Alon USA Reports Fourth Quarter and Full Year 2012 Results Company schedules conference call for March 7, 2013 at 11:30 a.m. Eastern

DALLAS, March 6, 2013 /PRNewswire/ -- Alon USA Energy, Inc. (NYSE: ALJ) ("Alon") today announced results for the quarter and year ended December 31, 2012. Net income for the fourth quarter of 2012 was $22.2 million, or $0.35 per share, compared to net loss of $(12.9) million, or $(0.23) per share, for the same period last year. Excluding special items, Alon recorded net income of $36.1 million, or $0.58 per share, for the fourth quarter of 2012, compared to net loss of $(43.7) million, or $(0.78) per share, for the same period last year.

Net income for the year ended December 31, 2012 was $79.1 million, or $1.29 per share, compared to $42.5 million, or $0.77 per share, for the same period last year. Excluding special items, Alon recorded net income of $127.4 million, or $2.13 per share, for the year ended December 31, 2012, compared to $30.9 million, or $0.56 per share, for the prior year.

The net income discussed above includes the affects of net income (loss) attributable to non-controlling interest.


For the Three Months Ended


For the Year Ended


December 31,


December 31,


2012


2011


2012


2011


(dollars in thousands)

Net income (loss)

$

30,892



$

(13,989)



$

90,597



$

43,748


Net income (loss) attributable to non-controlling interest

8,705



(1,076)



11,463



1,241


Net income (loss) available to stockholders

$

22,187



$

(12,913)



$

79,134



$

42,507


Paul Eisman, President and CEO, commented, "In the fourth quarter we successfully completed the initial public offering of Alon USA Partners, LP (NYSE: ALDW). This transaction highlighted the value of the assets of Alon USA Partners, LP; we sold approximately 18% of the units, and used the entire proceeds to reduce debt. We are very pleased with our results in 2012 and are especially satisfied that we were able to strengthen our balance sheet by reducing total debt by $463 million, net debt by $422 million, and also reducing net debt to total capitalization to 43%. During the fourth quarter, we reduced total debt by $212 million and net debt by $282 million.

"We are also pleased with our operating results in the fourth quarter. Adjusted EBITDA for the quarter was approximately $120 million despite being negatively impacted by $30 million of realized losses on commodity swap hedge positions. Our Adjusted EBITDA of $434 million for the year was negatively impacted by $98 million of realized losses on commodity swap hedge positions.

"The positive margin environment that we saw during most of 2012 continued to remain strong through the fourth quarter. During the quarter, we increased throughput at our Big Spring and Krotz Springs refineries with each averaging over 72,000 barrels per day. We generated very favorable operating margins of $25.26 per barrel at our Big Spring refinery, benefiting from strong location differentials at both Midland and Cushing. At Krotz Springs, we generated an operating margin of $10.36 per barrel as we were able to take advantage of cheaper WTI Midland priced crudes averaging over 30,000 barrels per day for the fourth quarter and averaging over 20,000 barrels per day for the entire year.

"We continue to evaluate alternatives to improve the short and long-term profitability of our California refining operations. As discussed in our November earnings release, with the end of the asphalt season we suspended our California refining operations in November. As part of the suspension, we took measures to reduce the operating costs at our California refineries. We are currently purchasing asphalt to build inventories in preparation for the 2013 season. We are also conducting an engineering study at our Bakersfield refinery location while we are in the permitting process that would allow us to ship, via rail, lighter mid-continent crudes to replace the heavier West Coast crudes currently used in the California system. We expect that the lighter mid-continent crudes will enable us to increase light product yield and significantly reduce asphalt yield.

"In the first quarter of 2013, we are performing maintenance at both the Big Spring and Krotz Springs refineries. We expect the average throughput at the Big Spring refinery to be approximately 60,000 barrels per day and approximately 57,000 barrels per day at the Krotz Springs refinery. At Krotz Springs, we expect to process approximately 28,000 barrels per day of WTI priced crudes in the first quarter.

