
	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 wholly-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 and the Guarantor Subsidiaries. The information has been presented as if the Parent accounted for its ownership in the Guarantor Subsidiaries using the equity method of accounting.

Prior period amounts have been recast to include UNEV operations acquired July 12, 2012, as if it had been acquired March 1, 2008, the date we were under common control with HFC. The tankage, loading rack and crude receiving assets located at HFC’s El Dorado and Cheyenne refineries acquired on November 9, 2011 were recast as if they had been acquired on July 1, 2011, the date upon which HFC obtained control of such assets. This treatment is required under GAAP as the transactions were between entities under common control. Additionally, we corrected certain amounts previously reported in 2011 and 2010. See Note 2 for additional information.

Condensed Consolidating Balance Sheet



December 31, 2012	Parent		Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2	$	823		$	4,412	$	—		$	5,237
Accounts receivable	—		32,319			6,401		—			38,720
Intercompany accounts receivable (payable)	42,194		(42,194		)	—		—			—
Prepaid and other current assets	224		2,395			1,000		—			3,619
Total current assets	42,420		(6,657		)	11,813		—			47,576
Properties and equipment, net	—		563,701			396,834		—			960,535
Investment in subsidiaries	777,472		300,607			—		(1,078,079		)	—
Transportation agreements, net	—		94,596			—		—			94,596
Goodwill	—		256,498			—		—			256,498
Investment in SLC Pipeline	—		25,041			—		—			25,041
Other assets	1,154		8,710			—		—			9,864
Total assets	$	821,046	$	1,242,496		$	408,647	$	(1,078,079	)	$	1,394,110

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	10,745		$	1,285	$	—		$	12,030
Accrued interest	10,198		28			—		—			10,226
Deferred revenue	—		3,319			5,582		—			8,901
Accrued property taxes	—		1,923			765		—			2,688
Other current liabilities	563		1,274			68		—			1,905
Total current liabilities	10,761		17,289			7,700		—			35,750

Long-term debt	443,674		421,000			—		—			864,674
Other long-term liabilities	55		15,241			137		—			15,433
Deferred revenue	—		11,494			—		—			11,494
Class B unit	13,903		—			—		—			13,903
Equity - partners	352,653		777,472			400,810		(1,178,282		)	352,653
Equity - noncontrolling interest	—		—			—		100,203			100,203
Total liabilities and partners’ equity	$	821,046	$	1,242,496		$	408,647	$	(1,078,079	)	$	1,394,110

Condensed Consolidating Balance Sheet



December 31, 2011	Parent		Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries		Eliminations			Consolidated
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	2	$	3,267		$	3,100	$	—		$	6,369
Accounts receivable	—		33,972			4,080		—			38,052
Intercompany accounts receivable (payable)	17,745		(17,745		)	—		—			—
Prepaid and other current assets	266		2,378			1,085		—			3,729
Total current assets	18,013		21,872			8,265		—			48,150
Properties and equipment, net	—		559,212			401,287		—			960,499
Investment in subsidiaries	960,516		297,008			—		(1,257,524		)	—
Transportation agreements, net	—		101,543			—		—			101,543
Goodwill	—		256,498			—		—			256,498
Investment in SLC Pipeline	—		25,302			—		—			25,302
Other assets	1,322		5,882			—		—			7,204
Total assets	$	979,851	$	1,267,317		$	409,552	$	(1,257,524	)	$	1,399,196

LIABILITIES AND PARTNERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	11,307		$	13,542	$	—		$	24,849
Accrued interest	7,498		782			—		—			8,280
Deferred revenue	—		4,447			—		—			4,447
Accrued property taxes	—		2,196			—		—			2,196
Other current liabilities	689		1,088			—		—			1,777
Total current liabilities	8,187		19,820			13,542		—			41,549

Long-term debt	332,988		272,900			—		—			605,888
Other long-term liabilities	—		8,653			—		—			8,653
Deferred revenue	—		5,428			—		—			5,428
Equity - partners	638,676		960,516			396,010		(1,356,526		)	638,676
Equity - noncontrolling interest	—		—			—		99,002			99,002
Total liabilities and partners’ equity	$	979,851	$	1,267,317		$	409,552	$	(1,257,524	)	$	1,399,196

