Alon USA Energy, Inc.

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Alon USA Reports Second Quarter Results

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Declares Quarterly Cash Dividend

Company schedules conference call for August 6, 2009 at 10:00 A.M. Eastern

DALLAS, Aug. 5 /PRNewswire-FirstCall/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the quarter and six months ended June 30, 2009. Net loss for the second quarter of 2009 was ($15.3) million, or ($0.33) per share, compared to net income of $18.2 million, or $0.38 per share, for the same period last year. Excluding special items, Alon recorded a net loss of ($14.4) million, or ($0.31) per share, for the second quarter of 2009, compared to net loss of ($59.7) million, or ($1.27) per share, for the same period last year.

Net income for the six months ended June 30, 2009, was $2.0 million, or $0.04 per share, compared to net loss of ($15.4) million, or ($0.33) per share, for the six months ended June 30, 2008. Excluding special items, Alon recorded net income of $3.0 million, or $0.06 per share, for the six months ended June 30, 2009, compared to net loss of ($84.9) million, or ($1.81) per share, for the same period last year.

Jeff Morris, Alon's President and CEO, commented, "We generated cash flow from operating activities of $177.4 million during the second quarter of 2009. This was achieved mainly through $133.6 million of net proceeds from the successful unwind and liquidation of the heating oil crack spread hedge that was put in place at the time of the Krotz Springs refinery acquisition. With the liquidation of the heating oil crack spread hedge, we were able to significantly reduce our Krotz Springs refinery debt by approximately 50%. During the second quarter of 2009, we recognized an overall debt net of cash reduction of $193.2 million.

"We are very pleased that our asphalt segment generated an asphalt margin on a cash basis of $65.43 per ton for the second quarter of 2009, almost double the margin from the same period last year. We are excited about the potential to expand our blended asphalt business. Also during the second quarter, we put into service a naphtha hydrotreater unit at our California refineries which brings our finished fuels production to over 42%.

"We are pleased to report we have extended the maturity date of our $240.0 million revolving credit facility with an original maturity date of January 1, 2010 to January 1, 2013.

"Our second quarter 2009 results reflect the impact of industry wide declines in light product crack spreads and the reduction in the sweet/sour and light/heavy spreads on crude oil, both of which negatively impacted the operating margins at our refineries. Last year, the Big Spring refinery ceased operations on February 18, 2008 due to a fire and restarted in a hydroskimming mode on April 5, 2008. Thus, light product yields at our Big Spring refinery were down significantly for the second quarter of 2008. Additionally, we were reducing throughput at our California refineries in 2008 in an effort to maximize the refining economics of the refinery in response to the escalating cost of crude oil which had a WTI average price of $124.00 per barrel for the second quarter of 2008."

SECOND QUARTER 2009

Special items for the second quarter of 2009 included an after-tax loss of ($1.0) million recognized on disposition of assets. Special items for the second quarter of 2008 included after-tax losses of ($5.5) million incurred for costs associated with the Big Spring refinery fire and after-tax gains of $57.2 million recognized from the involuntary conversion of assets due to the Big Spring refinery fire and $26.3 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 ("HEP transaction").

Refinery operating margin at the Big Spring refinery was $5.37 per barrel for the second quarter of 2009 compared to ($7.97) per barrel for the same period in 2008. The Big Spring refinery operated in a hydroskimming mode in the second quarter of 2008 due to the fire, which resulted in lower refinery light product yields. Light product yields were approximately 54% for the second quarter of 2008 and 80% for the second quarter of 2009. Refinery operating margin at the California refineries was $2.47 per barrel for the second quarter of 2009 compared to ($6.23) per barrel for the same period in 2008. This increase primarily resulted from a 52% decrease in WTI prices from an average of $124.00 per barrel in the second quarter of 2008 to an average of $59.54 per barrel in the second quarter of 2009. The Krotz Springs refinery operating margin for the second quarter of 2009 was $5.85 per barrel.

The combined refineries throughput for the second quarter of 2009 averaged 159,856 barrels per day ("bpd"), consisting of an average of 61,573 bpd at the Big Spring refinery, an average of 39,825 bpd at the California refineries and an average of 58,458 bpd at the Krotz Springs refinery compared to a combined average of 70,244 bpd in the second quarter of 2008, consisting of an average of 32,390 bpd at the Big Spring refinery and an average of 37,854 bpd at the California refineries. The Big Spring refinery had higher throughput in the second quarter of 2009 compared to the second quarter of 2008 primarily due to last year's fire.

