ALON USA PARTNERS LP DALLAS, July 28, 2016 /PRNewswire/ -- Alon USA Partners, LP (NYSE: ALDW) ("Alon Partners") today announced results for the second quarter of 2016. Net income for the second quarter of 2016 was $1.2 million, or $0.02 per unit, compared to $59.4 million, or $0.95 per unit, for the same period last year. Net loss for the first half of 2016 was $(7.4) million, or $(0.12) per unit, compared to net income of $95.9 million, or $1.53 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 second quarter of 2016 of $0.14 per unit payable on August 25, 2016 to common unitholders of record at the close of business on August 18, 2016, based on cash available for distribution of $8.8 million.
Paul Eisman, President and CEO, commented, "The refining environment in the second quarter of 2016 remained challenging as crack spreads were pressured by high product inventories. While crack spreads improved seasonally from the first quarter of 2016, the average benchmark crack spread in the second quarter was down approximately $6.50 per barrel relative to the same quarter last year. As previously discussed, our second quarter results were also negatively impacted by unplanned downtime related to a power outage in late May. We estimate the lost opportunity cost and maintenance cost associated with the power outage negatively impacted Alon Partners' adjusted EBITDA by approximately $10 million or the distribution by $0.16 per unit.
"Big Spring's refinery operating margin of $8.53 per barrel was negatively impacted by approximately $1.30 per barrel due to the unplanned downtime during the quarter. Despite the interruption to normal operations, the refinery achieved low operating costs of $3.59 per barrel. We currently expect to perform maintenance on the Big Spring refinery's reformer in August. As a result, we expect total throughput at the Big Spring refinery to average approximately 69,000 barrels per day for the third quarter and 70,000 barrels per day for the full year of 2016. 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 third quarter of 2016."
SECOND QUARTER 2016
Refinery operating margin was $8.53 per barrel for the second quarter of 2016 compared to $17.22 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, a narrowing of the WTI Cushing to WTI Midland spread and a reduced cost of crude benefit from the contango market in 2016, partially offset by a widening of the WTI Cushing to WTS spread. The Big Spring refinery average throughput for the second quarter of 2016 was 71,153 barrels per day ("bpd") compared to 75,491 bpd for the same period in 2015. The Big Spring refinery's throughput and operating margin were negatively affected by the unplanned downtime during the second quarter of 2016 due to a power outage caused by inclement weather, which affected multiple units.
The average Gulf Coast 3/2/1 crack spread was $13.16 per barrel for the second quarter of 2016 compared to $19.71 per barrel for the second quarter of 2015. The average WTI Cushing to WTI Midland spread for the second quarter of 2016 was $0.17 per barrel compared to $0.60 per barrel for the second quarter of 2015. The average WTI Cushing to WTS spread for the second quarter of 2016 was $0.75 per barrel compared to $(0.21) per barrel for the second quarter of 2015. The average Brent to WTI Cushing spread for the second quarter of 2016 was $(0.18) per barrel compared to $3.66 per barrel for the same period in 2015. The contango environment in the second quarter of 2016 created an average cost of crude benefit of $1.49 per barrel compared to an average cost of crude benefit of $1.90 per barrel for the same period in 2015.
YEAR-TO-DATE 2016
Refinery operating margin was $8.16 per barrel for the first half of 2016 compared to $15.56 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 half of 2016 was 69,345 bpd compared to 73,934 bpd for the same period in 2015. The Big Spring refinery's throughput and operating margin were negatively affected by the planned downtime to complete a reformer regeneration and catalyst replacement for our diesel hydrotreater unit in the beginning of the first quarter of 2016, as well as unplanned downtime during the second quarter of 2016 due to a power outage caused by inclement weather, which affected multiple units.
