DALLAS--(BUSINESS WIRE)--
Holly Energy Partners, L.P. ("HEP" or the "Partnership") (NYSE:HEP)
today reported financial results for the fourth quarter of 2013. For the
quarter, distributable cash flow was $34.3 million, down $7.4 million,
or 17.7% compared to the fourth quarter of 2012. HEP announced its 37th
consecutive distribution increase on January 23, 2014, raising the
quarterly distribution from $0.4925 to $0.50 per unit, representing a
6.4% increase over the distribution for the fourth quarter of 2012.
Net income attributable to Holly Energy Partners for the fourth quarter
was $19.0 million ($0.19 per basic and diluted limited partner unit)
compared to $27.0 million ($0.37 per basic and diluted limited partner
unit) for the fourth quarter of 2012. This decrease in earnings is
primarily a result of lower pipeline shipments due to reduced crude
throughput at HollyFrontier Corporation's ("HFC") Navajo Refinery in the
2013 fourth quarter. Navajo Refinery reduced its crude throughput during
the quarter due to previously announced waste water processing
constraints.
Commenting on the fourth quarter of 2013, Mike Jennings, Chief Executive
Officer, stated, "We are pleased that financial results for the fourth
quarter of 2013 allowed us to continue our record of raising our
quarterly distribution. As we previously announced, certain unexpected
operational constraints at our largest shipper's New Mexico refinery
significantly reduced shipments on our pipelines into and out of that
facility during the fourth quarter; these shipments have now returned to
normal levels. Despite this event-driven reduction in volumes during the
fourth quarter of 2013, our financial results, supported by minimum
commitment contracts and sustained strength in crude oil gathering
revenues, allowed us to continue our record of raising our quarterly
distributions in every quarter since our initial public offering nine
years ago.
"As we look forward we believe HEP is well positioned due to the quality
and geographic location of our assets, our talented employee base, and
our financially strong and supportive general partner, HollyFrontier. We
believe HEP's future growth is underpinned by strong industry
fundamentals, planned capital projects and our existing long-term
fee-based contracts with built-in annual escalators. We plan to continue
to pursue opportunities to more fully utilize our existing assets and to
seek value creating acquisitions that will add to our asset base.
"We have placed in service certain segments of our previously announced
New Mexico crude gathering expansion project, and we expect full
completion of the project by August. The segments now in operation will
begin contributing to our results during the first quarter of 2014."
Fourth Quarter 2013 Revenue Highlights
Revenues for the quarter were $77.9 million, a $3.6 million decrease
compared to the fourth quarter of 2012. The revenue decrease was due to
reduced shipments on our pipelines supporting the Navajo Refinery and a
decrease of $2.9 million in previously deferred revenue realized under
our guaranteed shipping contracts, partially offset by higher cost
reimbursement receipts from HFC. Overall pipeline volumes were down 9%
compared to the fourth quarter of 2012.
-
Revenues from our refined product pipelines were $27.9 million,
a decrease of $2.7 million primarily due to the effects of reduced
shipments by Navajo Refinery and a decrease of $2.3 million in
previously deferred revenue realized, partially offset by increased
volumes on the UNEV Pipeline and the effect of annual tariff
increases. Shipments averaged 174.2 thousand barrels per day ("mbpd")
compared to 182.3 mbpd for the fourth quarter of 2012.
-
Revenues from our intermediate pipelines were $5.4 million, a
decrease of $2.1 million primarily due to a decrease of $0.6 million
in previously deferred revenue realized and the effects of decreased
volumes on pipeline segments supporting the Navajo Refinery. Shipments
averaged 114.4 mbpd compared to 115.8 mbpd for the fourth quarter of
2012.
-
Revenues from our crude pipelines were $12.0 million, a
decrease of $0.1 million, on shipments averaging 142.7 mbpd compared
to 174.4 mbpd for the fourth quarter of 2012. Although volumes were
down significantly, revenues benefited from annual tariff increases
and minimum billings on certain pipeline segments.
-
Revenues from terminal, tankage and loading rack fees were
$32.6 million, an increase of $1.3 million compared to the fourth
quarter of 2012. The increase in revenue is due to annual fee
increases and higher tank cost reimbursement receipts from HFC,
partially offset by lower volumes at the terminals supporting the
Navajo Refinery. Refined products terminalled in our facilities
decreased to an average of 300.1 mbpd compared to 343.3 mbpd for the
fourth quarter of 2012.
