ALON USA ENERGY, INC. DALLAS, Feb. 24, 2016 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the fourth quarter and year ended December 31, 2015. Net loss available to stockholders for the fourth quarter of 2015 was $(52.5) million, or $(0.75) per share, compared to net income available to stockholders of $6.7 million, or $0.10 per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(14.6) million, or $(0.21) per share, for the fourth quarter of 2015, compared to net loss available to stockholders of $(0.2) million, or $0.00 per share, for the same period last year.
Net income available to stockholders for the full year 2015 was $52.8 million, or $0.76 per share, compared to net income available to stockholders of $38.5 million, or $0.56 per share, for 2014. Excluding special items, Alon recorded net income available to stockholders of $95.5 million, or $1.37 per share, for the full year 2015, compared to net income available to stockholders of $38.1 million, or $0.55 per share, for 2014.
Paul Eisman, President and CEO, commented, "We are pleased with our overall operational and financial performance in 2015. We achieved the second highest annual adjusted EBITDA in our company's history, increased our regular dividend by 50% from $0.40 to $0.60 per annum and reduced our interest expense in 2015 by over $30 million compared to 2014. As a result, we reduced our net debt to $322 million, despite high capital spending of over $160 million, substantially related to capital expenditures and turnaround costs. With the Krotz Springs turnaround successfully completed in the fourth quarter of 2015 and the Big Spring turnaround executed in 2014, our assets are prepared to run well in the coming years. Our next major turnaround will not occur until 2019, allowing us to focus on our growth initiatives at both facilities.
"The Big Spring refinery ran well in 2015, setting a new total throughput record for the year. In the fourth quarter, the Big Spring refinery achieved total throughput of approximately 76,000 barrels per day and refinery operating margin of $10.02 per barrel. Relative to the third quarter of 2015, the Big Spring refinery's fourth quarter results were negatively impacted by seasonal weakness in crack spreads. Also, an outage at Big Spring's alkylation unit in the quarter impacted gasoline yields and direct operating expenses which were higher than planned at $3.88 per barrel. We also completed a reformer regeneration and catalyst replacement for our diesel hydrotreater unit in the beginning of the first quarter of 2016, which we had postponed from the third quarter of 2015.
"During the fourth quarter of 2015, we successfully completed the planned major turnaround at the Krotz Springs refinery. The turnaround negatively impacted total throughput, which was 41,000 barrels per day, direct operating expense and refinery operating margin. The refinery operating margin was also impacted by the seasonal weakness in crack spreads. In conjunction with the turnaround, we invested nearly $15 million in reliability improvements at the refinery. We continue to progress with our plans to add a sulfuric acid alkylation unit at Krotz Springs.
"Our retail business performed well in 2015 but faced headwinds in the fourth quarter. In addition to seasonal weakness, our performance suffered from severe weather conditions in our markets and weakness in the Midland/Odessa area due to lower economic activity. In October, we opened a new large-format store in El Paso. The performance of the 14 Albuquerque locations acquired in August has exceeded our expectations.
"Our asphalt segment significantly improved in 2015, and we believe the improvements that we have made in our business are sustainable. In 2015, we reduced our direct operating expense by $12 million, which contributed in part to a $28 million improvement in our operating income in 2015 relative to 2014.
"Due to the volatility in oil prices and contraction of crude differentials, the expected cash flows from future operations of our California refining assets, primarily the Bakersfield rail crude offloading facility, have been deferred. As a result, in the fourth quarter of 2015, we have decided to impair our goodwill associated with the California refining assets, resulting in a non-cash bottom-line impact of approximately $39 million.
"We expect total throughput at the Big Spring refinery to average approximately 68,000 barrels per day for the first quarter and 73,000 barrels per day for the full year of 2016. We expect total throughput at the Krotz Springs refinery to average approximately 72,000 barrels per day for the first quarter and 75,000 barrels per day for the full year of 2016."
FOURTH QUARTER 2015
Special items reduced earnings by $37.9 million for the fourth quarter of 2015 primarily as a result of a loss on impairment of goodwill of $38.5 million, after-tax losses of $1.2 million related to an asphalt inventory adjustment, after-tax expenses of $1.0 million associated with our employee retention plan and after-tax unrealized losses of $0.8 million associated with commodity swaps, partially offset by after-tax insurance recoveries net of professional fees of $2.6 million and $0.9 million associated with after-tax gains recognized on disposition of assets. Special items increased earnings by $6.9 million for the fourth quarter of 2014 primarily as a result of after-tax unrealized gains of $9.0 million associated with commodity swaps, partially offset by after-tax environmental charges of $1.6 million, after-tax losses of $0.1 million associated with write-offs of unamortized debt issuance costs and $0.3 million associated with after-tax losses recognized on disposition of assets.
