ALON USA ENERGY, INC. DALLAS, May 4, 2016 /PRNewswire/ -- Alon USA Partners, LP (NYSE: ALDW) ("Alon Partners") today announced results for the first quarter of 2016. Net loss for the first quarter of 2016 was $(8.6) million, or $(0.14) per unit, compared to net income of $36.5 million, or $0.58 per unit, for the same period last year.
Paul Eisman, President and CEO, commented, "Our first quarter results were negatively impacted by depressed crack spreads, narrow crude differentials and by planned downtime at our Big Spring refinery which included completing a reformer regeneration and a catalyst replacement for our diesel hydrotreater unit. The average benchmark crack spread was approximately $6.50 per barrel lower than the average in the first quarter 2015. It is not unusual for us to experience margin weakness in the first quarter, and we are encouraged by improvements in the benchmark crack spreads going into the second quarter. Demand for gasoline is strong and distillate demand is improving. We've also seen some improvement in the Midland differentials which should support improved refinery profitability.
"The Big Spring refinery achieved a refinery operating margin of $7.77 per barrel and direct operating expense of $4.07 per barrel in the first quarter. We expect total throughput at the Big Spring refinery to average approximately 74,000 barrels per day for the second quarter and 73,000 barrels per day for the full year of 2016.
"Market conditions and the planned downtime to complete a reformer regeneration and a catalyst replacement for our diesel hydrotreater unit during the first quarter did not allow us to generate sufficient cash to support a distribution. However, based on current forward curve crack spreads, it is our expectation that with operations consistent with our plan we should generate sufficient cash available for distribution during the second quarter."
FIRST QUARTER 2016
Refinery operating margin was $7.77 per barrel for the first quarter of 2016 compared to $13.80 per barrel for the same period in 2015. This decrease in operating margin was primarily due to a lower Gulf Coast 3/2/1 crack spread and a narrowing of both the WTI Cushing to WTI Midland and the WTI Cushing to WTS spreads, partially offset by the cost of crude benefit from the market moving further into contango in 2016. The Big Spring refinery average throughput for the first quarter of 2016 was 67,536 barrels per day ("bpd") compared to 72,360 bpd for the same period in 2015. The reduced throughput at our refinery was the result of planned downtime to complete a reformer regeneration and catalyst replacement for our diesel hydrotreater unit in the beginning of the first quarter of 2016.
The average Gulf Coast 3/2/1 crack spread was $11.24 per barrel for the first quarter of 2016 compared to $17.74 per barrel for the first quarter of 2015. The average WTI Cushing to WTI Midland spread for the first quarter of 2016 was $(0.13) per barrel compared to $1.95 per barrel for the first quarter of 2015. The average WTI Cushing to WTS spread for the first quarter of 2016 was $(0.10) per barrel compared to $1.76 per barrel for the first quarter of 2015. The average Brent to WTI Cushing spread for the first quarter of 2016 was $0.49 per barrel compared to $5.44 per barrel for the same period in 2015. The contango environment in the first quarter of 2016 created an average cost of crude benefit of $1.83 per barrel compared to an average cost of crude benefit of $0.65 per barrel for the same period in 2015.
CONFERENCE CALL
Alon Partners has scheduled a conference call, which will be broadcast live over the Internet on Thursday, May 5, 2016 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time), to discuss the first quarter 2016 financial results. To access the call, please dial 877-404-9648, or 412-902-0030 for international callers, and ask for the Alon Partners call at least 10 minutes prior to the start time. Investors may also listen to the conference live by logging on to the Alon Partners website at www.alonpartners.com. A telephonic replay of the conference call will be available through May 19, 2016, and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13634013#. A webcast archive will also be available at www.alonpartners.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.
This release serves as qualified notice to nominees under Treasury Regulation Section 1.1446-4(b). Please note that 100% of Alon Partners' distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of Alon Partners' distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not Alon Partners, are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
Any statements in this 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.
