ALON USA PARTNERS LP DALLAS, Feb. 23, 2017 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the fourth quarter and year ended December 31, 2016. Net loss available to stockholders for the fourth quarter of 2016 was $(18.1) million, or $(0.25) per share, compared to net loss available to stockholders of $(52.5) million, or $(0.75) per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(14.3) million, or $(0.20) per share, for the fourth quarter of 2016, compared to net loss available to stockholders of $(14.6) million, or $(0.21) per share, for the same period last year.
Net loss available to stockholders for the full year 2016 was $(82.8) million, or $(1.17) per share, compared to net income available to stockholders of $52.8 million, or $0.76 per share, for 2015. Excluding special items, Alon recorded net loss available to stockholders of $(65.1) million, or $(0.92) per share, for the full year 2016, compared to net income available to stockholders of $95.5 million, or $1.37 per share, for 2015.
As previously announced, in January 2017, Delek US and Alon entered into a definitive agreement under which Delek will acquire the outstanding shares of Alon common stock that Delek does not already own in an all-stock transaction. The transaction is expected to close in the first half of 2017, subject to customary closing conditions, including regulatory approval and approval by Delek US shareholders and Alon shareholders. We believe the economies of scale, financial strength and synergies generated through this merger create the opportunity to drive long-term value for shareholders.
In February 2017, the Krotz Springs refinery received approval from the EPA for a small refinery exemption from the requirements of the renewable fuel standard for the 2016 calendar year. As a result, we expect to book a reduction in RINs expense of $29.0 million in the first quarter of 2017, based on a weighted average RINs price per gallon of $0.58.
Alan Moret, CEO, commented, "Our diversification proved to be an asset for us in 2016, as positive contributions from our asphalt segment, retail segment and our renewable fuels facility in California helped offset the impact of weak crack spreads, high RIN prices and narrower crude differentials on our refining results. Our asphalt business operating income more than doubled in 2016 relative to 2015, as sales volumes increased by 19 percent and direct operating expenses were reduced by 8 percent. Our renewable fuels facility, which began operations in February 2016, produced approximately 30 million gallons of renewable fuel in 2016. We have been encouraged by the improvement in refining fundamentals that we saw at the end of 2016 and into 2017, including the widening of domestic crude discounts relative to Brent. We also are pleased to see RIN prices decline.
"The Big Spring refinery ran well in the fourth quarter, achieving total throughput of almost 77,000 barrels per day. The refinery also set a new quarterly record by processing over 44,000 barrels per day of WTI Midland in the quarter, further demonstrating the flexibility of the asset. The fourth quarter refinery operating margin of $7.65 per barrel is net of a negative impact of approximately $1.10 per barrel related to RINs costs. Operating expense in the quarter was low at $3.39 per barrel. As we've said before, we do not expect any major maintenance at Big Spring in 2017. We expect total throughput at the Big Spring refinery to average 77,000 barrels per day for the first quarter of 2017 and 75,000 barrels per day for the full year of 2017.
"The Krotz Springs refinery also ran well in the fourth quarter with total throughput of 70,000 barrels per day. The refinery operating margin of $3.40 per barrel was negatively impacted by approximately $1.60 per barrel due to the high cost of RINs. Operating expense in the fourth quarter was low at $3.44 per barrel. We expect total throughput at the Krotz Springs refinery to average 77,000 barrels per day for the first quarter of 2017 and 74,000 barrels per day for the full year of 2017.
"Our asphalt business performed exceptionally well in what is typically a seasonally weak quarter. Asphalt operating income of $3.2 million in the fourth quarter was driven by sales volumes of 133 thousand tons and an attractive margin of $108 per ton.
"Our renewable fuels facility in California had its most profitable quarter since operations began, generating $9 million of operating income in the fourth quarter. This was achieved in spite of reduced throughput of 2,400 barrels per day due to maintenance being done by a third-party supplier in the quarter. We expect total throughput at our renewable fuels facility to average 2,500 barrels per day for the first quarter of 2017 and 2,600 barrels per day for the full year of 2017.
"Our retail results were negatively impacted by seasonal weakness and continued economic headwinds in the Permian Basin. That said, we are encouraged by the increase in rig activity in the Permian, and we believe our retail segment is well positioned to benefit as the West Texas economy improves."
