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Segment Data (Notes)
 3 Months Ended
Mar. 31, 2014
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 February 10, 2014, we acquired the El Dorado Terminal and Tank Assets from Delek. Our historical financial statements have been retrospectively adjusted to reflect the results of operations attributable to the El Dorado Terminal and Tank Assets as if we owned the assets for all periods presented. The results of the El Dorado Terminal and the El Dorado Storage Tanks are included in the wholesale marketing and terminalling segment and the pipelines and transportation segment, respectively.
On July 26, 2013, we acquired the Tyler Terminal and Tank Assets from Delek. Our 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 March 31, 2014
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
20,268

 
$
183,259

 
$
203,527

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
1,126

 
171,083

 
172,209

Operating expenses
 
6,999

 
2,320

 
9,319

Segment contribution margin
 
$
12,143

 
$
9,856

 
21,999

General and administrative expenses
 
 
 
 
 
2,663

Depreciation and amortization
 
 
 
 
 
3,477

Operating income
 
 
 
 
 
$
15,859

Total assets
 
$
236,560

 
$
64,754

 
$
301,314

 Capital spending (excluding business combinations) (1)
 
$
937

 
$
28

 
$
965

            

(1) Capital spending includes expenditures incurred in connection with the assets acquired in the El Dorado Acquisition.
 
 
Three Months Ended March 31, 2013
 
 
 
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
13,537

 
$
197,357

 
$
210,894

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
—

 
187,860

 
187,860

Operating expenses
 
7,414

 
1,667

 
9,081

Segment contribution margin
 
$
6,123

 
$
7,830

 
13,953

General and administrative expenses
 
 
 
 
 
2,202

Depreciation and amortization
 
 
 
 
 
3,541

Operating income
 
 
 
 
 
$
8,210

 Capital spending (excluding business combinations) (1)
 
$
3,516

 
$
199

 
$
3,715

            

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



Property, plant and equipment, accumulated depreciation and depreciation expense by reporting segment as of and for the three months ended March 31, 2014 were as follows (in thousands):
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Property, plant and equipment
 
$
246,227

 
$
19,979

 
$
266,206

Less: accumulated depreciation
 
(35,726
)
 
(6,905
)
 
(42,631
)
Property, plant and equipment, net
 
$
210,501

 
$
13,074

 
$
223,575

Depreciation expense for the three months ended March 31, 2014
 
$
2,188

 
$
1,024

 
$
3,212


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.