Revenues for the three months ended December 31, 2013 include the
recognition of $1.7 million of prior shortfalls billed to shippers, as
they did not meet their minimum volume commitments within the
contractual make-up period. As of December 31, 2013, deferred revenue on
our consolidated balance sheet related to shortfalls billed was $12.0
million. Such deferred revenue will be recognized in earnings either as
payment for shipments in excess of guaranteed levels, if and to the
extent the pipeline system will not have the necessary capacity for
shipments in excess of guaranteed levels, or when shipping rights expire
unused over the contractual make-up period.
Year Ended December 31, 2013 Revenue Highlights
Revenues for the year ended December 31, 2013 were $305.2 million, a
$12.6 million increase compared to the same period of 2012. This is due
principally to the effect of annual tariff increases, higher cost
reimbursement receipts from HFC and a $1.5 million increase in
previously deferred revenue realized. Overall pipeline volumes were down
2% compared to 2012.
-
Revenues from our refined product pipelines were $108.3
million, an increase of $3.1 million, primarily due to the effect of a
$3.3 million increase in previously deferred revenue realized and
annual tariff increases. Shipments averaged 170.8 mbpd compared to
170.7 mbpd for the year ended December 31, 2012.
-
Revenues from our intermediate pipelines were $25.4 million, a
decrease of $3.1 million, on shipments averaging 128.5 mbpd compared
to 127.2 mbpd for the year ended December 31, 2012. The decrease in
revenue is due to the effects of a $1.8 million decrease in previously
deferred revenue realized and reduced volumes on certain high tariff
pipeline segments.
-
Revenues from our crude pipelines were $48.7 million, an
increase of $2.9 million, on shipments averaging 161.4 mbpd compared
to 171.0 mbpd for the year ended December 31, 2012. Although crude oil
pipeline shipments were down, revenues increased due to the annual
tariff increases and minimum billings on certain pipeline segments.
-
Revenues from terminal, tankage and loading rack fees were
$122.8 million, an increase of $9.8 million compared to the year ended
December 31, 2012. This increase is due to annual fee increases and
higher tank costs reimbursement receipts from HFC. Refined products
terminalled in our facilities decreased to an average of 318.9 mbpd
compared to 325.0 mbpd for the year ended December 31, 2012.
Revenues for the year ended December 31, 2013 include the recognition of
$7.8 million of prior shortfalls billed to shippers in 2012.
Cost and Expense Highlights
Operating costs and expenses were $47.1 million and $176.6 million for
the three months and year ended December 31, 2013, respectively,
representing increases of $6.6 million and $22.3 million over the
respective periods of 2012. These increases are due to year-over-year
increases in maintenance costs, environmental accruals, employee costs,
property taxes and depreciation expense (due to asset abandonment
charges related to tankage permanently removed from service). Operating
expenses for the year ended December 31, 2013 were reduced by $3.5
million due to a net tax refund related to payroll costs over a
multi-year period.
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=1028410.
An audio archive of this webcast will be available using the above noted
link through March 6, 2014.
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 owns and
operates petroleum product and crude gathering pipelines, tankage and
terminals in Texas, New Mexico, Arizona, Washington, Idaho, Oklahoma,
Utah, Wyoming and Kansas. In addition, the Partnership owns a 75%
interest in UNEV Pipeline, L.L.C., the owner of a Holly Energy operated
refined products pipeline running from Salt Lake City, Utah to Las
Vegas, Nevada, and related product terminals and a 25% interest in SLC
Pipeline, L.L.C., a 95-mile intrastate pipeline system serving
refineries in the Salt Lake City, Utah area.
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 31,000 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. A subsidiary of HollyFrontier also owns
a 39% interest (including the 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. Forward looking statements use words such
as "anticipate," "project," "expect," "plan," "goal," "forecast,"
"intend," "should," "would," "could," "believe," "may," and similar
expressions and statements regarding our plans and objectives for future
operations. 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. All statements concerning our expectations for future results
of operations are based on forecasts for our existing operations and do
not include the potential impact of any future acquisitions. Our
forward-looking statements are subject to a variety of risks,
uncertainties and assumptions. If one or more of these risks or
uncertainties materialize, or if underlying assumptions prove incorrect,
our actual results may vary materially from those anticipated,
estimated, projected or expected. Certain factors could cause actual
results to differ materially from results anticipated in the
forward-looking statements. These factors include, but are 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, Alon USA, Inc.
and our other customers;
-
the demand for refined petroleum products in markets we serve;
-
our ability to successfully purchase and integrate additional
operations in the future;
-
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 attacks and the consequences of any such
attacks;
-
general economic conditions; 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.
