Acquisitions | Acquisitions Acquisitions from Delek El Dorado Offloading Racks Acquisition On March 31, 2015 , the Partnership completed the El Dorado Offloading Racks Acquisition and acquired the El Dorado Assets. The purchase price paid for the El Dorado Assets acquired was $42.5 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility. In connection with the El Dorado Offloading Racks Acquisition, the Partnership and Delek entered into (i) an asset purchase agreement, (ii) a third amended and restated omnibus agreement, (iii) a throughput agreement with respect to the El Dorado Assets, (iv) a lease and access agreement, and (v) an amended and restated site services agreement. See Note 14 for additional information regarding certain of these agreements. Tyler Crude Tank Acquisition On March 31, 2015 , the Partnership completed the Tyler Crude Tank Acquisition and acquired the Tyler Assets, including the Tyler Crude Tank. The purchase price paid for the Tyler Assets was $19.4 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility. El Dorado Acquisition On February 10, 2014 , the Partnership completed the El Dorado Acquisition and acquired the El Dorado Terminal and Tank Assets. The purchase price paid for the assets acquired was approximately $95.9 million in cash. In connection with the El Dorado Acquisition, the Partnership and Delek entered into (i) an asset purchase agreement, (ii) a second amended and restated omnibus agreement, (iii) a throughput and tankage agreement with respect to the El Dorado Terminal and Tank Assets, (iv) a lease and access agreement, and (v) a site services agreement. Financial Results of the El Dorado Assets, the Tyler Assets and the El Dorado Terminal and Tank Assets The acquisitions of the El Dorado Assets, the Tyler Assets and the El Dorado Terminal and Tank Assets, were considered transfers of businesses between entities under common control. Accordingly, the El Dorado Offloading Racks Acquisition, the Tyler Crude Tank Acquisition and the El Dorado Acquisition, were recorded at amounts based on Delek's historical carrying values as of each respective acquisition date, which were $7.6 million as of March 31, 2015 , $11.6 million as of March 31, 2015 and $25.2 million as of February 10, 2014 , respectively. Our historical financial statements have been retrospectively adjusted to reflect the results of operations, financial position, cash flows and equity attributable to the El Dorado Assets, the Tyler Assets and the El Dorado Terminal and Tank Assets, as if we owned the assets for all periods presented. The results of the El Dorado Terminal are included in the wholesale marketing and terminalling segment, and the results of the El Dorado Assets, the Tyler Assets and the El Dorado Tank Assets, are included in the pipelines and transportation segment. The results of the El Dorado Assets' and the Tyler Assets' operations prior to the completion of the El Dorado Offloading Racks Acquisition and the Tyler Crude Tank Acquisition on March 31, 2015 have been included in the El Dorado Assets Predecessor results and the Tyler Assets Predecessor results in the tables below. The results of the El Dorado Terminal and Tank Assets' operations prior to the completion of the El Dorado Acquisition on February 10, 2014 have been included in the El Dorado Predecessor results in the tables below. The results of the El Dorado Terminal and Tank Assets' operations subsequent to February 10, 2014 , have been included in the Partnership's results. The tables on the following pages present our results of operations, the effect of including the results of the Logistics Assets and the El Dorado Terminal and Tank Assets and the adjusted total amounts included in our condensed consolidated financial statements. Condensed Combined Balance Sheet Delek Logistics Partners, LP El Dorado Assets (El Dorado Assets Predecessor) Tyler Assets (Tyler Assets Predecessor) December 31, 2014 (In thousands) ASSETS Current Assets: Cash and cash equivalents $ 1,861 $ — $ — $ 1,861 Accounts receivable 27,986 — — 27,986 Inventory 10,316 — — 10,316 Deferred tax assets 28 — — 28 Other current assets 768 — — 768 Total current assets 40,959 — — 40,959 Property, plant and equipment: Property, plant and equipment 288,045 8,267 11,776 308,088 Less: accumulated depreciation (52,992 ) (317 ) — (53,309 ) Property, plant and equipment, net 235,053 7,950 11,776 254,779 Goodwill 11,654 — — 11,654 Intangible assets, net 16,520 — — 16,520 Other non-current assets 7,374 — — 7,374 Total assets $ 311,560 $ 7,950 $ 11,776 $ 331,286 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 17,929 $ — $ — $ 17,929 Accounts payable to related parties 628 — — 628 Excise and other taxes payable 5,443 — — 5,443 Accrued expenses and other current liabilities 1,588 — — 1,588 Tank inspection liabilities 2,829 — — 2,829 Pipeline release liabilities 1,899 — — 1,899 Total current liabilities 30,316 — — 30,316 Non-current liabilities: Revolving credit facility 251,750 — — 251,750 Asset retirement obligations 3,319 — — 3,319 Deferred tax liabilities 231 — — 231 Other non-current liabilities 5,889 — — 5,889 Total non-current liabilities 261,189 — — 261,189 Equity: Predecessors division equity — 7,950 11,776 19,726 Common unitholders - public (9,417,189 units issued and outstanding) 194,737 — — 194,737 Common unitholders - Delek (2,799,258 units issued and outstanding) (241,112 ) — — (241,112 ) Subordinated unitholders - Delek (11,999,258 units issued and outstanding) 73,515 — — 73,515 General Partner unitholders - Delek (494,197 units issued and outstanding) (7,085 ) — — (7,085 ) Total equity 20,055 7,950 11,776 39,781 Total liabilities and equity $ 311,560 $ 7,950 $ 11,776 $ 331,286 Condensed Combined Statements of Operations Delek Logistics Partners, LP El Dorado Assets (El Dorado Assets Predecessor) Tyler Assets (Tyler Assets Predecessor) Six Months Ended June 30, 2015 (In thousands) Net Sales $ 315,646 $ — $ — $ 315,646 Operating costs and expenses: Cost of goods sold 240,901 — — 240,901 Operating expenses 21,408 167 — 21,575 General and administrative expenses 6,391 — — 6,391 Depreciation and amortization 8,774 372 98 9,244 Gain on asset disposals (18 ) — — (18 ) Total operating costs and expenses 277,456 539 98 278,093 Operating income (loss) 38,190 (539 ) (98 ) 37,553 Interest expense, net 4,773 — — 4,773 Loss on equity method investments 149 — — 149 Total non-operating costs and expenses 4,922 — — 4,922 Net income (loss) before income tax expense 33,268 (539 ) (98 ) 32,631 Income tax expense 317 — — 317 Net income (loss) 32,951 (539 ) (98 ) 32,314 Less: loss attributable to Predecessors — (539 ) (98 ) (637 ) Net income attributable to partners $ 32,951 $ — $ — $ 32,951 Delek Logistics Partners, LP El Dorado Assets (El Dorado Assets Predecessor) Three Months Ended June 30, 2014 (1) (In thousands) Net Sales $ 236,343 $ — $ 236,343 Operating costs and expenses: Cost of goods sold 196,574 — 196,574 Operating expenses 9,544 175 9,719 General and administrative expenses 2,242 — 2,242 Depreciation and amortization 3,532 91 3,623 Loss on asset disposals 74 — 74 Total operating costs and expenses 211,966 266 212,232 Operating income (loss) 24,377 (266 ) 24,111 Interest expense, net 2,342 — 2,342 Net income (loss) before income tax expense 22,035 (266 ) 21,769 Income tax expense 281 — 281 Net income (loss) 21,754 (266 ) 21,488 Less: loss attributable to Predecessors — (266 ) (266 ) Net income attributable to partners $ 21,754 $ — $ 21,754 Delek Logistics Partners, LP El Dorado Assets El Dorado Terminal and Tank Assets Six Months Ended June 30, 2014 (1) (In thousands) Net Sales $ 439,870 $ — $ — $ 439,870 Operating costs and expenses: Cost of goods sold 368,783 — — 368,783 Operating expenses 18,080 352 783 19,215 General and administrative expenses 4,859 — 46 4,905 Depreciation and amortization 6,895 91 114 7,100 Loss on asset disposals 74 — — 74 Total operating costs and expenses 398,691 443 