Good afternoon, my name is Tai, and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek US Holdings Q1 2017 Earnings Conference 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. [Operator Instructions] Thank you. Mr. Johnson, you may begin your conference.

Thank you, Tai. Good morning. I would like to thank everyone for joining us on today's conference call to discuss Delek US Holdings First Quarter 2017 Results. Joining me on today's call will be Uzi Yemin, our Chairman, President 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. On today's call, Assi will begin with a few opening remarks on financial performance for the quarter, Danny will cover the 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 first quarter 2016, Delek US reported net income of $11.2 million or $0.18 per diluted share compared to a net loss of $29.2 million or $0.47 per basic share in the first quarter last year. We continue to make progress towards the acquisition of the remaining outstanding common stock of Alon that we do not already own in an all-stock transaction. We received a clearance from the FTC in early April. And we expect to close this transaction on July 1, subject to approval of both Alon and Delek shareholders. We entered the first quarter, with approximately $591 million of cash on a consolidated basis and $234 million of net debt. Excluding debt of Delek Logistics, we had net cash of approximately $159 million as of March 31, 2017. Now, I will turn it over to Danny to discuss additional financial detail.

Thank you, Assi. For the first quarter of 2017, Delek US reported adjusted net income of $10.1 million or $0.16 per diluted share, compared to an adjusted net loss of $53.4 million or $0.86 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 change on a year-over-year basis was improved 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 income of $2.8 million in the first quarter of this year, compared to a loss of $17.8 million in the prior-year period. Our operating expenses declined by $7.8 million compared to the first quarter 2016. This decline was driven primarily by reduced outside services and maintenance expenses. During the first quarter of 2017, our Tyler refinery underwent 16 days of planned downtime and the majority of the costs associated with that work were capitalized. General and administrative expenses decreased $2.5 million on a year-over-year basis. This decline was primarily due to reduced outside services. Finally, our income tax rate, excluding the non-controlling interest income associated with Delek Logistics of $4.1 million was 30.9% in the first quarter of this year. Turning now to capital spending, our capital expenditures during the period were approximately $15.2 million, compared to $6.5 million in the first quarter 2016. During the first quarter of this year, we spent $10.8 million in our refining segment, $2.8 million in our logistics segment and $1.6 million at a corporate level. Our 2017 capital expenditures are forecast to be $89.2 million, which compares to $46.3 million in 2016. This amount includes $65.1 million in our refining segment, $18.3 million in our…

Thank you, Danny. Increased drilling activity in the Permian basin began to benefit our operations in a number of ways late in the first quarter. In refining, the Midland to Cushing WTI differential to move to a discount, as we entered the second quarter. In addition, increased crude oil production has improved gathering economics in our business. In logistics, the growth margin per barrel in West Texas increased and crude oil price differential support increased shipment on the Paline Pipeline. We expect our presence in the Permian Basin to increase upon a successful acquisition of Alon. We believe that we can create approximately $95 million of annual 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 Permian focused refining system with approximately 200,000 barrels per day of access on a combined basis in our logistics system is well positioned to support this large operation. We ended the quarter with approximately $591 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. Before, I turn the call over to Q&A I want to welcome Kevin Kremke to the team. He has been with us since early April, and will become CFO on June 1. I also want to thank my dear friend and partner, Assi Ginzburg, for his contribution as CFO, and on June 1, Assi will transition from that position into a new role with the company strategic planning and business development. Assi, you're not going anywhere. With that, Tai, will you open the call for questions?

Tai, can we turn it over to Q&A?

[Operator Instructions] And we do have a question, our first question comes from the line of Brad Heffern with RBC Capital.

Hi, everyone.

Hi, Brad.

Hey, Uzi or maybe Assi, I'm not sure, I wonder if you could go into a little more detail on El Dorado getting the dollar FX [ph] exemption, correct me, if I'm wrong. But I think in the past, that facility hasn't gotten one before. So I was wondering what changed this time around. And I was also wondering, it looked like the gain on RINs you reported this quarter was actually more than RIN expense you guys reported last year. So I was wondering if that exemption action meant that you're net long RINs in 2016.

Let me take it one by one, I think there are three questions here, Brad. I'll answer the first one. Try to answer the second one. And I'm sure Assi will answer the third one. So the first one if El Dorado got it in the past, the short answer is, yes, it did get in the past. It was meaningful. And obviously, RINs at that time weren't $1. But to answer your question, yes we did. The second question about the expenses, I'm not sure I understand what the question is. If you can, clarify that question. And then, I'll let Assi answer the third one.

