ALON USA PARTNERS LP DALLAS, July 28, 2016 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the second quarter of 2016. Net loss available to stockholders for the second quarter of 2016 was $(20.4) million, or $(0.29) per share, compared to net income available to stockholders of $36.4 million, or $0.52 per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(14.9) million, or $(0.21) per share, for the second quarter of 2016, compared to net income available to stockholders of $46.4 million, or $0.67 per share, for the same period last year.
Net loss available to stockholders for the first half of 2016 was $(55.9) million, or $(0.80) per share, compared to net income available to stockholders of $63.3 million, or $0.91 per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(44.2) million, or $(0.63) per share, for the first half of 2016, compared to net income available to stockholders of $68.0 million, or $0.98 per share, for the same period last year.
Paul Eisman, President and CEO, commented, "The refining environment in the second quarter of 2016 remained challenging as crack spreads were pressured by high product inventories. The average Gulf Coast 3-2-1 benchmark crack spread for the second quarter of 2016 was approximately $6.50 per barrel lower than the average for the same period last year. We continue to optimize our operations and control our costs in this difficult environment.
"As previously discussed, the Big Spring refinery's second quarter results were negatively impacted by a power outage in late May. We estimate the lost opportunity cost and maintenance cost associated with the power outage negatively impacted Alon's operating income by approximately $10 million. Big Spring's refinery operating margin of $8.53 per barrel was negatively impacted by approximately $1.30 per barrel due to the unplanned downtime during the quarter. Despite the interruption to normal operations, the refinery achieved low operating costs of $3.59 per barrel. We expect to perform maintenance on the Big Spring refinery's reformer in August. As a result, we expect total throughput at the Big Spring refinery to average approximately 69,000 barrels per day for the third quarter and 70,000 barrels per day for the full year of 2016.
"The Krotz Springs refinery's results were negatively impacted by weakness in crack spreads, a larger premium in LLS crude relative to Brent crude and maintenance performed on the fluid catalytic cracking unit in the first half of April, which was previously discussed. We estimate the downtime associated with this maintenance work negatively impacted Krotz Springs' refinery operating margin by approximately $0.86 per barrel and Alon's operating income by approximately $5 million. Based on the projected margin environment, we expect total throughput at the Krotz Springs refinery to average approximately 63,000 barrels per day for the third quarter and 66,000 barrels per day for the full year of 2016.
"Our asphalt business performed very well in the second quarter with the onset of paving season. Relative to the second quarter of 2015, our asphalt sales volumes were up 43 percent, and our asphalt margin was up by 6 percent to $107 per ton. This business is benefiting from a stronger demand environment, as well as operational improvements implemented over recent quarters.
"Our retail results were negatively impacted by headwinds in the Permian Basin. However, we believe we are positioned well to benefit as the markets in which we operate improve and are expecting greater profitability in the second half of the year.
"The results of the AltAir renewable fuels project in California were negatively impacted by an increase in the price of feedstock costs (tallow) relative to the first quarter of 2016. A test run of soybean oil was successfully completed in late June, validating the feedstock flexibility of the unit."
SECOND QUARTER 2016
Special items increased net loss by $5.5 million for the second quarter of 2016 primarily as a result of employee retention expense of $2.0 million, losses of $2.0 million associated with an asphalt inventory adjustment and unrealized losses of $3.8 million associated with commodity swaps, before income tax and non-controlling interest impacts of $2.4 million. Special items reduced net income by $9.9 million for the second quarter of 2015 primarily as a result of employee retention expense of $1.3 million, losses of $3.3 million related to an asphalt inventory adjustment and unrealized losses of $10.5 million associated with commodity swaps, before income tax and non-controlling interest impacts of $5.2 million.
The combined total refinery average throughput for the second quarter of 2016 was 133,413 barrels per day ("bpd"), consisting of 71,153 bpd at the Big Spring refinery and 62,260 bpd at the Krotz Springs refinery, compared to a combined total refinery average throughput of 152,092 bpd for the second quarter of 2015, consisting of 75,491 bpd at the Big Spring refinery and 76,601 bpd at the Krotz Springs refinery. The reduced throughput at our Big Spring refinery was the result of unplanned downtime during the second quarter of 2016 due to a power outage caused by inclement weather, which affected multiple units. During the second quarter of 2016, we performed maintenance on the fluid catalytic cracking unit at the Krotz Springs refinery, which reduced total throughput for the quarter.
