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Segment Data
 9 Months Ended
Sep. 30, 2021
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 pipeline and transportation segment provide crude oil gathering and crude oil, intermediate and refined products transportation and storage services to Delek Holdings' refining operations and independent third parties.
•The wholesale marketing and terminalling segment provides marketing services for the refined products output of the Delek Holdings' refineries, engages in wholesale activity at our terminals and terminals owned by third parties, whereby we purchase light product for sale and exchange to third parties, and provides terminalling services at our refined products terminals to independent third parties and Delek Holdings.
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 revenues less cost of materials and other and operating expenses, excluding depreciation and amortization.
The following is a summary of business segment operating performance as measured by contribution margin for the periods indicated:
(in thousands)Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Pipelines and Transportation
Net revenues:
Affiliate$70,879 $68,444 $199,591 $168,285 
Third party5,323 3,035 12,021 14,587 
Total pipelines and transportation 76,202 71,479 211,612 182,872 
Cost of materials and other15,170 14,342 42,595 31,622 
Operating expenses (excluding depreciation and amortization)13,680 10,749 34,710 31,936 
Segment contribution margin$47,352 $46,388 $134,307 $119,314 
Capital spending$2,570 $2,552 $9,946 $3,424 
Wholesale Marketing and Terminalling
Net revenues:
Affiliate (1)
$52,640 $26,966 $108,844 $121,454 
Third party60,785 43,823 190,562 118,980 
Total wholesale marketing and terminalling113,425 70,789 299,406 240,434 
Cost of materials and other89,959 46,350 232,400 174,255 
Operating expenses (excluding depreciation and amortization)3,665 3,481 12,232 9,487 
Segment contribution margin$19,801 $20,958 $54,774 $56,692 
Capital spending$1,566 $676 $4,580 $3,494 
Consolidated
Net revenues:
Affiliate$123,519 $95,410 $308,435 $289,739 
Third party66,108 46,858 202,583 133,567 
Total Consolidated189,627 142,268 511,018 423,306 
Cost of materials and other105,129 60,692 274,995 205,877 
Operating expenses (excluding depreciation and amortization presented below)17,345 14,230 46,942 41,423 
Contribution margin$67,153 $67,346 189,081 176,006 
General and administrative expenses6,141 6,122 17,018 16,973 
Depreciation and amortization10,156 9,459 30,862 24,452 
Other operating expense (income), net273 — 54 (107)
Operating income$50,583 $51,765 $141,147 $134,688 
Capital spending$4,136 $3,228 $14,526 $6,918 
(1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense related to a customer contract intangible asset. See Note 4 for additional information.
The following table summarizes the total assets for each segment as of September 30, 2021 and December 31, 2020 (in thousands). Assets for each segment include property, plant and equipment, equity method investments, intangible assets and inventory.
September 30, 2021December 31, 2020
Pipelines and transportation $692,901 $723,317 
Wholesale marketing and terminalling213,277 206,918 
Other24,365 26,182 
     Total assets930,543 $956,417 
Property, plant and equipment and accumulated depreciation as of September 30, 2021 and depreciation expense by reporting segment for the three and nine months ended September 30, 2021 were as follows (in thousands):
Pipelines and TransportationWholesale Marketing and TerminallingConsolidated
Property, plant and equipment$589,729 $115,176 $704,905 
Less: accumulated depreciation(199,867)(56,829)(256,696)
Property, plant and equipment, net$389,862 $58,347 $448,209 
Depreciation expense for the three months ended September 30, 2021$8,056 $2,100 $10,156 
Depreciation expense for the nine months ended September 30, 2021$24,918 $5,944 $30,862 
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, 2021.