Delek US Holdings, Inc.

Hey, everyone. Welcome to the fourth quarter 2022 Dellick U.S. Earnings Conference Call. My name is Jamie, and I will be your operator for today's call. Please also note today's conference is being recorded. At this time, I'd like to turn the conference call over to Rosie Zuklik, Vice President, Investor Relations. Rosie, you may begin.

Good afternoon and welcome to the DELIC-US Fourth Quarter Earnings Conference Call. Participants on today's call will include Abigail Sorek, President and CEO, Todd O'Malley, EVP and Chief Operating Officer, Ruben Spiegel, EVP and Chief Financial Officer, Mark Hobbs, EVP, Corporate Development, as well as other management members. Today's presentation material can be found on the Investor Relations section of the DELIC-US website. Slide 2 contains our Safe Harbor Statement. We'll be making forward-looking statements during today's call and actual results may differ materially from today's comments. Factors that could cause actual results to differ are included here as well as in our SEC filing. With that, I'll turn the call over to Abigail.

Thank you, Rosy. Good afternoon, everyone, and thank you for joining us today. 2022 was the best year ever for Dell AQS. Market conditions were strong for refining and midstream, and we were able to capture opportunities along the year. Fully adjusted EBITDA was $1.2 billion. During the fourth quarter, total results were strong. Adjusted EBITDA was $221 million, despite unplanned downtime, mainly at the big spring refinery. So, we give more color around operation and the action we are taking to ensure safe and reliable operation. As I said in the past, shareholder returns is a key priority for us. During the year, we returned $236 million to shareholders, with $172 million in the second half of 2022. close to 10% of decay market cap. We reinstate the regular dividend this year, and we are pleased to announce an additional 5% increase in the quarterly dividend to 22 cents per share. Looking forward, we are very excited about our future. On the corporate structure, we are actively evaluating strategic alternatives for logistics and retail to achieve the sum of the parts objective. On the operations side, we launched the zero-based budget to improve our competitive position on cost structure. We are proud of the Tyler Refinery team. The team finished the turnaround on time, on budget, and we are on the process of starting the plant. This marked an important milestone for DELEC's turnaround history. With that, we do not have any significant planned downtime schedule until late 2024. So we are well positioned to capture market opportunities during that time. And now, I will hand it over to Todd to speak about operation.

Thanks, Abigail. Fourth quarter crude throughput across the system was approximately 258,000 barrels per day. The reduced rate was primarily driven by unplanned downtime at the Big Spring Refinery during the fourth quarter. Unplanned incidents make us regroup and reassess. We take steps to improve when and where we see opportunities and focus on the areas of the business that we can control. This is a priority for us, not only for the well-being of our employees, contractors, and communities in which we operate, but because we know that a safe and reliable operation leads to financial stability and protects the environment. A good example is our Cross Springs Refinery where our employees and contractors recently achieved a safety milestone of over 5 million man hours worked without a lost time injury. As Abigail mentioned, we have just finished a significant turnaround at our Tyler Refinery. The Refinery successfully completed the turnaround with zero process and safety incidents on time and on budget in difficult weather. This is a fantastic achievement for DELIC, and I would like to thank our employees for their hard work and our contractors for their partnership. Our logistics segment ran extremely well this quarter. Our record earnings reflect this, and a big driver was the successful integration of the three Bayer Delaware assets. While DKL sees benefits from its base business, we see continued growth opportunities in the Permian and Delaware footprints. Dellick Logistics is well positioned to continue its strong track record of growth and to be a long-term, sustainable midstream player. With that, I will turn the call over to Ruben to go through the quarterly results.

