DALLAS--(BUSINESS WIRE)--
Holly Energy Partners, L.P. ("HEP" or the "Partnership") (NYSE:HEP)
today reported financial results for the fourth quarter of 2017. Net
income attributable to Holly Energy Partners for the fourth quarter was
$86.1 million ($0.96 per basic and diluted limited partner unit)
compared to $41.4 million ($0.40 per basic and diluted limited partner
unit) for the fourth quarter of 2016.
Distributable cash flow was $65.5 million, an increase of $7.0 million,
or 12% compared to the fourth quarter of 2016. HEP announced its 53rdconsecutive distribution increase on January 26, 2018, raising the
quarterly distribution from $0.645 to $0.650 per unit, representing a 7%
increase over the distribution for the fourth quarter of 2016.
HEP acquired the remaining interests in the SLC and Frontier pipelines
in the fourth quarter, and the fourth quarter results reflect a gain of
$36.3 million related to the remeasurement to acquisition date fair
value of HEP's preexisting equity interests in those companies.
Excluding this gain, net income attributable to Holly Energy Partners
for the quarter was $49.8 million ($0.56 per basic and diluted limited
partner unit), an increase of $8.5 million compared to the same period
of 2016. This increase in earnings is primarily due to higher pipeline
throughputs and revenues as well as increased earnings related to the
acquisition of the remaining interests in the SLC and Frontier pipelines.
Commenting on the fourth quarter of 2017, George Damiris, Chief
Executive Officer, stated, "We are pleased with our solid financial
performance in the fourth quarter, which allowed us to maintain our
record of continuous quarterly distribution increases. We expect to
continue to grow the distribution at a rate of 4% in 2018 while
maintaining an average coverage ratio of 1.0x for the year.
"The fourth quarter was eventful as we completed the acquisition of the
remaining interests in the SLC and Frontier pipelines and eliminated the
general partner's incentive distribution rights and the economic general
partner interest. Volumes on the SLC and Frontier pipelines have been
strong, and we plan to expand these lines later this year.
"The issuance of additional equity in a February private placement
funded the majority of HEP's equity needs for 2018 and strongly enhances
HEP's ability to pursue growth opportunities and manage its business
over the long-term. Looking forward, we will continue to leverage our
talented employee base, our strong relationship with HollyFrontier, and
our Mid-Continent, Northwest and Southwest logistics footprint to
generate new organic and external growth opportunities."
Fourth Quarter 2017 Revenue Highlights
Revenues for the quarter were $129.2 million, an increase of $16.7
million compared to the fourth quarter of 2016. The revenue increase was
mainly due to our fourth quarter of 2017 acquisition of the remaining
interests in the SLC and Frontier pipelines and higher intermediate and
refined product pipeline volumes. Overall pipeline volumes increased 30%
compared to the fourth quarter of 2016.
-
Revenues from our refined product pipelines were $39.5 million,
an increase of $5.4 million, and shipments averaged 231.2 thousand
barrels per day ("mbpd") compared to 204.0 mbpd for the fourth quarter
of 2016. Revenues and volumes both increased primarily due to higher
shipments on our New Mexico refined product pipelines, in line with
increased production at HFC's Navajo refinery, and higher shipments on
our UNEV pipeline. In addition, revenue increased due to higher
recognition of previously deferred revenue.
-
Revenues from our intermediate pipelines were $8.4 million, an
increase of $2.2 million, on shipments averaging 158.1 mbpd compared
to 134.5 mbpd for the fourth quarter of 2016. These revenue and volume
increases were principally due to increased shipments on our New
Mexico intermediate pipelines in line with increased production at
HFC's Navajo refinery.
-
Revenues from our crude pipelines were $25.4 million, an
increase of $8.1 million, on shipments averaging 404.4 mbpd compared
to 272.0 mbpd for the fourth quarter of 2016. Revenues increased
mainly due to our fourth quarter 2017 acquisition of the remaining
interests in the SLC and Frontier pipelines. Volumes were higher due
to the acquisition as well as higher throughput at HFC's Navajo
refinery.