The average 3/2/1 Gulf Coast crack spread for the second quarter of 2009 was $8.30 per barrel compared to $12.95 per barrel for the same period in 2008. The average 2/1/1 Gulf Coast high sulfur diesel crack spread for the second quarter of 2009 was $6.63 per barrel compared to $14.06 per barrel for the second quarter of 2008. Additionally, the average 3/2/1 West Coast crack spread for the second quarter of 2009 was $14.48 per barrel compared to $23.28 per barrel for the second quarter of 2008.

Asphalt margins in the second quarter of 2009 increased to $50.97 per ton compared to $35.76 per ton in the second quarter of 2008, primarily due to lower crude oil costs. Impacting the asphalt margin in the second quarter of 2009 was a charge to cost of goods sold of $14.46 per ton primarily due to the sale of winter fill inventories. The average blended asphalt sales price decreased 14.5% from $464.74 per ton in the second quarter of 2008 to $397.35 per ton in the second quarter of 2009 and the average non-blended asphalt sales price decreased 27.8% from $200.88 per ton in the second quarter of 2008 to $145.04 per ton in the second quarter of 2009. The percentage decrease in asphalt sales price for both blended and non-blended asphalt was less than the 52% decrease in WTI prices for the same periods.

YEAR-TO-DATE 2009

Special items for the first half of 2009 included an after-tax loss of ($1.0) million recognized on disposition of assets. Special items for the first half of 2008 included after-tax losses of ($15.3) million incurred for costs associated with the Big Spring refinery fire and after-tax gains of $57.2 million recognized from the involuntary conversion of assets due to the Big Spring refinery fire and $27.6 million recognized primarily from the disposition of assets in connection with the HEP transaction.

Refinery operating margin at the Big Spring refinery was $8.83 per barrel for the first half of 2009 compared to ($1.08) 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. The Big Spring refinery shut down operations from February 18, 2008 until April 5, 2008 due to the fire, and operated in a hydroskimming mode in the second quarter of 2008, which resulted in lower refinery light product yields. Light product yields were approximately 81% for the first half of 2009 and 66% for the first half of 2008. Refinery operating margin at the California refineries was $3.99 per barrel for the first half of 2009 compared to ($4.03) per barrel for the same period in 2008. This increase primarily resulted from a 54% decrease in WTI prices from $111.00 per barrel in the first half of 2008 to $51.36 per barrel in the first half of 2009. The Krotz Springs refinery operating margin for the first half of 2009 was $8.91 per barrel.

The combined refineries throughput for the first half of 2009 averaged 153,411 bpd, consisting of an average of 62,987 bpd at the Big Spring refinery, an average of 34,325 bpd at the California refineries and an average of 56,099 bpd at the Krotz Springs refinery compared to a combined average of 68,462 bpd in the first half of 2008, consisting of an average of 30,830 bpd at the Big Spring refinery and an average of 37,632 bpd at the California refineries. The Big Spring refinery had higher throughput in the first half of 2009 compared to the first half of 2008 primarily due to last year's fire at the Big Spring refinery.

The average 3/2/1 Gulf Coast crack spread for the first half of 2009 was $8.97 per barrel compared to $11.19 per barrel for the same period in 2008. The average 2/1/1 Gulf Coast high sulfur diesel crack spread for the first half of 2009 was $8.04 per barrel compared to $11.79 per barrel for the first half of 2008. Additionally, the average 3/2/1 West Coast crack spread for the first half of 2009 was $16.19 per barrel compared to $19.91 per barrel for the first half of 2008.

Asphalt margins in the first half of 2009 were $15.33 per ton compared to $38.51 per ton in the first half of 2008. Excluding a charge to cost of goods sold of $65.11 per ton in the first half of 2009 due to a build-up of winter fill inventories that will be sold during the upcoming third quarter, asphalt margins for the first half of 2009 would have been $80.44 per ton. The average blended asphalt sales price decreased 15.4% from $437.47 per ton in the first half of 2008 to $369.93 per ton in the first half of 2009 and the average non-blended asphalt sales price decreased 25.6% from $182.26 per ton in the first half of 2008 to $135.54 per ton in the first half of 2009. The percentage decrease in asphalt sales price for both blended and non-blended asphalt was less than the 54% decrease in WTI prices for the same periods.

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 15, 2009 to stockholders of record at the close of business on August 31, 2009.

