5. Segment Information

Our operations are organized into two reportable segments based on marketing criteria, 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 for Western's El Paso, Gallup and St. Paul Park refineries as well as third parties and consist of crude oil pipelines and gathering assets located primarily in the Delaware Basin, in the Four Corners area of Northwestern New Mexico and in the Upper Great Plains region. These systems gather and transport crude oil by pipeline from various production locations to Western’s refineries utilizing 705 miles of pipeline; 33 crude oil storage tanks with a total combined active shell storage capacity of approximately 959,000 barrels, eight truck loading and unloading locations and 15 pump stations.

Our terminalling, transportation and storage assets support crude oil supply and refined product distribution for Western's El Paso, Gallup and St. Paul Park 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; Phoenix and Tucson, Arizona and St. Paul Park, Minnesota. These assets include crude oil, feedstock, blendstock, refined product and asphalt storage tanks with a total combined shell storage capacity of 11.4 million barrels; truck, railcar and barge 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 facilities and a fleet of crude oil, refined product, asphalt and lubricant delivery trucks. Our wholesale segment distributes commercial wholesale petroleum products primarily in Arizona, 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 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 any one of our two reportable 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 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 and other long-term assets.

Disclosures regarding our reportable segments with reconciliations to consolidated totals for the three and six months ended June 30, 2017 and 2016, are presented below.



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
	(In thousands)
Operating Results:
Logistics revenues:
Affiliate	$	53,567		$	43,053		$	103,204		$	83,969
Third-party	703			677			1,322			1,367
Total logistics revenues	54,270			43,730			104,526			85,336
Wholesale revenues:
Affiliate	153,986			137,437			294,893			245,978
Third-party	419,253			397,435			832,782			715,327
Total wholesale revenues	573,239			534,872			1,127,675			961,305

Consolidated revenues	$	627,509		$	578,602		$	1,232,201		$	1,046,641

Operating income (loss):
Logistics	$	17,611		$	11,064		$	32,641		$	16,977
Wholesale	13,180			8,797			28,154			18,750
Other	(5,752		)	(3,264		)	(9,394		)	(5,942		)
Operating income from segments	25,039			16,597			51,401			29,785
Other expense, net	(6,561		)	(6,400		)	(13,147		)	(13,570		)
Consolidated income before income taxes	$	18,478		$	10,197		$	38,254		$	16,215

Depreciation and amortization:
Logistics	$	8,781		$	8,347		$	17,362		$	16,502
Wholesale	1,003			1,206			2,154			2,389
Consolidated depreciation and amortization	$	9,784		$	9,553		$	19,516		$	18,891

Capital expenditures:
Logistics	$	8,703		$	6,703		$	14,154		$	14,687
Wholesale	144			1,029			163			1,401
Consolidated capital expenditures	$	8,847		$	7,732		$	14,317		$	16,088



	June 30, 2017		June 30, 2016
	(In thousands)
Total assets:
Logistics	$	411,581	$	414,872
Wholesale	126,345		156,067
Other	26,945		18,017
Consolidated total assets	$	564,871	$	588,956