DALLAS--(BUSINESS WIRE)--
Holly Energy Partners, L.P. ("HEP" or the "Partnership") (NYSE:HEP)
today reported financial results for the second quarter of 2017. Net
income attributable to HEP for the second quarter was $41.3 million
($0.36 per basic and diluted limited partner unit) compared to $39.1
million ($0.45 per basic and diluted limited partner unit) for the
second quarter of 2016.
Distributable cash flow was $60.9 million for the quarter, up $5.2
million, or 9.3% compared to the second quarter of 2016. HEP announced
its 51stconsecutive distribution increase on July 27, 2017,
raising the quarterly distribution from $0.62 to $0.6325 per unit, which
represents an increase of 8.1% over the distribution for the second
quarter of 2016, exceeding HEP's distribution growth target of 8%.
The increase in earnings is primarily due to increased operating income
from our Woods Cross refinery processing units of $4.5 million, offset
by higher interest expense of $2.5 million.
Commenting on 2017 second quarter results, George Damiris, Chief
Executive Officer, stated, "We are pleased with our solid financial
performance in the second quarter, which allowed us to maintain our
record of continuous quarterly distribution increases and achieve our
distribution growth target of 8%, while still maintaining a distribution
coverage ratio greater than 1.0. Looking forward, we will continue to
leverage our talented employee base, our relationship with HollyFrontier
and our Mid-Continent, Northwest and Southwest logistics footprint to
generate new organic and external growth opportunities."
Second Quarter 2017 Revenue Highlights
Revenues for the quarter were $109.1 million, an increase of $14.2
million compared to the second quarter of 2016. The increase is
primarily attributable to the $12.9 million of revenue recorded for the
Woods Cross processing units acquired in the fourth quarter of 2016.
Overall pipeline volumes were up 2% compared to the three months ended
June 30, 2016, largely due to an increase in intermediate pipeline
shipments.
-
Revenues from our refined product pipelines were $31.1 million,
an increase of $0.3 million compared to the second quarter of 2016 and
shipments averaged 206.0 mbpd compared to 199.9 mbpd for the second
quarter of 2016. Revenues and volumes both increased primarily due to
higher spot sales on our UNEV pipeline, offset by lower throughput on
the Alon system.
-
Revenues from our intermediate pipelines were $7.3 million, an
increase of $0.5 million, on shipments averaging 151.7 mbpd compared
to 135.2 mbpd for the second quarter of 2016. These volume increases
were principally due to (a) 10.8 mbpd increase on HollyFrontier
Corporation's ("HFC") Tulsa refinery interconnect lines and (b) 5.7
mbpd increase in HFC's Navajo refinery intermediate lines due to
increased refinery crude rate after their first quarter 2017
turnaround. These volume increases did not all translate to increased
revenue as there are minimum volume commitments on both sets of
intermediate pipelines.
-
Revenues from our crude pipelines were $16.9 million, a
decrease of $1.7 million, on shipments averaging 269.4 mbpd compared
to 278.4 mbpd for the second quarter of 2016. Revenues decreased
mainly due to a decrease in deferred revenue recognized.
-
Revenues from terminal, tankage and loading rack fees were
$36.4 million, an increase of $1.8 million compared to the second
quarter of 2016. Refined products terminalled in the facilities
averaged 529.0 mbpd compared to 489.6 mbpd for the second quarter of
2016. The volume and revenue increases are mainly due to increased
throughput at our Tulsa tankage and loading racks, Cheyenne loading
racks, and UNEV Pipeline, LLC terminals.
-
Revenues from refinery processing units were $17.5 million, an
increase of $13.4 million on throughputs averaging 67.3 mbpd compared
to 50.4 mbpd for the second quarter of 2016. This increase in revenue
and volume is primarily due to the Woods Cross refinery processing
units acquired in the fourth quarter of 2016.
