Delek US Holdings Inc (DK) 2023 Q1 法說會逐字稿

Good morning and welcome to the Delek U.S. Holdings 2023 First Quarter Conference Call. (Operator Instructions) And please also note that this event is being recorded today.

早上好，歡迎來到 Delek U.S. Holdings 2023 第一季度電話會議。 （操作員說明）另請注意，今天正在記錄此事件。

I would now like to turn the conference over to Rosy Zuklic, Vice President of Investor Relations. Please go ahead.

我現在想將會議轉交給投資者關係副總裁 Rosy Zuklic。請繼續。

Good morning, and welcome to the Delek US First Quarter Earnings Conference Call. Participants on today's call will include Avigal Soreq, President and CEO; Joseph Israel, EVP, Operations; Reuven Spiegel, EVP and Chief Financial Officer; Mark Hobbs, EVP, Corporate Development.

早上好，歡迎來到 Delek 美國第一季度收益電話會議。今天電話會議的參與者包括總裁兼首席執行官 Avigal Soreq； Joseph Israel，執行副總裁，運營； Reuven Spiegel，執行副總裁兼首席財務官；馬克霍布斯，執行副總裁，企業發展。

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 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 filings.

可以在 Delek US 網站的投資者關係部分找到今天的演示材料。幻燈片 2 包含我們的安全港聲明。我們將在今天的電話會議上發表前瞻性聲明，實際結果可能與今天的評論存在重大差異。可能導致實際結果不同的因素包括在此處以及我們向美國證券交易委員會提交的文件中。

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

有了這個，我會把電話轉給 Avigal。

Good morning and thank you for joining us today. We reported a strong first quarter. Adjusted EBITDA was $285 million as a first quarter record for Delek US. We generated $395 million cash from operations. In addition, we reduced consolidated debt by $281 million. Our team executed well in the quarter. We generated significant earnings in the refining segment. This was achieved despite the Tyler Refinery major plant turnaround during the quarter. With this turnaround behind us, we are well positioned to capture market opportunities as they present themselves. We do not have a major turnaround in our system scheduled until late Q4 of 2024.

早上好，感謝您今天加入我們。我們報告了強勁的第一季度。調整後的 EBITDA 為 2.85 億美元，創下了 Delek US 第一季度的記錄。我們從運營中獲得了 3.95 億美元的現金。此外，我們還減少了 2.81 億美元的合併債務。我們的團隊在本季度表現出色。我們在煉油部門產生了可觀的收益。儘管本季度泰勒煉油廠的主要工廠發生了轉機，但仍實現了這一目標。隨著我們的這種轉變，我們有能力抓住市場機會。我們計劃在 2024 年第四季度末之前對系統進行重大改造。

Our logistics segment delivered strong in adjusted EBITDA. This is the results of the investment we have made in our midstream businesses. As an example, compared with last year, we have more than doubled the volume in the Midland Gathering system. We remain focused on our key priorities.

我們的物流部門在調整後的 EBITDA 中表現強勁。這是我們對中游業務進行投資的結果。例如，與去年相比，我們在 Midland Gathering 系統中的交易量增加了一倍多。我們仍然專注於我們的關鍵優先事項。

I will now take a few minutes to provide an update on each and every one of them. First, returning value to shareholders and optimizing our balance sheet. During the first quarter, we used excess cash to do what we committed to do. At the Delek U.S. Holding, we paid down $327 million of debt. Given the strong performance, we started buying back our shares in the second quarter. Today, we have -- up to today, we have repurchased $40 million of DK shares.

我現在將花幾分鐘時間來提供每一個的更新。第一，回報股東價值，優化資產負債表。在第一季度，我們使用多餘的現金來完成我們承諾要做的事情。在 Delek U.S. Holding，我們償還了 3.27 億美元的債務。鑑於強勁的表現，我們在第二季度開始回購我們的股票。今天，我們已經 - 到今天為止，我們已經回購了 4000 萬美元的 DK 股票。

Also, on May 2, our Board of Directors approved a 4.5% increase to the regular dividend. Second strategic is the vision to create a long-term value to our shareholders. Our team is dedicated. We are working night and day on the sum of the parts initiative. We continue to make progress. We are committed to make a long-term good decision that drive shareholder value. A key focus area since becoming a CEO has been safe and reliable operation. We moved in the right direction during the first quarter. The Tyler turnaround was completed with zero recordable and on time and on budget. As of the end of March, DKL employees and contractors have worked combined 4 million man-hours with zero lost time injuries.

此外，5 月 2 日，我們的董事會批准將定期股息增加 4.5%。第二個戰略是為我們的股東創造長期價值的願景。我們的團隊敬業。我們日以繼夜地致力於零件總和計劃。我們繼續取得進展。我們致力於做出能夠推動股東價值的長期良好決策。自成為首席執行官以來，一個關鍵的關注領域一直是安全可靠的運營。我們在第一季度朝著正確的方向前進。 Tyler 的轉變以零可記錄、按時、按預算完成。截至 3 月底，DKL 員工和承包商共工作了 400 萬工時，損失工時工傷為零。

We are being proactive in our approach to improve safety. We are developing and implementing plans that will drive the improvement toward our long-term goal of a top quartile safety and reliability performance. Our final key priority is improving efficiency in our cost structure. We remain focused on this goal. Rosy will provide additional updates on this effort.

我們正在積極採取措施提高安全性。我們正在製定和實施計劃，以推動我們實現最高四分之一安全性和可靠性績效的長期目標。我們最後的關鍵優先事項是提高成本結構的效率。我們仍然專注於這個目標。 Rosy 將提供有關此工作的更多更新。

To accomplish our key priorities, we must make sure we have the right people in the right roles. Over the past several months, we have made strategic additions to our team that will position ourselves for future success. In March, we welcome Joseph Israel as EVP of Operations. Joseph is a well-rounded industry veteran with over 25 years of energy experience and proving track record of driving safe and reliable operations.

為了完成我們的關鍵優先事項，我們必須確保我們有合適的人擔任合適的角色。在過去的幾個月裡，我們對我們的團隊進行了戰略性的補充，這將為我們未來的成功做好準備。 3 月，我們歡迎 Joseph Israel 擔任運營執行副總裁。 Joseph 是一位全面的行業資深人士，擁有超過 25 年的能源經驗，並在推動安全可靠運營方面擁有良好的記錄。

Please join me in welcoming Joseph to the call today. Patrick Reilly has joined us as EVP and Chief Commercial Officer. He brings wealth of experience from best-in-class businesses. His experience and back-out align well with our vision for future growth. We have also strengthened our team with Tommy Chavez joining us as SVP Refining Operation. Tommy brings over 35 years of refining experience. Our team is strong and well positioned to execute on our strategic plans.

