Document Entity Information

6 Months Ended

Jun. 30, 2016

Jul. 29, 2016

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

Jun. 30, 2016

Document Fiscal Year Focus

2016

Document Fiscal Period Focus

Q2

Amendment Flag

false

Entity Common Stock, Shares Outstanding

59,101,847

Consolidated Balance Sheets (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Current assets:

Cash and cash equivalents

$ 4,882

$ 15,013

Accounts receivable:

Trade

7,288

8,593

Affiliates

42,845

32,482

Total accounts receivable

50,133

41,075

Prepaid and other current assets

4,638

5,054

Total current assets

59,653

61,142

Properties and equipment, net

1,054,162

1,059,179 ¹

Transportation agreements, net

70,330

73,805

Goodwill

256,498

Equity method investments

165,362

79,438

Other assets

11,324

13,703

Total assets

1,617,329

1,543,765 ¹

Accounts payable:

Trade

12,245

10,948

Affiliates

9,182

11,635

Total accounts payable

21,427

22,583

Accrued interest

6,661

6,752

Deferred revenue

9,553

12,016

Accrued property taxes

5,174

3,764

Other current liabilities

3,298

3,809

Total current liabilities

46,113

48,924

Long-term debt

1,083,136

1,008,752

Other long-term liabilities

17,190

20,744 ¹

Deferred revenue

42,474

39,063

Class B unit

37,705

33,941

Partners’ equity:

Common unitholders (59,101,847 and 58,657,048 units issued and outstanding at June 30, 2016 and December 31, 2015, respectively

433,551

428,019

General partner interest (2% interest)

(137,882)

(130,297)¹

Accumulated other comprehensive loss

(405)

190

Total partners’ equity

295,264

297,912 ¹

Noncontrolling interest

95,447

94,429

Total Equity

390,711

392,341 ¹

Total liabilities and equity

$ 1,617,329

$ 1,543,765 ¹

[1] Retrospectively adjusted as described in Note 1.

Consolidated Balance Sheets (Parenthetical)

6 Months Ended

Jun. 30, 2016

Dec. 31, 2015

Partners' Equity:

Common units issued

58,657,048

Common units outstanding

58,657,048

General partner interest

2.00%

Consolidated Statements of Income (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Revenues:

Affiliates

$ 79,179

$ 68,297

$ 162,025

$ 140,552

Third parties

15,718

15,182

34,882

32,683

Total revenues

94,897

83,479

196,907

173,235

Operating costs and expenses:

Operations (exclusive of depreciation and amortization)

27,255

25,400 ¹

54,177

53,465 ¹

Depreciation and amortization

15,709

15,179 ¹

32,260

29,977 ¹

General and administrative

2,863

2,696

5,954

5,986

Total operating costs and expenses

45,827

43,275 ¹

92,391

89,428 ¹

Operating income

49,070

40,204 ¹

104,516

83,807 ¹

Other income (expense):

Equity in Earnings of Equity Method Investments

3,623

631

6,388

1,365

Interest expense

(11,276)

(9,056)

(21,811)

(17,824)

Interest income

112

3

224

3

Gain (loss) on sale of assets

(5)

50

(5)

209

Other (income) expense

5

21

(3)

21

Total other income (expense)

(7,541)

(8,351)

(15,207)

(16,226)

Income before income taxes

41,529

31,853 ¹

89,309

67,581 ¹

State income tax (expense) benefit

(54)

64

(149)

(37)

Net Income

41,475

31,917 ¹

89,160

67,544 ¹

Allocation of Net Income Attributable to Noncontrolling Interest

(2,355)

(1,743)

(7,282)

(5,770)

Net income attributable to Holly Energy Partners

39,120

30,174

81,878

61,774

General partner interest in net income, including incentive distributions

(12,677)

(9,969)¹

(24,562)

(19,576)¹

Limited partners’ interest in net income

$ 26,443

$ 20,205 ¹

$ 57,316

$ 42,198 ¹

Limited partners’ per unit interest in earnings—basic and diluted:

$ 0.45

$ 0.34

$ 0.96

$ 0.71

Weighted average limited partners’ units outstanding

58,865

58,657

58,761

58,657

[1] Retrospectively adjusted as described in Note 1.

Consolidated Statement of Comprehensive Income (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Net income

$ 41,475

$ 31,917 ¹

$ 89,160

$ 67,544 ¹

Other comprehensive income:

Change in fair value of cash flow hedging instruments

(255)

(306)

(938)

(1,586)

Reclassification adjustment to net income on partial settlement of cash flow hedge

113

528

343

1,059

Other comprehensive income (loss)

(142)

222

(595)

(527)

Comprehensive income before noncontrolling interest

41,333

32,139 ¹

88,565

67,017 ¹

Allocation of comprehensive income to noncontrolling interests

(2,355)

(1,743)

(7,282)

(5,770)

Comprehensive income attributable to Holly Energy Partners

$ 38,978

$ 30,396 ¹

$ 81,283

$ 61,247 ¹

[1] Retrospectively adjusted as described in Note 1.

Consolidated Statements of Cash Flows (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Cash flows from operating activities

Net income

$ 89,160

$ 67,544 ¹

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

32,260

29,977 ¹

(Gain) loss on sale of assets

5

(209)

Amortization of deferred charges

1,376

930

Amortization of restricted and performance units

1,193

1,762

Distributions less than income from equity investments

(414)

0

(Increase) decrease in operating assets:

Accounts receivable – trade

2,564

(4,514)

Accounts receivable – affiliates

(10,183)

5,064

Prepaid and other current assets

416

(311)

Increase (decrease) in operating liabilities:

Accounts payable – trade

(637)

(1,610)

Accounts payable – affiliates

(2,454)

2,573

Accrued interest

(91)

168

Deferred revenue

948

3,600

Accrued property taxes

1,409

1,632

Other current liabilities

(979)

(242)

Other, net

(381)

3,890

Net cash provided by operating activities

114,192

110,254

Cash flows from investing activities

Distributions to HFC for Tulsa Tanks

(32,667)

(42,343)¹

Purchase of El Dorado crude tanks

0

(27,500)

Purchase of interest in Cheyenne Pipeline

(42,500)

0

Proceeds from sale of assets and other

18

965

Distributions in excess of equity in earnings of equity investments

1,496

198

Net cash used for investing activities

(73,653)

(68,680)

Cash flows from financing activities

Borrowings under credit agreement

239,000

254,100

Repayments of credit agreement borrowings

(165,000)

(221,100)

Contributions from HFC for El Dorado Operating acquisition

0

18,888 ¹

Contributions from General Partner

120

0

General Partner Distributions

(1,245)

0

Proceeds from Issuance of Common Units

13,690

0

Distributions to HEP unitholders

(91,109)

(82,614)

Distributions to noncontrolling interests

(2,500)

(2,875)

Distribution to HFC for Tulsa Tank Acquisition

(39,500)

0

Contributions from HFC for Tulsa Tank expenditures

99

722 ¹

Purchase of units for incentive grants

(784)

(247)

Deferred financing costs

(3,084)

0

Other

(357)

(854)

Net cash used for financing activities

(50,670)

(33,980)

Cash and cash equivalents

Increase (decrease) for the period

(10,131)

7,594

Beginning of period

15,013

2,830

End of period

$ 4,882

$ 10,424

[1] Retrospectively adjusted as described in Note 1.

Consolidated Statement of Partners' Equity (USD $)

In Thousands, unless otherwise specified

Total

Common Units

General Partner Interest

Accumulated Other Comprehensive Income (Loss)

Noncontrolling Interest

Tulsa Tanks [Member]

General Partner Interest

Balance at December 31, 2015 at Dec. 31, 2015

$ 392,341

$ 428,019

$ (130,297)¹

$ 190

$ 94,429

Increase (Decrease) in Partners' Equity [Roll Forward]

Contribution from HFC for Osage transaction

31,285

0

Contribution from HFC

300

299

Distributions to HFC for Tulsa Tanks

(32,667)

(39,500)

Contributions from HFC for Tulsa Tank expenditures

99

Distributions to HEP unitholders

(91,109)

(66,854)

(24,255)

Distributions to Noncontrolling Interest

(2,500)

Issuance of common units

14,586

Purchase of units for incentive grants

(784)

Amortization of restricted and performance units

1,193

Class B unit accretion

(3,764)

(3,689)

(75)

Net income

89,160

61,080

24,562

3,518

Other comprehensive income

(595)

Balance at June 30, 2016 at Jun. 30, 2016

$ 390,711

$ 433,551

$ (137,882)

$ (405)

$ 95,447

[1] Retrospectively adjusted as described in Note 1.

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 39% owned (including the 2% general partner interest) by HollyFrontier Corporation (“HFC”) and its subsidiaries. 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 operate in one reportable segment which represents the aggregation of our petroleum product and crude pipelines business and terminals, tankage, loading rack facilities and refinery processing units.

We own and operate petroleum product and crude oil pipelines, terminals, tankage and loading rack facilities and refinery processing units that support HFC’s refining and marketing operations in the Mid-Continent, Southwest and Rocky Mountain 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 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, 2015. 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, 2016.

On July 19, 2016, we closed a private placement of $400 million in aggregate principal amount of 6.0% senior unsecured notes due in 2024 (the “6.0% Senior Notes”). We used the net proceeds to repay indebtedness under our revolving credit agreement.

On May 10, 2016, we established a continuous offering program under which HEP may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million. We intend to use our net proceeds for general partnership purposes.

Acquisitions

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 $42.5 million in cash to Cheyenne Pipeline LLC. Cheyenne Pipeline LLC will continue to be operated by an affiliate of Plains All American Pipeline, L.P. (“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 capacity.

Tulsa Tanks

On March 31, 2016, we acquired crude oil tanks located at HFC’s Tulsa refinery from an affiliate of Plains for $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 remained on HFC’s balance sheet and were depreciated for accounting purposes.

As we are a consolidated variable interest entity (“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. We have retrospectively adjusted our financial position and operating results as if these crude oil tanks were owned for all periods while we were under common control of HFC. The 2015 consolidated income statement was adjusted to reflect a $0.2 million and a $0.4 million increase in operating costs and expenses for the three and six months ended June 30, 2015, respectively. The consolidated balance sheet was adjusted to reflect increases of $9.3 million in net properties and equipment, $0.1 million in other long-term liabilities and $9.2 million in general partner interest at December 31, 2015. The consolidated statement of cash flows for the six months ended June 30, 2015, reflects these changes in cash flows from investing and financing activities.

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 are the named operator of the Osage Pipeline and are working to transition into that role. 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 treated as a contribution from HFC. The carrying value of our 50% membership interest in Osage of $44.5 million exceeds the amount of the underlying equity in net assets recorded by Osage by $33.1 million.

El Dorado Operating

On November 1, 2015, we acquired from a wholly owned subsidiary of HFC, all the outstanding membership interests in El Dorado Operating LLC (“El Dorado Operating”), which owns the newly constructed naphtha fractionation and hydrogen generation units at HFC’s El Dorado refinery, for cash consideration of $62.0 million. 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 $15.3 million.

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 El Dorado Operating’s assets and liabilities. We have retrospectively adjusted our financial position and operating results as if El Dorado Operating were a consolidated subsidiary for all periods while we were under common control of HFC. The consolidated statement of cash flows for the six months ending June 30, 2015, reflects a $18.9 million recast between investing activities and financing activities.

New Accounting Pronouncements

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. We are evaluating the impact of this standard.

Consolidation

In February 2015, the FASB issued a standard that modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. We adopted the new standard effective January 1, 2016. This standard had no impact on the entities we consolidate.

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.

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, we reduced net income by $0.2 million and $0.4 million for the three and six months ended June 30, 2015, respectively. This reduction had no impact on the historical earnings per unit.

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 and 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:



		June 30, 2016				December 31, 2015
Financial Instrument	Fair Value Input Level	Carrying Value		Fair Value		Carrying Value		Fair Value
		(In thousands)
Assets:
Interest rate swaps	Level 2	$	—	$	—	$	304	$	304

Liabilities:
6.5% Senior notes	Level 2	$	297,136	$	301,500	$	296,752	$	295,500
Interest rate swaps	Level 2	405		405		114		114
		$	297,541	$	301,905	$	296,866	$	295,614

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

The carrying amounts of our properties and equipment are as follows:



	June 30, 2016		December 31, 2015 ⁽¹⁾
	(In thousands)
Pipelines, terminals and tankage	$	1,199,857	$	1,231,597
Land and right of way	65,273		66,215
Refinery assets	64,371		63,336
Construction in progress	52,759		28,249
Other	24,524		22,200
	1,406,784		1,411,597
Less accumulated depreciation	352,622		352,418
	$	1,054,162	$	1,059,179

(1) Retrospectively adjusted as described in Note 1.

