DALLAS -- (Business Wire)
Holly Energy Partners, L.P. (“HEP” or the “Partnership”) (NYSE:HEP)
today reported financial results for the fourth quarter of 2016. Net
income attributable to Holly Energy Partners for the fourth quarter was
$41.4 million ($0.40 per basic and diluted limited partner unit)
compared to $40.5 million ($0.49 per basic and diluted limited partner
unit) for the fourth quarter of 2015.
Distributable cash flow was $58.5 million, an increase of $4.9 million,
or 9.2% compared to the fourth quarter of 2015. HEP announced its 49thconsecutive distribution increase on January 26, 2017, raising the
quarterly distribution from $0.595 to $0.6075 per unit, representing a
7.5% increase over the distribution for the fourth quarter of 2015. This
distribution represents an acceleration in year over year distribution
growth and progress towards HEP's 8% distribution growth rate target.
This increase in earnings is primarily due to newly acquired Woods Cross
refinery processing units as well as recent acquisitions including
interests in the Osage and Cheyenne pipelines and the Tulsa crude tanks
acquired in the first quarter of 2016, offset by higher interest expense
associated with our 6% Senior Notes due 2024, which we issued in July
2016 in anticipation of our Woods Cross processing units acquisition.
Commenting on the fourth quarter of 2016, George Damiris, Chief
Executive Officer, stated, “We are pleased with our solid financial
performance in the fourth quarter. Our strong and stable cash generation
allowed us to accelerate our year over year distribution growth and
progress towards our 8% distribution growth target as we maintained 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,
and these units were accretive to distributable cash flow in the
quarter. We will continue to leverage our relationship with
HollyFrontier and our Mid-Continent, Northwest 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."
Fourth Quarter 2016 Revenue Highlights
Revenues for the quarter were $112.5 million, an increase of $15.3
million compared to the fourth quarter of 2015. The revenue increase was
mainly due to our newly acquired Woods Cross refinery processing units,
the El Dorado refinery processing units acquired in the fourth quarter
of 2015, and the Tulsa crude tanks acquired in the 1st quarter of 2016
offset by lower pipeline revenues. Overall pipeline volumes were down 5%
compared to the fourth quarter of 2015.
-
Revenues from our refined product pipelines were $34.1 million,
a decrease of $1.4 million, due to lower volumes and inflation driven
tariff rate decreases. Shipments averaged 204.0 thousand barrels per
day (“mbpd”) compared to 209.9 mbpd for the fourth quarter of 2015
mainly due to lower volumes from HFC's Navajo refinery.
-
Revenues from our intermediate pipelines were $6.2 million, a
decrease of $1.2 million, primarily due to lower volumes, inflation
driven tariff rate decreases, and a decrease of $0.3 million in
previously deferred revenue realized. Shipments averaged 134.5 mbpd
compared to 139.8 mbpd for the fourth quarter of 2015 due to lower
volumes from pipelines servicing HFC's Navajo refinery.
-
Revenues from our crude pipelines were $17.2 million, a
decrease of $0.4 million, on shipments averaging 272.0 mbpd compared
to 289.5 mbpd for the fourth quarter of 2015. Revenues decreased
mainly due to inflation driven tariff decreases as we continued to
recognize revenue on minimum volume commitments. Volumes were lower
due to lower throughput at HFC's Navajo refinery.
-
Revenues from terminal, tankage and loading rack fees were
$34.8 million, an increase of $1.1 million compared to the fourth
quarter of 2015. The increase in revenue is mainly due to the Tulsa
West tanks acquired in the first quarter of 2016. Refined products and
crude terminalled in our facilities increased to an average of 509.0
mbpd compared to 480.0 mbpd for the fourth quarter of 2015.
-
Revenues from refinery processing units were $20.2 million, an
increase of $17.2 million on throughputs averaging 67.7 mbpd compared
to 26.9 mbpd for the fourth quarter of 2015. This increase in revenue
is due to the Woods Cross refinery processing units acquired in the
fourth quarter of 2016 and the El Dorado refinery processing units
acquired during the fourth quarter of 2015.