"For the full year of 2013, we expect the average throughput at the Big Spring refinery to be approximately 68,000 barrels per day and approximately 69,000 barrels per day at the Krotz Springs refinery. At Krotz Springs, we expect to process approximately 30,000 barrels per day of WTI priced crudes in 2013."

FOURTH QUARTER 2012

Special items reduced earnings by $14.0 million for the fourth quarter of 2012 which included after-tax losses of $11.6 million and $5.4 million associated with the write-off of unamortized original issuance discount and debt issuance costs recognized with the prepayment of Alon USA Energy, Inc. term loans, respectively. These after-tax losses were offset by after-tax gains of $2.8 million associated with unrealized gains on commodity swaps and $0.3 million associated with gains recognized on disposition of assets. Special items increased earnings by $30.7 million for the fourth quarter of 2011 which included after-tax gains of $21.6 million associated with unrealized gains on commodity swaps, $8.8 million associated with heating oil call option crack spread contracts and $0.4 million associated with gains recognized on disposition of assets.

Also impacting earnings for the fourth quarter of 2012 was pre-tax realized losses on commodity swaps of $29.8 million. There were no significant realized losses on commodity swaps for the fourth quarter of 2011.

The combined average refinery throughput for the fourth quarter of 2012 averaged 154,410 barrels per day ("bpd"), consisting of 72,109 bpd at the Big Spring refinery, 10,066 bpd at the California refineries and 72,235 bpd at the Krotz Springs refinery, compared to a combined refinery average throughput of 150,996 bpd for the fourth quarter of 2011, consisting of 71,700 bpd at the Big Spring refinery, 27,141 bpd at the California refineries and 52,155 bpd at the Krotz Springs refinery where throughput was reduced from a planned shutdown.

Refinery operating margin at the Big Spring refinery was $25.26 per barrel for the fourth quarter of 2012 compared to $14.14 per barrel for the same period in 2011. This increase is due to higher Gulf Coast 3/2/1 crack spreads and a widening of the WTI to WTS spread. Refinery operating margin at the California refineries was $6.50 per barrel for the fourth quarter of 2012, compared to $(3.98) per barrel for the same period in 2011. This increase is due to higher West Coast 3/1/1/1 crack spreads and higher light product yields. Refinery operating margin at the Krotz Springs refinery was $10.36 per barrel for the fourth quarter of 2012, compared to $(6.03) per barrel for the same period in 2011. This increase is mainly due to lower crude oil costs with the addition of WTI priced crude oils and higher Gulf Coast 2/1/1 high sulfur diesel crack spreads.

The average Gulf Coast 3/2/1 crack spread was $27.10 per barrel for the fourth quarter of 2012 compared to $19.95 per barrel for the fourth quarter of 2011. The average West Coast 3/1/1/1 crack spread for the fourth quarter of 2012 was $13.80 per barrel compared to $3.58 per barrel for the fourth quarter of 2011. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for the fourth quarter of 2012 was $9.03 per barrel compared to $(1.50) per barrel for the fourth quarter of 2011.

The average WTI to WTS spread for the fourth quarter of 2012 was $9.55 per barrel compared to $0.84 per barrel for the same period in 2011. The average LLS to WTI spread for the fourth quarter of 2012 was $20.08 per barrel compared to $23.32 per barrel for the same period in 2011. The average WTI to Buena Vista spread for the fourth quarter of 2012 was $(15.97) per barrel compared to $(19.80) per barrel for the same period in 2011.

Asphalt margins for the fourth quarter of 2012 were $26.84 per ton compared to $65.83 per ton for the fourth quarter of 2011. On a cash basis, asphalt margins in the fourth quarter of 2012 were $13.17 per ton compared to $22.41 per ton in the fourth quarter of 2011. This decrease was primarily due to higher raw materials costs for the fourth quarter of 2012. The average blended asphalt sales price increased 7.6% from $548.87 per ton in the fourth quarter of 2011 to $590.79 per ton in the fourth quarter of 2012 and the average non-blended asphalt sales price increased 15.6% from $300.50 per ton in the fourth quarter of 2011 to $347.25 per ton in the fourth quarter of 2012.

