DALLAS--(BUSINESS WIRE)--
Holly Energy Partners, L.P. ("HEP" or the "Partnership") (NYSE:HEP)
today reported financial results for the second quarter of 2015. For the
quarter, distributable cash flow was $47.3 million, up $3.8 million, or
9% compared to the second quarter of 2014. HEP announced its 43rdconsecutive
distribution increase on July 23, 2015, raising the quarterly
distribution from $0.5375 to $0.5450 per unit, which represents an
increase of nearly 6% over the distribution for the second quarter of
2014.
Net income attributable to Holly Energy Partners for the second quarter
was $30.4 million ($0.34 per basic and diluted limited partner unit)
compared to $23.0 million ($0.25 per basic and diluted limited partner
unit) for the second quarter of 2014. The increase in earnings is
primarily due to higher pipeline volumes and annual tariff increases.
Commenting on the second quarter of 2015, Mike Jennings, Chief Executive
Officer, stated, "We are pleased our financial results for the second
quarter of 2015 allowed us to maintain our record of raising quarterly
distributions. HEP's steady growth is supported by our fee-based
commercial structure with underlying long-term minimum commitments by
our key customers.
"We continue to leverage our logistic capabilities and HFC's refining
footprint to create unique third party acquisition opportunities like
our acquisition of the El Dorado crude tank farm in March 2015. We have
also identified potential dropdown assets including the naphtha
fractionation unit at HFC's El Dorado refinery and certain assets
related to the initial phase of the expansion at HFC's Woods Cross
refinery.
"I am optimistic about HEP's growth outlook given our talented
employees, high quality assets in traditionally favorable geographic
locations, and ongoing support from our general partner, HollyFrontier."
Second Quarter 2015 Revenue Highlights
Revenues for the quarter were $83.5 million, an increase of $8.5 million
compared to the second quarter of 2014 due to the effect of higher
pipeline volumes and annual tariff increases. Overall pipeline volumes
were up 31% compared to the three months ended June 30, 2014, largely
due to increased volumes from the New Mexico gathering system expansion
as well as lower volumes in the second quarter of 2014 resulting from
major maintenance performed at Alon's Big Spring refinery.
-
Revenues from our refined product pipelines were $29.5 million,
an increase of $4.4 million compared to the second quarter of 2014
primarily due to increased volumes and annual tariff increases.
Shipments averaged 195.6 mbpd compared to 163.2 mbpd for the second
quarter of 2014 largely due to lower volumes in the second quarter of
2014 resulting from major maintenance performed at Alon's Big Spring
refinery.
-
Revenues from our intermediate pipelines were $7.2 million, an
increase of $0.5 million, on shipments averaging 143.1 mbpd compared
to 143.4 mbpd for the second quarter of 2014. Revenues increased
mainly due to an increase in deferred revenue realized of $0.3 million.
-
Revenues from our crude pipelines were $15.1 million, an
increase of $2.1 million, on shipments averaging 295.8 mbpd compared
to 178.6 mbpd for the second quarter of 2014. Revenues increased
mainly due to a $2.1 million increase in revenue from the New Mexico
gathering system expansion. The increase in volumes is due to
increased crude production in the Artesia Basin as well as the
reversal of the Roadrunner pipeline, which made it possible for HFC to
purchase and HEP to transport crude volumes in excess of HFC refining
capacity.
-
Revenues from terminal, tankage and loading rack fees were
$31.8 million, an increase of $1.5 million compared to the second
quarter of 2014. Refined products terminalled in our facilities
averaged 360.5 mbpd compared to 325.8 mbpd for the second quarter of
2014 largely due to lower volumes in the second quarter of 2014
resulting from major maintenance performed at Alon's Big Spring
refinery. Revenues increased due to our first quarter 2015 acquisition
of an existing crude tank farm adjacent to HFC's El Dorado refinery as
well as increased volumes and annual tariff increases.
Revenues for the three months ended June 30, 2015, include the
recognition of $0.5 million of prior shortfalls billed to shippers in
2014 as they did not meet their minimum volume commitments within the
contractual make-up period. As of June 30, 2015, shortfall deferred
revenue in our consolidated balance sheet was $6.3 million. Such
deferred revenue will be recognized in earnings either as (a) payment
for shipments in excess of guaranteed levels, if and to the extent the
pipeline system has the necessary capacity for shipments in excess of
guaranteed levels, or (b) when shipping rights expire unused over the
contractual make-up period.