CONFERENCE CALL

The Company has scheduled a conference call for Thursday, August 6, 2009, at 10:00 a.m. Eastern, to discuss the second quarter 2009 results. To access the call, please dial 877-941-6009, or 480-629-9770, 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 August 20, 2009, and may be accessed by calling 800-406-7325, or 303-590-3030, for international callers, and using the passcode 4106203#. 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 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 primarily in West Texas and New Mexico substantially under the 7-Eleven and FINA brand names and supplies motor fuels to these stores primarily from its Big Spring refinery. In addition, Alon markets under the FINA branded name to approximately 700 additional 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 -       For the Three Months   For the Six Months
     FINANCIAL DATA                      Ended                Ended
     (ALL INFORMATION IN THIS           June 30,             June 30,
     PRESS RELEASE, EXCEPT FOR          --------             --------
     BALANCE SHEET DATA AS OF       2009       2008       2009      2008
     DECEMBER 31, 2008              ----       ----       ----      ----
     IS UNAUDITED)             (dollars in thousands,  (dollars in thousands,
                               except per share data)  except per share data)

     STATEMENT OF
      OPERATIONS DATA:
     Net sales (1)             $1,106,398  $1,244,671  $1,828,578  $2,265,434
     Operating costs and
      expenses:
       Cost of sales              988,318   1,252,392   1,528,048   2,221,389
       Direct operating
        expenses                   71,345      40,546     140,209      82,835
       Selling, general
        and administrative
        expenses (2)               31,581      27,802      63,496      56,656
       Net costs
        associated with
        fire (3)                        -       9,374           -      25,836
       Depreciation and
        amortization (4)           23,561      13,507      45,651      27,252
                                   ------      ------      ------      ------
         Total operating
          costs and expenses    1,114,805   1,343,621   1,777,404   2,413,968
                                ---------   ---------   ---------   ---------
     Gain on involuntary
      conversion of
      assets (5)                        -      96,588           -      96,588
     Gain (loss) on
      disposition of
      assets (6)                   (1,600)     42,935      (1,600)     45,246
                                  -------      ------     -------      ------
     Operating income (loss)      (10,007)     40,573      49,574      (6,700)
     Interest expense (7)         (21,023)    (10,736)    (49,279)    (21,392)
     Equity earnings of
      investees                     8,376       1,292       8,373       1,608
     Other income, net                191         373         448       1,118
                                      ---         ---         ---       -----
     Income (loss) before
      income tax
      expense (benefit),
      non-controlling
      interest in income
      (loss) of
      subsidiaries and
      accumulated
      dividends on
      preferred stock of
      subsidiary                  (22,463)     31,502       9,116     (25,366)
     Income tax expense
      (benefit)                    (7,549)     11,860       3,446      (9,233)
                                   -------     ------       -----     -------
     Income (loss) before
      non-controlling
      interest in income
      (loss) of
      subsidiaries and
      accumulated
      dividends on
      preferred stock of
      subsidiary                  (14,914)     19,642       5,670     (16,133)
     Non-controlling
      interest in income
      (loss) of
      subsidiaries                 (1,724)      1,415        (641)       (782)
     Accumulated
      dividends on
      preferred stock of
      subsidiary                    2,150           -       4,300           -
                                    -----         ---       -----         ---
     Net income (loss)           $(15,340)    $18,227      $2,011    $(15,351)
                                 ========     =======      ======    ========
     Earnings (loss) per
      share, basic                 $(0.33)      $0.39       $0.04      $(0.33)
                                   ======       =====       =====      ======
     Weighted average
      shares outstanding,
      basic (in thousands)         46,809      46,782      46,807      46,782
                                   ======      ======      ======      ======
     Earnings (loss) per
      share, diluted               $(0.33)      $0.38       $0.04      $(0.33)
                                   ======       =====       =====      ======
     Weighted average
      shares outstanding,
      diluted (in
      thousands)                   46,809      46,802      46,810      46,782
                                   ======      ======      ======      ======

     Cash dividends per share       $0.04       $0.04       $0.08       $0.08
                                    =====       =====       =====       =====
     CASH FLOW DATA: (8)
     Net cash provided
      by (used in):
       Operating activities      $177,437      $7,548    $296,964    $(42,076)
       Investing activities       (29,705)    (67,871)    (44,714)    (51,003)
       Financing activities      (122,548)     43,084    (227,227)     38,360
     OTHER DATA:
     Adjusted net income (9)     $(14,371)   $(59,654)     $2,980    $(84,852)
     Earnings (loss) per
      share, excluding
      net costs
      associated with
      fire, net of tax,
      after-tax gain on
      involuntary
      conversion of
      assets and
      after-tax gain
      (loss) on
      disposition of
      assets (9)                   $(0.31)     $(1.27)      $0.06      $(1.81)
     Adjusted EBITDA (10)          23,721      12,810    $105,646     (21,968)
     Capital expenditures (11)     18,887      10,342      29,244      19,524
     Capital expenditures to
      rebuild the Big
      Spring refinery               7,146     160,341      39,281     160,341
     Capital expenditures for
      turnaround and
      chemical catalyst             2,951         460      10,314       2,069