Thank you, Jordan. For the fourth quarter of 2022, Dellick U.S. recognized adjusted net income of $61 million, or $0.88 per share. Net loss for the period was $119 million, or $1.73 loss per share. During the quarter, we also returned $104 million to shareholders in the form of share repurchases and dividends. On slide four, we highlight that we had adjustments this quarter of $243 million. The largest impact was relating to SIFO inventory impacts, which we began adjusting for this quarter. We believe presenting this adjustment better align our EBITDA results with our peers. Adjusted EBITDA was $221 million after factoring in these adjustments. On slide five, we provide a waterfall of our adjusted EBITDA by segment from the fourth quarter of 2021 to the fourth quarter of 2022. The significant improvement period of the period was primarily by higher results in refinement. Compared to the fourth quarter of 2021, the Gulf Coast market cracks were 76% higher in 2022, which primarily drove the large gains. On slide six, we present the cash flow waterfall. We drew $313 million in cash during the quarter, largely driven by two events that occurred late in the quarter. First, we had $180 million unfavorable timing effect associated with the closing of the transition of an inventory intermediation agreement to CitiPAC. This full amount was resulted in a favorable cash flow in the first quarter of 2020. The second item was an unfavorable working capital cash flow impact associated with down time at the big spring refinery. 60 million of this amount was a cash timing event and resulted in a favorable cash flow in the first quarter of 2014. On slide seven, capital expenditure for 2022 were 343 million on a consolidated basis. For 2023, we have capital program of 350 million. The title refinery turnaround is the single largest capital expense and makes up a large portion of the 80% of CapEx dedicated toward maintaining and sustaining the integrity of our assets. The remaining 20% is dedicated to growth projects primarily in logistics. The last slide covers outlook items for the first quarter of 2020. Before we move to Q&A, I wanted to give an update on our cost reduction and process improvement effort. We're executing changes in the organization and expect about 30 to 40 million of P&L improvements in 2023, and an additional 50 to 60 million in 2024. Annually, we expect the run rate to be approximately 90 to 100 million. These improvements may be lower cost or improve margins.

I will now open the line for questions.

Ladies and gentlemen, at this time, we'll begin the question and answer session. If you would like to join the question queue, please press star and then 1 using a touch-tone telephone. To withdraw your questions, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the numbers to ensure the best sound quality. Once again, that is star and then 1 to join the question queue.

We'll pause momentarily to assemble the roster. And our first question today comes from John Royal from JP Morgan.

Please go ahead with your question.

Hi, guys. Good afternoon. Thanks for taking my question. So maybe we can just start with an update on just a little more detail on how you're thinking about the sum of the parts unlock. How do you kind of thread the needle between needing steady streams of cash flows to pair with the refining business, but potentially needing to separate out some portion of logistics and or retail in order to realize that valuation uplift.

John Safigal, good afternoon and thank you for joining our call. Our number one consideration obviously is to be a friendly investor company and share. We demonstrate that during the second half of the year with returning just over $170 million of cash. to investor, which is 10% of the market cap. And that's some of the parties' subset of debt. So as we said on the press release, we're evaluating both opportunities in the retail and in the logistics side. Each one of those opportunities look a bit different, or should I say completely different, so we cannot go too much into details. But we're obviously looking how to be able to manage the assets we need and to maintain the EBITDA we need and to maintain the cash flow we need. With that, it's a good opportunity for me to introduce a new colleague, important colleague here on the table, EVP of Corporate Development, Mr. Mark Hobbs.

Maybe you can say a few words. Sure, Abigail. Thanks. And John, that's a good question. We've obviously been very vocal. focusing on some of the parts. Since I joined in October, the company, my focus has been solely on evaluating and looking at options and opportunities across all of our business segments to unlock the value kind of inherent in our businesses. I know Abigail mentioned midstream and retail, but what I would say is as we're thinking about this, one of the things that we want to make sure that we we solve for is doing something that goes without question, that's additive across our businesses and positions our businesses across all the segments for future growth to drive additional value for our shareholders. That's really the sole focus here. You make a good point about cash flow and those types of things, but we really want to position all of our segments for additional growth and Anything that we do will be focused on accretive growth of the business. I'll leave it there. At this point, we don't have anything to announce, but obviously when we do, we'll be very transparent with everybody.

