DALLAS--(BUSINESS WIRE)--
Holly Energy Partners, L.P. ("HEP" or the "Partnership") (NYSE:HEP)
today reported financial results for the third quarter of 2016. Net
income attributable to Holly Energy Partners for the third quarter was
$34.8 million ($0.33 per basic and diluted limited partner unit)
compared to $34.3 million ($0.40 per basic and diluted limited partner
unit) for the third quarter of 2015.
Distributable cash flow was $49.3 million for the quarter, down $1.0
million, or 2% compared to the third quarter of 2015. HEP announced its
48thconsecutive distribution increase on October 21, 2016,
raising the quarterly distribution from $0.585 to $0.595 per unit, which
represents an increase of 7.2% over the distribution for the third
quarter of 2015.
The increase in earnings is primarily due to recent acquisitions
including interests in the Frontier, Osage, and Cheyenne pipelines, the
Tulsa crude tanks acquired in the first quarter of 2016, and the El
Dorado refinery process units dropped down in the fourth quarter of 2015
as well as increased revenues from our 75% interest in the UNEV products
pipeline offset by higher interest expense associated with our 6% Senior
Notes, which we issued in July in anticipation of our Woods Cross
processing units acquisition.
Commenting on the third quarter of 2016, George Damiris, Chief Executive
Officer, stated, "We are pleased with our solid financial performance in
the third quarter, which allowed us to maintain our record of continuous
quarterly distribution increases. Effective as of October 1, 2016, we
successfully completed our acquisition of an atmospheric distillation
tower, a fluid catalytic cracking unit, and a polymerization unit
located at the HollyFrontier Woods Cross refinery. The debt and equity
financing related to this acquisition impacted our third quarter
distributable cash flow coverage ratio, but as we begin to realize
expected EBITDA from this acquisition, we anticipate it will be
accretive to distributable cash flow in future quarters. Additionally,
we remain optimistic about organic growth across our existing systems.
We will continue to leverage our relationship with HollyFrontier and our
Mid-Continent, Rocky Mountains and Southwest logistics footprint to
generate new organic and external growth opportunities.
"Looking forward, we believe HEP is positioned to continue its growth
based on the quality and location of our assets, our talented employee
base, and our strong and supportive general partner, HollyFrontier."
Third Quarter 2016 Revenue Highlights
Revenues for the quarter were $92.6 million, an increase of $4.2 million
compared to the third quarter of 2015 primarily due to revenues from the
El Dorado processing units acquired in the fourth quarter of 2015 and
the inclusion of Tulsa crude tanks revenues. Overall pipeline volumes
were down 5% compared to the three months ended September 30, 2015,
largely due to lower crude pipeline volumes.
-
Revenues from our refined product pipelines were $30.4 million,
a decrease of $0.6 million compared to the third quarter of 2015
mainly due to lower tariff rates. Shipments averaged 201.5 mbpd
compared to 197.8 mbpd for the third quarter of 2015 mainly due to
increased throughput volumes on the UNEV pipeline.
-
Revenues from our intermediate pipelines were $6.6 million, a
decrease of $0.9 million, on shipments averaging 142.4 mbpd compared
to 148.8 mbpd for the third quarter of 2015. The lower revenues were
mainly due to lower volumes from pipelines servicing HFC's Navajo
refinery and a $0.4 million decrease in deferred revenue realized.
-
Revenues from our crude pipelines were $17.0 million, a
decrease of $0.4 million, on shipments averaging 271.3 mbpd compared
to 297.8 mbpd for the third quarter of 2015. Revenues decreased mainly
due to tariff decreases as we continued to recognize revenue on
minimum volume commitments.
-
Revenues from terminal, tankage and loading rack fees were
$34.4 million, an increase of $1.9 million compared to the third
quarter of 2015. Refined products terminalled in the facilities
averaged 505.8 mbpd compared to 509.7 mbpd for the third quarter of
2015. The volume decrease is mainly due to the transfer of the El Paso
terminal to HollyFrontier offset by the inclusion of volumes from our
Tulsa crude tanks acquired in the first quarter of 2016. Revenues
increased due to revenue from the Tulsa crude tanks.
Revenues for the three months ended September 30, 2016, include the
recognition of $0.2 million of prior shortfalls billed to shippers in
2015 as they did not meet their minimum volume commitments within the
contractual make-up period. As of September 30, 2016, shortfall deferred
revenue reflected in our consolidated balance sheet was $6.7 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.