請和我一起歡迎約瑟夫參加今天的電話會議。 Patrick Reilly 已加入我們，擔任執行副總裁兼首席商務官。他帶來了一流企業的豐富經驗。他的經歷和退出與我們對未來增長的願景非常吻合。我們還加強了我們的團隊，Tommy Chavez 加入我們擔任精煉業務高級副總裁。 Tommy 帶來了超過 35 年的精煉經驗。我們的團隊實力強大，能夠很好地執行我們的戰略計劃。

In closing, I would like to thank our entire team of over 3,500 employees. Their hard work and dedication are driving our success. I appreciate their effort and look forward to a strong future together. I would also like to thank our investors and Board of Directors for their continued support.

最後，我要感謝我們超過 3,500 名員工的整個團隊。他們的辛勤工作和奉獻精神正在推動我們取得成功。我感謝他們的努力，並期待共同創造美好的未來。我還要感謝我們的投資者和董事會一直以來的支持。

Now I will turn the call over to Joseph, who will provide additional color on our operations.

現在我將把電話轉給約瑟夫，他將為我們的運營提供額外的色彩。

Thank you, Avigal. I'm thrilled to join the Delek family and I have no doubt our strong talent and competitive position across the system are positioning us well for future success. Our safe and reliable operations in the first quarter allowed us to leverage favorable market conditions and deliver strong results. I will now provide additional details about our operations in a slightly modified format with the objective to provide more visibility regarding our performance and plans going forward.

謝謝你，阿維加爾。我很高興加入 Delek 大家庭，我堅信我們強大的人才和整個系統的競爭地位正在為我們未來的成功做好準備。我們在第一季度安全可靠的運營使我們能夠利用有利的市場條件並取得強勁的業績。我現在將以稍微修改的格式提供有關我們運營的更多詳細信息，目的是提供有關我們的績效和未來計劃的更多可見性。

Starting with our Tyler Refinery. As Avigal mentioned, the team successfully executed a 49-day oil-to-oil major turnaround. Beyond routine maintenance and reliability arm grades, the scope included yield improvement projects, mainly around the FCC and DHT with an estimated $0.40 per barrel of margin capture improvement going forward.

從我們的泰勒煉油廠開始。正如 Avigal 所提到的，該團隊成功地執行了為期 49 天的石油到石油的重大轉變。除了日常維護和可靠性臂等級之外，範圍還包括產量改進項目，主要圍繞 FCC 和 DHT，估計未來每桶利潤捕獲改進 0.40 美元。

Turnaround cost was consistent with our plan at approximately $100 million. Due to the turnaround, total throughput in Tyler in the first quarter was approximately 35,000 barrels per day. Production margin in the quarter was $21.65 per barrel and operating expenses were $8.70 per barrel including approximately $1.25 per barrel of accelerated maintenance due to the turnaround.

周轉成本與我們的計劃一致，約為 1 億美元。由於扭虧為盈，泰勒在第一季度的總吞吐量約為每天 35,000 桶。本季度的生產利潤為每桶 21.65 美元，運營費用為每桶 8.70 美元，其中包括因檢修而導致的每桶加速維護費用約 1.25 美元。

In the second quarter, the estimated total throughput in Tyler is in the 74,000 to 77,000 barrels per day range and OpEx is expected to go back to the normal range of $4.50 to $5 per barrel.

第二季度，估計泰勒的總吞吐量在每天 74,000 至 77,000 桶之間，運營支出預計將回到每桶 4.50 至 5 美元的正常範圍。

In El Dorado, total throughput in the first quarter was approximately 77,000 barrels per day. Our production margin was $13.38 per barrel and operating expenses were $4.47 per barrel. Estimated throughput for the second quarter is in the 78,000 to 81,000 barrels per day range.

在埃爾多拉多，第一季度的總吞吐量約為每天 77,000 桶。我們的生產利潤為每桶 13.38 美元，運營費用為每桶 4.47 美元。第二季度的預計吞吐量在每天 78,000 至 81,000 桶之間。

In Big Spring, total throughput for the quarter was consistent with plan at approximately 73,000 barrels per day. Production margin was $18.33 per barrel and operating expenses of $5.80 per barrel including approximately $0.60 per barrel of maintenance activities. The estimated throughput for the second quarter is approximately 70,000 barrels per day after completing maintenance work in the month of April.

在 Big Spring，該季度的總吞吐量與計劃一致，約為每天 73,000 桶。生產利潤為每桶 18.33 美元，運營費用為每桶 5.80 美元，包括每桶約 0.60 美元的維護活動。在 4 月份完成維護工作後，第二季度的估計吞吐量約為每天 70,000 桶。

In Krotz Spring, total throughput was approximately 84,000 barrels per day. Our production margin was $15.47 per barrel and operating expenses were $5.21 per barrel, including $0.35 per barrel maintenance in our reformer and our key units. Planned throughput in the second quarter is in the 80,000 to 82,000 barrels per day range.

在 Krotz Spring，總吞吐量約為每天 84,000 桶。我們的生產利潤為每桶 15.47 美元，運營費用為每桶 5.21 美元，包括重整器和關鍵裝置的每桶維護費用 0.35 美元。第二季度的計劃吞吐量在每天 80,000 至 82,000 桶之間。

Overall, estimated system throughput in the second quarter is in the 301,000 to 311,000 barrels per day range compared with approximately 269,000 barrels per day in the first quarter. We continue to focus on safety, reliability and environmental compliance as our top priorities, and we expect margin capture and cost performance to follow.

總體而言，第二季度的估計系統吞吐量在每天 301,000 至 311,000 桶之間，而第一季度約為每天 269,000 桶。我們繼續將安全性、可靠性和環境合規性作為我們的首要任務，我們預計利潤率和成本效益將隨之而來。

As far as market conditions, good day to be an inland refinery in the U.S. Gasoline is tight going to the summer and specifically for Delek, crude oil pricing dynamics are favorable and demand for products is strong across our system.

就市場狀況而言，成為美國內陸煉油廠的好日子到了夏季，特別是對於 Delek 來說，汽油供應緊張，原油定價動態有利，我們整個系統對產品的需求強勁。

I will now turn the call over to Rosy for the financial variance.

我現在將把財務差異的電話轉給 Rosy。

Thank you, Joseph.

謝謝你，約瑟夫。

Starting on Slide 4. For the first quarter of 2023, Delek US had net income of $64 million or $0.95 per share. Adjusted net income was $93 million or $1.37 per share and adjusted EBITDA was $285 million. Cash flow from operations was $395 million.

從幻燈片 4 開始。2023 年第一季度，Delek US 的淨收入為 6400 萬美元或每股 0.95 美元。調整後的淨收入為 9300 萬美元或每股 1.37 美元，調整後的 EBITDA 為 2.85 億美元。運營現金流為 3.95 億美元。

On Slide 5, we provide a waterfall of our adjusted EBITDA by segment from the fourth quarter of 2022 to the first quarter of 2023. The significant improvement over last quarter was primarily from higher results in refining. As Avigal and Joseph mentioned, during the quarter, we operated well and we're positioned to capture favorable market conditions. In addition, corporate contributed a $16 million benefit over last quarter, primarily due to lower G&A costs. For your reference, we have provided a year-over-year waterfall slide in the backup.