FOURTH QUARTER 2016
Special items increased net loss by $3.8 million for the fourth quarter of 2016 primarily as a result of employee retention expenses of $2.0 million, unrealized losses of $3.8 million associated with commodity swaps, losses of $0.7 million related to an asphalt inventory adjustment and $0.1 million associated with losses recognized on disposition of assets, before income tax and non-controlling interest impacts of $2.8 million. Special items reduced net income by $37.9 million for the fourth quarter of 2015 primarily as a result of a loss on impairment of goodwill of $39.0 million, losses of $1.7 million related to an asphalt inventory adjustment, employee retention expenses of $1.3 million and unrealized losses of $1.1 million associated with commodity swaps, partially offset by insurance recoveries net of professional fees of $3.6 million and $1.3 million associated with gains recognized on disposition of assets, before income tax and non-controlling interest impacts of $0.2 million.
The combined total refinery average throughput for the fourth quarter of 2016 was 146,725 barrels per day ("bpd"), compared to a combined total refinery average throughput of 116,995 bpd for the fourth quarter of 2015. The Big Spring refinery average throughput for the fourth quarter of 2016 was 76,654 bpd, compared to 75,925 bpd for the fourth quarter of 2015. The Krotz Springs refinery average throughput for the fourth quarter of 2016 was 70,071 bpd, compared to 41,070 bpd for the fourth quarter of 2015. During the fourth quarter of 2016, the Krotz Springs refinery throughput was impacted by our election to reduce the crude rate in order to optimize the refinery yield. During the fourth quarter of 2015, throughput at our Krotz Springs refinery was lower as a result of downtime necessary to complete the planned major turnaround.
Refinery operating margin at the Big Spring refinery was $7.65 per barrel for the fourth quarter of 2016 compared to $10.02 per barrel for the same period in 2015. This decrease in operating margin was primarily due to increased RINs costs, a reduced benefit from the contango market environment which increased the cost of crude and unfavorable differences in Group III to Gulf Coast gasoline and diesel prices in the fourth quarter of 2016 compared to the same period in 2015.
Refinery operating margin at the Krotz Springs refinery was $3.40 per barrel for the fourth quarter of 2016 compared to $1.55 per barrel for the same period in 2015. During the fourth quarter of 2016, the Krotz Springs operating margin was favorably impacted by a higher Gulf Coast 2/1/1 high sulfur diesel crack spread and a widening of the WTI Cushing to WTI Midland spread, partially offset by a narrowing of the LLS to WTI Cushing spread, increased RINs costs and a reduced benefit from the contango market environment which increased the cost of crude. During the fourth quarter of 2015, the Krotz Springs operating margin reflects the negative impact of the planned major turnaround on refinery production.
The average Gulf Coast 3/2/1 crack spread was $12.83 per barrel for the fourth quarter of 2016 compared to $10.90 per barrel for the fourth quarter of 2015. The average Gulf Coast 2/1/1 high sulfur diesel crack spread was $8.63 per barrel for the fourth quarter of 2016 compared to $7.13 per barrel for the fourth quarter of 2015.
The average WTI Cushing to WTI Midland spread for the fourth quarter of 2016 was $0.25 per barrel compared to $(0.20) per barrel for the same period in 2015. The average WTI Cushing to WTS spread for the fourth quarter of 2016 was $1.33 per barrel compared to $(0.26) per barrel for the same period in 2015. The average LLS to WTI Cushing spread for the fourth quarter of 2016 was $1.42 per barrel compared to $2.08 per barrel for the same period in 2015. The average Brent to WTI Cushing spread for the fourth quarter of 2016 was $(0.20) per barrel compared to $1.35 per barrel for the same period in 2015. The average Brent to LLS spread for the fourth quarter of 2016 was $(1.36) per barrel compared to $(0.30) per barrel for the same period in 2015.
The average RINs cost effect on the Big Spring refinery operating margin was $1.08 per barrel for the fourth quarter of 2016, compared to $0.45 per barrel for the fourth quarter of 2015. The average RINs cost effect on the Krotz Springs refinery operating margin was $1.58 per barrel for the fourth quarter of 2016, compared to $0.60 per barrel for the fourth quarter of 2015.
The contango environment in the fourth quarter of 2016 created an average cost of crude benefit of $0.79 per barrel compared to an average cost of crude benefit of $0.94 per barrel for the same period in 2015.