Condensed Consolidating Statement of Comprehensive Income



Year Ended December 31, 2012	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	232,986		$	13,754		$	(1,158	)	$	245,582
Third parties	—			41,984			4,994			—			46,978
	—			274,970			18,748			(1,158		)	292,560
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			78,766			11,634			(1,158		)	89,242
Depreciation and amortization	—			43,147			14,314			—			57,461
General and administrative	3,336			4,258			—			—			7,594
	3,336			126,171			25,948			(1,158		)	154,297
Operating income (loss)	(3,336		)	148,799			(7,200		)	—			138,263
Equity in earnings (loss) of subsidiaries	130,743			(5,400		)	—			(125,343		)	—
Equity in earnings of SLC Pipeline	—			3,364			—			—			3,364
Interest (expense) income	(31,523		)	(15,659		)	—			—			(47,182		)
Loss on early extinguishment of debt	(2,979		)	—			—			—			(2,979		)
Other	—			10			—			—			10
	96,241			(17,685		)	—			(125,343		)	(46,787		)
Income (loss) before income taxes	92,905			131,114			(7,200		)	(125,343		)	91,476
State income tax expense	—			(371		)	—			—			(371		)
Net income (loss)	92,905			130,743			(7,200		)	(125,343		)	91,105
Allocation of net loss attributable to Predecessors	4,200			—			—			—			4,200
Allocation of net (income) attributable to noncontrolling interests	(2,953		)	—			—			1,800			(1,153		)
Net income (loss) attributable to Holly Energy Partners	94,152			130,743			(7,200		)	(123,543		)	94,152
Other comprehensive (loss)	2,185			—			—			—			2,185
Comprehensive income (loss)	$	96,337		$	130,743		$	(7,200	)	$	(123,543	)	$	96,337

Condensed Consolidating Statement of Comprehensive Income



Year Ended December 31, 2011	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	168,519		$	313		$	(571	)	$	168,261
Third parties	—			46,005			2			—			46,007
	—			214,524			315			(571		)	214,268
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			63,100			1,992			(571		)	64,521
Depreciation and amortization	—			35,200			1,758			—			36,958
General and administrative	3,902			2,674			—			—			6,576
	3,902			100,974			3,750			(571		)	108,055
Operating income (loss)	(3,902		)	113,550			(3,435		)	—			106,213
Equity in earnings (loss) of subsidiaries	101,844			(2,576		)	—			(99,268		)	—
Equity in earnings of SLC Pipeline	—			2,552			—			—			2,552
Interest (expense) income	(24,494		)	(11,465		)	—			—			(35,959		)
Other	—			17			—			—			17
	77,350			(11,472		)	—			(99,268		)	(33,390		)
Income (loss) before income taxes	73,448			102,078			(3,435		)	(99,268		)	72,823
State income tax expense	—			(234		)	—			—			(234		)
Net income (loss)	73,448			101,844			(3,435		)	(99,268		)	72,589
Allocation of net loss attributable to Predecessors	6,351			—			—			—			6,351
Allocation of net loss attributable to noncontrolling interests	—			—			—			859			859
Net income (loss)attributable to Holly Energy Partners	79,799			101,844			(3,435		)	(98,409		)	79,799
Other comprehensive income	3,562			—			—			—			3,562
Comprehensive income (loss)	$	83,361		$	101,844		$	(3,435	)	$	(98,409	)	$	83,361

Condensed Consolidating Statement of Comprehensive Income



Year Ended December 31, 2010	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations			Consolidated
	(In thousands)
Revenues:
Affiliates	$	—		$	146,391		$	—		$	(24	)	$	146,367
Third parties	—			35,762			8			—			35,770
	—			182,153			8			(24		)	182,137
Operating costs and expenses:
Operations (exclusive of depreciation and amortization)	—			54,755			215			(24		)	54,946
Depreciation and amortization	—			31,476			(113		)	—			31,363
General and administrative	5,053			2,666			—			—			7,719
	5,053			88,897			102			(24		)	94,028
Operating income (loss)	(5,053		)	93,256			(94		)	—			88,109
Equity in earnings (loss) of subsidiaries	84,664			(70		)	—			(84,594		)	—
Equity in earnings of SLC Pipeline	—			2,393			—			—			2,393
Interest (expense) income	(23,358		)	(10,636		)	—			—			(33,994		)
Other	—			17			—			—			17
	61,306			(8,296		)	—			(84,594		)	(31,584		)
Income (loss) before income taxes	56,253			84,960			(94		)	(84,594		)	56,525
State income tax expense	—			(296		)	—			—			(296		)
Net income (loss)	56,253			84,664			(94		)	(84,594		)	56,229
Allocation of net loss attributable to Predecessors	70			—			—			—			70
Allocation of net loss attributable to noncontrolling interests	—			—			—			24			24
Net income (loss) attributable to Holly Energy Partners	56,323			84,664			(94		)	(84,570		)	56,323
Other comprehensive (loss)	(885		)	—			—			—			(885		)
Comprehensive income (loss)	$	55,438		$	84,664		$	(94	)	$	(84,570	)	$	55,438