The average Gulf Coast 3/2/1 crack spread was $12.20 per barrel for the first half of 2016 compared to $18.73 per barrel for the same period in 2015. The average WTI Cushing to WTI Midland spread for the first half of 2016 was $0.02 per barrel compared to $1.27 per barrel for the same period in 2015. The average WTI Cushing to WTS spread for the first half of 2016 was $0.32 per barrel compared to $0.76 per barrel for the same period in 2015. The average Brent to WTI Cushing spread for the first half of 2016 was $0.15 per barrel compared to $4.54 per barrel for the same period in 2015. The contango environment for the first half of 2016 created an average cost of crude benefit of $1.66 per barrel compared to an average cost of crude benefit of $1.28 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 Friday, July 29, 2016 at 9:30 a.m. Eastern Time (8:30 a.m. Central Time), to discuss the second 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 August 12, 2016 and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13640014#. 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 For the Six Months Ended
(ALL INFORMATION IN THIS
PRESS RELEASE EXCEPT
FOR BALANCE SHEET DATA
AS OF DECEMBER 31,
2015, IS UNAUDITED)
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands, except per unit data, per barrel data and pricing
statistics)
STATEMENTS OF OPERATIONS
DATA:
Net sales (1) $468,457 $625,064 $836,466 $1,167,506
Operating costs and
expenses:
Cost of sales 410,735 507,122 730,068 957,717
Direct operating
expenses 23,255 24,285 48,299 47,701
Selling, general and
administrative expenses 8,802 10,215 16,111 16,118
Depreciation and
amortization 14,667 13,591 28,873 27,584
------ ------ ------ ------
Total operating costs
and expenses 457,459 555,213 823,351 1,049,120
------- ------- ------- ---------
Operating income 10,998 69,851 13,115 118,386
Interest expense (9,920) (10,847) (20,507) (22,540)
Other income (loss), net 113 27 197 (14)
--- --- --- ---
Income (loss) before
state income tax
expense (benefit) 1,191 59,031 (7,195) 95,832
State income tax expense
(benefit) - (395) 176 (45)
--- ---- --- ---
Net income (loss) $1,191 $59,426 $(7,371) $95,877
=======
Earnings (loss) per unit $0.02 $0.95 $(0.12) $1.53
===== ===== ====== =====
Weighted average common
units outstanding (in
thousands) 62,515 62,509 62,512 62,508
====== ====== ====== ======
Cash distribution per
unit $ - $0.71 $0.08 $1.41
=== === ===== ===== =====
CASH FLOW DATA:
Net cash provided by
(used in):
Operating activities $34,862 $107,311 $46,587 $134,398
Investing activities (5,068) (5,985) (20,924) (9,790)
Financing activities 8,830 (61,829) 3,204 (81,049)
OTHER DATA:
Adjusted EBITDA (2) $25,778 $83,469 $42,185 $145,956
Capital expenditures 4,588 5,465 12,700 7,786
Capital expenditures for
turnarounds and
catalysts 480 520 8,224 2,004
KEY OPERATING
STATISTICS:
Per barrel of
throughput:
Refinery operating
margin (3) $8.53 $17.22 $8.16 $15.56
Refinery direct
operating expense (4) 3.59 3.54 3.83 3.56
PRICING STATISTICS:
Crack spreads (per
barrel):
Gulf Coast 3/2/1 (5) $13.16 $19.71 $12.20 $18.73
WTI Cushing crude oil
(per barrel) $45.48 $57.86 $39.39 $53.20
Crude oil differentials
(per barrel):
WTI Cushing less WTI
Midland (6) $0.17 $0.60 $0.02 $1.27
WTI Cushing less WTS (6) 0.75 (0.21) 0.32 0.76
Brent less WTI Cushing
(6) (0.18) 3.66 0.15 4.54
Product price (dollars
per gallon):
Gulf Coast unleaded
gasoline $1.42 $1.86 $1.25 $1.69
Gulf Coast ultra-low
sulfur diesel 1.34 1.83 1.19 1.76
Natural gas (per MMBtu) 2.25 2.74 2.12 2.77
June 30, December 31,
2016 2015
---- ----
BALANCE SHEET DATA (end of period): (dollars in thousands)
Cash and cash equivalents $161,820 $132,953
Working capital (40,661) (53,804)
Total assets 792,661 748,584