The combined total refinery average throughput for the fourth quarter of 2015 was 116,995 barrels per day ("bpd"), compared to a combined total refinery average throughput of 143,252 bpd for the fourth quarter of 2014. The Big Spring refinery average throughput for the fourth quarter of 2015 was 75,925 bpd, compared to 76,867 bpd for the fourth quarter of 2014. The Krotz Springs refinery average throughput for the fourth quarter of 2015 was 41,070 bpd, compared to 66,385 bpd for the fourth quarter of 2014. The decreased throughput at the Krotz Springs refinery was due to downtime necessary to complete the planned major turnaround during the fourth quarter of 2015.
Refinery operating margin at the Big Spring refinery was $10.02 per barrel for the fourth quarter of 2015 compared to $15.12 per barrel for the same period in 2014. This decrease in operating margin was primarily due to the less favorable industry margin environment. The unfavorable contraction in the WTI Cushing to WTI Midland and the WTI Cushing to WTS spreads was greater than the improvement in the Gulf Coast 3/2/1 spread and the cost of crude benefit from the market moving from backwardation into contango.
Refinery operating margin at the Krotz Springs refinery was $1.55 per barrel for the fourth quarter of 2015 compared to $4.04 per barrel for the same period in 2014. This decrease in operating margin was primarily due to the negative impact of the planned major turnaround on refinery production.
The average WTI Cushing to WTI Midland spread for the fourth quarter of 2015 was $(0.20) per barrel compared to $5.79 per barrel for the same period in 2014. The average WTI Cushing to WTS spread for the fourth quarter of 2015 was $(0.26) per barrel compared to $4.43 per barrel for the same period in 2014. The average Brent to WTI Cushing spread for the fourth quarter of 2015 was $1.35 per barrel compared to $3.07 per barrel for the same period in 2014. The average LLS to WTI Cushing spread for the fourth quarter of 2015 was $2.08 per barrel compared to $3.16 per barrel for the same period in 2014. The average Brent to LLS spread for the fourth quarter of 2015 was $(0.30) per barrel compared to $0.54 per barrel for the same period in 2014.
The average Gulf Coast 3/2/1 crack spread was $10.90 per barrel for the fourth quarter of 2015 compared to $9.04 per barrel for the fourth quarter of 2014. The average Gulf Coast 2/1/1 high sulfur diesel crack spread was $7.13 per barrel for the fourth quarter of 2015 compared to $4.80 per barrel for the fourth quarter of 2014.
The contango environment in the fourth quarter of 2015 created a cost of crude benefit of $0.94 per barrel compared to the backwardated environment creating a cost of crude detriment of $0.68 per barrel for the same period in 2014.
Asphalt margins for the fourth quarter of 2015 were $102.85 per ton compared to $33.53 per ton for the fourth quarter of 2014. On a cash basis (i.e. excluding inventory effects), asphalt margins in the fourth quarter of 2015 were $106.92 per ton compared to $36.51 per ton in the fourth quarter of 2014. The increase in asphalt margins was primarily due to a smaller reduction in blended asphalt sales price relative to the reduction in the cost of blended asphalt during the fourth quarter of 2015 compared to the fourth quarter of 2014.
Retail fuel sales volume increased to 52.2 million gallons in the fourth quarter of 2015 from 49.7 million gallons in the fourth quarter of 2014. Merchandise margins decreased to 31.1% in the fourth quarter of 2015 from 32.3% in the fourth quarter of 2014.
FULL-YEAR 2015
Special items reduced earnings by $42.7 million for 2015 primarily as a result of a loss on impairment of goodwill of $38.5 million, after-tax losses of $5.7 million related to an asphalt inventory adjustment and after-tax expenses of $8.0 million associated with our employee retention plan, partially offset by after-tax unrealized gains of $5.6 million associated with commodity swaps, after-tax insurance recoveries net of professional fees of $2.6 million and $1.4 million associated with after-tax gains recognized on disposition of assets. Special items increased earnings by $0.4 million for 2014 primarily as a result of after-tax unrealized gains of $2.8 million associated with commodity swaps and $0.2 million associated with after-tax gains recognized on disposition of assets, partially offset by after-tax environmental charges of $2.0 million and after-tax losses of $0.7 million associated with write-offs of unamortized original issuance discount and debt issuance costs.