We capitalized $0.3 million and $0.6 million in interest attributable to construction projects during the six months ended June 30, 2016 and 2015, respectively.

Depreciation expense was $28.5 million and $26.2 million for the six months ended June 30, 2016 and 2015, respectively.

Transportation Agreements

Our transportation agreements represent a portion of the total purchase price of certain assets acquired from Alon in 2005 and from HFC in 2008. 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:



	June 30, 2016		December 31, 2015
	(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	63,884		60,409
	$	70,330	$	73,805

Amortization expense was $3.5 million for each of the six months ended June 30, 2016 and 2015.

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

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 $1.3 million and $1.7 million for the three months ended June 30, 2016 and 2015, respectively, and $2.9 million and $3.1 million for the six months ended June 30, 2016 and 2015, 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.

As of June 30, 2016, we have two types of incentive-based awards outstanding, which are described below. The compensation cost charged against income was $0.5 million and $0.9 million for the three months ended June 30, 2016 and 2015, respectively, and $1.2 million and $1.6 million for the six months ended June 30, 2016 and 2015, 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 June 30, 2016, 2,500,000 units were authorized to be granted under our Long-Term Incentive Plan, of which 1,487,498 have not yet been granted, assuming no forfeitures of the unvested units and full achievement of goals for the unvested performance units.

Restricted and Phantom Units

Under our Long-Term Incentive Plan, we grant restricted units to non-employee directors and 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.

In addition, we previously granted phantom units to certain employees. All outstanding phantom units vested in 2015, and no phantom units are currently outstanding. Vested units were paid in common units. Full ownership of the units transferred to the recipients at vesting, and the recipients did not have voting or distribution rights on these units until they vested.

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 six months ended June 30, 2016, is presented below:



Restricted Units	Units		Weighted Average Grant-Date Fair Value
Outstanding at January 1, 2016 (nonvested)	101,408		$	33.63
Granted	10,725		24.48
Forfeited	(3,030	)	34.21
Outstanding at June 30, 2016 (nonvested)	109,103		$	32.71

As of June 30, 2016, there was $1.6 million of total unrecognized compensation expense related to nonvested restricted unit grants, which is expected to be recognized over a weighted-average period of 1.1 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 June 30, 2016, estimated unit payouts for outstanding nonvested performance unit awards ranged between 100% and 150% of the target number of performance units granted.

We granted 10,725 performance units during the six months ended June 30, 2016. Performance units granted in 2015 and during the six months ended June 30, 2016, vest over a three-year performance period ending December 31, 2018 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 six months ended June 30, 2016, is presented below:



Performance Units	Units
Outstanding at January 1, 2016 (nonvested)	45,494
Granted	10,725
Vesting and transfer of common units to recipients	(26,157	)
Forfeited	(2,679	)
Outstanding at June 30, 2016 (nonvested)	27,383

The grant-date fair value of performance units vested and transferred to recipients during the six months ended June 30, 2016, was $1.1 million. Based on the weighted average fair value of performance units outstanding at June 30, 2016, of $0.8 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 2.4 years.

Debt

Credit Agreement

In March 2016, we amended our senior secured revolving credit facility (the “Credit Agreement”) expiring in November 2018, increasing the size of the Credit Agreement from $850 million to $1.2 billion. 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 with which we were in compliance as of June 30, 2016, 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.

Senior Notes

We have $300 million in aggregate principal amount outstanding of 6.5% senior notes (the “6.5% Senior Notes”) maturing March 2020.

On July 19, 2016, we closed a private placement of $400 million in aggregate principal amount of 6.0% senior unsecured notes due in 2024 (the “6.0% Senior Notes” and together with the 6.5 % Senior Notes, the “Senior Notes”). We used the net proceeds to repay indebtedness under our revolving credit agreement.

The 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 6.5% Senior Notes as of June 30, 2016. At any time when the 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 Senior Notes.

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

Long-term Debt

The carrying amounts of our long-term debt are as follows:



	June 30, 2016			December 31, 2015
	(In thousands)
Credit Agreement
Amount outstanding	$	786,000		$	712,000

6.5% Senior Notes
Principal	300,000			300,000
Unamortized discount and debt issuance costs	(2,864		)	(3,248		)
	297,136			296,752

Total long-term debt	$	1,083,136		$	1,008,752

Interest Rate Risk Management

We use interest rate swaps (derivative instruments) to manage our exposure to interest rate risk.

As of June 30, 2016, 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 June 30, 2016, 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 June 30, 2016, we had no ineffectiveness on our cash flow hedges.

At June 30, 2016, we have accumulated other comprehensive loss of $0.4 million that relates to our current cash flow hedging instruments. Approximately $0.4 million will be transferred from accumulated other comprehensive loss 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)
June 30, 2016
Interest rate swaps designated as cash flow hedging instrument:
Variable-to-fixed interest rate swap contracts ($150 million of LIBOR-based debt interest)	Other long-term liabilities	$	(405	)	Accumulated other comprehensive income	$	(405	)
		$	(405	)		$	(405	)

December 31, 2015
Interest rate swaps designated as cash flow hedging instrument:
Variable-to-fixed interest rate swap contract ($150 million of LIBOR-based debt interest)	Other long-term assets	$	304		Accumulated other comprehensive loss	$	304
Variable-to-fixed interest rate swap contracts ($155 million of LIBOR-based debt interest)	Other long-term liabilities	(114		)	Accumulated other comprehensive income	(114		)
		$	190			$	190

Interest Expense and Other Debt Information

Interest expense consists of the following components:



	Six Months Ended June 30,
	2016		2015
	(In thousands)
Interest on outstanding debt:
Credit Agreement, net of interest on interest rate swaps	$	10,284	$	7,488
6.5% Senior Notes	9,757		9,757
Amortization of discount and deferred debt issuance costs	1,376		930
Commitment fees and other	679		261
Total interest incurred	22,096		18,436
Less capitalized interest	285		612
Net interest expense	$	21,811	$	17,824
Cash paid for interest	$	20,736	$	17,280

Capital Lease Obligations

Our capital lease obligations, which relate to vehicle leases with initial terms of 0 to 36 months, are $3.0 million and $1.8 million as of June 30, 2016 and December 31, 2015, respectively. The total cost of assets under capital leases was $4.6 million and $3.0 million as of June 30, 2016 and December 31, 2015, respectively, with accumulated depreciation of $1.6 million and $1.1 million as of June 30, 2016 and December 31, 2015, respectively. We include depreciation of capital leases in depreciation and amortization in our consolidated statements of income.

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 June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
HFC	83	%	82	%	82	%	81	%
Alon	9	%	10	%	8	%	10	%

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 June 30, 2016, these agreements with HFC require minimum annualized payments to us of $261.4 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 $79.2 million and $68.3 million for the three months ended June 30, 2016 and 2015, respectively, and $162.0 million and $140.6 million for the six months ended June 30, 2016 and 2015, respectively.


•	HFC charged us general and administrative services under the Omnibus Agreement of $0.6 million for each of the three months ended June 30, 2016 and 2015 and $1.2 million for each of the six months ended June 30, 2016 and 2015.


•	We reimbursed HFC for costs of employees supporting our operations of $9.5 million and $7.5 million for the three months ended June 30, 2016 and 2015, respectively, and $19.4 million and $16.2 million for the six months ended June 30, 2016 and 2015, respectively.


•	HFC reimbursed us $5.0 million and $4.4 million for the three months ended June 30, 2016 and 2015, respectively, for reimbursable expense and capital projects and $6.7 million and $7.0 million for the six months ended June 30, 2016 and 2015, respectively.


•	We distributed $25.3 million and $22.3 million for the three months ended June 30, 2016 and 2015, respectively, and $49.8 million and $43.9 million for the six months ended June 30, 2016 and 2015, respectively, to HFC as regular distributions on its common units and general partner interest, including general partner incentive distributions.


•	Accounts receivable from HFC were $42.8 million and $32.5 million at June 30, 2016, and December 31, 2015, respectively.


•	Accounts payable to HFC were $9.2 million and $11.6 million at June 30, 2016, and December 31, 2015, respectively.

•

Revenues for the six months ended June 30, 2016 and 2015, include $5.5 million and $6.0 million, respectively, of shortfall payments billed in 2015 and 2014, respectively. Deferred revenue in the consolidated balance sheets at June 30, 2016, and December 31, 2015, includes $3.2 million and $6.4 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 $3.2 million deferred at June 30, 2016.

•

On February 22, 2016, HFC obtained a 50% membership interest in Osage in a non-monetary exchange, whereby a subsidiary of Magellan will provide terminalling services for all HFC products originating in Artesia, New Mexico that require terminalling in or through El Paso, Texas. 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. See Note 1 for a description of this transaction.


•	On March 31, 2016, we acquired crude oil tanks located at HFC’s Tulsa refinery from an affiliate of Plains for $39.5 million. See Note 1 for a description of this transaction.

Partners' Equity

Partners’ Equity

As of June 30, 2016, HFC held 22,380,030 of our common units and the 2% general partner interest, which together constituted a 39% ownership interest in us. Additionally, HFC owned all incentive distribution rights in us.

Continuous Offering Program

On May 10, 2016, we established a continuous offering program under which HEP may issue and sell common units from time to time, representing limited partner interests, up to an aggregate gross sales amount of $200 million. As of June 30, 2016, HEP has issued 444,799 units under this program, providing $14.9 million in gross proceeds. We accrued sales commissions of $0.3 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 $0.3 million as of June 30, 2016.

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 the amount of incentive distributions is 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 June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands)
General partner interest in net income	$	540	$	185	$	953	$	431
General partner incentive distribution	12,137		9,784		23,609		19,145
Total general partner interest in net income	$	12,677	$	9,969	$	24,562	$	19,576

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 July 22, 2016, we announced our cash distribution for the second quarter of 2016 of $0.585 per unit. The distribution is payable on all common and general partner units and will be paid August 12, 2016, to all unitholders of record on August 1, 2016.

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 June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per unit data)
General partner interest in distribution	$	978	$	877	$	1,927	$	1,738
General partner incentive distribution	12,137		9,784		23,609		19,145
Total general partner distribution	13,115		10,661		25,536		20,883
Limited partner distribution	34,575		31,968		68,302		63,496
Total regular quarterly cash distribution	$	47,690	$	42,629	$	93,838	$	84,379
Cash distribution per unit applicable to limited partners	$	0.5850	$	0.5450	$	1.1600	$	1.0825

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)

Earnings Per Share [Text Block]

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 June 30, 2016, included common units, general partner units and incentive distribution rights (IDRs). To the extent net income attributable to the partnership exceeds or is less than cash distributions, this difference is allocated based on the unitholders’ respective ownership percentages, after consideration of any priority allocations of earnings.

When our financial statements are retrospectively adjusted after a dropdown transaction, the earnings of the acquired business or asset, prior to the closing of the transaction, are allocated entirely to our general partner and presented as net income (loss) attributable to predecessors as shown below. 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 June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Net income attributable to Holly Energy Partners	$	39,120		$	30,174		$	81,878		$	61,774
Net loss attributable to predecessors	—			227			239			430
Net Income attributable to partnership	39,120			30,401			82,117			62,204
Less: General partner’s distribution declared (including IDRs)	(13,115		)	(10,661		)	(25,536		)	(20,883		)
Limited partner’s distribution declared on common units	(34,575		)	(31,968		)	(68,302		)	(63,496		)
Distributions in excess of net income attributable to partnership	(8,570		)	(12,228		)	(11,721		)	(22,175		)



	General Partner (including IDRs)			Limited Partners’ Common Units			Total
	(In thousands, except per unit data)
Three Months Ended June 30, 2016
Net income attributable to partnership:
Distributions declared	$	13,115		$	34,575		$	47,690
Distributions in excess of net income attributable to partnership	(171		)	(8,399		)	(8,570		)
Net income attributable to partnership	$	12,944		$	26,176		$	39,120
Weighted average limited partners' units outstanding				58,865
Limited partners' per unit interest in earnings - basic and diluted				$	0.45

Three Months Ended June 30, 2015
Net income attributable to partnership:
Distributions declared	$	10,661		$	31,968		$	42,629
Distributions in excess of net income attributable to partnership	(245		)	(11,983		)	(12,228		)
Net income attributable to partnership	$	10,416		$	19,985		$	30,401
Weighted average limited partners' units outstanding				58,657
Limited partners' per unit interest in earnings - basic and diluted				$	0.34



Six Months Ended June 30, 2016
Net income attributable to partnership:
Distributions declared	$	25,536		$	68,302		$	93,838
Distributions in excess of net income attributable to partnership	(234		)	(11,487		)	(11,721		)
Net income attributable to partnership	$	25,302		$	56,815		$	82,117
Weighted average limited partners' units outstanding				58,761
Limited partners' per unit interest in earnings - basic and diluted				$	0.96

Six Months Ended June 30, 2015
Net income attributable to partnership:
Distributions declared	$	20,883		$	63,496		$	84,379
Distributions in excess of net income attributable to partnership	(444		)	(21,731		)	(22,175		)
Net income attributable to partnership	$	20,439		$	41,765		$	62,204
Weighted average limited partners' units outstanding				58,657
Limited partners' per unit interest in earnings - basic and diluted				$	0.71

Environmental

We incurred $0.2 million for environmental remediation obligations for the three months ended June 30, 2016 and no expense for the three months ended June 30, 2015. For the six months ended June 30, 2016, we incurred $0.2 million for environmental expense, and we incurred $4.2 million for the six months ended June 30, 2015. The accrued environmental liability, net of expected recoveries from indemnifying parties, reflected in our consolidated balance sheets was $7.2 million and $7.7 million at June 30, 2016, and December 31, 2015, respectively, of which $5.7 million and $6.1 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 June 30, 2016, and December 31, 2015, our accrued environmental liability included $0.9 million and $6.4 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

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 operation or cash flows.

