Document



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
            
FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2018 (August 1, 2018)
___________________
HOLLY ENERGY PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other
jurisdiction of incorporation)
001-32225
(Commission File Number)
20-0833098
(I.R.S. Employer
Identification Number)

2828 N. Harwood,
Suite 1300
Dallas, Texas
(Address of principal
executive offices)
 

75201
(Zip code)

Registrant’s telephone number, including area code: (214) 871-3555
Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company        ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ¨  





Item 2.02. Results of Operations and Financial Condition.
On August 1, 2018, Holly Energy Partners, L.P. (the “Partnership”) issued a press release announcing the Partnership’s second quarter 2018 results. A copy of the Partnership’s press release is attached hereto as Exhibit 99.1 and incorporated herein in its entirety.
The information contained in, or incorporated into, this Item 2.02 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference to such filing.

Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits.
99.1
* Furnished herewith.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HOLLY ENERGY PARTNERS, L.P.
By:     HEP Logistics Holdings, L.P.
    its General Partner

By:    Holly Logistic Services, L.L.C.
its General Partner

By:     /s/ Richard L.Voliva III    
Richard L. Voliva III
Executive Vice President and
Chief Financial Officer

Date: August 1, 2018



EXHIBIT INDEX
Exhibit
Number                Exhibit Title

99.1
* Furnished herewith.


Exhibit



Earnings Release
August 1, 2018
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12381389&doc=3
Holly Energy Partners, L.P. Reports Second Quarter Results
Dallas, Texas -- Holly Energy Partners, L.P. (“HEP” or the “Partnership”) (NYSE:HEP) today reported financial results for the second quarter of 2018. Net income attributable to HEP for the second quarter was $40.1 million ($0.38 per basic and diluted limited partner unit) compared to $41.3 million ($0.36 per basic and diluted limited partner unit) for the second quarter of 2017.
Distributable cash flow was $65.2 million for the quarter, up $4.3 million, or 7.0% compared to the second quarter of 2017. HEP announced its 55th consecutive distribution increase on July 19, 2018, raising the quarterly distribution from $0.655 to $0.660 per unit, which represents an increase of 4.3% over the distribution for the second quarter of 2017.
The decrease in earnings is primarily due to higher interest expense partially offset by higher crude pipeline throughputs and revenues.
Commenting on our 2018 second quarter results, George Damiris, Chief Executive Officer, stated, “Normal seasonality masks the underlying strength in our business, particularly our Delaware Basin crude gathering system.
“Looking forward, we expect the continued strength in crude gathering, combined with contractual tariff escalators effective in the third quarter, will drive a strong rebound in earnings growth and our distribution coverage ratio, which we expect to be greater than 1.0x for the second half of the year.”
Second Quarter 2018 Revenue Highlights
Revenues for the quarter were $118.8 million, an increase of $9.6 million compared to the second quarter of 2017. The increase is primarily attributable to our acquisition of the remaining interest in the SLC and Frontier pipelines, which led to an increase in overall pipeline volumes of 24%.

Revenues from our refined product pipelines were $31.1 million for both the second quarters of 2018 and 2017, and shipments averaged 185.6 thousand barrels per day ("mbpd") compared to 206.0 mbpd for the second quarter of 2017. The volume decrease is mainly due to pipelines servicing HollyFrontier Corporation's ("HFC" or "HollyFrontier") Woods Cross refinery, which had lower throughput due to operational issues at the refinery. Revenue remained constant due to contractual minimum volume guarantees.

Revenues from our intermediate pipelines were $7.3 million for both the second quarters ended 2018 and 2017, on shipments averaging 151.5 mbpd compared to 151.7 mbpd for the second quarter of 2017.

Revenues from our crude pipelines were $27.2 million, an increase of $10.3 million, on shipments averaging 437.9 mbpd compared to 269.4 mbpd for the second quarter of 2017. The increases are mainly attributable to our acquisition of the remaining interest in the SLC and Frontier pipelines in the fourth quarter of 2017 as well as increased volumes on our crude pipeline systems in New Mexico and Texas.

