UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2013

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM __________TO __________

Commission file number: 333-163942

ALON REFINING KROTZ SPRINGS, INC.

(Exact name of Registrant as specified in its charter)

___________________________________________________

Delaware	74-2849682
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

12700 Park Central Dr., Suite 1600, Dallas, Texas 75251

(Address of principal executive offices) (Zip Code)

(972) 367-3600

(Registrant’s telephone number, including area code)

___________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
	(Do not check if a smaller reporting company)

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The registrant is a subsidiary of Alon USA Energy, Inc., a Delaware corporation, and there is no market for the registrant's common stock. As of May 1, 2013, 50,111 shares of the registrant's Class A Common stock, par value $0.01, and 90 shares of the registrant's Class B Common stock, par value $0.01, were outstanding.

The aggregate market value for the registrant's common stock held by non-affiliates as of March 31, 2013, the last day of the registrant's most recently completed fiscal quarter, was $0.

The Registrant meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by General Instruction H(2).

PART I. FINANCIAL INFORMATION	1
ITEM 1. FINANCIAL STATEMENTS	1
BALANCE SHEETS	1
STATEMENTS OF OPERATIONS	2
STATEMENTS OF COMPREHENSIVE INCOME	3
STATEMENTS OF CASH FLOWS	4
NOTES TO FINANCIAL STATEMENTS	5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
FORWARD-LOOKING STATEMENTS	17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18
ITEM 4. CONTROLS AND PROCEDURES	18
PART II. OTHER INFORMATION	19
ITEM 6. EXHIBITS	19
SIGNATURES	20
EXHIBITS	21
EX-10.1 AMENDMENT TO THE AMENDED AND RESTATED SUPPLY AND OFFTAKE AGREEMENT BETWEEN J. ARON & COMPANY AND ALON REFINING KROTZ SPRINGS, INC.
EX-31.1 CERTIFICATION OF CEO PURSUANT TO SECTION 302
EX-31.2 CERTIFICATION OF CFO PURSUANT TO SECTION 302
EX-32.1 CERTIFICATION OF CEO AND CFO PURSUANT TO SECTION 906

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALON REFINING KROTZ SPRINGS, INC.

BALANCE SHEETS

(dollars in thousands except per share data)

	March 31, 2013			December 31, 2012
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	948		$	1,107
Accounts and other receivables, net	40,067			38,412
Inventories	56,150			44,796
Prepaid expenses and other current assets	1,763			2,354
Total current assets	98,928			86,669
Property, plant and equipment, net	340,465			343,321
Other assets, net	23,300			22,368
Total assets	$	462,693		$	452,358
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	339,381		$	380,329
Accrued liabilities	21,073			12,499
Total current liabilities	360,454			392,828
Other non-current liabilities	34,612			29,436
Long-term debt	212,180			211,573
Total liabilities	607,246			633,837
Commitments and contingencies (Note 11)
Stockholders’ equity:
Class A Common stock, par value $0.01, 75,000 shares authorized: 50,111 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively	—			—
Class B Common stock, par value $0.01, 1,000 shares authorized; 90 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively	—			—
Additional paid-in capital	167,656			167,656
Accumulated other comprehensive income, net of income tax	10,919			1,514
Retained deficit	(323,128		)	(350,649		)
Total stockholders' equity	(144,553		)	(181,479		)
Total liabilities and stockholders' equity	$	462,693		$	452,358

The accompanying notes are an integral part of these financial statements.

1

ALON REFINING KROTZ SPRINGS, INC.

STATEMENTS OF OPERATIONS

(unaudited, dollars in thousands)

	For the Three Months Ended
	March 31,
	2013			2012
Net sales	$	620,281		$	729,375
Operating costs and expenses:
Cost of sales	551,156			694,662
Losses on commodity swaps	24			45,665
Direct operating expenses	23,267			23,865
Selling, general and administrative expenses	2,098			1,844
Depreciation and amortization	6,026			5,962
Total operating costs and expenses	582,571			771,998
Operating income (loss)	37,710			(42,623		)
Interest expense	(10,196		)	(10,890		)
Other income (loss), net	7			(8,149		)
Income (loss) before income tax expense	27,521			(61,662		)
Income tax expense	—			—
Net income (loss)	$	27,521		$	(61,662	)

The accompanying notes are an integral part of these financial statements.

2

ALON REFINING KROTZ SPRINGS, INC.

STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, dollars in thousands)

	For the Three Months Ended
	March 31,
	2013			2012
Net income (loss)	$	27,521		$	(61,662	)
Other comprehensive income (loss), before tax:
Commodity contracts designated as cash flow hedges:
Unrealized holding gain (loss) arising during period	9,381			(40,522		)
Less: reclassification to earnings - losses on commodity swaps	(24		)	(3,662		)
Net gain (loss)	9,405			(36,860		)
Total other comprehensive income (loss), before tax	9,405			(36,860		)
Income tax expense related to other comprehensive income (loss)	—			—
Total other comprehensive income (loss), net of tax	9,405			(36,860		)
Comprehensive income (loss)	$	36,926		$	(98,522	)

The accompanying notes are an integral part of these financial statements.