Revenues for the three months ended December 31, 2016, include the
recognition of $2.7 million of prior shortfalls billed to shippers in
2015 and 2016, as they did not meet their minimum volume commitments
within the contractual make-up period. As of December 31, 2016, deferred
revenue on our consolidated balance sheet related to shortfalls billed
was $5.6 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 will have the necessary capacity
for shipments in excess of guaranteed levels, or (b) when shipping
rights expire unused over the contractual make-up period.
Year Ended December 31, 2016 Revenue Highlights
Revenues for the year ended December 31, 2016, were $402.0 million, a
$43.2 million increase compared to the year ended December 31, 2015. The
revenue increase was primarily due to our newly acquired Woods Cross
processing units, the El Dorado processing units acquired in the fourth
quarter of 2015, higher UNEV pipeline revenues, and revenues from the
Tulsa crude tanks acquired in the first quarter of 2016.
-
Revenues from our refined product pipelines were $135.3
million, an increase of $3.0 million, primarily due to increased
revenue from the UNEV pipeline of $4.0 million offset by inflation
driven tariff rate decreases. Shipments averaged 204.0 mbpd compared
to 197.6 mbpd for the year ended December 31, 2015, largely due to
higher volumes on our UNEV pipeline.
-
Revenues from our intermediate pipelines were $27.0 million, a
decrease of $1.9 million, on shipments averaging 137.4 mbpd compared
to 142.5 mbpd for the year ended December 31, 2015. The decrease in
revenue is due to lower volumes from pipelines servicing HFC's Navajo
refinery and a $0.7 million decrease in previously deferred revenue
realized.
-
Revenues from our crude pipelines were $70.3 million, an
increase of $3.3 million, on shipments averaging 277.2 mbpd compared
to 291.5 mbpd for the year ended December 31, 2015. Revenues increased
due to an increase in deferred revenue recognized and to a surcharge
on our Beeson expansion. Volumes were lower due to lower throughput at
HFC's Navajo refinery.
-
Revenues from terminal, tankage and loading rack fees were
$136.4 million, an increase of $8.8 million compared to the year ended
December 31, 2015. This increase is due principally to increased
revenues from the El Dorado tanks and the newly acquired Tulsa crude
tanks. Refined products and crude terminalled in our facilities
increased to an average of 485.8 mbpd compared to 469.7 mbpd for the
year ended December 31, 2015, largely 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 from refinery processing units were $33.0 million, an
increase of $30.1 million on throughputs averaging 51.8 mbpd compared
to 6.8 mbpd for 2015. This increase in revenue is due to the Woods
Cross refinery processing units acquired in the fourth quarter of 2016
and an increase in revenue from the El Dorado refinery units acquired
late in 2015.
Revenues for the year ended December 31, 2016, include the recognition
of $10.0 million of prior shortfalls billed to shippers in 2015 and 2016.
Operating Costs and Expenses Highlights
Operating costs and expenses were $58.0 million and $206.9 million for
the three months and year ended December 31, 2016, respectively,
representing increases of $11.7 million and $25.5 million over the
respective periods of 2015. The increase is mainly due to operating
costs for the Woods Cross and El Dorado refinery processing units.
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=1131681.
An audio archive of this webcast will be available using the above noted
link through March 9, 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. Additionally, HollyFrontier owns
Petro-Canada Lubricants Inc. whose Mississauga, Ontario facility
produces 15,600 BPD of base oils and other specialized lubricant
products. 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 months and years ended December 31, 2016 and
2015.
