Holly Energy Partners, L.P. Reports Fourth Quarter Results
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.
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