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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, 2009
 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
 o þ
 o o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 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
    
    
    15ITEM 3. LEGAL PROCEEDINGS
    
    
    15ITEM 4. RESERVED
    
    
    15PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    15ITEM 6. SELECTED FINANCIAL DATA
    
    
    16ITEM 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-10.35EX-12.1EX-23.1EX-31.1EX-31.2EX-32.1




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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, 2009
    
    
    Year Ended December 31, 2008 (1)Bpd
    
    
    %
    
    
    Bpd
    
    
    %Refinery throughput:Light sweet crude
    
    
    22,942
    
    
    
    47.5
    
    
    
    43,361
    
    
    
    74.5Heavy sweet crude
    
    
    22,258
    
    
    
    46.0
    
    
    
    11,979
    
    
    
    20.6Blendstocks
    
    
    3,137
    
    
    
    6.5
    
    
    
    2,844
    
    
    
    4.9Total refinery throughput (2)
    
    
    48,337
    
    
    
    100.0
    
    
    
    58,184
    
    
    
    100.0Refinery production:Gasoline
    
    
    22,264
    
    
    
    45.4
    
    
    
    25,195
    
    
    
    42.8Diesel/jet
    
    
    21,318
    
    
    
    43.4
    
    
    
    26,982
    
    
    
    45.9Heavy oils
    
    
    1,238
    
    
    
    2.5
    
    
    
    1,402
    
    
    
    2.4Other
    
    
    4,258
    
    
    
    8.7
    
    
    
    5,258
    
    
    
    8.9Total refinery production (3)
    
    
    49,078
    
    
    
    100.0
    
    
    
    58,837
    
    
    
    100.0Refinery utilization (4)
    
    
    
    
    
    
    65.3
    %
    
    
    
    
    
    
    66.6
    %
 
 (1)
    
    2008 data includes our refinery for 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 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. Refinery
throughput and production for 2009 reflects the effects of our optimization of throughput to
respond to declining margins, to reduce borrowings under our Revolving Credit Facility prior
to amendments to our credit facilities in April 2009 and the effects of downtime associated
with a shutdown that was originally scheduled for the first quarter of 2010 that was
accelerated to November 2009. Refinery throughput and production for 2008 reflects the
effects of shutdowns during Hurricanes Gustav and Ike and limited crude oil supply due to
widespread electrical outages following the hurricanes. Gasoline
 Distillates
 3




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Heavy Oils and Other
 Raw Material Supply
    Sales
 Product Pipelines
 Barge and Truck Rack
 Railcar and Truck
  4




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Competition
    Government Regulation and Legislation
 Environmental Controls and Expenditures
   5




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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, 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.
   8




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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.
    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.
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If the price of crude oil increases significantly, it could limit our ability to purchase enough
crude oil to operate at full capacity.
  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 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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The adoption of climate change legislation by Congress or the regulation of greenhouse gas
emissions by the United States Environmental Protection Agency (EPA) could result in increased
operating costs, lower profitability and reduced demand for our refined products.
      11




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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.
  Our insurance policies do not cover all losses, costs or liabilities that we may experience. In
addition, we may not be able to obtain and maintain adequate insurance at costs acceptable to us
or at all as a result of recent hurricanes in the Gulf Coast region.
  12




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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 and our other indebtedness 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;
    
    our high level of 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 high level of indebtedness makes us more vulnerable to economic downturns and adverse
developments in our business.
 13




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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 Revolving Credit Facility and the Indenture governing our Senior Secured Notes impose
significant operating and financial restrictions, which may prevent us from pursuing certain
business opportunities and taking certain actions.
  
    
    incur additional indebtedness;
    
    repay indebtedness (including 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.
  14




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ITEM 1B. UNRESOLVED STAFF COMMENTS.
  
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. RESERVED.
  
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
  15




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ITEM 6. SELECTED FINANCIAL DATA.
    Successor
    
    
    Combined(1)
    
    
    PredecessorYear Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Unaudited)(dollars in thousands)Statement of Operations Data:Net sales
    
    $
    1,156,883
    
    
    $
    2,594,026
    
    
    $
    2,293,486
    
    
    $
    2,450,200
    
    
    $
    2,043,651Cost of sales
    
    
    1,031,368
    
    
    
    2,531,201
    
    
    
    2,143,920
    
    
    
    2,245,070
    
    
    
    1,793,499Direct operating expenses
    
    
    74,007
    
    
    
    89,096
    
    
    
    84,388
    
    
    
    72,754
    
    
    
    64,937Selling, general and administrative
expenses
    
    
    7,328
    
    
    
    2,812
    
    
    
    4,632
    
    
    
    4,921
    
    
    
    4,935Depreciation and amortization expenses
    
    
    20,485
    
    
    
    13,333
    
    
    
    9,677
    
    
    
    8,259
    
    
    
    6,879Operating income (loss)
    
    
    23,695
    
    
    
    (42,416
    )
    
    
    50,869
    
    
    
    119,196
    
    
    
    173,401Other income, net
    
    
    17
    
    
    
    258
    
    
    
