ALON USA PARTNERS LP DALLAS, Oct. 27, 2016 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the third quarter of 2016. Net loss available to stockholders for the third quarter of 2016 was $(8.8) million, or $(0.12) per share, compared to net income available to stockholders of $41.9 million, or $0.60 per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(6.7) million, or $(0.09) per share, for the third quarter of 2016, compared to net income available to stockholders of $42.0 million, or $0.60 per share, for the same period last year.
Net loss available to stockholders for the first nine months of 2016 was $(64.7) million, or $(0.92) per share, compared to net income available to stockholders of $105.3 million, or $1.51 per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(50.9) million, or $(0.72) per share, for the first nine months of 2016, compared to net income available to stockholders of $110.1 million, or $1.58 per share, for the same period last year.
Paul Eisman, President and CEO commented, "Our third quarter results reflect a continuation of the difficult refining environment experienced in the first two quarters of 2016. The average Gulf Coast 3-2-1 benchmark crack spread for the third quarter of 2016 was approximately $6.50 per barrel lower than the average for the same period last year. Additionally, high RINs costs continue to weigh on our profitability. We continue to focus on operational excellence and controlling expenditures across the organization in this environment. We were pleased with the contributions in the third quarter from our asphalt marketing business and our renewable fuels project in California.
"The Big Spring refinery achieved total throughput of 70,000 barrels per day and generated refinery operating margin of $9.22 per barrel. As discussed in our previous earnings release, our Big Spring refinery's third quarter results were negatively impacted by a reformer regeneration in August. We estimate that the lost opportunity cost and maintenance expense associated with the reformer regeneration negatively impacted Alon's operating income by $8 million. Our Big Spring refinery's direct operating expense of $3.90 per barrel was negatively impacted by the reformer regeneration, which lowered throughput volumes and increased maintenance expense. We expect total throughput at the Big Spring refinery to average approximately 77,000 barrels per day for the fourth quarter of 2016.
"The Krotz Springs refinery ran well in the third quarter and achieved total throughput of 68,000 barrels per day, as we increased throughput in response to improved market conditions. The Krotz Springs refinery operating margin of $3.42 per barrel was negatively impacted by the high RINs cost of approximately $1.50 per barrel. We expect total throughput at the Krotz Springs refinery to average approximately 69,000 barrels per day in the fourth quarter of 2016. However, we will remain responsive to the crack spread environment and adjust throughput volumes as necessary to optimize our profitability.
"Our renewable fuels project generated operating income of $6 million in the third quarter of 2016 with total throughput of 2,582 barrels per day. The project achieved renewable diesel and renewable jet yields of 87 percent and 7 percent, respectively. Profitability improved as sales stabilized and tallow prices moderated. In the fourth quarter of 2016, the project's raw material supply will be reduced due to a third party completing maintenance on its equipment. As a result, we expect total throughput in the fourth quarter of 2016 to average approximately 2,400 barrels per day.
"The robust performance of our asphalt business continued in the third quarter of 2016, resulting in segment operating income of approximately $10 million, which does not include equity earnings of $6 million from our asphalt partnerships. Sales volumes were strong at 184 thousand tons, and our asphalt margin remained favorable at $94 per ton.
"Our retail business continues to be negatively impacted by economic headwinds in the Permian Basin. Despite this, our operating income in the third quarter of 2016 increased modestly relative to the second quarter of 2016."
THIRD QUARTER 2016
Special items increased net loss by $2.1 million for the third quarter of 2016 primarily as a result of employee retention expense of $2.0 million and unrealized losses of $3.9 million associated with commodity swaps, 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 $1.6 million. Special items reduced net income by $0.1 million for the third quarter of 2015 primarily as a result of employee retention expense of $8.7 million, partially offset by gains of $7.5 million related to an asphalt inventory adjustment and unrealized gains of $1.1 million associated with commodity swaps, before income tax and non-controlling interest impacts.
