Valero Energy Corporation (NYSE:VLO) (“Valero”) today reported net
income attributable to Valero stockholders of $305 million, or
$0.68 per share, for the first quarter of 2017 compared to $495
million, or $1.05 per share, for the first quarter of
2016. Excluding adjustments shown in the accompanying
earnings release tables, first quarter 2016 adjusted net income
attributable to Valero stockholders was $283 million, or $0.60
per share.
“Our team finished another quarter with solid
operating results despite a heavy maintenance schedule,” said Joe
Gorder, Valero Chairman, President and Chief Executive
Officer. “Our focus on safe, reliable operations continues to
underpin Valero’s ability to deliver distinctive financial
performance even in a soft margin environment.”
RefiningThe refining segment
reported $647 million of operating income for the first quarter of
2017, compared to $915 million for the first quarter of 2016.
First quarter 2017 operating income is in line with first
quarter 2016 adjusted operating income of $652 million. The
2016 refining segment results have been retrospectively revised for
the effect of reflecting the operating results of Valero Energy
Partners LP (NYSE:VLP) as a separate segment consistent with
Valero’s current segment presentation, and those revised results
have been adjusted to exclude the lower of cost or market inventory
valuation adjustment, as shown in the accompanying earnings release
tables.
Valero’s refineries achieved 91 percent
throughput capacity utilization and averaged 2.8 million barrels
per day of throughput volume in the first quarter of 2017, which
was in line with the first quarter of 2016.
“Our refining team safely executed turnarounds
at the Benicia, Texas City, St. Charles, and Meraux refineries,”
Gorder said. “With the bulk of this year’s planned
maintenance behind us, our refineries should be well positioned to
capture available margin opportunities.”
Biofuel blending costs were $146 million in the
first quarter of 2017, which was $15 million lower than the first
quarter of 2016, mainly due to lower RINs prices.
EthanolThe ethanol segment
reported $22 million of operating income for the first quarter of
2017, compared to $39 million for the first quarter of 2016.
Excluding the lower of cost or market inventory valuation
adjustment, as shown in the accompanying earnings release tables,
adjusted operating income for the first quarter of 2016 was $9
million. The increase in operating income in the first
quarter of 2017 compared to the first quarter 2016 adjusted amount
was due primarily to stronger ethanol prices. Ethanol
production volumes averaged 4 million gallons per day in the
first quarter of 2017, which was 301,000 gallons per day higher
than the first quarter of 2016. Strong demand for ethanol
exports is expected to continue, and domestic ethanol consumption
is projected to improve as gasoline season approaches.
VLPAs disclosed in Valero’s
2016 Form 10-K, management created the VLP segment effective
January 1, 2017, which reflects the operations of VLP, to align
Valero’s segment reporting with the way its chief operating
decision maker manages and allocates resources to the
business. For the first quarter of 2017, the VLP segment
reported $70 million of operating income, compared to
$43 million for the first quarter of 2016. The increase
in operating income was driven primarily by contributions from the
McKee Terminal Services and the Meraux and Three Rivers Terminal
Services businesses, which were acquired by VLP from Valero in the
second and third quarters of 2016, respectively.
Corporate and OtherGeneral and
administrative expenses were $190 million in the first quarter
of 2017. The effective tax rate of 26 percent in the
first quarter of 2017 was lower than expected due to a reduction in
the statutory tax rate in Quebec and from the favorable resolution
of several state income tax audits.
Investing and Financing
ActivitiesCapital investments totaled $641 million in
the first quarter of 2017, of which $245 million was for
turnarounds and catalyst.
Valero paid $315 million in dividends and
purchased 4.7 million shares of its common stock for
$314 million, resulting in total cash returned to stockholders
of $629 million in the first quarter of 2017. The
company continues to target a total payout ratio of at least 75
percent in 2017. Valero defines total payout ratio as the sum
of dividends plus stock buybacks divided by adjusted net income
from continuing operations attributable to Valero
stockholders.
The company generated $988 million of net cash
from operating activities. Included in this amount is a
working capital benefit of $151 million for the quarter.
Excluding working capital, net cash generated was $837 million.
Liquidity and Financial
PositionValero ended the first quarter of 2017 with
$8.5 billion of total debt and $4.5 billion of cash and
temporary cash investments. The debt to capital ratio, net of
$2.0 billion in cash, was approximately
24 percent.