For the fourth quarter of 2016, our California renewable fuels facility generated an operating margin of $70.57 per barrel from an average of 2,409 barrels per day of throughput. Our statements of operations include operating income of $8.7 million for the fourth quarter of 2016 related to the facility's operations.
Asphalt margins for the fourth quarter of 2016 were $107.89 per ton compared to $102.85 per ton for the fourth quarter of 2015. On a cash basis (i.e. excluding inventory effects), asphalt margins in the fourth quarter of 2016 were $116.06 per ton compared to $106.92 per ton in the fourth quarter of 2015.
Retail fuel margins decreased to 18.5 cents per gallon in the fourth quarter of 2016 from 20.0 cents per gallon in the fourth quarter of 2015. Retail fuel sales volume increased to 54.0 million gallons in the fourth quarter of 2016 from 52.2 million gallons in the fourth quarter of 2015. Merchandise margins decreased to 30.5% in the fourth quarter of 2016 from 31.1% in the fourth quarter of 2015. Merchandise sales decreased to $78.9 million in the fourth quarter of 2016 from $81.0 million in the fourth quarter of 2015.
FULL-YEAR 2016
Special items increased net loss by $17.7 million for 2016 primarily as a result of employee retention expenses of $10.7 million, losses of $1.0 million related to an asphalt inventory adjustment, unrealized losses of $14.8 million associated with commodity swaps and $1.7 million associated with losses recognized on disposition of assets, before income tax and non-controlling interest impacts of $10.5 million. Special items reduced net income by $42.7 million for 2015 primarily as a result of a loss on impairment of goodwill of $39.0 million, losses of $8.1 million related to an asphalt inventory adjustment and employee retention expenses of $11.3 million, partially offset by unrealized gains of $7.9 million associated with commodity swaps, insurance recoveries net of professional fees of $3.6 million and $1.9 million associated with gains recognized on disposition of assets, before income tax and non-controlling interest impacts of $2.3 million.
Combined refinery average throughput for 2016 was 139,243 bpd, compared to a combined refinery average throughput of 140,036 bpd in 2015. The Big Spring refinery average throughput for 2016 was 71,363 bpd compared to 74,906 bpd for 2015. The reduced throughput at our Big Spring refinery during 2016 was the result of a reformer regeneration during the first quarter of 2016 and 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 Krotz Springs refinery average throughput for 2016 was 67,880 bpd compared to 65,130 bpd for 2015. During 2016, the Krotz Springs refinery throughput was impacted by 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. During 2015, we completed the planned major turnaround at the Krotz Springs refinery, which reduced throughput during the period.
Refinery operating margin at the Big Spring refinery was $8.28 per barrel for 2016 compared to $14.43 per barrel for 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 and increased RINs costs, 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 $3.06 per barrel for 2016 compared to $7.02 per barrel for 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 2016 was $12.64 per barrel compared to $17.02 per barrel for 2015. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for 2016 was $7.95 per barrel compared to $10.81 per barrel for 2015.
The average WTI Cushing to WTI Midland spread for 2016 was $0.15 per barrel compared to $0.39 per barrel for 2015. The average WTI Cushing to WTS spread for 2016 was $0.73 per barrel compared to $(0.06) per barrel for 2015. The average LLS to WTI Cushing spread for 2016 was $1.70 per barrel compared to $3.73 per barrel for 2015. The average Brent to WTI Cushing spread for 2016 was $0.21 per barrel compared to $3.54 per barrel for 2015. The average Brent to LLS spread for 2016 was $(1.45) per barrel compared to $0.14 per barrel for 2015.
The average RINs cost effect on the Big Spring refinery operating margin was $0.55 per barrel for 2016, compared to $0.42 per barrel for 2015. The average RINs cost effect on the Krotz Springs refinery operating margin was $1.48 per barrel for 2016, compared to $0.99 per barrel for 2015.
The contango environment in 2016 created an average cost of crude benefit of $1.24 per barrel compared to an average cost of crude benefit of $1.01 per barrel in 2015.
During 2016, our California renewable fuels facility generated an operating margin of $68.67 per barrel from an average of 2,275 barrels per day of throughput. Our statements of operations include operating income of $24.1 million in 2016 related to the facility's operations.