    1
    
    
    
    34
    
    
    
    93Interest expense
    
    
    (69,090
    )
    
    
    (24,382
    )
    
    
    
    
    
    
    
    
    
    
    Income (loss) before income tax expense (benefit)
    
    
    (45,378
    )
    
    
    (66,540
    )
    
    
    50,870
    
    
    
    119,230
    
    
    
    173,494Income tax expense (benefit)
    
    
    
    
    
    
    (19,680
    )
    
    
    17,276
    
    
    
    43,510
    
    
    
    65,159Net income (loss)
    
    $
    (45,378
    )
    
    $
    (46,860
    )
    
    $
    33,594
    
    
    $
    75,720
    
    
    $
    108,335Statement of Cash Flow Data:Net cash provided by (used in) operating activities
    
    $
    153,237
    
    
    $
    (8,400
    )
    
    $
    26,678
    
    
    $
    77,724
    
    
    $
    130,406Net cash used in investing activities
    
    
    (45,382
    )
    
    
    (492,540
    )
    
    
    (9,992
    )
    
    
    (41,876
    )
    
    
    (33,560
    )Net cash provided by (used in) financing activities
    
    
    (81,694
    )
    
    
    500,927
    
    
    
    (16,684
    )
    
    
    (35,843
    )
    
    
    (96,851
    )Capital expenditures
    
    
    12,404
    
    
    
    9,948
    
    
    
    9,001
    
    
    
    38,106
    
    
    
    32,599Capital expenditures for turnaround and catalyst
    
    
    13,290
    
    
    
    1,858
    
    
    
    995
    
    
    
    3,773
    
    
    
    822
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Successor
    
    
    Combined(1)
    
    
    PredecessorYear Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Unaudited)(dollars in thousands)Balance Sheet Data (end of period):Cash and cash equivalents
    
    $
    26,161
    
    
    $
    
    
    
    $
    13
    
    
    $
    11
    
    
    $
    6Property, plant and equipment, net
    
    
    362,265
    
    
    
    335,555
    
    
    
    142,845
    
    
    
    141,622
    
    
    
    108,778Total assets
    
    
    482,837
    
    
    
    633,903
    
    
    
    229,152
    
    
    
    207,452
    
    
    
    173,566Total debt
    
    
    288,980
    
    
    
    449,105
    
    
    
    
    
    
    
    
    
    
    
    Stockholders equity
    
    
    62,003
    
    
    
    87,790
    
    
    
    186,520
    
    
    
    169,610
    
    
    
    129,733
 
 (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 2005, 2006, 2007 and 2009.
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: Predecessor
    
    
    Successor
    
    
    CombinedPeriod from January 1
    
    
    Period from July 1
    
    
    Year EndedThrough June 30,
    
    
    Through 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 (used in) financing activities
    
    
    28,271
    
    
    
    472,656
    
    
    
    500,927Capital expenditures
    
    
    6,495
    
    
    
    3,453
    
    
    
    9,948Capital expenditures for turnaround and catalyst
    
    
    1,858
    
    
    
    
    
    
    
    1,858
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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
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. We may face significant challenges if conditions in the
financial markets do not improve or continue to worsen, such as adversely impacting our
ability to refinance existing credit facilities or extend their terms; and
 18




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
    
    the other factors discussed in our Annual Report on Form 10-K for the year ended
December 31, 2009 under the caption Risk Factors.
  Format of Presentation
    
    
    The year ended December 31, 2009 compared to the year ended December 31, 2008. The year
ended December 31, 2009 represents the audited financial and other operating data of Alon
Refining Krotz Springs, Inc. The year ended December 31, 2008 is presented on an unaudited
combined basis for the predecessor and successor periods discussed above.
    
    The year ended December 31, 2008 compared to the year ended December 31, 2007. The year
ended December 31, 2008 is presented on an unaudited combined basis for the predecessor and
successor periods discussed above. The year ended December 31, 2007 represents the
historical basis of accounting for Valero Refining Company  Louisiana.
 Refinery Overview
    19




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




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




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Results of Operations
 Predecessor
    
    
    Successor
    
    
    Combined
    
    
    PredecessorSix Months
    
    
    Six Months
    
    
    Twelve MonthsYear Ended
    
    
    Ended
    
    
    Ended
    
    
    Ended
    
    
    Year EndedDecember 31, 2009
    
    
    June 30, 2008
    
    
    December 31, 2008
    
    
    December 31, 2008
    
    
    December 31, 2007(Unaudited)(Dollars in thousands, except per barrel data and pricing statistics)Statement of Operations Data:Net sales
    
    $
    1,156,883
    
    
    $
    1,539,629
    
    
    $
    1,054,397
    
    
    $
    2,594,026
    
    
    $
    2,293,486Cost of sales
    
    
    1,031,368
    
    
    
    1,543,665
    
    
    
    987,536
    
    
    
    2,531,201
    
    
    
    2,143,920Direct operating expenses
    
    
    74,007
    
    
    
    43,721
    
    
    
    45,375
    
    
    
    89,096
    
    
    