Revenues from terminal, tankage and loading rack fees were $34.4 million, a decrease of $2.0 million compared to the second quarter of 2017. Refined products and crude oil terminalled in the


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facilities averaged 505.1 mbpd compared to 529.0 mbpd for the second quarter of 2017. The revenue and volume decreases are mainly due to lower volumes at terminals associated with UNEV Pipeline, LLC and lower volumes at our Tulsa tanks.

Revenues from refinery processing units were $18.8 million, an increase of $1.3 million on throughputs averaging 71.1 mbpd compared to 67.3 mbpd for the third quarter of 2017. The increase in revenue is mainly due to higher volumes at our Woods Cross refinery processing units.

Revenues for the second quarter of 2018, include the recognition of $0.4 million of prior shortfalls billed to shippers in 2017. As of June 30, 2018, deferred revenue reflected in our consolidated balance sheet related to shortfalls billed was $4.4 million.

Six Months Ended June 30, 2018 Revenue Highlights
Revenues for the six months ended June 30, 2018, were $247.6 million, an increase of $32.9 million compared to the six months ended June 30, 2017. The increase is primarily attributable to our acquisition of the remaining interest in the SLC and Frontier pipelines and the turnaround at HollyFrontier's Navajo refinery in the first quarter of 2017.

Revenues from our refined product pipelines were $66.0 million, an increase of $4.6 million, on shipments averaging 201.2 mbpd compared to 199.2 mbpd for the six months ended June 30, 2017. Revenues increased due to the turnaround at HFC's Navajo refinery in the first quarter of 2017.

Revenues from our intermediate pipelines were $15.7 million, an increase of $3.2 million, on shipments averaging 139.3 mbpd compared to 128.1 mbpd for the six months ended June 30, 2017. These increases were principally due to the turnaround at HFC's Navajo refinery in the first quarter of 2017.

Revenues from our crude pipelines were $56.0 million, an increase of $22.2 million, on shipments averaging 462.5 mbpd compared to 269.2 mbpd for the six months ended June 30, 2017. The increases are mainly attributable to our acquisition of the remaining interest in the SLC and Frontier pipelines in the fourth quarter of 2017 as well as increased volumes on our crude pipeline systems in New Mexico and Texas.

Revenues from terminal, tankage and loading rack fees were $72.6 million, an increase of $2.4 million compared to the six months ended June 30, 2017. Refined products and crude oil terminalled in the facilities averaged 479.1 mbpd compared to 487.0 mbpd for the six months ended June 30, 2017. The increase in revenue is primarily due to higher volumes in several of our terminals as well as an adjustment in revenue recognition. Total volumes decreased mainly due to lower volumes at our Tulsa tanks, which are supported by minimum volume commitments.

Revenues from refinery processing units were $37.4 million, an increase of $0.5 million on throughputs averaging 69.0 mbpd compared to 65.1 mbpd for the six months ended June 30, 2017. The increase in revenue is mainly due to higher volumes at our Woods Cross refinery processing units.

Revenues for the six months ended June 30, 2018, include the recognition of $2.6 million of prior shortfalls billed to shippers in 2017 as they did not exceed their minimum volume commitments within the contractual make-up period.

Operating Costs and Expenses Highlights
Operating costs and expenses were $61.8 million and $126.3 million for the three and six months ended June 30, 2018, representing an increase of $5.2 million and $15.7 million from the three and six months ended June 30, 2017. The increase is primarily due to new operating costs and expenses related to our acquisition of the remaining interest in the SLC and Frontier pipelines in the fourth quarter of 2017.


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Interest expense was $17.6 million and $35.2 million for the three and six months ended June 30, 2018, representing an increase of $3.9 million and $7.9 million over the same periods of 2017. These increases are primarily due to interest expense associated with the private placement of an additional $100 million in aggregate principal amount of our 6% Senior Notes due 2024 completed in the third quarter of 2017, higher average balances outstanding under our senior secured revolving credit facility, and market interest rate increases under that facility.
We have scheduled a webcast conference call today at 4:00 PM Eastern Time to discuss financial results. This webcast may be accessed at:
https://event.webcasts.com/starthere.jsp?ei=1200323&tp_key=3e74bee54b.
An audio archive of this webcast will be available using the above noted link through August 15, 2018.