在幻燈片 5 中，我們提供了從 2022 年第四季度到 2023 年第一季度按部門劃分的調整後 EBITDA 的瀑布圖。與上一季度相比的顯著改善主要來自煉油業務的較高業績。正如 Avigal 和 Joseph 所提到的，在本季度，我們經營良好，我們已經準備好抓住有利的市場條件。此外，企業比上一季度貢獻了 1600 萬美元的收益，這主要是由於較低的 G&A 成本。供您參考，我們在備份中提供了同比瀑布幻燈片。

Moving to Slide 6 to discuss cash flow. We built $24 million in cash during the quarter. The $395 million in operating activities reflects the strong cash from operations. In addition, it includes approximately $180 million of the $240 million of cash associated with the 2 year-end timing events disclosed during the fourth quarter earnings call. Investing activities of $222 million is primarily for capital expenditures, the majority being for the Tyler refinery turnaround. Financing activities include the debt pay-down during the quarter, partially offset by approximately $16 million cash inflow for the year-end timing events.

轉到幻燈片 6 討論現金流。我們在本季度積累了 2400 萬美元的現金。 3.95 億美元的經營活動反映了強勁的經營現金。此外，它還包括與第四季度財報電話會議期間披露的 2 年終時間事件相關的 2.4 億美元現金中的約 1.8 億美元。 2.22 億美元的投資活動主要用於資本支出，其中大部分用於 Tyler 煉油廠的扭虧為盈。融資活動包括本季度的債務償還，部分被年末時間事件的約 1600 萬美元現金流入所抵消。

On Slide 7, we show capital expenditures first quarter compared with our full year estimate. For 2023, capital expense will be heavily weighted to the first half of the year. We still estimate the full year to remain at approximately $350 million.

在幻燈片 7 中，我們顯示了第一季度的資本支出與我們全年估計的比較。對於 2023 年，資本支出將在上半年佔很大比重。我們仍然估計全年仍將保持在約 3.5 億美元。

Net debt is broken out between Delek and Delek Logistics on Slide 8. During the quarter, consolidated net debt improved approximately $303 million and Delek US, excluding Delek Logistics improved $346 million.

幻燈片 8 中 Delek 和 Delek Logistics 之間的淨債務細分。本季度，綜合淨債務增加了約 3.03 億美元，而 Delek US（不包括 Delek Logistics）增加了 3.46 億美元。

The last slide covers outlook items for the second quarter of 2023. In addition to the throughput guidance Joseph provided, we expect operating expenses to be between $195 million and $205 million. G&A to be between $70 million and $80 million, D&A to be between $80 million and $90 million, and we expect net interest expense to be between $70 million and $80 million. For interest expense, we have updated our guidance to include noncash deferred financing costs. Prior to the fourth quarter of 2022, when we refinanced various debt facilities, the impact of deferred financing cost was less significant.

最後一張幻燈片涵蓋了 2023 年第二季度的展望項目。除了約瑟夫提供的吞吐量指導外，我們預計運營費用將在 1.95 億美元至 2.05 億美元之間。 G&A 在 7000 萬到 8000 萬美元之間，D&A 在 8000 萬到 9000 萬美元之間，我們預計淨利息支出在 7000 萬到 8000 萬美元之間。對於利息支出，我們更新了指南以包括非現金遞延融資成本。在 2022 年第四季度之前，當我們為各種債務融資進行再融資時，遞延融資成本的影響並不那麼顯著。

Before we move on to Q&A, a few updates. As Avigal mentioned, we have made progress on our cost reduction and process improvement effort. During the quarter, we completed the first phase of this initiative, we realized $3 million of G&A cost savings, which is $12 million on a run rate basis. The next phase is scheduled to start in the second quarter, and we expect to see G&A improvements in the second half of this year. Part of our assessment on cost has been a deep dive to drive industry standard on G&A and OpEx classification. This quarter, we made an adjustment of approximately $6 million between these costs. This adjustment was retrospective. We have provided 2 years of history in our supplemental slides.

在我們繼續進行問答之前，先進行一些更新。正如 Avigal 提到的，我們在降低成本和改進流程方面取得了進展。在本季度，我們完成了該計劃的第一階段，實現了 300 萬美元的 G&A 成本節省，按運行率計算為 1200 萬美元。下一階段計劃於第二季度開始，我們預計今年下半年 G&A 將有所改善。我們對成本的部分評估是深入研究以推動 G&A 和 OpEx 分類的行業標準。本季度，我們對這些成本進行了大約 600 萬美元的調整。該調整具有追溯力。我們在補充幻燈片中提供了 2 年的歷史。

Finally, during the quarter, we changed the benchmark for Krotz Spring Refinery to better reflect its product mix. This was also a retrospective change. We have provided 2 years of history in our supplemental slides and detailed disclosures in the supplemental tables of the earnings release.

最後，在本季度，我們更改了 Krotz Spring Refinery 的基準，以更好地反映其產品組合。這也是追溯變更。我們在我們的補充幻燈片中提供了 2 年的歷史，並在收益發布的補充表格中提供了詳細披露。

We will now open the line for questions.

我們現在將打開問題熱線。

(Operator Instructions) At this time, we will take our first question, which will come from Neil Mehta with Goldman Sachs.

（操作員說明）此時，我們將提出第一個問題，該問題將來自 Neil Mehta 和 Goldman Sachs。

Congrats on some good progress here this quarter and that's where I want to start off on the refining segment. It looks like even when you adjust for the G&A, it was better captures than expected in our model, in particular, was that crops, but in Tyler as well. And so just curious on anything you could talk about in terms of the refining business, if you're seeing underlying improvements. And now that we're in a little bit of a tougher margin environment than where we were in Q1, do you think that strength in capture can flow through?

祝賀本季度取得了一些良好進展，這就是我想從煉油領域開始的地方。看起來即使您針對 G&A 進行了調整，在我們的模型中捕獲的效果也比預期的要好，尤其是作物，但在 Tyler 中也是如此。因此，如果您看到潛在的改進，那麼就對您在煉油業務方面可以談論的任何事情感到好奇。現在我們處於比第一季度更艱難的利潤率環境中，您認為捕獲的力量可以通過嗎？

Hi, Neil. Good morning, it's Avigal. Thanks for the question and thank you for the support. Yes, we have experienced a good progress with our initiatives. First of all, we had a self-reliable operation always is a key driver and I think that the team we have is extremely focused around that. So that was a focus, the execution of the turnaround was a great success and a focus and few small projects that helps us well. That's a good opportunity for me to welcome Joseph live and allow him to give some more color around it. Please go with that, Joseph.

嗨，尼爾。早上好，我是阿維加爾。感謝提問，感謝支持。是的，我們的舉措取得了良好進展。首先，我們有一個自給自足的運營始終是一個關鍵驅動因素，我認為我們的團隊非常專注於此。所以這是一個重點，轉變的執行取得了巨大的成功，一個重點和一些小項目對我們很有幫助。這對我來說是一個很好的機會來歡迎 Joseph 的直播，並讓他為它增添更多色彩。約瑟夫，請繼續。

Thank you and good morning, Neil. Yes, the system executed well from a safety and reliability standpoint like Avigal mentioned. Throughput capture, OpEx for the 4 refineries were in the planned range with Tyler obviously under turnaround. We sourced our domestic crude oil efficiently with a more favorable Midland differentials and the right market structure. We blended low-cost butane in our gasoline. And then on the distillate side, we all know the jet fuel was a good capture component. This quarter for all refineries, including our sales, HSD and octane price well to support our capture. So good quarter all-in-all and we are looking forward for the next one.

