HOLLY ENERGY PARTNERS LP, 10-Q filed on 5/3/2017
Quarterly Report
Document Entity Information
3 Months Ended
Mar. 31, 2017
Apr. 28, 2017
Entity Information [Line Items]
 
 
Entity Registrant Name
HOLLY ENERGY PARTNERS LP 
 
Entity Central Index Key
0001283140 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2017 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
63,922,861 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 7,007 
$ 3,657 
Accounts receivable:
 
 
Trade
10,111 
7,846 
Affiliates
35,634 
42,562 
Total accounts receivable
45,745 
50,408 
Prepaid and other current assets
3,170 
2,888 
Total current assets
55,922 
56,953 
Properties and equipment, net
1,320,981 
1,328,395 1
Transportation agreements, net
65,118 
66,856 
Goodwill
256,498 
256,498 
Equity method investments
162,319 
165,609 
Other assets
9,297 
9,926 
Total assets
1,870,135 
1,884,237 1
Accounts payable:
 
 
Trade
11,459 
10,518 
Affiliates
6,500 
16,424 
Total accounts payable
17,940 
26,942 
Accrued interest
4,518 
18,069 
Deferred revenue
11,807 
11,102 
Accrued property taxes
5,407 
5,397 
Other current liabilities
2,779 
3,225 
Total current liabilities
42,451 
64,735 
Long-term debt
1,240,565 
1,243,912 
Other long-term liabilities
16,521 
16,445 1
Deferred revenue
46,881 
47,035 
Class B unit
41,000 
40,319 
Partners’ equity:
 
 
Common unitholders (63,922,861 and 62,780,503 units issued and outstanding at March 31, 2017 and December 31, 2016, respectively
521,050 
510,975 
General partner interest (2% interest)
(131,678)
(132,832)1
Accumulated other comprehensive loss
154 
91 
Total partners’ equity
389,526 
378,234 1
Noncontrolling interest
93,191 
93,557 
Total Equity
482,717 
471,791 1
Total liabilities and equity
$ 1,870,135 
$ 1,884,237 1
Consolidated Balance Sheets (Parenthetical)
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Partners' Equity:
 
 
Common units issued
63,922,861 
62,780,503 
Common units outstanding
63,922,861 
62,780,503 
General partner interest
2.00% 
 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Revenues:
 
 
Affiliates
$ 89,025 
$ 82,800 
Third parties
16,609 
19,164 1
Total revenues
105,634 
102,010 1
Operating costs and expenses:
 
 
Operations (exclusive of depreciation and amortization)
32,489 
27,855 1
Depreciation and amortization
18,777 
16,551 1
General and administrative
2,634 
3,091 1
Total operating costs and expenses
53,900 
47,497 1
Operating income
51,734 
54,513 1
Other income (expense):
 
 
Equity in earnings of equity method investments
1,840 
2,765 1
Interest expense
(13,539)
(10,535)1
Interest income
102 
112 1
Loss on early extinguishment of debt
(12,225)
0 
Gain (Loss) on Sale of Assets and Other
73 
(8)1
Total other income (expense)
(23,749)
(7,666)1
Income before income taxes
27,985 
46,847 1
State income tax (expense) benefit
(106)
(95)1
Net Income
27,879 
46,752 1
Net (Income) Loss Attributable to Predecessor
0 
1,150 1
Allocation of net income attributable to noncontrolling interests
(2,316)
(4,927)1
Net income attributable to Holly Energy Partners
25,563 
42,975 1
General partner interest in net income, including incentive distributions
(17,138)
(12,103)1
Limited partners’ interest in net income
$ 8,425 
$ 30,872 1
Limited partners’ per unit interest in earnings—basic and diluted:
$ 0.13 
$ 0.52 1
Weighted average limited partners’ units outstanding
63,113 
58,657 1
Consolidated Statement of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Net income
$ 27,879 
$ 46,752 1
Other comprehensive income:
 
 
Change in fair value of cash flow hedging instruments
76 
(683)
Reclassification adjustment to net income on partial settlement of cash flow hedge
(13)
230 
Other comprehensive income (loss)
63 
(453)
Comprehensive income before noncontrolling interest
27,942 
46,299 1
Net (Income) Loss Attributable to Predecessor
0 
1,150 1
Allocation of net income attributable to noncontrolling interests
(2,316)
(4,927)1
Comprehensive income attributable to Holly Energy Partners
$ 25,626 
$ 42,522 1
Consolidated Statements of Cash Flows (USD $)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Cash flows from operating activities
 
 
Net income
$ 27,879,000 
$ 46,752,000 1
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
18,777,000 
16,551,000 1
(Gain) loss on sale of assets
(58,000)
0 
Amortization of deferred charges
770,000 
593,000 
Amortization of restricted and performance units
398,000 
651,000 
Distributions less than income from equity investments
273,000 
(365,000)
Loss on early extinguishment of debt
12,225,000 
0 
(Increase) decrease in operating assets:
 
 
Accounts receivable – trade
375,000 
657,000 
Accounts receivable – affiliates
7,733,000 
(637,000)
Prepaid and other current assets
(282,000)
(128,000)
Increase (decrease) in operating liabilities:
 
 
Accounts payable – trade
(1,122,000)
(1,082,000)
Accounts payable – affiliates
(9,943,000)
(5,460,000)
Accrued interest
(13,551,000)
(4,780,000)
Deferred revenue
551,000 
(4,588,000)
Accrued property taxes
9,000 
343,000 
Other current liabilities
(328,000)
(843,000)
Other, net
(106,000)
(295,000)
Net cash provided by operating activities
43,600,000 
47,369,000 
Cash flows from investing activities
 
 
Additions to Properties and Equipment
(8,265,000)
(17,873,000)1
Payments to Acquire Other Property, Plant, and Equipment
0 
(24,311,000)
Proceeds from sale of assets
424,000 
12,000 
Distributions in excess of equity in earnings of equity investments
3,016,000 
99,000 
Net cash used for investing activities
(4,825,000)
(42,073,000)
Cash flows from financing activities
 
 
Borrowings under credit agreement
380,000,000 
522,000,000 
Repayments of credit agreement borrowings
(86,000,000)
(469,000,000)
Contributions from General Partner
0 
 
Redemption of senior notes
(309,750,000)
0 
Proceeds from Issuance of Common Units
37,563,000 
0 
Distributions to HEP unitholders
(54,805,000)
(44,960,000)
Distributions to noncontrolling interests
(2,000,000)
(1,250,000)
Distribution to HFC for Tulsa Tank Acquisition
0 
(39,500,000)
Additions to Properties and Equipment
103,000 
0 
Contributions from HFC for acquisitions
0 
25,343,000 1
Purchase of units for incentive grants
0 
(784,000)
Deferred financing costs
0 
(2,964,000)
Other
(330,000)
(160,000)
Net cash used for financing activities
(35,425,000)
(11,275,000)
Cash and cash equivalents
 
 
Increase (decrease) for the period
3,350,000 
(5,979,000)
Beginning of period
3,657,000 
15,013,000 
End of period
$ 7,007,000 
$ 9,034,000 
Consolidated Statement of Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Units
General Partner Interest
Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interest
Balance at December 31, 2016 at Dec. 31, 2016
$ 471,791 
$ 510,975 
$ (132,832)1
$ 91 
$ 93,557 
Partners' Capital Account, Sale of Units
39,371 
39,371 
 
 
 
Increase (Decrease) in Partners' Equity [Roll Forward]
 
 
 
 
 
Contribution from HFC
805 
 
805 
 
 
Additions to Properties and Equipment
(103)
 
(103)
 
 
Distributions to HEP unitholders
(54,806)
(38,134)
(16,672)
 
 
Distributions to Noncontrolling Interest
(2,000)
 
 
 
(2,000)
Amortization of restricted and performance units
398 
398 
 
 
 
Class B unit accretion
(681)
(667)
(14)
 
 
Net income
27,879 
9,107 
17,138 
 
1,634 
Other comprehensive income
63 
 
 
63 
 
Balance at March 31, 2017 at Mar. 31, 2017
$ 482,717 
$ 521,050 
$ (131,678)
$ 154 
$ 93,191 
Description of Business and Presentation of Financial Statements
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 which is 36% owned (including the 2% general partner interest) by HollyFrontier Corporation (“HFC”) and its subsidiaries as of March 31, 2017. 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.

We own and operate petroleum product and crude oil pipelines, terminal, tankage and loading rack facilities and refinery processing units that support HFC’s refining and marketing operations in the Mid-Continent, Southwest and Northwest regions of the United States and Alon USA, Inc.’s (“Alon”) refinery in Big Spring, Texas. Additionally, we own a 75% interest in UNEV Pipeline, LLC (“UNEV”), a 50% interest in Frontier Aspen, LLC, a 50% interest in Osage Pipe Line Company, LLC (“Osage”), a 50% interest in Cheyenne Pipeline LLC and a 25% interest in SLC Pipeline LLC.

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 13.

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, 2016. 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, 2017.

Principles of Consolidation and Common Control Transactions
The consolidated financial statements include our accounts, our Predecessor's (defined below) 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. U.S. generally accepted accounting principles ("GAAP") require transfers of a business between entities under common control to be accounted for as though the transfer occurred as of the beginning of the period of transfer, and prior period financial statements and financial information are retrospectively adjusted to include the historical results and assets of the acquisitions from HFC for all periods presented prior to the effective dates of each acquisition. We refer to the historical results of the acquisitions prior to their respective acquisition dates as those of our "Predecessor." Many of these transactions are cash purchases and do not involve the issuance of equity; however, GAAP requires the retrospective adjustment of financial statements. Therefore, in such transactions, the prior year balance sheet includes as equity the amount of cost incurred by HFC to that date. See Acquisitions below for further discussion as well as effects of the retrospective adjustments.

Acquisitions

Osage
On February 22, 2016, HFC obtained a 50% membership interest in Osage in a non-monetary exchange for a 20-year terminalling services agreement, whereby a subsidiary of Magellan Midstream Partners (“Magellan”) will provide terminalling services for all HFC products originating in Artesia, New Mexico requiring terminalling in or through El Paso, Texas. Osage is the owner of the Osage Pipeline, a 135-mile pipeline that transports crude oil from Cushing, Oklahoma to HFC’s El Dorado Refinery in Kansas and also connects to the Jayhawk pipeline serving the CHS Inc. refinery in McPherson, Kansas. The Osage Pipeline is the primary pipeline supplying HFC’s El Dorado refinery with crude oil.

Concurrent with this transaction, we entered into a non-monetary exchange with HFC, whereby we received HFC’s interest in Osage in exchange for our El Paso terminal. Under this exchange, we agreed to build two connections on our south products pipeline system that will permit HFC access to Magellan’s El Paso terminal. Effective upon the closing of this exchange, we became the named operator of the Osage Pipeline and transitioned into that role on September 1, 2016. Since we are a consolidated VIE of HFC, this transaction was recorded as a transfer between entities under common control and reflects HFC’s carrying basis of its 50% membership interest in Osage of $44.5 million offset by our net carrying basis in the El Paso terminal of $12.1 million with the difference recorded as a contribution from HFC. However, since these transactions were concurrent, there was no impact on periods prior to February 22, 2016.

Tulsa Tanks
On March 31, 2016, we acquired crude oil tanks (the “Tulsa Tanks”) located at HFC’s Tulsa refinery from an affiliate of Plains All American Pipeline, L.P. (“Plains”) for cash consideration of $39.5 million. In 2009, HFC sold these tanks to Plains and leased them back, and due to HFC’s continuing interest in the tanks, HFC accounted for the transaction as a financing arrangement. Accordingly, the tanks had remained on HFC’s balance sheet and were being depreciated for accounting purposes.

As we are a consolidated VIE of HFC, this transaction was recorded as a transfer between entities under common control and reflects HFC’s carrying basis in the net assets acquired. In the previously reported consolidated statement of income and consolidated cash flows for the three months ended March 31, 2016, we adjusted our financial position and operating results as if these units were owned for all periods while we were under common control of HFC.

Cheyenne Pipeline
On June 3, 2016, we acquired a 50% interest in Cheyenne Pipeline LLC, owner of the Cheyenne Pipeline, in exchange for a contribution of $42.6 million in cash to Cheyenne Pipeline LLC. Cheyenne Pipeline LLC will continue to be operated by an affiliate of Plains, which owns the remaining 50% interest. The 87-mile crude oil pipeline runs from Fort Laramie to Cheyenne, Wyoming and has an 80,000 barrel per day (“bpd”) capacity.

Woods Cross Operating
Effective October 1, 2016, we acquired all the membership interests of Woods Cross Operating LLC (“Woods Cross Operating”), a wholly owned subsidiary of HFC, which owns the newly constructed atmospheric distillation tower, fluid catalytic cracking unit, and polymerization unit located at HFC’s Woods Cross Refinery, for cash consideration of $278 million. The consideration was funded with $103 million in proceeds from the private placement of 3,420,000 common units with the balance funded with borrowings under our credit facility. In connection with this transaction, we entered into 15-year tolling agreements containing minimum quarterly throughput commitments from HFC that provide minimum annualized revenues of $56.7 million.

The Utah Division of Air Quality issued an air quality permit to HollyFrontier Woods Cross Refining LLC (“HFC Woods Cross Refining”) authorizing the expansion units at the Woods Cross Refinery. The appeal proceeding challenging the Utah Department of Environmental Quality’s decision to uphold the air quality permit is still pending. The purchase agreement provides us with the option to compel HFC Woods Cross Refining to repurchase the interests for the full purchase price paid if the assets are required to be idled for 90 or more days as a result of a final decision in the appeal proceedings. If we do not exercise the foregoing right and, by reason of the appeal proceedings, the assets must be modified, then HFC will be responsible for the costs of such modifications.

As we are a consolidated VIE of HFC, this transaction was recorded as a transfer between entities under common control and reflect HFC’s carrying basis in the net assets acquired. We have retrospectively adjusted our financial position and operating results as if these units were owned for all periods while we were under common control of HFC.

The following table presents lines in our previously reported income statement for the three months ended March 31, 2016, that were impacted by Predecessor transactions, and retrospectively adjusts only the acquisition of Woods Cross Operating as the Tulsa Tanks acquisition included Predecessor transactions in the previously reported income statement for the three months ended March 31, 2016. However, the presentation of the Tulsa Tanks’ Predecessor transactions have been modified as shown in the table below.
 
 
Three Months Ended March 31, 2016
 
 
Holly Energy Partners, L.P.(Previously reported)
 
Tulsa Tanks
 
Woods Cross Operating
 
Holly Energy Partners, L.P. (Currently reported)
 
 
(In Thousands)
Operating costs and expenses:
 
 
 
 
 
 
 
 
       Operations (exclusive of depreciation and
       amortization)
 
$
26,922

 
$
—

 
$
933

 
$
27,855

Allocation of net loss attributable to predecessor
 
—

 
217

 
933

 
1,150


The following table presents lines in our previously reported cash flows for the three months ended March 31, 2016, that were impacted by Predecessor transactions, and retrospectively adjusts only the acquisition of Woods Cross Operating as the Tulsa Tanks acquisition included Predecessor transactions in the previously reported cash flows for the three months ended March 31, 2016.
 
 
Three Months Ended March 31, 2016
 
 
Holly Energy Partners, L.P.(Previously reported)
 
Woods Cross Operating
 
Holly Energy Partners, L.P.
(Currently reported)
Cash flows from operating activities
 
(In Thousands)
Net income
 
$
47,685

 
$
(933
)
 
$
46,752

Net cash provided by operating activities
 
$
48,302

 
$
(933
)
 
$
47,369

 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
Additions to properties and equipment
 
$
(17,873
)
 
$
—

 
$
(17,873
)
Acquisition of tanks and operating units
 
—

 
(24,311
)
 
(24,311
)
Net cash used for investing activities
 
$
(17,762
)
 
$
(24,311
)
 
$
(42,073
)
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
Contributions from HFC for acquisitions
 
$
99

 
$
25,244

 
$
25,343

Net cash provided (used) by financing activities
 
$
(36,519
)
 
$
25,244

 
$
(11,275
)

Accounting Pronouncements Adopted During the Periods Presented

Earnings Per Unit
In April 2015, an accounting standard update was issued requiring changes to the allocation of the earnings or losses of a transferred business for periods before the date of a dropdown of net assets accounted for as a common control transaction entirely to the general partner for purposes of calculating historical earnings per unit. We adopted this standard as of January 1, 2016. In connection with the dropdown of assets from HFC’s Tulsa refinery on March 31, 2016, and the purchase of HFC’s Woods Cross refinery units on October 1, 2016, we reduced net income by $0.2 million and $0.9 million, respectively, for the three months ended March 31, 2016. This reduction had no impact on the historical earnings per limited partner unit.