3

ALON REFINING KROTZ SPRINGS, INC. STATEMENTS OF CASH FLOWS (unaudited, dollars in thousands)
	For the Three Months Ended
	March 31,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	27,521		$	(61,662	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization	6,026			5,962
Amortization of debt issuance costs	587			555
Amortization of original issuance discount	607			525
Unrealized losses on commodity swaps	—			40,231
Changes in operating assets and liabilities:
Accounts and other receivables, net	6,977			(757		)
Inventories	(11,354		)	(5,641		)
Prepaid expenses and other current assets	591			(461		)
Accounts payable	(40,948		)	13,635
Accrued liabilities	9,347			9,216
Other non-current liabilities	5,176			1,521
Net cash provided by operating activities	4,530			3,124
Cash flows from investing activities:
Capital expenditures	(2,262		)	(2,824		)
Capital expenditures for turnarounds and catalysts	(2,427		)	(686		)
Net cash used in investing activities	(4,689		)	(3,510		)
Net decrease in cash and cash equivalents	(159		)	(386		)
Cash and cash equivalents, beginning of period	1,107			386
Cash and cash equivalents, end of period	$	948		$	—
Supplemental cash flow information:
Cash paid for interest	$	2,636		$	2,560

The accompanying notes are an integral part of these financial statements.

4

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS

(unaudited, dollars in thousands except as noted)

(1) Basis of Presentation

(a) Basis of Presentation

The financial statements include the accounts of Alon Refining Krotz Springs, Inc. (the “Company”), a subsidiary of Alon USA Energy, Inc. ("Alon USA"). These financial statements of the Company are unaudited and have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of the Company’s management, the information included in these financial statements reflects all adjustments, consisting of normal and recurring adjustments, which are necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the operating results that may be obtained for the year ending December 31, 2013.

The balance sheet as of December 31, 2012, has been derived from the audited financial statements as of that date. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

(b) New Accounting Standards

Effective January 1, 2013, the Company adopted Accounting Standards Update (“ASU”) No. 2011- 11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities and ASU No. 2013- 01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities issued by the Financial Accounting Standards Board (“FASB”). These updates require an entity to disclose both gross information and net information of recognized derivative instruments, repurchase agreements and securities borrowing and lending transactions offset in the balance sheet. The updated guidance is to be applied retrospectively, effective January 1, 2013. The adoption concerns disclosure only and did not have any financial impact on the financial statements.

ASU No. 2013- 02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013- 02”), was issued in February 2013. This ASU does not change the current requirements for reporting net income or other comprehensive income in financial statements. However, ASU 2013- 02 requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross- reference to other disclosures required under GAAP that provide additional detail about those amounts. The adoption concerns disclosure only and did not have any financial impact on the financial statements.

(2) Operating Results and Liquidity

The Company's primary sources of liquidity are cash generated from operating activities, inventory supply and offtake arrangement, other credit lines and additional funding from Alon USA. Future operating results will depend on market factors, primarily the difference between the prices the Company receives from customers for produced products compared to the prices the Company pays to suppliers for crude oil. The Company plans to continue to operate the refinery at current or higher utilization rates as long as the refinery is able to generate cash operating margin. Management believes its current liquidity from the above described sources is adequate to operate the refinery.

The Company's refinery average throughput was 58,439 barrels per day for the three months ended March 31, 2013. Cash flows from operating activities for the three months ended March 31, 2013 was $4,530.

(3) Fair Value

The carrying amounts of the Company’s cash and cash equivalents, receivables, payables and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The reported amounts of long-term debt approximate fair value. Derivative financial instruments are carried at fair value, which is based on quoted market prices.

The Company must determine fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As required, the Company utilizes valuation

5

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(unaudited, dollars in thousands except as noted)

techniques that maximize the use of observable inputs (levels 1 and 2) and minimize the use of unobservable inputs (level 3) within the fair value hierarchy. The Company generally applies the “market approach” to determine fair value. This method uses pricing and other information generated by market transactions for identical or comparable assets and liabilities. Assets and liabilities are classified within the fair value hierarchy based on the lowest level (least observable) input that is significant to the measurement in its entirety.