RESULTS OF OPERATIONS (Unaudited)
Income, Distributable Cash Flow and Volumes
The
following tables present income, distributable cash flow and volume
information for the three months and years ended December 31, 2013 and
2012.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
Change from
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
|
|
(In thousands, except per unit data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
$
|
15,523
|
|
|
|
$
|
20,955
|
|
|
|
$
|
(5,432
|
)
|
|
Affiliates - intermediate pipelines
|
|
|
|
5,367
|
|
|
|
|
7,463
|
|
|
|
|
(2,096
|
)
|
|
Affiliates - crude pipelines
|
|
|
|
11,990
|
|
|
|
|
12,044
|
|
|
|
|
(54
|
)
|
|
|
|
|
|
32,880
|
|
|
|
|
40,462
|
|
|
|
|
(7,582
|
)
|
|
Third parties - refined product pipelines
|
|
|
|
12,424
|
|
|
|
|
9,658
|
|
|
|
|
2,766
|
|
|
|
|
|
|
45,304
|
|
|
|
|
50,120
|
|
|
|
|
(4,816
|
)
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
29,267
|
|
|
|
|
28,700
|
|
|
|
|
567
|
|
|
Third parties
|
|
|
|
3,305
|
|
|
|
|
2,612
|
|
|
|
|
693
|
|
|
|
|
|
|
32,572
|
|
|
|
|
31,312
|
|
|
|
|
1,260
|
|
|
Total revenues
|
|
|
|
77,876
|
|
|
|
|
81,432
|
|
|
|
|
(3,556
|
)
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
27,355
|
|
|
|
|
24,129
|
|
|
|
|
3,226
|
|
|
Depreciation and amortization
|
|
|
|
16,693
|
|
|
|
|
14,660
|
|
|
|
|
2,033
|
|
|
General and administrative
|
|
|
|
3,003
|
|
|
|
|
1,669
|
|
|
|
|
1,334
|
|
|
|
|
|
|
47,051
|
|
|
|
|
40,458
|
|
|
|
|
6,593
|
|
|
Operating income
|
|
|
|
30,825
|
|
|
|
|
40,974
|
|
|
|
|
(10,149
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of SLC Pipeline
|
|
|
|
588
|
|
|
|
|
862
|
|
|
|
|
(274
|
)
|
|
Interest expense, including amortization
|
|
|
|
(11,081
|
)
|
|
|
|
(12,914
|
)
|
|
|
|
1,833
|
|
|
Interest income
|
|
|
|
51
|
|
|
|
|
—
|
|
|
|
|
51
|
|
|
Gain (loss) on sale of assets
|
|
|
|
(53
|
)
|
|
|
|
—
|
|
|
|
|
(53
|
)
|
|
Other income
|
|
|
|
—
|
|
|
|
|
10
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
(10,495
|
)
|
|
|
|
(12,042
|
)
|
|
|
|
1,547
|
|
|
Income before income taxes
|
|
|
|
20,330
|
|
|
|
|
28,932
|
|
|
|
|
(8,602
|
)
|
|
State income tax credit (expense)
|
|
|
|
108
|
|
|
|
|
(83
|
)
|
|
|
|
191
|
|
|
Net income
|
|
|
|
20,438
|
|
|
|
|
28,849
|
|
|
|
|
(8,411
|
)
|
|
Allocation of net loss attributable to Predecessors
|
|
|
|
-
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Allocation of net loss (income) attributable to noncontrolling
interests
|
|
|
|
(1,440
|
)
|
|
|
|
(1,810
|
)
|
|
|
|
370
|
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
18,998
|
|
|
|
|
27,039
|
|
|
|
|
(8,041
|
)
|
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
7,485
|
|
|
|
|
5,777
|
|
|
|
|
1,708
|
|
|
Limited partners' interest in net income
|
|
|
$
|
11,513
|
|
|
|
$
|
21,262
|
|
|
|
$
|
(9,749
|
)
|
|
Limited partners' earnings per unit - basic and diluted:(1) |
|
|
$
|
0.19
|
|
|
|
$
|
0.37
|
|
|
|
$
|
(0.18
|
)
|
|
Weighted average limited partners' units outstanding
|
|
|
|
58,657
|
|
|
|
|
56,782
|
|
|
|
|
1,875
|
|
|
EBITDA(2) |
|
|
$
|