Yes, I was just saying that I think that the gain that you guys reported this quarter, $46.5 million or $47.5 million, I think last year the RIN expense you guys reported was like $40 million. So wondering if getting this exemption meant that - basically, that you had like a net gain on RINs for last year.

First, I will say on the first question, to the answer, in the last few years El Dorado did not had a waiver. I think the last time it was 2012 probably, maybe 2013. So I think the RIN is meaningful, we didn't have a waiver. Second, once we got the waiver, we had RINs on hand and we were long, but the value of those RINs went down. So I'm not sure exactly - when we reported the cost of RINs that was - what we reported was what we actually bought in the market. And that was what we paid for it, in some cases, $0.80 to $0.90 to even a $1 a RIN. So those are two separate basically aspects when you look at it. But we do know is that the value of what we got was $47.5 million.

Okay. I'll take that one. It's kind of complex. I guess, secondly, I was curious on the Tyler margin this quarter. Typically, we don't see Tyler and El Dorado so close on realized margins. Was that just the impact of the turnarounds or was there anything else going on there?

Well, obviously, there is a lot of noise with turnaround. Building products, shipping products from the Gulf to supplement that, make money on that, then shutting it down, then restarting. Sometimes you don't get the right products for the first few days, so lot of noise. I wouldn't read much into it this quarter. That's the reason we were specific on the 16 days shutdown.

Okay. Got it. And then, finally, Assi, if you can just give your updated thoughts on - or sorry, Uzi, on the Permian spreads. You talked in the past about how important you thought it was for production levels to get above the sort of take-or-pay agreements. Where do you think we are versus that now and what's the outlook?

We are probably not far away from being breakeven. For a while, I thought that we were there. But now with the filling up of the North Dakota pipeline, which as you know started ETP [ph] pipeline that starts June 1. There is noise in the area. But I believe that the take-or-pay will exhaust themselves. If they didn't already, it's happening any day. And we'll go to transportation cost. We already saw Midland moving from plus $0.50 to minus $1. Now, it's little less than that. It's minus $0.70 or $0.80, I think. I didn't look today. But that's - and we see the differential between Midland and LLS moving out. That's basically what we need to look at. Now, the next leg, obviously, is how much of that production, including the Bakken production can be absorbed in the Gulf Coast refineries. And I don't know that you probably know - I said it in the past, you guys probably know that number better than I do. I don't know that number. But there will be a point that that capacity will exhaust itself. And then it needs to clear the export market. And then we are talking about completely different ballgame. And do I think that it's going to be, do we think that it's going to be $5 dollars, maybe for short periods of time. Do we think that $1 dollar is sustainable? Probably not. The breakeven in our model show $1.52, $2 under long-term differential.

Okay. Thanks for all the color.

Next question comes from the line of Neil Mehta with Goldman Sachs.

Good afternoon, guys.

Hey, Neil. Good afternoon.

Kevin, welcome. Assi, congratulations. The question I had was related to the Alon transaction, and just what steps in the process remain to get us across the finish line on July 1. And then I had some follow-ups on this topic.

I think the main step is to basically announce the record date and set up the meeting for the - in order for the two shareholders to vote. And we're in a process to get it down in the next few weeks.

Okay. Great. And the target is July 1, right?

We wouldn't publish a specific day, if we weren't confident that this is achievable.

Thanks, Uzi. And the follow-up relates to two different topics as it relates to the transaction. The first is just, Krotz Springs, any early thoughts on that asset and different options there. And then the second is just around ALDW, obviously, ALDW had a very good trading day today. Just how you think about what the right strategy is about folding that asset into the company?