Revenues for the three months ended June 30, 2017, include the
recognition of $0.6 million of prior shortfalls billed to shippers in
2016 as they did not exceed their minimum volume commitments within the
contractual make-up period. As of June 30, 2017, shortfall deferred
revenue reflected in our consolidated balance sheet was $8.0 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, 2017 Revenue Highlights
Revenues for the six months ended June 30, 2017, were $214.8 million, an
increase of $17.9 million compared to the six months ended June 20,
2016. The increase is primarily attributable to the $27.6 million of
revenue recorded for the Woods Cross refinery processing units acquired
in the fourth quarter of 2016, offset by a $7.9 million decrease in
revenues around assets serving HFC's Navajo refinery due to the
substantial turnaround at the Navajo refinery during the first quarter
of 2017.
-
Revenues from our refined product pipelines were $61.4 million,
a decrease of $9.4 million, on shipments averaging 199.2 mbpd compared
to 205.3 mbpd for the six months ended June 30, 2016. Revenues and
volumes both decreased mainly due to the turnaround at HFC's Navajo
refinery in the first quarter of 2017.
-
Revenues from our intermediate pipelines were $12.5 million, a
decrease of $1.7 million, on shipments averaging 128.1 mbpd compared
to 136.3 mbpd for the six months ended June 30, 2016. These volume
decreases were primarily due to the turnaround at HFC's Navajo
refinery, offset by increases on both the Tulsa and Navajo
interconnect lines.
-
Revenues from our crude pipelines were $33.8 million, a
decrease of $2.3 million, on shipments averaging 269.2 mbpd compared
to 282.9 mbpd for the six months ended June 30, 2016. Revenues and
volumes decreased principally due to HFC's Navajo refinery turnaround
in the first quarter of 2017 and a decrease in deferred revenue
recognized.
-
Revenues from terminal, tankage and loading rack fees were
$70.2 million, an increase of $3.0 million compared to the six months
ended June 30, 2016. Refined products terminalled in the facilities
averaged 487.0 mbpd compared to 464.0 mbpd for the six months ended
June 30, 2016. The volume and revenue increase are mainly due to our
Tulsa crude tanks acquired on the last day of the first quarter of
2016 offset by the transfer of the El Paso terminal to HollyFrontier
in the first quarter of 2016.
-
Revenues from refinery processing units were $36.9 million, an
increase of $28.2 million on throughputs averaging 65.1 mbpd compared
to 46.4 mbpd for the six months ended June 30, 2016. The increase in
revenue and volume is primarily due to the Woods Cross refinery
processing units acquired in the fourth quarter of 2016.
Revenues for the six months ended June 30, 2017, include the recognition
of $2.7 million of prior shortfalls billed to shippers in 2016 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 $56.7 million and $110.6 million for
the three and six months ended June 30, 2017, representing increases of
$8.9 million and $15.3 million from the three and six months ended June
30, 2016. The increases are primarily due to new operating costs and
expenses for our Woods Cross refinery processing units acquired in the
fourth quarter of 2016.
Interest expense was $13.7 million and $27.3 million for the three and
six months ended June 30, 2017, representing increases of $2.5 million
and $5.5 million over the same periods of 2016. The increases are due to
the offering of $400 million aggregate principal 6% senior notes in July
2016, higher average balances outstanding under our senior secured
revolving credit facility, and market interest rate increases.
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=1154339.
An audio archive of this webcast will be available using the above noted
link through August 15, 2017.