-
Revenues from terminal, tankage and loading rack fees were
$36.6 million, an increase of $1.7 million compared to the fourth
quarter of 2016. The increase in revenue is mainly due to higher
throughput at our UNEV terminals as well as higher reimbursable
revenue related to tank inspections and repairs. Refined products and
crude terminalled in our facilities increased to an average of 516.9
mbpd compared to 509.0 mbpd for the fourth quarter of 2016.
-
Revenues from refinery processing units were $19.4 million, a
decrease of $0.8 million on throughputs averaging 62.7 mbpd compared
to 67.7 mbpd for the fourth quarter of 2016. This decrease in revenue
is largely due to lower throughputs on our El Dorado refinery
processing units.
Revenues for the three months ended December 31, 2017, included the
recognition of $6.2 million of prior shortfalls billed to shippers in
2016 and 2017, as they did not meet their minimum volume commitments
within the contractual make-up period. As of December 31, 2017, deferred
revenue on our consolidated balance sheet related to shortfalls billed
was $4.0 million.
Year Ended December 31, 2017 Revenue Highlights
Revenues for the year ended December 31, 2017, were $454.4 million, a
$52.3 million increase compared to the year ended December 31, 2016. The
revenue increase was primarily attributable to $43.5 million higher
revenues from the Woods Cross refinery processing units acquired in the
fourth quarter of 2016 as well as revenues from the acquisition of the
remaining interests in the SLC and Frontier pipelines in the fourth
quarter of 2017.
-
Revenues from our refined product pipelines were $132.4
million, a decrease of $2.9 million, on shipments averaging 211.8 mbpd
compared to 204.0 mbpd for the year ended December 31, 2016. The
decrease in revenue is primarily due to lower volumes on refined
product pipelines due to the turnaround at HFC's Navajo refinery in
the first quarter of 2017 as well as a decrease of $2.3 million in
previously deferred revenue realized. The increase in volumes is
primarily due to higher volumes on relatively short pipelines with
lower tariff rates.
-
Revenues from our intermediate pipelines were $28.7 million, an
increase of $1.7 million, on shipments averaging 141.6 mbpd compared
to 137.4 mbpd for the year ended December 31, 2016. The increase in
revenue is primarily due to higher volumes from HFC's Navajo refinery
after its turnaround in the first quarter of 2017 as well as an
increase in the amount of deferred revenue recognized for the full
year of 2017.
-
Revenues from our crude pipelines were $73.9 million, an
increase of $3.6 million, on shipments averaging 302.9 mbpd compared
to 277.2 mbpd for the year ended December 31, 2016. Revenues and
volumes increased mainly due to revenues from the fourth quarter of
2017 acquisition of the remaining interests in the SLC and Frontier
pipelines offset by lower throughput due to HFC's Navajo refinery
turnaround in the first quarter of 2017.
-
Revenues from terminal, tankage and loading rack fees were
$142.4 million, an increase of $6.1 million compared to the year ended
December 31, 2016. Refined products and crude terminalled in our
facilities increased to an average of 496.7 mbpd compared to 485.8
mbpd for the year ended December 31, 2016. The volume and revenue
increases are mainly due to our Tulsa crude tanks acquired on the last
day of the first quarter of 2016, higher throughput on the UNEV
terminals and higher reimbursable revenue related to tank inspections
and repairs, offset by the transfer of the El Paso terminal to
HollyFrontier in the first quarter of 2016.
-
Revenues from refinery processing units were $76.9 million, an
increase of $43.9 million on throughputs averaging 63.6 mbpd compared
to 51.8 mbpd for 2016. The increase in revenues and volumes is
primarily due to the Woods Cross refinery processing units acquired in
the fourth quarter of 2016.