Six Months Ended June 30, 2015 Revenue Highlights
Revenues for the six months ended June 30, 2015, were $173.2 million, an
$11.2 million increase compared to the six months ended June 30, 2014.
This is due principally to the effect of annual tariff increases and
increased pipeline shipments largely due to increased volumes from the
New Mexico gathering system expansion.
-
Revenues from our refined product pipelines were $65.7 million,
an increase of $4.9 million primarily due to increased volumes and
annual tariff increases. Shipments averaged 191.3 mbpd compared to
176.3 mbpd for the six months ended June 30, 2014, largely due to
lower volumes in the second quarter of 2014 resulting from major
maintenance performed at Alon's Big Spring refinery as well as higher
spot volumes on our UNEV pipeline.
-
Revenues from our intermediate pipelines were $14.0 million, a
decrease of $0.6 million, on shipments averaging 140.6 mbpd compared
to 141.0 mbpd for the six months ended June 30, 2014. The decrease in
revenue is mainly due to the effects of a $0.7 million decrease in
deferred revenue realized.
-
Revenues from our crude pipelines were $32.1 million, an
increase of $6.4 million, on shipments averaging 289.3 mbpd compared
to 177.8 mbpd for the six months ended June 30, 2014. Revenues
increased due to the annual tariff increases and increased volume in
addition to $4.2 million in increased revenue from the New Mexico
gathering system expansion.
-
Revenues from terminal, tankage and loading rack fees were
$61.4 million, an increase of $0.4 million compared to the six months
ended June 30, 2014. This increase is due to annual fee increases and
increased terminal volumes. Refined products terminalled in our
facilities averaged 353.4 mbpd compared to 333.0 mbpd for the six
months ended June 30, 2014, largely due to lower volumes in the second
quarter of 2014 resulting from major maintenance performed at Alon's
Big Spring refinery.
Revenues for the six months ended June 30, 2015, include the recognition
of $8.0 million of prior shortfalls billed to shippers in 2014, as they
did not meet their minimum volume commitments within the contractual
make-up period.
Operating Costs and Expenses Highlights
Operating costs and expenses were $43.0 million and $89.0 million for
the three and the six months ended June 30, 2015, respectively,
representing an increase of $0.1 million from the three months ended
June 30, 2014, and an increase of $4.5 million from the six months ended
June 30, 2014. The increase for the six months ended June 30, 2015, is
primarily due to an increase in environmental remediation provisions of
$3.5 million and higher maintenance project expense.
Interest expense was $9.1 million and $17.8 million for the three and
the six months ended June 30, 2015, respectively, representing an
increase of $0.7 million and a decrease of $1.0 million over the same
periods of 2014. The increase for the three months ended June 30, 2015,
is due to an increase in borrowings under our credit agreement. The
decrease for the six months ended June 30, 2015, is principally due to
the early extinguishment of our 8.25% Senior Notes in March 2014.
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=1069898.
An audio archive of this webcast will be available using the above noted
link through August 18, 2015.
