Holly Energy Partners, L.P. (“HEP” or the “Partnership”) (NYSE:HEP) today reported financial results for the fourth quarter of 2018. Net income attributable to HEP for the fourth quarter was $47.5 million ($0.45 per basic and diluted limited partner unit) compared to $86.1 million ($0.96 per basic and diluted limited partner unit) for the fourth quarter of 2017.
Distributable cash flow was $64.2 million for the quarter, down $1.3 million, or 2.0%, compared to the fourth quarter of 2017. HEP announced its 57th consecutive distribution increase on January 24, 2019, raising the quarterly distribution from $0.665 to $0.6675 per unit, which represents an increase of 3% over the distribution for the fourth quarter of 2017.
Net income attributable to HEP for the fourth quarter of 2017 included a $36.3 million remeasurement gain relating to HEP's acquisition of the remaining interests in the SLC and Frontier pipelines. Excluding this remeasurement gain, net income attributable to HEP for the fourth quarter of 2017 was $49.8 million ($0.56 per basic and diluted limited partner unit). Net income attributable to HEP for the fourth quarter of 2018 decreased $2.3 million compared to the fourth quarter of 2017 excluding this gain. This decrease in earnings is primarily due to higher interest and operating expenses as well as the impact of downtime from an unplanned outage on our fluid catalytic cracking unit at HollyFrontier Corporation's ("HFC" or "HollyFrontier") Woods Cross refinery.
Commenting on fourth quarter results, George Damiris, Chief Executive Officer, stated, “HEP delivered a solid quarter and despite operating issues at HFC's Woods Cross refinery, we were able to maintain our record of consecutive quarterly distribution increases.
“Looking to 2019, we expect to grow HEP's quarterly distribution by $0.0025 per limited partner unit while maintaining an annual distribution coverage ratio of 1.0x.”
Fourth Quarter 2018 Revenue Highlights
Revenues for the quarter were $132.8 million, an increase of $3.6 million compared to the fourth 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 volumes in the Permian Basin, offset by a decrease in revenue on our Woods Cross refinery processing units due to an operational outage. Compared to the fourth quarter of 2017, our overall pipeline volumes increased for the quarter by 8%.
- Revenues from our refined product pipelines were $39.6 million, an increase of $0.1 million, on shipments averaging 209.1 thousand barrels per day ("mbpd") compared to 231.2 mbpd for the fourth quarter of 2017. The volume decrease was mainly due to lower volumes on pipelines servicing HollyFrontier's Woods Cross refinery, which had lower throughput due to operational issues at the refinery during the quarter, lower volumes on pipelines servicing HFC's Navajo refinery and lower volumes from Delek. Revenue remained relatively consistent due to contractual minimum revenue commitments and tariff escalators.
- Revenues from our intermediate pipelines were $7.1 million, a decrease of $1.2 million compared to the fourth quarter of 2017, on shipments averaging 151.0 mbpd compared to 158.1 mbpd for the fourth quarter of 2017. The decreases were mainly attributable to lower throughput at HFC's Navajo refinery and a decrease in deferred revenue recognized.
- Revenues from our crude pipelines were $29.4 million, an increase of $4.0 million, on shipments averaging 495.4 mbpd compared to 404.4 mbpd for the fourth quarter of 2017. The increases were mainly attributable to our acquisition of the remaining interests in the SLC and Frontier pipelines in the fourth quarter of 2017 as well as increased volumes on our crude pipeline systems in New Mexico and Texas.
- Revenues from terminal, tankage and loading rack fees were $38.5 million, an increase of $1.9 million compared to the fourth quarter of 2017. Refined products and crude oil terminalled in the facilities averaged 451.9 mbpd compared to 516.9 mbpd for the fourth quarter of 2017. The volume decrease was mainly due to the planned turnaround at HFC's El Dorado refinery as well as the cessation of HEP's operations at the Tucson terminal in April 2018. Despite the decrease in volume, revenue increased primarily due to tariff escalators on minimum revenue commitments.
- Revenues from refinery processing units were $18.2 million, a decrease of $1.2 million, on throughputs averaging 47.7 mbpd compared to 62.7 mbpd for the fourth quarter of 2017. The decreases were due to an unplanned outage on our fluid catalytic cracking unit at HFC's Woods Cross refinery in the fourth quarter of 2018.
