ALON USA PARTNERS LP DALLAS, May 8, 2017 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the first quarter of 2017. Net income available to stockholders for the first quarter of 2017 was $7.3 million, or $0.10 per share, compared to net loss available to stockholders of $(35.5) million, or $(0.51) per share, for the same period last year. Excluding special items, Alon recorded net income available to stockholders of $8.8 million, or $0.12 per share, for the first quarter of 2017, compared to net loss available to stockholders of $(29.2) million, or $(0.42) per share, for the same period last year.
Alan Moret, CEO, commented, "We are very pleased with our strong operational performance in the first quarter of 2017, with both of our refineries setting quarterly total throughput records. Our operations were complemented by an improvement in our benchmark Gulf Coast crack spreads relative to the fourth quarter of 2016 and the same quarter last year. Our first quarter results also benefited from the reduction to RINs expense that was booked during the quarter. We have been encouraged by the positive trends we have seen in refining into the second quarter of 2017, including improved discounts for Midland-priced crudes and improved crack spreads.
"The Big Spring refinery achieved record quarterly total throughput of almost 78,000 barrels per day in the first quarter of 2017. The refinery operating margin of $10.32 per barrel benefited from a strong wholesale marketing environment. Direct operating expense was only $3.54 per barrel as a result of efficient operations. We expect total throughput at the Big Spring refinery to average 73,000 barrels per day for the second quarter of 2017 and 75,000 barrels per day for the full year of 2017.
"The Krotz Springs refinery ran very well in the first quarter of 2017, with total throughput exceeding 77,000 barrels per day setting a new record under our ownership. The refinery operating margin of $5.31 per barrel does not include the $27.7 million benefit from the renewable fuel standard exemption. As was previously announced, in February 2017 the EPA approved a small refinery exemption for the Krotz Springs refinery from the requirements of the renewable fuel standard for the 2016 calendar year. On an after-tax basis, the impact of the exemption was $19.2 million or $0.27 per share. The Krotz Springs refinery's direct operating expense of $3.21 per barrel was very low and reflects continued efforts to control costs at the refinery. We expect total throughput at the Krotz Springs refinery to average 75,000 barrels per day for the second quarter of 2017 and 74,000 barrels per day for the full year of 2017.
"Turning to our retail segment, our fuel sales volumes increased by 6.2 percent in the first quarter of 2017 relative to the same quarter last year, despite a lower store count in the first quarter of 2017. Same-store fuel sales volumes were up 6.7 percent in the first quarter of 2017 compared to the first quarter of 2016. We continue to expect this business to improve as activity in the Permian Basin accelerates and as summer driving season begins."
Shai Even, Senior Vice President and CFO, commented, "The profitability of our California renewable fuels facility in the first quarter of 2017 was negatively impacted by the expiration of the federal blender's tax credit on December 31, 2016. As a result, the facility generated a small operating loss in the first quarter of 2017. However, if the blender's tax credit is reinstated and becomes effective retroactively to the beginning of 2017, we will record additional pre-tax income of $8.8 million before the effect of non-controlling interest. Total throughput for the first quarter of 2017 averaged approximately 2,700 barrels per day."
FIRST QUARTER 2017
Special items reduced net income by $1.4 million for the first quarter of 2017 primarily as a result of employee retention expenses of $2.0 million and expenses related to the Delek merger of $2.0 million, partially offset by gains of $1.7 million related to an asphalt inventory adjustment and $0.5 million associated with gains recognized on disposition of assets, before income tax and non-controlling interest impacts of $0.4 million. Special items increased net loss by $6.3 million for the first quarter of 2016 primarily as a result of employee retention expenses of $4.7 million, unrealized losses of $3.3 million associated with commodity swaps and $2.1 million associated with losses recognized on disposition of assets, before income tax and non-controlling interest impacts of $3.8 million.
The combined total refinery average throughput for the first quarter of 2017 was 155,081 barrels per day ("bpd"), consisting of 77,754 bpd at the Big Spring refinery and 77,327 bpd at the Krotz Springs refinery, compared to a combined total refinery average throughput of 138,998 bpd for the first quarter of 2016, consisting of 67,536 bpd at the Big Spring refinery and 71,462 bpd at the Krotz Springs refinery. During the first quarter of 2017, both of the Big Spring and Krotz Springs refineries reported the highest total quarterly average throughput since their respective acquisitions. The reduced throughput at our Big Spring refinery during the first quarter of 2016 was the result of planned downtime to complete a reformer regeneration and catalyst replacement for our diesel hydrotreater unit. The reduced throughput at the Krotz Springs refinery during the first quarter of 2016 was the result of our election to reduce the crude rate in order to optimize the refinery yield.