Asphalt margins for 2016 were $98.80 per ton compared to $105.70 per ton in 2015. On a cash basis (i.e. excluding inventory effects), asphalt margins in 2016 were $100.94 per ton compared to $109.35 per ton in 2015.
Retail fuel margins decreased to 19.8 cents per gallon in 2016 from 21.3 cents per gallon in 2015. Retail fuel sales volume increased to 209.0 million gallons in 2016 from 199.1 million gallons in 2015. Merchandise margins decreased to 31.2% in 2016 from 31.9% in 2015. Merchandise sales decreased to $324.4 million in 2016 from $328.5 million in 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 March 17, 2017 to stockholders of record at the close of business on March 9, 2017.
CONFERENCE CALL
Alon has scheduled a conference call, which will be broadcast live over the Internet on Friday, February 24, 2017, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time), to discuss the fourth quarter and year-end 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 March 3, 2017, and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13652999#. 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.
- Tables to follow -
ALON USA ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED
EARNINGS RELEASE
RESULTS OF OPERATIONS -
FINANCIAL DATA For the Three Months Ended For the Year Ended
(ALL INFORMATION IN THIS
PRESS RELEASE EXCEPT
FOR BALANCE SHEET DATA
AS OF DECEMBER 31, 2015
AND INCOME STATEMENT
DATA FOR THE YEAR ENDED
DECEMBER 31, 2015, IS
UNAUDITED)
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per share data)
STATEMENTS OF OPERATIONS
DATA:
Net sales (1) $1,011,326 $782,367 $3,913,404 $4,338,152
Operating costs and
expenses:
Cost of sales 874,365 636,794 3,376,803 3,515,406
Direct operating
expenses 62,812 63,426 262,706 255,534
Selling, general and
administrative expenses
(2) 46,953 51,306 194,078 200,195
Depreciation and
amortization (3) 36,852 32,232 145,577 126,494
------ ------ ------- -------
Total operating costs
and expenses 1,020,982 783,758 3,979,164 4,097,629
--------- ------- --------- ---------
Gain (loss) on
disposition of assets (90) 1,319 (1,650) 1,914
Loss on impairment of
goodwill (4) - (39,028) - (39,028)
--- ------- --- -------
Operating income (loss) (9,746) (39,100) (67,410) 203,409
Interest expense (16,584) (19,876) (69,717) (79,826)
Equity earnings (losses)
of investees (930) 1,944 9,813 6,669
Other income, net 72 266 692 417
--- --- --- ---
Income (loss) before
income tax expense
(benefit) (27,188) (56,766) (126,622) 130,669
Income tax expense
(benefit) (11,383) (4,860) (46,789) 48,282
------- ------ ------- ------
Net income (loss) (15,805) (51,906) (79,833) 82,387
Net income attributable
to non-controlling
interest 2,293 628 2,972 29,636
----- ---
Net income (loss)
available to
stockholders $(18,098) $(52,534) $(82,805) $52,751
======== ======== ======== =======
Earnings (loss) per
share, basic $(0.25) $(0.75) $(1.17) $0.76
====== ====== ====== =====
Weighted average shares
outstanding, basic (in
thousands) 71,229 70,027 70,739 69,772
====== ====== ====== ======
Earnings (loss) per
share, diluted $(0.25) $(0.75) $(1.17) $0.75
====== ====== ====== =====
Weighted average shares
outstanding, diluted
(in thousands) 71,229 70,027 70,739 70,714
====== ====== ====== ======
Cash dividends per share $0.15 $0.15 $0.60 $0.55
===== ===== ===== =====
CASH FLOW DATA:
Net cash provided by
(used in):
Operating activities $41,755 $49,755 $59,516 $226,065
Investing activities (8,822) (81,713) (94,129) (160,011)
Financing activities (161,433) 27,221 (63,212) (46,888)
OTHER DATA:
Adjusted net income
(loss) available to
stockholders (5) $(14,279) $(14,635) $(65,112) $95,459
Adjusted earnings (loss)
per share (5) $(0.20) $(0.21) $(0.92) $1.37
Adjusted EBITDA (6) $30,105 $34,128 $105,121 $366,166