Strategic UpdateValero remains
on track to invest $2.7 billion of total capital this year,
consisting of $1.1 billion for growth projects and $1.6 billion for
sustaining the business. Included in the company’s growth
investments are the Diamond Pipeline, the Diamond Green Diesel
capacity expansion, the Houston alkylation unit, and the Wilmington
cogeneration plant. Sustaining investments include
turnarounds and catalyst in addition to Tier 3 gasoline compliance
projects.
“U.S. refined product inventories have declined
and are within their five-year ranges,” said Gorder. “Demand
for gasoline and distillate remains strong both domestically and
internationally. Combined with expectations for continued
sweet crude oil production growth and relatively low prices for
crude and refined products, consumer demand should be robust this
year.”
The company exported a total of 365,000 barrels
per day of gasoline and diesel during the first quarter.
Conference CallValero’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 ValeroValero Energy
Corporation, through its subsidiaries, is an international
manufacturer and marketer of transportation fuels and other
petrochemical products. Valero, a Fortune 50 company based in
San Antonio, Texas, with approximately 10,000 employees, is an
independent petroleum refiner and ethanol producer, and its assets
include 15 petroleum refineries with a combined throughput
capacity of approximately 3.1 million barrels per day and
11 ethanol plants with a combined production capacity of
1.4 billion gallons per year. The petroleum refineries
are located in the United States (U.S.), Canada and the United
Kingdom (U.K.), and the ethanol plants are located in the
Mid-Continent region of the U.S. In addition, Valero owns the
2 percent general partner interest and a majority limited partner
interest in Valero Energy Partners LP, a midstream master limited
partnership. Valero sells its products in both the wholesale
rack and bulk markets, and approximately 7,400 outlets carry
Valero’s brand names in the U.S., Canada, the U.K. and
Ireland. Please visit www.valero.com for more
information.
Valero ContactsInvestors:John
Locke, Vice President – Investor Relations, 210-345-3077Karen Ngo,
Senior Manager – Investor Relations, 210-345-4574Tom Mahrer,
Manager – Investor Relations, 210-345-1953
Media:Lillian Riojas, Director – Media Relations
and Communications, 210-345-5002
Safe-Harbor StatementStatements
contained in this release that state the company’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,” and other similar expressions identify forward-looking
statements. It is important to note that actual results could
differ materially from those projected in such forward-looking
statements. For more information concerning factors that
could cause actual results to differ from those expressed or
forecasted, see Valero’s annual reports on Form 10-K and quarterly
reports on Form 10-Q filed with the SEC and on Valero’s website at
www.valero.com, and VLP’s annual reports on Form 10-K and quarterly
reports on Form 10-Q filed with the SEC and on VLP’s website at
www.valeroenergypartners.com.
Use of Non-GAAP Financial
InformationThis 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, adjusted operating income, and
gross margin. We have included these non-GAAP financial
measures to help facilitate the comparison of operating results
between periods. See the accompanying earnings release tables
for a reconciliation of these non-GAAP measures to their most
directly comparable U.S. GAAP measures. In note (c) to the earnings
release tables, we disclose the reasons why we believe our use of
these non-GAAP financial measures provides useful information.