謝謝你，早上好，尼爾。是的，從安全性和可靠性的角度來看，該系統運行良好，就像 Avigal 提到的那樣。 4 家煉油廠的吞吐量和運營支出都在計劃範圍內，而 Tyler 顯然正在扭虧為盈。我們通過更有利的米德蘭差價和正確的市場結構有效地採購了我們的國內原油。我們在汽油中混合了低成本的丁烷。然後在餾出物方面，我們都知道噴氣燃料是一種很好的捕集成分。本季度所有煉油廠，包括我們的銷售、HSD 和辛烷值都很好地支持我們的捕獲。總而言之，這是一個很好的季度，我們期待著下一個季度。

And welcome, Joseph. And that's the follow-up. You talked a lot about the path towards some of the parts realization and there was no update here. So can you talk a little bit about where we stand on the plan and what are the different things that you've rolled in and rolled out.

歡迎，約瑟夫。這就是後續行動。您談到了很多實現某些零件的途徑，但這裡沒有更新。那麼你能談談我們在計劃中的立場以及你推出和推出的不同內容嗎？

Hi, Neil, again, thank you. So listen, I can tell you that the team and Mark is here as well, and you can chime in after I finish, is extremely focused on working on the very extensively we continue to make in our mind great progress, meaningful progress, but we all understand that those type of transactions take time. And more than anything, we want to get it right. We do not want to make something quick, which is not right. I'm very optimistic about that. The progress is being done very, very, very well and we are very satisfied with it. And we'll keep you posted. Then, Mark, do you want to say anything?

嗨，尼爾，再次謝謝你。所以聽著，我可以告訴你，團隊和馬克也在這裡，你可以在我結束後插話，非常專注於非常廣泛的工作，我們繼續在我們的腦海中取得巨大進步，有意義的進步，但我們所有人都明白，這類交易需要時間。最重要的是，我們希望把它做好。我們不想急於求成，這是不對的。我對此非常樂觀。進展非常、非常、非常好，我們對此非常滿意。我們會及時通知您。那麼，馬克，你想說什麼嗎？

No. I think that was well articulated. Neil, we continue to work on it. We see opportunities out there for us that we're evaluating. As I said on our fourth quarter call, the thing that we're focused on is positioning all of our businesses to pursue accretive growth and have financial flexibility. So that continues to be a focus on anything and everything we do.

不，我認為這很清楚。尼爾，我們繼續努力。我們看到了我們正在評估的機會。正如我在第四季度電話會議上所說的那樣，我們關注的重點是將我們所有的業務定位為追求增值增長並具有財務靈活性。因此，這將繼續關注我們所做的任何事情。

Just a quick follow-up on that, Mark. Is it fair to say that the area where you see the best opportunity to unlock value is still around logistics assets? Is that what you believe the market is undervaluing.

馬克，只是對此進行快速跟進。可以說，您認為釋放價值的最佳機會的領域仍然是物流資產嗎？這就是你認為市場低估的東西嗎？

Yes. I think that's a fair statement, Neil. I mean we obviously have a value benchmark sort of a marker, if you will out there, the trades sort of every day. And we feel like that just given how we're structured right now, we're not getting adequate look through value to our midstream business.

是的。我認為這是一個公平的聲明，尼爾。我的意思是我們顯然有一個價值基準類型的標記，如果你願意的話，每天都有交易。我們覺得，鑑於我們現在的結構，我們沒有充分了解我們的中游業務的價值。

And our next question will come from Manav Gupta with UBS.

我們的下一個問題將來自瑞銀集團的 Manav Gupta。

A little bit of a follow-up here. Crops used to be one of your weaker assets. It's clearly one of the stronger assets at this point of time. Help us understand what has changed in the last 1.5 or 2 years to make this a much more competitive asset than what it used to be?

這裡有一點跟進。莊稼曾經是你較弱的資產之一。它顯然是目前最強大的資產之一。幫助我們了解過去 1.5 或 2 年發生了什麼變化，使它成為比過去更具競爭力的資產？

Yes, absolutely. Joseph, do you want to take it?

是的，一點沒錯。約瑟夫，你要拿走它嗎？

Yes. I'll start. Talking about reliability, again, Krotz is a very unique special place. It was just certified as a VPP plant. And I think the story is right there. So 1Q, we have seen a great reliability, which was reflected in our yield. In addition, we have a new catalyst and the reformer that really helps our yields and providing a small gasoline components. Butane blending is very efficient, Krotz Spring, and we make a lot of jet fuel in our crude unit. So when jet is strong and recovering, Krotz Spring is going to do well. So a great team. Favorable market conditions give us good results.

是的。我會開始。再次談到可靠性，Krotz 是一個非常獨特的地方。它剛剛被認證為 VPP 工廠。我認為這個故事就在那裡。所以第一季度，我們看到了很高的可靠性，這反映在我們的收益率上。此外，我們有一種新的催化劑和重整器，它們確實有助於我們提高產量並提供少量汽油成分。丁烷混合非常有效，Krotz Spring，我們在原油裝置中生產大量噴氣燃料。因此，當 jet 強壯並正在恢復時，Krotz Spring 會做得很好。所以一個偉大的團隊。有利的市場條件為我們帶來了良好的業績。

And we cannot undermine the improvement of the alkyl over the last few years. Crops used to have -- to be refinery without alky. Alkyl pricing was good and we see a nice return to our investment we did years ago.

我們不能破壞過去幾年烷基的改進。農作物曾經有——是沒有醇的煉油廠。烷基定價很好，我們看到多年前的投資獲得了不錯的回報。

Makes sense guys. A quick follow-up here. You mentioned a little bit of this, but it looks like you have made some improvements at Tyler at -- during the 1Q turnaround, which is giving you more confidence of a higher capture, Help us understand what was executed? And what gives you confidence that the capture at Tyler will improve and make it more competitive?

有道理的傢伙。在這裡快速跟進。你提到了一點點，但看起來你在 Tyler 做了一些改進 - 在 1Q 周轉期間，這讓你更有信心獲得更高的捕獲率，幫助我們了解執行了什麼？是什麼讓您相信泰勒的捕獲會有所改善並使其更具競爭力？

Thank you, Manav. Like we said in our prepared remarks, beyond just reliability projects and the addressing risk, we have done some upgrades I think the most significant one is a revamp of our vacuum tower, which helps the feed quality to the FCC. So the FCC is performing much better with better conversion, better yields. In addition, we replaced the catalyst in the DHT that gives us a much better liquid recovery and better well. So we think this 1Q story is just a snapshot. We are here for to capture those benefits in the future. And I think personally, $0.40 is probably on the conservative side.

