
    39 - 44 years
    
    
    
    9,428
    
    
    
    7,567
    
    
    
    7,553Precious metals
    
    
    
    
    
    
    2,828
    
    
    
    3,062
    
    
    
    3,313Other
    
    1 - 39 years
    
    
    
    13,183
    
    
    
    12,615
    
    
    
    13,454Construction in progress
    
    
    
    
    
    
    16,041
    
    
    
    11,808
    
    
    
    3,960Property, plant and equipment, at cost
    
    
    
    
    
    
    188,220
    
    
    
    181,319
    
    
    
    173,967Accumulated depreciation
    
    
    
    
    
    
    (42,314
    )
    
    
    (38,474
    )
    
    
    (32,345
    )Property, plant and equipment, net
    
    
    
    
    
    $
    145,906
    
    
    $
    142,845
    
    
    $
    141,622
 5. DEFERRED CHARGES AND OTHER ASSETS
  June 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Deferred refinery turnaround costs, net of accumulated amortization
    
    $
    3,637
    
    
    $
    2,792
    
    
    $
    3,569Deferred catalyst costs, net of accumulated amortization
    
    
    435
    
    
    
    472
    
    
    
    601Deferred charges and other assets, net
    
    $
    4,072
    
    
    $
    3,264
    
    
    $
    4,170
 6. ACCRUED EXPENSES
  June 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Employee wage and benefit costs
    
    $
    914
    
    
    $
    714
    
    
    $
    794Other
    
    
    28
    
    
    
    416
    
    
    
    339Accrued expenses
    
    $
    942
    
    
    $
    1,130
    
    
    $
    1,133
 7. STATEMENTS OF CASH FLOWS
  Six MonthsEndedJune 30,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2006Decrease (increase) in current assets:Accounts receivable
    
    $
    (204
    )
    
    $
    447
    
    
    $
    116Inventories
    
    
    32,306
    
    
    
    (5,580
    )
    
    
    340Prepaid expenses
    
    
    (139
    )
    
    
    25
    
    
    
    21Increase (decrease) in current liabilities:Accounts payable
    
    
    (2,006
    )
    
    
    1,781
    
    
    
    (3,630
    )Accrued expenses
    
    
    (188
    )
    
    
    (3
    )
    
    
    230Taxes other than income taxes
    
    
    1,379
    
    
    
    167
    
    
    
    (90
    )Income taxes payable
    
    
    (716
    )
    
    
    (1,289
    )
    
    
    (6,043
    )Changes in current assets and current liabilities
    
    $
    30,432
    
    
    $
    (4,452
    )
    
    $
    (9,056
    )
 F-32




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Six MonthsEndedJune 30,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2006Income taxes paid, net of tax refunds received
    
    $
    1,174
    
    
    $
    30,495
    
    
    $
    47,178Interest paid (net of amount capitalized)
    
    
    
    
    
    
    
    
    
    
    
 8. INCOME TAXES
   Six MonthsEndedJune 30,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2006Current:Federal
    
    $
    
    
    
    $
    26,150
    
    
    $
    36,790State
    
    
    1,174
    
    
    
    3,056
    
    
    
    4,345Total current
    
    
    1,174
    
    
    
    29,206
    
    
    
    41,135Deferred:Federal
    
    
    (18,745
    )
    
    
    (10,677
    )
    
    
    2,268State
    
    
    (2,109
    )
    
    
    (1,253
    )
    
    
    107Total deferred
    
    
    (20,854
    )
    
    
    (11,930
    )
    
    
    2,375Income tax expense (benefit)
    
    $
    (19,680
    )
    
    $
    17,276
    
    
    $
    43,510
  Six MonthsEndedJune 30,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2006Federal income tax expense (benefit) at the U.S. statutory rate
    
    $
    (19,077
    )
    
    $
    17,805
    
    
    $
    41,730U.S. state income tax expense (benefit), net of U.S. federal
income tax effect
    
    
    (608
    )
    
    
    1,172
    
    
    
    2,894U.S. manufacturing deduction
    
    
    
    
    
    
    (1,706
    )
    
    
    (1,118
    )Other, net
    
    
    5
    
    
    
    5
    
    
    
    4Income tax expense (benefit)
    
    $
    (19,680
    )
    
