Segment Disclosures (Notes)

6 Months Ended

Jun. 30, 2013

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Segment Disclosures

SEGMENT DISCLOSURES

Our revenues are derived from two operating segments: Crude Oil Gathering and Terminalling, Transportation and Storage. The recently acquired operations of the Carson Terminal Assets and the Northwest Products System are reported in our Terminalling, Transportation and Storage segment. Our Crude Oil Gathering segment consists of a crude oil gathering system in the Bakken Shale/Williston Basin area of North Dakota and Montana. Our Terminalling, Transportation and Storage segment consists of the Northwest Products Pipeline, a jet fuel pipeline to the Salt Lake City International Airport, 16 refined products and storage terminals in the Western and Midwestern U.S., 2 storage facilities in Southern California and Salt Lake City, Utah, 2 marine terminals in California, a rail-car unloading facility in Washington, and other pipelines which transport products and crude oil from Tesoro's refineries in Salt Lake City and Los Angeles to nearby facilities, including the Northwest Product Pipeline.

Our revenues are generated from existing third-party contracts and from commercial agreements we have entered into with Tesoro under which Tesoro pays us fees for gathering crude oil and distributing, transporting and storing crude oil and refined products. The commercial agreements with Tesoro are described in Note C. We do not have any foreign operations.

Our operating segments are strategic business units that offer different services in different geographical locations. We evaluate the performance of each segment based on its respective operating income. Certain general and administrative expenses and interest and financing costs are excluded from segment operating income as they are not directly attributable to a specific operating segment. Identifiable assets are those used by the segment, whereas other assets are principally cash, deposits and other assets that are not associated with a specific operating segment.

Capital expenditures by operating segment were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Capital Expenditures
Crude Oil Gathering	$	14,924	$	6,328	$	18,869	$	8,949
Terminalling, Transportation and Storage	7,319		30,251		13,610		40,612
Total Capital Expenditures	$	22,243	$	36,579	$	32,479	$	49,561

Identifiable assets by operating segment were as follows (in thousands):

Identifiable Assets	June 30, 2013		December 31, 2012
Crude Oil Gathering	$	106,221	$	87,194
Terminalling, Transportation and Storage	990,743		205,246
Other	90,926		70,738
Total Identifiable Assets	$	1,187,890	$	363,178

Segment information is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
REVENUES
Crude Oil Gathering:
Affiliate	$	20,529		$	15,959		$	41,906		$	29,938
Third-party	416			114			730			237
Total Crude Oil Gathering	20,945			16,073			42,636			30,175
Terminalling, Transportation and Storage:
Affiliate (a)	33,573			16,499			60,088			28,873
Third-party	5,357			4,313			8,773			6,100
Total Terminalling, Transportation and Storage	38,930			20,812			68,861			34,973
Total Segment Revenues	$	59,875		$	36,885		$	111,497		$	65,148
OPERATING AND MAINTENANCE EXPENSES
Crude Oil Gathering	$	12,995		$	10,055		$	25,355		$	18,178
Terminalling, Transportation and Storage	11,240			6,511			18,369			13,964
Total Segment Operating and Maintenance Expenses	$	24,235		$	16,566		$	43,724		$	32,142
IMBALANCE SETTLEMENT GAINS
Crude Oil Gathering	$	(1,528	)	$	(1,217	)	$	(2,924	)	$	(2,496	)
Terminalling, Transportation and Storage	(1,048		)	(1,340		)	(2,076		)	(2,551		)
Total Segment Imbalance Settlement Gains	$	(2,576	)	$	(2,557	)	$	(5,000	)	$	(5,047	)
DEPRECIATION AND AMORTIZATION EXPENSES
Crude Oil Gathering	$	1,029		$	783		$	2,035		$	1,566
Terminalling, Transportation and Storage	5,309			2,096			8,384			4,124
Total Segment Depreciation and Amortization Expenses	$	6,338		$	2,879		$	10,419		$	5,690
GENERAL AND ADMINISTRATIVE EXPENSES
Crude Oil Gathering	$	761		$	607		$	1,455		$	1,318
Terminalling, Transportation and Storage	1,739			660			2,781			1,365
Total Segment General and Administrative Expenses	$	2,500		$	1,267		$	4,236		$	2,683
LOSS ON ASSET DISPOSALS
Crude Oil Gathering	$	—		$	—		$	—		$	—
Terminalling, Transportation and Storage	—			—			164			236
Total Segment Loss on Asset Disposals	$	—		$	—		$	164		$	236
OPERATING INCOME
Crude Oil Gathering	$	7,688		$	5,845		$	16,715		$	11,609
Terminalling, Transportation and Storage	21,690			12,885			41,239			17,835
Total Segment Operating Income	29,378			18,730			57,954			29,444
Unallocated general and administrative expenses	(4,104		)	(2,465		)	(8,421		)	(4,624		)
Interest and financing costs, net	(6,571		)	(1,039		)	(12,175		)	(1,550		)
Interest income	470			—			493			—
NET INCOME	$	19,173		$	15,226		$	37,851		$	23,270

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(a) Our Predecessors did not record revenue for transactions with Tesoro in the Terminalling, Transportation and Storage segment for assets acquired in the Acquisitions from Tesoro prior to the effective date of each acquisition.