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Segment Data (Notes)
 9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
Segment Data
Segment Data
We report our assets and operating results in two reportable segments: (i) pipelines and transportation and (ii) wholesale marketing and terminalling:
•
The pipelines and transportation segment provides crude oil gathering, transportation and storage services to Delek's refining operations and independent third parties.
•
The wholesale marketing and terminalling segment provides marketing and terminalling services to Delek's refining operations and independent third parties.
Our operating segments adhere to the same accounting polices used for our consolidated financial statements. Our operating segments are managed separately because each segment requires different industry knowledge, technology and marketing strategies. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on the segment contribution margin. Segment contribution margin is defined as net sales less cost of sales and operating expenses, excluding depreciation and amortization.
On July 26, 2013, we acquired the Tyler Terminal and Tank Assets from Delek. Our and our Predecessors' historical financial statements have been retrospectively adjusted to reflect the results of operations attributable to the Tyler Terminal and Tank Assets as if we owned the assets for all periods presented. The results of the Tyler Terminal and the Tyler Tank Assets are included in the wholesale marketing and terminalling segment and the pipelines and transportation segment, respectively.
The following is a summary of business segment operating performance as measured by contribution margin for the period indicated (in thousands):
 
 
Three Months Ended September 30, 2013
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
15,743

 
$
227,552

 
$
243,295

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
—

 
218,222

 
218,222

Operating expenses
 
5,660

 
1,814

 
7,474

Segment contribution margin
 
$
10,083

 
$
7,516

 
17,599

General and administrative expenses
 
 
 
 
 
1,868

Depreciation and amortization
 
 
 
 
 
2,844

Operating income
 
 
 
 
 
$
12,887

Total assets
 
$
164,963

 
$
122,415

 
$
287,378

 Capital spending (excluding business combinations) (1)
 
1,065

 
517

 
$
1,582

            

(1) Capital spending includes expenditures incurred in connection with the assets acquired in the Tyler Acquisition.
 
 
Three Months Ended September 30, 2012
 
 
Predecessors
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Combined
Net sales
 
$
7,960

 
$
263,846

 
$
271,806

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
—

 
255,281

 
255,281

Operating expenses
 
7,241

 
2,299

 
9,540

Segment contribution margin
 
$
719

 
$
6,266

 
6,985

General and administrative expenses
 
 
 
 
 
1,804

Depreciation and amortization
 
 
 
 
 
2,616

Loss on sale of assets
 
 
 
 
 
5

Operating income
 
 
 
 
 
$
2,560

Total assets
 
$
145,380

 
$
139,446

 
$
284,826

 Capital spending (excluding business combinations) (1)
 
$
5,064

 
$
324

 
$
5,388

            

(1) Capital spending includes expenditures incurred in connection with the assets acquired in the Tyler Acquisition.

 
 
Nine Months Ended September 30, 2013
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
43,008

 
$
641,323

 
$
684,331

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
—

 
614,048

 
614,048

Operating expenses
 
18,193

 
4,882

 
23,075

Segment contribution margin
 
$
24,815

 
$
22,393

 
47,208

General and administrative expenses
 
 
 
 
 
5,172

Depreciation and amortization
 
 
 
 
 
9,074

Operating income
 
 
 
 
 
$
32,962

 Capital spending (excluding business combinations) (1)
 
6,513

 
1,368

 
$
7,881

            

(1) Capital spending includes expenditures incurred in connection with the assets acquired in the Tyler Acquisition.

 
 
Nine Months Ended September 30, 2012
 
 
Predecessors
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Combined
Net sales
 
$
21,440

 
$
751,929

 
$
773,369

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
—

 
729,750

 
729,750

Operating expenses
 
16,149

 
4,488

 
20,637

Segment contribution margin
 
$
5,291

 
$
17,691

 
22,982

General and administrative expenses
 
 
 
 
 
6,937

Depreciation and amortization
 
 
 
 
 
7,720

Loss on sale of assets
 
 
 
 
 
5

Operating income
 
 
 
 
 
$
8,320

 Capital spending (excluding business combinations) (1)
 
$
15,400

 
$
1,300

 
$
16,700

            

(1) Capital spending includes expenditures incurred in connection with the assets acquired in the Tyler Acquisition.

Property, plant and equipment, accumulated depreciation and depreciation expense by reporting segment as of and for the three and nine months ended September 30, 2013 were as follows (in thousands):

 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Property, plant and equipment
 
$
173,962

 
$
55,791

 
$
229,753

Less: accumulated depreciation
 
(20,278
)
 
(12,986
)
 
(33,264
)
Property, plant and equipment, net
 
$
153,684

 
$
42,805

 
$
196,489

Depreciation expense for the three months ended September 30, 2013
 
$
2,144

 
$
469

 
$
2,613

Depreciation expense for the nine months ended September 30, 2013
 
$
6,856

 
$
1,421

 
$
8,277


In accordance with ASC 360, Property, Plant & Equipment, we evaluate the realizability of property, plant and equipment as events occur that might indicate potential impairment.