Alon USA Energy, Inc.

Disclaimer

Links to third-party websites are provided solely as a convenience to you. By following the link below, you will be taken to an independent web site that is not maintained by Alon. We do not endorse or make any representations as to the accuracy or completeness of any information, product or materials contained in any of these sites. If you decide to access any of the third-party sites linked to our web site, you do so entirely at your own risk.

Investor Center

Press Releases

Alon USA Reports Record Quarterly Results, Best Refineries Throughput and Margins in Company History; Declares Quarterly Cash Dividend

Download PDF

Company schedules conference call for August 8, 2007 at 10:00 A.M. Eastern

DALLAS, Aug. 7 /PRNewswire-FirstCall/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced the most profitable quarterly results in Alon's history. Net income for the second quarter of 2007 was $95.6 million, or $2.05 per share, compared to $43.1 million, or $0.92 per share, for the same period last year. Excluding special items, Alon recorded net income of $94.1 million, or $2.01 per share, for the second quarter of 2007, compared to $41.7 million, or $0.89 per share, for the same period last year.

Net income for the six months ended June 30, 2007 was $131.2 million, or $2.81 per share, compared to $97.3 million, or $2.08 per share, for the same period last year. Excluding special items, net income for the six months ended June 30, 2007 was $129.1 million, or $2.76 per share, compared to $65.8 million, or $1.41 per share, for the same period last year.

The special items for the second quarter of 2007 included after-tax gain of $1.5 million, compared to $1.4 million for the same period in 2006, recognized on disposition of assets in connection with the contribution of certain pipeline and terminal assets to Holly Energy Partners, LP in the second quarter of 2005 ("HEP transaction").

Special items for the six months ended June 30, 2007 included $2.1 million of after-tax gain associated with the HEP transaction. Special items for the six months ended June 30, 2006 included $35.7 million of after-tax gain recognized on disposition of assets primarily relating to the sale of Alon's Amdel and White Oil crude oil pipelines in March 2006 and $4.2 million of after-tax interest expense resulting from the prepayment of Alon's $100.0 million term loan facility in January 2006.

The increase in net income for the three and six month periods ended June 30, 2007 over the comparable periods in 2006 were primarily attributable to the increased throughput at the Big Spring refinery, the addition of the California refineries and the asphalt assets acquired in the third quarter of 2006 and to strong industry refining margins.

The combined refineries throughput for the second quarter of 2007 averaged 135,977 barrels per day ("bpd"), consisting of a record average of 72,660 bpd at the Big Spring refinery and a record average of 63,317 bpd at the California refineries compared to an average of 56,335 bpd at the Big Spring refinery in the second quarter of 2006. The Big Spring refinery throughput in the second quarter of 2006 was affected by a scheduled turnaround to finalize work required to meet the diesel sulfur content standards required by the U.S. Environmental Protection Agency as part of the Clean Air Act. The combined refineries throughput for the six months ended June 30, 2007 averaged 130,328 bpd, consisting of an average of 69,076 bpd at the Big Spring refinery and an average of 61,252 bpd at the California refineries compared to an average of 63,392 bpd at the Big Spring refinery for the six months ended June 30, 2006.

Gulf Coast 3-2-1 crack spreads increased to an average of $26.23 per barrel for the second quarter of 2007 compared to an average of $18.22 per barrel for the second quarter of 2006. West Coast 3-2-1 crack spreads increased to an average of $39.82 per barrel for the second quarter of 2007 compared to an average of $34.61 per barrel for the second quarter of 2006. Gulf Coast 3-2-1 crack spreads increased to an average of $19.53 per barrel for the six months ended June 30, 2007 compared to an average of $13.98 per barrel for the six months ended June 30, 2006. West Coast 3-2-1 crack spreads increased to an average of $36.17 per barrel for the six months ended June 30, 2007 compared to an average of $27.03 per barrel for the six months ended June 30, 2006.

Jeff Morris, Alon's President and CEO, commented "This was a record quarter. We combined record throughput at both our Big Spring and California refineries with record margins. Our record throughput also resulted in record sales. This performance is primarily due to the exceptional quality and contribution of all the individuals in Alon USA. We are continuing our integration of the California refineries and asphalt business and remain very optimistic about the potential these assets have for Alon. During the second quarter, we closed the acquisition of Skinny's, which added 102 retail stores as we continue to increase the physical integration of our Big Spring refinery."

