- Reported net income attributable to Valero stockholders of $2.6
billion, or $7.49 per share
- Returned $2.2 billion to stockholders through dividends and
stock buybacks
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported
net income attributable to Valero stockholders of $2.6 billion, or
$7.49 per share, for the third quarter of 2023, compared to $2.8
billion, or $7.19 per share, for the third quarter of 2022.
Excluding the adjustments shown in the accompanying earnings
release tables, adjusted net income attributable to Valero
stockholders was $2.8 billion, or $7.14 per share, for the third
quarter of 2022.
Refining
The Refining segment reported operating income of $3.4 billion
for the third quarter of 2023, compared to $3.8 billion for the
third quarter of 2022. Refining throughput volumes averaged 3.0
million barrels per day in the third quarter of 2023.
“Our refineries operated well and achieved 95 percent throughput
capacity utilization, which is a testament to our team’s relentless
focus on operational excellence,” said Lane Riggs, Valero’s Chief
Executive Officer and President. “Product demand remained strong in
our U.S. wholesale system, which matched the second quarter record
of over 1 million barrels per day of sales volume.”
Renewable Diesel
The Renewable Diesel segment, which consists of the Diamond
Green Diesel joint venture (DGD), reported $123 million of
operating income for the third quarter of 2023, compared to $212
million for the third quarter of 2022. Segment sales volumes
averaged 3.0 million gallons per day in the third quarter of 2023,
which was 761 thousand gallons per day higher than the third
quarter of 2022. The higher sales volumes were due to the impact of
additional volumes from the DGD Port Arthur plant, which started up
in the fourth quarter of 2022. Operating income was lower than the
third quarter of 2022 primarily due to lower renewable diesel
margin in the third quarter of 2023.
Ethanol
The Ethanol segment reported $197 million of operating income
for the third quarter of 2023, compared to $1 million for the third
quarter of 2022. Ethanol production volumes averaged 4.3 million
gallons per day in the third quarter of 2023, which was 831
thousand gallons per day higher than the third quarter of 2022.
Operating income was higher than the third quarter of 2022
primarily as a result of higher production volumes and lower corn
prices in the third quarter of 2023.
Corporate and Other
General and administrative expenses were $250 million in the
third quarter of 2023, compared to $214 million in the third
quarter of 2022. The effective tax rate for the third quarter of
2023 was 23 percent.
Investing and Financing Activities
Net cash provided by operating activities was $3.3 billion in
the third quarter of 2023. Included in this amount was a $33
million favorable change in working capital and $82 million of
adjusted net cash provided by operating activities associated with
the other joint venture member’s share of DGD. Excluding these
items, adjusted net cash provided by operating activities was $3.2
billion in the third quarter of 2023.
Capital investments totaled $394 million in the third quarter of
2023, of which $303 million was for sustaining the business,
including costs for turnarounds, catalysts and regulatory
compliance. Excluding capital investments attributable to the other
joint venture member’s share of DGD, capital investments
attributable to Valero were $352 million.
Valero returned $2.2 billion to stockholders in the third
quarter of 2023, of which $360 million was paid as dividends and
$1.8 billion was for the purchase of approximately 13 million
shares of common stock, resulting in a payout ratio of 68 percent
of adjusted net cash provided by operating activities.
Valero continues to target an annual payout ratio between 40 and
50 percent of adjusted net cash provided by operating activities.
Valero defines payout ratio as the sum of dividends paid and the
total cost of stock buybacks divided by net cash provided by
operating activities adjusted for changes in working capital and
DGD’s net cash provided by operating activities, excluding changes
in its working capital, attributable to the other joint venture
member’s share of DGD.
Liquidity and Financial Position
Valero ended the third quarter of 2023 with $9.2 billion of
total debt, $2.3 billion of finance lease obligations and $5.8
billion of cash and cash equivalents. The debt to capitalization
ratio, net of cash and cash equivalents, was 17 percent as of
September 30, 2023.
Strategic Update
The Sustainable Aviation Fuel (SAF) project at the DGD Port
Arthur plant remains on schedule and is expected to be completed in
2025 and cost $315 million, with half of that attributable to
Valero. The project is expected to give the plant the optionality
to upgrade approximately 50 percent of its current 470 million
gallon renewable diesel annual production capacity to SAF. With the
completion of this project, DGD is expected to become one of the
largest manufacturers of SAF in the world.
“While there are broader factors that may drive market
volatility, we remain focused on things we can control,” said
Riggs, “including operating efficiently in a safe, reliable and
environmentally responsible manner, maintaining capital discipline
by adhering to a minimum return threshold on growth projects, and
honoring our commitment to shareholder returns.”
Conference Call
Valero’s senior management will hold a conference call at 10
a.m. ET today to discuss this earnings release and to provide an
update on operations and strategy.
About Valero
Valero Energy Corporation, through its subsidiaries
(collectively, Valero), is a multinational manufacturer and
marketer of petroleum-based and low-carbon liquid transportation
fuels and petrochemical products, and it sells its products
primarily in the United States (U.S.), Canada, the United Kingdom
(U.K.), Ireland and Latin America. Valero owns 15 petroleum
refineries located in the U.S., Canada and the U.K. with a combined
throughput capacity of approximately 3.2 million barrels per day.
Valero is a joint venture member in Diamond Green Diesel Holdings
LLC, which owns two renewable diesel plants located in the U.S.