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS |
(millions of dollars, except per share
amounts) |
(unaudited) |
|
|
|
|
Three Months Ended March 31, |
|
|
|
2017 |
|
2016 |
Statement of
income data |
|
|
|
|
|
Operating revenues |
|
$ |
21,772 |
|
|
$ |
15,714 |
|
Costs and
expenses: |
|
|
|
|
|
Cost of sales (excluding the lower of cost or market inventory
valuation adjustment) |
|
19,428 |
|
|
13,507 |
|
Lower of cost or market inventory valuation adjustment (a) |
|
— |
|
|
(293 |
) |
Operating
expenses |
|
|
1,117 |
|
|
1,030 |
|
General
and administrative expenses |
|
|
190 |
|
|
156 |
|
Depreciation and amortization expense |
|
|
500 |
|
|
485 |
|
Total
costs and expenses |
|
|
21,235 |
|
|
14,885 |
|
Operating
income |
|
|
537 |
|
|
829 |
|
Other
income, net |
|
|
17 |
|
|
9 |
|
Interest and debt expense, net of capitalized interest |
|
(121 |
) |
|
(108 |
) |
Income
before income tax expense |
|
|
433 |
|
|
730 |
|
Income
tax expense |
|
|
112 |
|
|
217 |
|
Net
income |
|
|
321 |
|
|
513 |
|
Less: Net income attributable to noncontrolling interests |
|
16 |
|
|
18 |
|
Net income attributable to Valero Energy Corporation
stockholders |
|
$ |
305 |
|
|
$ |
495 |
|
|
|
|
|
|
|
Earnings per
common share |
|
|
$ |
0.68 |
|
|
$ |
1.05 |
|
Weighted-average common shares outstanding (in millions) |
|
448 |
|
|
469 |
|
|
|
|
|
|
|
Earnings per
common share – assuming dilution |
|
|
$ |
0.68 |
|
|
$ |
1.05 |
|
Weighted-average common shares outstanding – assumingdilution
(in millions) |
|
451 |
|
|
471 |
|
|
|
|
|
|
|
Dividends per
common share |
|
|
$ |
0.70 |
|
|
$ |
0.60 |
|
|
|
See Notes to Earnings Release Tables. |
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
FINANCIAL HIGHLIGHTS BY SEGMENT |
(millions of dollars) |
(unaudited) |
|
|
Refining (b) |
|
Ethanol |
|
VLP (b) |
|
CorporateandEliminations |
|
Total |
Three months
ended March 31, 2017 |
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
Operating
revenues from external customers |
$ |
20,887 |
|
|
$ |
885 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
21,772 |
|
Intersegment revenues |
— |
|
|
60 |
|
|
106 |
|
|
(166 |
) |
|
— |
|
Total
operating revenues |
20,887 |
|
|
945 |
|
|
106 |
|
|
(166 |
) |
|
21,772 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
Cost of
sales: |
|
|
|
|
|
|
|
|
|
Cost of
sales from external customers |
18,641 |
|
|
787 |
|
|
— |
|
|
— |
|
|
19,428 |
|
Intersegment cost of sales |
166 |
|
|
— |
|
|
— |
|
|
(166 |
) |
|
— |
|
Total
cost of sales |
18,807 |
|
|
787 |
|
|
— |
|
|
(166 |
) |
|
19,428 |
|
Operating
expenses |
984 |
|
|
109 |
|
|
24 |
|
|
— |
|
|
1,117 |
|
General
and administrative expenses |
— |
|
|
— |
|
|
— |
|
|
190 |
|
|
190 |
|
Depreciation and amortization expense |
449 |
|
|
27 |
|
|
12 |
|
|
12 |
|
|
500 |
|
Total
costs and expenses |
20,240 |
|
|
923 |
|
|
36 |
|
|
36 |
|
|
21,235 |
|
Operating
income |
$ |
647 |
|
|
$ |
22 |
|
|
$ |
70 |
|
|
$ |
(202 |
) |
|
$ |
537 |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended March 31, 2016 |
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
Operating
revenues from external customers |
$ |
14,920 |
|
|
$ |
794 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
15,714 |
|
Intersegment revenues |
— |
|
|
34 |
|
|
79 |
|
|
(113 |
) |
|
— |
|
Total
operating revenues |
14,920 |
|
|
828 |
|
|
79 |
|
|
(113 |
) |
|
15,714 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
Cost of
sales (excluding the lower of cost or marketinventory valuation
adjustment): |
|
|
|
|
|
|
|
|
|
Cost of
sales from external customers |
12,799 |
|
|
708 |
|
|
— |
|
|
— |
|
|
13,507 |
|
Intersegment cost of sales |
113 |
|
|