Supplemental Guarantor / Non-Guarantor Financial Information

Supplemental Guarantor/Non-Guarantor Financial Information

Obligations of HEP (“Parent”) under the Senior Notes have been jointly and severally guaranteed by each of its direct and indirect 100% owned subsidiaries (“Guarantor Subsidiaries”). These guarantees are full and unconditional, subject to certain customary release provisions. These circumstances include (i) when a Guarantor Subsidiary is sold or sells all or substantially all of its assets, (ii) when a Guarantor Subsidiary is declared “unrestricted” for covenant purposes, (iii) when a Guarantor Subsidiary’s guarantee of other indebtedness is terminated or released and (iv) when the requirements for legal defeasance or covenant defeasance or to discharge the Senior Notes have been satisfied.

The following financial information presents condensed consolidating balance sheets, statements of comprehensive income, and statements of cash flows of the Parent, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. The information has been presented as if the Parent accounted for its ownership in the Guarantor Subsidiaries, and the Guarantor Restricted Subsidiaries accounted for the ownership of the Non-Guarantor Non-Restricted Subsidiaries, using the equity method of accounting.

Condensed Consolidating Balance Sheet



June 30, 2016	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2	$	393	$	4,487	$	—		$	4,882
Accounts receivable	—		44,951		5,345		(163		)	50,133
Prepaid and other current assets	86		3,284		1,268		—			4,638
Total current assets	88		48,628		11,100		(163		)	59,653

Properties and equipment, net	—		675,929		378,233		—			1,054,162
Investment in subsidiaries	598,391		286,340		—		(884,731		)	—
Transportation agreements, net	—		70,330		—		—			70,330
Goodwill	—		256,498		—		—			256,498
Equity method investments	—		165,362		—		—			165,362
Other assets	677		10,647		—		—			11,324
Total assets	$	599,156	$	1,513,734	$	389,333	$	(884,894	)	$	1,617,329

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	18,837	$	2,753	$	(163	)	$	21,427
Accrued interest	6,500		161		—		—			6,661
Deferred revenue	—		7,931		1,622		—			9,553
Accrued property taxes	—		2,205		2,969		—			5,174
Other current liabilities	11		3,263		24		—			3,298
Total current liabilities	6,511		32,397		7,368		(163		)	46,113

Long-term debt	297,136		786,000		—		—			1,083,136
Other long-term liabilities	245		16,767		178		—			17,190
Deferred revenue	—		42,474		—		—			42,474
Class B unit	—		37,705		—		—			37,705
Equity - partners	295,264		598,391		381,787		(980,178		)	295,264
Equity - noncontrolling interest	—		—		—		95,447			95,447
Total liabilities and equity	$	599,156	$	1,513,734	$	389,333	$	(884,894	)	$	1,617,329

Condensed Consolidating Balance Sheet



December 31, 2015 ⁽¹⁾	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2	$	5,452	$	9,559	$	—		$	15,013
Accounts receivable	—		35,558		5,715		(198		)	41,075
Prepaid and other current assets	174		3,634		1,246		—			5,054
Total current assets	176		44,644		16,520		(198		)	61,142

Properties and equipment, net	—		687,336		371,843		—			1,059,179
Investment in subsidiaries	600,563		283,287		—		(883,850		)	—
Transportation agreements, net	—		73,805		—		—			73,805
Goodwill	—		256,498		—		—			256,498
Equity method investments	—		79,438		—		—			79,438
Other assets	642		13,061		—		—			13,703
Total assets	$	601,381	$	1,438,069	$	388,363	$	(884,048	)	$	1,543,765

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	19,448	$	3,333	$	(198	)	$	22,583
Accrued interest	6,500		252		—		—			6,752
Deferred revenue	—		6,010		6,006		—			12,016
Accrued property taxes	—		2,627		1,137		—			3,764
Other current liabilities	7		3,802		—		—			3,809
Total current liabilities	6,507		32,139		10,476		(198		)	48,924

Long-term debt	296,752		712,000		—		—			1,008,752
Other long-term liabilities	210		20,363		171		—			20,744
Deferred revenue	—		39,063		—		—			39,063
Class B unit	—		33,941		—		—			33,941
Equity - partners	297,912		600,563		377,716		(978,279		)	297,912
Equity - noncontrolling interest	—		—		—		94,429			94,429
Total liabilities and equity	$	601,381	$	1,438,069	$	388,363	$	(884,048	)	$	1,543,765

(1) Retrospectively adjusted as described in Note 1.

Condensed Consolidating Statement of Comprehensive Income



Three Months Ended June 30, 2016	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	74,787		$	4,392	$	—		$	79,179
Third parties	—			11,691			4,027		—			15,718
	—			86,478			8,419		—			94,897
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			24,444			2,811		—			27,255
Depreciation and amortization				11,922			3,787		—			15,709
General and administrative	971			1,892			—		—			2,863
	971			38,258			6,598		—			45,827
Operating income (loss)	(971		)	48,220			1,821		—			49,070
Equity in earnings of subsidiaries	45,164			1,370			—		(46,534		)	—
Equity in earnings of equity method investments	—			3,623			—		—			3,623
Interest expense	(5,073		)	(6,203		)	—		—			(11,276		)
Interest income	—			107			5		—			112
Loss on sale of assets	—			(5		)	—		—			(5		)
Other income (expense)	—			5			—		—			5
	40,091			(1,103		)	5		(46,534		)	(7,541		)
Income (loss) before income taxes	39,120			47,117			1,826		(46,534		)	41,529
State income tax expense	—			(54		)	—		—			(54		)
Net income (loss)	39,120			47,063			1,826		(46,534		)	41,475
Allocation of net (income) attributable to noncontrolling interests	—			—			—		(2,355		)	(2,355		)
Net income (loss) attributable to Holly Energy Partners	39,120			47,063			1,826		(48,889		)	39,120
Other comprehensive income (loss)	(142		)	(142		)	—		142			(142		)
Comprehensive income (loss) attributable to Holly Energy Partners	$	38,978		$	46,921		$	1,826	$	(48,747	)	$	38,978

Condensed Consolidating Statement of Comprehensive Income



Three Months Ended June 30, 2015 ⁽¹⁾	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	64,727		$	3,545		$	25		$	68,297
Third parties	—			11,895			3,287			—			15,182
	—			76,622			6,832			25			83,479
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			22,222			3,153			25			25,400
Depreciation and amortization	—			11,432			3,747			—			15,179
General and administrative	637			2,059			—			—			2,696
	637			35,713			6,900			25			43,275
Operating income (loss)	(637		)	40,909			(68		)	—			40,204
Equity in earnings of subsidiaries	36,111			(88		)	—			(36,023		)	—
Equity in earnings of equity method investments	—			631			—			—			631
Interest expense	(5,073		)	(3,983		)	—			—			(9,056		)
Interest income	—			3			—			—			3
Gain on sale of assets	—			50			—			—			50
Other income (expense)	—			70			(49		)	—			21
	31,038			(3,317		)	(49		)	(36,023		)	(8,351		)
Income (loss) before income taxes	30,401			37,592			(117		)	(36,023		)	31,853
State income tax expense	—			64			—			—			64
Net income (loss)	30,401			37,656			(117		)	(36,023		)	31,917
Allocation of net (income) attributable to noncontrolling interests	—			—			—			(1,743		)	(1,743		)
Net income (loss) attributable to Holly Energy Partners	30,401			37,656			(117		)	(37,766		)	30,174
Other comprehensive income (loss)	222			222			—			(222		)	222
Comprehensive income (loss) attributable to Holly Energy Partners	$	30,623		$	37,878		$	(117	)	$	(37,988	)	$	30,396

(1) Retrospectively adjusted as described in Note 1.

Condensed Consolidating Statement of Comprehensive Income



Six Months Ended June 30, 2016	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	147,039		$	14,986	$	—		$	162,025
Third parties	—			22,423			12,459		—			34,882
	—			169,462			27,445		—			196,907
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			48,335			5,842		—			54,177
Depreciation and amortization	—			24,715			7,545		—			32,260
General and administrative	2,136			3,818			—		—			5,954
	2,136			76,868			13,387		—			92,391
Operating income (loss)	(2,136		)	92,594			14,058		—			104,516
Equity in earnings (loss) of subsidiaries	94,154			10,553			—		(104,707		)	—
Equity in earnings of equity method investments	—			6,388			—		—			6,388
Interest expense	(10,140		)	(11,671		)	—		—			(21,811		)
Interest income	—			212			12		—			224
Loss on sale of assets	—			(5		)	—		—			(5		)
Other income (expense)	—			(4		)	1		—			(3		)
	84,014			5,473			13		(104,707		)	(15,207		)
Income (loss) before income taxes	81,878			98,067			14,071		(104,707		)	89,309
State income tax expense	—			(149		)	—		—			(149		)
Net income (loss)	81,878			97,918			14,071		(104,707		)	89,160
Allocation of net income attributable to noncontrolling interests	—			—			—		(7,282		)	(7,282		)
Net income (loss) attributable to Holly Energy Partners	81,878			97,918			14,071		(111,989		)	81,878
Other comprehensive income (loss)	(595		)	(595		)	—		595			(595		)
Comprehensive income (loss)	$	81,283		$	97,323		$	14,071	$	(111,394	)	$	81,283

Condensed Consolidating Statement of Comprehensive Income



Six Months Ended June 30, 2015 ⁽¹⁾	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	127,783		$	12,769		$	—		$	140,552
Third parties	—			23,282			9,401			—			32,683
	—			151,065			22,170			—			173,235
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			47,852			5,613			—			53,465
Depreciation and amortization	—			22,498			7,479			—			29,977
General and administrative	1,700			4,286			—			—			5,986
	1,700			74,636			13,092			—			89,428
Operating income (loss)	(1,700		)	76,429			9,078			—			83,807
Equity in earnings (loss) of subsidiaries	74,044			6,772			—			(80,816		)	—
Equity in earnings of equity method investments	—			1,365			—			—			1,365
Interest expense	(10,140		)	(7,684		)	—			—			(17,824		)
Interest income	—			3			—			—			3
Gain on sale of assets	—			209			—			—			209
Other income	—			70			(49		)	—			21
	63,904			735			(49		)	(80,816		)	(16,226		)
Income (loss) before income taxes	62,204			77,164			9,029			(80,816		)	67,581
State income tax expense	—			(37		)	—			—			(37		)
Net income (loss)	62,204			77,127			9,029			(80,816		)	67,544
Allocation of net income attributable to noncontrolling interests	—			—			—			(5,770		)	(5,770		)
Net income (loss) attributable to Holly Energy Partners	62,204			77,127			9,029			(86,586		)	61,774
Other comprehensive income (loss)	(527		)	(527		)	—			527			(527		)
Comprehensive income (loss)	$	61,677		$	76,600		$	9,029		$	(86,059	)	$	61,247

(1) Retrospectively adjusted as described in Note 1.