Gulf Coast region with a combined production capacity of
approximately 1.2 billion gallons per year, and Valero owns 12
ethanol plants located in the U.S. Mid-Continent region with a
combined production capacity of approximately 1.6 billion gallons
per year. Valero manages its operations through its Refining,
Renewable Diesel and Ethanol segments. Please visit
investorvalero.com for more information.
Valero Contacts
Investors: Homer Bhullar, Vice President – Investor Relations
and Finance, 210-345-1982 Eric Herbort, Director – Investor
Relations and Finance, 210-345-3331 Gautam Srivastava, Director –
Investor Relations, 210-345-3992
Media: Lillian Riojas, Executive Director – Media Relations and
Communications, 210-345-5002
Safe-Harbor Statement
Statements contained in this release and the accompanying
earnings release tables, or made during the conference call, that
state Valero’s or management’s expectations or predictions of the
future are forward-looking statements intended to be covered by the
safe harbor provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. The words “believe,” “expect,”
“should,” “estimates,” “intend,” “target,” “will,” “plans,”
“forecast,” and other similar expressions identify forward-looking
statements. Forward-looking statements in this release and the
accompanying earnings release tables include, and those made on the
conference call may include, statements relating to Valero’s
low-carbon fuels strategy, expected timing, cost and performance of
projects, future market and industry conditions, future operating
and financial performance, future production and manufacturing
ability and size, and management of future risks, among other
matters. It is important to note that actual results could differ
materially from those projected in such forward-looking statements
based on numerous factors, including those outside of Valero’s
control, such as legislative or political changes or developments,
market dynamics, cyberattacks, weather events, and other matters
affecting Valero’s operations or the demand for Valero’s products.
These factors also include, but are not limited to, the
uncertainties that remain with respect to current or contemplated
legal, political or regulatory developments that are adverse to or
restrict refining and marketing operations, or that impose profits,
windfall or margin taxes or penalties, global geopolitical and
other conflicts and tensions, the impact of inflation on margins
and costs, economic activity levels, and the adverse effects the
foregoing may have on Valero’s business plan, strategy, operations
and financial performance. For more information concerning these
and other factors that could cause actual results to differ from
those expressed or forecasted, see Valero’s annual report on Form
10-K, quarterly reports on Form 10‑Q, and other reports filed with
the Securities and Exchange Commission and available on Valero’s
website at www.valero.com.
Use of Non-GAAP Financial Information
This earnings release and the accompanying earnings release
tables include references to financial measures that are not
defined under U.S. generally accepted accounting principles (GAAP).
These non-GAAP measures include adjusted net income attributable to
Valero stockholders, adjusted earnings per common share – assuming
dilution, Refining margin, Renewable Diesel margin, Ethanol margin,
adjusted Refining operating income, adjusted Ethanol operating
income, adjusted net cash provided by operating activities, and
capital investments attributable to Valero. These non-GAAP
financial measures have been included to help facilitate the
comparison of operating results between periods. See the
accompanying earnings release tables for a reconciliation of
non-GAAP measures to their most directly comparable GAAP measures.
Note (e) to the earnings release tables provides reasons for the
use of these non-GAAP financial measures.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Statement of income data
Revenues
$
38,404
$
44,454
$
109,352
$
134,637
Cost of sales:
Cost of materials and other (a)
32,385
38,064
91,820
115,959
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,578
1,746
4,495
4,751
Depreciation and amortization expense
(b)
671
621
1,979
1,806
Total cost of sales
34,634
40,431
98,294
122,516
Other operating expenses
6
6
18
40
General and administrative expenses
(excluding
depreciation and amortization expense
reflected below) (c)
250
214
703
652
Depreciation and amortization expense
11
11
32
34
Operating income
3,503
3,792
10,305
11,395
Other income, net (d)
122
74
357
87
Interest and debt expense, net of
capitalized interest
(149
)
(138
)
(443
)
(425
)
Income before income tax expense
3,476
3,728
10,219
11,057
Income tax expense
813
816
2,288
2,410
Net income
2,663
2,912
7,931
8,647
Less: Net income attributable to
noncontrolling interests
41
95
298
232
Net income attributable to Valero Energy
Corporation
stockholders
$
2,622
$
2,817
$
7,633
$
8,415
Earnings per common share
$
7.49
$
7.20
$
21.22
$
20.94
Weighted-average common shares outstanding
(in millions)
349
390
359
400
Earnings per common share – assuming
dilution
$
7.49
$
7.19
$
21.21
$
20.93
Weighted-average common shares outstanding
–
assuming dilution (in millions)
349
390
359
401
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS BY
SEGMENT
(millions of dollars)
(unaudited)
Refining
Renewable
Diesel
Ethanol
Corporate and
Eliminations
Total
Three months ended September 30,
2023
Revenues:
Revenues from external customers
$
36,521
$
759
$
1,124
$
—
$
38,404
Intersegment revenues
8
672
310
(990
)
—
Total revenues
36,529
1,431
1,434
(990
)
38,404
Cost of sales:
Cost of materials and other
31,115
1,169
1,092
(991
)
32,385
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,366
84
125
3
1,578
Depreciation and amortization expense
597
55
20
(1
)
671
Total cost of sales
33,078
1,308
1,237
(989
)
34,634
Other operating expenses
6
—
—
—
6
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below)
—
—
—
250
250
Depreciation and amortization expense
—
—
—
11
11
Operating income by segment
$
3,445
$
123
$
197
$
(262
)
$
3,503
Three months ended September 30,
2022
Revenues:
Revenues from external customers
$
42,280
$
967
$
1,207
$
—
$
44,454
Intersegment revenues
9
508
179
(696
)
—
Total revenues
42,289
1,475
1,386
(696
)
44,454
Cost of sales:
Cost of materials and other
36,389
1,161
1,203
(689
)
38,064
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,516
69
162
(1
)
1,746
Depreciation and amortization expense
568
33
20
—
621
Total cost of sales
38,473
1,263
1,385
(690
)
40,431
Other operating expenses
6
—
—
—
6
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below)
—
—
—
214
214
Depreciation and amortization expense
—
—
—
11
11
Operating income by segment
$
3,810
$
212
$
1
$
(231
)
$
3,792
See Operating Highlights by
Segment.