Revenues for the fourth quarter of 2018 included $4.1 million for recognition of shortfalls billed to shippers in prior quarters. As of December 31, 2018, deferred revenue reflected in our consolidated balance sheet related to shortfalls billed was $1.8 million.
Year Ended December 31, 2018 Revenue Highlights
Revenues for the year ended December 31, 2018, were $506.2 million, an increase of $51.9 million compared to the year ended December 31, 2017. The increase was primarily attributable to our acquisition of the remaining interests in the SLC and Frontier pipelines in the fourth quarter of 2017 and the turnaround at HollyFrontier's Navajo refinery in the first quarter of 2017.
- Revenues from our refined product pipelines were $137.5 million, an increase of $5.1 million, on shipments averaging 199.6 mbpd compared to 211.8 mbpd for the year ended December 31, 2017. The volume decrease was mainly due to pipelines servicing HFC's Woods Cross refinery, which had lower throughput due to operational issues at the refinery beginning in the first quarter of 2018. These decreases were partially offset by higher volumes on our product pipelines in New Mexico due to the turnaround at HFC's Navajo refinery in the first quarter of 2017. Revenue increased as a result of the higher volumes on the New Mexico product pipelines and remained relatively consistent for pipelines servicing HFC's Woods Cross refinery due to contractual minimum volume commitments and tariff escalators.
- Revenues from our intermediate pipelines were $29.6 million, an increase of $0.9 million, on shipments averaging 144.5 mbpd compared to 141.6 mbpd for the year ended December 31, 2017. These increases were principally due to the turnaround at HFC's Navajo refinery in the first quarter of 2017 and increased production of base oil and lubricants at HFC's Tulsa refinery.
- Revenues from our crude pipelines were $116.3 million, an increase of $42.4 million, on shipments averaging 465.6 mbpd compared to 302.9 mbpd for the year ended December 31, 2017. The increases were mainly attributable to our acquisition of the remaining interests in the SLC and Frontier pipelines in the fourth quarter of 2017 as well as increased volumes on our crude pipeline systems in New Mexico and Texas.
- Revenues from terminal, tankage and loading rack fees were $147.5 million, an increase of $5.1 million compared to the year ended December 31, 2017. Refined products and crude oil terminalled in the facilities averaged 474.9 mbpd compared to 496.7 mbpd for the year ended December 31, 2017. Despite the decrease in volume, revenue increased primarily due to tariff escalators on minimum revenue commitments.
- Revenues from refinery processing units were $75.2 million, a decrease of $1.7 million on throughputs averaging 62.8 mbpd compared to 63.6 mbpd for the year ended December 31, 2017. The reduction in revenue and volume was due to an unplanned outage on our fluid catalytic cracking unit at HFC's Woods Cross refinery in the fourth quarter of 2018.
Revenues for the year ended December 31, 2018, included the recognition of $3.3 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 $66.8 million and $256.0 million for the three months and year ended December 31, 2018, respectively, representing increases of $4.8 million and $24.8 million from the three months and year ended December 31, 2017, respectively. The increases were primarily due to new operating expenses related to our acquisition of the remaining interests in the SLC and Frontier pipelines in the fourth quarter of 2017.
Interest expense was $18.7 million and $71.9 million for the three months and year ended December 31, 2018, respectively, representing increases of $1.6 million and $13.5 million over the same periods of 2017. These increases were mainly due to 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/27947/indexl.html.
An audio archive of this webcast will be available using the above noted link through March 5, 2019.
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 owns and operates refineries located in Kansas, Oklahoma, New Mexico, Wyoming and Utah and 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 produces base oils and other specialized lubricants in the U.S., Canada and the Netherlands, and exports products to more than 80 countries. HollyFrontier also owns a 57% limited partner interest and a non-economic general partner interest in Holly Energy Partners, L.P., a master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including HollyFrontier.
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 or cyber 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, operational 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 the years ended December 31, 2018 and 2017.