                                                         June 30, December 31,
                                                           2009       2008
                                                           ----       ----
     BALANCE SHEET DATA (end of period):
     Cash and cash equivalents                            $43,477     $18,454
     Working capital                                       52,815     250,384
     Total assets                                       2,272,539   2,413,433
     Total debt                                           834,355   1,103,569
     Total  equity                                        540,022     536,867


    REFINING AND UNBRANDED          For the Three Months  For the Six Months
     MARKETING SEGMENT                     Ended                Ended
                                           June 30,            June 30,
                                          --------             --------
                                       2009       2008     2009       2008
                                       ----       ----     ----       ----
                                   (dollars in thousands, except per barrel
                                          data and pricing statistics)
    STATEMENTS OF
     OPERATIONS DATA:
    Net sales (12)                $897,519  $869,559  $1,484,447  $1,641,598
    Operating costs and
     expenses:
      Cost of sales                825,935   917,689   1,248,929   1,673,646
      Direct operating
       expenses                     61,638    30,668     120,009      61,141
      Selling, general and
       administrative
       expenses                      7,239     3,679      14,566       8,068
      Net costs associated
       with fire (3)                     -     9,374           -      25,836
      Depreciation and
       amortization                 19,459     9,210      37,496      18,840
                                    ------     -----      ------      ------
        Total operating costs
         and expenses              914,271   970,620   1,421,000   1,787,531
                                   -------   -------   ---------   ---------
    Gain on involuntary
     conversion of assets (5)            -    96,588           -      96,588
    Gain (loss) on
     disposition of assets (6)      (1,600)   42,935      (1,600)     45,246
                                   -------    ------      -------     ------
    Operating income (loss)       $(18,352)  $38,462     $61,847     $(4,099)
                                  ========   =======     =======      =======

    KEY OPERATING
     STATISTICS:
    Total sales volume (bpd)       132,286    55,727     127,400      59,717
    Per barrel of
     throughput:
      Refinery operating
       margin - Big Spring (13)      $5.37    $(7.97)      $8.83      $(1.08)
      Refinery operating
       margin - CA Refineries (13)    2.47     (6.23)       3.99       (4.03)
      Refinery operating
       margin - Krotz Springs (13)    5.85       N/A        8.91         N/A
      Refinery direct
       operating expense -
       Big Spring (14)                4.70      3.98        4.14        4.91
      Refinery direct
       operating expense - CA
       Refineries (14)                3.80      5.50        4.65        4.91
      Refinery direct
       operating expense -
       Krotz Springs (14)             4.04       N/A        4.32         N/A
    Capital expenditures            16,925     9,921      26,323      17,624
    Capital expenditures to
     rebuild the Big Spring
     refinery                        7,146   160,341      39,281     160,341
    Capital expenditures
     for turnaround and
     chemical catalyst               2,951       460      10,314       2,069

    PRICING STATISTICS:
    WTI crude oil (per
     barrel)                        $59.54   $124.00      $51.36     $111.00
    WTS crude oil (per
     barrel)                         58.15    119.38       50.20      106.35
    MAYA crude oil (per
     barrel)                         53.89    103.08       46.28       92.11
    Crack spreads (3/2/1)
     (per barrel):
      Gulf Coast (15)                $8.30    $12.95       $8.97      $11.19
      Group III (15)                  9.34     13.80        9.53       11.95
      West Coast (15)                14.48     23.28       16.19       19.91
    Crack spreads (6/1/2/3)
     (per barrel):
      West Coast (15)                $2.59    $(1.69)      $4.39      $(1.28)
    Crack spreads (2/1/1)
     (per barrel):
      Gulf Coast high sulfur
       diesel (15)                   $6.63    $14.06       $8.04      $11.79
    Crude oil differentials
     (per barrel):
      WTI less WTS (16)              $1.39     $4.62       $1.16       $4.65
      WTI less MAYA (16)              5.65     20.92        5.08       18.89
    Product price (dollars
     per gallon):
      Gulf Coast unleaded
       gasoline                     $1.638    $3.067      $1.429      $2.749
      Gulf Coast ultra
       Low-sulfur diesel             1.569     3.648       1.451       3.229
      Group III unleaded
       gasoline                      1.674     3.100       1.454       2.774
      Group III ultra
       Low-sulfur diesel             1.571     3.644       1.441       3.233
      West Coast LA CARBOB
       (unleaded gasoline)           1.841     3.427       1.674       3.059
      West Coast LA ultra
       Low-sulfur diesel             1.606     3.665       1.478       3.232
      Natural gas (per MMBTU)         3.81     11.47        4.13       10.14