943 400,077 Operating income (loss) 41,179 (443 ) (943 ) 39,793 Interest expense, net 4,325 — — 4,325 Net income (loss) before income tax expense 36,854 (443 ) (943 ) 35,468 Income tax expense 428 — — 428 Net income (loss) 36,426 (443 ) (943 ) 35,040 Less: Loss attributable to Predecessors — (443 ) (943 ) (1,386 ) Net income attributable to partners $ 36,426 $ — $ — $ 36,426 (1) There were no revenues or expenses associated with the Tyler Assets Predecessor included in our condensed consolidated financial statements for the three and six months ended June 30, 2014 as the Tyler Assets were not fully constructed and were not placed into service until January 2015. Acquisitions from Third Parties Trucking Assets Acquisition On December 17, 2014 , through a new subsidiary, DKL Transportation, LLC, we completed the purchase of substantially all of the assets of Frank Thompson Transport, Inc. ("FTT"), a company that primarily hauled crude oil and asphalt products by transport truck, to complement our existing assets and increase our overall third party business. The assets purchased from FTT include approximately 135 trucks and 205 trailers (the "FTT Assets"). Terminal and Pipeline Acquisition On October 1, 2014 , we completed the purchase from an affiliate of Magellan Midstream Partners, LP of (i) a light products terminal in Mount Pleasant, Texas (the "Mount Pleasant Terminal"), (ii) a light products storage facility in Greenville, Texas (the "Greenville Storage Facility"), (iii) a 76-mile pipeline connecting the locations (the "Greenville-Mount Pleasant Pipeline") and (iv) finished product and other related inventory. The Mount Pleasant Terminal, the Greenville Storage Facility and the Greenville-Mount Pleasant Pipeline are hereinafter collectively referred to as the "Greenville-Mount Pleasant Assets." The Mount Pleasant Terminal consists of approximately 200,000 barrels of light product storage capacity, three truck loading lanes and ethanol blending capability. The Greenville Storage Facility has approximately 325,000 barrels of storage capacity and is connected to the Explorer Pipeline System, which is a common carrier pipeline owned by a third party. We acquired the Greenville-Mount Pleasant Assets to complement our existing assets and provide enhanced logistical capabilities. Purchase Price Allocations - Acquisitions from Third Parties The following table summarizes the allocation of the aggregate purchase price for each of the third party acquisitions described above (in thousands): FTT Assets (1) Greenville-Mount Pleasant Assets (2) Property, plant and equipment $ 11,145 $ 4,829 Intangible assets — 5,171 Inventory — 1,125 Accounts receivable 1,901 — Accounts payable (1,121 ) — Total $ 11,925 $ 11,125 (1) During the six months ended June 30, 2015, we adjusted our previously disclosed purchase price allocation and certain of the acquisition date fair values in connection with working capital adjustments and an additional $0.4 million of consideration paid for additional assets. The property, plant and equipment, accounts receivable and accounts payable valuation are subject to change during the purchase price allocation period. (2) During the six months ended June 30, 2015, we adjusted our purchase price allocation and certain of the acquisition date fair values previously disclosed. The property, plant and equipment, intangible assets and inventory valuation are subject to change during the purchase price allocation period. Pro Forma Financial Information - Acquisitions from Third Parties Below are the unaudited pro forma consolidated results of operations of the Partnership for the three and six months ended June 30, 2014 , as if these acquisitions had occurred on January 1, 2014 (in thousands): Three Months Ended Six Months Ended June 30, 2014 June 30, 2014 FTT Assets: Net sales $ 239,871 $ 446,632 Net income $ 21,699 $ 35,418 Greenville-Mount Pleasant Assets: Net sales $ 236,516 $ 440,215 Net income $ 21,379 $ 34,822 |