Good day everyone. Welcome to the Fourth Quarter 2022 Delek US 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 Rosy Zuklic, Vice President, Investor Relations. Rosy, you may begin.

Good afternoon. And welcome to the Delek US fourth quarter earnings conference call. Participants on today's call will include Avigal Soreq, President and CEO; Todd O'Malley, EVP and Chief Operating Officer; Reuven 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 Delek US website. Slide 2 contains our Safe Harbor statement. We'll be making forward-looking statements during today's call an actual results may differ materially from today's common. Factors that could cause actual results to differ are included here, as well as in our SEC filings. With that, I'll turn the call over to Avigal.

Thank you, Rosy. Good afternoon, everyone. And thank you for joining us today. 2022 was the best deal ever for Delek US. Market condition was strong for refining and midstream, and we were able to capture opportunities along this. Full year 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 refineries. Third we do more color and 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 we returned $236 million to shareholders with $172 million in the second half of 2022, close to 10% of DK market capital. Within state the regular dividend this year, and we are pleased to announce an additional 5% increase in the quarterly dividend to $0.22 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 objectives. On the operation side, we launched the zero-based budget to improve our competitive position on cost structure. We are proud of the Delek refinery team. The team finished the turnaround on time on budget, and we are on the process of starting the plant. This mark an important milestone for Delek's turnaround story. We said, we do not have any significant planned downtime scheduled 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, Avigal. 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 wellbeing 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 Krotz 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 Avigal mentioned, we have just finished a significant turnaround at our Tyler refinery. 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 Delek 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 the big driver was the successful integration of the three bear Delaware assets. While DKL sees benefits from its base business, we see continued growth opportunities in the Permian and Delaware footprints. Delek 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 Reuven to go through the quarterly results.

Thank you, Todd. So with the fourth quarter of 2022, Delek US recognize they 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 only reached also returned $104 million to shareholders in the form of share purchases pending. And on Slide 4, we highlight that we have adjustments this quarter of $243 million. The largest impact was relating to FIFO inventory impacts, which is again 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 5, we provide a waterfall of our adjusted EBITDA by segments from the fourth quarter 2021 to the fourth quarter of 2022. This is the significant improvement period over period was primarily by higher results in refining. Compared to the fourth quarter of 2021, the Gold Coast market cracks were 76% higher in 2014, with primarily drove the lodgings. On Slide 6 we present the cash flow waterfall. We withdrew $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 effects associated with the closing of the transition of an inventory intermediation agreement Citi. This full amount was resulted in a favorable cash flow in the first quarter. The second item was an unfavorable working capital cash flows impact associated with unplanned downtime 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 2022. On Slide 7, capital expenditure for 2022 were $343 million on a consolidated basis. But during 2023 we have capital program of $350 million. The time of refinery turnaround is the single largest capital expense and makes up a large portion of the 80% of CapEx dedicated towards maintaining and sustaining the integrity of our assets. The remaining 20% is dedicated for both projects primarily in the logistics. The last slide covers outlook items for the first quarter of 2023. Before we move to Q&A, I wanted to give an update on our cost reduction and process improvement efforts. We're executing changes in the organization and expect about $30 million to $40 million of P&L improvements in 2023 and an additional $50 million to $60 million in 2023. Annually, we expect the run rate to be approximately $90 million to $100 million. These improvements may be lower cost or improved markets. I will now open the lines of questions.

Ladies and gentlemen, at this time we'll begin the question-and-answer session. [Operator Instructions] And our first question today comes from John Royall from JPMorgan. 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 some of the parts on lock. How do you kind of thread the needle between meeting 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 output?

John, Avigal. Good afternoon and thank you for joining our call. Our number one consideration obviously, is a to be a friendly investable company in shale. We demonstrated during the second half of the year with returning just over $170 million of cash to invest, of which is 10% of the market cap. And that's sum [ph] of the policies a subset of debt. So as we said, on the press release, we're evaluating both opportunities in retail. And in the logistics side, each one of those opportunity look a bit different, or should they say completely different. So we cannot go too much into details, but we 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. We said that it is a good opportunity for me to introduce the new colleague, important colleague here on the table, EVP of Corporate Development, Mr. Mark Hobbs, maybe you can say a few words?

Sure Avigal. Thanks. And John that's a good question. We've obviously been very vocal about focusing on some of the parts. And 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 you have Avigal mentioned midstream and retail but look what I would say is we're thinking about this, one of the things that we want to make sure that we that we solve for as doing something that's 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. So you make a good point about cashflow 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 for 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.

Then understood, thank you. And then maybe interested -- 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 1Q? How should we read into that?

So we will elaborate on that just a little bit. So our intent is part condition 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 billion to $100 billion. We demonstrated in the second half of the year that we could be prudent around that. And we did the do a buyback that we guide for with a total return of again, over $170 million. Our intent is to keep doing to be friendly invest to 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.