The following table sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the balance sheets at March 31, 2013 and December 31, 2012, respectively:

	Quoted Prices in Active Markets For Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
As of March 31, 2013
Assets:
Commodity contracts (swaps)	$	—	$	10,919	$	—	$	10,919
Liabilities:
Commodity contracts (futures and forwards)	1,445		—		—		1,445
Fair value hedge	—		2,274		—		2,274
As of December 31, 2012
Assets:
Commodity contracts (futures and forwards)	$	386	$	—	$	—	$	386
Commodity contracts (swaps)	—		1,514		—		1,514
Liabilities:
Fair value hedge	—		346		—		346

(4) Derivative Financial Instruments

Mark to Market

Commodity Derivatives. The Company selectively utilizes commodity derivatives to manage its exposure to commodity price fluctuations and uses crude oil and refined product commodity derivative contracts to reduce risk associated with potential price changes on committed obligations. The Company does not speculate using derivative instruments. Credit risk on the Company’s derivative instruments is substantially mitigated by transacting with counterparties meeting established collateral and credit criteria.

Fair Value Hedges

Fair value hedges are used to hedge price volatility in certain refining inventories and firm commitments to purchase inventories. The level of activity for our fair value hedges is based on the level of our operating inventories. The gain or loss on a derivative instrument designated and qualifying as a fair value hedge, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, is recognized currently in income in the same period.

As of March 31, 2013, the Company has accounted for certain commodity contracts as fair value hedges with contract purchase volumes of 394 thousand barrels of crude oil with remaining contract terms through May 2019.

Cash Flow Hedges

To designate a derivative as a cash flow hedge, the Company documents at the inception of the hedge the assessment that the derivative will be highly effective in offsetting expected changes in cash flows from the item hedged. This assessment, which is updated at least quarterly, is generally based on the most recent relevant historical correlation between the derivative and the item hedged. If, during the term of the derivative, the hedge is determined to be no longer highly effective, hedge accounting is prospectively discontinued and any remaining unrealized gains or losses, based on the effective portion of the derivative at that date, are reclassified to earnings when the underlying transaction occurs.

Commodity Derivatives. As of March 31, 2013, the Company has accounted for certain commodity swap contracts as cash flow hedges with total contract purchase volumes of 4,320 thousand barrels of crude and contract sales volumes 4,320 thousand

6

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(unaudited, dollars in thousands except as noted)

barrels of refined products with a remaining contract term of nine months. During the three months ended March 31, 2013 and 2012, the Company recognized unrealized gains (losses) of $9,405 and $(36,860), respectively, related to these transactions in Other Comprehensive Income ("OCI"). There were no amounts reclassified from OCI into cost of sales as a result of the discontinuance of cash flow hedge accounting.

For the three months ended March 31, 2013 and 2012, there was no hedge ineffectiveness recognized in income. No component of the derivative instruments’ gains or losses was excluded from the assessment of hedge effectiveness.

The following table presents the effect of derivative instruments on the statements of financial position.

	As of March 31, 2013
	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives not designated as hedging instruments:
Commodity contracts (futures and forwards)	Accounts receivable	$	1,621	Accrued liabilities	$	(3,066	)
Total derivatives not designated as hedging instruments		$	1,621		$	(3,066	)
Derivatives designated as hedging instruments:
Commodity contracts (swaps)	Accounts receivable	$	10,919		$	—
Fair value hedge		—		Other non-current liabilities	(2,274		)
Total derivatives designated as hedging instruments		$	10,919		$	(2,274	)
Total derivatives		$	12,540		$	(5,340	)

	As of December 31, 2012
	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
	Location	Fair Value		Location	Fair Value
Derivatives not designated as hedging instruments:
Commodity contracts (futures and forwards)	Accounts receivable	$	386		$	—
Total derivatives not designated as hedging instruments		$	386		$	—
Derivatives designated as hedging instruments:
Commodity contracts (swaps)	Accounts receivable	$	2,287	Accrued liabilities	$	(773	)
Fair value hedge		—		Other non-current liabilities	(346		)
Total derivatives designated as hedging instruments		$	2,287		$	(1,119	)
Total derivatives		$	2,673		$	(1,119	)

7

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(unaudited, dollars in thousands except as noted)

The following tables present the effect of derivative instruments on the Company’s statements of operations and accumulated other comprehensive income.

Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI			Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
				Location	Amount			Location	Amount
For the Three Months Ended March 31, 2013
Commodity contracts (swaps)	$	9,405		Losses on commodity swaps	$	(24	)		$	—
Total derivatives	$	9,405			$	(24	)		$	—
For the Three Months Ended March 31, 2012
Commodity contracts (swaps)	$	(36,860	)	Losses on commodity swaps	$	(3,662	)		$	—
Total derivatives	$	(36,860	)		$	(3,662	)		$	—

Derivatives in fair value hedging relationships:

		Gain (Loss) Recognized in Income
		For the Three Months Ended
		March 31,
	Location	2013			2012
Fair value hedge	Cost of sales	$	(1,928	)	$	—
Total derivatives		$	(1,928	)	$	—

Derivatives not designated as hedging instruments:

		Gain (Loss) Recognized in Income
		For the Three Months Ended
		March 31,
	Location	2013			2012
Commodity contracts (futures & forwards)	Cost of sales	$	(2,202	)	$	(1,438	)
Commodity contracts (swaps)	Losses on commodity swaps	—			(42,003		)
Commodity contracts (call options)	Other income (loss), net	—			(8,153		)
Total derivatives		$	(2,202	)	$	(51,594	)

8

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(unaudited, dollars in thousands except as noted)

Offsetting Assets and Liabilities

The Company's derivative financial instruments are subject to master netting arrangements to manage counterparty credit risk associated with derivatives, however the Company does not offset on its balance sheets the fair value amounts recorded for derivative instruments under these agreements.

