Document Entity Information
Document Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-32225 | |
Entity Registrant Name | HOLLY ENERGY PARTNERS LP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-0833098 | |
Entity Address, Address Line One | 2828 N. Harwood, Suite 1300 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75201 | |
City Area Code | 214 | |
Local Phone Number | 871-3555 | |
Title of 12(b) Security | Common Limited Partner Units | |
Trading Symbol | HEP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 105,440,201 | |
Entity Central Index Key | 0001283140 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents (Cushing Connect VIEs: $10,773 and $6,842, respectively) | $ 18,913 | $ 13,287 |
Accounts receivable: | ||
Trade | 14,929 | 18,731 |
Affiliates | 49,847 | 49,716 |
Total accounts receivable | 64,776 | 68,447 |
Prepaid and other current assets | 7,905 | 7,629 |
Total current assets | 91,594 | 89,363 |
Properties and equipment, net (Cushing Connect VIEs: $25,832 and $2,916, respectively) | 1,458,934 | 1,467,099 |
Operating lease right-of-use assets | 3,377 | 3,255 |
Net Investment in Lease, Noncurrent | 168,153 | 134,886 |
Intangible assets, net | 94,318 | 101,322 |
Goodwill | 270,336 | 270,336 |
Equity method investments (Cushing Connect VIEs: $39,815 and $37,084, respectively) | 123,299 | 120,071 |
Other assets | 11,772 | 12,900 |
Total assets | 2,221,783 | 2,199,232 |
Accounts payable: | ||
Trade (Cushing Connect VIEs: $6,421 and $2,082, respectively) | 14,639 | 17,818 |
Affiliates | 7,286 | 16,737 |
Total accounts payable | 21,925 | 34,555 |
Accrued interest | 10,683 | 13,206 |
Deferred revenue | 11,002 | 10,390 |
Accrued property taxes | 5,526 | 3,799 |
Current maturities of operating leases | 1,213 | 1,126 |
Current maturities of finance leases | 3,293 | 3,224 |
Other current liabilities | 2,975 | 2,305 |
Total current liabilities | 56,617 | 68,605 |
Long-term debt | 1,486,648 | 1,462,031 |
Noncurrent operating lease liabilities | 2,530 | 2,482 |
Noncurrent finance lease liabilities | 70,039 | 70,475 |
Other long-term liabilities | 13,689 | 12,808 |
Deferred revenue | 42,692 | 45,681 |
Class B unit | 51,062 | 49,392 |
Partners’ equity: | ||
Common unitholders (105,440,201 units issued and outstanding at March 31, 2020 and December 31, 2019) | 380,723 | 381,103 |
Noncontrolling interest | 117,783 | 106,655 |
Total Equity | 498,506 | 487,758 |
Total liabilities and equity | 2,221,783 | 2,199,232 |
Total partners’ equity | $ 380,723 | $ 381,103 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents (Cushing Connect VIEs: $10,773 and $6,842, respectively) | $ 18,913 | $ 13,287 |
Properties and equipment, net (Cushing Connect VIEs: $25,832 and $2,916, respectively) | 1,458,934 | 1,467,099 |
Equity method investments (Cushing Connect VIEs: $39,815 and $37,084, respectively) | 123,299 | 120,071 |
Accounts Payable, Trade, Current | 14,639 | 17,818 |
Other current liabilities | $ 2,975 | $ 2,305 |
Partners' Equity: | ||
Common units issued (in shares) | 105,440,201 | 105,440,201 |
Common units outstanding (in shares) | 105,440,201 | 105,440,201 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents (Cushing Connect VIEs: $10,773 and $6,842, respectively) | $ 10,773 | $ 6,842 |
Properties and equipment, net (Cushing Connect VIEs: $25,832 and $2,916, respectively) | 25,832 | 2,916 |
Equity method investments (Cushing Connect VIEs: $39,815 and $37,084, respectively) | 39,815 | 37,084 |
Accounts Payable, Trade, Current | $ 6,421 | $ 2,082 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | Feb. 05, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Revenues: | |||||||
Revenues | $ 114,807 | $ 130,751 | $ 242,661 | $ 265,248 | |||
Operating costs and expenses: | |||||||
Operations (exclusive of depreciation and amortization) | 34,737 | 40,602 | 69,718 | 78,121 | |||
Depreciation and amortization | 25,034 | 24,247 | 49,012 | 48,071 | |||
General and administrative | 2,535 | 1,988 | 5,237 | 4,608 | |||
Total operating costs and expenses | 62,306 | 66,837 | 123,967 | 130,800 | |||
Operating income | 52,501 | 63,914 | 118,694 | 134,448 | |||
Other income (expense): | |||||||
Equity in earnings of equity method investments | 2,156 | 1,783 | 3,870 | 3,883 | |||
Interest expense | (13,779) | (19,230) | (31,546) | (38,252) | |||
Interest income | 2,813 | 551 | 5,031 | 1,079 | |||
Gain on Sales-type Leases | 33,834 | 0 | 33,834 | 0 | |||
Gain (Loss) on Extinguishment of Debt | $ 25,900 | 0 | 0 | (25,915) | 0 | ||
Gain (loss) on sale of assets and other | 468 | 111 | 974 | (199) | |||
Total other income (expense) | 25,492 | (16,785) | (13,752) | (33,489) | |||
Income before income taxes | 77,993 | 47,129 | 104,942 | 100,959 | |||
State income tax benefit (expense) | (39) | 30 | (76) | (6) | |||
Net Income | 77,954 | $ 26,912 | 47,159 | $ 53,794 | 104,866 | 100,953 | |
Allocation of net income attributable to noncontrolling interests | (1,484) | (1,469) | (3,535) | (4,081) | |||
Net income attributable to the partners | $ 76,470 | $ 45,690 | $ 101,331 | $ 96,872 | |||
Limited partners’ per unit interest in earnings—basic and diluted (in dollars per share) | $ 0.73 | $ 0.43 | $ 0.96 | $ 0.92 | |||
Weighted average limited partners’ units outstanding (in shares) | 105,440 | 105,440 | 105,440 | 105,440 | |||
Affiliates | |||||||
Revenues: | |||||||
Revenues | $ 95,563 | $ 102,369 | $ 196,991 | $ 205,728 | |||
Third parties | |||||||
Revenues: | |||||||
Revenues | $ 19,244 | $ 28,382 | $ 45,670 | $ 59,520 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 104,866 | $ 100,953 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 49,012 | 48,071 |
(Gain) loss on sale of assets | 797 | 48 |
Gain (Loss) on Extinguishment of Debt | (25,915) | 0 |
Gain on Sales-type Leases | 33,834 | 0 |
Amortization of deferred charges | 1,641 | 1,535 |
Equity-based compensation expense | 980 | 1,246 |
Equity in earnings of equity method investments, net of distributions | (1,298) | (526) |
(Increase) decrease in operating assets: | ||
Accounts receivable – trade | 3,803 | (2,742) |
Accounts receivable – affiliates | 131 | 704 |
Prepaid and other current assets | (216) | 426 |
Increase (decrease) in operating liabilities: | ||
Accounts payable – trade | 4,959 | 420 |
Accounts payable – affiliates | (9,452) | (6,489) |
Accrued interest | 2,523 | 27 |
Deferred revenue | (2,378) | (339) |
Accrued property taxes | 1,727 | 3,658 |
Other current liabilities | 669 | 0 |
Other, net | 1,137 | 3,733 |
Net cash provided by operating activities | 134,594 | 144,989 |
Cash flows from investing activities | ||
Additions to properties and equipment | (30,740) | (17,752) |
Payments to Acquire Interest in Joint Venture | (2,400) | 0 |
Proceeds from sale of assets | 816 | 194 |
Distributions in excess of equity in earnings of equity investments | 470 | 299 |
Net cash used for investing activities | 31,854 | 17,259 |
Cash flows from financing activities | ||
Borrowings under credit agreement | 168,000 | 175,000 |
Repayments of credit agreement borrowings | (138,500) | (156,500) |
Early Repayment of Senior Debt | (522,500) | 0 |
Proceeds from Issuance of Senior Long-term Debt | 500,000 | 0 |
Contributions from general partner | 435 | 0 |
Contribution from Joint Venture Partner | 13,263 | 0 |
Distributions to HEP unitholders | (102,979) | (136,207) |
Distributions to noncontrolling interests | (4,000) | (5,250) |
Payments on finance leases | (1,972) | (503) |
Payments of Debt Issuance Costs | (8,714) | 0 |
Payments for Repurchase of Other Equity | 0 | (255) |
Units withheld for tax withholding obligations | (147) | (119) |
Net cash used by financing activities | (97,114) | (123,834) |
Cash and cash equivalents | ||
Increase (decrease) for the period | 5,626 | 3,896 |
Beginning of period | 13,287 | 3,045 |
End of period | $ 18,913 | $ 6,941 |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) $ in Thousands | Total | Common Units | Noncontrolling Interest |
Balance, Beginning of Period at Dec. 31, 2018 | $ 515,561 | $ 427,435 | $ 88,126 |
Increase (Decrease) in Partners' Equity [Roll Forward] | |||
Distributions to HEP unitholders | (67,975) | (67,975) | |
Distributions to noncontrolling interest | (3,000) | (3,000) | |
Amortization of restricted and performance units | 661 | 661 | |
Class B unit accretion | (780) | (780) | |
Other | 814 | 814 | |
Net income | 53,794 | 51,962 | 1,832 |
Balance, End of Period at Mar. 31, 2019 | 499,075 | 412,117 | 86,958 |
Balance, Beginning of Period at Dec. 31, 2018 | 515,561 | 427,435 | 88,126 |
Increase (Decrease) in Partners' Equity [Roll Forward] | |||
Net income | 100,953 | ||
Balance, End of Period at Jun. 30, 2019 | 475,418 | 390,022 | 85,396 |
Balance, Beginning of Period at Mar. 31, 2019 | 499,075 | 412,117 | 86,958 |
Increase (Decrease) in Partners' Equity [Roll Forward] | |||
Distributions to HEP unitholders | (68,232) | (68,232) | |
Distributions to noncontrolling interest | (2,250) | (2,250) | |
Amortization of restricted and performance units | 585 | 585 | |
Class B unit accretion | (781) | (781) | |
Other | (138) | (138) | |
Net income | 47,159 | 46,471 | 688 |
Balance, End of Period at Jun. 30, 2019 | 475,418 | 390,022 | 85,396 |
Balance, Beginning of Period at Dec. 31, 2019 | 487,758 | 381,103 | 106,655 |
Increase (Decrease) in Partners' Equity [Roll Forward] | |||
Capital Contribution from Joint Venture Partner | 7,304 | 7,304 | |
Distributions to HEP unitholders | (68,519) | (68,519) | |
Distributions to noncontrolling interest | (3,000) | (3,000) | |
Amortization of restricted and performance units | 506 | 506 | |
Class B unit accretion | (835) | (835) | |
Other | 208 | 208 | |
Net income | 26,912 | 25,696 | 1,216 |
Balance, End of Period at Mar. 31, 2020 | 450,334 | 338,159 | 112,175 |
Balance, Beginning of Period at Dec. 31, 2019 | 487,758 | 381,103 | 106,655 |
Increase (Decrease) in Partners' Equity [Roll Forward] | |||
Net income | 104,866 | ||
Balance, End of Period at Jun. 30, 2020 | 498,506 | 380,723 | 117,783 |
Balance, Beginning of Period at Mar. 31, 2020 | 450,334 | 338,159 | 112,175 |
Increase (Decrease) in Partners' Equity [Roll Forward] | |||
Capital Contribution from Joint Venture Partner | 5,959 | 5,959 | |
Distributions to HEP unitholders | (34,460) | (34,460) | |
Distributions to noncontrolling interest | (1,000) | (1,000) | |
Amortization of restricted and performance units | 474 | 474 | |
Class B unit accretion | (835) | (835) | |
Other | 80 | 80 | |
Net income | 77,954 | 77,305 | 649 |
Balance, End of Period at Jun. 30, 2020 | $ 498,506 | $ 380,723 | $ 117,783 |
Description of Business and Pre
Description of Business and Presentation of Financial Statements | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Presentation of Financial Statements | Description of Business and Presentation of Financial Statements Holly Energy Partners, L.P. (“HEP”), together with its consolidated subsidiaries, is a publicly held master limited partnership. As of June 30, 2020 , HollyFrontier Corporation (“HFC”) and its subsidiaries own a 57% limited partner interest and the non-economic general partner interest in HEP. We commenced operations on July 13, 2004, upon the completion of our initial public offering. In these consolidated financial statements, the words “we,” “our,” “ours” and “us” refer to HEP unless the context otherwise indicates. On October 31, 2017, we closed on an equity restructuring transaction with HEP Logistics Holdings, L.P. (“HEP Logistics”), a wholly-owned subsidiary of HFC and the general partner of HEP, pursuant to which the incentive distribution rights ("IDRs") held by HEP Logistics were canceled, and HEP Logistics' 2% general partner interest in HEP was converted into a non-economic general partner interest in HEP. In consideration, we issued 37,250,000 of our common units to HEP Logistics. In addition, HEP Logistics agreed to waive $2.5 million of limited partner cash distributions for each of twelve consecutive quarters beginning with the first quarter the units issued as consideration were eligible to receive distributions. This waiver of limited partner cash distributions will expire after the cash distribution for the second quarter of 2020, which will be made during the third quarter of 2020. As a result of this transaction, no distributions were made on the general partner interest after October 31, 2017. We own and operate petroleum product and crude oil pipelines, terminal, tankage and loading rack facilities and refinery processing units that support refining and marketing operations of HFC and other refineries in the Mid-Continent, Southwest and Northwest regions of the United States. Additionally, we own a 75% interest in UNEV Pipeline, LLC (“UNEV”), a 50% interest in Osage Pipe Line Company, LLC (“Osage”), a 50% interest in Cheyenne Pipeline LLC, and a 50% interest in Cushing Connect Pipeline & Terminal LLC. On June 1, 2020, HFC announced plans to permanently cease petroleum refining operations at its Cheyenne Refinery and to convert certain assets at that refinery to renewable diesel production. HFC subsequently began winding down petroleum refining operations at its Cheyenne Refinery on August 3, 2020. As of June 30, 2020, our throughput agreement with HFC required minimum annualized payments to us of approximately $17.6 million related to our Cheyenne assets. During the third quarter of 2020, we expect to begin negotiations with HFC related to potential changes to our existing throughput agreement. The net book value of our Cheyenne assets as of June 30, 2020 was approximately $88.5 million , including $28.1 million of long-lived assets and $68.7 million of goodwill. Additionally, our annual goodwill impairment test is scheduled for the third quarter of 2020. Depending upon the outcome of negotiations related to our throughput agreement or other changes in anticipated commercial uses of our Cheyenne assets, such assets could be at risk of impairment in the future and such impairment charges could be material. We operate in two reportable segments, a Pipelines and Terminals segment and a Refinery Processing Unit segment. Disclosures around these segments are discussed in Note 15. We generate revenues by charging tariffs for transporting petroleum products and crude oil through our pipelines, by charging fees for terminalling and storing refined products and other hydrocarbons, providing other services at our storage tanks and terminals and by charging fees for processing hydrocarbon feedstocks through our refinery processing units. We do not take ownership of products that we transport, terminal, store or process, and therefore, we are not exposed directly to changes in commodity prices. The consolidated financial statements included herein have been prepared without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). The interim financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of our results for the interim periods. Such adjustments are considered to be of a normal recurring nature. Although certain notes and other information required by U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted, we believe that the disclosures in these consolidated financial statements are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019 . Results of operations for interim periods are not necessarily indicative of the results of operations that will be realized for the year ending December 31, 2020 . Principles of Consolidation and Common Control Transactions The consolidated financial statements include our accounts and those of subsidiaries and joint ventures that we control. All significant intercompany transactions and balances have been eliminated. Most of our acquisitions from HFC occurred while we were a consolidated variable interest entity (“VIE”) of HFC. Therefore, as an entity under common control with HFC, we recorded these acquisitions on our balance sheets at HFC's historical basis instead of our purchase price or fair value. Accounting Pronouncements Adopted During the Periods Presented Goodwill Impairment Testing In January 2017, Accounting Standard Update (“ASU”) 2017-04, “Simplifying the Test for Goodwill Impairment,” was issued amending the testing for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under this standard, goodwill impairment is measured as the excess of the carrying amount of the reporting unit over the related fair value. We adopted this standard effective in the second quarter of 2019, and the adoption of this standard had no effect on our financial condition, results of operations or cash flows. Leases In February 2016, ASU No. 2016-02, “Leases” (“ASC 842”) was issued requiring leases to be measured and recognized as a lease liability, with a corresponding right-of-use asset on the balance sheet. We adopted this standard effective January 1, 2019, and we elected to adopt using the modified retrospective transition method, whereby comparative prior period financial information will not be restated and will continue to be reported under the lease accounting standard in effect during those periods. We also elected practical expedients provided by the new standard, including the package of practical expedients and the short-term lease recognition practical expedient, which allow an entity to not recognize on the balance sheet leases with a term of 12 months or less. Upon adoption of this standard, we recognized $78.4 million of lease liabilities and corresponding right-of-use assets on our consolidated balance sheet. Adoption of this standard did not have a material impact on our results of operations or cash flows. See Notes 3 and 4 for additional information on our lease policies. Credit Losses Measurement In June 2016, ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” was issued requiring measurement of all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. We adopted this standard effective January 1, 2020, and adoption of the standard did not have a material impact on our financial condition, results of operations or cash flows. |
Investment in Joint Venture (No
