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Alon USA Reports Fourth Quarter And Full Year 2009 Results

YEAR-TO-DATE 2009

Special items for the year ended December 31, 2009 include after-tax losses of ($11.6) million for the write-off of unamortized debt issuance costs related to the full prepayment of the Alon Refining Krotz Springs, Inc. term loan, and ($0.9) million recognized on disposition of assets.  Also, special items include dividends of ($12.0) million associated with the conversion by Alon Israel of its preferred shares in Alon Refining Louisiana to Alon common stock and accrued dividends of ($8.0) million on the preferred shares in Alon Refining Louisiana prior to conversion.  Special items for the year ended December 31, 2008 include after-tax losses of ($70.7) million associated with inventories acquired in the July 2008 Krotz Springs refinery acquisition; ($31.6) million associated with the Big Spring refinery fire and after-tax gains of $155.3 million associated with the involuntary conversion of assets due to the Big Spring refinery fire; and $27.4 million recognized primarily from the disposition of assets in connection with the contribution of certain product pipelines and terminals to Holly Energy Partners, LP, in March 2005.  Also, special items include accrued dividends of ($4.0) million on the preferred shares in Alon Refining Louisiana.  

Refinery operating margin at the Big Spring refinery was $4.35 per barrel for the year ended December 31, 2009, compared to ($3.18) per barrel for the same period in 2008. This increase was primarily due to the depressed margins experienced in conjunction with the fire at the Big Spring refinery in 2008.  The Big Spring refinery light product yields were approximately 82% for the year ended December 31, 2009, compared to 70% for the same period in 2008.  Refinery operating margin at the California refineries was $1.80 per barrel for the year ended December 31, 2009, compared to $1.65 per barrel for the same period in 2008.  The Krotz Springs refinery operating margin for the year ended December 31, 2009, was $5.66 per barrel compared to $7.25 per barrel for the period from its acquisition effective July 1, 2008 through December 31, 2008.  The lower Krotz Springs refinery operating margin is due primarily to lower Gulf Coast 2/1/1 high sulfur diesel margins in 2009.

The Big Spring refinery and California refineries combined throughput for the year ended December 31, 2009 averaged 91,028 bpd, consisting of 59,870 bpd at the Big Spring refinery and 31,158 bpd at the California refineries compared to a combined average of 68,892 bpd for the same period last year, consisting of 37,793 bpd at the Big Spring refinery and 31,099 bpd at the California refineries.  The Big Spring refinery had higher throughput for the year ended December 31, 2009, compared to the same period last year primarily due to the 2008 fire at the Big Spring refinery.  The Krotz Springs refinery throughput for the year ended December 31, 2009, averaged 48,337 bpd and for the period from its acquisition effective July 1, 2008 through December 31, 2008, averaged 58,184 bpd.  The lower throughput in 2009 is due to a turnaround that began in November 2009.

Gulf Coast 3/2/1 average crack spreads were $7.24 per barrel for the year ended December 31, 2009, compared to $10.47 per barrel for the same period in 2008.  Gulf Coast 2/1/1 high sulfur diesel average crack spreads for the year ended December 31, 2009, was $6.50 per barrel compared to $11.28 per barrel for the same period in 2008.  West Coast 3/2/1 average crack spreads for the year ended December 31, 2009, was $13.92 per barrel compared to $15.80 per barrel for the same period in 2008.

The average sweet/sour spread for the year ended December 31, 2009, was $1.52 per barrel compared to $3.78 per barrel for the same period in 2008. The average light/heavy spread for the year ended December 31, 2009, was $5.46 per barrel compared to $15.63 per barrel for the same period in 2008.

Asphalt margins decreased to an average of $46.07 per ton for the year ended December 31, 2009, compared to $113.43 per ton for the same period in 2008. On a cash basis asphalt margins for the year ended December 31, 2009, were $67.34 per ton compared to $80.22 per ton for the same period in 2008.  Adjusted EBITDA, including earnings in asphalt partnerships of $22.2 million, for the year ended December 31, 2009, was $53.7 million after excluding negative inventory effects of $25.3 million compared to adjusted EBITDA, including earnings in asphalt partnerships of ($2.8) million, for the same period in 2008 of $53.7 million after excluding positive inventory effects of $43.1 million.  The average blended asphalt sales price decreased 19.9% from $511.95 per ton for the year ended December 31, 2008, to $409.88 per ton for the year ended December 31, 2009, and the average non-blended asphalt sales price decreased 46.1% from $315.48 per ton for the year ended December 31, 2008 to $170.05 per ton for the year ended December 31, 2009. The blended asphalt sales accounted for 92% of total asphalt sales for the year ended December 31, 2009.  The decrease in the blended asphalt sales price of 19.9% was less than the 37.9% decrease in WTI prices for the year ended December 31, 2009.

In our retail and branded marketing segment, retail fuel sales gallons increased by 24.4% from 97.0 million gallons for the year ended December 31, 2008, to 120.7 million gallons for the year ended December 31, 2009.  Our integrated branded fuel sales increased by 15.6% from 225.5 million gallons for the year ended December 31, 2008, to 260.6 million gallons for the year ended December 31, 2009.  

Alon also announced today that its Board of Directors has approved the regular quarterly cash dividend of $0.04 per share.  The dividend is payable on March 31, 2010 to stockholders of record at the close of business on March 15, 2010.  