— |
|
|
— |
|
|
(113 |
) |
|
— |
|
Total
cost of sales (excluding the lower of cost ormarket inventory
valuation adjustment) |
12,912 |
|
|
708 |
|
|
— |
|
|
(113 |
) |
|
13,507 |
|
Lower of
cost or market inventory valuationadjustment (a) |
(263 |
) |
|
(30 |
) |
|
— |
|
|
— |
|
|
(293 |
) |
Operating
expenses |
907 |
|
|
99 |
|
|
24 |
|
|
— |
|
|
1,030 |
|
General
and administrative expenses |
— |
|
|
— |
|
|
— |
|
|
156 |
|
|
156 |
|
Depreciation and amortization expense |
449 |
|
|
12 |
|
|
12 |
|
|
12 |
|
|
485 |
|
Total
costs and expenses |
14,005 |
|
|
789 |
|
|
36 |
|
|
55 |
|
|
14,885 |
|
Operating
income |
$ |
915 |
|
|
$ |
39 |
|
|
$ |
43 |
|
|
$ |
(168 |
) |
|
$ |
829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Operating Highlights by Segment. |
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (c) |
(millions of dollars, except per share
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Reconciliation
of net income attributable to Valero
EnergyCorporation stockholders to adjusted net
incomeattributable to Valero Energy Corporation
stockholders |
|
|
|
|
Net
income attributable to Valero Energy Corporation stockholders |
|
$ |
305 |
|
|
$ |
495 |
|
Exclude
adjustment: |
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
293 |
|
Income
tax expense related to the lower of cost or market inventory
valuation adjustment |
|
— |
|
|
(81 |
) |
Lower of
cost or market inventory valuation adjustment,net of taxes |
|
— |
|
|
212 |
|
Adjusted
net income attributable to Valero Energy Corporation
stockholders |
|
$ |
305 |
|
|
$ |
283 |
|
|
|
|
|
|
Reconciliation
of earnings per common share – assumingdilution to
adjusted earnings per common share –assuming
dilution |
|
|
|
|
Earnings
per common share – assuming dilution |
|
$ |
0.68 |
|
|
$ |
1.05 |
|
Exclude
adjustment: Lower of cost or market inventoryvaluation adjustment,
net of taxes (a) |
|
— |
|
|
0.45 |
|
Adjusted
earnings per common share – assuming dilution |
|
$ |
0.68 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (c) |
(millions of dollars) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Reconciliation
of operating income to gross marginand
reconciliation of operating income to
adjustedoperating income |
|
|
|
|
Refining segment (b) |
|
|
|
|
Operating
income |
|
$ |
647 |
|
|
$ |
915 |
|
Add
back: |
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
(263 |
) |
Operating
expenses |
|
984 |
|
|
907 |
|
Depreciation and amortization expense |
|
449 |
|
|
449 |
|
Gross
margin |
|
$ |
2,080 |
|
|
$ |
2,008 |
|
|
|
|
|
|
Operating
income |
|
$ |
647 |
|
|
$ |
915 |
|
Exclude
adjustment: Lower of cost or market inventory valuationadjustment
(a) |
|
— |
|
|
263 |
|
Adjusted
operating income |
|
$ |
647 |
|
|
$ |
652 |
|
|
|
|
|
|
Ethanol segment |
|
|
|
|
Operating
income |
|
$ |
22 |
|
|
$ |
39 |
|
Add
back: |
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
(30 |
) |
Operating
expenses |
|
109 |
|
|
99 |
|
Depreciation and amortization expense |
|
27 |
|
|
12 |
|
Gross
margin |
|
$ |
158 |
|
|
$ |
120 |
|
|
|
|
|
|
Operating
income |
|
$ |
22 |
|
|
$ |
39 |
|
Exclude
adjustment: Lower of cost or market inventory valuationadjustment
(a) |
|
— |
|
|
30 |
|
Adjusted
operating income |
|
$ |
22 |
|
|
$ |
9 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (c) |
(millions of dollars) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Reconciliation
of operating income to gross marginand
reconciliation of operating income to
adjustedoperating income by refining segment
region (d) |
|
|
|
|
U.S. Gulf Coast region (b) |
|
|
|
|
Operating
income |
|
$ |
373 |
|
|
$ |
419 |
|
Add
back: |
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