Investment in Joint Venture (Notes) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Investment in Joint Venture On October 2, 2019, HEP Cushing LLC (“HEP Cushing”), a wholly-owned subsidiary of HEP, and Plains Marketing, L.P. (“PMLP”), a wholly-owned subsidiary of Plains All American Pipeline, L.P. (“Plains”), formed a 50/50 joint venture, Cushing Connect Pipeline & Terminal LLC (the “Cushing Connect Joint Venture”), for (i) the development and construction of a new 160,000 barrel per day common carrier crude oil pipeline (the “Cushing Connect Pipeline”) that will connect the Cushing, Oklahoma crude oil hub to the Tulsa, Oklahoma refining complex owned by a subsidiary of HFC and (ii) the ownership and operation of 1.5 million barrels of crude oil storage in Cushing, Oklahoma (the “ Cushing Connect JV Terminal”). The Cushing Connect JV Terminal was fully in service beginning in April 2020. The Cushing Connect Pipeline is expected to be in service during the first quarter of 2021. Long-term commercial agreements have been entered into to support the Cushing Connect Joint Venture assets. The Cushing Connect Joint Venture contracted with an affiliate of HEP to manage the construction and operation of the Cushing Connect Pipeline and with an affiliate of Plains to manage the operation of the Cushing Connect JV Terminal. The total Cushing Connect Joint Venture investment will be shared proportionately among the partners, and HEP estimates its share of the cost of the Cushing Connect JV Terminal contributed by Plains and Cushing Connect Pipeline construction costs will be approximately $65 million . The Cushing Connect Joint Venture legal entities are variable interest entities ("VIEs") as defined under GAAP. A VIE is a legal entity if it has any one of the following characteristics: (i) the entity does not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support; (ii) the at risk equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights. The Cushing Connect Joint Venture legal entities do not have sufficient equity at risk to finance their activities without additional financial support. Since HEP is constructing and will operate the Cushing Connect Pipeline, HEP has more ability to direct the activities that most significantly impact the financial performance of the Cushing Connect Joint Venture and Cushing Connect Pipeline legal entities. Therefore, HEP consolidates those legal entities. We do not have the ability to direct the activities that most significantly impact the Cushing Connect JV Terminal legal entity, and therefore, we account for our interest in the Cushing Connect JV Terminal legal entity using the equity method of accounting. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Revenues are generally recognized as products are shipped through our pipelines and terminals, feedstocks are processed through our refinery processing units or other services are rendered. The majority of our contracts with customers meet the definition of a lease since (1) performance of the contracts is dependent on specified property, plant, or equipment and (2) it is remote that one or more parties other than the customer will take more than a minor amount of the output associated with the specified property, plant, or equipment. Prior to the adoption of the new lease standard (see Note 1), we bifurcated the consideration received between lease and service revenue. The new lease standard allows the election of a practical expedient whereby a lessor does not have to separate non-lease (service) components from lease components under certain conditions. The majority of our contracts meet these conditions, and we have made this election for those contracts. Under this practical expedient, we treat the combined components as a single performance obligation in accordance with Accounting Standards Codification (“ASC”) 606, which largely codified ASU 2014-09, if the non-lease (service) component is the dominant component. If the lease component is the dominant component, we treat the combined components as a lease in accordance with ASC 842, which largely codified ASU 2016-02. Several of our contracts include incentive or reduced tariffs once a certain quarterly volume is met. Revenue from the variable element of these transactions is recognized based on the actual volumes shipped as it relates specifically to rendering the services during the applicable quarter. The majority of our long-term transportation contracts specify minimum volume requirements, whereby, we bill a customer for a minimum level of shipments in the event a customer ships below their contractual requirements. If there are no future performance obligations, we will recognize these deficiency payments in revenue. In certain of these throughput agreements, a customer may later utilize such shortfall billings as credit towards future volume shipments in excess of its minimum levels within its respective contractual shortfall make-up period. Such amounts represent an obligation to perform future services, which may be initially deferred and later recognized as revenue based on estimated future shipping levels, including the likelihood of a customer’s ability to utilize such amounts prior to the end of the contractual shortfall make-up period. We recognize the service portion of these deficiency payments in revenue when we do not expect we will be required to satisfy these performance obligations in the future based on the pattern of rights exercised by the customer. During the three and six months ended June 30, 2020 , we recognized $5.1 million and $12.6 million of these deficiency payments in revenue, of which none and $0.7 million , respectively, related to deficiency payments billed in prior periods. As of June 30, 2020 , deferred revenue reflected in our consolidated balance sheet related to shortfalls billed was $0.5 million . A contract liability exists when an entity is obligated to perform future services for a customer for which the entity has received consideration. Since HEP may be required to perform future services for these deficiency payments received, the deferred revenues on our balance sheets were considered contract liabilities. A contract asset exists when an entity has a right to consideration in exchange for goods or services transferred to a customer. Our consolidated balance sheets included the contract assets and liabilities in the table below: June 30, December 31, (In thousands) Contract assets $ 6,064 $ 5,675 Contract liabilities $ (500 ) $ (650 ) The contract assets and liabilities include both lease and service components. We did not recognize any revenue during the three months ended June 30, 2020 , that was previously included in contract liability as of December 31, 2019 , and we recognized $0.7 million of revenue during the six months ended June 30, 2020 , that was previously included in contract liability as of December 31, 2019 . We did not recognize any revenue during the three months ended June 30, 2019 , that was previously included in contract liability as of December 31, 2018 , and we recognized $0.6 million of revenue during the six months ended June 30, 2019 , that was previously included in contract liability as of December 31, 2018 . During the three and the six months ended June 30, 2020 , we also recognized $0.2 million and $0.4 million , respectively, of revenue included in contract assets at June 30, 2020 . As of June 30, 2020 , we expect to recognize $2.3 billion in revenue related to our unfulfilled performance obligations under the terms of our long-term throughput agreements and leases expiring in 2021 through 2036. These agreements generally provide for changes in the minimum revenue guarantees annually for increases or decreases in the Producer Price Index (“PPI”) or Federal Energy Regulatory Commission (“FERC”) index, with certain contracts having provisions that limit the level of the rate increases or decreases. We expect to recognize revenue for these unfulfilled performance obligations as shown in the table below (amounts shown in table include both service and lease revenues): Years Ending December 31, (In millions) Remainder of 2020 $ 185 2021 362 2022 332 2023 295 2024 257 2025 188 Thereafter 650 Total $ 2,269 Payment terms under our contracts with customers are consistent with industry norms and are typically payable within 10 to 30 days of the date of invoice. Disaggregated revenues were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Pipelines $ 58,954 $ 72,263 $ 129,426 $ 147,363 Terminals, tanks and loading racks 36,280 39,089 73,778 76,667 Refinery processing units 19,573 19,399 39,457 41,218 $ 114,807 $ 130,751 $ 242,661 $ 265,248 During the three and six months ended June 30, 2020 , lease revenues amounted to $86.3 million and $179.5 million , respectively, and service revenues amounted to $28.5 million and $63.2 million , respectively. Both of these revenues were recorded within affiliates and third parties revenues on our consolidated statement of income. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases We adopted ASC 842 effective January 1, 2019, and elected to adopt using the modified retrospective transition method and practical expedients, both of which are provided as options by the standard and further defined in Note 1. Lessee Accounting At inception, we determine if an arrangement is or contains a lease. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our payment obligation under the leasing arrangement. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable. As a lessee, we lease land, buildings, pipelines, transportation and other equipment to support our operations. These leases can be categorized into operating and finance leases. Operating leases are recorded in operating lease right-of-use assets and current and noncurrent operating lease liabilities on our consolidated balance sheet. Finance leases are included in properties and equipment, current finance lease liabilities and noncurrent finance lease liabilities on our consolidated balance sheet. When renewal options are defined in a lease, our lease term includes an option to extend the lease when it is reasonably certain we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet, and lease expense is accounted for on a straight-line basis. In addition, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. Our leases have remaining terms of less than 1 year to 25 years , some of which include options to extend the leases for up to 10 years . Finance Lease Obligations We have finance lease obligations related to vehicle leases with initial terms of 33 to 48 months. The total cost of assets under finance leases was $6.9 million and $7.0 million as of June 30, 2020 and December 31, 2019 , respectively, with accumulated depreciation of $3.4 million and $4.5 million as of June 30, 2020 and December 31, 2019 , respectively. We include depreciation of finance leases in depreciation and amortization in our consolidated statements of income. In addition, we have a finance lease obligation related to a pipeline lease with an initial term of 10 years with one remaining subsequent renewal option for an additional 10 years. Supplemental balance sheet information related to leases was as follows (in thousands, except for lease term and discount rate): June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use assets, net $ 3,377 3,255 Current operating lease liabilities 1,213 1,126 Noncurrent operating lease liabilities 2,530 2,482 Total operating lease liabilities $ 3,743 3,608 Finance leases: Properties and equipment $ 6,851 6,968 Accumulated amortization (3,358 ) (4,547 ) Properties and equipment, net $ 3,493 2,421 Current finance lease liabilities $ 3,293 3,224 Noncurrent finance lease liabilities 70,039 70,475 Total finance lease liabilities $ 73,332 73,699 Weighted average remaining lease term (in years) Operating leases 6.1 6.5 Finance leases 16.3 17.0 Weighted average discount rate Operating leases 4.8% 5.0% Finance leases 5.6% 6.0% Supplemental cash flow and other information related to leases were as follows: Six Months Ended 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows on operating leases $ 518 $ 3,589 Operating cash flows on finance leases $ 2,157 $ 51 Financing cash flows on finance leases $ 1,972 $ 503 Maturities of lease liabilities were as follows: June 30, 2020 Operating Finance (In thousands) 2020 $ 491 $ 3,865 2021 906 7,411 2022 627 7,285 2023 607 7,332 2024 494 6,856 2025 and thereafter 1,179 80,313 Total lease payments 4,304 113,062 Less: Imputed interest (561 ) (39,730 ) Total lease obligations 3,743 73,332 Less: Current lease liabilities (1,213 ) (3,293 ) Noncurrent lease liabilities $ 2,530 $ 70,039 The components of lease expense were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease costs $ 230 $ 1,798 $ 503 $ 3,568 Finance lease costs Amortization of assets 273 254 515 498 Interest on lease liabilities 1,040 24 2,077 51 Variable lease cost 46 35 95 71 Total net lease cost $ 1,589 $ 2,111 $ 3,190 $ 4,188 Lessor Accounting As discussed in Note 3, the majority of our contracts with customers meet the definition of a lease. See Note 3 for further discussion of the impact of adoption of this standard on our activities as a lessor. Customer contracts that contain leases are generally classified as either operating leases, direct finance leases or sales-type leases. We consider inputs such as the lease term, fair value of the underlying asset and residual value of the underlying assets when assessing the classification. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. HFC generally has the option to purchase assets located within HFC refinery boundaries, including refinery tankage, truck racks and refinery processing units, at fair market value when the related agreements expire. One of our throughput agreements with Delek was renewed during the three months ending June 30, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, we recognized a gain on sales-type leases during the three months ending June 30, 2020 composed of the following: (In thousands) Net investment in leases $ 35,319 Properties and equipment, net (1,485 ) Gain on sales-type leases $ 33,834 This sales-type lease transaction, including the related gain, was a non-cash transaction. Lease income recognized was as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease revenues $ 84,872 $ 94,783 $ 175,671 $ 188,287 Direct financing lease interest income 524 509 1,048 1,019 Gain on sales-type leases 33,834 — 33,834 — Sales-type lease interest income 2,286 — 3,940 — Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable 1,474 — 3,822 — For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments under our leases were as follows as of June 30, 2020 : Operating Finance Sales-type Years Ending December 31, (In thousands) Remainder of 2020 $ 155,376 $ 1,060 $ 6,198 2021 306,771 2,128 12,396 2022 304,315 2,145 12,396 2023 273,362 2,162 12,396 2024 235,280 2,179 12,396 2025 and thereafter 739,158 40,787 72,432 Total $ 2,014,262 $ 50,461 $ 128,214 Net investments in leases recorded on our balance sheet were composed of the following: June 30, 2020 December 31, 2019 Sales-type Leases Direct Financing Leases Sales-type Leases Direct Financing Leases (In thousands) (In thousands) Lease receivables (1) $ 92,041 $ 16,486 $ 68,457 $ 16,511 Unguaranteed residual assets 63,134 — 52,933 — Net investment in leases $ 155,175 $ 16,486 $ 121,390 $ 16,511 (1) Current portion of lease receivables included in prepaid and other current assets on the balance sheet. |
Leases | Leases We adopted ASC 842 effective January 1, 2019, and elected to adopt using the modified retrospective transition method and practical expedients, both of which are provided as options by the standard and further defined in Note 1. Lessee Accounting At inception, we determine if an arrangement is or contains a lease. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our payment obligation under the leasing arrangement. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable. As a lessee, we lease land, buildings, pipelines, transportation and other equipment to support our operations. These leases can be categorized into operating and finance leases. Operating leases are recorded in operating lease right-of-use assets and current and noncurrent operating lease liabilities on our consolidated balance sheet. Finance leases are included in properties and equipment, current finance lease liabilities and noncurrent finance lease liabilities on our consolidated balance sheet. When renewal options are defined in a lease, our lease term includes an option to extend the lease when it is reasonably certain we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet, and lease expense is accounted for on a straight-line basis. In addition, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. Our leases have remaining terms of less than 1 year to 25 years , some of which include options to extend the leases for up to 10 years . Finance Lease Obligations We have finance lease obligations related to vehicle leases with initial terms of 33 to 48 months. The total cost of assets under finance leases was $6.9 million and $7.0 million as of June 30, 2020 and December 31, 2019 , respectively, with accumulated depreciation of $3.4 million and $4.5 million as of June 30, 2020 and December 31, 2019 , respectively. We include depreciation of finance leases in depreciation and amortization in our consolidated statements of income. In addition, we have a finance lease obligation related to a pipeline lease with an initial term of 10 years with one remaining subsequent renewal option for an additional 10 years. Supplemental balance sheet information related to leases was as follows (in thousands, except for lease term and discount rate): June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use assets, net $ 3,377 3,255 Current operating lease liabilities 1,213 1,126 Noncurrent operating lease liabilities 2,530 2,482 Total operating lease liabilities $ 3,743 3,608 Finance leases: Properties and equipment $ 6,851 6,968 Accumulated amortization (3,358 ) (4,547 ) Properties and equipment, net $ 3,493 2,421 Current finance lease liabilities $ 3,293 3,224 Noncurrent finance lease liabilities 70,039 70,475 Total finance lease liabilities $ 73,332 73,699 Weighted average remaining lease term (in years) Operating leases 6.1 6.5 Finance leases 16.3 17.0 Weighted average discount rate Operating leases 4.8% 5.0% Finance leases 5.6% 6.0% Supplemental cash flow and other information related to leases were as follows: Six Months Ended 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows on operating leases $ 518 $ 3,589 Operating cash flows on finance leases $ 2,157 $ 51 Financing cash flows on finance leases $ 1,972 $ 503 Maturities of lease liabilities were as follows: June 30, 2020 Operating Finance (In thousands) 2020 $ 491 $ 3,865 2021 906 7,411 2022 627 7,285 2023 607 7,332 2024 494 6,856 2025 and thereafter 1,179 80,313 Total lease payments 4,304 113,062 Less: Imputed interest (561 ) (39,730 ) Total lease obligations 3,743 73,332 Less: Current lease liabilities (1,213 ) (3,293 ) Noncurrent lease liabilities $ 2,530 $ 70,039 The components of lease expense were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease costs $ 230 $ 1,798 $ 503 $ 3,568 Finance lease costs Amortization of assets 273 254 515 498 Interest on lease liabilities 1,040 24 2,077 51 Variable lease cost 46 35 95 71 Total net lease cost $ 1,589 $ 2,111 $ 3,190 $ 4,188 Lessor Accounting As discussed in Note 3, the majority of our contracts with customers meet the definition of a lease. See Note 3 for further discussion of the impact of adoption of this standard on our activities as a lessor. Customer contracts that contain leases are generally classified as either operating leases, direct finance leases or sales-type leases. We consider inputs such as the lease term, fair value of the underlying asset and residual value of the underlying assets when assessing the classification. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. HFC generally has the option to purchase assets located within HFC refinery boundaries, including refinery tankage, truck racks and refinery processing units, at fair market value when the related agreements expire. One of our throughput agreements with Delek was renewed during the three months ending June 30, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, we recognized a gain on sales-type leases during the three months ending June 30, 2020 composed of the following: (In thousands) Net investment in leases $ 35,319 Properties and equipment, net (1,485 ) Gain on sales-type leases $ 33,834 This sales-type lease transaction, including the related gain, was a non-cash transaction. Lease income recognized was as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease revenues $ 84,872 $ 94,783 $ 175,671 $ 188,287 Direct financing lease interest income 524 509 1,048 1,019 Gain on sales-type leases 33,834 — 33,834 — Sales-type lease interest income 2,286 — 3,940 — Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable 1,474 — 3,822 — For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments under our leases were as follows as of June 30, 2020 : Operating Finance Sales-type Years Ending December 31, (In thousands) Remainder of 2020 $ 155,376 $ 1,060 $ 6,198 2021 306,771 2,128 12,396 2022 304,315 2,145 12,396 2023 273,362 2,162 12,396 2024 235,280 2,179 12,396 2025 and thereafter 739,158 40,787 72,432 Total $ 2,014,262 $ 50,461 $ 128,214 Net investments in leases recorded on our balance sheet were composed of the following: June 30, 2020 December 31, 2019 Sales-type Leases Direct Financing Leases Sales-type Leases Direct Financing Leases (In thousands) (In thousands) Lease receivables (1) $ 92,041 $ 16,486 $ 68,457 $ 16,511 Unguaranteed residual assets 63,134 — 52,933 — Net investment in leases $ 155,175 $ 16,486 $ 121,390 $ 16,511 (1) Current portion of lease receivables included in prepaid and other current assets on the balance sheet. |