Share-Based Compensation
In March 2016, an accounting standard update was issued which simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. We adopted this standard effective January 1, 2017, with no impact to our financial condition, results of operations and cash flows. As permitted by the standard, we continue to account for forfeitures on an estimated basis.

Accounting Pronouncements Not Yet Adopted

Revenue Recognition
In May 2014, an accounting standard update was issued requiring revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the expected consideration for these goods or services. This standard has an effective date of January 1, 2018, and we intend to account for the new guidance using the modified retrospective implementation method, whereby a cumulative effect adjustment is recorded to retained earnings as of the date of initial application. Our preparation for adoption of this standard is in progress, and we are currently evaluating terms, conditions and our performance obligations of our existing contracts with customers. We are evaluating the effect of this standard on our revenue recognition policies and whether it will have a material impact on our financial condition or results of operations.

Business Combinations
In December 2014, an accounting standard update was issued to provide new guidance on the definition of a business in relation to accounting for identifiable intangible assets in business combinations. This standard has an effective date of January 1, 2018, and we are evaluating its impact.

Financial Assets and Liabilities
In January 2016, an accounting standard update was issued requiring changes in the accounting and disclosures for financial instruments. This standard will become effective beginning with our 2018 reporting year. We are evaluating the impact of this standard.

Leases
In February 2016, an accounting standard update was issued requiring leases to be measured and recognized as a lease liability, with a corresponding right-of-use asset on the balance sheet. This standard has an effective date of January 1, 2019, and we are evaluating the impact of this standard.
Financial Instruments
Financial Instruments
Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt and interest rate swaps. 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.

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.

The carrying amounts and estimated fair values of our senior notes and interest rate swaps were as follows:
 
 
 
 
March 31, 2017
 
December 31, 2016
Financial Instrument
 
Fair Value Input Level
 
Carrying
Value
 
Fair Value
 
Carrying
Value
 
Fair Value
 
 
 
 
(In thousands)
Assets:
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Level 2
 
$
154

 
$
154

 
$
91

 
$
91

 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
6.5% Senior notes
 
Level 2
 
$
—

 
$
—

 
$
297,519

 
$
308,250

6% Senior notes
 
Level 2
 
393,565

 
422,288

 
393,393

 
415,500

 
 
 
 
$
393,565

 
$
422,288

 
$
690,912

 
$
723,750



Level 2 Financial Instruments
Our senior notes and interest rate swaps 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. The fair value of our interest rate swaps is based on the net present value of expected future cash flows related to both variable and fixed-rate legs of the swap agreement. This measurement is computed using the forward London Interbank Offered Rate (“LIBOR”) yield curve, a market-based observable input.

See Note 6 for additional information on these instruments.
Properties and Equipment
Properties and Equipment
Properties and Equipment 

The carrying amounts of our properties and equipment are as follows:
 
 
March 31,
2017
 
December 31,
2016
 
 
(In thousands)
Pipelines, terminals and tankage
 
$
1,247,967

 
$
1,246,746

Refinery assets
 
347,075

 
346,058

Land and right of way
 
65,331

 
65,331

Construction in progress
 
35,148

 
28,753

Other
 
27,662

 
27,133

 
 
1,723,183

 
1,714,021

Less accumulated depreciation
 
402,202

 
385,626

 
 
$
1,320,981

 
$
1,328,395



We capitalized $0.2 million and $0.1 million in interest attributable to construction projects during the three months ended March 31, 2017 and 2016, respectively.

Depreciation expense was $16.9 million and $14.7 million for the three months ended March 31, 2017 and 2016, respectively, and includes depreciation of assets acquired under capital leases.
Transportation Agreements
Transportation Agreements
Transportation Agreements

Our transportation agreements are intangible assets that represent a portion of the total purchase price of certain assets acquired from Alon in 2005 and from HFC in 2008 prior to HEP becoming a consolidated VIE of HFC. The Alon agreement is being amortized over 30 years ending 2035 (the initial 15-year term of the agreement plus an expected 15-year extension period), and the HFC agreement is being amortized over 15 years ending 2023 (the term of the HFC agreement).

The carrying amounts of our transportation agreements are as follows:
 
 
March 31,
2017
 
December 31,
2016
 
 
(In thousands)
Alon transportation agreement
 
$
59,933

 
$
59,933

HFC transportation agreement
 
74,231

 
74,231

Other
 
50

 
50

 
 
134,214

 
134,214

Less accumulated amortization
 
69,096

 
67,358

 
 
$
65,118

 
$
66,856


Amortization expense was $1.7 million for each of the three months ended March 31, 2017 and 2016.

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 VIE 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 Incentive Plans
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. These employees participate in the retirement and benefit plans of HFC. Our share of retirement and benefit plan costs was $1.7 million and $1.6 million for the three months ended March 31, 2017 and 2016, respectively.

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 March 31, 2017, we have two types of incentive-based awards outstanding, which are described below. The compensation cost charged against income was $0.3 million and $0.7 million for the three months ended March 31, 2017 and 2016, respectively. 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 March 31, 2017, 2,500,000 units were authorized to be granted under our Long-Term Incentive Plan, of which 1,409,261 have not yet been granted, assuming no forfeitures of the unvested units and full achievement of goals for the unvested performance units.

Restricted Units
Under our Long-Term Incentive Plan, we grant restricted units to non-employee directors and 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 and voting rights on these units from the date of grant.

The fair value of each restricted 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 unit activity and changes during the three months ended March 31, 2017, is presented below:
Restricted Units
 
Units
 
Weighted Average Grant-Date Fair Value
Outstanding at January 1, 2017 (nonvested)
 
123,988

 
$
32.96

Granted
 
20,348

 
36.01

Forfeited
 
(17,653
)
 
29.75

Outstanding at March 31, 2017 (nonvested)
 
126,683

 
$
33.90



As of March 31, 2017, there was $2.0 million of total unrecognized compensation expense related to nonvested restricted 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 executives who perform services for us. Performance units granted are payable in common units at the end of a three-year performance period based upon the growth in our distributable cash flow per common unit over the performance period. As of March 31, 2017, 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 three months ended March 31, 2017. Performance units granted in 2016 vest over a three-year performance period ending December 31, 2019, and are payable in HEP common units. The number of units actually earned will be based on the growth of our distributable cash flow per common unit over the performance period, and can range from 50% to 150% of the target number of performance units granted. Although common units are not transferred to the recipients until the performance units vest, the recipients have distribution rights with respect to the common units from the date of grant.

A summary of performance unit activity and changes during the three months ended March 31, 2017, is presented below:
Performance Units
 
Units
Outstanding at January 1, 2017 (nonvested)
 
49,520

Vesting and transfer of common units to recipients
 
(2,262
)
Forfeited
 
(21,228
)
Outstanding at March 31, 2017 (nonvested)
 
26,030



The grant-date fair value of performance units vested and transferred to recipients during the three months ended March 31, 2017, was $0.1 million. Based on the weighted average fair value of performance units outstanding at March 31, 2017, of $0.9 million, there was $0.6 million of total unrecognized compensation expense related to nonvested performance units, which is expected to be recognized over a weighted-average period of 2.0 years.
Debt
Debt
Debt

Credit Agreement
We have a $1.2 billion senior secured revolving credit facility (the “Credit Agreement”) expiring in November 1, 2018. The Credit Agreement is available to fund capital expenditures, investments, acquisitions, distribution payments and working capital and for general partnership purposes. It is also available to fund letters of credit up to a $50 million sub-limit.

Our obligations under the Credit Agreement are collateralized by substantially all of our assets. Indebtedness under the Credit Agreement involves recourse to HEP Logistics Holdings, L.P. (“HEP Logistics”), our general partner, and is guaranteed by our material, wholly-owned subsidiaries. Any recourse to HEP Logistics would be limited to the extent of its assets, which other than its investment in us are not significant. We may prepay all loans at any time without penalty, except for payment of certain breakage and related costs.

The Credit Agreement imposes certain requirements on us including: a prohibition against distribution to unitholders if, before or after the distribution, a potential default or an event of default as defined in the agreement would occur; limitations on our ability to incur debt, make loans, acquire other companies, change the nature of our business, enter into a merger or consolidation, or sell assets; and covenants that require maintenance of a specified EBITDA to interest expense ratio, total debt to EBITDA ratio and senior debt to EBITDA ratio. If an event of default exists under the Credit Agreement, the lenders will be able to accelerate the maturity of the debt and exercise other rights and remedies. We were in compliance with the covenants as of March 31, 2017.

Senior Notes
On January 4, 2017, we redeemed the $300 million aggregate principal amount of 6.5% senior notes (the “6.5% Senior Notes”) at a redemption cost of $309.8 million at which time we recognized a $12.2 million early extinguishment loss consisting of a $9.8 million debt redemption premium and unamortized discount and financing costs of $2.4 million. We funded the redemption with borrowings under our Credit Agreement.

On July 19, 2016, we closed a private placement of $400 million in aggregate principal amount of 6% senior unsecured notes due in 2024 (the “6% Senior Notes”). We used the net proceeds to repay indebtedness under our Credit Agreement.

The 6% 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 6% Senior Notes as of March 31, 2017. At any time when the 6% Senior Notes are rated investment grade by both Moody’s and 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 6% Senior Notes.

Indebtedness under the 6% Senior Notes is guaranteed by our wholly-owned subsidiaries.

Long-term Debt
The carrying amounts of our long-term debt are as follows:
 
 
March 31,
2017
 
December 31,
2016
 
 
(In thousands)
Credit Agreement
 
 
 
 
Amount outstanding
 
$
847,000

 
$
553,000

 
 
 
 
 
6% Senior Notes
 
 
 
 
Principal
 
400,000

 
400,000

Unamortized debt issuance costs
 
(6,435
)
 
(6,607
)
 
 
393,565

 
393,393

6.5% Senior Notes
 
 
 
 
Principal
 
—

 
300,000

Unamortized discount and debt issuance costs
 
—

 
(2,481
)
 
 
—

 
297,519

 
 
 
 
 
Total long-term debt
 
$
1,240,565

 
$
1,243,912



Interest Rate Risk Management
We use interest rate swaps (derivative instruments) to manage our exposure to interest rate risk.

As of March 31, 2017, we have two interest rate swaps with identical terms that hedge our exposure to the cash flow risk caused by the effects of LIBOR changes on $150 million of Credit Agreement advances. The swaps effectively convert $150 million of our LIBOR based debt to fixed rate debt having an interest rate of 0.74% plus an applicable margin of 2.25% as of March 31, 2017, which equaled an effective interest rate of 2.99%. Both of these swap contracts mature in July 2017.

We have designated these interest rate swaps as cash flow hedges. Based on our assessment of effectiveness using the change in variable cash flows method, we have determined these interest rate swaps are effective in offsetting the variability in interest payments on $150 million of our variable rate debt resulting from changes in LIBOR. Under hedge accounting, we adjust our cash flow hedges on a quarterly basis to their fair values with the offsetting fair value adjustments to accumulated other comprehensive income (loss). Also on a quarterly basis, we measure hedge effectiveness by comparing the present value of the cumulative change in the expected future interest to be paid or received on the variable leg of our swaps against the expected future interest payments on $150 million of our variable rate debt. Any ineffectiveness is recorded directly to interest expense. As of March 31, 2017, we had no ineffectiveness on our cash flow hedges.

At March 31, 2017, we have accumulated other comprehensive income of $0.2 million that relates to our current cash flow hedging instruments. Approximately $0.2 million will be transferred from accumulated other comprehensive income into interest expense as interest is paid on the underlying swap agreement over the next twelve-month period, assuming interest rates remain unchanged.

Additional information on our interest rate swaps is as follows:
Derivative Instrument
 
Balance Sheet Location
 
Fair Value
 
Location of Offsetting Balance
 
Offsetting
Amount
 
 
(In thousands)
March 31, 2017
 
 
 
 
 
 
 
 
Interest rate swaps designated as cash flow hedging instrument:
 
 
 
 
 
 
Variable-to-fixed interest rate swap contracts ($150 million of LIBOR-based debt interest)
 
Other current   assets
 
$
154

 
Accumulated other
    comprehensive income
 
$
154

 
 
 
 
$
154

 
 
 
$
154

 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
Interest rate swaps designated as cash flow hedging instrument:
 
 
 
 
 
 
Variable-to-fixed interest rate swap contract ($150 million of LIBOR-based debt interest)
 
Other current  assets
 
$
91

 
Accumulated other
    comprehensive income
 
$
91

 
 
 
 
$
91

 
 
 
$
91


Interest Expense and Other Debt Information
Interest expense consists of the following components:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
Interest on outstanding debt:
 
 
 
 
Credit Agreement, net of interest on interest rate swaps
 
$
6,449

 
$
5,006

6.5% Senior Notes
 
162

 
4,875

6% Senior Notes
 
6,000

 
—

Amortization of discount and deferred debt issuance costs
 
770

 
593

Commitment fees and other
 
354

 
201

Total interest incurred
 
13,735

 
10,675

Less capitalized interest
 
196

 
140

Net interest expense
 
$
13,539

 
$
10,535

Cash paid for interest
 
$
26,517

 
$
14,841


Capital Lease Obligations
Our capital lease obligations relate to vehicle leases with initial terms of 33 to 48 months. The total cost of assets under capital leases was $5.3 million and $4.9 million as of March 31, 2017 and December 31, 2016, respectively, with accumulated depreciation of $2.9 million and $2.4 million as of March 31, 2017 and December 31, 2016, respectively. We include depreciation of capital leases in depreciation and amortization in our consolidated statements of income.
Significant Customers
Significant Customers
Significant Customers

All revenues are domestic revenues, of which 92% are currently generated from our two largest customers: HFC and Alon.

The following table presents the percentage of total revenues generated by each of these customers:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
HFC
 
84
%
 
81
%
Alon
 
8
%
 
8
%
Related Party Transactions
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 2019 to 2036. 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 based on the Producer Price Index (“PPI”) or Federal Energy Regulatory Commission (“FERC”) index. As of March 31, 2017, these agreements with HFC require minimum annualized payments to us of $321 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 an omnibus agreement we have with HFC (the “Omnibus Agreement”), we pay HFC an annual administrative fee (currently $2.5 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 $89.0 million and $82.8 million for the three months ended March 31, 2017 and 2016, respectively.
•
HFC charged us general and administrative services under the Omnibus Agreement of $0.6 million for each of the three months ended March 31, 2017 and 2016.
•
We reimbursed HFC for costs of employees supporting our operations of $11.4 million and $9.8 million for the three months ended March 31, 2017 and 2016, respectively.
•
HFC reimbursed us $1.3 million and $1.8 million for the three months ended March 31, 2017 and 2016, respectively, for expense and capital projects.
•
We distributed $30.3 million and $24.5 million for the three months ended March 31, 2017 and 2016, respectively, to HFC as regular distributions on its common units and general partner interest, including general partner incentive distributions.
•
Accounts receivable from HFC were $35.6 million and $42.6 million at March 31, 2017, and December 31, 2016, respectively.
•
Accounts payable to HFC were $6.5 million and $16.4 million at March 31, 2017, and December 31, 2016, respectively.
•
Revenues for the three months ended March 31, 2017 and 2016, include $2.1 million and $5.2 million, respectively, of shortfall payments billed to HFC in 2016 and 2015, respectively. Deferred revenue in the consolidated balance sheets at March 31, 2017 and December 31, 2016, includes $5.8 million and $5.6 million, respectively, relating to certain shortfall billings. It is possible that HFC may not exceed its minimum obligations to receive credit for any of the $5.8 million deferred at March 31, 2017.
Partners' Equity
Partners' Equity
Partners’ Equity

As of March 31, 2017, HFC held 22,380,030 of our common units and the 2% general partner interest, which together constituted a 36% ownership interest in us. Additionally, HFC owned all incentive distribution rights.

