Segment Data | Segment Data We aggregate our operating segments into two reportable segments: (i) pipelines and transportation and (ii) wholesale marketing and terminalling: • The assets and investments reported in the pipelines and transportation segment provide crude oil gathering and crude oil, intermediate and finished products transportation and storage services to Delek's refining operations and independent third parties. • The wholesale marketing and terminalling segment provides wholesale marketing and terminalling services to Delek's refining operations and independent third parties. Our operating segments adhere to the accounting policies used for our consolidated financial statements. Our operating segments are managed separately because each segment requires different industry knowledge, technology and marketing strategies. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on segment contribution margin. Segment contribution margin is defined as net sales less cost of goods sold and operating expenses. The following is a summary of business segment operating performance as measured by contribution margin for the periods indicated (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Pipelines and Transportation Net sales: Affiliate $ 27,668 $ 26,136 $ 54,168 $ 52,442 Third party 2,555 5,874 4,732 12,351 Total pipelines and transportation 30,223 32,010 58,900 64,793 Operating costs and expenses: Cost of goods sold 4,403 4,814 8,808 9,590 Operating expenses 7,933 6,899 16,088 14,639 Segment contribution margin $ 17,887 $ 20,297 $ 34,004 $ 40,564 Capital spending (excluding business combinations) $ 1,660 $ 718 $ 3,797 $ 1,424 Wholesale Marketing and Terminalling Net sales: Affiliate $ 12,156 $ 10,558 $ 22,275 $ 23,012 Third party 84,390 69,285 175,067 128,104 Total wholesale marketing and terminalling 96,546 79,843 197,342 151,116 Operating costs and expenses: Cost of goods sold 80,636 68,287 168,821 130,264 Operating expenses 2,033 1,831 4,236 4,555 Segment contribution margin $ 13,877 $ 9,725 $ 24,285 $ 16,297 Capital spending (excluding business combinations) $ 459 $ 130 $ 1,113 $ 508 Consolidated Net sales: Affiliate $ 39,824 $ 36,694 $ 76,443 $ 75,454 Third party 86,945 75,159 179,799 140,455 Total consolidated 126,769 111,853 256,242 215,909 Operating costs and expenses: Cost of goods sold 85,039 73,101 177,629 139,854 Operating expenses 9,966 8,730 20,324 19,194 Contribution margin 31,764 30,022 58,289 56,861 General and administrative expenses 2,656 2,698 5,504 5,611 Depreciation and amortization 5,742 4,812 10,935 9,808 (Gain) loss on asset disposals (5 ) — 7 (44 ) Operating income $ 23,371 $ 22,512 $ 41,843 $ 41,486 Capital spending (excluding business combinations) $ 2,119 $ 848 $ 4,910 $ 1,932 The following table summarizes the total assets for each segment as of June 30, 2017 and December 31, 2016 (in thousands). June 30, 2017 December 31, 2016 Pipelines and transportation $ 338,781 $ 337,349 Wholesale marketing and terminalling 76,751 78,198 Total assets $ 415,532 $ 415,547 Property, plant and equipment and accumulated depreciation as of June 30, 2017 and depreciation expense by reporting segment for the three and six months ended June 30, 2017 were as follows (in thousands): Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated Property, plant and equipment $ 282,703 $ 64,600 $ 347,303 Less: accumulated depreciation (75,751 ) (25,933 ) (101,684 ) Property, plant and equipment, net $ 206,952 $ 38,667 $ 245,619 Depreciation expense for the three months ended June 30, 2017 $ 4,499 $ 977 $ 5,476 Depreciation expense for the six months ended June 30, 2017 $ 8,564 $ 1,839 $ 10,403 In accordance with ASC 360, Property, Plant & Equipment , we evaluate the realizability of property, plant and equipment as events occur that might indicate potential impairment. There were no indicators of impairment of our property, plant and equipment as of June 30, 2017 . |