|
|
| Three Months Ended December 31, |
|
|
| Change from |
| | | 2016 |
|
| 2015 (5) | | | | 2015 |
| | |
(In thousands, except per unit data)
|
Revenues | | | | | | | | | | |
Pipelines:
| | | | | | | | | | |
Affiliates – refined product pipelines
| | |
$
|
19,301
| | | |
$
|
20,563
| | | | |
$
|
(1,262
|
)
|
Affiliates – intermediate pipelines
| | | |
6,175
| | | | |
7,420
| | | | | |
(1,245
|
)
|
Affiliates – crude pipelines
| | |
|
17,235
|
| | |
|
17,605
|
| | | |
|
(370
|
)
|
| | | |
42,711
| | | | |
45,588
| | | | | |
(2,877
|
)
|
Third parties – refined product pipelines
| | |
|
14,819
|
| | |
|
14,991
|
| | | |
|
(172
|
)
|
| | | |
57,530
| | | | |
60,579
| | | | | |
(3,049
|
)
|
Terminals, tanks and loading racks:
| | | | | | | | | | |
Affiliates
| | | |
30,808
| | | | |
29,401
| | | | | |
1,407
| |
Third parties
| | |
|
4,014
|
| | |
|
4,308
|
| | | |
|
(294
|
)
|
| | | |
34,822
| | | | |
33,709
| | | | | |
1,113
| |
Affiliates – refinery processing units
| | |
|
20,174
|
| | |
|
2,963
|
| | | |
|
17,211
|
|
Total revenues
| | | |
112,526
| | | | |
97,251
| | | | | |
15,275
| |
| | | | | | | | | |
|
Operating costs and expenses: | | | | | | | | | | |
Operations (exclusive of depreciation and amortization)
| | | |
34,818
| | | | |
26,516
| | | | | |
8,302
| |
Depreciation and amortization
| | | |
19,245
| | | | |
16,886
| | | | | |
2,359
| |
General and administrative
| | |
|
3,914
|
| | |
|
2,897
|
| | | |
|
1,017
|
|
| | |
|
57,977
|
| | |
|
46,299
|
| | | |
|
11,678
|
|
Operating income | | | |
54,549
| | | | |
50,952
| | | | | |
3,597
| |
| | | | | | | | | |
|
Equity in earnings of equity method investments
| | | |
4,058
| | | | |
2,169
| | | | | |
1,889
| |
Interest expense, including amortization
| | | |
(16,294
|
)
| | | |
(10,107
|
)
| | | | |
(6,187
|
)
|
Interest income
| | | |
108
| | | | |
142
| | | | | |
(34
|
)
|
Gain (loss) on sale of assets and other income
| | |
|
574
|
| | |
|
80
|
| | | |
|
494
|
|
| | |
|
(11,554
|
)
| | |
|
(7,716
|
)
| | | |
|
(3,838
|
)
|
Income before income taxes | | | |
42,995
| | | | |
43,236
| | | | | |
(241
|
)
|
State income tax (expense) benefit
| | |
|
(76
|
)
| | |
|
(123
|
)
| | | |
|
47
|
|
Net income | | | |
42,919
| | | | |
43,113
| | | | | |
(194
|
)
|
Add net loss applicable to predecessor
| | | |
—
| | | | |
676
| | | | | |
(676
|
)
|
Allocation of net income attributable to noncontrolling interests
| | |
|
(1,558
|
)
| | |
|
(3,269
|
)
| | | |
|
1,711
|
|
Net income attributable to Holly Energy Partners | | | |
41,361
| | | | |
40,520
| | | | | |
841
| |
General partner interest in net income, including incentive
distributions(1) | | |
|
(17,172
|
)
| | |
|
(11,502
|
)
| | | |
|
5,670
|
|
Limited partners’ interest in net income | | |
$
|
24,189
|
| | |
$
|
29,018
|
| | | |
$
|
(4,829
|
)
|
Limited partners’ earnings per unit – basic and diluted:(1) | | |
$
|
0.40
|
| | |
$
|
0.49
|
| | | |
$
|
(0.09
|
)
|
Weighted average limited partners’ units outstanding | | |
|
62,781
|
| | |
|
58,657
|
| | | |
|
4,124
|
|
EBITDA(2) | | |
$
|
76,868
|
| | |
$
|
67,376
|
| | | |
$
|
9,492
|
|
Distributable cash flow(3) | | |
$
|
58,479
|
| | |
$
|
53,551
|
| | | |
$
|
4,928
|
|
| | | | | | | | | |