About Holly Energy Partners, L.P.
Holly Energy Partners, L.P., headquartered in Dallas, Texas, provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including HollyFrontier Corporation subsidiaries. The Partnership, through its subsidiaries and joint ventures, owns and/or operates petroleum product and crude pipelines, tankage and terminals in Texas, New Mexico, Arizona, Washington, Idaho, Oklahoma, Utah, Nevada, Wyoming and Kansas, as well as refinery processing units in Utah and Kansas.
HollyFrontier Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and other specialty products. HollyFrontier operates through its subsidiaries a 135,000 barrels per stream day ("bpsd") refinery located in El Dorado, Kansas, a 125,000 bpsd refinery in Tulsa, Oklahoma, a 100,000 bpsd refinery located in Artesia, New Mexico, a 52,000 bpsd refinery located in Cheyenne, Wyoming and a 45,000 bpsd refinery in Woods Cross, Utah. HollyFrontier markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. Additionally, HollyFrontier owns Petro-Canada Lubricants Inc., whose Mississauga, Ontario facility produces 15,600 barrels per day of base oils and other specialized lubricant products, and owns a 57% limited partner interest and the non-economic general partner interest in Holly Energy Partners, L.P.
The statements in this press release relating to matters that are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. These statements are based on our beliefs and assumptions and those of our general partner using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties. Although we and our general partner believe that such expectations reflected in such forward-looking statements are reasonable, neither we nor our general partner can give assurance that our expectations will prove to be correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in these statements. Any differences could be caused by a number of factors including, but not limited to:
risks and uncertainties with respect to the actual quantities of petroleum products and crude oil shipped on our pipelines and/or terminalled, stored and throughput in our terminals;
the economic viability of HollyFrontier Corporation, Delek US Holdings, Inc. and our other customers;
the demand for refined petroleum products in markets we serve;
our ability to purchase and integrate future acquired operations;
our ability to complete previously announced or contemplated acquisitions;
the availability and cost of additional debt and equity financing;
the possibility of reductions in production or shutdowns at refineries utilizing our pipeline and terminal facilities;
the effects of current and future government regulations and policies;
our operational efficiency in carrying out routine operations and capital construction projects;
the possibility of terrorist or cyber attacks and the consequences of any such attacks;
general economic conditions;


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the impact of recent changes in tax laws and regulations that affect master limited partnerships; and
other financial, operations and legal risks and uncertainties detailed from time to time in our Securities and Exchange Commission filings.

The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


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RESULTS OF OPERATIONS (Unaudited)
       
Income, Distributable Cash Flow and Volumes
The following tables present income, distributable cash flow and volume information for the three and the six months ended June 30, 2018 and 2017.
 
Three Months Ended June 30,
 
Change from
 
2018
 
2017
 
2017
 
(In thousands, except per unit data)
Revenues
 
 
 
 
 
Pipelines:
 
 
 
 
 
Affiliates – refined product pipelines
$
18,744

 
$
19,432

 
$
(688
)
Affiliates – intermediate pipelines
7,255

 
7,250

 
5

Affiliates – crude pipelines
18,479

 
16,919

 
1,560

 
44,478

 
43,601

 
877

   Third parties – refined product pipelines
12,348

 
11,647

 
701

Third parties – crude pipelines
8,713

 

 
8,713

 
65,539

 
55,248

 
10,291

Terminals, tanks and loading racks:
 
 
 
 
 
Affiliates
30,700

 
32,012

 
(1,312
)
Third parties
3,686

 
4,344

 
(658
)
 
34,386

 
36,356

 
(1,970
)
 
 
 
 
 
 
Affiliates - refinery processing units
18,835

 
17,539

 
1,296

 
 
 
 
 
 
Total revenues
118,760

 
109,143

 
9,617

Operating costs and expenses
 
 
 
