Equity

3 Months Ended

Mar. 31, 2021

We had 8,697,468 common limited partner units held by the public outstanding as of March 31, 2021. Additionally, as of March 31, 2021, Delek Holdings owned an 80.0% limited partner interest in us, consisting of 34,745,868 common limited partner units. Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction, and 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 with the SEC, which subsequently became effective, for the proposed re-sale or other disposition from time to time by Delek Holdings of up to 14.0 million of our common limited partner units. As of March 31, 2021, we

had not sold any securities under this shelf registration statement and we will not receive any proceeds from the sale of securities by Delek Holdings.

Equity Activity

There were no changes in the number of common limited partner units outstanding from December 31, 2020 through March 31, 2021.

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 March 31,
		2021			2020
Net income attributable to partners		$	36,267		$	27,796
Less: General partner's IDRs		—			(8,695)
Net income available to partners		$	36,267		$	19,101
General partner's ownership interest		—		%	2.0		%
General partner's allocated interest in net income		—			$	382
General partner's IDRs		—			8,695
Total general partner's interest in net income		$	—		$	9,077

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. 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 Prior 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 Prior 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 a 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 Cash Distribution (in thousands)		Date of Distribution	Unitholders Record Date
March 31, 2020	$	0.890	$	30,878	May 12, 2020	May 5, 2020
June 30, 2020	$	0.900	$	35,969	August 12, 2020	August 7, 2020
September 30, 2020	$	0.905	$	39,308	November 12, 2020	November 6, 2020
December 31, 2020	$	0.910	$	39,533	February 9, 2021	February 2, 2021
March 31, 2021	$	0.920	$	39,968	May 14, 2021 (1)	May 10, 2021

(1) Expected date of distribution.

The allocations of total quarterly cash distributions made to limited partners for the three months ended March 31, 2021 and 2020 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 March 31,
		2021		2020
General partner's distributions:
General partner's distributions		$	—	$	444
General partner's IDRs		—		8,695
Total general partner's distributions		—		9,139

Limited partners' distributions:

Common limited partners' distributions		39,968		21,739

Total cash distributions		$	39,968	$	30,878

Cash distributions per limited partner unit		$	0.920	$	0.890