We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Name | Symbol | Market | Type |
---|---|---|---|
Holly Energy Partners LP | NYSE:HEP | NYSE | Trust |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 20.45 | 0 | 01:00:00 |
Holly Energy Partners, L.P. (“HEP” or the “Partnership”) (NYSE:HEP) today reported financial results for the third quarter of 2018. Net income attributable to HEP for the third quarter was $45.0 million ($0.43 per basic and diluted limited partner unit) compared to $42.1 million ($0.66 per basic and diluted limited partner unit) for the third quarter of 2017.
Distributable cash flow was $66.6 million for the quarter, up $7.4 million, or 12.4% compared to the third quarter of 2017. HEP announced its 56th consecutive distribution increase on October 19, 2018, raising the quarterly distribution from $0.660 to $0.665 per unit, which represents an increase of 3.1% over the distribution for the third quarter of 2017.
The increase in net income attributable to HEP was primarily due to our acquisition of the remaining interests in the SLC and Frontier pipelines in the fourth quarter of 2017 and higher crude oil gathering volumes around the Permian Basin. These gains were partially offset by higher interest expense and lower earnings on equity investments. Limited partners' earnings per unit in the third quarter declined compared to the third quarter of 2017 despite higher net income attributable to the partners. This decrease was driven by the issuance of new common units primarily associated with the incentive distribution rights simplification transaction on October 31, 2017.
Commenting on our 2018 third quarter results, George Damiris, Chief Executive Officer, stated, “HEP delivered solid financial results in the third quarter, which allowed us to maintain our record of consecutive quarterly distribution increases. Despite seasonal headwinds and the Woods Cross refinery running at lower throughput, third quarter results highlight the cash flow stability of HEP’s business model.
“Looking forward, we anticipate higher earnings and distributable cash flow in the fourth quarter. HEP remains on track to report a distribution coverage ratio of 1.0x for the full year 2018.”
Third Quarter 2018 Revenue Highlights
Revenues for the quarter were $125.8 million, an increase of $15.4 million compared to the third quarter of 2017. The increase was primarily attributable to our acquisition of the remaining interests in the SLC and Frontier pipelines and higher crude oil gathering volumes around the Permian Basin in New Mexico and Texas, which contributed to an increase in overall pipeline volumes of 22%.
Revenues for the third quarter of 2018 included an immaterial recognition of prior shortfalls billed to shippers in 2017. As of September 30, 2018, deferred revenue reflected in our consolidated balance sheet related to shortfalls billed was $5.7 million.
Nine Months Ended September 30, 2018 Revenue Highlights
Revenues for the nine months ended September 30, 2018, were $373.4 million, an increase of $48.3 million compared to the nine months ended September 30, 2017. The increase was primarily attributable to our acquisition of the remaining interests in the SLC and Frontier pipelines and the turnaround at HollyFrontier's Navajo refinery in the first quarter of 2017.
Revenues for the nine months ended September 30, 2018, included the recognition of $2.6 million of prior shortfalls billed to shippers in 2017 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 $62.9 million and $189.1 million for the three and nine months ended September 30, 2018, representing an increase of $4.2 million and $20.0 million from the three and nine months ended September 30, 2017. The increase was primarily due to new operating costs and expenses related to our acquisition of the remaining interests in the SLC and Frontier pipelines in the fourth quarter of 2017.
Interest expense was $18.0 million and $53.2 million for the three and nine months ended September 30, 2018, representing an increase of $4.0 million and $11.9 million over the same periods of 2017. These increases were primarily due to interest expense associated with the private placement of an additional $100 million in aggregate principal amount of our 6% Senior Notes due 2024 completed in the third quarter of 2017, higher average balances outstanding under our senior secured revolving credit facility and market interest rate increases under that facility.
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://78449.themediaframe.com/dataconf/productusers/hep/mediaframe/26443/indexl.html.
An audio archive of this webcast will be available using the above noted link through November 13, 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, 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 barrels per day of base oils and other specialized lubricant products, and 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:
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, 2018 and 2017.
