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Acquisitions (Notes) | 12 Months Ended
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Dec. 31, 2015
Acquisitions [Abstract] |
Acquisitions | Acquisitions Acquisitions from Delek The Partnership completed various transactions with Delek and our general partner during the years ended December 31, 2015, 2014 and 2013 pursuant to which we acquired the following assets from Delek:
• | the El Dorado Assets effective March 31, 2015 for approximately $42.5 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility.
• | the Tyler Assets effective March 31, 2015 for approximately $19.4 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility.
• | the El Dorado Terminal and Tank Assets effective February 10, 2014 for $95.9 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility.
• | the Tyler Terminal and Tank Assets effective July 26, 2013 for $94.8 million in cash.
Financial Results of the El Dorado Assets and the Tyler Assets The acquisitions of the El Dorado Assets and the Tyler Assets were considered transfers of businesses between entities under common control. Accordingly, the El Dorado Offloading Racks Acquisition and the Tyler Crude Tank Acquisition were recorded at amounts based on Delek's historical carrying value as of each respective acquisition date, which were $7.6 million and $11.6 million as of March 31, 2015, respectively. Our historical financial statements have been retrospectively adjusted to reflect the results of operations, financial position, cash flows and equity attributable to the El Dorado Assets and the Tyler Assets as if we owned the assets for all periods presented. The results of the El Dorado Assets and the Tyler Assets are included in the pipelines and transportation segment. The following amounts associated with the El Dorado Assets and the Tyler Assets subsequent to March 31, 2015, are included in the consolidated statements of income and comprehensive income of the Partnership (in thousands):
|  | Year Ended
|  | December 31, 2015
El Dorado Assets |  |
Total operating revenues |  | $ | 4,449 |
Net income attributable to the Partnership |  | $ | 3,277 |
Costs associated with the acquisition |  | $ | 235 |
Tyler Assets |  |
Total operating revenues |  | $ | 1,620 |
Net income attributable to the Partnership |  | $ | 1,035 |
Costs associated with the acquisition |  | $ | 240 |
The results of the El Dorado Assets operations and the Tyler Assets operations prior to the completion of the El Dorado Offloading Racks Acquisition and the Tyler Crude Tank Acquisition on March 31, 2015 have been included in the El Dorado Assets Predecessor and Tyler Assets Predecessor results in the tables below. The results of the El Dorado Assets and the Tyler Assets subsequent to March 31, 2015 have been included in the Partnership's results. The tables below present our balance sheet and results of operations, the effect of including the results of the El Dorado Assets and the Tyler Assets, and the adjusted total amounts included in our consolidated financial statements. Consolidated Balance Sheet as of December 31, 2014
|  | Delek Logistics Partners, LP |  | El Dorado Assets Predecessor |  | Tyler Assets Predecessor |  | December 31, 2014
|  | (In thousands)
ASSETS
Current Assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,861 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,861 |
Accounts receivable |  | 27,986 |  |  | — |  |  | — |  |  | 27,986 |
Inventory |  | 10,316 |  |  | — |  |  | — |  |  | 10,316 |
Deferred tax assets |  | 28 |  |  | — |  |  | — |  |  | 28 |
Other current assets |  | 768 |  |  | — |  |  | — |  |  | 768 |
Total current assets |  | 40,959 |  |  | — |  |  | — |  |  | 40,959 |
Property, plant and equipment: |  |  |  |  |  |  |  |
Property, plant and equipment |  | 288,045 |  |  | 8,267 |  |  | 11,776 |  |  | 308,088 |
Less: accumulated depreciation |  | (52,992 | ) |  | (317 | ) |  | — |  |  | (53,309 | )
Property, plant and equipment, net |  | 235,053 |  |  | 7,950 |  |  | 11,776 |  |  | 254,779 |