Condensed Consolidating Statement of Cash Flows



Six Months Ended June 30, 2016	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities	$	(10,608	)	$	113,145		$	19,155		$	(7,500	)	$	114,192

Cash flows from investing activities
Additions to properties and equipment	—			(18,440		)	(14,227		)	—			(32,667		)
Purchase of investment in Frontier Pipeline	—			(42,500		)	—			—			(42,500		)
Proceeds from sale of assets	—			18			—			—			18
Distributions in excess of equity in earnings of equity investments	—			1,496			—			—			1,496
	—			(59,426		)	(14,227		)	—			(73,653		)

Cash flows from financing activities
Net borrowings under credit agreement	—			74,000			—			—			74,000
Net intercompany financing activities	86,789			(86,789		)	—			—			—
Proceeds from issuance of common units	14,586			(896		)	—			—			13,690
Contribution from general partner	120			—			—			—			120
Contribution from general partner for Osage	31,285			(31,285		)	—			—			—
Distributions to HEP unitholders	(91,109		)	—			—			—			(91,109		)
Distribution to HFC for Osage	—			(1,245		)	—			—			(1,245		)
Distributions to HFC for Tulsa tank acquisition	(30,378		)	(9,122		)	—			—			(39,500		)
Contributions from HFC for Tulsa tank expenditures	99			—			—			—			99
Distributions to noncontrolling interests	—			—			(10,000		)	7,500			(2,500		)
Purchase of units for incentive grants	(784		)	—			—			—			(784		)
Deferred financing cost	—			(3,084		)	—			—			(3,084		)
Other	—			(357		)	—			—			(357		)
	10,608			(58,778		)	(10,000		)	7,500			(50,670		)

Cash and cash equivalents
Increase (decrease) for the period	—			(5,059		)	(5,072		)	—			(10,131		)
Beginning of period	2			5,452			9,559			—			15,013
End of period	$	2		$	393		$	4,487		$	—		$	4,882

Condensed Consolidating Statement of Cash Flows



Six Months Ended June 30, 2015 ⁽¹⁾	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities	$	(9,639	)	$	111,307		$	15,358		$	(6,772	)	$	110,254

Cash flows from investing activities
Additions to properties and equipment	—			(41,559		)	(784		)	—			(42,343		)
Purchase of El Dorado crude tanks	—			(27,500		)	—			—			(27,500		)
Proceeds from sale of assets	—			965			—			—			965
Distributions from noncontrolling interest	—			1,853			—			(1,853		)	—
Distributions in excess of equity in earnings of equity investments	—			198			—			—			198
	—			(66,043		)	(784		)	(1,853		)	(68,680		)

Cash flows from financing activities
Net repayments under credit agreement	—			33,000			—			—			33,000
Net intercompany financing activities	92,498			(92,498		)	—			—			—
Contributions from HFC for El Dorado Operating acquisition	—			18,888			—			—			18,888
Distributions to HEP unitholders	(82,614		)	—			—			—			(82,614		)
Contribution from HFC for Tulsa tank expenditures	—			722			—			—			722
Distributions to noncontrolling interests	—			—			(11,500		)	8,625			(2,875		)
Purchase of units for incentive grants	(247		)	—			—			—			(247		)
Other	—			(854		)	—			—			(854		)
	9,637			(40,742		)	(11,500		)	8,625			(33,980		)

Cash and cash equivalents
Increase (decrease) for the period	(2		)	4,522			3,074			—			7,594
Beginning of period	2			2,828			—			—			2,830
End of period	$	—		$	7,350		$	3,074		$	—		$	10,424

(1) Retrospectively adjusted as described in Note 1.

Description of Business and Presentation of Financial Statements Accounting Policy Descriptions (Policies)

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

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. We are evaluating the impact of this standard.

Consolidation

In February 2015, the FASB issued a standard that modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. We adopted the new standard effective January 1, 2016. This standard had no impact on the entities we consolidate.

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.

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, we reduced net income by $0.2 million and $0.4 million for the three and six months ended June 30, 2015, respectively. This reduction had no impact on the historical earnings per unit.

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:



		June 30, 2016				December 31, 2015
Financial Instrument	Fair Value Input Level	Carrying Value		Fair Value		Carrying Value		Fair Value
		(In thousands)
Assets:
Interest rate swaps	Level 2	$	—	$	—	$	304	$	304

Liabilities:
6.5% Senior notes	Level 2	$	297,136	$	301,500	$	296,752	$	295,500
Interest rate swaps	Level 2	405		405		114		114
		$	297,541	$	301,905	$	296,866	$	295,614

Properties and Equipment (Tables)

Properties and Equipment

The carrying amounts of our properties and equipment are as follows:



	June 30, 2016		December 31, 2015 ⁽¹⁾
	(In thousands)
Pipelines, terminals and tankage	$	1,199,857	$	1,231,597
Land and right of way	65,273		66,215
Refinery assets	64,371		63,336
Construction in progress	52,759		28,249
Other	24,524		22,200
	1,406,784		1,411,597
Less accumulated depreciation	352,622		352,418
	$	1,054,162	$	1,059,179

(1) Retrospectively adjusted as described in Note 1.

Transportation Agreements (Tables)

Schedule of Finite-Lived Intangible Assets by Major Class

The carrying amounts of our transportation agreements are as follows:



	June 30, 2016		December 31, 2015
	(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	63,884		60,409
	$	70,330	$	73,805

Employees, Retirement and Incentive Plans (Tables)

Schedule of Nonvested Restricted Stock Units Activity

A summary of restricted unit activity and changes during the six months ended June 30, 2016, is presented below:



Restricted Units	Units		Weighted Average Grant-Date Fair Value
Outstanding at January 1, 2016 (nonvested)	101,408		$	33.63
Granted	10,725		24.48
Forfeited	(3,030	)	34.21
Outstanding at June 30, 2016 (nonvested)	109,103		$	32.71

Schedule of Nonvested Performance-based Units Activity

A summary of performance unit activity and changes during the six months ended June 30, 2016, is presented below:



Performance Units	Units
Outstanding at January 1, 2016 (nonvested)	45,494
Granted	10,725
Vesting and transfer of common units to recipients	(26,157	)
Forfeited	(2,679	)
Outstanding at June 30, 2016 (nonvested)	27,383

Debt (Tables)

Schedule of Long-term Debt Instruments

The carrying amounts of our long-term debt are as follows:



	June 30, 2016			December 31, 2015
	(In thousands)
Credit Agreement
Amount outstanding	$	786,000		$	712,000

6.5% Senior Notes
Principal	300,000			300,000
Unamortized discount and debt issuance costs	(2,864		)	(3,248		)
	297,136			296,752

Total long-term debt	$	1,083,136		$	1,008,752

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)
June 30, 2016
Interest rate swaps designated as cash flow hedging instrument:
Variable-to-fixed interest rate swap contracts ($150 million of LIBOR-based debt interest)	Other long-term liabilities	$	(405	)	Accumulated other comprehensive income	$	(405	)
		$	(405	)		$	(405	)

December 31, 2015
Interest rate swaps designated as cash flow hedging instrument:
Variable-to-fixed interest rate swap contract ($150 million of LIBOR-based debt interest)	Other long-term assets	$	304		Accumulated other comprehensive loss	$	304
Variable-to-fixed interest rate swap contracts ($155 million of LIBOR-based debt interest)	Other long-term liabilities	(114		)	Accumulated other comprehensive income	(114		)
		$	190			$	190

Schedule of Interest Expense and Other Debt Information

Interest expense consists of the following components:



	Six Months Ended June 30,
	2016		2015
	(In thousands)
Interest on outstanding debt:
Credit Agreement, net of interest on interest rate swaps	$	10,284	$	7,488
6.5% Senior Notes	9,757		9,757
Amortization of discount and deferred debt issuance costs	1,376		930
Commitment fees and other	679		261
Total interest incurred	22,096		18,436
Less capitalized interest	285		612
Net interest expense	$	21,811	$	17,824
Cash paid for interest	$	20,736	$	17,280

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 June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
HFC	83	%	82	%	82	%	81	%
Alon	9	%	10	%	8	%	10	%

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 June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands)
General partner interest in net income	$	540	$	185	$	953	$	431
General partner incentive distribution	12,137		9,784		23,609		19,145
Total general partner interest in net income	$	12,677	$	9,969	$	24,562	$	19,576



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Net income attributable to Holly Energy Partners	$	39,120		$	30,174		$	81,878		$	61,774
Net loss attributable to predecessors	—			227			239			430
Net Income attributable to partnership	39,120			30,401			82,117			62,204
Less: General partner’s distribution declared (including IDRs)	(13,115		)	(10,661		)	(25,536		)	(20,883		)
Limited partner’s distribution declared on common units	(34,575		)	(31,968		)	(68,302		)	(63,496		)
Distributions in excess of net income attributable to partnership	(8,570		)	(12,228		)	(11,721		)	(22,175		)

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 June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands, except per unit data)
General partner interest in distribution	$	978	$	877	$	1,927	$	1,738
General partner incentive distribution	12,137		9,784		23,609		19,145
Total general partner distribution	13,115		10,661		25,536		20,883
Limited partner distribution	34,575		31,968		68,302		63,496
Total regular quarterly cash distribution	$	47,690	$	42,629	$	93,838	$	84,379
Cash distribution per unit applicable to limited partners	$	0.5850	$	0.5450	$	1.1600	$	1.0825

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 June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(In thousands)
General partner interest in net income	$	540	$	185	$	953	$	431
General partner incentive distribution	12,137		9,784		23,609		19,145
Total general partner interest in net income	$	12,677	$	9,969	$	24,562	$	19,576



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In thousands)
Net income attributable to Holly Energy Partners	$	39,120		$	30,174		$	81,878		$	61,774
Net loss attributable to predecessors	—			227			239			430
Net Income attributable to partnership	39,120			30,401			82,117			62,204
Less: General partner’s distribution declared (including IDRs)	(13,115		)	(10,661		)	(25,536		)	(20,883		)
Limited partner’s distribution declared on common units	(34,575		)	(31,968		)	(68,302		)	(63,496		)
Distributions in excess of net income attributable to partnership	(8,570		)	(12,228		)	(11,721		)	(22,175		)

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 June 30, 2016
Net income attributable to partnership:
Distributions declared	$	13,115		$	34,575		$	47,690
Distributions in excess of net income attributable to partnership	(171		)	(8,399		)	(8,570		)
Net income attributable to partnership	$	12,944		$	26,176		$	39,120
Weighted average limited partners' units outstanding				58,865
Limited partners' per unit interest in earnings - basic and diluted				$	0.45

Three Months Ended June 30, 2015
Net income attributable to partnership:
Distributions declared	$	10,661		$	31,968		$	42,629
Distributions in excess of net income attributable to partnership	(245		)	(11,983		)	(12,228		)
Net income attributable to partnership	$	10,416		$	19,985		$	30,401
Weighted average limited partners' units outstanding				58,657
Limited partners' per unit interest in earnings - basic and diluted				$	0.34



Six Months Ended June 30, 2016
Net income attributable to partnership:
Distributions declared	$	25,536		$	68,302		$	93,838
Distributions in excess of net income attributable to partnership	(234		)	(11,487		)	(11,721		)
Net income attributable to partnership	$	25,302		$	56,815		$	82,117
Weighted average limited partners' units outstanding				58,761
Limited partners' per unit interest in earnings - basic and diluted				$	0.96

Six Months Ended June 30, 2015
Net income attributable to partnership:
Distributions declared	$	20,883		$	63,496		$	84,379
Distributions in excess of net income attributable to partnership	(444		)	(21,731		)	(22,175		)
Net income attributable to partnership	$	20,439		$	41,765		$	62,204
Weighted average limited partners' units outstanding				58,657
Limited partners' per unit interest in earnings - basic and diluted				$	0.71

Supplemental Guarantor / Non-Guarantor Financial Information (Tables)

Condensed Consolidating Balance Sheet



June 30, 2016	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2	$	393	$	4,487	$	—		$	4,882
Accounts receivable	—		44,951		5,345		(163		)	50,133
Prepaid and other current assets	86		3,284		1,268		—			4,638
Total current assets	88		48,628		11,100		(163		)	59,653

Properties and equipment, net	—		675,929		378,233		—			1,054,162
Investment in subsidiaries	598,391		286,340		—		(884,731		)	—
Transportation agreements, net	—		70,330		—		—			70,330
Goodwill	—		256,498		—		—			256,498
Equity method investments	—		165,362		—		—			165,362
Other assets	677		10,647		—		—			11,324
Total assets	$	599,156	$	1,513,734	$	389,333	$	(884,894	)	$	1,617,329

