ALON USA PARTNERS LP DALLAS, May 4, 2016 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the first quarter of 2016. Net loss available to stockholders for the first quarter of 2016 was $(35.5) million, or $(0.51) per share, compared to net income available to stockholders of $26.9 million, or $0.39 per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(29.2) million, or $(0.42) per share, for the first quarter of 2016, compared to net income available to stockholders of $20.9 million, or $0.30 per share, for the same period last year.
Paul Eisman, President and CEO, commented, "Our first quarter results were negatively impacted by depressed crack spreads, narrow crude differentials and by planned downtime at our Big Spring refinery, which included completing a reformer regeneration and a catalyst replacement for our diesel hydrotreater unit. The average benchmark crack spreads were approximately $6.50 per barrel lower than the average from the first quarter 2015. It is not unusual for us to experience margin weakness in the first quarter, and we are encouraged by improvements in the benchmark crack spreads going into the second quarter. Demand for gasoline is strong, and distillate demand is improving. We've also seen some improvement in the Midland differentials, which should support improved refinery profitability.
"The Big Spring refinery achieved a refinery operating margin of $7.77 per barrel and direct operating expense of $4.07 per barrel in the first quarter. We expect total throughput at the Big Spring refinery to average approximately 74,000 barrels per day for the second quarter and 73,000 barrels per day for the full year of 2016.
"The Krotz Springs refinery's results were also negatively impacted by weakness in crack spreads and narrow crude differentials. During the first quarter we elected to reduce the crude rate to improve the refinery yield structure and averaged just over 63,000 barrels per day of crude and 71,500 barrels per day of total throughput. In April, we performed maintenance on the fluid catalytic cracking unit at Krotz Springs, which reduced total throughput for the month. Based on the projected margin environment, we expect total throughput at the Krotz Springs refinery to average approximately 64,000 barrels per day for the second quarter and 72,000 barrels per day for the full year of 2016.
"Our retail business was negatively affected by economic conditions in the Permian Basin mostly offset by good performance in our newly constructed and acquired stores. As we move into spring, we see seasonally improved fuel and merchandise demand with resulting improved profitability.
"We were pleased with the performance of our asphalt segment in the first quarter, which is a seasonally weak quarter for asphalt demand. Relative to the first quarter of 2015, our asphalt sales volumes were up 37 percent, and our asphalt margin was $84 per ton. We maintain a positive outlook for this business as we head into the 2016 paving season based on improving demand in our markets and better efficiency within our business.
"In February, production began at AltAir, a renewable fuels project located at our southern California refinery, in which we own a majority interest. AltAir contributed operating income of $7.2 million in the first quarter. Based on current market conditions and operations consistent with our plan, it is our expectation that the operating income of AltAir will substantially offset the operating loss of our California refineries in 2016."
FIRST QUARTER 2016
Special items reduced net loss by $6.3 million for the first quarter of 2016 primarily as a result of an after-tax employee retention expense of $2.9 million, after-tax unrealized losses of $2.1 million associated with commodity swaps and $1.3 million associated with after-tax losses recognized on disposition of assets. Special items reduced net income by $6.0 million for the first quarter of 2015 primarily as a result of after-tax unrealized gains of $13.4 million associated with commodity swaps and $0.4 million associated with after-tax gains recognized on disposition of assets, partially offset by after-tax losses of $7.7 million related to an asphalt inventory adjustment.
The combined total refinery average throughput for the first quarter of 2016 was 138,998 barrels per day ("bpd"), consisting of 67,536 bpd at the Big Spring refinery and 71,462 bpd at the Krotz Springs refinery, compared to a combined total refinery average throughput of 145,229 bpd for the first quarter of 2015, consisting of 72,360 bpd at the Big Spring refinery and 72,869 bpd at the Krotz Springs refinery. The reduced throughput at our Big Spring refinery was the result of planned downtime to complete a reformer regeneration and catalyst replacement for our diesel hydrotreater unit in the beginning of the first quarter of 2016.
Refinery operating margin at the Big Spring refinery was $7.77 per barrel for the first quarter of 2016 compared to $13.80 per barrel for the same period in 2015. This decrease in operating margin was primarily due to a lower Gulf Coast 3/2/1 crack spread and a narrowing of both the WTI Cushing to WTI Midland and the WTI Cushing to WTS spreads, partially offset by the cost of crude benefit from the market moving further into contango in 2016.