Understood. Thank you. And then maybe I just said switching to capital allocation. Good to see there's a bump to the dividend, but I don't think we saw a quarter ahead guide on the buyback. Should we read into that that you won't be guiding going forward, or should we think that Maybe there may not be one in one queue. How should we read into that?

So we'll elaborate on that just a little bit. So our intent, if my conditions stay where it is, is to be balanced between debt reduction and buyback. Our goal for the remainder of 2023 is to be on the buyback between $75 to $100 billion. We demonstrated in the second half of the year that we could be prudent around that. and we did the buyback that we guide for with a total return of, again, over $170 million. Our intent is to keep doing, to be a friendly investor share, and that's the benchmark that we put in front of ourselves.

Thank you. Our next question comes from Neil Mehta from Goldman Sachs.

Please go ahead with your question.

Yeah, thanks, guys. I appreciate the time. I'd just love some perspective on where you feel you are from a refining operational perspective, and maybe you can go through each of the assets, Tyler, Eldorado, Kratz, and Big Spring, and where do you think there are opportunities to continue to improve capture and drive profitability higher as the last quarter was a tougher one than I think people would have expected a couple months ago.

Yeah, hey Neil, it's Todd. Thanks for the question. Look, you know, we're on a journey here in terms of getting to the place that we ultimately want to be. We know, as I said in my prepared remarks, that the key to success is being safe, reliable, and environmentally responsible in operating our assets. I think we've done some good things during 22, and I think you and the rest of the folks on the call We're able to see that reflected in the capture rate improvement throughout the year. As we've talked about, we've had a number of different initiatives across the fleet to make improvements. We've seen creep at a number of the facilities. We've done some catalyst reformulation and some of the others. That's definitely bumped up yields, even in Q4, and in particular. So continuing to make that asset a sustainable, long-term, viable asset in our mix. Unfortunately, in BSR, we had a planned, semi-planned outage, and honestly, we didn't do a great job coming out of that. We've taken the lessons learned, we've incorporated that into our operating structure, and we won't make that mistake again. You know, I'm not going to go into specifically around each asset because a lot of that stuff obviously is proprietary. But, you know, it's something we're very, very highly focused on. We're looking at product mix every day. We're looking at crude slate every day. And we're looking at, you know, the Tyler facility, setting the standard for turnarounds. Again, we're just coming out of a major turnaround there, the first turnaround at that facility in over eight years. We've done it safely, no safety events, no process safety events, challenging weather conditions, and the team has done a phenomenal job, and I think that lays a very solid blueprint for what we're going to do on a go-forward basis. And I think the other thing I'd mention is we don't have any real major plan work now until Q4 of 24. So that gives us a really long, nice runway to be able to capture the strong macro environment that we see out there.

And thank you. That's a great perspective. And how much of the challenge around captures has been more operations-driven, as you talked about, versus market conditions? Because we think about the period where Delict refining profitability was outsized from 2011 to 2018, a lot of it was about the Midland differential, which is now inverted. And so I think the investment community is trying to figure out what the mid-cycle refining environment looks like in an environment where the crude markets are less favorable. So I would love your perspective on the go-forward crude markets and how that environment sets up for your kit. Thank you.

Yeah, no, thanks again, Neil. I'll take kind of the first half of the question, then I'll let Abigail weigh in on market views. Look, you know, I think we've demonstrated over the last year where Midland traded at a premium relative to TI, the earnings power of the company, right? So I think that that's pretty well established at this point. Again, we've obviously done things throughout the system to improve yields by a catalyst reformulation. We've done some things throughout the system looking at product mix changes that give us better netbacks, and we'll obviously continue to do that. But again, I think given the synergies between our logistics system, the strength in the Permian Basin just from a demand perspective, and how well, albeit outside of Q4, we ran during the year, you know, we're in a good place as we come out of the Tyler turnaround. I'll let Abigail, you know, comment on what our views are on the Midland differential on a go-forward basis. Yeah, so, hey, Neil, how are you?