Nine Months Ended September 30, 2016 Revenue Highlights
Revenues for the nine months ended September 30, 2016, were $289.5
million, an increase of $27.9 million compared to the nine months ended
September 30, 2015. This is due principally to increased revenues from
the El Dorado processing units, increased UNEV pipeline revenues,
increased revenues on our crude pipelines servicing HollyFrontier'sNavajo refinery, and the inclusion of Tulsa crude tanks revenues.
-
Revenues from our refined product pipelines were $101.2
million, an increase of $4.4 million mainly due to increased revenue
from the UNEV pipeline of $4.7 million in addition to increased
volumes and annual tariff increases partially offset by a $1.0 million
decrease in deferred revenue realized. Shipments averaged 204.1 mbpd
compared to 193.5 mbpd for the nine months ended September 30, 2015,
largely due to increased volumes from the UNEV and Woods Cross
pipelines.
-
Revenues from our intermediate pipelines were $20.8 million, a
decrease of $0.7 million, on shipments averaging 138.3 mbpd compared
to 143.4 mbpd for the nine months ended September 30, 2015. The
decrease in revenue was mainly due to lower volumes from pipelines
servicing HFC's Navajo refinery and a $0.4 million decrease in
deferred revenue realized.
-
Revenues from our crude pipelines were $53.1 million, an
increase of $3.6 million, on shipments averaging 279.0 mbpd compared
to 292.2 mbpd for the nine months ended September 30, 2015. Revenues
increased mainly due to an increase in deferred revenue recognized and
to a surcharge on our Beeson expansion.
-
Revenues from terminal, tankage and loading rack fees were
$101.5 million, an increase of $7.7 million compared to the nine
months ended September 30, 2015. Revenues increased due to increased
revenues from the El Dorado and Tulsa crude tanks and higher volumes
through the UNEV terminals. Refined products terminalled in the
facilities averaged 478.0 mbpd compared to 466.2 mbpd for the nine
months ended September 30, 2015. The volume increase is mainly due to
the inclusion of volumes from our Tulsa crude tanks acquired in the
first quarter of 2016 and our El Dorado crude tanks acquired late in
the first quarter of 2015 offset by the transfer of the El Paso
terminal to HFC in the first quarter of 2016.
Revenues for the nine months ended September 30, 2016, include the
recognition of $7.2 million of prior shortfalls billed to shippers in
2015, 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 $46.1 million and $138.5 million for
the three and nine months ended September 30, 2016, representing an
increase of $1.8 million and $4.8 million from the three and nine months
ended September 30, 2015. The increase for the nine months ended
September 30, 2016, is primarily due to operating expenses for our El
Dorado processing units acquired in the fourth quarter of 2015 and
higher depreciation expense partially offset by lower environmental
costs and maintenance project expenses.
Interest expense was $14.4 million and $36.3 million for the three and
nine months ended September 30, 2016, representing increases of $5.0
million and $8.9 million over the same periods of 2015. The increases
are due to issuance of our 6% Senior Notes in July 2016.
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=1120081.
An audio archive of this webcast will be available using the above noted
link through November 16, 2016.
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 gathering 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 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 37% 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. 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, 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 nine months ended September 30, 2016