Retail fuel sales volume increased 8.1% from 40.7 million gallons in the fourth quarter of 2011 to 44.0 million gallons in the fourth quarter of 2012. Merchandise sales increased 6.4% from $72.4 million in the fourth quarter of 2011 to $77.0 million in the fourth quarter of 2012.

In the fourth quarter of 2012, based on a change in our internal reporting structure as a result of the Alon USA Partners, LP initial public offering, the branded marketing operations have been combined with the refining and marketing segment and are no longer included with the retail segment. Information for the branded marketing operations for the full fourth quarter and full year ended December 31, 2012 is included in the refining and marketing segment. Prior period segment results have been changed to conform with current period presentation.

YEAR-TO-DATE 2012

Special items reduced earnings by $48.3 million for 2012 which included after-tax losses of $17.4 million associated with the write-off of unamortized original issuance discounts associated with the prepayment of term loans, $5.4 million associated with the write-off of unamortized debt issuance costs, $19.6 million associated with unrealized losses on commodity swaps, $4.4 million associated with heating oil call option crack spread contracts and $1.4 million associated with losses on disposition of assets. Special items increased earnings by $11.7 million for 2011 which included after-tax gains of $21.6 million associated with unrealized gains on commodity swaps, $13.5 million associated with a reduction in system inventories and $0.5 million associated with gains on disposition of assets offset by after-tax losses of $23.9 million associated with heating oil call option crack spread contracts.

Also impacting earnings were pre-tax realized losses on commodity swaps of $98.2 million in 2012 and $1.9 million in 2011.

The combined refinery average throughput for 2012 averaged 154,700 bpd, consisting of 68,946 bpd at the Big Spring refinery, 17,877 bpd at the California refineries and 67,877 bpd at the Krotz Springs refinery, compared to a combined refinery average throughput 146,149 bpd in 2011, consisting of 63,614 bpd at the Big Spring refinery, 22,815 bpd at the California refineries, and 59,720 bpd at the Krotz Springs refinery, where throughput was reduced during the second quarter of 2011 due to flooding in Louisiana and the impact on crude oil supply to the refinery.

Refinery operating margin at the Big Spring refinery was $23.50 per barrel for 2012 compared to $20.89 per barrel for 2011. This increase is due to higher Gulf Coast 3/2/1 crack spreads and a widening of the WTI to WTS spread. Refinery operating margin at the California refineries was $2.36 per barrel for 2012 compared to $(1.31) per barrel for 2011. This increase reflects higher West Coast 3/1/1/1 crack spreads. Refinery operating margin at the Krotz Springs refinery was $8.30 per barrel for 2012 compared to $3.05 per barrel for 2011. This increase is mainly due to lower crude oil costs with the addition of WTI priced crude oils and higher Gulf Coast 2/1/1 high sulfur diesel crack spreads.

The average Gulf Coast 3/2/1 crack spread for 2012 was $27.43 per barrel compared to $23.37 per barrel for 2011. The average West Coast 3/1/1/1 crack spread for 2012 was $13.08 per barrel compared to $9.20 per barrel for 2011. The average Gulf Coast 2/1/1 high sulfur diesel crack spread for 2012 was $11.29 per barrel compared to $7.00 per barrel for 2011.

The average WTI to WTS spread for 2012 was $5.46 per barrel compared to $2.06 per barrel for 2011. The average LLS to WTI spread for 2012 was $16.46 per barrel compared to $16.76 per barrel for 2011. The average WTI to Buena Vista spread for 2012 was $(14.48) per barrel compared to $(13.36) per barrel for 2011.

Asphalt margins in 2012 increased to $42.64 per ton compared to $26.99 per ton in 2011. On a cash basis, asphalt margins in 2012 were $27.39 per ton compared to $14.97 per ton in 2011. This increase was primarily due to asphalt sales prices increasing more than crude oil costs. The average blended asphalt sales price increased 8.9% from $541.44 per ton in 2011 to $589.63 per ton in 2012 and the average non-blended asphalt sales price increased 14.0% from $326.69 per ton in 2011 to $372.36 per ton in 2012.

