HollyFrontier 2013 Annual Report Download - page 76

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68
HEP's recent common unit issuances (2011 through present) are summarized below:
2013 Issuances
In March 2013, HEP closed on a public offering of 1,875,000 of its common units. Additionally, our wholly-owned subsidiary,
HollyFrontier Holdings LLC, as a selling unitholder, closed on a public sale of 1,875,000 HEP common units held by it. HEP used
net proceeds of $73.4 million to repay indebtedness incurred under its credit facility and for general partnership purposes.
2012 Issuances
In July 2012, HEP issued 1.0 million of its common units to us as partial consideration for its purchase of our 75% interest in
UNEV.
2011 Issuances
In December 2011, HEP issued 1.5 million of its common units priced at $53.50 per unit. Aggregate net proceeds of $75.8 million
were used to repay a portion of the $150 million in promissory notes issued to us in connection with HEP's November 2011 asset
acquisition from us. This repayment to us is eliminated in our consolidated financial statements.
In November 2011, HEP issued 3.8 million of its common units to us as partial consideration for its purchase from us of certain
tankage, loading rack and crude receiving assets located at our El Dorado and Cheyenne Refineries.
As a result of these transactions and resulting HEP ownership changes, we adjusted additional capital, other comprehensive income
and equity attributable to HEP's noncontrolling interest holders to effectively reallocate a portion of HEP's equity among its
unitholders.
Sabine Biofuels
We have a 50% ownership interest in Sabine Biofuels, an unconsolidated VIE. This investment, accounted for using the equity
method of accounting, had a carrying amount of $8.5 million at December 31, 2013 and is classified as a noncurrent asset under
“Intangibles and other” in our consolidated balance sheets. Also, we have extended a working capital facility to Sabine Biofuels
having an outstanding balance of $9.9 million at December 31, 2013.
NOTE 4: Financial Instruments
Our financial instruments consist of cash and cash equivalents, investments in marketable securities, accounts receivable, accounts
payable, debt and derivative instruments. The carrying amounts of cash and cash equivalents, accounts receivable and accounts
payable approximate fair value. HEP's outstanding credit agreement borrowings also approximate fair value as interest rates are
reset frequently at current interest rates.
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.
Table of Contents HOLLYFRONTIER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Continued