Alon USA Reports Fourth Quarter And Full Year 2009 Results
YEAR-TO-DATE 2009
Special items for the year ended December 31, 2009 include after-tax losses of ($11.6) million for the write-off of unamortized debt issuance costs related to the full prepayment of the Alon Refining Krotz Springs, Inc. term loan, and ($0.9) million recognized on disposition of assets. Also, special items include dividends of ($12.0) million associated with the conversion by Alon Israel of its preferred shares in Alon Refining Louisiana to Alon common stock and accrued dividends of ($8.0) million on the preferred shares in Alon Refining Louisiana prior to conversion. Special items for the year ended December 31, 2008 include after-tax losses of ($70.7) million associated with inventories acquired in the July 2008 Krotz Springs refinery acquisition; ($31.6) million associated with the Big Spring refinery fire and after-tax gains of $155.3 million associated with the involuntary conversion of assets due to the Big Spring refinery fire; and $27.4 million recognized primarily from the disposition of assets in connection with the contribution of certain product pipelines and terminals to Holly Energy Partners, LP, in March 2005. Also, special items include accrued dividends of ($4.0) million on the preferred shares in Alon Refining Louisiana.
Refinery operating margin at the Big Spring refinery was $4.35 per barrel for the year ended December 31, 2009, compared to ($3.18) per barrel for the same period in 2008. This increase was primarily due to the depressed margins experienced in conjunction with the fire at the Big Spring refinery in 2008. The Big Spring refinery light product yields were approximately 82% for the year ended December 31, 2009, compared to 70% for the same period in 2008. Refinery operating margin at the California refineries was $1.80 per barrel for the year ended December 31, 2009, compared to $1.65 per barrel for the same period in 2008. The Krotz Springs refinery operating margin for the year ended December 31, 2009, was $5.66 per barrel compared to $7.25 per barrel for the period from its acquisition effective July 1, 2008 through December 31, 2008. The lower Krotz Springs refinery operating margin is due primarily to lower Gulf Coast 2/1/1 high sulfur diesel margins in 2009.
The Big Spring refinery and California refineries combined throughput for the year ended December 31, 2009 averaged 91,028 bpd, consisting of 59,870 bpd at the Big Spring refinery and 31,158 bpd at the California refineries compared to a combined average of 68,892 bpd for the same period last year, consisting of 37,793 bpd at the Big Spring refinery and 31,099 bpd at the California refineries. The Big Spring refinery had higher throughput for the year ended December 31, 2009, compared to the same period last year primarily due to the 2008 fire at the Big Spring refinery. The Krotz Springs refinery throughput for the year ended December 31, 2009, averaged 48,337 bpd and for the period from its acquisition effective July 1, 2008 through December 31, 2008, averaged 58,184 bpd. The lower throughput in 2009 is due to a turnaround that began in November 2009.
Gulf Coast 3/2/1 average crack spreads were $7.24 per barrel for the year ended December 31, 2009, compared to $10.47 per barrel for the same period in 2008. Gulf Coast 2/1/1 high sulfur diesel average crack spreads for the year ended December 31, 2009, was $6.50 per barrel compared to $11.28 per barrel for the same period in 2008. West Coast 3/2/1 average crack spreads for the year ended December 31, 2009, was $13.92 per barrel compared to $15.80 per barrel for the same period in 2008. The average sweet/sour spread for the year ended December 31, 2009, was $1.52 per barrel compared to $3.78 per barrel for the same period in 2008. The average light/heavy spread for the year ended December 31, 2009, was $5.46 per barrel compared to $15.63 per barrel for the same period in 2008. Asphalt margins decreased to an average of $46.07 per ton for the year ended December 31, 2009, compared to $113.43 per ton for the same period in 2008. On a cash basis asphalt margins for the year ended December 31, 2009, were $67.34 per ton compared to $80.22 per ton for the same period in 2008. Adjusted EBITDA, including earnings in asphalt partnerships of $22.2 million, for the year ended