Okay. So let's go one-by-one. Obviously, I'm taking this - my capacity as the Chairman Alon, and in a way, CEO of Delek, so I'll be little muted on that. But as I told you that - as I - we talk the market in the past. Krotz Spring is an asset that will need attention. Now we don't take the idea of shutting down the refinery very lightly that not something that we do very lightly, especially in light of the - and you saw Alon's results today, Krotz Spring did pretty good in the first quarter. Without all the help that if needed - it needs It needs attention in three main areas. First, the transportation of the crude. The transportation, not the crude itself - the transportation, not the crude itself. The transportation is very expensive. Second, the operation itself including the all Alki [ph] project as well as the DHT and the Sulfur plant. And the third one is making sure that the net debt our good from Krotz. Now we just need to remember one thing and other one to rig much into it. But if - and Krotz was designing, this is a lightweight refinery. It was designed to run light sweet barrels. And in today's environment, when we saw mass in Midland at par, it's more - let's put it this way, it's disadvantage to the Gulf Coast refineries, is diminishing, because of the price of crude. It doesn't mean that it doesn't need attention from this three areas, which when we get in will object the market, because I think we are developing detailed plan. And I'll leave to that, Neil. The second one, ALDW. ALDW, our Big Spring is a great asset, I'm not surprised obviously with the result that Big Spring is delivering. We set it all along that once the differentials in West Texas worldwide as well as the wholesale margin will increase and we see it in DKL West Texas margins as well. Big Spring will do very well. ALDW, that depends on the yield, and obviously we show the market that we have patience. So if it makes sense to our shareholder will look at that, if it's not will continue with the structure. And we believe that this is very good asset. I want to be clear though. I don't believe and having four public companies, four refineries. So that will need to change, but as we all said and we waited for two years to complete the Alon transaction. We have time and patience and we need to make sure that we create the right value for our shareholders, and I'll leave it to that, Neil. I hope that wasn't too long.

That was great. Last question for me just going back to the RINs stuff in the quarter. I just want to be clear on this, so the waiver that you've got, we should treat this as a one-time benefit or is there the potential for you do go back to the EPA for additional waivers?

As we said, we got in the past, I don't remember 2012, 2013, I believe two years, both years we got it. And that's something that we look at it carefully. You can treat it any way you want, I just want to clarify one thing that this is something - this is ongoing process that we evaluate that, and we talk to people all the time about the situation. Also I want to clarify one more thing that I think more than clear with our announcement. That waiver basically allowed us to sell RINs that we had on as inventory. So I want to make sure that people don't - you don't treat this as a non-cash event - every penny of the $47.5 million found themselves back as cash to the company. As a matter of fact, some of it we'll find back during the second quarter, because we sold that later, after we got the waiver.

Okay. That's great, Uzi. Thank you.

Our next question comes from the line Paul Cheng with Barclays.

Hey, guys. Good afternoon.

Mr. Cheng, welcome back.

Hey, first Kevin, welcome, and Assi, best of luck with your new assignments. Maybe that this is for Assi, at the end of the first quarter can you share with us that what is your RIN liability in on the balance sheet. Is it a negative or is it a positive number?

It's very close to zero, the liability on the balance sheet. But we feel have to collect some of the RINs that we saw that during quarter.

So you still have some cash coming in from the sale of the RIN in the first quarter. But that you are not going to have a lot of RIN to be sold in the second quarter?

Correct. We had basically surplus of around $15 million of RIN, and top of that we had roughly $20 million of RIN that we sold and haven't collected, yet.

So $12 million, you haven't collected, okay.

$20 million, 20.

Oh, $20 million, sorry. Okay. And the second one, Uzi, talk about $95 million synergy in the $78 million potential dropdown in the Alon asset. How of that $78 million, how of them is actually sitting in ALDW. And also that for the $95 million, and also the $78 can you maybe that give us a little bit more elaboration in terms of into different buckets?

Yes. Let's start with the synergies, the second one Assi will give you an answer on the different buckets. The EBITDA in our presentation, but I'll try to recap that, I don't have presentation before me. In the $95 million, there are four buckets. The first one which is basically, the more difficult one is the overhead, is dealing with people, which is the first bucket. And that bucket, which is kind enough to give me that number, it's between $33 million and $35 million. That's basically reducing the cost of public company reduced the number of people in the overhead and take some of the actions. We expect that to happen pretty quickly that's $33 million to $35 million. Then we have a little - around $20 million - $19 million to $20 million of the cost of capital that means some of the LCs [ph] that Alon uses, refinance of different areas, utilizing the cost of capital of DK that is much lower than Alon. And we have a detailed plan on that, if you want Kevin and Assi can expand on that a little later. The third one is operation, that's basically insurance, procurement that's not a big number it's between $13 million to $15 million. We think actually that that number has the potential to grow. And last one is commercial that's between $20 million to $35 million that's the purchasing power that doesn't go to the expenses, but goes to the gross profit i.e., the premium gathering the ability to buy either free stock cheaper, and utilized the assets in a bear way that's the $95 million or $85 million to $105 million number. And again it's all in our presentation. Assi, if you want to talk about the dropdown.