Leases | Leases We adopted ASC 842 effective January 1, 2019, and elected to adopt using the modified retrospective transition method and practical expedients, both of which are provided as options by the standard and further defined in Note 1. Lessee Accounting At inception, we determine if an arrangement is or contains a lease. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our payment obligation under the leasing arrangement. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable. As a lessee, we lease land, buildings, pipelines, transportation and other equipment to support our operations. These leases can be categorized into operating and finance leases. Operating leases are recorded in operating lease right-of-use assets and current and noncurrent operating lease liabilities on our consolidated balance sheet. Finance leases are included in properties and equipment, current finance lease liabilities and noncurrent finance lease liabilities on our consolidated balance sheet. When renewal options are defined in a lease, our lease term includes an option to extend the lease when it is reasonably certain we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet, and lease expense is accounted for on a straight-line basis. In addition, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. Our leases have remaining terms of less than 1 year to 25 years , some of which include options to extend the leases for up to 10 years . Finance Lease Obligations We have finance lease obligations related to vehicle leases with initial terms of 33 to 48 months. The total cost of assets under finance leases was $6.9 million and $7.0 million as of June 30, 2020 and December 31, 2019 , respectively, with accumulated depreciation of $3.4 million and $4.5 million as of June 30, 2020 and December 31, 2019 , respectively. We include depreciation of finance leases in depreciation and amortization in our consolidated statements of income. In addition, we have a finance lease obligation related to a pipeline lease with an initial term of 10 years with one remaining subsequent renewal option for an additional 10 years. Supplemental balance sheet information related to leases was as follows (in thousands, except for lease term and discount rate): June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use assets, net $ 3,377 3,255 Current operating lease liabilities 1,213 1,126 Noncurrent operating lease liabilities 2,530 2,482 Total operating lease liabilities $ 3,743 3,608 Finance leases: Properties and equipment $ 6,851 6,968 Accumulated amortization (3,358 ) (4,547 ) Properties and equipment, net $ 3,493 2,421 Current finance lease liabilities $ 3,293 3,224 Noncurrent finance lease liabilities 70,039 70,475 Total finance lease liabilities $ 73,332 73,699 Weighted average remaining lease term (in years) Operating leases 6.1 6.5 Finance leases 16.3 17.0 Weighted average discount rate Operating leases 4.8% 5.0% Finance leases 5.6% 6.0% Supplemental cash flow and other information related to leases were as follows: Six Months Ended 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows on operating leases $ 518 $ 3,589 Operating cash flows on finance leases $ 2,157 $ 51 Financing cash flows on finance leases $ 1,972 $ 503 Maturities of lease liabilities were as follows: June 30, 2020 Operating Finance (In thousands) 2020 $ 491 $ 3,865 2021 906 7,411 2022 627 7,285 2023 607 7,332 2024 494 6,856 2025 and thereafter 1,179 80,313 Total lease payments 4,304 113,062 Less: Imputed interest (561 ) (39,730 ) Total lease obligations 3,743 73,332 Less: Current lease liabilities (1,213 ) (3,293 ) Noncurrent lease liabilities $ 2,530 $ 70,039 The components of lease expense were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease costs $ 230 $ 1,798 $ 503 $ 3,568 Finance lease costs Amortization of assets 273 254 515 498 Interest on lease liabilities 1,040 24 2,077 51 Variable lease cost 46 35 95 71 Total net lease cost $ 1,589 $ 2,111 $ 3,190 $ 4,188 Lessor Accounting As discussed in Note 3, the majority of our contracts with customers meet the definition of a lease. See Note 3 for further discussion of the impact of adoption of this standard on our activities as a lessor. Customer contracts that contain leases are generally classified as either operating leases, direct finance leases or sales-type leases. We consider inputs such as the lease term, fair value of the underlying asset and residual value of the underlying assets when assessing the classification. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. HFC generally has the option to purchase assets located within HFC refinery boundaries, including refinery tankage, truck racks and refinery processing units, at fair market value when the related agreements expire. One of our throughput agreements with Delek was renewed during the three months ending June 30, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, we recognized a gain on sales-type leases during the three months ending June 30, 2020 composed of the following: (In thousands) Net investment in leases $ 35,319 Properties and equipment, net (1,485 ) Gain on sales-type leases $ 33,834 This sales-type lease transaction, including the related gain, was a non-cash transaction. Lease income recognized was as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease revenues $ 84,872 $ 94,783 $ 175,671 $ 188,287 Direct financing lease interest income 524 509 1,048 1,019 Gain on sales-type leases 33,834 — 33,834 — Sales-type lease interest income 2,286 — 3,940 — Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable 1,474 — 3,822 — For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments under our leases were as follows as of June 30, 2020 : Operating Finance Sales-type Years Ending December 31, (In thousands) Remainder of 2020 $ 155,376 $ 1,060 $ 6,198 2021 306,771 2,128 12,396 2022 304,315 2,145 12,396 2023 273,362 2,162 12,396 2024 235,280 2,179 12,396 2025 and thereafter 739,158 40,787 72,432 Total $ 2,014,262 $ 50,461 $ 128,214 Net investments in leases recorded on our balance sheet were composed of the following: June 30, 2020 December 31, 2019 Sales-type Leases Direct Financing Leases Sales-type Leases Direct Financing Leases (In thousands) (In thousands) Lease receivables (1) $ 92,041 $ 16,486 $ 68,457 $ 16,511 Unguaranteed residual assets 63,134 — 52,933 — Net investment in leases $ 155,175 $ 16,486 $ 121,390 $ 16,511 (1) Current portion of lease receivables included in prepaid and other current assets on the balance sheet. |
Leases | Leases We adopted ASC 842 effective January 1, 2019, and elected to adopt using the modified retrospective transition method and practical expedients, both of which are provided as options by the standard and further defined in Note 1. Lessee Accounting At inception, we determine if an arrangement is or contains a lease. Right-of-use assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our payment obligation under the leasing arrangement. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our estimated incremental borrowing rate (“IBR”) to determine the present value of lease payments as most of our leases do not contain an implicit rate. Our IBR represents the interest rate which we would pay to borrow, on a collateralized basis, an amount equal to the lease payments over a similar term in a similar economic environment. We use the implicit rate when readily determinable. As a lessee, we lease land, buildings, pipelines, transportation and other equipment to support our operations. These leases can be categorized into operating and finance leases. Operating leases are recorded in operating lease right-of-use assets and current and noncurrent operating lease liabilities on our consolidated balance sheet. Finance leases are included in properties and equipment, current finance lease liabilities and noncurrent finance lease liabilities on our consolidated balance sheet. When renewal options are defined in a lease, our lease term includes an option to extend the lease when it is reasonably certain we will exercise that option. Leases with a term of 12 months or less are not recorded on our balance sheet, and lease expense is accounted for on a straight-line basis. In addition, as a lessee, we separate non-lease components that are identifiable and exclude them from the determination of net present value of lease payment obligations. Our leases have remaining terms of less than 1 year to 25 years , some of which include options to extend the leases for up to 10 years . Finance Lease Obligations We have finance lease obligations related to vehicle leases with initial terms of 33 to 48 months. The total cost of assets under finance leases was $6.9 million and $7.0 million as of June 30, 2020 and December 31, 2019 , respectively, with accumulated depreciation of $3.4 million and $4.5 million as of June 30, 2020 and December 31, 2019 , respectively. We include depreciation of finance leases in depreciation and amortization in our consolidated statements of income. In addition, we have a finance lease obligation related to a pipeline lease with an initial term of 10 years with one remaining subsequent renewal option for an additional 10 years. Supplemental balance sheet information related to leases was as follows (in thousands, except for lease term and discount rate): June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use assets, net $ 3,377 3,255 Current operating lease liabilities 1,213 1,126 Noncurrent operating lease liabilities 2,530 2,482 Total operating lease liabilities $ 3,743 3,608 Finance leases: Properties and equipment $ 6,851 6,968 Accumulated amortization (3,358 ) (4,547 ) Properties and equipment, net $ 3,493 2,421 Current finance lease liabilities $ 3,293 3,224 Noncurrent finance lease liabilities 70,039 70,475 Total finance lease liabilities $ 73,332 73,699 Weighted average remaining lease term (in years) Operating leases 6.1 6.5 Finance leases 16.3 17.0 Weighted average discount rate Operating leases 4.8% 5.0% Finance leases 5.6% 6.0% Supplemental cash flow and other information related to leases were as follows: Six Months Ended 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows on operating leases $ 518 $ 3,589 Operating cash flows on finance leases $ 2,157 $ 51 Financing cash flows on finance leases $ 1,972 $ 503 Maturities of lease liabilities were as follows: June 30, 2020 Operating Finance (In thousands) 2020 $ 491 $ 3,865 2021 906 7,411 2022 627 7,285 2023 607 7,332 2024 494 6,856 2025 and thereafter 1,179 80,313 Total lease payments 4,304 113,062 Less: Imputed interest (561 ) (39,730 ) Total lease obligations 3,743 73,332 Less: Current lease liabilities (1,213 ) (3,293 ) Noncurrent lease liabilities $ 2,530 $ 70,039 The components of lease expense were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease costs $ 230 $ 1,798 $ 503 $ 3,568 Finance lease costs Amortization of assets 273 254 515 498 Interest on lease liabilities 1,040 24 2,077 51 Variable lease cost 46 35 95 71 Total net lease cost $ 1,589 $ 2,111 $ 3,190 $ 4,188 Lessor Accounting As discussed in Note 3, the majority of our contracts with customers meet the definition of a lease. See Note 3 for further discussion of the impact of adoption of this standard on our activities as a lessor. Customer contracts that contain leases are generally classified as either operating leases, direct finance leases or sales-type leases. We consider inputs such as the lease term, fair value of the underlying asset and residual value of the underlying assets when assessing the classification. Substantially all of the assets supporting contracts meeting the definition of a lease have long useful lives, and we believe these assets will continue to have value when the current agreements expire due to our risk management strategy for protecting the residual fair value of the underlying assets by performing ongoing maintenance during the lease term. HFC generally has the option to purchase assets located within HFC refinery boundaries, including refinery tankage, truck racks and refinery processing units, at fair market value when the related agreements expire. One of our throughput agreements with Delek was renewed during the three months ending June 30, 2020. Certain components of this agreement met the criteria of sales-type leases since the underlying assets are not expected to have an alternative use at the end of the lease term to anyone other than Delek. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease. Therefore, we recognized a gain on sales-type leases during the three months ending June 30, 2020 composed of the following: (In thousands) Net investment in leases $ 35,319 Properties and equipment, net (1,485 ) Gain on sales-type leases $ 33,834 This sales-type lease transaction, including the related gain, was a non-cash transaction. Lease income recognized was as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease revenues $ 84,872 $ 94,783 $ 175,671 $ 188,287 Direct financing lease interest income 524 509 1,048 1,019 Gain on sales-type leases 33,834 — 33,834 — Sales-type lease interest income 2,286 — 3,940 — Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable 1,474 — 3,822 — For our sales-type leases, we included customer obligations related to minimum volume requirements in guaranteed minimum lease payments. Portions of our minimum guaranteed pipeline tariffs for assets subject to sales-type lease accounting are recorded as interest income with the remaining amounts recorded as a reduction in net investment in leases. We recognized any billings for throughput volumes in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Annual minimum undiscounted lease payments under our leases were as follows as of June 30, 2020 : Operating Finance Sales-type Years Ending December 31, (In thousands) Remainder of 2020 $ 155,376 $ 1,060 $ 6,198 2021 306,771 2,128 12,396 2022 304,315 2,145 12,396 2023 273,362 2,162 12,396 2024 235,280 2,179 12,396 2025 and thereafter 739,158 40,787 72,432 Total $ 2,014,262 $ 50,461 $ 128,214 Net investments in leases recorded on our balance sheet were composed of the following: June 30, 2020 December 31, 2019 Sales-type Leases Direct Financing Leases Sales-type Leases Direct Financing Leases (In thousands) (In thousands) Lease receivables (1) $ 92,041 $ 16,486 $ 68,457 $ 16,511 Unguaranteed residual assets 63,134 — 52,933 — Net investment in leases $ 155,175 $ 16,486 $ 121,390 $ 16,511 (1) Current portion of lease receivables included in prepaid and other current assets on the balance sheet. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are derived using inputs (assumptions that market participants would use in pricing an asset or liability) including assumptions about risk. GAAP categorizes inputs used in fair value measurements into three broad levels as follows: • (Level 1) Quoted prices in active markets for identical assets or liabilities. • (Level 2) Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, similar assets and liabilities in markets that are not active or can be corroborated by observable market data. • (Level 3) Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes valuation techniques that involve significant unobservable inputs. Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and debt. The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturity of these instruments. Debt consists of outstanding principal under our revolving credit agreement (which approximates fair value as interest rates are reset frequently at current interest rates) and our fixed interest rate senior notes. The carrying amounts and estimated fair values of our senior notes were as follows: June 30, 2020 December 31, 2019 Financial Instrument Fair Value Input Level Carrying Value Fair Value Carrying Value Fair Value (In thousands) Liabilities: 6% Senior Notes Level 2 — — 496,531 522,045 5% Senior Notes Level 2 491,648 477,835 — — Level 2 Financial Instruments Our senior notes are measured at fair value using Level 2 inputs. The fair value of the senior notes is based on market values provided by a third-party bank, which were derived using market quotes for similar type debt instruments. See Note 9 for additional information. Non-Recurring Fair Value Measurements For gains on sales-type leases recognized during the second quarter of 2020, the estimated fair value of the underlying leased assets at contract inception and the present value of the estimated unguaranteed residual asset at the end of the lease term are used in determining the net investment in leases and related gain on sales-type leases recorded. The asset valuation estimates include Level 3 inputs based on a replacement cost valuation method. |
Properties and Equipment
Properties and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Properties and Equipment | Properties and Equipment The carrying amounts of our properties and equipment are as follows: June 30, December 31, (In thousands) Pipelines, terminals and tankage $ 1,610,916 $ 1,602,231 Refinery assets 349,030 348,093 Land and right of way 87,076 86,190 Construction in progress 30,892 10,930 Other 9,829 14,110 2,087,743 2,061,554 Less accumulated depreciation 628,809 594,455 $ 1,458,934 $ 1,467,099 We capitalized $24 thousand and $8 thousand during the six months ended June 30, 2020 and 2019 , respectively, in interest attributable to construction projects. Depreciation expense was $41.7 million and $41.3 million for the six months ended June 30, 2020 and 2019 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets include transportation agreements and customer relationships that represent a portion of the total purchase price of certain assets acquired from Delek in 2005, from HFC in 2008 prior to HEP becoming a consolidated VIE of HFC, from Plains in 2017, and from other minor acquisitions in 2018. The carrying amounts of our intangible assets are as follows: Useful Life June 30, December 31, (In thousands) Delek transportation agreement 30 years $ 59,933 $ 59,933 HFC transportation agreement 10-15 years 75,131 75,131 Customer relationships 10 years 69,683 69,683 Other 50 50 204,797 204,797 Less accumulated amortization 110,479 103,475 $ 94,318 $ 101,322 Amortization expense was $7.0 million for both of the six months ended June 30, 2020 and 2019 . We estimate amortization expense to be $14.0 million for each of the next two years, $9.9 million in 2023, and $9.1 million in 2024 and 2025. We have additional transportation agreements with HFC resulting from historical transactions consisting of pipeline, terminal and tankage assets contributed to us or acquired from HFC. These transactions occurred while we were a consolidated variable interest entity of HFC; therefore, our basis in these agreements is zero and does not reflect a step-up in basis to fair value. |
Employees, Retirement and Incen
