Welcome to the Holly Energy Partners' First Quarter 2021 Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode. The floor will be open for your questions following the presentation. [Operator Instructions] Please note that this conference is being recorded. It is now my pleasure to turn the floor over to Trey Schonter. Trey, you may begin.
HEP Holly Energy Partners
Thanks, Solan, and thank you all for joining our first quarter 2021 earnings call. I'm Trey Schonter with Investor Relations for Holly Energy Partners.
Joining us today are Rich Voliva, President; and John Harrison, Senior Vice President and CFO. This morning, we issued a press release announcing the results for the quarter ending March 31, 2021.
If you would like a copy of today's press release, you may find one on our website at hollyenergy.com.
Before Rich and John proceed with their remarks, please note the Safe Harbor disclosure statement in today's press release. In summary, it says statements made regarding management expectations, judgments or predictions are forward-looking statements. These statements are intended to be covered under the Safe Harbor provisions of federal securities laws. There are many factors that could cause results to differ from expectations, including those noted in our SEC filings. Today's statements are not guarantees of future outcomes. Also, please note that information presented on today's call speaks only as of today, May 4, 2021. Any time-sensitive information provided may no longer be accurate at the time of any webcast replay or reading of the transcript.
Finally, today's call may include discussion of non-GAAP measures. Please see today's press release for reconciliations to GAAP financial measures. And with that, I'll turn the call over to Rich.
Thanks, Trey. Thanks to each of you for joining the call this afternoon. HEP generated solid results in the first quarter. Revenue remained stable as compared to the first quarter of 2020 despite the decrease in overall volumes due largely to the impact of winter storm, Uri, on HollyFrontier's Tulsa refinery and the end of petroleum refinery operations at HollyFrontier's Cheyenne refinery. HEP itself experienced no damage from Uri. Thanks to the great work of our personnel in the field.
On the refined product side, we continue to see demand improvement for transportation fuels across our regions, and we anticipate incremental demand as we head into the summer driving season.
During the quarter, we announced a $0.35 per LP unit quarterly cash distribution to be paid on May 13 to unitholders on record as of May 3. We intend to hold the distribution flat during the year and plan to use excess cash flow after capital investments and distributions for further deleveraging.
Turning to project updates. Due to the year-to-date accumulation of weather-related delays, our Cushing Connect pipeline is now expected to be in service in early July. The Navajo tank project is currently on schedule and budget with an expected start-up later this month.
We continue to make progress on the Frontier Pipeline expansion, which is currently on schedule and expected to be in service in the fourth quarter of 2021.
Looking forward, our focus remains on consistent operational execution as we continue to see improvement across our markets. And I'll now turn the call over to John.
For the first quarter of 2021, net income attributable to Holly Energy Partners was $64.4 million compared to $24.9 million in the first quarter of 2020. The increase was primarily due to a $25 million gain on sales-type leases, partially offset by an $11 million goodwill impairment charge that collectively increased net income by approximately $14 million versus first quarter 2020, which had a $26 million early extinguishment of debt charge.
First quarter 2021 adjusted EBITDA was $87.9 million compared to $91.1 million in the same period last year. A reconciliation table reflecting these adjustments can be found in our press release.
During the quarter, HEP generated distributable cash flow of $73.2 million, an increase of $2.5 million compared to the same period last year.
Our distribution coverage ratio was just under two times for the current quarter. Capital expenditures and joint venture investments during the quarter were approximately $33 million, which includes $18 million for the Cushing Connect joint venture.
For full year 2021, we expect to spend between $49 million and $61 million in total CapEx, inclusive of our share of joint venture investments, and we expect to fund all CapEx with cash generated from operations.
As of March 31, HEP had $1.4 billion of total debt outstanding, consisting of $500 million of senior notes due 2028 and $896 million drawn on our revolving credit facility. On April 30, we successfully extended the maturity of our revolving credit facility to July of 2025 and right-size the facility to $1.2 billion, consistent with our deleveraging strategy. The key financial maintenance covenants remain unchanged under the amended facility.
Our liquidity at the end of the first quarter was approximately $525 million, and our debt to trailing 12-month adjusted EBITDA was right at 4.0 times.
During the quarter, we repaid approximately $18 million on our revolving credit facility. And absent any growth opportunities, we plan to continue using retained cash flow to further reduce leverage down to our target range of 3.0 to 3.5 times.
Now I'd like to turn the call back to the operator for any questions.
[Operator Instructions] Your first question comes from the line of Spiro Dounis from Credit Suisse.
Hey, Rich. Hi, John. How are you guys doing?
Good. Spiro, how are you?
Doing well. Rich, I was hoping you could talk a little bit about some of the segments or parts of the business that are maybe still to some degree lagging pre-COVID levels. I know we're kind of almost back to normal here. But just curious if there's any segments that really haven't picked up like the others. And to the extent that we'll actually see a recovery there, will it show up in revenue? Or has that been something that at least for now has been largely protected or shielded by MVCs?
See, I think there's probably a couple of places where we've got some slack, if you will, relative to pre-COVID. One would be crude gathering, where we're not shipping as much volume up to Cushing as we were previously. There, I think a little more demand in general would help that out. UNEV has seen less demand than pre-COVID levels, and I think that's a function of Vegas demand, especially vis-à-vis Salt Lake City.
So as we see demand recover there, well, we expect we'd see more volume with UNEV. Those will be the two that probably have slack versus the pre-COVID range.
So just a little bit of a tour to the upside there on the recovery.
Second question, maybe sticking with MVCs a bit, but just thinking about the outlook. Like you said, backdrop improving, getting real close to normal here, generally speaking. But I guess, over the next few years, correct if I'm wrong, but I think there's anywhere between $30 million to $40 million per year of MVCs or leases kind of rolling off or sputtering. I'm just curious how we should think about your position on that front? Are these assets that are highly utilized now and will continue to be? Just trying to get a sense of how much we should risk any of that, if at all.
No, these are all, Spiro, pretty highly utilized assets. And remember, these are all assets that - or critical infrastructure function to the refineries that we serve.
So we're expecting to see these commitments renewed going forward. Really - obviously, in the last year, 1.5 years, Cheyenne has been the place that we had a change, but I think that was specific to the competitive nature of that refinery. We don't see that kind of risk with any of the other refineries that we serve.
Okay. Good to know. Last one if I could sneak in just a quick housekeeping question.
And sorry, John, if you addressed this, but it looks like tariffs not recorded as revenue were closer to $7 million this quarter.
I think typically, that number is about half than that, maybe closer to $2 million or $3 million. Curious what drove that uptick on that line item and if that's something that's going to be sustainable?
So we did have some new sales type lease adjustments, particularly related to the Cheyenne assets, as well as a lubes rack at Tulsa.
So that's what drove it, and it is going to be recurring.
So you'll see kind of that - those two adjustments netted together of a positive $5 million on a quarterly basis going forward.
Great. Makes sense. That’s all I had. Thank you, gentlemen. Be well.
[Operator Instructions] Okay, if there are no further questions, I will turn the floor back over to Trey for any closing remarks.
Thanks again for joining the call today. Feel free to reach out to Investor Relations if you have any questions. Thank you.
This concludes today's conference call.
You may now disconnect. Thank you for joining, and have a great day.