and 2015.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
Change from
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2015
|
|
|
|
|
(In thousands, except per unit data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
$
|
19,227
|
|
|
|
$
|
19,945
|
|
|
|
$
|
(718
|
)
|
|
Affiliates - intermediate pipelines
|
|
|
|
6,628
|
|
|
|
|
7,488
|
|
|
|
|
(860
|
)
|
|
Affiliates - crude pipelines
|
|
|
|
17,034
|
|
|
|
|
17,393
|
|
|
|
|
(359
|
)
|
|
|
|
|
|
42,889
|
|
|
|
|
44,826
|
|
|
|
|
(1,937
|
)
|
|
Third parties - refined product pipelines
|
|
|
|
11,176
|
|
|
|
|
11,095
|
|
|
|
|
81
|
|
|
|
|
|
|
54,065
|
|
|
|
|
55,921
|
|
|
|
|
(1,856
|
)
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
30,322
|
|
|
|
|
28,890
|
|
|
|
|
1,432
|
|
|
Third parties
|
|
|
|
4,035
|
|
|
|
|
3,578
|
|
|
|
|
457
|
|
|
|
|
|
|
34,357
|
|
|
|
|
32,468
|
|
|
|
|
1,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refinery processing units
|
|
|
|
4,188
|
|
|
|
|
—
|
|
|
|
|
4,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
92,610
|
|
|
|
|
88,389
|
|
|
|
|
4,221
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
27,954
|
|
|
|
|
24,196
|
|
|
|
|
3,758
|
|
|
Depreciation and amortization
|
|
|
|
15,520
|
|
|
|
|
16,444
|
|
|
|
|
(924
|
)
|
|
General and administrative
|
|
|
|
2,664
|
|
|
|
|
3,673
|
|
|
|
|
(1,009
|
)
|
|
|
|
|
|
46,138
|
|
|
|
|
44,313
|
|
|
|
|
1,825
|
|
|
Operating income
|
|
|
|
46,472
|
|
|
|
|
44,076
|
|
|
|
|
2,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of equity method investments
|
|
|
|
3,767
|
|
|
|
|
1,269
|
|
|
|
|
2,498
|
|
|
Interest expense, including amortization
|
|
|
|
(14,447
|
)
|
|
|
|
(9,486
|
)
|
|
|
|
(4,961
|
)
|
|
Interest income
|
|
|
|
108
|
|
|
|
|
381
|
|
|
|
|
(273
|
)
|
|
Gain (loss) on sale of assets
|
|
|
|
112
|
|
|
|
|
176
|
|
|
|
|
(64
|
)
|
|
|
|
|
|
(10,460
|
)
|
|
|
|
(7,660
|
)
|
|
|
|
(2,800
|
)
|
|
Income before income taxes
|
|
|
|
36,012
|
|
|
|
|
36,416
|
|
|
|
|
(404
|
)
|
|
State income tax benefit (expense)
|
|
|
|
(61
|
)
|
|
|
|
(69
|
)
|
|
|
|
8
|
|
|
Net income
|
|
|
|
35,951
|
|
|
|
|
36,347
|
|
|
|
|
(396
|
)
|
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(1,166
|
)
|
|
|
|
(2,081
|
)
|
|
|
|
915
|
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
34,785
|
|
|
|
|
34,266
|
|
|
|
|
519
|
|
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
(15,222
|
)
|
|
|
|
(10,611
|
)
|
|
|
|
(4,611
|
)
|
|
Limited partners' interest in net income
|
|
|
$
|
19,563
|
|
|
|
$
|
23,655
|
|
|
|
$
|
(4,092
|
)
|
|
Limited partners' earnings per unit - basic and diluted:(1) |
|
|
$
|
0.33
|
|
|
|
$
|
0.40
|
|
|
|
$
|
(0.07
|
)
|
|
Weighted average limited partners' units outstanding
|
|
|
|
59,223
|
|
|
|
|
58,657
|
|
|
|
|
566
|
|
|
EBITDA(2) |
|
|
$
|
64,705
|
|
|
|
$
|
59,884
|
|
|
|
$
|
4,821
|
|
|
Distributable cash flow(3) |
|
|
$
|
49,257
|
|
|
|
$
|
50,306
|
|
|
|
$
|
(1,049
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
128,020
|
|
|
|
|
127,151
|
|
|
|
|
869
|
|
|
Affiliates - intermediate pipelines
|
|
|
|
142,417
|
|
|
|
|
148,753
|
|
|
|
|
(6,336
|
)
|
|
Affiliates - crude pipelines
|
|
|
|
271,278
|
|
|
|
|
297,810
|
|
|
|
|
(26,532
|
)
|
|
|
|
|
|
541,715
|
|
|
|
|
573,714
|
|
|
|
|
(31,999
|
)
|
|
Third parties - refined product pipelines
|
|
|
|
73,517
|
|
|
|
|
70,675
|
|
|
|
|
2,842
|
|
|
|
|
|
|
615,232
|
|
|
|
|
644,389
|
|
|
|
|
(29,157
|
)
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
437,560
|
|
|
|
|
431,843
|
|
|
|
|
5,717
|
|
|
Third parties