Capital expenditures (7) 8,820 43,933 58,644 101,195
Capital expenditures for
turnarounds and
catalysts 342 23,938 29,806 35,348
As of December 31,
------------------
2016 2015
---- ----
(dollars in thousands)
BALANCE SHEET DATA
(end of period):
Cash and cash
equivalents $136,302 $234,127
Working capital 40,647 78,694
Total assets 2,110,159 2,176,138
Total debt 527,966 555,962
Total debt less
cash and cash
equivalents 391,664 321,835
Total equity 582,413 664,160
REFINING AND MARKETING SEGMENT
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per barrel data and pricing statistics)
STATEMENTS OF OPERATIONS
DATA:
Net sales (8) $854,521 $627,498 $3,240,170 $3,663,956
Operating costs and
expenses:
Cost of sales 765,314 528,548 2,905,470 3,034,531
Direct operating
expenses 55,981 57,063 237,053 227,517
Selling, general and
administrative expenses 15,138 19,553 68,210 79,022
Depreciation and
amortization 31,502 27,253 124,304 107,619
------ ------ ------- -------
Total operating costs
and expenses 867,935 632,417 3,335,037 3,448,689
Gain (loss) on
disposition of assets - 1,319 (2,079) 1,842
Loss on impairment of
goodwill (4) - (39,028) - (39,028)
--- ------- --- -------
Operating income (loss) $(13,414) $(42,628) $(96,946) $178,081
======== ======== ======== ========
KEY OPERATING
STATISTICS:
Per barrel of
throughput:
Refinery operating
margin - Big Spring (9) $7.65 $10.02 $8.28 $14.43
Refinery operating
margin - Krotz Springs
(9) 3.40 1.55 3.06 7.02
California renewable
fuel operating margin
(10) 70.57 N/A 68.67 N/A
Refinery direct
operating expense - Big
Spring (11) 3.39 3.88 3.73 3.62
Refinery direct
operating expense -
Krotz Springs (11) 3.44 5.82 3.78 4.03
California renewable
fuel direct operating
expense (11) 20.56 N/A 22.12 N/A
Capital expenditures $8,335 $37,926 $48,672 $73,429
Capital expenditures for
turnarounds and
catalysts 342 23,938 29,806 35,348
PRICING STATISTICS:
Crack spreads (3/2/1)
(per barrel):
Gulf Coast (12) $12.83 $10.90 $12.64 $17.02
Crack spreads (2/1/1)
(per barrel):
Gulf Coast high sulfur
diesel (12) $8.63 $7.13 $7.95 $10.81
WTI Cushing crude oil
(per barrel) $49.21 $42.05 $43.24 $48.68
Crude oil differentials
(per barrel):
WTI Cushing less WTI
Midland (13) $0.25 $(0.20) $0.15 $0.39
WTI Cushing less WTS
(13) 1.33 (0.26) 0.73 (0.06)
LLS less WTI Cushing
(13) 1.42 2.08 1.70 3.73
Brent less WTI Cushing
(13) (0.20) 1.35 0.21 3.54
Brent less LLS (13) (1.36) (0.30) (1.45) 0.14
Product prices (dollars
per gallon):
Gulf Coast unleaded
gasoline $1.45 $1.25 $1.34 $1.56
Gulf Coast ultra-low
sulfur diesel 1.52 1.29 1.32 1.58
Gulf Coast high sulfur
diesel 1.37 1.19 1.18 1.45
Natural gas (per MMBtu) 3.18 2.23 2.55 2.63
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Year Ended
BIG SPRING REFINERY
December 31,
December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTS crude 27,458 35.8 29,510 38.9 31,000 43.4 33,647 44.9
WTI crude 44,112 57.5 43,968 57.9 36,862 51.7 38,632 51.6
Blendstocks 5,084 6.7 2,447 3.2 3,501 4.9 2,627 3.5
----- --- ----- --- ----- --- ----- ---
Total refinery throughput (14) 76,654 100.0 75,925 100.0 71,363 100.0 74,906 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 39,371 51.2 38,600 50.8 35,220 49.4 37,519 50.0
Diesel/jet 27,619 35.9 27,812 36.6 25,739 36.1 27,651 36.8
Asphalt 2,533 3.3 2,362 3.1 2,767 3.9 2,639 3.5
Petrochemicals 4,647 6.1 4,012 5.3 3,872 5.4 4,579 6.1
Other 2,714 3.5 3,176 4.2 3,740 5.2 2,678 3.6
----- --- ----- --- ----- --- ----- ---
Total refinery production (15) 76,884 100.0 75,962 100.0 71,338 100.0 75,066 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (16) 98.0% 100.7% 96.1% 99.0%
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Year Ended
KROTZ SPRINGS REFINERY