CONFERENCE CALL

The Company has scheduled a conference call for Wednesday, March 3, 2010, at 10:00 a.m. Eastern, to discuss the fourth quarter 2009 results. To access the call, please dial 1-877-941-2332, or 480-629-9722, for international callers, and ask for the Alon USA Energy call at least 10 minutes prior to the start time. Investors may also listen to the conference live on the Alon corporate website, http://www.alonusa.com, by logging onto that site and clicking “Investors”. A telephonic replay of the conference call will be available through March 17, 2010, and may be accessed by calling 1-800-406-7325, or 303-590-3030, for international callers, and using the passcode 4199446#.  A web cast archive will also be available at http://www.alonusa.com shortly after the call and will be accessible for approximately 90 days. For more information, please contact Donna Washburn at DRG&E at 713-529-6600 or email dmw@drg-e.com.

Alon USA Energy, Inc., headquartered in Dallas, Texas, is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. The Company owns four crude oil refineries in Texas, California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 250,000 barrels per day. Alon is a leading producer of asphalt, which it markets through its asphalt terminals predominately in the Western United States. Alon is the largest 7-Eleven licensee in the United States and operates more than 300 convenience stores in Texas and New Mexico.  Alon markets motor fuel products under the FINA brand at these locations and at approximately 640 distributor-serviced locations.

Any statements in this press release that are not statements of historical fact are forward-looking statements. Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our financial condition, results of operations and cash flows. Additional information regarding these and other risks is contained in our filings with the Securities and Exchange Commission.

    
    
    Contacts:   Claire A. Hart, Senior Vice President
                Alon USA Energy, Inc.
                972-367-3649
    
                Investors:  Jack Lascar/Sheila Stuewe
                DRG&E / 713-529-6600
                Media:  Blake Lewis
                Lewis Public Relations
                214-635-3020
                Ruth Sheetrit
                SMG Public Relations
                011-972-547-555551
    
                            -Tables to follow-
    
    
    
            ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
                              EARNINGS RELEASE
    
    RESULTS OF OPERATIONS –
     FINANCIAL DATA (ALL
     INFORMATION IN THIS PRESS
     RELEASE, EXCEPT FOR BALANCE
     SHEET DATA AS OF DECEMBER
     31, 2008 AND INCOME
     STATEMENT DATA FOR THE YEAR
     ENDED DECEMBER 31, 2008 IS       
     UNAUDITED)              For the Three Months Ended  For the Year Ended
                             --------------------------  ------------------
                                    December 31,            December 31,
                                    ------------            ------------
                                   2009        2008       2009        2008
                                   ----        ----       ----        ----
                              (dollars in thousands, except per share data)
    STATEMENT OF OPERATIONS
     DATA:
    Net sales (1)               $834,041    $986,166   $3,915,732  $5,156,706
    Operating costs and
     expenses:
      Cost of sales              809,439     819,407    3,502,782   4,853,195
      Direct operating expenses   61,202      66,915      265,502     216,498
      Selling, general and
       administrative
       expenses (2)               33,674      33,499      129,446     119,852
      Net costs associated with
       fire (3)                        -      13,642            -      56,854
      Business interruption
       recovery (4)                    -     (25,000)           -     (55,000)
      Depreciation and
       amortization (5)           26,349      22,270       97,247      66,754
                                  ------      ------       ------      ------
        Total operating
         costs and
         expenses                930,664     930,733    3,994,977   5,258,153
                                 -------     -------    ---------   ---------
    Gain on involuntary
     conversion of assets (6)          -      80,000            -     279,680
    Gain (loss) on disposition
     of assets (7)                   556       2,239       (1,591)     45,244
                                     ---       -----       ------      ------
    Operating income (loss)      (96,067)    137,672      (80,836)    223,477
    Interest expense (8)         (40,398)    (24,665)    (111,137)    (67,550)
    Equity earnings (losses) of
     investees                     3,374         785       24,558      (1,522)
    Other income, net                 63         407          331       1,500
                                     ---         ---          ---       -----
    Income (loss) before income
     tax expense (benefit), non-
     controlling interest in
     income (loss) of
     subsidiaries and
     accumulated dividends on
     preferred stock of
     subsidiary                 (133,028)    114,199     (167,084)    155,905
    Income tax expense
     (benefit)                   (51,871)     46,931      (64,877)     62,781
                                 -------      ------      -------      ------
    Income (loss) before non-
     controlling interest in
     income (loss) of
     subsidiaries and
     accumulated dividends on
     preferred stock of
     subsidiary                  (81,157)     67,268     (102,207)     93,124
    Non-controlling interest in
     income (loss) of
     subsidiaries                 (5,598)      4,181       (8,551)      5,941
    Accumulated dividends on
     preferred stock of
     subsidiary (9)               15,050       2,150       21,500       4,300
                                  ------       -----       ------       -----
    Net income (loss) available
     to common stockholders     $(90,609)    $60,937    $(115,156)    $82,883
                                ========     =======    =========     =======
    
    Earnings (loss) per share,
     basic                        $(1.93)      $1.30       $(2.46)      $1.77
                                  ======       =====       ======       =====
    Weighted average shares
     outstanding, basic (in
     thousands)                   46,890      46,800       46,829      46,788
    Earnings (loss) per share,
     diluted                      $(1.93)      $1.18       $(2.46)      $1.72
                                  ======       =====       ======       =====
    Weighted average shares
     outstanding, diluted (in
     thousands)                   46,890      52,360       46,829      49,583
    
    Cash dividends per share       $0.04       $0.04        $0.16       $0.16
                                   =====       =====        =====       =====
    