46,613
|
|
|
|
$
|
54,696
|
|
|
|
$
|
(8,083
|
)
|
|
Distributable cash flow(3) |
|
|
$
|
34,263
|
|
|
|
$
|
41,618
|
|
|
|
$
|
(7,355
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
100,067
|
|
|
|
|
116,637
|
|
|
|
|
(16,570
|
)
|
|
Affiliates - intermediate pipelines
|
|
|
|
114,389
|
|
|
|
|
115,843
|
|
|
|
|
(1,454
|
)
|
|
Affiliates - crude pipelines
|
|
|
|
142,713
|
|
|
|
|
174,368
|
|
|
|
|
(31,655
|
)
|
|
|
|
|
|
357,169
|
|
|
|
|
406,848
|
|
|
|
|
(49,679
|
)
|
|
Third parties - refined product pipelines
|
|
|
|
74,098
|
|
|
|
|
65,688
|
|
|
|
|
8,410
|
|
|
|
|
|
|
431,267
|
|
|
|
|
472,536
|
|
|
|
|
(41,269
|
)
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
225,036
|
|
|
|
|
288,203
|
|
|
|
|
(63,167
|
)
|
|
Third parties
|
|
|
|
75,057
|
|
|
|
|
55,057
|
|
|
|
|
20,000
|
|
|
|
|
|
|
300,093
|
|
|
|
|
343,260
|
|
|
|
|
(43,167
|
)
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
731,360
|
|
|
|
|
815,796
|
|
|
|
|
(84,436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
Change from
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2012
|
|
|
|
|
(In thousands, except per unit data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
$
|
66,441
|
|
|
|
$
|
67,682
|
|
|
|
$
|
(1,241
|
)
|
|
Affiliates - intermediate pipelines
|
|
|
|
25,397
|
|
|
|
|
28,540
|
|
|
|
|
(3,143
|
)
|
|
Affiliates - crude pipelines
|
|
|
|
48,749
|
|
|
|
|
45,888
|
|
|
|
|
2,861
|
|
|
|
|
|
|
140,587
|
|
|
|
|
142,110
|
|
|
|
|
(1,523
|
)
|
|
Third parties - refined product pipelines
|
|
|
|
41,837
|
|
|
|
|
37,521
|
|
|
|
|
4,316
|
|
|
|
|
|
|
182,424
|
|
|
|
|
179,631
|
|
|
|
|
2,793
|
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
111,781
|
|
|
|
|
103,472
|
|
|
|
|
8,309
|
|
|
Third parties
|
|
|
|
10,977
|
|
|
|
|
9,457
|
|
|
|
|
1,520
|
|
|
|
|
|
|
122,758
|
|
|
|
|
112,929
|
|
|
|
|
9,829
|
|
|
Total revenues
|
|
|
|
305,182
|
|
|
|
|
292,560
|
|
|
|
|
12,622
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
99,444
|
|
|
|
|
89,242
|
|
|
|
|
10,202
|
|
|
Depreciation and amortization
|
|
|
|
65,423
|
|
|
|
|
57,461
|
|
|
|
|
7,962
|
|
|
General and administrative
|
|
|
|
11,749
|
|
|
|
|
7,594
|
|
|
|
|
4,155
|
|
|
|
|
|
|
176,616
|
|
|
|
|
154,297
|
|
|
|
|
22,319
|
|
|
Operating income
|
|
|
|
128,566
|
|
|
|
|
138,263
|
|
|
|
|
(9,697
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of SLC Pipeline
|
|
|
|
2,826
|
|
|
|
|
3,364
|
|
|
|
|
(538
|
)
|
|
Interest expense, including amortization
|
|
|
|
(47,010
|
)
|
|
|
|
(47,182
|
)
|
|
|
|
172
|
|
|
Interest income
|
|
|
|
161
|
|
|
|
|
—
|
|
|
|
|
161
|
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
(2,979
|
)
|
|
|
|
2,979
|
|
|
Gain on sale of assets
|
|
|
|
1,810
|
|
|
|
|
—
|
|
|
|
|
1,810
|
|
|
Other income
|
|
|
|
61
|
|
|
|
|
10
|
|
|
|
|
51
|
|
|
|
|
|
|
(42,152
|
)
|
|
|
|
(46,787
|
)
|
|
|
|
4,635
|
|
|
Income before income taxes
|
|
|
|
86,414
|
|
|
|
|
91,476
|
|
|
|
|
(5,062
|
)
|
|
State income tax expense
|
|
|
|
(333
|
)
|
|
|
|
(371
|
)
|
|
|
|
38
|
|
|
Net income
|
|
|
|
86,081
|
|
|
|
|
91,105
|
|
|