The combined total refinery average throughput for the third quarter of 2016 was 137,767 barrels per day ("bpd"), consisting of 70,063 bpd at the Big Spring refinery and 67,704 bpd at the Krotz Springs refinery, compared to a combined total refinery average throughput of 146,070 bpd for the third quarter of 2015, consisting of 75,797 bpd at the Big Spring refinery and 70,273 bpd at the Krotz Springs refinery. The reduced throughput at the Big Spring refinery was the result of a reformer regeneration during the third quarter of 2016. The reduced throughput at the Krotz Springs refinery during the third 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 $9.22 per barrel for the third quarter of 2016 compared to $16.71 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 increased RINs costs, partially offset by a widening of both the WTI Cushing to WTI Midland and WTI Cushing to WTS spreads and an increased benefit from the contango market environment which reduced the cost of crude.
Refinery operating margin at the Krotz Springs refinery was $3.42 per barrel for the third quarter of 2016 compared to $6.66 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 the LLS to WTI Cushing spread and increased RINs costs, partially offset by a widening of the WTI Cushing to WTI Midland spread and an increased benefit from the contango market environment which reduced the cost of crude.
The average Gulf Coast 3/2/1 crack spread was $13.31 per barrel for the third quarter of 2016 compared to $19.77 per barrel for the same period in 2015. The average Gulf Coast 2/1/1 high sulfur diesel crack spread was $8.49 per barrel for the third quarter of 2016 compared to $12.57 per barrel for the same period in 2015.
The average WTI Cushing to WTI Midland spread for the third quarter of 2016 was $0.31 per barrel compared to $(0.72) per barrel for the same period in 2015. The average WTI Cushing to WTS spread for the third quarter of 2016 was $0.92 per barrel compared to $(1.46) per barrel for the same period in 2015. The average LLS to WTI Cushing spread for the third quarter of 2016 was $1.74 per barrel compared to $3.89 per barrel for the same period in 2015. The average Brent to WTI Cushing spread for the third quarter of 2016 was $0.74 per barrel compared to $3.78 per barrel for the same period in 2015. The average Brent to LLS spread for the third quarter of 2016 was $(1.92) per barrel compared to $(0.26) per barrel for the same period in 2015.
The average RINs cost effect on the Big Spring refinery operating margin was $0.58 per barrel for the third quarter of 2016, compared to $0.27 per barrel for the same period in 2015. The average RINs cost effect on the Krotz Springs refinery operating margin was $1.47 per barrel for the third quarter of 2016, compared to $0.74 per barrel for the same period in 2015.
The contango environment in the third quarter of 2016 created an average cost of crude benefit of $0.84 per barrel compared to an average cost of crude benefit of $0.57 per barrel for the same period in 2015.
For the third quarter of 2016, our California renewable fuels project generated operating margin of $55.81 per barrel from 2,582 barrels per day of throughput.
Asphalt margins for the third quarter of 2016 were $93.57 per ton compared to $120.39 per ton for the same period in 2015. On a cash basis (i.e., excluding inventory effects), asphalt margins in the third quarter of 2016 were $91.72 per ton compared to $115.04 per ton in the third quarter of 2015.
Retail fuel margins decreased to 19.9 cents per gallon in the third quarter of 2016 from 21.7 cents per gallon in the third quarter of 2015. Retail fuel sales volume increased to 54.1 million gallons in the third quarter of 2016 from 51.4 million gallons in the third quarter of 2015. Merchandise margins increased to 31.7% in the third quarter of 2016 from 31.4% in the third quarter of 2015. Merchandise sales decreased to $84.0 million in the third quarter of 2016 from $86.6 million in the third quarter of 2015.
YEAR-TO-DATE 2016
Special items increased net loss by $13.8 million for the first nine months of 2016 primarily as a result of employee retention expense of $8.7 million, losses of $0.3 million related to an asphalt inventory adjustment, unrealized losses of $11.0 million associated with commodity swaps and $1.6 million associated with losses recognized on disposition of assets, before income tax and non-controlling interest impacts of $7.8 million. Special items reduced net income by $4.8 million for the first nine months of 2015 primarily as a result of employee retention expense of $10.0 million and losses of $6.5 million related to an asphalt inventory adjustment, partially offset by unrealized gains of $9.0 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 $2.0 million.