Good, Abigail. Thank you.

Yeah, so, the Midland Basin is obviously the one prolific basin in the world, not just in the U.S., and we have invested and demonstrated a lot of commitment to that, and I think for the long term that investment was able to prove itself and will prove itself in the future. Today, Midland started the year with around 5.7 million barrels a day of production, right? And we see a nice increase in our footprint of production, and we forecast that that's going to go all the way to 400 to 600 this year. So it's going to put us at 7% close to 90% capacity of the pipe that we have out of the pyramid. Over time, the pyramid basin is going to perform and going to demonstrate the dry differential and going to fit to our configuration. We are obviously in two of... Actually, between two to two and a half of our refinery, we have more optionality. So this is something we are always looking on that, how we can improve and flex our crude slate. But over time, I think that 20... Probably the second half of 2023 and the beginning of 2024 will be a pivotal year for . Okay.

Thank you, . Our next question comes from Doug Legat from Bank of America.

Please go ahead with your question.

Hey, good morning, guys. This is for Doug, so thanks for taking the question. My first question is a follow-up to John's question. And I want to understand how you guys view the cash flow and the free cash capacity for DK refining when it's fully burdened for all the corporate costs. If you're able to walk us through those assumptions, I think it would help the street to understand whether the core business can stand by itself or not, and whether separation of retail and or logistics makes sense.

Thank you for the question. It really depends what the outcome is going to be, but we are not going to do any transaction that will put us in a risk for the total cash flow of the company. So let's make it clear. We are not going to make any transaction that will jeopardize the mothership. We're going to do some, any transaction that we're going to perform is going to be a transaction that is well thought out, and we'll think about a different scenario, and we'll take into consideration downturn in the refinery business, which we know is a a volatile business. So we are not going to make just a transaction to check the box. I've said it in the past. We're going to do the right one. Luckily enough, we're grateful to have probably the one, if not the best in the industry to perform those deals. And we are confident we can get one that you can all be proud.

Would you guys potentially look at this as a multi-step process? So in the case where DKL acquires something to get bigger through M&A, would you consider selling some of the refining assets back to DK Corporate?

Yeah, this is Mark Hobbs. Thanks for the question. We would look at things as a multi-step process. But anything we do, as Avabel said, there's a lot of different options on the table for us right now. But anything we do, as I mentioned in my earlier remarks, will be done in such a way that it sets up all the different businesses to continue to succeed, continue to have the ability to operate effectively through the cycles. And so if that involves moving assets, strategic assets between a midstream company back to the refining company, we're going to evaluate all the different options.

Got it. I appreciate it. We'll keep our eyes open for that. For my second question, I think we'd appreciate some details in your cost-cutting plans. For example, how much from each bucket, the buckets being gross margin, OpEx, and corporate? And should we understand the cost cuts as being an EBITDA expansion? Or are there any offsets to revenues?

Thanks.

Yes, yes, good. So I think let's talk about the zero-based budget we perform. Robin, do you want to take it? No, absolutely.

I just missed the last part of the question. The zero-based budget – sorry?

The second part of the question was should we understand the cost cuts to be an EBITDA expansion? So, for example, if you're talking about $100 million of cost cuts, does that translate into $100 million of higher EBITDA? Or are there any offsets from lower revenues because you're getting rid of certain cost centers that might be revenue generating?

No. Actually, as we see the plan right now, even though there could be a one-time restructuring cost, we're going to see the $100 million are supposed to be sustainable. Just want to make it clear that it's on a run rate basis. So we're going to recognize $30 to $40 million this year most likely 50 to 60 next year on a run rate basis around 100 million, which will be a direct contribution to EBITDA.

Perfect. And if I could sneak.

I'm sorry, Kalei, just to make sure. It's not just purely cost in the sense that it's going to come out of the G&A line. It could be in the form of.

I mentioned on the preferred remarks that it's both. margin improvement and cost return.