Employees, Retirement and Incentive Plans | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Employees, Retirement and Incentive Plans | Employees, Retirement and Incentive Plans Direct support for our operations is provided by Holly Logistic Services, L.L.C. (“HLS”), an HFC subsidiary, which utilizes personnel employed by HFC who are dedicated to performing services for us. Their costs, including salaries, bonuses, payroll taxes, benefits and other direct costs, are charged to us monthly in accordance with an omnibus agreement that we have with HFC (the “Omnibus Agreement”). These employees participate in the retirement and benefit plans of HFC. Our share of retirement and benefit plan costs was $1.6 million and $1.7 million for the three months ended June 30, 2020 and 2019 , respectively, and $3.7 million for the six months ended June 30, 2020 and 2019 . Under HLS’s secondment agreement with HFC (the “Secondment Agreement”), certain employees of HFC are seconded to HLS to provide operational and maintenance services for certain of our processing, refining, pipeline and tankage assets, and HLS reimburses HFC for its prorated portion of the wages, benefits, and other costs related to these employees. We have a Long-Term Incentive Plan for employees and non-employee directors who perform services for us. The Long-Term Incentive Plan consists of four components: restricted or phantom units, performance units, unit options and unit appreciation rights. Our accounting policy for the recognition of compensation expense for awards with pro-rata vesting (a significant proportion of our awards) is to expense the costs ratably over the vesting periods. As of June 30, 2020 , we had two types of incentive-based awards outstanding, which are described below. The compensation cost charged against income was $0.5 million and $0.6 million for the three months ended June 30, 2020 and 2019 , respectively, and $1.0 million and $1.2 million for the six months ended June 30, 2020 and 2019 . We currently purchase units in the open market instead of issuing new units for settlement of all unit awards under our Long-Term Incentive Plan. As of June 30, 2020 , 2,500,000 units were authorized to be granted under our Long-Term Incentive Plan, of which 1,119,542 have not yet been granted, assuming no forfeitures of the unvested units and full achievement of goals for the unvested performance units. Restricted and Phantom Units Under our Long-Term Incentive Plan, we grant restricted units to non-employee directors and phantom units to selected employees who perform services for us, with most awards vesting over a period of one to three years. Although full ownership of the units does not transfer to the recipients until the units vest, the recipients have distribution rights on these units from the date of grant, and the recipients of the restricted units have voting rights on the restricted units from the date of grant. The fair value of each restricted or phantom unit award is measured at the market price as of the date of grant and is amortized on a straight-line basis over the requisite service period for each separately vesting portion of the award. A summary of restricted and phantom unit activity and changes during the six months ended June 30, 2020 , is presented below: Restricted and Phantom Units Units Weighted Average Grant-Date Fair Value Outstanding at January 1, 2020 (nonvested) 145,205 $ 26.22 Vesting and transfer of full ownership to recipients (4,397 ) 30.29 Forfeited (5,890 ) 25.33 Outstanding at June 30, 2020 (nonvested) 134,918 $ 26.13 The grant date fair values of phantom units that were vested and transferred to recipients during the six months ended June 30, 2020 were $0.1 million . No restricted or phantom units were vested and transferred to recipients during the six months ended June 30, 2019 . As of June 30, 2020 , there was $1.4 million of total unrecognized compensation expense related to unvested restricted and phantom unit grants, which is expected to be recognized over a weighted-average period of 1.2 years. Performance Units Under our Long-Term Incentive Plan, we grant performance units to selected officers who perform services for us. Performance units granted are payable in common units at the end of a three-year performance period based upon meeting certain criteria over the performance period. Under the terms of our performance unit grants, some awards are subject to the growth in our distributable cash flow per common unit over the performance period while other awards are subject to "financial performance" and "market performance." Financial performance is based on meeting certain earnings before interest, taxes, depreciation and amortization ("EBITDA") targets, while market performance is based on the relative standing of total unitholder return achieved by HEP compared to peer group companies. The number of units ultimately issued under these awards can range from 50% to 150% or 0% to 200%. As of June 30, 2020 , estimated unit payouts for outstanding nonvested performance unit awards ranged between 100% and 150% of the target number of performance units granted. We did not grant any performance units during the six months ended June 30, 2020 . Although common units are not transferred to the recipients until the performance units vest, the recipients have distribution rights with respect to the target number of performance units subject to the award from the date of grant at the same rate as distributions paid on our common units. A summary of performance unit activity and changes for the six months ended June 30, 2020 , is presented below: Performance Units Units Outstanding at January 1, 2020 (nonvested) 53,445 Vesting and transfer of common units to recipients (11,634 ) Outstanding at June 30, 2020 (nonvested) 41,811 The grant date fair value of performance units vested and transferred to recipients during the six months ended June 30, 2020 and 2019 was $0.4 million and $0.3 million , respectively. Based on the weighted-average fair value of performance units outstanding at June 30, 2020 , of $1.2 million , there was $0.4 million of total unrecognized compensation expense related to nonvested performance units, which is expected to be recognized over a weighted-average period of 1.6 years. During the six months ended June 30, 2020 , we did not purchase any of our common units in the open market for the issuance and settlement of unit awards under our Long-Term Incentive Plan. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Instruments [Abstract] | |
Debt | Debt Credit Agreement We have a $1.4 billion senior secured revolving credit facility (the “Credit Agreement”) expiring in July 2022. The Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments and working capital and for general partnership purposes. The Credit Agreement is also available to fund letters of credit up to a $50 million sub-limit, and it contains an accordion feature giving us the ability to increase the size of the facility by up to $300 million with additional lender commitments. Our obligations under the Credit Agreement are collateralized by substantially all of our assets, and indebtedness under the Credit Agreement is guaranteed by our material, wholly-owned subsidiaries. The Credit Agreement requires us to maintain compliance with certain financial covenants consisting of total leverage, senior secured leverage, and interest coverage. It also limits or restricts our ability to engage in certain activities. If, at any time prior to the expiration of the Credit Agreement, HEP obtains two investment grade credit ratings, the Credit Agreement will become unsecured and many of the covenants, limitations, and restrictions will be eliminated. We may prepay all loans at any time without penalty, except for tranche breakage costs. If an event of default exists under the Credit Agreement, the lenders will be able to accelerate the maturity of all loans outstanding and exercise other rights and remedies. We were in compliance with the covenants as of June 30, 2020 . Senior Notes As of December 31, 2019 , we had $500 million aggregate principal amount of 6% senior unsecured notes due in 2024 (the "6% Senior Notes") outstanding. The 6% Senior Notes were unsecured and imposed certain restrictive covenants, including limitations on our ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates and enter into mergers. On February 4, 2020, we closed a private placement of $500 million in aggregate principal amount of 5% senior unsecured notes due in 2028 (the "5% Senior Notes"). On February 5, 2020, we redeemed the existing $500 million 6% Senior Notes at a redemption cost of $522.5 million, at which time we recognized a $25.9 million early extinguishment loss consisting of a $22.5 million debt redemption premium and unamortized financing costs of $3.4 million . We funded the $522.5 million redemption with net proceeds from the issuance of our 5% Senior Notes and borrowings under our Credit Agreement. The 5% Senior Notes are unsecured and impose certain restrictive covenants, including limitations on our ability to incur additional indebtedness, make investments, sell assets, incur certain liens, pay distributions, enter into transactions with affiliates, and enter into mergers. We were in compliance with the restrictive covenants for the 5% Senior Notes as of June 30, 2020 . At any time when the 5% Senior Notes are rated investment grade by either Moody’s or Standard & Poor’s and no default or event of default exists, we will not be subject to many of the foregoing covenants. Additionally, we have certain redemption rights at varying premiums over face value under the 5% Senior Notes. Indebtedness under the 5% Senior Notes is guaranteed by all of our existing wholly-owned subsidiaries (other than Holly Energy Finance Corp. and certain immaterial subsidiaries). Long-term Debt The carrying amounts of our long-term debt was as follows: June 30, December 31, (In thousands) Credit Agreement Amount outstanding 995,000 $ 965,500 6% Senior Notes Principal — 500,000 Unamortized premium and debt issuance costs — (3,469 ) — 496,531 5% Senior Notes Principal 500,000 — Unamortized premium and debt issuance costs (8,352 ) — 491,648 — Total long-term debt $ 1,486,648 $ 1,462,031 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions We serve HFC’s refineries under long-term pipeline, terminal and tankage throughput agreements, and refinery processing unit tolling agreements expiring from 2021 to 2036 , and revenues from these agreements accounted for 83% and 81% of our total revenues for the three months and six months ended June 30, 2020 , respectively. Under these agreements, HFC agrees to transport, store and process throughput volumes of refined product, crude oil and feedstocks on our pipelines, terminals, tankage, loading rack facilities and refinery processing units that result in minimum annual payments to us. These minimum annual payments or revenues are subject to annual rate adjustments on July 1st each year generally based on increases or decreases in PPI or the FERC index. As of July 1, 2020, these agreements with HFC require minimum annualized payments to us of $351.1 million . If HFC fails to meet its minimum volume commitments under the agreements in any quarter, it will be required to pay us the amount of any shortfall in cash by the last day of the month following the end of the quarter. Under certain of these agreements, a shortfall payment may be applied as a credit in the following four quarters after its minimum obligations are met. Under certain provisions of the Omnibus Agreement, we pay HFC an annual administrative fee (currently $2.6 million ) for the provision by HFC or its affiliates of various general and administrative services to us. This fee does not include the salaries of personnel employed by HFC who perform services for us on behalf of HLS or the cost of their employee benefits, which are charged to us separately by HFC. Also, we reimburse HFC and its affiliates for direct expenses they incur on our behalf. Related party transactions with HFC are as follows: • Revenues received from HFC were $95.6 million and $102.4 million for the three months ended June 30, 2020 and 2019 , respectively, and $197.0 million and $205.7 million for the six months ended June 30, 2020 and 2019 , respectively. • HFC charged us general and administrative services under the Omnibus Agreement of $0.7 million and $0.6 million for the three months ended June 30, 2020 and 2019 , and $1.3 million for the six months ended June 30, 2020 and 2019 . • We reimbursed HFC for costs of employees supporting our operations of $13.2 million for the three months ended June 30, 2020 and 2019 , and $27.3 million and $26.8 million for the six months ended June 30, 2020 and 2019 . • HFC reimbursed us $0.9 million and $3.6 million for the three months ended June 30, 2020 and 2019 , respectively, for expense and capital projects, and $4.0 million and $5.8 million for the six months ended June 30, 2020 and 2019 . • We distributed $18.4 million and $37.5 million in the three months ended June 30, 2020 and 2019 , respectively, and $56.0 million and $74.8 million for the six months ended June 30, 2020 and 2019 , respectively, to HFC as regular distributions on its common units. • Accounts receivable from HFC were $49.8 million and $49.7 million at June 30, 2020 , and December 31, 2019 , respectively. • Accounts payable to HFC were $7.3 million and $16.7 million at June 30, 2020 , and December 31, 2019 , respectively. • Deferred revenue in the consolidated balance sheets at June 30, 2020 and December 31, 2019 , included $0.3 million and $0.5 million , respectively, relating to certain shortfall billings to HFC. • We received direct financing lease payments from HFC for use of our Artesia and Tulsa railyards of $0.5 million for the three months ended June 30, 2020 and 2019 , respectively, and $1.0 million for both the six months ended June 30, 2020 and 2019 . • We received sales-type lease payments of $2.4 million from HFC that were not included in revenues for the three months ended June 30, 2020 and no payments for the same period in 2019 , respectively, and $4.8 million for the six months ended June 30, 2020 and no payments for the same period in 2019 . • On October 31, 2017, we closed on an equity restructuring transaction with HEP Logistics, a wholly-owned subsidiary of HFC and the general partner of HEP, pursuant to which the incentive distribution rights held by HEP Logistics were canceled, and HEP Logistics' 2% general partner interest in HEP was converted into a non-economic general partner interest in HEP. In consideration, we issued 37,250,000 of our common units to HEP Logistics. In addition, HEP Logistics agreed to waive $2.5 million of limited partner cash distributions for each of twelve consecutive quarters beginning with the first quarter the units issued as consideration were eligible to receive distributions. This waiver of limited partner cash distributions will expire after the cash distribution for the second quarter of 2020, which will be made during the third quarter of 2020. |
Partners' Equity, Income Alloca
Partners' Equity, Income Allocations and Cash Distributions | 6 Months Ended |
Jun. 30, 2020 | |
Partners' Capital [Abstract] | |
Partners' Equity, Income Allocations and Cash Distributions | Partners’ Equity, Income Allocations and Cash Distributions As of June 30, 2020 , HFC held 59,630,030 of our common units, constituting a 57% limited partner interest in us, and held the non-economic general partner interest. Continuous Offering Program We have a continuous offering program under which we may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million . As of June 30, 2020 , HEP has issued 2,413,153 units under this program, providing $82.3 million in gross proceeds. Allocations of Net Income Net income attributable to HEP is allocated to the partners based on their weighted-average ownership percentage during the period. Cash Distributions On July 23, 2020 , we announced our cash distribution for the second quarter of 2020 of $0.35 per unit. The distribution is payable on all common units and will be paid August 13, 2020 , to all unitholders of record on August 3, 2020 . However, HEP Logistics waived $2.5 million in limited partner cash distributions due to them as discussed in Note 1. Our regular quarterly cash distribution to the limited partners will be $34.5 million for the three months ended June 30, 2020 and was $68.5 million for the three months ended June 30, 2019 . For the six months ended June 30, 2020 , the regular quarterly distribution to the limited partners will be $68.9 million and was $136.7 million for the six months ended June 30, 2019 . Our distributions are declared subsequent to quarter end; therefore, these amounts do not reflect distributions paid during the respective period. |
Net Income per Limited Partner
Net Income per Limited Partner Unit | 6 Months Ended |
Jun. 30, 2020 | |
Net Income per Limited Partner Unit [Abstract] | |
Net Income Per Limited Partner Unit | Net Income Per Limited Partner Unit Basic net income per unit applicable to the limited partners is calculated as net income attributable to the partners divided by the weighted average limited partners’ units outstanding. Diluted net income per unit assumes, when dilutive, the issuance of the net incremental units from restricted units, phantom units and performance units.To the extent net income attributable to the partners exceeds or is less than cash distributions, this difference is allocated to the partners based on their weighted-average ownership percentage during the period, after consideration of any priority allocations of earnings. Our dilutive securities are immaterial for all periods presented. Net income per limited partner unit is computed as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands, except per unit data) Net income attributable to the partners $ 76,470 $ 45,690 $ 101,331 $ 96,872 Weighted average limited partners' units outstanding 105,440 105,440 105,440 105,440 Limited partners' per unit interest in earnings - basic and diluted $ 0.73 $ 0.43 $ 0.96 $ 0.92 |
Environmental
Environmental | 6 Months Ended |
Jun. 30, 2020 | |
Accrual for Environmental Loss Contingencies [Abstract] | |
Environmental | Environmental We expensed $0.5 million and $0.7 million for the three and six months ended June 30, 2020 , for environmental remediation obligations, and we expensed $0.1 million for the three and six months ended June 30, 2019 . The accrued environmental liability, net of expected recoveries from indemnifying parties, reflected in our consolidated balance sheets was $5.7 million and $5.5 million at June 30, 2020 and December 31, 2019 , respectively, of which $3.5 million was classified as other long-term liabilities for both periods. These accruals include remediation and monitoring costs expected to be incurred over an extended period of time. Under the Omnibus Agreement and certain transportation agreements and purchase agreements with HFC, HFC has agreed to indemnify us, subject to certain monetary and time limitations, for environmental noncompliance and remediation liabilities associated with certain assets transferred to us from HFC and occurring or existing prior to the date of such transfers. Our consolidated balance sheets included additional accrued environmental liabilities of $0.4 million and $0.5 million for HFC indemnified liabilities for the periods ending June 30, 2020 and December 31, 2019 , respectively, and other assets included equal and offsetting balances representing amounts due from HFC related to indemnifications for environmental remediation liabilities. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies We are a party to various legal and regulatory proceedings, none of which we believe will have a material adverse impact on our financial condition, results of operations or cash flows. |
Operating Segments
Operating Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Operating Segments | Segment Information Although financial information is reviewed by our chief operating decision makers from a variety of perspectives, they view the business in two reportable operating segments: pipelines and terminals, and refinery processing units. These operating segments adhere to the accounting polices used for our consolidated financial statements. Pipelines and terminals have been aggregated as one reportable segment as both pipeline and terminals (1) have similar economic characteristics, (2) similarly provide logistics services of transportation and storage of petroleum products, (3) similarly support the petroleum refining business, including distribution of its products, (4) have principally the same customers and (5) are subject to similar regulatory requirements. We evaluate the performance of each segment based on its respective operating income. Certain general and administrative expenses and interest and financing costs are excluded from segment operating income as they are not directly attributable to a specific reportable segment. Identifiable assets are those used by the segment, whereas other assets are principally equity method investments, cash, deposits and other assets that are not associated with a specific reportable reportable segment. Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Revenues: Pipelines and terminals - affiliate $ 75,990 $ 82,970 $ 157,534 $ 164,510 Pipelines and terminals - third-party 19,244 28,382 45,670 59,520 Refinery processing units - affiliate 19,573 19,399 39,457 41,218 Total segment revenues $ 114,807 $ 130,751 $ 242,661 $ 265,248 Segment operating income: Pipelines and terminals $ 45,630 $ 57,936 $ 104,533 $ 121,168 Refinery processing units 9,406 7,966 19,398 17,888 Total segment operating income 55,036 65,902 123,931 139,056 Unallocated general and administrative expenses (2,535 ) (1,988 ) (5,237 ) (4,608 ) Interest and financing costs, net (10,966 ) (18,679 ) (26,515 ) (37,173 ) Loss on early extinguishment of debt — — (25,915 ) — Equity in earnings of equity method investments 2,156 1,783 3,870 3,883 Gain on sales-type leases 33,834 — 33,834 — Gain (loss) on sale of assets and other 468 111 974 (199 ) Income before income taxes $ 77,993 $ 47,129 $ 104,942 $ 100,959 Capital Expenditures: Pipelines and terminals $ 11,798 $ 7,034 $ 30,416 $ 17,752 Refinery processing units — — 324 — Total capital expenditures $ 11,798 $ 7,034 $ 30,740 $ 17,752 June 30, 2020 December 31, 2019 (In thousands) Identifiable assets: Pipelines and terminals (1) $ 1,765,038 $ 1,749,843 Refinery processing units 307,900 305,897 Other 148,845 143,492 Total identifiable assets $ 2,221,783 $ 2,199,232 (1) Includes goodwill of $270.3 million as of June 30, 2020 and December 31, 2019 . |
Supplemental Guarantor _ Non-Gu
Supplemental Guarantor / Non-Guarantor Financial Information | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Guarantor / Non-Guarantor Financial Information [Abstract] | |