Combined refinery average throughput for 2015 was 140,036 bpd, compared to a combined refinery average throughput of 136,378 bpd in 2014. The Big Spring refinery average throughput for 2015 was 74,906 bpd compared to 66,033 bpd for 2014. During 2014, refinery throughput at the Big Spring refinery was reduced as we completed both the planned major turnaround and the vacuum tower project. The Krotz Springs refinery average throughput for 2015 was 65,130 bpd compared to 70,345 bpd for 2014. During 2015, we completed the planned major turnaround at the Krotz Springs refinery, which reduced throughput during the period.
Refinery operating margin at the Big Spring refinery was $14.43 per barrel for 2015 compared to $16.69 per barrel for 2014. This decrease in operating margin was primarily due to the less favorable industry margin environment. The unfavorable contraction in the WTI Cushing to WTI Midland and the WTI Cushing to WTS spreads was greater than the improvement in the Gulf Coast 3/2/1 spread and the cost of crude benefit from the market moving from backwardation into contango.
Refinery operating margin at the Krotz Springs refinery was $7.02 per barrel for 2015 compared to $7.57 per barrel for 2014. This decrease in operating margin was primarily due to the less favorable industry margin environment. The unfavorable contraction in the WTI Cushing to WTI Midland and the LLS to WTI Cushing spreads was greater than the improvement in the Gulf Coast 2/1/1 high sulfur diesel crack spread and the cost of crude benefit from the market moving from backwardation into contango.
The average WTI Cushing to WTI Midland spread for 2015 was $0.39 per barrel compared to $6.93 per barrel for 2014. The average WTI Cushing to WTS spread for 2015 was $(0.06) per barrel compared to $6.04 per barrel for 2014. The average Brent to WTI Cushing spread for 2015 was $3.54 per barrel compared to $6.19 per barrel for 2014. The average LLS to WTI Cushing spread for 2015 was $3.73 per barrel compared to $3.85 per barrel for 2014. The average Brent to LLS spread for 2015 was $0.14 per barrel compared to $3.45 per barrel for 2014.
The average Gulf Coast 3/2/1 crack spread for 2015 was $17.02 per barrel compared to $14.52 per barrel for 2014. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for 2015 was $10.81 per barrel compared to $9.76 per barrel for 2014.
The contango environment in 2015 created a cost of crude benefit of $1.01 per barrel compared to the backwardated environment creating a cost of crude detriment of $0.73 per barrel in 2014.
Asphalt margins for 2015 were $105.70 per ton compared to $43.86 per ton in 2014. On a cash basis (i.e. excluding inventory effects), asphalt margins in 2015 were $109.35 per ton compared to $41.31 per ton in 2014. The increase in asphalt margins was primarily due to a smaller reduction in blended asphalt sales price relative to the reduction in cost of blended asphalt during 2015 compared to 2014.
Retail fuel sales volume increased to 199.1 million gallons in 2015 from 192.6 million gallons in 2014. Merchandise margins increased to 31.9% in 2015 from 31.4% in 2014. Merchandise sales increased to $328.5 million in 2015 from $322.3 million in 2014.
CONFERENCE CALL
Alon has scheduled a conference call, which will be broadcast live over the Internet on Thursday, February 25, 2016, at 12:00 p.m. Eastern Time (11:00 a.m. Central Time), to discuss the fourth quarter and year-end 2015 financial results. To access the call, please dial 877-407-0672, or 412-902-0003 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 by logging on to the Alon investor relations website, http://ir.alonusa.com. A telephonic replay of the conference call will be available through March 10, 2016, and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13629237#. A webcast archive will also be available at http://ir.alonusa.com shortly after the call and will be accessible for approximately 90 days. For more information, please contact Donna Washburn at Dennard § Lascar Associates at 713-529-6600 or email dwashburn@dennardlascar.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. Alon owns 100% of the general partner and 81.6% of the limited partner interests in Alon USA Partners, LP (NYSE: ALDW), which owns a crude oil refinery in Big Spring, Texas, with a crude oil throughput capacity of 73,000 barrels per day. In addition, Alon directly owns a crude oil refinery in Krotz Springs, Louisiana, with a crude oil throughput capacity of 74,000 barrels per day. Alon also owns crude oil refineries in California, which have not processed crude oil since 2012. Alon is a leading marketer of asphalt, which it distributes primarily through asphalt terminals located predominately in the Southwestern and Western United States. Alon is the largest 7-Eleven licensee in the United States and operates approximately 300 convenience stores which also market motor fuels in Central and West Texas and New Mexico.