Revenues for the year ended December 31, 2017, include the recognition
of $9.7 million of prior shortfalls billed to shippers in 2016 and 2017.
Operating Costs and Expenses Highlights
Operating costs and expenses were $62.0 million and $231.2 million for
the three months and year ended December 31, 2017, respectively,
representing increases of $4.0 million and $24.3 million over the
respective periods of 2016. The increase for the year ended December 31,
2017, is mainly due to the operating costs for the Woods Cross refinery
processing units acquired in the fourth quarter of 2016.
Interest expense was $17.1 million and $58.4 million for the three
months and year ended December 31, 2017, representing increases of $0.8
million and $5.9 million over the same periods of 2016. The increases
are mainly 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 during 2017, 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=1177984&tp_key=1318d4fcc7.
An audio archive of this webcast will be available using the above noted
link through March 6, 2018.
About Holly Energy Partners, L.P.
Holly Energy Partners, L.P., headquartered in Dallas, Texas, provides
petroleum product and crude oil transportation, terminalling, storage
and throughput services to the petroleum industry, including
HollyFrontier Corporation subsidiaries. The Partnership, through its
subsidiaries and joint ventures, owns and/or operates petroleum product
and crude pipelines, tankage and terminals in Texas, New Mexico,
Arizona, Washington, Idaho, Oklahoma, Utah, Nevada, Wyoming and Kansas
as well as refinery processing units in Utah and Kansas.
HollyFrontier Corporation, headquartered in Dallas, Texas, is an
independent petroleum refiner and marketer that produces high value
light products such as gasoline, diesel fuel, jet fuel and other
specialty products. HollyFrontier operates through its subsidiaries a
135,000 barrels-per-stream-day ("bpsd") refinery located in El Dorado,
Kansas, a 125,000 bpsd refinery in Tulsa, Oklahoma, a 100,000 bpsd
refinery located in Artesia, New Mexico, a 52,000 bpsd refinery located
in Cheyenne, Wyoming, and a 45,000 bpsd refinery in Woods Cross, Utah.
HollyFrontier markets its refined products principally in the Southwest
U.S., the Rocky Mountains extending into the Pacific Northwest and in
other neighboring Plains states. Additionally, HollyFrontier owns
Petro-Canada Lubricants Inc. whose Mississauga, Ontario facility
produces 15,600 BPD of base oils and other specialized lubricant
products. As of February 20, 2018, a subsidiary of HollyFrontier also
owns a 57% limited partner interest and the non-economic general partner
interest in Holly Energy Partners, L.P.
The statements in this press release relating to matters that are not
historical facts are "forward-looking statements" within the meaning of
the federal securities laws. These statements are based on our beliefs
and assumptions and those of our general partner using currently
available information and expectations as of the date hereof, are not
guarantees of future performance and involve certain risks and
uncertainties. Although we and our general partner believe that such
expectations reflected in such forward-looking statements are
reasonable, neither we nor our general partner can give assurance that
our expectations will prove to be correct. Therefore, actual outcomes
and results could materially differ from what is expressed, implied or
forecast in these statements. Any differences could be caused by a
number of factors including, but not limited to:
-
risks and uncertainties with respect to the actual quantities of
petroleum products and crude oil shipped on our pipelines and/or
terminalled, stored and throughput in our terminals;
-
the economic viability of HollyFrontier Corporation, Delek US
Holdings, Inc. and our other customers;
-
the demand for refined petroleum products in markets we serve;
-
our ability to purchase and integrate future acquired operations;
-
our ability to complete previously announced or contemplated
acquisitions;
-
the availability and cost of additional debt and equity financing;
-
the possibility of reductions in production or shutdowns at refineries
utilizing our pipeline and terminal facilities;
-
the effects of current and future government regulations and policies;
-
our operational efficiency in carrying out routine operations and
capital construction projects;
-
the possibility of terrorist attacks and the consequences of any such
attacks;
-
general economic conditions;
-
the impact of recent changes in tax laws and regulations that affect
master limited partnerships; and
-
other financial, operations and legal risks and uncertainties detailed
from time to time in our Securities and Exchange Commission filings.