The combined total refinery average throughput for the first nine months of 2016 was 136,730 bpd, consisting of 69,586 bpd at the Big Spring refinery and 67,144 bpd at the Krotz Springs refinery, compared to a combined total refinery average throughput of 147,800 bpd for the first nine months of 2015, consisting of 74,562 bpd at the Big Spring refinery and 73,238 bpd at the Krotz Springs refinery. The reduced throughput at our Big Spring refinery during the first nine months of 2016 was the result of a reformer regeneration during the first quarter of 2016, which was repeated during the third quarter of 2016. Additionally, throughput was reduced as a result of a catalyst replacement for our diesel hydrotreater unit in the first quarter of 2016 and 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 first nine months of 2016 was the result of our election to reduce the crude rate in order to optimize the refinery yield, as well as maintenance that was performed on the fluid catalytic cracking unit during the second quarter of 2016.
Refinery operating margin at the Big Spring refinery was $8.52 per barrel for the first nine months of 2016 compared to $15.95 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 the WTI Cushing to WTI Midland spread, partially offset by a widening of the WTI Cushing to WTS spread and an increased benefit from the contango market environment which reduced the cost of crude.
Refinery operating margin at the Krotz Springs refinery was $2.94 per barrel for the first nine months of 2016 compared to $8.05 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 and increased RINs costs, partially offset by an increased benefit from the contango market environment which reduced the cost of crude.
The average Gulf Coast 3/2/1 crack spread for the first nine months of 2016 was $12.57 per barrel compared to $19.08 per barrel for the same period in 2015. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for the first nine months of 2016 was $7.73 per barrel compared to $12.05 per barrel for the same period in 2015.
The average WTI Cushing to WTI Midland spread for the first nine months of 2016 was $0.12 per barrel compared to $0.60 per barrel for the same period in 2015. The average WTI Cushing to WTS spread for the first nine months of 2016 was $0.53 per barrel compared to $0.02 per barrel for the same period in 2015. The average LLS to WTI Cushing spread for the first nine months of 2016 was $1.79 per barrel compared to $4.27 per barrel for the same period in 2015. The average Brent to WTI Cushing spread for the first nine months of 2016 was $0.35 per barrel compared to $4.28 per barrel for the same period in 2015. The average Brent to LLS spread for the first nine months of 2016 was $(1.48) per barrel compared to $0.30 per barrel for the same period in 2015.
The average RINs cost effect on the Krotz Springs refinery operating margin was $1.45 per barrel for the first nine months of 2016, compared to $1.06 per barrel for the same period in 2015.
The contango environment in the first nine months of 2016 created an average cost of crude benefit of $1.39 per barrel compared to an average cost of crude benefit of $1.04 per barrel for the same period in 2015.
For the first nine months of 2016, our California renewable fuels project generated operating margin of $55.46 per barrel from 2,000 barrels per day of throughput.
Asphalt margins for the first nine months of 2016 were $96.25 per ton compared to $106.60 per ton for the same period in 2015. On a cash basis (i.e., excluding inventory effects), asphalt margins for the first nine months of 2016 were $96.70 per ton compared to $110.12 per ton for the same period in 2015.
Retail fuel margins decreased to 20.2 cents per gallon in the first nine months of 2016 from 21.8 cents per gallon in the first nine months of 2015. Retail fuel sales volume increased to 155.0 million gallons in the first nine months of 2016 from 147.0 million gallons in the first nine months of 2015. Merchandise margins decreased to 31.4% in the first nine months of 2016 from 32.1% in the first nine months of 2015. Merchandise sales decreased to $245.5 million in the first nine months of 2016 from $247.5 million in the first nine months 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 December 23, 2016 to stockholders of record at the close of business on December 7, 2016.