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.
This press release does not constitute an offer to sell or the solicitation of offers to buy any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.
- Tables to follow -
ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
EARNINGS RELEASE
RESULTS OF OPERATIONS -
FINANCIAL DATA
(ALL
INFORMATION IN THIS
PRESS RELEASE EXCEPT
FOR BALANCE SHEET DATA
AS OF DECEMBER 31,
2014, AND INCOME
STATEMENT DATA FOR THE
YEAR ENDED DECEMBER 31,
2014, IS UNAUDITED) For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(dollars in thousands, except per share data)
STATEMENTS OF OPERATIONS
DATA:
Net sales (1) $782,367 $1,503,231 $4,338,152 $6,779,456
Operating costs and
expenses:
Cost of sales 636,794 1,307,198 3,515,406 6,002,270
Direct operating
expenses 63,426 73,022 255,534 281,686
Selling, general and
administrative expenses
(2) 51,306 40,303 200,195 170,139
Depreciation and
amortization (3) 32,232 32,562 126,494 124,063
------ ------ ------- -------
Total operating costs
and expenses 783,758 1,453,085 4,097,629 6,578,158
------- --------- --------- ---------
Gain (loss) on
disposition of assets 1,319 (471) 1,914 274
Loss on impairment of
goodwill (4) (39,028) - (39,028) -
------- --- ------- ---
Operating income (loss) (39,100) 49,675 203,409 201,572
Interest expense (19,876) (25,670) (79,826) (111,143)
Equity earnings (losses)
of investees 1,944 (1,123) 6,669 1,678
Other income, net 266 33 417 674
--- --- --- ---
Income (loss) before
income tax expense
(benefit) (56,766) 22,915 130,669 92,781
Income tax expense
(benefit) (4,860) 8,459 48,282 22,913
------ ----- ------ ------
Net income (loss) (51,906) 14,456 82,387 69,868
Net income attributable
to non-controlling
interest 628 7,749 29,636 31,411
--- -----
Net income (loss)
available to
stockholders $(52,534) $6,707 $52,751 $38,457
======== ====== ======= =======
Earnings (loss) per
share, basic $(0.75) $0.10 $0.76 $0.56
====== ===== ===== =====
Weighted average shares
outstanding, basic (in
thousands) 70,027 69,319 69,772 68,985
====== ====== ====== ======
Earnings (loss) per
share, diluted $(0.75) $0.10 $0.75 $0.55
====== ===== ===== =====
Weighted average shares
outstanding, diluted
(in thousands) 70,027 69,842 70,714 69,373
====== ====== ====== ======
Cash dividends per share $0.15 $0.31 $0.55 $0.53
===== ===== ===== =====
CASH FLOW DATA:
Net cash provided by
(used in):
Operating activities $49,755 $49,074 $226,065 $193,658
Investing activities (81,713) (24,242) (160,011) (108,995)
Financing activities 27,221 (3,439) (46,888) (94,201)
OTHER DATA:
Adjusted net income
(loss) available to
stockholders (5) $(14,635) $(219) $95,459 $38,100
Adjusted earnings (loss)
per share (5) $(0.21) $ - $1.37 $0.55
Adjusted EBITDA (6) $34,128 $67,066 $366,166 $323,935
Capital expenditures (7) 43,933 14,633 101,195 88,429
Capital expenditures for
turnarounds and
catalysts 23,938 11,081 35,348 62,473
As of December 31,
------------------
2015 2014
---- ----
BALANCE SHEET DATA (end of period): (dollars in thousands)
Cash and cash equivalents $234,127 $214,961
Working capital 78,694 126,665
Total assets (8) 2,176,138 2,191,644
Total debt (8) 555,962 554,457
Total debt less cash and cash
equivalents (8) 321,835 339,496
Total equity 664,160 673,778
REFINING AND MARKETING SEGMENT
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(dollars in thousands, except per barrel data and pricing statistics)
STATEMENTS OF OPERATIONS DATA:
Net sales (9) $627,498 $1,294,459 $3,663,956 $5,937,982