December 31, 2009, was $53.7 million after excluding negative inventory effects of $25.3 million compared to adjusted EBITDA, including earnings in asphalt partnerships of ($2.8) million, for the same period in 2008 of $53.7 million after excluding positive inventory effects of $43.1 million. The average blended asphalt sales price decreased 19.9% from $511.95 per ton for the year ended December 31, 2008, to $409.88 per ton for the year ended December 31, 2009, and the average non-blended asphalt sales price decreased 46.1% from $315.48 per ton for the year ended December 31, 2008 to $170.05 per ton for the year ended December 31, 2009. The blended asphalt sales accounted for 92% of total asphalt sales for the year ended December 31, 2009. The decrease in the blended asphalt sales price of 19.9% was less than the 37.9% decrease in WTI prices for the year ended December 31, 2009. In our retail and branded marketing segment, retail fuel sales gallons increased by 24.4% from 97.0 million gallons for the year ended December 31, 2008, to 120.7 million gallons for the year ended December 31, 2009. Our integrated branded fuel sales increased by 15.6% from 225.5 million gallons for the year ended December 31, 2008, to 260.6 million gallons for the year ended December 31, 2009. Alon also announced today that its Board of Directors has approved the regular quarterly cash dividend of $0.04 per share. The dividend is payable on March 31, 2010 to stockholders of record at the close of business on March 15, 2010. CONFERENCE CALL The Company has scheduled a conference call for Wednesday, March 3, 2010, at 10:00 a.m. Eastern, to discuss the fourth quarter 2009 results. To access the call, please dial 1-877-941-2332, or 480-629-9722, 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 on the Alon corporate website, http://www.alonusa.com, by logging onto that site and clicking “Investors”. A telephonic replay of the conference call will be available through March 17, 2010, and may be accessed by calling 1-800-406-7325, or 303-590-3030, for international callers, and using the passcode 4199446#. A web cast archive will also be available at http://www.alonusa.com shortly after the call and will be accessible for approximately 90 days. For more information, please contact Donna Washburn at DRG&E at 713-529-6600 or email dmw@drg-e.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. The Company owns four crude oil refineries in Texas, California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 250,000 barrels per day. Alon is a leading producer of asphalt, which it markets through its asphalt terminals predominately in the Western United States. Alon is the largest 7-Eleven licensee in the United States and operates more than 300 convenience stores in Texas and New Mexico. Alon markets motor fuel products under the FINA brand at these locations and at approximately 640 distributor-serviced locations. 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.
Contacts: Claire A. Hart, Senior Vice President
Alon USA Energy, Inc.
972-367-3649
Investors: Jack Lascar/Sheila Stuewe
DRG&E / 713-529-6600
Media: Blake Lewis
Lewis Public Relations
214-635-3020
Ruth Sheetrit
SMG Public Relations
011-972-547-555551
-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, 2008 AND INCOME
STATEMENT DATA FOR THE YEAR
ENDED DECEMBER 31, 2008 IS
UNAUDITED) For the Three Months Ended For the Year Ended
-------------------------- ------------------
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(dollars in thousands, except per share data)
STATEMENT OF OPERATIONS
DATA:
Net sales (1) $834,041 $986,166 $3,915,732 $5,156,706
Operating costs and
expenses:
Cost of sales 809,439 819,407 3,502,782 4,853,195
Direct operating expenses 61,202 66,915 265,502 216,498
Selling, general and
administrative
expenses (2) 33,674 33,499 129,446 119,852
Net costs associated with
fire (3) - 13,642 - 56,854
Business interruption
recovery (4) - (25,000) - (55,000)
Depreciation and
amortization (5) 26,349 22,270 97,247 66,754
------ ------ ------ ------
Total operating
costs and
expenses 930,664 930,733 3,994,977 5,258,153
------- ------- --------- ---------
Gain on involuntary
conversion of assets (6) - 80,000 - 279,680
Gain (loss) on disposition
of assets (7) 556 2,239 (1,591) 45,244
--- ----- ------ ------
Operating income (loss) (96,067) 137,672 (80,836) 223,477