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 September 14, 2007 to stockholders of record as of August 31, 2007.

The Company has scheduled a conference call for Wednesday, August 8, 2007, at 10:00 a.m. Eastern, to discuss the second quarter 2007 results. To access the call, please dial (800) 218-9073, or (303) 262-2140, 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 on that site and clicking "Investors." A telephonic replay of the conference call will be available through August 22, 2007 and may be accessed by calling (800) 405-2236, or (303) 590-3000, for international callers, and using the passcode 11092753. 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 and operates four sour and heavy crude oil refineries in Texas, California and Oregon, with an aggregate crude oil throughput capacity of approximately 170,000 barrels per day. Alon markets gasoline and diesel products under the FINA brand name and is a leading producer of asphalt. Alon also operates more than 300 convenience stores in West Texas and New Mexico substantially under the 7-Eleven and FINA brand names and supplies motor fuels to these stores from its Big Spring refinery. In addition, Alon supplies approximately 800 additional FINA branded stations.

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.

                              -Tables to follow-


             ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
                               EARNINGS RELEASE

    RESULTS OF OPERATIONS -
    FINANCIAL DATA (A)(ALL
    INFORMATION IN THIS
    PRESS RELEASE, EXCEPT
    FOR BALANCE SHEET DATA
    AS OF DECEMBER 31, 2006
    IS UNAUDITED)                     For the Three         For the Six
                                      Months Ended,         Months Ended
                                         June 30,             June 30,
                                      2007     2006       2007       2006
                             (dollars in thousands, except per share data)
    STATEMENT OF OPERATIONS DATA:
    Net sales                     $1,186,693 $672,262 $2,152,225 $1,256,963
    Operating costs and expenses:
      Cost of sales                  929,575  556,689  1,740,836  1,054,516
      Direct operating expenses       54,746   22,164    104,029     45,435
      Selling, general and
       administrative expenses (1)    27,034   20,354     49,199     37,807
      Depreciation and amortization
       (2)                            11,153    5,408     25,595     10,931
        Total operating costs and
         expenses                  1,022,508  604,615  1,919,659  1,148,689
    Gain on disposition of assets
     (3)                               2,525    2,279      3,480     57,665
    Operating income                 166,710   69,926    236,046    165,939
    Interest expense (4)             (11,669)  (1,349)   (23,087)   (10,396)
    Equity earnings of investees       3,936      176      4,540        753
    Other income, net                  2,291    2,174      3,181      4,101
    Income before income tax
     expense and minority interest
     in income of subsidiaries       161,268   70,927    220,680    160,397
    Income tax expense                59,650   25,607     81,621     58,133
    Income before minority interest
     in income of subsidiaries       101,618   45,320    139,059    102,264
    Minority interest in income of
     subsidiaries                      6,005    2,229      7,881      5,009
    Net income                       $95,613  $43,091   $131,178    $97,255

    Earnings per share                 $2.05     $.92      $2.81      $2.08

    Weighted average shares
     outstanding (in thousands)       46,758   46,733     46,758     46,732
    Cash dividends per share           $0.04    $0.04      $0.08      $0.45
    CASH FLOW DATA:
    Net cash provided by (used in):
      Operating activities          $120,040   $5,013   $158,908    $(4,710)
      Investing activities           (91,113)  66,221    (99,989)   195,608
      Financing activities            42,245   (3,710)    36,583   (123,370)

    OTHER DATA:
    Adjusted net income (5)          $94,073  $41,688   $129,050    $65,805
    Earnings per share, excluding
     after-tax gain on disposition
     of assets and interest expense
     related to the prepayment of
     debt, net of tax (5)              $2.01    $0.89      $2.76      $1.41
    Adjusted EBITDA (6)             $181,565  $75,405   $265,882   $124,059
    Capital expenditures (7)          13,075   18,527     17,667     23,165
    Capital expenditures for
     turnaround and chemical catalyst    463    1,622      5,137      2,925

                                                           June     December
                                                            30,        31,
                                                           2007       2006
    BALANCE SHEET DATA (end of period):
    Cash and cash equivalents                            $159,668    $64,166
    Working capital                                       314,455    228,779
    Total assets                                        1,701,222  1,408,785
    Total debt                                            541,458    498,669
    Total stockholders' equity                            418,238    290,330

    (A) Alon acquired the California refineries and asphalt assets in the
        third quarter of 2006; therefore, comparable data related to these
        refineries and asphalt assets for the three and six months ended
        June 30, 2006 is not included.