Three Months Ended December 31, | Change from | ||||||||||||||
2018 | 2017 | 2017 | |||||||||||||
(In thousands, except per unit data) | |||||||||||||||
Revenues | |||||||||||||||
Pipelines: | |||||||||||||||
Affiliates – refined product pipelines | $ | 22,189 | $ | 22,053 | $ | 136 | |||||||||
Affiliates – intermediate pipelines | 7,144 | 8,366 | (1,222 | ) | |||||||||||
Affiliates – crude pipelines | 21,004 | 18,070 | 2,934 | ||||||||||||
50,337 | 48,489 | 1,848 | |||||||||||||
Third parties – refined product pipelines | 17,401 | 17,481 | (80 | ) | |||||||||||
Third parties – crude pipelines | 8,359 | 7,301 | 1,058 | ||||||||||||
76,097 | 73,271 | 2,826 | |||||||||||||
Terminals, tanks and loading racks: | |||||||||||||||
Affiliates | 33,612 | 31,937 | 1,675 | ||||||||||||
Third parties | 4,853 | 4,618 | 235 | ||||||||||||
38,465 | 36,555 | 1,910 | |||||||||||||
Affiliates - refinery processing units | 18,230 | 19,395 | (1,165 | ) | |||||||||||
Total revenues | 132,792 | 129,221 | 3,571 | ||||||||||||
Operating costs and expenses | |||||||||||||||
Operations | 39,699 | 35,021 | 4,678 | ||||||||||||
Depreciation and amortization | 24,375 | 21,549 | 2,826 | ||||||||||||
General and administrative | 2,747 | 5,451 | (2,704 | ) | |||||||||||
66,821 | 62,021 | 4,800 | |||||||||||||
Operating income | 65,971 | 67,200 | (1,229 | ) | |||||||||||
Equity in earnings of equity method investments | 1,698 | 1,545 | 153 | ||||||||||||
Interest expense, including amortization | (18,650 | ) | (17,089 | ) | (1,561 | ) | |||||||||
Interest income | 526 | 185 | 341 | ||||||||||||
Remeasurement gain on preexisting equity interests | — | 36,254 | (36,254 | ) | |||||||||||
Gain on sale of assets and other | 51 | 105 | (54 | ) | |||||||||||
(16,375 | ) | 21,000 | (37,375 | ) | |||||||||||
Income before income taxes | 49,596 | 88,200 | (38,604 | ) | |||||||||||
State income tax benefit (expense) | 123 | (85 | ) | 208 | |||||||||||
Net income | 49,719 | 88,115 | (38,396 | ) | |||||||||||
Allocation of net income attributable to noncontrolling interests | (2,186 | ) | (2,044 | ) | (142 | ) | |||||||||
Net income attributable to Holly Energy Partners | 47,533 | 86,071 | (38,538 | ) | |||||||||||
General partner interest in net income, including incentive distributions(1) | — | — | — | ||||||||||||
Limited partners’ interest in net income | $ | 47,533 | $ | 86,071 | $ | (38,538 | ) | ||||||||
Limited partners’ earnings per unit – basic and diluted(1) | $ | 0.45 | $ | 0.96 | $ | (0.51 | ) | ||||||||
Weighted average limited partners’ units outstanding | 105,440 | 89,422 | 16,018 | ||||||||||||
EBITDA(2) | $ | 89,909 | $ | 124,609 | $ | (34,700 | ) | ||||||||
Distributable cash flow(3) | $ | 64,210 | $ | 65,520 | $ | (1,310 | ) | ||||||||
Volumes (bpd) | |||||||||||||||
Pipelines: | |||||||||||||||
Affiliates – refined product pipelines | 134,459 | 150,470 | (16,011 | ) | |||||||||||
Affiliates – intermediate pipelines | 150,964 | 158,058 | (7,094 | ) | |||||||||||
Affiliates – crude pipelines | 389,631 | 317,762 | 71,869 | ||||||||||||
675,054 | 626,290 | 48,764 | |||||||||||||
Third parties – refined product pipelines | 74,616 | 80,683 | (6,067 | ) | |||||||||||
Third parties – crude pipelines | 105,810 | 86,623 | 19,187 | ||||||||||||
855,480 | 793,596 | 61,884 | |||||||||||||
Terminals and loading racks: | |||||||||||||||
Affiliates | 385,772 | 448,837 | (63,065 | ) | |||||||||||
Third parties | 66,087 | 68,050 | (1,963 | ) | |||||||||||
451,859 | 516,887 | (65,028 | ) | ||||||||||||