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS BY
SEGMENT
(millions of dollars)
(unaudited)
Refining
Renewable
Diesel
Ethanol
Corporate and
Eliminations
Total
Nine months ended September 30,
2023
Revenues:
Revenues from external customers
$
102,924
$
2,990
$
3,438
$
—
$
109,352
Intersegment revenues
8
2,367
790
(3,165
)
—
Total revenues
102,932
5,357
4,228
(3,165
)
109,352
Cost of sales:
Cost of materials and other
87,398
4,143
3,422
(3,143
)
91,820
Operating expenses (excluding depreciation
and
amortization expense reflected below)
3,832
274
383
6
4,495
Depreciation and amortization expense
1,751
172
59
(3
)
1,979
Total cost of sales
92,981
4,589
3,864
(3,140
)
98,294
Other operating expenses
17
—
1
—
18
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below)
—
—
—
703
703
Depreciation and amortization expense
—
—
—
32
32
Operating income by segment
$
9,934
$
768
$
363
$
(760
)
$
10,305
Nine months ended September 30,
2022
Revenues:
Revenues from external customers
$
128,588
$
2,417
$
3,632
$
—
$
134,637
Intersegment revenues
24
1,490
507
(2,021
)
—
Total revenues
128,612
3,907
4,139
(2,021
)
134,637
Cost of sales:
Cost of materials and other (a)
111,308
3,129
3,533
(2,011
)
115,959
Operating expenses (excluding depreciation
and
amortization expense reflected below)
4,111
178
464
(2
)
4,751
Depreciation and amortization expense
(b)
1,682
87
37
—
1,806
Total cost of sales
117,101
3,394
4,034
(2,013
)
122,516
Other operating expenses
38
—
2
—
40
General and administrative expenses
(excluding
depreciation and amortization expense
reflected
below) (c)
—
—
—
652
652
Depreciation and amortization expense
—
—
—
34
34
Operating income by segment
$
11,473
$
513
$
103
$
(694
)
$
11,395
See Operating Highlights by
Segment.
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(h)
(millions of dollars)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of net income
attributable to Valero Energy
Corporation stockholders to adjusted
net income
attributable to Valero Energy
Corporation stockholders
Net income attributable to Valero Energy
Corporation
stockholders
$
2,622
$
2,817
$
7,633
$
8,415
Adjustments:
Modification of renewable volume
obligation (RVO) (a)
—
—
—
(104
)
Income tax expense related to modification
of RVO
—
—
—
23
Modification of RVO, net of taxes
—
—
—
(81
)
Gain on sale of ethanol plant (b)
—
—
—
(23
)
Income tax expense related to gain on sale
of ethanol plant
—
—
—
5
Gain on sale of ethanol plant, net of
taxes
—
—
—
(18
)
Environmental reserve adjustment (c)
—
—
—
20
Income tax benefit related to
environmental reserve adjustment
—
—
—
(5
)
Environmental reserve adjustment, net of
taxes
—
—
—
15
Loss (gain) on early retirement of debt
(d)
—
(26
)
(11
)
24
Income tax (benefit) expense related to
loss (gain) on early
retirement of debt
—
5
2
(6
)
Loss (gain) on early retirement of debt,
net of taxes
—
(21
)
(9
)
18
Total adjustments
—
(21
)
(9
)
(66
)
Adjusted net income attributable to
Valero Energy Corporation stockholders
$
2,622
$
2,796
$
7,624
$
8,349
Reconciliation of earnings per common
share –
assuming dilution to adjusted earnings
per common
share – assuming dilution
Earnings per common share – assuming
dilution
$
7.49
$
7.19
$
21.21
$
20.93
Adjustments:
Modification of RVO (a)
—
—
—
(0.20
)
Gain on sale of ethanol plant (b)
—
—
—
(0.05
)
Environmental reserve adjustment (c)
—
—
—
0.04
Loss (gain) on early retirement of debt
(d)
—
(0.05
)
(0.02
)
0.05
Total adjustments
—
(0.05
)
(0.02
)
(0.16
)
Adjusted earnings per common share –
assuming dilution
$
7.49
$
7.14
$
21.19
$
20.77
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(e)
(millions of dollars)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of operating income by
segment to segment
margin, and reconciliation of operating
income by segment
to adjusted operating income by
segment
Refining segment
Refining operating income
$
3,445
$
3,810
$
9,934
$
11,473
Adjustments:
Modification of RVO (a)
—
—
—
(104
)
Operating expenses (excluding depreciation
and
amortization expense reflected below)
1,366
1,516
3,832
4,111
Depreciation and amortization expense
597
568
1,751
1,682
Other operating expenses
6
6
17
38
Refining margin
$
5,414
$
5,900
$
15,534
$
17,200
Refining operating income
$
3,445
$
3,810
$
9,934
$
11,473
Adjustments:
Modification of RVO (a)
—
—
—
(104
)
Other operating expenses
6
6
17
38
Adjusted Refining operating income
$
3,451
$
3,816
$
9,951
$
11,407
Renewable Diesel segment
Renewable Diesel operating income
$
123
$
212
$
768
$
513
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
84
69
274
178
Depreciation and amortization expense
55
33
172
87
Renewable Diesel margin
$
262
$
314
$
1,214
$
778
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(e)