 
 
Operations
34,533

 
34,097

 
436

Depreciation and amortization
24,608

 
19,945

 
4,663

General and administrative
2,673

 
2,615

 
58

 
61,814

 
56,657

 
5,157

Operating income
56,946

 
52,486

 
4,460

 
 
 
 
 
 
Equity in earnings of equity method investments
1,734

 
4,053

 
(2,319
)
Interest expense, including amortization
(17,626
)
 
(13,748
)
 
(3,878
)
Interest income
526

 
103

 
423

Gain on sale of assets and other
(53
)
 
89

 
(142
)
 
(15,419
)
 
(9,503
)
 
(5,916
)
Income before income taxes
41,527

 
42,983

 
(1,456
)
State income tax expense
(28
)
 
(127
)
 
99

Net income
41,499

 
42,856

 
(1,357
)
Allocation of net income attributable to noncontrolling interests
(1,356
)
 
(1,521
)
 
165

Net income attributable to Holly Energy Partners
40,143

 
41,335

 
(1,192
)
General partner interest in net income, including incentive distributions(1)

 
(18,328
)
 
18,328

Limited partners’ interest in net income
$
40,143

 
$
23,007

 
$
17,136

Limited partners’ earnings per unit – basic and diluted(1)
$
0.38

 
$
0.36

 
$
0.36

Weighted average limited partners’ units outstanding
105,429

 
64,086

 
64,086

EBITDA(2)
$
81,879

 
$
75,052

 
$
6,827

Distributable cash flow(3)
$
65,180

 
$
60,908

 
$
4,272

Volumes (bpd)
 
 
 
 
 
Pipelines:
 
 
 
 
 
Affiliates – refined product pipelines
112,371

 
134,357

 
(21,986
)
Affiliates – intermediate pipelines
151,537

 
151,683

 
(146
)
Affiliates – crude pipelines 
322,850

 
269,418

 
53,432

 
586,758

 
555,458

 
31,300

Third parties – refined product pipelines
73,196

 
71,612

 
1,584

Third parties – crude pipelines
115,011

 

 
115,011

 
774,965

 
627,070

 
147,895

Terminals and loading racks:
 
 
 
 
 
Affiliates
446,089

 
461,329

 
(15,240
)
Third parties
59,035

 
67,657

 
(8,622
)
 
505,124

 
528,986

 
(23,862
)
 
 
 
 
 
 
Affiliates – refinery processing units
71,117

 
67,310

 
3,807

 
 
 
 
 
 
Total for pipelines and terminal assets (bpd)
1,351,206

 
1,223,366

 
127,840




5




 
Six Months Ended June 30,
 
Change from
 
2018
 
2017
 
2017
 
(In thousands, except per unit data)
Revenues
 
 
 
 
 
Pipelines:
 
 
 
 
 
Affiliates – refined product pipelines
$
40,038

 
$
37,176

 
$
2,862

Affiliates – intermediate pipelines
15,724

 
12,534

 
3,190

Affiliates – crude pipelines
38,276

 
33,800

 
4,476

 
94,038

 
83,510

 
10,528

   Third parties – refined product pipelines
25,930

 
24,185

 
1,745

Third parties – crude pipelines
17,740

 

 
17,740

 
137,708

 
107,695

 
30,013

Terminals, tanks and loading racks:
 
 
 
 
 
Affiliates
64,034

 
61,748

 
2,286

Third parties
8,533

 
8,415

 
118

 
72,567

 
70,163

 
2,404

 
 
 
 
 
 
Affiliates - refinery processing units
37,369

 
36,919

 
450

 
 
 
 
 
 
Total revenues
247,644

 
214,777

 
32,867

Operating costs and expenses
 
 
 
 
 
Operations
70,735

 
66,586

 
4,149

Depreciation and amortization
49,750

 
38,722

 
11,028

General and administrative
5,795

 
5,249

 
546

 
126,280

 
110,557

 
15,723

Operating income
121,364

 
104,220

 
17,144

 
 
 
 