    CASH FLOW DATA: (10)
    Net cash provided by (used
     in):
      Operating activities      $(41,987)     $7,582     $283,145       $(812)
      Investing activities       (45,086)    (26,572)    (138,691)   (610,322)
      Financing activities       109,432      18,768     (122,471)    560,973
    OTHER DATA:
    Adjusted net income 
     (loss) (11)                $(65,402)    $65,147     $(82,708)     $6,555
    Earnings (loss) per share,
     excluding write-off of
     unamortized debt issuance
     costs, net of tax,
     inventories adjustments
     related to acquisition, net
     of tax, net costs
     associated with fire, net
     of tax, after-tax gain on
     involuntary conversion of
     assets, after-tax gain
     (loss) on disposition of
     assets and preferred shares
     dividends and conversion
     (11)                         $(1.39)      $1.39       $(1.77)      $0.14
    Adjusted EBITDA (12)         (66,837)    158,895       42,891     244,965
    Capital expenditures (13)     12,007      21,108       81,660      62,356
    Capital expenditures to
     rebuild the Big Spring
     refinery                      1,697      49,612       46,769     362,178
    Capital expenditures for
     turnaround and chemical
     catalyst                     11,694       7,886       24,699       9,958
    
    
    
                                        December 31,  December 31,
                                        ------------  ------------
                                           2009          2008
                                           ----          ----
    BALANCE SHEET DATA (end of period):
    Cash and cash equivalents             $40,437       $18,454
    Working capital                        84,257       250,384
    Total assets                        2,131,008     2,413,433
    Total debt                            937,024     1,103,569
    Total equity                          431,918       536,867
    
    
    
    REFINING AND UNBRANDED 
     MARKETING SEGMENT              
                         For the Three Months Ended      For the Year Ended
                                December 31,                December 31,
                                ------------                ------------
                             2009          2008          2009          2008
                             ----          ----          ----          ----
                             (dollars in thousands, except per barrel
                                   data and pricing statistics)
    STATEMENT OF
     OPERATIONS DATA:
    Net sales (14)         $706,126      $860,900    $3,359,043    $4,551,769
    Operating costs and
     expenses:
      Cost of sales         720,512       812,729     3,117,528     4,505,094
      Direct operating
       expenses              50,083        57,892       221,378       173,142
      Selling, general and
       administrative
       expenses               7,876         5,332        29,376        17,784
      Net costs associated
       with fire (3)              -        13,642             -        56,854
      Business interruption
       recovery (4)               -       (25,000)            -       (55,000)
      Depreciation and
       amortization          21,132        18,126        76,252        50,047
                             ------        ------        ------        ------
        Total operating
         costs and
         expenses           799,603       882,721     3,444,534     4,747,921
                            -------       -------     ---------     ---------
    Gain on involuntary
     conversion of 
     assets (6)                   -        80,000             -       279,680
    Gain (loss) on
     disposition of
     assets (7)                 558         2,239        (1,042)       45,244
                                ---         -----        ------        ------
    Operating income
     (loss)                $(92,919)      $60,418      $(86,533)     $128,772
                           ========       =======      ========      ========
    
    KEY OPERATING
     STATISTICS AND OTHER
     DATA:
    Total sales volume
     (bpd)                   72,241       127,469       127,400       119,195
    Per barrel of
     throughput:
      Refinery operating
       margin – Big 
       Spring (15)           $(2.87)      $(12.91)        $4.35        $(3.18)
      Refinery operating
       margin – CA
       Refineries (15)        (1.23)        11.74          1.80          1.65
      Refinery operating
       margin – Krotz
       Springs (15)           (2.03)         7.30          5.66          7.25
      Refinery direct
       operating expense –
       Big Spring (16)         4.07          3.35          4.21          4.40
      Refinery direct
       operating expense –
       CA Refineries (16)      8.17          8.59          4.82          5.81
      Refinery direct
       operating expense –
       Krotz Springs (16)      7.80          4.67          4.22          4.30
    Capital expenditures      9,864        19,131        73,567        57,576
    Capital expenditures
     to rebuild the Big
     Spring refinery          1,697        49,612        46,769       362,178
    Capital expenditures
     for turnaround and
     chemical catalyst        7,852         7,886        24,699         9,958
    
    PRICING STATISTICS:
    WTI crude oil (per
     barrel)                 $76.04        $58.51        $61.82        $99.56
    WTS crude oil (per
     barrel)                  73.97         54.82         60.30         95.78
    MAYA crude oil (per
     barrel)                  69.37         44.93         56.36         83.93
    Crack spreads (3/2/1)
     (per barrel):
      Gulf Coast (17)         $4.55         $3.49         $7.24        $10.47
      Group III (17)           5.37          5.78          8.10         11.15
      West Coast (17)          8.51          8.79         13.92         15.80
    Crack spreads
     (6/1/2/3) (per
     barrel):
      West Coast (17)         $2.43         $1.25         $4.15         $0.48
    Crack spreads (2/1/1)
     (per barrel):
      Gulf Coast high-
       sulfur diesel (17)     $4.61         $5.70         $6.50        $11.28
      Gulf Coast ultra low-
       sulfur diesel          $4.95         $7.18         $7.44        $13.61
    Crude oil
     differentials (per
     barrel):
      WTI less WTS (18)       $2.07         $3.69         $1.52         $3.78
      WTI less MAYA (18)       6.67         13.58          5.46         15.63
    Product price
     (dollars per
     gallon):
      Gulf Coast unleaded
       gasoline              $1.899        $1.300        $1.635        $2.471
      Gulf Coast ultra low-
       sulfur diesel          1.957         1.828         1.664         2.918
      Gulf Coast high
       sulfur diesel          1.941         1.757         1.619         2.808
      Group III unleaded
       gasoline               1.920         1.352         1.662         2.481
      Group III ultra low-
       sulfur diesel          1.975         1.888         1.670         2.945
      West Coast LA CARBOB
       (unleaded gasoline)    2.013         1.521         1.852         2.679
      West Coast LA ultra
       low-sulfur diesel      2.014         1.766         1.706         2.883
      Natural gas (per
       MMBTU)                  4.93          6.40          4.16          8.90
    