Goodwill |  | 11,654 |  |  | — |  |  | — |  |  | 11,654 |
Intangible assets, net |  | 16,520 |  |  | — |  |  | — |  |  | 16,520 |
Other non-current assets |  | 7,374 |  |  | — |  |  | — |  |  | 7,374 |
Total assets |  | $ | 311,560 |  |  | $ | 7,950 |  |  | $ | 11,776 |  |  | $ | 331,286 |
LIABILITIES AND EQUITY
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 17,929 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,929 |
Accounts payable to related parties |  | 628 |  |  | — |  |  | — |  |  | 628 |
Excise and other taxes payable |  | 5,443 |  |  | — |  |  | — |  |  | 5,443 |
Tank inspection liabilities |  | 2,829 |  |  | — |  |  | — |  |  | 2,829 |
Pipeline release liabilities |  | 1,899 |  |  | — |  |  | — |  |  | 1,899 |
Accrued expenses and other current liabilities |  | 1,588 |  |  | — |  |  |  |  | 1,588 |
Total current liabilities |  | 30,316 |  |  | — |  |  | — |  |  | 30,316 |
Non-current liabilities: |  |  |  |  |  |  |  |
Revolving credit facility |  | 251,750 |  |  | — |  |  | — |  |  | 251,750 |
Asset retirement obligations |  | 3,319 |  |  | — |  |  | — |  |  | 3,319 |
Deferred tax liabilities |  | 231 |  |  | — |  |  | — |  |  | 231 |
Other non-current liabilities |  | 5,889 |  |  | — |  |  | — |  |  | 5,889 |
Total non-current liabilities |  | 261,189 |  |  | — |  |  | — |  |  | 261,189 |
Equity: |  |  |  |  |  |  |  |
Predecessors division equity |  | — |  |  | 7,950 |  |  | 11,776 |  |  | 19,726 |
Common unitholders - public (9,417,189 units issued and outstanding) |  | 194,737 |  |  | — |  |  | — |  |  | 194,737 |
Common unitholders - Delek (2,799,258 units issued and outstanding) |  | (241,112 | ) |  | — |  |  | — |  |  | (241,112 | )
Subordinated unitholders - Delek (11,999,258 units issued and outstanding) |  | 73,515 |  |  | — |  |  | — |  |  | 73,515 |
General Partner unitholders - Delek (494,197 units issued and outstanding) |  | (7,085 | ) |  | — |  |  | — |  |  | (7,085 | )
Total equity |  | 20,055 |  |  | 7,950 |  |  | 11,776 |  |  | 39,781 |
Total liabilities and equity |  | $ | 311,560 |  |  | $ | 7,950 |  |  | $ | 11,776 |  |  | $ | 331,286 |
Consolidated Statements of Income
|  | Delek Logistics Partners, LP |  | El Dorado Assets Predecessor |  | Tyler Assets Predecessor |  | Year Ended December 31, 2015
|  | (In thousands)
Net Sales |  | $ | 589,669 |  |  | $ | — |  |  | $ | — |  |  | $ | 589,669 |
Operating costs and expenses: |  |  |  |  |  |  |  |
Cost of goods sold |  | 436,304 |  |  | — |  |  | — |  |  | 436,304 |
Operating expenses |  | 44,756 |  |  | 167 |  |  | — |  |  | 44,923 |
General and administrative expenses |  | 11,384 |  |  | — |  |  | — |  |  | 11,384 |
Depreciation and amortization |  | 19,222 |  |  | 372 |  |  | 98 |  |  | 19,692 |
Loss on asset disposals |  | 104 |  |  | — |  |  | — |  |  | 104 |
Total operating costs and expenses |  | 511,770 |  |  | 539 |  |  | 98 |  |  | 512,407 |
Operating income (loss) |  | 77,899 |  |  | (539 | ) |  | (98 | ) |  | 77,262 |
Interest expense, net |  | 10,658 |  |  | — |  |  | — |  |  | 10,658 |
Loss on equity method investments |  | 588 |  |  | — |  |  | — |  |  | 588 |
Total non-operating expenses |  | 11,246 |  |  | — |  |  | — |  |  | 11,246 |
Income (loss) before income tax benefit |  | 66,653 |  |  | (539 | ) |  | (98 | ) |  | 66,016 |
Income tax benefit |  | (195 | ) |  | — |  |  | — |  |  | (195 | )
Net income (loss) |  | 66,848 |  |  | (539 | ) |  | (98 | ) |  | 66,211 |
Less: loss attributable to Predecessors |  | — |  |  | (539 | ) |  | (98 | ) |  | (637 | )
Net income attributable to partners |  | $ | 66,848 |  |  | $ | — |  |  | $ | — |  |  | $ | 66,848 |
|  | Delek Logistics Partners, LP |  | El Dorado Assets Predecessor |  | Year Ended December 31, 2014 (1)
|  | (In thousands)
Net Sales |  | $ | 841,253 |  |  | $ | — |  |  | $ | 841,253 |
Operating costs and expenses: |  |  |  |  |  |
Cost of goods sold |  | 697,221 |  |  | — |  |  | 697,221 |
Operating expenses |  | 38,003 |  |  | 679 |  |  | 39,465 |