    84,388Selling, general and administrative expenses
    
    
    7,328
    
    
    
    1,909
    
    
    
    903
    
    
    
    2,812
    
    
    
    4,632Depreciation and amortization expenses
    
    
    20,485
    
    
    
    4,841
    
    
    
    8,492
    
    
    
    13,333
    
    
    
    9,677Operating income (loss)
    
    
    23,695
    
    
    
    (54,507
    )
    
    
    12,091
    
    
    
    (42,416
    )
    
    
    50,869Other income, net
    
    
    17
    
    
    
    2
    
    
    
    256
    
    
    
    258
    
    
    
    1Interest expense
    
    
    (69,090
    )
    
    
    
    
    
    
    (24,382
    )
    
    
    (24,382
    )
    
    
    Income (loss) before income tax expense
(benefit)
    
    
    (45,378
    )
    
    
    (54,505
    )
    
    
    (12,035
    )
    
    
    (66,540
    )
    
    
    50,870Income tax expense (benefit)
    
    
    
    
    
    
    (19,680
    )
    
    
    
    
    
    
    (19,680
    )
    
    
    17,276Net income (loss)
    
    $
    (45,378
    )
    
    $
    (34,825
    )
    
    $
    (12,035
    )
    
    $
    (46,860
    )
    
    $
    33,594Operating Data:Refinery Throughput (bpd):Light sweet crude
    
    
    22,942
    
    
    
    
    
    
    
    
    
    
    
    35,785
    
    
    
    39,678Heavy sweet crude
    
    
    22,258
    
    
    
    
    
    
    
    
    
    
    
    24,421
    
    
    
    30,484Blendstocks
    
    
    3,137
    
    
    
    
    
    
    
    
    
    
    
    2,323
    
    
    
    6,362Total refinery throughput (1)
    
    
    48,337
    
    
    
    
    
    
    
    
    
    
    
    62,529
    
    
    
    76,524Refinery Production (bpd):Gasoline
    
    
    22,264
    
    
    
    
    
    
    
    
    
    
    
    26,403
    
    
    
    33,702Diesel/Jet
    
    
    21,318
    
    
    
    
    
    
    
    
    
    
    
    29,624
    
    
    
    33,793Heavy oils
    
    
    1,238
    
    
    
    
    
    
    
    
    
    
    
    1,484
    
    
    
    3,418Others
    
    
    4,258
    
    
    
    
    
    
    
    
    
    
    
    5,892
    
    
    
    6,218Total refinery production (2)
    
    
    49,078
    
    
    
    
    
    
    
    
    
    
    
    63,403
    
    
    
    77,131Key Operating Statistics:Refinery utilization (3)
    
    
    65.3
    %
    
    
    
    
    
    
    
    
    
    
    72.5
    %
    
    
    84.4
    %Per barrel of throughput:Refinery operating margin (4)
    
    $
    5.66
    
    
    
    
    
    
    
    
    
    
    $
    3.21
    
    
    $
    5.35Refinery direct operating expense (5)
    
    
    4.22
    
    
    
    
    
    
    
    
    
    
    
    3.89
    
    
    
    3.02Capital expenditures
    
    
    12,404
    
    
    
    
    
    
    
    
    
    
    
    9,948
    
    
    
    9,001Capital expenditures for turnaround and
catalyst
    
    
    13,290
    
    
    
    
    
    
    
    
    
    
    
    1,858
    
    
    
    995Pricing Statistics:WTI crude oil (per barrel)
    
    $
    61.82
    
    
    
    
    
    
    
    
    
    
    $
    99.56
    
    
    $
    72.322/1/1 Gulf Coast high sulfur diesel crack
spread (per barrel)
    
    
    6.50
    
    
    
    
    
    
    
    
    
    
    
    11.28
    
    
    
    12.80Gulf Coast unleaded gasoline (cpg)
    
    
    163.5
    
    
    
    
    
    
    
    
    
    
    
    247.1
    
    
    
    204.5Gulf Coast high sulfur diesel (cpg)
    
    
    161.9
    
    
    
    
    
    
    
    
    
    
    
    280.8
    
    
    
    200.8Natural gas (per mmbtu)
    
    $
    4.16
    
    
    
    
    
    
    
    
    
    
    $
    8.90
    
    
    $
    7.12
 
 (1)
    
    Total refinery throughput represents the total barrels per day of crude oil and blendstock
inputs in the refinery production process.(2)
    
    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.(3)
    
    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 2009 22




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reflects the effects of our optimization of throughput
to respond to declining margins, to reduce borrowings under
our Revolving Credit Facility prior to amendments to our credit facilities in April 2009 and the
effects of downtime associated with a shutdown that was originally scheduled for the first quarter
of 2010 that was accelerated to November 2009. Refinery throughput and production for 2008
reflects the effects of shutdowns during Hurricanes Gustav and Ike and limited crude oil supply due
to widespread electrical outages following the hurricanes.(4)
    