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 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. In addition, HollyFrontier, through its
subsidiary, 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 36% interest (including a 2%
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 six months ended June 30, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Change from
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2016
|
|
|
|
(In thousands, except per unit data)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
$
|
19,432
|
|
|
|
$
|
19,392
|
|
|
|
|
$
|
40
|
|
Affiliates - intermediate pipelines
|
|
|
|
7,250
|
|
|
|
|
6,780
|
|
|
|
|
|
470
|
|
Affiliates - crude pipelines
|
|
|
|
16,919
|
|
|
|
|
18,581
|
|
|
|
|
|
(1,662
|
)
|
|
|
|
|
43,601
|
|
|
|
|
44,753
|
|
|
|
|
|
(1,152
|
)
|
Third parties - refined product pipelines
|
|
|
|
11,647
|
|
|
|
|
11,434
|
|
|
|
|
|
213
|
|
|
|
|
|
55,248
|
|
|
|
|
56,187
|
|
|
|
|
|
(939
|
)
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
32,012
|
|
|
|
|
30,250
|
|
|
|
|
|
1,762
|
|
Third parties
|
|
|
|
4,344
|
|
|
|
|
4,285
|
|
|
|
|
|
59
|
|
|
|
|
|
36,356
|
|
|
|
|
34,535
|
|
|
|
|
|
1,821
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refinery processing units
|
|
|
|
17,539
|
|
|
|
|
4,175
|
|
|
|
|
|
13,364
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
109,143
|
|
|
|
|
94,897
|
|
|
|
|
|
14,246
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
34,097
|
|
|
|
|
29,212
|
|
|
|
|
|
4,885
|
|
Depreciation and amortization
|
|
|
|
19,945
|
|
|
|
|
15,712
|
|
|
|
|
|
4,233
|
|
General and administrative
|
|
|
|
2,615
|
|
|
|
|
2,863
|
|
|
|
|
|
(248
|
)
|
|
|
|
|
56,657
|
|
|
|
|
47,787
|
|
|
|
|
|
8,870
|
|
Operating income
|
|
|
|
52,486
|
|
|
|
|
47,110
|
|
|
|
|
|
5,376
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of equity method investments
|
|
|
|
4,053
|
|
|
|
|
3,623
|
|
|
|
|
|
430
|
|
Interest expense, including amortization
|
|
|
|
(13,748
|
)
|
|
|
|
(11,276
|
)
|
|
|
|
|
(2,472
|
)
|
Interest income
|
|
|
|
103
|
|
|
|
|
112
|
|
|
|
|
|
(9
|
)
|
Gain (loss) on sale of assets and other
|
|
|
|
89
|
|
|
|
|
—
|
|
|
|
|
|
89
|
|
|
|
|
|
(9,503
|
)
|
|
|
|
(7,541
|
)
|
|
|
|
|
(1,962
|
)
|
Income before income taxes
|
|
|
|
42,983
|
|
|
|
|
39,569
|
|
|
|
|
|
3,414
|
|
State income tax expense
|
|
|
|
(127
|
)
|
|
|
|
(54
|
)
|
|
|
|
|
(73
|
)
|
Net income
|
|
|
|
42,856
|
|
|
|
|
39,515
|
|
|
|
|
|
3,341
|
|
Allocation of net loss to Predecessor
|
|
|
|
—
|
|
|
|
|
1,960
|
|
|
|
|
|
(1,960
|
)
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(1,521
|
)
|
|
|
|
(2,355
|
)
|
|
|
|
|
834
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
41,335
|
|
|
|
|
39,120
|
|
|
|
|
|
2,215
|
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
(18,328
|
)
|
|
|
|
(12,677
|
)
|
|
|
|
|
(5,651
|
)
|
Limited partners' interest in net income
|
|
|
$
|
23,007
|
|
|
|
$
|
26,443
|
|
|
|
|
$
|
(3,436
|
)
|
Limited partners' earnings per unit - basic and diluted(1) |
|
|
$
|
0.36
|
|
|
|
$
|
0.45
|
|
|
|
|
$
|
(0.09
|
)
|
Weighted average limited partners' units outstanding
|
|
|
|
64,086
|
|
|
|
|
58,865
|
|
|
|
|
|
5,221
|
|
EBITDA(2) |
|
|
$
|
75,052
|
|
|
|
$
|
66,047
|
|
|
|
|
$
|
9,005
|
|
Distributable cash flow(3) |
|
|
$
|
60,908
|
|
|
|
$
|
55,709
|
|
|
|
|
$
|
5,199
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
134,357
|
|
|
|
|
125,535
|
|
|
|
|
|
8,822
|
|
Affiliates - intermediate pipelines
|
|
|
|
151,683
|
|
|
|
|
135,165
|
|
|
|
|
|
16,518
|
|
Affiliates - crude pipelines
|
|
|
|
269,418
|
|
|
|
|
278,414
|
|
|
|
|
|
(8,996
|
)
|
|
|
|
|
555,458
|
|
|
|
|
539,114
|
|
|
|
|
|
16,344
|
|
Third parties - refined product pipelines
|
|
|
|
71,612
|
|
|
|
|
74,386
|
|
|
|
|
|
(2,774
|
)
|
|
|
|
|
627,070
|
|
|
|
|
613,500
|
|
|
|
|
|
13,570
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
461,329
|
|
|
|
|
418,233
|
|
|
|
|
|
43,096
|
|
Third parties
|
|
|
|
67,657
|
|
|
|
|
71,415
|
|
|
|
|
|
(3,758
|
)
|
|
|
|
|
528,986
|
|
|
|
|
489,648
|
|
|
|
|
|
39,338
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refinery processing units
|
|
|
|
67,310
|
|
|
|
|
50,376
|
|
|
|
|
|
16,934
|
|
|
|
|
|
|
|
|
|
|
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
1,223,366
|
|
|
|
|
1,153,524
|
|
|
|
|
|
69,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
Change from
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2016
|
|
|
|
(In thousands, except per unit data)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates—refined product pipelines
|
|
|
$
|
37,176
|
|
|
|
$
|
44,574
|
|
|
|
|
$
|
(7,398
|
)
|
Affiliates—intermediate pipelines
|
|
|
|
12,534
|
|
|
|
|
14,193
|
|
|
|
|
|
(1,659
|
)
|
Affiliates—crude pipelines
|
|
|
|
33,800
|
|
|
|
|
36,072
|
|
|
|
|
|
(2,272
|
)
|
|
|
|
|
83,510
|
|
|
|
|
94,839
|
|
|
|
|
|
(11,329
|
)
|
Third parties—refined product pipelines
|
|
|
|
24,185
|
|
|
|
|
26,200
|
|
|
|
|
|
(2,015
|
)
|
|
|
|
|
107,695
|
|
|
|
|
121,039
|
|
|
|
|
|
(13,344
|
)
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
61,748
|
|
|
|
|
58,503
|
|
|
|
|
|
3,245
|
|
Third parties
|
|
|
|
8,415
|
|
|
|
|
8,683
|
|
|
|
|
|
(268
|
)
|
|
|
|
|
70,163
|
|
|
|
|
67,186
|
|
|
|
|
|
2,977
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refinery processing units
|
|
|
|
36,919
|
|
|
|
|
8,682
|
|
|
|
|
|
28,237
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
214,777
|
|
|
|
|
196,907
|
|
|
|
|
|
17,870
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
66,586
|
|
|
|
|
57,067
|
|
|
|
|
|
9,519
|
|
Depreciation and amortization
|
|
|
|
38,722
|
|
|
|
|
32,263
|
|
|
|
|
|
6,459
|
|
General and administrative
|
|
|
|
5,249
|
|
|
|
|
5,954
|
|
|
|
|
|
(705
|
)
|
|
|
|
|
110,557
|
|
|
|
|
95,284
|
|
|
|
|
|
15,273
|
|
Operating income
|
|
|
|
104,220
|
|
|
|
|
101,623
|
|
|
|
|
|
2,597
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of equity method investments
|
|
|
|
5,893
|
|
|
|
|
6,388
|
|
|
|
|
|
(495
|
)
|
Interest expense, including amortization
|
|
|
|
(27,287
|
)
|
|
|
|
(21,811
|
)
|
|
|
|
|
(5,476
|
)
|
Interest income
|
|
|
|
205
|
|
|
|
|
224
|
|
|
|
|
|
(19
|
)
|
Loss on early extinguishment of debt
|
|
|
|
(12,225
|
)
|
|
|
|
—
|
|
|
|
|
|
(12,225
|
)
|
Gain (loss) on sale of assets and other
|
|
|
|
162
|
|
|
|
|
(8
|
)
|
|
|
|
|
170
|
|
|
|
|
|
(33,252
|
)
|
|
|
|
(15,207
|
)
|
|
|
|
|
(18,045
|
)
|
Income before income taxes
|
|
|
|
70,968
|
|
|
|
|
86,416
|
|
|
|
|
|
(15,448
|
)
|
State income tax expense
|
|
|
|
(233
|
)
|
|
|
|
(149
|
)
|
|
|
|
|
(84
|
)
|
Net income
|
|
|
|
70,735
|
|
|
|
|
86,267
|
|
|
|
|
|
(15,532
|
)
|
Allocation of net loss to Predecessor
|
|
|
|
—
|
|
|
|
|
3,110
|
|
|
|
|
|
(3,110
|
)
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(3,837
|
)
|
|
|
|
(7,282
|
)
|
|
|
|
|
3,445
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
66,898
|
|
|
|
|
82,095
|
|
|
|
|
|
(15,197
|
)
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
(35,466
|
)
|
|
|
|
(24,779
|
)
|
|
|
|
|
(10,687
|
)
|
Limited partners' interest in net income
|
|
|
$
|
31,432
|
|
|
|
$
|
57,316
|
|
|
|
|
$
|
(25,884
|
)
|
Limited partners' earnings per unit—basic and diluted(1) |
|
|
$
|
0.49
|
|
|
|
$
|
0.96
|
|
|
|
|
$
|
(0.47
|
)
|
Weighted average limited partners' units outstanding
|
|
|
|
63,602
|
|
|
|
|
58,761
|
|
|
|
|
|
4,841
|
|
EBITDA(2) |
|
|
$
|
145,160
|
|
|
|
$
|
135,973
|
|
|
|
|
$
|
9,187
|
|
Distributable cash flow(3) |
|
|
$
|
118,197
|
|
|
|
$
|
111,075
|
|
|
|
|
$
|
7,122
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
120,886
|
|
|
|
|
128,983
|
|
|
|
|
|
(8,097
|
)
|
Affiliates - intermediate pipelines
|
|
|
|
128,143
|
|
|
|
|
136,288
|
|
|
|
|
|
(8,145
|
)
|
Affiliates - crude pipelines
|
|
|
|
269,155
|
|
|
|
|
282,923
|
|
|
|
|
|
(13,768
|
)
|
|
|
|
|
518,184
|
|
|
|
|
548,194
|
|
|
|
|
|
(30,010
|
)
|
Third parties - refined product pipelines
|
|
|
|
78,339
|
|
|
|
|
76,360
|
|
|
|
|
|
1,979
|
|
|
|
|
|
596,523
|
|
|
|
|
624,554
|
|
|
|
|
|
(28,031
|
)
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
418,365
|
|
|
|
|
387,628
|
|
|
|
|
|
30,737
|
|
Third parties
|
|
|
|
68,646
|
|
|
|
|
76,370
|
|
|
|
|
|
(7,724
|
)
|
|
|
|
|
487,011
|
|
|
|
|
463,998
|
|
|
|
|
|
23,013
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refinery processing units
|
|
|
|
65,082
|
|
|
|
|
46,409
|
|
|
|
|
|
18,673
|
|
|
|
|
|
|
|
|
|
|
|
|
Total for pipelines and terminal assets (bpd)
|
|
|
|
1,148,616
|
|
|
|
|
1,134,961
|
|
|
|
|
|
13,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(In thousands)
|
Balance Sheet Data
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
16,339
|
|
|
$
|
3,657
|
|
Working capital (deficit)
|
|
|
$
|
16,591
|
|
|
$
|
(7,782
|
)
|
Total assets
|
|
|
$
|
1,867,891
|
|
|
$
|
1,884,237
|
|
Long-term debt
|
|
|
$
|
1,236,739
|
|
|
$
|
1,243,912
|
|
Partners' equity(4) |