General and administrative expenses |  | 10,570 |  |  | — |  |  | 10,616 |
Depreciation and amortization |  | 14,591 |  |  | 317 |  |  | 15,022 |
Loss on asset disposals |  | 83 |  |  | — |  |  | 83 |
Total operating costs and expenses |  | 760,468 |  |  | 996 |  |  | 762,407 |
Operating income (loss) |  | 80,785 |  |  | (996 | ) |  | 78,846 |
Interest expense, net |  | 8,656 |  |  | — |  |  | 8,656 |
Income (loss) before income tax expense |  | 72,129 |  |  | (996 | ) |  | 70,190 |
Income tax expense |  | 132 |  |  | — |  |  | 132 |
Net income (loss) |  | 71,997 |  |  | (996 | ) |  | 70,058 |
Less: loss attributable to Predecessors |  | — |  |  | (996 | ) |  | (1,939 | )
Net income attributable to partners |  | $ | 71,997 |  |  | $ | — |  |  | $ | 71,997 |
|  | Delek Logistics Partners, LP |  | El Dorado Assets Predecessor |  | Year Ended December 31, 2013 (1)
|  | (In thousands)
Net Sales |  | $ | 907,428 |  |  | $ | — |  |  | $ | 907,428 |
Operating costs and expenses: |  |  |  |  |  |
Cost of goods sold |  | 811,364 |  |  | — |  |  | 811,364 |
Operating expenses |  | 35,640 |  |  | 263 |  |  | 35,903 |
General and administrative expenses |  | 7,526 |  |  | — |  |  | 7,526 |
Depreciation and amortization |  | 13,738 |  |  | — |  |  | 13,738 |
Loss on asset disposals |  | 166 |  |  | — |  |  | 166 |
Total operating costs and expenses |  | 868,434 |  |  | 263 |  |  | 868,697 |
Operating income (loss) |  | 38,994 |  |  | (263 | ) |  | 38,731 |
Interest expense, net |  | 4,570 |  |  | — |  |  | 4,570 |
Income (loss) before income tax expense |  | 34,424 |  |  | (263 | ) |  | 34,161 |
Income tax expense |  | 757 |  |  | — |  |  | 757 |
Net income (loss) |  | 33,667 |  |  | (263 | ) |  | 33,404 |
Less: loss attributable to Predecessors |  | (14,163 | ) |  | (263 | ) |  | (14,426 | )
Net income attributable to partners |  | $ | 47,830 |  |  | $ | — |  |  | $ | 47,830 |
(1) | There were no expenses associated with the Tyler Assets Predecessor included in our consolidated financial statements for the years ended December 31, 2014 and 2013, as the Tyler Assets were not fully constructed and were not placed into service until January 2015. Additionally, prior to the Tyler Crude Tank Acquisition, the Tyler Assets Predecessor did not record revenues for intercompany storage services.
Acquisitions from Third Parties During the years ended December 31, 2014 and 2013, we acquired certain transportation, pipeline and terminalling assets to complement our existing assets, provide enhanced logistical capabilities and further our presence in certain areas. The acquisitions include the following:
• | On December 17, 2014 we acquired substantially all of the assets of Frank Thompson Transport, Inc. ("FTT"), a company that primarily hauled crude oil and asphalt products by transport truck, including 123 trucks and 205 trailers (the "FTT Assets").
• | On October 1, 2014 we acquired from an affiliate of Magellan Midstream Partners, LP (i) a light products terminal in Mount Pleasant, Texas consisting of approximately 200,000 barrels of light product storage capacity, three truck loading lanes and ethanol blending capability (the "Mount Pleasant Terminal"), (ii) a light products storage facility in Greenville, Texas with approximately 325,000 barrels of storage capacity and a connection to the Explorer Pipeline System, a common carrier pipeline owned by a third party (the "Greenville Storage Facility"), and (iii) a 76-mile pipeline connecting the locations (the "Greenville-Mount Pleasant Pipeline"). The Mount Pleasant Terminal, the Greenville Storage Facility and the Greenville-Mount Pleasant Pipeline are hereinafter collectively referred to as the "Greenville-Mount Pleasant Assets."
• | On October 24, 2013, we acquired from Enterprise Refined Products Company, LLC a refined product terminal in Little Rock, Arkansas consisting of a total of three products tanks with effective capacity of 140,000 barrels and a truck rack with throughput capacity of up to 10,000 bpd (the "North Little Rock Terminal").