Supplemental Guarantor / Non-Guarantor Financial Information | Supplemental Guarantor/Non-Guarantor Financial Information Obligations of HEP (“Parent”) under the 5% Senior Notes have been jointly and severally guaranteed by each of its direct and indirect 100% owned subsidiaries (“Guarantor Subsidiaries”). These guarantees are full and unconditional, subject to certain customary release provisions. These circumstances include (i) when a Guarantor Subsidiary is sold or sells all or substantially all of its assets, (ii) when a Guarantor Subsidiary is declared “unrestricted” for covenant purposes, (iii) when a Guarantor Subsidiary’s guarantee of other indebtedness is terminated or released and (iv) when the requirements for legal defeasance or covenant defeasance or to discharge the senior notes have been satisfied. The following financial information presents condensed consolidating balance sheets, statements of comprehensive income, and statements of cash flows of the Parent, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. The information has been presented as if the Parent accounted for its ownership in the Guarantor Subsidiaries, and the Guarantor Restricted Subsidiaries accounted for the ownership of the Non-Guarantor Non-Restricted Subsidiaries, using the equity method of accounting. Condensed Consolidating Balance Sheet June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 3,927 $ (766 ) $ 15,752 $ — $ 18,913 Accounts receivable — 58,197 7,840 (1,261 ) 64,776 Prepaid and other current assets 337 6,992 576 7,905 Total current assets 4,264 64,423 24,168 (1,261 ) 91,594 Properties and equipment, net — 1,110,139 348,795 — 1,458,934 Operating lease right-of-use assets 0 — 3,185 192 — 3,377 Net investment in leases — 168,153 — 168,153 Investment in subsidiaries 1,868,595 282,348 — (2,150,943 ) — Intangible assets, net — 94,318 — — 94,318 Goodwill — 270,336 — — 270,336 Equity method investments — 83,484 39,815 — 123,299 Other assets 5,497 6,275 — — 11,772 Total assets $ 1,878,356 $ 2,082,661 $ 412,970 $ (2,152,204 ) $ 2,221,783 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ — $ 14,343 $ 8,843 $ (1,261 ) $ 21,925 Accrued interest 10,683 — — — 10,683 Deferred revenue — 10,502 500 — 11,002 Accrued property taxes — 2,732 2,794 — 5,526 Current operating lease liabilities — 1,145 68 — 1,213 Current finance lease liabilities — 3,293 — — 3,293 Other current liabilities 42 2,819 114 — 2,975 Total current liabilities 10,725 34,834 12,319 (1,261 ) 56,617 Long-term debt 1,486,648 — — — 1,486,648 Noncurrent operating lease liabilities — 2,530 — — 2,530 Noncurrent finance lease liabilities — 70,039 — — 70,039 Other long-term liabilities 260 12,909 520 — 13,689 Deferred revenue — 42,692 — — 42,692 Class B unit — 51,062 — — 51,062 Equity - partners 380,723 1,868,595 282,348 (2,150,943 ) 380,723 Equity - noncontrolling interest — — 117,783 — 117,783 Total liabilities and equity $ 1,878,356 $ 2,082,661 $ 412,970 $ (2,152,204 ) $ 2,221,783 Condensed Consolidating Balance Sheet December 31, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 4,790 $ (709 ) $ 9,206 $ — $ 13,287 Accounts receivable — 60,229 8,549 (331 ) 68,447 Prepaid and other current assets 282 6,710 637 — 7,629 Total current assets 5,072 66,230 18,392 (331 ) 89,363 Properties and equipment, net — 1,133,534 333,565 — 1,467,099 Operating lease right-of-use assets — 3,243 12 — 3,255 Net investment in leases — 134,886 — — 134,886 Investment in subsidiaries 1,844,812 275,279 — (2,120,091 ) — Intangible assets, net — 101,322 — — 101,322 Goodwill — 270,336 — — 270,336 Equity method investments — 82,987 37,084 — 120,071 Other assets 6,722 6,178 — — 12,900 Total assets $ 1,856,606 $ 2,073,995 $ 389,053 $ (2,120,422 ) $ 2,199,232 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ — $ 29,895 $ 4,991 $ (331 ) $ 34,555 Accrued interest 13,206 — — — 13,206 Deferred revenue — 9,740 650 — 10,390 Accrued property taxes — 2,737 1,062 — 3,799 Current operating lease liabilities — 1,114 12 — 1,126 Current finance lease liabilities — 3,224 — — 3,224 Other current liabilities 6 2,293 6 — 2,305 Total current liabilities 13,212 49,003 6,721 (331 ) 68,605 Long-term debt 1,462,031 — — — 1,462,031 Noncurrent operating lease liabilities — 2,482 — — 2,482 Noncurrent finance lease liabilities — 70,475 — — 70,475 Other long-term liabilities 260 12,150 398 — 12,808 Deferred revenue — 45,681 — — 45,681 Class B unit — 49,392 — — 49,392 Equity - partners 381,103 1,844,812 275,279 (2,120,091 ) 381,103 Equity - noncontrolling interest — — 106,655 — 106,655 Total liabilities and equity $ 1,856,606 $ 2,073,995 $ 389,053 $ (2,120,422 ) $ 2,199,232 Condensed Consolidating Statement of Comprehensive Income Three Months Ended June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 89,417 $ 6,146 $ — $ 95,563 Third parties — 15,887 3,357 — 19,244 — 105,304 9,503 — 114,807 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 30,980 3,757 — 34,737 Depreciation and amortization — 20,739 4,295 — 25,034 General and administrative 780 1,755 — — 2,535 780 53,474 8,052 — 62,306 Operating income (loss) (780 ) 51,830 1,451 — 52,501 Other income (expense): Equity in earnings of subsidiaries 89,893 1,510 — (91,403 ) — Equity in earnings of equity method investments — 1,449 707 — 2,156 Interest expense (12,740 ) (1,039 ) — — (13,779 ) Interest income 26 2,787 — — 2,813 Gain on sales-type lease — 33,834 — — 33,834 Gain on sale of assets and other 71 396 1 — 468 77,250 38,937 708 (91,403 ) 25,492 Income before income taxes 76,470 90,767 2,159 (91,403 ) 77,993 State income tax expense — (39 ) — — (39 ) Net income 76,470 90,728 2,159 (91,403 ) 77,954 Allocation of net income attributable to noncontrolling interests — (835 ) (649 ) — (1,484 ) Net income attributable to the partners $ 76,470 $ 89,893 $ 1,510 $ (91,403 ) $ 76,470 Condensed Consolidating Statement of Comprehensive Income Three Months Ended June 30, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 96,221 $ 6,148 $ — $ 102,369 Third parties — 23,700 4,682 — 28,382 — 119,921 10,830 — 130,751 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 36,701 3,901 — 40,602 Depreciation and amortization 20,027 4,220 — 24,247 General and administrative 745 1,243 — — 1,988 745 57,971 8,121 — 66,837 Operating income (loss) (745 ) 61,950 2,709 — 63,914 Other income (expense): Equity in earnings of subsidiaries 65,431 2,063 — (67,494 ) — Equity in earnings of equity method investments — 1,783 — — 1,783 Interest expense (18,996 ) (234 ) — — (19,230 ) Interest income — 551 — — 551 Gain (loss) on sale of assets and other — 69 42 — 111 46,435 4,232 42 (67,494 ) (16,785 ) Income before income taxes 45,690 66,182 2,751 (67,494 ) 47,129 State income tax benefit — 30 — — 30 Net income 45,690 66,212 2,751 (67,494 ) 47,159 Allocation of net income attributable to noncontrolling interests — (781 ) (688 ) — (1,469 ) Net income attributable to the partners $ 45,690 $ 65,431 $ 2,063 $ (67,494 ) $ 45,690 Condensed Consolidating Statement of Comprehensive Income Six Months Ended June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 184,172 $ 12,819 $ — $ 196,991 Third parties — 35,042 10,628 — 45,670 — 219,214 23,447 — 242,661 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 62,111 7,607 — 69,718 Depreciation and amortization — 40,492 8,520 — 49,012 General and administrative 1,879 3,358 — — 5,237 1,879 105,961 16,127 — 123,967 Operating income (loss) (1,879 ) 113,253 7,320 — — 118,694 Other income (expense): Equity in earnings of subsidiaries 158,428 5,805 — (164,233 ) — Equity in earnings of equity method investments — 3,537 333 — — 3,870 Interest expense (29,470 ) (2,076 ) — — (31,546 ) Interest income 26 5,005 — — 5,031 Loss on early extinguishment of debt (25,915 ) — — — (25,915 ) Gain on sales-type lease — 33,834 — — 33,834 Gain on sale of assets and other 141 816 17 — — 974 103,210 46,921 350 (164,233 ) (13,752 ) Income before income taxes 101,331 160,174 7,670 (164,233 ) 104,942 State income tax expense — (76 ) — — (76 ) Net income 101,331 160,098 7,670 (164,233 ) 104,866 Allocation of net income attributable to noncontrolling interests — (1,670 ) (1,865 ) — (3,535 ) Net income attributable to the partners $ 101,331 $ 158,428 $ 5,805 $ (164,233 ) $ 101,331 Condensed Consolidating Statement of Comprehensive Income Six Months Ended June 30, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 193,614 $ 12,114 $ — $ 205,728 Third parties — 45,765 13,755 — 59,520 — 239,379 25,869 — 265,248 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 70,778 7,343 — 78,121 Depreciation and amortization 39,563 8,508 — 48,071 General and administrative 1,821 2,787 — — 4,608 1,821 113,128 15,851 — 130,800 Operating income (loss) (1,821 ) 126,251 10,018 — 134,448 Other income (expense): Equity in earnings of subsidiaries 136,730 7,559 — (144,289 ) — Equity in earnings of equity method investments — 3,883 — — — 3,883 Interest expense (38,037 ) (215 ) — — (38,252 ) Interest income — 1,079 — — — 1,079 Gain on sale of assets and other — (260 ) 61 — (199 ) 98,693 12,046 61 (144,289 ) (33,489 ) Income before income taxes 96,872 138,297 10,079 (144,289 ) 100,959 State income tax expense — (6 ) — — (6 ) Net income 96,872 138,291 10,079 (144,289 ) 100,953 Allocation of net income attributable to noncontrolling interests — (1,561 ) (2,520 ) — (4,081 ) Net income attributable to the partners $ 96,872 $ 136,730 $ 7,559 $ (144,289 ) $ 96,872 Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) Cash flows from operating activities $ (31,103 ) $ 151,331 $ 20,277 $ (5,911 ) $ 134,594 Cash flows from investing activities Additions to properties and equipment — (8,883 ) (21,857 ) — (30,740 ) Investment in Cushing Connect — (13,263 ) (2,400 ) 13,263 (2,400 ) Proceeds from sale of assets — 816 — — 816 Distributions in excess of equity in earnings of equity investments — 6,559 — (6,089 ) 470 — (14,771 ) (24,257 ) 7,174 (31,854 ) Cash flows from financing activities Net borrowings under credit agreement 29,500 — — — 29,500 Net intercompany financing activities 134,645 (134,645 ) — — — Redemption of senior notes (522,500 ) — — — (522,500 ) Proceeds from issuance of senior notes 500,000 — — — 500,000 Contribution from general partner 435 — 13,263 (13,263 ) 435 Contribution from noncontrolling interest — — 13,263 — 13,263 Distributions to HEP unitholders (102,979 ) — — — (102,979 ) Distributions to noncontrolling interests — — (16,000 ) 12,000 (4,000 ) Units withheld for tax withholding obligations (147 ) — — — (147 ) Deferred financing costs (8,714 ) — — — (8,714 ) Payments on finance leases — (1,972 ) — — (1,972 ) 30,240 (136,617 ) 10,526 (1,263 ) (97,114 ) Cash and cash equivalents Increase (decrease) for the period (863 ) (57 ) 6,546 — 5,626 Beginning of period 4,790 (709 ) 9,206 — 13,287 End of period $ 3,927 $ (766 ) $ 15,752 $ — $ 18,913 Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) Cash flows from operating activities $ (37,005 ) $ 165,882 $ 23,671 $ (7,559 ) $ 144,989 Cash flows from investing activities Additions to properties and equipment — (17,274 ) (478 ) — (17,752 ) Distributions from UNEV in excess of earnings — 8,191 — (8,191 ) — Proceeds from sale of assets — 194 — — 194 Distributions in excess of equity in earnings of equity investments — 299 — — 299 — (8,590 ) (478 ) (8,191 ) (17,259 ) Cash flows from financing activities Net borrowings under credit agreement 18,500 — — — 18,500 Net intercompany financing activities 155,225 (155,225 ) — — — Distributions to HEP unitholders (136,207 ) — — — (136,207 ) Distributions to noncontrolling interests — — (21,000 ) 15,750 (5,250 ) Units withheld for tax withholding obligations (119 ) — — — (119 ) Purchase units for incentive grants (255 ) — — (255 ) Payments on finance leases (139 ) (364 ) — — (503 ) 37,005 (155,589 ) (21,000 ) 15,750 (123,834 ) Cash and cash equivalents Increase for the period — 1,703 2,193 — 3,896 Beginning of period 2 — 3,043 — 3,045 End of period $ 2 $ 1,703 $ 5,236 $ — $ 6,941 |
Description of Business and P_2
Description of Business and Presentation of Financial Statements (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Credit Loss, Financial Instrument [Policy Text Block] | Credit Losses Measurement In June 2016, ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” was issued requiring measurement of all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. We adopted this standard effective January 1, 2020, and adoption of the standard did not have a material impact on our financial condition, results of operations or cash flows. |
Consolidation | Principles of Consolidation and Common Control Transactions The consolidated financial statements include our accounts and those of subsidiaries and joint ventures that we control. All significant intercompany transactions and balances have been eliminated. Most of our acquisitions from HFC occurred while we were a consolidated variable interest entity (“VIE”) of HFC. Therefore, as an entity under common control with HFC, we recorded these acquisitions on our balance sheets at HFC's historical basis instead of our purchase price or fair value. |
Goodwill Impairment Testing | Goodwill Impairment Testing In January 2017, Accounting Standard Update (“ASU”) 2017-04, “Simplifying the Test for Goodwill Impairment,” was issued amending the testing for goodwill impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under this standard, goodwill impairment is measured as the excess of the carrying amount of the reporting unit over the related fair value. We adopted this standard effective in the second quarter of 2019, and the adoption of this standard had no effect on our financial condition, results of operations or cash flows. |
Lessee, Leases | Leases In February 2016, ASU No. 2016-02, “Leases” (“ASC 842”) was issued requiring leases to be measured and recognized as a lease liability, with a corresponding right-of-use asset on the balance sheet. We adopted this standard effective January 1, 2019, and we elected to adopt using the modified retrospective transition method, whereby comparative prior period financial information will not be restated and will continue to be reported under the lease accounting standard in effect during those periods. We also elected practical expedients provided by the new standard, including the package of practical expedients and the short-term lease recognition practical expedient, which allow an entity to not recognize on the balance sheet leases with a term of 12 months or less. Upon adoption of this standard, we recognized $78.4 million of lease liabilities and corresponding right-of-use assets on our consolidated balance sheet. Adoption of this standard did not have a material impact on our results of operations or cash flows. See Notes 3 and 4 for additional information on our lease policies. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Asset and Contract Liability Balances | Our consolidated balance sheets included the contract assets and liabilities in the table below: June 30, December 31, (In thousands) Contract assets $ 6,064 $ 5,675 Contract liabilities $ (500 ) $ (650 ) |
Schedule of Future Performance Obligations | We expect to recognize revenue for these unfulfilled performance obligations as shown in the table below (amounts shown in table include both service and lease revenues): Years Ending December 31, (In millions) Remainder of 2020 $ 185 2021 362 2022 332 2023 295 2024 257 2025 188 Thereafter 650 Total $ 2,269 |
Schedule of Disaggregated Revenue | Disaggregated revenues were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Pipelines $ 58,954 $ 72,263 $ 129,426 $ 147,363 Terminals, tanks and loading racks 36,280 39,089 73,778 76,667 Refinery processing units 19,573 19,399 39,457 41,218 $ 114,807 $ 130,751 $ 242,661 $ 265,248 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases was as follows (in thousands, except for lease term and discount rate): June 30, 2020 December 31, 2019 Operating leases: Operating lease right-of-use assets, net $ 3,377 3,255 Current operating lease liabilities 1,213 1,126 Noncurrent operating lease liabilities 2,530 2,482 Total operating lease liabilities $ 3,743 3,608 Finance leases: Properties and equipment $ 6,851 6,968 Accumulated amortization (3,358 ) (4,547 ) Properties and equipment, net $ 3,493 2,421 Current finance lease liabilities $ 3,293 3,224 Noncurrent finance lease liabilities 70,039 70,475 Total finance lease liabilities $ 73,332 73,699 Weighted average remaining lease term (in years) Operating leases 6.1 6.5 Finance leases 16.3 17.0 Weighted average discount rate Operating leases 4.8% 5.0% Finance leases 5.6% 6.0% |
Schedule of Supplemental Cash Flow Information and Components of Lease Expense | The components of lease expense were as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease costs $ 230 $ 1,798 $ 503 $ 3,568 Finance lease costs Amortization of assets 273 254 515 498 Interest on lease liabilities 1,040 24 2,077 51 Variable lease cost 46 35 95 71 Total net lease cost $ 1,589 $ 2,111 $ 3,190 $ 4,188 Supplemental cash flow and other information related to leases were as follows: Six Months Ended 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows on operating leases $ 518 $ 3,589 Operating cash flows on finance leases $ 2,157 $ 51 Financing cash flows on finance leases $ 1,972 $ 503 |
Sales-Type Lease, Gain Recognized | Therefore, we recognized a gain on sales-type leases during the three months ending June 30, 2020 composed of the following: (In thousands) Net investment in leases $ 35,319 Properties and equipment, net (1,485 ) Gain on sales-type leases $ 33,834 |
Schedule of Operating Lease Maturities | Maturities of lease liabilities were as follows: June 30, 2020 Operating Finance (In thousands) 2020 $ 491 $ 3,865 2021 906 7,411 2022 627 7,285 2023 607 7,332 2024 494 6,856 2025 and thereafter 1,179 80,313 Total lease payments 4,304 113,062 Less: Imputed interest (561 ) (39,730 ) Total lease obligations 3,743 73,332 Less: Current lease liabilities (1,213 ) (3,293 ) Noncurrent lease liabilities $ 2,530 $ 70,039 |
Schedule of Finance Lease Maturities | Maturities of lease liabilities were as follows: June 30, 2020 Operating Finance (In thousands) 2020 $ 491 $ 3,865 2021 906 7,411 2022 627 7,285 2023 607 7,332 2024 494 6,856 2025 and thereafter 1,179 80,313 Total lease payments 4,304 113,062 Less: Imputed interest (561 ) (39,730 ) Total lease obligations 3,743 73,332 Less: Current lease liabilities (1,213 ) (3,293 ) Noncurrent lease liabilities $ 2,530 $ 70,039 |
Schedule of Lease Income | Lease income recognized was as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Operating lease revenues $ 84,872 $ 94,783 $ 175,671 $ 188,287 Direct financing lease interest income 524 509 1,048 1,019 Gain on sales-type leases 33,834 — 33,834 — Sales-type lease interest income 2,286 — 3,940 — Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable 1,474 — 3,822 — |
Schedule of Minimum Undiscounted Lease Payments | Annual minimum undiscounted lease payments under our leases were as follows as of June 30, 2020 : Operating Finance Sales-type Years Ending December 31, (In thousands) Remainder of 2020 $ 155,376 $ 1,060 $ 6,198 2021 306,771 2,128 12,396 2022 304,315 2,145 12,396 2023 273,362 2,162 12,396 2024 235,280 2,179 12,396 2025 and thereafter 739,158 40,787 72,432 Total $ 2,014,262 $ 50,461 $ 128,214 |
Schedule of Net Investment in Leases | Net investments in leases recorded on our balance sheet were composed of the following: June 30, 2020 December 31, 2019 Sales-type Leases Direct Financing Leases Sales-type Leases Direct Financing Leases (In thousands) (In thousands) Lease receivables (1) $ 92,041 $ 16,486 $ 68,457 $ 16,511 Unguaranteed residual assets 63,134 — 52,933 — Net investment in leases $ 155,175 $ 16,486 $ 121,390 $ 16,511 (1) Current portion of lease receivables included in prepaid and other current assets on the balance sheet. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Financial Instruments Measured on Recurring Basis | The carrying amounts and estimated fair values of our senior notes were as follows: June 30, 2020 December 31, 2019 Financial Instrument Fair Value Input Level Carrying Value Fair Value Carrying Value Fair Value (In thousands) Liabilities: 6% Senior Notes Level 2 — — 496,531 522,045 5% Senior Notes Level 2 491,648 477,835 — — |
Properties and Equipment (Table