|
|
$
|
387,370
|
|
|
$
|
378,234
|
|
|
|
|
|
|
|
|
|
|
|
(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 $17.5 million and $12.1 million for
the three months ended June 30, 2017 and 2016, respectively, and
$34.1 million and $23.6 million for the six months ended June 30,
2017 and 2016, 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 June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(In thousands)
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
41,335
|
|
|
|
$
|
39,120
|
|
|
|
|
$
|
66,898
|
|
|
|
$
|
82,095
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
12,982
|
|
|
|
|
10,493
|
|
|
|
|
|
25,751
|
|
|
|
|
20,435
|
|
Interest Income
|
|
|
|
(103
|
)
|
|
|
|
(112
|
)
|
|
|
|
|
(205
|
)
|
|
|
|
(224
|
)
|
Amortization of discount and deferred debt charges
|
|
|
|
766
|
|
|
|
|
783
|
|
|
|
|
|
1,536
|
|
|
|
|
1,376
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
12,225
|
|
|
|
|
—
|
|
State income tax expense
|
|
|
|
127
|
|
|
|
|
54
|
|
|
|
|
|
233
|
|
|
|
|
149
|
|
Depreciation and amortization
|
|
|
|
19,945
|
|
|
|
|
15,712
|
|
|
|
|
|
38,722
|
|
|
|
|
32,263
|
|
Predecessor depreciation and amortization
|
|
|
|
—
|
|
|
|
|
(3
|
)
|
|
|
|
|
—
|
|
|
|
|
(121
|
)
|
EBITDA
|
|
|
$
|
75,052
|
|
|
|
$
|
66,047
|
|
|
|
|
$
|
145,160
|
|
|
|
$
|
135,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(In thousands)
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
41,335
|
|
|
|
$
|
39,120
|
|
|
|
|
$
|
66,898
|
|
|
|
$
|
82,095
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
19,945
|
|
|
|
|
15,712
|
|
|
|
|
|
38,722
|
|
|
|
|
32,263
|
|
Amortization of discount and deferred debt charges
|
|
|
|
766
|
|
|
|
|
783
|
|
|
|
|
|
1,536
|
|
|
|
|
1,376
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
12,225
|
|
|
|
|
—
|
|
Increase (decrease) in deferred revenue attributable to shortfall
billings
|
|
|
|
1,524
|
|
|
|
|
1,731
|
|
|
|
|
|
2,701
|
|
|
|
|
(1,927
|
)
|
Maintenance capital expenditures*
|
|
|
|
(2,242
|
)
|
|
|
|
(2,661
|
)
|
|
|
|
|
(3,067
|
)
|
|
|
|
(4,322
|
)
|
Decrease in environmental liability
|
|
|
|
(313
|
)
|
|
|
|
(113
|
)
|
|
|
|
|
(559
|
)
|
|
|
|
(442
|
)
|
Decrease in reimbursable deferred revenue
|
|
|
|
(923
|
)
|
|
|
|
(628
|
)
|
|
|
|
|
(1,848
|
)
|
|
|
|
(1,155
|
)
|
Other non-cash adjustments
|
|
|
|
816
|
|
|
|
|
1,768
|
|
|
|
|
|
1,589
|
|
|
|
|
3,308
|
|
Predecessor depreciation and amortization
|
|
|
|
—
|
|
|
|
|
(3
|
)
|
|
|
|
|
—
|
|
|
|
|
(121
|
)
|
Distributable cash flow
|
|
|
$
|
60,908
|
|
|
|
$
|
55,709
|
|
|
|
|
$
|
118,197
|
|
|
|
$
|
111,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
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/20170801005433/en/
Holly Energy Partners, L.P.
Richard L. Voliva III, 214-954-6511
Executive
Vice President and
Chief Financial Officer
or
Craig
Biery, 214-954-6511
Director, Investor Relations
Source: Holly Energy Partners, L.P.
News Provided by Acquire Media