謝謝你，馬納夫。正如我們在準備好的發言中所說，除了可靠性項目和解決風險之外，我們還進行了一些升級，我認為最重要的是改造我們的真空塔，這有助於提高 FCC 的進料質量。因此，FCC 的表現要好得多，轉化率更高，產量更高。此外，我們更換了 DHT 中的催化劑，這使我們的液體回收率和井況都更好。所以我們認為這個第一季度的故事只是一個快照。我們來這裡是為了在未來獲得這些好處。我個人認為，0.40 美元可能偏保守。

Perfect, guys. I'll leave it there, but I do want to say one thing. We are seeing the way you report earnings has improved a lot. There's a lot more consistency and I think the feedback we're getting from shareholders is that this is exactly what they wanted. So all those who are involved in making it a lot more consistent and easier to understand reporting, I would like to congratulate them.

完美，伙計們。我會把它留在那裡，但我確實想說一件事。我們看到您報告收入的方式有了很大改進。一致性更高，我認為我們從股東那裡得到的反饋是，這正是他們想要的。因此，所有參與使報告更加一致和更易於理解的人，我要祝賀他們。

Manav, point taken. Thank you.

馬納夫，點了。謝謝。

Our next question will come from John Royall with JPMorgan.

我們的下一個問題將來自摩根大通的 John Royall。

I would also like to echo the Manav's comments on the reporting. I think it's been much easier to get through on earnings dates. So my first question is on capital allocation and specifically being out of the buyback market in 1Q despite a big quarter from a cash flow perspective. I assume it had to do with the turnaround, but any color on that. And then the $40 million pace for 2Q to date is pretty robust. Is there some catch-up there? Should we think of that as a good pace going forward? And I think $75 million to $100 million was something you had said for the full year? And maybe if you could just comment on that if that's still a good number.

我還想附和 Manav 對報告的評論。我認為通過收益日期要容易得多。所以我的第一個問題是關於資本配置，特別是在第一季度退出回購市場，儘管從現金流的角度來看是一個很大的季度。我認為這與周轉有關，但有任何顏色。然後到目前為止，第二季度 4000 萬美元的步伐非常強勁。那裡有一些追趕嗎？我們是否應該將其視為前進的良好步伐？我認為 7500 萬到 1 億美元是你所說的全年？如果這仍然是一個很好的數字，也許你可以對此發表評論。

Yes. Thank you, John, for the question. Obviously, I will take a bit broader look on our capital allocation. Obviously, we cannot lose sight from the fact that we are increasing dividend for 3 or 4 quarters in a row now. So we see that dividend going through the cycle and we are committed as much as we can to continue that through the cycle, so that's point number one. Point number two, around the buyback, we obviously wanted to make sure that we are clearing any risk from our profile this year or a major -- pretty significant risk with the Tyler turnaround behind us.

是的。約翰，謝謝你提出這個問題。顯然，我會更廣泛地審視我們的資本配置。顯然，我們不能忽視我們現在連續 3 或 4 個季度增加股息這一事實。因此，我們看到股息正在經歷一個週期，我們將盡我們所能在整個週期中繼續這樣做，所以這是第一點。第二點，圍繞回購，我們顯然想確保我們今年正在清除我們的概況中的任何風險，或者一個重大的 - 相當大的風險，因為 Tyler 的轉機在我們身後。

And as you probably can know, we are taking ourselves as a first tier return to shareholder company, and we are there, right. You can see us there on the 19% last 12 months, which is where we want to be. We want to be very competitive and to give a good return to our investors, both on the short term and on the long term. I'm not going to change the guidance we gave to the year on $75 million to $100 million. But I'm going to say that we are actively looking on that and we are using the buyback as a flex. If I can say, it's a flex tool when we have a solid site for margin and operation, we're still going to do it. So that's something we are keep looking at. And obviously, if something change, we'll come back.

正如您可能知道的那樣，我們將自己視為對股東公司的第一層回報，我們就在那裡，對。您可以在過去 12 個月的 19% 中看到我們，這是我們想要達到的目標。我們希望具有很強的競爭力，並在短期和長期內為我們的投資者提供良好的回報。我不會改變我們對今年 7500 萬美元到 1 億美元的指導。但我要說的是，我們正在積極關注這一點，我們正在使用回購作為一種靈活的方式。如果我可以說，當我們有一個可靠的保證金和運營網站時，它是一個靈活的工具，我們仍然會這樣做。所以這是我們一直在關注的事情。顯然，如果有什麼變化，我們會回來的。

Great. And then maybe on the cost reduction program. Maybe just a little more detail on the $12 million captured of the $30 million to $40 million you expect this year? And what are the key sources of what you've captured so far and this year as a portion of the program in general?

偉大的。然後可能是成本削減計劃。也許只是更詳細地說明今年您預期的 3000 萬至 4000 萬美元中的 1200 萬美元？您到目前為止和今年作為該計劃的一部分所捕獲的主要來源是什麼？

Yes, absolutely, John. I will let Reuven, our CFO, to comment on that, if it's fine.

是的，絕對，約翰。如果可以的話，我會讓我們的首席財務官魯文對此發表評論。

Thank you, Avigal. First of all, our guidance that we gave in the fourth quarter for the year was $30 million to $40 million savings and on a run rate of $90 million to $100 million based on Q4/Q1 '24. That number is divided around 65% between OpEx and 35% between G&A. The $3 million that we have materialized in the first quarter are initiatives that we took late in the fourth quarter, early in the first quarter and will impact obviously the run rate of $30 million to $40 million for this year. There are additional -- I mean the program goes throughout the year. We have additional segments that we're going to implement in the second quarter and in the fourth quarter. Some of them are IT related and some of them are not. The initial effort was around G&A org and structure. As we progress in the second and third quarter, it will be more focused on the operation.

謝謝你，阿維加爾。首先，我們在今年第四季度給出的指導是節省 3000 萬至 4000 萬美元，並且根據 24 年第四季度/第一季度的運行率計算為 9000 萬至 1 億美元。這個數字在 OpEx 之間分配了大約 65%，在 G&A 之間分配了 35%。我們在第一季度實現的 300 萬美元是我們在第四季度末、第一季度初採取的舉措，將明顯影響今年 3000 萬至 4000 萬美元的運行率。還有其他-- 我的意思是該計劃貫穿全年。我們將在第二季度和第四季度實施其他細分市場。其中一些與 IT 相關，而另一些則不是。最初的努力是圍繞 G&A 組織和結構展開的。隨著我們在第二和第三季度取得進展，它將更加專注於運營。

Our next question will come from Doug Leggate with Bank of America.

我們的下一個問題將來自美國銀行的 Doug Leggate。

Let me add my welcome to Joe. It's nice to see you. I wonder if I could just hit, first of all, Avigal, the some of the parts question again. To the extent you can, if midstream is the -- is seen as the problem, what are the range of options that you are considering in terms of -- obviously, the balance sheet is one question mark, but how do you see that playing out to the extent you can share at this point of your review?