The following table presents offsetting information regarding the Company's derivatives by type of transaction as of March 31, 2013 and December 31, 2012:

As of March 31, 2013	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts offset in the Statement of Financial Position		Net Amounts of Assets (Liabilities) Presented in the Statement of Financial Position			Gross Amounts Not offset in the Statement of Financial Position				Net Amount
									Financial Instruments		Cash Collateral Pledged
Commodity Derivative Assets:
Futures & forwards	$	1,621		$	—	$	1,621		$	—	$	—	$	1,621
Swaps	10,919			—		10,919			—		—		10,919
Commodity Derivative Liabilities:
Futures & forwards	$	(3,066	)	$	—	$	(3,066	)	$	—	$	3,066	$	—

As of December 31, 2012	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts offset in the Statement of Financial Position		Net Amounts of Assets (Liabilities) Presented in the Statement of Financial Position			Gross Amounts Not offset in the Statement of Financial Position				Net Amount
									Financial Instruments		Cash Collateral Pledged
Commodity Derivative Assets:
Futures & forwards	$	386		$	—	$	386		$	—	$	—	$	386
Swaps	2,287			—		2,287			—		—		2,287
Commodity Derivative Liabilities:
Swaps	$	(773	)	$	—	$	(773	)	$	—	$	—	$	(773	)

(5) Inventories

The Company’s inventories (including inventory consigned to others) are stated at the lower of cost or market. Cost is determined under the last-in, first-out (LIFO) method for crude oil, refined products, and blendstock inventories. Materials and supplies are stated at average cost.

Carrying value of inventories consisted of the following:

	March 31, 2013		December 31, 2012
Crude oil, refined products and blendstocks	$	20,853	$	12,268
Crude oil inventory consigned to others	32,396		29,656
Materials and supplies	2,901		2,872
Total inventories	$	56,150	$	44,796

Market values of crude oil, refined products and blendstock inventories exceeded LIFO costs by $14,958 and $14,013 at March 31, 2013 and December 31, 2012, respectively.

(6) Inventory Financing Agreement

Supply and Offtake Agreement with J. Aron & Company

The Company entered into a Supply and Offtake Agreement (the “Supply and Offtake Agreement”) with J. Aron & Company (“J. Aron”). Pursuant to the Supply and Offtake Agreement, (i) J. Aron agreed to sell to the Company, and the

9

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(unaudited, dollars in thousands except as noted)

Company agreed to buy from J. Aron, at market price, crude oil for processing at the refinery and (ii) the Company agreed to sell, and J. Aron agreed to buy, at market price, certain refined products produced at the refinery.

In connection with the execution of the Supply and Offtake Agreement, the Company also entered into agreements (the "Related Agreements") that provided for the sale, at market prices, of the Company's crude oil and certain refined product inventories to J. Aron, the lease to J. Aron of crude oil and refined product storage tanks located at our refinery, and an agreement to identify prospective purchasers of refined products on J. Aron's behalf. The Supply and Offtake Agreement was amended in February 2013 and has an initial term that expires in May 2019. J. Aron may elect to terminate the Supply and Offtake Agreement prior to the initial term beginning in May 2016 and upon each anniversary thereof, provided the Company receives notice of termination at least six months prior to that date. The Company may elect to terminate in May 2018, provided the Company gives notice of termination at least six months prior to that date.

Following expiration or termination of the Supply and Offtake Agreement and the Related Agreements, the Company is obligated to purchase the crude oil and refined product inventories then owned by J. Aron and located at our refinery.

At March 31, 2013 and December 31, 2012, the Company had net current payables to J. Aron for purchases of $25,833 and $27,750, respectively, and other non-current liabilities related to the original financing of $33,197 and $28,016, respectively, and a consignment receivable representing a deposit paid to J. Aron of $6,206 and $6,206, respectively.

Additionally, the Company recorded accounts receivable of $588 and $1,565 at March 31, 2013 and December 31, 2012, respectively, for forward commitments related to month-end consignment inventory target levels differing from projected levels and the associated pricing with these inventory level differences.

Standby LC Facility

In association with the Supply and Offtake Agreement, the Company entered into a secured Credit Agreement (the “Standby LC Facility”) by and between the Company, as Borrower, and Goldman Sachs Bank USA, as Issuing Bank. The Standby LC Facility provides for up to $200,000 of letters of credit to be issued to J. Aron. Obligations under the Standby LC Facility are secured by a first priority lien on the existing and future accounts receivable and inventory of the Company. At this time there is no further availability under the Standby LC Facility.

