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Acquisitions (Notes)
 3 Months Ended
Mar. 31, 2013
Acquisitions [Abstract]  
Acquisitions
Acquisitions
Nettleton Acquisition
On January 31, 2012, Delek completed the acquisition of an approximately 35-mile long, eight- and ten-inch pipeline system (the "Nettleton Pipeline") from Plains Marketing, L.P. (“Plains”), which was subsequently contributed to the Partnership in connection with the Offering. The Nettleton Pipeline is used to transport crude oil from our tank farms in and around Nettleton, Texas to the Bullard Junction at Delek's Tyler, Texas refinery (the "Tyler Refinery"). During the three months ended March 31, 2013, more than half of the crude oil processed at the Tyler Refinery was supplied through the Nettleton Pipeline. The remainder of the crude oil was supplied through the McMurrey Pipeline, which also begins at our tank farms in and around Longview, Texas and then runs roughly parallel to the Nettleton Pipeline. Prior to the acquisition of the Nettleton Pipeline, Delek leased the Nettleton Pipeline from Plains under the terms of the Pipeline Capacity Lease Agreement dated April 12, 1999, as amended (the “Plains Lease”). The Plains Lease was terminated in connection with the acquisition of the Nettleton Pipeline.
The aggregate purchase price of the Nettleton Pipeline was approximately $12.3 million. The allocation of the purchase price was based primarily upon a preliminary valuation. During 2012, we adjusted certain of the acquisition-date fair values previously disclosed, based primarily on the finalization of goodwill and intangible amounts, which were obtained subsequent to the acquisition.
The allocation of the aggregate purchase price of the Nettleton Pipeline as of December 31, 2012 is summarized as follows (in thousands):
Property, plant and equipment
$
8,590

Intangible assets
2,240

Goodwill (all expected to be deductible for tax purposes)
1,415

     Total
$
12,245


Big Sandy Acquisition
On February 7, 2012, Delek purchased (i) a light petroleum products terminal located in Big Sandy, Texas, the underlying real property, and other related assets from Sunoco Partners Marketing & Terminals L.P. and (ii) the 19-mile, eight-inch diameter Hopewell - Big Sandy Pipeline originating at Hopewell Junction, Texas and terminating at the Big Sandy Station in Big Sandy, Texas from Sunoco Pipeline L.P (collectively "Big Sandy"). Big Sandy was subsequently contributed to the Partnership in connection with the Offering. Big Sandy was supplied by the Tyler Refinery but has been idle since on or about November 2008.
The aggregate purchase price of Big Sandy was approximately $11.0 million. The allocation of the purchase price was based primarily upon a preliminary valuation. During 2012, we adjusted certain of the acquisition-date fair values previously disclosed, based primarily on the finalization of goodwill and intangible amounts.
The allocation of the aggregate purchase price of Big Sandy as of December 31, 2012 is summarized as follows (in thousands):
Property, plant and equipment
$
8,258

Intangible assets
1,229

Goodwill (all expected to be deductible for tax purposes)
1,540

     Total
$
11,027


Pro Forma Financial Information
We began consolidating the results of operations of the Nettleton Pipeline and Big Sandy on January 31, 2012 and February 7, 2012, respectively. The Nettleton Pipeline contributed $1.8 million and $1.4 million to net sales and net income, respectively, for the three months ended March 31, 2013. Big Sandy contributed $0.4 million and $0.3 million to net sales and net income, respectively, for the three months ended March 31, 2013. Below are the unaudited pro forma consolidated results of operations for the three months ended March 31, 2012, as if these acquisitions had occurred on January 1, 2011 (amounts in thousands):
 
 
Three Months Ended
 
 
March 31, 2012
 
 
Predecessor
Net sales
 
$
239,213

Net income
 
$
2,638