                         For the Three Months          For the Six Months
                               Ended                         Ended
                              June 30,                      June 30,
    THROUGHPUT                --------                      --------
     AND YIELD            2009          2008           2009         2008
     DATA:                ----          ----           ----         ----
    BIG SPRING        bpd      %     bpd     %      bpd     %     bpd     %
    Refinery
     throughput:
      Sour crude    50,771   82.5  27,126   83.7  53,099  84.3  26,080   84.6
      Sweet crude    7,768   12.6   4,427   13.7   7,815  12.4   3,402   11.0
      Blendstocks    3,034    4.9     837    2.6   2,073   3.3   1,348    4.4
                     -----    ---     ---    ---   -----   ---   -----    ---
    Total refinery
     throughput
     (17)           61,573  100.0  32,390  100.0  62,987 100.0  30,830  100.0
                    ======  =====  ======  =====  ====== =====  ======  =====
    Refinery
     production:
      Gasoline      26,333   43.0   8,981   28.5  27,294  43.4  11,478   37.8
      Diesel/jet    19,571   32.0   7,876   24.9  20,648  32.8   7,758   25.6
      Asphalt        6,444   10.5   5,976   18.9   5,840   9.3   4,537   14.9
      Petrochemicals 3,281    5.4     344    1.1   3,154   5.0     873    2.9
      Other          5,595    9.1   8,394   26.6   5,946   9.5   5,720   18.8
                     -----    ---   -----   ----   -----   ---   -----   ----
    Total
     refinery
     production
     (18)           61,224  100.0  31,571  100.0  62,882 100.0  30,366  100.0
                    ======  =====  ======  =====  ====== =====  ======  =====
    Refinery
     utilization
      (19)                   83.6%          45.1%         87.0%          43.0%


                         For the Three Months          For the Six Months
                                Ended                       Ended
    THROUGHPUT AND             June 30,                    June 30,
     YIELD DATA:              --------                    --------
    CALIFORNIA           2009           2008          2009          2008
     REFINERIES          ----           ----          ----          ----
                      bpd     %      bpd      %     bpd     %     bpd     %
    Refinery
     throughput:
      Medium sour
       crude        20,150   50.6  11,837   31.3  16,209  47.2  11,269   29.9
      Heavy crude   19,315   48.5  25,540   67.4  17,914  52.2  25,545   67.9
      Blendstocks      360    0.9     477    1.3     202   0.6     818    2.2
                       ---    ---     ---    ---     ---   ---     ---    ---
    Total refinery
     throughput
     (17)           39,825  100.0  37,854  100.0  34,325 100.0  37,632  100.0
                    ======  =====  ======  =====  ====== =====  ======  =====
    Refinery
     production:
      Gasoline       6,587   17.0   5,088   13.9   4,936  14.7   5,296   14.6
      Diesel/jet     9,086   23.4   8,793   23.9   7,658  22.8   8,708   23.9
      Asphalt       11,450   29.5   9,534   26.0  10,100  30.1   9,966   27.4
      Light
       unfinished       99    0.3       -    0.0     999   3.0       -    0.0
      Heavy
       unfinished   10,868   28.0  13,050   35.5   9,340  27.8  12,166   33.5
      Other            697    1.8     271    0.7     534   1.6     234    0.6
                       ---    ---     ---    ---     ---   ---     ---    ---
    Total refinery
     production
     (18)           38,787  100.0  36,736  100.0  33,567 100.0  36,370  100.0
                    ======  =====  ======  =====  ====== =====  ======  =====
    Refinery
     utilization
     (19)                    54.4%          51.6%         56.1%          50.8%