|
Volumes (bpd) | | | | | | | | | | |
Pipelines:
| | | | | | | | | | |
Affiliates – refined product pipelines
| | | |
126,594
| | | | |
131,472
| | | | | |
(4,878
|
)
|
Affiliates – intermediate pipelines
| | | |
134,509
| | | | |
139,847
| | | | | |
(5,338
|
)
|
Affiliates – crude pipelines
| | |
|
271,962
|
| | |
|
289,513
|
| | | |
|
(17,551
|
)
|
| | | |
533,065
| | | | |
560,832
| | | | | |
(27,767
|
)
|
Third parties – refined product pipelines
| | |
|
77,410
|
| | |
|
78,422
|
| | | |
|
(1,012
|
)
|
| | | |
610,475
| | | | |
639,254
| | | | | |
(28,779
|
)
|
Terminals and loading racks:
| | | | | | | | | | |
Affiliates
| | | |
440,569
| | | | |
397,473
| | | | | |
43,096
| |
Third parties
| | |
|
68,437
|
| | |
|
82,533
|
| | | |
|
(14,096
|
)
|
| | | |
509,006
| | | | |
480,006
| | | | | |
29,000
| |
Affiliates – refinery processing units
| | |
|
67,725
|
| | |
|
26,875
|
| | | |
|
40,850
|
|
Total for pipelines and terminal assets (bpd) | | |
|
1,187,206
|
| | |
|
1,146,135
|
| | | |
|
41,071
|
|
| | | | | | | | | | | | | | | |
|
|
|
| |
|
|
| |
| | | Years Ended December 31, | | | | Change from |
| | | 2016 |
|
| 2015 (5) | | | | 2015 |
| | |
(In thousands, except per unit data)
|
Revenues | | | | | | | | | | |
Pipelines:
| | | | | | | | | | |
Affiliates – refined product pipelines
| | |
$
|
83,102
| | | |
$
|
81,294
| | | | |
$
|
1,808
| |
Affiliates – intermediate pipelines
| | | |
26,996
| | | | |
28,943
| | | | | |
(1,947
|
)
|
Affiliates – crude pipelines
| | |
|
70,341
|
| | |
|
67,088
|
| | | |
|
3,253
|
|
| | | |
180,439
| | | | |
177,325
| | | | | |
3,114
| |
Third parties – refined product pipelines
| | |
|
52,195
|
| | |
|
51,022
|
| | | |
|
1,173
|
|
| | | |
232,634
| | | | |
228,347
| | | | | |
4,287
| |
Terminals, tanks and loading racks:
| | | | | | | | | | |
Affiliates
| | | |
119,633
| | | | |
111,933
| | | | | |
7,700
| |
Third parties
| | |
|
16,732
|
| | |
|
15,632
|
| | | |
|
1,100
|
|
| | | |
136,365
| | | | |
127,565
| | | | | |
8,800
| |
Affiliates – refinery processing units
| | |
|
33,044
|
| | |
|
2,963
|
| | | |
|
30,081
|
|
Total revenues
| | | |
402,043
| | | | |
358,875
| | | | | |
43,168
| |
| | | | | | | | | |
|
Operating costs and expenses: | | | | | | | | | | |
Operations (exclusive of depreciation and amortization)
| | | |
123,986
| | | | |
105,556
| | | | | |
18,430
| |
Depreciation and amortization
| | | |
70,428
| | | | |
63,306
| | | | | |
7,122
| |
General and administrative
| | |
|
12,532
|
| | |
|
12,556
|
| | | |
|
(24
|
)
|
| | |
|
206,946
|
| | |
|
181,418
|
| | | |
|
25,528
|
|
Operating income | | | |
195,097
| | | | |
177,457
| | | | | |
17,640
| |
| | | | | | | | | |
|
Equity in earnings of equity method investments
| | | |
14,213
| | | | |
4,803
| | | | | |
9,410
| |
Interest expense, including amortization
| | | |
(52,552
|
)
| | | |
(37,418
|
)
| | | | |
(15,134
|
)
|
Interest income
| | | |
440
| | | | |
526
| | | | | |
(86
|
)
|
Gain on sale of assets and other income
| | |
|
677
|
| | |
|
486
|
| | | |
|
191
|
|
| | |
|
(37,222
|
)
| | |
|
(31,603
|
)
| | | |
|
(5,619
|
)
|
Income before income taxes | | | |
157,875
| | | | |
145,854
| | | | | |
12,021
| |