Refinery operating margin at the Big Spring refinery was $8.53 per barrel for the second quarter of 2016 compared to $17.22 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, a narrowing of the WTI Cushing to WTI Midland spread, a reduced cost of crude benefit from the contango market in 2016 and the unplanned refinery downtime discussed above, partially offset by a widening of the WTI Cushing to WTS spread.
Refinery operating margin at the Krotz Springs refinery was $3.96 per barrel for the second quarter of 2016 compared to $7.95 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, a narrowing of both the WTI Cushing to WTI Midland and the LLS to WTI Cushing spreads, the premium in LLS compared to Brent, the refinery downtime discussed above and a reduced cost of crude benefit from the contango market in 2016.
The average Gulf Coast 3/2/1 crack spread was $13.16 per barrel for the second quarter of 2016 compared to $19.71 per barrel for the same period in 2015. The average Gulf Coast 2/1/1 high sulfur diesel crack spread was $7.92 per barrel for the second quarter of 2016 compared to $10.21 per barrel for the same period in 2015.
The average WTI Cushing to WTI Midland spread for the second quarter of 2016 was $0.17 per barrel compared to $0.60 per barrel for the same period in 2015. The average WTI Cushing to WTS spread for the second quarter of 2016 was $0.75 per barrel compared to $(0.21) per barrel for the same period in 2015. The average Brent to WTI Cushing spread for the second quarter of 2016 was $(0.18) per barrel compared to $3.66 per barrel for the same period in 2015. The average LLS to WTI Cushing spread for the second quarter of 2016 was $2.04 per barrel compared to $6.28 per barrel for the same period in 2015. The average Brent to LLS spread for the second quarter of 2016 was $(1.64) per barrel compared to $0.32 per barrel for the same period in 2015.
The contango environment in the second quarter of 2016 created an average cost of crude benefit of $1.49 per barrel compared to an average cost of crude benefit of $1.90 per barrel for the same period in 2015.
Asphalt margins for the second quarter of 2016 were $106.90 per ton compared to $100.92 per ton for the same period in 2015. On a cash basis (i.e., excluding inventory effects), asphalt margins in the second quarter of 2016 were $105.55 per ton compared to $99.51 per ton in the second quarter of 2015.
Retail fuel margins increased to 20.8 cents per gallon in the second quarter of 2016 from 20.3 cents per gallon in the second quarter of 2015. Retail fuel sales volume increased to 50.9 million gallons in the second quarter of 2016 from 49.5 million gallons in the second quarter of 2015. Merchandise margins decreased to 31.0% in the second quarter of 2016 from 31.8% in the second quarter of 2015. Merchandise sales decreased to $83.7 million in the second quarter of 2016 from $84.9 million in the second quarter of 2015.
YEAR-TO-DATE 2016
Special items increased net loss by $11.8 million for the first half of 2016 primarily as a result of employee retention expenses of $6.7 million, losses of $2.0 million related to an asphalt inventory adjustment, unrealized losses of $7.1 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 $6.2 million. Special items reduced net income by $4.6 million for the first half of 2015 primarily as a result of employee retention expense of $1.3 million and losses of $14.0 million related to an asphalt inventory adjustment, partially offset by unrealized gains of $7.9 million associated with commodity swaps and $0.6 million associated with gains recognized on disposition of assets, before income tax and non-controlling interest impacts of $2.1 million.
The combined total refinery average throughput for the first half of 2016 was 136,206 bpd, consisting of 69,345 bpd at the Big Spring refinery and 66,861 bpd at the Krotz Springs refinery, compared to a combined total refinery average throughput of 148,679 bpd for the first half of 2015, consisting of 73,934 bpd at the Big Spring refinery and 74,745 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, as well as unplanned downtime during the second quarter of 2016 due to a power outage caused by inclement weather, which affected multiple units. The reduced throughput at the Krotz Springs refinery during the six months ended June 30, 2016 was the result of our election to reduce the crude rate to improve the refinery yield structure, as well as maintenance that was performed on the fluid catalytic cracking unit.