                      For the Three   For the Six
    THROUGHPUT AND     Months Ended  Months Ended
     YIELD DATA:        June 30,      June 30,
    KROTZ SPRINGS       --------      --------
                          2009          2009
                          ----          ----
                      bpd      %     bpd      %
    Refinery
     throughput:
      Light sweet
       crude        28,065   48.0  27,746   49.5
      Heavy sweet
       crude        26,362   45.1  23,240   41.4
      Blendstocks    4,031    6.9   5,113    9.1
                     -----    ---   -----    ---
    Total refinery
     throughput
     (17)           58,458  100.0  56,099  100.0
                    ======   ===== ======  =====
    Refinery
     production:
      Gasoline      27,962   47.1  26,215   46.0
      Diesel/jet    24,514   41.3  24,491   42.9
      Heavy oils     1,358    2.3   1,124    2.0
      Other          5,521    9.3   5,205    9.1
                     -----    ---   -----    ---
    Total refinery
     production
     (18)           59,355  100.0  57,035  100.0
                    ======  =====  ======  =====
    Refinery
     utilization (19)        65.5%          61.4%


    ASPHALT SEGMENT         For the Three Months    For the Six Months
                                    Ended                 Ended
                                  June 30,               June 30,
                                  --------               --------
                             2009        2008        2009         2008
                             ----        ----        ----         ----
                            (dollars in thousands, except per ton data)
    STATEMENTS OF
     OPERATIONS DATA:
    Net sales             $125,480    $177,277    $176,240     $281,217
    Operating costs
     and expenses:
      Cost of sales (20)   107,897     163,474     168,130      255,609
      Direct operating
       expenses              9,707       9,878      20,200       21,694
      Selling, general
       and administrative
       expenses              1,050         736       2,204        2,122
      Depreciation and
       amortization            542         536       1,080        1,068
                               ---         ---       -----        -----
        Total operating
         costs and
         expenses          119,196     174,624     191,614      280,493
                           -------     -------     -------      -------
    Gain (loss)
     on disposition
     of assets                   -           -           -            -
                               ---         ---         ---          ---
    Operating income
     (loss)                 $6,284      $2,653    $(15,374)        $724
                            ======      ======    ========         ====

    KEY OPERATING STATISTICS:
    Blended asphalt
     sales volume
     (tons in
     thousands) (21)           299         378         446          627
    Non-blended
     asphalt sales
     volume (tons in
     thousands) (22)            46           8          83           38
    Blended asphalt
     sales price
     per ton (21)          $397.35     $464.74     $369.93      $437.47
    Non-blended
     asphalt sales price
     per ton (22)           145.04      200.88      135.54       182.26
    Asphalt margin per
     ton (23)                50.97       35.76       15.33        38.51
    Capital expenditures      $414         $62        $576         $275


    RETAIL AND              For the Three Months    For the Six Months
     BRANDED MARKETING            Ended                   Ended
     SEGMENT                     June 30,                June 30,
                                 --------                --------
                             2009        2008        2009         2008
                             ----        ----        ----         ----
                          (dollars in thousands, except per gallon data)
    STATEMENTS OF
     OPERATIONS DATA:
    Net sales (1)         $206,461     $377,272   $373,931     $686,526
    Operating costs and
     expenses:
      Cost of sales (20)   177,548      350,666    317,029      636,041
      Selling, general
       and administrative
       expenses             23,102       23,236     46,346       46,164
      Depreciation and
       amortization          3,412        3,538      6,780        6,898
                             -----        -----      -----        -----
        Total operating
         costs and
         expenses          204,062      377,440    370,155      689,103
                           -------      -------    -------      -------
    Gain (loss)
     on disposition
     of assets                   -            -          -            -
                               ---          ---        ---          ---
    Operating income
     (loss)                 $2,399        $(168)    $3,776      $(2,577)
                            ======        =====     ======      =======

    KEY OPERATING STATISTICS:
    Integrated branded
     fuel sales
     (thousands
     of gallons) (24)       66,617       54,931    130,263      109,089
    Integrated branded
     fuel margin
     (cents per
     gallon) (24)              5.4          2.0        5.6          1.9
    Non-Integrated
     branded fuel
     sales (thousands
     of gallons) (24)        3,241       37,182      6,387       75,451
    Non-Integrated
     branded fuel
     margin (cents per
     gallon) (24)              2.2         (2.1)       4.7         (1.1)

    Number of stores
     (end of period)           306          306        306          306
    Retail fuel
     sales (thousands
     of gallons)            30,198       24,414     58,381       49,285
    Retail fuel
     sales (thousands
     of gallons
     per site per month)        33           27         32           27
    Retail fuel
     margin (cents per
     gallon) (25)             12.5         19.2       14.1         18.8
    Retail fuel
     sales price
     (dollars per
     gallon) (26)            $2.26        $3.77      $2.08        $3.43
    Merchandise sales      $70,650      $68,314   $133,262     $128,552
    Merchandise sales
     (per site per month)       76           74         73           70
    Merchandise margin (27)   30.2%        31.5%      30.7%        31.5%
    Capital expenditures      $894          $40     $1,113       $1,167

