Equity Method Investments

12 Months Ended

Dec. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

In May 2019, the Partnership, through its wholly owned indirect subsidiary DKL Pipeline, LLC (“DKL Pipeline”), entered into a Contribution and Subscription Agreement (the “Contribution Agreement”) with Plains Pipeline, L.P. (“Plains”) and Red River Pipeline Company LLC (“Red River”). Pursuant to the Contribution Agreement, DKL Pipeline contributed $124.7 million, substantially all of which was financed by borrowings under the DKL Credit Facility, to Red River in exchange for a 33% membership interest in Red River and DKL Pipeline’s admission as a member of Red River. In addition, we contributed $0.4 million of start up capital pursuant to the Amended and Restated Limited Liability Company Agreement. During the third quarter of 2020, Red River, which owns a crude oil pipeline running from Cushing, Oklahoma to Longview, Texas, completed a planned expansion project to increase the pipeline capacity and commenced operations on the completed expansion project on October 1, 2020. We contributed $3.5 million related to such expansion project in May 2019 and during 2020 made additional capital contributions of $12.2 million based on capital calls received. During the year ended December 31, 2021, we made additional capital contributions totaling $1.4 million based on capital calls received.

Summarized financial information for Red River on a 100% basis is shown below (in thousands):


	Year Ended		Year Ended
	December 31, 2021		December 31, 2020
Current Assets	$	28,735	$	13,488
Non-current Assets	$	403,692	$	413,259
Current liabilities	$	10,040	$	7,789


	Year Ended		Year Ended		For the period
	December 31, 2021		December 31, 2020		April 24, 2019 - December 31, 2019
Revenues	$	68,057	$	51,001	$	38,352
Gross profit	$	41,121	$	31,103	$	25,919
Operating income	$	40,436	$	30,382	$	25,497
Net income	$	40,390	$	30,404	$	25,548

We have two additional joint ventures that have constructed separate crude oil pipeline systems and related ancillary assets, which are serving third parties and subsidiaries of Delek Holdings. We own a 50% membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P. ("CP LLC") to operate one of these pipeline systems and a 33% membership interest in the entity formed with Andeavor Logistics RIO Pipeline LLC ("Andeavor Logistics"), formerly known as Rangeland Energy II, LLC ("Rangeland Energy") to operate the other pipeline system.

Combined summarized financial information for these two equity method investees on a 100% basis is shown below (in thousands):


	Year Ended		Year Ended
	December 31, 2021		December 31, 2020
Current assets	$	15,010	$	20,763
Non-current assets	$	242,599	$	253,862
Current liabilities	$	1,492	$	1,496


	Year Ended		Year Ended		Year Ended
	December 31, 2021		December 31, 2020		December 31, 2019
Revenues	$	46,335	$	55,482	$	48,703
Gross profit	$	26,688	$	36,904	$	30,473
Operating income	$	24,587	$	34,951	$	28,503
Net Income	$	24,589	$	34,977	$	28,601

The Partnership's investments in these three entities were financed through a combination of cash from operations and borrowings under the DKL Credit Facility. The Partnership's investment balances in these joint ventures were as follows (in thousands):


	Year Ended	Year Ended
	December 31, 2021	December 31, 2020
Red River	144,041	141,803
CP LLC	61,670	62,771
Andeavor Logistics	44,319	49,101

We do not consolidate any part of the assets or liabilities or operating results of our equity method investees. Our share of net income or loss of the investees will increase or decrease, as applicable, the carrying value of our investments in unconsolidated affiliates. With respect to our equity method investments, we determined that these entities do not represent variable interest entities and consolidation is not required. We have the ability to exercise significant influence over each of these joint ventures through our participation in the management committees, which make all significant decisions. However, since all significant decisions require the consent of the other investor(s) without regard to economic interest, we have determined that we have joint control and have applied the equity method of accounting. Our investment in these joint ventures is reflected in our investments in pipeline joint ventures segment.