SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 12, 2008 (September 12, 2008)
HOLLY ENERGY PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
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| Delaware
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001-32225
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20-0833098 |
| (State or other
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(Commission File Number)
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(I.R.S. Employer |
| jurisdiction of incorporation)
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Identification Number) |
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| 100 Crescent Court,
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75201-6915 |
| Suite 1600
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(Zip code) |
| Dallas, Texas |
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| (Address of principal |
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| executive offices) |
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Registrant’s telephone number, including area code: (214) 871-3555
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 7.01. |
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Regulation FD Disclosure. |
Alon USA, a major shipper on Holly Energy Partners, L.P.’s (referred to here in as the
“Partnership”) Texas pipelines, has announced that it expects its refinery in Big Spring, Texas to
return all units to full operation by October 1. The Big Spring Refinery was damaged by an
explosion in February 2008 and began operating at approximately 50% capacity in early April 2008.
The Partnership previously stated that this restart was anticipated to occur by August 1 based on
Alon’s previous indications.
The significantly reduced shipments of Alon’s product on the Partnership’s pipelines has
adversely affected the Partnership’s net income since the explosion, but has not materially reduced
the Partnership’s distributable cash flow. Contractual minimum throughput commitments require Alon
to pay the Partnership a minimum quarterly amount that is not materially different than the
quarterly amount that the Partnership received from Alon prior to the explosion when the Big Spring
Refinery was operating at normal capacity.
Although the Partnership receives these minimum guaranteed payments from Alon each quarter,
the Partnership accounted for the difference between the guaranteed amounts and the lower revenue
associated with the actual shipments by Alon as deferred revenue, thus reducing net income.
Accordingly, net income for the Partnership for the second quarter was adversely affected by the
Alon reduced product shipments and the accounting treatment of the contractual guaranteed payments.
Cash available for distribution was, however, only minimally affected due to these contractual
minimum payments.
The Partnership believes its third quarter will likely be impacted in a similar manner since
Alon has to date made, and is expected to continue to make the same guaranteed minimum payments and
their shipments during the third quarter are expected to be similar to those of the second quarter.
To date, the Partnership has recognized this deferred revenue one year after the contractual
minimum cash payment was received so that the recognition of income occurs upon the expiration of
Alon’s contractual right to apply such amounts to shipments in excess of its minimum throughput
commitments during the one year period.
In accordance with General Instruction B.2 of Form 8-K, the information furnished in this
report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the
Securities Exchange Act of 1934 (“Exchange Act”), or otherwise subject to the liabilities of that
section, unless the Partnership specifically incorporates it by reference in a document filed under
the Exchange Act or the Securities Act of 1933. By filing this report on Form 8-K and furnishing
this information, the Partnership makes no admission as to the materiality of any information in
this report or that any such information includes material investor information that is not
otherwise publicly available.
The information contained in this report on Form 8-K is intended to be considered in the
context of the Partnership’s Securities and Exchange Commission (“SEC”) filings and other public
announcements that the Partnership may make, by press release or otherwise from time to time. The
Partnership disclaims any current intention to revise or update the information contained in this
report although the Partnership may do so from time to time as its management believes is
warranted. Any such updating may be made through the furnishing or filing of other reports or
documents with the SEC, through press releases or through other public disclosure.