Refinery operating margin at the Big Spring refinery was $10.32 per barrel for the first quarter of 2017 compared to $7.77 per barrel for the same period in 2016. This increase in operating margin was primarily due to a higher Gulf Coast 3/2/1 crack spread and a widening of the WTI Cushing to WTS spread, partially offset by the increased premium in WTI Midland compared to WTI Cushing, increased RINs costs and a reduced benefit from the contango market environment which increased the cost of crude.
Refinery operating margin at the Krotz Springs refinery was $5.31 per barrel for the first quarter of 2017 compared to $1.59 per barrel for the same period in 2016. This increase in operating margin was primarily due to a higher Gulf Coast 2/1/1 high sulfur diesel crack spread and reduced RINs costs, partially offset by the increased premium in WTI Midland compared to WTI Cushing and a reduced benefit from the contango market environment which increased the cost of crude.
In February 2017, the EPA approved a small refinery exemption for the Krotz Springs refinery from the requirements of the renewable fuel standard for the 2016 calendar year, resulting in a reduction to RINs expense of $27.7 million in the first quarter of 2017.
The average Gulf Coast 3/2/1 crack spread was $13.75 per barrel for the first quarter of 2017 compared to $11.24 per barrel for the same period in 2016. The average Gulf Coast 2/1/1 high sulfur diesel crack spread was $9.74 per barrel for the first quarter of 2017 compared to $6.74 per barrel for the same period in 2016.
The average WTI Cushing to WTI Midland spread for the first quarter of 2017 was $(0.64) per barrel compared to $(0.13) per barrel for the same period in 2016. The average WTI Cushing to WTS spread for the first quarter of 2017 was $1.27 per barrel compared to $(0.10) per barrel for the same period in 2016. The average LLS to WTI Cushing spread for the first quarter of 2017 was $1.58 per barrel compared to $1.60 per barrel for the same period in 2016. The average Brent to WTI Cushing spread for the first quarter of 2017 was $1.66 per barrel compared to $0.49 per barrel for the same period in 2016. The average Brent to LLS spread for the first quarter of 2017 was $(0.13) per barrel compared to $(0.89) per barrel for the same period in 2016.
The average RINs cost effect on the Big Spring refinery operating margin was $0.59 per barrel for the first quarter of 2017, compared to $0.13 per barrel for the same period in 2016. The average RINs cost effect on the Krotz Springs refinery operating margin, excluding the impact of the 2016 exemption, was $1.49 per barrel for the first quarter of 2017, compared to $1.60 per barrel for the same period in 2016.
The contango environment in the first quarter of 2017 created an average cost of crude benefit of $1.00 per barrel compared to an average cost of crude benefit of $1.83 per barrel for the same period in 2016.
Our California renewable fuels facility generated operating income (loss) of $(2.4) million for the first quarter of 2017, compared to $7.2 million for the first quarter of 2016. The decrease was primarily due to the expiration of the blender's tax credit on December 31, 2016.
Asphalt margins for the first quarter of 2017 were $78.45 per ton compared to $84.16 per ton for the same period in 2016. On a cash basis (i.e., excluding inventory effects), asphalt margins in the first quarter of 2017 were $74.39 per ton compared to $91.12 per ton in the first quarter of 2016.
Retail fuel margins decreased to 19.5 cents per gallon in the first quarter of 2017 from 19.9 cents per gallon in the first quarter of 2016. Retail fuel sales volume increased to 53.1 million gallons in the first quarter of 2017 from 50.0 million gallons in the first quarter of 2016.
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 8, 2017 to stockholders of record at the close of business on May 22, 2017.