(19 |
) |
Operating
expenses |
|
572 |
|
|
519 |
|
Depreciation and amortization expense |
|
279 |
|
|
256 |
|
Gross
margin |
|
$ |
1,224 |
|
|
$ |
1,175 |
|
|
|
|
|
|
Operating
income |
|
$ |
373 |
|
|
$ |
419 |
|
Exclude
adjustment: Lower of cost or market inventory valuationadjustment
(a) |
|
— |
|
|
19 |
|
Adjusted
operating income |
|
$ |
373 |
|
|
$ |
400 |
|
|
|
|
|
|
U.S. Mid-Continent region (b) |
|
|
|
|
Operating
income |
|
$ |
107 |
|
|
$ |
72 |
|
Add
back: |
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
(5 |
) |
Operating
expenses |
|
146 |
|
|
135 |
|
Depreciation and amortization expense |
|
66 |
|
|
69 |
|
Gross
margin |
|
$ |
319 |
|
|
$ |
271 |
|
|
|
|
|
|
Operating
income |
|
$ |
107 |
|
|
$ |
72 |
|
Exclude
adjustment: Lower of cost or market inventory valuationadjustment
(a) |
|
— |
|
|
5 |
|
Adjusted
operating income |
|
$ |
107 |
|
|
$ |
67 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
RECONCILIATION OF NON-GAAP MEASURES TO MOST
COMPARABLE AMOUNTS |
REPORTED UNDER U.S. GAAP (c) |
(millions of dollars) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Reconciliation
of operating income to gross marginand
reconciliation of operating income to
adjustedoperating income by refining segment
region (d)(continued) |
|
|
|
|
North Atlantic region |
|
|
|
|
Operating
income |
|
$ |
197 |
|
|
$ |
403 |
|
Add
back: |
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
(236 |
) |
Operating
expenses |
|
132 |
|
|
125 |
|
Depreciation and amortization expense |
|
48 |
|
|
50 |
|
Gross
margin |
|
$ |
377 |
|
|
$ |
342 |
|
|
|
|
|
|
Operating
income |
|
$ |
197 |
|
|
$ |
403 |
|
Exclude
adjustment: Lower of cost or market inventory valuationadjustment
(a) |
|
— |
|
|
236 |
|
Adjusted
operating income |
|
$ |
197 |
|
|
$ |
167 |
|
|
|
|
|
|
U.S. West Coast region |
|
|
|
|
Operating
income (loss) |
|
$ |
(30 |
) |
|
$ |
21 |
|
Add
back: |
|
|
|
|
Lower of
cost or market inventory valuation adjustment (a) |
|
— |
|
|
(3 |
) |
Operating
expenses |
|
134 |
|
|
128 |
|
Depreciation and amortization expense |
|
56 |
|
|
74 |
|
Gross
margin |
|
$ |
160 |
|
|
$ |
220 |
|
|
|
|
|
|
Operating
income (loss) |
|
$ |
(30 |
) |
|
$ |
21 |
|
Exclude
adjustment: Lower of cost or market inventory valuationadjustment
(a) |
|
— |
|
|
3 |
|
Adjusted
operating income (loss) |
|
$ |
(30 |
) |
|
$ |
18 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Throughput
volumes (thousand barrels per day) |
|
|
|
|
Feedstocks: |
|
|
|
|
Heavy
sour crude oil |
|
448 |
|
|
427 |
|
Medium/light sour crude oil |
|
455 |
|
|
533 |
|
Sweet
crude oil |
|
1,245 |
|
|
1,172 |
|
Residuals |
|
235 |
|
|
289 |
|
Other
feedstocks |
|
149 |
|
|
136 |
|
Total
feedstocks |
|
2,532 |
|
|
2,557 |
|
Blendstocks and other |
|
306 |
|
|
322 |
|
Total
throughput volumes |
|
2,838 |
|
|
2,879 |
|
|
|
|
|
|
Yields
(thousand barrels per day) |
|
|
|
|
Gasolines
and blendstocks |
|
1,360 |
|
|
1,378 |
|
Distillates |
|
1,090 |
|
|
1,067 |
|
Other
products (e) |
|
425 |
|
|
470 |
|
Total
yields |
|
2,875 |
|
|
2,915 |
|
|
|
|
|
|
Operating
statistics (b) |
|
|
|
|
Gross
margin (c) |
|
$ |
2,080 |
|
|
$ |
2,008 |
|
Adjusted
operating income (c) |
|
$ |
647 |
|
|
$ |
652 |
|
Throughput volumes (thousand barrels per day) |
|
2,838 |
|
|
2,879 |
|
|
|
|
|
|
Throughput margin per barrel (f) |
|
$ |
8.14 |
|
|
$ |
7.66 |
|
Operating
costs per barrel: |
|
|
|
|
Operating
expenses |
|
3.85 |
|
|
3.46 |
|
Depreciation and amortization expense |
|
1.76 |
|
|
1.71 |
|
Total
operating costs per barrel |
|
5.61 |
|
|
5.17 |
|
Adjusted
operating income per barrel (g) |
|
$ |
2.53 |
|
|
$ |