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. For the three months ended March 31, 2017, HEP issued 1,142,358 units under this program, providing $40.3 million in gross proceeds. We incurred sales commissions of $0.8 million associated with the issuance of these units. In connection with this program and to maintain the 2% general partner interest, HFC made capital contributions totaling $0.8 million. As of March 31, 2017, HEP has issued 1,845,813 units under this program, providing $63.8 million in gross proceeds.

We intend to use our net proceeds for general partnership purposes, which may include funding working capital, repayment of debt, acquisitions and capital expenditures. Amounts repaid under our credit facility may be reborrowed from time to time.

Allocations of Net Income
Net income attributable to HEP is allocated between limited partners and the general partner interest in accordance with the provisions of the partnership agreement. HEP net income allocated to the general partner includes incentive distributions that are declared subsequent to quarter end. After incentive distributions and other priority allocations are allocated to the general partner, the remaining net income attributable to HEP is allocated to the partners based on their weighted-average ownership percentage during the period.

The following table presents the allocation of the general partner interest in net income for the periods presented below: 
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
General partner interest in net income
 
$
511

 
$
630

General partner incentive distribution
 
16,627

 
11,473

Net loss attributable to Predecessor
 
—

 
(1,150
)
Total general partner interest in net income
 
$
17,138

 
$
10,953



Cash Distributions
Our general partner, HEP Logistics, is entitled to incentive distributions if the amount we distribute with respect to any quarter exceeds specified target levels.

On April 27, 2017, we announced our cash distribution for the first quarter of 2017 of $0.620 per unit. The distribution is payable on all common and general partner units and will be paid May 15, 2017, to all unitholders of record on May 8, 2017.

The following table presents the allocation of our regular quarterly cash distributions to the general and limited partners for the periods in which they apply. Our distributions are declared subsequent to quarter end; therefore, the amounts presented do not reflect distributions paid during the periods presented below.
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands, except per unit data)
General partner interest in distribution
 
$
1,148

 
$
948

General partner incentive distribution
 
16,627

 
11,473

Total general partner distribution
 
17,775

 
12,421

Limited partner distribution
 
39,632

 
33,728

Total regular quarterly cash distribution
 
$
57,407

 
$
46,149

Cash distribution per unit applicable to limited partners
 
$
0.6200

 
$
0.5750



As a master limited partnership, we distribute our available cash, which historically has exceeded our net income attributable to HEP because depreciation and amortization expense represents a non-cash charge against income. The result is a decline in our partners’ equity since our regular quarterly distributions have exceeded our quarterly net income attributable to HEP. Additionally, if the asset contributions and acquisitions from HFC had occurred while we were not a consolidated variable interest entity of HFC, our acquisition cost, in excess of HFC’s historical basis in the transferred assets, would have been recorded in our financial statements at the time of acquisition as increases to our properties and equipment and intangible assets instead of decreases to our partners’ equity.
Net Income per Limited Partner Unit (Notes)
Net Income Per Limited Partner Unit
Net Income Per Limited Partner Unit

Net income per unit applicable to the limited partners is computed using the two-class method, because we have more than one class of participating securities.  The classes of participating securities as of March 31, 2017, included common units, general partner units and incentive distribution rights (IDRs). 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. The dilutive securities are immaterial for all periods presented.

When our financial statements are retrospectively adjusted after a dropdown transaction, the earnings of the acquired business, prior to the closing of the transaction, are allocated entirely to our general partner and presented as net income (loss) attributable to Predecessors. The earnings per unit of our limited partners prior to the close of the transaction do not change as a result of the dropdown. After the closing of a dropdown transaction, the earnings of the acquired business are allocated in accordance with our partnership agreement as previously described.

For purposes of applying the two-class method including the allocation of cash distributions in excess of earnings, net income per limited partner unit is computed as follows:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
Net income attributable to the partners
 
$
25,563

 
$
42,975

Less: General partner’s distribution declared (including IDRs)
 
(17,775
)
 
(12,421
)
Limited partner’s distribution declared on common units
 
(39,632
)
 
(33,728
)
Distributions in excess of net income attributable to the partners
 
$
(31,844
)
 
$
(3,174
)


 
 
General Partner (including IDRs)
 
Limited Partners’ Common Units
 
Total
 
 
(In thousands, except per unit data)
Three Months Ended March 31, 2017
 
 
 
 
 
 
Net income attributable to the partners:
 
 
 
 
 
 
Distributions declared
 
$
17,775

 
$
39,632

 
$
57,407

Distributions in excess of net income attributable to the partners
 
(637
)
 
(31,207
)
 
(31,844
)
Net income attributable to the partners
 
$
17,138

 
$
8,425

 
$
25,563

Weighted average limited partners' units outstanding
 
 
 
63,113

 
 
Limited partners' per unit interest in earnings - basic and diluted
 
 
 
$
0.13

 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2016
 
 
 
 
 
 
Net income attributable to the partners:
 
 
 
 
 
 
Distributions declared
 
$
12,421

 
$
33,728

 
$
46,149

Distributions in excess of net income attributable to the partners
 
(63
)
 
(3,111
)
 
(3,174
)
Net income attributable to the partners
 
$
12,358

 
$
30,617

 
$
42,975

Weighted average limited partners' units outstanding
 
 
 
58,657

 
 
Limited partners' per unit interest in earnings - basic and diluted
 
 
 
$
0.52

 
 
Environmental
Environmental
Environmental

We incurred no expenses for the three months ended March 31, 2017 and 2016, for environmental remediation obligations. The accrued environmental liability, net of expected recoveries from indemnifying parties, reflected in our consolidated balance sheets was $6.9 million and $7.1 million at March 31, 2017, and December 31, 2016, respectively, of which $5.1 million and $5.4 million, respectively, were classified as other long-term liabilities. 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. As of March 31, 2017, and December 31, 2016, our consolidated balance sheets included additional accrued environmental liabilities of $0.8 million and $0.9 million, respectively, for HFC indemnified liabilities, and other assets included equal and offsetting balances representing amounts due from HFC related to indemnifications for environmental remediation liabilities.
Contingencies
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.
Segments (Notes)
Segment Reporting Disclosure [Text Block]
Segments

Although financial information is reviewed by our chief operating decision makers from a variety of perspectives, they view the business in two operating segments: pipelines and terminals, and refinery processing units. These operating segments adhere to the accounting polices used for our consolidated financial statements.

The pipelines and terminals segment has been aggregated 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 operating 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 operating segment.
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
 
Revenues:
 
 
 
 
Pipelines and terminals - affiliate
 
$
69,645

 
$
78,339

Pipelines and terminals - third-party
 
16,609

 
19,164

Refinery processing units - affiliate
 
19,380

 
4,507

Total segment revenues
 
$
105,634

 
$
102,010

 
 
 
 
 
Segment operating income:
 
 
 
 
Pipelines and terminals
 
$
46,485

 
$
57,248

Refinery processing units
 
7,883

 
356

Total segment operating income
 
54,368

 
57,604

Unallocated general and administrative expenses
 
(2,634
)
 
(3,091
)
Interest and financing costs, net
 
(25,662
)
 
(10,423
)
Equity in earnings of unconsolidated affiliates
 
1,840

 
2,765

Gain (loss) on sale of assets and other
 
73

 
(8
)
Income before income taxes
 
$
27,985

 
$
46,847

 
 
 
 
 
Capital Expenditures:
 
 
 
 
  Pipelines and terminals
 
$
8,129

 
$
17,873

  Refinery processing units
 
136

 
24,311

Total capital expenditures
 
$
8,265

 
$
42,184


 
 
March 31, 2017
 
December 31, 2016
 
 
(in thousands)
Identifiable assets:
 
 
 
 
  Pipelines and terminals
 
$
1,356,168

 
$
1,369,756

  Refinery processing units
 
341,363

 
342,506

Other
 
172,604

 
171,975

Total identifiable assets
 
$
1,870,135

 
$
1,884,237

Supplemental Guarantor / Non-Guarantor Financial Information
Supplemental Guarantor / Non-Guarantor Financial Information
Supplemental Guarantor/Non-Guarantor Financial Information

Obligations of HEP (“Parent”) under the 6% 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.

In conjunction with the preparation of our Condensed Consolidating Balance Sheet and Statements of Comprehensive Income included below, we identified and corrected the presentation of noncontrolling interests presented in the eliminations column in prior periods to reflect such balances and activity within the respective guarantor and non-guarantor subsidiaries columns.


Condensed Consolidating Balance Sheet
March 31, 2017
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2

 
$
1,278

 
$
5,727

 
$
—

 
$
7,007

Accounts receivable
 
—

 
42,055

 
4,063

 
(373
)
 
45,745

Prepaid and other current assets
 
131

 
2,688

 
351

 
—

 
3,170

Total current assets
 
133

 
46,021

 
10,141

 
(373
)
 
55,922

 
 
 
 
 
 
 
 
 
 
 
Properties and equipment, net
 
—

 
952,758

 
368,223

 
—

 
1,320,981

Investment in subsidiaries

 
786,512

 
279,572

 
—

 
(1,066,084
)
 
—

Transportation agreements, net
 
—

 
65,118

 
—

 
—

 
65,118

Goodwill
 
—

 
256,498

 
—

 
—

 
256,498

Equity method investments
 
—

 
162,319

 
—

 
—

 
162,319

Other assets
 
725

 
8,572

 
—

 
—

 
9,297

Total assets
 
$
787,370

 
$
1,770,858

 
$
378,364

 
$
(1,066,457
)
 
$
1,870,135

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
—

 
$
14,849

 
$
3,464

 
$
(373
)
 
$
17,940

Accrued interest
 
4,000

 
518

 
—

 
—

 
4,518

Deferred revenue
 
—

 
11,732

 
75

 
—

 
11,807

Accrued property taxes
 
—

 
3,538

 
1,869

 
—

 
5,407

Other current liabilities
 
53

 
2,721

 
5

 
—

 
2,779

Total current liabilities
 
4,053

 
33,358

 
5,413

 
(373
)
 
42,451


 
 
 
 
 
 
 
 
 
 
Long-term debt
 
393,505

 
847,060

 
—

 
—

 
1,240,565

Other long-term liabilities
 
286

 
16,047

 
188

 
—

 
16,521

Deferred revenue
 
—

 
46,881

 
—

 
—

 
46,881

Class B unit
 
—

 
41,000

 
—

 
—

 
41,000

Equity - partners
 
389,526

 
786,512

 
279,572

 
(1,066,084
)
 
389,526

Equity - noncontrolling interest
 
—

 
—

 
93,191

 
—

 
93,191

Total liabilities and equity
 
$
787,370

 
$
1,770,858

 
$
378,364

 
$
(1,066,457
)
 
$
1,870,135



Condensed Consolidating Balance Sheet
December 31, 2016
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2

 
$
301

 
$
3,354

 
$
—

 
$
3,657

Accounts receivable
 
—

 
45,056

 
5,554

 
(202
)
 
50,408

Prepaid and other current assets
 
11

 
2,633

 
244

 
—

 
2,888

Total current assets
 
13

 
47,990

 
9,152

 
(202
)
 
56,953

 
 
 
 
 
 
 
 
 
 
 
Properties and equipment, net
 
—

 
957,045

 
371,350

 
—

 
1,328,395

Investment in subsidiaries
 
1,086,008

 
280,671

 
—

 
(1,366,679
)
 
—

Transportation agreements, net
 
—

 
66,856

 
—

 
—

 
66,856

Goodwill
 
—

 
256,498

 
—

 
—

 
256,498

Equity method investments
 
—

 
165,609

 
—

 
—

 
165,609

Other assets
 
725

 
9,201

 
—

 
—

 
9,926

Total assets
 
$
1,086,746

 
$
1,783,870

 
$
380,502

 
$
(1,366,881
)
 
$
1,884,237

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
—

 
$
24,245

 
$
2,899

 
$
(202
)
 
$
26,942

Accrued interest
 
17,300

 
769

 
—

 
—

 
18,069

Deferred revenue
 
—

 
8,797

 
2,305

 
—

 
11,102

Accrued property taxes
 
—

 
4,514

 
883

 
—

 
5,397

Other current liabilities
 
14

 
3,208

 
3

 
—

 
3,225

Total current liabilities
 
17,314

 
41,533

 
6,090

 
(202
)
 
64,735

 
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
690,912

 
553,000

 
—

 
—

 
1,243,912

Other long-term liabilities
 
286

 
15,975

 
184

 
—

 
16,445

Deferred revenue
 
—

 
47,035

 
—

 
—

 
47,035

Class B unit
 
—

 
40,319

 
—

 
—

 
40,319

Equity - partners
 
378,234

 
1,086,008

 
280,671

 
(1,366,679
)
 
378,234

Equity - noncontrolling interest
 
—

 
—

 
93,557

 
—

 
93,557

Total liabilities and equity
 
$
1,086,746

 
$
1,783,870

 
$
380,502

 
$
(1,366,881
)
 
$
1,884,237





Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2017
 
Parent
 
Guarantor Restricted
Subsidiaries
 
Non-Guarantor Non-restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
Affiliates
 
$
—

 
$
80,776

 
$
8,249

 
$
—

 
$
89,025

Third parties
 
—

 
11,003

 
5,606

 
—

 
16,609

 
 
—

 
91,779

 
13,855

 
—

 
105,634

Operating costs and expenses:
 
 
 
 
 
 
 
 
 
 
Operations (exclusive of depreciation and amortization)
 
—

 
29,092

 
3,397

 
—

 
32,489

Depreciation and amortization
 


 
14,853

 
3,924

 
—

 
18,777

General and administrative
 
1,155

 
1,479

 
—

 
—

 
2,634

 
 
1,155

 
45,424

 
7,321

 
—

 
53,900

Operating income (loss)
 
(1,155
)
 
46,355

 
6,534

 
—

 
51,734

 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
 
45,283

 
4,901

 
—

 
(50,184
)
 
—

Equity in earnings of equity method investments
 
—

 
1,840

 
—

 
—

 
1,840

Interest expense
 
(6,340
)
 
(7,199
)
 
—

 
—

 
(13,539
)
Interest income
 
—

 
102

 
—

 
—

 
102

Loss on early extinguishment of debt
 
(12,225
)
 
—

 
—

 
—

 
(12,225
)
Gain on sale of assets and other
 
—

 
72

 
1

 
—

 
73

 
 
26,718

 
(284
)
 
1

 
(50,184
)
 
(23,749
)
Income (loss) before income taxes
 
25,563

 
46,071

 
6,535

 
(50,184
)
 
27,985

State income tax expense
 
—

 
(106
)
 
—

 
—

 
(106
)
Net income
 
25,563

 
45,965

 
6,535

 
(50,184
)
 
27,879

Allocation of net income attributable to noncontrolling interests
 
—

 
(682
)
 
(1,634
)
 
—

 
(2,316
)
Net income attributable to Holly Energy Partners
 
25,563

 
45,283

 
4,901

 
(50,184
)
 
25,563

Other comprehensive income
 
63

 
63

 
—

 
(63
)
 
63

Comprehensive income attributable to Holly Energy Partners
 
$
25,626

 
$
45,346

 
$
4,901

 
$
(50,247
)
 
$
25,626



Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2016
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
Affiliates
 
$
—

 
$
72,252

 
$
10,594

 
$
—

 
$
82,846

Third parties
 
—

 
10,732

 
8,432

 
—

 
19,164

 
 
—

 
82,984

 
19,026

 
—

 
102,010

Operating costs and expenses:
 
 
 
 
 
 
 
 
 
 
Operations (exclusive of depreciation and amortization)
 
—

 
24,824

 
3,031

 
—

 
27,855

Depreciation and amortization
 
—

 
12,793

 
3,758

 
—

 
16,551

General and administrative
 
1,165

 
1,926

 
—

 
—

 
3,091

 
 
1,165

 
39,543

 
6,789

 
—

 
47,497

Operating income (loss)
 
(1,165
)
 
43,441

 
12,237

 
—

 
54,513

 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
 
48,990

 
9,184

 
—

 
(58,174
)
 
—

Equity in earnings of equity method investments
 
—

 
2,765

 
—

 
—

 
2,765

Interest expense
 
(5,067
)
 
(5,468
)
 
—

 
—

 
(10,535
)
Interest income
 
—

 
105

 
7

 
—

 
112

Gain (loss) on sale of assets and other
 
—

 
(9
)
 
1

 
—

 
(8
)
 
 
43,923

 
6,577

 
8

 
(58,174
)
 
(7,666
)
Income before income taxes
 
42,758

 
50,018

 
12,245

 
(58,174
)
 
46,847

State income tax expense
 
—

 
(95
)
 
—

 
—

 
(95
)
Net income
 
42,758

 
49,923

 
12,245

 
(58,174
)
 
46,752

Allocation of net loss to Predecessor
 
—

 
1,150

 
—

 
—

 
1,150

Allocation of net income attributable to noncontrolling interests
 
—

 
(1,866
)
 
(3,061
)
 
—

 
(4,927
)
Net income attributable to Holly Energy Partners
 
42,758

 
49,207

 
9,184

 
(58,174
)
 
42,975

Other comprehensive (loss)
 
(453
)
 
(453
)
 
—

 
453

 
(453
)
Comprehensive income attributable to Holly Energy Partners
 
$
42,305

 
$
48,754

 
$
9,184

 
$
(57,721
)
 
$
42,522


(1) Retrospectively adjusted as described in Note 1.















Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2017
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash flows from operating activities
 
$
(20,297
)
 
$
58,062

 
$
10,736

 
$
(4,901
)
 
$
43,600

 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
Additions to properties and equipment
 
—

 
(7,902
)
 
(363
)
 
—

 
(8,265
)
Distributions from UNEV in excess of earnings
 
—

 
1,099

 
—

 
(1,099
)
 
—

Proceeds from sale of assets
 
—

 
424

 
—

 
—

 
424

Distributions in excess of equity in earnings of equity investments
 
—

 
3,016

 
—

 
—

 
3,016

 
 
—

 
(3,363
)
 
(363
)
 
(1,099
)
 
(4,825
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
Net borrowings under credit agreement
 
—

 
294,000

 
—

 
—

 
294,000

Net intercompany financing activities
 
344,781

 
(344,781
)
 
—

 
—

 
—

Proceeds from issuance of common units
 
39,371

 
(1,808
)
 
—

 
—

 
37,563

Contribution from general partner
 
805

 
(805
)
 
—

 
—

 
—

Redemption of senior notes
 
(309,750
)
 
—

 
—

 
—

 
(309,750
)
Distributions to HEP unitholders
 
(54,807
)
 
2

 
—

 
—

 
(54,805
)
Distribution to HFC for El Dorado tanks
 
(103
)
 
—

 
—

 
—

 
(103
)
Distributions to noncontrolling interests
 
—

 
—

 
(8,000
)
 
6,000

 
(2,000
)
Other
 
—

 
(330
)
 
—

 
—

 
(330
)
 
 
20,297

 
(53,722
)
 
(8,000
)
 
6,000

 
(35,425
)
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
 
 
 
Increase for the period
 
—

 
977

 
2,373

 
—

 
3,350

Beginning of period
 
2

 
301

 
3,354

 
—

 
3,657

End of period
 
$
2

 
$
1,278

 
$
5,727

 
$
—

 
$
7,007



Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2016 (1)
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash flows from operating activities
 
$
(10,084
)
 
$
47,779

 
$
13,424

 
$
(3,750
)
 
$
47,369

 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
Additions to properties and equipment
 
—

 
(7,919
)
 
(9,954
)
 
—

 
(17,873
)
Purchase of Woods Cross refinery processing units
 
—

 
(24,311
)
 
—

 
—

 
(24,311
)
Proceeds from sale of assets
 
—

 
12

 
—

 
—

 
12

Distributions in excess of equity in earnings of equity investments
 
—

 
99

 
—

 
—

 
99

 
 
—

 
(32,119
)
 
(9,954
)
 
—

 
(42,073
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
Net repayments under credit agreement
 
—

 
53,000

 
—

 
—

 
53,000

Net intercompany financing activities
 
53,751

 
(53,751
)
 
—

 
—

 
—

Contributions from general partner for Osage
 
32,455

 
(32,455
)
 
—

 
—

 
—

Distributions to HFC for Tulsa Tank acquisition
 
(30,378
)
 
(9,122
)
 
—

 
—

 
(39,500
)
Distributions to HEP unitholders
 
(44,960
)
 
—

 
—

 
—

 
(44,960
)
Contribution from HFC for acquisitions
 
—

 
25,343

 
—

 
—

 
25,343

Distributions to noncontrolling interests
 
—

 
—

 
(5,000
)
 
3,750

 
(1,250
)
Purchase of units for incentive grants
 
(784
)
 
—

 
—

 
—

 
(784
)
Deferred financing costs
 
—

 
(2,964
)
 
—

 
—

 
(2,964
)
Other
 
—

 
(160
)
 
—

 
—

 
(160
)
 
 
10,084

 
(20,109
)
 
(5,000
)
 
3,750

 
(11,275
)
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
 
 
 
Decrease for the period
 
—

 
(4,449
)
 
(1,530
)
 
—

 
(5,979
)
Beginning of period
 
2

 
5,452

 
9,559

 
—

 
15,013

End of period
 
$
2

 
$
1,003

 
$
8,029

 
$
—

 
$
9,034



(1) Retrospectively adjusted as described in Note 1.
Description of Business and Presentation of Financial Statements Accounting Policy Descriptions (Policies)
Consolidation, Policy [Policy Text Block] 
Principles of Consolidation and Common Control Transactions
The consolidated financial statements include our accounts, our Predecessor's (defined below) 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. U.S. generally accepted accounting principles ("GAAP") require transfers of a business between entities under common control to be accounted for as though the transfer occurred as of the beginning of the period of transfer, and prior period financial statements and financial information are retrospectively adjusted to include the historical results and assets of the acquisitions from HFC for all periods presented prior to the effective dates of each acquisition. We refer to the historical results of the acquisitions prior to their respective acquisition dates as those of our "Predecessor." Many of these transactions are cash purchases and do not involve the issuance of equity; however, GAAP requires the retrospective adjustment of financial statements. Therefore, in such transactions, the prior year balance sheet includes as equity the amount of cost incurred by HFC to that date. See Acquisitions below for further discussion as well as effects of the retrospective adjustments.
New Accounting Pronouncements, Policy [Policy Text Block] 
Accounting Pronouncements Adopted During the Periods Presented

Earnings Per Unit
In April 2015, an accounting standard update was issued requiring changes to the allocation of the earnings or losses of a transferred business for periods before the date of a dropdown of net assets accounted for as a common control transaction entirely to the general partner for purposes of calculating historical earnings per unit. We adopted this standard as of January 1, 2016. In connection with the dropdown of assets from HFC’s Tulsa refinery on March 31, 2016, and the purchase of HFC’s Woods Cross refinery units on October 1, 2016, we reduced net income by $0.2 million and $0.9 million, respectively, for the three months ended March 31, 2016. This reduction had no impact on the historical earnings per limited partner unit.

Share-Based Compensation
In March 2016, an accounting standard update was issued which simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. We adopted this standard effective January 1, 2017, with no impact to our financial condition, results of operations and cash flows. As permitted by the standard, we continue to account for forfeitures on an estimated basis.

Accounting Pronouncements Not Yet Adopted

Revenue Recognition
In May 2014, an accounting standard update was issued requiring revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the expected consideration for these goods or services. This standard has an effective date of January 1, 2018, and we intend to account for the new guidance using the modified retrospective implementation method, whereby a cumulative effect adjustment is recorded to retained earnings as of the date of initial application. Our preparation for adoption of this standard is in progress, and we are currently evaluating terms, conditions and our performance obligations of our existing contracts with customers. We are evaluating the effect of this standard on our revenue recognition policies and whether it will have a material impact on our financial condition or results of operations.

Business Combinations
In December 2014, an accounting standard update was issued to provide new guidance on the definition of a business in relation to accounting for identifiable intangible assets in business combinations. This standard has an effective date of January 1, 2018, and we are evaluating its impact.

Financial Assets and Liabilities
In January 2016, an accounting standard update was issued requiring changes in the accounting and disclosures for financial instruments. This standard will become effective beginning with our 2018 reporting year. We are evaluating the impact of this standard.

Leases
In February 2016, an accounting standard update was issued requiring leases to be measured and recognized as a lease liability, with a corresponding right-of-use asset on the balance sheet. This standard has an effective date of January 1, 2019, and we are evaluating the impact of this standard.
Description of Business and Presentation of Financial Statements Subsequent Event (Tables)
Schedule of Business Acquisitions, by Acquisition [Table Text Block]
The following table presents lines in our previously reported income statement for the three months ended March 31, 2016, that were impacted by Predecessor transactions, and retrospectively adjusts only the acquisition of Woods Cross Operating as the Tulsa Tanks acquisition included Predecessor transactions in the previously reported income statement for the three months ended March 31, 2016. However, the presentation of the Tulsa Tanks’ Predecessor transactions have been modified as shown in the table below.
 
 
Three Months Ended March 31, 2016
 
 
Holly Energy Partners, L.P.(Previously reported)
 
Tulsa Tanks
 
Woods Cross Operating
 
Holly Energy Partners, L.P. (Currently reported)
 
 
(In Thousands)
Operating costs and expenses:
 
 
 
 
 
 
 
 
       Operations (exclusive of depreciation and
       amortization)
 
$
26,922

 
$
—

 
$
933

 
$
27,855

Allocation of net loss attributable to predecessor
 
—

 
217

 
933

 
1,150


The following table presents lines in our previously reported cash flows for the three months ended March 31, 2016, that were impacted by Predecessor transactions, and retrospectively adjusts only the acquisition of Woods Cross Operating as the Tulsa Tanks acquisition included Predecessor transactions in the previously reported cash flows for the three months ended March 31, 2016.
 
 
Three Months Ended March 31, 2016
 
 
Holly Energy Partners, L.P.(Previously reported)
 
Woods Cross Operating
 
Holly Energy Partners, L.P.
(Currently reported)
Cash flows from operating activities
 
(In Thousands)
Net income
 
$
47,685

 
$
(933
)
 
$
46,752

Net cash provided by operating activities
 
$
48,302

 
$
(933
)
 
$
47,369

 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
Additions to properties and equipment
 
$
(17,873
)
 
$
—

 
$
(17,873
)
Acquisition of tanks and operating units
 
—

 
(24,311
)
 
(24,311
)
Net cash used for investing activities
 
$
(17,762
)
 
$
(24,311
)
 
$
(42,073
)
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
Contributions from HFC for acquisitions
 
$
99

 
$
25,244

 
$
25,343

Net cash provided (used) by financing activities
 
$
(36,519
)
 
$
25,244

 
$
(11,275
)

Financial Instruments (Tables)
Schedule of Fair Value, Financial Instruments Measured on Recurring Basis

The carrying amounts and estimated fair values of our senior notes and interest rate swaps were as follows:
 
 
 
 
March 31, 2017
 
December 31, 2016
Financial Instrument
 
Fair Value Input Level
 
Carrying
Value
 
Fair Value
 
Carrying
Value
 
Fair Value
 
 
 
 
(In thousands)
Assets:
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Level 2
 
$
154

 
$
154

 
$
91

 
$
91

 
 
 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
6.5% Senior notes
 
Level 2
 
$
—

 
$
—

 
$
297,519

 
$
308,250

6% Senior notes
 
Level 2
 
393,565

 
422,288

 
393,393

 
415,500

 
 
 
 
$
393,565

 
$
422,288

 
$
690,912

 
$
723,750

Properties and Equipment (Tables)
Properties and Equipment
The carrying amounts of our properties and equipment are as follows:
 
 
March 31,
2017
 
December 31,
2016
 
 
(In thousands)
Pipelines, terminals and tankage
 
$
1,247,967

 
$
1,246,746

Refinery assets
 
347,075

 
346,058

Land and right of way
 
65,331

 
65,331

Construction in progress
 
35,148

 
28,753

Other
 
27,662

 
27,133

 
 
1,723,183

 
1,714,021

Less accumulated depreciation
 
402,202

 
385,626

 
 
$
1,320,981

 
$
1,328,395



Transportation Agreements (Tables)
Schedule of Finite-Lived Intangible Assets by Major Class
The carrying amounts of our transportation agreements are as follows:
 
 
March 31,
2017
 
December 31,
2016
 
 
(In thousands)
Alon transportation agreement
 
$
59,933

 
$
59,933

HFC transportation agreement
 
74,231

 
74,231

Other
 
50

 
50

 
 
134,214

 
134,214

Less accumulated amortization
 
69,096

 
67,358

 
 
$
65,118

 
$
66,856


Employees, Retirement and Incentive Plans (Tables)
Schedule of Nonvested Restricted Stock Units Activity 
A summary of restricted unit activity and changes during the three months ended March 31, 2017, is presented below:
Restricted Units
 
Units
 
Weighted Average Grant-Date Fair Value
Outstanding at January 1, 2017 (nonvested)
 
123,988

 
$
32.96

Granted
 
20,348

 
36.01

Forfeited
 
(17,653
)
 
29.75

Outstanding at March 31, 2017 (nonvested)
 
126,683

 
$
33.90

Schedule of Nonvested Performance-based Units Activity 

A summary of performance unit activity and changes during the three months ended March 31, 2017, is presented below:
Performance Units
 
Units
Outstanding at January 1, 2017 (nonvested)
 
49,520

Vesting and transfer of common units to recipients
 
(2,262
)
Forfeited
 
(21,228
)
Outstanding at March 31, 2017 (nonvested)
 
26,030

Debt (Tables)
Schedule of Long-term Debt Instruments 
The carrying amounts of our long-term debt are as follows:
 
 
March 31,
2017
 
December 31,
2016
 
 
(In thousands)
Credit Agreement
 
 
 
 
Amount outstanding
 
$
847,000

 
$
553,000

 
 
 
 
 
6% Senior Notes
 
 
 
 
Principal
 
400,000

 
400,000

Unamortized debt issuance costs
 
(6,435
)
 
(6,607
)
 
 
393,565

 
393,393

6.5% Senior Notes
 
 
 
 
Principal
 
—

 
300,000

Unamortized discount and debt issuance costs
 
—

 
(2,481
)
 
 
—

 
297,519

 
 
 
 
 
Total long-term debt
 
$
1,240,565

 
$
1,243,912

Schedule of Derivative Instruments 
Additional information on our interest rate swaps is as follows:
Derivative Instrument
 
Balance Sheet Location
 
Fair Value
 
Location of Offsetting Balance
 
Offsetting
Amount
 
 
(In thousands)
March 31, 2017
 
 
 
 
 
 
 
 
Interest rate swaps designated as cash flow hedging instrument:
 
 
 
 
 
 
Variable-to-fixed interest rate swap contracts ($150 million of LIBOR-based debt interest)
 
Other current   assets
 
$
154

 
Accumulated other
    comprehensive income
 
$
154

 
 
 
 
$
154

 
 
 
$
154

 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
Interest rate swaps designated as cash flow hedging instrument:
 
 
 
 
 
 
Variable-to-fixed interest rate swap contract ($150 million of LIBOR-based debt interest)
 
Other current  assets
 
$
91

 
Accumulated other
    comprehensive income
 
$
91

 
 
 
 
$
91

 
 
 
$
91


Schedule of Interest Expense and Other Debt Information 
Interest expense consists of the following components:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
Interest on outstanding debt:
 
 
 
 
Credit Agreement, net of interest on interest rate swaps
 
$
6,449

 
$
5,006

6.5% Senior Notes
 
162

 
4,875

6% Senior Notes
 
6,000

 
—

Amortization of discount and deferred debt issuance costs
 
770

 
593

Commitment fees and other
 
354

 
201

Total interest incurred
 
13,735

 
10,675

Less capitalized interest
 
196

 
140

Net interest expense
 
$
13,539

 
$
10,535

Cash paid for interest
 
$
26,517

 
$
14,841


Significant Customers (Tables)
Schedules of Concentration of Risk, by Risk Factor
The following table presents the percentage of total revenues generated by each of these customers:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
HFC
 