    Refinery operating margin is a per barrel measurement calculated by dividing the margin
between net sales and cost of sales (exclusive of unrealized hedging gains and losses 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 $116.7 million for our refinery for the year ended December 31, 2008. Also,
refinery operating margins for our refinery excludes a charge of $127.4 million for the year
ended December 31, 2008 to cost of sales for inventory adjustments related to the acquisition
of our refinery. There were unrealized hedging gains of $25.6 million for our refinery for the
year ended December 31, 2009. Additionally, realized gains related to the termination of the
2008 Hedging Agreement of $139.3 million were excluded from our refinery operating margin for
the year ended December 31, 2009.(5)
    
    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. 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.
 23




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##### Table of Contents



Depreciation and Amortization Expenses.
 Operating income (loss).
 Interest expense.
 Income
tax benefit.
 Net loss.
 Year ended December 31, 2008 compared to year ended December 31, 2007
 Net Sales.
 Cost of Sales.
 Direct Operating Expenses.
 Selling, General and Administrative Expenses.
 Depreciation and Amortization Expenses.
 Operating income (loss).
 24




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##### Table of Contents



Interest expense.
 Income
tax expense (benefit).
 Net income (loss).
 Liquidity and Capital Resources
     Cash Flows
  Successor
    
    
    Combined
    
    
    PredecessorYear Ended December 31,2009
    
    
    2008
    
    
    2007(Unaudited)Net cash provided by (used in):Operating activities
    
    $
    153,237
    
    
    $
    (8,400
    )
    
    $
    26,678Investing activities
    
    
    (45,382
    )
    
    
    (492,540
    )
    
    
    (9,992
    )Financing activities
    
    
    (81,694
    )
    
    
    500,927
    
    
    
    (16,684
    )Net increase (decrease) in cash and cash equivalents
    
    $
    26,161
    
    
    $
    (13
    )
    
    $
    2
 25




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##### Table of Contents



Cash Flows Provided By (Used In) Operating Activities
   Cash Flows Used In Investing Activities
  Cash Flows Provided By (Used In) Financing Activities
  Summary of Indebtedness
 Term Loan Credit Facility
    Senior Secured Notes.
 26




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Revolving Credit Facility.
      27




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##### Table of Contents



Capital Spending
  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
    
    $
    288,980
    
    
    $
    
    
    
    $
    
    
    
    $
    288,980
    
    
    $
    Operating lease obligations
    
    
    4,374
    
    
    
    637
    
    
    
    875
    
    
    
    720
    
    
    
    2,142Earnout agreement with Valero
    
    
    15,312
    
    
    
    8,750
    
    
    
    6,562
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    308,666
    
    
    $
    9,387
    
    
    $
    7,437
    
    
    $
    289,700
    
    
    $
    2,142
 Off-Balance Sheet Arrangements
  Earnout Agreement with Valero
  28




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##### Table of Contents



Critical Accounting Policies
  Inventories.
 Hedging Activity.
   Impairment and Disposal of Long-Lived Assets.
 Asset Retirement Obligations. Accounting for Asset Retirement Obligations (superseded by Accounting
Standards Codification (ASC) topic 410-20) Accounting for Conditional Asset Retirement Obligations
 Turnarounds and Fixed-Bed Catalyst Costs.
 29




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##### Table of Contents



Income Taxes.
  Accounting for Uncertainty in Income Taxes an
interpretation of FAS 109
 Environmental Expenditures.
  New Accounting Standards
 Fair Value Measurements
 Partial Deferral of the
Effective Date of Statement 157
 Disclosures about Derivative Instruments and
Hedging Activities
 30




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##### Table of Contents



Subsequent Events
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162
 
 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)
    
    
    Contract
    
    
    Sales Price
    
    
    Value
    
    
    Fair Value
    
    
    Gain (Loss)Futures-crack spread (Heating Oil)
    
    
    364,800
    
    
    $
    11.38
    
    
    $
    11.62
    
    
    $
    4,150
    
    
    $
    4,239
    
    
    $
    89Futures-long (SPR swaps)
    
    
    278,322
    
    
    
    95.92
    
    
    
    81.59
    
    
    
    26,696
    
    
    
    22,708
    
    
    
    (3,988
    )Futures-short (SPR swaps)
    
    
    (278,322
    )
    
    
    60.05
    
    
    
    81.59
    
    
    
    (16,713
    )
    
    
    (22,708
    )
    
    
    (5,995
    )
 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
  Managements Report on Internal Control over Financial Reporting
  32