Interest expense (8) (40,398) (24,665) (111,137) (67,550)
Equity earnings (losses) of
investees 3,374 785 24,558 (1,522)
Other income, net 63 407 331 1,500
--- --- --- -----
Income (loss) before income
tax expense (benefit), non-
controlling interest in
income (loss) of
subsidiaries and
accumulated dividends on
preferred stock of
subsidiary (133,028) 114,199 (167,084) 155,905
Income tax expense
(benefit) (51,871) 46,931 (64,877) 62,781
------- ------ ------- ------
Income (loss) before non-
controlling interest in
income (loss) of
subsidiaries and
accumulated dividends on
preferred stock of
subsidiary (81,157) 67,268 (102,207) 93,124
Non-controlling interest in
income (loss) of
subsidiaries (5,598) 4,181 (8,551) 5,941
Accumulated dividends on
preferred stock of
subsidiary (9) 15,050 2,150 21,500 4,300
------ ----- ------ -----
Net income (loss) available
to common stockholders $(90,609) $60,937 $(115,156) $82,883
======== ======= ========= =======
Earnings (loss) per share,
basic $(1.93) $1.30 $(2.46) $1.77
====== ===== ====== =====
Weighted average shares
outstanding, basic (in
thousands) 46,890 46,800 46,829 46,788
Earnings (loss) per share,
diluted $(1.93) $1.18 $(2.46) $1.72
====== ===== ====== =====
Weighted average shares
outstanding, diluted (in
thousands) 46,890 52,360 46,829 49,583
Cash dividends per share $0.04 $0.04 $0.16 $0.16
===== ===== ===== =====
CASH FLOW DATA: (10)
Net cash provided by (used
in):
Operating activities $(41,987) $7,582 $283,145 $(812)
Investing activities (45,086) (26,572) (138,691) (610,322)
Financing activities 109,432 18,768 (122,471) 560,973
OTHER DATA:
Adjusted net income
(loss) (11) $(65,402) $65,147 $(82,708) $6,555
Earnings (loss) per share,
excluding write-off of
unamortized debt issuance
costs, net of tax,
inventories adjustments
related to acquisition, net
of tax, net costs
associated with fire, net
of tax, after-tax gain on
involuntary conversion of
assets, after-tax gain
(loss) on disposition of
assets and preferred shares
dividends and conversion
(11) $(1.39) $1.39 $(1.77) $0.14
Adjusted EBITDA (12) (66,837) 158,895 42,891 244,965
Capital expenditures (13) 12,007 21,108 81,660 62,356
Capital expenditures to
rebuild the Big Spring
refinery 1,697 49,612 46,769 362,178
Capital expenditures for
turnaround and chemical
catalyst 11,694 7,886 24,699 9,958
December 31, December 31,
------------ ------------
2009 2008
---- ----
BALANCE SHEET DATA (end of period):
Cash and cash equivalents $40,437 $18,454
Working capital 84,257 250,384
Total assets 2,131,008 2,413,433
Total debt 937,024 1,103,569
Total equity 431,918 536,867
REFINING AND UNBRANDED
MARKETING SEGMENT
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(dollars in thousands, except per barrel
data and pricing statistics)
STATEMENT OF
OPERATIONS DATA:
Net sales (14) $706,126 $860,900 $3,359,043 $4,551,769
Operating costs and
expenses:
Cost of sales 720,512 812,729 3,117,528 4,505,094
Direct operating
expenses 50,083 57,892 221,378 173,142
Selling, general and
administrative
expenses 7,876 5,332 29,376 17,784
Net costs associated
with fire (3) - 13,642 - 56,854
Business interruption
recovery (4) - (25,000) - (55,000)
Depreciation and
amortization 21,132 18,126 76,252 50,047
------ ------ ------ ------
Total operating
costs and
expenses 799,603 882,721 3,444,534 4,747,921
------- ------- --------- ---------
Gain on involuntary
conversion of
assets (6) - 80,000 - 279,680
Gain (loss) on
disposition of
assets (7) 558 2,239 (1,042) 45,244
--- ----- ------ ------
Operating income
(loss) $(92,919) $60,418 $(86,533) $128,772
======== ======= ======== ========
KEY OPERATING
STATISTICS AND OTHER
DATA:
Total sales volume
(bpd) 72,241 127,469 127,400 119,195
Per barrel of
throughput:
Refinery operating
margin – Big
Spring (15) $(2.87) $(12.91) $4.35 $(3.18)
Refinery operating
margin – CA
Refineries (15) (1.23) 11.74 1.80 1.65
Refinery operating
margin – Krotz
Springs (15) (2.03) 7.30 5.66 7.25
Refinery direct
operating expense –
Big Spring (16) 4.07 3.35 4.21 4.40
Refinery direct
operating expense –
CA Refineries (16) 8.17 8.59 4.82 5.81
Refinery direct
operating expense –
Krotz Springs (16) 7.80 4.67 4.22 4.30
Capital expenditures 9,864 19,131 73,567 57,576
Capital expenditures
to rebuild the Big
Spring refinery 1,697 49,612 46,769 362,178
Capital expenditures
for turnaround and
