Equity

12 Months Ended

Dec. 31, 2020

We had 8,697,468 common limited partner units held by the public outstanding as of December 31, 2020. Additionally, as of December 31, 2020, 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 U.S. Securities and Exchange Commission, 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 December 31, 2020, we did 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, 2018 through December 31, 2020.


	Common - Public	Common - Delek Holdings	General Partner	Total
Balance at December 31, 2017	9,088,587	15,294,046	497,604	24,880,237
General partner 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
General partner units issued to maintain 2% interest	—	—	444	444
Unit-based compensation awards (1)	21,772	—	—	21,772
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)	17,711	—	—	17,711
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 December 31, 2020	8,697,468	34,745,868	—	43,443,336

(1) Unit-based compensation awards are presented net of 926 and 598 units withheld for taxes as of December 31, 2020 and 2018, respectively. There were no units withheld for taxes as of December 31, 2019.

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):


	Year Ended December 31,
	2020			2019			2018
Net income attributable to partners	$	159,256		$	96,749		$	90,182
Less: General partner's IDRs	(17,632)			(31,781)			(24,224)
Net income available to partners	$	141,624		$	64,968		$	65,958
General partner's ownership interest	2.0		%	2.0		%	2.0		%
General partner's allocated interest in net income	1,092			1,299			1,319
General partner's IDRs	17,632			31,781			24,224
Total general partner's interest in net income	$	18,724		$	33,080		$	25,543

Incentive Distribution Rights

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.

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. 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, including general partner interest and IDRs (in thousands)		Date of Distribution	Unitholders Record Date
December 31, 2018	$	0.810	$	3.24	$	26,949	February 12, 2019	February 4, 2019
March 31, 2019	$	0.820	$	3.28	$	27,438	May 14, 2019	May 7, 2019
June 30, 2019	$	0.850	$	3.40	$	28,914	August 13, 2019	August 5, 2019
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	November 6, 2020
December 31, 2020	$	0.910	$	3.64	$	39,533	February 9, 2021	February 2, 2021

The allocations of total quarterly cash distributions made to general and limited partners for the years ended December 31, 2020, 2019 and 2018 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):


	Year Ended December 31,
	2020		2019		2018
General partner's distributions:
General partner's distributions	$	986	$	1,711	$	1,553
General partner's IDRs	17,632		31,781		24,224
Total general partner's distributions	18,618		33,492		25,777

Limited partners' distributions:
Common limited partners' distributions	127,070		83,873		76,113
Total cash distributions	$	145,688	$	117,365	$	101,890
Cash distributions per limited partner unit	$	3.605	$	3.440	$	3.120