The Standby LC Facility includes customary events of default and restrictions on the activities of the Company and its subsidiaries. The Standby LC Facility contains no maintenance financial covenants.

(7) Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following:

	March 31, 2013			December 31, 2012
Refining facilities	$	431,793		$	429,531
Less accumulated depreciation	(91,328		)	(86,210		)
Property, plant and equipment, net	$	340,465		$	343,321

(8) Additional Financial Information

The tables that follow provide additional financial information related to the financial statements.

(a) Other Assets

	March 31, 2013		December 31, 2012
Deferred turnaround and chemical catalyst cost	$	10,781	$	9,251
Deferred debt issuance costs	4,298		4,885
Intangible assets	2,015		2,026
Long-term receivables	6,206		6,206
Total other assets	$	23,300	$	22,368

10

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(unaudited, dollars in thousands except as noted)

(b) Accrued Liabilities, Other Non-Current Liabilities and Accounts Payable

	March 31, 2013		December 31, 2012
Accrued Liabilities:
Taxes other than income taxes, primarily excise taxes	$	655	$	1,670
Employee costs	1,472		1,460
Commodity contracts	3,066		773
Accrued finance charges	14,771		7,439
Other	1,109		1,157
Total accrued liabilities	$	21,073	$	12,499
Other Non-Current Liabilities:
Environmental accrual	$	295	$	319
Asset retirement obligations	1,120		1,101
Consignment inventory	33,197		28,016
Total other non-current liabilities	$	34,612	$	29,436

Accounts payable includes related parties balance of $271,615 and $294,060 at March 31, 2013 and December 31, 2012, respectively.

(c) Deferred Income Tax Asset Valuation Allowance

The following table displays the change in deferred income tax asset valuation allowance:

	Deferred Income Tax Asset Valuation Allowance
Valuation allowance at December 31, 2012	$	(130,293	)
Change in valuation allowance	10,095
Valuation allowance at March 31, 2013	$	(120,198	)

(d) Accumulated Other Comprehensive Income

The following table displays the change in other comprehensive income, net of tax:

	Unrealized Gain on Cash Flow Hedges		Total
Balance at December 31, 2012	$	1,514	$	1,514
Current period other comprehensive income, net of tax	9,405		9,405
Balance at March 31, 2013	$	10,919	$	10,919

(9) Indebtedness

Long-term debt consisted of the following:

	March 31, 2013		December 31, 2012
Senior secured notes	$	212,180	$	211,573

11

ALON REFINING KROTZ SPRINGS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(unaudited, dollars in thousands except as noted)

(10) Related-Party Transactions

The Company is a subsidiary of Alon USA and is operated as a component of the integrated operations of Alon USA and its other subsidiaries. As such, the executive officers of Alon USA, who are employed by another subsidiary of Alon USA, also serve as executive officers of the Company and Alon USA's other subsidiaries and Alon USA performs general corporate and administrative services and functions for the Company and Alon USA's other subsidiaries, which include accounting, treasury, cash management, tax, information technology, insurance administration and claims processing, legal, environmental, risk management, audit, payroll and employee benefit processing, and internal audit services. Alon USA allocates the expenses actually incurred by it in performing these services to the Company and to its other subsidiaries based primarily on the amount of time the individuals performing such services devote to the Company's business and affairs relative to the amount of time they devote to the business and affairs of Alon USA's other subsidiaries. The Company records the amount of such allocations to its financial statements as selling, general and administrative expenses. For the three months ended March 31, 2013 and 2012, the Company recorded selling, general and administrative expenses of $2,098 and $1,844, respectively, with respect to allocations from Alon USA for such services.

Alon USA currently owns all of the Company's outstanding voting capital stock. As a result, Alon USA can control the election of the Company's directors, exercise control or significant influence over the Company's corporate and management policies and generally determine the outcome of any corporate transaction or other matter submitted to the Company's stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. So long as Alon USA continues to own a majority of the outstanding shares of the Company's voting capital stock, Alon USA will continue to be able to effectively control or influence the outcome of such matters.

(11) Commitments and Contingencies

(a) Commitments

In the normal course of business, the Company has long-term commitments to purchase utilities such as natural gas, electricity and water for use by the refinery. The Company is also party to various refined product and crude oil supply and exchange agreements. These agreements are typically short-term in nature or provide terms for cancellation.

(b) Contingencies

The Company is involved in various legal actions arising in the ordinary course of business. The Company believes the ultimate disposition of these matters will not have a material effect on the Company’s financial position, results of operations or liquidity.

(c) Environmental

The Company is subject to loss contingencies pursuant to federal, state, and local environmental laws and regulations. These rules regulate the discharge of materials into the environment and may require the Company to incur future obligations to investigate the effects of the release or disposal of certain petroleum, chemical, and mineral substances at various sites; to remediate or restore these sites; to compensate others for damage to property and natural resources and for remediation and restoration costs. These possible obligations relate to sites owned by the Company and are associated with past or present operations. The Company is currently participating in environmental investigations, assessments and cleanups under these regulations at its refinery. The Company may in the future be involved in additional environmental investigations, assessments and cleanups. The magnitude of future costs will depend on factors such as the unknown nature and contamination at many sites, the unknown timing, extent and method of the remedial actions which may be required, and the determination of the Company’s liability in proportion to other responsible parties.

Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated. Substantially all amounts accrued are expected to be paid out over the next five years. The level of future expenditures for environmental remediation obligations cannot be determined with any degree of reliability.

The Company has accrued environmental remediation obligations recorded as a non-current liability of $295 and $319 at March 31, 2013 and December 31, 2012, respectively.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations is abbreviated pursuant to General Instruction H(2)(a) of Form 10-Q. This discussion should be read in conjunction with the accompanying quarterly unaudited financial statements and our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012. Our Annual Report includes additional information about our significant accounting policies, practices and transactions that underlie our financial results. For additional information, including information regarding outlook, liquidity, capital resources, contractual obligations, and critical accounting estimates, see the Quarterly Report on Form 10-Q of our parent, Alon USA Energy, Inc. for the quarter ended March 31, 2013.

In this document, the words “the Company,” “we” and “our” refer to Alon Refining Krotz Springs, Inc.

Major Influences on Results of Operations

Our earnings and cash flows are primarily affected by the difference between refined product prices and the prices for crude oil and other feedstocks. The cost to acquire crude oil and other feedstocks and the price of the refined products we ultimately sell depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined products which, in turn, depends on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation. While our sales and operating revenues fluctuate significantly with movements in crude oil and refined product prices, it is the spread between crude oil and refined product prices, and not necessarily fluctuations in those prices, which affects our earnings.

In order to measure our operating performance, we compare our per barrel refinery operating margins to certain industry benchmarks. We compare our refinery’s per barrel operating margin to the Gulf Coast 2/1/1 crack spread. The Gulf Coast 2/1/1 crack spread is calculated assuming that two barrels of a benchmark crude oil are converted, or cracked, into one barrel of gasoline and one barrel of diesel. We calculate the Gulf Coast 2/1/1 crack spread using the market values of Gulf Coast conventional gasoline and Gulf Coast high sulfur diesel and the market value of Light Louisiana Sweet, or LLS, crude oil.

Our refinery has the capability to process substantial volumes of low-sulfur, or sweet, crude oils to produce a high percentage of light, high-value refined products. Sweet crude oil typically comprises 100% of our refinery’s crude oil input. This input is primarily comprised of LLS crude oil and WTI crude oil. We measure the benefit of refining WTI crude oil by calculating the difference between the average value of LLS crude oil and the average value of WTI crude oil. A narrowing of this spread can adversely influence the refinery operating margins.

Our results of operations are also significantly affected by our refinery’s operating costs, particularly the cost of natural gas used for fuel and the cost of electricity. Natural gas prices have historically been volatile. Typically, electricity prices fluctuate with natural gas prices.

Factors Affecting Comparability

Our financial condition and operating results over the three months endedMarch 31, 2013 and 2012, have been influenced by the following factors which are fundamental to understanding comparisons of our period-to-period financial performance.

During the three months ended March 31, 2013, our refinery throughput was impacted by the refinery being shutdown for a week for crude unit maintenance and reformer catalyst regeneration.

For the three months ended March 31, 2012, we had losses on commodity swaps of $45.6 million, as shown separately in the statements of operations.

Included in other income (loss), net in the statements of operations, we had losses on heating oil call option crack spread contracts of $8.2 million for the three months ended March 31, 2012.

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ALON REFINING KROTZ SPRINGS, INC.

Summary Financial Tables. The following tables provide summary financial data and selected key operating statistics for the three months ended March 31, 2013 and 2012. The following data should be read in conjunction with our financial statements and the notes thereto included elsewhere in this Form 10-Q. All information in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is unaudited.

