Acquisitions | Acquisitions Acquisitions from Delek The Partnership completed various transactions with Delek and our general partner during the years ended December 31, 2015 , 2014 and 2013 pursuant to which we acquired the following assets from Delek: • the El Dorado Assets effective March 31, 2015 for approximately $42.5 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility. • the Tyler Assets effective March 31, 2015 for approximately $19.4 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility. • the El Dorado Terminal and Tank Assets effective February 10, 2014 for $95.9 million in cash financed with borrowings under the Partnership's amended and restated senior secured revolving credit facility. • the Tyler Terminal and Tank Assets effective July 26, 2013 for $94.8 million in cash. Financial Results of the El Dorado Assets and the Tyler Assets The acquisitions of the El Dorado Assets and the Tyler Assets were considered transfers of businesses between entities under common control. Accordingly, the El Dorado Offloading Racks Acquisition and the Tyler Crude Tank Acquisition were recorded at amounts based on Delek's historical carrying value as of each respective acquisition date, which were $7.6 million and $11.6 million as of March 31, 2015 , 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 and the Tyler Assets as if we owned the assets for all periods presented. The results of the El Dorado Assets and the Tyler Assets are included in the pipelines and transportation segment. The following amounts associated with the El Dorado Assets and the Tyler Assets subsequent to March 31, 2015 , are included in the consolidated statements of income and comprehensive income of the Partnership (in thousands): Year Ended December 31, 2015 El Dorado Assets Total operating revenues $ 4,449 Net income attributable to the Partnership $ 3,277 Costs associated with the acquisition $ 235 Tyler Assets Total operating revenues $ 1,620 Net income attributable to the Partnership $ 1,035 Costs associated with the acquisition $ 240 The results of the El Dorado Assets operations 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 and Tyler Assets Predecessor results in the tables below. The results of the El Dorado Assets and the Tyler Assets subsequent to March 31, 2015 have been included in the Partnership's results. The tables below present our balance sheet and results of operations, the effect of including the results of the El Dorado Assets and the Tyler Assets, and the adjusted total amounts included in our consolidated financial statements. Consolidated Balance Sheet as of December 31, 2014 Delek Logistics Partners, LP El Dorado Assets Predecessor 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 Tank inspection liabilities 2,829 — — 2,829 Pipeline release liabilities 1,899 — — 1,899 Accrued expenses and other current liabilities 1,588 — 1,588 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 Consolidated Statements of Income Delek Logistics Partners, LP El Dorado Assets Predecessor Tyler Assets Year Ended December 31, 2015 (In thousands) Net Sales $ 589,669 $ — $ — $ 589,669 Operating costs and expenses: Cost of goods sold 436,304 — — 436,304 Operating expenses 44,756 167 — 44,923 General and administrative expenses 11,384 — — 11,384 Depreciation and amortization 19,222 372 98 19,692 Loss on asset disposals 104 — — 104 Total operating costs and expenses 511,770 539 98 512,407 Operating income (loss) 77,899 (539 ) (98 ) 77,262 Interest expense, net 10,658 — — 10,658 Loss on equity method investments 588 — — 588 Total non-operating expenses 11,246 — — 11,246 Income (loss) before income tax benefit 66,653 (539 ) (98 ) 66,016 Income tax benefit (195 ) — — (195 ) Net income (loss) 66,848 (539 ) (98 ) 66,211 Less: loss attributable to Predecessors — (539 ) (98 ) (637 ) Net income attributable to partners $ 66,848 $ — $ — $ 66,848 Delek Logistics Partners, LP El Dorado Assets Predecessor Year Ended December 31, 2014 (1) (In thousands) Net Sales $ 841,253 $ — $ 841,253 Operating costs and expenses: Cost of goods sold 697,221 — 697,221 Operating expenses 38,003 679 39,465 General and administrative expenses 10,570 — 10,616 Depreciation and amortization 14,591 317 15,022 Loss on asset disposals 83 — 83 Total operating costs and expenses 760,468 996 762,407 Operating income (loss) 80,785 (996 ) 78,846 Interest expense, net 8,656 — 8,656 Income (loss) before income tax expense 72,129 (996 ) 70,190 Income tax expense 132 — 132 Net income (loss) 71,997 (996 ) 70,058 Less: loss attributable to Predecessors — (996 ) (1,939 ) Net income attributable to partners $ 71,997 $ — $ 71,997 Delek Logistics Partners, LP El Dorado Assets Predecessor Year Ended December 31, 2013 (1) (In thousands) Net Sales $ 907,428 $ — $ 907,428 Operating costs and expenses: Cost of goods sold 811,364 — 811,364 Operating expenses 35,640 263 35,903 General and administrative expenses 7,526 — 7,526 Depreciation and amortization 13,738 — 13,738 Loss on