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTI crude 23,751 33.9 8,750 21.3 19,990 29.4 22,408 34.4
Gulf Coast sweet crude 40,793 58.2 29,384 71.6 42,835 63.2 38,699 59.4
Blendstocks 5,527 7.9 2,936 7.1 5,055 7.4 4,023 6.2
----- --- ----- --- ----- --- ----- ---
Total refinery throughput (14) 70,071 100.0 41,070 100.0 67,880 100.0 65,130 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 34,208 48.1 18,083 43.7 33,706 48.8 30,193 45.5
Diesel/jet 28,946 40.7 16,037 38.7 26,346 38.1 27,259 41.0
Heavy Oils 1,165 1.6 654 1.6 1,238 1.8 1,165 1.8
Other 6,872 9.6 6,632 16.0 7,801 11.3 7,781 11.7
----- --- ----- ---- ----- ---- ----- ----
Total refinery production (15) 71,191 100.0 41,406 100.0 69,091 100.0 66,398 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (16) 87.2% 83.1% 84.9% 91.3%
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Year Ended
CALIFORNIA RENEWABLE FUELS FACILITY
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Throughput:
Tallow/vegetable oils 2,409 100.0 - - 2,275 100.0 - -
-----
Total throughput (14) 2,409 100.0 - - 2,275 100.0 - -
===== ===== === === ===== ===== === ===
Production:
Renewable diesel 2,154 91.0 - - 1,998 89.0 - -
Renewable jet 143 6.0 - - 149 6.6 - -
Naphtha 70 3.0 - - 99 4.4 - -
Total production (15) 2,367 100.0 - - 2,246 100.0 - -
===== ===== === === ===== ===== === ===
ASPHALT SEGMENT
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per ton data)
STATEMENTS OF OPERATIONS DATA:
Net sales (17) $53,592 $48,967 $248,988 $257,955
Operating costs and expenses:
Cost of sales (17) (18) 39,983 38,081 190,047 212,166
Direct operating expenses 6,831 6,363 25,653 28,017
Selling, general and administrative
expenses 2,299 3,280 10,796 10,517
Depreciation and amortization 1,259 1,227 5,044 4,892
----- ----- ----- -----
Total operating costs and expenses 50,372 48,951 231,540 255,592
Operating income (21) $3,220 $16 $17,448 $2,363
====== === ======= ======
KEY OPERATING STATISTICS:
Blended asphalt sales volume (tons in thousands) (19)
112 104 522 451
Non-blended asphalt sales volume (tons in
thousands) (20) 21 18 85 59
Blended asphalt sales price per ton
(19) $385.67 $451.98 $398.84 $486.34
Non-blended asphalt sales price per
ton (20) 141.38 116.61 146.36 231.00
Asphalt margin per ton (21) 107.89 102.85 98.80 105.70
Capital expenditures $1,007 $901 $3,001 $3,385
RETAIL SEGMENT
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per gallon data)
STATEMENTS OF OPERATIONS DATA:
Net sales (1) $187,999 $182,960 $731,743 $774,435
Operating costs and expenses:
Cost of sales (18) 153,854 147,223 588,783 626,903
Selling, general and
administrative expenses 29,335 28,292 114,334 109,943
Depreciation and
amortization 3,378 3,427 13,519 12,431
----- ----- ------ ------
Total operating costs and
expenses 186,567 178,942 716,636 749,277
------- ------- ------- -------
Gain (loss) on disposition
of assets (90) - 429 72
--- --- --- ---
Operating income $1,342 $4,018 $15,536 $25,230
====== ====== ======= =======
KEY OPERATING STATISTICS:
Number of stores (end of
period) (22) 306 309 306 309
Retail fuel sales
(thousands of gallons) 53,974 52,155 208,963 199,147
Retail fuel sales
(thousands of gallons per
site per month) (22) 61 58 59 58
Retail fuel margin (cents
per gallon) (23) 18.5 20.0 19.8 21.3
Retail fuel sales price
(dollars per gallon) (24) $2.02 $1.95 $1.95 $2.24
Merchandise sales $78,948 $80,958 $324,434 $328,505
Merchandise sales (per
site per month) (22) $86 $87 $88 $91
Merchandise margin (25) 30.5% 31.1% 31.2% 31.9%
Capital expenditures $850 $4,110 $5,630 $18,993
(1) Includes excise taxes on sales by the retail segment of $21,087 and $20,367 for the three
months ended December 31, 2016 and 2015, respectively, and $81,602 and $77,860 for the years
ended December 31, 2016 and 2015, respectively.
