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Acquisitions (Notes) | 12 Months Ended
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Dec. 31, 2013
Acquisitions [Abstract] |
Acquisitions | Acquisitions North Little Rock Acquisition On October 24, 2013, we purchased a refined product terminal in Little Rock, Arkansas from Enterprise Refined Products Company, LLC (the "North Little Rock Terminal"). We acquired the North Little Rock Terminal to expand our customer base and diversify our product mix. The aggregate purchase price was approximately $5.0 million. The allocation of the purchase price was based primarily upon a preliminary valuation. The preliminary valuation is subject to change during the purchase price allocation period. The preliminary allocation of the aggregate purchase price of the North Little Rock Terminal as of December 31, 2013 is summarized as follows (in thousands):
Property, plant and equipment | $ | 4,987 |
Intangible assets | 13 |
Total | $ | 5,000 |
Pro Forma Financial Information - North Little Rock Acquisition We began consolidating the results of operations of the North Little Rock Terminal on October 24, 2013. The North Little Rock Terminal contributed $0.2 million and $0.1 million to net sales and net income, respectively, for the year ended December 31, 2013. Below are the unaudited pro forma consolidated results of operations for the years ended December 31, 2013 and 2012, as if these acquisitions had occurred on January 1, 2012 (in thousands):
|  | Year Ended December 31,
|  | 2013 |  | 2012
Net sales |  | $ | 908,867 |  |  | $ | 1,024,025 |
Net income |  | $ | 42,268 |  |  | $ | 26,109 |
Tyler Acquisition On July 26, 2013, the Partnership completed the Tyler Acquisition and acquired the Tyler Terminal and Tank Assets. The purchase price paid for the assets acquired was $94.8 million in cash. The assets acquired consisted of the following:
• | The Tyler Terminal. The refined products terminal located at the Tyler Refinery, which consists of a truck loading rack with nine loading bays supplied by pipelines from storage tanks, also owned by the Partnership, located adjacent to the Tyler Refinery, along with certain ancillary assets. Total throughput capacity for the Tyler Terminal is approximately 72,000 barrels per day ("bpd").
• | The Tyler Tank Assets. Ninety-six storage tanks and certain ancillary assets (such as tank pumps and piping) located adjacent to the Tyler Refinery with an aggregate shell capacity of approximately 2.0 million barrels (the "Tyler Storage Tanks").
Delek retained any current assets, current liabilities and environmental liabilities related to the Tyler Terminal and Tank Assets as of the date of the Tyler Acquisition. The only historical balance sheet items that transferred to the Partnership in the Acquisition were property, plant and equipment assets and asset retirement obligations which were recorded by us at historical cost. In connection with the Tyler Acquisition, the Partnership and Delek (i) entered into an asset purchase agreement, (ii) entered into the First Omnibus Amendment (as defined below in Note 18—Related Party Transactions, (iii) entered into a throughput and tankage agreement with respect to the Tyler Terminal and Tank Assets, (iv) entered into a lease and access agreement and (v) entered into a site services agreement. See Note 18 for additional information regarding these agreements. Tyler Terminal and Tank Assets Financial Results The acquisition of the Tyler Terminal and Tank Assets was considered a transfer of a business between entities under common control. Accordingly, the Tyler Acquisition was recorded at amounts based on the historical carrying value of the Tyler Terminal and Tank Assets as of July 26, 2013, which was $38.3 million. Our historical financial statements have been retrospectively adjusted to reflect the results of operations, financial position, cash flows and equity 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 results of the Tyler Terminal and Tank Assets