HEP - Earnings call transcript Q3 2018 | Holly Energy Partners LP

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Operator

Good afternoon and welcome to the Holly Energy Partners Third Quarter 2018 Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode. The floor will be open for your questions following the presentation. [Operator Instructions] Please note that this conference is being recorded. It's now my pleasure to turn the floor over to Jared Harding. begin. may you Jared,

Jared Harding

thank call. for Investor I'm Partners. Holly And quarter Relations our XXXX Energy earnings Jared you Adam. joining all third for Thanks, Harding with

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

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

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

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

George Damiris

refinery, commitments. than record growth, marks business consecutive of by the the stability our quarter long-term volume our HEP's in flow this results the of us minimum third HollyFrontier's per normal in the Cross financial model, Jared. $X.XXX our IPO Woods to and allowing lower And underpinned each solid which distribution increase of generated Despite This increasing typical highlight results cash in Thanks, and around afternoon. the third HEP for distribution to XXth to you track call volumes since thanks distribution unit. of quarter seasonality XXXX. UNEV joining continue is

progress growth continue previously Texas we expect rack early of quarter, and organic in our be on our to announced budget to the year. rack on operational Construction now During we remains make next this diesel truck Orla, loading projects.

continue to by of crude day. per return small per Permian day. gathering capital year. expand that, opportunities And XXX in and by to expand the barrels also over require These the We XXX,XXX end to strong pursue the have projects capacity where in turn our the gather are and barrels will approximately currently be capacity the with the I'll system we to together aggregate and between XX,XXX profiles small of completed projects expected Rich. call Several

Rich Voliva

George. Thank you,

on LP as represents mentioned, The to distribution distribution X.X% to distribution Xth over George which on record October October the the for of November Partners the increase XXth, unit, $X.XXX scheduled announced be quarterly unitholders Holly As per XXth. quarter of Energy of third a of XXXX. paid

is $X $XX higher generated primarily FLC higher in last in the remaining gathering interests the pipelines due than During Basin. period quarter, distributable crude This cash Permian volumes third the as HEP well the same million, year. Frontier of the of as to acquisitions flow and million the

as running in million the one the $X pipeline be fourth coverage for and the by HollyFrontier. ratio in X.XX including continue refinery coverage for the by year million the quarter quarter around the XXXX. rates, CapEx $XX unit factors times typical Our Capital full Cross of million for expect reimbursed $X and expenditures to Woods reduced was higher anticipate were in at the distribution the to ratio CapEx maintenance was quarter. affected during We well Coverage adversely HollyFrontier's seasonal earnings quarter. as approximately

we XXXX, of CapEx forecasting of million, and CapEx. are reimbursable $XX $X million which of For million capital the maintenance and between total includes year $XX $X million full

balances compared we recognized higher quarter our notes XXXX fourth increased carried an rate to sheet. revenue shareholders revenue. completed of of we deferred quarter deferred Interest million And $X quarter quarter of revenue on The $XX,XXX interest from recognizing of million million the average those to of $X.X $XXX the third X% the of offering coupled balance as XXXX due both XXXX, primarily higher in tack-on in senior million additional third of In of expense deferred and September of third revolver on the prior balances. $X.X the with our to XXXX, anticipate XXth, HEP shippers.

to X.X of end leverage we Including quarter, XXXX. XX to expect revolver early liquidity availability, in and our trailing $XXX now and As adjusted reach the cash times of roughly million. four the is under third was month times debt EBITDA just

I'll our We achieve to our And are that, confident liquidity the that organic enable turn absence for Adam over call strong acqui-market. the planned us to with of questions. despite an MLP will growth

Operator

Instructions] question open. Spiro from Dounis line's Credit Suisse. your [Operator Spiro, first And from your comes

Spiro Dounis

Hey, good the afternoon, taking guys. Thanks question. for

allocate or on on early just good maybe projects, past that, can't like looking about to how CapEx racket like discrete how year. the is allocate could you you next what the backlog point next would wanted could and truck you're any to the still thinking just give for But going to Just And hear off sense how just to CapEx. start side? you us in online capital XXXX? to for organic year look you're if Even

Rich Voliva

year. Spiro, run a elevated $XX of organic its of Rich, $XX this We're to bit obviously sort historically we've HEP. million I million think little capital

your projects particularly I smaller and grow to To can we we do think of that number in next the a go year. are we'll Permian. system, ahead seeing elevated point, the be again

some No so large running So I elevated Does but more an help? year. number again think see to of we'll I we think do really them is call one those. that next out of be

Spiro Dounis

That's appreciated. Yes.

