Revisions to Prior Periods

12 Months Ended

Dec. 31, 2012

Accounting Changes and Error Corrections [Text Block]

Revisions to Prior Period Financial Statements

We have revised our previously reported consolidated financial statements. The revisions were due to accounting rules that require retrospective restatement of previously reported results in cases of business combinations between entities under common control. Additional revisions for the years ended December 31, 2011 and 2010 were done in order to correct items in certain previously reported amounts.

Our retrospective restatements for two acquisitions from HFC are described below. See Note 3 below for additional information on both acquisitions.

• On July 12, 2012, we acquired a 75% interest in UNEV. We have retrospectively adjusted our historical financial results for all periods to include UNEV for the periods we were under common control of HFC. Results of operations of UNEV prior to the acquisition on July 12, 2012 are herein referred to as the results of operations attributable to the Predecessor.

• In 2011, our operating results included $3.8 million of operating costs and depreciation incurred by HFC prior to our November 9, 2011 acquisition of certain assets located at HFC’s El Dorado and Cheyenne refineries. This loss was allocated in the originally reported historical financial statements included in Form 10-K for the year ended December 31, 2011 principally to the limited partners. The pre-acquisition loss should have been reported as a loss attributable to the Predecessor. We have revised the 2011 presentation which resulted in an increase in limited partners' interest in net income of $3.8 million and limited partners' per unit interest in earnings - basic and diluted of $0.08 from the amounts originally reported.

During 2012, we identified the following additional items requiring revisions to our previously reported financial statements for the years ended December 31, 2011 and 2010, which have been corrected. We determined that the effects of these corrections in each of the periods in which the related items originated, as described below, were not material. We have concluded that the amounts, if corrected in 2012, would have been material to the consolidated financial statements as of and for the year ended December 31, 2012.

• Depreciation expense was understated related to property and equipment in both 2010 and 2011 due to inappropriate depreciable lives for certain property and equipment and untimely recording of acceleration of depreciation for tankage placed permanently out of service in prior periods.

• An environmental remediation liability and certain asset retirement obligations were identified that should have been recorded in 2010 and 2011.

• Reimbursement payments from HFC under contractual arrangements previously recognized as an offset against the related costs have been recorded as revenue, or deferred revenue in cases of capital cost reimbursements which are then amortized over the contractual term of the related throughput agreement. Additionally, we have revised our cash flow presentation for capital cost reimbursements to reflect receipts in cash flows provided by operating activities as opposed to netting the receipts in cash flows used for investing activities.

The tables below outline the impact of such corrections on individual financial statement line items.

	December 31, 2011
	Increase (Decrease)
	(In thousands)
Consolidated Balance Sheets:
Properties and equipment, net	$	5,635
Deferred revenue - current portion	$	415
Other long-term liabilities	$	4,653
Deferred revenue - long-term	$	5,428
Total equity	$	(4,861	)

	Years Ended December 31,
	2011			2010
	Increase (Decrease)
	(In thousands)
Consolidated Statements of Income:
Revenues	$	976		$	55
Operating expenses	$	898		$	1,808
Depreciation and amortization	$	2,050		$	794
Net income attributable to Holly Energy Partners and comprehensive income	$	(1,972	)	$	(2,547	)
Limited partners' per unit interest in earnings - basic and diluted	$	(0.04	)	$	(0.06	)
Consolidated Statements of Cash Flows:
Net cash provided by operating activities	$	4,278		$	1,629
Net cash used for investing activities	$	(4,278	)	$	(1,629	)