CONFERENCE CALL
Alon has scheduled a conference call, which will be broadcast live over the Internet on Friday, October 28, 2016, at 10:30 a.m. Eastern Time (9:30 a.m. Central Time), to discuss the third 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 November 4, 2016 and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13646162#. 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 project in California, with a throughput capacity of 2,500 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 For the Nine Months Ended
(ALL INFORMATION IN THIS PRESS RELEASE EXCEPT FOR BALANCE SHEET
DATA AS OF DECEMBER 31, 2015, IS UNAUDITED)
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per share data)
STATEMENTS OF OPERATIONS DATA:
Net sales (1) $1,043,717 $1,151,204 $2,902,078 $3,555,785
Operating costs and expenses:
Cost of sales 895,900 914,193 2,502,438 2,878,612
Direct operating
expenses 68,095 65,047 199,894 192,108
Selling, general and
administrative
expenses (2) 46,780 54,100 147,125 148,889
Depreciation and
amortization (3) 36,878 31,033 108,725 94,262
------ ------ ------- ------
Total operating costs
and expenses 1,047,653 1,064,373 2,958,182 3,313,871
--------- --------- --------- ---------
Gain (loss) on
disposition of assets 522 23 (1,560) 595
--- --- ------ ---
Operating income
(loss) (3,414) 86,854 (57,664) 242,509
Interest expense (16,027) (20,696) (53,133) (59,950)
Equity earnings of
investees 6,060 3,451 10,743 4,725
Other income, net 402 92 620 151
--- --- --- ---
Income (loss) before
income tax expense
(benefit) (12,979) 69,701 (99,434) 187,435
Income tax expense
(benefit) (5,641) 17,325 (35,406) 53,142
------ ------ ------- ------
Net income (loss) (7,338) 52,376 (64,028) 134,293
Net income
attributable to non-
controlling interest 1,462 10,440 679 29,008
----- ------
Net income (loss)
available to
stockholders $(8,800) $41,936 $(64,707) $105,285
======= ======= ======== ========
Earnings (loss) per
share, basic $(0.12) $0.60 $(0.92) $1.51
====== ===== ====== =====
Weighted average
shares outstanding,
basic (in thousands) 71,089 69,893 70,575 69,687
====== ====== ====== ======
Earnings (loss) per
share, diluted $(0.12) $0.58 $(0.92) $1.46
====== ===== ====== =====
Weighted average
shares outstanding,
diluted (in
thousands) 71,089 72,526 70,575 72,281
====== ====== ====== ======
Cash dividends per
share $0.15 $0.15 $0.45 $0.40
===== ===== ===== =====
CASH FLOW DATA:
Net cash provided by (used in):
Operating activities $29,770 $60,419 $17,761 $176,310
Investing activities (16,853) (44,353) (85,307) (78,298)
Financing activities 46,032 (41,032) 98,221 (74,109)
OTHER DATA:
Adjusted net income
(loss) available to
stockholders (4) $(6,746) $41,981 $(50,896) $110,119
Adjusted earnings
(loss) per share (4) $(0.09) $0.60 $(0.72) $1.58
Adjusted EBITDA (5) $43,292 $120,318 $75,016 $332,038
Capital expenditures
(6) 12,594 26,211 49,824 57,262
Capital expenditures
for turnarounds and
catalysts 5,192 7,047 29,464 11,410
September 30, December 31,
2016 2015
---- ----
(dollars in thousands)
BALANCE SHEET DATA (end of period):
Cash and cash equivalents $264,802 $234,127
Working capital 89,398 78,694
Total assets 2,277,272 2,176,138
Total debt 550,461 555,962
Total debt less cash and cash equivalents 285,659 321,835
Total equity 608,403 664,160
REFINING AND MARKETING
SEGMENT
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per barrel data and pricing statistics)
STATEMENTS OF
OPERATIONS DATA:
Net sales (7) $859,123 $950,926 $2,385,649 $3,036,458
Operating costs and