    REFINING AND MARKETING SEGMENT (B)    For the Three        For the Six
                                           Months Ended       Months Ended
                                             June 30,           June 30,
                                          2007     2006       2007     2006
                                    (dollars in thousands, except per barrel
                                         data and pricing statistics)
    STATEMENTS OF OPERATIONS DATA:
    Net sales (8)                  $1,059,147 $616,790 $1,953,116 $1,156,777

    Operating costs and expenses:
      Cost of sales                   845,791  520,307  1,620,182    982,879
      Direct operating expenses        42,790   20,661     81,237     42,260
      Selling, general and
       administrative expenses          9,728    5,730     15,927      9,284
      Depreciation and amortization     9,254    3,738     21,973      7,524
        Total operating costs and
         expenses                     907,563  550,436  1,739,319  1,041,947
    Gain on disposition of assets
     (3)                                2,400    2,283      3,424     57,669
    Operating income                 $153,984  $68,637   $217,221   $172,499

    KEY OPERATING STATISTICS:
    Total sales volume (bpd)          135,517   80,419    134,433     82,881
    Non-integrated marketing sales
     volume (bpd) (9)                  14,323   19,411     14,101     19,379
    Non-integrated marketing margin
     (per barrel sales volume) (9)      $0.85    $(.67)     $0.40      $(.61)
    Per barrel of throughput:
      Refinery operating margin - Big
       Spring (10)                     $24.92   $18.41     $19.94     $15.05
      Refinery operating margin - CA
      Refineries (10)                    8.24      N/A      $7.45        N/A
      Refinery direct operating
       expenses - Big Spring (11)        3.34     4.03       3.60       3.68
      Refinery direct operating
       expenses - CA Refineries (11)     3.59      N/A       3.27        N/A
    Capital expenditures               10,248   16,222     14,103     20,547
    Capital expenditures for
     turnaround and chemical catalysts    463    1,622      5,137      2,925

    PRICING STATISTICS:
    WTI crude oil (per barrel)         $64.88   $70.41     $61.43     $66.89
    WTS crude oil (per barrel)          60.32    65.69      57.16      61.26
    MAYA crude oil (per barrel)         55.30    54.77      50.36      51.25
    Crack spreads (3/2/1) (per
     barrel):
      Gulf Coast (12)                  $26.23   $18.22     $19.53     $13.98
      Group III (12)                    31.67    19.44      23.38      14.58
      West Coast (12)                   39.82    34.61      36.17      27.03
    Crude oil differentials (per
     barrel):
      WTI less WTS (13)                 $4.56    $4.72      $4.27      $5.63
      WTI less MAYA (13)                 9.58    15.64      11.08      15.59
    Product price (dollars per
     gallon):
      Gulf Coast unleaded gasoline     $2.215   $2.107     $1.923     $1.906
      Gulf Coast low-sulfur diesel      2.078    2.116      1.937      1.965
      Group III unleaded gasoline       2.369    2.127      2.023      1.918
      Group III low-sulfur diesel       2.159    2.165      2.013      1.984
      West Coast LA CARBOB (unleaded
       gasoline)                        2.650    2.601      2.456      2.301
      West Coast LA ultra low-sulfur
       diesel                           2.179    2.299      2.060      2.107
      Natural gas (per MMBTU)           $7.65    $6.65      $7.42      $6.11

    (B)  Following the acquisitions of the California refineries and asphalt
         assets, Alon added a third reporting segment, the Asphalt segment,
         beginning in the third quarter ended September 30, 2006.  As a
         result, asphalt is no longer included in the Refining and Marketing
         segment.  All comparable periods for the Refining and Marketing
         segment exclude asphalt, as this information is now reflected in the
         Asphalt segment.


