ALON USA ENERGY, INC. DALLAS, May 8, 2017 /PRNewswire/ -- Alon USA Partners, LP (NYSE: ALDW) ("Alon Partners") today announced results for the first quarter of 2017. Net income for the first quarter of 2017 was $20.1 million, or $0.32 per unit, compared to net loss of $(8.6) million, or $(0.14) per unit, for the same period last year.
The Board of Directors of Alon USA Partners GP, LLC, the general partner of Alon Partners, declared a cash distribution for the first quarter of 2017 of $0.38 per unit payable on May 30, 2017 to common unitholders of record at the close of business on May 22, 2017, based on cash available for distribution of $23.7 million.
Alan Moret, CEO, commented, "We are pleased with our performance in the first quarter of 2017, which resulted in cash available for distribution of $0.38 per unit. Our first quarter results benefited from an improvement in our benchmark Gulf Coast crack spread relative to the fourth quarter of 2016 and the same quarter last year. The improvement in the crack spread was complemented by strong operations, with the Big Spring refinery setting a new record for quarterly total throughput. We have been encouraged by the positive trends we have seen in refining into the second quarter of 2017, including attractive discounts for Midland-priced crudes and improved crack spreads."
Shai Even, President and CFO, commented, "The Big Spring refinery achieved record quarterly total throughput of almost 78,000 barrels per day in the first quarter of 2017. The refinery operating margin of $10.32 per barrel benefited from a strong wholesale marketing environment. Direct operating expense was only $3.54 per barrel as a result of efficient operations in the first quarter.
"We expect total throughput at the Big Spring refinery to average 73,000 barrels per day for the second quarter of 2017 and 75,000 barrels per day for the full year of 2017. 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 of 2017."
FIRST QUARTER 2017
Refinery operating margin was $10.32 per barrel for the first quarter of 2017 compared to $7.77 per barrel for the same period in 2016. This increase in operating margin was primarily due to a higher Gulf Coast 3/2/1 crack spread and a widening of the WTI Cushing to WTS spread, partially offset by the increased premium in WTI Midland compared to WTI Cushing, increased RINs costs and a reduced benefit from the contango market environment which increased the cost of crude. Refinery average throughput for the first quarter of 2017 was 77,754 barrels per day ("bpd") compared to 67,536 bpd for the same period in 2016. The reduced throughput during the first quarter of 2016 was the result of planned downtime to complete a reformer regeneration and catalyst replacement for our diesel hydrotreater unit.
The average Gulf Coast 3/2/1 crack spread was $13.75 per barrel for the first quarter of 2017 compared to $11.24 per barrel for the first quarter of 2016. The average WTI Cushing to WTI Midland spread for the first quarter of 2017 was $(0.64) per barrel compared to $(0.13) per barrel for the first quarter of 2016. The average WTI Cushing to WTS spread for the first quarter of 2017 was $1.27 per barrel compared to $(0.10) per barrel for the first quarter of 2016. The average Brent to WTI Cushing spread for the first quarter of 2017 was $1.66 per barrel compared to $0.49 per barrel for the same period in 2016. The contango environment in the first quarter of 2017 created an average cost of crude benefit of $1.00 per barrel compared to an average cost of crude benefit of $1.83 per barrel for the same period in 2016. The average RINs cost effect on refinery operating margin was $0.59 per barrel in the first quarter of 2017, compared to $0.13 per barrel for the same period in 2016.