expenses:
Cost of sales 767,796 781,731 2,140,156 2,505,983
Direct operating
expenses 61,366 58,162 181,072 170,454
Selling, general and
administrative
expenses 15,867 23,190 53,072 59,469
Depreciation and
amortization 31,504 26,363 92,802 80,366
------ ------ ------ ------
Total operating costs
and expenses 876,533 889,446 2,467,102 2,816,272
Gain (loss) on
disposition of assets - 1 (2,079) 523
--- ---
Operating income
(loss) $(17,410) $61,481 $(83,532) $220,709
======== ======= ======== ========
KEY OPERATING
STATISTICS:
Per barrel of
throughput:
Refinery operating
margin - Big Spring
(8) $9.22 $16.71 $8.52 $15.95
Refinery operating
margin - Krotz
Springs (8) 3.42 6.66 2.94 8.05
California renewable
fuel operating margin
(9) 55.81 N/A 55.46 N/A
Refinery direct
operating expense -
Big Spring (10) 3.90 3.46 3.85 3.53
Refinery direct
operating expense -
Krotz Springs (10) 3.81 3.82 3.91 3.70
California renewable
fuel direct operating
expense (10) 18.66 N/A 20.95 N/A
Capital expenditures $10,218 $18,627 $40,337 $35,503
Capital expenditures
for turnarounds and
catalysts 5,192 7,047 29,464 11,410
PRICING STATISTICS:
Crack spreads (3/2/1)
(per barrel):
Gulf Coast (10) $13.31 $19.77 $12.57 $19.08
Crack spreads (2/1/1)
(per barrel):
Gulf Coast high sulfur
diesel (11) $8.49 $12.57 $7.73 $12.05
WTI Cushing crude oil
(per barrel) $44.88 $46.41 $41.23 $50.91
Crude oil
differentials (per
barrel):
WTI Cushing less WTI
Midland (12) $0.31 $(0.72) $0.12 $0.60
WTI Cushing less WTS
(12) 0.92 (1.46) 0.53 0.02
LLS less WTI Cushing
(12) 1.74 3.89 1.79 4.27
Brent less WTI Cushing
(12) 0.74 3.78 0.35 4.28
Brent less LLS (12) (1.92) (0.26) (1.48) 0.30
Product prices
(dollars per gallon):
Gulf Coast unleaded
gasoline $1.39 $1.61 $1.30 $1.66
Gulf Coast ultra-low
sulfur diesel 1.37 1.52 1.25 1.68
Gulf Coast high sulfur
diesel 1.23 1.39 1.12 1.54
Natural gas (per
MMBtu) 2.79 2.73 2.34 2.76
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Nine Months Ended
BIG SPRING REFINERY
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTS crude 34,292 48.9 30,810 40.6 32,189 46.3 35,041 47.0
WTI crude 32,503 46.4 42,503 56.1 34,428 49.4 36,834 49.4
Blendstocks 3,268 4.7 2,484 3.3 2,969 4.3 2,687 3.6
----- --- ----- --- ----- --- ----- ---
Total refinery throughput
(13) 70,063 100.0 75,797 100.0 69,586 100.0 74,562 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 33,637 48.1 37,503 49.5 33,826 48.7 37,155 49.6
Diesel/jet 26,004 37.2 28,623 37.8 25,108 36.1 27,596 36.9
Asphalt 2,818 4.0 2,452 3.2 2,846 4.1 2,733 3.7
Petrochemicals 3,861 5.5 4,588 6.1 3,611 5.2 4,770 6.4
Other 3,661 5.2 2,595 3.4 4,084 5.9 2,510 3.4
----- --- ----- --- ----- --- ----- ---
Total refinery production
(14) 69,981 100.0 75,761 100.0 69,475 100.0 74,764 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (15) 99.1% 100.4% 95.5% 98.5%
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Nine Months Ended
KROTZ SPRINGS REFINERY
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTI crude 26,381 39.0 21,347 30.4 18,728 27.9 27,010 36.9
Gulf Coast sweet crude 38,639 57.1 43,338 61.7 43,520 64.8 41,838 57.1
Blendstocks 2,684 3.9 5,588 7.9 4,896 7.3 4,390 6.0
----- --- ----- --- ----- --- ----- ---
Total refinery throughput
(13) 67,704 100.0 70,273 100.0 67,144 100.0 73,238 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 33,229 48.4 32,802 45.7 33,537 49.0 34,274 45.8
Diesel/jet 25,229 36.7 29,943 41.8 25,472 37.2 31,041 41.5
Heavy Oils 1,295 1.9 1,299 1.8 1,263 1.9 1,337 1.8
Other 8,945 13.0 7,676 10.7 8,113 11.9 8,168 10.9