(millions of dollars)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of operating income by
segment to segment
margin, and reconciliation of operating
income by segment
to adjusted operating income by segment
(continued)
Ethanol segment
Ethanol operating income
$
197
$
1
$
363
$
103
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
125
162
383
464
Depreciation and amortization expense
(b)
20
20
59
37
Other operating expenses
—
—
1
2
Ethanol margin
$
342
$
183
$
806
$
606
Ethanol operating income
$
197
$
1
$
363
$
103
Adjustments:
Gain on sale of ethanol plant (b)
—
—
—
(23
)
Other operating expenses
—
—
1
2
Adjusted Ethanol operating income
$
197
$
1
$
364
$
82
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(e)
(millions of dollars)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of Refining segment
operating income to Refining
margin (by region), and reconciliation
of Refining segment
operating income to adjusted Refining
segment operating
income (by region) (f)
U.S. Gulf Coast region
Refining operating income
$
1,799
$
2,072
$
5,995
$
6,467
Adjustments:
Modification of RVO (a)
—
—
—
(74
)
Operating expenses (excluding depreciation
and
amortization expense reflected below)
761
870
2,121
2,339
Depreciation and amortization expense
375
350
1,082
1,023
Other operating expenses
—
6
11
29
Refining margin
$
2,935
$
3,298
$
9,209
$
9,784
Refining operating income
$
1,799
$
2,072
$
5,995
$
6,467
Adjustments:
Modification of RVO (a)
—
—
—
(74
)
Other operating expenses
—
6
11
29
Adjusted Refining operating income
$
1,799
$
2,078
$
6,006
$
6,422
U.S. Mid-Continent region
Refining operating income
$
582
$
600
$
1,507
$
1,701
Adjustments:
Modification of RVO (a)
—
—
—
(19
)
Operating expenses (excluding depreciation
and
amortization expense reflected below)
194
210
569
581
Depreciation and amortization expense
85
85
250
251
Refining margin
$
861
$
895
$
2,326
$
2,514
Refining operating income
$
582
$
600
$
1,507
$
1,701
Adjustment: Modification of RVO (a)
—
—
—
(19
)
Adjusted Refining operating income
$
582
$
600
$
1,507
$
1,682
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(e)
(millions of dollars)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of Refining segment
operating income to Refining
margin (by region), and reconciliation
of Refining segment
operating income to adjusted Refining
segment operating
income (by region) (f)
(continued)
North Atlantic region
Refining operating income
$
612
$
785
$
1,552
$
2,293
Adjustments:
Operating expenses (excluding depreciation
and
amortization expense reflected below)
189
226
547
624
Depreciation and amortization expense
63
62
192
197
Other operating expenses
1
—
1
9
Refining margin
$
865
$
1,073
$
2,292
$
3,123
Refining operating income
$
612
$
785
$
1,552
$
2,293
Adjustment: Other operating expenses
1
—
1
9
Adjusted Refining operating income
$
613
$
785
$
1,553
$
2,302
U.S. West Coast region
Refining operating income
$
452
$
353
$
880
$
1,012
Adjustments:
Modification of RVO (a)
—
—
—
(11
)
Operating expenses (excluding depreciation
and
amortization expense reflected below)
222
210
595
567
Depreciation and amortization expense
74
71
227
211
Other operating expenses
5
—
5
—
Refining margin
$
753
$
634
$
1,707
$
1,779
Refining operating income
$
452
$
353
$
880
$
1,012
Adjustments:
Modification of RVO (a)
—
—
—
(11
)
Other operating expenses
5
—
5
—
Adjusted Refining operating income
$
457
$
353
$
885
$
1,001
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Throughput volumes (thousand barrels
per day)
Feedstocks:
Heavy sour crude oil
496
325
437
342
Medium/light sour crude oil
312
497
319
438
Sweet crude oil
1,514
1,479
1,488
1,439
Residuals
192
214
209
223
Other feedstocks
119
123
118
117
Total feedstocks
2,633
2,638
2,571
2,559
Blendstocks and other
389
367
403
364
Total throughput volumes
3,022
3,005
2,974
2,923
Yields (thousand barrels per
day)
Gasolines and blendstocks
1,473
1,457
1,452
1,434
Distillates
1,158
1,158
1,125
1,107
Other products (g)
428
418
425
409
Total yields
3,059
3,033
3,002
2,950
Operating statistics (e) (h)
Refining margin
$
5,414
$
5,900
$
15,534
$
17,200
Adjusted Refining operating income
$
3,451
$
3,816
$
9,951
$
11,407
Throughput volumes (thousand barrels per
day)
3,022
3,005
2,974
2,923
Refining margin per barrel of
throughput
$
19.47
$
21.34
$
19.13
$
21.55
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.91
5.48
4.72
5.15
Depreciation and amortization expense per
barrel of
throughput
2.15
2.06
2.15
2.11
Adjusted Refining operating income per
barrel of
throughput
$
12.41
$
13.80
$
12.26
$
14.29
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RENEWABLE DIESEL SEGMENT