asset disposals 166 — 166 Total operating costs and expenses 868,434 263 868,697 Operating income (loss) 38,994 (263 ) 38,731 Interest expense, net 4,570 — 4,570 Income (loss) before income tax expense 34,424 (263 ) 34,161 Income tax expense 757 — 757 Net income (loss) 33,667 (263 ) 33,404 Less: loss attributable to Predecessors (14,163 ) (263 ) (14,426 ) Net income attributable to partners $ 47,830 $ — $ 47,830 (1) There were no expenses associated with the Tyler Assets Predecessor included in our consolidated financial statements for the years ended December 31, 2014 and 2013 , as the Tyler Assets were not fully constructed and were not placed into service until January 2015. Additionally, prior to the Tyler Crude Tank Acquisition, the Tyler Assets Predecessor did not record revenues for intercompany storage services. Acquisitions from Third Parties During the years ended December 31, 2014 and 2013 , we acquired certain transportation, pipeline and terminalling assets to complement our existing assets, provide enhanced logistical capabilities and further our presence in certain areas. The acquisitions include the following: • On December 17, 2014 we acquired substantially all of the assets of Frank Thompson Transport, Inc. ("FTT"), a company that primarily hauled crude oil and asphalt products by transport truck, including 123 trucks and 205 trailers (the "FTT Assets"). • On October 1, 2014 we acquired from an affiliate of Magellan Midstream Partners, LP (i) a light products terminal in Mount Pleasant, Texas consisting of approximately 200,000 barrels of light product storage capacity, three truck loading lanes and ethanol blending capability (the "Mount Pleasant Terminal"), (ii) a light products storage facility in Greenville, Texas with approximately 325,000 barrels of storage capacity and a connection to the Explorer Pipeline System, a common carrier pipeline owned by a third party (the "Greenville Storage Facility"), and (iii) a 76-mile pipeline connecting the locations (the "Greenville-Mount Pleasant Pipeline"). 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." • On October 24, 2013 , we acquired from Enterprise Refined Products Company, LLC a refined product terminal in Little Rock, Arkansas consisting of a total of three products tanks with effective capacity of 140,000 barrels and a truck rack with throughput capacity of up to 10,000 bpd (the "North Little Rock Terminal"). • On July 19, 2013 , we acquired a 13.5-mile pipeline and certain ancillary assets (the "Hopewell Pipeline"), including a related delivery station (the "Hopewell Station") and pumps. The Hopewell Pipeline originates at the Tyler Refinery and terminates at the Hopewell Station, where it effectively connects to a 19-mile pipeline (the "Big Sandy Pipeline") that was owned by the Partnership at the time the Hopewell Pipeline was acquired and that originates at our light petroleum products terminal located in Big Sandy, Texas. The Hopewell Pipeline and the Big Sandy Pipeline form essentially one pipeline link between the Tyler Refinery and the Big Sandy Terminal (the "Tyler-Big Sandy Pipeline"). 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) North Little Rock Terminal Hopewell Property, plant and equipment $ 10,790 $ 4,829 $ 4,990 $ 3,538 Intangible assets — 5,171 10 984 Goodwill (3) 549 — — 1,200 Inventory — 1,125 — — Accounts Receivable 1,767 — — — Accounts Payable (1,181 ) — — — Total $ 11,925 $ 11,125 $ 5,000 $ 5,722 (1) During the fourth quarter of 2015, we finalized our purchase price allocation and adjusted certain of the acquisition-date fair values previously disclosed in connection with working capital adjustments and an additional $0.4 million of consideration paid for additional assets. (2) During the third quarter of 2015, we finalized our purchase price allocation and adjusted certain of the acquisition-date fair values previously disclosed. (3) All goodwill is expected to be deductible for tax purposes. Pro Forma Financial Information - Acquisitions from Third Parties Below are the unaudited pro forma consolidated results of operations of the Partnership for the years ended December 31, 2014 and 2013 , as if our 2014 acquisitions had occurred on January 1, 2013 (in thousands): Year Ended December 31, 2014 Year Ended December 31, 2013 As Reported Pro Forma As Reported Pro Forma FTT Assets: Net Sales $ 841,253 $ 854,842 $ 907,428 $ 921,017 Net income $ 70,058 $ 70,824 $ 33,404 $ 34,170 Greenville-Mount Pleasant Assets: Net Sales $ 841,253 $ 841,943 $ 907,428 $ 908,118 Net income $ 70,058 $ 69,621 $ 33,404 $ 32,967 Below are the unaudited pro forma consolidated results of operations of the Partnership for the year ended December 31, 2013 , as if our 2013 acquisitions had occurred on January 1, 2012 (in thousands): Year Ended December 31, 2013 As Reported Pro Forma North Little Rock Terminal: Net Sales $ 907,428 $ 908,867 Net income $ 33,404 $ 34,695 Hopewell: Net Sales $ 907,428 $ 908,382 Net income $ 33,404 $ 33,718 |