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Segment Data | 9 Months Ended
--- | ---
Sep. 30, 2017
Segment Reporting [Abstract] |
Segment Data | Segment Data We aggregate our operating segments into two reportable segments: (i) pipelines and transportation and (ii) wholesale marketing and terminalling:
• | The assets and investments reported in the pipelines and transportation segment provide 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 wholesale marketing and terminalling services to Delek's refining operations and independent third parties.
Our operating segments adhere to the 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 of its reportable segments based on segment contribution margin. Segment contribution margin is defined as net sales less cost of goods sold and operating expenses. The following is a summary of business segment operating performance as measured by contribution margin for the periods indicated (in thousands):
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, |  | September 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
Pipelines and Transportation |  |  |  |  |  |  |  |
Net sales: |  |  |  |  |  |  |  |
Affiliate |  | $ | 27,805 |  |  | $ | 25,238 |  |  | $ | 81,972 |  |  | $ | 77,680 |
Third party |  | 3,177 |  |  | 3,388 |  |  | 7,910 |  |  | 15,739 |
Total pipelines and transportation |  | 30,982 |  |  | 28,626 |  |  | 89,882 |  |  | 93,419 |
Operating costs and expenses: |  |  |  |  |  |  |  |
Cost of goods sold |  | 4,883 |  |  | 4,811 |  |  | 13,691 |  |  | 14,401 |
Operating expenses |  | 8,573 |  |  | 7,678 |  |  | 24,661 |  |  | 22,317 |
Segment contribution margin |  | $ | 17,526 |  |  | $ | 16,137 |  |  | $ | 51,530 |  |  | $ | 56,701 |
Capital spending (excluding business combinations) |  | $ | 2,918 |  |  | $ | 2,613 |  |  | $ | 6,715 |  |  | $ | 4,037 |
Wholesale Marketing and Terminalling |  |  |  |  |  |  |  |
Net sales: |  |  |  |  |  |  |  |
Affiliate |  | $ | 12,326 |  |  | $ | 11,122 |  |  | $ | 34,602 |  |  | $ | 34,134 |
Third party |  | 87,318 |  |  | 67,722 |  |  | 262,384 |  |  | 195,826 |
Total wholesale marketing and terminalling |  | 99,644 |  |  | 78,844 |  |  | 296,986 |  |  | 229,960 |
Operating costs and expenses: |  |  |  |  |  |  |  |
Cost of goods sold |  | 84,237 |  |  | 68,716 |  |  | 253,058 |  |  | 198,980 |
Operating expenses |  | 2,089 |  |  | 1,573 |  |  | 6,325 |  |  | 6,128 |
Segment contribution margin |  | $ | 13,318 |  |  | $ | 8,555 |  |  | $ | 37,603 |  |  | $ | 24,852 |
Capital spending (excluding business combinations) |  | $ | 868 |  |  | $ | 464 |  |  | $ | 1,981 |  |  | $ | 972 |
Consolidated |  |  |  |  |  |  |  |
Net sales: |  |  |  |  |  |  |  |
Affiliate |  | $ | 40,131 |  |  | $ | 36,360 |  |  | $ | 116,574 |  |  | $ | 111,814 |
Third party |  | 90,495 |  |  | 71,110 |  |  | 270,294 |  |  | 211,565 |
Total consolidated |  | 130,626 |  |  | 107,470 |  |  | 386,868 |  |  | 323,379 |
Operating costs and expenses: |  |  |  |  |  |  |  |
Cost of goods sold |  | 89,120 |  |  | 73,527 |  |  | 266,749 |  |  | 213,381 |
Operating expenses |  | 10,662 |  |  | 9,251 |  |  | 30,986 |  |  | 28,445 |
Contribution margin |  | 30,844 |  |  | 24,692 |  |  | 89,133 |  |  | 81,553 |
General and administrative expenses |  | 2,751 |  |  | 2,307 |  |  | 8,255 |  |  | 7,918 |
Depreciation and amortization |  | 5,462 |  |  | 5,356 |  |  | 16,397 |  |  | 15,164 |
(Gain) loss on asset disposals |  | (5 | ) |  | 28 |  |  | 2 |  |  | (16 | )
Operating income |  | $ | 22,636 |  |  | $ | 17,001 |  |  | $ | 64,479 |  |  | $ | 58,487 |
Capital spending (excluding business combinations) |  | $ | 3,786 |  |  | $ | 3,077 |  |  | $ | 8,696 |  |  | $ | 5,009 |
The following table summarizes the total assets for each segment as of September 30, 2017 and December 31, 2016 (in thousands).
|  | September 30, 2017 |  | December 31, 2016
Pipelines and transportation |  | $ | 344,260 |  |  | $ | 337,349 |
Wholesale marketing and terminalling |  | 78,598 |  |  | 78,198 |
Total assets |  | $ | 422,858 |  |  | $ | 415,547 |
Property, plant and equipment and accumulated depreciation as of September 30, 2017 and depreciation expense by reporting segment for the three and nine months ended September 30, 2017 were as follows (in thousands):
|  | Pipelines and Transportation |  | Wholesale Marketing and Terminalling |  | Consolidated
Property, plant and equipment |  | $ | 292,116 |  |  | $ | 65,416 |  |  | $ | 357,532 |
Less: accumulated depreciation |  | (80,008 | ) |  | (26,872 | ) |  | (106,880 | )
Property, plant and equipment, net |  | $ | 212,108 |  |  | $ | 38,544 |  |  | $ | 250,652 |
Depreciation expense for the three months ended September 30, 2017 |  | $ | 4,257 |  |  | $ | 940 |  |  | $ | 5,197 |
Depreciation expense for the nine months ended September 30, 2017 |  | $ | 12,821 |  |  | $ | 2,779 |  |  | $ | 15,600 |
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. There were no indicators of impairment of our property, plant and equipment as of September 30, 2017.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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