    THROUGHPUT AND
    YIELD DATA:        For the Three Months Ended   For the Six Months Ended
    BIG SPRING                   June 30,                    June 30,
                            2007         2006           2007         2006
                        bpd     %     bpd     %     bpd     %     bpd     %
    Refinery crude
    throughput:
      Sour crude      62,058  85.4  49,040  87.0  60,347  87.4  55,842  88.1
      Sweet crude      7,200   9.9   3,186   5.7   4,800   6.9   3,188   5.0
      Blendstocks      3,402   4.7   4,109   7.3   3,929   5.7   4,362   6.9
    Total refinery
     throughput (14)  72,660 100.0  56,335 100.0  69,076 100.0  63,392 100.0
    Refinery
     production:
      Gasoline        33,726  46.8  24,250  43.5  32,130  46.9  28,524  45.5
      Diesel/jet      22,506  31.2  16,361  29.4  20,691  30.2  20,011  32.0
      Asphalt          7,383  10.2   5,715  10.3   7,171  10.5   6,077   9.7
      Petrochemicals   4,108   5.7   3,759   6.7   4,436   6.5   4,011   6.4
      Other            4,427   6.1   5,635  10.1   4,042   5.9   4,000   6.4
    Total refinery
     production (15)  72,150 100.0  55,720 100.0  68,470 100.0  62,623 100.0
    Refinery
     Utilization (16)        98.9%         85.7%         95.0%         90.2%


    THROUGHPUT AND YIELD DATA:              For the Three       For the Six
    CALIFORNIA REFINERIES                    Months Ended      Months Ended
                                               June 30,           June 30,
                                                 2007              2007
                                            bpd         %       bpd      %
    Refinery crude throughput:
      Sour crude                           22,956      36.3   22,213    36.3
      Heavy crude                          40,350      63.7   38,886    63.5
      Blendstocks                              11       0.0      153     0.2
    Total refinery throughput (14)         63,317     100.0   61,252   100.0
    Refinery production:
      Gasoline                              7,029      11.4    6,951    11.6
      Diesel/jet                           12,553      20.4   13,315    22.3
      Asphalt                              18,029      29.2   18,389    30.8
      Light unfinished                      4,333       7.0    3,423     5.7
      Heavy unfinished                     18,715      30.4   16,652    27.9
      Other                                   990       1.6      994     1.7
    Total refinery production (15)         61,649     100.0   59,724   100.0
    Refinery Utilization (16)                         87.3%            85.6%


                                     For the Three         For the Six
    ASPHALT SEGMENT                   Months Ended         Months Ended
                                        June 30,             June 30,
                                     2007      2006      2007        2006
                                (dollars in thousands, except per ton data)
    STATEMENTS OF OPERATIONS
     DATA:
    Net sales                     $181,445   $48,911  $295,391     $71,203
    Operating costs and expenses:
        Cost of sales (17)         155,480    45,180   251,275      71,661
        Direct operating
         expenses                   11,956     1,503    22,792       3,175
        Selling, general and
         administrative expenses     1,259     1,499     1,816       2,821
        Depreciation and
         amortization                  558        63     1,055         122
            Total operating costs
             and expenses          169,253    48,245   276,938      77,779
    Gain (loss) on disposition
     of assets                           4        (4)        4          (4)
    Operating income (loss)        $12,196      $662   $18,457     $(6,580)

    KEY OPERATING STATISTICS:
    Total sales volume (tons
     in thousands)                     558       152       916         232
    Sales price per ton            $325.17   $321.78   $322.48     $306.91
    Asphalt margin per ton (18)     $46.53    $24.55    $48.16      $(1.97)
    Capital expenditures            $1,024      $297    $1,160        $368




                                     For the Three        For the Six
    RETAIL SEGMENT                   Months Ended         Months Ended
                                       June 30,             June 30,
                                    2007     2006       2007        2006
                               (dollars in thousands, except per gallon data)
    STATEMENTS OF OPERATIONS
     DATA:
    Net sales                     $105,825  $86,815  $191,664     $159,430
    Operating costs and expenses:
        Cost of sales (17)          88,028   71,456   157,325      130,423
        Selling, general and
         administrative expenses    15,917   13,030    31,239       25,480
        Depreciation and
         amortization                1,140    1,110     2,132        2,264
            Total operating costs
             and expenses          105,085   85,596   190,696      158,167
    Gain on disposition of assets      121        -        52            -
    Operating income                  $861   $1,219    $1,020       $1,263

    KEY OPERATING STATISTICS:
    Number of stores (end of
     period)                           308      167       308          167
    Fuel sales (thousands of
     gallons)                       19,159   17,450    38,026       34,583
    Fuel sales (thousands of
     gallons per site per
     month) (19)                        31       35        31           35
    Fuel margin (cents per
     gallon) (20)                     20.5     17.4      20.1         17.3
    Fuel sales price (dollars
     per gallon) (21)                $3.01    $2.72     $2.67        $2.56
    Merchandise sales              $48,069  $36,968   $90,109      $69,382
    Merchandise sales (per
     site per month) (19)               78       74        73           69
    Merchandise margin (22)          28.9%    31.3%     29.6%        32.2%
    Capital expenditures            $1,498   $1,951    $1,977       $2,174


    (1)  Includes corporate headquarters selling, general and administrative
         expenses of $130 and $95 for the three months ended June 30, 2007 and
         2006, respectively, and $217 and $222 for the six months ended
         June 30, 2007 and 2006, respectively, which are not allocated to our
         three operating segments.

    (2)  Includes corporate depreciation and amortization of $201 and $497 for
         the three months ended June 30, 2007 and 2006, respectively, and $435
         and $1,021 for the six months ended June 30, 2007 and 2006,
         respectively, which are not allocated to our three operating
         segments.

    (3)  Gain on disposition of assets reported in the three and six months
         ended June 30, 2007 reflects primarily the recognition of $2,525 and
         $3,480, respectively, of deferred gain recorded in connection with
         the HEP transaction.  Gain on disposition of assets reported in the
         three and six months ended June 30, 2006 reflects primarily the
         $52,500 pre-tax gain on disposition of assets, recorded in connection
         with the Amdel and White Oil transaction and the recognition of
         $2,279 and $5,165, respectively, of deferred gain recorded in
         connection with the HEP transaction.

    (4)  Interest expense for the six months ended June 30, 2006, includes
         $3,000 prepayment premium and $3,894 of unamortized debt issuance
         costs written off as a result of the prepayment of the $100,000 term
         loan in January 2006.

    (5)  The following table provides a reconciliation of net income under
         United States generally accepted accounting principles ("GAAP") to
         adjusted net income utilized in determining earnings per common
         share, excluding the after-tax gain on disposition of assets and the
         after-tax interest expense related to the prepayment of debt.
         Adjusted net income is not a recognized measurement under GAAP,
         however, the amounts included in adjusted net income are calculated
         based on amounts included in our consolidated financial statements.
         Our management believes that the presentation of adjusted net income
         and earnings per common share, excluding these after-tax items, is
         useful to investors because it provides a more meaningful measurement
         of operating performance for evaluation of our Company's results and
         for comparison to other companies in our industry.


                                       Three Months Ended   Six Months Ended
                                              June 30,           June 30,
                                           2007     2006     2007      2006
                            (dollars in thousands, except earnings per share)
    Net income                           $95,613  $43,091  $131,178  $97,255
    Plus:  Interest expense related to
     prepayment of debt, net of tax            -        -         -    4,240
    Less:  Gain on disposition of
     assets, net of tax                   (1,540)  (1,403)   (2,128) (35,690)
    Adjusted net income                   94,073   41,688   129,050   65,805

    Weighted average common equivalent
     shares outstanding                   46,758   46,733    46,758   46,732
    Earnings per share, excluding
     after-tax gain on disposition of
     assets and interest expense
     related to prepayment of debt         $2.01     $.89     $2.76    $1.41



    (6)  Adjusted EBITDA represents earnings (net income) before minority
         interest in income of subsidiaries, income tax expense, interest
         expense, depreciation and amortization, and is exclusive of 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 because it is frequently
         used by securities analysts, investors and other interested parties
         in the evaluation of companies in our industry.  In addition, our
         management believes that Adjusted EBITDA is useful in evaluating our
         operating performance compared to that of other companies in our
         industry because the calculation of Adjusted EBITDA generally
         eliminates the effects of minority interest in income of
         subsidiaries, income tax expense, interest expense, gain on
         disposition of assets and the accounting effects of capital
         expenditures and acquisitions, items which may vary for different
         companies for reasons unrelated to overall operating performance.

         Adjusted EBITDA has limitations as an analytical tool, and you should
         not consider it in isolation, or as a substitute for analysis of our
         results as reported under GAAP.  Some of these limitations are:

           -- Adjusted EBITDA does not reflect our cash expenditures or future
              requirements for capital expenditures or contractual
              commitments;

           -- Adjusted EBITDA does not reflect the interest expense or the
              cash requirements necessary to service interest or principal
              payments on our debt;

           -- Adjusted EBITDA does not reflect the prior claim that minority
              stockholders have on the income generated by non-wholly-owned
              subsidiaries;

           -- Adjusted EBITDA does not reflect changes in or cash requirements
              for our working capital needs; and

           -- Our calculation of Adjusted EBITDA may differ from the "EBITDA"
              calculations of other companies in our industry, limiting its
              usefulness as a comparative measure.

