Segment Information (Notes)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

5. Segment Information

We recorded the acquisition of WRW's assets at Western's historical book value as the purchase was considered a reorganization of entities under common control. The information contained herein for the WNRL Predecessor and WNRL has been retrospectively adjusted, to include the historical results of the WRW assets acquired, for periods prior to the effective date of the transaction. Our financial information includes the historical results of the WNRL Predecessor, retrospectively adjusted due to the Wholesale Acquisition, collectively our "Predecessor," for periods prior to October 16, 2013, and the results of WNRL, beginning October 16, 2013, the date WNRL commenced operations, which have also been retrospectively adjusted.

Our operations are organized into two operating segments based on marketing criteria and the nature of our products and services and our types of customers. These segments are logistics and wholesale.

Logistics. Our pipeline and gathering assets are strategically positioned to support crude oil supply options for Western’s El Paso and Gallup Refineries as well as third parties and consist of crude oil pipelines and gathering assets located primarily in the Delaware Basin and in the Four Corners area of Northwestern New Mexico. These systems gather and transport crude oil by pipeline from various production locations to Western’s refineries utilizing approximately 300 miles of pipeline; 31 crude oil storage tanks with a total combined active shell storage capacity of approximately 620,000 barrels; eight truck loading and unloading locations; and 14 pump stations.

Our terminalling, transportation and storage assets support crude oil supply and refined product distribution for Western’s El Paso and Gallup Refineries as well as third parties and primarily consist of storage tanks, terminals, transportation and other assets located in El Paso, Texas, Gallup, Bloomfield and Albuquerque, New Mexico and Phoenix and Tucson, Arizona. These assets include crude oil, feedstock, blendstock, refined product and asphalt storage tanks with a total combined shell storage capacity of approximately 7.4 million barrels; truck loading racks; railcar loading racks; pump stations and pipeline and related logistics assets to service Western’s operations.

Wholesale. Our wholesale segment includes the operations of several lubricant and bulk petroleum distribution plants, and a fleet of crude oil and refined product and lubricant delivery trucks. Our wholesale segment distributes commercial wholesale petroleum products primarily in Arizona, California, Colorado, Nevada, New Mexico and Texas. The wholesale segment purchases petroleum fuels and lubricants from Western's refining segment and from third-party suppliers.

Segment Accounting Principles. Operating income for each segment consists of net revenues less cost of products sold; direct operating expenses; selling, general and administrative expenses; net impact of the disposal of assets; maintenance turnaround expense and depreciation and amortization. Cost of products sold includes net realized and unrealized gains and losses related to our commodity hedging activities and reflects current costs.

Activities of our business that are not included in the two segments mentioned above are included in the "Other" category. These activities consist primarily of corporate staff operations and other items that are not specific to the normal business of any one of our two operating segments.

The total assets of each segment consist primarily of cash and cash equivalents; inventories; net accounts receivable; net property, plant and equipment, net intangible assets and net other assets directly associated with the individual segment’s operations. Included in the total assets of the corporate operations are cash and cash equivalents; various net accounts receivable; prepaid expenses; other current assets; net deferred income tax items; net property, plant and equipment and other long-term assets.

Disclosures regarding our reportable segments with reconciliations to consolidated totals for the three years ended December 31, 2014, are presented below:

	Year Ended December 31, 2014
	Logistics		Wholesale		Other			Consolidated
Revenues: Third-party	$	2,718	$	2,487,595	$	—		$	2,490,313
Revenues: Affiliate	137,986		873,589		—			1,011,575
Operating income (loss)	$	56,928	$	28,234	$	(10,660	)	74,502
Other income (expense), net								(2,250		)
Income before income taxes								$	72,252
Depreciation and amortization	$	13,479	$	3,893	$	—		$	17,372
Capital expenditures	14,457		7,868		—			22,325
Total assets at December 31, 2014	159,643		160,158		58,472			378,273

	Year Ended December 31, 2013
	Logistics			Wholesale		Other			Consolidated
Revenues: Third-party	$	1,743		$	2,522,852	$	—		$	2,524,595
Revenues: Affiliate	29,086			853,447		—			882,533
Operating income (loss)	$	(57,410	)	$	20,790	$	(4,907	)	(41,527		)
Other income (expense), net									(172		)
Income before income taxes									$	(41,699	)
Depreciation and amortization	$	13,042		$	2,928	$	—		$	15,970
Capital expenditures	60,985			11,413		—			72,398
Total assets at December 31, 2013	245,539			61,504		—			307,043

	Year Ended December 31, 2012
	Logistics			Wholesale		Other			Consolidated
Revenues: Third-party	$	678		$	2,621,932	$	—		$	2,622,610
Revenues: Affiliate	3,167			849,143		—			852,310
Operating income (loss) (1)	$	(69,251	)	$	23,974	$	(5,211	)	(50,488		)
Other income (expense), net									274
Income before income taxes									$	(50,214	)
Depreciation and amortization	$	11,620		$	2,695	$	—		$	14,315
Capital expenditures	25,725			2,351		—			28,076
Total assets at December 31, 2012	135,331			50,131		—			185,462

(1) The effect of our economic hedging activity is included within operating income of our wholesale segment as a component of cost of products sold. Wholesale cost of products sold include $23.6 million in net realized economic hedging losses for the year ended December 31, 2012.