Alon USA Partners Reports Fourth Quarter and Full Year 2012 Results Company schedules conference call for March 7, 2013 at 10:00 a.m. Eastern PR Newswire DALLAS, March 4, 2013 DALLAS, March 4, 2013 /PRNewswire/ -- Alon USA Partners, LP (NYSE: ALDW) ("Alon") today announced results for the quarter and year ended December 31, 2012. Net income for the fourth quarter of 2012 was $113.2 million compared to $45.5 million for the same period last year. Net income for the year ended December 31, 2012 was $381.9 million compared to $294.4 million for the same period last year. Paul Eisman, CEO and President, commented, "It is exciting to have the opportunity to present the financial results of our newly formed public partnership, Alon USA Partners, LP. The partnership had a very successful year, increasing adjusted EBITDA by almost $100 million dollars from approximately $370 million in 2011 to $470 million in 2012. "During the fourth quarter, we generated over $165 million of cash flow from operating activities as a result of the positive margin environment that continues to remain strong. We generated an operating margin of $25.26 per barrel benefiting from both continuing wide Cushing crude differentials but also from widening location differentials at Midland. Additionally, we benefited from good operations as we increased throughput during the fourth quarter to more than 72,000 barrels per day. "Consequently, as a result of our strong performance, we made prorated cash distributions in accordance with the prospectus of $0.57 per unit to unitholders for the period following the IPO. If the cash distribution was for the entire fourth quarter, then the cash distribution would have been $1.92 per unit. "Looking forward to first quarter, we see continuing strong crude oil differentials and resulting good margins. We completed some maintenance work in the first quarter, and as a result, expect throughput in the first quarter of 2013 to average approximately 60,000 barrels per day. We anticipate throughput for the full year to average approximately 68,000 barrels per day." FOURTH QUARTER 2012 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. The refinery's throughput for the fourth quarter of 2012 averaged 72,109 barrels per day ("bpd") compared to 71,700 bpd for the same period in 2011. 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 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. YEAR-TO-DATE 2012 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. The refinery's throughput for 2012 averaged 68,946 bpd compared to 63,614 bpd for the same period in 2011. 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 WTI to WTS spread for 2012 was $5.46 per barrel compared to $2.06 per barrel for 2011. CONFERENCE CALL Alon has scheduled a conference call for Thursday, March 7, 2013, at 10:00 a.m. Eastern, to discuss the fourth quarter 2012 results. To access the call, please dial 1-800-762-8779, or 480-629-9645, for international callers, and ask for the Alon USA Partners, LP call at least 10 minutes prior to the start time. Investors may also listen to the conference live on the Alon Partners website, http://www.alonpartners.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 1-800-406-7325, or 303-590-3030, for international callers, and using the passcode 4593733#. A web cast 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 DRG&L at 713-529-6600 or email firstname.lastname@example.org. 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. Alon USA Partners, LP is a Delaware limited partnership formed in August 2012 by Alon USA Energy, Inc. (NYSE: ALJ). Alon Partners owns and operates a crude oil refinery in Big Spring, Texas with total throughput capacity of approximately 70,000 barrels per day. Alon Partners refines crude oil into finished products, which is 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. Amir Barash, Vice President-IR Contacts: 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 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, 2011, AND INCOME STATEMENT DATA FOR THE YEAR ENDED DECEMBER 31, 2011, IS UNAUDITED) Three Months Ended December 31, Year Ended December 31, 2012 2011 2012 2011 STATEMENT OF OPERATIONS DATA: Net sales (1) $ 825,626 $ 856,488 $ 3,476,817 $ 3,207,969 Operating costs and expenses: Cost of sales 658,039 763,190 2,883,741 2,722,918 Direct operating 27,685 25,034 100,908 98,178 expenses Selling, general and administrative 4,737 3,420 22,807 15,633 expenses Depreciation and 11,046 10,242 46,009 40,448 amortization Total operating 701,507 801,886 3,053,465 2,877,177 costs and expenses Loss on disposition of — (10) — — assets Operating income 124,119 54,592 423,352 330,792 Interest expense (7,165) (4,414) (22,235) (16,719) Interest expense - (2,701) (4,267) (15,691) (17,067) related parties Other income (3) 18 8 18 (loss), net Income before state income tax 114,250 45,929 385,434 297,024 expense State income tax 1,018 444 3,536 2,597 expense Net income $ 113,232 $ 45,485 $ 381,898 $ 294,427 Net income $ 113,232 $ 381,898 less: Net income attributable to 76,112 344,778 predecessor operations Net income attributable to $ 37,120 $ 37,120 Alon USA Partners, LP Earnings per unit, basic and diluted $ 0.59 $ 0.59 (2) Weighted average common units outstanding, basic 62,500 62,500 and