Alon USA Partners, LP is a Delaware limited partnership formed in August 2012 by Alon USA Energy, Inc. ("Alon Energy") (NYSE: ALJ). Alon Partners owns and operates a crude oil refinery in Big Spring, Texas, with a crude oil throughput capacity of 73,000 barrels per day. Alon Partners refines crude oil into finished products, which are marketed primarily in Central and West Texas, Oklahoma, New Mexico and Arizona through its integrated wholesale distribution network to both Alon Energy's retail convenience stores and other third-party distributors.
Contacts: Stacey Morris, Investor
Relations Manager
Alon USA Partners GP, LLC
972-367-3808
Investors: Jack Lascar
Dennard § Lascar Associates,
LLC
713-529-6600
Media: Blake Lewis
Lewis Public Relations
214-635-3020
- Tables to follow -
ALON USA PARTNERS, LP AND SUBSIDIARIES CONSOLIDATED
EARNINGS RELEASE
RESULTS OF OPERATIONS
-FINANCIAL DATA For the Three Months Ended
(ALL INFORMATION IN
THIS PRESS RELEASE
EXCEPT FOR BALANCE
SHEET DATA AS OF
DECEMBER 31, 2015, IS
UNAUDITED)
March 31,
---------
2016 2015
---- ----
(dollars in thousands, except per unit
data, per barrel data and pricing
statistics)
STATEMENTS OF
OPERATIONS DATA:
Net sales (1) $368,009 $542,442
Operating costs and
expenses:
Cost of sales 319,333 450,595
Direct operating
expenses 25,044 23,416
Selling, general and
administrative
expenses 7,309 5,903
Depreciation and
amortization 14,206 13,993
------ ------
Total operating costs
and expenses 365,892 493,907
------- -------
Operating income 2,117 48,535
Interest expense (10,587) (11,693)
Other income (loss),
net 84 (41)
--- ---
Income (loss) before
state income tax
expense (8,386) 36,801
State income tax
expense 176 350
--- ---
Net income (loss) $(8,562) $36,451
=======
Earnings (loss) per
unit $(0.14) $0.58
====== =====
Weighted average
common units
outstanding (in
thousands) 62,510 62,507
====== ======
Cash distribution per
unit $0.08 $0.70
===== =====
CASH FLOW DATA:
Net cash provided by
(used in):
Operating activities $6,662 $27,087
Investing activities (10,793) (3,805)
Financing activities (5,626) (19,220)
OTHER DATA:
Adjusted EBITDA (2) $16,407 $62,487
Capital expenditures 8,112 2,321
Capital expenditures
for turnarounds and
catalysts 2,681 1,484
KEY OPERATING
STATISTICS:
Per barrel of
throughput:
Refinery operating
margin (3) $7.77 $13.80
Refinery direct
operating expense (4) 4.07 3.60
PRICING STATISTICS:
Crack spreads (per
barrel):
Gulf Coast 3/2/1 (5) $11.24 $17.74
WTI Cushing crude oil
(per barrel) $33.30 $48.48
Crude oil
differentials (per
barrel):
WTI Cushing less WTI
Midland (6) $(0.13) $1.95
WTI Cushing less WTS
(6) (0.10) 1.76
Brent less WTI Cushing
(6) 0.49 5.44
Product price (dollars
per gallon):
Gulf Coast unleaded
gasoline $1.07 $1.52
Gulf Coast ultra-low
sulfur diesel 1.03 1.69
Natural gas (per
MMBtu) 1.98 2.81
March 31, December 31,
2016 2015
---- ----
BALANCE SHEET DATA (end of period): (dollars in thousands)
Cash and cash equivalents $123,196 $132,953
Working capital (66,936) (53,804)
Total assets 745,428 748,584
Total debt 291,868 292,082
Total debt less cash and cash equivalents 168,672 159,129
Total partners' equity 117,404 130,957
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended
March 31,
---------
2016 2015
---- ----
bpd % bpd %
Refinery throughput:
WTS crude 36,554 54.1 44,865 62.0
WTI crude 27,760 41.1 24,137 33.4
Blendstocks 3,222 4.8 3,358 4.6
----- --- ----- ---
Total refinery throughput
(7) 67,536 100.0 72,360 100.0
====== ===== ====== =====
Refinery production:
Gasoline 34,100 50.5 36,192 49.7
Diesel/jet 22,682 33.6 26,086 35.9
Asphalt 3,148 4.6 3,278 4.5
Petrochemicals 3,617 5.3 4,810 6.6