         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 to Adjusted EBITDA for the
         three and six months ended June 30, 2007 and 2006, respectively:

                                        For the Three        For the Six
                                         Months Ended        Months Ended
                                            June 30,            June 30,
                                        2007      2006       2007      2006
                                               (dollars in thousands)
    Net income                        $95,613   $43,091   $131,178   $97,255
        Minority interest in income
         of subsidiaries                6,005     2,229      7,881     5,009
        Income tax expense             59,650    25,607     81,621    58,133
        Interest expense               11,669     1,349     23,087    10,396
        Depreciation and
         amortization                  11,153     5,408     25,595    10,931
        Gain on disposition
         of assets                     (2,525)   (2,279)    (3,480)  (57,665)
    Adjusted EBITDA                  $181,565   $75,405   $265,882  $124,059


    (7)  Includes corporate capital expenditures of $305 and $57 for the three
         months ended June 30, 2007 and 2006, respectively, and $427 and
         $76 for the six months ended June 30, 2007 and 2006, respectively,
         which are not allocated to our other three operating segments.

    (8)  Net sales include intersegment sales to our asphalt and retail
         segments at prices which approximate wholesale market price.  These
         intersegment sales are eliminated through consolidation of our
         financial statements. Net sales for the three and the six months
         ended June 30, 2006, includes $3,300 for the sale of sulfur credits.

    (9)  The non-integrated marketing sales volume represents refined products
         sales to our wholesale marketing customers located in our
         non-integrated region.  The refined products we sell in this region
         are obtained from third-party suppliers.  The non-integrated
         marketing margin represents the margin between the net sales and cost
         of sales attributable to our non-integrated refined products sales
         volume, expressed on a per barrel basis.

    (10) Refinery operating margin is a per barrel measurement calculated by
         dividing the margin between net sales  (exclusive of sale of sulfur
         credits from the Big Spring refinery) and cost of sales 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.  Alon compares its refinery operating
         margins to these crack spreads to assess our operating performance
         relative to other participants in our industry.

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

    (12) A 3/2/1 crack spread in a given region is calculated assuming that
         three barrels of crude oil are converted, or cracked, into two
         barrels of gasoline and one barrel of diesel.  Alon calculates the
         Gulf Coast 3/2/1 crack spread using the market values of Gulf Coast
         conventional gasoline and low-sulfur diesel and the market value of
         WTI crude oil.  Alon calculates the Group 3/2/1 crack spread using
         the market values of Group III conventional gasoline and low-sulfur
         diesel and the market value of WTI crude oil.  Alon calculates the
         West Coast 3/2/1 crack spread using the market values of West Coast
         LA CARBOB pipeline gasoline and LA ultra low-sulfur pipeline diesel
         and the market value of WTI crude oil.

    (13) 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.

    (14) Total refinery throughput represents the total barrels per day of
         crude oil and blendstock inputs in the refinery production process.

    (15) Total refinery production represents the barrels per day of various
         finished products produced from processing crude and other refinery
         feedstocks through the crude units and other conversion units at the
         refinery.

    (16) Refinery utilization represents average daily crude oil throughput
         divided by crude oil capacity, excluding planned periods of downtime
         for maintenance and turnarounds.

    (17) Cost of sales includes intersegment purchases of asphalt blends and
         motor fuels from our refining and marketing segment at prices which
         approximate wholesale market prices.  These intersegment purchases
         are eliminated through consolidation of our financial statements.

    (18) 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.

    (19) Fuel and merchandise sales per site were calculated using 206 stores.
         We added 102 stores with the acquisition of Skinny's, Inc. on
         June 29, 2007, which were excluded from the calculation.

    (20) 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.

    (21) Fuel sales price per gallon represents the average sales price for
         motor fuels sold through our retail segment.

    (22) 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.


    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
              214-269-2093
              Ruth Sheetrit
              SMG Public Relations
              011-972-547-555551

SOURCE Alon USA Energy, Inc.