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

DALLAS, Aug. 7 /PRNewswire-FirstCall/ -- Alon USA Energy, Inc. ("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