84
%
 
81
%
Alon
 
8
%
 
8
%
Partners' Equity (Tables)
Schedule of Allocation of General Partner Interest in Net Income 
The following table presents the allocation of the general partner interest in net income for the periods presented below: 
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
General partner interest in net income
 
$
511

 
$
630

General partner incentive distribution
 
16,627

 
11,473

Net loss attributable to Predecessor
 
—

 
(1,150
)
Total general partner interest in net income
 
$
17,138

 
$
10,953

For purposes of applying the two-class method including the allocation of cash distributions in excess of earnings, net income per limited partner unit is computed as follows:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
Net income attributable to the partners
 
$
25,563

 
$
42,975

Less: General partner’s distribution declared (including IDRs)
 
(17,775
)
 
(12,421
)
Limited partner’s distribution declared on common units
 
(39,632
)
 
(33,728
)
Distributions in excess of net income attributable to the partners
 
$
(31,844
)
 
$
(3,174
)
Schedule of Distributions Made to Members or Limited Partners 
The following table presents the allocation of our regular quarterly cash distributions to the general and limited partners for the periods in which they apply. Our distributions are declared subsequent to quarter end; therefore, the amounts presented do not reflect distributions paid during the periods presented below.
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands, except per unit data)
General partner interest in distribution
 
$
1,148

 
$
948

General partner incentive distribution
 
16,627

 
11,473

Total general partner distribution
 
17,775

 
12,421

Limited partner distribution
 
39,632

 
33,728

Total regular quarterly cash distribution
 
$
57,407

 
$
46,149

Cash distribution per unit applicable to limited partners
 
$
0.6200

 
$
0.5750

Net Income per Limited Partner Unit (Tables)
Schedule of Allocation of General Partner Interest in Net Income [Table Text Block] 
The following table presents the allocation of the general partner interest in net income for the periods presented below: 
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
General partner interest in net income
 
$
511

 
$
630

General partner incentive distribution
 
16,627

 
11,473

Net loss attributable to Predecessor
 
—

 
(1,150
)
Total general partner interest in net income
 
$
17,138

 
$
10,953

For purposes of applying the two-class method including the allocation of cash distributions in excess of earnings, net income per limited partner unit is computed as follows:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(In thousands)
Net income attributable to the partners
 
$
25,563

 
$
42,975

Less: General partner’s distribution declared (including IDRs)
 
(17,775
)
 
(12,421
)
Limited partner’s distribution declared on common units
 
(39,632
)
 
(33,728
)
Distributions in excess of net income attributable to the partners
 
$
(31,844
)
 
$
(3,174
)
Earnings per Unit by Type of Partner [Table Text Block] 
 
 
General Partner (including IDRs)
 
Limited Partners’ Common Units
 
Total
 
 
(In thousands, except per unit data)
Three Months Ended March 31, 2017
 
 
 
 
 
 
Net income attributable to the partners:
 
 
 
 
 
 
Distributions declared
 
$
17,775

 
$
39,632

 
$
57,407

Distributions in excess of net income attributable to the partners
 
(637
)
 
(31,207
)
 
(31,844
)
Net income attributable to the partners
 
$
17,138

 
$
8,425

 
$
25,563

Weighted average limited partners' units outstanding
 
 
 
63,113

 
 
Limited partners' per unit interest in earnings - basic and diluted
 
 
 
$
0.13

 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2016
 
 
 
 
 
 
Net income attributable to the partners:
 
 
 
 
 
 
Distributions declared
 
$
12,421

 
$
33,728

 
$
46,149

Distributions in excess of net income attributable to the partners
 
(63
)
 
(3,111
)
 
(3,174
)
Net income attributable to the partners
 
$
12,358

 
$
30,617

 
$
42,975

Weighted average limited partners' units outstanding
 
 
 
58,657

 
 
Limited partners' per unit interest in earnings - basic and diluted
 
 
 
$
0.52

 
 
Segments Segment disclosure (Tables)
Segment Reporting Disclosure [Text Block] 
Segments

Although financial information is reviewed by our chief operating decision makers from a variety of perspectives, they view the business in two operating segments: pipelines and terminals, and refinery processing units. These operating segments adhere to the accounting polices used for our consolidated financial statements.

The pipelines and terminals segment has been aggregated 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 operating 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 operating segment.
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
 
Revenues:
 
 
 
 
Pipelines and terminals - affiliate
 
$
69,645

 
$
78,339

Pipelines and terminals - third-party
 
16,609

 
19,164

Refinery processing units - affiliate
 
19,380

 
4,507

Total segment revenues
 
$
105,634

 
$
102,010

 
 
 
 
 
Segment operating income:
 
 
 
 
Pipelines and terminals
 
$
46,485

 
$
57,248

Refinery processing units
 
7,883

 
356

Total segment operating income
 
54,368

 
57,604

Unallocated general and administrative expenses
 
(2,634
)
 
(3,091
)
Interest and financing costs, net
 
(25,662
)
 
(10,423
)
Equity in earnings of unconsolidated affiliates
 
1,840

 
2,765

Gain (loss) on sale of assets and other
 
73

 
(8
)
Income before income taxes
 
$
27,985

 
$
46,847

 
 
 
 
 
Capital Expenditures:
 
 
 
 
  Pipelines and terminals
 
$
8,129

 
$
17,873

  Refinery processing units
 
136

 
24,311

Total capital expenditures
 
$
8,265

 
$
42,184


 
 
March 31, 2017
 
December 31, 2016
 
 
(in thousands)
Identifiable assets:
 
 
 
 
  Pipelines and terminals
 
$
1,356,168

 
$
1,369,756

  Refinery processing units
 
341,363

 
342,506

Other
 
172,604

 
171,975

Total identifiable assets
 
$
1,870,135

 
$
1,884,237

Schedule of Segment Reporting Information, by Segment [Table Text Block] 
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 operating 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 operating segment.
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
 
Revenues:
 
 
 
 
Pipelines and terminals - affiliate
 
$
69,645

 
$
78,339

Pipelines and terminals - third-party
 
16,609

 
19,164

Refinery processing units - affiliate
 
19,380

 
4,507

Total segment revenues
 
$
105,634

 
$
102,010

 
 
 
 
 
Segment operating income:
 
 
 
 
Pipelines and terminals
 
$
46,485

 
$
57,248

Refinery processing units
 
7,883

 
356

Total segment operating income
 
54,368

 
57,604

Unallocated general and administrative expenses
 
(2,634
)
 
(3,091
)
Interest and financing costs, net
 
(25,662
)
 
(10,423
)
Equity in earnings of unconsolidated affiliates
 
1,840

 
2,765

Gain (loss) on sale of assets and other
 
73

 
(8
)
Income before income taxes
 
$
27,985

 
$
46,847

 
 
 
 
 
Capital Expenditures:
 
 
 
 
  Pipelines and terminals
 
$
8,129

 
$
17,873

  Refinery processing units
 
136

 
24,311

Total capital expenditures
 
$
8,265

 
$
42,184


 
 
March 31, 2017
 
December 31, 2016
 
 
(in thousands)
Identifiable assets:
 
 
 
 
  Pipelines and terminals
 
$
1,356,168

 
$
1,369,756

  Refinery processing units
 
341,363

 
342,506

Other
 
172,604

 
171,975

Total identifiable assets
 
$
1,870,135

 
$
1,884,237

Supplemental Guarantor / Non-Guarantor Financial Information (Tables)
Condensed Consolidating Balance Sheet 
Condensed Consolidating Balance Sheet
March 31, 2017
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2

 
$
1,278

 
$
5,727

 
$
—

 
$
7,007

Accounts receivable
 
—

 
42,055

 
4,063

 
(373
)
 
45,745

Prepaid and other current assets
 
131

 
2,688

 
351

 
—

 
3,170

Total current assets
 
133

 
46,021

 
10,141

 
(373
)
 
55,922

 
 
 
 
 
 
 
 
 
 
 
Properties and equipment, net
 
—

 
952,758

 
368,223

 
—

 
1,320,981

Investment in subsidiaries

 
786,512

 
279,572

 
—

 
(1,066,084
)
 
—

Transportation agreements, net
 
—

 
65,118

 
—

 
—

 
65,118

Goodwill
 
—

 
256,498

 
—

 
—

 
256,498

Equity method investments
 
—

 
162,319

 
—

 
—

 
162,319

Other assets
 
725

 
8,572

 
—

 
—

 
9,297

Total assets
 
$
787,370

 
$
1,770,858

 
$
378,364

 
$
(1,066,457
)
 
$
1,870,135

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
—

 
$
14,849

 
$
3,464

 
$
(373
)
 
$
17,940

Accrued interest
 
4,000

 
518

 
—

 
—

 
4,518

Deferred revenue
 
—

 
11,732

 
75

 
—

 
11,807

Accrued property taxes
 
—

 
3,538

 
1,869

 
—

 
5,407

Other current liabilities
 
53

 
2,721

 
5

 
—

 
2,779

Total current liabilities
 
4,053

 
33,358

 
5,413

 
(373
)
 
42,451


 
 
 
 
 
 
 
 
 
 
Long-term debt
 
393,505

 
847,060

 
—

 
—

 
1,240,565

Other long-term liabilities
 
286

 
16,047

 
188

 
—

 
16,521

Deferred revenue
 
—

 
46,881

 
—

 
—

 
46,881

Class B unit
 
—

 
41,000

 
—

 
—

 
41,000

Equity - partners
 
389,526

 
786,512

 
279,572

 
(1,066,084
)
 
389,526

Equity - noncontrolling interest
 
—

 
—

 
93,191

 
—

 
93,191

Total liabilities and equity
 
$
787,370

 
$
1,770,858

 
$
378,364

 
$
(1,066,457
)
 
$
1,870,135



Condensed Consolidating Balance Sheet
December 31, 2016
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2

 
$
301

 
$
3,354

 
$
—

 
$
3,657

Accounts receivable
 
—

 
45,056

 
5,554

 
(202
)
 
50,408

Prepaid and other current assets
 
11

 
2,633

 
244

 
—

 
2,888

Total current assets
 
13

 
47,990

 
9,152

 
(202
)
 
56,953

 
 
 
 
 
 
 
 
 
 
 
Properties and equipment, net
 
—

 
957,045

 
371,350

 
—

 
1,328,395

Investment in subsidiaries
 
1,086,008

 
280,671

 
—

 
(1,366,679
)
 
—

Transportation agreements, net
 
—

 
66,856

 
—

 
—

 
66,856

Goodwill
 
—

 
256,498

 
—

 
—

 
256,498

Equity method investments
 
—

 
165,609

 
—

 
—

 
165,609

Other assets
 
725

 
9,201

 
—

 
—

 
9,926

Total assets
 
$
1,086,746

 
$
1,783,870

 
$
380,502

 
$
(1,366,881
)
 
$
1,884,237

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
—

 
$
24,245

 
$
2,899

 
$
(202
)
 
$
26,942

Accrued interest
 
17,300

 
769

 
—

 
—

 
18,069

Deferred revenue
 
—

 
8,797

 
2,305

 
—

 
11,102

Accrued property taxes
 
—

 
4,514

 
883

 
—

 
5,397

Other current liabilities
 
14

 
3,208

 
3

 
—

 
3,225

Total current liabilities
 
17,314

 
41,533

 
6,090

 
(202
)
 
64,735

 
 
 
 
 
 
 
 
 
 
 
Long-term debt
 
690,912

 
553,000

 
—

 
—

 
1,243,912

Other long-term liabilities
 
286

 
15,975

 
184

 
—

 
16,445

Deferred revenue
 
—

 
47,035

 
—

 
—

 
47,035

Class B unit
 
—

 
40,319

 
—

 
—

 
40,319

Equity - partners
 
378,234

 
1,086,008

 
280,671

 
(1,366,679
)
 
378,234

Equity - noncontrolling interest
 
—

 
—

 
93,557

 
—

 
93,557

Total liabilities and equity
 
$
1,086,746

 
$
1,783,870

 
$
380,502

 
$
(1,366,881
)
 
$
1,884,237



Condensed Consolidating Statement of Comprehensive Income 
Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2017
 
Parent
 
Guarantor Restricted
Subsidiaries
 
Non-Guarantor Non-restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
Affiliates
 
$
—

 
$
80,776

 
$
8,249

 
$
—

 
$
89,025

Third parties
 
—

 
11,003

 
5,606

 
—

 
16,609

 
 
—

 
91,779

 
13,855

 
—

 
105,634

Operating costs and expenses:
 
 
 
 
 
 
 
 
 
 
Operations (exclusive of depreciation and amortization)
 
—

 
29,092

 
3,397

 
—

 
32,489

Depreciation and amortization
 


 
14,853

 
3,924

 
—

 
18,777

General and administrative
 
1,155

 
1,479

 
—

 
—

 
2,634

 
 
1,155

 
45,424

 
7,321

 
—

 
53,900

Operating income (loss)
 
(1,155
)
 
46,355

 
6,534

 
—

 
51,734

 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
 
45,283

 
4,901

 
—

 
(50,184
)
 
—

Equity in earnings of equity method investments
 
—

 
1,840

 
—

 
—

 
1,840

Interest expense
 
(6,340
)
 
(7,199
)
 
—

 
—

 
(13,539
)
Interest income
 
—

 
102

 
—

 
—

 
102

Loss on early extinguishment of debt
 
(12,225
)
 
—

 
—

 
—

 
(12,225
)
Gain on sale of assets and other
 
—

 
72

 
1

 
—

 
73

 
 
26,718

 
(284
)
 
1

 
(50,184
)
 
(23,749
)
Income (loss) before income taxes
 
25,563

 
46,071

 
6,535

 
(50,184
)
 
27,985

State income tax expense
 
—

 
(106
)
 
—

 
—

 
(106
)
Net income
 
25,563

 
45,965

 
6,535

 
(50,184
)
 
27,879

Allocation of net income attributable to noncontrolling interests
 
—

 
(682
)
 
(1,634
)
 
—

 
(2,316
)
Net income attributable to Holly Energy Partners
 
25,563

 
45,283

 
4,901

 
(50,184
)
 
25,563

Other comprehensive income
 
63

 
63

 
—

 
(63
)
 
63

Comprehensive income attributable to Holly Energy Partners
 
$
25,626

 
$
45,346

 
$
4,901

 
$
(50,247
)
 
$
25,626



Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2016
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
Affiliates
 
$
—

 
$
72,252

 
$
10,594

 
$
—

 
$
82,846

Third parties
 
—

 
10,732

 
8,432

 
—

 
19,164

 
 
—

 
82,984

 
19,026

 
—

 
102,010

Operating costs and expenses:
 
 
 
 
 
 
 
 
 
 
Operations (exclusive of depreciation and amortization)
 
—

 
24,824

 
3,031

 
—

 
27,855

Depreciation and amortization
 
—

 
12,793

 
3,758

 
—

 
16,551

General and administrative
 
1,165

 
1,926

 
—

 
—

 
3,091

 
 
1,165

 
39,543

 
6,789

 
—

 
47,497

Operating income (loss)
 
(1,165
)
 
43,441

 
12,237

 
—

 
54,513

 
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
Equity in earnings of subsidiaries
 
48,990

 
9,184

 
—

 
(58,174
)
 
—

Equity in earnings of equity method investments
 
—

 
2,765

 
—

 
—

 
2,765

Interest expense
 
(5,067
)
 
(5,468
)
 
—

 
—

 
(10,535
)
Interest income
 
—

 
105

 
7

 
—

 
112

Gain (loss) on sale of assets and other
 
—

 
(9
)
 
1

 
—

 
(8
)
 
 
43,923

 
6,577

 
8

 
(58,174
)
 
(7,666
)
Income before income taxes
 
42,758

 
50,018

 
12,245

 
(58,174
)
 
46,847

State income tax expense
 
—

 
(95
)
 
—

 
—

 
(95
)
Net income
 
42,758

 
49,923

 
12,245

 
(58,174
)
 
46,752

Allocation of net loss to Predecessor
 
—

 
1,150

 
—

 
—

 
1,150

Allocation of net income attributable to noncontrolling interests
 
—

 
(1,866
)
 
(3,061
)
 
—

 
(4,927
)
Net income attributable to Holly Energy Partners
 
42,758

 
49,207

 
9,184

 
(58,174
)
 
42,975

Other comprehensive (loss)
 
(453
)
 
(453
)
 
—

 
453

 
(453
)
Comprehensive income attributable to Holly Energy Partners
 
$
42,305

 
$
48,754

 
$
9,184

 
$
(57,721
)
 
$
42,522


(1) Retrospectively adjusted as described in Note 1.