Yes, thanks, guys. Appreciate the time. Well, I 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, El Dorado, Krotz 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, 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 and 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, were 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 Krotz in particular. So making that continuing to make that asset a sustainable and 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. So, I'm not going to go into specifically around each asset, because a lot of that stuff obviously is proprietary. But it's something we're very, very highly focused on. We're looking at product mix every day. We're looking at fruit slate every day. And we're looking at, the Tyler facility, setting the standard for turnarounds. Again, we're just coming out of a major turnaround there. And 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 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 mentioned 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 great perspective. And how much of the challenge around captures has been more operations-driven, as you talked about versus market conditions. Because, as we think about the period where Delek's refining profitability was outsized from 2011 to 2018. A lot of it was about the middle and differential, which is now inverted. And so I think the investment community is trying to figure out what the midcycle or finding environment looks like in an environment where the crude markets are less favorable. So we'd 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 Avigal weigh in on market views. Look, I think we've demonstrated over the last year where Midland traded at a premium relative to TI, the earnings power of the company. So I think 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 will 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 be outside of Q4 we ran during the year, we're in a good place as we come out of the Tyler turned around. I'll let Avial comment on what our views are on the Midland differential on a go forward basis.

So, Hey, Neil, how are you?

Good, Avigal. Thank you.

So the Midland basin is obviously the one the 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 the investment was able to prove itself and will be prove itself in the future. Today, mainland is around at the start of the year was around 5.7 million barrels a day of production rise, 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 the close to 90% capacity of the pipe that way about the permit. Over time, in the Permian Basin a going to respond and going to demonstrate the dry differential and going to fit to our configuration. We obviously in to have actually between 2 to 2.5 of our refinery we have more optionality. So this is something we're always looking on that how we can improve in the flex of goods slide. But all the time, I think that the -- already the second half of 2023 and the beginning of 2024 will it be pivotal year for Permian basin?

Okay, thank you, Avigal.

Our next question comes from Doug Leggate from Bank of America. Please go ahead with your question.

Hey, good morning, guys. This is Kalei on 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 a separation of retail and/or logistics makes sense?

Thanks for the question. So it really depends what's the outcome 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 going to be a transaction is well thought out. And we'll think about a different scenario. And we'll take into consideration downtown to the refinery business, which we know it's a volatile business. So we're not going to make just transaction to check the box. I've said that in the past, we're going to the right one. Luckily enough, we're grateful to have the probably the one if not the best in the industry to perform those deals, and we are confident we can get one that you could all be proud.

Would you guys potentially look at this as a multistep process? So in the case for DK, they acquire something to get bigger through M&A. Would you consider selling some of the refining out that back to DK Corporate?

Yeah, this is Mark Hobbs. Thanks for the question. We would look at things as a multistep process. But anything we do is Avigal 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 that involves moving assets and strategic assets between, our midstream company back to the refining company. And 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, optics and corporate? And should we understand the cost cuts as being an EBITDA expansion or are there any offsets to revenues?

So I think, let's talk about the OpEx budget, 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 onetime 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 million to $40 million this year, most likely 50 to 60, next year. And on the run-rate bases around $100 million, which will be a direct contribution to EBITDA.

Perfect, and if I can just sneak.

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 referred remarks that is both margin improvement and cost reduction.

Yeah, that's right. I just don't know that that. Kalei I just want to make sure they picked up on it, because you specifically asked costs. 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. If I could sneak one very last one in. Can you offer some color on the onetime items that hit cashflow this quarter? And which one of those items will reverse if they will or not?

Well, on the G&A, we had $17 million of onetime, 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 G&A corporate, I mean, company G&A 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 million some odd what looks like [multiple speakers]?

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, that would have put us in a positive number.

Got it. I appreciate it. Thanks, guys.

Thanks, Kalei.

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

Hey, guys, good afternoon. 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 on the margin improvement? And where the margin improvement you expect that kind of separation?

Yeah. Hey, Paul, it's Avigal, how are you? So I would just a ballpark number 30% to 40% of the G&A and 50% to 60% actually 70% in the OpEx ballpark?

So G&A is about 30% 40% and 60% 70% is in the OpEx or margin improvement? And how all these that, how do you reducing your headcount, and if you do by how many?

Well we are not going to get specific around it. You probably understand that if they're 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 on reliable on that. We're going to do it the right way. And we get advice from best-in-class once we have a great company going forward.

I have to apologize. This one wants to go back into the refining reliability. And thought if you look at where you are, do you think the reliability issues we see not necessarily is not just to Big Spring, but overall. Is it asset-based issue, means that you need to spend CapEx or just the process issue or cultural issue or that you're just not having sufficient of the timing 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, we all struggled during COVID. There obviously cost cuts, rationalization on staffing across the industry, like 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 and challenging conditions. So I think we really have the people in place, it's just really kind of playing catch up to some of the -- some of the issues that were caused by COVID in terms of the poor margin environment. So, you look at what we did throughout the majority of the year, other than the Big Spring event that we had. And 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, yes. When it's just because during the pandemic, you guys may be postponing and deleting some of the maintenance activity as such that now just playing catch up on that.