Properties and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Properties and Equipment | The carrying amounts of our properties and equipment are as follows: June 30, December 31, (In thousands) Pipelines, terminals and tankage $ 1,610,916 $ 1,602,231 Refinery assets 349,030 348,093 Land and right of way 87,076 86,190 Construction in progress 30,892 10,930 Other 9,829 14,110 2,087,743 2,061,554 Less accumulated depreciation 628,809 594,455 $ 1,458,934 $ 1,467,099 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets by Major Class | The carrying amounts of our intangible assets are as follows: Useful Life June 30, December 31, (In thousands) Delek transportation agreement 30 years $ 59,933 $ 59,933 HFC transportation agreement 10-15 years 75,131 75,131 Customer relationships 10 years 69,683 69,683 Other 50 50 204,797 204,797 Less accumulated amortization 110,479 103,475 $ 94,318 $ 101,322 |
Employees, Retirement and Inc_2
Employees, Retirement and Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | A summary of restricted and phantom unit activity and changes during the six months ended June 30, 2020 , is presented below: Restricted and Phantom Units Units Weighted Average Grant-Date Fair Value Outstanding at January 1, 2020 (nonvested) 145,205 $ 26.22 Vesting and transfer of full ownership to recipients (4,397 ) 30.29 Forfeited (5,890 ) 25.33 Outstanding at June 30, 2020 (nonvested) 134,918 $ 26.13 |
Schedule of Nonvested Performance-based Units Activity | A summary of performance unit activity and changes for the six months ended June 30, 2020 , is presented below: Performance Units Units Outstanding at January 1, 2020 (nonvested) 53,445 Vesting and transfer of common units to recipients (11,634 ) Outstanding at June 30, 2020 (nonvested) 41,811 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Instruments [Abstract] | |
Schedule of Long-term Debt Instruments | The carrying amounts of our long-term debt was as follows: June 30, December 31, (In thousands) Credit Agreement Amount outstanding 995,000 $ 965,500 6% Senior Notes Principal — 500,000 Unamortized premium and debt issuance costs — (3,469 ) — 496,531 5% Senior Notes Principal 500,000 — Unamortized premium and debt issuance costs (8,352 ) — 491,648 — Total long-term debt $ 1,486,648 $ 1,462,031 |
Net Income per Limited Partne_2
Net Income per Limited Partner Unit (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Net Income per Limited Partner Unit [Abstract] | |
Schedule of Allocation to Limited Partner Interest in Net Income | Net income per limited partner unit is computed as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands, except per unit data) Net income attributable to the partners $ 76,470 $ 45,690 $ 101,331 $ 96,872 Weighted average limited partners' units outstanding 105,440 105,440 105,440 105,440 Limited partners' per unit interest in earnings - basic and diluted $ 0.73 $ 0.43 $ 0.96 $ 0.92 |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Three Months Ended Six Months Ended 2020 2019 2020 2019 (In thousands) Revenues: Pipelines and terminals - affiliate $ 75,990 $ 82,970 $ 157,534 $ 164,510 Pipelines and terminals - third-party 19,244 28,382 45,670 59,520 Refinery processing units - affiliate 19,573 19,399 39,457 41,218 Total segment revenues $ 114,807 $ 130,751 $ 242,661 $ 265,248 Segment operating income: Pipelines and terminals $ 45,630 $ 57,936 $ 104,533 $ 121,168 Refinery processing units 9,406 7,966 19,398 17,888 Total segment operating income 55,036 65,902 123,931 139,056 Unallocated general and administrative expenses (2,535 ) (1,988 ) (5,237 ) (4,608 ) Interest and financing costs, net (10,966 ) (18,679 ) (26,515 ) (37,173 ) Loss on early extinguishment of debt — — (25,915 ) — Equity in earnings of equity method investments 2,156 1,783 3,870 3,883 Gain on sales-type leases 33,834 — 33,834 — Gain (loss) on sale of assets and other 468 111 974 (199 ) Income before income taxes $ 77,993 $ 47,129 $ 104,942 $ 100,959 Capital Expenditures: Pipelines and terminals $ 11,798 $ 7,034 $ 30,416 $ 17,752 Refinery processing units — — 324 — Total capital expenditures $ 11,798 $ 7,034 $ 30,740 $ 17,752 June 30, 2020 December 31, 2019 (In thousands) Identifiable assets: Pipelines and terminals (1) $ 1,765,038 $ 1,749,843 Refinery processing units 307,900 305,897 Other 148,845 143,492 Total identifiable assets $ 2,221,783 $ 2,199,232 (1) Includes goodwill of $270.3 million as of June 30, 2020 and December 31, 2019 . |
Supplemental Guarantor _ Non-_2
Supplemental Guarantor / Non-Guarantor Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Guarantor / Non-Guarantor Financial Information [Abstract] | |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 3,927 $ (766 ) $ 15,752 $ — $ 18,913 Accounts receivable — 58,197 7,840 (1,261 ) 64,776 Prepaid and other current assets 337 6,992 576 7,905 Total current assets 4,264 64,423 24,168 (1,261 ) 91,594 Properties and equipment, net — 1,110,139 348,795 — 1,458,934 Operating lease right-of-use assets 0 — 3,185 192 — 3,377 Net investment in leases — 168,153 — 168,153 Investment in subsidiaries 1,868,595 282,348 — (2,150,943 ) — Intangible assets, net — 94,318 — — 94,318 Goodwill — 270,336 — — 270,336 Equity method investments — 83,484 39,815 — 123,299 Other assets 5,497 6,275 — — 11,772 Total assets $ 1,878,356 $ 2,082,661 $ 412,970 $ (2,152,204 ) $ 2,221,783 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ — $ 14,343 $ 8,843 $ (1,261 ) $ 21,925 Accrued interest 10,683 — — — 10,683 Deferred revenue — 10,502 500 — 11,002 Accrued property taxes — 2,732 2,794 — 5,526 Current operating lease liabilities — 1,145 68 — 1,213 Current finance lease liabilities — 3,293 — — 3,293 Other current liabilities 42 2,819 114 — 2,975 Total current liabilities 10,725 34,834 12,319 (1,261 ) 56,617 Long-term debt 1,486,648 — — — 1,486,648 Noncurrent operating lease liabilities — 2,530 — — 2,530 Noncurrent finance lease liabilities — 70,039 — — 70,039 Other long-term liabilities 260 12,909 520 — 13,689 Deferred revenue — 42,692 — — 42,692 Class B unit — 51,062 — — 51,062 Equity - partners 380,723 1,868,595 282,348 (2,150,943 ) 380,723 Equity - noncontrolling interest — — 117,783 — 117,783 Total liabilities and equity $ 1,878,356 $ 2,082,661 $ 412,970 $ (2,152,204 ) $ 2,221,783 Condensed Consolidating Balance Sheet December 31, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) ASSETS Current assets: Cash and cash equivalents $ 4,790 $ (709 ) $ 9,206 $ — $ 13,287 Accounts receivable — 60,229 8,549 (331 ) 68,447 Prepaid and other current assets 282 6,710 637 — 7,629 Total current assets 5,072 66,230 18,392 (331 ) 89,363 Properties and equipment, net — 1,133,534 333,565 — 1,467,099 Operating lease right-of-use assets — 3,243 12 — 3,255 Net investment in leases — 134,886 — — 134,886 Investment in subsidiaries 1,844,812 275,279 — (2,120,091 ) — Intangible assets, net — 101,322 — — 101,322 Goodwill — 270,336 — — 270,336 Equity method investments — 82,987 37,084 — 120,071 Other assets 6,722 6,178 — — 12,900 Total assets $ 1,856,606 $ 2,073,995 $ 389,053 $ (2,120,422 ) $ 2,199,232 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ — $ 29,895 $ 4,991 $ (331 ) $ 34,555 Accrued interest 13,206 — — — 13,206 Deferred revenue — 9,740 650 — 10,390 Accrued property taxes — 2,737 1,062 — 3,799 Current operating lease liabilities — 1,114 12 — 1,126 Current finance lease liabilities — 3,224 — — 3,224 Other current liabilities 6 2,293 6 — 2,305 Total current liabilities 13,212 49,003 6,721 (331 ) 68,605 Long-term debt 1,462,031 — — — 1,462,031 Noncurrent operating lease liabilities — 2,482 — — 2,482 Noncurrent finance lease liabilities — 70,475 — — 70,475 Other long-term liabilities 260 12,150 398 — 12,808 Deferred revenue — 45,681 — — 45,681 Class B unit — 49,392 — — 49,392 Equity - partners 381,103 1,844,812 275,279 (2,120,091 ) 381,103 Equity - noncontrolling interest — — 106,655 — 106,655 Total liabilities and equity $ 1,856,606 $ 2,073,995 $ 389,053 $ (2,120,422 ) $ 2,199,232 |
Condensed Consolidating Statement of Comprehensive Income | Condensed Consolidating Statement of Comprehensive Income Three Months Ended June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 89,417 $ 6,146 $ — $ 95,563 Third parties — 15,887 3,357 — 19,244 — 105,304 9,503 — 114,807 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 30,980 3,757 — 34,737 Depreciation and amortization — 20,739 4,295 — 25,034 General and administrative 780 1,755 — — 2,535 780 53,474 8,052 — 62,306 Operating income (loss) (780 ) 51,830 1,451 — 52,501 Other income (expense): Equity in earnings of subsidiaries 89,893 1,510 — (91,403 ) — Equity in earnings of equity method investments — 1,449 707 — 2,156 Interest expense (12,740 ) (1,039 ) — — (13,779 ) Interest income 26 2,787 — — 2,813 Gain on sales-type lease — 33,834 — — 33,834 Gain on sale of assets and other 71 396 1 — 468 77,250 38,937 708 (91,403 ) 25,492 Income before income taxes 76,470 90,767 2,159 (91,403 ) 77,993 State income tax expense — (39 ) — — (39 ) Net income 76,470 90,728 2,159 (91,403 ) 77,954 Allocation of net income attributable to noncontrolling interests — (835 ) (649 ) — (1,484 ) Net income attributable to the partners $ 76,470 $ 89,893 $ 1,510 $ (91,403 ) $ 76,470 Condensed Consolidating Statement of Comprehensive Income Three Months Ended June 30, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 96,221 $ 6,148 $ — $ 102,369 Third parties — 23,700 4,682 — 28,382 — 119,921 10,830 — 130,751 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 36,701 3,901 — 40,602 Depreciation and amortization 20,027 4,220 — 24,247 General and administrative 745 1,243 — — 1,988 745 57,971 8,121 — 66,837 Operating income (loss) (745 ) 61,950 2,709 — 63,914 Other income (expense): Equity in earnings of subsidiaries 65,431 2,063 — (67,494 ) — Equity in earnings of equity method investments — 1,783 — — 1,783 Interest expense (18,996 ) (234 ) — — (19,230 ) Interest income — 551 — — 551 Gain (loss) on sale of assets and other — 69 42 — 111 46,435 4,232 42 (67,494 ) (16,785 ) Income before income taxes 45,690 66,182 2,751 (67,494 ) 47,129 State income tax benefit — 30 — — 30 Net income 45,690 66,212 2,751 (67,494 ) 47,159 Allocation of net income attributable to noncontrolling interests — (781 ) (688 ) — (1,469 ) Net income attributable to the partners $ 45,690 $ 65,431 $ 2,063 $ (67,494 ) $ 45,690 Condensed Consolidating Statement of Comprehensive Income Six Months Ended June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 184,172 $ 12,819 $ — $ 196,991 Third parties — 35,042 10,628 — 45,670 — 219,214 23,447 — 242,661 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 62,111 7,607 — 69,718 Depreciation and amortization — 40,492 8,520 — 49,012 General and administrative 1,879 3,358 — — 5,237 1,879 105,961 16,127 — 123,967 Operating income (loss) (1,879 ) 113,253 7,320 — — 118,694 Other income (expense): Equity in earnings of subsidiaries 158,428 5,805 — (164,233 ) — Equity in earnings of equity method investments — 3,537 333 — — 3,870 Interest expense (29,470 ) (2,076 ) — — (31,546 ) Interest income 26 5,005 — — 5,031 Loss on early extinguishment of debt (25,915 ) — — — (25,915 ) Gain on sales-type lease — 33,834 — — 33,834 Gain on sale of assets and other 141 816 17 — — 974 103,210 46,921 350 (164,233 ) (13,752 ) Income before income taxes 101,331 160,174 7,670 (164,233 ) 104,942 State income tax expense — (76 ) — — (76 ) Net income 101,331 160,098 7,670 (164,233 ) 104,866 Allocation of net income attributable to noncontrolling interests — (1,670 ) (1,865 ) — (3,535 ) Net income attributable to the partners $ 101,331 $ 158,428 $ 5,805 $ (164,233 ) $ 101,331 Condensed Consolidating Statement of Comprehensive Income Six Months Ended June 30, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-restricted Subsidiaries Eliminations Consolidated (In thousands) Revenues: Affiliates $ — $ 193,614 $ 12,114 $ — $ 205,728 Third parties — 45,765 13,755 — 59,520 — 239,379 25,869 — 265,248 Operating costs and expenses: Operations (exclusive of depreciation and amortization) — 70,778 7,343 — 78,121 Depreciation and amortization 39,563 8,508 — 48,071 General and administrative 1,821 2,787 — — 4,608 1,821 113,128 15,851 — 130,800 Operating income (loss) (1,821 ) 126,251 10,018 — 134,448 Other income (expense): Equity in earnings of subsidiaries 136,730 7,559 — (144,289 ) — Equity in earnings of equity method investments — 3,883 — — — 3,883 Interest expense (38,037 ) (215 ) — — (38,252 ) Interest income — 1,079 — — — 1,079 Gain on sale of assets and other — (260 ) 61 — (199 ) 98,693 12,046 61 (144,289 ) (33,489 ) Income before income taxes 96,872 138,297 10,079 (144,289 ) 100,959 State income tax expense — (6 ) — — (6 ) Net income 96,872 138,291 10,079 (144,289 ) 100,953 Allocation of net income attributable to noncontrolling interests — (1,561 ) (2,520 ) — (4,081 ) Net income attributable to the partners $ 96,872 $ 136,730 $ 7,559 $ (144,289 ) $ 96,872 |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2020 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) Cash flows from operating activities $ (31,103 ) $ 151,331 $ 20,277 $ (5,911 ) $ 134,594 Cash flows from investing activities Additions to properties and equipment — (8,883 ) (21,857 ) — (30,740 ) Investment in Cushing Connect — (13,263 ) (2,400 ) 13,263 (2,400 ) Proceeds from sale of assets — 816 — — 816 Distributions in excess of equity in earnings of equity investments — 6,559 — (6,089 ) 470 — (14,771 ) (24,257 ) 7,174 (31,854 ) Cash flows from financing activities Net borrowings under credit agreement 29,500 — — — 29,500 Net intercompany financing activities 134,645 (134,645 ) — — — Redemption of senior notes (522,500 ) — — — (522,500 ) Proceeds from issuance of senior notes 500,000 — — — 500,000 Contribution from general partner 435 — 13,263 (13,263 ) 435 Contribution from noncontrolling interest — — 13,263 — 13,263 Distributions to HEP unitholders (102,979 ) — — — (102,979 ) Distributions to noncontrolling interests — — (16,000 ) 12,000 (4,000 ) Units withheld for tax withholding obligations (147 ) — — — (147 ) Deferred financing costs (8,714 ) — — — (8,714 ) Payments on finance leases — (1,972 ) — — (1,972 ) 30,240 (136,617 ) 10,526 (1,263 ) (97,114 ) Cash and cash equivalents Increase (decrease) for the period (863 ) (57 ) 6,546 — 5,626 Beginning of period 4,790 (709 ) 9,206 — 13,287 End of period $ 3,927 $ (766 ) $ 15,752 $ — $ 18,913 Condensed Consolidating Statement of Cash Flows Six Months Ended June 30, 2019 Parent Guarantor Restricted Subsidiaries Non-Guarantor Non-Restricted Subsidiaries Eliminations Consolidated (In thousands) Cash flows from operating activities $ (37,005 ) $ 165,882 $ 23,671 $ (7,559 ) $ 144,989 Cash flows from investing activities Additions to properties and equipment — (17,274 ) (478 ) — (17,752 ) Distributions from UNEV in excess of earnings — 8,191 — (8,191 ) — Proceeds from sale of assets — 194 — — 194 Distributions in excess of equity in earnings of equity investments — 299 — — 299 — (8,590 ) (478 ) (8,191 ) (17,259 ) Cash flows from financing activities Net borrowings under credit agreement 18,500 — — — 18,500 Net intercompany financing activities 155,225 (155,225 ) — — — Distributions to HEP unitholders (136,207 ) — — — (136,207 ) Distributions to noncontrolling interests — — (21,000 ) 15,750 (5,250 ) Units withheld for tax withholding obligations (119 ) — — — (119 ) Purchase units for incentive grants (255 ) — — (255 ) Payments on finance leases (139 ) (364 ) — — (503 ) 37,005 (155,589 ) (21,000 ) 15,750 (123,834 ) Cash and cash equivalents Increase for the period — 1,703 2,193 — 3,896 Beginning of period 2 — 3,043 — 3,045 End of period $ 2 $ 1,703 $ 5,236 $ — $ 6,941 |
Description of Business and P_3
Description of Business and Presentation of Financial Statements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Other Ownership Interests [Line Items] | ||||
Ownership percentage, controlling interest | 57.00% | 57.00% | ||
Shares, Issued | 37,250,000 | 37,250,000 | ||
Limited partner distribution | $ 2,500 | |||
Revenue, Remaining Performance Obligation, Amount | $ 17,600 | |||
Property, Plant, and Equipment, Salvage Value | 88,500 | 88,500 | ||
Long-Lived Assets | 28,100 | 28,100 | ||
Goodwill, Gross | 68,700 | 68,700 | ||
Operating Lease, Liability | $ 3,743 | $ 3,743 | $ 3,608 | $ 78,400 |
UNEV Pipeline | ||||
Other Ownership Interests [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 75.00% | 75.00% | ||
Frontier Pipeline [Member] | ||||
Other Ownership Interests [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% |
Investment in Joint Venture (De
Investment in Joint Venture (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Subsequent Event | |
Business Acquisition [Line Items] | |
Payments to Acquire Interest in Joint Venture | $ 65 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Deferred revenue recognized | $ 5,100 | $ 12,600 | |||
Document Period End Date | Jun. 30, 2020 | ||||
Deferred revenue recognized. billed prior period | $ 700 | $ 600 | |||
Contract With Customer, Asset, Revenue Recognized | 200 | 400 | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 114,807 | $ 130,751 | 242,661 | 265,248 | |
Operating Lease, Lease Income | 86,300 | 179,500 | |||
Revenue, Remaining Performance Obligation, Amount | 2,269,000 | 2,269,000 | |||
Shortfall Payments | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Contract With Customer, Liability, Increase | $ 500 | $ 0 | 300 | $ 700 | |
Deferred revenue shortfalls billed | 500 | 500 | |||
Service, Other | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 28,500 | $ 63,200 |
Revenues - Narrative, Remaining
Revenues - Narrative, Remaining Performance Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Operating Lease, Lease Income | $ 86,300 | $ 179,500 | ||
Contract with Customer, Liability, Revenue Recognized | 5,100 | 12,600 | ||
Revenue, Remaining Performance Obligation, Amount | 2,269,000 | 2,269,000 | ||
Contract With Customer, Liability, Revenue Recognized, Billed Prior Period | 700 | $ 600 | ||
Contract With Customer, Asset, Revenue Recognized | 200 | 400 | ||
Revenue from Contract with Customer, Excluding Assessed Tax | 114,807 | $ 130,751 | 242,661 | $ 265,248 |
Shortfall Payments | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Contract with Customer, Liability | 500 | 500 | ||
Service, Other | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 28,500 | $ 63,200 |
Revenues - Schedule of Future P
Revenues - Schedule of Future Performance Obligations (Details) $ in Millions | Jun. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 2,269 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 185 |
Unfulfilled performance obligations, expected timing | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 362 |
Unfulfilled performance obligations, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 332 |
Unfulfilled performance obligations, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 295 |
Unfulfilled performance obligations, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 257 |
Unfulfilled performance obligations, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 188 |
Unfulfilled performance obligations, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 650 |
Unfulfilled performance obligations, expected timing |
Revenues - Schedule of Contract
Revenues - Schedule of Contract Asset and Liability Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Document Period End Date | Jun. 30, 2020 | |||
Contract With Customer, Liability, Revenue Recognized, Billed Prior Period | $ 700 | $ 600 | ||
Contract assets | $ 6,064 | 6,064 | $ 5,675 | |
Contract liabilities | (500) | (500) | $ (650) | |
Contract With Customer, Asset, Revenue Recognized | $ 200 | $ 400 |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Disaggregated Revenue | $ 114,807 | $ 130,751 | $ 242,661 | $ 265,248 |
Pipelines | ||||
Disaggregation of Revenue [Line Items] | ||||
Disaggregated Revenue | 58,954 | 72,263 | 129,426 | 147,363 |
Terminals, tanks and loading racks | ||||
Disaggregation of Revenue [Line Items] | ||||
Disaggregated Revenue | 36,280 | 39,089 | 73,778 | 76,667 |
Refinery processing units | ||||
Disaggregation of Revenue [Line Items] | ||||
Disaggregated Revenue | $ 19,573 | $ 19,399 | $ 39,457 | $ 41,218 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Finance lease term | 1 year | |
Operating lease renewal term | 10 years | |
Capital Leased Assets, Gross | $ 6.9 | $ 7 |
Capital Leases Accumulated Depreciation | $ 3.4 | $ 4.5 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 25 years | |
Vehicles | Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 33 months | |
Vehicles | Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 48 months |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Leases [Abstract] | |||
