Equity Method Investments

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

The Partnership owns a 33% membership interest in Red River Pipeline Company LLC ("Red River"), a joint venture operated with Plains Pipeline, L.P. Red River owns a 16-inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas with capacity of 235,000 bpd.

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


	As of March 31, 2023		As of December 31, 2022
Current Assets	$	28,249	$	33,365
Non-current Assets	$	392,238	$	394,267
Current liabilities	$	4,932	$	5,144


	Three Months Ended March 31,
		2023		2022
Revenues		$	18,952	$	22,686
Gross profit		$	11,487	$	15,601
Operating income		$	11,294	$	15,419
Net income		$	11,473	$	15,396

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):


	As of March 31, 2023		As of December 31, 2022
Current assets	$	18,049	$	18,888
Non-current assets	$	228,008	$	231,898
Current liabilities	$	1,740	$	1,973


	Three Months Ended March 31,
		2023		2022
Revenues		$	12,146	$	8,895
Gross profit		$	7,820	$	4,238
Operating income		$	6,646	$	3,568
Net Income		$	6,746	$	3,569

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):


	As of March 31, 2023		As of December 31, 2022
Red River	$	141,557	$	149,635
CP LLC	60,332		64,056
Andeavor Logistics	41,384		43,331
Total Equity Method Investments	$	243,273	$	257,022

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.