2.49 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
ETHANOL SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per gallon
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Operating
statistics |
|
|
|
|
Gross
margin (c) |
|
$ |
158 |
|
|
$ |
120 |
|
Adjusted
operating income (c) |
|
$ |
22 |
|
|
$ |
9 |
|
Production volumes (thousand gallons per day) |
|
4,041 |
|
|
3,740 |
|
|
|
|
|
|
Gross
margin per gallon of production (f) |
|
$ |
0.43 |
|
|
$ |
0.35 |
|
Operating
costs per gallon of production: |
|
|
|
|
Operating
expenses |
|
0.30 |
|
|
0.29 |
|
Depreciation and amortization expense |
|
0.07 |
|
|
0.03 |
|
Total
operating costs per gallon of production |
|
0.37 |
|
|
0.32 |
|
Adjusted
operating income per gallon of production (g) |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
VLP SEGMENT OPERATING HIGHLIGHTS
(b) |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Volumes
(thousand barrels per day) |
|
|
|
|
Pipeline
transportation throughput |
|
962 |
|
|
919 |
|
Terminaling throughput |
|
2,734 |
|
|
1,850 |
|
|
|
|
|
|
Operating
statistics |
|
|
|
|
Pipeline
transportation revenue |
|
$ |
23 |
|
|
$ |
20 |
|
Pipeline
transportation revenue per barrel (f) |
|
$ |
0.27 |
|
|
$ |
0.24 |
|
|
|
|
|
|
Terminaling revenue |
|
$ |
83 |
|
|
$ |
59 |
|
Terminaling revenue per barrel (f) |
|
$ |
0.34 |
|
|
$ |
0.35 |
|
|
|
|
|
|
Total
operating revenues |
|
$ |
106 |
|
|
$ |
79 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Refining
segment operating statistics by region (d) |
|
|
|
|
U.S. Gulf Coast region (b) |
|
|
|
|
Gross
margin (c) |
|
$ |
1,224 |
|
|
$ |
1,175 |
|
Adjusted
operating income (c) |
|
$ |
373 |
|
|
$ |
400 |
|
Throughput volumes (thousand barrels per day) |
|
1,703 |
|
|
1,693 |
|
|
|
|
|
|
Throughput margin per barrel (f) |
|
$ |
7.98 |
|
|
$ |
7.63 |
|
Operating
costs per barrel: |
|
|
|
|
Operating
expenses |
|
3.73 |
|
|
3.37 |
|
Depreciation and amortization expense |
|
1.82 |
|
|
1.66 |
|
Total
operating costs per barrel |
|
5.55 |
|
|
5.03 |
|
Adjusted
operating income per barrel (g) |
|
$ |
2.43 |
|
|
$ |
2.60 |
|
|
|
|
|
|
U.S. Mid-Continent region (b) |
|
|
|
|
Gross
margin (c) |
|
$ |
319 |
|
|
$ |
271 |
|
Adjusted
operating income (c) |
|
$ |
107 |
|
|
$ |
67 |
|
Throughput volumes (thousand barrels per day) |
|
445 |
|
|
455 |
|
|
|
|
|
|
Throughput margin per barrel (f) |
|
$ |
7.98 |
|
|
$ |
6.53 |
|
Operating
costs per barrel: |
|
|
|
|
Operating
expenses |
|
3.65 |
|
|
3.26 |
|
Depreciation and amortization expense |
|
1.66 |
|
|
1.66 |
|
Total
operating costs per barrel |
|
5.31 |
|
|
4.92 |
|
Adjusted
operating income per barrel (g) |
|
$ |
2.67 |
|
|
$ |
1.61 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
REFINING SEGMENT OPERATING
HIGHLIGHTS |
(millions of dollars, except per barrel
amounts) |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Refining
segment operating statistics by region
(d)(continued) |
|
|
|
|
North Atlantic region |
|
|
|
|
Gross
margin (c) |
|
$ |
377 |
|
|
$ |
342 |
|
Adjusted
operating income (c) |
|
$ |
197 |
|
|
$ |
167 |
|
Throughput volumes (thousand barrels per day) |
|
490 |
|
|
472 |
|
|
|
|
|
|
Throughput margin per barrel (f) |
|
$ |
8.55 |
|
|
$ |
7.94 |
|
Operating
costs per barrel: |
|
|
|
|
Operating
expenses |
|
2.98 |
|
|
2.90 |
|
Depreciation and amortization expense |
|
1.11 |
|
|
1.16 |
|
Total
operating costs per barrel |
|
4.09 |
|
|
4.06 |
|
Adjusted
operating income per barrel (g) |
|
$ |
4.46 |
|
|
$ |
3.88 |
|
|
|
|
|
|
U.S. West Coast region |
|
|
|
|
Gross
margin (c) |
|
$ |
160 |
|
|
$ |
220 |
|
Adjusted
operating income (loss) (c) |
|
$ |
(30 |
) |
|
$ |
18 |
|
Throughput volumes (thousand barrels per day) |
