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, as described in Note 2. 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.

During the year ended December 31, 2015, we acquired the Logistics Assets from Delek. Our historical financial statements have been retrospectively adjusted as appropriate to reflect the results of operations attributable to the Logistics Assets as if we owned the assets for all periods presented. The results of the Logistics Assets are included in the pipelines and transportation segment.

The following is a summary of business segment operating performance as measured by contribution margin for the period indicated (in thousands):



	Year Ended December 31,
	2017			2016			2015
Pipelines and Transportation
Net sales:
Affiliate	109,298			$	103,749		102,551
Third party	12,431			18,423			28,828
Total pipelines and transportation	121,729			122,172			131,379
Operating costs and expenses:
Cost of goods sold	18,210			19,425			19,607
Operating expenses	33,240			29,235			33,751
Segment contribution margin	$	70,279		$	73,512		$	78,021
Capital spending (excluding business combinations)	$	14,262		$	8,478		$	16,030

Wholesale Marketing and Terminalling
Net sales:
Affiliate	46,982			45,815			50,013
Third party	369,364			280,072			408,277
Total wholesale marketing and terminalling	416,346			325,887			458,290
Operating costs and expenses:
Cost of goods sold	354,680			282,733			416,697
Operating expenses	10,034			7,963			11,172
Segment contribution margin	$	51,632		$	35,191		$	30,421
Capital spending (excluding business combinations)	$	4,141		$	3,289		$	6,397

Consolidated
Net sales:
Affiliate	$	156,280		$	149,564		$	152,564
Third party	381,795			298,495			437,105
Total Consolidated	538,075			448,059			589,669
Operating costs and expenses:
Cost of goods sold	372,890			302,158			436,304
Operating expenses	43,274			37,198			44,923
Contribution margin	121,911			108,703			108,442
General and administrative expenses	11,840			10,256			11,384
Depreciation and amortization	21,914			20,813			19,692
(Gain) loss on asset disposals	(20		)	(16		)	104
Operating income	$	88,177		$	77,650		$	77,262
Capital spending (excluding business combinations)	$	18,403		$	11,767		$	22,427

The following table summarizes the total assets for each segment as of December 31, 2017 and 2016 (in thousands).



	Year Ended December 31,
	2017		2016
Pipelines and transportation	$	349,351	$	337,349
Wholesale marketing and terminalling	94,179		78,198
Total Assets	$	443,530	$	415,547