 
 
Equity in earnings of equity method investments
3,013

 
5,893

 
(2,880
)
Interest expense, including amortization
(35,207
)
 
(27,287
)
 
(7,920
)
Interest income
1,041

 
205

 
836

Loss on early extinguishment of debt

 
(12,225
)
 
12,225

Gain (loss) on sale of assets and other
33

 
162

 
(129
)
 
(31,120
)
 
(33,252
)
 
2,132

Income before income taxes
90,244

 
70,968

 
19,276

State income tax expense
(110
)
 
(233
)
 
123

Net income
90,134

 
70,735

 
19,399

Allocation of net income attributable to noncontrolling interests
(3,823
)
 
(3,837
)
 
14

Net income attributable to Holly Energy Partners
86,311

 
66,898

 
19,413

General partner interest in net income, including incentive distributions(1)

 
(35,466
)
 
35,466

Limited partners’ interest in net income
$
86,311

 
$
31,432

 
$
54,879

Limited partners’ earnings per unit—basic and diluted(1)
$
0.82

 
$
0.49

 
$
0.33

Weighted average limited partners’ units outstanding
104,637

 
63,602

 
41,035

EBITDA(2)
$
170,337

 
$
132,935

 
$
37,402

Adjusted EBITDA(2)
$
170,337

 
$
145,160

 
$
25,177

Distributable cash flow(3)
$
134,279

 
$
118,197

 
$
16,082

 
 
 
 
 
 
Volumes (bpd)
 
 
 
 
 
Pipelines:
 
 
 
 
 
Affiliates – refined product pipelines
128,498

 
120,886

 
7,612

Affiliates – intermediate pipelines
139,333

 
128,143

 
11,190

Affiliates – crude pipelines
341,922

 
269,155

 
72,767

 
609,753

 
518,184

 
91,569

Third parties – refined product pipelines
72,720

 
78,339

 
(5,619
)
Third parties – crude pipelines
120,568

 

 
120,568

 
803,041

 
596,523

 
206,518

Terminals and loading racks:
 
 
 
 

Affiliates
418,439

 
418,365

 
74

Third parties
60,684

 
68,646

 
(7,962
)
 
479,123

 
487,011

 
(7,888
)
 
 
 
 
 
 
Affiliates – refinery processing units
69,008

 
65,082

 
3,926

 
 
 
 
 
 
Total for pipelines and terminal assets (bpd)
1,351,172

 
1,148,616

 
202,556







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(1)
Prior to the equity restructuring transaction on October 31, 2017, net income attributable to Holly Energy Partners was allocated between limited partners and the general partner interest in accordance with the provisions of the partnership agreement. HEP net income allocated to the general partner included incentive distributions that were declared subsequent to quarter end. There were no distributions made on the general partner interest after October 31, 2017, and general partner distributions were $18.7 million and $36.5 million for the three and the six months ended June 30, 2017, respectively.
(2)
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is calculated as net income attributable to Holly Energy Partners plus (i) interest expense, net of interest income, (ii) state income tax and (iii) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA plus loss on early extinguishment of debt. EBITDA and Adjusted EBITDA are not calculations based upon generally accepted accounting principles ("GAAP"). However, the amounts included in the EBITDA and Adjusted EBITDA calculations are derived from amounts included in our consolidated financial statements. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income attributable to Holly Energy Partners or operating income, as indications of our operating performance or as alternatives to operating cash flow as a measure of liquidity. EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures of other companies. EBITDA and Adjusted EBITDA are presented here because they are widely used financial indicators used by investors and analysts to measure performance. EBITDA and Adjusted EBITDA are also used by our management for internal analysis and as a basis for compliance with financial covenants.