    
    
    THROUGHPUT AND
     PRODUCTION DATA:
    BIG SPRING       For the Three Months Ended        For the Year Ended
     REFINERY                December 31,                  December 31,
                             ------------                  ------------
                          2009          2008           2009           2008
                          ----          ----           ----           ----
                       bpd     %     bpd     %      bpd    %      bpd     %
    Refinery
     throughput:
      Sour crude      42,392  83.5  44,922  83.0  48,340  80.8   31,654  83.8
      Sweet crude      5,758  11.3   5,862  10.8   9,238  15.4    4,270  11.3
      Blendstocks      2,631   5.2   3,372   6.2   2,292   3.8    1,869   4.9
                       -----   ---   -----   ---   -----   ---    -----   ---
    Total refinery
     throughput (19)  50,781 100.0  54,156 100.0  59,870 100.0   37,793 100.0
                      ====== =====  ====== =====  ====== =====   ====== =====
    Refinery
     production:
      Gasoline        25,051  49.8  25,062  47.0  26,826  45.0   14,266  38.4
      Diesel/jet      15,159  30.1  17,320  32.5  19,136  32.2   10,439  28.2
      Asphalt          3,538   7.0   5,736  10.8   5,289   8.9    4,850  13.1
      Petrochemicals   1,865   3.7   2,504   4.7   2,928   4.9    1,221   3.3
      Other            4,744   9.4   2,685   5.0   5,327   9.0    6,298  17.0
                       -----   ---   -----   ---   -----   ---    -----  ----
    Total refinery
     production (20)  50,357 100.0  53,307 100.0  59,506 100.0   37,074 100.0
                      ====== =====  ====== =====  ====== =====   ====== =====
    Refinery
     utilization (21)         68.8%         72.5%         82.3%          52.3%
    
    
    
    THROUGHPUT AND
     PRODUCTION DATA:     
    CALIFORNIA        For the Three Months Ended        For the Year Ended
     REFINERIES               December 31,                 December 31,
                              ------------                 ------------
                          2009           2008          2009          2008
                          ----           ----          ----          ----
                       bpd     %      bpd    %      bpd    %      bpd     %
    Refinery
     throughput:
      Medium sour 
       crude           5,230  25.4     897   4.3  13,408  43.0    8,014  25.8
      Heavy crude     14,934  72.4  19,620  95.2  17,420  55.9   22,590  72.6
      Blendstocks        454   2.2      96   0.5     330   1.1      495   1.6
                         ---   ---     ---   ---     ---   ---      ---   ---
    Total refinery
     throughput (19)  20,618 100.0  20,613 100.0  31,158 100.0   31,099 100.0
                      ====== =====  ====== =====  ====== =====   ====== =====
    Refinery
     production:
      Gasoline         3,754  18.8   2,560  12.6   4,920  16.2    4,141  13.7
      Diesel/jet       3,857  19.3   5,156  25.2   7,123  23.5    7,481  24.8
      Asphalt          5,301  26.5   7,914  38.7   8,976  29.5    9,214  30.5
      Light
       unfinished          -     -       -     -     117   0.4        -     -
      Heavy
       unfinished      7,042  35.3   4,783  23.4   8,813  29.0    9,182  30.4
      Other               23   0.1      24   0.1     418   1.4      192   0.6
                         ---   ---     ---   ---     ---   ---      ---   ---
    Total
     refinery
     production (20)  19,977 100.0  20,437 100.0  30,367 100.0   30,210 100.0
                      ====== =====  ====== =====  ====== =====   ====== =====
    Refinery
     utilization (21)         27.8%         43.8%         46.2%          46.3%
    
    
    
    THROUGHPUT AND
     PRODUCTION DATA:  
    KROTZ SPRINGS    For the Three Months Ended       For the Year Ended
     REFINERY (A)           December 31,                  December 31,
                            ------------                  ------------
                         2009          2008           2009           2008
                         ----          ----           ----           ----
                      bpd    %      bpd     %     bpd       %    bpd      %
    Refinery
     throughput:
      Light sweet
       crude         5,694  26.2   48,920  84.4  22,942    47.5 43,361   74.5
      Heavy sweet
       crude        15,036  69.3    5,363   9.2  22,258    46.0 11,979   20.6
      Blendstocks      984   4.5    3,699   6.4   3,137     6.5  2,844    4.9
                     -----   ---    -----   ---   -----     ---  -----    ---
    Total refinery
     throughput(19) 21,714 100.0   57,982 100.0  48,337   100.0 58,184  100.0
                    ====== =====   ====== =====  ======   ===== ======  =====
    Refinery
     production:
      Gasoline       9,313  42.1   26,135  44.7  22,264    45.4 25,195   42.8
      Diesel/jet     9,539  43.1   26,053  44.5  21,318    43.4 26,982   45.9
      Heavy oils     1,494   6.7    1,543   2.6   1,238     2.5  1,402    2.4
      Other          1,789   8.1    4,817   8.2   4,258     8.7  5,258    8.9
                     -----   ---    -----   ---   -----     ---  -----    ---
    Total refinery
     production(20) 22,135 100.0   58,548 100.0  49,078   100.0 58,837  100.0
                    ====== =====   ====== =====  ======   ===== ======  =====
    Refinery
     utilization(21)        74.0%          65.3%           65.3%         66.6%
    
    (A)  The year ended December 31, 2008, represents throughput and
         production data for the period from July 1, 2008 through December 31,
         2008.
    