Condensed Consolidating Statement of Cash Flows 
Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2017
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash flows from operating activities
 
$
(20,297
)
 
$
58,062

 
$
10,736

 
$
(4,901
)
 
$
43,600

 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
Additions to properties and equipment
 
—

 
(7,902
)
 
(363
)
 
—

 
(8,265
)
Distributions from UNEV in excess of earnings
 
—

 
1,099

 
—

 
(1,099
)
 
—

Proceeds from sale of assets
 
—

 
424

 
—

 
—

 
424

Distributions in excess of equity in earnings of equity investments
 
—

 
3,016

 
—

 
—

 
3,016

 
 
—

 
(3,363
)
 
(363
)
 
(1,099
)
 
(4,825
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
Net borrowings under credit agreement
 
—

 
294,000

 
—

 
—

 
294,000

Net intercompany financing activities
 
344,781

 
(344,781
)
 
—

 
—

 
—

Proceeds from issuance of common units
 
39,371

 
(1,808
)
 
—

 
—

 
37,563

Contribution from general partner
 
805

 
(805
)
 
—

 
—

 
—

Redemption of senior notes
 
(309,750
)
 
—

 
—

 
—

 
(309,750
)
Distributions to HEP unitholders
 
(54,807
)
 
2

 
—

 
—

 
(54,805
)
Distribution to HFC for El Dorado tanks
 
(103
)
 
—

 
—

 
—

 
(103
)
Distributions to noncontrolling interests
 
—

 
—

 
(8,000
)
 
6,000

 
(2,000
)
Other
 
—

 
(330
)
 
—

 
—

 
(330
)
 
 
20,297

 
(53,722
)
 
(8,000
)
 
6,000

 
(35,425
)
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
 
 
 
Increase for the period
 
—

 
977

 
2,373

 
—

 
3,350

Beginning of period
 
2

 
301

 
3,354

 
—

 
3,657

End of period
 
$
2

 
$
1,278

 
$
5,727

 
$
—

 
$
7,007



Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2016 (1)
 
Parent
 
Guarantor
Restricted Subsidiaries
 
Non-Guarantor Non-Restricted Subsidiaries
 
Eliminations
 
Consolidated
 
 
(In thousands)
Cash flows from operating activities
 
$
(10,084
)
 
$
47,779

 
$
13,424

 
$
(3,750
)
 
$
47,369

 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
Additions to properties and equipment
 
—

 
(7,919
)
 
(9,954
)
 
—

 
(17,873
)
Purchase of Woods Cross refinery processing units
 
—

 
(24,311
)
 
—

 
—

 
(24,311
)
Proceeds from sale of assets
 
—

 
12

 
—

 
—

 
12

Distributions in excess of equity in earnings of equity investments
 
—

 
99

 
—

 
—

 
99

 
 
—

 
(32,119
)
 
(9,954
)
 
—

 
(42,073
)
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
Net repayments under credit agreement
 
—

 
53,000

 
—

 
—

 
53,000

Net intercompany financing activities
 
53,751

 
(53,751
)
 
—

 
—

 
—

Contributions from general partner for Osage
 
32,455

 
(32,455
)
 
—

 
—

 
—

Distributions to HFC for Tulsa Tank acquisition
 
(30,378
)
 
(9,122
)
 
—

 
—

 
(39,500
)
Distributions to HEP unitholders
 
(44,960
)
 
—

 
—

 
—

 
(44,960
)
Contribution from HFC for acquisitions
 
—

 
25,343

 
—

 
—

 
25,343

Distributions to noncontrolling interests
 
—

 
—

 
(5,000
)
 
3,750

 
(1,250
)
Purchase of units for incentive grants
 
(784
)
 
—

 
—

 
—

 
(784
)
Deferred financing costs
 
—

 
(2,964
)
 
—

 
—

 
(2,964
)
Other
 
—

 
(160
)
 
—

 
—

 
(160
)
 
 
10,084

 
(20,109
)
 
(5,000
)
 
3,750

 
(11,275
)
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
 
 
 
Decrease for the period
 
—

 
(4,449
)
 
(1,530
)
 
—

 
(5,979
)
Beginning of period
 
2

 
5,452

 
9,559

 
—

 
15,013

End of period
 
$
2

 
$
1,003

 
$
8,029

 
$
—

 
$
9,034



(1) Retrospectively adjusted as described in Note 1.
Description of Business and Presentation of Financial Statements (Details) (USD $)
3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2016
Mar. 31, 2017
SLC Pipeline [Member]
Mar. 31, 2017
UNEV Pipeline [Member]
Mar. 31, 2017
Frontier Pipeline [Member]
Mar. 31, 2016
Osage Pipeline [Member] [Member]
mi
Mar. 31, 2017
Osage Pipeline [Member] [Member]
Jun. 30, 2016
Cheyenne [Member]
bbl
mi
Mar. 31, 2017
Cheyenne [Member]
Mar. 31, 2016
Tulsa Tanks [Member]
Mar. 31, 2016
Woods Cross [Member]
Mar. 31, 2016
Scenario, Previously Reported [Member]
Other Ownership Interests [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership percentage, controlling interest
36.00% 
 
 
 
 
 
 
 
 
 
 
 
 
General partner interest
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Equity Method Investment, Ownership Percentage
 
 
 
25.00% 
75.00% 
50.00% 
50.00% 
50.00% 
50.00% 
50.00% 
 
 
 
Business Combination, Consideration Transferred
 
 
 
 
 
 
$ 44,500,000 
 
 
 
 
 
 
Equity Method Investment, Underlying Equity in Net Assets
 
 
 
 
 
 
12,100,000 
 
 
 
 
 
 
Tulsa tanks, Plains acquisition
8,265,000 
 
42,184,000 
 
 
 
 
 
 
 
39,500,000 
 
 
Payments to Acquire Equity Method Investments
 
 
 
 
 
 
 
 
(42,600,000)
 
 
 
 
Length of Pipeline
 
 
 
 
 
 
135 
 
87 
 
 
 
 
Production barrel capacity per day
 
 
 
 
 
 
 
 
80,000 
 
 
 
 
Additions to Properties and Equipment
103,000 
278,000,000 
0 
 
 
 
 
 
 
 
 
 
 
Proceeds from Issuance of Private Placement
 
103,000,000 
 
 
 
 
 
 
 
 
 
 
 
Common Unit, Authorized
 
3,420,000 
 
 
 
 
 
 
 
 
 
 
 
Duration of Sales Commitment - Years
 
0 
 
 
 
 
20 
 
 
 
 
 
 
Purchase Obligation Minimum Annualized Payment
 
56,700,000 
 
 
 
 
 
 
 
 
 
 
 
Operations (exclusive of depreciation and amortization)
32,489,000 
 
27,855,000 1
 
 
 
 
 
 
 
0 1
933,000 1
26,922,000 1
Net (Income) Loss Attributable to Predecessor
0 
 
1,150,000 1
 
 
 
 
 
 
 
217,000 1
933,000 1
0 1
Net income
27,879,000 
 
46,752,000 1
 
 
 
 
 
 
 
 
(933,000)1
47,685,000 1
Net cash provided by operating activities
43,600,000 
 
47,369,000 
 
 
 
 
 
 
 
 
(933,000)
48,302,000 
Additions to Properties and Equipment
(8,265,000)
 
(17,873,000)1
 
 
 
 
 
 
 
 
0 
(17,873,000)
Payments to Acquire Other Property, Plant, and Equipment
0 
 
(24,311,000)
 
 
 
 
 
 
 
 
(24,311,000)
0 
Net cash used for investing activities
(4,825,000)
 
(42,073,000)
 
 
 
 
 
 
 
 
(24,311,000)
(17,762,000)
Contributions from HFC for acquisitions
0 
 
25,343,000 1
 
 
 
 
 
 
 
 
25,244,000 1
99,000 1
Net cash used for financing activities
(35,425,000)
 
(11,275,000)
 
 
 
 
 
 
 
 
25,244,000 
(36,519,000)
Business Acquisition, Pro Forma Net Income (Loss)
 
 
 
 
 
 
 
 
 
 
$ 200,000 
$ 900,000 
 
Financial Instruments (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Reported Value Measurement [Member]
 
 
Debt Instrument [Line Items]
 
 
Financial Liabilities Fair Value Disclosure
$ 393,565 
$ 690,912 
Reported Value Measurement [Member] |
Interest Rate Swap [Member]
 
 
Debt Instrument [Line Items]
 
 
Assets, Fair Value Disclosure
154 
91 
Reported Value Measurement [Member] |
6.5% Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Financial Liabilities Fair Value Disclosure
0 
297,519 
Reported Value Measurement [Member] |
Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]
 
 
Debt Instrument [Line Items]
 
 
Financial Liabilities Fair Value Disclosure
 
393,393 
Estimate of Fair Value Measurement [Member] |
Fair value inputs, Level 2 [Member]
 
 
Debt Instrument [Line Items]
 
 
Financial Liabilities Fair Value Disclosure
422,288 
723,750 
Estimate of Fair Value Measurement [Member] |
Interest Rate Swap [Member] |
Fair value inputs, Level 2 [Member]
 
 
Debt Instrument [Line Items]
 
 
Assets, Fair Value Disclosure
154 
91 
Estimate of Fair Value Measurement [Member] |
6.5% Senior Notes [Member] |
Fair value inputs, Level 2 [Member]
 
 
Debt Instrument [Line Items]
 
 
Financial Liabilities Fair Value Disclosure
0 
308,250 
Estimate of Fair Value Measurement [Member] |
Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member] |
Fair value inputs, Level 2 [Member]
 
 
Debt Instrument [Line Items]
 
 
Financial Liabilities Fair Value Disclosure
$ 422,288 
$ 415,500 
Properties and Equipment (Details) (USD $)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
 
Properties and equipment, gross
$ 1,723,183,000 
 
$ 1,714,021,000 
Less accumulated depreciation
402,202,000 
 
385,626,000 
Properties and equipment, net
1,320,981,000 
 
1,328,395,000 1
Interest costs, capitalized during period
(196,000)
(140,000)
 
Depreciation expense
16,900,000 
14,700,000 
 
Pipelines and terminals [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Properties and equipment, gross
1,247,967,000 
 
1,246,746,000 
Refinery assets [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Properties and equipment, gross
347,075,000 
 
346,058,000 
Land and right of way [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Properties and equipment, gross
65,331,000 
 
65,331,000 
Construction in progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Properties and equipment, gross
35,148,000 
 
28,753,000 
Other Fixed Assets [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Properties and equipment, gross
$ 27,662,000 
 
$ 27,133,000 
Transportation Agreements (Details) (USD $)
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
Amortization of Transportation Agreements
$ 1,700,000 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Transportation agreements, gross
134,214,000 
134,214,000 
Less accumulated amortization
69,096,000 
67,358,000 
Transportation agreements, net
65,118,000 
66,856,000 
Alon transportation agreement
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Useful Life (years)
30 years 
 
Finite-Lived Intangible Assets, Useful Life, Initial Term (years)
15 
 
Finite-Lived Intangible Assets, Useful Life, Extension Period (years)
15 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Transportation agreements, gross
59,933,000 
59,933,000 
HFC transportation agreement
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Useful Life (years)
15 years 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Transportation agreements, gross
74,231,000 
74,231,000 
Other [Member]
 
 
Finite-Lived Intangible Assets, Net [Abstract]
 
 
Transportation agreements, gross
$ 50,000 
$ 50,000 
Employees, Retirement and Incentive Plans Retirement and Benefit Plan Costs (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Components
Mar. 31, 2016
Share-based Compensation Arrangements
 
 
Employee benefits and share-based compensation
$ 1.7 
$ 1.6 
Long-term Incentive Plan, Components
4 
 
Compensation costs of incentive awards
$ 0.3 
$ 0.7 
Deferred Bonus [Member]
 
 
Share-based Compensation Arrangements
 
 
Units authorized under equity-based compensation plans (new)
2,500,000 
 
Number of units available for grant
1,409,261 
 
Employees, Retirement and Incentive Plans Restricted Units (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Restricted Stock Units (RSUs) [Member]
 
 
Share-based Compensation Arrangements
 
 
Nonvested restricted units outstanding
126,683 
123,988 
Weighted average grant date fair value
$ 33.90 
$ 32.96 
Forfeited
(17,653)
 
Granted
20,348 
 
Granted Weighted Average Grant Date Fair Value
$ 36.01 
 
Forfeited
$ 29.75 
 
Total unrecognized compensation related to nonvested units
$ 2.0 
 
Weighted average remaining contractual term (years)
1 year 2 months 
 
Performance Shares [Member]
 
 
Share-based Compensation Arrangements
 
 
Nonvested restricted units outstanding
26,030 
49,520 
Forfeited
(21,228)
 
Total unrecognized compensation related to nonvested units
$ 0.6 
 
Weighted average remaining contractual term (years)
2 years 0 months 
 
Minimum [Member] |
Restricted Stock [Member]
 
 
Share-based Compensation Arrangements
 
 
Award Vesting Period
1 year 
 
Maximum [Member] |
Restricted Stock [Member]
 
 
Share-based Compensation Arrangements
 
 
Award Vesting Period
3 years 
 
Employees, Retirement and Incentive Plans Performance Units (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Share-based Compensation Arrangement Instruments [Roll Forward]
 
Weighted Average Fair Value of Units Outstanding
$ 0.9 
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, 2017 (nonvested)
49,520 
Vesting and transfer of common units to recipients
(2,262)
Forfeited
(21,228)
Outstanding at March 31, 2017 (nonvested)
26,030 
Fair value of vested units transferred to recipients
0.1 
Total unrecognized compensation related to nonvested units
0.6 
Weighted average remaining contractual term (years)
2 years 0 months 
Restricted Stock Units (RSUs) [Member]
 
Share-based Compensation Arrangement Instruments [Roll Forward]
 
Outstanding at January 1, 2017 (nonvested)
123,988 
Granted
20,348 
Forfeited
(17,653)
Outstanding at March 31, 2017 (nonvested)
126,683 
Total unrecognized compensation related to nonvested units
$ 2.0 
Weighted average remaining contractual term (years)
1 year 2 months 
Executive Officer [Member] |
Performance Shares [Member]
 
Share-based Compensation Arrangements
 
Estimated Share Payouts Unit Awards Minimum
50.00% 
Estimated Share Payouts Unit Awards Maximum
150.00% 
Debt Senior Notes (Details) (USD $)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
6.5% Senior Notes [Member]
Dec. 31, 2016
6.5% Senior Notes [Member]
Mar. 31, 2017
Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]
Dec. 31, 2016
Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]
Mar. 31, 2017
Letter of Credit [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 1,200,000,000 
 
 
 
 
 
$ 50,000,000 
Line of Credit Facility, Expiration Date
Nov. 01, 2018 
 
 
 
 
 
 
Principal
 
 
0 
300,000,000 
400,000,000 
400,000,000 
 
Stated interest rate, senior notes
 
 
6.50% 
 
6.00% 
 
 
Senior Notes Aggregate Redemption Amount
 
 
309,800,000 
 
 
 
 
Loss on early extinguishment of debt
(12,225,000)
0 
12,200,000 
 
 
 
 
Debt Instrument, Unamortized Premium
 
 
9,800,000 
 
 
 
 
Debt Instrument, Unamortized Discount
 
 
$ 2,400,000 
 
 
 