State income tax expense
| | |
|
(285
|
)
| | |
|
(228
|
)
| | | |
|
(57
|
)
|
Net income | | | |
157,590
| | | | |
145,626
| | | | | |
11,964
| |
Add net loss applicable to predecessor
| | | |
10,657
| | | | |
2,702
| | | | | |
7,955
| |
Allocation of net income attributable to noncontrolling interests
| | |
|
(10,006
|
)
| | |
|
(11,120
|
)
| | | |
|
1,114
|
|
Net income attributable to Holly Energy Partners | | | |
158,241
| | | | |
137,208
| | | | | |
21,033
| |
General partner interest in net income, including incentive
distributions(1) | | |
|
(57,173
|
)
| | |
|
(42,337
|
)
| | | |
|
(14,836
|
)
|
Limited partners’ interest in net income | | |
$
|
101,068
|
| | |
$
|
94,871
|
| | | |
$
|
6,197
|
|
Limited partners’ earnings per unit – basic and diluted:(1) | | |
$
|
1.69
|
| | |
$
|
1.60
|
| | | |
$
|
0.09
|
|
Weighted average limited partners’ units outstanding | | |
|
59,872
|
| | |
|
58,657
|
| | | |
|
1,215
|
|
EBITDA(2) | | |
$
|
277,545
|
| | |
$
|
237,180
|
| | | |
$
|
40,365
|
|
Distributable cash flow(3) | | |
$
|
218,810
|
| | |
$
|
197,046
|
| | | |
$
|
21,764
|
|
| | | | | | | | | |
|
Volumes (bpd) | | | | | | | | | | |
Pipelines:
| | | | | | | | | | |
Affiliates – refined product pipelines
| | | |
128,140
| | | | |
124,061
| | | | | |
4,079
| |
Affiliates – intermediate pipelines
| | | |
137,381
| | | | |
142,475
| | | | | |
(5,094
|
)
|
Affiliates – crude pipelines
| | |
|
277,241
|
| | |
|
291,491
|
| | | |
|
(14,250
|
)
|
| | | |
542,762
| | | | |
558,027
| | | | | |
(15,265
|
)
|
Third parties – refined product pipelines
| | |
|
75,909
|
| | |
|
73,555
|
| | | |
|
2,354
|
|
| | | |
618,671
| | | | |
631,582
| | | | | |
(12,911
|
)
|
Terminals and loading racks:
| | | | | | | | | | |
Affiliates
| | | |
413,487
| | | | |
391,292
| | | | | |
22,195
| |
Third parties
| | |
|
72,342
|
| | |
|
78,403
|
| | | |
|
(6,061
|
)
|
| | | |
485,829
| | | | |
469,695
| | | | | |
16,134
| |
Affiliates – refinery processing units
| | |
|
51,778
|
| | |
|
6,774
|
| | | |
|
45,004
|
|
Total for pipelines and terminal assets (bpd) | | |
|
1,156,278
|
| | |
|
1,108,051
|
| | | |
|
48,227
|
|
|
| |
(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. General
partner incentive distributions were $15.6 million and $10.9 million
for the three months ended December 31, 2016 and 2015, respectively,
and $54.0 million and $40.4 million for the years ended December 31,
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 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, |
| | | 2016 |
|
| 2015 (5) | | | | 2016 |
|
| 2015 (5) |
| | |
(In thousands)
|
Net income attributable to Holly Energy Partners | | |
$
|
41,361
| | | |
$
|
40,520
| | | | |
$
|
158,241
| | | |
$
|
137,208
| |
Add (subtract):
| | | | | | | | | | | | | |
Interest expense
| | | |
15,399
| | | | |
9,604
| | | | | |
49,306
| | | | |
35,490
| |
Interest income
| | | |
(108
|
)
| | | |
(142
|
)
| | | | |
(440
|
)
| | | |
(526
|
)
|
Amortization of discount and deferred debt charges
| | | |
895
| | | | |
503
| | | | | |
3,246
| | | | |
1,928
| |
State income tax
| | | |
76
| | | | |
123
| | | | | |
285
| | | | |
228
| |
Depreciation and amortization
| | | |
19,245
| | | | |
16,886
| | | | | |