Refinery operating margin at the Krotz Springs refinery was $1.59 per barrel for the first quarter of 2016 compared to $9.52 per barrel for the same period in 2015. This decrease in operating margin was primarily due to a lower Gulf Coast 2/1/1 high sulfur diesel crack spread and a narrowing of both the WTI Cushing to WTI Midland and the LLS to WTI Cushing spreads, partially offset by the cost of crude benefit from the market moving further into contango in 2016.
The average Gulf Coast 3/2/1 crack spread was $11.24 per barrel for the first quarter of 2016 compared to $17.74 per barrel for the same period in 2015. The average Gulf Coast 2/1/1 high sulfur diesel crack spread was $6.74 per barrel for the first quarter of 2016 compared to $13.41 per barrel for the same period in 2015.
The average WTI Cushing to WTI Midland spread for the first quarter of 2016 was $(0.13) per barrel compared to $1.95 per barrel for the same period in 2015. The average WTI Cushing to WTS spread for the first quarter of 2016 was $(0.10) per barrel compared to $1.76 per barrel for the same period in 2015. The average Brent to WTI Cushing spread for the first quarter of 2016 was $0.49 per barrel compared to $5.44 per barrel for the same period in 2015. The average LLS to WTI Cushing spread for the first quarter of 2016 was $1.60 per barrel compared to $2.64 per barrel for the same period in 2015. The average Brent to LLS spread for the first quarter of 2016 was $(0.89) per barrel compared to $0.84 per barrel for the same period in 2015.
The contango environment in the first quarter of 2016 created an average cost of crude benefit of $1.83 per barrel compared to an average cost of crude benefit of $0.65 per barrel for the same period in 2015.
Asphalt margins for the first quarter of 2016 were $84.16 per ton compared to $84.76 per ton for the same period in 2015. On a cash basis (i.e., excluding inventory effects), asphalt margins in the first quarter of 2016 were $91.12 per ton compared to $115.05 per ton in the first quarter of 2015.
Retail fuel margins decreased to 19.9 cents per gallon in the first quarter of 2016 from 23.6 cents per gallon in the first quarter of 2015. Retail fuel sales volume increased to 50.0 million gallons in the first quarter of 2016 from 46.1 million gallons in the first quarter of 2015. Merchandise margins decreased to 31.5% in the first quarter of 2016 from 33.2% in the first quarter of 2015. Merchandise sales increased to $77.8 million in the first quarter of 2016 from $76.1 million in the first quarter of 2015.
Alon also announced today that its Board of Directors has declared the regular quarterly cash dividend of $0.15 per share. The dividend is payable on June 6, 2016 to stockholders of record at the close of business on May 19, 2016.
CONFERENCE CALL
Alon has scheduled a conference call, which will be broadcast live over the Internet on Thursday, May 5, 2016, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time), to discuss the first quarter 2016 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 May 19, 2016 and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13634020#. 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 and an integrated wholesale marketing business. 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.
Contacts: Stacey Morris, Investor
Relations Manager
Alon USA Energy, Inc.
972-367-3808
Investors: Jack Lascar
Dennard § Lascar Associates,
LLC
713-529-6600
Media: Blake Lewis
Lewis Public Relations
214-635-3020
- Tables to follow -
ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
EARNINGS RELEASE
RESULTS
OF
OPERATIONS
-
FINANCIAL
DATA For the Three Months Ended
(ALL INFORMATION IN THIS PRESS RELEASE EXCEPT
FOR BALANCE SHEET DATA AS OF DECEMBER 31,