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	18,837	$	2,753	$	(163	)	$	21,427
Accrued interest	6,500		161		—		—			6,661
Deferred revenue	—		7,931		1,622		—			9,553
Accrued property taxes	—		2,205		2,969		—			5,174
Other current liabilities	11		3,263		24		—			3,298
Total current liabilities	6,511		32,397		7,368		(163		)	46,113

Long-term debt	297,136		786,000		—		—			1,083,136
Other long-term liabilities	245		16,767		178		—			17,190
Deferred revenue	—		42,474		—		—			42,474
Class B unit	—		37,705		—		—			37,705
Equity - partners	295,264		598,391		381,787		(980,178		)	295,264
Equity - noncontrolling interest	—		—		—		95,447			95,447
Total liabilities and equity	$	599,156	$	1,513,734	$	389,333	$	(884,894	)	$	1,617,329

Condensed Consolidating Balance Sheet



December 31, 2015 ⁽¹⁾	Parent		Guarantor Restricted Subsidiaries		Non-Guarantor Non-Restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2	$	5,452	$	9,559	$	—		$	15,013
Accounts receivable	—		35,558		5,715		(198		)	41,075
Prepaid and other current assets	174		3,634		1,246		—			5,054
Total current assets	176		44,644		16,520		(198		)	61,142

Properties and equipment, net	—		687,336		371,843		—			1,059,179
Investment in subsidiaries	600,563		283,287		—		(883,850		)	—
Transportation agreements, net	—		73,805		—		—			73,805
Goodwill	—		256,498		—		—			256,498
Equity method investments	—		79,438		—		—			79,438
Other assets	642		13,061		—		—			13,703
Total assets	$	601,381	$	1,438,069	$	388,363	$	(884,048	)	$	1,543,765

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	—	$	19,448	$	3,333	$	(198	)	$	22,583
Accrued interest	6,500		252		—		—			6,752
Deferred revenue	—		6,010		6,006		—			12,016
Accrued property taxes	—		2,627		1,137		—			3,764
Other current liabilities	7		3,802		—		—			3,809
Total current liabilities	6,507		32,139		10,476		(198		)	48,924

Long-term debt	296,752		712,000		—		—			1,008,752
Other long-term liabilities	210		20,363		171		—			20,744
Deferred revenue	—		39,063		—		—			39,063
Class B unit	—		33,941		—		—			33,941
Equity - partners	297,912		600,563		377,716		(978,279		)	297,912
Equity - noncontrolling interest	—		—		—		94,429			94,429
Total liabilities and equity	$	601,381	$	1,438,069	$	388,363	$	(884,048	)	$	1,543,765

(1) Retrospectively adjusted as described in Note 1.

Condensed Consolidating Statement of Comprehensive Income



Three Months Ended June 30, 2016	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	74,787		$	4,392	$	—		$	79,179
Third parties	—			11,691			4,027		—			15,718
	—			86,478			8,419		—			94,897
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			24,444			2,811		—			27,255
Depreciation and amortization				11,922			3,787		—			15,709
General and administrative	971			1,892			—		—			2,863
	971			38,258			6,598		—			45,827
Operating income (loss)	(971		)	48,220			1,821		—			49,070
Equity in earnings of subsidiaries	45,164			1,370			—		(46,534		)	—
Equity in earnings of equity method investments	—			3,623			—		—			3,623
Interest expense	(5,073		)	(6,203		)	—		—			(11,276		)
Interest income	—			107			5		—			112
Loss on sale of assets	—			(5		)	—		—			(5		)
Other income (expense)	—			5			—		—			5
	40,091			(1,103		)	5		(46,534		)	(7,541		)
Income (loss) before income taxes	39,120			47,117			1,826		(46,534		)	41,529
State income tax expense	—			(54		)	—		—			(54		)
Net income (loss)	39,120			47,063			1,826		(46,534		)	41,475
Allocation of net (income) attributable to noncontrolling interests	—			—			—		(2,355		)	(2,355		)
Net income (loss) attributable to Holly Energy Partners	39,120			47,063			1,826		(48,889		)	39,120
Other comprehensive income (loss)	(142		)	(142		)	—		142			(142		)
Comprehensive income (loss) attributable to Holly Energy Partners	$	38,978		$	46,921		$	1,826	$	(48,747	)	$	38,978

Condensed Consolidating Statement of Comprehensive Income



Three Months Ended June 30, 2015 ⁽¹⁾	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	64,727		$	3,545		$	25		$	68,297
Third parties	—			11,895			3,287			—			15,182
	—			76,622			6,832			25			83,479
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			22,222			3,153			25			25,400
Depreciation and amortization	—			11,432			3,747			—			15,179
General and administrative	637			2,059			—			—			2,696
	637			35,713			6,900			25			43,275
Operating income (loss)	(637		)	40,909			(68		)	—			40,204
Equity in earnings of subsidiaries	36,111			(88		)	—			(36,023		)	—
Equity in earnings of equity method investments	—			631			—			—			631
Interest expense	(5,073		)	(3,983		)	—			—			(9,056		)
Interest income	—			3			—			—			3
Gain on sale of assets	—			50			—			—			50
Other income (expense)	—			70			(49		)	—			21
	31,038			(3,317		)	(49		)	(36,023		)	(8,351		)
Income (loss) before income taxes	30,401			37,592			(117		)	(36,023		)	31,853
State income tax expense	—			64			—			—			64
Net income (loss)	30,401			37,656			(117		)	(36,023		)	31,917
Allocation of net (income) attributable to noncontrolling interests	—			—			—			(1,743		)	(1,743		)
Net income (loss) attributable to Holly Energy Partners	30,401			37,656			(117		)	(37,766		)	30,174
Other comprehensive income (loss)	222			222			—			(222		)	222
Comprehensive income (loss) attributable to Holly Energy Partners	$	30,623		$	37,878		$	(117	)	$	(37,988	)	$	30,396

(1) Retrospectively adjusted as described in Note 1.

Condensed Consolidating Statement of Comprehensive Income



Six Months Ended June 30, 2016	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	147,039		$	14,986	$	—		$	162,025
Third parties	—			22,423			12,459		—			34,882
	—			169,462			27,445		—			196,907
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			48,335			5,842		—			54,177
Depreciation and amortization	—			24,715			7,545		—			32,260
General and administrative	2,136			3,818			—		—			5,954
	2,136			76,868			13,387		—			92,391
Operating income (loss)	(2,136		)	92,594			14,058		—			104,516
Equity in earnings (loss) of subsidiaries	94,154			10,553			—		(104,707		)	—
Equity in earnings of equity method investments	—			6,388			—		—			6,388
Interest expense	(10,140		)	(11,671		)	—		—			(21,811		)
Interest income	—			212			12		—			224
Loss on sale of assets	—			(5		)	—		—			(5		)
Other income (expense)	—			(4		)	1		—			(3		)
	84,014			5,473			13		(104,707		)	(15,207		)
Income (loss) before income taxes	81,878			98,067			14,071		(104,707		)	89,309
State income tax expense	—			(149		)	—		—			(149		)
Net income (loss)	81,878			97,918			14,071		(104,707		)	89,160
Allocation of net income attributable to noncontrolling interests	—			—			—		(7,282		)	(7,282		)
Net income (loss) attributable to Holly Energy Partners	81,878			97,918			14,071		(111,989		)	81,878
Other comprehensive income (loss)	(595		)	(595		)	—		595			(595		)
Comprehensive income (loss)	$	81,283		$	97,323		$	14,071	$	(111,394	)	$	81,283

Condensed Consolidating Statement of Comprehensive Income



Six Months Ended June 30, 2015 ⁽¹⁾	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	127,783		$	12,769		$	—		$	140,552
Third parties	—			23,282			9,401			—			32,683
	—			151,065			22,170			—			173,235
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			47,852			5,613			—			53,465
Depreciation and amortization	—			22,498			7,479			—			29,977
General and administrative	1,700			4,286			—			—			5,986
	1,700			74,636			13,092			—			89,428
Operating income (loss)	(1,700		)	76,429			9,078			—			83,807
Equity in earnings (loss) of subsidiaries	74,044			6,772			—			(80,816		)	—
Equity in earnings of equity method investments	—			1,365			—			—			1,365
Interest expense	(10,140		)	(7,684		)	—			—			(17,824		)
Interest income	—			3			—			—			3
Gain on sale of assets	—			209			—			—			209
Other income	—			70			(49		)	—			21
	63,904			735			(49		)	(80,816		)	(16,226		)
Income (loss) before income taxes	62,204			77,164			9,029			(80,816		)	67,581
State income tax expense	—			(37		)	—			—			(37		)
Net income (loss)	62,204			77,127			9,029			(80,816		)	67,544
Allocation of net income attributable to noncontrolling interests	—			—			—			(5,770		)	(5,770		)
Net income (loss) attributable to Holly Energy Partners	62,204			77,127			9,029			(86,586		)	61,774
Other comprehensive income (loss)	(527		)	(527		)	—			527			(527		)
Comprehensive income (loss)	$	61,677		$	76,600		$	9,029		$	(86,059	)	$	61,247

(1) Retrospectively adjusted as described in Note 1.

Condensed Consolidating Statement of Cash Flows



Six Months Ended June 30, 2016	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities	$	(10,608	)	$	113,145		$	19,155		$	(7,500	)	$	114,192

Cash flows from investing activities
Additions to properties and equipment	—			(18,440		)	(14,227		)	—			(32,667		)
Purchase of investment in Frontier Pipeline	—			(42,500		)	—			—			(42,500		)
Proceeds from sale of assets	—			18			—			—			18
Distributions in excess of equity in earnings of equity investments	—			1,496			—			—			1,496
	—			(59,426		)	(14,227		)	—			(73,653		)

Cash flows from financing activities
Net borrowings under credit agreement	—			74,000			—			—			74,000
Net intercompany financing activities	86,789			(86,789		)	—			—			—
Proceeds from issuance of common units	14,586			(896		)	—			—			13,690
Contribution from general partner	120			—			—			—			120
Contribution from general partner for Osage	31,285			(31,285		)	—			—			—
Distributions to HEP unitholders	(91,109		)	—			—			—			(91,109		)
Distribution to HFC for Osage	—			(1,245		)	—			—			(1,245		)
Distributions to HFC for Tulsa tank acquisition	(30,378		)	(9,122		)	—			—			(39,500		)
Contributions from HFC for Tulsa tank expenditures	99			—			—			—			99
Distributions to noncontrolling interests	—			—			(10,000		)	7,500			(2,500		)
Purchase of units for incentive grants	(784		)	—			—			—			(784		)
Deferred financing cost	—			(3,084		)	—			—			(3,084		)
Other	—			(357		)	—			—			(357		)
	10,608			(58,778		)	(10,000		)	7,500			(50,670		)

Cash and cash equivalents
Increase (decrease) for the period	—			(5,059		)	(5,072		)	—			(10,131		)
Beginning of period	2			5,452			9,559			—			15,013
End of period	$	2		$	393		$	4,487		$	—		$	4,882

Condensed Consolidating Statement of Cash Flows



Six Months Ended June 30, 2015 ⁽¹⁾	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Cash flows from operating activities	$	(9,639	)	$	111,307		$	15,358		$	(6,772	)	$	110,254

Cash flows from investing activities
Additions to properties and equipment	—			(41,559		)	(784		)	—			(42,343		)
Purchase of El Dorado crude tanks	—			(27,500		)	—			—			(27,500		)
Proceeds from sale of assets	—			965			—			—			965
Distributions from noncontrolling interest	—			1,853			—			(1,853		)	—
Distributions in excess of equity in earnings of equity investments	—			198			—			—			198
	—			(66,043		)	(784		)	(1,853		)	(68,680		)

Cash flows from financing activities
Net repayments under credit agreement	—			33,000			—			—			33,000
Net intercompany financing activities	92,498			(92,498		)	—			—			—
Contributions from HFC for El Dorado Operating acquisition	—			18,888			—			—			18,888
Distributions to HEP unitholders	(82,614		)	—			—			—			(82,614		)
Contribution from HFC for Tulsa tank expenditures	—			722			—			—			722
Distributions to noncontrolling interests	—			—			(11,500		)	8,625			(2,875		)
Purchase of units for incentive grants	(247		)	—			—			—			(247		)
Other	—			(854		)	—			—			(854		)
	9,637			(40,742		)	(11,500		)	8,625			(33,980		)

Cash and cash equivalents
Increase (decrease) for the period	(2		)	4,522			3,074			—			7,594
Beginning of period	2			2,828			—			—			2,830
End of period	$	—		$	7,350		$	3,074		$	—		$	10,424

(1) Retrospectively adjusted as described in Note 1.