The forward-looking statements speak only as of the date made and, other
than as required by law, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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, 2017 and
2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
Change from
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2016
|
|
|
|
|
(In thousands, except per unit data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
$
|
22,053
|
|
|
|
$
|
19,301
|
|
|
|
|
$
|
2,752
|
|
|
Affiliates - intermediate pipelines
|
|
|
|
8,366
|
|
|
|
|
6,175
|
|
|
|
|
|
2,191
|
|
|
Affiliates - crude pipelines
|
|
|
|
18,070
|
|
|
|
|
17,235
|
|
|
|
|
|
835
|
|
|
|
|
|
|
48,489
|
|
|
|
|
42,711
|
|
|
|
|
|
5,778
|
|
|
Third parties - refined product pipelines
|
|
|
|
17,481
|
|
|
|
|
14,819
|
|
|
|
|
|
2,662
|
|
|
Third parties - crude pipelines
|
|
|
|
7,301
|
|
|
|
|
—
|
|
|
|
|
|
7,301
|
|
|
|
|
|
|
73,271
|
|
|
|
|
57,530
|
|
|
|
|
|
15,741
|
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
31,937
|
|
|
|
|
30,808
|
|
|
|
|
|
1,129
|
|
|
Third parties
|
|
|
|
4,618
|
|
|
|
|
4,014
|
|
|
|
|
|
604
|
|
|
|
|
|
|
36,555
|
|
|
|
|
34,822
|
|
|
|
|
|
1,733
|
|
|
Affiliates - refinery processing units
|
|
|
|
19,395
|
|
|
|
|
20,174
|
|
|
|
|
|
(779
|
)
|
|
Total revenues
|
|
|
|
129,221
|
|
|
|
|
112,526
|
|
|
|
|
|
16,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Operations (exclusive of depreciation and amortization)
|
|
|
|
35,021
|
|
|
|
|
34,818
|
|
|
|
|
|
203
|
|
|
Depreciation and amortization
|
|
|
|
21,549
|
|
|
|
|
19,245
|
|
|
|
|
|
2,304
|
|
|
General and administrative
|
|
|
|
5,451
|
|
|
|
|
3,914
|
|
|
|
|
|
1,537
|
|
|
|
|
|
|
62,021
|
|
|
|
|
57,977
|
|
|
|
|
|
4,044
|
|
|
Operating income
|
|
|
|
67,200
|
|
|
|
|
54,549
|
|
|
|
|
|
12,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of equity method investments
|
|
|
|
1,545
|
|
|
|
|
4,058
|
|
|
|
|
|
(2,513
|
)
|
|
Interest expense, including amortization
|
|
|
|
(17,089
|
)
|
|
|
|
(16,294
|
)
|
|
|
|
|
(795
|
)
|
|
Interest income
|
|
|
|
185
|
|
|
|
|
108
|
|
|
|
|
|
77
|
|
|
Remeasurement gain on preexisting equity investments
|
|
|
|
36,254
|
|
|
|
|
—
|
|
|
|
|
|
36,254
|
|
|
Gain (loss) on sale of assets and other income
|
|
|
|
105
|
|
|
|
|
574
|
|
|
|
|
|
(469
|
)
|
|
|
|
|
|
21,000
|
|
|
|
|
(11,554
|
)
|
|
|
|
|
32,554
|
|
|
Income before income taxes
|
|
|
|
88,200
|
|
|
|
|
42,995
|
|
|
|
|
|
45,205