Document Period End Date | Jun. 30, 2020 | ||
Operating leases: | |||
Operating lease right-of-use assets | $ 3,377 | $ 3,255 | |
Current operating lease liabilities | 1,213 | 1,126 | |
Long-term lease obligations | 2,530 | 2,482 | |
Total operating lease liabilities | 3,743 | 3,608 | $ 78,400 |
Finance leases: | |||
Properties, plants and equipment | 6,851 | 6,968 | |
Accumulated amortization | (3,358) | (4,547) | |
Properties, plants and equipment, net | 3,493 | 2,421 | |
Current finance lease liabilities | 3,293 | 3,224 | |
Noncurrent finance lease liabilities | 70,039 | 70,475 | |
Total finance lease liabilities | $ 73,332 | $ 73,699 | |
Weighted average remaining lease term (in years) | |||
Operating leases | 6 years 1 month 6 days | 6 years 6 months | |
Finance leases | 16 years 3 months 18 days | 17 years | |
Weighted average discount rate | |||
Operating leases | 4.80% | 5.00% | |
Finance leases | 5.60% | 6.00% |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating lease | $ 518 | $ 3,589 |
Operating cash flows from finance leases | 2,157 | 51 |
Financing cash flows from finance leases | $ 1,972 | $ 503 |
Leases - Operating and Finance
Leases - Operating and Finance Lease Maturities (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Leases [Abstract] | |||
Document Period End Date | Jun. 30, 2020 | ||
Operating | |||
2020 | $ 491 | ||
2021 | 906 | ||
2022 | 627 | ||
2023 | 607 | ||
2024 | 494 | ||
2025 and thereafter | 1,179 | ||
Total lease payments | 4,304 | ||
Less: Imputed interest | (561) | ||
Total operating lease liabilities | 3,743 | $ 3,608 | $ 78,400 |
Less: Current obligations | (1,213) | (1,126) | |
Long-term lease obligations | 2,530 | 2,482 | |
Finance | |||
2020 | 3,865 | ||
2021 | 7,411 | ||
2022 | 7,285 | ||
2023 | 7,332 | ||
2024 | 6,856 | ||
2025 and thereafter | 80,313 | ||
Total lease payments | 113,062 | ||
Less: Imputed interest | (39,730) | ||
Total finance lease liabilities | 73,332 | 73,699 | |
Less: Current obligations | (3,293) | (3,224) | |
Long-term lease obligations | $ 70,039 | $ 70,475 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease costs | $ 230 | $ 1,798 | $ 503 | $ 3,568 |
Amortization of assets | 273 | 254 | 515 | 498 |
Interest on lease liabilities | 1,040 | 24 | 2,077 | 51 |
Variable Lease, Cost | 46 | 35 | 95 | 71 |
Total net lease cost | $ 1,589 | $ 2,111 | $ 3,190 | $ 4,188 |
Leases - Gain on Sales-Type Lea
Leases - Gain on Sales-Type Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Net investment in leases | $ 35,319 | $ 35,319 | ||
Properties and equipment, net | (1,485) | |||
Gain on Sales-type Leases | $ 33,834 | $ 0 | $ 33,834 | $ 0 |
Leases - Schedule of Lease Inco
Leases - Schedule of Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease revenues | $ 84,872 | $ 94,783 | $ 175,671 | $ 188,287 |
Direct financing lease interest income | 524 | 509 | 1,048 | 1,019 |
Sales-type lease interest income | 2,286 | 0 | 3,940 | 0 |
Lease revenues relating to variable lease payments not included in measurement of the sales-type lease receivable | $ 1,474 | $ 0 | $ 3,822 | $ 0 |
Leases - Schedule of Minimum Un
Leases - Schedule of Minimum Undiscounted Lease Payments (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Operating | |
Remainder of 2020 | $ 155,376 |
2021 | 306,771 |
2022 | 304,315 |
2023 | 273,362 |
2024 | 235,280 |
Thereafter | 739,158 |
Total | 2,014,262 |
Finance | |
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity [Abstract] | |
Remainder of 2020 | 1,060 |
2021 | 2,128 |
2022 | 2,145 |
2023 | 2,162 |
2024 | 2,179 |
Thereafter | 40,787 |
Total | 50,461 |
Sales-type | |
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity [Abstract] | |
Remainder of 2020 | 6,198 |
2021 | 12,396 |
2022 | 12,396 |
2023 | 12,396 |
2024 | 12,396 |
Thereafter | 72,432 |
Total | $ 128,214 |
Leases - Net Investments in Lea
Leases - Net Investments in Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | ||
Lessor, Lease, Description [Line Items] | |||
Document Period End Date | Jun. 30, 2020 | ||
Net investment in leases | $ 35,319 | ||
Sales-type Leases | |||
Lessor, Lease, Description [Line Items] | |||
Lease receivables | [1] | 92,041 | $ 68,457 |
Unguaranteed residual assets | 63,134 | 52,933 | |
Net investment in leases | 155,175 | 121,390 | |
Direct Financing Leases | |||
Lessor, Lease, Description [Line Items] | |||
Lease receivables | [1] | 16,486 | 16,511 |
Unguaranteed residual assets | 0 | 0 | |
Net investment in leases | $ 16,486 | $ 16,511 | |
[1] | Current portion of lease receivables included in prepaid and other current assets on the balance sheet. |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - Fair value inputs, Level 2 - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Carrying Value | 6% Senior notes | ||
Debt Instrument [Line Items] | ||
Financial Liabilities Fair Value Disclosure | $ 496,531 | |
Carrying Value | Five Percent Senior Notes Due Two Thousand Twenty Eight [Member] | ||
Debt Instrument [Line Items] | ||
Financial Liabilities Fair Value Disclosure | $ 491,648 | |
Fair Value | 6% Senior notes | ||
Debt Instrument [Line Items] | ||
Financial Liabilities Fair Value Disclosure | $ 477,835 | $ 522,045 |
Properties and Equipment - Sche
Properties and Equipment - Schedule of Properties and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Properties and equipment, gross | $ 2,087,743 | $ 2,061,554 |
Less accumulated depreciation | 628,809 | 594,455 |
Properties and equipment, net | 1,458,934 | 1,467,099 |
Pipelines, terminals and tankage | ||
Property, Plant and Equipment [Line Items] | ||
Properties and equipment, gross | 1,610,916 | 1,602,231 |
Refinery assets | ||
Property, Plant and Equipment [Line Items] | ||
Properties and equipment, gross | 349,030 | 348,093 |
Land and right of way | ||
Property, Plant and Equipment [Line Items] | ||
Properties and equipment, gross | 87,076 | 86,190 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Properties and equipment, gross | 30,892 | 10,930 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Properties and equipment, gross | $ 9,829 | $ 14,110 |
Properties and Equipment - Narr
Properties and Equipment - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Capitalized Interest Costs | $ 24 | $ 8 |
Depreciation expense | $ 41,700 | $ 41,300 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 204,797 | $ 204,797 |
Less accumulated amortization | 110,479 | 103,475 |
Intangible assets, net | 94,318 | 101,322 |
Delek transportation agreement | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 59,933 | 59,933 |
Useful Life | 30 years | |
HFC transportation agreement | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 75,131 | 75,131 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 69,683 | 69,683 |
Useful Life | 10 years | |
Other | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 50 | $ 50 |
Minimum | HFC transportation agreement | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Useful Life | 10 years | |
Maximum | HFC transportation agreement | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Useful Life | 15 years |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated amortization expense, year five | $ 9.9 |
Estimated amortization expense, after year five | 9.1 |
Amortization expense | 7 |
Cost, Amortization | 14 |
Estimated amortization expense, year two | 14 |
Estimated amortization expense, year three | 14 |
Estimated amortization expense, year four | $ 14 |
Employees, Retirement and Inc_3
Employees, Retirement and Incentive Plans Retirement and Benefit Plan Costs (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Componentsshares | Jun. 30, 2019USD ($) | |
Share-based Compensation Arrangements | ||||
Employee benefits and share-based compensation | $ | $ 1.6 | $ 1.7 | $ 3.7 | |
Long-term Incentive Plan, Components | Components | 4 | |||
Number of incentive-based award plans | 2 | 2 | ||
Compensation costs of incentive awards | $ | $ 0.5 | $ 0.6 | $ 1 | $ 1.2 |
Deferred Bonus | ||||
Share-based Compensation Arrangements | ||||
Units authorized under equity-based compensation plans (new) | shares | 2,500,000 | 2,500,000 | ||
Number of units available for grant | shares | 1,119,542 | 1,119,542 |
Employees, Retirement and Inc_4
Employees, Retirement and Incentive Plans Restricted Units (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangements | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 100,000 | |
Restricted and Phantom Units | ||
Share-based Compensation Arrangements | ||
Nonvested restricted units outstanding | 134,918 | 145,205 |
Vesting and transfer of common units to recipients | 4,397 | |
Vested in Period | $ 30.29 | |
Weighted average grant date fair value | $ 26.13 | $ 26.22 |
Forfeitures | 5,890 | |
Weighted Average Grant Date Fair Value - Forfeitures | $ 25.33 | |
Total unrecognized compensation related to nonvested units | $ 1.4 | |
Weighted average remaining contractual term (years) | 1 year 2 months 12 days | |
Performance Shares [Member] | ||
Share-based Compensation Arrangements | ||
Nonvested restricted units outstanding | 41,811 | 53,445 |
Vesting and transfer of common units to recipients | 11,634 | |
Total unrecognized compensation related to nonvested units | $ 0.4 | |
Weighted average remaining contractual term (years) | 1 year 7 months 6 days |
Employees, Retirement and Inc_5
Employees, Retirement and Incentive Plans Performance Units (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement Instruments [Roll Forward] | ||
Weighted Average Fair Value of Units Outstanding | $ 1.2 | |
Performance Shares [Member] | ||
Share-based Compensation Arrangements | ||
Estimated Share Payouts Unit Awards Minimum | 100.00% | |
Estimated Share Payouts Unit Awards Maximum | 150.00% | |
Share-based Compensation Arrangement Instruments [Roll Forward] | ||
Outstanding at January 1, 2020 (nonvested) | 53,445 | |
Vesting and transfer of common units to recipients | (11,634) | |
Outstanding at March 31, 2020 (nonvested) | 41,811 | |
Fair value of vested units transferred to recipients | $ 0.4 | $ 0.3 |
Total unrecognized compensation related to nonvested units | $ 0.4 | |
Weighted average remaining contractual term (years) | 1 year 7 months 6 days | |
Restricted and Phantom Units | ||
Share-based Compensation Arrangement Instruments [Roll Forward] | ||
Outstanding at January 1, 2020 (nonvested) | 145,205 | |
Vesting and transfer of common units to recipients | (4,397) | |
Forfeitures | (5,890) | |
Outstanding at March 31, 2020 (nonvested) | 134,918 | |
Total unrecognized compensation related to nonvested units | $ 1.4 | |
Weighted average remaining contractual term (years) | 1 year 2 months 12 days |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) $ in Thousands | Feb. 05, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Feb. 04, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,400,000 | $ 1,400,000 | |||||
Line of Credit Facility, Capacity Available for Trade Purchases | 50,000 | 50,000 | |||||
Line of Credit Facility, Accordion Feature | 300,000 | $ 300,000 | |||||
Document Period End Date | Jun. 30, 2020 | ||||||
Gain (Loss) on Extinguishment of Debt | $ 25,900 | 0 | $ 0 | $ (25,915) | $ 0 | ||
Debt Instrument, Unamortized Premium | $ 22,500 | ||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ 3,400 | ||||||
Senior Notes Aggregate Redemption Amount | $ 522,500 | ||||||
6% Senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal | $ 500,000 | $ 500,000 | $ 500,000 | ||||
Stated interest rate, senior notes | 6.00% | 6.00% | 6.00% | ||||
Five Percent Senior Notes Due Two Thousand Twenty Eight [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate, senior notes | 5.00% |
Debt Long-Term Debt (Details)
Debt Long-Term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Document Period End Date | Jun. 30, 2020 | |
Credit Agreement | $ 995,000 | $ 965,500 |
Total long-term debt | 1,486,648 | 1,462,031 |
6% Senior notes | ||
Debt Instrument [Line Items] | ||
Principal | 500,000 | 500,000 |
Unamortized discount | $ (8,352) | $ (3,469) |
Debt - Interest Rate Risk Manag
Debt - Interest Rate Risk Management (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Line of credit facility, amount outstanding | $ 995,000 | $ 965,500 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($)yrshares | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)yrshares | Jun. 30, 2019USD ($) | |
Related Party Transaction [Line Items] | |||||
Sales-type Lease, Revenue | $ 0 | $ 0 | |||
Concentration Risk, Percentage | 83.00% | ||||
Document Period End Date | Jun. 30, 2020 | ||||
Shares, Issued | shares | 37,250,000 | 37,250,000 | |||
Administrative fee, related party | $ 2,600,000 | ||||
Revenue from related parties | $ 95,600,000 | 102,400,000 | 197,000,000 | 205,700,000 | |
Omnibus Agreement G & A expenses, related party | 700,000 | 600,000 | 1,300,000 | ||
Employee expenses reimbursed to related party | 13,200,000 | 27,300,000 | 26,800,000 | ||
Reimbursements received from related parties | 900,000 | 3,600,000 | 4,000,000 | 5,800,000 | |
Accounts receivable due from HFC | 49,800,000 | $ 49,700,000 | 49,800,000 | ||
Due to Affiliate | 7,300,000 | 16,700,000 | 7,300,000 | ||
Lease Income | 500,000 | 1,000,000 | |||
Sales-type Lease, Lease Income | 2,400,000 | 4,800,000 | |||
Limited Partners' Capital Account, Distribution Amount | 2,500,000 | ||||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Minimum annualized payments | 351,100,000 | 351,100,000 | |||
Distributions to HEP unitholders | $ 18,400,000 | 37,500,000 | 56,000,000 | 74,800,000 | |
Shortfall Payments | |||||
Related Party Transaction [Line Items] | |||||
Shortfall billings deferred revenue | $ 500,000 | $ 0 | $ 300,000 | $ 700,000 | |
Minimum | |||||
Related Party Transaction [Line Items] | |||||
Revenue service commitments expiration | yr | 2,021 | 2,021 | |||
Maximum | |||||
Related Party Transaction [Line Items] | |||||
Revenue service commitments expiration | yr | 2,036 | 2,036 |
Partners' Equity, Income Allo_2
Partners' Equity, Income Allocations and Cash Distributions - Issuances (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Partners' Capital [Abstract] | ||||
Limited Partners' Capital Account, Distribution Amount | $ 34.5 | $ 68.5 | $ 68.9 | $ 136.7 |
Common units held by HFC (in shares) | 59,630,030 | 59,630,030 | ||
Ownership percentage, controlling interest | 57.00% | 57.00% | ||
Common Unit Issuance Program | $ 200 | |||
Partners' capital account, units, sale of units (in shares) | 2,413,153 | |||
Gross proceeds from issuance of common units | $ 82.3 |
Partners' Equity, Income Allo_3
Partners' Equity, Income Allocations and Cash Distributions - Cash Distributions (Details) - USD ($) $ in Millions | Aug. 13, 2020 | Aug. 03, 2020 | Jul. 23, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||||
Document Period End Date | Jun. 30, 2020 | ||||||
Partners' Capital Account, Units | 59,630,030 | 59,630,030 | |||||
Ownership percentage, controlling interest | 57.00% | 57.00% | |||||
Common Unit Issuance Program | $ 200 | ||||||
Partners' capital account, units, sale of units (in shares) | 2,413,153 | ||||||
Limited partner distribution | $ 2.5 | ||||||
Gross proceeds from issuance of common units | 82.3 | ||||||
Distributions declared | $ 34.5 | $ 68.5 | $ 68.9 | $ 136.7 | |||
Subsequent Event | |||||||
Incentive Distribution Made to Managing Member or General Partner [Line Items] | |||||||
Dividends Payable, Date Declared | Jul. 23, 2020 | ||||||
Dividends Payable, Date to be Paid | Aug. 13, 2020 | ||||||
Dividends Payable, Date of Record | Aug. 3, 2020 |
Net Income per Limited Partne_3
Net Income per Limited Partner Unit - Schedules of Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings per Unit by Type of Partner [Line Items] | ||||
Net income attributable to the partners | $ 76,470 | $ 45,690 | $ 101,331 | $ 96,872 |
Weighted average limited partners’ units outstanding | 105,440 | 105,440 | 105,440 | 105,440 |
Limited partners’ per unit interest in earnings—basic and diluted: | $ 0.73 | $ 0.43 | $ 0.96 | $ 0.92 |
Limited Partner | ||||
Earnings per Unit by Type of Partner [Line Items] | ||||
Net income attributable to partnership | $ 76,470 | $ 45,690 | $ 101,331 | $ 96,872 |
Environmental Environmental (De
Environmental Environmental (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | |||||
Environmental remediation expense | $ 0.5 | $ 0.1 | $ 0.7 | $ 0.1 | |
Accrued environmental expense | 5.7 | 5.7 | $ 5.5 | ||
Accrued environmental expense, noncurrent | 3.5 | 3.5 | |||
Affiliated Entity | |||||
Loss Contingencies [Line Items] | |||||
Accrued environmental expense | $ 0.4 | $ 0.5 | $ 0.4 | $ 0.5 |
Operating Segments - Schedule o
Operating Segments - Schedule of Segment Information (Details) - USD ($) $ in Thousands | Feb. 05, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||||
Revenues | $ 114,807 | $ 130,751 | $ 242,661 | $ 265,248 | |||
Operating Income (Loss) | 52,501 | 63,914 | 118,694 | 134,448 | |||
Segment operating profit | 55,036 | 65,902 | 123,931 | 139,056 | |||
Unallocated general and administrative | (2,535) | (1,988) | (5,237) | (4,608) | |||
Interest and financing costs, net | (10,966) | (18,679) | (26,515) | (37,173) | |||
Gain (Loss) on Extinguishment of Debt | $ 25,900 | 0 | 0 | (25,915) | 0 | ||
Equity in earnings of unconsolidated affiliates | 2,156 | 1,783 | 3,870 | 3,883 | |||
Gain on Sales-type Leases | 33,834 | 0 | 33,834 | 0 | |||
Gain (loss) on sale of assets and other | 468 | 111 | 974 | (199) | |||
Income before income taxes | 77,993 | 47,129 | 104,942 | 100,959 | |||
Capital Expenditures | 11,798 | 7,034 | 30,740 | 17,752 | |||
Assets | 2,221,783 | 2,221,783 | $ 2,199,232 | ||||
Goodwill | 270,336 | 270,336 | 270,336 | ||||
Pipelines and terminal - affiliate | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 75,990 | 82,970 | |||||
Revenues | 157,534 | 164,510 | |||||
Pipelines and terminals - third party | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 19,244 | 28,382 | |||||
Revenues | 45,670 | 59,520 | |||||
Operating Income (Loss) | 45,630 | 57,936 | 104,533 | 121,168 | |||
Capital Expenditures | 11,798 | 7,034 | 30,416 | 17,752 | |||
Assets | [1] | 1,765,038 | 1,765,038 | 1,749,843 | |||
Refinery processing units | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 19,573 | 19,399 | 39,457 | 41,218 | |||
Revenues | 39,457 | 41,218 | |||||
Operating Income (Loss) | 9,406 | 7,966 | 19,398 | 17,888 | |||
Capital Expenditures | 0 | $ 0 | 324 | $ 0 | |||
Assets | 307,900 | 307,900 | 305,897 | ||||
Other | |||||||
Segment Reporting Information [Line Items] | |||||||
Assets | $ 148,845 | $ 148,845 | $ 143,492 | ||||
[1] | Includes goodwill of $270.3 million as of June 30, 2020 and December 31, 2019 . |
Supplemental Guarantor _ Non-_3
Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 18,913 | $ 13,287 | $ 6,941 | $ 3,045 |
Accounts receivable | 64,776 | 68,447 | ||
Prepaid and other current assets | 7,905 | 7,629 | ||
Total current assets | 91,594 | 89,363 | ||
Properties and equipment, net | 1,458,934 | 1,467,099 | ||
Operating lease right-of-use assets | 3,377 | 3,255 | ||
Net Investment in Lease | 168,153 | 134,886 | ||
Investment in subsidiaries | 0 | 0 | ||
Intangible assets, net | 94,318 | 101,322 | ||
Goodwill | 270,336 | 270,336 | ||
Equity method investments | 123,299 | 120,071 | ||
Other assets | 11,772 | 12,900 | ||
Assets | 2,221,783 | 2,199,232 | ||
Current liabilities: | ||||
Accounts payable | 21,925 | 34,555 | ||
Due to Affiliate | 7,300 | 16,700 | ||
Accrued interest | 10,683 | 13,206 | ||
Deferred revenue | 11,002 | 10,390 | ||
Accrued property taxes | 5,526 | 3,799 | ||
Current maturities of operating leases | 1,213 | 1,126 | ||
Current maturities of finance leases | 3,293 | 3,224 | ||
Other current liabilities | 2,975 | 2,305 | ||
Total current liabilities | 56,617 | 68,605 | ||
Long-term debt | 1,486,648 | 1,462,031 | ||
Noncurrent operating lease liabilities | 2,530 | 2,482 | ||
Noncurrent finance lease liabilities | 70,039 | 70,475 | ||
Other long-term liabilities | 13,689 | 12,808 | ||
Deferred revenue | 42,692 | 45,681 | ||
Class B unit | 51,062 | 49,392 | ||
Equity - partners | 380,723 | 381,103 | ||
Equity - noncontrolling interest | 117,783 | 106,655 | ||
Total liabilities and equity | 2,221,783 | 2,199,232 | ||
Parent | ||||
Current assets: | ||||
Cash and cash equivalents | 3,927 | 4,790 | 2 | 2 |
Accounts receivable | 0 | 0 | ||
Prepaid and other current assets | 337 | 282 | ||
Total current assets | 4,264 | 5,072 | ||
Properties and equipment, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | 0 | ||
