XML 66 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Segment Data (Notes)
 6 Months Ended
Jun. 30, 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, and crude oil, intermediate and finished products 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 policies 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 reportable segment based on 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 June 30, 2014
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
23,066

 
$
213,277

 
$
236,343

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
1,130

 
195,444

 
196,574

Operating expenses
 
7,745

 
1,799

 
9,544

Segment contribution margin
 
$
14,191

 
$
16,034

 
30,225

General and administrative expenses
 
 
 
 
 
2,242

Depreciation and amortization
 
 
 
 
 
3,532

Loss on asset disposals
 
 
 
 
 
74

Operating income
 
 
 
 
 
$
24,377

Total assets
 
$
222,115

 
$
92,324

 
$
314,439

 Capital spending (excluding business combinations)
 
$
212

 
$
756

 
$
968


 
 
Three Months Ended June 30, 2013
 
 
 
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
13,667

 
$
216,475

 
$
230,142

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
—

 
207,966

 
207,966

Operating expenses
 
8,064

 
1,864

 
9,928

Segment contribution margin
 
$
5,603

 
$
6,645

 
12,248

General and administrative expenses
 
 
 
 
 
1,521

Depreciation and amortization
 
 
 
 
 
3,284

Operating income
 
 
 
 
 
$
7,443

 Capital spending (excluding business combinations) (1)
 
$
2,542

 
$
883

 
$
3,425

            

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

 
 
Six Months Ended June 30, 2014
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
43,334

 
$
396,536

 
$
439,870

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
2,256

 
366,527

 
368,783

Operating expenses
 
14,744

 
4,119

 
18,863

Segment contribution margin
 
$
26,334

 
$
25,890

 
52,224

General and administrative expenses
 
 
 
 
 
4,905

Depreciation and amortization
 
 
 
 
 
7,009

Loss on asset disposals
 
 
 
 
 
74

Operating income
 
 
 
 
 
$
40,236

 Capital spending (excluding business combinations) (1)
 
$
1,149

 
$
784

 
$
1,933

            

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

 
 
Six Months Ended June 30, 2013
 
 
 
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Net sales
 
$
27,204

 
$
413,832

 
$
441,036

Operating costs and expenses:
 
 
 
 
 
 
Cost of goods sold
 
—

 
395,826

 
395,826

Operating expenses
 
15,478

 
3,531

 
19,009

Segment contribution margin
 
$
11,726

 
$
14,475

 
26,201

General and administrative expenses
 
 
 
 
 
3,723

Depreciation and amortization
 
 
 
 
 
6,825

Operating income
 
 
 
 
 
$
15,653

 Capital spending (excluding business combinations) (1)
 
$
6,058

 
$
1,081

 
$
7,139

            

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



Property, plant and equipment, accumulated depreciation and depreciation expense by reporting segment as of and for the three and six months ended June 30, 2014 were as follows (in thousands):
 
 
Pipelines and Transportation
 
Wholesale Marketing and Terminalling
 
Consolidated
Property, plant and equipment
 
$
247,241

 
$
19,195

 
$
266,436

Less: accumulated depreciation
 
(38,296
)
 
(7,547
)
 
(45,843
)
Property, plant and equipment, net
 
$
208,945

 
$
11,648

 
$
220,593

Depreciation expense for the three months ended June 30, 2014
 
$
2,561

 
$
706

 
$
3,267

Depreciation expense for the six months ended June 30, 2014
 
$
4,749

 
$
1,729

 
$
6,478


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.