Kevin Mitchell: Yeah. So we — I mean, we don’t give out that sort of asset-specific level of financial information. What I can say is that the — when you look at the fourth quarter results and the capture rates, the Rodeo starting to come — turn operations down, we shut down one of the crude units in the fourth quarter. That did have a detrimental impact to our fourth quarter results versus if we were just carrying on in the traditional normal full crude operations at Rodeo. So it did have an impact. In terms of the $100 million of startup and decommissioning costs in the first quarter, we would not treat those as a special item. They will flow through as GAAP earnings or impact and that will be how we report the results, because they’re not, I mean, it’s normal for what we’re doing.
It’s not a unique factor. Now, we can talk about it and you can choose to make your own sort of adjustments around it. But for us, it will just be part of our normal operating results.
Paul Cheng: And, Kevin, if I look at on your page 23 on your presentation, in terms of the margin capture, the other column, you’re talking about $7.11. And in here that, you have, call it, $200 million of, I think, the swing benefit from the Colonial Pipeline product pricing. So that’s translating to about $3.90. So where is other, say, $3 per barrel contribute to that?
Kevin Mitchell: Yeah. So, I think, the bulk of the rest. So that’s one factor on that. You’ve also got the swing I mentioned on the Gulf Coast product pricing effect. You had a swing there from one quarter to the next. And you also have the benefit in there of our, we talked about our commercial performance during the quarter. That will also show up in that bar. So, all those things get reflected in that part of the representation.
Paul Cheng: So I suppose that the bulk of the gap, say, $3 is contributed by commercial operation or that there’s just a minor piece of that you have other things that are even a bigger contributor?
Kevin Mitchell: Yeah. I mean, it’s a combination of all of those items. So you see benefit on the product side. You see benefit from commercial contribution. You see the benefit from the inventory hedging items that we talked about. So they all combine to make up the bulk of that $7.
Paul Cheng: Okay. Got it. Thank you.
Operator: Our next question comes from the line of Matthew Blair with Tudor, Pickering, Holt. Matthew, please go ahead.
Matthew Blair: Hey. Good morning. Thanks for taking my questions here. On the Chem side, sorry, on the Chem side, you provided strong utilization guidance once again for Q1. Could you talk about the recent improvement in PE prices? What’s driving that? And then also, could you share any trends on demand that you’re seeing, either export-related or domestic?
Tim Roberts: Yeah. Hey, Matt. This is Tim. Yeah. A couple things on that from the Chem standpoint. Yeah, we’ve seen actually pretty good stability with regard to polyethylene prices through the fourth quarter. Things were relatively flat from October through December. Then they got a $0.05 increase in January. How much of the $0.05 they actually get, I think, that might be a little bit of a discussion point. But nonetheless, it did highlight that the U.S. is running hard. Demand in the U.S. has been good, albeit steady in Europe, soft in Asia. The feedstock advantage here is really, you’ve got a highly utilized U.S. Gulf Coast kit, namely CPChem and they’re running hard. So you’ve seen some destocking that’s going on as well.
So I think that’s helped underpin a little bit of momentum. Now, I don’t think anybody’s declaring victory on this at this point. I think there’s a lot of destocking that still needs to happen throughout the balance of the year. But it does tell you that the market forces are in play and you will see a rebalancing through 2024.
Mark Lashier: Yeah. And Matthew, I think this just demonstrates the resilience of CPChem across this down cycle. They’ve done relatively well, been able to run at high rates and compete, and be cash positive and show bottom of the cycle returns that we’re happy with. We’re anxious to see them come out of this cyclical downturn, but they are really, really well positioned for the long-term.
Matthew Blair: Sounds good. And then, could you provide an outlook on your deferred taxes for 2024? It’s been a little volatile recently, but I believe that 2023 did come in above your overall expectations. What’s the outlook for 2024?
Kevin Mitchell: Yeah. Matt, that’s a great question. We had pretty strong deferred tax benefit in 2023 and also 2022, and in both years the primary driver to those were the MLP roll-ups. So in 2022, we had benefit associated with PSXP, and in 2023, with the DCP roll-up. And that end — in the end, that was a bigger benefit than we were anticipating, which drove some of the movements in that that you saw last year. That benefit drops off significantly as we go into 2024 and it’s a combination of less lower capital spend and so less depreciation to take advantage of, and bonus depreciation is scaling down as well, so we dropped 60% year one bonus in 2024. So we’re anticipating about a $200 million benefit for the year in 2024, so quite a lot lower than what we had in 2023.