Condensed Consolidating Statement of Cash Flows



Year Ended December 31, 2012	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash flows from operating activities	$	17,432		$	142,940		$	1,039		$	—	$	161,411

Cash flows from investing activities
Additions to properties and equipment	—			(28,134		)	(14,727		)	—		(42,861		)

Cash flows from financing activities
Net borrowings under credit agreement	—			221,000			—			—		221,000
Proceeds from issuance of senior notes	294,750			—			—			—		294,750
Cash distribution to HFC for UNEV acquisition	—			(260,922		)	—			—		(260,922		)
Repayments of promissory notes	(185,000		)	(75,235		)	—			—		(260,235		)
Contributions from partners	1,748			—			15,000			—		16,748
Distributions to HEP unitholders	(122,777		)	—			—			—		(122,777		)
Purchase of units for incentive grants	(5,240		)	321			—			—		(4,919		)
Deferred financing costs	(913		)	(2,325		)	—			—		(3,238		)
Other	—			(89		)	—			—		(89		)
	(17,432		)	(117,250		)	15,000			—		(119,682		)
Cash and cash equivalents
Decrease for the period	—			(2,444		)	1,312			—		(1,132		)
Beginning of period	2			3,267			3,100			—		6,369
End of period	$	2		$	823		$	4,412		$	—	$	5,237

Condensed Consolidating Statement of Cash Flows



Year Ended December 31, 2011	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash flows from operating activities	$	11,666		$	85,730		$	1,646		$	—	$	99,042

Cash flows from investing activities
Additions to properties and equipment	—			(43,614		)	(162,695		)	—		(206,309		)

Cash flows from financing activities
Net borrowings under credit agreement	—			41,000			—			—		41,000
Repayments of promissory notes	—			(77,100		)	—			—		(77,100		)
Proceeds from issuance of common units	75,815			—			—			—		75,815
Contributions from partners	5,887			—			156,500			—		162,387
Distributions to HEP unitholders	(91,506		)	—			—			—		(91,506		)
Purchase of units for restricted grants	(1,641		)	—			—			—		(1,641		)
Deferred financing costs	—			(3,150		)	—			—		(3,150		)
Other	(221		)	—			—			—		(221		)
	(11,666		)	(39,250		)	156,500			—		105,584
Cash and cash equivalents
Increase for the period	—			2,866			(4,549		)	—		(1,683		)
Beginning of period	2			401			7,649			—		8,052
End of period	$	2		$	3,267		$	3,100		$	—	$	6,369

Condensed Consolidating Statement of Cash Flows



Year Ended December 31, 2010	Parent			Guarantor Restricted Subsidiaries			Non-Guarantor Non-Restricted Subsidiaries			Eliminations		Consolidated
	(In thousands)
Cash flows from operating activities	$	(59,916	)	$	178,213		$	(13,561	)	$	—	$	104,736

Cash flows from investing activities
Acquisition of assets from HFC	—			(35,526		)	—			—		(35,526		)
Additions to properties and equipment	—			(26,732		)	(79,793		)	—		(106,525		)
	—			(62,258		)	(79,793		)	—		(142,051		)
Cash flows from financing activities
Net repayments under credit agreement	—			(47,000		)	—			—		(47,000		)
Repayments of promissory notes	—			—			—			—		—
Proceeds from issuance of senior notes	147,540			—			—			—		147,540
Contributions from partners	—			(13,500		)	94,000			—		80,500
Distributions to HEP unitholders	(84,426		)	—			—			—		(84,426		)
Purchase price in excess of transferred basis in assets acquired from HFC	—			(57,560		)	—			—		(57,560		)
Purchase of units for restricted grants	(2,704		)	—			—			—		(2,704		)
Deferred financing costs	(494		)	—			—			—		(494		)
Other	—			—			—			—		—
	59,916			(118,060		)	94,000			—		35,856
Cash and cash equivalents
Increase for the period	—			(2,105		)	646			—		(1,459		)
Beginning of period	2			2,506			7,003			—		9,511
End of period	$	2		$	401		$	7,649		$	—	$	8,052