|
|
|
State income tax (expense) benefit
|
|
|
|
(85
|
)
|
|
|
|
(76
|
)
|
|
|
|
|
(9
|
)
|
|
Net income
|
|
|
|
88,115
|
|
|
|
|
42,919
|
|
|
|
|
|
45,196
|
|
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(2,044
|
)
|
|
|
|
(1,558
|
)
|
|
|
|
|
(486
|
)
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
86,071
|
|
|
|
|
41,361
|
|
|
|
|
|
44,710
|
|
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
—
|
|
|
|
|
(17,172
|
)
|
|
|
|
|
17,172
|
|
|
Limited partners' interest in net income
|
|
|
$
|
86,071
|
|
|
|
$
|
24,189
|
|
|
|
|
$
|
61,882
|
|
|
Limited partners' earnings per unit - basic and diluted:(1) |
|
|
$
|
0.96
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
0.56
|
|
|
Weighted average limited partners' units outstanding
|
|
|
|
89,422
|
|
|
|
|
62,781
|
|
|
|
|
|
26,641
|
|
|
EBITDA(2) |
|
|
$
|
124,609
|
|
|
|
$
|
76,868
|
|
|
|
|
$
|
47,741
|
|
|
Distributable cash flow(3) |
|
|
$
|
65,520
|
|
|
|
$
|
58,479
|
|
|
|
|
$
|
7,041
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
150,470
|
|
|
|
|
126,594
|
|
|
|
|
|
23,876
|
|
|
Affiliates - intermediate pipelines
|
|
|
|
158,058
|
|
|
|
|
134,509
|
|
|
|
|
|
23,549
|
|
|
Affiliates - crude pipelines
|
|
|
|
317,762
|
|
|
|
|
271,962
|
|
|
|
|
|
45,800
|
|
|
|
|
|
|
626,290
|
|
|
|
|
533,065
|
|
|
|
|
|
93,225
|
|
|
Third parties - refined product pipelines
|
|
|
|
80,683
|
|
|
|
|
77,410
|
|
|
|
|
|
3,273
|
|
|
Third parties - crude pipelines
|
|
|
|
86,623
|
|
|
|
|
—
|
|
|
|
|
|
86,623
|
|
|
|
|
|
|
793,596
|
|
|
|
|
610,475
|
|
|
|
|
|
183,121
|
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
448,837
|
|
|
|
|
440,569
|
|
|
|
|
|
8,268
|
|
|
Third parties
|
|
|
|
68,050
|
|
|
|
|
68,437
|
|
|
|
|
|
(387
|
)
|
|
|
|
|
|
516,887
|
|
|
|
|
509,006
|
|
|
|
|
|
7,881
|
|
|
Affiliates - refinery processing units
|
|
|
|
62,721
|
|
|
|
|
67,725
|
|
|
|
|
|
(5,004
|
)
|
|
Total volumes (bpd)
|
|
|
|
1,373,204
|
|
|
|
|
1,187,206
|
|
|
|
|
|
185,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
Change from
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2016
|
|
|
|
|
(In thousands, except per unit data)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
$
|
80,030
|
|
|
|
$
|
83,102
|
|
|
|
|
$
|
(3,072
|
)
|
|
Affiliates - intermediate pipelines
|
|
|
|
28,732
|
|
|
|
|
26,996
|
|
|
|
|
|
1,736
|
|
|
Affiliates - crude pipelines
|
|
|
|
65,960
|
|
|
|
|
70,341
|
|
|
|
|
|
(4,381
|
)
|
|
|
|
|
|
