Good morning, my name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek U.S. Holdings Q4 Earnings call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Keith Johnson, you may begin your conference.

Thank you, Tiffany. Good morning. I would like to thank everyone for joining us on this conference call and webcast to discuss Delek U.S. Holdings Fourth Quarter 2016 Financial Results. Joining me on today’s call will be Uzi Yemin, our Chairman, President and CEO; Assi Ginzburg, CFO; Danny Norris, CAO, as well as 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. On today’s call, Assi will begin with a few opening remarks on financial performance for the quarter, Danny will cover additional financial details before turning it over to Uzi to offer a few closing strategic comments. With that, I’ll turn the call over to Assi.

Thank you, Keith. For the fourth quarter 2016, Delek U.S. reported net income of $44.2 million or $0.72 per diluted share compared to a net loss of $31.5 million or $0.51 per basic share in the fourth quarter last year. Including in our reported results for the fourth quarter 2016 was an after-tax gain of $80.6 million or $1.30 per share related to the sale of our retail assets. In November, we closed a transaction to sell our retail-related assets to COPEC for $535 million plus a working capital adjustment and retail cash on hand at closing. This resulted in proceeds of approximately $379 million before taxes. Taxes are expected to be paid in the first and second quarter of 2017. We improved our financial flexibility in the fourth quarter, ending with approximately $689 million of cash on a consolidated basis and $145 million of net debt. Including Delek and Delek Logistics, we had net cash of approximately $249 million as of December 31, 2016. This compared to a net debt of approximately $137 million excluding DKL at September 30, 2016. Now I will turn it over to Danny to discuss additional financial details.

Thank you, Assi. For the fourth quarter of 2016, Delek U.S. reported an adjusted net loss of $27.7 million or $0.44 per basic share compared to an adjusted net loss of $4.3 million or $0.07 per basic share in the prior year period. A reconciliation of reported results to adjusted results is included in the financial tables of our press release. The primary driver of the exchange on a year-over-year basis was reduced performance in our refining segment, which I will discuss in more detail in a few minutes. Our 47% investment in Alon USA resulted in a pre-tax loss of $9.2 million in the fourth quarter of 2016 compared to a loss of $21.8 million in the prior year period. Prior year results included $18.7 million related to a goodwill impairment at Alon and the effect of a scheduled turnaround at Alon’s Krotz Springs refinery. Our operating expenses declined by $7.5 million compared to the fourth quarter of 2015. This decline was driven primarily by $1.3 million of lower utility costs, and the remaining decline was primarily attributable to reduced outside services and maintenance expenses due in part to cost reduction initiatives. General and administrative expenses increased $9.9 million on a year-over-year basis. During the fourth quarter of 2016, there was approximately $5.5 million of transaction expenses primarily related to the sale of the retail assets and the announced Alon transaction. Also in the prior year period, G&A was lowered by $6.4 million relating to proceeds from a litigation settlement. Finally, our income tax rate excluding the non-controlling interest income associated with Delek Logistics of $4.6 million was 48.7% in the fourth quarter of 2016. Turning now to capital spending, our capital expenditures during the period were approximately $22.1 million compared to $40.3 million in the fourth quarter of…

Thank you, Danny, and good morning. As many of you know, on January 3 we reached a definitive agreement to acquire the remaining outstanding common stock of Alon that we do not already own in an all-stock transaction. Our S-4 will be filed this morning and this will put us on course to close by midyear, subject to approval of both the Delek U.S. and Alon shareholders. We remain excited about the opportunities that will be created through the acquisition. We believe that we can create approximately $95 million of pre-tax synergies and have the potential to unlock $78 million of EBITDA from logistics assets that currently reside within Alon. This will create a premium focused refining system with approximately 200,000 barrels per day of assets on a combined basis, and our logistics system is well positioned to support this larger operation. With the potential of an increased inventory of logistics assets following the acquisition of Alon, we will have improved the visibility for growth for [indiscernible] as these assets can be dropped down in the future. Based on DKL’s guidance for distribution growth per limited partner unit of at least 10% through 2019, we would expect the distributions to the general partner to be approximately $90 million in 2017 and potentially grow to $33 million in 2019 using this 10% growth rate. We ended the year with a very strong cash position with approximately $689 million in cash and are well positioned to use this financial flexibility as we move forward with the next stage in our growth, while remaining focused on creating long-term value for our shareholders. With that, Tiffany, could you please open the call for questions?

[Operator instructions] Your first question comes from the line of Paul Sankey with Wolfe Research. Your line is open.

Hi, good morning everyone. Uzi, this is always a question for you guys, but can you update us on the latest activities in the Permian in terms of both gathering and how you see the offtake balance for future growth out of that basin? Thank you.

