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Equity | 9 Months Ended
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Sep. 30, 2020
Equity [Abstract] |
Equity | Equity We had approximately 8,687,371 common limited partner units held by the public outstanding as of September 30, 2020. Additionally, as of September 30, 2020, Delek Holdings owned an approximately 80.0% interest in us, consisting of 34,745,868 common limited partner units. Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction, contemporaneous with this transaction, Delek Holdings purchased a 5.2% ownership interest in our general partner from certain affiliates, who were also members of our general partner's management and board of directors, at fair market value. Delek Holdings now owns 100% of the outstanding ownership interest in our general partner. As part of this transaction, we expensed approximately $1.1 million of transaction costs. In August 2020, we filed a shelf registration statement, which subsequently became effective, with the U.S. Securities and Exchange Commission for the proposed re-sale or other disposition from time to time by Delek Holdings of up to 14.0 million common limited partner units representing limited partner interests in the Partnership. We will not sell any securities under this shelf registration statement and we will not receive any proceeds from the sale of securities by Delek Holdings. Equity Activity The table below summarizes the changes in the number of units outstanding from December 31, 2019 through September 30, 2020.
| Common - Public |  | Common - Delek Holdings |  | General Partner |  | Total
Balance at December 31, 2019 | 9,131,579 |  |  | 15,294,046 |  |  | 498,482 |  |  | 24,924,107 |
General partner units issued to maintain 2% interest | — |  |  | — |  |  | 102,196 |  |  | 102,196 |
Unit-based compensation awards (1) | 7,614 |  |  | — |  |  | — |  |  | 7,614 |
Big Spring Gathering Assets Acquisition equity issuance | — |  |  | 5,000,000 |  |  | — |  |  | 5,000,000 |
Delek Holdings unit purchases from public | (451,822) |  |  | 451,822 |  |  | — |  |  | — |
General Partner units converted to non-economic general partner interest | — |  |  | — |  |  | (600,678) |  |  | (600,678) |
Common limited partner units issued in IDR Restructuring Transaction | — |  |  | 14,000,000 |  |  | — |  |  | 14,000,000 |
Balance at September 30, 2020 | 8,687,371 |  |  | 34,745,868 |  |  | — |  |  | 43,433,239 |
(1) Unit-based compensation awards are presented net of 481 units withheld for taxes as of September 30, 2020.
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. 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. Prior to August 13, 2020, normal allocations were made according to percentage interests after giving effect to priority income allocations in an amount equal to incentive cash distributions allocated 100% to our general partner. Effective August 13, 2020, the IDRs were eliminated and the 2% general partner economic interest was converted to a non-economic general partner interest that no longer receives cash distributions. The following table presents the allocation of the general partner's interest in net income (in thousands, except percentage of ownership interest):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Net income attributable to partners | $ | 46,328 |  |  | $ | 30,530 |  |  | $ | 118,539 |  |  | $ | 75,112 |
Less: General partner's IDRs | — |  |  | (8,453) |  |  | (17,632) |  |  | (23,206) |
Net income available to partners | $ | 46,328 |  |  | $ | 22,077 |  |  | $ | 100,907 |  |  | $ | 51,906 |
General partner's ownership interest | — | % |  | 2.0 | % |  | 2.0 | % |  | 2.0 | %
General partner's allocated interest in net income | $ | — |  |  | $ | 442 |  |  | 1,092 |  |  | $ | 1,038 |
General partner's IDRs | — |  |  | 8,453 |  |  | 17,632 |  |  | 23,206 |
Total general partner's interest in net income | $ | — |  |  | $ | 8,895 |  |  | $ | 18,724 |  |  | $ | 24,244 |
Incentive Distribution Rights ("IDRs") Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction and the general partner no longer receives any cash distributions. Prior to August 13, 2020, our general partner was entitled to 2.0% of all quarterly distributions that we make prior to our liquidation. Our general partner had the right, but not the obligation, to contribute up to a proportionate amount of capital to us to maintain its current general partner interest. Our general partner held IDRs that entitled it to receive increasing percentages, up to a maximum of 48.0%, of the cash we distributed from operating surplus (as defined in our Partnership Agreement) in excess of 0.43125 per unit per quarter. The maximum distribution was 48.0% and did not include any distributions that our general partner or its affiliates may have received on common or general partner units that it owns. As of August 12, 2020, the IDRs held by our general partner were entitled to receive the maximum distribution. Pursuant to Amendment No. 2 to the Partnership Agreement, prior to the IDR Restructuring Transaction, an agreement was reached for a waiver of distributions in respect of the IDRs associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 (the "IDR Waiver"). The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the Additional Units. An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs. Refer to Note 3 for additional details. 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 will receive. The cash distributions for periods before August 13, 2020 include distributions to the 2% general partner interest which was converted to non-economic general partner interest and IDRs which were permanently eliminated. 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, (in thousands) |  | Date of Distribution |  | Unitholders Record Date
September 30, 2019 |  | $ | 0.880 |  |  | $ | 3.52 |  |  | $ | 30,379 |  |  | November 12, 2019 |  | November 4, 2019
December 31, 2019 |  | $ | 0.885 |  |  | $ | 3.54 |  |  | $ | 30,634 |  |  | February 12, 2020 |  | February 4, 2020
March 31, 2020 |  | $ | 0.890 |  |  | $ | 3.56 |  |  | $ | 30,878 |  |  | May 12, 2020 |  | May 5, 2020
June 30, 2020 |  | $ | 0.900 |  |  | $ | 3.60 |  |  | $ | 35,969 |  |  | August 12, 2020 |  | August 7, 2020
September 30, 2020 |  | $ | 0.905 |  |  | $ | 3.62 |  |  | $ | 39,308 |  |  | November 12, 2020 (1) |  | November 6, 2020
(1) Expected date of distribution.
The allocations of total quarterly cash distributions made to limited partners for the three and nine months ended September 30, 2020 and 2019 are 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):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
General partner's distributions: |  |  |  |  |  |  |
General partner's distributions | $ | — |  |  | $ | 439 |  |  | $ | 986 |  |  | $ | 1,269 |
General partner's IDRs | — |  |  | 8,453 |  |  | 17,632 |  |  | 23,206 |
Total general partner's distributions | — |  |  | 8,892 |  |  | 18,618 |  |  | 24,475 |
Limited partners' distributions: |  |  |  |  |  |  |
Common limited partners' distributions | 39,307 |  |  | 21,487 |  |  | 87,536 |  |  | 62,256 |
Total cash distributions | $ | 39,307 |  |  | $ | 30,379 |  |  | $ | 106,154 |  |  | $ | 86,731 |
Cash distributions per limited partner unit | $ | 0.905 |  |  | $ | 0.880 |  |  | $ | 2.695 |  |  | $ | 2.550 |

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- Definition The entire disclosure for the formation, structure, control and ownership of the partnership. Disclosures related to accounts comprising partners' capital. Includes balances of general partners' capital account, limited partners' capital account, preferred partners' capital account and total partners' capital account and units outstanding; accumulated other comprehensive income; amount and nature of changes to amount of partner's capital and units outstanding by class, rights and privileges for each class of units; distribution policies and distributions paid by unit class; impact of and correction of an error in previously issued financial statements; limitations of partners' liability; redemption, conversion and distribution policies; and deferred compensation related to the issuance of units. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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