Operating costs and expenses:
Cost of sales 528,548 1,142,721 3,034,531 5,329,605
Direct operating
expenses 57,063 63,471 227,517 241,833
Selling, general and
administrative expenses 19,553 11,367 79,022 56,004
Depreciation and
amortization 27,253 27,089 107,619 104,676
------ ------ ------- -------
Total operating costs
and expenses 632,417 1,244,648 3,448,689 5,732,118
Gain (loss) on
disposition of assets 1,319 1 1,842 (1,255)
Loss on impairment of
goodwill (4) (39,028) - (39,028) -
------- --- ------- ---
Operating income (loss) $(42,628) $49,812 $178,081 $204,609
======== ======= ======== ========
KEY OPERATING STATISTICS:
Per barrel of throughput:
Refinery operating
margin - Big Spring
(10) $10.02 $15.12 $14.43 $16.69
Refinery operating
margin - Krotz Springs
(10) 1.55 4.04 7.02 7.57
Refinery direct
operating expense - Big
Spring (11) 3.88 3.67 3.62 4.39
Refinery direct
operating expense -
Krotz Springs (11) 5.82 4.46 4.03 4.12
Capital expenditures $37,926 $7,825 $73,429 $63,148
Capital expenditures for
turnarounds and
catalysts 23,938 11,081 35,348 62,473
PRICING STATISTICS:
Crack spreads (3/2/1) (per barrel):
Gulf Coast (12) $10.90 $9.04 $17.02 $14.52
Crack spreads (2/1/1) (per barrel):
Gulf Coast high sulfur
diesel (12) $7.13 $4.80 $10.81 $9.76
WTI Cushing crude oil
(per barrel) $42.05 $73.37 $48.68 $93.10
Crude oil differentials (per barrel):
WTI Cushing less WTI
Midland (13) $(0.20) $5.79 $0.39 $6.93
WTI Cushing less WTS
(13) (0.26) 4.43 (0.06) 6.04
LLS less WTI Cushing
(13) 2.08 3.16 3.73 3.85
Brent less LLS (13) (0.30) 0.54 0.14 3.45
Brent less WTI Cushing
(13) 1.35 3.07 3.54 6.19
Product prices (dollars per gallon):
Gulf Coast unleaded
gasoline $1.25 $1.85 $1.56 $2.49
Gulf Coast ultra-low
sulfur diesel 1.29 2.20 1.58 2.71
Gulf Coast high sulfur
diesel 1.19 2.03 1.45 2.59
Natural gas (per MMBtu) 2.23 3.83 2.63 4.26
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Year Ended
BIG SPRING REFINERY December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTS crude 29,510 38.9 35,663 46.4 33,647 44.9 30,323 45.9
WTI crude 43,968 57.9 35,691 46.4 38,632 51.6 32,429 49.1
Blendstocks 2,447 3.2 5,513 7.2 2,627 3.5 3,281 5.0
----- --- ----- --- ----- --- ----- ---
Total refinery throughput
(14) 75,925 100.0 76,867 100.0 74,906 100.0 66,033 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 38,600 50.8 41,015 53.0 37,519 50.0 32,932 49.7
Diesel/jet 27,812 36.6 27,074 34.9 27,651 36.8 23,252 35.1
Asphalt 2,362 3.1 2,749 3.5 2,639 3.5 2,716 4.1
Petrochemicals 4,012 5.3 4,476 5.8 4,579 6.1 3,756 5.7
Other 3,176 4.2 2,185 2.8 2,678 3.6 3,565 5.4
----- --- ----- --- ----- --- ----- ---
Total refinery production
(15) 75,962 100.0 77,499 100.0 75,066 100.0 66,221 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (16) 100.7% 97.7% 99.0% 97.2%
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Year Ended
KROTZ SPRINGS REFINERY December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTI crude 8,750 21.3 28,454 42.9 22,408 34.4 28,373 40.3
Gulf Coast sweet crude 29,384 71.6 32,208 48.5 38,699 59.4 39,636 56.4
Blendstocks 2,936 7.1 5,723 8.6 4,023 6.2 2,336 3.3
----- --- ----- --- ----- --- ----- ---
Total refinery throughput
(14) 41,070 100.0 66,385 100.0 65,130 100.0 70,345 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 18,083 43.7 31,336 46.5 30,193 45.5 32,925 45.9
Diesel/jet 16,037 38.7 26,402 39.2 27,259 41.0 30,060 41.9
Heavy Oils 654 1.6 1,199 1.8 1,165 1.8 1,146 1.6
Other 6,632 16.0 8,441 12.5 7,781 11.7 7,579 10.6
----- ---- ----- ---- ----- ---- ----- ----