Affiliates – refinery processing units | 47,696 | 62,721 | (15,025 | ) | |||||||||||
Total for pipelines, terminals and refinery processing unit assets (bpd) | 1,355,035 | 1,373,204 | (18,169 | ) | |||||||||||
Years Ended December 31, | Change from | ||||||||||||||
2018 | 2017 | 2017 | |||||||||||||
(In thousands, except per unit data) | |||||||||||||||
Revenues | |||||||||||||||
Pipelines: | |||||||||||||||
Affiliates – refined product pipelines | $ | 82,998 | $ | 80,030 | $ | 2,968 | |||||||||
Affiliates – intermediate pipelines | 29,639 | 28,732 | 907 | ||||||||||||
Affiliates – crude pipelines | 79,741 | 65,960 | 13,781 | ||||||||||||
192,378 | 174,722 | 17,656 | |||||||||||||
Third parties – refined product pipelines | 54,524 | 52,379 | 2,145 | ||||||||||||
Third parties – crude pipelines | 36,605 | 7,939 | 28,666 | ||||||||||||
283,507 | 235,040 | 48,467 | |||||||||||||
Terminals, tanks and loading racks: | |||||||||||||||
Affiliates | 130,251 | 125,510 | 4,741 | ||||||||||||
Third parties | 17,283 | 16,908 | 375 | ||||||||||||
147,534 | 142,418 | 5,116 | |||||||||||||
Affiliates - refinery processing units | 75,179 | 76,904 | (1,725 | ) | |||||||||||
Total revenues | 506,220 | 454,362 | 51,858 | ||||||||||||
Operating costs and expenses | |||||||||||||||
Operations | 146,430 | 137,605 | 8,825 | ||||||||||||
Depreciation and amortization | 98,492 | 79,278 | 19,214 | ||||||||||||
General and administrative | 11,040 | 14,323 | (3,283 | ) | |||||||||||
255,962 | 231,206 | 24,756 | |||||||||||||
Operating income | 250,258 | 223,156 | 27,102 | ||||||||||||
Equity in earnings of equity method investments | 5,825 | 12,510 | (6,685 | ) | |||||||||||
Interest expense, including amortization | (71,899 | ) | (58,448 | ) | (13,451 | ) | |||||||||
Interest income | 2,108 | 491 | 1,617 | ||||||||||||
Loss on early extinguishment of debt | — | (12,225 | ) | 12,225 | |||||||||||
Remeasurement gain on preexisting equity interests | — | 36,254 | (36,254 | ) | |||||||||||
Gain on sale of assets and other | 121 | 422 | (301 | ) | |||||||||||
(63,845 | ) | (20,996 | ) | (42,849 | ) | ||||||||||
Income before income taxes | 186,413 | 202,160 | (15,747 | ) | |||||||||||
State income tax expense | (26 | ) | (249 | ) | 223 | ||||||||||
Net income | 186,387 | 201,911 | (15,524 | ) | |||||||||||
Allocation of net income attributable to noncontrolling interests | (7,540 | ) | (6,871 | ) | (669 | ) | |||||||||
Net income attributable to Holly Energy Partners | 178,847 | 195,040 | (16,193 | ) | |||||||||||
General partner interest in net income, including incentive distributions(1) | — | (35,047 | ) | 35,047 | |||||||||||
Limited partners’ interest in net income | $ | 178,847 | $ | 159,993 | $ | 18,854 | |||||||||
Limited partners’ earnings per unit—basic and diluted(1) | $ | 1.70 | $ | 2.28 | $ | (0.58 | ) | ||||||||
Weighted average limited partners’ units outstanding | 104,908 | 70,291 | 34,617 | ||||||||||||
EBITDA(2) | $ | 347,156 | $ | 332,524 | $ | 14,632 | |||||||||
Adjusted EBITDA(2) | $ | 347,156 | $ | 344,749 | $ | 2,407 | |||||||||
Distributable cash flow(3) | $ | 265,087 | $ | 242,955 | $ | 22,132 | |||||||||
Volumes (bpd) | |||||||||||||||
Pipelines: | |||||||||||||||
Affiliates – refined product pipelines | 127,865 | 133,822 | (5,957 | ) | |||||||||||
Affiliates – intermediate pipelines | 144,537 | 141,601 | 2,936 | ||||||||||||
Affiliates – crude pipelines | 349,686 | 281,093 | 68,593 | ||||||||||||
622,088 | 556,516 | 65,572 | |||||||||||||
Third parties – refined product pipelines | 71,784 | 78,013 | (6,229 | ) | |||||||||||
