Alon USA Partners, LP Reports First Quarter 2015 Results and Declares Quarterly Cash Distribution

Schedules conference call for May 8, 2015 at 10:00 a.m. Eastern

News provided by

Alon USA Partners, LP

May 06, 2015, 04:15 ET

DALLAS, May 6, 2015 /PRNewswire/ -- Alon USA Partners, LP (NYSE: ALDW) ("Alon Partners") today announced results for the first quarter of 2015. Net income for the first quarter of 2015 was $36.5 million, or $0.58 per unit, compared to $42.2 million, or $0.68 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 2015 of $0.71 per unit payable on May 26, 2015 to common unitholders of record at the close of business on May 18, 2015, based on cash available for distribution of $44.7 million.

Paul Eisman, President and CEO, commented, "We are pleased with our first quarter 2015 operations and financial performance. For the first quarter of 2015, we generated cash available for distribution of $44.7 million. In the last three quarters following the completion of the major five-year turnaround, we have generated total cash available for distribution of $2.43 per unit. The Big Spring refinery operated very well during the quarter, achieving liquid recovery of approximately 101% and low direct operating expense of only $3.60 per barrel. Big Spring generated refinery operating margin of $13.80 per barrel. Our results for the first quarter were negatively impacted by a challenging wholesale marketing environment resulting from seasonal gasoline weakness in addition to an increase in fuel and RINs prices during the quarter.

"We expect total throughput at the Big Spring refinery to average approximately 73,000 barrels per day for the second quarter of 2015 and 72,000 barrels per day for the full year of 2015."

FIRST QUARTER 2015

Refinery operating margin was $13.80 per barrel for the first quarter of 2015 compared to $14.77 per barrel for the same period in 2014. This decrease in operating margin was primarily due to a narrowing of both the WTI Cushing to WTS spread and the WTI Cushing to WTI Midland spread, partially offset by a higher Gulf Coast 3/2/1 crack spread. The total refinery throughput for the first quarter of 2015 averaged 72,360 barrels per day ("bpd") compared to 73,296 bpd for the same period in 2014.

The average WTI Cushing to WTS spread for the first quarter of 2015 was $1.76 per barrel compared to $3.67 per barrel for the first quarter of 2014. The average WTI Cushing to WTI Midland spread for the first quarter of 2015 was $1.95 per barrel compared to $3.54 per barrel for the first quarter of 2014. The average Gulf Coast 3/2/1 crack spread was $17.74 per barrel for the first quarter of 2015 compared to $16.81 per barrel for the first quarter of 2014.

CONFERENCE CALL

Alon Partners has scheduled a conference call, which will be broadcast live over the internet on Friday, May 8, 2015 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time), to discuss the first quarter 2015 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 22, 2015, and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers, and using the passcode 13605368#. 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 West Texas, Central Texas, Oklahoma, New Mexico and Arizona through its wholesale distribution network to both Alon Energy's retail convenience stores and other third-party distributors.

Contacts:

Stacey Hudson, Investor Relations Manager

Alon USA Partners GP, LLC

972-367-3808

Investors: Jack Lascar/Stephanie Smith

Dennard-Lascar Associates, LLC
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 PARTNERS, LP 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, 2014, IS UNAUDITED)

For the Three Months Ended

March 31,

2015

2014

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

STATEMENT OF OPERATIONS DATA:


Net sales (1)

$

542,442

$

856,460

Operating costs and expenses:


Cost of sales

450,595

759,046

Direct operating expenses

23,416

28,941

Selling, general and administrative expenses

5,903

4,368

Depreciation and amortization

13,993

10,067

Total operating costs and expenses

493,907

802,422

Operating income

48,535

54,038

Interest expense

(11,693)

(11,324)

Other income (loss), net

(41)

12

Income before state income tax expense

36,801

42,726

State income tax expense

350

485

Net income

$

36,451

$

42,241

Earnings per unit

$

0.58

$

0.68

Weighted average common units outstanding (in thousands)

62,507

62,502

Cash distribution per unit

$

0.70

$

0.18

CASH FLOW DATA:


Net cash provided by (used in):


Operating activities

$

27,087

$

45,267

Investing activities

(3,805)