Total refinery production
(15) 41,406 100.0 67,378 100.0 66,398 100.0 71,710 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (16) 83.1% 82.0% 91.3% 91.9%
ASPHALT SEGMENT
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(dollars in thousands, except per ton data)
STATEMENTS OF OPERATIONS DATA:
Net sales (17) $48,967 $106,572 $257,955 $457,412
Operating costs and expenses:
Cost of sales (17) (18) 38,081 102,280 212,166 431,931
Direct operating expenses 6,363 9,551 28,017 39,853
Selling, general and administrative expenses 3,280 1,499 10,517 7,874
Depreciation and amortization 1,227 1,166 4,892 4,747
----- ----- ----- -----
Total operating costs and expenses 48,951 114,496 255,592 484,405
Gain (loss) on disposition of assets - (482) - 1,396
--- ---- --- -----
Operating income (loss) (21) $16 $(8,406) $2,363 $(25,597)
=== ======= ====== ========
KEY OPERATING STATISTICS:
Blended asphalt sales volume (tons in
thousands) (19) 104 104 451 516
Non-blended asphalt sales volume (tons in
thousands) (20) 18 24 59 65
Blended asphalt sales price per ton (19) $451.98 $571.30 $486.34 $571.18
Non-blended asphalt sales price per ton (20) 116.61 406.17 231.00 397.91
Asphalt margin per ton (21) 102.85 33.53 105.70 43.86
Capital expenditures $901 $1,505 $3,385 $5,777
RETAIL SEGMENT
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(dollars in thousands, except per gallon data)
STATEMENTS OF OPERATIONS DATA:
Net sales (1) $182,960 $216,657 $774,435 $939,684
Operating costs and expenses:
Cost of sales (18) 147,223 176,654 626,903 796,356
Selling, general and
administrative expenses 28,292 27,260 109,943 105,556
Depreciation and
amortization 3,427 3,697 12,431 12,241
----- ----- ------ ------
Total operating costs and
expenses 178,942 207,611 749,277 914,153
------- ------- ------- -------
Gain on disposition of
assets - 10 72 134
--- --- --- ---
Operating income $4,018 $9,056 $25,230 $25,665
====== ====== ======= =======
KEY OPERATING STATISTICS:
Number of stores (end of
period) (22) 309 295 309 295
Retail fuel sales
(thousands of gallons) 52,155 49,732 199,147 192,582
Retail fuel sales
(thousands of gallons per
site per month) (22) 58 59 58 57
Retail fuel margin (cents
per gallon) (23) 20.0 27.6 21.3 21.6
Retail fuel sales price
(dollars per gallon) (24) $1.95 $2.73 $2.24 $3.20
Merchandise sales $80,958 $80,951 $328,505 $322,262
Merchandise sales (per
site per month) (22) $87 $91 $91 $91
Merchandise margin (25) 31.1% 32.3% 31.9% 31.4%
Capital expenditures $4,110 $4,654 $18,993 $16,748
(1) Includes excise taxes on sales by
the retail segment of $20,367 and
$19,486 for the three months
ended December 31, 2015 and 2014,
respectively, and $77,860 and
$75,409 for the years ended
December 31, 2015 and 2014,
respectively.
(2) Includes corporate headquarters
selling, general and
administrative expenses of $181
and $177 for the three months
ended December 31, 2015 and 2014,
respectively, and $713 and $705
for the years ended December 31,
2015 and 2014, respectively,
which are not allocated to our
three operating segments.
(3) Includes corporate depreciation
and amortization of $325 and $610
for the three months ended
December 31, 2015 and 2014,
respectively, and $1,552 and
$2,399 for the years ended
December 31, 2015 and 2014,
respectively, which are not
allocated to our three operating
segments.
(4) During the three months and year
ended December 31, 2015, we
recognized a goodwill impairment
loss of $39,028 related to our
California refining reporting
unit.