讓我對喬表示歡迎。見到你很高興。我想知道我是否可以首先擊中 Avigal，一些部分再次出現問題。在某種程度上，如果中游是 - 被視為問題，那麼你正在考慮的選項範圍是什麼 - 顯然，資產負債表是一個問號，但你如何看待這個遊戲您在評論的這一點上可以分享到什麼程度？

Yes. So it's a great question, but I'm not going to give too much color about that. All I'm going to say is that we have a line of sight that is going to be very accretive to both DK and DKL. And I'm sure that you're going to be very happy.

是的。所以這是一個很好的問題，但我不會對此給出太多色彩。我要說的是，我們的視線對 DK 和 DKL 都非常有利。我相信你會很開心。

Okay. And retail, is that part of the discussion as well or not?

好的。零售業，這也是討論的一部分嗎？

So we want to tackle first what moved the needle the most, right? So we have priorities. And the priority is to do what is the most meaningful as first priority. And that's how we work here to make sure that we are being as meaningful as we possibly can with creating value to shareholders.

所以我們想首先解決最讓針頭移動的問題，對吧？所以我們有優先權。最重要的是做最有意義的事情作為第一要務。這就是我們在這里工作的方式，以確保我們在為股東創造價值方面盡可能有意義。

Understood. Just one last one on this topic. Timing, when would you expect to be able to reveal to the market your plan?

明白了。關於這個主題的最後一個。時機，您希望什麼時候能夠向市場透露您的計劃？

So I'm more aggressive than you and I wanted badly -- more badly than you are. So we are on the same side of the equation. But this is not a simple plain vanilla. It requires some work and planning and detail. So we are in the same camp and we want it sooner than later. So...

所以我比你更有進取心，而且我非常想要——比你更想要。所以我們站在等式的同一邊。但這不是簡單的普通香草。它需要一些工作、計劃和細節。所以我們在同一個陣營，我們希望它早日到來。所以...

We will watch with interest. My follow-up is maybe for Reuven, I guess it's a housekeeping question we already tried to walk through with Rosy. But I think it would be good for everyone to hear this. Your cash flow was obviously pretty strong, but you don't break out, at least not in the release the working capital move. So we're trying to understand what the -- I guess the underlying cash flow was in the quarter, and more importantly, how much of the working capital is -- will reverse in the future? In other words, is this a onetime benefit? Or is it something we can look to is more of an underlying improvement. So what the underlying cash flow, I guess, is the question on the nature of the working capital.

我們會感興趣地觀看。我的後續行動可能是針對魯文的，我想這是我們已經嘗試與 Rosy 一起解決的內務管理問題。但我認為這對每個人來說都是有好處的。你的現金流顯然非常強勁，但你沒有爆發，至少在釋放營運資金時沒有。因此，我們正試圖了解 - 我猜本季度的基礎現金流量，更重要的是，營運資金的多少 - 將來會逆轉嗎？換句話說，這是一次性福利嗎？或者我們可以關注的是更多的潛在改進。所以我猜潛在的現金流量是關於營運資金性質的問題。

Right. So thank you for the question. I think the one number to remember is on the fourth quarter call. We mentioned that we had a timing issue with the intermediation agreement with Citi and $180 million are supposed to come in, in January and they did come in. And I think that is the number that probably should be taken out of the reported number because that was the fourth quarter event that reconciled itself in the first quarter. Other than that, what impacted the working capital cash flow was the Tyler turnaround and on the negative side, the capital expenditure, which was higher in the first quarter as expected.

正確的。謝謝你的提問。我認為要記住的一個數字是第四季度的電話會議。我們提到我們與花旗的中介協議存在時間問題，應該在 1 月份收到 1.8 億美元，他們確實收到了。我認為這個數字可能應該從報告的數字中剔除，因為是在第一季度和解的第四季度事件。除此之外，影響營運資金現金流的是 Tyler 的扭虧為盈，而從負面來看，資本支出在第一季度高於預期。

And below the operating line, Reuven?

在運營線以下，魯文？

$140 million is the difference and is up in the financing activities, right? Yes, that makes up the full $240 million.

1.4 億美元是差額，並且在融資活動中有所增加，對嗎？是的，這構成了全部 2.4 億美元。

And our next question will come from Matthew Blair with Tudor Pickering Holt.

我們的下一個問題將來自 Matthew Blair 和 Tudor Pickering Holt。

Joseph, it looks like Southwest cracks are still at new 5-year highs, whereas most other regions are roughly around 5-year averages or even a little bit below. Could you talk about the drivers that are supporting the strong margin environment in the Southwest? And is that something that you can capitalize on in Q2? Or does the big spring maintenance in April take you out of the picture there.

約瑟夫，看起來西南裂縫仍處於 5 年新高，而大多數其他地區大約在 5 年平均水平左右，甚至略低於 5 年平均水平。您能否談談支持西南地區強勁利潤率環境的驅動因素？這是你可以在第二季度利用的東西嗎？或者 4 月份的大型春季維護是否會讓您離開那裡。

Yes. Thanks for the question. Actually, we are very optimistic about what we see on the demand side. We see a strong netbacks and a strong pool from our racks and the demand in our side of the world looks solid as this could be. There is a different discussion between the macro and the micro and the micro in our inland is solid and robust, and we see that on the results.

是的。謝謝你的問題。實際上，我們對需求方面的情況非常樂觀。我們從我們的貨架上看到了強大的淨回值和強大的資金池，而且我們這邊的需求看起來很穩定。宏觀和微觀之間有不同的討論，我們內地的微觀是紮實和有力的，我們從結果上看到了這一點。

Yes. And if I can add, the Southwest market, you're right, is probably the strongest in the country these days. And fortunately, this is where a lot of our businesses. So you can see it in the office Iraq versus Gulf Coast, and we capture that and it's coming back to the refining, not through the big spring number, but definitely through our profitability. As far as the second quarter dynamics and I'll say specifically in Big Spring, look, we think the fundamentals are favorable from inventory standpoint, right? I mean gasoline is tight going to the summer.

是的。如果我可以補充一點，西南市場，你是對的，可能是目前全國最強勁的市場。幸運的是，這是我們很多企業的所在地。所以你可以在伊拉克與墨西哥灣沿岸的辦公室看到它，我們抓住了這一點，它又回到了煉油領域，不是通過春季的大數字，而是通過我們的盈利能力。至於第二季度的動態，我會在 Big Spring 中具體說明，看，我們認為從庫存的角度來看基本面是有利的，對吧？我的意思是汽油會在夏天吃緊。

Global economic trends are still a concern, but we don't have a crystal ball to predict future trends. But the great thing about our system, we are well insulated within our niche market. We have seen strong demand going into April and the marketing uplift really reflect our reallocation advantage. We continue to leverage our advantage of the crude pricing, octane capabilities and now asphalt capabilities as we move to the second quarter.

