Keith Johnson – Vice President of Investor Relations Assi Ginzburg – Executive Vice President and Chief Financial Officer Danny Norris – Chief Accounting Officer Uzi Yemin – Chief Executive Officer.

Theresa Chen – Barclays Capital Gabe Moreen – Bank of America Merrill Lynch Cory Garcia – Raymond James.

Good morning. My name is Steve, and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek Logistics Partners First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question-and-answer session.

[Operator Instructions] thank you. Investor Relations, Keith Johnson. You may begin your conference..

Thank you, Steve. Good morning. I would like to thank everyone for joining us on this webcast to discuss Delek Logistics Partners first quarter 2015 financial results. Joining me on today's call will be Uzi Yemin, our general partner's Chairman and CEO; Assi Ginzburg, CFO; Danny Norris, CAO; and other members of our management team.

As a reminder, this conference call may contain forward-looking statements as that term is defined under federal securities laws. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements.

Without limiting the foregoing, the words believes, anticipates, plans, expects and similar expressions are intended to identify forward-looking statements. You are cautioned that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and in our latest earnings release.

As a result, actual operations or results may differ materially from the results discussed in the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.

Today's call is being recorded and will be available for replay beginning today and ending August 4, 2015 by dialing (855) 859-2056, with the confirmation ID number 29411000. An online replay may also be accessed for the next 90 days at the partnership's website at deleklogistics.com.

Last night, we distributed a press release that provides a summary of our first quarter 2015. This press release is available on our corporate website and through various news outlets. On today's call, Assi will begin with a few financial comments, and Danny will review our financial performance. Then Uzi will offer a few closing strategic remarks.

With that, I'll turn the call over to Assi..

Thanks, Keith. During the quarter, we remained focused on initiative to provide future growth at DKL. And we committed approximately $153 million of investment. This including two drop-down assets from Delek US and entering into two joint venture pipeline development project.

Our DCF was approximately $17 million, and EBITDA was $21 million for the first quarter of 2015. Including these results is approximately $3.4 million of cost from a combination of expenses related to growth initiative, reduced volume in our East Texas assets and higher ethanol cost relative to market in our West Texas wholesale business.

This compared to DCF of $17 million and EBITDA $20.2 million in the prior year period. We ended the quarter with DCF coverage ratio of approximately 1.2 times or excluding the $3.4 million of cost our adjusted coverage ratio was around 1.5 times.

Based on our performance, we are pleased to announce an increase in our quarterly distribution to $0.53 per limited partner unit for the quarter ended March 31, 2015, which is a 4% increase from our fourth quarter 2014 distribution per unit.

This is our ninth consecutive increase and it’s a 25% higher than our first quarter 2014 distribution of $0.425 per unit. Now I will turn the call over to Danny to discuss the financial results..

Thank you, Assi. For the first quarter of 2015, Delek Logistics reported net income attributable to all partners of $14.6 million or $0.56 per diluted limited partner unit compared to net income attributable to all partners of $14.7 million or $0.59 per diluted limited partner unit in the prior year period.

Our performance during the quarter benefited from acquisitions completed over the past year and higher contribution margin from the Paline Pipeline compared to the first quarter of 2014.

These factors in the first quarter of 2015 offset a lower margin in the West Texas wholesale business, lower volumes on our assets supporting Delek US' Tyler refinery, and approximately $1.2 million of professional expenses related to growth initiatives.

As a result, our contribution margin increased to $24.5 million in the first quarter of 2015, from $22.8 million in the prior year period. Now I will spend a few minutes discussing our two reporting segments. First quarter 2015 contribution margin in our Pipeline and Transportation segment improved to $19.4.

million compared to $12.8 million in the first quarter of 2014.

The improvement was primarily attributable to improved performance from the Paline Pipeline, due to the new agreements effective on January 1, 2015, higher volume on the Lion Pipeline system due to Delek US' El Dorado refinery processing more barrels compared to the first quarter of 2014, when it underwent a scheduled turnaround and storage fees from the El Dorado tank farm acquired in February of 2014.

Contribution margin in our Wholesale Marketing and Terminalling segment was $5.1 million in the first quarter of this year compared to $10 million in the prior year period.

This decrease was primarily due to our West Texas wholesale business as the gross margin was $1.40 per barrel in the first quarter of 2015 compared to $3.57 per barrel in the prior year period. This decrease in margin was primarily driven by more competitive environment during the period which reduced the margin per barrel on a year-over-year basis.

Also during the first quarter of 2015, contribution margin was reduced by $1.2 million due to fixed ethanol priced contracts that were above average market prices. The margin per barrel in the first quarter included approximately $1.7 million or $1.13 per barrel from RINs generated in our ongoing ethanol blending activities.