chemical catalyst 7,852 7,886 24,699 9,958
PRICING STATISTICS:
WTI crude oil (per
barrel) $76.04 $58.51 $61.82 $99.56
WTS crude oil (per
barrel) 73.97 54.82 60.30 95.78
MAYA crude oil (per
barrel) 69.37 44.93 56.36 83.93
Crack spreads (3/2/1)
(per barrel):
Gulf Coast (17) $4.55 $3.49 $7.24 $10.47
Group III (17) 5.37 5.78 8.10 11.15
West Coast (17) 8.51 8.79 13.92 15.80
Crack spreads
(6/1/2/3) (per
barrel):
West Coast (17) $2.43 $1.25 $4.15 $0.48
Crack spreads (2/1/1)
(per barrel):
Gulf Coast high-
sulfur diesel (17) $4.61 $5.70 $6.50 $11.28
Gulf Coast ultra low-
sulfur diesel $4.95 $7.18 $7.44 $13.61
Crude oil
differentials (per
barrel):
WTI less WTS (18) $2.07 $3.69 $1.52 $3.78
WTI less MAYA (18) 6.67 13.58 5.46 15.63
Product price
(dollars per
gallon):
Gulf Coast unleaded
gasoline $1.899 $1.300 $1.635 $2.471
Gulf Coast ultra low-
sulfur diesel 1.957 1.828 1.664 2.918
Gulf Coast high
sulfur diesel 1.941 1.757 1.619 2.808
Group III unleaded
gasoline 1.920 1.352 1.662 2.481
Group III ultra low-
sulfur diesel 1.975 1.888 1.670 2.945
West Coast LA CARBOB
(unleaded gasoline) 2.013 1.521 1.852 2.679
West Coast LA ultra
low-sulfur diesel 2.014 1.766 1.706 2.883
Natural gas (per
MMBTU) 4.93 6.40 4.16 8.90
THROUGHPUT AND
PRODUCTION DATA:
BIG SPRING For the Three Months Ended For the Year Ended
REFINERY December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery
throughput:
Sour crude 42,392 83.5 44,922 83.0 48,340 80.8 31,654 83.8
Sweet crude 5,758 11.3 5,862 10.8 9,238 15.4 4,270 11.3
Blendstocks 2,631 5.2 3,372 6.2 2,292 3.8 1,869 4.9
----- --- ----- --- ----- --- ----- ---
Total refinery
throughput (19) 50,781 100.0 54,156 100.0 59,870 100.0 37,793 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery
production:
Gasoline 25,051 49.8 25,062 47.0 26,826 45.0 14,266 38.4
Diesel/jet 15,159 30.1 17,320 32.5 19,136 32.2 10,439 28.2
Asphalt 3,538 7.0 5,736 10.8 5,289 8.9 4,850 13.1
Petrochemicals 1,865 3.7 2,504 4.7 2,928 4.9 1,221 3.3
Other 4,744 9.4 2,685 5.0 5,327 9.0 6,298 17.0
----- --- ----- --- ----- --- ----- ----
Total refinery
production (20) 50,357 100.0 53,307 100.0 59,506 100.0 37,074 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery
utilization (21) 68.8% 72.5% 82.3% 52.3%
THROUGHPUT AND
PRODUCTION DATA:
CALIFORNIA For the Three Months Ended For the Year Ended
REFINERIES December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery
throughput:
Medium sour
crude 5,230 25.4 897 4.3 13,408 43.0 8,014 25.8
Heavy crude 14,934 72.4 19,620 95.2 17,420 55.9 22,590 72.6
Blendstocks 454 2.2 96 0.5 330 1.1 495 1.6
--- --- --- --- --- --- --- ---
Total refinery
throughput (19) 20,618 100.0 20,613 100.0 31,158 100.0 31,099 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery
production:
Gasoline 3,754 18.8 2,560 12.6 4,920 16.2 4,141 13.7
Diesel/jet 3,857 19.3 5,156 25.2 7,123 23.5 7,481 24.8
Asphalt 5,301 26.5 7,914 38.7 8,976 29.5 9,214 30.5
Light
unfinished - - - - 117 0.4 - -
Heavy
unfinished 7,042 35.3 4,783 23.4 8,813 29.0 9,182 30.4
Other 23 0.1 24 0.1 418 1.4 192 0.6
--- --- --- --- --- --- --- ---
Total
refinery
production (20) 19,977 100.0 20,437 100.0 30,367 100.0 30,210 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery
utilization (21) 27.8% 43.8% 46.2% 46.3%
THROUGHPUT AND
PRODUCTION DATA:
KROTZ SPRINGS For the Three Months Ended For the Year Ended
REFINERY (A) December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery
throughput:
Light sweet
crude 5,694 26.2 48,920 84.4 22,942 47.5 43,361 74.5
Heavy sweet
crude 15,036 69.3 5,363 9.2 22,258 46.0 11,979 20.6
Blendstocks 984 4.5 3,699 6.4 3,137 6.5 2,844 4.9
----- --- ----- --- ----- --- ----- ---
Total refinery
throughput(19) 21,714 100.0 57,982 100.0 48,337 100.0 58,184 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery
production:
Gasoline 9,313 42.1 26,135 44.7 22,264 45.4 25,195 42.8
Diesel/jet 9,539 43.1 26,053 44.5 21,318 43.4 26,982 45.9
Heavy oils 1,494 6.7 1,543 2.6 1,238 2.5 1,402 2.4
Other 1,789 8.1 4,817 8.2 4,258 8.7 5,258 8.9
----- --- ----- --- ----- --- ----- ---
Total refinery
production(20) 22,135 100.0 58,548 100.0 49,078 100.0 58,837 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery
utilization(21) 74.0% 65.3% 65.3% 66.6%
(A) The year ended December 31, 2008, represents throughput and
production data for the period from July 1, 2008 through December 31,
2008.
