HEP - Earnings call transcript Q4 2017 | Holly Energy Partners LP

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Operator

Welcome to Holly Energy Partners Fourth Quarter 2017 Conference Call and Webcast. [Operator Instructions]. Please note this conference is being recorded. It is now my pleasure to turn the floor over to Jared Harding. Jared, you may begin.

Jared Harding

you joining thank XXXX fourth and call. earnings Cheryl, all our for quarter Thanks, Harding Relations with Partners. Jared am I Investor for Energy Holly

Joining XX, and Damiris, Voliva, George announcing results issued us CEO; quarter release today Rich ending the and December a President press Executive This CFO. and President for morning XXXX. we Vice are

may our website on If a of copy one you'd today's hollyenergy.com. find like press release, you at

expectations, today's are harbor press proceed Rich call in note replay their please of Also, that disclosure with only outcomes. at filings. differ the our says statement federal provisions or of not cause be any safe longer today's the made intended including please today, judgments in These safe In Before reading the are management provided George XX, and to Any factors noted of under could time accurate on transcript. results are securities statements release. webcast SEC note remarks, speaks be it guarantees of forward-looking summary, presented expectations, the those time-sensitive statements There covered Today's laws. statements many information XXXX. harbor may to regarding or future statements. no February of as predictions that information are from

discussion Finally, turn I'll that, see today's to today's the to measures. non-GAAP measures. call include call with And press George. GAAP may Please of release financial for over reconciliations

George Damiris

This X% growth representing $X.XX results, over for we with distribution to was increase you XXXX afternoon. each unit, joining XXXX. thanks period track strong wrapped Thanks, increase of per in a our of successful IPO consecutive XXrd record continued the with and call and same quarter XXXX. since the up distribution Jared, the HEP our fourth of this

remaining the the volumes product XX% to volumes City the refinery and supply by Further, we to Pipeline. fourth in additional crude the Lake acquisition Overall, production Mountain higher Frontier and compared primarily pipeline due which increased Rocky area. on the increased in Salt and interest refined Salt in UNEV Lake Navajo XXXX, Canadian City the pipelines, shipment of higher acquisition. driven this the saw from crudes During to quarter, completed refineries quarter volumes of we HollyFrontier's

We simplification in HEP both pursue projects Simplification cost with agreement also third-party IDR to completed The us of and the IDR HollyFrontier more better October. with acquisitions. a equipping provides capital, competitive organic

is Looking distribution ahead an unit increase expect we in XXXX, X in to the expected full for year. per coverage of approximately quarterly to quarter, growth distribution annual $X.XXX resulting the average rate Distribution by X%. per

our Permian. leverage to grow organically, continue will We especially existing the footprint to in

over the As call we have pipeline we Rich. debottleneck the of Salt With mentioned expansion City that, and year. Analyst I'll Day, of turn Frontier and pipelines Malaga a the this scheduled at systems Lake to

Richard Voliva

full quarter a remeasurement in the to flow year increase generated gain period related fair for to lines Pipelines acquisition Thanks, Frontier HEP's $XX the XXXX. the of fourth of same George. for the This HEP XXXX. $XX quarter fourth X.XXx at in of in and XX% to the the the compared for million in compared quarter, preexisting by a was of of these We value. increase interest Net million attributable quarter a onetime SLC XXXX. includes coverage the primarily distributable income driven $XX million had $XX ratio was interest X.XXx and and million HEP remaining of cash the distribution to of the

the to $XX $XX amortization Operating coverage to and half expect we period ratio totaled expenses contractual escalators. the million. of with totaled coverage X.Xx As average for higher in George XXXX, of second ratios due million. in a mentioned, the year tariff Depreciation

IDR million Simplification. of expense million G&A $X.X to roughly $X.X the of consulting related includes Our onetime fees

$X million quarter Our for including $X $XX HollyFrontier. we excluding $XX million $XX million and expansion of to approximately capital maintenance In CapEx expenditures of to spend acquisitions by CapEx for and million, for XXXX, to capital reimbursable reimbursed expect were CapEx. and the million million $X.X CapEx million $XX maintenance

million our the year, For quarter, quarter deferred carried this of from revenue end of we million $X in million the recognizing shippers. $X and the of in first roughly billed XXXX. fourth deferred sheet, shortfalls to revenue shortfalls of we revenue recognized $X At the approximately anticipate prior HEP of deferred on balance