(2) Includes corporate headquarters selling, general and administrative expenses of $181 and $181
for the three months ended December 31, 2016 and 2015, respectively, and $738 and $713 for
the years ended December 31, 2016 and 2015, respectively, which are not allocated to our
three operating segments.
(3) Includes corporate depreciation and amortization of $713 and $325 for the three months ended
December 31, 2016 and 2015, respectively, and $2,710 and $1,552 for the years ended December
31, 2016 and 2015, respectively, which are not allocated to our three operating segments.
(4) During the three months and year ended December 31, 2015, we recognized a goodwill impairment
loss of $39,028 related to our California refining reporting unit.
(5) The following table provides a reconciliation of net income (loss) available to stockholders
under United States generally accepted accounting principles ("GAAP") to adjusted net income
(loss) available to stockholders utilized in determining adjusted earnings (loss) per share,
excluding after-tax employee retention expense, loss on impairment of goodwill, after-tax
loss on asphalt inventory adjustment, after-tax insurance recoveries net of professional
fees, after-tax unrealized gains (losses) on commodity swaps and after-tax gain (loss) on
disposition of assets. Our management believes that the presentation of adjusted net income
(loss) available to stockholders and adjusted earnings (loss) per share, excluding these
items, is useful to investors because it provides a more meaningful measurement for
evaluation of our Company's operating results.
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(18,098) $(52,534) $(82,805) $52,751
Exclude adjustments:
Employee retention expense 2,000 1,333 10,700 11,333
Loss on impairment of goodwill - 39,028 - 39,028
Loss on asphalt inventory adjustment 740 1,662 1,032 8,118
Insurance recoveries, net of professional
fees - (3,648) - (3,648)
Unrealized (gains) losses on commodity
swaps 3,767 1,077 14,799 (7,937)
(Gain) loss on disposition of assets 90 (1,319) 1,650 (1,914)
--- ------ ----- ------
Total adjustments 6,597 38,133 28,181 44,980
Income tax impact related to adjustments (2,762) 245 (10,413) (1,731)
Non-controlling interest impact related
to adjustments (16) (479) (75) (541)
Adjusted net income (loss) available to
stockholders $(14,279) $(14,635) $(65,112) $95,459
======== ======== ======== =======
Adjusted earnings (loss) per share * $(0.20) $(0.21) $(0.92) $1.37
====== ====== ====== =====
* Adjusted
earnings
(loss) per
share
includes the
effects of
dividends on
preferred
stock on
adjusted net
income
(loss)
available to
stockholders
necessary to
calculate
earnings
(loss) per
share.
(6) Adjusted EBITDA represents earnings before net income attributable to non-controlling
interest, income tax expense (benefit), interest expense, depreciation and amortization,
gain (loss) on disposition of assets, loss on impairment of goodwill and unrealized gains
(losses) on commodity swaps. Adjusted EBITDA is not a recognized measurement under GAAP;
however, the amounts included in Adjusted EBITDA are derived from amounts included in our
consolidated financial statements. Our management believes that the presentation of
Adjusted EBITDA is useful to investors because it is frequently used by securities
analysts, investors, and other interested parties in the evaluation of companies in our
industry. In addition, our management believes that Adjusted EBITDA is useful in
evaluating our operating performance compared to that of other companies in our industry
because the calculation of Adjusted EBITDA generally eliminates the effects of net income
attributable to non-controlling interest, income tax expense (benefit), interest
expense, gain (loss) on disposition of assets, loss on impairment of goodwill, unrealized
gains (losses) on commodity swaps and the accounting effects of capital expenditures and
acquisitions, items that may vary for different companies for reasons unrelated to
overall operating performance.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in
isolation, or as a substitute for analysis of our results as reported under GAAP. Some of
these limitations are:
Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital
expenditures or contractual commitments;
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary
to service interest or principal payments on our debt;
Adjusted EBITDA does not reflect the prior claim that non-controlling interest have on
the income generated by non-wholly-owned subsidiaries;
Adjusted EBITDA does not reflect changes in or cash requirements for our working capital
needs; and
Our calculation of Adjusted EBITDA may differ from EBITDA calculations of other companies
in our industry, limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA should not be considered a measure of
discretionary cash available to us to invest in the growth of our business. We compensate
for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA
only supplementally.