Retail fuel sales volume increased by 9.0% from 156.7 million gallons in 2011 to 170.8 million gallons in 2012. Merchandise sales increased 5.7% from $298.2 million in 2011 to $315.1 million in 2012.

CONFERENCE CALL

The Company has scheduled a conference call for Thursday, March 7, 2013, at 11:30 a.m. Eastern, to discuss the fourth quarter 2012 results. To access the call, please dial 877-941-9205, or 480-629-9771, 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 21, 2013, and may be accessed by calling 800-406-7325, or 303-590-3030, for international callers, and using the passcode 4593762#. 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 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. The Company directly owns crude oil refineries in California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 180,000 barrels per day. Alon also owns 100% of the general partner and approximately 82% of the limited partner interests in Alon USA Partners, LP (NYSE: ALDW), which owns a crude oil refinery in Texas with an aggregate crude oil throughput capacity of approximately 70,000 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 approximately 300 convenience stores in 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:

Amir Barash, Vice President-IR

Alon USA Energy, Inc.

972-367-3808




Investors: Jack Lascar/ Sheila Stuewe

Dennard-Lascar Associates / 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, 2011, AND INCOME STATEMENT
DATA FOR THE YEAR ENDED DECEMBER 31, 2011,
IS UNAUDITED)



For the Three Months Ended


For the Year Ended


December 31,


December 31,


2012


2011


2012


2011


(dollars in thousands, except per share data)

STATEMENT OF OPERATIONS DATA:








Net sales (1)

$

1,954,785


$

1,882,869


$

8,017,741


$

7,186,257

Operating costs and expenses:








Cost of sales

1,710,252


1,777,210


7,117,449


6,494,883

Unrealized (gains) losses on commodity swaps

(5,522)


(31,936)


31,936


(31,936)

Direct operating expenses

82,999


83,190


313,242


285,666

Selling, general and administrative expenses (2)

42,383


35,527


161,401


143,122

Depreciation and amortization (3)

28,929


33,684


121,929


113,730

Total operating costs and expenses

1,859,041


1,897,675


7,745,957


7,005,465

Gain (loss) on disposition of assets

529


568


(2,309)


729

Operating income (loss)

96,273


(14,238)


269,475


181,521

Interest expense (4)

(51,459)


(24,530)


(129,572)


(88,310)

Equity earnings of investees

1,050


1,353


7,162


5,128

Other income (loss), net (5)

207


15,392


(6,584)


(35,673)

Income (loss) before income tax expense (benefit)

46,071


(22,023)


140,481


62,666

Income tax expense (benefit)

15,179


(8,034)


49,884


18,918

Net income (loss)

30,892


(13,989)


90,597


43,748

Net income (loss) attributable to non-controlling interest

8,705


(1,076)


11,463


1,241

Net income (loss) available to stockholders

$

22,187


$

(12,913)


$

79,134


$

42,507

Earnings (loss) per share, basic

$

0.35


$

(0.23)


$

1.29


$

0.77

Weighted average shares outstanding, basic (in thousands)

61,041


55,853


57,501


55,431

Earnings (loss) per share, diluted

$

0.33


$

(0.23)


$

1.24


$

0.69

Weighted average shares outstanding, diluted (in thousands)

67,535


55,853


63,917


61,401

Cash dividends per share

$

0.04


$

0.04


$

0.16


$

0.16

CASH FLOW DATA:








Net cash provided by (used in):








Operating activities

$

172,312


$

11,198


$

387,810


$

69,560

Investing activities

(21,544)


(22,412)


(104,980)


(126,542)

Financing activities

(247,929)


(7,321)


(323,600)


142,361

OTHER DATA:








Adjusted net income (loss) available to stockholders (6)

$

36,137


$

(43,656)


$

127,392


$

30,850

Adjusted earnings (loss) per share (6)

0.58


(0.78)


2.13


0.56

Adjusted EBITDA (7)

120,408


(11,126)


433,524


268,321

Capital expenditures (8)

21,628


21,505


93,901


112,625

Capital expenditures for turnaround and chemical catalyst

23


2,739


11,460


9,734

 

 


December 31,

2012


December 31,

2011

BALANCE SHEET DATA (end of period):

(dollars in thousands)