(5) The following table provides a
reconciliation of net income
(loss) available to stockholders
under United States generally
accepted accounting principles
("GAAP") to adjusted net income
(loss) available to stockholders
utilized in determining adjusted
earnings per share, excluding the
after-tax write-off of
unamortized debt issuance costs,
after-tax write-off of
unamortized original issuance
discount, after-tax employee
retention expense, after-tax
environmental charges, loss on
impairment of goodwill, after-
tax loss on asphalt inventory
adjustment, after-tax insurance
recoveries net of professional
fees, after-tax unrealized gains
(losses) on commodity swaps and
after-tax gain (loss) on
disposition of assets. Our
management believes that the
presentation of adjusted net
income (loss) available to
stockholders and adjusted
earnings (loss) per share,
excluding these items, is useful
to investors because it provides
a more meaningful measurement for
evaluation of our Company's
operating results.
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to stockholders $(52,534) $6,707 $52,751 $38,457
Plus: Write-off of debt issuance costs, net of tax - 123 - 411
Plus: Write-off of original issuance discount, net of
tax - - - 265
Plus: Employee retention expense, net of tax 956 - 8,007 -
Plus: Environmental charges, net of tax - 1,634 - 1,950
Plus: Loss on impairment of goodwill 38,540 - 38,540 -
Plus: Loss on asphalt inventory adjustment, net of tax 1,192 - 5,736 -
Less: Insurance recoveries net of professional fees,
net of tax (2,615) - (2,615) -
Less: Unrealized (gains) losses on commodity swaps, net
of tax 772 (8,973) (5,608) (2,781)
Less: (Gain) loss on disposition of assets, net of tax (946) 290 (1,352) (202)
---- ----
Adjusted net income (loss) available to stockholders $(14,635) $(219) $95,459 $38,100
======== ===== ======= =======
Adjusted earnings (loss) per share * $(0.21) $ - $1.37 $0.55
====== === === ===== =====
* Adjusted earnings (loss) per share includes the effects of dividends on preferred stock on
adjusted net income (loss)
available to stockholders necessary to calculate earnings (loss) per share.
(6) Adjusted EBITDA
represents
earnings before
net income
attributable to
non-controlling
interest, income
tax expense
(benefit),
interest
expense,
depreciation and
amortization,
gain (loss) on
disposition of
assets, loss on
impairment of
goodwill and
unrealized gains
(losses) on
commodity swaps.
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 net
income
attributable to
non-controlling
interest, income
tax expense
(benefit),
interest
expense, gain
(loss) on
disposition of
assets, loss on
impairment of
goodwill,
unrealized gains
(losses) on
commodity swaps
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) available
to stockholders
to Adjusted
EBITDA for the
three months and
years ended
December 31,
2015 and 2014:
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(52,534) $6,707 $52,751 $38,457
Net income attributable to non-
controlling interest 628 7,749 29,636 31,411
Income tax expense (benefit) (4,860) 8,459 48,282 22,913
Interest expense 19,876 25,670 79,826 111,143
Depreciation and amortization 32,232 32,562 126,494 124,063
(Gain) loss on disposition of
assets (1,319) 471 (1,914) (274)
Loss on impairment of goodwill 39,028 - 39,028 -
Unrealized (gains) losses on
commodity swaps 1,077 (14,552) (7,937) (3,778)
Adjusted EBITDA $34,128 $67,066 $366,166 $323,935
======= ======= ======== ========
Adjusted EBITDA does not exclude a
loss of $1,662 and $8,118 for the
three months and year ended
December 31, 2015, respectively,
resulting from a price adjustment
related to asphalt inventory.
(7) Includes corporate capital
expenditures of $996 and $649 for
the three months ended December 31,
2015 and 2014, respectively, and
$5,388 and $2,756 for the years
ended December 31, 2015 and 2014,
respectively, which are not
allocated to our three operating
segments.
(8) During the year ended December 31,
2015, we adopted the FASB's
recently issued accounting guidance
simplifying the presentation of
debt issuance costs. As a result of
adopting this guidance, debt
issuance costs that had previously
been included as deferred charges
in our consolidated balance sheets
have been reclassified as a direct
deduction from the carrying value
of the associated debt. These
changes have been applied
retrospectively to all periods
presented.
(9) Net sales include intersegment sales
to our asphalt and retail segments
at prices which approximate
wholesale market prices. These
intersegment sales are eliminated
through consolidation of our
financial statements.
(10) Refinery operating margin is a per
barrel measurement calculated by
dividing the margin between net
sales and cost of sales (exclusive
of certain adjustments)
attributable to each refinery by
its 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.