Net Investment in Lease | 0 | 0 | ||
Investment in subsidiaries | 1,868,595 | 1,844,812 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Equity method investments | 0 | 0 | ||
Other assets | 5,497 | 6,722 | ||
Assets | 1,878,356 | 1,856,606 | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued interest | 10,683 | 13,206 | ||
Deferred revenue | 0 | 0 | ||
Accrued property taxes | 0 | 0 | ||
Current maturities of operating leases | 0 | 0 | ||
Current maturities of finance leases | 0 | 0 | ||
Other current liabilities | 42 | 6 | ||
Total current liabilities | 10,725 | 13,212 | ||
Long-term debt | 1,486,648 | 1,462,031 | ||
Noncurrent operating lease liabilities | 0 | 0 | ||
Noncurrent finance lease liabilities | 0 | 0 | ||
Other long-term liabilities | 260 | 260 | ||
Deferred revenue | 0 | 0 | ||
Class B unit | 0 | 0 | ||
Equity - partners | 380,723 | 381,103 | ||
Equity - noncontrolling interest | 0 | 0 | ||
Total liabilities and equity | 1,878,356 | 1,856,606 | ||
Guarantor Restricted Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | (766) | (709) | 1,703 | 0 |
Accounts receivable | 58,197 | 60,229 | ||
Prepaid and other current assets | 6,992 | 6,710 | ||
Total current assets | 64,423 | 66,230 | ||
Properties and equipment, net | 1,110,139 | 1,133,534 | ||
Operating lease right-of-use assets | 3,185 | 3,243 | ||
Net Investment in Lease | 168,153 | 134,886 | ||
Investment in subsidiaries | 282,348 | 275,279 | ||
Intangible assets, net | 94,318 | 101,322 | ||
Goodwill | 270,336 | 270,336 | ||
Equity method investments | 83,484 | 82,987 | ||
Other assets | 6,275 | 6,178 | ||
Assets | 2,082,661 | 2,073,995 | ||
Current liabilities: | ||||
Accounts payable | 14,343 | 29,895 | ||
Accrued interest | 0 | 0 | ||
Deferred revenue | 10,502 | 9,740 | ||
Accrued property taxes | 2,732 | 2,737 | ||
Current maturities of operating leases | 1,145 | 1,114 | ||
Current maturities of finance leases | 3,293 | 3,224 | ||
Other current liabilities | 2,819 | 2,293 | ||
Total current liabilities | 34,834 | 49,003 | ||
Long-term debt | 0 | 0 | ||
Noncurrent operating lease liabilities | 2,530 | 2,482 | ||
Noncurrent finance lease liabilities | 70,039 | 70,475 | ||
Other long-term liabilities | 12,909 | 12,150 | ||
Deferred revenue | 42,692 | 45,681 | ||
Class B unit | 51,062 | 49,392 | ||
Equity - partners | 1,868,595 | 1,844,812 | ||
Equity - noncontrolling interest | 0 | 0 | ||
Total liabilities and equity | 2,082,661 | 2,073,995 | ||
Non-Guarantor Non-Restricted Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 15,752 | 9,206 | 5,236 | 3,043 |
Accounts receivable | 7,840 | 8,549 | ||
Prepaid and other current assets | 576 | 637 | ||
Total current assets | 24,168 | 18,392 | ||
Properties and equipment, net | 348,795 | 333,565 | ||
Operating lease right-of-use assets | 192 | 12 | ||
Net Investment in Lease | 0 | |||
Investment in subsidiaries | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Equity method investments | 39,815 | 37,084 | ||
Other assets | 0 | 0 | ||
Assets | 412,970 | 389,053 | ||
Current liabilities: | ||||
Accounts payable | 8,843 | 4,991 | ||
Accrued interest | 0 | 0 | ||
Deferred revenue | 500 | 650 | ||
Accrued property taxes | 2,794 | 1,062 | ||
Current maturities of operating leases | 68 | 12 | ||
Current maturities of finance leases | 0 | 0 | ||
Other current liabilities | 114 | 6 | ||
Total current liabilities | 12,319 | 6,721 | ||
Long-term debt | 0 | 0 | ||
Noncurrent operating lease liabilities | 0 | 0 | ||
Noncurrent finance lease liabilities | 0 | 0 | ||
Other long-term liabilities | 520 | 398 | ||
Deferred revenue | 0 | 0 | ||
Class B unit | 0 | 0 | ||
Equity - partners | 282,348 | 275,279 | ||
Equity - noncontrolling interest | 117,783 | 106,655 | ||
Total liabilities and equity | 412,970 | 389,053 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable | (1,261) | (331) | ||
Prepaid and other current assets | 0 | |||
Total current assets | (1,261) | (331) | ||
Properties and equipment, net | 0 | 0 | ||
Operating lease right-of-use assets | 0 | 0 | ||
Net Investment in Lease | 0 | 0 | ||
Investment in subsidiaries | (2,150,943) | (2,120,091) | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Equity method investments | 0 | 0 | ||
Other assets | 0 | 0 | ||
Assets | (2,152,204) | (2,120,422) | ||
Current liabilities: | ||||
Accounts payable | (1,261) | (331) | ||
Accrued interest | 0 | 0 | ||
Deferred revenue | 0 | 0 | ||
Accrued property taxes | 0 | 0 | ||
Current maturities of operating leases | 0 | 0 | ||
Current maturities of finance leases | 0 | 0 | ||
Other current liabilities | 0 | 0 | ||
Total current liabilities | (1,261) | (331) | ||
Long-term debt | 0 | 0 | ||
Noncurrent operating lease liabilities | 0 | 0 | ||
Noncurrent finance lease liabilities | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Deferred revenue | 0 | 0 | ||
Class B unit | 0 | 0 | ||
Equity - partners | (2,150,943) | (2,120,091) | ||
Equity - noncontrolling interest | 0 | 0 | ||
Total liabilities and equity | $ (2,152,204) | $ (2,120,422) |
Supplemental Guarantor _ Non-_4
Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidating Statement of Comprehensive Income (Details) - USD ($) $ in Thousands | Feb. 05, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Revenues: | |||||||
Revenues | $ 114,807 | $ 130,751 | $ 242,661 | $ 265,248 | |||
Operating costs and expenses [Abstract] | |||||||
Operations (exclusive of depreciation and amortization) | 34,737 | 40,602 | 69,718 | 78,121 | |||
Depreciation and amortization | 25,034 | 24,247 | 49,012 | 48,071 | |||
General and administrative | 2,535 | 1,988 | 5,237 | 4,608 | |||
Total operating costs and expenses | 62,306 | 66,837 | 123,967 | 130,800 | |||
Operating Income (Loss) | 52,501 | 63,914 | 118,694 | 134,448 | |||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||
Equity in earnings of equity method investments | 2,156 | 1,783 | 3,870 | 3,883 | |||
Interest expense | (13,779) | (19,230) | (31,546) | (38,252) | |||
Interest income | 2,813 | 551 | 5,031 | 1,079 | |||
Gain (Loss) on Extinguishment of Debt | $ 25,900 | 0 | 0 | (25,915) | 0 | ||
Other Nonoperating Income (Expense) | 974 | ||||||
Gain on Sales-type Leases | 33,834 | 0 | 33,834 | 0 | |||
Gain on sale of assets and other | 468 | 111 | 974 | (199) | |||
Nonoperating Income (Expense) | 25,492 | (16,785) | (13,752) | (33,489) | |||
Income before income taxes | 77,993 | 47,129 | 104,942 | 100,959 | |||
State income tax benefit (expense) | (39) | 30 | (76) | (6) | |||
Net income | 77,954 | $ 26,912 | 47,159 | $ 53,794 | 104,866 | 100,953 | |
Allocation of net income attributable to noncontrolling interests | (1,484) | (1,469) | (3,535) | (4,081) | |||
Net Income (Loss) Attributable to Parent | 76,470 | 45,690 | 101,331 | 96,872 | |||
Other Comprehensive Income (Loss), Net of Tax | 0 | ||||||
Net income attributable to the partners | 76,470 | 45,690 | 101,331 | 96,872 | |||
Parent | |||||||
Revenues: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Operating costs and expenses [Abstract] | |||||||
Operations (exclusive of depreciation and amortization) | 0 | 0 | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||||
General and administrative | 780 | 745 | 1,879 | 1,821 | |||
Total operating costs and expenses | 780 | 745 | 1,879 | 1,821 | |||
Operating Income (Loss) | (780) | (745) | (1,879) | (1,821) | |||
Equity in earnings of subsidiaries | 89,893 | 65,431 | 136,730 | ||||
Equity in earnings of equity method investments | 0 | 0 | 0 | 0 | |||
Interest expense | (12,740) | (18,996) | (29,470) | (38,037) | |||
Interest income | 26 | 0 | 26 | 0 | |||
Gain (Loss) on Extinguishment of Debt | (25,915) | ||||||
Other Nonoperating Income (Expense) | 141 | ||||||
Gain on Sales-type Leases | 0 | 0 | |||||
Gain on sale of assets and other | 71 | 0 | 0 | ||||
Nonoperating Income (Expense) | 77,250 | (46,435) | (103,210) | (98,693) | |||
Income before income taxes | 76,470 | 45,690 | 101,331 | 96,872 | |||
State income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Net income | 76,470 | 45,690 | 101,331 | 96,872 | |||
Allocation of net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |||
Other Comprehensive Income (Loss), Net of Tax | 158,428 | ||||||
Net income attributable to the partners | 76,470 | 45,690 | 101,331 | 96,872 | |||
Guarantor Restricted Subsidiaries | |||||||
Revenues: | |||||||
Revenues | 105,304 | 119,921 | 219,214 | 239,379 | |||
Operating costs and expenses [Abstract] | |||||||
Operations (exclusive of depreciation and amortization) | 30,980 | 36,701 | 62,111 | 70,778 | |||
Depreciation and amortization | 20,739 | 20,027 | 40,492 | 39,563 | |||
General and administrative | 1,755 | 1,243 | 3,358 | 2,787 | |||
Total operating costs and expenses | 53,474 | 57,971 | 105,961 | 113,128 | |||
Operating Income (Loss) | 51,830 | 61,950 | 113,253 | 126,251 | |||
Equity in earnings of subsidiaries | 1,510 | 2,063 | 7,559 | ||||
Equity in earnings of equity method investments | 1,449 | 1,783 | 3,537 | 3,883 | |||
Interest expense | (1,039) | (234) | (2,076) | (215) | |||
Interest income | 2,787 | 551 | 5,005 | 1,079 | |||
Gain (Loss) on Extinguishment of Debt | 0 | ||||||
Other Nonoperating Income (Expense) | 816 | ||||||
Gain on Sales-type Leases | 33,834 | 33,834 | |||||
Gain on sale of assets and other | 396 | 69 | (260) | ||||
Nonoperating Income (Expense) | 38,937 | 4,232 | 46,921 | 12,046 | |||
Income before income taxes | 90,767 | 66,182 | 160,174 | 138,297 | |||
State income tax benefit (expense) | (39) | 30 | (76) | (6) | |||
Net income | 90,728 | 66,212 | 160,098 | 138,291 | |||
Allocation of net income attributable to noncontrolling interests | (835) | (781) | (1,670) | (1,561) | |||
Other Comprehensive Income (Loss), Net of Tax | 5,805 | ||||||
Net income attributable to the partners | 89,893 | 65,431 | 158,428 | 136,730 | |||
Non-Guarantor Non-Restricted Subsidiaries | |||||||
Revenues: | |||||||
Revenues | 9,503 | 10,830 | 23,447 | 25,869 | |||
Operating costs and expenses [Abstract] | |||||||
Operations (exclusive of depreciation and amortization) | 3,757 | 3,901 | 7,607 | 7,343 | |||
Depreciation and amortization | 4,295 | 4,220 | 8,520 | 8,508 | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Total operating costs and expenses | 8,052 | 8,121 | 16,127 | 15,851 | |||
Operating Income (Loss) | 1,451 | 2,709 | 7,320 | 10,018 | |||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||
Equity in earnings of equity method investments | 707 | 0 | 333 | 0 | |||
Interest expense | 0 | 0 | 0 | 0 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Gain (Loss) on Extinguishment of Debt | 0 | ||||||
Other Nonoperating Income (Expense) | 17 | ||||||
Gain on Sales-type Leases | 0 | 0 | |||||
Gain on sale of assets and other | 1 | 42 | 61 | ||||
Nonoperating Income (Expense) | 708 | 42 | 350 | 61 | |||
Income before income taxes | 2,159 | 2,751 | 7,670 | 10,079 | |||
State income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Net income | 2,159 | 2,751 | 7,670 | 10,079 | |||
Allocation of net income attributable to noncontrolling interests | (649) | (688) | (1,865) | (2,520) | |||
Other Comprehensive Income (Loss), Net of Tax | 0 | ||||||
Net income attributable to the partners | 1,510 | 2,063 | 5,805 | 7,559 | |||
Eliminations | |||||||
Revenues: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Operating costs and expenses [Abstract] | |||||||
Operations (exclusive of depreciation and amortization) | 0 | 0 | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||
General and administrative | 0 | 0 | 0 | 0 | |||
Total operating costs and expenses | 0 | 0 | 0 | 0 | |||
Operating Income (Loss) | 0 | 0 | 0 | 0 | |||
Equity in earnings of subsidiaries | (91,403) | (67,494) | (144,289) | ||||
Equity in earnings of equity method investments | 0 | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | 0 | |||
Interest income | 0 | 0 | 0 | 0 | |||
Gain (Loss) on Extinguishment of Debt | 0 | ||||||
Other Nonoperating Income (Expense) | 0 | ||||||
Gain on Sales-type Leases | 0 | 0 | |||||
Gain on sale of assets and other | 0 | 0 | 0 | ||||
Nonoperating Income (Expense) | (91,403) | (67,494) | (164,233) | (144,289) | |||
Income before income taxes | (91,403) | (67,494) | (164,233) | (144,289) | |||
State income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Net income | (91,403) | (67,494) | (164,233) | (144,289) | |||
Allocation of net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |||
Other Comprehensive Income (Loss), Net of Tax | (164,233) | ||||||
Net income attributable to the partners | (91,403) | (67,494) | (164,233) | (144,289) | |||
Affiliates | |||||||
Revenues: | |||||||
Revenues | 95,563 | 102,369 | 196,991 | 205,728 | |||
Affiliates | Parent | |||||||
Revenues: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Affiliates | Guarantor Restricted Subsidiaries | |||||||
Revenues: | |||||||
Revenues | 89,417 | 96,221 | 184,172 | 193,614 | |||
Affiliates | Non-Guarantor Non-Restricted Subsidiaries | |||||||
Revenues: | |||||||
Revenues | 6,146 | 6,148 | 12,819 | 12,114 | |||
Affiliates | Eliminations | |||||||
Revenues: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Third parties | |||||||
Revenues: | |||||||
Revenues | 19,244 | 28,382 | 45,670 | 59,520 | |||
Third parties | Parent | |||||||
Revenues: | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Third parties | Guarantor Restricted Subsidiaries | |||||||
Revenues: | |||||||
Revenues | 15,887 | 23,700 | 35,042 | 45,765 | |||
Third parties | Non-Guarantor Non-Restricted Subsidiaries | |||||||
Revenues: | |||||||
Revenues | 3,357 | 4,682 | 10,628 | 13,755 | |||
Third parties | Eliminations | |||||||
Revenues: | |||||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Supplemental Guarantor _ Non-_5
Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | $ 134,594 | $ 144,989 |
Cash flows from investing activities | ||
Additions to properties and equipment | (30,740) | (17,752) |
Payments to Acquire Interest in Joint Venture | (2,400) | 0 |
Distributions from UNEV in excess of earnings | 0 | |
Proceeds from sale of assets | 816 | 194 |
Distributions in excess of equity in earnings of equity investments | 470 | 299 |
Net cash provided by (used for) investing activities | (31,854) | (17,259) |
Cash flows from financing activities | ||
Net borrowings (repayments) under credit agreement | 29,500 | 18,500 |
Net intercompany financing activities | 0 | 0 |
Early Repayment of Senior Debt | (522,500) | 0 |
Proceeds from Issuance of Senior Long-term Debt | 500,000 | 0 |
Contributions from general partner | 435 | 0 |
Contribution from Joint Venture Partner | 13,263 | 0 |
Distributions to HEP unitholders | (102,979) | (136,207) |
Distributions to noncontrolling interests | (4,000) | (5,250) |
Units withheld for tax withholding obligations | (147) | (119) |
Payments of Financing Costs | (255) | |
Payments of Debt Issuance Costs | (8,714) | 0 |
Payments on finance leases | (1,972) | (503) |
Other financing activities | (503) | |
Net cash provided by (used by) financing activities | (97,114) | (123,834) |
Increase (decrease) for the period | 5,626 | 3,896 |
Beginning of period | 13,287 | 3,045 |
End of period | 18,913 | 6,941 |
Parent | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | (31,103) | (37,005) |
Cash flows from investing activities | ||
Additions to properties and equipment | 0 | 0 |
Payments to Acquire Interest in Joint Venture | 0 | |
Distributions from UNEV in excess of earnings | 0 | |
Proceeds from sale of assets | 0 | 0 |
Distributions in excess of equity in earnings of equity investments | 0 | 0 |
Net cash provided by (used for) investing activities | 0 | 0 |
Cash flows from financing activities | ||
Net borrowings (repayments) under credit agreement | 29,500 | 18,500 |
Net intercompany financing activities | 134,645 | 155,225 |
Early Repayment of Senior Debt | (522,500) | |
Proceeds from Issuance of Senior Long-term Debt | 500,000 | |
Contributions from general partner | 435 | 0 |
Contribution from Joint Venture Partner | 0 | |
Distributions to HEP unitholders | (102,979) | (136,207) |
Distributions to noncontrolling interests | 0 | 0 |
Units withheld for tax withholding obligations | (147) | (119) |
Payments of Financing Costs | (255) | |
Payments of Debt Issuance Costs | (8,714) | |
Payments on finance leases | 0 | |
Other financing activities | (139) | |
Net cash provided by (used by) financing activities | 30,240 | 37,005 |
Increase (decrease) for the period | (863) | 0 |
Beginning of period | 4,790 | 2 |
End of period | 3,927 | 2 |
Guarantor Restricted Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 151,331 | 165,882 |
Cash flows from investing activities | ||
Additions to properties and equipment | (8,883) | (17,274) |
Payments to Acquire Interest in Joint Venture | (13,263) | |
Distributions from UNEV in excess of earnings | (8,191) | |
Proceeds from sale of assets | 816 | 194 |
Distributions in excess of equity in earnings of equity investments | 6,559 | 299 |
Net cash provided by (used for) investing activities | (14,771) | (8,590) |
Cash flows from financing activities | ||
Net borrowings (repayments) under credit agreement | 0 | 0 |
Net intercompany financing activities | (134,645) | (155,225) |
Early Repayment of Senior Debt | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Contributions from general partner | 0 | 0 |
Contribution from Joint Venture Partner | 0 | |
Distributions to HEP unitholders | 0 | 0 |
Distributions to noncontrolling interests | 0 | 0 |
Units withheld for tax withholding obligations | 0 | 0 |
Payments of Financing Costs | ||
Payments of Debt Issuance Costs | 0 | |
Payments on finance leases | (1,972) | |
Other financing activities | (364) | |
Net cash provided by (used by) financing activities | (136,617) | (155,589) |
Increase (decrease) for the period | (57) | 1,703 |
Beginning of period | (709) | 0 |
End of period | (766) | 1,703 |
Non-Guarantor Non-Restricted Subsidiaries | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 20,277 | 23,671 |
Cash flows from investing activities | ||
Additions to properties and equipment | (21,857) | (478) |
Payments to Acquire Interest in Joint Venture | (2,400) | |
Distributions from UNEV in excess of earnings | 0 | |
Proceeds from sale of assets | 0 | 0 |
Distributions in excess of equity in earnings of equity investments | 0 | 0 |
Net cash provided by (used for) investing activities | (24,257) | (478) |
Cash flows from financing activities | ||
Net borrowings (repayments) under credit agreement | 0 | 0 |
Net intercompany financing activities | 0 | 0 |
Early Repayment of Senior Debt | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Contributions from general partner | 13,263 | 0 |
Contribution from Joint Venture Partner | 13,263 | |
Distributions to HEP unitholders | 0 | 0 |
Distributions to noncontrolling interests | (16,000) | (21,000) |
Units withheld for tax withholding obligations | 0 | 0 |
Payments of Financing Costs | 0 | |
Payments of Debt Issuance Costs | 0 | |
Payments on finance leases | 0 | |
Other financing activities | 0 | |
Net cash provided by (used by) financing activities | 10,526 | (21,000) |
Increase (decrease) for the period | 6,546 | 2,193 |
Beginning of period | 9,206 | 3,043 |
End of period | 15,752 | 5,236 |
Eliminations | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | (5,911) | (7,559) |
Cash flows from investing activities | ||
Additions to properties and equipment | 0 | 0 |
Payments to Acquire Interest in Joint Venture | 13,263 | |
Distributions from UNEV in excess of earnings | (8,191) | |
Proceeds from sale of assets | 0 | 0 |
Distributions in excess of equity in earnings of equity investments | (6,089) | 0 |
Net cash provided by (used for) investing activities | 7,174 | (8,191) |
Cash flows from financing activities | ||
Net borrowings (repayments) under credit agreement | 0 | 0 |
Net intercompany financing activities | 0 | 0 |
Early Repayment of Senior Debt | 0 | |
Proceeds from Issuance of Senior Long-term Debt | 0 | |
Contributions from general partner | (13,263) | 0 |
Contribution from Joint Venture Partner | 0 | |
Distributions to HEP unitholders | 0 | 0 |
Distributions to noncontrolling interests | 12,000 | 15,750 |
Units withheld for tax withholding obligations | 0 | 0 |
Payments of Financing Costs | 0 | |
Payments of Debt Issuance Costs | 0 | |
Payments on finance leases | 0 | |
Other financing activities | 0 | |
Net cash provided by (used by) financing activities | (1,263) | 15,750 |
Increase (decrease) for the period | 0 | 0 |
Beginning of period | 0 | 0 |
End of period | $ 0 | $ 0 |