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##### Table of Contents



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
    
    
    55
    
    
    Executive Chairman of the Board of DirectorsJeff D. Morris
    
    
    58
    
    
    Director and Chief Executive OfficerPaul Eisman
    
    
    54
    
    
    PresidentShai Even
    
    
    41
    
    
    Director, Senior Vice President and Chief
Financial OfficerJoseph Israel
    
    
    38
    
    
    Director, Chief Operating OfficerClaire A. Hart
    
    
    54
    
    
    Senior Vice PresidentJoseph A. Concienne, III
    
    
    59
    
    
    Director, Vice PresidentAlan Moret
    
    
    55
    
    
    Vice President of SupplyHarlin R. Dean
    
    
    43
    
    
    Vice President and SecretaryMichael Oster
    
    
    38
    
    
    Vice President of Mergers and AcquisitionsWilliam Wuensche
    
    
    49
    
    
    Vice President of Refining
 David Wiessman
 Jeff D. Morris
 Paul Eisman
 34




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##### Table of Contents



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




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##### Table of Contents



Corporate Governance
  
 ITEM 11. EXECUTIVE COMPENSATION.
  Name
    
    TitleJeff D. Morris
    
    Chief Executive OfficerShai Even
    
    Senior Vice President and Chief Financial OfficerHarlin R. Dean
    
    Vice President and SecretaryJoseph Israel
    
    Chief Operating OfficerMichael Oster
    
    Vice President of Mergers and Acquisitions
    Employment Agreements and Change of Control Arrangements
 Jeff D. Morris.
 36




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##### Table of Contents



Shai Even.
 Harlin R. Dean.
 Joseph Israel
 Michael Oster.
 37




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##### 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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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




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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 Refining 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).10.11
    
    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
 41




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##### Table of Contents



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 Refining 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*
    
    Amended and Restated Management Employment Agreement, dated as
of August 9, 2006, between Harlin R. Dean and Alon USA GP, LLC
(incorporated by reference to Exhibit 10.1 to Form 8-K, filed
by Alon USA Energy, Inc. on August 10, 2006, SEC File No.
001-32567).10.17*
    
    Amendment to Amended and Restated Management Employment
Agreement, dated as of November 4, 2008, between Harlin R.
Dean and Alon USA GP, LLC (incorporated by reference to
Exhibit 10.12 to Form 10-Q, filed by Alon USA Energy, Inc. on
November 7, 2008, SEC File No. 001-32567)10.18*
    
    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).10.19*
    
    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).10.20*
    
    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).10.21*
    
    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).10.22*
    
    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).10.23*
    
    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).10.24*
    
    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).10.25*
    
    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).10.26*
    
    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).
 42




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##### Table of Contents



10.27*
    
    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).10.28*
    
    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).10.29*
    
    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).10.30*
    
    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).10.31*
    
    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).10.32*
    
    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).10.33*
    
    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).10.34*
    
    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).10.35
    
    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.12.1
    
    Statement Regarding Computation of
Ratio of Earnings to Fixed Charges23.1
    
    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. 43




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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, 2009 and 2008
    
    
    F-3Statements of Operations for the year ended December 31, 2009 and the
period from July 1, 2008 (inception) through December 31, 2008
    
    
    F-4Statements of Stockholders Equity for year ended December 31, 2009
and the period from July 1, 2008 (inception) through December 31,
2008
    
    
    F-5Statements of Cash Flows for the year ended December 31, 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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Report of Independent Registered Public Accounting Firm
      
 F-2




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##### Table of Contents



ALON
REFINING KROTZ SPRINGS, INC.
 
 BALANCE SHEETS
(in thousands, except share data)
 As of December 31,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    26,161
    
    
    $
    Accounts receivable
    
    
    8,344
    
    
    
    44,509Current portion of heating oil crack spread hedge
    
    
    
    
    
    
    75,405Inventories
    
    
    54,623
    
    
    
    40,318Prepaid expenses
    
    
    615
    
    
    
    20,980Total current assets
    
    
    89,743
    
    
    
    181,212Property, plant and equipment, net
    
    
    362,265
    
    
    
    335,555Deposit for hedge related activities for Krotz Springs refinery acquisition
    
    
    
    
    
    
    50,000Non-current portion of heating oil crack spread hedge
    
    
    
    
    
    
    41,296Other assets
    
    
    30,829
    
    
    
    25,840Total assets
    
    $
    482,837
    
    
    $
    633,903LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    92,682
    
    
    $
    59,656Accrued liabilities
    
    
    31,299
    
    
    
    36,085Current portion of long-term debt
    
    
    
    
    
    
    18,400Total current liabilities
    
    
    123,981
    
    
    
    114,141Other non-current liabilities
    
    
    7,873
    
    
    
    1,267Long-term debt
    
    
    288,980
    
    
    
    430,705Total liabilities
    
    
    420,834
    
    
    
    546,113Stockholders equity:Class A Common stock, par value $0.01, 75,000 shares authorized; 36,219
and 29,325 shares issued and outstanding at December 31, 2009 and 2008,
respectively
    
    
    
    
    
    
    Class B Common stock, par value $0.01, 1,000 shares authorized; 405
shares issued and outstanding at December 31, 2009 and 2008,
respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    126,656
    
    
    
    101,656Accumulated other comprehensive loss, net of income tax
    
    
    (7,240
    )
    
    
    (1,831
    )Retained deficit
    
    
    (57,413
    )
    
    
    (12,035
    )Total stockholders equity
    
    
    62,003
    
    
    
    87,790Total liabilities and stockholders equity
    
    $
    482,837
    
    
    $
    633,903
  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
    
    
    (inception)Ended
    
    
    throughDecember 31,
    
    
    December 31,2009
    
    
    2008Net sales
    
    $
    1,156,883
    
    
    $
    1,054,397Operating costs and expenses:Cost of sales
    
    
    1,031,368
    
    
    