    $
    17,276
    
    
    $
    43,510
 F-33




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  June 30,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Deferred income tax assets:Inventories
    
    $
    55,883
    
    
    $
    34,209
    
    
    $
    17,936Other
    
    
    892
    
    
    
    207
    
    
    
    518Total deferred income tax assets
    
    
    56,775
    
    
    
    34,416
    
    
    
    18,454Deferred income tax liabilities:Property, plant and equipment
    
    
    (26,635
    )
    
    
    (25,395
    )
    
    
    (21,119
    )Turnarounds
    
    
    (1,394
    )
    
    
    (1,047
    )
    
    
    (1,342
    )Other
    
    
    (2,332
    )
    
    
    (2,414
    )
    
    
    (2,363
    )Total deferred income tax liabilities
    
    
    (30,361
    )
    
    
    (28,856
    )
    
    
    (24,824
    )Net deferred income tax assets (liabilities)
    
    $
    26,414
    
    
    $
    5,560
    
    
    $
    (6,370
    )
 9. RELATED-PARTY TRANSACTIONS
     Six MonthsEndedJune 30,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2006Revenues
    
    $
    1,539,629
    
    
    $
    2,293,486
    
    
    $
    2,450,200Cost of sales
    
    
    1,540,412
    
    
    
    2,142,286
    
    
    
    2,243,862Operating expenses
    
    
    693
    
    
    
    1,504
    
    
    
    1,617General and administrative expenses
    
    
    1,909
    
    
    
    4,632
    
    
    
    4,921
 F-34




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 10. EMPLOYEE BENEFIT PLANS
   Six MonthsEndedJune 30,
    
    
    Year Ended December 31,2008
    
    
    2007
    
    
    2006Bonus
    
    $
    829
    
    
    $
    2,488
    
    
    $
    1,939Stock options
    
    
    243
    
    
    
    556
    
    
    
    696Restricted stock
    
    
    136
    
    
    
    251
    
    
    
    181
  11. COMMITMENTS AND CONTINGENCIES
 Leases
   2008
    
    $
    1,0122009
    
    
    1,9102010
    
    
    1,8842011
    
    
    1,8672012
    
    
    1,8002013
    
    
    1,800Remainder
    
    
    5,707Total minimum rental payments
    
    $
    15,980
  Other Commitments
  F-35




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##### Table of Contents



KROTZ SPRINGS REFINING BUSINESS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Litigation Matters
  12. SUBSEQUENT EVENT
   
    
    an agreement to supply crude oil and other feedstocks to the Krotz Springs Refinery
through September 30, 2008, unless terminated earlier by Alon;
    
    an offtake agreement under which Valero will (i) purchase all refined products from the
Krotz Springs Refinery for three months after the effective date of the sale, (ii) purchase
certain products for an additional one to five years after the expiration of the initial
three-month period of the agreement, and (iii) provide certain refined products to Alon
that are not produced at the Krotz Springs Refinery for an initial term of 15 months and
thereafter until terminated by either party; and
    
    a transition services agreement under which Valero agreed to provide certain accounting
and administrative services to Alon, with the services terminating no later than July 31,
2009.
 F-36




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##### Table of Contents



SIGNATURES
  March 14, 2011
    By:
    /s/ Jeff D. MorrisJeff D. MorrisChief Executive Officer  March 14, 2011
    By:
    /s/ David WiessmanDavid WiessmanExecutive ChairmanMarch 14, 2011
    By:
    /s/ Jeff D. MorrisJeff D. MorrisChief Executive Officer and Director
(Principal Executive Officer)March 14, 2011
    By:
    /s/ Shai EvenShai EvenSenior Vice President, Chief Financial Officerand
Director
(Principal Financial and Accounting Officer)March 14, 2011
    By:
    /s/ Joseph A. Concienne IIIJoseph A. Concienne IIIDirectorMarch 14, 2011
    By:
    /s/ Joseph IsraelJoseph IsraelChief Operating Officer and Director




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##### Table of Contents



Exhibit Index
 ExhibitNumber
    
    Description3.1
    
    Certificate of Incorporation of
Alon Refining Krotz Springs, Inc.,
as amended by the Certificate of
Amendment to Certificate of
Incorporation of Alon Refining
Krotz Springs, Inc. (incorporated
by reference to Exhibit 3.1 to Form
S-4, filed by Alon Refining Krotz
Springs, Inc. on December 22, 2009,
SEC File No. 333-163942).3.2
    