Good morning, Mr. Sankey.

Hello sir.

As usual, your questions are very broad, so I’ll try to tackle it from a couple of angles, if you will. First of all, as we all know the data - you don’t need me for that, the Permian production grew over the last two months by 100,000 barrels, so that’s 50,000 barrels per month on average. I don’t know if we can maintain this growth rate, but this 100 indicates that the 300 to 400 that we were thinking in the beginning of the year may be conservative, if you will. For me, the first point, and we said it in the past many times, the first point of balancing is not between production and offtake capacity. It is between production and the take-or-pays, and we gather some information to understand how much take-or-pays there are in the area. We are not done with our internal research because it takes a tremendous amount of effort, but we believe that in the next few months, we will get to a situation that the take-or-pay--or production exceeds take-or-pay. Now, we know that there were several announcements lately of extending of a couple of pipelines. I don’t think that there were any--to my knowledge, there are no new take-or-pay under these agreements, so the first sign of the market balancing will be when we see production exceeding take-or-pay and the discount at the premium is going to go to a pipeline tariff, if you will. With that being said, we already see signs that in 2018, 2019 if you look at the future market, we are--it’s inching down, or the differentials are inching up, and while this year it’s still around zero, fourth quarter is already showing around a buck, 2018 is more than that, and 2019 even better. We still don’t think that the market fully reflects the differential between oil, the gap between the production and the take-or-pay, and then the second point will be when production will exceed the entire capacity. I know that many of us focus on [indiscernible] capacity, but being an operator of pipelines, I don’t think that using 100% is the right number. It’s probably close to 90%, maybe 92% year-round, so again it will be interesting to see when we reach that point, I assume that point will add new pipelines will be somewhere in between 2018 and 2019. I hope I answered your question.

You did, actually you did more than answer, but then you raised a whole lot of questions. One I’ll just have a follow-up, if you don’t mind, wouldn’t the producers be incentivized not to commit to take-or-pay if they saw too much capacity?

As I said in the past, I think that we--many of us learned the lesson of these take-or-pays and being paralyzed on that, so I don’t see companies rushing into signing a take-or-pay. Certainly Delek is not rushing to sign new take-or-pays, and I believe that most companies think the same way we do.

Great. I look forward to seeing you tomorrow in New York, Uzi, and anyone else who wants to join us. Maybe you can publicize that, thanks.

Okay, thank you.

Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.

Hey, good morning Assi and Uzi.

Neil, good morning.

Good morning. Uzi, can you start off by talking a little bit about the timeline associated with the closing of the Alon transaction, just how you’re thinking about it playing out from a time perspective?

You know, Assi is not allowed to sleep or eat until he closes this deal, so I’ll let him answer that.

Neil, good morning. Our goal this morning would be to file the S-4. We hope we get it as soon as the market opens. That basically will give the SEC the ability to start reviewing the materials. If we don’t get any material comment, we can probably within 50 days after that amount be very close to be able to close the transaction, which will put us somewhere in early May. If the SEC will require and have some questions, maybe it will be as late as June 1. That’s our goal right now, and everything is on track on both sides to be prepared to respond to the SEC questions.

Thanks Assi. You highlighted in the release there will be a tax repayment associated with the retail transaction. Do you know how much that’s going to be? Has that been defined yet?

Sure, so when we look at the 2016 operating income or loss for Delek combined with the network transaction gain, which is mostly ordinary gain and not a capital gain, we expect roughly a Q1 tax payment of around $12 million and in Q2 we expect to pay the remaining, which is around $50 million. So basically we’re talking about $62 million that will leave our cash somewhere in May 2017.

Okay, that’s great. Last question is this morning, you have another sharp pullback in RINs prices. There’s some talk that Icahn reached a deal with the biofuels group here--or with the EPA, I should say, and your gasoline cracks, which are down by a similar amount. Are you of the view that RINs prices will ultimately translate--lower RINs prices will translate to the bottom line, or do you think that a lot of this is ultimately in the cracks?

Neil, I think that you’ve asked that question in the past, and I think that for everybody’s benefit, some of the RINs prices are in the cracks. I can’t believe that it’s not, so if we expect all of a sudden to get--this morning, RINs were $0.40, that all of a sudden we’ll get $0.40 directly to the bottom line, I think that we are, as a refiner, kidding ourselves. With that being said, the market is extremely--let me use not a strong word, but even though I feel very strongly about it, the market is--because of the price of RINs, the market is so inefficient and people are moving barrels from one place to another without paying attention to the pipeline tariff, and that needs to change. The incentive for this shipping all around the country with no incentive, just the RINs, that will change and we will go back to what we saw in 2011 and before that of normalized wholesale margins versus very weak wholesale margins that rely only on RINs. That should help mainly the niche market refineries in our mind.