----- ---- ----- ---- ----- ---- ----- ----
Total refinery production
(14) 68,698 100.0 71,720 100.0 68,385 100.0 74,820 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (15) 87.9% 87.4% 84.1% 93.0%
THROUGHPUT AND PRODUCTION DATA:
CALIFORNIA RENEWABLE FUELS PROJECT
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Throughput:
Tallow/vegetable oils 2,582 100.0 - - 2,000 100.0 - -
Total throughput (13) 2,582 100.0 - - 2,000 100.0 - -
===== ===== === === ===== ===== === ===
Production:
Renewable diesel 2,236 88.7 - - 1,662 87.3 - -
Renewable jet 182 7.2 - - 125 6.6 - -
Naphtha 103 4.1 - - 109 5.7 - -
Other - - - - 7 0.4 - -
Total production (14) 2,521 100.0 - - 1,903 100.0 - -
===== ===== === === ===== ===== === ===
ASPHALT SEGMENT
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per ton data)
STATEMENTS OF OPERATIONS DATA:
Net sales (16) $73,800 $88,436 $195,396 $208,988
Operating costs and expenses:
Cost of sales (16) (17) 54,873 59,031 150,064 174,085
Direct operating expenses 6,729 6,885 18,822 21,654
Selling, general and
administrative expenses 1,252 2,706 8,497 7,237
Depreciation and amortization 1,264 1,313 3,785 3,665
----- ----- ----- -----
Total operating costs and
expenses 64,118 69,935 181,168 206,641
------ ------ ------- -------
Operating income (20) $9,682 $18,501 $14,228 $2,347
====== ======= ======= ======
KEY OPERATING STATISTICS:
Blended asphalt sales volume
(tons in thousands) (18) 167 174 410 347
Non-blended asphalt sales
volume (tons in thousands)
(19) 17 8 64 41
Blended asphalt sales price per
ton (18) $408.47 $494.45 $402.43 $496.63
Non-blended asphalt sales
price per ton (19) 166.53 132.13 148.00 281.22
Asphalt margin per ton (20) 93.57 120.39 96.25 106.60
Capital expenditures $919 $840 $1,994 $2,484
RETAIL SEGMENT
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per gallon data)
STATEMENTS OF OPERATIONS DATA:
Net sales (1) $193,511 $208,856 $543,744 $591,475
Operating costs and expenses:
Cost of sales (17) 155,948 170,445 434,929 479,680
Selling, general and
administrative
expenses 29,478 28,024 84,999 81,651
Depreciation and
amortization 3,392 3,024 10,141 9,004
----- ----- ------ -----
Total operating costs
and expenses 188,818 201,493 530,069 570,335
------- ------- ------- -------
Gain on disposition of
assets 522 22 519 72
--- --- --- ---
Operating income $5,215 $7,385 $14,194 $21,212
====== ====== ======= =======
KEY OPERATING STATISTICS:
Number of stores (end
of period) (21) 307 308 307 308
Retail fuel sales
(thousands of
gallons) 54,107 51,386 154,989 146,992
Retail fuel sales
(thousands of gallons
per site per month)
(21) 61 59 58 57
Retail fuel margin
(cents per gallon)
(22) 19.9 21.7 20.2 21.8
Retail fuel sales
price (dollars per
gallon) (23) $2.02 $2.38 $1.92 $2.34
Merchandise sales $83,988 $86,567 $245,486 $247,547
Merchandise sales (per
site per month) (21) $91 $96 $89 $93
Merchandise margin
(24) 31.7% 31.4% 31.4% 32.1%
Capital expenditures $869 $5,365 $4,780 $14,883
(1) Includes
excise taxes
on sales by
the retail
segment of
$21,126 and
$20,068 for
the three
months ended
September
30, 2016 and
2015,
respectively,
and $60,515
and $57,493
for the nine
months ended
September
30, 2016 and
2015,
respectively.
(2) Includes
corporate
headquarters
selling,
general and
administrative
expenses of
$183 and
$180 for the
three months
ended
September
30, 2016 and
2015,
respectively,
and $557 and
$532 for the
nine months
ended
September
30, 2016 and
2015,
respectively,
which are
not
allocated to
our three
operating
segments.