OPERATING HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Operating statistics (e) (h)
Renewable Diesel margin
$
262
$
314
$
1,214
$
778
Renewable Diesel operating income
$
123
$
212
$
768
$
513
Sales volumes (thousand gallons per
day)
2,992
2,231
3,460
2,084
Renewable Diesel margin per gallon of
sales
$
0.95
$
1.53
$
1.29
$
1.37
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of sales
0.30
0.34
0.29
0.32
Depreciation and amortization expense per
gallon of sales
0.20
0.15
0.19
0.15
Renewable Diesel operating income per
gallon of sales
$
0.45
$
1.04
$
0.81
$
0.90
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
ETHANOL SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Operating statistics (e) (h)
Ethanol margin
$
342
$
183
$
806
$
606
Adjusted Ethanol operating income
$
197
$
1
$
364
$
82
Production volumes (thousand gallons per
day)
4,329
3,498
4,319
3,799
Ethanol margin per gallon of
production
$
0.86
$
0.57
$
0.68
$
0.59
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
gallon of production
0.32
0.50
0.32
0.45
Depreciation and amortization expense per
gallon of production (b)
0.05
0.07
0.05
0.04
Gain on sale of ethanol plant per gallon
of production (b)
—
—
—
0.02
Adjusted Ethanol operating income per
gallon of production
$
0.49
$
—
$
0.31
$
0.08
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Operating statistics by region
(f)
U.S. Gulf Coast region (e) (h)
Refining margin
$
2,935
$
3,298
$
9,209
$
9,784
Adjusted Refining operating income
$
1,799
$
2,078
$
6,006
$
6,422
Throughput volumes (thousand barrels per
day)
1,834
1,813
1,783
1,752
Refining margin per barrel of
throughput
$
17.39
$
19.76
$
18.92
$
20.45
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.51
5.21
4.36
4.89
Depreciation and amortization expense per
barrel of
throughput
2.22
2.09
2.22
2.14
Adjusted Refining operating income per
barrel of
throughput
$
10.66
$
12.46
$
12.34
$
13.42
U.S. Mid-Continent region (e)
(h)
Refining margin
$
861
$
895
$
2,326
$
2,514
Adjusted Refining operating income
$
582
$
600
$
1,507
$
1,682
Throughput volumes (thousand barrels per
day)
456
441
461
437
Refining margin per barrel of
throughput
$
20.53
$
22.07
$
18.49
$
21.10
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.62
5.19
4.52
4.88
Depreciation and amortization expense per
barrel of
throughput
2.02
2.10
1.98
2.11
Adjusted Refining operating income per
barrel of
throughput
$
13.89
$
14.78
$
11.99
$
14.11
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Operating statistics by region (f)
(continued)
North Atlantic region (e) (h)
Refining margin
$
865
$
1,073
$
2,292
$
3,123
Adjusted Refining operating income
$
613
$
785
$
1,553
$
2,302
Throughput volumes (thousand barrels per
day)
461
479
463
482
Refining margin per barrel of
throughput
$
20.39
$
24.34
$
18.14
$
23.72
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
4.47
5.11
4.33
4.74
Depreciation and amortization expense per
barrel of
throughput
1.48
1.43
1.52
1.50
Adjusted Refining operating income per
barrel of
throughput
$
14.44
$
17.80
$
12.29
$
17.48
U.S. West Coast region (e) (h)
Refining margin
$
753
$
634
$
1,707
$
1,779
Adjusted Refining operating income
$
457
$
353
$
885
$
1,001
Throughput volumes (thousand barrels per
day)
271
272
267
252
Refining margin per barrel of
throughput
$
30.19
$
25.36
$
23.38
$
25.89
Less:
Operating expenses (excluding depreciation
and
amortization expense reflected below) per
barrel of
throughput
8.89
8.39
8.15
8.26
Depreciation and amortization expense per
barrel of
throughput
2.97
2.84
3.11
3.07
Adjusted Refining operating income per
barrel of
throughput
$
18.33
$
14.13
$
12.12
$
14.56
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$
86.18
$
97.59
$
82.12
$
102.21
Brent less West Texas Intermediate (WTI)
crude oil
3.72
5.83
4.68
3.91
Brent less WTI Houston crude oil
2.21
3.69
3.19
2.28
Brent less Dated Brent crude oil
(0.78
)
(2.97
)
(0.10
)
(2.92
)
Brent less Argus Sour Crude Index crude
oil
3.43
8.23
5.53
6.58
Brent less Maya crude oil
8.77
13.11
14.16
9.84
Brent less Western Canadian Select Houston
crude oil
9.98
17.68
12.19
13.22
WTI crude oil
82.46
91.76
77.44
98.29
Natural gas (dollars per million
British Thermal Units)
2.38
7.31
2.21
6.29
RVO (dollars per barrel) (i)
7.42
8.11
7.77
7.45
Product margins (RVO adjusted unless
otherwise noted)
(dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate
Blending (CBOB)
gasoline less Brent
14.70
5.70
12.57
12.82
Ultra-low-sulfur (ULS) diesel less
Brent
30.87
41.01
25.26
36.89
Propylene less Brent (not RVO
adjusted)
(57.98
)
(46.73
)
(46.32
)
(38.04
)
U.S. Mid-Continent:
CBOB gasoline less WTI
25.46
19.27
22.25
19.04
ULS diesel less WTI
37.10
52.25
32.12
41.81
North Atlantic:
CBOB gasoline less Brent
22.93
20.17
18.96