    Amended and Restated Bylaws of Alon
Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 3.2 to Form S-4, filed by
Alon Refining Krotz Springs, Inc.
on December 22, 2009, SEC File No.
333-163942).4.1
    
    Indenture, dated as of October 22,
2009, by and among Alon Refining
Krotz Springs, Inc. and Wilmington
Trust FSB, as Trustee (incorporated
by reference to Exhibit 4.1 to
Form 8-K, filed by Alon USA Energy,
Inc. on October 23, 2009, SEC File
No. 001-32567).10.1
    
    Stock Purchase Agreement, dated
May 7, 2008, between Valero
Refining and Marketing Company and
Alon Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on May 13,
2008, SEC File No. 001-32567).10.2
    
    First Amendment to Stock Purchase
Agreement, dated as of July 3,
2008, by and among Valero Refining
and Marketing Company, Alon
Refining Krotz Springs, Inc. and
Valero Refining Company-Louisiana
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on July 10,
2008, SEC File No. 001-32567).10.3
    
    Registration Rights Agreement,
dated October 22, 2009, between
Alon Refining Krotz Springs, Inc.
and Jefferies & Company, Inc.
(incorporated by reference to
Exhibit 10.2 to Form 8-K, filed by
Alon USA Energy, Inc. on
October 23, 2009, SEC File
No. 001-32567).10.4
    
    Purchase Agreement, dated
October 13, 2009, between Alon
Refining Krotz Springs, Inc. and
Jefferies & Co. (incorporated by
reference to Exhibit 10.1 to
Form 8-K, filed by Alon USA Energy,
Inc. on October 19, 2009, SEC File
No. 001-32567).10.5
    
    Offtake Agreement, dated as of
July 3, 2008, by and between Valero
Marketing and Supply Company and
Alon Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.5 to Form S-4/A, filed
by Alon Refining Krotz Springs,
Inc. on January 12, 2010, SEC File
No. 333-163942).10.6
    
    Earnout Agreement, dated as of
July 3, 2008, by and between Valero
Refining and Marketing Company and
Alon Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.6 to Form S-4/A, filed
by Alon Refining Krotz Springs,
Inc. on January 12, 2010, SEC File
No. 333-163942).10.7
    
    First Amendment to Earnout
Agreement, dated as of August 27,
2009, by and between Valero
Refining and Marketing Company and
Alon Refining Krotz Springs, Inc.
(incorporated by reference to
Exhibit 10.7 to Form S-4/A, filed
by Alon Refining Krotz Springs,
Inc. on January 12, 2010, SEC File
No. 333-163942).10.8
    
    Loan and Security Agreement, dated
as of July 3, 2008, by and among
Alon Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., the
lenders party thereto and Bank of
America, N.A., as administrative
agent (incorporated by reference to
Exhibit 10.3 to Form 8-K, filed by
Alon USA Energy, Inc. on July 10,
2008, SEC File No. 001-32567).10.9
    
    First Amendment to Loan and
Security Agreement, dated as of
December 18, 2008, by and among
Alon Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., the
lenders party thereto and Bank of
America, N.A. (incorporated by
reference to Exhibit 10.28 to
Form 10-K, filed by Alon USA
Energy, Inc. on April 10, 2009, SEC
File No. 001-32567).10.10
    
    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 Alon USA Energy,
Inc. on April 27, 2009, SEC File
No. 001-32567).




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##### Table of Contents



ExhibitNumber
    
    Description10.11
    
    Amended and Restated Loan and
Security Agreement, dated as of
October 22, 2009 (as amended,
supplemented or otherwise modified
from time to time), among Alon
Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., each
other party joined as a borrower
thereunder from time to time, the
Lenders party thereto, and Bank of
America, N.A., as Agent
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on
October 23, 2009, SEC
File No. 001-32567).10.12
    
    Term Loan Agreement, dated as of
July 3, 2008, by and among Alon
Refining Louisiana, Inc., Alon
Refining Krotz Springs, Inc., the
lenders party thereto and Credit
Suisse, as administrative agent and
collateral agent (incorporated by
reference to Exhibit 10.2 to
Form 8-K, filed by Alon USA Energy,
Inc. on July 10, 2008, SEC File
No. 001-32567).10.13
    