	For the Three Months Ended
	March 31,
	2013			2012
	(dollars in thousands, except per barrel data and pricing statistics)
STATEMENTS OF OPERATIONS DATA:
Net sales	$	620,281		$	729,375
Operating costs and expenses:
Cost of sales	551,156			694,662
Losses on commodity swaps	24			45,665
Direct operating expenses	23,267			23,865
Selling, general and administrative expenses	2,098			1,844
Depreciation and amortization	6,026			5,962
Total operating costs and expenses	582,571			771,998
Operating income (loss)	37,710			(42,623		)
Interest expense	(10,196		)	(10,890		)
Other income (loss), net (1)	7			(8,149		)
Income (loss) before income tax expense	27,521			(61,662		)
Income tax expense	—			—
Net income (loss)	$	27,521		$	(61,662	)
KEY OPERATING STATISTICS:
Per barrel of throughput:
Refinery operating margin (2)	$	13.14		$	5.81
Refinery direct operating expense (3)	4.42			3.99
Capital expenditures	$	2,262		$	2,824
Capital expenditures for turnaround and chemical catalyst	2,427			686
PRICING STATISTICS:
Crack spreads (2/1/1) (per barrel):
Gulf Coast high sulfur diesel	$	8.20		$	12.46
WTI crude oil (per barrel)	$	94.27		$	103.00
LLS crude oil (per barrel)	112.56			112.51
Crude oil differentials (per barrel):
LLS less WTI	$	20.22		$	12.61
Product price (dollars per gallon):
Gulf Coast unleaded gasoline	$	2.84		$	2.98
Gulf Coast high sulfur diesel	3.01			3.12
Natural gas (per MMBTU)	3.48			2.50

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THROUGHPUT AND PRODUCTION DATA:	For the Three Months Ended
	March 31,
	2013			2012
	bpd	%		bpd	%
Refinery throughput:
WTI Crude	25,083	43.0		9,310	14.2
Gulf Coast sweet crude	31,516	53.9		55,352	84.3
Blendstocks	1,840	3.1		1,016	1.5
Total refinery throughput (4)	58,439	100.0		65,678	100.0
Refinery production:
Gasoline	26,916	45.0		27,533	41.6
Diesel/jet	22,382	37.5		28,713	43.4
Heavy Oils	1,773	3.0		5,045	7.6
Other	8,687	14.5		4,927	7.4
Total refinery production (5)	59,758	100.0		66,218	100.0
Refinery utilization (6)		74.2	%		77.8	%

(1) Other income (loss), net for the three months ended March 31, 2012 is substantially the loss on heating oil call option crack spread contracts.

(2) Refinery operating margin is a per barrel measurement calculated by dividing the margin between net sales and cost of sales (exclusive of substantial hedge positions and certain inventory adjustments) 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 margin to these crack spreads to assess our operating performance relative to other participants in our industry.

(3) Refinery direct operating expense is a per barrel measurement calculated by dividing direct operating expenses at the refinery by the refinery’s total throughput volume.

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

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

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

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Three Months Ended March 31, 2013 Compared to the Three Months Ended March 31, 2012

Net Sales. Net sales for the three months ended March 31, 2013 were $620.3 million, compared to $729.4 million for the three months ended March 31, 2012, a decrease of $109.1 million. This decrease was due to reduced refinery throughput as well as lower refined product prices in the three months ended March 31, 2013 compared to the same period last year. Refinery throughput for the three months ended March 31, 2013 was 58,439 barrels per day, compared to 65,678 barrels per day for the three months ended March 31, 2012. Our refinery throughput for the three months ended March 31, 2013 was impacted by the refinery being shut down for a week for crude unit maintenance and reformer catalyst regeneration. The average per gallon price of Gulf Coast gasoline for the three months ended March 31, 2013 decreased $0.14, or 4.7%, to $2.84, compared to $2.98 for the three months ended March 31, 2012. The average per gallon price for Gulf Coast high sulfur diesel for the three months ended March 31, 2013 decreased $0.11, or 3.5%, to $3.01, compared to $3.12 for the three months ended March 31, 2012.

Cost of Sales. Cost of sales for the three months ended March 31, 2013 were $551.2 million, compared to $694.7 million for the three months ended March 31, 2012, a decrease of $143.5 million. This decrease was primarily due to reduced refinery throughput and lower crude oil prices. The average price per barrel of WTI for the three months ended March 31, 2013 decreased $8.73 per barrel to an average of $94.27 per barrel, compared to an average of $103.00 per barrel for the three months ended March 31, 2012, a decrease of 8.5%. The lower crude oil cost was also the result of the refinery processing 25,083 barrels per day of WTI priced crude oil for the three months ended March 31, 2013, compared to 9,310 barrels per day of WTI priced crude oil for the three months ended March 31, 2012.

Direct Operating Expenses. Direct operating expenses were $23.3 million for the three months ended March 31, 2013, compared to $23.9 million for the three months ended March 31, 2012, a decrease of $0.6 million, or 2.5%. This decrease was primarily due to reduced refinery throughput.

Operating Income (Loss). Operating income (loss) for the three months ended March 31, 2013 was $37.7 million, compared to an operating loss of $(42.6) million for the three months ended March 31, 2012, an increase of $80.3 million. This increase was primarily the result of the refinery's increased processing of WTI priced crude oil during the three months ended March 31, 2013, mentioned above, as well as losses on commodity swaps of $45.6 million for the three months ended March 31, 2012. There were no significant losses on commodity swaps for the three months ended March 31, 2013.