21.73
ULS diesel less Brent
33.91
44.19
28.19
44.22
U.S. West Coast:
California Reformulated Gasoline
Blendstock of
Oxygenate Blending 87 gasoline less
Brent
43.33
41.48
32.89
36.59
California Air Resources Board diesel less
Brent
47.66
43.68
31.43
39.70
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Renewable Diesel
New York Mercantile Exchange ULS
diesel
(dollars per gallon)
$
3.03
$
3.55
$
2.80
$
3.54
Biodiesel Renewable Identification Number
(RIN)
(dollars per RIN)
1.40
1.71
1.51
1.61
California Low-Carbon Fuel Standard carbon
credit
(dollars per metric ton)
74.46
86.21
73.65
109.71
U.S. Gulf Coast (USGC) used cooking oil
(dollars per pound)
0.64
0.73
0.61
0.77
USGC distillers corn oil (dollars per
pound)
0.72
0.73
0.65
0.77
USGC fancy bleachable tallow (dollars per
pound)
0.68
0.78
0.62
0.76
Ethanol
Chicago Board of Trade corn (dollars per
bushel)
4.99
6.60
5.95
7.02
New York Harbor ethanol (dollars per
gallon)
2.39
2.58
2.42
2.60
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars)
(unaudited)
September 30,
December 31,
2023
2022
Balance sheet data
Current assets
$
26,577
$
24,133
Cash and cash equivalents included in
current assets
5,831
4,862
Inventories included in current assets
7,513
6,752
Current liabilities
17,592
17,461
Valero Energy Corporation stockholders’
equity
25,975
23,561
Total equity
28,057
25,468
Debt and finance lease obligations:
Debt –
Current portion of debt (excluding
variable interest entities (VIEs))
$
167
$
—
Debt, less current portion of debt
(excluding VIEs)
8,020
8,380
Total debt (excluding VIEs)
8,187
8,380
Current portion of debt attributable to
VIEs
963
861
Debt, less current portion of debt
attributable to VIEs
—
—
Total debt attributable to VIEs
963
861
Total debt
9,150
9,241
Finance lease obligations –
Current portion of finance lease
obligations (excluding VIEs)
179
184
Finance lease obligations, less current
portion (excluding VIEs)
1,411
1,453
Total finance lease obligations (excluding
VIEs)
1,590
1,637
Current portion of finance lease
obligations attributable to VIEs
25
64
Finance lease obligations, less current
portion attributable to VIEs
676
693
Total finance lease obligations
attributable to VIEs
701
757
Total finance lease obligations
2,291
2,394
Total debt and finance lease
obligations
$
11,441
$
11,635
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of net cash provided by
operating activities to
adjusted net cash provided by operating
activities (e)
Net cash provided by operating
activities
$
3,308
$
2,045
$
7,990
$
8,478
Exclude:
Changes in current assets and current
liabilities
33
(1,489
)
(1,695
)
(1,617
)
Diamond Green Diesel LLC’s (DGD) adjusted
net cash
provided by operating activities
attributable to the other joint
venture member’s ownership interest in
DGD
82
119
447
294
Adjusted net cash provided by operating
activities
$
3,193
$
3,415
$
9,238
$
9,801
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of capital investments
to capital
investments attributable to Valero
(e)
Capital expenditures (excluding VIEs)
$
157
$
228
$
468
$
552
Capital expenditures of VIEs:
DGD
61
224
183
682
Other VIEs
2
11
4
30
Deferred turnaround and catalyst cost
expenditures
(excluding VIEs)
157
139
665
820
Deferred turnaround and catalyst cost
expenditures
of DGD
17
—
56
13
Investments in nonconsolidated joint
ventures
—
—
—
1
Capital investments
394
602
1,376
2,098
Adjustments:
DGD’s capital investments attributable to
the other joint
venture member
(40
)
(112
)
(120
)
(347
)
Capital expenditures of other VIEs
(2
)
(11
)
(4
)
(30
)
Capital investments attributable to
Valero
$
352
$
479
$
1,252
$
1,721
Dividends per common share
$
1.02
$
0.98
$
3.06
$
2.94
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
NOTES TO EARNINGS RELEASE
TABLES
(a)
Under the Renewable Fuel Standard
(RFS) program, the U.S. Environmental Protection Agency (EPA) is
required to set annual quotas for the volume of renewable fuels
that obligated parties, such as us, must blend into petroleum-based
transportation fuels consumed in the U.S. The quotas are used to
determine an obligated party’s RVO. The EPA released a final rule
on June 3, 2022 that, among other things, modified the volume
standards for 2020 and, for the first time, established volume
standards for 2021 and 2022.
In 2020, we recognized the cost
of the RVO using the 2020 quotas set by the EPA at that time, and
in 2021 and the three months ended March 31, 2022, we recognized
the cost of the RVO using our estimates of the quotas. As a result
of the final rule released by the EPA as noted above, we recognized
a benefit of $104 million in the nine months ended September 30,
2022 primarily related to the modification of the 2020 quotas.