CONFERENCE CALL
Alon has scheduled a conference call, which will be broadcast live over the Internet on Tuesday, May 9, 2017, at 12:30 p.m. Eastern Time (11:30 a.m. Central Time), to discuss the first quarter 2017 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 16, 2017 and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13660045#. 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 owns a majority interest in a renewable fuels facility in California, with a throughput capacity of 3,000 barrels per day. 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, 2016, IS UNAUDITED)
March 31,
---------
2017 2016
---- ----
(dollars in thousands, except per share
data)
STATEMENTS OF OPERATIONS DATA:
Net sales (1) $1,150,593 $849,973
Operating costs and expenses:
Cost of sales 972,874 735,144
Direct operating
expenses 64,242 68,617
Selling, general and
administrative expenses
(2) 49,225 48,701
Depreciation and
amortization (3) 36,547 34,862
------ ------
Total operating costs
and expenses 1,122,888 887,324
--------- -------
Gain (loss) on
disposition of assets 476 (2,088)
--- ------
Operating income (loss) 28,181 (39,439)
Interest expense (15,117) (18,307)
Equity earnings (losses)
of investees (133) 378
Other income (loss), net (89) 72
--- ---
Income (loss) before
income tax expense
(benefit) 12,842 (57,296)
Income tax expense
(benefit) 2,568 (21,236)
----- -------
Net income (loss) 10,274 (36,060)
Net income (loss)
attributable to non-
controlling interest 2,947 (523)
Net income (loss)
available to
stockholders $7,327 $(35,537)
====== ========
Earnings (loss) per
share, basic $0.10 $(0.51)
===== ======
Weighted average shares
outstanding, basic (in
thousands) 71,490 70,143
====== ======
Earnings (loss) per
share, diluted $0.10 $(0.51)
===== ======
Weighted average shares
outstanding, diluted
(in thousands) 71,577 70,143
====== ======
Cash dividends per share $0.15 $0.15
===== =====
CASH FLOW DATA:
Net cash provided by (used in):
Operating activities $82,483 $(29,351)
Investing activities (13,239) (47,017)
Financing activities (19,417) 35,624
OTHER DATA:
Adjusted net income
(loss) available to
stockholders (4) $8,773 $(29,233)
Adjusted earnings (loss)
per share (4) $0.12 $(0.42)
Adjusted EBITDA (5) $64,030 $1,294
Capital expenditures (6) 13,067 23,446
Capital expenditures for
turnarounds and
catalysts 1,349 16,610
March 31, December 31,
2017 2016
---- ----
(dollars in thousands)
BALANCE SHEET DATA (end of period):
Cash and cash
equivalents $186,129 $136,302
Working capital (7) 2,976 25,789
Total assets (7) 2,112,204 2,095,301
Total debt 516,319 527,966
Total debt less cash and
cash equivalents 330,190 391,664
Total equity 581,345 582,413
REFINING AND MARKETING SEGMENT
For the Three Months Ended
March 31,
---------
2017 2016
---- ----
(dollars in thousands, except per barrel
data and pricing statistics)
STATEMENTS
OF
OPERATIONS
DATA:
Net sales
(8) $1,006,629 $696,613
Operating
costs and
expenses:
Cost of
sales 871,482 626,036
Direct
operating
expenses 57,654 62,793
Selling,
general
and
administrative
expenses 21,617 18,275
Depreciation
and
amortization 31,353 29,784
------ ------
Total
operating
costs and
expenses 982,106 736,888
Gain
(loss) on
disposition
of assets 2 (2,088)
Operating
income
(loss) $24,525 $(42,363)
======= ========
KEY
OPERATING
STATISTICS:
Per barrel
of
throughput:
Refinery
operating
margin -
Big
Spring
(9) $10.32 $7.77
Refinery
operating
margin -
Krotz
Springs
(9) 5.31 1.59
California
renewable
fuel
operating
margin
(10) 14.96 153.64
Refinery
direct
operating
expense -
Big
Spring
(11) 3.54 4.07
Refinery
direct
operating
expense -
Krotz
Springs
(11) 3.21 3.83
California
renewable
fuel
direct
operating
expense
(11) 14.56 56.41
Capital
expenditures $6,554 $18,559
Capital
expenditures
for
turnarounds
and
catalysts 1,349 16,610
PRICING
STATISTICS:
Crack
spreads
(3/2/1)
(per
barrel):
Gulf Coast
(12) $13.75 $11.24
Crack
spreads
(2/1/1)
(per
barrel):
Gulf Coast
high
sulfur
diesel
(12) $9.74 $6.74
WTI
Cushing
crude oil
(per
barrel) $51.78 $33.30
Crude oil
differentials
(per
barrel):
WTI
Cushing
less WTI
Midland
(13) $(0.64) $(0.13)
WTI
Cushing
less WTS
(13) 1.27 (0.10)