No, that's right. I just don't know that Kalei, I just want to make sure Kalei picked up on it because, you know, he specifically asked cost. And so, just to be clear, it is not going to just be purely coming out of the G&A line. It could be coming out of the form of increased margin as well.

Got it. I appreciate that. And if I could sneak one very last one in. Can you offer some color on the one-time items that hit cash flow this quarter? and which one of those items will reverse, if they will or not?

Well, on the GNA, we had $17 million of one time, of which $13 million are already part of the restructuring cost that I've mentioned to your previous question. That will allow us to be on track, and our goal for the fourth quarter is for the GNA, corporate GNA, I mean, company GNA, to be in the mid-70s.

I was thinking more about the items that affected cash flow here in the fourth quarter. It seems like there was about $400-some-odd million of what looked like downtime impacts.

Well, 240 of them were a timing issue, and we received the 240 during the – I mean, actually in January. The other $200 million are really the FIFO impact or the inventory impact. So if you compare all that together, it would have put us in a positive number.

Got it. I appreciate it. Thanks, guys.

Thanks, Blake.

And our next question comes from Paul Cheng from Scotiabank. Please go ahead with your question.

Hey, guys. Good afternoon.

Hey, Paul. Hey, Paul.

Can I just maybe go back into the earlier question? I think, will it be possible that you can separate out the 100 million by different major bucket, like how much is on the headcount reduction, saving, how much is from the margin improvement, and where the margin improvement you expect, that kind of separation?

Yeah. Hey, Paul. It's Abigail. How are you? So I would just say ballpark number, 30% to 40% on the GNA, and 50% to 60%, actually 60% to 70% in the OPEX ballpark.

So, GNA is about 30-40% and 60-70% is in the optics or margin improvement. And out of all this, are you reducing your head count? And if you do, by how many?

Well, we are not going to get specific around it. You probably understand there is sensitive discussions. But we want to have the most smart, efficient, and obviously a safe and reliable company. So we're not going to jeopardize safety or reliable on that. We're going to do it the right way and we get advice from best in class. Want to have a great company going forward.

Okay. I have to apologize. I just want to go back into the refinery reliability. And Todd, if you look at where you are, do you think the reliability issues We see not necessarily just to Big Spring but overall. Is it asset-based issue means that you need to spend CapEx or is it process issue or cultural issue or that you're just not having sufficient of the talent or the skill set where that you may need to get some help from outside?

Yeah, Paul, look, I think if you look at everybody in the industry, right, we all struggled during COVID. There were obviously cost cuts, rationalization on staffing across the industry. I think we, like everybody else, are coming out of the back end of that now. I think obviously we've just conducted a major turnaround at Tyler. We've done that successfully on time, on budget, in challenging conditions. So I think, you know, we really have the people in place. It's just really kind of playing catch up to some of the, you know, some of the issues that were caused by COVID in terms of, you know, the poor margin environment. So, you know, you look at what we did throughout the majority of the year, other than the big spring event that we had. And, you know, we ran the system very, very well, all-time record high utilization above nameplate capacity. So I think you should treat this more as a one-off on a go-forward basis as opposed to something that's systemic in the company.

So basically that you believe if there's a reliability issue, it's really just because during the pandemic, you guys may be postponing and deleting some of the maintenance activity as such that now you're paying catch-up on that.

I think everybody in the industry experienced that, Paul. That's not unique to us, and I think I'll leave it at that.

Okay. And I think a final short one, this is probably for Ruben. Can you share what is the RVO on the balance sheet at the end of the year? And also, if there's any meaningful impact on the fourth quarter result due to the market on that liability?

Yeah, Paul, this is Robert Wright, Chief Accounting Officer. As you know, we don't disclose that level of information within our financial statements.

Can you tell us that whether there's any meaningful impact on the fourth quarter P&L due to mark-to-market on that liability?

Yeah, there was no impact beyond market rent price volatility.

Okay, we do. Thank you.

Thank you, Paul. Thank you.

Have a good day.