Total debt 291,681 292,082
Total debt less cash and cash equivalents 129,861 159,129
Total partners' equity 118,613 130,957
THROUGHPUT AND PRODUCTION
DATA: For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
bpd % bpd % bpd % bpd %
Refinery throughput:
WTS crude 25,698 36.1 29,605 39.2 31,126 44.9 37,193 50.3
WTI crude 43,040 60.5 43,659 57.8 35,400 51.0 33,952 45.9
Blendstocks 2,415 3.4 2,227 3.0 2,819 4.1 2,789 3.8
----- --- ----- --- ----- --- ----- ---
Total refinery throughput
(7) 71,153 100.0 75,491 100.0 69,345 100.0 73,934 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery production:
Gasoline 33,744 47.6 37,755 49.8 33,922 49.0 36,978 49.8
Diesel/jet 26,627 37.6 28,052 37.0 24,655 35.6 27,074 36.5
Asphalt 2,572 3.6 2,479 3.3 2,860 4.2 2,876 3.9
Petrochemicals 3,354 4.7 4,915 6.5 3,485 5.0 4,863 6.5
Other 4,569 6.5 2,537 3.4 4,298 6.2 2,466 3.3
----- --- ----- --- ----- --- ----- ---
Total refinery production
(8) 70,866 100.0 75,738 100.0 69,220 100.0 74,257 100.0
====== ===== ====== ===== ====== ===== ====== =====
Refinery utilization (9) 94.2% 100.4% 93.7% 97.5%
CASH AVAILABLE FOR DISTRIBUTION DATA: For the Three
Months Ended
June 30, 2016
-------------
(dollars in
thousands,
except per unit
data)
Net sales (1) $468,457
Operating costs and expenses:
Cost of sales 410,735
Direct operating expenses 23,255
Selling, general and administrative expenses 8,802
Depreciation and amortization 14,667
------
Total operating costs and expenses 457,459
Operating income 10,998
Interest expense (9,920)
Other income, net 113
---
Income before state income tax expense 1,191
State income tax expense -
Net income 1,191
Adjustments to reconcile net loss to Adjusted
EBITDA:
Interest expense 9,920
State income tax expense -
Depreciation and amortization 14,667
Adjusted EBITDA (2) 25,778
Adjustments to reconcile Adjusted EBITDA to cash
available for distribution:
less: Maintenance/growth capital expenditures 4,588
less: Turnaround and catalyst replacement capital
expenditures 480
less: Major turnaround reserve for future years 1,500
less: Principal payments 625
less: State income tax payments -
less: Interest paid in cash 9,738
Calculated cash available for distribution $8,847
======
Common units outstanding (in 000's) 62,520
Cash available for distribution per unit $0.14
=====
________________
(1) Includes sales to
related parties
of $76,884 and
$101,233 for the
three months
ended June 30,
2016 and 2015,
respectively, and
$139,994 and
$184,122 for the
six months ended
June 30, 2016 and
2015,
respectively.
(2) Adjusted EBITDA
represents
earnings before
state income tax
expense
(benefit),
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
(benefit),
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 and six
months ended June
30, 2016 and
2015:
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
(dollars in thousands)
Net income (loss) $1,191 $59,426 $(7,371) $95,877
State income tax expense
(benefit) - (395) 176 (45)
Interest expense 9,920 10,847 20,507 22,540
Depreciation and amortization 14,667 13,591 28,873 27,584
Adjusted EBITDA $25,778 $83,469 $42,185 $145,956
======= ======= ======= ========
(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
and six
months ended
June 30,
2016
excludes
gains
related to
inventory
adjustments
of $2,519
and $3,465,
respectively.
Refinery
operating
margin for
the three
and six
months ended
June 30,
2015
excludes
gains
(losses)
related to
inventory
adjustments
of $(368)
and $1,622,
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.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/alon-usa-partners-lp-reports-second-quarter-2016-results-and-declares-quarterly-cash-distribution-300306050.html
SOURCE Alon USA Partners, LP
