Holly Energy Partners, L.P. Reports Fourth Quarter Results
Dallas, Texas -- Holly Energy Partners, L.P. (“HEP” or the “Partnership”) (NYSE:HEP) today reported financial results for the fourth quarter of 2013. For the quarter, distributable cash flow was $34.3 million, down $7.4 million, or 17.7% compared to the fourth quarter of 2012. HEP announced its 37th consecutive distribution increase on January 23, 2014, raising the quarterly distribution from $0.4925 to $0.50 per unit, representing a 6.4% increase over the distribution for the fourth quarter of 2012.
Net income attributable to Holly Energy Partners for the fourth quarter was $19.0 million ($0.19 per basic and diluted limited partner unit) compared to $27.0 million ($0.37 per basic and diluted limited partner unit) for the fourth quarter of 2012. This decrease in earnings is primarily a result of lower pipeline shipments due to reduced crude throughput at HollyFrontier Corporation's ("HFC") Navajo Refinery in the 2013 fourth quarter. Navajo Refinery reduced its crude throughput during the quarter due to previously announced waste water processing constraints.
Commenting on the fourth quarter of 2013, Mike Jennings, Chief Executive Officer, stated, “We are pleased that financial results for the fourth quarter of 2013 allowed us to continue our record of raising our quarterly distribution. As we previously announced, certain unexpected operational constraints at our largest shipper’s New Mexico refinery significantly reduced shipments on our pipelines into and out of that facility during the fourth quarter; these shipments have now returned to normal levels. Despite this event-driven reduction in volumes during the fourth quarter of 2013, our financial results, supported by minimum commitment contracts and sustained strength in crude oil gathering revenues, allowed us to continue our record of raising our quarterly distributions in every quarter since our initial public offering nine years ago.
“As we look forward we believe HEP is well positioned due to the quality and geographic location of our assets, our talented employee base, and our financially strong and supportive general partner, HollyFrontier. We believe HEP’s future growth is underpinned by strong industry fundamentals, planned capital projects and our existing long-term fee-based contracts with built-in annual escalators. We plan to continue to pursue opportunities to more fully utilize our existing assets and to seek value creating acquisitions that will add to our asset base.
“We have placed in service certain segments of our previously announced New Mexico crude gathering expansion project, and we expect full completion of the project by August. The segments now in operation will begin contributing to our results during the first quarter of 2014.”
Fourth Quarter 2013 Revenue Highlights
Revenues for the quarter were $77.9 million, a $3.6 million decrease compared to the fourth quarter of 2012. The revenue decrease was due to reduced shipments on our pipelines supporting the Navajo Refinery and a decrease of $2.9 million in previously deferred revenue realized under our guaranteed shipping contracts, partially offset by higher cost reimbursement receipts from HFC. Overall pipeline volumes were down 9% compared to the fourth quarter of 2012.
Revenues from our refined product pipelines were $27.9 million, a decrease of $2.7 million primarily due to the effects of reduced shipments by Navajo Refinery and a decrease of $2.3 million in previously deferred revenue realized, partially offset by increased volumes on the UNEV Pipeline and the effect of annual tariff increases. Shipments averaged 174.2 thousand barrels per day (“mbpd”) compared to 182.3 mbpd for the fourth quarter of 2012.
Revenues from our intermediate pipelines were $5.4 million, a decrease of $2.1 million primarily due to a decrease of $0.6 million in previously deferred revenue realized and the effects of decreased
The following information was filed by Holly Energy Partners Lp (HEP) on Thursday, February 20, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.