174,722
|
|
|
|
|
180,439
|
|
|
|
|
|
(5,717
|
)
|
|
Third parties - refined product pipelines
|
|
|
|
52,379
|
|
|
|
|
52,195
|
|
|
|
|
|
184
|
|
|
Third parties - crude pipelines
|
|
|
|
7,939
|
|
|
|
|
—
|
|
|
|
|
|
7,939
|
|
|
|
|
|
|
235,040
|
|
|
|
|
232,634
|
|
|
|
|
|
2,406
|
|
|
Terminals, tanks and loading racks:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
125,510
|
|
|
|
|
119,633
|
|
|
|
|
|
5,877
|
|
|
Third parties
|
|
|
|
16,908
|
|
|
|
|
16,732
|
|
|
|
|
|
176
|
|
|
|
|
|
|
142,418
|
|
|
|
|
136,365
|
|
|
|
|
|
6,053
|
|
|
Affiliates - refinery processing units
|
|
|
|
76,904
|
|
|
|
|
33,044
|
|
|
|
|
|
43,860
|
|
|
Total revenues
|
|
|
|
454,362
|
|
|
|
|
402,043
|
|
|
|
|
|
52,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Operations (exclusive of depreciation and amortization)
|
|
|
|
137,605
|
|
|
|
|
123,986
|
|
|
|
|
|
13,619
|
|
|
Depreciation and amortization
|
|
|
|
79,278
|
|
|
|
|
70,428
|
|
|
|
|
|
8,850
|
|
|
General and administrative
|
|
|
|
14,323
|
|
|
|
|
12,532
|
|
|
|
|
|
1,791
|
|
|
|
|
|
|
231,206
|
|
|
|
|
206,946
|
|
|
|
|
|
24,260
|
|
|
Operating income
|
|
|
|
223,156
|
|
|
|
|
195,097
|
|
|
|
|
|
28,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of equity method investments
|
|
|
|
12,510
|
|
|
|
|
14,213
|
|
|
|
|
|
(1,703
|
)
|
|
Interest expense, including amortization
|
|
|
|
(58,448
|
)
|
|
|
|
(52,552
|
)
|
|
|
|
|
(5,896
|
)
|
|
Interest income
|
|
|
|
491
|
|
|
|
|
440
|
|
|
|
|
|
51
|
|
|
Loss on early extinguishment of debt
|
|
|
|
(12,225
|
)
|
|
|
|
—
|
|
|
|
|
|
(12,225
|
)
|
|
Remeasurement gain on preexisting equity investments
|
|
|
|
36,254
|
|
|
|
|
—
|
|
|
|
|
|
36,254
|
|
|
Gain on sale of assets and other income
|
|
|
|
422
|
|
|
|
|
677
|
|
|
|
|
|
(255
|
)
|
|
|
|
|
|
(20,996
|
)
|
|
|
|
(37,222
|
)
|
|
|
|
|
16,226
|
|
|
Income before income taxes
|
|
|
|
202,160
|
|
|
|
|
157,875
|
|
|
|
|
|
44,285
|
|
|
State income tax expense
|
|
|
|
(249
|
)
|
|
|
|
(285
|
)
|
|
|
|
|
36
|
|
|
Net income
|
|
|
|
201,911
|
|
|
|
|
157,590
|
|
|
|
|
|
44,321
|
|
|
Add net loss applicable to predecessor
|
|
|
|
—
|
|
|
|
|
10,657
|
|
|
|
|
|
(10,657
|
)
|
|
Allocation of net income attributable to noncontrolling interests
|
|
|
|
(6,871
|
)
|
|
|
|
(10,006
|
)
|
|
|
|
|
3,135
|
|
|
Net income attributable to Holly Energy Partners
|
|
|
|
195,040
|
|
|
|
|
158,241
|
|
|
|
|
|
36,799
|
|
|
General partner interest in net income, including incentive