70,428
| | | | |
63,306
| |
Predecessor depreciation and amortization
| | |
|
—
|
| | |
|
(118
|
)
| | | |
|
(3,521
|
)
| | |
|
(454
|
)
|
EBITDA | | |
$
|
76,868
|
| | |
$
|
67,376
|
| | | |
$
|
277,545
|
| | |
$
|
237,180
|
|
|
| |
(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, |
| | | 2016 |
|
| 2015 (5) | | | | 2016 |
|
| 2015 (5) |
| | |
(In thousands)
|
Net income attributable to Holly Energy Partners | | |
$
|
41,361
| | | |
$
|
40,520
| | | | |
$
|
158,241
| | | |
$
|
137,208
| |
Add (subtract):
| | | | | | | | | | | | | |
Depreciation and amortization
| | | |
19,245
| | | | |
16,886
| | | | | |
70,428
| | | | |
63,306
| |
Amortization of discount and deferred debt charges
| | | |
895
| | | | |
503
| | | | | |
3,246
| | | | |
1,928
| |
Loss on early extinguishment of debt
| | | |
—
| | | | |
—
| | | | | |
—
| | | | |
—
| |
Increase (decrease) in deferred revenue attributable to shortfall
billings
| | | |
(1,113
|
)
| | | |
(190
|
)
| | | | |
(1,292
|
)
| | | |
(1,233
|
)
|
Maintenance capital expenditures*
| | | |
(1,861
|
)
| | | |
(3,286
|
)
| | | | |
(9,658
|
)
| | | |
(8,926
|
)
|
Increase (decrease) in environmental liability
| | | |
135
| | | | |
(1,837
|
)
| | | | |
(584
|
)
| | | |
1,107
| |
Increase (decrease) in reimbursable deferred revenue
| | | |
(827
|
)
| | | |
(495
|
)
| | | | |
(2,733
|
)
| | | |
176
| |
Other non-cash adjustments
| | | |
644
| | | | |
1,568
| | | | | |
4,683
| | | | |
3,934
| |
Predecessor depreciation and amortization
| | |
$
|
—
|
| | |
$
|
(118
|
)
| | | |
$
|
(3,521
|
)
| | |
$
|
(454
|
)
|
Distributable cash flow | | |
$
|
58,479
|
| | |
$
|
53,551
|
| | | |
$
|
218,810
|
| | |
$
|
197,046
|
|
|
| |
| |
| |
*
| |
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, |
| | | 2016 | | | 2015 (5) |
| | |
(In thousands)
|
Balance Sheet Data | | | | | | |
Cash and cash equivalents
| | |
$
|
3,657
| | | |
$
|
15,013
| |
Working capital (deficit)
| | |
$
|
(7,782
|
)
| | |
$
|
12,218
| |
Total assets
| | |
$
|
1,884,237
| | | |
$
|
1,777,646
| |
Long-term debt
| | |
$
|
1,243,912
| | | |
$
|
1,008,752
| |
Partners' equity(4) | | |
$
|
378,234
| | | |
$
|
531,793
| |
|
| |
(4)
| |
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.
|
| |
|
(5)
| |
We have retrospectively adjusted our historical financial results
for all periods to include the atmospheric distillation tower, fluid
catalytic cracking unit, and polymerization unit located at HFC’s
Woods Cross Refinery and crude oil tanks located at HFC’s Tulsa
refinery for the periods we were under common control of HFC. The
2015 Balance Sheet presentation was revised to reflect increases of
$243.2 million in properties and equipment, net, $0.1 million in
other long-term liabilities and $243.1 million in general partner
interest. The 2015 Income Statement presentation was revised to
include increases of $2.2 million in operating expenses and $0.5
million in depreciation and amortization.
|
| |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170221005503/en/
Contacts:
Holly Energy Partners, L.P.
Richard L. Voliva III, 214-954-6511
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.
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