(b)
Depreciation and amortization
expense for the nine months ended September 30, 2022 includes a
gain of $23 million on the sale of our ethanol plant located in
Jefferson, Wisconsin (Jefferson ethanol plant).
(c)
General and administrative
expenses (excluding depreciation and amortization expense) for the
nine months ended September 30, 2022 includes a charge of $20
million for an environmental reserve adjustment associated with a
non-operating site.
(d)
“Other income, net” includes the
following:
°
a net gain of $11 million in the
nine months ended September 30, 2023 related to the early
retirement of $199 million aggregate principal amount of various
series of our senior notes; and
°
a gain of $26 million in the
three months ended September 30, 2022 and a net charge of $24
million in the nine months ended September 30, 2022 related to the
early retirement of $1.25 billion and $2.65 billion, respectively,
aggregate principal amount of various series of our senior
notes.
(e)
We use certain financial measures
(as noted below) in the earnings release tables and accompanying
earnings release that are not defined under GAAP and are considered
to be non-GAAP measures.
We have defined these non-GAAP
measures and believe they are useful to the external users of our
financial statements, including industry analysts, investors,
lenders, and rating agencies. We believe these measures are useful
to assess our ongoing financial performance because, when
reconciled to their most comparable GAAP measures, they provide
improved comparability between periods after adjusting for certain
items that we believe are not indicative of our core operating
performance and that may obscure our underlying business results
and trends. These non-GAAP measures should not be considered as
alternatives to their most comparable GAAP measures nor should they
be considered in isolation or as a substitute for an analysis of
our results of operations as reported under GAAP. In addition,
these non-GAAP measures may not be comparable to similarly titled
measures used by other companies because we may define them
differently, which diminishes their utility.
Non-GAAP measures are as
follows:
°
Adjusted net income
attributable to Valero Energy Corporation stockholders is
defined as net income attributable to Valero Energy Corporation
stockholders adjusted to reflect the items noted below, along with
their related income tax effect. The income tax effect for the
adjustments was calculated using a combined federal and state
statutory rate for the U.S.-based adjustments of 22.5 percent and a
local statutory income tax rate for foreign-based adjustments. We
have adjusted for these items because we believe that they are not
indicative of our core operating performance and that their
adjustment results in an important measure of our ongoing financial
performance to better assess our underlying business results and
trends. The basis for our belief with respect to each adjustment is
provided below.
–
Modification of RVO – The net benefit
resulting from the modification of our RVO for 2020 and 2021 that
was recognized by us in June 2022 is not associated with the cost
of the RVO generated by our operations during the nine months ended
September 30, 2022. See note (a) for additional details.
–
Gain on sale of ethanol plant – The gain
on the sale of our Jefferson ethanol plant (see note (b)) is not
indicative of our ongoing operations.
–
Environmental reserve adjustment – The
environmental reserve adjustment (see note (c)) is attributable to
a site that was shut down by prior owners and subsequently acquired
by us (referred to by us as a non-operating site).
–
Loss (gain) on early retirement of debt –
Discounts, premiums, and other expenses recognized in connection
with the early retirement of various series of our senior notes
(see note (d)) are not associated with the ongoing costs of our
borrowing and financing activities.
°
Adjusted earnings per common
share – assuming dilution is defined as adjusted net income
attributable to Valero Energy Corporation stockholders divided by
the number of weighted-average shares outstanding in the applicable
period, assuming dilution.
°
Refining margin is defined
as Refining segment operating income excluding the modification of
RVO adjustment (see note (a)), operating expenses (excluding
depreciation and amortization expense), depreciation and
amortization expense, and other operating expenses. We believe
Refining margin is an important measure of our Refining segment’s
operating and financial performance as it is the most comparable
measure to the industry’s market reference product margins, which
are used by industry analysts, investors, and others to evaluate
our performance.
°
Renewable Diesel margin is
defined as Renewable Diesel segment operating income excluding
operating expenses (excluding depreciation and amortization
expense) and depreciation and amortization expense. We believe
Renewable Diesel margin is an important measure of our Renewable
Diesel segment’s operating and financial performance as it is the
most comparable measure to the industry’s market reference product
margins, which are used by industry analysts, investors, and others
to evaluate our performance.
°
Ethanol margin is defined
as Ethanol segment operating income excluding operating expenses
(excluding depreciation and amortization expense), depreciation and
amortization expense, and other operating expenses. We believe
Ethanol margin is an important measure of our Ethanol segment’s
operating and financial performance as it is the most comparable
measure to the industry’s market reference product margins, which
are used by industry analysts, investors, and others to evaluate
our performance.
°
Adjusted Refining operating
income is defined as Refining segment operating income
excluding the modification of RVO adjustment (see note (a)) and
other operating expenses. We believe adjusted Refining operating
income is an important measure of our Refining segment’s operating
and financial performance because it excludes items that are not
indicative of that segment’s core operating performance.
°
Adjusted Ethanol operating
income is defined as Ethanol segment operating income excluding
the gain on sale of ethanol plant (see note (b)) and other
operating expenses. We believe adjusted Ethanol operating income is
an important measure of our Ethanol segment’s operating and
financial performance because it excludes items that are not
indicative of that segment’s core operating performance.
