Comparing EBITDA growth

Of the four companies that we are comparing—Phillips 66 Partners (PSXP), Holly Energy Partners (HEP), PBF Logistics (PBFX), and Andeavor Logistics (ANDX)—Phillips 66 Partners’ EBITDA[1. earnings before interest, tax, depreciation, and amortization] grew the highest in 3Q17 over 3Q16. Its EBITDA increased 51.0% YoY (year-over-year).

PBF Logistics followed PSXP with 30% YoY EBITDA growth. PBF Logistics’ EBITDA rose to $40.9 million in 3Q17 compared to $31.5 million in 3Q16.

PSXP, HEP, PBFX, ANDX: What’s Driving Their Earnings Growth?

The chart above compares the quarterly EBITDA of Phillips 66 Partners, Holly Energy Partners, PBF Logistics, and Andeavor Logistics over the last five quarters.

Phillips 66 Partners’ EBITDA

Phillips 66 Partners’ EBITDA rose 51.0% YoY to $168.0 million in 3Q17 compared to $111.0 million in 3Q16. The increase was primarily driven by higher throughput volumes.

The year-over-year growth in volumes was partly driven by a $1.3 billion acquisition of logistics assets from Phillips 66 (PSX) and the purchase of an NGL (natural gas liquid) system in 4Q16.

In October 2017, Phillips 66 Partners acquired from its sponsor, Phillips 66, a 25.0% interest in the Bakken Pipeline system and a 100.0% interest in the coke processing units at PSX’s Sweeny Refinery for a total transaction value of $2.4 billion.

PSXP expects adjusted annual EBITDA of $270.0 million from these assets. PSXP expects to achieve a $1.1 billion run rate EBITDA goal by the end of 2018.

Andeavor Logistics’ EBITDA

Andeavor Logistics EBITDA rose 22.0% YoY to $216.0 million in 3Q17 compared to $177.0 million in 3Q16. Higher volumes, as well as contributions from drop-downs completed in 2016, contributed to the YoY growth. Andeavor Logistics targets annual EBITDA of $1.2 billion–$1.3 billion for 2018.

Holly Energy Partners’ EBITDA

Holly Energy Partners’ EBITDA rose 16.0% YoY to $75.0 million in 3Q17 compared to $64.7 million in 3Q16. The increase was primarily due to increased operating income from the Woods Cross refinery processing units.

In the next part of this series, let’s compare the dividend growth of the four companies.

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