(18,627)

Financing activities

(19,220)

(11,875)

OTHER DATA:


Adjusted EBITDA (2)

$

62,487

$

64,117

Capital expenditures

2,321

4,162

Capital expenditures for turnarounds and catalysts

1,484

14,465

KEY OPERATING STATISTICS:


Per barrel of throughput:


Refinery operating margin (3)

$

13.80

$

14.77

Refinery direct operating expense (4)

3.60

4.39

PRICING STATISTICS:


Crack spreads (per barrel):


Gulf Coast 3/2/1 (5)

$

17.74

$

16.81

WTI Cushing crude oil (per barrel)

$

48.48

$

98.65

Crude oil differentials (per barrel):


WTI Cushing less WTI Midland (6)

$

1.95

$

3.54

WTI Cushing less WTS (6)

1.76

3.67

Brent less WTI Cushing (6)

5.44

10.46

Product price (dollars per gallon):


Gulf Coast unleaded gasoline

$

1.52

$

2.66

Gulf Coast ultra-low sulfur diesel

1.69

2.93

Natural gas (per MMBtu)

2.81

4.72










March 31,
2015

December 31,
2014

BALANCE SHEET DATA (end of period):

 (dollars in thousands)

Cash and cash equivalents

$

110,387

$

106,325

Working capital

(11,383)

(4,561)

Total assets

776,652

770,246

Total debt

291,896

302,376

Total debt less cash and cash equivalents

181,509

196,051

Total partners' equity

181,103

188,402













THROUGHPUT AND PRODUCTION DATA:

For the Three Months Ended

March 31,

2015

2014

bpd

%

bpd

%

Refinery throughput:






WTS crude

44,865

62.0

35,345

48.2

WTI crude

24,137

33.4

35,982

49.1

Blendstocks

3,358

4.6

1,969

2.7

Total refinery throughput (7)

72,360

100.0

73,296

100.0

Refinery production:






Gasoline

36,192

49.7

36,290

49.6

Diesel/jet

26,086

35.9

24,674

33.6

Asphalt

3,278

4.5

3,406

4.6

Petrochemicals

4,810

6.6

4,412

6.0

Other

2,394

3.3

4,557

6.2

Total refinery production (8)

72,760

100.0

73,339

100.0

Refinery utilization (9)

94.5

%


101.9

%



CASH AVAILABLE FOR DISTRIBUTION DATA:

For the Three Months Ended

March 31, 2015

(dollars in thousands, except per unit data)

Net sales (1)

$

542,442

Operating costs and expenses:

Cost of sales

450,595

Direct operating expenses

23,416

Selling, general and administrative expenses

5,903

Depreciation and amortization

13,993

  Total operating costs and expenses

493,907

Operating income

48,535

Interest expense

(11,693)

Other loss, net

(41)

Income before state income tax expense

36,801

State income tax expense

350

Net income

36,451

Adjustments to reconcile net income to Adjusted EBITDA:

Interest expense

11,693

State income tax expense

350

Depreciation and amortization

13,993

Adjusted EBITDA (2)

62,487

Adjustments to reconcile Adjusted EBITDA to cash available for distribution:

less: Maintenance/growth capital expenditures

2,321

less: Major and non-major turnaround and catalyst replacement capital expenditures

1,484

less: Major turnaround reserve for future years

1,500

less: Principal payments

625

less: State income tax expense

350

less: Interest paid in cash

11,539

Cash available for distribution

$

44,668



Common units outstanding (in 000's)

62,507



Cash available for distribution per unit

$

0.71

________________

(1)

Includes sales to related parties of $82,889 and $139,013 for the three months ended March 31, 2015 and 2014, 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 to Adjusted EBITDA for the three months ended March 31, 2015 and 2014:





















For the Three Months Ended


March 31,


2015

2014


(dollars in thousands)

Net income

$

36,451

$

42,241



State income tax expense

350

485



Interest expense

11,693

11,324



Depreciation and amortization

13,993

10,067



Adjusted EBITDA

$

62,487

$

64,117












(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, 2015 excludes gains related to inventory adjustments of $1,990.

(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.

SOURCE Alon USA Partners, LP