    
    
    ASPHALT SEGMENT        For the Three Months Ended   For the Year Ended
                                  December 31,             December 31,
                                  ------------             ------------
                               2009         2008         2009        2008
                               ----         ----         ----        ----
                              (dollars in thousands, except per ton data)
    STATEMENT OF OPERATIONS
     DATA:
    Net sales                 $89,486     $104,448     $440,915    $647,221
    Operating costs and
     expenses:
      Cost of sales (22)       78,169       17,035      386,050     499,992
      Direct operating
       expenses                11,119        9,023       44,124      43,356
      Selling, general and
       administrative
       expenses                 1,117        1,249        4,588       4,292
      Depreciation and
       amortization             1,708          536        6,807       2,139
                                -----          ---        -----       -----
        Total operating costs
         and expenses          92,113       27,843      441,569     549,779
                               ------       ------      -------     -------
    Operating income (loss)   $(2,627)     $76,605        $(654)    $97,442
                              =======      =======        =====     =======
    
    KEY OPERATING STATISTICS 
     AND OTHER DATA:
    Blended asphalt sales
     volume (tons in
     thousands) (23)              181          182          994       1,210
    Non-blended asphalt
     sales volume (tons in
     thousands) (24)               54           25          197          88
    Blended asphalt sales
     price per ton (23)       $434.53      $533.73      $409.88     $511.95
    Non-blended asphalt
     sales price per ton (24) $200.67      $292.40      $170.05     $315.48
    Asphalt margin per 
     ton (25)                  $48.16      $422.29       $46.07     $113.43
    Capital expenditures       $1,480         $337       $2,579        $644
    
    
    
    RETAIL AND BRANDED            
     MARKETING SEGMENT     For the Three Months Ended    For the Year Ended
                                  December 31,              December 31,
                                  ------------              ------------
                                2009         2008        2009          2008
                                ----         ----        ----          ----
                             (dollars in thousands, except per gallon data)
    STATEMENT OF
     OPERATIONS DATA:
    Net sales                 $217,058     $189,297    $808,221    $1,227,319
    Operating costs and
     expenses:
       Cost of sales (22)      189,387      158,122     691,651     1,117,712
       Selling, general and
        administrative
        expenses                24,493       26,767      94,725        97,172
       Depreciation and
        amortization             3,285        3,384      13,464        13,674
                                 -----        -----      ------        ------
         Total operating costs
          and expenses         217,165      188,273     799,840     1,228,558
                               -------      -------     -------     ---------
      Loss on disposition of
       assets                       (2)           -        (549)            -
                                   ---          ---        ----           ---
    Operating income
     (loss)                      $(109)      $1,024      $7,832       $(1,239)
                                 =====       ======      ======       =======
    
    KEY OPERATING STATISTICS 
     AND OTHER DATA:
    Integrated branded
     fuel sales (thousands
     of gallons) (26)           65,645       61,685     260,629       225,474
    Integrated branded
     fuel margin (cents
     per gallon) (26)              5.0         10.4         5.9           4.4
    Non-Integrated
     branded fuel sales
     (thousands of
     gallons) (26)               3,527        9,939      13,472       113,626
    Non-Integrated
     branded fuel margin
     (cents per gallon)
     (26)                          0.8          8.9         3.3          (0.3)
    
    Number of stores (end
     of period)                    308          306         308           306
    Retail fuel sales
     (thousands of
     gallons)                   31,401       23,882     120,697        96,974
    Retail fuel sales
     (thousands of gallons
     per site per month) (27)       34           27          33            27
    Retail fuel margin
     (cents per gallon) (28)      10.8         18.8        13.9          19.7
    Retail fuel sales
     price (dollar per
     gallon) (29)                $2.49        $2.31       $2.29         $3.26
    Merchandise sales          $66,110      $63,213    $268,785      $261,144
    Merchandise sales (per
     site per month) (27)           72           72          73            72
    Merchandise margin (30)       30.1%        30.9%       30.7%         30.9%
    Capital expenditures        $1,598         $917      $3,822        $2,928
    
    
    
    (1)  Includes excise taxes on sales by the retail and branded marketing
         segment of $12,250 and $9,408 for the three months ended December 31,
         2009 and 2008, respectively, and $47,137 and $37,483 for the years
         ended December 31, 2009 and 2008, respectively.
    
    (2)  Includes corporate headquarters selling, general and administrative
         expenses of $188 and $151 for the three months ended December 31,
         2009 and 2008, respectively, and $757 and $604 for the years ended
         December 31, 2009 and 2008, respectively, which are not allocated to
         our three operating segments.
    
    (3)  Includes $13,642 and $51,064 for the three months and year ended
         December 31, 2008, respectively, of expenses incurred from pipeline
         commitment deficiencies, crude sale losses and other incremental
         costs; $5,000 for the year ended December 31, 2008 for our third
         party liability insurance deductible under the insurance policy; and
         depreciation for the temporarily idled facilities of $790 for the
         year ended December 31, 2008.
    