operations prior to the completion of the Tyler Acquisition on July 26, 2013 have been included in the Tyler Predecessor results in the tables below. The results of the Tyler Terminal and Tank Assets subsequent to July 26, 2013 have been included in the Partnership's results. Accordingly, for the year ended December 31, 2013, total operating revenues of $7.5 million and net income attributable to the Partnership of $3.9 million associated with the Tyler Terminal and Tank Assets are included in the combined consolidated statements of operations of the Partnership. Costs associated with the Tyler Acquisition in the amount of $0.3 million are included in general and administrative expenses for the year ended December 31, 2013. The tables on the following page present our results of operations, the effect of including the results of the Tyler Terminal and Tank Assets and the adjusted total amounts included in our combined consolidated financial statements. Combined Consolidated Balance Sheet as of December 31, 2012
|  | Delek Logistics |  | Tyler Terminal and Tank Assets |  | Delek Logistics Partners, LP
|  | Partners, LP |  | (Tyler Predecessor) |  | December 31, 2012
|  |  |  | (In thousands) |  |
ASSETS
Current Assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 23,452 |  |  | $ | — |  |  | $ | 23,452 |
Accounts receivable |  | 27,725 |  |  | — |  |  | 27,725 |
Inventory |  | 14,351 |  |  | — |  |  | 14,351 |
Deferred tax assets |  | 14 |  |  | — |  |  | 14 |
Other current assets |  | 169 |  |  | — |  |  | 169 |
Total current assets |  | 65,711 |  |  | — |  |  | 65,711 |
Property, plant and equipment: |  |  |  |  |  |
Property, plant and equipment |  | 172,300 |  |  | 43,748 |  |  | 216,048 |
Less: accumulated depreciation |  | (18,790 | ) |  | (6,201 | ) |  | (24,991 | )
Property, plant and equipment, net |  | 153,510 |  |  | 37,547 |  |  | 191,057 |
Goodwill |  | 10,454 |  |  | — |  |  | 10,454 |
Intangible assets, net |  | 12,430 |  |  | — |  |  | 12,430 |
Other non-current assets |  | 3,664 |  |  | — |  |  | 3,664 |
Total assets |  | $ | 245,769 |  |  | $ | 37,547 |  |  | $ | 283,316 |
LIABILITIES AND EQUITY
Current liabilities: |  |  |  |  |  |
Accounts payable |  | $ | 21,849 |  |  | $ | — |  |  | $ | 21,849 |
Accounts payable to related parties |  | 10,148 |  |  | — |  |  | 10,148 |
Fuel and other taxes payable |  | 4,650 |  |  | — |  |  | 4,650 |
Accrued expenses and other current liabilities |  | 3,615 |  |  | 35 |  |  | 3,650 |
Total current liabilities |  | 40,262 |  |  | 35 |  |  | 40,297 |
Non-current liabilities: |  |  |  |  |  |
Revolving credit facility |  | 90,000 |  |  | — |  |  | 90,000 |
Asset retirement obligations |  | 1,440 |  |  | 1,737 |  |  | 3,177 |
Deferred tax liability |  | 17 |  |  | — |  |  | 17 |
Other non-current liabilities |  | 9,625 |  |  | 185 |  |  | 9,810 |
Total non-current liabilities |  | 101,082 |  |  | 1,922 |  |  | 103,004 |
Equity: |  |  |  |  |  |
Predecessors division equity |  | — |  |  | 35,590 |  |  | 35,590 |
Common unitholders - public (9,200,000 units issued and outstanding) |  | 178,728 |  |  | — |  |  | 178,728 |
Common unitholders - Delek (2,799,258 units issued and outstanding) |  | (127,129 | ) |  | — |  |  | (127,129 | )
Subordinated unitholders - Delek (11,999,258 units issued and outstanding) |  | 52,875 |  |  | — |  |  | 52,875 |
General Partner unitholders - Delek (489,766 units issued and outstanding) |  | (49 | ) |  | — |  |  | (49 | )
Total equity |  | 104,425 |  |  | 35,590 |  |  | 140,015 |
Total liabilities and equity |  | $ | 245,769 |  |  | $ | 37,547 |  |  | $ | 283,316 |
Combined Consolidated Statements of Income
|  | Delek Logistics |  | Tyler Terminal and Tank Assets |  | Year Ended
|  | Partners, LP |  | (Tyler Predecessor) |  | December 31, 2013
|  |  |  | (In thousands) |  |
Net Sales |  | $ | 907,428 |  |  | $ | — |  |  | $ | 907,428 |
Operating costs and expenses: |  |  |  |  |  |
Cost of goods sold |  | 811,364 |  |  | — |  |  | 811,364 |
Operating expenses |  | 25,801 |  |  | 4,501 |  |  | 30,302 |
General and administrative expenses |  | 6,254 |  |  | 602 |  |  | 6,856 |
Depreciation and amortization |  | 10,686 |  |  | 1,750 |  |  | 12,436 |
Loss on asset disposals |  | 166 |  |  | — |  |  | 166 |
Total operating costs and expenses |  | 854,271 |  |  | 6,853 |  |  | 861,124 |
Operating income (loss) |  | 53,157 |  |  | (6,853 | ) |  | 46,304 |
Interest expense, net |  | 4,570 |  |  | — |  |  | 4,570 |
Net income (loss) before income tax expense |  | 48,587 |  |  | (6,853 | ) |  | 41,734 |
Income tax expense |  | 757 |  |  | — |  |  | 757 |
Net income (loss) |  | 47,830 |  |  | (6,853 | ) |  | 40,977 |
Less: (Loss) attributable to Predecessors |  | — |  |  | (6,853 | ) |  | (6,853 | )
Net income attributable to partners |  | $ | 47,830 |  |  | $ | — |  |  | $ | 47,830 |
|  |  |  | Tyler Terminal and |  | Year Ended
|  | Delek Logistics |  | Tank Assets |  | December 31, 2012
|  | Partners, LP |  | (Tyler Predecessor) |  | (Predecessors)
|  |  |  | (In thousands) |  |
Net Sales |  | $ | 1,022,586 |  |  | $ | — |  |  | $ | 1,022,586 |
Operating costs and expenses: |  |  |  |  |  |
Cost of goods sold |  | 959,434 |  |  | — |  |  | 959,434 |
Operating expenses |  | 23,362 |  |  | 7,035 |  |  | 30,397 |
General and administrative expenses |  | 8,389 |  |  | 761 |  |  | 9,150 |
Depreciation and amortization |  | 8,675 |  |  | 1,445 |  |  | 10,120 |
Loss on asset disposals |  | 9 |  |  | — |  |  | 9 |
Total operating costs and expenses |  | 999,869 |  |  | 9,241 |  |  | 1,009,110 |
Operating income (loss) |  | 22,717 |  |  | (9,241 | ) |  | 13,476 |
Interest expense, net |  | 2,682 |  |  | — |  |  | 2,682 |
Net income (loss) before income tax expense |  | 20,035 |  |  | (9,241 | ) |  | 10,794 |
Income tax benefit |  | (14,024 | ) |  | — |  |  | (14,024 | )
Net income (loss) |  | 34,059 |  |  | (9,241 | ) |  | 24,818 |
Less: Income (loss) attributable to Predecessors |  | 25,649 |  |  | (9,241 | ) |  | 16,408 |
Net income attributable to partners |  | $ | 8,410 |  |  | $ | — |  |  | $ | 8,410 |
|  | Delek Logistics |  | Tyler Terminal and |  | Year Ended
|  | Partners, LP |  | Tank Assets |  | December 31, 2011
|  | (DKL Predecessor) |  | (Tyler Predecessor) |  | (Predecessors)
|  |  |  | (In thousands) |  |
Net Sales |  | $ | 744,079 |  |  | $ | — |  |  | $ | 744,079 |
Operating costs and expenses: |  |  |  |  |  |
Cost of goods sold |  | 700,505 |  |  | — |  |  | 700,505 |
Operating expenses |  | 12,940 |  |  | 6,527 |  |  | 19,467 |
General and administrative expenses |  | 5,795 |  |  | 688 |  |  | 6,483 |
Depreciation and amortization |  | 4,820 |  |  | 1,241 |  |  | 6,061 |
Gain on disposal of assets |  | (2 | ) |  | — |  |  | (2 | )
Total operating costs and expenses |  | 724,058 |  |  | 8,456 |  |  | 732,514 |
Operating income (loss) |  | 20,021 |  |  | (8,456 | ) |  | 11,565 |
Interest expense, net |  | 2,011 |  |  | — |  |  | 2,011 |
Income (loss) before income tax expense |  | 18,010 |  |  | (8,456 | ) |  | 9,554 |
Income tax expense |  | 5,363 |  |  | — |  |  | 5,363 |
Net income (loss) |  | 12,647 |  |  | (8,456 | ) |  | 4,191 |
Less: (Loss) income attributable to Predecessors |  | 12,647 |  |  | (8,456 | ) |  | 4,191 |
Net income attributable to partners |  | $ | — |  |  | $ | — |  |  | $ | — |
Hopewell Acquisition On July 19, 2013, the Partnership purchased from Enterprise TE Products Pipeline Company LLC a 13.5 mile pipeline (the "Hopewell Pipeline") that originates at the Tyler Refinery and terminates at the Hopewell Station, where it effectively connects to the Big Sandy Pipeline. The Hopewell Pipeline and the Big Sandy Pipeline form essentially one pipeline link between the Tyler Refinery and the Big Sandy Terminal (the "Tyler-Big Sandy Pipeline"). The aggregate purchase price was approximately $5.7 million. The allocation of the purchase price was based primarily upon a preliminary valuation. During 2013, we adjusted certain of the acquisition-date fair values previously disclosed, based primarily on an analysis of intangible assets. The preliminary valuation is subject to change during the purchase price allocation period. The preliminary allocation of the aggregate purchase price of the Hopewell Pipeline as of December 31, 2013 is summarized as follows (in thousands):