• | On July 19, 2013, we acquired a 13.5-mile pipeline and certain ancillary assets (the "Hopewell Pipeline"), including a related delivery station (the "Hopewell Station") and pumps. The Hopewell Pipeline originates at the Tyler Refinery and terminates at the Hopewell Station, where it effectively connects to a 19-mile pipeline (the "Big Sandy Pipeline") that was owned by the Partnership at the time the Hopewell Pipeline was acquired and that originates at our light petroleum products terminal located in Big Sandy, Texas. 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").
Purchase Price Allocations - Acquisitions from Third Parties The following table summarizes the allocation of the aggregate purchase price for each of the third party acquisitions described above (in thousands):
| FTT Assets (1) |  | Greenville-Mount Pleasant Assets (2) |  | North Little Rock Terminal |  | Hopewell
Property, plant and equipment | $ | 10,790 |  |  | $ | 4,829 |  |  | $ | 4,990 |  |  | $ | 3,538 |
Intangible assets | — |  |  | 5,171 |  |  | 10 |  |  | 984 |
Goodwill (3) | 549 |  |  | — |  |  | — |  |  | 1,200 |
Inventory | — |  |  | 1,125 |  |  | — |  |  | — |
Accounts Receivable | 1,767 |  |  | — |  |  | — |  |  | — |
Accounts Payable | (1,181 | ) |  | — |  |  | — |  |  | — |
Total | $ | 11,925 |  |  | $ | 11,125 |  |  | $ | 5,000 |  |  | $ | 5,722 |
(1) | During the fourth quarter of 2015, we finalized our purchase price allocation and adjusted certain of the acquisition-date fair values previously disclosed in connection with working capital adjustments and an additional $0.4 million of consideration paid for additional assets.
(2) | During the third quarter of 2015, we finalized our purchase price allocation and adjusted certain of the acquisition-date fair values previously disclosed.
(3) | All goodwill is expected to be deductible for tax purposes.
Pro Forma Financial Information - Acquisitions from Third Parties Below are the unaudited pro forma consolidated results of operations of the Partnership for the years ended December 31, 2014 and 2013, as if our 2014 acquisitions had occurred on January 1, 2013 (in thousands):
|  |  |  | Year Ended December 31, 2014 |  | Year Ended December 31, 2013
|  |  |  | As Reported |  | Pro Forma |  | As Reported |  | Pro Forma
FTT Assets: |  |  |  |  |  |  |  |  |  |
Net Sales |  |  |  | $ | 841,253 |  |  | $ | 854,842 |  |  | $ | 907,428 |  |  | $ | 921,017 |
Net income |  |  |  | $ | 70,058 |  |  | $ | 70,824 |  |  | $ | 33,404 |  |  | $ | 34,170 |
Greenville-Mount Pleasant Assets: |  |  |  |  |  |  |  |  |  |
Net Sales |  |  |  | $ | 841,253 |  |  | $ | 841,943 |  |  | $ | 907,428 |  |  | $ | 908,118 |
Net income |  |  |  | $ | 70,058 |  |  | $ | 69,621 |  |  | $ | 33,404 |  |  | $ | 32,967 |
Below are the unaudited pro forma consolidated results of operations of the Partnership for the year ended December 31, 2013, as if our 2013 acquisitions had occurred on January 1, 2012 (in thousands):
|  | Year Ended December 31, 2013
|  | As Reported |  | Pro Forma
North Little Rock Terminal: |  |  |  |
Net Sales |  | $ | 907,428 |  |  | $ | 908,867 |
Net income |  | $ | 33,404 |  |  | $ | 34,695 |
Hopewell: |  |  |  |
Net Sales |  | $ | 907,428 |  |  | $ | 908,382 |
Net income |  | $ | 33,404 |  |  | $ | 33,718 |

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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 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1497-128463 Reference 2: 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=56956515&loc=d3e1490-128463 Reference 3: 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=56956515&loc=d3e1392-128463 Reference 4: 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=35744584&loc=d3e7008-128479 Reference 5: 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=56956515&loc=d3e1486-128463 Reference 6: 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=35744584&loc=d3e6927-128479 Reference 7: 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=56956791&loc=d3e4845-128472 Reference 8: 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=56956515&loc=d3e1500-128463 Reference 9: 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=56956515&loc=d3e1524-128463 Reference 10: 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=35744584&loc=d3e7000-128479 Reference 11: 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=56956791&loc=d3e4922-128472 Reference 12: 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=56956791&loc=d3e4934-128472 Reference 13: 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=56956791&loc=d3e4926-128472 Reference 14: 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=56956515&loc=d3e1383-128463 Reference 15: 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=35744584&loc=d3e6996-128479 + Details
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