(1) Includes excise taxes on sales by the retail and branded marketing segment of $11,770 and $9,319 for the three months ended June 30, 2009 and 2008, respectively, and $22,814 and $18,973 for the six months ended June 30, 2009 and 2008, respectively. Net sales also includes royalty and related net credit card fees of $262 and $51 for the three months ended June 30, 2009 and 2008, respectively, and $351 and $127 for the six months ended June 30, 2009 and 2008, respectively.

(2) Includes corporate headquarters selling, general and administrative expenses of $190 and $151 for the three months ended June 30, 2009 and 2008, respectively, and $380 and $302 for the six months ended June 30, 2009 and 2008, respectively, which are not allocated to our three operating segments.

(3) Net costs associated with fire for the three and six months ended June 30, 2008, respectively, includes $8,374 and $20,046 of expenses incurred from pipeline commitment deficiencies, crude sale losses and other incremental costs; $1,000 and $5,000 for the three and six months ended June 30, 2008, respectively, for our third party liability insurance deductible under the insurance policy; and depreciation for the temporarily idled facilities of $790 for the six months ended June 30, 2008.

(4) Includes corporate depreciation and amortization of $148 and $223 for the three months ended June 30, 2009 and 2008, respectively, and $295 and $446 for the six months ended June 30, 2009 and 2008, respectively, which are not allocated to our three operating segments. Also included for the three and six months ended June 30, 2009 is additional depreciation attributable to the depreciation on the assets acquired in the Krotz Springs refinery acquisition in July 2008 and capital expenditures placed in service in September 2008 from the rebuild of the Big Spring refinery.

(5) Based upon the receipt of insurance proceeds of $150,000 through June 30, 2008, an involuntary gain on conversion of assets was recorded of $96,588 for the proceeds received in excess of the book value of the assets impaired of $25,330 and demolition and repair expenses of $28,082 incurred through June 30, 2008.

(6) Gain on disposition of assets reported in the three and six months ended June 30, 2008 includes the recognition of deferred gain recorded primarily in connection with the contribution of certain product pipelines and terminals to Holly Energy Partners, LP,("HEP"), in March 2005 ("HEP transaction"). A gain of $42,935 in the first half of 2008 represented all the recognition of the remaining deferred gain associated with the HEP transaction and was due to the termination of an indemnification agreement with HEP.

(7) Interest expense of $49,279 for the six months ended June 30, 2009 includes $5,715 related to the liquidation of the heating oil hedge. The remaining increase compared to interest expense for the six months ended June 30, 2008 of $21,392 is primarily due to interest on borrowings and letter of credit fees related to the Krotz Springs refinery acquisition.

(8) Cash provided by operating activities for the three months ended June 30, 2009 includes cash from the liquidation proceeds from the heating oil crack spread hedge of $133,581 and cash provided by operating activities for the first half of 2009 includes cash from the liquidation proceeds from 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 three months ended June 30, 2009 includes repayments on long-term debt and revolving credit facilities of $117,988 sourced primarily from the liquidation proceeds from the heating oil crack spread hedge and cash used in financing activities for the first half of 2009 includes repayments on long-term debt and revolving credit facilities of $219,214 sourced primarily from the liquidation proceeds from the heating oil crack spread hedge and proceeds from the receipt of income tax receivables.

(9) 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 net costs associated with fire, after-tax gain on involuntary conversion of assets and after-tax gain (loss) on disposition of assets. 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.


                                   For the Three Months   For the Six Months
                                      Ended June 30,        Ended June 30,
                                      --------------        --------------
                                     2009       2008       2009       2008
                                     ----       ----       ----       ----
                                         (dollars in thousands, except
                                              earnings per share)
    Net income (loss)              $(15,340)   $18,227     $2,011   $(15,351)
      Plus:  Net costs associated
       with fire, net of tax              -      5,541          -     15,290
      Plus:  Loss on disposition
       of assets, net of tax            969          -        969          -
      Less:  Gain on involuntary
       conversion of assets, net
       of tax                             -    (57,163)         -    (57,163)
      Less:  Gain on disposition
       of assets, net of tax              -    (26,259)         -    (27,628)
                                        ---   --------        ---   --------
    Adjusted net income (loss)     $(14,371)  $(59,654)    $2,980   $(84,852)
                                    --------   --------     ------   --------