distributions(1) |
|
|
|
(35,047
|
)
|
|
|
|
(57,173
|
)
|
|
|
|
|
22,126
|
|
|
Limited partners' interest in net income
|
|
|
$
|
159,993
|
|
|
|
$
|
101,068
|
|
|
|
|
$
|
58,925
|
|
|
Limited partners' earnings per unit - basic and diluted:(1) |
|
|
$
|
2.28
|
|
|
|
$
|
1.69
|
|
|
|
|
$
|
0.59
|
|
|
Weighted average limited partners' units outstanding
|
|
|
|
70,291
|
|
|
|
|
59,872
|
|
|
|
|
|
10,419
|
|
|
EBITDA(2) |
|
|
$
|
344,749
|
|
|
|
$
|
277,545
|
|
|
|
|
$
|
67,204
|
|
|
Distributable cash flow(3) |
|
|
$
|
242,955
|
|
|
|
$
|
218,810
|
|
|
|
|
$
|
24,145
|
|
|
Volumes (bpd)
|
|
|
|
|
|
|
|
|
|
|
|
Pipelines:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates - refined product pipelines
|
|
|
|
133,822
|
|
|
|
|
128,140
|
|
|
|
|
|
5,682
|
|
|
Affiliates - intermediate pipelines
|
|
|
|
141,601
|
|
|
|
|
137,381
|
|
|
|
|
|
4,220
|
|
|
Affiliates - crude pipelines
|
|
|
|
281,093
|
|
|
|
|
277,241
|
|
|
|
|
|
3,852
|
|
|
|
|
|
|
556,516
|
|
|
|
|
542,762
|
|
|
|
|
|
13,754
|
|
|
Third parties - refined product pipelines
|
|
|
|
78,013
|
|
|
|
|
75,909
|
|
|
|
|
|
2,104
|
|
|
Third parties - crude pipelines
|
|
|
|
21,834
|
|
|
|
|
—
|
|
|
|
|
|
21,834
|
|
|
|
|
|
|
656,363
|
|
|
|
|
618,671
|
|
|
|
|
|
37,692
|
|
|
Terminals and loading racks:
|
|
|
|
|
|
|
|
|
|
|
|
Affiliates
|
|
|
|
428,001
|
|
|
|
|
413,487
|
|
|
|
|
|
14,514
|
|
|
Third parties
|
|
|
|
68,687
|
|
|
|
|
72,342
|
|
|
|
|
|
(3,655
|
)
|
|
|
|
|
|
496,688
|
|
|
|
|
485,829
|
|
|
|
|
|
10,859
|
|
|
Affiliates - refinery processing units
|
|
|
|
63,572
|
|
|
|
|
51,778
|
|
|
|
|
|
11,794
|
|
|
Total volumes (bpd)
|
|
|
|
1,216,623
|
|
|
|
|
1,156,278
|
|
|
|
|
|
60,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. HEP net
income allocated to the general partner includes incentive
distributions that are declared subsequent to quarter end. There
were no general partner incentive distributions for the three months
ended December 31, 2017. General partner incentive distributions
were $15.6 million for the three months ended December 31, 2016.
General partner incentive distributions for the years ended December
31, 2017 and 2016 were $34.1 million and $54.0 million, 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 is also used
by our management for internal analysis and as a basis for
compliance with financial covenants.
|
|
|
|
|
|
|
|
Set forth below is our calculation of EBITDA.