Three Months Ended September 30, Change from 2018 2017 2017 (In thousands, except per unit data) Revenues Pipelines: Affiliates – refined product pipelines $ 20,803 $ 20,801 $ 2 Affiliates – intermediate pipelines 6,772 7,832 (1,060 ) Affiliates – crude pipelines 20,461 14,089 6,372 48,036 42,722 5,314 Third parties – refined product pipelines 11,194 11,350 (156 ) Third parties – crude pipelines 10,505 — 10,505 69,735 54,072 15,663 Terminals, tanks and loading racks: Affiliates 32,572 31,825 747 Third parties 3,897 3,876 21 36,469 35,701 768 Affiliates - refinery processing units 19,580 20,591 (1,011 ) Total revenues 125,784 110,364 15,420 Operating costs and expenses Operations 35,996 35,998 (2 ) Depreciation and amortization 24,367 19,007 5,360 General and administrative 2,498 3,623 (1,125 ) 62,861 58,628 4,233 Operating income 62,923 51,736 11,187 Equity in earnings of equity method investments 1,114 5,072 (3,958 ) Interest expense, including amortization (18,042 ) (14,072 ) (3,970 ) Interest income 540 101 439 Gain on sale of assets and other 38 155 (117 ) (16,350 ) (8,744 ) (7,606 ) Income before income taxes 46,573 42,992 3,581 State income tax benefit (expense) (39 ) 69 (108 ) Net income 46,534 43,061 3,473 Allocation of net income attributable to noncontrolling interests (1,531 ) (990 ) (541 ) Net income attributable to Holly Energy Partners 45,003 42,071 2,932 General partner interest in net income, including incentive distributions(1) — 419 (419 ) Limited partners’ interest in net income $ 45,003 $ 42,490 $ 2,513 Limited partners’ earnings per unit – basic and diluted(1) $ 0.43 $ 0.66 $ (0.23 ) Weighted average limited partners’ units outstanding 105,440 64,319 41,121 EBITDA(2) $ 86,911 $ 74,980 $ 11,931 Distributable cash flow(3) $ 66,598 $ 59,248 $ 7,350 Volumes (bpd) Pipelines: Affiliates – refined product pipelines 120,024 142,624 (22,600 ) Affiliates – intermediate pipelines 148,347 151,622 (3,275 ) Affiliates – crude pipelines 322,590 267,911 54,679 590,961 562,157 28,804 Third parties – refined product pipelines 67,112 74,703 (7,591 ) Third parties – crude pipelines 119,503 — 119,503 777,576 636,860 140,716 Terminals and loading racks: Affiliates 417,079 426,122 (9,043 ) Third parties 57,990 69,405 (11,415 ) 475,069 495,527 (20,458 ) Affiliates – refinery processing units 65,640 61,453 4,187 Total for pipelines and terminal assets (bpd) 1,318,285 1,193,840 124,445 Nine Months Ended September 30, Change from 2018 2017 2017 (In thousands, except per unit data) Revenues Pipelines: Affiliates – refined product pipelines $ 60,841 $ 57,977 $ 2,864 Affiliates – intermediate pipelines 22,496 20,366 2,130 Affiliates – crude pipelines 58,737 47,890 10,847 142,074 126,233 15,841 Third parties – refined product pipelines 37,124 35,535 1,589 Third parties – crude pipelines 28,245 — 28,245 207,443 161,768 45,675 Terminals, tanks and loading racks: Affiliates 96,606 93,573 3,033 Third parties 12,430 12,291 139 109,036 105,864 3,172 Affiliates - refinery processing units 56,949 57,510 (561 ) Total revenues 373,428 325,142 48,286 Operating costs and expenses Operations 106,731 102,584 4,147 Depreciation and amortization 74,117 57,729 16,388 General and administrative 8,293 8,872 (579 ) 189,141 169,185 19,956 Operating income 184,287 155,957 28,330 Equity in earnings of equity method investments 4,127 10,965 (6,838 ) Interest expense, including amortization (53,249 ) (41,359 ) (11,890 ) Interest income 1,581 306 1,275 Loss on early extinguishment of debt — (12,225 ) 12,225 Gain (loss) on sale of assets and other 71 317 (246 ) (47,470 ) (41,996 ) (5,474 ) Income before income taxes 136,817 113,961 22,856 State income tax expense (149 ) (164 ) 15 Net income 136,668 113,797 22,871 Allocation of net income attributable to noncontrolling interests (5,354 ) (4,827 ) (527 ) Net income attributable to Holly Energy Partners 131,314 108,970 22,344 General partner interest in net income, including incentive distributions(1) — (35,047 ) 35,047 Limited partners’ interest in net income $ 131,314 $ 73,923 $ 57,391 Limited partners’ earnings per unit—basic and diluted(1) $ 1.25 $ 1.16 $ 0.09 Weighted average limited partners’ units outstanding 104,908 63,845 41,063 EBITDA(2) $ 257,248 $ 207,916 $ 49,332 Adjusted EBITDA(2) $ 257,248 $ 220,141 $ 37,107 Distributable cash flow(3) $ 200,878 $ 177,436 $ 23,442 Volumes (bpd) Pipelines: Affiliates – refined product pipelines 125,642 128,212 (2,570 ) Affiliates – intermediate