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Business Combinations (Notes)
 12 Months Ended
Dec. 31, 2013
Business Combinations [Abstract]  
Business Combination Disclosure

During 2013, we acquired certain refined petroleum products pipelines and terminals from Plains All American Pipeline, L.P. We have accounted for this acquisition as a business combination under the acquisition method of accounting in accordance with ASC 805, Business Combinations. The acquisition was completed in two parts, as follows:

•
New Mexico/Texas System. In July 2013, we acquired a 250-mile pipeline that transports refined petroleum products from El Paso, Texas north to Albuquerque, New Mexico and transports products south to the U.S.–Mexico border for delivery within Mexico via a third-party pipeline for $57.0 million, which we funded with cash on hand. This pipeline system serves as a natural extension of our existing refined products pipeline system and allows us to provide options to customers in Albuquerque and central New Mexico to access refined products from West Texas, Gulf Coast and Mid-Continent refiners. The operating results have been included in our refined products segment since the acquisition date.

•
Rocky Mountain System. In November 2013, we acquired approximately 550 miles of common carrier pipeline that distributes refined petroleum products in Colorado, South Dakota and Wyoming. The system includes four terminals with nearly 1.7 million barrels of storage. We funded this $135.0 million acquisition primarily with proceeds from our debt offering in October 2013. This pipeline system is a strategic fit with our existing assets and customer relationships and extends the reach of our pipeline system to allow us to serve new geographic markets. The operating results have been included in our refined products segment since the acquisition date.

We have completed our appraisal of the assets acquired with the New Mexico/Texas pipeline system and the fair values and purchase price allocations for these assets are final; however, we are still in the process of completing an appraisal of the Rocky Mountain system assets acquired in November 2013. Our final determination of the fair value of these assets and the allocation of the purchase price will be made when that valuation process has been completed. The purchase price and initial assessment of the fair value of the assets acquired and liabilities assumed in the business combination we completed during 2013 were as follows (in thousands):
Purchase price allocation:
$
192,000

Fair value of assets acquired (liabilities assumed):
 
Property, plant and equipment
$
192,422

Other current assets
2,048

Current environmental liabilities
(2,470
)
Total
$
192,000



The following amounts from our business combination were included in our operating results since the date of acquisition through December 31, 2013 (in thousands):
Revenue
$
12,661

Operating profit
$
6,400



The following summarized pro forma consolidated income statement information assumes that the acquisition of a business during 2013 referred to above occurred as of January 1, 2012. These pro forma results are for comparative purposes only and may not be indicative of the results that would have occurred had this acquisition been completed on January 1, 2012 or the results that will be attained in the future (in thousands).

 
 
Year Ended December 31, 2012
 
Year Ended December 31, 2013
 
 
As Reported
 
Pro-Forma
 
As Reported
 
Pro-Forma
Revenue
 
$
1,772,074

 
$
1,812,635

 
$
1,897,606

 
$
1,924,316

Net income
 
$
435,670

 
$
442,096

 
$
582,237

 
$
591,377



Significant pro forma adjustments include historical results of the acquired assets and our calculation of G&A expense, depreciation expense and interest expense on borrowings necessary to finance this acquisition. Acquisition and start-up costs related to the assets acquired totaling $2.8 million were recorded to operating expenses during 2013. These costs were reclassified from 2013 to 2012, as the acquisition was assumed to have been completed January 1, 2012 for this presentation.