I at guess in way. of light point, ask going fold-in someone recent of MLP peers, The the but refining could you your to remind guys I'll on guess, out the it just was get some second just one, I one stand capital I whole the just I'm of into option or sure know and But MLP been a not point structure? understand they've on you frustrated HFC at others MLP some markets. of where it become is you roll-up on does viable with a pretty radar? you the

George Damiris

To closed. time and alone We're the the our period. our we've as XX% our XX% market it's equity's years, much Alerian's create the to distribution trying equity three XX%, down roughly value possible. unitholders as grown for and there we're no today, point, past same MLP not declined there's at In unfortunately, and XX% your

time, got complete between the this public the we've the at then space. in disconnect private and So markets same midstream

equity don't to is know in it's transitory this don't we're spot. is So if tough I know itself. it's how market to how happen. going will but it We or It eventually. of permanent. this a private how, to has don't current state resolve We the interact the whether market going with know how

to seen different longwinded saying to at or things. options there. to obvious near very corporate the the continue some at strategic of a moment. no us action there's look folks all point So way do the We've your term, In we'll

how well one to times. maintain growth and ratio our watching we're works reduce on that see. of long-term works. organic continue our and we a coverage that to how expect Try to So focus to and And we'll continue see leverage

Spiro Dounis

Got it. color. guys. Thanks, Appreciate that

Operator

question line's Jeremy comes from our open. And [Operator Instructions] from JPMorgan. next Tonet Jeremy, your

Unidentified Analyst

I John Hi, to earlier announced about products this if to you see you a wanted on study taking pipeline call I different? that capacity for talked wanted Jeremy. the is refined for July. in the related for question. just that's Thanks feasibility and how conference was progressing to in ask or the the

George Damiris

the to continue diesel we options Permian fuel. to Jeremy, evaluate with other supply

the that option. us. another we're the right There one series and for is is all way pursuing make options Midland a are time decision to Going we'll when of

Unidentified Analyst

one It has expect another third fourth Okay. for Dorado. conference And El like you're on effect looked that call, a I what some well. see mentioned expecting to in quarter. and on turnaround as Is moving the then in QX? that you quarter's -- quarter turnarounds around effect last know you into the maybe

George Damiris

Dorado early October planned all and you El like September end down was of the November. be of the down of Yeah, said came part and near to

that see the in quarterly next through results. you'll flow So

Rich Voliva

to not that's huge color, I’ll some a add impact. just

to through the see that volumes to in of year We rest some are lower around continuing and to see expect we the Woods just and the Cross supply. crude

the So bit. that both come on little a crude will side through and UNEV

Unidentified Analyst

Thank Okay. That’s all for I had. you answering.

Operator

Credit Spiro, Suisse. from do open. line's have your another we Dounis Spiro And from question

Spiro Dounis

taking for me again thanks again. Hey,

Just had one more.

other seem curious; of move, you you interests have out for taking SLC Cheyenne. have pipelines, been a out to in the Just working guys. believe two and good remaining pretty Osage And I has Frontier been

you for those ability option as interest Just pipelines curious take well? and there's if on an to additional in there guys

George Damiris

partners that There our a always out need That's they're obviously, a in of the expanding is interest would line potentially to but Cheyenne. make Guernsey willing to sell. possibility to decision

early very stages as as imminent. project. itself, acquisition the Evaluating But there. So far that nothing

Spiro Dounis

Got it. Appreciate guys. it. Thanks,

George Damiris

you. Thank

Operator

Jefferies. We line is from from Chris do Sighinolfi Chris, your question have another open.

Chris Sighinolfi

a lot. credit equity the you I on thanks closed. markets a Hey, had Rich, question know borrowings. talked just how facility are about

that. and cost on that. the terming still that thoughts debt just of curious carrying at around any been You've lowest assuming views for But that's point your just I'm out balance option a on you.

Rich Voliva

as with right interest cost a was alternative. it's rates Yes, year than is but far it our as source now. to rising it's lowest your more not best point, next attractive the that attractive financing Obviously, ago of

rate of see. the really typically given higher floating comfortable minimum you volume we debt holding feel HEP at underpinning balance than a we feel might strong So commitments

that intention stay the else So position I see term pretty No in think short-term. anything you'll stable. to

Chris Sighinolfi

a us, can And is remind you just rate? LIBOR-linked that Okay.

Rich Voliva

Yes.

Chris Sighinolfi

lot Thanks guys. Okay. a

Rich Voliva

Thank you.

Operator

Jared there floor over are I'll turn remarks. for back further closing the questions, to no If

Jared Harding

And Adam. if Feel today. have to Thanks, out you follow-ups. call to joining for free reach the thanks any everyone

Operator

does today's call. And this conclude conference

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

Holly Energy Partners (HEP) 30 Oct 182018 Q3 Earnings call transcript