    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 10-Q, filed by Alon USA
Energy, Inc. on August 6, 2009, SEC
File No. 001-32567).10.14*
    
    Executive Employment Agreement,
dated as of July 31, 2000, between
Jeff D. Morris and Alon USA GP,
Inc., as amended by the Amendment
to Executive/Management Employment
Agreement, dated May 1, 2005
(incorporated by reference to
Exhibit 10.23 to Form S-1, filed by
Alon USA Energy, Inc. on May 11,
2005, SEC File No. 333-124797).10.15*
    
    Second Amendment to Executive
Employment Agreement, dated as of
November 4, 2008, between Jeff D.
Morris and Alon USA GP, LLC
(incorporated by reference to
Exhibit 10.9 to Form 10-Q, filed by
Alon USA Energy, Inc. on
November 7, 2008, SEC File
No. 001-32567).10.16*
    
    Executive Employment Agreement,
dated as of August 1, 2003, between
Shai Even and Alon USA GP, LLC
(incorporated by reference to
Exhibit 10.49 to Form 10-K, filed
by Alon USA Energy, Inc. on
March 15, 2007, SEC File
No. 001-32567).10.17*
    
    Amendment to Executive Employment
Agreement, dated as of November 4,
2008, between Shai Even and Alon
USA GP, LLC. (incorporated by
reference to Exhibit 10.14 to
Form 10-Q, filed by Alon USA
Energy, Inc. on November 7, 2008,
SEC File No. 001-32567).10.18*
    
    Management Employment Agreement,
dated as of October 30, 2008,
between Michael Oster and Alon USA
GP, LLC (incorporated by reference
to Exhibit 10.71 to Form 10-K,
filed by Alon USA Energy, Inc. on
April 10, 2009, SEC File
No. 001-32567).10.19*
    
    Management Employment Agreement,
dated as of September 1, 2000,
between Yosef Israel and Alon USA
GP, LLC (incorporated by reference
to Exhibit 10.33 to Form 10-K,
filed by Alon USA Energy, Inc. on
March 15, 2006, SEC File
No. 001-32567).10.20*
    
    Amendment to Executive/Management
Employment Agreement, dated as of
May 1, 2005 between Yosef Israel
and Alon USA GP, LLC (incorporated
by reference to Exhibit 10.34 to
Form 10-K, filed by Alon USA
Energy, Inc. on March 15, 2006, SEC
File No. 001-32567).10.21*
    
    Second Amendment to
Executive/Management Employment
Agreement, dated as of November 4,
2008, between Yosef Israel and Alon
USA GP, LLC (incorporated by
reference to Exhibit 10.13 to
Form 10-Q, filed by Alon USA
Energy, Inc. on November 7, 2008,
SEC File No. 001-32567).10.22*
    
    Description of Annual Bonus Plans
(incorporated by reference to
Exhibit 10.2 to Form 10-Q, filed by
Alon USA Energy, Inc. on May 6,
2008, SEC File No. 001-32567).10.23*
    
    Change of Control Incentive Bonus
Program (incorporated by reference
to Exhibit 10.29 to Form S-1, filed
by Alon USA Energy, Inc. on May 11,
2005, SEC File No. 333-124797).10.24*
    
    Form of Officer Indemnification
Agreement (incorporated by
reference to Exhibit 10.32 to
Form S-1, filed by Alon USA Energy,
Inc. on May 11, 2005, SEC File
No. 333-124797).10.25*
    
    Form of Director and Officer
Indemnification Agreement
(incorporated by reference to
Exhibit 10.33 to Form S-1, filed by
Alon USA Energy, Inc. on May 11,
2005, SEC File No. 333-124797).