    (4)  Business interruption recovery of $25,000 and $55,000 was recorded
         for the three months and year ended December 31, 2008, respectively,
         as a result of the Big Spring refinery fire with all insurance
         proceeds received in 2008 and January 2009.
    
    (5)  Includes corporate depreciation and amortization of $224 and $224 for
         the three months ended December 31, 2009 and 2008, respectively, and
         $724 and $894 for the years ended December 31, 2009 and 2008,
         respectively, which are not allocated to our three operating
         segments.
    
    (6)  A gain on involuntary conversion of assets has been recorded of
         $80,000 and $279,680 for the three months and year ended December 31,
         2008, respectively, for the proceeds received in excess of the book
         value of the assets impaired of $25,330 and demolition and repair
         expenses of $24,990 incurred for the year ended December 31, 2008 as
         a result of the Big Spring refinery fire. 
    
    (7)  Gain on disposition of assets for the year ended December 31, 2008,
         primarily includes the recognition of deferred gain recorded in
         connection with the contribution of certain product pipelines and
         terminals to Holly Energy Partners, LP, ("HEP"), in March 2005 ("HEP
         transaction").  A recognized gain of $42.9 million in 2008
         represented all the remaining deferred gain associated with the HEP
         transaction and was due to the termination of an indemnification
         agreement with HEP.
    
    (8)  Interest expense for the three months and year ended December 31,
         2009 includes $20,482 of unamortized debt issuance costs written off
         as a result of prepayments of $163,819 of term debt in October 2009. 
         Interest expense for the year ended December 31, 2009 also includes
         $5,715 related to the liquidation of the heating oil hedge in the
         second quarter of 2009.
    
    (9)  Accumulated dividends on preferred stock of subsidiary for the three
         months and year ended December 31, 2009, represent dividends of
         $12,900 for the conversion of the preferred stock into Alon common
         stock.  Also included for the year ended December 31, 2009 is $8,600
         of accumulated dividends through September 30, 2009. 
    
    (10) Cash provided by operating activities for the year ended December 31,
         2009 includes proceeds from the liquidation of the heating oil crack
         spread hedge of $133,581 and proceeds from the receipt of income tax
         receivables of $112,952.  Cash used in financing activities for the
         year ended December 31, 2009, includes repayments on long-term debt
         and revolving credit facilities sourced primarily from the
         liquidation proceeds from the heating oil crack spread hedge and
         proceeds from the receipt of income tax receivables.  Cash used in
         investing activities and cash provided by financing activities for
         the year ended December 31, 2008, is a result of the Krotz Springs
         refinery acquisition. 
    
    (11) The following table provides a reconciliation of net income (loss)
         under United States generally accepted accounting principles ("GAAP")
         to adjusted net income (loss) utilized in determining earnings (loss)
         per common share, excluding the after-tax loss on write-off of
         unamortized debt issuance costs, after-tax inventories adjustments
         related to acquisition, after-tax loss on net costs associated with
         fire, after-tax gain on involuntary conversion of assets, after-tax
         gain (loss) on disposition of assets and preferred shares dividends
         and conversions.  Our management believes that the presentation of
         adjusted net income (loss) and earnings (loss) per common share,
         excluding these after-tax items, is useful to investors because it
         provides a more meaningful measurement for evaluation of our
         Company's operating results.
    
    
    
                                     Three Months Ended        Year Ended
                                         December 31,         December 31,
                                       2009       2008       2009      2008
                                       ----       ----       ----      ----
                                        (dollars in thousands, except
                                               earnings per share)
    Net income (loss)                $(90,609)  $60,937  $(115,156)  $82,883
      Plus:  Write-off of
       unamortized debt issuance
       costs, net of tax               11,583         -     11,583         -
      Plus:  Preferred shares
       dividends and conversion        13,975     1,999     19,965     3,999
      Plus:  Inventories
       adjustments related to
       acquisition, net of tax              -    34,959          -    70,738
      Plus:  Net costs
       associated with fire, net
       of tax                               -     6,116          -    31,566
      Plus:  Loss on
       disposition of assets,
       net of tax                           -         -        900         -
      Less:  Gain on
       involuntary
       conversion of assets,
       net of tax                           -   (37,831)         -  (155,281)
      Less:  Gain on
       disposition of
       assets, net
        of tax                           (351)   (1,033)         -   (27,350)
                                         ----    ------        ---   -------
    Adjusted net income (loss)       $(65,402)  $65,147   $(82,708)   $6,555
                                     --------   -------   --------    ------
    
    Weighted average shares
     outstanding (in thousands)        46,890    46,800     46,829    46,788
                                       ======    ======     ======    ======
    Earnings (loss) per share,
     excluding write-off of
     unamortized debt issuance
     costs, net of tax, inventories
     adjustments related to
     acquisition, net of tax, net
     costs associated with fire, net
     of tax, after-tax gain on
     involuntary conversion of
     assets, after-tax gain (loss)
     on disposition of assets and
     preferred shares dividends and
     conversions                       $(1.39)    $1.39     $(1.77)    $0.14
                                       ======     =====     ======     =====
    
    
    
    (12) Adjusted EBITDA represents earnings before non-controlling interest
         in income of subsidiaries, income tax expense, interest expense,
         depreciation and amortization and gain on disposition of assets. 
         Adjusted EBITDA is not a recognized measurement under GAAP; however,
         the amounts included in Adjusted EBITDA are derived from amounts
         included in our consolidated financial statements.  Our management
         believes that the presentation of Adjusted EBITDA is useful to
         investors during periods of normal operations because it is
         frequently used by securities analysts, investors, and other
         interested parties in the evaluation of companies in our industry. 
         In addition, our management believes that Adjusted EBITDA is useful
         in evaluating our operating performance compared to that of other
         companies in our industry because the calculation of Adjusted EBITDA
         generally eliminates the effects of non-controlling interest in
         income of subsidiaries, income tax expense, interest expense, gain on
         disposition of assets and the accounting effects of capital
         expenditures and acquisitions, items that may vary for different
         companies for reasons unrelated to overall operating performance.
    