(3) Includes
corporate
depreciation
and
amortization
of $718 and
$333 for the
three months
ended
September
30, 2016 and
2015,
respectively,
and $1,997
and $1,227
for the nine
months ended
September
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
(gain) 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 Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to stockholders $(8,800) $41,936 $(64,707) $105,285
Exclude adjustments:
Employee retention expense 2,000 8,666 8,700 10,000
(Gain) loss on asphalt inventory adjustment (1,711) (7,494) 292 6,456
Unrealized (gains) losses on commodity swaps 3,888 (1,089) 11,032 (9,014)
(Gain) loss on disposition of assets (522) (23) 1,560 (595)
---- --- ----- ----
Total adjustments 3,655 60 21,584 6,847
Income tax impact related to adjustments (1,588) (15) (7,686) (1,941)
Non-controlling interest impact related to adjustments (13) - (87) (72)
--- --- --- ---
Adjusted net income (loss) available to stockholders $(6,746) $41,981 $(50,896) $110,119
======= ======= ======== ========
Adjusted earnings (loss) per share * $(0.09) $0.60 $(0.72) $1.58
====== ===== ====== =====
* 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 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 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 nine months ended September 30, 2016 and
2015:
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(8,800) $41,936 $(64,707) $105,285
Net income attributable to non-
controlling interest 1,462 10,440 679 29,008
Income tax expense (benefit) (5,641) 17,325 (35,406) 53,142
Interest expense 16,027 20,696 53,133 59,950
Depreciation and amortization 36,878 31,033 108,725 94,262
(Gain) loss on disposition of assets (522) (23) 1,560 (595)
Unrealized (gains) losses on commodity
swaps 3,888 (1,089) 11,032 (9,014)
Adjusted EBITDA $43,292 $120,318 $75,016 $332,038
======= ======== ======= ========
Adjusted
EBITDA does
not exclude
(gains)
losses of
$(1,711) and
$(7,494) for
the three
months ended
September 30,
2016 and
2015,
respectively,
and $292 and
$6,456 for
the nine
months ended
September 30,
2016 and
2015,
respectively,
resulting
from a price
adjustment
related to
asphalt
inventory.
(6) Includes
corporate
capital
expenditures
of $588 and
$1,379 for
the three
months ended
September 30,
2016 and
2015,
respectively,
and $2,713
and $4,392
for the nine
months ended
September 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
nine months
ended
September 30,
2016 excludes
realized and
unrealized
gains
(losses) on
commodity
swaps of
$(66) and
$395,
respectively.
The refinery
operating
margin for
the three and
nine months
ended
September 30,
2015 excludes
realized and
unrealized
gains on
commodity
swaps of
$12,101 and
$49,456,
respectively.
For the nine
months ended
September 30,
2015, $8,569
related
substantially
to inventory
adjustments
was not
included in
cost of sales
for either
the Big
Spring
refinery or
the Krotz
Springs
refinery.
(9) The California
renewable
fuels project
operating
margin is a
per barrel
measurement
calculated by
dividing the
project's
margin
between net
sales and
cost of sales
by the
project'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
generated by
the project.
(10) 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.
(11) 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.
(12) 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.
(13) 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 project
represents
the total
barrels per
day of tallow
and vegetable
oils used by
the project.
(14) 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 project
represents
the total
barrels per
day produced
from
processing
tallow and
vegetable
oils through
the project's
units.
(15) Refinery
utilization
represents
average daily
crude oil
throughput
divided by
crude oil
capacity,
excluding
planned
periods of
downtime for
maintenance
and
turnarounds.
(16) Net sales and
cost of sales
include
asphalt
purchases
sold as part
of a supply
and offtake
arrangement
of $2,754 and
$1,344 for
the three
months ended
September 30,
2016 and
2015,
respectively,
and $20,926
and $25,126
for the nine
months ended
September 30,
2016 and
2015,
respectively.
The volumes
associated
with these
sales are
excluded from
the Key
Operating
Statistics.
(17) 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.
(18) Blended
asphalt
represents
base material
asphalt that
has been
blended with
other
materials
necessary to
sell the
asphalt as a
finished
product.
(19) Non-blended
asphalt
represents
base material
asphalt and
other
components
that require
additional
blending
before being
sold as a
finished
product.
(20) 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)
losses of
$(1,711) and
$(7,494) for
the three
months ended
September 30,
2016 and
2015,
respectively,
and $292 and
$6,456 for
the nine
months ended
September 30,
2016 and
2015,
respectively,
resulting
from a price
adjustment
related to
asphalt
inventory.
These (gains)
losses are
included in
operating
income (loss)
above.
(21) At September
30, 2016, we
had 307
retail
convenience
stores of
which 297
sold fuel. At
September 30,
2015, we had
308 retail
convenience
stores of
which 297
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.
(22) 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.
(23)
Retail fuel
sales price
per gallon
represents
the average
sales price
for retail
fuels sold
through our
retail
convenience
stores.
(24)
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-third-quarter-2016-results-300353074.html
SOURCE Alon USA Energy, Inc.