That’s great, guys. Thank you.

Thank you.

Your next question comes from the line of Ed Westlake with Credit Suisse. Your line is open.

I guess two questions. The first one may be more about financial management. Obviously you’ve built up cash successfully at Delek and you don’t have to spend too much money on the Delek refineries. You’ll get some cash on the balance sheet with ALJ but also some debt, and then you can drop into DKL and raise more cash at the parent. So maybe talk about what the main plans are for that cash, particularly interested in buybacks and/or dividends.

Well absolutely. First, good morning, Ed. As we said in the past, we have the $150 million that our board of directors approved for the buyback, and also we continue to pay our dividend. Our long-term policy, and we’ll refine it and come exactly with numbers to the market, will be to continue to give money back to shareholders. The sale of the retail allowed us to collect a lot of cash. We paid some debt, and we feel comfortable with our financial situation. With that being said, as we said in the past, with the pending acquisition of Alon, there are some quick hit projects that we will come to the market after the closing and disclose them. We all remember that Alon over the last few years did a great job paying down debt, and that left us with several projects that are quick hit projects. With the improved outlook of the Permian, our plan is to come to the market with a comprehensive plan of how we’re going to divide between capex and return money to shareholders.

Okay, and then maybe on that second point, you’ve had great success with Caddo and RIO to participate in the tariff, which you have to pay to access crude - you know, that provides EBITDA to DKL, potentially it lowers your cost or increases your crude flexibility. But I suspect you’re not finished with that process, so maybe if there’s any comments in general terms you can help us understand the scope of the potential opportunity to sort of further integrate with the upstream and perhaps lower the cost of supply.

That’s a great question. That’s actually in the heart of our discussion with our board of directors yesterday. We have obviously now--we will have with Alon, subject to Assi and Amber finishing the deal, we will have four refineries. One of them is in the heart of the Permian Basin. Actually if you look at Howard County, which is the best county, Big Spring is in the middle of that county. I would like to say here for that years, Delek relied on many other people to help us, and they did a great job helping us getting our crude into our refineries; but now we have the vehicle that can--we can do it ourselves. We are in the middle of a process to find out how we want our refineries and how we want the logistics assets to support our refineries. We paid a tremendous amount of fees to other MLPs. They all did a great job for us, but with the growth, we think we can pay some fees to ourselves as well.

Okay, thank you very much.

Your next question comes from the line of Roger Read with Wells Fargo. Your line is open.

Hey, good morning.

Good morning, Roger.

Hey, and Assi might get to have breakfast, at least. We understand the S-4 has hit the tape here.

Don’t get him too excited. He is allowed to drink his tea - that’s it.

Okay, well at least there’s a little movement there. If we could maybe talk a little bit about the possible benefits of the much lower RINs prices, I think the last time we had a good discussion, the indication was in the third and fourth quarter the higher RINs prices really hurt capture. Let’s assume that the news out here today keeps RINs prices in a sub-$0.40 range kind of first half of this year. How can we think about that as flowing through to capture rates? I mean, you mentioned that it’s created quite a number of inefficiencies in the market, and maybe if RINs back off as a driver of cost structure, how does that help Delek improve its capture?

Roger, that’s a great question. If you look at our 2016 results, when we were somewhere between $0.80 to $0.90 on average, our overall actual cost to purchase RINs was around $40 million to $50 million, which is almost a buck a barrel. If RINs are going by half and maybe even lower than that after today’s announcement, at least it looks like half of that cost will go away, so that’s immediately going to benefit us by $20 million to $25 million month-by-month. What you don’t see on top of it, the wholesale business at both refineries probably over the last year and a half, I will say we lost at least that amount, which is another $40 million to $50 million, a buck a barrel in some cases on basically a reduction in wholesale margin. Wholesalers will not be able to compete anymore with refineries in an unfair base, and that was the situation over the last two years. We believe that if we go back to normality, both refineries eventually can benefit between $1 to $2 a barrel, going back to historical margins. So I think this can be for Delek on a long-term basis worth probably $100 million. With that being said, I don’t know what will happen to [indiscernible], and for Alon it can probably be not as big an amount but also a significant amount. Hopefully I answered the question.

No, that’s helpful. At least it kind of frames up the ideas that are there, for sure. Then I understand the intricacies around getting the transaction completed, but maybe going back, Uzi, to your comments about trying to balance investments in the Permian Basin, which I assume included the Big Spring refinery and shareholder returns, can you give us an idea of maybe some of the--maybe a dollar value of some of the opportunities you see in and around Big Spring once the transaction has moved forward?