diluted (in thousands) (2) CASH FLOW DATA: Net cash provided by (used in): Operating $ 165,209 $ 92,988 $ 528,825 $ 258,575 activities Investing (6,314) (1,549) (31,769) (19,545) activities Financing (122,308) (100,240) (567,000) (123,437) activities OTHER DATA: Adjusted EBITDA $ 135,162 $ 64,862 $ 469,369 $ 371,258 (3) Capital 6,314 1,370 24,490 12,460 expenditures Capital expenditures for — 169 7,279 7,085 turnaround and catalyst KEY OPERATING STATISTICS: Per barrel of throughput: Refinery operating $ 25.26 $ 14.14 $ 23.50 $ 20.89 margin (4) Refinery direct operating expense 4.17 3.80 4.00 4.23 (5) 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) Three Months Ended December Year Ended December 31, 31, 2012 2011 2012 2011 AVERAGE PRICING STATISTICS: WTI crude oil (per $ 88.10 $ 94.03 $ 94.14 $ 95.07 barrel) WTS crude oil (per 78.55 93.19 88.68 93.01 barrel) Crack spreads (per barrel): Gulf Coast (WTI) 3-2-1 $ 27.10 $ 19.95 $ 27.43 $ 23.37 (6) Crude oil differentials (per barrel): Cushing WTI less $ 9.55 $ 0.84 $ 5.46 $ 2.06 Cushing WTS (7) Product price (dollars per gallon): Gulf Coast unleaded $ 2.60 $ 2.59 $ 2.82 $ 2.75 gasoline Gulf Coast ultra-low 3.04 2.96 3.05 2.97 sulfur diesel Natural gas (per 3.54 3.48 2.83 4.03 MMBtu) December 31, December 31, 2012 2011 BALANCE SHEET DATA (end of period): (dollars in thousands) Cash and cash equivalents $ 66,001 $ 135,945 Working capital 1,702 148,222 Total assets 763,423 810,480 Total debt 295,311 533,592 Total equity 181,726 102,689 THROUGHPUT AND For the Three Months Ended For the Year Ended PRODUCTION DATA: December 31, December 31, 2012 2011 2012 2011 bpd % bpd % bpd % bpd % Refinery throughput: WTS crude 48,894 67.8 57,335 80.0 52,190 75.7 51,202 80.4 WTI crude 19,180 26.6 11,306 15.8 14,396 20.9 10,023 15.8 Blendstocks 4,035 5.6 3,059 4.2 2,360 3.4 2,389 3.8 Total refinery 72,109 100.0 71,700 100.0 68,946 100.0 63,614 100.0 throughput (8) Refinery production: Gasoline 37,572 52.3 37,443 52.1 34,637 50.3 31,105 49.1 Diesel/jet 22,612 31.4 23,035 32.0 22,329 32.5 20,544 32.3 Asphalt 3,615 5.0 4,638 6.4 4,084 5.9 4,539 7.1 Petrochemicals 4,199 5.8 4,354 6.1 4,054 5.9 3,837 6.0 Other 3,939 5.5 2,452 3.4 3,706 5.4 3,488 5.5 Total refinery 71,937 100.0 71,922 100.0 68,810 100.0 63,513 100.0 production (9) Refinery utilization 97.2 % 98.1 % 97.3 % 90.8 % (10) Includes sales to related parties of $138,412 and $136,761 for the (1) three months ended December 31, 2012 and 2011, respectively, and $588,828 and $553,253 for the years ended December 31, 2012 and 2011, respectively. The calculation of earnings per unit includes only earnings for the (2) period following the closing of the initial public offering through December 31, 2012 ("Post IPO Period") of $37,120 for the three months and year ended December 31, 2012. Adjusted EBITDA represents earnings before state income tax expense, interest expense, depreciation and amortization, and loss on disposition of assets. 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 (3) 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, loss on disposition of assets 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 and years ended December 31, 2012 and 2011, respectively: For the Three Months Ended For the Year Ended December 31, December 31, 2012 2011 2012 2011 (dollars in thousands) Net income $ 113,232 $ 45,485 $ 381,898 $ 294,427 State income 1,018 444 3,536 2,597 tax expense Interest 7,165 4,414 22,235 16,719 expense Interest expense - 2,701 4,267 15,691 17,067 related parties Depreciation and 11,046 10,242 46,009 40,448 amortization Loss on disposition of — 10 — — assets Adjusted $ 135,162 $ 64,862 $ 469,369 $ 371,258 EBITDA Refinery operating margin is a per barrel measurement calculated by dividing the margin between net sales and cost of sales by the refinery's throughput volumes. Industry-wide (4) 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 direct operating expense is a per barrel measurement (5) calculated by dividing direct operating expenses by total throughput volumes. We compare our refinery operating margin to the Gulf Coast 3/2/1 crack spread. A 3/2/1 crack spread is calculated assuming that three barrels of a benchmark crude oil are converted, or (6) cracked, into two barrels of gasoline and one barrel of diesel. We calculate the Gulf Coast 3/2/1 crack spread using the market values of Gulf Coast conventional gasoline and ultra-low sulfur diesel and the market value of WTI, a light, sweet crude oil. The WTI/WTS, or sweet/sour, spread represents the differential (7) between the average value per barrel of WTI crude oil and the average value per barrel of WTS crude oil. Total refinery throughput represents the total barrels per day (8) of crude oil and blendstock inputs in the refinery production process. Total refinery production represents the barrels per day of (9) various refined products produced from processing crude and other refinery feedstocks through the crude units and other conversion units. Refinery utilization represents average daily crude oil (10) throughput divided by crude oil capacity, excluding planned periods of downtime for maintenance and turnarounds. SOURCE Alon USA Partners, LP
Alon USA Partners Reports Fourth Quarter and Full Year 2012 Results
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