全球經濟趨勢仍然令人擔憂，但我們沒有預測未來趨勢的水晶球。但我們系統的優點是，我們在我們的利基市場中得到了很好的隔離。我們已經看到進入 4 月份的強勁需求，營銷提升確實反映了我們的重新分配優勢。隨著我們進入第二季度，我們將繼續利用我們在原油定價、辛烷值能力和現在的瀝青能力方面的優勢。

Okay. Sounds good. And then on the retail side, it looks like your same-store volumes were down 1.7% in Q1. Do you have a rough number on what that's looking like so far in Q2.

好的。聽起來不錯。然後在零售方面，第一季度同店銷量似乎下降了 1.7%。你對第二季度到目前為止的情況有一個粗略的數字嗎？

So we are not going to give a forecast for Q2, but we are going to say on the other side, merchandise was higher. So all-in-all, retail is doing good.

所以我們不會給出第二季度的預測，但我們會說另一方面，商品價格更高。因此，總而言之，零售業表現良好。

And our next question will come from Paul Cheng with Scotia Bank.

我們的下一個問題將來自豐業銀行的 Paul Cheng。

Two questions, please. One, hopefully, that's simple maybe is for Reuven. Trading and supply in the first quarter, it's a loss of about $18 million. And last year is $105 million. Is it a wheel loss or it's just one side of the 2 trades that you lost on -- you report a loss there, and then you actually have the VNI hedge gain on the other side on the physical market in the physical barrel. So just trying to understand whether it's a real loss or that is just is sort of like accounting, how you report it. If it is a real loss, what contribute to the loss. The second question maybe is for Avigal that how important is M&A acquisition for your strategy over the next 3 years in refining, logistics and retail. And if it is important or even if it is not, what type of financial main tricks you would be using when you're looking at potential targets?

請教兩個問題。一個，希望，這很簡單，也許是為了魯文。第一季度的貿易和供應虧損約1800萬美元。去年是 1.05 億美元。是車輪損失還是只是您損失的 2 筆交易的一側——您在那里報告損失，然後您實際上在實物桶的實物市場的另一側獲得了 VNI 對沖收益。因此，只是想了解它是真正的損失還是只是有點像會計，你如何報告它。如果是真正的損失，造成損失的原因是什麼。第二個問題可能是對 Avigal 而言，在未來 3 年內，併購對您在煉油、物流和零售方面的戰略有多重要。如果它很重要，或者即使它不重要，您在尋找潛在目標時會使用哪種類型的財務主要技巧？

Yes. So Paul, with your permission, I will start with the strategic question and then we'll talk -- we'll go to the tactics. So M&A is obviously a tool that sells Delek in the past very successfully and very good but M&A, we're going to do it only if we're going to be disciplined, right? And when I mean disciplined, it seems to be accretive for investors. We are not going to do M&A just to check the box. We're going to do it when it makes sense, strategic, synergetic and we can drive value to shareholder period, end of story. That's what's going to drive us.

是的。所以保羅，如果你允許，我將從戰略問題開始，然後我們將討論——我們將討論戰術。所以併購顯然是過去非常成功和非常好的銷售 Delek 的工具，但是併購，我們只有在受到紀律處分的情況下才會這樣做，對嗎？當我指的是紀律嚴明時，它似乎對投資者有利。我們不會只是為了勾選方框而進行併購。我們將在有意義、戰略性、協同作用的時候去做，我們可以為股東期間、故事的結尾帶來價值。這就是我們的動力。

Obviously, on the refining side, it's more accretive versus retail, which is 10x. So we're not probably going to do M&A on the retail side because it's not accretive. So that's in the strategic side, but we are obviously looking and if we'll find something that will make sense on the short term and on the long term, we were not shy about it. We were not shy about that in the past. But again, it needs to be accretive and makes sense. Around the split between refining, I don't have all the technicalities in front of me, Paul, but it's -- there is nothing weird in those -- in that. It's mainly the way we split between refining and the different assets. So I can ask Jose to look into that and come back to you with more color. I don't have it in front of me.

顯然，在精煉方面，它比零售更增值，後者是 10 倍。所以我們可能不會在零售方面進行併購，因為它不會增加。所以這是在戰略方面，但我們顯然正在尋找，如果我們能找到在短期和長期內都有意義的東西，我們並不害羞。過去我們對此並不害羞。但同樣，它需要具有增值性和意義。圍繞精煉之間的分歧，保羅，我面前並沒有所有的技術細節，但它——其中沒有​​什麼奇怪的——在那。這主要是我們在精煉和不同資產之間劃分的方式。所以我可以請 Jose 調查一下，然後以更多顏色返回給您。我面前沒有。

Can I ask that on refining, if you do go into any acquisition, is there a particular regions that you will be interested or that you are not really focusing on the region?

我可以問一下，在煉油方面，如果你確實進行了任何收購，是否有一個特定的區域你會感興趣或者你並沒有真正關注該區域？

So again, we are not going to be specific, but I think the rules that we have. It's we need to have add value to any assets need to be accretive, and we are not going to rush ourselves, Paul. We're going to make something that's going to make sense for the long term and can bring and going to be accretive for our share price. So there is no rush, but if something is going to come up, we'll do it right.

同樣，我們不會具體說明，但我認為我們有規則。我們需要為任何需要增值的資產增加價值，我們不會急於求成，保羅。我們將做一些從長遠來看有意義的事情，並且可以帶來並增加我們的股價。所以不用著急，但如果有什麼事情要發生，我們會做對的。

Our next question will come from Jason Gabelman with Cowen.

我們的下一個問題將來自 Jason Gabelman 和 Cowen。

I want to first go back to capital allocation and pay down a lot of debt in 1Q. Does that get the parent balance sheet in an appropriate place excluding MLT debt? Or do you want to pay down additional debt and kind of on the topic of the balance sheet and capital allocation. You had previously discussed a 1:1 ratio between buybacks and debt pay down. Is that kind of the right split moving forward? Or do you have a different allocation plan going forward?

我想首先回到資本配置並在第一季度償還大量債務。這是否使母資產負債表處於適當的位置，不包括 MLT 債務？或者你想償還額外的債務以及資產負債表和資本配置的話題。您之前曾討論過回購與償還債務之間的 1:1 比例。這種正確的分裂正在向前發展嗎？或者你有不同的分配計劃嗎？

Yes. So thank you for the question. I will start and Reuven will continue. So on the DK side, we probably have the best balance sheet among our peers with only $200 million of debt. Most of our debt is well known, is on the DKL side and have a completely different level of income against it. So it's 2 different volume and we cannot lose sight out of that. And obviously, we have very high level of third-party income. So that's the philosophy behind it. So we said in the past and we are sticking to it, especially on a higher interest environment that we are at that we will have a balanced approach between reducing debt and buyback we demonstrate in the last 4 months that we are not shy of doing buyback and the market continues to be good. We will use that tool in the past -- in the future like we used it in the past. Reuven, maybe you can if you want to.