Set forth below is our calculation of EBITDA and Adjusted EBITDA.
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
(In thousands)
Net income attributable to Holly Energy Partners
 
$
40,143

 
$
41,335

 
$
86,311

 
$
66,898

Add (subtract):
 
 
 
 
 
 
 
 
Interest expense
 
16,867

 
12,982

 
33,691

 
25,751

Interest Income
 
(526
)
 
(103
)
 
(1,041
)
 
(205
)
Amortization of discount and deferred debt charges
 
759

 
766

 
1,516

 
1,536

State income tax expense
 
28

 
127

 
110

 
233

Depreciation and amortization
 
24,608

 
19,945

 
49,750

 
38,722

EBITDA
 
$
81,879

 
$
75,052

 
$
170,337

 
$
132,935

Add loss on early extinguishment of debt
 

 

 

 
12,225

Adjusted EBITDA
 
$
81,879

 
$
75,052

 
$
170,337

 
$
145,160

(3)
Distributable cash flow is not a calculation based upon GAAP. However, the amounts included in the calculation are derived from amounts presented in our consolidated financial statements, with the general exception of maintenance capital expenditures. Distributable cash flow should not be considered in isolation or as an alternative to net income attributable to Holly Energy Partners or operating income, as an indication of our operating performance, or as an alternative to operating cash flow as a measure of liquidity. Distributable cash flow is not necessarily comparable to similarly titled measures of other companies. Distributable cash flow is presented here because it is a widely accepted financial indicator used by investors to compare partnership performance. It is also used by management for internal analysis and our performance units. We believe that this measure provides investors an enhanced perspective of the operating performance of our assets and the cash our business is generating.    



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Set forth below is our calculation of distributable cash flow.
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
(In thousands)
Net income attributable to Holly Energy Partners
 
$
40,143

 
$
41,335

 
$
86,311

 
$
66,898

Add (subtract):
 
 
 
 
 
 
 
 
Depreciation and amortization
 
24,608

 
19,945

 
49,750

 
38,722

Amortization of discount and deferred debt charges
 
759

 
766

 
1,516

 
1,536

Loss on early extinguishment of debt
 

 

 

 
12,225

Customer billings greater than revenue recognized
 
1,819

 
1,524

 
138

 
2,701

Maintenance capital expenditures (4)
 
(987
)
 
(2,242
)
 
(1,305
)
 
(3,067
)
Decrease in environmental liability
 
(78
)
 
(313
)
 
(218
)
 
(559
)
Decrease in reimbursable deferred revenue
 
(1,243
)
 
(923
)
 
(2,420
)
 
(1,848
)
Other non-cash adjustments
 
159

 
816

 
507

 
1,589

Distributable cash flow
 
$
65,180

 
$
60,908

 
$
134,279

 
$
118,197

    
(4)
Maintenance capital expenditures are capital expenditures made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of our assets and to extend their useful lives. Maintenance capital expenditures include expenditures required to maintain equipment reliability, tankage and pipeline integrity, safety and to address environmental regulations.

Set forth below is certain balance sheet data.
 
 
June 30,
 
December 31,
 
 
2018
 
2017
 
 
(In thousands)
Balance Sheet Data
 
 
 
 
Cash and cash equivalents
 
$
6,656

 
$
7,776

Working capital
 
$
6,403

 
$
18,906

Total assets
 
$
2,116,063

 
$
2,154,114

Long-term debt
 
$
1,395,599

 
$
1,507,308

Partners' equity (5)
 
$
468,397

 
$
393,959


(5)
As a master limited partnership, we distribute our available cash, which historically has exceeded our net income attributable to Holly Energy Partners because depreciation and amortization expense represents a non-cash charge against income. The result is a decline in partners’ equity since our regular quarterly distributions have exceeded our quarterly net income attributable to Holly Energy Partners. Additionally, if the assets contributed and acquired from HollyFrontier while we were a consolidated variable interest entity of HollyFrontier had been acquired from third parties, our acquisition cost in excess of HollyFrontier’s basis in the transferred assets would have been recorded in our financial statements as increases to our properties and equipment and intangible assets at the time of acquisition instead of decreases to partners’ equity.


FOR FURTHER INFORMATION, Contact:

Richard L. Voliva III, Executive Vice President and
Chief Financial Officer
Craig Biery, Director, Investor Relations
Holly Energy Partners, L.P.
214/954-6511


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