    987,536Direct operating expenses
    
    
    74,007
    
    
    
    45,375Selling, general and administrative expenses
    
    
    7,328
    
    
    
    903Depreciation and amortization expense
    
    
    20,485
    
    
    
    8,492Total operating costs and expenses
    
    
    1,133,188
    
    
    
    1,042,306Operating income
    
    
    23,695
    
    
    
    12,091Interest expense
    
    
    (69,090
    )
    
    
    (24,382
    )Other income, net
    
    
    17
    
    
    
    256Loss before income tax benefit
    
    
    (45,378
    )
    
    
    (12,035
    )Income tax benefit
    
    
    
    
    
    
    Net loss
    
    $
    (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, 2009  (dollars in thousands)
 Additional
    
    
    Accumulated 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
    )
    
    $
    62,003
  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
    
    
    (inception)Ended
    
    
    throughDecember 31,
    
    
    December 31,2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (45,378
    )
    
    $
    (12,035
    )Adjustments to reconcile net loss to net cash provided by operating
activities:Depreciation and amortization expense
    
    
    20,485
    
    
    
    8,492Unrealized gain on heating oil crack spread hedge
    
    
    
    
    
    
    (116,701
    )Amortization of debt issuance costs
    
    
    4,770
    
    
    
    2,265Amortization of original issuance discount
    
    
    328
    
    
    
    Write-off of unamortized debt issuance costs
    
    
    20,482
    
    
    
    Changes in operating assets and liabilities, net of acquisition effects:Accounts receivable
    
    
    36,165
    
    
    
    (43,709
    )Heating oil crack spread hedge
    
    
    116,701
    
    
    
    Inventories
    
    
    (14,305
    )
    
    
    104,686Prepaid expenses
    
    
    20,365
    
    
    
    (20,925
    )Other assets
    
    
    (52
    )
    
    
    Accounts payable
    
    
    12,723
    
    
    
    56,071Accrued liabilities
    
    
    (19,091
    )
    
    
    34,630Other long-term liabilities
    
    
    44
    
    
    
    (966
    )Net cash provided by operating activities
    
    
    153,237
    
    
    
    11,808Cash flows from investing activities:Capital expenditures
    
    
    (12,404
    )
    
    
    (3,453
    )Capital expenditures for turnarounds and catalysts
    
    
    (13,290
    )
    
    
    Acquisition of refinery
    
    
    
    
    
    
    (481,011
    )Earnout payments related to refinery acquisition
    
    
    (19,688
    )
    
    
    Net cash used in investing activities
    
    
    (45,382
    )
    
    
    (484,464
    )Cash flows from financing activities:Deferred debt issuance costs
    
    
    (16,478
    )
    
    
    (28,105
    )Proceeds from senior secured notes
    
    
    205,365
    
    
    
    Cash received from inventory supply agreement
    
    
    20,237
    
    
    
    Additions to long-term debt
    
    
    
    
    
    
    252,000Payments on long-term debt
    
    
    (252,000
    )
    
    
    Revolving credit facility, net
    
    
    (63,818
    )
    
    
    147,105Proceeds from parent
    
    
    25,000
    
    
    
    101,656Net cash provided by (used in) financing activities
    
    
    (81,694
    )
    
    
    472,656Net increase in cash and cash equivalents
    
    
    26,161
    
    
    
    Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    Cash and cash equivalents at end of period
    
    $
    26,161
    
    
    $
    Supplemental cash flow information:Cash paid for interest
    
    $
    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
  (d) Cost Classifications
    (e) Cash and Cash Equivalents
  (f) Accounts Receivable
  F-7




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  (g) Inventories
  (h) Hedging Activity
    (i) Property, Plant and Equipment
    (j) Impairment and Disposal of Long-Lived Assets
  (k) Asset Retirement Obligations
 Accounting for
Asset Retirement Obligations
 F-8




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 Accounting for Conditional Asset
Retirement Obligations
 (l) Turnarounds and Chemical Catalyst Costs
  (m) Income Taxes
   (n) Environmental Expenditures
   (o) Other Comprehensive Income (Loss)
  (p) Commitments and Contingencies
  F-9




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  (q) Intangible Assets
  (r) New Accounting Pronouncements
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162
 Subsequent Events
 Accounting by Lessees for Maintenance Deposits
 Disclosures about Derivative Instruments and
Hedging Activities
 Fair Value
Measurements
 Partial Deferral of the
Effective Date of Statement 157
 F-10




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 3. 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
   4. FAIR VALUE AND DERIVATIVE INSTRUMENTS
 (a) Fair Value of Financial Instruments
  F-11




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
    Quoted Prices inActive Markets
    
    
    Significantfor Identical
    
    
    Other
    
    
    SignificantAssets or
    
    
    Observable
    
    
    UnobservableLiabilities
    
    
    Inputs
    
    
    InputsYear ended December 31, 2009
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalAssets:Commodity contracts (heating oil swaps)
    
    $
    
    
    