是的。謝謝你的提問。我開始，魯文繼續。因此，在 DK 方面，我們的資產負債表可能是同行中最好的，只有 2 億美元的債務。我們的大部分債務是眾所周知的，是在 DKL 方面，並且有完全不同的收入水平。所以這是兩個不同的捲，我們不能忽視它。顯然，我們的第三方收入水平很高。這就是它背後的理念。所以我們過去說過，我們會堅持下去，尤其是在我們所處的高利率環境下，我們將在減少債務和回購之間採取平衡的方法，我們在過去 4 個月中證明我們並不羞於回購市場繼續向好。我們將在過去使用該工具——在未來就像我們過去使用它一樣。魯文，如果你願意，也許你可以。

Yes. As you recall, during the fourth quarter, we had to increase our debt as a result of the intermediation agreement timing. So going into the first quarter, we had 2 priorities. One is to pay down back that debt. And the other one was to support the elevated capital expenditure level of the first quarter, which are mainly as a result of the Tyler turnaround. Once we realize we can accomplish that and it's a very strong quarter, we did additional $60 million of debt from the original plan, which put us at the $300 million range. And we started the buyback program and we bought $40 million.

是的。您還記得，在第四季度，由於中介協議的時間安排，我們不得不增加債務。所以進入第一季度，我們有兩個優先事項。一是償還債務。另一個是支持第一季度較高的資本支出水平，這主要是由於 Tyler 的扭虧為盈。一旦我們意識到我們可以做到這一點並且這是一個非常強勁的季度，我們就從最初的計劃中增加了 6000 萬美元的債務，這使我們達到了 3 億美元的範圍。我們啟動了回購計劃，買了 4000 萬美元。

Got it. And just one clarifying question on that. So going forward, do you expect to be balanced between buybacks and debt pay-down? Or does it swing back the other way, just given 1Q debt pay-down was so high?

知道了。只有一個澄清問題。那麼展望未來，您是否希望在回購和償還債務之間取得平衡？還是考慮到第一季度的債務償還率如此之高，它是否會以另一種方式回落？

Yes. So we didn't change the philosophy. But it doesn't mean that if the market condition change, we'll not change versus what we do. As we said, the philosophy is to have a great return to shareholder, and we are first still around that, and we'll keep being first around that. So we are taking a buyback as a priority. Obviously, interest rate is where it is. So we're going to do both as effective as we possibly can.

是的。所以我們沒有改變理念。但這並不意味著如果市場條件發生變化，我們就不會改變我們所做的。正如我們所說，我們的理念是為股東帶來豐厚的回報，我們首先仍然圍繞著這一點，我們將繼續圍繞著這一點。因此，我們將回購作為優先事項。顯然，利率就在那裡。所以我們將盡可能有效地做到這兩點。

Okay, understood. And my follow-up is on corporate expenses. Those came in a lot lower than expected in 1Q, what drove that? It doesn't seem like you expect that to repeat in the second quarter. So just wondering what the variance was in the first quarter.

好的，明白了。我的後續行動是關於公司開支的。那些在第一季度比預期低很多，是什麼推動了這一點？您似乎不希望在第二季度重複這種情況。所以只是想知道第一季度的差異是什麼。

Yes. Reuven, do you want to take that?

是的。魯文，你要拿那個嗎？

Yes. Thank you. So it's actually a composition of 3 numbers. As part of our cost reduction efforts, we review every line item and we reclassified $6 million from G&A to OpEx, which is in line with industry practices and our peers. In addition to that, there were $3 million of timing expense. And the last component, which is the $3 million that is directly related to the cost efficiency steps that we have taken late in the fourth quarter, early in the first quarter, which will impact the G&A for the remainder of the year with about $12 million.

是的。謝謝。所以它實際上是 3 個數字的組合。作為我們降低成本工作的一部分，我們審查了每個項目，並將 600 萬美元從 G&A 重新分類到 OpEx，這符合行業慣例和我們的同行。除此之外，還有 300 萬美元的計時費用。最後一個組成部分，即與我們在第四季度末、第一季度初採取的成本效率措施直接相關的 300 萬美元，這將影響今年剩餘時間的 G&A 約 1200 萬美元.

Our next question will be a follow-up from Paul Cheng with Scotiabank.

我們的下一個問題將是 Paul Cheng 與 Scotiabank 的後續行動。

Real quick. Avigal, you're looking at logistics, have you guys ever consider have done similar to what some of your peers start to roll up that, that to engines, they spin it off or doing other things that actually take out my royalty pumpings unitholder. And secondly, that do you have a number you can share what is the VNI gain and the RIN expense in the quarter, whether those are any meaningful number, and also that you can talk about what is your hedging strategy going forward?

真快。 Avigal，你正在研究物流，你們有沒有考慮過做類似於你的一些同行開始做的事情，那就是引擎，他們把它分拆出來，或者做其他的事情，這些事情實際上拿走了我的特許權使用費抽水單位持有人。其次，你有一個數字可以分享本季度的 VNI 收益和 RIN 支出是多少，這些數字是否有意義，而且你可以談談你未來的對沖策略是什麼？

Yes. Thanks, Paul, for the follow-up. Let's start one by one. Around buying back the asset, we said that we believe that we have a good vehicle. I understand -- we understand why other peers did what we did, what they do. And we'll come back to you again when we have something meaningful to share. We believe that we have much more accretive way for everyone going forward with that. We have seen others that did it and was not as successful as they expected. So we have -- we believe we have a more meaningful way to do it. That's going to be better from a leverage and accretive for both to DK and DKL. Regarding the RIN, we historically didn't provide a special guidance or information around that. But this quarter, I'm sure that you are very pleased from all the new information we got. So we are moving very fast on the right direction to give a lot of clarity.

是的。保羅，謝謝你的跟進。讓我們一一開始。關於回購資產，我們說我們相信我們有一個很好的工具。我明白——我們明白為什麼其他同行做了我們所做的，他們所做的。當我們有一些有意義的事情要分享時，我們會再次與您聯繫。我們相信，我們有更多的方式讓每個人都向前邁進。我們已經看到其他人這樣做了，但並不像他們預期的那樣成功。所以我們 - 我們相信我們有更有意義的方式來做到這一點。從對 DK 和 DKL 的槓桿作用和增值來說，這會更好。關於 RIN，我們過去沒有提供相關的特殊指導或信息。但是本季度，我相信您對我們獲得的所有新信息感到非常滿意。因此，我們正朝著正確的方向快速前進，以提供更多的清晰度。

And that concludes our question-and-answer session. I'd like to turn the conference back over to Avigal Soreq for any closing remarks.

我們的問答環節到此結束。我想把會議轉回給 Avigal Soreq 聽取任何閉幕詞。

Yes. So thank you, the investor, the Board of Director and mainly our employees for a great contribution. Our first priority is to have safe and reliable operations and to have a great return to shareholders, and we are committed to do so. Thank you for your time and effort. Appreciate it.

是的。因此，感謝投資者、董事會和主要是我們的員工做出的巨大貢獻。我們的首要任務是安全可靠地運營並為股東帶來豐厚回報，我們致力於這樣做。感謝您的時間和精力。欣賞它。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

會議現已結束。感謝您參加今天的演講。您現在可以斷開線路。