Sure. So on the dropdown the piece that is part of ALDW is the asphalt terminal that we think it's between $9 million to $11 million of annual EBITDA. The Big Spring other assets mainly the storage, which is $8 million to $10 million of annual EBITDA. And Big Spring wholesale marketing that we estimated to be around $15 million. So when you add those up, it's around $30 million to $33 million of annual EBITDA that we believe we can drop to DKL.

But that the majority of them is actually sitting to ALDW then. So until that you resolve that you may have some difficulty to drop it down, I presume?

I wouldn't - I'll let Assi answer that, but I wouldn't assume that obviously you're talking about two different public companies with conflict committees, but it was done in the past within DK's. I'm not sure, while you say it's more difficult to Assi.

There is no doubt that dropping the asphalt terminals and some of the things that they have in California makes more same, and that's what we plan to do in stage one. And then, we have two more buckets, with each one of them is around $30 million, which is one piece is ALDW and one piece is Krotz Spring. So with that being said, as Uzi mentioned these are two public companies and they all into look at what's best for their shareholders. And I think that even for ALDW, it makes sense to deleveraging the company over time, especially with the favorite ALDW is being over 10% of all-in costs as part of their interest costs. So there is benefit for ALDW to drop those assets even in this environment.

Okay. Just curious that I mean, when I looking at last year in 2016, Alon, the refining EBITDA is about $61 million. And if we're looking at - DK is about $100 million, and so the $160 million, so from that standpoint, you said - is that a concern that if we in deed dropping the entire $70 million or the $68 million if you excluding the asphalt into logistics that ratio maybe too much that to be sustained by the company in - maybe that bottom half of the down cycle?

So first, when we look at our business in 2016, it was in our mind, the unique scenario where headwinds at the highest costs that we've seen. And we already got most of that money back the following year. We had Midland trading above DI for the full-year and as a result of that some of that negatively impacted us. In addition to that when we speak about Krotz Spring, which is $30 million out of that $75 million of droppable EBITDA. We will not drop it, unless at the same time, we will do some project to increase the amount of EBITDA for Krotz. So if you look for example and what Alon announced in the past that that project for example, the Alki [ph] $40 million of potential return in a year. And that will enable us to do some of what we discussed.

Okay. Assi that do you have a number of what is the DD&A close up or reduction, once you fully acquired Alon going to look like?

I will refer to the S-4 we have provided an estimate over there. And right now, based on our preliminary estimate what we have filed, when you combined both company the total distribution on an annual basis. We go down by approximately $65 million, right, then you just do…

Depreciation.

Yes, depreciation will go down by around $5 million.

$65 million on the pro forma…

On an annual basis, so if you take the loan depreciation today, Delek the direct depreciation today. Estimate that the total depreciation, we'll go down by $65 million, and if you think about based on pre-tax - on an actual tax base that can be brought to us around $0.50 a barrel amount.

Sure.

Sure. Thank you.

Our next question comes from the line of Paul Sankey with Wolfe Research.

Hi, everyone. And Kevin, again welcome, and Assi, good luck. I was going to ask Uzi about sort of normalized EBITDA type question. I am not sure whether we've just covered that. I guess the point was Q1 was pretty week from a cash flow point of view, but there is noise and we've got a lot going on in terms of corporate action. You've always done a good job in terms of explaining what the normalized cash flow value, if Delek would be, I don't know, as I say if we just cover that, I'm big confused quite frankly. But is this something you can add just to make it clear, where you see the business in terms of some kind of mid cycle view of the various components. If you feel like, already answer that. I'll ask you another one, which is could you just talk about more about the Permian, and how you're doing that and what you see happening there? Thanks.

Okay, thank you. We always happy to answer your question, regardless if we answered them 50 times before that. And the honest answer it will be…