pipelines 142,371 136,055 6,316 Affiliates – crude pipelines 336,224 268,736 67,488 604,237 533,003 71,234 Third parties – refined product pipelines 70,830 77,114 (6,284 ) Third parties – crude pipelines 119,344 — 119,344 794,411 610,117 184,294 Terminals and loading racks: Affiliates 418,009 420,979 (2,970 ) Third parties 59,776 68,902 (9,126 ) 477,785 489,881 (12,096 ) Affiliates – refinery processing units 67,873 63,858 4,015 Total for pipelines and terminal assets (bpd) 1,340,069 1,163,856 176,213 (1) Prior to the equity restructuring transaction on October 31, 2017, net income attributable to Holly Energy Partners was 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 included incentive distributions that were declared subsequent to quarter end. There were no distributions made on the general partner interest after October 31, 2017. No general partner distributions were declared for the three months ended September 30, 2017, and general partner distributions of $36.5 million were declared for the nine months ended September 30, 2017. (2) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is calculated as net income attributable to Holly Energy Partners plus (i) interest expense, net of interest income, (ii) state income tax and (iii) depreciation and amortization. Adjusted EBITDA is calculated as EBITDA plus loss on early extinguishment of debt. EBITDA and Adjusted EBITDA are not calculations based upon generally accepted accounting principles ("GAAP"). However, the amounts included in the EBITDA and Adjusted EBITDA calculations are derived from amounts included in our consolidated financial statements. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income attributable to Holly Energy Partners or operating income, as indications of our operating performance or as alternatives to operating cash flow as a measure of liquidity. EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures of other companies. EBITDA and Adjusted EBITDA are presented here because they are widely used financial indicators used by investors and analysts to measure performance. EBITDA and Adjusted EBITDA are 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 and Adjusted EBITDA.Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2018 2017 2018 2017 (In thousands) Net income attributable to Holly Energy Partners $ 45,003 $ 42,071 $ 131,314 $ 108,970 Add (subtract): Interest expense 17,280 13,291 50,971 39,042 Interest Income (540 ) (101 ) (1,581 ) (306 ) Amortization of discount and deferred debt charges 762 781 2,278 2,317 State income tax (benefit) expense 39 (69 ) 149 164 Depreciation and amortization 24,367 19,007 74,117 57,729 EBITDA $ 86,911 $ 74,980 $ 257,248 $ 207,916 Add loss on early extinguishment of debt — — — 12,225 Adjusted EBITDA $ 86,911 $ 74,980 $ 257,248 $ 220,141 (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 EndedSeptember 30,
Nine Months EndedSeptember 30,
2018 2017 2018 2017 (In thousands) Net income attributable to Holly Energy Partners $ 45,003 $ 42,071 $ 131,314 $ 108,970 Add (subtract): Depreciation and amortization 24,367 19,007 74,117 57,729 Amortization of discount and deferred debt charges 762 781 2,278 2,317 Loss on early extinguishment of debt — — — 12,225 Customer billings greater than revenue recognized 1,294 1,134 2,994 3,835 Maintenance capital expenditures (4) (3,198 ) (3,240 ) (4,504 ) (6,308 ) Decrease in environmental liability (150 ) (180 ) (368 ) (741 ) Decrease in reimbursable deferred revenue (1,517 ) (917 ) (3,937 ) (2,765 ) Other non-cash adjustments 37 592 (1,016 ) 2,174 Distributable cash flow $ 66,598 $ 59,248 $ 200,878 $ 177,436 (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. Set forth below is certain balance sheet data. September 30, December 31, 2018 2017 (In thousands) Balance Sheet Data Cash and cash equivalents $ 6,375 $ 7,776 Working capital $ 20,914 $ 18,906 Total assets $ 2,107,042 $ 2,154,114 Long-term debt $ 1,416,748 $ 1,507,308 Partners' equity (5) $ 446,946 $ 393,959 (5) 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 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: https://www.businesswire.com/news/home/20181030005219/en/
Holly Energy Partners, L.P.Richard L. Voliva III, 214-954-6511Executive Vice President andChief Financial OfficerorCraig Biery, 214-954-6511Director, Investor Relations
1 Year Holly Energy Partners Chart |
1 Month Holly Energy Partners Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions