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