ASPHALT SEGMENT For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(dollars in thousands, except per ton data)
STATEMENT OF OPERATIONS
DATA:
Net sales $89,486 $104,448 $440,915 $647,221
Operating costs and
expenses:
Cost of sales (22) 78,169 17,035 386,050 499,992
Direct operating
expenses 11,119 9,023 44,124 43,356
Selling, general and
administrative
expenses 1,117 1,249 4,588 4,292
Depreciation and
amortization 1,708 536 6,807 2,139
----- --- ----- -----
Total operating costs
and expenses 92,113 27,843 441,569 549,779
------ ------ ------- -------
Operating income (loss) $(2,627) $76,605 $(654) $97,442
======= ======= ===== =======
KEY OPERATING STATISTICS
AND OTHER DATA:
Blended asphalt sales
volume (tons in
thousands) (23) 181 182 994 1,210
Non-blended asphalt
sales volume (tons in
thousands) (24) 54 25 197 88
Blended asphalt sales
price per ton (23) $434.53 $533.73 $409.88 $511.95
Non-blended asphalt
sales price per ton (24) $200.67 $292.40 $170.05 $315.48
Asphalt margin per
ton (25) $48.16 $422.29 $46.07 $113.43
Capital expenditures $1,480 $337 $2,579 $644
RETAIL AND BRANDED
MARKETING SEGMENT For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(dollars in thousands, except per gallon data)
STATEMENT OF
OPERATIONS DATA:
Net sales $217,058 $189,297 $808,221 $1,227,319
Operating costs and
expenses:
Cost of sales (22) 189,387 158,122 691,651 1,117,712
Selling, general and
administrative
expenses 24,493 26,767 94,725 97,172
Depreciation and
amortization 3,285 3,384 13,464 13,674
----- ----- ------ ------
Total operating costs
and expenses 217,165 188,273 799,840 1,228,558
------- ------- ------- ---------
Loss on disposition of
assets (2) - (549) -
--- --- ---- ---
Operating income
(loss) $(109) $1,024 $7,832 $(1,239)
===== ====== ====== =======
KEY OPERATING STATISTICS
AND OTHER DATA:
Integrated branded
fuel sales (thousands
of gallons) (26) 65,645 61,685 260,629 225,474
Integrated branded
fuel margin (cents
per gallon) (26) 5.0 10.4 5.9 4.4
Non-Integrated
branded fuel sales
(thousands of
gallons) (26) 3,527 9,939 13,472 113,626
Non-Integrated
branded fuel margin
(cents per gallon)
(26) 0.8 8.9 3.3 (0.3)
Number of stores (end
of period) 308 306 308 306
Retail fuel sales
(thousands of
gallons) 31,401 23,882 120,697 96,974
Retail fuel sales
(thousands of gallons
per site per month) (27) 34 27 33 27
Retail fuel margin
(cents per gallon) (28) 10.8 18.8 13.9 19.7
Retail fuel sales
price (dollar per
gallon) (29) $2.49 $2.31 $2.29 $3.26
Merchandise sales $66,110 $63,213 $268,785 $261,144
Merchandise sales (per
site per month) (27) 72 72 73 72
Merchandise margin (30) 30.1% 30.9% 30.7% 30.9%
Capital expenditures $1,598 $917 $3,822 $2,928
(1) Includes excise taxes on sales by the retail and branded marketing
segment of $12,250 and $9,408 for the three months ended December 31,
2009 and 2008, respectively, and $47,137 and $37,483 for the years
ended December 31, 2009 and 2008, respectively.