|
|
|
|
68,276
|
|
|
|
|
77,869
|
|
|
|
|
(9,593
|
)
|
|
|
|
|
|
505,836
|
|
|
|
|
509,712
|
|
|
|
|
(3,876
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates- refinery processing units
|
|
|
|
46,451
|
|
|
|
|
—
|
|
|
|
|
46,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
1,167,519
|
|
|
|
|
1,154,101
|
|
|
|
|
13,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
Change from
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2015
|
|
|
|
|
(In thousands, except per unit data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates—refined product pipelines
|
|
|
$
|
63,801
|
|
|
|
$
|
60,731
|
|
|
|
$
|
3,070
|
|
|
Affiliates—intermediate pipelines
|
|
|
|
20,821
|
|
|
|
|
21,522
|
|
|
|
|
(701
|
)
|
|
Affiliates—crude pipelines
|
|
|
|
53,106
|
|
|
|
|
49,483
|
|
|
|
|
3,623
|
|
|
|
|
|
|
137,728
|
|
|
|
|
131,736
|
|
|
|
|
5,992
|
|
|
Third parties—refined product pipelines
|
|
|
|
37,376
|
|
|
|
|
36,031
|
|
|
|
|
1,345
|
|
|
|
|
|
|
175,104
|
|
|
|
|
167,767
|
|
|
|
|
7,337
|
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
88,825
|
|
|
|
|
82,532
|
|
|
|
|
6,293
|
|
|
Third parties
|
|
|
|
12,718
|
|
|
|
|
11,325
|
|
|
|
|
1,393
|
|
|
|
|
|
|
101,543
|
|
|
|
|
93,857
|
|
|
|
|
7,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refinery processing units
|
|
|
|
12,870
|
|
|
|
|
—
|
|
|
|
|
12,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
289,517
|
|
|
|
|
261,624
|
|
|
|
|
27,893
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
82,131
|
|
|
|
|
77,661
|
|
|
|
|
4,470
|
|
|
Depreciation and amortization
|
|
|
|
47,780
|
|
|
|
|
46,421
|
|
|
|
|
1,359
|
|
|
General and administrative
|
|
|
|
8,618
|
|
|
|
|
9,659
|
|
|
|
|
(1,041
|
)
|
|
|
|
|
|
138,529
|
|
|
|
|
133,741
|
|
|
|
|
4,788
|
|
|
Operating income
|
|
|
|
150,988
|
|
|
|
|
127,883
|
|
|
|
|
23,105
|
|
|
Equity in earnings of equity method investments
|
|
|
|
10,155
|
|
|
|
|
2,634
|
|
|
|
|
7,521
|
|
|
Interest expense, including amortization
|
|
|
|
(36,258
|
)
|
|
|
|
(27,310
|
)
|
|
|
|
(8,948
|
)
|
|
Interest income
|
|
|
|
332
|
|
|
|
|
384
|
|
|
|
|
(52
|
)
|
|
Gain (loss) on sale of assets
|
|
|
|
104
|
|
|
|
|
406
|
|
|
|
|
(302
|
)
|
|
|
|
|
|
(25,667
|
)
|
|
|
|
(23,886
|
)
|
|
|
|
(1,781
|
)
|
|
Income before income taxes
|
|
|
|
125,321
|
|
|
|
|
103,997
|
|
|
|
|
21,324
|
|
|
State income tax expense
|
|
|
|
(210
|
)
|
|
|
|
(106
|
)
|
|
|
|
(104
|
)
|
|
Net income
|
|
|
|
125,111
|
|
|
|
|
103,891
|
|
|
|
|
21,220
|
|
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(8,448
|
)
|
|
|
|
(7,851
|
)
|
|
|
|
(597
|
)
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
116,663
|
|
|
|
|
96,040
|
|
|
|
|
20,623
|
|
|
General partner interest in net income, including incentive
distributions (1) |
|
|
|
(39,784
|
)
|
|
|
|
(30,186
|
)
|
|
|
|
(9,598
|
)
|
|
Limited partners' interest in net income
|
|
|
$
|
76,879
|
|
|
|
$
|
65,854
|
|
|
|
$
|
11,025
|
|
|
Limited partners' earnings per unit—basic and diluted (1) |
|
|
$
|
1.29
|
|
|
|
$
|
1.11
|
|
|
|
$
|
0.18
|
|
|
Weighted average limited partners' units outstanding
|
|
|
|
58,895
|
|
|
|
|
58,657
|
|
|
|
|
238
|
|
|
EBITDA (2) |
|
|
$
|
200,579
|
|
|
|
$
|
169,493
|
|
|
|
$
|
31,086
|
|
|
Distributable cash flow (3) |
|
|
$
|
160,331
|
|
|
|
$
|
143,495
|
|
|
|
$
|
16,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates—refined product pipelines
|
|
|
|
128,659
|
|
|
|
|
121,564
|
|
|
|
|
7,095
|
|
|
Affiliates—intermediate pipelines
|
|
|
|
138,346
|
|
|
|
|
143,361
|
|
|
|
|
(5,015
|
)
|
|
Affiliates—crude pipelines
|
|
|
|
279,014
|
|
|
|
|
292,158
|
|
|
|
|
(13,144
|
)
|
|
|
|
|
|
546,019
|
|
|
|
|
557,083
|
|
|
|