Once again, if you would like to ask a question, please press star and 1. To withdraw from the question queue, you may press star and 2. Our next question comes from Jason Gableman from Cal, and please go ahead with your question.

Hey, everyone. Good afternoon. Thanks for taking my questions. I wanted to ask the first one on some of the parts on lock that you're going through, and The main question is, I want to understand if the contours of the goals, I should say, are the same, which is really to deconsolidate DKL from DK. I know on the last earnings call, management had suggested that was a driving force of why you want to do this, some of the parts valuation unlock. Is that still the case? And additionally, On the prior call, there wasn't any mention of the retail footprint being part of the potential options that you're exploring. So did something change between that time and now where now retail is in play? Thanks.

Thank you, Jason. So our end goal is to be a good share and a good company for investors. And as I said in the past, there is more than one way to go about it. Obviously, we said in the previous call that we believe that with some actions around TKL, we can get there, and we still believe that that's the case. We did put in the press release a comment about retail, and our belief in retail is either you can go big all the way, or you are almost not relevant. So obviously, we are always thinking ourselves what is the best asset base we should hold and how to bring the best return to shareholders. So you need to be very happy that everything is on the table. And we are hope and we are certain that you will be very proud and happy with the deal that we're going to end up showing you.

Okay. And then my follow-up, there's two quick ones. I'll ask them together. On the cost cuts, the 60% to 70% OPEX reduction, is any of that related to energy costs, or is that all underlying? And then separately, last quarter you guided to, I think, $100 million to $150 million in debt reduction. It doesn't appear like that materialized this quarter. Can you discuss why that was and where you see gross debt levels going over the course of the year? Thanks.

Yeah, sure. So regarding the energy, if there is an energy component to that, so it's the consumption, not the price. So we are not going to tell you that we're going to reduce the cost by $100 billion and bet on the natural gas goes down. So that's not the drill. So that's what the market gives us, and that's what we can do ourselves. So that's to answer the first. So we are trying to be as steward as we possibly can with the information we provide straight, And if there is an energy component around it, it's about the consumption and not about the natural gas price. So let's put that aside. Ruben has a lot of, speaking of energy, Ruben has a lot of energy around the debt reduction and probably wants to give more color around it.

Right. So actually until the end of November, we were on track to execute both the debt reduction of $100 million and the buybacks of $100 million. As a result of the unplanned events and the timing events that I've mentioned, it kind of disrupted our plan. We did end up doing the buybacks, but we had to push the debt reduction. We will go back, and Abigail mentioned it before, to focus on debt reduction and buyback as we go forward.

Okay. Thanks.

Our next question comes from Roger Reed from Wells Fargo. Please go ahead with your question.

Yeah, good afternoon. I'm going to beat the dead horse here of restructuring, but I'm going to ask the question with a little more put into it. So I was curious, as you're looking at the overall process here and opening up value, how you see some other things such as, you know, the biofuels business and, you know, some of the equipment, let's call it assets like Wink to Webster that are still inside of DK and that were originally planned to be dropped down to DKL. Is that a complicating factor or an enhancement when you think about, you know, improving the overall value of the two entities?

Oh, Mark can start and I can finish. Yeah, sure. Sure, Roger. I appreciate the questions. Mark Hobbs here, EVP Corporate Development. As we said earlier in the call, we're looking at all the options on the table. I am specifically across all of our business segments and looking at ways to unlock the value that's inherent in those businesses as well as to set all of our business lines up to be successful going forward. When you think about other areas for us to consider, whether that's on the biodiversity of our business, you know, what we're evaluating as well around our business, just in general from a corporate development standpoint, is looking for opportunities where we can, you know, leverage our existing, you know, kind of assets, you know, appropriately where we have a competitive advantage from a location, from a configuration, you know, sort of et cetera to seek opportunities, you know, whether it's around decarbonization or, low-carbon fuels in the future. And so that's something that we're constantly evaluating and looking at organic opportunities around that. You know, as we think about the midstream in particular and think about, you know, kind of Wake to Webster and kind of how that fits in the overall scheme of things, I mean, that's obviously, you know, not a captive kind of Delic U.S. refining-related asset. And so it's more of a traditional asset. midstream kind of third-party asset. And so when we think about where assets should be longer term and where the best value proposition is for those assets, that's something that we're obviously thinking about as well.