(2) Includes corporate headquarters selling, general and administrative
expenses of $188 and $151 for the three months ended December 31,
2009 and 2008, respectively, and $757 and $604 for the years ended
December 31, 2009 and 2008, respectively, which are not allocated to
our three operating segments.
(3) Includes $13,642 and $51,064 for the three months and year ended
December 31, 2008, respectively, of expenses incurred from pipeline
commitment deficiencies, crude sale losses and other incremental
costs; $5,000 for the year ended December 31, 2008 for our third
party liability insurance deductible under the insurance policy; and
depreciation for the temporarily idled facilities of $790 for the
year ended December 31, 2008.
(4) Business interruption recovery of $25,000 and $55,000 was recorded
for the three months and year ended December 31, 2008, respectively,
as a result of the Big Spring refinery fire with all insurance
proceeds received in 2008 and January 2009.
(5) Includes corporate depreciation and amortization of $224 and $224 for
the three months ended December 31, 2009 and 2008, respectively, and
$724 and $894 for the years ended December 31, 2009 and 2008,
respectively, which are not allocated to our three operating
segments.
(6) A gain on involuntary conversion of assets has been recorded of
$80,000 and $279,680 for the three months and year ended December 31,
2008, respectively, for the proceeds received in excess of the book
value of the assets impaired of $25,330 and demolition and repair
expenses of $24,990 incurred for the year ended December 31, 2008 as
a result of the Big Spring refinery fire.
(7) Gain on disposition of assets for the year ended December 31, 2008,
primarily includes the recognition of deferred gain recorded in
connection with the contribution of certain product pipelines and
terminals to Holly Energy Partners, LP, ("HEP"), in March 2005 ("HEP
transaction"). A recognized gain of $42.9 million in 2008
represented all the remaining deferred gain associated with the HEP
transaction and was due to the termination of an indemnification
agreement with HEP.
(8) Interest expense for the three months and year ended December 31,
2009 includes $20,482 of unamortized debt issuance costs written off
as a result of prepayments of $163,819 of term debt in October 2009.
Interest expense for the year ended December 31, 2009 also includes
$5,715 related to the liquidation of the heating oil hedge in the
second quarter of 2009.
(9) Accumulated dividends on preferred stock of subsidiary for the three
months and year ended December 31, 2009, represent dividends of
$12,900 for the conversion of the preferred stock into Alon common
stock. Also included for the year ended December 31, 2009 is $8,600
of accumulated dividends through September 30, 2009.
(10) Cash provided by operating activities for the year ended December 31,
2009 includes proceeds from the liquidation of the heating oil crack
spread hedge of $133,581 and proceeds from the receipt of income tax
receivables of $112,952. Cash used in financing activities for the
year ended December 31, 2009, includes repayments on long-term debt
and revolving credit facilities sourced primarily from the
liquidation proceeds from the heating oil crack spread hedge and
proceeds from the receipt of income tax receivables. Cash used in
investing activities and cash provided by financing activities for
the year ended December 31, 2008, is a result of the Krotz Springs
refinery acquisition.
(11) The following table provides a reconciliation of net income (loss)
under United States generally accepted accounting principles ("GAAP")
to adjusted net income (loss) utilized in determining earnings (loss)
per common share, excluding the after-tax loss on write-off of
unamortized debt issuance costs, after-tax inventories adjustments
related to acquisition, after-tax loss on net costs associated with
fire, after-tax gain on involuntary conversion of assets, after-tax
gain (loss) on disposition of assets and preferred shares dividends
and conversions. Our management believes that the presentation of
adjusted net income (loss) and earnings (loss) per common share,
excluding these after-tax items, is useful to investors because it
provides a more meaningful measurement for evaluation of our
Company's operating results.