°
Adjusted net cash provided by
operating activities is defined as net cash provided by
operating activities excluding the items noted below. We believe
adjusted net cash provided by operating activities is an important
measure of our ongoing financial performance to better assess our
ability to generate cash to fund our investing and financing
activities. The basis for our belief with respect to each excluded
item is provided below.
–
Changes in current assets and current
liabilities – Current assets net of current liabilities represents
our operating liquidity. We believe that the change in our
operating liquidity from period to period does not represent cash
generated by our operations that is available to fund our investing
and financing activities.
–
DGD’s adjusted net cash provided by
operating activities attributable to the other joint venture
member’s ownership interest in DGD – We are a 50 percent joint
venture member in DGD and we consolidate DGD’s financial
statements. Our Renewable Diesel segment includes the operations of
DGD and the associated activities to market its products. Because
we consolidate DGD’s financial statements, all of DGD’s net cash
provided by operating activities (or operating cash flow) is
included in our consolidated net cash provided by operating
activities.
DGD’s members use DGD’s operating cash
flow (excluding changes in its current assets and current
liabilities) to fund its capital investments rather than distribute
all of that cash to themselves. Nevertheless, DGD’s operating cash
flow is effectively attributable to each member and only 50 percent
of DGD’s operating cash flow should be attributed to our net cash
provided by operating activities. Therefore, we have adjusted our
net cash provided by operating activities for the portion of DGD’s
operating cash flow attributable to the other joint venture
member’s ownership interest because we believe that it more
accurately reflects the operating cash flow available to us to fund
our investing and financing activities. The adjustment is
calculated as follows (in millions):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
DGD operating cash flow data
Net cash provided by (used in) operating
activities
$
(28
)
$
512
$
487
$
661
Exclude: Changes in current assets and
current
liabilities
(192
)
273
(408
)
73
Adjusted net cash provided by
operating
activities
164
239
895
588
Other joint venture member’s ownership
interest
50
%
50
%
50
%
50
%
DGD’s adjusted net cash provided by
operating
activities attributable to the other joint
venture
member’s ownership interest in DGD
$
82
$
119
$
447
$
294
°
Capital investments attributable to Valero is defined as all
capital expenditures and deferred turnaround and catalyst cost
expenditures presented in our consolidated statements of cash
flows, excluding the portion of DGD’s capital investments
attributable to the other joint venture member and all of the
capital expenditures of VIEs other than DGD.
DGD’s members use DGD’s operating cash flow (excluding changes in
its current assets and current liabilities) to fund its capital
investments rather than distribute all of that cash to themselves.
Because DGD’s operating cash flow is effectively attributable to
each member, only 50 percent of DGD’s capital investments should be
attributed to our net share of total capital investments. We also
exclude the capital expenditures of other VIEs that we consolidate
because we do not operate those VIEs. We believe capital
investments attributable to Valero is an important measure because
it more accurately reflects our capital investments.
(f)
The Refining segment regions reflected herein contain the following
refineries:
U.S. Gulf Coast- Corpus Christi East,
Corpus Christi West, Houston, Meraux, Port Arthur, St. Charles,
Texas City, and Three Rivers Refineries;
U.S. Mid
Continent- Ardmore, McKee, and Memphis Refineries;
North
Atlantic- Pembroke and Quebec City Refineries; and
U.S.
West Coast- Benicia and Wilmington Refineries.
(g)
Primarily includes petrochemicals, gas oils, No. 6 fuel oil,
petroleum coke, sulfur, and asphalt.
(h)
Valero uses certain operating statistics (as noted below) in the
earnings release tables and the accompanying earnings release to
evaluate performance between comparable periods. Different
companies may calculate them in different ways.
All per barrel of throughput, per gallon of sales, and per gallon
of production amounts are calculated by dividing the associated
dollar amount by the throughput volumes, sales volumes, and
production volumes for the period, as applicable.
Throughput volumes, sales volumes, and production volumes are
calculated by multiplying throughput volumes per day, sales volumes
per day, and production volumes per day (as provided in the
accompanying tables), respectively, by the number of days in the
applicable period. We use throughput volumes, sales volumes, and
production volumes for the Refining segment, Renewable Diesel
segment, and Ethanol segment, respectively, due to their general
use by others who operate facilities similar to those included in
our segments. We believe the use of such volumes results in per
unit amounts that are most representative of the product margins
generated and the operating costs incurred as a result of our
operation of those facilities.
(i)
The RVO cost represents the average market cost on a per barrel
basis to comply with the RFS program. The RVO cost is calculated by
multiplying (i) the average market price during the applicable
period for the RINs associated with each class of renewable fuel
(i.e., biomass-based diesel, cellulosic biofuel, advanced biofuel,
and total renewable fuel) by (ii) the quotas for the volume of each
class of renewable fuel that must be blended into petroleum-based
transportation fuels consumed in the U.S., as set or proposed by
the EPA, on a percentage basis for each class of renewable fuel and
adding together the results of each calculation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231025607727/en/
Valero Contacts
Investors: Homer Bhullar, Vice President – Investor Relations
and Finance, 210-345-1982 Eric Herbort, Director – Investor
Relations and Finance, 210-345-3331 Gautam Srivastava, Director –
Investor Relations, 210-345-3992
Media: Lillian Riojas, Executive Director – Media Relations and
Communications, 210-345-5002
Valero Energy (NYSE:VLO)
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