|
200 |
|
|
259 |
|
|
|
|
|
|
Throughput margin per barrel (f) |
|
$ |
8.86 |
|
|
$ |
9.34 |
|
Operating
costs per barrel: |
|
|
|
|
Operating
expenses |
|
7.41 |
|
|
5.43 |
|
Depreciation and amortization expense |
|
3.10 |
|
|
3.16 |
|
Total
operating costs per barrel |
|
10.51 |
|
|
8.59 |
|
Adjusted
operating income (loss) per barrel (g) |
|
$ |
(1.65 |
) |
|
$ |
0.75 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
AVERAGE MARKET REFERENCE PRICES AND
DIFFERENTIALS |
(unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Feedstocks
(dollars per barrel) |
|
|
|
|
Brent
crude oil |
|
$ |
54.65 |
|
|
$ |
35.14 |
|
Brent
less West Texas Intermediate (WTI) crude oil |
|
2.82 |
|
|
1.90 |
|
Brent
less Alaska North Slope (ANS) crude oil |
|
0.82 |
|
|
0.69 |
|
Brent
less Louisiana Light Sweet (LLS) crude oil (h) |
|
1.13 |
|
|
0.05 |
|
Brent
less Argus Sour Crude Index (ASCI) crude oil (i) |
|
5.05 |
|
|
5.37 |
|
Brent
less Maya crude oil |
|
9.93 |
|
|
9.09 |
|
LLS crude
oil (h) |
|
53.52 |
|
|
35.09 |
|
LLS less
ASCI crude oil (h) (i) |
|
3.92 |
|
|
5.32 |
|
LLS less
Maya crude oil (h) |
|
8.80 |
|
|
9.04 |
|
WTI crude
oil |
|
51.83 |
|
|
33.24 |
|
|
|
|
|
|
Natural gas
(dollars per million British Thermal Units) |
|
2.95 |
|
|
1.93 |
|
|
|
|
|
|
Products
(dollars per barrel, unless otherwise noted) |
|
|
|
|
U.S. Gulf
Coast: |
|
|
|
|
CBOB
gasoline less Brent |
|
8.78 |
|
|
7.81 |
|
Ultra-low-sulfur diesel less Brent |
|
11.12 |
|
|
7.92 |
|
Propylene
less Brent |
|
1.22 |
|
|
(2.39 |
) |
CBOB
gasoline less LLS (h) |
|
9.91 |
|
|
7.86 |
|
Ultra-low-sulfur diesel less LLS (h) |
|
12.25 |
|
|
7.97 |
|
Propylene
less LLS (h) |
|
2.35 |
|
|
(2.34 |
) |
U.S.
Mid-Continent: |
|
|
|
|
CBOB
gasoline less WTI |
|
12.71 |
|
|
10.00 |
|
Ultra-low-sulfur diesel less WTI |
|
13.99 |
|
|
11.03 |
|
North
Atlantic: |
|
|
|
|
CBOB
gasoline less Brent |
|
8.68 |
|
|
10.30 |
|
Ultra-low-sulfur diesel less Brent |
|
12.06 |
|
|
9.53 |
|
U.S. West
Coast: |
|
|
|
|
CARBOB 87
gasoline less ANS |
|
16.77 |
|
|
17.34 |
|
CARB
diesel less ANS |
|
14.84 |
|
|
11.19 |
|
CARBOB 87
gasoline less WTI |
|
18.77 |
|
|
18.55 |
|
CARB
diesel less WTI |
|
16.84 |
|
|
12.40 |
|
New York
Harbor corn crush (dollars per gallon) |
|
0.23 |
|
|
0.13 |
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIES |
EARNINGS RELEASE TABLES |
OTHER FINANCIAL DATA |
(millions of dollars) |
(unaudited) |
|
|
|
March 31, |
|
December 31, |
|
|
2017 |
|
2016 |
Balance sheet
data |
|
|
|
|
Current
assets |
|
$ |
15,908 |
|
|
$ |
16,800 |
|
Cash and temporary cash investments included in current
assets |
4,463 |
|
|
4,816 |
|
Inventories included in current assets |
|
6,025 |
|
|
5,709 |
|
Current
liabilities |
|
7,899 |
|
|
8,328 |
|
Current portion of debt and capital lease obligations
includedin current liabilities |
120 |
|
|
115 |
|
Debt and capital lease obligations, less current portion |
8,369 |
|
|
7,886 |
|
Total
debt and capital lease obligations |
|
8,489 |
|
|
8,001 |
|
Valero
Energy Corporation stockholders’ equity |
|
19,825 |
|
|
20,024 |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Cash flow
data |
|
|
|
|
Net cash
provided by operating activities |
|
$ |
988 |
|
|
$ |
640 |
|
|
|
|
|
|
|
|
|
|
See Notes to Earnings Release Tables. |
|
VALERO ENERGY CORPORATION AND
SUBSIDIARIESNOTES TO EARNINGS RELEASE
TABLES
(a) During the three months ended March 31, 2016, we
recorded a change in our lower of cost or market inventory
valuation reserve that was established on December 31, 2015,
resulting in a noncash benefit of $293 million
($263 million and $30 million attributable to our
refining and ethanol segments, respectively).