         Adjusted EBITDA has limitations as an analytical tool, and you should
         not consider it in isolation, or as a substitute for analysis of our
         results as reported under GAAP.  Some of these limitations are:
         -- Adjusted EBITDA does not reflect our cash expenditures or future
            requirements for capital expenditures or contractual commitments;
         -- Adjusted EBITDA does not reflect the interest expense or the cash
            requirements necessary to service interest or principal payments
            on our debt;
         -- Adjusted EBITDA does not reflect the prior claim that
            non-controlling interest have on the income generated by
            non-wholly-owned subsidiaries;
         -- Adjusted EBITDA does not reflect changes in or cash requirements
            for our working capital needs; and
         -- Our calculation of Adjusted EBITDA may differ from EBITDA
            calculations of other companies in our industry, limiting its
            usefulness as a comparative measure.
    
         Because of these limitations, Adjusted EBITDA should not be
         considered a measure of discretionary cash available to us to invest
         in the growth of our business.  We compensate for these limitations
         by relying primarily on our GAAP results and using Adjusted EBITDA
         only supplementally.
    
         The following table reconciles net income (loss) to Adjusted EBITDA
         for the three months and years ended December 31, 2009 and 2008,
         respectively:
    
    
    
                           For the Three Months Ended    For the Year Ended
                                   December 31,             December 31,
                                   ------------             ------------
                                 2009        2008        2009        2008
                                 ----        ----        ----        ----
                                          (dollars in thousands)
         Net income (loss)     $(90,609)    $60,937   $(115,156)    $82,883
         Non-controlling
          interest in income
          (loss) of subsidiaries
          (including accumulated
          dividends on preferred 
          stock of subsidiary)    9,452       6,331      12,949      10,241
         Income tax expense
          (benefit)             (51,871)     46,931     (64,877)     62,781
         Interest expense        40,398      24,665     111,137      67,550
         Depreciation and
          amortization           26,349      22,270      97,247      66,754
         (Gain) loss on
          disposition of
          assets                   (556)     (2,239)      1,591     (45,244)
                                   ----      ------       -----     -------
         Adjusted EBITDA       $(66,837)   $158,895     $42,891    $244,965
                               ========    ========     =======    ========
    
    
    
         Adjusted EBITDA for the three months and year ended December 31, 2008
         includes a gain on involuntary conversion of assets of $80,000 and
         $279,680, respectively, representing insurance proceeds received with
         respect to property damage resulting from the Big Spring refinery
         fire in excess of the book value of the assets impaired; net costs
         associated with fire at the Big Spring refinery of $13,642 and
         $56,854, respectively; and a charge for inventories adjustments
         related to the Krotz Springs acquisition of $66,217 and $127,408,
         respectively.
    
    (13) Includes corporate capital expenditures of $717 and $723 for the
         three months ended December 31, 2009 and 2008, respectively, and
         $3,704 and $1,208 for the years ended December 31, 2009 and 2008,
         respectively, which are not included in our three operating segments.
    
    (14) Net sales include intersegment sales to our asphalt and retail and
         branded marketing segments at prices which are intended to
         approximate wholesale market prices.  These intersegment sales are
         eliminated through consolidation of our financial statements.  
    
    (15) 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 inventories adjustments
         related to acquisitions) attributable to each refinery by the
         refinery's throughput volumes. Industry-wide refining results are
         driven and measured by the margins between refined product prices and
         the prices for crude oil, which are referred to as crack spreads.  We
         compare our refinery operating margins to these crack spreads to
         assess our operating performance relative to other participants in
         our industry.  There were unrealized hedging gains of $322 and $380
         for the California refineries for the three months and year ended
         December 31, 2009, respectively, and unrealized hedging losses of $65
         and $4,192 for the California refineries for the three months and
         year ended December 31, 2008, respectively.  There were unrealized
         hedging losses of $(151) for the Big Spring refinery for the three
         months ended December 31, 2009.  There were unrealized hedging gains
         of $5,263 and $25,632 for the Krotz Springs refinery for the three
         months and year ended December 31, 2009, respectively, and the
         refinery operating margin for the Krotz Springs refinery excludes a
         charge of $66,217 and $127,408 to cost of sales for inventories
         adjustments related to the acquisition for the three months and year
         ended December 31, 2008, respectively and unrealized hedging gains of
         $117,452 for both the three months and year ended December 31, 2008,
         respectively.  Additionally, the Krotz Springs refinery margin for
         2009 excludes realized gains related to the unwind of the heating oil
         crack spread hedge of $139,290.
    
    (16) Refinery direct operating expense is a per barrel measurement
         calculated by dividing direct operating expenses at our Big Spring,
         California and Krotz Springs refineries, exclusive of depreciation
         and amortization, by the applicable refinery's total throughput
         volumes.
    