Other 4,027 6.0 2,394 3.3
----- --- ----- ---
Total refinery production
(8) 67,574 100.0 72,760 100.0
====== ===== ====== =====
Refinery utilization (9) 93.2% 94.5%
CASH AVAILABLE FOR DISTRIBUTION DATA: For the Three
Months Ended
March 31, 2016
--------------
(dollars in
thousands, except
per unit data)
Net sales (1) $368,009
Operating costs and expenses:
Cost of sales 319,333
Direct operating expenses 25,044
Selling, general and administrative expenses 7,309
Depreciation and amortization 14,206
------
Total operating costs and expenses 365,892
Operating income 2,117
Interest expense (10,587)
Other income, net 84
---
Loss before state income tax expense (8,386)
State income tax expense 176
Net loss (8,562)
Adjustments to reconcile net loss to Adjusted
EBITDA:
Interest expense 10,587
State income tax expense 176
Depreciation and amortization 14,206
Adjusted EBITDA (2) 16,407
Adjustments to reconcile Adjusted EBITDA to
cash available for distribution:
less: Maintenance/growth capital expenditures 8,112
less: Turnaround and catalyst replacement
capital expenditures 2,681
less: Major turnaround reserve for future years 1,500
less: Principal payments 625
less: State income tax payments 176
less: Interest paid in cash 10,144
Calculated cash available for distribution $(6,831)
=======
Cash available for distribution $ -
=== ===
Common units outstanding (in 000's) 62,510
Cash available for distribution per unit $ -
=== ===
________________
(1) Includes sales
to related
parties of
$63,110 and
$82,889 for the
three months
ended March 31,
2016 and 2015,
respectively.
(2) Adjusted EBITDA
represents
earnings before
state income
tax expense,
interest
expense and
depreciation
and
amortization.
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
state income
tax expense,
interest
expense 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
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
ended March 31,
2016 and 2015:
For the Three Months Ended
March 31,
---------
2016 2015
---- ----
(dollars in thousands)
Net income (loss) $(8,562) $36,451
State income tax expense 176 350
Interest expense 10,587 11,693
Depreciation and amortization 14,206 13,993
Adjusted EBITDA $16,407 $62,487
======= =======
(3) Refinery
operating
margin is a
per barrel
measurement
calculated
by dividing
the margin
between net
sales and
cost of
sales
(exclusive
of certain
inventory
adjustments)
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
margin to
these crack
spreads to
assess our
operating
performance
relative to
other
participants
in our
industry.
Refinery operating margin for
the three months ended March
31, 2016 and 2015 excludes
gains related to inventory
adjustments of $946 and $1,990,
respectively.
(4) Refinery direct operating
expense is a per barrel
measurement calculated by
dividing direct operating
expenses by total throughput
volumes.
(5) We compare our refinery
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.
(6) 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 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.
(7) Total refinery throughput
represents the total barrels
per day of crude oil and
blendstock inputs in the
refinery production process.
(8) Total refinery production
represents the barrels per day
of various refined products
produced from processing crude
and other refinery feedstocks
through the crude units and
other conversion units.
(9) Refinery utilization represents
average daily crude oil
throughput divided by crude oil
capacity, excluding planned
periods of downtime for
maintenance and turnarounds.
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SOURCE Alon USA Partners, LP