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, LLC, 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 LLC, 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 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 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 and the six months ended June 30, 2015 and
2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change from
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
(In thousands, except per unit data)
|
Revenues
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
$
|
18,245
|
|
|
$
|
17,536
|
|
|
$
|
709
|
|
Affiliates - intermediate pipelines
|
|
|
|
7,172
|
|
|
|
6,683
|
|
|
|
489
|
|
Affiliates - crude pipelines
|
|
|
|
15,096
|
|
|
|
13,032
|
|
|
|
2,064
|
|
|
|
|
|
40,513
|
|
|
|
37,251
|
|
|
|
3,262
|
|
Third parties - refined product pipelines
|
|
|
|
11,213
|
|
|
|
7,480
|
|
|
|
3,733
|
|
|
|
|
|
51,726
|
|
|
|
44,731
|
|
|
|
6,995
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
27,784
|
|
|
|
27,229
|
|
|
|
555
|
|
Third parties
|
|
|
|
3,969
|
|
|
|
3,038
|
|
|
|
931
|
|
|
|
|
|
31,753
|
|
|
|
30,267
|
|
|
|
1,486
|
|
Total revenues
|
|
|
|
83,479
|
|
|
|
74,998
|
|
|
|
8,481
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
Operations
|
|
|
|
25,289
|
|
|
|
24,567
|
|
|
|
722
|
|
Depreciation and amortization
|
|
|
|
15,063
|
|
|
|
15,882
|
|
|
|
(819
|
)
|
General and administrative
|
|
|
|
2,696
|
|
|
|
2,516
|
|
|
|
180
|
|
|
|
|
|
43,048
|
|
|
|
42,965
|
|
|
|
83
|
|
Operating income
|
|
|
|
40,431
|
|
|
|
32,033
|
|
|
|
8,398
|
|
|
|
|
|
|
|
|
|
Equity in earnings of SLC Pipeline
|
|
|
|
631
|
|
|
|
748
|
|
|
|
(117
|
)
|
Interest expense, including amortization
|
|
|
|
(9,056
|
)
|
|
|
(8,329
|
)
|
|
|
(727
|
)
|
Interest income
|
|
|
|
3
|
|
|
|
—
|
|
|
|
3
|
|
Other income
|
|
|
|
71
|
|
|
|
26
|
|
|
|
45
|
|
|
|
|
|
(8,351
|
)
|
|
|
(7,555
|
)
|
|
|
(796
|
)
|
Income before income taxes
|
|
|
|
32,080
|
|
|
|
24,478
|
|
|
|
7,602
|
|
State income tax benefit (expense)
|
|
|
|
64
|
|
|
|
(28
|
)
|
|
|
92
|
|
Net income
|
|
|
|
32,144
|
|
|
|
24,450
|
|
|
|
7,694
|
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(1,743
|
)
|
|
|
(1,416
|
)
|
|
|
(327
|
)
|
Net income attributable to Holly Energy Partners
|
|
|
|
30,401
|
|
|
|
23,034
|
|
|
|
7,367
|
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
(10,196
|
)
|
|
|
(8,393
|
)
|
|
|
(1,803
|
)
|
Limited partners' interest in net income
|
|
|
$
|
20,205
|
|
|
$
|
14,641
|
|
|
$
|
5,564
|
|
Limited partners' earnings per unit - basic and diluted:(1) |
|
|
$
|
0.34
|
|
|
$
|
0.25
|
|
|
$
|
0.09
|
|
Weighted average limited partners' units outstanding
|
|
|
|
58,657
|
|
|
|
58,657
|
|
|
|
—
|
|
EBITDA(2) |
|
|
$
|
54,453
|
|
|
$
|
47,273
|
|
|
$
|
7,180
|
|
Distributable cash flow(3) |
|
|
$
|
47,299
|
|
|
$
|
43,495
|
|
|
$
|
3,804
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
121,982
|
|
|
|
119,328
|
|
|
|
2,654
|
|
Affiliates - intermediate pipelines
|
|
|
|
143,140
|
|
|
|
143,396
|
|
|
|
(256
|
)
|
Affiliates - crude pipelines
|
|
|
|
295,793
|
|
|
|
178,564
|
|
|
|
117,229
|
|
|
|
|
|
560,915
|
|
|
|
441,288
|
|
|
|
119,627
|
|
Third parties - refined product pipelines
|
|
|
|
73,659
|
|
|
|
43,858
|
|
|
|
29,801
|
|
|
|
|
|
634,574
|
|
|
|
485,146
|
|
|
|
149,428
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
281,318
|
|
|
|
269,260
|
|
|
|
12,058
|
|
Third parties
|
|
|
|
79,133
|
|
|
|
56,563
|
|
|
|
22,570
|
|
|
|
|
|
360,451
|
|
|
|
325,823
|
|
|
|
34,628
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
995,025
|
|
|
|
810,969
|
|
|
|
184,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