|
|
(5,024
|
)
|
|
Allocation of net loss attributable to Predecessors
|
|
|
|
—
|
|
|
|
|
4,200
|
|
|
|
|
(4,200
|
)
|
|
Allocation of net loss attributable to noncontrolling interests
|
|
|
|
(6,632
|
)
|
|
|
|
(1,153
|
)
|
|
|
|
(5,479
|
)
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
79,449
|
|
|
|
|
94,152
|
|
|
|
|
(14,703
|
)
|
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
(27,523
|
)
|
|
|
|
(22,450
|
)
|
|
|
|
(5,073
|
)
|
|
Limited partners' interest in net income
|
|
|
$
|
51,926
|
|
|
|
$
|
71,702
|
|
|
|
$
|
(19,776
|
)
|
|
Limited partners' earnings per unit - basic and diluted:(1) |
|
|
$
|
0.88
|
|
|
|
$
|
1.29
|
|
|
|
$
|
(0.41
|
)
|
|
Weighted average limited partners' units outstanding
|
|
|
|
58,246
|
|
|
|
|
55,696
|
|
|
|
|
2,550
|
|
|
EBITDA(2) |
|
|
$
|
192,054
|
|
|
|
$
|
194,242
|
|
|
|
$
|
(2,188
|
)
|
|
Distributable cash flow(3) |
|
|
$
|
146,579
|
|
|
|
$
|
153,125
|
|
|
|
$
|
(6,546
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
107,493
|
|
|
|
|
107,509
|
|
|
|
|
(16
|
)
|
|
Affiliates - intermediate pipelines
|
|
|
|
128,475
|
|
|
|
|
127,169
|
|
|
|
|
1,306
|
|
|
Affiliates - crude pipelines
|
|
|
|
161,391
|
|
|
|
|
171,040
|
|
|
|
|
(9,649
|
)
|
|
|
|
|
|
397,359
|
|
|
|
|
405,718
|
|
|
|
|
(8,359
|
)
|
|
Third parties - refined product pipelines
|
|
|
|
63,337
|
|
|
|
|
63,152
|
|
|
|
|
185
|
|
|
|
|
|
|
460,696
|
|
|
|
|
468,870
|
|
|
|
|
(8,174
|
)
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
255,108
|
|
|
|
|
271,549
|
|
|
|
|
(16,441
|
)
|
|
Third parties
|
|
|
|
63,791
|
|
|
|
|
53,456
|
|
|
|
|
10,335
|
|
|
|
|
|
|
318,899
|
|
|
|
|
325,005
|
|
|
|
|
(6,106
|
)
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
779,595
|
|
|
|
|
793,875
|
|
|
|
|
(14,280
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net income attributable to Holly Energy Partners is allocated
between limited partners and the general partner interest in accordance
with the provisions of the partnership agreement. Net income allocated
to the general partner includes incentive distributions declared
subsequent to quarter end. General partner incentive distributions were
$7.3 million and $5.3 million for the three months ended December 31,
2013 and 2012, respectively, and $26.5 million and $21.0 million for the
years ended December 31, 2013 and 2012, 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 (excluding
Predecessor amounts). EBITDA is not a calculation based upon GAAP.
However, the amounts included in the EBITDA calculation are derived from
amounts included in our consolidated financial statements. EBITDA should
not be considered 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. EBITDA is not necessarily comparable to similarly titled
measures of other companies. EBITDA is presented here because it is a
widely used financial indicator used by investors and analysts to
measure performance. EBITDA also is used by our management for internal
analysis and as a basis for compliance with financial covenants.
Set forth below is our calculation of EBITDA.