    Weighted average shares
     outstanding (in thousands)      46,809     46,782     46,807     46,782
                                     ======     ======     ======     ======
    Earnings (loss) per share,
     excluding net costs
     associated with fire, net
     of tax, after-tax gain on
     involuntary conversion of
     assets and after-tax gain
     (loss) on disposition of
     assets                          $(0.31)    $(1.27)     $0.06     $(1.81)
                                     ======     ======      =====     ======

(10) 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 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 and six months ended June 30, 2009 and 2008, respectively:


                                      For the Three      For the Six Months
                                       Months Ended             Ended
                                        June 30,              June 30,
                                        --------              --------
                                     2009       2008       2009       2008
                                     ----       ----       ----       ----
                                            (dollars in thousands)
    Net income (loss)             $(15,340)   $18,227     $2,011   $(15,351)
    Non-controlling interest in
     income of subsidiaries
     (including accumulated
     dividends on preferred stock
     of subsidiary)                    426      1,415      3,659       (782)
    Income tax expense (benefit)    (7,549)    11,860      3,446     (9,233)
    Interest expense                21,023     10,736     49,279     21,392
    Depreciation and amortization   23,561     13,507     45,651     27,252
    (Gain) loss on disposition of
     assets                          1,600    (42,935)     1,600    (45,246)
                                     -----   --------      -----   --------
    Adjusted EBITDA                $23,721    $12,810   $105,646   $(21,968)
                                   =======    =======   ========   ========

Adjusted EBITDA for the three and six months ended June 30, 2008 includes a gain on the involuntary conversion of assets of $96,588 representing the insurance proceeds received with respect to property damage resulting from the Big Spring refinery fire in excess of the net book value of assets impaired of $25,330 and the demolition and repair expenses of $28,082 incurred through June 30, 2008. Adjusted EBITDA also includes net costs associated with fire at the Big Spring refinery of $9,374 and $25,836 for the three and six months ended June 30, 2008, respectively.

(11) Includes corporate capital expenditures of $654 and $319 for the three months ended June 30, 2009 and 2008, respectively, and $1,232 and $458 for the six months ended June 30, 2009 and 2008, respectively, which are not allocated to our three operating segments.

(12) Net sales include intersegment sales to our asphalt and retail and branded marketing segments at prices which approximate wholesale market prices. These intersegment sales are eliminated through consolidation of our financial statements.

(13) 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 losses of ($868) for the Big Spring refinery for the three and six months ended June 30, 2009. There were unrealized hedging losses of ($75) and gains of $58 for the California refineries for the three and six months ended June 30, 2009, respectively, and unrealized hedging losses of ($3,186) and gains of $1,602 for the California refineries for the three and six months ended June 30, 2008, respectively. There were unrealized hedging gains of $2,373 and $20,399 for the Krotz Springs refinery for the three and six months ended June 30, 2009. Additionally, realized gains related to the unwind of the heating oil crack spread hedge of $133,581 were excluded from the Krotz Springs refinery margin for the three and six months ended June 30, 2009.

(14) 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.

(15) 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 CARBOB 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 CARBOB 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 No. 2 diesel and the market value of WTI crude oil.

(16) 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.

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

(18) 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 three and six months ended June 30, 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.

(19) 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 three and six months ended June 30, 2008 is due to the fire on February 18, 2008 and the re-start of the crude unit in a hydroskimming mode on April 5, 2008.

(20) 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.

(21) Blended asphalt represents base asphalt that has been blended with other materials necessary to sell the asphalt as a finished product.

(22) Non-blended asphalt represents base material asphalt and other components that require additional blending before being sold as a finished product.

(23) 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.

(24) Marketing sales volume represents branded fuel sales to our wholesale marketing customers located in both our integrated and non-integrated regions. The branded fuels we sell in our integrated region are primarily supplied by the Big Spring refinery. Due to the fire on February 18, 2008 at the Big Spring refinery, more fuel was obtained from third-party suppliers during the three and six months ended June 30, 2008. The branded fuels we sell in the non-integrated region are obtained from third-party suppliers. The marketing margin represents the margin between the net sales and cost of sales attributable to our branded fuel sales volume, expressed on a cents-per-gallon basis.

(25) 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.

(26) Retail fuel sales price per gallon represents the average sales price for motor fuels sold through our retail convenience stores.

(27) 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 convenience store industry to measure in-store, or non-fuel, operating results.

SOURCE Alon USA Energy, Inc.