Cash and cash equivalents

$

116,296


$

157,066

Working capital

87,242


99,452

Total assets

2,223,574


2,330,382

Total debt

587,017


1,050,196

Total equity

621,186


395,784

 

 

REFINING AND MARKETING SEGMENT (A)


For the Three Months Ended


For the Year Ended


December 31,


December 31,


2012


2011


2012


2011


(dollars in thousands, except per barrel data and pricing statistics)

STATEMENTS OF OPERATIONS DATA:








Net sales (9)

$

1,719,183


$

1,749,514


$

7,241,935


$

6,558,625

Operating costs and expenses:








Cost of sales

1,514,298


1,692,054


6,519,547


6,028,709

Unrealized (gains) losses on commodity swaps

(5,522)


(31,936)


31,936


(31,936)

Direct operating expenses

74,724


72,804


278,725


243,018

Selling, general and administrative expenses

14,204


8,758


51,215


39,190

Depreciation and amortization

24,754


24,620


103,638


90,701

Total operating costs and expenses

1,622,458


1,766,300


6,985,061


6,369,682

Gain (loss) on disposition of assets

26



(2,502)


12

Operating income (loss)

$

96,751


$

(16,786)


$

254,372


$

188,955

KEY OPERATING STATISTICS:








Per barrel of throughput:








Refinery operating margin – Big Spring (10)

$

25.26


$

14.14


$

23.50


$

20.89

Refinery operating margin – CA Refineries (10)

6.50


(3.98)


2.36


(1.31)

Refinery operating margin – Krotz Springs (10)

10.36


(6.03)


8.30


3.05

Refinery direct operating expense – Big Spring (11)

4.17


3.80


4.00


4.23

Refinery direct operating expense – CA Refineries (11)

23.23


10.15


12.59


7.32

Refinery direct operating expense – Krotz Springs (11)

3.84


4.56


3.85


3.67

Capital expenditures

$

13,551


$

15,231


$

68,112


$

92,022

Capital expenditures for turnaround and chemical catalyst

23


2,739


11,460


9,734

PRICING STATISTICS:








WTI crude oil (per barrel)

$

88.10


$

94.03


$

94.14


$

95.07

WTS crude oil (per barrel)

78.55


93.19


88.68


93.01

Buena Vista crude oil (per barrel)

104.07


113.83


108.62


108.43

LLS crude oil (per barrel)

110.69


112.41


111.53


110.98

Crack spreads (3/2/1) (per barrel):








Gulf Coast (12)

$

27.10


$

19.95


$

27.43


$

23.37

Crack spreads (3/1/1/1) (per barrel):








West Coast (12)

$

13.80


$

3.58


$

13.08


$

9.20

Crack spreads (2/1/1) (per barrel):








Gulf Coast high sulfur diesel (12)

$

9.03


$

(1.50)


$

11.29


$

7.00

Crude oil differentials (per barrel):








WTI less WTS (13)

$

9.55


$

0.84


$

5.46


$

2.06

WTI less Buena Vista (13)

(15.97)


(19.80)


(14.48)


(13.36)

LLS less WTI (13)

20.08


23.32


16.46


16.76

Product prices (dollars per gallon):








Gulf Coast unleaded gasoline

$

2.60


$

2.59


$

2.82


$

2.75

Gulf Coast ultra-low sulfur diesel

3.04


2.96


3.05


2.97

Gulf Coast high sulfur diesel

2.99


2.93


2.99


2.91

West Coast LA CARBOB (unleaded gasoline)

2.86


2.80


3.03


2.89

West Coast LA ultra-low sulfur diesel

3.09


3.06


3.11


3.05

Natural gas (per MMBTU)

3.54


3.48


2.83


4.03



(A)

In the fourth quarter of 2012, based on a change in our internal reporting structure as a result of the Alon USA Partners, LP initial public offering, the branded marketing operations have been combined with the refining and marketing segment and are no longer included with the retail segment. Information for the branded marketing operations for the full fourth quarter and full year ended December 31, 2012 is included in the refining and marketing segment. Prior period segment results have been changed to conform with current period presentation.