Description of Business and Presentation of Financial Statements (Details) (USD $)

6 Months Ended

2 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Mar. 31, 2016

Jun. 30, 2016

SLC Pipeline [Member]

Jun. 30, 2016

UNEV Pipeline [Member]

Jun. 30, 2016

Frontier Pipeline [Member]

Mar. 31, 2016

Osage Pipeline [Member] [Member]

Jun. 30, 2015

Shareholders' Equity [Member]

Jun. 30, 2015

Property Plant and Equipment Acquired [Member]

Jun. 30, 2015

Liability [Member]

Dec. 31, 2015

El Dorado [Member]

Jun. 30, 2016

El Dorado [Member]

Mar. 31, 2016

Osage Pipeline [Member] [Member]

Mar. 31, 2016

Tulsa Tanks [Member]

Jun. 30, 2015

Tulsa Tanks [Member]

Jun. 30, 2015

Tulsa Tanks [Member]

Jun. 30, 2016

Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]

Other Ownership Interests [Line Items]

Ownership percentage, controlling interest

39.00%

General partner interest

2.00%

Equity Method Investment, Ownership Percentage

25.00%

75.00%

50.00%

Debt Instrument, Face Amount

$ 400,000,000

Debt Instrument, Interest Rate, Stated Percentage

6.00%

Common Unit Issuance Program

200,000,000

Payments to Acquire Equity Method Investments

(42,500,000)

0

El Dorado crude tanks, Plains acquisition

39,500,000

Business Acquisition, Pro Forma Net Income (Loss)

200,000

400,000

Business Combination, Consideration Transferred

9,200,000

9,300,000

100,000

44,500,000

Equity Method Investment, Difference Between Carrying Amount and Underlying Equity

33,100,000

Equity Method Investment, Underlying Equity in Net Assets

12,100,000

Distributions to HFC for Tulsa Tanks

(32,667,000)

(42,343,000)¹

(62,000,000)

Purchase Obligation Minimum Annualized Payment

15,300,000

Contributions from HFC for El Dorado Operating acquisition

$ 0

$ 18,888,000 ¹

[1] Retrospectively adjusted as described in Note 1.

Financial Instruments (Narrative) (Details) (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Fair value inputs, Level 2 [Member]

Debt Instrument [Line Items]

Financial Liabilities Fair Value Disclosure

$ 301,905

$ 295,614

Interest Rate Swap [Member] |
Fair value inputs, Level 2 [Member]

Debt Instrument [Line Items]

Assets, Fair Value Disclosure

0

304

Financial Liabilities Fair Value Disclosure

405

114

6.5% Senior Notes [Member] |
Fair value inputs, Level 2 [Member]

Debt Instrument [Line Items]

Financial Liabilities Fair Value Disclosure

301,500

295,500

Carrying Amount [Member]

Debt Instrument [Line Items]

Financial Liabilities Fair Value Disclosure

297,541

296,866

Carrying Amount [Member] |
Interest Rate Swap [Member]

Debt Instrument [Line Items]

Assets, Fair Value Disclosure

0

304

Financial Liabilities Fair Value Disclosure

405

114

Carrying Amount [Member] |
6.5% Senior Notes [Member]

Debt Instrument [Line Items]

Financial Liabilities Fair Value Disclosure

$ 297,136

$ 296,752

Properties and Equipment (Details) (USD $)

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Property, Plant and Equipment [Line Items]

Properties and equipment, gross

$ 1,406,784,000

$ 1,411,597,000

Less accumulated depreciation

352,622,000

352,418,000

Properties and equipment, net

1,054,162,000

1,059,179,000 ¹

Interest costs, capitalized during period

(285,000)

(612,000)

Depreciation expense

28,500,000

26,200,000

Pipelines and terminals [Member]

Property, Plant and Equipment [Line Items]

Properties and equipment, gross

1,199,857,000

1,231,597,000

Land and right of way [Member]

Property, Plant and Equipment [Line Items]

Properties and equipment, gross

65,273,000

66,215,000

Refinery assets [Member]

Property, Plant and Equipment [Line Items]

Properties and equipment, gross

64,371,000

63,336,000

Construction in progress [Member]

Property, Plant and Equipment [Line Items]

Properties and equipment, gross

52,759,000

28,249,000

Other Fixed Assets [Member]

Property, Plant and Equipment [Line Items]

Properties and equipment, gross

$ 24,524,000

$ 22,200,000

[1] Retrospectively adjusted as described in Note 1.

Transportation Agreements (Details) (USD $)

6 Months Ended

3 Months Ended

Jun. 30, 2016

Dec. 31, 2015

Jun. 30, 2016

Alon transportation agreement

Y

Dec. 31, 2015

Alon transportation agreement

Jun. 30, 2016

HFC transportation agreement

Dec. 31, 2015

HFC transportation agreement

Jun. 30, 2016

Other [Member]

Dec. 31, 2015

Other [Member]

Finite-Lived Intangible Assets [Line Items]

Finite-Lived Intangible Assets, Useful Life (years)

30 years

15 years

Finite-Lived Intangible Assets, Useful Life, Initial Term (years)

15

Finite-Lived Intangible Assets, Useful Life, Extension Period (years)

15

Amortization of Intangible Assets

$ 3,500,000

Finite-Lived Intangible Assets, Net [Abstract]

Transportation agreements, gross

134,214,000

59,933,000

74,231,000

50,000

Less accumulated amortization

63,884,000

60,409,000

Transportation agreements, net

$ 70,330,000

$ 73,805,000

Employees, Retirement and Incentive Plans Retirement and Benefit Plan Costs (Details) (USD $)

In Millions, except Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Types

Jun. 30, 2015

Jun. 30, 2016

Components

Types

Jun. 30, 2015

Share-based Compensation Arrangements

Employee benefits and share-based compensation

$ 1.3

$ 1.7

$ 2.9

$ 3.1

Long-term incentive plan, components

4

Equity-based compensation, types

2

Compensation costs of incentive awards

$ 0.5

$ 0.9

$ 1.2

$ 1.6

Deferred Bonus [Member]

Share-based Compensation Arrangements

Units authorized under equity-based compensation plans (new)

2,500,000

Number of units available for grant

1,487,498

Employees, Retirement and Incentive Plans Restricted Units (Details) (USD $)

In Millions, except Share data, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Dec. 31, 2015

Restricted Stock [Member] |
Minimum [Member]

Share-based Compensation Arrangements

Award vesting period

1 year

Restricted Stock [Member] |
Maximum [Member]

Share-based Compensation Arrangements

Award vesting period

3 years

Restricted Stock Units (RSUs) [Member]

Share-based Compensation Arrangements

Nonvested restricted units outstanding

109,103

101,408

Weighted average grant date fair value

$ 32.71

$ 33.63

Share-based Compensation Arrangements, Grants

10,725

Weighted Average Grant Date Fair Value

$ 24.48

Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Forfeitures

(3,030)

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value

$ 34.21

Total unrecognized compensation related to nonvested units

$ 1.6

Weighted average remaining contractual term (years)

1 year 1 month

Employees, Retirement and Incentive Plans Performance Units (Details) (USD $)

In Millions, except Share data, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Share-based Compensation Arrangement Instruments [Roll Forward]

Vested and Expected to Vest Shares Outstanding, Aggregate Intrinsic Value

$ 0.8

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, 2016 (nonvested)

45,494

Share-based Compensation Arrangements, Grants

10,725

Vesting and transfer of full ownership to recipients

(26,157)

Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period

(2,679)

Outstanding at June 30, 2016 (nonvested)

27,383

Fair value of vested units transferred to recipients

1.1

Total unrecognized compensation related to nonvested units

0.6

Weighted average remaining contractual term (years)

2 years 5 months

Restricted Stock Units (RSUs) [Member]

Share-based Compensation Arrangement Instruments [Roll Forward]

Outstanding at January 1, 2016 (nonvested)

101,408

Share-based Compensation Arrangements, Grants

10,725

Outstanding at June 30, 2016 (nonvested)

109,103

Total unrecognized compensation related to nonvested units

$ 1.6

Weighted average remaining contractual term (years)

1 year 1 month

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 $)

Mar. 31, 2016

Dec. 31, 2015

Jun. 30, 2016

6.5% Senior Notes [Member]

Dec. 31, 2015

6.5% Senior Notes [Member]

Jun. 30, 2016

Six Percent Senior Notes Due Two Thousand Twenty Four [Member] [Member]

Mar. 31, 2016

Letter of Credit [Member]

Debt Instrument [Line Items]

Line of Credit Facility, Maximum Borrowing Capacity

$ 1,200,000,000

$ 850,000,000

$ 50,000,000

Principal

$ 300,000,000

$ 400,000,000

Stated interest rate, senior notes

6.50%

6.00%

Debt Long-Term Debt (Details) (USD $)

Jun. 30, 2016

Mar. 31, 2016

Dec. 31, 2015

Debt Instrument [Line Items]

Line of Credit Facility, Maximum Borrowing Capacity

$ 1,200,000,000

$ 850,000,000

Credit Agreement

786,000,000

712,000,000

Total long-term debt

1,083,136,000

1,008,752,000

6.5% Senior Notes [Member]

Debt Instrument [Line Items]

Principal

300,000,000

Unamortized discount

(2,864,000)

(3,248,000)

Senior Notes

297,136,000

296,752,000

Credit Agreement [Member]

Debt Instrument [Line Items]

Line of Credit Facility, Maximum Borrowing Capacity

$ 50,000,000

Debt Interest Rate Risk Management (Details) (USD $)

6 Months Ended

3 Months Ended

Jun. 30, 2016

Dec. 31, 2015

Jun. 30, 2016

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Mar. 31, 2016

Interest Rate Swap [Member]

Cash Flow Hedging, Added 2012 [Member]

Jun. 30, 2016

Interest Rate Swap [Member]

Cash Flow Hedging, Added 2012 [Member]

Jun. 30, 2016

London Interbank Offered Rate (LIBOR) [Member]

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Dec. 31, 2014

London Interbank Offered Rate (LIBOR) [Member]

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Jun. 30, 2016

London Interbank Offered Rate (LIBOR) [Member]

Interest Rate Swap [Member]

Cash Flow Hedging, Added 2012 [Member]

Jun. 30, 2016

London Interbank Offered Rate (LIBOR) [Member]

Other Liabilities [Member]

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Dec. 31, 2015

London Interbank Offered Rate (LIBOR) [Member]

Other Liabilities [Member]

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Dec. 31, 2015

London Interbank Offered Rate (LIBOR) [Member]

Other Assets [Member]

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Jun. 30, 2016

London Interbank Offered Rate (LIBOR) [Member]

Accumulated Other Comprehensive Income (Loss) [Member]

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Dec. 31, 2015

London Interbank Offered Rate (LIBOR) [Member]

Accumulated Other Comprehensive Income (Loss) [Member]

Interest Rate Swap [Member]

Cash Flow Hedging [Member]

Debt Instrument [Line Items]

Line of credit facility, amount outstanding

$ 786,000,000

$ 712,000,000

$ 150,000,000

$ 0

$ 150,000,000

Long-term debt, fixed interest rate

0.74%

Debt instrument, basis spread on variable rate

2.25%

Debt instrument, effective interest rate

2.99%

Accumulated Other Comprehensive Income (Loss), Net of Tax

(405,000)

190,000

400,000

Derivative Instruments and Hedges, Assets

405,000

Derivative liabilities, fair value

405,000

114,000

405,000

114,000

Derivative Asset

304,000

Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months

400,000

Derivative Instruments and Hedges, Liabilities

$ 405,000

$ 190,000

Debt Interest Expense and Other Debt Information (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Debt Instrument [Line Items]

Interest expense, debt

$ 22,096

$ 18,436

Less capitalized interest

285

612

Interest expense

11,276

9,056

21,811

17,824

Cash paid for interest

20,736

17,280

Revolving Credit Facility [Member]

Debt Instrument [Line Items]

Interest expense, debt

10,284

7,488

Senior Notes [Member] |
6.5% Senior Notes [Member]

Debt Instrument [Line Items]

Interest expense, debt

9,757

Amortization discount and deferred debt issuance costs [Member]

Debt Instrument [Line Items]

Interest expense, debt

1,376

930

Commitment Fees and Other [Member]

Debt Instrument [Line Items]

Interest expense, debt

$ 679

$ 261

Debt Debt Capital Leases (Details) (USD $)

In Millions, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Debt Capital Leases [Abstract]

Capital Lease Obligations

$ 3.0

$ 1.8

Capital Leased Assets, Gross

4.6

3.0

Capital Leases Accumulated Depreciation

$ 1.6

$ 1.1

Significant Customers (Details) (Sales Revenue, Net [Member])