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
(In thousands)
|
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
18,998
|
|
|
|
$
|
27,039
|
|
|
|
$
|
79,449
|
|
|
|
$
|
94,152
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
10,551
|
|
|
|
|
11,111
|
|
|
|
|
44,041
|
|
|
|
|
40,141
|
|
|
Interest income
|
|
|
|
(51
|
)
|
|
|
|
—
|
|
|
|
|
(161
|
)
|
|
|
|
—
|
|
|
Amortization of discount and deferred debt charges
|
|
|
|
530
|
|
|
|
|
530
|
|
|
|
|
2,120
|
|
|
|
|
1,946
|
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2,979
|
|
|
Increase in interest expense - non-cash charges attributable to
interest rate swap settlement amortization
|
|
|
|
—
|
|
|
|
|
1,273
|
|
|
|
|
849
|
|
|
|
|
5,095
|
|
|
State income tax
|
|
|
|
(108
|
)
|
|
|
|
83
|
|
|
|
|
333
|
|
|
|
|
371
|
|
|
Depreciation and amortization
|
|
|
|
16,693
|
|
|
|
|
14,660
|
|
|
|
|
65,423
|
|
|
|
|
57,461
|
|
|
Predecessor depreciation and amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(7,903
|
)
|
|
EBITDA
|
|
|
$
|
46,613
|
|
|
|
$
|
54,696
|
|
|
|
$
|
192,054
|
|
|
|
$
|
194,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 also is 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.
Set forth below is our calculation of distributable cash flow.
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
(In thousands)
|
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
18,998
|
|
|
|
$
|
27,039
|
|
|
|
|
$
|
79,449
|
|
|
|
$
|
94,152
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
16,693
|
|
|
|
|
14,660
|
|
|
|
|
|
65,423
|
|
|
|
|
57,461
|
|
|
Predecessor depreciation and amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
(7,903
|
)
|
|
Amortization of discount and deferred debt charges
|
|
|
|
530
|
|
|
|
|
530
|
|
|
|
|
|
2,120
|
|
|
|
|
1,946
|
|
|
Increase in interest expense - non-cash charges attributable to
interest rate swap settlement amortization
|
|
|
|
—
|
|
|
|
|
1,273
|
|
|
|
|
|
849
|
|
|
|
|
5,095
|
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
2,979
|
|
|
Billed crude revenue settlement
|
|
|
|
—
|
|
|
|
|
918
|
|
|
|
|
|
918
|
|
|
|
|
3,670
|
|
|
Increase (decrease) in deferred revenue related to minimum revenue
commitments
|
|
|
|
62
|
|
|
|
|
(1,271
|
)
|
|
|
|
|
3,686
|
|
|
|
|
462
|
|
|
Maintenance capital expenditures*
|
|
|
|
(2,126
|
)
|
|
|
|
(1,763
|
)
|
|
|
|
|
(8,683
|
)
|
|
|
|
(5,649
|
)
|
|
Other non-cash adjustments
|
|
|
|
106
|
|
|
|
|
232
|
|
|
|
|
|
2,817
|
|
|
|
|
912
|
|
|
Distributable cash flow
|
|
|
$
|
34,263
|
|
|
|
$
|
41,618
|
|
|
|
|
$
|
146,579
|
|
|
|
$
|
153,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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, and
safety and to address environmental regulations.
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
(In thousands)
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
6,352
|
|
|
|
$
|
5,237
|
|
Working capital (deficit)
|
|
|
$
|
(6,604
|
)
|
|
|
$
|
11,826
|
|
Total assets
|
|
|
$
|
1,382,508
|
|
|
|
$
|
1,394,110
|
|
Long-term debt
|
|
|
$
|
807,630
|
|
|
|
$
|
864,674
|
|
Partners' equity(4) |
|
|
$
|
369,446
|
|
|
|
$
|
352,653
|
|
|
|
|
|
|
|
|
|
|
|
(4) 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 of $305.3 million would
have been recorded as increases to our properties and equipment and
intangible assets at the time of acquisition instead of decreases to
partners' equity.
Holly Energy Partners, L.P.
Douglas S. Aron, 214-954-6511
Executive
Vice President and
Chief Financial Officer
or
Julia
Heidenreich, 214-954-6511
Vice President, Investor Relations
or
Blake
Barfield, 214-954-6511
Investor Relations
Source: Holly Energy Partners, L.P.
News Provided by Acquire Media