The refinery operating margin for
the three months and year ended
December 31, 2015 excludes realized
and unrealized gains on commodity
swaps of $9,759 and $59,215,
respectively. The refinery
operating margin for the three
months and year ended December 31,
2015 also excludes insurance
recoveries of $10,868. For the year
ended December 31, 2015, $3,941
primarily related to inventory
adjustments was not included in
cost of sales for the Big Spring
refinery and the Krotz Springs
refinery.
The refinery operating margin for
the three months and year ended
December 31, 2014 excludes realized
and unrealized gains on commodity
swaps of $14,552 and $4,660,
respectively.
(11) Refinery direct operating expense is
a per barrel measurement calculated
by dividing direct operating
expenses at our refineries by the
applicable refinery's total
throughput volumes.
(12) We compare our Big Spring refinery's
operating margin to the Gulf Coast
3/2/1 crack spread. A Gulf Coast
3/2/1 crack spread is calculated
assuming that three barrels of WTI
Cushing crude oil are converted, or
cracked, into two barrels of Gulf
Coast conventional gasoline and one
barrel of Gulf Coast ultra-low
sulfur diesel.
We compare our Krotz Springs
refinery's operating margin to the
Gulf Coast 2/1/1 high sulfur diesel
crack spread. A Gulf Coast 2/1/1
high sulfur diesel crack spread is
calculated assuming that two
barrels of LLS crude oil are
converted into one barrel of Gulf
Coast conventional gasoline and one
barrel of Gulf Coast high sulfur
diesel.
(13) The WTI Cushing less WTI Midland
spread represents the differential
between the average price per
barrel of WTI Cushing crude oil and
the average price per barrel of WTI
Midland crude oil. The WTI Cushing
less WTS, or sweet/sour, spread
represents the differential between
the average price per barrel of WTI
Cushing crude oil and the average
price per barrel of WTS crude oil.
The LLS less WTI Cushing spread
represents the differential between
the average price per barrel of LLS
crude oil and the average price per
barrel of WTI Cushing crude oil.
The Brent less LLS spread
represents the differential between
the average price per barrel of
Brent crude oil and the average
price per barrel of LLS crude oil.
The Brent less WTI Cushing spread
represents the differential between
the average price per barrel of
Brent crude oil and the average
price per barrel of WTI Cushing
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
products produced from processing
crude and other refinery feedstocks
through the crude units and other
conversion units at the refineries.
(16) Refinery utilization represents
average daily crude oil throughput
divided by crude oil capacity,
excluding planned periods of
downtime for maintenance and
turnarounds.
(17) Net sales and cost of sales include
asphalt purchases sold as part of
the supply and offtake arrangement
of $0 and $37,409 for the three
months ended December 31, 2015 and
2014, respectively, and $24,988 and
$136,818 for the years ended
December 31, 2015 and 2014,
respectively. The volumes
associated with these sales are
excluded from the Key Operating
Statistics.
(18) 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.
(19) Blended asphalt represents base
material asphalt that has been
blended with other materials
necessary to sell the asphalt as a
finished product.
(20) Non-blended asphalt represents base
material asphalt and other
components that require additional
blending before being sold as a
finished product.
(21) 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.
Asphalt margin for the three months
and year ended December 31, 2015
excludes a loss of $1,662 and
$8,118, respectively, resulting
from a price adjustment related to
asphalt inventory. This loss is
included in the operating income
(loss) of the asphalt segment.
(22) At December 31, 2015, we had 309
retail convenience stores of which
298 sold fuel. At December 31,
2014, we had 295 retail convenience
stores of which 283 sold fuel.
The 14 stores acquired in mid-
August 2015 have been included in
the per site key operating
statistics only for the period
after acquisition.
(23) Retail fuel margin represents the
difference between retail fuel
sales revenue and the net cost of
purchased retail fuel, including
transportation costs and associated
excise taxes, expressed on a cents-
per-gallon basis. Retail fuel
margins are frequently used in the
retail industry to measure
operating results related to retail
fuel sales.
(24) Retail fuel sales price per gallon
represents the average sales price
for retail fuels sold through our
retail convenience stores.
(25) 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: Stacey Hudson, Investor Relations Manager
Alon USA Energy, Inc.
972-367-3808
Investors: Jack Lascar/Stephanie
Zhadkevich
Dennard § Lascar Associates, LLC
713-529-6600
Media: Blake Lewis
Lewis Public Relations
214-635-3020
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alon-usa-energy-reports-fourth-quarter-and-full-year-2015-results-300225833.html
SOURCE Alon USA Energy, Inc.