I'm not sure, if we already asked or not…

Well, we know you're British, so we are willing to - you have really British manner, so we want to welcome that culture. So the truth of the matter is that we didn't ask for the first question. So let me ask that that one. So the second one, we did that will repeat myself. The first one, normalized EBITDA, well, one thing that we need to remember is that very, very, very important. Is that during the first quarter we had three big noise in the quarter even though we reported $0.16 that came from the waiver. We had three things that impacted us are not so great. The first one Midland was premium of, I believe $0.50, since then, it returned to a negative of call it $1 little less than that. So in our mind, we are taking about Midland being about $0.50 to $2 normalized under that's if you take that, that's $2 versus what you see with the first quarter between us and Alon, we are processing 70 million barrels. So you are talking about another $150 million. The second one that was very messy this quarter is the turnaround in Tyler. We don't expect to have turnaround every quarter hopefully. But that impacted Tyler performance and we need to clean this up. And the third one is that some of the assets we have, because of the Permian activity, you don't see it immediately, but we see it now already the West Texas margin, the Paline, the gathering all being impacted by the activity in the Permian as well as the RINs. So if we maintain RINs at the level of $0.40, which my personal belief is that it's going to go down from here, but that's just a guess. Then you need to add all that in to your model. That's on top of one big thing, which is the synergies, which we feel very comfortable about that. So I'm sure Keith and Assi will be happy to walk you through the model after the call, but these are the components that we'd like you to consider as a mid-cycle normalized EBITDA. Now this without mentioning and I'm not planning to mention anything about crack spreads. Crack spreads will do, whatever crack spreads want to do. But when you see Mars [ph] and Midland at the same price, that you benefit a light barrel versus the heavy barrel, and I leave to that.

Yes. I understood. And as I said, the previous questions did some way to answering parts of that. It feels the biggest uncertainty looking forward is Krotz Spring, probably?

Well, we answered that as well. But I'll be very brief on that. The idea with Krotz is to look very carefully if we can improve the three components. The cost to bring barrel to the refinery, not the cost of the barrel itself, because Krotz can run very comfortably Midland barrel. The problem is that they cost a lot of money to bring it over there and we need to look at that. The second one is the operation itself with the - because Alon did great job reducing their debt even this quarter. But they didn't do a lot about Krotz and that will require attention. And the third one is to make sure that the wholesale and the products are being sold at premium versus the situation today. But Krotz has in situations like today a benefit. It runs sweet barrel. It produces a lot of light barrel, light products. And also, with RINs being at this price, wholesale is not as bad. And then - and you can see in Alon's results that Krotz has done decent, not great, decent under these circumstances. Obviously, that will - as I said, the refinery will require a lot of attention.

Okay.

I'll leave it to that, Paul.

Yes, and you feel that you've answered. I'll go back through the transcript, but I guess you feel like you said what you need to say about the Permian then?

Yes, I did and, obviously, I'm willing to take it offline with you and give some education as I see it. I'm sure you know about that as much as I do, if not more.

Well, we were in Midland and we saw a very nice looking Delek tank, so…

Well, shortly, you will see a very nice looking refinery.

Okay. Good. Thanks, Uzi.

And our next question comes from the line of Roger Read with Wells Fargo.

Good afternoon. How are you all?

Mr. Read, I think good evening for you, not almost.

Evening, afternoon, we'll roll with it either way. Hey, couple of questions, one of the demand side. It's been a lot of conjecture that we get, weaker gasoline demand depending on which numbers you pay the most attention to. I know you don't have your retail outlet anymore. But just curious what you were seeing in the whole markets there.

Obviously, we lost our binoculars if you will. And that's potentially for me to wish again MAPCO all the best. I do obviously see, we do some - see wholesale and some sales. I do believe that demand, as I said in the past is it down 3%, probably not. Is it down 1%, I believe so. I'm surprised with that. But looks like demand is little softer. I must say that in our refineries, the four refineries that we, because we see there are a lot of refineries as well, demand was pretty strong. But overall, I think the - along the colonial [ph] demand is softer.

Okay. Thanks. Tier-3 [ph] got talked about a lot latter part of last year as potentially having an impact this year. Maybe with gasoline demand a little softer, it hasn't been a big problem and we're just now entering summer time. But just curious, if you were seeing any pricing issues in the market or impacts on margins from that.

I don't know much about it yet. I'm just going to say that I think octane is still short, and we see the differentials between premium and regular widening a little bit. But I think it's too early to say something about that. And obviously the people that are subject to this. If you remember, we had the smaller refinery exemption until 2020. So you probably - we don't have as much visibility as the people that have - that were needed to be in compliance with that. But I do think that based on my knowledge of - or our knowledge of our company that there should be some octane hit. I don't know the magnitude yet. That's probably something that you guys can ask our colleagues and peers. But I can't imagine that there is no octane hit in result to this Tier 3.

Okay. Great. And, Assi, I'm going to throw one last question at you before you got to be the special projects guy and Kevin will catch you on the next call. But cash flow on the quarter, roughly $100 million decline. You talked about the $20 million of RINs that you sold and you haven't got any cash back yet. I was just curious, was there anything else in the quarter in inventory bills that you come back in the next couple of quarters here.

