On a go-forward basis, we will recognize that deferred revenue off our balance sheet into other income for our Fertilizer segment, call it $1 million, $1.5 million each quarter. And there will be periodic payments each quarter as well as opportunity for milestone payments annually. There will be a difference between what’s going through income and what we receive in cash. But obviously, from the CVR Partners’ perspective, they’ll take that into consideration when they are looking at their cash available.
Operator: Our next question comes from the line of Matthew Blair with Tudor, Pickering, Holt.
Matthew Blair: Hey. Good morning. Dave. You mentioned the benefits on premium gasoline rolling through your system. Could you talk about the drivers for these wide octane spreads? And do you think that’s sustainable for the rest of the year?
Dave Lamp: Well, the group is kind of — is a little bit unique in terms of premium. It sort of gets real long or gets real short. It’s just happened to be — been very short in the first quarter. And what usually cures it is a big shipment coming up from the Gulf via Explorer into the back — into Tulsa in the back of our markets. And that just didn’t happen very much this year. Either they had better export markets or something off the Gulf. And even though they are, but it’s pretty wide that the shipments just didn’t come. So it kind of played into our hand. We have the ability to make quite a bit of premium if the margin is there. And we use our CCR reformers to make that material and it just happened to be available at the time. It could go anywhere from — I’ve seen as low as $0.07 to all the way to $0.55. In fact, we saw some $0.50 spreads in the first quarter.
Matthew Blair: Okay. And as a follow-up on that, are you fully compliant on the Tier 3 low sulfur gasoline specs, or are you in the market having to buy those credits?
Dave Lamp: No, we’re fully compliant. We actually sell some credits occasionally.
Matthew Blair: Okay. Sounds good. And then, what are your thoughts on this E15 blend waiver for the summer? Do you think that will have a material impact on either gasoline demand or D6 RIN production?
Dave Lamp: Well, it’s going to make some more D6s, I think, for sure. But you got to remember that only 5% of the convenience stores even offer E15. So, it’s limited in its reach into the market. And I don’t know who buys it for what reason, but the typical discount is $0.02, $0.03. It’s not like it’s a bar burden. And if you include the mileage deduction you get with it, it’s probably a loser for most people. But I don’t expect it to do a whole lot.
Operator: Our next question comes from the line of Paul Cheng with Scotiabank.
Paul Cheng: Dave, I know you’re not going to tell us too much detail on the hedging. But can you tell us that if the gasoline and distillate, both of them being hedged 25% of your future output or that one is being hedged more than the other?
Dave Lamp: Well, I think we did a combination of all. We did 2-1-1s, we did some distillate, we did some gas. So, it’s a wide variety, just depending on what our strike price was at the time. And I’m really not going to get into all the details of exact volumes.
Paul Cheng: Okay. And when — I just want to clarify that when Dane was talking about $95 million of the RIN — on the RIN cost for the quarter, if that will include the RIN you generate from the RD or that’s excluding the RIN you generate in the RD?