Yeah, just to add on that. So every deal that we are looking, obviously, Roger, we are looking to make it accretive to the cost of capital that we have. We are not trying to make a deal that biodiesel The market suggested a 12% return or something like that. It's off the table. So every deal that we are, if we're exploring, it should be accretive to our shareholders. So that's the main criteria.

Appreciate that. We've kind of thought of Wink to Webster as generating roughly $50 million a year in EBITDA Don't know if you're willing to comment on that, but is that a reasonable range at this point?

Yeah. Hey, Roger. It's Todd. Thanks for the question. Look, as we've said in the past, you know, we don't speak for the consortium. Therefore, that type of information is not something we can be at liberty to disclose. I think suffice to say that Wink the Webster is running at planned rates. uh we're obviously a part of that we get the benefit of distributions coming off of that um but uh yeah i think we'll leave it there okay understood thank you thanks roger and our next question comes from matthew blair from tudor pickering holt please go ahead with your question hey uh good afternoon hopefully you can hear me okay um first question is

Do you have an update on the potential RD project in terms of timing, and if there's been any sort of update on the EBITDA contribution and whether DELLIC would be likely to invest in that project?

Yeah, hey, Matthew. It's Todd. Look, again, kind of much like my answer to Roger, we're not yet invested in the project. As you're aware, we've got an option, a little over $13 million option for a 33% interest in the actual physical plant. As we said in previous earnings calls, the companies filed some SEC documentation that would lead us to believe that it's probably not online until the second half of this year. I think it's safe to say that as Abigail laid out a minute ago, we will evaluate the benefit of us exercising our option vis-a-vis our capital structure when the time is appropriate. And we'll obviously make sure that you guys are well informed when we make that decision.

Sounds good. And then the corporate segment at negative 60 million EBITDA this quarter, was that pushed up by like year-end comp? And if so, what's a good run rate for corporate going forward?

Yeah, a large percentage of that, or a large amount of that, is the one-time cost that Ruben had mentioned earlier in his G&A response. We had about 13 million of restructuring charges that hit through that segment, and then there was other one-time costs as well.

Okay, the one-time costs are still in the adjusted EBITDA figure?

No, that's been cleared out. So the $60 million has been adjusted even on number, but what we're really talking about is that at year end, we have the annual incentive plan, and so that's really the cost that you're seeing.

That's why it's a little bit elevated in the fourth quarter.

Okay, so maybe something like – oh, sorry, go ahead.

It's just the accrual that happens in the fourth quarter, so that's why –

We did the AAP in the second and the fourth quarter.

Yes.

We did not do it every quarter.

Right, exactly.

We're changing that going forward, but that's the way we did it in the past.

Okay, and so maybe like negative 40 to negative 50 million a quarter would be reasonable going forward?

Yeah, so I would say, yeah, probably closer to the, yeah, 40 to 50 is probably right. Yeah, because the way I did it in my head is that once you kind of, the variance between the third quarter and the fourth quarter is largely attributable to that.

And obviously, the IDP looks a bit higher than what we anticipate going forward.

So I would guess like $30 to $40 million.

So that's also a number that will come back. Got it. Thank you very much.

And ladies and gentlemen, in showing no additional questions, I'd like to turn the floor back over to the management team for any closing remarks.

So I want to thank the management team around the table, to the investor, to the sell side, buy side community. Thank you for believing in us and being with us with our strategy. Thank you for the board of directors. with the company, and first and foremost to our employees that are running and operating the assets day and night, rainy and sunny. So thank you, everyone, and we'll meet again in the next quarter.

If anyone has any questions, please feel free to reach out. Thank you. Bye-bye.

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.