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Revenue, Major Customer [Line Items]

Concentration risk, percentage of total sales

92.00%

Concentration risk, number of significant customers

2

HFC [Member]

Revenue, Major Customer [Line Items]

Concentration risk, percentage of total sales

83.00%

82.00%

81.00%

Alon [Member]

Revenue, Major Customer [Line Items]

Concentration risk, percentage of total sales

9.00%

10.00%

8.00%

10.00%

Related Party Transactions (Narrative) (Details) (USD $)

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Jun. 30, 2016

Affiliated Entity [Member]

Jun. 30, 2015

Affiliated Entity [Member]

Jun. 30, 2016

Affiliated Entity [Member]

Jun. 30, 2015

Affiliated Entity [Member]

Dec. 31, 2015

Shortfall Payments [Member]

Jun. 30, 2016

Shortfall Payments [Member]

Jun. 30, 2015

Shortfall Payments [Member]

Mar. 31, 2016

Osage Pipeline [Member] [Member]

Mar. 31, 2016

Tulsa Tanks [Member]

Related Party Transaction [Line Items]

Other Commitments, Future Minimum Payments, Remainder of Fiscal Year

$ 261,400,000

Administrative Fee, Related Party

2,500,000

Omnibus Agreement G & A Expenses, Related Party

600,000

1,200,000

Revenue from related parties

79,179,000

68,297,000

162,025,000

140,552,000

Employee expenses reimbursed to related party

9,500,000

7,500,000

19,400,000

16,200,000

Reimbursements received from related parties

5,000,000

4,400,000

6,700,000

7,000,000

Distributions to HEP unitholders

25,300,000

22,300,000

49,800,000

43,900,000

Accounts receivable due from HFC

42,800,000

32,500,000

Accounts payable to HFC

9,182,000

11,635,000

Shortfall Payments, Revenue Recognized

5,500,000

6,000,000

Shortfall Billings Deferred Revenue

6,400,000

3,200,000

Equity Method Investment, Ownership Percentage

50.00%

El Dorado crude tanks, Plains acquisition

$ 39,500,000

Partners' Equity, Issuances (Details) (USD $)

In Millions, except Share data, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Partners' Capital [Abstract]

Common units held by HFC

22,380,030

General partner ownership interest

2.00%

Ownership percentage, controlling interest

39.00%

Common Unit Issuance Program

$ 200

Common unit issuance program, units authorized

444,799

Gross Proceeds from Issuance of Common Units

14.9

Accrued Sales Commission

0.3

Contribution from HFC

$ 0.3

Partners' Equity, Allocations of Net Income (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Partners' Capital [Abstract]

General Partner Interest in Net Income

$ 540

$ 185

$ 953

$ 431

General partner incentive distribution

12,137

9,784

23,609

19,145

General partner interest in net income attributable to HEP

$ 12,677

$ 9,969 ¹

$ 24,562

$ 19,576 ¹

[1] Retrospectively adjusted as described in Note 1.

Partners' Equity, Cash Distributions (Details) (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Partners' Capital [Abstract]

Dividends Payable, Date Declared

Jul. 22, 2016

Dividends Payable, Date of Record

Aug. 01, 2016

Dividends Payable, Date to be Paid

Aug. 12, 2016

Allocations of Quarterly Cash Distributions to General and Limited Partners

Partners' Capital, Distribution Amount Per Share

$ 0.585

Partner Distributions

General partner interest

$ 978

$ 877

$ 1,927

$ 1,738

General partner incentive distribution

12,137

9,784

23,609

19,145

Total general partner distribution

13,115

10,661

25,536

20,883

Limited partner distribution

34,575

31,968

68,302

63,496

Quarterly Cash Distributions

$ 47,690

$ 42,629

$ 93,838

$ 84,379

Cash distribution per unit applicable to limited partners

$ 0.5850

$ 0.5450

$ 1.1600

$ 1.0825

Net Income per Limited Partner Unit (Details) (USD $)

In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Earnings per Unit by Type of Partner [Line Items]

Net Income (Loss) Attributable to Parent

$ 39,120

$ 30,174

$ 81,878

$ 61,774

Net (Income) Loss Attributable to Predecessor

0

227

239

430

General Partners' Capital Account, Period Distribution Amount

(13,115)

(10,661)

(25,536)

(20,883)

Limited partner distribution

(34,575)

(31,968)

(68,302)

(63,496)

Partners Distributions

47,690

42,629

93,838

84,379

Distributions in Excess of Period Net Income

(8,570)

(12,228)

(11,721)

(22,175)

Net (Income) Loss Attributable to Partnership

39,120

30,401

82,117

62,204

Weighted average limited partners’ units outstanding

58,865

58,657

58,761

58,657

Limited partners’ per unit interest in earnings—basic and diluted:

$ 0.45

$ 0.34

$ 0.96

$ 0.71

General Partner [Member]

Earnings per Unit by Type of Partner [Line Items]

Distributions in Excess of Period Net Income

(171)

(245)

(234)

(444)

Net (Income) Loss Attributable to Partnership

12,944

10,416

25,302

20,439

Limited Partner [Member]

Earnings per Unit by Type of Partner [Line Items]

Distributions in Excess of Period Net Income

(8,399)

(11,983)

(11,487)

(21,731)

Net (Income) Loss Attributable to Partnership

$ 26,176

$ 19,985

$ 56,815

$ 41,765

Environmental Environmental (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Dec. 31, 2015

Loss Contingencies [Line Items]

Environmental Remediation Expense

$ 0.2

$ 4.2

Accrued Environmental Expense

7.2

7.7

Accrued Environmental Expense, Noncurrent

5.7

6.1

Affiliated Entity [Member]

Loss Contingencies [Line Items]

Accrued Environmental Expense

$ 0.9

$ 6.4

Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidated Balance Sheet (Details) (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2016

Dec. 31, 2015

Jun. 30, 2015

Dec. 31, 2014

Current assets:

Cash and cash equivalents

$ 4,882

$ 15,013

$ 10,424

$ 2,830

Accounts receivable

50,133

41,075

Prepaid and other current assets

4,638

5,054

Total current assets

59,653

61,142

Properties and equipment, net

1,054,162

1,059,179 ¹

Investment in subsidiaries

0

Transportation agreements, net

70,330

73,805

Goodwill

256,498

Equity method investments

165,362

79,438

Other assets

11,324

13,703

Total assets

1,617,329

1,543,765 ¹

Current liabilities:

Accounts payable

21,427

22,583

Accrued interest

6,661

6,752

Deferred revenue

9,553

12,016

Accrued property taxes

5,174

3,764

Other current liabilities

3,298

3,809

Total current liabilities

46,113

48,924

Long-term debt

1,083,136

1,008,752

Other long-term liabilities

17,190

20,744

Deferred revenue

42,474

39,063

Class B unit

37,705

33,941

Partners' Capital

295,264

297,912 ¹

Equity - noncontrolling interest

95,447

94,429

Total liabilities and equity

1,617,329

1,543,765 ¹

Parent Company [Member]

Current assets:

Cash and cash equivalents

2

0

2

Accounts receivable

0

Prepaid and other current assets

86

174

Total current assets

88

176

Properties and equipment, net

0

Investment in subsidiaries

598,391

600,563

Transportation agreements, net

0

Goodwill

0

Equity method investments

0

Other assets

677

642

Total assets

599,156

601,381

Current liabilities:

Accounts payable

0

Accrued interest

6,500

Deferred revenue

0

Accrued property taxes

0

Other current liabilities

11

7

Total current liabilities

6,511

6,507

Long-term debt

297,136

296,752

Other long-term liabilities

245

210

Deferred revenue

0

Class B unit

0

Partners' Capital

295,264

297,912

Equity - noncontrolling interest

0

Total liabilities and equity

599,156

601,381

Guarantor Subsidiaries [Member]

Current assets:

Cash and cash equivalents

393

5,452

7,350

2,828

Accounts receivable

44,951

35,558

Prepaid and other current assets

3,284

3,634

Total current assets

48,628

44,644

Properties and equipment, net

675,929

687,336

Investment in subsidiaries

286,340

283,287

Transportation agreements, net

70,330

73,805

Goodwill

256,498

Equity method investments

165,362

79,438

Other assets

10,647

13,061

Total assets

1,513,734

1,438,069

Current liabilities:

Accounts payable

18,837

19,448

Accrued interest

161

252

Deferred revenue

7,931

6,010

Accrued property taxes

2,205

2,627

Other current liabilities

3,263

3,802

Total current liabilities

32,397

32,139

Long-term debt

786,000

712,000

Other long-term liabilities

16,767

20,363

Deferred revenue

42,474

39,063

Class B unit

37,705

33,941

Partners' Capital

598,391

600,563

Equity - noncontrolling interest

0

Total liabilities and equity

1,513,734

1,438,069

Non-Guarantor Subsidiaries [Member]

Current assets:

Cash and cash equivalents

4,487

9,559

3,074

0

Accounts receivable

5,345

5,715

Prepaid and other current assets

1,268

1,246

Total current assets

11,100

16,520

Properties and equipment, net

378,233

371,843

Investment in subsidiaries

0

Transportation agreements, net

0

Goodwill

0

Equity method investments

0

Other assets

0

Total assets

389,333

388,363

Current liabilities:

Accounts payable

2,753

3,333

Accrued interest

0

Deferred revenue

1,622

6,006

Accrued property taxes

2,969

1,137

Other current liabilities

24

0

Total current liabilities

7,368

10,476

Long-term debt

0

Other long-term liabilities

178

171

Deferred revenue

0

Class B unit

0

Partners' Capital

381,787

377,716

Equity - noncontrolling interest

0

Total liabilities and equity

389,333

388,363

Eliminations [Member]

Current assets:

Cash and cash equivalents

0

Accounts receivable

(163)

(198)

Prepaid and other current assets

0

Total current assets

(163)

(198)

Properties and equipment, net

0

Investment in subsidiaries

(884,731)

(883,850)

Transportation agreements, net

0

Goodwill

0

Equity method investments

0

Other assets

0

Total assets

(884,894)

(884,048)

Current liabilities:

Accounts payable

(163)

(198)

Accrued interest

0

Deferred revenue

0

Accrued property taxes

0

Other current liabilities

0

Total current liabilities

(163)

(198)

Long-term debt

0

Other long-term liabilities

0

Deferred revenue

0

Class B unit

0

Partners' Capital

(980,178)

(978,279)

Equity - noncontrolling interest

95,447

94,429

Total liabilities and equity

$ (884,894)

$ (884,048)

[1] Retrospectively adjusted as described in Note 1.

Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidating Statement of Comprehensive Income (Details) (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

$ 114,192

$ 110,254

Revenues [Abstract]

Affiliates

79,179

68,297

162,025

140,552

Third parties

15,718

15,182

34,882

32,683

Total revenues

94,897

83,479

196,907

173,235

Operating costs and expenses [Abstract]

Operations (exclusive of depreciation and amortization)

27,255

25,400 ¹

54,177

53,465 ¹

Depreciation and amortization

15,709

15,179 ¹

32,260

29,977 ¹

General and administrative

2,863

2,696

5,954

5,986

Total operating costs and expenses

45,827

43,275 ¹

92,391

89,428 ¹

Operating income

49,070

40,204 ¹

104,516

83,807 ¹

Equity in Earnings (Loss) of Subsidiaries

0

Equity in Earnings of Equity Method Investments

3,623

631

6,388

1,365

Interest expense

(11,276)

(9,056)

(21,811)

(17,824)

Interest income

112

3

224

3

Gain (Loss) on Sale of Assets

(5)

50

(5)

209

Other (income) expense

(5)

(21)

3

(21)

Nonoperating Income (Expense)

(7,541)

(8,351)

(15,207)

(16,226)

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest

41,529

31,853 ¹

89,309

67,581 ¹

State income tax (expense) benefit

(54)

64

(149)

(37)

Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest

41,475

31,917 ¹

89,160

67,544 ¹

Allocation of Net Income Attributable to Noncontrolling Interest

(2,355)

(1,743)

(7,282)

(5,770)

Net Income (Loss) Attributable to Parent

39,120

30,174

81,878

61,774

Other comprehensive income (loss)

(142)

222

(595)

(527)

Comprehensive Income (Loss), Net of Tax, Attributable to Parent

38,978

30,396 ¹

81,283

61,247 ¹

Equity Method Investments [Member]

Operating costs and expenses [Abstract]

Equity in Earnings of Equity Method Investments

3,623

631

6,388

1,365

Parent Company [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

(10,608)