December credit via limited net-debt-to-EBITDA markets' the issued quarter, acquisitions. partner of had equity weakness temporarily in fourth In and placement, $X.X outstanding, acquisitions year-end equity repay HEP we all the million billion resulting XX, a the elected in debt to SLC February with total a our Frontier during Based of of of of the XXXX, proceeds private a we used $XXX revolving finance the portion through As to ratio facility. Frontier on with SLC debt of X.Xx. and associated the

million was trailing approximately $XXX debt our our and issuance, at this over to forma stood Following liquidity EBITDA X.Xx. pro

liquidity us This reach over in to We the Cheryl year-end growth. With future the financing position full Xx ratio I'll of flexibility expect to to access capital turn targeted the that, ability strong and any by call debt-to-EBITDA for XXXX. markets questions. allow

Operator

Instructions]. [Operator

Barclays. Theresa from is question first Chen, Our

Theresa Chen

pipeline I the volume first wanted to ask about strength.

quarter so much production ex-acquisition sustainable sustainable? UNEV strength bump to And Navajo's was When increases the the and out can -- year, on. Frontier. even maybe or quarter-over-quarter incremental due we that nice about at how rest the seasonal the is outside versus of some of interest of how in of how much acquisition first breaking and volume was you was increased owed look and much SLC the talk saw You to

Richard Voliva

Rich. Theresa, it's

Las We're into into themes reason see I'd Vegas the first to is the and directionally major between itself. to continued here, Frontier change. which of up going a We there's month and say, and Salt seasonally Navajo, production XXXX, strong of drove particularly really quarter. Lake you're arb had think SLC the that's look, So no UNEV had on the the to right piece City when at it. that quarter, opened going December, And in continuing strong

what based know on on We this expect we typical seasonality year today. UNEV

Theresa Chen

in this year And about expansion can Got you SLC for terms it. there? and Frontier, the of later economics talk the on

George Damiris

I Theresa, think economics we're there. into much the to don't on go too going detail Yes.

is exact you think, done a EBITDA lower a organic know, as specific projects. organic acquisitions, of going I give growth at to the our not multiple we're guidance than on but multiples

Richard Voliva

say, not Theresa, huge I If it's could project. just a

to capital. We $XX within million that have it of million $XX

payout, but size. in not So George's it's a good it's to point, enormous

Theresa Chen

And other obvious you geographies and growth partnership? of lastly, about or acquisition there the big Are picture. Understood. would areas be just thinking for the think

George Damiris

to think a into both most, refineries obvious good not grow. the I HEP the Theresa. falls with associated the major mean, anything basins distribution have in from we've got if Yes. there's oil HFC category, product that as We're to some then and I which don't diversity we crude all, well. the across U.S., exposed and

Operator

Instructions]. [Operator

from Our next Goldman, question Jefferies. comes Corey

Corey Goldman

A should to just just one about quick it is us can the think for on that give expectation equity, on ATM? rest strategy what -- Is we you Xx? for what an just get to Is the the Rich. financing

Richard Voliva

ATM get it's growth ATM, to this to business, we there'll Yes. presumably primarily Corey, by for to EBITDA do in escalators, leverage -- year. driven contractual Between the year large not be terribly we're Realistically, expect balance use we'll the that the the in the of selective and ratio of number. going a what

Corey Goldman

you Got just what's your can you. question. are a you average? follow-up PPI the And the The using? comment guys good the in actually get to that's Like segue to into that what's escalators, on guidance Xx

Richard Voliva

end We data, had used made -- bit it X%. the little on be are Frankly, bit the POS we using the conservative, running, little a an roughly may of estimation had but a roughly we year. of

Operator

are turn back the no for Jared closing will I further there questions, floor over remarks. If Instructions]. to any [Operator

Jared Harding

thanks Thanks, today. for Cheryl, the joining and call again everyone

Thanks. hesitate you to any reach to If Relations. follow-ups, have out don't Investor

Operator

This concludes conference call. today's

joining, You a great may have you Thank for day. now disconnect. and

Holly Energy Partners (HEP) 20 Feb 182017 Q4 Earnings call transcript