We’ve seen that hangover kind of come through to the first month of the first quarter of 2024, but we’re starting to see volumes come back now. So that was the primary driver there. Of course, some of our end use markets are still a bit sluggish. The European market still in a bit of trying to find its feet with regards to the market environment that we provide over there. But despite all of that, the team did a tremendous job of really working to execute the strategy. We finished the year by placing more base oil in captive product lines than we ever have. We also, I mentioned it in prior quarterly earnings about digital tools that we’ve instituted that give us better transparency to our costs and we’re driving our product lines to a more profitable position as a result.
And of course, we’re continuing to do that. Operational housekeeping and aside from reliability and quality and EHS, we’re focused on gaining efficiencies by simplifying processes and getting after complexity reduction. Put those together and you’ve got a really healthy business that performed well throughout the quarter.
Tim Go: So Manav, that $30 million of FIFO impact, it is our accounting system, so we don’t actually adjust out for that. Our adjusted EBITDA is still in that $58 million range that we talked about. But we like to help people understand what the FIFO impact is because that is a more representative of how the underlying business is performing. So we just want to help people understand that. FIFO in the end, evens out over time. And so we believe we’ll get that back here as prices continue to increase here in 2024, they’ll even out over time as well. We’re very bullish on the business. We think — we think 2024 will continue to be good years for us, despite base oil margins decreasing. We saw that phenomena all last year, and yet Matt and his team have been able to deliver outsized results, and we don’t expect anything different this year.
Manav Gupta: The quick follow-up here, Tim is, you and the team have indicated that over a period of time, you would like to be the highest gross margin refiner. So in a way, reporting the highest capture. You have made good progress over it. Help us understand what more steps are you looking to take, whether it’s commercial or reliability to help you get to your goal of being the number one gross margin refiner in the U.S.?
Tim Go: Thanks, Manav. That absolutely is one of our goals. And we are well on the way to doing that. Pleased with some of the things that we put into place. We take advantage of not only our kit, but the markets that we’re in. We believe our markets are advantaged, but things that we’re doing to drive capture include pushing the distillate production, taking a stronger approach on jet. We’re taking a path at increased premium production. We’re going to take advantage of our late and crude advantages and taking that heavy oil value chain. And I’ll remind you that our approach is not only in the acquisition cost of the light and heavy differential, but also what we do with some of the finishing products and our asphalt business is performing well.
We look to do those things across all of our value chains right through the business. So we’ll continue to look to optimize and focus on where we can high grade the molecule and take it to the markets that we see best fit in our advantaged geographies.`
Manav Gupta: Thank you.
Operator: Your next question comes from the line of Matthew Blair from TPH. Your line is open.
Matthew Blair: Hey. Good morning. I had a few questions about the impact that this planned turnaround at Puget Sound might have on your Q1 results. First, are you still running about 40% Syncrude at Puget Sound? And if so, second, do you think that you’ll still be able to capture the benefits of these wider Syncrude diffs in Q1, given that the turnaround is on your downstream units like the FCC and the alky?
Tim Go: Yeah, Matt. This is Tim. We run a lot of Canadian crude. It’s not all Syncrude. Some of its heavy crude as well. And we are — and those are advantaged crude barrels that we take in. We’ll still be able to do quite a bit of that even during the Puget Sound turnaround. So we blend that to basically mimic an ANS barrel and that we believe is still going to be available. And you brought up a good point. We talk a lot about heavy Canadian diffs (ph) and how we were able to take advantage of that. The Syncrude differential has really been very strong, as you’ve pointed out, and we’re able to take full advantage of that at Puget Sound.
Matthew Blair: Sounds good. And then could you talk about your outlook for your tax rate in 2024? I think your long-term guidance is roughly 19% to 21%. Does that still hold? And then is there anything changing on your deferred taxes? I guess maybe in regards to the bonus depreciation, given that HEP is now in the fold?
Atanas Atanasov: Yes. This is Atanas. With respect to our tax rate at [indiscernible] now in 21% to 22% as a plan tax rate. And with respect to deferred taxes, yes, the bonus depreciation does benefit deferred tax. The largest impact was on the fourth quarter of 2023, but we’ll have some impact on 2024 as well.
Matthew Blair: Sounds good. Thank you.
Operator: Your next question comes from the line of John Royall from JPMorgan. Your line is open.
John Royall: Hi. Good morning. Thanks for taking my question. Can you speak to — you’ve spoken in the past on some incremental synergies that you think are out there after hitting your original target for Sinclair. Is there any update on those and should we expect to see some progress there in 2024 or is that a longer-term initiative?