The following table reconciles net income (loss) available to stockholders to Adjusted
EBITDA for the three months and years ended December 31, 2016 and 2015:
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands)
Net income (loss) available to
stockholders $(18,098) $(52,534) $(82,805) $52,751
Net income attributable to non-
controlling interest 2,293 628 2,972 29,636
Income tax expense (benefit) (11,383) (4,860) (46,789) 48,282
Interest expense 16,584 19,876 69,717 79,826
Depreciation and amortization 36,852 32,232 145,577 126,494
(Gain) loss on disposition of
assets 90 (1,319) 1,650 (1,914)
Loss on impairment of goodwill - 39,028 - 39,028
Unrealized (gains) losses on
commodity swaps 3,767 1,077 14,799 (7,937)
Adjusted EBITDA $30,105 $34,128 $105,121 $366,166
======= ======= ======== ========
Adjusted EBITDA does not exclude losses of $(740) and $(1,662) for the three months ended
December 31, 2016 and 2015, respectively, and $(1,032) and $(8,118) for the years ended
December 31, 2016 and 2015, respectively, resulting from a price adjustment related to
asphalt inventory.
(7) Includes corporate capital
expenditures of $635 and $996 for
the three months ended December
31, 2016 and 2015, respectively,
and $3,348 and $5,388 for the
years ended December 31, 2016 and
2015, respectively, which are not
allocated to our three operating
segments.
(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 and year ended
December 31, 2016 excludes
realized and unrealized gains
(losses) on commodity swaps of
$(28) and $367, respectively.
The refinery operating margin for
the three months and year ended
December 31, 2015 excludes
realized and unrealized gains on
commodity swaps of $9,759 and
$59,215, respectively. The
refinery operating margin for the
three months and year ended
December 31, 2015 also excludes
insurance recoveries of $10,868.
The refinery operating margin for
the Big Spring refinery and the
Krotz Springs refinery excludes
$3,941 related substantially to
inventory adjustments for the
year ended December 31, 2015.
(10) The operating margin for our
California renewable fuels
facility 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,
California low-carbon fuel
standards credits and blender's
tax credits generated by the
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 barrels per day of
various products 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 the supply and offtake
arrangement of $7,428 and $0 for
the three months ended December
31, 2016 and 2015, respectively,
and $28,354 and $24,988 for the
years ended December 31, 2016 and
2015, 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 losses of
$(740) and $(1,662) for the three
months ended December 31, 2016
and 2015, respectively, and
$(1,032) and $(8,118) for the
years ended December 31, 2016 and
2015, respectively, resulting
from a price adjustment related
to asphalt inventory. These
losses are included in operating
income of the asphalt segment.
(22) At December 31, 2016, we had 306
retail convenience stores of
which 296 sold fuel. At December
31, 2015, we had 309 retail
convenience stores of which 298
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.
(23) Retail fuel margin represents the
difference between retail fuel
sales revenue and the net cost of
purchased retail fuel, including
transportation costs and
associated excise taxes,
expressed on a cents-per-gallon
basis. Retail fuel margins are
frequently used in the retail
industry to measure operating
results related to retail fuel
sales.
(24) Retail fuel sales price per gallon
represents the average sales
price for retail fuels sold
through our retail convenience
stores.
(25) Merchandise margin represents the
difference between merchandise
sales revenues and the delivered
cost of merchandise purchases,
net of rebates and commissions,
expressed as a percentage of
merchandise sales revenues.
Merchandise margins, also
referred to as in-store margins,
are commonly used in the retail
industry to measure in-store, or
non-fuel, operating results.
Contacts: Stacey 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
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alon-usa-energy-reports-fourth-quarter-and-full-year-2016-results-300412946.html
SOURCE Alon USA Energy, Inc.