We did build during the quarter a $50 million of accounts receivable, slightly even over that. Some of it is the results of the buy and sell we are doing in Midland. And it was even a bigger impact on the quarter, because of the overall turnaround in Tyler that we didn't get the normalized working capital. So I will say a big part of it should come back over the year.

Okay. Great. Thank you.

And our next question comes from the line of Edward Westlake with Credit Suisse.

Great. Congratulations with getting closer. A quick question on post-close July 1, I mean, what's the communication plan? I mean, there is obviously [sales out potential] [ph] at Krotz, but so ALJ has talked about Big Spring. There's lot of corporate restructuring benefit of dis-intermediating crude, so just wondering if you're going to do some kind of analyst update on the Q2 call.

Once we get done, our idea is to get to - put a plan together. Obviously, we need to put our plan together. We're putting it - as we speak, we actually, I think put it already together. But that will tweak it. And may be in the month of July we'll consider an Analyst Day just to update the market. We'll - I don't want to commit on anything right now, depends on the circumstances. But obviously, there are lot of questions in regard to the merger that the market won't answer, then want to be as transparent as we can, giving these answers.

And then, as you come up with that plan, do you imagine if there is a room for an ongoing buyback, as well as the dividend? I mean, obviously, given the cash on the balance sheet you have an authorization. But given the merger, I guess, it's been less used and it could be post-merger with the synergies coming through, and if then, can you just expand it?

Well, we obviously have that flexibility. What we want to see, as we said it in the past, that in the cards we - we spoke to our board about that in the last couple of days as they were here. One thing I'd like you to remember, Alon, well, did great job reducing debt, have left several projects with good IRR and good returns. So the balance will be between the two. I don't - I imagine that we can do both at the same time depends on the market condition. But honestly, we want to drive value anyway we can. So I guess this combination we find itself, as we finalize our CapEx project in the logistics as well as the Alon areas.

Thanks, I look forward to it.

Thank you.

And our last question comes from the line of Fernando Valle with Citi.

Hi, guys. Good afternoon. I guess, I just want to follow on the ALDW question. If you were to take it over, would Delek have a vote on an eventual acquisition, how would the roll up occur as far as the mechanics of it? Would it be up to just minorities or would DK also have a vote on it?

That's a legal question that we will need to focus. I think that both ways doing that we just don't want to take risk that are not needed. So we will look at that situation carefully as the time mature, then it gets closer to doing something like that. Obviously, something like that is not feasible between now and closing. So we have time to think about that. But I do think that both options exists.

Okay. Fair enough. And then, I guess, just to follow on the previous question, if you could just a high level, you think the call on capital once we close the deal is you have enough flexibility to grow both the logistics and do these quick-hit programs at ALJ, so both Krotz and Big Spring, the smaller projects, and as well as finance growth within DKL, is that correct?

That's a great question. And that's exactly - over the years, you all know that we were blamed to be too conservative. While I'll take the blame, I think it served our company very well that allowed us to make acquisitions during tough times and bring value to our shareholders. We are hoping that the last example is Alon. We don't want to take the balance sheet and then stretch it. However, we believe that this situation with Midland will get even better. Then that will allows us to be very competitive in the marketplace. If this happens we don't see any reason, why we can't do both, especially in light of the fact that the situation at DKL is not tied from a leverage standpoint.

And so, I guess, this might be a question more for the DKL, but it's - would you focus primarily on the gathering and transportation side or are there other areas of the infrastructure bottlenecks in the Permian where DKL could play as well?

I think that the areas that we like the most is we said all along that we want to be a Permian company. I think that DKL said the same thing, actually know they did. So I think that the Permian area is a main focus for us. I don't know of any other refinery in the Permian once we get Alon. So that brings tremendous amount of opportunity. Again, as I said, Alon did great job doing a lot of things. Alon did not gather barrels into the refinery direct. And we believe that that is the first thing and the most natural thing as we hear from producers that we basically need to do so.

Great. I'll leave it there. Thanks again.

Thank you.

[Operator Instructions] And there are no more question at this time, Mr. Johnson.

I'd like to thank my colleagues who are in the room. I'd like to thank the Board of Directors for their confidence in us. I'd like to thank you guys for listening to us, and your confidence in our company. But mostly, I'd like to think our employees for making this company what it is. Have a great day. Thank you.

That concludes today's conference call. Thank you for your participation. You may now disconnect.