Change from
|
|
|
|
2015
|
|
2014
|
|
2014
|
|
|
|
(In thousands, except per unit data)
|
Revenues
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
Affiliates—refined product pipelines
|
|
|
$
|
40,786
|
|
|
$
|
41,709
|
|
|
$
|
(923
|
)
|
Affiliates—intermediate pipelines
|
|
|
|
14,034
|
|
|
|
14,594
|
|
|
|
(560
|
)
|
Affiliates—crude pipelines
|
|
|
|
32,090
|
|
|
|
25,650
|
|
|
|
6,440
|
|
|
|
|
|
86,910
|
|
|
|
81,953
|
|
|
|
4,957
|
|
Third parties—refined product pipelines
|
|
|
|
24,936
|
|
|
|
19,098
|
|
|
|
5,838
|
|
|
|
|
|
111,846
|
|
|
|
101,051
|
|
|
|
10,795
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
53,642
|
|
|
|
54,359
|
|
|
|
(717
|
)
|
Third parties
|
|
|
|
7,747
|
|
|
|
6,592
|
|
|
|
1,155
|
|
|
|
|
|
61,389
|
|
|
|
60,951
|
|
|
|
438
|
|
Total revenues
|
|
|
|
173,235
|
|
|
|
162,002
|
|
|
|
11,233
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
Operations
|
|
|
|
53,255
|
|
|
|
47,379
|
|
|
|
5,876
|
|
Depreciation and amortization
|
|
|
|
29,757
|
|
|
|
31,470
|
|
|
|
(1,713
|
)
|
General and administrative
|
|
|
|
5,986
|
|
|
|
5,667
|
|
|
|
319
|
|
|
|
|
|
88,998
|
|
|
|
84,516
|
|
|
|
4,482
|
|
Operating income
|
|
|
|
84,237
|
|
|
|
77,486
|
|
|
|
6,751
|
|
Equity in earnings of SLC Pipeline
|
|
|
|
1,365
|
|
|
|
1,270
|
|
|
|
95
|
|
Interest expense, including amortization
|
|
|
|
(17,824
|
)
|
|
|
(18,783
|
)
|
|
|
959
|
|
Interest income
|
|
|
|
3
|
|
|
|
3
|
|
|
|
—
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
(7,677
|
)
|
|
|
7,677
|
|
Other
|
|
|
|
230
|
|
|
|
34
|
|
|
|
196
|
|
|
|
|
|
(16,226
|
)
|
|
|
(25,153
|
)
|
|
|
8,927
|
|
Income before income taxes
|
|
|
|
68,011
|
|
|
|
52,333
|
|
|
|
15,678
|
|
State income tax expense
|
|
|
|
(37
|
)
|
|
|
(103
|
)
|
|
|
66
|
|
Net income
|
|
|
|
67,974
|
|
|
|
52,230
|
|
|
|
15,744
|
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(5,770
|
)
|
|
|
(5,053
|
)
|
|
|
(717
|
)
|
Net income attributable to Holly Energy Partners
|
|
|
|
62,204
|
|
|
|
47,177
|
|
|
|
15,027
|
|
General partner interest in net income, including incentive
distributions (1) |
|
|
|
(20,006
|
)
|
|
|
(16,394
|
)
|
|
|
(3,612
|
)
|
Limited partners' interest in net income
|
|
|
$
|
42,198
|
|
|
$
|
30,783
|
|
|
$
|
11,415
|
|
Limited partners' earnings per unit—basic and diluted (1) |
|
|
$
|
0.71
|
|
|
$
|
0.52
|
|
|
$
|
0.19
|
|
Weighted average limited partners' units outstanding
|
|
|
|
58,657
|
|
|
|
58,657
|
|
|
|
—
|
|
EBITDA (2) |
|
|
$
|
109,819
|
|
|
$
|
105,207
|
|
|
$
|
4,612
|
|
Distributable cash flow (3) |
|
|
$
|
93,189
|
|
|
$
|
85,303
|
|
|
$
|
7,886
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
Affiliates—refined product pipelines
|
|
|
|
118,724
|
|
|
|
121,239
|
|
|
|
(2,515
|
)
|
Affiliates—intermediate pipelines
|
|
|
|
140,620
|
|
|
|
141,015
|
|
|
|
(395
|
)
|
Affiliates—crude pipelines
|
|
|
|
289,285
|
|
|
|
177,763
|
|
|
|
111,522
|
|
|
|
|
|
548,629
|
|
|
|
440,017
|
|
|
|
108,612
|
|
Third parties—refined product pipelines
|
|
|
|
72,546
|
|
|
|
55,014
|
|
|
|
17,532
|
|
|
|
|
|
621,175
|
|
|
|
495,031
|
|
|
|
126,144
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
276,823
|
|
|
|
265,966
|
|
|
|
10,857
|
|
Third parties
|
|
|
|
76,574
|
|
|
|
67,075
|
|
|
|
9,499
|
|
|
|
|
|
353,397
|
|
|
|
333,041
|
|
|
|
20,356
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
974,572
|
|
|
|
828,072
|
|
|
|
146,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
$9.8 million and $8.1 million for the three months ended June 30, 2015
and 2014, respectively, and $19.1 million and $15.8 million for the six
months ended June 30, 2015 and 2014, respectively.