 
Debt Long-Term Debt (Details) (USD $)
Mar. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 1,200,000,000 
 
Credit Agreement
847,000,000 
553,000,000 
Total long-term debt
1,240,565,000 
1,243,912,000 
Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal
400,000,000 
400,000,000 
Unamortized discount
(6,435,000)
(6,607,000)
Senior Notes
393,565,000 
393,393,000 
6.5% Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal
0 
300,000,000 
Unamortized discount
0 
(2,481,000)
Senior Notes
0 
297,519,000 
Credit Agreement [Member]
 
 
Debt Instrument [Line Items]
 
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 50,000,000 
 
Debt Interest Rate Risk Management (Details) (USD $)
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Line of credit facility, amount outstanding
$ 847,000,000 
$ 553,000,000 
Accumulated Other Comprehensive Income (Loss), Net of Tax
154,000 
91,000 
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months
200,000 
 
Interest Rate Swap [Member] |
Cash Flow Hedging [Member]
 
 
Debt Instrument [Line Items]
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
200,000 
 
Interest Rate Swap [Member] |
Cash Flow Hedging, Added 2012 [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term debt, fixed interest rate
0.74% 
 
Debt instrument, basis spread on variable rate
2.25% 
 
Debt instrument, effective interest rate
2.99% 
 
London Interbank Offered Rate (LIBOR) [Member] |
Interest Rate Swap [Member] |
Cash Flow Hedging [Member]
 
 
Debt Instrument [Line Items]
 
 
Line of credit facility, amount outstanding
150,000,000 
0 
London Interbank Offered Rate (LIBOR) [Member] |
Interest Rate Swap [Member] |
Cash Flow Hedging, Added 2012 [Member]
 
 
Debt Instrument [Line Items]
 
 
Line of credit facility, amount outstanding
150,000,000 
 
London Interbank Offered Rate (LIBOR) [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Interest Rate Swap [Member] |
Cash Flow Hedging [Member]
 
 
Debt Instrument [Line Items]
 
 
Derivative Instruments and Hedges, Assets
154,000 
91,000 
Derivative Asset
154,000 
91,000 
London Interbank Offered Rate (LIBOR) [Member] |
Other Current Assets [Member] |
Interest Rate Swap [Member] |
Cash Flow Hedging [Member]
 
 
Debt Instrument [Line Items]
 
 
Derivative Instruments and Hedges, Assets
154,000 
91,000 
Derivative Asset
$ 154,000 
$ 91,000 
Debt Interest Expense and Other Debt Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Debt Instrument [Line Items]
 
 
Interest expense, debt
$ 13,735 
$ 10,675 
Less capitalized interest
196 
140 
Interest expense
13,539 
10,535 1
Cash paid for interest
26,517 
14,841 
Revolving Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest expense, debt
6,449 
5,006 
Senior Notes [Member] |
6.5% Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest expense, debt
162 
4,875 
Senior Notes [Member] |
Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest expense, debt
6,000 
0 
Amortization discount and deferred debt issuance costs [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest expense, debt
770 
593 
Commitment Fees and Other [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest expense, debt
$ 354 
$ 201 
Debt Debt Capital Leases (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2017
Minimum [Member]
Mar. 31, 2017
Maximum [Member]
Capital Leased Assets [Line Items]
 
 
 
 
Capital Leases, Term of Contract
 
 
33 months 
48 months 
Capital Leased Assets, Gross
$ 5.3 
$ 4.9 
 
 
Capital Leases Accumulated Depreciation
$ 2.9 
$ 2.4 
 
 
Significant Customers (Details) (Sales Revenue, Net [Member])
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Revenue, Major Customer [Line Items]
 
 
Concentration risk, percentage of total sales
91.80% 
 
Concentration risk, number of significant customers
2 
 
HFC [Member]
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration risk, percentage of total sales
84.00% 
81.00% 
Alon [Member]
 
 
Revenue, Major Customer [Line Items]
 
 
Concentration risk, percentage of total sales
8.00% 
8.00% 
Related Party Transactions (Narrative) (Details) (USD $)
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2016
Related Party Transaction [Line Items]
 
 
 
Administrative Fee, Related Party
$ 2,500,000 
 
 
Revenue from related parties
89,025,000 
 
82,800,000 
Omnibus Agreement G & A Expenses, Related Party
600,000 
 
 
Employee expenses reimbursed to related party
11,400,000 
 
9,800,000 
Reimbursements received from related parties
1,300,000 
 
1,800,000 
Accounts receivable due from HFC
35,600,000 
42,600,000 
 
Accounts payable to HFC
6,500,000 
16,424,000 
 
Affiliated Entity [Member]
 
 
 
Related Party Transaction [Line Items]
 
 
 
Other Commitments, Future Minimum Payments, Remainder of Fiscal Year
321,000,000 
 
 
Distributions to HEP unitholders
30,300,000 
 
24,500,000 
Shortfall Payments [Member]
 
 
 
Related Party Transaction [Line Items]
 
 
 
Shortfall Payments, Revenue Recognized
2,100,000 
 
5,200,000 
Shortfall Billings Deferred Revenue
$ 5,800,000 
$ 5,600,000 
 
Partners' Equity, Issuances (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 11 Months Ended
Mar. 31, 2017
Mar. 31, 2017
Capital Unit [Line Items]
 
 
Common Unit, Issued
1,142,358 
1,142,358 
General Partners' Contributed Capital
$ 0.8 
$ 0.8 
Partners' Capital Account, Units, Sale of Units
 
1,845,813 
Common units held by HFC
22,380,030 
22,380,030 
General partner ownership interest
2.00% 
 
Ownership percentage, controlling interest
36.00% 
36.00% 
Common Unit Issuance Program
200 
 
Gross Proceeds from Issuance of Common Units
40.3 
63.8 
Fees and Commissions
$ 0.8 
 
Partners' Equity, Allocations of Net Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Partners' Capital [Abstract]
 
 
General Partner Interest in Net Income
$ 511 
$ 630 
General partner incentive distribution
16,627 
11,473 
Net (Income) Loss Attributable to Predecessor
0 
(1,150)1
Net income (Loss) Allocated to Partners After Predecessor Portion
(17,138)
(10,953)
General partner interest in net income attributable to HEP
$ 17,138 
$ 12,103 1
Partners' Equity, Cash Distributions (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Partners' Capital [Abstract]
 
 
Dividends Payable, Date Declared
Apr. 27, 2017 
 
Dividends Payable, Date of Record
May 08, 2017 
 
Dividends Payable, Date to be Paid
May 15, 2017 
 
Allocations of Quarterly Cash Distributions to General and Limited Partners
 
 
Partners' Capital, Distribution Amount Per Share
$ 0.620 
 
Partner Distributions
 
 
General partner interest
$ 1,148 
$ 948 
General partner incentive distribution
16,627 
11,473 
Total general partner distribution
17,775 
12,421 
Limited partner distribution
39,632 
33,728 
Total regular quarterly cash distributions
$ 57,407 
$ 46,149 
Cash distribution per unit applicable to limited partners
$ 0.6200 
$ 0.5750 
Net Income per Limited Partner Unit (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Earnings per Unit by Type of Partner [Line Items]
 
 
Net Income Attributable to Parent
$ 25,563 
$ 42,975 1
Net (Income) Loss Attributable to Predecessor
0 
1,150 1
Net Income Attributable to Partnership
25,563 
42,975 
General Partners' Distribution Declared
17,775 
12,421 
Limited partner distribution declared
39,632 
33,728 
Distributions Declared
57,407 
46,149 
Distributions in Excess of Net Income Attributable to Partnership
(31,844)
(3,174)
Weighted average limited partners’ units outstanding
63,113 
58,657 1
Limited partners’ per unit interest in earnings—basic and diluted:
$ 0.13 
$ 0.52 1
General Partner [Member]
 
 
Earnings per Unit by Type of Partner [Line Items]
 
 
Net Income Attributable to Partnership
17,138 
12,358 
Distributions in Excess of Net Income Attributable to Partnership
(637)
(63)
Limited Partner [Member]
 
 
Earnings per Unit by Type of Partner [Line Items]
 
 
Net Income Attributable to Partnership
8,425 
30,617 
Distributions in Excess of Net Income Attributable to Partnership
$ (31,207)
$ (3,111)
Environmental Environmental (Details) (USD $)
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Loss Contingencies [Line Items]
 
 
Environmental Remediation Expense
$ 0 
 
Accrued Environmental Expense
6,900,000 
7,100,000 
Accrued Environmental Expense, Noncurrent
5,100,000 
5,400,000 
Affiliated Entity [Member]
 
 
Loss Contingencies [Line Items]
 
 
Accrued Environmental Expense
$ 800,000 
$ 900,000 
Segments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Segment Reporting Information [Line Items]
 
 
 
Revenue, Net
$ 105,634 
$ 102,010 1
 
Assets
1,870,135 
 
1,884,237 1
Operating Income (Loss)
51,734 
54,513 1
 
Segment operating profit
54,368 
57,604 
 
Unallocated general and administrative
(2,634)
(3,091)1
 
Interest and financing costs, net
(25,662)
(10,423)
 
Equity in earnings of equity method investments
1,840 
2,765 1
 
Gain on sale of assets and other
73 
(8)
 
Income before income taxes
27,985 
46,847 1
 
Property, Plant and Equipment, Additions
8,265 
42,184 
 
Affiliated Entity [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Revenue, Net
69,645 
78,339 
 
Pipelines [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Revenue, Net
16,609 
19,164 
 
Assets
1,356,168 
 
1,369,756 
Operating Income (Loss)
46,485 
57,248 
 
Property, Plant and Equipment, Additions
8,129 
17,873 
 
2911 Petroleum Refining [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Revenue, Net
19,380 
4,507 
 
Assets
341,363 
 
342,506 
Operating Income (Loss)
7,883 
356 
 
Property, Plant and Equipment, Additions
136 
24,311 
 
Other [Member]
 
 
 
Segment Reporting Information [Line Items]
 
 
 
Assets
$ 172,604 
 
$ 171,975 
Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidated Balance Sheet (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2016
Dec. 31, 2015
Current assets:
 
 
 
 
Cash and cash equivalents
$ 7,007 
$ 3,657 
$ 9,034 
$ 15,013 
Accounts receivable
45,745 
50,408 
 
 
Prepaid and other current assets
3,170 
2,888 
 
 
Total current assets
55,922 
56,953 
 
 
Properties and equipment, net
1,320,981 
1,328,395 1
 
 
Investment in subsidiaries
0 
0 
 
 
Transportation agreements, net
65,118 
66,856 
 
 
Goodwill
256,498 
256,498 
 
 
Equity method investments
162,319 
165,609 
 
 
Other assets
9,297 
9,926 
 
 
Assets
1,870,135 
1,884,237 1
 
 
Current liabilities:
 
 
 
 
Accounts payable
17,940 
26,942 
 
 
Accrued interest
4,518 
18,069 
 
 
Deferred revenue
11,807 
11,102 
 
 
Accrued property taxes
5,407 
5,397 
 
 
Other current liabilities
2,779 
3,225 
 
 
Total current liabilities
42,451 
64,735 
 
 
Long-term debt
1,240,565 
1,243,912 
 
 
Other long-term liabilities
16,521 
16,445 
 
 
Deferred revenue
46,881 
47,035 
 
 
Class B unit
41,000 
40,319 
 
 
Equity - partners
389,526 
378,234 1
 
 
Equity - noncontrolling interest
93,191 
93,557 
 
 
Total liabilities and equity
1,870,135 
1,884,237 1
 
 
Parent Company [Member]
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
2 
2 
2 
2 
Accounts receivable
0 
0 
 
 
Prepaid and other current assets
131 
11 
 
 
Total current assets
133 
13 
 
 
Properties and equipment, net
0 
0 
 
 
Investment in subsidiaries
786,512 
1,086,008 
 
 
Transportation agreements, net
0 
0 
 
 
Goodwill
0 
0 
 
 
Equity method investments
0 
0 
 
 
Other assets
725 
725 
 
 
Assets
787,370 
1,086,746 
 
 
Current liabilities:
 
 
 
 
Accounts payable
0 
0 
 
 
Accrued interest
4,000 
17,300 
 
 
Deferred revenue
0 
0 
 
 
Accrued property taxes
0 
0 
 
 
Other current liabilities
53 
14 
 
 
Total current liabilities
4,053 
17,314 
 
 
Long-term debt
393,505 
690,912 
 
 
Other long-term liabilities
286 
286 
 
 
Deferred revenue
0 
0 
 
 
Class B unit
0 
0 
 
 
Equity - partners
389,526 
378,234 
 
 
Equity - noncontrolling interest
0 
0 
 
 
Total liabilities and equity
787,370 
1,086,746 
 
 
Guarantor Subsidiaries [Member]
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
1,278 
301 
1,003 
5,452 
Accounts receivable
42,055 
45,056 
 
 
Prepaid and other current assets
2,688 
2,633 
 
 
Total current assets
46,021 
47,990 
 
 
Properties and equipment, net
952,758 
957,045 
 
 
Investment in subsidiaries
279,572 
280,671 
 
 
Transportation agreements, net
65,118 
66,856 
 
 
Goodwill
256,498 
256,498 
 
 
Equity method investments
162,319 
165,609 
 
 
Other assets
8,572 
9,201 
 
 
Assets
1,770,858 
1,783,870 
 
 
Current liabilities:
 
 
 
 
Accounts payable
14,849 
24,245 
 
 
Accrued interest
518 
769 
 
 
Deferred revenue
11,732 
8,797 
 
 
Accrued property taxes
3,538 
4,514 
 
 
Other current liabilities
2,721 
3,208 
 
 
Total current liabilities
33,358 
41,533 
 
 
Long-term debt
847,060 
553,000 
 
 
Other long-term liabilities
16,047 
15,975 
 
 
Deferred revenue
46,881 
47,035 
 
 
Class B unit
41,000 
40,319 
 
 
Equity - partners
786,512 
1,086,008 
 
 
Equity - noncontrolling interest
0 
0 
 
 
Total liabilities and equity
1,770,858 
1,783,870 
 
 
Non-Guarantor Subsidiaries [Member]
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
5,727 
3,354 
8,029 
9,559 
Accounts receivable
4,063 
5,554 
 
 
Prepaid and other current assets
351 
244 
 
 
Total current assets
10,141 
9,152 
 
 
Properties and equipment, net
368,223 
371,350 
 
 
Investment in subsidiaries
0 
0 
 
 
Transportation agreements, net
0 
0 
 
 
Goodwill
0 
0 
 
 
Equity method investments
0 
0 
 
 
Other assets
0 
0 
 
 
Assets
378,364 
380,502 
 
 
Current liabilities:
 
 
 
 
Accounts payable
3,464 
2,899 
 
 
Accrued interest
0 
0 
 
 
Deferred revenue
75 
2,305 
 
 
Accrued property taxes
1,869 
883 
 
 
Other current liabilities
5 
3 
 
 
Total current liabilities
5,413 
6,090 
 
 
Long-term debt
0 
0 
 
 
Other long-term liabilities
188 
184 
 
 
Deferred revenue
0 
0 
 
 
Class B unit
0 
0 
 
 
Equity - partners
279,572 
280,671 
 
 
Equity - noncontrolling interest
93,191 
93,557 
 
 
Total liabilities and equity
378,364 
380,502 
 
 
Consolidation, Eliminations [Member]
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
0 
0 
0 
0 
Accounts receivable
(373)
(202)
 
 
Prepaid and other current assets
0 
0 
 
 
Total current assets
(373)
(202)
 
 
Properties and equipment, net
0 
0 
 
 
Investment in subsidiaries
(1,066,084)
(1,366,679)
 
 
Transportation agreements, net
0 
0 
 
 
Goodwill
0 
0 
 
 
Equity method investments
0 
0 
 
 
Other assets
0 
0 
 
 
Assets
(1,066,457)
(1,366,881)
 
 
Current liabilities:
 
 
 
 
Accounts payable
(373)
(202)
 
 
Accrued interest
0 
0 
 
 
Deferred revenue
0 
0 
 
 
Accrued property taxes
0 
0 
 
 
Other current liabilities
0 
0 
 
 
Total current liabilities
(373)
(202)
 