This compares to a gross margin that included $1.1 million or $0.75 per barrel from RINs in the first quarter of last year. During the first quarter of 2015, Delek US' Tyler, Texas refinery, was down for scheduled turnaround in the completion of an expansion project.

On a year-over-year basis, volumes in the Tyler terminal and the East Texas marketing agreement were lower, reducing the contribution margin by approximately $1 million. As of March 31, 2015, Delek Logistics total debt was $316.4 million.

We ended the quarter with approximately $379 million of unused availability under our $700 million credit facility. Our leverage ratio was three times well within the 4.25 times allowable under our credit facility.

Capital expenditures were approximately $3.8 million in the first quarter of 2015, of which $1.2 million of CapEx was reimbursed under our Omnibus agreement with Delek US. Total capital expenditures for 2015 are expected to be $19.7 million which includes $14.4 million of maintenance and $5.3 million of discretionary related projects.

Included in the 2015 amount is approximately $4 million of CapEx to be reimbursed under our agreement with Delek US. This compares to total expenditures in 2014 of approximately $7 million. With that, I will turn the call over to Uzi for his closing comments..

Thank you, Danny. During the first quarter, we completed initiatives that should provide continued growth for Delek Logistics. This includes the purchase of the Tyler crude oil storage tank and El Dorado rail offloading facility at the end of March from Delek U.S. which was part of the previously identified drop-down.

In addition, through our Tyler terminal and under the East Texas marketing agreement were positioned to support Delek US Tyler refinery 15,000 barrels per day expansion that was completed in March. The combination of the drop-down and potential volume increased from Tyler should add approximately $11 million of EBITDA on an annual basis.

Also we entered into our first joint venture development projects representing an estimated $91 million of capital investments to construct two pipelines that are expected to be completed during 2016.

The Caddo pipeline while we are 50% owner will ship crude from Longview Texas to this Shreveport, Louisiana area, and improves our ability to supply crude to Delek US' El Dorado refinery.

The RIO pipeline where we are 33% owner will improve infrastructure in the Delaware Basin and connection to Midland, as well as offer the potential for future gathering operations in the area. Our sponsor Delek US is expected to be participating shipper in both projects.

With the completion of previously identified drop-downs from Delek US we remain focused on acquisition opportunities. Development project and exploring ways to part of the Delek US to provide the initial growth. Also the recently announced potential investment in Alon USA by Delek US may create additional growth opportunities for DKL.

The combination of our financial position and growth initiatives should support our target of annual distribution increase of at least 15% per year in the future.

With that, Steve, would you please open the call for questions?.

Absolutely, thank you. [Operator Instructions] Thank you. Our first question is come from the line of Theresa Chen with Barclays Capital. Your line is open..

Good morning..

Good morning, Theresa..

My first question has to do with the parent potential investment in the Alon USA and the comment about how this deal may lead to additional opportunities for Delek Logistics.

Can you expand on that or there a midstream assets at Alon and that could be suitable for drop-down to DKL and if so, can you quantify how much EBITDA do you think there is?.

Well, that’s a great question. Let me be clear with something and then, I’ll try to answer your question as much as I can. Alon USA is a public company. And making comments about them won't be something that we need to do this morning.

However, they did announce that they have $50 million to $80 million of midstream assets during their press releases and calls. So according to them, they have $50 million to $80 million of midstream assets.

Obviously, we have enclosed or Delek US hadn’t enclosed the deal yet, Delek US announced yesterday that they expect this deal to close as early as next week, as they got the HSR clearance. So all these open for closing of the deals. That will allow us evaluating the midstream assets.

Look at them as part of the family and decide in the future what we want to – how we want to drop-down if we want to drop-down. But at this point, we can’t comment specifically on specific assets that Alon have..

Okay.

That number the $50 million to $80 million range that they put out, but do you know that includes the Bakersfield rail terminal?.

That something that you are probably need to ask them as far as I understand that it is not part of the Bakersfield but that’s something that you probably need to post with them..

Got it, okay. For the JV projects, I appreciate the details on the cost estimates in the timing. I was wondering if you can give us a sense of what you expect for EBITDA contribution or what kind of returns you are looking for in these projects..

Absolutely. We always said and we are going to repeat that here, that we’re targeting eight to nine times EBITDA when we drop-down on the project that we do. For there is no reason to believe, that we’re not targeting eight to nine times EBITDA mostly. Now it depends on market conditions on that time.

But there is no reason for modeling purposes, there is no reason to believe that we’re not targeting eight to nine times as usual..

Great.

And then on the wholesale margin, as you’ve clearly telegraph before as – it does move around, but again from our modeling purposes on our forward-looking basis, is that $3 per barrel numbers still a good long-term run rate?.