2015, IS UNAUDITED)
March 31,
---------
2016 2015
---- ----
(dollars in thousands, except per share
data)
STATEMENTS OF OPERATIONS
DATA:
Net
sales
(1) $849,973 $1,103,240
Operating costs and
expenses:
Cost of
sales 735,144 894,488
Direct
operating
expenses 68,617 64,205
Selling,
general
and
administrative
expenses
(2) 48,701 45,596
Depreciation
and
amortization
(3) 34,862 31,962
------ ------
Total
operating
costs
and
expenses 887,324 1,036,251
------- ---------
Gain
(loss)
on
disposition
of
assets (2,088) 572
------ ---
Operating
income
(loss) (39,439) 67,561
Interest
expense (18,307) (21,037)
Equity
earnings
(losses)
of
investees 378 (554)
Other
income,
net 72 46
--- ---
Income
(loss)
before
income
tax
expense
(benefit) (57,296) 46,016
Income
tax
expense
(benefit) (21,236) 11,961
------- ------
Net
income
(loss) (36,060) 34,055
Net
income
(loss)
attributable
to
non-
controlling
interest (523) 7,116
Net
income
(loss)
available
to
stockholders $(35,537) $26,939
======== =======
Earnings
(loss)
per
share,
basic $(0.51) $0.39
====== =====
Weighted
average
shares
outstanding,
basic
(in
thousands) 70,143 69,485
====== ======
Earnings
(loss)
per
share,
diluted $(0.51) $0.38
====== =====
Weighted
average
shares
outstanding,
diluted
(in
thousands) 70,143 71,142
====== ======
Cash
dividends
per
share $0.15 $0.10
===== =====
CASH FLOW DATA:
Net cash provided by
(used in):
Operating
activities $(29,351) $(19,221)
Investing
activities (47,017) (11,613)
Financing
activities 35,624 6,338
OTHER DATA:
Adjusted
net
income
(loss)
available
to
stockholders
(4) $(29,233) $20,910
Adjusted
earnings
(loss)
per
share
(4) $(0.42) $0.30
Adjusted
EBITDA
(5) $1,294 $80,040
Capital
expenditures
(6) 23,446 10,749
Capital
expenditures
for
turnarounds
and
catalysts 16,610 2,333
March 31, December 31,
2016 2015
---- ----
BALANCE
SHEET
DATA
(end of
period): (dollars in thousands)
Cash
and
cash
equivalents $193,383 $234,127
Working
capital 45,323 78,694
Total
assets 2,213,210 2,176,138
Total
debt 554,062 555,962
Total
debt
less
cash
and
cash
equivalents 360,679 321,835
Total
equity 659,499 664,160
REFINING AND MARKETING
SEGMENT
For the Three Months Ended
March 31,
---------
2016 2015
---- ----
(dollars in thousands, except per barrel
data and pricing statistics)
STATEMENTS OF OPERATIONS
DATA:
Net
sales
(7) $696,613 $959,492
Operating costs and
expenses:
Cost of
sales 626,036 783,391
Direct
operating
expenses 62,793 56,326
Selling,
general
and
administrative
expenses 18,275 17,339
Depreciation
and
amortization 29,784 27,311
------ ------
Total
operating
costs
and
expenses 736,888 884,367
Gain
(loss)
on
disposition
of
assets (2,088) 522
Operating
income
(loss) $(42,363) $75,647
======== =======
KEY OPERATING
STATISTICS:
Per barrel of
throughput:
Refinery
operating
margin
- Big
Spring
(8) $7.77 $13.80
Refinery
operating
margin
-
Krotz
Springs
(8) 1.59 9.52
Refinery
direct
operating
expense
- Big
Spring
(9) 4.07 3.60
Refinery
direct
operating
expense
-
Krotz
Springs
(9) 3.83 3.80
Capital
expenditures $18,559 $4,406
Capital
expenditures
for
turnarounds
and
catalysts 16,610 2,333
PRICING STATISTICS:
Crack spreads (3/2/1)
(per barrel):
Gulf
Coast
(10) $11.24 $17.74
Crack spreads (2/1/1)
(per barrel):
Gulf
Coast
high
sulfur
diesel
(10) $6.74 $13.41
WTI
Cushing
crude
oil
(per
barrel) $33.30 $48.48
Crude oil differentials
(per barrel):
WTI
Cushing
less
WTI
Midland
(11) $(0.13) $1.95
WTI
Cushing
less
WTS
(11) (0.10) 1.76
LLS
less
WTI
Cushing
(11) 1.60 2.64
Brent
less
LLS
(11) (0.89) 0.84
Brent
less
WTI
Cushing
(11) 0.49 5.44
Product prices (dollars
per gallon):
Gulf
Coast
unleaded
gasoline $1.07 $1.52
Gulf
Coast
ultra-
low
sulfur
diesel 1.03 1.69
Gulf
Coast
high
sulfur
diesel 0.91 1.55
Natural
gas
(per
MMBtu) 1.98 2.81
