Segment Information (Notes)

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

4. Segment Information

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 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, crude oil storage tanks with a total combined active shell storage capacity of 620,000 barrels, truck loading and unloading locations and 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 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 applicable cost of products sold; direct operating expenses; selling, general and administrative expenses; net impact of the disposal of assets and depreciation and amortization.

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 our two operating segments.

The 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 assets of corporate operations are cash and cash equivalents; various net accounts receivable; prepaid expenses and other long-term assets.

We recorded the acquisition of WRW's assets at Western's historical book value as the purchase was a transaction between entities under common control. The information contained herein for 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 WNRL that we have retrospectively adjusted due to the Wholesale Acquisition.

Disclosures regarding our reportable segments with reconciliations to consolidated totals for the three and nine months ended September 30, 2015 and 2014, are presented below:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
	(In thousands)
Operating Results:
Logistics:
Revenues: Affiliate	$	40,478		$	34,914		$	110,129		$	101,294
Revenues: Third-party	787			686			2,089			2,044
Total revenues	$	41,265		$	35,600		$	112,218		$	103,338
Wholesale:
Revenues: Affiliate	$	170,290		$	244,587		$	489,526		$	688,512
Revenues: Third-party	462,924			635,532			1,414,632			1,958,816
Total revenues	$	633,214		$	880,119		$	1,904,158		$	2,647,328
Consolidated revenues	$	674,479		$	915,719		$	2,016,376		$	2,750,666
Operating income (loss):
Logistics	$	17,160		$	14,609		$	43,636		$	40,404
Wholesale	8,515			4,985			29,675			17,729
Other	(2,991		)	(2,875		)	(8,861		)	(7,179		)
Operating income from segments	22,684			16,719			64,450			50,954
Other income (expense), net	(6,188		)	(334		)	(16,365		)	(981		)
Consolidated income before income taxes	$	16,496		$	16,385		$	48,085		$	49,973
Depreciation and amortization:
Logistics	$	3,837		$	3,331		$	11,128		$	10,042
Wholesale	1,146			961			3,330			2,856
Consolidated depreciation and amortization	$	4,983		$	4,292		$	14,458		$	12,898
Capital expenditures:
Logistics	$	6,751		$	2,748		$	19,117		$	11,425
Wholesale	858			2,500			4,904			5,910
Consolidated capital expenditures	$	7,609		$	5,248		$	24,021		$	17,335
Total assets:
Logistics							$	171,188		$	148,800
Wholesale							158,680			65,302
Other							82,165			94,805
Consolidated total assets							$	412,033		$	308,907