That is correct. We actually see a recovering in April in the margin. So $3 I think I mentioned that you in the past, the $3 it will go, it went up from $6 to $60 went down not to buck 50 or little less than buck 50, $3 is a great number to you..

Thank you very much..

Thank you. Your next question comes from the line of Gabe Moreen with Bank of America Merrill Lynch. Your line is now open..

Good morning, everyone. Question is I guess following-up on Theresa’s in terms of the Alon drop-down assets do you – I know they flooded with doing in MLP in the past do you know if they are trying to keeping separate accounting for their midstream assets.

And so there is you could potentially move quickly to drop-down assets or not fully you can control those ALG shares..

Well, obviously that’s something to tell, we need to ask them if they have a separate accounting. I can’t imagine that they don’t. If they said that they have specific project.

But again, there is something that that’s a question that need to be ask to them again, we need to be careful here legally, not to mess with questions that are – questions that can be post to them, again just assume that if they have identified assets, they have some accounting around it that allow them to move fast.

They were planning to do a – or planning to have their MLP after running during the year. So I can’t imagine that they have the accounting treatments really..

Got it, Uzi. Okay. No more Alon questions, I understood. I’ll ask then in terms of the question around targeted returns on Caddo and RIO, I saw the Calumet announcement and their commitment to Caddo that they announced this morning.

The eight to nine times returns are targeting, how much more I guess do you need beyond Delek US' commitment to those pipelines to get to those eight to nine returns and does Calumet gets you there on Caddo and do you need more on RIO?.

I honestly gave one new slip over this eight to nine times in the past would prove that we can get eight to nine times, again I’m not going to comment on Calumet, comments obviously we have our calculation for modeling you can assume day one eight to nine times..

Okay.

And then I’m just curious in terms of on the ethanol side which is the wholesale – the wholesale contracts, that’s something where we just you know, you just need price of the ethanol to basically recover in order for margins to normalize, is that – is that what you are looking forward to those contracts reset and roll off over time?.

That’s a great assumption, that map that we already recovered if you look at ethanol is buck 57 as of yesterday..

Yes..

So, it is the – it has covered..

Got it. Okay. Thanks everyone. Thanks, Uzi..

Thanks..

Thank you. [Operator Instructions] Your next question comes from the line of Cory Garcia with Raymond James. Your line is open..

Good morning, guys..

Hey, Cory..

Completely understand sort of the ethanol dynamics out of the any impacts on the West Texas wholesale.

Would you guys provide a little bit more color on what exactly you saw in the first quarter on sort of the other products side that kind of lead to the weakness?.

Obviously, we had a combination of ethanol, our process of ethanol which I mentioned to Gabe, earlier that ethanol has recovered we went from buck 35 on ethanol to buck 57 as of yesterday. So ethenol has recovered which we expected so that’s something that I would lose too much flip over.

The first quarter usually is weaker in terms demand in that area and also please rememberer is drilling slowdown a bit which is now is picking up because of prices coming up. Over 60 that lead to a weakness in that area. I would, Cory as I mentioned earlier I would use $3 on an annual basis that’s the number that we are comfortable with..

Okay, yes, that makes perfect sense.

I do wondering also if there is any sort of weather impact, as you obviously heard some of that going on in the West Texas that lead to some conjunction at all?.

Yes, well, obviously, we don’t want to use this as an excuse, but the weather wasn’t impact us, and all this road block and that was the tough winter for Texas, and so that something that impacted us as well..

Okay, yes, that makes sense. And kind of turn to the page I guess over to the fuels distribution business and sort of future plans regarding that, any update on how you guys are looking at that and obviously you’re still trying to sort of build out scale longer term.

But as we look at potentially the drop-down of any sort of wholesale fuel distribution type of business into that, where this would be something that would fit into DKL or would it be a separate structure on Delek..

We mentioned that in the past that at the Delek US level, we are dated in fuel that they already for job done, as the business wasn’t mature in that however, it is maturing as we speak and, there are the potential if you think strategically for the Delek US asset that are heading to possibility of this happening..

Yes..

So we will look at that over the next probably 24 months, very seriously, that’s another avenue that we should improve our situation with Delek Logistics and that’s something that should be watched very carefully. We are not thinking about, but it’s suddenly an opportunity..

All right, make sense. Thank you, guys..

Thank you, Cory..

Thank you. There are no further questions at this time, presenters I turn the call back to you..

Thank you, Steve. I’d like to thank my colleagues, my friends around the table. I'd like to thank you the investors for the confidence in our company. But mostly, I would like to thank our employees who made this company what it is. Have a great day. We'll talk to you soon..

This concludes today's conference call. You may now disconnect..