    $
    89
    
    
    $
    
    
    
    $
    89Liabilities:Commodity contracts (crude swaps)
    
    
    
    
    
    
    9,983
    
    
    
    
    
    
    
    9,983Year ended December 31, 2008Assets:Commodity contracts (heating oil swaps)
    
    $
    
    
    
    $
    116,701
    
    
    $
    
    
    
    $
    116,701Liabilities:Commodity contracts (futures and forwards)
    
    
    565
    
    
    
    
    
    
    
    
    
    
    
    565Commodity contracts (crude swaps)
    
    
    
    
    
    
    25,473
    
    
    
    
    
    
    
    25,473
 (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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ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  December 31,Counterparty Credit Quality (1)
    
    2009AAA
    
    $
    AA
    
    
    (10,072
    )A
    
    
    Lower than A
    
    
    Total
    
    $
    (10,072
    )
 
 (1)
    
    As determined by nationally recognized statistical ratings organizations.  As of December 31, 2009Asset Derivatives
    
    
    Liability DerivativesBalance Sheet
    
    
    
    
    
    
    Balance SheetLocation
    
    
    Fair Value
    
    
    Location
    
    
    Fair ValueDerivatives not designated as hedging
instruments under FAS 133:Commodity contracts (futures, forwards and swaps)
    
    Accounts receivable
    
    $
    89
    
    
    Accrued liabilities
    
    $
    9,983Total derivatives not designated as hedging
instruments under FAS 133
    
    
    
    
    
    $
    89
    
    
    
    
    
    
    $
    9,983
  Gain (Loss) Reclassifiedfrom Accumulated OCI intoIncome (IneffectiveCash Flow Hedging
    
    
    
    
    
    Gain (Loss) Reclassified
    
    
    Portion and AmountRelationships
    
    
    
    
    
    from Accumulated OCI into
    
    
    Excluded fromFor the Year Ended
    
    Gain (Loss)
    
    
    Income (Effective Portion)}
    
    
    Effectiveness Testing)December 31, 2009
    
    Recognized in OCI
    
    
    Location
    
    
    Amount
    
    
    Location
    
    
    AmountCommodity
contracts
(heating oil
swaps)
    
    $
    
    
    
    Cost of sales
    
    $
    5,409
    
    
    
    
    
    
    $
    Total derivatives
    
    $
    
    
    
    
    
    
    
    $
    5,409
    
    
    
    
    
    
    $
    
 Derivatives not designated as hedging instruments under FAS 133:
    
    Gain (Loss) Recognized in IncomeFor the Year Ended December 31, 2009
    
    Location
    
    
    AmountCommodity 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
 5. ACCOUNTS RECEIVABLE
  6. INVENTORIES
    7. PROPERTY, PLANT AND EQUIPMENT
  December 31,2009
    
    
    2008Refining facilities
    
    $
    389,441
    
    
    $
    344,047Less accumulated depreciation
    
    
    (27,176
    )
    
    
    (8,492
    )Property, plant and equipment, net
    
    $
    362,265
    
    
    $
    335,555
  8. OTHER ASSETS
  December 31,2009
    
    
    2008Deferred turnaround and chemical catalyst cost, net
    
    $
    11,540
    
    
    $
    Deferred debt issuance costs
    
    
    17,118
    
    
    
    25,840Intangible assets
    
    
    2,171
    
    
    
    Total other assets
    
    $
    30,829
    
    
    $
    25,840
 F-15




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 9. ACCRUED LIABILITIES
  December 31,2009
    
    
    2008Commodity swaps
    
    $
    9,983
    
    
    $
    26,670Valero earnout liability
    
    
    8,750
    
    
    
    Accrued interest
    
    
    8,137
    
    
    
    6,398Other
    
    
    4,429
    
    
    
    3,017Total accrued liabilities
    
    $
    31,299
    
    
    $
    36,085
 10. OTHER NON-CURRENT LIABILITIES
  December 31,2009
    
    
    2008Environmental accrual
    
    $
    412
    
    
    $
    427Asset retirement obligations
    
    
    899
    
    
    
    840Valero earnout liability
    
    
    6,562
    
    
    
    Total other non-current liabilities
    
    $
    7,873
    
    
    $
    1,267
   11. INCOME TAXES
   December 31,2009
    
    
    2008Computed tax benefit
    
    $
    (15,882
    )
    
    $
    (4,212
    )State and local income taxes, net of federal benefit
    
    
    (1,299
    )
    
    
    (315
    )Other, net
    
    
    (352
    )
    
    
    7Change in valuation allowance
    
    
    17,533
    
    
    
    4,520Income tax benefit
    
    $
    
    
    
    $
    
 F-16




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  December 31,2009
    
    
    2008Deferred income tax assets:Accrued liabilities and other
    
    $
    894
    
    
    $
    Non-current accrued liabilities and other
    
    
    3,565
    
    
    
    173Net operating loss carryover
    
    
    58,200
    
    
    
    58,070Other
    
    
    
    
    
    
    494Less valuation allowance
    
    
    (24,101
    )
    