LLS less
WTI
Cushing
(13) 1.58 1.60
Brent less
WTI
Cushing
(13) 1.66 0.49
Brent less
LLS (13) (0.13) (0.89)
Product
prices
(dollars
per
gallon):
Gulf Coast
unleaded
gasoline $1.56 $1.07
Gulf Coast
ultra-
low
sulfur
diesel 1.57 1.03
Gulf Coast
high
sulfur
diesel 1.45 0.91
Natural
gas (per
MMBtu) 3.07 1.98
THROUGHPUT
AND
PRODUCTION
DATA: For the Three Months Ended
BIG SPRING REFINERY
March 31,
---------
2017 2016
---- ----
bpd % bpd %
Refinery throughput:
WTS crude 30,301 39.0 36,554 54.1
WTI crude 42,877 55.1 27,760 41.1
Blendstocks 4,576 5.9 3,222 4.8
----- --- ----- ---
Total
refinery
throughput
(14) 77,754 100.0 67,536 100.0
====== ===== ====== =====
Refinery production:
Gasoline 38,690 49.9 34,100 50.5
Diesel/jet 28,871 37.2 22,682 33.6
Asphalt 2,893 3.7 3,148 4.6
Petrochemicals 4,530 5.8 3,617 5.3
Other 2,633 3.4 4,027 6.0
----- --- ----- ---
Total
refinery
production
(15) 77,617 100.0 67,574 100.0
====== ===== ====== =====
Refinery utilization
(16) 100.2% 93.2%
THROUGHPUT
AND
PRODUCTION
DATA: For the Three Months Ended
KROTZ SPRINGS REFINERY
March 31,
---------
2017 2016
---- ----
bpd % bpd %
Refinery throughput:
WTI crude 22,633 29.3 13,797 19.3
Gulf Coast
sweet crude 49,958 64.6 49,350 69.1
Blendstocks 4,736 6.1 8,315 11.6
----- --- ----- ----
Total
refinery
throughput
(14) 77,327 100.0 71,462 100.0
====== ===== ====== =====
Refinery production:
Gasoline 38,255 48.7 36,274 49.7
Diesel/jet 30,772 39.1 26,989 37.0
Heavy Oils 1,244 1.6 1,534 2.1
Other 8,339 10.6 8,157 11.2
----- ---- ----- ----
Total
refinery
production
(15) 78,610 100.0 72,954 100.0
====== ===== ====== =====
Refinery utilization
(16) 98.1% 85.3%
THROUGHPUT
AND
PRODUCTION
DATA: For the Three Months Ended
CALIFORNIA RENEWABLE FUELS FACILITY
March 31,
---------
2017 2016
---- ----
bpd % bpd %
Throughput:
Tallow/
vegetable
oils 2,361 88.5 2,606 100.0
Other 305 11.5 - -
Total
throughput
(14) 2,666 100.0 2,606 100.0
===== ===== ===== =====
Production:
Renewable
gasoline 300 11.5 - -
Renewable
diesel 2,107 80.6 1,994 81.0
Renewable
jet 150 5.7 260 10.6
Naphtha 57 2.2 208 8.4
Total
production
(15) 2,614 100.0 2,462 100.0
===== ===== ===== =====
ASPHALT SEGMENT
For the Three Months Ended
March 31,
---------
2017 2016
---- ----
(dollars in thousands, except per ton
data)
STATEMENTS OF OPERATIONS DATA:
Net sales (17) $44,821 $53,499
Operating costs and expenses:
Cost of sales (17) (18) 36,283 43,865
Direct operating expenses 6,588 5,824
Selling, general and
administrative expenses 2,212 3,198
Depreciation and amortization 1,219 1,260
----- -----
Total operating costs and expenses 46,302 54,147
------ ------
Operating loss (21) $(1,481) $(648)
======= =====
KEY OPERATING STATISTICS:
Blended asphalt sales volume (tons
in thousands) (19) 65 85
Non-blended asphalt sales volume
(tons in thousands) (20) 22 29
Blended asphalt sales price per
ton (19) $427.98 $413.78
Non-blended asphalt sales price
per ton (20) 163.86 145.17
Asphalt margin per ton (21) 78.45 84.16
Capital expenditures $1,482 $740
RETAIL SEGMENT
For the Three Months Ended
March 31,
---------
2017 2016
---- ----
(dollars in thousands, except per gallon
data)
STATEMENTS OF OPERATIONS DATA:
Net sales (1) $190,143 $162,971
Operating costs and expenses:
Cost of sales (18) 156,109 128,353
Selling, general and
administrative expenses 25,203 27,037
Depreciation and
amortization 3,291 3,399
----- -----
Total operating costs
and expenses 184,603 158,789
------- -------
Gain on disposition of
assets 474 -
--- ---
Operating income $6,014 $4,182
====== ======
KEY OPERATING STATISTICS:
Number of stores (end of
period) (22) 304 309
Retail fuel sales
(thousands of gallons) 53,101 50,005
Retail fuel sales
(thousands of gallons
per site per month)
(22) 60 56
Retail fuel margin
(cents per gallon) (23) 19.5 19.9
Retail fuel sales price
(dollars per gallon)
(24) $2.14 $1.70
Merchandise sales $76,332 $77,825
Merchandise sales (per
site per month) (22) $84 $84
Merchandise margin (25) 30.9% 31.5%
Capital expenditures $4,945 $2,711
(1) Includes excise taxes on sales by the retail segment
of $20,725 and $19,525 for the three months ended
March 31, 2017 and 2016, respectively.