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
|
|
Years Ended
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In thousands)
|
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
86,071
|
|
|
|
$
|
41,361
|
|
|
|
|
$
|
195,040
|
|
|
|
$
|
158,241
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
16,343
|
|
|
|
|
15,399
|
|
|
|
|
|
55,385
|
|
|
|
|
49,306
|
|
|
Interest income
|
|
|
|
(185
|
)
|
|
|
|
(108
|
)
|
|
|
|
|
(491
|
)
|
|
|
|
(440
|
)
|
|
Amortization of discount and deferred debt charges
|
|
|
|
746
|
|
|
|
|
895
|
|
|
|
|
|
3,063
|
|
|
|
|
3,246
|
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
12,225
|
|
|
|
|
—
|
|
|
State income tax
|
|
|
|
85
|
|
|
|
|
76
|
|
|
|
|
|
249
|
|
|
|
|
285
|
|
|
Depreciation and amortization
|
|
|
|
21,549
|
|
|
|
|
19,245
|
|
|
|
|
|
79,278
|
|
|
|
|
70,428
|
|
|
Predecessor depreciation and amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
(3,521
|
)
|
|
EBITDA
|
|
|
$
|
124,609
|
|
|
|
$
|
76,868
|
|
|
|
|
$
|
344,749
|
|
|
|
$
|
277,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
December 31,
|
|
|
|
Years Ended
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In thousands)
|
|
Net income attributable to Holly Energy Partners
|
|
|
$
|
86,071
|
|
|
|
$
|
41,361
|
|
|
|
|
$
|
195,040
|
|
|
|
$
|
158,241
|
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
21,549
|
|
|
|
|
19,245
|
|
|
|
|
|
79,278
|
|
|
|
|
70,428
|
|
|
Remeasurement gain on preexisting equity interests
|
|
|
|
(36,254
|
)
|
|
|
|
—
|
|
|
|
|
|
(36,254
|
)
|
|
|
|
—
|
|
|
Amortization of discount and deferred debt charges
|
|
|
|
746
|
|
|
|
|
895
|
|
|
|
|
|
3,063
|
|
|
|
|
3,246
|
|
|
Loss on early extinguishment of debt
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
12,225
|
|
|
|
|
—
|
|
|
Increase (decrease) in deferred revenue attributable to shortfall
billings
|
|
|
|
(5,118
|
)
|
|
|
|
(1,113
|
)
|
|
|
|
|
(1,283
|
)
|
|
|
|
(1,292
|
)
|
|
Maintenance capital expenditures (4) |
|
|
|
(1,440
|
)
|
|
|
|
(1,861
|
)
|
|
|
|
|
(7,748
|
)
|
|
|
|
(9,658
|
)
|
|
Increase (decrease) in environmental liability
|
|
|
|
159
|
|
|
|
|
135
|
|
|
|
|
|
(581
|
)
|
|
|
|
(584
|
)
|
|
Increase (decrease) in reimbursable deferred revenue
|
|
|
|
(914
|
)
|
|
|
|
(827
|
)
|
|
|
|
|
(3,679
|
)
|
|
|
|
(2,733
|
)
|
|
Other non-cash adjustments
|
|
|
|
721
|
|
|
|
|
644
|
|
|
|
|
|
2,894
|
|
|
|
|
4,683
|
|
|
Predecessor depreciation and amortization
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
(3,521
|
)
|
|
Distributable cash flow
|
|
|
$
|
65,520
|
|
|
|
$
|
58,479
|
|
|
|
|
$
|
242,955
|
|
|
|
$
|
218,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
|
Maintenance capital expenditures are capital expenditures made to
replace partially or fully depreciated assets in order to maintain
the existing operating capacity of our assets and to extend their
useful lives. Maintenance capital expenditures include expenditures
required to maintain equipment reliability, tankage and pipeline
integrity, safety and to address environmental regulations.
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In thousands)
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
7,776
|
|
|
$
|
3,657
|
|
|
Working capital (deficit)
|
|
|
$
|
18,906
|
|
|
$
|
(7,782
|
)
|
|
Total assets
|
|
|
$
|
2,154,114
|
|
|
$
|
1,884,237
|
|
|
Long-term debt
|
|
|
$
|
1,507,308
|
|
|
$
|
1,243,912
|
|
|
Partners' equity(5) |
|
|
$
|
393,959
|
|
|
$
|
378,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
As a master limited partnership, we distribute our available cash,
which historically has exceeded our net income attributable to HEP
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 HEP. Additionally, if the
assets contributed and acquired from HFC while we were a
consolidated variable interest entity of HFC had been acquired from
third parties, our acquisition cost in excess of HFC's basis in the
transferred assets would have been recorded in our financial
statements as increases to our properties and equipment and
intangible assets at the time of acquisition instead of decreases to
partners' equity.
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180220005535/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
Investor Relations
Source: Holly Energy Partners, L.P.
News Provided by Acquire Media