    
    (4,520
    )Net deferred income tax assets
    
    
    38,558
    
    
    
    54,217Deferred income tax liabilities:Unrealized Gains
    
    
    (2,936
    )
    
    
    (15,787
    )Property, plant, and equipment
    
    
    (30,369
    )
    
    
    (6,033
    )Other non-current
    
    
    (4,373
    )
    
    
    (32,374
    )Intangibles
    
    
    (880
    )
    
    
    Other
    
    
    
    
    
    
    (23
    )Deferred income tax liabilities
    
    
    (38,558
    )
    
    
    (54,217
    )Net deferred income tax after valuation allowance
    
    $
    
    
    
    $
    
    12. RELATED-PARTY TRANSACTIONS
    F-17




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
    13. LONG-TERM DEBT
  December 31,2009
    
    
    2008Term loan credit facility
    
    $
    
    
    
    $
    302,000Revolving credit facility
    
    
    83,287
    
    
    
    147,105Senior secured notes, net of discount
    
    
    205,693
    
    
    
    Total debt
    
    
    288,980
    
    
    
    449,105Less current portion
    
    
    
    
    
    
    (18,400
    )Total long-term debt
    
    $
    288,980
    
    
    $
    430,705
 (a) Alon Refining Krotz Springs, Inc. Credit Facilities
 Term Loan Credit Facility
    Senior Secured Notes.
  F-18




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
       Revolving Credit Facility.
        F-19




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
 (b) Maturity of Long-Term Debt
  (c) Interest and Financing Expense
  December 31,2009
    
    
    2008Interest expense
    
    $
    38,412
    
    
    $
    19,861Letters of credit and finance charges
    
    
    5,426
    
    
    
    2,256Amortization of debt issuance costs
(includes write-off of unamortized debt
issuance costs in 2009 of $20,482)
    
    
    25,252
    
    
    
    2,265Total interest expense
    
    $
    69,090
    
    
    $
    24,382
 14. EMPLOYEE BENEFIT PLANS
    15. COMMITMENTS AND CONTINGENCIES
 (a) Leases
  Year ending December 31:2010
    
    $
    6372011
    
    
    4852012
    
    
    3902013
    
    
    3602014
    
    
    3602015 and thereafter
    
    
    2,142Total
    
    $
    4,374
  (b) Other Commitments
  F-20




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##### Table of Contents



ALON REFINING KROTZ SPRINGS, INC.
NOTES TO FINANCIAL STATEMENTS
  (c) Environmental
    (d) Litigation Matters
  16. SUBSEQUENT EVENT
  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 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 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 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 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 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 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 Months EndedJune 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 FINANCIAL STATEMENTS  (Continued)
   Six Months EndedJune 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 Months EndedJune 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 Months EndedJune 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 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 Months EndedJune 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 FINANCIAL STATEMENTS  (Continued)
 10. EMPLOYEE BENEFIT PLANS
   Six Months Ended
    
    
    Year Ended December 31,June 30,2008
    
    
    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 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 16, 2010
    By:
    /s/ Jeff D. MorrisJeff D. MorrisChief Executive Officer  March 16, 2010
    By:
    /s/ David WiessmanDavid WiessmanExecutive ChairmanMarch 16, 2010
    By:
    /s/ Jeff D. MorrisJeff D. MorrisChief Executive Officer and Director
(Principal Executive Officer)March 16, 2010
    By:
    /s/ Shai EvenShai EvenSenior Vice President, Chief Financial Officer and
Director
(Principal Financial and Accounting Officer)March 16, 2010
    By:
    /s/ Joseph A. Concienne IIIJoseph A. Concienne IIIVice President and DirectorMarch 16, 2010
    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 Refining 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).10.11
    
    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




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##### Table of Contents



ExhibitNumber
    
    DescriptionRefining 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 Refining 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*
    
    Amended and Restated Management Employment Agreement, dated as
of August 9, 2006, between Harlin R. Dean and Alon USA GP, LLC
(incorporated by reference to Exhibit 10.1 to Form 8-K, filed
by Alon USA Energy, Inc. on August 10, 2006, SEC File
No. 001-32567).10.17*
    
    Amendment to Amended and Restated Management Employment
Agreement, dated as of November 4, 2008, between Harlin R.
Dean and Alon USA GP, LLC (incorporated by reference to
Exhibit 10.12 to Form 10-Q, filed by Alon USA Energy, Inc. on
November 7, 2008, SEC File No. 001-32567)10.18*
    
    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).10.19*
    
    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).10.20*
    
    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).10.21*
    
    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).10.22*
    
    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).10.23*
    
    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).10.24*
    
    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).10.25*
    
    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).10.26*
    
    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).




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##### Table of Contents



ExhibitNumber
    
    Description10.27*
    
    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).10.28*
    
    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).10.29*
    
    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).10.30*
    
    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).10.31*
    
    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).10.32*
    
    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).10.33*
    
    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).10.34*
    
    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. 001-32567.10.35
    
    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.12.1
    
    Statement Regarding Computation of
Ratio of Earnings to Fixed Charges23.1
    
    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.