Three Months Ended Year Ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
(dollars in thousands, except
earnings per share)
Net income (loss) $(90,609) $60,937 $(115,156) $82,883
Plus: Write-off of
unamortized debt issuance
costs, net of tax 11,583 - 11,583 -
Plus: Preferred shares
dividends and conversion 13,975 1,999 19,965 3,999
Plus: Inventories
adjustments related to
acquisition, net of tax - 34,959 - 70,738
Plus: Net costs
associated with fire, net
of tax - 6,116 - 31,566
Plus: Loss on
disposition of assets,
net of tax - - 900 -
Less: Gain on
involuntary
conversion of assets,
net of tax - (37,831) - (155,281)
Less: Gain on
disposition of
assets, net
of tax (351) (1,033) - (27,350)
---- ------ --- -------
Adjusted net income (loss) $(65,402) $65,147 $(82,708) $6,555
-------- ------- -------- ------
Weighted average shares
outstanding (in thousands) 46,890 46,800 46,829 46,788
====== ====== ====== ======
Earnings (loss) per share,
excluding write-off of
unamortized debt issuance
costs, net of tax, inventories
adjustments related to
acquisition, net of tax, net
costs associated with fire, net
of tax, after-tax gain on
involuntary conversion of
assets, after-tax gain (loss)
on disposition of assets and
preferred shares dividends and
conversions $(1.39) $1.39 $(1.77) $0.14
====== ===== ====== =====
(12) Adjusted EBITDA represents earnings before non-controlling interest
in income of subsidiaries, income tax expense, interest expense,
depreciation and amortization and gain on disposition of assets.
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 during periods of normal operations 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 non-controlling interest in
income of subsidiaries, income tax expense, interest expense, gain on
disposition of assets 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) to Adjusted EBITDA
for the three months and years ended December 31, 2009 and 2008,
respectively:
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
(dollars in thousands)
Net income (loss) $(90,609) $60,937 $(115,156) $82,883
Non-controlling
interest in income
(loss) of subsidiaries
(including accumulated
dividends on preferred
stock of subsidiary) 9,452 6,331 12,949 10,241
Income tax expense
(benefit) (51,871) 46,931 (64,877) 62,781
Interest expense 40,398 24,665 111,137 67,550
Depreciation and
amortization 26,349 22,270 97,247 66,754
(Gain) loss on
disposition of
assets (556) (2,239) 1,591 (45,244)
---- ------ ----- -------
Adjusted EBITDA $(66,837) $158,895 $42,891 $244,965
======== ======== ======= ========
Adjusted EBITDA for the three months and year ended December 31, 2008
includes a gain on involuntary conversion of assets of $80,000 and
$279,680, respectively, representing insurance proceeds received with
respect to property damage resulting from the Big Spring refinery
fire in excess of the book value of the assets impaired; net costs
associated with fire at the Big Spring refinery of $13,642 and
$56,854, respectively; and a charge for inventories adjustments
related to the Krotz Springs acquisition of $66,217 and $127,408,
respectively.
(13) Includes corporate capital expenditures of $717 and $723 for the
three months ended December 31, 2009 and 2008, respectively, and
$3,704 and $1,208 for the years ended December 31, 2009 and 2008,
respectively, which are not included in our three operating segments.
(14) Net sales include intersegment sales to our asphalt and retail and
branded marketing segments at prices which are intended to
approximate wholesale market prices. These intersegment sales are
eliminated through consolidation of our financial statements.
(15) Refinery operating margin is a per barrel measurement calculated by
dividing the margin between net sales and cost of sales (exclusive of
unrealized hedging gains and losses and inventories adjustments
related to acquisitions) 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. There were unrealized hedging gains of $322 and $380
for the California refineries for the three months and year ended
December 31, 2009, respectively, and unrealized hedging losses of $65
and $4,192 for the California refineries for the three months and
year ended December 31, 2008, respectively. There were unrealized
hedging losses of $(151) for the Big Spring refinery for the three
months ended December 31, 2009. There were unrealized hedging gains
of $5,263 and $25,632 for the Krotz Springs refinery for the three
months and year ended December 31, 2009, respectively, and the
refinery operating margin for the Krotz Springs refinery excludes a
charge of $66,217 and $127,408 to cost of sales for inventories
adjustments related to the acquisition for the three months and year
ended December 31, 2008, respectively and unrealized hedging gains of
$117,452 for both the three months and year ended December 31, 2008,
respectively. Additionally, the Krotz Springs refinery margin for
2009 excludes realized gains related to the unwind of the heating oil
crack spread hedge of $139,290.
(16) Refinery direct operating expense is a per barrel measurement
calculated by dividing direct operating expenses at our Big Spring,
California and Krotz Springs refineries, exclusive of depreciation
and amortization, by the applicable refinery's total throughput
volumes.