CONFERENCE CALL
Alon Partners has scheduled a conference call, which will be broadcast live over the Internet on Tuesday, May 9, 2017 at 11:30 a.m. Eastern Time (10:30 a.m. Central Time), to discuss the first quarter 2017 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 16, 2017 and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13660047#. 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. (NYSE: ALJ) ("Alon Energy"). 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,
2016, IS UNAUDITED)
March 31,
---------
2017 2016
---- ----
(dollars in thousands, except per unit
data, per barrel data and pricing
statistics)
STATEMENTS OF
OPERATIONS DATA:
Net
sales
(1) $544,532 $368,009
Operating costs and
expenses:
Cost
of
sales 470,471 319,333
Direct
operating
expenses 24,760 25,044
Selling,
general
and
administrative
expenses 6,764 7,309
Depreciation
and
amortization 14,229 14,206
------ ------
Total
operating
costs
and
expenses 516,224 365,892
------- -------
Operating
income 28,308 2,117
Interest
expense (7,845) (10,587)
Other
income
(loss),
net (95) 84
--- ---
Income
(loss)
before
state
income
tax
expense 20,368 (8,386)
State
income
tax
expense 256 176
--- ---
Net
income
(loss) $20,112 $(8,562)
Earnings
(loss)
per
unit $0.32 $(0.14)
===== ======
Weighted
average
common
units
outstanding
(in
thousands) 62,520 62,510
====== ======
Cash
distribution
per
unit $0.11 $0.08
===== =====
CASH FLOW DATA:
Net cash provided by
(used in):
Operating
activities $41,772 $6,662
Investing
activities (5,875) (10,793)
Financing
activities (387) (5,626)
OTHER DATA:
Adjusted
EBITDA
(2) $42,442 $16,407
Capital
expenditures 5,026 8,112
Capital
expenditures
for
turnarounds
and
catalysts 849 2,681
KEY OPERATING
STATISTICS:
Per barrel of
throughput:
Refinery
operating
margin
(3) $10.32 $7.77
Refinery
direct
operating
expense
(4) 3.54 4.07
PRICING STATISTICS:
Crack spreads (per
barrel):
Gulf
Coast
3/2/1
(5) $13.75 $11.24
WTI
Cushing
crude
oil
(per
barrel) $51.78 $33.30
Crude oil differentials
(per barrel):
WTI
Cushing
less
WTI
Midland
(6) $(0.64) $(0.13)
WTI
Cushing
less
WTS
(6) 1.27 (0.10)
Brent
less
WTI
Cushing
(6) 1.66 0.49
Product price (dollars
per gallon):
Gulf
Coast
unleaded
gasoline $1.56 $1.07
Gulf
Coast
ultra-
low
sulfur
diesel 1.57 1.03
Natural
gas
(per
MMBtu) 3.07 1.98
March 31, December 31,
2017 2016
---- ----
(dollars in thousands)
BALANCE SHEET DATA (end of period):
Cash
and
cash
equivalents $109,034 $73,524
Working
capital (92,271) (73,563)
Total
assets 719,487 695,637
Total
debt 236,152 236,319
Total
debt
less
cash
and
cash
equivalents 127,118 162,795
Total
partners'
equity 116,761 103,503
THROUGHPUT AND
PRODUCTION DATA: For the Three Months Ended
March 31,
---------
2017 2016
---- ----
bpd % bpd %
Refinery throughput:
WTS crude 30,301 39.0 36,554 54.1
WTI crude 42,877 55.1 27,760 41.1
Blendstocks 4,576 5.9 3,222 4.8
----- --- ----- ---
Total refinery
throughput (7) 77,754 100.0 67,536 100.0
====== ===== ====== =====
Refinery production:
Gasoline 38,690 49.9 34,100 50.5
Diesel/jet 28,871 37.2 22,682 33.6
Asphalt 2,893 3.7 3,148 4.6
Petrochemicals 4,530 5.8 3,617 5.3
Other 2,633 3.4 4,027 6.0
----- --- ----- ---
Total refinery
production (8) 77,617 100.0 67,574 100.0
====== ===== ====== =====
Refinery utilization (9) 100.2% 93.2%
CASH AVAILABLE FOR DISTRIBUTION DATA: For the Three
Months Ended
March 31, 2017
--------------
(dollars in
thousands, except
per unit data)
Net sales (1) $544,532
Operating costs and expenses:
Cost of sales 470,471
Direct operating expenses 24,760
Selling, general and administrative
expenses 6,764
Depreciation and amortization 14,229
------
Total operating costs and expenses 516,224
Operating income 28,308
Interest expense (7,845)
Other loss, net (95)
---
Income before state income tax expense 20,368
State income tax expense 256
Net income 20,112
Adjustments to reconcile net income to
Adjusted EBITDA:
Interest expense 7,845
State income tax expense 256
Depreciation and amortization 14,229
Adjusted EBITDA (2) 42,442
Adjustments to reconcile Adjusted EBITDA to
cash available for distribution:
less: Maintenance/growth capital
expenditures 5,026
less: Turnaround and catalyst replacement
capital expenditures 849
less: Major turnaround reserve for future
years (a) 3,500
less: Principal payments 625
less: State income tax payments 256
less: Interest paid in cash 8,465
-----
Cash available for distribution $23,721
=======
Common units outstanding (in 000's) 62,520
Cash available for distribution per unit $0.38
=====
a. Major
turnaround
reserve
for future
years was
increased
from
$1,500 in
prior
quarters
to $3,500
in the
first
quarter of
2017 to
reflect an
increase
in the
estimated
cost of
the next
major
five-year
turnaround
from
$30,000 to
$50,000.
________________
(1) Includes sales to
related parties
of $91,000 and
$63,110 for the
three months
ended March 31,
2017 and 2016,
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, 2017
and 2016:
For the Three Months Ended
March 31,
---------
2017 2016
---- ----
(dollars in thousands)
Net income (loss) $20,112 $(8,562)
State income tax expense 256 176
Interest expense 7,845 10,587
Depreciation and amortization 14,229 14,206
Adjusted EBITDA $42,442 $16,407
======= =======
(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,
2017 and 2016 excludes gains
related to inventory adjustments
of $1,842 and $946,
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