Property, plant and equipment | $ | 4,836 |
Intangible assets | 864 |
Total | $ | 5,700 |
Amended and Restated Services Agreement (Big Sandy Terminal and Pipeline). In connection with the acquisition of the Hopewell Pipeline, on July 25, 2013, the Partnership and Delek entered into the Amended and Restated Services Agreement (Big Sandy Terminal and Pipeline), which amended and restated the Terminalling Services Agreement dated November 7, 2012 for the Big Sandy Terminal to include, among other things, a minimum throughput commitment and a per barrel throughput fee that Delek will pay us for throughput along the Tyler-Big Sandy Pipeline. See Note 18 for additional information on this agreement. Pro Forma Financial Information - Hopewell Acquisition We began consolidating the results of operations of the Hopewell Pipeline on July 19, 2013. Although the Hopewell Pipeline has not been operational since prior to January 1, 2012 due to required maintenance to return it to service, Delek paid to us pipeline fees for the Hopewell Pipeline during the year ended December 31, 2013. The Hopewell Pipeline contributed $0.4 million to net sales and a net loss of $0.5 million for the year ended December 31, 2013. The maintenance required to return the Hopewell Pipeline to service and thereby connect it to the Big Sandy Pipeline was completed in the fourth quarter 2013. Below are the unaudited pro forma consolidated results of operations for the years ended December 31, 2013 and 2012, as if these acquisitions had occurred on January 1, 2012 (in thousands):
|  | Year Ended December 31,
|  | 2013 |  | 2012
Net sales |  | $ | 908,382 |  |  | $ | 1,023,540 |
Net income |  | $ | 41,291 |  |  | $ | 25,132 |
Big Sandy Acquisition On February 7, 2012, Delek Marketing-Big Sandy, LLC 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"). The aggregate purchase price was approximately $11.0 million. Big Sandy has previously been supplied by the Tyler Refinery but has been idle since November 2008. Big Sandy was contributed to the Partnership as part of the Offering. The allocation of the aggregate purchase price of Big Sandy as of December 31, 2013 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 |
Nettleton Acquisition On January 31, 2012, Delek Crude Logistics, LLC completed the acquisition of an approximately 35-mile long, eight- and ten-inch pipeline system (the "Nettleton Pipeline") from Plains Marketing, L.P. (“Plains”). The purchase price was approximately $12.3 million. The Nettleton Pipeline is used exclusively to transport crude oil from our tank farms in and around Longview, Texas to the Bullard Junction at the Tyler Refinery. During the year ended December 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 Nettleton, 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 Nettleton Pipeline was contributed to the Partnership as part of the Offering. The allocation of the aggregate purchase price of the Nettleton Pipeline as of December 31, 2013 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 |
Pro Forma Financial Information - Nettleton and the Big Sandy Terminal 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 $9.0 million and $7.2 million to net sales and net income, respectively, for the year ended December 31, 2013. Big Sandy contributed $1.5 million and $1.2 million to sales and net income, respectively, for the year ended December 31, 2013. Below are the pro forma consolidated results of operations of the Predecessor for the year ended December 31, 2012, as if these acquisitions had occurred on January 1, 2012 (amounts in thousands):
|  | Year Ended December 31,
|  | 2012
Net sales |  | $ | 1,022,715 |
Net income |  | $ | 24,941 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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