The refinery margin for the three months ended March 31, 2013 was $13.14 per barrel compared to $5.81 per barrel for the same period last year. This increase was primarily due to the lower crude oil costs with the increased processing of WTI priced crude oil, partially offset by lower Gulf Coast 2/1/1 high sulfur diesel crack spreads. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for the three months ended March 31, 2013 was $8.20 per barrel, compared to $12.46 per barrel for the three months ended March 31, 2012.

Interest Expense. Interest expense was $10.2 million for the three months ended March 31, 2013, compared to $10.9 million for the three months ended March 31, 2012, a decrease of $0.7 million, or 6.4%.

Other Income (Loss), Net. Other income (loss), net for the three months ended March 31, 2012 was substantially the loss on heating oil call option crack spread contracts.

Net Income (Loss). Net income (loss) was $27.5 million for the three months ended March 31, 2013, compared to a net loss of $(61.7) million for the three months ended March 31, 2012, an increase of $89.2 million. This increase was attributable to the factors discussed above.

Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from our operating activities, inventory supply and offtake arrangement, credit lines and additional funding from Alon USA. Future operating results will depend on market factors, primarily the difference between the prices we receive from customers for produced products compared to the prices we pay to suppliers for crude oil. We plan to continue to operate the refinery at current or higher utilization rates as long as the refinery is able to generate cash operating margin. Management believes its current liquidity from the above-described sources is adequate to operate the refinery.

New Accounting Standards and Disclosures

New accounting standards, if any, are disclosed in Note (1) Basis of Presentation included in the financial statements included in Item 1 of this report.

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Forward-Looking Statements

Certain statements contained in this report and other materials we file with the SEC, or in other written or oral statements made by us, other than statements of historical fact, are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. We have used the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “will,” “future” and similar terms and phrases to identify 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.

Actual events, results and outcomes may differ materially from our expectations due to a variety of factors. Although it is not possible to identify all of these factors, they include, among others, the following:

• changes in general economic conditions and capital markets;

• changes in the underlying demand for our products;

• the availability, costs and price volatility of crude oil, other refinery feedstocks and refined products;

• changes in the spread between West Texas Intermediate crude oil and Light Louisiana Sweet crude oil;

• the effects of transactions involving forward contracts and derivative instruments;

• actions of customers and competitors;

• termination of our Supply and Offtake Agreement with J. Aron & Company (“J. Aron”), under which J. Aron is our largest supplier of crude oil and our largest customer of refined products. Additionally, we are obligated to repurchase all consigned inventories and certain other inventories upon termination of the Supply and Offtake Agreement;

• changes in fuel and utility costs incurred by our facility;

• disruptions due to equipment interruption, pipeline disruptions or failure at our or third-party facilities;

• the execution of planned capital projects;

• adverse changes in the credit ratings assigned to our trade credit and debt instruments;

• the effects of and cost of compliance with current and future state and federal environmental, economic, safety and other laws, policies and regulations;

• operating hazards, natural disasters such as flooding, casualty losses and other matters beyond our control; and

• the other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2012 under the caption “Risk Factors”.

Any one of these factors or a combination of these factors could materially affect our future results of operations and could influence whether any forward-looking statements ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and actual results and future performance may differ materially from those suggested in any forward-looking statements. We do not intend to update these statements unless we are required by the securities laws to do so.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted under the reduced disclosure format permitted by General Instruction H(2)(c) of Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

(1) Evaluation of disclosure controls and procedures.

Our management has evaluated, with the participation of our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report, and has concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms including, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

(2) Changes in internal control over financial reporting.

There has been no change in our internal control over financial reporting (as described in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit
Number	Description of Exhibit
10.1	Amendment, dated as of February 1, 2013, to the Amended and Restated Supply and Offtake Agreement, dated May 28, 2010, by and between Alon Refining Krotz Springs, Inc. and J. Aron & Company.
31.1	Certifications of Chief Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Chief Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from Alon Refining Krotz Springs, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Comprehensive Income, (iv) Statements of Cash Flows and (v) Notes to Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Alon Refining Krotz Springs, Inc.
Date:	May 14, 2013	By:	/s/ David Wiessman
			David Wiessman
			Executive Chairman
Date:	May 14, 2013	By:	/s/ Paul Eisman
			Paul Eisman
			Chief Executive Officer
Date:	May 14, 2013	By:	/s/ Shai Even
			Shai Even
			Chief Financial Officer

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EXHIBITS

Exhibit
Number	Description of Exhibit
10.1	Amendment, dated as of February 1, 2013, to the Amended and Restated Supply and Offtake Agreement, dated May 28, 2010, by and between Alon Refining Krotz Springs, Inc. and J. Aron & Company.
31.1	Certifications of Chief Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Chief Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from Alon Refining Krotz Springs, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Comprehensive Income, (iv) Statements of Cash Flows and (v) Notes to Financial Statements.

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