THROUGHPUT AND
PRODUCTION
DATA: For the Three Months Ended
BIG SPRING REFINERY
March 31,
---------
2016 2015
---- ----
bpd % bpd %
Refinery throughput:
WTS crude 36,554 54.1 44,865 62.0
WTI crude 27,760 41.1 24,137 33.4
Blendstocks 3,222 4.8 3,358 4.6
----- --- ----- ---
Total refinery
throughput (12) 67,536 100.0 72,360 100.0
====== ===== ====== =====
Refinery production:
Gasoline 34,100 50.5 36,192 49.7
Diesel/jet 22,682 33.6 26,086 35.9
Asphalt 3,148 4.6 3,278 4.5
Petrochemicals 3,617 5.3 4,810 6.6
Other 4,027 6.0 2,394 3.3
----- --- ----- ---
Total refinery
production (13) 67,574 100.0 72,760 100.0
====== ===== ====== =====
Refinery utilization (14) 93.2% 94.5%
THROUGHPUT AND
PRODUCTION
DATA: For the Three Months Ended
KROTZ SPRINGS REFINERY
March 31,
---------
2016 2015
---- ----
bpd % bpd %
Refinery throughput:
WTI crude 13,797 19.3 30,353 41.7
Gulf Coast sweet
crude 49,350 69.1 37,038 50.8
Blendstocks 8,315 11.6 5,478 7.5
----- ---- ----- ---
Total refinery
throughput (12) 71,462 100.0 72,869 100.0
====== ===== ====== =====
Refinery production:
Gasoline 36,274 49.7 34,527 46.3
Diesel/jet 26,989 37.0 30,690 41.2
Heavy Oils 1,534 2.1 1,334 1.8
Other 8,157 11.2 7,995 10.7
----- ---- ----- ----
Total refinery
production (13) 72,954 100.0 74,546 100.0
====== ===== ====== =====
Refinery utilization (14) 85.3% 91.1%
ASPHALT SEGMENT
For the Three Months Ended
March 31,
---------
2016 2015
---- ----
(dollars in thousands, except per ton
data)
STATEMENTS OF OPERATIONS
DATA:
Net sales
(15) $53,499 $50,652
Operating costs and
expenses:
Cost of
sales
(15)
(16) 43,865 54,283
Direct
operating
expenses 5,824 7,879
Selling,
general
and
administrative
expenses 3,198 1,776
Depreciation
and
amortization 1,260 1,145
----- -----
Total
operating
costs
and
expenses 54,147 65,083
------ ------
Operating
loss (19) $(648) $(14,431)
===== ========
KEY OPERATING STATISTICS:
Blended
asphalt
sales
volume
(tons in
thousands)
(17) 85 65
Non-
blended
asphalt
sales
volume
(tons in
thousands)
(18) 29 18
Blended
asphalt
sales
price
per ton
(17) $413.78 $487.68
Non-
blended
asphalt
sales
price
per ton
(18) 145.17 390.83
Asphalt
margin
per ton
(19) 84.16 84.76
Capital
expenditures $740 $1,406
RETAIL SEGMENT
For the Three Months Ended
March 31,
---------
2016 2015
---- ----
(dollars in thousands, except per gallon
data)
STATEMENTS OF OPERATIONS DATA:
Net sales
(1) $162,971 $175,985
Operating costs and expenses:
Cost of
sales
(16) 128,353 139,703
Selling,
general
and
administrative
expenses 27,037 26,305
Depreciation
and
amortization 3,399 3,037
----- -----
Total
operating
costs
and
expenses 158,789 169,045
------- -------
Gain on
disposition
of
assets - 50
--- ---
Operating
income $4,182 $6,990
====== ======
KEY OPERATING STATISTICS:
Number of
stores
(end of
period)
(20) 309 293
Retail
fuel
sales
(thousands
of
gallons) 50,005 46,095
Retail
fuel
sales
(thousands
of
gallons
per site
per
month)
(20) 56 54
Retail
fuel
margin
(cents
per
gallon)
(21) 19.9 23.6
Retail
fuel
sales
price
(dollars
per
gallon)
(22) $1.70 $2.16
Merchandise
sales $77,825 $76,102
Merchandise
sales
(per
site per
month)
(20) $84 $87
Merchandise
margin
(23) 31.5% 33.2%
Capital
expenditures $2,711 $3,316
(1) Includes excise taxes on sales by
the retail segment of $19,525 and
$18,056 for the three months
ended March 31, 2016 and 2015,
respectively.
(2) Includes corporate headquarters
selling, general and
administrative expenses of $191
and $176 for the three months
ended March 31, 2016 and 2015,
respectively, which are not
allocated to our three operating
segments.
(3) Includes corporate depreciation
and amortization of $419 and $469
for the three months ended March
31, 2016 and 2015, respectively,
which are not allocated to our
three operating segments.