(2) Earnings before interest, taxes, depreciation and amortization
("EBITDA") is calculated as net income attributable to Holly Energy
Partners plus (i) interest expense and loss on early extinguishment of
debt, net of interest income, (ii) state income tax and (iii)
depreciation and amortization. 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 June 30,
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
(In thousands)
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
30,401
|
|
|
$
|
23,034
|
|
$
|
62,204
|
|
|
$
|
47,177
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
8,562
|
|
|
|
7,893
|
|
|
16,894
|
|
|
|
17,836
|
|
Interest Income
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
(3
|
)
|
|
|
(3
|
)
|
Amortization of discount and deferred debt charges
|
|
|
|
494
|
|
|
|
436
|
|
|
930
|
|
|
|
947
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
7,677
|
|
State income tax (benefit) expense
|
|
|
|
(64
|
)
|
|
|
28
|
|
|
37
|
|
|
|
103
|
|
Depreciation and amortization
|
|
|
|
15,063
|
|
|
|
15,882
|
|
|
29,757
|
|
|
|
31,470
|
|
EBITDA
|
|
|
$
|
54,453
|
|
|
$
|
47,273
|
|
$
|
109,819
|
|
|
$
|
105,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
Set forth below is our calculation of distributable cash flow.
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
(In thousands)
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
30,401
|
|
|
$
|
23,034
|
|
|
$
|
62,204
|
|
|
$
|
47,177
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
15,063
|
|
|
|
15,882
|
|
|
|
29,757
|
|
|
|
31,470
|
|
Amortization of discount and deferred debt charges
|
|
|
|
494
|
|
|
|
436
|
|
|
|
930
|
|
|
|
947
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,677
|
|
Increase (decrease) in deferred revenue attributable to shortfall
billings
|
|
|
|
1,355
|
|
|
|
4,760
|
|
|
|
(2,195
|
)
|
|
|
(1,138
|
)
|
Maintenance capital expenditures*
|
|
|
|
(1,870
|
)
|
|
|
(842
|
)
|
|
|
(3,519
|
)
|
|
|
(1,691
|
)
|
Increase (decrease) in environmental liability
|
|
|
|
(386
|
)
|
|
|
(3
|
)
|
|
|
3,471
|
|
|
|
361
|
|
Increase (decrease) in reimbursable deferred revenue
|
|
|
|
1,537
|
|
|
|
(629
|
)
|
|
|
992
|
|
|
|
(1,211
|
)
|
Other non-cash adjustments
|
|
|
|
705
|
|
|
|
857
|
|
|
|
1,549
|
|
|
|
1,711
|
|
Distributable cash flow
|
|
|
$
|
47,299
|
|
|
$
|
43,495
|
|
|
$
|
93,189
|
|
|
$
|
85,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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.
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(In thousands)
|
Balance Sheet Data
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
10,424
|
|
$
|
2,830
|
Working capital
|
|
|
$
|
13,194
|
|
$
|
3,140
|
Total assets
|
|
|
$
|
1,425,243
|
|
$
|
1,401,555
|
Long-term debt
|
|
|
$
|
900,905
|
|
$
|
867,579
|
Partners' equity(4) |
|
|
$
|
300,940
|
|
$
|
320,362
|
|
|
|
|
|
|
|
|
(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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150804005367/en/
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
Craig
Biery, 214-954-6511
Investor Relations
Source: Holly Energy Partners, L.P.
News Provided by Acquire Media