Segment Data

We report our assets and operating results in two reportable segments: (i) pipelines and transportation and (ii) wholesale marketing and terminalling. 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 the segment contribution margin. Segment contribution margin is defined as net sales less cost of sales and operating expenses, excluding depreciation and amortization.

The pipelines and transportation segment provides crude oil gathering, transportation and storage services to Delek's refining operations and independent third parties.

The wholesale marketing and terminalling segment provides marketing and terminalling services to Delek's refining operations and independent third parties.

The following is a summary of business segment operating performance as measured by contribution margin for the period indicated (in thousands):



	Three Months Ended September 30, 2012
	Pipelines and Transportation		Wholesale Marketing and Terminalling		Total
Net sales	$	7,960	$	263,846	$	271,806
Operating costs and expenses:
Cost of goods sold	—		255,281		255,281
Operating expenses	4,597		1,982		6,579
Segment contribution margin	$	3,363	$	6,583	9,946
General and administrative expenses					1,614
Depreciation and amortization					2,255
Loss on sale of assets					5
Operating income					$	6,072
Total assets	$	112,794	$	137,864	$	250,658
Capital spending (excluding business combinations)	$	2,265	$	324	$	2,589



	Three Months Ended September 30, 2011
	Pipelines and Transportation		Wholesale Marketing and Terminalling		Total
Net sales	$	7,167	$	192,658	$	199,825
Operating costs and expenses:
Cost of goods sold	—		187,209		187,209
Operating expenses	3,090		1,068		4,158
Segment contribution margin	$	4,077	$	4,381	8,458
General and administrative expenses					1,273
Depreciation and amortization					1,431
Operating income					$	5,754
Total assets	$	54,229	$	78,478	$	132,707
Capital spending (excluding business combinations)	$	—	$	138	$	138



	Nine Months Ended September 30, 2012
	Pipelines and Transportation		Wholesale Marketing and Terminalling		Total
Net sales	$	21,440	$	751,929	$	773,369
Operating costs and expenses:
Cost of goods sold	—		729,750		729,750
Operating expenses	11,689		3,984		15,673
Segment contribution margin	$	9,751	$	18,195	27,946
General and administrative expenses					6,367
Depreciation and amortization					6,649
Loss on sale of assets					5
Operating income					$	14,925
Capital spending (excluding business combinations)	$	3,516	$	1,276	$	4,792



	Nine Months Ended September 30, 2011
	Pipelines and Transportation		Wholesale Marketing and Terminalling		Total
Net sales	$	14,335	$	542,744	$	557,079
Operating costs and expenses:
Cost of goods sold	—		526,234		526,234
Operating expenses	5,881		2,391		8,272
Segment contribution margin	$	8,454	$	14,119	22,573
General and administrative expenses					3,960
Depreciation and amortization					3,300
Operating income					$	15,313
Capital spending (excluding business combinations)	$	—	$	139	$	139

Property, plant and equipment, accumulated depreciation and depreciation expense by reporting segment as of and for the three and nine months ended September 30, 2012 are as follows (in thousands):



	Pipelines and Transportation			Wholesale Marketing and Terminalling			Total
Property, plant and equipment	$	111,949		$	61,081		$	173,030
Less: Accumulated depreciation	(6,303		)	(10,853		)	(17,156		)
Property, plant and equipment, net	$	105,646		$	50,228		$	155,874
Depreciation expense for the three months ended September 30, 2012	$	1,381		$	874		$	2,255
Depreciation expense for the nine months ended September 30, 2012	$	4,092		$	2,557		$	6,649

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.