(17) A 3/2/1 crack spread in a given region is calculated assuming that
three barrels of a benchmark crude oil are converted, or cracked,
into two barrels of gasoline and one barrel of diesel. We calculate
the Gulf Coast 3/2/1 crack spread using the market values of Gulf
Coast conventional gasoline and ultra low-sulfur diesel and the
market value of West Texas Intermediate, or WTI, a light sweet crude
oil. We calculate the Group III 3/2/1 crack spread using the market
values of Group III conventional gasoline and ultra low-sulfur diesel
and the market value of WTI crude oil. We calculate the West Coast
3/2/1 crack spread using the market values of West Coast LA CARB
pipeline gasoline and LA ultra low-sulfur pipeline diesel and the
market value of WTI crude oil. A 6/1/2/3 crack spread is calculated
assuming that six barrels of a benchmark crude oil are converted, or
cracked, into one barrel of gasoline, two barrels of diesel and three
barrels of fuel oil. We calculate the West Coast 6/1/2/3 crack spread
using the market values of West Coast LA CARB pipeline gasoline, LA
ultra low-sulfur pipeline diesel, LA 380 pipeline CST (fuel oil) and
the market value of WTI crude oil. We calculate the Gulf Coast 2/1/1
crack spread using the market values of Gulf Coast conventional
gasoline and Gulf Coast high sulfur diesel and the market value of
WTI crude oil.
(18) The WTI/WTS, or sweet/sour, spread represents the differential
between the average value per barrel of WTI crude oil and the average
value per barrel of WTS crude oil. The WTI/Maya, or light/heavy,
spread represents the differential between the average value per
barrel of WTI crude oil and the average value per barrel of Maya
crude oil.
(19) Total refinery throughput represents the total barrels per day of
crude oil and blendstock inputs in the refinery production process.
(20) 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 refinery.
Light product yields decreased at the Big Spring refinery for the
year ended December 31, 2008 due to the fire on February 18, 2008 and
the re-start of the crude unit in a hydroskimming mode on April 5,
2008.
(21) Refinery utilization represents average daily crude oil throughput
divided by crude oil capacity, excluding planned periods of downtime
for maintenance and turnarounds. The decrease in refinery utilization
at our Big Spring refinery for the year ended December 31, 2008 is
due to the fire on February 18, 2008. Production ceased at the Big
Spring refinery until the re-start of the crude unit in a
hydroskimming mode on April 5, 2008. The Big Spring refinery
returned to normal operating mode with the re-start of the FCCU on
September 26, 2008. The decrease in refinery utilization at our
California refineries is due to reduced throughput to optimize our
refining and asphalt economics. The low refinery utilization at our
Krotz Springs refinery for the fourth quarter of 2008 is due to
shutdowns during hurricanes Gustav and Ike and limited crude supply
and electrical outages following the hurricanes.
(22) Cost of sales includes intersegment purchases of asphalt blends and
motor fuels from our refining and unbranded marketing segment at
prices which approximate wholesale market prices. These intersegment
purchases are eliminated through consolidation of our financial
statements.
(23) Blended asphalt represents base asphalt that has been blended with
other materials necessary to sell the asphalt as a finished product.
(24) Non-blended asphalt represents base material asphalt and other
components that require additional blending before being sold as a
finished product.
(25) 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.
(26) Marketing sales volume represents branded fuel sales to our wholesale
marketing customers located in both our integrated and non-integrated
regions. The branded fuels we sell in our integrated region are
primarily supplied by the Big Spring refinery, but due to the fire on
February 18, 2008 at the Big Spring refinery, more fuel has been
purchased from third-party suppliers. The branded fuels we sell in
the non-integrated region are obtained from third-party suppliers.
The marketing margin represents the margin between the net sales and
cost of sales attributable to our branded fuel sales volume,
expressed on a cents-per-gallon basis and includes net credit card
revenue received from these sales.
(27) Retail fuel and merchandise sales per site for 2009 were calculated
using 306 stores for eleven months and 308 stores for 1 month.
(28) Retail fuel margin represents the difference between motor fuel sales
revenue and the net cost of purchased motor fuel, including
transportation costs and associated motor fuel taxes, expressed on a
cents-per-gallon basis. Motor fuel margins are frequently used in the
retail industry to measure operating results related to motor fuel
sales.
(29) Retail fuel sales price per gallon represents the average sales price
for motor fuels sold through our retail convenience stores.
(30) 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.
SOURCE Alon USA Energy, Inc.
Select the service that is right for you!
COMPARE ALL SERVICESAction Alerts PLUS
TRY IT FREEJim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
Product Features:
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
TheStreet Quant Ratings
TRY IT FREENew! $49.95/yr
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
Product Features:
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Stocks Under $10
TRY IT FREEDavid Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
Product Features:
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
- Weekly roundups
Dividend Stock Advisor
TRY IT FREEJim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Product Features:
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
TRY IT FREEAll of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Product Features:
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Options Profits
TRY IT FREEOur options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Product Features:
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
blog comments powered by Disqus
