Holly Energy Partners L.P (NYSE:HEP) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 04:00 pm ET

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Holly Energy Partners L.P (NYSE:HEP) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the Holly Energy Partners Second Quarter 2020 Conference Call and Webcast. [Operator Instructions] 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 to Trey Schonter.

Executive
Trey Schonter

Thanks, Ian, and thank you all of you for joining our second quarter 2020 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 June 30, 2020. 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, August 5, 2020. 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.

Executive
Richard L. Voliva III

Thank you, Trey. Good afternoon, everyone and thanks for joining the call today. On behalf of Holly Energy Partners we hope that you and your families are safe and in good health during this difficult time.

To begin, I'd like to thank our employees for their continued focus and flexibility in this challenging environment. In response to COVID-19 and with the health and safety of our employees is our top priority, we have maintained several safety protocols to help protect our employees, which include limiting on-site staff to essential operational personnel only, staggering shifts and monitoring health for everyone in our pipeline control center and the work from home policy for certain employees. These actions have been successful in supporting the continuity of our operations and we will closely monitor COVID-19 developments to properly address these policies going forward.

Despite the volatile and challenging backdrop, HEP delivered solid second quarter results, highlighting the strength and resilience of our business model. On July 23, consistent with the guidance issued in April, our Board approved a $0.35 per unit quarterly cash distribution to be paid on August 13. This represents the same amount paid in the previous quarter.

As a result, the demand destruction from COVID-19, we experienced a 26% reduction in overall crude and product pipeline volumes compared to the second quarter of 2019. However, total revenues were only down 12%, representative