 
Long-term debt
0 
0 
 
 
Other long-term liabilities
0 
0 
 
 
Deferred revenue
0 
0 
 
 
Class B unit
0 
0 
 
 
Equity - partners
(1,066,084)
(1,366,679)
 
 
Equity - noncontrolling interest
0 
0 
 
 
Total liabilities and equity
$ (1,066,457)
$ (1,366,881)
 
 
Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidating Statement of Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Revenues [Abstract]
 
 
Affiliates
$ 89,025 
$ 82,800 
Third parties
16,609 
19,164 1
Total revenues
105,634 
102,010 1
Operating costs and expenses [Abstract]
 
 
Operations (exclusive of depreciation and amortization)
32,489 
27,855 1
Depreciation and amortization
18,777 
16,551 1
General and administrative
2,634 
3,091 1
Total operating costs and expenses
53,900 
47,497 1
Operating Income (Loss)
51,734 
54,513 1
Equity in Earnings (Loss) of Subsidiaries
0 
0 
Equity in Earnings of Equity Method Investments
1,840 
2,765 1
Interest expense
(13,539)
(10,535)1
Interest income
102 
112 1
Loss on early extinguishment of debt
(12,225)
0 
Gain (Loss) on Sale of Assets and Other
73 
(8)1
Nonoperating Income (Expense)
(23,749)
(7,666)1
Income (Loss) before Income Taxes
27,985 
46,847 1
State income tax (expense) benefit
(106)
(95)1
Net income
27,879 
46,752 1
Net (Income) Loss Attributable to Predecessor
0 
1,150 1
Allocation of Net (Income) Attributable to Noncontrolling Interest
(2,316)
(4,927)1
Net Income (Loss) Attributable to Parent
25,563 
42,975 1
Other comprehensive income (loss)
63 
(453)
Comprehensive Income (Loss) Attributable to Holly Energy Partners
25,626 
42,522 1
Equity Method Investments [Member]
 
 
Operating costs and expenses [Abstract]
 
 
Equity in Earnings of Equity Method Investments
1,840 
2,765 
Parent Company [Member]
 
 
Revenues [Abstract]
 
 
Affiliates
0 
0 
Third parties
0 
0 
Total revenues
0 
0 
Operating costs and expenses [Abstract]
 
 
Operations (exclusive of depreciation and amortization)
0 
0 
Depreciation and amortization
   
0 
General and administrative
1,155 
1,165 
Total operating costs and expenses
1,155 
1,165 
Operating Income (Loss)
(1,155)
(1,165)
Equity in Earnings (Loss) of Subsidiaries
45,283 
48,990 
Interest expense
(6,340)
(5,067)
Interest income
0 
0 
Loss on early extinguishment of debt
(12,225)
 
Gain (Loss) on Sale of Assets and Other
0 
0 
Nonoperating Income (Expense)
26,718 
43,923 
Income (Loss) before Income Taxes
25,563 
42,758 
State income tax (expense) benefit
0 
0 
Net income
25,563 
42,758 
Net (Income) Loss Attributable to Predecessor
 
0 
Allocation of Net (Income) Attributable to Noncontrolling Interest
0 
0 
Net Income (Loss) Attributable to Parent
25,563 
42,758 
Other comprehensive income (loss)
63 
(453)
Comprehensive Income (Loss) Attributable to Holly Energy Partners
25,626 
42,305 
Parent Company [Member] |
Equity Method Investments [Member]
 
 
Operating costs and expenses [Abstract]
 
 
Equity in Earnings of Equity Method Investments
0 
0 
Guarantor Subsidiaries [Member]
 
 
Revenues [Abstract]
 
 
Affiliates
80,776 
72,252 
Third parties
11,003 
10,732 
Total revenues
91,779 
82,984 
Operating costs and expenses [Abstract]
 
 
Operations (exclusive of depreciation and amortization)
29,092 
24,824 
Depreciation and amortization
14,853 
12,793 
General and administrative
1,479 
1,926 
Total operating costs and expenses
45,424 
39,543 
Operating Income (Loss)
46,355 
43,441 
Equity in Earnings (Loss) of Subsidiaries
4,901 
9,184 
Interest expense
(7,199)
(5,468)
Interest income
102 
105 
Loss on early extinguishment of debt
0 
 
Gain (Loss) on Sale of Assets and Other
72 
(9)
Nonoperating Income (Expense)
(284)
6,577 
Income (Loss) before Income Taxes
46,071 
50,018 
State income tax (expense) benefit
(106)
(95)
Net income
45,965 
49,923 
Net (Income) Loss Attributable to Predecessor
 
1,150 
Allocation of Net (Income) Attributable to Noncontrolling Interest
(682)
(1,866)
Net Income (Loss) Attributable to Parent
45,283 
49,207 
Other comprehensive income (loss)
63 
(453)
Comprehensive Income (Loss) Attributable to Holly Energy Partners
45,346 
48,754 
Guarantor Subsidiaries [Member] |
Equity Method Investments [Member]
 
 
Operating costs and expenses [Abstract]
 
 
Equity in Earnings of Equity Method Investments
1,840 
2,765 
Non-Guarantor Subsidiaries [Member]
 
 
Revenues [Abstract]
 
 
Affiliates
8,249 
10,594 
Third parties
5,606 
8,432 
Total revenues
13,855 
19,026 
Operating costs and expenses [Abstract]
 
 
Operations (exclusive of depreciation and amortization)
3,397 
3,031 
Depreciation and amortization
3,924 
3,758 
General and administrative
0 
0 
Total operating costs and expenses
7,321 
6,789 
Operating Income (Loss)
6,534 
12,237 
Equity in Earnings (Loss) of Subsidiaries
0 
0 
Interest expense
0 
0 
Interest income
0 
7 
Loss on early extinguishment of debt
0 
 
Gain (Loss) on Sale of Assets and Other
1 
1 
Nonoperating Income (Expense)
1 
8 
Income (Loss) before Income Taxes
6,535 
12,245 
State income tax (expense) benefit
0 
0 
Net income
6,535 
12,245 
Net (Income) Loss Attributable to Predecessor
 
0 
Allocation of Net (Income) Attributable to Noncontrolling Interest
(1,634)
(3,061)
Net Income (Loss) Attributable to Parent
4,901 
9,184 
Other comprehensive income (loss)
0 
0 
Comprehensive Income (Loss) Attributable to Holly Energy Partners
4,901 
9,184 
Non-Guarantor Subsidiaries [Member] |
Equity Method Investments [Member]
 
 
Operating costs and expenses [Abstract]
 
 
Equity in Earnings of Equity Method Investments
0 
0 
Consolidation, Eliminations [Member]
 
 
Revenues [Abstract]
 
 
Affiliates
0 
0 
Third parties
0 
0 
Total revenues
0 
0 
Operating costs and expenses [Abstract]
 
 
Operations (exclusive of depreciation and amortization)
0 
0 
Depreciation and amortization
0 
0 
General and administrative
0 
0 
Total operating costs and expenses
0 
0 
Operating Income (Loss)
0 
0 
Equity in Earnings (Loss) of Subsidiaries
(50,184)
(58,174)
Interest expense
0 
0 
Interest income
0 
0 
Loss on early extinguishment of debt
0 
 
Gain (Loss) on Sale of Assets and Other
0 
0 
Nonoperating Income (Expense)
(50,184)
(58,174)
Income (Loss) before Income Taxes
(50,184)
(58,174)
State income tax (expense) benefit
0 
0 
Net income
(50,184)
(58,174)
Net (Income) Loss Attributable to Predecessor
 
0 
Allocation of Net (Income) Attributable to Noncontrolling Interest
0 
0 
Net Income (Loss) Attributable to Parent
(50,184)
(58,174)
Other comprehensive income (loss)
(63)
453 
Comprehensive Income (Loss) Attributable to Holly Energy Partners
(50,247)
(57,721)
Consolidation, Eliminations [Member] |
Equity Method Investments [Member]
 
 
Operating costs and expenses [Abstract]
 
 
Equity in Earnings of Equity Method Investments
$ 0 
$ 0 
Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidating Statement of Cash Flows (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2016
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net cash provided by operating activities
$ 43,600 
 
$ 47,369 
Cash flows from investing activities
 
 
 
Additions to Properties and Equipment
(8,265)
 
(17,873)1
Payments to Acquire Other Property, Plant, and Equipment
0 
 
(24,311)
Proceeds from sale of assets
424 
 
12 
Distributions in excess of equity in earnings of equity investments
3,016 
 
(99)
Net cash used for investing activities
(4,825)
 
(42,073)
Cash flows from financing activities
 
 
 
Net borrowings under credit agreement
294,000 
 
53,000 
Net intercompany financing activities
0 
 
0 
Proceeds from Issuance of Common Units
(37,563)
 
0 
Contributions from General Partner
0 
 
 
Repayments of Senior Debt
(309,750)
 
 
Contributions from general partner for Osage
 
 
0 
Distribution to HFC for Tulsa Tank Acquisition
0 
 
(39,500)
Distributions to HEP unitholders
(54,805)
 
(44,960)
Additions to Properties and Equipment
(103)
(278,000)
0 
Contributions from HFC for acquisitions
0 
 
25,343 1
Distributions to noncontrolling interests
(2,000)
 
(1,250)
Purchase of units for incentive grants
0 
 
(784)
Deferred financing costs
0 
 
(2,964)
Other
(330)
 
(160)
Net cash used for financing activities
(35,425)
 
(11,275)
Increase (decrease) for the period
3,350 
 
(5,979)
Beginning of period
3,657 
 
15,013 
End of period
7,007 
3,657 
9,034 
Parent Company [Member]
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net cash provided by operating activities
(20,297)
 
(10,084)
Cash flows from investing activities
 
 
 
Additions to Properties and Equipment
0 
 
0 
Payments to Acquire Other Property, Plant, and Equipment
 
 
0 
Proceeds from sale of assets
0 
 
0 
Distributions in excess of equity in earnings of equity investments
0 
 
0 
Net cash used for investing activities
0 
 
0 
Cash flows from financing activities
 
 
 
Net borrowings under credit agreement
0 
 
0 
Net intercompany financing activities
344,781 
 
53,751 
Proceeds from Issuance of Common Units
(39,371)
 
 
Contributions from General Partner
805 
 
 
Repayments of Senior Debt
(309,750)
 
 
Contributions from general partner for Osage
 
 
32,455 
Distribution to HFC for Tulsa Tank Acquisition
 
 
(30,378)
Distributions to HEP unitholders
(54,807)
 
(44,960)
Additions to Properties and Equipment
(103)
 
 
Contributions from HFC for acquisitions
 
 
0 
Distributions to noncontrolling interests
0 
 
0 
Purchase of units for incentive grants
 
 
(784)
Deferred financing costs
 
 
0 
Other
0 
 
0 
Net cash used for financing activities
20,297 
 
10,084 
Increase (decrease) for the period
0 
 
0 
Beginning of period
2 
 
2 
End of period
2 
 
2 
Guarantor Subsidiaries [Member]
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net cash provided by operating activities
58,062 
 
47,779 
Cash flows from investing activities
 
 
 
Additions to Properties and Equipment
(7,902)
 
(7,919)
Payments to Acquire Other Property, Plant, and Equipment
 
 
(24,311)
Proceeds from sale of assets
424 
 
12 
Distributions in excess of equity in earnings of equity investments
3,016 
 
(99)
Net cash used for investing activities
(3,363)
 
(32,119)
Cash flows from financing activities
 
 
 
Net borrowings under credit agreement
294,000 
 
53,000 
Net intercompany financing activities
(344,781)
 
(53,751)
Proceeds from Issuance of Common Units
(1,808)
 
 
Contributions from General Partner
(805)
 
 
Repayments of Senior Debt
0 
 
 
Contributions from general partner for Osage
 
 
32,455 
Distribution to HFC for Tulsa Tank Acquisition
 
 
(9,122)
Distributions to HEP unitholders
2 
 
0 
Additions to Properties and Equipment
0 
 
 
Contributions from HFC for acquisitions
 
 
25,343 
Distributions to noncontrolling interests
0 
 
0 
Purchase of units for incentive grants
 
 
0 
Deferred financing costs
 
 
(2,964)
Other
(330)
 
(160)
Net cash used for financing activities
(53,722)
 
(20,109)
Increase (decrease) for the period
977 
 
(4,449)
Beginning of period
301 
 
5,452 
End of period
1,278 
 
1,003 
Non-Guarantor Subsidiaries [Member]
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net cash provided by operating activities
10,736 
 
13,424 
Cash flows from investing activities
 
 
 
Additions to Properties and Equipment
(363)
 
(9,954)
Payments to Acquire Other Property, Plant, and Equipment
 
 
0 
Proceeds from sale of assets
0 
 
0 
Distributions in excess of equity in earnings of equity investments
0 
 
0 
Net cash used for investing activities
(363)
 
(9,954)
Cash flows from financing activities
 
 
 
Net borrowings under credit agreement
0 
 
0 
Net intercompany financing activities
0 
 
0 
Proceeds from Issuance of Common Units
0 
 
 
Contributions from General Partner
0 
 
 
Repayments of Senior Debt
0 
 
 
Contributions from general partner for Osage
 
 
0 
Distribution to HFC for Tulsa Tank Acquisition
 
 
0 
Distributions to HEP unitholders
0 
 
0 
Additions to Properties and Equipment
0 
 
 
Contributions from HFC for acquisitions
 
 
0 
Distributions to noncontrolling interests
(8,000)
 
(5,000)
Purchase of units for incentive grants
 
 
0 
Deferred financing costs
 
 
0 
Other
0 
 
0 
Net cash used for financing activities
(8,000)
 
(5,000)
Increase (decrease) for the period
2,373 
 
(1,530)
Beginning of period
3,354 
 
9,559 
End of period
5,727 
 
8,029 
Consolidation, Eliminations [Member]
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net cash provided by operating activities
(4,901)
 
(3,750)
Cash flows from investing activities
 
 
 
Additions to Properties and Equipment
0 
 
0 
Payments to Acquire Other Property, Plant, and Equipment
 
 
0 
Proceeds from sale of assets
0 
 
0 
Distributions in excess of equity in earnings of equity investments
0 
 
0 
Net cash used for investing activities
(1,099)
 
0 
Cash flows from financing activities
 
 
 
Net borrowings under credit agreement
0 
 
0 
Net intercompany financing activities
0 
 
0 
Proceeds from Issuance of Common Units
0 
 
 
Contributions from General Partner
0 
 
 
Repayments of Senior Debt
0 
 
 
Contributions from general partner for Osage
 
 
0 
Distribution to HFC for Tulsa Tank Acquisition
 
 
0 
Distributions to HEP unitholders
0 
 
0 
Additions to Properties and Equipment
0 
 
 
Contributions from HFC for acquisitions
 
 
0 
Distributions to noncontrolling interests
6,000 
 
3,750 
Purchase of units for incentive grants
 
 
0 
Deferred financing costs
 
 
0 
Other
0 
 
0 
Net cash used for financing activities
6,000 
 
3,750 
Increase (decrease) for the period
0 
 
0 
Beginning of period
0 
 
0 
End of period
0 
 
0 
UNEV Pipeline [Member]
 
 
 
Cash flows from investing activities
 
 
 
Distributions in excess of equity in earnings of equity investments
0 
 
 
UNEV Pipeline [Member] |
Parent Company [Member]
 
 
 
Cash flows from investing activities
 
 
 
Distributions in excess of equity in earnings of equity investments
0 
 
 
UNEV Pipeline [Member] |
Guarantor Subsidiaries [Member]
 
 
 
Cash flows from investing activities
 
 
 
Distributions in excess of equity in earnings of equity investments
(1,099)
 
 
UNEV Pipeline [Member] |
Non-Guarantor Subsidiaries [Member]
 
 
 
Cash flows from investing activities
 
 
 
Distributions in excess of equity in earnings of equity investments
0 
 
 
UNEV Pipeline [Member] |
Consolidation, Eliminations [Member]
 
 
 
Cash flows from investing activities
 
 
 
Distributions in excess of equity in earnings of equity investments
$ (1,099)