---



##### Table of Contents



ExhibitNumber
    
    Description10.26*
    
    Alon USA Energy, Inc. 2005
Incentive Compensation Plan, as
amended on November 7, 2005
(incorporated by reference to
Exhibit 10.2 to Form 8-K, filed by
Alon USA Energy, Inc. on
November 8, 2005, SEC File
No. 001-32567).10.27*
    
    Form of Restricted Stock Award
Agreement relating to Director
Grants pursuant to Section 12 of
the Alon USA Energy, Inc. 2005
Incentive Compensation Plan
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on August 5,
2005, SEC File No. 001-32567).10.28*
    
    Form of Restricted Stock Award
Agreement relating to Participant
Grants pursuant to Section 8 of the
Alon USA Energy, Inc. 2005
Incentive Compensation Plan
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on August 23,
2005, SEC File No. 001-32567).10.29*
    
    Form II of Restricted Stock Award
Agreement relating to Participant
Grants pursuant to Section 8 of the
Alon USA Energy, Inc. 2005
Incentive Compensation Plan
(incorporated by reference to
Exhibit 10.3 to Form 8-K, filed by
Alon USA Energy, Inc. on
November 8, 2005, SEC
File No. 001-32567).10.30*
    
    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
Alon USA Energy, Inc. on March 12,
2007, SEC File No. 001-32567).10.31*
    
    Form of Amendment to 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 10.2 to Form 8-K, filed by
Alon USA Energy, Inc. on January
27, 2010, SEC File No. 001-32567).10.32*
    
    Form II 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
Alon USA Energy, Inc. on January
27, 2010, SEC File No. 001-32567).10.33
    
    Credit Agreement dated as of March
15, 2010 (as amended, supplemented
or otherwise modified from time to
time), among the Company, each
other party joined as a borrower
thereunder from time to time, the
Lenders party thereto, and Bank
Hapoalim B.M., as Administrative
Agent (incorporated by reference to
Exhibit 10.35 to Form 10-K, filed
by Alon Refining Krotz Springs,
Inc. on March 16, 2006, SEC File
No. 333-163942).10.34
    
    Amendment No. 1 to Credit
Agreement, dated May 28, 2010,
among Alon Refining Krotz Springs,
Inc., each other party joined as a
borrower thereunder from time to
time, the Lenders party thereto,
and Bank Hapoalim B.M., as
Administrative Agent (incorporated
by reference to Exhibit 10.3 to
Form 10-Q, filed by Alon USA
Energy, Inc. on August 9, 2010, SEC
File No. 333-124797).10.35
    
    Amendment No. 2 to Credit
Agreement, dated June 15, 2010,
among Alon Refining Krotz Springs,
Inc., each other party joined as a
borrower thereunder from time to
time, the Lenders party thereto,
and Bank Hapoalim B.M., as
Administrative Agent (incorporated
by reference to Exhibit 10.4 to
Form 10-Q, filed by Alon USA
Energy, Inc. on August 9, 2010, SEC
File No. 333-124797).10.36
    
    Amendment No. 3 to Credit
Agreement, dated August 11, 2010
(as amended, supplemented or
otherwise modified from time to
time), among Alon Refining Krotz
Springs, Inc., each other party
joined as a borrower thereunder
from time to time, the Lenders
party thereto, and Bank Hapoalim
B.M., as Administrative Agent
(incorporated by reference to
Exhibit 10.1 to Form 8-K, filed by
Alon USA Energy, Inc. on August 13,
2010, 2010, SEC File No.
001-32567).10.37
    
    Credit Agreement, dated May 28,
2010, by and between Alon Refining
Krotz Springs, Inc. and Goldman
Sachs Bank USA, as Issuing Bank
(incorporated by reference to
Exhibit 10.5 to Form 10-Q, filed by
Alon USA Energy, Inc. on August 9,
2010, SEC File No. 333-124797).10.38
    
    Amended and Restated Supply and
Offtake Agreement, dated May 26,
2010 by and between Alon Refining
Krotz Springs, Inc. and J. Aron &
Company (incorporated by reference
to Exhibit 10.6 to Form 10-Q, filed
by Alon USA Energy, Inc. on August
9, 2010, SEC File No. 333-124797).12.1
    
    Statement Regarding Computation of Ratio of Earnings to Fixed Charges.




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##### Table of Contents



ExhibitNumber
    
    Description23.1
    
    Consent of KPMG LLP23.2
    
    Consent of KPMG LLP31.1
    
    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
    
    Certification 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.
 
 *
    
    Identifies management contracts and compensatory plans or arrangements.
    
    Portions of the exhibit have been omitted pursuant to a request for
confidential treatment. The confidential portions have been furnished to the
SEC.