(4) 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 (loss) per share,
excluding after-tax employee
retention expense, after-tax
loss on asphalt inventory
adjustment, after-tax unrealized
(gains) losses on commodity swaps
and after-tax (gain) loss on
disposition of assets. Adjusted
net income (loss) available to
stockholders is not a recognized
measurement under GAAP; however,
the amounts included in adjusted
net income (loss) available to
stockholders are derived from
amounts included in our
consolidated financial
statements. 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
March 31,
---------
2016 2015
---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(35,537) $26,939
Plus: Employee retention
expense, net of tax 2,927 -
Plus: Loss on asphalt inventory
adjustment, net of tax - 7,739
Less: Unrealized (gains) losses
on commodity swaps, net of tax 2,076 (13,353)
Less: (Gain) loss on disposition
of assets, net of tax 1,301 (415)
----- ----
Adjusted net income (loss)
available to stockholders $(29,233) $20,910
======== =======
Adjusted earnings (loss) per
share * $(0.42) $0.30
====== =====
* 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 per
share.
(5) Adjusted EBITDA
represents
earnings before
net income
(loss)
attributable to
non-controlling
interest, income
tax expense
(benefit),
interest
expense,
depreciation and
amortization,
(gain) loss on
disposition of
assets 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 (loss)
attributable to
non-controlling
interest, income
tax expense
(benefit),
interest
expense, (gain)
loss on
disposition of
assets,
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
ended March 31,
2016 and 2015:
For the Three Months Ended
March 31,
---------
2016 2015
---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(35,537) $26,939
Net income (loss) attributable to
non-controlling interest (523) 7,116
Income tax expense (benefit) (21,236) 11,961
Interest expense 18,307 21,037
Depreciation and amortization 34,862 31,962
(Gain) loss on disposition of
assets 2,088 (572)
Unrealized (gains) losses on
commodity swaps 3,333 (18,403)
Adjusted EBITDA $1,294 $80,040
====== =======
Adjusted EBITDA does not exclude a
loss of $10,666 for the three
months ended March 31, 2015
resulting from a price adjustment
related to asphalt inventory.
(6) Includes corporate capital
expenditures of $1,436 and $1,621
for the three months ended March
31, 2016 and 2015, respectively,
which are not allocated to our
three operating segments.
(7) 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.
(8) 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 the refinery's
throughput volumes. Industry-
wide refining results are driven
and measured by the margins
between refined product prices
and the prices for crude oil,
which are referred to as crack
spreads. We compare our refinery
operating margins to these crack
spreads to assess our operating
performance relative to other
participants in our industry.
The refinery operating margin for
the three months ended March 31,
2016 excludes realized and
unrealized gains on commodity
swaps of $366.
The refinery operating margin for
the three months ended March 31,
2015 excludes realized and
unrealized gains on commodity
swaps of $29,843, as well as a
loss of $9,035 related
substantially to inventory
adjustments, which was not
included in cost of sales for the
Big Spring refinery and the Krotz
Springs refinery.
(9) 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.
(10) 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.
(11) 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.
(12) Total refinery throughput
represents the total barrels per
day of crude oil and blendstock
inputs in the refinery production
process.
(13) 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.
(14) Refinery utilization represents
average daily crude oil
throughput divided by crude oil
capacity, excluding planned
periods of downtime for
maintenance and turnarounds.
(15) Net sales and cost of sales
include asphalt purchases sold as
part of a supply and offtake
arrangement of $14,118 and
$11,918 for the three months
ended March 31, 2016 and 2015,
respectively. The volumes
associated with these sales are
excluded from the Key Operating
Statistics.
(16) 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.
(17) Blended asphalt represents base
material asphalt that has been
blended with other materials
necessary to sell the asphalt as
a finished product.
(18) Non-blended asphalt represents
base material asphalt and other
components that require
additional blending before being
sold as a finished product.
(19) 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 ended March 31, 2015
excludes a loss of $10,666
resulting from a price adjustment
related to asphalt inventory.
This loss is included in
operating loss above.
(20) At March 31, 2016, we had 309
retail convenience stores of
which 298 sold fuel. At March 31,
2015, we had 293 retail
convenience stores of which 282
sold fuel.
The 14 retail convenience stores
acquired in August 2015 have been
included in the per site key
operating statistics only for the
period after acquisition.
(21) 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.
(22) Retail fuel sales price per gallon
represents the average sales
price for retail fuels sold
through our retail convenience
stores.
(23) 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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alon-usa-energy-inc-reports-first-quarter-2016-results-300263225.html
SOURCE Alon USA Energy, Inc.