(b) Effective January 1, 2017, we revised our reportable
segments to align with certain changes in how our chief operating
decision maker manages and allocates resources to our business and
created a new reportable segment — VLP. The
results of VLP, which are those of our majority-owned master
limited partnership referred to by the same name, were transferred
from the refining segment. Comparable prior period information for
our refining segment (as well as that segment’s U.S. Gulf Coast and
Mid-Continent regions) and VLP segment has been retrospectively
adjusted to reflect our current segment presentation.
(c) We use certain financial measures (as noted below) in the
earnings release tables and accompanying earnings release that are
not defined under U.S. 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 U.S. GAAP measures, they provide improved
comparability between periods through the exclusion of 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 U.S. GAAP measures nor should
they be considered in isolation or as a substitute for an analysis
of our results of operations as reported under U.S. 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 the utility of these
measures.
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 excluding
the lower of cost or market inventory valuation adjustment and its
related income tax effect.
- 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.
- Gross margin is defined as operating income
excluding the lower of cost or market inventory valuation
adjustment, operating expenses, and depreciation and amortization
expense.
- Adjusted operating income is defined as
operating income excluding the lower of cost or market inventory
valuation adjustment.
(d) The 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.
(e) Primarily includes petrochemicals, gas oils, No. 6 fuel
oil, petroleum coke, sulfur, and asphalt.
(f) Throughput margin per barrel represents
gross margin (defined in (c) above) for our refining segment or
refining regions divided by the respective throughput volumes.
Gross margin per gallon of production represents gross margin
(defined in (c) above) for our ethanol segment divided by
production volumes. Pipeline transportation revenue per barrel and
terminaling revenue per barrel represents pipeline transportation
revenue and terminaling revenue for our VLP segment divided by
pipeline transportation throughput and terminaling throughput
volumes, respectively. Throughput and production volumes are
calculated by multiplying throughput and production volumes per day
(as provided in the accompanying tables) by the number of days in
the applicable period.
(g) Adjusted operating income per barrel
represents adjusted operating income (defined in (c) above) for our
refining segment or refining regions divided by the respective
throughput volumes. Adjusted operating income per gallon of
production represents adjusted operating income (defined in (c)
above) for our ethanol segment divided by production volumes.
Throughput and production volumes are calculated by multiplying
throughput and production volumes per day (as provided in the
accompanying tables) by the number of days in the applicable
period.
(h) Average market reference prices for LLS
crude oil, along with price differentials between the price of LLS
crude oil and other types of crude oils are reflected without
adjusting for the impact of the futures pricing for the
corresponding delivery month. Therefore, the prices reported
reflect the prompt month pricing only, without an adjustment for
futures pricing (known in the industry as the Calendar Month
Average (CMA) “roll” adjustment). We previously had provided
average market reference prices that included the CMA “roll”
adjustment. Accordingly, the average market reference price for LLS
crude oil and price differentials for LLS crude oil for the three
months ended March 31, 2016 have been adjusted to conform to
the current presentation.
(i) Average market reference price differentials
to Mars crude oil have been replaced by average market reference
price differentials to Argus Sour Crude Index (ASCI) crude oil.
Mars crude oil is one of the three grades of sour crude oil used to
create ASCI crude oil, and therefore, ASCI crude oil is a more
comprehensive price marker for medium sour crude oil. Accordingly,
the price differentials for ASCI crude oil for the three months
ended March 31, 2016 are included to conform to the current
presentation.
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