    (17) A 3/2/1 crack spread in a given region is calculated assuming that
         three barrels of a benchmark crude oil are converted, or cracked,
         into two barrels of gasoline and one barrel of diesel.  We calculate
         the Gulf Coast 3/2/1 crack spread using the market values of Gulf
         Coast conventional gasoline and ultra low-sulfur diesel and the
         market value of West Texas Intermediate, or WTI, a light sweet crude
         oil.  We calculate the Group III 3/2/1 crack spread using the market
         values of Group III conventional gasoline and ultra low-sulfur diesel
         and the market value of WTI crude oil.  We calculate the West Coast
         3/2/1 crack spread using the market values of West Coast LA CARB
         pipeline gasoline and LA ultra low-sulfur pipeline diesel and the
         market value of WTI crude oil. A 6/1/2/3 crack spread is calculated
         assuming that six barrels of a benchmark crude oil are converted, or
         cracked, into one barrel of gasoline, two barrels of diesel and three
         barrels of fuel oil. We calculate the West Coast 6/1/2/3 crack spread
         using the market values of West Coast LA CARB pipeline gasoline, LA
         ultra low-sulfur pipeline diesel, LA 380 pipeline CST (fuel oil) and
         the market value of WTI crude oil.  We calculate the Gulf Coast 2/1/1
         crack spread using the market values of Gulf Coast conventional
         gasoline and Gulf Coast high sulfur diesel and the market value of
         WTI crude oil.  
    
    (18) The WTI/WTS, or sweet/sour, spread represents the differential
         between the average value per barrel of WTI crude oil and the average
         value per barrel of WTS crude oil.  The WTI/Maya, or light/heavy,
         spread represents the differential between the average value per
         barrel of WTI crude oil and the average value per barrel of Maya
         crude oil.
    
    (19) Total refinery throughput represents the total barrels per day of
         crude oil and blendstock inputs in the refinery production process.
    
    (20) Total refinery production represents the barrels per day of various
         products produced from processing crude and other refinery feedstocks
         through the crude units and other conversion units at the refinery. 
         Light product yields decreased at the Big Spring refinery for the
         year ended December 31, 2008 due to the fire on February 18, 2008 and
         the re-start of the crude unit in a hydroskimming mode on April 5,
         2008.
    
    (21) Refinery utilization represents average daily crude oil throughput
         divided by crude oil capacity, excluding planned periods of downtime
         for maintenance and turnarounds. The decrease in refinery utilization
         at our Big Spring refinery for the year ended December 31, 2008 is
         due to the fire on February 18, 2008. Production ceased at the Big
         Spring refinery until the re-start of the crude unit in a
         hydroskimming mode on April 5, 2008.  The Big Spring refinery
         returned to normal operating mode with the re-start of the FCCU on
         September 26, 2008.  The decrease in refinery utilization at our
         California refineries is due to reduced throughput to optimize our
         refining and asphalt economics.  The low refinery utilization at our
         Krotz Springs refinery for the fourth quarter of 2008 is due to
         shutdowns during hurricanes Gustav and Ike and limited crude supply
         and electrical outages following the hurricanes.
    
    (22) Cost of sales includes intersegment purchases of asphalt blends and
         motor fuels from our refining and unbranded marketing segment at
         prices which approximate wholesale market prices. These intersegment
         purchases are eliminated through consolidation of our financial
         statements.
    
    (23) Blended asphalt represents base asphalt that has been blended with
         other materials necessary to sell the asphalt as a finished product.
    
    (24) Non-blended asphalt represents base material asphalt and other
         components that require additional blending before being sold as a
         finished product.
    
    (25) Asphalt margin is a per ton measurement calculated by dividing the
         margin between net sales and cost of sales by the total sales volume.
         Asphalt margins are used in the asphalt industry to measure operating
         results related to asphalt sales.
    
    (26) Marketing sales volume represents branded fuel sales to our wholesale
         marketing customers located in both our integrated and non-integrated
         regions. The branded fuels we sell in our integrated region are
         primarily supplied by the Big Spring refinery, but due to the fire on
         February 18, 2008 at the Big Spring refinery, more fuel has been
         purchased from third-party suppliers. The branded fuels we sell in
         the non-integrated region are obtained from third-party suppliers.
         The marketing margin represents the margin between the net sales and
         cost of sales attributable to our branded fuel sales volume,
         expressed on a cents-per-gallon basis and includes net credit card
         revenue received from these sales. 
    
    (27) Retail fuel and merchandise sales per site for 2009 were calculated
         using 306 stores for eleven months and 308 stores for 1 month.
    
    (28) Retail fuel margin represents the difference between motor fuel sales
         revenue and the net cost of purchased motor fuel, including
         transportation costs and associated motor fuel taxes, expressed on a
         cents-per-gallon basis. Motor fuel margins are frequently used in the
         retail industry to measure operating results related to motor fuel
         sales.
    
    (29) Retail fuel sales price per gallon represents the average sales price
         for motor fuels sold through our retail convenience stores.
    
    (30) Merchandise margin represents the difference between merchandise
         sales revenues and the delivered cost of merchandise purchases, net
         of rebates and commissions, expressed as a percentage of merchandise
         sales revenues.  Merchandise margins, also referred to as in-store
         margins, are commonly used in the retail industry to measure
         in-store, or non-fuel, operating results.

SOURCE Alon USA Energy, Inc.

Copyright 2009 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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