Equity

12 Months Ended

Dec. 31, 2018

We had 9,109,807 common limited partner units held by the public outstanding as of December 31, 2018. Additionally, as of December 31, 2018, Delek Holdings owned a 61.4% limited partner interest in us, consisting of 15,294,046 common limited partner units and a 94.6% interest in our general partner, which owns the entire 2.0% general partner interest consisting of 498,038 general partner units. Affiliates, who are also members of our general partner's management and board of directors, own the remaining 5.4% interest in our general partner.

Equity Activity

On February 25, 2016, the requirements under the Partnership Agreement for the conversion of all subordinated units into common units were satisfied, and the subordination period ended. As a result, in the first quarter of 2016, all of the Partnership's 11,999,258 outstanding subordinated units converted into common units and began participating pro rata with the other common units in distributions of available cash. The conversion did not impact the amount of the cash distribution paid or the total number of the Partnership's outstanding units representing limited partner interests.

The table below summarizes the changes in the number of units outstanding from December 31, 2015 through December 31, 2018 (in units).



	Common - Public		Common - Delek Holdings	Subordinated		General Partner	Total
Balance at December 31, 2015	9,478,273		2,799,258	11,999,258		495,445	24,772,234
GP units issued to maintain 2% interest	—		—	—		1,057	1,057
Unit-based compensation awards ⁽¹⁾	51,818		—	—		—	51,818
Delek Holdings unit repurchases from public	(266,676	)	266,676	—		—	—
Subordinated unit conversion	—		11,999,258	(11,999,258	)	—	—
Balance at December 31, 2016	9,263,415		15,065,192	—		496,502	24,825,109
GP units issued to maintain 2% interest	—		—	—		1,102	1,102
Unit-based compensation awards ⁽¹⁾	54,026		—	—		—	54,026
Delek Holdings unit repurchases from public	(228,854	)	228,854	—		—	—
Balance at December 31, 2017	9,088,587		15,294,046	—		497,604	24,880,237
GP units issued to maintain 2% interest	—		—	—		434	434
Unit-based compensation awards ⁽¹⁾	21,220		—	—		—	21,220
Balance at December 31, 2018	9,109,807		15,294,046	—		498,038	24,901,891

⁽¹⁾ Unit-based compensation awards are presented net of 598, 14,053 and 17,276 units withheld for taxes as of December 31, 2018, 2017 and 2016, respectively.

Issuance of Additional Securities

Our Partnership Agreement authorizes us to issue an unlimited number of additional partnership securities for the consideration and on the terms and conditions determined by our general partner without the approval of the unitholders. Costs associated with the issuance of securities are allocated to all unitholders' capital accounts based on their ownership interest at the time of issuance.

Allocations of Net Income

Our Partnership Agreement contains provisions for the allocation of net income and loss to the unitholders and our general partner. For purposes of maintaining partner capital accounts, the Partnership Agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Normal allocations according to percentage interests are made after giving effect to priority income allocations in an amount equal to incentive cash distributions allocated 100% to our general partner.

The following table presents the allocation of the general partner's interest in net income (in thousands, except percentage of ownership interest):



	Year Ended December 31,
	2018			2017			2016
Net income attributable to partners	$	90,182		$	69,409		$	62,804
Less: General partner's IDRs	(24,224		)	(17,389		)	(11,160		)
Net income available to partners	$	65,958		$	52,020		$	51,644
General partner's ownership interest	2.0		%	2.0		%	2.0		%
General partner's allocated interest in net income	1,319			1,040			1,033
General partner's IDRs	24,224			17,389			11,160
Total general partner's interest in net income	$	25,543		$	18,429		$	12,193

Incentive Distribution Rights

Our general partner is currently entitled to 2.0% of all quarterly distributions that we make prior to our liquidation. Our general partner has the right, but not the obligation, to contribute up to a proportionate amount of capital to us to maintain its current general partner interest. The general partner’s 2.0% interest in these distributions may be reduced if we issue additional units in the future and our general partner does not contribute a proportionate amount of capital to us to maintain its 2.0% general partner interest. Our general partner also currently holds incentive distribution rights that entitle it to receive increasing percentages, up to a maximum of 48.0%, of the cash we distribute from operating surplus (as defined in our Partnership Agreement) in excess of $0.43125 per unit per quarter. The maximum distribution is 48.0% and does not include any distributions that our general partner or its affiliates may receive on common or general partner units that it owns. The incentive distribution rights held by our general partner currently entitle it to receive the maximum distribution.

Cash Distributions

Our Partnership Agreement sets forth the calculation to be used to determine the amount and priority of available cash distributions that our limited partner unitholders and general partner will receive. Our distributions earned with respect to a given period are declared subsequent to quarter end. The table below summarizes the quarterly distributions related to our quarterly financial results:



Quarter Ended	Total Quarterly Distribution Per Limited Partner Unit		Total Quarterly Distribution Per Limited Partner Unit, Annualized		Total Cash Distribution, including general partner interest and IDRs (in thousands)		Date of Distribution	Unitholders Record Date
December 31, 2016	$	0.680	$	2.72	$	20,537	February 14, 2017	February 3, 2017
March 31, 2017	$	0.690	$	2.76	$	21,024	May 12, 2017	May 5, 2017
June 30, 2017	$	0.705	$	2.82	$	21,783	August 11, 2017	August 4, 2017
September 30, 2017	$	0.715	$	2.86	$	22,270	November 14, 2017	November 7, 2017
December 31, 2017	$	0.725	$	2.90	$	22,777	February 12, 2018	February 2, 2018
March 31, 2018	$	0.750	$	3.00	$	23,997	May 15, 2018	May 7, 2018
June 30, 2018	$	0.770	$	3.08	$	24,984	August 13, 2018	August 3, 2018
September 31, 2018	$	0.790	$	3.16	$	25,960	November 9, 2018	November 2, 2018
December 31, 2018	$	0.810	$	3.24	$	26,949	February 12, 2019	February 4, 2019

The allocation of total quarterly cash distributions made to general and limited partners for the years ended December 31, 2018, 2017 and 2016 is set forth in the table below. Distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below presents total cash distributions applicable to the period in which the distributions are earned (in thousands, except per unit amounts):



	Year Ended December 31,
	2018		2017		2016
General partner's distributions:
General partner's distributions	$	1,553	$	1,408	$	1,277
General partner's IDRs	24,224		17,389		11,160
Total general partner's distributions	25,777		18,797		12,437

Limited partners' distributions:
Common	76,113		69,057		58,158
Subordinated	—		—		4,424
Total limited partners' distributions	76,113		69,057		62,582
Total cash distributions	$	101,890	$	87,854	$	75,019

Cash distributions per limited partner unit	$	3.120	$	2.835	$	2.575