We do have that information, Roger; however, I think it will be a little bit out of school. That’s an ALJ discussion and probably Alan, who did a great job on the call a couple of days ago, if he wanted, he would have given you some color. But at this point, just put it this way - we’ve got the information, we’ll disclose it as we get closer to the closing and we feel more comfortable legally doing so.

All right. I tried to get it on their call, but I couldn’t make star, one work, so I thought I’d try you. But thank you anyway.

Roger, just as a follow-up to your question about the RINs, I’m going to say one more thing. It’s not a big point for either refiner, but it is big for Delek U.S. It’s really we’re changing the tax credit for the biodiesel to a producers credit versus a blenders credit. I just want to refresh everybody’s memory that we do have, together with Alon, three biodiesel plants and in the fourth quarter, the combination of all these three plants made more than, call it $12 million, so really the change is going to be implemented on the producer side on the biodiesel credit. That’s a big, big plus this morning, and that’s one of the reasons you’ll hear us smiling this morning with the news that came out.

Great, so is that $12 million a quarter? The credit’s not worth $12 million a quarter, those businesses are making $12 million a quarter and then there’s a tax benefit in addition to that?

Well, it made $12 million--I’m going by memory. It was at least $12 million in the fourth quarter, but that was under the assumption of blenders credits. When you’re talking about producers credits on the biodiesel side, that’s a whole different game because now imports will come down or they will match, the $1 will go only to American producers, which we are a big portion of that, or we have a substantial portion of that. Then presumably not only the credit will help us, but the fact that it’s a producer credit and not blenders credit.

Okay, great. Thank you.

Again, to ask a question, that is star followed by the number one on your telephone keypad. Your next question comes from the line of Brad Heffern with RBC Capital Markets. Your line is open.

Morning everyone. Uzi, just as a follow-on to Paul’s question earlier, I’m curious if you’ve seen any change or degradation in the quality of the Midland barrels that you’re getting, and I’m also curious how much control you guys have over that.

Brad, good morning. Thanks for the question. The first one, yes, we do. The crude is getting lighter and we are seeing lighter and lighter crudes coming in. That’s a concern to us. As a follow-up to the answer I believe we gave earlier, we believe that having the Big Spring hub, if you will, and having our gathering which we gather already close to 65,000 barrels in West Texas but we put it in different pipes, should help us dramatically. So one of the reasons to think about controlling our logistics assets in regard to the Permian is controlling not only the fees that are being paid but also controlling the quality of the barrels that we are getting.

Okay, got it. Then I think historically, you guys did some capital projects at both refineries to try and make it so you could run a lighter crude slate. Is there more to do on that front if we continue to see this lightening of the common stream?

I’ll let Fred take that one. Fred, what do you think?

Yes Brad, we’re in reasonably good shape with respect to the lighter material. We would need to do a little bit of additional kind of de-bottlenecking, if you will, in some of the light naphtha treating units and in the crude overhead, but it’s nominal work.

Okay, I’ll leave it there. Thanks.

Your next question comes from the line of Fernando Valle with Citi. Your line is open.

Hi guys, good morning. Just curious on--Assi mentioned the wholesale margins and impact of RINs. Also wondering what you guys see as the impact of recent consolidation, particularly in the southwest region, on wholesale and retail margins, and how the integration of the Alon [indiscernible] business, wholesale business will go with Tyler.

Okay, so first one in terms of consolidation in the marketplace in regard to wholesale and retail, we think that while last year was a wonderful, wonderful year for retail because of the RINs, and obviously wholesale enjoyed that as well, this year may be a little more challenging for these industries. So in terms of consolidation, I would say--we always say that in order to create consolidation, you need two conditions in this order: first, the ego of the CEO; and second, money. With these two conditions, if they are being fulfilled, then we will see more consolidation on the retail and the wholesale side. In terms of connecting Tyler to the Alon wholesale, I must say, without getting into too much information that I cannot disclose, is that the Big Spring refinery is integrated completely with Alon’s wholesale and retail, so if there is anything about Tyler, it’s very little to support the Alon wholesale. It may be on the other side of that just a bit, but for the most part, that’s not substantial versus the situation that exists today.

Okay, great. Thanks guys.

There are no further questions in queue at this time. I turn the conference back over to our presenters.

I would like to thank my colleagues around the table. I’d like to thank our board of directors for the continued support they give us. Obviously I’d like to thank you guys and the investors for the confidence in us. We don’t take it lightly. Mostly I’d like to thank our employees who make this company what it is. Have a great day. We’ll talk to you in the future.

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