(2) Includes corporate headquarters selling, general and
administrative expenses of $193 and $191 for the
three months ended March 31, 2017 and 2016,
respectively, which are not allocated to our three
operating segments.
(3) Includes corporate depreciation and amortization of
$684 and $419 for the three months ended March 31,
2017 and 2016, 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
expenses related to Delek merger, after-tax gains
on asphalt inventory adjustment, after-tax
unrealized 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,
---------
2017 2016
---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $7,327 $(35,537)
Exclude adjustments:
Employee retention expense 2,000 4,700
Expenses related to Delek merger 2,000 -
(Gain) on asphalt inventory adjustment (1,713) -
Unrealized losses on commodity swaps - 3,333
(Gain) loss on disposition of assets (476) 2,088
-----
Total adjustments 1,811 10,121
Income tax impact related to adjustments (362) (3,751)
Non-controlling interest impact related
to adjustments (3) (66)
===
Adjusted net income (loss) available to
stockholders $8,773 $(29,233)
===
Adjusted earnings (loss) per share $0.12 $(0.42)
===
(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
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
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, 2017 and 2016:
For the Three Months Ended
March 31,
---------
2017 2016
---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $7,327 $(35,537)
Net income (loss) attributable to
non-controlling interest 2,947 (523)
Income tax expense (benefit) 2,568 (21,236)
Interest expense 15,117 18,307
Depreciation and amortization 36,547 34,862
(Gain) loss on disposition of assets (476) 2,088
Unrealized losses on commodity swaps - 3,333
Adjusted EBITDA $64,030 $1,294
======= ======
Adjusted EBITDA does not exclude
gains of $1,713 and $0 for the
three months ended March 31, 2017
and 2016, respectively, resulting
from a price adjustment related to
asphalt inventory.
(6) Includes corporate capital
expenditures of $86 and $1,436 for
the three months ended March 31,
2017 and 2016, respectively, which
are not allocated to our three
operating segments.
(7) During the three months ended March
31, 2017, we adopted the FASB's
recently issued accounting guidance
simplifying the presentation of
deferred income taxes. As a result
of adopting this guidance, our
current deferred income tax asset
that had previously been included
as a current asset in our
consolidated balance sheets has
been reclassified as a reduction of
our non-current deferred income
tax liability. These changes have
been applied retrospectively to all
periods presented.
(8) 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.
(9) 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,
2017 excludes a benefit of $27,746
related to the EPA approval of a
small refinery exemption for the
Krotz Springs refinery from the
requirements of the renewable fuel
standard for the 2016 calendar
year. The refinery operating margin
for the three months ended March
31, 2016 excludes realized and
unrealized gains on commodity swaps
of $366.
(10) The California renewable fuels
facility operating margin is a per
barrel measurement calculated by
dividing the facility's margin
between net sales and cost of sales
by the facility's throughput
volumes. Included in net sales are
environmental credits in the form
of RINs, low-carbon fuel standards
credits and blender's tax credits,
when effective, generated by the
facility.
During the three months ended March
31, 2017, we received no benefit
from the federal blender's tax
credit as this legislation expired
on December 31, 2016. However, if
the blender's tax credit is
reinstated and becomes effective
retroactive to the beginning of
2017, we will record additional
pre-tax income of $8,778, or
$37.00 per barrel of throughput,
related to product sales during the
first quarter of 2017 at the
California renewable fuels
facility.
(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 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. 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.
(14) Total refinery throughput represents
the total barrels per day of crude
oil and blendstock inputs in the
refinery production process. Total
throughput for the California
renewable fuels facility represents
the total barrels per day of tallow
and vegetable oils used by the
facility for the period following
March 1, 2016.
(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.
Total production for the California
renewable fuels facility represents
the total barrels per day produced
from processing tallow and
vegetable oils through the
facility's units for the period
following March 1, 2016.
(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 a
supply and offtake arrangement of
$13,397 and $14,118 for the three
months ended March 31, 2017 and
2016, 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 excludes gains of
$1,713 and $0 for the three months
ended March 31, 2017 and 2016,
respectively, resulting from a
price adjustment related to asphalt
inventory. These gains are included
in operating loss of the asphalt
segment.
(22) At March 31, 2017, we had 304 retail
convenience stores of which 294
sold fuel. At March 31, 2016, we
had 309 retail convenience stores
of which 298 sold fuel.
(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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alon-usa-energy-inc-reports-first-quarter-2017-results-300452872.html
SOURCE Alon USA Energy, Inc.