(9,639)

Revenues [Abstract]

Affiliates

0

Third parties

0

Total revenues

0

Operating costs and expenses [Abstract]

Operations (exclusive of depreciation and amortization)

0

Depreciation and amortization

0

General and administrative

971

637

2,136

1,700

Total operating costs and expenses

971

637

2,136

1,700

Operating income

(971)

(637)

(2,136)

(1,700)

Equity in Earnings (Loss) of Subsidiaries

45,164

36,111

94,154

74,044

Interest expense

(5,073)

(10,140)

Interest income

0

Gain (Loss) on Sale of Assets

0

Other (income) expense

0

Nonoperating Income (Expense)

40,091

31,038

84,014

63,904

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest

39,120

30,401

81,878

62,204

State income tax (expense) benefit

0

Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest

39,120

30,401

81,878

62,204

Allocation of Net Income Attributable to Noncontrolling Interest

0

Net Income (Loss) Attributable to Parent

39,120

30,401

81,878

62,204

Other comprehensive income (loss)

(142)

222

(595)

(527)

Comprehensive Income (Loss), Net of Tax, Attributable to Parent

38,978

30,623

81,283

61,677

Parent Company [Member] |
Equity Method Investments [Member]

Operating costs and expenses [Abstract]

Equity in Earnings of Equity Method Investments

0

Guarantor Subsidiaries [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

113,145

111,307

Revenues [Abstract]

Affiliates

74,787

64,727

147,039

127,783

Third parties

11,691

11,895

22,423

23,282

Total revenues

86,478

76,622

169,462

151,065

Operating costs and expenses [Abstract]

Operations (exclusive of depreciation and amortization)

24,444

22,222

48,335

47,852

Depreciation and amortization

11,922

11,432

24,715

22,498

General and administrative

1,892

2,059

3,818

4,286

Total operating costs and expenses

38,258

35,713

76,868

74,636

Operating income

48,220

40,909

92,594

76,429

Equity in Earnings (Loss) of Subsidiaries

1,370

(88)

10,553

6,772

Interest expense

(6,203)

(3,983)

(11,671)

(7,684)

Interest income

107

3

212

3

Gain (Loss) on Sale of Assets

(5)

50

(5)

209

Other (income) expense

(5)

(70)

4

(70)

Nonoperating Income (Expense)

(1,103)

(3,317)

5,473

735

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest

47,117

37,592

98,067

77,164

State income tax (expense) benefit

(54)

64

(149)

(37)

Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest

47,063

37,656

97,918

77,127

Allocation of Net Income Attributable to Noncontrolling Interest

0

Net Income (Loss) Attributable to Parent

47,063

37,656

97,918

77,127

Other comprehensive income (loss)

(142)

222

(595)

(527)

Comprehensive Income (Loss), Net of Tax, Attributable to Parent

46,921

37,878

97,323

76,600

Guarantor Subsidiaries [Member] |
Equity Method Investments [Member]

Operating costs and expenses [Abstract]

Equity in Earnings of Equity Method Investments

3,623

631

6,388

1,365

Non-Guarantor Subsidiaries [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

19,155

15,358

Revenues [Abstract]

Affiliates

4,392

3,545

14,986

12,769

Third parties

4,027

3,287

12,459

9,401

Total revenues

8,419

6,832

27,445

22,170

Operating costs and expenses [Abstract]

Operations (exclusive of depreciation and amortization)

2,811

3,153

5,842

5,613

Depreciation and amortization

3,787

3,747

7,545

7,479

General and administrative

0

Total operating costs and expenses

6,598

6,900

13,387

13,092

Operating income

1,821

(68)

14,058

9,078

Equity in Earnings (Loss) of Subsidiaries

0

Interest expense

0

Interest income

5

0

12

0

Gain (Loss) on Sale of Assets

0

Other (income) expense

0

49

(1)

49

Nonoperating Income (Expense)

5

(49)

13

(49)

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest

1,826

(117)

14,071

9,029

State income tax (expense) benefit

0

Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest

1,826

(117)

14,071

9,029

Allocation of Net Income Attributable to Noncontrolling Interest

0

Net Income (Loss) Attributable to Parent

1,826

(117)

14,071

9,029

Other comprehensive income (loss)

0

Comprehensive Income (Loss), Net of Tax, Attributable to Parent

1,826

(117)

14,071

9,029

Non-Guarantor Subsidiaries [Member] |
Equity Method Investments [Member]

Operating costs and expenses [Abstract]

Equity in Earnings of Equity Method Investments

0

Eliminations [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

(7,500)

(6,772)

Revenues [Abstract]

Affiliates

0

25

0

Third parties

0

Total revenues

0

25

0

Operating costs and expenses [Abstract]

Operations (exclusive of depreciation and amortization)

0

25

0

Depreciation and amortization

0

General and administrative

0

Total operating costs and expenses

0

25

0

Operating income

0

Equity in Earnings (Loss) of Subsidiaries

(46,534)

(36,023)

(104,707)

(80,816)

Interest expense

0

Interest income

0

Gain (Loss) on Sale of Assets

0

Other (income) expense

0

Nonoperating Income (Expense)

(46,534)

(36,023)

(104,707)

(80,816)

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest

(46,534)

(36,023)

(104,707)

(80,816)

State income tax (expense) benefit

0

Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest

(46,534)

(36,023)

(104,707)

(80,816)

Allocation of Net Income Attributable to Noncontrolling Interest

(2,355)

(1,743)

(7,282)

(5,770)

Net Income (Loss) Attributable to Parent

(48,889)

(37,766)

(111,989)

(86,586)

Other comprehensive income (loss)

142

(222)

595

527

Comprehensive Income (Loss), Net of Tax, Attributable to Parent

(48,747)

(37,988)

(111,394)

(86,059)

Eliminations [Member] |
Equity Method Investments [Member]

Operating costs and expenses [Abstract]

Equity in Earnings of Equity Method Investments

$ 0

[1] Retrospectively adjusted as described in Note 1.

Supplemental Guarantor / Non-Guarantor Financial Information Condensed Consolidating Statement of Cash Flows (Details) (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2016

Jun. 30, 2015

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

$ 114,192

$ 110,254

Cash flows from investing activities

Distributions to HFC for Tulsa Tanks

(32,667)

(42,343)¹

Purchase of El Dorado crude tanks

0

(27,500)

Purchase of interest in Cheyenne Pipeline

(42,500)

0

Proceeds from sale of assets

18

965

Proceeds from Noncontrolling Interests

1,496

0

Distributions in excess of earnings of equity method investments

198

Net cash used for investing activities

(73,653)

(68,680)

Cash flows from financing activities

Net borrowings under credit agreement

74,000

33,000

Net intercompany financing activities

0

Proceeds from Issuance of Common Stock

13,690

Contributions from General Partner

120

0

Contributions from HFC for El Dorado Operating acquisition

0

18,888 ¹

Contribution from HFC for Osage transaction

31,285

Proceeds from Issuance of Common Units

13,690

0

Distributions to HEP unitholders

(91,109)

(82,614)

Distribution to HFC for Osage

(1,245)

0

Distribution to HFC for Tulsa Tank Acquisition

(39,500)

0

Contributions from HFC for Tulsa Tank expenditures

99

722 ¹

Distributions to noncontrolling interests

(2,500)

(2,875)

Purchase of units for incentive grants

(784)

(247)

Deferred financing costs

(3,084)

0

Other

(357)

(854)

Net cash used for financing activities

(50,670)

(33,980)

Increase (decrease) for the period

(10,131)

7,594

Beginning of period

15,013

2,830

End of period

4,882

10,424

Parent Company [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

(10,608)

(9,639)

Cash flows from investing activities

Distributions to HFC for Tulsa Tanks

0

Purchase of El Dorado crude tanks

0

Purchase of interest in Cheyenne Pipeline

0

Proceeds from sale of assets

0

Proceeds from Noncontrolling Interests

0

Distributions in excess of earnings of equity method investments

0

Net cash used for investing activities

0

Cash flows from financing activities

Net borrowings under credit agreement

0

Net intercompany financing activities

86,789

92,498

Proceeds from Issuance of Common Stock

14,586

Contributions from General Partner

120

Contributions from HFC for El Dorado Operating acquisition

0

Contribution from HFC for Osage transaction

31,285

Distributions to HEP unitholders

(91,109)

(82,614)

Distribution to HFC for Osage

0

Distribution to HFC for Tulsa Tank Acquisition

(30,378)

Contributions from HFC for Tulsa Tank expenditures

99

0

Distributions to noncontrolling interests

0

Purchase of units for incentive grants

(784)

(247)

Deferred financing costs

0

Other

0

Net cash used for financing activities

10,608

9,637

Increase (decrease) for the period

0

(2)

Beginning of period

2

End of period

2

0

Guarantor Subsidiaries [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

113,145

111,307

Cash flows from investing activities

Distributions to HFC for Tulsa Tanks

(18,440)

(41,559)

Purchase of El Dorado crude tanks

(27,500)

Purchase of interest in Cheyenne Pipeline

(42,500)

Proceeds from sale of assets

18

965

Proceeds from Noncontrolling Interests

1,496

1,853

Distributions in excess of earnings of equity method investments

198

Net cash used for investing activities

(59,426)

(66,043)

Cash flows from financing activities

Net borrowings under credit agreement

74,000

33,000

Net intercompany financing activities

(86,789)

(92,498)

Proceeds from Issuance of Common Stock

896

Contributions from General Partner

0

Contributions from HFC for El Dorado Operating acquisition

18,888

Contribution from HFC for Osage transaction

(31,285)

Distributions to HEP unitholders

0

Distribution to HFC for Osage

(1,245)

Distribution to HFC for Tulsa Tank Acquisition

(9,122)

Contributions from HFC for Tulsa Tank expenditures

0

722

Distributions to noncontrolling interests

0

Purchase of units for incentive grants

0

Deferred financing costs

(3,084)

Other

(357)

(854)

Net cash used for financing activities

(58,778)

(40,742)

Increase (decrease) for the period

(5,059)

4,522

Beginning of period

5,452

2,828

End of period

393

7,350

Non-Guarantor Subsidiaries [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

19,155

15,358

Cash flows from investing activities

Distributions to HFC for Tulsa Tanks

(14,227)

(784)

Purchase of El Dorado crude tanks

0

Purchase of interest in Cheyenne Pipeline

0

Proceeds from sale of assets

0

Proceeds from Noncontrolling Interests

0

Distributions in excess of earnings of equity method investments

0

Net cash used for investing activities

(14,227)

(784)

Cash flows from financing activities

Net borrowings under credit agreement

0

Net intercompany financing activities

0

Proceeds from Issuance of Common Stock

0

Contributions from General Partner

0

Contributions from HFC for El Dorado Operating acquisition

0

Contribution from HFC for Osage transaction

0

Distributions to HEP unitholders

0

Distribution to HFC for Osage

0

Distribution to HFC for Tulsa Tank Acquisition

0

Contributions from HFC for Tulsa Tank expenditures

0

Distributions to noncontrolling interests

(10,000)

(11,500)

Purchase of units for incentive grants

0

Deferred financing costs

0

Other

0

Net cash used for financing activities

(10,000)

(11,500)

Increase (decrease) for the period

(5,072)

3,074

Beginning of period

9,559

0

End of period

4,487

3,074

Eliminations [Member]

Condensed Financial Statements, Captions [Line Items]

Net cash provided by operating activities

(7,500)

(6,772)

Cash flows from investing activities

Distributions to HFC for Tulsa Tanks

0

Purchase of El Dorado crude tanks

0

Purchase of interest in Cheyenne Pipeline

0

Proceeds from sale of assets

0

Proceeds from Noncontrolling Interests

0

(1,853)

Distributions in excess of earnings of equity method investments

0

Net cash used for investing activities

0

(1,853)

Cash flows from financing activities

Net borrowings under credit agreement

0

Net intercompany financing activities

0

Proceeds from Issuance of Common Stock

0

Contributions from General Partner

0

Contributions from HFC for El Dorado Operating acquisition

0

Contribution from HFC for Osage transaction

0

Distributions to HEP unitholders

0

Distribution to HFC for Osage

0

Distribution to HFC for Tulsa Tank Acquisition

0

Contributions from HFC for Tulsa Tank expenditures

0

Distributions to noncontrolling interests

7,500

8,625

Purchase of units for incentive grants

0

Deferred financing costs

0

Other

0

Net cash used for financing activities

7,500

8,625

Increase (decrease) for the period

0

Beginning of period

0

End of period

$ 0

[1] Retrospectively adjusted as described in Note 1.