Third parties – crude pipelines | 115,933 | 21,834 | 94,099 | ||||||||||||
809,805 | 656,363 | 153,442 | |||||||||||||
Terminals and loading racks: | |||||||||||||||
Affiliates | 413,525 | 428,001 | (14,476 | ) | |||||||||||
Third parties | 61,367 | 68,687 | (7,320 | ) | |||||||||||
474,892 | 496,688 | (21,796 | ) | ||||||||||||
Affiliates – refinery processing units | 62,787 | 63,572 | (785 | ) | |||||||||||
Total for pipelines, terminals and refinery processing unit assets (bpd) | 1,347,484 | 1,216,623 | 130,861 | ||||||||||||
(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 December 31, 2017, and general partner distributions of $36.5 million were declared for the year ended December 31, 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 Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Net income attributable to Holly Energy Partners | $ | 47,533 | $ | 86,071 | $ | 178,847 | $ | 195,040 | ||||||||||||||||
Add (subtract): | ||||||||||||||||||||||||
Interest expense | 17,886 | 16,343 | 68,858 | 55,385 | ||||||||||||||||||||
Interest Income | (526 | ) | (185 | ) | (2,108 | ) | (491 | ) | ||||||||||||||||
Amortization of discount and deferred debt charges | 764 | 746 | 3,041 | 3,063 | ||||||||||||||||||||
State income tax (benefit) expense | (123 | ) | 85 | 26 | 249 | |||||||||||||||||||
Depreciation and amortization | 24,375 | 21,549 | 98,492 | 79,278 | ||||||||||||||||||||
EBITDA | $ | 89,909 | $ | 124,609 | $ | 347,156 | $ | 332,524 | ||||||||||||||||
Add loss on early extinguishment of debt | — | — | — | 12,225 | ||||||||||||||||||||
Adjusted EBITDA | $ | 89,909 | $ | 124,609 | $ | 347,156 | $ | 344,749 | ||||||||||||||||
(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, | |||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Net income attributable to Holly Energy Partners | $ | 47,533 | $ | 86,071 | $ | 178,847 | $ | 195,040 | ||||||||||||||||
Add (subtract): | ||||||||||||||||||||||||
Depreciation and amortization | 24,375 | 21,549 | 98,492 | 79,278 | ||||||||||||||||||||
Remeasurement of gain on preexisting equity interests | — | (36,254 | ) | — | (36,254 | ) | ||||||||||||||||||
Amortization of discount and deferred debt charges | 764 | 746 | 3,041 | 3,063 | ||||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | 12,225 | ||||||||||||||||||||
Customer billings greater than revenue recognized | (3,780 | ) | (5,118 | ) | (786 | ) | (1,283 | ) | ||||||||||||||||
Maintenance capital expenditures (4) | (3,678 | ) | (1,440 | ) | (8,182 | ) | (7,748 | ) | ||||||||||||||||
Increase (decrease) in environmental liability | 131 | 159 | (237 | ) | (581 | ) | ||||||||||||||||||
Decrease in reimbursable deferred revenue | (1,242 | ) | (914 | ) | (5,179 | ) | (3,679 | ) | ||||||||||||||||
Other non-cash adjustments | 107 | 721 | (909 | ) | 2,894 | |||||||||||||||||||
Distributable cash flow | $ | 64,210 | $ | 65,520 | $ | 265,087 | $ | 242,955 | ||||||||||||||||
(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. | ||
December 31, | |||||||||||||
2018 | 2017 | ||||||||||||
(In thousands) | |||||||||||||
Balance Sheet Data | |||||||||||||
Cash and cash equivalents | $ | 3,045 | $ | 7,776 | |||||||||
Working capital | $ | 8,577 | $ | 18,906 | |||||||||
Total assets | $ | 2,102,540 | $ | 2,154,114 | |||||||||
Long-term debt | $ | 1,418,900 | $ | 1,507,308 | |||||||||
Partners' equity (5) | $ | 427,435 | $ | 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/20190219005308/en/
Contacts:
Chief Financial
Officer
Craig Biery, Director, Investor Relations
Holly Energy
Partners, L.P.
214/954-6511