Refinery operating margin at the Big Spring refinery was $8.16 per barrel for the first half of 2016 compared to $15.56 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, a narrowing of both the WTI Cushing to WTI Midland and the WTI Cushing to WTS spreads and the refinery downtime discussed above, 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 $2.69 per barrel for the first half of 2016 compared to $8.71 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, a narrowing of both the WTI Cushing to WTI Midland and the LLS to WTI Cushing spreads, the premium in LLS compared to Brent and the refinery downtime discussed above, 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 for the first half of 2016 was $12.20 per barrel compared to $18.73 per barrel for the same period in 2015. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for the first half of 2016 was $7.33 per barrel compared to $11.79 per barrel for the same period in 2015.
The average WTI Cushing to WTI Midland spread for the first half of 2016 was $0.02 per barrel compared to $1.27 per barrel for the same period in 2015. The average WTI Cushing to WTS spread for the first half of 2016 was $0.32 per barrel compared to $0.76 per barrel for the same period in 2015. The average Brent to WTI Cushing spread for the first half of 2016 was $0.15 per barrel compared to $4.54 per barrel for the same period in 2015. The average LLS to WTI Cushing spread for the first half of 2016 was $1.82 per barrel compared to $4.48 per barrel for the same period in 2015. The average Brent to LLS spread for the first half of 2016 was $(1.26) per barrel compared to $0.57 per barrel for the same period in 2015.
The contango environment in the first half of 2016 created an average cost of crude benefit of $1.66 per barrel compared to an average cost of crude benefit of $1.28 per barrel for the same period in 2015.
Asphalt margins for the first half of 2016 were $97.96 per ton compared to $94.41 per ton for same period in 2015. On a cash basis (i.e., excluding inventory effects), asphalt margins in the first half of 2016 were $99.87 per ton compared to $105.77 per ton in the first half of 2015.
Retail fuel margins decreased to 20.4 cents per gallon in the first half of 2016 from 21.9 cents per gallon in the first half of 2015. Retail fuel sales volume increased to 100.9 million gallons in the first half of 2016 from 95.6 million gallons in the first half of 2015. Merchandise margins decreased to 31.3% in the first half of 2016 from 32.5% in the first half of 2015. Merchandise sales increased to $161.5 million in the first half of 2016 from $161.0 million in the first half 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 September 6, 2016 to stockholders of record at the close of business on August 19, 2016.
CONFERENCE CALL
Alon has scheduled a conference call, which will be broadcast live over the Internet on Friday, July 29, 2016, at 10:30 a.m. Eastern Time (9:30 a.m. Central Time), to discuss the second 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 August 12, 2016 and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13640012#. 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(ALL
INFORMATION IN THIS
PRESS RELEASE EXCEPT
FOR BALANCE SHEET DATA
AS OF DECEMBER 31,
2015, IS UNAUDITED) For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per share data)
STATEMENTS OF OPERATIONS
DATA:
Net sales (1) $1,008,388 $1,301,341 $1,858,361 $2,404,581
Operating costs and
expenses:
Cost of sales 871,394 1,069,931 1,606,538 1,964,419
Direct operating
expenses 63,182 62,856 131,799 127,061
Selling, general and
administrative expenses
(2) 51,644 49,193 100,345 94,789
Depreciation and
amortization (3) 36,985 31,267 71,847 63,229
------ ------ ------ ------
Total operating costs
and expenses 1,023,205 1,213,247 1,910,529 2,249,498
--------- --------- --------- ---------
Gain (loss) on
disposition of assets 6 - (2,082) 572
--- --- ------ ---
Operating income (loss) (14,811) 88,094 (54,250) 155,655
Interest expense (18,799) (18,217) (37,106) (39,254)
Equity earnings of
investees 4,305 1,828 4,683 1,274
Other income, net 146 13 218 59
--- --- --- ---
Income (loss) before
income tax expense
(benefit) (29,159) 71,718 (86,455) 117,734
Income tax expense
(benefit) (8,529) 23,856 (29,765) 35,817
------ ------ ------- ------
Net income (loss) (20,630) 47,862 (56,690) 81,917
Net income (loss)
attributable to non-
controlling interest (260) 11,452 (783) 18,568
---- ------
Net income (loss)
available to
stockholders $(20,370) $36,410 $(55,907) $63,349
======== ======= ======== =======
Earnings (loss) per
share, basic $(0.29) $0.52 $(0.80) $0.91
====== ===== ====== =====
Weighted average shares
outstanding, basic (in
thousands) 70,493 69,684 70,318 69,584
====== ====== ====== ======
Earnings (loss) per
share, diluted $(0.29) $0.50 $(0.80) $0.87
====== ===== ====== =====
Weighted average shares
outstanding, diluted
(in thousands) 70,493 72,501 70,318 72,395
====== ====== ====== ======
Cash dividends per share $0.15 $0.15 $0.30 $0.25
===== ===== ===== =====
CASH FLOW DATA:
Net cash provided by
(used in):
Operating activities $17,342 $135,112 $(12,009) $115,891
Investing activities (21,437) (22,332) (68,454) (33,945)
Financing activities 16,565 (39,415) 52,189 (33,077)
OTHER DATA:
Adjusted net income
(loss) available to
stockholders (4) $(14,916) $46,354 $(44,152) $67,993
Adjusted earnings (loss)
per share (4) $(0.21) $0.67 $(0.63) $0.98
Adjusted EBITDA (5) $30,430 $131,680 $31,724 $211,720
Capital expenditures (6) 13,784 20,302 37,230 31,051
Capital expenditures for
turnarounds and
catalysts 7,662 2,030 24,272 4,363
June 30, December 31,
2016 2015
---- ----
BALANCE SHEET DATA (end
of period): (dollars in thousands)
Cash and cash
equivalents $205,853 $234,127
Working capital 39,005 78,694
Total assets 2,245,464 2,176,138
Total debt 552,264 555,962
Total debt less cash and
cash equivalents 346,411 321,835
Total equity 626,907 664,160
REFINING AND MARKETING
SEGMENT
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per barrel data and pricing statistics)
STATEMENTS OF OPERATIONS
DATA:
Net sales (7) $829,913 $1,126,040 $1,526,526 $2,085,532
Operating costs and
expenses:
Cost of sales 746,324 940,861 1,372,360 1,724,252
Direct operating
expenses 56,913 55,966 119,706 112,292
Selling, general and
administrative expenses 18,930 18,940 37,205 36,279
Depreciation and
amortization 31,514 26,692 61,298 54,003
------ ------ ------ ------
Total operating costs
and expenses 853,681 1,042,459 1,590,569 1,926,826
Gain (loss) on
disposition of assets 9 - (2,079) 522
--- ---
Operating income (loss) $(23,759) $83,581 $(66,122) $159,228
======== ======= ======== ========
KEY OPERATING
STATISTICS:
Per barrel of
throughput:
Refinery operating
margin - Big Spring (8) $8.53 $17.22 $8.16 $15.56
Refinery operating
margin - Krotz Springs
(8) 3.96 7.95 2.69 8.71
Refinery direct
operating expense - Big
Spring (9) 3.59 3.54 3.83 3.56
Refinery direct
operating expense -
Krotz Springs (9) 4.10 3.49 3.96 3.64
Capital expenditures $11,560 $12,470 $30,119 $16,876
Capital expenditures for
turnarounds and
catalysts 7,662 2,030 24,272 4,363
PRICING STATISTICS:
Crack spreads (3/2/1)
(per barrel):
Gulf Coast (10) $13.16 $19.71 $12.20 $18.73
Crack spreads (2/1/1)
(per barrel):
Gulf Coast high sulfur
diesel (10) $7.92 $10.21 $7.33 $11.79
WTI Cushing crude oil
(per barrel) $45.48 $57.86 $39.39 $53.20
Crude oil differentials
(per barrel):
WTI Cushing less WTI
Midland (11) $0.17 $0.60 $0.02 $1.27
WTI Cushing less WTS
(11) 0.75 (0.21) 0.32 0.76
LLS less WTI Cushing
(11) 2.04 6.28 1.82 4.48
Brent less LLS (11) (1.64) 0.32 (1.26) 0.57
Brent less WTI Cushing
(11) (0.18) 3.66 0.15 4.54
Product prices (dollars
per gallon):
Gulf Coast unleaded
gasoline $1.42 $1.86 $1.25 $1.69
Gulf Coast ultra-low
sulfur diesel 1.34 1.83 1.19 1.76
Gulf Coast high sulfur
diesel 1.22 1.68 1.06 1.62
Natural gas (per MMBtu) 2.25 2.74 2.12 2.77
THROUGHPUT AND PRODUCTION
DATA: BIG SPRING REFINERY For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTS crude 25,698 36.1 29,605 39.2 31,126 44.9 37,193 50.3
WTI crude 43,040 60.5 43,659 57.8 35,400 51.0 33,952 45.9
Blendstocks 2,415 3.4 2,227 3.0 2,819 4.1 2,789 3.8
----- --- ----- --- ----- --- ----- ---
Total refinery throughput
(12) 71,153 100.0 75,491 100.0 69,345 100.0 73,934 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 33,744 47.6 37,755 49.8 33,922 49.0 36,978 49.8
Diesel/jet 26,627 37.6 28,052 37.0 24,655 35.6 27,074 36.5
Asphalt 2,572 3.6 2,479 3.3 2,860 4.2 2,876 3.9
Petrochemicals 3,354 4.7 4,915 6.5 3,485 5.0 4,863 6.5
Other 4,569 6.5 2,537 3.4 4,298 6.2 2,466 3.3
----- --- ----- --- ----- --- ----- ---
Total refinery production
(13) 70,866 100.0 75,738 100.0 69,220 100.0 74,257 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (14) 94.2% 100.4% 93.7% 97.5%
THROUGHPUT AND
PRODUCTION DATA:
KROTZ SPRINGS
REFINERY For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTI crude 15,921 25.5 29,429 38.4 14,859 22.2 29,888 40.0
Gulf Coast sweet
crude 42,624 68.5 45,069 58.8 45,987 68.8 41,076 55.0
Blendstocks 3,715 6.0 2,103 2.8 6,015 9.0 3,781 5.0
----- --- ----- --- ----- --- ----- ---
Total refinery
throughput (12) 62,260 100.0 76,601 100.0 66,861 100.0 74,745 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 31,112 49.0 35,511 45.4 33,693 49.4 35,021 45.8
Diesel/jet 24,201 38.1 32,496 41.5 25,595 37.5 31,599 41.4
Heavy Oils 959 1.5 1,378 1.8 1,246 1.8 1,356 1.8
Other 7,226 11.4 8,838 11.3 7,692 11.3 8,419 11.0
----- ---- ----- ---- ----- ---- ----- ----
Total refinery
production (13) 63,498 100.0 78,223 100.0 68,226 100.0 76,395 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization
(14) 79.1% 100.7% 82.2% 95.9%
ASPHALT SEGMENT
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per ton data)
STATEMENTS OF OPERATIONS DATA:
Net sales (15) $68,097 $69,900 $121,596 $120,552
Operating costs and expenses:
Cost of sales (15) (16) 51,326 60,771 95,191 115,054
Direct operating
expenses 6,269 6,890 12,093 14,769
Selling, general and
administrative expenses 4,047 2,755 7,245 4,531
Depreciation and
amortization 1,261 1,207 2,521 2,352
----- ----- ----- -----
Total operating costs
and expenses 62,903 71,623 117,050 136,706
------ ------ ------- -------
Operating loss (19) $5,194 $(1,723) $4,546 $(16,154)
====== ======= ====== ========
KEY OPERATING STATISTICS:
Blended asphalt sales
volume (tons in
thousands) (17) 158 108 243 173
Non-blended asphalt
sales volume (tons in
thousands) (18) 18 15 47 33
Blended asphalt sales
price per ton (17) $389.95 $505.54 $398.28 $498.83
Non-blended asphalt
sales price per ton
(18) 135.06 229.20 141.30 317.36
Asphalt margin per ton
(19) 106.90 100.92 97.96 94.41
Capital expenditures $335 $238 $1,075 $1,644
RETAIL SEGMENT
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per gallon data)
STATEMENTS OF OPERATIONS DATA:
Net sales (1) $187,262 $206,634 $350,233 $382,619
Operating costs and expenses:
Cost of sales (16) 150,628 169,532 278,981 309,235
Selling, general and
administrative expenses 28,484 27,322 55,521 53,627
Depreciation and
amortization 3,350 2,943 6,749 5,980
----- ----- ----- -----
Total operating costs
and expenses 182,462 199,797 341,251 368,842
------- ------- ------- -------
Gain on disposition of
assets (3) - (3) 50
--- --- --- ---
Operating income $4,797 $6,837 $8,979 $13,827
====== ====== ====== =======
KEY OPERATING STATISTICS:
Number of stores (end of
period) (20) 306 294 306 294
Retail fuel sales
(thousands of gallons) 50,877 49,511 100,882 95,606
Retail fuel sales
(thousands of gallons
per site per month)
(20) 57 58 57 56
Retail fuel margin
(cents per gallon) (21) 20.8 20.3 20.4 21.9
Retail fuel sales price
(dollars per gallon)
(22) $2.03 $2.46 $1.87 $2.32
Merchandise sales $83,673 $84,878 $161,498 $160,980
Merchandise sales (per
site per month) (20) $91 $96 $88 $91
Merchandise margin (23) 31.0% 31.8% 31.3% 32.5%
Capital expenditures $1,200 $6,202 $3,911 $9,518
(1) Includes excise taxes on sales by
the retail segment of $19,864 and
$19,369 for the three months
ended June 30, 2016 and 2015,
respectively, and $39,389 and
$37,425 for the six months ended
June 30, 2016 and 2015,
respectively.
(2) Includes corporate headquarters
selling, general and
administrative expenses of $183
and $176 for the three months
ended June 30, 2016 and 2015,
respectively, and $374 and $352
for the six months ended June 30,
2016 and 2015, respectively,
which are not allocated to our
three operating segments.
(3) Includes corporate depreciation
and amortization of $860 and $425
for the three months ended June
30, 2016 and 2015, respectively,
and $1,279 and $894 for the six
months ended June 30, 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 For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(20,370) $36,410 $(55,907) $63,349
Exclude adjustments:
Employee retention expense 2,000 1,334 6,700 1,334
Loss on asphalt inventory
adjustment 2,003 3,284 2,003 13,950
Unrealized (gains) losses on
commodity swaps 3,811 10,478 7,144 (7,925)
(Gain) loss on disposition of
assets (6) - 2,082 (572)
--- --- ----- ----
Total adjustments 7,808 15,096 17,929 6,787
Income tax impact related to
adjustments (2,302) (4,983) (6,070) (2,065)
Non-controlling interest impact
related to adjustments (52) (169) (104) (78)
--- ---- ---- ---
Adjusted net income (loss)
available to stockholders $(14,916) $46,354 $(44,152) $67,993
======== ======= ======== =======
Adjusted earnings (loss) per
share * $(0.21) $0.67 $(0.63) $0.98
====== ===== ====== =====
* 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
and six months
ended June 30,
2016 and 2015:
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(20,370) $36,410 $(55,907) $63,349
Net income (loss) attributable
to non-controlling interest (260) 11,452 (783) 18,568
Income tax expense (benefit) (8,529) 23,856 (29,765) 35,817
Interest expense 18,799 18,217 37,106 39,254
Depreciation and amortization 36,985 31,267 71,847 63,229
(Gain) loss on disposition of
assets (6) - 2,082 (572)
Unrealized (gains) losses on
commodity swaps 3,811 10,478 7,144 (7,925)
Adjusted EBITDA $30,430 $131,680 $31,724 $211,720
======= ======== ======= ========
Adjusted EBITDA does not exclude losses of $2,003 and $3,284 for the three months ended
June 30, 2016 and 2015, respectively, and $2,003 and $13,950 for the six months ended
June 30, 2016 and 2015, respectively, resulting from a price adjustment related to
asphalt inventory.
(6) Includes corporate capital
expenditures of $689 and $1,392
for the three months ended June
30, 2016 and 2015, respectively,
and $2,125 and $3,013 for the six
months ended June 30, 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 and six months ended
June 30, 2016 excludes realized
and unrealized gains on commodity
swaps of $96 and $461,
respectively.
The refinery operating margin for
the three and six months ended
June 30, 2015 excludes realized
and unrealized gains on commodity
swaps of $7,512 and $37,355,
respectively. For the six months
ended June 30, 2015, $8,926
related substantially to
inventory adjustments was not
included in cost of sales for
either the Big Spring refinery or
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 $4,054 and $11,864
for the three months ended June
30, 2016 and 2015, respectively,
and $18,172 and $23,782 for the
six months ended June 30, 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 excludes losses of
$2,003 and $3,284 for the three
months ended June 30, 2016 and
2015, respectively, and $2,003
and $13,950 for the six months
ended June 30, 2016 and 2015,
respectively, resulting from a
price adjustment related to
asphalt inventory. This loss is
included in the operating income
(loss) above.
(20) At June 30, 2016, we had 306
retail convenience stores of
which 296 sold fuel. At June 30,
2015, we had 294 retail
convenience stores of which 283
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-second-quarter-2016-results-300306051.html
SOURCE Alon USA Energy, Inc.