I think everybody's done industry experience. That's not unique to us. And I think I'll leave it at that.

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

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 what does that, any meaningful impact on the fourth quarter P&L due to mark-to-market liability?

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

Okay, we do. Thank you.

Thank you, Paul. You bet.

[Operator Instructions] Our next question comes from Jason Gabelman with Cowen. Please go ahead with your question.

Hey, everyone. Good afternoon. Thanks for taking my questions. I wanted to ask the first one on the some of the parts unlock that you're going through? And the main question is, I want to understand if the contours of the kind of or the goals I should say are the same, which is really to deconsolidate DKL from DK. I know on the last earnings call, management suggested that was a driving force of why we 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 we're now retail is in is in play? Thanks.

And thank you, Jason. So our end goal is to be a good share, and a good company for investor. 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 DKL, 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 go -- either you can go big all the way, all you're almost not relevant. So obviously, we're 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 all hope and we are certain that you will be very proud and happy with the deal that we are going to end up showing you.

Okay. And then my follow up. There's two quick ones, I'll ask them together. On 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 got it to think $100 million to $150 million in debt reduction. 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, so. So regarding the energy, if it's -- if there is an energy component to that, so it's the consumption of the price. So we are not going to tell you that we're going to reduce the cost by $1 billion and bet on the natural gas goes down. So that's not real. So that's not, that's what the market gave us. And that's what we can do ourselves. So that's to answer the first. So we are trying to be as safe as you are 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. Reuven has a lot of -- and speaking of energy and Reuven has a lot of energy around the debt reduction and probably wants to give their more around it.

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 have to push the debt reduction. We will go back and I think I mentioned it before, to focus on debt reduction and buyback as we go forward.

Okay, thanks.

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

Yeah, good afternoon. I'm going to beat the dead horse here 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 the biofuels business and some of the equipment let's call it assets like Wink to Webster that are still inside of DK that were originally planned to be dropped down to DKL. Is that a complicating factor or an enhancement, when you think about improving the overall value of the two entities?

Mark can start and then I can finish.

Yeah, sure. Sure. Roger, really appreciate the questions. Mark Hobbs here, EVP Corporate Development. As we said earlier in the call, I mean, 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, kind of going forward. And so when you when you think about other areas for us to consider whether that's on the biodiesel plants, or whether that's decarbonisation of our business. What we were evaluating as well around our business, just in general, from a corporate development standpoint, is looking for opportunities where we can leverage our existing kind of assets appropriately, where we have a competitive advantage from a location from configuration, and sort of et cetera to seek opportunities, whether it's around decarbonisation or a low carbon fuels in the future. And so that's something that we're constantly evaluating, and looking at organic opportunities around that. As we think about the midstream in particular, and think about kind of Wink to Webster and kind of how that fits in the overall scheme of things. I mean, that's obviously not a captive kind of Delek US refining related asset. And so it's more of a traditional 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.

Just to add to that. So every deal that we're looking obviously, we're looking to make it competitive to the cost of capital that we have, we are not trying to make a deal in the biodiesel back into just the 12% return or something like that. That's something which is off the table. So every deal that we are, if we're exploring should be accretive to our shareholders. So that's the main criteria.

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

Yeah, Roger. It's Todd. Thanks for the question. Look, as we've said in the past, we don't speak for the consortium. And therefore, that type of information is not something we can be at liberty, disclose. I think suffice to say that Wink to Webster running at planned rates. We're obviously part of that we get the benefit of distributions coming off of that. But 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, good afternoon. Hopefully you can hear me, okay. First question is, do you have an update on the potential R&D project in terms of timing, and there's been any sort of update on the EBITDA contribution, and whether Delek would be likely to invest in that project?

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, 13 little over $13 million option for 33% interest in the actual physical plant. As we said in previous earnings calls, the company's filed some SEC documentation that will 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 Avigal 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 in the corporate segment at negative $60 million EBITDA this quarter. Was that pushed up by like year-end comp? And if so, what's the good run-rate for corporate going forward?

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

Okay. The onetime costs are still in the adjusted EBITDA figure?

Yeah, that's been clear. The $60 million has been adjusted EBITDA number. But what we're really talking about is that they're 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 been elevated in the quarter.

Okay, maybe it's something like-- sorry, go ahead.

It's just the accrual that happened in the fourth quarter. So that's why the fourth quarter a little bit higher. So that kind of accounts for [Indiscernible] versus the third quarter of last year.

We did the deal in the second and the fourth quarter. We did not do it every quarter. We're changing that going forward, but that's the way we did it in the past.

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

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

That is bit higher than what they anticipate going forward. So I would guess, like $30 million to $40 million. So that's also a number that we come back.

Yeah. Thank you very much.

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 the big business with our strategy. Thank you for the board of director to the company and the first and foremost to our employees that are running and operating assets day and night, rainy and sunny. Thank you, everyone. And we will meet again in the next quarter.

If you have 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.