|
(11,064
|
)
|
|
Third parties—refined product pipelines
|
|
|
|
75,405
|
|
|
|
|
71,915
|
|
|
|
|
3,490
|
|
|
|
|
|
|
621,424
|
|
|
|
|
628,998
|
|
|
|
|
(7,574
|
)
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
404,393
|
|
|
|
|
389,209
|
|
|
|
|
15,184
|
|
|
Third parties
|
|
|
|
73,653
|
|
|
|
|
77,011
|
|
|
|
|
(3,358
|
)
|
|
|
|
|
|
478,046
|
|
|
|
|
466,220
|
|
|
|
|
11,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refinery processing units
|
|
|
|
46,423
|
|
|
|
|
—
|
|
|
|
|
46,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
1,145,893
|
|
|
|
|
1,095,218
|
|
|
|
|
50,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
(In thousands)
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
7,208
|
|
|
$
|
15,013
|
|
Working capital
|
|
|
$
|
903
|
|
|
$
|
12,218
|
|
Total assets
|
|
|
$
|
1,604,497
|
|
|
$
|
1,543,765
|
|
Long-term debt
|
|
|
$
|
1,070,615
|
|
|
$
|
1,008,752
|
|
Partners' equity(4) |
|
|
$
|
290,256
|
|
|
$
|
297,912
|
|
|
|
|
|
(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 $14.8 million and $10.3 million for the
three months ended September 30, 2016 and 2015, respectively, and
$38.4 million and $29.5 million for the nine months ended September
30, 2016 and 2015, 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 generally accepted accounting principles ("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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
(In thousands)
|
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
34,785
|
|
|
$
|
34,266
|
|
|
$
|
116,663
|
|
|
$
|
96,040
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
13,529
|
|
|
|
8,992
|
|
|
|
33,964
|
|
|
|
25,885
|
|
|
Interest Income
|
|
|
|
(108
|
)
|
|
|
(381
|
)
|
|
|
(332
|
)
|
|
|
(384
|
)
|
|
Amortization of discount and deferred debt charges
|
|
|
|
918
|
|
|
|
494
|
|
|
|
2,294
|
|
|
|
1,425
|
|
|
State income tax expense (benefit)
|
|
|
|
61
|
|
|
|
69
|
|
|
|
210
|
|
|
|
106
|
|
|
Depreciation and amortization
|
|
|
|
15,520
|
|
|
|
16,444
|
|
|
|
47,780
|
|
|
|
46,421
|
|
|
EBITDA
|
|
|
$
|
64,705
|
|
|
$
|
59,884
|
|
|
$
|
200,579
|
|
|
$
|
169,493
|
|
|
|
|
|
|
(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
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
(In thousands)
|
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
34,785
|
|
|
|
$
|
34,266
|
|
|
|
$
|
116,663
|
|
|
|
$
|
96,040
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
15,520
|
|
|
|
|
16,444
|
|
|
|
|
47,780
|
|
|
|
|
46,421
|
|
|
Amortization of discount and deferred debt charges
|
|
|
|
918
|
|
|
|
|
494
|
|
|
|
|
2,294
|
|
|
|
|
1,425
|
|
|
Increase (decrease) in deferred revenue attributable to shortfall
billings
|
|
|
|
1,748
|
|
|
|
|
1,152
|
|
|
|
|
(179
|
)
|
|
|
|
(1,043
|
)
|
|
Maintenance capital expenditures*
|
|
|
|
(3,475
|
)
|
|
|
|
(2,121
|
)
|
|
|
|
(7,797
|
)
|
|
|
|
(5,640
|
)
|
|
Increase (decrease) in environmental liability
|
|
|
|
(277
|
)
|
|
|
|
(526
|
)
|
|
|
|
(719
|
)
|
|
|
|
2,944
|
|
|
Increase (decrease) in reimbursable deferred revenue
|
|
|
|
(750
|
)
|
|
|
|
(321
|
)
|
|
|
|
(1,906
|
)
|
|
|
|
671
|
|
|
Other non-cash adjustments
|
|
|
|
788
|
|
|
|
|
918
|
|
|
|
|
4,195
|
|
|
|
|
2,677
|
|
|
Distributable cash flow
|
|
|
$
|
49,257
|
|
|
|
$
|
50,306
|
|
|
|
$
|
160,331
|
|
|
|
$
|
143,495
|
|
|
|
|
|
|
|
|
|
|
*
|
|
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.
|
|
|
|
|
|
(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 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/20161102005310/en/
Holly Energy Partners, L.P.
Richard L. Voliva III, 214-954-6511
Senior
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